>> thanks, andrew. a final check on the markets you have seen the futures this morning rebound a little bit, dow futures up by 53, the nasdaq by u. up by 53, too, and the s&p up by 10 that does it for us today. we sure hope to see you all back here tomorrow. right now it's time for "squawk on the street. ♪ good whence morning, i'm carl quintanilla with jim cramer david faber is on assignment we are on rebound watch today after the worst decline for stocks since june of 2020. some signs of stabilization but rates continue to kree higher. two year 3 a 3 fairly steady after core ppi is in line although core was a tenth hot. that's where we will begin with markets and inflation. stocks trying to recover from the selloff today, as of yesterday's close the dow is off about 16% from the all time

high, s&p about 18%, the nasdaq 28%, jim we did see the ndx with its worst day since covid actually began. >> two things that have happened in my travels, one is that many people have given me a chart, many, which shows the overlay, that's the horrible 1999/2000 overlay with a lot of faang perch. the second thing i got is why do i need to be in stocks i'm getting -- i only get 4% neither one is a sale -- they're not unsaepable, i can make cases, but i have to tell you, carl, when i see a ppi number like this i just say this is no victory. this is the worst thing that i keep hearing, endemic, jim, why don't you come on air and say how endemic it is. why do you insist on thinking

that powell containment i say powell containment, he can make it so stocks are worth less, your house is worth less, you have to go back to work. >> he's got the first two things going. >> i've seen endemic inflation and when the people who have been around you think about volker and endemic inflation, you always hear these people who bought the 30 year at 14% and, yes, they were true visionaries but, i don't know, carl, when i'm on the road and i'm at places that see hundreds -- hundreds of millions of people, starbucks, costco, they are not worried about inflation. starbucks is steady. costco says inflation has peaked what am i supposed to do, say they're wrong? >> their visibility and certainly their own skus is pretty important to note you have been on the road and mentioned costco and what craig

jelenic told you, take a listen to this. >> things will start to come down if you start to see now fuel prices are coming down, which is a big part of distribution costs, distribution is starting to level out and come down, i think you will see anything in non-food coming from china that is not going to go away and container costs are starting to come down. so i see this hopefully turning around in six months to a year >> how do we pressure what he has to say -- and, remember, 100 million members -- with what the data says? i think the answer is that his data is better than the government's and i say that because it's up to the minute, it's as of yesterday, it's not as of a month ago. when you see beef coming down and chicken coming down, are we supposed to say that he doesn't know now, there's a considerable part of the country that still does

not have a costco and maybe they go to dollar tree, dollar general, but i like his information and he's giving us our viewers that information because it's truthful. he's not a pollyanna, he is looking at numbers >> i get that, but how much visibility does he really have into medical care costs and what about shelter and, you know, these persistent areas -- the dow was a scare yesterday, right? the persistence of, say, shelter inflation in the next few years. >> there's no doubt about it that the fed is stuck with a congress that spent a lot of money building semi-conductor plants, a lot of solar and not doing housing. now, if you were running -- if you watch our show you would say, what we really need to do, we need to develop housing and there is no relief there so i don't have -- i've got my club meeting tomorrow for the

investment club. i'm struggling to find out how to build more houses i also think, by the way, if you own a house, there's got to be some sense that you have to sell, but no one seems to want to do that i look at what home depot has to say and i feel a little more sanguine when i talk to the companies i'm more sanguine, but i think we're going to have earnings disappointments because i think that you can't keep raising rates and not think that somebody gets hurt. >> that's interesting because the view from, say, jpmorgan last night, we are not seeing the earnings belowups, today j & j reiterating the guide, raytheon reiterating the guide. >> these are great companies and it should matter i think that raytheon is an interesting play on what's happening in ukraine j & j, you don't need to do this but they're doing it i think a lot of the ceos say why the heck is my stock down? they are not thinking macro, they're thinking their own book

and i like that, but it may not be enough to convince people that the four year is not as good i think the four year for a person who is older and knows they need the money is just too -- it's glamorous. now, if we put up a chart of the four year and how it's gotten -- you know, of the three year and the four year and getting -- close to getting four, these are pair bowl lick moves if you want to know what's really in 1999/2000 chart, overlay the action in the three year and typically what we would say is their the parabolic, that should be sold i don't know a soul who wants to sell the three year. it's a love piece of paper. >> certainly we can watch the two year 3 a 3. >> oh, man. >> which again takes you back to 2007 there is a lot of discussion yesterday about 100 basis points, going to try again guessing on 100 but others say

three 75s in a row for these guys is a big deal. >> the 100 that we're hearing is a sign that they're panicking because they just said around 75 you can do 75 and then 75 again it's just that as they go up you're getting owe blit rating if you booked the two year, you have to go out a little bit more as someone who says, okay, look, i may need that money, i once got in a lot of hot water for saying this, but if you need the money in a three-year period it's difficult to say i'm going to stick with the s&p when you have this piece of paper that's your enemy. the real enemy of raytheon and j & j is that chart, not the actual price of their stock which is pretty interesting. >> right one dynamic that got discussed last night amongst some trading desks was, as we said, earnings season looks like it's going to be fine so the debate going forward is going to be about the impact of rates on the market multiple, right?

you are not as worried about what earnings are going to do in q4, q1. >> no, it's what you will pay. let's look at the banks, they're very inexpensive you know that the banks that are trading oriented -- we know this from david solomon at goldman -- aren't doing that well how about a bank that's not trading oriented that doesn't have a big brokerage business that is able to keep what they pay you down and suddenly able to invest at these prices. wells fargo, charlie scharf. if you're charlie scharf the biggest pressure you have is how much money you're going to make off of your customers. you are not worried about whether there is a lot of trading. my investing club owns morgan stanley and it ownswells i'm more worried about morgan stanley but the multiples of these -- morgan stanley is a better yield. >> sure. >> the multiples of these are so low but maybe they go lower and lower and lower and that's what people fear. >> morgan stanley vulnerable

because of wealth management >> as stocks go lower their assets center management go lower. where are the ipos a small oil company, i was talking to my staff, saying that company is interesting and i realized what's interesting is there's nothing else that's interesting. there are no other deals if you are in venture capital, they are not job hopping, they're just thinking i thought this computer engineering degree was going to give me a lifetime of annuity, now they're saying, boy, i'm bumping into a lot of other computer engineers don't forget that. >> speaking of which, we are keeping a close eye on announcements about workforce reduction. >> yes. >> of course, the "times" had a piece about goldman the other day that could be in the 1 to 5% range, reduction of forces back there. ilio 11% of the workforce along with other names we followed, tech startup software land last couple of months.

