Transcripts For CNBC Squawk 20240703 : vimarsana.com

Hits stores worldwide. Tim cook at the building in midtown today, greeting people. Questions still remain. I read it there. What do you need . What kind of demand do you have to have . Never mind. Were keeping an eye on strikes. Hollywood strud yos and the writers are going to meet again today. Uaw preparing to possibly expand its walkout from detroits big three. Yeah. Lets begin with the markets after thursdays selloff, jim. Selling rosh hashana worked, sell yom kippur. Larry williams said, be careful, september is going to be terrible. He came to me this week and said, okay, cover your shorts yesterday, buy today. He looked at cycles for short, medium, and long, and they all say that today, next week, we bottom. Look, when you come in and you say septembers going to be awful and then suddenly you say its time to buy, i think that guy has gravitas. Okay. If you say so. He looks like harvey keitel. Winston wolf. Ill do a little keitel for you later. I got to hear him. 30 minutes. Ill be there in ten. I think that Larry Williams, who is the markets foremost historian, is saying, buy. I love the fact that we wont out on the show and said, september is going to be awful and boy, september has been hideous. And now, david, time to buy. Time to buy. Yeah. I dont know about the yom kippur, because the cycles didnt turn. I think this was a very good call. Doesnt always agree with the fed calendar where the chairmans going to say some things that conceivably theres 5,000 years worth of data on that. I dont know. 5,000year data . Yeah . What did the fed chair say to abraham 5,000 years ago . I dont know. Speaking of which, fed blackout window is now window has now reopened. We got cook on the table and well get kashkari and daley later on. These guys are thoughtful people, but i would say that im going to make a point. I thought yesterday was one of the worst days ive seen in the stock market in long time. It was just everything anything that was positive just went down less than things that were negative. And the market was cascading, and the giveup that i saw between three and four was extraordinary, and there were people, particularly, say, in the Real Estate Investment trust who said, i got to get out of this so badly. The only utility they recently raised the dividend for more than 50 consecutive years. The giveup yesterday was as if something huge was going to happen. Oh, yeah. The goldman desk note this morning, floodgates opened yesterday at a substantial uptick in gross activity, particularly in tmt. Isnt that interesting . And by the way, in the end, one of the amazing things, all those deals that were really kind of cascading down made a little comeback. Oh, really . Yeah. Instacart and arm and clavio. He calls it clavio and then hes got the wrong name for instacart. Dont you know what instacart is . Its maple bear. Get with the program. Is that flammable . No. All right, just checking. Its not flammable, but i will see you at the club later. Did you see the piece on clothing . Did you see that robert frank double breasted . Very nice. Theyre all holding their ipo price. Couple of fiinitiations today. Btig on cart. Neutral. That was neutral, sell, sell, sell. That was one of the most negative neutrals ive come across, and by the way, nobody likes arm. Yeah. Everyone thinks its too expensive. Their point on cart was kind of what you said, and that is, in addition to competition from walmart, amazon, dash and uber can crosspromote. So, theyre looking at midsingledigit gov growth. They put that that piece was there were more reasons to get out of that stock in that piece. By the way, i thought it was very well written and very convincing, and it made me feel that if youre really in maple bear, you may have to change your stripes there. Again, lets remind people there are so few shares available for trading. So few. Doesnt mean you cant go down. Doesnt mean it cant go down, but its not reflective, i still think you could argue to a certain extent, of the true underlying fundamentals. Until that lockup expires or you get a short squeeze going. You could. You could, but i thought the piece was a well reasoned piece about how everyone was gunning for them, and finally, you realize why the valuation went down so big. By the way, i think uber and i think uber, particularly, but also doordash are formidable opponents. And that business, by the way, this is not the time to have an expensive assist at a supermarket when the supermarkets are sticky and have bad inflation. Its not. Im not going to disagree. And im a melon feeler. I feel the melons. You feel the melons. Left and right. So you dont want to let somebody from instacart feel the melons for you . For the price . No, i happen to like going to the supermarket. Theres a whole fooldsds near u. I dont find its an intimidating thing to shop, and i dont want to pay someone a lot of money to shop for me. What kind of idle nonsense is that . That was another era. I dont know. Im all lost in the supermarket. I can never shop happily. Jim, youve assembled a number of reasons for this selloff. Is food inflation among them . Overall inflation concern . Yeah, i was trying to put in context why there are rational reasons to sell, that you just why not lock in gains . A lot of hedge funds are up nicely. Why give them up . The strikes amplify, but phil lebeau did a piece this morning at 5 30 about what the uaw is doing. It is total class warfare. The political climate, i wouldnt regard as good. Even the republicans hate each other. Fed is very reasoned in what it wants to do. The macro weakness, we heard it from gary steele yesterday, from splunk. I mean, all these what did you hear from him on the macro yesterday . He called macro headwinds. This was before you brought out the rubber hose, and you read him didnt read him his miranda rights. You just went right in. Witness for the prosecution. I got to tell you, you came at isnt it true, mr. Steele . That was davids style. Point of order, david. Point of order. I disagree. I just asked him why he was selling and he didnt seem to be able to articulate it as well as he might have hoped. Why did you take the giants and get ten . I didnt. Oh. Ten and a half. Yeah, i guess the reaction on splunkcisco, we got a couple loop in rbc, good hold. Not a lot of clarity on execution risk this morning. I dont know. I think that cisco very much needed to have that the rate of they needed a continual arr. They needed a continual revenue stream. That had been the bugaboo. People said theyre still a hardware company. Theyre not. I genuinely believe that gary understands cybersecurity. What he did with prove point was amazing. I think it was a very good deal. David would think, of course, that because he didnt take stock, youre probably looking at the 10b1 he has. I find a lot of ceos are programmed to say, this is going to be a great deal for everybody, and my point is always, youve made a decision to sell your company at 157 a share. Your shareholders dont care about the future. Theyre selling now. Thats all. And so is your Employee Base that you may be energized. The company was your customers may be happier. The company is falling apart. It was leaderless. The ceo disappeared. We never found out a thing about why. We never there was never a release about why the ceo left. The company was just falling apart. This man comes in, he turns the company around in a record time and then he decides to but they may have missed a cycle, isnt that something . They may have missed something. Still behind. They are well, i think that theyre fighting to keep up because it was very hard without, like, doug merrick would come on the show regularly, the former ceo, and they were always an outlier. It turned out their client list was quite strong. Its going to be ciscos. 9 to 12 months, by the way. Thats why its trading was that a segue into Activision Blizzard . Activision blizzard, cgen and spirit. Spirit, i got nothing for you. Talks broke down. They broke down. They did . Thats what i understand. Wait. What talks . Theyre trying to get the deal done. Yeah . No deal. And well get to activision and microsoft. Well update people on that. And on cgen 5 as well. Why was there so much news today . So much research. The vast majority of it, in keeping what i wrote last night, was negative. There was just such a giveup that i got to go with williams and say that yesterday was an important moment for the market. Well, you certainly have been sounding off on apple today. The iphone 15 kicks off worldwide sales this morning. Tim cook greeted customers in new york city about an hour ago at the fifth avenue flagship. Tech giant hopes its new product is the solution to this dip in smartphone demand. Apple is coming off of three straight quarterly revenue declines. You call the 15 a monster this morning. By the way, if you want to see monster lines, look no further than china where at one point two weeks ago, we just go back and rewind the tape, it was considered to be that the party would, you know, detain you if you bought an apple, completely untrue. I think the thing that matters the most that people are very excited about is the way the titanium is so light, david. Its incredible. When paired with a watch, you can play, like, hot cold, find out where it is. But the camera, you can go like this, take a picture like this, and it is not blurry. And thats a remarkable thing. There are so many different aspects of it that i will get it asap. You will . Oh, absolutely. Its just so different. Get good tradein value. Its so much better. By the way, if you drop it youre not one, and you obviously indicated that at the very top of the show, who believes there should be real concern about overall demand . Absolutely not. There should be no concern. I have i believe that the consumer is very challenged in a lot of different ways, and i think the people go to the dollar star are not going to buy this. Theres a couple research saying the carriers are not necessarily going to make any difference. Thats completely untrue too when i speak to the primary carrier, but i would just say that this this is underrated new addition that i find a big break with the past. The overall point about weak smartphones globally, reflected a bit in this piece that qualcomm is cutting jobs in r d in shanghai, jobs in taiwan, hundreds, not thousands, but still. Look, theres qualcomm did get, obviously, they got the apple contract, and look, i can say its anecdotal. A guy posted a bunch of pictures from china stores. I got another five or six pictures i could have posted but the reception for this, i find to be a little bit extraordinary versus what the incremental nature that the press said it had initially. Further, the reviews got better, but i just think that if people tried it, they would say, wow, this is a very different phone, much more a big break with the past. Yeah. I really think that. Other interesting thing. Were going get nike next week. Citi today does some survey work in china, and they argue that consumer intent is favoring local brands over western brands. Well see. There are two local brands that are doing quite well. I would point out, by the way, that this not that theres a series of articles, theyre not planning, theyre not planning, about starbucks and how starbucks is challenged in china. And yet, right at the exact time that people say its challenged, i would point out that the company just the first Innovation Tech center, largest manufacturing and distribution facility outside of north america, opened with great fanfare, with Government Support and attendance this past week, we are now for the first time in 24 years since we opened in beijing vertically integrated in china. Not mentioned anywhere and that happened this week. Not mentioned anywhere. All we hear about is lucken and the people who used to run lucken. I dont know. Last i looked, lucken, you banned. Like youre banned from doing any deals in this one because youre charlatans. Okay. Is that the thing . He still does it . Rendered him speechless, jim. Congrats. Thank you. When we come back, the uaw preparing to possibly ramp up strikes against the d3. That deadline at noon eastern today just hours away. Take a look at the premarket. Trying to stabilize. Jims right. There are a ton of calls. Rg aarr, deere, boeing, chte taetnd more when we return. Y, bs everywhere are asking 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. Something amazing is happening here. Inventory is practically moving itself quickly and securely. Classrooms are getting more immersive. Data is powering