we will talk to you again soon >> sounds good >> by the way, folks, let's take a final look at the markets this morning. right now, the futures are a little weaker for the dow and the s&p, little stronger for the nasdaq you have the fed meeting coming up we just heard from adp that number was stronger than anticipated. we will see you right back here tomorrow right now, it's time for "squawk on the street. ♪ good wednesday morning, everybody. welcome to "squawk on the street," i'm david faber with jim cramer, and we are live from the new york stock exchange. carl has the morning off let's give you a quick look at futures. we start trading one half hour from today jim and i like to call hump day. let's get to the road map. it starts with the decision day for the fed and of course another big rate hike is expected this afternoon. one question, though, is, will policymakers moderate tightening in the future?

>> also, amd is out with its quarterly results. that came after the bell guidance as well is out, and well, the stock is actually a bit higher in the premarket. you're going to want to hear what the ceo said on the company's earnings call, not to mention with you on "mad money." sticking with tech, amazon pulled out of the trillion dollar club yesterday. that was the first time it closed below that valuation since april of 2020. what does it mean? let's start with the fed, though that expected rate hike later today. we start a lot of our conversations here with the fed, kind of tend to have the same conversation, curious as to when that will change >> yeah, you know, sometimes i feel like we have nobody -- we stick with this three quarters it's almost like jay powell kind of telegraphs things there's not that much to it, and i think the thing that people are looking for was him to say,

you know what? now we wait and see. and yet, everything that's come out in the interim seems to be pretty hot and the risk that he runs is that if we do get a strong employment number on friday, as per the adp number, that he'll look foolish if he just says, and we'll wait so that he has to say, listen, we're doing three quarters, and in december, we'll probably have to take even more, just not sure what size. and you know what, david, you begin to start saying, is it even possible to have a soft landing? does he even want a soft landing? i'm trying to use a '94, '95 model, raise the rate quickly and it doesn't hurt the stock market but then window seems to be closing unless we get something better than mortgage refi, which is really the only thing weak. i'm seeing little things there will be like a zoom info where they talk about elongation of deals nine times and you'll see that stock down very badly

you'll see airbnb. i had them on last night, a lot of people saying that -- a totally wrong, i think, a misread, that the fourth quarter may not be that strong that is not correct, but that's what people are saying we're just not getting the number of preannouncements it's almost the only one that i have seen that's really dangerous is tupperware, which last night put a going concern note tupperware, everyone's familiar wit, but they have some dead covenants that got tighter that's the first one that i've seen >> although, housing you mentioned it housing is slowing dramatically, and that does, as you always say, punch well above its weight because it's connected to so many other parts of the economy. slowly >> it's 10% and punches above its weight and certainly hurts retail but retail is taking it on the chin and made a comeback david, i see certain commodities come down, but because of the way the companies lock in

prices, it hasn't really helped them so, you end up with a whole new class of companies that you like, like mondoleze, where it turns out that snacking is not just something that is done, work from home and go back to work people stay work from home and continue to snack. that's not what -- that's not what a stock makes the banks have been strong >> the banks have been stronger lately >> healthcare remains very strong >> you've talked as well about the rotation out of mega cap growth, which we've talked about. i mentioned amazon at the top. yesterday had a very poor day. >> yeah, and that's what gets -- >> now below a trillion dollar valuation. >> that's going to continue. >> of course, meta is -- >> that's going to continue. >> say again >> i think that continues. >> you do, right >> i think that alphabet sells at a market multiple and that's less vulnerable. and i think that they will be more disciplined because they heard the market but the donation of -- from tech to everything else is extraordinary, and we'll talk

about amd. amd's the first of the serious bounces that we have seen, but i mean, this is not what you buy >> i want to talk amd, but let's come back to the fed quickly, because jobs is another area where yesterday we had job openings the market actually turned on it you know, it can be a -- kind of all over the map, but they were well above what had been anticipated. we thought there would be a reduction in openings. they were up by 441,000 jobs the market was up, and then it actually turned on that. >> wage inflation has not topped that's a problem >> and you mentioned -- you mentioned airbnb, and i did note from your discussion with him yesterday, let's take a listen, because they're going to continue to hire aggressively. >> right, they are >> after we made our remote policy update, we had, you know, we had hundreds of thousands of applications coming to airbnb, so we're going to stay pretty aggressive about bringing talent in, but in the beginning of the

year, jim, before the economy took a turn for the worse, we were still only preparing to hire 7% to 8% more employees so, the basic principle i had is whether it's a recession or a good economy, we're not going to run the company that differently. >> all right, but they're still hiring is the point. >> but this is -- context matters tremendously, and i think a lot of people haven't followed i had a talk with brian when he had the layoff, a huge number of people when the pandemic really broke out. unlike every other tech company i follow, which kind of felt like, you know what, we can ride out this because we are integral and secular growers, this man fired a giganticic n number of people what he's saying is i did gigantic layoffs now is my time to pick among all the people who are being fired everywhere total misinterpretation of what he was saying. >> got it. a

people really being fired everywhere >> yes he is saying, look, the resumes, the glut, this is where the epicenter of the pending recession is >> it hasn't been enough to -- hasn't been enough to move the needle yet, has it on wage and inflation or anything else. >> no, we haven't -- most companies haven't bit the bullet yet. if you look at -- >> they haven't bit the bullet at all we just went through an earnings season, saw that alphabet hired 12,500 people during the quarter. >> let's discuss that. >> obviously, we've talked endlessly about meta and their willingness to spend enormous sums of money. >> alphabet, they began to hire, but they hired those people in the spring they thought that things were better, and they obviously -- takes a little time to hire boyfrien >> when are they going to actually fire? >> now i think they do it now >> you do? >> yeah. >> really? not just slow? >> no. they've heard the market not slowing of hiring. they're going to do what's necessary.

meta, i think, in particular mark zuckerberg, feels that, look, you have to do this now. you have to spend now. >> clearly >> there's not going to be any moderation in spending there, which is why that -- go on there won't be >> right which is why that stock is not going to have a bid. it's going to slow >> he's not looking at the stock. >> clearly he's not looking at the stock. >> i don't want to be accused of someone who's looking at the stock. however, that is an attribute of my job i mean, we can't all pretend everything's twitter we just talk >> for one second on meta, does he really not look at the stock at all >> no, what matters is the -- >> 300 whatever to 95? he doesn't even take a pause >> no. >> maybe, you know, he's in the mirror in the morning. >> no. >> bathroom, like, god, that stock's down a lot >> it's an -- >> i wonder if i could have done something differently there

maybe. >> there's an imperative there that is not dictated by the stock or the conversation that's quite different from alphabet, which listens and acts by the way, amazon, that is just a question of how do you get your arms around all the people you have to fire >> what was yesterday? what was the reason behind the decline yesterday? >> they have it every day that they don't fire -- every day that they don't fire 100,000 people is another bad day. by the way, when i had rodney on from kroger, 700,000 jobs at kroger, merging kroger at a albertson's. >> if they're allowed to get together >> there's a denver overlap that's not so good, the seattle overlap. he must have said -- rodney must have said "union" so many times. everybody's trying to appeal to this administration. in other words, look, we're

union. have you noticed that amazon's not? have you noticed that walmart is not? costco is so much better than working for a union, like -- >> interesting >> but i just think that everyone -- the appeal to the president is basically, you know what these are union jobs so, really, does it matter to you, mr. president isn't that more important than anything else? that's, you know, i went by my father's elementary school yesterday. >> really? we're going to talk about that >> gompers was a labor leader. i feel like new buildings would be named after gompers if president biden remembered him >> i don't know any labor leaders. the only one i remember is trumka >> labor unions were really powerful they're not good for the stock market >> no, they're not good for, productivity either. >> they're not war good for nothing i mean, the unions do help the working person >> without a doubt or certainly did

