Be near. Well give you the latest reporting on that potential deal between the studios and the writers. And the fed is Holding Rates Steady, signaling it will keep rates higher for longer. Deal of the day, cisco agreeing to acquire splunk. Both companies cite what they call complementary capabilities in a. I. And security. Splunks gary steele is going to be part of ciscos executive leadership team, reporting to chair and Ceo Chuck Robbins and both gentlemen are going to join us exclusively at 9 15 this morning in about 15 minutes, jim. I think this is terrific, and i will tell you why. What cisco tried to do for a long time is have a lot of recurring revenue, and splunk is nothing but recurring revenue. Cisco has tried to be a major factor in cybersecurity. We know its incredibly important. Splunk will give them the opportunity. They had a Smaller Division that does cybersecurity. Its not been that much of a winner, frankly. In the meantime, gary steele has taken the company, and david, you remember, starboard was agitating about splunk. He came in and fixed the company in 17 months and prepared to be able to sell it. That was not what he wanted to do. He was going to come on mad money, but he has done so much in a very short period of time that i think it makes tremendous sense for cisco to strike right now. We can ask the guys, but there was, you know there were talks between these companies a year or two ago. Yes, there were. Interesting. They didnt get a deal done then. I just wonder what changed. Well obviously ask them, but do you have any sense . I think that gary steele is a deal maker. Hes a realist. They were doing terrifically. I think it was a Company Always for sale. These guys, and theyre going to be on, these are two of the most straight shooters ive ever met in business. Gary is a man of few words. You got to be careful. Gary is yes, no. How do you think hows the new microsoftazure deal . Oh, okay. Good to know going into this interview. I love them. When prove point was doing badly and he would tell you. Splunk had totally lost its way. I had a splunk tshirt and i just kind of, you know, put it aside. No dog named splunk. But in the meantime, they have had this incredibly sticky group of customers, and everybody swears by them. They have observability and terrific cybersecurity. Theyre on the edge, which is something that cisco has done, and i think were going to hear an amazing story and in the end, youre going to say, i want to buy cisco because they have the annual recurring revenue which is almost 50 , which had been chucks goal for a long time. We will enjoy we enjoy meeting both of them together, and both of them are really a match made in heaven when you try to figure out where cisco needs to go in terms of growth. Certainly one of the largest deals of the year without a doubt, and we talked about the fact that there has been some hope, some optimism when it comes to m a starting to percolate in both the fourth quarter, which were not even quite in yet, and next year. You know, i have heard this a number of times. This is the first true example of it, though, of a large deal. This is a very large deal. Certainly even for those who are considering deals that might garner significant antitrust or at least in this environment, antitrust roadblocks, im hearing that, you know, ceos are willing to consider things in a way that they might not have previously. Previously, the atvi. And importantly, jim, it is as much about, all right, we think we can win but its going to take longer and theres a willingness now to say, well, all right, 18 months is kind of the new 12 months, you know . I thought that david, the horizon more active m a environment, but obviously, this deal itself also coming back from previously at least having tried at cisco. We know that chuck was one time interested in data dog. Hes always wanted to make an acquisition in this area. I think the textbook bridge too far was amgen horizon where lina khan, i would say go so far as, some people say she made up the reason to block that deal. I would not say that. That was quizzical, to use a word that you enjoy. Yes. Yes. Do you like the flag behind my head . Oh, yeah. Look at that. Our great allies. It is funny because i just remember in 1974, they were youve got a star. I just point it out because i think people will look and realize the vietnamese are here today in celebration of the great relationship we now have. Yeah. Well, speaking of stars, you may not see your favorite stars back yet in your favorite shows. Oh, you broke some news today. It was actually yesterday. Oh, what were you doing on earlier this morning . That also. We are going to be keeping a close eye on the continued negotiations between the writers and the producers, the wga and the producers, facetoface meeting yesterday did yield significant progress and optimism on both sides. That is according to people who are close to these negotiations. Speaking with them late yesterday. And the hope is that today they can finalize a deal, that the negotiators on behalf of the writers can bring back and get approved. There is always and still obviously a possibility that will not happen, but certainly optimism as i was reporting on both sides, that and the fact they can come in today with a relatively short list of things they finally need to do. In fact, i was told there was a belief they could have gotten it done yesterday in the room. But they didnt quite get there, and the hope again is that today will be the day. For the writers to agree with the producers on a new deal that will put them back to work and then of course the question becomes what follows with the actors. Well keep an eye on it. 9 00 a. M. Pacific time is when that is going to begin in terms of, again, the facetoface negotiations. Thats very interesting, david, because this discussion with the uaw has taken a turn that is almost its just irreconcilable. Its interesting at one point the rhetoric for this was pretty heightened. And they still solved it. Yeah. What are you, a message in a bottle . Looking at this journal piece here, david . I want to get to this press release about Rupert Murdoch. Stepping down . Hes stepping down. Rupert murdoch is stepping down as chairman of both news corp. And fox. I was reading this now. Effective as of the upcoming annual meeting of shareholders in midnovember. Murdoch, again, will become chairman emeritus. Very simple statement here, obviously, Rupert Murdoch, perhaps well, i dont even think theres much question. The 92yearold murdoch is certainly seen as the most consequential Media Executive of our time. Love him or hate him. He has had an enormous impact. Fox is obviously run by his son, who spends a lot of time in australia, from what i hear, but that is run by lochland, and thompson is running news corp. , but he has been chairman of both companies. Just trying to see here, guys. Well, lochland, who has been cochair, will become sole chair. Thank you. For my entire professional life, ive been engaged daily with news and ideas and that will not change, but the time is right for me to take on different roles. You remember did you read house of morgan . Theres this moment where rupert comes in, just a total brigand, and he had everyone he outfoxed everyone, to use the metaphor. Yeah. Listen, rupert has a long history of doing that. Extending right up to the seminal deal with disney, which many people would say he got an incredible price for the fox assets that were sold to disney, and i remember when i broke that story, of course, the idea that fox would actually have been a seller, but the way people have described Rupert Murdoch to me through the years is that hes hyperrational. When he sued me, was that hyperrational . I dont know about that, jim. In the case certainly of a decision to do an aboutface and say, this is the time to sell, and you could argue that was a good decision, given imagine if fox were dealing with the same things that disney is and so many others in the content business. He chose, were going to be news and sports, and were going to sell at a huge price. Were going to sell sky. So many of the fox content assets. I enjoy him. I did have a bit of a legal battle. Fox news changed the landscape in this country and democracy forever. Well put. Wow. Well put. You statesman. It comes not long after dominion and a lot of reflection about murdochs decision to part ways with Tucker Carlson and some of the fraught questions that he has had in the business and politics of media. Davids right. Medias never been the same. And wow. The dominion case changed things too. You know how hard it is to prove malice aforethought . And they did. Big news in media. When we come back, well talk to ciscos Chuck Robbins and splunks gary steele about their 28 billion deal. Obvious a lot else to get to, Central Bank News today as the bank of england holds steady. Youve been a real rock star. Rock star . What do you know about rock stars . Billy idol . I mean wheres the skintight leather . My shoes are leather. Wheres the unnecessary zippers . That thing billy, rock star is just how doug feels when he uses workday. Thanks, rory. Ill show you rock star be a finance and hr rock star. Workday. For a changing world. Billy idol just stole your golf cart drumroll by lonis, Little League this just in got the keys to what you want and what you need something new Something Sweet moving to a different beat okay now what . can i get a get a drumroll . what . can i get a drumroll drumroll . what . can i get a can i get a drumroll please oohh thats nice yahh ya, can i get a drumroll, can i get a drum thats nice announcer the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. We have bigdeal news today, and david, you know this, this is just really the deal. This says that maybe m a is back. 28 billion deal, cisco to buy splunk. Boy, are we lucky to have the principals here. We have Chuck Robbins, the ceo, chairman of cisco. And then we have splunks ceo, gary steele. Many times, both of you guys on mad money. I want to thank you both. Congratulations thank you. And i want to start with you, chuck, in the sense that you have always told me you would like to have the annual recurring revenue be higher and really put it so people understand youre not some old Hardware Company but youre really at the cutting edge. This gets you to almost 50 . That has to be one of the drivers of this deal. Its, first of all, thanks for having us on such short notice. Were really excited about this transaction, obviously. And you know, this deal, when we close it, it will add roughly 4 billion of arr to our existing run rate of arr, so it will put us close to 30 billion if not over by the time we close it, and it will also put us over 20 billion in swoftware on an annual basis. 