november 1st and 2nd, but they are likely to debate then whether and thousand signal plans to approve a smaller increase in december you have seen the futures come back a little bit, still down by about 148 points for the dow futures, but that signal discussion of a pivot coming from tim, who is kind of seen as like the fed hammer on this stuff, knows what they're thinking on some of these issues, could be something that they'll watch very closely that does it for us today. join us on monday. right now, it's time for kwauk squawk "squawk on the street" good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at the new york stock exchange could this be the sixth straight down friday in a row some uninspiring corporate results not helping the bulls premarket along with is this unrelenting climate yield. options expiration today, dollar index near 114 our road map begins with snap

and their struggles, taking a big hit from online advertising. >> plus, as you just heard carl mention, treasuries are extending what is the longest slump since 1984, the ten-year yield hitting its highest since november of 2007 as for the economy, no slowdown yet. at least amex customer spending is surging, but then there's that loan loss provision which is pressuring shares >> let's begin with snap today, tumbling after the company posted the lowest quarterly rune growth since going public. evan spiegel did address that last night on the earnings call. >> our revenue grew 6% year over year and we generated adjusted ebitda of $73 million and free cash flow of $18 million we were focused on increasing our share of wallet by working to increase the advertising spend as we believe these are the most defensible advertising budgets in a challenged economic

environment. >> jim, i know you called it a joke company a moment ago. not so much a real company >> that was way too kind >> wow >> it's not a business it was a business. there were people who decided that capitalism could reign and you could possibly do an advertising page like the one i'm looking at for espn+ or casper, down with a bunch of joke stock that no one would ever look at, including any 18-year-old and 16-year-old, and it was something that, for an ephemeral moment, was thought to be a way to be in front of eyeballs of people who were trying to figure out colgate versus crest what they didn't realize, really, it was just a messaging system it's like a bad whatsapp so, i think that people who got behind this were fooled and thought that there was an roi, and you can continue to try investing, but look at these pages.

will you look at the darn pages of what you're looking at? it's junk. oh, here's a casper ad the terrific thing about cake, how you make a cake. inside, great body what is this >> i don't know. >> this isn't a business >> well, people thought it was a business >> right, that's the point >> in fact, even a few weeks ago when they gave a mid-quarter update that was actually positive, carl, they thought things were doing okay >> real good handle on a business >> august had accelerated and that -- bernstein yesterday was a head fake. they thought this was going to be another one >> i'm going to be out there i have met evan spiegel. incredibly nice. >> oh, boy here we go >> incredibly nice >> he gets an incredibly nice. >> i got a selfie with him >> i remember when we met with him before the company went public >> he did it he tried a lot of big companies tried to get involved, thought they really had something, and what they didn't do -- what they didn't do was look at the damn

product. had they looked at the product, i think they would say, wait a second, what is the roi for casper in this ad? and the answer is, go to amazon. listen to mueller. listen to mueller at procter & gamble he's not putting -- he's not advertising tide >> all right >> what? >> the read through to meta. >> no. >> all right, i'm glad we dealt with that. >> okay, next issue. >> carl? >> if meta screws up, i'm not going to work that day >> meta has ten million advertisers as opposed to snap, which doesn't have anything close to resembling that >> the casper ad, look at that you can -- i can get a bed are you kidding me what is an 18-year-old -- the 18-year-olds use it so you can't see it if they're your kids. that's a business. but everybody had decided they could cash in. >> the irony this morning is we got an ad agency, interpublic,

reporting, and they raised their organic revenue guide, and on top of p&g's comments, do you think the ad thing is an excuse? >> i think what's consolidated here is that a lot of people figured out there's a really good roi with google, a really good roi with amazon, questionable but maybe good roi with facebook and instagram, which are still growing, by the way. and this snap growth, i'm going to put it in the pathetic category not as much as i'm not going a pat gelsinger intel thing. he's the nicest guy on earth but david, come on >> all right that was great yeah nicest guy on earth. incredibly nice. there's a competition. >> i'm just saying that the thing that was lacking among wall street people was that they didn't know that no one wants to read inside milley bobby brown's intense workout. >> i'm not sure about that, because there's another platform called tiktok where they seem very happy to look at and read

about -- >> and nickelodeon >> those are entertaining. there's a tremendous entertaining part of snap, but it was not what you get advertised against look, if you can get a good tiktok and it can explode to 2 million views, like i was doing one with mezcal, my wife was doing one, and it had 8 million views the last time they did >> you're writing this company off entirely i don't want to put words in your mouth, but you seem to be writing this company off, saying there's no way they can reverse -- >> as soon as you do that, some clown buys it for nine bucks and say, cramer's an idiot 25 years ago, i started a company, all right it was called the street.com it was valued at like $1 billion the day it came public >> i remember well >> i was screaming at everyone how about you possibly let this happen we sold the thing for $2.87. it was pathetic. i admit it was pathetic.

i made some money. >> along the way >> along the way and on the buyout, i made money >> what's the point? >> the point was i fought the buyout >> what's the point in terms of why you're talking about this in relation to snap >> that's more of a business than this. >> thestreet.com >> absolutely. >> all right >> people want to advertise against it quality content. and it never -- advertising, actually, was okay, because it had things to advertise against. >> carl, obviously, the changes in ios and what that has meant for the advertising business overall and the ability to track customers and then the rise of tiktok, which we have talked about endlessly for years now, but i mean, the amount of capex that bytedance can put in to tiktok to continue to improve. that's incredible. and listen, if you've ever used tiktok and the a.i. and how it adjusts to you almost immediately in terms of what you want, it's really something. >> roi is great. >> it is rare in our experience,

i think, when we talk about a chinese company representing a true competitive threat to one of our own, so to speak. u.s. companies >> you think it's the people that are running it? >> bytedance, yeah the guy who runs bytedance is, and the a.i. comes out of there. >> we're worried about musk. >> yes >> we're worried about musk. >> we'll get to him in a minute. >> i'm just saying, do we not worry about bytedance at all >> no, that's a concern. that is a -- >> a generation of people whose brains are -- there's an iq lowerer. >> i don't believe we have heard the last of what the u.s. government's approach to tiktok is going to be bytedance knows that it's one reason why most recently, maybe $250 billion, maybe $300 billion value when many think it could be far higher but because of the threat from the u.s. government in terms of what will happen with tiktok >> we're taking our best a.i. chips and not letting them have it but i'm going to tell you something, david it's a poll of one how much tiktok do you look at

>> well, i only see it through my 17-year-old daughter's phone. i don't actually -- i should i don't because i should simply as somebody who needs to follow it >> if you have a category that you're interested in, alcohol, it's nirvana a group that i like, by the way, including pearl jam. it is unbelievable how good it is and you look at it, and it's like, how to make a drink. and you can't -- it's, like, yes. i am -- i'm enthralled by it >> denying the forbes report that they plan to use the app to monitor the location of specific american citizens. >> they want to know where we are? >> they won't do that. the pla will only do it for our soldiers >> oh, okay. then we're all right >> yeah, we're fine. don't worry. >> monitoring seven fleets by that >> uh-huh. >> look, i'm urging people to realize that if you look at -- well, i than to have some ads here as preparation for the

show if you look at the ads against the moronic contact that snap has, i think you -- i'm sorry. i think you would say, well, this was just something that was perpetrated by capitalists who thought they could fool everybody and they even fooled advertisers. if you look at tiktok, i'm telling you, it is -- i get tiktoks -- videos, probably six or seven times a day every one of them, i like. every one. >> let's get to the broader market major indexes on track for a positive week. amex not helping matters today, shares down despite a quarterly beat they raised the guide amid the surge in spending on travel, but the provisions, almost $800 million street was more looking for 573. >> the growth was so far ahead, they had to do the provisions. when you look at the growth of loans versus, say, citi, versus jpmorgan, versus bank of america, they have to take the provision up the growth year is extraordinary. >> what -- why is -- why now

