will force money to go out -- >> good wednesday morning. welcome to another hour of "squawk on the street." i'm sara eisen with mike santoli. we're continuing to monitor the bank ceo hearings and we'll bring you the latest headlines as they happen. in the meantime, here's what else is ahead this hour. lots more from the ceo of walmart, doug mcmillan, exclusively. his take on the jobs market, pricing, and the rise of weight loss drugs. >> plus, the ceo of campbell soup is with us. how does ceo mark klaus plan to turn around a stock that has underperformed the ceo 500. >> and omar agular breaks down why the fed has enough support now to end its tightening cycle. >> but first, the markets, large-cap indexes, modest gains. the s&p 500 a bit off its highs. nasdaq off a quarter of a percentage point, although, sarah, another one of those days where the average stocks doing a lot better. yesterday was a pause.

bank stocks, as the ceos testify on capitol hill, up more than 2% as a group. migrating back into more cyclical areas of the market. and it seems like we keep feeding on economic data points that seem to validate the soft landing thesis. >> yeah, slow down in things like the labor market, but not an all-out recession, which was also the message i got from the walmart ceo, basically, on the softening of the u.s. consumer. as far as the bank executives go, we haven't really heard anything that impacts the stocks, right? it's a lot of talk about the new capital regulations that took place, what, ten years to develop. i think you heard the frustration in jpmorgan ceo jamie dimon's voice, that they were not consulted or thought out, as far as the implications on the economy. of course, those basel 3 end game rules don't go into effect yet, but nearly unanimously, from the bankers, unanimously, they think that it's going to impact all osorts of thing, and hurt the economy.

>> going to try to make that case for a while. and of course, the stocks are not moving on that testimony, except for the general idea that we have a very well capitalized banking sector. if the economy holds together, those stocks, perhaps, look relatively cheap. and in general, i think aside from walmart, what you heard from doug mcmillan, the conference slate this week and investor meetings have generally not had any nasty surprises about demand. >> right. that there's softness, but it's not like a marked slowdown. km in the meantime, you continue to have this rally in treasuries. we're now at 4.1%. that's helping things like banks. >> they need lower long-term rates for sure. it's almost like a buying panic in treasuries at this point. our next guest says that bonds and resilient u.s. economic data support a soft landing, as the market now feels, but to expect more volatility ahead. he recommends somewhat more conservative portfolio, joining

us now schwab asset management ceo omar agular. good to see you, as always. what's your assessment of the market's current thinking that we might be able to thread this needle, a resilient economy, lower rates, maybe the fed eases next year, and perhaps we can sidestep recession for a while. >> yeah, well, you know, what a difference, you know, 12 months can make. what we were discussing a year ago, to what we're discussing now. clearly the soft landing scenario seems to be the most plausible case among everything. a year ago, we were all talking about recession, we were all talking about the fact that inflation was really high and growing. we're talking about how the labor market was so hot, that was feeling a significant amount of imbalances in terms of supply and demand, et cetera, et cetera. so as we think about where we are now, you know, it's almost saying exactly what the fed wanted to have. it's almost like they -- the perfect goldilocks scenario for what they have been working throughout the year.

you see the economic, you know, resiliency of the u.s., is still growing at above trend. they see wage growth going down. they see inflation moving to the right place, and they see the effects of, you know, the higher interest rates affecting the economy that they want to affect. corporations and the credit market is still pretty slid. overall, we seem to be navigating to these rolling recoveries into a more, we may avoid the recession and sustain that soft landing. >> when you contrast it with the consensus of a year ago, maybe that's a little bit of a cause for concern, because the consensus last year that a recession was assured proved very much wrong. and so the market, you know, maybe had a bit of a surprise in store for the majority. so where do you think that leaves us now with regard to whether the currently conventional wisdom can bear out in 2024. and how would you invest through it? >> so that's a great point.

