wealth gap widening. >> an interesting take kyle, all that -- with all that said, it's still friday, so that's -- i want to -- that's all i got. but kyle, thanks for coming on today and cheering us all up before the weekend we'll be back next week. >> we will >> we'll see you next week >> we'll see whether the rest of us, where the world is >> "squawk on the street's" next ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber and jim cramer stocks going to give back what was the best week since june as jobs grow, unemployment, 3.5 tech is taking a beating on amd's guide. road map begins with that

september jobs number. we're going to dig into it, talk about what it might mean for the fed. also ahead, chips are under pressure after amd issues a sales warning. it is citing weakness in the pc market plus, we got a trial postponement and a deadline to close the deal at $54.20 i will bring you the latest on the twitter-elon musk saga let's start with futures falling as investors digest the september jobs number. jim, you probably heard on sq squawk, not a whole lot there. year on year wage growth is the lowest since december. >> yeah, but if you're jay powell, you're thinking, okay, when do i have an impact here? and this is not a great report, if you're the fed. yes, they've got them. we know the job openings have come down, but there's nothing in here that makes it so that you -- this is -- that we don't have big down october. >> the unemployment rate went down again, which is good.

it's funny because we -- >> stop being so charitable toward the poor. i mean, that's what you feel like >> right, when you say -- when you say, oh, we'd rather have it higher because it would mean the fed is getting what it wants instead, it's actually lower than it was. >> we there was one paragraph i'm going to read because i think it's never talked about. it's driving me crazy. among those not in the labor force in september, persons were preventing from looking for a job due to the pandemic. in may 2020, 9.7 million persons were prevented but there's still 42 to 50,000 people who are not looking for jobs what's the real number i think it's substantial how about the buyouts? they're substantial. so, i mean, we got to cycle through this thing now, i know that there were a lot of people on the previous show who said, the fed's going to tighten too much. i don't care the fed has to tighten i mean, these numbers are just incredible and remember, i want -- the fed wants to have your home lower, your pension lower, wants to have your savings lower. david, it wants that

and so, it's getting that. >> well, is it >> have you seen your screen >> yes, i'm well aware of the screen >> what are you looking at >> i do look at it i try to look away sometimes as well >> red is bad. >> i'm aware of that >> no, maybe red is good >> although i still don't completely buy into your thesis when it comes to wealth destruction. >> i don't need your buy-in. >> but i'm here to question it, that's all >> they don't want you to spend. i mean, i was on a norwegian cruise line yesterday, the prima. i mean, people just really throwing money at cruising they want to go places they want to do things, because what happened? i mean, you know, people were cooped up for a year and a half. they want to spend >> well, even after the revised spending b.a. data we got earlier in the week, there's still at least a trillion in excess savings, which a lot of banks think will last people until the summer >> there we go the fed raises and the fed

raises, and then, i mean, i was saying that i thought the two-year could go to 5.25. i bought some two-year paper, obviously too premature. you can do an inverse cramer on the two-year >> we're going to get the banks in not that long, so we will get some guidance or commentary from the likes of jamie dimon brian monaghan all of them in terms of that consumer spending number, which i've heard nobody say has really let up dramatically. >> it hasn't there's been a lot of pent-up savings. people want to do things the behavior of people post-pandemic is in keeping with what's happened post-war, but we have no immigration in the country, and we just don't have enough people to serve jobs, and it's very typical when you go to a restaurant and they say, listen, we can't serve you right now, we don't have enough servers. >> we'll talk to secretary walsh about labor force participation, but we had gotten our hopes up last month some argued if we had, you might have been able to tolerate a

number in the twos, but it went down to 62.3 >> this number, i mean, in the times that i have come out of a recession, you're always praying you get this number. like, wow, you know what we're back well, we're back the wrong way. >> well, it's not the wrong way -- i mean, why is it a bad thing when we're adding jobs every month? that's good, isn't it? >> secretary walsh, let me just tell you, the problem with that is because the federal reserve is determined to make it so that those numbers aren't as strong >> all right, so the market will keep going down, but you know what those people are going to have jobs, and a lot of them probably don't invest in the stock market so that's good >> it's not just your stock market portfolio it's your house. they want things to be cooled off. they want it so that instead of all these people right now who are, at this point, they have this -- this is bad for the podcast -- they're here trying to sell, and the buyers are

here what happens, typically, at this moment is the sellers capitulate and they have to capitulate. someone has to capitulate. the sellers capitulate and start hitting the bids so those of you in a best and final situation, forget it you're about to really become the top bidder in this -- you're going to look back at this recession or downturn and you're going to say, i paid at the top. because the sellers are going to capitulate they see this -- they know mortgage rates are going to 8, and they're not going to be able to get rid of their property >> certainly, waller's comments yesterday sort of pointed to the fact that they're going to keep going and really pushing back hard at the notion that there's some kind of liquidity crisis in the market, even with rates up here's what he said. >> inflation is far from the fomc's goal of 2%, and not likely to fall quickly this is not the inflation outcome that i am looking for to support a slower pace of rate

hikes or a lower terminal policy rate in my view we haven't yet made meaningful progress on inflation, and until that progress is both meaningful and persistent, i support continued rate increases, along with ongoing reductions in the fed's balance sheet to help restrain aggregate demand >> he had this interesting analog with pumpkins on october 31st, liquidity for pumpkins is very high, but on november 1, market goes to zero. >> right but what people -- i mean, two months ago, powell wasn't working hard, wasn't tightening fast enough. now, he's tightening and there are things going on that we don't realize underneath that are going to hurt, but they're not that bad i mean, look the economy's red-hot. it is. and inflation's going up, say, 8%, and the working person's making 4%, and powell is uniquely attuned to the working person i wish he would sell more bonds, but why do people not understand

that jay powell is worried about the working person is he only supposed to be worried about the rich people? david, is this some private equity punishment? >> no. all right. so, he is worried about the working person >> that's what he's worried about. >> so they're getting zwjobs, so that's good, and they're not losing jobs. >> he wants people to go to the supermarket and say, i can afford the cream cheese. david, you were never like the status of our family situation where we bought what's called margarine, oleo. >> really? how would you know >> guessing. guessing but you know, look, you would come home and your father had a bad month and it was like, wow -- >> all right, fair point >> used by astronauts. what's that? >> tang. we got 5% wage growth and that's still blow the inflation rate. >> they need to cool it. there's nothing wrong with that. >> okay.

so, we're talking about a terminal rate in the spring of 2023 of around 4.6% based on fed funds. >> all i can tell you is that we're going to get into the banking season, and there's not a lot of bad debt, even though i keep reading that there's a lot of bad debt. that's just not true and we're going to have these banks make a lot of money, and people are going to say, well, they're red-hot. we need bad. so, that's why amd is so good. do some bad. >> amd is going to help us chop some wood if that's what you're talking about. as jim said, down in the premarket, cutting its sales forecast chip maker saying it's being hit by the larger-than-expected slump in pcs i think it was stacey of bernstein, that the hit in client revenue is admittedly a bit breath-taking. >> i don't think it's breath-taking. i like him but i think after micron, you had to assume anyone selling pcs going to be destroyed. nvidia is down, but the smh

would be down. i think the lead times got long. they kept making them and then there are no -- there's not a lot of new pcs bought. this is another post-covid situation. and lisa su said that gaming was strong people are not ignoring that absolutely strong in the datacenter people are ignoring that what they're focused on is the same thing that happened to micron if you look at micron, when we buried sanjay, we buried him at 48 and the stocks went to 54 this is a clearing event it is -- i don't call it breath-taking. i say that for stephen king. "fairy tale," really good. >> you've mentioned it >> okay, when he has another one, i'll mention that one >> i know. >> why did you have to say that? >> what do you mean? >> couldn't you -- well, just that implies that i repeat myself >> well, you do. he's the dickens of our time >> i try to be emphatic.

