oversight, the stocks do better. >> right. >> donald trump loved the energy sector, and they were terrible. biden hates it, and they've been terrific since he was elected. >> jason, thank you. jason trennert, we'll talk to you soon. folks, that does it for us today. it was a lot, but we'll be right back here tomorrow. we've got more to get through too. see you then. "squawk on the street" begins right now. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. final trading day of november. still on pace for the best month since the summer of last year, and more encouraging inflation prints today from the euro zone and the s. october pce, a new cycllow. core pce moderating in october from the previous month's year on year increase. sasforce handily topping the list of premarket gainers on

the s&p. the company raised operating margin gdance and did post an earnings beat. plus elon musk delers a blunt message to advertisers that are currently not advertising or perhaps boycotting his x platform. we're going to look at the eye-opening commen that he made yesterday. let's begin with the markets on this final trading day of novemb as investors digest this latest batch of inflation data, jim, core pce, 0.16 is inine. >> yeah, i mean, i was surprised. the bonds early on this morning were trading pretty much exactly where they are now and that tes mehat this was in line. line, i think, in this environment is actually very positive, and then in the last, like, 20 minutes, itent -- interest rates went up on this, and i'm thinking that,david, i

don't know. it has been a profit taking. >> makes sense to me. there it is. that's not even quite the high at 4.8. we've got to go back farther than that, butt indicates how prices have changed dramatically >> we got to 4.427% this morning on the toen-year. it's the best year for bonds since '85. >> since 1985. when you think about that, if you go back in time to 1985, what you're looking at is a halcyon period of bonds. and if you go back to the rhetoric of one month ago to t series of people who spoke, we were aut to have, david, a repeat of what would happen in the late '90s where every auction determined the direction of the stock market.

in '85, the bonds were something that you thought about periodically because what was happening was just rates continued to go down from the 14% period, and you looked brilliant interest rates just kept going down, down, down, down, down. >> i wasn'thinking about the bonds at all in '85. i'm pretty confident of that. had a few things on my mind. >> madonna? i don't know. "back to the future." >> yeah, may both of those >> i was not. i was thinking about the bonds. >> y were thinking about the bonds. i know. 1985. >> i sold a piece of paper, 14% treasury, to someone in about -- it was actually the biggest sale thatear, and what was extraordinary was that i never had another trade again, because there was no reason to. it was 30-year per, and it was 14%. >> they were, like, thank yoso much, and they were good for 30 years. >> general mills stock. no, you see, the piece of paper we bought, never to be touched

again, and that -- >> that said, jim, you did mention sort of back to the supply-demand concerns that did occupy a lot of our conversation, it's not as though they'vgone away. >> no. >> the budget deficits are still very large. they are still going to need to be met by significant issuance, so it's not ashough this issue -- it may be quiet now, and even looking at the interest costs, they've probably come down by something decent, but it's not insignificant. >> no, and again, th is a halcyon -- maybe this is a halcyon moment within what could be a tsunami of just an overload of treasurys, but carl, the one thing i think the people didn't expect right here isust a series of excellent reports on almost everything, and to go back, i like to go back tohe secondargest retailer in the country, costco. thdeflatn continues in so many different categories. we are at a moment where that's

tualecline, t a slowdown in inflation but an actual decline, and that's what -- that's what jay powell is looking for. he's not happy with the slowdown of inflation. when we list to vice president harrist andrew's ncredible one-man conference, they just keep talng about how we haven't been able to telthe story of -- there's -- because prices have gone up, the working person feels very stretched. this may be the benning of when prices actually go down. we're seeing costco lower prices for things. oddly, hormel yesterday was a disaster. why? becae turkey prices went down so much, they couldn't pass it on. i don't nt to be too granular, but food has crued us. housing has crushed us, ancars have crushed us, and i could say thsame thing about biden. those crushed den. and those have to reverse for biden to have a shot. now, he's -- i mean that. the drug rollbacks aren't going to happen until 2026, and the drug rollbacks are very

significant, but they need to getting one here for the first time when we start seeing the costco numbers, start seeing food numbers. food's finally coming down. >> food, certainly single-family new homes are down double digits year on year. i know nick at the "journal" tweeted the six-month analized core pce is 2.5%. not far from target. six months ago, it was 4.5%. >> and i'm trying to figure out whher powell wants six months of good data or do we just get six months of good data? i still keep hearing, david, the cut. cut in rates. >> what about the cut in rates? >> people still talk about interest rates are going to be cut. >> yeah, although, i mean, not all of them. i'm sitting here -- daly is saying, i'm not thinking about rate cuts at all right now. >> if you're a bull, you don't want tm, because the longer this lasts, where we wait, th's the single best time to buy stocks, waiting. that means something's wrong, so

enjoy this period. >> i know you have been vocal about salesforce. people are talking about a new chapter for the company. >> marc benioff developed a thing called the da cloud and it was one of the clouds, and it turned out to be -- dovetail exactly with what happened with a.i. so, people are doing -- i think you're speaking to bill mcdermott. he does a lot of good service now stuff, but what's happened of acquisitions.c made a series he made mule soft to be able to stitch everything together. he made tab tle to have a dashboard, slack to be able to communicate, and all of these ended up being perfect for a.i. a lot of companies are gravitating to marc to say, how do we use a.i. to build sales? >> can you give us any examples? when benioff says to you during your interview, we did a thousand new data cloud driver for the quarter is a huge einstein, this copilot

technology, 550 ieinstein copilt deals for customers, what are thosdeals? >> i think if you're trying to sell a product, you have to figure out what's the rebuttal to it, why you wouldn't use it, what is -- why it's something that is compelling to a large bank. and you don't real know, but it does. it's much smarter than you. if you go into a bank and say, listen, i've got something whe all of your people who are doing administrative, they can now be switchedo selling, and allhe sellers are better at it, you're hard pressed not to take it because he shows you the data. he shows you the queries. he shows you the answers. and one thing jensen huang, great interview by andrew, said, your people aren't as smart as a.i. what marc benioff sa is, listen, take my product because there isn't anyone at your

company -- pick your 500 smartest people. they're not as smart as what i'm offering you. remember, marc has a compelling selling proposion to begin with. i've used it twice, and both times i got a 30% lift from the same information. now, this would probably give me a 50% lift because i would understand who are the other people -- what's their objection, and then i could -- i don't want -- marc wouldn't say this, but i asked him, i said, listen, you have 9,000 people you had previously last year. i guess you don't even need as many people, and no one ever wants to say that. they say, people are far more productive. >> it's both predictive a.i. and generative a.i. they're using here. >> right. more predictive. >> do you believe that this is going to bring a new growth support or we've accounted for it in this quarter? >> this is the first quarter. particularly because he introduced a lot of stuff at --

when he did dreamforce. i thought this was an amazing quarter for many reasons but maybe the biggest was he was lucky. it didn't have a.i. suddenly, it has a.i., and marc, their numbers you look at here, not earnings per share, this is free cash flow and remaining performance obligations because that's what the five activists want. he so acceded what the activists wanted, it's insane. >> and meanwhile, he's recruiting aggressively, he says, a.i. engineers. >> he says he can't get enough a.i. engineers and he said he was successful, by the way, in getting people from ownership a openai. >> best performing dow stock of the year, above intel and microsoft. let's turn to elon musk speaking out on a few topics at dealbook yesterday, including a few advertisers who departed x over that anti-semitic comment. >> don advertise. >> you don't want them to

advertise? >> no. >> what do you mean? >> if somebody's going to try to blackmail me with advertising, bl blackmail me with money, go [ bleep ] yourself. go [ bleep ] yourself. is that clear? i hope it is. hey, bob, if you're in the audience. >> well, let me ask you, then. >> that's hoi feel about advertising. >> andrew was asked about that moment this morning on the "today" show. he said he was speechless. >> when i taught sales at goldman-sachs, a pretty good firm, a profitable firm of its day, i never went with that kind of getting to no proposition. it was always, david, like, sometimes i thought about reverse psychology. i never thought about spitting on the advertiser, because i thought that would be -- this would beore than spitting, actually. >> elon went on to talk about the fact that, you know, again, that all these advertisers

leading could drastically impact the ability of the company to earn money that had to make, you kn, those who provided the financing for the deal led by morgan stanley not feel great, not to mention obously the other equity investors along with musk, but listen, amazing interview from andrew. elon, to a certain extent,as said this before, where he talks about, i don't care. where he has said, i don't care about your money at all. i'm going to say what i want. that said, you know, why -- it's one of those things where you sort of -- he gets wrapped up emotionally or, you know, why do it in that way? why antagonize in that way? >> there's linda yaccarino call these people and says, listen, we didn't mean to say -- yourself? maybe we meant -- walk it back a little? we hope that your family is -- does poorly? what are you going to say here?

