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 we're watching nvidia,

intel, microsoft, apple all dipping as well. pc sales broadly and we kind of had suspicions that would be the case >> yes, we are in dangerous waters right now, carl and i would remind our viewers that pat -- intel ceo after last earnings came on and talked about inventory buildups and the reason their quarter was so bad, we'll see whether they were early and precious in their projections or if it gets even worse from intel from here but really this isn't just about pcs. the danger here i think is that there's the beginning of a spiral here. oems were ordering less because they're working down their existing inventory, which they built up when supplies were tight. meanwhile, demand is cooling if the holiday season is weak and demand looks weaker, which is why amazon's having another prime day the middle of next week, if the consumer doesn't really show up, then you end up with perhaps some inventory

overhang at the beginning of '23, and you end up with perhaps consumer demand full forward to the holidays where, you know, people don't want to order at the beginning of the year. and then you've got to cut costs and then and then and then >> and then and then and then exactly. who knows what's in store for us over the next few months i would draw a distinction between amd and samsung. i think samsung has broader implications samsung, the biggest chip maker in the world it's not just pcs here, but it's broader consumption, which is exactly what you're talking about, john. what does it mean for autos, refrigerators? chips are in everything now. and when you get a warning from a samsung, maybe the market needs to set up and pay attention. which certainly they are today especially on the back of that jobs report. the nasdaq down 2.5% >> the last sort of spender standing is the luxury consumer. i was just talking to an executive closely connected to that space earlier this week all signals, both domestically,

and over in europe, is that a luxury consumer continues to spend, which is good for names like, say, apple, which has remained pretty strong but how long does that last? does that last through q4. speaking of apple, let's bring in steve kovach to break down what all of this means for the broader hardware ecosystem steve? >> hey there when i saw these reports coming in last night and this morning from amd and samsung, the first ting had had that came to mind on the samsung side, microsoft told us about this earlier in the summer they said pc demand was starting to deteriorate back in june. we got through the full quarter, end of september, and now, you know, we're seeing it from the chip makers. we're hearing it from a dmrks. we're hearing it from samsung. to deirdre's point, samsung touches so many more things than just pcs not only do they put memory and other chips inside of other smartphones and pcs. they have their own consumer

electronics business, a healthy, high-end one to talk about, apple into high-end consumer they sell expensive smartphones as well. they're seeing demand fall let's go back and think about what we're hearing in the apple universe in iphones. today they had the 14 plus launches you could walk in right now and buy an iphone 14 plus. doesn't seem like there are a lot of lines and hoopla around this launch. seems to be a better device for overseas markets, especially in asia but, again, demand seems relatively strong for apple. maybe they're not seeing the extra boost they were hoping for, but they are at least on a unit base census is going to be flat and maybe make up for it on revenue side >> here's what i think is potentially new. mentioned microsoft, i mentioned intel earlier. those two names are main stream, and intel in particular has had its own individual unique struggles. amd has been exceptional in this cycle, the last couple of cycles

in this market it's been a share gainer, similar to apple when amd signals a problem, you wonder, is this more than just a general macro thing or even a thing for individual companies is this something that is getting worse and affecting even the best in the tech ecosystem >> yeah, john, it's such a demand story it's a consumer story. we spent the first two years in the pandemic listening to these companies kind of int nate or make us think that people are going to be upgrading their pcs in droves indefinitely and that clearly didn't happen we had such strong pull forward demand those first two years among pcs, among smartphones, because people needed to work from home. that simply didn't continue. i was also looking at some research our colleague sent out this morning, how shipping costs are falling. that was tim cook saying he was annoyed about because shipping was getting more expensive when those costs start to go

down, you start to think okay, demand is weakening across the board. these two warnings we got from amd and intel, really ripple across everything and really paint a dower demand picture going into the end of the year and next year. >> yeah, it will be interesting to see how many input costs going down are then passed on to pricing on the retail side that's going to be important for margins and for invasion steve, thanks. let's stay with the macro drivers. the job picks. david rosenberg, what a treat to have you, david. great to see you again >> great to be on, carl. thanks for inviting me >> your general framework has long been no turn in equities until there's a turn in yields and i don't know whether or not you think that's on the horizon right now. >> well, it's on the horizon it's probably further out than i would have thought even a few weeks ago, few months ago. you know, interest rates, after all, are cyclical. and you know, we'll just have to

