Is waiting to see, even when you look at the market it looks like the 10year is sitting above 4. 3 the 2year well above 5 then youve got crude oil prices that are creeping closer and closer to 100 actually this morning theyre off by 1 , back to 22. It was around 93 yesterday. A lot of concerns over at Goldman Sachs. Theyre suggesting they they 12 months from now the price will be 100 for a barrel of wti. Weve been talking about this it would filter through, but the you know, it depends on how you believe. Theres two sides to everything, it seems like. I could debate either side it does hurt demand. Were going to be about 4 a gallon and that may cause people to rein in spending on other things its deflationary and inflationary i could see both ways. It works its way into every single thing from items that have to be delivered to manufacturing. The one thick we did see from bank of america, remember we had them in and we talked about what they saw over the last month much more went to energy and it came away from goods. Zero sum gains when you argue with the government or zero sum about it with certain people there are zero sum things about what you have per month if x amount there are people who shop i go to the Grocery Store every day. I dont know why. Because you like it. I dont like pushing that cart because theres a lot of congestion and trachlk i use a thing. A basket. I watch them. Im like, theyre going to be at the checkout line for an hour. They have 200 to to a weeks worth of shopping. As far as the yield curb, remember we got unsettled three months ago we had those hot numbers it seems like basically we went up a quarter point so you have to say its been kind of orderly, havent it . We were probably at 3 4 on the 2year now were on 5 its been orderly, yes, and if you think the fed is going to pause this time, which is the overwhelming consensus, but when you start looking at the mortgage prices at near 8 mortgage prices at 7. 5, 8 they dont tell you thats why the market has not given back some of the early meetings. Youve got bank of england, bank of japan. In england, they saw inflation that was below expectations, but still north of 6 . When you talk about stopping and theyre north of 6 , its all different. If you subsidize unionization, long term a lot of costs are going to go up for businesses in the United States, if you subsidize it. With taxpayer money, you mean yeah. Subsidize it you cant blame it on unions you see whether its green or chipped or whatever it is. Why cant i have some if im a worker spread it around its going to make it less con pettive than it was before it does raise costs. It would always be good to have markets set price, which it rarely does. The Federal Reserve has been setting praises for too long. The squauks planner. Whos in charge . I dont know. Don i think its dave evans its thing that deserve to be on there. The fed with its latest rate at 2 00 p. M. Eastern. Most lick likely hes not going to raise as far as earnings, were going to hear from General Mills before the opening bell. After the open bell, fedex and kb to avoid a strike, which would have been on boit suit of the border the Canadian Union then plans to use that ford deal as a framework for negotiations with gm and stellantis. In the u. S. The Biden Administration is no longer sending key officials to detroit this week to help broker a deal between the author mane. He said hoe would is sem them. The uaw mutually agreed it would be better to speak virtually via zoom uaw president shawn fain said he does not see a major role for the white house. The other morning we had an official only. She kind of snapped when i said the white house is sending so peek this is where the rub came in because sean feign has been talking about it President Biden has called himself repeatedly the most laborfriendly president in the United States and he still fws p. They dont want him involved and trump a republican might g and start walking the picket line as a populist, that would not be out of the question to see something those. Michigan was an important sbing state and trump performed well. She kept using the word fair. We want everything to be fair. Egalitarian . I dont know you need a fair opportunity. Everybody keeps i know. If the ceo keeps making too much its like taxing the rich one ceo making 20 million isnt ee equivalent to billions of dollars. But the objects matter. When you see people on the nrlb, then you know. Its all appointed. Right which is why voting matters. Lets get to this wicks big Ipos Instacart finished high, still above the ipo price. Leslie picker joins us with more how did it go . Its kind of an odd and co common thing its still higher than the 30 per share ipo price. You can see now down above 5 , hovering 2 above the ipo price. So what happened there wasnt as much investor conviction at the 2 share opening price and willing buyers came in at a lower price its kind of like what we saw with arm since then arm has tumbled at least 4 in the three subsequent days from its ipo even though arm and instacart are two separate businesses. It certainly didnt help perhaps the biggest indicator of whether it can truly open or not is clav owe. Its set to debut today. Its part of a s. A. S. S. Model. Well see if it has stronger support than either arm or instacart, guys. This is really important. We had alexis oh on yesterday. We asked if it was indicativend h sarkd well see. Thats funny as everybody is watching it. F free issue anances are really important. Yeah. Then it quickly turned south and i think its a fact the prices have been bullish, boosting the range all of these ipos have had characte char characteristics. I think its too soon to tell. They had people who invested for 11 years