28. 44 billion. Thank you. Thats our current arr. Its really big. Im not i mean, i think people have to understand, when you say arr, can you please explain to the doubters about your company that where you have been going for a long time is where this is where gary fits in. Yeah. Garys done such an amazing job with this company over the last 18 months, and you know, if you think about the fact that in year one, its cash flow positive, accretive for us, and its theres minimal eps impact in the first year but its eps accretive, gross margin accretive in years two and beyond, well, gross mairgin accretive in year one. Great fit financially, great fit culturally. Gary, why sell . Why now . He just said youre doing a great job. I didnt tell him that before we did the deal. No, its its just a great opportunity for us to continue our journey. We made im really proud of all the work that splunkers have done. We have made tremendous progress, but this really accelerates us on our journey, and its a great outcome for our shareholders. Yeah but it does cap your shareholders. Oh, come on. No, hes making a decision. You guys have talked, previously, about a potential transaction . Same price. There were rumors prior to me joining, but that was before my time. Okay. So, i joined in april of 22. Weve been on this journey for 18 months, and i think this represents just a great outcome for our shareholders to be able to capitalize on this opportunity, and frankly, i think the synergies that chuck described are super exciting. Weve got so much opportunity together. It really helps us get to the journey that weve been on, so super excited. Our collective team members are pumped up. Theyre really excited about this. Our security team, our observability team, our Sales Organization and even you were talking about your sales leaders as well. Everybodys super excited about this. We think we can drive a tremendous amount of opportunity in the market. I understand that, but i always make the point when its a cash deal that your shareholders are getting what theyre getting, and you can talk about all of the great things that are going to come and that may be for your employee base, but your shareholders are moving on, many of them, in fact, probably selling today. Right, and i think but if you look at it today, if you look at the premium that were delivering for our shareholders and if you look at our historical stock price, this represents a great outcome for our shareholders. Okay. You want to any specifics you want to offer in terms of multiples as to why . I think that just looking at the our historical trading values and the premium delivered over that, while weve seen a lot of progress in our share price, we still have a long ways to go and this represents just a great outcome to deliver cash to our shareholders, and we think its just great opportunity. Now, gary, fedex reported last night, and it was a remarkable quarter, and they have tremendous cybersecurity and i also think they have great observability. How much of that is you . I think, you know, just like many of our customers, we h have were driving resilience. We underpin these Large Companies and how they think about our Security Operations as well as how they think about keeping digital resilience across applications so were really critical to the global 2000. Dont want to get too in the weeds, but chuck, you have been you have tried to own the edge, and they have graced up the edge. Can you explain what that means for software and a. I. Too . If you think about our Security Portfolio, particularly our xdr, extended detection and response, so were basically extending and helping customers respond to threats. We see more threats than most any Security Company out there, and they have the sim platform that is the backbone of Security Operation Centers in all of our customers. When you bring that together with all the insights that our customers can see coming out of their network infrastructure, out of the internet connections, out of the home offices, and then you layer a. I. On top of that, we can help customers literally move from detection and response to predictive and prevention prediction and prevention. So, we think theres a huge opportunity. I can tell you, our customers are going to see the obvious synergies here and the obvious strategic fit. Chuck, youre always great about helping viewers understand, even quarter to quarter, where we are in the Business Cycle and how the business helps frame that. What is the timing of this deal say about that . I think the timing of this deal says there are more the Cyber Threats that our customers are facing around the world and the need to actually have greater visibility into their Technology Infrastructure has never been higher. And so, coming together and creating more capability for our customers at a time where gary has made so much progress in the last 18 months in this company, and we have actually been evolving our Security Portfolio and its in a much better place today, so you bring those two together, and we think we can make substantial progress on helping our customers with all the dynamics they face today. Chuck, in the release, it says this is going to will allow organizations to enhance their digital resilience and will accelerate ciscos strategy to securely connect everything to make anything possible. You like that, dont you . I do. But i want to understand what it means. Youve explained it a bit, but tell us more. If you customers today, theyre rebuilding their entire i. T. Infrastructure to deal with multicloud environment theyre operating in. Theyre dealing with hybrid work. Theyre dealing with home office has become a branch now. Theyre rebuilding all their application. Theyre running them in a very distributed way. Youve got data distributed at the edge. You have workers everywhere. So, the threats and the dynamic nature of the Technology Architecture has changed significantly. So, what that means is that every customer needs to know more about whats going on in my Technology Infrastructure. Cyber threats, application performance, customer experience, all those things, and when you bring our the Technology Insights that we can deliver, and you combine them with the platform, the data platform, the observability cloud that these guys have, we believe we can give customers insights that they just cant get today. Go ahead, jim. Both of you have been feeling that the economy is muted. We had the fed talk yesterday about how the economy is still very, very strong. Gary, let me go to you, because you did that fantastic deal with microsoft, so you got a great overview. When you hear that the fed says, you know what, things are still pretty hot, and i look at both of you, what you say, it does seem out of sync. Is it just your industry that is seeing more macro headwinds than the other industries . I think, you know, as weve talked about in our prior earnings call, weve seen some macro impact, and its really just slowed down bigger projects, but there still is a consistency and a need to buy the capabilities that we have. I mean, were underpinning how people think about their security posture, how they protect their enterprise, and as this broad digital footprint continues to expand, people have to buy something to help them get visibility in those apps. While weve seen some macro pressure, its been its been such that we have been able to operate really well within it. Let me Say Something david brought up. You came in, the company was frankly in disarray, and im not going to talk about the previous administration, but you came in, and it was very difficult to fathom. And one of the things that you did was you built proof point, and when it was right to sell, you sold. I do agree with david that its a very short period, talking about 17, 18 months. Why not just go for the long haul . You know, i think this accelerates the journey that we have been on, and we made tremendous progress that i think im really proud of the team and all the work thats been done. But this really delivers a great outcome for our shareholders. It accelerates that opportunity to drive value for them. And were being super thoughtful about how do we deliver great shareholder value. Was it about scale . Were you not was there some level that you simply didnt see yourself getting to without partnering, so to speak . I think it just it delivers broader scale. Things like the International Footprint that cisco brings. We can get to those international markets. Having boots on the ground in places that we just havent yet invested in. And so, it really accelerates that opportunity to go take share around the globe, and we think that this is just a great outcome as a result. You going to integrate splunk . How are you seeing the integration . Garys obviously coming on. What is the role going to be . Garys going to report to me. Were going to work over the next 9 to 12 months and actually figure out some of the organizational integrations. I would expectthe Technology Integrations will begin day one. We already we already understand the integration points that we can drive. And our teams are super excited about it. So, were thrilled that garys going to stay on. Chuck, jim mentioned youre going to be chair of business round table, huge, especially going into an election year. Is corporate confidence rising, falling, holding pat for now . I think brt put out the latest confidence index, i think, a couple weeks ago, so i think its kind of flattish right now. I dont think its moved significantly either way. And does this and this deal, does it fit into at least how youre feeling about the macro or the couple years ahead . Well, i think that customers, and their spin on Technology Areas and what we all do together, were not trying to time a deal on whats going to happen in the next 90 days or next 180 days. The time was right for us. We began our conversations. The synergies and the strategic fit for our customers is right. The financial side of it is great for the combined entity. The cultural fit is great. So, we werent worried about whats going to happen in the next 90 to 180 days. This is just a great its a great deal for our customers and our partners longterm. Let me ask you before we wrap up, did anyone say in the room, you know what, we have an ftc chairperson who is against every single deal, its not worth doing it . Ill comment, and gary you can add, if you like. We think this is a very complementary deal. This is not a rollup. You know, its not we dont have a lot of overlap in our portfolios, so our general the experts that we have talked to are the ones who have given us the 9 to 12month estimate on trying to get the deal done. And no china approval, even though there is a Small Business there. Our presence in china is de minimus. All right, gary steele. Congratulations. Thank you. On turning splunk around so quickly and then selling it. And chuck, congratulations, just doing what youre doing, almost get to that level where you deserve two multiple turns. Thank you very much. Thanks, guys. Take a look at the premarket here. Still looking at some elevated yields this morning. Tenyear is just off the morning highs, but not too far still from 4. 