good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and tadavid faber. following yesterday's 1,000-point swing, the market is hungry the road map beginning with omicron volatility the dow is trying to claw back some of the losses after the biggest session reversal in over a year. >> china is clearing the path

for boeing 737-max to fly again. shares are up on the news. apple is moving higher, the company reportedly telling suppliers that iphone demand has slowed, but jim never likes rumors. >> once i found out there seemed to be weakness, i tried to get it confirmed, and any supplier that confirms it is fired. so the idea that any supplier would say to anyone in the press that things are weakened means that that supplier would no longer be a supplier so that's a pretty big contract to lose. on the other hand we have goldman saying supply and demand have met each other, we dbush supply saying it cannot keep up with the demand. so i think that -- i'm going

with the wedbush and goldman views, so the telecoms are the biggest buyers so far i understand they're still trying to meet demand. >> don't forget stankey. >> those are the -- if i heard from hans we are so full up with phones that we're not going to -- i'm not getting that calling. maybe you're getting that call when you were down at exxon. >> no, i'm not getting that call >> so let's put that out there my experience as a reporter and as an anchor was that if a supplier actually confirms to the media that there's some weakness, that supplier is canceled so i think that there will be someone canceled if that story is true. i doubt that will happen okay this is real life that i had it

happen >> okay. >> what do you mean, okay? i'm saying i'm not buying the rumors. >> i understand. >> i'm buying wedbush, i'm buying goldman for all i know is apple double ordered so they wouldn't have a miss >> that's an interesting point you should spend a moment on that. >> well, when you want chips, no matter who you are, there's a propensity to double order -- >> in this environment, so you make sure you get -- >> once your supply meets your demand, this does not necessarily mean weakness. maybe you want to tell a reporter it means weakness, that meets maybe the apple switch, so i'm just saying that while i don't think that apple should have been up to 167, i would not sell it on this news. >> you're saying it's like -- everybody has their own -- >> it is like rash ayman

>> i know you noticed morgan stanley cuts freight/transportation, because they see inventory and prices coming down as a result. >> we had lance fritz on yesterday. he said the opposite he happens to be the ceo of union pacific. i'm trying to get to james squires, because i don't like the fact he retired and he's younger. apple is calling skyworks saying, listen, man, we're weak, we're in trouble is that tim cook making that call right now >> i don't think he's making that call. i don't know who is -- >> call liam, or sales are really week. liam is the bigger supplier. we're in a jam here at apple do you think that's happened >> you clearly do not believe it is happening. >> listen, man, we don't need

anything more, because things are bad. who else do we have to call? right? >> yeah. >> hey korvo you might at well be tequila. >> get on the phone. qualcomm, listen -- we're in such trouble here. >> the sarcasm is thick. >> how far down the chain should we go. >> i don't know. >> it's just unbelievable that anyone -- it started filtering out when we heard about san francisco, we heard about someone, and we heard the person was double vaccinated, and we realized, wait a sect there's

over -- people who have gotten covid, who apparently are not immunized, it doesn't count. it's not immune. >> the vaccine is nonmodern or pfizer or -- >> no, no, if you got immunized by having covid the authorities told me last night that immunization may not work against omicron. but no one is telling me the vaccines don't have a good level. i was with someone who was as high-level doctor at johns hopkins. how many who are vaccinated have died at johns hopkins? >> none. none. >> thank you but there are many people who refuse to get vaccinated by the end of the dame if you think we won't have more omicron victims in this country, i think you're dreaming.

>> 21% of adults have had a booster, which essentially means you have 100 million people fully vaxed, but not boosted merck toda-- merkel saying today vaccination is good for about nine months. so they're trying to push boosters all the way around the world. >> i think when dr. topol was on "mad money", he said we shouldn't call it a booster. the fact is the two-shot regimen was not good enough. >> it's always been three? >> but our fabulous nih, the cdc combination of people -- get the clown cars out at this point they -- they did not tell us -- pfizer told me early on you need three, but pfizer is worried about people talking about price gouging and pfizer was trying to -- even pfizer was saying over and over, you'll need the

third. the medical establishment is saying basically they're worth three, but we only gave you two. that's being used by the anti--vaxers saying they told us to get two, now it's three, so will there be four so there's continues evidence that the anti-vaxers are getting from the nih, and i include dr. fauci. you talked about some bullish -- wouldn't it be weird if this new variant accelerated us to the end of the pandemic with a mild severity, and gets you closer to seasonal flu, which would be positive for risk, steepen the curve, pull value above growth >> omicron is freres here to here, delta is from here to here it's a podcast, anyway. >> you're just talking about a

head cold. >> and the rest you can consider to be like pneumonia >> i would only say at this point we still have a lot of questions about omicron. maybe the vaccines will prove to be effective we don't know a lot of things and it may be still a couple weeks. >> they're selling pfizer and moderna as if this one person in california -- >> moderna has moved up a lot. >> the dow futures -- they were 350 at 4:00 a.m. what kind of stupid idiot -- >> let's move to something else that happened this week, powell's testimony, the fact that has crushed a lot of growth names, including salesforce, this obviously even with the guidance -- i know guys who lost a lot of here on names like

that it wasn't omicron, it was powell. >> that's true it was not expecting 40% we have price target cuts, crowd strike, which is on "mad money" tonight, a cloud-based cybersecurity, they crushed it the stock is getting crushed why are they cutting because of powell. >> that's the point i was trying to make. i appreciate your helping me make it. >> how about exxon >> what about exxon? >> chevron announces an increase in their buyback. >> i saw that. but that crowdstrike, wow, that was a quick fall >> it was great. it was great