insights and imagination. Cdw partners with you to get the most from your technology. We work with you to plan it, build it at scale and manage it, so you can do amazing things. Make amazing happen. Cdw cmon, were right there. Cmon baby. Its the only we need. Go, go, go, go ah touchdown baby touchdown are your neighbors watching the same game . Yeah, my 5g Home Internet delays the game a bit. But you get used to it. Try these. Theyre noise cancelling earmuffs. I stole them from an airport. Its always something with you, man. Great solid greek salad . Exactly dont delay the game with verizon or tmobile 5g Home Internet. Catch it on the xfinity 10g network. It will uaw set to announce more big factory strikes if what it calls substantial progress is not made by noon eastern. Our phil lebeau is on the ground in michigan this morning. Hey, carl. At 10 00 a. M. , so, what, about 45 minutes from now, uaw president shawn fain will go on Facebook Live, thats been his favorite way of communicating with the rank and file. At that time, he will give an update on the talks, and if theres not what he deems serious or substantial progress, then we will likely hear about more strike locations. Is it three . Is it two . Is it one . That remains to be seen. Those locations, workers will start to walk out at 12 00 noon. The other story thats getting a lot of attention here in detroit and is raising the ire of Auto Executives, leaked messages from within the uaw where one of the executives with shawn fain was messaging another member of the uaw and said, essentially, were going to keep this thing going for a while. It said, if we can keep them wounded for months, they dont know what to do. The beauty is weve laid it all out in public and theyre still helpless to stop it. If you take a look shares of gm, ford, and stellantis, the reason this raises so much anger is they continually hear shawn fain say, were here. They dont want to negotiate with us. Theyre not stepping up to the plate. Theyre not bargaining in good faith. They filed a complaint with the nlrb. This message goes completely counter to that, and by the way, when you talk with executives at the automakers, they will say, time and again, we dont feel like theyre we dont feel like the uaw is stepping up to the plate. We feel like this is just dragged out and they have pretty much decided, you know what . Were going on strike, whether its one or two locations or multiple locations, and were going to keep this going for many, many weeks. So, thats the situation as we wait to hear what new locations may be walking out at noon today. Guys, back to you. Phil, could the empire be striking back . Is today the day they take the clothes off . I have to believe that ford is not going to sit here and take this anymore. I have to believe theyre going to say, listen, get rid of this guy. Well negotiate with someone real, this is ridiculous. I think its today. Well, jim, im not sure. Okay, let me play this out. If you think that jim farley should say, were not going to deal with shawn fain anymore, the uaw is going to come back and say, i dont care if you dont like shawn fain. We elected him. Maybe not by a huge margin, but we elected him to be in charge of this union, and jim farley may not like it, but the uaw will come back and say, too bad. Thats who we have here. You dont like it, thats the way it goes. So, i understand what youre saying. But i dont think that the solution is for ford to say, get rid of shawn fain. Well, i nor do i think that jim farley will do that. How about if jim farley says, you know what . Were going to close all our plants. We got five months worth of strike fund. Start dealing in good faith. Phil, this was such you and i communicated. I thought this was such bad faith. I do feel a bit of pique because i thought the bad faith of these messages made it so someone in the industry has to say, this is not about the deal. This is about corporate sabotage and wrecking these companies. These were just egregious messages. And thats the anger that you hear from Auto Executives. And look, we all understand, the point of a strike is to inflict pain on a company. You dont go on strike to say, hey, can we please have this . You go on strike to send a message to the pocketbook. And thats what theyre doing here. The problem with those leaked messages in the eyes of many Auto Executives is, if you have no intention on reaching a deal, yeah, lets shut it down. Because then, we can at least say, you know, okay, when youre serious, we are ready to talk. But if your plan is, were just going to continue this, and thats how its going to go, well, then, whats the point of negotiating . Phil, real quick, i can imagine what the lebeau meter is showing in terms of a sentiment. You know in the 50s where they used to go, whee its not going to get resolved any time soon, david. These messages make it clear. What were going to hear from shawn fain today, i would be surprised if he says, no more strike locations. I think what hes going to say is, we have made it clear this is what we want. Hell run down their list of grievances and then we will hear local here, stand up, local here, stand up, walk out. And thats what they will do at noon. Phil, well be talking to you well before then. Thats our phil lebeau watching the progress in the work stoppage this morning. When we come back, well get cramers mad dash, countdown to the opening bell on this friday as the bulls trying to get the ball back somehow. 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. Were not writers, but we help you shape your financial story. Were not an airline, but our Larry Williams<\/a>, who is the markets foremost historian, is saying, buy. I love the fact that we wont out on the show and said, september is going to be awful and boy, september has been hideous. And now, david, time to buy. Time to buy. Yeah. I dont know about the yom kippur, because the cycles didnt turn. I think this was a very good call. Doesnt always agree with the fed calendar where the chairmans going to say some things that conceivably theres 5,000 years worth of data on that. I dont know. 5,000year data . Yeah . What did the fed chair say to abraham 5,000 years ago . I dont know. Speaking of which, fed blackout window is now window has now reopened. We got cook on the table and well get kashkari and daley later on. These guys are thoughtful people, but i would say that im going to make a point. I thought yesterday was one of the worst days ive seen in the stock market in long time. It was just everything anything that was positive just went down less than things that were negative. And the market was cascading, and the giveup that i saw between three and four was extraordinary, and there were people, particularly, say, in the Real Estate Investment<\/a> trust who said, i got to get out of this so badly. The only utility they recently raised the dividend for more than 50 consecutive years. The giveup yesterday was as if something huge was going to happen. Oh, yeah. The goldman desk note this morning, floodgates opened yesterday at a substantial uptick in gross activity, particularly in tmt. Isnt that interesting . And by the way, in the end, one of the amazing things, all those deals that were really kind of cascading down made a little comeback. Oh, really . Yeah. Instacart and arm and clavio. He calls it clavio and then hes got the wrong name for instacart. Dont you know what instacart is . Its maple bear. Get with the program. Is that flammable . No. All right, just checking. Its not flammable, but i will see you at the club later. Did you see the piece on clothing . Did you see that robert frank double breasted . Very nice. Theyre all holding their ipo price. Couple of fiinitiations today. Btig on cart. Neutral. That was neutral, sell, sell, sell. That was one of the most negative neutrals ive come across, and by the way, nobody likes arm. Yeah. Everyone thinks its too expensive. Their point on cart was kind of what you said, and that is, in addition to competition from walmart, amazon, dash and uber can crosspromote. So, theyre looking at midsingledigit gov growth. They put that that piece was there were more reasons to get out of that stock in that piece. By the way, i thought it was very well written and very convincing, and it made me feel that if youre really in maple bear, you may have to change your stripes there. Again, lets remind people there are so few shares available for trading. So few. Doesnt mean you cant go down. Doesnt mean it cant go down, but its not reflective, i still think you could argue to a certain extent, of the true underlying fundamentals. Until that lockup expires or you get a short squeeze going. You could. You could, but i thought the piece was a well reasoned piece about how everyone was gunning for them, and finally, you realize why the valuation went down so big. By the way, i think uber and i think uber, particularly, but also doordash are formidable opponents. And that business, by the way, this is not the time to have an expensive assist at a supermarket when the supermarkets are sticky and have bad inflation. Its not. Im not going to disagree. And im a melon feeler. I feel the melons. You feel the melons. Left and right. So you dont want to let somebody from instacart feel the melons for you . For the price . No, i happen to like going to the supermarket. Theres a whole fooldsds near u. I dont find its an intimidating thing to shop, and i dont want to pay someone a lot of money to shop for me. What kind of idle nonsense is that . That was another era. I dont know. Im all lost in the supermarket. I can never shop happily. Jim, youve assembled a number of reasons for this selloff. Is food inflation among them . Overall inflation concern . Yeah, i was trying to put in context why there are rational reasons to sell, that you just why not lock in gains . A lot of hedge funds are up nicely. Why give them up . The strikes amplify, but phil lebeau did a piece this morning at 5 30 about what the uaw is doing. It is total class warfare. The political climate, i wouldnt regard as good. Even the republicans hate each other. Fed is very reasoned in what it wants to do. The macro weakness, we heard it from gary steele yesterday, from splunk. I mean, all these what did you hear from him on the macro yesterday . He called macro headwinds. This was before you brought out the rubber hose, and you read him didnt read him his miranda rights. You just went right in. Witness for the prosecution. I got to tell you, you came at isnt it true, mr. Steele . That was davids style. Point of order, david. Point of order. I disagree. I just asked him why he was selling and he didnt seem to be able to articulate it as well as he might have hoped. Why did you take the giants and get ten . I didnt. Oh. Ten and a half. Yeah, i guess the reaction on splunkcisco, we got a couple loop in rbc, good hold. Not a lot of clarity on execution risk this morning. I dont know. I think that cisco very much needed to have that the rate of they needed a continual arr. They needed a continual revenue stream. That had been the bugaboo. People said theyre still a hardware company. Theyre not. I genuinely believe that gary understands cybersecurity. What he did with prove point was amazing. I think it was a very good deal. David would think, of course, that because he didnt take stock, youre probably looking at the 10b1 he has. I find a lot of ceos are programmed to say, this is going to be a great deal for everybody, and my point is always, youve made a decision to sell your company at 157 a share. Your shareholders dont care about the future. Theyre selling now. Thats all. And so is your Employee Base<\/a> that you may be energized. The company was your customers may be happier. The company is falling apart. It was leaderless. The ceo disappeared. We never found out a thing about why. We never there was never a release about why the ceo left. The company was just falling apart. This man comes in, he turns the company around in a record time and then he decides to but they may have missed a cycle, isnt that something . They may have missed something. Still behind. They are well, i think that theyre fighting to keep up because it was very hard without, like, doug merrick would come on the show regularly, the former ceo, and they were always an outlier. It turned out their client list was quite strong. Its going to be ciscos. 