wait for the fed signal. but you're 100% right that there has not been an instant in history where a fundamental of bear market equities tightened the yield curve. we'll have to wait for the fateful day until they not just pause and pivot but ease policy enough to push the yield curve into a more normal slope hopefully that'll be the story the second half of next year but there's no bottom in the major averages until that happens. >> right we like to talk about tech on this show. we just had a long discussion about pcs there. but you can add in apparel and autos and freight and commodities. how much do margins need to compress before we do see relief on cpi >> well, i think that that process is already starting, and of course it first began in the retail sector, and it's going to

broaden out. you know, it's very interesting that the corporate sector, you know, last year managed to lump in six years of pricing into one. and we went into this year remember that the s&p 500 was peaking, really heading into the opening days of 2022, just as margins were hitting really their all-time highs and i think that process has played out and, you know, you see it, for example, in the latest that what started to happen that should give the fed comfort but they're not stating that publicly, is that consumers are starting to push back against these price increases. so, that means that margins will come under pressure. you know, on the other side, look, the good news today in the payroll report was that, you know, .3% increase in wages, second month in a row, i mean, they're still running hot year over year, but the trend has started to moderate. that should give some cushion to margins, as they come under

pressure from weakening demand and of course the commodity prices basically have collapsed. i mean, energy has picked up in the past week because of the opec production. commodity prices have plunged. freight rates have plunged margins will come in i don't think they're going to collapse but the big problem is going to be not so much from the cost side but from the top line, from weakening demand over the next several quarters >> david, in terms of that weakening demand and maybe in this market seeing bad news as good news. could you spin that amd warning in a way that this could be a signal that we're close to the bottom john just talked about it being an industry leader, gaining market share throughout this year the fact that it is seeing weakening demand, could that be a sign for the markets that we are getting there and perhaps more comfort for the fed that what it's doing is having a result >> for sure. i think that is a great sign that, you know, things are

starting to slow down materially and you look at the global chip industry is really a bellwether. there is no more economic sensitive segment of technology than semiconductors. we've seen this before, especially in the retail sector. but housing is the quintessentially leading indicator. that's where the real estate bite is going to show up first and we've seen the impact on housing starts in the single family area, in particular sales volumes coming under tremendous downward pressure. look at the market data that came at multiyear lows and heading down multidecade lows. that's leading indicator for housing demand you're starting to see the -- economic sensitivity within the tech sector. the question ultimately is what is going to be good enough for the fed? but you see they're not really

focused on the real side of the economy. they just talked about all the time, they're talking about the 12-month trailing trend in the cpi. all the economic events that are taking place -- and of course they'll play a role in terms of generating the disinflation for the fed. the fed saying peak inflation isn't enough inflation coming down isn't enough for the fed, what's important is definitive signs that we're getting to the holy grail of 2%. that's going to take some time >> let's broaden out the conversation with the dow now down more than 400 points, the nasdaq down more than 2.5% let's bring in citi u.s. equity strategist, out with a big note, despite cutting the target to 4,000 and cutting the 2023 target even lower. david, i was just mentioning earlier my concern -- not saying this is going to happen. but with this amd warning, there

could be a spiral sparked by a bit of inventory float here. are you concerned about that at all? and how will we know as q4 progresses whether or not that's happened david? >> is that -- oh, that question is aimed at me okay well, i'd say that, you know, the -- well, the -- >> sorry actually david, that wasn't aimed toward you it was aimed toward scott. i was trying to bring him in over to you. >> okay. >> so, scott, go ahead >> okay. so, let's frame this out, right? so, our move to take overweight three weeks ago was predicated on a couple of things. we specifically went overweight software and services as well as hardware we had moved the semiside from an underweight to a market weight the premise on semicall was that our valuation model suggests

