>> they are not going to be able to act quickly. i feel the ceos need to act quicker from that stand point. >> great answer. thank you. thank you to joe, as well. we have seven seconds. yes or i don't know what with we can do. we can't get in to football. join us tomorrow. squawk on the street is next. . good wednesday morning. we're at the new york stock exchange. alphabet and microsoft and tech in. strong results out of industrial and lee sures along with with lower yields and weaker dollar. our road map begins with the nearly $2 billion revenue missed by boeing with air force one and tanker programs.

we have big technology disappointments. they are alphabet and microsoft pointing to the challenges faced by these major companies as we have a slowing in the economy. and not factoring in a recession, visa saying it sees no evidence of consumers filling the pinch. let's begin with tech giants last night dragging down the nasdaq. microsoft down sharply as it overshadows a quarterly beat. a alphabet posting a miss. on the earnings call last night talking about reducing head count this quarter. >> q 4 head counter conditions lower than 3. we will make important data needed and focused on operating expense growth. we are reviewing projects, you know, at all scales. pretty granulely to make sure we

have the right plans. based on that and making course corrections. >> jim, you brought this up with andrew a few moments ago adding almost thirteen thousand in the quarter. >> that's an odd way to fire. add thirteen. >> he didn't say fire he said we're going to reduce our additions. >> we have to recognize a couple of things. as long as we've been sitting together it's been the first in the cloud. in honor of baseball season probably it's a rainout and might be the fifth inning. i think these companies are good companies. don't get me wrong. the multiple has shrunk. i'm not sure it's right to sell. but these are companies that seem to not uniquely understand the need to call in to do a reduction in force. i think that a company as a cfo

done her share of firing in her time. but, david, these companies are fat, they are happy and they are wrong. >> i hear from that other investor, too, jim, i'm sure you do, as well. whether or not these company, these big technology companies are able to execute on what you're discussing, which is basically cutting people in order to enhance margins heading in to what many believe is going to be a continued slow down, remains a key question. we saw the letter from brad gersner earlier in the week bracing a theme many have heard. we have questions about productivity. how much fat is there? how many people are working from home how many hours are they really working? that may be part of the culture. just keep adding people. i think to your .1 of the more surprising elements of this quarter was not the slow down and ad spending and not, perhaps, reduction in top lying

growth. but they added 12500 people during the quarter. >> right. the unrealistic nature of that company is shocking. when i city about what starboard said about sales force. you know i like sales force. when i think about what gersner said. >> about meta? >> yeah. i say to myself, okay, it's taken activists for them to realize they have too many people. as there's an old line industrial that hasn't fired people. i will come back to something if you go back to what zuckerberg said on the previous call. he made a comment. the worst is yet to come. i went back over and did a close, i'd say what i did was he was not speaking about the worst is yet to come with meta. he was speaking about the worst is jeyet to come with the econoy the fact he's been the butt of many jokes with meta.

he's trying to get away from advertising. he saw and they are firing. he saw this coming. >> they need to deal with cost structure, as well. carl i hear it more often companies talking more openly, as zuckerberg did a while ago, about the possibility of a real recession. in a way even, frankly, that wasn't the case four to six weeks ago. >> that's right. it's amazing there was full stock in semiconductors full stock. one thing that's amazing. i'm not sure we have jim coming up, caterpillar. these people have seen it. they know what to do. they know if you have too many people you go. the government has given so many orders to caterpillar that caterpillar won't be bad. but the government is not giving o orders to these. what's so interesting is did

someone not know at alphabet that there are fewer crypto ads? when you have a 20-year decline in mortgages did it not dawn on there there would be fewer mortgage ads. >> the worst performing etf of the year is the new bit coin spot etf. more money for investors. >> to jim's point that was reason it was down 2%. the size of the companies is stunning. you said it, they are incredible kpaens generating 63 billion in free cash flow. we haven't gotten the microsoft numbers. i'm hearing from investors there's faith in the ability to manage at microsoft or alphabet and others as they are still strong. the name microsoft often it's the safe place to hide and it still may very well be there. >> it's where it was a couple of weeks ago. that's important. look, i think the world of amy

hood. i've known her 30 years. i'm not saying she drunk the kool-aid. she's not concerned. concern is the course of the day. we're going to watch those two. huge implications especially for meta. boeing is another. phil has a special guest. >> good morning. dave calhoun ceo of going. good news, bad news quarter. we'll talk about cash flow but we start with the charge. $2.8 billion defense related for fix priced programs pt expected losses the next several years. what's the problem here? >> an environment, i think, described to your viewers and that i experience in and our company experienced is a rough and tough supply chain world with a lot of pauses, a lot of inte interruptions and those things.

in affect what we've done is run through the programs, which you have to do from a contract standpoint. we're not going to get better. we'll accept the world as it is and run out for the year to year and a half. the cash burn rate doesn't get worse it simply doesn't get better during this period and that's what that charge reflects. >> a number of people looked at your bids for military contracts, government contracts the last several years and said where are they coming up with this they are too aggress and won't make money. then you have air force one. let me be blunt. was air force was a mistake to agree to the price president trump said you need to agree to? was it a mistake >> it turns out the critics were right. we didn't get enough price obvious to all of us. no one anticipated the environment we're in respect to inflation and all those things. honestly, the biggest mistake on air force one was the fix price

a nature of it. when a program that requires that many agency and that many things to come on a particular platform and there's only two of them. that begs for more of a cost incentive contract. the good news is, i'm not going back over that. it is what it is. we're going to finish these programs. the tanker program is going to be a great program. it is serving the air force in a big way. we have 60 of them flying around the world supporting military men and women. we're proud of them and will finish our force the same way. we'll be proud of these products. in the men antime we haven't tae fixed price development contracts and not our intention to do so. jim has a question for you. go ahead. >> absolutely. good to see you. i've been at times critical of how boeing has done. i must say wide body orders is your wheel house.

narrow body, i think china may be playing with fire. they need more planes. you have them. i have to imagine that you have far more demand than they realize, particularly, if we decide to limit semiconductors for what they want to make. i'm questioning whether this is indeed your time. >> jim, again, it's exactly the right point. while there's a lot of discussion about supply chain con stranlts in the world and our industry, demand has, frankly, never been more robust. it is everywhere in the world. it was always strong in a narrow bodied world as domestic market res opened. it is now getting strong in the international world as the international routes are beginning to open and covid is in the rearview mirror. the one exception is china. we are free traders. we would love to continue to do business with china. we are not going to put

investors at risk going down this path. we continue to derisk the backlog we have and airplanes we have on our tarmac. we will support china. we will support our kcustomers n china but not taking the investor risk we have in the last year or two. >> it sounds like you might have something up your sleeve. it's hard to believe you come on and said what you did if we're not about to see big orders coming to boeing. is something happening >> yeah. it is happening. in fact, you'll see orders today on exactly this subject. i do see a robust market, conversations, discussions, negotiations going on everywhere in the world for orders of magnitude and size and scale. and our customers know it's a con trant we live in so it's more aggressive, not less.