i think if you look at just performance of a day like today or the performance of november, clearly, the market is anticipating probably a faster recovery than what the u.s. economy and even just overall markets may stand. you know, right now, the market seems to be pricing, you know, very aggressive, you know, fed cuts into the beginning of '24, into the second part of '24, which seems to be a little premature, especially when we have global banks still saying the case so higher for longer. and the geopolitical risks we have seen overseas continue to be a potential risk that may change the outcomes. so while we still in that more plausible scenario of a soft landing and the consensus seems to be that labor market seems to be a little weaker, stay within that goldilocks, we'll hit the 2% target on inflation at the end of next year.

overall, our viewer seems to be, we've got to take this more barbell approach to stay a little more conservative, knowing that while we may be at the end of the tightening cycle, usually takes a few more quarters before we can get into the full recovery of the u.s. economy. >> why the move into cyclical, specifically, at a time when the economy is slowing. if the positive viewpoint is on the fact that the economy is slowing and the fed can start cutting rates, what do you want to be in the tech space, that benefits off the low rates? unless the economically sensitive groups, the economy is down shifting? >> the big part of the move to cyclicals is preparing for that early recovery scenario. and you see days like today or november, where you started to see underappreciated assets, mostly on the cyclicals are on the small cap, starting to just take on more leading role.

we have seen a significant part of great performance for these megacap tech names that will take a backseat. and with that in mind, you will see that areas like materials, financials, you know, more of the traditional, you know, yes, more highly sensitive, you know, sectors of the economy will probably perform better. at the same time that you see the potential for small caps and mid-caps, you know, start to just take that. but again, it may be a little bit premature, and that's what we would try to say, try to be a very conservative, trying to just move the rotations. this has been a very interesting cycle, where things have taken probably longer than normal cycles. so it's starting to just move assets and rebalance towards the end of the year, seems to be like a prudent strategy for investors. >> where does that process leave you, omar, with regard to fixed income? at 5% yields on the ten-year treasury, clearly, the market seized upon that and said that there was value there.

there's been a real buying binge in the long end. we now are below 420. is there still value in bonds right here, or which way does the rebalance move you with regard to the asset? >> we still believe there's value in fixed income, we still believe there's going to be a significant amount of potential opportunities going into '24. i think what we all hope is that there's a little bit more of a stability on that sort of levels of yields. just thinking about three months ago, we were talking about a 10% yield that was significant with a significant amount of underperformance of risky assets. in november, we saw the opposite and saw those huge moves on yield going down to 40%. so having a little bit more

stability in the bond market will probably help and just provide that asymmetric potential pay that you can see that if the economy will stay, the self-landing scenario, we will actually see that going into 375 in the ten-year, or some of that area that may be able. so it's an interesting component for the next six to eight months. the sure part of the fixed income curve will probably go in li line with what the fed rates will be. >> gotcha. omar, thanks so much. >> turning to the semispace, amd looking to challenge nvidia with the release of a new ai chip this morning, despite nvidia's massive outperformance in 2023, amd raising 7% in the last month, compared to nvidia's less than 2% gain. kristina partsinevelos is in san jose ahead of this big amd announcement. kristina, what do you expect?

>> reporter: well, move over nvidia. amd is ready to launch its own ai chip and that's why i'm here in san jose. the event hasn't started. it's really quite early right here, that's why it's quiet behind me. i'm in the demo room. when compared with nvidia's h100 chip, amd's version, the mi300x has more bandwidth. nvidia's chips need to operate on their own software. that's a difference between both. amd is betting big, promising that this chip will be the fastest product in its history to scale to $1 billion. that's how confident they are. the company also estimates that their ai data center offering will bring in about $400 million in q4, this present quarter and about $2 billion next year, which definitely sounds like a lot. but when you look at this chart on your screen, it pales in comparison with nvidia's data center revenue. you can see that exemplified by

