but the ones who matter most to me. ♪♪ good wednesday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with sara eisen live at post nine of the new york stock exchange. this hour, disney prepares to welcome a new cfo as activist nelson peltz mulls his next move. what you need to know ahead of tonight's print. >> then, toast gets burned. cava's ceo will join us in just a few minutes with more on how the company plans to weather moderating restaurant sales. >> plus, a mixed quarter for teva pharma, results led by sales of its drug to treat

huntington's disease. the ceo will join us exclusively later on this hour. >> first up, a check on the markets and the ten-year, of course. the market losing some early gains, going negative. if you look at the sector breakdown, you've still got strength in real estate, industrials, technology, and materials. looks like it's utilities, energy and communication services that are weak. nasdaq is also negative. i guess we might break the eight-day win streak for the s&p 500 if we remain lower. the ten-year note yield seeing some buying today, the ten-year, that is. and yields go down to 454. that relationship between stocks and yields continues to dominate the market narrative. this morning, ubs saying equity returns next year are very likely to be inferior to fixed income. meanwhile, morgan stanley's cross-asset strategy group this week projects 9.8% annualized global equity returns and 5.8% from treasuries over the next decade. that implies 60/40 portfolio could return 8% a year! let's bring in cnbc's senior markets commentator, mike santoli. do you kind of buy the

bullishness on sfwboth asset classes now? >> it's interesting, the morgan stanley model, it's first of all, a decade ahead. a lot of it does rely on the higher starting yields you're getting in bonds. so that should be a buffer for returns down the road. but 9.8% more global equities, blended, it's the highest estimated returns they've had in decades out of this group. a lot of it relies on the cheapness of non-u.s. stocks, relative to history. in terms of ubs' call, that stock should outperform bonds next year. implicit in that or explicit in their report is that the relationship between stocks and bonds will flip over the course of 2024. by that, they mean that as yields go down, stocks will not benefit, as they have more recently. and that's because they think inflation will have come down toward target and lower yields do not necessarily imply disinflation, as much as they do maybe risk-to-gross. obviously, nobody knows the future. it's tough to make a really

super-bullish case, based purely on equity valuation for the next year, we're at 18 times forward earnings for the s&p, but within the market, there are sort of pockets of cheapness or at least unduly punished areas, if you believe we're not going to get into a recession. >> mike, brent below 80. talk about what do you think -- i mean, to the degree we're benefiting from the mood of disinflation, what does oil say about that? >> it certainly seems a net positive at the outset, just from a broad sense of, what we're most worried about, but i don't know where the line is that you would draw to say, well, below this level, it's probably saying something unpleasant about the macro economy. and i think that's the fix we're in, in general. we want goldilocks, we want decelerating economic activity and softening labor markets, but not too much. and we don't know really where the "too much" point is. but it should be a benefit as we wait for a cpi report next week to see energy prices in retreat. >> yeah. some of the demand data and certainly the stockpiles this

week have been interesting. thanks, mike. mike santoli. given the potential for strong returns next year in bonds, our next guest is also overweight fixed income. but if you're looking for opportunities in equities, she says now is the time to get bullish on energy, tech, and some consumer discretionary. with us at post nine is wilmington trust head of investment strategy, megan chu. it's great to have you on set, megan. >> first off, talk about what you're seeing next year, fixed income versus stocks? >> yeah, well, i think that as we look at the landscape going forward, where we've moved to in yields, and certainly we've come off a little bit, but with the ten-year around 4.5%, we're looking at fairly attractive risk versus reward for bonds. rates could certainly move higher. it's hard to know where they go from here, but financial conditions are incredibly important, and the easing of financial conditions that we've seen is a little bit circular, because it could actually put

the fed back in action. all of that withstanding, if you look at a potential move up in rate, we'll see still positive returns for fixed income, and the likelihood they move a little bit lower from here could see really solid gains. we do like where we are in the fixed income space being overweight, but we're also not getting too negative on equities. and we think that you need to start thinking about inching back. we've been underweight, but looking for an opportunity to get back to neutral. >> we mentioned energy just now, what do you make of this pullback in crude? >> i think it's really important to watch. a lot of the focus has been on inflation. we are also shifting a little bit more of our focus towards what the growth outlook is going to be. i personally think that the move we're seeing in oil and small cap is a little bit of a warning sign for growth ahead, and what could be coming on the demand side. it's certainly helpful for inflation and helpful for the consumer. but i don't love the signal that it gives. so, you know, we give about a 25% probability to a recession

