Business that logged the worst session since march of 2020. 166 billion wiped out that is equal to the entire market cap of nike and amd or disney that cloud weakness spilled over into amazon. We will hear what amazon has to say tonight after the closing bell amazon shares off from yesterday at 1. 7 . Treasury yields picked up. The 2year treasury at 5. 12 thats the key level those are good facts you gave you can find a lot of companies uccompanies. Boeing ibm. Ge to lose that and still be worth a lot is the good news and bad news maybe good news and bad news morning. Uaw and ford reaching a tentative deal to end the sixweek strike. Phil lebeau is joining us with details coming out overnight good morning reporter good morning, andrew the final push for the deal was this week after the uaw called for more strikes ford earnings were set for thursday they finalized a deal. It kaulscalls for a 25 hike foe several four and a half years. There is more Profit Sharing for retirees here is shawn fain talking with the membership last night on facebook we send this contract to you because we know it breaks records. We know it will change lives what happens next is up to you reporter all right what is next for the uaw members who have been on strike since september 15th they will go back to work soon when remains to be seen. They will not wait for finalization details will be spelled out on sunday and the ratification vote will take place after that that remains to be seen. Likely in the next week is the ratification vote. The important part is they will go back to work soon a matter of days not waiting until it is fi fina finalized. All of this comes as you look at shares of ford when the company will report q3 results after the bell and Conference Call analysts are expecting earnings up 50 compared to the Third Quarter of last year still Strong Demand and pricing, especially on the f150 and suvs as a result, that is the focus on the Conference Call today not necessarily the q3 results, but theagreement that call is after the bell. They release after the bell and we get the ford call gm and stellantis have strikers at their plants. For gm, that strike is knocked out or stopped with 15 of the production in the United States. For stellantis, these strikes stopped 11 of its production here in the u. S. Guys, one down and two to go lets see you how long it takes for the uaw to strike a deal with gm and stellantis phil, how do you expect this to go with the other companies is this a blueprint and 25 of the pay increase is that the expectation that gm and stellantis have to step up to that or are there other issues which are different with those companies over ford . Reporter the contracts will be similar, but there are differences. Stellantis a big push from the uaw is to reopen the plant outside of rockford, illinois the belvedere plant. They idled it earlier this year. They have no intention of restarting that plant. Sd stellantis does not. The the uaw wants the plant reopened what happens do they repurpose it as a mega hub for parts and distribution one idea which has been floated out there. That is not the same level of pay as the final assembly plant. That is one example, becky, where the contract with stellantis has different sticking points than the contract with ford or gm they are generally speaking in terms of the wage increase which will be in the same area and expect them to come in at 25 . To that point, phil, how far does this trickle out . We are talking about the specific companies and all of the supplies in the ecosystem will trade and those nonunion will use these as new baselines for everything or not . Reporter yes do i think they will get 25 for some of the suppliers . No i dont think they will get 25 . You are right, andrew. This resets the map in the Auto Industry for uaw and nonunion we talked about this for some time you can bet the pay will go up for honda plants and toyota plants all nonunion foreign auto worker plants. Pay will go up not as much as uaw is it doable for ford to stay wildly profitable . Do they have to stay with internal control we will hear from them similar to gm . The good times are rolling right now. Money is rolling in. The minute inventory sits on th lot and people dont want it, will this stick to the taxpayers . Reporter i dont think were at the point with taxpayers stuck with the increase. Jim farley its always happens. Reporter joe, lets talk about this discussion. Bill ford and jim farley have to thread the needle. They are not giving up on electric vehicles. They believe and most in the Auto Industry believes the future is electric vehicles. The question becomes how much of the inn vvestment going into th electric vehicles when you know demand is slowing down relatively what it has been in the past it is not stopping waging are surging. Reporter waging are going up ultimately this is the knock you hear especially on wall street about the big three auto stocks. How can these guys ever get the multiple they would like given the cost components relative to toyota, honda, tesla thats the one that people talk about the most tesla workers make far less than the uaw at gm and ford and stellantis when the contract is in, the gap widens okay. Thanks, phil. Breaking overnight israel conducted a targeted raid on sites in northern gaza with tanks. Described the raid as preparations to combat with idf striking terrorist infrastructure and antitank Missile Launch sites we will get more information i guess this would be the start of the ground war. To the mass shooting in maine last night at least 15 people are dead and around 50 people injured after a man fired in several locations in lewiston, maine including a Bowling Alley and bar. Residents were told to shelter in place while police searched for a suspect. Police have named 40yearold robert card as a person of interest we will update you on the story as we get more information. Hard pivot to this u. P. S. Reporting its earnings. Lets tell you about them. Beating estimates by 5 cents with adjusted quarterly profit with 1. 70 per revenue it cut the fullyear sales outlook. U. P. S. Was impacted by unfavorable conditions when we come back, we will dig into earnings. The big tech earnings. We show you what ibm and meta said those stocks moving. And the ceo of biontech will zhme us on the latest on the aleirs drug you are watching squawk box and this is cnbc that first time you take a step back. I made that. With your very own online store. I sold that. And you can manage it all in one place. I built this. And it was easy, with a partner that puts you first. Godaddy. Cmon, were right there. Cmon baby. With a partner 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. Lets get to the squawk planner. We have a busy day from earnings honeywell and merck and comcast. We hear from ford and chipotle after the bell today and we will get the first look at Third Quarter gdp today we will see 4 as the expectation, joe yes 4. 5. We get september durable goods orders and weekly jobless claims ecb will release the latest Interest Rate decision at 8 15 a. M. Eviastern time. Shares of ibm are higher revenue is in Line Software revenue up 8 consulting up 6 Mainframe Computers fell 2 . I dont know how many years you can go back and get similar drops in revenue guidance for the full year for ibm with the market cap loss we saw in alphabet. Ibm lost 166 billion. That is 124 billion lets talk about meta. Shares slipping this morning the social media giant with stronger results and the company widened the revenue guidance it signall led softer ad spendig since the start of the israel conflict we havehave Julia Boorstin with. The key thing here is the top and Bottom Line Results beat expectations meta is seeing accelerating Revenue Growth 23 Revenue Growth over 21 which was expected we are talking the fastest quarterly Revenue Growth in two years. Something happened on the call a little bit of weakness as investors digested the information which was lighter than expected. The cfo susan li said we are seeing a little bit more weakness and uncertainty and volatility when it comes to the Fourth Quarter with so much uncertainty with ad spending the same thing snap Ceo Evan Spiegel said you cannot contribute the spending to one region over this weakness the question is how brand advertisers in particular respond to this ongoing war. Brad, how concerned are you about this and the other thing i would mention is all we talked about metaverse and how much they were spending on the metaverse. That conversation has stopped. Now they talk about has the company pivoted to being an a. I. Company and will that work what is the opportunity to monetize that . Speak to what julia said with the call piece im concerned where you land on the a. I. Piece of it i think people being aware of the war and people had questions. You had snap say we are seeing meaningful pause in brand spending meta has low exposure in brand spending that had somewhat of an impact the other thing that came up on the call which was an issue is they called out china as a source of strength in all regions of the world for ad spend. You had a couple of ecommerce players that have come in aggressively when you are driving that much strength right now, it calls into question how sustainable that is into next year 290. 60 right now is this a good deal . Absolutely. We think longer term stock trading 16 times earnings. Share gainer over the next few years. That is a compounder recognize there is always noise on some of the prints with everything going in the world right now. I would point out, andrew, over what happened to the metaverse. Mark zuckerberg talked about it, but he pivoted saying a. I. Is part of everything and it is driving the advertising results and it will make things better the metaverse is all about a. I the way they talked about the headsets and the ray ban gr glasses. I want a pair you can ask for advice through the a. I. Glasses or ask for directions or information. All of that initially started out being about the metaverse and now it is about a. I. It looks cooler than the google glasses they dont have anything in them except a camera on them they have the speakers. I did a demo of them last week they have the speakers, you can say hey, meta. Ask for a recipe or instructions let me ask brad here you are. Is that a killer app for you . The truth is if siri were better, you could do siri is not bad and you can do it it w with the google app. Ask the same questions nice uppercut, julia. The key thing here is meta has the embedded 10 million plus advertiser relationships they have the commercial relationships already. They are bringing the technology in when you think about how we call it access the internet mark is tielling us this is how people will access the internet in the future. You have to stitch that together by the way, no one thought about the fact that a. I. Is moving in from the ad recommendation you are selling to the a. I. Not just human any more, if you think about it. Hold on you warped my brain there. You are selling to the a. I what do you mean by that if the a. I. Is helping you navigate the internet, there is a farpartner in crime exactly some amount of subjectivity to how they help you navigate that relationship thus, the ads will need to reflect that the a. I. Will start to know you, if that makes sense. Julia, thank you. Brad, great to see you i appreciate it. Thanks. Private equity giant silverlake is working on taking evndeavor group private. It has a majority stake in tko holdings which resulted from the merger of wrestling iente entert entertainment. Silverlake ownss 70 . Ari emanuel says we believe this is a prudent approach to ensure we are maximizing the value for shareholders endeavor went public in april of 2021 before the after hours move, that stock was down 35 since the ipo being up 23 right now which is a gain of 4. Coming up, Sam Bankmanfried is expected to testify in his fraud trial. We will tell you how soon he could take the witness stand. And coming up later, nik ley is joining us. Thats in the next hour. Icy hot. Ice works fast. Heat makes it last. Feel the power of contrast therapy. So you can rise from pain. Icy hot. [soldier] take a look at this s theyve left us a gift. [soldier] i think we misjudged them. I love horses. birds chirping [soldier] we should open the gate. Lets see what charlotte thinks. [narrator] at crowdstrike, we monitor trillions of cyber events to detect threats and prevent breaches before they happen to keep your business from becoming history. We stop cyberattacks. We stop breaches. We stop a lot of bad things from happening. Crowdstrike. Protection that powers you. Lawyers for Sam Bankmanfried revealed he could testify as soon as today in a letter to the judge, Sam Bankmanfrieds legal team outlined three key points. They indicate he could try to shift blame to the former legal team or blame the status quo in crypto or blame authorities in the bahamas for some of his postbankruptcy actions. His attorney seems to think Sam Bankmanfried pmay decline to testify if the judge would not allow him to speak along those lines. What . It is fascinating the judge limited what can come into the case. The idea, for example, of blaming lawyers. How do you blame the bahamian authorities . I dont know. Except to say you were regulated. They should have caught if they were authorizing these things that is the argument a lot of the stuff, the judge has not allowed to come into the trial at all i think a lot of people are watching this case and obviously increasingly seems like a slam dunk there is little defense mounted at all almost no defense mounted. One of the main reasons that is the case is because the judge is limited what can be brought into the case why why is the judge limiting that he has a particular view. It is interesting to see, im sure, that the lawyers are hoping to set up a situation if and when they lose that they appeal the case on the grounds that certain aspects of the case were never tried in the case it will be a very hard case to win on appeal or try to have a second trial, effectively. That is clear if you are watching the tea leaves and given the way the judge has been hard lined over what is allowed in and out and in a way that people raised questions. That will be the debate. It gets stranger by the minute. When we come back, we will tell you what the new House Speaker mike johnson said yesterday about his legislative priorities plus, the ceo of biontech will join us on the companys new alzheimers data while we head to break, lets look at yesterdays s p 500 winners and losers announcer executive edge is sponsored by at t business next level moments need the next level network. 