nasdaq down about 300. it was amazing i mean, just that brief moment when we were happy about the uk, wasn't it? it was fleeting. >> it was fleeting here we go, though >> make sure you join us tomorrow, every day, right, it's something. >> every hour. >> every hour. "squawk on the street" is next ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber live at the new york stock exchange futures plummet as september's cpi comes in double expectations, 0.6 on shore shelter, medical care, food, all bringing us a new year on year cycle high yields are up. cpi numbers, jim, we talked about how this would run hot, but shelter up 0.7, medical care up 1, food away from home, 0.9

>> rents have gone up. the people who are selling houses have yet to break price come down. food is a factor of geography, where food comes from. not going to come down wages can't come down until we have more layoffs, and there haven't within there's been remarkably few layoffs. we've got the government pouring gasoline -- we got a huge number of jobs they're creating witness the fact that intel could lose jobs in one place, get a subsidy in the other so, i find it, looking at the two-year and digging, what, haven't people seen the momentum to go to 5, 5.25 so, i'm a little aghast that people are aghast. if they actually look at the numbers, the pieces, instead of just looking up top, in other words, if they're rigorous, they would have seen that it was going to be really hot so, what i'm depressed about -- and david, you know this if you pull the numbers apart, you would have thought it would

have been this hot and by the way, you had a break because the cleveland guardians' president, loretta mester, told you this, and she's doing the -- someone was saying the board's doing -- i like the board. but she's doing the quality work she identified all these as problems >> the response to this number, service as inflation, x energy, is up. >> of course what's come down in your daily life, what's come down >> used cars have come down but not enough >> can't get one >> but services can tend to be stickier in terms of maintaining that level >> right >> and therefore, there are those in the market today who believe that the fed is going to have to go higher for longer as a result of the services component of this number being higher than had been anticipated. >> ed bastion was on this morning. numbers are great. he's raising numbers well, that's -- what are we

supposed to say? i guess that's going in the right direction? there's nothing going in the right drirection anyone who's gone to the supermarket, which i do, david, i do the shopping, as grim as that is. grim because of the prices and you go, and you buy things, and you say, no, it can't be that you go to walgreens, of course, you can't even buy it. they have a good number but you can't get in because of the key. they don't have enough people. they have to raise the wages there isn't any aspect of your daily life that you see anything coming down except for the 10 to $20 million apartments in new york city. >> all right, but rents are not, because we know you check them every day. >> i check them every day. >> and they continue to go up. higher than they've ever been, and that's around the country. we had that conversation yesterday with willy walker from walker dunlop. rents continue to be strong. again, we're seeing the reaction today. there's the nasdaq >> my wife just bought a place, okay >> see the ten-year. the dollar is going higher

once again, we're having the same story >> my wife just bought a place >> that's great. >> already rented. nice return. >> how is that possible? >> although, red fin's out this morning saying rents are growing half as much as they were six months ago, still 9. >> if you own an apartment and you're renting it, you're killing it what you want to do is have my wife lose money the moment she bought the apartment that's what's supposed to happen jay powell wants your house down, what you buy down, bitcoin down, your portfolio down, and your spirits down. and your wages down. so far, he's only winning on spirits, and i'm not talking about alcohol, which is way up, david. >> you would know. >> i sure do i see the prices it's incredible. >> sign a lot of those bottles >> people pay for, like, the bond, the colgen, they're paying $900 for bottled wine that was $600, you know, two weeks ago. >> all right, jim, so you were

despondent yesterday after the ppi number >> what am i supposed to do? >> i would assume there's no real change in your -- >> not after the phillies lost, no >> so, we just keep moving lower. by the way, i would point out, you know, people say, well, we need a panic low, but ga lot of equity players are very lightly positioned they've got hedges on. they haven't been taking risk for quite some time. so, no panic it's just this very methodical move lower >> but there are things that shouldn't go lower because some of the raw costs -- there was an upgrade of colgate today, and almost everything that goes into a tube of toothpaste, all the commodities are coming down. the problem, of course, is you're not going to pay less for the toothpaste unless you put yourself in one of those amazon things where it just comes every month whether you want it or not >> i'm glad you brought up the upgrades because there's jpm upping colgate, b of a upping

las vegas sands. citi upping comcast. a lot of analysts are saying the story has not changed as much as the past >> the meta upgrade, top pick, i mean, i don't even think meta agrees i think if you call them and said -- or at least my interactions with them, which are basically, we'd love to help you, get lost. that's not encouraging they'll say, no, jim, we sent you that so-and-so said that meta is doing well the fact is, i thought that some of the -- i mean, you look at pepsico. pepsico happened yesterday people made money on pepsico, because everyone was so negative, and yet everything that goes into a frito, including the fewer -- everything that goes into frito is good. they're all coming down. >> we talk about this. these commodity costs keep coming down. >> i'm presenting opportunity. i think there's opportunity. you know what, david, there's a bull market everywhere >> cpi was 0.4% and services

inflation is going nutso >> yeah, well, that's why the fed is doing what it's doing >> right >> what's it supposed to do? jump off a building? >> where's your terminal rate now? when do we get there and how do we stay? >> you sound like these people who come on tv >> fed is now pricing in 4.85 for march. i assume you don't think that's high enough. >> no, definitely not. >> got to be about 5 >> the two-year is going to signal it. the two-year is signaling about 6. it's bad >> six >> yeah. that's the way i look at it from 1990 to 1991 >> there's a one in five chance today of 100 basis points next month. >> why not i trade most of my life. i was trading the 30-year at '78. go back to that. a lot of money was made. some of the greatest gains in stock market history >> we had the dot com boom >> well, we don't want that. >> i didn't mind it on the way up >> i know, you were wearing that nasdaq 60,000 hat.

i remember you in that look, i just -- i'm not being sanguine, but i'm also not being to the point where i say the world's over i think that there are situations, like today, this morning, we had a lot of people say, it's the bottom in the semiconductor capital equipment. i think those stocks have 40% to 50% decline coming >> from here >> yeah. well, turns out that 40% of the business was china >> yeah. well, there's the china restrictions there's the pc bubble and now today, this tsm capex cut, jim, three months ago, they were looking at as much as $44 billion. now, $36 billion >> i'm giving a talk today for the investment club, and i say, look, the biggest issue is, can you get out and then get back in because something's going to happen to make it so when these get to minus 40, 50, and the president realizes it's not going to be a mild recession, he there will be changes made, but by that point, we'll be well on the way. remember when people in 2007,

2009, they went back with their parents, moved to the basement >> what do you think's more important, averting a recession or locking china out of the a.i. boom for the next 20 years >> locking china out i don't want to lose a world war. that would be bad. as it is, we're playing for a tie in russia with ukraine we're playing for a tie. jake sullivan wants a tie. i don't know he wants a tie i don't think he wants us to go into overtime. jake sullivan. you ever see -- >> i know who he is. >> you got to be careful >> let's not give them the best stuff. they're acting like the president's a comedian he was a comedian. >> that's zelenskyy, yes >> he's not a comedian anymore >> understood. no, he's not he certainly doesn't want a tie. >> he doesn't want a tie >> well, that's part of the overlay. you're not just dealing with inflation in these markets you're dealing with concern about energy supplies in europe. by the way, you're dealing with

illiquidity in the bond market in the uk. >> you see blackrock's numbers >> nonetheless, can cause issues there's always that possibility of a tactical nuclear weapon being used so, it is a difficult time to be an investor in these markets >> thermonuclear war, i'm not going to think much about cloud theory being down 3 bucks. >> you may not >> i'm trying to be a little more matter of fact than other people the number came in hot because it was supposed to the fed's doing everything it can to cool these down higher interest rates doesn't really work for food it takes a little while for wages. in the meantime, congress spent a fortune trying to make it so you could have a job if you get laid off, but no one's getting laid off, so it's just a time to go by dutch bros >> tractor supply? >> ulta. >> it's not really the time to be buying much of anything >> no, it isn't. but maybe tomorrow >> what's an appropriate multiple now based on today? >> 15. >> is it 15, or should we be moving even lower?