>> these company, twilio, mi, they are still losing money. some of the most -- let's take a piece of devastating research, square this was a darling now it looks like not only is it not a darling but there isn't a place that's not getting hurt. buy now pay later, bad square -- some of these companies got very interested in bitcoin. bitcoin seems to be held up -- i'm going to charge this -- artif artificially there seems to be a movement to have it held up. that doesn't work. it's pro meet yus and he doesn't stay -- instead we're calling it -- >> jim is referring to this ever core downgrade, it's a double downgrade today. >> double downgrade. >> underperform from outperform. they go from 120 to 55. >> that's not a split. look, that was devastating i happen to like square. why? because their pay function is

really good. paypal very good comments about dan shilman. there is this universe that says before you sell us remember what we do. i had silverman on from etsy all of these companies -- paypal is making a lot of money but when you get a company like square, don't you start thinking, wait a second, they've got to start making money and even when they do make money you have a 78 multiple on net shear. if you think that multiples are going to shrink, that's where the problems are square, block, whatever you want to call it, is $41 billion in market cap no i want that -- i want a lower market cap because i'm not getting paid i'm not getting a dividend, i'm worried about buy now pay later if the fed keeps raising the buy now pay later all they ever say is don't worry about us when everyone says don't worry about you the first thing you do is worry i am worried about buy now pay later. >> i wonder, too, one thing

about square yesterday was during the twitter offensively blower hearing at senate judiciary, talking about safety faults in his view at twitter, whether or not that could have been extrapolated to jack's other venture at block >> makes sense >> yeah. >> how active is jack there? rita, fabulous ceo, is he running the company? which is great let's say if she is, but the stock is down 57%. what's amazing, carl, is that has meant nothing. down 80% there is a company called rent the runway and they were a subscription people don't like subscription everything that was geared toward the different gens, the x, y, z, it made me think about fire fest. >> that's actually -- that's not a good thing. >> no. >> that's not a good thing. >> no.

we've got -- mr. mcfarland is back i want him to go into the two year wouldn't that be great if he said, guys, i'm done with the cheese sandwiches, i'm going two year that's what we want. >> a lot to get to this morning. we are going to talk some mortgage rates of course touching their highest level since '08 on the heels of what yields and rates have done and mortgage demand the last few months take a look at the futures here. we will get to apple and a bunch of buy back activity today, news on google, obviously the rail strike possibility and some news trt.vs as the president goes to deoi more "squawk on the street" in a moment

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got some more challenges facing the housing market today, the average rate on the 30 year fixed tops 6% for the first time since 2008 that's more than double year ago levels according to mortgage bankers association. the group also says apple case volume down one, too, last year compared with the previous week and mortgage demand down 29% from a year ago. jim, if you can't buy because mortgage rates are too high, you're going to rent and no surprise that's showing up in cpi. >> absolutely. i think that -- look, rent, food, although i'm betting food is a little bit better just because of visiting costco, wages. you can't create more homes, can't create more people, which is what powell really needs to do, food can be okay, but what happens here

typically when housing peaks because of rates right here is when there should be too many homes, because they were trying to meet demand from three months ago. this is where lennar should be saying, do you know what, we have too many homes, horton should be saying too many homes. tolls. this is the first time we needed these guys to be stupid, it turns out they are all smart. doug yearly who runs toll brothers he watches us and he said i outsmarted you guys i don't have a lot of homes to sell darn it. that's why we're getting hurt. the new guys are much smarter than the old guys. i think they have a lot more technology. >> say the same thing about the oil business, maybe the hotel business cyclical industries that typically overbuilt in a peak cycle. >> when i saw expedia, mr. kern, one of the things that was very clear was that it's tight. we need chesky to say, okay, listen everybody, just go airbnb

for four months until this thing is over. that's not going to happen carl, this rent thing i keep trying to think what happens as they continue to raise rents all i can remember is you weren't allowed to raise rents for a couple years those were the people -- i will tell you the two things that worry me, rents and weddings i was sitting next to a guy, shouldn't have overheard him, he knows i didn't, he said i have nine weddings this year, this is an extremely full flight the world is catching up to the two years they missed. my daughter is on her third wedding in, i don't know, like four months. weddings are driving because no one got married. >> that's true i mean, that's another just -- not a pull forward, it was a push out. >> yes. >> on covid. by the way, we will talk to brian chesky of airbnb later today on tech check, talk about travel, we talked about the strength, the commentary out of airlines sixth the european car rental

company today with an upside reannouncement good luck trying to rent a car in europe as you know. >> we rented a car well in advance of when we went to italy because we knew as much as i like hertz and i'm not going to take advantage of the fact that i know the ceo, but we just had a feeling that you would be flooded with americans i keep thinking about the rockports i'm wearing now, made in thailand, don't even look at them, they cost me $140, macy's.com i got two unbelievable pairs of leather shoes made in italy for less than this okay so the bargain is overseas but that's unfair. most americans cannot afford a flight that goes -- look, i mean, i took a flight to italy, 530 people on the plane and extremely full plane, airbus, the largest airbus there is just -- i met so many americans in italy that i

thought i was in little italy. i mean, it's crazy hey, how are you doing fine love the show. i mean, love the show. i'm in a gelat "o" line. no, you're supposed to be italian. >> that's interesting. i'm not sure how powell suppresses that. >> i don't know. >> still so much pent up demand to get out. >> i mean, one thing he can do is overshoot, people come back to work. carl, when you're 55 and you retire, do you really think your savings about going to get to -- you're better against your life. you're betting we have had two years of life expectancy, it's going lower and you're basically thinking you will play a lot of golf and die not the right attitude. >> right right. >> i mean, unless you are in the national, that's a place that no one is allowed into. >> you think we reverse some of those early retirements we lost? >> yes i think those people are going to say, wow, my stocks are a

little lower, maybe i don't have all that money maybe i have to find a job that's who has got to come back. those people, i mean, i think jay powell is saying how long can they hold out. >> right maybe that's sort of what participation rate is hinting. >> i think that was the one positive number that i've seen. >> exactly. >> and a lot of people overlooked it because there were a lot of sell programs yesterday. i also think, carl, that the negativity it's so hard. >> yeah. i know we are going to talk to jim about levels here and what's important to hold after that letting yesterday. count down to the opening bell, cramer's mad dash. futures here holding up a bit after that historic loss back in a moment do you want some more? wait till you see me on the downhill. see you at home. enjoy it. with the advanced safety features of a lexus es.

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take a look at the futures here holding up after yesterday. interesting on a point basis, and i know that's a huge caveat, but it was the fifth biggest point loss in s&p history, seventh biggest for the dow. opening bell is coming up in a few moments here and, remember, you can catch up anytime anywhere just listen to and follow the "ua othsqwkn e street" opening bell podcast back in a moment

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time for cramer's mad dash as we count down to the opening bell. >> one of the great joys of going out to amazon web services they continue to pie, continue to hire. they build data centers and want them to be done with recycled. they want to have as little impact as imaginable to the environment. that usually means buying nucore because nucore will get the orders nucore put out its monthly it was disappointing. they expect steel mill segments to be considerably lower, considerably, in the third quarter of 20222 as compared not second quarter of 2022 that's not that long ago

due to metal margin contraction and reduced shipping volumes particularly at sheet and plate mill sheet and plate mill is pretty much everything. on the one hand you have a something that is the esg king, but on the other hand you have a company that finally says, yeah, steel is not immune. typically this stock would be cut in half already. i don't think that's going to happen, but be aware that this is the first negative news from nucore i think in a very long time. >> isn't that important from a margin perspective i mean, as we're watching margin effect on inflation overall? >> well, steel has been up, up, up it's been a major problem, the inflation complex. so i think that this is something that powell would say, yeah, i know, but that's not what i want. i want your house to come down in price i mean, he would rather see whirlpool say this than nucore i would say nucore is the building block of this country you need their steel to build everything from cars to

