the ten-year yield is at 4.15%. still below 4.2%. oil prices have been hovering around $70 a barrel. right now it's $70.05. that does it for us. it's thursday. you know what tomorrow is. >> jobs friday. >> "squawk on the street" begins right now. good thursday morning. welcome to "squawk on the street." i'm david faber at the new york stock exchange. jim cramer, there he is on the other half of your screen. he's in settle fresh from his exclusive interview with amazon ceo. carl has the morning off after the cnbc premiere of "cities of

success." there's a look at the futures. we're set up for what may be a higher open. let's get to our road map. we start with amazon. you'll want to hear what andy chasy had to say about consumer, aws and more. that man right there, exxon mobile ceo darren woods. we'll talk about yesterday's news where they outlined exxon's plan for growth and spending. that was yesterday. then we've got another biggest, home builder stocks hitting highs. toll brothers ceo doug yearley joins us. jim sat down with amazon ceo andy chasy last night. they talked everything. take a listen. >> consumers are still spending. they're being careful about what they spend on and they're looking for bargains and deals

wherever they can and wherever they can trade down they're trying to do so. if you look at what we did in our holiday season, it's important to save customers money, particularly during the holidays and especially in this economy. in our prime big deals day, which was our exclusive event for prime members to kick off the holidays, we had tens of millions of deals. it was the best kickoff event we ever did. >> that's interesting, especially what we heard from doug mcmillan yesterday as well, the other major retailer in our country. what else stood out to you? >> look, i think the consumer -- i was surprised. when the consumer starts buying, i thought they would pay up more. andy jassy is talking about the chinese types. people are looking for bargains, but at the lower end. i'm wondering if the lower end

isn't struggling. lower end having trouble. there's this cohort, david, that's been left behind. it's important we remember this is the group left behind by inflation. a lot of people feel that inflation is under control. that's not what i felt from andy jassy. >> we've been hearing that there's weakness, particularly at the lower end so to speak of income, jim. you know, i wonder does that translate into a significant diminution in overall demand? >> no, i don't think so. i just think if you're in the high end and you're trying to sell something online for the holidays, i think you're going to struggle. it's not where the money is. by the way, these chinese sites, they're partners with andy jassy. if you go to them, you'll see the arverage price of what peope

are buying is 12 bucks. it's hard to make money at 12 bucks if you're amazon. i think amazon is doing fabulously. they can pivot. they don't have inventory. if i were a brick and mortar store and listened to that, no confidence. i have no confidence i can sell my high-end stuff. >> interesting point on the likes of shein, which will becoming public next year and temu which i've been talking about because of the strong numbers we got, that new business model they have in terms of how they access consumers and respond so quickly to trends just based on the desires of the consumer. jim, amazon's a lot more than about selling stuff to people. it's also as we say about aws. so much of the profits and growth of the company has been from that important engine. jassy discussed that with you.

he said it's a $92 billion business right now. what did you pick up from him in terms of beyond that? we can take a listen to some of the sound that -- his thoughts that he shared about aws. >> i continue to be very bullish about aws come 2024 and beyond. i think that, you know, the business today is a $92 billion annual revenue run rate business. 90% of the global i.t. spend is on premises. if you believe that's going to flip in the next 10 to 20 year, which i did, if we have the large functionality, which we do, if you have the largest partner, which we do, and the customer orientation we do, i think we have a lot of growth in front of us. >> you agree? >> yes. the contrast between retail where there are some concerns and aws, amazon web services, is

so stark. aws is doing far better than people realize. if you're long in amazon, you have to feel confident. the division that people were worried with aws -- it was going down in terms of trade of growth, that's wrong. it's switched directions. a lot of it is actual a.i. and a lot of it is the huge amount of hyper scaled compute that is necessary to do these large language models. this thing is a juggernaut. it's completely different from retail. i think that andy -- we'll talk to google. microsoft, holy cow. these guys are making money right now on all the stuff we talk about. you'll see that with amd. it's far ahead of the plan. that's what wall street doesn't understand. this is where the money is. >> all right.

jim, we'll get a lot more from your interview with jassy. we have some comments from lisa su as well with kristina partsinevelos. i want to get to breaking news from the white house on health care. for that we go to bertha coombs. >> reporter: the biden administration looking to cut back on drug price us. the administration is proposing to let hhs to use march-in rights on drug patents developed with tax-payer funding. they're going to allow hhs to use high prices. it's one of the reasons they can march in using a provision of the 1980 buy dowell act which paved the way for universities to commercialize discoveries.

there's a prostate cancer treatment that lists for $160,000 to allow other drug makers to make it. beyond march in for drugs, they'll launch a doj-ftc-hhs task force to look at consolidation in other areas like private equity in hospitals. they'll require greater transparency on ownership of health care including more oversight of private medicare advantage insurance plans. joe allen, a former senate staffer, he has concerns. he told me the key for march in was whether this would be available for people to use and to use some criteria to see if it's being made available.

just arguing that you don't like the price is not the way the statute works he told me. david? >> bertha, thank you. jim, the drug makers said we take many years and take a great risk in developing these drugs and should be allowed to profit for sometime. what do you think of this? >> david, this is flabbergasting. these major drug companies, which had formerly had a pretty big role in our country's r and d where we're a national leader, are so under assault. it's so visible. david, it's so visible that it's political. i say that because anti-trust, i mean, tell me which ones are not competing for anything. the idea that these guys are

paying -- you have to pay them too much after you're already negotiating. medicare's negotiating with these companies for the first time ever and it's not enough. this administration is running rough shot over these companies. >> listen, yeah, it's certainly a key issue and, as i said, jim, the pharmaceutical companies will argue -- we're not going to make the investment if we can't get the return. it's as simple as that. >> yeah. that's always been the argument. all i can say is it doesn't seem to matter what the drug companies do. you can visibly assault them and people will say, yes, that's it. inflation. they understand it in the white house. >> jim, stand by. after the break we'll have an exclusive with exxon ceo darren woods. he'll be joining me here.

let's give you another look at futures as we get started with trading on the new york stock exchange in about 20 minutes. we're looking at a somewhat higher open. more "squawk on the street" rahthe.d [ "i'll be seeing you" by the five satins ] ♪ ♪ what do you see on the horizon? uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise

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exxon mobile out with a corporate update yesterday. lifted its buyback target to 20 million forecasting higher production for next year.

this as the price of oil fell below 70 bucks a barrel. i'm joined by darren woods exxon mobile ceo. good to see you. just curious, oil has come down significantly over the last month, six weeks. any thoughts as to what the reasons are? >> we don't get too focussed on the short-term dynamics. we tend to look at the longer term. over the longer term it's a depletion business. we see every barrel that the world produces is one less barrel available. it requires constant reinvestment to grow the supply. i would say investment into that -- replacing the depletion is on the light side. has been historically. continues to be on the light side. our view is the market will remain fairly tight. >> you think so?