5 . More squawk on the street when we come back. Unpack once and get closer to iconic landmarks, local life and cultural treasures. Because when you experience europe on a viking longship, youll spend less time getting there and more time being there. Viking. Exploring the world in comfort. You got this. Lets go. Gobble gobble. Ive seen bigger legs on a turkey rude. Who are you . Im an investor in a fund that helps advance innovative sports tech like this Smart Fitness mirror. Im also mr. Leg day. 1989 anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq100 innovations. I go through a lot of pants. Before investing carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com. All right, lets squeeze in a mad dash before we get to an opening bell. I want to talk about broadcom. This morning, the stock is down hideously, almost 10 . I believe that the story that came out and the information is patently false. Really . You want to tell people what it is . It is the idea that google, which is actually google cloud services, led by thomas curry, whos one of the great people in this industry, the my understanding, and obviously these broadcom does, a lot of people feel, charge too much, but a lot of people feel nvidia charges too much because theyre a. I. And they have proprietary technology thats very hard to duplicate. The story i understand is patently false. The relationship is deep. Multiple years, and i think that they are actually good strategic partners. Total cost of ownership is good. You may say this is qualcommapple. All i can tell you is that the story as i understand it is patently false. The story itself is that google wants to basically replace these tpus that they buy from broadcom right now and replace them with their own. Right. Homemade chips, so to speak. Just so people understand theres an interesting story today in the journal about apples failure to create thats where i was going. Lets understand, these are not offtheshelf chips. These require a tremendous amount of intellectual property. I know that these companies have been and had a longterm relationship. Strategic, complex a. I. Solutions. Patently false. Lets get the opening bell here in the cnbc realtime exchange. At the big board, it is the Prime Minister of vietnam here in new york for the unga. At the nasdaq, its the wnba, the semifinal series begins this sunday as jim, were going to flirt once again with 4,400, actually just lost it. Yep. Larry williams, my favorite historian of the market, also just to work for when i was in diapers, which is not when i was 10, despite what you would probably say. What i will tell you is he has been incredibly negative on this market, and is covering this saying its time to cover the shorts. I actually like that. This is, i think, an overreaction to a fed that is doing what everybody thought they were going to do, which is that you have a Strong Economy and they have to continue to do this. David, i would point out that there wasnt anything in the statement about 2 that was different. There wasnt anything in the statement about how the economy isnt still hot. I mean, look, you can look at kb homes, right . Home prices are up 40 . Kb home prices were down a bit from last quarter, but they say theyre going to go right back this quarter, so we have a situation where we do not have enough weakness in the economy, whether it be by cost or whether it be labor, to justify staying flat. Were going to get rid of the inverted yield curve but not the way people want it to be. Right. And you know, you want to sell the market, go ahead. Septembers a bad month. Knock yourself out. Sell now. Remember the other day you were saying we were looking at stocks and the stocks were up here and then why sell now . I agree with that. Why sell now . And i just think that this market is fulfilling the september rosh hashana, y yom kippur. Lets not forget the federal government is flooding the market with infrastructure at the same time the core group of people between 35,000 to 45,000, which is incredibly in this country most of the country, does is struggling. And struggling because of inflation. Theres something that i wish that jay powell had said, which was on the lennar call, stewart millers a brilliant man, he understands hes the dean of the housing group. He said, people respect that a house is going to cost more, so they have to act now. He has to break that, powell. He has to make it so you feel like, you know what . I better sell now, its going lower. Right now, its, i better buy, its going higher. And until that ethos changes in our country, you are not going to see a fed that is a dove. Its going to stay a hawk. Thats interesting. Youve talked a lot about food inflation this week. Terrible. Callan with a note today about udson, smucker and campbell, about why volumes are not going positive and theyre making up for it on price. Good luck. Costco is kind of wrecking the price structure. A lot of these branded products, with the premium brand, which is kirkland, and i feel like walmart, costco, and amazon are price cutters here. By the way, fedex, price cutter to some degree, and yet still takes a lot of share because 400,000 packages today because of the u. P. S. Strike. Didnt strike. Sorry, the negotiations. Thats why fedex is doing so well. You know, carl, the idea that the fed was going to come in and be dovish when they have so little to be dovish about just shows that theres a level of ignorance at the macro level that is completely different than what the microlevels say. You mentioned the teamsters. If davids reporting on the writers, and we got some chevron progress in australia on the lng, nat gas down in europe this morning i morning. Nat gas is an international market. Never used to be. My travel trust owns coterra. Thats the one saving grace in this entire complex, which is natural gas used at home, is not up big. Gasoline is up big. I think one of the things that people are focused on endlessly is why are the saudis not helping us . All right. Whats the answer . I wonder whether its political. Are the saudis do the saudis want to elect a Different Party . You mentioned that yesterday. I cant understand why theyre not helping. They are the swing. Were not. We should be. Now, were producing a little bit more, but you saw the recount. Our Companies Just have discipline and theyre not going to violate the discipline, because they want to make a lot of money. Speaking of which, the spread between our b. O. B. And retail gas is, what, 1. 30 at this point . The spread there is amazing. Yeah. Valero. Interesting. Although, some downgrades to the refiners. I dont trust that. I think the refinders aers are a lot of money. The most aggressive buybacks of the entire market are the refiners. I think the only thing that has been brutal is the ipo market, and when im looking at these ipos, theyre not really holding up. The first day seems to be good or the opening. Arm had a very good first and partially second day. Instacart, really, intraday, faded quick. And calio did not perform particularly well after the initial exuberance. The shopify relationship was hopeful. Arm is still above its bid, up 51. This anchor tenant, i mean, anchor tenant, what is that . What is that, federal realty . Youre talking about these cornerstone investors who both came in, in arm and instacart. All that means is companies that dont have to worry about what multiple they pay, so they take the float down. Is it market orders that is driving these opening prices . I dont know. I mean, instacart is now only a buck above where it was offered. Calio also came to market at 30. Cava is down so much now. First trade, 42. Now 31. I guess they could say its still up. Klaviyo, right . Klaviyo. Its a bit of an oddity. At what point do we start calling instacart maple bear . What is that like a sesame street oscar, maple bear. Do you understand the genesis of that . The genesis . Yeah. Not at all. Okay. I do. I was saying calio but its klaviyo. You say klaviyo, i say klaviyo. Lets call the whole thing off. They are calling the whole thing off. Have you seen that deal . Look, i mean, still, if youre goldman, goldmansachs, which youre not, remember the other day i said when you were down at goldman, and you were like saying that i meant that you worked at goldman, which i wasnt, but goldmans got to be still happy the deals are getting done. Got them done. Theyre still above where they sold them. And Morgan Stanley got this splunkcisco, so there is kind of a Morgan Stanley did, and a very small new Investment Bank was actually ciscos lead advisor as well. Somewhat surprising. A true boutique. Is the mojo back . I think the mojo is starting when it comes to m a. I dont think its back. Its too early to say its back. Pipeline . 