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. Only the sleep number climate360 smart bed lets you both sleep up to 13 degrees cooler or warmer on either side, and at your ideal level of comfort. Your sleep number setting. And now save up to 500 on our new sleep number smart beds. Sleep next level. Shop for a limited time only at sleep number. The first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, 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 good morning welcome back to squawk box. We are live from the Nasdaq Market site in times square. Looking at futures still in red arrows. Dow futures down 85. S p down 22. Remember, the s p closed below that 4,200 level yesterday nasdaq was the big loser yesterday. The futures are indicated off 120 points right now. We have merck just out with the results. Checking the yield is the first thing with merck for so long, it was a bond with upside that is not the case 2. 8 drugmaker with the profit of 2. 13 a share. Revenue also above the wall street forecast. Results were helped by a particularly strong growth in oncology treatment and vaccines. Doing okay not on its highs trading at 103. 119 was the high. Biontech presented alzheimers data with the medical meeting this week. Angjelica is here with me when you looked around, you said this is amazing. Is that the first thing you thought on squawk box and were all thinner and taller in person that is what i thought about. Thanks for having me we had a few updates from biontech from the alzheimers conference up in boston. Biontech and partner are saying the drug leqembe is approved in an iv form the companies are saying they will move ahead with approval to seek approval in march that drug clears harmful brain plaque similar to iv form. This is the second approved drug for alzheimers. The first faced controversy over efficacy and regulatory review we will get a better sense when the Company Reports earnings neck next month being able to inject at home inn s stead of infusion could help it. Biontech is testing another drug other than lequembe. We will keep an eye on it. We hear Home Infusion it was a growing business. People need to go in there are big delays and back ups. You need it twice a week iv. Injectable. The old one was twice a week iv even when it was approved, it will not move the needle it is too difficult to administer this is like insulin or epi. This is easier i thought i saw it removes the plaque 14 better than iv. That is what they presented last night which is really interesting. It actually works better than the iv at removing plaque. It comes with a little bit of a higher risk. Brain swelling. That is something that analysts as they pick apart the numbers saying this is not a slam dunk. There could be questions from the fda about the tradeoffs there. They are excited because being able to give it at home yourself or care giver is easier than going in for infusion. Stick around. Lets bring in the biontech president here chris, i know you were able to hear that. I thought the brain swelling or side effect profile was similar is that something to be similarcutaneou administration the rates are roughly similar. The infusion was twice a month as opposed to twice a week you know, obviously, auto i injector at home is more convenient for patients. What is the state of the infusion it is difficult. Is there a shortage of being able to do it . This is a game changer you wont think necessarily it is just the way to administer something could totally change the profile for how profitable the drug can be. You know, if we step back, joe, what is preel i interesting is this is a new category. There hasnt been a treatment for alzheimers before biontech has been investing for over 20 years and billions to get this far you know, weve known that alzheimers is caused by the death of newurons. What caused that with getting lequembi approved, we know removing plaque relates to cognition now we are starting to think what else can we know about this and make it more convenient for patients can we figure out the patient to benefit most from the treatment . Can we find other modalities to take the treatment beyond that we have the first new drug, this shows the commitment to improve the Treatment Options for patients we think the sub cutaneous treatments can help. Does research continue on a different way to approach the pathology . I nose removing the plaque can help had is there Something Else down the road to be used with a plaque remover in a different way are we convinced we need to do this better and eventually it will work against this disease which will be ready with the aging population, this is a daunting challenge the real problem with alzheimers is the death of neurons. We dont know how to bring neurons back to life what we really want to do is stop the death of neurons. There are believed to be together two causes. One is the ameloid plaque. Leqembi works to remove the plaque the second is tau. If you have alzheimers, you have the ameloid plaque and the tau. On the ameloid, what we can do is if we try to get earlier in the disease progression, we think we can also have Better Outcomes because not as many neurons will have died at that point. One issue with this disease is different from others, you have a silent phase of the disease where the plaque is accumulating and people dont know. You have the disease long before the symptoms what we used to call early onset alzheimers is when you had symptoms what we really would like to do is try to find patients before they get symptoms to have something ahead ongoing to look at patients earlier. One of the ways to tell how severe alzheimers is is the level of tau we published data this week where patients who have low tau levels early in the stage of progression actually had a 76 Response Rate and 60 improved 76 were stable and 60 improved in the benefit we are learning about where is the best time to initiate treatment. That is where subcue will be important. Patients will be on drugs longer and freeing them up from the twice monthly infusions is important. You are left for tau that is where we had encouraging results where we develop new medicine which is going after a different modality you want to combine those. Chris, great to see you i want to ask a lot of analysts are wondering how you see subcue used from infusion and how do you roll out leqembi and what do you hear from doctors and reimbursement issues figphysicians will decide if subcutaneous or iv is right for the patients we have to go to the fda eisai has indicated they intend to file for approval of the s subcue at the end of the first quarter. Concerning the launch, the launch is on track as we expected this is a completipplex deiseasd treatment. It takes a while for the care path ways to develop between the initial referral to the neurologist and getting influence can be as long as onetotwo months. This was an area with so many failures in the past and i think the Health Care Systems wanted to see if we could get full approval and reimbursement we have all of those things. We are seeing the medical centers gearing up having to hire people and figuring out the care pathways. You need to triage patients with who is eligible and who is not then going through the p. E. T. Scan and infusions in terms of treatment and following up on safety with mris we expect to see the progression of sales through next year chris, thank you for updating us on this we appreciate it its important thank you. Good to see you. Thank you lets talk about with Southwest Airlines they just released Quarterly Earnings phil lebeau is back doing those numbers. He is doing quadruple duty d reporter andrew, revenue coming in line with estimates at 6. 53 billion. A couple of metrics. Revenue per seat mile down 6. 8 compared to the same quarter of q3 of 2022 you have cost per seat mile up 4. 4 excluding fuel now for the guidance in the Fourth Quarter southwest expects revenue per seat mile to decline 9 to 11 compared to the same quarter last year with the cost per southeast mile excluding fuel to be down 16 to 19 compared to q4 of 2022 the company says it is noticing in terms of booking patterns that they are returning to historically normal patterns we talked about this when will we see the pandemic surge wean off and we get into more of a normal pattern that is what southwest is seeing lots to discuss with bob jordan coming up on the squawk on the street at 9 00 a. M. This morning. Guys, back to you. Phil lebeau, thank you. Coming up on the other side, we will tell you what new House Speaker mike johnson said about his legislative priorities we will do that after we return here on squawk box. Announcer currency check is sponsored by interactive brokers. The best informed brokers choose interactive brokers. aidyl hi, im aidyl, and i lost 90 pounds on golo. I struggled with weight loss and weight gain my entire life. With all the yoyo dieting i did in the past, i would lose 20, 30, 50 pounds just to gain them over and over again. In one year, ive lost five sizes, and im on my way to lose another three. With golo, i can do it. announcer change your life at golo. Com. Thats golo. Com. 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. Leadership crisis in the house has come to an end. Congress member mike johnson of louisiana won the gavel yesterday winning 220 republicans who cast a ballot. Speaker johnson spoke after he was sworn in were in the majority right now. Weve gone through a little bit of suffering weve gone through character building you know what it produced . More strength and a lot of hope. Thats what were about to deliver to the American People the new speaker said the first order of business is the bill expressing solidarity with israel and the war against hamas. He supports a temporary measure to fund the government through january or april of next year which would avoid a shutdown on november 17th. A lot still not known about mike johnson. He is not a well known character outside of congress or inside washington there will be more that we find out about him. I did hear comments that other leadership like scalise and others will do heavy lifting and mike is not a figure head, but not the same powers as pelosi or bans boehner. He hasnt had a lot of leadership a lot of people are talking about his personal relationship. Hakeem jeffries looked nice handing him the gavel. I dont think some of the other leaders are going anywhere mccarthy and scalise and jim jordan with the judiciary. We will see the good news is you can start to get things passed through congress i didnt hear ukraine. He voted not to fund ukraine. Would you bring that to the floor . Ukraine or israel he mentioned just israel i wonder where other leadership comes in and how much of that decision is made it will be interesting well continue to watch t. When we come back, uaw reaching a tentative deal with ford thats next. 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. Only the new sleep number smart beds let you both sleep at your ideal level of comfort. Your sleep number setting. That can provide critical insight. And now, all of our new next gen smart beds have temperature benefits. And now save up to 500 on our new sleep number smart beds. Sleep next level. Shop for a limited time only at sleep number. Welcome back, everybody. The uaw and ford reaching a tentative deal to end the nearly sixweek strike with the automaker. And joining us right now with his reaction is jay timmons, the National Association of manufacturers president and ceo. Jay, how do you see this is this good news thestrike ha settled or bad news because it settled with some pretty high wages and other things that have come into play i think it is great that it is potentially settled and that were going to be able to continue to make things in america. The strike was particularly difficult, i think, for smaller manufacturers who are part of the supply chain perhaps unionized or not unionized. They were hit pretty hard. And we heard from so many of our members that they were making pretty tough decisions, to either put production on hold, lay off workers, perhaps even chill some Investment Decisions they were making so, were happy to see there is forward movement. Smaller manufacturers, even if not uaw shops, union shops, are probably going to be pressured to raise wages can they still be competitive . I think were going to have to see, becky, how this all plays out. Clearly there are cost pressures when it comes to wages but i think we also have to think about what is the overall cost of manufacturing in the United States . And how does that impact our ability to compete around the world . Wages, salaries are one factor regulations are another, and in fact we were releasing a study today that talks about the incredibly expensive cost of regulations in the United States so all of those things on a manufacturer in the United States puts a lot of pressure on us. You all put a number of 29,000 per employee per year as a cost that your manufacturers are seeing because of federal regulatory burden. What does that mean . What federal regulations it is 29,000 per employee per year we just updated our study, our regular study we released. The inflation adjusted dollars go from about 2. 1 trillion of total economic burden for the regulatory structure in this country to about three what are the regular what are regulations . Every single regulation. Name them you can think about regulations that come out of the epa, think about labor regulations. Some of the regulations that are being talked about right now are not even included in the study so the s. E. C. Scope three regulations, for instance or the tail pipe emissions or the pm 2. 