huge commitment to invest in upstate new york the jobs there will pay better than some of the jobs that have been there they're also expanding the capacity of the u.s. economy to grow >> we want to thank you for coming in this morning it is great to see you at the desk, and we hope to see you again very soon. >> thanks for having me. >> thank you that's it for us we have had a heck of a three hours. make sure you join us tomorrow "squawk on the street" begins right now. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber, premarkets trying to hold on to some games even as september producer prices come in the hottest since june they do decelerate for the third straight month to 8.5. our road map this morning begins with recession-ish the president saying he expects only a "slight economic dip" and the treasury secretary says markets continue to function

well plus layoffs looming into reportedly planning major job cuts, a slowdown in the purchase of pcs pepsi shaking off slowdown fears, it boosts its outlook on signs that people are still buying and drinking a lot of soda, even with the price going up let's begin with this morning's inflation data, we were looking for 0.2 i know you said there's nothing good in here 8.5 is a lot better than 11.7. >> yeah, i mean, look, not that long ago, i said we were at peak inflation and commodity. financial "times" made fun of me i like them because it's a salmon-colored paper and i like salmon but i'll tell you this if i am a believer that we're at peak wage, peak food, peak housing, i have nothing at all so, anybody who buys bonds on this, i don't know why

we already knew we were peak commodities. i mean, david, it's okay to say, there's nothing good here. because we do an inflation problem. >> you seem very despondent about this report. >> i thought this was going to be the beginning now, you see -- >> you thought it was going the beginning of a turn i a significant improvement? we get cpi tomorrow, so we've only got 24 hours to see what the next sign is >> maybe that one's going to be better but you know, it's okay to say, you know what? i am disappointed in the number. because there wasn't anything there for me i was one of those people who said, you know what? when i look at the inputs here, anything auto, travel, commodity ship, how it gets to you, i thought there was going to be a bit of a price break there even was, to some degree in the pepsico quarter, when i spoke to hugh johnson, who's terrific, that there was a sense that some of these prices were

coming down. so, i would call myself hopeful, and it kind of, like, in a sports team where you have kind of, you're down by one and you're thinking you're going to make it? no this was a disappointing number. >> okay. market reaction, any different than it has been for days, weeks, and even months at this point? >> no, it's funny you mention that look, it's october 12th. i regard november 30th as the beginning of the bear market some people think it's november 12th and this doesn't say it's going to end this is going to say it continues. and you know, carl, our viewers are worn down by it, and all the junk, the spaks, the ipos, they don't have any wind at their back the only group that has wind at their back are pepsico, general mills, because next year at this time, their numbers are going to be up. but next year at this time, i'm not -- i'm very worried that

many companies' numbers will be down i hope for the banks to stay a good story on friday but god, i wanted this number to be better. >> yeah. as for cpi tomorrow, i think it's morgan stanley, they see the number tomorrow being uncomfortably high because of rents. >> yeah, rents >> persistent rent they see core 6.6 year on year >> i was going over the sales last night in new york of high-end properties miserable. i mean, they're over they're just not selling except for if it's over $50 million, which i guess is just people have hedge funds but i'm getting daily rent figures now. that's how i would -- i would not say desperate, but i'm trying to be granular, and that sounds like a good number by morgan stanley we don't have inflation under control yet, which means that, year over year, maybe we do, come november, but we don't have

a macro-break. you do get pepsico a microbreak and pepsico's really well run. >> we'll get to it later, of course, but it is a beat they raised the guide. they see organic up 12 they were prior 10 some of these frito-lay north america, organic up 20, volume down 2 it's all price now >> they did have a little bit better convenience but here's the bullish case, and david, i think that this bullish case is not what you want to hear. >> okay, tell me >> the -- they had a lock-in on a lot of prices that go into, say, a bag of fritos and you know, they anticipate and buy nine months ahead. so, if plastic was bad nine months ago, it's still bad >> right >> but it's about to roll over so next year at this time, they're going to have lower prices >> do you think they're going to lower price?

no, why would they it's been sticking they raised prices, what, 17%, as much as or i mean, certainly, we've seen margin improvement the organic growth at pepsi versus what they expected coming into the year has been doubled >> they have gatorade. numbers are really terrific. frito-lay, numbers are little terrific they raised price equal to their costs, like 20 basis-point degradation. however, david, when those costs come down, the raw costs, and you're still paying the same thing for frito-lays, they're going to have a 400-basis-point improvement and when they have, you're going to want to own that stock. >> maybe you want to own it now in anticipation of that and sell it on that >> how long can they hold out? you see the "new york post" story about disney facing protests because of the theme park price hikes >> good luck i'll take a big block if anybody cancels and flip it on ebay.

what a bunch of morons greenfield has a nice tweet. that's worse -- what people are still traveling >> you called people a bunch of morons >> why not well, what's disney going to go to do you know stocks stop at zero, bob chapek >> it's pri pandemic -- >> mickey's worth, like, two bucks a share. >> intraday, it got to the 70s >> my charitable trust owns it we have a big club meeting tomorrow, and i could just come in with a hair suit and beat myself up or say, wait a second, are you really getting this stock at this price? with price increases, movies doing okay is there a chapek discount >> i don't know if there is. i think it's just more about -- listen, we are in a world where, again, we talk about this, where we simply don't fully understand the economics of the direct-to-consumer business. we know cord-cutting is only picking up in terms of -- we're at 7%, 8% estimates this year,

every year, you're losing 8 %. we know espn is somewhat challenged they have a new strategy there that's going to involve in terms of at least incorporating people's enjoyment and ability to somehow use the platform. >> i'm working on that >> as a one-off for betting. >> i'm trying. >> but we don't know the economics of direct-to-consumer. we know they're spending $16 billion on that part of the platform >> okay, i've heard you. you can talk any way you want. >> i have a suit i'm actually wearing a suit today. >> i have that same suit >> don't wear it today >> i know, i just like it. night ritter you know what they didn't have theme parks. >> jim, the other story -- the other big story today is financial stability. we talked about bank of england and bailey yesterday, the three-day warning to uk pension funds, certainly the secretary

of treasury, yellen, talked to sara eisen yesterday about stability in general here's what she said >> well, there's been a good deal of financial market volatility, and some concerns about liquidity and the potential for liquidity strains in the treasury market we really haven't seen signs of financial stability in the united states in our financial markets. they continue to function well and we're not seeing signs of deleveraging of the kind that sometimes occurs in an environment of tighter monetary policy >> got 30-year spac about 5 today, jim bank of japan has them all >> yeah, okay, see, these are all very small, somewhat manipulated markets. if i were one of these private equity firms, i probably would have enough capital to buy all

the dislocations david, you know, these private equity firms, busy trying to find something to buy. >> alternative asset managers is what you might prefer to go with private equity would just involve -- >> i like that >> that's what they are. black blackstone is up to $940 billion in assets and they just did this deal with this insurer today they're not buying the insurer but taking the aum from the insurer. >> do you remember when hyman wealth was bigger than u.s. steel? i got to tell you, jonathan gray is bigger than the king, okay? he's bigger than the king. yeah all right? you got king charles >> i know who you're talking about. >> i mean, honestly, we've got these companies -- >> he may well be. that's true. >> they have so much money that they're bigger than britain. >> your point being that they're -- the dislocated securities that are resulting from what's going on right now should be bought by these

alternative asset managers or probably will be? >> i think if they're not doing it, then they're just busy watching the yankees which is, you know, they could be watch the phillies that started at 1:00. they're looking for something to do we know that these pension funds obviously didn't know what they're doing. >> for sellers of certain things >> so i'm suggesting right now that the -- these -- i mean, they're looking for something to do with their money. they, by the way, have a lot -- they're caught in a lot of things that they're not being able to sell, and they also own a lot of variable debt product >> right, right. >> that's mostly pe. but david, this is one of the great opportunities i've seen because it's not a lot of money, and they can scoop it all up because these pension funds were, i guess, ill advised >> caught on the wrong side. they didn't expect the move. >> we can talk all we want about britain. they're just -- i wish they were bigger, but you know, churchill.