anyway, the supply chain issues, no what the real weakness is, supply chain issue, is that they had giant orders, so they're trying to meet the demand of the orders, and they're making them and making them, and then they hit a retaining wall as they're nod needed anymore, so the question is, to me, is the charge big enough? nvidia took a bigger charge on what it had in gaming. micron took a bigger charge. i think their charge is too low. we're not buying it back we're going to let it happen >> i guess one question would be, after carmax, and after nike and after levi and now amd, is every print going to come with some kind of softer guidance >> i think that there's something wrong with e.verythin. levi, they're on tonight they've got department stores that are not doing that well everybody has something. there is one part of their business that is different from the way it was before, when it was, like, well, levi's stock has not been great, but at 24,

it was selling terrifically. >> it's up 45, right >> now you buy t.j. maxx -- you buy tjx off that and buy all the levi's you want. i'll see you at tjx. >> i go there sometimes. >> you do shop there it's perfectly good. >> it's right next door. >> are you a member of ollie's army or not? it's not a paramilitary organization i know that's what you think >> i'm glad to hear that >> are you nervous on dell hp, intel, microsoft >> i'm not nervous they stink >> i mean, intel already had it. >> oh, yeah. >> very poor quarter >> they're fine. well, that's it then that's not the three of them >> that wasn't the clearing? >> no, that was not the clearing on it. but they can talk about mobile a lot. there's a chart for you, chief >> you haven't liked it all the way down you still don't. >> it's good to be -- >> it's good to be right sometimes. >> thank you, sunshine >> you're welcome. >> i'm sunshine.

>> you're full of sunshine today. >> you really are. >> has it been a long week >> listen, sparky. >> oh, i got sparky. >> sparky's saved for really just dirt. >> by tend of this show, things is are going to be flying, i have a feeling >> oh, yeah. >> i'm glad that coffee cup is made out of paper. >> it's espresso, which i need >> hide the phones and the computer monitor >> oh, he's coming back and saying it's awful. that's what you do that's what he does. i'm talking to him he's, like, wow, look at that. oh, wow. i look and it's a picture of his dog. >> i'll handle the tease still to come, we've got the latest around musk and twitter today, now with that trial delayed. we'll get to other names, including levi we'll dig into that, some of these heotr reports regarding visa ftx, draft kings, disney, we'll talk about it when "squawk on the street" comes back.

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we've become... ...nocturnal. well... i'm up. c'mon kids. this. sucks. well if you just switch maybe you don't have to be vampires. whoa... okay, yikes. oh sorry, i wasn't thinking. we don't really use the v word. that's kind of insensitive. we prefer day-adjacent. i'll go man-pire. oh, what a week for twitter and elon musk. we see the stock at $49. a week ago, looked like we were going to trial on october 17 in delaware there had been no real movement in terms of anything real on settlement talks, at least that we were aware of and of course, there was, therefore, the uncertainty that would come along with potential litigation a week later, well, he's committed to buying the company for $54.20, but yesterday, mr. musk and his legal team certainly got a very positive ruling from chancellor mccormick

when they filed a motion to essentially delay the trial and let us close and get all our ducks in a row when it comes to our financing and our equity financing as well, although they don't say that as much and we'll close by the 28th. and chancellor mccormick said, done i will let you do that that date was probably at the very end of sort of the reasonability scale in terms of how far you could push things. they didn't need to go that far, it wouldn't seem they haven't even contacted the banks as yet, as far as i was able to determine based on a number of different calls, in terms of saying, get ready to fund and/or their equity partners, remember the $7 billion he raised from the likes of larry ellison? none of them had been contacted either it does appear when mr. musk sent in that letter, and maybe it was him and his lawyer didn't seem to know on monday night when he authored that letter as, of course, at the same time, he was tweeting about ukraine and russia but here we are, and where we

are is that, well, there's a lot of people who believe in the 22 days between now and when he has to close, who knows what elon musk and his legal team will come up? that's the fear. other side would say, there's nothing they can do. they are going to close, and if they don't, chancellor mccormick is going to say, we're having a trial, we're putting it on in november, it's going to be fast and then we're going to force you to close that said, you got to get the latest financial statements or at least ask for them from twitter, and then he's got to sign the solvency opinion or certificate. it's got to sort of be given to the banks as well. there's some questions or concerns about whether musk will try and screw around with that he's got 22 days he's elon musk who knows? >> i've been involved with some complicated litigation, including a six-year case in new jersey, the longest-running case at one point in a state, and i wanted to get memos. now, i'm not going to talk

about -- i'm banned from telling you how things came out, but one thing is for certain there is always something incriminating that could wreck your business going forward. now, does -- don't you think, in a trial, some things would come out from this man that could make it so they would have trouble doing business >> you know, that's a question we all have wondered is it really the fear of -- not even the trial, but the deposition >> the deposition. >> it was scheduled for last week, then this week, then monday now, put off, of course, given the trial has been put off as well potential trial. if they don't close. we don't know. we don't know what it was he potentially feared from a deposition it's not like he hasn't given plenty of them in the past he has but in this case, certainly, it does appear that he wanted to avoid that, jim. >> so, something happened. >> there's any number of hedge fund managers who obviously focus on event-driven deals who are trying to figure out all the different ways that he could

screw with this at this point from not signing an opinion, therefore putting the financing in some sort of risk by the way, again, and i shared this a number of times yesterday. the financing banks are there and ready to stand up to a commitment that is not in doubt based on a number of different conversations that i certainly had. but you know, if you don't sign a solvency opinion, then they won't fund but then the judge could still order him to buy the company anyway it's up to him, the capital structure. so, the 28th is -- >> better if they make a deal. >> we'll know. three months from now -- not three months three weeks from now -- >> are you going to go >> i'm not going to go down there. he's going to close on the 28th. we've drawn a termination letter they've testified in the court they've told chancellor mccormick, we're closing on the 28th see what she does if they don't. >> it's like the worst deal ever if you're musk basically says, i'm buying it no matter what. you can't stop me. >> right meantime, this interview in the ft is pretty remarkable where he

says, twitter is certainly an invitation to increase your pain level, but i'm not doing it for the money. it's not like i'm trying to buy some yacht and i can't afford it i think it's important people have a maximally trusted and inclusive means of exchanging ideas. as for truth soecial, it might a well be called trumpet >> he said it should be as trusted and transparent as possible, that is, the new twitter. which, again, at this point -- by the way, they could have closed next week and the way things typically work, they could have closed as soon as next week. but in three weeks, it's going to be his or it won't be and this thing will go on, and we'll end up at trial in november, and then we'll probably end up in new york in december if the banks -- i mean, you can go down a lot of roads here i'm going to try not to talk about it for the next three weeks. we'll see what happens >> you did a great job yesterday on reporting

some people bought the stock before, betting it was undervalued. >> it was undervalued? only way it was undervalued is based on the fact that he's going to pay $54.20 for it >> well, then it might have been worth something. >> it's worth something. what's the number, jim in a market that doesn't exist -- >> how about $35 or $37? >> that's where twitter trades in the market right now based on the fundamentals >> i think that things are better than you think. >> wow i think most people think $20 and below. >> i think things are better than you think they're changing a lot of stuff. >> he's not going to be ceo, he's got three more weeks. >> when i saw him, he was wearing his patented black t-shirt. >> what? >> he's wearing his patented black t-shirt. thumbs up. he doesn't understand the whole idea of podcasts david just put thumbs up when i said -- i was obviously making a

