mona, thank you. appreciate it. what a morning it has been let's take a final check on the markets. the red is all over the screen i hate to say it, but that's the case right now, dow off close to 400 points we'll see you next week. make sure you join us. "squawk on the street" begins right now. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla talks to cramer about a global recession even as the two-year comes within 8 points of 4%. our road map begins with that stark warning. >> are we going into a worldwide recession? >> i'm not an economist. >> you know more than economists come on. they just push papers. you actually look at things. >> i think so. >> you think we are? >> i think so.

but you know, again, these numbers don't portend very well. >> the ceo of fedex on mad last night with jim warning of a recession withdrawing its guidance announcing significant cost-cutting matters >> also shares of ge falling as supply chain issues continue to affect deliveries and potentially hitting third quarter numbers. and paramount's ceo, hear what he has to say about, well, a potential slowdown in the ad market i'll give you a hint it's a little more positive than most of the tone, carl >> let's begin with fedex, shares getting hammered, on pace for the worst day ever company withdraws its full-year guidance bunch of cost-cutting measures, shutting five corporate locations, jim a lot of discussion about what this means in the context of some of the other warnings we got this week. >> i'm calling it 70/30. 70% of the problems are macro. china -- frankly, china is a

disaster, okay disaster europe, manmade, obviously, putin there, not enough money after you pay your electric and heating bill our country, slight slowdown david, the cost structure here, as you have said over and over again, is out of control >> it is and you know, i wanted to talk to you about this, and i think it's so interesting you just said 70/30, because i have a number of people who would say, uh-uh. this is more about execution than it is about macro they can blame macro all they want european business, not good. the margin profile of the ground business in the u.s. is a disaster the express miss was a profit miss, almost equal to the entire profit miss, and are we really going to see this from u.p.s.? or is this more reflective of what, frankly, the activists had been talking about, that is, a lack of execution on the part of fedex? >> you know, obviously, macro plays a role here but the

question is, how much? a lot of this market is depending on the idea this is not a fedex problem. >> do you know how much time i spent on that 70/30, betting it may be 60/40 i never felt 50/50, but the reason why i think i may be too low is that the actual revenues weren't that bad $500 million miss. bottom line, not top so, i think, david, if russia hadn't said, worldwide recession, i think what you conclude is, cost structure out of control, given the facts. >> you wonder, do they have a complete sense of their business it wasn't that long ago where they came out with their fiscal year '23 guidance that was above the street >> june 29 >> they didn't raise it, per se, but they came in with a number that was above now we're talking 40% below that, only two, three months later. granted, the economy has changed. nobody' saying it hasn't and certainly europe and much

more so asia >> how about, each week getting weaker and i think, carl, we got to talk about this. i don't think we can talk enough i know there's some chinese numbers that came out tonight. i don't care anymore about the government numbers from china. i don't think they're telling us the truth. it's a hard charge, but when i listen to what the ceo of fedex says about china, it's worse worse than before the lockdown it's worse than through the height of this covid what the heck is going on in china? >> right >> so, are you going with the school of thought thabtt says, f they were really truly macro, plenty of companies have had lots of chances to say it, aside from huntsman and even ge. >> well, i don't want to get away i mean, this is a macro story. it's a macro story, because of china economy and flying planes

to china and as david always said, maybe got too many planes flying back half full. europe is happening so quickly, because these bills are mounting so fast. the u.s. was very hard i pressed hard on u.s. to find out how bad it is, and it's not as bad but they've got a lot to fix here, and they got to fix it fast they got to fix it faster than i thought they had to. and they're doing it unlike cal, who did it in a -- when u.p.s. was strong they're doing it in a weak environment, weaker than people realize, and i, at one point, said, at the top of my show, is jay powell watching this david correctly criticized me, that i was too glib. i meant to really just try to minimize on the conference call yesterday. i said, look, i say this is a good time for healthcare or soft goods, but if it really is a services, buying services and not packaged goods, well, that's got great implications too, but david, it's bad.

>> it may -- but on packaged goods versus services, amazon, i think, july, prime day was a big hit. >> it was very big >> u.p.s. had a blog post last week, landing a job at u.p.s. just got easier as the company begins recruiting 100,000-plus seasonal workers >> good, because there's people other places, put a brown hat on >> fedex minimized the impact of amazon's business on its own or how much they didbut amazon ha developed its own logistics in a very significant way is there a part of that, that is wrapped up in this meanwhile, amazon seems pretty strong anecdotally. i just came back from a conference, a lot of companies even in the ad business are saying, not as bad as everybody seems to think it is >> i was at amazon business is good >> and his -- people who have covered fedex for a while know their guidance tends to be a little dramatic over the years >> raj was certainly dramatic. >> yeah. >> but we do have a potentially

confirmatory bit of news jeffries piece about packaging where they basically say there's a massive inventory, international paper. >> they go to sell >> yeah. they go to sell. but carl, i want to distinguish the u.s. economy from china and europe u.s. economy is doing okay china is self-inflicted because they won't even let moderna give them the vaccine, and look, putin figured so big -- when you talk behind the show, i mean, putin is responsible for a gigantic amount of decline in this world's economy >> yes, he is. >> one man >> more than we perhaps anticipated when he began his incursion, began his war against ukraine. >> what do you make of doug this morning toying around with the idea that buffett makes a play here folds it into some burlington

businesses, spends a third of his cash at 20 times >> no. i think that you want to see -- this is a fat company. >> fedex yeah we'll go back and forth here in terms of market participants and what they think is percent execution related versus macro, but there's no doubt there have been execution issues here they have three new board members, remember, d.e. shaw got in there and we'll see if those board members step up, but if they don't fix these execution issues over time, then they're going to open themselves up yet again. yet again to more activism >> so, let me ask you, because you know the activist profile. how much of the june 29th positives were to get the activists off their back >> they had already reached their settlement then. >> but they were coming in high, and the next -- right after that, things started to deteriorate. and i think that one of the things we all, carl, we're really puzzling about. what the heck happened in july around this world? i talked to so many tech

companies that say july was the beginning of something we can't count on, and they tend to be in the high -- tend to be in data center, but then i'm out there with amazon web services, they're hiring like mad. there are so many cross currents >> so many and this makes it even more difficult because again, you're left with trying to understand how much the fedex and how much is macro and it's not an unimportant distinction. >> you sit there with jeff marsh, should i say 75 65 we're going -- it's a really good piece by wolf wolf is a good firm, and they say, huge miss, but then they talk about the corporate costs the corporate costs are way too high but maybe when the economy was good, maybe the corporate costs were all right, but the expenses are just out of control here, so maybe if you're in new ceo, right now, like when brian cornell came in at target, i remember having breakfast with

brian, just came in, he said, i'm closing canada i said, you just opened canada he said, if i don't close canada now, it's going to be on me. and he's a pretty good executive. i think they had to do this right now in order to make it so that this is not the company that raj put together. but at the same time, it's happening, like i said, i think the china story's big. >> listen, you're going to be out west again next week, right? >> well, i kind of live there now. >> dream force you're going to get a good feel on things. it's going to be very -- >> for my red hot chili pepper interview. >> i'm not familiar with what you're discussing. >> stevie nicks was not the top? >> i had a picture with stevie nicks. she goes, that mad show. >> she doesn't watch us? watch our show >> it's early l.a. time. >> pretty early. give me a break. but carl, with europe, i'm going to posit a positive

