good wednesday morning and welcome to another hour of "squawk on the street. i'm sara eisen live at the bellagio hotel, fountain club in las vegas, ahead of the formula one race this weekend. carl quintanilla back with me at post nine of the new york stock exchange today the ceo of the las vegas grand prix, more than $1 billion of economic value expected to be brought to this city >> huge news will be all over it, sarah. meantime, a softer than expected inflation print. ppi with its biggest drop since april of 2020 targets the top s&p gainer on pace for its best

day since 2019 what do the results say about the consumer going into the key holidayen and how does this shape the market narrative we'll talk about that. >> then, microsoft unveiling its new ai chip. the stock rallying more than 50% this year to a new all-time high we are live in redmond, washington, at microsoft headquarters but let's begin with the market, obviously adding some gains to yesterday's monster rally on the back of that softer than expected cpi data today it's about the ppi print, which also came in a little bit cool 4519 is definitely a 10% bounce off of the october 27th lows what is the next hurdle for the market to clear? let's bring in our cnbc senior markets commentator, mike santoli, where the momentum does continue for now, mike >> absolutely, carl. and i would say the first hurdle would be for market to basically absorb this sprint, without giving up too much of it, as it inevitably cool off it's about 10% in 13 trading sessions, which historically does not tend to mean you've exhausted the upside

in other words, when you have one of those really persistent stretches of gains over a short period of time, usually, it's going to lead to somewhat upward bias down the road, even if you have to cut back remember, yesterday was the strongest day in the s&p since april 27th if you look back at the chart of that day, you did back, go sideways, and extended to new highs. the first thing is technical supply demand, making use of the seasonal tail winds and all the rest of it and then we've really kind of run out or used up a lot of the main things folks were worried about in the here and now. so clearly, the cooling inflation story, really defangs the fed from here on out and then on treasury yields, that's something we're probably still going to have to be watchful of. we're still a little sensitive to any potential gains in yields so far, 4.5% is okay on the ten-year next week, we'll have some long-term treasury auctions. i tend to think we're joemp

eve overse overemphasizing them, but we'll have to watch that >> the iwm now above the triple-qs for the month to date. russell, up 5.5, still not overbought >> that just shows you exactly how stretched that relationship was. and i think that the market's answering a lot of the obvious criticisms, which wasthat it was way too narrow clearly there's a squeeze effect here a squeeze isn't just, oh, those short sellers overplayed their hand and now they have to cover. it's people were underinvested in lots of parts of the market that they felt were going to be victims of higher rates and a weak economy now you have a reversal of that. this is the way all rallies start from oversold conditions, after a correction the question is, does the baton get handed off, does it become a little more of a rotational-type market that can benefit a broader number of stocks, that have been benefiting coming into this month >> mike, so now, just to sort of psychoanalyze the market right now, are we in this mode of bad

news is good news on the economy? because weaker economic data means the federal reserve is going to cut faster, if that's their next move. >> i don't think so. mainly because i think the hurdle is perceived to be so high for the fed to actually tighten anymore, that that's okay for now now, historically, between the final hike and the first cut is a massive wide range of outcomes between those two periods, but on average, the stock market has done well. it usually enjoys the pause period, and yet, since the last cut in july, the market is still slightly down on the s&p 500 so in other words, you still haven't gotten the benefit of that in the same way that at the beginning of the tightening segment, we didn't get the benefit of usually going up in stocks at the beginning of it. i still think that we're going to be worried enough about the economy slipping into a downturn, that you don't want to root for weaker economic data, even if perhaps that pushes off the data the first time. >> mike, don't stray too far, even with your early morning