pre-pow, preworries, and i would be so excited. sub-optimal? >> there's been no real full vetting of why a person who's been -- suddenly leaves splunk he's on "mad money", has run the company, now he's gone what's up? >> i don't know. there continue to be -- i know there's talk about, well, could this thing ever get sold >> it's old technology >> you don't necessarily think there's a buyer there? >> well, there's not a real ceo. the problem is that they're trying to converse to more of a subscription model you want to get in there ahead

of time, and it just got slapped. by the way, can i go over that from one moment? that guidance was utmost low balance, and it's probably not done being crushed. >> b of a yesterday noted that crm tends to beat it historically last year they guided 16, ended up doing 20? >> they beat the last guidance by 36. i think people are worked about mark retiring and bret taylor coming in. david, i'm going to reassure you, benioff is not going anywhere. >> i can rest easy i feel better now. i really do. what does that have to do with marc benioff? >> you had a great interview -- >> thank you. >> -- and i keep thinking an

incredible revolution of our oil industry to have more conscience about pollution -- >> philip morris is out this morning saying we've done a better job in aggregate than the oil companies. >> oh, geez. i said the oil companies were un-investable, guys like sheffield, the pioneer, they said, listen, we hear you, man >> listen, they're pursuing things that whether bring them into the better graces, but there are plenty of esg top-down strategies. >> you're telling me that a company is saying -- while they cause cancer, it's less cancer is that the deal by the way, guys, buy us, we

cause less cancer. less some -- >> it's in the pitch [ laughter ] >> fewer people are killed by us than others. there's something. take a look at futures we're going to watch to see if we can hang on to gains. the curve continue to say flatten. claims were pretty good, though, 222, we were looking for 240 we're back in a moment

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comcast business. powering possibilities. china setting the stage for the boeing 737 max to fly again, but it doesn't say when. you're saying this is a very big thing. >> my source say at boeing there's be some big orders from china very soon. this is why i've been owning the stock. they haven't gotten any big orders since 2017. they're the largest buyer of planes i've been to china. >> i have, a number of times, but not in a while. >> nike, apparently sales are

strong. >> okay. >> starbucks apparently things are good apple. >> all companies that rely on china for-- >> so why don't we just put the mosaic together and say, because the olympics consider umming up, they're besieging our company with his orders. they don't want a boycott. >> that's an interesting connection to make i don't know if it's raid or not. >> i worked on this theory for ages and you're questioning? it's good to question it. >> you may be putting too much faith in the china government's ability to will its people to do things. >> really?

what, buy more nike? somewhere more coffee from starbucks? >> you know the ministry of supporters deal with nike. i'm not making that up >> well, don't you think they're worried about -- >> how dodds this -- guys -- >> they may be worried about the olympic boycott. >> i think there's too many companies. i've checked with carl, and it does indicate that things have gotten better. how about that better in china. let's leave it at that >> as you guys are talking, officer down 63.77, as russia floats the idea of an opec cut. >> wow i was looking at the curve, the curve for oil has actually gotten a bit better of late, you know, just taking a look at that, got it for -- the heavy --

not that long ago, it was at 55, november 26th, just jumped to 58, so the longer term demand is looking up wow. >> obviously that's 20% plus off the october highs of 84 maybe? >> jay powell, had a note about that, stick talked about it. >> the spr in conjunction? that did nothing, but omicron, this, now suddenly we're -- >> if i were jay, i would ask for a do-over. >> a do-over, on what? his testimony? >> we're winning the war against inflation, but we're worried about supply chain interruptions, which causes prices to go up, a do-over >> you were working in 1974 -- >> it was child labor.

>> i worked making cigarettes while i was debating whether to work for oil companies [ laughter ] we'll get cramer's mad dash and countdown to the opening bell to what is turning into an interesting thursday we'll see what the oil drohap s on the overall markets s&p futures have gone red. don't go away.

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good every single company's estimate was vastly exceeded.

remember, it's the cloud here, as i mentioned, which is different from rent the runway you rent the data annalytic >> we asked about splunk with frank, he was a "techcheck," not "mad money." and frank has just a fantastic model. this is one of those ipos that worked it came around the same time as airbnb and doordash, and all of those works. >> allbirds had a bad 1/4. it's still above the ipo price, but not above the price it traded on the first trade. >> but i tent to think of all these -- and. >> that's a good point i do recall, when it did come public and it soared, we did

talk about incredible valuation. >> 100 times sales >> 100 years worth of sales. >> and it will have earnings. >> yeah, it doesn't yet, though, but it's in a very big earnings break zhao. >> but he's talking about enormous numbers. >> it's an inflection appoint that's just extraordinary here everybody in the data business says frank wrote a really good book, and frank is one of the smartest people. he then, you know -- >> yeah. i know, listen, he's one of those guys you support completely >> i like that i like people who don't believe in having a life other tha work obvious on your tombstone, "he worked harder than others. >> you will regret not spending more time at work, unless you do. >> i like working.

carl, i would rather be with you guys. >> i'm just happy we're all together. >> my wife doesn't even know -- >> i'm happy we're all together. we have the opening bell coming up. dots forget, a lot more people telling me they listen to us as a podcast. >> that's why i mentioned it >> stay with us. we're back after this. earn abou,

