know, you heard it right from the person's mouth, elon himself. i don't like saying horse. i want to be nice to everyone. good to have you on, jonathan. thank you. >> always good to see you. >> good to see you wow. we got five seconds to go here >> straight from the horse's mouth. >> i know. i didn't want to say that. i don't know i'm trying to be nice. >> it's okay >> a horse is a horse, of course, of course. "squawk on the street" is next ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. more selling momentum after the worst fed day performance for the s&p in almost two years, on a day packed with data and earnings several companies with softer guidance we'll get to all of it our road map begins with a hawkish fed dashing those hopes for a pivot. futures do point to a lower open >> plus, chips are challenged. qualcomm, the latest issue, poor

guidance, announcing as well a hiring freeze. meanwhile, lisa su says she sees weakening pc sales and roku shares are tumbling yet again. ad sales continue to slump >> let's begin with the markets, poised to extend that fed-fueled selloff. at the conference yesterday, chair powell made it clear that more rate hikes are in the cards. >> it is very premature to be thinking about pausing, so people, when they hear lags, they think about a pause it's very premature, in my view, to think about or be talking about pausing our rate hike. we have a ways to go our policy, we need ongoing rate hikes to get to that level of sufficiently restrictive, and we don't, of course, we don't really know exactly where that is we have a sense. >> jim, your general take this morning is if you were surprised, that's on you >> why did he say -- why didn't he use that term, something that

inlded very far away, in his actual 2:00 statement, which was worthless? we got to rethink, by the way, how we view the fed. they put out a statement, and it's now been contradicted by powell in the press conference almost every time, so let's just say that he's just putting out a boilerplate, and then he gives you the real grist, and now we have to -- the two-year, 4.7 so, if you're a broker, and i call you and say, look, i'm looking right now at roku. it's down a lot. seems like it's got a grim guide. is this the time for roku? and i think you would say, well, maybe it's the time to earn 4.73% on the two-year. i mean, that's kind of -- that's really hard to beat. >> jpmorgan's note last night was titled, from dove to hawk in 30 minutes you think the statement is more about giving whatever doves

there are in the committee their say and then the presser is more personal >> i like that i do think that october, we're going to find out was an incredibly weak month. that's the sum total of the research and therefore, he is right to say, look, there's a lag. but other than that, what did he have i mean, he was going over -- he does have any ammo to stop tightening mortgages. not enough and so, david, when you're powell, you got to give him some reason you need a reason. as a matter of fact, i will tell you right now, he's being no hit by inflation >> for those who don't know, jim was in attendance for that wonderful performance by his phillies you're okay. you're still two games away from winning the world series >> that rarely happens >> carl piling on. >> i googled anyone ever have a no-hitter in world series i googled that on the way home and sure enough, don larson had a perfect game in '56, and then

there's never been another one well, i've got to tell you, i want to go back to powell to say, he's not on base yet. he's not gotten on base. >> why does the market -- what is it going to be? will it be tomorrow, early next week that we're getting ready for a pivot? why does this constantly come back >> hope springs eternal. >> is it also a reflection of people looking at different things within, whether it's company earnings or the fallen commodity prices, at least some, and just say, it's got to be there. it's got to be coming and then being disappointed every time? >> well, i think that if you have one bad month, he basically said, look, the last thing i'm going to do is pivot and then have a month that's hot. i think that that -- >> he said that at jackson hole, too, didn't he, more or less >> look -- >> when we began -- >> i want everyone to sell stocks and buy the two-year, and some can buy the five-year he doesn't care. he's trying to stop inflation so that when your portfolio, carl,

when you get -- if you're putting your money away right now and you're 40 and you get to 70, he wants to make it so that you can still buy a lot of things >> he actually made the point that not -- most people don't finance at the short end housing is not built that way. >> no. >> that, combined with narrower path to a soft landing, and this notion thatit's better to overtighten and then support than not tighten enough, all those three things go together >> i go back to the 2:00 statement. what a great thing if he had just said, look, we're not done yet. we will do whatever's necessary, and we might even have to do a little more so that it doesn't -- so we're not fooled and then, you know, just use that statement endlessly i don't understand why he gave what's basically a sanguine statement and then -- >> you can see what happened yesterday, of course, after the statement, the market moved up rather significantly, only to

collapse upon hearing from mr. powell >> so, then, we have to ask, who are those people >> the people who are buying on the statement? >> no, because the statement is no longer credible when it comes to what's going on the conference call -- david, the presser, as we call it in the business, was extraordinary. at one point, someone asked, do you think there's a possibility of a soft landing? he said, yeah, there's a possibility. that's why people say, oh, pivot. he said there's a possibility. >> right >> so, he opened the window there. >> you don't expect him to say, no, there's no possibility >> no chance the forecast calls for pain. i'm out. >> it's a total mr. t situation. it is. clever line. it's a clever line narrative and i think people have to go back and watch that. plus, they have to watch "witness," of course i said we were safe at 4.5 i was wrong. i don't want to joke beyond that, because the fact is, when

i look at these rates, i think about other years in the '90s, and i say, okay, listen, it could go to 5.6. at 5.6%, you really have a very hard time owning stocks, other than the people who say, i've got to own stocks for 30 years >> well, although, the dot com boom occurred during that kind of interest rate environment, jim. it was not a problem, because it was normalized rates, and we were -- >> the dot com boom. >> yes, what about it? >> the dot com bust is very similar to these companies that have been creating the last two years. no, there's no consolidation to speak of other than hub spot, which i know you follow very closely, customer relations management, every company that reported last night, there was a negative. etsy had something positive. etsy had good numbers. >> definitely the collapse of some equity valuations in some of these companies is reminiscent but it's not like the dot com. >> you don't think peloton turn around -- >> literally, every day, you had business models that had absolutely no chance of ever

succeeded were being funded. >> we're about to talk about a company that i'm very close to that had anunbelievable meeting, september 26th, about how good things were in the auto business let's go there >> qualcomm is down in the premarket despite the quarterly beat they do cut ruevenue guide amid the slump in smartphone demand on last night's call, they emphasized the need to cut expenses >> we have already implemented a hiring freeze, and we have planned spending reductions across our mature product areas in sg&a to fund our diversification. we are continuing to evaluate additional actions, and we are prepared and committed to making further reductions to operating expenses as needed >> he's going to be jim's guest tonight on "mad money" at 6:00 p.m. eastern time between that, jim, and the double downgrade at corvo, chips are going to have an interesting session. >> the qualcomm was very disappointing. we have been selling qualcomm,