the yellow bar, and that's well above $80 billion. but if you look at the chart, you can see amd in orange is growing. that market share is growing. one thing to keep an eye out for today's event are amd partners, which hyperscalers will share the stage and show that they are now buying from amd and not necessarily just nvidia. microsoft is expected given amd's relationship with microsoft already, with a co-pilot, but will meta or let's say google also take to the stage? some partners that partner with nvidia. expect an emphasis on cloud partners here today. that is definitely going to be the case. and a lot of these new products that are behind me. >> kristina, what do we expect about pricing for this chip? is it going to be some kind of a value sell or is it just about, you know, the capacity of the performance? >> reporter: right now, we don't know if lisa sue is actually going to come out on stage, hold the chip and say, it's this price. because you need to buy several of these chips in order to operate any sort of data center system. however, they had previously

said that it will be more efficient when operating the inferencing part of large language models. that's because of the memory capacity. they're already saying that they should be cheaper when it comes to inferencing in large language models. spitting out the answers whenever you ask a question like, you know, what's the capital of kenya, for example. so in that situation, amd could come out cheaper, but we'll see if she actually says any pricing scale today. >> nairobi, thank you very much. >> i was trying to come up with -- >> don't even need to come up with something a little more complicated than kenya and my blind blanked. >> we get the point. thank you, kristina. up next, the ceo of campbell's soup shares are on pace for their biggest gain in almost a year following these results this morning. beating expectations, maintaining its full-year outlook, plus, much more from my conversation with the ceo of walmart. his plans for ecommerce growth, plus the exact of inflation on

sales. "squawk on the street" will be right back. dow losing some of its gains. it's up 54.

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we've got a market flash on brown foreman. >> so shares of brown foreman down 10%. it was a modest miss on earnings, but as you said, lowering guidance for 2024. look, organic net sales are now expected to grow, just 3 to 5% versus prior guidance of 5 to 7%. the jack daniels parent company citing macro winds and slowdown. whiskey, a staple category for the company, showing weakness continuing to lose market share to tequila. net sales for whiskey falling 2%, while tequila products grew 2%. that comes despite some supply chain relief for whiskey in the u.s. one other bright spot i would point out, ready to drink grew 4%. the company's jack and coke pre-made cocktail doing well with consumers. those products included in those

numbers. >> yeah, i was wondering about that, as it relates to coke. how they're doing on that journey towards more alcohol sales. thank you, brandon. brandon gomez. speaking of the consumer, we heard last hour from walmart ceo, doug mcmillan, highlighting potential concerns for the year ahead for the consumer. take a listen. >> there's also some positive -- there are positive things happening. so all in all, i look at this year and it's stronger than i would have thought. this year that we're getting ready to wrap up. next year is a different story. >> he talked a little bit about credit balances, you know, rising, some certain -- the consumer balance sheet not as in good shape, but does not expect a recession. our next guest is a major name in consumer staples, just delivered an earnings beat to kick off the company's fiscal 2024, saying the all-important holiday season is off to an encouraging start and reaffirming guidance for the year ahead. joining us first on cnbc is campbell's soup company ceo, mark klaus.

mark, good to see you. war you seeing from the consumer in this holiday period? >> yeah, you know, i think we were all anxious to see how thanksgiving unfolded, and, you know, my headline would be resilient consumers through the holiday. and i think much of the purchasing and much of the dynamics with the businesses was fairly consistently, with a couple of notable exceptions. i think one of the dynamics we saw is that consumers were waiting much later in the holiday season to make their purchases, making it very important that in the key week we had the product and the right pricing and promise in place for that moment. but the good news is, i think the campbell's business and you may not know this, but we are leaders in the three top categories outside of protein for thanksgiving. that's broth, that's condensed soup, and that's stuffing. and in all three places, we grew share. and i think that was an important indicator for us to continue to feel good about the

actions that we're taking to position our businesses in what is a somewhat volatile consumer environment. >> yeah, i think the highlight for the quarter, according to analysts investors is on margins, coming in a lot better than expected. so what are you doing there on profitability and how sustainable is it? >> well, you know, sarah, for a while now, we've been really focused on what i would describe as this balancing act between managing what the affordability needs to be for our consumers, at this really tough time for them, as well as making sure that we're protecting volumes while protecting margin. and i think this quarter was another indication of our ability to really get that management or that balance right, and i think it does come with some investments, selectively, but the great rois and we continue to work the entire pnl for profit opportunities. i think as we always think about going into this holiday season, it's imperative that we get the