joke all you had to do was say, well, that's all you have to say about him? >> we'll get cramer's "mad dash" and the opening bell in a n'gonyer dot awhe.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. >> all right, let's do a "mad dash" here as we count down on opening bell for friday, we finally got there. minute and a half to the open. >> it is a pleasure that we're finally there. okay, so, apple will be town off micron, but apple, okay, we've got morgan stanley saying things are a little bit better. the lead times are good. but we had tony doing one of

those soliloquies he does, which is, we are cautious on iphone 14, units we estimate could be up five, worried that units could be weak. well, i mean, he just gives you just enough to be able to find himself on tv, saying that he's cautious and i don't know i mean, am i cautious about it i'm cautious about everything, because this is a horrible tape. but i do think that at the end, that apple's going to have a decent number and the reason, david, is because the phone companies need apple to open accounts and yesterday, there was an upgrade at verizon, and i thought that even though the stock didn't do anything, if you want to open an account, you get a great apple phone. and that's it. >> simple as that. >> simple as that. it's as simple as that well, i mean, remember, most people do not buy apple phones they open accounts >> they start and then they pay over time. >> and you can get a really good -- when you return your

phone, you get a lot of money for it so, that's good too. and they don't throw it away they send it to another country. and i don't know i just think that selling apple today is just really emotional it's an emotional sale, like a lot of others. emotional. >> let's get to the opening bell here final one of the week, and the cnbc realtime exchange at the big board is home builder century communities. i'm not done yet foundation, focused on the needs of adolescent and young adult cancer patients. breadth is going to be negative here at the open, jim. we have not mentioned oil, which got to 90, having its best week since march of $10 >> i think the stocks are, right now, starting to peak. up a great deal. but that's because they're part of the s&p my trust has been selling the oil, trying to get back to 5%.

i know there's some people on "fast money" who are still dramatically higher, but i think in the end, the economy's going to weaken, then oil will weaken. there are areas like natural gas where we have to keep shipping it overseas. >> right >> that's what's going on in russia and we do know that they can't endlessly pump the spr, but these are great processes to lighten up i think the oil goes to 95, and when it gets to 95, i think you want to sell some. >> so you think there's a ceiling on crude because of economic -- >> yeah. otherwise, i like it we're going over which ones to trim, because we have so many of them >> what if russia takes 3 million or 5 million off that's where you get these -- back to jpmorgan saying 180. >> i know, and it's possible but i just think that you don't want to be greedy. if you bought them when they were much lower, you don't want to fool around and look, if china came back online, it would be very

meaningful i'm waiting for something big to happen in china, because we've seen the casinos do well we've seen some of the american companies do well. we're all worried -- we're all wondering what's going to happen after the coronation of president xi and whether he's going to open up the whole country. and that's what i think is driving the baltic freight doing better that's what's driving the cal doing better if they open china, then oil can go higher, go through the hundreds >> a lot of different things will happen if they open china >> what do you think they're going to do? >> a lot more economic activity will take place. >> right they can do it >> a lot more consumer purchases will take place, potentially >> right that should drive gaming, which would drive nvidia >> it could drive gaming, although isn't gaming something you do at home when you're locked in? >> that's the thing. there's two kinds of gaming. there's the take two "call of duty" and then there's the epic, okay and the epic numbers are still in ascendance in a very rapid

way, but the traditional grand theft autos and call of duty, they're pretty good. nvidia has a new graphic card that's going to start. there's a cycle. and i think that selling nvidia's -- again, i'm looking at emotional sales what's an emotional sale a sale that says, am -- 's doing badly, let's sell everything and amd has a problem with pcs so did micron. look, pcs, we order a lot of pcs in this country because we work from home. and we don't need new pcs. and i mean, i have a new pc and i'm not looking to get another new pc how many new pcs do i need >> in the depths of the pandemic, intel was trying to argue that the density of pcs per household had changed forever, but clearly we were

just in the midst of another cycle. >> singer is terrific. >> guys, we're talking about covid again in terms of china. why are you shaking your head? >> i said something funny and you just ignored it entirely >> i laughed >> do i have to laugh every time >> no, but you do need to listen >> i do listen i've heard you say it. you said he's a nice guy >> i said he was a terrific guy. >> he only gets terrific when the stock's down more than 3%? otherwise, he's nice >> skipper, that's exactly right. >> china, covid, you know, as you guys well know, i follow the development of one of the two antivirals that are out there along with poxlovid, very closely. paxlovid is the main therapy used in our country but mulnipiro is probably the main antiviral in the rest of the world. a new study out they did in the uk, 25,000 patients, and i

mentioned this, because, a, merck is up, but b, because it could be interesting in the next sort of life for these antivirals because thankfully, hospitalizations and deaths have become much more rare, in part because the latest strains are a bit milder many people are triple vaccinated but if you can keep or get people better more quickly, that would seem to be a key marketing point. and this latest study of 25,000 in the uk shows exactly that for lagavria shorten the time to symptom resolution by six days >> that's fabulous >> in a uk trial versus usual care 95% of these participants were triple vaxxed. hardly anybody died. that was not really what they were -- the key end point. or at least the secondary end point was, hey, we can keep people out so, expect merck, which is going to sell about $5.5 billion worth of this drug this year $5.5 billion makes it an enormous drug already. expect them to push on this.

the idea that, hey, this thing is like tamiflu, except tamiflu reduces symptoms by one day. this reduces them by six, and it's something your doctor should simply write you a scrip for and you have it in your cabinet in case you get covid. by the way, in china, it could be the same thing. >> i think that they should. they wanted the intellectual property from moderna. i think it's legitimate that think didn't get it. yesterday when i was on this norwegian cruise line, it was incredible no masks people are so thrilled because it's the flu >> right >> it's the flu. >> that will be interesting to watch. there's norwegian cruise lines, which is down a bit. you obviously interviewed the ceo yesterday on the boat. but that will be interesting to see in terms of the next wave, how we use these antivirals. in the u.s., though, paxlovid is by far the favored therapy for doctors. that could change over time. >> i think it's important that you talk about that. >> not a similar study for paxlovid, because in the uk,

molnupiravir is the same >> hospitalization is longer than the covid hospitalization for flu, and it's actually more deadly >> jim, do we want to talk about cvs in the same general area of healthcare >> the michelin stars were awarded last night i don't know if you know that. saga right down the block got two stars. how many stars did cvs get >> not enough. this is the star-rating system, which i guess is consumer feedback, and it's a key part of medicare advantage, these star ratings represent what now analysts at, for example, rbc are saying a significant hurdle to reach in management's long-term eps growth targets we're talking aetna as a part of cvs here we're talking about the cms star ratings for 2023's medicare advantage and part d plans, and it shows aetna's percentage of members and plans rated four stars and above dropped to 21% from 87% >> that's very poor. >> people are not happy.

and that can impact bonus payments >> well, you know, you get a consultant, because it's impossible you get the document from medicare, and it's like war and peace. so, then, you have to hire a consultant, and the consultant looks at these stars now, everything is down today, which is ridiculous. cvs was bad. nvidia's not really -- >> that's not helpful for cvs's aetna business >> no. and look, i picked humana because they had a good plan but you do go -- the ratings, carl, the ratings determine a lot, because it's so impossible to understand. i mean, i spent so much time on this thing i just hired someone >> so, people are going to use the highest rated, and if it's no longer the highest rated, they're less likely to use it. >> exactly it's just like michelin. except for it's your life instead of food. >> got it.