hours these couple of days here. mike santoli stick with markets our next guest is staying optimistic after the cpi number, expecting a rally in u.s. equities, consumer discretionary, and tech, as this rate volatility comes down and is forecasting a soft landing with no further rate hikes joining us today, hsbc max kettner. can it be that good? it seems to tick off the table a lot of worries >> yeah. i would echo what your colleague just said, right we've worried about a load of things over the last couple of months rates was one of them. the government shutdown was the latest one, right? we had a couple of worries also, not only about inflation or, you know, the government shutdown, but perhaps really around earnings, as well. but really, what we've seen also in the earnings season, the reporting season for the s&p has been rock solid. there's been this obsession with talking down the market. sort of this desire to talk us

into a recession and into, you know, really talking down this earnings delivery. but in reality, right, earnings for q3 were really, really solid for the s&p. peak rate was pretty much like it was in the last two quarters. surprise factors on earnings were the same as in the last couple of quarters so, frankly, i mean, the reporting season was pretty great. and now going forward, the interesting thing is that earnings expectation for q4 and for q1 next year are super low they've been actually downgraded if we look at q4 earnings expectations, consensus is saying that from q3, s&p earnings are going to drop almost $3. that's amazing, right? and we don't really see that weakness in the top-down data. so i really don't understand what analysts are doing there. because to me, that's wildly too pessimistic here on the shorter te term >> max, at this point -- do you think the market would reward weakness in the job market, if

we saw the average run rate of employment drop, maybe go negative at some point are we rooting for that in some ways >> i'll give you the classic economist answer, it depends now i'll talk for next ten minutes without saying anything. no, i'm not going to do that look, i guess it depends really on the weakness of those job data, right? so if we're going sort of decelerating in nfps from 150 to 100 or perhaps 75, that's great, right? that's still really, really solid. that's still okay. that's still okay, really, in light of such high real rates and the strain that has been really put in by the fed, into the consumer and into corporate hazards. that's still really good if we're dropping from minus 50, then things are differently. we're certainly going from what you talked about, the bad news is good news, but changing straight into the bad news is bad news paradigm.

we don't want to do that it depends, slightly weaker, that's good, but not too weak. it's the classic goldilocks thing like, growth is kind of okay look at retail sales today, right? growth is okay, it's pretty good it's not as good as in q3. we don't have the risk of overheating anymore, that's exactly what we want but it's basically not at risk of really falling off the cliff. it's not at risk of overheating anymore, such as it did in q3. that's exactly the combination that we want >> but we are also at the same time, max, monitoring rising delinquencies on credit, on auto loans. there's student loan payments have resumed the high rates are still making their way to the consumer. what is the credit card right now, 20% so at some point, the consumer is going to weaken at what point do you worry, though, about the soft landing scenario and the job market? >> yeah, look, i think what we're seeing now in terms of the delinquencies, and number one, for example, if you look at auto

loan delinquencies, i think there's been a one-off push in demand, straight off the covid, because people were scared of traveling, using public transplant and so on so instead we were basically snapping up cars and used cars, right? that's what the shortage came from perhaps that's evaluating auto loan delinquencies a little bit artificially right now, compared to history the same thing goes for credit card delinquencies when we look at credit card dling went sis over the last 10 to 15 years, yes, the uptick looks a bit scary right now. what we've seen in the last year, year and a half. but if we put it into context, if we put it into kynect where we were before the financial crisis, we're nowhere near where credit card delinquencies were even before the financial crisis on average, not even talking about the peak, right? i'm talking on average before the financial crisis we're still way, way, way off those levels it will take more time until the consumer really does feel some

real strain. but when can that come i don't think it's going to be in the next two to three quarters the simple reason is, both earnings forecasts, but top-down gdp forecast for the u.s. continue to be really, really low. as long as that continues, we're basically having still this really low rate, and this really low bar to beat, and we're still faced with pretty positive activity surprises, and pretty positive earnings surprises. >> max, the soft landing narrative definitely gaining some stream. we'll keep trying to poke at it and see what survives in the quarters ahead thank you, max kettner, hsbc getting some news from microsoft. important today as the company's annual ignite conference takes plait. our jon fortt has details. big day, jon >> it is, carl microsoft's ceo satya nadella will take the stage here at the seattle convention center in less than an hour. then come join us here on cnbc here's the news. i'll break it down into a couple