>> why is the stock down >> yeah. why is there such a focus on this increased provision as opposed to the metrics that are all very positive in terms of spending >> i think it's because the people who are selling it are stupid what do you want me to say have they done any work on it? i've been working on this thing for a full hour, and i don't get the negativity i see tremendous growth of gen x and millennial i think the provision is not as bad as people realize because they haven't looked at the actual banks the card member metrics are astounding but people want to sell it and you know what? go ahead go ahead i think steve is going to have another side of the story. >> do you think credit cracks -- but is this limited to autos >> autos are just horrible and that's why ally, i'm very worried about it i think carvana. david, carvana needs that market good luck with that. >> and you think whirlpool last night, big tickets >> when you read whirlpool, whirlpool's got the worst of all

possible while at the same time input costs, which you would expect to come down in a recessionary environment, were still elevated and yet the sales were still bad you have to watch these companies that their input costs have not -- >> no. what what are you pausing for what's wrong >> i thought you weren't buying my rap >> no, i was looking at the stock and thinking it's down 46%. how many charts do we put up where we see a stock that's already been cut almost in half? >> every chart that has this problem where the costs are up and the revenues are down. that's what you're seeing. >> i have to say, i didn't realize that whirlpool had been -- >> the whirlpool call, i had whirlpool on, terrific company but this is horrendous it's a horrendous conference call >> give us an example of what horrendous is, instead of just telling us >> we do expect cost inflation to persist throughout the first half of 2023 i got to get in there now so i

can get ahead of august of 2023. this is the time i mean, honestly, the consumer demand is clearly affecting a recessionary environment i read this and i said, why did i buy that new whirlpool >> contrast the american express where people are happy to go out and spend. >> they've spent on not goods. don't you get it it's on experience >> they're traveling >> he doesn't even get it. >> they're not buying goods. >> i do think he gets it >> no, i get it. >> i'll do a tiktok for you. >> i get it. by the way, also get the fact that i don't think you like snap very much. i picked up on that. >> well, in 1998, i said that -- no, i mean, the problem with snap is -- >> we've heard it. >> the whirlpool problem is, it's people have -- they double ordered. people have what they want there's a recessionary environment. the costs are up, which is really amazing because most people's costs are down, and think of procter, their costs are about to go from headwind to

tailwind, same thing with pepsico because they ordered goods in the beginning of the year and i think we're going to hear from james quincy a number that says why didn't i buy coca-cola? >> yeah, we will talk more about some of the loosening supply chains, especially in ocean freight. take a look at some of the latest developments as well regarding elon musk and twitter. take a look at the premarket here we'll get to what yields are doing today and the dollar on this expatnsriy. ckn moment fda ♪♪

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twitter shares down in the premarket. white house officials are discussing whether the u.s. should subject some of musk's ventures to national security reviews, including the deal for twitter and star link. meantime, "the washington post" says musk told prospective investors he would cut nearly three quarters of staff if he takes control of the company twitter has reportedly told its company that no layoffs are planned. you got the obvious effects out of the snap print last night >> that's really a side show in terms of what's going to happen because next friday, musk is buy it for $54.20. this national security review, which, by the way, the white house has since said that it is unaware of we do not know of any such discussions, and that helped a bit in terms of the decline in the stock, but you're still seeing it there. that is more or less solely because of the story from bloomberg, well regarded reporters behind it, and so the question becomes, well, who told them this, and why did they

think it was worth writing we don't know. we don't know. i will tell you, at least, in speaking to people close to twitter, they're unaware of any inquiries so far from the u.s. government at all about national security concerns here that said, where would or how would they take place? well, perhaps the committee for foreign investment in the u.s. with reviews deals for their national security profile if they feel like there's something that is concerning to them if you were to see a formal letter from syphius to musk and twitter, they would hold up the deal until that inquiry took place. that has not happened, but that is the concern right now that, in fact, the next week, given what we saw in this bloomberg story, that somehow they would decide that's something they wanted to take a look at

his tweets about putin or the ac fact that he's providing sara l star link for free to ukraine. it's unclear exactly what has risen to a level that would really concern the government in a, at least, real way. section 4 of the equity commitment letter, by the way, states that musk cannot bring in investors that would result in consent or additional approval under any antitrust or foreign investment laws, so if they were to say, hey, we have some issues with your investors, he would just have to get rid of them under the merger agreement and replace them we talked about equity that was attempting to be raised. gavin baker, hedge fund up in boston, had a big presentation yesterday pointing out, by the way, that about 7% of the users are responsible for 80% of the cash flow. that may go to why some of these stories about significant layoffs may be true in some fashion, although i have not heard that 75% number.

but i mean, you guys know this anything at this point will scare people off because it's twitter. it's musk. this would be, jim, outside the realm of what we would deem -- many would deem acceptable, almost has rings of what we would have seen under the previous administration, doing something that would be to the benefit of the president, perhaps, by taking advantage of and trying to penalize their political opponents. >> geez, i've got the -- i have the exact same story in my reporting, and i know we speak to different people. but that's exactly the story i got. and people were selling the stock. it's motivated by other people and they're going to miss the fact that this deal will close and i mean, i don't know about the layoffs, because the layoffs haven't been targeted, but i have exactly the same story you do, which is that this is, while it's certainly -- i'm not going to say the story is a mistake. i am saying that this is not

going to -- >> it seems unlikely, but it doesn't take much to concern people who are betting on a close next friday. as we discussed yesterday, and as these -- i quoted some of these emails that have gone out in terms of looking for further equity checks, this deal is expected everything i've heard indicated that it's expected to close next friday but this was unexpected, that you would even see a story like this how to actually gauge its impact, carl, is very much unclear right now. >> and musk himself is responding to tweets about the report the notion that somehow he wants the government to save him from a deal that some argue he doesn't really want is not lost on him at least that thesis >> no. >> he loves irony. >> but the idea that he actually is such a -- playing chess at such a high level that he actually did this purposefully to try to bring about a national security review that could result in the deal not happening? >> that's 5d chess >> that's hard to imagine. and again, people close to twitter indicate to me there's

nothing they've seen from the government in terms of any inquiry thus far but listen you know, it's twitter it's just like, it's chinatown, jake, i don't know >> meanwhile, wedbush says he's going to pay another 5 or 10 for tesla. >> the snap numbers today, you can imagine if twitter was not in possession of a $54.20 deal that was going to close next friday, it would be a lot lower. that number is very large and that's not taking into account some of this other equity that's being raised anton the side. >> there's no doubt about it he says the quality overpaid but if he makes -- i said last night on the show, there's a vision for this thing that can make it worth much more than it's worth and it's not shared by the current people >> we'll get cramer's "mad dash," countdown to the opening bell oa et entl n prtyvefu friday don't go anywhere. usiness

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take a look at yields today, ten-year above 4.3 b of a has quite a bit on how private clients are making a massive move into t-bills and cds. two-year almost three points ahead of the s&p you can catch us any time, initiation just follow and re" eng llodst"squawk on the stetopinbe pca

