Skip to main content

tv   Squawk on the Street  CNBC  November 4, 2022 9:00am-11:00am EDT

9:00 am
>> final check on the markets. is it like a goldilocks jobs report kind of there's something for everyone, because we're up 271 points on the dow after it went down to unchanged after being up all morning. now it kind of likes what it sees use your own rorschach test on why. >> look at those golden lights on becky right there see that >> that is nice. oh my god, it's like -- make sure you join us next week it's friday. it's friday. >> happy weekend >> "squawk on the street" is next ♪ good friday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber, looking for our first gain of the week futures holding on here as october jobs come in 261,000 that is a beat but it's the third consecutive month of slower gains and it's the softest print of the year two-year briefly hits $478
9:01 am
lower. our road map begins with that jobs picture a growing list of cutbacks and hiring freezes continuing to hit corporate america. >> plus that china challenge starbucks, well, you may have just seen it, it notches record revenue, but china comps there, they were down 16% >> and as the ads slowdown weighs on warner brothers discovery's earnings, its ceo says, when it comes to direct to consumer, subs at any cost is over >> let's begin with the october jobs number. unemployment goes to 3.7 that's the highest since february, jim. didn't get relief on labor force participation. is it enough to edge down month on month >> no. i'm seeing trends that are accelerating the largest transmission company in america, the outgoing ceo confirmed a line in this thing, which is really amazing, which is that we have tremendous growth in manufacturing in this
9:02 am
country. it's not slowing it's accelerating. those are high-price jobs, and many of them involved with infrastructure, funded, of course, by congress. secretary reymundo was talking about how you have to double the number in the chip sector. you have the actual numbers, which just show phenomenal strength in the economy. david, this economy's on fire. >> on fire >> yeah. >> on -- what? >> and >> except for silicon valley >> where there are layoffs or hiring freezes galore. >> so what they hired tremendously. they overhired i'm talking about a manufacturing economy that is so strong i'm talking about an infrastructure economy that is so strong that you're going to have to try to cool that and there's no way powell can. look, i think the cloud is slowing. that is heretical.
9:03 am
i think they overhired in silicon valley, but i think they've underhired in anything that's infrastructure. >> manufacturing added 32,000. >> that's a lot. >> construction only added a thousand, but no major industry group lost jobs. >> construction's housing. it's just that when i look at what we have to do in this country, switch the engineers to making many, many more parts to the economy has to do with semiconductors at the same time there's a tremendous glut in semiconductors we have enterprise software galore david, if you ask the most important stock, the key to this market, which i know you will, it's a company that talked about macro headwinds. team is about putting together stuff in the cloud okay for companies that are trying -- for people who are trying to collaborate. cloud is slowing now, there were people yesterday who directly challenged me on air about the cloud is slowing the outpouring of people, all of
9:04 am
whom, people you know, saying, yeah, it's true. made me think that one of the great growth engines of our time has slowed >> right now, let's -- it's still growing. >> it's growing at a lower rate. >> enterprise software, so many of these companies were valued, adding incredibly high multiples including the one you're looking at right there there are countless stocks that looked quite similar that are in somewhat similar businesses, which had very high growth and a great deal of hope during a period where, frankly, money was still free, and things have changed dramatically >> right, well, where do we really have growth we have manufacturing growth we're beginning to see oil companies actually spend exxon is spending in the permian, and they're spending a lot in the permian and people are rewarding them with a higher stock price. but they're also doing esg >> well, they're spending on carbon capture but they've been spending in the permian, and they are continuing
9:05 am
to increase their production >> look at exxon it's returning to the days of 2013, the glory days by the way, bruce springsteen was at the phillies game two days ago, but they put another guy who looked like springsteen on and said he was springsteen glory days >> got it. i followed your complete train of thought there >> why, it was completely alinear. >> i got it. glory days i understood the reference and i understand the reference to exxonmobil and suddenly you're talking about them in a way, though, that you haven't been, but they've been adding production in the permian for some time, jim >> oh, well you know it better than i do. >> oh. can i get that on tape >> whatever you want i have not even gotten to the chancellor >> okay. >> germany >> you want to talk about that >> i felt that that's apropos of nothing, which he's accused me of i think the theme this morning is that america's slowing down, but that china's ready to come back, beginning with foreigners
9:06 am
getting the biontech david, it's the beginning. >> it may well be. we're once again dealing with stories that are indicating a loosening of the covid restrictions is coming in china, and that follows on earlier in the week, social media reports that seem to be batted down in a way of similar restrictions being lifted, eventually not right away but that has got shares of, for example, alibaba, which is one of the bellwethers, up almost 10% this morning you do have, carl, a lot of the financial services executives were in hong kong for a conference during the week david solomon, james gorman, this financial summit in hong kong, they're all coming back. >> schulz said, look, we're going to get the biontech vaccine for expats, we're going to talk about getting a broader path for the broader population. xi saying china will continue to
9:07 am
open up and pursue win-win cooperation with other countries. >> win-win-wynn. the casino is also up. >> it's not w-y-n-n. >> it's not steve wynn >> little casino joke. >> i got that. >> that would be big as david said, reports they may say shorten the time you need to quarantine if you're a foreign traveler ten days, may be seven or eight. >> well, most of the people i deal with are saying it's not until march. i think they're being too conservative as you look at the fact that, look, when the chancellor of germany comes to say, listen, maybe it's time that you start using biontech, and they say, okay, we'll do it for foreigners well, if it works, why not do it for locals at the same time -- >> there's some resistance in china, apparently, amongst the local population, which is the population, to using foreign vaccines it's not from topdown, apparently >> how about if you make it with a partner? reverse engineer it? but you know what's interesting,
9:08 am
carl on the starbucks call, they talked about becoming the greatest non-chinese employer, but at the same time, they're not giving you any hope for short-term relief from covid >> yep starbucks's big quarter. we'll talk about it with jim u.s. comps up 11 china down 16, a little bit less than expected, and in the call last night, howard schulz did talk about the company's future in china >> while our long-term aspirations for china remain undiminished, we expect the recovery of our business in the country to be nonlinear. we are confident that when covid disruptions affecting the country abate, starbucks will emerge not only as the undisputed leader in our category but likely the number one western consumer brand in the country. >> can they thread this? >> yes you know what's amazing about howard and i have had my go-arounds with howard. >> yes, you have >> but what's the capital of coffee in the world?
9:09 am
where's the greatest cup of coffee in the world? >> seattle i don't know >> milan >> okay. yeah >> and milan's best coffee >> where did he do his call from milan. right in the face of the single best coffee that either one of us has ever had. milan. milano >> and he's there. >> it's not a cookie, david. >> i did kind of like those milanos, but not as much as others never my top ten maybe my -- yeah >> that call was, again, the old days, like when howard would orchestrate a call and it had kind of a sondheim feel to it. >> in what sense >> it had an arc >> i see >> sometimes a little grim when the quarter's not good, but they talked about a buyback what do you think it's more rogers and hammer stein? oklahoma >> we see double-digit pricing here >> i thought the mobile orders pay, the number of mobile in
9:10 am
china, 44%, now, obviously, there's a lockdown there sara did a terrific job on the call as did rachel, who we heard, got a good comment from the previous show but there's 60,000 passionate chinese associates, and if you want to know who can stay in china, despite the -- what gina, the fantastic secretary of commerce said, you have to make it in china by chinese, and the secretary last night said on "mad money" that if you're -- you can declare, are you going to be for the chinese, or are you going to be for americans? if you're for the chinese, you're out >> let's take a listen to what the secretary told jim last night. >> we have to protect the american people against china, period, full stop. china has become more aggressive in what they call their military-civil fusion strategy, which is essentially fancy talk
9:11 am
for buying our sophisticated chips, which is supposedly for commercial purposes, and putting them into military equipment to advance their military, and this is the most strategic, most bold move we've ever made to say, no. we're not going to stand for that >> see, i think that i'm not a political guy, but there are two ways to tackle china you can say, listen, you keep your furniture you take your socks. or you can say, you know what? you don't get any of the equipment from lam research, from kla, not coming to you. asmlf. i think telling them that they got to keep the tables and chairs versus cutting them off from the equipment that is needed to be able to build a better military presence will prove to be more effective, but it will also polarize. in a way that you better say -- we better build those plants real fast, because taiwan is
9:12 am
going to be in play. >> those are key concerns. >> is taiwan cuba? 1960 >> i'm aware of the -- yeah, but i don't know the answer. >> you know, sometimes -- >> cuba is 90 miles away >> well, taiwan's -- >> taiwan is far from here very far >> okay. i'm looking for -- i'm trying to find a demonstrable moment about an axis of evil. previous president of many years ago put together china, north korea, russia -- >> well, iran -- it was the three of them. >> is germany joining the council of western nations or is germany becoming comfortable with china because they want the sales? >> well, germany does an enormous amount of business with china. they can't cut china off at all. >> yeah. and who is really the lynchpin of everything? we haven't mentioned it.