sold some this week for the trust. just because we've felt all the semis are awful. i've been saying this. semis are awful. what i thought was so interesting was that there was a slowdown on everything now, i know that cristiano, the ceo, felt that the internet of things and auto was going to save them. then the question is, on september 26th, would that have been a good time to say, we're seeing a slowdown. it's possible the slowdown occurred right in october. but you're talking about taking $12 billion in revenue and coming down to 9.2 to $10 billion in revenue that is brutal and so, i think that's what you should focus on because it's, of course, apple and samsung, they are the best at what they do he does believe it's a two-quarter inventory glut i think that lisa su would agree with him, the ceo of amd two quarters david, two quarters is really, really far from now. >> sounds like you're setting up for kind of a challenging

interview tonight with cristiano. >> i think the bottom line, powell does not want this market higher he doesn't >> how did we get back to powell we were just talking about qualcomm i mean, come on, man selling chips into phones and now you got to talk about powell >> i'm giving you what i regard as one of the tougher of the night, trying to -- i'm using it as a metaphor. >> for what? >> for research. >> oh, i see okay >> see, now, the question is -- >> can we get back to qualcomm >> believe, deceive, reset >> it is an interesting bellwether in some ways. they are growing very quickly in automotive >> right >> that said, it's off a very small base but they have obviously a product portfolio there that has become fairly significant. >> it's an inexpensive stock that's why i was drawn to it i think that cristiano amon is quickly making this company into more than cell phone >> yeah. >> but the problem is, once

again, china the policies of china are simply not conducive to earnings surprises. >> you got to explain that for people >> china was the weakness for qualcomm >> the sale of -- >> yeah. i mean, china. look the other day, i was talking to an executive who sells a lot of -- does a lot of business with china the chinese, he was saying, they are turning into a consumption economy. that's what xi wants but they love to shop as an experience experiential almost like when you went to the mall when you were little. remember, david? >> we had one mall in queens, and i didn't really go there >> you go to a mall. and it was really exciting like, wow, look at this gap. well, the chinese still love to shop, not as a people, but i'll give you an example. 11/11 is a day, david, infamous day, that's shopping day >> it is

>> and people are worried they won't go out >> covid restrictions in china are preventing people from going out. also from buying all sorts of stuff, including new phones. >> thank you >> apparently. >> i rest my case. >> now, as well, they're provider to many of these companies, these chinese handset manufacturers, and they have inventory. >> almost every single one -- >> they have inventory gluts that they haven't worked off as quickly as might have been anticipated. >> there's still some weakness globally, macro. but carl, over and over again, we hear two things one is that china, the shopping is really, really done and the other thing is, at the same time, it's the fed is not saying, you know what? we have weakness in china. kayla tausche asked an amazing question >> yes, she did. >> and the answer, i felt, which was pretty clear was, hey, you know what? not good don't care >> right we're in touch -- we're in high-frequency touch with those governments. >> i loved the question.

>> yep >> because what it said was, basically, hey, what the -- i don't care sam gerard >> that reining in inflation domestically would be long-term positive for the global economy. >> he's not looking at anything. he's just -- he knows that things are not so great overseas, and he doesn't care. but if you sell overseas f, if u sell in china, you're not selling anything >> that's why we talk about the covid lockdowns almost every day. >> how many people who were at the disney park who were symptomatic that got tested? how many >> none. not one. >> right not a single -- it was a total no-hitter when it came to symptoms >> that's correct. everybody got out eventually because they all tested negative >> but that's what i mean. i mean, what kind of policy is this >> it's the policy -- >> what is he doing? but again, he can say he's, like, if he had a presser, and kayla tausche asked him, how about the united states? i think he would say, you know, i'm in touch with them

regularly. >> i don't think that's going to happen any time soon when we come back, we'll talk about roku, the holiday outlook slamming the stock just one of several companies with softer guidance today including under armour, moderna, peloton, zillow. take a look at futures we're back after a short break to adapt in a fast changing world, you could hire a professional pit crew. go, go, go. sorry. nope. okay. fresh donuts - hot coffee! they deliver real time data and business forecasts when you need it.

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companies are pulling back their ad budgets because they're

uncertain if there will be a recession or not, and so a lot of ad campaigns are being canceled, and so that's why -- so, i think this holiday season, given the unique set of environments and characteristics is probably going to be different than the typical holiday season >> that's roku's anthony wood on the call last night. the stock is tumbling this morning. they did beat on the top line, and jim, user hours were beat as well >> look, when i read that quarter, the first thing i said was, do they have any cash turns out, they do have a lot of cash i said that because they're talking about gigantic losses, gigantic, and big advertisers are not spending negative player margins. the only thing about that i liked was i read this review of, they have a weird al movie coming out >> they got a movie coming out >> daniel radcliff >> and i think that's the only thing positive that i could come up with.

>> oh. >> rich eisen getting into sports talk. >> rich eisen is very controversial. very nice guy. big fantasy guy. i do think that may have been the benchmark. >> total complete -- total complete -- yeah, there it is. pandemic mountain as i like to call them. >> yeah, that is -- yeah >> and we have a lot there are any number of names like that if you look at peloton or zoom. you can go through them here the high, by the way, was about 470. just to put that in perspective. we're talking about a $7 billion market value now as we head into trading today. could be less than that. >> you can reinvest. >> they do they do. >> become an oil company >> yeah. just sort of gives you a sense as to what's happened there in terms of the loss. and then we see where you're down >> quiz. >> that doesn't capture the actual loss of people who bought it all on the way up that's from the beginning. >> let me give you a quiz. >> still down. >> of the companies last night