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. all right sh le, let's get a "mad dash" with jim. we've been focused on the transports lately, perhaps, for good reason. >> well, yesterday, union pacific reported, and quite frankly, it was disappointing, but i like to do, when i look at the rails, to look by cargo by

cargo. there's cargo by cargo in all their presentations, and csx yesterday reported a really magnificent quarter with some terrific quotes. ag and food plus 25. automotive plus 31 and david, most interesting, coal up 36 and that's export. >> wow >> export coal coal's back in a big way, because there are shortsighted countries that got rid of other ways to do it, and china wants coal it is really rather amazing how much better csx is right now than union pacific, and i have always been a union pacific fan. >> is that a result of their mix? is that what you were saying >> the mix is really good. i don't want to put more to it than that. they have to have -- we're getting what i call actual, let's say, surprises in some lines, because there are such promising receipts, and csx is

uniquely able to help our overseas partners. europe you know, carl, when you go with people who are of some means, the first thing they talk about is europe. ukraine. and it's either, let's play for a tie and get the stock market up, or let's beat the russians and that's this dichotomy that is really riveting the hedge fund managers around the world >> interesting way in which maybe a change in control of the house could alter that conversation as well >> do you think on november 2nd, 75 basis hike is good for the election >> there's the opening bell and the cnbc realtime exchange at the big board today, triple flag precious metals ringing the bell, recognizing a recent listing at the nasdaq. dragon fly holdings celebrating the closing of its trade the crux of it is that 75 is in

the cake, but that the -- some fed officials want to have a conversation of how to telegraph 50 for december without sparking a major rally. >> i think that that's very right on i do think that we do want to see -- look, the fed -- is the fed, per se, political in this country, everything's political. and if you raise rates in the house and the senate change, i think you're going to start seeing, maybe we are too -- we don't mean to roil the american economy, but i think it's very important to start focusing. i'm not political, but focusing on what the fed's doing versus a change in the house. >> well, look at how the bank of england and the mps in the uk literally went toe-to-toe on whose fault this is. >> we don't talk about it much, but it's very possible -- and the american people are not crazy about rate hikes they want the $445 -- >> they're not crazy about inflation either >> they're like tiktok

>> i like tiktok >> i'm just saying, if they raise rates, november 2nd, and the democrats lose the house and the senate, i think that the fed may say, you know what we got to -- we're a little too important a la uk. >> okay. >> uk okay >> meaning what? >> i'm just saying that maybe 50 basis points is better maybe you got to stop running the country. >> right >> i mean, does jay powell run the country right now? does jay powell have the ability to make it so that pelosi goes to the investor of italy the answer is, yes the answer is yes. >> you think so? >> yes >> well, in our world, he's certainly got a lot of influence. >> i think uk gave you a template that i think if you're the fed, you say, geez, we're about to elect -- we're about to have the senate and the house change hands because of things that we're doing, and i don't think that's -- after what

happened in the uk, i no longer think that's chimerical. i think it's possible. >> b of a note looking at clients moving into short-term t-bills but also what they call a disorderly drop in commercial bank deposits coming on the heels of those bank earnings we got. >> i mean, that was not the read of the quarters, but yeah, it could be the two-year is at 4.6 it's really a tremendous buy as i say >> you've been saying it was a tremendous buy at 4, 3.9 >> it'm not taking a bath >> no because you're going to hold it to maturity. >> and you can borrow against it >> 4.6, that's stunning. >> i bought some during the break. kind of like scotch. >> you bought -- >> i had some unusual activity >> you bought some two-year paper during the break >> yes i bought some two-year paper during the break >> usually david and i just

check twitter but you're actually in there. >> i got to borrow against the treasuries to get the new property that my wife bought >> okay. guys, worth taking a look at a sector we don't talk about that often, hospitals, because we got earnings from both tenet healthcare >> you want to stay out of the hospital >> yes that is my intention to always stay out of the hospital if possible both reported their results. let's start with tenet because it's just ugly you see right there. i mean, losing more than a quarter of its market value. >> oh my god, another split with no stock >> ebitda -- adjusted ebitda, 130 million. put it below the analyst estimates on virtually every metric what did they see? they had some difficult comps year over year because of covid patients coming in a year ago and thankfully not nearly as many now admission declines of 5.3% elevated contract in premium labor pay rates, outpatient visits down 6.9% year over year.

hospital surgeries declining 3.6% year over year. and covid cases, a percentage of total admissions, roughly 6% compared to 3% from a year ago, so that's interesting. they did raise their adjusted ebitda guidance still, but nobody seems to care hca, you saw it, down about 10%. revenues there, $14,971,000,000. haven't had a chance to look through it quite as closely as i had tenet, but same facility admissions, down 1.5% while same-facility equivalent admissions increased 2.3% compared to the prior year both are getting crushed >> wow hca is a better operator than tenet. >> it's also a far larger company. $56 billion value there. tenet, far smaller

but admissions going the way, perhaps, the market had not anticipated. >> nobody saw that coming. are we -- are you covering verizon? >> if you've got something you want to share on verizon, feel free >> i just feel once again, blaming competitive issues, i don't know why they added very, very few. i don't know if you saw -- >> 8,000 >> yeah, 8,000 we were looking for 38,000 ten-year low on this stock and a lot of people are questioning hans's tenure. >> i did what i would call a tougher interview with him a few week back at communacopia. we have been talking for quite some time about the pressures on verizon, always relying on what it called the best network, but is that really the case any longer, given the advent of 5g certainly in the 4g world, that was the case and can they still be the premium provider or not? at&t's numbers yesterday were in contrast, and in fact, we're still seeing at&t shares gaining this morning >> there was good -- i mean,

they did have visibility >> up another 2.5% after a very strong number yesterday. >> that was good >> still to hear from, of course, the industry leader, and as i point out, market cap leader as well, t-mobile we will hear from that company next week. >> david, do you think -- >> we'll see how it did, but verizon's subscriber additions were disappointing >> i think that at&t picked up verizon, you know? normally i would say it's t-mobile >> it may have been. it may have been >> verizon's very problematic. >> we talked about the level of how competitive this market is you've got the cable companies as well, our parent company, comcast, certainly anybody who watches football, at least in this part of the world, sees the endless ads from spectrum, that's charter, in terms of wireless, and that's real. that's real competitive pressure and of course, we've talked about at the same time how fixed wireless from the likes of t-mobile and perhaps verizon at some point, will pressure and is pressuring comcast and charter

in terms of their broadband business >> and there's al michaels last night with kirk herbstreit on amazon >> wow >> i know. >> some of those connections were beautiful >> yeah. >> you can't flip, though, when you're on amazon, like, you're still there watching the ads instead of when you're just watching on cable and you can just flip. >> that's called really good for amazon >> yes, exactly. >> again, i would come back to, they don't -- it's not a nielsen number it's anybody who even just clicked on the game gets counted, and oftentimes, today, you'll have people go to the amazon -- go to prime and click on it and then be, like, oh, i don't want to watch that that's not live. but that will count. >> but can i also just say that they did have real announcers. it doesn't change. the announcers are very good >> the best. >> yeah. the presentation is awesome. and i find myself, wherever i

am, sneaking a look at kyler murray sneaking a look at rondell moore. fantasy in this country, the fourth quarter matters even in the most irrelevant games. there i am watching the fourth quarter to see whether kyler murray scores. >> i want to get to chuck robins and cisco because yesterday i had a chance to spend time with him at a facility not far from here, midtown, closer to madison square garden, penn station area, where they have created the workplace to the future, fully connected. we talked about that we'll share some of what we found there. but they're in a quiet period right now at cisco we will speak to robins. >> in other words, you went to chuck robins someone i talk to >> all the time. >> my source and how was that >> it was good i wanted to see what they're talking about in terms of the hybrid work and what they view as the workplace of the future, so to speak, and how they're going to take advantage of that.