demand is not the problem for the boeing company or our industry. we need to get the supply chain under control and stable to meet the demand. >> when you talk about orders. alaska airlines converting options for 50 in to a firm order for 50 737 max's including the dash ten. the stretch version. that's not going to be certified by the end of the year which raises the question. you heard us talk to scott kirby at united airlines last week. he said if this doesn't get a waiver in washington we won't order it. we'll go to air bus. that's not an idle threat, is it >> no. two questions there. the first one couldn't be happier with the order from the guy from alaska. why? it's the max. they ordered the max. one of the early players to order it. these airplanes are meeting all of their targets. the efficiency, sustainability

element of it. they want to go with the airplanes and that's it across the board with the experience. the 787 same thing. couldn't be happier with the airplanes they are getting and wish they could get more faster. for scott his comments are on the money. they are what they are. i'm confident we are going to get an extension, the dash seven meeting southwest unique demands and the ten, which meets global demand in a pretty big way. we will get an extension and certified as safe airplanes. i'm confident in that process. i don't want to forecast dire outcomes but scott is pretty right about what he sees. >> he's pretty right but we're here in washington. we're not far from capitol hill. have you expressed this? look, this happens or some of my customers they are not just making a bluff. they will go with air bus? >> yes. we are talking to as many people as we can on the hill. we've talked to the

administration. we've largely, if not entirely, had support across the board. not because there are threats being made. simply because this is the safe answer for one of the great airplanes in the world. we're going to maintain that attitude and stick with it and appreciate the support from the faa. they have not dropped pencils. they are working full speed on trying to get the air plains certified. >> dream liner you delivered nine quarter which is why the free cash was better than many were expecting. how quickly can you raump up production not just of the dream liner but the max. and suppliers you have to work with them because they are running in to manpower issues. they can't find the labor in order to ramp up their production >> it relates back to jim's question on demand. if this were purely demand driven our rates would be 38 and we'd be working on the next move to 45. that's not the case. we work hand and glove with our

engine suppliers because that is really the rate limiter and/or determinant. we have to be clear with engine guys and vice versa and we are. greg and larry and the teams we compare notes all the time. that will be constraint. i am looking forward to the investor conference in a week from now because we are going to give them the best glance of what is happening over the next couple of years. >> robert ison he said we don't just need boeing to be good. we need boeing to be great to get back to where it was. can you get back to where you were in terms of the cay dance of delivery, production increases up to where you were before the max indents and crashes in 2018? >> i'll maybe couple of quick comments. boeing as it was, boeing had the trust of its regulator. we regained, we are regaining the trust of our regulator

working hand and hand with them. not putting deadlines on them. the quality of the product portfolio. will the public want to fly it yes. across the board, robert said himself how much he liked the 787 and passengers liked the 787. the last straw is the supply chain. get it stable, predictable and deliver. that is what robert now is referring to. we're all over it. we're working as hard as we can. like my counterparts in the industry we have to smart about it, patient about it and train the workers moving in the industry the right way and get that done. >> dave calhoun ceo of boeing where they reported a huge loss because of the 2 prnt $8 billion charge related to fix price defense programs. but better than expected. back to you. great work this morning phil. appreciate that. still to come this morning. bristol meyers chief on the

companies earnings and where the strong dollar fits in the picture. we get to visa and kraft and mattel and more. don't go anywhere. (vo) give your business an advantage right now, with nationwide 5g from t-mobile for business. unlock new insights and efficiency,

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on your wireless bill over t-mobile, verizon, and at&t. talk to our switch squad at your local xfinity store today. consumer spending boosting visa bottom line. stocks up on the quarterly beat helped by a jump in payment volumes. 20% dividend authorizing a buy back $12 billion here's what al kelly had to say

on last nights earnings call. >> we face some head winds, in plr, a challenging environment. a steep economic downturn to accept what occurs it will have some impact. that said we recognize that some economies around the world could face increased pressure that we will monitor things very closely. >> payment volume, jim, up ten. prior quarter up twelve. >> i listen to that. good quarter. no doubt about it. i want to revisit american express. i know american express dook a vision but they expect more business this travel quarter. it's funny. if american express reported tomorrow the stock would be higher because what visa is saying and confirming to a lot is that in the new war, which is what we feel we went through with covid. we feel like we've won. if we have won that means go

places. boeing has 787. that's why i like american express and visa, which no provision is in pursuit. >> interesting. contrast to american express last week the stock of which went down because of that perhaps larger than expected provision. their point is because we're doing more business. but the overall point, people have been traveling for quite a while. the question is would it diminish it doesn't seem to be. >> no. carl this psyche of america has changed. i'm not just talking about the people who today three-day weekends because they are not working as hard and we can debate that. >> or kirby said they travel on days they didn't normally. >> hybrid days. >> is it possible. we live in a world talking about a strong dollar and weak dollar. i think the american people realized the dollar is so strong they are going to places they've never been. you see extremely full flights to cities flying empty because

americans recognize, you know what >> hilton up above 2019 for the first time and that's with occupancy six points behind. >> that's amazing. go back to airbnb. they had a good quarter. i don't know why the stock is going up a little bit. i think what hurt surprises with google. there could be travel advertisements but we didn't know crypto was more important than travel. >> we'll get cramers dash count down to the opening bell. names to get to and more on the y wain forms of meta. don't go anywhere.

looking at nasdaq. microsoft on the list. t coming up in a few moments bristol meyers chief giovanni caforio.

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let's get to a mad dash. we have two minutes before we start trading here at the nyc. n norfolk southern. >> the ceo will join us in the next half hour. i hope he gives us a good break down. remember, i said the other day csx. >> union pacific not as good. >> coal was good and various cargoes. trying to demonstrate if commerce is increasing or decreasing. railway operation was a record.

income a record. net income, a record. per share, a record. these are all good news. what it says to me is they have pulled, too. keep in mind that and what i was talking to judy about o tis. >> this is coal shipments not necessarily for domestic use but export. >> the germans seem to out smart themselves in that dedsire to be green they've gone brown. >> the result of no natural gas coming from ru ssia. yes, they didn't plan for that and now relying more on coal which is dirtier than natural gas and shut down demission of nuclear plants. not great planning. >> what is incredible to me is it's ironic. the ramp up in this country is c coal. we can't produce enough coal.

