tv Squawk on the Street CNBC November 28, 2022 9:00am-11:00am EST
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 a major iphone
pro shortfall out of china, and as we said, retail notching a new black friday record, kicking off a strong start to the holiday. let's begin with market reaction to those protests in china against that country's strict zero covid policy. remarkable video, jim, over the weekend, something we haven't really seen since he came to power a decade ago >> go back to 1989 go back to tiananmen square. there were peaceful protests that were then turned into anything from 200 people who died, according to chinese, to 10,000, by some of the humanitarian organizations now, in that period, they did not have a strong central government as they did now and there was dissent in the army, and there was also dissent around -- at the very top. they don't have that now what you see is horrendous, but what you see is what you get when you don't have -- when you don't use -- because they do have it -- a reverse engineered
mrna what i am confused about, and i'm using that as a play word, is how we react suddenly to things that are happening -- i don't mean to conflate the horrible humanitarian repression that i see there -- but what do we want from the fed remember the fed they want lower oil. they want less economic activity they don't want to have to do it here they want to make the world slow down so things are not as bad, and they're getting it so, are we supposed to react negative we react negative to what we don't like to see if it was in our country. but we should react more neutral in terms of what we would have considered just a few weeks ago, which is what the fed sees >> sure. we're going to get china data later this week. there's a reuters poll about their pmi likely to go sub-50. >> they're one of the slower-growing countries in the world, that's an amazing thing with 1.4 billion people. russia off the front ages
suddenly after just horrendous missiles -- number of missiles being shot and the question is, are we going to give them -- give ukraine -- it's off the front page i think it matters very much for inflation, given the fact they seem to be in control of our ag business one of the reasons why deere had such a good quarter. >> we'll talk about price target increases. >> deere's quarter was amazing just an amazing quarter. but again, i don't want to get too far ahead of ourselves china is terrible humanitarian, positive to keep inflation down, because the best part of what's keeping inflation down is commodity. we've not seen wage yet. wage is going to be, again, layoffs in silicon valley, being a rubric for technology in general. >> are you worried about supply chain disruption that would actually be inflationary out of china? >> no. because basically, i think that everyone learned their lesson
last year, have a second source. apple's tried to have a second source what can you do? they produce so many phones. there's a grave misperception about apple. all you have to do is watch the nfl, which att, verizon, and t-mobile, verizon giving away the high-end phone now, they -- when these trackers of apple, the people who are trying to trade it furiously, want you to sell it today, they don't have any insight you cannot get insight from those three. and believe me, i have tried mightily, and i have even some friends, hands-down, not a friend, that's a lead -- i shouldn't say that hans vesper is a nice man. but i think all the numbers that you see lend to a longer cycle they missed this quarter >> yes >> but if you don't know they missed a quarter, you really have your head in the sand so, again, i'm presenting a more positive view. the dow has been very strong i know this is seasonally post-thanksgiving, not as strong a time i get this decline
but we have to recognize that we went through a retail period that really, other than target, was rather strong. really incredible. >> oh, yeah. we'll get to black friday numbers, some of the adobe numbers, b of a. >> shopify >> up premarket. but as for apple, wedbush says maybe you take 5% off units for the quarter, maybe 10% >> again, the most well-documented miss in history -- you're watching a rebellion in apple city. so, if -- how's apple -- i mean, tim cook's furiousry tly tryingo get a second source, but in the meantime, what we do is we have a situation that is widely documented, and we'll speak to eunice, that that's the epicenter of what's wrong, so nike will go down. i hate to say that china's not important. that would be ridiculous 1.4 billion people is very important.
but i would say if our market's going to go down on social unrest every single day, then we will give up 10% that is just not a good idea go down on earnings, okay? go down on the fact that enterprise software is awful that's the weakness -- that's the achilles heel of this economy. >> and we'll get a bunch of earnings this week really quick, just in terms of the price action in china, i mean, it's been kind of a rough night for hang sen but the month has been incredible. >> look, you got to go to back to what we were saying in march of that terrible period, and i just think that -- remember, if they wanted to change their minds and get this -- give them the vaccine, so i think it's a little unreal, since we've all benefitted from the vaccine here, we think this repressive country can just change its
mind i don't think they can change their minds that easily. >> it's a great place to start with eunice for more developments surrounding the zero covid policy there. let's get to eunice in beijing late night with a slew of remarkable video from the weekend. >> reporter: yeah, absolutely. those weekend protests are arguably the biggest show of resistance to the chinese communist party since the 1989 crackdown in tiananmen square. over the weekend, we saw protests erupting in various cities around the country, including here in beijing, and they were sparked by the deaths at a building fire in the far western city, which many people believe could have at least been in part due to covid controls. now, the public ire is largely directed at the zero covid policy however, there has been some indication of wider grievances people were holding up white
paper to indicate the protest against censorship, and also, in shanghai, there are some people even calling for the resignation of president xi jinping. beijing has so far signalled that it is going to stick by its zero covid policy, though it did say that it would hope to mitigate some of the more excessive curbs. state media head actually said that zero covid is science >> based and effective and has been warning local officials against those excessive, what they describe as, layers the wild card as to whether or not this policy is going to work is if covid plays along. so, if the covid numbers kind of stay at a manageable level from beijing's perspective, i think we would see this precise approach and beijing kind of muddling through however, if it doesn't, and we see a huge jump in covid cases, then potentially the policymakers here could be faced with some two undesirable scenarios, and one would be a
potentially brutal lockdown in beijing, which would get the cases closer to zero and also send a message across the country that protests will not be tolerated, and then the other option is that they could potentially see a massive health crisis if the virus gets totally out of control so, the communist party is likely going to be weighing what is going to be most detrimental to its survival. guys >> eunice, first, stay safe. i don't know a person in this country who watches our network that isn't workried about you and i mean it. we know the way they can handle themselves but you mentioned it's science-based. at one point, under the previous president, we thought they created covid. obviously, that could be misinformed. but when they say it's science-based, what are they -- what kind of science are they using? >> reporter: they're not specific i mean, they definitely have a lot of scientists or virologists
who come out and back the policy, but they repeat that it is science-based, to get the message across that what they're doing is the best way forward. today, they've also -- as well as yesterday, there are plenty of editorials that were talking about how great china has been in defeating the pandemic and covid, that when you look at it based on hospitalizations or on deaths, china is really the one that, compared to other countries, that has done the right thing. so the suggestion is, i think, that jim, you were alluding to that it's really difficult to kind of change the -- this large ship and to just overhaul the policy really quickly, even though there has been this -- these, like, unprecedented number of protests in multiple cities, which, you know, the country hasn't seen in decades >> eunice, as we know from the '80s and then at that point they did not have such a totalitarian
government, if they wanted to quash the -- if they wanted to quash the dissent, they could just arrest everybody. they could, frankly, shoot everyone >> reporter: yeah. i think that the chinese government is very, very good, very adept at making sure that they can put down or clamp down on any type of overt dissent i think what we saw over the weekend was quite remarkable, that people were so upset and just willing to actually take that level of personal risk. and i think what was also interesting was people were -- for the most part, angry about the zero covid controls, but there were a lot of people calling out for freedom of the press, freedom of speech, freedom of information, even freedom to play video games, and even though that sounds frivolous, it actually, i think, indicates how intrusive the government is and has been more
recently in people's lives and so, you know, that's something that the communist party will have to be worrying about, that these -- that the anger towards zero covid doesn't, from their perspective, start to spread to anger towards the party on, you know, various levels >> wow eunice, well said, and we'll obviously monitor with your help later on today eunice yoon in beijing, thank you so much. when we come back, early report cards on the holiday shopping season, including some interesting data involving walmart and amazon in fact, take a look at an amazon warehouse in new jersey as we start paying attention to cyber monday adobe looking for record numbers there as well. take a look at futures more "squawk on the street" continues after the break. don't go away.