what's yaccarino -- >> she can read her eet. >> i read that tweet. geez, this whole thing t like orwell. >> you think she's wondering why she to the job? >> well, i never speculate on lives.eople do in their personal i don't know my -- i guess i can spend more time with my family if they wanted me. >> listen, that wa-- again, from my perspective, and we'll lk about this a bit later, i thought, you know, the interview on a.i., i thought, was paicularly interesting, and i do want to spend some time later in our program talking about what he had to say there, guys. but you know, this is not new, in a sense, for him, lashing out in aertain way, and it's kind of part of what he does for whatever reason. >> yeah. i mean, i was trying to think, there aren't probably -- there isn't a single other ceo in which you would get to their childhood or the storm in their brain, as they talked about. take a listen to this. >> he has no governor whatsoever.

>> my mind often feels like a very wild storm. i mean, i have a fountain of ideas. i have more ideas than i could possibly execute, so i have no shortage of ideas. innovation is not the problem. execution is the problem. i've got a million ideas. i've got an entire design for an electric super sonic vertical takeoff jet, but i mean, i just -- i just can't do that as well. i have had that for ten years. >> is your storm a happy storm? >> no. >> it's not a happy storm? >> no. >> tell us about that. i think when people try to really understand you, i think there's a lot of this comes from some other place, and i want to talk about that. what do you think that is? >> we need a psychiatrist couch here or something.

i think to some degree, i was born this way, and it was amplified by a difficult childhood, frankly. >> ford, edison, they were like that. >> he's fascinating. he will never stop being fascinating. he continues to be the most consequential businessman on the planet if not one of the most important single people. it's amazing what he has accomplished. it continues to amaze me, and he's always incredible to listen to, in part because he tells you at the beginning of the interview, as he did with andrew, i'm sure, nothing is off limits. so, any time you have an opportunity to talk to him, you want to talk to him because you want to hear what he has to say and he's unfiltered. >> he's unfiltered, and he answers to no one. you see an unfiltered person who answers to absolutely no one who obviously has a tremendous prowess but also has -- look, i don't think it's -- he said it. i mean, this is a brain that people will study for a long time because it's a brain that actually works against itself at the same time. it's not an unusual mental

condition that this man has, and i'm not a doctor, but i was the chief spokesman for the brain foundation. we'll be studying his brain forever. >> do you think an advertiser who doesn't spend -- is that blacail or is that free market capitalism? >> free market capitism. but look, he doesn't care. when you're so rich, it doesn't matter. he can shuit tomorrow. what would it mean if he shuttered it? what would it mean? nothg. >> twitter? i'm sorry, x? >> yeah, x, it would mean nothing. well, it would be $7 billion that was putn by his equity investors would be a zero, and obviously -- >> well, who the heck are they? >> i'm not sure what would be left for the lenders. it would be a significant financial moment, perhaps not as much for him but not great. >> they may get the similar message that the advertisers got, which is okay if you're the richest person. who wants them? they ask for things. they want you to walk their dog. okay? i'll walk the dog. i'm a service -- i did that

stuff. he doesn't want to wal someone's dog. >> while we're talking, guys, i got commen from federal reserve presidenwilliams, the latest fed official to weigh i on the central bank's inflation-fighng eorts. speang at this conference inflation toontinue to pects decline, coming in at 3% for this year, 2.25% next year down he does think interest rates are at or near peak levels but he adds that it may be appropriate to keep policy restrictive for "quite some time." we will watch that. we'll take a break here. take a look at the futures. we'll get to kroger and snow and pvh, meta, disney, and a bunch more. data mostly out of the way, but we'll get pending homes at 1000: and chicago pmi in about half an hour. ♪ the biggest ideas inspire new ones. 30 yea ago, state street created an etf that inspired the world to invest differently.

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wrap up the month of november today. futures looking pretty good here. s&p, still on track to break a three-month losing streak, best month since july of last year. 8.5% gains for the s&p. 7% for the dow. 11% for the nasdaq. we'll get cram'smada" er "d sh and get the opening bell in ten minutes.

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oof let's get to a "madash." u may have seen late yesterday, dney appointing two new board members, incding of morgan stanley.ng c heill remain exetive chairm. he's going to join the disney board, along with another long-time exutive at sky. d desouza stepping down next year, but jim, you also have been following nelson peltz andhat he wants and what he's going to do. we all have en talking about whether mr. peltz d tryon would continue to challenge for a board seat not just for himself but for another member as well. what do you know? >> my understanding is he wants to be on the board and someone se, so he will make a direct challenge. he's going to go right to the shareholders. it is not going to be negotiated. he'sot happy with these two picks, so peltz will lnch the proverbial proxy fight. yeah. so, there it is. again, we can tell you at this point that nelson peltz is going to be seek two sea on that disney board. interesting, because i thought

yesterday, jim, in particular, with the addition of mr. gorman, who's a widely respected executive, that it might quell any hopes that peltz had, and by the way, ts is not going to be easy for him, and again, as i said, frances desouza will be stepping down and you e gorman and darroch join the board. what his arguments are going to be, particularly iger was with andrew yesterday, talking again about many of the strategic things that he sees coming. fully understand why.t quite >> well, i think that nelson peltz believes that the performance of the peoe on the board in general is well below what the s&p, the actual ople -- their record. remember what bill barr says. you are what your record says you are, and ihink he feels these people are not equal to that. now, david, i would point out that i can't -- you can't the

two-faced. i thought mr. gorman did an amazing job at morgan stanley. maybe that doesn't translate, but i can sait to nelson and say it to you. this was a very strong appointment. >> hs a -- he's a serious guy. i ppen to know him fairly well. you do too forany years. he's not -- >> at the same time, the challenge is there. look, david, remember boeing? well, this was the other big mistake i made. i bought it here, and you know what? i look like the last three marvel characters, whoever the hell they were. >> or the last three marvel movies in terms of their box office. >> i don't look like scarlett johansson. >> no. >> i did see her once at the gym. i'll leave it at that. >> she's a very attractive woman. we've got an opening bell about five minutes from now. don't forget, you can listen to us, watch us anywhere on the "squawk on the street: opening bell" podct. 'rba aerhis.as

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. well, jim, you can see these numbers. these are monster numbers, and it's a monster year. it's been incredible at

salesforce, and the transformation has been one of the biggest i've ever seen in software. i mean, the quarter, you can see, these numbers, few companies have ever delivered numbers and swear at this size and scale and not just in revenue but in cash flow as well, exactly like you're saying. this cash flow number, i think, is up 1,000% year over year. it's incredible. >> that's benioff on with jim last night talking about this monster year. >> yeah, well, people often look at beat raise and during the summer, marc had a beat but did not raise enough and the stock went to $224 and came back to $200. this time, what he did was double what the street was looking for and $4 billion more than what the street was looking for, for performance, and the reason why this performance number basically is the cash that they have, so i don't think this can be rolled back. this was a quarter of huge cash generation, and david, enterprise software growing at this pace, with this size,

highly unusual. highly unusual. right product, right time. >> yeah. i can remember that august quarter back in covid times where it took off, remember? >> absolutely. i got to tell you, frank slootman -- because slootman is wait a second, maybe i'm only g, getting carried away. why don't you rent the cloud with analytics before you get -- which has a.i. capacity -- before you go nuts? because he and jensen huang had a bit of a contretemp. jensen is a benign monopolist. that's the new"the n yorker" speaking. maybe it's better to rent than own, kind of like a home. maybe it's better to rent than own right now. i think that's the proposition of slootman, which is why that stock will probably go even higher than salesforce's stock