that reported, which company did well in the pandemic and then did even better after the pandemic ended it's a quiz. >> i would say, did well during the pandemic -- >> i mean, excellent i mean, fabulous during the pandemic >> and has done better even since? >> this is just the most important thing i got to focus on this tonight on "mad money. >> can it be etsy? >> yeah. >> bingo >> i had it in my hand i had it i'm like that magician who has the card >> you buzzed too late >> i did >> it's worthless. >> i was pulling it up >> how much did you wager? >> may daily double? >> yeah, how much did you wager? etsy was amazing and one of the things that's incredible at etsy, they have seven points >> did you write down the correct response is actually what you say, jim? >> it wasn't in the form of a question etsy, 7.6 million what they call habitual users, and the commercials worked

super bowl commercials 40 million users pre-pandemic, 90 million users now i mean, that's amazing >> that said, if you take a look at its chart, it's not that different than many others if you go back a ways because it has los lost an enormous amount of market value as well. >> i'm saying that -- >> that's more a function of -- >> the stock, bad. but the money good >> company, good >> josh silverman. not everything should be dictated by the stock. etsy had a great pandemic -- i don't mean to -- remember that big mask business. and a lot of those people came and stayed with etsy and that's the -- i'm trying to think of companies that had customers and then once the pandemic ended, got more customers. and that's etsy. >> got it. >> not peloton did you see some of the language from peloton >> yeah. we're going to get to peloton, obviously, and marriott and teva and moderna and a bunch of others today a lot of results and more on the

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♪ welcome back time for a "mad dash" as we count down to the opening bell, about six and a half minutes before we start trading here at the new york stock exchange. we've hit roku, qualcomm let's talk zillow. >> there's a particular line at zillow that i want to focus on because i think it is the analog for the moment this is a company that you use to buy a house, take a look at

houses they said that trends deteriorated at the end of september and into october as we see another rapid increase housing burdened so, bringing a decline of 25 to 35 now even worse. in other words, this is the october pivot that i'm talking about. now, if you remember, the fabled, we see a lag kind of comment by powell, it addresses housing. and so, the numbers in october are worse than they were september. but david, if you look at costco, which reported last night, you're still seeing food inflation. so, i mean, you may see some sort of decline because of mortgage rates, but you know what we still got inflation it's whack-a-mole. it's inflation whack-a-mole. >> do you want to touch anything related to housing then at all or not >> depends if you're out of your mind >> so, what does that say for

this thing >> well, okay. here's what it says. all right? just in case you were wondering. for now. >> okay. >> this is -- we're just -- they're just not doing a lot of business now, they got out of that business of flipping homes that was good. >> yes, that didn't last long. >> but look, they're not -- i mean, look they put on a good face. they said some good things, but the fact is that there is a federal reserve, and if they take rates up higher, mortgage rates go higher and that's going to drive the housing market, but as powell said, that's not enough that's just one part of the economy. 10% of the economy is housing, and he has that under control. now we got to worry about the 90%, and he doesn't have that under control. he doesn't some people say he's lost his fastball it's a four-seam 99, okay? and he threw a slider yesterday, and every hedge fund missed it they reached and they failed

not one got on base, and no one reached second base and it hasn't happened since 1956 >> as jim relives his decision to attend the phillies game last night, let's remind you we have an opening bell about four minutes from now we're back with a lot more "squawk on the street.

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♪♪♪ there's no going back.

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. we've been talking about the labor market for most of the morning, jim challenger layoffs, up 48 year on year. there's the report about twitter and musk's plans on the tape right now. stripe, 14% as they prep for leaner times >> i think that the theme of last night was, reset. you've got to reset because you haven't been able to -- you have elongated sales cycles, too much inventory. you don't need as many people. now, a lot of companies that are in this kind of, let's say, data, the only one that did well is data dog, which is a very

good company and they had a lot of other companies like fournette, made me feel like maybe they're overstaffed. they're cybersecurity. i felt like a really important theme of last night was, maybe we have too many people. >> well, you said talhat tech would be the epicenter of jo loss, and certainly, the numbers do say that. >> the question is, is it going to be 2001 i know i have to be very careful. 2001, a lot of the companies, as you know more than anyone, were inflated numbers i'm not seeing that. i'm just seeing a lot of companies that came public during a two-year period that are unseasoned and really, for the first time, first time, people say, wow, what do i do? there's a lot of younger people who have companies and a lot of spacs, david, looking for something to buy, and i just think that it's better to return

the money. >> well, many are. many are choosing to liquidate rather than continue to try the hunt, which proves to be somewhat frustrating at this point for many of those spacs that raised the money. but again, have not actually been a bad place to be invested, because you're getting 100% or actually a little more sometimes, and in this market, if you invest in the spac to liquidate, you're probably like, i'll take that that's better than an s&p down 22%. >> a lot of people come on air and just say -- a lot of the wealthier people -- it's a disaster i mean, i would come on and say, look, just be in the two-year. don't buy the s&p when it's all the way up wait until the s&p comes down a lot. and then, you know, pick of the litter because this is not a disastrous moment there are other people who say this is a, you know, worst since world war ii, and i don't really like that language, even though i like the person who said it, paul singer. >> we haven't mentioned the

elliott letter, saying, don't think you've seen everything if you lived through the '70s or even eras before that. >> paul is a very, obviously, a very deeply intelligent man, but he does tend toward darkness more than the light oftentimes and their pitch at elliot kind of is, the world's a tough place, give us your money and we'll protect it and they do. i don't know that it -- the returns are as strong as some others who perhaps have a different pitch, but it works. so, i get it he's always worth listening to but i would say that, in the couple of times that i had an opportunity to meet with him, he was similarly concerned. >> yeah. i think that you can't overstate the strength and the balance sheet of the consumer. a lot of money you can't overstate the balance sheet of corporate america really fantastic i mean, again, i look at -- the

only company that i saw that had problems is tupperware and i don't think that's the kind of company that's emblematic of the economy. they had a problem i'm looking for problems now every time, lincoln national reported a number, ill-advised ways that they accounted for a universe of life, but the balance sheet is fine. i need to find companies, david, where the balance sheet is weak, like we've seen pre-2007 and i don't have it. i may have a couple thoughts in a minute >> are you going to lumen me >> no. but i will point out etsy, which you mentioned, is up over 8% very good response to those numbers. >> and to your point about a balance sheet, hyatt, 64 crushes 28 cents and they raise the guide. that's going to be the highest, pretty much, since april >> well, i mean, the travel continues un -- i mean, travel is great people are going to take

marriott down. i got to tell you, give me a break. travel is fantastic. but i felt the same way about airbnb i felt that chesky was being conservative, which is the way you should be, but that there is no end to travel travel is crazy. but that's, again, post-pandemic. >> actually, travel was cited by papa john's as the reason q3 pizza results weren't good too many people on the road. >> well, i thought tha restaurant brands like tim horton's was great my favorite, popeye's, was great. they always make fun of my about how i pronounce that that's how it's pronounced in philadelphia popeye's >> you're talking about popeye's >> that's restaurant brands. i'm saying restaurant brands i like >> we got him coming on later in the show >> you do? how does he get that billing how'd you get that >> how did we get it the team, man. the team >> it's called corporate darwinism. survival of the fittest. >> tim horton's turned around.