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retail up 4.5, the f-seeries, jim, once again the best-selling trucks for the 45th year in a row. >> wolfe is also talking about how the stock is up a great deal jim farley, remember, they have the feismt-150, it's an ev i understand the downgrade that's a game that wall street

plays. the stock is up big. how do you get back in if you want to play that game, good luck. ford is up 134% year to date and i'm sticking with ford for mire charitable trust [ bell ringing ] here's the opening bell. at the big board, harbor disruptive innovation, in singapore, it's grab, celebrating its listing via spac, as we get some solid breadth this morning ford yesterday was gm raising their guidance. >> i do not understand why that stock is still selling at a remarkably low multiple given how well she's doing this is selling at eight times earnings mary barra is delivering

the line to get it is very big i wonder whether my china theory extends to gm. i know david was talking about how much of a demand economy it is i think they can certainly make you feel like you're not in trouble if you buy an apple phone or a lincoln. >> have they ever made you feel like you're in trouble >> i think so. i think they've favored at times another kind of phone. they have providers of phones in that country that have a significantly higher share than does apple >> are you fascinating by the lincolns, there's famous people who like lincolns? matthew mcconaughey and neil young. >> matthew mcconaughey gets paid a lot of money for advertising, right? >> i got to meet him once.

i was just awe of him cristiano, our sales are weak, please make fewer -- is that what's happening right now we have -- >> i think he's doubtful of the story that up ale is -- >> i kind of like it the stock is up very, very big, so it's perfectly realistic that skyworks could be down on the story, because they would be the alleged source, most likely, and they're not. >> for a morning where merkel is talking about mandatory vaccinations, the white house is looking at extending mask mandates for trains and buses. some of these travel names are holding in. >> isn't it something? you know, that's once conuns drums of this, you have the stocks that are vaccine stocks, that are going down. people must thing that omi

omicron -- all of those are down people -- you better steel yourself for more omicron, because you can't just get one, okay >> it is first patient in israel who got it, had many contacts, only one of those has tested positive since. >> and apparently that's the same thing in the netherlands, claiming that people who didn't have it -- >> and we also don't know in terms of symptoms, and we don't know exactly about what the vaccine's effectiveness. we have to wait netherlands have not published anything what is that about >> i don't know.

is moderna going to be the outlier? if there's anything below -- it's minus seven,. >> kroger will lead us today they raise the guide on comps. >> costco missed by a good opportunity, trying to get in and out of that one. i think sara has kroger, and rodney will give -- is there a

call on uber today >> i thought the uber call was funny. this is if you get -- called, what appear i looking at i always add improvement on the situation. i suggested perhaps it should start with the $60 price target. >> why make it a double off the bat? >> i was going to write 58, but then people would think i was going facetious. i do this thing called "what i'm looking at." in ten years, have you looked at it >> i look at it almost every day. >> i have the apple data

okay, i'll cut all my orders, tim, but i went with the jpm jpmorgan, because that's the pollyanna view. >> yes >> do you remember when trump said in february of 2020 that covid was contained? >> yeah, that's not going to happen you have to realize if you're selling and you're down that much, they're selling. the payment stocks have had an issue of their own long before omi omicron. >> in the face of square changing its name for block,

delaying -- afterpay delaying the vote as the bank of spain i guess is the big holdout, right? >> one of things i love about square the cfo -- remember, jack won't do -- but jack dorsey, he would not come on for square they are so pro-crypto there they want to be the crypto, and a lot of us want them to be crypto because of the problem we have we can't figure out how. i asked square to be our bank i wouldn't be surprised if jack dorsey became the bank of crypto >> i'm pro-jack right now.

i was telling him to hit the road last week. >> well, he did. >> ump surprised he was even on the board. >> yeah. >> that happened quick. >> can you imagine that? co-ceo of salesforce what else are you going to do? what's the triple crown there? >> shares of salesforce are up a bit. >> holy cow. i have a note that says in the event of nuclear war, buy salesforce that's how much people hated it yesterday. >> i haven't talked about spacs in a long time. >> you work? >> no, wework. we talk about them as an alternative way for companies to go public, but there is a merge are agreement. fertitta entertainment, the gaming, the restaurants, it's

doing really well. i think as much as i'm hearing, and it wants out of its deal it doesn't want to be public anymore. tillman basically said their former partner, hey, we're out, we're out, pursuant to section 10.02 of the merger agreement, we're out, and we'll see you later. we want to stay a private company. that said, the spac in question says, no, you can't do that. that's invalid, uninfeenforceab. so the xtf obviously -- fst, excuse me, is the symbol, would end up in court or some sort of settlement, but interesting, there's been such a rebound in

the businesses remember in the early days of the pandemic, there were a lot of questions in general about those companies, they have rebounded dramatically, so much so they're like, meh, we're not interested in pugoing public anymore. >> you mentioned gaming. we do have mlb owners locking out players, setting up the first work stoppage since '95. i wonder, dkng is up a bitting, but it hit a low. >> that group is under a lot of pressure it's customer acquisition, and there's two things that determine how well they do even more states approve gambling, and they need customer acquisition at a lower price

i think a lot of these companies are spending too much money to get customers. it's not sustainable in some cases. listen, i'll take the hit. i think it's interesting. >> yeah, you pointed that out. we do spend an awful lot on customer acquisition, and then there's the question of do they need even more scale, and we know -- >> arizona got a lot in a short time. >> they did try to gain global scale to a certain sense it didn't happen, but i would assume that they continue to look for those opportunities, though it's hard to do a deal if you're going to try your own stock price. >> and tremendous amount of insider buying with draftkings you can argue they're so far down a lot, but you can't flip

look, i think -- fan duel by far has the biggest market share, by far. penn national, very small, but they're doing a great job. they're just not a big player. >> we obviously would keep our eyes on potential impact on sports television. disney yesterday got to 142, as they now have a new chair, jim, replacing bob iger it will be susan arnold. >> my charitable trust owns disney, and obviously omicron, terrible news for them, but i think the change at the top is somewhat expected. >> we expect him to step down as the chairman as detailed some time ago when he actually stepped asuit.

