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tv   Squawk Box  CNBC  November 28, 2022 6:00am-9:00am EST

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falling short of the $30 million it was estimated or expected it's monday, november 28th, 2022 is this the jobs number this week "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen andrew is off today. we have been watching the u.s. equities you will see red arrows. this is causing concern around the global over what is happening in china you saw the session down in asian trading and in the early trade in europe with the same
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story. the dow indicated off 210 points s&p futures down 33. nasdaq down 108 points if you are looking at treasury yields, it is playing there. under pressure with the 10-year treasury down to 3.677%. 2-year treasury at 2.455 oil prices are feeling this. an a lot of concern over what will happen if there is additional crackdown in china or if things are loosened up. wti off 3.25% to $73.83. the lowest since december of last year. and other energy news, chevron getting the green light from the united states to pump oil in venezuela again. the saturday announcement after the president and the opposition coalition agreed to the relief program and promised to work to hold free and fair elections it could be a while before chevron pumps oil in the
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country. it has to make repairs on broken equipment and re-hire workers and fix problems with the power and pipeline supplies. shares off 1.5% because wti is down the main story protesters in china spreading across the country apparently protests aren't uncommon isolated protests. something like this really is not very common. over the country's covid restrictions which we will talk about in a second. demonstrators clashing with police and shouting release the people protests calling for xi jinping, some of the protesters, for now, see if they are around in a week, for president xi jinping to step down just saying that and end one-party rule just saying that, you are putting your life and freedom at risk in china. protests started friday and
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spread to eight cities including beijing. dozens of university campuses and young people with the widespread show of opposition in decades. we will watch with stocks exposed to china some lockdowns are past 100 days they are strict lockdowns. so strict and if there is a fire, you cannot get out of the building >> that is what sparked the protest. ten people dying >> thinking about it -- i'm horr horrified. even in our country, what is the percentage of the population over 70 or over 65 it is a large percentage you do that on the percentage of the people in china where they hadlockdown lockdowns and no ons herd immunity. they have to pretend the system is best. they won't import any mrna vaccines which we were throwing some away we had so many
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they were stuck with the vaccine which doesn't -- you can't deal with omicron or mutations with this thing quickly enough. how many old people are vulnerable in china right now to covid? i don't know how many deaths are actually reported in china and what the real number is. none of us know. if you take them at their word, it is small. they use that as -- they say they handled it better than we have with their system >> only because they are continuing to lock people down and not allowing them to live. if you just were to extrapolate from what we saw in terms of deaths, 1 million people with deaths, okay mult multiply that by four with the population >> then they had three years to
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p prepare hospital beds or icu expansion. no a quarter of a million added as pointed out in the journal, the chinese communist party guys will not have a problem getting an icu bed most people will not get a bed. >> p in 2018, 250 million people over the age of 60 existed in china. that's 17% of the population in the rural area, that elderly population is higher you will have a harder time finding hospital care in rural areas. >> he was just anointed to the third term more power than mao. it would be weird if covid -- >> it is not covid it is mismanagement of it and not doing anything with the time you have >> we won't know how -- you hope
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as the world moves forward and maybe -- i think we have a better system. i don't think that can last. we said that forever it has lasted and human rights and everything else. if this would be what began the unraveling of the whole -- >> eunice yoon was on friday with us. she was pointing out watching the world cup, china started blocking out the fans in the audience because people were questioning why they don't have to wear masks and they do. spectators in qatar were wearing masks. >> i think people will be glad they are wearing masks they have facial recognition software anyone who participates, i don't know if we will see them around for very long. they disappear i don't know what happens. they are at great risk anyone who says xi has to step down, that probably isn't going
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to be looked at kindly by the people in charge they have the most extensive police state in the world. >> the market reaction is interesting. look at wti. the assumption is the authorities -- because crude is trading down, the assumption from the markets is either they will crackdown harder or maybe they loosen things up and covid gets out of control. that takes things down that's what the market is telling you or at least what they're guessing >> terrible options. strict lockdown since august. >> some of the protesters. i listened to eunice some protesters saying i want to play video games they are locked down they are locked in the house and it is invasive into what you are allowed to do on a daily basis not allowed to play video games. remember restrictions a few
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years ago? >> good place for meta one place you need a metaverse we will take you live to beijing for a report at 6:30 we will talk more about it fr afraid to talk to kyle bass from hayman he has connections and sources he may have things to talk about. we haven't mention it here i don't think it is something t say that's great it is very concerning. we all got vaccinated and say what you will. you see the stuff about the vaccinations on twitter. >> the vaccination doesn't prevent you from getting it. >> i had it and it was minor it is not going to be minor. remember at the beginning and how scary it was 40-year-old and 50-year-old people and once you get on one of those things, you don't get
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off. >> right >> we can hope for the best. take the mrna vaccines i believe that could be case if they start importing >> that would be conceding it's weird when you always have this ccp -- this is the way we do it. the capitalists. it doesn't work. collapses under its weight this is a better system. it's not at least in my opinion > >> back here in the united states, we have problems, but better problems to have. thousands of flight delays in the post-thanksgiving rush yesterday, 6,500 flights delayed in the united states airlines cited weather in some major cities and strong winds and rain and snow. it is the deal planes, trains and aushtomobile. we saw problems.
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budget airline and frontier announced removal of customer service by telephone you can reach out by text, social media channel and whatsapp now tell the whole world your problems if you have a lot of followers on social media. the spokesperson said the change is to ensure the customers get the information they need fast and efficiently as possible and with as much publicity as possible, too. the shift aims to lower labor costs and increase kthe number o customers helped at once >> i'm not good with that. you can only make a reservation online okay i'll look for another one. i need someone to talk to. i do hotel reservations. >> it is bad with followers on social media telling them all the problems you have with the brand. that is a bad idea you want them to call directly
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>> draft kings or coinbase you can only send an email >> you never hear back. >> it goes into the abyss >> not that it is pleasant waiting for two hours on hold on one of the customer service lines. hire more people >> that's a problem. when with we come back, we you ready for the fed speak and economic reports new data shows a surge in spending on black friday, but can the supply chain keep up we talk to the head of dhl in thnee xt hour. this is "squawk box" on cnbc
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on us. you mean the world to us. so we're bringing you closer to what you love. kinda like this- welcome to 30 rock! join xfinity rewards for free on the xfinity app today. our thanks. your rewards. right now is time for the "squawk planner. jay powell has a speech planned for wednesday ahead of the policy meeting in a couple of weeks. on wednesday, we get adp private payroll and pending home sales on thursday, the weekly jobless claims and income numbers and, joe, we finish friday with the monthly jobs report. >> i knew it >> yeah. let's talk the markets with carol and ross
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let me ask you both what you think about the situation in china. this is the unrest playing out and moving markets this morning. you see red arrows around the globe. carol, what do you think what are you telling people? >> i think we are telling people it is another crack open in the worry closest t door a lot to watch for this week and sitting tight and how things play out is some of the advice we have been giving along through the volatile market. >> ross, we are watching commodities. oil prices at the lowest level we have seen in a year that is the market betting that things aren't going well the chinese will crackdown more harshly or covid gets a foothold and shuts down things
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automatically. is that a safe bet is that how you think about this or do you have different thoughts >> i think caution filters through. i think it is exacerbated that people are waiting and watching for how slow the u.s. economy gets do we skirt recession or go into what we suspect would be a milder recession if we have one. that slowing growth benefits consumers and inflation. it does illustrate a note of caution well across the markets and invest or psyches >> ross, how does this play into the peak of inflation? >> i think certainly the chinese piece of the picture that if they reopen, there is a global demand rush to prop up inflation and boost commodity prices like oil as you mentioned i think that is waning they are really sticking to the
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zero covid policy. i don't think it will give a second wind to inflation we have seen it with commodities and wood and steel and cotton. everything on that piece of the picture is falling shipping rates freight rates are coming down across the board core inflation with signs of slowing. housing is seizing up. the peak inflation and how does much does the fed see before they pivot decision. >> do you think that is imminent if they pivot, is pivot slowing down from 75 to 50 and they keep rates higher for longer? >> pivot is a mushy word it means a lot of things to a lot of different people. for me, personally, a shift from 75 to 50 is supportive of risk assets in the near term.
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longer term picture is not a pivot. the market needs to see the fed pause and evaluate the tightening cycle what are the ramifications 6, 9, 12 months down the road? they have a long lag time. we need to see that. the housing market is already in recession. things are seizing up. deceleration from 75 to 50 doesn't shift things with quantitative tightening moving >> carol, we are into the holiday shopping season. a lot of questions about the economy and consumer you have been doing this a while and watch wiing these things how do you measure this holiday season with others >> it is tough to compare with last year with the retailers who
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brought in inventories earlier this year. sales happening since october. we have seen a lot of the inventories. it is one of the reasons we saw goods on floors in september we saw holiday goods out already. consumers seem to being doing okay that shift in spending toward services over goods really seems to have taken hold and inflation is clearly on everybody's mind i think there's some level of almost revenge spending where people are trying to spend on others and engage in trips and experiences and things like that we'll see how that carries over in january when the credit card bills hit. we know a lot of people crack savings andi moving to credit cards. and most likely higher energy bills. it could be a softer early start to the year. >> i heard up 2% in terms of
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sales for black friday and holiday weekend. more than $9 billion you are still talking numbers that don't keep up with inflation. >> you have that number and the shift in goods retailers have a lot more sales this weekend than there were last year. washing it all out, it will be january or february before we see the full impact for the retail sector. >> ross, you say you would not be surprised if we retest the lows before the end of the year? that is a big drop. >> it is the basic fundamentals of the market are just not quite in line yet you have a multiple on the s&p 500 which is attractive, but not as far as we have gone for
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bottom you have estimates for 2023 as rapidly as analysts revise lower. put the two together if we got rates higher and compression and the fed came out hawkish and you continue to see pressure on the earnings side with margins squeezed and less consumer spending impulse. i think it is possible i think the fed will view their job as not quite done and will jaw bone hawkish to year end even if the statement lays out a path to dovish policy. these bear market rallies are common in the longer bear markets. we are used to v-shaped rallies last couple years. the reality is look at 2000 or 2007 to 2009 you get several strong bear market rallies until you reach the bottom there's some pieces of data that suggest we gotten there and there's others that suggest we
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might have more room to go would i be surprised no the base case probably not investors need to be preparing that this may not be quite over yet. >> ross and carol, thank you both >> thank you coming up, a new report says adidas executives were worried about the partnership with kanye west years ago yeah really brilliant. later, we take you live to beijing for latest on the protest over covid restrictions. how did they know? there was never any evidence of wackiness. "squawk box" will be right back. how will your business adapt to change? you could hire an office full of peyton mannings. what's up, peyton? good morning, peyton.