28 billion deal like the one we were just discussing with the two principals behind i want and it certainly gets peoples attention. No doubt. All cash. By the way, i still dont those explanations from gary steele as why he sold were not sufficient in my mind. Not sufficient . No. Were they to you . I thought that he would have if he had stayed there another six months or year, i think the stock would be higher. I understand that you think your business is going to be enhanced by cisco, but again, when it comes to shareholders, youre selling at 157. Thats it. Its over and done with. Maybe you should be a buyer of cisco, because its a cash deal. Why not buy cisco . It should have a higher multiple. Its much more software. I would have liked to hear a little bit more in terms of what it was that he saw in the future they felt like, okay, im willing to take a 30 premium. By the way, you go back two years, the stock price was higher. Yeah, but you also had this disarray because doug merritt left. He just left. It was like they photoshopped him out of the picture. Adobe. Hows that doing . Well find out maybe in a year who got the better deal. But i do like cisco on this. My travel trust sold it incorrectly. I did not think it could continue to go up, because i didnt count on cisco having such a blowout quarter. It was a fabulous quarter. Ciscos doing quite well, and i think thats a terrific opportunity to buy it, despite that david said head and shoulders pattern and he stayed away from those. You know i have. Look at that. Yeah. By the way, you can go back. Remember when cisco was one of the at the turn of the last century when it was at 400. Half a trillion dollars for a brief period, the largest market cap company. There was ge and cisco. Yep. And exxonmobil. When did the other cisco pass this . Jim, you briefly mentioned fedex. They crushed by about 20 . They raised the low end of the guide. You mentioned the split between fedex and u. P. S. Year to date, jim. By the way, fedex is going to put in some yeartodate highs here, i think fedex didnt fedex got 400,000 parcels in the u. P. S. Deal. And i can tell you that the what they got was sticky. They went for longterm contracts. Raj, i cant say enough about him. He got contracts from yellow freight, only about 5,000 a day. But you can have express revenues down 9 , and yet you still had operating income up. That was thought to be impossible. The planes are updated. Theyre getting rid of the md remember the 11s that you were worried about that were burning fuel. I was . Remind me of things that i dont even recall myself. Youre like my backup memory. I am. Youre dram, but im western digital. I have a hard drive. Right. Now, one of the things that i think is amazing, carl, is that this company, in the old days, i happen to think that fred smith gave raj a great hint but hes going for one fedex. In the old days, when you had the conference call, there was freight, which was different from ground, and different express, and its going to be one fedex. They are saving 1. 8 billion. The costs continue to come out. This is remarkable. Hes doing a fantastic job. I got to tell you, hes got a tough opponent here. The most profitable quarter ever for ground. I mean, they should be losing a lot of money yeah. So, anyway, pretty good. Last week was the anniversary of him telling you we were going into worldwide recession. Hes sticking with that, but i will tell you if this is what they do in a worldwide recession, who knows what they can perform if things get better . This is the same thing. Gary steeles been talking about macro headwinds, chuck, macro headwinds, fedex, macro headwinds, so people at home must think, what is jay powell thinking . Jay powell is thinking about the 6 annies macaroni and cheese. Hes got a sense of the common person touch. Guys, i want to hit a few things that we havent got to yet. All the many of the content producer stocks are up. Weve got a lot of news this morning. Disneys up, fox is up, paramount, warner bros. Discovery, netflix all up, perhaps on my reporting from last night and this morning that, you know, the end to the Writers Strike may be near. Well see. 9 00 a. M. Today pacific time is when they meet facetoface again. My understanding is based on conversations with people close to the negotiations, there were very few remaining points. That certainly seemed to be the hope. However, if, in fact, that should change, and the writers show up with more asks than had been anticipated by the producers, then you might have a different outcome. There was a good amount of optimism about the possibility they could finalize a deal today, and you can see whats happening there. Separately, we got Rupert Murdoch stepping down as chairman of fox and news corp. , and then weve also got this other story that we havent gotten to, but its a company that i follow somewhat closely. Tko. It was only a week ago that i sat down with the duo who run that company, remember, it includes wwe and ufc. Theres a new deal involves our Parent Company as well. They are moving smackdown where the rights expire on fox to nbc universal, to peacock, to usa, to all of the various ways that we have to distribute it. Also, theyll be producing four primetime specials a year that will air on nbc. So, smackdown, im told its for similar rates, about a billion and a half, but the market doesnt like this deal at all. You can see. I want to understand a bit more behind that. Youve got raw, which my understanding is may be paired with ufc in some fashion for a new tv rights opportunity, but jim, looking at the reaction in the marketplace to this new deal, and again, im told a billion and a half, but i want to make sure i understand Everything Else behind it, they dont seem to like it. Fox had the rights. Apparently didnt potentially compete for smackdown. Coming again back to usa, and thats i think its going to be a fiveyear deal. Well, thats rather remarkable. Again, theyre my agents, so im reluctant to opine on it. Carl, its a nofly zone opining. No, no, no. Im the only one who can opine, the only one whos allowed to interview ari as well. What a terrific time to talk about the 20year. Im going to well, im going to opine a bit, but i want to do some more reporting and understand why investors would decide to take the stock down as much as 13 at one point based on the information weve got at this point. A press release is out. Theres some reporting on it. They do not have the economic terms in here. Again, im hearing a billion and a half. And that the pricing went up, but we shall see. In the meantime how about that Rupert Murdoch . Im kidding. Oh, i see. Segue there. You want to talk about tesla instead . Its down 2. 3 . The atlantic story . Which story is that . Never mind. Check it out. The u. S. Attorney in the Southern District coming after him for his glass house. Dont throw stones there. Hes everywhere. The neural link is very interesting, because if you put a chip in your head and theres often an antenna coming out of your head, you have a 5 chance of death, but you have to typically sign statements saying that you were willing to kill yourself and thats why youre able to get it. You have an antenna coming out of your head . Right here. Meanwhile, if you are fully paralyzed and can suddenly no, no, its fantastic. Im just saying that the people who want this, you have to understand, theres nothing for them, so its great hope. Yet another muskrelated company, obviously, after tesla and spacex. But not unimportant what theyre trying to accomplish there. You know, its hard to find anything thats up today. What do you mean . I told you everything thats up. Disney, comcast. Managed care is up, and crowdstrike is up. Fedex is up. Okay. So bristolmyers is up we didnt mention darden. Comps up five. Olive garden up six. They are seeing, jim, seeing it much easier to hire labor than they have in the last few years. Im surprised the stock is down, 3. 5 yield, i like the numbers but there are always people who hate everything. Can i just say, having been part of the, when i was in college, when the war was raging between our nation and the great nation of vietnam, it is incredible to see that star behind me and that we are allies and president obamas been there, and i just want to point it out. Having just read the battle for the imperial still and understanding what nixon did and what kissinger did, and its behind me, and i just i think you have to point it out. Thats just not a usual flag to see, and our countries reconciled, its really extraordinary. Its extraordinary. They do love americans. I did some work there a couple years ago, supply chain. You spent some time there. They love america. I cant believe look, anything can happenif our countries love each other. Just pointing that out. I dont know. I mean, you hey, smackdown. How about smackdown . Love jon cena. Hes brilliant. I think hes a brilliant actor. My wife things hes a brilliant actor. Hes great. Is he in the morning show yet . You im surprised there are no football references. Oh, now you got to remind him . By the way, this thing, the 14 pro, antique. Youre going to see me 15 pro, partner. You got a star cameraoming o your head. Look at that. Its like a crown, a golden crown. Stay right there. King cramer. Ho chi minh city. My draft number is 364. What can i say . You can always get in on the cnbc investing club with king cramer, just sign up and find out more at cnbc. Com jointheclub. We had our club meeting today at noon. Very nice. Take your star with you wherever you go. Bond report. Some relief in yields, but the twoyear, still 5. 15 . Dollar index above 105. Were not done with data, by the way. Existing homes and lei coming up in about 12 minutes. ella fashion moves fast. Setting trends is our business. We need to scale with customer demand. In real time. jen so we partner with verizon to take our operations to the next level. marquis with a custom private 5g network. ella with verizon business, we get more control of production, efficiencies, and greater agility. marquis so our customers get what they want, when they want it. jen its not just a network. Its enterprise intelligence. vo learn more. Its your vision, its your verizon. The one thing we can never get more of is time. Or. Can we . This is watsonx orchestrate ai designed to multiply productivity by automating tasks. When you watsonx your business, you can build Digital Skills to help Human Resources spend less time generating offer letters, writing job reqs, and managing schedules. And spend more time on humans. Lets create more time for your business. With watsonx orchestrate. Ibm. Lets create. Its polite to thank someone when they do something nice for you, isnt it . Well, how about when they do something brave for you . Lets show veterans our gratitude. Ask your local Veterans Affairs office how you can help. The more you know. Another day of not a lot working including tech names. Look at nasdaq 100 laggards. Broadcom at the top as we talked about that story from the information which jim thinks is maybe not quite right. Well watch that. The dow down 150 and 4362. Stop trading with jim is next. Is it possible . With comcast business. It is. Is it possible to help keep our Online Platform safe from cyberthreats . Absolutely. Can we provide health care virtually anywhere . We can help with that. Is it possible to use predictive monitoring to address operations issues . We can help with that, too. With the advanced connectivity and intelligence of global secure networking from comcast business. Its not just possible. Its happening. when the day that lies ahead of me seems impossible to face a lovely day lovely day lovely day lovely day a bank that knows your business grows your business. Bmo. Its time for jim and stop trading. New ceo over at starbucks continues to the policy of raising the dividend 4 cents. Look, it doesnt sound big. I mean, but i will tell you this, the thing that matters about starbucks its become a hated stock and thats the mistake. Theres a new starbucks every 7. 