Skip to main content

tv   Squawk Box  CNBC  October 7, 2021 6:00am-9:00am EDT

6:00 am
all those major afternoons and for most of the day we were in negative territory until we saw a respite towards the end of the session. after you heard the idea there could be a deal reached for the debt limit, it really kind of turned things around, energy prices went down, stocks went up and the dow, s&p and nasdaq were in positive territory by the end of the session the dow and s&p are in positive territory for the week, the nasdaq is down for the week, down by about.4% we were talking about the highs and how high off we were for any of them. even before you look at the futures picture, the dow up 200 points, s&p futures indicated up by 30, the nasdaq indicated up by 138, we were talking about the dow only about 3.4% off the all-time high. the s&p about 4% off the high. the nasdaq, the weakest, still only 5.8% off the high, before
6:01 am
you consider the futures this morning, too looking at the treasury markets. you have the 30 year at 2.087% but energy prices are the big story here talking about wti and natural gas hitting 14 year highs yesterday before the session before they turned around and closed negative for the session. that happened as vladimir putin stepped in and came to the rescue and said they'll be willing to make sure they supply natural gas. you can see the prices are down once again today with wti down 1.5% to $76.31 natural gas, even with the declines yesterday down 10% and the 3% you see this morning. still talking about it up year-to-date we'll continue to watch that pretty closely joe, i'm sure you were watching
6:02 am
crypto yesterday above 55,000 at one point earlier in the session today, i don't know where it stands right now, just below that at 54,431. >> news out of switzerland making comments. we don't have a coal board -- >> yeah. >> cover the journal, it's $202 per metric ton, three times the price since the end of 2019. coal generates 40% of the world's electricity. >> yeah. places like india and china it's still a very big deal. and brian sullivan was telling us yesterday about how they have days worth of coal at this point in india >> right and obviously a lot of conjecture i saw an article that said the -- what happened in europe with the breakdown of some of the renewable sources of energy was not a perfect storm it's going to happen again and again. and yesterday, when i read it,
6:03 am
the market was down about 450 points and it was rallying and i saw that -- i don't know, had to be a 20-something writer at one of these places said that on prospects for the reconciliation bill making progress i'm not convinced that the stock market wants that $5 trillion bill passed. >> the market is very concerned about the debt kriel, though. >> yes that's what it was. >> jamie dimon and others talking about what a catastrophe it would be. if the deal doesn't get done today, they were sitting down monday and going through every one of their contracts that could get tied to anything if we actually default on our debt he thinks it's completely irresponsible they get this close. >> they have time now. >> yes i hate this phrase, they can kick this can down the road and deal with it in december. >> i don't know what president sanders -- i'm sorry, i don't
6:04 am
know what bernie sanders is saying, he's saying no reconciliation whatsoever. this is pushing it off mcconnell basically -- it's a real weird chess match so people can have this position to -- you know, to politicize what's going on after it finally happens and say, wow, pointing to these amendments the democrats have to -- whatever has to happen it's a real dance. but now there's time to do the reconciliation to raise the debt ceiling just with democratic votes. we'll see what they do. >> i don't know that's going to happen or not. we could be dealing with the same situation beginning of december yeah >> but you know what's happening between now and december >> what? >> see what happens in november. >> halloween >> yeah. halloween, we'll see what trick or the treats happen there's some important elections coming up, i don't know about virginia where mccalla said
6:05 am
parents involved in kids' education, since when. and new jersey as well for the first time there was a poll that showed it wasn't double digits. >> his lead? >> yeah. we're going to have citorelli on, i've asked to do that to hear what he has to say. was there something else >> something else on your list of things i want to rant about >> something that i saw that i went, what as we've been saying today's top story a possible deal to suspend the debt ceiling and avert a national default, mitch mcconnell offering a short-term suspension reports say senate democrats are set to accept the proposal the deal was extend the debt ceiling into december. we'll have much more on the story throughout the morning and then senator rob portman is going to join us live, 8:00
6:06 am
eastern, who was also mentioned prominently in the cover of the journal. it took a while to get the journal, i saw it on line. i can do that if i need to, i'm capable. but what's happening in ohio since portman is retiring, and they're scrambling to represen the great state of ohio. portman was the classic ohio republican, pro-business checked all the boxes. >> calm. >> now they're different shades of trump trying to get the republican nomination there. so it's watching sort of a -- i don't know, a little microcosm of what we might see in the future as to, do you want to be like all in trump, like maga maniac trump. >> or just a little trump? >> do you want to be semitrumpian a lighter shade of -- >> orange? >> yeah. like a light orange, what do you want to be >> and rob portman, a former
6:07 am
trade rep -- >> million things, congressman 12 years -- >> right >> more maybe. yeah in the house and the senate >> he's one of the guys who was heading up the bipartisan infrastructure bill. >> right that's what i was going to ask. >> trying to negotiate it. >> that was the point i was going to make. if the infrastructure deal looked like it was going to get closer i could see writing that story ma maybe the -- you know, the market does like when you spend money -- >> right. >> and you get jobs and spend it hopefully you're not digging and filling holes. >> but business leaders in the chamber of commerce are mad this isn't getting pushed through. >> that might help but the other one i don't think that was the right take. >> hard to say. >> i guess it -- >> look, yesterday what it was about was the debt ceiling if we can push that off and not have the imminent default on our nation's debt. >> portman is on today. >> yes, on at 8:00 a.m i think that's the time. anyway, also on today's economic
6:08 am
agenda we have weekly jobless claims those numbers are coming out at 8:30 eastern time so that gives us something else to talk about. they're expected to go to 345,000 we have the big jobs report on friday adp was stronger than anticipated so this is one in a series of numbers we'll pay attention to in corporate news we'll follow facebook and the pressure that company is facing. "the wall street journal" reports the social media giant is delaying the rollout of products amid scrutiny from congress and the media and putting a pause on work for existing products while they conduct reputational reviews to examine how changes might be seen by the public and to ensure they don't adversary impact children probably a good idea given how much skrooutny is there. >> stocks to watch, levi posting better than expected results
6:09 am
they benefitted from an easing of the restrictions from the pandemic that prompted people to refresh their wardrobes. iac interactive is buying meredith corp. media assets $2.7 billion, including people magazine, better homes and gardens, they'll combine the business with its dot dash unit. and shares of rocket lab popping after the company was chosen by nasa to fly an experimental solar sail into space which could be an alternative to satellites rocket lanes went public in a spac merger. >> i love the levi story, people are dressing up again in jeans that's an upgrade from the pajamas and yoga pants for the last two years >> it'll be interesting when i
6:10 am
wash these pants. >> people wonder why we're in different studios. >> i don't have to hang them up, stand them up. >> i know you're joking. penelope would never allow that to happen. >> there was a time, i'd call her a homemaker, and she'd say you're right i am, that's a full-time -- you know? >> yes that is a full-time job. >> it is a full-time job and it should be admired. she's great. now she does both. >> exactly even better. when we come back we'll talk more about energy prices this morning. wti down by about a buck, still 76.44. brent still above $80 and natural gas at 5.55 right now. first as we head to a break, check out this morning's biggest s&p's winners and losers on the winning side invid ya, followed by twitter. you're watching "squawk box" and
6:11 am
this is cnbc ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ we now find that 85% of individual investors are interested in sustainable investing. among millennials, the interest is even stronger. ♪♪ one of the big trends in sustainable investing is data, and the ability to understand how sustainable your investments are. by taking that information into account,
6:12 am
investors can make better decisions for the long term. sustainability is not about one number. it's about variables like water usage, data privacy, consumer trust, diversity, land use and conservation. all types of investors are now considering this in their investment decisions. this is not niche. one in four dollars globally is following some form of sustainable investing. with sustainable investing at this scale, there's power to change the markets and have an impact on the issues investors care about most. i am courtney thompson and we are morgan stanley. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire paola needs a parachute. so, salesforce customer 360 unites your marketing,
6:13 am
sales, commerce, service, and it teams around her. so they can deliver a great experience from anywhere. ♪ (whistle) ♪ it's moving day. and while her friends are doing the heavy lifting, so they can deliver a great experience from anywhere. jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? ...delegating? oh, good one.
6:14 am
move your xfinity services without breaking a sweat. xfinity makes moving easy. go online to transfer your services in about a minute. get started today. welcome back to "squawk box. the stock market down, now up 200 points been sort of adding to the early session gains. so if you go minus 460, and then it closed up 100, now we're up
6:15 am
200. >>.25% for the dow. >> a lot, 460, 560 -- 760 points from where we could have been. treasuriry yields have also eased to some extent the 10 year 1.524. >> let's cover energy prices right now as well. that's been a huge part of the story. brian sullivan is here and he's tracking this closely. he has a great look at the catalysts for why this is happening. hey, brian. >> becky, good morning how much time do you have? i mean, what's not the catalyst. in the united states, obviously we have boosting demand. we have reduced supply in some cases. oil production has not gone up the level ha demand has gone up. if you look at traffic statistics in many cities we are seeing traffic above even pre-pandemic levels nobody is taking mass transit, everybody is driving not quite at records but still
6:16 am
up a bigger story around the world. again, we're not sort of harping on this too much because you can't harp on it too much. let's talk about europe. in europe, they are seeing natural gas prices in some cases, 25 or 30 u.s. dollars equivalent our natural gas prices can you see, down a little bit right now, we're at 5.5 bucks. why are we at 5.5 bucks and europe at 25 or 30 with china, by the way, paying over 30 for liquefied natural gas. the result of a couple things. number one they didn't buy a lot of storage during the pandemic maybe it's because they underestimated the boom in demand coming out of the pandemic maybe they thought the pandemic might go on and lockdowns would go on long er. they were short on storage already, guys. now you're seeing a shortage of some of the renewables, in italy, the wind power not producing as much. they had a shortage level because they screwed up and
6:17 am
didn't buy enough natural gas then you don't have enough power coming in this and all of a sudden you realize, are we going to have enough raw materials to power the power plants, we need to start buying. factor that in with many traders being short natural gas. you have this huge, all of a sudden, boost in demand, short covering margin calls you probably have commodity desks that got completely blown out now they're paying outrageous spot rates in natural gas and coal markets electricity prices, it could be a short-term thing, 300 euro per megawatt hour in germany what does that mean? namely normally 30 to 50, if i'm wrong have our european viewers tell us. the point is this isfrom an industrial problem to an individual problem because they're rolling fixed rate
6:18 am
contracts coming off you're going to open your bill if it's cold and you normally may pay 100 euro a month why is the bill 400 euro? it's incredibly inflationary all as the climate summit is about to kick off in scotland in the coming weeks. >> a few things we've been waiting on one of them, there was calls for biden to talk about releasing oil from the strategic petroleum reserve, which it sounded like they were considering yesterday. they also talked about maybe cutting off exports to make sure we keep it all here in the united states. would that work? >> no. >> why >> not at all. the spr might bring down prices in the short term, but there's not enough oil that you could release that's going to make a huge difference. on the export ban, this is interesting because something i hadn't thought about goldman sachs out with a note this morning on that, forgive me
6:19 am
because i'm going to read it because whatever, an spr release would bring forward the potential for exports keeping the hydro carbons in the u.s it would reduce the intensity of exports strengthening the administration's negotiation power ahead of discussions on the carbon border tax adjustment also ironically it would be particularly bullish for gasoline and refined products, because now we'd have to be a net importer of gas priced off of brent crude, european crude, which would go up in price if we stopped exporting. that's interesting for two reasons. number one the export ban may have nothing to do with supply demand or prices according to goldman zasachs it may be an negotiating starting point on these carbon negotiations coming up if we do it, they say gas prices
6:20 am
may go up because then we have to import stuff priced off brent crude which would go up in price. i don't think any politician, it doesn't matter what your political party or vent is, wants to have americans paying 4, 4.50, 5 bucks a gallon where they don't already that. >> i've been talking about it. i have a bad feeling about a lot of this stuff and things that could happen -- >> you never. >> -- and things that could happen in the future we know the hierarchy of need, food, shelter and warmth all the things we've taken granted for over 100 years i can't wait until the woke millennial somewhere that is all about esg and footprint turns on a light switch and it doesn't work and they're like, oh. or can't charge their iphone to
6:21 am
do a tiktok video. what what's happening here? this is not -- that's going to happen, brian. that's going to happen where suddenly you -- coal is still 40% -- did you read the journal piece today, 40% of how you charge the grid to run your ev, you know, woke cars, is going to be powered by coal still. what happens do you know we're using that much coal still? killing the carbon footprint that we're all going to be at 180 degrees celsius? >> well, i did in fact, there was a shortage of coal miners. i know that sounds ridiculous, but one of the reason coal prices has gone up is not only just demand is exceeding supply, which is why any commodity goes up and coal is the best performing commodity of the year -- >> coal? >> 2021 is the fossil fuel of
6:22 am
the year. >> we have to get zero coal, brian, don't you know that >> i was at a conference years ago and the guy said how many of you here drive an electric car, some people raised their hand. he's like you're all coal burners. people almost threw things at him. we have to be honest about where the power comes from. >> nobody is. >> we could be i wonder, joe, i'll put it on you, where's the nuclear conversation here? renewables are fantastic but we're adding tens of millions of people a year to the planet. >> that's the paradox. >> we need to grow all power production. >> not in my back yard. >> people who want clean water and the lights. >> you talked about $5 a gallon, apparently in america there's people paying north of $5, monte county california, $5.22 the highest level in seven
6:23 am
years. but there are places north of 5. coming up, why -- becky, twitter was too quiet. figured i'd do that. oh my god, this guy just jumped off his hover board, yelled up to his parents he was going to tweet to me. coming up cathie wood is making headlines this morning news of her big move in the next one. that's coming up this is lisa. she's a posh virtual receptionist.