infrastructure, a lot of people are buying it for infrastructure oil and gas, tubing. i guess most importantly you need it to build apartments. multifamily housing. they are not going to build them all with wood, even though a lot of guys are building with pressured wood because it's good in an environment where you have too much heat. yeah, this is a bummer and not what i want to see from nucore it is what i want to see for powell. >> you have to start somewhere. >> yes and nucore is -- nucore is the best of the best i've always felt you can't own a steel company going into recession and so far until today that made sense because nucore was not down they are buying back a ton of stock, but i just was surprised. this was a surprise. >> i do want to talk to you about buy backs because there are a few today. first let's get the opening bell here and the c new jersey realtime exchange. with the big board it is american assets trust

celebrating it's 12th listing anniversary at the nasdaq the cast of the upcoming broadway show "death of a salesman. that's a play we like to quote all the time on this show. >> when i was little my dad had bussed into norfolk. tough to be on the road selling gift wrap and scotch tape. >> great news for new york city overall. we're going to get a ton of new productions here in the next season, which is what broadway needs. >> right and everyone is talking about how great it could be that netflix is going to have this ad supported view i happen to be a hulu person and i can't believe i have to watch stupid commercials i think the enthusiasm is very misplaced for netflix and the ad business. >> right. >> who wants ads >> we will get to that in a second >> all right. >> up 50 here. is this the kind of stabilization you want to see? >> no, not at all.

the stabilization i want to see is the two year which is the worst stock in the world in terms of in you want to call it that the two year is still doing their only thing who does not want 3.8? >> the only way to get 3.8 is to own a reit i like to think i get my money back at 3.8. these treasuries are -- if powell does 100 people might be saying, do you know what, they're really tough on inflation because they sent the price of stocks down that's the problem. >> that's not your call, though, 100. >> no it's not my call because i think that he doesn't like surprises. remember, he's a very calm man, he surprised people in 2018 and he learned his lesson. >> yeah. there was a couple arguments last night, jpmorgan for whom a recession is not their baseline call but they did say that a central bank-led recession the odds went up now they are looking at 40% odds

that you do have -- and bofa last night as well, fed is probably going to overdo it, probably will result in a recession. >> well, i think that give them a little more credit they can make it so people come back to the workforce, they can make it so that we have a little bit higher unemployment. they can't fix rents, but the idea that we're necessarily going to be thrown in a recession with the balance sheets where we are, that's tough for me. >> you mean the household balance sheet. >> household and small business balance sheet, pretty good i mean, the layoffs so far are -- they are in tech and finance and they're very little. now, remember, david salman did promise you -- i did an interview with david at goldman, he said we will pfeiffer people, lay them off if we see any real weakness i remember when i worked at goldman there was this department, the mortgage department, and one day i went down and there was nobody there. except for a couple copy machines i said where did they put the

mortgage department? we got rid of the mortgage department they weren't making any money. goldman is true to its word. the idea of recession, let's take that off the table and say we're going to see a definitive slowdown and it means while clorox was downgraded to an underweight today that may be a mistake. nucore, dow chemical, these are building blocks of america those are -- they aren't going to be able to raise price. so i see too much that's negative already it's not -- we're not going to wake up and find more apartments but we could wake up and say there are people who say i'm going to put my home up for sale before things get too negative that could happen. that's a stretch i wish that there was more building i do think by the way that there are three companies that are helping, walmart, target and costco they are helping the fed they are holding the line on price inflation. >> i know, especially, you know, big retailers get beat up

politically quite a bit, but they are a net source of disinflation and lower prices for most americans it's not like they're catering -- even amex some argues is bias to the higher end income levels. >> yes, it is. one of the things that costco -- costco has a lot of stores they could have double the stores in the united states but there's still a lot of resistance to having a costco in your area because it can hurt small business to me that's wrong costco -- if you are a small businessperson you go buy at costco and then you sell it at your own store. >> helping to lead the s&p this morning, jim, is starbucks 3% gain on the guidance on earnings from the cfo and of course howard talking to you about unions using technology to reduce service time. >> i think he's going to make it so it's easier to work look, cold brew came from nowhere, they have a lot of machines that they demonstrated to me that will make it to cold brew can be much faster. everything that howard kept

saying over and over again was and you will want to work here more, it will be better, it will be better. he talked about how the buy back maybe being a mistake, this buy back want to make things better for the worker he and he are idealists from the old days, we were talking about robert kennedy, he was a person who ran for president at one point, wow, it's been a long time, but i know that he is not anti-union, i think he's pro the benefits that he wants to offer people he's not anti-union. he grew up in an era where unions could be a positive force. he wanted to say, do you know what, let's solve the problem of how much of a drag it is, what a problem it is with ice, what a problem if you don't have the right machines we need time to market a lot of what they showed me is we can do this many foam espressos in this short of time and you will be great. i was in milan, the big maker of -- of coffee in milan is starbucks. he's talking about building a

starbucks every nine hours in china, that's a lot of starbucks. chinese is very strong which is different from what we read. i was so impressed with that guide up, i've never seen howard like this. i've never seen him like this. i've never seen him so -- it's not just because he's giving up -- he was so darn happy i've seen him -- i've seen him bummed we have some clips of the happiness he exuded? >> speaking of clips we do have a bit of sound of howard with jim talking about not just unions but what he called a new era of growth. take a isten >> this is a new era of growth for starbucks. but we have the evidence two weeks ago, just think about this, two weeks ago we introduced the fall campaign in the u.s. at a time when people were so worried about inflation and consumer confidence. we had the best single week in the history of starbucks 51 years, other than holiday, two weeks ago. >> jay powell, please call him

call him get a couple of ceos, get some information. get some people like him say, hey, listen, is there any hope from productivity because i think what you will find is the productivity of a starbucks -- i think a lot of places are going to be challenged by what he's doing. look, they are about getting rid of waste i had a la latte, the new things they're featuring, pistachio they are inventive like i haven't seen since 2008 when he came out of recession. they are -- the stores -- you won't recognize their stores 18 months from now. >> there was a period there where you were not as bullish on the name as you were now. >> now, i really am bullish, i wish my travel trust owned more. i'm very excited i've known howard -- i've had -- i've had back and forth with howard he was pure joy and he's not

talking about inflation, he's not talking about the fed, he's talking about productivity and making it so workers for partners are not struggling as much as he admits that they were. >> barclay's today reiterates overweight, they go from 100 from 96. >> nice. >> now, the union discussion with howard sort of echoed with what jassy said at code last week which is it's on us to create a comp package that makes it attractive to work here without the union, and now we have the rails and already commodity markets are starting to react to what happens this week if it's not negotiated or imposed. >> well, it's not like -- not like president truman where they're going to take over the rails. if i were union pacific i would be sag, listen, i fired a lot of people, the people that are left can handle some wage increase. if you're reading headlines reed is down. union pacific has had a very big

move but i talked to expedia, which, by the way -- you know, tens of millions of people use expedia you can save money if you travel i think there's a lot of people who do experimenting, find out what's the best way to go. you should ask chesky how many people are literally saying i'm not going -- i'm going to try a new way of living because i think that's possible. i think it's really possible to have a new -- for the people who are no families. >> right. >> because it's this gen -- everyone is worried about gen z because gen z does not want to play ball. >> either in return to office or even entering the labor force at all. >> it was very funny, i was talking to craig jelinek, he said do you know how hard it is to work for costco from home good point i think that one of the most positive things i heard from howard was the -- that they can do so well in china given what's going on in china is pretty