>> burger king, comps up ten >> i don't know. it's just good i thought the quarter was just a good quarter >> starting to see a lot more green already on the screen four, five minutes in here got tesla. i've got netflix was actually briefly positive amazon -- well, down again things are moving kind of quickly. >> it's a big company, conoco. $165 million >> what did you just say >> oils are on the move again. >> yes conoco with a nice beat. 11% div hike they raised the existing buyback to $20 billion >> and these dividends are gigantic everybody disliked devin's quarter, and i get that, but it's got an 8% yield and that is more than treasuries david, the move at exxon, not up to today, is breathtaking.

that's -- i'm just saying that the companies that i'm praising here are not small cap >> no, no, listen, i've watched exxon now for quite some time and it's added, i think, $150 billion to market cap in that time. that's $450 billion or so, well above that of, for example, of meta interesting to watch the two of them, just over one year >> how about now, apple's market cap. >> you took, you know, yeah, you took almost $800 billion yesterday. jim, you and i were talking. meta did cross a trillion, briefly, very briefly, in market cap. i thought it had just come very close but not had. but it had but the point is, it's lost. >> if you were hired then and you got stock-based compensation, are you thinking about going to restaurant brands maybe special orders don't upset them >> yeah, the stock-based comp is painful for many >> we don't talk about it enough it's a mistake >> typically, the adjusted

ebitda numbers for most of these companies adjust for stock-based comp it's not a part of ebitda, and you do wonder, as stocks suffer, whether employees will demand more cash compensation and therefore -- >> that's my new theme >> therefore, your ebitda number -- your real ebitda number, and by the way, that will -- you're not going to adjust for stock base since stock base is not going to be nearly as large. >> it's no longer job-hopping. where are you going to go? you won't be able to go to alphabet you won't easily go to meta. i want to reiterate yesterday, david questioned me on the length of time that meta's going to lose money on the metaverse, and i would say, it's kind of like jay powell. until it's done. the money will be spent. meanwhile -- >> we don't know when that is, do we? >> no. and hedoesn't either that's the point he doesn't know. he has no deadline >> yeah. >> just like the truth no deadline. >> jim, you asked earlier about balance sheets, and i want to --

in the faber report, i do want to talk about a company i haven't spoken about in some time, in part because its market value is so low. i'm talking about altice usa it's one we used to talk about when we talked about comcast or broadband services in the company. altice, not part of that conversation because its market cap is now $2 billion and going down but it's got $24 billion in debt $24 billion in bonds that have been issued. remember, this is a drahi company, patrick, owner of sotheby's, big owner of british telecom, what they call now bt there's the capital structure for altice talking six times. i'm looking at a goldman note on it which has the capital structure and the maturity schedule, looking at the leverage ratios in the last 12 months, gross and net, about six times, maybe 6.2 but the quarter and why the stock is getting crushed yet

again, well, their revenues were down 7%. they lost 43,000 broadband subs during the quarter many had expected that would be not quite as bad they also lost video subs of 82,000 and they're still spending aggressively to upgrade a lot of their plant against tough competition, to upgrade it to fiber, fiber to the home so, that sort of gives you a sense of altice. but in this kind of environment, you have to look tet otho the o side, to the debt side, because that company, $2 billion, who cares? but $24 billion in debt is held by bondholders >> wow, david. >> and that becomes a question also, drahi is interesting take a look at that stock. trades in london i think he owns, at last count, 18% of that. he owns all of sotheby's just worth a miss there from bt.

they continue to say, no changes planned, i don't believe, in terms of their spending at this point. looking at some of the takeaways from the call. determined not to concede any rere tail market share ceo acknowledged price rises are a risk if competitors don't follow suit, but that gives you a sense there. and in markets like this, eventually, guys who have been very levered, you start to at least wonder >> boy, david, down six times? >> 6.2 times with altice >> that's sustainable if revenues stay flat >> correct you can't have 7% revenue declines every quarter with that kind of a debt load. >> and we watched this because of that immense size of the debt load if we had to go buy some of the bonds, what would they -- >> they haven't broken i think it depends, and i haven't got -- bond quotes, 70s to 90 cents on the dollar. you're going to get a discount there, in part, also because of what's happened with rates but these are not all -- not all

floating right but jim, you know, just worth keeping in mind. that's all they issued a lot of this debt at far lower interest rates, as you might anticipate >> look, powell, that's not something -- powell needs a bunch of those, a bunch of layoffs, and he doesn't want to see anybody making money off inflation. particularly, we'd like to see rollbacks. but if you look at some of the companies, take a look at ball corp., makes cans, during a period where the justice department was distinctly unaware of what combinations could do, there's only two companies that make cans, and so what happens when they make cans they make a lot of money, because you can't pit each other against, and i think that that's really what we're seeing in america. i see this in autos too, i'm

sorry, in airlines you just don't have a lot of companies competing against each other to lower prices. you didn't have hershey competing against mondelez, so chocolate prices were up this is every day and i want to explain to people why, when you go to the supermarket or costco, there's not a lot of competition among companies. yes, transportation is coming down, but you need these companies to say, you know what? i want to take share you need someone, for instance, david, this will -- maybe in your house, you'll know this you need someone to buy utz. frito-lay to buy, utz. you want companies that want market share and want to go head-to-head and no one's going head-to-head and i want to know why why aren't companies in a war to get customers? why is everyone so complacent? raise prices i mean, it's not rhetorical.