of categories. talk about chips and software and some context on the chip side, microsoft is announcing a couple of different custom chips the first one, azure maya. this is an ai chip from microsoft's own workload think about themicrosoft 365 apps and the things that microsoft itself builds that it wants to run efficiently in data centers. the goal of this chip is to run that more efficiently for investors thinking about this, hey, data centers cost a lot of money to run, so if this chip can do that better, that means high margins overtime, and microsoft being able to build out more quickly than competitors. think about amazon, think about google and others. the second chip, azure cobalt. this is not specifically for ai. think of this as general purpose cloud computing. so those workloads people are getting on, they don't want to have to buy their own servers, they want to be able to rent those from a cloud provider. one of the options to run that on azure cobalt, versus other

chips they want to be able to run their workloads on that's better margins for microsoft and more revenue down the line as more customers like that so also today, satya nadella, expect him to do what he's done throughout the year, and talk about microsoft's strength throughout what we call the stack. think about chips at the bottom and you've got the servers and things that depose into those, the data centers, the software running on top of that, azure operating system, and the applications on top of that. satya nadella's argument is, microsoft uniquely has now chips, that data center architecture in azure. they've got windows. they've got this open ai partnership. and they've got productivity software that people are actually using that's different from what amazon and google have, right, for instance. so expect them to push all of that co-pilot is what they're talking about, this ai assistant, that now microsoft has built throughout these productivity products and the argument that they're

making is, hey, we'll save you so much time, make you so much more efficient, make your work so much more joyful with these copilots that you'll be willing to pay 30 bucks a month more on top of that. we'll get some data today from them on how that's shaping up. see if developers are convinced here so all of that's the context where microsoft is really trying to build on the cloud success that they've had over the last decade of satya nadella's leadership and turn that into success in this next decade, that we can now clearly see is going to be mostly defined by ai, carl >> haven't heard ai described as joyful john, we're really looking forward to your interview later. thank you very much for setting the stage. satya nadella with jon fortt later, 1:00 p.m., on cnbc. meantime, i'm here at the bellagio hotel and casino in las vegas ahead of this weekend's coming formula one race and the premiere of or new documentary, inside track an exclusive look behind the curtain of f1's multi-billion-dollar empire. it debuts 8:00 p.m. eastern time

tomorrow right here on cnbc, and here is a sneak peek i'm getting in the car with toto wolf the ceo, co-owner, and team principle of the mercedes amgf-1 team >> you have to make sure my seat belt is right. i've never, i don't think, gone more than 90 miles per hour, or 80 today, we'll go more than twice that fast on what's called a hot lap. >> let's do it ahh. oh my god. it's one loop around a formula one track during a race weekend. >> yes, i got to do a hot lap with toto wolf it was very scary. carl, vegas is ready to race with wynn ceo craig billings telling me this weekend will be bigger than all of the heavyweight boxing matchups showcased here, bigger than new years, and bigger than the super bowl, with wynn one of the casinos offering high rollers

multi-million-dollar insider packages to this event we'll have much more from vegas and f1 and how they're trying to boost the economy here we'll talk to las vegas grand prix ceo who joins me right here at the bellagio with some questions for demand on this race "squawk on the street" returns in just a few minutes.

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yeah, my 5g home internet delays the game a bit. but you get used to it. try these. they're noise cancelling earmuffs. i stole them from an airport. it's always something with you, man. great! solid! -greek salad? exactly! don't delay the game with verizon or t-mobile 5g home internet. catch it on the xfinity 10g network. welcome back to "squawk on the street" live from las vegas ahead of this weekend's highly anticipated formula one race joining me here is the vegas grand prix ceo, renee wilm good to see you. >> great to see you, sarah >> a lot of people don't know you are also the chief legal officer of liberty media how did that happen? >> when we first started coming to las vegas, it very much became trying to put together a

