good thursday morning. welcome to another hour of "squawk on the street. i'm sara eisen at mgm casino in las vegas ahead of this weekend's formula 1 race carl quintanilla at the new york stock exchange traders continue to debate on a busy week. ubs laying out what they think happens with rates and the market the chief investment officer out with the 2024 portfolio strategy free retail reports paint a different picture of the american shopper what earnings from walmart,

burberry and macy's are telling us about the health of the consumer. crowdstrike ceo on the cyber security landscape plus its partnership with the mercedes f1 team meantime, had a pretty steady open but we lost ground s&p back below 4500, down eight points the focus is on retail just two days after cpi came in softer than expected and a day after ppi showed more of the same walmart spooking the market with warning of a consumer slowdown deflation has taken hold which could help shoppers but hurt the company sales. let's bring in mike santoli. i'm surprised if you were how overt they were about the possibility of deflation >> a little bit. i also feel like that's walmart's general orientation, how can we be a leader on price, and they're not going to get outcompeted so, therefore, they

will turn more quickly than other retailers. i do think it comes at a moment, as you say, we got beyond our anxiety about inflation and what that's going to mean for too high yields and an active fed. then investors turn to the other man diet, which is worrying about growth sputtering and yields going down for the wrong reasons and what the fed might do next about it i think that's the moment we find ourselves in in a market that was a little bit stretched and overheat coming into today probably needed a breather, but it's happening, definitely, with those catalysts. also oil breaking down and there's sense out there that we're kind of wondering about exactly how much consumer fatigue there is out there, continuing jobless claims rising, all that stuff to me it builds toward a short-term narrative of let's take a step back >> but, mike, the narrative has been for the stock market to embrace the lower yields, even if it comes with a slowdown because it means potentially while the fed is done and the

next move is a cut and the cut could come sooner. i guess at what point does that narrative not work if the slowdown deepens further and it leads to more significant cuts to earning estimates >> right honestly, sara, i think it's about when job growth is really negative when you're actually talking about a retreat in activity and not just moderation. that's why we were never going to get an all-clear. we ever never going to say it's late cycle, even though it's late cycle for a year. yields where they are are acceptable that would suggest that we've certainly peaked i don't think they have to go down much lower for stocks to work if you look at what happened last year we raced up to 43, stock market bottomed, and then they stayed between 3.5 and 4.0 into july of this year and the stock market managed to kind of find a way higher through all that >> we will see

maybe ten more basis points, 15 more basis points. we'll talk in a little bit when it comes to what to expect for the markets, our next guest is out with his '24 outlook predicting slower growth for the u.s., mounting consumer headwinds, rate cuts from the fed and lower yields for bonds making now the time to lock in some returns in fixed income joining us this morning, ubs gloeblg wealth management cio mark central banks in cutting mode, politics taking an outsized role talk about some of the numbers you'll be watching for. >> yeah. i think you teed it up very well and we're looking for the ten-year to fallto about 3.5 b the end of next year and that is an environment where we think stocks can do well. of course, also bonds will do well so it could be agreat year for investors to get their portfolios in balance and get their asset allocation in

balance. >> so, 3.5 any expected year-end target on equities for a year-end '24? where does u.s. fit relative t international stocks >> yeah, well, we're looking for about 4700 for the end of next year, which is tremendous upside, but there is some. we have upgraded the u.s. from an underweight we're actually overweight in u.s. tech because when we're screening things, we're looking for quality next year. quality is our theme and actually tech is showing a lot of quality strong balance sheets, very high return on equity that's the kind of thing investors will be looking for. who's going to be able to grow and maintain earnings as the economy slow >> does that mean any bounces in small caps are not to be trusted? >> you know, there's been a -- i

mean, it looked like there was a bit of a short covering rally in the russell, right i think they've been beat up tremendously and and there are some opportunities there one thing about the a.i. revolution, which is where we see the upside, it's these bigger firms that work across the value chain that may actually have a lead so, the big could get bigger i think for the smaller caps what you're looking for is who's going to benefit as the interest rates call and it makes their financing go a little easier >> mark, a lot of expectations of a soft landing in the u.s. for next year continuing what about the rest of the world, what about in europe and in china, which is also critical for the u.s. earnings picture. they don't have the magnificent