>> i don't have an answer for you, jim >> oh, come on >> i don't we have to go. >> we really have to go. >> you're ignoring the music >> there's someone in my ear good guy, by the way >> it's urgent that we go. we're going to get some final composite pmis we'll get ism services and factory orders at the top of the hour yields still elevated, two-year close to 4.72% don't go away. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like...

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up next, "squawk on the street," rick santelli here live at cme hq with the second tranche of breaking news on this thursday these are on the finals so they're replacing mid-month read so, 46.6 now on services becomes 47.8, and they share something in common with the mid-month read it's still the weakest since august when it was 43.7.

and if we look at the composite side, 48.2 replaces 47.3, so also improvement over the mid-month read yet, it is the weakest level going back to august where it was 44.6, and we do want to point out that when we look at services, we need to make sure that we understand that this is one of the big driving forces, the biggest swath of the u.s. economy. we still have a third tranche of data left to come. factory orders, durable goods, and ism services, but "squawk on the street" will return after th srtre isho bak

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important for us to manage these as we grow from here we'll be focused and constrained and probably not going to get to as many things as if the market was -- was doing a little better, but i think the things that we do get to are going to be tremendous. we'll continue to have good velocity >> 12 million maus in september down from 19 million a year alg. almost back to pre-meme craze numbers. >> i'm looking at this slide of monthly attribution, which is credit you can look at balances they have gotten disciplined some companies have pivoted from growth to slow growth with discipline the market likes that if the stock is down already. doesn't like it if it's a high-flying software company so, what you have here is -- they're just investing the

cr credit they don't have any growth they have no growth at saul. >> what do you pay if they have no growth and they're a bond >> i think custody is not good, net deposits is bad, revenue up slightly total revenue up slightly. i think you pay this price and no more. >> maybe you hope they sell it. >> right i was going to say that, but the problems in this environment - >> i know. who's going to buy it? >> all the major firms and many of them looked at it but no one's going to buy did. >> we didn't even mention some of the doj adobe news today, eu, airbnb light touch executive insider selling. >> i think a lot of people feel there's been -- i don't know

>> on the adobe deal, wouldn't they be happy to have that wouldn't they be -- how much market company did that company lose after that deal -- after -- >> that deal was -- look, i speak to him - >> we had him on that day because i was in san francisco at the time. >> he thought it was very necessary. so did ed breen, and sometimes you get a break. although adobe is down 7. >> most likely not going to get a break. it's hard to see exactly the implications buying a private company. they lost $40 billion in market cap. >> some things are poorly received >> meantime we'll see if we can hold 3700 having given back half the october rally. let's get to bob pisani. >> a few days ago we were at 3900 on the s&p.

3600 to 3900 is the recent trading range we've been in, but with the two-year yield hitting new highs, the dollar again starting to rally. whenever those two combine, the market is down that's what we're getting today. when you look at risk-on sectors, i like to look at, semis are weak, qualcomm numbers. metals and mining down roughly in line with the overall market. bank stocks are weak goldman's down 6 bucks in the dow. that's weighing on the dow right now. take a look at the earnings. trends generally not grade, but i do note the online consumer stuff pretty good there. etsy above expectations q3 ebay above expectations. great travel is still out there. booking holdings had great numbers overall. generally, it was a disappointing last 12 hours for the earnings situation qualcomm, the guidance was weak. smartphone demand seems to be

dropping a little bit. qorvo is big in china. that's a cellular company. they missed. cummins was weak roku, a multiple series of downgrades, guggenheim and others downgrading roku. sometimes you want to look for generic comments on the consumer roku says as we enter the holiday season, we expect the macro environment to further pressure consumer discretionary spending and degrade advertising bujs, especially in the tv scatter market we expect these conditions to be temporary, but it's difficult to predict when they'll stabilize or rebound they're sort of saying they're not sure where the consumer is going either as far as the fed goes, retest of the lows. a lot of people saying, oh, we'll probably have a retest of the lows now, particularly on the nasdaq i can point out, the nasdaq is three points from a new low anyhow, i don't find that particularly brilliant observation. we'll see. we're 5% or 6% from new lows on the s&p 500. the question is what the fed is

going to have -- the psychological effect the fed will have on the markets overall. they'll keep hiking into the first quarter of 2023 and the second quarter, higher for longer is the mantra there the only debate is whether we'll have a mild recession or severe recession. the soft landing camp has kind of gone away at this point in terms of earnings impact, i think you'll see them bring earnings back. we've been positive the whole time q3 has been up 4.8%, carl. 2023 we're expected to be up 5% overall. and a lot of people are now saying, like mark at ubs, they're expecting earnings to be negative for 2023. back to you. >> thank you, bob. jim, what's on "mad" tonight. >> elf is very good. lip lipstick, recession, people buy lipstick and qualcomm and raimondo is

helping with the c.h.i.p.s. act. very understanding i can't wait for tonight i can't wait. >> that's a huge show, jim 6:00 p.m. eastern time, "mad money" with jim cramer. when we come back, earnings, inflation, the consumer, don't miss our interviews with the ceos of kellogg and restaurant brands, as we have the dow down e p.n d a shade above 3700 o ths& kept on employees through the pandemic, getrefunds.com can qualify you for a payroll tax refund of up to $26,000 per employee, even if you got ppp. and all it takes is eight minutes to find out. then we'll work with you to fill out your forms and submit the application. that easy. getrefunds.com has helped businesses like yours claim over $1 billion in payroll tax refunds. but it's only available for a limited time. go to getrefunds.com powered by innovation refunds.