amazing. all people say that why aren't -- why isn't the fed more bullish about what's happened to the oil complex, that gasoline is going down, down, down, down. and i think that's reasonable. the people in business don't want the fed to continue to focus on wage growth let us handle productivity when you make -- when you see machines with patents at starbucks which show you how they can cut through -- it reminds me very much of what chipotle did when they got that line that made it so you could go through -- remember, starbucks they weren't ready for drive-thru, weren't ready for pickup, they were not at all ready for this cold brew i mean, nitro. i mean, more people drink cold than hot which brings -- >> even back then, though, the strategic imperatives were about leisure, taking your time, you hang out there, it's a third place -- >> he wants to bring back third place. >> really? >> he really does want to. by the way, the only time i really, i think, offended howard

was i have a person who works with me, he's brilliant, runs research he comes in every day with a dunkin' donuts single use lasted cup. i told howard i liked it i liked it it was the one moment of discord. otherwise really terrific. terrific exhibit of all the things they're doing. >> jim, on energy you mentioned gas prices now down 92 days in a row, but the white house with this leak about potentially refilling spr at 80, which is interesting because we remember a time where the democrats didn't want to let the white house do it at 20. >> i was shocked at that i do know at acertain point yo can't keep draining it i also know that the oil companies have stepped up, but they've stepped up to supply europe and we don't talk enough -- by the way, a lot of these people said why aren't you more bullish about the fact that ukraine seems to be beating the russians i think that -- i said i think because people are either afraid

that that could mean that putin goes nuclear or we just want to keep our fingers crossed and not say anything another area where people are very excited about in terms of costs, t-mobile because they are out there -- keeping costs down. i mean, you know, everybody wants to keep pointing out to me in business, will you stop talking about costs going up and i keep saying every time i do that i get hit as being a pollyanna and i don't want to be a pollyanna. >> we watch how wireless service has typically been a disinflationary component on the indexes. you have iphone 14 reviews out this morning and this news that apple is going to use taiwan semi-tech in the iphone and the mack that's what the nikkei says. >> several notes today that the 14 will be a bust. who are they talking to? i bought the 13 because i lost my phone and they said why don't you wait a week, get a new phone. i said when would i have it in my hands they said, i don't know. we have many more orders than we

thought we would okay so is that anecdotal, it's one store? believe me, i said, okay, why don't you call 40 stores and get me a phone, will you the guys initially -- i wasn't trying to pull rank or anything. they said, listen, there are no phones everyone knows that there's all these new features, but the analysts all of whom are probably desperate for a 14 are saying for the most part when i read about the 14 it's negative. >> right. >> it's negative except for all the people who want to own it. >> well, the stock did hold yesterday, jim 154-ish. >> i think it's going to make a run into the launch. the stock that's bleeding endlessly no matter what people do, and mr. moneys ford was saying earlier but the stock that goes down all the time is meta. >> meta. >> there is a feeling -- i can't prove this by the way that mark zuckerberg is not engaged. i can say the opposite and he is they do have a problem that

people don't seem to be posting as much. this is to quote president nixon become a pitiful helpless giant. i think what they need to see is start talking about the fact that reels is taking business from tick tok. people keep saying tiktok it's just being posted on reels how prevalent was tiktok i was showing the costco people about how you can kirkland things this is a great video about kirkland is of course their brand. i think that -- that reels is going to be a competitivething but meta has been caught here. they're caught in transition they care about the stock, but it's not the stock that people are crazy about. >> that's a new low for the year. >> wow. >> which is -- it did not hold, for example, apple held last thursday's lows. meta did not. >> no, that's -- meta is -- you know, meta -- meta needs a big surprise of course, the semis remain

disastrous but remember the smh is down more than 40% for the year we need to see a retest of some of those without a doubt the one that keeps getting told to me was, jim, why did you ever like -- why did you ever like nvidia i said, i don't know, perhaps because it's one of the best performing stocks of all time. nvidia to semis is meta to internet and these are stocks that people just feel are overvalued and i want to hear jensen wong's coming presentation because right now i think people feel like nvidia is just a gaming chip, it's going back to that i don't know do i want to buy nvidia, my travel trust owns, we've sold a lot higher, we have not bought it back. >> that's interesting. in pharma, moderna, the ceo, says he's open to selling the vaccine to china, mulling a facility in japan. pfizer began some phase three on an mrna-based flu vaccine.

then you have some movement on berenberg ups merck to buy. >> i thought the merck piece was good, the stock has given up all its gain look, moderna needs -- howard schulz always says -- by the way, so does tim cook in apple, which is buy china for china i think if moderna would have put up five factories in china in cities that are closed down, i think what -- they would have forced president xi to say, do you know what, they're doing it here, it's no longer just a western phenomena, we're going to start vaccinating i don't know whether i want to go to that -- if i were president xi he's making that pill garage image. >> kazakhstan now. >> they better hope there is not a strain of covid there that we don't know about one of the things that people talk to me about constantly when i'm on the road is what's with the chinese? how did they become anti-growth? how did they become

anti-science over and over again. this is bad communist science. >> that's interesting you say that because yesterday, i mean, it was a bad day, but nike was particularly bad, china exposure, today boeing, bofa says likely maybe to guide down soon on some of these disappointing max deliveries boeing will be one of your worst downings today. >> dave calhoun had a job-like job. this is the stock that typically you would buy when you have an extremely full plane i don't know i think you could take a plane right now -- i don't want to pick on any money city take a plane to youngstown, a city i like. it's going to be an extremely full flight. they don't have enough planes and boeing has got a lot of planes, but i think that boeing needs china orders and they are just not getting the orders. it's very hard to get a plane, but in order for the stock to -- you need china orders.

you need to do scale they're not selling at scale my travel trusts we had good sales and then a bad sale, but i don't know if it can be owned right now. >> finally, jim, i did want to ask you about buy backs because we mentioned the j & j, that's $5 billion, comcast today upping the total to 20 and says they've done nine already year to date are they -- you see companies trying in ahead of the tax next year >> maybe i saw that drk i worked for comcast. we work for comcast. i saw how much they bought and how much they're buying and i saw the price multiple of 9. maybe broadband is slowing, maybe nbc not doing well, but you don't buy that much stock unless you have some degree of conviction that there's -- that the future is brighter than the past but i don't know i mean, i know when i talk to analysts they have to solve this problem of t-mobile. t-mobile providing a solution of wireless that is equal to what

comcast has. >> although even at&t this week said there are limits to how much that industry can encroach on classic broadband we'll see. >> i know. look, if you are a comcast and you are as fearful of it as all the analysts, why would you be buying it so much? maybe you would be saying, look, i'm paying 3% yield, i'd rather buy shares to have fewer people get taken. look, there's positive and negative but at least there's some positive. >> overall, though, dow is up 85, obviously looking at an inside day after yesterday's tough session. as we go to break, we will watch bonds today, we are in a blackout window so fed speak is going to be minimal to nonexistent but the two year as jim said is the one to watch backing off a touch from 3.83 earlier this morning we are back in a moment.