here in our city, they dramatically increase the cost of everything. >> yes, and i think it's important to recognize that rodney mcmullen thinks that deal gets passed because it's union jobs >> they have a lot of power here turn to amd now please >> i've got a tough rap on amd >> the stock did appear to be moving higher, slightly missed lower wall street expectations earnings were up 29% year over year and of course, lisa, as was typical, was on "mad money" last night, but here's also her on the call -- sorry, she's on tonight. this is her last night on the call, discussing those results >> we did see some, you know, weaknesses consumer was weak. there was some segments of industrials, tested measurements was weaker in the third quarter so, we do see the puts and takes there, but overall, i would say,

you know, the business has strong visibility. we are still supply constrained in certain nodes in some of the legacy nodes we've made a lot of progress on supply, so we're seeing additional supply come in, in q4 that leads us to, you know, good confidence in q4 >> i want to get your take by the way, she is on the show tonight, as you said that's "mad money. she used to come on this show. i'm not sure what happened there. >> that, i don't know. i don't know the timing. >> we miss having lisa but give me your take on the quarter. >> all right, so, pce is even worse than we thought. consumer, terrible i was surprised, gaming, she says, was good this is embedded that was good. data center was surprisingly good, and that, by the way, is, she has the coolest chips. now, if you go back and talk about what happened at google. >> she has the coolest chips they don't generate heat >> amazon web services compares tremendously, but so does azure.

i'm going to put this in the real bad but not worse than what we thought category. >> are you surprised again, we haven't begun trading yet. are you surprised the stock may look higher? >> i was surprised that datacenter was as strong as it was. i knew that pcs were bad i know that they're still beating intel. i do think that there was a moment that i felt -- a moment of calm when she was asked about, how about china not being hurt by china, because their chips are not in the crosshairs of what the president is trying to do to china so overall, it was, i guess, after most preannouncements, when you finally get to the announcement, it's even worse. here, i was -- the datacenter was really good, frankly good but the consumer and the enterprise, david, it's just so weak, and most enterprise

software companies, and we can talk about them forever, they're almost all with the -- >> consumer and enterprise is so weak, that takes us back to the beginning of our conversation about the fed. if that's the case, shouldn't there be some moderation of policy >> but these companies are victims of their own exuberance. >> it's more that? >> yes well, you know, if you had a software as a service kaecompan that made it so you could get leads, and here i'm speaking about zoom info, they lose the term elongation six times and elongate three times elongate is code out there in silicon valley for, took us a really long time to close deals. and that is the beginning of when things go >> all right we got a lot more for you here still to come, we're going to talk about paramount global. those shares down almost 10% conference calls ongoing we'll dig through the numbers, share what we hear on that call with you let's give you another look at futures. we get started with trading 15

minutes from now as you can see, kind of a mixed bag. >> yeah, mixed bag >> slightlloy wer open lot more "squawk on the street" straight ahead makes trading easier. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades and stay on top of the market. 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!!

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ford's out with its october sales. let's go to phil lebeau for those numbers. phil >> hi, david ford in october saw sales drop 10% in comparison to october of last year, so we're in that lumpy comparison period where you're -- some months are going

to be better than last year, some months are going to be below last year. down 10% with trucks down 7.7% suvs down 14.1%, but what investors want to know is, what's happening with the f-150 lightning as ford ramps production and the f-150 lightning did have its best monthly sales since the truck was launched earlier this year ford selling 2,436 of those vehicles, and remember, guys, the key here is the next year. as ford, as gm, as they really start to ramp ev production, that's what people are going to be focused on more than anything else i'll send it back to you >> phil, the other day, jim farley announced that if you are underperforming in a white-collar job, you would be fired. >> right >> to me, there's just, like, desc des dribs and drabs of firing. everybody seems to be overstaffed. i don't get how you can do that kind of firing this is a big american company

what's jim's plan? >> well, first of all, that is an extension of a program that has been in place for some time at ford, and essentially, what ford is saying is, look, if you are a chronic underperformer -- and ford's not the only company that looks at underperformers, but ford has said over time, if you're a chronic underperformer, you've been here more than eight years, something has to change we're going to give you two choices here one, you can go through a program. i think they work with an outside firm, where they try to improvior performance. if you choose not to go through that program, great. we'll give you a severance we thank you for your service, it's time for us to part ways. if you do go through that program, however, you're going to be expected to improve your performance. otherwise, you will then be let go and there won't with a severance payment, and i think this is -- look, a lot of people in detroit, i know it's not what you want to hear in terms of, you better do better or you're going to get fired, but there are a lot of people who have

long felt that the big three, ford, gm, what used to be fiat chrysler, that within the child care roles, they got a lot of very talented people, but they also have some people who have not always performed up to par >> that probably is the case at many companies, yeah constantly need to be reviewing. sort of to weed them out so, thank you, phil lebeau, on those ford numbers coming up, we're going to get jim's "mad dash" and count you down to an opening bell. one more look at futures, of course kind of a mixed bag, but let's call it a slightly lower open. lot more "squawk on the street" straig aadhthe

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let's get to a "mad dash." standing today you want to take eton? >> yeah, it is apropos with what phil said about ford eaton does power management now, gotten rid of a lot of what i would call extraneous divisions. they missed by a little bit, but david, in the old days, a company like eaton would be one of the first to fire, or an industrial company that would fire ford would fire. you asked me earlier about the fed and what they might do the firings are not occurring in the metal bending, in the industrial companies i mean, cleveland was downgraded today. i haven't seen -- steel company. new quarter's not firing so, what's happening is the trouble with the fed is that they need to see, believe it or not, i hate to say this, more layoffs, and they're not getting the layoffs that they need if you're jay powell, you can't say, we need more people fired, but i think you would have

expected more people to be fired. >> why are you making a distinction between what you're saying are coming layoffs in technology companies, which, by the way, dominate in many ways, our economy and have very high-paying jobs why wouldn't that be enough? it's a great question, and i think that the difficulty is that you want to get, as james gorman, the ceo of morgan stanley said to me, you need a four handle, to speak. you want to see 4% unemployment and silicon valley is very big, but i don't think you could get us the number of jobs that would be lost to get us to 4%. so yes, it's very big but not big enough to drive unemployment dramatically higher and therefore give powell the cover to say, let's just see what's going on >> okay. >> long-term, it's a very -- i'm threading the needing with my thesis >> i get it. many do. all right, we got an opening bell just a few minutes away for you. also, keep in mind that if you, you know, you missed the show

somehow, you can always catch us any time and anywhere by listening to and following the "squawk on the street" opening bell podcast