big deal i'm a deal lawyer by trading it was bringing together all of the constituents, sharing with them how this could benefit them we always go for win-win when we get deals done at liberty and that's how this began. >> this has been a two-year effort on your part, and pretty sizable undertaking, to build a 3.8-mile track, goes down the las vegas strip, all sorts of new structures, including the large paddock building how daunting of a challenge was that >> from day one, we put our head down, put together an amazing team of dedicated people, each with their own individual specialties, such as project management, putting the pit building together in lightning speed, working with tokyo, our engineers, working with the local commercial team, and it was just go time >> what was the heaviest lift? >> certainly traffic planning. so when you're looking at encapsulating hotel rooms, casino workers, guests to town, within a 3.8-mile circuit, that's pretty daunting so we worked very closely with

metro, public works, clark county commissioners to figure out, how do we keep traffic flowing, even when the track is hot, and that you can no longer cross those streets. >> because the strip will be closed >> yes >> at various points >> the entire 3.8 miles will be closed from roughly 5:00 p.m. to roughly 2:00 a.m >> and you'll have 100,000 people >> in excess of 100,000 people >> how does everyone get around? >> we've installed temporary bridges at multiple points across the track our biggest bridge is actually crossing over flamingo, which will be the heart line to allow people from outside of the circuit to get into the island >> what has demand for tickets been like? because when you first announced that it was -- i remember you saying, it was very hot, it sold out. but now there are reports that ticket prices are falling into race weekend is that true >> i would say that that's not true and what we are seeing is record-breaking demands for tickets for sponsorships i think greg talked earlier about the incredible mar qui

brands that we brought into this event. what we found from a logistical perspective is that people who bought tickets on ticket master, once the ability to resell those tickets flipped on, the rell-sellers jumped in and they do what they do. they'll put tickets on different platforms, may change the pricing, that's not our inventory. our inventory has held up very well >> so the resellers discounting the price, you don't think, is a reflection of underlying demand here >> no, absolutely not. we have a tremendous amount of demand our ticket salespeople are hard at work even to this day and as i mentioned in some earlier interviews, we held back tickets because we knew this is a last-minute town people come in from l.a. all the time on thursday, friday, we wanted to make sure we could meet that demand >> also, costs came in a little bit higher than expected i know liberty's greg mafay talked in the last earnings hour about some of the costs being more than expected what did that look like? >> sure. i think there's two types.

capex and opex on capex, we built the track in the pit building within a year and that obviously led to their being some inflationary costs involved, because we didn't have necessarily the time to send out an rfp and wait two months to get a response we needed to move quickly and needed top quality so that absolutely added to the capex budget >> but they're one-offs, right >> absolutely. that is built. the building is built, the asphalt is done. on the operating expense side, the town wanted to be sure that this event will be safe. and that traffic will continue to flow. so we have leaned in very heavily around safety, security, and traffic planning and we do expect those costs to mitigate next year, once everyone in town sees how well this will be executed. >> did you have to do even more, given just some of the geopolitical events, just in recent weeks, leading to concerns >> honestly, the safety concerns and the focus around how we are going to manage the entirety of the circuit, those happened much earlier this year with the sheriff. >> so what do you say to the local community, and i've seen

this a little bit in the local papers, that it's been highly disruptive, a mess to get around, the circumstances is coming to town, and then they're just going to leave investigation in different shape than they found it >> well, i would say this. we're not leaving las vegas. we have a permanent 300,000 square-foot facility that is the new home of formula one in north america. and we will be activating that property throughout the year in addition, we are leaving behind $1.2 billion or more of economic impact. >> where do you get that number? >> that number is derived by our economic analysts who look to what will be brought to town, hotel rooms, let, which is live entertainment tax. that is something that we did not seek a waver from. all other major events get wavers from let. but this live entertainment tax, which will be hundreds of millions of dollars will go to support the community services that are provided by the state and the local regulators >> double the super bowl, i'm told, revenues for f1. >> yes >> renee, thank you.