seven, they don't have this fiscal stimulus. what happens to their economies and the impact on the u.s. stock market >> yeah. i think it's a great question. so, the -- one of the interesting things about being a global investor and diversifying globally is that actually, you know, china's economy is still relatively separate from the u.s. so that the bleed over from, you know, what is going on in china into the u.s., obviously, isn't that great so they're still separate. but we see china kind of stabilizing maybe around the 5%, maybe a little higher in growth. and u.s. kind of flat lining for next year. so, that's -- that, again, leads to this picture of a global, slower growth picture. >> it does raise questions about what it's going to mean for the u.s. dollar, which the market is very much embracing now this

weaker dollar on the back of lower treasury yields. i do wonder how much that can continue if everyone thinks the u.s. is going to outgrow the world. >> yeah, i think that for the dollar, sometimes we have big calls on it. right now we're talking about playing the range and maybe selling upside on the dollar the dollar has had just a tremendous run for a very long period as you get that, weaker growth there will be some question about who cuts first is it europe that cuts first or the u.s. but we don't think there's a lot more upside in the dollar. >> finally, there's a lot of discussion about what happens as we await a day when rate cuts do come about what breaks, whether or not there's still post-qe rot, as someone said earlier in the week, and the degree to which the fed could use cuts as insurance if, in fact, those do happen how high would you say that is on your risk spectrum? >> well, i think that with

inflation coming down, the fed can titrate its dosing effectively to maintain a softish landing. we still think that's in the cards. we're expecting that the fed will feel confident enough to start cutting around the middle of the year because they'll say, look, conditions have tightened. now we can cut a little bit and conditions will still be tightened. will still look like the tough guys on the street we're definitely expecting a few cuts in the back half of next year. >> we'll see what happens in the middle of next year as the market is trying to forecast maybe a little sooner. mark, thanks sara well, carl, tonight as a reminder is the premiere of "inside track" where i'll give you exclusive insider ak tess into one of the world's most secretive and fastest growing sports formula 1, home to brands like

mclaren, ferrari, mercedes and red bull, not to mention the sponsors it comes out of this weekend's highly anticipated f1 race here in las vegas here's a sneak peek of tonight's documentary. >> think of sponsorship as a symbiotic relationship the sponsors get brand exposure during races and star power at events like this one with the haas drivers. >> give it up for kevin and nico let's go >> the team gets the brand expertise and a hefty paycheck for five years of title sponsorship, moneygram is paying a reported $60 million though the company wouldn't confirm the amount >> it's what keeps us racing it's a small privately owned team all these partners we have on board, they're the ones that make this possible >> in goes magnussen. >> as popularity grows, so has

the sponsors, but finding the right fit is key even for the big teams like mercedes >> at the end of the day, every team, every partnership should be tailor made to the objectives of the sponsor. >> for instance, you work with marriott what's the objective there >> marriott is very clear. we are racing in exciting destinations, they work in hotel and they want to activate for key clients an experience money can't buy. they meet the drivers, we have a chat. >> several public companies leaning into the f1 action here in vegas, including crowdstrike. one of the sponsors behind the mercedes car ceo george kurtz joins me on the other side of this break

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results were overshadowed about this warning about customer inventory digestion and deutsche goes from 58 down to 54, maintaining a hold goldman sticks with neutral, points out the outlook isn't entirely gloomy. a.i. is a bright spot, laying out $1 billion in a.i. orders by 2025 those sales at currently $500,000 that is a borderline historic drop in one day for cisco, sara. >> yeah, ouch. going negative on the year carl, the inaugural las vegas grand prix weekend kicking off last night with a star-studded opening ceremony. it was almost like a super bowl halftime show. with driver intros, fireworks, performances from everyone from john legend to the blue man group. today we're sitting down with one of f1's biggest sponsors for the look at motor sports joining us is crowdstrike co-founder and ceo george kurtz,

with the team behind f1 champion lewis hamilton >> good to be here. >> this is one of the reasons we embarked on this journey, to sell the business story, because so many companies on cnbc every day are jumping in when did you get involved? >> we got involved in 2019 that was our first year of sponsorship. i got to know the mercedes team in 2018 before we ipo'd. they came to us because they were looking for the best protection and they became a customer first that's how i got to know mercedes. >> why sponsor i think of consumer brands plastering their brands on top of cars. why would awe cyber security firm be a sponsor for the mercedes team? >> it's way more that consumer if you look at every enterprise, buyer down to the small s&vs, everyone is into formula 1 we were in the right spot at the right time when you think about formula 1 and you think about the precision and the speed and the