who were looking to get out of some of those flip some of their shares as well thank you very much. By the way, folks, instacart founder Apoorva Mehta will be with us at 7 30 a. M. He started out doing the deliveries himself even though he didnt drive, he would take an uber coming up, were going to get the fed decision later, a crozer look at the futures am the begin if a deal isnt reached, you could see this sprefrp youre watching squawk box on cnbc announcer this cnbc program is sponsored by baird. Visit bairdifference. Com ance the fan experience, but to advance how the game is played. Nows the time to see what americas largest 5g network can do for your business. Old school wisdom, with a passion for whats possible. Thats what you get from the Morgan Stanley client experience. You get listening more than talking, and a personalized plan built on insights and innovative technology. You get grit, vision, and the creativity to guide you through a changing world. Loving this pay bump on our allowance. Wonder where mom and tdad 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 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 today. A 2 00 p. M. Fed meeting. Joining us now, director of global macro at fidelity investments. Reading all your comments, i was nodding and agreeing with everything, but, you know what it got me absolutely nowhere in agreeing with you in terms of what i would do, and a lot of your questions are almost theyre not rhetorical theyre almost like questions of life like we need to to know what the feds going to do, we need to know what theether the curre policy is restrictive or not we dont know where inflation is headed we dont know. A lot of times after the fed gets to a certain point, they need to wait to see what the lag effects are. We dont know. Is it restrictive . You dont have the answer to that. We dont have i mean it looks restrictive, right we look at the tips curve. Its about 2 1 4, 2 1 2, as far as the eye can see if its 1 , you add inflation to it the fed looks to be restrictive. Then you look under the hood you look at the liquidity indicators, the reverse repo and tga and thats been going sideways for a year and you look at financial conditions. Thats been going sideways for a year liquidityishes havent gotten that much more restringctive ina while. The tips market hat gone 2. 25 where we have another labor strike and the pendulum is beginning to swing around. It may not be as restrictive as we all think. With that in mind, you try to figure out if you like stocks or bonds. I point this out all the time. With bonds, you know, if you look at 4 , all right, its okay, but if Interest Rates are headed up, youre going to lose principle. Youve got to figure out your duration if you stay short and Interest Rates come down, you cant reinvest so either option stinks to get a grabby 4 in the first place it would be better to buy a 2. 5 yielding stock in a company that has great prospects, wouldnt it for the 60 40, i still like it warts and all i think the bond market looks squhat compelling here. For safe money, for a base in your portfolio. Yes, exactly because, you know, lets take the barclays aggregate index. It has a duration of six and a yield of five. If yields go down 100 basis points, if that long elusive recession ever comes, you make 11 . Six plus five. If it goes back up, you lose 6 but only lose 1. But the risk rewart,ve phen the yields go up or more is pretty compelling i would take those odds in the stockmarket any day of the week. Especially when you think were in the twilight of a secular market you might prefer stocks to bonds on a risk reward basis. We got a 7 annualized return in 2021. Thats likely coming down. If inflation does become more structural at 3 or 4 instead of two, thats going to knock valuations down, so i do think theres a valuation headwind that doesnt mean the market goes down. It means earnings have to do all the heavy lifting. Its mostly a matter of setting lower expectations because we did get very handsome double didnt returns for quite a few years since the financial crisis. All right i dont know you gave me a lot, but none of it is that great. Investment is making real time decisions with imperfect information. Testing our assumptions is something we all need to do, and the inflation effect is what we need to do. Risk management it would be nice to hold onto what you get and not blow it on returns. I understand youre right good advice, thank you thats wifi dealts got like a gazillion dollars. And then some. And then some. When we come back, much more on the fed decision. In the 8 00 hour well be talking request the wall street journal chief correspondent nick timiraos. And also the up yat on the brain implant clinical trial. When can i get that that first time you take a step back and see everything youve accomplished. I made that. With your very own online store. I sold that. And you can manage it all in one place. I built this. And it was easy with godaddy. I am doing this. With a partner that puts you first. Start for free at godaddy. Com sell powering Sustainable Growth in a changing world. 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They were granted early approval back in may and the company has received approval from the hospital where it will perform the first surgeries, but it did not name the hospital. I mean rockets and evs. Brain surgery. Neura links to use thoughts to control movement. I didnt realize they were looking for patients with als or spinal cord injuries if youre asking for volunteers for a brain implant, you have to have a need. But its so amazing. In walters book, when we run out of planet, he wants to have a new place for humanity to be able to move in addition to cars. Cars, yeah. And the ability to shoot rockets up and reland them, which makes it more affordable. Remember what we used to on the simpsons, hawaii, i have an ev, it goes zero to 60 in 1. 