next year. still have that base case being for a soft landing, but growth is slowing. and it's nice to call for and hope for a goldilocks economy, but to see it slow to just the right pace is a small needle to thread. so i think we're just watching out for any signs of deterioration in consumer credit quality and watching what oil is actually telling us as well. >> when you say you like tech, is that a call on magnificent seven, which has done a lot of the heavy lifting this year for the nasdaq, or something broader? >> it is something broader. i think you need to be participating in mega-cap tech, because that has been the leader. as we look at where the trend in technology is going, in terms of structurally, when you think about ai and the importance of scale, the importance of really deep balance sheets, the magnificent seven is where it's at.

so i think you need to have exposure there, but we also look at valuations for the broader market, not only in tech, but outside of tech as well. as looking more and more attractive. so we think there are some oppor opportunities. >> if you're overweight fixed income, wouldn't you want to be overweight small caps or playing more within real estate, for example? >> small caps have been a tough asset class. the nasdaq being up 30%, s&p 500 up something like 15%, small cap is down. and i think that's another signal that there are some weak spots in the economy. i think, from a valuation perspective, small caps are starting to get very enticing and very interesting. and you have to think about you know, from our perspective, going from an underweight to a neutral, i think is something that we're looking to do. but the trick is that we've seen such a pullback in some of these

cyclical parts of the market, generally you would expect small cap to bounce off the bottom, but if we don't get a recession, is it going to be more of a muddle through environment for small cap and maybe some of the most cyclical parts of the stock market more generally. i think it could be. and again, the power of scale and really sound balance sheets, if interest rates stay relatively evaluated, that could continue to weigh on those smaller companies that are just more independent on issuing debt and borrowing, unless interest rates come really massively pulled back, and that's not our expectation. >> finally, there's been some calls, you know, you should play japan, even china's worth being involved with. you basically want to see u.s.-centric, right? >> we definitely have a preference for u.s. both tactically, as well as structurally. we've just seen such a period of u.s. dominance in the economy, and there are so many deep structural advantages there. i think china, investors in

chinese equities really need to have a strong stomach. there's just so much unpredictability there. there are so many deep-rooted structural issues. for our part, when it relates to emerging market equities, we are actually neutral versus our benchmark, just because it's so difficult to anticipate whether you're going to get a crackdown in a particular sector or maybe a big massive stimulus bill issued. so i think you have to manage your risk there. and when it relates to international developed equities like japan and europe, you know, europe just does not look good at all right now. recessionary conditions. so we're underweight being much more cautious, prefrgerring the u.s. >> eu sales are down three straight months. great to have you in the building. >> thank you, megan. turning now to the biggest earnings report of the afternoon, disney, hulu, nelson peltz, espn, all among the big issues investors will be watching. our julia boorstin is here on

what we should expect? >> with nelson peltz preparing for another activist move against disney, investors are eager to know how bob iger will manage the slower-growing parts of disney's business. this is the first time that disney will report under its new structure, which for the first time ever breaks out sports, giving new insights into espn. we're looking for an update on streaming and whether that division is still on track for profitability in a year, also for insight into the advertising market. the future of the linear tv business is, of course, a question after disney's battle with charter. and at the theme parks, we'll see if consumer spending is holding up after some price increases. disney shares are down about 8% since bob iger returned to ceo nearly a year ago. they're down about 24% since nelson peltz called off his activist campaign against disney back in february. so this quarter, the company is expected to grow revenue 6%, and earnings by 134%. wells fargo saying, quote, we

foresee an action-packed print for disney. we think all reads lead future dtc profit expectations, which is the biggest opportunity while dtc subs are the biggest risks. i'll be talking about all of this and more with disney ceo bob iger, that is an exclusive interview at 4:05 p.m. eastern today. guys? >> julia, what's the problem? what's been the issue? because it's not like bob iger has come back and hasn't -- has been standing still. what has been the most frustrating thing for investors, like nelson peltz and others? >> well, look, bob iger has been incredibly busy. remember, after that nelson peltz conflict was resolved, he did meaningful layoffs, laid off thousands of employees across the company, did very serious cost-cutting. but the situation here is very different than when iger left disney now nearly three years ago. so we're talking about an industry that has been very much changed. don't forget that there is still an ongoing actor's strike. there was a writer's strike that dragged on for months. this actor's strike is still having a huge impact on the outlook for the film industry.