9 to 12 months, by the way. Thats why its trading was that a segue into Activision Blizzard<\/a> . Activision blizzard, cgen and spirit. Spirit, i got nothing for you. Talks broke down. They broke down. They did . Thats what i understand. Wait. What talks . Theyre trying to get the deal done. Yeah . No deal. And well get to activision and microsoft. Well update people on that. And on cgen 5 as well. Why was there so much news today . So much research. The vast majority of it, in keeping what i wrote last night, was negative. There was just such a giveup that i got to go with williams and say that yesterday was an important moment for the market. Well, you certainly have been sounding off on apple today. The iphone 15 kicks off worldwide sales this morning. Tim cook greeted customers in new york city about an hour ago at the fifth avenue flagship. Tech giant hopes its new product is the solution to this dip in smartphone demand. Apple is coming off of three straight quarterly revenue declines. You call the 15 a monster this morning. By the way, if you want to see monster lines, look no further than china where at one point two weeks ago, we just go back and rewind the tape, it was considered to be that the party would, you know, detain you if you bought an apple, completely untrue. I think the thing that matters the most that people are very excited about is the way the titanium is so light, david. Its incredible. When paired with a watch, you can play, like, hot cold, find out where it is. But the camera, you can go like this, take a picture like this, and it is not blurry. And thats a remarkable thing. There are so many different aspects of it that i will get it asap. You will . Oh, absolutely. Its just so different. Get good tradein value. Its so much better. By the way, if you drop it youre not one, and you obviously indicated that at the very top of the show, who believes there should be real concern about overall demand . Absolutely not. There should be no concern. I have i believe that the consumer is very challenged in a lot of different ways, and i think the people go to the dollar star are not going to buy this. Theres a couple research saying the carriers are not necessarily going to make any difference. Thats completely untrue too when i speak to the primary carrier, but i would just say that this this is underrated new addition that i find a big break with the past. The overall point about weak smartphones globally, reflected a bit in this piece that qualcomm is cutting jobs in r d in shanghai, jobs in taiwan, hundreds, not thousands, but still. Look, theres qualcomm did get, obviously, they got the apple contract, and look, i can say its anecdotal. A guy posted a bunch of pictures from china stores. I got another five or six pictures i could have posted but the reception for this, i find to be a little bit extraordinary versus what the incremental nature that the press said it had initially. Further, the reviews got better, but i just think that if people tried it, they would say, wow, this is a very different phone, much more a big break with the past. Yeah. I really think that. Other interesting thing. Were going get nike next week. Citi today does some survey work in china, and they argue that consumer intent is favoring local brands over western brands. Well see. There are two local brands that are doing quite well. I would point out, by the way, that this not that theres a series of articles, theyre not planning, theyre not planning, about starbucks and how starbucks is challenged in china. And yet, right at the exact time that people say its challenged, i would point out that the company just the first Innovation Tech<\/a> center, largest manufacturing and distribution facility outside of north america, opened with great fanfare, with Government Support<\/a> and attendance this past week, we are now for the first time in 24 years since we opened in beijing vertically integrated in china. Not mentioned anywhere and that happened this week. Not mentioned anywhere. All we hear about is lucken and the people who used to run lucken. I dont know. Last i looked, lucken, you banned. Like youre banned from doing any deals in this one because youre charlatans. Okay. Is that the thing . He still does it . Rendered him speechless, jim. Congrats. Thank you. When we come back, the uaw preparing to possibly ramp up strikes against the d3. That deadline at noon eastern today just hours away. Take a look at the premarket. Trying to stabilize. Jims right. There are a ton of calls. Rg aarr, deere, boeing, chte taetnd more when we return. Y, bs everywhere are asking is it possible . With comcast business. It is. Is it possible to help keep our Online Platform<\/a> 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. Something amazing is happening here. Inventory is practically moving itself quickly and securely. Classrooms are getting more immersive. Data is powering insights and imagination. Cdw partners with you to get the most from your technology. We work with you to plan it, build it at scale and manage it, so you can do amazing things. Make amazing happen. Cdw cmon, were right there. Cmon baby. Its the only we need. Go, go, go, go ah touchdown baby touchdown are your neighbors watching the same game . Yeah, my 5g Home Internet<\/a> delays the game a bit. But you get used to it. Try these. Theyre noise cancelling earmuffs. I stole them from an airport. Its always something with you, man. Great solid greek salad . Exactly dont delay the game with verizon or tmobile 5g Home Internet<\/a>. Catch it on the xfinity 10g network. It will uaw set to announce more big factory strikes if what it calls substantial progress is not made by noon eastern. Our phil lebeau is on the ground in michigan this morning. Hey, carl. At 10 00 a. M. , so, what, about 45 minutes from now, uaw president shawn fain will go on Facebook Live<\/a>, thats been his favorite way of communicating with the rank and file. At that time, he will give an update on the talks, and if theres not what he deems serious or substantial progress, then we will likely hear about more strike locations. Is it three . Is it two . Is it one . That remains to be seen. Those locations, workers will start to walk out at 12 00 noon. The other story thats getting a lot of attention here in detroit and is raising the ire of Auto Executives<\/a>, leaked messages from within the uaw where one of the executives with shawn fain was messaging another member of the uaw and said, essentially, were going to keep this thing going for a while. It said, if we can keep them wounded for months, they dont know what to do. The beauty is weve laid it all out in public and theyre still helpless to stop it. If you take a look shares of gm, ford, and stellantis, the reason this raises so much anger is they continually hear shawn fain say, were here. They dont want to negotiate with us. Theyre not stepping up to the plate. Theyre not bargaining in good faith. They filed a complaint with the nlrb. This message goes completely counter to that, and by the way, when you talk with executives at the automakers, they will say, time and again, we dont feel like theyre we dont feel like the uaw is stepping up to the plate. We feel like this is just dragged out and they have pretty much decided, you know what . Were going on strike, whether its one or two locations or multiple locations, and were going to keep this going for many, many weeks. So, thats the situation as we wait to hear what new locations may be walking out at noon today. Guys, back to you. Phil, could the empire be striking back . Is today the day they take the clothes off . I have to believe that ford is not going to sit here and take this anymore. I have to believe theyre going to say, listen, get rid of this guy. Well negotiate with someone real, this is ridiculous. I think its today. Well, jim, im not sure. Okay, let me play this out. If you think that jim farley should say, were not going to deal with shawn fain anymore, the uaw is going to come back and say, i dont care if you dont like shawn fain. We elected him. Maybe not by a huge margin, but we elected him to be in charge of this union, and jim farley may not like it, but the uaw will come back and say, too bad. Thats who we have here. You dont like it, thats the way it goes. So, i understand what youre saying. But i dont think that the solution is for ford to say, get rid of shawn fain. Well, i nor do i think that jim farley will do that. How about if jim farley says, you know what . Were going to close all our plants. We got five months worth of strike fund. Start dealing in good faith. Phil, this was such you and i communicated. I thought this was such bad faith. I do feel a bit of pique because i thought the bad faith of these messages made it so someone in the industry has to say, this is not about the deal. This is about corporate sabotage and wrecking these companies. These were just egregious messages. And thats the anger that you hear from Auto Executives<\/a>. And look, we all understand, the point of a strike is to inflict pain on a company. You dont go on strike to say, hey, can we please have this . You go on strike to send a message to the pocketbook. And thats what theyre doing here. The problem with those leaked messages in the eyes of many Auto Executives<\/a> is, if you have no intention on reaching a deal, yeah, lets shut it down. Because then, we can at least say, you know, okay, when youre serious, we are ready to talk. But if your plan is, were just going to continue this, and thats how its going to go, well, then, whats the point of negotiating . Phil, real quick, i can imagine what the lebeau meter is showing in terms of a sentiment. You know in the 50s where they used to go, whee its not going to get resolved any time soon, david. These messages make it clear. What were going to hear from shawn fain today, i would be surprised if he says, no more strike locations. I think what hes going to say is, we have made it clear this is what we want. Hell run down their list of grievances and then we will hear local here, stand up, local here, stand up, walk out. And thats what they will do at noon. Phil, well be talking to you well before then. Thats our phil lebeau watching the progress in the work stoppage this morning. When we come back, well get cramers mad dash, countdown to the opening bell on this friday as the bulls trying to get the ball back somehow. ella fashion moves fast. Setting trends is our business. We need to scale with customer demand. 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There are some things that go better. Together. Like your workplace benefits. And retirement savings. With voya, considering all your financial choices together. Can help you be better prepared for unexpected events. Voya. Well planned. Well invested. Well protected. Announcer the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. Lets get to a mad dash. Opening bell for this final trading session of the week is two minutes away. Meta. Yeah, david, i know that youre an aficionado of catalyst watches by research companies. Im always on alert for catalysts. Citi is putting out a catalyst about metas got a big festival coming up, and they are saying youre going to see this is the 90day positive catalyst watch ahead of meta connect on 9 27. Were expecting more details around metas gen a. I. , generative a. I. , plans in midoctober and it may be a huge increase in reels. I think its very, very important. I understand that mark is making incredible progress in this and the improving advertising situation could take meta up big. Catalyst watch, meta. What else do you need . Okay. Its 12 months, already up 107 . Year to date, up almost 150 . Awll i can tell you is i expect some big things from this conference, and i think that metas got its meta, its amazon, and its google. Thats the like, abc, nbc, cbs when we were growing up. Of generative a. I. . Advertising. Yeah, meta connect is, i think, tuesday. Also some comments about the ad market. They believe reflecting higher. Reflecting higher for these companies. Amazon, able to have a couple tiers. Amazon, last night on football, they really wow. They have stepped up. That was some very good presentations. Really good. Thats the opening bell. The big board, it is the Prime Minister<\/a> of thailand here in new york for the u. N. General assembly. At the nasdaq, its thePrime Minister<\/a> of vietnam, who rang the bell here yesterday. Great allies. Dont get we dont talk much about our allies, which is bad. Weve got some great friends. We mentioned some of the action on ford this morning premarket. Lets get back to phil lebeau with more on that. Hey, carl. Call up shares of ford because this is significant news. We have learned from a source familiar with the negotiations with the uaw that when uaw president shawn fain addresses the state of negotiations