5 rule coming out of epa all of those are part of the regulatory morass coming out of d. C. Those are not part of the study. This looks at 2022 as of 2022 all the regulatory burden. What is the biggie . There are some there is need for some regulation, other regulations seem silly what is a regulation that you all deem being unnecessary and expensive . So, lets look at where we are right now with this administration and what theyre starting to talk about, or what theyre trying to put out. Business is not at the table were not having conversations right now. For instance, the pm 2. 5 rule. Which is what thats particulate matter, the amount of particulate matter in the air everybody wants cleaner air, obviously. The way to accomplish that is through manufacturing innovation and making sure that were able to produce the equipment that will make our air cleaner and reduce some of the particulate matter the rule theyre talking about and the potential number that theyre talking about could put 40 of our country in what is called a nonattainment area which means we can invest in manufacturing in those areas thats not what is the main the co2, thats not theyre not doing that now because of talking about ozone, i believe. Theyre not doing that now because a court decided thats not at this juncture. But there are other i dont think anyone would argue you need regulations for particulate matter, exactly. We have pretty strong regulations in place power plants, it may come back with a vengeance, the co2 it could well and it is also being implemented or imposed in other areas. So you think about the s. E. C. And their scope three regulation forcing folks to come up with data that frankly is not accessible so a lot of these regulations dont make any dont make any logical sense. You cant do anything. Think about what were trying to do with chips in the kun frid country and all the inputs needed we cant act those in the United States because we cant nemi them it toakes 15 years for a permit were out of time but thank you for coming in today. Jay timmons. Squawk box will be right back. But to advance how the game is played. Aaa relies on tmobiles network to stay connected nationwide, so they can help get their members back on the road. And were helping pano ai innovate, to stop the spread of wildfires. Nows the time to see what americas largest 5g network can do for your business. Good morning this weeks market turbulence set to continue on the busiest day of earnings season the futures are under pressure dow down over 150 points. Ford and the uaw reaching a tentative agreement to end labor strikes. Well bring you the details. Israel launching raids in gaza overnight in preparation for the next stage of the war with hamas president ial hopeful nikki haley will join us live. Second hour of squawk box begins right now good morning and welcome back to squawk box here on cnbc were live at the Nasdaq Market site in times square im Andrew Ross Sorkin with becky quick and joe kernen a lot going on this morning. Lets tell you where we are when it comes to the futures now. The dow down 158 points. Nasdaq off 142 points. Looking at the s p 500 off 30 points treasuries as well right now looking at the tenyear, 4. 962 people thinking about risk these days twoyear at 5. 129 , joe. Our parent and nbc parent comcast has results. Profit came in at an adjusted dollar a share, 13 cents above estimates. Revenue also topped consensus forecasts. You can see at first blush up about a percentage point on this the company emphasizing really that on almost all financial metrics it was able to exceed analyst expectations, including consolidated revenue, adjusted ebitda, free cash flow, as we just mentioned, earnings per share. It is now reporting in two different i think this is this first or Second Quarter since that change went into effect second. Second quarter, yeah. Connectivity and platform revenue, thats i think of that as like the pipes, is it not, if you can yeah. And then content is the other side of things including the theme park and Everything Else you can see here that there was a you look at some of the numbers, for example, the Revenue Growth in that second in the latter division that we were talking about kind of anemic, right . We may not be in an overall recession, but there was an advertising recession in certain parts of the economy and maybe were just starting to come out of it i thought some of the peacock some of the peacock results and certainly a lot of growth subscribers up 80 . 28 million. I dont know what the revenue up 64 . I dont know what the actual bottom line numbers, but it is narrower, the losses are narrower than they were before. Which is what they said was going to be the case. I dont think we specifically know the i dont think that was broken out specifically, no you see churn or anything we like to look at . It just hit. Im sure that the Company Always points out not chasing unprofitable cable subscribers. Subscribers at this point. We look at how much worse it is than last year cord cutting is something you can identify in almost every quarter. At this point, up about. 8 . They point out their connectivity and platforms customer relationships overall up 40,000 to 52. 3 million. I think the optimistic take is if you already think we have been in an advertising recession, that you may be coming to the other side of it thats where you have to hope is the case on that side. And then the other part is think if you were just we talked about, if you were just the content side right. If you didnt have the base for a lot of your growth in your business being good to be in the pipes. I would rather be this media combination of media assets than maybe some other worth pointing out, comcast Parent Company of cnbc. Right im being positive. Just want to too positive . No, just you could be more positive. I just gave you the optimistic take on what the okay. Youre right. The stock up by about 35 cents this morning in a down market well continue to keep an eye on that and other earnings coming in in the meantime, the government is going to be releasing the First Reading of the Third Quarter gdp. Thats coming up at 8 30 eastern time less than an hour and a half from now Steve Liesman joins with us a preview of what to expect and were looking for some pretty big numbers, steve yeah. Becky, were going to get what for some in the market is the troubling news, the economy did very well in the Third Quarter the fed said it thinks the economy has to slow down in order to bring inflation down. And ease back on Interest Rates. Gdp seen accelerated to 4. 7 in the Third Quarter. Thats up from an average, you can see there of 2. 3 overthe prior three quarters it is more than double what is called the estimated potential of the economy, that is a growth rate seen as being noninflationary. The fact is the Economic Resilience we are seeing in the u. S. Means that you have to adjust your distribution of probabilities around forward Inflation Higher than before how can you not when we have q3 gdp at 5 . Well, despite that widespread view, inflation has come down fairly sharply, even while the economy has grown at or above potential as you saw there and unemployment stayed low. That raises questions about the feds general view of the need for Slower Growth to bring down price increases. The response has been that the easy part of the inflation reduction has happened, you brought back the supply chains the hard part getting back to 2 and the target is going to require Slower Growth and some gains in the Unemployment Rate well, behind the economic strength, a consumer that wont quit estimates for gdp this quarter have been raised from near zero to nearly 5 with upside surprise on retail sales, you can see there in the past three months but business spending is also expected this morning to show that it was healthy. But forecasters are holding on to their outlook for the economy to slow sharply in the coming months, the market will apparently only celebrate the gdp number this morning if it is below estimates or in the future when it is lousy, not when we get good strong growth, becky. All right, steve. I guess we still keep going through this whole thing how do we keep waiting for this recession, thinking that it is going to be here, talking about sectors that have or are in recession, whether that be retail, whether that be advertising, and then still be looking at numbers like this how do you explain all of that it gets a little boring, i think. I have to chronicle it we get the thats never stopped you before ignore him, steve, keep going. When joe says ignore him, thats a new one no, ignore me ignore me. That was if anyone had said that, i would have said that it nothing to do with you. Thats what i said it is okay. But the point just an easy pitch. We keep chronicling this slowdown put together the rapid update, we put the average of forecasting together, we started off, it was either negative or 0. 3 the beginning of this quarter and then slowly it ticks up 2 , 3 , 4 , and this keeps happening. I guess at some point theyre going to be right and im not saying the market shouldnt worry about 5 tenyear yields i feel like at some point, when it the data comes in strong, it is okay to, i guess, celebrate it i dont know if that means buy the consumer staples, but we keep thinking the consumer is going to give it up. Im just not sure thats going to happen because i really think that people think it is all tied to the savings from the pandemic and the extra money that was given. At some point, you look to the wages people are earning and decent wages, even though over time they havent necessarily kept pace with inflation, but a 4 , 5 rate, you get that in your pocket, you go out and spend, you look at universal this morning, or comcast, which is, of course, owns nbc and cnbc, as andrew correctly noted, im not sure thats the upper crust of the population filling the theme parks, right i think people are out spending. You can talk about the 25 increase that uaw workers will get at ford, that will probably be matched by the other big three. And then kind of moves down the supply chain too so maybe the pay raises pick up from the savings that we had during the pandemic. Youre very right, steve, to point it out. Im going to be wrong about this, and somebody is going to run this clip, i will say joe lavorgna has a piece out saying every time before you get a huge decline in gdp you get a big number before that but that doesnt mean that every big number is followed by a decline. Werent you a little surprised about, like, bill gross and ackman and both of them said, you know dalio and all these guys. The same week were getting the 5 , maybe, 5 print, theyre saying, oh, my god, im definitely not short bonds anymore, because theyre going to be a buy, rates are coming down after the economy sharply not contracts, but starts slowing much more sharply. That seems to be what theyre saying. I dont know. As art cashin so beautifully said, the end of the world happens only once. You have to time it very carefully. Thats true steve, thank you. Well see you later this morning. Were now actually nserg e possibility. Yes. Up next, president ial hopeful nikki haley will join us on the israelhamas war, the new House Speaker and much more. Well be right back. Be ready for any market with a liquid etf. Get in and out with dia. Is it possible my network could take my business be ready for any market to the next level . It is with comcast business. Powering all your devices with gigspeed wifi. And you get fast downloads and uploads. Pick it up pick it up oh we got this because its powered by the next generation 10g network. More speed for your business . Its not just possible. Its happening. Get started for 59. 99 a month for 12 months. Plus, ask how to get an 800 prepaid card with a qualifying internet bundle. Comcast business, powering possibilities. Breaking overnight, israel saying they conducted a targeted raid on terrorist sites in north gaza using tanks before leaving the area described the raid as preparations for the next stage of combat. The idf saying soldiers struck numerous terrorist terror infrastructure and antitank Missile Launch posts and it is our pleasure to introduce our next guest, u. S. Support for israel is crucial and that there should be no backing down until hamas is eliminated joining us now, former u. S. Ambassador to the u. N. , nikki haley, also former governor of South Carolina, and a 2024 president ial candidate, right there with governor desantis. Were going for the big guy. What is it . If you want something done if you want something said, ask a man. If you want something done, ask a woman. It seems like im undercutting myself in some or speaking the truth. Or speaking the truth i can tie it all together in this way we wanted to talk to you about the new speaker and the chaos in the house. The new speaker mentioned we need to get aid okayed for israel, but left out ukraine in that whole equation and we have seen President Biden wants to tie the two together what is the right thing to do . The one thing ill say is america has to get this right. The world is on fire and america has to get this right. The right thing to do is we were there for ukraine, because it is a proamerican freedomloving country that was invaded by a thug and that thug has said that once he takes ukraine, poland and the baltics are next those are nato countries were about preventing war so you got ukraine then you have israel and we see what is happening in the middle east we do both if you live ukraine, then the next step is theyre going to want to leave israel we already accepted defeat in afghanistan. That was horrible the way it happened we cannot leave ukraine. You can do both. And we should do both. It is the right thing to do. And so anybody that is saying, oh, now you have to pick between ukraine and israel, thats an absolute mistake you have to always be there for our friends and we should never be so arrogant to think we dont need friends on september 12th we needed a lot of friends we got to quit talking like it is september 10th. What do you think the endgame, though, is for israel because