emerging toward the end of the year and that is when the fed has to decide whether or not they slow down or do a big pause. >> big swivel. all right. liz, thanks. >> all i'm hearing in my shed is happy normal let's get a final check of the markets which look pretty good who knows by 4:00. we'll see. make sure you join us tomorrow "squawk on the street" coming up next . >> monday morning. welcome to "squawk on the street." week starting off with optimism on lower yields, hopes for a slowdown in hikes, decent corporate result so is far 150 more just this week, nearly half the s&p market cap. u.s. stocks look to build on the best week since june, but hong kong suffering the worst single day rout since '08 as xi tightens his grip on power

plus tesla shares having a bit of trouble this after the company is cutting car prices in the all-important chinese market and a downgrade on meta, bank of america saying there is likely greater ad spending pressure ahead also an interesting letter from altimeter. let's start with the markets set to open higher and the effect that president xi's congress is having this morning on chinese tech. sxw jim i jim, i'm not sure i understand the concern. >> that is a good point. anyone who thought that xi wasn't solidifying power in the end of since we went very belligerent on taiwan and what we're doing with the chips, i think that you are just out of it i did think that the escort scene -- >> hu jintao being taken out of the proceedings? >> did you regard that as being somewhat traumatic >> yes >> yeah, solidified.

>> one day they will come to you. >> i appreciate that >> looked line abe vigoda. >> you really got to go. >> okay, we'll have an empty chair. >> it was very dramatic. >> and there are people who come on our air and no matter what, they recommend chinese stocks. and they will be becack. they will be this is the opportunity to buy china and it is so wrong for so long. i'm just going to do it. this is is it, i think pin duo duo and bilibili, it is time i just did what fund managers have the guts to come on our network and say -- and lose people fortunes. and they love it excuse me, david, did you know that ecommerce in china is better than ever it is a communist country. >> alibaba shares in many ways have been the bellwether, certainly the most well-known

name that trades here in the u.s. you can remember the ipo, many years ago at this point. >> that was a different time, right? different time >> yeah, they were going through capitalism now they are going for hardcore communist. >> and a decline like that something that was more or less known, but perhaps the way that he has loyalists in every single position now wreplacing people perhaps it was even more drastic than people thought. >> people think we'll look, oh, the numbers are good, and they had some sort of economic growth number i trust none of their numbers. would i trust anything mao said? about you fund managers will still have the guts to come on our network. >> and jim, you've got stifel saying peak inflation, goldman we're not on the cusp of a

recession, morgan stanley technical rally continues. >> research is so out of whack with the stocks, it is amazing nothing but down grades and price target cuts. those interested in trading understand that you are getting the gift of a lifetime because many of the stocks -- actually there wasn't a stock that i read this morning other than at&t that was a buy wework >> what about wework >> it was upgraded >> service now out of guggenheim >> but no substance to it. really that was just a call that we can start buying these old stocks again there was nothing new as much as i respect bill mcdermott, there was nothing in there and so it is a very odd situation where companies themselves, analysts don't like them, but the top of -- mike wilson's piece, it was back to i've seen fire, i've seen ice. it was incredible.

so wilson is again behind a lot of this and then you've got -- >> that was early last week. came out with that piece >> short term bullish. >> and he's been proved correct so far we were up 4.7%. >> he was like i'm right, i've been right and i'm going to remain right because i'm right there, i'm right i actually lining the guy. -- like the guy. he comes on every other send but he is dead right, we're in that phase where it is good, but then you post bad earnings and you go down -- >> and where is that and by the way, we have 101 s&p companies reported so far. 47 are beating on the top and bottom line. this point the prior quarter, it was only 44% >> yeah, i think it will be i've seen fire and i've seen rain >> this will be an important week >> did you get my gt joke? >> no, i was moving on >> i did a book signing and

everybody thinks that you hate me >> really? >> everybody how much does he really hate you? >> that is what people ask you >> yeah, i know. >> that is terrible. >> and you used to make calls every time you're talking. >> i didn't hear what you were saying because i was going to make the point that rest this week we have microsoft, we have alphabet, we have meta, amazon and there they are and -- >> no single positive research about any of this. >> and we'll get a lot of commentary along with that, i'll be curious to see what the various ceos of the companies have to say. we've already heard from obviously the chairman of amazon, one mr. bezos, saying hey, batten down the hatches so, you know, it will be curious to see your thoughts as we head into this. >> futures are moving everything i think that if you get a pause, i don't think that jay powell

wants to elect republicans and if you want to elect republicans, you say that we have to keep tightening and tig tightening i don't think that is powell's style. i think he doesn't want to be part of the election unfortunate time on november 2, so he does say i want everyone to have a good holiday season. >> similar to what we heard last week then in terms of maybe they take their foot off the -- >> yeah, that's what i think and a quiet period for them thank heavens. >> and buybacks are resuming i heard you talking about a peaking dollar >> i think the dollar could be peaking and that is why the bank of japan, interesting, if the dollar peaks, then you are going to see so many stocks rally because the reason why last week so many stocks got hurt, you take mcdonald's, if you get a peak in the dollar, mcdonald's raises its numbers

>> i always do wonder how much the market already takes the dollar into the account. it never felt as though that it has penalized as much as the actual underlying earnings are hit by a higher dollar >> i think that anybody that is competitive that loses business with the dollar, like caterpillar, which i really like, that that is one but, yes, if you are looking at the drug translation, i mean look at merck, that is huge international. >> it has had a very good year >> and you nailed it at $80. you said it had some things going. >> yeah, i was more focused on, you know, on their environmental moment and now, merck did not have a good year last year. >> no, but this year it has rallied because people think that we're going into a recession but not a bad one. dollar will faek fir peak fire and rain will win

the top down guys love it here but the individual analysts, i mean they take on american express, it is an attack, not just a downgrade you're starting to get situations where we're getting -- there is all new groups that have you seen some of these >> we had evidence lab on disney today. >> i liked that. i thought the evidence lab on disney was really positive >> so you like the evidence lab when they agree with you andyo don't like them when they disagree with you. >> absolutely. >> they are just basing it on the evidence they are going around with their magnifying glasses and just like -- >> it is evidential. but, yes, they were positive on disney it is very possible that the balance sheet could be fixed there. >> what do they have on what they will have to pay for hulu in 2024? >> then you get to that, they said solid end of the year u.s. part is strong, ad trends

choppy but you can take it to the bank because -- >> because it is evidence. >> it is evidence lab. you laugh, rngs bbut this is lii >> never stops making me laugh >> also the dieiagonal graphic >> yeah, the stamp is the greatest >> i love their disney call. i think disney has a shot here espn, the bundle the bundle i'm so sick of bundles >> there it is, i have my own copy of the evidence lab now >> meantime, tesla is in the news extending the october slump as you know. the company cutting model 3 and y prices in china by up to 9% amid signs of softening demand in that country. stocks down more than 20% this month compared with a gain for the s&p. also impairment loss on bitcoin investment >> i actually think bitcoin is going to rally here.