with all of the automakers coming up at 10 00 a. M. This morning, he is going to say that theres Real Progress<\/a> in the talks with ford. Now, it is unclear to us at this point if that means that there will not be any strike actions at more locations for ford or if there will just be more strikes being called at General Motors<\/a> and stellantis, but this is significant. This is the first time that the uaw basically, what we understand, that there is some indication from those close to the negotiations that there is substantial progress with one of the automakers, and in this case, its ford, and thats what were going to hear from shawn fain coming up at 10 00 a. M. This morning. Guys, back to you. This is what i dont understand. Jim farley has been saying, look, to fain, we hired union people, they laid off union people. We have no temporary workers. Stop treating us as if were gm and stellantis and be serious or go. And i think that the uaw may be taking farley up on this. Well, weve long thought that they were further along than General Motors<\/a> and stellantis in terms of the negotiations, jim. But then we were thrown for a off the track of that when shawn fain camout with his messages last week and he took ford to task. Its our understanding that there is Real Progress<\/a> there between the uaw and ford. Now, lets not get carried away. The people that i have talked with have not given any indication that theres going to be an agreement any time soon. But it is the first time that we have heard about one of the automakers making progress with their discussions with the uaw. Perfect. Phil, appreciate that. Phil lebeau will be coming back to you quite a bit today. Jim, meanwhile, got a little more labor piece in australia with chevron lng. Thats 7 of global supply. Look, i have eqt on, which is the biggest in our country, tonight, and theres a lot of difference in our country, where californias trying to make some rules about how much you should be able to have natural gas. The natural gas that eqt is doing is now, because of the that last pipeline that was done in congress, theyre going to be exporting. There is so we are going to own this market. And i know australia, i think theyre overproducing in australia. We have enough natural gas to become so much more important than everybody else. Our refining costs are so low. The storys been kind of lost in the whole oil going too high, but natural gas is at a sweet spot. We have a lot of Companies Making<\/a> 1. 60. Eqt does have higher costs, but i brought them on because i want to know what australia means, what it means for us, but we are just a powerhouse, and i dont think people realize how good we are at it because our president s not a real fossil fuel guy. Right. Do you think energy is still the most interesting thing going on here . Are we turning krocorners . I just like nat gas. If its cold in europe, its going to be absolutely incredible how much money these companies can make. If its not cold, no. But it will be highly unusual if its two years in a row. Then again, we do have an incredible weather pattern in our country thats much warmer. But i just really like natural gas here. My favorite is coterra, which is the old cabot oil and gas, and they have dollar refeigining co and they are all in. Lets talk activisionmicrosoft again because the deal is getting closer and closer to closing. Very Important News<\/a> overnight from the cma saying it considers the restructured deal, makes important changes that substantially address the concerns it set out in relation to the original transaction earlier this year. Earliest it could close, probably october 6th, but that does seem to be a significant possibility at this point for that transaction. Remember that we thought was, for all intents, dead when the cma said, no. And really, there had been no road map for companies to do what microsoft has, and activision have succeeded in doing. Namely, rolling it back and getting the outcome they wanted. You know, the fight here in the u. S. Was never the main fight. It was really the cmas objections that were thought to be permanent because the idea had been that if the ftc did object as they did, you could beat them in court, which they did. Theres, again, what i told you earlier. You know, the question now is simply, really seems to be one of timing because microsoft has offered remedies to ensure the terms of the sale of activisions rights, that is, the streaming rights to ubisoft, are enforceable by the cma. Really remarkable what microsoft and activision were able to accomplish here, and thats why the stock is trading ever so closer to the 95 price after there is an increased reverse break fee, but that is really not going to come into play here. Very soon, microsoft will officially own activision. Im so glad youre pointing this out. One of the things that is amazing about the apple 15, games. Lot of the team i work with, my team, are gamers, and it is just extraordinary. Its hollywood production, taking these games, like an Activision Blizzard<\/a> game, and making it so its lifelike. Fantastic. Youll have to come over to my house and use it. Okay. Gaming night at jims . Absolutely. And well watch amazon, you know, thursday night football. Well do everything. Well do it all. He doesnt even believe me. And the watch. He doesnt have the watch. The watch is just a device to find your phone when you lose your phone. Thats great. It also tells time. Wow. Thats quite a device. Jim, yes. Thats what its all about, the double tap. The watch operates, it reads the blood flow in your wrists. Yes, and i can check his blood flow. I the turn off his you know what its going to be . This is called toto. You know what toto is . Turn off the oxygen. Oh. I thought maybe we were making a wizard of oz reference. Another story that had a big impact on at t and verizon shares was, of course, that wall street journal investigation of leadcovered Telecommunications Cables<\/a> across the u. S. Buried in various places. There were some significant questions raised not soon after about some of the allegations in the story, and i talked to john stankey at at t a couple of weeks back about it as well. He said, listen, weve done a lot of investigation at this point. We do not see the significant risk. The epa did at least has done some sampling of its own, and let me read to you from a press release out from the epa. Epa sampled soil for lead in an area nearsome Telecommunications Cables<\/a> in coal center, pennsylvania, and california, pennsylvania. Epas scientific review of the data and Current Conditions<\/a> in the area indicate that there are no threats to the health of people nearby that would warrant an immediate epa response action. Not seeing much of a response here, and at t and verizon, they did come back a bit, but you remember how much those stocks were down. The concern being that perhaps, especially at t would have to unearth thousands of miles of cable and remediate to the tune of billions of dollars. That seems to be less and less of an actual chance. That story was so big. I thought the plaintiffs bar was going to come after them. It had all the earmark of the next groundwater pfas. Youre telling me it wasnt that significant . They did say, listen, the results they did show some soil samples had lead concentrations above an epa screening level of 400 parts. But they were primarily covered with grass. Well maintained grass provides coverage to prevent exposure. They said this is not where children gather and its not a concern. Wow. That was a long, long investigation that they did. It was, it was. Without a doubt. Is that much ado about nothing . I dont want to say that, jim, but i think there were some questions raised and continue to be some questions raised about the validity of some of the sampling that they did. Thats amazing. Here i thought he was going to do the 10 deal. Im not doing that. You did this. I did this. I got some other things i can do too. You want an update on cgen and pfizer . I happen to know that the bladder cancers end points were met and thats a same drug they use with keytruda. The question on pfizer closing the deal, of course, is when are they going to be asserting compliance with the second request from the ftc . You can see positive response on pfizer and seagen. The cv 302 hitting its end points and supporting label expansion. Nobody was questioning whether pfizer didnt want to buy the company, but there were some questions about whether this particular drug would be a success. Cant give people too much hope. I always find that the old seagen, seattle genetics, would urge me not to say, listen, these are cures, but its great that they met the we talked a lot about pfizers performance this year, of course, after, you know, what were covid sales . I dont even know what the billion number was. And obviously, helped get rid of the covid pandemic, that being pfizer, but when you look at the stock over the last 20 years, its done nothing. No, its not been great. Thats the last year, obviously, it did have the spike as a result, but theres going way back. I mean, thats just not what youre looking for, 11 . Maybe when they close seagen, of course, some of the money that was taken in, used to acquire this company, they will have a new investment story they can start to sell, jim. They have fantastic anticancer. Fantastic platform. Its a platform. Its not just you know . And i like that. It reminds me of keytruda. Theyre partners. They bought the biohaven i was the chief spokesperson for the American Migraine<\/a> association. I dont think theyve done nearly enough with that drug. The idea is that some of the benefits some of the revenues and or profits they received from the Covid Vaccine<\/a> would go towards trying to fuel new areas for pfizer to move ahead. Great call. Stay on that. By the way, dont have updates, really, on timing. Again, were still waiting for them to assert plans with the second request, that is pfizer and seagen, with the ftc to get that deal done. Excellent. Or to be in a position. Jim, industrials, deere, lowest since june. Boeing, lowest since may. Boeings down 11 for the month, and now we got this downgrade today over at cfra. Boy, it had no new facts to it. It was just kind of like, hey, listen, its not doing that well. I dont mean to belittle it. Im just saying, thats part of what i was saying last night. You could knock a stock over with a feather. Deere, everyone knows there was no super cycle, sells at 11 times earnings now. They had laid off some people and now suddenly no one wants to own ag, and ag was a super cycle. Got the same call last week out of evercore, basically ag schedules in europe, inventories building for used. Yeah, and i would have thought, carl, that somehow that negative story would have been discounted in deeres stock, and it wasnt at all. Another negative for deere. It hits again. Thats the sign of a very tough market. But you know, against that is still the i care about the Larry Williams<\/a> call because he was so negative, but i also think that we the only thing that people seem to want to buy is the oils. That super cycle piece that we saw this morning jpmorgan . Jpmorgan. I thought that was a terrible piece, because you know i hate super cycles. Their point is largely the stocks havent kept up with the commodity prices. Great. Thats just a lot of effort. But it is a terrible moment. Right now is a terrible moment in the market where you can Say Something<\/a> negative. That boeing piece, all it said was, like, boeings not doing as well as we thought. And boeing goes down big on that. What kind of market is this, david . What kind of market is this, jim . Ill ask you. Its a market that says to me that we are so negative that be careful. Things could rally. Thats what im saying. Thats what im saying. Its too negative. You cant have the same pieces of Research Come<\/a> out every day and the stock drops the same amount every day because of pieces that we already know. That doesnt stand up under close scrutiny. Okay. Okay . Ill accept that. Ill accept that. Couple pieces about fees going higher. One is amazon going to bring in ads next year. I thought that was a big piece. 2. 