manmade problems, president xi, who was not, by the way, that friendly with putin. >> no, nope. >> that's an issue where putin puts a spin on it. but xi is causing a problem by trying to solve an illness that humana at their analyst meeting said is no longer as important as the flu when it comes to hospital visits. he's doing it wrong. putin, the hope for fedex and all these other companies is that putin comes to a conclusion that he's losing the war >> or if he just comes to a conclusion >> right >> that might be even better >> you know what victor hugo said even the darkest night will end and the sun will rise. >> it's literally true >> victor hugo >> and we have erdogan, i think, erdogan this morning who said that he's told a regional summit attended by putin that he wanted the war in ukraine to end, quote, as soon as possible >> erdogan >> erdogan >> erdogan was one of the

proxies. >> yeah. >> erdogan's been a real problem. look, president xi is basically saying, i understand what's going on well, that's a real endorsement. >> growing pressure on putin, not to mention the fact that they are losing the war, thankfully >> can you tell me how the u.s. doesn't write a check every week what is that >> i think we're sometimes double counting. i think we make commitments, fulfill the commitments and all of it gets reported and you think we keep piling on money on money on money, not that we weren't sending them a lot of arms and/or aid. >> meanwhile, germany seizing some assets this morning schultz basically saying, we've got the winter taken care of we'll worry about this in the spring >> look, the local official when i was in italy, we run a tourism business, said the eu is giving you a stipend to put solar on. 40%. and i think that sharif, last

night, the father of the lng business to europe said, look, we're going to take care of them but he said, why the heck don't the europeans contact us, say, here's $100 billion, we want payback within two years he said, because this country can give them all the natural gas they need to not have a deficit, 2026. 2026, david. what do you got there? >> i'm looking back on some of the fedex stuff, that's all. >> he's focused. >> i'm looking at the files. >> you're focused. i thought he was going paramount. >> i will. >> we'll get to paramount. nice to have david back, having talked to backish. can't wait to hear that. we'll dig through movers of the morning. news on uber today we have one company raising guidance, won't say exactly who. we'll tease that and of course the iphone 14, tim cook at the 5th avenue apple store. futures going to weigh down on the fedex news back in monta me

shares of adobe take another leg lower after tumabling 17% yesterday, the biggest plunge since 2010 the company reported results, announced the acquisition of software design firm figma in a deal worth about $20 billion in cash and stock shantanu did join us yesterday after that announcement. >> the deal is really all about the top line and accelerating

top line you know we're extremely profitable company, and what we have said is we have some aggressive goals in terms of being able to make this accretive in year three, which is rapid as well as driving topline growth so from the perspective of shareholders, what we have said is we will offset dilution, but we believe that it rapidly actually enables us to accelerate our bottom line eps as well. >> as well as take one of their chief competitors, start-up on a relative basis, out of the mix >> one of the things that i think struck people was they bought them because they didn't do it. they bought an 800-person company. you asked the key question your stock was really high kind of like the stock now the stock's low. but also, remember, this company is worth $10 billion last year almost every company is worth $10 billion is $8 billion now. >> you could even argue down 50

on some of these $10 billion last june is $5 billion now and they're paying four times or 200% premium on what the -- what -- now, that's simply because valuations have changed so much, but they are paying 50 times annual revenues, jim it's a big multiple. and that is why investors, in addition to reacting to perhaps some changes in the guidance, investors are saying, wow, how was there a desperation here to buy this company >> couldn't agree more you know, carl, shantanu narayen, he's terrific people have to recognize that. but this is not the environment that you would -- last year at this time, this stock may have gone up, because it was interesting. but this is misread of the audience i mean, i think that he's taking a long-term view, which i think is terrific. but a lot of us are saying, we were looking to adobe to really kind of stabilize, get things

the way we liked them, that the web is still doing well, and it was not even in the discussion >> right buybacks, of course, and by the way, the buyback blackout window sort of begins today it's going to lead some argue to some short-term vulnerability. >> well, look, i think people -- still fedex story. look, i got to tell you -- >> what? >> i finished the interview, i was shaking. >> yesterday, you mean >> i was shaking i was, like, regina, my executive producer, did that just get -- did he just say that and i said that, you know, people said, is it a canary in the coal mine? i said, are you kidding me it's the coal miners the coal miners in the coal mine that canary died a long time ago. so what jay powell -- i was like, is jay powell watching then, i said, if jay powell is, is barry sternlicht? he's a heavyweight

>> he is and he is not afraid to speak his mind barry yesterday was powerful gundlach says the best opportunity in ten years >> says nasdaq could outperform for years. >> go buy apple. we saw the phone yesterday, we saw the future of course, i went and bought the 17 >> he visits -- >> no, i'm going to go up there after. we're not going anywhere >> i didn't get my invite. >> you didn't? >> no. >> i thought you were invited. >> no, i wasn't. >> oh. i thought you snubbed them >> i'm even out in the area out there, like, i'm coming to town, guys, anybody want to meet nobody's around to meet you. >> they have a 14, it's got a really good camera i'll let you know. >> let me know keep me up >> cramer's mad dash coming up in the opening bell. don't go away. (vo) hi. we're visible. a different kind of wireless company... ...running on a big impressive wireless network. how are we different? we exist only on your phone. so you get unlimited data for just $30/mo, taxes and fees included.

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all right. we're doing it standing. a mad dash for the first time in a long time together here at the board. what do you want to focus on >> ge. they had a meeting yesterday, and there was a lot of concern about whether there's weakness in a key business, which is renewables we know that's been problematic. we didn't get to talk last week. they've got that healthcare board, seems pretty good >> yes, that's right we didn't cover that story they appointed their members for the board. that spinoff of healthcare, which felt like it was so far away when they announced it, it's coming early next year. >> i'm glad you said that. i think one of the best things that's happening to ge is i thought this was a 2024 issue, even david, here's the thing. i know the stock's down very badly. they're saying it's supply chain. it's going to be just a push out a little bit

it's in renewables and it was the cfo and don't take it as the end of the world because of fedex, we're taking it as the end of the world i think that ge is making a serious move to bring out value. i know that steve from jpmorgan has been right, says, jim, that's ridiculous. >> shrink to grow has not worked that's a lot worse than the s&p. it hasn't generated a great deal of enthusiasm yet. perhaps it will when they actually are separated, these businesses >> my pushback here on the supply chain issues is, wait a second everybody's getting a little bit better on supply chain issues so i'm not as sanguine about the notion that it's supply chain issues because we're losing interest in that kind of excuse. that's now become execution issues so, i think people are saying, there's execution issues here. >> now you can just go with macro. >> macro >> i got the macro >> i wish that someone like, say, paramount, would give us something -- i'm glad you came

back i know you probably came back and slept on the plane >> thanks to american airlines, i was five hours delayed and didn't get home until 2:00, so thank you, american. >> that was brutal >> i mean. >> couldn't you say, an airline company? >> no. no next time, i'll try united we got an opening bell by the way, you know, you can always catch us any time, anywhere you can listen to andfollow th llodhetrt"pengee oni be pcast we'll be right back.