>> let's get back to the jobs number this morning. non-pharm payrolls up. unemployment rate does fall to 3.5. joining us first on cnbc is the secretary of labor, marty walsh. mr. secretary, great to have you back the 3.5 is equal to the july low, but labor force participation, we were hoping for a build after last month didn't get it. >> yeah, you know, we're looking at labor participation over a period of time obviously, i would have liked to see that number higher today it wasn't. some of the bright spots in this report today, the unemployment rate in the hispanic community has gone down to an all-time low of 3.8%. we saw a drop in all racial groups of unemployment we saw manufacturing over the -- since president biden's taken office, over 700,000 jobs. so, we're seeing some good things there, but certainly what i want -- we have to do is encourage more people to get involved in the labor force. >> wages up five, year on year, which is the lowest of the year.

but it's still nowhere near keeping pace with inflation. does the administration believe wages need to go up or down? >> i think what we need to do is bring inflation down, and we're working on bringing those pressures down, whether it's through supply chain or obviously opec's decision this week disappointed the president, disappointed all of us, so we have to be less reliant on foreign energy we have to continue to work on supply chain to bring those costs down, and i think ultimately, it's good to see wages go up. i like to see waiges go up, but we have to bring inflation down. >> mr. secretary, this is jim. the plans to build the semiconductor plants, which are rather remarkable, both micron in ohio. i have to tell you, as a student of this, we don't have enough people to build these things we're not -- there are not enough engineers we don't have enough people who know how to build a building

how do we go about training people so they're ready to make it so they can build all these fabs >> we have to be really intentional about the way we do workforce development and job training apprenticeships and ins i have been here, before this, i was there in boston, i was the head of the building trades, and we needed people our workforce is aging out in a place like the semiconductors, we're creating all this new industry in the united states of america, and so we have to be working right now while they're building facilities and they're building the plant, we have to be training workers up as they go around the country. that's one of the biggest things i've seen. we got to work closer with community colleges and workforce development boards and colleges and we got to look at immigration, quite honestly, in reform to allow people that are coming to this country to get educated in these fields that you just talked about so we keep them in the united states to work there's a lot of different pieces to do so we have the workforce. not just for the intel plant, by the way, but all industry all across america when you guys talk on the show every day and you talk about growth in different sectors and the tech sector and all the

different sectors, we're losing out right now, but we don't have enough workers skilled up for those jobs, so we have a unique opportunity, a big opportunity right now to do something different. >> yeah. mr. secretary, related, you just said you also need to encourage people to get back into the work force, start looking for a job how do you actually go about doing that >> a lot of that is going to be on a local level, working with mayors and town managers and creating real pathways into job training the way i envision job training, and what i have tried to do my entire career is when you go to a job training program or pre-apprentice program, at the end of the program or the training, there's a job. we have to do better -- a better job of partnering with companies in designing these programs, but also making sure the companies are giving us commitment that when somebody goes through a program, they have a job at the end of it. that's going to be key, particularly pre-apprentice. pre-apprentice, i've found to be very successful because you get a pathway into a union or office, and you're getting paid

and you get the apprenticeship, and in the country, we have to look at the way we work with people and getting people into industries, not every industry is open to the idea of apprenticeship, but you look around at european countries, apprenticeship is very successful and it gets people at a very young age to get into these jobs >> finally, it's been a few weeks since we've been talking about the labor deal on rail, but as we monitor ratification, can you give us an update? do you think that provides a new framework for how labor thinks about job security in this country right now? >> well, first, we have four of the 12 unions have ratified the contract we have eight left to go i think that one thing i would suggest to both sides here in the company in the unions is not get away from the table. the reason why we got to an agreement is because the president put in emergency board together they made a recommendation we were able to sit them down. this is not how a contract should go. they really should get the negotiation done at the table. if it's after the fact, then the rail act allows the president to

put together this board. if the president didn't have those powers, we don't have an agreement today. so, i would encourage any negotiation, if you get to a point where there's a strike or a breakdown, it's too late we have to make sure to encourage people to stay at the table earlier and get a contract done >> all right definitely some late nights for you, in particular, mr. secretary. good to see you. thank you so much. >> thank you >> marty walsh joining us on the jobs numbers certainly, jim, that had been something that you had been monitoring as a risk to efficiency >> look, we got to get productivity up better too there are a lot of things. there's a lot of things that are wrong. and i'm an optimistic guy, but think secretary walsh uniquely understands that the golden goose is here, and you don't want it slain. and i thought he was -- his -- he was circumspect about how hot things are, because i think he gets it. this was a bad report.

look, it was a bad report. the markets should go down the fed is winning in terms of getting the stock market down. and i know david is skeptical of that view. but we need to assets worth less so people spend less and go back to work. >> although, the two-year had been floating around, i think, prior to the print this morning, around 4.308 >> exactly >> it's at that level right now and we didn't really add too much on the two-year >> no, but we were all hoping -- look hope shouldn't be part of the equation i think there were many people who were saying, look, if we got something that said 4% unemployment, that's something to hang our hats on. we got nothing to hang our hats on so, if i were jay powell, i would say, i'm not done. even if this is rear view mirror, i'm not done i've got to keep it up which means that that two-year is a bad buy right now >> right >> just wait >> and all right so, last week, we had a very poor week for stocks we came into the quarter, guns

blazing, first two days of this week were up dramatically. no particularly good news. >> no. >> but we're still going to be up if we ended right now >> but it doesn't matter i mean, actually, just -- i was going back and forth with jeff marks during the show and we are going to try to buy. we've been selling the oils endlessly and we got a lot of cash >> we didn't get to cannabis >> i was going to ask. >> the president's pardon yesterday. >> i didn't know if that was the right thing to do. >> of course, as you know by now, pardoning thousands who have been convicted, on a federal level, and trying to review the rescheduling, perhaps, getting it off the schedule 1 tilray bounced and misses this morning on their numbers >> look, i think that this -- it's really important that they get rid of this idea it's a class 1 felony i wa when i go through all the different research, it is not clear to me what the path is each person thinks justice can do it, congress can do it.

but when i had constellation -- >> you're talking federal legalization >> we have to get rid of the class 1 felony status. the only legal supply of marijuana in this country is at the university of mississippi. >> still yeah >> still >> still the case. >> and you know, we can't have it and i was going to ask him, because it could be a great business, but it's a cash business rights now, and it's all surreptitious unless you're in oregon or california. and i just think that it's a tremendous moneymaker. it's very difficult crop to grow, because it's dangerous because when people find out that you're growing it in any size, well, there's poachers but i do think that this is something that we can't figure out at all now, wirwin's going to say, it's easy, we just have to say it's legal. the problem is, we can't just say it's legal >> we need something to actually happen >> he did characterize the white house's moves as incremental >> that's right.

and big canopy was saying that he says, i'm done predicting >> yes >> i like that i'm done predicting. >> guys, i point out before we get to the bond report, amd now done almost 7.5% cvs down about 7.5%. twitter is off about 2.3%. some of the moves of the stocks that we focused on earlier in the show worsening, obviously. these are on fundamentals. twitter is on perception of whether or not that deal is going to get done three weeks from today >> well, look, twitter -- i mean, by the way, i'm -- look, i'm not rethinking what twitter's worth. twitter was doing some things that were really good. >> but your point was that business may be a bit better than anticipated if this were -- >> that is my point. they were doing many things that were good. >> not that it's anywhere near worth $54.20 >> that's a tremendous overpay look, in the last few days, everyone says that pinterest is better what the heck?