99 if you want to avoid the ads. And mcdonalds raising their fees on franchisees for the first time in 30 years. I had wing stop, you can make t 2 million. But i mean, you can see they could raise theirs because there are not a lot of wingstops. Most of the wingstop areas are taken, but this is a big move by mcdonalds, and why is it up . This cant stand. You cant have really big news thats great and a stock not go much at all. You just cant. This doesnt make sense. The only thing thats gone up are refiners, which you mentioned yesterday, because the margins are so big. I dont think this market is as bad as it cant stay this negative. It just cant. Another stock that is up is charter. Carl mentioned theres an upgrade this morning over at wells fargo. Upgrade to overweight. They say the worst of cable is behind it and charter is the clearest expression of the new normal. Of course, charter having just emerged from that fight with disney. And you know, i think the longer term plan, a company like this is sort of the connects you to everything, whether its wireless, broadband, and if video is a part of it. Total connectivity, one bill, one thats a ways away, but thats sort of the thats the longer term goal. They seem positive on rural growth and video as well contributing to ebitda acceleration is what wells fargo says. But thats a good piece. Thats value added piece. Thats something no one was thinking. Thats what i want to see right now. Yeah. Not, im as negative on nvidia as everybody else. You know what . Its time to sell oracle. I cant stand microsoft. These are people who just throw theyre towel throwers. Theyre just towel throwers. And he does ask the question at the end, why not upgrade comcast, our Parent Company<\/a> . It does appear its because of the continued further investments in content and experiences. That obviously includes streaming. Okay. Nothing makes jim sadder than mentioning peacock. Peacock. 45. Whats 45 . You can take 45 to the bank. Oh, you mean comcast . Its an epoxy to 45 right now. Its gorilla glue. Its stuck there. It is. Its been a busy morning for global pmis. Now its our turn. Lets get to rick santelli. It is our turn, and some things arent changing very much. These are september preliminary reads from s p global. They will change in a couple of weeks. On the headline number for manufacturing, it is the fifth consecutive contraction month. 48. 9, and that is, well, actually, 48. 9 is the strongest level going back to april of this year when it was last positive at 50. 2. Speaking of 50. 2, that happens to be what the services pmi is, and that is the eighth consecutive expansion. We know services have been more healthy than manufacturing, 50. 2, and finally, the composite, 50. 1, also the eighth consecutive month in expansion mode, and both those numbers on the services and composite are, well, theyre actually the softest since january of this year, but still over 50. We see Interest Rates<\/a> somewhat lower on the session, but definitely higher on the week. Twos are down three in a session, up nine on the week. Tens, down one on the session but up 15 on the week. Squawk on the street will return after a short break. Every day, businesses everywhere are asking is it possible . With comcast business. It is. Is it possible to help keep our Online Platform<\/a> 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. You know doug, ever since switching to workday 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 with your hearing, if you start having a little trouble, youre concerned that its going to cost you money. To this day i only paid what i had to pay for the device. When i go back everything is covered. Theres so much youre missing by not having hearing aids. well find you a hearing aid that fits your lifestyle and budget. Unlock your riskfree trial during our limitedtime sounds of autumn event. Call 1800miracle to book your appointment today. Some week to date laggards on the nasdaq 100. Moderna and lucid in there as well, intel, align, illumina. Its been a tough week for certain sectors of the market. Holding tono 4340 roughly. Stop trading with jim is up next. 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. music but it can be passed on to the ne neration. The walking tree is said to change its entire location in pursuit of sunlight where could reinvention take your business . Accenture. Let there be change. The power goes out and we still have wifi to do our homework. And thats a good thing . Great in my book who are you . No power . No problem. Introducing stormready wifi. Now you can stay reliably connected through Power Outages<\/a> with unlimited cellular data and up to 4 hours of battery backup to keep you online. Only from xfinity. Home of the xfinity 10g network. Time for jim and top trading. Sometimes, carl, our colleague david faber would say whats the key to the market and today if were going to have a turn, a negative piece by barclays about tesla talking about a slow down to missing quarters. If tesla is able to turn, i believe we could have a substantial rally because this is a negative piece. Do you buy the times piece this uaw regional director said workers at tesla are thinking about organizing or is that selfserving union commentary. I was talking to david about organizing. Tesla doesnt have anybody the machines are organizing . They do have employees. Theyll higher more for the cyber truck when that gets working. Thats a right to work state. It seems unlikely that there would be i agree, but i just want this is a true negative piece about numbers and if tesla can rally on that, then that says we have were done dumping, when every stock in this market except for the refiners, up with group, a good leadership valero. Oh, yeah. Bow here ro and valero. How are you closing out the week today . Having federal realty on. I want to find out about the states of reits. Tobey rice, and then leon topalian, nucor has been money. U. S. Steele, any chance nucor would look to partner . Nucor does not need them. Just for something, nothing . You dont think so . No. Theyre the Michael Parsons<\/a> of steel. Wow. Fun to watch. Wow. Have a great weekend. See you tonight. Mad money. Carl have a great weekend. Nice. Sick burn. When we return, the latest on the uaw strike. Dont go anywhere. Municipal bonds dont usually get the Media Coverage<\/a> the stock market does. In fact, most people dont find them all that exciting. But, if youre looking for the potential for consistent income thats federally taxfree, now is an excellent time to consider Municipal Bonds<\/a> from hennion walsh. If you have at least 10,000 dollars to invest, call and talk with one of our bond specialists at 18003764376. Well send you our exclusive bond guide free. With details about how bonds can be an important part of your portfolio. Hennion walsh has specialized in fixed income and Growth Solutions<\/a> for 30 years and offers highquality Municipal Bonds<\/a> from across the country. They provide the potential for regular income, are federally taxfree, and have historically low risk. Call today to request your free bond guide. 18003764376 thats 18003764376. Ska. Good friday morning. Welcome to another hour of squawk on the street. Im Carl Quintanilla<\/a> with david faber, leslie picker at post nine of the new york stock exchange. Sara eisen is on assignment. Mixed market finishing up a tough week, worst week since march for the s p and nasdaq. Watching the pmis, some of the media names and autos. Standout stock, ford shares rallying. Phil lebeau reporting on the progress with the uaw. Joins us from outside a Ford Assembly<\/a> plant in wayne, michigan. Phil . Let me give you an update on what were expecting to hear from uaw president shawn fain in just a couple minutes. Sources familiar with his comments say that a couple things will stand out. One, he will say that there is Real Progress<\/a> between the uaw and ford. Whether or not that means theres no strike actions against ford remains to be seen furtherstrike actions remains to be seen and the other message, he is going to invite President Biden<\/a> to come to detroit, or to another location where a strike is taking place, and join the picketers on the picket line. Not sure the president will take him up on that, but those are two messages we expect to hear from shawn fain when he begins his Facebook Live<\/a> presentation in a matter of minutes and likely hear if there are more strike locations and those strikes, if he announces them, when he announces them, hell say this particular place, this particular place, those strikes would begin at noon. So the workers, the Union Members<\/a> would walk off the job at noon. Thank you for the update. As carl said, well keep checking back in with you followings they so closely for us. Phil lebeau. Breaking news on the fed. Steve liesman heres with that. David, yeah. Susan collins, the first fed president to talk after the meeting on wednesday and expects rates to stay higher for longer and says basically in agreement with the statement and those hawkish forecasts that came out. She says further tightening is not off the table. The fed will stay the course, collins says, to achieve its mandate when it comes to inflation. And the recent statement that was throughout and the feds pause should not be mistaken, does not imply the fed reached the peak funds rate yet. Current policy does require patience. Some inflation readings have been encouraging. Thats one of the few good things she says. Core services, inflation exshelter has not improved with price stability. On the upside, which may be the downside for fed officials, she says Economic Activity<\/a> continues to be above trend, though she is optimistic that price stability can be restored with an orderly slowdown of activity, including, by the way, only a modest increase in the unemployment rate. The pathway to a soft landing she suggests has widened and there is some evidence supply and demand are coming back into balance, especially in the labor market. Guys . So a little hawkish out of the box there. Although, i mean, did sound somewhat optimistic. The widening of the soft landing is that a positive or anything new or not . Definitely a positive. But i think it comes along with higher rates and certainly a more sustained what would you call it, sustained restrictive level for rates. I think the reason you might want to follow collins, im not sure shes a died in the wool hawk here. I would have thought more dovish but shes coming out in full agreement with where the not just the policy statement is, but where the forecast is. That hawkish forecast freaked everybody out and the idea that the neutral rate may be higher for longer and thats an additional challenge to the stock market above and beyond whatever the fed does this year or next year. The idea that you could be talking about we have john taylor on yesterday on the exchange talking about maybe a 3. 5 or 4 long run neutral rate. You got to factor that into your investment thesis as you look at the risks ahead. Im interested steve in the line from collins, cash levels are returning to prepandemic normals, households, businesses expected to become more normal to rates, what bofa, consumers showing interest in borrowing more and the line from ken griffin you would expect some of this to bite in ways it hasnt in the past. I think thats very true. All you have to do is put up a chart of the twoyear, 10year and theres been essentially a step change where now all of a sudden not that chart, thats the dow. Okay. Which shows theres been a step change in rates and those rates are starting to felt near the economy in ways that they hadnt before. Theres been this big debate on the fed about the lags of policy, and as youll note, chairman powell on wednesday used the word carefully i think six or seven times proceeding carefully and thats why. They want to see the lags and how much effect there will be, whether or not theres tightening of credit from the banks and that kind of stuff and what kind of effect that has on Economic Activity<\/a>. Theyre going to go slow here but theres little forecasting here from the fed that the fed that will be reducing rates any time soon and keeping alive this idea of maybe one more hike this year. Steve, thanks. Good to have the fed speak back. Our Steve Liesman<\/a> this morning. Stocks have dropped as you know as treasury yields soared. 