if we could i wonder if mr. shaw, the ceo, whether coal is seeing a sub strength. >> let's get the opening here in the cnbc exchange. the challenge at the nasdaq it is driving technology company mobileeye celebrating the return to public markets. the ceo a guest later on today. raising about $860 million on a $16 b $16 billion valuation. >> you may want to be skeptical of that process. it was a profitable company when intel started but it's not

profitable anymore. what was accomplished there? i had mobile eye before intel bought this. i said this is a high growth company making a lot of money. now there is not a growth, wors worthless and losing money. incredibly nice people at intel. >> well, the market agrees with with you as you take a look in the last few years held for investors. not a pretty picture. now is mobile eye and selling park back in the market. it was a miss in a leap in terms of how many on a chip and when they missed that it fell apart from there. pat kelsinger trying to regain that market share. >> i would have expected more

from mobile eye because people like to pay up for autonomous. by the way, i notice on our so called crawl underneath. microsoft still has not found its footing. i think a lot of that has to do with the fact when you listen to the call it sounds like an excellent quarter. alphabet and microsoft. if a company like caterpillar started his call when his company was doing poorly with the way they started. we would be calling for his head. >> what's your view? we didn't talk as much about microsoft at the top to have show as alphabet. let's talk about googles cloud, as well. obviously, the growth rate has slowed but it's still a significant one. >> it's good. the cost went up. there seems to be more of a scrum involving cloud.

asier is doing well just not as well. i would have started saying we are not up to what we were hoping for. carl, this idea of another good quarter. can we save that for companies who say have another good quarter. >> the research about microsoft is titledwinter is here. the damage came from asner not just the miss but the q 2 guide of 37 constant currency the largest sequential growth on record. >> the cloud is no longer in infancy. all these people come on air saying we are early on the cloud have to revisit. and a lot of companies have the cloud. i think we have to be very tough on people who say, you know what the cloud is so early it's not the first inning. no. i would say that it's game three of the world series. >> what's game three of the

world series how am i suppose to get that to innings? >> a lot of people tell me. >> what inning are we in in the cloud? the first or second? >> probably the fifth or sixth inning >> we're that late >> yes. >> they brought in relievers. >> your starters who are relievers. i'm telling you. these people are going to fight that description tooth and nail. they are going to question the critics who they will say don't know what they are talking about. but a deceleration is a deceleration. only in the world of silicone valley which has never seen a deceleration of anything. do we have other worldly group of people saying it was great, idiot. what don't you see >> this drop here would be the biggest since covid for microsoft. >> we found out that

advertising, not only an advertising model. i think what we saw with them was they, remember they did that quarter where they came out with the surprise about the dollar? >> yeah. without a doubt. sales overseas and getting hit by astrong dollar. >> i felt with the american election power and nick hagan retiring this week. they have low cost. but the energy costs, here's something they didn't flag. the energy costs in europe have raised the cost. you have top line going. you have costs going up. but, david, it's never been better. >> all right. operating income up 6% and 15% in constant currency. to your point the dollar having a significant impact. margins down two points year over year to 43%. carl, what is still interesting at microsoft is their head count was up 22%.

>> that's what i'm getting. >> that didn't include acquisitions so they added employees. >> yesterday, i forget who it was a note on amazon. awx has expenses oversees and stronger dollar helps them in that regard. >> when i was at aws they were still hiring. they are no longer hiring. >> i just want to make a point. that came up this morning. amazon seems to be taking on costs in a serious way than microsoft or alphabet focused on getting margin back in the retail business or getting serious margin there. maybe more of an inflection point. reading from notes this morning on a conversation on this given their focus on costs. >> these companies are no longer leaders in the narmarket. i think these companies have a very unrealistic attitude if this continues except for

amazon, which has become quite schooled in firing. and mark zuckerberg who told you things were going to get bad >> is mark going to fire people? >> yes. >> in a current world it takes a while to reduce your work force. there's hr and lawyers that have to get involved. not unions but it's not easy to fire people. >> let me tell you how to do it. i've done it. >> things have changed. >> just for the record. i never picked those names out of the hat. >> back in the day you threw a phone at somebody and said you're fired. they left. >> it was never a phone it was a bottle. now i'd be sued by the bottle companies. let's go over this. i'm not being glib. what i'm saying is you can't hire at the same time when you need to fire. you can't. it's counterintuitive. >> alphabet invested through the cycle.

that's what they are going to say. sorry jim. we have a growth business. we always have. growth is slowing right now. we're going to keep investing. we need to. >> okay. fine. how about this. let them continue to do it and have the stock go down to where it more reflect then buy it. how about that that's not bad. >> you made the point on alphabet earlier this thing traded at a discount to the market based on the growth rate already. it's like alphabet traded for years as a high multiple given. >> no. it's got the multiple you would save for a tool and die company. one thing i look at is stocks were more realistic than the companies. now the companies are catching up and you're discovering much to many peoples chagrin who had been in them, wow. i didn't know the companies were doing. why do you think they went down so big

eventually you'll get a realization, as did lisa sue and jenson where they came on and said, you know what? slowing. we've got to be careful. what i didn't like was i think it's more attitude. it's more of you know what it's slowing. it's getting tough. we're only hiring twelve thousand people. they do not seem to understand their own punch line. >> microsoft, by the way, subtracting about 130 points from the dow. we're still higher. jim you talk about tool and die. companies that raised guidance today? hog, roper, wabash. >> these companies have gone through hard times and know just how to do it. you know who else? the banks. look at wells fargo. you think they are on a hiring spree? you think sharp is saying business isn't that good hire twelve thousand people.

companies who have been through cycles are handling this moment so well. i've been saying over and over. the firing, david, is in silicon valley. those companies are discovering we have too many people. >> i have one company reducing its work force head count reduction of 8% seem to generate run rate savings of 110 million. c gate which reported disappointing quarter. i think you can see what the stack is doing. they reported customer inventory corrections worsen later in the quarter. likely contributing for further loss of lercverage. this is a note i'm reading. revenue below many analysts estimates and they reduce their guidance, as well. >> that was terrible. >> it had been 2 to 2.2 billion so lower guidance of previously. not a great quarter. also something about an

investigation in terms of they put out a filing. they received a proposed charging letter from the u.s. department bureau of security with violating regulations. acting in violation of that by providing a hard drive disk to customers and affiliates on a barred entity list. >> what would happen if the chinese planes use are filled with american semiconductors what would happen if an agency said we're not going to let the chinese have our semis. if china doesn't buy the last hundred planes on the tarmac they are going to go to other people quickly. i do want to point out. i'm going to give a contrary view to what happens if you get

a sobered analysis from any of the people at alphabet or m microsoft you will want to buy. the reason i say that micron went to being bullish to bullish to bullish to bearish to bearish to bearish. >> bearish, bearish. on the third bearish. on the third realization things got quite bad stock went from 48 to 57 and is up to. those who want to sell these companies. all you have to do is have a cfo say you know what? we see there are problems and we're going to do what's necessary. as sanjay has. look at that. i call that bottom. be careful. if any of the cfos come on and say i listen to jim cramer. he's ill advised. we're taking the medicine.