>> i do. >> we're around 13.2 million barrels a day from the u.s. when you hear that number what comes to meind? >> it speaks to the resiliency of the business. there's less rigs now compared to similar levels of production. less rigs. we'll continue to see good activity in the unconventional space. i suspect growth will slow down. it's good for the world and good for the u.s. and the security. >> the pioneer deal going to help you increase production? >> yeah. what we're doing with nye near, we spent a lot of emphasis on how we can bring the capability and skills we've developed around the world to bear in this

u.s. resource and have developed an approach with technology, a way of recovering that resource that gives us an advantage. we're taking what pie inner has to offer, which is capable people, and the best acreage, combining that with our development approach. we'll produce more oil with an environmental approach. >> ambition to plan 15 years earlier? >> we have a 20/30 net zero plan for our production. >> i've been there. spent time with your people. >> we'll bring that forward if we find the opportunity. lower emissions, less environmental footprint. it's good for the ceconomy and helps u.s. energy security and it generates additional value that neither pioneer nor

ourselves could do without this innovation. any lens you want to look at the deal, it's a win win. >> since i'm on the subject, you got a second request for information from the anti-trust authority. not a surprise. any concerns on your part? >> no. we'll respond as quickly as we can. it's reasonable to take a look at that. it's large when you look at the transaction. in the context of the bigger market, it's a smaller transaction. our production will be 5% of the u.s. market. of course on the global stage, which as you know the market is very liquid, we're less than 3% of production. i don't think there's any angle you can look at this potential combination and find any concerns about competition. >> when you talk about technology upgrade, your word, not mine, do the pioneer guys

say we're as advanced as anyone getting the stuff out of the ground? >> they are. it's a great organization. they have great people. they don't have the same resources that exxon has. they don't have a stand alone organization that work ford the last five years to improve the recovery of that resource. it's not an issue about the capability of the people, it's the resources they have available. same with the environmental reduction. they don't have the same resources that exxon mobile with bring to bear. frankly that's a broader theme for this whole challenge the world faces with respect to reduces emissions. it's going to take scale. it's going to take large company with the resources required to make progress there. we have a key role to play there. we're going to do that. we're doing it in other places as well. >> you are. i spent a lot of time with you and your team focusing on that.

let's talk about it. yesterday you did increase by another 3 billion, your lower emis emissions opportunities and what you're willing to spend on them. it's up from what was originally 3 billion not that many years ago. >> that's right. >> i just wonder about the return that you can get on that. when we look at the stock market, and i talk to investor, they're looking at free cash flow generation from a mature company in exxon mobile. you're spending more with return parameters that may not lend itself to as much free cash flow. how does that put you into a bind in terms of what you're willing to spend for these higher risk and lower reward opportunities? >> first thing is this is a growth business. it's not like our other businesses. we're establishing a brand new value change. today there's no market for carbon reduction. we're establishing that market.

it comes back to the fundamental of what can we as exxon mobile with the capabilities we've built over the last 140 years bring to this demand to lower reduction? what are the capabilities, the technologies, the skills that we can bring and address it and create value? frankly that's what we've been focussed on. the transition from 3 to 20 is a reflection of a broader understanding by societies and markets. the solution to address climate change goes well beyond wind, solar and electric vehicles. those have a role to play, but so do the molecule solutions. that's right in our wheelhouse, the things that we have done for the last several decades plays to that need. we're building that business. the returns we'll generate for the portfolio we have today, based on the existing policy, is 15%. >> you can live with that?

>> for a business that you're starting that has the capital investment, that's a pretty good starting point and it reflects the capabilities we're bringing to bear. >> will you get rewarded by investors? you have to balance them both. >> you're right. there's a lot of uncertainty out there. as you look back in time with our history, it's about responding to the needs of society. there's a definite need, one we sincerely believe in about reducing emissions. we have to balance that with providing affordable energy. we're positioning ourself to strike that balance. we'll move resources based on where that demand is greatest, where the need is most unmet and how quickly that transitions. we're unique in the space that we have optionality. we can continue with our s traditional business if it happens slower than we're

thinking. we create a lot of optionality here. >> does faster mean when there's a higher price on carbon? it's 85 a ton now i think. >> $85 a ton through government incentives. >> it's possible that could go higher. >> if you want broader application of carbon caption storage, it has to go higher. this is an opportunity to get started, get the technology in place, generate efficiencies and see if we can find ways to lower the costs both from a construction standpoint and technology evolution and scale standpoint. david, i have to be clear. for this to be successful we have to move from government subsidies to a market force. we see this as a temporary catalyst to get started. >> a lot of the numbers here, 2027 is -- when you think about this is that a key moment, 2027?

>> we set out a strategy in 2018 to double earnings and cash flow. our target is to make it happen by 2027. the 2027 timeframe is very important. we've cut $9 billion of structural costs. >> you'll continue to cut costs. >> we'll get to $15 billion by 2027. we're doing this at the same time we're improving performance, better reliability, better safety. we're growing earnings. we've captured $10 billion of earnings in 2019. a lot of positive momentum there. the low carbon solution business, the time it takes to get the policy in place -- the ira hasn't been translated into specific regulations. before we can invest the money we're talking about we have to see that legislation get

translated into effective regulation. we're waiting. we're working with the administration to help them understand what's required. a lot of the discussion we had yesterday with our investors is, while we have a line of sight to profitable opportunities, there are more things that have to happen. regulations have to be put in place. we need permitting for the wells. a number of things have to get finished to make sure the investments generate the returns. what i would tell you is we're going to minimize any downside here and create a lot of potential for upside. society will determine how quickly that manifests. >> it does occur to me we have a presidential election. if donald trump wins, you can imagine a scenario where he undoes all of this. >> that's a decision the country has to make.

if you look at what we're doing and the time it take toss roll this out, there's very little money committed in the scheme of what we're trying to do through the election decision. >> it wouldn't be that big a financial risk to you if all this gets undone? >> i don't think it would be good for society. the world needs to reduce carbon emissions. there are things that have to happen to support a business like us doing that, along with a lot of other businesses around the world. this on and off again approach, these extreme positions isn't good for the world, our society or business. i want to see consistent policy that strikes the right balance between reducing emissions and meeting the needs to society, not disadvantaging any group of people, not crashing economies. there's ways to do that. we have a more informed and thoughtful dialogue. we can make progress on both of these fronts.

it's an and equation. we can make money, generate returns and reduce emissions. >> understood. i want to end on something else that's come out of the blue for others. it's ghana. i i've been there and seen your production there. there's concern that venezuela's going to try to invade a certain part of the country. what are your thoughts about this and how much risk does it present to exxon mobile given the importance that they have for your company? >> i put it in the context of what's been happening for many years. there's been a border dispute. venezuela's had this dispute. it's going through the international court of justice. there's an arbitration process happening.

it's a matter between nation states and the international community. it's been ongoing. my expectation is that process will be respected. it's what i see -- >> they have 1 million people. they can't defend themselves if the venezuelans want to do something. >> i'm not sure they're standing on their own to tell you the truth. we've seen what happens when nation's sovereignties are challenged challenged. the world has grown sensitive to that. there's more broad support in the international community to make sure the right processes are followed to resolve this dispute. from our perspective, we know what we need to do, develop those resources economically, environmentally responsibly and do what we've been contracted to do. that's what our organization is focussed on. >> darren, appreciate you taking time and coming here as well to the new york stock exchange. >> sure. >> thank you.