>> maybe >> if we get to a two-year that's 6%. >> i'm not saying those who enter have no hope remember, like, in that great exhibit at disneyworld, which nobody goes to anymore because i've seen that stock in '93. we have the haunted house. >> it's a mansion. >> i'm not being facetious i'm saying, who the hell thought these numbers were going to be good did they do any work did they speak to anybody at toll brothers, in the apartment business did they speak to anybody? who'd you speak to >> to your point, 15, morgan stanley's $212 next year that's 31.80 does that make sense to you? >> absolutely. >> so, the lower bound of the three is on the s&p. >> but these numbers, unless the fed gets this under control, it's going to stay that way. and you know, there's going to be opportunities when it gets there, you may have to just -- >> you let me know when you look at those daily rent rolls when things change and turn >> i check them, as opposed to the people who are 30,000 feet, that makes no sense.

they are armchair generals they are like the generals in paths of glory who sent kirk douglas to his death remember those guys? they were just -- >> you're coming to the quick. >> i think people should go watch "paths of glory" and realize that's who these people are. they're up here. they're not in the trenches. >> are you looking across metropolitan areas in the country? >> no, i'm only looking in queens yes, i'm looking across the country. if you get up at the time i do and you go to bed at the time i do, it's so you can figure this stuff out. and i make a lot of calls, and everyone's saying the same thing. >> when you text me at 3:00 in the morning, things have turned, will you let me know >> i'm happy to do that. >> thank you >> i used to text the secretary of the treasury at 4:30 in the morning. >> you've always said you're not going to be able to time the exact bottom >> no, which is why, if you just have some cash and you wait, the fed does win i mean, one day, loretta mester, the cleveland guardians, they're

not as bad as i thought. she's going to come out and say, we're starting to accomplish some things, and maybe the long bond at that point will be the 30-year like the old days and it will be at 7, and mortgage rates will be at 9%, all of which are possible and people will realize, you know what? i got to sell my house these are things that happened in the '90s. they happened. they happened in the '80s, so why shouldn't they happen now? we had a real good run there's a good 30-year fix you know what? it's still good. you can get 9% increase in rents. i got to tell you, you can borrow against treasuries. you can rent things out. i mean -- >> yeah, you can, but if you're a landlord, borrowing -- >> which i am. i locked in everything >> if you are or you've been going on the short end of the curve because the money's been so good, then, by the way, these rent increases are just making up what you're paying interest increases. >> i have cash and i'm going to buy every one of their places. that's what i do >> i don't think you're going to be able to walk out of here

tonight without a mob attacking you, saying stuff like that. >> on twitter, they're angry, because i said that bbb -- >> you're the monopoly guy when you walk out >> i told those people, hang on. >> i'm buying all your houses. >> ryan didn't jump ship he was never in kohl's >> ryan cohen? what how did we get on him and kohl's >> i'm being attacked a little bit on twitter, so i come back and i take on everyone, because i have more energy than they do. and they're losers and i'm a winner there. >> is that your afternofirmatio today? >> have some cash. let it come down it's okay. it's going to be like other debt cases. not this decade. and the last decade. it's going to be like the '90s and the '80s when most of our viewers, well, no, the big trigger pullers, they weren't even in pull-ups >> that's true >> and if they were, they were probably in huggies.

and now they're in depends they've switched they have switched >> speaking of switching, i think a lot of people are switching us off right now >> will you stop i'm trying to calm us down, and what do you do you scare people >> stir the pot. >> i scare people? >> i'm looking at the cpi. i'm looking at the make-up of the cpi, and i said that every one of those was going up. i said, it wasn't work from home i said it was wages, food, and housing. and they're all going the wrong way. and jay powell, who is an inveterate listener and never misses the show, keep up the good work. you're going to get there. and the cleveland guardian -- >> loretta mester. >> dead right. >> we got a lot more to get to we'll get to the airlines. delta, before the bell, as jim mentioned, with a pretty good outlook for q4 we'll get to walgreens, blackrock, domino's, macy's, kohl's in a minu te

nurse mariyam sabo knows a moment this pure demands a lotion this pure. gold bond pure moisture lotion 24-hour hydration no parabens, dyes, or fragrances gold bond champion your skin want more from your vitamins? get more with nature's bounty. from the first-ever triple action sleep supplement. to daily digestive support. to more wellness solutions every day. get more with nature's bounty.

delta's helping us kick off earnings season again today, getting a boost on fed guidance. ed bastian was on squawk earlier and talked about demand. >> i think the pent-up demand is going to continue. one busy summer isn't going to quench all the demand for travel that we've seen. our planes have been basically 90% or full or more full every day since the 1st of april, and that continues into the fourth quarter as well. >> pretty incredible they do see q4 revenue up 5 to 9

versus q4 of '19, jim. international unit revenue above domestic for the first time post-covid >> the planes are all full they don't have enough planes. there's not enough competition they let the airlines merge. when you go to different cities, you find there's only one, and this is what you get one of the reasons why the justice department is so anxious to not have mergers is because these guys really are, for the most part, monopolists, and they do have fuel issues, so they do raise the price, but of course they're going to go up, because america had been shut down for two years, and everybody -- i mean, i've been to, what, three weddings my daughter's been to six weddings life has been stopped, and now it's on. and a lot of weddings are in places that are very expensive david, how many times have you been to lake como? i've had two lake como wedding invitations. >> that's very nice. i have not been, unfortunately, to lake como >> i didn't go to either one of them >> i still hope so >> america -- people want to get

married, have kids, go see their grandchildren. this is natural. >> yep >> and david, the airlines were all allowed to merge >> true. >> so -- >> there has been a lot of activity over the course of the last, let's call it, decade or more, which does still question whether jetblue and spirit are going to be successful in their attempt to get together. guys, you know, we've talked so much about the return of the "business traveller. carl here, corporate sales increased since the start of the pandemic 80% of 2019 levels >> and then they ask their business contacts, well, are you going to spend as much or more in q4? 90% say, yeah. it's going to stay the same or go up. >> ed was great when he said, my message to executives that are ongoing, the other guy's going, you better get on a plane. now, you can listen to him and say, wow, the cpi's going to be cool or you can realize that part of the cpi is going to be red hot

next month so, accept the fact of what's happening in america we've not gotten control of this yet. >> right the demand is unabated at this point, in terms of air travel. >> and a lot of it has to do with covid and people don't understand that either there's a 74% spike in covid this week, so there's a lot of people who are thinking about looking for jobs, saying, maybe i'll wait a week >> and live on what? >> well -- >> are people still worried about covid? >> oh my god, david, people are really worried about covid >> they are? >> they just don't say it. if you are a compromised individual -- >> david and i are, like, okay >> all right >> where's your -- aren't you back wearing a kn95? >> i put it on, on the subway, sometimes, if it's crowded >> i'm back. >> oftentimes i'm the only person who even -- not many people wearing a mask. i don't think about it during the course of my day for a second anymore >> i think you're -- i think you are not in touch with the great

american -- with a great number of people in america >> it's possible a lot of strange echos from that period in our lives. we'll get cramer's "mad dash," and we'll count down to the opening bell futures, obviously, decidedly red. had a pretty good morning on some of the relief we got in uk gilts before cpi hit and then that's what happened we're back in a minute we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i can't believe they're just sitting up there! sitting on all this cash. if you own a life insurance policy of $100,000 or more, you can sell all or part of it to coventry. even a term policy. for cash, or a combination of cash and coverage, with no future premiums. someone needs to tell them, that they're sitting on a goldmine, and you have no idea! hey, guys!

you're sitting on a goldmine! come on, guys! do you hear that? i don't hear anything anymore. find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. municipal bonds don't usually get the media coverage the stock market does. in fact, most people don't find them all that exciting. but, if you're looking for the potential for consistent income that's federally tax-free, now is an excellent time to consider municipal bonds from hennion & walsh. if you have at least 10,000 dollars to invest, call and talk with one of our bond specialists at 1-800-376-4376. we'll send you our exclusive bond guide free. with details about how bonds can be an important part of your portfolio. hennion & walsh has specialized in fixed income and growth solutions for 30 years and offers high-quality municipal bonds from across the country.