>> hearing about disney plus >> well, i mean, the subnumbers did slow down, but the longer-term target didn't. >> that's what i thought. >> there's many people who don't doubt they will be able to achieve that. >> that's why i bought the stock for my trust obviously that was mistaken. i thought because they didn't lower the long term -- >> and then there's a question whether they need to broaden the service. does it appeal to enough people to be able to reach that that's a question malone raised it a bit in the interview we did a couple weeks back. others have. >> you need really beautiful characters in the omniverse, which means you need john's

tools. that unity was a terrific buy, but it is important to point out that the amazing interview with cathie wood by sara yesterday, that she owns 4%, an aggregate, i believe, and she's dumping it, which really doesn't matter. remarkable opening here with bret so solid, yet the vix near 30 bob? >> that's a sign of how volatile the market, and just how on edge everybody is we were crazy in the preopening. it was all over the place.

to look at jay powell's apparent about-face take a look it's nice to see a bounce in the groups even energy, which started negative tech is flattish because of the apple, but good to see a bounce in value jim was talking about oversold conditions the market is very oversold. what does that mean? down, 12%, 13% in the last week? that's a lot

>> put that up there. apple is down a bit, and it's bounced very quickly in the last 15 minutes or so the apple story, i'm totally with jim on this dan ives says iphones are going to be robust he's talking 40 million iphones during the holiday season. but wouldn't it be nice, with all of that said, wouldn't it be nice to see a bounce in the value sectors today?

johnson & johnson is finally bouncing as well it would be nice to see a bit of rotation going into this group parts of the market have been trashed. remember the marked used to move together not anymore. big dispersion there there's a 30 percentage point spread between microsoft and apple and did i any and boeing, and almost american express. is that a lot? yes, that's a lot. absent as individual stock story, that's an enormous dispersion in a two-month period i don't know if we'll get that bounce if you want to look at a bigger level, s&p growth is up 9%,

value is essentially flat. until we get more news, and i think it's the december 15th fed meeting where we'll have more news on the omicron and the virus and its transmissibility and the effect on vaccines, and finally, of course, a little more clarity from jay powell on december 15th. carl, back to you. thanks, bob, we'll see you in a bit as we go to break, dow is up about 370. it's all about two 30s, the long bond, 1.75%. the lowest since august. we'll be right back.

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let's get to the german stock trade. >> i'd probably buy three or four buy next tests every single week a. lot of people are upset because the stock has been on a tear at abbott i want to point out they took no government money for investments. it's produced here, not in china. they've never raised the price the retailers take a cut the government spends billions on testing, why don't we do what they do in britain check abbott labs. the government in britain and give them to everybody i don't know why we're all paying, the government should be buying these so people may be upset with abbott all i can tell you is they got the best product it's the government's fault. it's not abbott's fault. they've not raised the price on labor even though costs went up. it's a big win on my trust

i was saying that's because the government doesn't buy them for free like they used to do. i used to get the uk ones. they were giving them away not in our country. >> beer in the mode. you got to get reimbursed for this and that. >> wouldn't it be so much easier for the government to say, listen, bbott, we'll take ever one you make and give them to people so there is no confusion. they're not doing that i like the way the market is bouncing, it's so oversold i want the buyers to recognize, if there is another one, will you probably have to buy lower they're really oversold. on the abbott, on the apple, i haven't gotten any calls did you get a call from suppliers saying i can't believe i'm so long base chips >> meanwhile, tonight, crowdstrike and signet >> i think it's interesting. it's down, even though it has been blowing numbers away forever. this is your opportunity

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good thursday morning. welcome to another hour of "squawk on the street" i'mcantanilla. markets are trying to find some bargains in what are oversold conditions at 1% on both the dow and s&p. we are looking for potential reverse also, which we got earlier yesterday. >> it's too early to tell. the three big movers we are watching today, snowflake popping after they reported

software sales and upping the guidance shares also in the green this morning after china's aviation authority issued a directive that would bring the company's 737 max planes back into action after more than two years. finally, keep an eye on apple, hitting an all-time high yesterday. demand concerns are weighing on the stock. demand concerns, more on that story in a moment. >> all right first, though, let's, well, the volatility is continuing here in the u.s., the markets in the u.s. after they confirmed the first case of the omicron variant. let's get to meg tirrell for more on that, exactly what we may have heard in the last 24 hours. certainly, the market is paying very close attention >> yeah, david so this first case in the united states of omicron makes the u.s. at least the 29th country to have identified a case of this variant. here in the u.s., the person san francisco returned from south africa on november 22nd. tested positive the 29th, was fully vaccinated but didn't yet have a booster they've had the moderna vaccine

less than six months previously. they had mild symptoms and have recovered. we heard from health officials their contacts have been traced. so far everybody has tested negative this, of course, as concerns are mounting around the world about the impact of comb e omicron, the cdc saying based on mathematic modeling, they expect omicron could be a part of the half infections in the next few months in south african, we are starting to see real evidence of a fourth wave starting see that spike there at the end. when omicron was first detected last week, that was a small uptick it is continuing in that direction. world health organization officials briefed this morning on what they're seeing, particularly what they're looking at in terms of the availability of this variant to reinfect people who have had covid. here's what they said. >> we want to share these reinfections will be better for the delta wave we didn't see an increase in reinfections over and above what

we expect when the course of infection changes, when the wave stops. however, we are seeing an increase for omicron >> so that's something different about this variant but they do say they hope that having previously been infected will provide protection against severe disease or death. but, guys, all of these questions still outstanding. we are hoping by the end of next week, we'll start to get some answers. back over to you >> yeah, meg you know, real quickly, given so many questions you say without really actual answers. a lot of anecdotal things. is there anything specific, though, to south africa and the population there, perhaps? that can't necessarily then be inferred forrest of the world? >> reporter: definitely. so it's a younger population in general. it is not a population that is hugely vaccinated, although, perhaps more than other countries in africa. what we are hearing about right now is a lot of younger people

who are getting sick it's not clear if because folks out mixing more, less vaccinated so there are so many questions about the data, it's really hard to draw conclusions. it's great news the one case in san francisco was mild, of course, we all would love to think that is the case hopefully, we need meteorological data from around the world to know for sure >> for more on omicron's mark impact we are joined by asset management phil camp arelli thank you for being here dan, it seems the market is clinging to a bit of good news out there with regard to the ability for therapeutics to treat this and vaccine's ability to combat this as well until we do know more, should we just expect more volatility in the markets? >> i think that's probably right, leslie. i think it's not just omicron.