6:24 am
when you're busy, she'll answer your calls and assist your clients. you can't be in two places at once, let posh answer. posh virtual receptionists. at vanguard,
6:25 am
you're more than just an investor, you're an owner with access to financial advice, tools and a personalized plan that helps you build a future for those you love. vanguard. become an owner.
6:26 am
you could fret about that email you just sent. ...with a typo. aaaand most of the info is totally outdated. orrrr... you could use slack. and edit your message after it's sent. [sigh of relief.] slack. where the future works. welcome back it's time for today's executive edge du jour ark investment management,
6:27 am
cathie wood is leaving new york city cathie wood said the new york headquarters will be permanently closed at the end of the month with them moving to st. petersburg, florida. they'll also accommodate employees who prefer to work remotely florida is nice. >> it is especially as you get towards the winter. >> they have different tech things down there. are you familiar with that >> slightly. >> no state income tax. >> one of a number of states that have no state income tax. >> how do they get by? >> kindness of strangers, i suppose. we should also tell you former safeway chief executive steven bird said the grocery chain relied on promises by elizabeth holmes when it decided to invest $350 million, the investment was intended to install the clinics in stores.
6:28 am
bird testified that theranos and holmes pushed the date back. he said she was very a charismai and he believed her when she was making the promises. i believe he said in the testimony when they were having these conversations she didn't seem to be looking to ball wan knee for answers she was the one making decisions and promises >> that's interesting. bourbon distillers maybe ready to sample their own product when they get their next tax bills. sales are being hurt by trade disputes and the impact of the pandemic on tourism and you can imagine restaurants and bars, everything else. bourbon barrels are subject to a yearly property tax.
6:29 am
so the tax bill goes up, as inventory grows. the distillers are set to pay $33 million in aging barrel taxes this year. i thought if it was 23anything that moves you can tax. >> an annual tax on the barrels as a property tax? >> as a property tax. >> that's crazy. this year's flu season could be particularly severe that warning comes from cdc director, dr. rochelle walensky. she said that the united states population may have a reduced immunity against flu after cases fell to an all-time low last year as everybody was locked down, wearing masks, not being exposed to other people. that estimate stemmed from the pandemic keeping people at home. she's urging americans to be vaccinated for the flu and covid-19 did you get your flu shot yet? >> oh, that -- >> never liked that one. >> no. i didn't get a lot of those. >> got mine. >> i didn't get -- i don't
6:30 am
really remember -- i don't remember having major problems with it most of the time i sort of -- i don't know. i didn't now i have no problem -- covid is a different situation, isn't it i'm sure i'm going to flu, couple of days -- >> if you have young kids -- when you have young kids you need to be. >> i told you about tamaflu. >> i have never done it, tried it i know you've been a fan of it, and it's helped you. >> love it. >> i've never tried it before. does it give you any weird dreams or anything like the malaria stuff? >> i don't think so. weirder dreams coming up -- >> never mind. >> yeah. don't you still have just -- i don't -- sometimes i just -- i surprise myself. it's like, wow, you're a sick individual dreams can be very strange >> two nights ago i dreamed i was throwing up all night.
6:31 am
glad to wake up from that one. >> sleep on your side. >> i wasn't actually coming up, live report from washington the latest on the push to get a deal on the debt ceiling as we head to break, a look at yesterday's s&p 500 winners and losers hey lily, i need a new wireless plan for my business, but all my employees need something different. oh, we can help with that. okay, imagine this... your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, asap! so basically i can pick the right plan for each employee... yeah i should've just led with that... with at&t business...
6:32 am
you can pick the best plan for each employee and only pay for the features they need.
6:33 am
6:34 am
back to our top story this morning. a possible deal for a short-term debt ceiling extension futures pointing to a higher open on hopes of an agreement. ylan mui joins us with the latest i think manchin had to come out and say, no filibuster i'm not doing it before things got serious begin and that sort of seemed like both sides, okay, we got to figure something out
6:35 am
and that's when it started, i think. >> reporter: yeah, that filibuster story line lived and died quickly there but the negotiations went on late into the evening on capitol hill but there was still no official deal on the debt ceiling. senate majority leader chuck schumer said that the two sides were making good progress but not there yet. he hoped to be able to announce an agreement this morning instead. republicans offered to support a short-term increase in the debt limit that would allow the government to keep borrowing money into december but democrats have to target a specific dollar amount, they couldn't wave it all together. they're hoping it gives democrats a chance for a longer term fix through the reconciliation process and without gop help but democrats are rejecting it. >> what's my reaction? just what i said it's b.s.
6:36 am
he should stop playing games, get out of the way so the 50 democrats can avoid what would be an economic catastrophe >> reporter: others were more optimistic senator chris murphy tweeted it sucks that mcconnell only agreed to extend the debt ceiling until december but a short-term deal gives them a chance to get the build back better negotiations but it just punts it till the end of the year so we'll be back here soon. >> as we pointed out at the top of the show, something else happening in november between now and december someone once said elections have consequences we'll see what happens do you hear terry mcaulife said i'm not doing well here -- >> i live in a swing district in virginia and this race from just
6:37 am
judging from the boards. >> the signs i see put up in people's yards it's really tight. >> amazing that education -- i don't know i think that in certain -- gonna take on a certain party but people are misjudging, i think, the public sentiment about a lot of these things. i don't know about this latest merrick garland that parents are terrorists now for talking about what happens in schools? i don't know if most americans -- >> reporter: the fight between -- >> go ahead. >> reporter: the fight between progressives and moderates, that was playing out around the infrastructure bill versus the social spending package, that's playing out in states and localities across the country. so that tension within the democratic party is going to be on display november 2nd. >> that can influence which party are feeling their oats in december to really push, you
6:38 am
know, it's your fault that we're going to default on our debt they do that so well what's a person -- what is a citizen supposed to really believe when both sides just -- it's their fault thank you. >> yeah. when we come back we'll be speaking with retired four star army general stanley mcchrystal. he has a lesson for all of us when it comes to handling risk and how we're doing that in the united states right now. and later, senator rob portman joins us to talk about the debt ceiling and what may or may not happen with the bipartisan infrastructure bill stay tuned, you're watching "squawk box" and this is cnbc.
6:39 am
hey, coach prime... i think you've got what it takes to wear the aflacket. style, charisma, and a smile, that's a 21 out of 10! [aflac!] you know, aflac can help keep unexpected healthcare costs from ruining someone's finances. check out this coverage... you still got it coach, you still got it! i never lost it! yeah! [aflac!] you see that coverage? with that wingspan i see why you got more rings than a cell phone.
6:40 am
there's always room for one more. yeah! get help with expenses health insurance doesn't cover at aflac.com
6:41 am
welcome back, everybody. in a new book our next guest offers a battle tested system for addressing risk. let's welcome retired four star army general stanley mcchrystal, the u.s. military's top counterism force, and commander in afghanistan until he retired in 2010.
6:42 am
and now the co-author of a book "risk, the users guide". thank you for joining us i know you look at how we assess risk as a nation and you don't think we're very good at it. why is that? >> i grew up with risk and i spent the last two years along with my co-author studying it. the conclusion is we don't do it well, which won't surprise anyone more surprising is we're the biggest problem. the greatest risk to us is us as organizations particularly the reason is we tend to focus on outside threats, looking at the horizon, wondering if we can predict this happening, that change, this tsunami and what we ought to look at is our own vulnerabilities, our immune system the human body has a human immune system which is a miracle, it detects, assesses, responds and learns from about 10,000 micro organisms that
6:43 am
attack us every day. we don't worry because it works well but our organization stumbled. think of our nation in the face of covid-19. actually, covid-19 wasn't a surprise pandemics come with regularity and we have good knowledge in public health of what to do about it and we even got a scientific miracle in the extraordinary speed in which vaccines were created but we still dropped the ball and dropped the ball at an extraordinary cost of life and economy. and that's largely because internally our ability or unwillingness to communicate, to have a clear narrative, to make tough decisions, to get the timing right on many things to be adaptable, and, of course, have leadership have all fallen short. >> what could or should we have done differently how could we have changed the course of covid here >> i think we could have started at the very beginning, identifying the problem, we have the knowledge to say we don't know the specifics of this
6:44 am
particular novel coronavirus but we generally know. we could have had clear communication across -- i'm talking inside the united states, but it applies globally. clear communication from the very top down, admit what we don't know communicate effectively what we do develop a narrative. i would have used a war-time narrative. we are asking for common defense of our nation. we're asking for every american to do their part to defend that means the commander in chief has to stand up and take that leadership role but also local leaders need to do the same as well and then we needed to make decisions early. the hard part of a pandemic is you have to make decisions because exponential growth before it's evident to the full population that takes leadership. that's what we have leaders for, to make those tough decisions that may get criticized in the moment but are necessary long-term. >> general, obviously you know a
6:45 am
lot about afghanistan as much as anyone having commanded there, we talk about without individuals we don't know where we get individuals like you, certainly not -- i didn't have the cut in my cloth to do -- so we thank you for that. but you told joe scarborough when you worked with vice president biden and president obama that they listened to you. they didn't do everything you wanted but in every instance they listen to you we know with the exit from afghanistan and the chaos that we saw, that president biden did not listen to the generals do you agree with that >> joe, thanks for the kind words about me, first. they did listen to me. again, they didn't always do what i recommended i think that's what happened i wasn't in the room for this latest iteration but my sense is that the military leadership, dod, got the chance to voice their positions. but the president is not necessarily in a position to accept those and follow those
6:46 am
recommendations. it's to find the best military advice and then the commander in chief has to make the best military decision. where i would have been upset is if i felt like they didn't give me a hearing >> having given blood, sweat and tears and what we went through for 20 years, what's your feelings for the way things ended there, general must be -- you tell me, what are your feelings for the way things ended there and the way it ended? >> yeah. a sense of loss. probably like every veteran, military or civilian who was involved in some way there, a sense of loss and a sense of failure. we didn't accomplish what we wanted to and now the afghan people are in a difficult position i would have recommended a different course of action for the president. but i respect the fact that the president gives us and we execute the best we can. now we need to decide what to do going forward. i think we need a moral connection, commitment to the
6:47 am
afghan people. the females. i think what we can do within the realm to pressure the taliban regime over time is going to be key. and then, of course, take on the counter terrorist requirements as they surface. >> i'll bring this back to the markets in a conversation we've been having about the debt limit. we're close to hitting the debt limit. today is october 7th and i think october 18th is the date yesterday the secretary of defense said that national security could be threatened if they don't pass the debt limit, the troops might not get paid in that situation does this make you nervous is this an example where we don't manage risk well >> it's a perfect example. there's a saying in the military when your enemy is making a mistake, don't interrupt him if i was an enemy, i wouldn't touch anything we have our weapon pointed at our own foot and ready to pull
6:48 am
the trigger. >> thanks for being with us this morning and echo my thanks for your service we really appreciate it. thank you for being here. >> thank you coming up, the dow and the s&p now positive for the week after monday's selloff but the nasdaq remains in the red. thfu sryexe llto nt. what happens when we welcome change? we can make emergency medicine possible at 40,000 feet. instead of burning our past for power, we can harness the energy of the tiny electron. we can create new ways to connect. rethinking how we communicate to be more inclusive than ever. with app, cloud and anywhere workspace solutions, vmware helps companies navigate change. faster. vmware.
