That comes up against the weak anecdotes we keep hearing about. The beige book did not sound like the robust economy. I dont know what you are hearing from the companies and everything. It is not robust news. The question becomes not so much the strong Third Quarter. The question is in the Fourth Quarter and if the fed wants and needs a slowdown to feel comfortable about inflation. I dont know if we have the problabilities available. The first is the tenyear note which is darn close to 5 . 4. 98 was the top overnight. It is now down a bit. The second is limited or almost no chance. Quickly, ill give you the probability. 5. 7 for november. It jumps up to 39 for december. Then it is 47 for january. If you hear from the companies, mike, i say most of the ceos are concerned about what is coming. Generally, that is true. If you get a slowdown, it doesnt usually happen precipitously. I think the market wants the ability to try to start to focus fully on companies and on exactly how the business is going. You know, steve, we are sitting here and it is 25 basis points in december. Is it january . Is it not . The tenyear yield since august is up a full percentage point. It shows where the focus is. There is a way to tell the story of 5 on the tenyear yield is recession or psychology of the supply. It is a belated acknowledgment of the fed message which is higher for longer. Can the economy handle it . Are investors comfortable with higher valuations for the stocks . Lets look at where things stand for the equities. There are red arrows at the dow and s p. Dow is indicated off 45 points. S p futures down 4. Nasdaq is indicated up 15. We are talking about all three of the major averages facing the worst losses yesterday since october 3rd. The dow down 300 points. S p and nasdaq off more. S p down 1. 3 . The nasdaq off 1. 6 . Higher treasury yields is the catalyst behind the move in equities. The biggest part of the story. The yield in the tenyear yield topping 4. 9 . 4. 96 right now. Twoyear yield is 5. 24 . When the whole thing started, i want to say three months ago, i called a guy who manages billions. He told me 5 was his trigger to come in and buy. Leon cooperman told us last week that he would not buy the tenyear yield at 5 . At some point, mike, i think there is some desire to take duration. A lot of things can be true. Value can be building on the long end of the curve. You are getting higher rates and compensated for the risk. It still could go higher. It has momentum. It can create the doubts as to whether we can withstand it. That is the main thing going on. Can the economy deal with 8 Mortgage Rates . The transports tell you no. With the russell 2000 yesterday. Exactly. Monday, tuesday . Russell 2000 up 3 . You have to figure it out. We have to figure out what kind of decline in yields do you need to make the risk worthy of coming in at 5 . Would you come in at 5 . You could get that in the 2 or the 1 or the 6. You can get that in a money market. You would come into the 5 because you think it is going to 4. 5. You would make it will go 4. 5 to 5. 5. That is the idea. 9 s the stock market closed yesterday as it was september 22nd. I looked at this. The tenyear yield is 4. 5 . It is not an inn trenintricate level. One discussion out there and i credit bob pisani with this idea with Stocks Holding up well with the rise in yields. You think what has happened and the competition from the bond market means stocks could be and should be down a lot more. Theyre not. He credits the earnings with that. Underneath the surface, although there is no big marquee blowout earnings numbers, they have been good enough. People have more cash on hand. Morgan stanley said that is part of the problem. 23 of Assets Management is cash. The part of the problem for Morgan Stanley said it is potentially buying down the road. People are not over their skis at this point. We talked through your read and made it my read, becky. Go ahead. President biden will differ t deliver the Foreign Policy speech addressing the attacks against israel. The president returned home from israel last night. Lets get the latest with Nbcs Jay Gray from tel aviv. Reporter good morning. The response here in tel aviv with the front page of the newspaper here biden dictates rules of the game. They are taking seriously the president s short visit here. Lets talk about what he feels like he accomplished and what we will hear partially this evening. Israel and egypt after the president left and pushed adamantly for this, decided they would allow humanitarian aid into the 2 Million People caught in the middle of the fight in gaza. That will likely begin tomorrow. What is happening along the rafah Border Crossing at egypt is the roadways have been damaged during bombing runs by israeli troops. They are repairing those. They expect the first convoy of 20 trucks with food, water and medicine to move in. The first time in two weeks that they have done that. We dont have any indication of the duration of how long this may last. We know that the u. S. President says will commit 100 million of aid for those in that reegion. There is another issue boiling on the other end of the fight. It is the possibility of expansion of the military action. There is a growing concern about the border with lebanon and what has been and im quoting the idf here. Significant escalations