hamas is as much about individual actors as it is almost about an idea and i wonder, just longterm, how you even get to an endgame that idea has a lot of actors and proponents no, no, i you see it around the world, clearly. But keep in mind but also the backlash against how however you would get to hamas, however you would hold these individuals accountable, there is going to be losses along the way and the question is how do you do that in a way that actually makes the world come together around this . Youre not going to look, israel has always tried to defend itself and israel has always been hit because of it. And what i would say at the United Nations and what ill say today if that happened to any other country, there would be hell to pay. But because it is israel, everybody is, like, dont do too much we should be doing three things. One, support israel, whatever they need, whenever they need it, no questions asked two, eliminate hamas dont weaken them, eliminate them, because if we dont, they will do this again and, three, do whatever it takes to get our hostages home but see the Bigger Picture of all of this. There would be no hamas without iran and look at what the bigger story of this all is, you have china and russia naming themselves unlimited partners, iran is their junior partner china is importing all its oil from iran. Sending billions of dollars their way that they support terrorism with russia is getting drones and missiles from iran look at the three, what do they all have in common they all want to destroy the west and they all hate america. The economists, the latest edition has this question, wondering if we will be stretched too thin to fight a potential threepronged war, the two that exist now and add china to the mix what happens is there a way to do this without creating world war iii you look at ukraine and israel if we just dealt with those two, thats only 20 of what bidens green subsidy bill did. But if we deal with what is happening with hamas and you brought up iran, does that mean we deal with iran too and how do you not start world war iii . Look at how iran is act theyre trying to qatar, the fact they negotiated hostages, we had four prayers answered, we have 210 prayers to go why are they doing this . Theyre trying to avoid iran being embarrassed by israel going in and taking out hamas. Theyre sending strikes from hezbollah. But thats the question i agree with you israel should be able to defend itself i just wonder how we do this without you think iran will step down if hamas is eliminated in gaza . You do it with strength first of all, we dont know what iran is going to do. But we dont run from fear what we do is we eliminate hamas. Dont forget that they rounded up we say eliminate halmas, are we going after hamas leadership in qatar. We should. People say they want to go after hamas and then the the true domino effect is real you have to go into qatar, a country that says theyre our friend, and you have to do things that would be very, very complicated. Im not saying you dont do them, im saying it gets thats exactly what we did with isis. Do you think we didnt go take out the heads of isis . We did that wherever they were we dont go to one region. We go and take out the people who are doing this the reason we took out soleimani. You take out anyone who wants to destroy america or our friends and we have to start getting this conversation right. I look at what is happening on College Campuses and thank goodness for the donors pulling their money or people leaving boards, but what are all of them saying on College Campuses first, there should be freedom of speech, but you dont get freedom of hate and what were seeing now is theyre talking about occupation is there occupation in gaza . There is absolutely occupation in gaza, by hamas. There is not an israeli or jewish person in gaza. Some of the same people saying you dont get to have freedom of hate, youre allowed to have freedom of speech, now theyre saying you need to have freedom of hate, some of the same people that didnt, you know that would apply that rule in one setting are now saying you to think we should be doxxing students and their lives can be affected in the future if they show up at a i tell my children now, everything you put on social media and everything you say is going to dictate who hires you and whether you get a job. Bill akron wont hire someone he sees at a rally or i wouldnt. I wouldnt hire someone that is celebrating hamas. I wouldnt hire someone who is going to go out there and spew hatred because i dont know what theyre going to do in my company. What ill tell you is i think we should revoke all the tax exempt status of universities that are allowing this to happen in the first place. Their job is to your competitors did that in florida. You should. Any university that doesnt protect students, any university that allows hate to spew, you should go and pull their tax exempt status. Colleges dont get the right to do this. We fight tooth and nail for increases in defense spending. And President Biden there have been small increases. Is that enough and ill tell you why i thought about this iran is front and center you mentioned the hideous triangle between russia, iran and china. Down the road, is china our biggest fear china is our number one biggest security threat. To keep increasing defense . Isnt that going to be something we deal with for the next 50 years . Understand what deterrence is why is it that the taiwanese want us to support the ukrainians they know if ukraine wins, china wont go into taiwan why does ukraine want us to support israelis they know if we support israelis, it is it is all linked together. It is a bigger story. So thats the reason why america has to get this right. How do you sell the country on were back to being the worlds Police Officer thats what youre effectively arguing we have to be. No, were about protecting americans and protecting our friends, not the Police Officer. Were not telling people how to live or what to do in their other countries, were telling them not to kill americans, were telling them not to kill israelis and were telling them were going to eliminate terrorists wherever we see them. It is hugely important we stay true to that. You have a diagram of how 2024 plays out in your favor i dont want to bore you with where we are right now do you think it would be a problem if you have donald trump or joe biden as president in 2024 with all the issues youre talking about . 75 of the country doesnt want a rematch of biden and trump. How do we get there what is going to i win i win. It is that simple. So now we are second place in New Hampshire and South Carolina were tied for second place in iowa ive got one more fellow to go after. But let me tell you something, if ever you look at the world stage and see whats happening, we have to have a new generational leader. We cant deal with the grievances of the past, the headlines of the past. What happens we have this horrific tragedy in israel and donald trump is going to sit there and talk about an old issue hes got with netanyahu. You dont do that to a country who just brutally lost so manufacture their people but hes continuing to hes got more grievances with Georgia Election officials than he has he has grievances with everybody. Im saying we dont have time for grievances we have a country to save. What do you ascribe the situation in the house to at this point the leadership members of the house who all ran and said they wanted to be the next speaker couldnt get coalition from the rest of the Republican Caucus that is there. Again, the guy who is the speaker at this point voted not to fund ukraine. How do you take that message and convince republicans before you even get to the main stage i think, first of all, we have to look at the fact that the last couple of weeks was a total embarrassment for republicans. I mean, that is not what republicans need to do when i was governor, i had a republican house, a Republican Senate that butted heads all the time i would call them into my office and say were not leaving until we figure this out they shouldnt have gone home, now that there is a speaker, i pray hes successful we need him to be successful america cannot be distracted we saw what happened when israel was distracted america cant think that cant happen here. Hes a close confidante and friend of president trumps and very involved with trying to keep him in office after the last election. All eyes are on him well all be watching his leadership and, you know, it is different when you are a voter of one, representing a small district. Whener of the house and represent everyone you watch out for the good of the entire conference. Thats what well watch. I want him to be successful. America needs to be strong and not distracted. Getting good backing. One of our guests, frequent guests, we love judd gregg, senator judd gregg said the nation needs nikki haley calls her a strong leader who can win. A few more of those and maybe this you still got that elephant in the room i dont the numbers just dont add up at this point. Thats what everybody says when they ask me well, how are you going to break out of the field. And then they ask me how are you going to beat desantis and now trump. The goal post keeps moving im telling you, youre going to see, it is slow and steady wins the race were disciplined. Were focused. The people are coming with us. One more, because i have i cant deny her, you called yourself a union buster. What about this deal with ford and the ongoing negotiations between uaw and gm and stellantis we like when people get raises, nikki. They didnt get raises during the financial crisis good thing or bad thing . I was a union buster in South Carolina because i made sure that the workers had direct contact with the people who hired them i didnt want a middle man in there. I told my owners, i want you to make sure that you use your people to find your solutions, that you take care of them and respect them for who they are and you have, you know, family time for them to know when theyre going to go to church and let them know how to have family picnics with the company so they can feel invested. I made sure direct communication was there. What happens is when the direct communication goes away, a union buster or a union comes in and it is all about the union and then making their money. I want people to make money. I want manufacturers to manufacture. We got to get the middle men out of there what i will say is this is all a fact that if you have president who is most pro Union President youve ever seen, youre going to have more strikes like this and were seeing that play out why did this happen . Because joe biden was so adamant about having as many electric cars as we can by 2030 that it caused a panic within the automobile manufacturing sector. Thats what did this and not only that, it is not even realistic to have electric cars by them we dont have the infrastructure im not talking about charging stations electric cars are heavy. Our roads and bridges arent cut out to have that many electric cars sitting on the road at the same time. We need to start being realistic and look in moderation at the way we do anything any extremes are always going to be bad for the country. You got to go you are headed over to the view. Not that, no. This is your this is your place, i think seriously. Instead of you reach the best people here. We love having you on. Youre so nice. Thank you. I appreciate it. Not too nice. I can be not so nice i can think of ilove the tough questions keep bringing them governor, ambassador nikki haley, thank you squawk box will be right back. Announcer time now for todays aflac trivia question. How long was the longest nfl Football Game ever played . The answer when cnbcs squawk box continues hospital bill for prime . gaaaaap did you just say gap . hes talking about Expenses Health insurance doesnt cover. Good thing coach prime knows about. Say it one time aflac because aflac gets you money to help close that gap now how do we get this goat outta here . whistles aflac meet one of my new homies gaaaaap get help with Expenses Health insurance doesnt cover at aflac. Com. Elephant wouldve been scarier. swords clashing had enough . Doesnno. Arthritis. Com. Here. Aspercreme arthritis. Full prescriptionstrength . Reduces inflammation . Thank the gods. Dont thank them too soon. Kick pain in the aspercreme. In the u. S. We see millions of Cyber Threats each year. That rate is increasing as more and more businesses move to the cloud. So, the question is. Cyber attack as cyber criminals expand their toolkit, we must expand as well. We need to rethink. Next level moments, need the next level network. [speaker continues in the background] the network with 24 7 builtin security. Chip . At t business. Announcer now the answer to todays aflac trivia question. How long was the longest nfl Football Game ever played . The answer, 82 minutes and 40 seconds, between the Miami Dolphins and Kansas City Chiefs on Christmas Day in 1971 welcome back to squawk box. Im dominic chu with the premarket movers big tech story, the big story this morning, Meta Platforms down 3 right now premarket. Just around 300,000 shares of volume the social media Parent Company of facebook, instagram, threads, whatsapp, better than expected Quarterly Results but guidance was slightly below consensus estimates and the Company Offered cautious xhencommentary we want to check in with shares of google Parent Company alphabet, which are building on yesterdays post earnings losses, tied to Slower Growth in the Cloud Services business. Microsoft lower by a percent in a negative tape. But it did manage a strong 3 gain yesterday following its Earnings Report, better than expected trends in its azure cloud unit at play there thats the tech trade. Overall, the recent headlines led to a bigger slide in the nasdaq composite that now had its worst day since february 21st yesterday. Currently around 11 below the levels that we saw at the highs so far this year and it is just a hair above its 200 Day Moving Average or longer term trend line. That level currently by the way sits at 12,754 look at that 12,821 nasdaq composite. On the earnings front this morning, shares of u. P. S. Down reporting better than expected profits, weaker than expected revenues it also cut its full year revenue forecast, shares down 3 southwest down 5 after the Discount Airline operator reported inline profits slightly worse than expected revenues southwest was hit by among other things higher labor costs and fuel costs, shares down 2. 