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in light of the fedex warning and ge and huntsman and eastman chemical all week, we had a couple companies raise guidance, upside preannouncements yesterday, jim, we mentioned the european car rental company. today, it's jetblue. they up their q3 revenue, going to add some seats. >> marriott's having a better than expected quarter. expedia is fedex did say, look, in the united states, it's not so much that we're having a european situation or china it's just that you don't ship a lot of packages if you're going

to, say, a lot of weddings the jetblue number, david, jetblue is up nicely, but once again, that's not the part of the economy that we're used to seeing go up we like when you're doing your home better or sending gifts better or buying an apple iphone better it's no surprise that airlines are doing well it's just that the universal companies that are doing well, better than expected, are connected to services. travel >> meanwhile, something else that hasn't done well is the stock market this week >> i thought you were going to say, american air. >> no, i'm done with that. all the -- everyone's very nice there, it's just brutal. >> the market is not -- >> the market has not been very nice, at least for those who were long. as we end this week potentially yet opening with a significant downdraft, it's not pretty out there, and it's an expectation, of course, that we have a lot more earnings warnings to come and/or a lot more prints to come >> new port had been very

strong opening a lot of plants. and now it turns out that new corps is seeing weakness in very key product lines. huntsman seeing weakness in polyurethane two weeks ago, we were saying, you know, there are not a lot. there were so many this week that i think it was a wake-up call for the fed that maybe we're being a little too glib here in saying 75. and that takes 100 off the table. that would be catastrophic at this point >> catastrophic. >> we're going to find out on wednesday. there's the opening bell and the cnbc realtime exchange on the big board, it's ernst & young at the largest climate event in the world taking place next week. jim, bespoke points out today that the s&p has risen on every hike since the hiking cycle

began this year. >> the reason why i think this one could be different is because we're starting to see a pattern where we're not waiting to see the reaction, and i think you can have that, this is very good >> this is helpful >> getting stuff done. >> is this ernst and young who's splitting up >> eli >> that's what they're excited about. millions of dollars. >> that's what you do when you're splitting up and getting some sort of special dividend. >> that's your buddy, isn't it >> yes to go back to substance of things, david, for a moment. >> if i canhear you. >> let me give you how negative things are there's some 18-year-old that hacked -- >> they're singing "we will rock you" now >> freddie mercury there's an 18-year-old that hacked uber. in the old days, that would be something that we would say, that's pretty amazing, go buy the stock. david, now, a hacking destroys the stock. >> down 6%, uber shares. you see it right there on this

news of a teenager who hacked it didn't do any real damage. >> no. >> but it raises concerns. >> demonstrated they had access to aws, the google cloud, basically their cloud vendors. pretty remarkable. >> yeah, i mean, i know that all these companies have really good detection but i would urge people to talk to nick after this, palo alto networks so often, david, these hacks are things that people just, you know, you have to kind of put your bad hat on, find out what the bad guys want to do. this 18-year-old may be just having a little fun. >> looks like he might have just been having a little bit of fun. so, it might not be a damage being done, just some fun. that said, reflective, perhaps, of still a lack of ability to repel these attackers. and you talk about palo alto all the time >> i do. >> you've obviously benefitted greatly from the environment and

from executing properly. >> yes doing a great job. i don't want to favor nikesh constantly, but i do think that we're seeing so many things off the fedex today, that i want to -- i question we were just add amazon, okay amazon is down big off fedex, but here's something people don't realize. fedex doesn't do any packages. >> they don't do any amazon at all. >> that's it >> that relationship is -- >> it's gone it's gonzo i do more business with fedex than amazon does unfortunately. usually comes -- my wife does. >> you mentioned the international paper downgrade over at jeffries they go to sell. jim, they're talking about, as you said, massive inventory glut, checks indicating orders decelerating rapidly our contacts believe a price cut this quarter is imminent and they have 5% to 6% of capacity coming online in the next 12 months >> nothing is more -- a better indicator of this economy than

line report. on those first liner board cuts, my father, who sold it, would come home and it would be a switch from cold water to wild turkey when they cut -- that happens to be 120 proof and the problem with this is it's never the first cut there's multiple cuts. once you go -- and people are going to say, packaging, again, that's amazon. i would tell you that this is a little self-inflicted because they built a lot of this up, betting that there would be continual packaging and the way that fedex built a lot of roots up, david, internal, because a lot of companies were flying in product because of the problem at the ports it is a perfect storm of people reacting to the last war remember, we're on -- >> i have to respond to you? is that what you're saying >> you always talk about the podcast. >> we are a podcast as well. we're on tv. i didn't really have a response for you. you sounded like you were making a statement. >> well, all right he's still stuck on the american airline five-hour delay.

>> i'm not stuck >> ai've moved on from that. >> i got what is typical of your sleep, like three hours. >> i got the same. >> but you do that every day i don't work that well on it >> i want to go back to the fact that david could have really hammered me today, but he's obviously not being mean because there are companies that are doing worse than i thought and it's absolutely -- you could have said it to me you could have said, jim, you were very glib about some companies, healthcare, yes but for instance, i'll give you an example i thought disney was doing very well >> okay. >> and yet, here's disney's stock down badly, and i'm wondering whether you think that entertainment's doing as poorly as the market indicates. >> i'm not sure it is. you know, there is a belief that things are slowing obviously, listen, advertising is only -- it's not a large part of their overall it's important but there is a belief that that may be slowing although snap, i don't know, we

got some sort of positive commentary >> citi today defends both netflix and disney they defend their buy. they say if netflix pursues all of these revenue tactics, could generate $1,850 of free cash flow per share disney could generate 25 cents of incremental free cash flow. >> how about the nfl up 20% year over year? why does is that not matter? >> it does you'll hear bob bakish talking about that and carl's right a lot of people are starting to focus on the ad tiers, the disney ad tier coming in december, netflix, obviously, and how conceivably, you know, chapek talked about it being at the at least margin neutral so maybe even accretive >> i found myself thinking paramount's too cheap. look, live entertainment, plus gambling gambling is gigantic in this country. and i'm thinking that, yeah, tony romo, the best games. amazon pays 13, right? all those thursday night games

are, like, wow, tampa bay coming out, let's put in jacksonville, they're just as good, they're from florida last night, they had the two teams you most want to see it looks like amazon on thursday night. they get the pick of the litter. >> apparently. guys, i did -- >> apparently? >> since you've been asking, bakish was very positive on the advertising. >> do you have a clip? >> on the advertising world right now. i do i have a clip. again, taking into account that there is a perception that things are very weak take a listen. >> the market's actually pretty good i mean, the digital programmatic side is weak but the linear side is pretty good but it's more people are talking negative about the ad market, valuations, metrics have come in, and people are talking about an extended slowdown, which, again, i don't think -- i don't know, you know? it's a prediction. but what i'm seeing, i'm feeling better about '23 than the general narrative. >> feeling better about '23 than

the general narrative. >> that guy's not a hype artist. he looks good, by the way. >> say again >> he looks good >> he does we talked a lot of biking. he's doing a lot of biking on the bike a lot. >> carl, i think people are -- the one thing, we're so used to hearing bad things about tv, and then we hear, you get a 20% lift in the most important program there is, the nfl? are we really going to think they must be doing poorly? wow. that's big numbers tony romo is worth more money. >> guys, i did want to do ncr if you don't mind >> national crash? >> it's losing almost a quarter of its market value. this is a name that i have mentioned a number of times over these last months, in part because they had been talking about doing a leverage buyout or getting bought out by private equity and veritas had come to the floor as perhaps the most interested party last reports that i did on this, i think were pretty

significantly questioning the ability to get financing in a market like this but we've gotten confirmation. there's not going to be a purchase of the company by private equity instead, they're pursuing a split of the company into basically its component parts of what you know, right, the atms that are ncr, and then the digital processing business or really what is, in many ways, digital payments, which is a larger business than people thought, lot of recurring revenue there, that would be the growth engine. but what you're seeing here is a disappointment, perhaps more than had been anticipated, that there is no sale and why is that? well, as i reported many times, the financing markets are difficult when you're talking about a noninvestment grade credit where you would be raising as much as 7 to $8 billion to take it private. we have seen participation of what we call direct lenders, the proliferation of direct lenders that have a large deal that