right affordability for these products that are so important and so meaningful to so many consumers this time of year. >> mark, you called out the strength in some of the snacking categories. it's been, obviously, a bright spot for both campbell's and the history as a whole. is there anything you foresee in terms of being able to skew the mix further in that direction, acquisitions, or is it just going to grow faster on a natural basis? >> yeah, look, i think campbell's is really well positioned right now on both sides of the fence. if you think about where we are today, we have a snacks business that has been building momentum really over the last several years. we talked a little bit about dsd and some of the transformation work, but we really now have a margin architecture behind that business that is highly competitive and able to fuel that growth. and then on the meals and beverage side, we continue to work hard on the sovos acquisition, and if you look at that business and the success

that the brand has had and imagine that combined with the improving trends and stability of our current meals and beverage business, it really sets up a pretty, i think, attractive one-two punch in the company. and as we go into the back half of our fiscal '24, we have this, i think, really nice moment for an inflection on both of the businesses. >> why aren't volumes higher if prices are coming down, mark? >> yeah, well, i think it's a little bit appealing apart all of the different businesses. so, remember, we are, although prices are coming down, we still have a pretty significant contribution from price in a variety of different areas, i think also, as we see the pivot into the winter, into the holidays, you are seeing improvement on volume. and as we project into the balance of the year, as we kind of fully cycle that pricing, we do expect those to normalize. it's not as if we're looking for a complete hockey stick, but

certainly an improving trend. and let's take our powell brands on our snacks business this quarter, they were up 5% and the volumes were essentially flat, which is already a step forward in the right direction. so i think you're going to see progress, but probably not all the way there just yet. probably still through q2, but into the back half, we expect that to be a positive contributor throughout the year. >> and as everybody talks about the value oriented consumer right now, especially at the low end, doug mcmillan talked about the value consumer, i always ask you whether people are trading down into private label and whether that represents a threat. has anything changed on that front? >> i think the first thing i would say is i agree with doug. i think where we're seeing the greatest amount of pressure for consumers right now is in the lower income households. that represents a relatively low an ex for the company, but a bit of outsized contribution, as we look at where declines are. so from a tactics standpoint, it

is really important, as i said, going into the holiday, that we're at the right affordability, but of course, doing that within the construct of the margin is really important. and so, i do think that the dynamics around where consumers need that support were well positioned to meet it, but we're continuing to kind of stay agile and make sure that we're adjusting where appropriate. interestingly enough, on the middle or higher income, where arguably you probably have a little bit stronger consumer confidence given some of the more macro economic variables in the backdrop, we're actually seeing many of our premium brands actually performing better. so it is a little bit of tale of two cities. i will say one thing that you will notice when you see the thanksgiving results, is a year ago, many retailers focused on private label at the key holiday. i'm not sure that met everyone's expectations. we saw our brands back into that front display as you walk into the store, that ad in the paper.

and that proved, i think, to be pretty successful. you will see a little bit more dampened private label results in the near-term as campbell's was more of the focus. >> what happens to food police station next year, mark. what should consumers can want? >> i think, sarah, we're obviously all angst to see some relief on that front. and i think what we're heading into a period of a bit of a mixed bag. i think we're going to see some things that are still inflationary in nature while some things are deflationary. what i will tell you with a fair degree of confidence is that we'll see a little bit more stability. i'm not expecting to see the kind of inflation that we've been cycling through the last couple of years, but i am not yet seeing on the horizon a deflationary trend that i think could be more material than -- and i know people are hoping for that, but that's not what we're seeing right now on the horizon. it's certainly better than it's been. >> stock's having a good day. best day since january of 2021, off these results.