yeah, speculative juices come back musk, this is interesting, they did report their quarter and david, do you not think that this would have been relevant when they reported their quarter to know -- >> that her ey were going to lor prices yeah, that is relevant didn't we kind of know that? >> he can do no wrong, so why are we even spending a send on it >> he is going to have an interesting week because by the end of the week he is most likely going to -- he will be the owner of twitter >> so what do you think, does prague stay, ned siegle? >> nobody stays. everybody goes everybody goes at twitter. by the way, we'll get to meta. you could fire most of the people anyway and still do

better >> exbrother race of twitter's debt obligations if this happens, means that you will have to cut some people. >> yeah, simple math they got a very big interest cost when you put on $13 billion in additional at the time to take the company profit. >> rich guy. >> well, yeah, good new for the predators is there is $31 billion in equity ahead of you >> exactly. by the way, everybody hates semiconductors and under armour mower dre downe >> and we'll get to some of the calls. we'll talk about the b of a downgrade of meta and also who is reporting this week including apple, google, microsoft, ge, coke, exxon.

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meta is moving lower pre-market 150 target, says it expects budget cuts next year to weigh on sentiment and altimeter said that meta has too many employees and moving too slowly to retain confidence of investors >> yeah, i spoke to brad gersner, sometimes a guest, and he said we're at the end of zero rates and obviously that environment that we've lived in for so long has allowed for excess spending and excess hiring and times have changed.

he said he's had some conversations with mark and the company. and believes, you know, that companies such as meta are having these conversations as well at the board level in terms of making decisions that would result in significant potential cost cuts. his basic point or contention is that the company can do even more with less reduce your head count by 20%, reduce cap ex at least $5 billion. and he said there is a incremental cash flow there that could generate $20 billion in tree cash flow also said that mark and i share a lot of perspectives because of course one question is, you know, zuckerberg has complete control remember, voting control. so he did whatever he wants. but sometimes you can be in opposition to him. he says that is not the case and i wouldn't call this an activist letter in any way, but

you can helpful sometimes to a ceo if you come out and you are an influential investnor by giving them some runway when they have support of their holders. so maybe it is more of that than the opposite he said i don't feel like i'm in option of america. in fact mark and i share a lot of the same perspectives. going on to say that it is a bellwether and can set an example for other companies again that are coming out of the zero rate environment where it just was fine to endlessly hire and endlessly spend. >> look, i've been saying that the place that is most weak in the country where the most layoffs will be is silly con valley they do have too many people.con valley they do have too many people you see they have giant new york offices? they don't need them by the way, i don't even know it if they need offices with -- work from home that's it. you can work from home for facebook

i also think -- >> i don't think that you will be as productive, are you? we learned that in year two of the pandemic productivity declined. i say it because it is true. a lot of people will disagree, but the numbers are the mums >> data that new call of duty looks so real. >> so getting them into an office can be beneficial, but your point is that -- do you agree with him >> they hired and they hired and they hired and they tried to hire people who would be hired at other places now held do layoffs. and you want all the engineers -- there will be a lot of engineers and so i think that is where the real weakness, although california is very strong, i just think that if you want to know where they have to start firing, it is tech companies especially by the way, there is a lot of tech companies that were just created. and a lot of them won't exist in two years. it is very much like 2,000 >> as for the b of a note, they

say time spent on instagram and facebook basically flat. >> problem is reels is taking share, but from tiktok, but it doesn't make much money. and meta, i have to tell you, when it is on the web, i think that it will surprise people you see what it sells at versus the other ones >> b of a takes after the reels bullishness. >> they are wrong. >> and the metaverse spending. apparent lack of progress. >> it has to go on the web >> what does that mean >> well, it will be easier you'll see there is another way do it other than -- >> not having to put goggles on. that is years away, isn't it >> it could be not that far away but listen, you've got 14 times 2023 free cash flow. although we get it is 15 google 16 times. apple at 21 times.

so you could argue on a free cash flow basis -- >> he says pe raftio trades fro 23 to 12 and when it comes to ai, they think most companies will struggle to monetize it. and meta is in position to leverage ai. >> what's whatsapp worth >> i don't know. >> it is a derisk stock. obviously goes to spy stock. he went on joe rogan -- >> zuckerberg did. >> yeah. and i know joe is different. >> what is your point though >> my point is that the stock is very low say it drops another 20 points and then you get the benefit of whatever the heck he is doing with net but i personally would like to advertise in the meta more

i personally would under 21, can't come in. developing an ad for it. and i just think that i won't be alone. i think that you want to be in that mall and the mall is real >> an estimated 100 billion plus investment in an unknown future is supersized and terrifying even by silicon valley standards. >> that is terrifying. i didn't know that see, i thought like a dirty bomb heaved was terrifying. i'll put it in perspective i don't know look, i think that meta draws too much attention it is no longer as much of a factor as amazon or apple. >> good thing we don't talk about meta very much >> of the quarters we've had so far, net flis mix 234riks flikse

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help you find and unlock opportunities in the market take a look at futures here. off the morning highs but getting set for a busy week. 150 s&p earnings in the next five sessions. watching oil and perhaps some developments in the uk we might have rishi sunak on course to become the next prime minister opening bell just a few moments ll "ua oanou can listen d foowsqwkn the street" podcast.

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trading. schlumberger soon to have -- >> no, not schlumberger. >> what is it now? >> slb >> a ton of targets. >> they are very pro environment. >> driving the future of energy is what they are talking about >> you think about it, it underscores the company's vision for a de caca cacarbonized enere and to a global technology company focused on driving energy innovation. >> apa did that. >> slb >> well, okay, so the question is, david, because you did a lot of work with exxon, it became xon. so do we therefore think it is better >> no. >> well, okay. i always like this as slob when they kept that, schlumberger lost that. >> part of it is nobody will ever know how to pronounce it

properly >> yeah, slb is better but i think the idea of changing your name in order to demonstrate how you are no longer the way you were may not -- may be a kind of a moment in time. i don't necessarily think that that is -- people at home will say oh, yeah, now they are really involved with climate change because you know why in the end there is still fossil fuel and you can't lose that, but you certainly can be better at it. and i know president biden is not going to say you know what, i don't care what they call it, you know why >> why >> because he doesn't even know what it is >> come on, they have a celsius energy business that reduces the carbon footprint of buildings. >> that is a pepsico drink >> they also have a clean hydrogen company >> not against them but they