they provide the potential for regular income, are federally tax-free, and have historically low risk. call today to request your free bond guide. 1-800-376-4376 that's 1-800-376-4376. s&p laggards this morning, you'll see some chip names on there, obviously, after the revenue warning and the tsm capex guide, but also some travel, especially in the cruise lines. carnival's going to open down 5.5% our opening bell is a few moments away, and don't forget, you can catch us any time, anywhere, just listen and the

follow our "squawk on the street" opening bell podcast

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing.

hey, want a stock that's up? listen to the "mad dash," because right now, it still looks like walgreens is going to be higher. >> that's a tough call, because it is part of the s&p 500, and those will all be pulled down, but this is a very good example of what i'm looking for. this is a company that's missed numbers, missed numbers, missed numbers. actually, for multiple years and rosalind brewer's come in, she's executing a turn around plan and they've beat numbers. so, is this company as bad as the futures indicate no but i want you to keep this one in mind. this is a major company whose turn around is beginning to take place. so, i say you have to look for anomalies, look for when companies are really doing better things, and say, i want to put that away, file that away, until the selling is over, and walgreens will be one that you want to buy. i thought these numbers were quite good >> of course, we open a minute and a half from now.

the numbers themselves, give us a quick snapshot you said they did beat estimates. >> they're predicting that fiscal '23 will be 4.45 to 4 hadn't 65, and people are looking for 4 p.51. you would say, well, wait a second, that's not a huge beat, but i'm used to company missing by about 40 to 50 cents, and so when you look at the context and you say, quarterly profit of 80 cents, people will looking for 77, this isn't the walgreens i know i would be looking for 65. so, the market's horrible. when you talk to people around here, what do they say listen, today's going to be the biggest down day of the year, whatever and that -- all this is in sync with the fact that the fed has not been able to get things under control. but there are companies that are doing better domino's had a better quarter. d domino's so, file it away don't pay up 16. don't be an idiot. but there are companies that are doing better there you go >> let's get the opening bell here and see what's going to

happen at the big board this morning, the new york islanders celebrating their 50th anniversary season at the nasdaq, it's neurosense therapeutics, developing treatment for neurodegenerative diseases we're going to open with the vicks down >> it could go the other way the vicks should be up along with the decline that should not be happening i don't expect a good day, obviously, but i want to report that the market got very excited about britain, which was, again, we live in america a lot of what i'm saying -- david, i know a lot of what i'm saying sounds very jaded and very, like, wow, he's very matter of fact that we're down 3% this exactly is not necessarily conducive with some of my best thinking but i want to say that when you have expectations and they haven't been reached out --

look, one day, we'll come in and the cpi, again, we're going to say is going to be 10, right and it's going to come in -- we have not adjusted yet to the negativity that's what happens at a bottom. they say, oh my, cpi's going to be ten, and it comes in eight, and you say, what can i buy? oh, walgreens. but it will already be up 15%. >> yeah. walgreens, they did increase their long-term sales targets. jim, as we hang on to 3,500 here, at the open, we got a lot of retail stories. you talked to jeff of macy's last night, got the kohl's story, which david may get into. victoria's secrets with an upside preannounce >> look, that's somewhat an analog to some parts of macy's macy's is having a terrific fall bloomberg, who's doing very well bloomingdale's is doing well they have a new toy floor that i think is going to be good. it's also around the country jeff has cleaned up the balance sheet.

the numbers are better than expected and david, no one cares. and then one day, they will care but you'll be paying 22. you won't be paying 17 now, kohl's, i don't know about, because they have, what is it? what is john dustman calling it? a closet board >> well, i don't -- i mean, i give him credit for at least being persistent >> yeah. >> and consistent. he hasn't been successful. >> no. that's true. and you know, he was very involved with bed bath & beyond, which the apes are in there, i guess. >> it was a disaster >> three for one split except for you didn't get any of the stock. >> correct so, i hasn't gone that well there. >> how's gamestop doing? >> he keeps railing at kohl's. how's what doing >> gamestop. >> i haven't looked at gamestop in quite some time >> kind of positive. did ryan cohen get in, get out in bed bath and do okay? >> yes he did >> there you go. somebody made money. >> he made a lot of money. >> and people follow him right over a cliff >> they did.

he's had a lot of success in a lot of ways. he's a very wealthy man. >> he didn't go over the cliff >> no, he stopped, and a lot of others went. >> let's just understand each other. when you find out that the cpi is not as bad as the higher expectations, then amazon will not be at 106. it will be at 120, and you will say, why didn't i wait and just buy it after things settled down because that's how the market works. and look, i've been around, admittedly, started trading in 1979, and there's a pattern. and the pattern is, people get very excited before they should, and then they get very despondent when they should be excited. it's not that hard it's not >> we do have -- i am curious, jim, even when futures were much higher, bitcoin was not hanging on, and at these levels, if we revisit 18,000, that's going to take you back to, well, 2020, basically. >> well, i think that it's a manipulated security and it will be held at a certain

level in order for it not to be broken when i say it's manipulated, it's not regulated by anyone things are not regulated, they tend to be manipulated >> all true. we got a 30-year that's above 4% for the first time since december of 2013 >> okay. >> we have the dollar stronger you've probably seen the two-year yield, what, 4.44 ten-year hit 4% this morning there's the 30-year backing off a bit from the 4%. there's the two-year, 4.5%, and as we've been saying, session after session, this in many ways dictates market action you see that yield up dramatically, you can bet that the market is down in this case, both are dramatic, decline and advance in yield the s&p down over 2% now 26.5% loss for the year. the nasdaq, down 35% for this year, and yet, we sit and talk about, as long as these inflation prints continue to be higher than many or at least

hoping they will, the fed is going to be persistent once again, kind of like john dusken and kohl's sort of persistent but not necessarily accomplishing much >> well, it's going to take a little while i mean, remember, if intel lays off a couple thousands, intel will have a couple thousand new people in ohio they kind of do. that's kind of the de facto deal but again, i come in saying, one day, they'll win but they haven't won yet and by the way, if you parse what they say, they always say the same thing, which is, we haven't won yet. things are getting -- are still hot. again, it's the -- kind of like captain obvious here >> yeah. we had blackrock numbers i don't know if we even got to them they were better than expectations, but as you might imagine, being the largest money manager in the world, i mean, at one point, having almost $10 trillion, now down to about $8 trillion, obviously, some of that lost in the market, right it's not people pulling. >> the numbers were great. >> the numbers were better than

anticipated. >> 4% yield pretty soon. stocks almost down he's going to break .500 there's one that's interesting >> also, earlier this week, had the treasurer of south carolina on remember, there are a handful of states, republican-led states, typically, that are pulling money, although it doesn't really amount to much. blackrock and mr. fink did respond yesterday. he said, facts are not important with some subgroups in this country. i'm now being attacked equally by the left and the right, so i'm doing something right, i hope i don't know it's painful, but you know what? we're moving forward >> well, i mean, now, i know that the south carolina treasurer was saying that this is hurting minorities, that he's doing that first of all, there are people who want these funds, but second, the best-performing stocks of the quarter were constellation energy and end phase. constellation energy is almost no fossil fuels, and phase is a way to charge your car so if you did go esg, you

crushed it so i don't know who is saying that it's bad it h >> the treasurer was not focused as much on the "e" as he was on the "s" and the "g." >> i'm talking about the "p" and "l." >> he used the word, global eleets but blackrock going to be dealing with this for quite some time this is only, frankly, beginning. it's nowhere near ending guys, looking at my screen, not a lot of green our parent company, amazingly enough, is up, comcast shares on that upgrade that carl mentioned earlier. twitter shares, also up ever so slightly >> i want to correct myself, by the way. >> sorry >> someone who uses the term global elites will rebel that i said anti-semitic. i'm just quoting certain countries, parties that took 33% in a january 1933 election who used the same term >> it can occasionally be used in that way, as code twitter. let's get to that if we can, briefly. haven't talked a bit about it. we're two weeks away roughly. the 28th, today's the 13th