that the sector is near a point where it's bottomed historically from evaluation perspective. i completely understand the near-term news flow is obviously as you're discussing this morning, and fundamentally i think there's a better setup for fundamental turn in the first part of next year. what we were taking some comfort in was that the relative valuations are setting up to where we think we can afford the somewhat early on that sector, again moving to the market weight switching to software, though, and this is where i want to kind of broaden out the conversation, yes, we've got the fundamental effects. we understand that but also you have sort of this duration effect within technology, where the interest rate influence has to be recognized and the valuation of correction over the first part of the year, in our view, was triggered by the rising rate circumstance, and it's impact on the discount rates you apply to future growth

so, what we're looking forward here is some sign on the fed fund's probability curve that you get to where the market's more fully pricing in, expecting that hawkishness when you get to that point, you set yourself up ultimately for valuation relief, which is what had been unfolding over the past couple of weeks. >> okay. then, david, your reaction to the same situation i'm wondering about the possibility of an inventory-led spiral, you know, chain reaction with demand weakening. is that something investors should be concerned about or something you would look at throughout q4? >> well, i think that it's natural that, you know, in this environment, look, we went into this year -- you know, when you think about it, you know, the fed has been -- people say they got it wrong on inflation. but they got it wrong on growth. and remember that going into this year, when you look at the fed forecast, they were telling

everybody, we're going to have 4% real economic growth in united states this year. in the latest set of forecasts, the fed is down, like, .2% they've gone from 4 to 0 if you're a business in general -- we saw this first, as i said before, you know, in the retail sector. you're taking a look at the housing sector where inventories have been built up a lot in the new housing market, and technology, we know the story there. this is all basically -- you know, the fed didn't just fumble the ball on inflation. if you are a business person heading into this year thinking the fed's telling us 4% real growth, you're going to build a lot of inventory and that's exactly what happened and now it's, like, you know, charlie brown and lucy with the football and now -- so, it's very broadly based across manufacturing, retail, and wholesale in terms of the inventory situation right now. and i think that you're going to be seeing very significant price discounting across the goods producing and service

industries i actually think that inflation is going to come down. people talk about that it's going to be sticky i think because they're just focused on how the rents are calculated in the cpi. i think in real time, you're going to find a lot of price discounting in the next 12 months that's where the margin pressure is going to come from. it's going to be from the top line >> back to your attack thesis. you said you're overweight on software services. we had mike telling us he thinks even 12 to 15 software client companies is too many. you're going to see a lot more consolidation in this space. how does that shake out? how are you picking here because it feels like going forward there's going to be many of them that never reach those peak evaluations how do you value the sector as a wholeand pick out which ones are going to last? >> i mean, that's a great question i think what we have to recognize is that we're going to be testing lots of different types of business models as we go forward from here and our exexpectations for recessions in the first part of next year.

i think that bifurcation has been unfolding for some of the earlier commentary around some of the market drivers around single stock action but what i would say here is that, you know, the other side of this is you also have to remember that many areas of tech fit also into our view towards quality, which is a theme we've been on for the better part of this year. and essentially what you get there are stronger balance sheets, often times with high cash levels, lower debt ratios, and ongoing strong profitability. among that cadre of companies that are more seasoned, that do have, you know, solid cash builds and cash flow generation, it does set up for, as i mentioned, sort of a bifurcation of performance between structural vendors and those that might not have as compelling an outlook. i think we have to be prepared and open minded that there's a lot of room in these company business models for both, right? companies that can benefit relatively speaking during a

recession time frame but then also the setup is that you can use the cash flow generation or cash for other strategic purposes as well so, i think there's a couple sides you want to consider this from but, again, i keep coming back to, you know, the primary toggle for us is the market perception around interest rates. at some point that, i think, begins to set the tone for, again, the multiple compression that we've been facing all year long and the potential stabilization on that. >> all right scott kroner, david rosenberg, thank you. meanwhile, never a dull day in the twitter/elon musk saga. the court giving elon musk three months to close the deal after the team asked to have until october 28th to get it done. if the team cannot get the money together by then, the trial will proceed in december. twitter called the delay a, quote, invitation to further mischief and delay after the ruling, reiterated it was willing to close the deal