managing risk, that's what cyber security is all about. speed, managing risk and execution. >> so, is it about the brand perception for your business customers? >> well, we did it before our ipo because we weren't as well known around the world certainly in the u.s., formula 1 has become more popular. but it's been extremely popular around the globe every formula 1 race is bigger than a super bowl in terms of audience so, it really helped us with our bland exposure outside of north america. >> you've also gotten to drive cars, i understand >> i have. >> are you a -- is this a hobby of yours >> well, it's probably more of a passion, yeah, yeah. i've been racing for a while we cooked up a crazy idea of trying to drive a formula 1 car and getting customers involved we pulled it off and it was a great success. >> does it actually help you bring in business? can you connect it with revenue? >> we do, yeah just like this event, we actually have security roundtables. we take our best customers to

these events we expose them into the inners of formula 1 from a security perspective, we're actually talking and sharing ideas about how to better protect ourselves so, it's a great way for customers to collaborate and a great way for us to gain customer intimacy with them for the weekend. >> how is that demand for customers right now, given we're looking at some signs of a slowdown during different parts of the economy. >> if you look at cyber security and the attacks, we're here in las vegas, we saw what happened a few months back. cyber security, ransomware, cyber crime gangs, if you will, are rampant. it's the most activity i've ever seen in my career has been over the last year. just how fast they're able to operate and -- >> why is it happening more? >> well, i think it's happening more because there's still so many areas of attack there's so many companies that aren't protected with some of the latest and greatest of technologies and what we see is the identities are being abused. people are being social

engineered when they get into a network, they're able to move around and gain access and encrypt data, which is one of the reasons people are buying crowdstrike. >> where is it coming from right now? >> it's coming from all over but a lot of the attacks you see are really cyber crime related so, nation state actors are always going to be out they're going to be attacking, gathering data the cyber crime actors and the ability to actually monetize, even if they don't have the right level of expertise, they can buy ransomware as a service. they can buy access into a company. they can put it all together for not a lot of money but they can make a lot of money on the back end of it. >> i was going to ask during heightened geopolitical tensions like we're seeing the war in the middle east, for instance, if you see an uptick in activity, for instance, from that region, from iran? >> there is some activity in that region for sure, as you would expect in any sort of conflict. in terms of information gathering, just understanding what's happening >> targeting companies, though targeting who? >> they're targeting companies,

governments. there's such an interlock between companies and governments now in terms of what they do to support the mission so, we are seeing our security intelligence group is seeing an uptick in activity in that region. >> so, you don't think it's going to succumb to what usually what happens when things slow down, which is enterprises pull back on spending on technology you're not seeing that >> from a security perspective and the s.e.c. guides coming out, you have to report within a certain number of days, four days, i think, and that will help drive the narrative around being prepared, not being breached, not having to pay a large ransom you've seen some of the aks, you saw how large some of these numbers are. it's better to spend the money up front like crowd strooek to prevent these breaches rather than the back end. >> can you protect a.i.? can you secure against problems in a.i. as it grows? >> well, we're using a.i. to help our customers automate their security needs

we've been using a.i. since i started the company. before it was fashionable. wasn't generative a.i. but machine learning, to identify, prevent against attacks that have never been seen before. now we are seeing the rise of dark a.i. and dark llms -- >> what's dark a.i.? >> dark a.i. is -- >> sounds bad. >> yeah, it is it's really leveraging these llms that we would use for good purposes for bad purposes, right? being able to create new phishing attacks, being able to automate the ability to actually deliver vulnerabilities and exploit systems. really helping take this hard knowledge or difficult subject and move it down to the masses of the cyber criminals >> so, taking all the a.i. that companies are using. >> leveraging -- >> hacking into it >> leveraging the llms, generative a.i. for bad purposes, to actually get into companies and actually make their attacks faster and more -- >> can you stop it