>> well, i mean, others would argue it's whack-a-mole. one day, it's uk tomorrow, it will be italy germany today saying we're going to grow minus 0.4 all of next year >> i don't know how many of the people in those countries, maybe the pension funds that were equally as trapped, but it seems like they made some sort of technical mistake in the way that they -- >> they may have, but to carl's point, got to keep an eye on transmission mechanisms. >> no, look, i'm not saying that there -- >> what's going on over there sometimes can come over here remember the financial crisis? i went to norway, where they went bankrupt because they bought our cdos. >> that was a miserable, stupid school district that was just shocking to me i remember watching that with my sister she said, how could they be so stupid and how did david find them? it was a school district, for heaven's sake. >> it was the city -- it was a town >> what a great piece. they should run that >> my point is, these things can

spread far and wide. >> this time, do we see any appetite to rescue like we did back then? >> no, i don't think so, but i do think this is a uniquely bad group of funds that did the wrong thing. now, there can be uniquely bad in italy, i mean, we haven't talked about depasqui lately i did work with him. >> i know you did. >> they were super super people but i just think that we -- i don't want to overstate england versus our ppi, which is just horrible >> right certainly took the wind out of the futures this morning >> certainly set him in a -- wow. >> we're going to need a masseuse, something. >> we're just going to roll you off the set today. >> i don't know what we need with this ppi, but if i were, right now, jay, i would be saying, wow, i haven't done anything yet and that's kind of

the problem. >> you sound like mester >> mester's my hero. mester's, like, the surprise player in the playoffs you know versus somebody like -- >> don't talk about the playoffs i don't want to talk about the playoffs i don't want to talk about the playoffs >> but -- mester -- >> don't >> okay. >> we're going to get kashkari in a little bit too. when we come back, there's intel to talk about, reportedly planning to cut thousands of jobs we'll get to lvmh, comcast, boeing, meta, when we return

it does appear that intel will join the list of tech companies implementing layoffs the chip maker plans to cut thousands of jobs amid the slowdown in the pc market. the report says some of the divisions, including in sales and marketing, could see cuts of about 20% of staff >> i keep saying that the real weakness in this economy is going to prove to be silicon valley, where there's just tremendous excess. we have to remember that the numbers from gardner were calling for an absolute collapse i mean, just a falling off a cliff, pcs intel's trying to keep its market share in the datacenter, but they're levered to pcs, and there's -- pcs may be the single worst market in the world to be levered to it's one of the reasons why the semis have been so horrible. intel is right in the crosshairs

and i think what's really embarrassing about this, carl, is that they're trying to build out. but intel's trying to build out plant while they're laying off people i just -- to me, it doesn't feel good dave, maybe you think that pat gelsinger, who's incredibly nice, that that's a good idea to lay off people while you're taking federal money to be able to build out people? where are you at >> it's not a great look they're two separate things, obviously, seeing a significant slowdown in pcs and therefore they're trying to adjust their workforce for that >> adjust their workforce? how -- what? you sound like a capitalist. how about, fire people adjust their workforce >> i sound like a pr guy >> best practices. >> you do. >> you know how many pr people i've spoken to in the last 35

years? now i'm talking like them. getting rid of people, giving them the axe, sending them out the door at the same time, you're talking about long-term projects that are going to take years, if not decades, to fully complete they're two separate things. >> first in, first out why don't you do that? >> they're two separate things the government money is obviously to subsidize so we become, once again, a self-sufficient power when it comes to chips >> well, we're shutting down enough china, we better talk about -- i mean -- >> the other is just based on a move in the market, which we see now is unsustainable, the idea that pc sales would maintain that kind of momentum they had during the pandemic. >> david raises valuable points. >> yeah. there's the cycle and there's long-term -- you want to make 10% of global memory, don't you? that's what we're all shooting for. >> i would like to have all high-performance computing >> it would have helped if they hadn't missed that entire move >> you mean the 10 nano to 2 nano >> greatest chip-making company

of all time. >> it was. that's okay. it was a dynasty dynasties do end they end, dynasties. >> yep we'll get cramer's "mad dash." we'll count down to the opening bell on this wednesday as we take approppi under advisement don't forget, we get fed minutes this aeron ckn montftnoba ia me, don't go anywhere

blackrock silver is advancing one of the highest-grade undeveloped 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.

all right, we're doing a "mad dash. jim and i were just talking about it before we get started because it's lvmh, obviously, the huge luxury retailer run by leonard arneaut, one of the wealthiest men in the world. >> i wonder if musk gets twitter when he has to sell a lot of

stock, does that not make bernard -- >> yeah, the minute he closes that deal, he's $20 billion poorer, you could say, based on what we estimate twitter's really worth >> at the end, he's getting all that twitter >> he is >> you can't beat that >> money can't buy that. >> no. money can't buy hate is the way i look at twitter, having a lot of haters. so, get this they report, growth continues -- you know, david, the strong dollar -- no they're a winner in the strong dollar they bought joseph phelps, very good brand but david, jewelry, great. makes me feel that perhaps tiffany was terrific, because they say strong momentum perfumes and cosmetics, fantastic. fashion and leather, incredible. selective retailing, amazing watches and jewelry, out of town >> this is with china locked down >> they say that, little bit, not really important to them they mention it. >> not important >> yeah, little lower level of growth over the first ten months

but it's through growth -- >> what does that say, then? >> they're one of the world's great luxury brand companies >> there are a lot of rich people no, there is and they spend now, david, they have good champagne brands their brands are just great. look, all i can say is that if you want to create a company that had a great quarter, i think that it would be called, lvmh >> well, listen, the power of brands, and frankly, their margins are incredible >> they have amazing margins >> they make really nice stuff, but the cost of making it is not much more -- >> by the way, they say that they are against the economic backdrop, they're confident of continuation of current growth everybody says, like, uncertain. they're certain. they're certain. they do say the collectors watch embodied by bradley cooper -- interesting -- >> embodied by bradley cooper? that's a thing >> maybe there's another bradley

cooper, because the one i know is very boring, i think. but laura is doing well. fendi is doing well. good momentum. fendi. i don't know david. >> yeah. >> you know what lannen said if the rich are unhappy, it is their own fault. they should just go to lvmh. >> maybe arneault will reopen the club >> he had a failing -- >> incredibly well-dressed people, and i like to go there after work, meet people. >> is that an lvmh suit, david >> no. >> men's wearhouse >> this scintillating conversation, you can catch it any time, anywhere >> vintage mel ginsburg? >> opening bell podesta. we're back after this.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. should the american people prepare for a recession? >> no. look, they've been saying this now every six months, they say this every six amongst, they look down, the next six months to see what's going to happen it hasn't happened yet there is no -- there's no

guarantee that they're going to -- i don't think there will be a recession if it is, it will be a very slight recession that is, we'll move down slightly >> but you just said that a slight recession is possible >> it is possible. look, it's possible. i don't anticipate it. >> that's the president last night on cnn talking to jake tapper about the possibility of recession. jim, certainly, if job growth continues the way it is, it would be tough to put one together >> look, i don't think -- i think that jamie dimon, the other day in europe in our excellent interview, wanted to say it more like that. he wanted to be more measured. he said, there could be a recession, might not be. david, i think the president kind of cribbed -- i know he didn't watch jamie dimon, but jamie dimon wishes he said exactly what the president said. >> he does you don't think jamie was happy with what he said? he basically said, it could go down 20% i don't know >> that's the way that the president -- well, the president didn't say, 20%.