9:13 am
>> elon musk >> we'll get to that there's plenty of twitter news, obviously, this morning, and we'll get to all the results there's a ton. expedia, dash, block, coin, hershey, warner brothers discovery, draft kings and more. we'll get to all that and we'll talk a little bit more about the jobs number when we return another busy day? of course - you're a cio in 2022. but you're ready. because you've got the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want - your team, ours or a mix of both. with the nation's largest ip converged network. from the most innovative company. bring on today with comcast business. powering possibilities. at fidelity, your dedicated advisor will work with you on a comprehensive wealth plan across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect.
9:14 am
9:15 am
all right, been focused on shares of warner bros. discovery for some time. it's been a sad story if you own the stock, really since the
9:16 am
split for t&t. you can take a look. that's not instructive of recent that shows response to after earnings yesterday, the stock was down in part because suddenly people were taking a look at the other side of the balance sheet. obviously a lot of debt there. now it's down to $50 billion they did reduce the debt, and their cfo would say, listen, we have very limited maturities coming up over the next couple years, they run scenarios, he said, even in the most dire scenarios, no requirement for us to come back to the debt markets to refinance anything. but yesterday my reporting on altisse, some people getting a little concerned as for the numbers, going through all of them right there. they increased their synergy target, they added 2. million direct-to-consumer subs and they moved up the launch date as well thank you for their combination of hbo max and discovery plus. that's going to be in the spring now. it's coming soon pricing may go up, they indicated on the call as well.
9:17 am
as for the quarter, revenue was the big headwind we've seen it in a lot of other places they continue to talk about it, it was down 11%, we're going to do $9.2 billion in adjusted ebitda this year and we see $12 billion next year but the reality is, and this is, again, quoting the cfo, the scatter market has been pretty dry right now. it is what it is as we know from experience, these periods pass but it's not a very kconstructive environment right now, and you heard from a number of other players and peers across the broader at the scening maadvertising market ov the last few weeks, so that's in question they're taking down debt their cash flow is impact bed b lot of other writedowns and things of that nature. they see $3 billion of free cash flow for the full year and they are reducing cost, jim and then i got some things we'll talk about on direct-to-consumer that were interesting. >> the universe made a call. the nba on tnt is moving things.
9:18 am
the sports are great the movies are really good all that was excellent david, i come back, altisse, you mentioned yesterday. >> they're five times. >> let me ask you something. when you study business, three times is about as ugly as you want to get. >> depends on the business and the cash flow characteristics of the business, right? here, they're talking about -- >> what was the free cash flow this quarter >> it wasn't good. >> what was it >> it was negative >> negative $192 million >> that involved a lot of -- >> i know, this one time they paid the bonds, whatever >> they had a lot of different things >> but i do still feel that there's a lot of risk. that's not -- that's my term for it >> the other reason we -- i follow this. i find it fascinating, i have for 25 years now, this transition to what is now direct-to-consumer, whether or not the business it's replacing,
9:19 am
which is the linear cable business, which declined, by the way, revenues were down overall at 8% here because fewer people are simply connected >> but you didn't think -- >> what are the characteristics of this new business we've been following for years as a result of netflix are going to in any way look like the old business in terms of profitability still remains a key question you know, the netflix multiple has come and gone and a lot of these business models that came since, saying we got to be about direct-to-consumer, were built on the idea that netflix has this incredible multiple back in the day, which it doesn't have anymore. and here's what he had to say about overall sort of the idea of getting subscribers at any cost >> i believe the grand experiment, chasing subs at any cost, is over. let's face it. the strategy to collapse all
9:20 am
windows, starve linear and theatrical, spend money while making a fraction in return, all in the service of growing sub numbers, has ultimately proven, in our view, to be deeply flawed >> he went on to say that the movies we launched in the theater do significantly better in launching a two-our movie direct to streaming has done nothing for hbo max in terms of viewership, retention or love of the service. interesting. >> yeah. look at amc today where subs were up 44, and revenue's still down 16% some of that's currency, but some of it does reflect the softer ad macro. >> there's problems all over the place, but i got to ask david directly the direct-to-consumer subs at warner brothers, 94.9 plus 2.8 billion additional is that really bad >> is that bad no, that's right around what people were expecting. they're closing in on 100
9:21 am
million subs, you know >> i'm giving zaslav some due here >> paramount came in light peacock only 15 million paid subs if you're a comcast cable subscriber, you get it the question remains, all the money being spent on this content, to keep and bring in new subscribers, is it in any way going to generate real returns? >> you know, but there's zaslav, who's a figure of great prominence in our industry talking about, you know what the age of content is back remember -- >> he's also talking about the fact that you have to do it in movie theaters, consider licensing it and selling to third parties and use it to actually keep your own streaming service robust he's not saying that you just got to keep feeding the beast endlessly and spending enormous amounts of money we'll see how this all plays out, and when you have $50 billion in debt, you better not make too many missteps >> but this is a man who is known for not making missteps. we got to give him that.
9:22 am
i mean, we've got to -- this man's a pro. this is not an amateur >> absolutely true >> with that settled, we'll get cramer's "mad dash" and countdown to the opening bell as we put this week to bed. still looking for our first gain of the week, even though the s&p is at a two-week low don't go anywhere. sfloecht space. the boundary of human achievement. the new frontier. ♪♪ eh. ♪♪ it's not time to escape. it's time to engage.
9:23 am
it's time to plant more trees. hoo! ♪♪ time to build more trust. time to make more space for all of us. so while the others look to the metaverse and mars, let's stay here and restore ours. yeah, it's time to blaze our trail. 'cause the new frontier? it ain't rocket science. ♪♪ it's right here. ♪♪
9:24 am
oo we talked about some of the china reopening headlines but most notably today, after the german chancellor's visit, that's got chinese stocks once again on the move. the nasdaq 100 gainers premarket going to be led by baidu and
9:25 am
jd.com opening bell is in a few moments and you can catch us any time, anywhere, just listen to and re" eng llode uawk on th stetopinbe pcast back in a moment
9:26 am
the new iphone 14 pro is amazing. the camera is incredible. and you'll get our best deal. nice, but i can't accept it. unless every business gets the best deal.
9:27 am
on every iphone. uh, actually... we already do that. the plumber with the ascot! big bjorn, little bjorn, too! the caterer who really cares. every business should get the deal! we make a good team. every business gets at&t's best deals on every iphone. including up to $800 off iphone 14 pro. (♪ ♪) >> announcer: the opening bell
9:28 am
is brought to you by nuveen, a leader in income, alternatives, and responsible investing. >> all right, we're two minutes away from starting the final trading day of the week. let's get to a "mad dash." the symbol here is twlo, but it might as well be pain. >> wow yeah now, one of the nicest people i ever met, he taught me how to do code, but the long knives are out for this man and this company. you got three downgrades the growth is slowing rather aggressively talk about short-term headwinds. it's fantastic for small business to be able to track you put out a memo, free beer tonight, and send it to the people that have emails. they've brought a lot of different divisions. everything bad >> what happened >> schematic slowdown.