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives and responsible investing. let's get to shares of paramount, a company i certainly cover closely. down as much as 11%. earnings and revenue did come in below analyst estimates. on the negative side, tv media advertising, affiliate revenues also below expectations. they did add 4.7 million direct to consumer subs that's paramount plus. they're at 67 million global streaming subs right now but they're spending a lot of money on content there, and you know, during the call, going in, that was a focus of some investors. will they say, for example, that they're slowing their content spend? that might have been embraced. but that does not appear to be the case again, looking at the call, you know, the cfo saying, yeah, our investment in streaming does impact near-term profitability, but we believe there's

significant long-term shareholder value to be created, and then they go on to say, jajim, that they have been moindful of cost management as a company and they're taking additional steps to improve efficiency across the organization this is a lot of people that a lot of people were also focused on a look of free cash flow. free cash flow is barely, you know, equal to what they're spending on the dividend at this point. the dividend, obviously, very important for its owner, national amusements, the red stone family but no slowing it doesn't appear, in terms of what they spend on content, and you know, they have said, next year, 2024 is going to be the year where they get back to even and then start to have profitability from direct to consumer >> a lot of people think of this, and they think of cbs, so, channel 2. and david, linear tv, it's

just -- did people just stop watching sports? don't you find it amazing that as we grew up, linear tv was a great cash cow >> of course it was a cash cow we had aerials and there were only four things we could watch. we were prisoners. >> at one point, i would have thought it could help pay for expansion. >> a hundred million people watched the final episode of "m.a.s.h.. that will never happen again >> you know that area in new mexico that i have reserved? >> if for disney, yes. >> well, why can't paramount build a theme park david, where are paramount's theme parks? don't they have a "top gun" ride >> i heard the opening bells there and you can see the realtime exchange at our headquarters, we are having a negative open here with more red on the board at the big board here, f-suite over at the nasdaq, omniab,

pharma technology company. still a spac a lot of them are liquidating, but some are still making it to market >> they come to market, and i think people at home are saying, well, we watched your show, and you say you shouldn't be in them, and they keep coming of course, it doesn't matter that we say that it's much more of an imperative that they happen it's because it was during a halcyon period, and david, through these companies have employees that do these things i mean, getty. look atgetty >> getty was a profitable company, and yes, they do, and those who are supportive of spacs would point out that the performance of those companies versus typical ipos has not been that divergent they've both been terrible overall and this, of course, as we know, has been a very poor year for overall new issuance of equity >> you know what it's also been a poor year for? some restaurant chains >> yeah? what did you have in mind? >> well, i think that there was

an announcement today, and robert, i want to thank him for this, because he brings a lot of good things to attention cheesecake factory, they significantly hire electricity calls. >> yes >> now, that's a new angle for why you miss a quarter now, yum, on the other hand, had kfc, international, kfc, taco plus six, pizza up plus one. xfs. but when you see things like cost of electricity, that's like a whole new wrinkle about why you miss a quarter, and i think it's important to point it out, simply because, wow. >> there was also some reference to that. another on the strip >> we're seeing it >> costs a lot more money to keep the lights on, literally. >> yeah, there's just a lot of excuses about why quarters have been missed. and in technology, david, it's just, please get me out. that is not changing please get me out. now it's tesla

>> well, tesla was up yesterday. >> well, i mean saying, but, any company that is a trillion -- david, people are starting to think that with the exception of apple, that maybe everybody was just paying too much for one >> well, we have fewer trillion dollar companies now, of course, having lost amazon yesterday microsoft still has a $1.7 trillion market value and alphabet is hanging in there at $1.17 trillion. >> i am -- of those, my travel trust owns some. >> meta never made it to a trillion, and neither did tesla. wait, did tesla? maybe it did maybe it did >> just to go back over alphabet, the one thing that you and i always talked about is, there should be a notion, heavily advertising-oriented, there should be a notion that multiples matter and the price earnings multiple of alphabet is dramatically cheaper than all the other stocks >> but it was cheaper before the last earnings. >> i know. but it was not a great stock last year, not a great stock

this year. >> meanwhile, anybody who wants to be bullish on meta will say, it's trading at 12 times its earnings >> but david, this side -- >> except that they don't want to make any money. >> they've decided that it's investment time. and that's typically done by a private company, but no one says you have to own it now, obviously, if they said, you know what? we have been -- we're spending too much and we're going to cut back, then you have a stock that's up 30%. i think a lot of people are in it for that. i don't see a sign of that because i think that mark zuckerberg believes, look, the company is worth betting >> has it bottomed, though, jim? do you think >> bottoming >> has it bottom, the stock? is this where it's going to hang out for some time? >> i think that it has a lot of cash and it's not going to go through the cash, and it's -- reels is good. instagram was good you just need some sign, which just says, you know what we have spent a great deal and

now we're starting to get -- reap the benefits. >> yeah. >> but that's not what i'm getting. >> jim, i want to talk about another company that you have been quite positive on for some time estee lauder >> we are issuing a note saying that, look, the stock market's reacting very negatively it is now up 15 points from where it was at 7. fabrizio, the excellent ceo, has said over and over again that -- and this quarter too -- business is good. this quarter was remarkably good they raised the dividend but he's saying, listen, next quarter may not be good because china might not be open. we're trying to buy some, or we're trying to buy some earlier when it was much lower, because people don't understand the way fabrizio thinks. he's not going to say, listen, we hear that china's opening an all is good. what he says is, look, if china doesn't open, we'll have a tougher time, but he's a brilliant manager and the stock was down at one point, at $179

and that was long. people don't understand fabrizio it's not about friends it's about money i have the good fortune of knowing fabrizio very well and this -- he's probably the most cautious of any ceo i know. >> this has been a very difficult year the stock is down a lot more than the broader market. >> true, but -- >> we can go back over the last ten years and take a look at what's happened there. that also isn't fair >> the stock did increase because people felt, you know what there's no way that president xi would maintain this plan of -- >> and you know, on that note about zero covid, there are a couple of reports today that they're sticking with zero covid. >> i know. >> and that yesterday was, you know, again, i always want to defer to eunice, who does such great reporting for us, in terms of the social media reports yesterday that had a lot of chinese-related companies moving significantly higher >> there was someone on with

dominic chu, saying, look, there's a way -- the way they're going to transition to the new government gives them some -- a cover by march to get rid of this policy. major people i know at both pfizer have said that they've reverse engineered, by this point, the vaccine i think if you read what fabrizio freda said in his confidence, with estee lauder and its release, it's that, look, we're ready. we're ready when they open up. they would be the stock that would go up 30% to 40% the moment they open, which is why my travel trust has maintained a toe hold this is it, david. it's either going to hope, and have a huge move up, or you're kind of like, all right. >> well, you've seen the reports, again, about iphone manufacturing and what's going on with high precision >> estee lauder was up 5%

yesterday, so let's not go kraed. in fabrizio freda, i trust out of procter & gamble, has turned that company around i saw mr. lauder fabrizio, everyone, universally acclaimed and is ready a lot of his stuff is duty free. a lot of his stuff is travel but the thing is, lvmh did not do bad >> okay. i want to talk about the big blow-up today which is back in my area of mergers and acquisitions it's a company called rodgers. makes, let's call it, components for semiconductors dupont had a deal to acquire the company, $277 a share in cash. it's not a large transaction, by any means. it was a year ago. and the termination date came, and they still had not gotten approval from the regulatory authorities in china samr is the acronym we use

there. and so yesterday, given that, dupont said, we're done. we're going to pay the $162.5 million termination fee in accordance with the agreement, and we terminate. now, the fundamentals of the business since they announced it and certainly what we've seen in the market had indicated to many that if this deal were to break, it would trade down to, i had heard, $135. so there is at $126. there were those who believed the deal might break, but the preponderance of investors in it seemed to believe, perhaps we get some sort of a price cut, but an extension price cut, extension, and finally get approval from the chinese regulatory authorities jim, didn't happen for its part, rogers just put out a statement as well, not saying much, just other than they're currently evaluating all options to determine the best path forward in response to dupont's notice and say they remain an exceptional company. they do, perhaps