pinterest was not better three weeks ago. but it turns out they were doing a lot of good things i don't know i'm frustrated >> i can tell. that's all right you're allowed to have a few of those. >> yeah. and i -- the class 1 thing they should -- >> i mean, fentanyl and marijuana are both in the same class. it doesn't make sense to some people >> no, it doesn't, and the opioid -- oh, god. i don't know >> opioids >> as we go to break, let's check bonds here we mentioned the two-year floating just above 4.3 today. williams, bostic, as if that's anything new as for the dow, down 420 it's going to unwind the last three days, take you back to m monday's close

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trading. >> how do we take the inverse of this there's a note by citi saying meta platform, facebook, is trying to ramp reels, the ad load, and it's going to be good. the idea is if you somehow monetize whatsapp and deems reels is good that buys times for omni verse, the metaverse. the problem with the metaverse, it's not close yet. >> page one of the journal is all about tiktok's losses. >> losses because of some convertible securities they're on run rate of $7 billion for revenue. that's tiktok. that can generate enormous amounts of cash when they want to they spent $15 billion on capex at tiktok. >> i think reels is better for commercial. >> it may be it's real competition. to snap and -- >> it's good >> we found our facebook killer, right? >> yes >> we were looking for it for

years. >> and epic, by the way, i think is arguably game killer. >> how about tonight >> i have levi's and i have hertz. steve scherr is turning that company around remember steve, goldman sachs. >> cfo. >> yeah. when you talked to him, he was pretty demonstrative. >> straightforward gentleman >> my wife would say, who is that you're talking to >> we'll keep our eyes out more mannheim. >> that's something positive that and the fact that the mets are going to get swept, according to david. >> and you're going to 5-0, i'm sure >> you had to share that mets fans, we're always negative so we're ready you got to be negative to stay positive >> that's really good. dow is down 465. don't go anywhere.

welcome back to "squawk on the street." rick san stelly live at cm hq for a crazy busy week. we're expecting our final august read on wholesale inventories

expected to be up 1.3% indeeds, it remains mid-month final at 1.3%. and that continues to be the best just in a couple of months, but remember, inventories are, at one point were very important. now it's almost the scourge of retail on to trade, the sales side, august number expected to be up 0.50%. missed the mark, only up 0.1% and last month revised to 1.5%, which was the lowest level going back to april of 2020. the big news today, markets are in the red in equities 3.5% unemployment rate, matching the best post-covid low and markets seem to have a problem with that because it keeps the fed closer than they'd like. carl . >> rick, thank you rick santelli. good friday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with david

faber and morgan brennan dow is down 500 points on the heels of that jobs number. trying to hold the gains for the week we started out at 3609 on monday morning. oil is above 90. >> 30 minutes into the trading session. here are three big movers we are watching this friday morning starting with cvs, shares sliding after a downgrade of one of its aetna medicare advantage plan, issued by medicare and medicaid services. those shares are down 7.5% credit suisse, rallying. the bank says it will buy back up to $3 billion in debt as it looks to reassure investors about its financial stability. and will sell its landmark hotel in zurich's financial district shares up almost 2%. draftkings up after report it's close to landing a major deal with espn's disney unit draftkings saying, we speak to a variety of companies on a regular basis and don't comment on the specifics of those conversations. you can see draftkings is up

2.5% disney down 3% david? >> bob chapek made reference to that in our last interview not specifically draftkings but the idea of some sort of a sports tie-in for betting. let's get back to this morning's jobs number. the u.s. economy added 263,000 jobs in september. the unemployment rate actually edged down it is now 3.5% let's get more on the number from cnbc's senior economics reporter steve liesman good morning. >> maybe the best way to describe this number is there wasn't much upon which to hang a fed pivot trade. that is little in the data that gave markets any hope that it would prompt the fed to ease back on its plans to hike rates sharply over the next several months here's the data. dave gave you the top line, 263. 275 was the estimate in and around there. not much to worry the markets. revisions were up 11,000 average hourly earnings were strong, 0.3% the unemployment rate that i think spooked the market most,

3.5% versus an estimate of 3.7%. and the labor force participation at 62.3%, ticking down workers not coming back to the labor force. let's take a look at where the jobs were or are leisure and hospitality, 83,000. health care, 60,000. those are two places where they're still running below pandemic levels. professional business services, 46,000 manufacturing clocking in at 22,000 local government education, teachers coming back in september, could be son seasonal adjustment, down 22,000. the market may be taking this harder than warranted. a bunch of the job growth, as i was talking about,coming in industries still running below their pre-pandemic employment level. for example, leisure and hospitality is down 1.1 million workers compared to the pre-pandemic level and the headline payroll number is down for the second straight month, lowest job gains since april 2021 the effect was to boost expectation for fed headache

rates. fed fund rate is up, and peak at 465, also up even if there are hints of a slowing, a chorus of fed speakers yesterday made clear, they're not looking for subtle evidence of inflation declining. they want clear and convincing evidence over many months. today's job number does not rise to that occasion, guys >> yeah. and as you point out, the 3.5, perhaps, giving the market the most pause steve, are you know, again, what does the fed want when it comes to that? to that, to wage inflation we talk about it with jim all the time what do they want? >> didn't jim say he wants people to be able to afford cream cheese didn't jim say that this morning? i thought that was the jim gem of the morning i'm going to keep a chronicle of this he wants people to afford cream cheese for sure and maybe he wants you on the ground crying no more or screaming uncle the fed wants to see several months of inflation going down

that pce number, inflation number last week, was not good david, i continue to believe the fed is wrong on the labor market i think we need to put people back to work to create supply. and just a very quick note here, david. i've been quoting morgan brennan all morning yesterday and this morning about her great quote about the financial stability trade that's been out there where morgan said don't mistake market stability for financial instability. that was one of the smartest things i've heard. i want to make sure you get credit for that. >> thank you, steve. i want to go back to wage increases. the fact it's another 5% increase year on year. we've been seeing these five handles for five months but in the last six months it's stabilized still incredibly stabilized. walk me through that and if that's a key component remaining stickier than the fed would like. >> thanks to jason if you rememberer for pointing this out, he says if you take the

current number, in other words, this month's 0.3% and annualize it it's 3.8% year over year, not the 12 months comparison so, that is a little bit better. what the fed does not want to see is wages going up to meet the current inflation, or even higher than that and then that driving future inflation because companies have to raise prices in order to pay wages. at the same time, no rd to be able to afford the cream cheese, so to speak, wages have to go up along with inflation at least. otherwise people's standard of living declines. that's what's been happening with real wages falling. >> a key point steve liesman, thank you. >> pleasure. now to the street's sharp pullback in response to today's jobs number. let's bring in jpmorgan asset manager and darrell cronk. david, we'll start with you. we were parsing through the key stats from this morning's report the fact we have the dow down 500 points and the s&p down more

than 2%, what's priced into the market here? we've had a lot of debates about whether this tighter, more aggressive fed rate of hikes through the end of the year was actually priced in and looking at today, maybe not. >> well, i think it is priced in if you look at the futures market, it hasn't really moved since the september meeting. what the markets are pricing in is what the federal reserve is saying 50 basis points, 75 and probably 25 in january. that's priced in that's the same. it moves marginally. i think the market is misreading this i agree completely with steve in this yes, inflation is coming down. maybe coming down more slowly than the fed wants, but i would point out that 5% year over year growth in wages, that's the lowest we've seen since last december what's more, the cpi inflationary, we think, in september will be about 8% so, we've got 5% growth in wages, 8% growth in consumer prices so are wages adding to inflation