but i'm saying the president left the opportunity that it could be either one. i thought it was very eloquent >> just come back and talk about the fact that there are a lot more jobs than people are looking for still. >> that doesn't change from 11 million to 10 million, but i found it encouraging yesterday, you blasted me as a card-carrying republican or something. i say that this was measured could happen there are a lot of jobs, as you said, it will be -- oh aviation, you're focused on, is up 4%. i found that the president was measured, and was probably accurate in the world that we're in >> opening bell, guys, as you're talking, the big board today, pest control company renttokill, celeb celebrating its acquisition to terminex as we do open lower, s&p is down

13 of the last 16 days >> well, because they're trying to wear us all out and make us go home. but forget it. we have strength we have power. not going anywhere but again, the ppi was just terrible and i think that when you look at the ppi, and just say, well, they're not going to ease. they're not going to stop. they're just going to keep going. and that's been a recipe for a bear market, and i don't think anyone can fight the tape. the tape's bad so, just don't get excited keep your paddle dry recognize there are some sectors that are still working, which are the consumer products companies. there's nothing really to hang your hat on, but don't get discouraged, because it is going to happen. there is going to be a moment where the fed is going to push us, wages down, not happening yet, food will come down, believe it or not, and rent will come down. housing will come down autos will come down, but we're not there yet.

>> you want some good news something maybe at least to get a little bit -- >> no, no. >> -- broadly happy about? merck and moderna. how about that >> i like moderna. >> you like the idea of a personalized vaccine for cancer? well, they're getting closer, at least it would seem, because this morning, we do have merck exercising essentially an option they have had an agreement in place since 2016, merck and moderna, under which they were developing -- jointly developing commercialized personalized cancer vaccines pursuant to terms of an existing collaboration, and as i said, licensing agreement. it's called mrna 40157 i won't go through all the numbers, but it's being evaluated in a combination with keytruda, of course, merck's key anti-cancer therapy. and they are going to pay moderna $250 million to exercise the option on this again, they put this collaboration agreement in place back in 2016, but they are taking the next step here in

2022, perhaps a sign that they think there's some hope for it moderna shares, obviously, responding quite positively. merck, as we pointed out in recent sessions, has been strong, as it has all yearlong up almost 19%. >> the drug stocks have been really good. the companies -- traditional companies when you go into a recession, when i was at the jpmorgan healthcare conference, few years ago, which is such a great conference, i met a doctor in the hall. i had had him on -- >> the man who runs moderna. >> and he said, look, i'm developing vaccines that could be revolutionary, personal cancer vaccines. >> yep >> i really think i can do a lot of vaccines, and i said, i'll put you on and he said that i said, yeah, sure and then in february of 2020, he comes up with a vaccine right at the depth -- at the depth of covid, he came up with a personalized -- he came up with something. i think this man is so un

underestimated i think this stock is so underestimated >> you do? it's obviously come down a great deal >> it's extraordinary. >> what we are talking about here is, again, something that is designed to stimulate an immune response by generating t-cell responses based on the mutational signature of a patient's tumor. so, personalized to the -- >> and not hopeful, actual >> -- to the mutational signature of that individual's tumor. that's the future, right cancer therapy >> look at that chart. it's so bad. does that trump the personal -- the fact that it trumps this chart so bad carl, this company is so different because it's mrna. the man, ben sell, is such a dreamer, who is executing on its dream, and a personal cancer -- i lost my mom to cancer, and the idea that there could have been something that would have saved her? unbelievable she died very young, and i just

always thought -- i remember going to memorial and just saying, don't you have anything for my mom and the doctor, who's actually a very mean guy, said, no, i got nothing for her. maybe a little more genteel. i do think this is it. this is what you can say here's my -- this is my run of genes. this is my gene map. what do you have for me? and moderna's going to say, well, we have -- we see this pattern before we've got something for you. and i think this stock doesn't reflect his genius >> it's a big move, definitely the biggest s&p gainer this morning. other than that, it's all pepsi and coke and kimberly clark. >> well, kimberly clark, raw costs are going to go down for them too coca-cola, i think james quincy is going to do a fantastic job whenever you can do double-digit growth, remember, aluminum can and plastic are going to come down we don't know what he put his hedges on, so to speak, but these are good stocks, and i

know noerrwegian is not a recession stock. i think they're doing incredibly well, because they told me they're doing incredibly well and the ceo is really good, but if you go into recession, you buy kleenex. you buy coca-cola. >> and luxury handbags >> apparently, yeah. well, the rich people. >> you go to tiffany a lot for some reason. >> this is like elizabeth warren >> they're not pulling back at all? the rich people aren't pulling back >> mercedes. >> i don't see the odd numbers >> mercedes' quarterly sales yesterday, right i mean, kind of sounds like lvmh in a sense >> they've got -- i had benz on. >> no negative wealth effect there, even though the nasdaq is down >> david, the rich are -- the rich have a lot of money >> whoa. >> there we go that's a takeaway. >> more than they need >> we have breaking news the rich have a lot of money >> speaking of the rich, let's talk about vista equity

partners again, active in the public markets, third big buyout of the year remember, we talked about this a couple of weeks ago, because they had owned a stake in it then, they made a bid and it was made public as a result of the fact they -- >> you knew that after >> say again >> dead yid you know before or ? >> it's training to get employees of companies not to get phished. >> p.h people might think it's like getting hooked >> no, p-h, as in somebody stealing your information by way of email or text or more sophisticated moves. vista, you know, $4.6 billion deal you can see 44% premiums, what we're calling the unaffected stock price. obviously, up even over yesterday. and they are relying on direct lenders here i don't know how big the equity check is, but they're relying on

direct lenders to finance these deals. they did it with a larger deal, and obviously, they were also part of the citrix deal, which has left a lot of the banks holding paper that they wouldn't necessarily want to hold or as much of it we talked about the weakness in the leverage finance market, noninvestment grade. it's hard to get -- >> there are not that many deals out there. >> there aren't. again, we're not talking about the huge debt financing here but they continue to move forward at vista and clearly see benefit or i should say value in the public markets as opposed to the private, which is where they typically have done most of their buying, mr. smith at vista likes -- likes his founders. >> i'm not arguing that knowbe4 isn't incredibly important it is. but citi and jpmorgan have notes about apple today. >> it's a little bit bigger company. >> and i put the citi piece, we

are not scared of apple stock, despite halloween. so a little levity in a period of negativity. jpmorgan says, except resiliency, counter to buy-side expectations both these pieces, while not as important as know after or vista or whatever you're talking about, are very important, because apple is still the key to this market >> it is it's the key to this market. okay i believe that >> did you ever see the amazon gentleman this morning on amazon prime? squawk >> no. >> amazon prime is doing great amazon web services is doing great. amazon advertising is doing great. and yet, the stock has been horrendous what do you make of that >> well, you know -- >> okay, thank you >> their costs have gone up a lot. >> costs >> they hired a lot more people than they needed to. >> well, you should say that -- >> would you like to reason to what the gentleman had to say, jim? we have that for you >> shoot let's go