9:29 am
acute pressure from worsening macro. management pulled a 30% growth, took it down to basically half >> that's funny, because all the price target cuts are basically halves, right? rbc goes from 100 to 55. >> 55 is going to be a nice move up from 49, where it may settle today. high, by the way, 52 weeks, 317. >> well, look, i've been there many times, and they have made some additions, added a couple things to make it better for small business had a good number for small business don't write off small business you have him well, then i have nothing more to say >> good for him, coming on always like to see a ceo willing to come on, on a bad day >> wow okay well, long knives should not be out. >> look forward to that. meantime, let's get the opening bell here at the big board this morning. it is oil field services company
9:30 am
slb now. formerly schlumberger. >> they raised the dividend. really big dividend. like the old days, increase the buyback. they are so good they've always been great, ever since they were -- they rejected me in 1984 >> at the nasdaq is progress, a provider of application development software >> good company. >> so, you might be asking, why the green on the heels of the hot jobs number? i guess above expectations jim, the dollar is weakening today on that. >> our excellent people who give us -- the dollar going down. i mean, that, to me, has been a signal, get long at the same time, i think sometimes when you have the big, bad event that's over, people -- the hope immediately starts that things will -- the harsh words of powell are now in the distance, and we start thinking one thing only, which is that china is going to open
9:31 am
so, you see nike just charging ahead. incredible and david, there is absolutely nothing which says that china's going to open, other than a very good meeting with the germans. but biontech is the way that you could, if you're president xi, sneak in a way to be able to immunize >> yeah. it does feel like, given the news stories this week, and it's always very hard to parse exactly what's going on in china, and we certainly love eunice's help in doing that, but the momentum does seem towards some sort of opening up over time >> how long can you -- >> and a move away from zero covid and that's being reflected. you can see what's happening look at that that's a huge move >> communist regime. all powerful premier, brought 400 million people back in the middle class but at the same time, all dictators cannot ignore the people who are saying, this regime is not working for me and i've got to tell you, if you've been locked down as much
9:32 am
as they do, even though president xi is there for life, carl, i think there's a division in that country where there's really a belief that the economy is slowing the unemployment there is much higher for teenagers, for younger people, than it is here. unemployment's really big there. >> that's interesting. jim's right. nike is leading the dow this morning followed by some other names. caterpillar is up there. do you think that -- so, does this bounce, is it contingent on rates coming down or not >> i think that everybody wants rates to come down, and i think that's a fool's errand but hope springs eternal, and the equity guys have continually felt different from the bond guys >> well, i ask, because yesterday, mike wilson and morgan stanley was talking to some cios, according to the desk over there, and said that needed a whole 36.50 for one but also said if the ten-year got above 435, then his tactical bounce call was no longer valid >> i think he's going to be right. i continue to see the companies that do best are the companies
9:33 am
that put through price increases. you mentioned hershey. there's just -- you can charge anything for chocolate >> hershey is amazing. organic up 12. street was looking for 7 they raised the guide. they see organic up 14 >> i mean, organic up 14 again, david, if you're in certain businesses where people snack, you can charge what you want, but that's inflationary. >> i know. but they've been executing -- they've been just doing a great job over there at hershey. what can i say >> i begged michelle to come on. >> i know. she doesn't do a lot >> i failed. >> she downtown a lot, the ceo of hershey >> i offered "mad money. i offered 11:00, which is not mine to offer. did you guys catch tony today on doordash he said the food spend category has only been down twice in 60 years. powell's got the toughest job,
9:34 am
maybe, food. >> they good above on gov, and tony was on "squawk box" this morning to talk about the pretty good guidance and results. >> we had, you know, record great in terms of the volume that we delivered. we also beat on the bottom line as well, and you know, the resilience of demand for delivery continues to be really strong as reflected in our guidance as well, and so you know, in addition to achieving all of these positive things for the platform, we're very proud that we're able to generate tens of billions of dollars for merchants, tens of billions of dollars in earnings to dashers, and continue to reduce fees for consumers. >> back above the 50-day for the first time in almost three months >> these are so hard doordash, airbnb's hard. i find uber hard they always sound -- david, they sound so exciting to younger investors, because they've used the product. but that's been a terrible way to pick stocks >> it has, but this is a week in
9:35 am
which uber began the week, i think, with a strong earnings report or one that was well received by the market and ending on doordash being well received >> until until. >> until what? >> until a couple days later and people forget and they start selling again. >> what about, you know, every earnings report is now parts for what does it mean for the consumer what does it mean for demand destruction or lack thereof? back to the fed. back to the idea of a soft landing or what we're going to get next year. none of these companies can give you guidance that's worth a damn, frankly, at this point they just don't know >> what they're trying to do is say, look, we gain customers during the pandemic, and we didn't lose them as a matter of fact, we continue to grow. that was the etsy narrative. so, you have these companies where the pandemic turned out to be a good business getter. i don't mean to be, you know, to talk about money, conflate it with people's lives, but david, if you got customers during the pandemic and then increased, we
9:36 am
like your stock. but like gaming. personal computers we hate them because after the pandemic ended, we stopped buying >> right >> gaming in particular. holy cow, do people hate the gaming stocks. >> does that explain draft kings today? >> betting, yeah and jason robinson, i like, but geez i mean, look, i was stunned. i was stunned that he's talking about a slowdown, particularly because the football season's been filled with excitement and with upsets and his stock is down a remarkable 16%, and i need to know more about that i got to talk to him that's what i'm doing tonight. that was a promo >> you got him tonight good starbucks is up over 8% now. how much do we think is a reflection of the numbers and how much is simply on this excitement about china's so-called possible reopening >> i know howard schultz might not like this, but i would say that three quarters is china
9:37 am
>> yeah. >> i mean, north america's real good, but the idea that -- >> so it's more in the bucket of nike and starbucks, both up sharply because, in the same way that alibaba is up >> exactly, david. >> just making it clear. you want to hit paypal, jim? >> yeah, you know, look, i think that paypal is a triumph of dan shulman saying, okay, look, things are slowing a bit, but we got to deal with apple we've got many things that are going right, stock's down 62%. you know, elliot partners is in there, david, and that's what i have to research after this -- after our show is over >> his job has been thought to not be that secure >> exactly that's why i bring it up i've known dan for forever we have had our differences of opinion, but i think that paypal's one of those companies that i remember when you speak with bankers, they'll often say, when it was a $200 billion, are you kidding me i mean, the margins are going to be slashed and the margins are being
9:38 am
slashed. >> there's some of the commentary from him on the call in term of seeing the impact on people cutting back a bit in segments of the market high-end still strong, but it's sort of the middle and low >> stock was down last night >> so many different metrics that -- in this environment, trying to understand what's coming, and they, you know, that doesn't sound particularly good. at the same time we get an unemployment number this morning that looks pretty strong you're saying manufacturing is very strong. >> so, square -- >> very hard to sort of -- >> square. >> i was going to ask you about -- >> there was a piece out, seven reasons to sell it they refuted every -- refuted every single one of them and then you have -- i had an expedia one. i'm sure somebody has expedia on today and i didn't get him probably true. but expedia, i felt, was nothing special. >> it wasn't >> people loved it >> two-cent miss, bookings were
9:39 am
light, and yet >> 25% lodging increase, but you know, airbnb had better growth and people didn't like airbnb. so, i think the market is being the term i use, erratic. and erratic just is not necessarily conducive to try and make a lot of money. >> there it is we got him at 11:30. him and twilio >> why do i even come to work? >> i don't know. >> what is is purpose of coming to work if everybody has everybody? >> oh, give me a break you get half the ceos, man >> on the heels of the expedia print, live nation, record quarter for attendees at concerts 44 million people, 11,000 events >> that's what people -- people just keep going out. they go to metallica concerts, david. >> right >> i happen to like metallica. >> you like metallica? i don't know anything about you. >> when my tinnitus was really raging, marc benioff, ceo of salesforce, put me in the front
9:40 am
row of metallica so i didn't have to hear the tinnitus. but i had so much ringing in my ears the next day, i couldn't hear the program >> couldn't hear anything. >> well, i know billy joel is now touring with stevie nicks. >> billy joel asked for a picture of me because he said we were separated at birth. i had five pictures of stevie nicks taken and i never got one of them, but she loves "mad. >> how about that exxonmobil >> did you hear what i said? she loves "mad." >> i know. >> not "squawk on the street." "mad." >> no, she doesn't -- no they can't get up in time for "squawk. >> way back in the day, barbara streisand used to love "squawk box. she used to write us emails. >> today's the anniversary of her broadway album release >> is it really? you know what i saw on a clear day? >> the original clear day. >> on a clear day, you can see forever. >> i love broadway so much >> you were never going to be a
9:41 am
song and dance man right here is the only actual talent at this desk in terms of music. >> milk and honey. it was great this is the land of milk and honey. great. >> some of the names we didn't get to >> how about that exxon. >> i don't know that play. i never saw it was that with robert morris? >> oh, he was excellent. >> guess what i saw him in >> what, you saw him in that he was great >> i tried to emulate him for years. >> i mention it because if you missed it, our special, our great documentary on exxon is going to be airing tonight on cnbc they're releeasing it from peacock jail, coming back out of the paywall on free tv >> the only thing i care about is that the doc keeps running. and that's where i come down >> it does it has performed quite well since it first aired >> you can talk about your special at 7:00 all you want >> okay. >> i'm telling people to buy exxon. not off your special, which is wet. >> 7:00 tonight.