5 and well end with a check on merck, moving between gains and losses right now, just around 3,000 shares of volume, better profits and revenues than expected here helped along by stronger performance of its keytruda cancer drug, gardasil and other treatments watch the merck shares keep it here we have Mohamed Elerian to talk markets and todays Economic Data points, Big Conversation coming up. Squawk box will be right back. Keep it right here endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. The uaw and ford reaching a tentative deal to end a nearly sixweek strike with the automaker. Phil lebeau joins us with more in 2019, when the uaw reached an agreement with the big three, the basic increase in pay was 6 , two lump sum increases of 3 there were a couple of 4 lump sum bonuses in the other years youre looking at 6 keep that in mind as i show you what this tentative deal with ford works out to in terms of percentages. Right off the bat, once this gets ratified, an 11 immediate raise. Then a 25 pay hike over 4 years. And thats over 30 when you factor in cost of living adjustments. The starting full time base wage is going to increase 64 here is uaw president shawn fain talking with the membership last night. Ford knew what was coming for them on wednesday if we didnt get a deal that was check mate. On day 40 of the standup strike, we reached a historic agreement. So, what happens next and how much is this strike going to be costing ford we heard from gm earlier this week, about a billion dollars and that tab is still going. The estimate from wells fargo is that when it is all said and done, depending on how quickly the workers can get back on the job, well talk about that in a bit, about 1. 9 billion is the estimate from wells fargo. That is the estimate in terms of the cost there remember, ford is reporting its q3 results after the bell today, lots of discussion at that time about the cost of the uaw strike well get perhaps a more definitive number and then the analyst call, plenty of questions for jim farley on that call about what happens. When you look at fords consensus, the estimate on the street, the expectation is that q3 profits will be up about 50 compared to the same quarter last year. Real quick, gm and stellantis, those talks continue with the uaw. The uaw earlier this week took out the two biggest plants for gm and stellantis, the gm plant in arlington where they make full size suvs and the stellantis full size truck plant in sterling heights, michigan, outside of detroit the pressure is still on with them, and you can bet the uaw is going to continue pushing and pushing hard on both gm and stellantis well see how long it takes to get the deal ratified by the rank and file, now that ford and the uaw have a tentative agreement. Back to you. Phil, one down, it looks like, two to go. Thanks investors are paying close attention to the slide in Technology Stocks and the volatility in the treasury markets. Joining us now to talk more about that is Mohamed Elerian, chief economic adviser at allianz, the pressure of Queens College at Cambridge University and the coauthor of the new book permia crisis a plan to fix a fractured world. Lets talk about the economy we have the gdp coming out in just about less than an hours time from now. Thats expected to be a strong number, but there are so many questions swirling about the economy. Where do you think we stand right now . Good morning, becky i think the number is going to highlight two things one is u. S. Exceptionalism continues. Not only is it going to be double, more than double the weight of 2. 1 for the Second Quarter, but it outpaces all of the advanced economies the u. S. Has been the Growth Engine for the world it also highlights the challenges the fed faces but what we should not do is take this as a signal of the all clear for 2024 as you know, i always pushed back on the notion that we would have a recession in 2023 im a little bit worried about 2024. Early 2024, late 2024, how do you see this playing out it is hard to tell. We have the rundown in savings, thats the big issue secondly what has been happening in the Interest Rate market is really problematic it is problematic for businesses it is problematic for governments, for the fed it is problematic for households and that is a significant headwind to economic activity. Okay. Lets talk about the volatility we have seen in the treasury market because thats been dictating the stock market moves lately too where do you think the direction is headed . What happens next in terms of the yields and why so we know two things for sure one, we lost the anchors to that market we lost the economic anchor, we lost the policy anchor, and we lost the technical anchor. Second, when it comes to simple supply and demand, there is two things that are here and are going to stay here the fed being a net seller and the government issuing more debt so the question mark and you saw that in the auctions yesterday is who is going to buy and that question of buyers isnt going to go away anytime soon youll hear all sorts of images of catching a falling knife and things like that and it is a problem because buyers are hesitant and they should be hesitant in view of what is happening to the supply of Government Debt ill give you a couple of points to push back on that. First of all, people are reluctant to be buyers governments are reluctant to be buyers unless they look at the potential for conflict around the globe, geopolitics may dominate and push them to a position where they say we look for a safe haven u. S. Treasury is still going to be that, correct it should be that, but let me give you some numbers. Before the conflict started in the middle east, the tenyear treasury was at 4. 80 today at 4. 97. We still face the risk of escalation of that crisis. There has been two big puzzles and they speak to how unsettling the volatility and the u. S. Treasury has been. One is you havent had it been the safe haven we havent seen the flight to quality and the flight to safety that you would expect, given what is happening in the world the second thing that is equally counterintuitive, you have people talking about bitcoins, about equity being the safe asset because that last confidence in government bonds being the safe assets, because of the nature of this Interest Rate risk. So, yes, it should be the safe haven, it should have already benefited, but the reality is that the tenyear yield today is a good 17 basis points higher than it was before this latest conflict erupted mohamed, the fed says it is going to keep rates higher for longer i believe them if they think inflation is still a problem they will not lower rates, but if push comes to shove and there is nobody else buying treasuries, i dispute your first point, your first given, that the fed is going to be a seller of treasuries. I think if push comes to shove, they would be more likely to stop selling treasuries than they would be to lower rates thats a possibility. The question mark will be does do we have both economic weakening and do we have some sort of scare of a market accident if we have those two things, then rates will come down. Look, messing around with qt is not that simple. What the fed has wanted, what the ecb wants, what all Central Banks want is that the reduction in Balance Sheet be like watching paint dry predictable, gradual, nothing to see there. Thats what they want. They want that, but they also want markets to not react in a horrible upheaval and i dont know which one would win out if those issues all came to a head. So, we had a press conference next week, that will be a great question to ask steve. Okay as to how flexible is their approach to qt right now mohamed, your new book is perma crisis a plan to fix a fractured world. How do you fix a fractured world . Fix three things that are all fixable. This is a book full of hope. One is you alter the growth models to grow more inclusively and respectful of the planet two, you stop making these policy mistakes we made. And, third, and perhaps most difficult, you try to enhance cooperation, Global Cooperation where there is a global challenge. These are feasible there are Engineering Solutions for all three. We need the leadership. I was being tongue in cheek to ask you to answer that question in 40 seconds intel making progress in the turn around attempt. Will new rivals with armbased chip designs bury the chipmakers hopes . Thats the question of the morning. Jon fortt will join us with that story after the break. Before we head to the break, quick check on cnbcs Parent Company comcast, after reporting results earlier this hour. Moving down mainly, rgal2 this morning on that news well talk more about that and dig into the numbers in a bit. 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. Still to come, jon fortt takes a closer look at intels turn around. And we are counting down to the first read on Third Quarter gdp. Futures ahead of that number havent been very spectacular this morning down day yesterday s p futures down by 31 the nasdaq down by 143 rkll have the numbers and the maet reaction for that data, thats coming up at 8 30 a. M. Eastern time squawk box will be right back. all toooo youuuuu sean i wish for the amazing new iphone 15 pro jason sean do you mean this one the one with titanium . Its so light. Dont touch it. Maybe stealing wishes from the birthday boy is not your best plan switch to verizon and get iphone 15 pro on them. sean what . jason yup, and on an Amazing Network sean and i dont have to ruin anymore birthday parties jason yeah, that ship has sailed. Lets go get you the iphone. Here we go, come on hon. vo get iphone15 pro, apple tv 4k and 6 months of apple one. All three on us. Only on verizon. Why choose a sleep number smart bed . Because only the sleep number climate360 smart bed lets you each sleep up to 13 degrees cooler or warmer on either side, while you both sleep at your ideal level of firmness, comfort and support. Your sleep number setting. And now, our new next gen smart beds have temperature benefits, so you sleep better night after night. And now save up to 500 on our new sleep number smart beds. Sleep next level. Shop for a limited time only at sleep number. Nice footwork. Man, youre lucky, watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes [ cheers ] yeah woho running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. Intel took a tumble this week, after reports that nvidia plans to complete for a share of the cpu chips that power personal computers some of the new rivals are armbased chip designs, that is the turn around hopes, they need a turn around. John ford is here. What do you think . Intels turn around, wolves are circling, qualcomm announced a new pc chip on tuesday, expecting eye popping performance claims, versus intels processors and apples m2s, apple has personal computer news coming on monday about its mac lineup, where it might unveil faster chips. All of that is a problem because intel is trying to climb out of a hole it dug for itself with manufacturing and design mistakes under ceo pat gel singer, the chip maker spending tens of billions of dollars. Intel is trying to stand up a newfound ri business that would not only ramp up its own chips intel needs a reliable business to keep paying the bills heres the thing, rising Interest Rates, labor shortages and product delays, this assault from qualcomm, nvidia and apple, probably just the last straw all the pressure from the biggest names in tech, how can intel fund a turn around tune in. I can do this but, yes, but. Theres another side to this. Is there . I thought there was only one side to each story well, on the other hand, well just go right there. This competition in pc chips just validates intels entire turn around strategy 2 1 2 years ago, Pat Gelsinger comes in as ceo, were going to fix twice as fast as we have while fixing our playbook. While were fixing the problem where we couldnt make the best chips for yourselves, were going to start a business making chips for other people, and do a design for ai chips to catch up with nvidia. Critics said slow down, fix your design problems and give up the manufacturing stuff. Its too hard to fix that at once is chip demand going to be that strong in five years here we are halfway into the attempt, and the Artificial Intelligence frenzy as generated enormous demand for chips. Everybody is looking to make custom ai chips, apple, microsoft, amazon and geopolitical tensions mean they would like options outside of israel and taiwan. If intel had tried to make it safe and make its own pc chips, rivals would have come to eat its lunch. This risky turn around effort is the only strategy we could have. Is there a scenario where intel can still do it . Pull it off . Yes, but its about execution, and i think the next six to nine months, it will be clear whether there is a shot. Not so much the details of this particular Earnings Report but them saying were on track for five notes in five years, if they can say that, making enough progress on the fabs, its possible has the ceo got this unwavering support of the board at this point, do you think . Its always hard to see whats happening beneat the sur beneath the surface with a board. I think, i really do think this, the questions about whether the strategy were the right one are pretty much answered the strategy was right. Execution. Its just can they execute. So the big question was around the strategy. Hey. Who has to take the responsibility for just the fiveyear under performance. Is it longer than that for intel, and just not being in the right place to start with . There are a number of people. It was a massive miscalculation on one particular tool and meth of manufacturing thats not going to be ready in time. Who was running the Company Brian crizanich, kind of a manufacturing guy, and they got that wrong under his watch just trying to clean everything up. He is, indeed got to plug the on the other hand news letter. Get you a qr code. You can scan it. You can do it with just one hand or you can type in with two hands. G gets you easy access to the weekly poll. Weigh in, let me know which side you agree with more. Will weight loss drugs shrink the market for diabetes treatments i was talking about the devices there. 