today. >> by the way, the big board today, it's restaurant danielle and the dinex group. daniel on the balcony doing the honors. >> do you ever go back in the kitchen? >> yes, is that an amazing energy feat? at the nasdaq, it's agape. your point about software has been right on and people are assembling the lists of things that have gone right from now and microsoft to hpe to workday to okta to snow, right? >> i think these are -- the customer is trying to what to do with it. they know they have to have it. they want to be able to -- the one thing i would tell you is that the use case -- the best use case in the world and why salesforce is, i would say, maybe a quarter of the gain in salesforce was they landed aws to help them, and aws is widely regarded as being the most sophisticated cloud company in the world, and they need marc's help. they have been working together

for years. i think behind the scenes, people don't realize that a lot of marc's success with salesforce is his alliance with aws, and that was the marquee client that you could ever have. speaking of marquee clients that you may be using, i'm not sure if you gentlemen are following okta. they had a breach. when they first had it, they did not realize the depth of it. they came out yesterday and said the breach is much worse than they thought. all customer supported individuals have been compromised. >> read that again. >> all customer support individuals have been compromised. we have determined that the threat actor ran and downloaded a report that contained the names and email addresses of all okta customer support system users. suboptimal. >> suboptimal. we've got full compromising. not even partial. >> full. i mean, look, i think todd mckinnon is terrific, but you can use this information as they told you to target okta customers via phishing or social

engineering tactics, and social engineering tactics, crowdstrike will tell you, this is the classic, hey, i got a big fish on the line, he wants, right now, he wants to be approved for a credit line of $20,000, you got to give it to me, and because -- and remember me because i went to school with you, i went to penn with you and we were thatfraternity brothers. >> you've been fully compromised. you don't want to hear that. >> were the advertisers fully compromised? >> i don't know. generate generative a.i., by the way, is behind a lot more phishing. it's enabled it to ramp up enormously. >> i was thinking about countering spdr group. >> you got enough on your plate. >> no, david -- >> sort of a ransomware hacker >> i'm going to hack into the niners' game plan for this weekend, which is worth a fortune. >> i wanted to turn to nvidia, which obviously is a part of this conversation as you might expect anyway given any

conversation about a.i. jensen did join andrew yesterday during the morning. it was during our show. but i thought when he discussed, jim, in particular sort of the way that everything about the computer has fundamentally changed, it was at the very end. i don't know if we have time for it. if we do, we can run it perhaps. let's take a listen, becauset did explain in many ways what this "new yorker" article also goes into in terms of the opportunity for nvidia. take a listen. >> computer has fundamentally changed, and so everything about networking, to the switching, to the way computers are designed to the chips and sell, all of the software that sits on top of it and the methodology tha pulls it all together, it's a big deal because it's a complete reinvention of the computer industry. and now we have a trillion dollars worth of datacenters in the world. all of that's going to get retooled. that's the amazing thing. we've got -- we're in the beginning of a brand-new generation of computing. it hasn't been reinvented in 60 years.

>> jim, i know it's something you discussed. >> endlessly. he kept showing it to me and no one cared. >> it was so clear there, i think, in terms of the opportunity. >> that was great. we're not going to be typing things, you know -- think about it. we type in, and it hits some microsoft thing, like, intel -- he thinks intel is ridiculous. it's like when i spoke, he said, just speak to it, for heaven's sake. i said, just speak? he said, just speak to it. i said, i want a seascape. boom. there was no typing. there was no -- you're constrained only, as frank slootman said, only by your own imagination. david, you can -- you can sit into the globe theater. you can be 1580. you can do whatever you want. >> you can. >> whatever you want. >> now, jensen is not one of those who seems overly concerned with the -- with generative a.i. and/or the advancement of a.i. threatening mankind. >> i think there's a little facetious notion in that piece, david, that was not picked up. the nuance was not picked up.

>> but unlike, of course, elon musk, who, you know, i've talked to about it, who we've heard from in the past, and who yesterday, i thought, was as concerning as ever when it came to the subject of a.i., whether it was what actually happened in openai and his concerns there about what mr. altman really -- what the reasons were, which we still don't know, behind his very brief departure from and firing from the company to which he has returned now. but take a listen to musk. when he talks about that a.i. danger, he keeps upping the ante. >> it is more dangerous than nuclear bombs, which we regulate nuclear bombs. you can't just go make a nuclear bomb in your backyard. i think we should have some kind of regulation with a.i. now, this tends, of course, the a.i. accelerationists to get up in arms because they think a.i. is sort of heaven, basally. >> i'vstruggled to sleep at

night because of a.i. danger. but now i've come to a fatalistic resignation on a.i., he went on to say. >> jensen does talk in "the new yorker" piece about it can create. he said that -- and i know that when -- direly opposite views. couldn't be more opposite views. practical nature of a.i. >> would be great to have the two ofhem in conversation to really try to get to the bottom of what his -- what musk's ultimate fears are and why jensen doesn't share them. >> jensen does come in peace, but if you look at the last conference call when musk admitted that he could not make the chips and he had to use jensen's chips, it was once again the triumph of engineering that is -- that i think that musk recognizes, but the dangers, david, you've articulated them well. i don't share them, but maybe i've been too influenced by jensen, whom i study endlessly.

how could i not? totally different figure from musk. these are titans of our time. they clearly are. jensen is not someone who wants to alarm people. he's not dramatic whatsoever. he's very self-deprecating. he is the total polar opposite of elon musk. total. >> musk definitely talked a bit about the cybertruck, the impact that unions would have, unionization would have on the shop, called it a peasants and kings sort of dynamic. we did get this new guidance out of ford and got some numbers on the impact of the strike. >> they were hurt, yes, more than mary barra -- at first, the stock was up. that made no sense. it should be down a little bit more. i do think that ford's feeling on the cybertruck -- obviously, the f-150 is the money shot there. it's kind of a lamborghini. you really -- it's for fan boys.

not saying it won't sell well. is saying it's so hard to make because the stainless steel is so hard to use as a fabrication technique, but they're not denying there will be people who buy it. they're saying it is not a pickup. >> what do you make of this letter from the auto dealers to the president saying that unsold evs are piling up despite all the incentives, despite the discounts? obviously, they're legacy dealers trying to preserve the i.c.e. business. >> well, good luck. this man joined the picket line that hurt profits immensely at ford. so, i don't think he's going to -- don't cry for me, argentina, although argentina has become a very strange place, david. new ceo of argentina. i'm calling him a argentina. >> argentina is in a -- yeah, it's in transition mode. >> in transition. >> yes. not sure to what. >> aren't you a diplomat? >> by the way, it needs something positive. 148% inflation is no sustainable either. >> that's a country that seems to have recognized that drastic

action is needed. >> when was it the fifth largest economy in the world? after world war -- >> well, it did -- yeah. world war i. rivalled us. >> not that long ago. >> lot of people emigrated there versus u.s. bit of a push. >> want to hit deals and potential deals. let's start off with abbvie and this deal to buy immunogen, an ovarian cancer therapy. it received positive trial data back in may. that sent stock up dramatically. it was a $4 stock that went to $14, $15, and now, today, abbvie says, we'll pay you $31.26. that's about a $10 billion deal. so, there's some signs of m&a. it's funny because we had tyler dixon from citi saying health care, you know, and we've seen another deal i'm going to talk about in a minute, but here -- >> that was $5 stock in may because people had lost faith after so many times they told us they had it. by the way, very promotional at

one point, which was very -- >> you had them on a good deal on "mad money," right? immunogen. >> yeah. and that was my mistake, because they made, i think, promises for those of us who have lost relatives of cancer that i felt were unfair. but they have ovarian, which is just horrendous. good for them. >> well, abbvie is a believer, jim. >> they need something, abbvie. >> premium, as you see, over where the stock was. and that's, again, let's go back to the spring when the stock was far, far lower, but then moved up dramatically on that positive trial data. they do say, as you saw, accretive to eps in 2027. i want to move on. >> if they've got it, it's unbelievable. i don't want to -- this is so needed. so, let's -- good for them. >> i want to move on to a deal that was reported in the "wall street journal" yesterday as a possibility and that is cigna and humana. "the journal" did not actually