i knew it. >> i can share with you that in the three-hour period around the launch on the 15th of september, we had the most prime sign-ups we have had in the entire history of the program that's on top of prime day, black friday or cyber monday, so unprecedented numbers. >> sounds like he's referring to those three hours where you're watching thursday night football >> yeah, well, look, i mean, they -- >> those numbers can be a little bit inflated, because you got people who will go to the site the next day, and if they click on the game, even though it's no longer live, it's still there, it counts. so it's not nielsen numbers. just keep that in mind, when it comes to nfl numbers for amazon. it's like a lot of the things on the internet, anybody who lokz clicks it, it's counted. >> well, can we just say that people who are convinced that it was an overpay, there were a lot of people -- >> it was, and as he pointed out, it clearly helped them a lot. >> but nothing's helping anybody else in the media. so, this was something that a

rich company came into the traditional media and cherry-picked an amazing asset >> speaking of media guys, our own company, a little bit of news mike cavanaugh, long-time cfo at comcast, being promoted to president. i think many of us hoping that perhaps he's going to bottom the stock. you know, maybe he can point back to this day and say, hey, the day i became president, stock was around $28.60 and it went straight up from there. that's what we're hoping >> you're saying there could be like a cause and effect? are you saying that's the luck of the draw? >> maybe he'll just get lucky. of course, he was -- >> better lucky than good. >> carlisle, long-time jpmorgan cfo, actually, knew michael quite well back then haven't talked to him nearly as much in recent years was talked about very openly as a successor, even back then, to jamie dimon, but we know now that the successor to jamie dimon is jamie dimon

>> that's the rich people are rich >> you like that only preferred president in the history of comcast, which we've pointed out many times to be as fair as we can to stock that we own, has been suffering a lot of challenges as late, given the lack of new subscriptions for broadband, worries about average revenue per user for broadband, potential price wars, competition from fixed wireless, not to mention, in our front, the advertising market and the continued cord-cutting that we talked so often about. new president. all these are his problems now >> do you think you just listed everything you know what he left out? dallas plays the eagles on sunday night, which is a sunday night football game. >> that's going to be exciting >> there you go. you have all those negatives i counter with that. >> is that a home game for you >> yeah. i'll be terrible monday morning. >> you'll be great >> if dallas wins, look out. lot of bad will. >> he'll be more despondent than he was after this ppi number >> if cowboys win, i got a convenient whipping boy to my

left, stage right for the -- and you are going to just bear the brunt. you might want to take monday off if dallas wins >> maybe i will too. >> i think everyone should everyone should. >> there's been hints. he definitely has been hinting to some, schefter included, that that thumb is feeling good, that his grip is okay >> yeah. yes. now, that's -- going back and forth with the man on that, i don't know i'm playing jimmy g. and some of that is because of someone's advice >> our viewers now know, dallas wins, jim will be alone at the desk on monday morning carl and i will both be off. >> i just think you want to -- >> to the show solo. >> you don't want to know what my mood will be. >> i showed up after -- i don't want to talk about the baseball. >> i show up after every game. >> you do. you do >> and i'm miserable if they lose, and i'm so happy if they win that i say it's a bear market >> won the super bowl a few years ago. >> thank you >> that should still make you happy. >> i take that victory everywhere i go.

same weekend, by the way, that wells fargo stunk up the joint with 62 and yellen came after wells fargo. the last time i think that yellen actually came after anybody, charlie's there now charlie sharp. he's a nice man. >> how did we get on wells fargo? >> happened that weekend friday night before the super bowl game. >> i want to get you on meta because everybody's talking about the quest pro and this strategy from zuckerberg to sell this hardware, basically, not for profit but make it up on software and services. here's what he said yesterday. >> obviously, it's still this high-level concept and there's a ton of stuff that still needs to get built, but i think, you know, it caught people's excitement just as sort of -- kind of a long-term hope for what we want to build, more than i had actually thought was possible and then i think, actually, poses different opportunities and challenges on the one hand, a lot of folks are really excited about working on it. on the other hand, i do think it just sets up for a trough of disillusionment at some point because it is a vision that's

far out. >> trough of disillusionment >> that was the key phrase by the way, needham today, who's been very critical, we admire his commitment to a vision in the face of overwhelming odd, but they say, our job is to make stock calls and there's no reason to be in, even if this pays off in 2030, jim. >> i think dave blaner's got a different view and he's cfo. i think that we're all going against the fact that zuckerberg -- i think he didn't really want to say that the worst is yet to come but that communicinfluenced a l people >> trough of disillusionment may have given them -- >> i read -- wasn't that one of the dostoyevsky books? >> might have been next time you interview him, will you wear a t-shirt? >> i always wear a t-shirt to preserve my shirt. but i tried to get an interview with him on this and i failed miserably i just want to point that out. i did my best, and i failed.

there you go >> this is usually the part where we show you high-fiving him in the metaverse >> go ahead. go ahead i sure didn't get to high-five him on my club call tomorrow i tried to get him on my club call i failed sometimes it's good to point out -- everyone always talks about the get. how about when you fail the get? talk about trough of disillusionment. i'm talking about the marania trench of disillusionment. >> good morning, carl. bitterly disappointing ppi, but wait a minute, we're positive and some risk on stuff is actually positive. not sure this is a trend here but vicks is approaching 35. keep an eye on that. look at the sectors here, naturally, defensive here so consumer staples are on the upside, pepsi's a big help there, healthcare's positive wait a minute. ark innovation, risk on. it's now positive on the day metals and mining, still down.

that's another risk on that's down vaneck semi, look at that. now positive these are very interesting trends, given how disappointing the ppi was. if you look at big cap tech, too, a lot of the big names are positive right now so, apple, microsoft, alphabet's there, kla corps, which has taken a drubbing this week in all these concerns about issues around china, is flat. nvidia is up slightly. these are very encouraging trends, given what we've seen with the ppi not surprising, consumer staples is strong. pepsi the second biggest gainer david was talking about moderna. that's the leader in the s&p, but pepsi is number two. coke, kimberly clark, kraft heinz, procter & gamble. did you see these pepsi numbers? organic revenue up 16% this is -- that is very difficult to get that, given how big pepsi is now, if you're wondering, how did they do that look at this pricing 17%. wow.

that's amazing amount of pricing that you get from a company like pepsi. and the volumes were down 1% that's how you get to 60%, folks. pricing up 17, volumes down 1% these are quite amazing. the gross margins are 53%. that's essentially unchanged, so what they seem to be saying is they needed the price hikes to keep the gross margin up, so really very impressive they're still getting price hikes. we'll see if that keeps going. meantime, the banks are entering earnings season and it's been a long time since we have seen banks at new lows. jpmorgan, citi group, bank of america, key corporation, all 52-week lows you got to go back to the second quarter of 2020 to see banks in poorer shape i'm talking to pricing, than we've seen -- than right now here so, most of the big banks are underperforming. s&p is down 23% from the year, so jpmorgan, citi group, key corp., u.s. bank corp., all the big banks are underperforming the overall s&p 500. i think the important thing is

the earnings expectations seem very, very low if you want to look at the multiple, look at 2023-4 multiples. jpmorgan is at 8 these historically, you go back five, ten years, most of the multiples, the four multiples on banks is 11, 12, 13. it's even reached 14 or so but not 8 and not 6 on citi group. these are really, really low multiples. so, carl, overall, the kbe bank index, which is the bank etf, basketball, big bank stocks, that's got a multiple of 8, and for many, many years, that traded at a forward multiple o anywhere around 12 to 14, so my point here, carl, is, yeah, it's a tough time for pricing, but the expectations are very, very low for the banks for their 2023 earnings back to you. >> bob pisani, we'll talk in a little while before we go to break, let's check out bonds today. busy day for fed speak we'll get kashkari in a few

minutes. fomc minutes at 2:00 p.m. eastern time we'll be right back.