40 said yes 60 said no. All right, thanks, jon. Coming up on the other side of this, ecbs decision on Interest Rates well talk about it plus, the latest out of washington, against google antitrust adviser to the biden administration, tim wu will be with us. Breaking Economic Data gdp jobs data, its all out in the next hour. Well bring you those numbers. Market reaction, dont go anywhere squawk returns after this. 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. Good morning, more big name earnings rolling in. Were going to bring you results from ups, comcast, honey well and more the Auto Workers Union says it is a tentative deal with ford to end the sixweek strike at the company. No word on gm and stellantis, well bring you details straight ahead. And were 30 minutes away from potentially market moving Economic Data. Were going to get you a read. The first one there on Third Quarter gdp, all of this as the final hour of squawk box begins right now good morning, and welcome back to squawk box on cnbc, live from the Nasdaq Market site in times square. Im joe kernen along with becky quick and Andrew Ross Sorkin its gdp day. It is its gdp half hour we havent really talked about it that much well get the first read on Third Quarter gdp. Its going to be four and change, five and change, according to atlanta feds at 5. 4 the bananas are back, is that it we get the little gnats. Because of you. Because of me no, tgsits not because of me. I do have these bananas theyre good for you. Potassium and stuff like that. U. S. Equity futures. Thats what were going to be eating soon. You can see, weve got dow jones down about 149 nasdaq down 147. Not a great day yesterday. Theres a yield curve. Were back closing in on perhaps 5 again we had a brief respite earlier if the week, down about 480, 485. But its closing in on that level again in the market, stock Market Equities dont like it that much when were above 5 on the tenyear some of the earnings, maybe not surprising that tech couldnt be good enough to justify all the big moves. Right and i would say earnings have come in strong for the quarter its the guidance thats been a concern for the most part. It was the Cloud Division at one of the companies that reported overnight, it was concerns about what the future of the Advertising Market might be, what the future of the economy might bring. In the meantime, the united Auto Workers Union and ford reaching an agreement to end the current sixweek strike. Thats according to the union which made an announcement last night, including a 25 pay raise and cumulatively raise the top wage at 40 an hour. Starting wages at 70 . 28 an hour. In a video posted online, uaw president shawn fain claims the value went up 50 . The deal still must win approval by local uaw leaders and be ratified by fords union workers. Following the news, grrm and stellantis reached statements. Gm shares up by about 1 3 4 stellantis shares down by 1. 6 . We want to get over to dom chu. He is tracking a lot of corporate earnings that have been rolling in all morning. Dom. I cant get to all of them but the headlines so far making waves. Well start with transportation and logistics. Ups down 4 1 2 on just around 30,000 shares of volume, after it reported better than expected profits on slightly weaker than expected revenues. Ups did cut the fullyear revenue outlook, hence some of the weakness hurt by customer demand and those shares down 4 1 2 next up, shares of comcast, down roughly 1 1 2 just around 85,000 shares of volume, down 2 1 2 . The cable broad band, Media Entertainment giant and Parent Company of our network, cnbc, reported better than expected profits and revenues comcast was helped along by other things better theme park results, and the additional of wireless subscribers, shares down 2 1 2 . Merck down fractionally. It was an earnings and revenue beat, thanks in part to better drug prices, so those shares up 1 they have been going back and forth. And kwwell end on bristolmyers squibb, top analyst estimates on revenues Bristol Myers said it would take longer for sales forecasts, down 4 1 2 ill send things over to you very good, dom. Thank you. Joining us for more on the latest earnings and market sarat sethi, a cnbc contributor, has anything changed your world view with what we have seen in the first two or three weeks of reports. Its interesting you, look at companies, anyone says our next couple of quarters is a little bit uncertain, youre going to see your stock sell off. You see that with meta so unless you say, hey, were going to make our earnings the next couple of quarters. Its sell first, ask questions later, and honestly when you have a tenyear or 5 . There are other options. The shortterm trade is, if i dont think the stock is going to do well for the next quarters, lets move out do you believe companies that say, yeah, everythings great for the next couple of quarters . It seems like theres so much uncertainty. Youre sticking your neck out if youre telling me everything is great. You really are. Its kind of the, hey, if we think were going to make our expectations for a year or two its much better than saying were going to stick by the next quarter. The market is saying, we have other alternatives if we dont like what youre doing, especially i think they were put on such a pedestal, its going to be very hard for them to maintain these multiples, and youre seeing that spread through the market as well. I dont know when headline issues are the most important thing for the stock market, but when you say uncertainty, are we still talking about the fed and Interest Rates or are we talking about this world were leaving in i think its a combination. And they can influence each other. Wars can influence the fed and the economy. Its multiple now not just one, and the uncertainty there. It rolls over into the price of oil. Right . And then it rolls over into our Interest Rates and the uncertainty on the Interest Rates was causing volatility in the market because we just dont know are we higher for longer, or are we going higher, too, and if you get strong prints in gdp and the inputs for inflation, you have to fed that stock. And in that sense, you know, multiples have to come down. Valuations have to come down and in the shortterm, you know, the interesting part for this, joe, is you can find Good Companies here you have to be patient if youre holding them or want to go buy them you can say there havent been any major disappointments in the last three months its mostly concern about the next six months. It really is concern about the next three to six months where is earnings going to go. Where is cash flow going to go and you have an election season coming too you have that uncertainty as well i think once we get some clarity on Interest Rates. I think the market will adjust quickly, and youll see activity every bank has talked about one of the reasons we cant do anything is because people cant get their arms around capital markets. When there was no speaker of the house, it was possible we were going to run into sheettina government did no one believe it, doesnt matter. Nobody had to have one, were going to be spending money giving the money up for defense as well. For defense, but it really, i never saw a blip either way in the stocks or bonds. I think the market is starting to live with that once you know thats expected, its the other stuff. Is this last print in gdp could we be a half or a third of what we print in the next quarter . I think so. I think were peaking in terms of economic activity, not peaking in terms of inflationary activity wages are going up you saw today, ford, i mean, thats going to flow through to gm. It has to flow through. It cant be the big three, a couple of companies or unions cant call the shots overall in wages. But there is wage pressure across the board. Theres wage pressure, and you have seen it in the autos, the airlines, ups, i think thats going to be the thing to watch for is not the gdp growth t its the input growth of where are commodities going to be, and whats sustainable versus shortterm. Based in boston am i . Im based here. You are but great golf courses there and in pennsylvania yes oakmont i wont mention the one up there in boston. Youve got a good one in jersey too. I do. But it doesnt have a name, the one up there, because it was the original oops, i guess, okay, never mind. Sarat, thank you. When we come back, breaking Economic Data. Were going to get that first look at Third Quarter gdp, well get september durable goods, weekly jobless claims and a whole bunch of data. Google is getting ready to begin its defense. That antitrust trial from the government, we will ask former white house adviser tim wu what to expect. Stay tuned, youre watching squawk box, and this is cnbc ai has the power to automate, but if its using untrusted data can you trust the results . Your business doesnt just need ai, it needs the right ai for your business. Introducing watsonx a platform designed to multiply output by tailoring ai to your needs. When you watsonx your business, you can train, tune and deploy ai, all with your trusted data. Lets create the right ai for your business with watsonx. Ibm. Lets create. We are watching google parent alphabet this morning you see that stock off by about 2 1 3 , coming off the worst day since the start of the covid pandemic alphabet was the worst performing stock in the s p 500. Spooked investors a little bit you saw a big selloff. You can see that drop right now. For the one year, stock sup, though, about 29 . In the meantime, the department of justice wrapping its case in the landmark antitrust trial against google now its the tech giants turn to make its case in court. Joining us right now is Columbia Law School professor, tim wu, he served as an adviser to the biden administration, and hes known as an architect of its antitrust policy lets talk through where we stand right now. The government made its case how strong of a blow do you think they made in terms of trying to go after this . How strong is their case i think the case is strong, and i think one of the advantages of the case is relatively simple. Theres this big number at the center, which isnt public. It is now oh, is it public . Go ahead oh, i thought you meant the 2 billion yeah, some huge number going from google to apple in exchange for the monopoly Search Engine i think that has been the core line, pretty straightforward division of markets, monopoly maintenance. I will say the government has persuaded me to some extent over the course of this time. I people pay for the ins of Grocery Store aisles too theres a lot more people who can pay for the ins of grocery is aisles microsoft saying it couldnt compete with those kinds of numbers. As a result, you didnt see duck duck go or whatever that one is. You didnt see bing, you didnt see other ones that were ever out on that. Though they may have tried in the past, they couldnt get access. They had strong evidence from people, smaller startups, Search Engines, branch, different types of technologies that people hadnt seen before tried to get started im sorry, weve got this deal with google. It started to hurt the little guys, and i think that helps the case that came out later. How does this hurt consumers . Consumers are always helped by choice. Almost every market in the United States, you have two or three things, and, you know, google can get away with stuff they dont have to protect privacy. They dont have to lower what they charge to advertisers every product in america is slightly more expensive if they advertise on google. Let me ask you to flip the script how would you defend google against what the government has said googles defense has always been that our Search Engine is the best the reason apple wants it is its the best. The reason people dont like bing, we have smarter employees. Weve sharpened the algorithm, its not about scale its all about getting exactly right, and thats why were better which, you know, look, i will say in the past, when ive tried bing, its ticked me off. It doesnt give me the search results i want why do you have to pay 10 billion to keep people off if thats the case. Would the world be worse with an apple engine that was competing . Let me ask you a question. Sure. Would you feel differently, to me, the one fact that works on your side in a wholly different way is if they were still paying apple, but apple was allowed to develop its own Search Engine at the same time, because effectively what they did was have a standstill agreement with apple as to what they would do themselves on the search thats what came out during the case, that is the most interesting piece. Apple said were not going to do anything more than we would do in 2016, i want to say if that piece was not there. Apple could develop something, if they wanted to, but now make it more interest to go suggest they decide not to not contractual they decided not to they just decided were not doing it, would that change the dynamic to you of the situation . A little bit. It could be that apple, like bing is unable to realize they cant do anything well enough because of the default position being paid for, or maybe they still think they make enough money. It does make it a little bit different. To me, thats the most unattractive fact in basically the whole case, if youre google. Is that a decent remedy that the government would accept . I think the government should be asking for some sign of break up to begin with they shouldnt be asking for chrome, you know, to be sold by google you know, saying knock it off is not a bad next thing you know. I have to say, every remedy we have talked to you about from amazon and beyond, you go