9:42 am
>> okay. >> carvana, jim, that's a fresh five-year low here >> well, when you read the conference call, it was another long knives situation. i mean, people are talking about, do they need more financing? but the company itself said -- there was a line on it which just said, cars ended the quarter at their most unaffordable point ever. wed bush said, tough quarter, worse outlook. we know, by the way, that hertz, steve shur, has a deal to trade cars with carvana. now, carvana's going to say maybe they don't need financing i'm not going to go against any company when i say they may need dpns financing, but there's a lot there to, let's say, chew if you want to get into the stock it's risky stock >> and has been for some time. >> but they raised a lot of money themselves they go back to the well >> they did. founders spent a lot of money.
9:43 am
>> do you think that when -- do you think that jay powell looks at stocks? >> yes >> absolutely. >> i do too. well, he has to look at the most levered companies and wonder whether it be david zaslav or carvana, which is way too levered. >> we were mentioning bed bath earlier and this report that suppliers are restricting shipments, even after the new financing. >> what's incredible is when you go to bed bath, they look -- my bed bath looks terrific. but there's nobody in it we strolled. one time, bed bath was so popular that when i went to boston to drop my daughter off at college, i was taking pictures of how many people, and they took my phone away. now, when i went to bed bath, i was the only customer. when i went to the register, they said the register was closed i said, well, i guess, there you go they told me i had to use the scanner or else. i'm still not comfortable with scanners >> back to china for a minute,
9:44 am
guys curious why apple shares might be down. they're not down a great deal. talking half a percent but you might expect that it would be a beneficiary as well of this idea that the economy's going to move into another gear in china as a result of people being let out of their houses more often >> well, you know, apple puts a freeze on some suppliers, like the suppliers are really going to tell the ruth >> sky works did guide below >> no, sky works did, but christian said that apple business is fabulous skyworks is not allowed to speak directly about apple that's part of the rules they've lumped in apple with some of these others like, i don't know if you watched alphabet every day i imagine that porat, not borat, is looking at -- >> what? i'm looking at a text. it could be important. >> i'm talking directly to you >> i know, but i'm -- somebody's telling me something >> okay, well, i'm going back. as i was saying, carl, alphabet
9:45 am
is the stock that goes down pretty much every day. now, meta is one of those that, david, the other day asked me whether mark zuckerberg cared about the price. i think the stock itself is an indicator of how much he cares >> well, it's now the biggest s&p loser of the year. >> well, how do you like that? >> yeah. >> that's what happens when you lose >> oh, you're back talking again? >> i am. >> thank you >> rejoining us now is david faber. >> he was putting his line-up in >> when you get texts sometimes from market notables, you pay attention to them as well. >> can i show you the cookies that my daughter's making in her bakery business? >> they are beautiful, by the way. >> i'm told that apple is going down by large cap software that's not great insight i know, thank you. >> yes, yes. t.a. probes rackets. >> that's true but that's the kind of insight you get from big players on wall street >> yeah. yeah i saw zero mostal.
9:46 am
>> did you really? in the original "fiddler"? >> yeah. >> very nice >> i saw frogs at yale >> that's really -- that's getting deep deep sondheim. >> i love -- yes it was deep sondheim >> wow okay >> i miss sondheim >> i know, we all do >> by the way, technology is starting to turn around, just to -- i mean, microsoft's down apple's down >> boy, are you focused. skyworks is up skyworks is up even -- you know, by the way, skyworks, let me just say this, there's a guy, liam griffin, and he has been sold short and his company's been sold short. he's got a 2.8% yield. people act like these companies are done can i just remind people that china, if it opened up, china, ahead of david's favorite shopping day, 11/11. >> singles day the old singles day. >> it's interesting. 11/11/11 was when the peace
9:47 am
treaty was signed. >> i was there >> at versailles >> snowflake is down 8%, by the way. >> you can rent the cloud all you want >> we've lost some of the opening gains as dollar is reversing a bit here let's get to bob pisani. hey, bob >> morning, guys by the way, i saw zero mostal in "a funny thingd happened on the way to the forum" and it was one of my favorite appearances of all time. we just sold right into this thing. we were around 3,766 at the oreg open we lost 23, 24 points. remember, we're down four straight days in the s&p 500 it's been a lousy start to november let me show the you the sectors. the china thing is definitely helping to a certain extent, so some of the value stuff, there's crane shares, which is the china tech energy, metals, industrials, value stuff has been helped a little bit by these china rumors and that's certainly a good news generally, those sectors have
9:48 am
held up pretty well this week. they're down is 1%, 2%, maybe. what's really having a problem is the growth areas, so we need to get communications services and consumer discretionary and technology stocks up this is just a horrible week for these growth sectors this is a pretty modest move to the upside on tech here. 0.37%. that's not much. we were much higher right at the open and communication services, you see now, has turned negative let's look at big cap tech right now. apple opened right here $143 look at that $137 this is in ten minutes it's gone from almost $143 to $137 in ten minutes. these were mostly positive at the open and now have turned negative this has been a horrible week for these names. let me just show you where we were this is just prior to the open this is so far the first four days of the week -- of this week amazon -- everything is down double digits in four trading days after we had, you know, a decent
9:49 am
october, the start of november has just been horrible, and what's going on is we are rerating the 2023 earnings estimates for growth for these companies. that's what we're doing essentially. they're taking down the numbers overall, and these are, by the way, new lows for these stocks, except for apple everything is essentially at a two-week low, including communication services and consumer discretionary finally, you were talking about hershey's. i love watching hershey's, and i'll tell you why. it's basically chocolate bars, so the question is, how much can they raise prices on chocolate bars here's something great the revenues, total revenues, up 15.6%. half of that was because of price increases. now, some of this was some nonorganic growth in there they had a dot acquisition, but half of the increases in the ru revenues were because they raised the prices. this is rather amazing, just their ability to get through it. you think at some point, they're
9:50 am
going to say, no thank you, keep your chocolate bar i don't want an 8% increase but they're still getting away with it all it one of the best-performing stocks in the s&p 500. carl, back to you. >> all right, bob, thank you bob pisani this morning. as we go to break, let's check the bond report, bond report we did get the two-year back to about 4.77 that was a new 15-year high. backing off just a touch ten-year got to 4.18 and hasn't backed off much. dow is up 181 and holding 3740, roughly. be right back.
9:51 am
♪♪ energy is everywhere... even in a little seedling. which, when turned into fuel, can help power a plane. at chevron's el segundo refinery, we're looking to turn plant-based oil into renewable gasoline, jet and diesel fuels. our planet offers countless sources of energy. but it's only human to find the ones that could power a better future. ♪ in any business, you ride the line between numbers and people. what's right for the business
9:52 am
and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance. cla - cpas, consultants, and wealth advisors. we'll get you there. i started as a single mom with $2000 cla - cpas, consultants, and wealth advisors. and a passion for new orleans. i'm lauren haydel owner of fluerty girl. today, my tiny online shop has grown into eight stores. we're a must-stop shop for unique nola-inspired gifts. lauren doesn't just create cool nola merch; she creates opportunities. small businesses like lauren's open doors for neighborhoods to thrive. support your community. support small business.