this is realtime insights, i'm joined by ey america's people advisory services leader. thanks so much for being here. amidst all the market disruption we're seeing, companies have to transform their businesses what are you seeing that's working? >> ey did a study with the oxford school of business. transformation success needle hasn't moved that much over the last 20 years. less than 50% are successful people are focused on the rational side of transformation of technology and process. if you put humans at the center, your likelihood of success more than doubles >> how do companies focus on humans at the center. >> our study has discovered six very specific levers those are vision, collaboration, technology, process, leadership is a big one and also creating psychological safety when you do that, you start to

turn it to a transformation eq which actually is driving those programs far beyond success. >> how are you applying for levers to your clients >> we find two different kinds of client, one embarking on transformation the other one is clients that are in flight that may be having a very bumpy ride on their transf transformation. >> kim, thanks for sharing your insights really appreciate it >> thank you 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, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

watching some snas dak 100 gainers this morning we talked about moderna this morning. you know the results out of pepsi. lucid and zoom also in there as well as we have the dow holding on to mild gains, up 82. the s&p a couple points below 3,600.

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jim, what's on "mad" today >> very exciting macy's has a new toys "r" us at stores i want to find out the truth the lvmhs, but you have the bfs. what's right it is very clear that the rich are spending, but that flagship store historically has attracted a lot of rich people jeff has always been very straight with me the deficit, he used to have a terrible balance sheet and he's fixed it i think he is one of the great department store people of our time >> we also have a few extra days this year between holidays

elongated selling season. >> absolutely. i'm also going to -- lvmh, anybody who is successful, they have the magic, they have the midas touch. >> we'll find out. we'll start talking a lot more holiday in the weeks to come see you tonight, jim "mad money" at 6:00 p.m. when we come back, bill nye again, you want to hear what he's buying as we have the dow up 100 points. don't go away. power e*trade's easy-to-use tools like dynamic charting and risk-reward analysis help make trading feel effortless and its customizable scans with social sentiment help you find and unlock opportunities in the market with powerful, easy-to-use tools power e*trade makes complex trading easier react to fast-moving markets with dynamic charting and a futures ladder

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join the pursuit of outperformance at pgim. the investment management business of prudential. good wednesday morning welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan and david faber. the new york stock exchange olding on to numbers despite a ppi that ran hot this morning. >> it's going to be a busy wednesday. we're 30 minutes into the trading session. here are three big movers we're watching this morning. a bull-bear debate on boeing

credit suisse estimating it underperformed with a $98 target on the flip side, goldman sachs naming boeing a top earnings pick with analysts there arguing they see, quote, free cash flow flipping positive in q3. shares are slightly lower. intel preparing for thousands of job cuts according to a bloomberg report. an official announcement could come on earnings. finally, lyft up lifted after gordon haskett upgraded from buy to hold the stock plummeted yesterday. it may classify drivers as employees rather than independent contractors. those shares are up 5% this morning. >> let's start with this morning's inflation numbers. september ppi did top expectations, revisiting the june high despite persistent inflation. treasury secretary janet yellen says the fed has a plan to tackle the issue. >> there have been a lot of

underlying shocks, decisions, for example. opec's unfortunate, very unfortunate and i think unwise decision to reduce oil production so there are shocks related to russia's war against ukraine, it's clear the fed has committed. they've said to have a plan for how they tackle inflation. i think that's pretty well understood by the markets. >> that conversation taking place before the president told cnn's jake tapper he doesn't think there will be a recession and even if there is, it will be very slight. it runs counter to what the german economic minister is saying and that's that we're on the cusp of their recession right now. >> they're dealing with a different set of circumstances, certainly when it comes to paying for energy. prices there have skyrocketed as

a result of russia's incursion into ukraine and the impact on energy markets the costs have soared for manufacturing in particular. >> increasingly more and more economists that you speak to will suggest that europe in general is probably already well into a recession that being said, the comments about shocks and opec, that hasn't even made it into the data this recent reemergence of crude around $100 a barrel the last couple days. when you look at the ppi number this morning, carl, it's largely unchanged actually if you take energy out of the picture. it's services, right, that are stickier that speaks to what the fed has been so focused on in general when looking at these data points in recent months. >> ahead of cpi tomorrow and the general take at least among some firms, morgan stanley, rent is going to be the problem that will keep the number tomorrow they say uncomfortably high. we'll find out in the morning.

>> of course, we're going to have a whole conversation about some of those numbers a little later in the show. in the meantime, taking a look at markets we are slightly higher as we await more information, more data, including the fed minutes later today. the dow is up .5%, 147 points, s&p up .3, and nasdaq about .3 higher as well jpmorgan asset management phil cap really and oppenheimer's jim stole fis. seems we have a bull-bear debate that e we'll be plotting out phil, i'll start with you. your take on equities right now given all these macro crosscurrents we've been talking about day in and day out. >> we'll start with good news. yanks won last night, so that's good. >> i know. >> the other piece of good news is we're going into cpi tomorrow which you mentioned in a much, much healthier technical

position what do i mean by that the ten-year was at 3.30, at 4% now. the s&p was 12% higher people thought we were going to have some sort of abatement. that's the good news we may see a little bit of a rally. we don't think you can sustain a rally here because the fed's open mouth operations are not changing any time soon they have zero tolerance for the equity market rallying, for financial conditions easing. morgan, if we get a good number? what do we get, 8%, 7.9? way too far away for the fed to be comfortable >> so to put a sharper point on it, you think we have further to fall >> we think the lows have not been put in yet. technically again, morgan, you can see a relief rally over the next couple days we're at year-to-date lows going into this number it would take a huge number to the upside. >> john, your thoughts

you've got a pretty ambitious price target for the end of the year >> i think our price target has to be revisited based on what the bears have done to the level of the s&p 500 over the last few weeks. we do think this is not uncommon in what we're seeing in a fed funds hike cycle we've got a situation where essentially we had overstimulation of the economy as we all know by both politicians and the federal reserve. the fed was behind the yield curve for a long time, now is catching up. we think that the selling looks way overdone at this point we think earnings -- we just heard some of the good news related to earnings this morning that was mentioned heard carl going through numbers a little earlier when you get that type of a picture, the thing is, businesses are becoming more accustomed to operating under adversity. technology enables them to be

much more efficient. if you look at the market today, we've got a nice rally moving here i don't know if it will hold through the end of the day there's still enough cad lifts out there for bears to feel like they can sell without fomo or fear of missing out. we can't help but think overall stocks are on sale, and what the market has shown us in terms of the s&p 500 in particular has been a preference for growth thinker value and garpier growth, which essentially means that companies that are profitable, that have a capability to maintain that profitability cash flow and ideally pay dividends. you can't be willie nilly jumping into the market. this looks like stocks are on sale opportunities to dollar cost average and to do some rebalancing here >> okay. of course, as you're talking, the nasdaq is slipping into negative territory you don't think earnings need to

come down, earnings expectations, john >> i think they already have when you listen to analysts, they're cutting ahead of the earnings season which is not uncommon during periods like this makes ul the sense in the world. i think expectations were a little bit too optimistic, and i think as they come back towards reality, where we're headed to is an opportunity to find that going out further, if your goal is beyond -- if you're a trader, listen, this is anything that goes on the day to day, rebalancing, rotations by the dip mentality, the sell the dip, whatever you have keeps running through for intermediate to longer-term investors, this is a period where when you look back, people are probably say, gee, i'm glad i participated and didn't get out of the market or people will say i wish i had participated. >> i think ultimately, yes,