>> that's why crowdstrike was invented it's us versus them. >> george, thank you very much it's good to see you here in las vegas for the vegas grand prix george kurtz from crowdstrike. on a fun topic and then it god got into dark a.i. next we'll dive into alibaba's slide and how u.s. chip restrictions are impacting plans to spit up that business watching palo alto as well, speaking of securities sinking today. the company issues weaker than expected forecast. session lows, dow's down 135 hich way to go. it's nice tohich have options, but too many can be confusing. for instance, if you have medicare, you may be able to get a plan with extra benefits if you know where to look. a licensed humana sales agent can help show you the way. take humana's medicare advantage prescription drug plans. these are convenient, all-in-one plans that offer all of the benefits

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when someone tells you who they are, believe them. stealing their basic supplies. this is lewis' car, 44. >> can you put a price on the car? >> it cost about $50 million to

generate >> cnbc documentary "inside track," the business of formula one premieres tonight 8:00 eastern. european markets mixed this morning after coming down from the highs of that positive u.s. and chinese data earlier in the week the ftse in the uk, the worst performer heading into the close down about 1% right now. utilities, the best sector in the stoxx 600 this morning the group is being helped by seemen's posting records for the third quarter. hello fresh falling on the back of lackluster customer growth and rising costs in the united states and then burberry, that stock being punished, down 10.5%, already weaker for the year. >> yeah. pretty anemic comp growth out of

burberry let's get post to post with bob pisani. >> it's been a bit of a pause. install caps leading this week transports leading, banks leading, reits leading as well. this is rotation we're seeing. we were talking about a slightly weaker consumer but i see a strong trend the restaurant group, for example, doing really well this month so far chipotle was $1800 at the end of october. look at this, $2100 right now. these stocks -- restaurant stocks have had a great one. by the way, chipotle has never split the stock. people ask me, why is this $2100? they were never split. it was $300 or so five years ago. ist been a stellar mover but they don't like splitting the stock. darden is the same all these restaurant stocks. darden was $135 at the end of october. interest rates start moving down

all these restaurant stocks started moving up on top of that starbucks has had a great month. mcdonald's had a great month yum had a great month. the restaurant stocks are outperforming. i know the airlines have been wobbly for a while but even most of the time you're seeing the hiltons and the hotel stocks doing well hilton was at a new high yesterday. carnival, caribbean up 20% or so this month the consumer is still out spending money in restaurants. certainly in hotels. i keep waiting for all of the home builders to finally start moving down again after an incredible month it's right near a new high pulte at $87 another big month. same with lennar, same with horton i keep waiting for this trend to stop i've been putting these up for weeks but they keep slowly creeping up.

several sectors continue to show strength one new low on the s&p 500 there it is, chevron we know what's going on here oil was $95 six weeks ago and $73 here we know about the higher supply and the sort of lackluster demand for china this is good for the inflation narrative. not good if you own chevron but good for the inflation narrative overall. what you see here, carl, is the soft landing is looking a lot more likely. do you see that b of a fund manager survey that's the consensus, soft landing. these fund managers six months ago their consensus was a recession. so, they completely turned around based on what we were thinking about six months ago. but the data has changed the facts have changed out there. the interest rate scenario is much better. the inflation scenario is much better the market is telling you right now that it is trying to price in that soft landing based on the inflation data, based on the decline in interest rates we've been seeing. back to you. >> looking at morgan stanley just now, forecasting 12 cuts in

the next two years we'll see what we get. bob pisani, thanks let's get a news update with kristina partsinevelos >> police arrested a man for involuntary manslaughter in the death of a jewish protester in california they say 69-year-old paul kessler got in a physical confrontation with a palestinian protester, fell backwards and hit his head on the ground prison he died the following day. hamas claimed responsibility for a shooting at a checkpoint between jerusalem and bethlehem. israeli police say they killed three gunmen who open fire when security members started questioning them. new york representative george santos announced he will not run for re-election in 2024. he dropped out of the race shortly after the house ethics committee released a report saying they found, quote, substantial evidence that the congressman violated federal laws he also faces two dozen federal indictment charges to which he has pleaded not guilty

go figure. walmart shares sinking this morning despite beating estimates for the third quarter and raising guidance it's the cautious tone about the consumer that might be hitting the stock. that and the bullish setup ahead of earnings. we'll break down the quarter when we come back. (christmas music) ( ♪♪ ) weathertech gift cards have the power to wow everyone on your holiday list. offering a variety of american made products... weathertech! nice! like floorliners... cargo liner... seat protector... boot tray... cupfone... sink mat... pet feeding system... anti-fatigue comfortmat...and more. order the weathertech gift card instantly for the perfect gift at weathertech.com.