13 days. ex math haven't heard much, and that's good remember, of course, you know, the continued concern is, elon musk is going to pull something at the last minute just not what i'm picking up apparently, you know, the details that both sides are going through, still in court, for example, going well. seem to be cooperating checks with the banks indicate that they are not just, as i reported endlessly last week, confident that, of course they're going to fund. but that they don't think they're going to lose as much money as everybody in the market continues to talk about. there is not a plan at this point as i understand it to market the debt. in other words, to syndicate it further. it will hold for a while within the syndicate that already has, obviously, stepped up to the $13 billion. the caps, i'm told, are fairly wide, and so, you know, those who are saying, oh, they're going to lose more money in the citrix deal, they don't believe that by the way, twitter will start

life as a private company with $5 billion in cash you've got all that equity ahead of you it may not prove nearly as difficult a credit to sell as some speculate not to mention if you're one of those banks, you're going to get treated well by musk potentially in the future, particularly when you think about the possibility of a spacex coming public. imagine the fees there so, that seems good. and then, just in general, the conversation around it we'll see. we'll get closer 15 days to go. but so far, it does appear he's on track to close. >> okay. do you think he'll let -- what's his word on trump coming back in >> no, i don't know. >> that's hard to figure out >> but, i mean, as we get closer, prepare for a -- you're no longer going to see it on your screen, but it still will be obviously a force within the conversation >> they just developed a new function where you really can block people who curse you i just signed up for it yesterday.

i mean, we've been waiting for this for a long time they're doing a lot of things. he's going to get twitter as best as twitter can be got to give him that >> well, dwac is up almost 18% this morning as it goes on to google play. now that they've agreed to abide by the content moderation rules. certainly, musk has not had great things to say about truth social, calls it a right-wing echo chamber and ostensibly his hope for twitter is for it to be more broad than that >> he's going to have to figure something out. >> he's going to have to >> he's got a lot of -- you know, a good amount of his net worth in there you mentioned a spac dwac is one. i wanted to come back to spacs for a moment did you see -- did you see cha charlie? he has that spac and now he wants to use it to potentially acquire one of the businesses out of dish? not really an arms-length transaction. there is mr. ergen, of course. but basically, at least alerting us via filing this is something

they're considering, that is, the spac considering acquiring the retail wireless business of dish that stock continues to be down. might help him on a funding side a little bit, right? it's a billion dollar spac except, who knows what the -- how many people will redeem, so whether there will be any actual money there if they do move forward with that transaction. and obviously, it's his spac acquiring a company from his company. >> what do you think of that >> little tricky but you know, overall, this has become a small cap company this used to be a 40 to $50 billion market cap it's now 7 and there's a big funding gap. in the last earnings call, asked about it, ergen indicated, $10 billion sounds about right, trying to roll out a nationwide 5g network is not cheap. they got a billion and a half maturity coming up, but they got to raise a lot more money than that, so that continues to be a key question in this market, not so easy. >> david, you had me, i guess, a friar's club thing you were

doing. i looked at the charter balance sheet. $88 billion in debt. that's like what freedonia had before it collapsed. by the way, i found a spac that is good, and i have actually used the product inscessantly. it's a roll-up of bowling a alleys you don't bowl, probably >> i do. >> 80 million people bowl. this thing's a spac. it's a 12. it's doing very well it's buying back stock i mean, i don't know i thought it was a pretty good idea >> we had the ceo on >> how was it? she? >> you don't remember? >> i don't remember anything but i do remember this i remember my documentary on exxonmobil i remember learning a great deal >> i love that documentary >> "house of cards." and i mention all of this because, yesterday, exxonmobil

announced an interesting transaction with cf industries, where they are going to be acting as the unit that captures the carbon and sequestrates it for cf as much as two million tons a year of carbon. had a chance to sit down with the head of low carbon solutions at exxonmobil. when we did the documentary, it was a guy named joe. >> this is different from buying a company. >> correct this is exxon coming in and saying, hey, we can do your carbon capture for you, and this is going to be additive for us and for you. he explained it. take a listen. >> so, we're taking two million tons a year of carbon dioxide emissions out of kcf's facility in louisiana we're capturing that so it doesn't go into the atmosphere and then we're transporting and storing it permanently in geologic storage, so that is a huge reduction in emissions. it's equivalent to changing

about 700,000 gas-powered cars into evs and that's about how many evs are being sold year to date in the united states, so out of one project, one facility, we're having that kind of a missions impact >> is this the first sign of low-carbon solutions becoming sort of a profit-making part of the company with an actual return on the capital that you guys are investing >> yeah, exactly this is the first time that we're taking all of the capabilities that exist inside of exxonmobil and taking those to help a third party company to decarbonize their operations, and it is the first revenue on contract for our new low-carbon business, so it's an exciting day for us >> of course, that's one of the key questions, you know, is low-carbon solutions really going to have a return remember, they're spending $15 billion through 2027 is what the capital spending that exxon is using towards low-carbon solutions, run by mr. ammann, used to run the cruise division

at gm, people may recall >> he was let go there >> yeah. he believes -- and i'll let him say it -- that they are on the right track. take a listen. >> this project, i think, acts as confirmation to us that we're on the right track, that this opportunity representeds a huge growth potential for the company and the industry, and it's a business that can generate good returns. >> this seems to be -- is this going to be one in a series of separate transactions involving companies that want carbon sequestration services >> yeah, absolutely. we have a very big backlog of similar kind of projects that we're working on we're seeing interest in the space really pick up, even just in the short time that i have been with the company. the passage of the inflation reduction act has acted as a further catalyst we're seeing interest from companies across a whole range of industries. >> you have any questions about carbon capture or anything else?

we did a documentary >> but that was unbelievable >> it's on peacock, still as relevant today as it was when we aired it in june >> they want to buy danbry >> i asked him about that. jim, you're always on it there was a report earlier this week that exxon was interested it's got the largest pipeline network of co2, and he would not comment on that, but he did say they are going to continue to obviously invest because it's not just sequestering -- or excuse me, capturing the carbon and then sequestering it you've got to transport it and you need a transport network in this case, they're using a third party company, but it does lend credence, at least, to the idea that a danbry would have of interest to exxon. >> if you're an environmentalist, this is so good remember when exxon was being criticized that they were not doing anything in carbon

capture? this is extraordinary. these things just happen every day, and we overlook them, we say, well, exxon's really not doing anything this is major. if everybody did this, if the chinese were to do it, for heh heaven's sake, this is how you save the planet, and i think david's right to focus on this, focus on the fact that the market's down every day, or we can try and focus on other things that are happening. >> you can also add mike worth in the ft talking about how you can't just move from exhibit a to exhibit b, and the "times" talking more about venezuela matching what the "journal" said a couple days ago. that would add maybe a hundred thousand barrels a day >> i know that larry fink has been criticized by people who say that he's the reason why oil goes up. that's incredibly wrong. he actually is on the same page as mike wirth on this particular issue. he wants to go brown to green, but he's attacked by not being green enough he's attacked by not being brown enough, and therefore, yes, he is correct

that was a fit of pique from mike >> i know. surprising >> i reached out to him immediately. go ahead, say it >> what? >> i reached out to him immediately. >> i reached out to him immediate. >> and what happened >> nothing every day i'm going to list the people who don't call me back. you know who didn't call me back today? that way, you know what? i think people will start calling me back. >> welcome to my world >> no, thank you >> that's all they do, not call you back >> really? >> i'm still waiting for that guy -- yeah. musk's lawyer. he's the number one guy who doesn't call me back >> you don't call me back. remember the guy from goldman, the guy who was the ir he told me he was going to sue me for what i said and i gave him my lawyer's phone number i said, he's fantastic, give him a jingle he called me >> speaking of the banks, we're going to get a few tomorrow.

i do want to ask you what the set-up is there, especially given this downgrade of amex today. >> i like the set-up, it's just that i think they're all going to have to say, we're probably going to have to take some reserves, but they're doing incredibly well. i think this set-up is uniquely good for them, in terms of coming into the quarter. because it's very hard for them to say anything as bad as how people feel. that's good. >> you don't think there's anything they could say that would spook us more? >> no, i think this is all part of the same, listen, the fed's raising quickly, we do expect there will be some sort of recession, and people say, you're not supposed to on the banks for recession, but they'll realize 1990, 1992, with the same yield curve, actually better >> bank of america is up >> they're making fortunes because how much are they paying you on your checking account >> it's 0.001, i think >> and what are they investing at it?