that's the case. you have to get to the point, morgan where the fed does a cost-benefit analysis, where the cost of all these rate hikes don't outweigh the benefit of them trying to slow down inflation, the damage they're doing on the economy if you listen to all the speakers from jackson hole all the way to now, that's not what we're saying the american association of institutional investors is at its most baeish point since march of '09 that's a problem, but not morgan right now, because of how far away they are from target. they want to keep rates high for longer, not low for longer >> quickly then, given your thesis, where are you putting money to work right now? >> a couple things one is still the u.s. over the rest of the world. we talked about that under weight all three regions however, the u.s. is our highest allocation in the portfolio. we're going to hate to say it, but it's cash. so cash is a really, really good asset class that we haven't had to look at since 2008, yielding

over 4%. as the smoke clear, as fe figure out where the term cal rate ends, cash is a nice asset class and longer fixed rate. >> we'll leave the conversation there. phil and john, thanks for joining us to kick off the hour. >> thanks. as we head to a break, here is our roadmap for the rest of the hour, including how pepsi is fighting back against inflation. >> interest rates hitting the highest levels since '06 what does that mean for the commercial real estate market? chip makers wrapping up the chance to meet demands for automakers are they too late? former chief warren fields is with us when "squawk on the street" continues. we've become a foodie destination. larry doesn't just create mouthwatering dishes; he creates opportunities.

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welcome back take a look at the ishares u.s. consumer staples ticker y 2k out forming by 50% separate si is the second hold r longest holding. the company able to successfully raise price to offset inflation, raising guidance for the full year where they see organic guys, up 12, prior was 10. 17% price hike is a big deal in this kind of market. definitely paying for what they're having to pay for. >> yeah. consumers are still going and buying for now we know snacking continues to be resilient as well. after the break, mortgage rates, though, are hitting the highest levels we've seen in

ree. a decad mo on what that means for home buyers next. "squawk on the street" will return in just a moment. h again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. - oh, the stock market is doing that fun thing again. news from the future: you're going to live through that about 10 more times! (laughs) no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing.

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rates on a fixed 30-year mortgage now over 7% that's the highest level since '06. diana olick has more on the impact. >> higher rates are hitting home buyers hard. you can see it in the demand for mortgages and the type of mortgages potential buyers are looking at first let's get to the rate. average on the 30-year fixed is solidly over 7% according to mortgage news daily and could move higher today as bond yields rise due to the higher-than-expected ppi number. no surprise mortgage applications from home buyers dropped 2% last week and volume was down 39% from a year ago according to the mortgage bankers association. the mba also said it's harder to qualify. credit availability down 5.4%

from august. it's now at the lowest level since 2013 when the housing market was still recovering from the financial crisis now, while lenders are desperate for business for sure, given the drop in demand, they're also concerned a weaker economy could cause an increase in mortgage delinquency. they have a smaller appetite for lower credit score borrowers and riskier loans which unfortunately coincides with stronger demands for the riskier loans because they offer lower interest rates the share of adjustable rate mortgages remained high at just over 12% the a.r.m. share was at 3% at the start of this year and had been for several years because rates were so low. borrowers didn't need to take on the added risk not so much now. the rate at 5.5 a.r.m. can be fixed for ten years. >> that's where i was going to go with you, whether this was pushing more people towards riskier options, and if so,

whether this sets off warning bells for you given the current macro environment and the rate environment, as someone who did cover the housing situation back in '07, '08, '09 so closely. >> morgan, i was definitely there and i saw it all it's a very different mortgage market while these loans can adjust higher or lower to the market rate, they are underwritten very strictly right now, nothing like the loans we saw back in 2004-2005, the negative amortization mortgages, they're nothing like that. i do feel better about those there's nothing wrong with a five-year arm, a ten-year arm if that's how long you expect to stay in the home again, they are considered riskier because they can adjust. >> diana, thank you. i want to corporate this conversation on real estate and the market we're joined by the chairman and ceo, willy walker. you're not just a multifamily

agency lenter, but expanded into a lot of different markets at this point we can get a good sense as to what's going on broadly speaking let's start with rents, which seem to keep going up despite what we're hearing about housing rates moving up and making it more or less affordable for buyers. >> you and cramer talked this morning about rents being a component of inflation and how there's nothing abating that upward tick in rents it's really a supply and demand issue. apartment buildings across the country are full and able to push rents right now until we start to see more supply come online, it will continue. >> you think rents will maintain or continue to move higher >> they'll continue to go up everyone we work with is pro forming north of 5% increase over the next year until you see that come down to the historic average of 2% to 3%, you're not going to see that number abate.

>> from an investor perspective and/or those lending, multifamily is the place to be right now. >> multifamily is a great place to be. one of the big reasons for that is fannie and freddie that provide liquidity in that market, there isn't that liquidity in other commercial real estate classes. as diana just said, the market has changed dramatically financial crisis, the loans she was just talking about, that doesn't happen today there are much different organizations today. so that liquidity they provide in the market is extremely helpful. >> looking at the transcript from your last earnings fall, 59% of annual lending capacity still intact that was a couple months ago nonetheless, your expectation they'll take a bigger and bigger share. >> they will broader commercial real estate markets, the market is for all practical purposes dropped out

right now. getting loans is tough i think the big question right now is why aren't banks lending. you saw earlier bob pisani talking about name trading at ridiculously low multiples is because they're overcapitalized and they're pulling back them pulling back has made it so the entire, if you will, chain has stopped moving you can't get warehouse lines right now. you can't get syndicates to go and sintd kate loans as a result of that we're getting a real pullback from lending from the major lending banks, that's slowed down the entire system. >> why is that happening is that a sign as we go into bank earnings in the next couple days that banks are cautious is it a regulatory situation >> such a great question in q2 commercial banks in america, net charge-offs was one basis point, one

their delinquencies were at 70 basis points that got up to almost 9% during the great financial crisis they're bracing for something to happen, but it certainly has not started to happen. from an overall credit standpoint, it's an incredibly clean book. >> what does this do to the supply conversation that we started this interview with? can enough supply come online to see something like rents in multifamily homes abate? >> it's a combination of both keeping single family production going, which has slowed down dramatically as diana just said. that market is very challenged from where interest rates have gone in the purchase market. until you get more supply in single family and multifamily, rents on multifamily are going to continue to go up. >> what kind of numbers would you need to see on starts and permits to see the housing market begin to equalize. >> the big problem there, carl, if you think about it, we need to have over a million single family home starts going and that's been pulled back

recently with interest rates at 7% on a mortgage, it's very hard for new shovels to go into the ground on the single family side on the multifamily side starts over the summer were at all-time highs. that's an 18-24-month lag as to when the inventory will be supplied. >> that's not accounting labor or supply chains, things about getting those shovels in grounds, correct >> that's correct. you're seeing some abatement you're seeing prices as relates to lumber and other things going down, it's not giving confidence for new starts. >> our viewers may recall having brought you on a number of times, we talked about return to the office, an endless topic have we hit an equilibrium i'm looking at a report from bank of america in spending. in terms of spending in central business districts things have sort of equalized, but nowhere near where they were in 2019 they say suggesting a hybrid

shift in these cities. >> it's hard for ceos to get people back into the office. we've got from back to the office to forward to work, trying to deal with the new normal of online as well as in the office as ceos, we've soon jeremy diamond saying got to get back to the office. i think if ceos can change the outlook saying let's work in this new format, and say we're not trying to go back to 2019, but forward to 2023. >> finally, we don't talk often about your company i noticed obviously on the call you say you're generating a huge amount of cash you're going to use that to continue to invest but also return capital which is it? which one right now given all the things you're describing do you want to invest more or are you looking more for dividends and share buybacks >> if you look at how we did during the great financial crisis, when everyone else was hurting, we went public and went on the backs of that success

when the pandemic hit, our stocks sold off immensely and went off dramatically. we are holding on to crash right now and trying to be very opportunistic. there's going to be a lot of opportunities in 2023. >> we look forward to talking to you about that as well willy, thanks for stopping by today. >> my pleasure, thank you. oak mark's bill nygren lays out some of his topics stocks, major eresavag flirting with a flat line right now "squawk on the street" will be right back