some new data shows the holiday shopping season off to an upbeat start. according to adobe, online sales topped $9 billion for the first time electronics among the major growth drivers, and as for in-store and online, mastercard says u.s. retail sales up 12% from a year ago. that excludes automotive morgan stanley mentions lulu, victoria's secret. >> i think lulu is having an unbelievable holiday it is their season can we go back to what cory barry did with best buy? it's almost as if the company's
been written off huge yield a belief their same-store sales cannot possibly ever be great. one of the great charts in the business an extraordinary quarter you would have thought from home depot and lowe's that she would have too much inventory. she has the right inventory. it's well stocked and she has so many multiple sources from the east -- anything from asia, she's done she spent about $400 million getting that right four or five years ago, so rather unheralded. to me, i do not have any reason why she's unheralded her stores look great. right inventory. and if it's going to be hard goods, it's going to be best buy. still a buy here >> despite what, say, hp said about pcs and printers >> you know, i think that she -- when i spoke to her, she was so wise to the hp problem, which, by the way, i mean, look, enrique did a pretty good job, but the fact is that she was aware, and by the way, mobile
gaming is the weakness when it comes to gaming, not pc. she was -- she quite understood there was a glut of pcs. she shifted -- she went heavy appliance where there's been a problem, but no, you know, people act as if she's the source of the glut she's the anti-glut, and if sell that stock off china, i want you to rethink everything you do in life, including the possibility that you may have thought that green bay won last night because you turned it off too early, which would have been a tragedy. nbc coverage i'm a total homer, but nbc coverage was really good >> as an aside, you saw the ratings for thanksgiving football >> i did not, i'm sorry. >> record thanksgiving >> this is one of the thins. the dichotomy between watching and knowing you have to have to sports versus everything else. i mean, it's so difficult, because if you're a warner, warner bros. discovery, do you have the money to continue nba
football is insane notice a dearth of auto ads. why? a dearth of inventory. now, we had a great conversation with phil, but there were no f-150 ads to speak of, which is extraordinary, but that's like, there's no f-150 ads where are they jim farley, i would say, he's having a great quarter, but the one problem is they had name plate issues but i think people have to realize, i'm not saying, make your judgments watching nfl ads. i'm saying the companies are shifting huge budgets towards sports, and they have to because it's where the numbers are >> yeah. best buy, for example, ll bean, we talked with on friday, huge advertiser of thanksgiving bank of america does some work on average selling prices. they say about up one, year on year, which is below inflation, higher than normal discounting >> but think about all the stores in the mall that did much better
american eagle i mean, i'm going to put them on the border of pathetic last year gap stores, i will put them totally in the pathetic category they're coming back. lot of dollar gen supports now, when i go to my dollar gen, there ain't nothing that's a dollar i go with my wife and she says, where's the dollar stuff i say, it's at the checkout, the fat smarties, which i had to price check. really an amazing thing. a.j. saw me, not a.j. who caught a touchdown. but a.j., my checker i said, is there anything here for a dollar they don't sell stuff for a dollar and by the way, they're not cheaper. there was a fantastic piece this weekend about mouse print in "the new york times" about how everybody's shrinking. at dollar gen, i swear, everything has shrunk. i think they shrink the raisins in raisin bran >> we're going to get dollar general earnings on thursday >> it's going to be great.
the street loves them. >> ulta, too, which is removed from the focus list at jpm today. >> incorrect >> really? >> yeah. this is a -- you know, this is one of the -- i have to tell you. if you told me last year that the mall could make this comeback, it's rather extraordinary. i mean, how about the idea that nordstrom was not terrible they probably have a meeting, the annual meeting starts like this you know, we're not as bad as we thought. okay and then they just miss the meeting because there's nothing to say because they are brick and mortar personified >> how about walmart overtaking amazon in search for black friday bargains. >> we're all beginning to question amazon's acuity here, and we come back to that incredible bezos, you know, if you're jay powell, you want the most powerful retail person of our era, jeff bezos, to say, batten down the hatches. i'd like to speak to him on that why don't you just say, hey, we're having a recession, and
you know, other than me, one of the richest people and soon i will pass, no doubt about it, musk, as he's funding this ridiculous buyout, but i don't want to hear the richest man -- one of the richest people in america tell us to batten down the hatches. i don't think he feels it. i don't think he feels like 317 million other americans who are sitting there and saying, you know, i don't own as much amazon as he does >> you think it was bad advice >> yes, it was bad advice. it was bad advice because wages have not come down, except for you're going to see silicon valley compare deere versus enterprise software there's like a hundred more enterprise softwares that are trying to get through the queue, also a lot of a.i. neural networks, that will not be what you should do in that regime >> we are going to get a ton of software earnings, okta, crm later in the week. snow >> i got make-up
>> we'll get cramer's "mad dash" and count down to the opening bell take one more look at futures before we get that bell in about nine minutes as "squawk on the stetcoins.re" ntue get refunds.com powered by innovation refunds can help your business get a payroll tax refund, even if you got ppp and it only takes eight minutes to qualify. i went on their website, uploaded everything, and i was blown away by what they could do. getrefunds.com has helped businesses get over a billion dollars and we can help your business too. qualify your business for a big refund in eight minutes. go to getrefunds.com to get started. powered by innovation refunds. what if we wanted to electrify all of this... 100% carbon free... is it possible? ♪♪ aes has been leading energy transitions for decades... and is partnering with the worlds leading companies to decarbonize industries... cities, and nations. even the internet. is it possible? can we reliably power the things we love
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dash" as we count down to the opening bell >> i did not expect three positive comments about activision blizzard. you could say, that deal could break down, and the ftc finally issued a very threatening message. why do they like it? lot of cash, lot of optionality, company's doing better because it's not as levered to mobile, which is the weakness, because of in-game ads so i think it's shocking this deal was done i mean, these companies had even thought about the way to split up and get out a certain part of gaming, have bobby do something away from microsoft. no so it comes apart and people like it. wall street still believes very heavily in gaming. they just won't go away from it because there's positive comments about ea. take two, people feel they did that last buy, they're questioning. again, because they don't want to -- people sitting around in a
batten down the hatches era, thank you, again, bezos, don't want to do intragame buys and i think that's weird but activision blizzard is a buy. >> i think we talked about, it was upgraded by baird and mjm in the last couple weeks. why does the sell side have an opinion on a stock with a pending deal >> i think people are waking up to the ftc, waking up to antitrust here, where they don't let book publishers merge. there's nothing about this deal that threatens the ability of game writers to still get -- this is a supplier to a producer that is historically not antitrust violations >> so, you think sony doesn't have a leg to stand on and their complaints about "call of duty"? >> no. but i think our ftc is determined to make it so you and i couldn't merge on a weekend.