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good thursday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan and david faber at post 9 of the new york stock exchange additional losses in addition to yesterday's downside reversal. higher yields are at play, and ongoing worries about what the fed may do we have more data crossing the tape rick santelli has that >> expected to be up 0.3 of 1% delivers, up 3%. transportations weakens to minus 0.10, so we could see transportation was a positive

and if we look at durable good orders on the headline, expected up 0.4, just like factory orders our september final read remains up 0.40% strip out transportation, it remains at 0.50% when you strip them out, you see the weakness eric kraft, another disappointment down 0.4 but bigger than mid-month, down 0.6. ismservices, remember, s&p global services was on the fourth under 50 read 4 under 50 the ism services pmi here for october is 54.4. so, it's still above 50, less than expected. less than the rear viewer mirror and it is the lowest level since

it was under 50 going back to may of 2020 at 45.2 is the comp here even though it is above 50, it definitely is deteriorating very similar to s&p global. morgan, back to you. >> rick santelli, thank you. we are 30 minutes into the trading session. here are three big movers. we'll start with qualcomm. plunging after getting a worse than expected revenue outlook and slumping smartphone shipments at play. we'll have more on that quarter later this hour. you can see those shares are down 9%. robinhood lowering its operating expense forecast for the full year those shares are popping 5%. roku, getting rocked saying it expects advertising revenue and sales of its devices to fall in the current quarter, the holiday quarter. roku is down 15 now. down 80% year-to-date. let's get to the fed this

morning. another interest rate hike delivered yesterday. that was not a surprise. perhaps the signal there's no pivot coming any time soon has surprised markets, that's the way it looks given where the s&p was and is now our senior economics reporter steve liesman has it all for us. >> it was an interesting day, david. there was this hope for a pause that lived for about 30 minutes yesterday. the fed's statement comes out at 2:00 p.m., with the impression fed might be more on cumulative tightening and jay powell steps to the podium at :30 and throws icy cold water on that hope. >> it is very premature to think about pausing. when people hear about lags, they think about a pause it's very premature to be talking about pausing our rate hike >> very premature. they were just thinking about it

for 20 minutes powell said the pause was a ways off but strong economic data shows the peak or terminal rate is going to be high. the fed followed the fed chairman's guidance and continues to see 4.4 rate for year end but peak prices in june 5.15, it's been as high as 5.18 this morning some easing expected by year end with the rate falling. that had been the level of the terminal rate a few weeks ago. so, the fed may slow the rate hike from 57 to 50 fed chair powell was clear they should not mistake lower for slower thomas we'll be talking to thams barkin to ask him questions about this, how high they need to go and why that statement seemed more dovish than the fed chairman, who seemed very hawkish. morgan

>> steve, that's the discord answer between the statement and what the fed chair said during the press conference what explains it >> well, i think there's a couple explanations. sometimes, david, over the years, things have been thrown into the statement that are done to kind of mollify and bring some members on board who are not with the current drift of policy that could have been one of those things hey, we do acknowledge this lag thing. will you vote for us sometimes that's the way horse trading is done in the fed another was a nod to the political concerns about not taking in the lag. people on our air, business folks as well as politicians are talking about that what's clear is it was not the thing driving policy all that did was sort of give us a hint that maybe they'll go there 75 to 50, but then powell comes in and goes, you know, maybe that he's more hawkish than his committee right now >> smaller, higher, longer

steve liesman, thank you earlier today billionaire sam zell was on "squawk box" predicting pain for the fed. >> you can't flood the system with the kind of liquidity they have flooded it with the and not have any consequences. and i think what i'm just describing are kind of normal consequences of an excess on the part of the fed. they were excess in terms of lowering rates they were excess in terms of buying debt, $80 billion a month. they're going to reverse that. market isn't used to that and it's going to be painful >> joining us now, former philadelphia fed chair sam plosser. zell has been through a number of fed tightening and loosening.

he's had a fronts-row seat in terms of his private equity holdings and real estate you've been through a number of cycles as well i think back to your time as federal fed president during the deflation. inflating and deflating of the housing and financial market bubbles last decade. i want to get your response to what he just said there. is this essentially typical? >> that's very interesting his comments were interesting and i tend to agree with him, for the most part. monetary policy for the last 15 years has been in many respects very ectionz treem that has consequences at the end of the day having said that, i don't believe that the statement said anything different than what the fed was intending in any event

i think many people were looking at the statement hoping to find some rickety in the fed's resolve, if you will, slow down, stop, pivot. they were looking for that but the statement really didn't say that there's als then about what powell said, we have to hit rates high enough to restrain economic activity and the growth that's always been the necessity. and that's all the statement said cumulative response -- he admitted that they aren't quite sure what the precise level is but they're not close to it yet. the statement was quite good i'm not one to criticize the

fed, but i thought that powell was quite firm and i believe he had to be he had to demonstrate the fed's resolve because their credibility is at stake. >> he basically said that overtightening is the lesser of two evils versus underdoing it because the central bank is ultimately overdo it if they overshoot the mark he didn't come out and say they've made peace with the very strong and rising possibility of a recession come 2023, but he kind of implied it in some of his responses to reporters yesterday. do you see it the same way >> yeah, i think -- i'm sorry. >> you're a popular man. >> no, i thought i cut it off.

i apologize. i think that -- i think powell was correct. i generally see it that way. i don't think there was any indication i didn't read the statement as any indication -- any indication at all that they were -- powell or the fed was under pressure, at least not yet i really think that the difficult part for the fed is yet to come. they're going to have to raise rates further. i think they could get as high as 6% or more. >> wow and i think that -- i think it's really important the fed stick with that and try their best to demonstrate the resolve they need to make this work because i agree with powell that the danger to risks are not staying

firm long enough if they raise it, then solving the problem will get even more difficult and more damaging to the economy. i think that's the right balance of risk at this point. >> certainly we've had a number of folks, i belief yourself included, have point out that mistake has been learned by this fed from previous central bank compositions in the past, most recently volcker in the 1980s. charles plosser, thank you for joining us today. >> thanks. as we head to break, here's our road map for the next hour, we have the ceos of kellogg and also burger king parent, restaurant brands. both are out with those results. plus once high-flying pandemic plays, well, they've been coming back to earth for quite some time. roku and peloton lower.

>> it's yore down day on the heels of qualcomm trading. market trying to make sense of ism services were prices paid higher but employment sub 50. don't go away.