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a new wall street journal report says adidas ceo and other executives discussed as far back as four years ago the risk of the business relationship with kanye west and the fear it could blow up any moment accordingto the report in the 2018 presentation to the executive board, highlighted the risks of working with west and detailed mitigation strategies should the company need to cut ties with the rapper who now goes by ye y-e. propnounced yay. he now decided it is yay adidas executives balked at taking any action or doing anything
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instead continued to work with west the reasons are unknown. although the yeezy line raked in $2 billion a year for the company. that may have had something to do with being able to look past the potential problems i don't think the nebulous concerns i don't know if that is what they were talking about. anti-semitic comments? what behavior? >> erratic behavior. who knows if they were talking about the things he eventually did which was to show porn to executives and go down to the anti-semitic rants >> it is not surprising. >> it finally blew up. >> it was sort of erratic --
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absolute power corrupts and absolute wealth gives you the absolute power which makes you think you are above any type of cancellation or anything obviously -- >> yes in the meantime, "black pan panther" added $64 million during the holiday period. disney's "strange world" failed to lure in movie goers generating $18.6 million over the long weekend it was the worst three-day opening for the disney feature since "the emperor's new groove" in 2000. this film was expected to take in $30 million to $40 million. a, i didn't know about it. what i have seen hasn't intrigued me as somebody with young kids, i'm looking for new content.
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this did not appeal to me dplme >> it is a woke you go broke disney ceo bob iger is hold age town hall with employees at noon today iger will answer questions about what is ahead. the all hands on deck meeting comes one week after being reinstated as ceo. replacing bob chapek who lasted less than two years. >> i read over the weekend that one of the things iger was unhappy about was the amount they raised ticket prices and plan to continue raising prices at the parks thinking that was destroying the brand and service at the parks i have to say i agree with him >> is iger the right guy >> the problems are really big problems i don't think it is easy to step
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in and deal with these issues. >> everything happening now is likely the kitchen sink. >> yeah. >> wasn't his movie. >> i do think iger would have dealt with things differently and not gotten into it to begin with >> that might be a job i would go for you see his consulting fee $10 million a year if they asked him for advice he got mad that chapek never asked for any advice. >> you would be okay with that gig? >> if andrew can swing that, you know, somehow talk to people for five years, maybe. >> or you want this gig. >> i can consult with the show for five years >> for $10 million a year and we talk to you and maybe we don't >> don't take my advice.
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>> you are okay? >> i might do that when we come back, we take you live to beijing for latest on the protests in china over covid restrictions later, we will talk to former fdic chair sheila bair about the fallout from the collapse of ftx and crypto regulation "squawk box" will be right back. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.
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good morning welcome back to "squawk box. we're live from the nasdaq market site in times square. you see red arrows dow futures down 1900. nasdaq down 90 s&p down 30 points the growing unrest in china over covid lockdowns eunice yoon is joining us live from beijing good morning, eunice >> reporter: hi, joe security is extra tight here in beijing as well as other cities across the country after what was the biggest show or arguably the biggest show of resistance
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to the chinese communist party from 1989 at tiananmen square. protests in beijing and chengdu and guangzhou sparked by the deaths at a building fire in the far western city where people suspect the deaths were partially caused by covid controls the focus of the protests are primarily against zero covid policy there are indications that people are having wider grievances some people here in beijing were holding up white paper to protest the censorship here. some in shanghai were calling for president xi jinping to resign beijing is signaling it will stick with the zero covid policy though curbing the excessive
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curbs and state media has been running statements saying zero covid is science based and effective and warning against layers beijing is potentially at a turning point with the approach and the wild card is really what happens with the virus so if the covid numbers stay around this level, there is likely going to be and we likely see beijing muddling through as they describe more precised approach if the numbers soar, beijing could be faced an undesirable path one is to fully lockdown beijing to get the numbers as close to zero as possible and also sending a message across the country that protests will not be tolerated or if the numbers soar, they could be faced with a
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situation where beijing gets out of control and they don't stay on top of the situation. then we have a public health crisis here. the communist party, guys, is likely weighing which scenario has the most impact on their survival >> it's -- eunice, it is very difficult. the most recent time that the presidents met of our countries and do you know if they talked about vaccine sharing? would this ever happen i don't see the end game in terms of the population which is largely has not seen the virus and with the vaccine, it might not be aseffective is that something in goodwill furnish a lot of vaccines to china?
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could that ever happen as a way out of this, eunice? >> reporter: there have been a lot of western countries, including the united states, have had discussions of offering vaccines to the chinese either china purchasing them or having co-production, but so far it looks as that is not on the cards. in fact, if you remember, the german chancellor had actually come here several weeks ago and made an announcement that there was going to be an importation of foreign vaccine, pfizer biontech vaccine and so far those discussions resulted in little of the vaccine actually coming here. it has been narrowed originally it would be for all foreigners here in china now it looks as though it is for europeans. even those discussions are still up in the air. >> two bad options
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the lockdowns are not good for an anyone, as we know and it is bad for china. i'm sure xi jinping wants to get the economy going and raise the standard of living for everyone in china it is counter productive to everything the country is trying to do as long as you are locked down i don't see how it goes away we have in this country, we think it is endemic. it will be around. i don't know how they want -- do they think they can stamp out the virus completely and just open up? >> reporter: i think that's the hope i think a lot of people here agree with what you are saying you are seeing negotiations on a local level here in the past several days in beijing, people have been trying to use the law to convince local authorities to not lockdown their buildings and to get rid
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of the more inconsistent measures in some cases, they aringe havia positive effect. in some cases, they are not. it's difficult to say where it will head. i think that beijing is probably hoping that the current approach where they say they are sticking by zero covid, but kind of change it a little bit is going to work. right now, the numbers, the covid cases are kind of not jumping like crazy if they start -- if they really start to rapidly escalate, we are in for difficult decisions by policymakers here >> obviously the world wants things to work there and to be successful in terms of dealing with covid it's difficult thanks, eunice i appreciate it.
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still to come this morning, more on the unrest in china. we will talk to hayman capital's kyle bass. frl we will get a check tonhe supply chain as retailers get a handle on the surge of inventory. "squawk box" is coming right back
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welcome back
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consumers spent a report of $1.92 billion on black friday this year. that is up 3.2% year over year that is according to adobe among the hottest items were toys and he electronics and exercise equipment it is cyber monday today and consumers are expected to spend $11.2 billion today alone. can the supply chain keep up with demand? joining us now to talk holiday shopping from the logistics standpoint is craig foreman at dhl supply chain craig, welcome it is good to see you. what heavy lifting are you facing this year >> thanks for having me. happy cyber monday it's so far been a great season so far we have really been seeing good, solid volumes which
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substantiates the sales figures that you were articulated from black friday we are seeing as far as physical volume is shipping out on par with last year which i think is a good sign and really helps substantiate the sales numbers we are seeing. there is impact of inflation on price point and discounts and such i think we are seeing the same trends reported out. >> this is really interesting. i was looking at $9.2 billion. up 2% or 2.1%, that is not even keeping pace with inflation. we are talking inflation probably north of 8% you were tracking pure volume. you are seeing volume numbers at least on par with what we saw last year? >> yeah. not necessarily on black friday. we did see a bigger take rate on early black friday sales starting earlier in the week when you look at that accumulated volume up until last night, we're pretty much on par
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across the business on units and orders that we received. now, there is give and take with that with some customers up and some customers down. we're seeing a little buit of th higher take rate with the higher price points which is interesting which is how that probably is helping the total sales figures you are seeing as well >> can you talk, i know you can't talk about customers in particular, but what type of areas might see less traffic versus more? are you thinking apparel retailers or electronics >> even if you look, electronics is definitely up for sure. if you look within apparel, you will see spend on high-end shoes versus lower end accessories or lower end an ppapparel.