rejected me. >> let's get the opening bell here big board, i came kinetic is ate nasdaq and william sonoma as jeffries goes to sell >> and concerns about consumer spending >> i think that was a vicious and unnecessary down great i know a lot of people feel that that is a work from home, that laura alber is not dlufeliverin, but that is wrong. i think that that is an amazing company. and they have a lot of capital and i think that laura alber, here last week, at these prices,

david, this is -- >> don't sell. >> not here, no. don't sell william sonoma. you sell west elm, you are selling a company that is very much in tune with what millennials and gen xers want and i don't think that you are early when you are selling when it is cut in half. a lot of the semi condukcornducs still want to be ghut half again, but i think this is a very good company and it is time to think about buying it, not selling it >> and some of the semi s have had hair market caps including nvidia, cut in half. >> president biden has heard of them that is not so big president biden i think that they are uniquely afraid, and i mean this, carl, if you look at the new coded stuff that they are doing for video games, i think that the president and his people actually are worried that these are so sophisticated that they can be turned in to something that they can

weap weaponize. i believe the ones that they are sending are really not weaponized, but when you look at the party congress this weekend, i think these guys want to weaponize it and so look out for intel which just got downgraded. i happen to like amd very much i happen to like -- i'm really liking nvidia, but i think that you are against the government there. >> and certainly casinos are getting roped in this morning. some of the biggest laggards >> anything connected to china at all >> and here are some stats for you. hang seng, just six occasions over the last 20 years since 2002 when the index kael returns were worse than today's. and that is as you see down almost 4%. five out of six times the index rebounded the next day up an average of 8.4%. >> so they buy and look like geniuses >> we've talked about alibaba

which is just getting crushed right now, down 12%. still continued leader in ecommerce activity in the country. >> look -- >> with a number of other important businesses >> let's say if they were not a communist country i'd say buy. i think what they didn't realize, this weekend communists solidified their hold, that people who might have been formers seem to be expunged. and yet we're supposed to just pretend and say look at the cash flow the government could take that away inanonanosecond >> but some believe that they have tracked down on smern companies, suffered the consequences, there are been significant slowdowns in the economy and they have pulled back a bit from that >> well, i just think that you are depending upon a country

that could put a tax on wealth, that there are so many things they could do to make it so that rich people have to be punished now that the people who -- reformers are gone >> he is not as focused on the elites others would say as hu jintao was for example when there was a lot more corruption. in fact he is focused on the hundreds of millions of people still living it in poverty in that country >> look, i always hate to say it, but they have done a remarkable job, 400 million people taken out of poverty. i think the american people and the chinese people have tremendous regard for each other. but i think that the leaders are out of whack when my father worked for the chinese, couldn't -- anecdotal obviously, but everybody worked for the chinese here and particularly the elderly just respected and loved. >> and xi spent time in iowa as a kid. >> it is just such a shame,

there is so much common allegity between these two countries. it is just such a shame. >> does it make you wonder how they are viewing tesla as either friend or foe? again, one of our laggards this morning. >> well, i just think that people -- one the reasons why people liked initially alphabet is because it doesn't have china. we don't talk about alpha anymore. a pretty big company >> and virtually no exposure to china. they have been out of there. i haven't looked at starbucks or nike or apple -- >> don't look. that is my answer. don't look >> a apple is not down very much >> no, but starbucks -- look, starbucks' mantra, made in china for china. howard schultz established that and it won't change. and maybe china for china is something that they want

so i'm not advantage starbucks at all look, tesla, maybe sales just aren't that good i don't know but sales for starbucks in china are very good and you still have to wait a long time whenever they open a new store. i'm not selling. do you have the pumpkin latte? >> not happening if elon musk needs to sell more stock, we don't know exactly, but if he does, not a great time to be doing it with tesla to finish up the funding for twitter. although from what i hear, banks are ready to go. fully ready to go. yes, today, they are ready >> but you reported last week that they were going around offering you a chance to be in any takers >> yes, that were trying to raise money, equity as i said 2350ur furiously to supplement the equity check remember he has 7 wbuild rofly

from investors, 24 billion of his own. most of which has already been spoken for but there is a bit of a delta that we don't know how big it is so we're estimating it could be as much as 5, others saying maybe a billion or two again, the separate fund raising effort that i referenced could have raised money for it as well so we'll see but what we do have -- know with a good deal of confidence and you can see the stock is up another 2% today off of that significant decline on friday on national security concerns, at this point it is going to be friday if not sooner they could say we're done on thursday >> revenues have been really not great at all for twitter the last five years. >> no. >> actually ever since knonotah left >> so enjoy your last days of talking about it as a public company. >> can i finish my thought >> yeah, sure.

>> if you really think rev he r ref news will be as bad under musk, you haven't seen what musk has done i think that twitter will be amazingly great. >> it will be interesting. a few moments ago elon musk replied to "squawk box's" tweet using words that we can't say on television >> really? you know, national security focus last week, we've gotten more sort of background on it, it does seem to be the u.s. is much more focused on his role and the war in ukraine and starlinks has such an important influence there. he is not getting paid for providing this internet coverage essentially. went to the pentagon at one point, asked to be paid. not sure why they wouldn't it is not like they don't -- we don't pay all the defense

contractors wproviding weapons for the war. but it does seem as though the national security concerns are focused on that, not on his internship of twitter. >> well, look, i look forward to the way -- maybe somehow he can restore growth with new initiatives. not that great to advertise on unless you do branded advertising. i always felt like how could you not have a zip coded product where you could say free beer tuesday. >> and the ipo coming up i think it is the 7th at 26. >> oh, my god. >> yeah, we had dick and jack and everybody here >> really nice guy >> sir patrick stewart was on that day >> i remember speaking to jack and jack was like he had the receipts of who uses square. and -- >> oh, dorsey. >> yeah, he was completely normal cool guy. >> when are we going to have another big high 3r0eprofile --

obviously we talked alibaba. i can remember the uber ipo. >> had to wait for instacart >> instacart is not coming sflp spotify. >> i would argue that we have to go next door, but -- >> spotify was -- >> airbnb is the winner this year >> yeah, it is >> have you seen the stock >> no, what is happening >> no, not that one. that looks awful >> one of your dreams? >> no, no. just the one since the last four days >> well, how about at&t. i think another 3% today truest up graded friday and today strong buy, 24 >> they are taking it to verizon

hands down not even an issue. are you ever going to laugh at that >> i'm listening to misinformation coming into my ear. >> their point is that at&t will outperform >> yeah, i still think t-mobile is the winner. >> now i'm reading musk's tweets, why i'm not listening to you. >> they scat logical >> karl owing soig said they could not be read on air >> you can repeat it i don't know if i can. we got to wells on fedex cutting to equal weight and yet stocks not responding to the down side on that one. >> i read that piece it was like are you kidding? mine, the guy came on here and cut it to sell ceo cut it to sell he's finally catching up i mean, come on. how are they >> they are not good. i don't know why you would go after casperoff and call him an idiot.