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dow is holding up some 50 points, s&p up about 8 jim mentioned new core also travel names, wings in there. we mentioned the downgrade of the rails as we got a downgrade of csx and ump over to bernstein. targets of 32 and 230 respectively tomorrow disney's bob pay chuck in the 9:00 a.m. hour. we'll be right back. he'd crunched numbers day and night. that's it. to maximize profitability. morning. i have quarterly numbers that are beautiful. and forecast revenue from every corner of your organization. is that important? or you could use workday. the finance hr and planning system that helps cfos make better decisions faster. for a solve problems like a genius world. workday. for a changing world. ♪♪

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trading. >> maybe some stocks are so low that they can handle losses like goog it is really extraordinary they lost the android appeal nobody seems to care maybe nobody seems to care because this stock is down horrendously something to watch, 19 times earnings for a pretty good company. >> yeah. they lost this appeal decision in europe. 4 billion is a record find. >> 4 billion here, 4 billion there. maybe it matters what i'm looking for is negativity bad news, it doesn't go down that would be a buy. >> what's on tonight

>> i've got etsy if you see what's happening with block and you know the small business people, maybe they're being hurt, maybe not. he will tell us. i think that sadly you need fewer small businesses they're a big engine of growth they have not slowed down at all. >> that's true jim, great to have you back. >> great to be here. thank you. >> we'll see you on "mad money" at 6:00 p.m. eastern after the break we'll keep on track with market volatility and check in with charles schwab's liz ann saunders in a moment

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the delta skymiles® american express card. if you travel, you know. good wednesday morning welcome to another hour of "squawk on the street. i'm carl quintanilla with leslie picard markets are hanging in to a mild gain here with 100 points on the dow. the worst day for the major indices since june of 2020 not that much relief in yields a reason to be wary. >> wary seems to be the name of the game 30 minutes into the training session. here are three big movers we're watching this morning.

starbucks one of the biggest gainers after unveiling its reinvention plan and investor day. more on that later this hour shares of 5% and jim cramer enjoying a pistachio latte as he described last hour. amd falling again as chip stocks continue to feel pressure, now down more than 10% this week, one of the biggest laggards on the nasdaq currently trading flat for amd finally bitcoin trying to hold on to 20k this morning after selling off alongside equities this week. you can see they're 20,000 -- about 20,296 right now. >> that hotter-than-expected inflation data leading many investors to expect bigger action from the fed. steve leishman has the breakdown as we got calls out there yesterday, steve good morning >> some big calls. unlike yesterday's cpi data which was uniformly negative today's producer price index was

mixed, some improvement that could help ease consumer price pressure in the months ahead ppi coming in headline number. the year over year 8.7 and the core 7.3, both going down, but still remaining too high how did we get there energy again leading the way down, minus 6% with a fall in gasoline and diesel prices take a look there at the food prices zero resh they were hot yesterday and the cpi trade services are up suggesting retailer margins are pretty good. transportation costs falling 1.4% that's a good sign perhaps down the road unclear how much improvement in wholesale prices ends up in the consumer price index cpi pushed by, among other things, rising housing prices along with higher wages, especially in the service sector take a look here the outlook for the funds rate eased a bit this morning that was after a massive surge yesterday as carl was suggesting, bringing market

pricing for the peaks funds rate to 4.38% in april and a forecast to end this year by -- at 4.21%. embedded in that pricing, a 37% chance of a 100 basis point hike in next week's fed meeting i don't think that's likely. the broader story here, the market looks finally to be internalizing what the fed has been saying, that rates are headed at least to the 4% range as a base case, and the question is how much higher they go that 4.3% i showed you shows 4.5 is likely in play. then you've got to start thinking, well, do they need to get even higher than that? that means markets are also abandoning this sort of lingering hope of going back, clicking your heals back to a lower funds rate in kansas >> my hometown thank you. >> the pivot seems to have gone the way of the tornado in using

that analogy no tornado $where you are. >> very good >> sort of sunny skies you tell me. markets attempting to recover from their worst day since 2020, but president biden is not worried. >> the stock market doesn't necessary reflect the state of the economy, as you well know. the economy is still strong. unemployment is low, jobs are up, manufacturing is good. so i think it's -- i think we're going to be fine. >> what about the inflation number, sir? >> no, i'm not we're talking about .1%. anyway, thank you. >> for more, we are joined by bank of america's jill carrie hall here. jill, let's turn to the markets for a second if we an. obviously we're seeing a bit of a bounce today given yesterday's reaction, i think a lot of people are wondering are we in a second leg of a bear market bernstein says we have further to fall having analyzed further rounds and found on average from peak to trough it's a 28%

drawdown versus the 20% we've seen so far. >> thanks for having me. we think this is still a bear market rally and the market could have further to fall a 36 year-end target on the s&p 500. when we look back at what we call bull market fine posts, we have ten signals that we look at where most of these usually occurred before the market entered a new bull market. the majority of those still haven't been signals so six of ten are suggesting this is part of a bear market rally. usually the fed starts cutting before the market bottoms. when we look at what we call the rule of 20 which is that cpi, inflation and the trailing key ratio for the market should equal about 20 or be below that, right now we're at about 27. the market pe is still very elevated so we expect we could see further downside risk to

equities from here. >> so then what should investors do on days like today where they do experience a bounce would you recommend maybe crystallizing some gains, getting more into cash >> we think there's still opportunities within the u.s. equity market. rather than buying the s&p 500 which we've actually felt has had more risk than some of the other benchmarks, we think that small caps are one area of opportunity. they have been much more adequately discounting the risks of recession where we are forecasting at b of a a mild recession you could see early next year. small caps are trading at more than 20% below their long-term average multiples whereas large caps are still expensive small cap is at record levels. they're benefiting from fundamental trends we see in the market right now a cap x recovery in the u.s., reshoring of u.s. manufacturing where we're seeing more and more evidence of that

we do like small caps and we also like value overgrowth value is still relatively inexpensive versus growth within both large and small caps. we'd stick with value. value in small caps tend to work within the later stages of late cycle markets where we think we're in one of those today. in terms of sectors, energy still ranks well within our work within both large and small caps health care ranks well within our large cap work that's a sector that looks a little different in small caps we're more cautious. lastly we'd say pick stocks, a good backdrop for active managers within small caps that's true as well, our analysts at b of a cover over 900 small and mid-cap stocks we think it's good to buy things other than just the s&p 500 index. >> it's interesting, b of a, as you said, has been net cautious

for a while now actually before it was popular and it's served a lot of investors well. i do wonder europe, your view on that and if you think the market narrative has been moved at all on either their progress on energy security or the counteroffensive by ukraine. >> well, i think overall we've been cautious on equities in the u.s. and have taken a cautious view in europe as well i think from -- to the point about energy security, i think energy has been a huge topic this year, and that ties into a lot of the work that we do on esg where this year you saw somewhat of a reversal in terms of esg strategies as a lot of investors focused on energy security that's been one point that we've been talking about in our esg work is that a lot of esg investors have been underweight areas like energy and defense. we think being exclusionary and excludeing these areas from those type of strategies can

actually hurt these investors' performance. so we would advocate more inclusionary strategies with respect to some of those areas. >> yeah, this year and last year definitely show the full extent of what divestitures can result in in terms of returns thank you, jill. appreciate it. meantime, as we said, treasury yields jumping as investors bet the central bank will be more aggressive. bring in professor alan blinder. his book is coming out next month. congratulations. that's fantastic. >> thank you >> i wonder, in your reflections on the cpi print and the market's reaction as well. some have argued some of the stickier more consistent opponents were surprising. others arguing that's exactly what the fed chair told you, at