vista did not long ago, 21 separate direct lenders, but simply was too large a number, it seems, to be able to actually get somebody to underwrite at that number at that level in this market. will they try to come back to it at some point if the market can distance change significantly? perhaps. but a lot of disappointed investors, perhaps we anticipated, jim, that were looking for a deal, even though we thought we'd indicated this was not going to be easy to get done >> actually, you indicated perfectly. you said, this wasn't really doable you know what we call these now in this bad market these are splits that happened, but you don't get any more stock. >> yeah. now, ncr, storied name, at one point, remember bunch? right? burrows univac, ncr, controlled data, honey well this is a company that's been footballed, many different iterations but there's some value here and i was surprised

there wasn't some price. >> parfor noninvest grade, it's tough. at that level. at the level they were talking about a potential deal that said, they're doing this, carl, to try to create value it's kind of funny to hear that from the bankers yeah, we want to create value, we're going to split the company. it's okay. we're going to lose a quarter of the value day one but we're going to make it back over time. >> the digital business and then the atms jim, i do think maybe it's worth pointing out housing here. they're leading what there is to lead today, even as two-year gets awfully close to taking out its 2007 high. >> all right, i'm going to -- because i like to talk about what i do. i can do and i can't do i can't own stocks the i bought a ton of two-year in the last two days i took the money that i get that i can't touch now that you're allowed to touch after a certain age. i said, enough is enough this is a stock. if this were a stock, you'd be

shorting the hell out of that thing. it's a straightout po-out parab move it's sitting and absolutely getting 0.25 i can't touch it anyway. i just think this piece of paper is overrated >> the 12 month is basically 4, right? >> yeah. >> 3.99, somewhere in that neighborhood >> i thought this was a great piece of paper to put away, because i think it's incredibly overvalued >> look at that move >> i know you just said it parabolic move >> if it were a stock, david, you would turn to me and say, isn't this 1999 all over again this piece of paper is insane. i actually committed -- when i say i committed a lot, i have a lot of cash for when i retire. and i just said, no. i'll just put it in this i'm not going to retire during this period. so, i'll just buy this >> yeah, but i mean, still, you got -- you're dealing with a pretty high inflation rate still. >> how about the 0.25 i was getting? >> it's a lot better than that >> thank you

>> what's jpmorgan still paying me on my savings account there >> don't bother to look, because there's nothing. nothing. >> zero. zip. >> how about the things, you get a stock like kimberly clark. some people feel that's competitive. the home builders, carl, i find that universally despised, except for the buyers who keep buying the stocks. >> that's right. yeah, well, mortgage rates, 6-plus now >> i'm going to see home depot today. >> really? i yeah ted deckly, the ceo. we're going to a warehouse you want to come with me >> warehouse that's exactly how i was planning on spending my friday afternoon. thank you. i was hoping for that invitation >> you missed the apple invitation >> i was going to say, it is friday, and we did get tim cook outside the fifth avenue store today. we got to look at the phones pretty interesting the watch as well, the ultra >> holy cow. i thought the watch -- i have the older edition of the watch i think this g-force thing is really important that it detects when you've really been hurt and it also has sat lellite

so if you're hiking or climbing somewhere and you get hurt, it goes off this is a real lifesaver there's always been life-saving things but if you're an outdoor person, you're going to say, wait, this is better than garmin, which is saying something. >> almost a pro-sumer watching away >> the camera. >> we had a discussion yesterday about how the argument for buying an slr camera is withering because of the quality on some of these cameras, even in low light >> here's the stock going down typically, remember, monday, ran five points going into the -- going into the intro i hesitate to say this might be an opportunity because the market's so bad, but i think people do not realize how different the 14 is, pro, particularly, from the 1 13. and i bought the 13 because i lost my -- mine last week and all i can say is sometimes you just get had

>> yes >> i wish i had waited what are you going to do how can you live without a phone? give you a tin can you can't live without this. try living without this for a day. you know what it's like? >> it's -- >> everybody hates you, first of all, because they've all texted you and everybody hates you and they think you died. >> it's like it's 1994 again >> there you go. >> jim, one of the upside stories of the week have been evs, ride, lucid, all up double digits, at least as of yesterday on the heels of the president's commitment to put more chargers on highways. now glencore reports their looking to start trading lithium. >> rivian has been an amazing stock. when i was at amazon, did a lot of work with climate control they'll buy everyone rivian. >> amazon has a big order to buy. >> they want more than 100,000

they want everything now, of course, you can't get it i mean, they'd buy all -- they'd buy every single ev and still would not be able to meet the demand because that's how much business they have and i think it's rather amazing that people don't realize how little -- how few charging stations there really are in the country. they're great on the coasts, but the vast middle of the country, you need charging stations >> well, we need them everywhere if we're going to actually be able to significantly increase the use of evs, right? >> absolutely. >> yes >> throughout the country. >> look, this is a great unfolding story that's now sold down because people don't want to buy stocks of companies that are losing money but look, i still think it's the most important story out there is the self-driving ev i'm going to self-drive -- well, you can't self-drive me. >> you can't self-drive. you're going to get self-driven. >> a ge car next week. i'm going to be several driven

>> adam jonas did it earlier in the week where he took a self-driving ride. >> he beat me to it? >> in san francisco. >> i'm going to see the red hot chili peppers and do that. >> take that, adam >> he can have his brother do whatever they want >> it has taken a bit longer to get here i mean, we were -- it's three, four, five years ago we were talking about the prospect of these cars being all over the roads and they're not. >> my wife drove the hummer ev, and said that wherever she went, people said, you go, girl. >> to lisa >> yeah. >> you go, girl. >> that's positive >> that's what -- i don't know why i thought that's funny >> you go, girl. okay very nice. >> she's just so bad >> finally, jim, just on some macro desk commentary today, b of a, hard knit, cautious for a long time, reiterates this line where you nibble at 3,600, bite

at 3,300, and gorge at 3,000 you got a problem with that? >> no, i don't have a problem with that. i actually kind of like that i think that's a -- no $3,000, the charts are going to look bad, but i think that's very good. that will be what my travel customers like to do that's one of the things we talked about in yesterday's meeting. as they go down, you got to get big. what do you do with the oils oil's still going, hanging in there. we have a huge position in oil for the trust. the stocks yield, as long as oil is above 80, the yields are incredible obviously, have big problem, natural gas in europe. that's the one conundrum i'm trying to figure out will those go down and let the rest of the market go up, or can they all coexist david, can they coexist? >> yes they can coexist >> you know what i'm talking about? do you even know who i'm talking about? >> i went with yes >> that's interesting. oil still on pace for a weekly drop, and gas buddy today says

$2.99 average is possible in mid-october. >> powell states $3.25 >> weren't we going to hit $1.50 by the fall? >> they're still pumping >> yeah. >> but look, i mean, we're getting prices >> they may actually cap russian oil. that effort seemed quizzical, to say the least, but it's making progress >> if you can buy a stock, i would tell you to buy telurian >> really? >> all right >> put it away i can't buy stocks i can buy the two-year that's a piece of paper. holy cow, that's a great piece of paper the yields just got yielded. >> when we return, david's interview with paramount's bob bakish, what he has to say about the future of paramount plus and profitability in streaming as a reminder, you can get in on the cnbc investing club with jim. sign up and find out more at cnbc.com or use the qr code on the screen as we go to break, watch bonds as we said earlier, the two-year gets awfully close to taking out that 2007 high, just below 4%.