good luck this weekend i know it's been a huge undertaking for you. >> thank you, we couldn't be happier to be here >> and you're getting good weather, too, so far >> it's pretty phenomenal. >> the ceo of the las vegas grand prix and don't miss inside track. renee is in it this is a documentary, premieres tomorrow night, 8:00 p.m. right here on cnbc carl, i came in august and i can tell you, renee and i toured a little bit it looked nothing like -- we didn't think it was going to be done it was a construction site the building was so far from finished and now it's amazing what this town has done with the grand stands just lining up across the stretch. >> that is fabulous. squawk on the strip, as some of our viewers have taken to calling it >> there you go, good. meantime, big focus on u.s./china relations today, obviously, as the president meets president xi jinping in san francisco. we're going to talk about the implications of those talks and what it might mean for investing in china >> plus, watching shares of disney today, valueact capital

has been building a stake in disney is now one of the largest investors in terms of position according to a report, value act began buying disney this summer during the wga and sag strikes we're going to talk about what that means for disney going forward. stock's up more than 3%. back in a moment go deeper with thinkorswim: our award-wining trading platforms. unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. and sharpen your skills with an immersive online education crafted just for traders. all so you can trade brilliantly.

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a couple hours into trading, holding 4515 let's get post-to-post with bob pisani not far from the highs for the

d day. >> that's why earnings will likely go up for 2024, the estimates for earnings this is great news this is why we have such a broad rally. the small cap companies don't have a great effect. all the retailers are up today target's dragging the retailers up tapestry had great -- now it's 31 it's got a $7 billion market cap. that doesn't move the s&p 500, it's a market cap weighted index. look here elsewhere. i can show you some other things travel stocks are doing great. the transports are all doing great here alaska air, great week overall it was 33. the last few days, it's a fabulous rally they got. again, $4 billion market cap this is the very, very bottom of the rung of the s&p 500. the same with all of these other

transportation-type. like carnival. this is not great company, had a great week was 12 on monday, now it's 14. that's great good moves here, but it's a $16 billion market cap again, really, really small. we're having the same problem with all of the regional banks you might think, okay, this is great. finally, we're getting moves in some of these companies like key copper here, in the last couple of days. it was 10, 11. now look at these big moves we're getting. it's only an $11 billion market cap. again, these are small companies that are out there the same with some of the other ones that are -- the regional banks. they're all generally fairly small companies. the if you look, key corp. is the same thing, i mentioned that one. come on over here. look at coamerica. here's coamerica here. same situation here. again, 40 to 45 in the last couple of days this is really great, it's $6 billion market cap so good to see these companies moving, but these regional banks got so clobbered in the early

part of the year, they're not having a huge moving impact on the s&p 500, which is what everybody is looking at. now, i want to just show you on other thing over here. if you believe in the soft landing, one way to watch about how the market is betting for and against the soft landing is to watch high yield. this is the high yield etf this is the biggest high-yield etf that's out there it's run by black rock it trades here at the new york stock exchange and it's been rallying it's flat today, but the minute we started moving in early november, the yields started moving down, the very minute that happened, all of these started rallying that's a play, that's a good way snow that if there is a concern about some kind of recession or slowdown, that the soft landing isn't working, it will be a credit event, and high yield will crater. and it did earlier in the year so when that turned around, when the yields started dropping, all of these started moving. these have been moving up, these

are all up 3 to 4% on the year good way to watch on the soft landing. i watch how high yields perform. that's a market bet on whether the soft landing and right now high yield has been rallying carl, back to you. >> that's a tell, bob, thank you. bob pisani let's get a news update with our bertha coombs once again bertha >> donald trump's lawyers asked for a mistrial this morning in his $250 million fraud case. they argue that the conduct of the case's judge and law clerk raised questions about unfairness the judge issued a gag order to prevent trump from publicly talking about the clerk. he's been charged a total of $15,000 for violating that twice. russia said today some ukrainian forces crossed a key river into occupied areas of the kherson region moscow says that it dispatched more than troops to stop them. ukrainian officials claim their forces have secured a foothold on the river bank and are trying to push back russian forces. and new jersey's first lady