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those moves for us hi, seema. >> hey, morgan that's right of the two major hotel operators that reported this morning, it's hyatt that delivered a huge beat on earnings. their ceo says it's clear that people are prioritizing experiences and travel marriott was mixed, though it did raise its fourth quarter outlook following the lead of hilton last week and marriott said business travel is gradually improving sequentially, driven by small and mid-sized businesses however, special corporate, which includes big companies, it saw room nights down 17% year over year. largely driven by tech, which was down 23% in the quarter. what we're seeing, the weakness in tech industry is spilling over conferences and bookings overall in travel. ceo did say the stronger dollar is incentivizing americans to travel overseas. that's one of the drivers of bookings holdings which reported last night ceo says he's seeing a significant rebound in

cross-border travel which truist analysts say should help bookings more than expedia expedia reports tonight. back to booking, ceo glenn vogel saying average daily rates are holding steady that's different than what we heard from airbnb which suggested rates would soften in the fourth quarter and into 2023 some questions about pricing power, do hotels have more going into next year versus vacation rental companies royal caribbean saw its first quarterly profit since the pandemic booking volumes in the third quarter. it did lay out some ambitious 2025 goals stock is up about 1% what does this all mean for the xly etf? it's down 0.3%, so holding out better than the broader market >> seema, thanks for that. busy day for you. still to come, we'll check

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welcome back restaurant brands out with a beat on top and bottom lines in q3 burger king sales up more than ten year on year shares are rallying. you see this morning, up 3%. double digit over the last month. joining us first on cnbc is restaurant brands ceo jose welcome back great to see you begin. >> great to be here. thanks for having me good to see you. >> comps up 9 plus was a beat on the street's expectations. can you talk broadly about where demand is right now? >> yeah, we're really excited

about the demand in our business we saw consolidated business growth 14% 13% at popeye's, 14% at burger k king global same store sales consolidated, led by tim's at canada by 11% and bk international at 15% same store sales growth and digital continuing to make momentum. proud of the work the teams -- our franchise owners and team members are doing in a really challenging time which i think is testament, carl, to the strength of our brands, to the strength of our business model, to the strength of our teams and the franchise owners and restaurant owners that do this day in and day out. one more note that i think is important is in -- because of the strength of our business model and our free cash flow, we were able to continue our commitment to shareholders and shareholder returns with 240

million in dividends that were paid out in the quarter, which represents the 40th quarter of growth in our year over year dividend and an industry-leading dividend which we're excited about. there's a lot to talk about the consumer and macro challenging ti times. we think our brand iswell positioned to have tailwinds in our brands if we do the right thing and continue to focus on the consumer, consumer on our franchisee's profit and make sure we deliver our great tasting food with great experiences and doing so at a great value. >> yeah. there's been a lot written this week about margins, especially for companies involved in food a lot of that is package food. the argument is that input costs have topped or at least begun to decline, but pricing has not these companies are going to try

to extend that period as long as they can to protect their margins and that itself is feeding inflation. corporate margins feeding inflation. is that unfair >> we're seeing some pockets of moderation in commodities and labor, but we're still pretty significant year over year increases across u.s. and canada we're seeing tremendous pressure as well internationally in europe in particular and our guests are feeling that pressure every conversation i have with our franchisees here in the u.s., canada and in europe, turns quickly to the volatility and the pressure they're feeling on margins we take very, very careful measures to ensure that we stay in linewith cpi and expectations that our consumers have in terms of pricing we look at a number of different data points. we obviously look at input cost but we look at the marketplace in general and make sure we don't get too far ahead and add

great value to our customer. the course of our business model has been to frequency and driving customer engagement with our brands and value is a key component. always has been and always will be we try to ensure working with our franchisee we don't get too far ahead of the customer and make surewe address these inpu costs that continue to be volatile, even if we're seeing some outlooks more moderate in terms of continued growth and inflation. >> what are your franchisees telling you about labor, how hard it is to get and keep, importantly, where that really seems to be an issue >> labor, we face some tremendous challenges in labor over the last 24 months coming out of the pandemic summer of '21 was the most challenging we've seen steady improvements

in availability of labor and improvements in terms of retention and reduction of turnover our teams at burger king and the u.s., tim's in canada and popeye's and burger king, we spend time working with the owners and creating what we call employee value propositions to ensure we're creating an environment in our restaurant. our franchisees need to do that in their restaurants but we provide best practices and tools. ultimately their decision and they own the entire process of managing their labor we provide kind of a framework and tools to be able to help them do the right thing in their restaurant to create the right environment, address wages and benefit and create a positive working environment in the stores we're addressing reduction or simplification to make sure the restaurant environment is positive and the team managers can focus on delivering great experiences to our guests and

providing the fantastic food we have in our beverages to our customers in a really positive environment. the ultimate -- the ultimate driver of our business is having a great team member experience, which then ensures we have a great guest experience. >> what do you tell a franchisee who says, i was making more money when i was just open as a drive-through and now that i'm fully open again, my margins are getting crushed? >> i think the challenge that franchisees are not operation but volatility in input costs and commodity costs in particular, and some wage inflation as well and what we tell them is we have a number of tools at our disposal, given our -- some includes our buying power, some includes pricing and doing it as strategically, and making sure we don't get too fa are ahead of the consumer and we understand the elasticity of the

demand some is managing our mix to ease pressures on margins and some of it is also creating efficiencies in the restaurant, including simplification and these sortsz of things from an operational standpoint i mentioned earlier technology, our digital platforms preordering and prepayment, we've introduced scan and pay in tim horton's in canada in our drive-through which allows for a single tap for the customer, eases the operation for the customer as well as the team member. there's a lot of work happening on a number of different fronts to ensure that we allow our franchise owners to deliver great experiences, drive top-line sales and have that flow through to the bottom line. that's our number one priority for the business >> on international, some of the commentary from your peers has said u.s. might be getting tougher but europe is getting much tougher can you talk about how that dynamic is playing out and what

that might mean for the coming year >> we shared some exciting news from international we're outperforming at burger king international, which is our largest international business with 12,000 restaurants plus we're outperforming our peers on average for five quarters in a row. we're the leading brand in many markets. we've seen significant growth in markets like france and spain. our business post-covid got stronger we had six quarters of systemwide sales growth. some coming from improvements in digital drive-throughs and dine-in is coming back obviously, there are pressures in europe, commodity inputs as well as wage inflation especially on the energy fronts. and we continue to work with our franchisees in europe and allow them to avail themselves of the tools we use here in north america to continue to drive their improvements in their margins and their overall cash

flow they're building a lot of stores internationally. there's a ton of excitement for the bk brand and popeye's and soon firehouse inteshltly. we have strong momentum in terms of international growth and we expect to continue to see is that momentum in 2023 and beyond >> that's good color especially given crosswinds a difficult environment. appreciate your time as always thank you for taking the time. >> thanks, carl. as we head to break, another company out with results peloton posting a larger than expected quarterly loss. also issuing a weak holiday forecast those shares are down 5.5% right now. down 78% since the start of the year we're ckn o.ba itw