darren woods chairman and ceo of exxon mobile. jim, i want to get your thoughts here. we got news from chevron in terms of their spending plans as well. >> i thought it was an amazing interview, david. here's the ceo of the most storied oil company in the world talking about balance, not talking about, listen, we have to bring out as much oil as we can. he's talking about bringing out a lot of oil and then balancing it against emissions. i don't know if people in the government realize how radical this is. he's a radical when it comes to oil executives. david, how much change has this man experienced in the time he's been at exxon? >> enormous amounts of change and really even over just the last three years frankly. so much of the time i spent with him, a year and a half ago when

we were doing our documentary, was really questioning the ambitions when it came to carbon capture. i have to say since then they bought danbury and the pipeline system. they got the permits to store the carbon. they signed deals, jim. they've really done it to a certain extent. obviously so much more to do. >> this is incredible. i mean, i know from our discussions, the biggest carbon capture development in our history is being made by exxon. they don't even want to brag about it. that's not their style. they're saying we're putting the money right there. you want to decide whether we're good actors or not, go ahead. you can't help but be impressed. they're the leader in trying to save the environment while they get the most oil out of the

ground. >> right. it's not an either or as darren woods says. it's an and. it's of incredible importance. jim, we're going to get the opening bell right here in two, one -- right now. there's the big board. over at the nasdaq, the global food security company celebrating its listing. jim, we didn't have time for a mad dash. i'll let you do one now. whatever you like. you pick. >> we had this humanization of

pets. chewy, this was a way to serve a pet like a human. huh-uh. now i feel like chewy is an also ran. they changed out their ceo. i think that the humanization of the pets is over. they're not eating at the table with us. maybe they're even kicked out of the bed. >> i wouldn't say that. i don't know. >> i got wolfie. >> they came in with lower numbers than anticipated. are we talking about consumers trading down? jim, give me more here. >> you know what i think, after

spending time with andy jassy who is a quiet, quiet competitor, but i also think someone who likes to win at all times. i tried to get that out of him. amazon is the way to go. you don't need chewy. amazon's prices are fabulous. they deliver to your house. i don't understand why you need chewy. david, it may be an existential issue there. >> all right. interesting. that's the mad dash. what else? where else are you thinking this morning? we haven't got to a lot of other movers or stocks. we have a brief amount of time. >> gemini, i have been playing with gemini. you can do it on twitter. gemini is disrespected by the analysts who say it's a party game. google unveiled somethings yesterday that i think are how the consumer can use chat. you know what they can do -- here's what you do. you can plug in anything and it helps you develop your thoughts.

that's where i think consumers are going to use this. let's say you want to do a business, start a business. you don't know how to do a paper that explains it to venture capit capitalists. i would give it to gemini. that's why the stock is flying. analysts are like this is nothing new. are they crazy? this thing's electric. >> i would encourage people to -- it was tweeted out -- that six-minute demonstration of what it can be. we watched it. it's pretty shocking in some ways. i mean, i guess we know this, but watching it in real time in terms of what it can recognize and how it communicates, jim, and i assume a lot of people buying the stock may have seen that demonstration. >> they have. we're past -- look, there was a time where you would do a search. give me the three best

restaurants between 45th and 48th that serve mexican food. that's over. this is true conversation thinking. obviously, i think in my ways, david, it's smarter than you are. we get that. i would use it for inspiration. i would use it to double check things and i would use it to summarize. i think the summary is the most important thing. you get a 90-page document. could you tell me what's important here? you can speak conversationally to gemini. gemini gets you. >> amd, lisa su speaking on what's going to power these language models. it's chips almost all from nvidia. lisa su said, we accelerated our road map too.

thoughts on what we got from amd. >> in august lisa su was using a 200 billion figure. she changed it now to 400 billion. nvidia has a huge software c comp component. amd doesn't have that yet. the software is used for training. as much as i applaud what lisa said, i think there's room for both. the software layer of nvidia gives them the edge, not the hardware. there they seem almost even. it's all built in when it comes to nvidia. you have to write stuff with amd. congratulations to lisa su for expanded. they need these chips. all the customers are desperate whether meta, microsoft or aws. >> whether it be amazon which takes us back to your interview with jassy.

let's listen to what he had to say. >> sure. >> let me get your analysis on the other side. >> in my opinion almost all degenerative a.i. are going to be in the cloud. i think that there's going to be a huge number of -- every company will read their core customer experiences that way. >> jim? >> yeah, look, 90% is not in the cloud. it's like the old days with your pc and a server. david, if you're doing that, if your company is still on premises and not only cloud, this is it. this is the game, set, match what i saw yesterday with gemini. there will be no on premises. it doesn't work. on premises is a typewriter. this is the equivalent of not a

word processor, but a leap in terms of something you can talk to. no code. no code at all. gemini, as well as amazon web services, will be just the only way to go. i think people are not understanding how quickly this is happening. >> when you sign up for aws, you're locked into amazon in the same way as when you sign up with google you're locked in there and the software that comes along with it. it's not so easy to change, is it, jim? >> that's why you go with snowflake if you're worried. you rent the cloud and then you make a decision. think of it like you're not sure you want to own an apartment or rent an apartment. you start with a rent. it's the same thing. the rent the cloud option with snowflake is very much for real. that's why that stock is scorching. >> jim, i want to do a faber

report. had a couple deals that advi has done in the last week. the latest of which was announced after the bell yesterday. abbvie acquiring a company called cerevel. 45 buck as share. you can see the move in the aforementioned company. this is after that bought another large company. they're busy at abbvie. let me give you a little background. that is somewhat interesting. pfizer decided back in 2018 that, you know what, we no longer want to pursue neuroscience. we're going to sell our neuroscience business. i don't know what they were burning a year, maybe 400

million bucks in terms of research and development. you can imagine taking that out helps things. they sold it for a relatively small sum to bayin. they retained 25%, pfizer did. bain bought this neuroscience business from pfizer. then in the summer of 2020 they took it public. i kind of remember it. i looked back at it. it's one of the successful backs. as our viewers know, there aren't that many. this is one of them. bain retained 35%. that's what they own today. pfizer now 15%. both have been diluted down a little bit. that's where we sit with cerevel up and abbvie saying we want to take a shot at the robust

neuroscience pipeline of what they call preclinical candidates for schizophrenia, parkinson's and mood disorders. the price is a 70% premium to the stock before this week. stock did something weird this week. it went up a lot on no news. there was no reports or rumors -- maybe there were rumors. look at that move. the premium right now is far from what it was even as little as a week ago given that enormous move up. yesterday i was hearing a lot of buyers believe the move up was unwarranted. they've been dispoiappointed bye move. there was some unusual options activities if i recall. both of these abbvie deals seems like somebody knew something.

in this case it di minished a 7% premium before there was news. there was nothing i'm aware of about cerevel in terms of whief why it moved up so much. jim, they chose to make a purchase here prior to getting a lot of important data. there were as many as six data reads coming next year on their private portfolio at cerevel. it's a risk for abbvie, but they can do it. it's a $260 million company. >> david, my hat's off to them. we're talking skrchizophrenia,

parkinson's. no one has succeeded with sk schizo schizophrenia. the drugs for schizophrenia are awful. this is a stretch and a reach. i just think it tells you how much abbvie is desperate to diversify. >> right. they have that cliff coming for umira. >> i hope this works, david, but it's so -- i do a lot of work with the brain foundation, migraine foundation. i don't want to say there's no hope. >> it's hard. >> i'm saying it's the toughest thing to crack. anything neuro is tough to crack. >> it is hard. last week's acquisition by abbvie was oncology.