thanks for coming on to talk us through them. >> great, sarah. always good to see you. have a terrific holiday. >> you too. a 7% move higher today. the stock down double digits, but along with some of these other packaged food companies, like calanova. >> it's been a tough year all around. later, the latest from the top banking ceos. >> speaking of the banks, watching citigroup. while speaking at a goldman conference, the ceo says he sees about $500 million for bbas uyck and expenses are falling. stock on pace for its best day in a month. we'll be right back. by the five satins ]

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we are monitoring all the big bank ceos who are testifying in front of the senate this hour. our leslie picker is on capitol hill with the latest headlines. leslie, what have we heard? >> hey, sarah. bank ceos with the assistance of several republican members of the senate banking committee have used today's hearing to criticize newly proposed capital rules, known as basel 3 end game. senator sherrod brown, who chairs the committee asked the eight ceos to raise their hands if they were able to comply with the higher requirements. they all raised their hands. and then senator mike rounds asked the ceos to raise their hands about variety impacts that could stem from the passage of the basel 3 proposal as it's

written. >> do you believe in its current form, could these regulations negatively impact first-time home buyers? do you believe in its current form, could these regulations negatively impact those saving for retirement? do you believe that these regulations could negatively impact our farmers and our ranchers? and do you believe that these regulations could negatively impact small business owners? see, this is the rest of the story. sometimes, we think that we're just beating up on the big banks, but the bottom line is, it hits the american consumer where it hurts. >> ceos from morgan stanley, ceo james gorman to jpmorgan ceo, jamie dimon also took aim at the rules, of course, with the latter, calling them, quo, lacking the sort of thoughtful economic analysis required for success. >> we had ten years to do this,

and it's shocking to me, we're sitting here after ten years and talking about, what it's going to do for small business. and we have to analyze it today. now we're all going to fill out thousands of pages responding in a very detailed way to every single one of these things. but it was not thoughtfully done. i'm not sure it was shared fully among all the regulators. this should be relooked at. >> the discussion that just wrapped up was, what were regulators doing in march, to which jamie dimon said, the major risks from the smaller banks that went under were, quote, hiding in plain sight. we'll continue to listen in. we expect about another hour or two more of this hearing today, guys. >> okay, leslie, keep us posted. leslie picker. meantime, european markets set to close higher after yesterday's mix trade, and the german dax set to extend its record level set during yesterday's session. despite the rebound and lower inflation, one ecb official is warning investors to prepare for a little bit higher for longer.

slovakian governing council member, part of the ecb, peter c kazmir writing on "x" that a first quarter rate cut is science fiction, after isabel skmabl implied that we're at the end of the hiking cycle, he'd actually agreed with her on that, but ruled out the first quarter rate cut. additionally, european consumer appears to have recovered from september, with retail sales coming in higher, but below expectations. the question is, can they pull off a soft landing as well? >> exactly, which is why the market expects the ecb to be cutting earlier than the fed, because the economy is in a little worse shape. >> various countries probably have dipped into recession over the period, who knows if we're talking about a true perfect soft landing, but same fix that they're in, which is, you can pause and be done with tightening, and you have to sometimes pull the market back from over anticipating the easing move. >> so far, market seems very excited about the idea that they're done tightening, just like in the u.s.

>> exactly. >> my conversation with the ceo of walmart is coming up next. the company's holiday strategy and influence in the labor market, what they're seeing on hiring and wages coming up in two minutes. and take a look at oil, hitting session lows, below $70 for the first time since july following the latest eia data showing a drawdown that was more than expected, even with that news. we have a 33.7% drop in wti.

watching shares of mcdonald's today. stock's down a pit. getting some new details about the company's investor day, which it's holding now on the expansion plans and the digital strategy, including some new lofty growth targets. mcdonald's is looking to open nearly 10,000 more restaurants

and add 100 million loyalty members by 2027. these are new numbers, mike, and they represent an accelerated growth plan for mcdonald's. so they want to go from a little over 40,000 restaurants to 50,000 by 2027. so 3 1/2, 4 years. normally, that would have taken, i'm told, mcdonald's ten years to do. so they're really -- >> 25%, yeah. >> and go from $150 million in loyalty to $250 million by the end of 2027. again, a pretty ambitious growth target. loyalty is increasingly making up a bigger part of the business. they announced a new partnership with google, which is a big deal. 17 menu items, they say, are billion-dollar brands. which is the first time they've broken out things like that. and the chicken business, i did not -- it's almost as big as the beef business, which i think surprises people. >> it surprises people like me who literally remember when they introduced chicken mcnuggets when i was a kid. it's a big deal.