specify structure of any kind, but they did indicate cash and stock transaction that many assume would involve cigna being the larger of the two buying humana. spoke to a number of large shareholders, well, at least a couple, and they are pushing back significantly on the idea that cigna should do this deal, in part for a number of reasons. one, it trades at ten times earnings versus the 16 times that humana trades at, so it would be diluted. if you own cigna, you think it's a cheap stock, you don't want them issuing undervalued shares to get a deal done that is going to be dilutive. they worry about the potential cash component of any transaction in part because the rating agencies will get involved here and so they would seem to be limited in terms of how much cash they can actually put into a deal before they get to sort of a limit where the rating agencies would downgrade them, perhaps as much as 46% debt to cap. that would get you maybe to a 325 and then 1.18 shares. that's speculation on the part

of a risk arp. i'm not hearing that from deal makers. i'm not hearing anything from the actual people behind this deal. what i am hearing is from cigna shareholders who are saying, david cordani, what are you thinking here? why now? not to mention a huge regulatory review that will come your way. it's not because of medicare advantage. they're probably easily able to d divest that. it's the pbm of both that this will get a tough review if not an actual court challenge from the antitrust regulators, so the question seems to be, you're going to buy this thing using your own stock that we think is undervalued for a dilutive deal that's going to require, what, two years of fights? and by the way, you went through this last time when you were in there for humana originally, pulled back, and then you had anthem, which you didn't complete, and aetna obviously

didn't complete its deal for humana, and you bought express scripts, which everybody said was final. as you see the response in the stock market has been quite negative, and so you do wonder if you're a humana shareholder taking this, what you're getting and whether or not they're going to be able to put together a deal at a significant premium that you want to deal with. shareholders who are opposed have told me, listen, we're not just going to vote against, but we might even choose to work against. >> my travel trust owns it. >> in terms of taking a shot at the board if we have to if cigna and cordani move ahead. haven't heard from the deal makers. i'm sharing the thoughts of a couple of shareholders who have been in the name for a long time and know it quite well. >> mr. broussard is retiring, the ceo, and i think he has a chance right now to clear the record and stop this lunacy. this is one of the most ill-advised deals i've ever heard. >> you think it's ill-advised on the humana side? >> yes. >> why? >> it's never going to be

approved and it's going to take the eye off a company that's trying so hard to do a good medical advantage. it's a hands-on company. when you're in this company, you're ia real hunt for customers, andou got to do everything, and now you're going and losing to lina khan.efending i have never embraced that woman's view. i hope she shuts this thing down in a nanosecond. >> there's a lot of shareholders who don't want it to get to that point. by the way, the argument of some shareholders is, fine, have humana buy cigna, lever up. at lst it will be accretive right off the bat or have an m.o.e. during which companies buy back stock so at least you got two companies that have been able to take advantage of the year or years that have gone by. not a great reception here so far. >> i use humana. and i happily -- i'm so thrilled to be able to pay more because of this deal. it's exactly what powell wants. don't we want to pay more as

customers? >> well, again, it's not about medicare advantage, because they have a small business at ci and they would likely sell it or divest it. of course, the last time they tried to do that, remember, with -- aetna had a bad divestiture partner when it was trying to get together with humana. >> mr. broussard is going to see the light of day and take it back. >> we have yet to hear from eith company, carl, in terms of saying anything about this report in "the journal" yesterday. >> chicago pmi, 55.8jim. we were looking r 46. that's one reason we lost some steam here les get to rick santelli. >> yes, it's5.8, you're right, carl. that is huge surprise. we were expecting the 15th consecutive number bel 50. we had 14 in a row. this is a real outlier. 55.8 isn only the first number above 50 going all the way back to august of last year, it's the highest since may of lasyear.

and you can see yields moving higher, hitting 4.35% in a ten-yearwhich doesn't seem high unless you started an intraday low yesterday of 4.25%. they're digesting this number and to put a face on all the data today, continuing claims popped uabove 1.9 million, but that was seasonally adjusted. that moved up 86,000. many traders are talking about nonseasonally adjusted continuing claims, they were down 97,000, so a lot of conflicting signals here. but chicagpmi, stratospheric ad for november. back to you, carl. >> thank you, rick. apologies for stepping on your toes a bit. thank you for that. meanwhile, jim, we got a headline that opec plus has aged on a million barrel per y cut. we got to $79.60 this morning. >> suddenly, some -- not in the script nbers visit us. or someone could say we have

incredible growth with declining inflation. i know that crude is actually gointhe wrong way right now. david, there's this scenario which just says, listen, if you could get growth like this with very little inflation, you're chinese expansion.reat period of that's pretty good. >> it is pretty good. china wishes it was anything like that now, given its own problems iits economy. >> well, i don't know. this doesn't fit the script. >> no, it esn't fit the script. it doesn't. look at that. now we g -- yeah. obviously, the market's turned from what appeared to be a strong open. >> i think the only things we missed, jim. we touched on snow. didn't do kroger, cutting the sales guide. pvh, wow. not great either >> no, tommy hilfiger is not selling that well. these are numbers that you just don't want to see.

i mean, ralph lauren had such lulu has incredibly great numbers and i wavery surprised that pvh could be as bad as it was. >> it turned around premarket. >> how the hell -- how could it be up on those numbers? well, hey. dtcf 6. >> i guess if they had guided up, who ows? this is like foot locker. they'ronly going to have down a comps. i guess that's good. >> on foot locker, tullsy goes to 31 today. >> we are going to see some people cover theirhorts on these things and these analysts, so many downgraded to sell, but pvh, how much of tt is -- how much is rl up? geez. rl is much better. that's quite -- what can i say? there's -- that wasn't in the script either. buy ralph lauren at $129 over pvh at $95, okay? >> the other thing, jim, was yestery, people looked at the qqqs, 52-week high, ended up

closing 1% below that intraday high, netive, thinking maybe this would be a place where you would start to see some, as you said earlier, profit taking, but this time on tech. >> i think that -- i'm looking for money to come out of tech and go to the rest of the mark, particularly theussell 2000. that maybe 2000. that is -- maybe happens. geez. let's say pvh is a smaller c stock getting the money in a otlocker, gap stores. these are all places that, frankly, the money was just pouring out, same numbers we're getting now, and, obviously, these companies are not big cap it's not -- you may not feel it. the's enough negatives in the large cap tech to see money come out of tre, bulook, this is very contrary day, and yesterday, was led by financials and by small cap. >> yeah. by the way, tonight, do not miss a cnbc special "charlie munger, a life of wit and sdom." becky quick's final interview

with warren buffet's colleague for many years. as we go to break, yields are elevated. two-year back to 4.7, 10-year back to 4.35 on the heels of that very hot chicago pmi number. pending homes in about 10 minutes.

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order the weathertech gift card instantly for the perfect gift at weathertech.com. let's get to jim and stop trading. >> the winner and champion for cyber security may be palo alto. it traded today at $100 billion company and be when the company was 50 said that was going to happen, about a month ago. he had unbelievable numbers and people didn't understand. let's go away from billings and do remaining performance obligation, and then everyone poo-pooed it. crowdstrike did it and salesforce and that is the way people are value things and the

stock is 40 straight points. >> does this software momentum mean something for oracle when they post? >> i think they have to solve the problem of why they bought or went up against a company called epic in the health care system, which is very hard. i think they can talk about how they have more -- they have a lot of -- they bought into jensen and they have a lot of the most -- let's say hard to procure graphics cards. they can have a good run. the last quarter was a disaster. 123 went to 103. they know they have to address some of these problems. >> how about tonig? >> okay. tonight i've got lyft. lyft has a pulse. >> really? >> yeah. >> what? okay. >> i believe you. >> i guess -- you know, paddles. no. it's doing okay. >> pulse? >> interesting show today. >> it's an $11 stock. look at that. >> there you go. >> $4.5 billion market cap.