least in jackson hole. >> i think it was a wee bit surprising i've been coining for decades, blinders love the speculative market they exaggerate the magnitude by a factor between 3 and 10. i think that's what happened this time. it was bad news. it was a little worse than we thought, but, you know, what was the miss the miss on the cpi markets were expecting i think 8.1 and they got 8.3. this is not the end of the w world. it was negative inflation news, absolutely. >> i think certainly the hawks would point to rent and the pace at which it's climbing highest in 40 years. and core in general. only a handful of times has core beaten estimates by .3 or more. >> it was bad news i'm not denying that it was absolutely bad news i've been hoping for some time that around now inflation would

turn down. technically it's turned down, but a tiny bit down. i was hoping for a larger turndown than what we're seeing in and the markets reacted negatively to that news which is a rational reaction. >> allan, i was going to ask you, since you recently studied -- done a deep dive into the history since the '60s, a lot of people analogizing the current environment to what was going on in the 70s and the 80s perhaps. do you think that's an appropriate analogy given some significant differences back in that time period, we were looking at maybe 11% rates versus where we are currently. is it an appropriate analogy given how much the world has changed? >> i think it's easy to exaggerate the analogy there are some similarities. the most obvious one is looking at the highest inflation now that we've seen since back in

the early '80s if you think about the -- go back to 1979 and the situation inherited by paul who broke the back of the high inflation we've had high inflation for like 13, 14 years by the time vol vul kerr took over we've had high inflation for about a year and a half. go back two years, we were looking at below 2% inflation. people remember that it's not like they think 2% inflation is an impossible world and 10% inflation is the world we live in that's what people thought in 1979-'80, very different from what they think now. you can see that in objective measures of inflationary expectations such as the break-even rate and other things >> that's pretty fascinating, especially when you think about what powell said to cato institute the other day about

inflation expectations they're low and they've actually come in a little bit in a sense, the longer you let them fester, they do become a bit of a time bomb, right? >> yes that's my point. by the time volker got into the chairmanship of the fed, they festered for quite a long time that's just not true now. >> alan, pretty fascinating, as a bunch of people are trying to make the call on the september meeting. congratulations on the book. look forward to talking more about it >> thank you. >> good timing for that historical analysis. a freight rail strike is looking. union officials and representatives at the railroads arriving at the department of labor. kayla tausche is live in washington what do you see? >> reporter: we're just a few hours away from a potential shutdown, about $2 billion in business that happens by rail on a regular basis. just about an hour ago, the

department of labor, secretary marty walsh convening a meeting here at the agency with the relevant railroads and unions who have been negotiating for months over working conditions and payment for workers that say that it simply hasn't been enough the administration so far has been deferring to the independent outside presidential emergency board which last month issued a 124-page report with many recommendations that leaned heavily on higher pay for these workers, but a couple of these 12 unions who are driving these negotiations say that unless they deal with working conditions, paid leave and the like, that they simply don't go far enough so currently they're in negotiations we don't know exactly how this is going to turn out, but there are lots of contingency plans being discussed at the moment. the biden administration has convened many agencies to talk about emergency powers it could authorize to try to divert some

of these shipments that normally happen by rail by air freight, but other modes of transportation, and those conversations are still on going. companies themselves are making contingency plans as well. i'm told by a source that csx, the railroad operator, has already told some of its customers that any shipments that are in transit will be completed to their destination even if a shutdown happens while those goods are still in transit. you could see a big impact on commodities like ethanol, for instance, which is transported 100% by rail that's something that the administration is paying close attention to, especially with such a high focus on inflation, on gas prices and the like we'll see what the secretary has to say when this meeting wraps up in due course here at the department guys >> interesting certainly in some ways the last thing the economy and markets need is a deadline like this, kayla, thank you

kayla tausche watching the rails. energy one of the few bright spots in that inflation read in august what comes next as we go into winter. we'll talk strategy with the head of a $16 billion asset manager, rockcreek, as investors continue to weigh inflation and a hawkish fed. u.s. mortgage rates hitting their highest levels since '08 we'll discuss it a big show ahead don't go anywhere. (driver) conventional thinking would say verizon has the largest and fastest 5g network. but, they don't. they only cover select cities with 5g.

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a volatile outlook for the

consumer this week after inflation came in hotter than expected wu key respite, falling gas costs. here to discuss, daniel yerg en, author of "the new age, energy climate and the clash of nations. we were talking in the break about how it's been a very busy year for you, dan. let's start domestic, though as we look at just the directionality of gas prices, quite the about-face there's been some reporting out there that the u.s. may begin refilling its emergency oil reserve if crude dips below $80 a barrel, basically to support the prices to encourage oil producers to continue on their trajectory what do you make of the current environment with regard to prices here in the u.s.? do you think it will continue to fall >> well, i think two things are driving it one is price works, so demand is down in the last couple months deplanned down 6 to 8% lower than the same time last year

the other thing is the new arbiter of oil prices is the federal reserve. it's the central bank of oil, but it's signaling on interest rates, certainly permeating the oil market as it is the stock market. >> fears that demand would be crimped. >> yes, because of less economic activity. >> with europe very much in focus, there's been some progress made on potential government intervention there, the eu wants to cap energy prices, limit consumption among other policies of course it has to get buy-in from member nations to do that what do you make of this type of intervention do you think it will work? >> it's all about caps now caps on oil prices, russian oil. gaps on gas prices and power prices in europe it's a very painful situation. electricity prices as much as ten times higher than normal i think it's inevitable they're going to do this what they're going to try to do is, well, electricity prices are set by gas, but if you're a

renewable you're getting windfall profits so we'll take that away. they said they'll ask other gas companies for a solidarity fund. i think given the degree of economic hardship, it's inevitable, and you hope they do it in a sound, prudent way. >> do you think the incentive structure changes for those companies in europe? do you think they'll continue producing at the levels -- >> what they're worried about is if they put a cap on natural gas prices themselves, that means the lng that's going to europe may go to asia where they pay a higher price they didn't want to disrupt that this is the way they're trying to do it it's a terrible situation they weren't prepared for they're i'mmprimprovising. >> there were some forecasts for dutch natural gas to actually come way down because storage is so high and they would have to pay the piper when storage came down next spring does that make sense >> i think they've done a good

job on filling storage that gets you in a position for winter if it's a cold winter and russia does what it looks like it's going to do, remember, for putin this is an energy war, this is an adjunct to the war in ukraine. he's using gas to create economic hardship and political turmoil in europe. he's going to continue to do that the dutch actually have this field called grow engine where they can start up production, but they've been reluctant to do that. >> because >> because there was environmental opposition to it in the past. but right now, if you go down to houston, you'll find it filled with europeans trying to find liquefied natural gas that they can buy from the united states. >> we just heard from kayla tausche regarding the potential for a rail strike if they don't come to an agreement what do you think the impact of that would be on commodity prices especially given the backdrop of the current inflationary environment we were already experiencing. >> first of all, the battle over wages is a sign itself over inflation.