but i did also have to ask him at least about what they're seeing and what he thinks is going on in china right now, especially given the heightened tensions -- continued heightened tensions between the u.s. and china. >> if you look at our performance, last fiscal year, we had the second highest revenue wryear in the history of the company. the results were solid and i think that what we're getting from our teams appears to be, you know, i was worried about innovation how do engineering teams build products in a pandemic and the teams did a great job. i think by letting the teams decide, then they know -- they're actually solving for their own productivity, and i know that sounds a little counterintuitive, but they say, hey, we could be better together if we're in the office two or three days a week together, even if it's 80% of the team and one person joins remotely. i think you're going to get it from that perspective. but i'm not overly concerned about it >> you're not? >> no. >> all right, well, let's talk

about something you may be overly concerned about you're in the midst of a quite pe quiet period so there's not much we can talk in terms of specifics, but china, you've talked about it because of the covid lockdowns and what they have meant for your ability to get supply for various things. but i'm curious to get your overall view as well, as tensions just continue to rise year after year, month after month, between our country and china, the latest being, of course, this real crackdown on their ability to get ahold of advanced chips from your perspective, you know, how do you look at that and think about what it means for your business? >> i think that, look, in a perfect world, these two superpowers would find a way to find some level of ability to coexist, and i still hold out hope that we could figure that out without having to get to the level of the things that are happening on both sides. but i mean, china's incredibly important to the global economy today. it is. i mean, from a consumption perspective, from a production

perspective, and then as a part of critical supply chains around the world. so, i think, you know, our objective is to continue to maintain a solid relationship with china >> does that get more and more difficult? >> well, i think -- i think it all depends on how you react and how we operate there we've been there a very long time we have had great relationships. it's not a huge end market for us, but it is a critical part of our supply chain, and so it's important for us to have those relationships and maintain those relationships for that reason if nothing else but we also have -- we had good business performance over there this last 12 months, so the tensions certainly create uncertainty, but i think we can navigate it. >> he thinks they can navigate it, jim, and again, they're in a quiet period so not going to get too much there in terms of a read on the quarter, which is ending very soon for them. >> i think that when you go back and look at the orders, the orders are extraordinary, and the analysts paid very little attention to the orders. and yet, that's the best way to

be able to analyze the company that was a good interview. >> thanks. >> yeah. >> again, even though you heard us talk about hybrid work, it's interesting because cisco had 18% of its workforce already fully remote prior to the pandemic, but they also are creating these work spaces, fully connected work spaces. we'll show them to you, that are powered by all of their equipment. >> very exciting >> they believe it can be a growth area for them in terms of selling it to so many other companies that are trying to encourage people to come back to the office >> chuck has spent more time thinking about it than anyone, i think. he's spent a lot of time in atlanta. and i had dinner with him the night before you talked to him >> i'm aware i would never pretend that i had a closer relationship with him than you do. i know you do. >> he had -- >> he told me that you had the dover sole >> he does portion control he had half the steak. and then i had the coconut cake but i only had a couple bites. >> the german chancellor is

going to go to china for a visit next month that's breaking. d.o.d. confirming that the defense secretary spoke with the russian defense minister for the first time since may via telephone, so a couple interesting new tidbits on geopolitics. >> i think that, again, the big issue is that there are a lot of people who think that this can be solved without russia losing or ukraine losing obviously, that would be incredibly bullish even if you think that in your heart it's not right, it would be incredibly bullish. >> keep an eye on that dow has gone green s&p still trying to go back to the flat line. let's get to bob pisani. >> good morning, guys. well, we had a double whammy this morning, really, we're getting hit with multiyear high in treasury yields that's a problem and we have earnings not really cooperating. remember, generally, earnings have been better than feared i have been quite optimistic about it but today was not particularly helpful, and last night, frankly. so, let's take a look at the

sectors. we had a small rally going in about 9:00 that was that tim rose article out talking about the fed a little bit that helped. but you see metals and mining, which is a classic risk on, flattish this morning, semis down a little bit. ark innovation down a little bit, so let's just call this a very mixed picture it was much weaker about an hour ago. if you look at the earnings, that's the real problem here amex and verizon are both weighing on the dow, but you see amex is a big problem. in fact, the dow would be practically flat if it wasn't for american express and whirlpool had very disappointing comments i'll show you that right now here so, the 2022 guidance was lowered rather significantly around the $19 range and it was prior '22 to '24 that reducing their production volumes by 5% and this is sort of a way of saying, we're expecting some kind of slowdown. american express, now, i've been a card holder for years and years, and the topline numbers look very encouraging.

spending is terrific here, if you look at consumers up 22%, commercial's up 20%. new card growth, 3.3 million, all that looks really heavy. excellent. but people are focusing on that one provision, 778 million, that's roughly 200 million more than anticipated, so again, everybody's saying, aha, amex is anticipating a slowdown because that means they're expecting more chargeoffs down the road and slower consumer spending none of this has actually happened yet, but people are projecting here, and this is a good example of focusing on one number you think europe and luxury would be doing pretty well around the world we heard from pernod ricard, and their numbers were outstanding, the second biggest spirits maker in the world their numbers were generally very good but the other luxury makers weren't that great. kering talked about solid sales but the gucci business was a little weaker than expected.

we saw l'oreal's luxury business missed as the company noted lockdowns in chaina. we had adidas with a bit of a warning. if you really look through it, the concerns about the russian invasion are weighing on europe luxury we have had slowdowns in china and a lot of luxury goods are sold in china, so europe's waking up this morning with real weakness in the luxury so, i guess if you look at the s&p 500, what we're trying to figure out here, what the bulls are trying to figure out, is some kind of path to victory, maybe some kind of pause in rate hikes. maybe there would be a limited recession. but a lot has to go right for this to all sort of gel together right now, i think it's a victory that earnings are on the flattish side for the quarter. we're still up 3% for the third quarter, carl, and 4% or 5% for the fourth quarter remember the bears are anticipating that earnings go negative by up to 20%.

we are long way from that happening right now. carl, back to you. >> all right, bob, appreciate that, bob pisani got a nice little leg up here as the session begins dow is up almost 200 s&p 500 up a very quick 20 points get in on the cnbc investing club with jim. sign up and find out more at cnbc.com or use the qr code on the screen and it takes you right there. just about every sector is green. very quickly, ten-year, 4.27, as you can see on the screen, as we pretty much just got one bit of fed speak for the morning under our belts. back in a moment

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gloom, schlumberger, double digit growth, doing great worldwide. the amount of drilling over the world. >> what's gotten a lot of attention the last 24 hours is what refining margins have done as we go into the winter and some of the distill ate inventories, diesel. it's crazy >> valero. i had bolero on last night i prefer valero. i think the read-through for schlumberger is amazing for drilling i applied to work there. yeah, i did. >> before or after goldman >> before gold man. they looked at my resume and said, you're obviously in the wrong room we don't want anything to do with you. >> you're going to be out there on the rigs?

what was the plan? >> you've been out there before. >> i was going to be an engineer keeps me out of being an engineer. >> nice. put that law degree to work. >> it's not too late >> i went in and i said, you guys are the greatest guys they said, no, we're trying to hire people that know something. oh, geez, i thought you could go in here and learn something. no, no, we're going for people who are actually good and competing, like going to halliburton. i said, all right, i'll go to another place. >> what are you going to do tonight? >> two stocks that are down badly. i'm going to explain why they shouldn't be down. and i think people should listen because they may be selling these very stocks and shouldn't be >> that's a good tease >> what a show. >> rest up for next week if you think this one -- >> no, no, i'm going to chicago. >> that's right. you are going -- >> i like chicago. >> you're going to chicago >> yeah. i'm going to recreate the future remember that movie with the green river and stuff. >> yes, on st. patrick's day.