there is a lot of variables the markets haven't digest right now. a lot come with a lot of uncertainty and potential downside risk. you talk act ole omicron, the fed at the base of its tightening there is issues around you know fiscal slowing, impulse there. so there is a lot to comprehend right now. ultimately, i think this will be a short lived risk to the market i think you are right. the volatility will be sustainable. if you look through this, you mentioned therapeutics i am quite bullish from the recovery from covid-19 and in general. i think the reaction you see today in the markets makes a lot of sense >> so it seems like your colleagues j.p. morgan and the strategy group are agreeing with the sentiment that earlier reports suggest omicron might be less deadly as a signal that's at the end of a pandemic is fear therefore, this pullback at least what we saw over the last few days is a signal to buy on the dip. do you agree with that if so, where should investors be

buying >> leslie, good question i thought i saw it all from march of last year and to think about what is happening over the past few days with the two tale risks colliding. you have another variant of the covid pandemic and a hawkish fed. at the same time no wonder investors are -- right. so if you have, just pull back a little bit, i think our view you said it's a buy on the dip to stay overweight equities is still our call for a couple of reasons. one, we have a playbook for a variant. it happened over the summer. from june 30th to august 31st, the s&p was up 5%. nasdaq was up 5% if it looks like delta, there is a playbook to that as the rotation happens, not a riskoff trade. the second thing is the fed. i keep telling clients, they are operating from a position of strength they should be heating up their taper. why? because they have, you know, unbelievably easy financial

conditions to work with, an 8 trillion balance sheet in the last ep code e sewed, we have a consumer that has never looked better. kind of the third piece is growth we will have 4% growth next year most likely. it was 2% in the last cycle. i think with inflation on everybody's mind, including the president. it behooves the feds to get as much optionality as possible and speed up the tapener our opinion. none of that means riskoff these are good problems to have for the stockmarket. >> all right you know, as you were considering whether or not to buy into the volatility, dan, i wonder, do you wait for tr vix to settle down or is that not going to be a good tell at this point? >> no, i don't think, i mean, we're not event driven and day trading. so i think if you are trying to time things, maybe you kind of play with those types of signals. ultimately, you got to bring back the fundamental also. i think the fundamental also are still supportive owning sick

electricals. if you own energy financials, not only do they benefit from this recovery and this overpriced negative reaction to omicron, you get a hedge against the potential risk of inflation and the potential risk of interest rates so i think owning things like that makes a lot of sense as we look into going to the next you know couple quarters here. >> phil, you mentioned this idea of these tail risks coming together at the same time. how do markets interpret all of this especially when you have so much algorithm trading out there. there is a lot of unknowns on both fronts. what do you make of the markets to dissect this information right now? and would it be more prudent if you are an investor out there and sit out and wait until there is more information to be had? >> we're not investing in cash sitting out to us means failure is going to cash cash is so expensive the hold is high inflation you will zero in on cash nominally. with the last cpi report in

october, you got a 6% realtor on cash the overweight the stocks is validated in our opinion driven by the fundamental story, driven by the consumer. and driven by, in fact, even if the fed does speed up their tapering, we're so accommodative. there are miles to go before they get anywhere near normal. again, just to define it, tapering is less easing. it's not tightening. right, that's a big deal so it's hard on the other side of that, leslie, which is why we continue to lean into stocks here >> it sounds like you and ray dalio share that same sentiment. cash is not where you want to be thank you very much. appreciate it. meantime, we're keeping an eye on shares of apple they hit a new all-time high yesterday. as you see, they are under pressure this morning. this follows a report the company has told suppliers of waning demand for the iphone 14. he replicated the neutral rating

on the stock i'd love to start off with your take on this report based at least on the data that you collect regularly in terms of trying to assess demand. >> yeah. good morning while we get these reports often, i think i heard somebody say earlier, i don't get a phone call from the suppliers telling me what's happening with apple you know i don't -- i think we have to take all these things with a grain of salt let's say it's true, it's hard to interpret these tea leaves in this environment with this supply chain so tight and, you know, in a normal year, i would say this would be a likely negative demand indicator in this year i think it's very tough to tell. >> and that is because what? i mean the idea that apple perhaps may have ordered more than it necessarily needed just to make sure it has the chips needed on hand >> yeah, they may have over ordered. you know, typically, they will over order in any year this year, they probably overordered by more.