we're not just hiring and putting a hiring freeze on we're looking for places to fire. then you say the next quarter is going to be bad. that's the second bear. then you have to buy. we might be closer to bottom than top. they need a different attitude. >> would you argue that's the tone last night. they cut the guide. it's new 52-week low this morning. >> you can sell it now but you must know we have mattel movie coming out. fourteen new movies coming out. sell if you want to but understand we are going to be an entertainment company next year. that was one of those be my guest and sell it if you'd like to. another be my guest and sell it is chipotle. >> costs up 20 on a two-year stack at cmg. >> they still did well. analysts tried to pitch them saying it's not doing that well and that's because it is the beginning of your prices are too

high. i thought that was hogwash. they had four different elements, very important elements. dairy is up. all i can tell you. if chipotle had a break in one of many commodities you'll say i sold it because of small town comp sales. you'll be wrong. stocks to buy. got it. moving in the opposite direction of wing raising guidance again. 161 to 163. prior 155. three times the test mates. >> wing stop is not known for its ribs. >> got it. stock goes up. >> that's what they sell. they don't say ou wing costs are

down we're going to do two for one. someone has to give us a break. maybe we'll get a break from brin bristol myers. the invention and reinvention which is why i'm thrilled dr. caforio the ceo. incredibly strong quarter. a mixed quarter being done by new drug and old. i want to focus on some of the new ones. i think they areimmediately profitable. if you don't mind going through your portfolio of drugs that didn't exist three years ago. >> thank you for having me today. i am pleased with the quarter and the year and that is because of new drug and we are successfully renewing our portfolio. our business today is much more diversified. one of the youngest portfolios in the industry. this year we have launched three

new medicines. three first in class medicines for very important diseases. from melanoma, for my yop thi and our new inhibiter for psoriasis. you look at bms in the last three years we launched nine new medicines. that portfolio is analyzing already at over $2 billion in revenue and continuing to grow. when i look at our industry and our company it's really important to continue to innovate and beyond the new launches i just described, we have a next wave of new medicines coming from early development to late stage development which gives me confidence in the future. from my perspective our guidance today for if years. more importantly we are on track to continue to deliver growth for the rest of the decade. >> because of a tragedy

involving my wife, i'm well aware of hypertrophic cardio my yop thi. if you don't mind talking about it this is one of the more hopeful stories. >> thank you. it's a medicine that comes to us from the acquisition of myocardia two years ago. we have a long and important leadership in cardiovascular medicine. we launched this new medicine earlier this year. it's a new class. it's the first time we are able to offer patients a medicine that actually treats the underlying cause. a disease for which has been nothing available so far. the launch is going extremely well. there is tremendous enthusiasm

for patients because of the impact it has on their daily life and physicians are very, very interested in being able to offer a new treatment option. patients that didn't have anything available so far. i think it's a good example of the type of innovation we develop at bristol myers. >> let's go farther on cardiovascular. there are some analysts saying your numbers were disappointing and it was not up to snuff. i look the opposite. you take care in eliquist and it's a remarkable drug. i read this as another strong quarter. >> thank you jim. it was a very strong quarter for

eliquist particularly in the u.s. where we continue to grow demand and it is the market leader in -- but broadly speaking it's another really, really strong quarter. >> i think that people may not understand you made a recent acquisition that i don't know much about. if you don't mind talking about it. it's like myocardia. no one remembers. speak of turning point therapeutics. explain what you've seen so far. it's been a short period but i know you examine things heavily before you buy. this seems intriguing for oncology. >> absolutely. it's a good example of how we take areas we know very well

from a scientific perspective and compliment our internal research and development efforts with external innovation. it's medicine in oncology. the asset on turning point will be annual to address the need of a specific group of patients with lung cancer that have a specific mutation it's a really exciting compound, potentially best in class. we're getting ready to launch in the second half of next year that builds on our strong presence in oncology as you know, we have a leading position in oncology, earlier this year we launched obulab, the second agents for oncology agents now we're adding a leg to a leadership in oncology through a precision oncology medicine.

>> i would be remiss if i didn't mention the loss of exclusively for rep mid, year over year $3.3 to $2.4 billion. is that what you thought would happen right about now >> absolutely. we've been planning for the loss of exclusively on it for quite a few years, and the entry of generics in the u.s. this year, although the ability from one quarter to the other has gone pretty much as we had expected from the beginning the good thing is, with launching nine new medicines in three years, three first-in-class medicines just this year, we have actually accelerated the renewal of our portfolio, and we are growing the company through the period of limited exclusively laws which is exactly what we had planned to do and we are on track to doing that. i think then about the second half of the decade, bms is

positioned well for growth >> dr. cafario, thank you for being on the show. >> thank you, jim. as we go to break, take a look at the bond reports two year, back to 442, it was 4.6 last year. can we get the ten-year below 4? vix 27 we'll be right back. ♪ ♪ connecting to opportunity is just part of the hustle. ♪ ♪ opportunity is using data to create a competitive advantage.

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let's get to jim and "stop trading. >> carl, one day i hope you'll want medicare and have to get a supplement and analyze it as i did with my cfo. what we did was realize that humana offered the best deal this used to be not the case guess what i think the analysts who were

probably in diapers when i was fooling around with my hedge fund are realizing how great it is a piece today, deutsche bank, basically says exactly what i just told you which is humana offers the best product. this is quite a surprise i switched between united health anybody who is involved in the process will realize humana upped its game and offers a superior product in a business that is almost impossible to understand i don't think the stock is done going up this represents the new leadership of exactly what i'm talking about versus the people at microsoft who had an absolute -- >> you've been singing humana's praises for a while. we didn't get to a lot of calls. reiteration of disney over, morgan stanley, maybe later. >> i know the music is playing, but -- manager of the phillies, joe girardi, he had a good run

and fired him. of course, they had a losing record and then they got better. i think if some of the people would adopt the phillies method, they could be in the playoffs, too. first they have to recognize, you know what? we have to do firing david, it's hard to fire it involves doing this: i'm sorry, david. >> we have to go and you have to go >> jim, we'll see you tonight. "mad money" at 6:00 p.m. eastern. when we come back, more reaction to microsoft and alphabet. n'gonyerdot awhe. this... is the planning effect. this is how it feels to know you have a wealth plan that covers everything that's important to you. this is what it's like to have a dedicated fidelity advisor looking at your full financial picture. making sure you have the right balance of risk and reward. and helping you plan for future generations. this is "the planning effect" from fidelity.

welcome balk to "squawk on the street." rick santelli live at cmhq with breaking news. our september read on new home sales expected to be 575 and 585,000, comes in a bit better than ex-pectexpected, 603,000, than last month. prior to that the 532,000 was the weakest since february 2016. we've had a nice bounce. that places it down roughly 11%.