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we are thinking people suppressed spend on items waiting for sales to take place. now the price points with inflation impacts and discounts from black friday are helping them go out and secure the things they have been waiting to get. >> last year, we were dealing with a situation with people having a lot of money and not enough inventory what does it look like this year >> the exact opposite. every peak season and i have been doing this 15 years has a different personality. last year was suppressed suppressed inventory and sales is this disposable income? inventory is highest as i have seen it with retailers driving volume and drive the right discounts. obviously to the point to not inhibit their bottom line. they have motivation to move
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inve inventory. >> kraig foreman from dhl. hope you come back >> thanks very much. coming up, we talk the fallout from the collapse of ftx and implications for crypto regulations. former fdic sheila bair. chair bair former chair we'll be right back. ? raps 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 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. ♪ ♪ connecting to opportunity is just part of the hustle. ♪ ♪
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calls for crypto regulation continue after the collapse of ftx. joining us now is sheila bair. she's an external director of paxos, a block chain company it's been awhile. >> thanks for having me. >> happy holidays. we're hearing that everybody is in their corners as you can imagine, depending on whether you have skin in the game on what all of this means, people are trying to say, well, there's
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crypto and it's the same as the internet back in the late '90s there was and there was amazon and they're a far cry from each other and the underlying asset itself still has value. but then you have -- this was written today, "wall street journal," the eventually price of crypto's final price could be zero senator warren i thinks that much greater government oversight is necessary if we had done that to the internet back then, there were calls for that when that collapsed in '99, that wouldn't have been the right move back then either. where are you on this? >> so i do think that senator warren has acknowledged that there may be potential good uses of the technology. i've always differentiated the asset from the technology that underpins the asset. and i do think the technology holds a lot of promise for socially beneficial uses,
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payments and settlement clearing, tracking supply chains there are a lot of interesting use cases that can and should be developed. the problem that most of this industry has gone into speculative assets a lot of it was driven by very low interest rates so we're seeing that house of cards starting to collapse now and, you know, overall i think those that don't have value, the market is punishing and those that do have value will be able to operate in a clearer regulatory environment to help nurture the technology where it's socially beneficial and have regulation shut it down where it's not >> there's a lot of blame to go around -- >> yes, there is >> regulators in this country have been so slow and cautious
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that it drove this exchange to the bahamas where you're just -- you know, you're asking for it when there's no rules down there. scammers are going to scam and you can't -- no one is to blame except bankman-fried, maybe, himself. why can't the s.e.c. get it together on regulating the exchanges so that we can bring it here? >> yeah, well, there is a disappointing lack of agility in our regulatory system. we saw that during the great financial crisis too the subprime prices, spending out of control i think part of it has to do with our regulatory structure. we're unique in the world. we have one for securities, one for commodities, a bunch for banks. frankly, congress is part of the problem too. political pressure, you saw what kinds of bills were starting to
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move ahead in congress that are being heavily influenced by industry but the political pressure, especially if you're the s.e.c. and cftc and funded due to congressional appropriations processes, that makes you a bit timid. there are a lot of things that need to be fixed more consolidation among regulators, exercising greater restraint when the lobbies come knocking on their door to stand back and let the regulators do the -- >> we don't know how often the cftc chair met with bankman-fried. we don't know. we do know it was a bipartisan greasing of palms across the board. one side may have benefitted a little more. but there was a lot of money changing hands with bankman-fried and these are the people making the laws for the regulation that's something -- could probably clean that up probably never will, but -- >> yeah, well, it's true
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it's a part of our political process that members of congress heavily rely on contributions to run their campaigns. that's a whole -- we could spend a lot of time on that too. public awareness, media exposing it, that helps to put counter pressure on it you're right it was bipartisan. i will say just because regulator meets with someone, we don't know the facts there i had an open-door policy. i try today accommodate all meeting requests i will certainly -- so i just wouldn't say that just meeting with somebody means there's a special relationship there the meeting in and of itself doesn't mean anything. >> good to have you on chair bair when we come back, much more on the unrest in china and the
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impact on the global economy leland miller will join us at 7:30 and coming up on the 8:00 hour, we will talk to kyle bass. "squawk box" will be rightac bk. what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone
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good morning a developing story unrest growing in china as the country faces more covid restrictions and the global markets are taking notice.
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countdown to a potential strike the u.s. freight system could see a potential stoppage broken borders we're launching a special series on america's big problems with legal immigration and how those issues are proving costly for many industries. the second hour of "squawk box" begins right now ♪ good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in time square it's hard to take off five days and come back. i'm joe kernen along with becky quick. andrew is off today. it's hard to sleep when you -- >> because you've been staying up too late. >> and i don't sleep past
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8:00 a.m. when i'm off >> 6:30. >> i hear that about a lot of people -- >> it's the shift. but it's also -- >> you're old? >> otherwise, i'm old too. >> u.s. equity futures this hour, we're close enough we're -- >> have you not been able to sleep for the last 20 years. this is not a new thing. >> kind of >> it's the hours. >> it might be the alcohol [ laughter ] >> some nights very few nights. down 193 points on the dow nasdaq off 84. it's kind of a big pullback. like a hangover from thanksgiving i really think it is people just -- they trade like they feel. although treasuries, i think that's getting interesting about whether 4% is in the high is in it could be months before we know but 3.68 -- >> if china shuts down, that
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that is going to be -- that is going to be a situation that kills demand and brings a faster downturn through the entire globe. >> and on oil, take a look he's just a good guest he pointed out, yeah, look, we've been really, really trying to get the price of oil down the price of gas down. yeah, but none of it was based on the supply, on increasing supply it's almost all based on demand issues a lot of it is out of our control coming from china. but also the spr that helps supply. but not really in the right -- in the way that we -- >> unfortunately the saudis reacted to that. if we were going to release more, they said they would cut production hello? take a quick look at crypto. and there's crypto and then there's all the companies that lend based on crypto
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i don't know whether they're separate or not. but bitcoin, which on a risk off day -- or on a day when the averages are down, you expect to see red in that arena. let's get to dom chu a look at this morning's premarket movers were you off last week or something? someone else was doing your thing. >> i was here all week last week except for thursday. >> oh, i was off >> yeah, i was covering for brian sullivan on worldwide exchange and he was doing all of the other stuff. i saw becky and i saw andrew and i saw -- during the course of the week anyway, let's talk a little bit about some of the stocks that are going thematically with the headlines that you kind of put out there with regard to china ongoing economic concerns and whatnot. if you look at some of the u.s. listed chinese tech firms that play predominantly in the overall narrative, the story behind the nasdaq 100 here in the u.s., we will see that there
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are fractional losses at least for now for companies like netease and china stocks in focus and what the unrest could do to the economy there and whatnot. if we look at some of the more china-centric focused countries in the united states, the ones that have a lot of revenue exposure, we're keeping a close eye on apple shares. it's down 2% in the premarket trade. but also companies like nike and starbucks. we'll watch some of those china of exposed stocks. you mentioned some of the moves in west texas intermediate crude oil. now we're at $73.98. pushing closer to a 60 handle. the energy sector spdr is down
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energy names, marathon oil is down 2.5%, halliburton down about 3% and 4% declines for diamondback energy china continuing to put pressure on oil prices and stocks here. one other interesting deal, one that we would not normally talk about because it's not a massive deal so to speak but we're going to focus on taboola. this is an online advertising company that has a lot of the technology that kind of controls what you see on websites in terms of advertising those shares are up 45% right now because yahoo, yahoo has taken a stake in the company worth roughly a quarter of the overall company taboola as part of a 30-year commercial partnership between the two, where taboola is going to drive a lot of the advertising content that goes on yahoo-featured websites this deal gives yahoo a seat on
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taboola's board. that's the reason why this stock is up 45%. it was worth $480 million. million dollars. before this deal pushing closer to that $700 million mark. a smaller cap deal, but one that's interesting because apollo global owns the vast majority of the stock and verizon media had a 10% stake there. keep an eye on those shares. i'll send things back over to you. >> what's the symbol isn't that that horrible -- don't they have all of those -- >> taboola has a different -- >> they do >> it's got a different symbol, but -- >> yes, it helps place a lot of the stuff -- >> they put something that's who or how that star from the 70s, how do they look now and you go in -- >> i've been -- >> and there's 50 people before
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the bones that you wanted to se. and you got to hit, go, go, go every time you hit go, you hit the wrong go and something comes up for something you don't want or don't need. >> you're saying money well spent. >> 30-year deal? this thing is going to be around for 30 years. >> see, you've fallen for it. >> i see it now and i say i'm not interested in what that child star looks like now. >> remember, yahoo was a brand that we thought wouldn't be around, right, and it's -- and yahoo was one of the brands that you first thought about in the nascent days of the internet. >> remember tim armstrong tried to do -- i don't know. they're bit players now, aren't they >> here's what i would leave you with, this is an interesting deal it's a small cap deal, but what does it say about the current state macro-wise of online advertising? over the last several months, we've been talking about this
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notion that the -- this is in no way linked, right, to companies like meta or alphabet or others. >> they're being opportunistic because they can get a better price right now. this stuff is going to be around you may have a couple of long, lean years, but apollo is going to put up the money and say, we're going to be long-term players. >> are they buying on the lows >> we don't know if it's the lows, but they're definitely not buying on the highs. >> it's always period-type stuff that they're trying to suck you in on. >> because it works. >> because they know me. they know i'm going to fall for it. >> do you still click on it, that's the question? >> i do too. >> but it's the -- >> i want to know who clint eastwood's true love was >> 60 slides dom, thank you we will talk to you later. we want to bring in the
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chairman and ceo of strategas research partners. let's talk about what's happening in china you see yields down in the united states. you see oil prices down significantly. what do you think? what do you make of it all >> listen, i think -- and for me, it's kristen mcnickel, i go for it whatever reason. >> where is she now? >> you never know. it's like number 60 they finally tell you where she is. >> click really fast. >> that's true with china, becky, i think -- listen, i think in the short term this is obviously -- it's quite deflationary to the extent to which it's going to slow down the global economy over the longer term, i think deglobalization which is a major theme that's come out of the pandemic is going to be
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inflationary it's going to cause -- it's been the major i would say tail wind for disinflation since the berlin wall came down and since china joined the wto in 2001 and you have a movement towards on shoring or friend shoring as janet yellen would say, and that's going to cause prices to be a little bit higher longer. in the short term, this is clearly a bad -- this is a bad development for global growth and certainly a bad development for some of the industries that i like the most which are energy and basically materials. we'll have to wait and see how china deals with this, but there's no way to sugarcoat it it's not a great development -- >> are you selling any energy stocks as a result >> you know, becky, i wouldn't just because i think there are structural issues. i think we're creating an artificial scarcity of oil and natural gas in the west.