i'm told they were willing to take the shot and they got this company -- not closed the deal, but certainly going to be buying it. jim, we're going to move on to the home builders. those stocks hitting new highs. the s&p home builders hitting its first closing record since 2021. the toll brothers hit the beat on the top and bottom line. we talked about it yesterday. doug yearley joins us exclusively. he's next to me. jim, i'll let you start this off with mr. yearley. >> great to see you. thanks for coming on. >> my pleasure, jim. >> fastest increase in mortgage prices. i can't believe how much interest went up. homes now over $1 million. you have record numbers.

your gross margins are terrific. the consumer did not pull back. how is this possible? >> jim, we've had two record years in a row now in the face of rates that have been 6 to 8%. two years ago, december of 2021, we had a 3% mortgage rate and six weeks ago it broke through 8 to 8.25%. the dynamics are really strong. historically about 10% of the homes in this country are sold as new homes. 90% are resales. with the people that own a home locked into a 3 to 4% rate, the resale market is frozen. it's at historic tight low levels and 30% of the homes in this country that are sold are new. there's a migration to new because we have the homes. they're energy efficient.

the architecture's great. we're benefitting. the old trade was when rate goes up sell the build. that's not been the case. the industry has benefited. i'm proud of where toll brothers is positioned. >> look, you should be. i tell you, the thing i'm most impressed about, you gave a forecast that's good. 65% -- in backlog you have homes built to suit. 26% paid cash for a million dollar home. >> historically it's 20% for us. right now it's 26%. those that get a mortgage, the loan to value ratio was 69%. they're putting 31% down and mortgaging 69%. our buyer is financial sound. even in the face of the higher

rates, we have ourself a really good market. >> i'm blown away. you mentioned something that's important for the stock. typically right now the home builders would be the last stocks that you want to own. i see a buyer that bought 18.9 million shares, $1.3 billion. what the -- 400 million in debt you bought back. doug, this is the opposite of what i'm used to home builders seeing, which is overdoing it, putting up too many houses and getting killing. this is shocking how much you're buying back and how much you believe in your company. >> jim, i'll tell you the industry has changed dramatically. the way these companies are being run, we're so focussed on returns. we're keeping land off our balance sheets. we're optioning land. we're returning cash to shareholders. even with the run toll brothers

has had we're trading at 7 times earning, 1.3 times book. there's a runway in front of us. i said it yesterday on the call, i got on a soap box, this industry should be looked at hard for a rerating. these companies are structurally run differently. for us to have the business we're having in the face of these rates, i'm super proud of not just toll brothers, but super proud of how this group is being run. we deserve more respect. >> i'll ask that. structurally run differently means one? >> the capital efficiency. historically buildings bought a lot of land. we loaded our balance sheet with land. now you find these companies that -- we have a couple year's supply of land we own. the balance is optioned. we're able to use more capital on more deals than have it all tied up in one deal just on how

we're structuring with land banking, getting option terms from land sellers. that's the number one way it's changed. fundamentally within the companies, the operations, how we're running, the leverage we're seeing, the efficiency of the homes we're building. there's been a fundamental change. >> home sales gross margin was 27.5%. full year was a bit below. is that sustainable, 27.5%? >> it is. for a couple quarters we're faced with the sales in the second half of '22 when the market was slower and we had to incentivize a little more. there will be a small dip for a little window here as those homes deliver. longer term we can sustain mortgages in that range. >> jim has a question for you. >> denver, boise, southern california, texas, mid atlantic,

eastern seaboard, these were quoted as being hot. that's huge. >> it is. our hottest corridor has been atlanta to boston, the eastern seaboard. we're doing well in other areas, but it's nationwide. we're in 24 states, 60 markets. there are very few i'm worried about. >> i got to tell you, doug, i'm proud of you. i'm from philadelphia. i'm from ten minutes from where you are. yes, you're right to congratulate the entire industry. toll brothers the real star. thank you for coming on "squawk on the street." >> thanks, jim. thanks, david. >> thank you. let's give you a quick look at the bond market. we'll check out how treasuries are fairing. not unimportant to our last guest's business. look at the ten-year. creeping up 4.138.

that gives you a look at the spread. not that long ago we were pushing 5%. yields, there you have it. let's take a quick break and get stock trading from jim after stock trading from jim after this. icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain.

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alphabet on the strength of the gemini product, did come out yesterday, it is being reflected in the stock price today in terms of what that may mean for the future of the company when it comes to generative ai. where many say alphabet sort of lost the lead to microsoft. southwest, advanced micro and rounding out dominos pizza. we're back right after this. (adventurous music) ♪ ♪

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jim, are you coming back ever or going to stay in seattle? >> i'll be there tomorrow. i don't like to sleep thursdays either. when you get older you stop sleeping entirely. >> i kninoticed that. >> i have t-mobile, mike sievert, somebody who is doing

well in the communications business. we don't talk about how everybody is doing. part two, amazon, with andy jassy, much more personallook at amazon and what its means to all of us. >> awesome. great job. i'm looking forward to you being back and not sleeping at all. those are the best days when you haven't had any sleep. >> all right. same. can't wait to see you. >> we'll take a quick break and check the markets for you as we are an hour into the trading. the s&p up almost half a percent. we're back after this.

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good thursday morning. welcome to another hour of "squawk on the street." i'm sara eisen with david faber, live for you as always from post nine of the new york stock exchange. carl has the morning off. stocks in the early action, little changed on the dow. the s&p up 0.4 and tech is coming back, up about 0.6. shouldn't say coming back, had a strong day yesterday as well. part of the reason the treasury rally continues, and it has been a powerful one. we're seeing the 10-year note yield 4.1%, firming up a little bit but the theme has been lower

yields and treasuries higher. the 2-year below the level. movers we're watching, amg rallying after news that meta openai and microsoft plan to use the company's newestartificial intelligence chip. the ceo saying her company's new offering would cost less to buy and operate than rival nvidia's ai chips. the chips slated to begin shipping next year. rough morning for ryan cohen as shares of two of his companies sink. both gamestop and online pet company chewy reporting revenues short of system. some ugly reaction for chewy. watch dollar general as well. profit topping system, adjusted earnings did fall to five-year lows and same-store sales saw more than a percent. second straight decline and steepest drop in two years for that company. we got wholesale trade data out moments ago and rick santelli has it for us. >> yes, david. our final read on wholesale

inventories. this is october finals so that's the first month of the fourth quarter. very important. expected to remain down 0.2. once again, a big revision. these mid-month reads really had some big changes in variety of releases. down 0.4%. double the expectation. and that is the weakest level since june. and we know that inventory has been on the weak side all year because september of this year is the only month above 0. september of this year. on sales, also a big miss. we're expecting a positive number to be around 1%. now this isn't a final read. this is a new october read for the sales side down 1.3%. the weakest since march of this year, and it really does underscore the notion that inventories have been on the lean side, sales have picked up markedly outside of this. we all know third quarter was running gdp over 5%.

these are important numbers to pay attention to for q4, especially going into the holiday season. back to you. >> yeah. we're tracking under 2% growth for q4. big difference from the third quarter. thank you, rick. rick santelli. other big data point today that we're watching and that investors are watching, of course, is jobless claims. it's thursday. and we've been scrutinizing all the jobs data lately ahead of tomorrow's jobs report. what we got was claims edged up 1,000 last week to 220,000. it doesn't really set us off trend. it's not some alarmingly high number and kind of smooths over the average. continuing claims is another one everyone was watching, people who are continuing to file for unemployment claims and be on them. it dropped actually last week to $186 million -- 186 million. undid the filings -- >> 186,000. >> on continuing claims. people on continuing claims. that's what level was.