i mean, honestly, the ftc is anti-merger to the point where i honestly can't come up with a deal that they would approve i don't know of one. >> certainly a lot of big mega cap tech companies would agree with you >> that's done we need so many mergers, and we're not getting them >> let's get the opening bell here cnbc realtime exchange at the big board, it's qraft technologies at the nasdaq, cerence, developer of a.i. technology for autos. a.i. is everywhere this morning, jim. >> i mean, a.i., we should talk about what really a.i. is. the new a.i. is neural network it's the ability to piece together certain -- even words to be able to create which one it's the ability to create an image that is not computer generated. that's really important. computer generated does not look like the real thing. the stuff that they're doing now not only looks like the real thing but can invent itself and
learn things it's true terminator if used in the wrong hands. one of the reasons our country has been adamant to not give the chinese the latest and greatest nvidia chips if you want to play this, people can very easily say, it's nvidia, because the platform is nvidia, to write things. the problem with nvidia, obviously, is it's had a big run, and it did not have a good quarter. >> and are you confident that the channel clears in the coming 12 months? >> i think the channel does not clear until literally the beginning of january nobody's really optimistic out there that i speak to. i'm not going to be more optimistic than the people who make this stuff up the guys who create it see the channel. lisa su sees the channel jensen huang sees the channel. it's thick with product. if you want to see weakness, that's your list i mean, again, hewlett packard,
hp, they were the ones -- well, qualcomm is inexpensive but you can't be in semiconductors yet it's too early >> the best you can say is that hp and amd had similar views on the recovery of pcs. >> when you're down 18%, 19%, that means there is a lot of inventory stock. and it's hard to get through, because there's no natural buyer. here's what i think they got wrong. i think a lot of people felt that that new office at home would be -- it would be wayfare and williams sonoma. it would be a second-rate pc and then an upgrade. totally untrue williams sonoma, still one more piece this morning saying the edifice is cracking, whatever the heck that means. there's no doubt that the whole concept that the home office is going to be better than it was last year, it was a false thesis >> interesting also, regarding work from home,
"times" piece over the weekend about business travel, meaning we are sort of returning to travel, corporate, but the cost-cutting element now going into year-end is making it very hard to read for airlines and hotels >> well, office reads sure demonstrate that we're in a three-day situation. when you speak to the airlines, they're very quick to say, there's more travel than ever because they do have these meetings where you see each other in order to be able to have reunions that people used to sit next to each other. i still believe that people aren't coming back they're going to be three days in, two days out it's not a mutiny, because the top guys like it too >> they've learned to love it. >> look, the zoom numbers, as pathetic as they were, and how much people hated the stock, the zoom numbers did demonstrate that there's been no let-up in the number of people who are doing that kind of interaction williams sonoma down five. this is, again, i mean, this whole notion of, wow, i'm home, and i really got to fix it up.
no, i'm home hewlett packard, bad pc. people tend to like apple. y i don't know they got the office at home. they're thrilled i do have some sub-rosen information that there's more gaming being done on fridays i got this great deal of reporting to be able to get that there is, like, a -- there is a secret report about how much gaming is done on fridays. but otherwise, three days a week, except for you and me. >> we're five. >> david went with the three >> this week he's with the four. wynn is leading, but macao is going to get fresh licenses. >> my travel trust owns wynn and i consider this a windfall because they got the licenses and there's the sum of the parts piece. there's a belief, obviously,
that tillman frit is going to buy the whole thing. my travel trust, we just wish that were the case that would be wishful thinking and should not be part of your investing equation that was just a windfall by the way, draft kings is slammed again. >> downgraded today over at jpm to underweight and penn to neutral. >> isn't that amazing? given the fact there is so much wagering there is just a sense that they're stalled. that they got ahead of themselves i don't know i don't want to say draft kings is a bargain i say that if i were the new disney, i would be looking for a serious partner right now in gaming i mean, the new disney, we haven't talked about >> iger town hall today. >> the most recent release, viewed as not that -- another chapek mistake >> you mean in terms of the box office weekend "strange world" did not do well but they got """wakanda." >> it's time to look at the
employment, time to re-emphasize theme parks, turn off cnbc >> meaning >> meaning i got cited in stupid articles that i had something to do with it, which is total nonsense my sources indicate idi i didn' even come up >> i think "the times" mentioned that you called for chapek's head >> no kidding. he had a software enterprise heavyweight discount firing quarter. i mean, you know, what was supposed to happen here's a man -- chapek's last conference call, besides being much ado about nothing, was without a doubt a conference call that was as phantasmagorical as some of the best rides you would have thought they just shot the lights out. >> grab small children by the
hand as you listen to the conference call. >> here's five things that went unbelievably well. never mentions the theme parks i shouldn't say, never, because that's extreme, but i think that conference call was the crystallization that he had to go >> on friday, though, a lot of sell-side calls saying we're not chasing this because the issues are bigger than iger himself >> that's false. i mean, that's another false dichotomy. they say this -- iger's got a game plan. iger's good. >> you've been critical of the fox asset purchase, strategically. >> yes they did pay too much. there isn't anyone who tried -- by the way, i don't -- it's not clear -- you can't take the charge, it's so intertwined. some people, large shareholders, think the charge could have been in the 30, 40, even $50 billion. i say, move on i say that iger's going to be able to bring back talent. talent likes him talent did not like chapek i never thought the talent meant as much. i always figured the talent comes less expensively, you
know -- >> the scarlet dispute was a difficult way to begin >> one of the most loved people at the light, and i think to get past this chapek here will be hard initially, but i have total faith in iger. iger, by the way, was -- when he left, a lot of the fox talent left, and i think that therefore, the reason why he might bridle about my analysis is it didn't have to be this way if chapek didn't come in and emphasize -- >> that makes sense. >> what did he emphasize i'm looking at the crew. maybe the crew knows i don't know you guys know. maybe some guys on the floor the chapek era is a heavy asterisk >> nasty, brutish, and short >> they got him off the catch and he got burnt we still don't know where chapek came from, other than the couch. >> as for the overall box office, jim, $95 million for the
weekend overall. in 2019, we only had four weekends below $100 million. >> people want to do stuff >> people are saying, you got to get "avatar" in theaters asap. >> i know. we haven't heard from adam aron yet this morning let me check he usually comes back before i even -- haven't heard from adam aron yet but i totally think that it is a moment that if you abandon iger, you're nuts. if you don't think he can fix the problem, i mean, the guy is a very smart guy sell the stock all you want. i think you're making a major mistake. iger is driven by success, and by getting the right people, and he will get the right people and slim things down where he has to he's a winner, not a loser, and i back him anywhere. >> let's get you on oil really quick, jim we mentioned the price action on wti. the other issue people are talking about is how the xle and crude itself are so different for the year >> yeah, i mean, we're going to
hear mike wirth on friday. he's coming on "squawk box." and he's going to tell you, it's -- he can't say halcyon times, because then you'll get the windfall tax stuff i almost said something -- under jimmy carter, it didn't really work, but it did take in a lot of money you're seeing good demand. we're not seeing what's really happening in europe, but everyone's traveling maybe oil overshot to the upside mostly because there was a lot of guys, when it went to 120, 130, on wall street, saying 150. and we hear from these people and they maintain some credibility, which is shocking in itself, but i think the charge -- the chartists -- and remember, these are commodities , are saying high 60s and then bou bounce >> do you think the white house has a chance to fill the spr >> will they be nimble enough? the president once told me, gracefully, that he was totally