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weighing on the tame, dow down 350 but have defensive names in the green today utilities, a new relative high, philip, j&j and 11 central bank decisions and we'll get to trading with jim in a minute

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jim? >> defensive stocks going well i got home depot and going to -- and what we're going to do is warehouse, if you want to join me we'll talk substantive even though we're at a warehouse and used to be king but what i really want to find out, carl, so many people are saying that housing is done and housing is 10% of the economy, and i'm hoping to get a feel because i think there is too much negativity right now, but i want to be very careful because fedex

was devastated >> certainly we're not operating on an island economically. asia and europe -- >> are the reason why much of this is happening. >> we'll see you tonight great weekend. "mad money," 6 owe p.m the interview with bob bakish in a moment businesses have to find new ways to compete in order to thrive in an ever-changing market. the right relationship with a bank who understands your industry, as well as the local markets where you do business, can help lay a solid foundation for the future. pnc provides the resources of one of the nation's largest banks

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good friday morning, welcome to another hour of "squawk on the street." i'm carl quintanilla morgan brennan will be back with us starting on monday. as for this friday, 2% declines on the nasdaq, the fedex warning taking its toll on equities even as we are seeing yields at the front end continue to rise getting some relief in the middle of the curve. we'll talk about it in a moment. economic data, rick santelli has that rick. >> yes, and some very interesting numbers for september. preliminary read on university of michigan sentiment which means in a couple of weeks we get a final read these will get tossed and

expecting a number on headline around 60. 59.5 so even though it's less than expectations, it's still better than our final read at 58.2 and the best read since april. if it becomes the final read, and in between then and now had 50 read in june, the historic low so a nice bounce 58.9 on current condition, 58.9 on expectations, that exceeds what we're looking for and follows 58.0 the reason i jumped in on expectations, it's the only one of the trio that didn't make historic lows. it only made 42-year lows in july at 47.3 now, the inflation numbers, one-year inflation 4.6 equals expectations follows 4.8, high water mark in march, 41-year high that was 5.4 so definitely coming down a bit and 2.8 on the five to ten-year outlook, less than expectations, less than our last look at 2.9 by 110 and 0.3

lower than 3.1 high water mark which we've had several times most recent in june. that was an 11-year high carl, remember, 34 bases points as it sits at 390. 14 bases higher at 345 unchanged on the week. back to you. >> incredible. thanks, rick rick santelli. we're 30 minutes into the session. we'll get to fedex in a moment three other big movers that we're watching uber's one shares under pressure after announcing it's investigating a cybersecurity incident following reports the company had been hacked ge is also sliding the cfo says supply chain issues are still affecting the company's ability to deliver products in a timely manner. astrazeneca gets eu approval for its covid-19 antibody cocktail giving the stock a slight boost today, jim david. >> that's me still here let's take a look at fedex as well that stock down over 20%

the company yesterday warned on earnings but also warned about the global economy it did cite declining package delivery volumes around the world. the ceo joined "mad money" last night. take a listen. >> u.s. consumer has definitely spent less but the u.s. has been somewhat insulated because the u.s. dollar is, you know, is the currency of choice for the world and there's some insulation there but i do see the u.s. slowing down too >> carl, of course, we had this conversation at the top of the 9, the three of us how much of this is reflective of deterioration in the whack crow environment and how much of it is specific to fedex and what had been execution issues at this company that certainly predate any concerns about the global economy obviously i followed it closely during a period where d.e. shaw was an activist in the stock, three new board members have

come on board, so to speak but the question has always been, you know, is this company operating as efficiently as it might so that seems to be a key question this morning as investors grapple with the idea of, well, does this really mean we're going into a global recession when fedex sees these kind -- its $500 million drop in revenue not as large but the taking away of guidance entirely is concerning people. >> 22%, just to put that in perspective is the worst gap down for the stock since at least 1980 and as for our discussion about whether it's a true proxy for corporate confidence, goldman today says that obviously investors were hungry for updates at conferences, david, affairly positive sound bites across the board, some major cracks now starting to appear and they reference huntsman and ge as obviously as well as fedex. >> yes, ge related more to supply chain of course, remember, it's a company that gave us guidance towards the back of june, june

23rd where it was above many analysts who follow the company now to withdraw that 2k3w50id and expectations perhaps going to be as much as 40% lower >> not to mention the div hike earlier in the year which frank holland talked about he has more on fedex >> i think you're hitting on what analysts and investors are looking at fedex's q2 guidance is raising a lot of eyebrows. the guidance right now is half of what the estimates are with the street's looking for for f2. 40% lower than a year ago so to your point, david, it speaks to execution. why are we seeing such a big drop in profit so one thing, even though fedex is bullish about its guidance i was there at investor day and spoke to raj and one thing that everybody noted volumes were down and last quarter volume was down for express down by 11%, freight business down by 4% so there was always that weakness in volume. so that's something that has been persistent but before fedex just had a lot more pricing

power then a lot of questions about how is fedex going to meet fiscal targets for fiscal year 2025 14% and 19% compound growth, revenue growth margin expansion a lot of questions about that right now. looking at the numbers and including increasing the dividend you mentioned that dividend increase when you increase by 50%, 53% to be exact that speaks to a lot of confidence that's eroded in the last few weeks >> frank, appreciate that. good context and it's something obviously we'll talk about maybe for awhile it's our frank collin. cnbc is up with a rapid update steve has that good morning, steve. >> yeah, carl, we had retail sales yesterday. they beat expectations, but you had downward revisions in prior months and all that prompted another downgrade to the outlook for third quarter. gdp, the numbers, forecasters shaving 30 basis points from the third quarter outlook bringing the rapid update number from 1.6

to 1.3%. and some funky trade and inventory numbers. forecasters have begun the quarter and thought after two quarters of negative growth we'd get a decent or healthy bounce-back with gdp above 2%. in the last month there's pretty good disagreement. barclay's 0.3, atlanta fed 0.5 and goldman 1.1% amherst pierpoint -- massive swing factors -- 3.6%. stuff comes in, it goes in the shelves, inflation changes the value of the inventory but steven stanley from amherst, one of the optimistic says he thinks goods purchases they've been muted but it will be a swing back for the consumer to spending on services still, if the consensus is right, it promises a third quarter in a row of below trim growth and that theoretically

should help bring down inflation. carl >> steve, thanks for the setup this morning that's our steve liesman markets are set to close lower, murky picture for the economy. joining us to discuss ubs's alali mccartney. happy friday if we'll see. >> what is the talk you hear about how fedex fits in the whole puss juul. >> i think you're asking all the right questions which is how much of this is a mac joe foreseeing of the future where we have data backward looking and finally getting something of the moment looking forward and how much is micro. how much has to do with the actual company right? and last week with the cpi print what we started to see with the rerating of what interest rates may look like is we've started to see a shift in the narrative from, yes, we can see a soft landing to what is the recession going to look like and so we are at the point now

where we have nine central banks reporting next week. we have, you know, all kinds -- you're talking about murky data. data is all over the place and it's not clear, again, which one are really representing micro factors and which one is presenting macro factors so, look, if i represent individual clients and right now i can buy a six-month t bill yielding 3.6 % and, you know, not pay state and local taxes, that, you know, that's my best idea and that's a tough place to be you know, as an investment professional but you got to wait this out murky is the right word. >> it's interesting. ernesto, after years of saying there is no alternative, wouldn't you agree that stocks have real competition now? >> it's quite a tough environment right now for stocks with the combination of interest rates rising and gdp slowing you have to focus on fundamentals at the stock level and trying to put the macro picture or take

the macro picture out of the equation and we like stocks in energy, health care, profitable tech, but you have to be real careful and pay attention to what you're buying and how much you're paying for it because the macro environment is tough now, as rates have gone up it's created an environment where stocks are going to start to shine again despite the -- all the last few years being all led by passive type vehicles so we see an opportunity for stock picking, but the picture of the market as a whole, the beta picture shall we call it is murky whereas the opportunity for stock picking is bigger than it has been in quite a few years and that's what we like about this environment >> yeah, well, alli, to that point it's been a brutal week for those long stocks and certainly any, let's call it