5 increase in the dividend. New starbucks built every nine hours in china. Thats not slowed down. China does have you buy china. China needs people to hire starbucks does it. Ive not seen anything that shows starbucks nurse china. America did 28 million more. Im looking forward to luxman being the more than just the operator, the face of starbucks. I think hes going to do a good job. Wish him well. I think people should stop give up on starbucks in china. Not worried about the threat not as much as people say. They have so many more starbucks they can put up. Starbucks is like apple. People are still buying apple. The perception the our country, which has become so gloomy about anything, is that starbucks is doing badly in china. I hear you say its a hated stock. Its hated. It is. Oh. Now you have move a little. What is it . There you go. What is that . Anyway, my travel trustest on starbucks. Well be talking about it. There are stocks that have become pariahs that i think shouldnt be because they have some sort of taint that has to do with the communist chinese, lets call it that. I think its probably wrong. Tonight. We have one of the most exciting companies out there. Im pro nuclear. Put my cards on the table ta. Constellation energy, the Cleanest Energy in the country. Joe dominguez will put it in context. People better realize you got to get rid of coal. Eventually natural gag gas, even though cleaner but it has methane. By the way, southerns nuke plant is working. Anyway, constellation is interesting. Cant wait to talk about it. The uk and some of their net zero uturns getting a lot of attention in europe today. How is ford doing with those . Jim. Well see you at 6 00. Mad money, 6 00 p. M. Eastern time. A lot more on Rupert Murdoch stepping down as chair of news corps and fox also pal len tears alex karp on his companys a. I. Push. Hes gotten polite. Hes a Statesman Energy barely hangingn. Ckn mont. O copy that. Make a hard left down the alley. Networks got you covered. [please confirm requesting backup. ] changing route. Go. Roadblock ahead. Back up, back up. Reverse reverse next level moments, were 30 seconds out. Need the next level network. [north corridor, hurry ] coming through or 3, lets go. The network more businesses choose. Transplant received. At t business. Opportunity is using data to create a competitive advantage. Its raising capital to help companies change the world. Opportunity is making the dream of Home Ownership a reality. And driving the world forward to a Greener Energy future. [applause] sometimes the only thing standing between you and opportunity is someone who can make the connection. At ice, we connect people to opportunity. Your record label is taking off. But so is your sound engineer. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire good thursday morning. Welcome to another hour of squawk on the street. Im sara eisen with Carl Quintanilla and david faber live for you as always from post nine of the new york stock exchange. Take a look at stocks, more fed indigestion. The s p down a full percent. The nasdaq down 4 and the dow given up about 200 points. You have every sector right now in the red. Its being led lower by consumer discretionary, materials, real estate and technology. Energy faring the best almost flat on the session. 30 minutes into trading. Big movers were watching. Deal of the day, cisco buying splunk in a deal worth 28 billion. More on what that means for both companies, investors and the rest of Technology Later this hour. Kb home under pressure on the back of its latest results, beating estimates, but the number of homes delivered and average selling price fell in the quarter. Fedex rallying after costcutting measures helped offset, quote, ongoing demand weakness. More on that story in a moment as well. Lets get back to Rick Santelli on a busy morning for data. Hey, rick. Absolutely, carl. Leading Economic Indicators for the month of august down 0. 4 . That is the 17th consecutive negative month over month change in a row. Last month was revised from minus 0. 4 to minus 0. 3. Why is that note worthy . Thats the highest or smallest negative number since this was positive in march of last year. Were expecting august existing home sales and everybody waiting with bated breath to see if its under 4 Million Units which it has not been the ten years. How does it look, diana olick . Existing home sales in august fell 0. 7 from a seasonally adjusted annualized rate of 0. 04 Million Units. Thats a miss. The street was looking for a slight gain. Sales down 15. 3 . This read is based on closings so contracts likely signed in june and july when the 30year fix in the high 6 range and moved to and stayed there. Inventory isnt getting better. 1. 1 Million Units for sale in august, down 0. 9 . Down over 14 year over year. Inventory at a 3. 3 month supply. 6 is considered balanced between buyer and seller. Tight supply turned prices higher. Median price of a home in august, 407,000. The realtors say supply needs to double to moderate these price gains and sales continue to be weakest on the lower end where theres no supply and sales down across all price points, nearly flat in the Million Dollar plus range and in that range they were higher in both the south and midwest. I would just note that the 10year yield on a tear today and thats what Mortgage Rates follow. Yep. Sales follow that. Thank you. Diana olick. Another important data point that i wanted to mention today because its thursday and because it was kind of a wow number, even though we have been getting used to the strong numbers, jobless claims, another dip in the number of americans filing for jobless claims down to 201,000 for last week. Its a low number. In fact, the lowest since back in january and maybe theres some noise in there around labor day, sure, but continuing claims also backing up the trend. Thats a proxy for the number of people that are basically staying and receiving unemployment benefits. Another decline in the lowest level since the start of the year. So if the trading today and feeling today was all about absorbing the powell message of higher for longer, which i think he leaned a little hawkish yesterday, more than expected, and certainly got that backed up by the forecast from the other fed members, this is not the number the markets or fed want to see. Its great we have fewer layoffs and americans filing for unemployment claims but it also makes the question about sticky inflation persistent. Theyve shown that theyre willing to do more about it. Here was a money sound bite i thought from powell yesterday that just summed up the entire press conference. Listen to what he said. Were prepared to raise rates further if appropriate and hold policy at a restrictive level until were confident inflation is moving down. Its not necessarily new. Weve heard the message from him before but he hammered it pretty well and as a result he got what he wanted which is the tighter financial conditions. Yields are up, dollar stronger and stocks are lower. Im thinking about lags. Thats all i think about is lags. Youre not wrong to be thinking about lags. The problem is nobody knows how long the lags last and how severely they are felt. The market continues to believe they will be because were talking about cuts next year. Not as many and later. Thats the other headline. We have a dot chart, plot chart, the dot plot chart, augs always funny look like video games but heres whats shows. 2023, theres the rate. And basically what you need to know is that most of the members of the fed, all their forecasts of where they think rates are going, they can raise rates again this year november and december. Theres 24 and what that shows is that theyre lowering rates a little bit but not as much as they had back in june, in other words they expect rates to stay higher for longer and they dont expect to be cutting much next year. Theres a disconnect of where the market thinks theres going to be a cut next year and the base line rate lower than where the fed is and that adjustment starting to happen and the market will catch up with the fed. The truth is the dots are stupid because they dont know whats going to be happening this Time Next Year and needing to cut because they think unemployment will barely right and gdp going to fall. If you think about the soft landing whats the argument for cutting. We have england. Both hiked. The uk that was a close call 5 to 4 vote. They thought we should be raising rates and they still have a strong inflation problem and worse than ours. They took comfort in the weaker than expected Inflation Numbers and want to see lags and see that policy is starting to work in terms of lowering inflation and weakening the economy. They dont want to do too much damage, Central Banks now are in lets try to do no harm lets wait but ready to stand guard because we dont want the market to think were not vigilant on the inflation story. Showed the chart yesterday in terms of how much the cost of everything has gone up in terms of paying for credit. Paying for credit. Fiveyear personal loan is 20 . Credit card loans 20 . Mortgage rates starting to see the impact on housing oo, borrog now is expensive and will have an impact on the economy. The bigger question why hasnt it had an impact so far on the economy and a lot of stimulus out there and a lot of pent up demand and a lot of covid quirks and nobody knows if thats going to end next year. Yeah. A lot of cash. Lot of cash. Adam parker with us at President Biden to talk about this and a lot more. I was listening to you. The dots are stupid and the lags. Hard to know what data point will matter when, right. If you listen to santoli, theres 17 data points and the stock market is ripped for the last 12 months. I dont know if we need to use that data point as predicative. The dots we knew there were too many cuts in the price the last 6 to 9 months. Has he said anything dovish ever this cycle. You dont know when people will react. I did meetings in the midwest and new york the last two days and the number one question i get is about the same market breadth question. What do i do with the big seven. How do i sort of triangulate around my exposure to google, apple, microsoft, et cetera and whats the case for maybe a broadening out. Some m a is a good sign. That usually means theres some activity in value. I think the case comes down to margins expanding for more companies and i dont think thats likely. The big seven do well relatively. I dont think were going to get the rally that everyone is calling for. Buy small caps because they look cheap. You need to believe the estimates are more achievable and expand more. Look at what the big seven are reporting. I dont think theyre reporting disappointing numbers. When i look