>> way to go. >> i would not bottom fish with okta here. social engineering. i get on the phone with you, i know the name of your dog, give me every single piece of information -- >> get out immediately. >> leave. >> no. it's tough. >> i love toddinnon, but that release today was sober. >> we'll see you tonight, jim. >> thank you. >> as you said, interesting week wrapping up here in the next couple days. meantime pending homes after the break with the dow up almost 300. aosgsncagn its oe ai uplmt 5. (vo) this is more than just a building. it's billion-dollar views. perfectly located. an inspiration. and enough space to start an empire.

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good thursday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and david faber, live for you as always from post nine of the new york stock exchange. take a look at stocks this morning. they were in a good mood really since the premarket and then the data added a little bit of fuel. at least the dow is higher by 270 points, s&p by 3, but tech is lagging today, nasdaq under pressure down .2%. show you what's happening with

bonds. it has been part of the story the lower yields in the bond market rally. they're firm, but the 10-year note yield still in the 4.3 range off the 5% high where we were. the 2-year yield 4.7%. little bit of selling today, but we had a big rally into the data. we're 30 minutes into the trading session, here are three big movers we're watching. okta gets downgraded by t.d., wells fargo and key bank, beating system for the quarter but facing growing fallout after the company revealed more details on a cyber security attack that happened back in september saying hackers had stolen e-mails and full names of all support users. salesforce on the other hand top gainer in the dow and s&p after strong results there. more on those numbers later this hour. stock is surging. we're watching kroger today off the lows of the morning but in the red post results, cutting its annual sales forecast amid what ceo rodney mcmullen calls a, quote, challenged operating environment and he's going to

join us next hour on the show to discuss. >> got some nding home sales data out a couplmoments ago. diana olick has it. y, diana >> pendi home sales dropd 1.5% in october nth to month a little better than expected but the lowest level since this index started in 2001. ev worse than during the great recession. sales down 8.5% from october of last year. now this index measures signed contracts on existing homes so peop out shopping in october, which was when mortgage rates shot higher, briefly going over 8% on the 30-year fixed. rates have pulled back to 7.3. the realtors continue to say it's tthe just high rates, but still very low supply of homes for sale. pending sales fell except in the northeast, fell most steeply in the west where homes are priciest. sales were down everywhere compared wh a ar ago and just on pric, they'rnot easing up at all e gains have been accelerating

due to tig suppland strong dema. sales of homes priced ove $750,000 he been increasing simply because there's more supply othe higher end of the rket. one more note on that worse since the great ression, the difference here is that sales wly built homes are actual doing very well. so not the same as bk then. >> de tion is there any evidence that the better mortgage rates in the last few weeks is having an impact onhe housing nashgts a g-- market in good way? >> not really. we're still at 7.3%. the affordability is not getting much of a help. what we need is more supply. >> diana olick, thank you very much. down 8.5% on pending home sales. let's talk about some ofhe other data we got today because it's all important, and it all sets us up for an upcoming fed meeting. e most important, of course, pce. this is the consumer price

deflator, what the fed pays very close attention to, and on the headline number, look, smallest since march 2021. sigh of relief. look at the core. also a really good sign. came in line 0.2% increasen the month, year over year, decelerated to 3.5% core pce. we're not at the 2% target but we're getting there. the trend is iplace, it is coming down. headline inflaon as i mentioned was flat. it's definitely an inflation update, guys, that is going to appease both investors who are rooting and expecting for inflation to come down ttarget and monetary policy makers, especially those latelthat have been very vocal, like governoraller who want to see this inflation progress happening and are content, bostic as well, with what they've done so far as far as monetary policy tightening. >> getting lost in the sffle is continuing claims. 1.92 million.

that's leading some to believe that lor market is turning not on a initial basis, but if you are out of work, it's getting harder to get rehired, and that is one thing that market is trying to sniff out better. >> that's the hiest level of people who are still on unemployment claims since november 2021. wee been watching this trend, and it has incd higher. it's bad news if you're out of work, obviously, but the fed expected to see some softness in the labor market, and we kind of had to see it to get the inflation story back down. we are seeing increasing evidence of it, and i think continuing claims is one place they can point to say see, labor market is cooling. there's nothing in the data today, though, that suggests that we're not headed for a soft landing yet, right that's going to hinge on the consumer and it's going to hinge on theob market but we're seeing signs of weakness but not seeing anything to disrupt the story get into recession territory. loretta mester out yesterday, a centrist on the fed, i think evenhough she's retiring next june, cleveland fed president,

the quote i pulled out and i think it backs the data today, monetary policy in a good place for policy makers to assess incoming information on the economy and financial conditions and judge whether policy is well calibrated to ensure that inflation isn a timely path to 2%. translation from all that fed speak, think we've done enough. >> and not just u.s. we got eurone core 3.6, prior 4.2, right. this is happening all around the world. >> this is really good news for the eurozone inflation numbers coming down. also to target. so the -- i would say the news on the economy today is quite good. look at the 2.4% number on inflation and eurozone. that was a lotetter than expected, and then just to add it, anecdotes from beige bo, which you know i always love and pay very close attention to, overall, they look at all the districts and get all the color pricing and labor and demand. here's what i pulled out on inflation, which is key. price increas largely moderated across the districts though prices remain elevated.

freight and shipping cos decreased for many, while the cost of various food products increased. several noted costs for construction inputs like steel and lumber have stabilized or declined. not all the way back down, not all the way there, but you didn't see comments like that in the beige bookeally ever in the last few -- i mean not ever, bunt in the last year or so. it's been all about elevated price and creasing pricing pressures. so that will be good for fed policy makers to see, too, in >> would you have expected that the 10-year would be giving up some yield today? >> it's had a big rally. i mean it's hard to game out. we came all the way down from above 5%. >> yeah. weit lows very recently yesterday. even today we're actually up within the session. what market expected which is that inflation will continue to come down. i wouldn't have been surprised toee it rally today, but i'm t surprised to see it selloff. it's not a big selloff and not

like expectations are moving up for a rate hike or selloff or anything like that. >> right. >> so i think that soft landing fed on hold narrative is in play, and the questionrom here is, when do they cut do they cut in the first half, first quarter, like bill ackman do they cut in may as the market is expecting? do they wait until the later part of the year as the fed is expecting? the exciting part of the next fed meeting is not what theyo, they're expected to do nothing, it's the forecast because they get to have a flu dot plot which is an easy way to tell the market of when they think they're going to cut. so it's thathole like fed versus the market on when the first cut happens. >> they have a great line and say, if in order for core pce to hit the q4 sep you have to have two more prints of 0.5 which is hard to envision. it's definely possible -- >> they overestimated inflation. >>xactly. you might see some forecasts come down. >> their forecasts will come down for that, no question about it, and their forecasts for growth will go up because nobody

expected growth to be this strong for this year. i think it's the dots on where they expect interest rates to go which will be important given that market is expecting 100 basis points of cuts next year and that's why it's not surprising to see a selloff in bonds because it's already been a rally predicated on what the fed will do next. market is already feeling pretty good about tt. >> meantime stocks are on pace for the best month since july of last year. yields hitting lowest since september. the setup for december. fundstrat head of relesearch to lee is with . your line has been zigzag lately, at least going into year end, rights? >> yes. >> meaning what? >> well, i think as sara was discussing, the market is hyper focused, especially interest rates, on inflation rsus growth data. i think it's going to be kind of conflicting. today was a good inflation print. next week could be strong jobs because the uaw rehires. we don't know what november cpi

looks like. i ink the market will zig and zag unl the fomc and that's when i think we see there's so dovish pivot.g room to make a inflation's dramatically under shoong, and higher for longer suspect really what the fed talk is anymore. i think we get a dovish nversation and that fuels a year-end rally. >> so you're buyer on any dips, as basically what you've been saying. >> yes. >> you've got a great catalog of what you call granny shot, no-brainer basically decisions. is that list changing, evolving somehow? >> we rebalance everquarter. but we also do something every month called super grannies, we do a webinar with our client appsnd highlighted last month, crm, salesforce, and it's having a good day today. >> yes. >> but year to date it's over 25%. each of the last five years it's basis points. ket by almost 400 >> do you expect the chop to get

tougher after the new year? >> you know, i think december tells us what 2024 kind of looks like. i think it's choppy this morning, next year is going to be a tough year for investors because they're going to get whip-sawed. for the path of the markets we're going to publish our outlook on december 7th. i was going to say, is tom lee not bullish? what's happening? >> you'll have to find out. i'm going to take a guess. you're going to stay bullish. >> it's -- there's only two option, right, a or b. >> that's true. >> when s the last time you were beash. >> first half of '22 we said would be treacherous and we were bearisthere and in august we said the markets would be tough this year and the next two monthsarkets were tough. generally it's been a rising market, but you got to be a little tactical, and i would say, you know, in retrospect people have been holding on to a bearish view too long and anchored to a bearish view that's been expeive this year to have a bearh view. >> give you an example, market is up 20% this year.