>> 186,000. >> 1.86 million. >> 1.86 million. i misheard you. >> the bottom line is, david, it doesn't point to any mass layoffs in the economy. it sort of continues the idea the labor market is cooling a bit, but not seeing any type of labor market recession. i think the bias for tomorrow and the jobs report would be for a weaker number because the treasury rally has been so strong and yields have come down so much. but, i would say, and chris is an economist that i follow that works at forward bonds, he says, as far as the data is concerned on jobless claims, it's not stressful enough to cause the fed to go from hiking to cutting in any fast way. that's not what the market is expecting, but it just is to let the fed be on hold with its higher restrictive rates, which is what we're expecting for the next meeting, and keeps the market guessing about next year. >> we get jobs tomorrow, but what's the next real -- where

are we going to be in this holding pattern? >> jobs and cpi. they're targeting inflation and it's not back down. we got a nice data point, manheim, used cars, that index continued to show vehicles continue to show decreasing value. we know goods prices have been deflating. it's really on the services. and we read into all these data points. i think the question for the market beyond just when the fed cuts, is how much further can this treasury rally go. that's been fuel for a lot of equity rally. i was trying to go through some of the notes and the historical data and what usually happens between a fed hike and cut. bank of america had a very good note this morning about that, and they think that treasury rally can continue. they look at the last five cycles where the decline in 10-year rates between the last hike and first cut, between 72 basis points and 163 basis points of lower rates.

so far we've gotten 90, 5 to 4.1. they're measuring it from a different place. the last hike the 10-year note yield was 3.87. that was in july. so they're saying if you measure it from there because that was the last hike, you could go down into the 2 range on the 10-year yield. if you look at least in the historical period. >> the 2 range before we get a cut? >> no. well, yeah. between hike and cut. 2.25 to 3.15 when the fed begins cutting if you follow the price action between those two events. who knows if that will happen. it depends on the data. >> depend on something we talked about for few weeks and not discussed which is supply and how much is going to be out there. >> yeah. that's gone on the back burner. >> remember the days when we were focused on maturity schedule and what refinancing needs were going to be -- >> we got a few months ago, a

higher than expected issuance number, and we had a few auction that were kind of iffy on the demand side. we'll continue to watch that, no question about it. so far they've been well absorbed and plenty of demand and the treasury has been paying attention when it comes to setting its issuance. we have a debt problem that's not going away. it's getting worse. >> we do. i have a feeling we will be talking about it in the future. >> we'll. i think they will talk about it into the election as well. big tech, microsoft is meeting with investors today. tech struggling in december but remains the best performing sector of the year. our next guest predicts an acceleration of spending around cloud and ai and believes the street underestimates it. joining us dan ives, wedbush security analyst and bob pisani joins us. first on microsoft, how much of a bellwether is it? >> the trophy case for ai is in

redman. if you look, microsoft's really the torchbearer. they're leading the way on ai because of co-pilot and what we've talked on this program is that for every $100 of cloud spend, there's an incremental 35 to 40 of ai spend. i think this is a golden age, led by microsoft, now seeing google and others, start to get on the train and in our opinion it's the start of a new tech bull market. ai driving it. >> any news you expect from investor day today? >> i think some sense in terms of maybe on the olypenai, depending on the questions. nadella talking about the strategic footprint going into 2024. look, this is a champagne quarter for microsoft. it's been a champagne year. ultimately, if you go into 2024, it's just the beginning. i believe that first and second i think of where ai is going and everyone trying to play catch-up to nadella and redman. >> well, meanwhile, the story

today in the market is really alphabet's stock price. even though interestingly, gemini was introduced yesterday. relatively early in the trading day. what is going on here? why is it getting that reception and how significant a competitor will it be in terms of putting alphabet back in the running so to speak for the lead position? >> yeah, we're bullish. >> you're bullish on everything, dan. >> importantly on a sum of the parts, i don't believe that this is a stock that reflects the ai success that they're going to have. if you look at gcp and google cloud and the opportunity with g gemini, what's happened is a delayed reaction a moment of truth in google and they delivered. i believe in the trillion dollar market they are going to be a significant player, but i believe enterprise, that's the golden goose that they're going after. i think you can start to -- >> they have something to lose on the consumer front as they

lose perhaps their position in search as by far the leader? >> i think right there, they're atop that mountain. i don't think they're worried about bing or anyone else. table stakes relative to what bing could get relative to search. enterprise, that's what they're going after. right now the game of thrones that's going on in tech between alphabet, microsoft, jassy and aws as cramer has talked about being out there, this is, to me, a 1995 moment. it is the biggest transformation that we've ever seen in tech, and wave talked about use cases are exploding. that's what google is going after. that's why this is -- i think this is a moment we look back, a historical moment for google. >> that's part of the bull story of the market this year, the year ai got priced in to nvidia and microsoft. do we get that next year? >> this is the critical point you brought up. i think of august 1995, the net scape ipo launched the internet

craze. is this the pivotal moment? is 2023 the year that ai had that once the a generation pivot, like the internet was in 1995, and i think you're on to something. first of all, i think you should take a victory lap. you were right all this year, relently bullish and laughed and mocked, but you've been right on your calls, wrong on your clothing, for years and years, but we love you for that. >> clothing influencer. >> he is a clothing influencer. >> you are. >> this man is making revenue from this. the crowd is watching you. >> those tops from bangkok, wherever you're getting them, keep doing it. when i look at the prices this year, nvidia up 200%, meta up 10, tesla up 90, are these stocks in 2024 recession proof? does it not matter? when we saw rates go up in september and october, these stocks went down as well. so try to take the other side of your relentless bullish --

>> i think sara and david, we've hit on this the whole year in terms of use cases. right. use cases. if use cases explode at this pace, which we believe they are and just in the enterprise, this is going to be -- it's a 1995 moment. i think this is one, recession proof, but i think you're seeing growth. i think 8 to 10% i.t. budgets will be ai in 2024. less than 1% in 2023. that's why you're seeing some mongo, snowflake, palantir, the ripple effects of broader tech. use cases expand, this really is going to be what i view as a not just a golden age, but a moment that changes -- >> the question i asked bob, is it already reflected in the stock prices with nvidia up more than 200% this year? what happens next year? >> okay. there's a [ inaudible ] reflected but i believe the street is underestimating the

montization that could happen. you could look at numbers from microsoft, essentially could be up 15, 20% ahead of the street and they continue to underestimate the godfather of ai, jensen, nvidia and nadella. >> what's remarkable to me is, that i don't see stupid -- i see stupid price moves. i don't see stupid overvaluation. i'm looking at nvidia 20 times 2024 numbers. that is not even outside of the normal range for their -- i see google, alphabet, 20 times 2024 numbers, that's a normal range there. apple 26. usually is 24 or 25. none of this like looks at -- i look at and say, oh, my god these are stupid valuations that are way above their historic norms. >> bob has seen everything over the decades -- >> he's really old. >> the story when it comes to what we've seen with bubbles, this is not a bubble. this is not hype. this is real.