>> their growth was not there. >> one with a 44% hit to its market value >> their growth slowed ed green runs dupont and what's most interesting about dupont is he had sold the division for $11 million. he was going to use a lot of that money to buy rogers now he has a gigantic cash shortage what he'll do with it, we don't know but this is ed green he's so smart, david, i have to ask you. did he choose not to fight the chinese because he just said, you know what? i got a lucky break here >> i think that's got to be part of it. the idea that, hey, you know what we can walk away with $162.5 million termination fee, and this stock is going to be down enormously. >> look at dupont. i love ed green. >> it was clearly not a must-have, it was a, we'd like to have. >> ed has been remarkable in turning around dupont, and dupont was a bad hand and now we all wait to see what he does rogers was an interesting

materials company, ed seemed to have more -- less cyclicality. ed was trying to get into secular growth businesses. rogers didn't seem to have all that much secular growth >> can i switch for a moment >> you can switch anywhere you want, and then i have a couple things i want to get to. >> my thesis has been to buy consumer packaged goods. >> okay. i want to talk about mondolez. >> one of the toughest ones to figure has been clorox the number was not as bad as feared at the same time, it does annualize and it had a covid boost. and anything that had a covid boost is very susceptible, whether it be, you know, we're in that now phase where zoom's not just zoom and dock you a si docusign here they had to say, we did not have the growth we had i don't think she needed to say that i would have managed that quarter differently. i would have said, of course we

had a big covid bump but now we're doing well mondelez, on the other hand, that was up more -- >> it was up before the actual open you can see mondelez up about 1% jim, interesting quarter, and like many of these other companies, most of the increase was price. almost all of it >> yeah. big too. >> i noticed on twitter, dan greenhouse pointed this slide out. i looked at it and thought, this is worth looking at again. this is mondelez and this is inflation overall. take a look back in 2020 and '21, and look at what price has done there it's not about volume. it's not like they're really selling a lot more it's just they're charging more for what they are selling. >> okay. >> we saw that with p&g. and we've seen it with a number of these other large consumer companies. pepsi. price. >> but dirk, whom i think an excellent executive, and i've seen him many times, interviewed

by sara eisen, but there's a moment in the conference call, and all these executives are asked, is it tradedown is there tradedown >> right >> and the answer is, he said, definitively, no tradedown tremendous brand loyalty procter experienced 20 bips of tradedown, tremendous brand loyalty. once again, things are not happening the way they're supposed to. >> i'm going to buy my malomars no matter what >> it is malomar season. >> i started with four boxes immediately and put on four pounds as a result and i'm going to try to lay off a little bit even though they get smaller and smaller. >> well, that's another thing. in terms of, like, the -- do things get smaller look at hershey. >> hershey is an incredible story this year. >> people got money from the government i know that you did something with sharon and tyler yesterday where they talked about people still living paycheck to paycheck that's been the story of our

country. those who do -- are living not paycheck but more than paycheck, they just love -- they crave brands now, rodney mcmullen, kroger has very good store-bought brands, as does costco you ask costco, there's always a very funny moment in a costco call where they say to rich, are you experienced much tradedown to your brands he always says, no, we're experiencing trade-up, because kirkland brand is better than the branded product. perhaps always the funniest moment because these analysts never stop i happen to buy kirkland i happen to think kirkland brand is superior. >> i know you do i went to trader joe's for the first time recently. >> i'm not a fan >> the prices were great >> i just -- i find -- no, no. it's too catch as catch can. >> before we go, i want to end on a quite serious note. >> what's the matter >> cvs and walgreens both had the opioid settlement. $5 billion from cvs.

ceo karen lynch says she has, quote, a high degree of confidence that states will participate in the $5 billion opioid crisis settlement that the company has reached with those states, municipalities, native american tribes it announced the deal as well today and would -- will continue to defend, it says, against any litigation the settlement does not resolve. walgreens also, i think, in there for $4.5 billion of its own. the opioid crisis, by the way, still out of control in our country. >> it's ongoing. >> unabated. i'd like to see "the new york times" put those numbers next to the covid death numbers, because unfortunately, they're very close to each other at this point. 300 a day. it's horrible. but this money will go to the states, and potentially will start to actually help >> well, karen lynch, who is on at 3:00 with sara eisen, remarkable cvs, at one point, the stock was up 3 and then only 80 cents.

it only sells at 11 times earnings and this was a company, very few are like this, that actually captured a lot of loyalty during the period of covid. you got your shot, and then you stayed with cvs. but to go back on the opioid, i think that other than the very dark, i guess, documentary, pseudodocumentary on cable about -- >> "dope sick? >> no, i'm saying that this -- can i finish my thought >> the writing in that was horrible >> can i finish my thought i'm saying that this -- this epidemic's happened without any actual reportage that i really think is deserving this is just -- >> there's been some great reporting on it. there has. great reporting. >> but the consciousness of the american people is to say, wow, i better just ice and take tylenol. >> 100,000 people still a year, jim. >> exactly i'm trying to say that -- >> i know you are.

there's not enough attention being paid >> there's not enough attention. it just bothers me tremendously. >> all right let's get over to bob pisani now and get more on where we stand in this market today bob. >> good morning david and jim. split here open. two to one declining to advancing stocks, kind of a disappointment on a lot of the earnings front this morning. looking for risk moving up. other risk sectors, ark innovation, metals, retail is generally down today that's some disappointing results from them. jim was mentioning estee lauder, a third of their sales are in china. their guidance was disappointing. canada goose, they get probably 30% in asia. their guidance was very cautious again, i'm citing china. steve madden, consumer demand for brands and products remains healthy but they go on to say, wholesale customers have pulled back on orders as they prioritize inventory control

that's another stock very much dependent on china and the covid outlook there is weighing on them elsewhere, we had an interesting internal discussion at cnbc about companies citing electricity costs, utility costs. last 24 hours, cheesecake factory talked about it. we had reports about higher electricity costs in las vegas mcdonald's has made comments that margin pressures from energy costs, utilities inflation, 16% texas road house, sales leverages were offset by higher utility costs. thanks to robert and pippa for pointing out some of these finally, if you want to look at global outlook, everybody's concerned about what the recession's going to look like i always look liking mersk they ship everything on the planet they had interesting comments overnight. freight rates have peaked, they said supply chain congestion is easing, but they cited a decrease in demand for products

overall for shipping due to what they call the looming global recession and that's the debate here, david, what side of the recession debate are you on? is it modest or severe and that's going to determine your outlook for earnings and even whether or not you believe the federal reserve and what they're going to say this afternoon. look for the phrase, two-sided risk they're looking for vaguely dovish commentary. two-sided risk is the word everybody's looking for. >> bob, thank you. bob pisani, of course. we got the foc today and the key question there, you know, will jay powell talk about a slowdown in december? everybody expecting 75 basis points let's take a look at the bond market right now, give you a quick bond report. treasuries, of course, also have often led our market, and yields are higher market tends to move lower you can see that ten-year is above -- i'm sorry, the two-year, and the ten-year is above 4.5% right now as we await

later today when we hear from the fed chair. ♪♪ ♪♪

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we're keeping an eye on shares of meta and snap. they had a big spike yesterday after an fcc commissioner called for a government ban of tiktok enn s ommissioner's name i brdacarr we'll have him as a guest in the next hour on "squawk on the street." don't go anywhere.

let's get a quick "stop trad trading. >> when schools shutdown -- it's natural to presume that once you got back and people do hybrid, it's chegg's time. frequent guest on cnbc. >> and a guest on "techcheck." >> get out congratulations. >> i'm not part of that show either i will congratulate them i already did. >> all i can say is this is one i should have been saying, of course, it's going to come back. >> what do we have on "mad"

tonight? >> very interesting, amd and american electric power. this is mr. aiken's last as ceo. we have to ask what he may think about the cheesecake issue, about electricity being a factor in companies not doing well. you know what, david we have very cheap electricity >> yes, we do. >> what an interesting moment, david. >> nobody trading down i like it. it's a theme all right. go to work go do your thing get ready. get in your position over there for "mad money." >> my mid morning, my 10:20 broadcast. i'll have a lot of interesting things to say. >> awesome. >> partner, thank you. >> see you later. coming up, we'll check in with former dallas fed president richard fisher ahead of that rate decision. we're back in two. another busy day? of course - you're a cio in 2022. but you're ready. because you've got the next generation in global secure networking