and many people will say, it's really depressing the potential for movies that are released, because you don't have actors promoting them. you have so many questions about the future of the linear tv business. but bob iger has talked about how he's really working on addressing all of these issues. they're looking for a partner, potentially for espn. they're looking to potentially c sell the linear tv business. they are doubling down on the parks business, which has been a real growth driver for the company. so he's been very, very, very busy. but i would say this is an incredibly volatile time for the industry and for disney in particular. >> yeah, especially with the marvels on the way and cover a variety the last couple of weeks here, julia. interesting times. we'll see what happens tonight. look forward to your interview. as we said, julia with iger tonight. two big earnings interviews still ahead with us. ceo of cava will join us after the break. stock is lower despite reporting a surprise profit and some strong comps. >> and then we'll speak to the ceo of teva, the world's largest generation drugmaker. that stock in the green on the back of a revenue beat and

strong guidance. back in a moment here on "squawk on the street." dow goes positive again. we'll be right back. icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot.

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toast investors feeling a bit burned today. shares of the restaurant payment company tumbling after a loss of 9 cents in q3. on the call, management said, quote, more recently, we have seen consumers' spend moderate, while gross payment volumes jumped 33 year on year, they did miss estimates. canacord says still a buy. since toast went public in september of '22, the stock has lost more than three quarters of its value. >> tough time to go public. also a tough time to see moderating trends. sticking with the restaurant space, take a look at cava. it's down big, despite posting a beat on both revenue and adjusted ebitda profits in q3. also, raising its guidance into year end, signaling potential margin impacts next year, stemming from labor investments and higher commodity costs. let's talk about all of that now. joining us here at post nine is

cava ceo, brett schulman. good to have you. >> thanks for having me. >> here for earnings. so the numbers looked strong, 14% comps, 7% growth in traffic. are you able to keep that going into this current quarter and next year? >> we're thrilled with the performance. really a reflection of the broad appeal of our mediterranean concept. we've seen tremendous momentum over the course of the year. you noted the 7.6% traffic. we're excited to continue that going forward. >> are you seeing those trends continue or any signs of consumers moderate? consumer moderation in play. >> we're certainly taking into account all the consumer headwinds that are facing them. into q2, we've reflected that in our guidance, for our full-year. >> you actually raised the guidance on new stores, right, new locations? >> we've raised guidance overall for our comp growth, and then we raised guidance for our unit growth! so we opened 11 in q3, we've already opened 12 new restaurants in q4. and raised our full-year

guidance to 70 to 73 new restaurant openings. >> are the parameters, by which you open a new location, changing geographically? anything like that? >> no, not at all. we operate in 24 states and the district of columbia today. we talked about next year we're going to open in chicago, so it will be our first foray into the upper midwest. it's a region of the country we don't currently operate in. we'll have tremendous white space opportunity in front of us, and whether that's in various regions of the country, whether it's urban or suburban markets, it's really a testament to the broad appeal of our unique mediterranean cuisine, where taste and health unites, where it ports and succeeds in all of these diverse twad rade areas. >> one of the issues, you're lapping higher menu prices coming into 2024. >> well, we've actually worked to really mitigate our menu pricing, compared to peers. we only took 4%, back in january. we don't have plans to increase the rest of this year. and so we are lapping a strong traffic comp from 2022 in q4,