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welcome back to "squawk on the street." stocks continue to rise as investors await the cpi number tomorrow well, a little bit our next guest laying out his top picks. bill nygren, great to have you back on the show. >> thanks for having me. >> you've made some changes to some of your funds

walk me through areas that you are now excited about our bullish about versus what you've been trimming. maybe we start with the oak mark fund. >> sure. when the markets are really volatile like they have been, that tends to lead to an increase in the distribution of p/e ratios and as that widens, i think that creates more opportunity for stock pickers like they are -- like we are at oakmark we have been selling the names that have gone to premiums, that tend to be more stable businesses like consumer non-durables we don't own anything in the utility area, and we've been buying more of the cyclical names where recession fears have driven pes down to what we think are unsustainably low levels as an example, one of the names we bought last quarter, fortune brands, the building supply company.

almost all their business or overwhelming majority is repair and remodel, so it's not exposed to the slowdown in construction. over half the value comes from their plumbing franchise, largely the moen brand it's at a single-digit p erjts we think one of the reasons it sells so low is investors don't value the cabinet business very much, and the upcoming spin off of that will force investors to put a specific value on it another of the names we bought last quarter, warner brothers discovery. discovery purchased the time warner assets from at&t for less than half what at andp paid five years agoment we think the big part of the value at warner brothers is the content library. library values have been going up up and up over time we don't think it's very well managed under at&t warners brothers sells at eight

times earnings right now and expects expense synergies will double over the next few years direct to consumer, hbo max we think make them one of the likely streaming leaders. >> bill, i want to stop you because it's a company i follow closely. they came in dramatically on cash flow instruments this year and for next year. obviously the stock has adjusted to that. what gives you the confidence they'll be able to deliver >> i think, david, it's trying to differentiate between short-term factors between what the ad market is likely to be over the next year and the long-term factor of how desirable the content they produce is to consumers. warner has done a great job of making must-see content. we believe one way or another the company is going to be successful at monetizing that, whether it's selling to other streaming services or we think the more likely way is that hbo max continues to grow and that

that becomes a very profitable business for them. >> speaking of content, netflix, you're sticking with it. why? >> well, netflix has actually been a very good performer over the past few months after being really lousy the first few months of this year. we think the company is going to get back into a good revenue growth mode as they both monetize password sharing and go to the ad-supported, lower-subscription cost model. we expect the company will be able to achieve double-digit revenue growth we think there will be expense savings as they grow, that there are economies of scale in that business and most importantly, consumers love netflix the turn rate is very low, the subscription rate is still beneath what it is for most monthly services, and the stock

is not that expensive anymore, even on traditional metrics like pe, getting down to a sub-20 multiple on earnings within the next couple years. >> bill, i know you're watching uber more closely these days i can't imagine you think this new department of labor ruling is going to affect things in the long-term. maybe it does, i don't know. does the gig classification change the value model >> uber is a stock you don't usually expect to see in a value manager portfolio. we like it because in the mid 20s it's selling at almost 10% free cash flow yield on what management expects to earn in 2024 that's what any contribution from uber eats which is the largest global food delivery platform if you valued that like doordash, that would add another 25% to uber's market cab we think uber can grow at

double-digit rates the announcement yesterday about trying to classify more of the uber drivers as employees rather than independent contractors, i think on the surface that sounds appealing, and like a lot of regulation, there's not a lot more depth to the thought. i think if that regulation went into effect, the number of drivers at uber would fall substantially. the cost would go up what's been a very popular service across a broad spectrum of consumers would not be nearly as value-added as it is today. i don't think that those regulations that were discussed yesterday will go into effect nationwide it's similar to what happened in california as people dug deeper and understand it better, they realized it wasn't good for the drivers, it wasn't good for consumers and it didn't pass >> bill, just looking at the

markets more broadly, given the fact we've seen such a strong and dramatic decline really across sectors of the s&p in the last couple of weeks, in the last month or so, how were you thinking about value and value versus growth right now, and is this a good time to be finding new opportunities from your standpoint or does it add caution to your thesis >> no, i think it's a very good time to be looking for opportunities. if you study the history of bear markets, by the time the market has been down 20% or more like it is now, it's too late to sell the returns in the forthcoming two years after the market has declined like this have tended to be above average rather than below. it's kind of ironic that so many people now say now it's time to get cautious after the market has fallen so much i think the pe spreads i referenced earlier are where the

real opportunity is. there are a lot of really good businesses selling at single-digit pe multiples. that would include most of the banks that we own, the energy companies that we own and almost anything that has cyclical exposure if we do go into a deeper recession than we're in right now, i guess that would hurt 23 and maybe even 24 forecasts. i think the long run -- housing is in short demand -- in short supply energy is in short supply. we think that the longer-term future is very favorable for those companies. there's a lot of capital getting returned to shareholders so we think it's a great time for investment. >> okay. bill nygren, thanks for joining us >> thank you let's get a news update. bertha coombs has that for us. >> hey, david. here is your cnbc news update at this hour. the fda has approved updated

covid booster shots for younger children moderna's new vaccine is authorized for kids age 6 and older. the pfizer biontech shot is approved for children as young as 5 years of age. three s.w.a.t. officers were shot this morning while serving a homicide arrest warrant at a home in philadelphia the suspect was fatally shot while trying to escape two other people in the home were arrested. the three officers are recovering at a local hospital and are said to be doing well. for the second time in five days, the zaporizhzhia nuclear plant has lost all external power. ukrainian officials blame russian missile attacks which continue across the country for a third day. the plants are relying on emergency diesel power to operate critical safety steps. on a much lighter note here at home, a truck carrying watermelons flipped over on a massachusetts highway down in fall river last night. most of the road was shut down for hours as crews cleaned up

debris and hundreds of smashed melons yikes. back over to you, david. >> that's a lot of melon there >> quite a mess. >> yes, it is. bertha, thank you. up next, chip stocks are underperforming in the s&p this year of course, we can take a look broadly speaking intel also as a chip maker reportedly planning job cuts that's a result of slowdown in pc salesment we'll have a lot more on semis and auto former ford ceo mark fields joins us don't go anywhere. ughs) no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing.