9:53 am
we had the nice bounce on the open a lot was due to dollar weakness that's reversed. we're holding dwron a gain of 150 on the dow ldg lollar has reversed and vix hoinbew 25 back after a break don't go away. can do more thanp you reach your goals. wow...
9:54 am
we can make this work. it can help you reach them with confidence. no wonder more than 9 out of 10 of our clients are likely to recommend us. ameriprise financial. advice worth talking about. how will your business adapt to change? are likely to recommend us. you could hire an office full of peyton mannings. what's up, peyton? good morning, peyton. hold for peyton. they'd huddle.... welcome to the peytonverse. such a visionary. game plan... you go. no, you go! and call audibles... double our investment in omaha! omaha! omaha! omaha!
9:55 am
or you could use workday. omaha. the finance, hr and planning system used by over half of the fortune 500. for a be-agile-like-an-mvp world. workday. for a changing world. ♪♪ for skin as alive as you are... don't settle for silver. harness the power of 7 moisturizers & 3 vitamins to smooth, heal, and moisturize your dry skin. gold bond. champion your skin. millions have made the switch from the big three to the best kept secret in wireless: xfinity mobile. moisturize your dry skin. that means millions are saving hundreds a year with the fastest mobile service. and now, introducing, the best price for two lines of unlimited. just $30 per line. there are millions of happy campers out there. and this is the perfect time to join them...
9:56 am
for a limited time get $500 off any new eligible samsung device when you switch to xfinity mobile. learn more by talking to our switch squad at your local xfinity store today. jim, what's on "mad" tonight? >> there's no fun at funko draftkings, tough quarter. mp materials, very good. cloudfare, matthew prince, great
9:57 am
quarter, doesn't matter because it's in the cohort of things melting down that's the right term. melting down and i don't know what stops them i don't know what stops them >> you don't know what stops them >> i don't know what stops them. >> we don't know what stops the eagles congrats last night. >> thank you. >> 8-0 >> howie rose has put together a take no prisoner team and the quarterback is the -- should be the envy of the nation. >> a lot of chatter. good weekend "mad money" at 6:00 p.m. when we come back with richmond fed president tom barkin in a moment
9:58 am
as an independent financial advisor, i stand by these promises: i promise to be a careful steward of the things that matter to you most. i promise to bring you advice that fits your values. i promise our relationship will be one of trust and transparency. as a fiduciary, i promise to put your interests first, always. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com
9:59 am
ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.
10:00 am
good friday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan and david faber at post 9 of the new york stock exchange. job number, 261,000. a slew of corporate results.
10:01 am
and then more granularity on what may be a chinese reopening. we'll see. we're 30 minutes into the trading session. here are three big movers we're watching this friday morning starbucks reporting profit for the latest quarter sales hitting a record high. in the u.s., pumpkin spiced latte, fancy cold drinks doordash, higher with strength in orders and better than expected revenue and reporting a quarterly loss wider than anticipated, they are up 11%. twillio the maker of customer engagement software shares are down more than 32% right now. they're down more than 80% year-to-date the ceo is coming up in the next hour on "techcheck." don't miss that. >> yeah, a number of software company's shares are under
10:02 am
significant pressure let's get to steve liesman we have headlines from boston fed president susan collins and your reaction to the jobs number steve? >> susan collins saying she expects additional increase to the funds rate in the months to come she expects a long period of holding rates at efficiently restrictive level after that there it is. higher for longer. the next phase, however, she says of tightening will shift from a focus on the pace which has been that torrid pace of 75 basis points to level. on the levels she says smaller increments will often be appropriate. that's a shift down from the 75-basis point hikes the size of future increases will be determined by incoming economic data. recent inflation data she says is disappointing, shifting down slowly she is optimistic. she says slowing inflation will require slowing economic growth but she thinks it can be
10:03 am
accomplished without significantly impacting chick slowdown >> steve, i did ask -- i want to get your take on the jobs number beyond what we just heard from collins. give it to me. what do we make of it? >> yeah. a bit of a mixed picture the payroll number did come in higher than expected but 20,000 was government jobs. you have this slowing in the pace of job growth, david, the private sectors did shift down from 319 to 233 in this sector you also had an increase in the unemployment rate. my best guess is that's what the market is responding to because that is a sign of labor slack. i would, however, personally advise caution on that because what we've seen so far, david, is the unemployment rate will tick up and the number of unemployment will tick up and then tick down as if people are let go to parts of the economy that have -- had labor surplus
10:04 am
relative to where they were in the pandemic and then they're quickly absorbed into places where there are labor deficits and a shortage of workers. i'm not sure yet we're on a track of sufficient labor slack to make the fed happy here that they need to do less indeed, when i look at the funds rate, take a quick look for you right now, david, we're still well over 5% at 5.14% expected funds rate put my glasses on to make sure 5.14 is the funds rate and the peak funds rate expected in june of 2023. putting that together with the message of susan collins, who would have been aware of this number before she did her speech, we've gone -- don't mistake slower rate hikes for lower rate hikes we still seem to be on a path here, david, where we need to get this funds rate up near 5% does it need to go actually above it we'll see over time. that is certainly still the outlook of the market. we had a brief period of time
10:05 am
below 5, now well over it. when i look at the jobs numbers, i see some rebound in health care that's a good sign i didn't see the big pop in leisure and hospitality. i'm not sure that sector is done hiring. >> to dig into that a little further, as we start to get more fed speak here, and i guess that's a precursor to what we have coming up in the next couple minutes, are we hearing more actual numbers attached to yet this idea of a higher terminal rate and what that could potentially look like? >> yeah, we are. it's part of the big uncertainty out there, morgan. i feel like if you told the market what that number would be, you could probably have a pretty decent and lasting rally here not so much because it's a higher rate. it's that the market could start to figure out, well, where are the values relative to the risk-free rate given what i know to be the future rate of the
10:06 am
funds rate or future interest rate so, i think it is the volatility it's theuncertainty that troubles the market as much as the level. i do think the market may be settling down now. it certainly has come a long way to agreeing with the fed on where they need to go. in fact, powell said on wednesday that, whatever we told you in september we thought was our high rate, it may have to go further now. that's another thing the market still has to digest here carl >> steve, with collins now and the window open once again, you've got a special guest who's actually going to be speaking a couple of times next week. >> yes let's bring in richmond fed president tom barkin to continue this discussion. tom, thanks so much for joining us. >> great to be with you, steve >> yeah, i'm sorry i'm not in richmond we'll have to do that next time. but let's start with the jobs
10:07 am
numbers. as i was saying before, and i'm interested in your take on this, obviously, the unemployment rate did go up because you still got a higher than expected number than the street was estimating and you did have upward revisions to the prior month how do you as a fed official, fed policy maker digest this report this morning? >> well, it's about what i expected it's pretty consistent with what i hear from contacts, which is that demand remains solid. the labor market remains tight you can point to the unemployment rate. you can point to wages we're not getting much help on the supply side. participation ticked down. i just think firms are still holding onto workers if you've worked hard for the last year or two years to try to get your staffing back up to complement, it's quite a change in approach to say you're going to have fewer. so, i do think the market remains tight. that means there's still more work to do >> tom, walk us through your thinking about the connection of
10:08 am
a tight labor market and inflation. do you believe right now that wages are, indeed, driving inflation, or is it your concern about a potential wage price spiral that motivates you to look for a softer job market >> i'm trying to think of demand more broadly it may well be that jobs are more of a lagging indicator this cycle. all of the elements of demand, i think, are relevant. consumer spending, which we got a couple of weeks ago. all of that is relevant to what's happening on the demand side i do think firms have gotten a taste of increasing prices they've started increase prices. they still have in many cases cost pressures, margin pressures. as you can see in some of the more recent announcements, there's still a sense that prices still have room to go and i think it's going to be hard for people who have fought hard to increase prices to back off until they get that kind of signal from either their
10:09 am
customers or their competitors and i think firms are still waiting to hear that that's why we're not seeing much movement down on inflation >> tom, from the department of what have you done for me lately, you just raised 75 basis points are you ready to start thinking about or talking about what kind of increases we might see in the future i guess we need to ask you, do you see future increases at the december meeting can you see as susan collins was just talking about, the idea of potentially stepping down? >> well, we'll have a lot of information before december. two more cpis, a pce, a jobs report, a bunch of demand indicators i'm not sure i know exactly what we're going to do in december. but i think -- the way i think about it, we had our foot on the gas six or eight months ago. we were very, very accommodative. and it mate sense to move as rapidly as you could to take your foot off the gas. that's what we've been i think real rates are positive pretty much across the curve i think you could credibly say
10:10 am