6:49 am
welcome change.
6:50 am
you could spend half an hour preparing for the half hour status meeting. orrr... you could cancel the meeting and share updates in slack instead. it's where your whole team is in one place so everyone can stay up to date. slack. where the future works.
6:51 am
welcome back to "squawk box. kristen bitterling is regional head of north america at citigroup and kevin simpson is portfolio manager of capital wealth planning and just, yeah, you two do have certain things in common with this market that we're trying to figure out i think one of them is that i guess nervous bulls might be the way of describing it both of you have about ten head winds or serious issues that the
6:52 am
market could probably have to deal with. both of you say you still think it's something you have to be involved with, kristen is that about right? >> yeah, i think that is right so investors are naturally anxious. but i think one thing to just point out is a couple of weeks ago, investors were anxious, actually, because of the lack of volatility we were seeing in the market we had volatility a couple weeks ago without the low end of the 20-year range. we had not seen a 5% pullback until recently in a normal year you get two to three to 5% or more and one to 10%. now we have some catalyst obviously starting with evergrande looking at energy prices i think investors are saying which one will derail the market but we see opportunity here, absolutely. >> kevin, you make the point that you have been calling for a
6:53 am
7-to-10% pullback. i don't know whether -- i don't recall that whether you told us that, but if that is true, is that a buying opportunity for you? >> yeah, absolutely. we were buying, joe, during these pullbacks. i think to kristen's point, these markets are like volatile relationships that we just can't live without both require patience and careful discipline to come out of them profitably but it's a buying opportunity every time we see pullbacks. so for september being down, it was a buying opportunity volatility absolutely has been the theme of the day here in okay we are seeing it across all markets. if we see another pullback in october. we will look in it to invest in quality names for sure >> i don't know about that analogy, kevin did you hear that becky, like a volatile relationship that you can't live without starkly, don't we know those things don't end well many tames and then a nice, stable
6:54 am
relationship may be boring, might be a better way to go? i mean, i don't know. >> no way, joe this is what we live for, invest as a life, you have to separate the raw emotions from the metrics. so i believe in the three rs, rules, risks, returns. you can't get caught up in the day-to-day flubbing you canuations you have to stay focused and disciplined in a rules-based approach if you can manage risks, the returns will take care of themselves over time. >> the severe head winds i don't want to say them again, but both of you note that rates are going up, inflation is going up, debt ceiling supply charngs covid, delta variant. china. that's a long list you got any more kristen to add to those are kevin's >> i'm sure we could add some more i think in terms of portfolio positioning, the question is what are you going to do about
6:55 am
it if you are worried inflation, it's cash is punitive. duration is punitive you need the find other parts in your portfolio that will generate yield i also think from an equity standpoint, this is a time to lean into fundamental also and quality so some people have pointed out, look at the valuations that we have right now well, those valuations have been supported by record high profit. so now we have a time for security selection leaning into quality, leaning into companies that have really strong balance sheets, been able to consistently grow their earnings, been able to consistently grow their dividends, which serves a really nice purpose in the portfolio both in terms of reducing volatility and adding yield, which in this we find front and center >> kevin, what would cause you to say, you know what i will lighten up and stay out for a while. is there a certain level of interest rates or inflation where you'd say this is going to be a negative for an extended
6:56 am
period >> yeah, i don't think we're there yet, joe i agree with everything kristen said as far as policy. if anything will keep me up at night, it higher interest rate the markets will support higher interest rate. the fed will get the jobs report, where they can begin tapering after that we will see intrates increasing we can hand him some inflation off the zero level but what we don't want to the see and what keeps me up at night is the scare, the fear of high interest rates and high inflation and if we see those two things, then that's going to give me real pause and cause some alarm for the markets for sure. >> all right great. kristen, thank you kevin, thanks. you still married? >> happily >> volatile or not so volatile >> no, i wasn't talking about my relationship, joel i'm talking about the stockmarket's, it's ar an analysis. >> you compared it to volatile
6:57 am
relationships we can't live without. in your own life, you don't want that all right. never mind >> you want your portfolio managers to be work, just like me. >> exactly just like my relationships all right. thanks what do you think, beck? >> boring is better, the older you get especially, that's for sure >> i mean drama, no drama. >> no drama. yeah, no drama, mama anyway, when we come back, roger ferguson breaks down the price action and volatility we've seen in the markets hmm, maybe boreing is on the road for markets, too, maybe not. anyway, later, goldman's global head of commodities, jeff kurrie will be talking about commodities. cotton prices have been higher too, we should take a look at that they were the highest in ten years yesterday. are you watching "squawk box" and this is cnbc
6:58 am
curry. ♪ ♪ kur rekur re ♪ with a bit more thought we can all do our part to keep plastic out of the ocean.
6:59 am
7:00 am
. markets look to higher after yesterday's xipd off session yesterday's rally putting all the major indices in positive territory for the month of
7:01 am
october. prices in crypt to, higher prices putting precious here and abroad we will take a look at what it means for the global economy and facebook under fire is putting profits ahead of safety. should the government step in to force the company to make changes. the second hour of "squawk box" begins right now. >> good morning, welcome back to "squawk box. here on cnbc, i'm joe kernon along with becky quick andrew is off and we haven't had any volatile relationships recently on the show for some, have we? it's been quiet, u.s. equity futures at this hour as you can see are indicated up about almost 300 points now after a
7:02 am
big turn around yesterday. and sort of we either go up three or 400 it seems like, we were up 464 points yesterday, closed up 100 we're adding almost 300 this morning, definitely still it seems like the mark is having a rotating correction and certain fames but the default move at least this week has been up, we're still seeing like a beachball up to date water >> i will give that guest some credit it is more fun to watch when things are volatile. especially within it comes to the markets him keep it to the markets. >> fun to watch may not be so much fun to be in the volatile relationship >> it's volatile only based on what we've seen recently in terms of the market activity. >> right >> this is relative to the calm we have seen for a very long time but swings, we're talking about
7:03 am
1% or a little more than that. it's not crazy volatility. it's just things are a little more interesting >> chris made a good point be careful what you wish for there is no volatility so now we get volatility >> keep it interesting let's talk about some other things that are making headlines another this hour, the battle over the u.s. debt limit appears to be nearing a resolution, senate democrats allow a short-term increase in the debt creeling to get them through the beginning of december. senate leaders chuck schumer and mitch mcconnell say a bill hasn't been finalized. this would set up a debt limit fight in early september we'll see what happens with that it staves off things for the him looking deadline okay 8th. considering it's october 7th facebook is reportedly delaying the rollout of new products right now after the storm of criticism surrounding the company. the "wall street journal" says the social media giant is also
7:04 am
putting work on new and existing products on hold while it conducts what it's calling reputational reviews this comes after tuesday's congressional testimony by whistle blower frances haugen, in which she accused facebook of provider advertises profits over safety and amazon is blame ac data impact with breach, streaming platform amazon says it's still assessing the impact and no user data has been exposed however, some reports say hackers did gain access to source code and client information. >> dom chu is looking at some of the big mark movers this morning, individual names this morning, dom. >> good morning, joe, good morning, becky so along the leans of your volatile relationships, we do remember volatility creates opportunities for traders out there. so as we've seen the marks pull back a bit remember the nasdaq is now just about 6% away from the record highs that we saw earlier this year so not yet in that so-called correction phase that a lot of
7:05 am
traders allude to when things drop back 1e% and however the recent opportunity created has been in certain names beaten up in that volatile trade you look at the pre-market so far this morning, a lot of the namesing in the pre-market trade within the s&p 500 are names that have seen a lot of that volatile relationship so to speak. twitter, becky re mentioned facebook a lot took a dive. however, since then, facebook has remained under pressure. however, twitter shares with snap and pinterest have seen a balance there. twitter is up about 2% in the pre-market right now semi conductors have been a big focus. nvidia has been volatile it is up another 2% on the thin tech side of things, paypal holdings, volatility up 1.5% adobe, a huge fall here, just saw its record highs, maybe a couple months ago is up 1.5% in
7:06 am
the pre-market trade, speaking of financial technology, there is a stock right now in square that is up pretty handily about 3% of the pre-market trade, this is being helped along by analysts, joe, becky at jefferies who have upgraded this stock to a buy from a hold rating, the price goes from 265. they think their acquisition of after pay and their whole franchise within what they call neobanking that is to say the cash app and everything else they have is an industry leader poised for long-term growth that's helping to power square up in the pre-market share i'll send things over to you >> amazing, technology and innovation and new companies in the united states is -- you know what square's market cap is? square square, $110 billion, dom. >> how hold o old is square? >> it is alive and well and something we need to embrace and
7:07 am
be very happy about. >> what's even crazier, joe, becky, if you look at square's $210 mark cap, look at how many banks that composed in the s&p 500. >> how many other names when you come on with all of a sudden you look at them and what a cute, how about paypal ipo. how does europe have a paypal, which has a, dom, buehler, anyone 310 billion dollar mark cap? buehler. anyone >> what is europe got? >> we will have those guys soon. >> s.a.p.. >> i callss come one s.a.p., well, i mean i can name 50 >> the entitlement of. >> so a comparison of the entitlement state in europe and
7:08 am
what it has bred in terms of gdp growth and innovation, versus the united states. while we sigh we have a good system is beyond me. >> thanks, dom >> could i digress, becky? >> i understand. anyway, economists are raising their inflation forecast and lowering their consumer spending outlook because of that surge in energy prices, they may be down this morning, wti back at 7631 pulling back now, but this comes after a huge spike, yesterday, we saw the highest levels in seven years ago not only wti but natural gas. steve leishman joins us with more this is kind of the convergence of some many of your areas of expe expertise. you are not only an exist or economics reporter you've covered the energy sector in the past, too >> yeah, both in russia and the united states. it's really interesting what's happened, becky the latest surge in energy, it will sap money
7:09 am
away from other discretionary spending it will be higher. because u.s. produces so much energy, it's going to hit the economy in a very different what i from previous price hikes in what would be a historic change. nancy lazar from macro writes, soaring energy prices are no longer blanket bad news for the u.s. economy in fact, gdp and oil prices now have a tiny production i never thought i'd say that that's a part of the reason for the higher prices. it's still 11.5 million up in the last week as prices rise, domestic producers increase production and capital spending. all that boosts u.s. economic growth and offsets some of the negatives on a price rise on consumption. in fact, a 10% increase of all prices used to subject 20 basis points of gdp.