across, maybe microsoft will take longer to get their stuff working, maybe google probably has stuff that could be better than people think. Nvidia bet against their numbers net. You look across the big ones and dont want to say theyre worse than everyone pems the case for broadening is labor costs come down a lot. I dont think labor looks like its weak. Materials are up in the bottom. Theyve come down but theyre up. I dont know if that headwind to tailwind is going to be that awesome for those companies. I think, you know, my observation will be breadth is not that likely. The second thing from the recent meetings, i dont know one person who is like i looked at equities versus bonds at the beginning of the year and decided equity is garbage, i was over weight u. S. Equities and owned a ton of nvidia. I think the point is people are going to chase. Most peoples numbers are not where they should be when you type in the s p or the cues and flows coming in rally year end. Like last year where the first or second day of the year it reverses and people figure out what worked this year that they sell. Thats where it feels to me from, you know, the 1012, meetings in the last couple days. Is the earnings season going to be encouraging . Look at consensus, doesnt sound that great. You know, two or three conferences on industrials and health care and data out of those and talk to people and read what companies say. We do it all systemically. I think generally mixed to slightly positive is the news. I didnt see any maybe eaton saying the backlog plateaued. A couple data points where things slowing. I think you have to be worried about Companies Like that that have high inventory. Across the economic sensitive, i think we always get torn is the s p 500 is not the economy. The s p 500 is a list of Awesome Companies that are like the best of the economy, right. You arent necessarily going to have earnings collapse. Thats where we all get torn with. So sure, were going to, you know, react once in a while when hawkish. I think this is part of that goldilocks of transitioning to lower growth and i dont think the fed is going to, you know, ruin any of the no, no. Ill take the other side which is that even if the fed is done raising rates, which its not clear it is, so the expectation is they dont cut early next year, theres still a lot of tightening going on. Thats significantly higher rates, still qt happening. I mean all of that should hurt financial conditions and as far as the earnings outlook, raises the interest expenses for companies. Sure. Everienutional investor for months is trying to figure out who has debt due any time soon. Very few stocks people are like i didnt know they had a i mean its more about whats in the place now. I hear you, i think in years three through ten you dont want to say i paid 20 times forward for equities when bonds are high. In the next six to nine months its hard to make that call. We could have made the argument january 1st, earnings are 2023 earnings expectations are higher now than in mid february and thats unusual. Typically analysts are too optimistic and things are rolled. I think the debate comes down to what do we think happens to earnings next year. If up versus this year maybe the stock market can do okay. If people think theyre flat or down we have a problem. I might my bias 7030 fwlish terms of thinking about it because i dont think many people are like pro participating and psyched about their alpha and had the correct allocation and i dont think earnings season is going to be bad. I think its going to be okay. Remember we have like the highest nominal gdp in our lifetime and its eroding from that level. Its not, you know, so i think its slightly better than people think. The only thing i worry about people think were going to end the year higher. You get nervous when singing the consensus tune. Next time well talk about whether or not strikes or shut downs can interrupt a chase going into year end. Im going to make a mental note to not come downtown during u. N. Ever again. Oh, boy. I did i did the subway, of course, but walk in meetings midtown reminded me i have to be on the road during the two weeks. Good to see you guys. Thanks. The drotsz stupid. That is what it says . Do you not agree. Its a crowded call. I have never been a fan of the dots. They use them to send a signal. But they dont know whats going to happen and they change. Tmi. Its tmi. I think the point. You know, you go to try variants website, type in powell, zero search results. Why would anyone add value interpreting whats going on when they dont know whats going on. We do work in the price because thats where we can add value. Why listen to me or anyone. Thank you. My website i like, like put names on the dots too. Like thats part of the fun. When in school who made the team and who didnt. Lets get greenspan would hate the dots. Anyway, thank you. Good to see you guys. As we head to break our road map for the rest of the hour. Huge deal in tech today. Cisco buying splunk. What it means for shareholders. More rate hikes and higher for longer. What the fed hawkish stand means. And palantirs alex karp joins us, his First Television interview since the a. I. Summit last week in washington. A lot more sksquawk on the street continues in a moment. Rude. Who are you . Im an investor in a fund that helps advance innovative sports tech like this Smart Fitness mirror. Im also mr. Leg day. 1989 anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq100 innovations. I go through a lot of pants. Before investing carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com. Were not writers, but we help you shape your financial story. Were not an airline, but our Network Connects global businesses across nearly 160 markets. Were not a startup, but our Innovation Labs use new technologies to help keep your information secure. Were not architects, but we help build stronger communities. Were not just any bank. We are citi. 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. When we close it it will add roughly 4 billion of arr to our existing run rate of arr and put us close to 30 billion if not over by the time we close it, and it will put us over 20 billion in software on an annual basis. Look at it today the premium that were delivering for our shareholders and if you look at our historical stock price this represents a great outcome for our shareholders. Ciscos Chuck Robbins and splunks gary steele speaking about their deal and why it makes sense for investors. Weve talked about how we tried to get answers from them on how the deal fits into the Business Cycle, the macro and splunks motives for getting out at this level in cash. Cisco, listen, he explained to a certain extent the business rationale behind it in terms of what theyre going to be able to do in securing so much of the work flow data and so much for their customers. I think there are shareholders who may be questioning why now when gary was talking about the great prospects for the company that he believes they had. If you believe there was great prospects why did you sell . That said they did so at, what are the numbers now, their advisories tell me 38 to the 30day and 68 to the last 12 months, volume weighted average closing prices and multiple was seven times the next 12 months. Seven times revenue, about 29 times free cash flow. Those are not bad multiples, but they didnt get their alltime high, thats for sure. Even going back to a couple years on splunk. Well see about execution, integration. Hes staying with the company. Or i should say gary is staying with the company and they see it close in the next 9 to 12 months. Dan i hves ives says its a across the board and well see more m a in software and strategic. We are i think m a is coming. This was i had no idea that this one was out there. It has been a perennial takeover candidate has been splunk, and there were talks prior actually to the current ceo taking the reigns, but with with cisco, but generally speaking i am starting to think were coming off a low base but things are going to potentially heat up. This is an important deal, and one of the largest of the year. Yeah. Cisco is the worst performing dow name below the 50 day since may. Splunk not the only name on the move today. To dominic chu with a breakdown of more. So to the point of that discussion other bigger Cyber Security stocks like crowdstrike, palo alto are mixed in early trading on the heels of that deal. Splunk driving the upside for crowdstrike, not as much for the bigger names, the hybrid side of things like pal la al to and fort net down. The Technology Side of things the computer chip stocks broadcom down on information that alphabet and google trying to ditch broadcom as an Artificial Intelligence chip supplier to move that effort in house. Looking to replace broadcom with Marvel Technology for the networking interface chips that it uses in data centers. Now broadcom is in the s p 500 tech sector and down 3. 5 . Of course alphabet is a mega cap s p 500 services stock. Marvel up 0. 3 . In the in the s p 500. Keep an eye on those names. Back downtown to you at the stock exchange. All right. Dom, thank you. I thought of another synergy between ciscop and sflooung tell me. They are both sponsors of the mcclaren f1 team together. Teammates. Really . As is cnbc. Anyway, im sure you asked him about that. That was our first question. Yeah. Fed Holding Rates Steady but pencilling in another hike before year end and higher for longer. What that means for the Housing Market that is showing cracks. Data to chew on. Were back in two minutes. Good night hey corporate types. Would you stop calling each other rock stars . Youre a rock star. You are a rock star. Rock stars. Please do you know what it takes to be a rock star . Ive trashed hotel rooms in 43 countries. I was on the road since i was 16. Ive done my share of bad things. Also your share of bad things. We know that using workday for finance and hr makes you great at your job. But that dont make you a rock star. Ted ted ted oh ted in finance. Youre a rock star hey liz in hr . Can you do this . Unless you work with an actual rock star. You are a rock star thank you whos the new guy . Hi, im ozwald. Hello ozwald. Give it up for pam. Pam, you are a rock [silence] i wasnt going to say it. Fed schar jay powell indicating more rate hikes potentially ahead but a higher rates for longer stance. Here to break down what that means for Mortgage Rates and the overall effect, Robert Refkin ceo joins us now. Feels like housing is taking a turn for the worst here with Mortgage Rates making new highs. Are you seeing that . We still have more buyers than sellers. You can see that from multiple offers. Looks