>> kind of a hero. >> elon musk is a wild card. >> when i met a lot of people this weekend, all said the same thing, please don't go to -- i think somehow musk will make it so that there is a reason that you want to connect with people. >> he will make it a misser kindler gentler place? >> no, ai -- i don't know. >> none of us do let's look at the bond report this morning as we said, just flash pmis in a couple minutes yields reversing to the up side, dow holding on to a 275 point gain

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welcome back rick santelli here live at cmhq with first breaking news of the week, s&p global pmis, these are october preliminaries, so in two weeks, 2 1/2 weeks, we'll get the final reads. the manufacturing 49.9, expected to be above 50 this is the lightest level going back to 49.8 all the way back to june of 2020 on the service side, 46.6, also a big miss that is the lightest level since just august whenit was at 43.7 and that was the lightest since may of 2020. and finally the last of the trio, the composite, 47.3. adding to the trifecta of misses here, it was supposed to be closer to 49 in the rearview mirror, 49.5 47.3 is the lowest level since august when it was 44.6. which is lightest level since

may when it was at 37. so s&p global pmis miss and of course we see that yields, well, they are falling a bit especially in the intermediate part of the curve. vo: ferrari knows racing. palantir knows data. bonded by engineering excellence. palantir. data driven enterprise accelerator. i started as a single mom with $2000 and a passion for new orleans. i'm lauren haydel owner of fluerty girl. today, my tiny online shop has grown into eight stores. we're a must-stop shop for unique nola-inspired gifts. lauren doesn't just create cool nola merch; she creates opportunities. small businesses like lauren's open doors for neighborhoods to thrive. support your community. support small business.

>> market definitely liked the weak data. pmis under expectations on the manufacturing side, service and comp composite. >> if they are winning,

so you pay a lot more at the super market, you may lose your job, that gets out. >> true. >> that's not going to happen prior to the election. i just don't see - >> well, let's say the market plummets because they say, listen, we're not done and we will tighten into recession. you don't think there will be politicians who will say, not only are you -- is things much too expensive, but you are going to lose your job don't you think that's a very persuasive take on the u.s. economy if you're a republican >> maybe again -- >> like dr. oz >> i mean -- >> i just don't see it i don't know that part i don't see. >> do you think dr. oz orders steak cheese a-rod called me out this weekend. >> what did he say

>> he said i have to go with my buddy jim cramer and go with the phillies. >> very nice congratulations. >> thank you very much >> you had a lot to do with it >> you sound like my wife. >> bryce. >> they call me bryce. they called me chase before. i always say to my wife, we looked really good this weekend. she says, you look the same. >> we're not far from session highs this morning let's get to bob pisani. >> happy monday. we're in a bit of an uptrend the s&p 6% off the lows when we saw october 12th the vix is trending downward, and the two-year behaving, we're down a little bit from where we were a few days ago. that's a key rather defensive tone. if you take a look, the leaders had the open 2 to 1 declining stocks but it was consumer staples, health care was the leadership group we saw the risk-on/risk-off stuff. semis weaker, ark, those are

your risk-on/risk-off stuff. i notice energy stocks, schlumberger, now to be called smj. energy's new highs here. ex exxon's new high, hess with a new high and conocophillips. this is arguably the most important week of earnings overall. alphabet, microsoft, meta, amazon all reporting this week i think the key to understanding this so far, the technology names, if you put up the tech stocks is to understand where they're going, what the earnings trend has been for these technology stocks so far so, we have seen these numbers come down here if you put up the tech names here estimates for the big cap tech names have been coming down since the end of june. so, if you look, for example, microsoft's estimates have been declined 8% since the end of june apple, 2%. alphabet, 10%.

meta and amazon have seen significant declines in their estimates. look at that, down 30% and 40% meta is down here today on that downgrade. the important thing is the stocks have already reflected big moves to the downside and the estimates have already been cut. the other thing is the estimates for the overall growth sector, technology and communication services are reflecting these declines these are already -- these estimates and these sectors are already in negative territory. if you look at technology and communication services, they've already well into negative territory so far this year down 3% and down 15%. down 3% for technology down in fourth quarter as well communication services is where a lot of the big tech names are, are also down double digits, 15 and 11% if you take a look at communication services so, the other thing i would emphasize is the earnings are lower, but thanks to the profits of energy companies, we're still

in positive territory. yes, if you take out energy stocks, we're down for the s&p 500. if you own the s&p, you're profiting from the energy boost we have been seeing overall. third quarter up 3% for the s&p 500 still and fourth quarter still up 4%. they're still up this earnings recession everyone is anticipating, suddenly we'll be down 20% is not materializing, not yet the earnings so far, we have been beating 75% are beating by about 5% guys, this is about the historic average we had the last four quarters it's been higher, but we are not entering any kind of dramatic earnings decline or apocalypse, at least not now. >> bob, we'll see you in a bit bob pisani let's get to jim and stop trading. >> there was a report last week that was so good and nobody cared at all, csx had a monster quarter. they have a new ceo. he was questioned many times during the quarter like, what

are you doing here why should you be ceo? it was very disrespectful. they have somebody -- maybe norfolk southern, but coal is booming. and people have to remember -- now, down very low today but export coal because europe screwed up and everybody needs coal china needs coal so, they've -- by the way, automotive could be getting better cxs was better than the union pacific so stop lumping them together and show them respect to have a conversation -- david, it's like aaron rodgers. it's like, why should you be quarterback? aaron rodgers had a bad season but why should you be quarterback? tom brady -- no. why should he be quarterback >> he has no wide receivers. >> he gave me zero zero on my bench i had 90 points. >> rough weekend for brady, rodgers and wilson, even though

he didn't play. >> well, you've got to be younger to play quarterback. i tell you, burrows really - >> wilson, thankfully the jets won, but - >> jets are a good team. giants, good team. well coached. >> what about tonight, jim >> i have the jets tonight no we're going to blow people away. >> blow people away? >> yeah. >> okay. >> can i just say, a certain point reflects a lot of bad, does not respect the possibility of $100 billion possibility, ten times sales, instagram, any growth at all. and i personally like meta i say everybody has to have a presence in it, but it's early you're not paying a lot of money for being early. >> we'll talk about it all day today, i'm sure. see you tonight, 6:00 p.m. eastern time. s&p knocking on the door once again of 3800