directly to breakup. These two companies are too big to exist you told me breakup should be on the table for amazon and that should be there. If you think the government remedy should be break up, do you think every one of these Technology Companies is too big to not be a monopoly i think there is a problem when Companies Get too large and tend to start to stifle innovation i think weve seen that over and over again. The size and scale is also capital. Thats a piece we dont talk about. Is capital unto itself monop monopolistic lever you say spinoff or sell something to chrome, the chrome unto itself, if chrome is eliminated because i think underneath it youre saying sell you tube separately i mean, i think its a much broader sort of story, i think, underneath what youre saying . You know, i think if you want competition in search, you want competition in ai, you need more places you can get started, and right now, we need to get started and search, everything is owned by google everything in ai is owned by google or microsoft, and i think there needs to be more openings for more small vc funded, whatever companies to get their start and that means, you know, when you have a couple after actors controlling the entry points, we dont have competition controlling entry points or controlling capital . The open ai story is one about capital. Who could provide tense of billions of dollars of access to capital and compute effectively to make this thing work, right and youre having a similar thing happening now. Amazon is getting into the game, why are they getting into the game they have the compute and they have the capital to support this i dont know if theres a Venture Capital firm or series of firms that are prepared to put up 30 billion right now for one of these ai models yet maybe. Ill say two things i think capital goes where theres opportunity, and where theres no opportunity, capital never goes if theres more than one place to get started, the internet in the 90s, computer in the 80s, capital will go there. Its not just that these were the best operators they operate the best. One is true theyre no longer the best. It didnt take the government to break down ibm. The government had a huge role in breaking ibm. The troubles they have had lately have been google also has problems, and the question is whether these one Great Companies are just locking everything up and preventing capital, which has always powered innovation, i agree, from exploding the opportunities that are there. A great fear of the government and over regulation, and over involvement and things like this. I agree were not talking about were talking about law enforcement, were talking about opening in the eye of the beholder, a monopoly is in the eye of a beholder Everyone Wants a monopoly, you cant violate the law. You want a legal monopoly. I think google and amazon are monopolies the operative word is i think. I. I think a judge, the law will find that google is a monopolist their big claim is amazon competes in search thats the defense thats the most interesting thing thats probably developed in the last call it three, four, five years, is amazon has developed a massive search business, a different type of search business but a massive search business and if they were such of a monopoly, part of what you would say is that business doesnt exist the way it does. Consumers look for a lot of stuff on google you cant find on amazon, like weather. Where do you find nasdaq, i dont know, things like that. Tim, i wanted to talk with you about meta and the attorneys general that are moving there. Were out of time today, but please come back i think thats a pretty interesting case thats brewing too. Im very interested in that one too. Tim wu, thank you. Were going to talk about Third Quarter gdp numbers. Change of the guard about Morgan Stanley, a top bank analyst about what it means, and the growing corporate fight about antisemitism. Jonathan greenblatt is going to be with us with an update as his organization tracks more harassment in the United States. As we head to a break, a headline from across the atlantic, the European Central bank aouinnnncg it has left key benchmark opportunities unchanged. Well talk about that when we come back after this why choose a sleep number smart bed . Because only the sleep number climate360 smart bed lets you each sleep up to 13 degrees cooler or warmer on either side, while you both sleep at your ideal level of firmness, comfort and support. Your sleep number setting. And now, our new next gen smart beds have temperature benefits, so you sleep better night after night. And now save up to 500 on our new sleep number smart beds. Sleep next level. Shop for a limited time only at sleep number. Big news on wall street. It was announced last night, Morgan Stanley announcing ted pick as the companys newest ceo, taking over after James Gormans 14year tenure in the seat, move effective january 1st when gorman will become executive chairman, joining Morgan Stanleys board, to talk more about the drama, the succession of it all, wells fargo Senior Bank Analyst mike mayo is here good morning to you. I was like, the smoke cleared and we saw whos now going to run this place an investment banker, no less, which is sort of an interesting pick given the direction that james gorman has moved the firm in since he took over that firm 14 years ago you like it . Well, i think ted pick has done a phenomenal job on the Institutional Security sides thats banking and trading. Right remember, Morgan Stanley was days away failing during the Global Financial crisis, especially due to bad fixed income ted pick cut fixed income and grew it. He moved their whole trading business back to the leaders globally, on the banking side, he was involved in the ipos of google and black stone, so half the company, ted pick has done a great job on but theres a few issues here. Number one, in the Third Quarter, Morgan Stanley was worst in class among the Big Five Banks in his core business of markets and banks number two, the Wealth Management business, the inplows in the Third Quarter were among the worst recently and it raises at least a question whether they can get their 1 trillion inflow target the next three years, and number three, the whole Asset Management business, i mean, they advanced close to the top. I dont quite understand how that deal fits in. So ted pick has done a great job at half the firm what does he bring to the other half of the company. Thats an issue. Thats my question to you, which is to say here we have an investment banker. You said its their core business, but the question is longterm, its supposed to be Asset Management isnt that ultimately going to be the core business or no i estimate that the wealth and Investment Management business comprises 2 3 of their valuation of the stock so if you dont get that right, then theyre in trouble. The other head wind theyre facing the same rate head wind, that regional banks and other banks have faced Morgan Stanley is facing that. The big Growth Engine, the valuation driver of the stock is decelerating, and now you have someone at the top of the firm who doesnt have so much experience. First of all, its worth giving a standing ovation to gorman if you look at the 14year run, you would say pretty great the question is where do you think the puck is going next i know the puck is going to pick the question is what is pick going to do or need to do with the puck the other issue is james gorman is not leaving. Hes staying on as chairman, but its executive chairman. Im not sure what that executive means. It means hes actually still running the firm. Is he a player, coach, does he get paid, thats the questions i have. Executive chairman means you get paid you dont have to look at the filing for that. Thank you, you saved me some work here. What happens if performance falls short at Morgan Stanley in the next few quarters or year. Does james gorman get involved the road is littered, when the successor cant keep pace. The last 14 years, james gorman has done a great job nobody thought he would perform 14 years ago its a miraculous thing theres certain ceos we dont give enough credit to. That guy deserves a lot of credit i think hes set the bar pretty high at this point the question is where does this business move to given how transformed its been. Ted pick has big shoes to fill, absolutely i think Institutional Security, ted pick knows in spade, i think they want to get deeper market share, in Wealth Management, 1 trillion of net new assets in three years. The strategy is not changing, the management is changing, but it comes down to execution new players rearranged a little bit. Are you recommending the stock. When you look at Goldman Sacks and Morgan Stanley, they have return on equity. If youre thinking of voting Morgan Stanley, why wouldnt you own Goldman Sachs instead. When you look at the core institutional businesses interest, market and bank, goldman has performed better over the longterm and when you look for investing for organic growth, goldman has done a better job james gorman added 20 billion of intangible assets you have to earn a return on that also. Mike, always good to see you. Thanks for having me. Leslie picker is going to interview ted pick and james gorman at 10 00 a. M. Leslie picker and ted pick. Steve liesman is stand big with breaking Economic Data steve, you got a second to think about it now you dont. Im thinking about it im waiting for it to appear online here. I dont quite have it here there it is. 4. 9 thats against the consensus of 4. 7 , joe. With the dow jones consensus it was 4. 3 for reuters i dont have any details right in front of me now ive got details here. Lets see. 4. 9, the deflator was 3. 5. A percentage point higher than expected leading to see here, Consumer Spending here, which was expected to be the thing that really drove all of this i am interested as well, joe, in the issue of how much business spending came along here because if it was just the consumer, thats one thing its business spending that drives the economy over time here we go ive got the report in front of me Third Quarter gdp, 2023, lets see if i can find the table here joe, i dont have the data, its kind of trickling over, im going to throw it back to you. Its a beat on the up side we had seen a lot of the forecasts out there for 5 , and ill be digging in to see what the consumer did, see what business did, but you do have that inflation inside it, which was a percentage point higher than expected. Joe. Steve, just historically, you get the first look if this is goingto be the highest print in a while, lets say, with the second and third look at the Third Quarter, would it i mean, would it be lower than this you have confidence this holds up at 4. 9 . I dont know, joe, the standard deviation on this is about a percentage point on average, its plus or minus 1. 3 Percentage Points by the time they get around to chewing this up five years from now. I think its safe to say that the number is going to be higher than potential. Its a strong number its stronger than when we started estimating this quarter, but, yeah, youre right. It is going to be revised again and again and again over the next several years just because of the difficulty of counting a 21 trillion economy. Just to add to that, the u. S. Jobless claims number of 10,000 to 210 k, the week before the october 14th week, jobless claims revised to 200 k. Any quick thoughts on that again, its not ticking up. Apparently, i think we went through this one time. Those who are on strike do not get jobless claims, but if other factories were laid off because of that or the company laid off workers, that would be those would be people who would be eligible for jobless claims. I am getting a little more data here Consumer Spending, 4 . The price index, x energy and housing was plus 1. 8 . Thats about half of what it was the prior quarter. Thats good news right there on inflation, and again, i do not seem to see the business spending number. But thats something im going to be looking for. One other thing, the ecb this morning came out at 8 15 kind of signalled, i guess you could read it as something of an extended hold in policy. What they said in their statement is that the current level of rates should help them make progress towards their goal of bringing down inflation to their target they hadnt used that language before, and it suggests they may be on hold for a bit of the acb which has hiked ten times in a row. Stay with us. Lets bring in nighathan sheets francis donald, Management Global chief economist and strate strategist and our senior markets commentator, mike santoli. It wasnt five, nathan it was pretty darn close, though is this the highest were going to see for a while, and whats in this that makes it look so hot. Im willing to lean in on this this is the strongest gdp were going to see for the next six quarters or so this is a very hard reading, the consumer just had frenzied spending during the Third Quarter. It was kind of a surge in the services sector, yes, but also in good spend. The entertainment was hot with these concert tours and the barbenheimer extravaganzas. Consumers are out spending it underscores the ongoing resilience and durability of the u. S. Economy the labor market is strong wages are growing, and thats supporting the consumer. We see yet again in this report. I do expect it to moderate going forward, but, you know, strong report. Pjust looking at all the different markets, the stock market improved. Yields fell pretty, i mean, you know, just talking basis points, but theres the tenyear, gold came down. Whats in here that doesnt look hawkish for the fed . Why isnt this being taken more hawkish . Or hawkishly lets give the market a couple of minutes to wake up and get through the details of the report first burt youre right i have two jobs, an economist and a strategist sometimes the jobs are the same and sometimes theyre not. As an economist, you look at the numbers like this, and i agree with nathan, hard to push back and find anything bearish in this report. I have concerns as a strategist. A, thgsis is not going to be excite t exciting to the fed. This