Tenyear note at 4. 556 . Twoyear note at 4. 927 . As you imagine in the energy world impacted by this. Wti crude is not impacted much. Check out crypto. For you trying to watch what the markets may do over the weekend as people were focused on bitcoin since it was trading as the strikes were taking place. 6 66,609. What was the low, mike . Low 60s. I was actually on twitter trying to understand the maneuverings because of the thesis, if you will, around what bitcoin should or should not be in this moment. It doesnt conform to anything lyinearly. This was pretty well telegraphed. You have the broader context which is typically an expected potential escalation of geopolitical conflict is not the thing to really drive the next weeks and months in markets. I do think markets are dealing with other stuff. Right now, a little bit of pressure is taken off because doesnt look to spiral. Oil is in the lied. Lead. The other part of it is were only getting back at the open if this is how it stands, a third of fridays loss in the s p. Leslie picker spent time with jamie dimon and one of the things he said in the annual report two weeks ago was how much he felt like we were on the precipice in a way we hadnt been. You were right at the beginning of the war i go back to what happened on october 7th. Yeah. It did. You still have three weeks where it was weak after that. It wasnt driven mostly by that. Oil seemed to react this way. That begs the question to your point about jamie how the markets price in changing world order and can they do so despite the fact so many stocks driving the market are algorithm based. I go back to specifically tell me what the market is supposed to be pricing . The middle east is volatile and it is a hazardous place and awful things going on. What should the markets be taking from the events over the weekend today that is incremental to what we knew on friday . If you look at it that way and all of the other factors that we are dealing with like the repriced fed and all the rest of of it. If it creates the supply jolt and oil going up and the flip side of how much spending. If you believe this actually was going to spiral into a war, the amount of spending as a result. Sure. Thats true. Thats always a bit on the back end as another consequence. Lets get to the reaction in washington to irans attack on israel. Eamon javers is joining us with the latest details. Reporter good morning, mike. The white house said this weekends iranian attack on israel was rebuffed by israeli and u. S. Defenses. Most of the work was done by the Patriot Missile battery over the offensive over the weekend. Because they were able to destroy most of the drones and missiles fired by the iranians, israeli officials said cas casucas casualties were limited to one, just a 10yearold girl, injured by shrapnel. This raises the prospects of the wider middle east war at the time the u. S. Is urging a ceasefire in the gaza strip. President biden returned to the white house from delaware on saturday and monitored from the situation room in realtime. President biden urged House Speaker mike johnson to pass a military aid bill this week to support israel and ukraine. The speaker was publicly noncommi noncommital in the media appearance yesterday. We will see how it goes this week. The iranian attack is the response to the israeli strike in syria appears to be over for now, but the situation is tension and not clear if the forces will retaliate or if there will be further strikes. Back to you. Eamon javers, thank you. Joining us now is sylvia jablonski. Siylvia sylvia, we were chatting how we have not experienced the flight to safety trade and safer have trade had it not been so clearly telegraphed on friday. What do you make of the premarket activity this morning and do you agree with mike that the market has other things that it is focused on right now . Good morning, leslie. I think there are a couple of things going on. First, because of the news going into the weekend, we saw the flight to safety and pick up of metals and gold and oilrelated products. I expect that to happen. It will not propel forward, but there is enough to hedge and enough of a good reason to do it. To mikes point, there was a major strike this weekend, but prior to that, there always is instability in the region and there has been for a while. I dont think people necessarily panic or come out of Growth Stocks and high risk stocks and go completely to safety. You will see pickup in vix or alternative metals in the near term. Do you think the markets may have overreacted a bit on frifriday especially to earnings because of the overarching concerns or is the Market Pricing in earnings so far . What does that portend for the rest of earnings season . It feels like it did with the russiaukraine news with the stark reaction out of the gate and things slowed down. I think that there was a bit of an overreaction. That bodes well for earnings season. I expect earnings to look good coming out of tech. The bar is pretty low. Although, the expectation is hyped up with the low bar. And in terms of what we have seen in the last few weeks, people are hedging and picking up energy and metals. Tech has fallen the last three weeks. For an investor on the sidelines, microsoft and google and amazon and chip names have fallen off the alltime highs and we will start to see the cash flowing that way. Of course, some of the stocks sometimes act as a defensive destination in the market. Sylvia, the question is if you go back a few weeks, it seemed like there was almost nothing pushing against the further advance in the market. You have the economy out pe performing and the fed cutting into the good economy. Bond yields were tamed. A lot of those were complicated at this point and we only have a 3 pullback in the s p. How do you think about the risk reward looking ahead . I think it is a good