>> apparently it still is. they have some new financial targets, margins will be in the mid-40% range, they say, for fiscal 2024. they expect 2% systemic systemwide sales growth in constant currencies and a new restaurant growth of 4%. that's what they're giving us. >> yeah, pretty aggressive growth plan. all right, now time for a news update with pippa stevens. hi, pippa. >> former house speaker ken mccarthy is planning to resign from congress at the end of the year. he made the announcement today in an opinion piece in the "wall street journal". mccarthy didn't say what's next for him, but that he plans to serve america in new ways. he was voted out of the job in october, marking the first time in history that the house removed its leader. the justice department announced war crime charges against four russian soldiers this morning. they're accused of abducting, beating, and illegally holding an american man for ten days shortly after the russian invasion of ukraine.

none of the men are in u.s. custody. and taylor swift is at the top of her game and the top of "time's" person of the year list. she bet out a wide-ranging list of people from barbie to donald trump's prosecutors. she also earned the title of most intriguing person of the year from "people" and was number one on "forbes's" list of most powerful people in media and entertainment. it really is the year of taylor swift. >> i think it's deserving. which is your favorite cover? >> i like the one with her cat. big infantfan of the kitties. >> me too. i thought it was a fur. >> as a former print guy, i'm glad it's introducing a new generation to "time" magazine. >> there you go. >> "time" magazine, very with it. thank you, pippa. yesterday, i sat down with walmart ceo doug mcmillan. we covered a range of topics from walmart's holiday shopping strategy to his plans for significant ecommerce growth. and then, of course, the impact

of inflation on consumer demand. but we started with walmart's outsized influence on the labor market, with the company employing more than 1.6 million people here in the u.s. alone. it is the country's largest private employer. i asked him about the usual holiday hiring spree and how the world's biggest retailer is thinking about the consumer in the face of an uncertain economic environment. have a listen. it's more normalized. the unusual employment market that we saw the last few years has changed. we are able to staff around the country, our turnover is down. we've got more continuity, which is helping a lot. we have so much turnover 2021, when people went out on covid leave and we hired new people. we were hiring bartenders and waiters and waitresses because they needed work and they were learning the retail business. but these days, we've got more experience and it's helping. >> what about holiday hiring versus other years? >> our full-time ratio is so

high relative to other retailers, we just don't need to hire as many part-timers. we hired some, but we're pretty much staffed. >> normalized hiring environment. >> yeah. >> normalized wage environment? >> wages are still going up, which is great. and we'll raise wages going forward some more into next year. the percentage increase won't be as much as it was. >> there's been a lot of focus on these glp-1 drugs. and i know you sell them -- you have people on the prescriptions in the pharmacy here and there's been a lot of focus from executives at walmart in discussion about what's that led to in terms of basket sizes and changing consumer habits. what are you seeing? >> i think it's too early to call it, but we know our data is anonymousized. and what we can see big picture is that there's some shifting in categories, as people thinking about losing weight, they buy more fresh food, for example.

there's some movement around, but i can't call what's going to happen in the long-term. >> i think everyone is trying to figure out how profound of an effect it's going to have on things like packaged food. >> yeah. we'll see. >> you're not -- >> too early to call. >> on packaged food, what are you seeing in terms of growth? because they've had such enormous pricing power over the last few years, that's obviously calming down. right now. are they -- are they taking too m much? do the manufacturers need to bring prices down. >> yeah, there's recently more of a shift to wanting to drive ton tonnage, wanting to drive volume. >> how's the environment for private label right now? >> it's opinion more consistent. we managed private label pricing as we've gone through the last few years to make sure that we're showing value for customers. and private brand went up as a percent to total for us. we don't really want that to continue at walmart. we have great prices and we want people to be able to compare them.