10year hits the highest level since november of 07. Next guest says higher rates are not a road block. Chief investment strategist brian belski has a year end target of 4550. Good to see you. How does the economy evade what some would argue are increasing effects from rates . Great question and good morning, everyone. Thanks for having us, carl. You know, i think its less about the economy right now and more about the stock market trying to digest what is increasingly becoming normal. If i go back and look at what we wrote in our year ahead piece we published in november, the predominant theme was the return to normalization. I think thats what the broader trend is over the next three to five years. You have to remember that the average 10year treasury over the last 70 years is 5 , and what we think is happening right now is that the stock market in terms of the u. S. Stock market is entering into this kind of normalized performance pattern of high Single Digits<\/a>, low double digits, where earnings will be high Single Digits<\/a> and well see some sort of a trading range of the 10year treasury between 3 and 4 or 4 and 5 and gdp of 2 to 3 . How we get there is weve had shock last year and awe this year, especially considering whats happened with stock Market Performance<\/a> the first half of the year and i think the biggest troubling factor is this whole im getting bored with this higher for longer Interest Rate<\/a> thing. Of course, were higher for longer. Zero was not normal. Zero rates are not normal, and i think what were going to do is settle into normalized trading. I think the investors that have been in the business less than ten years are not going to understand this, quite frankly, because weve reared an entire generations that only believe you buy stocks because Interest Rates<\/a> go down. Interest rates stay higher because the economy is in Good Standing<\/a> and the stock market following suit. Bofa has a good desk note where they talk about the movie wall street 1987 where the Real Estate Agents<\/a> are going crazy with business with Mortgage Rates<\/a> at 8, 9, 10. The shutdown if we get it, the strike if it expands and student loans, can offset good seasonality going into year end . Good seasonality is kind of what everyone is keying in on. We had a bunch of meetings withenutional clients this week and there are fears with respect to the Government Shutdown<\/a> and we quelled those a little bit going back to 2011, and saw what happened. The president s Approval Ratings<\/a> at that time were higher than the current president. I think were going to get a better standing in terms of trying to get this shutdown done faster. Thats number one. On the student loan payments thats a hangover, but remember, you said in the prior hit that cash flow is up, the consumer has been smart in terms of their money, so i think in terms of interest coverage ratios on the consumption side, i think well be able to weather that. I think the bigger issue is what happens into next year with the added volatility of an election and stock market gains this year that people werent really positioned for, so i think we could get a, quote, unquote, chasing factor in the Fourth Quarter<\/a> that will have Money Managers<\/a> to chase the market. How should investors be repositioning now, given all of those confluence of factors . In your latest note you talk about technology, energy and industrials benefitting during periods of high Interest Rates<\/a>. Is it too late for those sectors . No. I dont think its too late for your favorite sector financials that you cover. Everybody hate financials. But i think, you think of financials and banks in particular, in the very bifurcated fashion, meaning the really big ones will do well and the really small banks are going to do well. Everything in between is going to have a harder time, and then also, the scale theme, the theme of scale, Asset Managers<\/a> and brokers can do well. I think the big banks will come out with new products that will help cover some of these new debt costs, number one, especially on the consumer, but also on the commercial bank side. Look for that. Number two, value starting to come back a little bit, and by the way, Dividend Growth<\/a> and lower kind of duration assets are starting to work. On your cycle, thatsing if to be a call for 2024. I think even more cyclical on the industrials and materials can do well, as we start to see increased onshoringp and capacity coming back defined by a. I. And robotics an explanation of where we are at the moment and headed our way. Have a good weekend. Thanks. Brian belski. You too. As we these break our road map for the hour, high hopes for the ipo market but recent debuts are slumping. So is the ipo reopening already on hold . Plus, apples latest iphone is hitting store shelves today. Were going to head to midtown manhattan, later this hour. Ma the uaw shawn fain making rerks. We will bring you headlines after a short break. Them. Were excited about what ai will do for business. Introducing watsonx a platform designed to multiply output by training ai with your data. When you watsonx your business, you can build ai to help coders code faster, Customer Service<\/a> respond quicker, and employees handle repetitive tasks in less time. Lets create ai that transforms business with watsonx. Ibm. Lets create. sean i wish for the amazing new iphone 15 pro jason sean do you mean this one the one with titanium . Switch to verizon, you can trade in any iphone, and get the new iphone 15 pro on them. vo trade in any iphone in any condition for a new iphone 15 pro on us. Only on verizon. Loving this pay bump on our allowance. Wonder where mom and dad got the extra money . Maybe they won the lottery . Maybe they inherited a fortune . Maybe buried treasure . Maybe it fell off a truck . Or maybe they switched to Xfinity Mobile<\/a> the fastest mobile service. Save hundreds a year over tmobile, at t and verizon. Now i can buy that electric scooter. Im starting a private equity fund that specializes in midcap. You do you. Switch to Xfinity Mobile<\/a> today. Is going to have a good upside for a really long time, and thats why i bought back with a higher price than 51. I just want to have all the investors have a good time going forward. We feel like not focused on the price necessarily today or next ten days, but creating value for shareholders over the next ten years. We try to find investors that shared our longterm focus and honestly weve never tried to top tick price when we raised our private rounds. Thats when i talk about the public markets, investors that want to go long with us . Just a few of the ceos and Business Leaders<\/a> behind the big ipos of the last week and a half whose stocks have stalled out, despite rallying on their respective first days. You have arm pricing at 51 a share, now trading below that at 50. 84. Klaviyo and instacart each priced at 30, both trading marginally higher above that issue price, but still dramatically dramatic pressure relative to the first day of trading. Wall street cautious on the stock with susquehanna and arm initiating instacart at neutral each. I dont know if you saw this whole tweet. He talked about his short bet on treasuries but embedded in there was a sentence that encapsulates what people are talking about with regard to the ipo market imagine trying to do a massive ipo where the underwriter, insiders and short sellers, kind of the key there, all selling at once, competing to hit every bid on the way down while the analysts downgrade their ratings to sell. So theres kind of a confluence of factors afoot here. David, you pointed out the float a number of times. For all of them actually. All of them but instacart in particular. With the cornerstone investors, which are supposed to be more of a stabilizing mechanism. You have partners buying the offering and therefore its not as much uncertainty world war to w who would flip or sell the stock. The ipo market arm was surprised wouldnt say aggressively, per se, but the multiples are high. Over 100 times. Trailing. The question about growth is a significant one. They are talking about an a. I. Future, but its not as though its written in stone thats going to occur. Yeah. Although, i mean, as an underwriter its a little more than a week now, but thats not great. Not the best. Its interesting because on these road shows you heard so much about the demand and its oversubscribed x number of times and so much, you know, in the way of investors clamoring for these things. Doesnt appear they are necessarily there for the long term. I have learned, you know, as we look ahead to future ipos that berken stock in particular, that one is still on. Theyre not undeterred by the price activity weve seen with the three large deals this week. They are aiming according to a person familiar with the man for a listing in midoctober. That is still ongoing. Well see whether this actually opens up the ipo market in a meaningful way, or if people look at this and say im going to put my plans on pause with the exception of berkenstock and see how this market treats the riskier securities. I would argue the other reaction to a couple names, arm and cart, have been theyre coming to market where rivals have taken steps to get competitive, and you have arm as i think it was susquehanna today testing the limits of royalty payments against open source and then with cart, uber and dash, having already done a lot to bolster their Balance Sheet<\/a> and their cost structure so theyre not coming into a vacuum. Not at all. Competitive pressure. Theres this question about Discretionary Spending<\/a> on the consumer. If youre in instacart are we at the point in the economy where consumers are willing to pay up for the tips and fees to make their lives convenient. Want to bring in bob pisani. Youve been reporting all week, bob. Im waiting for the 1 float. Because thats what theyre down to. The only way to keep these things up. 10 float on most of these right now. Theres two speed bumps weve had. Number one, a very mediocre reception to the recent crop of ipos. Thats a problem for arm, instacart and klaviyo. Number two, the big problem, rapidly rising Interest Rates<\/a> and a lower stock market. My heavens, if its not an ipo killer i dont know what is. That is the classic ipo killer. Mediocre reception, rising Interest Rates<\/a> are a problem. We mentioned instacart, it broke below its initial price of 30. Btig and susquehanna with a mediocre rating of neutral and pull valuations in both those reports. Arm broke below its initial price again today. Klaviyo at 31, barely above 30. This is a mediocre reception here. Remember earlier candidates we were talking about oddity tech, k k kenview, blow as well. 800 tech unicorns sitting out there. You can go public at a lower valuation. We talked ability lower valuation and we talked about the need for haircuts and issues like that. Stay private, continue to see funding. Good luck. Might be able to get it. Its going to be more difficult. Or you can merge and deal with the fallout from merging. I think a lot of people are going to do that if we continue to see this higher rate mark. You were talking about birkin stock but theyre not the only one. We were talking two or three weeks ago, a laundry list of companies throughout, taur ro, the car sharing company, rock, the marketing company, flexport management firm, shine shein, waystar. Stripe, canva, fanatics, sitting out there. If the rates keep going up, guys, if we see the 10year go from 4. 5 towards 5 in the next month or so, and the s p is down 3 or 4 , its going to be a lot tougher for some of these companies to move forward. Thats my main concern right now. Guys, back to you. Bob, you bring up a good point about overall valuation and that was a key part of some of the Sell Side Research<\/a> notes. One said the cart is full insinuating instacarts valuation has had its full value at this point in time. The road shows seem to be going well. All price at the high end of the range, above the range, two boost their ranges. You have this unbridled demand that you need to give shares to, you can do so at a higher price. So, you know, was there a retail component, do you think, that they were banking on that didnt come through here . What is kind of the missing piece of the puzzle this time around that, you know, leads to this gap that were seeing in terms of pricing and then the aftermarket demand . Yeah. The two things are pent up demand that existed and we saw this with cava where 22 goes to 42. What happened here. Thats an issue. And the second is the float. David is right. In the old days, and im going back to the mid 2000s, you used to have floats 20 was very typical. 25 . Nowadays were 10 and below that at this point. I was joking before. Im waiting for the 1 float to come out and thats how you control the price. You have a little pent up demand with the controlled float and you get these one day pops. Look what happens. Everything happens on the first day. Even in the first hour you get the pop and they sell into it. Look at the price action on instacart. People are going to catch on to this. You think the average viewer at arm first day was 60 since the average price. Where is it now . 