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and it would -- i would have to wait and see to see how china is going to deal with this. my own opinion -- and i know very little with regard to the situation in china -- but is that eventually they'll have to come up with some sort of compromise that allows their economy to reopen because this is clearly -- it's unsustainable for them from a political -- from a political point of view and i'm not quite sure that they can afford it or the rest of the world can afford it. >> i guess the question becomes, has inflation peaked andyou bring up a really good point that i hadn't considered before. next year we should brace for quite a bit federal spending because 60% of the federal budgeting, you point out, is indexed to inflation >> yeah. this is -- you know, this is one of the things -- i think there's a real fear -- i don't know how much of a fear there was for a blue wave, but i think if there was a blue wave in the midterm elections, people were fearful
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that there would be a total lack of fiscal discipline and that president biden might pass very large fiscal stimulus package and what we point out is between social security, medicare and medicaid, 60% of the budget, they're indexed to inflation the cost-of-living adjustments for social security was 8.7% you don't need big fiscal stimulus packages for fiscal spending, government spending, to be at odds with what the federal reserve is trying to do. and then we're not even talking about interest on the debt which is set to explode and defense spending that people feel is a necessity. the fed has in my opinion -- we don't quibble with the idea here that inflation has probably peaked what we might quibble with is how quickly it might come down that there are structural issues, whether it's labor, whether it's energy, that might
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make it more difficult to get to the fed's target of 2%. >> what do you think of the ten year at 3.66%? >> becky, in the short term, i'm a buyer because of the things that are happening globally. in the longer term, i think the absence of quantitative easing and the introduction of quantitative tightening means that eventually people are going to require some premium over the rate of inflation to lend people money. and that's been 14 years since we've seen that. but usually that's the way it works. if you think inflation is going to be let's say ultimately 3, 367, i'm not sure that's an appropriate level of compensation for the risk you're taking and so -- >> go ahead. sorry. go ahead, sorry. >> yeah, no, in my opinion that's ultimately going to be the residue of this -- i think the switch from quantitative
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easing to quantitative tightening in my opinion is probably the biggest change in monetary policy since volker moved to target reserves in interest rates it's a very significant change and in my opinion it changes everything as far as the financial world is concerned you really have to focus on companies that can generate their own cash and grow on their own. and it also means that the federal government is not going to have the training wheels, at least for awhile, of the central bank monetizing a debt >> jason, thank you. i always love talking to you we'll have you back very soon. thanks. >> likewise. thanks, guys take care. >> okay. coming up, broken borders. we're launching a special series on america's big problems with legal immigration in this case and how the issues are proving costly for many industries as we head to break, check out this morning's biggest premarket winners and losers
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today we begin a three-part series titled "broken: legal immigration in america". the goal was to take an in-depth look at how the process of bringing skilled labor in the country drives the labor shortage and inflation these issues could mean lower growth in the future if we don't fix the problems and senior economics reporter steve liesman has that story this morning. >> reporter: for most americans the immigration debate focuses on the illegal side, how to secure the border from the millions of undocumented gr immigrants who enter the u.s. every year but america also has a massive legal immigration problem. one with far-reaching consequences for the economy experts say the antiquated system is broken, especially in the vital medical and technology sectors. the broken system helps push up inflation and experts say plays
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a role in making illegal immigration worse. >> we're talking about recessions, inflation, i think we'll have a bigger catastrophe if we don't get more workers in our society and we do that by immigration. >> reporter: there's a fall off in immigration and the biggest gap between job openings and available workers in postwar history is one of the key reasons that inflation is soars. the consequences go further. in rural communities the lack of foreign health care workers has driven up wait times and plays a role in hospital closures and even health outcomes for the country, the crisis may be causing america to lose the contest for the best and the brightest around the world a contest that could mean losing its technological edge immigration attorney says among his clients, he's seen skilled immigrants leave. >> that's a loss to our economy. the legal immigration system is meant to serve the u.s. national interest by allowing us to
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import intellectual talent to fill our skill needs. >> reporter: how bad is the legal immigration system this year, 48,000 employers asked to bring in 484,000 skilled workers from abroad. but they were granted just 85,000 approvals or only one out of every six applications. normally, it's one out of every two or three >> our immigration system is designed for an era in american history that does not exist anymore. a lot of the programs that were designed were created back in the '90s our immigration system needs to be updated to meet the needs of our nation today >> reporter: that's true in the wake of the pandemic which saw an increase in retirees and others leaving the workforce the result of the system, a shortfall of as many as 1.6 million legal immigrant watchers in the nation there are 10.7 million job
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openings and only about 66 million unemployed about a third of that gap is the lack of foreign workers. >> while foreign born are only 12% of the population, they're roughly 40 to 50% of the s.t.e.m. labor force and so they contribute massively to this part of the economy. staying at this level will definitely jeopardize that engine of growth for the u.s. >> we're going to see how the lack of foreign workers creates a life-or-death situation in rural areas and how the broken system causes the u.s. to lose out to other nations in the competition for the best and the brightest around the world joe? >> steve, we've had people on on both sides of the aisle that introduce legislation. it gets politicized. is it true that most other countries don't do the chain -- where if you know someone, it's a family member, you get in, do they do it based on meritocracy,
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and is there a way we could do that to get the skilled workers -- >> that would be a big help. i've heard stories, joe, about, for example, there was a very well-known tech company that didn't want to go on the record on this. they had a worker somewhere in the west the wife had to go back -- his wife has to go back to india to get a visa to stay in the united states what did they do they moved both of them to ireland. >> it's not that simple. >> it's not that simple. >> sometimes -- and then the other thing -- >> who is going to come if they're highly skilled if they can't bring everybody else. >> they don't even bring them, joe. sometimes they say, you know what, getting you in here -- if you applied today, if you were an employer and you wanted to bring somebody in today, you would be lucky to get that person in in october of 2023 >> and we're talking legal immigration and both sides conflate illegal with that >> that's the biggest problem. >> but there are a lot -- we could use a lot of people that
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want to come in that maybe aren't as skilled, we need these people as well then again, there might be language problems or - >> you're so right there's no way, joe, if you are not a skilled worker, essentially to get in legally. people say, a lot of experts said, if you were to create a process by which more skilled and unskilled workers could get in legally, you might seriously alleviate the problem at the border that's the connection between the legal and the illegal immigration. it's supply and demand. >> we need to address both illegal with a big omnibus bill but neither side would give -- >> you're giving away part three. we're going to look at there's some low-hanging fruit and we are going to get into this big neither side will give each other a win. they can't get there >> because it's been -- there have been bills there and depending on -- one party wanted before, wait a minute, now they want it, then we don't want it >> and for different reasons but the -- i'll give this a
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little bit away from the third piece. the low-hanging fruit is the screen we put up the 85,000 number -- >> 85,000 get in when -- >> 484,000 it's unbelievable that 61 ratio. some of that is pent-up demand but look, the biden administration passed this massive chip bill. they're going to spend a hundred billion dollar on trying to create chips and semiconductors in this country, we don't have the workers for it if we want to build chips, we're going to need people to build chips and we're going to have to open up the border to bring them in. >> this is fascinating thank you. when we come back, oil prices hitting the lowest levels we've seen in nearly a year. we will check on some of the big oil names right after this the holidays are here. and dick's sporting goods has all the best gifts for everyone on your list. the hottest footwear from jordan, nike, and hoka. and the coolest apparel from all the best brands. plus must-have gifts from yeti, callaway,
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27th of 2021 when it dipped as low as $72 and 57 a barrel all of this is happening as concerns about china, protests there, what that's going to mean what that will do to global demand the oil majors are trading lower. you'll see that chevron is down by about 1.75% >> and we're going to stay on the subject, more unrest in china. protests against covid restrictions erupting in multiple cities. we'll have more on that next later mohamed el erian is going to give us his take. stayun ted you're watching "squawk box" on cnbc
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♪ welcome back to "squawk box," everybody. you've been watching the futures this morning and there's some pressure here. you can see this reflected around the globe in equities markets. the dow down by almost 200 points s&p futures down by 30 the nasdaq off by just over 80. protests spreading across china over the country's strict covid strikss.
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joining us now with how the unrest is hitting the economy, leland miller. in terms -- welcome, it's good to see you in terms of -- it's such a huge area of the world and such a -- you know, so many people what percentage are we talking about that are in strict lockdown right now just for starters, let's talk about that >> well, it seems to change day by day but there's estimates that 20, 30%, total gdp but in any given day, you have a sizable chunk of the chinese economy under lockdown and the arteries between these cities shut down you have a difficult time having any type of economic growth in this environment. >> in a western political system, the economy and the
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stability or the security of the leader is dependent on the economy. sometimes we think that way about china. it's like president xi really wants to get china's gdp back to some of the historical numbers that we've seen. and we think that that could inform his decisions on this policy, but i don't know if it does he doesn't have to worry about his job or is it at a point where he might now we never thought he would before but those words have been spoken that he needs to step down at some of these protests. >> i don't think we're at that point right now. obviously you need economic growth for the country to thrive and if the country doesn't thrive, xi jingping will be under political duress over time the virus is seen as a much more substantial issue than the current protests the protests could be contained, the virus is very scary. if you have a million deaths on your match, that's a legacy issue for xi jingping and for the party.