you know, so supply chain reductions may be an indicator and negative demand maybe not. i would say our own panel, we do our own looking at lead times for iphone across the globe. that has suggested demand may be weakening. you know, lead times are always the balance of supply and demand we've seen china lead times come in faster than we saw they would and lead times faster than we thought they would this latest week, we saw the uk and europe come in by seven days lead times are suggesting that demand has been a little bit weaker than we might have expected the iphone 13 pro, in particular, has lead time data that's quite a bit lower than last year. you would have thought with supply shortages, that would have been the other way around of course in, the only other iphone that shows lead times is the pro mack so that data suggests demand is

a little bit weaker. again, it's very tough to tell in this environment. >> right well, is it weaker i see you say demand closer to equilibrium. trying to understand where you think we will end up in terms of sales in this important period we're in right now >> let's take the iphone 13 pro, for example. if you are short of supply in this environment, which i think we all assume that they are, and your lead time this year is lower than last year, then you probably are concluding that demand there is weaker than it was last year. okay so logically, that's where you will come out. if in the case of the other devices, your lead times are pretty similar to last year, the air is less clear, because you don't know how much supply has come up to meet demand so i would say that you know on the margin, the data suggests demand is a little bit weak here but i think it's very

differently to tell. as you can tell by the way i'm talking about it >> it's difficult to tell exactly how. even with the sell-off this morning, apple is still trading about 11% above your price target would you urge investors not to buy on today's dip >> yeah, we're a neutralist stock. if we want people to buy on the dip, we'd be buyers. i think our view has continued to be that the number of subscribers that apple's got, the number of users out there, that growth rate is slowing to gdp roet the rq revenue per user headed into covid is flat it jumped over 20% in covid. it will likely normalize from here very tough for apple to grow earnings and revenue in that senator jo so yet the stock is priced at a significant premium, the s&p 500. so, yeah, we don't think people should be buying this stock and that, you know, given all of

those do you that points >> so rod, neutral rating here what would make you feel otherwise, particularly in light of the fact the stock has obviously moved up to perform inline, frankly with year with the s&p after under performing much of the year >> yeah, by the way, inline performance is neutral so that's not exactly what we thought it would and it's very consistent with our rating so get more constructive, i would want to see some evidence that rq is holding up the way the street thinks it will at levels that we saw in covid that we believe were driven by the lockdowns and the fact that consumers had a lot more money to spend because they weren't spending it on restaurants and travel and things like that. if i were going to get more cautious on the stock, i'd want to see the rq undershooting me or significantly undershooting the markets. so that's kind of the way we think of the stock we are looking at in the tra

ject ire of the rq and we make our calls accordingly. >> okay. rod, always appreciate your insights thank you. >> yeah, thank you as we head to a quick break, here's a look at a roadmap for the rest of the hour more on the omicron frayed airlines to crypto, where should you be putting your money? plus it has been two decades, 20 years, since enron declared bankruptcy. we will be live from houston with a look at that legacy mortgage bailouts are coming to a close, with more than a million borrowers behind on payments, we'll discuss what it might mean for the housing m market >> i promise - as an independent advisor - to put the financial well-being of you and your family first. i promise to serve, not sell.

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. house financial services committee announcing a hearing to address d.c.'s growing demand for crypto regulation. top executives from eight major crypto firms are set to testify. joining us is one of the ceo's, axios chad casparillla >> thanks for having me. >> how do you think the house will try to frame this discussion what is this about >> well, i think there is probably a couple different angles first is how will our financial future be different? how is this technology changing our lives? why is it important? how is it able to create access if different products? and also it will be about the

dollar how the dollar is changing and the type of product the floor represents has shifted how people use it. what their daily lives look like why it's important in order for the u.s. to maintain financial privacy in order to adapt to the changing world so i think those will be a lot of the key themes here everyone in the industry wants clarity, certainty and consistency in terms of a regulatory parameter and a perimeter in order to operate. and i think that will really help make the industry be able to operate in a way that everyone understands from the financial services industry today and so these are some big topics from is a lot to talk about. i think we'll get through a lot of those but you know it's an ongoing conversation with the presidential working group taper was an example of exactly this type of conversation unfolding in the public domain >> you sound like it might be more of an opportunity than say being defensive that the hammer is going to come down.

>> i personally think it is. certainly in the case of paxos, we are probably the most regulated company in the entire space. we have taken the admission approach from the very beginning. we did that because we felt this technology could fundamentally shift, creates societal outcomes were it not for that to happen, you need regulation. it is a stamp of approval. it also creates, you know, a real sense of consistency. and so, i think that it's important for the regulation what we really want is consistency, clarity, certainty. how can you operate? what are the rules of the road i think that is a lot of what we will flush out in this conversation next week >> what types of regulation do you think need to be prioritized? to your point there are broad side issues. congress is getting up to speed on this. what would you urge themto tackle first in. >> well, there is a couple different components the first is, you know, in the

crypto markets, there are assets, there are securities, and there is kind of some grey areas. really getting into understanding where is that grey area going to fall out and today we don't really know we know bitcoin is an asset. it's safe. after that, it starts to get a little more murky. having some consistency would really help i think the industry in significant ways, because it would make clear what other type of regulatory approvals that would be needed or might not be needed and there is also i think an important conversation today around how do you cope dollars and have that be safe? how can you have it fit in either existing regulatory frameworks or new ones, the presidential working group paper talked about this. and, you know, we've taken an attack where all of our dollars are basically cash equivalents that are held in u.s. treasuries in t-bills, short on maturitys

there is no credit risk. it makes it safe it's highly regulated. there have been other ways of doing tokenized dollars. having those types of conversations and really helping to make it clear to members of the committee what our different business models are and how getting them right, getting the regulation right, getting the business models right can be a very, very important force for change and very important for the u.s. to maintain its privacy. because really what's happening is our financial lines are totally shifting they look totally different i think in five years than they do now. how can we make sure that we have a financial system that represents that? it's kind of implausible our financial lines look so much different than people are living their lives in a really digital first wave. >> that's certainly the case we expect you guys to make on the 8th. we'll be curious how the hearing

goes checked always good to see you >> thanks for having me. let's take a look at the stocks powering the s&p higher this morning kroger was at the top of the list there after strong results, re on today's market after the break. stay with us

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now it's time for an etf spotlight ticker xle as oil continues its volatile rise this morning, crude hitting the lowest levels while natural gas is on pace for its worst week since 2014 for oldings exxon and chevron, two stocks that make over 40% of the etf holdings, higher as investors await the impact of the omicron variant, shares of both of those names less than 10% from their highs >> meantime, that's big news for airlines check out names like delta up almost 6% today. it is now the time to buy names

on a discount? we will discuss that after the break. ♪ ♪ remember when no dream was too big? ♪ ♪ and you could fearlessly face the unknown. (kids playing) you still can. ♪ ♪ (blowing dust) when you have a rock you can depend on for life, you'll be unstoppable.