unaware of stocks just because he didn't own any. i don't know i suddenly think he can trade the futures? highly unlikely. >> it's remarkable, though for the month, oil is down about 15 that's the worst month of the year as well >> somewhat down -- we got a downgrade of f.a.n.g., which is not the f.a.n.g. that has been faltering all year, but diamondback. this is from bank of america hold to sell and i would take the other side of that trade in a nanosecond. diamondback is a fantastic operator >> how about helping viewers set the table for snow, crm, okta? >> they haven't come down enough i think they have to slim down i think okta, if you take a look at the last -- if you look at what they said at palo alto, they're coming on strong on identity, which is okta's area that would be a soup to nuts they can cut out okta. i think okta is very worrisome i love frank he does not care about a stock
i don't think he looks at a stock. not at all salesforce might have to bite the bullet here. i think that their table of employment is too high, or at least they have to do -- my travel trust has owned salesforce since the beginning, and i'm concerned. i'm concerned because this is coming off of the dreamforce quarter, and i don't know what marc benioff can do. we're not -- we've made our sales. we're not selling anymore. i think that the company is doing -- is one of the few winners in the space, along with service now, but the multiples are too high there's no longer big multiples to revenues, and we did hear talk of cooper getting the bid, which is a little fanciful, but anything is possible but salesforce is a tough one. >> second worst dow stock of the year behind intel. >> is that amazing >> it is amazing what about all the upgrades we've got of service now >> there's no doubt -- i mean, it is painful how great that quarter was and how little
recognition that mcdermott got off of it. the federal contracts alone were extraordinary. the guy does have the great rolodex, but it's expensive, but it had the best quarter of enterprise software by far and it's not getting respect versus, say, adobe, which did not have a great quarter, made an expensive acquisition this is a group that has been beaten up. someone could light a fire you still have to buy service now because that's the one that we know had a great quarter. there's adobe being up on, i guess, on cyber monday or whatever >> i was going to say, adobe's one to watch you know what? shopify is up 8% >> shopify does a lot of the smaller retailers, which i keep hearing -- this is the ones that are the etsy-like -- i hear are doing a ton of business as people realize that they kind of learned etsy during the lockdown, and if you learned etsy, you learned shopify. so, shopify is kind of the
anti-amazon here >> yeah, 42 would be the 200-day. >> i like that >> which it has not seen since january. >> i like shopify here on a play on the fact that the independent -- the independent retailers,i think, are having a very good holiday. >> powell will be the other big event of the week. he speaks at brookings there's some discussion about whether or not he cements the view that slower hikes are to come does he push back on the notion that we've solved the inflation puzzle >> why do anything ahead of that employment number? why not obfuscate? why stick your neck out? i really think this is a time to be able to say, you know what? we're going to be data dependent. we want to see these numbers let's say you really start seeing -- look, there's not been that many layoffs. lot of hiring freezes. but if you get a softer number and you're hardline, people are really going to say, recession so, it doesn't pay it pays to obfuscate almost do a greenspan. >> he'll have a jolt in his
pocket but not nonfarm >> you're too close to that number to be able to say, look, i'm really -- i think that the economy's weak or the economy's strong why stick your neck out and hurt your credibility >> we'll get to this on wednesday. overall, holding 4,000 here on the s&p. let's get to bob pisani. >> good morning, guys. happy monday two to one, declining to advancing stocks and you can see the impact these china protests are having on our market again, i look at what's risk on, risk off today and it's generally risk off and you have to point the finger mostly to the china protests energy, oil's at the lowest level in almost a year, since december of last year. metals and mining, another classic global risk on, risk off, that's down notably here's the curious story of the day. china shares -- china's stocks generally are flat to slightly on the upside. there's the big one. kraneshares trading to the upside i want to note what's going on in the energy stocks because carl made a very good point about this disconnect that's
been going on between oil, which is now below $75, almost a 52-week low, and energy stocks, which have been holding up very well, and it's call on diamondback energy today from bank of america, i think, is the -- goes to the heart of the question they downgraded this stock because of what they call the disconnect between the future earnings possibilities and the current prices, and they said, specifically, the price targets have moved higher here, but they don't understand why, given the declining oil, so they called this a disconnect, a valuation disconnect here, and i think that goes to the story of what carl was mentioning a little earlier. there's apa. most of these stocks are 10 to 15% off their 52-week highs with oil near a 52-week low, so there's that disconnect that bank of america was talking about on that downgrade. at for the china protests, it is curious to me that we have hang seng down and yet the two biggest etfs for china, which is
the mchi and the kraneshares, china internet, trading to the upside there's a lot of debate about what's going on here, over here -- over the weekend in the united states. so, there's two schools of thought here the first school, which is somewhat more bearish, is that the targeted lockdowns are going to continue in china, and this is going to continued to cause problems but there's another school out there saying, these protests are so big now that the government's going to have to respond, have to ease the lockdowns, dramatically increase vaccination levels and all this ultimately will be a good thing. who knows where this is going to go the important thing is, if you look at china stocks today, and i know pinduoduo had terrific numbers. that's a big winner on earnings, but everything else, jd.com, alibaba, they're all trading to the upside we're going to talk about this this afternoon brendan ahern runs the second
biggest etf out there that deals with china shares. he's been outspoken about this, that the government is going to have to ease their lockdowns eventually, and has a lot to say about these protests over the weekend in china that will be 12:30 p.m. eastern time carl, back to you. >> bob, thank you. great to have you back bob pisani quick reminder, you can get in on the cnbc investing club with jim. sign up and find out more at cnbc.com or point your phone at the qr code on the screen and it takes you right there. as we go to break, let's check bonds. we mentioned the events coming up in the coming days, powell and jolt and jobs friday ten-year, 3.68% is going to take you back to the early part of october as that inversion between twos and tens, 80 basis points, 40-year high back in a moment
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let's get to jim and "stop trading". >> starting with the best ideas from 2023 from wall street this is clive, who sunday believable he's saying you got to buy raytheon i like this call defense pickup you get much better airline. could be some very good numbers from aerospace talking about high targets that i think will be realized this is one you want to buy, particularly if you think, by the way, that the u.s. is going to step up with defense. they've got the patriot. the patriot would change the equation i think very much, very much our government is reluctant to give ukraine the anti-missiles. but i think that gray hayes will be persuasive and i do think you
want to own raytheon they strong call. >> a lot of reporting over the weekend about weaponry getting lost in the shuffle, on both sides. >> ukraine is shy of weapons they're using about a fraction of what the north vietnamese used against us in seven days of caisson, which incredible. i think it's incredible the u.s. government has not stepped up. people say, are you kidding me after reading that article, it's clear russia will win the missile war unless we help i mean it. this is a democracy. i think you can say -- tonight i'm going to name the best stock of the quarter. >> best stock of the quarter. >> hands down. >> not a chart necessarily. >> no. it's earnings, hands down the best once again, eunice, please stay safe that regime -- they play in a different -- a different way >> yeah. >> bbc have put out a statement about their reporter who was
pushed around a bit. >> she's just a hero tremendous hero. >> we're grateful to her jim, "mad money," 8:00 p.m. time. a lot more on the unrest in china regarding zero covid as ve're holding onto some decent lels here. s&p, 4,001 100% carbon free... is it possible? ♪♪ aes has been leading energy transitions for decades... and is partnering with the worlds leading companies to decarbonize industries... cities, and nations. even the internet. is it possible? can we reliably power the things we love and green the planet at the same time? yes... aes.