does not give the ability to do that more importantly, markets are always looking for the next area of growth, and i also agree with nathan on this one, moving forward, were not going to get higher than this where is the next growth impulse coming from . Its probably not coming from the consumer whos going to see weaker wages savings that are depleted, credit that isnt at the same level. Are we going to see it from manufacturing, that might be an up side. Housing is looking weak in general. If youre looking forward the next six to nine months, this makes the next six to nine months harder, even if on the surface it looks like a great report. Not going to come from the government fiscally. Maybe ukraine going to do better but were spending money elsewhere. You dont see more stimulus domestically, do you and thats another game changer about the next cycle the post covid rebound is different. The next recession, whether its six months from now is going to look different were talking about fiscal like we never have before, and not because its going to provide the up side in the next recession but probably going to have much more limited space look now, an almost 5 gdp its already creating dislocations in the bond market. What are we going to do when it data slows if this is where were at in good times, bad times look more difficult ahead. Mike, can you make sense of the i mean, even gold and oil. Oil is coming back a little. But it was weird s, wasnt it . Didnt look like a really hawkish number for some reason. I think we have disconnected the near term macro numbers from what the fed might do. The fed has told us that the bond market has been doing what its been intending to do, which is restraining the economy i think thats why its not feeding through directly to some kind of hawkish message from the fed. We have a little bit of a longer leash on that. The market has been struggling for a while to treat good news in the here and now on the economy as good news for stocks. You know, as francis was saying, the psychology is find right now, were emp tying the tank o our spending capacities. Earnings are treatined the same way as if its going trail off. We have a near 5 annualized gdp print, and the economics are getting crushed over the last couple of months that shows where where peoples orientations are perhaps pressure off the core price index within the gdp report maybe gives a breather to yields well have to see if that lasts. All right thank you, mike santoli. Nathan, thanks francis, i got a joke from stripes, but i dont think im going o use it pran s francis, good to have you on as well. When we come back, Antidefamation LeagueCeo Jonathan Greenblatt will join us on the corporate response to antisemitism in america stay tuned youre watching squawk box, and this is cnbc as a fiduciary, i promise to put your interests first, always. I promise that our relationship will go well beyond just Investment Decisions. Its the intersection of your money and your life where we can make the biggest difference. Charles schwab is proud to support the independent Financial Advisors who are passionately dedicated to helping people achieve their financial goals. Visit findyourindependentadvisor. Com [phone starting route. ] Technology Helps us navigate to work. [phone go straight. ] but, to navigate the complexities of modern work. [phone turn left. ]. You need more than technology. You need cdw. [phone you have arrived. ] so well implement cloud based microsoft modern Work Solutions like microsoft 365, teams and azure, so your teams can collaborate with zero trust security anywhere. [phone destination ahead. ] microsoft makes modern work possible. Cdw makes it powerful. Coming up, Antidefamation LeagueCeo Jonathan Greenblatt in the fight against antisemitism in the United States stay tuned youre watching squawk box on cnbc welcome back to squawk box. Antidefamation league saying 100 u. S. And Global Companies have signed on to the workplace pledge to fight antisemitism. These include Companies Like google, s p global, ups, and the nba. At the same time, Hamas Terrorists attacked israel on october 7th. A 400 spike of antissemitic incidents in the u. S the fbi is seeing increased reports of threats against muslims. Joining us is Antidefamation LeagueCeo Jonathan Greenblatt you announced plans to put this list together. Jeff sonnenfeld is putting a list together. He has more names on it. Not necessarily your pledge but statements companies have made whats the process been like, whats the feedback and potential backlash been like jeffs a friend, and i think he does great work, and hes noted how people like Albert Bourla and the ceos whos a remarkable person of a lot of companies, nvidia, ibm have spoken out what were doing is when Companies Say what can i do, more than just issuing a tweet, were giving them a place to do that signing on to the workplace pledge, like google, come omnicom, standing with their jewish employees the antisemitism is spiking around the world the jewish fate is facing a gen genocide threat. I have jewish employees, jewish customers, jewish shareholders, what can i do. The workplace pledge is an easy way to stand with jewish communities. At the same time, you have this conflation oftentimes, and i want to read you, bill ackman on twitter or x last night antiisrael has become antisemitism, and he says just ask the students, but it is an issue thats not just about the students, its an issue that has been raised in workplaces across the country and around the world, and how you think about that conflation and also how you think about ceos and managers trying to resolve that conflation look, hes right that ant antizionism is antisemitism period i dont think thats much of a debate anymore we know this because we hear what kids on these campuses are saying or activists are saying theyre not saying twostate solution theyre saying final solution. That should have no place anywhere i think its wrong. Go ahead. I was just going to say that i see it coming, the invasion of gaza has been put off. Right. If it does come, and its likely to, its going to be very bloody its going to be. How does israel and how do you help israel win the pr battle because you can see right now its going to be palestinian genocide, its going to be israeli terrorists, even though israel has a right to defend itself. Of course it does. And the only way to defend itself is to try to do to hamas what the west did, or whoever you want to give credit for, did to isis. You got to go in, theres civilian casualties. Its a criminal outfit, its also the government of gaza. Israel needs to respond to the attack the slaughter of people. You make it so the impression that israel im not israels Public Relations community, but my job is to keep jewish people safe. I dont know if you saw what happened at the cooper union last night where jewish students were barricaded in the library because of a mob outside that banged on the doors and yelled globalize the intafada you have hamas supporters on these campuses and Governor Haley talked about isis, we have laws in place to prevent americans or others from providing Material Support to foreign terror organizations the adl sent letters to 175 University President s telling them that groups like students for justice in palestine, they should be investigated. I dont think i was that aware. I wouldnt have been in a position to have such a strong viewpoint. Where is it coming from . The professors, the president s whether its right wing extremists and White Supremacists or left wing radicals and hard and antizionists, these people are the fringe we need to put them back on the fringe. I wouldnt say we would fight to allow nazis to march. Thats giving them the freedom of speech. I believe ferociously in the first aermendment but freedom o speech is not the freedom to slaughter people, and freedom of expression is the freedom to incite violence. Im okay with you marching but not when it involves imperilling, endangering other people march and say that march and palestine is occupied . You can certainly theres nothing wrong with criticizing israel nothing wrong with criticizing george soros its when you demonize and dehumanize and put people at risk we have all over the country these crazy rallies taking place that call for white jews off the map. The intifada was a violent military action that involved murdering thousands of civilians. Who thinks this is normal . Nazis, too. Yeah. I will tell you something, 1939, right down the street at Madison Square garden, 1939, there was a rally on behalf of the third ro reich in new york. 30,000 people turned up. I think well look back at these individuals, the people supporting hamas, the same way as we looked at those supporting the nazis. Whether its a University President or Community Leader who dithers and equivocates, history will not judge them well probably the biggest problem is iran. Iran is the biggest problem its beyond me how we continue to tolerate the activities of that country they want to wipe out israel and the United States. And the United States at the adl we study extremism. We have students on our campuses, activists in our communities repeating it what do we do to get underneath this . Theres two issues, one is it cant be normalized, i would argue cant be allowed to continue in this vain. It needs to be called out as hate speech. Ultimately to rid the world of these ideas, Something Else has to happen underneath the conversation thats the thing i dont know what to do about look, we have to recognize that some things are right and left, some things are right and wrong, some things are good and evil the nazis were evil, isis was evil, hamas is evil. You have to defeat evil. I must say, we denazified germany, we need to dehamasify gaza after this. Period the question im asking, to the degree you believe you may not agree with what im about to say, that hamas is an idea and that we should and should hold accountable every individual responsible for this and anybody who has these ideas. The question is a longterm question, which is once you rid the current individuals who are accountable, how do you do that at the same time that we dont create another generation of them look thats what were talking about here i hear that, as jewish people weve been dealing with antisemitism and antijewish hate for thousands of years. Maybe we can never truly defeat hate but we wont sit around and let us take us out once again. No way one terrorist at a time you cant just throw up your hands im not throwing up my hands. Im suggesting that i think theres sort of a two layered thing that has to happen here. Once is you need to deal with the immediate issue, and then theres almost a larger conundrum that im desperate to rid the world of if you are a zionist, if you say israel has a right to exist, you will never convince you will never get to the underlying problem. I dont say this often, but Jared Kushner had it right, the idea of bahrain, saudi and the uae offering the palestinians a better deal than what hamas, hezbollah and iran are offering them we have to give them the dignity and quality that they deserve in a way that keeps israel safe and never endangers another person important conversation. Thank you. When we return, well talk markets, earnings and try to get you ready for the day ahead. Squawk returning after this. 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 our next guest is positioning for a soft landing and said the fed has more to risk being dovish right now i want to bring in phil camperelli. Lets talk about the gdp number we saw today it was a strong 4. 9 do you think things roll over or is this part of your soft landing scenario, we come down from there and we dont actually hit a recession . 5 gdp growth is not a soft landing. Thats the opposite of a soft landing. The economy is defying gravity right now. Its the gravity of this Interest Rate cycle that nobody saw coming if you look at the three things that matter most, weretalking about gdp right now,yes, 4. 9 this morning, that would be the strongest quarterly growth since 2021 after multiple quarters of abovetrend growth the second thing is the labor market thats the canary in the coal mine thats what matters the most here were printing 266,000 jobs a month . Theres 1. 5 job openings to every one person employed . And initial jobless claims, which is the most important number, will not budge from the 200,000 number the last cpi number is the third thing. Its gdp, labor and inflation. We saw that cpi core number up 0. 6. Thats why i believe the fed has more risk being dovish than hawkish because they cant allow inflation to reaccelerate and have to keep talking tough that doesnt mean other rate hikes, does it thats a good question. I think every meeting should be live december is pricing in about 30 . Think about the backdrop i just went through you have really a Third Quarter thats putting them in a position, we believe, to keep every meeting live and the options open and theres two options, either high for longer or even higher for longer they will push back any easing as fast as they can. I think as far as they can i think thats what the market is dealing with of the past two months i want to be clear about something we have 20 seconds until the end of the show. Tell me what you do as an allocator . Dont add duration just yet 5 tenyear is not controversial and we like u. S. High yield. U. S. High yield is a norecession trade a soft landing is no recession its also high for longer. A highyield instrument yielding 9 is attractive and dont get too far from home on equity. You like junk bonds phil, thank you very much for being on with us less junky. That does it for us today make sure you join us back here tomorrow ill be here again right now its time for squawk on the street. Good thursday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber at post 9 on the stock exchange. Equity pressures under morning all morning as the street continues to sour on mega cap tech, core pce comes in a touch light at 2. 4 even at gdp with 4. 9. Meta shares under pressure as guidance overshadows this quarterly beat also ahead, the uaw and ford reach a tentativ