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through these various waves, dell that now omicron, if you are sense ac sort of degrading lessening effect on bookings and cancellation as we learn about each new one >> no question about it, people are moving short-term meetings out to april and may, trying to get on the other side of whatever hyperventilation will occur in the market place due to this later variant i know everyone has a different balance of fear. it's almost chicken little running through without any substantive proof that we have a problem. but it's causing immediate concern and you will see that in

december and january bookings. >> so you do think, you think leisure, we might see some hit >> oh, sure. because leisure in different countries and mexico and the caribbean and of course into europe all of these, japan is cut 100% so all of the access as to places is now in doubt they change almost daily so you really don't know whether you are going to get home if you go some place. so you err on the side of conservative and just don't go it's already had an effect already. >> do we get an echo of that in corporate? >> well, yes, sir, travel managers are uncertain this is certainly is an uncertain time where even the government doesn't know what to do so they tend to overreact. i have to give our government credit for subsidizing work force so delta, american, united and southwest were ready to go, by november it was a knockout

month. but they've cancelled that out with this one hyperventlation starting quarantines and different approaches to slow the flow of, what it appears to be a mild disease, i'm not sure i don't think anyone is. >> do you think that stricker international travel testing would work or does it make people feel more comfortable getting on these kind of long haul airplanes >> i think that's true that it does make them more comfortable. it is that necessary step. i notice they've stopped it from the 72 hours down to 24, which makes it more difficult to make sure that you get on that plane if you didn't get your test finished everything you can do to calm the traveling public, i think we ought to do it i think we have to have the vaccination is the way to go and

everything else is correcorrelad these are nice to do >> so assuming we see impact from nervous travelers, whether it's leisure or business, we do have oil offsetting it i know these are such crazy cyclical moves intraquarter. what would happen to the idea we would see a continuation of quarters that are at least break even or mildly profitable? >> i think that's very doable. we're really the tenacity in our markets, but people really the studio is the same way we're tired of it. and we've got a lot of scar tissue we are somewhat inured from doom and gloom scenario painted that it's kind of manageable. we shouldn't stop our life because of it. i think there is some more and more of that every day >> finally, we were talking earlier this morning about china

issuing a directive for the masks. do you think that thing flies in china soon >> well, it should it's political and you can't tell politics have been shaded but if it's going to fly, it's a great airplane >> gordon, we love taking advantage of your years of experience in the industry and your insight talk to you soon >> nice to see you again >> gordon bethune. well, it has been 20 years to the day since enron went bankrupt we are live from houston we are going to look at the legacy of that company that will be next. don't go anywhere. . technology and our business model allows us to deliver the quality of the video you see on the left through the open internet to customers world wide versus the quality you see here on the right, which is what happens without our technology melour businessods.

all of that happens here on the 44th floor of the enron building in houston, texas. zble

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anyway, i wasn't here in the morning, at least last week. so i wasn't able to update people on enron. i'm back there will be a great deal of news enron as was expected. >> enron is gone, mark enron is, you know, sorry. enron is in the pennies. i was happy not to have been in the morning. so many people were blaming me for enron's demise, the told blame the messenger as opposed to listening to the message. >> if it were cramer, they would have saved themselves ten bucks.

>> yeah. >> sorry i was looking at myself. >> same thing. >> i like her. >> it has been 20 years. >> that was 20 years, leslie when you were 12 exactly 20 years ago, energy company enron did declare bankruptcy it was a stunning fall from grace, of course, it's spawned a scandal, nearly two dozen criminal convictions and sweeping government reforms. scott cohn has a look at the legacy >> mr. jenkins >> reporter: 20 years before zooming was a thing, this enron promotional video was touting video conferencing on the internet and streaming video years before netflix >> enron communications is changing how the world innovates. >> reporter: scott yeager was ahead of strategy for the division that became enron broadband. we spoke on zoom >> we were the only ones focused on broadband experiences and broadband did include stream

media. it did include interactive dips. >> reporter: before that enron created the modern day markets for natural gas and electricity, setting the course for how energy is priced to this day energy market's expert head hurst, who worked with prosecutors to build their cases against company executives can see that enron was a pioneer >> enron revolutionized trading for natural gas and electricity, without question it brought liquidity and benefits to consumers and producers. >> which is why when enron went bankrupt, throwing thousands out of work in a matter of hours, many mourned more than just a job. rodney kathuria was a retail director >> everyone inside the company acted like an entrepreneur you were responsible for your destiny. >> high pressure, worth it says stephen webster. he traveled the world as a young executive in the international

division >> i would tell you it was probably one of the best jobs i ever had >> all well and good according to leslie caldwell, who is the first director of the justice department's elite enron task force formed in 2002 but she says that while enron may have had some great ideas, they tried to monetize them before they were ready and that's where she says the fraud came in. even the enron true believers here in houston and there are still many concede that the company made some serious mistakes, chief among them, perceiving growth, pursueing growth over stability. guys by the way, favor you have not i don't get it >> oh, please, the two of you. it's ridiculous a little like the tie. we were there talking about this 20 years ago, you had incredible coverage i'd love to get your sense you talk about it being a complex legacy so i think there are few people