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- [narrator] yieldstreet: private market investing. watching the autos today underperforming the broader market chip makers ramping up production to meet the demands from carmakers the streets worry that the supply may be coming too late, forecasting all these macro headwinds and weakening consumer sentiment could drive an oversupply for cars. our next expect saers pentup

demand might protect the automaker. joining us is former ford board member mark fields thanks for being with us. >> glad to be here. >> we've been talking for weeks now about oversupply of inventory, pcs, shoes, apparel do you think autos might be isolated from some of that trouble? >> i don't think they'll be isolated the three things you mentioned that every business is facing right now, particular consumer facing business is the deteriorating macro environment. the auto industry faces that, a weakening consumer, consumer confidence you can say the auto industry is exposed to that as well. the third piece is rising inventories. absolutely the auto industry is not facing that. when you look at the dynamics going into a downturn, you have a situation in the auto industry which i think is unique versus past downturns you a lot of pent-up demand, and the industry volume has dropped

around 20%, the supply chain issues that's usually the average you see the drop in the industry during an economic downturn. you can argue we've already have it even if you see continued demand, destruction because of higher interest rates, the big factor here is the automotive companies need to restock the inventories at the dealers so relatively speaking, i think the impact of the downturn will be more muted, less severe than we typically see in the auto industry. >> we finally got year on year deflation on mannheim used cars. some are saying that's going to hurt trade-in value and impact demand -- at least pricing on the detail side. do you think that's true >> you are starting to see, the last four or five months you've seen used car inventory or pricing starting to go down. you're absolutely starting to see demand being impacted by rising interest rates which is

affecting affordability both in the new car and used car business you have to put this into perspective. there are still a lot of people and a lot of -- business fleets are almost desperate to get new vehicles i think that pent-up demand will help be somewhat of a buffer in both the used and new car business. >> given the fact that you have insights on both these fronts, the semiconductor situation, we are seeing the inventories build in pcs and other end markets are we starting to see that correction, that stabilization, if you will, where autos are concerned? >> you have to put into perspective. there's different size microchips, different what they call nodes that go into consumer products like cell phones, computers versus vehicles. cars tend to have for the most part some of the older nodes of the larger size nodes or

microchips the capacity is not exactly fungible but what you are seeing, and you've seen this reflected in the production reports from the manufacturers, you're seeing a better flow of product a lot of that has to do with we're seeing improved semiconductor supply from the industry to the auto industry, which is helping it's still tight every week you've seen manufacturers around the globe cut production because of that shortage a lot of that has to do with -- you can't take one capacity that goes into, let's say, cell phones and immediately switchi to capacity to supply the auto industry that will take a little time to work itself out. >> mark, it's david. we mentioned you're a qualcomm board member i'm sure you have insight into this increasing competition from the likes of qualcomm which is introducing the snap dragon automotive platforms, digital connectivity in a very significant way for cars,

competing against the likes of android or apple how is this going to continue to manifest itself in the marketplace? >> well, it all comes down to, as you look at the automakers and look at their product plans, in terms of introducing more and more technology, whether it's driver assistance technology, autonomy, connectivity, et cetera, qualcomm is extremely well positioned there, and the team there has done i think an excellent job over the last couple years of building a very significant pop line i think they have a lot of street cred given what they've been able to do over the years in the hand set business >> mark, we should talk more fleet sales next time. we're out of time this morning great to see you. >> great to see you, carl. minneapolis fed president kashkari speaking this morning

steve leishman watching the highlights. >> minneapolis fed president kashkari saying he sees signs of the market softening he said the stickier parts of inflation continue to go up. we'll talk more about that in a second, saying it's a judgment call of whether we move in 50 or 75-basis point increments. overall he said the fed has to deliver. talking about the consumer price index number we had sticky numbers up more than 8.5% over ppi core ppi at 7.2% inside the core cpi, what kashkari was talking about, stronger wholesale costs driving up, especially when it comes to the travel industry, driving up prices cpi expectations for tomorrow. 0.3. it's coming down on the headline stick in the sticky area, that

core area, that's what the fed is watching. it's the reason why they're not ready to say we've won this battle on inflation. yesterday as you remember saying we can't even say it's peak, saying there's been no progress on inflation. >> strong words there. i feel like sticky is the new term that we're going to be hearing more and more -- >> sticky is the new transitory, morgan >> exactly, exactly. in light of that, i realize this is backward looking information, but the fed minutes later today, what are you specifically looking for? what are some of the things that could potentially move the market given the fact that we have had so many comments from so many officials since then >> what separates the doves and the hawks, morgan, as i think you know, is not whether or not rates should go up, but how much they should go up before the federal reserve pauses the fed vice chair came up with a number that some people read as being somewhat dovish in the idea, that she looks more concerned about the idea of the

impact and the consequences of rate hikes, pointing out they haven't really felt them in the economy. one of the things i'll be looking for in the minutes is how much support that idea has, how many people are concerned, a, there are potential financial stability issues out there, b, that there are bigger consequences to the economy from the rate hikes that are here, and c, are they ready to kind of pause a bit and take a look or where they might be ready to pause. powell did say in answer to my question, hey, we are going to pause at some point, just not at this level where do they go before they take a break the market is on the edge of its seat wanting to know the answer to that question we might get info on that today. >> steve leishman joining us on kashkari coming up on "techcheck," we'll be joined by morgan stanley's mike wilson to see if and how he is repositioning

the nasdaq close to yesterday's intraday of 10.351 we'll be right back. ♪ in any business, you ride the line between numbers and people. what's right for the business and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance. cla - cpas, consultants, and wealth advisors. we'll get you there.

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the street." stocks have been moving between gains and losses but are slowly drifting lower at this hour. consumer staples are the big outperformers as you can see up 1.5% as a sector overall as investors continue to look for some of that potential safe haven trade in the midst of market volatility. we mentioned pepisco other names are in positive territory. including other food processors like mondelez, kraft heinz grocery stores in general extend recent gains watch the grocers and staples. back to you at the new york stock exchange >> we will watch dom chu, thank you. throughout hispanic heritage month we are celebrating our cnbc teammates and contributors. here is restaurant brands ceo jose >> i think the story of the

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united is expanding roots for next summer's international travel, continues to rebound phil lebeau has more on that >> david, this is a healthy expansion that united is announcing the second straight summer where it is increasing the number of flights from the u.s. across the atlantic to europe also expanding into the middle east as well here is what the expansion calls

for next year. a 10% increase in transatlantic capacity compared to this year that was up 20% compared to pre-pandemic levels. it's adding routes and flights for the summer of '23. the three new routes is the most notable newark to dubai. they will have a co-chair agreement with emirates. you have newark to stockholm and then newark to spain the transatlantic capacity next summer up 30% compared to where it was before the pandemic in 2019 so as you look at united, keep t in mind strong demand started this summer, that pent-up demand continued this fall. they expect this to continue past the holidays into next year we will hear more from united ceo scott kirby when the company reports earnings next week and speaking of earnings we get the first airlines reporting tomorrow it will be delta when it reports

before the bell on the q3 results and then you don't want to miss our interview on "squawk box" with ed bastion we will talk about where the demand is now and this interesting phenomena where typically october and november tend to be slow. that's not the case this year. the planes are packed. does this extend beyond the holidays and if it does, how long do they expect this pent-up demand to continue to pay off. >> a key question. phil, you take the news from united today you take the american news yesterday. in general, would you say going into this earnings season that it seems like or feels like the airlines believe that no matter all the talk about macro broader economic slowdown that at least where air travel is concerned that will be resilient >> yes more than resilient, morgan. they are noticing that pent-up demand has people saying i want to take a trip mainly leisure

also an improvement in corporate travel and international is roaring back transatlantic is strong. we are seeing asia little weak but that is likely to change in the next year or two >> phil, thank you. you look at the performance of a number of those shares. overall, we got more or less flat mark with the s&p up 0.03%. that's a wrap on "squawk on the street." time to send it over to "techcheck." >> good morning. welcome to "techcheck." >> i'm carl quintanilla. today thousands of layoffs at intel ahead of what most expect will be a brutal end of the year for technology we will talk about the market reaction next. then another public company taken private. vista equity acquires nobi 4 pc sales not enough to deter this optimism at microsoft their head of devices joins us at the bottom of the hour. >> we did ge