>> i don't care. >> you don't like snap still >> the what makes you think that >> i don't know. >> oh, just a second there's a new thing -- i don't care that snap just did. oh, look at this they're doing something about evil -- girl power the girl who lives in a basketball and it's right after a very important espn plus ad that i'm sure disney is reaping the benefits of, as they figure out how to digest the fox acquisition. >> pretty amazing. just about 750 on snap today we'll see you tonight, "mad money," 6:00 p.m. eastern time. >> i bought celebrity wedding dress for cheap. more reaction to the shares tumbling in a moment

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the all-new, all-electric eqb from mercedes-benz. (vo) is three hundred and ninety-one thousand four hundred and thirty-four square feet... enough space for your ambition? loopnet. the most popular place to find a space. good friday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan and david faber.

look for crazy currents on this options expiration friday. for the time being, got a nice bounce on the heels of a journal report suggesting fed officials may talk about how to prep the market for a slowdown in hikes. >> we'll see here are three big movers we're watching we'll start with dowcomponent american express, beating on a surge in consumer spending because amex is increasing the reserve for potential defaults shares are down 5% another dow name to watch is verizon. topping earnings estimate but small number of post paid phone adds those shares are down almost 4%. and we will end with whirlpool, giving a weaker than expected outlook this had been in snarls with all the supply chain woes throughout the pandemic now it's the housing downturn starting to take a toll with executives saying they saw, quote, consumer sentiment dropping off massively in

june/july. nonetheless, the shares have just turned positive they're now up 1%. snap shares are plunging bernings beat estimate but revenue was slightly lower than expected monetizing users remains a challenge. other social stocks slider lower. they note the slowdown in the digital ad market. raymond james aaron kessler joins us happy friday it seems like just the latest in a series of reports from snap that took the street by surprise didn't jibe with what they told us midquarter. i wonder how specific is it to the company. >> yeah, there's parts that are specific and parts that are probably more to the entire ad system as well if you look at the midquarter update you referenced, they talked about 8% quarter to date, ended up being 6%, which implied a slowdown during september.

the bigger issue is for q4, guidance flat year over year the street was looking for something more like 7% growth year over year and we were about 2% a bit of a surprise on the q4 guidance they talked about brand advertising spend, which is a greater factor in q4 continuing to slow down google is more direct response spending, less brand so, we think google gets hit less from some of this and facebook is more direct response as well. some of the other factors, they talked about macro continuing to be a factor as well as competition. they said u.s. usage time spent on content down year over year we are worried about snap losing share time spent to other players, including tiktok in the market >> yeah. you listed all of it the macro, share loss, apple, tiktok how do they get out from under, if macro is truly degrading, how do they get out from under a

period advertisers, even if spending goes flat, goes to larger names with better ability to target a consumer >> the yeah, i think that continues to be a challenge near term at least for the first half of 2023, we're expecting pretty low growth or negative growth. a little easing on some macro pressures by the second half of '23. near term we are expecting a challenging market still maintain market perform ra rating >> i want to dig into the broader picture a little bit more we're getting a lot of mixed signals depending on which company you're speaking to within the tech sector, whether we're seeing a slowdown amid the macro back drop or not is the way to think about online advertising in marketing the first step on the road to a broader belt tightening by other companies? >> yeah, we think we started to

see that last quarter. a lot of companies did start to cut by this last quarter it's the easiest thing to cut it second thing might be employee cuts but the first thing it's easy to cut your advertising spend. first thing you cut is brand spend. snap is relatively 50% brand advertising spend where google is vast majority direct response google typically gets cut last with online players. google can do relatively better than snap and other players in the space. >> finally, halo effects on other names that are more -- closer to the competition. namely twitter how much do you think this affects them >> yeah, we think fundamentals on twitter will be soft. we saw they were pretty soft last quarter as well hard to tell also how much of that is also because of the confusion around the acquisition. but obviously twitter is not trading on fundamentals right now. twitter's valuation is around twice the valuation of either facebook or meta and snap trading around seven times

revenue. snap and meta, around 2.5 to 3 times revenue. >> aaron, appreciate it. once again, an echo of what we saw a couple times during the summer great to see you thanks >> great thank you. turning to the broader market with green arrows across the board, aiming to end the week higher. the dow, the s&p and nasdaq. joining us morgan stanley cia lisa and barry bannister good morning to you both lisa, i'll start with you. the fact that we've seen -- we've been talking about it all week, the poll between earnings coming out and the bond market, as we've seen rates in tarl in the last couple of days, the ten-year yield move to new multi-year highs how are you assessing the landscape right now? and do you think rates are near peak >> look, i'm not, you know, a pure rate strategist but i know

morgan stanley's matt hornbak does think we're at a place on the long end where there's genuine value emerging and i think that when you think about the assemetry of risk, bond markets down 20%, the fact you can get coupons at 4%, 4.5% now in the bond market with this asymmetric risk meaning that if rates go down from here, you know, you get 4% coupon plus capital appreciation that looks like a much better bet than stocks. the reason i say that is to your point, we continue to be concerned that earnings estimates have not really fully

capitulated to this reality. it's wild. you know, the ceos in conference board surveys are, in other surveys are talking about negative sentiment they're talking about recession in 2023 in those surveys, but they're not talking about it in explicit guidance in their earnings calls so, numbers are not fully down to where we think capitulation of the economic realities of slowing next year are going to be so, we're bond buyers here that's where value is, and stocks still need to see estimates come down. >> i want to dig into that a little more. first, barry, to bring you into the conversation your thought on the levels here for the s&p and how much seasonality, for example, might be factoring into the bounce we're seeing this week >> i think the biggest factors, the macro factors that matter most for the market is will the

fed tighten what's shown in rate futures. if they do, markets are going to go down. the second biggest factor is oil. it's really at the core of all inflation. all gdp is energy conversion and if oil rackets higher, the market is going to go down the third factor we're watching is the diminishing liquidity in the treasury market. the fact that the move index of bond val tilt is way above the vix index of stock volatility. so, we're worried about that aspect as well if that gets problematic, the stock market will go down. so we really need a fed pause. now, not so much that they would outright disavow future rate hikes but they would simply say every meeting is live. if the data go our way, then after first half of '23 we don't have to do more. and then on the oil we need some resolution on what's going on

with ukraine and the russian oil. lastly on liquidity, the qt is something we're watching, the quantitative tightening. overall i'm optimistic the worst is behind us and we'll get a six-month rally within the market >> interesting lisa, to go back to the point you just made before, one of the things i've heard raised by long-time traders in this market is after monetary stimulus, the fed was always going to have to tighten, whether inflation was raging at 40-year highs or not maybe that's changed the trajectory of the pace and how aggressively they tighten at each meetings, but there was always a tightening cycle that had to come. listening to you speak about earnings and where we're at in that cycle, this idea there was always going to have to be a reversion to the mean where profitability was concerned for companies and what that meant for earnings and, thus, levels for the market walk me through that >> yeah, no. spectacular points and really right on