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i know everybody is just champing at the bit to call a reopening to anticipate this reopening which is always just a day away but it's very unlikely we're moving in that direction despite the fact the party is going to have to be responsive in some ways talking up a timeline for reopening or, you know, an easing of measures but the idea that protests are going to flip this, i think it's very, very unlikely. >> leland, you mentioned a million deaths that sounds like an incredibly low figure we had a million deaths and we've gotten maybe a fifth of the population size that they have we have a better medical systems and better vaccines. >> the death numbers that i've heard have been a lot higher than that. when i try to present this, i try to preserve the most conservative figure to say even if the numbers are what we're hearing from all the expert, instead of talking about 3 million or 4 million, you're talking about 1 million or 800,000, these are politically unacceptable number for xi jingping who spent the last
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three years telling the world that china's covid response was better than the west because he's been able to minimize the number of deaths even if the low numbers are correct, this is a major political problem for the party. >> i guess what i was getting at, what's more important for president xi a strong economy or power, the power of the ccp to remain in power? >> it will always be power in the past, in the past, economic growth was seen as part of the party's contribution to social compact we will provide you high levels of growth as a result keep us around now it's seen a little bit differently. the social compact has changed we're going to distribute the wealth more evenly but it still all comes down to power. they can't let the economy fall
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off a cliff. there are worries about that right now. but power is going to be the consideration in the medium and long-term path to maintaining that power is going to always be more important. >> what's the end game with covid, leland? we've got herd immunity in the united states, we have great vaccines, i would argue, and most of our people have been exposed to covid yet, it's still around it's still endemic can zero covid get the viral percentage of the population to zero will that ever happen? if not, don't they need to finally say, okay, we'll take your help. we'll take your mrna viruses or help us with the technology. i don't know if that's a possibility or not does that day ever come? would that be presidency xi losing face for the home-manufactured vaccine? >> that day should have come
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already. look, the idea here is there should have been a -- they had three years. there should have been an mrna vaccine rollout. there should have been some sort of mandated vaccinations for the elderly if they were worried about that -- those deaths going out of control a lot of these things should have been done but the iteration of covid zero that we saw in 2022 was very different than what we saw in 2020 and 2021 which was about mitigating risks this was shutting down everything and it became a system of control. so, yes, all these things should be done. the way to get out of this is to declare a date certain and take the hit along the way. the question is, will the party take the hit on deaths, the economy? right now it's more worth about deaths than economic growth. >> leland, thanks. >> maybe they're building a lot of icu centers i don't think that's happening
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either i don't see how this plays out i don't know whether you do. but none of the things seem great. the future looks very bleak. no >> i would say so. i think it's very -- >> speaks for itself leland, thanks >>. >> then -- the u.s. freight rail system is facing a potential strike that could cost the economy billions of dollars a day. we'll talk about the high stakes when "squawk box" comes right back
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the clock is ticking on a possible u.s. freight rail strike our next guest estimates a work stoppage could cost the u.s. economy $2 billion a day e ian jeffries is the president of the association of american railroads. we thought we dodged this bullet a few months ago when it looked like some deals had been made. what happened? some of these deals have been voted down by the membership >> first of all, good morning. thank you for having me. where we stand right now is that we've had 8 of 12 unions fully ratify the agreements that were made with union leaders in
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september. 9 of 13 contracts overall. four of those unions did not ratify when they put their agreements out for vote. and so we continue discussions with those communities to see if we can identity a voluntary agreement. we're focused on taking every step necessary to avoid a work stoppage. >> what's the deadline >> the deadline is december 9th? >> and the four unions, if they go on strike, if there's a work stoppage, do the other unions follow suit and not cross the picket lines >> certainly that's historic precedent and that's why it's so important that we work to ensure that no work stoppage will occur. because frankly that's not good for our customers, it's not good for our employees, it's not good for the economy, $2 billion hit a day. we've been very clear from day one that a work stoppage is not
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in anyone's interest and congress may need to intervene under the railway labor act. >> the president has been involved with this from the get-go what's happened? >> certainly the administration deserves a lot of credit and getting us as far as we've come. they were very integral in keeping the parties together in september to get the 12 tentative agreements we got with every union. we're pleased that, again, we've got a majority, we've got a pattern of agreements that have been ratified and these are historic agreements. 24% wage increases that will result in average computation of 160 grand a year that's why it's important we get these done our workers deserve the computation. they work hard 24/7 industry. and they deliver america's freight every day so we're pleased we've gotten two-thirds of the contracts ratified and
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look toward to a path forward for the others. >> and the numbers are astounding but it's my understanding that the biggest problem that the union members who have not signed off have just the problem with precision railroading it was something that hunter harrison revolutionized. we followed it back since the early '90s and it makes it easier for the companies the workers have complained that it's not as safe you have long railroad trains that are coming through. they can't go to some of these things is there any idea from the railroad companies themselves that they will find maybe a kinder, gentler precision radar rad radaring -- railroading for the future >> our safety numbers as an industry are the best they've
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ever been and we're always marching towards a goal of zero incidents and our employees are front and center responsible for that certainly quality of life issues were a primary theme in this round and that's why we're pleased that we were able to take some serious steps to create a scheduled work-life balance for a lot of our employees who work unscheduled work situations right now. certainly we'll continue to be at the table with those unions that have not yet ratified but the key issue is that we do have a clear pattern of ratified agreements and so we're prepared and have been prepared to reach additional agreements within the value framework of what was agreed to in september and absent that, we'll look for potentially congress to need to intervene as it historically has. congress was prepared to act in september. the senators showed leadership
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in the senate. the white house has been clean secretary walsh has been clear that legislation will be necessary absent agreements and the clock is ticking on this so we're working hard to make sure we avoid a work stoppage. >> secretary walsh and the administration, the secretary of labor has told you that if there isn't a deal reach, congress will act to make sure these workers are back at it so there is no strike >> well, again, work stoppage is not in anyone's interest if it comes down to it, that's something that we'll look to ensure happens again -- >> what have you heard from the administration just because the administration doesn't want to see this happen, but this is also -- joe biden has said he's the friendliest union president in history do you think he'll push congress to go ahead and force them to not have a work stoppage. >> i think that's why it's been so important that the administration that be engaged from the get-go. president biden publicly supported the agreements we met in september and they've been
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clear that a work stoppage is not a bible outcome. the administration remains fully engaged in this process. >> we hope there's not a stoppage we hope both sides can find an agreement, but we appreciate the update >> we'll talk to tech watcher gene munster next. check out this morning's laggards you're watching "squawk box" on cnbc this... is the planning effect. this is how it feels to have a dedicated fidelity advisor looking at your full financial picture. this is what it's like to have a comprehensive wealth plan with tax-smart investing strategies designed to help you keep more of what you earn. and set aside more for things like healthcare, or whatever comes down the road. this is "the planning effect" from fidelity.
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violent protests at the biggest iphone factory this china causing big problems for apple. bloomberg report this is morning that the tech giant will face a production shortfall of close to 6 million iphone pro devices this year as a result of the situation in china joining us now is gene munster, luke founding and managing partner. how much do you have a high degree of confidence in that you know the full story and does anybody? >> i think my confidence is about 30%. we're obviously working behind china censorship, some of the reporting has been limited what we do know is the big brush is that the protests are unique, the magnitude and the scope of them and it is noteworthy, we could frame it is, the 6 million
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number is -- how do we frame this in for apple. is it the iphone 14 pro production, iffa assume that it is impacted by one week either because of the covid protests at fox con and that will be about 7% of the quarter. pretty simple, straightforward math, that we do know. we know there is a history of when supply chain issues have hit apple production that they have missed numbers or has had a negative impact in the quarter and in a subsequent quarter they typically get the sales back a lot of unknowns but there is a clear arc here and the arc is that there are turmoil around iphone production in the march quarter. i would just add one own piece to this, i don't think these shutdowns are a concern for tim cook
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i do believe what keeps him up athe night is a much bigger issue and that is something that we have better clarity on it and the bigger issue is that china is determined to be self-sufficient to lead in their perspective and what that means is that they have issues like tariffs, and production supply chain, covid lockdowns and the protests and what keeps tim cook up and even elon musk up at night is trying to navigate what is a longer plor complicated picture around production in china. >> and there are so many moving parts. that is the thing that is kind of mind-boggling, all inter related. because you don't know how long -- the covid response, at this point it is still lockdown. you don't know how that reconciles itself. and then you throw in the wild card of the protests and that has got -- you just broaden the whole discussion to the entire ccp and everything else that
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goes -- maybe not yet in china but we always are quick to say, i wonder if this is the beginning of something i don't know how you -- and then the third unknown that you don't know in terms of what you don't know that leaks out from china so it is a huge black box. should you sell the stock? >> no, i don't think you should sell the stock i want to talk about some of the unknowns and that layered approach too, is that yes there are unknowns and i think the bigger issue, again related to the unknowns, is how these companies play this for the long-term. and i think if you had a view that apple was going to be committed to doing the majority of their production in china over the long-term, you may consider selling apple stock i think in this case they're making some measurable moves to diversify away as they get their supplier list out, it is a year late so we just got the 2021 supplier list and basically it was just over 50% of apple's revenue comes from products produced in kline.
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it is down from low 60s in 2020. so it is going down. and it is of the 150 new manufactures that were added to the list, 80% were from outside of china so i think that speaks to apple's commitment to starting to diversify away from the region, too. and then the question more about the near term. that is the long-term. i think the more important question, the near term it was i think a strategically wise move by the ccp on saturday or the weekend to try to say that there may be some loosening of the covid restrictions that may take a year to get there, but when it comes to protests and are they going to escalate, i suspect that they -- if i was going to guess, i think they would probably start to moderate because of that strategic move >> because it takes protesters >> it takes protesters to -- >> yeah. they take a dim view
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and then we haven't even said taiwan so i throw that in the mix down the road for future gene, there must be a way to -- it is kind of crass, but there must be a way to play this with suppliers in other parts of the world or people that -- companies that you shouldn't own and companies that you should own based on the ripple effects from what happens to apple in china. so i guess there are people working on that? >> right on. yeah, i think it is like vietnam, malaysia, that is where the investment is -- >> someone is going to get rich on that. thanks gene. >> thank you when we come back, kyle bass will join us to talk about the unrest in china and how global markets are reacting. plus katie stockton tells us what she's seeing in the trading charts for the week ahead. "squawk box" will be right back. i promise to serve, not sell. i promise our relationship
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good morning, stocks set to fall as we get ready for the final few trading days in november the dow starts the week though -- or ended last week in a highest level since april. futures pointing to a loss of about 200 points at opening
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bell and contributing to that, unrest in china where security services clashed with protesters upset at years of covid restrictions. we'll get a live report from beijing. and we're going to speak with kyle bass, cyber monday on top of everything else we'll tell you all you need to know about today's online retail extravaganza, as the final hour of "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen andrew is off today. we're watching what is happening with the futures and equity has been under pressure all morning long and it is the same story around the globe if you were to look in europe or in asia.