an upgrade of intel catching our attention. mizuho hoe goes to buy hikes price target to $50 a share. investors might ask why now is the right time to get? mizuho's answer is they believe intel is lining up significant new server product launches and

foundry customer announcements in the next six months they say discount on price-to-sales ratio making it attractive to peers like am it d and nvidia a long way to catch up there. walmart moving down this morning despite slight beats on top and bottom line. the retailer issues this cautious outlook for the consumer ceo doug mcmillan told investors on the call that he expects deflation in the coming year but it will actually benefit customers. joining us to weigh in on the walmart tradedown is keybanc the print came in at record high at what point is it a bargain here >> we think it's still a bargain at these levels. obviously disappointing to see the reaction in the stock here today. important to remember walmart is on track for a great year. it was one of the best performing names into this event. and i think that the key drivers here of growth and market share gain all very well intact.

gaining share online, driving their advertising and marketplace businesses we still think the setup is in play for walmart to be growing operating income faster than sales over the next few years. >> it's been a while since we've had to view walmart in a deflationary lens. if, in fact, we get to that point and there's a lot of other commentary that's more likely next year, how does the thesis around the stock change? >> that's a great question having followed retail for over two decades, that's a risk generally when you see stronger same store sales, that gets retailers stronger multiples that's one risk we're worried about. the good news as it relates to walmart, we think they have more levers on the cost and labor front as we look to next year, particularly this automation initiative continues to get rolled out across their distribution centers. >> but if they've been benefiting so much by the fact they sell more staples and more

groceries than any other company and that's where a lot of inflation has been and it comes down to deflation, won't that ultimately hurt? >> so, yes, it will probably hurt the optics of same store sales. they won't be at the mid and high single digits we've seen in the past but i think the good news is hopefully that frees up dollars for the consumer to start spending in the general merchandise categories, and higher margin for walmart. >>. >> what's happening with share, you said they're gaining share who are they gaining share from and how much does it have to do with this prioritization of where consumers are spending their dollars? >> it's a great question they're really gaining share across the board first and foremost, as you mention the, they're so important as a staples retailer. they're growing the food and staples business mid single digits the grocery business more broadly is running 1% during that period of time. when you look at their

e-commerce, it was up 24% this quarter. amazon this past quarter was up 12%. pretty impressive. and even when you look at the general merchandise category, it's less important -- that was only down low single digits. that's much better than what we're seeing at many other retailers like a best buy, like target that just posted total comps down 5% yesterday. again, broadly better performance across the board from walmart. >> brad, thinking out a couple chapters now, if in fact rates do come in and, let's say housing supply improves, you've got a bunch of housing related names in your coverage, la-z-boy lowe's, which we'll get next week, does that provide relief given it's at a 13-year low? >> that's a great question, carl i think one reason we like walmart so much over the last year and still like it as we look out to the beginning of next year is the leading indicators for consumer spending seem to be flashing warning

signs. the higher interest rate, the student loan payment, the job market is still growing but not how it had been in the past. we still think you want to be careful of these discretionary categories what's really interesting is you mentioned lowe's and home depot and other home-related names is housing is running at such abnormally low levels right now. we ran the math. home purchase activity is running about 30% low from the 30-year average when you look at home purchase per capita we think we're in the early innings of a beach ball held under water. give it time, you will see home-related spending come back. >> i know one of your colleagues on the sell side earlier in the week looked at credit card activity among people who move and the things they spend on when they do move. mattresses are like a multiple of the next category i know you cover some of the mattress companies would you expect any volatility in those names if the housing picture changes? >> interesting to ask about

mattresses it's not a category the average consumer thinks about too often except that eight to ten years when they're buying a mattress we lik seely. they've been driving share gain from serta, so we like the outlook from that company, particularly if we can finally get rates to come down at some point and get housing to accelerate, although we're not holding our breath for that in the near term. >> that's definitely looking at the horizon. not today but it's worth thinking about maybe we'll talk about it in the coming months. brad, thank you. brad thomas at key >> thanks, carl. our f1 coverage continues after a break when the ceo of mountain joins us. the company just announcing a new partnership with the alpine racing team for formula 1.