51 or so. Thats going to be noticed by people and its going to be harder to get those kind of first day pops. Thats why i think theres still pressure on valuations for these companies. Yeah. Bob, thank you. Bob pisani. Quick programming note by the way as we take you to a quick break. Were officially under a week away from cnbcs delivering alpha investor summit. Thats where the streets top investors and Business Leaders<\/a> will break down where they see risk and reward. So scan the qr code or visit r reevents. Com delivering alpha fomo. 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<\/a> 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<\/a> objectives, risks, charges, expenses and more in prospectus at invesco. Com. Is it possible to fall in love with your home. Before you even step inside . Discover the Magnolia Home<\/a> james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. What do you see on the horizon . Styles and textures. Uncertainty . Or opportunity. Whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined Risk Management<\/a> are needed most. Drawing on deep expertise across the worlds public and private markets in pursuit of longterm returns. Pgim. Our investments shape tomorrow today. Hi, im john and im from dallas, texas. My wifes name is joy. Weve been married 45 years. Im taking a twoyear business course. Ive been studying a lot. Ive been producing and directing for over 50 years. Its a very detailed thing and the pressures all on me. I noticed i really wasnt quite as sharp as i was. My boss told me about prevagen and i started taking it. I feel sharper. My memorys a lot better. It just works. Prevagen. At stores everywhere without a prescription. We mentioned those remarks of uaw president shawn fain. To phil lebeau with the latest. Carl, we are going to see more strikes at noon today and the strikes will be for gm and stellantis. At their parts an Distribution Centers<\/a> around the country. All of them. 38 of them. Located in 20 states will walk off the job at noon today. The interesting decision here to do the parts and Distribution Centers<\/a> as opposed to an Assembly Plant<\/a> or a Major Component Assembly<\/a> shop is that this is one of the areas where they believe they can inflict some pain on the automakers. Because if you dont have the parts being shipped to the dealers, to other locations, that really limits your ability to continue manufacturing and filling out your entire supply chain. So again, were looking at 38 uaw represented parts and Delivery Centers<\/a> for General Motors<\/a> and stellantis collectively 38 in 20 states where those workers will be walking off the job at noon. One last note as we reported earlier, carl, shawn fain did talk about progress being made with ford. Thats why we have not heard about more strikes impacting ford. He didnt he also went to Great Lengths<\/a> to say theyre not all the way there with ford. Its not as though, you know, we expect a contract to be reached within the next couple days, but that is the update regarding the uaw and further strikes today. Guys, back to you. Phil, what a are you hearing and has he mentioned about what are some of the key sticking points that remain with ford theyre trying to work through . Sounds like theres been Real Progress<\/a>, but how far of a gap are they on everything from, you know, pay to benefits and so forth . Hard to know how much the gap has closed over the last week, leslie. Certainly there is still a gap when it comes to the percentage pay increase. Ford is at about 20 over the next 4 1 2 years. The uaw would like it to be in the mid 30 , close to 40 . Lets see how that gap changes as negotiations continue. And theres also the discussion of a couple other areas in terms of cost of living and tiers. A lot of that work he called out and said weve made Real Progress<\/a> there, but he did not say with any of the areas where theres progress he did not say thats good enough. Weve gone far enough or theyve gone far enough to meet our demands. Phil, i guess the ball is in the white houses court and see if we get reaction to the offer from fain. Well come back to you soon. Phil lebeau in michigan. A news update wil silvana henao. Good morning. Heres your cnbc news update at the hour. New jersey senator bob menendez has been indicted on federal bribery charges. The charges come after a year long corruption probe into whether the powerful Senate Foreign<\/a> relations chair and his wife improperly accepted cash and gifts. Menendezs office did not immediately nbcs request for comment. This is his second indictment since first elected to the senate in 2006. His other trial ended with a hung jury. Ukrainian Officials Say<\/a> 13 people were injured in a russian attack on a town near ukraines Eastern Front<\/a> early friday. The attack came as ukraines military announced its forces successfully hit the headquarters of russias black sea navy in crimea. Russias Defense Ministry<\/a> said one service man was missing after the attack. And the Biden Administration<\/a> announced new regulations that would wipe medical bills from credit reports. The Consumer Financial<\/a> Protection Bureau<\/a> estimates one in five americans have medical debt on their credit reports. Lower Credit Scores<\/a> can limit options for housing, loans and credit cards. Carl . Back to you. Thanks. Turning to the week in crypto, after selling off following the feds decisions on rates. Some point to growing risk aversion across the street, of course, and strength in the dollar as headwinds for a rebound. Second largest crypto currency ether some pressure in the red as it continues to under perform bitcoin. Up 60 versus ether up more than 30. Apple launching the newest iteration of the iphone today. Will it overcome three quarters of declining sales. Quk t susne. T sawonhetreet is back in two. 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> a reality. And driving the world forward to a Greener Energy<\/a> 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. Busy morning regard the fed. Steve liesman with more news. Another fed official speaking after the meeting. Fed governor bowman saying she expects it will be appropriate to raise rates further and hold them at restrictive level for some time. She goes further than Susan Collins<\/a> from boston who said they should be thinking about it. Bowman is more positive that it needs to be done. She points right to the surge in Energy Prices<\/a> saying the continued risk Energy Prices<\/a> could reverse the progress they have seen on inflation. She has seen progress in lowering inflation. Inflation is still too high she says. Getting to the discussion we had at the top of the hour, as if she was listening. Governor bowman says strong Balance Sheet<\/a>s by households of consumers, along with credit from the nonbanking sector limits the effectiveness of Monetary Policy<\/a> on the economy. The economy has remained strong including growing gdp. Consumer spending remaining robust. Other sorlfrtsz things like tha and solid job gains as well. What you see so far, two of the fed officials speak, more fed speak coming up and they are firmly backing both the policy statement and also backing the forecasts that was out there which was really what spooked markets, that hawkish forecast. No doubt it definitely gave the markets pause yesterday as we saw. Steve, thank you. Apples latest iteration of the iphone hitting store shelves around the world today. Take a look at tim cook earlier this morning. Hes outside what was the Flagship Apple<\/a> store outside the old gm building in manhattan. This as the tech giant faces continued some perceptions of slumping sales of the device. Steve was there with cook this morning and joins us with some details. Steve . Hey david. Theres still lines. I got here before 5 00 a. M. Today and there was a line around the block and its still around the block. Look, its all cheers right now, but the pressure is on for the iphone 15 lineup to return apple to sales growth after three quarters in a row of declining sales and potentially and likely the Current Quarter<\/a> a fourth in a row of declining sales. Comps will get easier next year but everyone looking at the pro lineup of the iphone 15, especially the pro max which is 100 more than it cost a year ago. I talked to the first guy in line actually. He said hes here to buy the pro max because he wants the latest and greatest technology that apple puts into the pro phones that ends up trickling down to the lower models in the years to come. Thats what analysts are looking for. Bofa out with a note this morning saying wait times for the pro max in the u. S. 29 days if you try to order online. Thats almost a month of wait times for this. Early signal that demand is strong there, david. Always curious, any comparison for the lines today versus what you have seen in the past . I know its a different location than you may have been at the past. Yeah. Its about the same. I was here in front of the fifth avenue store in new york a year ago and very similar looking line. Its not the best read on demand, the lines, and also this is a flagship store. Were in the middle of fifth avenue in manhattan so its going to attract more lines and attention and tourists and so forth than a store in a mall. Online orders are a big deal. Thats what all the analysts have been tracking and we should get more sales data coming after this opening weekend. I would note china bofa saying in their note today, china sales looked the demand is not as high for the pro at least based on this preorder windows that theyre looking at and then theres another note also by ubs note saying that early demand is down. Concerns there as we see some renewed competition from huawei over in china. David . In fact, were going to get to that with our next guest. Thank you. Steve covac. Stick with apple. Our next guest says, quote, unlike years past apple may not be able to rely on strong iphone sales to drive its share higher. That is tom forte who has a hold on the stock. 180 price target. Explain yourself. Why arent you more positive in terms of what this will mean in terms of driving the stock prices . Basically in years past you could count on the iphone, still the most important product as far as largest percentage of sales for apple, to, you know, drive the stock higher. I dont think youre going to see that this year. They have multiple challenges. One of them being the soft economy in china. You think of china is about 10 of apples revenue. The good news is youre seeing some pretty significant subsidies coming from the wireless carriers. They still want you to get a 5g device, but i dont think were going to get that sustained lift in the stock from the iphone this year. I dont think the titanium is a big deal mover, nor is essentially the apple version of onstar, things of that nature. They have the de facto price increase because theyre not offering the 128in mega bit pro max that can help a little. But again, connect it to are you saying its because demand is not going to be what people anticipate that the stock wont move up . Correct. Okay. Just want to make sure. You mentioned a number of things there. The Quarter Sales<\/a> after the launch. So correct. Waze it thats not enticing consumers then in your opinion . China is a separate story and very much unclear, i would add. We had that potential government ban, although again, there its still unclear. What do you think is not going to motivate people to upgrade at the same rates they have in the past . Yeah. I dont think theres a lot of incre mentality between the 15 and 14. We still have a challenging macro. However, apple has performed well in a challenging macro. Not a lot of newness. Still persistent challenges in macro. Apple pulled a lot of levers already. Theyve done the buy now and pay later, 50 north of 50 of their iphone sales are in installments. Thats not low fruit to be picked. You mentioned the carrier incentives being significant here. Is that key driver of demand . Are they different than theyve been in the past . I dont think theyre different, but i have been concerned going into the launch that you would see the carriers scale back the incentives, but i think that thats very encouraging that youre seeing still robust incentives from the carriers and that, you know, maybe that will result in better than expected sales for apple, but i had been concerned going into the launch but now im not concerned, but i dont know that that will be enough. Tom, finally, you know, one of the bull arguments the company would make is that iphones that are traded in do retain their value better than android and those get sold in the secondary market and that