or subtracting from inflation? i would argue with wages running below the inflation rates, they're pulling the inflation rate down slowly i just -- i think everybody needs to be a little patient here this is not a traditional labor market given the weakness we see in gdp in the first half of the year, you think we would get negative payroll jobs, but we don't because of the pent-up demand. 10 million job openings, you would expect to see stronger wage growth and we're not seeing that either. this is a new world in the labor market and the federal reserve should be a little more patient interpreting this as somehow inflationary i don't really think it is >> sara, i want to get your thoughts on this specifically to the question i just asked david what do you think is priced into the market here? >> i think david's right i think aggressive tightening, 75 in november, 50 in december, 25 in february is probably the most likely path i think the most important number of the morning was the 5% average hourly earnings number

it's too hot to bring down and i think the surprise leading into next week, and you hit on it following up on steve's comments about your intelligent comment here, is that if you simply take the consensus, which is 0.4 increase in core inflation next week when we get the cpi number, that takes core cpi from last month at 6.3% up to 6.5%, with the baseline math effect i don't think the market is going to like the fact that core inflation ticks higher by 0.1 or 0.2 next month -- excuse me, for last month next week when we get that data and probably leads to another leg lower in asset prices. >> david, where does an investor put their money to work right now? is cash king or if we have the fed's most likely trajectory priced into the market here, are there opportunities to be had? >> not at all. first of all, there's lots of opportunities and for a long-term investor i would

definitely say cash is not king right now. prices are much, much better than they were obviously at the start of the year. there's a lot of available opportunity, both in u.s. equities i still think in valuation perspective, value equities in the u.s. are better than growth equities but they both look pretty good the dollar at a 40-year high in real terms makes international equities look extraordinarily cheap. i have been saying that. you can say that for a long time but i would not want to be short international equities in this environment because if the fed pivots at some stage or some settlement in ukraine, those international equities are going to take off and the dollar will come down. i really want a piece of that. i think a lot of opportunities to put money to work in this market today >> david, really quick, just to follow on that the other day said we're increasingly worried about central banks making a policy error and that did come on the heels of the nord stream

pipeline issue how much is thinking, there's some put that doesn't work or overreaction, or either here or around the world >> well, i think they are making a policy error i think they're being too aggressive in dealing with what is supply side instead of demand side inflation for a long-term investor, you can actually take advantage of that and say the markets are pricing in this mistake. eventually if the fed makes that mistake, they'll have to turn around and cut rates because there will be no fiscal aid to aid the u.s. economy and eventually, therefore, you will end up with lower rates, whether the federal reserve likes it or not. that sets a foundation for better equity returns and fixed income returns you can still believe the fed is making a mistake and about to make a mistake, and other central banks, too, because when you get past that mistake and correction for that mistake, i think there are a lot of opportunities. >> what are you optimistic about in terms of long-term assets >> bear markets are a function of price and time.

david's point is a good one. we may be close on price i would note the macro environment is worse today than we were at these levels in june. interest rates are higher, earnings estimates are lower, economic conditions have deteriorated so, you know, we've got to find a bottom in somewhere where, you know, the risk/reward trade looks good again history teaches us, morgan, that when you have a core inflation rate over 3%, that's not a good environment for risk assets and historically has not been a good environment of fixed income assets we have to get that core rate down almost to half of what it is in a run rate today before you can really start seeing attractive risk/return tradeoff. >> gentlemen, thank you for kicking off the hour with us darrell and david. i want to turn to amd this morning. shares are down after warnings of that third quarter revenue shortfall. mostly on weaker pc demand and some supply chain issues amd saying nongap gross margins are expected to come in around

50 while it previously saw a number closer to 54. the warning weighing on the rest of the sector today. amd on semi, nvidia, intel, four of the top ten worst performing stocks in the s&p this morning morgan stanley prior to the amd report said pc channel is seeing no relief and amd came in and sort of ratified that. we'll see what it means for dell and best buy and h and intel and the other names that are highly exposed to that space. >> that's right. leading indicator. i think back to the conversation around micron last week, right, and this whole idea of inventory buildup. samsung as well. quarterly operating profit dropping 32% it does seem like the one bright spot, at least in the last 24 hours for seminews has been tmc. we'll see. maybe, david, part of that bigger macro discussion we've had about the shift to services from goods, as we've seen some of those inventory channels begin to fill back up. >> yeah. data centers and gaming is still

strong why it should be a surprise necessarily or, again, back to the idea that somehow the pandemic was creating a new normal and that everybody needed as many pcs as you could possibly imagine, seems a bit less clear now as to why that was a belief but it's reversing itself. obviously, having an impact. >> reversion to the mean. as we head to break, here's our road map for the rest of the hour, including hot stocks looking to regain their highs. we have more on the white house pardoning those convicted of marijuana possession and what it means for stocks plus, we will give you the latest on elon musk and twitter and that timeline for when that deal will potentially close. a lot more on the jobs number this morning with goldman's chief economist when "squawk on the street" comes back in two.

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welcome back the president by pardoning thousands of people convicted of marijuana possession, while ordering a review of federal plot laws that's giving the sector early gains yesterday reversing a bit today. the adviser shares pure negative the moves on the individual names till impressive. tilray up, and canopy up 17 since monday kira leaf executive boris jordan joins us to talk about it this

morning. great to see you again how important was yesterday? >> i think it was very, very important. you know, the biden administration ran on the campaign on criminal reform and on cannabis rescheduling we've waited for this for two years. they finally acted here in advance of the midterms. it was a very, i think, strategic move for the democrats because they now have something to talk about in the midterms with expungement and they have a two-year wait period to talk about the legalization going into next -- the next presidential election cycle. so, i think that from an industry perspective, i think this was very positive news. we now have light at the end of the tunnel on descheduling of cannabis from schedule ito hopefully schedule iii and hopefully for a lot of the families of people that have been disproportionately hurt by the war on drugs, get their family members to come home. all in all, very, very positive for the country. >> does it mean -- what would you rather have, that kind of

decriminalization effort or banking or can you have both or do you have to have some tough choices? >> oh, i think this really helps the banking bill for the lame duck session, as you know. there's a lot of work, more activity than we've ever had before both in the senate and the house. we expect the senate portion of the banking bill to potentially drop over the next two weeks here and we do expect a vote during the lame duck session. we think this actually helps safe banking get through because a lot of the social justice issues that have given some republicans problems have been resolved by this executive order. so, now it makes the negotiation position a little more palatable for democrats and republicans on safe banking. >> we talked about this so many times before, but american cannabis companies, such as yours, versus canadian, the fact that the federal regulations here in this country have

actually in some ways, at least from a financial perspective, financial markets perspective, benefitted the canadian producers and cannabis companies. your expectation that the playing field now begins to level out? and if so, are you going to see more competition from the canadians as we do see this legalization process begin to get under way? >> competition is always a good thing. i think the u.s. companies are far stronger than the canadian companies who have, you know, a ten-year catch-up to where we are in terms of building our brands and our infrastructure in the country. but i think competition is always a good thing for the consumer and a good thing for best business practices. but i do think this makes it a lot easier actually for the u.s. companies now than it does for the canadians. it will bring down our cost of capital here in december as we vote on safe and gives us light at the end of the tunnel for schedule 288-e

i think this is a positive move. >> just to bring it home to the metropolitan area. jersey is getting very close, or maybe there already in terms of a lot of these disspenryes starting to get built out, new york city. what are your expectations there in terms of a year from now and whether that will impact demand at all >> i had a very positive meeting with the head of the new york fed last week. she it said she expects the new york program to finish the rule writing for adult use in march they expect to go into licensing period i suspect adult use cannabis will be launched -- the full program will be launched probably in the second, third quarters of next year in new york they'll also launch the -- what they call the card program here a little earlier at the end of december, which i think will be the first legal cannabis sales for adult use in new york. that's a smaller program that's the one where they're awarding licenses to communities