4.5. that's a good vig. >> are they putting out a lot of capital? i don't know >> they're steady earners like ralphie. >> they are. although, as we pointed out many times, jm morgan on earnings, i can't remember the last time it perform well >> he's terrible on the call >> disappointed or exceeded expectations

- 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. michael is back. and he's more dangerous.

maybe the only way he can die... is if i die too. [ screaming ]

♪ ♪ we all need a rock we can rely on. to be strong. to overcome anything. ♪ ♪ to be... unstoppable. that's why the world's largest companies and over 30 million people rely on prudential's retirement and workplace benefits. who's your rock? ♪ ♪ reconnecting to opportunityment is just part of the hustle.

♪ ♪ opportunity is using data to create a competitive advantage. ♪ ♪ it's raising capital that helps companies change the world. it's making complicated financial concepts seem simple. opportunity is making the dream of home ownership a reality... ♪ ♪ ...writing new rules and redefining the game... ...and driving the world forward to a greener energy future. (applause) ♪ ♪ opportunity is setting a goal... ...and charting a course to get there. sometimes the only thing standing between you and opportunity... ...is someone who can make the connection. at ice, we connect people to opportunity.

rules that will restrict exports to high-end china. our parent company is called comcast. its stock has been down an awful lot today but today it's higher after citi upgrades it to a buy saying the cable sector favors favorable annual cash flow and cable companies promptly will respond to the recent downturn with a plan to stabilize or improve value for shareholders that means absolutely nothing. but it seems to be having a positive impact on the stock sfi finally, let's end with walgreens. the company did report a beat on the top and bottom lines also raising full-year outlook as rosswell continues to operate a bit of a turn around. let's begin with the inflation data cpi did top expectations and send markets sharply lower, treasuries higher. our senior economics reporter steve liesman joins us with more color as we did get the ten-year

back below 4. >> carl, you want color. i'll tell you some words i'm getting from exists. brutal, terrible and acutely disappointing, this inflation report raising questions about whether the fed rate hikes are working and whether they have to do a lot more to start to bring down inflation the disappointing or acutely disappointing or brutally terrible numbers i'm talking about. 0.4 on the cpi head lip. we were looking for 0.3. instead of ticking down, there was uptick core cpi up 0.6. this was expected to rise. again, a higher benchmark from the revisions. 6.5 goes to 6.6. not getting any help you can't start counting when the fed is going to start pivoting or thinking about reducing its pace of rate hikes. now up on a contract high in terms of expectations for fed rate hikes near above 490. well done in the back there.

4.91 we went into this number, the april 23 peak funds rate contract had been 4.66 another 30 basis points being dialed in for next year. where were the inflation hot spots? in the services sector utility gas prices up 2.9% transportation services with a rise in airline fares, medical care services, food away from home, your restaurants and new vehicles, unexpectedly going up while used vehicle prices went down and had gone down at auction. here's the key i think the fed is looking at. you did have a decline in commodity goods prices there's the service prices not coming down at all, still being relatively high in that regard david, we keep trying to count, one, two, three months of inflation, improvement we had one month in july, went back to zero in august and this is back to zero, even negative one and trying to count three months of improvement. the fed is a long way from what it wants to ease off from the

pace and far less, pivot and pause. >> hold it right there let's turn to britain for steve. steve sedgwick has more for us >> really good to see you and good to hear what steve had to say as well. we have all that you've got in the u.s. in terms of commodity prices, cpi issues across the board but we have extra crises in london. we would like to go one better here as well we have a pension crisis caused by the gilt market falling aggressively and that's caused concerns about the strength of the financial industry we've got a political crisis as well we have the ruling conservative party 30 points behind in the polls. we have a prime minister who is already after only about 30 days on the job trying to cling onto her job. as indeed her chancellor, key treasury official who said to our sister channel in the last few moments, i'm going nowhere

i'm going to concentrate on my pro-growth strategy, i'll give you a budget on the 31st of october, and they haven't got confidence at the moment the pound is under pressure, the gilt is under pressure, the ftse 100 trading at multi-year lows because we have a pension crisis, a political crisis and we have a central bank which has said we have a cliff edge coming tomorrow on the gilt purchases to proper up the gilt market there's a game of chicken going on you've almost got a game of chicken where the central bank is saying, this is a political problem as well and the politicians are saying, it's all up to the governor and bank of england who steady markets and gilt pension problems, political problems and at a time when we need confidence in the markets, you have a central bank that appears to be totally at odds with the politicians as well it's not a pretty picture here in london, carl.

>> steve, it's david steve sedgwick, what are the expectations tomorrow when this ends in terms of have the pension funds been stabilized, have they done the selling they need to do >> they're selling, as you know fully well, is because of some of the strategies, which they've had hedges on. at a time when gilt yields are at multi-year high 30-year paper is 4.55. has been as high as 5% so, at long last they have a decent yield on gilt they should be buying this but they are selling it because of margin calls real potential problems across the board come tomorrow. i heard the bank of england governor say, it ends tomorrow i thought he might have spoken to the financial industry and got their nod saying, we're okay we will not need do any more selling.

have we got a cliff edge tomorrow no one seems to know whilst the bank of england is turning around saying, look, we'll support the market if there is more oscillation. at the same time they're saying, this is all about what the politicians are doing and it's about that unfunded 44 billion pound budget which we still haven't had clarity on from independent office budget responsibility about whether it it responded or not. it is a bit of a mess. this cliff edge could well be really clear and live this time tomorrow >> we're waiting to see what happens once the chancellor gets back from d.c. a lot of chatter tomorrow. pimco among them saying uk is unlikely the only source of -- rising rates. >> we could do with sedgwick getting the act together and markets on the same page it's going to be an interesting morning tomorrow morning when we

wake up to see whether or not the pension funds have heeded the warning of the central banker when he said, you know, you have three days to get your act together that was yesterday and tomorrow is the last day but you're right, carl, if there is a reason for the fed to go more slowly, it's the possibility of an accident there are some very sharp curves ahead on the u.s. economy. this morning the inflation number is telling the fed to go faster and harder here these are very complicated times where you have this tension between the fight against inflation and financial instability. the bank of england made an interesting choice a couple of weeks ago where it said financial instability trumps the fight against inflation so it put quantitative tightening aside. we are not near a situation

where that will happen in the states the reports we're getting, spotty illiquidities in the market but not a broader, systematic rich issue. you have a fed historically raising rates. i will tell you, carl, we are now pricing it, i want to make sure i get this right here, another 75-basis point rate hike come december. that had been priced more at 50. we have a 63% chance of another 75 so 150 additional basis points by year end. that's the kind of reason you ask even that question, carl, about financial stability. >> steve, thanks for that. our thanks to steve sedgwick let's bring in allspring global ann melitti and mike pon thank you for being with us. the bounce this morning, the vix lower, is it your sense the cpi

internals are getting a second look in what happened this morning, do you think? >> i do think although the trend was disappointing, not seeing quick enough deceleration in inflation, it doesn't change too much of the outlook. doesn't change what we thought would happen in november as steve liesman pointed out. we're likely to see a bigger impact in the december -- in the december action from the fed so, that might be disappointing. i think investors certainly our investment teams have much anticipated that the fed is going to do some really hard work and focus on what they need to do to fight inflation, even at the expense of the economy. so multiple compression has been really big, about 30 we are starting to see that earnings estimate come down. i think 15 of the last 16 weeks. we're seeing it again this morning. a lot of the work is already

being priced into the market so, seeing a small bounce after the negative print isn't that shocking >> mike, it sounds like you think the market is pricing in maybe too much inflation next year, but not enough over the longer term. >> that's right. the market is priced for around 3% inflation as we look into next year. on a forward-looking basis but then at the curve it's only pricing in levels that are barely consistent with the fed's forecast from the downside we think that the disinflation risk from an overshoot from the fed, from the move of the dollar, from lower transportation costs, lower commodity prices, runs the risk of too low inflation next year but the structural factors in the market, such as deglobalization,ing energy costs raise structural inflation pressures which we don't think the market is pricing in >> let me follow up on that given you're the head of global