retail equity flows to the sck market are negative $240 billion. it's never happened. how would people -- >> what explains that then? >> well, it shows you that stocks recalibrate off interest rates and on expected monetary policy, but flows generally is a tailwind. it was a huge headwindhis year. well, when things align what can markets do? it can be powerful. this is a year where it showed most people got it wrong. >> do you think that when it comes time for rate cuts, it is a sign of impending danger, or can it be a more gradual, benign out earlier in the week?ard laid >> waller's view will prevail if it's transitory. that's what it's looking like. we're seeing a huge tee sell rags of core inflation. if you took out nursing services this mth, core was printing 0.7. it would almost rod to zero on

co. nothing is happening to drive this down. it's tt goods, which was tting services like insurance premiums, starting to disappear and now we're getting back to towards 2%. >> the only cautionary note i'm getting lately is ta holiday spend on the credit card spend basis, given the core goods are basically fl. >> yeah. >> is pretty solid and that you couple that with whatever chicago pmi is telling us and whatever opec is doing, you mit get a little bounce, no? >> you could. theris bonuses paid for uaw workers coming back, so you might get like a december sort of spending lift, but it's all a he fake. i think ultimately, i don't rising and i don't think wages, demands are growing, and i mean, to get to a wage inflation spiral or an inflation spiral you need something deanchored and it's pretty well anchored. >> didn't mention the personal income and spendg numbers which were both very csensus and benign. tom, is the bigg risk here

that inflation flares and remains sticky or that growth disappoints and heads for a bigger downturn? i think a growth scare is more probable. high interest rates are hitting consumer. auto dealer inventory piling up and there will be huge discounts the. people are paying a lot to buy a car, buy a house, for credit cards. which is monetary policy, so in a way, it will probably create easier fix. s, but that's an >> growth scares and then go to cuts? >> i don't know. we'll have to se we'll have to see how the market perceives everything, sara. >> don't want to give away your forecast? it's hard to knohow markets interpret information, right. that's sometimes what matters more. >> tomlook forward to the update on the 7th. >> yes. >> we'll talk to you befor then. >> yeah. >> tom l, thanks. >> thanks. as we head to break our road map for the rest of the hour. salesforce shares are on track

for their highest close since january 2022. we're going to break down the numbers with one analyst who raised his price target on that stock. >> oil prices are higher on headlines opec plus agreed to cut production by another million barrels day. crude down for the month and year. we'll talk about where prices may go from here. >> and elon musk makg headlines at dealbook yesterday as he gets ready to roll out the cyber truck today. what's at ste r slwh rurn.fotea en wab. bringing you an elevated experience, tailor-made for trader minds. 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 ju for traders. all so you can trade brilliantly.

i think in the quarter, jim, actually we did a thousandew data cloud customers. isn't that amazing? add to that another huge driver for the quarter is our einstein co-pilot technology. this is also azing where we did 550 einsin gpp co-pilot deals for customers. these are customers putting ai to use, and that is what i think istarting to drive our growth in the exciting new ways. >> the always enthusiastic mark bennyoff on "mad money" with jim cramer talking about ai driving growth. salesforce shares soaring on the back of the latest results and outlook. best stock in the dow and s&p today. let's bring in brent, jefferys tech analyst for more, brent has a buy rating on salesforce, raised his price target to 300 from 275. why is this coming as such a big surprise, these numbers? >> i don't think it's a huge

surprise. i think software has been lagging other sectors like semis and the internet and we're seeing a catch-up trade. we're seeing seasonality and some of the thaw of some of the software spend we saw post the interest rate hikes, so i don't think it's a super surprise. i think that ultimately the backlog numbers and the large deals that they're signing is the surprise and as they highlight on the call they don't want to call it a comeback or call it a back to normal. they were careful about saying that. i think ultimately our thesis has been that semis will be the first wave of ai and software will carry us in '24 as the products come out and you start to monetize. so you want to be ahead of that as an investor and we think investors are now starting to look at the rotation, perhaps, of some of the semi money they made in software as well as many other factors. the rest of the software

industry is getting softer. you saw numbers from adobe, microsoft, workday. this isn't just a one off. this is the industry and all the platform leaders are doing very well right now. >> the setup that was bearish you think is leading to the response today. was ai the swing factor here? >> ai was not the swing factor. i think the setup, the stock had a huge move, right. we're up massively in all these large cap names. i think ultimately the tone was less bullish, there's no real big product cycle. they're executing well on their multicloud strategy and getting these big deals signed. i'm in vegas for amazon's conference, and the belief is they signed a big account this quarter, so i think you're seeing several factors that are leaning to this and a lot of investors have been underweight software, not believing that the turn will come until next year.

there are several factors leading to this and good execution on salesforce's behalf from their field. >> so, you know, to the extent we're focused on '24 and the software companies to use predicative ai and generative ai to fuel their businesses and product offerings, we're there now, we're in that moment at this point, brent? >> i think we're at a moment and i've been very cautious about this, that ai today is all hype in terms of the revenue reality and hits in '24. we're starting to see early signs of that. we had a dinner last night with many experts that work in the software industry and what they're seeing is more hype than the clients asking. but the clients are getting prepared. they're getting prepared. the analogy is it isn't here but they're getting the suntan lotion and towels ready to go and waiting on the beach.

they don't know where the wave is going to go. we think that is coming in '24. look at microsoft, less than 50% of their ai products are even out. next year they're 100% of their ai products are out. then enterprise adoption is slow. we'll see the beginning of that wave, revenue wave, in '24 and then into '25. all the hype is here. the hype is beyond anything i've seen covering tech for 20 years, and i believe in it, but what i don't believe is that it's not having an impact right now. that will be happening next year. we're advocating you want to be ahead of that as that builds through '24 into '25. >> who is the biggest competitor to the einstein gpt co-pilot gaining traction and big accounts? >> microsoft, no question. i was at the conference. you could walk up to a booth and say, client e-mails me inside outlook you can see is that a client, integrate into salesforce.com system or to

microsoft's system so the sales co-pilot for microsoft i'm bullish. it's exciting. it was one of the first ones out at microsoft. we think that ultimately there's a lot of customers that are microsoft and salesforce.com that could skip some of the ai from salesforce and go directly to microsoft and there's direct interaction between the product. there's one to keep an eye on from that side. obviously, an experienced cloud and commerce adobe will be a big competitor as they have been for long time in e-commerce. >> can margin expansion continue as competition heats up for these products? >> they are the worst performing operating margin story in large cap software, period. they are out of shape. they're getting back into shape, and ultimately look at a margin of 30 and they're saying 30% plus target, should be 40.

adobe in the mid-40s. oracle low 40s. microsoft, you go through the list. ey're all higher, so they're very capable, and they're doing a great job of getting their act >> right.on the margin. like the activists wanted them to over a year ago. they were pushing for that. yeah. >> it's happening. thank you. appreciate you joining us the back of these results. eaking of salesforce, check out the big gainers on the s&p today. it is number one, al number one on the year to date list of the dow 30. off the opening highs, but still up 7% plus. gooil services following suit including phillips, halliburton, devin. more on the movers you might veisd. stay with us.