hurt by the war on drugs but the overall adult use program will be launched next year and should be fully operational by midyear, in my opinion. >> one thing the president said yesterday was, he leaned on governors to follow suit from the federal effort do you think there will be some states, though, that are going to resist for the duration >> i think for the most part, listen, over 80% of this country has access to either medical or adult use cannabis it's overwhelmingly popular issue with the population, which is why i think this decision was made by the biden administration president biden has been reluctant on the issue he was one of the centerpieces on the war on drugs. but he made this move here because of the popularity and the fact that 80% of the population is already using these products and we need some federal regulation around it i think all in all, i think this is a very positive move. i think more states in november will approve both medical and adult use cannabis i think we have five states on

the docket for november. it's more and more cannabis use that's going to be around the country. and so i think as i said earlier, i think be this whole decision by the biden administration was politically astute and very good for the industry >> we'll see it's taken a lot longer that many some people thought good to see you. >> it has. thank you. we're going to have more on this story this afternoon on "closing bell. that will be when the ceo of tilray joins cnbc. his name is irwin simon. 3:00 p.m. hour and after the break, we'll have the latest on the ongoing twitter/musk saga and what that judge ruled yesterday. very important quk t see bk after thist"ac ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations,

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that's what he told the court yesterday when, surprisingly, chancellor mccormick said yes to a motion from the musk side. i will allow you until the 28th to close they have now said they will close. they will be funded. they will get all of the things they need to get in order to make that happen latest financial statements, signing off on solvency, getting the banks ready to fund, and, by the way, getting his own equity ready to go as well. he's raising $7 billion from a group of investors and then he has to raise about $25 billion of his own he's done a lot of that through sales of tesla that have taken place through the course of this year but there may be some more he needs to do in order to get there. we'll be watching all of these things closely, perhaps, when the banks are notified in some fashion or when investors that are coming in with him are notified to fund there are no shortage of people

who question whether this is simply another technique that musk's legal team is using to try to buy themselves more time to cause more chaos. certainly can't dismiss that as a possibility. but, you know, there is the opinion that this would make any litigation around the solvency opinion much more difficult for musk to win because it increases the likelihood of what we call an adverse inference from the chancellor and so we will leave it at that. again, a win yesterday in court, no doubt perhaps a bit of a surprise that this is kind of at the very end of what some would say is a reasonable timeline because you certainly could have argued this deal could close as soon as next week, based on typical deals in terms of the two days banks are given to get -- to be told they could exercise the 15-day marketing opinion period, although it's very much unclear whether they'll market anything

given the state of the debt markets. there it is, significant spread, given the continued certain that mr. musk and his legal team will come up with something that would then lead to the chancellor saying, all right, you didn't do what i said, so we're going to trial, and then the likelihood she would find specific performance, and questions about financing. we could go on and on with this. but i'm going to stop because i think i've said enough about this. >> it's funny. some viewers say, i think david's had enough of this story. >> for now >> for now >> you know, we -- it could be three weeks and he could own the company and he could talk a lot about what twitter will look like with elon musk as its owner. after the break, a lot more on this market today and this morning's jobs number. we'll talk to goldman's chief economist jan hatzius so had 200. dow is down. don't go anywhere.

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welcome back i'm bertha coombs and here's your cnbc news update at this hour russia has now using explosive patent drones to attack civilian targets. the ukrainian held zaporizhzhia, ukrainian officials say 11 people are dead there after a strike damaged two infrastructure facilities as emergency workers rescued almost two dozen people president joe biden saying the risk of nuclear armageddon is at the highest level since the 1962 cuban missile crisis. this comes as russian officials speak of the possibility of using tactical nuclear weapons after suffering significant setbacks in their eight-month invasion of ukraine. biden added that vladimir putin was not joking when he talked about using chemical weapons and human rights activists from ukraine, belarus and russia are being awarded this year's nobel peace prize.

the russian rights group, memorial, center for civil liberties in ukraine and belarusian human rights activist ales bialiatski share the prize. he has been imprisoned on a tax charge that is believed to be politically motivated. we're about an hour into today's trading session. the s&p is down 2%but hanging onto gains for the week. the nasdaq under even more pressure in trading this morning. let's bring in bob pisani for more on how stocks are moving after this morning's jobs number hi, bob. >> and you can see how the markets vacillating this week between risk on and risk off what is that there's three or four components of the market you want to watch for risk on and risk off days. metal stocks, cathie wood's ark fund, transportation stocks, semiconductor stocks, and

they're all underperforming the s&p 500, as you can see here that's a risk-off day, simply put. semiconductors, amd is at a new low. remember, this disappointing guidance really about pcs at this incident positive we saw strong growth in data center that may be a little more optimistic the market is not paying a lot of attention to the nuances of that warning today most of the new lows today are in reits i've been pointing out all week across the board, whether looking at big apartment reited like equity residential or some of the office suites or even big data center, equinix was a gigantic data center reit, cut in half in the last few months nothing being spared where are we right now it's a problem because inflation has taken longer to come down than everybody anticipated, and the bulls certainly anticipated. there's no shift in the hawkish fed tone here. we're in stock purgatory right

now. we have valuation issues we don't know the multiple is 15, 16, 13, we have earnings uncertainty, 200, 240, it's all over the place it's purgatory if that depresses you, look at the rest of the world, though. the u.s. is still doing better than the rest of the world we're down 21% this year on the s&p. europe is down 30% south korea is down 35%. taiwan is down 33% japan is down 25%. so, the u.s. is outperforming. i want to remind people how big the united states market has gotten it's a bigger percentage of the world market capitalization than it's ever been in history. it's now north of 60%. that's right the world market capitalization, the united states is 60% of the world market capitalization stock market japan is a distant second. look how far away everyone else is compared to us. china, that's not a full market capitalization for china it doesn't include pieces of mainland china you get the idea here. uk even only 4%. canada, 3% you know, carl, you go all the

way down the list, france is 2%, switzerland, australia is 2%, germany is 2%. the united states is the world co-lass sass in the stock market this year despite the drop we've seen, our percentage is only getting bigger of the world pie. back to you. >> pretty amazing. for more on the jobs number and how it might impact the global number overall, joining us goldman chief economist jan hatzius. good to see you. some have gotten their hopes up after seeing the survey in the jolts. but things are tight. >> this was a somewhat stronger report than expected i don't -- it wasn't too far away from expectations but it certainly says the economy is still growing the labor market is certainly still growing. you know, that said, the decline in the unemployment rate did come alongside more than

earnings number. we have now two 0.3% numbers in a row. there is a gradual deceleration in average hourly earnings i don't really see any signs of a wage price spiral here and other data released this week, the job openings number earlier in the week suggests that the imbalance between demand and supply in the labor market is diminishing. even with an unemployment rate that's still at 3.5% we are seeing significantly fewer job openings, down almost 2 million. i think that is important for where wages and inflation ultimately go. >> is there a magic number on that ratio per unemployed worker between one and two, where things truly are clear and convincing >> we were at 2, now at 1.7. i think we'll probably need to come down to 1.2, 1.3. that's sort of the numbers we've been looking at in order to get inflation back down into maybe the mid-2s that's kind of the goal.