in skirmishes with hezbollah along the border. We know this morning antitank missiles were launched near a kibbutz near a security against and the idf has responded with artillery fire. There have been stepped up troops and equipment moved into that region. The fighting has been growing significantly each and every day. That is something that people are concerned about, especially with the atmosphere on the ground. Theres a lot of frustration over the explosion with the hospital in gaza that killed hundreds. We expect more protests over the weekend. This is a hot box that a lot of people are paying close attention to. Jay, thank you very much. That is Nbcs Jay Gray on the escalating concerns in the middle east. We will make sure we will keep track with him along the way. When we come back, we are awaiting Quarterly Results from at t and blackstone and American Airlines. Next, another vote and no House Speaker. Representative jim jordan losing another round. What are the options for House Republicans . We will discuss that next. Announcer this cnbc program is sponsored by baird. Visit bairddifference. Com. . 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. The first time you connected your godaddy website and your store was also the first time you realized. Well, we can do anything. Cheesecake cookies . The chookie manage all your sales from one place with a partner that always puts you first. we did it start today at godaddy. Com welcome back. Lets get the latest from washington where the house is still without a speaker after representative jim jordan failed to win enough votes for a second time. Joining us with more on the impasse and the possible options for House Republicans is michael even. The cofounder of axios. Mike, i find myself running thin when i figure out what happens next. We saw the vote yesterday. Jordan didnt make up some ground. He lost ground. He lost 22 votes after 20 the first time. Kevin mccarthy said yesterday that we should look to see if there is improvement. He didnt improve. Now what . Becky, it is not just you. People in the capitol dont see the end game. So often in a fight, you think you know where it is going. Were day 16 without a House Speaker. I think that number will go up. There will be another vote probably this afternoon on jim jordan. You are exactly right. Losing votes and our Capitol Hill Team doesnt see a path for the ohioan. Where do we go . There may be a few other turns of the screw where it is most likely to wind up if you are going to vegas, you would look at Patrick Mchenry of north carolina. Currently in the shachair as th speaker pro tem. It is possible they will wind up extending his duties to the end of the year. Another wild card out there . You see some people wondering if there is a way to gets Kevin Mccarthy winds up getting it back. One of those two people think it will fwind up with. Patrick mchenry is chairman of the House Financial Services committee. He came into the house as a bomb throw er or fire brand in the tm dely years. He moved up after learning financial services. When you say one likelihood would be for them to extend Patrick Mchenrys powers to get to the end of the year. Who is they . Is that the republicans . The Biggest Issue is the republicans dont have enough within their caucus for anybody. You are right. This is deciding not to choose and status quo that we had in the sneak peek newsletter. The person who has the most votes for speaker in this round is the House Democratic leader Hakeem Jeffries. It is a vote of the house. They wouldnt need democratic votes. Becky, a lot of republicans are concerned that this increases the chance that democrats will flip and the democrats will get the house in 2024 because republicans are showing and saying we cant lead. We cant govern. Mike, what are we learning from the 22 or 20 voting against jordan about what is and mimati the opposition . What the will it take to bring them on board . Fascinating question. This is a show of weakness for maga. You dont see a show of weakness for trump weighing on the Republican Party. T trump has been quiet on this. He is endorsing jordan. The endorsement by sean hannity back fired jim jordan. Thats one of the factors in the 22 votes. Some of those were people who were lobbied hard and getting the phone calls from people in the maga world. They rejected it. Who is the leader of the Republican Party right now . Is it donald trump . If you look at who has the i would have said Kevin Mccarthy two weeks ago. Right. Yeah. Who has the most juice . Donald trump. You have senator Mitch Mcconnell and Patrick Mchenry. The fact we cannot give an answer shows the partys problem. Your betting line in terms of when you think we will actually see a House Speaker . Is this something that has to happen by the end of the week . It should. At the top of the show, we have been talking about the massive issues facing country. The president s Oval Office Address at 8 00 p. M. He will reveal a new request for aid for israel and ukraine. This is where the noend game happens. I talked to people in the cap the capitol. Jim jordan is not giving up. There may be a few other people. The twist this week is names of members of congress and the people who Cover Congress did not know were there. People we dont know being floated for speaker. This may be going on. Thats why its the most likely end which is deciding not to decide and leaving Patrick Mchenry with the temporary gavel. Michaelchke allen, thank you. Thank you. Coming up, tesla tapping the brake s. Elon musk wants everyone to slow their roll with expect tation wh the cyber truck. Should investors buy the dip . And as we head to break, check out the price of crude. It is hovering in the high 80s. Squawk box is coming right back. 