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e stre." i'm dominic chu. maets are mixed in early acti witnessing in consumer reted sects and energy is an outside peormer the upside thanks in largpart to high oil prices. trers trng thandicap the likelihood ooil supputs from opec and rtner untrie

in the coming months. every stock in the s&p energ seor is positive on the day so far led by gns imarath petrolm and target resources, bahughes andiamondck energy as well as u can see now e l majors like exxonmobil a chevron a under performing on the day, up about 1 to 2 s. benchrkest texas intermiate pces ve mucin fos, currently tding bk price a rling basis.vage at level currely sits, by the waat $78.14. keep an eye on that level in the coming days. i will send it back down to you folks at the new york ock exchange. >> tnk you. dom chu. when we come back we have the playbook for energy as dom mentioned, it is leading today into 2024 later this hour. elon musk making headlines at yesterday's dealbook summit in new york. highlighting and the big unveil of the cyber truck today. stay with us.

. welcome back to "squawk on the street." i'm courtney reagan with your cnbc news update. israel and hamas agreed to extend the cease-fire agreement another day during late night negotiations. the truce is fragile. rael is committed to returning to war after the deal ends and reiterated sentiment this morning after two hamas gunmen opened fire at a jerusalem bus stop during rush hour. three people were killed and at least eight more people were injured. the shooters were killed at the scene. the biden administration and the environmental protection agency are proposing stricr rules to reduce lead in drinking water. under the plan most u.s. citys would have to replace their lead

water pipes-ten years. the agency said the rus would prevent crises like the ones in flint, michigan. google agreed to pay canadian publishers for their news content. the move shows gooe is backing down from the threat it made to block all news content produced in thicountry on its platforms. back over to you, david. >> thank you. let's give you an update on disney and potential fight over its board of directors with nelson peltz. earlier jim cramer and i reported, in fact, that we would be hearing from trian most likely in terms of it trying to get board seats both nelson peltz and another yet to be named director. we do have a stement now from trian in which it basically says that the board turned down its recent request for representation that included nelson peltz and, therefore, since they gave sney the opportunity to prove it could

rit the ship last february, remember, chris peltz has been there prior and then stopped a proxy fight on february 9 during our interview with bob ir or right after i should say, they point out that since then, they've lost $70 billion of shares overall and under performed proxy peers, and they go on to say that they still believe even with the addition of james gorman, the ceo of morgan stanley, soon to be executive chair there, and jeremy deroche, that the company still needs a refresh on its board and that investor confidence remains low and key strategic questions loom. that's sort of the corof the argument being mad sara, by nelson peltz at this point. we should point out they talk about opening roughly $3 billion worth of stock much of that stock is an ownership stake a

gentleman who sold to diey and continues to own a great deal of stock so that's wrapped up here in the position that trian controls and again, will be potentially going at the board or to shareholders trying to get on the board again. disney has had no interest. they have given him the opportunity and said we're not interested. bob igeresterday was asked by andrewoss sorkin about peltz. >> there's a qualification level required to sit on the disney board and the board will make -- not me -- the board makes decisions about who is qualified and who isn't qualified to be on the board and if nelson officially requests a board seat, i'm sure the board will go through a process to determine whether he is -- whether he should have a role on the board or not. it's not like we've got a number of em it i seats, come on in, join the disney board, have fun, have at it, help us make

sequels. >> interestingly, of course, only a couple of hours after that interview we did learn about mr. gorman and mr. darroche's appointment to the board. d'souza will be stepping off. >> the end of the statement trian intends to take our case for change directly to shareholders. >> it's a proxy fight. >> a fight. >> i wonder if disney named the board members to calm down peltz and the statement says it's better than the status quo but not good enough. >> didn't hurt. we have another potential activist in there as well, we pointed out in value act. there had been some thought that perhaps there would be a board seat there that would act to ameliorate the concerns penalties has. i'm waiting for peltz to make his case. it's different what we've been hearing from bob iger who has been engaged for the last year in trying to turn the company, the strategic fortunes of the company around in any number of

other areas. what is it he's not seeing he would like to see? by the way, cost cutting has been a key part of iger's second go round here, and that was something peltz was pushing for. i would be interested to hear him articulate what he thinks could be done that isn't being done and how he could add value beyond what is being pursued by mr. iger. >> we need a white paper. >> we do. >> there's hints here, daftsds, that investor confidence is low, but strategic missteps, i think -- >> that's in the past. it's like we know what he's trying to do now. >> he says even disney's ceo is acknowledging the company's challenges are greater than previously believed. >> without a doubt. i mean -- >> whatever it is, they're right about the share price, that even though bob iger has laid out a number of plans, it's not really done much to lift investor excitement around the stock. >> they're still spending a lot of money when it comes to content, particularly to support the streaming service, disney plus, and, obviously, the parks

continue to be the cash generator for the company. but he's got a plan, so i will be curious to see what peltz disagrees with. >> we'll follow that one as disney shares dipped negative. just over an hour into the trading day, let's get to bob pisani with more on what's moving. it's weird because the dow is up 300 pots and the nasdaq is negative one of thoseays. >> the btom line is ths&p has been flat for the last week, which is rather unusual. normally the last week of november it's a strong week of november. remember november is the best month the year traditionally. usually up about 1%. this has been extraordinary. we're up almost 9% for the s&p and people complain, well, it's the magnificent seven. no, it's not, folks. there's only 70 stocks in the s&p down this month. that's a little extraordinary. the equal weight s&p 500, everything is the same. that's also up the same amount. the russell 2000 is up the same amount. even the s&p mid cap is also up almost the same amount. so there you go. it's been extraordinarily broad rally.

if you look at the sector leadership, tech still strong, but so is banks. they've made a big comeback this month. the r the re -- reits have been great. we get goldilocks economic numbers that have been coming in so far. energy has been weak, but for the right reason. oil and natural gas have been moving down, consumer staples and health care lagging a little bit, those are defensive sectors. why are we strong? why wouldn't we be. look at these numbers here. we have lower rates, dramatically lower treasure yields and strong seasonal factors with november and december. we have better than expected earnings, 2024 system are now going up and we have the goldilocks numbers. you saw today with the pce numbers, inflation is still coming down, gdp has been solid, unemployment has been low, inflation is declining. my heavens no wonder wall street is bullish. look at the data points. i've been making fun of the new strategist estimates coming out. there's four of ten big bold bracket firms in the 5,000 club, these are their year-end estimates for 2024, this happens

every year, and the early part of december, most of them are always wrong, but we pay attention because they give us talking points for the coming year and you can see there are few bears out there. morgan stanley is basically flat and we also have jpmorgan at 4200. sort of a lone bear floating throughout. if there's anything that you ought to be a little bit cautious about, the market is really pricey right now. so we're looking at a growth rate, an earnings growth for 2024, of about 11%. revenue growth somewhere around 5. that's a little fuzzier. depends on who is for. margins going to hold around 11% level. a lot of people thought 2023 would see a slip in margins. that is not happening. here's what concerns me is the stocks guy, the forward multiple, 19 times forward earnings. whenever you get towards 19 or 20 the market has a problem. you get resistance. and that's where we're at right now. it's very hard to sustain a multiple a p/e ratio, above 19 for any period of time.

one of the lone bears out, 4200 for next year talking about a drop of 7, 8, 9% compared to where we are this year. he's one of the only ones here. he says after a period of record pricing power, the recent disinflationary trend should become a major headwind for corporate margins amid sticky and lagging wage trends. pricing power could outrun negative deflationarin some dustries. that's where you will see problems out there, the pricing power. i see lot of companies. with this p/e ratio at 19, one of two things will happen historically. prices are going to come down or the earnings numbers have to come up. obviously, the bulls are anticipating the earnings numbers are going to come up significantly right now. but there is not a lot to really tis like about the stock market. for once i tend to agree with the bulls here, there's a very good reason. look at this list, the economic numbers, just coming in excellent so far to the markets. >> a lot of soft landing reads on the data.