inflation linked research. what about the services component here up 0.8%, seems to be giving a number of people real pause i'm curious to get your reaction to it. and whether, in fact, it does given services inflation can prove stickier over time, the fed perhaps goes higher longer >> clearly we're seeing that long shift from consumer buying of goods to services goods priced inflation was zero in today's print but services was much stronger, at 0.8. a lot of that was shelter. shelter, as we all know, is a lagging indicator of what's going on in the rental market by about nine months. that doesn't matter. the fed is focused on realized inflation data not forward-looking as it used to be because they were humbled by their inflation forecast over the past year. we think this print and the prints to come, because shelter tends to be sticky, will continue to drive the fed higher we just changed our call today

to stick with 75 basis points in november, but with that 75 basis points again in december followed up by another rise of 50 basis points in february. >>. >> finally, ann, once we start getting earnings, we'll be watching expense guidance. certainly top line you think cash flow is going to take a certain stage in ways it hasn't in recent quarters? >> i absolutely do i do think free cash flow is the thing investors should focus on. it does signal what direction the balance sheet is going balance sheets are going to be a premium with the cost of capital rising what you want as an investor is to see flexibility companies that can control their own destination going forward. i do think in this now paradigm shift we are seeing, you're going to see more bankruptcies going forward. you're also going to see a lot of winners companies that can really do

well in a new environment but there's going to be a wide separation that's what our active teams are doing. looking for those companies that can outperform a new environment. >> kind of points to some of the upgrades we got on at least a difficult open today mike, ann, thanks, guys. great to see you both. appreciate it. as we take you to a quick break, here is a road map for the rest of the hour, including what to expect when the major banks report their earnings starting tomorrow. as high inflation remains, what is the impact for those who rent more on when, if at all, rent relief may be coming. travel demand is very strong we'll hear what the ceo of delta tells cnbc this morning about the upcoming holiday travel season

millions have made the switch from the big three to the best kept secret in wireless: xfinity mobile. that means millions are saving hundreds a year with the fastest mobile service. and now, introducing, the best price for two lines of unlimited. just $30 per line.

there are millions of happy campers out there. and this is the perfect time to join them... see how easy it is to save hundreds a year on your wireless bill over t-mobile, verizon, and at&t. talk to our switch squad at your local xfinity store today.

welcome back at the vanguard vcr. it's getting hit harder than the broader market by over 800 basis points since the beginning of 2022 domino's recording losses greater than the vcr this year that is the stock, up 9% this morning. why? domino's reported a mixed third quarter but it did have same store sales that rose 2% the company also saying that it's rising cost due to food inflation could be easing. got a slew of bank earnings

coming tomorrow. we'll discuss how you might want to play some of those names going into the print that's coming up next as the s&p is up almost 60 points from the opening low. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. - [narrator] if your business kept on employees through the pandemic, getrefunds.com can qualify you for a payroll tax refund of up to $26,000 per employee, even if you got ppp. and all it takes is eight minutes to find out. then we'll work with you to fill out your forms

and submit the application. that easy. getrefunds.com has helped businesses like yours claim over $1 billion in payroll tax refunds. but it's only available for a limited time. go to getrefunds.com powered by innovation refunds. the new iphone 14 pro is amazing. the camera is incredible. and you'll get our best deal. nice, but i can't accept it. unless every business gets the best deal. on every iphone. uh, actually... we already do that. the plumber with the ascot!

big bjorn, little bjorn, too! the caterer who really cares. every business should get the deal! we make a good team. every business gets at&t's best deals on every iphone. including up to $800 off iphone 14 pro. (♪ ♪)

we have earnings season open, and kicks in tomorrow with jp, wells. lesscy picker has more on what we might expect over the next few days good morning. >> good morning, carl. as ubs said in a recent note, macro is as dominant as it's ever been leading into bank earnings this quarter. the sector was trading firmly higher pre-market. when the data came out, slipped into the red and now they're mixed but largely outperforming the s&p. you can see the biggest banks there very much outperforming the s&p. now, banks have been whipsawed by econ data with the notion they could provide relative

value, particularly in a hawkish monetary environment looming economy has outweighed investors won't be able to really feel comfortable shares have bottomed into the banks themselves have fully priced in a recession. that's what banks will be focused on when six of the largest firms report tomorrow morning. they'll be looking for specifically downward credit as signals that, quote, more cathartic moment has arrived in order to be an entry point to buy those shares, according to ubs. other analysts including those at raymond james believe forward-looking commentary will be the key here, especially on deposit flows, credit and expenses now, analyst estimates pulled by bloomberg show the six largest banks will provision about 4$4.5 billion combined during the

third quarter, in a row, actually, for loan loss provision. we'll see where it squares with the c-suite commentary, including jamie dimon telling cnbc earlier this week that the u.s. could tip into a recession in six to nine months. >> leslie, thank you let's get more on the upcoming bank earnings season. cfo of wkbw. leslie brings up a lot of things we'll be looking at. let's start with tangible capital levels they may be under some pressure given the drop in bond prices. >> so, let's - >> is that going to be a theme at all >> yes leslie ticked on the two boxes we think will get checked. we think we're in the second of four quarters of 20% increase in growth in net interest income. that's about as strong as i've seen it in my career for the regional bank, lots of

revenue growth the two new things that we think investors are going to be focused on are capital levels because all these bonds the banks own get marked to the capital line you're going to see the industry levering itself. one, as an enumerator, we have positive to the tune of $3 trillion because of covid and the relief i've never seen anything like it in my career so, these deposits are going to be leaving the system as market rates become more competitive. so, that's going to be the second question that investors have, which is we're going to see a lot of big banks show deposits shrinking, which is not something that usually happens it's something everyone should get ready for. jpmorgan said earlier this year, they think they could lose $400 billion over the next year, which in and of itself would be the nation's tenth largest bank. those are the two themes if you look at this tangible

common equity asset ratio we'll be as levered probably at the end of this quarter as we were at the end of 2007. >> so, we've got the positives that you also mentioned. the net interest margin, net interest income growth we're talking about, as we watch rates continue to skyrocket. what's going to win out in the market when we start hearing these numbers? >> i think the first thing is, what's happening in the industry is the spring's getting a little more coiled. so, if you are an individual who has a really bare case of what's going to happen and we introduce a big credit recession to the banking industry, which is something we don't see happening right now. if you believe in the tail risk, you could start to see things like capital raises and steps like that, which would probably protect more of the bearish narrative to it. that's not what we have in our models and we think there are pockets in the industry where actually the environment is very much okay and the stocks more than

reflect what may happen. so, our view is the story of this quarter is that we think the history books are going to say, this is the quarter where the spring got a little tighter in terms of balance sheet leverage we're going to need to know in the next six to nine months what happens to credit as to how things play out. >> where's the line between natural shrinkage and deposits because people running off their covid savings and real areas of concern? >> yes noninterest bearing deposits are the crown jewel of banking you'll have the best banks in america are going to grow noninterest bearing deposits and let their rate shopper depositors leave and if you see the headline number, you may get really nervous that deposits just shrunk. >> is loan growth going to be a story and expenses, too?