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the bmw alpine formula 1 team getting a new partner today. we've got news mountain, the connected tv ad platform which featuring ryan reynolds as chief creative officer, announcing a new multi-year partnership with the company's logo visit on the a523 car this weekend it comes on the heels of a next generation update on the ad platform the mountain ceo mark douglas joins us >> good morning. >> there's so many business leaders in vegas for f1, and you are new to the franchise talk about how this announcement came together. >> we're partnering with f1 for the 2024 season. we expect beyond and this is the first race here in vegas it's, i think, it's like the

u.s.'s monaco, basically i literally this morning was on the track because the track is on the las vegas strip so it's pretty exciting. and since i -- >> it's closed down tonight. >> tonight it will be close. right now like the taxi driver was excited. >> some of the others are upset. >> that's what i'm hearing it's an exciting partnership because we do performance television obviously, formula 1 is all about performance. it's kind of the same mindset, how do we -- >> what is performance television >> performance television is taking tv as a medium, opening it up to any size brand. so not just the biggest brands and then really essentially matching consumers with brands they love. >> small business. >> yeah, small businesses, midsize businesses really kind of connecting them in a way you only previously got with like paid search and paid social now the amount you get now for television. >> you work with the streamers,

right, primarily, nbc universal, our parent company >> nbc, ironically, is our biggest partner but we work with over 160 tv networks in the u.s. we're essentially a growth channel for all of them. we bring this whole new cohort of advertisers into the television advertising market. >> how is the advertising, television advertising market right now and the appetite from some of the bigger companies to allocate more? >> well, i think the biggest advertisers, they generally are stable maybe even a little nervous about the economy. but when you bring in these new small advertisers, it's like the economy itself it's like all the new jobs come from the small businesses. all the new ad dollars in television are going to come from small and - >> that appetite is still there, just by some signs of a slowdown in the economy high rates >> absolutely. actually when the market -- when the economy gets slow, generally what happens is companies shift more of their dollars to where they can measure the impact.

and that's kind of what we call performance tv. >> it's interesting. we were just talking to george kurtz of crowdstrike he is on the mercedes car. did the deal in 2019 before crowdstrike went public to try to bring awareness you know my question is, are you doing this ahead of a public debut to bring more awareness? >> well, unfortunately, even if that were the case, it's not anything i can talk about. but we have a lot of scale and we launched this in 2018 it's grown tremendously. and, you know, we're growing the business and bringing more customers. given the economy, we just -- we're focused on growth and just kind of bringing more companies into the advertising market. >> i'm not surprised you went with alpine because ryan reynolds is an owner now he's an investor in the team but i do wonder if you get more exposure being with a team that's not in the top, say, four or five on the track. >> yeah. we think alpine is a fantastic partner.

the brand has racing heritage. ryan's involvement definitely played a role in this all coming together it came together actually pretty quickly because it made a lot of sense. i think with all of that together, that it was a team that made the most sense. >> how do you determine whether the investment is worth it >> really, we have metrics like our customers have metrics they're looking to drive, you know, more consumers to their brand than drive purchases we're doing the same thing in our case it's more b2b. how many companies are we bringing, how are they spending on their platform, how do they become aware with ryan he brings a lot of awareness, but we think, again, we're turning tv into performance tv and formula 1 is all about performance. >> how much does it cost to get on a car >> it's very negotiated. >> is that a nonanswer >> it's shockingly negotiated. but we think it was a really good deal for us and for them. >> i've heard that price has

gone up significantly in recent years. >> formula 1 has done incredibly well. >> mark, thank you for coming on and sharing some news with us. appreciate it. mark douglas, the ceo of mountain carl. >> sara, meantime shares of alibaba sinking after the company announced it will not move forward with that spinoff of the cloud group why and what does that mean for investors? we'll tackle it.