bank of canada just delivered its smaller than expected rate cut. this is big, 50 basis points instead of 75 bringing the rate to 3.75% instead of 4% and for more color on the housing number that we just experienced, even though it was better-than-expected, down nearly 11% versus last month, we're going to go diana olick for some color diana. >> rick, it's a little murky because there were some downward revisions from the big jump we saw in august. the most important point on this one is the mortgage rate situation really changed in september compared with august, and that's why you're seeing the sales down both month to month and year over year that's because we started with a 30-year fixed actually dropping in august and coming back very steadily throughout september. these new home sales are based on signed contracts, that means people out shopping in the month of september and signing on the dotted line. you see the 30-year fixed went

sharply up, 6.25% over 7%. i will say interestingly the median price of a new home sold in september was up 13.8% year over year. when we look at the supply of new homes, you're still seeing pretty high supply and not what the builders want to see we did see from earnings from pulte and taylor morrison, more cancellation rates quarter to quarter and guiding toward higher cancellation rates, pulte with a 24% cancel lags rate. imagine that, a quarter of your sales being canceled we see more pain going forward especially since rates now are over 7%. carl, back to you. >> diana, thank you very much. good wednesday morning welcome to another hour of

"squawk on the street. i'm carl quintanilla with morgan brennan and david faber. mega tecally the nasdaq, offset by better results in other areas men time yields are lower. ten-year cracks below four the vix below 28 >> here are three big movers we're watching on this busy earnings more. microsoft plunging after disappointing results from both names. we'll break down those numbers and news from their other mega cap peers yet to report in a moment alphabet, 7.5% boeing on the move after a surprise quarterly loss. a big charge inits defense in space business revenue also coming in below expectations the aerospace giant did maintain its yearly cash flow forecast. you can see the shares are up 1% we'll have more on that this hour as well finally, harley-davidson pouring higher after higher motorcycle shipments, strong pricing

boosted results there. also harley reaffirming the outlook for the full year. you can see those shares are up 7% right now. >> churning back to microsoft and alphabet this morning, microsoft expecting a significant decline in pc sales and weaker-than-expected cloud sales. alphabet seeing its fifth consecutive quarter of growth. let's bring in jeffries' brent phil we've talked about the decel brags in azure and in youtube. who had the cleaner quarter? >> i think ultimately the hook had meggs see quarters google had the pullback in advertising, and you continue to see microsoft decel on azure i say overall microsoft is cleaner in the sense that there's recurring revenue, there's visibility google still living with the uncertainty of advertisers you can turn advertising off in

a nanosecond if you're a kofrpgs. that's where we're probably seeing the biggest turnoff across the board with snap we're seeing a tremendous amount of turmoil in the add market i'd say microsoft is cleaner, albeit you have the azure miss and the decel they're guiding for. you're starting to see the weakness go from the small mid size into the enterprise that again is what investors were most concerned about. microsoft definitely from my perspective won in terms of durability right now i think the next six months are really foggy as relates to the rest of large cap tech given the demand picture continues to soften. >> was there a single metric on alphabet that exceeded your estimates, and what do you make of this argument this morning that there's sew bloat. >> i think there's bloat across all of tech. if you look at microsoft and

google's head count numbers, it was like there's no recession, no pullback. the way they're hiring is absolutely crazy, like the numbers, the growth rates are incredible so they've got to throw the air brakes on hiring in a big way to get their costs under control. your question, the one single metric that stood out at google was google cloud it was better than most feared it obviously started decel with microsoft. we don't think there are share gains happening here aws is the 800-pound gorilla google cloud did stand out as relates to your question. >> well, brent, to follow up on your comment that hiring is out of control, the question we've been asking are are these companies actually going to take the measures to control it or even cut -- that seems very much unclear at this point. what's your read on the willingness of some of these very large technology companies which have added thousands upon thousands of employees even in the last quarter, their

willingness to actually cut them >> david, they are starting to trend. microsoft will be up into q2 with head count. they're no question controlling that if there's one thing i've learned from covering microsoft for two decades, when amy hood says she's going to do something, she does it i think she's going to throw the air brakes on. i they they'll be able to control the bottom line better than most in tech. we expect that to happen again, i think many of these companies have created this disillusionment that this will continue forever and they can fly across the water without getting wet. i ultimately believe they're now seeing a wake-up call, and we're seeing, again, we think the next six months are going to be under some duress. i do think they're taking this serious and i think they're taking control at their own

exp expense. >> your comments, seem to have faith in the company's ability to manage its margins, not so much with alphabet do you also see them choosing -- they always seem to want to invest through the cycle that's been their history, at least as long as they've been public do they need to keep doing that or really cut back >> i think you're right. i think google, there's bigger concern. ad dollars can turn off in a nano nanosecond their margins will fall quicker and faster than microsoft given the current revenue with microsoft. in the short term, yes, i think there's more pressure. i don't think google is going to take the long term, that's not in their dna they tend to look out years if not decades. they're not looking out for the next six months, not thinking like we are as investors they're thinking about the next big thing. my concern is more on the expense side at google, less at microsoft. i think they'll get that under control. again, it goes back to the models are so different. the ad market can turn off like

a faucet that does not happen in enterprise software. so durability and earnings visibility is way better at microsoft than it is at alphabet to give ruth pour rat a lot of credit, she's been backing up the truck on the buyback every quarter she backs up the truck. microsoft ran away from the buyback, meta ran away from the buyback. the two big companies are running away ruth is leaning in with her capital allocation to buy the stock. that's an a plus in our opinion for capital allocation. >> brent, let's comb through cloud a little bit you mentioned a bright spot at alphabet we saw the deceleration from microsoft and azure, a deceleration to 42% growth how does this read through to amazon's results and just importantly, how does it speak to the fact that maybe we're starting to reach a certain level of maturation when

it comes to cloud. i think about ibm by the way we've seen strength there recently >> for amazon, they are the 800-pound gorilla. if you simplistically lay it out, they have roughly 60% of the big three. you go down to microsoft at -- aws is no question the front-runner the last three-quarters over 60% backlog growth, the streets looking for low 30% growth for aws. i think there's no question you're starting to see a little moderation remember, moving to the public cloud, there's expense up front, and there's savings over time. there is this initial crossover where you have to have your data centers both in the private world and the public world we do think there's going to be pressure aws in all their collects, they're running away with this

market microsoft and google are really not even in the same zip code as aws. i think aws is more unique they're not going to be completely immune to what's going on we're looking for low 30% growth again, that comes off 60-plus percent of backlog growth which gives indication growth rate will be pretty good for the next couple quarters. >> we look forward to seeing those. brent, appreciate the help brent thill. >> thank you. as we head to a quick break, here is our roadmap for the rest of the hour. boeing missing street by a mile, taking it on the children from problems in the defense unit cash flow was a big bright spot. we'll break it all down. plus what the ceo told us last hour. >> we'll have a look at the state of the rails and shipping. ceo from norfolk southern will join us. from tax hikes to tax cuts, a host of changes on the horizon.