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good wednesday morning welcome to another hour of "squawk on the street. i'm david faber with morgan brennan and mike santoli

we're live at the new york stock exchange take a look at markets there you have it. down across the board. morgan >> all right well, we are awaiting that fed decision later today so perhaps the reason we're seeing a little bit of weakness right now, we're 30 minutes into the trading session. here are three big movers we're watching specifically. estee lauder, the shares are following after the beauty company issued a weaker-than-expected outlook citing a weaker dollar, weakness in the u.s. and inflation and recession concerns apparently are crimping demand. those shares down 6% check out match group, surging this morning after strong results thanks to a boost in paid subscribers for its tinder app. that's news welcomed by in investors from a dating service company, stocks still down more than 65% since january as you can see, up 9% in trading. cvs health also in the green

after a beat on both the top and bottom lines it raised its full-year guidance, the second quarter in a row it's done that cvs agreed to an opioid settlement totaling about $5 billion. that's to be paid over a decade, though those shares up 3% mike. >> we are a few hours away from another big fed decision, most expecting another 75 basis point hike steve leisman joining us with the latest what we might learn about what's to come after today's hike >> that's where the focus is the best markets can hope for today is the fed delivers the last of what will be the fourth consecutive 75 basis point increase beyond that, there are expectations the fed slows the pace of increases while it still pursues higher rates of course, no guarantees either way. look at where the market is trading right now. fed funds rate by 75%, another 50 in december although it's sort of 50/50 on 50 or 75 it's a close call.

after december markets are pricing in an additional 50 to 75 basis points of rate hikes next year, bringing the funds rate up to a pretty high in this context, 502 on the peak rate. krishna gu ha says we think the fed sees to need to do as much as it did in cease however, we think the leadership sees the merit of getting off the 75 basis point a meeting hamster wheel after november the question is does the market take a step-down in market heights to push up markets and loosen financial conditions. stepping down has its risk, as does continuing on the current course as witnessed z in a letter that a group of democratic lawmakers wrote to powell saying the fed's sole focus on inflation reflects a disregard for the livelihoods of millions of americans and we're deeply concern the hikes racing

slowing the economy to a crawl while failing to slow rising prices that continue to harm families there's risk on both sides that the fed does too much, plunging the economy into recession or bows to political pressure or gets a false sense of accomplishment that it does too little and therefore, mike, has to come back and do it all over again. >> it's really a testament to how far we've come in terms of the psychology around the fed and the market absorption of this message that stepping down to a half percentage point hike in seven weeks is somehow going to be taken as a gift. and i wonder if that really is the case at this point or if the markets are kind of like, look, the higher-for-longer message is what we have to use as the baseline prem many is. >> i think what you just said there is absolutely right, mike. i also think it's really easy to go through the ways that the market has tried to hold on. i guess with ten fingers, and

now just with its pinkies to a bullish scenario remember the first pivot, it was going to cut rates the next pivot was it was going to pause now, as you designed the third iteration of pivot, it's going to step down it's just the market trying to find a bullish case. i think the market wants to go higher and i think the fed wants to be very careful not to let it go off to the races. >> steve, thank you. steve leisman setting the scene for us we'll be seeing him throughout let's talk markets as well investors are working through not just the fed, but a slew of mixed results. we've heard from airbnb, amd, a lot of other names this morning, morgan, that we covered as well. like has been so often the case, sort of mixed. positive response to amd, not so, for example, for airbnb. >> air bnchbnb is an interestin. last i checked it was trading lower. perhaps because even though we

did see the 29% growth in the july to september period, it was actually weaker than the quarter previous to that, and you did have the cfo on the earnings call saying he anticipates growth will slow in the next quarters between 17 and 23%. so a deceleration there. the question i keep coming back to, and i think about this with ups last week and e-commerce and peak season. you could raise it here with airbnb other companies we talk about regularly that have consumer-facing elements to them is how much of this is early signs of recession and the slowdown of the consumer and the belt tightening of consumer spending, indicating something worse coming down the pipe versus a return to something more normal prepandemic which is what airbnb was talking about yesterday. you can argue also the shift from goods to services is playing out, too, when you look at caesar's results which were

higher, too. there's the gambling stuff but also the fact you saw strong hotel and gaming. >> no sign of weakness in las vegas was the quote from that one. it's a tricky spot in some sense the realtime economic numbers have been too strong for the market's liking because they want to keep anticipating this moderation in fed policy earnings are starting to show the wear and tear that you would expect as the market decel rates. it is definitely a tricky spot, although we're going into this fed meeting i think a little less overexcited than we were in mid august, and at that level where jay powell really saw the need to explicitly push the market's expectations back towards something a little less sunny. we'll see how it plays out of course, we're that much farther along. we're going to be at a 4% fed funds rate at the high end. >> mike, how would you characterize, now that we're sort of through a lot of the big names in the earnings season we came in with the expectation

that we'd perhaps get a lot more guidance, if not conversation, on conference calls about a weak '23. not clear that's the case. >> companies are really fing whatever they have to say about '23 right now. it's a cloudy one. universally pretty much people think the formal consensus estimates have to come down for 2023 we don't know how much for the current quarter, there's the usual push-pull. i think it's better than feared. still looking at high level of profitability. some wrinkle when it comes to the fed. it's actually profit margins which is where the inflation sits right now retail and consumer-based profit margins, if you do all the math of where the inflation is kind of manifest in the economy, it's more there than anywhere else that's not necessarily great for equity holders even if down the road you want to get inflation under control. >> which gets back to how much is this a normalization to prepandemic levels we'll have to see. meantime, when you talk about

the global economy and another sector very sensitive to that, semiconductors, amd shares, those are actually heading higher after reporting double-digit revenue growth, though still down 8%, the stock that is, since plunging back in october. kristina partsinevelos joining us. >> amd results weren't as bad as expected they warned us over a month ago that q3 sales would be lower than expected. the company missed earnings by share by a penny revenue guided flat to the downside for q4. but data center sales held up. gaming was a little higher data center sales, part of the reason the stock is higher today trading over 3% higher kbret several analysts from wedbush, key bank and piper, amd ceo lisa su warned sales would get worse in q4.

that's why the client segment dipped 40% year over year. data centers, the silver lining which accounts for over 20% of its revenue climbed quarter-over-quarter and year over year. that's a welcome change from intel who saw profit drop 27% in data centered ai during the same time frame sue also reiterated on the call that the u.s. export curbs for china would have minimal impact. where does that leave qualcomm ahead of earnings given its high exposure to consumer markets the stock is down 18% reflecting weak smart phone sales, but falls in line during the exact same six-month time frame you're seeing on your screen right now. consensus on the street is to look behind -- beyond i should say q4 because auto and the internet of things segment saw a 35% revenue growth in the previous quarter can that continue? bernstein says qualcomm share's valuations are among the cheapest in history right now. the company should pick up high

end orders from its customers samsung and apple may hang around a little longer than expected as a customer heading into 2023. that's pointing to a better setup for next year. but investors may have to endure some short-term pain that we'll get over the next quarter. guys >> all right we'll be watching those results after the bell we know you'll bring them to us, kristina partsinevelos, thank you. >> thank you. >> as we head to break, here is our roadmap for the rest of the hour another rate hike expected this afternoon. former dallas fed governor richard fisher joins us to talk about what comes next. should the u.s. ban tiktok we'll discuss that and a few other things with fcc commissioner brendan carr later this hour. pair mount shares slumping more on why one analyst is earecasting even more weakness ahd. we have a lot more ahead don't go away.