>> loan growth was the big story of the second quarter where it was close to 20% it's normalizing and it's where you think it would be in a weak economy. we i think it's going to be around 7% and we think it will continue to wane your prior question, the loan-to-deposit ratio. when banks get near 100%, investors get nervous. they like to see core deposits funding loans. we aren't anywhere near there. we've taken a step closer to it with what's happening. >> meanwhile, in near term, i can't remember an earnings season, at least recently, where we had a positive response from the banks regardless of whether they beat, came in line or didn't beat. it seems like the stocks react negatively. >> i'll tell you, the biggy boogie man around banks is credit there's -- and it's those who are living in the tail risk of what may happen believe we're going to get a credit cycle. the surprising thing is how low credit costs have been we're going to get higher credit

costs. we got them in our model i can tell you, this is a different industry than it was during the global financial crisis because we've had the shadow banking industry absorb a lot of this risk we're all focused on subprime consumer lending right now i did a deep dive with our team. a lot of that has left the banking industry it's in specialty finance companies. it was chased out of banks it willing interesting to see how the different parts of financial services plays out in this new environment. >> and obviously, we won't get into investment banking. there we kind of know what the story will be. >> real quick. 55% year over year decline investment banking 2% lean quarter. we upgraded goldman because of that we think it's already in the stock. and we think there are lots of other good places where the overall group, the brush has been painted so broadly, we think there's lots of good ideas. i'll direct your viewers to euro next, our euro and france which our analysts pounded the table

on again today. >> tom, always good to have you you. thank you. as we head to a break, by the way, let's give you a check on taiwan semi they reported an 80% jump in quarterly profit despite warning of weaker demand the u.s. granted taiwan semi a one-year license or waiver to continue to order u.s. equipment for use then in making chips in china. we're back in a minute to adapt in a fast changing world, you could hire a professional pit crew. go, go, go. sorry. nope. okay.

fresh donuts - hot coffee! they deliver real time data and business forecasts when you need it. i think it was fine how it was. (air tool sound) to help you stay ahead of the curve... or you could use workday. the finance, hr and planning system that helps cfos make better decisions faster. on the other hand, we had a great fourth quarter. for a accelerate your decision-making world. workday. for a changing world. pst. girl. you can do better. at least with your big-name wireless carrier. with xfinity mobile you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you hundreds a year on your wireless bill over t-mobile, at&t, and verizon. wow. i can do better! yes you can! i can do better, too! see how easy it is to save hundreds a year on your wireless bill over t-mobile, verizon, and at&t. talk to our switch squad at your local xfinity store today.

your cnbc news update. in connecticut two police officers have been fatally shot while responding to a domestic violence call. a third officer was also shot and is now hospitalized with serious injuries police say the suspected gunman was also falgsly shot and the gunman's brother was shot and wounded. central florida, a sheriff's deputy was shot in the chest overnight but his bullet proof vest saved him from serious injury deputies responding to a family disturbance call they returned fire but the suspect was not hit. that suspect is now in custody

and a ukraine, russian attacks continue across the country. russian shelling collapsed part of a building. rescue workers pulled an 11-year-old boy from the rubble where he had been trapped for six hours. back at home, millions of social security recipients will get an 8.7% increase in benefits next year, the largest fueled by inflation at 40-year highs. trying to repair some opening damage dow is down 181. we got to 3491 on the s&p. currently 3537 meantime, those fed minutes show officials are concerned about doing too little to fight inflation rather than too much joining us, former pimco chief economist at mcdonagh school of business at georgetown good to see you. >> good to see you

mester was satisfying, we can't say inflation has peaked i wonder if you think inflation proves it right. >> this inflation is incredibly sticky it's moved from the goods to the services side. and the services side is reflecting both pent-up demand for services coming out of the pandemic, as well as an incredibly tight labor market. so, the fed's mission to get inflation down now that it's shifted to the services side is even harder than it was when it was concentrated in the goods side >> i'm thinking back to a few months ago when powell was saying, he was really hammering on the ratio of job openings to unemployed worker. now do you think it's just about outright job loss? >> i think we're getting increasingly to that when i read through the minutes, it's pretty clear they think they've overshot the natural rate of unemployment on the low

side so, i think they actually want to get the unemployment rate up. it's not collateral damage but an objective where it comes down to is they have to keep on keeping on with the tightening monetary policy until the inflation prints cry uncle and the labor market cries uncle. they are effectively operating on a single mandate because they think they've overshot on the low side the natural rate of unemployment >> all right paul, it's david keep on keeping on, what does that mean? where are you in terms of where they end and how long they stay there? >> i don't have a big quarrel with how the marketplace is repriced this morning. before this morning's data, i was thinking in terms of 75 at the next meeting and then they would downgrade to 50 at the following meeting. and i don't have confidence in that forecast anymore. so keeping on keeping on is essentially continuing on the 75

clip until something racks that doesn't necessarily mean the financial system, as we've been hearing chatter about, but in the data, actually the inflation data i think even more importantly, the employment data. >> yeah, i'm wondering, where is the first crack going to be? everybody's looking for it where do you see it? what should we be focusing on? >> i think logic would suggest it would come in the financial markets before it comes in the real economy the real economy is a whole lot more galacial. but i'm in the business of forecasting minski moments, i'm thinking of the inflation data, the real economy, which is why this is going to be a more elongate d tightening cycle

because it takes a while for the fed to beat up on main street whereas wall street can get a telegram and read it. >> he argues he doesn't think the fed is going to change the target to three but there's a strong possibility that a de facto accepts three as an acceptable target and maybe can declare victory from there do you think that's going too far? >> no, i don't in fact, i would be a loud amen to what austin was saying. actually trying to get all the way back down to 2, i think, would be unnecessary they will not announce that now, obviously, because they have a religious devotion to the 2% target, but if they can crack this economy and not have a severe recession and get inflation back down to a 3 handle, i think they would declare victory all day long >> yeah. finally, two things. where does unemployment peak, do you think, and what do you make

of some of the stories that argue brainard, daley, we're getting more variance in commentary is that important and does it get wiped out today? >> it's clearly going to be a 4 handle on the unemployment rate. and i think you have to price in increasing risk of a 5-handle. with respect to the commentary coming in, i think that the vice chair, in particular, recognizes that we're getting close to where we have two-sided risks, that even though they are acting as if they have a single mandate right now, that we're get close to the point they have to pay attention to the fact that they can crack the economy harder than they want to, but more importantly, and they can be careful when they talk about this, they really don't want to crack orderly markets. and i don't think we're there, but that risk is becoming more prominent, i think be, in their

calculation. i think it was wonderful that vice chair brainard has put that into the -- to the conversation. >> yeah. certainly a gut punch today. paul, great to see you we'll talk soon. thank you. >> thank you rising inflation is hitting almost every part of the economy. especially rents diana olick has that part of the story for us >> david, the cpi numbers still show rent growth is accelerating but the issue is the pls has a lag in its data. we have several other reports showing rent growth easing significantly over the past few months due to inflation. landlords don't have the pricing power because tenants are paying so much more for everything else rent in september cooled to the low slowest annual pace in 16 months, according to a report today from realtor.com still up 7.8% from september of last year but it also posted its second month over month decline in eight months, falling further

from its july peak that said, rent is still rising at twice the pace it was in march of 2020 when the pandemic started. redfin is reporting a similar rent slowdown and it points to the record high number of apartments under construction, which could cool rents further this comes after a report last week showing apartment demand has, quote, evaporated in many of the country due to what appears to be a freeze in new household formation. the third quarter is historically a seasonally strong leasing period, but demand actually fell this year, according to real page that's the first time we've seen a third quarter drop in the 30 years since it's been tracking apartments again, this is all apartments. single family rents are also coming down off record high last april. still up 12.6% in july, the latest reading from core logic that is faster than apartments and also due to higher demand and less supply on the single family side. back to you guys >> thank you before we head to a quic break here, i did want to show

shares of albertson's. you may have seen it at the bottom of the screen jim mentioned it, amidst a lot of other things. we got a story from bloomberg maybe 45 minutes or so saying kroger was in talks with albertson's. and i have been able to confirm that is the case kroger is far larger it would be an acquisition of albertson's. this company came public back in 2020 i was looking back at the time there, 2020. i think it was -- they lowered the price to 16. some insiders have been looking to sell of late. these talks, my understanding, have been on and off for months. and they were hoping to get to an announcement as soon as this week don't have any more details at this point i'll step off and make more phone calls. we can confirm that story first reported by bloomberg that kroger has been and continues to be in talks with albertson's

about a purchase don't have price, don't have composition of said offer, only know they had been on and off for months sometimes very difficult to get to the finish line on these deals. >> fascinating as we go to break, let's check the nasdaq obviously, the open was a lot more dramatic than the current decline but it's still about 1.23 on the nasdaq, back to 10,230 we'll have more on what's driving the selling at the top of the hour on "techcheck" and we'll also look at what a drop in stock prices means for potential m&a in about 20 minutes.

- 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.