i think, just as you said, i think very often some of us who are around markets every day, we lose the bigger picture. the amount of stimulus that was put into the u.s. economy between april of 2020 and april of 2021, nearly $9 trillion. 45% of annual gdp. it was huge. we know that it saved us from a great depression and that's wonderful and the policymakers deserve credit for their resolve, but it produced a v-shaped recovery. to your point, a v-shaped recovery that included not only an overshoot of long-run trends on demand, volumes were pulled forward. especially for manufactured goods during covid, but corporations got above average

volume with pricing power. how do we know that? that's what the inflation data is telling you it wasn't a little bit of pricing power. it was a lot of pricing power. 8%, 9% we know that because we're seeing it in the retail sales data now price is 8% and volumes are flat so this idea, exactly to your point, even without economic slowing, that you are going to get some kind of reset from trend in s&p 500 earnings, we think is the thing that stock and equity analysts are still missing and then add on top a super rapid, you know, fed rate hike and the rest of -- and we just think that these estimates are going to prove too high. >> barry, if you think the worst is behind us now and we have a

six-month rally ahead of us, how would you be positioning yourself in this market right now? what do you like >> our s&p estimates, for example, were already calling for a flat year this year. the question is the earnings recession potential in 2023. ten-year, two-year curb both indicate about july to august of 2023 is when a recession might begin. i'm not as worried about having to account for the earnings recession potential as lisa is i do think the macro overrides everything right now there are only two slices you have to make as an analyst do you want to be cyclical or defensive and the other is, do you want value or do you want growth that's going to depend on inflation and economic growth in rates. so, where we are is in cyclical growth for the rally from november 1st to april 30th

seasonality does help back that up it's also very fundamental and that would be a lot of the tech names software, semiconductors, computer hardware, including apple. and then also some of the cyclicals. on your panel today, you have two old machinery analysts from the 1990s, caterpillar and deere. some of the cyclicals, the financials, the banks and the home builders even for deep value, and i would say some of the industrials. >> okay. well, thank you for kicking the hour off with us it's a good market conversation right there. lisa and barry bannister >> thank you as we head to break, here is our road map for the rest of the hour the u.s. government reportedly mulling a national security review for elon musk over his deal for twitter as well as spacex's starlink satellites we have former defense secretary mark esper joining us at post 9 this hour. plus more from my sitedown

w sitdown of chuck robbins, what he's doing to get employees back to the office. and evs. as carmakers will spend north of $1 trillion on batteries a lot more "squawk on the street" is still ahead as we have gains, back to 3700 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. (♪ ♪) 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

welcome back to "squawk on the street." a big morning for the rails as another name in that space reports results.

so, the ishares u.s. transportation etf, ticker iyt is up 1% on pace for its first monthly gain in three. down almost 30% this year, though on pace for its worst year on record core holding csx headed higher 6% on etf after higher prices boosted revenue for the freight railroad and the company also maintained its full-year sales outlook of double digit growth a little bit of a juxtaposition in terms of the earnings outlook and the stock reaction between the eastern u.s. railroad, csx, and union pacific, a western railroad, that reported yesterday as well. nonetheless, you are seeing a bounce across much of the transportation sector in general this morning carl >> meantime, guys, after the break, automakers continue the big push to evs. expected to spend more than $1 trillion by 2030 we'll talk about it with one of the world's largest producers of lithium about the surge in battery demand and all the

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a new report says global automakers are set to double their ev spending by 2023. expected to spend upwards of $1 trillion and the white house awarding billions for domestic ev battery and minerals production. our next guest is one of those recipients, set to build the largest lithium processing plant in north carolina. joining us, ken masters. it's great to have you i was struck this week by the front page of the detroit news was about some of these grants and what it was going to take to get to michigan, which they still consider themselves the center of auto production. how do you frame what's going on with investments and lithium's ability to keep up with it >> yeah, so the -- i mean, the grants are helpful and helping us do that and we're investing all over the world as the industry is, and that's really moving now towards the u.s. so, the industry has been making

big investment we're investing in chile, australia, china today, and we're starting to make those investments in the u.s and we're pushing to keep up with the industry. it's a big ask for the industry, but it's happening >> right how does north america investment compare you say it's sort of falling in line here, but in the end is it going to be -- is the growth going to be stronger than, say, other areas like australia and china? >> it would be a big demand. demand is going to be very strong the biggest demand today is in china. europe is starting to ramp up and then north america after that from an ev standpoint, so there will be strong demand. everyone wants a local supply chain to the extent possible fortunately in the u.s. we have resources we can leverage. europe is a little different they don't have quite the resources. so, they're a little behind north america in that regard >> just to dig into that a little further, what is it going to take for the u.s. to stand up a full supply chain for lithium

mining and refining here >> well, we'll stand up the full supply chain but we won't have the capacity it's going to take a bit of time to build that capacity in north carolina we'll be able to take lithium from the ground and we'll turn that -- we'll build a facility somewhere in the southeast to convert that to the lithium salts that get used in the ev battery and the battery will be made here. that whole supply chain will be in the u.s., but then you need to do that multiple times in order to satisfy demand. >> how quickly can you do that i ask because there's a whole permitting process and i imagine there's a lot of red tape, not only on the federal level but state and local levels as well >> you're right. we have local, state and federal permits. we've not actually submitted the permits. we've been working on the material, the data for a year now. if things go the way we anticipate, we think early '27 would be the first time we would be getting material from these facilities. >> to what degree -- there's a lot of repatriation of

production in north america, whether it's chips or evs or batteries. and i wonder, does labor keep up we keep wondering, we keep seeing what a national security imperative it is, but we're already struggling with filling jobs that already exist. >> yeah, it's a good point we think we'll be able to get the labor necessary for this it's not widget manufacturing with a lot of labor. it's process industry and mining, so it's pretty automated, but there will be an example, the facility in king's mountain, 200 jobs and local training we're doing part of the grant we got will go to a local community college to help build the skills locally we need for the facility >> given this broader conversation we're having, what does it mean for lithium pricing, which is already so elevated thus, what does it mean as it translates out to some of these new end markets like electric vehicles >> lithium is a pretty small

part of an ev cost overall i can't predict what lithium prices are going to do we've been on a wild ride for the last ten years around that demand is pushing. it's gotten tight. they've gone up. we've seen the escalation in lithium. we think the supply/demand balance is going to stay for an extended period of time. we don't see it coming off but, you know, i can't predict that we've adjusted our contract so we move with the markets so our customers are not disadvantaged versus anyone else so i can't predict the price, but we think it's going to stay more or less where it is for the near term anyway >> kent, it's such a huge story that's going to stay with us for a while. i know the white house is already trying to coin the phrase the battery belt instead of the rust belt we hope you'll come back over the next quarters and years. thanks so much >> thank you. as we head to break, take a look, shares of tenet health care are down -- losing more than a quarter of its market

value. this on, perhaps, unexpected decline in a number of key areas, including admissions and even outpatient care as well we're back after thi ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia. ♪ 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.