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 upbeat music awww. Awww. Awww. Nope. Constant Contact delivers the Marketing Tools your Small Business needs to keep up, excel, and grow. Constant contact. Helping the small stand tall. Businesses need 5g solutions today. Thats why they choose tmobile for business. Mlb partners with tmobile to not only enhance the fan experience, 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. Tesla shares moving lower after the ev maker missed on revenue and earnings for the First Time Since 2019. The stock took a turn during the Earnings Call. Elon musk said he is moving through the issues with a degree of caution. We have gene with us now to discuss. Gene, the Third Quarter estimate was whittle down to 63. It comes in at 66. Where does that leave us here in terms of the earnings power and how much more they have to deal with over price cuts and margin pressure. How does this feed into the story . Margins are the critical point, mike. They need to improve the margins. Musk was clear. Dont expect margins to move higher in the next year as they ramp vcyber truck. This is the Center Vortex of the tesla story. Margins go up. That means this is a tech company. Margins go down, it is a typical car company. So thats why theres so much weight on that allimportant auto gross margin. Frame in one detail there. It was 16. 3 in the September Quarter and it was 29 a year and a half ago. These margins are approaching traditional automakers. Granted, traditional automakers lose a ton of money with the evs. Mike, what does this mean . It means pay stience is a virtu. Elon musk talked about a challenging period. He used that phrase twice. He did not talk about that in the june quarter. The setup is the investors who believe this is a tech company, im one of those, has to wait a extra year plus before we start to see some of the margins improve. There was another layer of disappointment on the call, too. Tesla has been steadfast with the 50 compound growth expectation. Elon is starting to back off with that language saying it is impossible to grow at those rates. When we think about tesla and the story for the next five or ten years, 20 million vehicle number in 2030 just got a lot harder after his comments last night. Thats the near term. It is disappointing. Im optimistic for longerterm reasons, but it was not a pretty quarter. Right. You mentioned the margin profile has been trending toward traditional auto companies. It is not there. It is getting in that direction. As well as elon musk complains about high Interest Rates. They have to cut price to create demand. In other words, the story that got tesla to an 800 billion market cap is not really there any more. At least not in front of us. It trades at 70 times earnings. It has the advantages with the vir vertical integration. What do you pay for it . Ultimately, you probably pay five or six times revenue. The question he is is what is t flew going to be in the three or four years . This is the thing where people need to look in the mirror and ask the question which is ultimately where is the world going when it comes to transportation . If the answer is maybe it isan electric world in the next 10 to 20 years, then tesla will not get there to keep the stock going. If the answer is the world is going in that direction, i think the company is in a great position. The reason why is this Addressable Market gets back to your question about what do you pay for this. The Addressable Market is massive. If you take the low end, it is 2 trillion a year. The high end is 2. 5 trillion a year. The Smartphone Market is 6 billion a year. Tesla has a pole position. General motors announced they are backing off plans for the Light Truck Production facility. They postponed that by a year. The other automakers are backing off on evs. I think this is the period of Great Companies have difficulties. I think they will come out. You the will pay five or six times revenue. That gets you to 125 billion in revenue next year. That probably goes to 500 t billion in the next several years. Fill in the multiple there. A long way to 2. 5 trillion market cap. We will see if we can manage that. It was half that at the peak. Gene, thank you. Thank you. Lets take a look at at t. Just out with Quarterly Results. Company came in with earnings in adjusted basis of 64 cents a share. That was 2 cents better than the street had been expecting. Revenue at 30. 4 billion. That beat expectations. The stock right now up 1. 8 now. The company is raising the fullyear Free Cash Flow of 16. 5 billion. That compares to the Prior Guidance of 16 billion or better. They are raising adjusted ebita growth. They are looking for better than 4 . They had given guidance of 3 . I spoke with the cfo and talked about why that is happening. He said they see wireless Revenue Growth up 3. 7 for the quarter and on track for 4 for the full year. Also fiber revenue up 27 in the quarter. T