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big day for the ishares, u.s. arrow, ticker ita, slight gains for the year up double digits since the beginning of october the biggest holding is boeing, moving higher despite the revenue miss and unexpected loss the company's defense unit taking a $2.8 billion charge for

the quarter. last hour we talked to dave calhoun about the government-fixed programs including the air force one jet. >> nobody anticipated the environment we're in with respect to inflation and all of those things honestly, probably the biggest mistake on the dc 25b or the air force one was the fixed price nature of it, when a program that requires that many agencies and that many things to come to bear on a particular platform, and there's only two of them, that just begs for more of a cost incentive kind of contract. >> fixed price contract, just for those folks that aren't as tuned into the dod and government contracting logo means a contract is for a fixed amount of money and anything that runs over that, if you have delays, inflation, supply chain issues, that is going to be eaten, the cost of that is going to be eaten by the company, the

contractor itself, rather than pushed back out to the government and taxpayers that's what he's talking about there. it's air force one, it's kc 46, the aerial refueling tacker, mq-25, an aerial refueling drone, the trainer program for the air force and it's also, guys, commercial crew on the space side these are contracts that boeing aggressively bid for in recent years. fixed price contract and now given everything we are seeing with rising costs, it is starting to bite them on the balance sheet, if you will i'd also just note, general dynamics which is trading roughly flat, it's the same story we've seen across the board this week, strength and recovery on the commercial side of the business in the case of general dynamics gulf stream, revenue grew, versus on going supply chain issues, et cetera, but increased demand on the defense side so actually combat and marine

systems at general dynamics was strong this past quarter which speaks to, of course, nuclear triad modernization and some of those vehicles and strengths, things we talk act where the ukraine conflict is concerned. >> good deal for the u.s. government for a change, in a way. >> yes. >> we're benefiting as these manufacturers that committed to certain fixed price bids are losing. >> and that was the whole point i think president trump was making when he took the unprecedented step of actually injecting himself into the negotiations for things like air force one at boeing. of course, not so great for investors, though cash flow is leading the charge today. speaking of earnings, norfolk southern is headed higher after strong results for the eastern freight railroad we'll break down those numbers, what i says about the economy with ceo alan shaw we're back in two. ♪ ♪

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norfolk shares are up about 2.5% railway operating revenue hitting all time quarterly record joining us in a cnbc exclusive interview is norfolk ceo alan shaw welcome to the program. >> good morning, morgan. i'm joining you today from our network operations center which is norfolk southern's mission control, and it's here that every day ns dispatchers move the u.s. economy. >> i want to get into how you're moving the u.s. economy and what your gauge is on the u.s. economy given that fact. we've seen norfolk this morning boost revenue growth for the full year slightly to 13% from the prior 12%, strong pricing, fuel surcharges. what is your take on the state of the economy right now are you starting to see pockets of softness, or is there resiliency >> well, certainly there is added uncertainty in the u.s. economy right now.

however, we're seeing a little bit of slowness in consumer growth, but the consumer is still growing. yet at the same time we're seeing strength in other markets such as manufacturing, energy and agriculture. as i look at it through the lens of norfolk southern, morgan, there are a number of macro factors that fave for norfolk southern we have a franchise built for growth and we serve the fastest growing segments of the u.s. economy. we serve a majority of the consumption and manufacturing in the united states. we have a diverse and desirable portfolio of customers,nd as sustainability becomes more and more important to our customers and their customers, it's driving highway-to-rail tunes for norfolk southern we've built a intermodal franchise and we have partners

j.b. hunt and hub group. >> let's talk more about the intermodal service we know there was congestion in the last couple years on the west coast ports we've seen more of those containers move to the east coast which would benefit a norfolk southern you've launched pretty interesting, i'll say, partnerships to be able to combat this and move more of those containers i think about the one out of the port of virginia, moves containers to chicago where union pacific picks those up you're seeing some of the intermodal cargo move back and forth. are you going to expand that out. what does that mean in terms of more business and how that translates to the bottom line? >> absolutely, morgan. as i look at our franchise -- our job is to deliver consistent and reliable service product to our customers and innovate solutions to help them grow and compete in a dynamic global

marketplace. as you noted, in the near term, that means helping our customers overcome supply chain disruptions such as the east coast, the west coast land bridge that you discussed. in the medium term, we've got opportunities to be opportunistic in a couple of markets including energy and longer term we're going to leverage our unique franchise strengths to be an industry leader in growth that includes intermodal as you noted. we are locked and loaded for growth in our intermodal franchise. >> alan, it's david faber. you mentioned supply chain i want to reference your conference call. you seemed to think supply chains would unlock faster than they have. what are your expectations there? what are you seeing in terms of inland markets right now and how much storage is taking place as a result of perhaps these supply chains not unlocking >> david, what we've seen is

continued pressure when the drainage market, last mile, first mile what we're doing is offering storage solutions to our customers to help them keep their goods and shipments moving we think that as 2023 unwinds, we're going to see an easing of those supply chain pressures we're already seeing improvements in our intermodal revenue ton miles indicating the value that we're delivering to the market >> alan, coal has been a commodity in decline we've seen railroads like yours move toward intermodal it's having a resurgence, not just the coal that goes into steal making, but thermal coal that's getting exported to places like europe in the midst of this ukraine russia war right now. how sustainable is that? does it continue >> morgan, we've been clear that over the long term we believe

coal is in a secular decline what's clear right now is the importance that coal plays in the energy independence of the united states and, frankly, other countries as well. our role in that is to serve our customers, deliver the end product to the supply -- deliver the end product to the consumer and do it as efficiently as sustainably as possible, and rail is the most efficient and sustainable land mode -- mode of land transportation. >> finally, labor. are you able to get enough workers right now, and given the fact this rail strike is not off the table come november 19th how are you preparing for that pos snblt. >> well, we've already gotten ratification from 6 of our 12 labor unions based on the recommendation of president biden's presidential emergency board which offered the most generous wage increase in the

last 50 years of rail negotiations as soon as we inked those agreements with our employees, it was important to me to personally get out in the field and thank our union employees for the service they provide to norfolk southern, to our customers and the u.s. economy they've earned it. >> alan shaw, great to have you on the program thanks for joining us. ceo of norfolk southern. >> thank you very much well, of course, as we talk about all the time here, we've got a lot of corporations dealing across the board with inflation, supply chain issues as you just heard, labor, years of recession heading to the new year why am i mentioned it? we're going to discuss all of that and how corporate america is approaching it, not to mention mergers and acquisitions ll b wie later with centerview's blair effron