welcome back to "squawk on the street." communication services spiddr ef ticker xlc is falling this morning, down about .5%. paramount global weighing heavily on the group after reporting an earnings mess the media giant has seen strength in the direct-to-consumer business. linear tv media saw revenue fall 5% year over year due to a drop in advertising and fewer paid tv

subsc subscribers. those shares are down 9% right now. our next guest downgrading a stock earlier this year, now has a sell rating on it, lowered price target from 19 to 13 we're talking, of course, about paramount. the analyst in question is wells fargo's steve kay hoe. going to an equal weight was a good call a few weeks back, and then the underweight as well given the reaction to earnings what did you hear from the press release and on the conference call this morning from paramount. do you agree with the market's response to those earnings >> thanks for having me this morning, david so generally i think the outlook here continues to be very weak it's not just for paramount. it's for everything in linear m media. a lot of advertising and shifting over to netflix and disney plus. paramount has a long way to get to go on profitability on streaming. when you put all that together,

it's a tough outlook strategically for the company. that's why we downgraded earlier in the week. >> yeah. i said there were a number of investors hoping perhaps they would speak to moderating their content spend on the call. that didn't seem to happen: to your point made in your most recent downgrade, you say you struggled value direct to consumer without a clear path to solid profitability and also point out it's simply -- being self-distributing may not scale enough to create real value. so what are they -- when would they make that pivot how long are investors going to have to wait for them to lose money potentially in your opinion? >> i think we're getting a bid of a read on that today which is that investors are very squeamish about the capital intensity, the cost, the free cash flow burn to get to scale and direct to consumer you look at the direct to consumer playing field and you know this. it's disney, apple amazon, comcast, netflix these are really large-scale

players you've got to compete against to get that profitability back i think investors are kind of looking at this and saying paramount has great content but they may not be monetizing it as well as they could under this self-distribution streaming strategy >> yeah. always that question on whether you want to be an arms supplier in this world. you mentioned ad-supported netflix imminently with their add-supported tier how do you see all that playing out. does it impact at all market share for some of the other providers that also already have an avod tier >> in the short tirm i think the impact is relatively minor because netflix needs a lot of stubs in there so they can have commercials that marketers can put their advertising against. as we've seen in media, once tissue is there, that's all we talk about bob iger mentioned cord cutting in 2016 and that's all we talked about since. netflix will start advertising

in november. that's all we're going to talk about for the next few years even if it takes time for the dollars to start rolling over. i think the stage is set for this to be a really challenging period for traditional advertising. >> all right we'll be staying tuned warner brothers discovery the next to hear from. i think earnings are after the bell tomorrow. steve, thank you. >> thank you david. dow transports coming off their best month in 11 years we'll discuss with the ceo of ucngof america's biggest trki and frustrate names ryder systems. that's coming up next. stay with us ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi.

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is that important? or you could use workday. the finance hr and planning system that helps cfos make better decisions faster. for a solve problems like a genius world. workday. for a changing world. welcome back freight companies are forecasting, some of them forecasting softening demand with truck load rates falling to the lowest level since january 2021 in what's usually considered peak delivery shipping season. our next guest says while it's still a relatively positive environment, industry is

preparing for some kind of recession. for more let's bring in robert sanchez, ceo of ryder system great to have you back on the show is that true is the industry preparing for some sort of recession here? >> well, we're certainly looking for things to slow down from the peaks we saw during the pandemic as you know, frustrate rates got to record levels during the pandemic as everybody started to buy more goods, spend less on services and there was a shortage of trucks to move all that freight we are seeing things slow down in the freight market and get back to i think -- over time get back to more normalized levels next year maybe a little slower if we go into a se investigation. the good news for us is that the vast majority of our business is transactional. we're providing fleets of trucks to companies that are mostly not in the transportation business, but need trucks to move their products we also provide services like

dedicated transportation we provide trucks and drivers to run a private fleet for a company. and then we do broad supply chain services that's been a really hot topic since the pandemic started companies are really coming to companies like ryder for help in how they manage their supply chains >> i want to get into that more. first,up ear the perfect person to speak to the nuance we're seeing within freight given what you just laid out. that's the fact that spot rates in trucking have fallen off a cliff. it's what everybody is pointing to saying, oh, my gosh, potential recession. contract prices are actually on the rise right now it sounds like that's what you're seeing. how does this speak to this normal normalization within the broader framework right now and what it means for supply chain, too? >> you're seeing, as freight has slowed down, consumers spending

more money on services, less on goods. we've had a little slowdown on the demand side. with that you've seen the freight rates on the spot market come down. more companies have said, i'm going to now move to contractual rates so i have more consistent and reliable service from carriers most of our businesses are contractual. these are long-term contracts we have with companies to move their freight. we're seeing that still continue to grow in terms of more companies coming to companies like ryder for that type of service. >> we're hearing about inventory builds among retailers, amongst other industries as well, given the fact that you have these companies to move and plan for the movement with so many different companies across the industries what are you seeing? >> there's certainly inventory beginning to grow as the fed continues to hike rates over time you're going to see the economy slow down. it has to happen over time

we're still seeing strength in certain industries for example, we're a large player in the automotive logistics business think about automotive production we do a lot of the inbound logistics for those large companies. and we're seeing that business really strong now because as they've gotten past most of the disruptions from the semiconductor shortage, there's still a strong demand for automotive and really a backlog of demand of people needing to buy new cars we're seeing really good strength there e-commerce is another big area for us as we entered that business several years ago with acquisitions we're seeing a lot of strong demand on the e-commerce side as more companies look to go direct to the consumer through an e-commerce solution. >> okay. shifting gears. earlier you rejected a takeover. then there were reports that apollo global was exploring a

takeover of ryder. >> we're not for sale other than if you want to buy ryder stock, it's available on the new york stock exchange with the letter r. no, we don't comment -- we have a policy of not commenting on speculations and rumors. so there's not a whole lot i can tell you there, other than we're continuing to execute very well as a company we're going to have record revenue, record earnings this year and look very good going into 2023, even as we see the economy slowing down, we see the contractual parts of our business continuing to grow as more companies look for outsourcing of supply chain activity. >> okay. robert sanchez, great to have you back on the show thanks for joining us, ceo of ryder system. >> thanks for having me. higher costs taking a bite out of cheeses cake factory's results along with other restaurant-related companies we'll check in with ceo of done

brands, that's the company behind applebee's. don't go anywhere.

welcome back to "squawk on the street." i'm bertha coombs. south korea is on high alert after north korea fired 23 missiles into the sea near the country's sea border south korea sounded air raid sirens and responded by launching its own missiles into the same border area it comes hours after north korea threatened to make nuclear weapons and south korea, quote, pay the most horrible price in history in protest of those nation's on going military drills. former kansas city chief assistant coach brit reid was sentenced to three years in prison for a 2021 drunk driving crash that seriously injured the young girl the 37-year-old reid is the son

of current chief's head coach andy reid. britt pleaded guilty in september. former israeli prime minister benjamin netanyahu appears to be heading towards victory with 85% of the ballots counted in the national election israel is potentially heading for a far right wing government, further diminishing hopes for peace. >> bertha, thank you stocks are down a bit over what may assume will be the fourth 75 basis point hike from the fed. former dallas fed president barclay senior adviser and cnbc contributor richard fisher, still a longing great, richard >> i'll be 74 in march thanks for the compliment.