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good monday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan, david faber has the morning off. busy week headed our way with powell at brookings and eco-data, software earnings, retail data and watching the china protests as well at the time, dow down 150. 30 minutes into the trading session, three big movers. apple under pressure saying they could see a showfall of 6 million iphone you can see shares are down 1.5% news out of china not pressuring every sector the macau casino operators
rallying after the chinese government gave them provisional licenses to continue operating wynn and los angeles sands are trading lower but melco is up 8% b biogen down after a woman in the alzheimer's test died. you can see shares are down 2%. let's begin with the latest from china protests erupting over the covid lockdowns eunice yoon is on the ground in beijing with more. good morning again, eunice. >> reporter: hi, carl. some good news out of the city that sparked the protest the far western city said it's resuming more public transport as well as delivery services as of tuesday as local officials look to accommodate at least somewhat more of the pushback
from the public. the weekend protests were arguably the biggest show of resistance to the chinese communist party since the 1989 crackdown in tianamen square they were sparked by a fire in urumqi due in part to covid controls much of the public ire is directed at the zero covid policy however, there is evidence there are wider grievances many people have been showing blank white sheets of paper, holding them up to indicate their protest against censorship also in shanghai, some people were calling for the resignation of xi jinping. beijing has been indicating it is going to continue to stick with its zero covid policy, though it will be mitigating some of the more excessive curbs. the state media have described
this policy as science-based and effective. and it also warned local officials against imposing some of what they have described as layers or some of the more a egregious measures for the most part, beijing is -- the success of this more precise from beijing's perspective approach will depend on whether or not covid plays along so, if the covid cases stay relatively manageable from beijing's perspective, beijing will likely muddle through with this approach. however, if the covid cases skyrocket, beijing could be faced with from its perspective two very undesirable scenarios one would be to potentially lock down beijing to get the cases near zero and also to send a message across the country that protests will not be tolerated the other option is they could see the cases go out of control and then they could be facing a
public health crisis guys >> eunice, i'm glad you brought that up. there was a lot of reporting last week about icu capacity in china, critical care beds per 100,000 people is lower than it is in kazakhstan and lower in mongolia, lower than iran. is the fear that hospitals could really be overrun? >> reporter: absolutely. that's a huge fear and one of the big complaints that a lot of medical experts have said that beijing should have been focused on for the past several years, since the early days of the pandemic not a whole lot has changed. beijing has not only here in beijing but also a lot of other cities have been ramping up government isolation facilities to try to accommodate some of that concern however, the fact that the medical research is still severely lacking and the fact that the population hasn't been vaccinated to a level that would allow for more protection just
means that the decision for the communist party is going to be that much more challenging >> eunice, our thanks again helping our viewers understand what's happening in general, but certainly over the weekend eunice yoon in beijing let's bring in jeff moon it's great to see you again. thanks for the help today. >> thank you >> how does xi work his way out of this one? >> i think he's really painted himself into a corner. i think eunice described the situation very well. on the one hand, the chinese government wants to control everything and flush out the zero covid policy. on the other hand, the people have just -- they're just fed up they've had enough with all of this so, i think that what the government is going to try to do, first of all, they've doubled down on the policy saying in people's daily editorial today that facts have
proven this has stood practices. if you look at playbook, i would look at hong kong in 2019. the government will crack down on dissent generally, as we're seeing on the screen, it will prosecute any prominent protesters or anyone who purports to have some kind of nationwide influence it will continue to claim zero covid is successful while making minor adjustments. and then it will try to change the subject in the official press by shifting blame to local officials and, perhaps, even to foreigners >> to, if you're an american company or just an international company doing business in china right now, how would you be advising those executives given this situation, given the fact we're having the situation manifest in the midst of this zero covid policy that's been playing out for years already? what would you tell them >> well, there have been hopes that after the government announced some relaxations on
november 11th, there would be prompt reopenings. i would covid will disrupt business operations significantly throughout the next year and, perhaps, beyond i think foreign firms are best advised to maintain a low profile, to avoid any possible scapegoating there are two kinds of firms in china. those that are producing in china for china and they just need to tough it out other firms that are producing in china for export purposes will, i think, continue to quietly diversify their supply chains that's especially difficult for companies that have complex supply chains. think semiconductors or cell phones that diversification is happening because resilience is much more important than before. >> yeah. from the investor standpoint, for the better part of this month, investors have been piling into china-facing stocks or even names that have a lot of
china exposure with the expectation that because we got that plan from the government earlier this month that we could potentially see more -- a more significant reopening. you know, speaking to sgh macro, macro advisers earlier today, and what he noted is it's probably not going to be this sort of on/off mass reopening switch for the markets that the markets keep fantasizing about either in terms of policy or in the way the economy responds how do you see it? if we do get to a point, and i realize it's opposite of what we're talking about today, but we get to a point where a reopening actually happens, what does that look like in china >> i think we're going to yo yo between the first and second scenarios you described in the previous report where they're going to try to hold the line and then flexibly react as problems develop it's not clear whether that's really possible. if china really wanted to solve this problem, it could have done it a long time ago by bringing
in mrna technologies and allowing people to be effectively vaccinated if that's what china wanted to do, it could resolve the problem. as i think about the logistics of even doing that right now, if you had a billion doses and could vaccinate 1 billion people, it will take well into next year for all of this to become effective so, i think xi jinping is really on a tight rope between zero covid policy he set and the expectations of the people in china. >> some of the pieces written over the weekend made the point, jeff, that in the early days of the pandemic, it did seem like authoritarian governments were going to have a leg up because they could build a hospital in six days, they could force people to wear masks where there were reservations around the rest of the world. as one editorial writer said, pandemics are a marathon, not a sprint i wonder what you make of that term >> i think that's probably true. i think that the problem here is
not just getting the central government to change or adjust a specific policy, but it's about changing a governing philosophy. historically china's governing approach was to forbid all risky activity except for what was officially permitted the chinese communist applies that, hence the great firewall, and applying that to covid the issue here is not just tweaking that specific policy, but also adjusting that attitude on the extent to which the government wants to control the population >> jeff, we'll see how far they get on that front, if anywhere appreciate the guidance today. please come back. >> thank you will do. >> as we head to break, here's our road map, including a deeper look at the energy sector. wti crude is negative on the year. >> black friday online spending hits a new record. we'll go live to a best buy fulfillment center and a lot more on the protests in china
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worries. in other news, the u.s. giving chevron the go ahead to pump oil in venezuela again that stock is also still lower today. down about 2%, as is exxonmobil, down closer to 3% today. worth noting as far as the venezuela news, carl, is the fact it will probably take quite a bit of time to get that infrastructure up and running for chevron to be able to actually restart output in venezuela. we're coming into a gang busters next week for crude between opec meeting, spr release and these eu sanctions on russian oil going into effect, too. >> and mike wurth on "squawk" on friday, this coming friday we'll talk about what that means for the nation's second biggest energy company six-month licenses, restrictions on cash payments will also sort of make it difficult to get that energy out of the market certainly directionally positive we'll see if the white house starts to refill spr, which they
had said 70 was their bid. >> going to be a key question. it will make for a volatile oil market basically everyone you speak to who speaks on this market is saying we'll see how it plays out. >> pretty remarkable turn. after the break, online black friday sales hit a new record we'll go live to a best buy fulfillment center in a moment don't go anywhere. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.