having brands names so you can look around and see that coke or pepsi or some other brand is lower at walmart is what we would design for. private brands are important. we invest in quality. we try to treat them like they really are brands and not just some private label. but you know, we wouldn't want to see them continue to grow too much. we would like for the brands to offer a value to consumers and have them grow. >> that's sort of what i was getting at. but they are growing in this value-oriented environment, right? >> sure. brands are growing. private brand grew as a percent to total, but the branded manufacturers are starting to respond on price to get unit tonnage back. >> got it. you mentioned advertising a few times, and there's been growth in that business. still a tiny portion of the overall business. how big can it get? >> much bigger. >> what are your ambitions there? >> it will correlate to the ecommerce business, so growing ecommerce in the marketplace is key to being able to attract more advertisers. what we can do that some other people can't do is we can

conduct the dot between an ad you may have paid for digitally and a subsequent purchase in a physical story, so you can see the add actually worked. so it, too, is an omnibusiness for us. >> growing the ad business. what about growing financial services. that's a priority for you too. >> we've had a pretty big financial service business for a long time, but it's largely analog and in person, and that continues. but we would like to digitize it. and some of those financial services show up in our own app. we also have a jb with rivet capital for a product called one. one financial. and we're starting to see that scale, enabling a customer to use it, to check out, to pay, eventually be able to have other services that would enable them to have a digital experience, just like the one they've had here in person. >> how big of a portion could overall services be for the world's biggest retailer? >> depends on how you define services, but there is definitely a more b-to-b aspect of the company today, with the marketplace relationships, what we're doing with advertising and

some of these other things. i think the percentage will definitely go up and we'll sue the front of the store our vestibule space to do things like help take care of your pets and things like that. so services will continue to grow. and help us with the income level. >> doug mcmillan, ceo of walmart on an interesting piece of his strategy there when it comes to growth and they see double-digit growth in advertising, into financial services, trying to sort of explain the strategy, mike, of why in a softening consumer environment, doug mcmillan believes that they will continue to grow higher than the overall retail rate. last hour, we talked a little bit about the consumer softening, facing head winds, like a tougher spbalance sheet, doesn't expect recession, and an environment where pricing are coming down, even used the deflation word on general merchandise category, which hurts walmart sales, and he said it's on us to sell more units in that kind of environment. >> it hurts their sales, because as a company, culturally and historically, they've been a

deflationary force. they seem to know how to operate in a kind of pricing aggressive value-first type of way. >> and they think it's great, because the consumer will have more spending power to be able to spend on general merchandise and other categories. >> yeah, yeah. >> i also thought, we just spoke to campbell soup ceo mark klaus, and here you hear walmart talking about the share of private label rising versus brands, but how brands are coming in now and they're going to have to respond by lowering prices to drive -- >> it's a familiar dynamic. that's what walmart has done for a very long time. >> it's shifting for the first time in a while in this post-koefd environment. >> that's right. we'll hear a lot more about the retail landscape with the ceo of amazon to find, andy jassy joins "mad money," 6:00 p.m. eastern. looking forward to that. after the break, we'll head back to capitol hill as the top bank executives continue to answer questions from the senators. stay with us.

welcome back. tonight. cnbc launching its new

cross-platform franchise called "cities of success." it's a new series that explorers cities that have transformed into business power centers, driving chains across the entire u.s. economy. the first stop, nashville. the city looking to attract a wide array of businesses, including manufacturing, as autoworkers fight for better pay and benefits, nissan, just one of the companies that has put down roots. >> in nissan's mind, it had to make financial sense obviously. we had to retain key talent, to be able to make the move from california to tennessee, and i think the state and the local area put together a package that made it doable. >> nissan just one of the companies profiled as part of the series. do not miss cnbc's one-hour prime time series" cities of success" tonight, 10:00 p.m. eastern time. back to capitol hill where the top banking ceos are still testifying. leslie picker has the latest.