with the nasdaq down 1.7% today. to those who would be tempted to pick off names they think have gotten cheap, what would you say? >> yeah, i think -- you know, i agree wholeheartedly, energy and health care and consumer staples are the places to go the energy picture has been strange to say the least given all of the structural supply issues and the challenges, the fact that energy has not been working and that we've seen gas prices go down, we think is much more of a short-term noise than a long-term trend. so getting in that space, especially when you're talking about healthy mlps and stocks that have taken their debt level down, yielding, some tax advantage well above market rate, that's interesting health care, if you're going to play in the stock market whether you're doing it actively or passively short term or long term, you have to have to have to get into defensive and quality. it may not work for a day. it may not work for a week but, you know, because trends are

really breaking down everywhere but i think you have to have a decent time horizon, not a day or two, not a week or two and have to lean in at this -- >> what do you mean trends are breaking down everywhere. >> r >> look, you see it all the time on the show, technicians talking about we're about to go -- if we hit 3800 we're going here. if we see this we're going here. if quality performs then this should you know, those things are breaking down on a minute-by-minute, day-by-day basis because of algorithms or you don't have economic buyers, whatever you say, a lot of what's been behind us is not what's in front of us. let me give you a data point 2% of the time on 12-month rolling you have seen fixed income and equities down at the same time. we're in that 2%, right, so the world is not functioning as it used to. algorithms are not functioning humans are not functioning and investing the same way so you have to think differently and part of that is a time horizon

issue. >> ernesto, is that what you're telling client, long term -- the debate about the longevity of 60/40 but is it truly gone >> well, right now it is but it won't be forever, in fact, we think that right now as our other guest is saying, you have to be long term because stocks are going to be in for a bit of a mixed 6 to 12 months, but, again, the uncertainty that's being created by the fact that we're in a whole new world basically in terms of rates and valuations and rates rising, we haven't seen that in 40 years so we're going to have to adjust and all the forecasts of the macro is full of uncertainty and we just got to get through that and we have to see the end of the cycle before stocks can resume their path upwards, but there will come a time when that

happens and you have to be patient. you have to wait at least a number of years. you can't buy today and make money over the next couple of months necessarily but if you're patient enough, you will make money and that's what we're telling our clients, just buy and hold and don't look at your statements every month because you'll drive yourself nuts and it's not healthy to do that. >> alli, ernesto, good to see you both appreciate it. as we go to break our road map for the rest of the hour includes a lot more on fedex plunging to the lowest -- worst day in several decades as the ceo expects the economy to enter a worldwide recession and boeing diverting some 737 max orders originally intended for the chinese. we'll tell you why and we'll have that exclusive with paramount global ceo bob bakish and talked about the company streaming service and thestock price. a lot more we got a big show ahead for you. don't go anywhere.

kanye west's yeezy terminating its deal with gap saying the retailer failed to meet obligations in what was an initial agreement. our sara eisen spoke with mr. west and she joins us now with highlights. there's a guy my guys would like to speak to but wouldn't ask about gap. >> gap shares were moving yesterday and they were down sharply. they're down sharply on the week ye, and it's ye now, not kanye

said he terminated his deal with gap to partner on yeezy products and came on to explain what went wrong there. >> just ignored us about building stores costing -- it was very frustrating, it was very disheartening because i just put everything i had, i put, you know, all of my top relationships, there were a lot of like things color ways that i didn't approve there's a lot of places that the product went to, certain sites where they just -- it was like they were dog and pony and the idea around town and sometimes i would talk to the guys, the heads up, the leaders and it would be like i was on mute or something and they totally are -- our agenda, it wasn't aligned. >> no comment from gap yet but i did learn that mark breitbart, the head of gap brand sent an internal memo saying while we share a vision of bringing high-quality, trend-forward,

utility taron design to all people through unique omni experiences with yeezy gap, how we work together is not aligned and we are deciding to wind down the partnership so confirming it there to his own team and ye trashed adidas for copying his style, not opening yeezy stores and indicated he's moving on from that relationship as well i haven't gotten an official comment from adidas but the gap breakup is indicative of some of the broader problems facing this storied brand. sales have not stabilized and had missteps with old navy which was the crown jewel in this gap portfolio. the ceo left in july because of the problems and there's still no new ceo named analysts say the ye deal is a big missed opportunity because he did help turn around adidas back when he joined that company in 2016. here's how ye ended on gap >> don't bring a leader in and have them not lead you know, why would i argue with people who are getting paid by

the gap? i'm sorry, you know, i'm not going to argue with people that are broker about me about money. >> that was an epic line that a lot of people picked up on, in fact, i noticed marc andreessen's twitter changed his profile to that quote. i'm not going to argue with people that are broker than me about money. pretty clear in what is going on with his dealings with corporate america or corporations. >> helpful to remind people including myself but i know a lot of this through you, many people know him as a gifted musician, an artist, but what has he done in fashion you referenced adidas. how significant has his contribution been in this area. >> it's been really measured it's hard to quantify the size of forbes article in 2019 put the annual revenues at 1.5 billion, about 4. % of overall revenues of adidas that's just the numbers but in terms of the halo effect and

making adidas cool again, i think a lot of people would argue he had a really big impact he had a number of sneakers out that he did with his own company yeezy which had a share agreement with adidas, the slides, he brought them into the slide category, brought them into the basketball category and had at one point when they were releasing sneakers, they sold out in minutes online. adidas had to revamp its entire sales process online and through its app because it would crash every time yeezys were released. there's no doubt it had a profound effect and that was the opportunity for gap and why the street was so excited when that gap deal was announced the stock shot up double digits because there was hope they could bring in a new audience and younger consumer to gap. it just never happened >> no, but something that did happen is you got him for an interview which is pretty cool. >> it was very cool. >> all right, maybe next time we'll bring him to set and do the three with you if you do that. >> oh, wow.

>> that's a solo show now. i forgot but i'll still come. >> you could join me as a report on some of -- >> i'll just stand there like other people and just look on. >> bring kanye back for that. >> not kanye, ye i call him mr. west. sara, thank you. great job. let's take you to a break. before we do that check out shares of ncr. it is losing almost a quarter of its market value after the company is no longer trying to sell itself, of course, it had been on the cusp for some time, trying to get a private equity deal done but as a reported earlier and i have in previous weeks, the financing markets particularly for noninvestment grade given the size of the financing, seven to 8 billion, just very difficult to get done, instead they choose to split the company into its atm division and it's digital processing division we're ba aerhickft ts. ising. and the effects are being felt everywhere. that's why at chevron, we're increasing production in the permian basin by 15%.