>> you're welcome. an inspiration to us all you had a speech in which you said the wise owls, this referring to the fomc -- have come to realize their mistakes and are hellbent on sleighing the inflation dragon in your view it will take time are we going to hear more commentary along those lines do you think later today from fed chair powell >> i think you will. i think it's going to be cautious everybody is trying to figure out in the marketplace what's going to happen to the december meeting. but they have two more sets of data, two more cpis, and more data will come in before the december meeting but they're not done the question is to what degree they keep moving if they move 75 at this meeting, will they carry on with another 75 which some people are speculating, or will they taper it down to 50 or maybe less. i doubt it will be less than 50.

so we have higher interest rates than we've experienced over the last several years everything from six months out is four over, over 4%. we're going to have to live with that for quite some time that depends how you interpret future cash flows. >> without a doubt we've been seeing that play out for a period of six months or so richard, i'm referring to this re recent speech you gave where you were talking about the balance sheet as well. it almost reached $9 trillion. we thought the numbers were pretty big back when you were on the fomc, back when it was 1.5 trillion in q1 what impact is the contraction of the balance sheet having in your opinion and, again, how far do you expect that to go >> it's going to have various impacts. i do think we'll continue on this path. there's a math equation

basically that equilibrates to the fed funds rate the real issue is who is going to buy this stuff and who has the wherewithal to do it we've seen a lot of private foreign demand come in for treasuries one could speculate, could speculate, that's actually holding these rates down a little bit, even though official flows are not so robust. a lot of it has to do with what happens with bank reserves bank reserves are down to the $3 trillion level that is about a trillion plus. i think i read this morning a trillion two less than not too long ago who is going to be able to have the wherewithal to buy these new treasuries that come out of the fed, and very importantly, dave, we also have deficit numbers, another trillion next year

i think the math is about 1.5 trillion will have to be taken down the question is at what price and who is going to be the buyer. i think it's important to think about with the balance sheet it's adding to the supply of new treasuries it's going to come out from deficit spending these are big, big numbers >> right richard, in part the deficit being driven by higher interest costs on the existing debt and future debt. that's obviously a cycle also, though, would seem to feed into the restrictive nature of what the fed has been up to. it works in the direction the fed has been trying to head. i wonder how that's going to play into the message today in the sense of, look, everyone knows that policy acts with lags everyone knows that the fed has been calling this project a front loading of the tightening. at some point i guess you have

to have more debate over how much higher and how restrictive we are. >> i think you're right. that's why i think we're in for a long period of rates above 4%. what i said in that speech which, by the way, september 14th was not quite 3.4 i said we'd have much higher rates and the consequences of it which was the purpose of the speech we're now at the 4 plus range. i hope investors will get used to the fact that that's likely to be the plateau on which we operate, maybe a little higher we'll see, for quite some time so that hurts -- continues to hurt the tech companies. it does a lot of damage on venture capital, on leverage loans, particularly on those that are borrowers who are variable rates, not just fixed

rates. it's tough for the mortgage market it is more restrictive than you've just mentioned. that's the intention we'll have to see. we got very strong numbers from adp just now on employment we'll see what comes out on friday to see if they've kwaet to each other. the economy in the service sector is not being restrictive. it is still very strong. the goods sector, that's a different story. remember, only 17% of our economy is manufacturing 70% or maybe more is service sector and there people are continuing to hire or are not laying people off, particularly the smaller companies the nfib companies that's what drives the u.s. economy. still jobs are being created people looked for to work. as long as that's the case, we're going to have a pretty

strong consumer economy, even though we're seeing some lay-offs with the big corporations so i think we're in for a period of high interest rates as i said, this is the plateau that will be with us for quite some time. >> richard, you embraced a lot of the arguments that we continue to have here and elsewhere as we await fed chair powell's press conference later as well. thank you. >> may i just say one more thing? >> sure. >> this is the only time we've had a fed chairman that has to make a pronouncement after every meeting. my hat's off to powell because he's providing as much transparency as possible the last thing you want to do is create a taper tantrum which is what happened in 2019 when chairman bernanke shocked everybody. i want to give him credit for being as transparent as possible i think that's what they're doing right now, in order to

prepare the markets for what's likely to ensue. so before we hang up here, i just wanted to tip my had to chairman powell. we'll see how well he does at this press conference and what he signals this time. >> yes, we will. richard, always appreciate your helping us navigate it as well richard fisher >> thank you so much should the u.s. ban tiktok if you ask our next guest, the answer is yes. he says there's no path forward otherwise. fcc commissioner brendan carr joins us next. don't go away. back in two minutes. to smooth, heal, and moisturize your dry skin. gold bond. champion your skin.

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we're keeping an eye on shares of meta and snap. why? well, they were up yesterday and part on calls from an fcc commissioner who said there should be a u.s. government ban on tiktok. he joins us now to explain commissioner brendan carr is with us from taiwan. worth noting, by the way, the fcc doesn't have any authority

to actually regulate tiktok, at least not directly commissioner carr, you were quoted as saying i don't believe there's a path forward for anything other than a ban. why? >> look, i started out open-minded here we've been seeing sinceat least this past summer bombshell revelations about how all this personal, sensitive data tiktok has been collecting has, in fact, been making its way back to beijing tiktok testified recently and said it could not address where ccp members are actually addressing it. all that said, i thought it was important that we let the national security review play out that treasury is running it's not run out of the fcc. but since then we've seen a number of shoes continue to drop ten days ago a report out from forbes that shows tiktok has been tracking or trying to track the location of u.s. entities, u.s. people. that's deeply concerning the same report showed tiktok

officials have been asking unusual questions about the location of oracle servers here is the crux of it this deal that sip yus has been trying to work out with tiktok relies on all this tiktok data going through oracle servers through something known as project texas. if tiktok officials are asking detailed information about where those oracle servers are located, that's concerning you pair that with the recent report that show tiktok officials in d.c. according to leaked communications have said even after that project deal is to be cut, they aren't confident beijing still can't get access to the information tiktok employees themselves reasonable confident that a sip yus deal can secure u.s. user data i think we should take them at their word. >> bite dance, the owner of tiktok is not blind to these concerns obviously there has been certainly, i have heard, some idea or plans that they would spin off or have tiktok be

completely a u.s. company, so to speak. given some of the concerns you just raised, you still don't feel like that would be enough were they to actually go to that kind of a step >> what i've seen so far from the reporting of the tiktok officials is they're not convinced there's any deal that can be worked out that will still prevent beijing officials from getting access. at the end of the day, according to leektd materials, they say these were tools built by beijing. you look at recent "new york times" report that had a report on a tentative deal that's been reached reportedly with tiktok, the same "new york times" report said the number two at doj, lisa monaco, expressed concern that the deal wasn't tough enough on china. everything we're seeing in the public sphere echoes that. i'm here in taiwan as you mentioned. there's probably no people that understand the threat posed by china than the taiwanese here in taipei city.

i think it's important the u.s. speak clearly on this issue. >> i'm glad you brought that up. why doesn't a regulator of communications infrastructure to go to taiwan and specifically right now, given the fact we have seen tensions between the two countries flaring too much >> i think we're at a really important point in time right now with u.s. relations with taiwan, given we're coming on the heels of the communist china con fab where they've been doing sabre rattling it's incumbent for us to show support for taiwan a free, democratic taiwan is vital to america's own economic prosperity 90% of chips are made here in taiwan, that's critical for the u.s. supply chain. we have collaboration going on network resiliency, cybersecurity. i was meeting with the deputy minister of foreign affairs in taiwan focused on exactly these issues. >> i want to shift gears in

terms of social media as well. when i say tensions flaring between two countries, i did mean the u.s. and china, which i think you understood i want to switch gears in terms of social media. twitter, we just saw it taken over five days ago by elon musk. a lot of talk, reports coming out involving unnamed officials that we could potentially see u.s. reviews of that deal as well i want to get your thoughts on what we're seeing with that company and how it speaks to regulations afoot or light though they might be, where the fcc is concerned >> there's concern about some in the u.s. calling for a sip yus review based on saudi arabia holdings the reality is those aren't new holdings at all. those have been in existence for quite a long time without raising some concerns. i think as a general matter, i'm glad elon musk consummated the purpose, hopefully he'll bend twitter toward more free speech and diversity of use