we're lapping about a 15% comp, but again, really working on behalf of our guests to mitigate any price increases and drive that value proposition. >> so 2024, no price increases at this point? >> 2024, we said we're going to revert back to more historical norms of about a 2.5 to 3% historical price increase. >> what about menu innovation? how do you think of that as a driver? >> we're excited to continue to bring new, adventurous, culinary flavors. for example, we brought back our fan favorite, dave's balsamic event great, including our sweet and spicy chicken pita. and we're testing a new steak maine item. we don't currently have a beef item on our menu. and this is something we're testing next month in both of boston and dallas markets. and if it performs well, we look to launch that later in '24, as a new core main item. >> are you finding any bargains

in real estate? >> we're finding the ability to source from 24 states across the country. we're able to pull and source from so many diverse markets, we're able to continue this growth rate that we've put out. >> what is happening on labor and wages? availability and what you're paying? because i know you mentioned that as an investment point. another reason that people are wondering about margins. >> yeah, you know, our team has always been core to our success at cava. we want cava to be a place where they can build a career, not just have employment. so we talked about the wage investments we made in the quarter to continue to be a leading brand in all markets we compete in across the country. >> page one of "the times," i think, this morning, is all about drive-throughs, and the degree to which there's a generation now that doesn't want to interact very long. they want almost minimal contact, even when they're ordering food. how are you thinking about throughput right now? where does that rank in terms of priorities, getting people in and out of quick? >> we want to deliver a great guest experience first and foremost. we have lines to the door in some restaurants, but we're focused on delivering a great

experience. you talked about the drive-through. we have over two dozen detail pickup lanes across the country. and 65% of our guests come in and order down the line in the restaurant. 35% through digital channels. what we want, we don't want it to be an either/or, we want it to be an and, where you can come in and have a great physical experience or a great digital experience. >> on the labor issue, what happens next year in california, in april, when the minimum wage goes to 20. are your workers being paid that already, or is that going to be a headwind? >> we've always paid above market. so we won't have as much room to catch up. but we're working and thinking about, we haven't committed to taking a price increase and work on our guests' behalf to mitigate that. i'm concerned that could have indirect negative impact on smaller and more independent operators. if you think about it, when the legislation is targeted toward larger brands with 60 or more unit like cava, and that has us raise our wages $20 an hour or higher, other smaller operators will be forced to compete with

that and run the risk of raising good team members, walking across the street to those brands that are paying more. with our resiliency of our business model, we're able to absorb those price increases, not pass along to the consumer or a smaller independent operators may struggle with that. and i don't necessarily think it's a good think for the industry. we all love our small, independent restaurants, a diverse restaurant industry is a healthier restaurant industry. so it will be interesting to see how this plays out. >> finally, we remember the ipo not too long ago. is the stock being held back by lock up expirations? what's the calendar like on that? >> the calendar is that there's a lockup release, the remaining lockup release. we had a performance base released in september, 20%. we have a remaining release in december, but we're focused on the long-term. we're not foecused on the day-to-day gyrations of the stock. we're focused on building the large-scale category. >> do you like the chipotle comparisons or not? >> it's high praise. we want to build the next cava. there's certainly a similar

operating model, and you know it's really high praise to be held in that category. >> that has been the growth story. but they're not comping 14% right now. is that because people -- why is it so high above the industry right now? >> we're so early in our journey. the mediterranean diet, the number-one ranked diet six years running. the diversity shifts in our country, as our country gets more diverse, you see palates getting more diverse and married with health and wellness trends, that's where our cuisine comes in. it's a great fit for the modern consumer. >> i'll ask you two things before you go, do you think that glp-1 dynamic is, in fact, affecting habits? and if they are, are you somewhat insulated from that? >> great question. i think it's too soon to say, right? but what we have seen in some of the early findings and some of the anecdotal evidence is, people are cutting out salty snacking, they're cutting out more indulgent fattier foods,

late-night eating and alcohol. it's re-calibrating their diet to eat a more healthful lifestyle and a more healthful diet, which really lends itself to our cuisine. so we think it could be a net positive. >> glp-1's mediterranean diet is the way to go. >> that's right. >> thank you, brett, thank you very much for coming on. it's good to have you here on earnings day, brett schulman, the ceo of cava. speaking of the consumer, shares of ralph lauren moving higher after a top and bottom-line beat. i spoke to the ceo on the quarter and his demand outlook. i'll share some of that commentary from him next. don't miss uaw president shawn fain tonight on "last call." that's coming up tonight at 7:00 m.asrnim p. ete te. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing!