7:10 am
now it's a warrant for consumers, take a look at this data, americans spend about 3% of disposable income on energy they think it's 90%. it used to be 8.5 in the early70s and 5% in this century. it's like a regressive tax that hurts the poor most. michael england from action economics says, this isn't good news for households. it will hurt spending on other goods. it affects christmas sales and other sales at the margin. the difference more of that extra money they spend stays in the economy, understanding the change to economics of energy, simple we now have an energy economy the size of saudi arabia inside the u.s., becky. >> steve, is this point any different? the only thing i would raise question about is will you see the major oil companies start trying to produce more energy based on this? they've cut a lot of capex in terms of what they will be doing for exploration.
7:11 am
they've done it because they have been pressured by their shareholders who don't want them to be carbon-producing companies. they want them to be looking at all these other things so it doesn't feel like this is going to be the spigot turning on as quickly as we have seen in the past >> i don't think it will turn on as quickly or as much. i think all of that is right s. counts are up quite a bit, according to my colleague brian sullivan so that's one sign that it is going to come back at least somewhat. i think you are right. i think there is pressure on energy companies not to come back as much i don't know, becky, you met these wild caters like i have, you think the price is $70, $80 bucks a barrel i don't think they can >> i think smaller companies will drill i don't think you will see an exxon, chevron, changign a huge amount of capex spending at this point at least not yet. >> shell just i think sold
7:12 am
assets in texas. i think that's an important point. are you right, it's probably not going to come back as much i do think there is a positive impact on this energy consumption, it has hurt consumers it will come back through the u.s. economy through capex and domestic production. >> steve, thank you. great to see you. when we come back, a new survey on how the top business leaders are feeling about the state of economy roger ferguson and trustee will be joining us with some of those results. then should the government force facebook to make changes to its platform? that's this week's topic in our on the other hand segment. we will have more on that. before we head to the break, though, dow futures up by 272 points, the futures keep ilngte here. s&p up 39, nasdaq up 170 "squawk box" will be right back. gang, we need our paranormal services to be more versatile.
7:13 am
i know a group who can help us. not those new age shamans again. i'm talking world-class business experts. data geeks, strategists, tax advisors, the works. what about technologists? 40,000 strong, baby. we'll be able to hit our projections both fiscal and astral. this company sounds great. what do you think, agnes? looks like it's unanimous. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today. [swords clashing] - had enough? - no... arthritis. here. new aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme.
7:14 am
baaam. internet that doesn't miss a beat. that's cute, but my internet streams to my ride. adorable, but does yours block malware? nope. -it crushes it. pshh, mine's so fast, no one can catch me. big whoop! mine gives me a 4k streaming box. -for free! that's because you all have the same internet. xfinity xfi. so powerful, it keeps one-upping itself.
7:15 am
can your internet do that? kathy woods arc investment management is leaving new york city she says the company is moving to st. petersburg, florida ark will accommodate employees
7:16 am
that prefer to work remotely the survey by the conference board and the business council shows that ceo confidence about a host of topics from the economy to their own businesses fell from an all-time high in the second quarter although, overall, they remain somewhat optimistic. for details on the survey and much more, we are joining by roger ferguson, vice chair of the business council, trustee of the conference board, ronler is a roger is a distinguished fellow on the unkosicocouncil for formr relations and chairman of the federal reserve that dog gone delta variant, roger, i really to the the vaccine once we got that widespread adoption of it that there will be clear sailing. i think that explains in a nut shell why we're not in a better place right now confidence wise. if there are breakthrough cases
7:17 am
and you can get it after being double vaxed, it's like all bets are off. >> i think you are right let me make a strong correct i am the former vice chairman of the federal reserve. i think it's important not to overstep our bounds. you are absolutely right what we sue is a hue degree of confidence still but a fall from where we were in the second quarter. and i think what ceos are telling us, is, indeed, although thied like to put the pandemic behind them, they have been unable to do so. also, we also know there are bottlenecks that are making it very, very difficult for ceos to manage the middle part of the income statement so-to-speak so i think you see what the issue is >> maybe globally the supply chain issues could have been maybe more predictable given that that wasn't going to snap back immediately because, obviously, there is, you know, a
7:18 am
lot of countries that do not have the vaccination rates of more-developed countries so, that makes sense the fed is in but i think i said vice chair i don't think i said - >> either way. >> anyway. the fed has a fine line to walk here and a new 5% unemployment, who would have thought that seems so good then we know how many jobs are still either unfilled or that we still lost so if they truly have a dual mandate, you got to worry about the infringement they have to still worry about full employment. we'll see tomorrow how it's going, but do you think they're doing a pretty good job? or do you have advice on how they should modify things? >> well, first, i think they're doing a very good job. secondly, i do think as you
7:19 am
point out, the situation is complex. so yes, they have a dual mandate. we have, indeed, seen unemployment come down at the same time, surveys show perhaps as many as too americans have left the labor force permanently, perhaps, so we have dubbed the sort of the great resignation. we also see that labor force participation is out more women than minorities. i think the challenges around the unemployment picture or labor market pictures is more complex than the headline number on other side, the dual mandate, i'd point out inflation has been running high there is a big debate whether that's permanent, transitory or somewhere in between i think most ceos expect inflation to come down over a period of time but how quickly and how much, not yet known. >> were you a monitor, do you
7:20 am
ascribe anything to money supply growth or end 2 growth, that that can disflood the system and cause a devaluation or inflation to valuation someone pointed out to me that we're still running much higher. pandemic level end 2 growth was 20%. it's come down, it's 13% that's still a lot but why isn't the dhar weaker than that? >> you know maybe you needed that, you know, the demand was down during the pandemic maybe you needed it. >> well, look, there is no doubt that currency markets reflect a number of things, importantly i think they reflect a sense of relative strength of economic outcomes and i believe, in part what the dollar is telling us is still expect the u.s. with various challenges we have to come through reasonably well and maintain growth. in fact, we started caulking about the ceo confidence survey
7:21 am
recognizing it down and in positive territory any median above 50 is positive and the readings are in the 60, 70% range, even though it's come down i think what the pricing marks are telling us similar to the survey is still a general sense of optimism, prospects, current and near-term future but not quite as optimistic as perhaps a little earlier >> is it the risk and inflation that we're underestimating it? given what we were just talking about, are you worried about.supply growth? do you worry about energy prices do you worry about wage precious, given trying to bring people pack into these jobs and people aren't biting yet at certain levels of wages >> the answer is once you worry about all of those questions, i heard steve a very good analysis of how energy markets have changed a little bit
7:22 am
now we find bus is the largest producer and has achieved self sufficiency. so we worry about that slightly differently than we used to. it may be that that feeds into pressures. with respect to wages and job markets, we have seen in our ceo survey that a majority around 55% of ceos are saying across their companies, it is very difficult to fill jobs that's up quite significantly from the survey for the second quarter. and so we see that we also see in the survey that around 60% of the ceos said they expect to be raising wages by numbers that may approximate 3%. which is pretty high in order to bring individuals back so we should watch the wage front, now my friend will be quick to sigh a retiring labor market and increasing wages is a good thing for people to be left back and be brought in so, yes, we should watch that
7:23 am
and inflation in general and supply chain issues, they are creating real problems, both domestically and internationally. i think i saw a report suggesting the supply chain challenges in germany may be slowing down the economy somewhat and certainly creating challenges for all ceos. so all of these things are in the mix. i think they explain maybe a part of why it is that the general level of confidence positive has come down somewhat. >> just in closing, roger, just in terms of things that are happening if washington, d.c., whether it's a debt ceiling. whether it's expansion, the proposed expansion of government versus the private sector. do you have any long-term concerns about that? how do you think we should protest? >> i think the debt ceiling points out among the major commission, all over the u.s. and they have a debt ceiling
7:24 am
and, in fact, with the european country that has one, it is a never binding. almost never binding i think i am concerned about how the debt ceiling every two or three years comes in to create uncertainty and which party is out of power trying to put the weight on the other party to move the debt ceiling forward. so i think we need to rethink the concept and this concept still has a place. vis-a-vis the question of expansion of the size of government, i this i the issue, joe, here, is we already talked about investments and, indeed, there are many places where we are. many agree we need to make investments in insfrurks but the old and new infrastructure there is a lot of economic data that suggests things such as early childhood education and generally from being in college can improve the economy. so a study a little while ago,
7:25 am
suggested if we increase the completion rate in college over the next 10 or 15 years, we could have an economy that could be 1-to-2% larger. so when it comes to expanding the government the question is, is this a good stremt that investment that gets paid off over time making a larger equity. >> roger ferguson, thank you >> thank you so much, joe. >> great to see you. >> nice to see you again >> facebook whistle blower frances haugen john for the has a preview of what's coming up >> joe, after the testimony this week, it's obviously what facebook needs to do next or is it we'll take a look coming up. ...aflac policyholders have been paid $37 billion directly... [aflac!] that's a lotta money.
7:26 am
♪ did somebody say money? he said aflac. well if they're paying out billions of dollars to help cover unexpected medical expenses, what's the difference? coach prime. what... no smoke machine? [aflac!] looks like aflac is ready for prime time. [eh eh eh! eh eh eh!] hey, coach to coach... what do i need to do to get one of those jackets? ♪ get help with expenses health insurance doesn't cover at aflac.com
7:27 am
paola needs a parachute. so, salesforce customer 360 unites your marketing, sales, commerce, service, and it teams around her. so they can deliver a great experience from anywhere. ♪ (whistle) ♪
7:28 am
[swords clashing] - had enough? - no... arthritis. here. new aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme. now the answer to today's aflac trivia question.
7:29 am
>> facebook whistleblower frances haugen testified in front of a senate committee and ceo mark zuckerberg issued a rebud buttal should the government make fundamental changes. john fort is back to weigh in definitively on what the deposit should do. >> frances haugen eviscerated facebook in that hearing there is no doubt they have to change first let's talk about teens not only did they talk about instagram makes body shame issues worse for a third of teen girls struggle she says algorithms sometimes lead kids into anorexia-related content and there is under age usage, saying safety enforcement teams are under staffed battling
7:30 am
misinformation and other problems but when the company shifted away with the stories and promoting posts from friends and family about meaningful social interactions, that's when the latest weirdness started, our most provocative and interesting friends started diving, now haugen argues facebook is required to prioritize engagement it will take the full force of government to do what is right for society, joe >> mark zuckerberg doesn't seem to believe facebook is doing anything majorly wrong here. it sound like click bait on steroids i've seen it before. so it's really popular to beat up and take a step back. research she's third of girls said instagram made them feel worse. doesn't it mean two-thirds made them feel the same or better in this idea that facebook is
7:31 am
looking to shovel kids on the platform users 13-to-17 are set to private by default tiktok doesn't do that you think they wouldn't do that either a major solution says facebook opposite up its data so researchers can understand how it is influencing society. sounds great a lot of us don't want to give a back door into our phones. right. you want to be careful about giving a back door into social media into all your interests, views and likes, let's be careful giving regulators access to our data from facebook, joe >> i didn't think about that that's a pretty good point you make, though, john >> scrub data, not our data directly, right? we're not talking letting the government to have a back door to see everything that becky quick is doing or joe kernon we're talking scrub data we'd like to see the rules show. it's a different scenario.