for the original price of $54.20 per share. musk spoke to the financial times. he said he was never buying twitter for the money. he said he thinks it's, quote, important people have a maximally trusted and inclusive means of exchanging ideas and that it should be as trusted and transparent as possible. carl, you know, interesting to hear him talk to a journalist on this versus just the quick tweets that he sends seemingly without too much thought doesn't really give us any more clues as to what it's going to look like, but maybe not a sure thing, john, that the former president is back on >> yeah. carl, wonder if the investors and creditors here are happy to hear he's not buying it for the money. >> he says, not like i need another yacht. still to come, amd down big on the revenue shortfall web bush still thinks the

company is worth holding on to "techcheck" just getting started. zero-commission trades for online u.s. stocks and etfs. and a commitment to get you the best price on every trade, which saved investors over $1.5 billion last year. that's decision tech. only from fidelity.

markets at or near session lows fedex shares, they are plunging. a few moments ago on the headline that company expects lower than volume forecasted >> shares of fedex down about 3% ups trading 3% lower in sympathy this is off a reuters report saying fedex ground -- that's the mostly residential e-commerce focus of fedex -- is expected to see lower packages due to fewer people shipping packages volumes will be softer for fedex overall due to slower volumes coming out of china, also slower industrial demand. this is obviously an update fedex says they're expecting to make public october 21st reuters seeing an internal memo saying they expect volumes to be softer fedex shares down 3% ups lower as well. we're going to have to give

fedex a call to get more information about this it was expected to be in general a lighter holiday season just a few weeks ago, expected to be about 92 million parcels during the holiday peak. that would be pretty much flat year-over-year not the tremendous growth we've seen in recent years, especially during covid fedex shares down more than 3% ups trading lower in sympathy on this report. we'll be following up on this throughout the day back over to you >> frank, put a finer point on this, because fedex is really a key player in the bloodstream of global logistics and we've been talking this morning in tech about amd's warning on demand. and really inventories already being high so, they're not going to have to ship out as much because their customers are working through what they've already got is this memo from fedex yet another signal at the beginning of a crucial q4 that there's still adjustments to be made based on where consumer demand

is right now >> well, you know, bsolutely this is the second warning that we're getting from fedex so, clearly this doesn't only hit consumer goods that's what we think of fedex for. they also do a lot of business shipping i think it really speaks to what you're saying. there's a lot of difficulties in china. a lot of us are assuming china is going to reopen with the announcement of the beijing marathon not a lot of clarity about the movement of goods. we heard of companies like cisco saying they're redesigning products because of difficulty sourcing products from chinese suppliers. this is obviously a bigger problem. we're going to have to follow-up with fedex to get more clarity on this issue when it comes to the u.s. globally we've heard the company flag there's not only supply chain issues, but softening demand not only in europe but also in asia >> we wondered where the other warnings were when they came out with the big one certainly the space has filled in, as more companies have talked about down side guidance. we've been talking about amd

and the chips. now news from commerce related to semis let's get to kayla tausche hey, kayla >> hi. the commerce department has unveiled long-expected rules that are sweeping expectations on the export of certain chips in ports to china, all in -- advance military security. the rules restrict access to chips used in advanced computing and developing supercomputers. it adds license requirements for chips headed to chinese facilities, including a presumption of denial for licenses for chinese fabs producing certain logic and memory chips and it puts 31 chinese companies on its so-called unverified list, meaning the u.s. does not know where those companies' products end up. morgan stanley analysts see the news as negative for semicaps like kla and positive for

micron morgan stanley highlights why -- one recognizable name now listed as unverified. the new rules formalized guidance previously given to companies like nvidia, instructing them to stop providing certain chips to china for national security purposes these rules will take effect in phases this month. there is a 60-day comment period, but the effectiveness begins today back to you. >> kayla tausche, thank you. let's bring in red bush analyst, matt brycen we were just talking about amd's warning. we're talking about fedex's memo and the concerns on overall demand, not just in consumer based on that. what do you read through as the impacts in q4 not just for amd, maybe even not just for chips but for tech writ large? >> yeah, so i certainly there's a broader slowdown it's been the case in consumer

when you look at amd, our view is it was a better position property the share gains would offset some of the weakness i think what amd's warning tells you is that even some of the best-positioned companies are still going to struggle given how difficult the background environment, and particularly consumer spending, has gotten. >> okay. and what's the read-through then, say, for intel, which was warning of inventory issues at its last report? amd has been share gainer during this period. was this something that intel saw earlier because it's bigger, or is it something that's going to get worse for intel and others because it's this bad for amd? >> so, i think with regard to intel, they were a little bit ahead of amd in warning about a difficult period but even so, look at their assumptions around what the pc market was going to fall to.