i think that would be another disruption to supply chains, back to supply chain disruptions and all the things that does to prices. >> finally this morning, there's items on the tape about moderna, the vaccine maker and whether or not they would be open to selling the vaccine to the chinese. who knows if that's going to happen if it were to happen and they were able to reopen in some sense, how do you think energy would react? >> i think oil prices go up. the other thing that's been repressing oil prices is chinese demand is down because peaked are locked up and economic activity is down china's problem with covid has been a benefit to consumers compared to what they otherwise would be it's a very entering chain to go from moderna to a rebound in oil. >> it certainly really drives home the point of the interconnectivity. it's increased the price of certain input as well given the shutdowns there. >> dan yergin, thank you for joining us today really appreciate it. meantime vice chair --

carmakers seeing weaker demand amid a continue inflation squeeze while still working through supply chain disruptions, obviously surging costs. joining us from the detroit auto show, is carlos saf var ras, the automaker behind chrysler and dodge. what do you think the headline is going to be is it about continued transition to evs, or is it about pricing, reliability, efficiency. talk to me about headlines out of the show. >> first of all, i'm very happy to be hear in the motor city, detroit, for the show. i think the headlines are very simple we are starting today a very strong journey as we are going to launch in the next few years 25 new pure ev models with our

american brand starting with jeep we have now a very, very strong technology pipeline, product pipeline, and more than 25 new pure evs will be launched from now until the end of the decade in the u.s. market we are really kpael rating very strongly we have the technology, we have the products, we have the appealing models, we have the leadership, and we are now executing. i think that's the headline for stellantis. >> the president about to announce additional spending from the bipartisan infrastructure act a lot of that going to chargers in about 36 states what do you think needs to be done to allay the concerns of a would-be buyer that, yeah, i'm happy to own an ev, but i need to be assured there's a charging network i can rely on? >> this is absolutely correct. i think we have three strategic

topics to execute. the first one is clean energy. clean energy is the foundation of this journey. that will take some time the second one is infrastructure this is the one you mentioned. it has b to be at the level of density that removes any kind of anxiety combined with the fact that the range in our products are increasing by the day. the third one are the products in fact, the products are there. the products are on sale and we k know, if i take the example of jeep, we have the products, we have the electrification it's on sale we need a higher level of density for the charging network, and what has been decided by the u.s. administration on the ire is absolutely the right thing to do we need to move in that direction. it's now a matter of execution energy, infrastructure and mobility devices

we have the products we need the infrastructure and we also need to be working very hard on bringing the clean energy that will make life cycle analysis a very nice deal for the planet this is exactly what we're doing. in a company like stellantis, where we have committed to our children and grandchildren that our company will be carbon neutral by 2038. >> part of that is ev production work resumed earlier this week in kokomo, indiana, after workers went on strike there saying they were experiencing unsafe worker conditions you reached a tentative agreement with them, but union activity including strikes obviously on the rise here in the u.s. looking ahead as you do increase your ev production, what are your -- what are going to be the implications for workers what do those discussions look like right now is there a risk of further strikes in in current

environment? >> well, certainly i think we have to be very sincere. we have to tell the truth. it's a good opportunity for me to repeat. we will have to demonstrate a very great learning capability of new things, learning new technologies, new processes, new products it's a learning challenge that we have ahead of us. but that's also a very strong asset for the western world. we are learners. we are a significant level of scientific education it's absolutely correct to say we need to learn a lot of new processes, technologies and ways of doing things differently. that's a fact. it's also a very good opportunity to enlarge our skillset for everybody, including me, by the way it's also a very good opportunity to take the lead in

competitiveness in a certain number of areas. that's point number one. point number two, we should not be afraid of the unknown it is very important that we realize that, if we want to protect our lifestyle, if we want to protect our wealth, we need to accept change at the same speed the world is changing around us, which means we should not be afraid of the unknown because we are collectively strong working on those challenges and overcoming those challenges of course, the major trap that we need to avoid is the fear of the unknown. this is going to be a collective journey, an exciting one many new things will come. we will be able to leverage our scientific education therefore, i'm quite confident, at least for stellantis that we will be able to overcome those challenges i'm very confident. >> a lot of technological

transitions are a little bit scary. it's going to be fascinating to watch. carlos, thank you so much. carlos tavares joining us from stellantis still to come, chips are feeling pain, where one analyst says the opportunity is. we have gone red today down down 100. dollar index still a little bit lower. the two-year yield, important to watch, has come down from 383 down frto 377 - oh, the stock market is doing that fun thing again. news from the future: you're going to live through that

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welcome back august's hot inflation number stirring up consumer concerns despite consumer discretionary ticker xly trying to reverse losses after the worst day since may. down by about 4% on the week starbucks has been a relative outperformer, the company unveiling reinvention plan which includes a long-term forecast hike, double-digit growth ahead and 50% more stores in china by 2025 that stock up 5.6% right now. let's get a news update with

bertha coombs. >> good morning, carl. here is your cnbc news update this hour. ukrainian president zelenskyy made a surprise visit to newly recaptured towns he thanked soldiers for their success in retaking land from russian forces and surveyed damage from the fighting zelenskyy says ukraine has liberated about 3,10 square miles of territory this month. queen elizabeth has left buckingham palace for the last time her coffin transported by a horse-drawn carriage followed on foot by king charles and princes harry and william. the procession has arrived at the house of parliament. the queen's coffin will lie in state for four days in westminster hall. hundreds of thousands of people are expected to pay respects later today the first of them are already lined up, standing in soggy weather for their chance to view the queen's coffin. back in the u.s., nbc news

projecting don bolduc has won the senate seat in his race against democratic maggie hasan, expected to be one of the most-watched battles in the midterm elections. back over to you >> remarkable, bertha. under two months to go until those midterms thank you. more market action ahead ceo of rockcreek joins us with n'gomarket strategy next dot away. we're back in two. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

after yesterday's selloff. rock cite creek ceo afsaneh beschloss joining us perfect day to have you. what do you see as the

read-through from yesterday's cpi, today's ppi with regard to fed policy are you more in the larry summers camp of they need to do 100 basis points or 25 would be sufficient so not to tilt the economy into a full-blown recession or the majority who believe 75 basis points? >> the numbers were certainly tough and the economy is in a tough place as we speak. household net incomes are moving up at the same time from a real point of view they're not. household net worth is down about $6 trillion in q2. you have households borrowing more and also you're starting to see, for example, in san francisco that had a very heated real estate market, you see that real estate is starting to get a little bit more soft now, against that backdrop, the numbers did shock the market no question yesterday. i think looking at rockcreek at

least what we're seeing is they have changed one thing which is the terminal fed rate. if we thought before yesterday that they were going to end up closer to 4, we probably think they're going to be about 4.5 when we end this dance i think the very big question is whether it's going to be going more into return earnings or real wages will end up being higher why does that matter that will determine what kind of recession we come out of or a growth scenario in the economy which will have very different implications let me end by saying we're still at 75 basis points right now for next week, but probably another 75 basis points for november so i agree with larry. you have to be careful but i also think it's the terminal rate we should be looking at. >> so where do you see this playing out? is it necessary to push the economy into a recession in

order to get inflation under control? is that just a collateral aspect of what's going on in the current environment? >> i think that's what we're hoping the policymakers will manage to avoid. they have started late in the game of increasing rates so that we are where we are today, but i think there's still hope that, if the increases go on as expected, if the economy starts showing signs -- and it's already showing signs, even if not in the numbers we saw yesterday and this morning with ppi, inflation will start probably a little bit later to be under control i think we can avoid a recession. again, like i said, if we end up with slightly higher wages and slightly lower earnings not good for markets maybe, but might be good for growth scenario what markets might like may not be good for the overall growth of the economy but lots of opportunities at the same time to invest in >> such as >> such as, carl, for example,

you have to look at where the policymakers are going there are two areas we keep on hearing. a lot of people have been talking about what's going to happen to the tech sector, but a lot is happening on the climate side as we're sitting here together so while everything else is feeling very gloomy, for exam, climate tech is having a huge amount of growth, and there's so much investment going in from startups to broader markets -- yesterday, in fact, one of the very few market participants that did well was an agriculture science company. if we look at the trends, i think there's two that stick out. one is things related to climate, water and ag and food are going to be resources that are in short supply in the short, medium, longer term most likely investments in those areas will be interesting and also biotech that got killed over the last few years. there's a lot of potential there. >> that's interesting, yeah.