time to come back into the market and as you said, we might not necessarily get those three rate cuts we want. The fed is uncertain with the geopolitical issues hanging over us. All of those things were more or less there. In terms of rates, earnings have within strong. Companies have performed. We have seen gdp growth. If the fed cuts two over three times, it doesnt matter much. Were there. Maybe were not there in the next couple months, but i think were going to come to a point where financial conditions ease. Although, they are not that stringent. You can see a good case to come back into stocks. I think sitting in the treasuries for the long term with the 6 trillion on the sidelines means stock markets with the nasdaq or s p 500 have proven you are better off in equities. Barring any major reaction in the middle east that is beyond what we have seen, the markets are ripe for the year you are buying chip makers, nvidia and amd and adding to tsmc. Why are those areas you want to add more money . Thats my point of interest. Generative a. I. And quantum computing story. We heard the story that it will revolutionize every industry out there. Communications and needing more information. It will change the way we live, work and play and bring efficiency into every industry. I think that you have to buy the two leaders there. Nvidia and amd. Everyone is buying up the chips. Companies like meta and microsoft and google are the winners there. Taiwan semiconductor with the 6 billion off the chips act. They will build three factories. Biggest pbuyers are amd and taiwan semiconductor. You will see growth. Thank you, sylvia. Thank you. As we try to make sense of everything taking place, just in the last hour, the u. S. Government awarding samsung 6. 4 billion in funding from the chips act. Samsung promising to spend 40 billion to build logic chips in the u. S. The governments aid will help it in the facilities in texas and the existing plant in austin. Commerce secretary Gina Raimondo will be on cnbc today at 2 00 p. M. When we come back, more on everything taking place over the weekend and what it means and where it is all headed. David sanger will join us next on the conflict in the middle east and the ripple feefcts around the world. Squawk box is coming right back. Her uncles unhappy. Im sensing an underlying issue. Its tmobile. It started when we tried to get him under a new plan. But they they unexpectedly unraveled their price lock guarantee. Which has made him, a bit. Unruly. You called yourself the uncarrier. You sing about price lock on those commercials. the price lock, the price lock. so, if you could change the price, change the name its not a lock, i know a lock. So how can we undo the damage . We could all unsubscribe and switch to xfinity. Their connection is unreal. And we could all unexperience this whole session. Okay, thats uncalled for. After military service, you bring a lot back to civilian life. Leadership skills. Technical ability. And a drive to serve in new ways. Syracuse universitys Daniello Institute for veterans and military families has empowered more than 200,000 veterans to serve their communities and their careers. From professional certifications, to job training, to help navigating programs and services, we give veterans access to support from anywhere in the world. Welcome back to squawk box. Tensions in middle east are at a new high after the missile and drone attack by iran on israel. We welcome david sanger here with us. One of the great veteran experts of this space. His book is out. New cold wars. Chinas rise and the efforts to defend the west. Lets get into it because it relates to the story. Just right at this weekend and where we are in this particular moment. I know heit is impossible to handicap, but does this escalate . Where do we go from here . It is a fraught moment. A really hard one. It is really interesting to see President Biden on the phone to Bebe Netanyahu hours after this was over saying take the win. You know, you shot down all this stuff and you started this in some ways by doing this strike in damascus which the americans were upset about and didnt think the israelis should go do for fear of this. The effort by biden so far has been avoid escalation here and i suspect that at least for a while, we will see a calm. There is a rubicon that has been crossed here in the 45 years since the iranian revolution, iran has never attacked israel directly from its soil. I think the taboo on the israelis attacking back has now lifted. Biden may put pressure on netanyahu. He doesnt have a great track record. Thats the question. The extent you have been reporting on this over the weekend, what is your sense of where netanyahu is and where the israeli people are and the government around netanyahu is telling him . He is, obviously, desperate to stay in power. I think the longer the crisis goes on, generally helps him. He also recognizes that if he goes back too hard on iran right now and this turns into a bigger conflict, he will lose his objectives in gaza and lose the other. He is probably going to stay focused on gaza. He has to do something in response to this. The question is can they calibrate it . The biggest mistake is someone reads wrong how the other guy will react. Ill ask about a different read and it goes to the book which is russia and china of it all and their relationship together and potentially as a supporter of iran and how that relates to whatever pressure points and leverage we have or dont have with those countries. This is thebig change from nine or ten years ago. You remember the 2015 negotiations to stop Irans Nuclear program. Right. Russia and china were part of the negotiations. They were sitting on the american side of the table, right . This time, they are part anof wt the iranians call the axis of resistance to the west. Iran is providing drones to