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. a new survey from cnbc showing americans have less confidence in the fed than congress steve liesman has the results of that morning, steve. >> good morning, carl. the cnbc all america economics survey finding the american public has not very much confidence at all in the federal reserve as an institution, even less than it has in congress it does have some congress in the fed's ability to bring down inflation by raising interest rates. just 15% of the public tell us they're extremely or quite confident in the fed that compares with 22% for republicans in congress and 21% for democrats. 44% are only somewhat confident and 35% say they're not confident at all in the fed. there are big gaps by party, 7% of republicans expressed

confidence in the fed, that compares to 23% of democrats independents in the middle when we asked whether the fed's rate hikes will work at lowering inflation, a slim 53% majority say it will. 40% say it won't democrats more confident than republicans and those with more than $50,000 in stocks are more confident than those with a lesser amount in equities. this is limited good news for the fed which needs the public to believe the inflation will decline and the fed will be successful to avert an inflationary spiral. but a key to the fed's rate hike plan could be how much political support the fed has. it does right now but the public is divided 47% say it's more important for the fed to protect jobs even if inflation continues to rise. 43% support combating inflation even if it means more unemployment so, we'll split that close is concerning because unemployment is low right now, almost historic low the fed we believe will raise

rates to around 5%, could have to raise those rates amid rising opposition from politicians and the public morgan, as you know, both politicians on both sides are supporting the fed we'll see if that changes if unemployment rises >> all right st steve liesman, monitoring it on a daily basis, thank you. breaking news out of washington on the deficit. let's get to elon moi. >> the treasury department reported the deficit in fiscal 2022 fell by $1.4 trillion in fy2021 it was $8 trillion, cut in half in fiscal 2022 ending at $1.4 trillion. the decline was driven by tax high revenue up to $4.9 trillion as well as less spending, which fell 8% to $6.3 trillion janet yellen said that the numbers demonstrate biden's commitment to strengthen our

fiscal health. however, it shows a dramatic jump in the deficit for the month of september a 562% spike to $430 billion that largely represents the cost of biden's new student loan forgiveness program. the president will be addressing both of these issues today, morgan the deficit and student debt of course, we'll be watching it all and keep you posted. back over to you. >> thank you still to come, we'll talk elon musk, the u.s. government reportedly mulling a national security review over his deal for twitter as well as spacex's starlink network mark esper will join us at post 9 to discuss that and all things geopolitics. first, let's get another check on the markets on this friday morning. with all the major averages higher, though off the highs of the morning. and poised to end the week with gains. the dow's up 223 points. the s&p up 20 at 3686. the nasdaq is up 0.25%

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takeover of twitter and spacex that is conflict news in ukraine as the communist party congress has once again raised questions around taiwan. on set to discuss all of this, secretary of defense, u.s. secretary of defense under the trump administration, mark esper, now at redcell partners and board member of defense tech startup. mr. secretary, great to have you on set with us. >> great to be here, morgan. thank you. >> i want to start with some of this news of the day, reports we've gotten about elon musk and the fact that maybe some of his ventures could be potentially the subjects of security reviews. i mean, we've certainly seen other social media companies reviewed, whether it's tom blur ortic tok, which continues to be

under skut any, but those were chinese owned and/or acquired. so, how -- given the fact he's also the ceo and founder of a major government contractor, how likely would it be to see a deal like this investigated >> first off, i do some consulting for spacex. i've been solved in cifis. typically it looks at foreign investment in the united states, as the name defines itself we'll see where they go in this. >> in terms of starlink, that's been given a lot of attention given the fact it's a crucial part of the ukrainian fight on the ground in that country against russia certainly been a source of controversy, at least online, on twitter in the last couple of days meanwhile, a "wall street journal" report that the pentagon is talking to spacex about the possibility of using more of those services i guess, walk me through how some of that new technology is

making such a difference for the war fighter and on the battlefield right now. and whether so much of what we're hearing is noise or if we could potentially see, for example, the d.o.d. step in to fund some of these operations. >> look, command, control and communications is critical in any war fight, particularly when you're going against a high-end country like russia or china, that has the means to jam or block or disrupt signals so, look, i think what spacex has done -- i'm sorry, what starlink has done has really changed the battlefield at a time when ukrainians didn't have that communication musk deployed 20,000 terminals at a time when ukraine needed it and we didn't have a means to support that it's benes essential from the battlefield from every report i see and hear. >> i realize this is not the way government contracting usually works, however i can think back to a couple years ago when i was sitting in your office at the pentagon and you were talking about the ways to cut through red tape and bureaucratic process to bring new technologies to the battlefield.

is that what we're talking about? >> i stood up austin, and i was at carnegie mellon, all of these things to accelerate dmpblts o.d. access to innovation. it's way too slow. if this is no means -- starlink will give access to remote areas of the world, it's a breakthrough and something that needs to be explored as a another component of d.o.d.'s means to provide command, control and communications in wartime. >> we did get a readout of austin's phone call with the russian defense minister would have been the first since the spring is that material is there a buildup to an argument that more communication is better than less? >> more communication is always important particularly in conflict i speak with my russian and chinese counterparts quarterly to express our views on things it's good they're doing it, but we need more of it, particularly as this conflict becomes more and more of a failure for vladimir putin >> on that note, you know, it's

hard to believe to ask the question, the use of tactical nuclear weapons but he's probably up that possibility what are the conversations on our side in terms of what the response would be should that ever actually occur? >> well, look, i think it's possible but not likely. my view is, let's not wait until we have to react i argue we should be proactive, preventive in the sense that if we see any russian tactical nuclear weapons moving to a missile launch pad or an air strip, then we should immediately put up an air cap. we being the united states, and preferably our nato allies, put up an air cap over ukraine and shoot down anything carrying a weapon let's avoid the blast. i think we should be very clear publicly again with moscow that if there's a nuclear weapon detonated, we will go after using conventional means their launch pads, launch points and take these systems out. >> that would be all-out war, wouldn't it, between our two countries? >> if you state it up front -- it could, but if you're clear up front, you're trying to deter the conflict from happening, the

event from happening in the first place. we don't want to cross that nuclear threshold. things can escalate and who knows where that goes. >> so, then what's the most likely outcome of this war in eastern europe right now does anybody know? >> vladimir putin keeps pinning himself into a hole he keeps digging into his own grave he's now fighting a two-front war. one at ukraine and one at home it's good to see the russian people are rising up, particularly in the remote regions, those being sent to the conflict now hundreds of thousands of russian men leaving because of their unhappiness with putin's actions. putin is taking heat not just from the left in his country but from the right and so it's getting more and more desperate for him >> meantime, china's got to be watching this entire situation very, very closely we have the communist party's 20th party congress meeting this week you had some comments about taiwan out of president xi there as well. and then just in the last couple of days, the chief of naval operations here, admiral mike,

the highest ranking military officer within the navy, basically saying that he can't rule out the possibility of a cross-strait invasion of taiwan happening even potentially before the end of this year. how likely is that scenario? that would be a major, major, cataclysmic black swan event >> what xi jinping said they are not ruling out the use of force in taiwan. if there are separatist activities, so on and so forth interestingly for your viewers, too, he looks to be doubling down on his policies that argue for state control, greater centralization, a heavier government thumb on the economy. and importantly, he's talking now about decoupling through self-reliance. he knows where the trend lines are going. we're obviously cutting off access to semiconductors and whatnot. there's news today that the biden administration is going to restrict ai and quantum computing. i think those are good things. look, i think the situation is not improving. and we need to be really

concerned about next spring because by that time, by the spring people's congress meeting, he will have consolidated power, replaced his cabinet, if you will, and may be less unhinged to do things he did not do this year. >> blinken had comments earlier in the week. his view that their endgame of taiwan accelerated, moved earlier. do you think that's true >> china has a policy of becoming a world power by 2039, displacing the united states clearly, he wants -- xi jinping wants to be the ranks of mao and he's 69 years old, probably got ten years left in power, two more terms i think he's going to act within that time frame. depending what happens externally, and he is watching ukraine very closely, he could act much sooner. >> so, to bring this all full circle and back to the markets, defense stocks, for better or worse, rallying this week. we had lockheed martin earnings in the week earlier and