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welcome to another hour of "squawk on the street. got some bullish action to start the week dow close to a six-week high s&p close to a four-week high despite turmoil in hong kong trading. big week for big cap earnings. >> that's right. we're 30 minutes into the trading session. here are some big movers we're watching this monday morning we're going to start with tesla, following cutting model 3 and model y. price cuts coming amid signs of softening demand in china and tighter competition, according to some analysts, among ev makers there shares are down 5% right now alibaba shares sliding as the singles day sales season, the world's biggest shopping festival, kicks off, weaker than expected gdp data. b a baba is at $60 change. they got a lot more on the sector coming up. finally, watch service now, guggenheim upgrading that name to buy from neutral, saying the

software company has, quote, at myrrhable profit margins those shares are up just over 1%. let's bring in mike santoli with a column out over the weekend looking at how markets are returning to the old normal of higher bond yields. what that means for investors. >> doesn't feel too normal in the moment, perhaps, when you have the stock market seemingly being led around bit surge in bond yields, gone from 1.5 on the ten-year treasury at the beginning of the year and ten months later we're at 4.25 the linkages have actually loosened up a little bit if you look at the performance of long-term bond prices, bond prices have continued to make new lows since the summer. stock prices so far have held at or above the mid-june low. that suggests it's more than the absolute level ofyields that matters. what does matter, do we have a runaway fed or are we going to continue to have that? do we also have inflation ever cooperating by moderating.

those two things have been encapsulated by this yield move. there is a case to be made in the very short term, maybe yields due for a pause, both because the fed may be sending out a mixed message as well as just a bit of a capitulation type selling we saw in global yields we'll see if that does take hold if that is the case, it seems as if this old normal of 4% to 5% safe yield coarsing through the system can mean bonds act as a buffer, mean you can assume more risk on the equity side of things and maybe it's a little more normal. just a quick data point. if you wanted 6, 6.5% yield, yo needed to buy junk bonds now corporate debt gets you 6 to 6.5% that might be good news amid the bad news >> goldman, the buyback window opening again. corporates, of course, a huge driver of kdemand

and cra and stiefel looking at midterm, perfect record since world war ii how much is at play today? >> i think that's very much in the air. people are aware of it but maybe not positioned for it so you have the combination of very, very defensive positioning, better seasonal effects. the midterm election cycle just a general idea that corporates have done okay. their top line is okay corporate credit has remained all right so the buyback story is in place. a trillion in buyback announcements at this point and $1 trillion or so last year, it should move the meelgdz a little more because the overall market is that much lower, by 20% >> thank you. let's continue this conversation with northwest mutual and jpmorgan's mira since friday we are seeing a little decoupling between the bond market and the equity market

>> we've been here before. we've been here multiple times where the market gets optimistic about what the fed may do but we have to wait for the data to play out we have another inflation report and jobs report before we think about what the fed might do in december broadly we're thinking the fed goes 75 basis points in november right now it's a tossup as to whether they go 50 or 75 in december it's a little too early to tell right now. we still want to be cautious in our approach to markets and not extrapolate too much from the price action we've seen over the last day or two. >> the calm before the storm brent, how do you see this market as we see a third of the s&p poised to report this week >> i think you're seeing some earnings positivity reflected in the stock market right now i think we're all hopefully starting to realize the shelter prices come into the data 12-month lag current shelter prices are beginning to moderate. housing prices are moderating. that will bring down inflation, the good side, moderating also

something i hear no one talking about, spot commodity prices are flat year over year. if you think about that, i think you'll see inflation begin to fall i think the federal reserve is in the last innings of tightening and i think better days are ahead for the bond and the stock market >> i want to dig into that first given the fact we have some uncertainties in the near term here ahead of that fed meeting next week, as we start to get more details out of earnings season, et cetera, how do you position yourself as an investor >> i think more than anything else in this environment we want to be diversified, not too defensive. if we think about walking that line between being cautious and overly conservative, we're seeing a lot of traditional defensive areas is some risk for example, we've seen treasuries rise from 2.6% just back in august to 4.2% today so rising yields is a risk. when we think about gold and what you could be getting in the very short duration areas of the market or cash from a yield perspective, that is a lost

opportunity cost there and look at areas more defensive, staples, utilities and how high they're priced right now. i think we need to think about not making any big bets, being diversified as kro the board as opposed to sticking to a defensive playbook that may not work the same in a high rate, high inflation environment that we're seeing. >> if the worst of the pain is potentially behind us, which is what i think i'm hearing out of you, what would you be buying into >> we want to be in the cheaper parts of the market. u.s. midcaps and small caps that trade at 11, 12 times earnings you have that margin of safety if you think about the offside of that, these are the areas that will do well also sector neutral value is trading at eight times earnings. if you think about your opening, the barclay's aggregate bond index offers 1.51% that was 1.75 in the beginning of the year. i agree with the diversified commentary

i think focusing more on extending duration more on the bond side and focusing on the two parts of the market i referenced >> if you're right and things are about to term in terms of fed policy, don't you want to have some exposure to maybe some names that have been beaten down the most in terms of the actual growth stocks, that part of the market >> i'm not suggesting you have to ignore those. i certainly was a few months ago. i think now they've come down quite a bit, there is some value there. perhaps for stock picking once again will return to providing value after decades of not providing much value as you think about the market and where opportunities are pushing forward. >> we keep hearing about strong dollar what does that mean for small caps here? >> because small caps are much domestically ordered, and we have seen small caps are relatively cheap i do consider small caps to somewhat be in the category of high yield if we head into economic recession, if we face more challenges down the road, that

will be an area that tends to struggle during those type of environments while the fundamentals might look okay today, we have to think about a few months from now where we could be and still be a little cautious again, more bias towards quality, which to us means a little more on the large cap spectrum >> thanks for kicking off the hour with us >> thank you. as we head to break, here's our road map for the rest of the hour, including a lot more on chinese tech stocks. the biggest laggards on the mdx as chinese president xi tightens his grip on power. we'll talk energy prices and a diesel shortage. the u.s. is dealing with the lowest stockpile of diesel fuel in october since the truman presidency. b of a cutting meta from buy to neutral citing ad spending concerns, metaverse spending a lot more on "squawk on the street" straight ahead n'gonyere. thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts

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chinese president xi jinping clenching his third term as leader it follows the week of the communist party's congress eunice yoon with a lot more. >> reporter: thanks, david president xi has now become china's most powerful ruler since founder chairman mao at the congress president xi revealed he secured a third five-year term and also broke in plenty of other modern norms for china, including not naming a

successor. as for his leadership team of seven men, vinst investors should know, it's packed with xi loyalists. reformers are also out and president xi's number two, who is set to become the next premier, is the current overseer of shanghai's brutal lockdowns those lockdowns have con trained china's economy that delayed economic data during the congress, has suddenly reappeared and the q3 gdp has suggested that there was a bit of a pick up, at least in terms of manufacturing, but then when you look at the september figures, those indicate that the domestic demand has fallen off. a lot of that because consumers are just not spending as much, not buying as many homes and also unemployment ticked up. xi's dominance, especially at

the congress, seemed to provide a flex move against one of his predecessors, ex-president huh j juntu was escorted out of the congress towards the end there was one state media reporter who suggested there could have been health issues. for the most part, most people see this as a signal that president xi has defeated his political rivals and has complete control over the government guys >>. >> yeah, eunice, we've been remarking this morning on the very negative impact we're seeing in chinese stocks, the hang seng and others was there something unexpected that came out of this beyond, again, sort of the idea going in that xi it was consolidating his power? what was it that occurred this weekend that is giving, perhaps, investors even more pause than was the case previously?