like you and a handful of others that can tell us what they did that was the center of the accounting fraud just give me your perspective you know 20 years later on this. >> yeah. well, i mean, it's interesting here we are 20 years later, i have been covering the theranos trial from silicon valley. when you look at enron and look back, this was a company that had a ton of brain power it did have real businesses. the question is, where did they cross the line in terms of telling that story to wall street and telling it to the investment public? of course, a lot of people went to prison over that, pleaded guilty, so on. but there were real innovations that came out of this company. chief among them the way that energy has traded to this day. natural gas traded that came out of the so-called gas bank that was developed by jeff skilling. who also served a dozen years in

prison that's why we said the legacy is complex. because there are some genuine innovations that came out of this company, legitimate innovations. the question is, how they told the world about them and how they've translated that to the finances >> yeah. obviously, something else as you pointed out was the number of convictions. people went to jail it was unlike the financial crisis or what we are seeing today in terms of corporate fraud that may be there it was followed six months later with world koik and jail time and legislation as well. a lot did come out of this and certainly does seem to be sort of identified as a period where people were actually held accou accountable. >> wuj one of the things is the accounting reform law that mandated things like auditor

independence and company executives personally attesting to the financial statements. those things came of it. leslie caldwell says the aggressive tactics of that task force enemployed against enron executives, that helps create more accountability. accountability that interacted with this task force still to day in houston. leslie called well and her team were mob prosecutors they were employing those tactics against business people. she says it was absolutely appropriate and it cleans things up here he is, a criminal defense attorney on the other side of the table now, but she and others say it did create accountability again, you get dispute here in houston. >> finally, arthur anderson,

there are a lot of people bitter about that, how quickly that company was taken down by the department of justice? >> that and remember, that was an accounting firm with 85,000 employees. they were convicted of obstruction of justice in the enron issue and that conviction was overturned by the supreme court but too late because the company went out of business i asked leslie called well about that she said her great regret about it is not that they went after arthur anderson. but he didn't take a deferred prosecution deal that the justice department was offering that might have kept the firm alive and yet created account ability for alleged obstruction. anderson had issues before in waste management their accounting firm there. the justice department took the position that anderson was kind of on its last strike when it came to enron. the supreme court again

overturned that. so it was a really difficult thing for you know one small slice of that company then putting 85,000 people out of work and to add insult to injury, then the conviction is overturned >> real quickly, scott, you know, obviously, the key players, ken lay passed away prior to even going to trial ifl skilling, where are they now >> so, ley died after he was convicted. convictions were then wiped out. skilling is back in houston. he did 12 years in prison, the longest out of any of the enron executives he is now doing a startup, high-tech firm in the energy industry keeping a low profile. he declined to comment for our reporting today. andy fastow served five years in prison he plead ed guilty and testifie against. he's been talking about the issue of following the rules and corporate ethics, versus the principles he says he did too much of the

former and not enough of the latter and has accepted his guilt he goes out and talks about to this day. >> scott, appreciate your insight today and of course all your incredible reporting. can't believe it is 20 years thank you. >> sure. we are getting word from the minnesota department of health that they have confirmed their first omicron variant case an adult male had been vaccinated, mild symptoms on the 22nd of the month. the symptoms have resolved he had traveled to new york city and attended a conference at the ja visit center from the november 19 to 21. we're seeing actually a little buying despite that news oil is up a touch. dow continues to hold 400 points to the upside. meantime, snow flake on the move after reporting results we have the ceos of all three in the next hour of "techcheck. don't go anywhere.

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welcome back to "squawk on the street" i'm dominic chu. we are seeing slowing momentum as stocks move slower. we'll look at the consumer

staples sector behind me everything is in the green so far some of the hard-hit names in recent days are staging a slight rebound in today's action, including names like monster beverage, also lamb westin and cisco as well. you can see on a basis for a week or so period it's been a tough go kroger leads the s&p 500 today overall after the grocery store chain beat earnings estimates and raised full-year financial guidance be sure, by the way, tune into closing bell this afternoon for an exclusive interview with kroger chairman and ceo rodney mcmullen keep it right here watch those consumertaes more "squawk on the street" ahead. stay with us

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to the moon! [thud] [clunk] ugh... unbelievable. unbelievable. [ding] welcome back to squawk in the street pandemic mortgage bailouts are ending and that could mean thousands of homes hitting the market this winter here is that story diana? >> that's right. in the last year and a half, nearly 8 million borrows into covid mortgage relief programs and just half are current again. about a quarter of borrowers either sold their holmes or refinanced their mortgages, more are still working with their

lenders. but there's still about 264,000 homeowners who expired from their forbearance terms and are now delinquent and 38,000 were in active foreclosure. unlike during the sub prime mortgage crash, these borrowers have substantial equity in their homes thanks to soaring home prices during the pandemic close to three quarters of the borrow's in foreclosure have more than 20% equity and just over a quarter have more than 50% equity and that's according to realty track. that's those in foreclosure. but the shares are likely similar for those 264,000 who expired and are now delinquent but haven't yet reached foreclosure. in total, that could mean close to 300,000 likely lower priced homes coming on to the market over the next six months the question is whether the homeowners will decide to sell or wait out the foreclosure process. margarita diaz is a housing counselor in new york who have been working with some of these

borrowers. >> they may have equity, but then it's a matter of where are they going where are they going to go where are they going to purchase things are so expensive. the market is high right now to purchase and you know, to rent, too, that that's a big problem >> and the current housing shortage is so bad some estimate we need about a million more homes to meet demand david? >> diana, thank you. that will do it for us on "squawk on the street. "techcheck" starts now ♪ ♪ good thursday morning welcome to "techcheck" i'm carl quintanilla with jon fortt and deirdre bosa today the dow and the s&p bounce back the nasdaq not quite joining the rally. vix is still above 29.