in turn sort of amplifies the installed base and leads to services over time. Is that a material part of the story . It is a material part of the story, but i would say theres not a lot of incre mentality there, meaning i dont think the 14 did a better job holding down into the 13 and 1, hthings of that nature. That is a reason that consumers are fond of their iphones is that they do retain their value generally speaking and makes it less expensive to upgrade to the lest next generation device. I dont think theres incre mentality that will drive the iphone 15 sales. Tom, thank you. Thank you. Real estate stocks in the red after the fed signaled a higher for longer position this week. O opendoor and redfin down double digits since monday. More on the markets with Piper Sandlers<\/a> investing chief next. Were back in a moment. With comcast business. It is. Is it possible to help keep our Online Platform<\/a> 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. sfx stone wheel crafting the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. It still does. What can you do with spy . Welcome back to squawk on the street. The s p and nasdaq on pace for their worst quarter in a year. The markets are in the green today. Our next guest believes a broadbased upturn in earnings is unlikely. Piper sandlers chief investment strategist joins us now. No upturn. Does it stay flat or down turn . What do you think are some of the key issues at play for earnings . Yeah. You know, i think theres a lot of debate around are we needing a recession or not, in a recession or not . Theres equal reason to look at the other side of the story and say are we in a recovery or not . Right now, neither of those situations are quite apparent. And i think thats why weve seen the market really reward the higher quality, larger cat, more visibility, better Balance Sheet<\/a> companies this year and why youve seen the bifurcation. I think that will continue in the market until we clearly have a soft landing, which is a broadbased recovery in the economy, or enter into a recession which is usually signaled by rising unemployment. You have this call for 2023 and the bifurcation youre referring to has to do with the largest stocks and the smallest stocks. But how are you thinking about things in terms of valuation. The magnificent seven came down a little bit but a lot are looking at the key driver for this years broader index performance. Are you concerned that maybe it would be the wrong time to be getting into the Bigger Companies<\/a> that have been a key driver of market activity this year . Yeah. I think this year the market is up and the indices are up and those stocks are up for two reasons. The earnings have been pretty good and weve seen a big amount of multiple expansion this year from last years down turn in equities. The way i look at that, we priced out a lot of risk around inflation, around the fed doing too much, and so weve kind of removed a lot of risks and the companies that maintain earnings momentum are doing well. With regards to valuation, i think thats what that reflects. What i would be concerned about is not necessarily the valuation levels of these stocks or any stock individually, but try to understand what drives these valuations and where those drivers are going. Weve seen the soft landing hope a number of times this year pick up risk assets and when thats played out you see cyclical stocks do well and then the last, for example, six weeks theyve given that momentum back. Im more concerned about the drivers of valuation and investors pricing in and out of risk. Well continue to see the back and forth. How would you characterize the current risk environment right now . I think it was Morgan Stanley<\/a> that that characterized it as fragile. And bank of america reporting outflows and on pace for one of the worst weeks weve seen in months this year. How would you characterize just the overall sentiment in the market right now . I think its very uncertain and were seeing the narratives shift really quickly back and forth which is most evidence in the most cyclical parts of the market. And, you know, when i look at the through our lens, we see a lot of asymmetric Downside Risks<\/a> in the economy and thats where our conviction lies. The odds of getting any broadbased recovery, which would provide you that sustained broadbased market, especially led by the more riskier is Small Cap Value<\/a> parts of the market the odds are extremely low with the tightening cycle, banks tightening lending standards and so, yeah, thats kind of how i see it. Piper does a lot of good consumer work. Tough to get bank ceos to say anything negative about the consumer. More money than precovid, delinquency rates rising, no worst than 19. Is there any what would be the most aggressively positive argument you could make about the consumer going into year end . You know, i think the consumer and the first part of the year i think whats overlooked in this view that theres been a lot of resilience in the consumer we had ahuge drop in Energy Prices<\/a> last year in the back half of the year that has a lagged positive effect on the economy. Now thats going the other way. I think when we talk about aggregates whether the stock market, the consumer, or the economy, its there is no aggregate and no single. Were seeing variation underneath the surface. I think some consumers are doing well and some consumers are really struggling and we see that in the confidence data and the stocks. We remain underweight is mort lower quality consumer areas that are going to be impacted most by higher Energy Prices<\/a> in the last several months and higher Interest Rates<\/a>. We dont see everything go in one direction unless we see a recovery, and then everything broadly improves, or a recession and everything broadly turns down. Were in the backdrop neither are true and its mixed. Looking beyond the aggregate data, lots of bifurcation, the consumer, the market, so forth. Thank you. Thank you. Coming up at 11 00, more on the markets with citis chief economist who says to expect another rate hike still ahead. Well talk about why in the next hour of squawk on the street. Were back in a moment. To me its important to celebrate the hispanic heritage month. Diversity matters a lot. This cannot be the flavor of the month. Its something that we have to do on a three basis. We as leaders have the responsibility to lead by example. For me, its not only the right things too, driving diversity and inclusion, it drives the right business outcomes. Good night hey corporate types. Would you stop calling each other rock stars . Youre a rock star. You are a rock star. No more calling coworkers rock stars. Look, its great that you use workday to transform your business. But it still doesnt make you a rock star. So unless you work with an actual rock star. Hi, im ozwald. Hello ozwald. Pam, you are a rock i wasnt going to say it. Ever since she was a little ki, all maria wanted to do was bak. Im maria alvarez, owner of marias cakes. And im axel, proud to be her state farm agent. Her baking superpowers have brought sweetness to our community. I make delicious cakes to make special occasions even better. Maria doesnt just bake; she also creates opportunities. Small businesses like marias, open doors for communities to thrive. Support your community. Support small business. Is it possible my network could take my business to the next level . It is with comcast business. Powering all your devices with gigspeed wifi. And you get fast downloads and uploads. Pick it up pick it up oh we got this because its powered by the next generation 10g network. More speed for your business . Its not just possible. Its happening. Get started for 59. 99 a month for 12 months. Plus, ask how to get an 800 prepaid card with a qualifying internet bundle. Comcast business, powering possibilities. Raising royalty fees for some franchisees. Kate rogers joins us to explain why. Good morning. Good morning, carl. Mcdonalds is raising its royalty fee from 4 to 5 for franchisees who open new locations in u. S. And canada. The first raise in nearly 30 years. The higher fee, known as a service charge, will affect new franchisees or buy company locations. It will not impact those with current footprints or those who by a location from another franchisee or restaurants transferred between family members. Mcdonalds president saying, were not changing services, but we are trying to change the mindset by getting people to see the power of what you buy into when you buy the mcdonalds brand, the mcdonalds system. They say it has not kept pace with the brand and mcdonalds are at alltime highs with cash flows up 35 in the past year. The business has remained strong and a top position pick in a potential downturn. Same store sales up 10. 3 in the most recent quarter. What comes next is how franchisees react. They run 95 of mcdonalds locations. They have butted heads with corporate. We have been reporting on franchising structure, as far as putting in place a new grading system and changing terms for new lease owners. The stock is just fractionally higher this morning. Back over to you. Kate, im curious how these royalty fees compare with other restaurants in the industry. Yeah, leslie, i talked with btig this morning. We wendys is around 4 . Taco bell, 6 . Wingstop at 6 . Pizza players, dominos at 5. 5 . This rate is competitive. Although some numbers we just laid out are global. He also added that for mcdonalds, rent is a high single digit percentage of sell and there are ad fees and Technology Fees<\/a> on top of that. He was saying to me he feels the brand is taking market share and they want to participate in the upside, which makes sense here. Kate, thank you. Thank you. Taking a look at a couple of movers we havent gotten to yet. Microsoft and activision getting much closer to closing that transaction theyve been waiting to close for quite some time. The opposition of the uk and trust regulator of the cma is no longer an impediment. October 6th is sort of where some people are working with. Could be later. Could be another week or so. Its 95 bucks. You can see whats happening with the stock, moving ever so closer to that 95 level. As we pointed out in the last hour of squawk on the street, amazing what microsoft and activision have been able to do in overcoming what appeared to be an unremovable impediment to that transaction, namely the cma saying no. But they have been able to reverse that decision. Obviously, are doing astreaming games, and it is being looked upon favorably by the cma. No lastminute curveballs . I dont think so. If you ask bobby codic, he would probably say, ill see it when i believe it. We start counting down the days. Perhaps as soon as october 6th. Followon from yesterday, tko group, the u. N. Member of wwe and the ufc, 51 owned by endeavor. Down yesterday sharply. Down again today on that new deal in which smackdown is going to nbc and nbc properties, usa network, some specials on nbc, the market and investors simply did not like the increase in terms of where they ended up paying for it. 1. 5 billion. They were of the belief it would be higher and perhaps they were led to believe it would be higher. Thats only a drubbing. Only a week out from the official listing of it here at the nyse in terms of when it began trading as a combined company. But down another 2. 4 today. I think youre right, that the valuation i was was a bit of a disappointment. That did have pressure yesterday on formula one, which is liberty media. Today, though, that stock is rebounding a bit. The concern about sports rights. The leverage was supposed to be coming from the union of wwe and ufc in terms of what they would be able to get from the distributors. A lot more squa oth re raight ahead. Dont go anywhere. I wouldnt have my business if it wasnt for my website. 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Switch to verizon, you can trade in any iphone, and get the new iphone 15 pro on them. vo trade in any iphone in any condition for a new iphone 15 pro on us. Only on verizon. Good friday morning. Im Carl Quintanilla<\/a> with leslie picker at post 9 of the new york stock exchange. Citi says expect maybe another rate hike in november. The chief economist will tell us why in a moment. The uaws next deadline is one hour away. More walkouts appear to be on the way. Were live in detroit next. Big upgrade for energy from jpm this morning. Well talk about the bull case on oil getting maybe to 150. Topping the tape for us this morning is the market showing signs of being oversold . 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