we have our foot on the brake. when you have your foot on the brake, you think of steering in a very different way you pump the brakes sometimes, you act a little more deliberatively and i'm ready to do that and i think the implication of that is probably a slower rate of pace of rate increases, a longer pace of rate increases and potentially a higher endpoint >> so, in light of that higher endpoint be, president barkin, how are you thinking about a higher terminal rate and what that could potentially look like and i realize we're still waiting on a lot of data here. >> i think about it in terms of what happens to inflation. the faster inflation settles down to levels that i'm comfortable with, the less far i think we need to go. but if it were to persist and continue, i think we'd have to continue to take action to make sure that expectations stay in line and inflation comes back toward our target. to me, it's very dependent on what happens to inflation. >> this might be a little backward looking in a sense, but given the strong october we've
10:11 am
just come off of with stocks and the fact that it coincided with the rally, so much that rally coincided with the media blackout period for the fed ahead of the meeting we just had, why do you think there has been this push/pull, dare i say, disconnect, between the equity markets and what officials such as yourself and chair powell and others have been saying and saying pretty consistently for a number of months now about this tightening cycle >> i don't know. i think you guys are much better at describing and understanding the equity markets than i am i look at my comments and those of the chair and those of my colleague over the last two months, three months, to me they seem very, very consistent i'm not sure if you think there's a misunderstanding, i'm not quite sure what would be behind that >> president barkin, i want to follow up on what morgan was asking about where there was a bit of dissidence was in the half an hour between when the statement came out this week and when chair powell stepped to the
10:12 am
podium there was 30 minutes of hope in the markets that we might get a kinder, gentler fed. chair powell seemed to pour icy cold water on that hope and he was much more hawkish. it made me wonder if there's dissidence between the committee as a whole and the chairman or can you otherwise explain why it seemed that the statement was more dovish than the chair's press conference was more hawkish? >> i don't know if i'd point it to that, steve jay obviously has the pen and takes input from the committee on the statement jay obviously has the podium and takes input from the committee on what he's going to say after. the same guy wrote the statement as gave the talk i just think that's -- a lot of times you understand communication a lot better voice-to-voice than you do reading something on a memo. >> okay. getting to what the actual thing the market should understand is
10:13 am
this notion of a higher funds rate we were talking earlier about the market now pricing in one that is north of 5% and is, indeed, higher since the meeting. is that something that comports with your outlook here, that we do need to get up above 5% how restrictive do we need to get? >> i have a differentangle on that, which is we need to get inflation down to target we need to do whatever we need to do with the rates to get inflation back to target so, i start with inflation it is entirely conceivable to me we would end up over 5%. but to me, that's not a plan that would be an output of our efforts to try to keep inflation under control. >> and can we do that without causing a recession? >> i'm not sure that's the question i would ask we have to get inflation under control. one thing i hear in my district is everybody hates inflation they think it's unfair, it's
10:14 am
exhausting, creates uncertainty to plan and they're looking to us to do that. that's what we should be focused on and what i'm focused on >> tom barkin, thank you for joining us hopefully next time in richmond, the great city you have there. >> look forward to having you down, steve. thanks >> all right mo morgan, david, carl, back to you guys. >> steve liesman, thanks for bringing that to us. great stuff. as we head to break, here's our road map for the rest of the hour, including a closer look at fintech, coinbase, paypal, all out with numbers. we'll get more reaction to what was the better than expected jobs report goldman's chief economist will join us on set. the ultimate estate sale microsoft's paul allen art auction. s&p back up to a gain of 1.5% don't go anywhere.
10:15 am
the new iphone 14 pro is amazing. the camera is incredible. and you'll get our best deal. nice, but i can't accept it. unless every business gets the best deal. on every iphone. uh, actually... we already do that. the plumber with the ascot! big bjorn, little bjorn, too! the caterer who really cares. every business should get the deal! we make a good team. every business gets at&t's best deals on every iphone. including up to $800 off iphone 14 pro. (♪ ♪)
10:16 am
well, we fell in love through gaming. but now the internet lags and it throws the whole thing off. when did you first discover this lag? i signed us up for t- mobile home internet ugh! but, we found other interests. i guess we have. [both] finch! let's go! oh yeah! it's not the same. what could you do to solve the problem? we could get xfinity? that's actually super adult of you to suggest. i can't wait to squad up. i love it when you talk nerdy to me. guy, guys, guys, we're still in session. and i don't know what the heck you're talking about.
10:17 am
walk to "squawk on the street." the supply of homes listed for sale is jumping at a record pace our diana olick joins us to explain. hi, diana. >> hey, carl yeah, i feel like i've been saying there's nothing for sale for years now. well, scratch that there is more for sale but not because more sellers are listing. it's because homes are sitting on the market longer the number of active listings jumped 33.5% in october from the year before, hitting the highest level in two years
10:18 am
that's according to realtor.com. this even as new listings dropped almost 16% in pending listings dropped 30% homes are now taking a week longer to sell than last october. 20% of all listings have now had a price cut double from a year ago. of course, all real estate is local. among the 50 largest markets, 42 saw inventory rise the phoenix, up 174% from a year ago. raleigh and nashville also saw triple digit gains listings, though, were still down in hartford, connecticut, milwaukee and chicago. all of this, of course, because of rising mortgage rates which rose this rate, hitting 7.3% yesterday. the increase since january has added almost $1,000 to the monthly payment on the median priced home. you can see what that's done to the home builder stock
10:19 am
itb off 7% and given the latest fed commentary, it's unlikely we'll see mortgage rates come down significantly any time soon david? >> well, diana, that's a good setup for our next guest let's continue the conversation right now and bring in doug bower, ceo of tri pointe homes, one of the largest builders of homes in the united states you heard, diana we've had you on before. give me your take on where the market stands and what you think of her comments and analysis of of data. >> david, thanks for having me on this morning. and before i get to that, i want to give a big shout out to the tri pointe team. we had a great third quarter eps up 24% looking to have a great strong finish to '22. that kind of is really the tale and the setup for two different years. '22 and '23. as diana reported on the resale
10:20 am
market, we reported demand very sluggish the interesting thing, the consumers on the sideline. on the one hand they see and hear headlines about rates going up on the other hand, where are prices going to go we reported orders down 50% year over year. generally the whole industry is selling at half of what it should be selling. so, you know, i would -- david, i would say housing is the canary in the coal mine. >> canary in the coal mine for what >> well, you know, the fed -- if the fed is listening, i know they know this, but housing, which has its multiplier effects is the tip of the sphere of the economy. and these rapid rate increases has caused darin i think you asked me at a previous show, is housing in a recession
10:21 am
housing is in a significant dislocation, which is going to lead the economy to a pretty strong recession and housing always has been that canary in the coal mine. i mean, you saw the data -- i think it was a week ago, the gdp data showed residential fix investment down 1.4% so, this is all leading up to a very tough 2023, as you look at housing. but i will point out, david, it's not that bad if you really take a step back and if the fed would settle down and rates -- these rapid rate increases would settle down and there would be stability in the mortgage market, there is tremendous pent-up demand and then prices will reach payments, at whatever mortgage it is, whether it's 7%,
10:22 am
7.5% >> that was my follow-on question, then so, if we do sort of get to a place and just have normalized rates. the rates at least you and i may have grown up with, you think you can have a pretty strong housing market >> for sure. for sure we're seeing the needs-base buyer, the relo buyer. it's really the needs-based buyer. i can't tell you the amount of significant pent-up demand you look at this industry, we barely tapped into the millenials and, frankly, the active adult a company like us, we're well positioned with our land that we bought pre-'22 we havestrong margins to withstand prices it's this math all have you to do is know the mortgage rates are at 7% or 7.5% and we'll adjust pricing to the payment. an and the consumer will re-engage. the consumer is more psychologically challenged than payment challenged the income levels for
10:23 am
millenials, which represents 57% of our buyers, is very strong. and then, diana talked about the resale market. well, the resale market, everybody's going to sit still because they're in mortgages less than 3.5% they're going to have to come to the new home builders and we're going to have the product available to them. >> to dig into that a little more, when you talk about adjusting price to the payment, how much can you adjust pricing? and how are you balancing that against the actual cost to build a home are those costs starting to come down >> great question, morgan. i think the industry over the next 12 months, if mortgage rates are going to be in that 7% range, you're going to see goalposts. these are goalposts. probably net pricing go through a change of 10% to 20% again, that's not that bad because the industry in a company like us are going into the business with very healthy
10:24 am
margins. and then you asked about the cost the supply chain in the front end is already feeling housing starts pulling back. most pundits are predicting housing starts to be down 20% to 30%. well, that means costs are going to come down and as costs come down, we can continue to adjust price to payment and it's just getting ready of that sick psychologica barrier the consumer is having right now. >> doug, always appreciate the update thanks for joining pus. >> thanks, david as we head to break, check out shares of carvana, down 15%. reporting worse than expected quarterly results, increased car prices and higher interest rates are denting demand basically seeing pushback from the consumer shares are down 95% this year.