>> in '95 we were there. i watched it too. we reported on it every day. two or three years in, there was an awful lot of capital being invested in things that got no return, none. is that at risk here? >> it's a much more discipline wad you're seeing from a vc, private equity institution. maybe some of the discipline is how many sort of missed the ride going into this year. i still think it's a get out the popcorn moment. this is not open. this is starting a new tech bull market. >> the story of 2024 is finally we're going to get true personal digital assistance. when i look at chatgpt and bard and gemini now, we're going to see a bob 2.0, dan ives 2.0, sitting next to you actually being a part of what you are and integrating itself into your entire life. i said five years ago, i think by 2025 or '26, 30% of the adult population will name a personal digital assistant as their best

friend. it's finally here. it is here in front of us. you can see it more. as jim said this morning it's more than just get me a plane to paris and find the cheapest route. it's human interactions we're going to see them making our lives better and helping us out. that's what really excites me. it's the year of the personal digital assistance. >> that's why musk, su, jensen, cook, these -- it's all focused right now. this a land grab. >> i wonder if it expands into banks and railroads and other service industries that can start to use generative ai to become more productive? i talked about it with the walmart ceo this week. i don't know if investors are value these companies with the productivity that they're about to have? >> that's a good question. >> i think you nailed it. i think that -- like to david's point, i think that's the rest of the market. a lot of that is not reflected in a lot of these stocks. all these ceos, board rooms, that's what they're focused on right now.

>> very exciting stuff. thank you. >> great. >> dan ives. >> congrats on the clothes. >> thank you. >> fashion influencer dan ives. as we head to break, here's our road map, the white house taking steps to combat high drug prices, but will it work? we'll discuss after the break. we'll get a fresh read on the consumer ahead of another big jobs report tomorrow and a fed decision next week. the ceo of hilton will join us. >> jamie dimon bashing bitcoin. not stopping the rally in cryptos. elon musk tweeting moments ago, taking aim at disney's bob iger, needs to learn how to spell mr. iger's last name. big show still ahead.

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there are no term contracts or line activation fees. and you can bring your own device. oh, and all on the most reliable 5g mobile network nationwide. wireless that works for you. it's not just possible, it's happening. we did want to take a moment to focus on a tweet from -- do we call them tweets? from elon musk on the x platform. there it is. this goes back to last week where he called out advertisers in no uncertain terms who were boycotting x in part because of some of mr. musk's tweets. he misspells bob iger's last name but saying hey you're not going to advertise on x but facebook and instagram content enable child abuse and yet you continue to advise there? and to refresh, take a listen to what musk had to say last week.

>> you hope -- don't advertise. you don't want them to advise? >> no. >> what do you mean? >> if somebody is going to try to blackmail me with advertising, with money, go [ bleep ] yourself. but -- go [ bleep ] yourself. is that clear? i hope it is. hey, bob. if you're in the audience. >> let me ask you then -- >> that's how i feel. don't advertise. >> so there it is. he continues, sara, to be focused on this. >> it's a fair point. >> it is. there's a fair point there to be made certainly and, obviously, it's also off of our story by the way on cnbc.com. >> elon gets a lot of headlines for whatever he says and does, but if you look at all of the social media platforms you can see there are problems, whether

it's this, the child issue, rampant hate speech. i think nikki haley in the debate brought up tiktok and said we need to ban it because she cited the study that found spending 30 minutes a day on tiktok was associated with a 17% increase in the likelihood that kids will hold anti-semitic and anti-israel views. talking about it in that context. i think there are questions for advertisers -- they don't get them as much -- on tiktok and on instagram and meta, they only get them on x i think because of elon's larger than life persona. >> i agree -- >> we should ask them. >> you're right. we should ask mr. iger,i-g-e-r. >> no "e" in front of it, elon. >> this will continue to be an issue. >> big news from the white house this morning when it comes to combatting high drug prices. let's get to bertha coombs with the details. what's the strategy here, bertha? >> it's in a way an extension of the inflation reduction act. the biden administration is

asserting its right to seize drug patents of certain high-priced drugs that were developed with government funding. now the 1980 bayh-dole act let universities and small companies commercialize discoveries made with government funding like medical technology, drugs, google, quantitative computing, but now the white house wants to use a provision of that law to take on high drug prices, nine months after the national institutes of health denied a petition from cancer groups to use that provision on a cancer treatment that lists for more than $150,000 to allow other drugmakers to produce it. the bipartisan law does allow it when a patent is allow to lay dormant, breaking the patent on the basis of price has never been done. elizabeth warren applauded the effort to expand -- >> when there's no competition in a market, then that falls hard on people who need that drug. it also falls hard on taxpayers

who end up paying for it through other government programs. it has been in the law for a long time and hasn't been picked up in years very aggressively yet. >> even if you selectively march in, it could protect patents with small firms that get a big hit, right now they're not subject to the medicare price negotiations under the ira. pharma says the rule will set back research by 40 years. allen, a former staffer for senator bahy told me the provision was meant to prevent patent holders from keeping inventions from the market, not going after prices. >> 40 years? did i hear you say that. 40 years. >> over 40 years since 1980. the idea was to help universities and get a lot of these patents that were laying dormant to get out there and develop these products. in health care we've seen

tremendous strides. now the question is, can you use it to spur competition on the basis of price? the administration thinks they can. >> yeah. somehow i think this will end up in the courts as well. thank you. bertha coombs. still to come, oil falling below $70 a barrel. we're going to have some excerpts from my interview w exxon's chairman and ceo a little over an hour ago. they introduced a significant growth plan yesterday. we'll share some of that with you right after this.

why are we the only birds heading this way? ♪ ♪ what is that? duck à l'orange. what's duck à l'orange? it's you, with l'orange on top. . take a look of shares of exxon mobil. darren woods joined us. we talked about a number of different important data points and oil production and the future for its low carbon business. we also got a read on this dispute between venezuela and oil rich guiana. venezuela passing a motion

basically that says there's disputed territory we believe is ours. guyana only has a million people and raised questions if venezuela were to get hostile could the country defend itself. guyana has a lot of oil. exxon mobil is the key operator along with hess, being sold to chevron. i asked mr. woods if he's fearing any impact from this potential hostility? >> i'm not sure guyana is standing on its own, to tell you the truth. we've seen what happens when nation's sovereignties are challenged and unilateral action is taken. the world and outside community have grown sensitive to that, so my expectation is, there's more support, more broad support in the international community to make sure that the right process is followed to resolve this dispute. we know what we need to do, develop those resources economically, environmentally, responsibly, and do what we've been contracted to do. that's what our organization is

focused on. >> could be talking eventually as much as a million barrels a day out of guyana. very important. there is focus on this. by the way, for chevron, hess is the second partner there, exxon operates, but hess owns a lot of the acreage, there's worries. what does that mean for the value of hess if this were to escalate, so to speak. >> if venezuela invaded and took over -- >> correct. exactly. we know what they did with their oil. they nationalized it. >> haven't been able to meet their own fuel production needs. >> they haven't. and then we spent a lot of time as you might expect, as we have now for a couple years, talking about low carbon solutions, their efforts on lowering emissions, increasing spend on that, by the way, from $17 billion to $20 billion through 2027. and i did ask, you know, mr. woods what else needs to happen here to sort of get you to spend even more and get the kind of return that your shareholders might want that would be enhancing to your free cash