despite online black friday sales setting a new record, consumer spending habits are rapidly changing our frank holland is live at a best buy fulfillment center in new jersey with more data. >> reporter: good morning to you, carl. cyber monday apparently getting off to a strong start today. adobe actually issuing a slight increase to its forecast of $11 billion in sales today just a short time ago we're at a best buy fulfillment center in new jersey behind me you can see a steady stream of packages coming off the belts. a lot of picking and packing going on downstairs. also we're getting new data about consumer spending over the black friday weekend
for the entire weekend, that's friday to sunday, consumers spent about $113 per online order. that's actually an increase, a double digit increase from black friday alone perhaps showing a strengthening consumer however, that stronger online buying, that doesn't necessarily translate into better stock performance for investors of e-commerce focused companies you see the stats. over the last five years, the xrt etf, traditional retail, has outperformed the ibuy etf. that etf has underperformed compared to the traditional etf. that trend still continuing. we're getting new data on the most searched companies on cyber monday amazon tops the list, walmart, home depot and target are also on that list a short time ago we spoke to amazon's head of delivery operations he said spending is strongly focused on electronics this holiday season >> we're selling a lot of playstations, a lot of video games, a lot of headphones, ear
buds so, it does feel a little more electronic focused but i think we're still going to have a huge toy day, a huge home and kitchen day. >> reporter: and a lot of that discretionary spending also extending to other items like jewelry, toys and sporting goods. big jumps over the holiday season of last year. another data point that might be interesting and may even point to inflationary-weary consumer, buy now, pay liter has jumped. however, the amount of those orders has declined. while the usage has increased. carl, back over to you >> i'll pick it up, frank. that is an interesting datapoint, one we'll bring up with our next guest. given the fact you do cover freight and the transportation stocks, everything you laid out in terms of cyber monday and the holiday shopping period so far, what does it mean for fedex and u.p.s. and some of the other transport names, which we know have come into this peak
shipping season, perhaps, a little more cautious and, in some cases, perhaps with lowered guidance with the expectation that maybe it's not going to be as crazy as we've seen in years past >> reporter: what we're seeing so far, adobe increasing the forecast of spending, is exactly what a company like u.p.s. or fedex wants to hear. in previous years they generated a lot of revenue and profit from retail surcharges. that's people like you and i shopping at big name retailers, increasing their volume over pre-holiday levels u.p.s. and fedex can charge them surcharges to ship out all the boxes from apple, best buy or ta target the more people spend at big box stores, better for u.p.s. and fedex in general. more on the state of spending as we head into this holiday season, let's bring in jeff sloan, head of global payments great to have you on the show. >> thanks for having me, morgan. it's great to be here. >> what are you seeing so far for this holiday shopping period
in terms of consumer behavior and where they're putting their money to work? >> well, we certainly have had a record-breaking year by many measures, including specifically, to answer your question on black friday, and obviously that can change. it's really not changed to date. compared to last year on black friday, transaction volumes for us increased 11% year over year which is indicative of a broadly healthy consumer in fact, we set any number of record for transactions this past black friday. it also say we exceeded our peak transactions processed per second year over year on black friday about i a third the consumer is broadly healthy, i think in line with what you just heard from frank. >> it's interesting. last year we saw a pull forward by consumers in terms of shopping for the holiday period, in part, because there were concerns they wouldn't be able to get packages and shipments on time given the supply chain issues we've seen the pull forward in terms of marketing and discounts and promotions from retailers again this year.
but not necessarily the same response from consumers. is the expectation that we're getting back to a pre-pandemic normal in terms of holiday shopping patterns, or is there genuine concern that maybe folks won't buy as much this year because of inflation >> i think you said it exactly right. we're where we were before the pandemic at the end of the day, which is a terrific place to be. it's the first normalized shopping season in three years i would say we've seen a couple trends you're seeing play out in the marketplace today. first, consumers are not making a distinction between the online and the offline worlds consumers want to order on their phone, they want to order from their tablets, they want to go to physical stores one of the trends we've seen is a snap back from the pandemic in physical shopping. we saw 11% year over year across all our platforms, but it's essentially the same number, whether it's a physical
environment or a virtual environment. so, consumers are no longer making a distinction between the virtual and physical worlds. the second thing important to note is e-commerce is a percentage of retail sales has snapped back to the trend line where it's been prior to the pandemic i think we all expected in 2020 for e-com to outperform, as frank alluded to in his segment. it's actually back to the trend line and consumers no longer see a distinction between the two modes of purchasing. >> on friday we were talking about retail and terry lundgren said there's money to spend but it's dwindling on the consumer's behalf, dwindling fast i wonder how you think that squeeze is going to get reflected after we're done with holiday spend. what do you think the first half of next year looks like if that excess saving is drawing down? >> there are warning signs abound, and that's been true for a number of months for '22 heading into '23
what i would tell you is we don't see that today instead, we see continued robust spending we set a number of records across our platforms really globally specifically in north america. the u.s. is 70% of our company in north america and in continental europe in particular we certainly see in some markets, to go back to what you were alluding, to united kingdom, flattish growth we're not seeing that in the united states. while things would have to change, they would have to change adversely from today to make things worse. >> what are you seeing in china right now? >> china is out 3% of our company. it's really hard to say because that 3% has been up and down over the last three years. not just because of the pandemic, but you may remember, morgan, in 2018 and 2019 they actually had the riots in hong kong and china open and shut those markets. 3% of the company hasn't had a significant impact on our buy-ins.
that 11% year over year growth on black friday actually incorporates the impact of a china. it's not something we're particularly concerned about today. >> jeff sloan, ceo of global payments thank you for joining us today >> last few moments we got news that block fi has filed for voluntary chapter 11 protection. $250 million in cash on hand they say will be sufficient to support the ongoing operations during the restructuring they mention fdx specifically due to the recent collapse and their ensuing bankruptcy the company expects recoveries from ftx will be delayed and platform activity continues to be paused at this time not a complete surprise. there's been a lot of discussion about the fallout from ftx regarding other exchanges and obviously the currencies themselves in terms of price action. >> absolutely. and i suspect this probably won't be the last piece of news,
getting back to the protests in china over the zero covid policy and how the chinese government may respond will they truly loosen restrictions if so, how long would that process take first, what you saw over the weekend and what you thought about that. >> it was extraordinary. you cannot overstate the degree of personal risk that all of these individuals are taking this is a surveillance state, a police state and the fact they have been pushed so far they are willing to risk so much is really, really telling what i thought was super interesting was, you know, the
trigger most recently is what happened in urumqi this building where ten people died, nine injured because of this fire. the reports are that the people couldn't get out because of covid lockdowns. that the doors were actually chained shut or barricaded the chinese government denies that however, it's clear from the reaction from the people you see on the ground that they think actually that was quite possible if not probable. even if it's not true, their lived experience is, wow, this is really become dangerous and unfair. >> how can xi -- can he make someone else the fall guy in this process how is that going to work? >> i think he likely will. he's in a real pickle because he has economic paralysis, he's got a population woefully unprepared for opening up, and now civil unrest as well and i think oil is a real tell here even if they open up, when you have a population that isn't as
highly vaccinated as it could be by now, are you going to start to have issues like we saw in march and april and june of 2020 all the pork plants had to shut down because everybody in there was getting sick you say, maybe he'll be forced to open as a result of this, but when you have so many people who can get sick and overwhelm the health care system because they haven't prepared it, i think that's why you see oil doing what it's doing at this point. he's damned if he does and damned if he doesn't >> there's a lot talk about the vaccines and the fact that china has imported vaccines. how typical is that of chinese policy, in general, the fact you haven't seen this? >> look, i don't understand that decision and what is happening there. but clearly it's been offered to him. the german chancellor, when he went, you know, that was very controversial trip, but i thought one of the positives out of that trip is he got the chinese government to agree that