you know, we've made a substantial amount of progress over the last several months and i do think that there's probably more declines in the pipeline it's not going to be in a straight line because these are kind of noisy numbers. it was a very big drop in august, but i do think the trend is going to be down. that will help us calibrate things. >> there's a nuance that's sort of getting mixed up in some of the mixed data we've been getting. whether it's the jobs report today, some of the other macro data we've gotten this week or in the last couple of weeks, does the u.s. economy look like it's downshifting into a recession or does it look like it is reverting to a pre-pandemic state of affairs, meaning a shift back to services from goods >> yeah, i think the latter. i think we're seeing a deceleration towards more sustainable rates of growth, towards more sustainable rates of -- towards more sustainable

rates of wage growth right now there's nothing that looks recessionary in the data we're seeing at the moment now, doesn't mean we couldn't go into recession it's definitely very possible. there are plenty of shocks out there that could push us there, but i don't see anything in the date that we're currently looking at that would say, recession. certainly not the jobs numbers but even, you know, third quarter gdp looks like it's going to show reasonable gain of, you know, close to 2% in our forecast. >> when we talk about the possibility of shocks amid a fed aggressive tightening schedule, are those shocks domestically or more likely to manifest internationally, especially what we've heard from the world bank and imf? >> i would look at domestic shocks more. the united states is a relatively close economy because it's so large. most of the shocks that push the u.s. into recession tend to originate in the u.s

obviously, the negative growth impulse from financial conditions, from aggressive fed tightening, is the prime thing to look at if something pushes us into recession, i think the most likely outcome is inflation surprises on the high side the fed has to do a lot more and that pushes us into recession. that's possible. although it's not our baseline forecast. >> when you hear fed officials argue the economy can handle rates where they are, and maybe even a little bit higher, and then you look at charts of financial conditions and how tight we are now relative to, say, the last crisis, do those two things square? >> they do square to me at this point. i think we're getting a very substantial negative growth impulse from financial conditions we're estimating about minus 2 percentage points on real gdp growth from where financial conditions have gone but that's coming in an environment where other parts of the growth outlook or other drivers of the growth outlook are looking a little better.

early in 2022 we had a huge decline in real disposable personal income. that decline is probably now behind us. i mean, it was driven by fiscal normalization and the big inflation surge. but now that is looking a little more positive. right now, i would say that 2 percentage point financial conditions drag is consistent with low but still positive growth. >> we also had a discussion earlier this morning about some of the revised views of where excess savings might be, right, and how that might prop up consumption, even in the face of weakening, say, labor activity how long is that going to last us >> i think it should still help as far as the level of consumption is concerned that said, the saving rate is now down to 3.5% that's much lower than where we were a year ago. so, i think the boost to consumption growth that's coming from pent-up savings, that's probably behind us i don't think we'll hit a wall

or anything like that, but i think at the margin, the impact is probably going to be a little smaller going forward. >> finally, do you still think core cpi 2.9 at the end of next year, right? >> yeah. down to the 2s >> all right >> down to the 2s. >> jan, face naturing. great to see you coming up this morning on "techcheck," bernstein initiating airbnb to outperform. we'll talk to the analyst when he joins the show. amd, revenue warning and what it means for a chip sector taking it on the chin again today. "techcheck" begins in over 15 minutes.

welcome back to "squawk on the street." oil prices heading for a second consecutive week of gains following opec's decision to make its largest supply cut in two years. but could crude drill into an even higher price range? wow. morgan stanley predicts that brent crude will slide to $100 a

barrelly q1 of next year the strategist with that call, morgan stanley's chief commodities strategist, martin ratz i'm looking at brent right now, it's $96.90. we're going to hit $100 in the coming days? >> all of a sudden $100 is not that far away. >> that's right. >> over the summer the outlook looked weaker but now we have more to work with on the bullish side of the ledger. >> let's talk about what that means for prices in the near term and also in the long term because at some point, if crude moves high enough, it starts to destroy demand >> yeah. the latter comment is definitely true that is where we were in june of this year. in june, brent crude oil peaked at $130 a barrel but awhat really followed the demand destruction from there were the very, very high product

prices gasoline was $180 a barrel diesel was briefly $190 a barrel refining drove prices up very sharply. since then, crude oil prices have come off where $120, not $130 anymore but also the refining margins have weakened. they're still high in historical text but lower than june we're nowhere near prices that would cause demand destructions. there is room to rally again now we have confluence of, i would say, three set of important factors. one is the opec that you mentioned. it's really opec asserting itself this is an unexpected large cut. on top of that, we have at least the potential for a sizeable disruption in the flow of oil from russia. this remains somewhat uncertain but potentially is there when the eu embargo comes in and we have spr potentially running out. all of that is coming over the

next couple of weeks, month or two. when those things come together, i think that will put upward pressure on prices again. >> you're talking about over the next couple of weeks, a month or two. in the meantime, here in the u.s., we have midterm elections. when you look at what the biden administration is potentially, reportedly considering in terms of a response to opec right now, whether it's tamping down on u.s. fuel exports, whether it's so-called nopec, some of the other potential policies that could make their way both through the executive suite and through congress, what is your expectation and what would the ramifications to the broader market be? >> well, it's not so easy to come up with a set of measures that put more pressure on opec whilst at the same time calming oil prices down. it doesn't contain a lot of things that the governments could arguably do. i think one of the reasons why opec has been so assertive on

this occasion is they arguably have quite a lot of control over the oil markets. their market share has risen again. production levels are very high so, particularly in the core, middle eastern opec countries, so there is room for lower production, spare capacity is low. they're not overflow of low. there are not an awful lot of other countries that can step in and grow production quite sharply. so, i think they probably looked at the broader landscape of, you know, potential sort of ramifications, counter moves, and concluded at this point if they want higher prices, they can probably get it. >> martin, trying to figure out russian production has got to be very difficult i'm curious, especially given how it was perhaps not quite interpreted properly when a lot of their ill ended up in china and india. what are your expectations there, and how confident can you be when you talk about them? >> yeah, that is an opening to

say, like a research analyst, we tend to have strong occasions. it should be an experiment that we've never quite run like this before there have been sanctions on other oil-producing nations but nothing of this scale. and the scale of what now lies ahead makes it hard to argue for. so, the european union still imports something like 3 million barrels a day of crude oil and oil products and in early december, the embargo for the implication of fuel and february the implication of oil products, diesel fuel, other things. there are few exceptions for countries like hungary, czech republic but possibly 3 million barrels a day of russian imports in the eu will need to be phased out russia needs to find other

buyers for it. europe needs to find other sellers. and that is a process that given the scale that it's at, i would argue will be quite disruptive some oil supply will be lost for a period and therefore the pressure on oil prices from this will be up. >> it's going to be a high stakes case study for the history books, it sounds like. thanks for joining us. >> thank you let's get a check on the markets right now. obviously been in the red since the open dow down 1.5%. s&p down almost 2. be right back. (vo) the fully electric audi e-tron family is here. with models that fit any lifestyle. and innovative ways to make your e-tron your own.

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check out shares of goldman sachs, down about half a percent right now, down about 20% this year more or less in line with the s&p. this morning, though, kbw outperformed, price target raised, representing a 41%

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cutting measures zoom also following this morning, jpmorgan downgraded to neutral. they say, we are impressed by the cash generative financial profile that we believe these are offset as zoom pivots to optimize that's going to do it for us >> "techcheck" starts now. good friday morning. welcome to "techcheck. today two big stories. one, amd and samsung both warning on the economy, cutting guidance, painting a gloomy picture on consumer demand what that says about the state of tech growth and which chips are best positions then the jobs report investors see that as more ammo for the fed to keep hiking rates. worse performer in the s&p right now, it is amd, down 9%. meantime w