they were still ambitious. so, i think intel probably better positioned itself for q3 by taking numbers down but they talk to a rebound in q4 i just don't know that there's any rebounding before. >> matt, the chip makers kind of well telegraphed and warning for a slowdown in demand and revenue. who else is still out there? we've heard from amd and we've made that distinction between intel and amd, versus category leader, that is. who else is out there, you think, that maybe the expectations are too high from them we're going to hear that in the next few weeks in a warning or simply the results are going to be a big disappointment. >> so, names that i covered, the memory space is falling apart. you saw that from micron we haven't seen anything from western union yet. i think that's expected.

samsung last night came out and gave a disappointing q3 preliminary number i think -- could very well have similar struggles. sticking with that theme, c gate same thing they talked to business rebounding in q4 i'm not sure that there's any q4 rebound. if anything, i think q4 and q1 are the troughs for semis and tech stocks. >> hey, matt, in terms of verticals, it seems like pcs now have fallen victim to what gaming already suffered from what does it mean for the quickest vertical recovery either in autos or about strengthened data center or something else >> so, data center, with enterprise, i'm concerned that you have budget set for 2022 back at the beginning of the year so, there is still budget to spend. and then when we see the resend in 2023, that that's when some

of the enterprise names struggle a bit. the tougher read for me is on the hyperscale names so, when you're looking at the big cloud computing companies out there, like naws, like microsoft azure, i think they're still working to catch up demand over the last two, three quarters in terms of building out infrastructure and they're still struggling to get enough ics i'm not quite sure how that plays out next year. so, if there's any space that still seems somewhat insulated, it's those names and companies supplying those large cloud companies. at the same time, given what's happened the rest of their space, that's probably where there's more risk to that sector as well. >> indeed. and if they tap the brakes, there are a lot of names out there that could get whiplash

from that. matt bryson from red bush, thank you. >> thank you dow still in a pretty tight range after resetting here down 460. let's get a news update. >> good morning, carl. here's what's happening at this hour credit suites is offering to buy back up to $3 billion in debt securities as it navigates increase in bets against its debt the swiss lender is also selling its famous sa voi hotel, prompting speculation they're scrambling for liquidity shares are up this morning but still down over 50% this year. polestar is reaffirming its forecast that it will deliver 50,000 electric vehicles in 2022 the company saying its china factory is caught up after several weeks of code-related shutdowns. earlier this year, the swedish ev maker says it plans to launch its newest model next week

visa partnering with global crypto exchange to offer debit cards in 40 countries with a focus on latin america, asia, and europe cards are already available in the u.s. and allow customers to directly link their ftx account to spend digital currencies without moving those off an exchange back over to you, deirdre. >> where you can spend it, that is bertha, thank you very much. meanwhile, meta is investing, as you probably know, billions into the metaverse. but even its employees aren't using the products find out why "techcheck" is back in a moment. to adapt in the changing world, you could hire a professor of theoretical mathematics. we all know this equation, right? he'd crunched numbers day and night. that's it. to maximize profitability. morning. i have quarterly numbers that are beautiful. and forecast revenue from every corner of your organization. is that important? or you could use workday. the finance hr and planning system