7:32 am
>> i think the question is, can you scrub the data and still have it be useful for research and that is a core question i think in this, that lead to the algorithm. >> show us the database because we want to protect your privacy? >> that's what facebook would say. >> exactly. >> i'm giving a couple arguments here >> but you are right i have body image problems and i have never been on instagram >> maybe there is a chance, joe, if you do get on instagram, you will either feel the same or better >> if it's like twitter, i don't know if that's chaos or not. >> do you have any self esteem say on twitter >> you usually swing me with both your arguments, this time you didn't >> not today >> usually you can push me both direction. this makes sense to me, we are
7:33 am
only making 33% of ouresers feel happy. >> well, i try >> it's a stretch. thank you. >> thanks. >> okay. good to see you, too a couple stocks to watch this morning, levy straus posting better than expected revenue. they say there are restrictions that prompted people to refresh their wardrobes and trade up from their sweat pants into their jeans, iac is buying people magazine, entertainment weekly, iac will combinehe t business, stay tuned you are watching "squawk box" and this is cnbc ♪ ♪ and you could fearlessly face the unknown. (kids playing) you still can. ♪ ♪ (blowing dust) when you have a rock you can depend on for life, you'll be unstoppable. that's why over 5,500 companies
7:34 am
rely on prudential's retirement and workplace benefits. who's your rock? our clients come to us with complicated situations that occur in their lives. for them it's the biggest milestone, the biggest accomplishment, the sale of a business, or an important event for their family. for them, it's the first and only time. we have seen this literally thousands of times, in thousands of iterations. ♪ ♪ i am vince lumia, head of field management at morgan stanley. whether that's retirement, paying for their children's college education, or their son or daughter getting married, our financial advisors need to make sure that they are making objective decisions, every step along the way. every time you hit a milestone, an anniversary, a life event, the emotions will run high. making sure that you have somebody, a team of individuals that have seen it before, have seen every circumstance and seen every challenge, and have your back when you need it most, is one of the most valuable things a financial advisor
7:35 am
could provide to a family. i am vince lumia and we are morgan stanley.
7:36 am
buried in receipts, invoices and other paperwork that's preventing you from doing what matters most? then get the all new epson rapid receipt smart organizer to scan digitize and
7:37 am
organize your documents and receipts. receipts go in and stress goes away. it's the only solution on the market specifically designed to extract and digitize key data trapped on receipts and invoices. and it integrates with financial software like quickbooks and turbotax. transform paper documents like contracts, tax records, warranties, wills, even recipes into searchable pdfs. so the information is always right at your fingertips, safe and secure. you can even turn business cards into digital contacts, and it scans up to 100 pages at a time. even different sizes in one batch. with this exclusive tv offer you'll get the epson rapid receipt smart organizer and over $300 in added value. act now and you'll also save up to $70 for a limited time. this rapid receipt has made a huge difference. it categorizes everything for me. it puts everything into the right files. i don't misplace a thing anymore. no more losing receipts means no more losing money. people everywhere love
7:38 am
the epson rapid receipt. organized at last and made so simple. you can use this for both business and household. that's the smartest move i ever made for my business. it even helps organize me for taxes and expenses. there's even a mobile rapid receipt you can use when you're on the go. this has changed everything. as soon as i get a receipt i just scan it, and store it away immediately right here into the laptop, no matter where i am. with this exclusive tv offer, you'll get a mobile or desktop epson rapid receipt smart organizer and over $300 in added value. act now and you'll also save up to $70 for a limited time. go online or call to get an epson rapid receipt smart organizer delivered right to your door. i came, i scanned, i conquered. epson rapid receipt - visit buyrapidreceipt.com or call. piece of cake baby!
7:39 am
businesses brace for higher electricity bills amid a surge of natural gas prices. giuliana tatelbahama joins us. >> reporter: there have been in the last 24 hours, we have seen a significant move lower, so european and uk natural gas
7:40 am
prices, wholesale natural gas prices in retreat. this big turn around came late yesterday as russian president vladimir putin came out suggesting russia is prepared to increase gas supplies to europe. this is hugely important for the european uk economy. the region is highly dependent on natural gas, natural gas powers our electricity, keeps the homes on and heated. there is a huge concern against this spike leading to a surge in electricity bills this winter. there the a number of factors that have driven the supply higher on the demand side, the economy is opening around the world have driven a surge if demand for natural gas, in particular in asia where the region is trying to shift away from coal. on the supply side here in europe and in the uk, there have been storage capacity issues inventories have been low and maintenance delays and infrastructure adjustments have meant that supply has been
7:41 am
constrained and the uk is particularly vulnerable because we have very limited capacity and which means we operate on a fear just in time system so consumer's businesses are bracing for a very difficult winter and this whole episode has really highlighted how dependent europe the is on russia >> we will bring in goldman sachs head of research he is out to talk about comments from energy secretary jennifer granholm who said yesterday the united states is considering cooling off a surge in gas prices let's talk through this problem first. this is yet another of the huge supply issues that we're realizing we have right now. it's create i by more demand and troubles with alternative energy we were hoping would lead to more better results than hacked
7:42 am
at this point. where are the possible places of relief from this we heard from putin yesterday. is he the biggest one? >> let's talk about what is driving this it's the same dynamics impacting uk gas, european gas, the coal market in china. the oil market it is structural under investment in the ability to supply and deliver these commodities. particularly hydrocarbons in the face of decor banization we like to call it the revenge of the economy simply, core returns and capital is redirected, choking off the capital needed to grow that supply base. then you overlay esg issues on top of that you create this very significant structural impediment into supply then we had the big increase in demand following covid that exposed all of these supply constraints. inventories are brought down to very low levels, leaving the mark very vulnerable to any type of supply or demand instruction. at the core of this energy crisis in europe was simply the
7:43 am
wind quit blowing. you didn't have that wind power generation you had to replace it with natural gas. no supply, no inventories and boom we have a spike in prices so what's happening in the oil market is sim there are to what's happening in the uk like i say, uk and europe is a glimpse of what we think is going to happen across the rest of the commodity complex so it's bringing us back to you know the u.s. comments yesterday and last night, is you know, the deficit in oil is so large that neither the u.s. administration nor opec can do anything in office that's why there is a lot of upside rick in oil near term which is why we maintain our forecast of $90 a barrel. >> so if the u.s. can't do anything about it with the strategic petroleum reserves, what would make a difference >> there are two things, you bring on supply or destroy demand, take demand out of the system we are seeing demand obstruction taking place in europe
7:44 am
lots taking place in china i want to emphasize a lot started with china in the lack of investment in coal. they didn't have coal to meet the power demand, they imported oil, tightened up the global market and did a spreed e spread to europe. the key point is you got to take supply, adding the spr, which is a very complicated procedural process to do would only marginally help. you need to have, you know, large-scale investment in these supplies that's why this the structural in nature. you know, our new long-term forecast for oil is $85 a barrel i want to emphasize, there is a lot of rick to the upside. we have been arguing this is the first gamings of a commodity super cycle. everything has indicated, hey, this thing is getting a lot tiert than we thought initially much sooner. >> look, if the way to do sit by investing and making sure you are drilling more, that doesn't seem really likely from any of
7:45 am
the big oil companies at this point. >> i know we now know you are in the 80-$80 a barrel range and we don't know where that equilibrium price s. you can think about it with the esg backdrop the level you get this industrial i drilling to take place is substantially higher. then we tapped the oil services industry there is the question of cost inflation, is there the labor? the trafficking supplies there i want to emphasize, it's the same if we're talking oil drilling, metals in mining, the entire complex or old economy. we have fought seen enough in investing. as a result, i want to make a result about the transitory nature of these stocks is when
7:46 am
your supply chains are depleted, it leaves these markets very vulnerable for normal shocks what is a tail wind? you need the wind in europe. so this may be transittory, the probability happening and again and again becomes more consistent >> if you are right and oil goes to $85 a barrel. what will that mean for gasoline prices it may be the surest at least in the united states. we are talking the national average. that doesn't mean some places aren't paying north of 4 or $5 in in straight right now. >> when we go back to 2018 at similar levels, the amount of noise you heard from consumers is tom daschlely greater than it is today what that means is that when we
7:47 am
look at the incomes, whether it's coming from redistribution policies that are kern currently in price or increased carriages you can 16 these higher prices in a much more robust fashion. gasoline prices in europe and france are $2 a litre which is unprecedented. one of the key witnesses you don't hear the news on both sides of the atlantic, in europe, they have subs days that would normally be vulnerable which protection them. i wanted to emphasize the ability for the system to sustain higher prices is much greater than we've seen in the past. >> great, thank you for sching me still to come, cnbc's first ever leadership exchange took place yesterday him the main focus was managing through uncertainty. the author of "winning" suzee
7:48 am
welch joins us she has highlights b roportman will talk to us about infrurks tacks, the debt ceiling and much more. we'll be right back. ♪ there are beautiful ideas that remain in the dark. but with our new multi-cloud experience, you have the flexibility you need to unveil them to the world. ♪
7:49 am
every single day, we're all getting a little bit better. to we're better cooks...ld. better neighbors... hi. i've got this until you get back. better parents... and better friends. no! no! that's why comcast works around the clock constantly improving america's largest gig-speed broadband network. and just doubled the capacity here.
7:50 am
how do things look on your end? -perfect! because we're building a better network every single day. it's all about culture that was the main focus of cnbc's first ever leadership exchange we brought together a panel of 12 ceos from a diverse set of businesses from ground-breaking biotech to old school utilities
7:51 am
to talk about managing through uncertainty. >> we are bemoaning this logs of human touch and human contact. the ease with which we can pop into an office and i'm beginning to see signs of wear on that and that's something that concerns me greatly. >> it is important that we create an environment where everyone feels they can bring their spouse to work that's harder to do over zoom. so as we think about return to office in a hybrid work force, that time in person is going to be precious and we've got to really use that for development, for nurturing, for ngagement and are thinking about the different ways we'll do that >> i really worry that how do you continue to maintain and continue to change the culture that you really value ar as the world changes in an environment where 100,000 will be hybrid,
7:52 am
even if it's not well orchestrated, have no idea to build that culture >> things are accelerating, happening so fast. we're living in a world of doing years. it feels like change is happening seven times the pace >> moderating the conversation with cnbc contributor suzee welch. she joins us to share only color, suzee, i want to talk about all this, what you learned. i couldn't help think of that when i heard i don't see you. where are you, suzee are you here >> i'm here, joe, are you there? >> oh, there you go. >> there you go. >> there we go >> and suzy, i think about jack probably every day you know you the obviously you do was the, did i last see you or was it like march?