russia. They may be on their way to providing missiles to them. The russians are not going to be part of the effort to bring this down. Also, china and russia are happy to see the u. S. Wrapped into the middle east again as you were saying before i came on. What about the relationship with china . Janet yellen just got back from china. Is there leverage to be shad . There is leverage. Chinese economy has finally slowed down. How many times have we said they will hit the rocks . They finally hit them. I think it is the sense of the americans who deal with china the most, particularly the government officials, that this warming that we have seen, including the yellen visit, is a temporary thing. Book tries to trace where we have been with russia and china. The theme of the book is while we were busy doing the wars on terrorism and focused on the middle east, we basically ignored the revival of super power conflict. That will be the dominant theme of the next 20 or 30 or 40 years. We did it by deliluting ourselv by thinking russia and china would sign up to the norms of the western philosophy. Did we miss it and were on the back foot . Yup. If you want to get on the front foot, what do you do . Three things. The first is you recognize that this is the primary thing you have to focus on. Biden tried to go back and do his pivot to the pacific. Once again, he is caught up in the middle east. You cant lose your focus. The chinese dont lose focus. The second is you have to sustain the pressure on putin. All of the record of our dealing with putin is when he detects weakness and they will back away, he will go on the next step. The idea that the United States would say, okay, we were allin on ukraine, but this is too hard, that is what putin was betting on us doing. The third thing you need to do is if you are focusing on the investment, including bringing back the Semiconductor Industry and if you decide you are doing industrial policy, you have to be allin and do it in a big way. Here is the hypothetical counter fact. If President Biden today or becomes president again in november, this dynamic changes how . Two different ways. On russia, he said he will solve the problem in 24 hours. There is only one way to solve it in 24 hours. Go to the russians and say take this, this and this. I think if we did that, that would begin to shatter the alliances. I have been reading on europe and they are clearly concerned about that. On china, it is a slightly different thing. He was very eager to go strike deals with the chinese until covid happened. Thats when he turned around. I actually think he would probably try to reengage with xi jinping. Now, would he reiengage on the right issues . Hard to know. Would that solve or deal with the israel iran issue . I dont think it would. The think the russians have more influence on iran. The reason i think the chinese would be perfectly happy to see trump come back is the trum p ea is the chaos era and they get to move around the World Without his focus. David sanger, one of the smartest people i know. Thank you. Coming up, well have the action to the escalating war in the middle east in the energy markets. That story is next. Later, we hear from white house adviser john kirby in the 7 00 hour. Dude, whatre you doing . 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It was telegraphed ahead of time which indicates the country doesnt want fullout war. Irans move was a facesaving exercise and well planned without engendering further conflict with israel. The key is how israel responds because that could determine if the conflict is contained for now or escalates. That according to citi is not priced into the market. Additionally, no oil supply has actually been impacted by the conflict which is putting a lid on oil prices. Its still a precarious market. Iran has increased production 3 Million Barrels a day. This comes amid the ongoing russia and ukraine war. Ukraine stepped up the drone attacks on russian facilities which has been pressuring prices. The upside move in oil is impacting the energy sector. The prior high stood for a decade. Guys. Pippa, the g7 leaders are discussing more sanctions against iran. Im curious how it impacts the oil complex. As iran increased the production to 3 Million Barrels a day, they increased exports and other nations have turned a blind eye because oil prices are rising. Who doesnt benefit from it being higher especially in an Election Year . We have seen the price rise 20 cents in last month loan. Oil is a big, big input into inflation and if prices rise further, it complicates the issues. World leaders want to cap how much these countries earn from the oil revenues without disrupting global supply. That was the nature behind the price cap on russian oil. It was to not ban exports entirely as they did with gas because that would have a shock on the Global Markets. It is a difficult position to limit irans revenue from the oil exports without actually leading to an increase in oil prices. Thats been the trick for a while. Pippa, thank you. Coming up, earnings season is in full swing. We will get you ready for Goldman Sachs set to report later this morning and give you a look at the busy week ahead. We will have former vice chair Roger Ferguson with his latest on the hot flinflation data. Good morning. Welcome back to squawk box. Live from the Nasdaq Market site in times square. Look at the futures after the attacks over the weekend and the jitters of what will happen next. Not so jittery in the marketplace. Dow would open up higher. Nasdaq up close to 100 points and the s p up 21 points. Leslie. Now to the planner. Goldman sachs is set to report in the 7 00 hour. That comes after the rough start to theearnings season on friday. Jpmorgan chase reported lower Net Interest Income and guidance fell short of forecast. The stock dropped 6. 5 . The worst oneday perfo