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european markets mixed, but recovering some early losses as earnings season pushes ahead. uk retail leading the way with marks and spencer, the big department store topping the stock 600. the stock up by double-digits, hitting a new 52-week high after beating on earnings and upping its dividend. euro zone sales missed expectations. the drop was caused mainly by a sharp drop in sales of non-food products, including online sales. on the inflation front, germany's cpi coming in flat in october hitting a 27-month low. so more progress on inflation, but more worrisome signs for the

economy there. can europe pull off a soft landing, is another debate. we debated here in the u.s. we're in better shape than they are in terms of some of the economic data, certainly retail sales. >> some worrisome comments from draghi about the european economy being in recession maybe already. we'll watch that closely. a couple hours into trading here, we have gone red. let's get post-to-post with bob pisani. >> just turned negative. we're winding down earnings season, but very mixed reports here. you want to see how difficult the oil companies have it this year, look at occidental. it's trading up. it had great numbers. $1.19. that was way above the 84 cents estimated, but that's less than half of what they made last year. they made $2.44 same quarter last year, $1.18 now. they were selling their oil for $80.70 this quarter, last year, they were selling it for almost $84 a barrel. there's your difference here. no surprise, chevron's down about 3% this year. excuse me, oxi's down about 3%, chevron is at a 52-week low.

i've been mentioning two groups that are doing really well on a tear with the lower interest rates. the home builders and the reits. horton is still up even after the results yesterday were terrific. we were 102 a month ago. we're 121 now. that's what happens when the ten-year treasury goes from 4.9% at the end of last month, now to 4.5% or so. that's what it will do for the home builders here. big moves up, other ones, you can see the reits are doing a lot better. extra space storage, this is the second biggest storage reit in the united states. they compete with public storage here. they had their earnings out, so what matters with these companies are simply the occupancy rates and whether they can keep raising the rents. on both of those fronts, they gave very good guidance. the reits have all been bouncing since the start of the month, as we just got those ten-year rates continuing to come to the downside. finally, you just had the cava ceo on. very interesting to listen to him. it to point out, everybody

remembers what happened? we were all excited about cava. that was back in june they went public. $22. on the first day, it doubled. it closed at almost $44 on the first day. went to $50 a couple of days after that. now it's at $31. that is still up from its initial price, but everybody who bought in on those first couple of days are now well underwater. and this is what's been going on with the whole ipo market this year. one of the reasons you don't hear about more ipos coming. in fact, of the four largest ipos this year, three are below their offering price. ken view, bicrkebirkenstock, instacart, all below their offering price. the only one above it is arm. and it's barely above it. we'll talk more about how the ipo market will look in the next couple of days when we talk more about whether we're going to get anymore ipos this year. it's looking pretty tough right now. >> i was going to say, cava's one of the outperformers among that group. thank you, bob. bob pisani. time now for a cnbc news

update. courtney reagan has that for us. >> well, donald trump's daughter, ivanka trump, is on the stand right now in her father's $250 million civil fraud case. she's facing questions about e-mails and communications that the attorney general's office claims showed that she and others in the trump organization knew they could secure favorable loans depending on a certain net worth. the attorney general's office said it will rest its case when ivanka's testimony is complete. climate scientists say the warm weather in october will virtually guarantee 2023 was the hottest year on record. according to the copernicus climate change service, october was 0.7 degrees fahrenheit warmer than the previous record, which was set in 2019. it was the fifth straight record-breaking month. and is it the end of panda diplomacy. the giant pandas at the national zoo in washington, d.c. are making their trip back too china today. the first bears arrived 51 years ago in 1972 after president richard nixon's historic trip to china.

the zoo's staff is calling it a hiatus. china officials have not said whether pandas will return. >> flying fedex, too, pretty interesting. >> thanks. >> not kidding. coming up after the break, the ceo of teva is with us. stocks moving higher after the company boosted its revenue outlook. we'll break down the latest quarter and the future of the generation generics business. keeping an eye on roblox, the stock soaring as q3 bookings beat with daily active users and hours engaged. all coming in better than expected. we're back in a moment.