i don't think we should rely on the benevolence of anybody i think we should put in place pro speech guard rails to promote views on all social media platforms. >> back to tiktok. what would -- there are an awful lot of people who use and delight in that service. many of them teenager girls, many of them past the age of 18, so they're voters. what would a ban look like in your opinion would this thing simply disappear? is that what you'd like to see there is no way to sort of continue to have tiktok and the algorithm that powers it so successfully be a presence in the u.s. social media universe >> you're right it's an immensely popular app particularly in the united states, particularly among young people i think it's a fun platform for sharing videos or dance memes, but the reality is it operates as a sophisticated surveillance tool we have to find a path forward

that cuts off all access to this data back into beijing at this point i don't see a path to doing that that isn't some type of ban. in terms of short-form video sharing platforms itself, i don't think there's any threat there. there's plenty of competitors and other options that people could pick up the tiktok operation afterwards we're sending lots and lots of data to beijing. that's feeding, training and improving china's ais, artificial intelligence which they're using in authoritarian ways to stay in power. i think that's a reason we need to be concerned about all this data flow back to beijing. >> again, they would say, if we created a u.s.-based company and all the servers there, there would be no connection whatsoever with beijing. you're not of the belief that's possible or simply don't want to consider the possibility of it being possible >> i was very much open to that sort of point of view a couple month ago. again, what we've continued to see is shoe after shoe has dropped. there's no separation between

the beijing bite dance operation and tiktok while they claim there's separation, corporate breaks between them and firewalls all the reporting we're seeing including internal communications is showing that everything is seen back in china. in theory, i was very much open to this. the data and the info we're seeing and reporting we're seeing shows there doesn't seem to be a practical way forward where beijing is not going to still get access to this if they're in the corporate chain somewhere. >> all the security stuff raised really since the last administration the fact it's taken years to play out meantime tiktok becomes a bigger and bigger market leader in social media in this country, based on some of the reports that you're referencing, it is alarming finally, commissioner, i want to shift gears. fcc regulates another elon musk company and that's spacex where star link is concerned all these low earth or bit constellations, whether star link or others we're seeing

begin to get built out it want to get your thoughts on that technology, that infrastructure and especially where star link is concerned given the fact we know it's playing a crucial role that technology in places like ukraine and iran right now and yet it hasn't been annual to get certain types of funding from the fcc. >> look, i think this is this ia shame as i've talked about before, the current fcc effect ichlly backtracked on an $800 million deal that we had reached with elon musk's starlink to bring high speed internet to rural communities and replaced that with nothing to your point, i think it's in america's strategic interests to back whether it's starlink or some similar leo technology to provide being an internet service to danger zones around the world. we're seeing it right now in ukraine. we're seeing it in iran as well. i think america needs to stand up the strategic capacity to be in internet service. it's the modern day version of

radio free europe. >> and finally, very quickly, you at the fcc don't have any real power here in terms of that national security review of tiktok, is that correct? >> this isn't an issue like huawei or zte are where there's s.e.c. funding at issue that could be revoked for me what i'm doing is bringing my experience i've gained from huawei, from zte, from those types of cases that deal with nefarious data flows back into china and bringing that to bear with my speaking out on the tiktok issue. this is one that in the main is for treasury to decide my view from what i've seen is i've seen enough i think we should ban it those inside treasury are free to make a different decision obviously. >> commissioner carr, appreciate your time. thank you. >> thanks so much. markets in the red this morning, the s&p 500 sitting on about a half percent loss. we'll be right back. stay with us

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welcome back to "squawk on the street," consumer demand in focus this morning again as a

number of restaurants report results. cheesecake factory with a disappointing loss dime brands the parent company of ihop and apple bee's headed higher after an earnings beat thanks to solid growth in same-store sales joining us now first on cnbc, dime brand's global ceo on set with us. >> thank you, good morning. >> walk us through the quarter what are you seeing in terms of the health of the consumer across your different brands >> so we had a strong quarter. apple bee's posted its seventh consecutive growth and ihop's sixth consecutive comp sales growth our guests are surprisingly resilient right now in terms of coming out to restaurants and tolerating the price increases that we've seen. and you know, we really believe that's because, you know, our brands are safe havens in times of -- tough times like this because they're value oriented brands and our guests know and trust them, and during times like this, consumers go to brands they know and trust

>> it's a key point the fact that they're value oriented. the fact that you've been able to increase prices is there a point at which you would expect to see consumer pushback >> there's going to be that point at some point. >> but you're not seeing it yet? >> not yet what i can tell you, year-to-date applebee's has raised its prices about 7% and ihop about 11%, which is about half of the increase of cost of goods into our restaurants in the first half of the year we're 22%. a little bit less for ihop so our fran cheesies that determine our priz pricing are g a great job of balancing margins and being sensitive to where our customers are. >> there has been one trend ori options, the cost of groceries has gone up faster than eating out. is that something that's going to shift back at some point?

you mentioned that your raw costs are moderating a little bit. so maybe that equation changes >> you're right. at the moment, the cost of eating out is up 7 or 8%, and the cost of groceries is up 12, 13, 14%. that's certainly favorable for us but this is at a point in time where, you know, both our brands are putting very rich promotions into the market. that's still necessary so at apple bee's, for example, 12 shrimp for a buck with any steak, you know, that's one of our more aggressive promotions ihop is doing 2 by 2 by 2, two pancakes, two eggs, two proteins for $5 that's driving traffic for us in the last quarter >> what about labor? we've talked to you about it in the past have things moderated? are you still having a hard time finding people and keeping them? >> there's good news here. for five, six quarters, we've had tissue-- we were stuck at 9 staffing and now we're at 92, 93%.

we're seeing an increase in applicants, particularly for tough to fill jobs like cooks in the kitchen. we're really shifting from recruiting to retention. our franthey're extending 401(k a broader population within their team members, tuition reimbursement. they're really getting creative and aggressive in locking in retention. >> i want to stay with the franchisee theme for a second. what's interesting about a company like yours because your a franchiser, you have not only insights from a bigger company perspective but also from small and medium business perspective because of those franchisees. >> that's right. >> how are they responding to you in terms of costs, in terms of labor, in terms of all those shrimp for a dollar? i can't imagine they'd be very happy about that because it's going to eat into their margins, no >> so our franchisees range from ihop franchisees that have one or two restaurants and they're owner-operators in the kitchen

to the flynn enterprises that's got 450 applebee'sme so when we put a promotion in place, we do it in concert with our franchisees. both brands have marketing counsels and it's a collaborative effort between our brands and franchisees so they agree what's needed at a point in time. all of our franchisees were in support of those two promotions i just mentioned. >> we appreciate you being with us today, john peyton, dime brand's global ceo with those shares trading up 1% right now. we've got the s&p 500 down a little less than 0.5%. mike santoli since you're here and will be joining us throughout the day particularly on this fed day, how do you see things playing out >> i want to hear what powell says about whether he thinks the policy after today's move is already restrictive, if the bond market has already figured it out, and what you want to watch is the dollar. if the dollar rallies on whatever he says, it means the

market still feels like it needs to catch up to the tightening that's likely to come. right now everything's kind of stuck in neutral two-year note yield is down on the day. i don't think right now the market is clenching up for any major jolts. weal see what we get >> as we say the s&p down about 0.5% that's going to do it for us on "squawk on the street. "tech check" starts now. >> good wednesday morning, welcome to "tech check," i'm deirdre boese with jon fortt, today a ton of movers to get to o' we're talking airbnb, intuit, para paramount, how that is all impacting results. plus, zoom info and chegg heading in opposite directions this morning the ceos of both of those companies with us this hour. and two big bear tacalls. >> wow, that's a lot but we've got