i'm also thinking of a name like first solar yesterday which completely bucked the downward trend, but others would point and say the industry is still young and still highly dependent on support from government subsidies and tax credits. you think that's material to worry about? >> let's not forget, solar power -- i've been working on clean energy for more than 25 years -- it's so cheap now renewable energy has become very, very cheap and very competitive with oil and gas so from a longer point, you're going to see growth in solar we're starting with such a low base, i think close to 3% in the u.s., so potential for growth is going to be huge and government subsidies and the new inflation act would certainly help grow this market. >> i know another thing you've been focused on, afsaneh, is the trade dynamic with the u.s. embarking on more of a hawkish

trajectory with china easing how does that impact the overall trade balance? >> i think, leslie, it depends on how fast we can build out various manufacturing, or we just talked about solar, solar panels closer to home or at least the higher-end part of solar energy closer to home, in north america, whether canada, the u.s. or mexico that trade balance probably will change for political reasons, but also for economic reasons as a lot of manufacturing gets closer to home, and the other factor we're seeing is a lot of companies are moving out of china into neighboring countries like vietnam so asean might do well even if china doesn't do as well as it used to. >> world order is changing as we know it. afsaneh beschloss, thank you for breaking it all down for us. we appreciate it. >> thank you, leslie. meantime, semi stocks facing supply chain slowdowns, demand

pullbacks and now even more persistent inflation than expected what comes next for ll 1 ts ekafrs as names like amd fa0%hiwe, ter the break. y keep you tuned in all day long. so when something happens that could affect your portfolio, you can act quickly. that's decision tech, only from fidelity. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

the chip names, as you know by now, bear the brunt of yesterday's selloff. our next guest says keep an eye on taiwan semi joining us, wedbush security matt bryson. anything change yesterday in terms of real valuation? >> i think what we saw yesterday was very much tied to concerns about interest rates given what's going on with inflation no, i think everything got less expensive, but i don't think it had a lot to do with what's going on fundamentally in the chip market. >> why do you think taiwan's

semi outperforms here? >> i think taiwan semi is prime to gain share. you saw this morning apple using their next generation process. i don't think that will surprise anyone but apple is outperforming they use taiwan semi across their product sets so that also helps taiwan semi, but then on the pc side where apple is continuing to shift their silicon away from intel towards their own designs, it's just another place where tsm is gaining share. i think with taiwan semi, yes, they're tried to the broader semiconductor market, but also they've created a leadership position at the height of manufacturing and their customers are gaining share.

>> what do you think, matt, would cause the sector to bottom or come close to bottoming it seems like it really does just react and kind of alongside fadeout and a fierce manner with regard to the broader macro situation. do you think that that is a determinant as to where this sector finds the bottom, or are there other factors at play? >> i think certainly the semiconductors in general, they tend to react a bit more negatively and positively to macro news flow. in part because they oftentimes are higher names in terms of where they find the bottom, i think one of the struggles right now is you've got two things weighing on semiconductors one is you've got concerns around the macro economy and concerns around what core demand

will look like and also concerns around current demand. be that exacerbates softer demand i think as inventory gets worked out of the system and always gets worked out of the system, even if you have softer demand,, some of the weight on the semiconductor companies will start to evaporate >> that's interesting. when you think about whether or not to recommend a name, do you want them to be more exposed to any particular vertical silo, gaming, data center, crypto, auto, pc, the like >> i certainly think that all sectors in a difficult macro environment are going to struggle but as you said, i think that within those areas, there are companies that will outperform certainly if you are exposed to autos and are exposed to the

shift towards electric vehicles, that is going to help you. from a company perspective, i think you have share chips we talked about apple gaining share. i think amd is set to gain share in servers so that offsets the broader concerns i think it's in part markets, in part positions within their various bases, are they shared gapers, losers, is that properly valued in the calculation. >> that's important to watch as the smh holding yesterday's intraday lows. matt, thank you very much. fascinating space. inflation data sending the nasdaq tumbling yesterday, did show signs of life we'll have the playbook in about ten minutes on tech check. plus airbnb talking about

the consumer, pricing, and business when we start that show in about eight minutes - yieldstreet presents: alternative investing with kal penn and older kal penn. - oh, the stock market is doing that fun thing again. - hey news from the future, you're going to live through that about 10 more times. (laughs) - oh, it's no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - ooh. i think some of my gray hairs just reversed. - yeah. you're welcome. - [narrator] become an investor today. yieldstreet: private market investing.

welcome back to squawk on the street i'm dominic chu stocks are now moving to session

highs right now, but have been positive and negative during the course of this early morning trade. the material sectors in particular is amongst the worst performers in trading so far today. now within that group you have a range of names extending some recent weakness. you have eastman chemical, also following an 11% drop yesterday for eastman. also freeport mack when it comes to metals, copper and gold, all lower and nucor for steel, citing weakness in mill segmen tcthe in today's trade keep it here more squawk is back after this break

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u.s. mortgage interest rates topping 6% for the first time since 2008 diana on lick has the latest >> this was the first weekly average we've seen over 6% since november 2008, which of course was just after lehman brothers collapsed and amid the subprime p mortgage crisis.

it's gone higher since last week, i'll get to that in a second the increase hit refinance demand, fell another 4% for the week and was 83% lower than a week a year ago. and only about 452,000 borrowers can benefit from a refinance, that's the lowest number on record so rocket and united wholesale mortgage underperforming the market this morning. mortgage applications to buy a home were flat week to week but 29% lower than a week a year ago. more supply is coming on the market but they're starting to do deals with full contingencies now, like home inspections rates shot higher yesterday after the hot cpi number a separate daily read put that rate at 6.28%. we don't have today's read yet and bond yields are now falling,

mortgage rates loosely follow the yield on the 10 year treasury >> thank you so much. let's get a check before we go to tech check on the markets. you can see all three major indexes in the green, catching a nice bid compared to earlier today. that will do it for ""squawk on the street" tech check starts now. good morning, i'm carl quintanilla with deirdre bosa and john ford. today, the worst day since june of 2020, how should investors be repo repositioning? we'll breakdown opportunities in cloud, chips, and fin tech to help weather the volatile pip what's the consumer telling us about the state of the economy we'll talk to brian chesky in a few moments on inflation and how that's impacting spending. and the iphone reviews are out, more on what demand is signaling to investors about where apple might head from here