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right now dow is off about 200 points and s&p down about 28 and the nasdaq down by 77. and if you've been watching the treasury market, again on the concerns of the crackdown in china that we're going to talk about in just a moment, the ten-year at 3.679. >> we're going to talk a lot about china this hour. but just to get you up quickly to speed, citizens in beijing and shanghai demonstrating past weekend against stringent covid measures unprecedented in the era of xi jinping's leadership police patrolling the weekend hot spots this morning and i don't mean hot spots in a good way. this is where the protests are occurring. stocks across china and hong kong are lower and as we mentioned we have a live report from beijing in just moments and we'll talk to hedge fund manager kyle bass with his take on the situation.
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meanwhile, oil is getting -- it is like low 70s. the ten year is 3.6. these are what you wanted. why are you selling stocks because we don't know how this is going to play out china unrest causing demand and growth concerns. because the wti crude and the bench mark has fallen for weeks. and the wti went negative for 2022, there it is. shares of macau jumped after they would grant new licenses to current casino operators and wanted them to diversify away from glambling with other projects but it depends on how you get to 3.6 on the ten-year and on crude. both of those things are -- >> it is nice. >> we've been praying for and hoping for
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but there is always a -- there is a silver lining and a down side to all of the economic numbers. >> let's get over to mike santoli, standing by taking a look at as we get ready for the first trading of the day of the week and the final week of the month. it was a little bit of a vurp to joe and i both that it is a jobs report on friday, mike >> we do, becky. have the jobs report coming. i think powell is going to be speaking a little bit of inflation data so catalyst coming up. the market backing off and essentially the s&p 500 futures and the etf that tracks the index, back toward where we trades around tuesday. we've been in this prolonged kind of hesitation i would say for two weeks, the closes have been within 2% give or take around the 4,000 mark. you've basically not made a lot of headway but not broken down now what everyone is watching is that is the spot at which we are kind of pausing here the 200 day average is right there so this down trend line for the entire year, that is
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above and we're seeing a little bit of a wait and see around these catalysts. now you have a loss of momentum after the rally but still staying supported. and agree with joe, treasury is lower and oil breaking down. our net positives, unless they go too far and for the wrong reasons. take a look at the s&p for a couple of different ways at looking at emerging markets. the emerging markets etf tracking closely, actually that is the emerging markets as a whole. this is the emerging markets x china. so if you exclude china the s&p 500 not too different. it is china that is the big net negative a lost folks warming up to the idea it was very washed out to be long china after this big downturn we don't know what policy wise is going to be coming right after this take a look at a couple of pieces of tech clearly down side leadership this entire bear market. here is semis against software
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and semiconductor have had this burst higher and you've seen this a couple of times where this gap opens up and semis go on a run it is typically retraced lower and been a reason to say that maybe this will bit of a mini rally is due for a rest and a re-set lower now one of these is probably work and going to break higher you could get a bottoming process and maybe that is in general what is going on right here but we have to wait and see, becky, before we know if that is the case. >> this is a weird yquestion, mike, but breaking out china from the emerging markets, what would happen if you took the energy sector out of our markets like out of the s&p 500 over the last month or two months, is there a way to see how much is tied to oil and as much as we complain about high oil prices what that means for the markets when it disappears >> i wouldn't know with any
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precision but energy is about 5.5% of the s&p after outperforming massively this entire year. so it had a pullback about you if you run that through the entire index, it doesn't seem to be the thing that is driving things what has been fascinating is the way that energy stocks have massively outperformed crude itself so it is not really manifest itself in the equities markets i was just looking this morning. he see eog resources and marathon oil and even though oil prices themselves are down from whatever it is 120 down to 74. >> right mike, thank you. i think we have a lot of data to get through this week. it is going to be an interesting one and we'll see you again fvey soon. >> if you didn't know it, it is monday but it is -- >> how do you not know it is monday >> but it is also cyber monday and online sales are in full
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swing. and all of that stuff has to be shipped from somewhere and we're across in the bay in new jersey at a fulfillment center i know a lot of the -- no, i don't want to see a mob showing up to get an autograph from you. so i don't want to know where you are in new jersey. >> it seems like you had a great weekend. as we mentioned, we're in a best buy facility in new jersey cyber monday getting started here on the east coast and behind me you could see the online orders are moving and there was a guy picking and packing a moment ago i swear there is was a guy behind me seconds ago. but overall the average spend per online over from friday to sunday was about $113. this is a double-digit increase from black friday alone. showing some early strength for the consumer but for investors, strong online spending that doesn't necessarily translate into great stock performance.
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if you like at the etf, first the retail xrt etf during the holiday season, that is november 1st to christmas, it underperformed and over the s&p over that time and that trend is on track to continue this holiday season now looking at black friday alone, the data that we have, full data sets for, numbers are kind of bearing. when you look at mastercard, seeing double-digit increase in overall spending online on back friday adobe saying single-digit increase and double-digit increase in in store spending but major growth over nonholiday shopping day in october that includes toys, exercise equipment and electronics including smart speakers and also -- also seeing more than 200% sales growth. so we are here at best buy where companies that are retailers like a best buy are hoping that the growth will continue
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and we're seeing brands like apple being the most searched brand during the holiday season and a lot of people looking for exercise equipment and things like that. nike could be a popular shopping destination. we're looking at the more traditional retailers and seeing a heavy level of discounting according to adobe they say discounting is up about 17% over the black holiday weekend, that is friday from sunday so we'll see how that impacted retailers. many of them flagging that they have excess inventory they're trying to get rid of back over to you. >> best buy. the demise is greatly exaggerated for best buy in fact, you know what happens, i think people still do go to best buy and then buy online, sometimes. but you need service and i use mag knollia and the use the geek squad. so it is still an important part of the economy >> is this a paid endorsement or something. your dropping names and -- >> no, i like best buy.
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>> and throwing out locations. >> it was going to be gone because everybody would buy from amazon but it comes to your house and now what do i do it might be just me. >> in general, i've been in best buys for several black fridays covering it. so, yeah, maybe people are buying things online but people want to buy in the store are tvs. people are coming out with tvs. >> and you might not need any help, but i definitely need help, there are smart tvs, just not smart owners. >> truer words that have never been spoken. i think becky is over there silently agreeing. we're here to help you we know the medication is out there for you. >> the remotes to try and operate. >> right and how many remotes are there the tv remote and audio
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and it is intimidating see you frank. >> when we come back, mohamed el-ery an kicks off the final week of november and first kyle bass talks about the unrest we're seeing in shanghai and other chinese cities stay tuned, you're watching "squawk box" and this is cnbc. s, and customers all on different systems. you need to pull it together. so you call in ibm and red hat to create an open hybrid cloud platform. now data is available anywhere, securely. and your digital transformation is helping find new ways to unlock energy around the world. if your business kept on employees through the pandemic, innovation refunds could qualify it for a payroll tax refund
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welcome back to "squawk box," everyone the futures this morning, been under pressure dow futures off by about 200 and the nasdaq down by 81 and the s&p off close to 30. and highly unusual protests erupting in china over the government's handling of the covid situation. the fallout already being felt in the financial markets eunice yun joins us from beijing with more on that. >> thanks, becky well the protests were arguably the most open show of resistance that china has seen against the community party since the 1989 crackdown on tianamen square it erupts in several cities
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including here in beijing and sparked by the deaths of a building far in the far western city at which many people suspect was worsened because of covid controls now the bulk of the public ire appears to be directing at the zero covid policy. though there has been some evident of wider grievances, some people have been holding up white paper to protest censorship and also even in shanghai, people were calling for president xi jinping to step down now beijing has been indicating that it is going to be sticking by its zero covid policy while mitigating some of the more excessive curbs. however, how successful that somewhat new and zero covid policy is going to be depends on if covid plays along so if the covid numbers stay
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relatively manageable beijing might be able to muddle through. but if the numbers continue to skyrocket or in any way jump, then we could be faced with a espn where -- where beijing would have to lockdown to send a message across the country that the protests will not be tolerated. or it could be faced with a public health crisis if the virus runs rampant, joe. >> okay. great, eunice. we appreciate your work over there. and joining us now to talk about the unrest in china, kyle bass, founder of heyman capital management and i think i started last hour with our ability to know what is actually happening is -- it pretty good nowadays or are we -- do we know maybe half of what is really going on or ho how accurate are the things that
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we've heard in mainstream media? >> joe, i think there is -- everyone has networks that we build and the sensors in china have been working overtime trying to quell the mobilization of the people. whether it is the mobilization of the people at foxconn dorm where this began, called the outward protest in china began, the irony of it all happening at apple sweat shop in the largest iphone factory in the world, isn't lost on anybody. but mobilization in foxconn and local solidarity in shin jong, where the 10 plus people died in a building that was locked down and they couldn't get out because of the zero covid policies and now it is spread to over 100 universities, jim, including -- or joe, sorry, including shing way university, one of the most recognizable