>> reporter: i think what was unexpected is how firm control he has over the government a lot of people thought he was going to definitely be able to consolidate power, but that it wasn't just going to be this extreme. he was able to take complete control. a lot of people within the market and also just living here have been very concerned about what all of this means in terms of investors, it means you won't necessarily see a whole lot of room for china's economic growth, the lockdown, the zero covid policy is going to stay in place. at least that's the suggestion and also his policies have been very state-led and wanting to regulate what beijing believes is excessive wealth accumulation all of that points negatively for private enterprise, investors as well as economic growth >> we've heard president xi is

basically planning to transform china into this global super power, arming for a potential confrontation with the west. we talk about decoupling of all of these new and emerging tech capabilities as well between the two countries. is the expectation that this strategy that's already been in place is now going to accelerate >> reporter: that's absolutely the expectation. and the reason why so many people have been nervous about what they were hearing in fact, state media today suggested that president xi had personally vetted the leadership team that was the first time we heard he had personally done this as opposed to what has been the previous tradition and that is collective rule. the fact he was vetting them and some of the criteria was just how much of a fighting spirit people had against the west. another criteria that was discussed, apparently, was just how much they could promote

china having its own homegrown core technologies. a lot of that points to confrontation. that's why there's been so much concern about where the relationship is headed >> quite a weekend, eunice appreciate the context there as you know, china-linked stocks under some pressure in today's trade and overnight in hong kong for more, let's bring in msa capital managing directing partner, ben markets taking it kind of hard too hard >> emotional overcorrection. it's way overblown i think there were over a lack of initiatives, stimulating the policy that came out of the party congress, but that's not unexpected these type of announcements don't hatch now. so i think this is an overreaction to the list of new nominees to the polit bureau, a

lack of lekachong and others and consistent overemotion reaction. >> do you see his power to be one that promotes economic closeness or openness? >> i think stability is first and foremost at their core, and as a party, the communist party dross its legitimacy from economic development people have to feel they are going to have better lives a year from now than they do today. so, those two things have been a bit in contradiction over the last couple of years of zero covid policy our hope is as the world comes out of zero covid, the world has and hopefully china soon, and xi having another five years head

of them, those things can become congruent and we can focus on economic growth that isn't seen as taking away from the stability in the market. >> the fact we got this gdp reading overnight and it was delayed to begin with, at least here in the u.s., there seems to be a lot of head-scratching about -- skepticism about what that entails we talk about stimulus in china and weakness in sectors like real estate, what are you seeing on the ground in terms of economic activity right now? >> certainly those numbers are better than expected but they came in bare lel with export contraction of major markets like the u.s. dropping their exports in china by almost 11% i think that leads to a clear consumption decline or evidence of a consumption decline because of zero covid, people are retaining wealth, not spending

discretionary income has fallen. people aren't sure in many instances where the next paycheck is going to come from the net result of that is they're consuming less i think that's the kind of counterbalance to that picture that looked positive certainly we're not out of the woods yet on the challenges facing the market from housing perspective and the looming threat of lockdowns continues. there's not a lot of positive news in spite of that overall gdp figure >> ben, bigger picture here, you know, the view seems to be xi jinping has stain more control over the economy, state control. from your perspective, as someone investing in companies, best use of capital in terms of actually putting it to work, how do you view that is there still going to be a vibrant world for which you do in that country in terms of -- the companies worthy of your

investment dollar? >> china has always been -- communism with chinese characteristics. in many ways i've always felt it was more of a free market than even what we experienced in the west monopolies were able to run rampant. there was actually fairly latent regulatory intervention. where we are today, though, is in a place where there are core -- there are certain sectors, particularly in the consumer space, that have already crystalized and there's not a lot of opportunity for new growth the growth has to come from industries that have more state level, involvement and support those being the biotech space, core technology, which is particularly going to see growth now as a knock-on effect of kind of continued u.s. sanctions in the space. there is an entwinement of government action and those sectors because they are so strategically important. we don't see that as bad we see that type of regulatory and capital support will come from the government into those

sectors as positive. it just doesn't look like the traditional kind of free-wheeling consumer focus technology market that many were accustomed to three to five years ago. >> does that mean you think some of the sanctions on leading-edge chips, ai and maybe quantum computing, is that going to offer a real setback to chinese innovation >> i don't think it harm's chinese innovation, per se it will take the wind out of the sail of some of the leading chip companies, autonomous driving folks, others who are dependent on having their chips built in the u.s. or based on u.s. software or hardware or other machinery used in the semiconductor space. we've seen accelerated evolutionary growth in the chip

space in china evolving faster than some of their predecessor markets like korea, taiwan and going from 14 to 17 nano meter chips. it doesn't harm innovation it just means they have to find other way of accessing the software and machinery needed to drive it. >> ben, obviously market wrestling with it. difficult questions. appreciate your help as always great to see you joining us on china. as worst day for chinese large cap in more than a couple years as the s&p has gone red. >> alibaba down 18.5% it's truly stunning, especially with remembering, again, we mentioned that the ipo eight years ago, i guess, over $68 a share. wow. let's move on to a stock that's actually up today raymond james is upgrading at&t to a strong buy, saying -- well,

what are they saying sprrp wireless subscriber adds and ebitda expansion that stock has had some momentum since reporting earnings last week you can see now down only a little more than 5% for the lomoreheye a t aad stay with us