at least the expats living there would be able to take the mrna version of the viruses -- of the vaccines so, you know, are they going to be pushed to that? i don't know i think a previous guest had a very good point that will probably be some kind of crackdown. we're already seeing a little bit of that with the tanks rolling or the police cars rolling in last night. also some pullback you saw in urumqi they loosened some issues and at the same time blaming other people for what's happening. >> so, do you think the dream of taiwan reunification gets pushed back because he's got so much on his plate, or does he turn to that to get nationalist fervor going in his favor >> that's the major, million dollar, trillion dollar national security question. does he use the wag the dog approach to try to deal with this i can't get in his head. there's debates about whether they're militarily prepared. we saw a little bit when nancy pelosi went. they did the -- basically the
version of an embargo. there are scales of what they could do >> certainly there have been these discussions within military national security circle here that the timeline has accelerated to see some sort of invasion, although, to your point, there are many question marks about whether that's a matter of accelerated to a couple years out or accelerated to a couple months out >> xi jinping is on the record that he wants to do it before 2049 that's a long ways away. hawks will say, no, he's ready to do it within a couple of years. but i have to tell you, other china watchers say, it's absurd to talk about them invading taiwan it would be deadly people who are ardent believers that he just won't do it, that if it happens, it will be -- >> the longer-term issue may be the companies that have fed his economy the most, take apple and foxconn, are looking for alternatives it's not like they're drawing
capital in >> you know, we talk so much about decoupling and whether the u.s. foreign policy, you know, started under the last administration continues under this, whether we should push decoupling it's already happening companies are making those choices on their own because of the uncertainty of policy, the supply chain disruptions apple's in a pickle. it's a huge supply chain you've been to vietnam they don't have the capacity, the volume so, what do you do india doesn't have the technological know-how so, figuring that out is going to be a huge dilemma. >> you take that, you take zero covid, the questionmarks aroun reopening next year, and you take what's going on with the real estate sector is china in a much worse position economically speaking than what is being discussed and investors are anticipating >> i think so, yes the property sector and they're on again/off again support is so
emblematic about how they never take the long term, as they always claim they do put the accelerator on the -- foot on the accelerator and lift it it's so incoherent the bigger issue is that they have never actually managed to shift their dramatic growth over the last 30 years away from investment and towards consumption. it's always been based on the property sector, infrastructure, et cetera. and there's growing calls, just spend 1% of the economy on the consumption area of the economy and you would actually have a much healthier growth there. and they haven't done that so, there are many people who believe they're never going to grow more than 2% ever again the high-quality growth is negative now and for the foreseeable future. >> it's amazing when we used to think 6 was a decent target all the time >> and possible. >> and that wave of globalization, for sure. >> yeah, yeah. i mean, i think back to covering
china for so long. the last time we saw protests like this were '89 those protests went on for much longer they went on for weeks and involved millions of people. the dominant technology at the time was the fax machine, the m.i.t. student newspaper had a fax machine, because they were one of the most advanced technological places that's how we were getting information out of the chinese students who were protesting back then. now the technology has changed so dramatically that they don't necessarily have to do a physical crackdown they can do a digital crackdown and make it so people can't move around >> yeah. thanks for that. good tossing the ball around china. what a story by the way, we want to note, you'll be joining cnbc's virtual financial adviser summit december 6th you can register on cnbc.com don't miss it. thanks. an hour into trading the dow is lower for the first time in four days. down 171 points. the s&p and nasdaq are down for a second straight day.
the s&p back below 4,000, 3998 right now. joining us, stiefel chief equity strategist barry bannister great to have you back on. i want to get your take on the levels we're seeing here and the facts we're in the midst of this bear market rally. not only near term, what do you think -- where do you think this positions us to finish out the year but how does this set you up looking to 2023 >> we had been calling for a rally from the mid to upper 3,000s on the s&p 500 to about 4,300 by april 30th of 2023. the end of -- roughly the end of seasonal strength as well. but consider this. the s&p 500 in real terms, inflation-adjusted, fell 32% from december 28th of '21 to the intraday low october 13th on that bad cpi print
that's the average of all 13 bear markets associated with recession since world war ii so, those who are turning bearish, still very bearish, it's a little late in that game. we already discounted quite a bit of bad news. and right now we're just pausing, i think, at this 200-day moving average in real and nominal terms for the s&p. and also the dollar is having some difficulty going through its 200-day. >> i want to bring in rockefeller global analyst jimmy chang to this conversation the relationship between treasuries and equities seems to be a different narrative emerging from both of these markets. how do you see it? >> yeah, i think two very different stories. equity market seems to be saying that as soon as we get the pivot, it will be followed by a soft landing, happy days are here again we look at the treasury markets, we have the most inverted yield
curve, the most inverted since 1982 three-month ten-year inversion is now 60 basis points so the treasury market is screaming recession is coming. i do side with the fixed income market if you look at indicators from the rapidly falling new orders, indices with various surveys to the decline in housing markets. i think we're set up for a 2023 recession. >> barry, that raises the really interesting question about at what point does the market pass the baton from rates being the most important dynamic to an earning shock or maybe later in the year, credit shock >> credit would be a factor in recession. we have not seen that yet. in fact, spreads have been pretty well behaved. as far as a timing recession goes, the 2s to 10s since 1977
led recessions by an average of 15 months, the standard deviation of five months it inverted on april 1st we look at a 50-day moving average on the three-month to 10 that takes out by smoothing all of the false signals for 55 years. there have been eight recessions that lead time is nine months. it will not invert on that basis until the beginning of december. so we're looking at a recession some time in the summer of 2023. as to whether it's mild, it depends on how deep it is on income production, sales, employment, fixed investment we have spotty weakness in all of those areas i would not call this a deep recession fear at this point again, as i said, the market's already fallen to its low in october of 32% in real terms that is the norm for a recession. >> we're going to leave the
conversation there gentlemen, thank you for joining us it's time now for a news update and seema mody has that for us hi, seema. >> morgan, here's the cnbc news update at this hour. for the first time in four decades the world's largest active volcano is erupting the eruption of hawaii's mauna loa started last night and causing ash and debris to fall on the big island. officials say lava flows are not threatening any communities. 2 million houston residents are under a boil water order for any water used to drink, cook or bathe. that after a power outage yesterday caused low pressure at a water purification plant the issue also forced some houston schools to close today the city continues to monitor the situation and will conduct more tests today. and another record low number of births this year in japan. that is alarming government officials. just under 600,000 japanese babies were born through the first nine months of the year.
that was 4.9% below last year's record low, even despite government's efforts to stimulate births through child care subsidies the birth rate has declined each year since 1973 with many japanese reluctant to marry and start families morgan and carl, back to you. >> seema, thanks very much. coming up after the break, online black friday sales do set a new record the ceo of clothing brand l ledbury is with us as we got some stability s&p still near 4k. we all have a purpose in life - a “why.” no matter your purpose, at pnc private bank we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why?
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welcome back to "squawk on the street." black friday online sales posting record numbers u.s. shoppers spent $9.12 billion online, according to adobe analytics. joining us, paul trible, ledbury ceo, and alissa repko. good morning to you both paul, i will start with you. you say you're fairly bullish on this holiday season. why?