9 seconds or something its pretty cool. Phillip morris is considerig actions in its push around health care. The tobacco giant is looking at options for pharmaceutical units. Its part of a plan to diversify from cigarette sales which, i dont know im like j. R. Ewing at this point. I see someone smoking, im like what is the story . Who still smokes in the United States fewer and fewer people. Like a handful . But they got addicted to it. Stop. Im just telling you stop. Coming up, the latest on the autoworkers strike well tell you which factories the union can target if a deal isnt made ja a look ahead at winners and losers s announcer winners and losers is sponsored by state street global advisers. 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 . Every day, businesses everywhere are asking what is it possible . Spy . With comcast business. It is. Is it possible to use predictive monitoring to address operations issues . We can help with that. Can we provide health care virtually anywhere . We can help with that, too. Is it possible to survey foot traffic across all of our locations . Yeah absolutely. With the advanced connectivity and intelligence of global secure networking from comcast business. Its not just possible. Its happening. Good morning and welcome back to squawk box live from the naz sdaq and Market Square it could all change at 2 00 and the outlook in terms of f how the fed views the near term and medium term. Nasdaq is up a little and the s p is up by 6 points now. Phil lebeau joinsous which factories could target for strikes if a deal isnt reached by fridays deadline phil, good morning. If its not reached i dont mean to correct you on air. If there is not an agreement i shouldnt say an agreement serious problem by noon on friday well talk about this in a little bit it may announce further strikes. The most damage would be those in terms of finally assembly are the biggest in the United States and those that make fullsized pickup trucks or the high end suvs in the case of General Motors were talking the Ford Kentucky plant and gms arlington plant and then stellantis has its truck plant in sterling heights, michigan these are the biggest plants in the earlies of volume. Not the biggest in terms of employment, but theyre pretty darn close to the top. The uaw is not showing any indication that there is enough progress that we could see this ending any time soon in fact, shawn fain says they want to see serious progress by noon on friday in order to not call for further strikes if they dont see that, they may call for a strike at one automakers, two awe though maker. That remains to be seen. As you take a look at general mo motors it remains to be seen. If theres another strike, its figuring out how mump they can keep production going at the koois plant. About 2,000 workers are expected to be laid off this week because they cant get stamping in st. Louis where the union is on strike one piece of news last night, ford reached an agreement with the uaws counterpart in canada. They have reached a tentative agreement. Ford dodges a strike in canada now theyll look at gm and stellantis who have facilities up there as well. Did the deal in canada look like anything the uaw we havent gotten the full detail yet i think they were not being quite as aggressive as the uaw they talk to each other. They understand the dynamics here also you have to understand canada has a much smaller foot print. Still important, but a mump smaller footprint. Much smaller footprint meaning its not going to cost as mump . Its going to be costly, oh, absolutely, 100 i think the uaw is pushing for a far richer deal than what you see. Thank you well see you in a little bit. In the meantime our next guest estimates the strike could go on for 45 days which could lead to more strife. Colin. This is different than what we had seen in the past theyre striking all three at the same tame. 45 days if it lasted that long, would what but catastrophic . Youre absolutely right its never been seen before. Right at this point, its kind of an underwhelming start. I think phil is right. The next wave is coming friday youre not cutting out the volumes. But fullsize pickups could be twothirds of north americas profits. Theyre hitting them where it really, really hurts it could escalate in the next several weeksful you didnt start with the most profitable vehicles, but it could be the next profitable. What does it mean if they strike for 45 days 2 2. 5 billion to 3. 5 billion similarly for stellantis its big dollars what does it mean youre talking the wage demands are 2. 5 to 3 billion. The offers they already have . The demands they have the offers they have today are ore a billion dollars that they put out the 21 wage increase. Theres a long way to go theyre talking about the fixed costs too. Thats the real painpoint for the automakers fords guidance is 10 or 11 billion. Material numbers for these companies, this is why theyre fighting. 7 or 8 are you taking into account 32 hours . Youre not taking those into account. You hear shawn fain say its a small percentage what do you call that . Disas disassembly . Margins in the industry are pretty thin. A percent here or there is very material so if youre going from 6 to 8 , youve cut out a ton. You say the co oes are talking 6 million give them a little less, four or five wouldnt that be better . How about this some of these are subsidies, and if i were an autoworker to get the money, the tax credits, you need to pay prevailing waged its involved in you being able to take the money from the i. Rch r. A.