making it official, launching a primary challenge for indicted democratic senator bob menendez's seat, which is up for a vote next year she's never held elected office before tammy murphy joins representative andy kim in announcing an election bid menendez has said repeatedly that he will fight the federal bribery charges against him and run for re-election. you know, sarah, we've never had a sitting governor and a senator who were married, and so if that were to happen, tlaelhat would really set a precedent >> right, i'm thinking department of transportation secretary and mitch mcconnell, but this is a new combo. >> exit poll >> bertha, thank you bertha coombs. shares of target surging this morning to the top of the market on a big earnings beat, but the stock is still down 15% on the year. is it a buy at these levels? and what could the results tell us about walmart's results tomorrow, as that stock hits an

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quick look at european markets for you here at the close. the ftse 100 in the uk turning positive on the year the data point there that helped, uk inflation falling to a two-year low in october. some good progress there, like we're seeing here. year over year, cpi coming in at 4.6%, versus 6.7% in october a real stepdown in the rate of inflation. also some data out of japan. third quarter gdp comes in negative 0.5%. the overall move in currencies has been a weaker dollar in the

last 24 hours. we're still below that key 105 level on the dollar index. and if we get central bankers sounding a little bit more dovish on the back of this weaker inflation numbers and weaker economic numbers, that could really supercharge a weak dollar story into next year. that's what the analysts are saying but it depends on how relatively speaking, the u.s. does versus the rest of the world, and whether the fed really feels commission mission accomplished >> either way, big implications for corporate earnings we'll see what happens with the greenbacks meantime, a couple of bullish pieces of news on the consumer the first is that sales fell in october, although less than expected after months of strong gains. september was revised higher and then target seeing a massive move higher after beating expectations they raised the guide. they expect a pretty strong holiday season the move did profit opfi to lift their target however, they still say to expect more volatility from here, maybe shares have not yet seen a bottom. the analyst behind that call is

with us here at post nine, oppenheimer's rapesh, great for coming in. is the story about inventory or margin, really >> it's really margin right now. if you look at last year with all of that excess inventory, target operating margins were 3.5% longer-term bull case is for them to get back up to mid-single digits. and we see $10 plus earnings power versus under 8 this year >> so why the net caution? >> so from a bottom perspective, we do think shares have bottomed they were down close to $100 i think they have bottomed i think it's more on the top line outlook look at discretionary categories in the u.s., clothing, a number of these categories are in negative territory so right now, we're trying to. it exactly when we turn back to positive growth. so that's why i think you see the volatilities, it's more top-line driven. >> how do we do that, rapesh i talked to the cfo of target, and he said he is seeing some modest improvement in consumer discretionary, home and apparel, better in q3 than q2

how do we game out when sales ultimately recover >> yeah, so i think for the balance of the year and into early next year, we still see negative comp store sales trends i think as you move further and further away from the pandemic, middle of next year, to the back half of next year, we think comps turn positive. but it is these difficult pandemic laps. they're on top of us due to loan headwinds. i think it's a matter of time. target excels on the merchandising side go into stores, stores look great. some of these new brands, thernd gain traction over time. but it's really sitting out these discretionary headwinds, but later next year, you should see a positive comp trajectory >> is it just macro, where consumers aren't buying as much for their homes or electronics or apparel and we just have to wait for that to recover in a post-pandemic. or is there something target specific here. are they losing share, for instance is there still an affect from the boycott after the pride