7:53 am
it was 2020 and march 5th. i am wondering what jack the last two years, i wish he was here i could use his advice and counsel and everything else. what do you think the last big thing i did before we all hunkered down for 18 months or whatever it was at st. patrick's cathedral? >> that was the funeral. march 5th. people have asked me many times during this period of incredible uncertainty and zero visibility. what would jack say if he was a seeer who could be the one to crack the code to this but i remember 2008 crisis, jack wasic like, there is no visibility i have no idea what's going on we're in the fog he had so much huh michigan we would say the same thing many ceos say you got to put one foot in front of the other, experiment total candor, say what you are thinking. i think that he would be very
7:54 am
happy about how good business is right now and how it's picking up he was always so optimistic and saw the upside of everything so he would say this is an incredible opportunity to korea it the change you want in the organization but he would be as flummoxed as everyone has been over the past 18 months, by how to handle this. >> no doubt, he would be celebrating american innovation and the development of these vaccine as quickly and now maybe we have therapeutics coming. i mean, we're, you know, immensely proud of what american innovation is capable of so what's -- i mentioned earlier we got thrown for a loop we that vaccine covered everything, back to work and the breakthrough cases and vaccinated people possibly spreading covid. we're seeing it's a work in progress we may be dealing with this on a
7:55 am
seasonal basis and endemic i think that colors everything that the ceos you are speaking with when we talk about return to work and anything related to work >> they talk about management. >> okay. >> we have a problem, now we totally lost her we will try to get her back quickly. b you remember march 57g9. on the one hand, i'm glad jack didn't see this horistic period we went through. that was the last time we were all if one big room together and we all, remember march 5ing. we didn't know what was in front of us at that time when we lost jack, who was a friend of the show and so close, a personal friend of both of us
7:56 am
>> yeah. jack and suzee both have been great mentors. >> i understand. okay suzee. it froze, i'll fought sure exactly where you were when it froze, but please try to pick up where you left off >> i don't know what you've heard, but i was talking about the leadership exchange. were we there or were we still talking about jack >> i agree the leadership team, it's changed >> sort all right. so, we put these 12 ceos together you are talking about i am managing right now, it's an exercise in managing during untern e certainty there was a moment during it i thought to myself i remember when i was a young reporter and we would sit around and we would say this is what we wished the leaders to be walking about how hard, wanting to be seen and heard as an employee and being involved in decision nos matter where we were in the organization this is what they were talking about, they were saying everything has changed things are faster, there is less
7:57 am
visibility and people are tired and have changed fatigue and, therefore, we must be as vulnerable as we can be, as authentic as we can be we have to include everybody with total transparency. it's a total garden leaders of eve. this is what people were saying leaders would be thinking and feeling. this was the general consensus. >> we need to go longer, suzee, we got thrown for a loop is that zoom >> you give a zoom quote that does happening, great to see you, let's do it again soon and be able to talk more and i'm sorry, i haven't seen you to bring up jack. that took some time, too >> i think about him every day, so it's okay >> is happy still around yes, sir >> behind me, in fact. >> beautiful and how much, he was not a dog person next thing you know. >> he's much happier.
7:58 am
>> it's the same way i am with dogs. >> great to see you, suzee when we come back, senator rob portman will join us to talk about the latest out of washington on the debt ceiling. and jeremy siegle breaks down the possibilities this is cnbc this is cnbc
7:59 am
this is cnbc gang, we need our paranormal services to be more versatile. i know a group who can help us. not those new age shamans again. i'm talking world-class business experts. data geeks, strategists, tax advisors, the works. what about technologists? 40,000 strong, baby. we'll be able to hit our projections both fiscal and astral. this company sounds great. what do you think, agnes? looks like it's unanimous.
8:00 am
8:01 am
. good morning, futures are solidly in the green, as we make our way towards the opening bell it's not far off coming off, by the way, on wednesday when stocks turned around mid-day to sessions higher why did that happen? one reason, some hope for a debt ceiling deal in washington we will speak with ohio senator rob portman about where he thinks negotiations should go from here, from where we are right now. what is wrong with the formal supply chain cnbc is taking you inside the gumd-up process of getting things moved around the world. if minutes, we will go live to one of the most critical spots in america our "squawk box" begins right n
8:02 am
now. good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick andrew is off today. we have been watching the equity futures. it's strong. dow futures indicated up almost 300 points above fair value. the nasdaq is up by 183 and the treasury market we continue to watch the yields there, it's been relatively flat for the ten-year at least this morning the ten-year yield is sitting flatly 1.425%. >> a little up to date 90 minutes until the opening beshlgs dom chu joins us with the top three mark movers. dom. >> a couple interesting one to us note this morning that are not traditionally the megacap s&p 500 the ones we talk about they are moving. the canadian-based cannabis company is up 2.5% in the trade.
8:03 am
it reports an adjusted loss, revenues did fall shy of expectations all those expectations for revenue growth, they were still 43% higher than they were the same time last year. tillray 42% revenue growth over last year a. little positivity in a name beaten up from the highs earlier this year. chinese electric vehicle maker neo, those shares are up 5% to a buy rating with a $56 price target they're pointing to new opt minimum about the et-7 luxury model. we go head-to-head with tesla, fisker and watch neoshares up about 5% right now as we do hear a check on the most popular cirque surges on cnbc.com today's is a little discs becky,
8:04 am
joe, normally i show you highlightss from the top 10. i will show you something specific they were both, in the top ten they have been in the top searches for a while i want to point out what's happening with three crypto currencies, bitcoin price down 1% algorand and solana. that list of the top 50 rarely has crypto courses out of the etherium in this case, there is no etherium in the top 50 algorand and solana, i watch this, i have not seen them in the most popular searches. becky, algorand solana in the top 50 there may be growing interest. as i view the rest of the top 50 highlights there on my twitter feed back over to you
8:05 am
>> why do you think that is? >> i don't know, as you seen, first of all, i truly believe a. lot of traders in crypto currency believe bitcoin is at the epicenter, for good reason the reason why is as you are seeing interest if bitcoin start to rise along with the stock price, there are some traders out there who are looking for the next big thing and that might not necessarily be just bitcoin. it could be etherium growing places like algorand and solana may signal some traders can find some moral that, that outperformance over what bitcoin is doing so it's an interesting trade i don't talk about crypto currencies often but i watch this data every day, i never see algorand and solana in the top 50. >> i wonder if it's because gary gensler, the head of the sec said the day before yesterday they're not going to shut down
8:06 am
bitcoin, coins, right. so if you've got at least gary gensler who has frustrated some of the crypto traders with what he's said they will do an regulate he said, they will not ban it. maybe that's enough for people to think, okay >> so, yes, i think that's absolutely, beckgiy, a part of the story. i wonder why they got more clicks. >> thank you we'll see you later. meantime, republicans offer a short-term debt limit. it will them particularly push off a chance of the u.s. default. that was starting to rattle the marketsch joining us is senator rob portman. senator great to see you today. >> good to see you, becky. >> so the idea of defaulting on our debt is one that has caused a lot of concern not just from places like the treasury secretary and the defense secretary, but business people, especially those who
8:07 am
know how the markets work and who are intimately involved in those things like jamie dimon saying yesterday this would be pretty catastrophic and stupid to get this close to it. what are your thoughts on the default, this deal that's been out there and been offered and whether we should even be messing around this close to the deadline of october 18th >> el with, we have never defaulted. we shouldn't default we won't default the question is how do you do it the extension of the debt limit has always been an opportunity to talk about the underlying problem, which is we are spending too much a lot middle eastern -- a lot more than we are taking in. the caps we are putting on spending so it's designed to be an opportunity to look at the underlying problems, republicans are saying is simple, of course, we will extend the debt limit. we have to make sure it happened almost entirely the increase in
8:08 am
the debt limit other than normally would have to be done, one is the roughly $2 trillion reconciliation bill, no republican support, the second is the anticipation, the democrats have that they want to do it again, this time something between 3.5 and probably 6 trillion if you look at the numbers. so republicans have said simply over the last 24 hours, we're not going to get in your way you got to extend your debt limit because the increase is being caused by these again partisan reconciliation packages republicans don't want to increase the spending in these areas. so i think it is an appropriate debate to have. >> here's the question, look, you say you will not get in the way by filibustering when they get it to the floor, are you right, this was always there, it's existed through history as a time to talk about and have
8:09 am
both side come together. it doesn't seem there is much conversation or a chance that that is happening. bernie sanders wants to get rid of the filibuster and say if you guys will take the nuclear step no default we will figure out, let's get rid of the filibuster and change the senate. this is a by-product of there being no conversations between the two side or real room for any sort of compromise >> well, you're right. you are absolutely right yesterday, there was a threat. i think it was real that democrats were going to in effect throw up the filibuster and have as you say no debt limit, because they don't want to have the conversation are you rights we don't communicate as much through the party as we should it's as to how much we should be spending as a nation we are approaching 30 trillion in our debt.
8:10 am
again if you look at this most recent reconciliation package, it's not only increasing spending, but taxes to the point that we will hurt our economy to get back on track, so that's the difference it's a philosophical difference for taxes and spending. >> it's still a problem for the democrats. they can't get their entire party to sign off. you got two seniors holding out from the democratic side i think that was a part of the problem, too the i think joe manchin looked at this and said, okay, if we talk about a debt default, that would mush him to say in the filibuster where does this come back down is it two people deciding between that party and deciding what is going to happen? >> right the answer is pretty clear that democrats have the ability to provide the votes to be able to get this done. they have a mechanism to do it in effect, if you think about
8:11 am
it, there is a carveout for the filibuster for debt limit. it's called reconciliation you can do it, it deals with a bug, either taxez or spending. republicans have basically said, we're not going to get in the way. we will leave a lot of our rights to the time to debate issues or notices to take it to the budget committee so go ahead and do it. we're giving you the ability to be able to do it you can do wit 50 votes, under reconciling situation. it's an existing carveout in effect, not just for debt limit but other economic issues. the question i have is why don't they just do it? >> rob, so they will have that chance again if december and now we got more time they said they didn't have time to do the reconciliation so now they have more time but they're saying they are definitely not and sanders says absolutely not not going to happen that way so when december comes around, mcconnell probably still is not
8:12 am
going to do it he will filibuster the democrats will not do it using reconciliation, do you think these various election we have in november that can indicate the mood of the country, do you think that's going to advantage one side versus the other do you think that's how this gets rectified otherwise, we will have the same argument we are having now in december >> that's why first the idea was to extend it to december, 22 beyond election. one you know this when you ask democrats why they don't want to use reconciling sishlgs they don't want to assign a number to the debt limit increase. under reconciliation you have to say how many trillions of dollars, you will increase the debt limit we will have an additional 3 to 5 to 6 billion, 1, 2 trillion between now and december 2022. so they don't want to assign a number to it
8:13 am
that's what the american people deserve, transparent sichlt that's what the american people want to know, congress is extending the dead limit and putting future generations at risk so let's put a number to it. so i don't think that's a legitimate excuse. so my hope is what we have here is an opportunity for us republicans not to get in the way of you know the procedural issues that are involved in reconciliation it does take some time we will be willing to wave those, everybody agrees to that. let's assign a number to it and let the american people know what's happening here. >> is it 2022 or this december, rob? >> well, the latest proposal floated was for this december. you are correct. the previous proposals by the democrats were to take it out to december 2022. >> yeah, but this one, is it's december of 2021, do you think that something will change this
8:14 am
november that advantages one or the other side by december so that we don't have this talk again? >> well, i think the notion there is, joe, by that times, we will know what is happening with reconciliation one way or another. we know what it will be. i think even at that point, the american people should have the transparency to say what are we increasing it to, not just a suspension, to say here's the date we will keep taking into account what the debt s. i don't think anybody wants to go over the precipice. i do think this is an opportunity to have this debate and discussion if terms of its impact on the 2022 election, joe, absolutely, this is going to impact the election i don't think the american people are necessarily following the day-to-day like you all are or i am. but they do get it that we are
8:15 am
spending our way into a financial crisis and there is a fundamental philosophical difference in terms of the taxes. what democrats are saying is they want to spend a lot more and tax a whole lot more the taxes don't end up to the spending there will be debt on top of that the spending is something that i think people are two and two but any of the tax are problematic when you look at the joint committee on taxation, this does fall on middle class americans, no question about it so analysis is out there for people to see. if you make less than $400,000 bucks a year and are you told by president biden you mr. not be hit by this reconciliation tax bill, it's not true. go to the non-partisan group in congress they've an leads and this will fall on you, too >> senator portman, thank you. we will hope for the best and check in with you soon.