hi, leslie. >> reporter: mike, yeah, those higher capital requirements remain the focus of today's hearing. senator thom tillis asking james gorman will one tenet of the basel proposal on how operational risk is calculated. >> it makes no sense. that's the bottom line. i've been at this a long time. i served on the new york fed for years. i've seen a lot of rules. some of them make sense, and it's a question how far you turn the dial. this doesn't make sense. >> reporter: outside of those higher capital rules, conversations involving esg senator j.d. vance concluded with bank of america ceo brian moynihan. senator vance said many of the banked, quote, jumped into a culture war" and he pushed bofa on financing a certain coal mining to which moynihan responded the decision he made was to not continue funding specifically those that take the

top mountains and turn them into mines. it's been a pretty friendly back and forth so far although we have a ways to go. >> all right, leslie. we'll be back to you with more. up next, google releasing its challenger to chatgpt 4. the details after the break. when you're wearing the world's coziest slippers, your comfort zone can be just about, anywhere. step into your comfort zone with olukai.

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google unveiling long-awaited new details around its large language model gemini this morning ramping up the race against microsoft and openai. deirdre bosa has the story for today's "tech check." hi, dee. mike, good morning.

google's latest bid to prove it can keep up and lead the ai arms race is gemini. it's the next version of its large language model, and really it's the answer to openai's chatgpt. we've become used to this year, this was a much more subdued virtual rollout for a select group of reporters and to sundar pichai, it is being sent out for more safety testing. a lot of the really impressive features chatgpt four use verse been touting like multimodal tasks, but it's better if we show you. a user asks gemini to give them crafting ideas. >> i see pink and green yarn. how about a dragon fruit or a cake with a pink heart. how about these colors and maybe

show me some animals. okay, now i see blue and pink yarn, a pig with blue ears and now an octopus. >> it's called a new era of ai and that will affect and flow across google products. wall street is concerned with one product in particular and that is search, how google will use ai to protect that cash cow. google where search meets generative ai delighted investors and put to rest the idea google was behind in the race. gemini will be a key piece in that evolution. one day you are on top and the next your ceo is ousted in a boardroom coup. what the race might look like next year. alphabet shares haven't done much on the news this morning. better, faster models seems to be a given but its applications,

monetization, and ai safety, those are likely to get greater focus in the year ahead. >> dee, you mentioned monetization, and that's the one that really pops up for me because microsoft, it has gotten all this acclaim for really having a very specific, easy to understand way. it's a subscription model, co-pilot on top of other paid for products, is google just going to see it as they've always done, basically hope its advertising base, deeper engagement with existing products is the way they make money off it? >> google has said this year there is still going to be plenty of opportunity when generative ai takes over search, for example, and that was the google lab, search lab. that's what it shows, you're still going to be able to monetize that through advertising, but, i mean, look at the openai developer day just a few weeks ago was basically like an app store for gpts or application. that's another interesting idea.

here in the valley people are trying to figure out what the last few weeks have meant for that drive. monetization and careful development, can they happen together? do you sacrifice one for the other? that's what's happening here that will continue to happen as we see the products monetize. the ceo, satya nadella, we'll see if it happens. >> we'll talk to you again soon. the markets have lost a bit of this morning's gains. it will be the 12th straight session so it's gone sideways but you have small, cyclical stocks up today.

an internal rotation as opposed to forward progress. >> about 100,000 and revised lower for october. the market is reacting well but not as enthusiastically as we've seen. you do wonder what's baked in. that's it for us here on "squawk on the street." over to scott and "the halftime report." thanks so much. welcome to "the halftime report." i'm scott wapner. front and center this hour, the broadening rally, interest rates are moving lower again. we'll debate with the investment committee where your money goes. joining me joe terranova, anastasia amoroso, jason snipe, jim lebenthal. we lost a little bit of steam. there's the dow still positive. the s&p fluctuating between positive and negative territory.