like inventory levels have hit their low. We saw last week the largest increase in the inventory of the year and that has been the constraints. What does that reflect, the fact that inventory has bottomed . What it reflects is you cant stop the five, diapers, diplomas, diamonds, divorce, and death. These life events create movement. This past sunday i was at an open house 47 mercer, prime soho, multimilliondollar renovation, but this family would have never sold but got married and had a baby. The train moves on. The train moves on. Theres been redfin data that suggests one out of ten sellers is selling because they have been called back to the office. Return to office has been a catalyst for us. We see it across the country. We talked about San Francisco as being a buying opportunity because because had moved back to the office. We saw after 12 months of year over year declines in prices, last month the first increase. Is that a moment . Is that worth highlighting or just sort of a blip and, you know, we go back to normal . I was just in San Francisco in the bay area on monday and tuesday, and speaking with the agents theyre seeing either neutral to positive. Were a not seeing things get worse. Are people just dealing with the higher msortgage rates or putting more cash. Unless Mortgage Rates go to 8 well see buyers accept these rates. More all cash offers. In new york city 60 of purchases were all cash. In the country has been around 24, 25 . Now its in the 30s. 8 you think is a breaking point. Not 7. That would suggest the fed has more work to do. He doesnt want to say that. Dont want to say that. I think 8 will be a shock to people. However, this rate 7. 5 , i dont think were going to see any big change in demand at. 5, 7. 75. Prices . Not coming down . Although we saw exist home sales down year over year about 14 this past month, prices were up 4 . Higher for longer cant be good for your business. Higher for longer isnt good for the real estate market. It looks at 4 million seasonally adjusted of annual homes sales, you see that is the bottom given that people have to move. Wow. Robert, thank you for joining us. Appreciate it. Thank you. Reality check on housing from compass. Still to come here, well have an interview with palantirs ceo alex karp, talk about the future of a. I. And why pausing that technology is a bad strategy. First a quick programming note. A week away from cnbcs delivering alpha investor summit. Scan the qr code, visit cnbcevents. Com delivering alpha for more. Were back after this. Is it possible . With comcast business. It is. Is it possible to help keep our Online Platform safe from cyberthreats . Absolutely. Can we provide health care virtually anywhere . We can help with that. Is it possible to use predictive monitoring to address operations issues . We can help with that, too. With the advanced connectivity and intelligence of global secure networking from comcast business. Its not just possible. Its happening. Welcome back. Im Kristina Partsinevelos with your cnbc news update. Ukrainian president Volodymyr Zelenskyy arrived in washington this morning to meet with members of congress. He is set to sit down with President Biden later today as the president tries to get congressional approval for 24 billion in aid to ukraine. India suspended visa applications by canadian nationals as the diplomatic crisis between the two escalates further. This week canada claimed india was behind the assassination of a sikh separatist leader on canadian soil. India made the visa announcement hours after canadas High Commission said it would adjust staff presence in the country because of social media threats. Boston college issuspended men and women swimming and Diving Program for hazing. Just weeks before their season was supposed to begin. The university didnt release any details about what sparked the suspension but said it does not tolerate hazing in any form. Thanks. Kristina partsinevelos. Lets get to steve covac with a news alert on microsoft putting a date on the rollout of copilot. Hey, steve. Carl. Satya nadella was just inside here and announced that copilot, the a. I. Assistant that is coming across a bunch of products and services from microsoft, thats coming out for windows 11 that means anyone with windows 11 machine can use copilot next week. September 26th. A date that will be included in a free update to windows for the current users. If you dont have windows 11 you will not be able to use it but update it. Theyre going over the features and incorporated in everything from your outlook email to paint and to your cell phone. It can take in Text Messages from your cell phone and interpret those and plan your day, and it things like that. Theyre going over a ton of features that copilot will be able to do. Theres more to come. Were expecting new hardware, carl, this is their surface event so laptops and tablets on the way too. Back over to you. Steve, i dont want to stop you from getting back in and hearing about the features but put it in perspective. This is a moment in terms for generative a. I. , 30 a month i think is that the price point thats been discussed for copilot . I am curious how its going to help you in your daily life . That is interesting. That is for they havent announced for the enterprise version, the version for microsoft 365, 30 per user per month. I havent heard them announce the availability for that yet. This is for windows 11, david, so when you fire up your windows machine you will be able to use the features. As far as that enterprise version were still waiting to figure out when other companies can go in and buy that. They havent announced that yet. All right. Well let you get back in there. More to come there. Important moment for microsoft and copilot. Quick update from me involving the Writers Strike. Facetoface meetings yesterday and you can see the stocks are reacting to our reports that theyre close. 9 00 a. M. Pacific time when they get back together to try to what i have been told by a number of people familiar with and close to the negotiations hammer out a final agreement between the producers and the writers that would end the wga strike. Again, always unclear until youre there, but the hopes were and the optimism seemed significant yesterday on both sides they were down to a few enough issues that they might be able to conclude yesterday, although again that remains unclear and the hope is they can come in today and hammer those out. Well keep you apprised if there are developments. They dont start until 12 00 p. M. Eastern, 9 00 a. M. Pacific. Rupert murdoch stepping down. Well bring in julia boorstin. Hard to argue he is not the most significant man of media over the last lets call it 40 years i think in terms of the influence that hes had. Yeah. Certainly had a massive impact on the media landscape. If you look at the way he built ap empire and split up the empire news corp from fox and selling off the entertainment assets to disney for 71 billion, really shaping the landscape that were in today focus in on live news, many sort of questioned that wondering how much potential there was there. In light of cord cutting that is seen as valuable and i just have to say, david, we should not be surprised hes stepping to this emeritus role. He is 92. It does mark the end of an official era at news corp and fox. Stepping up of i mean lack ylan is running fox, but hes chairman or cochairman. Does it mean anything in terms of lacklands overall responsibility. Hes not overseeing news corp but that is a murdoch controlled company as well. Yeah. I think that these this change in title for Rupert Murdoch may not change inch terms of the day to day but look at the future of the two companies you have to see news corp which was a Newspaper Company increasingly becoming a data company. Becoming a company thats focused on sort of Digital Content and whether its for real estate information or sort of the digitalization of the subscription business of the wall street journal a shift there. When it comes to the fox business which lackland murdoch is running, the question of how theres going to survive in the new streaming landscape they own an adsupported streaming service. I suspect Rupert Murdoch will be involved. He has the emeritus title. The facts that lackland murdoch has been running fox so long now i dont think theres going to be that much of a change in terms of the day to day. This is one that transforms media and wall street because murdochs impact has been felt across the Political Landscape in the u. S. , in the uk, and australia. Yeah. Theres no single figure you could argue has had more of an impact in terms of the way news is distributed and the original certain i know its funny i did have an opportunity to ask him, is succession based on you, he said nah. Totally. Rupert said that. Rupert said its not. Really . Do you watch it . He said no. My daughter does. Julia, thanks. Palantir kicking off a summit in d. C. Stock on a tear this year and alex karp will join us after a short break. Welcome back. Palantir kicking off its inaugural software for government in washington, d. C. Today focused primarily on a. I. And emerging technologies. Frank holland is down in d. C. And joins us with a special guest. Good morning, frank. Good morning, carl. Thats absolutely right. Im here with the cofounder alex karp. Thank you for being here with us. Im delighted to be here. Youre kicking off this inaugural summit today. A lot of u. S. Leaders here in government and the defense and other areas of the government. Right now today so much focus on a. I. And the potential of a. I. , what is palantirs focus when it comes to its work with the u. S. Government . There are two things. One is palantir related but more importantly, the u. S. Has every major provider of a. I. , which in every other Industrial Revolution youve had diversity of countries that had the talent and the products. This evolution theyre in america. How do we get the u. S. Government to use innovation from providers, very few of these providers work with the u. S. Government. In part because many providers have had a somewhat timid view of helping the u. S. Governments the Silicon Valley motto, i get rich, you get nothing and, obviously, they extended that to the u. S. Government. So my focus and our focus in d. C. Is one to basically embarrass other people in a. I. To work with the u. S. Government. Its like were doing well here, you should also get involved. To talk to legislators, to explain to them that way too few of our dollars are spent on a. I. Palantir is one of the companies that has produced high demand, so how do we get more commercially proven products into the u. S. Government . How do we share