10:25 am
this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.
10:26 am
thanks to avalara we can calculate sales tax on almost anything, anywhere, automatically. avalarahhhhh. what if tax rates change? ahhhhhh. filing sales tax returns? ahhhhhh. managing exemption certificates? ahhhhhh. business license guidance? ahhhhhh. does it connect with accounting? ahhhhhh. item classification? ahhhhhh. cross-border sales? ahhhhhh. what about? ahhhhhh. ahhhhhh. do you have those budget markups? thank you. mmhm. [bubbles]
10:27 am
a kohler home generator never misses a beat. it automatically powers your entire home in seconds. mmhm. and keeps your family connected. with a heavy duty commercial grade engine and no refueling, even when the power goes out, life rocks on. right now get a free 10-year extended warranty and up to $750 off.
10:28 am
still on pace to break a four-week win streak in the meantime, take a look at the biggest laggereds. salesforce going to lead you, along with apple and microsoft we're back in two. ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia. is it possible the only thought that comes to mind is... ♪ finally? this is financial security. and lincoln financial solutions will help you get there. as you plan, protect and retire. ♪
10:29 am
10:30 am
i'm contessa brewer. here's your cnbc news update key advisers to former president trump are discussing the launch of a 2024 presidential campaign to happen on november 14th that's according to axios. at a rally in iowa last night, trump said he will, and these are his words, very, very, very probably run for president again. russian president vladimir putin warned civilians in ukraine's kherson region they're in danger from ukrainian forces and should evacuate ahead of a possible attack. he also repeated his unfounded claim that russia is fighting a
10:31 am
neo-nazi regime. and ukrainian president volodymyr zelenskyy has accused russia of energy terrorism with its attacks on ukrainian infrastructure zelenskyy says 4.5 million of his countrymen don't have electricity. in pakistan, protests have erupted following an attack on former prime minister khan police used smoke grenades to break up this particular demonstration. khan's party is calling for continuing protests until political changes get made morgan >> contessa brewer, thank you. well, stocks rallying this friday morning on the heels of today's jobs report. basically sitting near session highs right now with the s&p up 1.8% 3788 the dow up 550 points. the nasdaq also up 1.8% as well. keep in mind, though, we're still on pace for losses for the week in what has been another very busy week of market-moving news let's bring in goldman sachs'
10:32 am
top economist jan hatzius. the employment rate ticking up, if you dig below the hood, a lot of mixed messages, i would suggest. >> yes as you get, from time to time, between the two, the establishment survey and the household survey, establishment survey, stronger than expected where the household survey was much weaker. generally, i think you should put more weight on the establishment survey overall, i would say this was pretty solid. >> pretty solid. do you feel like the labor market is showing the slightest, most tentative signs of the effects of the fed's tightening campaign based on this report today? >> well, there has been a deceleration in employment growth as we've gone through the year from extremely strong rates of job growth to mainly strong rates of job growth. the other thing to focus on is wage numbers
10:33 am
while today's number was a touch stronger than consensus expectations if you look at different indicators over the last several months, there's been a deceleration in wage growth. and that's what the fed will need to see because they're worried wages are growing at an unsustainable pace the average hourly earnings number, now 4.7% year on year. that was in the 5s not long ago. and if you take a shorter period, last three months or so, we're seeing ongoing deceleration >> you pretty early in what's becoming consensus in getting to a terminal rate. bank of england said maybe the market is pricing in too much. is there any chance we might be doing the same >> i wouldn't necessarily say the u.s. is pricing far too much our terminal rate estimate is a little below 5 market is a little above 5 i wouldn't argue strongly against that
10:34 am
i do think that both the uk and uar are in a different situation. the economic outlook is a lot weaker in part, because inflation is still ak ccelerating. the drag on household income in britain and europe is still increasing in the u.s., while inflation is still very high, it has been coming down somewhat that makes a pretty big difference. >> are there risks to cpi in the next few days, especially given that energy is going to be higher for the first time in four months? >> energy should contribute positively again so the core should be somewhat above -- the headline should be somewhat above the core this time around. there are some other areas where you might see some deceleration, though the health care area on the core side should be a little softer we should see really some of the durable goods price indicators come down.
10:35 am
used cars are a great example where auction prices have been falling pretty sharply but only a small part of that has shown up in the cpi so far >> just looking around the world, depending on who you speak to, china is arguably in a recession. europe, arguably in a recession. can the u.s. avoid one, even with the fed doing what it's doing? if the fed is able to engineer a soft landing, if you see this economic decline happening, can the u.s. avoid it? >> i think in principle, yes, because there are a lot of different things going on in different economies. china, you know, still dominated, really, by zero covid lockdowns, restrictions, emergence from that. that's a thing of the past in both the u.s. and europe europe is seeing this very large energy shock from natural gas that doesn't exist in the u.s. while that doesn't guarantee the u.s. can stay out of recession,
10:36 am
our estimate is that it probably will we're still expecting below trend growth some increases in the unemployment rate. probably some further increases but not recessionary baseline scenario. it's a very uncertain environment. this are lots of shocks that have been hitting the global economy for the last 2 1/2 years and there could be a lot of additional shocks. but that's all baseline. >> everyone's building their list of hiring announcements, freezes in tech, even now a couple of banks and coke doing some voluntary buyouts might that get in the way of infrastructure, manufacturing gains? >> let's be clear, labor demand is still very high relative to labor supply that does need to come in. there's still imbalance in the labor market if you see hiring slowdowns or
10:37 am
hiring freezes or declines in open positions, that's needed in order to get the labor market to a more sustainable place what i haven't really seen much of is substantial increases in layoffs. that would be more concerning. and there are some announcements, but jobless claims is still close to 2050,000 if you look at it relative to past recessionary environments, we're nowhere close to those types of layoff numbers. >> just looking at the data, is that the type of thing that could change gradually, you would expect to change gradually or quickly i bring that up because rick santelli on our air earlier today made an interesting comparison he talked about all the gridlock with the supply chain, all the orders, inventory orders put in my companies now we see aspects of the supply chain, at least from a transportation standpoint ease, and inventory buildups it sort of reversed itself and reversed itself quickly. can we see something similar play out in labor? >> well, it's certainly a
10:38 am
possibility. that's why every economist focuses on, you know, measures such as initial jobless claims, very high frequency indicator, and in a below trend growth environment, you do worry about, you know, something breaking having said that, i think there's still a good amount of support for keeping growth positive one factor i'd really highlight is really disposable household income was weak earlier in 2022 because of the fiscal adjustment and the big runup in headline inflation. real disposable income is growing. i think that's going to offset some tightening and financial conditions we've seen. and, again, in our baseline forecast, keep growth positive, although there are plenty of risks. >> great to see you. shares of warner bros. discovery, one of the biggest
10:39 am
laggards on the s&p. near a 52-week low down another 7.7% after reporting earnings guidance for this year remains 9$9.2 billion in ebitda, going p to $12 billion next year, they say. on the call there was question about that number, given the difficult advertising. advertising was down 11% year over year and 8% decline network revenue as the cable universe continues to shrink they have linear networks at the company. they also have a lot of debt, but they do point out no real-term maturities and the cfo on the call did point to the possibility, if their cash flows are strong enough and they are anticipating $3 billion in free cash flow this year, going up next year, they would, in fact, maybe buy back debt. he didn't say it directly but he did give some sense that might be a possibility they also increased their synergy targets by $3.5 billion, nef iciselnghat stock.