8:16 am
>> tanks, becky. coming up, crypt top ceo michael novogratz, below 54,000. now today cnbc is taking you inside the broken supply chain, a live report from one of the most critical points in the u.s. stay tuned you are watching "squawk box" on cnbc
8:17 am
8:18 am
working at recology is more than a job for jesus. it's a family tradition. jesus took over his dad's roue when he retired after 47 year. now he's showing a new generation what recology is all about. as an employee-owned company, recology provides good-paying local jobs for san franciscans. we're proud to have built the city's recycling system from the ground up, helping to make san francisco the greenest big city in america. let's keep making a differene together. wanna help kids get their homework done? well, an internet connection's a good start. but kids also need computers. and sometimes the hardest thing about homework is finding a place to do it. so why not hook community centers up with wifi? for kids like us, and all the amazing things we're gonna learn. over the next 10 years, comcast is committing $1 billion to reach 50 million low-income americans with the tools and resources they need to be ready for anything.
8:19 am
i hope you're ready. 'cause we are. . welcome back to "squawk box," everybody, we got some news in from pfizer and biontech the company says they submitted for emergency use of the covid-19 vaccine for children ages 5 to 12 this is something we knew they were going to be doing the fda said an advisory panel to talk about authorizing this for kids ages 5 to 12. so that's a little under three weeks from now, joe. >> okay. that will be here before you know it. >> coming up, the wharton schools jeremy siegl talks about the market% and what's behind the latest spike perhaps and
8:20 am
bitcoin, for that, we will talk to mike novogratz. stay tuned you are watching "squawk box" on cnbc cnbc >> make fitness routine with pure protein. high protein. low sugar. tastes great! high protein. low sugar. so good. high>rotein. low sugar. mmm, birthday cake. try pure protein shakes. with vitamins and minerals for immune support. it's a thirteen-hour flight, that's not a weekend trip. with vitamins and minerals fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we boar excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style.
8:21 am
♪♪ ♪ i'm a reporter for the new york times. if you just hold it like this. yeah. ♪ i love finding out things that other people don't want me to know. mm-hmm. [beep] i just wanted to say... ♪ find yourself in these situations and see who you are. and that's just part of the bargain. ♪ there's software. aand then there's rt industrial grade software, forged from decades of industrial experience and insights. . . >>r entire operation. so that everyone, in your boardroom and beyond, speaks the same language. honeywell forge.> industrial grade software.
8:22 am
new this morning, invesco and mike novogratz and galaxy digital are teaming up to focus on block cane and the crypto currency, joining us with details as well as comments on
8:23 am
the sharp rise in bitcoin over the past week as galaxy digital ceo mike novogratz, every couple of days, we got something else that might be important in trying to factor out or figure out what's going to happen this time we had china and the yuaf, it went down, you said it held 40 and now we got to 55 after gensler aide said that the agency is not going to bank crypto then you have switzerland out with some comments, you've got all these little incremental thing. what happened to run it back up above 55 >> you know, a couple things i was up at 5:00 a.m. talking to 4,000 people at token 4:29 in london the amount of energy in our space is crazy right now we see capital coming in from all sides, you will see sooner,
8:24 am
peel probably announce the first pension funds getting into this space, so we kind of have gone over the tipping point where were feels short, right? total market cap crypto as a percent of global wealth is a half opercent. if you think about it, you are short your index, and post-people are still at zero. so i think that's going to go much higher than a half%, but you are seeing basically money coming in from all sierksdz it's a macro thing. if are you a macro-investor, you want to focus on crypto, you say that's a bad place nor expectations but it's mostly a few participants and enthusiasm for the space. >> we, you know, we have people wanting us to mention this, cointhis, coin that, that asset. it's ha ready to even keep track
8:25 am
at this point, mike. what are we supposed to think about that these aren't all bitcoins. not all have the future of bit count. is it the "wild" west and does it remind you of pets.com? are some of these things going to hurt people >> i think the simplest way i break it up, bitcoin is digital gold it's won that lane it will continue to be adopted and paint more bulls mark cap. right now, it's 12% gold i think it will get to 100%. so bitcoin has its own lane. the etherium, solana, luna, cosmos, algorand, all those are the technology play. the block chain where things get processed. so we call those level 1 solutions. those are really technology bets we invested based on adoption. how today good is the product,
8:26 am
how good is the community? this has gone from being just a macro-trade, right, go long assets, to kind of a long shore equity trade as well, pick the right pro to comes and have a methodology on why you think some things will be better than others so it is, you know, it's not for the faint of heart, because there is a high volatility asset class it's so new. my advice to be stay simple unless you have a whole lot of time and expertise to explain the difference >> would you like just to have a bitcoin etf or a crypto etf here you are kind of approaching it in a circular way. when is that going to happen what are you doing here? zp >> listen, this invesco is exciting they manage a trillion-and-a-half dollars. they have over 1,000, 1,500 salesmen going out to tell this story and sato this new etf right is really a combination of
8:27 am
some direct plays in crypt o. so they can have other place, direct companies in the crypto space and companies from the old world that are doing a lot of crypto you can guess who they are so it's really the way for retail investors to best on the block chain and the crypto ecosystem. i do think gensler will finally get off the stick. we will have a domestic u.s. etf on etherium. i'm not sure when i had the silver wall. this is actually a broader play that allows you to play the holly ghost system so it's quite frankly why we set up galaxy? giving us a chance to play the whole ecosystem. >> what do we not, we say it's what we don't know, we don't know what do you see in the next two, three, four months, that we're not anticipating for crypto.
8:28 am
it can be china, more companies adopting it. more moves what do you think is going to happen that's going to dictate the movement where do you think we'll be in three, six months? >> not to sound like the ever bullish guy that i am sometimes accused of being but i literally see a scenario, where we take out the highs in bitcoin. we have one of these parabolic moves in all of crypto going into the fourth quarter. it's like the kentucky derby that turns the corner at the end and always runs the fastest. in investing, hedgefund investing, remember my 12 years in the macrofund the access that are ahead in the fourth quarter usually have great finishes everyone piles on and pushes the evaluations higher i see that happening right now this confluence of that, the surprise will be oh my goodness, how do we get to 80,000 to 100,000? how do we get to 5,000 in
8:29 am
etherium that will be the surprise. we pushed a lot to the downside, pro china, pro regulation. and the market continues to hold and it's holding because new money is coming in there were $17 billion of new venture capital in the first half of the year it's a tremendous inflow of both talent and money >> does gold go, too does it go along for the ride or sit displaced by there >> i think gold is getting displaced, quietly you know, gold is 17.50 when bitcoin got launched and it's 17.50 today. and so early in the year, i have a decent portion in gold and i finally kind of gave up on it. i think people buying gold were buying bitcoin we're still only 12% of gold and so i think there is a long way in this replacement trade.
8:30 am
>> it's interesting if you view it differently i think you can read a thousand pages on what money s. you get to the notion that it's a ledger and what you really need is something that represents that ledger and gold represented it well, it was immutable, scarce and pretty and represented for a long time. but you get a lot of the same attributes with bitcoin and some better you can't send it through borders through space. so, it's, you know >> people forget in the u.s., they watch your show in the u.s., it's mostly u.s. stocks. crypto is global it's the first global asset class we've really had, where it's more important to people in nigeria than to people in the united states. it's almost all over the world people are having these kchlts i was remembered of that this morning when i logged into 4,000 people in london. >> it's a ledger
8:31 am
money has always been a ledger a way of keeping track of something versus what other people are saying. distributor learn says thanks, mike all right. we'll see you later. jobless claims are out let's go over to steve steve, what can you tell us in. >> 326, becky. that's better than expectations of 345 down 38,000 from the previous week. ford is moving average 344 that's up a bit accounting for the surge we recently had, in short, unemployment rate 2%. that's about where it was, if i'm not mistaken that's a decrease of 0.1 from the prior week i'm looking for continuing claims it looks like it's 2.7 that's down 97,000 the one thing i want to do as soon as i can get this clunky computer to get there is look at the total number of claims, which is down because it had the people falling off when the extended
8:32 am
benefits expired i got to scroll here a little bit. >> toe seeing 2.8. >> that's continuing clarification yeah, i'm looking for the toll here. anyway, it's a good number people think this number is going to continue to improve have you 11 million job option we will get the jobs number tomorrow, looking for right around 500,000 and change, nothing in the high frequency data or the adp expecting a slightly stronger number so we're headed to that the other thing i think that's worth pointing out this morning, becky, is i think the boar for the september number when you talk about the federal reserve tapering is pretty low they want to see strong job growth there it is, 4.1 million down from 5 million the prior week and i think it was up 11 or 12 million. that's reflecting the extending
8:33 am
benefits we'll see if that brings additional supply to the mark. >> better than expected adp numbers, better than expected jobless claims, what does that lead us to think about the jobs numbers tomorrow is there going to be a common theme or could it be completely off the charts >> i think there is two things going on that you just said, becky. i think it's important to parce it the weird thing is we have more data than we had before. so the jobs number, remembering will be the week of the 15th or the 18th this time around. that still going to reflect a couple things. there was a bit of uncertainty of people going back to school still had extended benefits for that month we will have a good number, not a great ev off the charts number this jobless claims number along with the high frequency data i recorded yesterday showed an increase of employment i think it was the home-based numbers.
8:34 am
i get confused one of the two showed an increase in employment in the second half of the month, things are improving now, becky, improving somewhat rapidly we seen additional services, people are going out to dinner again, doing some of that stuff we can do another barometer. a good number, not a great number but october is looking better now. >> steve, thanks. when we come back, we will take a live look inside the struggling supply chain. cnbc is covering this coast-to-coast around the world. frank, what do you have coming up for us? >> reporter: hey, good morning, we're in shipping yard for cfx they move containers in the west coast ports, consumer goods like care bears to locations east of the mississippi, coming up, we will show you the delays here and why
8:35 am
it's taking longer and longer and things like care bears to store shelves in your area that is much more coming up in "squawk box. ♪♪ when the only thought on your mind ♪♪ is “finally” ♪♪ this is financial security. and lincoln financial solutions will help you get there as you plan, protect and retire. this is lincoln financial. paola needs a parachute. so, salesforce customer 360 unites your marketing, sales, commerce, service, and it teams around her. so they can deliver a great experience from anywhere.