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the street." i'm bertha coombs. here is your cnbc news update. the united nations says the world is nowhere near hitting targets to reduce greenhouse gas emissions. the u.s. climate office predicts average temperatures will rise 2.5 degrees celsius by the end of the century, a full degree above the target set in the paris climate initiative uk delaying the release of the economic plan by more than two weeks. prime minister rishi sunak says more time is needed to make the right decisions. in his first appearance as prime minister, sunak says he will protect the most vulnerable. supreme court justice samuel alito says the leak of the draft opinion overturning roe v. wade en doingered the lives of justices and even made them, quote, targets for assassination. he says he and his fellow

justices want things to go back to normal, the way they were before the pandemic. carl, back over to you. >> bertha coombs, thank you. turning back to the markets, nasdaq leading to the downside s&p trying to track into the green. dow up almost 200. earnings last night from alphabet and microsoft our next guest argues the biggest risk is not the underlying business but the macro headwinds. here to discuss, try variant ceo adam parker. >> good to see you. >> are you impressed with the index action in light of last night? >> it looks like small caps are doing okay i think some of the areas are good if you pick through -- obviously big cap tech had issues. i'm surprised the market didn't anticipate some of the currency stuff and other things pretty good numbers. things you can pick through. >> wingstop can outweigh microsoft. >> people like wings i don't like them. i came back from a dozen

meetings in boston the last couple days. two big debates, which cyclicals out there are so cheap, even if they're 30%, are they too high even if the earnings are 40%, 50% to high. there's a lot of debate about that the second thing, let's pretend it's october 19 and looking ahead a few months, even if the traft for next year are 15, 20% too high, are there any businesses that will have better fundamentals by a mile is it amazon which revenue will be twice as much in 2019, where you can find ideas so we've been going through a lot of maybe oversold growth that maybe in a slowing economy could still be okay. those are the two areas people looking for the -- >> is amazon one of them >> we had a governor on our list

that it had to be less than 25% earnings still doesn't have it. they can flash profit margin a little bit and the stock will be a rocket ship. it's probably one that i'd say most people are looking at as sort of the large cap one they have the most confidence in. with the results of the big names last night, people feel good about it. >> bank of canada, hikes 50, less than expected australia did the same, not too long ago are they beginning to blink around the world >> yeah. clearly the big debate is it an all-clear signal if they get dovish? is it that simple where we'll go back to 20, 22 times earnings and everything is fine this morning i was thinking we're back to bad news is good we got bad economic news, little lower consumer confidence. all of a sudden bad is good. that's what we need. then we'll get dovish and it's off to the races the other side multiplying a higher priced earnings ratio by lower earnings at some point

i think you're sitting here today, you sure up ten is higher probability than down ten. i think it's kind of balanced. for the first time in my life we've been buying the two-year yields it looks better than utilities an staples not obvious to run to the hills because we get weaker economic data. >> you're embracing a lot of the conversations that take place everywhere, which we're at 220 for s&p, should we be at 210 or down to 200. >> maybe what we're wrong about and the street is wrong about, maybe it's going to be a little less than people think, but lower in '24 than '23. i'm starting to get more conviction in that. >> well, that's not good >> no, it isn't good. >> next year we'll be sitting here talking -- >> go back to what i said before either such a cheap cyclical it's okay in the slow erosion

scenario or could still have positive growth even with slow decline. that's where you have to make your bets. i'm not saying it's the base case. >> why is that >> we've never -- none of us have ever had in our lives nominal gdp so high. i don't see things collapsing. i think slowly, auto loans squishy, a little 90-day delinquency. i don't see blinking reds like this is a disaster i think it's more we're going to slowly decline the fed did slow the economy some all the fiscal stimulus maybe we're going to slowly erode. maybe it's 220 and maybe it's 215 in '24 i think we're all used to a v shape. it collapsed, the fed comes in, boom i want to almost buy it because the bad news comes because it's going to rect starting to see in

the last week some of the rental data point get a little flattened in certain metropolitan areas let's say that's finally happen. that cpi is going to stay elevated for a while that's why i think if we think the fed reacts to that, they probably won't be as dovish as this little banter this week indicates. what else? >> unfortunately we're out of time now the good news is you seem to be becoming a weekly guess. >> we'll see. >> maybe 3:30 today? >> maybe not today, but some time soon. >> adam parker still to come this morning,

big state tax changes coming up for a vote in november what that might mean for your wallet coming up next. big show ahead on "techcheck." we'll talk more about microsoft and google as the two names are slumping microsoft was having its worst intraday decline since covid along with mobileye ans their r.

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now less than two weeks away from the midterm elections and control of congress, there are big state tax changes up for a vote robert frank is with us to talk about what investors need to know. >> we have 12 states with tax changes on the ballot next month. colorado has two ballot measures, one that would cut the current flat rate. another that would reduce deductions for high earners. voters in massachusetts deciding on the first change to the flat tax in over a century, adding a

4% surtax to million dollar earners. the big is california, proposition 30 would add a 1.75% surtax on those making 2 million or more. that would bring the top rate to over 15% and combined federal and state rates over 52% in california there are about 35,000 taxpayers earning that more than $2 million a year back in 2019, but they accounted for a third of the state's total tax revenue and the state has already lost over 250,000 people back in 2020 the $3-$5 billion would go to ev infrastructure and rebates it is backed by lift which has spent over $45 million supporting the measure and to convert its fleet back over to evs. democratic governor gavin newsom, state teachers union and republicans all oppose the measure, carl. right now it's very close. it has to get a majority of voters right now

it's at 49%. we'll have to see where that ends up. >> going to be fas naelting to watch. robert frank a quick programming note this morning as we go to break, a huge new episode of jay leno's garage premiers tonight. jay will be joined by the president at the secret service training facility to discuss hot rodding and the future of electric cars coming up at 10:00 p.m. eastern time. we're back in a moment

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results from microsoft and alphabet the latest to reflect an increasingly challenging economic environment in this, the last quarter of the year what are corporate leaders planning for next year let's ask a man involved in a lot of those conversation, blair effron is the co-founder from centerview partners. you no your way from an m&a situation. it's a lot more than that. let's start more with the conversations you're having in the board room or otherwise with

corporate leaders, blair what are you sensing and hearing from them as they prepare for next year, particularly this idea as wl on the labor front and whether they start to have to focus on cutting costs. >> first of all, thanks for having me. great question obviously in the board room everybody expects '23 to be bumpy. hard to figure out how it's not. everybody understands inflation must be tamed and tamed urgently that said, for the most part a lot of boards are saying, if '23 is bumpy, we have its, but how do we prepare for what '24 might be and what recovery might look like we'll see companies be quite a bit more expensive if there's anything we learned from march of 2020, making decisions anymorebly and staying on offense, figuring out where to investment is important even on m&a, it's not obviously an active time, but it's more active than i would have bet

given the economy and much different than you would have seen 14 years ago in this kind of backdrop. i think for the most part you have a lot of ceos, a lot of board leaders very good about taking information in, recognizing that the data is mixed, processing it, developing and updating their thinking on a realtime basis and adapting to it. >> what's the updated thinking >> the updated thinking today is the economy in the u.s. on a relative basis actually has tailwind and headwind. it's not all headwind. you have a consumer still spending you have banking system in good health credit obviously tighter, but in good health. you have labor still tight, i would say that the most part, jobs are fewer than labor avaien the markets are actually pretty settled in