flow? >> if you want broader application of carbon capture storage it has to go higher with time. we view this as an opportunity to get started, get the technology in place, start building these things and generate efficiencies and see if we can't find ways to lower the cost from a construction standpoint but from a technology evolution and scale standpoint. david, i got to be clear. >> yeah. >> for this to be successful with time, we've got to move from government subsidies to a market force. we see this as being a temporary catalyst to get started. >> right now it's just $85 a ton in terms of carbon, what the tax credit is so to speak. they would love it to be more, but would like the market to form around them. they are making real efforts, it was a key question of our documentary some time back, but since then they have. they've got a number of contracts to sequester carbon for certain companies. they bought denbury, the largest

pipeline to transport carbon, the permits to store it underground in the gulf of mexico. >> they're walking the walk? >> they seem to be. many would like them to spend more and become a significant part of their overall business. >> inflation reduction, that helps? >> it helps. as woods made clear, none of it is -- a lot of rules haven't been written yet and will take place over the next year. that will be very important for them. >> right. it provides the incentive financially. >> correct. >> exxon shares as david mentioned, i mean, they've been buoyed by oil prices which have been weak lately. >> yeah. i mean, you know, he talked about basically the demand -- the supply and demand picture being less supply over time. >> yes. >> he doesn't know cuss on the short-term moves. >> yeah. he would get a big headline. >> $69 a barrel, but still down about 8% over one week.

still ahead, jpmorgan's jamie dimon sounding off on crypto. he took it up a notch. we'll bring you the headlines. plus, don't miss a fresh check on the consumer. we'll talk to the ceo of hilton as that company celebrates ten years since going public on the new york stock exchange. he's going to join us next. don't go anywhere. (sfx: stone wheel crafting) ♪

the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ the power goes out and we still have wifi whato do our homework.py? and that's a good thing?

great in my book! who are you? no power? no problem. introducing storm-ready wifi. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network. . welcome back. i'm silvana henao with your cnbc news update. the man who killed three people in a university of nevada las vegas building wednesday was a former professor who had been turned down for a job at the school. sources have confirmed to nbc news authorities say they killed the 67-year-old man during a shootout. they have not officially determined his motive. donald trump is attending his $250 million civil fraud trial in new york today, as the case enters its final days. an accountant is expected to

take the stand as an expert witness for the defense. the former president is expected to testify once again on monday as the defense's last witness. and the blockbuster "oppenheimer" is getting a release date in japan where it faced fierce backlash. the film tells the story about u.s. efforts to develop the world's first nuclear weapon. critics called it inkrevtive towards the only country to have suffered an atomic bombing. it will hit theaters there some time in 2024. david? >> thank you. the price of bitcoin has soared more than 150% this year, and more recently, topped 44,000. this is on hopes of a future etf. ceo jamie dimon, well suffice it to say, he is still bearish telling the senate banking committee crypto currencies should be banned. take a listen. >> i've always been deeply opposed to crypto, bitcoin, et

cetera. you point out a true use case, is criminals, drug launders, tax avoidance. if i was the government i would close it down. >> kate rooney, it's not like he hasn't said this before. those were stronger words. >> he did seem to ratchet up the criticism and standing in front of congress which is a little bit more weight. despite jamie dimon's warning the sector is doing well. stocks tied to crypto, coinbase and micro strategy are the best performing, up roughly 300%. it's been a tough time to bet against those crypto proxies from s 3 partners, show short sellers have lost $6 billion this year on the crypto-related bets. half came from coinbase shorts. it became a popular trade. short sellers increased exposure in what they thought was an over bought sector. they are down $2.7 billion in the past few months. in percentage terms about 148%

in terms of losses. traders have started chasing the momentum according to vantrack. they started rotating out of the tech names into crypto and crypto proxies and small caps. bitcoin mining names, coinbase, micro strategy v benefitted from the retail inflows as well as some of the less popular crypto proxies like clean spark. some of them mining names. they point to a january 10th deadline for the sec's potential approval of a bitcoin etf causing this excitement. they say seeing a momentum driven asset class with a clear catalyst on the horizon. we wouldn't be surprised to see retail traders continue to pump flows into the space over the coming weeks. back to you. >> thank you very much, kate rooney. hilton celebrating ten years since going public on the new york stock exchange doubling its brand portfolio, growing the property footprint by over 80% in the time and seeing the stock rocket 260% at a time where the s&p 500 is up about 150%.

joining us now to discuss what's next, hilton worldwide ceo, christopher nassetta. thank you for joining us here on this big anniversary. >> thank you for having me. david, great to be here with you. you gave some of the great stats. we've had a really remarkable ten years since going public. we've been a public company for many more years before that. we nearly doubled the size of the company. we have the biggest pipeline for future growth in our history. we're opening now almost a hotel a day. our loyalty program has quadrupled over the last ten years. we've led the industry in innovation from a technology and customer point of view. very importantly, we're in the business of people serving people, we much just named the number one great place to work in the world, so we're very proud of the culture we've built. as you pointed out, you know, my numbers say we're up 330% since the ipo, so we'll have to ask

somebody to fact check. >> you're outperforming the market. >> dow jones, s&p and our competition. >> congrats on the milestones. it has been during some interesting cycles for the hotel industry. >> for sure. >> tumultuous, including covid and then post-covid, and it brings me to the question that everyone is wondering now, is have we seen the bulk of the travel recovery at this point? >> we haven't really. we still see a lot of strength in all our big segments. you're certainly seeing a normalization as you would expect in leisure business when people didn't go to work and kids weren't in school. you saw sort of an abnormally large increase in leisure business. that is still very strong relative to precovid, but it is normalized. what's making up for that is business travel. everybody wanted to say -- i think it was on cnbc -- >> never coming back. >> it was never coming back. nobody will go on a business trip. guess what? they are. this thing called incremental

flexibility and work schedules, more mobility, that's good for our business. >> are we back to 2019 levels on business? >> the bulk of 85% of our business is small and medium-sized businesses and that's over '19. big corporates are still a bit under, but even in this environment, which is slowing, they're growing. the other segment, this is only about 20% of the business, but important, particularly in the big cities, meetings and events, demand is off the hook. people didn't have meetings an events they needed to have for basically three years, and so there's a huge pent up demand. >> for next year too? >> next year we have booked in the last two quarters for all future periods more groups than we've ever booked in the history of the company. we are way over any historical high water marks in terms of meetings and events for the finish of this year and next year. as we think about next year, reality is the world is slowing,

the economy, you guys pointed out, i watch you all the time, is slowing. we expect that we can't ultimately, you know, operate outside of the economy, but we have some reasonably unique things in the sense of more business demand and international inbound business, that we think are going to be quite good as we go into next year. so i feel really good about the setup from a demand point of view for us next year and we're growing like crazy and we're going to -- >> but what's normal i guess? given the environment you're discussing which is one of at least potential slowing in 2024? >> what's normal? >> yeah. >> i mean in the sense of to the extent that, for example, events you said, people want to get back and do it, but i don't know what the normal pattern looks like and/or this revenge travel period people say we're through? >> leisure is in the process of