10:40 am
back in three.
10:41 am
♪ in any business, you ride the line between numbers and people. what's right for the business and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance. cla - cpas, consultants, and wealth advisors. we'll get you there.
10:42 am
10:43 am
christie's is eight so auction off paul allen's art collection, which could earn more than $1 billion let's bring in robert frank who joins us at post 9 with that story. >> 150 works of art spanning 500 years. sales totals expected to top $1 billion, making it the most expensive collection ever sold there are actually three paintings estimated over $100 million. van gogh's orchard with cypresses, record last set in 1990 first time coming to auction since 1970, over $100 million. a one of my favorite monet water bridge, also expected to get a big bidding war. paul allen's eye more
10:44 am
masterpiece bought clint birch totally unfazed by recession fear, the demand for these works expected to be very strong >> we look at the past with rose-colored glasses in fact, there's always great volatility and great collectors buy works of art, even in those moments, understanding that some news is passing news and these things are forever >> all proceeds from the sale will go to charity the sale will be at christie's next week, november 9th and 10th that will be a big room full of billionaires on november 10th. interesting to see what those prices are. >> some of these art collections through the years, geffens, leon black, people forget what an incredible of their net worth may not necessarily be counted,
10:45 am
but people who have a good eye for art for years have done well. >> geffen bought a small share of his net worth and grew -- in the case of ronald pearlman grew to half his network. the appreciation for top works over a 10, 20-year period is incredible we'll see. next week, three or four paintings selling for more than $100 million, in this economic environment, is amazing. >> we were having this conversation in the break before that is, i don't think people realize how prolific paul allen was as a collector not just of art but things like aircraft, i came in contact with his mig-29 not too long ago and the other types of goods he collected over the years what are your thoughts on that and i want to get your thoughts on in times of recession, we do tend to see high net worth individuals put their money to work in some real goods, if you will, like art >> where else are they going to go, right?
10:46 am
if you're a multimillionaire, a billionaire right now, you can go to cash a lot of them are avoiding stocks real assets, tangible assets like art, especially those that have proven their worth over decades are attractive paul allen bought a lot of yachts you can charter his yacht octopus for $2.2 million a week, if you want to do that >> wow >> his apartments in seattle and new york have sold and he still has the sports team. piz trust owns the seahawks -- >> and the trust gives all the money away that all goes to charity >> well, the trust maintains ownership of those teams unclear what's going to happen to those assets over time. he's pledged to give away more than half of his wealth as part of the giving. >> and paul allen is considered the father of the new commercial space era. robert frank, good to have you on set. after the break, we'll get art cashin's reaction to the
10:47 am
numbers with stocks rallying on this friday. to adapt in a fast changing world, you could hire a professional pit crew. go, go, go. sorry. nope. okay. fresh donuts - hot coffee! they deliver real time data and business forecasts when you need it. i think it was fine how it was. (air tool sound) to help you stay ahead of the curve... or you could use workday. the finance, hr and planning system that helps cfos make better decisions faster. on the other hand, we had a great fourth quarter. for a accelerate your decision-making world. workday. for a changing world.
10:48 am
10:49 am
markets continue to digest this morning's jobs number stocks rallied last month. art cashin joined us on october
10:50 am
18th and the called for a bear market bounce, but he warned a bounce is all it would be and not a prolonged rally. he pointed to sustained resistance, and you can see the peak around 39,000 tuesday let's join art who joins in artt news line. happy friday very nice call on this tactical move >> very kind of you to remember it, thank you. i did say it would probably last a couple weeks can he beginning of last week, we started to stall and i think you see my pre-opening comments every day. i said that we would have to be careful at the. 00 level good news is that they hold it, low is 3698.
10:51 am
but the bounce was rather anemic and i was getting rather worried about it and so that is why the payroll battle is important. the number came out and we had two or three whip saw moves up, to down, up, down, and i think that is because traders were sorting through some of the numbers, particularly wages with the inflationary pressure. it did not prove to be so. and more importantly, i think when they finally got down to the seasonal adjustment or what they call the birth-death model, that is over 450,000 jobs. much bigger than normal adjustment and that probably could have dissorted the actual number by 150, almost the entire length of the upward surprise. so i think that is why markets have calmed down again
10:52 am
what we need to see with this bounce is to get the s&p back up above 3800, maybe above 3850 and then we can take another shot at the highs. so we're in partial limbo here bulls are still in charge and they have the ball and need to keep moving it today >> do you think china reopening introduces a new variable here and is it going to change the way you might expect the market to respond to domestic macro data >> certainly, and you will recall over the past three days, you know, we had had rumors that they would appoint a committee to review it, and then the government said no, and then the rumor came back and, you know, the old saying in wall street is a rumor without a leg to stand on will find some other way to get around so this this rumor is hanging in
10:53 am
if they are going to shy away from the covid zero policy and in fact begin do vaccinations, it is a very prideful nation and they don't have any domestic vaccines if they can develop one or get one that they can adopt, then they will probably go that route. but that is why the game is so up in the air. >> what is the point of right now the market on rates? wilson argued maybe 3.45 on the ten year do you go along with that? >> we've had a ceiling at 4.25, so i agree that if they punch through that 4.25, it will spook markets. today if the yield on the ten year goes up above 420, stocks will start to move down. if it stays down around 415 or
10:54 am
lower, you will keep a bid under stocks and i'd like to point out to the viewers that i think there is a heck of a lot of computer trading. and if you look at the three indices, they are all up almost the exact same percentdown percn to the decimal point and that usually tells me the exact amount of money that is going this is moving those indices by the same percentage most humans even with a calculator don't do that, you need a computer to get that done >> indeed. and viewers are thankful for the good call last month look forward to talking again soon >> thank you, sir. later this morning on tech check, we'll talk to the ceo of tw twillio after the soft revenue guide. stay with us
10:55 am
10:56 am
10:57 am
10:58 am
watching the payment stocks this morning all moving sizably in response to those numbers kate rooney has more >> good morning. yeah, it was all about cost cutting. so paypal, block and coin base touted a more disciplined approach to spending these were really the growth darlings and they now have to show wall street that they can show a little more discipline through a tougher economic cycle. block saw a pretty strong quarter for its seller business. on expenses, the cfo talked about a continuation of discipline and an ability to dial back expenses in real time, a focus on operating more efficiently and what she called a meaningfully slower pace of expense growth as well as significantly moderating hiring. paypal also beat but a lower revenue outlook. you can see it is down as well and the ceo is anticipating what he called a very difficult
10:59 am
economic cycle and that their cost structure is in line with that and focused on efficiency paypal looking to drive about 1.3 billion in cost savings next year and coinbase cfo telling me that they are being prudent on spending and reiterated what it called a lost guard rail of $500 million. they are watching macro conditions closely and will take any additional action to manage sx expenses if needed this as broader tech gets hit with a new wave of layoffs >> kate, thank you and before we head to our own end of the show, wanted to take a quick look at enterprise software name. while the overall market is holding up, you can see some of these companies are losing significant amounts of market value. largely based on earnings, of course as carl told you, you will hear from twilio shortly. but atlasian also down almost
11:00 am
29%. and i'm told that these are not names that were heavily shorted. so there could be some serious losses taken by certain managers who were focused on the cloud, the growth there, enterprise software and everything that comes along with it. that will do it for us have a great weekend, everybody. tech check starts now. good friday morning. welcome to tech check. today a big rally for tech after a tough week as the jobs number comes in a bit hot, what it means for the mega caps coming up jeff lawson will be joining us in a moment. we're also talking to ceos of microchip technology and they are telling a different story. >> yeah, tech stocks in the green after a better than expected jobs number this morning as the strong labor day take continues giving no signs of a

19 Views

info Stream Only

Uploaded by TV Archive on