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welcome back to "techcheck." couplehours into trading on this friday and tech is once again the underperformer, down almost 3%. as you can see, the dow's lost 29.5 we've got oil knocking on the door of 92

not a ton of positive numbers after that jobs report, john >> yes, carl and let's turn now to meta, the company's social network and metaverse app horizon world working through quality and performance issues it's got bugs and lags, common to a new launch. but that's according to the executive in charge of it. the verge, our friends over there, got hold of a memo, where the company's metaverse vp told his team that they were barely using the app last month in a follow-up, he added he expects employees to, quote, fall in love with the app and start using it at least once a week he says, quote, simply put, for the experience to become delightful and intentative, it must be usable and well crafted. i love the metaverse, but if you've got to force the people building it to use it, maybe it's just not that good. >> if the aim here is to over

promise and underdeliver, pretty good set up. up next a new buy on airbnb. fedex shares are moving lower on the headline that it expects lower volume forecast this holiday season it comes after it issued a big warning a few weeks ago. amazon moving lower in sympathy, gso logistics as well. "techcckisacinhe" bk 2

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not a lot working on the nasdaq 100 hard to get anywhere with the way chips are acting today in fact, they are biggest laggards amd on the guidance, followed by marvell, nvidia. the only four components that are green are bioscience, biotech. >> airbnb also down 3% is it time to reinflate the air bed? that is what our next guest says, initiating the stock outperforming, given the recent valuation is no longer hurdle to getting into bed with what he says could be the largest travel company by 2027. richard, thanks for being with us today i know the valuation has come down but it still trades at a much higher premium to multiple rather to hotels and otas. how do you justify an even greater premium? >> i think policy the hit. vacation rentals for us is the

fastest developing part of travel and it's the market share leader continues to gain share in that position, continue to gain share of launching and then it's the platform value. airbnb is already the most profitable travel company on headline numbers that's because it doesn't need to spend much on marketing and that gives it opportunity to sell more than it does we think they will continue to push longer stays, hotels, et cetera >> it feels like that platform value or the brand is already baked into the valuation because it does command a higher premium. i wonder, before the pandemic, airbnb was looking to create and build and operate its own hotels they were starting to go into that space they aband donned it during the pandemic i asked where those ambitions went, are they going to go back? he says no should airbnb be doing more?

is it missing an opportunity in the long term? >> look, it should do more they correctly paused stuff in 2020 when the pandemic hit and they had to focus on their core business and i think they will do more, and they'll sell more to their customers go forward >> you said the word pause, but i think that's what i'm taking issue with they didn't pause it they seemed to have abandoned it are you seeing anything that tells you they've paused that ambitions? >> some stuff was paused, some stuff was abandoned. some stuff paused was things like experiences, selling hotels, some of the property management that stuff will come back. anything that was asset heavy, which is not popular in the markets, i don't think they'll bring anything like that back. china has ambitions. that steps away. there are other ambitions that can be largely incremental that they can begin to do and has been talking about reigniting the opportunities and experiences going forward now they're emerging from the pandemic >> one of the lines that stood

out in your report was that the monster tam is real and that they're only scratching the surface of adjacent markets. i wonder if you can get more specific on that >> i would say, by all means, the short-term vacation rentals, about $150 billion it's probably a little bit bigger but hotels is over $700 billion. longer term stays between 1 and 12 months is probably about $200 billion experiences is somewhere between $140 billion and $240 billion. there are much bigger addressable markets out there, and i think there's little reason given their platform value, given loyal customers, that airbnb can't become a meaningful player. >> some of the other players that have their eye on that opportunity. richard, thank you very much for being with us. richard clark, bernstein >> thank you meantime, chinese ev names are looking west when t it comes to expansion

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you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire blackrock silver is advancing one of the mahighest-grade undevelopedon. silver projects in the world, in the "silver state" of nevada. with a maiden resource estimate just announced, the focus now is on further expansion. blackrock silver. let's get a check on shares of lyft, which are get pummelled in the current session downgrading sector performed this morning, cutting the target from $30 to $16. it's trading at $12 and change pick up times and prices, from uber driving competition the brokerage says it's bracing for challenges to the platform's

market share moving forward. take a look at the stock shares are down, as i mentioned, nearly 10% on that call. remember this is a company that went public at 72 bucks a share. market cap now nearing $4 billion got to wonder if it's a target at this point. "techcheck" is back after this