>> we are. we're certainly bullish, particularly now going forward to the end of the year we felt some softness like a lot of brands did in october and november the real question is were people coming back and show up for black friday and cyber week? there were concerns last week about holiday shipping and scarcity you also saw colder weather last year did they come back yes, they did. particularly for us, it's been our best black friday week in four years i think you're seeing that in a bunch of retailers as well a big surge in dress shirts. it's a core business for us. that means people are going back to work, traveling for business, doing special events we love to see people dressing back up again. >> all right of course, it's almost like a play on the reopening, this idea of dress shirt sales so, i wonder if you think that that is a sign of resilience for your product right now or if it's pull forward in demand given we are coming off this reopening and a shift in how consumers are behaving >> i think there's been a lot of demand in the reopening, earlier
in the year and the summertime we saw that. we saw it slow up a little bit i think it's trickling out we haven't really seen a drop in demand from inflation concerns most of our customers are finance, law, media, they're going out, working again, traveling. so we're seeing people need basics, dress shirts, restocking their wardrobe with things they didn't have years ago. we're confident this will continue on. it might get shaky into the new year for now people are coming, buying they don't seem to be scared off by inflation, at least for our product. and we hope that will continue for the near future. >> melissa, your thoughts knowing the data from friday and some projections for today >> yes paul mentioned a good point that there is a lot of question about whether this will meenl for 2023 if the consumer is showing up strongly, there are some potential warning signs we should be paying attention to, too. people are looking for value, so it's not surprising that they're showing up for some of these biggest and best deals over the past weekend and coming into this next week they're also cutting their
savings rate that's been less than half what it was pre-pandemic. it's 3.1% as of september, the most recent data available from the fed. and people are also using their credit cards and using buy now, pay later, which is kind of the modern spin on layaway what does that mean later in the holiday season or going into january when people do have that credit card bill come to their mailbox and maybe think about cutting back >> we talked about it before, the name of the game this holiday season, is it really inventory management and who's positioned well in terms of that to draw those down and the translation to discounts or maybe not so deep discounts? >> yeah, it's two-fold it's not just clearing through excess inventory but it's about the retailers that didn't have inventory troubles to begin with macy's ceo talked about the fact they had lower levels of inventory and best buy was in the same boat, means they had some of the fresher merchandise they could put that more front and center they weren't dragged down by having what felt kind of stale
and stuff that people already bought during earlier phases of the pandemic >> paul, one last question on sort of men's categories not so much about, you know, consumer balance sheets but just the casualization of dress since the pandemic began what categories have not come back i wear a tie every day, but i see that you're not. ties, dress shoes, are they things we won't see back to 2019 levels >> i think it depends on swings. people probably have enough sweat pants and sweatshirts in the closet we're moving back to re-engage with the world categories for us, ties, i think, suits for nonevents have been slower. work suits but you might be picking up a wedding suit. your core basics is what people are getting back into. for us it's white and blue dress shirts, small checks, people engaging the world and want to be professional. we're seeing a huge demand -- we're up almost 30% in terms of dress shirt sales this year. today we're 35% off on sitewide.
we launched a new collection of specific dress shirts, 50% off we're catering to that melissa's point, 100% on inventory. i think brands we're doing well, a lot of people are over inventory. i think the brands will do well next year are did they get through the inventory do well nt year is did they have the right amount of inventory sta start out with, and will that propel them to the new year in a good spot >> thank you this is a hot one on the desk. sad david isn't here. >> he would defend the tie-less look, no doubt about that. thanks, guys let's get to kate rooney on the news we brought you a few moments ago. do we have her now hey, kate. >> hey, carl, that's right blockfi filing for bankruptcy as a result of what is happening with ftx this company was closely linked to ftx and was one of the companies that agreed to a
brai bailout earlier this year. ftx had the option to buy blockfi. that not happening as ftx goes through its own bankruptcy ftx filing for chapter 11 this morning. couple nuggets from the filing it looks like two of the biggest creditors, an ftx subsidiary, they're on the hook for $275 million. let's see, assets and liabilities, as well, listed between $1 billion and $10 billion. this company, you know, had been on the brink earlier this year it's one of now three or four companies. you have voyager, celsius, three eras capital that went down as a result of what happened in the spring andare closely tied to ftx. the latest collateral damage we're seeing, carl. >> kate, do we yet know, and maybe we do and i just don't know, but do we yet know how many other companies ahead of the implosion at ftx, that ftx stepped in to try and help
i'm wondering how much more fallout we could see across other firms right now. >> morgan, these were the big ones voyagers of the world, blockfi, two of the biggest names those deals had not been closed yet. they're sort of -- they were in the process. voyager was being bought out of its auction. ftx had technically won that auction and was supposed to buy that company out there's a handful of companies, at least in terms of the bailouts, as bankman-fried announced earlier. then the companies that invested in or was tied to and on the list of creditors at ftx's bankruptcy filing, something like 130 this company has just every side of the crypto economy, whether it's on the venture side or partnerships as far as the bankruptcy and the bailout, it's a handful. blockfi being one, that also halted withdrawals a few weeks
ago. there had been questions of what happens next what is the option for the company if ftx or other companies aren't coming in as a potential bailout here. >> the otherment element over t weekend, story in "the journal" about miami trying to break ties regarding the stadium rights then interviewing club owners in miami who had become depend on crypto entrepreneurs i mean, elements of the economy beyond crypto itself that built up to support the industry >> that was fascinating, carl. the ft one especially, talking about some of the nightclubs in miami and just some of the money and enthusiasm that crypto had brought into cities like miami from conferences and just the big spending that went on. some of the anecdotes from the article, in particular, were eye-opening, but it seems that has dried up, at least for the near term. you'll likely see it, not only with crypto companies, but the broader economy, wonder what happens with miami, real estate,
the high-end nightclubs. i'm sure you'll see this play out now that some of the bigger companies fx htx had a massive profile in miami, not to mention the bahamas, seen as a growing crypto hub you have a lot of crypto money flooding there >> kate rooney, thank you. let's get to dom chu for a sector sort. >> markets lower right now mostly lower to start off the week with tech among the biggest laggards we are below the 4,000 level for the s&p. we've been highlighting the pullback in shares of apple, but we're seeing notable weakness from another bellwether for the industry that's chipmakers, including nxp semiconductor, also on semi, as well both stocks hanging on to double digit gains in terms of november performance. data storage and flash memory also in focus. western digital, micron, seagate among the laggards chip stocks have been an
indicator sentiment for blooder tech see if it stays that way back to you. >> thank you. as we head to a quick break, a quick programming note don't miss dom's conversation with cathie wood at 2:00 p.m. eastern. cnbc. cnbc.com/pro to listen in. we'll be right back. what if we wanted to electrify all of this... 100% carbon free... is it possible?
welcome back to squawk on the street if you're in the market for a new car, prices are moving in the right direction. we have more on what we're seeing in terms of supply and demand hi, phil. >> morgan, this is the news people have been expecting let's keep in mind, when you look at the latest data, we'll get complete numbers on thursday when we see the november sales numbers, but this estimate from rbc capital, pretty good indication of what the street is expecting. you're going to see slightly higher incentives, not huge increase, but slightly higher insintives at the same time, you're seeing the transaction price ease back a little bit these are elevated relative tos. the slightly higher inventories, you're seeing auto makers
replenish supply, expand the types of vehicles available. in terms of sales pace, 2022 is going to go down as probably 13.7 million vehicles being sold for perspective here, we're a long ways from total annual sales just a few years ago 13.7 then perhaps we see an increase up into the high 14 millions next year. look at the auto dealer stocks these are a group of stocks that have been doing nicely since september 30th that is the most recent low point for the dow, if you will the stocks have moved higher also, take a look at gm and ford versus tesla since september 30th this is a far different story. tesla, as we know, obviously under pressure because of what's happening with elon musk and twitter. questions about the ev demand in china, the chinese economy let's be clear, ev demand overall in the united states continues to grow. by the way, we will likely hear from elon musk thursday night.
that's when they are going to be delivering their first tesla semi we expect elon musk will be there, guys. back to you. >> all right we'll be keeping an eye on that. as we know you will, phil lebeau thank you. tesla shares are trading higher this morning major advantages all in the red to start off the week, led by energy and tech stocks that'll do it for "squawk on the street." "tech check" starts now. good monday morning. welcome to "tech check." i'm carl quintanilla with dierdre bosa jon is off can the strength of cyber monday continue we'll discuss that. plus, the latest from beijing as the rare protests spread there over ongoing zero covid restrictions investors wonder what it may mean for the likes of apple. cyber monday not the only thing "tech check" is celebrating this morning day one of cloud week. more on the names you should be watching ahead of a bunch of earnings we'll look for growt
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