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universities in china and xi jinping's alma mater so i think these protesters are the largest threat since the tiananmen massacre but back to your point, joe, we're not going to get, quote, official reports of anything out of the chinese government. you just think about their, quote, official death toll from all of covid is 5,200, a little less than a small baltic state when the official death toll from the tiananmen square massacre is still zero it is not 10,000 plus students that were run over by tanks. so it is important to note that the chinese government does lie through its teeth and will continue doing so. and i think the social media expansion and the mobilization in social media is something that the sensors are having a real difficult time with. >> zero tolerance can be used for a lot of different -- to describe a lot
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it does -- does the ccp have the ability and the apparatus and the police presence to go to zero tolerance for protests? >> the answer is yes, i think they have so many more tools at their disposal today than they did in 1989. just think about their social credit score they could literally turn off your ability to spend. the way that the apps work over there, they can estrict your ability to travel on a subway or a plane or even out of your house. they could eliminate your ability to buy things and starve you to death and they could do all kinds of things but will the people accept it and what we're seeing now is a groundswell of protests over the ridiculousness of the covid lockdowns. and again the fisher or the schism in the world is that it
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is been -- sorry the fire has been fanned by the chinese ability to see the world cup they see the crowds in the world cup and no one is wearing masks while they're in basically internment camps getting covid tested two and three times a day and getting fed off of a moped so i think the problem with china's approach and the chinese government approach to control over their people is backfiring on them. and these protests are widespread from the entire east coast of china to the western regions and the lands, you're seeing these protests happen so i think xi jinping doesn't have any great outs here, joe. number one, he could have a tiananmen style crushing of the people and you saw military and police tactical vehicles entering shanghai last night on videos on
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waybo so it is important to note that i have never seen xi jinping change course due to pressure he has a malice style plot and i think they could invade tie would be and look for national unit through control of the airwaves there is no way that xi jinping could save face and back down. so we're entering ia new point between the chinese leadership and the people. >> and we've seen the fuse lit not just in china, think of other countries where there were repressive regimes and we see something that looks like it might be the start of something. i don't know, the arab spring or whatever, protests in iran that they never seem to go anywhere is this different? do you get the feeling that this is so organic now at the universities in china and more
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than just about covid, maybe about, you know, i'm hesitant to go back to the days when we said sooner or later china will be like us. because i don't know that they'll ever be like us. so i don't want to fall in that trap but is this the beginning of something and if it is, how bloody would extra crackdown be. it is not just people in the square, you said 100 universities, didn't you could they really contain that >> the groundswell is enormous and it is happening organically and happening let's say outside of the ability of the sensors to deal with it in fact, you've seen chinese bots that have been inactive for five to ten years on twitter starting to flood the airwaves with escort ads and women of the night trying to simply jam the airwaves for let's say that rank and file that have vpn access to the rest of the world, you're
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seeing the sensors look like their on tilt. and so this mobilization is happening aoutside of the surveillance equipment and social credit scores and china's ability to contain things like this and joe, it has a lot to do with the repression and their ability to see the rest of the world enjoying basic human rights and freedoms that none of the chinese people have. and that is what i believe, i believe this groundswell is real you look at it across the country and one of the battle cries that you here is there was a bus being driven by a covid zero worker in the full hazmat white suit, and it was driving through a mountainous region at night because he didn't have his ability to properly drive the bus, the bus flipped over and killed everyone. and so the chinese students at these universities are one of the battle cries is we are all
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on the bus, it just hasn't crashed yet. so i think this is a much larger than simply zero covid this is about repression and lack of human rights. >> so you think that the chances ever something in taiwan is increased. what does it mean for global -- for someone that is in vested here in apple or invested in stable global growth is this something that we need to be thinking about at this point. oil is at 74 of a sudden. >> oil is short. there are so many suppose problems with hydrocarbons with bad transition energy around the world that if and when the world settles down, you're going to see $150 plus oil at some point in time. but, look, i think that where you say what does it mean for
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investors in apple, the irony of it all is back when the hong kong protests prior to covid emergence and the virus expansion around the world, the chinese government was blaming the west for starting the hong kong riots and the pushbacks on the national security law. and china'sin tense dire to blame someone else for their own problems, this one will be no different. the irony, as you mentioned apple, all of the uprisers really began with the foxconn uprising at apple basic sweat shop making the iphones. i don't know if you have seen the pictures they have run what they have warm bunks you have the employees living in dorms and they work 12 hours and they're off 12 hours and two people share a bunk. so if someone will work 12 hours while someone sleeps in the bunk and vice versa
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there are three layers of suicide nets placed on those buildings at foxconn because the people can't take it any more and have been killing themselves you can't imagine how bad the conditions are at these factories. and this first uprising was on sanitary conditions and pay. >> how does that fit with zero covid policy >> what i'm saying is it is repression so the foxconn protest was about sanitary conditions for the workers and pay. they earn a few dollars a day. so th so the irony, they'll call it the tim cook revolution. >> how bad is it for apple, because while their making plans to move away from this, they can't do it overnight. >> it is just going to take -- it takes forever to move a
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supply chain of that size. i've had conversations with fortune 500 ceo's have multiple billions of revenue in china that will tell me behind the scenes they agree with everything that i say on air, but it is going to take them many years to move away and they're not going to tell the press while they're moving they're going to do their best to move away, but kind of under the guise of darkness because they're fearful of a reprisal from the chinese communist party. so this is all a game being played mostly behind the scenes but now this groundswell, it is beautiful to see the people finally push back against the draconian policies of a community regime. >> but covid is lurking too, so i don't know what that means for the old people in china either but those are unbelievable conditions you're describing kyle, we appreciate it today we could always come to you for some of these things i guess it is not so bad at
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twitter compared to -- right is it worse over there i feel for those poor -- thanks, kyle good to you have on. coming up next, we're going to zero in on franchise. phil lebeau will have that story. stay tuned you're watching "squawk box" on cnbc what should the future deliver? (music) progress... (music) ...innovation... (music) ...discovery?
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we're coming off a holiday
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weekend that typically generates healthy car sales and right now the automakers are seeing a couple of trends that are good for the consumer phil lebeau joins us with more prices are finally coming down >> they are coming down. not as much as you would like or many people would like to see around the country but there is an easing in terms of transaction prices for a variety of factors here is an estimate of what we're expecting from the november sales data when we get it a little bit later this week. now this is from rbc capital, the average has increased so they're putting more cash on the hood, average transaction price down to 45,800 and there are slightly incentives but inventories at the dealership. that is greater news you have a great selection and we're starting to see an increase in sales rate this is important because we'll get the latest reading for november a little bit later on this week. august, 13.4
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and this is the pace of sales not the actual sales for that month. and then you see the increase in september. october over 15 million. may not hit 15 million in november but most believe we're in the high 14 million range and as we have seen the auto sales start to increase a little bit and the inventories improve, look at what we've seen with the traditional automakers, the big three. if you take a look at them, since september 30th, that is when the dow hit the lowest water water mark more the year, look at what the traditional automakers have done now what tesla has done since then keep in mind, there is not a shift in demand of electric vehicles demand remains strong. what this speaks to is that tesla is its own beast when it comes to the auto stocks, whether it is twitter or a look at what is happening in china, that is what you're seeing with regard to the big three versus tesla, the traditional automaker
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versus them and the auto dealer stocks having a nice move as people realize, these guys are in a nice position both in terms of inventories increasing and the pace of sales remaining strong >> i was going to ask you about that the pace of auto sales picking up so much in october. is that because prices finally came down so more consumers were willing to buy or this is simply inventory. >> no, greater inventory that is the biggest thing. look, we still see more demand than supply right now. some of the demand is being destroyed at lower end of the market the dealers and automakers are seeing that. but the middle and upper end of the market, that demand is still there. and so that is what they're -- the reason that they're seeing greater sales is they have more inventory and greater ability to meet people looking for a new car or truck >> yeah. i'm waiting myself looking for the inventory. when do they expect inventory
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will meet demand >> oh. mid to late next year i would say maybe third quarter. and it all depends what happens do we get a recession earl why i to mid next year that changes things dramatically but at the pace of where things are right now, becky, i would say late second quarter, early third quarter. >> phil, thank you good to see you. >> you bet. when we come back, mohamed el-erian joins us on the markets and more analyst with chart master katie stockton. right now as we head to a break on this cyber monday, let's take a look at a live shot of amazon fulfillment center in robinville, new jersey it looks like they're busy not super busy but busy stay tuned, everybody. u'yore watching "squawk box" and this is cnbc
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welcome back to "squawk box" right here on cnbc we've been watching oil prices this morning and right now you see wti down by about 2.5% to 74.40 this morning we saw an intraday session low, the lowest level since december of last year.