month fallout. can we tell? >> i think it's largely macro. so if you look versus pre-pandemic, target sales are still up 30 percent plus for the same quarter so, on a multi-year basis, they've continued to gain share, just near-term, just given that they've gained a lot of share, you look at what walmart is doing, consumers are migranting more to walmart, given their value proposition and all of the inflation out there. target is losing market share, but we believe they've gained share. and as you start to lap these more difficult comparisons on a multi-year basis, we think they should return back to growth and if you think of that consumer going to walmart, if inflation starts to moderate, some of those consumers would go back to target, just given, they may be seeking more discretionary products >> what do you think the readthrough is for walmart, at least in the short-term? >> i think walmart is reporting tomorrow we think it's going to be another strong quarter we expect at least a 3% comp store sales increase some of the whispers out there are for 4 1/2 to five. ic it's another beat and raise

quarter for walmart. they're gaining tremendous share online and in the store. everything we saw from target today, it's still positive for walmart. but walmart is clearly in a different situation than target, just given their larger con consumables mix. >> last from me, there's people looking for laggards, for bargains, and pointing to etsies and dollar generals and pelotons, for example, where you've got large declines, but somewhat of a base would you be looking for things like that? >> our coverage universe, ulta beauty is that one that we would identify the stock was 540 plus, went back down to 370, now it's up po 314. so we see significant upside potential, and fundamentals are in tact, and we saw with target today, beauty is really strong and almost on fire even after these difficult comparisons. >> i wonder what they would have done without beauty in target's case rap rapesh, thank you, from oppen oppenheimer.

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big meeting for the u.s. and china in san francisco today, but it's also an opportunity for san francisco to kind of flex its roots and its future as a tech capital our deirdre bosa is across town at another gathering of tech leaders in the city for today's check check. hey, "d" >> good morning. that's another benefit san francisco's cleanup or makeover, whatever you want to call it this week, a chance to show off the city's ai revival, how it's attracting more talents and companies to the barrier i am at the cerebral valley ai summit, vcs here include reid hoffman founders from data bricks, inflection, and waymo. it all gets started in about 15 minutes. for now, the doors will open discussion will be centered

around some of the biggest themes in ai the nvidia h-100 chip shortage and big tech's ambitions certainly, microsoft's announcement this morning will surely be a talking point. its own custom silicon and broadly, megacap tech's role in ai investing, whether they're displacing vcs another issue that is dividing the ai and vc community and likely to be hotly debated here today, the responsibility development of artificial intelligence and how to balance that with innovation commerce secretary gina raimondo is here for apec and also launched the voluntary responsible ai protocol, with a group of start-up founders and investors. it focuses on organizational buy-in on responsible ai, things like transparency, risk, and benefit, forecasting, feedback 35 investors signed on, including general catalyst and bing capital but the initiative is also eliciting very strong emotions and employeeblowback from other

community like mark andreessen who wrote, absolutely not. kind of a libertarian bent here. another investor and adviser responded on "x," quote, everyone should be thankful this mind-set did not prevail at the advent of the microprocessor, the database, the pc, the internet, mobile phones and so on at each step, there were those that championed caution over innovation and guys, that is really indicative of this broader polarization in venture capital and artificial intelligence that right now is arguing over how ai developed at the still-early stages, as the government is figuring out, as well. looking forward to that conversation today also, as we have many world leaders trying to figure this out themselves in town >> yeah, deirdre, beyond the pledges about responsible ai, there is this question of regulation i feel like the lawmakers want to do it they want to make sure that what happened to social media doesn't happen or the internet, where

the right guardrails weren't in place. is the industry coalescing around some sort of idea of what that might look like or is it still pretty on distract >> yeah, it feels very abstract. it feels like the government is, like you said, trying to get ahead of this and not have a repeat of social media, where they're trying to play catch-up. but like i said, it's really polarized. i'm not sure what the alternative is i've seen lots of backlash to this protocol that was signed this week, but not a lot of how we're supposed to do it, except maybe arguing and saying that if you are in favor of any kind of regulation, you're against innovation so probably, i'm hoping today that we'll hear more productive discussions on how you can develop responsibly, while not stifling innovation, but that's sort of where the community is at right now, it's just becoming polarized. so i hope there's ideas here on how they can do so effectively >> listening to that debate, "d," man, time is a flat circle.