major indices took a leg lower over the past ten minutes

or so. as we head towards noon the nasdaq down about 3%, the dow more than 500, ticked up a bit from there but back down near session lows we'll see where it goes from here carl >> yeah, thursdays and fridays and been no good the last few weeks, john. meantime domestx ev names like tesla are betting big on china for growth china ev players are looking west and the first stop is europe chinese ev player -- is down 7 good morning, eunice >> good morning, carl. well at the top of the hour it's going to be unveiling a big branding event in berlin the company top executives are there and they're going to be revealing pricing as well as new leasing terms for some of their models such as the et7 sedan which competes with tesla. the company is doing this for their expansion into germany, the netherlands, sweden, and denmark building on the

footprint in norway. now, founder william lee told me he's well aware of the current challenges in europe for this chinese pstart >> our class structure for manufacturing and supply chain are relatively stable compare today the rest of the world. in europe we see much higher inflation but this is a challenge affecting the whole industry and its enterprises as for nio because the sales volume is relatively small in europe the impact on us is limited and manageable >> china continues to dominate the ev market with a jump start from the chinese government. in 2015 beijing revealed its made in china 2025 strategy to help the country dominate hi-tech fields directing tens of billions of dollars. it has subsidized this industry. the ev adoption was slow going at first with a lot of waste,

but then in 2020 we saw the ev adoption picking up with tesla and its shanghai production. in fact, a lot 06 analysts call this the tesla effect where the mind-set of consumers here changed and evs became cool. in fact, ev sales are now estimated to reach 6 million here this year nu, the chinese government continues to try to stoke that excitement over evs, extending its subsidy program, which a lot of people thought was going to go away this year, demanding one standard for charging and mandating chargers at residential buildings and other infrastructure so just last month evs accounted for 1 out of every 3passenger vehicles sold in china, a sound footing you would say for chinese upstarts that are looking to expand overseas guys >> right eunice, production increasing we were talking the other day about byd and its ramp up as well. what about chinese demand? what do they want to drive

there's always been like a status car in china. used to be mercedes, you'd see all the government officials driving those. any indication what that might be in the ev world >> well, it really runs the gamut because you do see like you said byd becoming more and more popular tesla is iconic one, we see the numbers reflecting that with the tesla figures, but then there's some really small names of car companies most people haven't heard of that they basically look like a lawnmower with an ev powered battery, but they're super popular. so people are just changing their mind-set about evs, not thinking it's really necessary to have a combustion engine, even though, of course, there are people who like the combustion engine feel >> all right, eunice, thank you. meanwhile, if you want to relive

the glory days of the rally earlier this week, well, follow and subscribe to the tech check podcast where you can listen to the way it was anytime, anywhere, wherever you download podcasts tech check is back in a moment r. i'm larry villalobos, owner of cachapas y mas, bringing venezuelan flavors to new york. people love our yoyos and cachapas. we've become a foodie destination. larry doesn't just create mouthwatering dishes; he creates opportunities. small businesses like larry's open doors for neighborhoods to thrive. support your community. support small business.

as we inch toward noon, the major averages still doing mostly better than we were at the start of the week, but we're near session lows. the nasdaq down 3%, the dow down 4.75-ish, and the with us performers amd we mentioned at top roblox down as well 10%. >> in terms of big tech you see microsoft and amazon as well, some of the biggest laggards on the nasdaq 100 of course amazon lower on that fedex warning. they did higher 150,000 workers for the holiday season that is the same number as last year, bumped up its starting average pace we're seeing different pictures here i'm sure investors are trying to work through how deep the fedex issue may be for some of the big

retailers logistics this season. >> i noticed b of a today said the mood in semis is that the bear market will spare no end to market the question is whether or not that spreads has negative implications for intel, nvidia, and some data center piers so we'll reset and get ready for a very busy next week with cpi let's get to frank holland and the half welcome to the half time report i am frank holland in for scott wapner it is a sell-off on wall street. a strong jobs report revising fears about inflation and the fed's rate hike plan what is the biggest risk right now, inflation or recession? and what do investors do from here we're going to debate that and much more today with my committee. also with cnbc senior economic reporter steve liesman steve, great to have you here. let's get a check on the markets right now in what's really been a wild week. the major averages