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again, this pressure comes because of concerns about what will happen to global demand with potential china lockdowns on friday we're going to be talking with chevron ceo mike wirth, we'll talk to him about what is happening with oil demand, what they're going to be doing in terms of just development around the globe this latest venezuela news and the allowing for them to continue to produce there or go back for six months. all of those things coming up. that is friday morning right here on the set with us on "squawk box. another big week for the marks ahead of us. unrest in china impacting stocks we'll hear from jay powell on wednesday and then friday brings us the november jobs report. ahead of all of that we're joined by mohamed el-erian i have to start with the news of the day, china, and the impact on the equities markets and the impact on the commodities markets and what you think about the economic impact as well. >> so i think the impact on the commodities market makes sense because it is pointing out slower economic growth
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and the commodity markets won't be impacted by the supply disruptions. on equities, i'm surprised it is not more different ated when it comes to u.s. equities i think the main story in the u.s. is the fed, so wednesday will matter, is the labor market, so friday will matter. china, unless it gets to a geopolitical issue, i don't think it should matter as much as people seem to think it should matter for the u.s. markets. europe, completely different, asia, completely different >> and mohamed, just in terms of the unknown with covid, and i mean one thing to try to figure out how the community party is going to react, it is another to figure out how covid will react to a population that doesn't have the natural immunity the rest of the globe has and not made use of that time with some of the western vaccines. >> yes, it is totally baffling we had the issue of life versus
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livelihood and we flip-flop until the vaccines came along and allowed for certain degree of herd immunity china has been trying to do covid zero policy, never got out of the lives versus livelihood dilemma and has flip-flopped and now the population patience has been tested and as joe wisely said, don't underestimate what happens once the jeanne is out of the bottle. they could solve it by bringing in western vaccine to be clear, you don't solve it immediately. it will take a good six months to get herd immunity but the longer they way, the more complicates if they go the other way and go through crackdowns, that will make things worse. so they could solve this but not immediately. >> okay, let's talk through the implications of some of the companies doing business there we've already spoken this morning about apple. you've got nike, you've got tesla. and some of the companies that are reliant on supply chain in
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china. how do they isolate themselves from those and insolate themselves is the word i'm looking for and what do you think about those stocks we have apple shares down by 2% this morning. >> right and that one i understand. vw have another one. can you not rewire supply chains overnight. it takes a long time to rewire these supply chains. so what does it mean for those companies? it means supply uncertainty, what does it mean for us as a whole? it means a possibility that between what is happening in china, between the change in globalization as a whole, between resuring, we may have an issue and inflation gets stuck around 4%. that is how it matters to u.s. ultimately, is that the supply chain and the change in globalization and wages and all of that means inflation will not get back to 2% quickly
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that is what it means for us but for the companies involved, it means it takes longer than they would like to rewire the supply chains. >> and let's talk about what this means for the economy and the fed. is the fed at a pivot. we thought even if they pivot, it is higher rates for a lot longer but does this change the equation, does this change the picture? >> is it does not. i think don't it impacts the fed in any way. >> why not if you have oil prices coming down and you think that is the right move for the commodity. >> because remember the transition the first inflation were oil prices and food prices and the second was goods prices and the third one now is services and wages. so the fed is focused on services and wages that is what it is going to determine how quickly they downshift. i do believe they're going to go 50 next. and they'll be very tempted to go 25 after that but it is all going to come down
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to the service sector and wages in particular. >> okay. we talked about the railroad strike, the potential for a railroad strike this morning is this something that you think actually happens, would congress step in if they didn't, what would this mean if you're talking about $2 billion in losses for the economy on a daily base. >> so i'm speaking from the u. kuxt where strikes have been a reality. they were on strike over the weekend and we're talking about nurses, you're talking about teachers, where industrial strikes and action is spreading as people resist the decline in their real wages it is interesting to see in the u.s., that phenomenon is not as advanced, i don't think it is going to become a major theme. i do think you're going to see different sectors reacting differently. i don't think we risk the
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disruptions in the u.k. and in europe ultimately, the u.s. comes down to three simple issues you believe the labor market could continue strong as job vacancies act as a shock absorber, that is issue number one and that determines wages. issue number two, does the fed end up in a third policy mistake having already committed two and then issue number three, as important as one and two, is while people are rushing to say don't worry, if we get a recession, it will be short and shallow, i say keep an open mind i hope we don't end up in a recession. but if we do, there isn't enough evidence to suggest it is short and shallow. so these are the three things. they don't refer to industrial action or china. i think those are the three things that will determine where the u.s. goes. >> we'll get a hint on friday with the jobs report what do you anticipate seeing, what could come as a big shock >> i think the big shock would
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be that labor plmarket does not soften if it remains strong, i mean a lot of job creation and labor force participation doesn't go up and i mean wage growth goes up 5% plus, if that happens that would be a shock to the mark even though it is good news for the economy. i think most people expect that the labor market will be softening but we'll also need to see the jolts data they lag by a month. but that is important as well. >> mohamed, thank you. we'll see you soon. >> thanks for having me. >> coming up, jim cramer's first take on the trading week ahead and katie stockton tells us what the charts are saying about the market setup in the end of the year a reminder you could watch or listen to us using the cnbc app. stayun ted you're watching "squawk box" live from the market site in times square
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let's get down in the new york stock exchange and check in with jim cramer. welcome back and happy holidays. >> i hope the same for you. >> and i saw pictures of you at the eagles game. >> oh, yeah, one of the best games i've ever seen >> way to go. >> serious guys, mvp candidate it is really great >> congratulations and go birds. hey, let's talk about the situation in china because that is what isecting markets around the globe
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what do you think about the situation? >> well i don't think our markets should be reacting like this i know that china is very important. but i think that when we think about what has been working in the market, it is companies that are not involved with china. so when you take the dow down, you have to pick at a lot of the stocks that in the dow are just uneffected and it is amazing how much, as horrible as it is over there, i really think we have to rethink the notion that we have to be down really badly every time that they're down because the interrelation is not great. it is like in 2011 when we saw what europe did, we don't have as much interaction as people think. >> i could understand that for the broader markets but if you're looking at dow laggards, apple down by 2.1 and chef ron down by 2%, maybe it makes more sense. >> are we going to trade oil on the basis of china we have mike wirth on friday that will tell you there is nothing to do with it. the amount of oil china uses
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isn't as important as what we cut off from russia. so i'm not saying it is a false dichotomy that we need to worry about them and us. i'm saying worry about us and we're doing pretty well. coverage that you've had all day about cyber monday and black friday, i think it is very positive the fact that we had that we ha i'm not saying is bad. almost every single mall store reported better than expected. even nordstrom was okay, which is an extraordinary situation. so i'm saying, take the other side here. >> i thought what the dhl guy was saying was pretty interesting too. >> wasn't that >> it's basically flat we hadn't spoken to him before but the idea that you're looking at volume. it wasn't just black friday because all those sales started earlier in the week and you saw people ramping up. unless dhl is stealing from fedex or somebody else >> since when do we care more about china than black friday? there are some futures guys who cannot resist going down
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i mean, let's just face it president xi, if he decided tomorrow, to use the reverse mrna, you would be buying all these stocks so i question the whole notion of our market being down big off china. by midday, what happens typically is people come in and start bargain hunting, the purely domestic plays. i'm not saying that oil will flirt with, say, $70, but i really think the idea that we come in and trade off china is as weak as we did when we traded off europe is lazy thinking. not rigorous >> jim, thank you. >> thank you >> for someone who i know is a rigorous thinker 'll webe back in just a moment with katie stockton. stick around
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after last week's 1.8% gain, the dow is only down about 5% now on the year. the s&p is still off more than 15% in 2022. joining us with a technical look at the markets, katie stockton, founder and managing partner at fair lead strategies, a cnbc contributor. let's cut to the chase, katie. this is historically, seasonally strong period. it just adds to a rally that
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we're seeing that is in the -- still in the midst of a longer-term bear, in your view, but maybe it looks a little like it goes a little further before we head back down? >> i mean, the seasonal influences definitely don't hurt but we now have a relief rally that's been in place for several weeks, really since the beginning of october that's when we saw short-term momentum shift to the upside short-term momentum still is to the upside and we want to be respectful of that and yet we are starting to see some signs of exhaustion, and that's what we're focused on here near term. we want to, you know, ride the relief rally until it really fully matures. the s&p 500 is fast approaching its 200-day moving average even with today's weakness, there's no impact on our short-term gauges, and yet, we think that any breakout above that 200-day moving average would be pretty short-lived and it's in part related to the action today and the volatility index or the vix
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we have a gap up there and that gap up follows some signs of short-term downside exhaustion for the vicks as of last week so that has us paying attention, looking for perhaps an increase in volatility and if that does impact our short-term gauges, we'd react to it >> not to be long-minded, but if the s&p were to go further than you thought, in terms of up, if it got through 4,200, what do you think the percentage chances are that it could keep going to 44 or 4,500? is it zero and how would you explain that if it happens? >> well, it's hard to assign a percentage but i think t a low probability. we could get to 4,200. th that's reasonable to expect, but that's it. and i think it's a low probability. and i think an extension beyond that is an even lower probability, and i say that because the long-term momentum
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gauges still do point lower. we don't have any basing phase in place yet, and most bear market cycles or i guess all, really, at least in our lifetime, have resulted in some kind of bottoming process rather than, like, a "v" bottom, which is what this would have been so to us, it's not a corrective phase. those corrections can last in a v-bottom fashion but not a bear market cycle like this, so we expect some kind of series of retests of support, so even if we see a run-up to 4,200-plus, we would expect a very significant retracement. so, it's not something that we'd feel the need to chase >> okay. we got that. how about -- let's look at some other markets like oil is oil in a breakdown phase now? >> it's not really a breakdown i mean, we know there's been a very significant loss of long-term upside momentum behind crude oil, and we're feeling
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that very much here near term. we suspect there's a long-term trading range intact here with support between about 70 and 75. momentum, of course, short-term is to the downside there and now the energy stocks are starting to feel that, but keep in mind that they had a really strong run-up, and the same i could say, also, at about chinese equities we would contextualize any kind of pullbacks in these areas that are sensitive to crude oil as something that is a retracement of what we've already seen >> can we get the ten-year and bitcoin in one minute? is the ten-year seeing its highs? you think we -- in yield or do we head back up to 4.5 still? >> i think we'll head back up but not in the very near term so i think there's more downside for both ten-year treasury yields and also for the dollar, both of which are into some
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short-term support areas for ten-year, it's about 3.5 for the dollar index, it's about 105, and below that, it was about 103. so, as long as this corrective phase keeps hold on those sort of macrolevel technical sort of asset classes, we would expect that to influence risk assets positively, but we think we're talking about a couple of weeks now, and we'd be ready to get hinged once we see signs of downside exhaustion there with treasury yields likely to forge higher >> 30 seconds on bitcoin it hasn't broken, but if it does, what was your next level 12,000 do you expect that to finally hold do we get there? do we not? >> the big breakdown for bitcoin was below 18,300 that was confirmed, unfortunately, and it put next support around 13,850, so below 14,000 is the next support level. obviously, very significant downside from here we already know that this bear market cycle still has a hold.
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>> very good okay, perfect. thanks, katie. i guess we didn't get live hogs. maybe next time we'll get -- is that still pork bellies >> yes, along with frozen concentrated orange juice. >> all right we got ten seconds >> let's take our time >> we got plenty of time we'll just coast into "squawk on the street." >> happy monday, everybody >> yeah. happy cyber monday "squawk on the street" starts right now. ♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer david faber has the morning off. futures are red as oil goes negative for the year. we're watching the protests over covid restrictions in china, take stock of black friday sales and get set for powell and jobs data later this week our road map begins with those china protests, spreading social unrest over ongoing zero covid restrictions sends stocks and oil lower. apple's supply concern reportedly facing


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