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welcome back to "squawk on the street." let's take a look at shares of the communication services select spyder fund shares are down almost 1% now this morning a different story for meta platforms. down significantly more, about 3.5% falling on downgrade from bank of america with analysts taking the stock from buy to neutral. they say they see more potentialdown side to 2023, expecting advertising budget cuts to weigh on sentiment deidre bosa joins us to discuss this and so much more because it is a big week for big tech earnings it does seem like there's a

trifecta of factors in focus here, whether it is ad spending, health of the consumer, also cost-cutting your take. >> the recession these companies may be facing next year, that's what we'll be breaking down throughout the morning on "techcheck" as well. when it comes to meta and that downgrade, it feels like what mark zuckerberg loves, everyone else hates b of a note said even if ad rorz, meta may not be able to take advantage of it because of the divided focus on the metaverse. you heard a similar tone in brad gersner's note saying there's good core business, we can't get to it and wall street can't get to it because of this overhang, that would be mark zuckerberg's obsession with the metaverse, the name change, the huge amount -- billions and billions of spending they're planning on putting into it. this is a different story when it comes to the rest of big tech, though, this week. these are fundamental business model questions. when it comes to some of the others like apple or microsoft, they have been resilient this

year analysts and investors are looking for any, perhaps, downside surprises it demand not holding up as it has been so far at least this year when demand everywhere else is softening that comes close to amazon and alphabet again, there's a sense these companies have done a lot of the work this year to sort of get in line, lower their spending is it going to be enough that's the billion dollar question everyone's wonder we're going to hopefully get some answers to this week >> yeah. i mean, just in terms of some of these names, whether it is an alphabet, for example, they're already so beaten down from a stock perspective this year. how much further -- i mean, this is the question everyone is asking how much further could they actuallyfall if you see disappointing numbers here and just how much could they take the market down since we know they have an outsized impact >> yeah, i mean, exactly this is the question everyone's trying to figure out you look at an alphabet. year-to-date it's down 27% then you look at a meta, it's

down 60% year-to-date. the story when it comes to an alphabet is this is a company that's pretty well positioned when it comes to the digital ad market it's going to soften but is this going to be more resilient? the answer that wall street so far has believed, yes, probably, because it has search advertising, which is typically more resilient google has all of that access to the first-party data that facebook and snap and pinterest don't have that has really been hurt hard because -- but has been hit hard because of apple's privacy changes. when it comes to amazon as well, remember that efficiency, they overhired, they overspent on capacity over the pandemic they have taken steps to bring that better in line this year. is it enough is it actually going to be better positioned than, say, a target or walmart when it comes to the holiday spending season fedex raised red flags we'll see if amazon follows. >> we'll have to see what comes out of the u.p.s. earnings we

get tomorrow, too. deidre, we appreciate the preview ahead of "techcheck" and what's going to be a busy week for you. i know you and the gang have a lot more on meta next hour. >> i'm going to rest up. it's our super bowl. meantime, after the break, we'll catch up with alan blinder as the s&p trying to hang onto the flat line. 5%ards are back up, two-ye 4. 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.

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the survey business condition results out for october, two-thirds of spopd ents saying we're already in a recession or we have even better odds we will be within the next year our senior economics correspondent steve liesman joins us now i'm sure he's got a lot more on this survey. >> yeah. david, that's right.

on the recession part, but i also want to focus on this third quarter outlook, suggesting profits and sales are heading to levels that have in the past signaled or been commensurate with recessions. take a look here the net rising index, that's what we call the percent increasing minus those decreasing, and this is for sales decline to 20 from 29.6. the index for profit margins coming in at minus 17. more companies see declining rather than rising margins reflecting a challenging environment for companies. wages and input costs look to be pressuring company bottom lines. wages are still expected to rise in the next quarter and material costs and prices charged are also positive, though they're all off their peaks for now. one bit of good news we got, capex and employment plans still remain strong. markets processing the outlook for profits and for a pivot from the federal reserve with the latest fed speak raising questions if there's been some kind, i don't know what you call

t change or alteration fund peak off high water mark of 5.03 that's still high compared to where we were each last month. >> we redefined what a pivot is. we redefined it from meaning lower rates to pausing to slowing. if you redefine that, you will have liquidity effect. we're getting a liquidity effect rather than fundamental effect >> the chance of a 75-point base rate hike, 49%, call it 50 for december there's a december debate but it's not over cuts, it's not over pauses. it's just over whether the pace of hiking is a quarter point higher or lower. that is whether the funds rate ends up going up, i don't know, 425 basis points this year or 450. people got excited about that

difference on friday. >> indeed, steve something we'll talk about with alan blinder for more on the economy and fed policy, let's bring in alan, former federal reserve vice chairman, now professor at princeton university author of a new book, "a monetary and fiscal history of the united states. great to have you back good morning. >> morning. >> i thought of you because goldman has a note out today essentially arguing the consensus for peak fed funds is not enough to drive the economy into a recession their recession forecast is below consensus. this seems like something you might have written. >> i don't think so. i think the odds are certainly greater than 50% we'll have a recession. what i've been writing about and speaking about on the air, it's shaping up probably to be a mild recession. part of the reason for that is i don't think this fmoc is going to go crazy and raise interest

rates way, way up. they are going to go up for sure but i think they're going to keep one eye on the economy in addition to the inflation rates. i'm 50-50 with goldman and 50-50 with not. >> does that balance come into view at this coming meeting and presser, or is that more a function of 2023 >> well, i think december. i don't think it's coming into view for this meeting. this meeting will put presumably the 75 basis points are going to happen i certainly think so everybody thinks so. that will put the upper limit to four once you get to four, i think the fed was rightly in a hurry to get to four once you get to 4, it's worth thinking about, seriously, about how much higher you want to go probably somewhat higher, but if you're galluping along at

75-point increments, you're going to get very high very fast i'm expecting jay powell, though it's hard to do in the statement, i'm expecting jay powell in the press conference to tone down expectations that the fed is at 75-basis point increments forever, and to sort of hint that a slowing in the rate of increase not stopping a slowing in the rate of increase as steve liesman was saying is in the offing right away >> just to dig into that a little more, alan, this idea that mohamed el erian just laid out in steve's report, this idea of redefining the term pivot and the fact this is less about a fundamental effect and more about a liquidity effect as the fed continues to tighten, do you see it the same way? >> you know, i'm always -- i never quite understand what distinctions like that mean. you know, markets want to pivot on every tidbit of news. if you told the markets that instead of 75 basis points, the

fed was going to do 69 basis points they would go nutty and have a pivot. i don't see this as a pivot. i'm going to see this as a well thought out -- we'll see if it works -- strategy. you don't keep going at 75 basis points forever >> do you think the fed should be including more data in its data dependency right now? i know there's focus on readings we'll get at the end of the week, but given some discussion at least from a market perspective on shelter prices and stickier aspects of inflation have already peaked, should the fed be expanding its horizons in terms of how it's making its assessments >> i don't think so. i think from the outside it's very hard to understand how wide those horizons are the fed has over 200 economists

working at the board, never mind that the reserve banks -- they look at everything if you're a member of the fmoc, as i once was in far ancient history, you are bombarded with data from the staff. look at this, look at that, let me show you this i don't think it's a question of -- anything you can think of they're looking at, i think, in unless there's something really strange. >> alan, you began this interview, i think, by saying you expect a mild recession. what does that mean? what's mild look like? how long does it last? how deep is it >> to me mild would mean a contraction of gdp of under 1% i'm not going to quibble about 0.9 versus 1.1, but something like that. deep recessions tend to look more like 2%, 3% decline in gdp. real whoppers are bigger than