8:36 am
♪ (whistle) ♪ ♪ ♪ so thi can turn anyonegreat expeinto a beach bum.ere. i bring families together for a living. i make memories for people i don't know yet. i know this view is too good not to be shared. i am a vrbo host. ♪ ♪
8:37 am
the pandemic upended the
8:38 am
noble supply chain, factories shut down, workers had to stay home at the same time at the manned for many products was surge. they are helping to stem the worse health effects of covid, the business of producing and selling goods may be at its strained point, the team of reporters is using a well known toy the chinese made a plush care bear to heil this global problem. >> reporter: the challenges for the global supply chain begin on the factory store. a stronger yuan mean the cost of making a care bear is up 25% this january ahead of christmas, boxes are stacked here for one-to-two months compared to no leading time before the pandemic. >> we don't know the shipping space. >> reporter: once the bear leaves the factory it's 15-to-20 days to arrive at a u.s. port,
8:39 am
having these products stuck in china is just the beginning. >> i haven't gotten that care bear yet maybe it's on this ship. it is so busy, today there are 65 ships parked out here, it will take ten days to get unloaded yerkt long shoremen are not working 24/7 >> we can work 24/7, problem is, where do the truckers take their cargo? >> reporter: 30% of daily truck appointments go unused because warehouses up the road are full. that means $650,000 containers full of goods even on ships or on the docks waiting for someone to come move them. >> reporter: we are looking to move constainsers. afl host care bears will stop in chicago east of the mississippi. these transfer points are backed up because there is not enough
8:40 am
workers or equipment to haul them away. >> labor shortages across the supply system is causing problems. >> reporter: also trucking rates are 91% higher tha pre pandemic, making the trip to retailers more expensive and take longer. >> you can take twice as long for this care bear to get from a chinese factory to this express store in massachusetts it cost basic funds 620% more. >> we're adding a 48 surcharge at the end of the invoice, the retailer will have to determine whether they incorporate that into their selling price. >> reporter: this toy store is selling care bears for 16.99 they have enough inventory for now. >> the supply cane issues are very real. we are seeing it's taking weeks-to-months to get product into the store so we encourage you to buy now if you see something that you want to give this christmas.
8:41 am
>> right now we will speak to one of those reporters that you just saw in that piece and dig into a critical link in the supply chain, frank holland is covering the rails and the roads. he joins us from the suburbs. >> reporter: good morning to you, joe, the top lanes all around the country seen their rates double since 2019. right now we're in the container shipping yard for cfx right here in the chicago suburbs all the rails use this as a key transfer point to move containers from west coast ports to east coast locations. take a lookch this is drone footage that looks how they have turned into defacto storage containers because of a shortage of workers and equipment they use called intermodal chassiss and a shortage of the truck drivers, themselves. the result is it's declined sharply despite rails being
8:42 am
traditionally chieper. because they are shippers, they turn to trucks and according to csx, these delays will last a while they are headed to an unprecedented eport. >> there is three peaks in the peak season, an international, a domestic peak and a parcel peak. each of those peaks kind of peak at specific times and they each also kind of dissipate and the other one kind of kicks in but during this season, they're all going to be kind of peaking at the same time >> reporter: and with demand just really soaring, rates to move things by truck is up 91% over 2019 levels, making it more expensive and taking longer for those care bears to get to store shelves where you are. back over to you. >> what does the rush in could have been container shipping mean in your view? >> you know, they definitely
8:43 am
have price in power. if you look at the revenue per container that each of the rails saw last quarter before things were jammed up as they are now all that is double digits. the question is will we see increased labor? everyone will be watching the earnings later on in october >> greeting that some of the big retailers, oem depo and others are chartering their own ships to get around and deal with this mai-mai make sure the stuff is there. it will be expensive, big retailers have pockets what it will mean in terms of the inflation and the consumer, did anybody mention that or are they so busy trying to get this there, they'll worry about it later? >> i think across the board, different companies mentioned the increased cost of supply cane and increases not only are some companies charting their own ships, some are using the kind of shifts things used for iron ore and
8:44 am
other commodities. instead of putting them in containers, they're putting them in on ships and looking for any capacity to find to get goods across the water and across the country once they're here. >> the care bear you had in your hands, it's such a blast from the past i remember finding those 35 years ago from my cousins. you better hold onto it while you have it. >> reporter: is this valuable? should i go to ebay. >> yes, shhh, don't tell anybody. i think have you your hand on some gold at this point. >> thank you. >> transformers. >> yeah. when we come back, jim cramer's first look at the day ahead and jeremy siegl will talk stocks, inflation fierce and the ongoing leak and wall street stay tuned "squawk box" will be right back.
8:45 am
"squawk box" will be right back. feel stuck with your finances? move your money to sofi. ♪ ♪ ♪ ♪ ♪ ♪ move your money to sofi. earn up to $930 when you download the app and feel what it's like to get your money right. it's another day. and feel what it's like and anything could happen. it could be the day you welcome 1,200 guests and all their devices. or it could be the day there's a cyberthreat.
8:46 am
only comcast business' secure network solutions give you the power of sd-wan and advanced security integrated on our activecore platform so you can control your network from anywhere, anytime. it's network management redefined. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities. that building you're trying to buy, - you should ten-x it. - ten-x it? ten-x is the world's largest online commercial real estate exchange. you see it. you want it. you ten-x it. it's that fast. if i could, i'd ten-x everything. like... uh... these salads. or these sandwiches... ten-x does the same thing, but with buildings. sweet. oh no, he wasn't... oh, actually... that looks pretty good. see it. want it. ten-x it. yum!
8:47 am
. to the new york stock exchange, jim cramer joins us now. jim, will you talk about some of the rolling correction we seen, then again the overall mark yesterday had another comeback i think you were talking about bike some tech stocks only the most recent dip. >> something has to happen negatively for people to sell them they are the antidote to high inflation. i keep reading, people say you got to get out of tech and be in the reinflation trade. you got to own freeport moran and make the big move over to eog. no, the tech stocks work and also by the way the biggest news yesterday what was the pepsico second-day rally people are excited so i don't know, look, can these stocks mount another comeback? i hate a big opening there is a real momentum with the idea that maybe these companies do better than we
8:48 am
thought. next flicks leading that whole route from do you have any, a change of heart about energy, though, jim, at this point is it a caliber of trade at 24 >> well, here's what i think i think that chevron because mike wirth is spending it so they're de-carbonized at 5%. that's a good yield him they're a very well-run company. i think that pioneer is good there is a note about diamondback that's good. i think returning capital to shareholders are winners they're also very really aggressively trying to get decarbonized i know it's hard for oil companies to try they have drained themselves for the first time ever. wow, 6%-yea yield i like that, i think it's a good
8:49 am
stock. the answer is yes. >> 40% of the electricity in coal it's hard to carbonize that. >> what's the fact that the germans are always lectureing about our pollution, but they generate a huge amount of greenhouse gas what is that and we take it, too. >> the germans got more than we do and then they make a deal with the russians for natural gas and not ours but they get away with that, too. don't want to get away with whatever you say >> i get away with a lot ought everything, you are right, jim. >> are you in a big country. she has that going for you she is on the way out. in a few months, she'd be like you. >> did you ever take the call flower pretzel >> let's not go there. i'd like to tell you, this ad, no wonder people, wells fargo is taking it to more than 2,100
8:50 am
they do not fail everything, the chipotle hours need cutback they can't find enough workers >> thanks, we'll see you soon. >> absolutely. >> we want to remind you about new cnbc investing club youcnbc, or just point your phone at the code on the screen and it will take you right there, just like a menu at a restaurant. >> magic the futures this morning pointing to positive opens the possibility of a short-term debt limit increase kind of calming investors' nerves for now. joining us is jeremy siegel from wharton school of business you're usually pretty bullish, but last week you started sounding more pessimistic. you're worried about the things we've been talking about do you think that's climbing faster than maybe the fed realizes at this point >> absolutely, becky, and so i think it's going to be a
8:51 am
challenging quarter, this fourth quarter, maybe into the first quarter of next year i think inflation will run a lot hotter than what the fed thinking you know, next week wee get the cpi, 0.2, 0.2 on the month, but with you see costs going up everywhere i think there will be pressure on the fed actually not only to start the taper, they're going to announce that, but to taper faster than what the market thinking that is where i think the market is going to be a little bit surprised and challenged and say, my goodness if they have to taper faster, that does mean that the rise in interest rates is -- you know, speaking to joe's earlier comments about an hour ago about the money supply
8:52 am
i've been harping about the money supply explosion over the last 124 months. it's unprecedented the liquidity in the market. i mean, it's -- it is feeding into prices, and that's inevitable we just are not going to have the lower inflation figures that the fed has posted for 2022, and i worry that the market has not yet absorbed that fact. >> when the fed starts tapering, they're still going to be adding to the liquidity, buying more things, but maybe just buying it at a slower and smaller clip than people are anticipating you think that's enough to spook the market >> i think they're going to have to go maybe fast er with the taper to end sooner. that is what i think would spook the market you know, chairman powell actually opened that up in testimony when he was asked
8:53 am
could you raise interest rates at the same time, and he said, no, no, we would complete our tapering first, then, you know, with a bar high, we would do that if things get worse than we expect, we would taper faster. he did open that door. i'm just wondering, if these on cpi, come in when we listen to the supply chain and since gas lee prices have been soaring to seven-year highs we know about natural gas, to much higher, he's going to be under pressure to taper faster that is my worry about the near term the longer term, listen, those are real assets. they will ride that inflation, but at this point, they've got to contend with a fed and may have to become more aggressive. >> jeremy, one of the things we have seen is every time interest rates rise, especially with the ten-year, it puts pressure on technology stocks in particular,
8:54 am
because people are thinking, okay, when rates rise, that's when you don't want to be in technology names jim cramer was here, saying he thinking that's the right call, you should stay? technology. >> you know, i love jim, i think we'll be tilting toward the reopening trade, with the decline of delta, with people searching for yield, because with inflation and yield going up, you know, the fixed-income market is not attractive they'd have to look at dividend-paying stocks dividend-paying stocks are inflation protected, and those are the places i think you need to high in that inflationary environment. you know, not that some tech won't be good, but i think the tilt might be the other way. >> we keep tracking all of these supply-chain issues. they're not going away they don't seem to be easing up
8:55 am
anytime soon most people are saying not anytime next year. how unusual is this to try to figure out at the impacts along the way? >> we talk about it as supply side, but we fail to realize there's an awful lot of demand actually creating this we had the biggest increase in demand for goods, you know, after the pandemic hit than we have ever had in history you know, away from services, the service sector, because of delta, into goods. that is one of the factors that we ran down inventory, and now, you know, we can't get the containers and production. yes, there are some supply chain factors with covid in vietnam, et cetera, but this is being born of the liquidity pressing on demand and goods produces
8:56 am
over overseas, i think this will feed into next year with higher than expected inflation. >> so you think it will take a recession to fix the supply chain? >> i didn't say recession, but i think the fed will have to bump up faster than what the market expects, and we'll have a correction i think -- not a bear market, but maybe more than 10, 10% to 20% at some point. we already have been down 7% this is a bit of a relief rally because of the debt limit, but i think the next six months might be a challenge long term, listen, i'm still in stocks i think they're the place to be, so nothing really scary, but a bit of a rocky road in the nearer term. >> thanks, jeremy. we'll see you soon. >> thank you. tc> when we come back, what to wah on the way to the opening bell on "squawk on the street.
8:57 am
we'll be back after a quick break. paola needs a parachute. so, salesforce customer 360 unites your marketing, sales, commerce, service, and it teams around her. so they can deliver a great experience from anywhere. ♪ (whistle) ♪ what if you could have the perspective to see more?
8:58 am
at morgan stanley, a global collective of thought leaders offers investors a broader view. ♪♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge. today, we are translating decades of experience into strategies for the road ahead. we are morgan stanley.
8:59 am
there was a nice snap back yesterday. the nasdaq is strong, s&p indicated up about h41 oil somewhat better behaved for most of the session today, if you think not going up is
9:00 am
behaving you know, if the lo gist six problems that frank was talking about aren't transitory, why isn't inflation going to be transitory >> i think that's why the fed is changing their tune. i do think that's why they're backing away from it. becky, see you tomorrow. >> bye-bye. it's time now for "squawk on the street." good thursday morning. welcome to "squawk on the street." further gains at the open as the market looks for progress on the debt limit extension, oil and nat gas add to yesterday's losses jobless claims fall to the second lowest since the pandemic we are set for a sharp rally, oil and nat gas continue their

125 Views

info Stream Only

Uploaded by TV Archive on