commentary around geopolitics and production lines starting to ramp into the next couple of years given be what we are seeing play out in ukraine and we're looking to counter in u.s. where do these future investments go how does the u.s. continue to counter a china, for example, from a military standpoint aztec becomes a bigger and bigger piece of the puz snl. >> defense stocks 10% to 30% higher while the s&p is down 20%. i think as we continue to buy weapons and arms and material for the ukraine war, we'll see stocks go higher congress is poised to pass a defense budget that's nearly 10% higher and more than what the administration proposed. i think the focus is or at least should be on building defense stockpiles in weapons, stingers, javelins, himars, you name it, and we have to think not just about the conflict today in europe but how do we give the taiwanese the means now to make sure they are as tough as possible to deter a chinese invasion that's going to mean a new approach to warfare and

stockpiling arms and weapons. >> secretary esper, thank you for joining us here at post 9. >> thank you after the break, we'll have a lot more from my exclusive interview with cisco ceo chuck robbins. we talked about hybrid work, how he's getting his employees back to the office, and a lot more. 'rba itwo. ♪♪ ♪♪

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talk to our switch squad at your local xfinity store today. welcome back of course, return to the office continues to be a key area of conversation certainly amongst ceos and senior executives yesterday i sat down with the ceo of cisco, chuck robbins, to talk about their efforts both to bring their own employees back but also the opportunities they see to actually sell a suite of services to corporations that want to transform their own real estate take a listen. >> we really focused on enabling hybrid work, inclusive hybrid work how to focus on sustainability, how to focus on health and well-being of our employees and we focused on digitizing and pulling data out of the real estate so we know what's going on here. air quality, number of people in the office, what they're doing, where they are, how they're moving around. so, it's really -- it really is an intelligent workspace for us,

and the teams put a lot of thought into it. and it's working because the employees are showing up here. >> yeah, they are. >> yeah. >> why do you think they're showing up >> well, i think they enjoy being together one of the employees we ran into earlier said that the reason they come in the office three days a week is because of this place and how it's configured and how it's set up and how collaborative it is and how much they enjoy it. >> what do you see in terms of this being a template for what cisco can poetentially do with companies that you bring in here, checking it out and thinking about their own real estate particularly at a time when we're unclear how many people are coming into the office and where they're doing it. >> yeah. i think that we have to create workspaces that attract employees because i think in the case where you mandate, if someone wants flexibility, they may try to find somewhere else to work. if you create an environment they want to go to, and i've been to customers around here that have beautiful spaces and people are showing up. it's fantastic but from a customer perspective,

we're hosting about 20 customers a week in here right now and i know -- i saw a couple here yesterday i saw a couple here today. i have another one coming a little later and they're all intrigued by it. and, you know, 20% of the real estate footprint gets refreshed every year, so as customers are looking at refreshed every year so customers can move 100% to this technology and all the things we've enabled or take use cases out of here. and some customers are doing both. >> what have you found so far n in terms of the way people work and how they were working previously and obviously in a different space? >> i think employees, they love the flexibility of the space it's created experiences people enjoy. it's modern. employees like coming here they like the accidental engagements are the things that i worry about. >> that we don't have -- >> that's right. particularly for, i think, the early career employees we really have to make sure that

in this hybrid world that we figure out how we create moments for them to have those interactions to have those moments of networking and mentoring and learning >> have you figured that out >> we're working on it. >> we're in the midst of one of the bigger jooutcomes of the pandemic is it truly has changed the way we work and probably will for a generation to come. a lot of ceos i speak to are still uncomfortable with the idea that their workforce isn't coming to the office right now. >> it's a great experiment we have 18% of our employees before the pandemic worked from home full-time and over 70% of first line managers who have at least one remote employee. so the notion of being in the same office doesn't really apply to us. but what you find is that as we've done this, what we've allowed our employees to do is we said first line manager and

the team determine the value of collaborating in person, how often, how frequently and what days you want to come in together so each team decides. >> technology companies have been perhaps less likely or less focused on bringing everybody back, certainly not five days a week, unlike some of the financial services firms we deal with frequently. a bit more focused on having the collaboration on a daily basis. >> i like the comments on quality space. credit swiss looked at a smaller space, but a nicer space and that's feeding at least commercial real us estate. >> this is a sales opportunity for cisco. this is not an advertisement but that space was cool, in terms of the shades being automatic the table shapes so when somebody is on video, everybody can see them instead of blocking them they have tables that are shaped

differently than you might expect the air control as far as when it sees people in a particular space and cools it or not. many of those things going on there. and all of them powered by cisco's networking even the lights off the network not their own e hlectrical suppy >> so the movie "office space" is dead? the cube cal farm? >> this idea that really good office space where you're seeing the investments play out are always going to be in high demand and maybe what's not goes by the wayside. >> we've talked about it with the real estate guest that is come in here in terms of new york, what we call the b class buildings built in the 60s or 70s. they're not easily transformed to residential, so that continues to be a key question. >> hopefully next time we see

him -- >> he's going to come on with us probably not from here but during earnings. they're in a quiet period, so a softer side of cisco. >> that's okay coming up on "techcheck," snap struggles, stock sinking post results down more than 30% this morning we have some gains in stocks as the two year is down almost 10 bases points this morning. be right back.

welcome back to squawk on the street mega homes are piling up as the rich pull back on real estate. robert frank is live from massachusetts with more on that story. robert >> reporter: good morning, i'm standing in the hallway of the spa of a new mega home listing in massachusetts the top end of the market right now is the weakest in real estate the number of unsold homes priced at 10 million or more, rising 8% in september, that is ten times the rate of inventory growth in the country. more megahomes coming on the market and sitting on the market unsold this listing by douglas ellermann in western mass is $23 million, a main house, 25,000 square feet, two guest

houses, two car barns where can hold up to 80 of your favorite classic cars it has a golf course, a tennis court that converts to a concert stage. and my favorite part of the house is this. if you can show it this is the indoor water park. so on those cold winter days in western massachusetts, you can just go down the water slide or the palm trees this was designed and inspired by the bellagio in las vegas this is a $23 million listing in a part of the country that doesn't see many million dollar listings so this is going to be a challenging market even for a crazy, extraordinary house like this one guys >> i would like to see a live shot of you frolicking in that indoor water park. that looks bananas but the fact you have the high end homes for multimultimillions

in a softening market, is that part of the reason we're seeing the languishing on the market? if you have enough money to have an indoor water park, maybe you want to build your own place >> reporter: right and maybe on the water, not with an indoor water park youer you're right a lot of these high end homes were built with their taste. this is built by the found er-yer o yankee candle. right now, unless they need to buy something, they're not buying >> robert, thank you enjoy that water park. robert frank in western massachusetts. real quickly before we get you to tech check, did want to look at shares of american express. losses are worsening, the

conference call has ended. there were condition concerns with the conditions to the loan loss provision and they had strong loan growth so they felt like they had to reserve more for that. they say hey we feel really good about what our growth plan is so far. that does it for "squawk on the street." have a great weekend, everybody. "techcheck" starts now. >> good morning welcome to "techcheck," i'm carl quintanilla with jon fortt and julia boorstin shares of snap down 40%. dragging down shares in the space, meta, pinterest all lower. and "the washington post" reporting that musk could be planning to slash the workforce by close to 70% but the government reportedly taking a look at musk's investors