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welcome back to "squawk on the street." lots of news to unpack from china. you have apec in san francisco, biden and xi jinping set to meet hours after the country reported better than expected retail sales and industrial production for the month of october here to help us make sense of all of it, grow investment group

chief economist, as an economist who has the economic upperhand right now? the u.s. economy has been much better than expected china's has been worse although still growing faster who do you give it to? >> thanks for having me. i think it's a very tricky question to answer, to be honest i think the u.s. is doing very well, the u.s. stock market has been going up and i think the chinese stock market is trying to find the bottom and trying to consolidate. if you look at the past three years since the pandemic, the interest rate determines how the chinese is performing the past few years. i would say that right now, you know, china would love to have

the leeway of the usa easing the monetary policy. so i would say right now china needs -- the chinese economy needs all the help it can have right now. >> do you expect the chinese leadership to put in that stimulus to inject it into the economy in a way that will really help the economy meet the growth targets it's setting out? we've seen stimulus but it's been incremental and not much evidence of a full-blown recovery >> yes, that is true so far the stimulus has been easing monetary policy in a year where the economy needs all the help it needs, the physical is less than last year.

therefore the money is not doing all the work it can show on the economy. i would say that right now because the easing and all the stimulus has been focusing on the property sector, the infrastructure spending is not stimulating consumption. it takes a couple years to mature the chinese economy is set out to achieve the 5% for earlier this year. it is still not as strong as it should be especially given the circle experiences that we had after the stimulus in 2024 we will probably see more physical stimulus coming

this way and probably bigger physical deficit to help the chinese economy to recuperate in the next year. >> hao, the president was asked yesterday about his hopes for this meeting, and he said one is just to get back to a normal course of communication, being able to pick up the phone and speak to each other in the event, what does that mean for longer term worries like taiwan? >> i think the die long has been resuming after a long pass we have the republican party in china and before this summit, we are actually seeing many of the

details discussed and probably has been agreed on before the summit and, therefore, it would make the visit more fruitful, more worthwhile, for the chinese leader to attend i would say going forward, it's probably -- the dialogue will be continuing and also it's been a long time since the two leaders last met i think if you look at the market reaction, it has a very positive tone of business. >> hao, thank you very much for shedding some light on the economic point of view we appreciate it, and the politics as well >> thank you >> that's hao hong cnbc is launching a new cross platform franchise called "cities of success" that explores cities that have

transformed into power centers driving across the economy, our first stop is going to be nashville. we'll look at the high-profile innovators, investors, icons who have turned the music city into a global business destination. don't miss our documentary december 6 at 10:00 p.m. eastern time sara, vegas is a good example of that it's already a story that's fairly well known. there's a whole host of other cities, some smaller, behind trying to re-create the magic areas like austin and vegas and salt lake have put together. >> nashville is so interesting, part of that sunbelt, the reawakening. is it post-covid, carl i know you went there for these interviews is it post-covid phenomenon? >> some of it is, the lifestyle you can create in a place you

didn't consider moving to five or ten years ago, that coupled with some of the planning city leaders have put together is beginning to pay off first things first, we have to get through f1 i have to see more of you in that car >> yes, i will show you more all ahead of the documentary tomorrow night i'll be with you tomorrow live from vegas some of the sponsor ceos are here, too. >> sounds great, sara. great stuff. let's get to post 9. >> thank you carl, thanks so much welcome to "the halftime report." i'm scott wapner front and center this hour, the state of the rally after more promising inflation data has stocks on the move we'll ask the investment committee how far the market can run. joining me today, joe terranova, kari firestone, jenny harrington, an all-in jim lebenthal. let's check the markets. i could not resist so we are green across the board, 4.54 is the yield on the ten-year note. that's the big reason the inflation prints have pushed