er. busy day for earnings today

but did see revenue grow about 7 year on year, thanks in part to a 7% boost of its sales of huntington's disease treatment. the tel aviv-based company also noting that production has been unaffected by the israel/hamas war. joining us now in a cnbc exclusive, teva's ceo, richard francis. great to have you. thanks for the time. you did field a lot of questions about manufacturing in israel. it's about a tenth of head count and manufacturing. can you talk about how you've been able to manage? >> firstly, carl, thank you for having me on the show. before i mention anything about manufacturing, i would just like to say that teva's commitment is to make sure the well-being of our colleagues and our employees in israel are a priority. right now and will be going forward. but to answer your question specifically, manufacturing is unaffected. and to put in context, 92% of our manufacturing is outside of

israel and 98% of our manufacturing is outside of israel. so while it's a very important location for us, when it comes to impacting our business, we think we're in a good place and our business plans are robust. >> how are your employees doing? >> clearly, it's a very challenging time. i was over in israel the monday after the saturday of the 7th of october. and what has stood out to me against incredibly challenging circumstances on a personal level, because everyone has been touched by this the resilience and forward attitude and commitment to come back to work to make the medicines that we believe are so important to helping people in israel and around the world drives them. it's been a humbling experience to be amongst my colleagues, but it is a challenging time, and our commitment is to making sure their safety and well-being

continue going forward. >> talk a bit about the pipeline and execution right now. where are you seeing? we mentioned one example in the intro, areas of challenge and oppor opportunity. >> we launched the pivot to teva back in may, and there was some skepticism whether we could do that. i think this is the second quarter where we've grown the business, and the second time we've upped guidance for the year. so i think we're heading in the right direction. we got some momentum. and part of that is our pipeline. as i've said, there are a few people who wondered whether teva could move in an innovative pipeline along. and we've shown with tl1-a, we're actually recruiting ahead of schedule, and so we're actually recruiting more patients into these studies than planned. so that shows our r&d capability that we have built can execute. so we're very pleased about that. and that coupled with the performance you mentioned

growing at 30% has allowed us to improve our guidance for the year, but also give us confidence that this pivot-to-growth strategy is actually gaining momentum. >> what about m&a? i know it's been, obviously, big, and it's ramped up again in the sector. i'm curious what your posture is given some of the debt levels. >> i think to a certain degree, we are constrained by our debt. but at the same time, i think we can do some end licensing and looking actively on bd to bring in some products, because we have a big commercial footprint and we can leverage that more. we'll do $1.2 billion this year, asteado, but we already forecast that will bed $2.5 billion.

we have a lot of opportunity to grow. our pipeline coming through, these are products which have the ability to have the ability to generate hundreds of millions, if not billions of dollars. that allows us to focus our growth organically. we do, though, want to supplement that with some business development activity, as and when we see value and when we see it will be syn synergistic for our cost base that we have in the country. >> where would you rate the states right now in terms of regulatory pressure, the collective environment, when it comes to pricing, things like that, vis-a-vis the rest of the world? >> well, i think for me, the u.s. is still a very attractive market, which is why teva focuses on it. i think there are pricing pressures, we have two businesses here. we have a generations business and a patented business. i think the generics business is always about pricing pressure, so that's about launching drugs, having a very effective manufacturing network, so you can reduce the cost of goods.

i think on our innovative, it's about making sure that we bring innovative products that meet an unmet medical need to the market. and then when we do those, i think there's an opportunity to have them appropriately priced. and we think that is something in which the united states still offers. we see this as a very important market, but with austedo, we will be marching that in europe, and europe has an opportunity to drive value across our innovative business. >> the stock's continuing its run, been going on for about a month, holding up today. thank you for the time, richard. richard francis of teva. >> thank you very much for the time. >> after the break, more from our exclusive interview with the ceo of $100 billion insurance giant progressive. and also we're keeping our eye on microsoft this hour. stocks hitting an all-time high, having its longest wind streak since 2021. jeffries saying in the last hour that it's hard to get off this bullish story when there's quality in every nook and cranny of microsoft's business right now. wee ckn mont 'rba ia me.alth inss