that, like in 2008, '09 we had a 4% decline i'm not even mentioning the gigantic fall in the pandemic recession, but something in that kind of range is what i mean there's no official definition, but that's what i mean by a mild recession. >> again, how does that last a very short time as well? >> well, that's part of it a decline like that, we don't necessarily bounce right back up immediately, but a reasonably strong recovery that you don't -- certainly that you don't go down 1%, say, on gdp and then trundle along on the bottom for two, three, four quarters i would not call that a mild recession. >> we mentioned your book at the top, alan. i'm sure it has a lot in there about the '70s and volcker and getting angry 2x4s in the mail

nothing like that in your future >> i don't think so. the i don't think so part is mainly because there's so much anger in the country in general now, it's horrible, not necessarily directed at the fed, and i'm sure jay powell is happy about that, but who knows when some kind of appearinger bursts out anywhere these days. but the point is that the powell fed is not going to have to put the economy through the kind of wringer that the volcker fed did. paul volcker inherited an inflation problem vastly, vastly larger, deeper, stronger, more ingrained than jay powell has to deal with now. not to minimize what powell is dealing with it's a serious issue but, you know, paul volcker had to wrestle with the 800-pound gorilla of inflation, and he did. >> i can't wait to get ahold of the book

it sounds fantastic. we appreciate the guidance as always we'll talk soon. thank you. >> thanks, bye still to come, we're going to talk energy prices and the diesel shortage in the u.s nat gas touched its lowest level since march earlier today. trading higher right now so are wti and brent crude futures. don't go anywhere. fsd pharma is developing new treatments for neuro and inflammatory disorders. in a breakthrough discovery, fsd pharma recently demonstrated positive effects with their drug in treating ms in pre-clinical mouse models. fsd pharma

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welcome back to "squawk on the street." we're going to check in on the energy market it is with futures for crude higher, nat gas touching its lowest level since march 21st and reversing course, bouncing off early lows. here to discuss, john. great to have you on the show. let's talk about diesel. we've seen refined products, particularly diesel, remain particularly resilient which we know has knock-on effects to the

broader economy. >> yes, good morning, morgan no doubt about it. definitely diesel fuel, distillate fuel are the problem child of the petroleum complex at the moment. being down 50% or so versus last year and even more than that versus two years ago demand remaining relatively strong we've lost some refining capacity over the past couple of years because of poor margins, which have now, you know, exploded higher. the barrels being run through refiners are fetching the equivalent of $85 plus when you cash in that diesel fuel because of the low supplies. and it's also the impact of the situation with russia because the u.s. had already cut off

imports of russian distillate fuels we became reliant on and a by-product that helped to make gasoline as well to that extent, the war -- the ukraine war has come to our doorstep and we're obviously entering the crunch period because the diesel trucks bringing the holiday merchandise to stores is the heating choice for those in the north to the fact natural gas gets tightly supplied in the winter and utilities shut off to commercial customers to be able to supply the home, even more demand for diesel fuels. so, you know, this is where we got to sort of buckle down here and keep our fingers crossed a bit. >> well, this does not sound very uplifting it raises the question, what would actually remedy the situation, particularly in the near term? is there anything?

>> well, look, i could paint a parade of horribles going into next year. since the war started, there's been worse case scenarios that predicted a lot of bad stuff price wise and supply wise for the petroleum complex. hasn't come to pass, for the most part. this one is the most scary look, refiners are pretty much at the tail end of their -- there is about 5% to 8% of refining capacity that should be brought online in the coming weeks here so, that will help we are starting to attract, believe it or not, some volumes of fuels, diesel fuels from europe to the u.s. east coast where the problem is the most acute. that has helped helped at times over the summer. the harvest is wrapping up now, so we'll lose some of that demand but we really need the refiners to do all they can at this point to ramp up what's left of the production, you know, wallet, if you will, or band width and get this going

we need to be lucky. we need to have a relatively normal or warm winter, which is a real possibility given what's called the la nina effect that's been in effect now for the past three years. this will be our third season of it and what you get, if you recall, you get some bitter cold days but then you get stretches usually stretches usually of relative warmth in the northeast where days feel balm my, and you don't need that much heating oil thankfully to get through that. >> certainly what they're talking about in europe, john, quick on european gas, the warmer weather, how long can the relief in dutch gas be expected to last? >> they're getting lucky, carl we've been lucky all year for the weather situation. the winter forecast for northern europe is a mild one and zero e

demand here through the end of the month based on the weather modelling we're looking at so so far so good. we've done a terrific job in storing our own u.s. natural gas, our inventories have been bolstered over the past several weeks which just slightly below the five year average, which is why you see it break below $5 a unit on friday and close under that level for the week. so again it's been remarkable to me just how lucky consumers have been let's hope that keeps up because that's where we're at right now. >> john kilde, thanks for joining us coming up this morning on "techcheck." we'll check out the downgrade of meta stock down more than 60% year to date as we go to break, biggest laggards on the nasdaq 100 you will not be surprised to see china leading the way down we're back in two.

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welcome back to squawk on the street i'm dominic chu. consumer discretionary stocks are the biggest laggards with the s&p up about a half of 1%.

we've seen similar declines to the declines in chinese tech we have a number of u.s. firms with chinese exposure that are sharply lower today as well, like las vegas sands and wynn resorts. also starbucks and nike as well. tesla hitting a fresh 52 week low after slashing prices in china for certain vehicles the declines come as investors weigh themes like president xi's tightening grip. i'll send it back to you on the stock exchange. >> see you in a bit. two big days for cnbc's 2020 work summit we'll bring together top names in business, policy, labor, banking, to explore the future of work and find solutions. go to cnbcevents.com or use the qr code your screen. we'll be right back.

welcome back check out fedex this morning,

wells fargo downgrading to neutral price target down to 160 bucks a share. warning there could be less profit for growth and weaker revenue growth the stock is higher right now about 1% but down about 40% since january. we'll get another read on demand when we speak with its major competitor, ups ceo carol tome is going to join us here on squawk on the street at 10:00 a.m. eastern time and, of course, key commentary there on the state of the global economy. david. >> looking forward to that in the brief time we have left want to focus on shares of meta and on this announcement we got a couple hours back that merrick garland and justice department officials are going to hold a press conference on what they call a significant national security matter. look at that rebound we talked about the downgrade, the letter from al timter saying

you can cut a lot of costs a lot of rumors out there that this national security matter is related to potentially chinese espionage, you can get there very quickly to tiktok crackdown on tiktok. if that were to be the case, pure rumor, would be beneficial for the likes of meta. that does it for us. "techcheck" is next. >> welcome to "techcheck" i'm carl quintanilla with deirdre bosa and jon fortt a series of upgrades and downgrades today we'll parse through those calls and bring you the names the street thinks you might own. a cnbc investigation finds the former ceo of google made investments made ai while chairing a commission. and big tech versus recession, deep dive on alphabet, meta, apple and microsoft.