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yesterday falling 17% after those results and announcing that $20 billion deal for figma. some not liking it barclay's and b of a downgraded adobe and lost a quarter of its value this week alone. something you brought up yesterday, david. >> we talked a bit about that paying quite a multiple to revenues and significant people number over what was the market value, private market value of fig figma. 10 billion since june but was probably a lot less. speaking of companies that lost almost a quarter of their value, fedex shares down 22% this after the company reported results and warned that the economy, well, it's not good could be headed for a global recession tand that's going to have a significant impact with us is john chappelle. he cut his price target on the stock. it had been 318, now 243

you still do have an outperform rating on the stock at this point, jonathan. i guess first question is why? >> well, i think it's important to point out first that we did initiate a tactical underperform trading call on august 23rd with the anticipation there would be likely a miss and lower in the fiscal first quarter results scheduled for next thursday so catalyst was correct the magnitude way off. certainly not going to chase it down with the downgrade after this, you know, $45 sell-off today. i guess the jury could still be out on that but we're keeping the tactical underperform because, frankly, the catalyst is done but there's a lot of uncertainty still. 50% cut to the fiscal second quarter numbers on business conditions that worsened greatly over the last several weeks and now worsening at a more accelerated past for the next three months, peak retail season

and also just there's been some identification of cost initiatives but no clarity on the timing or magnitude of those. we'll be looking for a lot more information with the actual earnings release and start to more appropriately incorporate that into the back half of the fiscal '23 and probably fiscal '24 outlook. >> talking this morning about investor, not just investors in fedex but broadly speaking investors who are trying to determine how much of this is reflective of real deterioration worldwide, china being part of that and how much is an execution issue for a company that's had its share of them for quite some time? where do you come down on that >> i'm not going to put a percentage on it like jim was trying to do this morning. there is a healthy dose of both so let's take the macro component first. europe is no doubt in recession. for the reasons that you've explained associated with russia and energy, et cetera. i want to point out here, they

have a legendary economist talking about a global recession for a long time but not a u.s. recession so we have a deep slowdown in europe that's probably getting worse and issues in asia but the way fedex operates in asia is exporting through their air express system known at representative of demand on the ground in china but more on exports. there are slowdowns associated with covid but damning as it relates to the consumer in the west and ties us back to the u.s. the u.s. is not as bad as those regions but not immune and talking about elevated inventory since before the major box retailers revealed them in the middle of may. we knew there was overbuying, triple buying, double buying whatever it was last peak season because retailers were concerned about missing another selling window after the negative muscle memory from the fourth quarter of 2020 so inventories are inflated inflation is hitting the consumer, the u.s. is certainly at risk here but i don't think it's nearly as dire as it is in europe or nearly as disruptive

as it is in asia. >> what happens if u.p.s. or any of their major competitors don't ratify the view? i mean, that would be a remarkable broad-based guide that others didn't see >> yeah, well, again, i don't think they will so we have to talk about direction and we have to talk about magnitude. we met with u.p.s. last week well, it was my team but we met with u.p.s. last week and they basically reiterated their guidance for 2022. fedex is in quarter one of their fiscal year and u.p.s. only has two quarters left. i've spoken to all the major rails ahead of this potential rail strike this week. the biggest trucking companies in the world, the bigger truck brokers in the world they're all talking about an element of demand caution. but nothing to this magnitude so, you know, back to your point again and trying to put a percentage on it there is a macro concern here but there is a hefty dose of costs, execution, service, et cetera, that does make this far more fedex specific than more damning to the entire transport or global economy

>> that's a great place to end and helpful. jonathan, thank you. >> thank you, david. thank you, carl. >> well, after the break we'll have a lot more, in fact, the bulk of an exclusive with paramount global's bob bakish and that stock price with the company is actually up today surprisingly, but still unfortunately for them near 52-week low. 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.

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i'm contessa brewer your news update, russian forces have left izyum, ukraine, and authorities have found a mass burial site. viewers may find these images troubling. police have found more than 400 graves and reportedly some of those bodies show signs of torture. a veteran new york judge has

been appointed as special master to review documents taken in the trump mar-a-lago probe the judge overseeing the case also refused to allow the justice department to use in its investigation classified documents found in the search. king charles has traveled to wales to greet well-wishers and attend another prayer service following the death of queen elizabeth. in london authorities have temporarily closed the line to view the queen's coffin. wait times had shot up to 14 hours. the line grew more than five miles. now new mourners will be able to queue up, david, after a six-hour pause >> wow 14 hours, contessa, thank you. contessa brewer. we move on now to something we've talked about a number of times in the last hour and a half, of course, my interview the other day with paramount ceo bob bakish, note the stock is actually up. of course, recent news there, well, that deal with walmart,

remember walmart prime essentially going to be offering paramount, paramount plus to its subscribers. and obviously all the questions around direct consumers in general as a business and content costs continue to mount and the questions mount as well about what the ultimate return for this business is going to look like. here's bakish. >> you look at the duc category in particular for paramount plus, we're very happy with where paramount plus is. when we launched it 18 months ago there were a lot of questions about us being too late, et cetera. fast forward to 2022, we led the market in terms of share and net ads in q1, q2 and q3 to date that based on data we didn't win every one but the vast majority of them and this quarter we're in and the fourth quarter, this quarter, our content engine is back at scale. particularly in september. we got the nfl back.

by the way, linear ratings up 20% for game one and we set which is best in four years and we set a new record at paramount plus so that's totally working u avenue father is back. up 70%% versus last season and announced a new deal, executed with walmart which started a week ago which is a real tailwind for subscribers >> right. >> it is already performing better than we at least had been our plan >> can you give us a sense of what you had in your plans >> it's early days to give out numbers but it's really proving to be a significant source of new subscribers and so q3 will finish strong for us and i look at q4 and our content pipeline, obviously the cbs fall schedule continues. that's a real source of engagement for paramount plus. >> and because, sure, you come for whatever you come for but

the concern here direct to consumer and we've seen it obviously is people turn off they turn off after the nfl season and turn off after they watch the big movie. >> they certainly churn and churn metrics have improved in the last 18 months and i think as we go forward and as we particularly get more consistent flow of original content, you look at july and august, for example, it wasn't that great we still won on net subscriber ads but seeing a reacceleration in total subscribers in september and certainly in q4. that's also a function of churn being good so i think churn will continue to get better. >> what does it mean for the linear tv business you still want a bunch of cable networks pretty important that you're relying on to power dtc. >> we do and there's still a good source of audience. there are fantastic source of content. big libraries. you look at b.e.t., we're very strong, particularly on diverse audience segment

b.e.t.'s ratings are up year after year two weeks ago, mtv music awards, an award show whose linear ratings were up year to year, digital consumption was up year to year which you would expect so the network is fine also and the slates are working obviously the sports lineups really working. >> i'll tell you something not working. >> what's that >> stock price >> equity markets are rough. the whole media sector is caught in this negative ad sentiment and concerns about screening profitability. we talked about ad sentiment already. i think it's overplayed. as the ad market comes back our position delivering reach for advertisers because if you want to be in the u.s. ad business you better have a broadcast network, cable property is fine and a fast network, fast, free ad supported streaming television we have the number one service in pluto tv. continues to grow like a reed. that's a reach solution for

advertisers. we provide them access turnkey. >> what do you think gives investors the most pause just the continued spending on direct to consumer next year you said many times will be your peak investment year then we'll talk about profitability. >> right. >> is that what they want to see it before they believe it. >> look, that's the second point is d to c. i think the enemy of the market is untemperature always has been. that's what people say clearly there's uncertainty in the ad market and d to c when are you going to be profitable will it be as good as tradition tv, et cetera. as time plays out i think we'll prove the ad business, once again, is a great business and we are positioned to lead that business based on our portfolio of assets and execution. and the d to c side we'll prove to the world that paramount plus is a cornerstone service in 18 months it's come much further than anyone expected and rolling it around the world and will be in all of western europe by the end of the year and launching italy tomorrow, by the

way. >> okay. >> so we're building real scale there and, yes, we very much have path to profitability and a real business. >> you talk -- you did talk about price going up i mean, you said we'll tuck in behind disney and others you should assume price will go up when do you start raising price and how do you know when the right time is. >> well, the first point is i think people underestimate the impact of pricing on d to c. part of the problem with profitability in the space is pricing is currently low that's true for paramount plus, for disney plus, whatever. what they miss is that price is going to go up over time and, sure, we'll be careful about when we raise price, we will probably let some other raise price first and time it to when our content lineup is particularly strong. we'll probably raise our premium service before we raise the price on our lower price ad tier to catch any downturn but there's no question price will grow over time because these are