so the thing is, everybody said '23 will be bumpy. it will be. >> right >> but the question is the duration >> we don't know. >> we don't know. >> of course how can we >> that's the point. >> do you prepare for it as a corporate leader by thinking now, as you get pressure from shareholders to increase margin, but saying we're stopping hiring or even, in fact, we're going to let people go? is that a different conversation now in part because sort of after covid, what the labor markets have presented in terms of how difficult it's been to get people in the first place? >> that's the big test i think companies for the most part are going to be disciplined in cutbacks. they're going to recognize that they don't want to sacrifice the long-term for short-term moves obviously certain companies hire aggressively to handle demand over the past few years. the fact is labor, maintaining labor, mentoring is hard i think you're going to see

operating expense areas continuing to cut back it will be like advertising. it will be things that seem more short term if you're thinking longer term, two years, three years, five years, you need to think strategically. >> that can be margin compression in the next year is what i'm hearing. >> i would say the best companies for next year, the most competitive companies will figure out how to maintain a decent margin and have a fortified financial situation, fortified balance sheet and again make moves, david that position them for a better long-term future. >> let's talk about long-term future and positions you mentioned m&a is a little more robust -- >> i wouldn't use the word robusted >> more active am i going to be reporting on significant strategic deals in 2023 what's the backlog >> it's tough. i think most m&a today looks more tactical by size.

i think doing something really big, more difficult, obviously the financing markets are more difficult. the environment is uncertain you wouldn't recommend doing something until you have more cert certainty. higher growth, lower growth, you want certainty but that said, the market will end up 3.5 trillion this year. a lot from '21, a year year by a trillion and a half and probably the equivalent of 2018, 2019 it'll be a deal market but several quarters before it finds its sea legs. >> a lot of it depends on the conversation we just had about what '23 looks like, right >> i would say that with multiples down next year multiple down 3.5 points versus the peak five-year average, ceos are going to be attendive thinking about when to make an acquisition and not. >> do you want to give me a prediction for '23 you mentioned the backlog is not

great. is it a weaker year than '22 >> i do. >> you do. >> absolutely. you go in with a weaker backlog. deals take nine months, 12 months, longer, 15 months to consummate we should assume that '23 will be a difficult year, certainly in the first half. and hopefully settle out as we get towards the middle of the year >> you know, you obviously participate in a lot of conversations that end up with no deal. the two sides decide we're not going to pursue it >> even more the case -- >> anti-trust figures into that more importantly now, how so >> i would say today it's much more about price, confidence levels, can i get something financed >> interesting you're somebody who certainly plays attention to electoral politics we have the midterms coming up i don't know what your expectations are

but i'm as curious as what you think the impact may be if the republicans take the senate and the house, which seems more likely in recent days. >> we'll see the fact is, obviously with both houses, hard to think about legislation. that said we have $4 trillion of spending that is yet to be really into the marketplace. and the point is, my biggest concern is in a downturn can congress come together a deep downturn, if that were the case we've seen the answer is they do i also argue there's a lot that can be done administratively by executive order. and the fact is, my perspective is you have $4 trillion of funding over 10 years. what you really want to do is figure out how to make it done most effectively, most impact and frankly help everyday americans with economic tailwind what we don't know is obviously

what it means in the level of volume going up dramatically >> yeah. >> but, you know, two weeks is a long time in politics. we'll see. >> we will finally back to work, back to the office really is what i should say we talked about it before. financial services has one approach so i assume you're getting people back as often as you'd like, but what's your view oveo overall, talking to a lot of ceos are we going to have the world as we are for a while now? >> the conversation back to office i don't hear as much. most companies figured out what ed they want to do, what works for them whether it's back to office, four, five days a week, whether it's hybrid. every company has a different culture, what it wants for its employees, colleagues. and they're going to test it the next couple years. how does it comport with

training, mentoring -- >> what do you think you're a back to the office guy? >> absolutely. i think people are enjoying it, there's a lot of energy. i think in most businesses, most companies, people like to be together they like to congregate and having a campus like atmosphere instead of an office-like atmosphere is something that i think, having done it -- >> it's still a grand experiment, though >> no, not really. >> you think it's past that. >> i i think it's past the experiment and every company is going to do it differently this question of efficiency versus productivity, i think people in the office like being a little less productive, a little more creative, more thoughtful it helps overall performance. >> i like being together too so thank you for being here. blair effron. >> appreciate it. >> you're welcome. a quick look on the laggards as you might expect led by the

two megacap companies that reported disappointing earnings last night, alphabet and lomo f y aerhe a t reorouft t break. good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back.

all right. nasdaq of course has been under

performing overall, as you might expect given microsoft and alphabet a part of that. but bob joins us now to talk about -- look at that. if i told you last night we were going to be up on the s&p after those numbers. >> i want to show the earning, microsoft down, google down, texas instruments. you think the s&p would be down 100 points on this but it's not look at the other big tech stocks out there apple down 1%. nvidia, amd is to the down the s&p should be down 70 to 100 points where is it right now? look at this it's essentially moving into positive territory we've seen it a while now. but remember the bank of canada came out, surprised everybody, 50 basis points, instead of 75 but it was going in that direction more because the macro is what's moving the markets right now. the two-year yield has been

trending downward for four days in a row what does that mean? the s&p 500 is up 5% since the two-year yield has been trending downward yes, earnings matter, yes, they're important. but we're moving in relation to the macro picture. two year down four days in a row, s&p up 5% we're waiting for the mobile i.p.o. to come -- >> took a while to get the opening price. >> the interesting thing -- >> 27, i don't know if you were here, 27 $.30 was the last indication i saw. >> the important thing is they priced above only floating 5% so they have a good way to squeeze this higher. we are having a terrible year here the i.p.o. etf down 51% year-to-date the s&p is down 19%. they're sitting at multiyear lows for that. another miserable year for i.p.o.s. this year, 66 i.p.o.s raised 7.5 billion. we normally raise 165 i.p.o.s,

45 billion we have two months left, this is year-to-date but consider this, we're down 80% compared to a normal year for i.p.o.s. >> it's been nothing short of horrible companies -- >> we keep waiting for 2023 to clear up, and nobody is waiting and getting in line for 2023 hopeful if they find some bottom in the market next few months that's going to change quickly. >> thank you that does it for us on "squawk on the street. let's get over to "techcheck." >> good wednesday morning welcome to "techcheck" i'm carl quintanilla with deirdre bosa and ojon fortt. today big tech takes a big hit all lower after posting results. we'll break down the quarters. intel's self-driving unit mobile eye returns to markets this morning, pricing below the 50 billion valuation intel had been hoping for we'll bring you a live