- 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.

travel prices have come down in repeat months but they still remain way above 2019 levels how is that impacting consumer spending seema mody has some numbers on it. >> let's start with hotels prices continue to drop. september cpi report showing lodging away from home falling 1% month over month. a different story for airfares, though after cooling down a bit,

they're back on the rise up 0.8% month over month and ticket prices are expected to surge ahead of the holidays new data from hopper, domestic airfare tickets for thanksgivinging averaging $290 round trip in line with 2019 levels but 24% higher than last year for christmas, you'll pay $430 on average for a round trip ticket that is up 17% from 2019 levels and 53% higher than last year. there's a new survey from bankrate that tells an interesting story here they found that 79% of americans traveling this holiday season are changing plans due to inflationary concerns. about a quarter are traveling fewer days, so shortening the trip others are engaging in less expensive activities others are saying, all right, we don't have -- we have the airfare. once we get to our destination, let's opt for a more

cost-effective hotel or vacation rental option. the health of the consumer and household budgets look much worse today because it is arguably harder to cut back on essential services that's having an impact on travel airline stocks higher today, but hotels are down, david >> seema, thank you. let's narrow into delta, which reported results this morning. phil lebeau sat down with the ceo of the company earlier this morning and has some highlights for us phil >> david, what we heard from delta this morning is what i think we'll hear from all of the airlines as they report their q3 results and give us an outlook on the fourth quarter. for delta, it doesn't reflect it in the shares today, which are fractionally higher and trading lower on the day this is a company that basically reported in-line results for the fourth quarter 151 a share. a three cent impact from the hurricane. revenue roughly in line with expectations and then when you take a look at the cost component as well as their operating margins,

operating margins stronger than expected and the cost, up 22.5% they expect that to drop in the fourth quarter it's the fourth quarter when you look at the guidance, that's why there is some optimism about the airline stocks not reflected in what the stocks are doing today. delta in the fourth quarter coming out with a buck and buck 20 a share 79 cents going into this morning. revenue is expected to be up 5% to 9%. and then an operating margin of 9% to 11%. when we talked with ed bastian this morning, he made it clear they are not seeing a slowdown in demand. >> i think the pent-up demand is going to continue. one busy summer isn't going to quench all the demand for travel we've seen our planes have been basically 90% full or more full every day since the 1st of april that continues into the fourth quarter as well. >> take a look at the other airline stocks today and how they're trading. it's been a little higher and

then a little lower. basically with the rest of the market is what we're seeing from the airline stocks we hear from american and united next week. as i said, guys, i think we're going to hear the same thing from all of the airlines q3 was strong. q4 is going to be even stronger. guys, back to you. >> phil, david and i had a discussion about corporate this morning as well and bookings don't look to be going down any time soon. are we going to see -- i didn't see a lot this morning in the way of capacity additions. but is that in the offing or not? >> they are adding capacity. they're at about 87, 88% capacity versus where they were pre-pandemic that's the third quarter fourth quarter they expect to be up in the 91% to 92% ed bastian thinks they'll be back at full capacity hopefully by next summer this gets into the issue of hiring, whichthey think they'v done most of the hiring they're going to do. also training. it takes a while to make these crews, you know, go through the training they need to be so you have everything properly fit for who needs to be on what aircraft flying what route.

>> pretty fascinating. we look forward to the other majors printing. big one from delta phil lebeau on delta. we continue to whittle away at opening losses. dow losses fewer than 100 points don't go anywhere. you'll always remember buying your first car. and buying your starter home. or whatever this is. but the things that last a lifetime like happiness, love and confidence... you can't buy those. but you can invest in them. we believe that your investments should work harder for the future you imagine. and that's where our strategic investing approach can help. t. rowe price. invest with confidence.

we planned well for retirement, but i wish we had more cash. they have no idea they're sitting on a goldmine. well they don't realize that if you have a life insurance policy of $100,000 or more, you can sell all or part of it to coventry for cash. even a term policy. we've got to tell them! hey, guys! you're sitting on a goldmine! do you hear that? i don't hear anything anymore. find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

welcome back to squawk on the street stocks remain lower at this hour but we are just off session highs right now. we've moved a little higher. every sector is negative territory or nearly. energy is the lone kind of stand out but consumer discretionary is the worst performer so far today down over 2.5% as investors react to the worse than expected inflation read all of that includes notable declines in some of its largest constituents including names like lowe's and home depot and the home improvement side. also amazon and tesla which hit its lowest level since june of 2021 etsy is the biggest laggard in

the s&p 500 so far today as the e-commerce names fall sharply. watch interest rates watch discretionary trade, david. i'll send it back downtown to you folks at the stock exchange. >> okay. dom, thank you. throughout hispanic heritage month we are celebrating our cnbc team mates and contributors >> reporter: i am a second generation mexican american. i was born in el paso, texas which sits on the u.s./mexican border as a national security reporter for cnbc i bring a different perspective in terms of immigration issues, border security, and the elections that are going to shape our country my advice to young latinos would be to embrace the spirit of our culture which is hard working, vibrant, empathetic and to also keep up with your spanish. the way data trending it will only become more important it is a key. onsp my reoors

- 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. i traded my taxicab for a food truck and a dream. 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. michael's back. and he's more dangerous. he isn't dead. we finish this now. let's go. hello. bob pisani on the floor of the new york stock exchange. we are well off the lows

let me show you the s&p 500. we were below 3500 right after the open we've rallied back now rather noticeably in fact 50, 60 points sitting at the highs for the day. i don't want to kid anybody. it is still a rough day. take a look. energy turned around for example. oil is all over the place 85.5 to 87.5. some of the risk off and on stuff, transportation stocks, metals and mining. down but well off their lows today. i don't want to kid anybody. there's over 900 new lows here at the new york stock exchange about 40% of the nyse including big names like tesla for example, google, alphabet also a 52-week low. applied materials. nvidia many of the semiconductors at 52-week lows but well off the lows we saw right after the open banks will be tomorrow jpmorgan will be reporting 52-week low today for most of the big banks but you see them bouncing here. this is a sign of a little bit of a washout we've had this several times so

people are aware of fake outs but it is nice to see them bouncing off the lows. we had decent earnings comments this morning we had delta with very positive comments overall very upbeat on the current quarter. walgreens raised their long-term sales outlook. black rock's numbers were better than expected. their earnings were better and the bottom line is the assets under management still pretty good price drops affect your assets under management but if you look at black rock they continue to have inflows into the i-shares etf business a massive business that really helps turn them around here. $22 billion in inflows and what happens is your assets under management even if the prices are down 5% quarter over quarter down but still pretty good considering you're getting inflows there. finally i have a lot of questions about the vix this morning, david people were asking me, gee, why is the vix down on such a volatile day at 32 the vix is pricing in at roughly 2, 2.25% quarter move on a daily basis for the s&p 500. that is exactly the move we had.

the move today was not unexpected and not out sized given the fact the vix is way, way up there in terms of volatility back to you. >> bob, thank you. bob pisani wanted to come back to our viewers and give you a little more detail on this potential deal in which kroger is going to require albertsons people close to the situation indicated, talks have been on and off for months but they hope to reach a deal or announcement as soon as tomorrow morning. it is an all cash deal don't know the price only that it is above the current market price of albertsons which you see is up over 7%. this originally on a bloomberg headline of about an hour or so ago saying the two sides had been in talks again as i reported subsequently the talks have been on and off for months now, an all cash bid deal could be announced as soon as tomorrow morning. of course many may wonder isn't there going to be an antitrust issue? these are two of the larger chains in the country.

yes, there might be. it is certainly something that we will have to explore if and when we actually get an announcement of course, we'll see if we even get that tomorrow morning. kroger of course the larger of the two. that'll do it for us for me on "squawk on the street." "techcheck" starts now good thursday morning and welcome to "techcheck. today stocks are falling fast off the cpi print although off the lows as we've said inflation running hotter than expected nasdaq down less than 2% now we'll watch it the white house council of economic advisers chair is going to join us this hour break some of that down. we'll also turn to hardware. consumers and businesses cutting back and we'll take a closer look at the impact for apple in particular finally, we'll speak with the air b & b cfo on the picture for travel demand and how inflation is hitting that sector very busy day and busy