extraordinary values for consumers and once a family finds paramount plus and the kids' library i dare you to go cancel that. your kids would freak out. >> average revenue per user, you don't give us. we don't know what that is is that something you'll provide us at some point to see whether you are raising prices actually across the board >> a couple of things, one, we have progressively increased our disclosure over time you know, we started with some just subnumbers. this year we moved to a d to c segment versus tv media versus film entertainment so investors could add visibility to the whole p & l. as we continue forward no question we will release more metrics. right now people calculate it based on certain estimates but that will definitely kick up over time and a function of what's going on on the subscriber pricing side as well as the advertising side because, remember, we were essentially the first to believe in ad supported streaming with

absolute to tv and when we launched paramount plus we will have a lower ad supported tier. >> 4.99. what's the ad load per hour for you. >> it varies still light relative to traditional tv and we've seen nice growth in the current market. >> even with the walmart deal itself which i know we won't know specifics as well in other words, whatever the overall cost is that walmart is paying for their subscribers. >> paying per subscribers. not some promotion deal. if you're a walmart plus subscriber you're given the opportunity to get paramount plus and have to opt in then you become a paramount plus subscriber and count as a paramount subscriber and we'll get paid for that. >> it will help you fray potentially at least better than you anticipated. >> it's going to be an incremental driver of our service and i think equally important, i won't say more

important, another good housekeeping seal of approval. i mean, they could have been in business with anyone and we know factually they were talking to other people and at the end of the day chose paramount plus >> bob bakish, obviously direct to consumer continues to be the focus although we do tend to forget the linear cable businesses producing the bulk at warner brothers, discovery, obviously espn at disney and certainly at paramount with their stable of cable networks, as well, but as bob chapek, ceo of disney readily admits it's a melting ice cube. >> it's interesting, on the one hand yellow jackets basically get shut out at the end. i guess, yet "top gun" is the number one movie in america on memorial day and labor day, something that never happens. >> and he believes that will help sustain them in the fourth quarter when it moves to the paramount plus platform as well bringing in new subscribers, keeping subscribers that will there as well, so, you know,

we'll see. there's always the question about scale here is paramount plus big enough to actually be able to be one of those key players? he obviously believes that given the start they've had the answer is yes. >> great interview >> thanks. >> really good all week long. as we go to break a check on the market, narrowing losses, dow down 220 s&p losses lower than 1% rhtack. it's going to take investing in some things you've heard of and some you'd never expect. it's going to take funding innovation in renewable energy, helping reduce carbon footprints, and big bets on environmentally conscious construction. citi has committed 1 trillion dollars in sustainable financing to help build a better future. because to reach net zero, it's going to take everything. ♪ ♪

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bank stocksle toing the broader market lower inflation data earlier in the week we continue to slide, the world bank, of course, warning that raising rates too high could trigger a devastating global recession next year. joining us to talk about the impact on his company and customers one unite bank ceo kevin, i appreciate the time some of the legacy financials have had relatively calming words about deposits and spending trends. can you talk about what you're

seeing >> the same thing. even though raising rates are a real challenge for financial institutions, most institutions have prepared themselves for this eventuality so while i think the rising rate of costs is challenging, i think we'll weather the storm very well. >> yeah, there's been a sort of a story spun out that there's been relief in gas prices, an acceleration in utility and food costs but in the end those may be some cancellation effects between the two sides. >> well, maybe i mean here again, i believe the key is to be calm right now. to realize that all that we have is challenges but a bright future ahead of us and just not panic, study your position carefully and stick with what you believe in and a time of opportunity, i mean, prices are down and when prices are down, this is the time to buy.

there are names out there that i know that i like a lot, names like snowflake as an example or even the fannie/freddie so this is an opportunity to take advantage of opportunity. >> interesting what about housing and, i mean, one of the big stories out of cpi, we referenced earlier, is the cost of shelter and owners' equivalent rent. do you see any relief on that in the next 12 to 18 months. >> not in the next 12 to 18 months as chairman powell reminded us fighting inflation will cause pain and so we are going to experience pain as we go over the next 12 to 18 months >> finally we want to mention that you're featured in "the shift" powered by salesforce and want to give viewers a brief taste of it. take a listen to this. >> money has this sordid history

in black america >> using the power of your dollars to advocate for the community started to rise, given who we are, we needed to lead it >> how to use technology, not only to meet our customer needs but to actually meet our community's needs. community's needs. >> black america and its allies rushed to the doors of one united bank. >> if you do the right thing, you will build a business for generations and not just for a moment in time >> the phrase here, kevin, is, using innovative technology to help close the racial wealth gap. that sounds good, but how does it work? we lost the answer to that question but our thanks to him. interesting to hear yet another bank seater, david, talk relatively optimistically about the consumer in the face of all the negative news the market is getting hammered with.

>> without a doubt we see many other data points that continue to indicate the consumer spend is strong if you listen to the ceo of fedex, for example we're going to let you check out the biggest laggards on the s&p for the week ceos which have been with us on cnbc in the last 24 or so hours. w with that surprising deal at a very high price, and the orenon fexafemtieded this tiny payment thing-

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the market here and some of the laggards on the ndx. we'll talk about the turbulence in tech, as adobe is down 25% on the week we're back in just a moment. "tech check" starts at the top of the hour.

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fedex, transportation stocks in general. if you look at fedex shares right now, down about 23%. we haven't seen any kind of real upside move right now. we'll see fedex shares down 23%. by the way, at the highs of the year so far, this was a roughly $70 billion market cap company now it's close to 41 billion that's how much it's lost in market cap overall if you go above that to where the ripple effects are, transportation stocks in general taking a hit because of the sentiment move ups down 4.5%. xpo logistics as well. international paper and packaging corp. of america down 10%. laggards here, card board, boxes, if there's a shipping slowdown, those are affected as well so, watch that transportation sector if we go up even further towards the kind of sector moves, maybe a decent move here in terms of megacap tech overall

relatively speaking apple is down 2%. you can see real estate and technology, the real laggards over the course of the last year megacap technology, alphabet, amazon, tesla, all ones to watch here what's interesting about this move is where it puts the s&p 500 in terms of the overall move off the lows that we've seen since june but then off the highs we saw in august, david. right now, real estate, tech, and energy the big moves for the s&p 500 we are 6% off the lows that we saw in june but still 11% off the highs that we saw in august. so, as we kind of watch this play out, david, i also did notice, for those viewers who are paying attention to the ticker on the bottom here, we did see moves higher in some key semiconductor stocks nvidia is in the green right now. we'll watch the semiconductor stocks to see if there's any kind of relative strength. back over to you >> of course nvidia shares down some 56% for the year, again, reflective of just the overall

lowering of valuations from the broader market we thank you, dom. we should tell you this as well. we got some exciting news for our team monday morning, morgan brennan is back. she will return, join us right here at the new york stock exchange but not before making a pit stop in montana on assignment for a big story that you will see next week looking forward to welcoming morgan back. that's going to do it for us on "squawk in the street. "techcheck" starts now >> good friday morning today recession warnings abound as the ceo of fedex says the consumer is slowing. what that means for an already battered tech market later this hour plus a big tech check on amazon, down double digits the in a month. now facing a lawsuit from the state of california. we'll talk to the a.g. about the move there shares are down of news of the widespread hack on uber and some say the profitability picture is