normalizing and it will be normal. the normal fall in our industry for the last 100 years is when g kids go back to school and people back to work, they do less leisure travel. that's what we've seen this fall. it's a normalization. i think we're going to -- next year e -- we'll see normalized leisure travel. we will see travel pick up. all of our customers big and small will tell us they will travel more for business next year. i think our group position for meetings and events next year is 20% above prior precovid levels. that's the biggest piece of the business where we have visibility. >> what's going on with hiring? for a lot of the post-covid period, you guys have been the biggest source of job both in this country. you were the biggest source of job loss during covid. are we done with that process? >> we're not done. >> i saw adp it was a net job

loser for the first time in a while. >> we're not done but slowing down. the reality is we lost a lot of our teams because we went to basically zero or very low revenues that had a lot of impact not just on us, but across the industry. over the last three years we've been building that back. we're bigger in terms of number of people than we were precovid, but we're a lot bigger company. every year we're growing 5, 6, 7%. while it's gotten easier to get the people we need in jobs it's still not easy. we're not back to fully what we need staffing wise. i expect through the combination of growing again next year, 5.5 or 6%, and sort of right sizing incremental staffing to make sure we can deliver service, we're still going to be hiring people into next year. >> none of this sounds recessionary. >> no. >> quite the opposite. >> you don't think there's a

recession coming? doesn't sound like you expect one? >> i think there's a slowdown coming and i would not be surprised if we have a modest recession. you guys talk to smarter people on the economy than me. soft landing is sort of the, you know, the consensus view right now. i sort of buy that, and as i said, i know it's like we're different, but we are a little bit different in the sense that a lot of industries have fully recovered beyond and we haven't from a demand point of view. we still have a bunch of segments still in recovery that i think sort of help us get through a slower time. the fed will do its work. the fed is going to do what they need to do to tame inflation which by definition means we are going to have a slowdown. is it going to be a recession? i don't know. we're going to slow down into next year. my job is to, you know, fight against that by taking advantage of the business that's out there that's still recovering and for us to gain market share and do

better than everybody else so that more people stay with us than the competition and as a result of those things, perform well. i'm feeling pretty good about what the setup is for next year. >> thank you for coming here. >> always great. >> to celebrate the ten years -- >> i like to see all the hilton signs. >> lot of hilton signs. christopher nassetta, thank you very much. still ahead, a look at one country benefitting from a near shoring boom. "squawk on the street" is live from mexico next. stay with us. all right, sheila, are you throwing a dress like a dad party, a birthday brunch, or a vow renewal for your dogs? yes! the right drinks delivered for any party. drizly.

companies from tesla to at&t are investing billions in new manufacturing capacity and not in china. with investment in mexico, now on pace to reach $30 billion this year, our frank holland is live from monterrey with more on what some are calling a near shoring boom there. >> good morning from mexico, sara. as you mentioned mexico is estimated to have $30 billion in

direct foreign investment as part of the near shoring boom, money from outside the country to build new manufacturing, distribution and storage facility. take a look behind me, this logistics complex where tech, consumer and industrial goods are heading to the u.s. market, is just one of many examples here in the monterrey area. tesla, mondelez, hewlett-packard, a number of other companies, unilever, honeywell, mattel, the list goes on and on, of companies moving or expanding production in mexico this year. so according to the founder of zip box, a sourcing platform designed to give u.s. companies access to the mexican suppliers, tariffs and supply chain are key factors. >> people haven't forgotten about the trade war, the poor congestion and think about taiwan and see headlines and understand our future with china isn't stable. even though xi came to san francisco, that didn't do much. people understand that it's shaky ground.

when you have all your next that basket it's scary to think you're vulnerable if anything changes. if you were importing from china when the trade war happened, you don't get a warning. you get a headline and that's it. >> less expensive labor making near shoring according to new data from alex partners, workers on average make $6.50 an hour in china compared to $44 an hour in mexico. we spoke to several manufacturers and say that advantage is being lessened by the mexican government announcing 20% increase to minimum wage for 2024. back over to you. >> thanks very much. a story we'll continue to be all over. up next, we'll unveil the number one whisky of 2023 and discuss the crucial deadline that will have a major impact on that industry. don't go anywhere.

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the spirits industry facing headwinds going into 2024.

sales of whisky are slipping. last year, for instance, tequila and mezcal overtook american whisky to be the fastest growing spirits category by revenue and volume, according to u.s. distilled council. brown foreman seeing a 2% dip in whisky sales for the first half of the fiscal year. not in my house. i'm a big whisky drinker. >> you are? >> i am. >> i didn't know about that you. all of this is happening as whisky industry is facing a 50% tariff on exports to the eu. that would begin on january 1st. former whisky advocate, senior tasting panelist, jeffrey joins us to discuss and reveal the number one whisky of 2023. first, let's start with the tariff that will take effect only a few weeks from now. what kind of an impact will that have on the u.s. whisky

industry? >> we've seen the impact before. we're on a two-year hiatus from this tariff. that deal comes to an end on january 1st. at which time it will jump from 25% to 50%. we've been there before and it severely impacted the industry. >> what were the declines? >> i don't know the exact number but we were on a steady path upward and that was the first reversal. >> is there any chance of a change and the tariff won't take effect? >> a lot of people are lobbying for it, mitch mcconnell, rich paul, because 90% of american bourbon have been writing to the president, ambassadors in the eu and pleading for a deal of some kind. >> how is american whisky doing compared to what's produced in europe or japan or other

countries? >> american whisky has had a great run, especially in the u.s. when i started in the industry it was all about scotch and that was considered the greatest in the world. american whisky has been on a great run. there's a lot of excitement, especially among millenials and gen z about bourbon. >> i like scotch. i like the smokey stuff. >> oh, yeah. >> we have to get to the whisky, i'm told, because we're already running out of time. let's get to what is, of course, the number one whisky of the year. we can do a drum roll if we have one. >> if i can give you quick context, we have our top 20 of the year, which we're revealing this week on whiskyadvocate.com. we look at 500 whiskys we've tasted, we consider the quality. they've all rated 90 points or higher and consider the price, the availability and something called x factor, which is exciting story behind the whisky. this is our number one. >> let's do it. >> oh, wow. like an oscar. >> i don't even want to venture a guess at the name.

>> it is glenglass sandin. it costs about $70 owned by brown-forman who makes another whisky you may have heard of, jack daniels. >> what distinguishes this. >> it's not only delicious tasting but a great comeback story. the distillery was founded in 1875 and reopened in 2008. it's new on the scene and these are the first releases from the new stocks. >> awesome. jeffrey, thank you. thank you for the reveal. sara will take that bottle, probably take a few glasses for the next hour of "squawk on the street." >> i save the evening for my whisky. >> we have more "squawk on the street" straight ahead. re and ms move to the cloud. - so, the question is... - cyber attack!

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you can't buy great conversations or moments that matter, but you can invest in them. at t. rowe price our strategic investing approach can help you build the future you imagine. t. rowe price, invest with confidence. good morning. welcome to another hour of "squawk on the street." i'm sara eisen with mike santoli from post 9 of the new york stock exchange. td cowen president jeff solomon on why he thinks the fed should hike another 25 basis points next week. and