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blaming u.s. restrictions on ship imports >> this week's meeting did indeed seem to signal a thaw in relations but how long it lasts is another question and when you mentioned alibaba today, that's a reminder of the issues that will continue to play out at the technical level. shares are down more than 9% after nixing the chip restrictions it throws cold water on alibaba's shake-up to spin off all six business units and shares a spotlight on how for alibaba has fallen much of that has been attributed to the chinese government's crackdown on tech, but there's cracks in the fundamentals, too. another chinese tech giant is challenging alibaba's dominance in e-commerce and other chinese companies may have played the chip ban better, a large

stockpile from nvidia. even though tencent said it had enough to continue the development of its ai model for at least a couple more generations. there is also the startup level. a billion dollar generative ai company stockpiled 18 months worth of nvidia semis, which brings me to another point brought up at the ai summit i was at in san francisco. many are stockpiling nvidia chips and talking about a shortage but they are ex pectin a glut >> i think there will be a glut this year. nvidia is releasing new chips. they announced another chip just this week. we know amd is working on chips that look good, the mi-300s are coming to the market this q4

when there is a scarcity in markets, the market rushes to produce. so i think we're going to see lots more gpus next year what will that do for prices prices will come down. >> that is a very interesting idea he brings up. startup founders, investors are talking about scarcity in terms of the ai chips. but, as we know, as we report day after ay, a lot of folks are working on this and a glut, if we do see one next year, that would change a lot in the space particularly those valuations in the startup world that have reached astronomical levels. >> meantime, dee, i've been dying to ask you what you thought about xi's dinner last night, and if, in fact, they really are desperate for a recovery and for direct investment why he didn't roll out the red carpet more? >> you know, it was such a show last night

of all the ceos we talk about in one room, and i saw the footage like you our eamon javers was there how well it was received in china, they talked about that standing ovation he received you think about an alibaba today, one of the most well-known chinese companies here in america, down more than 9% because of these export controls we didn't get any progress there. in terms of the bifurcation in technology indications point to that continuing in the months apri ahead. >> for the broader market it sort of removed at the tail end some very bad scenarios people were thinking about with military ties re-established, and that was one thing the president said, you need to be in a situation where, if in fact, a crisis does occur, you can at least pick up the phone >> you go back to a year ago and there was a thawing in the relationship that didn't last very long it's a reminder, too, how quickly things can change.

i think it's being received positively here in san francisco between the city cleaning up its act and the meeting going well and all the ceos that flocked to san francisco last night certainly a moment for the city itself >> between that and we said earlier in the week, the recommitment to dreamforce, some buying here of sfo thank you, dee, deirdre bosa sara, we're watching walmart this morning >> yeah, watching walmart selling off in the wake of what were better results and higher guidance i think the 20% runup in the stock year to date had something to do with that and the caution around the consumer, carl, i've been digging into this and talked to john david rainey to figure out what they are seeing with the consumer. he says walmart is performing well, and if things are getting worse, walmart stands to benefit from that which is echoing what we heard from the analyst community sticking with the stock and saying that perhaps this is our overreaction on the stock. he did say we sounded a bit of

an alarm on the consumer but nothing we haven't heard from the competitors and we're not hearing overall from the industry it wasn't intended to be alarmist, just observing what they see in terms of the cadence of sales, it was weaker in october and then never they did better and did better in some of the categories that had been struggling like home and apparel but hard to read too much into that, carl that was a promotional period and came around deals walmart is making this idea if we're in an inflationary environment or disinflationary, what does that mean for staple sales, it frees up the consumer if they don't have to spend as much on inflation.

he feels good about the position now 7.5% slide in the stock, and numbers as well which are outpacing competitors. >> indeed. all-time high yesterday going back to the ipo in 1972 so it did run up into the print. march odds are approaching 40% if you look at the cme fed watch. this btig note, are we at the bad news is bad inflection point? the tell will be when mega cap tech moves lower alongside lower rates and the title is now we have bad blood, which i knew you'd appreciate >> i do, but are we seeing that? >> not yet >> a softer economy means the fed can stay on hold and inch towards cutting.

i think on the expectations of the rate cuts, probably expect the fed to push back on that and here we go, another push/pull on who is right, the market or the fed. will the fed feel comfortable with the market pricing in cuts? not so sure about that, carl it's a discussion we're going to continue to have don't forget to watch the documentary tonight "inside track" at 8:00 p.m. on cnbc. >> we can't wait, sara let's get to "the half." all right, carl, thanks. welcome to "the halftime report." i'm scott wapner front and center this hour, the big question, whether you're a bull or a bear, are we close to an all-clear for stocks? wall debate and discuss that with the investment committee. joining me for the hour today bryn talkington, steve weis, josh brown, bill baruch. let's check the markets, giving a little bit back. a run for stocks, 139 for the dow, s&p giving back about ten, a fifth after percent, the