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last hour, i sat down for a rare exclusive interview with the ceo of progressive, who rarely grants tv interviews. this was her first on cnbc. we talked about the immense growth of the business, the impact of inflation on progressive's ad spend, and how generative ai will impact the insurance sector. take a listen. >> we're in the business of risk, so we look at a lot of variables to understand your likelihood to have losses. but we've been doing that for a long time. i would say, think of machine learning, large language models, chatgpt, we have over 100 models right now going on and experiments going on, and have for a decade. in terms of like chatgpt, we are digging into that. we're actually headed to carnegie mellen, my team and i, next week, to talk about in-depth about ai models and where to go. in fact, i put my quarterly

shareholders letter through chatgpt and did a bunch of really fun prompts to kind of see what it said.spot-on. they'll make us more efficient. we have to test it. we have to be sure to understand the biases it can create. and we're doing that really full-throttle at progressive. >> do you think it changes the entire industry? >> i think it changes the entire world. timing wise, you don't know exactly when, but you can't put your head in the sand. you have to understand technology and how it can improve the lives of our customers, our employees, and make everything more efficient. and if you're more efficient, we can keep our prices more stable. and that's what customers want. >> what about marketing spend? i know that's a big part of the business? where are you right now in terms of increasing it, throttling it back? it feels like we still see flow ever everywhere? >> well, we do a lot of up-front buying, as you know. we have that sort of in play. this year, we've pulled back substantially because of some profitability issues, because of inflation. we are getting back in skplowly

and we have a robust marketing budget for 2024 and we're excited to start rolling that out. what we wanted to do first was to have a little bit more stability from inflation and our prices and we're excited to hit the ground running in '24. >> what about your customers. there's a research note that came out a few weeks ago, maybe in the last week or so, calling you one of the magnificent seven, one of the analysts, not just because of how large you've become, but also the share of performance that your stock has seen as a percent of the overall industry this year. what is taking you here to the next level? are you taking share? >> we're taking share. obviously, from a premium perspective, we've increased rates. here's what you need. you need a diverse, incredible team that has a cogent plan in place, and then you execute the heck out of that plan. and when something comes up, which it has over the last four years, you regroup and put it together again. and so i -- i'm the spokesperson for progressive. it's 60,000 people have done an

incredible job to increase market share, increase our premium, increase our stock price, and it's never lost on me that take 60,000 people and i'm proud to be able to lead everyone at progressive. >> tricia griffith, ceo at progressive, which he has a pretty interesting story. she started at the company more than 30 years ago as an insurance agent, worked her way up to the top. that was bank of america who said, magnificent seven, where progressive stands among the giants on october 23rd. >> pretty fascinating. and huge market cap. >> yeah, they've grown. they're taking a lot of share in places like auto. and the biggest takeaway for me from her is that inflation has been a problem for consumers. we've all seen our premiums go up and we're paying more and she wasn't willing to say, you know, it's fully coming down next year. they still aren't quite sure, because this was an industry that didn't have that for years. >> we'll see if it tracks car prices in the future. meantime, amazon pushing further into health care space, planning to offer some low-cost

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amazon expanding its prime membership program offering discounted subscriptions to one medical as part of the continued push into health care. deirdre bosa watching that today in today's "tech check."

good morning, dee. >> good morning, carl. amazon has long tried to crack into health care, and this move with one medical the way to deepen those ambitions through its huge shopper base and prime fly wheel. third party estimates puts the number of subscribers at 170 million, a huge opportunity to upsell the one medical prime service. amazon bought it for nearly $4 billion. here is how the partnership works. if you are already a prime nem, you can pay another $99 for an annual one medical plan. each additional family member is $6 a month and one medical is a network of boutique practices in the u.s. around major cities. users can access care through the app or through in-person appointments at a brick and mortar location. now i spoke exclusively with amazon's vp of prime on how it fits into the broader prime ecosystem.