thanks. turning to tesla, elon musk speaking with andrew ross sorkin in new york city covered a wide range of topics, made headlines to the future of ai. this is what he had to say about efforts to unionize at tesla. >> if tesla gets unionize it will be because we deserved it and failed in some way. but we certainly try hard to, you know, ensure the prosperity of everyone. we give everyone stock options. we're -- we've made many people whare just working the le didn't know what stocks were, made them millionaires. >> also talked about the environment at tesla from advertising to selling cars. >> we focus on making the best products and tesla has gotten to where it's gotten with no advertising at all. >> i understand that. >> tesla currently sells twice as much in terms of electric

vehicles as the rest of the electric carmakers in the united states combined. tesla has done more to help the environment than all other companies combined. it would be fair to say, therefore, as a leader of the company i've done more for the environment than any single human on earth. >> meantime the uaw making efforts to unionize at 13 different companies, guys. they have a new website where workers can reach out and talk to the union. they're targeting tesla, toyota, vw, bmw, nissan, rivian, lucid and a bunch of others. >> his point i think as well on workers, he did also say during the interview that he's got to keep them. to the extent that they can gretsz get a job elsewhere making more for less work becomes difficult even though he's worked the line. he unlike the executives at some of the other companies that go up in the executives only

elevator, he made the point that at tesla, there's no such thing. >> at least he didn't tell them to go ef themselves. like the advertisers. >> no. >> i do think the unionization push that has gathered momentum and been one of the stories of 2023 continues with some of the tightness loosening in the labor market because there's a bit of a shift and we've report on in the macro data, the higher continuing claims, unemployment claims and whether -- i mean some of these unions, the uaw included, were able to secure significantly higher wages, 25 to 40% wages depending on the industry. the question is does this continue into next year if the job market really softens? >> meanwhile, we have tesla, of course, getting ready for its long-awaited cyber truck launch. in fact, it is expected today at 3:00 p.m. eastern at the company's austin factory. how big is this for tesla and

the short and longer term? tony sacconaghi, research analyst, joins us now, negative on the stock. his price target is 150. so that being said, tony, i would expect, perhaps, that you're not overly excited about what the cyber truck will do for tesla? >> good morning, david. look, i think the cyber truck even by tesla's own admission is likely a niche product. it believes when it's fully ramped it might sell 250,000 units per year. tesla doing close to 2 million. they have ambitions to be 10 or 20 million in units. in that context it's not a make or break car for the company. even by the company's own admission. >> yeah. will they make money on it? musk has talked openly, of course, about the difficulty of actually manufacturing this vehicle, given the stainless steel exterior and how hard it is to manipulate. are they going to see a margin

on this thing? >> we'll have to see. i think it's going to be very tough over the next year. we think gross margins will likely be around zero or maybe less, which means on an all-in basis, operating basis, the company will be losing money on every cyber truck they sell. i think it really depends kind of where demand is and where tesla settles at price. they had announced this car four years ago saying it would start at $40,000. i don't think there will be a cyber truck at $40,000. but at 100,000 they have a better chance of making money than 70,000. part of the equation where they will price it and how much sustained demand there will be for the car at that price. >> earlier this week i think you put a report out, of course, tesla versus byd making the point that one has a $90 billion market value, the leader in china in terms of ev, and tesla, of course, at $750 billion. given your price target i think our viewers know where you're

inclined, but, you know, what about the other parts of the business in terms of achieving level 5 autonomy, robotaxis and what that may mean, super charging and all the other technology, perhaps, that tesla has that other car companies don't? >> yeah, david. i think that is really the big question and certainly the reason for the valuation discrepancy between the two companies. i don't cover byd but my colleague does and our estimates for byd and tesla next year are quite similar in terms of revenues and profitability for the company. so clearly the market is ascribing value to tesla's other businesses, and certainly i think their software portfolio is, you know, miles ahead of byd's, so you get to this question of what does that software and other innovation portfolio translate to in terms of value?

and the market is saying, you know, about $600 billion worth of incremental value. and we struggle to come up with that number, quite frankly. we think tesla will bring lots of innovation has it has to date in terms of software, but particularly for self-driving it will take multiple years to occur and we don't think tesla is going to be the only one to do it. tesla charges $12,000 for full self-driving, but over time, tesla gets there, others get there, and prices will come down. it's hard on a modeling basis to come up with, you know, hundreds of billions of dollars ascribed to that service or to other services. >> yeah. tony, it's a debate that will continue for some time. we always appreciate your engaging in it as well. thanks for your time today. >> thanks, david. still ahead, energy is the only s&p sector in the red this

quarter. worst performing sector on the month as well, though it is leading today. our next guest says there could be more pain ahead. find out after the break.

coming up in the next hour of "squawk on the street," service now ceo bill m coming up in the next hour of "squawk on the street," service now ceo bill mcdermott, the company named one of the best corporations for career growth. it's the new opportunity index. stock's up more than 70% year-to-date. we'll talk about that and a whole lot more, along with the ceos of kroger and hpc.

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opec plus is meeting today after an unusual fouday delay, reportedly reaching consensus on oil output cuts. regardless of what happens, our next guest says they assume them to resume their downward trajectory. if ty're going to keep cutting, why are you bearish on prices, john? >>irst of all -- good morning, sara. >> gd morning. >> their track record on this stuff is just poor. and, you know, part of what the rancor was about delaying the meeting was the recalcitrance of

the african countries. cheating is their middle name, opec, that is. i joked they are le dieters around a dessert tab in terms of trying to hold together and comply. they don't have a good track record with it. ey are getting squeezed by the united states and other producers in terms of market share in asia, which is the only growth area right now. and china, awe know, their economy is struggling. you could use the word mightily. and it's not producing the kind of oil demand gains and rebound in the covid situation that was so, they have a big problem on their hands. not only from the demand from china, but, again, thenited states' position of 13 million barrels a day of production. exports refined products of 10 llion barrels a day. they have their hands full. it's just, to me, not going to pre to be a winning strategy for them. >> but the saudis seem intent on

getting prices higher. >> i've used the word hell-bent. the problem for th, and they're at their maximum cutting potion. they're producing only 9 million barrels a day, contrast that with the u.s. prodtion of 13 exports down to 7, contrast with u.s. oil exports of -- pushing on 5, not quite there, but pushg on 5. you see the problem the saudis themselves have. and they were awfully close th week to burning down the house, if you will, and saying, okay, let's have at it, like they've done many times over the past decades in terms of making it a battle for market share rather than market control. >> i wder if you think that the israel-hamasar at all has any impact? a lot of these couries in the world are watching closely, obviously, on the sidelines. whether that changes the opec

dynamic or discussions at all because it's all happening at the same time. >> well, i think, in fact, up until the hamas attacks there was -- between saudi arabia and israel, other countries as well in the region. and saudi arabia is even trying remarkably to bring iran into the fold. there are reports the saudis are offering them foreign aid in exchange for backing away from supporting the houthis, hezbollah and hamas. so, i think hamas miscalculated here in terms of their support among the arab nations, although the arab nations aren't going to abandon them completely, they certainly aren't coming in on their side in terms of any warfare, which the oil market has expressed its sigh of relief by lowering prices after that initial spike higher. i do think that's part of it. i think the saudi goal, and i don't blame them for this, is they want higher oil prices so they can build out their dream of a diversified economy, the neom project, and other

entitlements they see as their right in terms of keep the oil price at a place where they can benefit from it. >> yeah, uae also hosting cop28, a whole other dynamic. we have to leave it there. thanks for weighing in on the opec meeting today. well, with the s&p down ever so slightly, sort of back and forth around positive/negative teity. atildo it for this hour of "squawk on the street." we have a lot more coverage of the markets and all of your business news right after this. icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot.

good thursday morning. wome welcome to another hour of "squawk on the street." today elon musk's message to advertisers. is this the end of the beginning for x? a look at how everyday consumers and businesses are thinking about spending. the ceos of kroger and hpe are with us. finally, the ceo of service now, just named one of the top companies for career growth. shares are up 75% this year. we'll talk to him. market's holding some gains. s&p is up only a couple points. the dow up 300 benefitin