knowledge . Thats the part were doing here. We have a lot of clients, many of which are sensitive and they talk to each other about what theyre doing and whats worked. I do want to ask you a few days ago you were in Senate Majority leader Chuck Schumers a. I. Meeting, the press and public not allowed in the room. A lot of big name tech leaders there, bill gates, sundar pichai, mark zuckerberg. What was said there . The headlines it was about regulating a. I. And government regulation and i want to ask you, do you think the public should have been allowed in the room . Well, so the over arching discussion was how do you advance Artificial Intelligence, meaning how do we allow commercial enterprise in america to adopt a. I. , develop a. I. , and provide it to the u. S. Government and enterprise, while simultaneously mitigating some of the obvious risks of a. I. , namely, one we dont know where the road is going and what happens if generative a. I. Becomes so powerful its a risk to human kind . So that is a real issue and theres a lot of consensus that we have to have some way of mitigating the risk. There are other discussions of on the way there, how do you have Artificial Intelligence that has governance, guardrails, can prove its not discriminatory, and then theres the issue i am passionate about, given the risks we also have to model as one of the greatest risks our adver tarries, russia or china, develop tools superior to ours and change the world order. I thought it was a productive discussion. I guess its an unpopular view occasionally you have to begin discussions in private but it is my view, and im sure at some point these discussions will be open and no ledgislation. In the end they have to say this is what i really believe its hard to get people to show up and kind of go naked. But theyre not going to go naked in public with public scrutiny. Theres super hetero genius group of people there from union to tech leaders among tech leaders you have more corporate people then you have the freak show referring to yourself. Some understood. We showed video of you next to elon musk and you said how do you get to use a. I. In a way that doesnt hurt humanity. Thats a question hes been wrestling with and talking about the dangers of a. I. Were there in depth discussions about how to use a. I. Responsibly as you mentioned so its not discriminatory so it doesnt actually hurt humanity . Thats what we discussed. Do you have details you can share . I can tell you what i said which is i said look, there are two camps, theres those that think a. I. Is safe and dangerous, and im in the third camp which it is dangerous and if we dont work on it, our adversaries will and we will lose our human rights. That was my position. And, so i think that is the it is what am i doing in d. C. , what am i doing every day both as an individual and as the cofounder and leader of palantir is, pushing america to adopt an a. I. With governance in the commercial context. What does governance means . It means you can look at the out product, output of a large language model or inputs into algorithms and say is this something that protects our data, our health records, makes sure theyre not used in a discriminatory way. On the battlefield is there human supervision in the chain where we make lethal decisions and where does the data come from, who controls it and can ratchet this back and ratchet it up and do we have superiority that is so great that our adversaries are afraid to attack us. The standard for the u. S. Cant be parody. Were benevolent actors in the world despite discrimination from the comparative perspective, and the best way to make sure that we have a safe world is to make sure that our adversaries know our weapons are far superior to theirs. Thats what im interested in. Did you have a chance to speak with Senate Majority leader schumer and do we need a czar, department of a. I. Regulation or Something Like that . We are going to have regulation and theres and some forms of regulation i support like what the regulation i support is we must the u. S. As leaders control the risk to our civilization of out of control rogue a. I. We need its both a combination of regulation and people who can implement that are technically and philosophically proficient. Its a rare class of person because you need to be able to in an unbiased way look at what someone is doing and report if theres a risk to our civilization. I want to ask you, you dont think the public should be at the early stages with this much magnitude . My job is to produce technology that transforms and puts American Allies in a superior position and to advocate for government structures. I am doing this in public and in private. What i can tell you is im telling you exactly what i tell people in private, whether its senator schumer or leaders of the world on my employees or people abroad, whoever im meeting, i am telling you the same thing. You can be rest assured youre hearing in public what i said in private and what i say in public and private is, theres a real risk here, but the upside is that america will outperform all other western country because we produce the technology, legal structures that allow us to implement it and the best talent and most innovative. On the military context were poised to win. We have to win when poised to a. Its great to hear this color and the philosophy behind how we think about a. I. And regulation. Im curious whattist going to mean for your business because there has been a lot of enthusiasm and excitement in the market around palantir as an a. I. Play. What does growth look like from government, from commercial, from international as we adopt generative a. I. . I think for us and for everyone, what youre going to see is radical growth in the u. S. , Slower Growth in europe. Growth in the u. S. Because people are going to adopt the best, most robust, most useful technologies, and very quickly. What youre going to see in the market, and then ill get to us, is youre going to see in the market youve had a massive interest in a. I. Many of these products deliver poetry and will make allow me to do write an essay maybe i know nothing about. The products are going to do well in the sense that people that are going to pay for them will have output differentials. Youll change the margins of a business, rebuild the supply chain, move a company from individual pointsbased company to a portfolio may of managing it. Those companies are going to succeed in the u. S. Market. How are we doing . Its very early days. You know, you dont want to be out there being too optimistic. Were being very careful to move slower than we could. We de facto cannot keep up with demand for our a. I. Products. We built precursors but not yet understood. The customers understand them because they want to make them more precise and change the underlying of my business within days. And what weve seen is, in the last month, a 50 , 50 increase in people using our aip product in a month. So, you know, the other thing about can i interrupt you for one second . We have another question for you from the new york stock exchange. I want to get some anchor questions in as well. Alex, its david faber. I just want to follow up on that. In terms of productivity and whats available to the enterprise as far as the adoption youre talking about, one step down from threat to humanity but threat to workers, where are you as far as jobs will be replaced versus simply aided to go work on higher end things . This is a super important question. You know, typically technology is misaligned with the worker. So, theres obviously a lot of concern among working men and women that radical increase in Technological Development will decrease both lead to a decrease in jobs and put pressure on their salaries. I think a. I. Incorrectly implemented. Not long ago we had 1 of the u. S. Hospital care market. Now we have 16 . What is going on with this radical increase . Were making doctors and nurses more effective. Were making factory workers more effective. By the way, one of the most attributes of a. I. Thats not been discovered yet and will be discovered is you can take manufacturing thats maybe been cultural specific to japan or korea, we have one company thats a Japanese Company producing a highly technical product in america just like they produce in japan with american workers. And why can they do that . Because through enhanced software, ale gorithms and a. I. E can control the manufacturing environment for americans as if it was japan. That means America Works you get the agility, creativity, ingenuity of america with methodologies we have not been able to produce here in the largest and most important market in the world. So, i think this is a message thats going to take we actually have to show rather than tell because workers are going to be skeptical. But its actually true. We can keep this conversation going on all day. Also announcing two new commercial customers in the private equity space. I know you said theres more demand for your products in the financial space as well. Thank you. Hopefully youll come back. Back over to you guys. Thank you. Frank, thanks. Well be right back. when the day that lies ahead of me seems impossible to face a lovely day lovely day lovely day lovely day a bank that knows your business grows your business. Bmo. ella fashion moves fast. Setting trends is our business. Business grows your business. We need to scale with customer demand. In real time. jen so we partner with verizon to take our operations to the next level. marquis with a custom private 5g network. ella with verizon business, we get more control of production, efficiencies, and greater agility. marquis so our customers get what they want, when they want it. jen its not just a network. Its enterprise intelligence. vo learn more. Its your vision, its your verizon. New projects means new project managers. You need to hire. I need indeed. Indeed you do. When you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. Visit indeed. Com hire and get started today. Taking a look at shares tko. Wwc gets together and starts trading. The renewell of the smackdown goes to nbc from fox but the market clearly not happy with the number. Im hearing 1. 5 billion. Squawk on the street cties teth. Sonnu captivating music the first law of thermodynamics states that energy cannot be created or destroyed. but it can be passed on to the next generation. good thursday morning. Im Carl Quintanilla with sara eisen on the floor of the new york stock exchange. Why m a may be a trend to watch and staples and discretionary. Later, after 14 consecutive Interest Rate hikes from the bank of england, a pause today. Impact on international equities