>> many americans are struggling with how to get access to health care on a reliable basis, just some facts. 40% of americans don't have a primary care physician. on average you wait 26 days to see your primary care physician. with munone medical you can hav same day or next medical assistance this is trying to remove the friction of daily life, add some savings, as i mentioned before, and ultimately have in one membership something that provides shopping, savings, streaming, and now positive health outcomes. >> primary care, though, is a very competitive space. i asked ghani what doctors would work for amazon versus a company more entrenched and has a longer history like a united health or cvs building similar things. >> i think the proposition for doctors, registered nurses to work with one medical, to work with amazon, they believe in the vision and the vision is to make

health care which has been for too long an opaque but really necessary part of life, make it much more transparent, make it much more simple for everyone to access. >> so ease of access that is key. in a way, amazon is treating health care like it does other prime offerings from streaming "thursday night football" to two or one-day delivery to music on echo devices. health care, though, arguably the trickiest space it's going into is highly regulated. amazon has a mixed track record here. >> a pretty interesting look at the retail operations, dee. i wonder if you think the street is getting more interested in that part of the business versus aws. >> that's interesting to think about how aws growth is. i would say the street tends to be more interested in advertising because, again, health care is so tricky and it's so regulated, whereas amazon has had a lot of success very quickly in advertising and

that's a high-margin business. amazon hasn't had a lot of success in brick and mortar, the one medical proposition. amazon already has telehealth in a wider sense. so one medical is a bet on primary care through these brick and mortar locations. also with an app but that's the key difference and as we've seen with amazon's grocery ambitions as well, which has relied on a hybrid mix of digital and in-person brick and mortar stores, a much tougher time. so this is ambitious. it's not going to be easy, but this is them putting their flag in the ground saying we're going to attack health care like we have other industries. >> i think a lot of industries will be watching to see if they can successfully scale it from retail to health care. thank you, deirdre. deirdre bosa. related to earnings, ralph lauren, the full-year 2024 revenue growth. some caution relating to north american wholesale business, which was lower in the quarter.

when compared to luxury rivals, the stock outperforming this year but underperforming the overall s&p 500. i did speak with ralph lauren ceo patrice louvet. they executed well in a tough economic environment. it will continue to be a choppy environment for the foreseeable future. i asked him what that included. he says a combo of high promotional activity across the industry and consumers being more careful, which he only sees in a value oriented consumer. ralph lauren gets a peek that have through its outlet stores. not a big change in the high-income consumer. china growth there of 20%, which was a step down, but, remember, last quarter it was easy comparisons because they're coming out of the covid lockdowns. on that he said we're still bullish long term and near term. not much of a slowdown there. the key metric is aur, average unit retail this is pricing. it measures pricing over a

certain period. it grew again 10% over the quarter and it's been growing for six years, their way of elevating the brand. in other words in a tough promotional environment they are still able to capture pricing whether it's more cashmere sweaters or outerwear instead of the hoodies or geography in asia where they get better pricing than in the u.s. that is something louvet points to as far as some of the success here. >> something they protect fiercely. meantime, have your packages been arriving late recently? we might be able to tell you why. according to "the journal" american airlines is offering bonuses totaling $250,000 to lure pilots away from u.p.s. and fedex. a regional carrier has been forced to limit service to some cities amid the broader pilot shortage in this country. and with cargo flights slowing down, with volumes decreasing, they're trying to fill the gaps with pilots who want to jump ship or already accepted a

buyout. all this as we continue to see labor issues across a multitude of industries. we did get a deal with the culinary workers in caesars -- >> i saw that. >> -- that was averted but it's been all about labor. >> we're looking for signs that inflation is coming down particularly on wages. we've seen that but, and this is a one-off kind of story, but the autoworkers will get a big raise as well. that's one of the arguments for stickier inflation. >> fain on "last call" tonight. let's get to the judge. carl, thanks so much. welcome to "the halftime report." i'm scott wapner. front and center this hour, the run at 4400. stocks trying to extend their longest winning streak in two years. we do have some interesting moves today from the investment committee, and we'll get to all of them. joining me stephanie link, joe terranova, jim lebenthal. everybody is at the desk today. we are at session lows, and we've been on this incredible run. the nasdaq is trying for nine in a row. the dow and s&p are trying for eight in a row. we have yields, steph,