welcome back to qu"squawk on the street." pakistan's former prime minister enron khan has been shot in the leg. his aides call it an assassination attempt. khan's injuries are being described as minor but one of his supporters was killed and nine others wounded in the attack police say the gunman was immediately arrested no group has claim responsibility. president biden's speech calling for americans to stand against political violence and voter intimidation is drawing sharp criticism from top republicans. house minority leader mccarthy accusing biden of trying to divide americans senate minority leader mcconnell says biden is trying to deflect attention from crime and inflation. and in hattiesburg, mississippi, police are still looking for a gunman who killed two and injured three others

last night a 48-year-old man and a 57-year-old woman. and there were no winners in last night's powerball drawing saturday's drawing now has a 1.5 billion jackpot and that's only the third largest in u.s. lotto history. david, get those tickets >> i guess it's getting to a point where i might have to get on board. >> the odds are really in your favor. >> thank you let's check in on the markets. we're an hour into trading the s&p is off its lows. you can see we're still having effects -- after-effects of the powell press conference. during the course of that conference, the fed chair indicated, we're staying hawkish. joining us on set is evercore founder and senior chairman robert altman to talk about the fed and other things

it's good to have you in person. what you're hearing inside the boardroom. you advise many companies, general dialogue in terms of their challenges give us a sense to what kind of challe challenges are mounting for your corporate clients right now. >> it's a two-part message, david, from ceos on one side, most of them look upon current business conditions for them as okay on the other side, most of them are quite pessimistic about medium term, like 2023 you see that also in some surveys we all looked at that are publish of ceo attitudes and it's a very high percentage. almost 100% who company an authentic recession. so, okay at the moment some eakening, but okay at the moment and headed into a darker time >> we see companies, therefore,

decide to pull back on certain expenditures, perhaps advertising and move into our mode where they're reducing workforce. is that your expectation do you think that's going to actually worsen, so to speak, in the coming months? >> i think it's a very complicated dynamic on workforce levels because we're still in a period, especially have come through one, of relative shortage so for some employers, there is going to be a tendency to wait longer before you reduce your workforce because you just came through a period where it was hard to get people to come on board. i think there's a big debate among economists whether for the moment, and it won't last forever, but the structure of the labor market in that one sense is a little bit different and then people ask whether it's going to take longer in terms of tightening, monetary tightening,

for the labor market to soften because of this reluctance to shed workers i'm not sure if that's going to turn out to be a big phenomenon, but you do hear that. >> is that essentially what you think is driving the message we heard from chair powell yesterday, the idea of step down to 50 basis points come december this idea of maybe smaller hikes but to a higher rate and staying there for a longer time because of the resiliency of the labor market >> first of all, idon't think the fed has any alternative but to do whatever it takes. and if it's going to make a mistake, and nobody's perfect, to be sure it's on the too much side, not the too little side. this has been a tough year for the federal reserve in terms of having originally misjudged the stubbornness of inflation and later giving rise to pause or pitt and neither of those turned out to be correct. the fed has backed itself into a corner in terms of its own

credibility and i think it means they cannot afford and will not allow themselves to ease off too soon i wasn't surprised at all by powell's net message yesterday what i was surprised by was that markets didn't fully expect it number one, there's been no meaningful change in the basic inflation data you can point to frag men tear things but basic inflation data has not weaken pd. secondly there's been no meaningful change in labor market conditions unless the data the last 48 hours, adp jolt, et cetera, confirms that and the fed is particularly focused on labor markets and thirdly, as i said, the fed has no alternative but to make sure if it makes a mistake, it makes a mistake on the too much side i'm not sure why people thought it would be a different message from the fed

do you think that moment to the committee will be clear and convincing will come after several months of job loss where we see negative print after negative print >> powell, of course, has said carl -- i'll just pick one example. the ratio of job openings to employed workers, which is currently 2 to 1, has to get closer to 1 to 1 we're lightyears from that and the unemployment rate hasn't budged at 3.5% i think the answer is essentially yes, but people will argue how many weaker labor markets have to get. i think it will take, in the spirit of having to be sure they don't ease off too early, i think they're going to have to be sure they see very clear consistent labor market weakening, whether that's three months or five months or seven months i think it depends on the data itself

>> i realize those numbers have come down a little bit versus the unprecedent the levels we saw last year coming out of the pandemic, but we're still running a deficit. the cost to service that debt is rising and rising quickly. it's given rise to the intersection of monetary policy, fiscal policy, just overnight "the wall street journal" talking about fiscal theory of the price level, which sounds fun on television. but this idea that monetary and fiscal policy don't just interact, they're ultimately inextrickable and if fiscal policy i want to get your thoughts on that >> i think at this very moment, that's not correct monetary policy today is going to be able, if it's -- if it's tough enough, it can solve the inflation problem and bring us back as the futures market suggests within two years to a

very reasonable inflation rate like 2.5 i don't think fiscal policy this second is blocking the monetary policy's ability to do that. i think the real issue is the long-term, very poor fiscal outlook for this country and the size of cumulative des sits, as you see, the impact of higher interest rates, which will increase those deficits, that is the real problem i don't think that's the case today. the fed will get this job done without being interfered with with by fiscal policy. whether that would be the case five years or ten years from now, i think that's the question >> finally we like to end with you, at least i do, on m&a, your bread and butter we saw a couple of deals this week it's not dead yet but how would you characterize the market sfr mergers and acquisitions >> m&a volume, as you well know, is well done from last year.

last year was as hot as it gets. but the flow is decent and you just pointed out that even this last several days, you saw the johnson & johnson deal, the emmerstone black stone deal, and medium size deals. right now, you know, i would use the word decent to describe it if you believe we're going to have a hard landing, you may be pes missic half the world seems to think we're going to have a hard landing and some think we'll have a soft landing. ceos are pessimistic right now i would say conditions by medium and longer are historical, just that they're down from the very high levels of 2021 and late 2020. >> the completion rate may be

impacted getting something to the finish line is not easy in this environment. >> that's right. people are very busy if you are doing something that would be consummated through an ipo, you're in a tough position because the ipo market is more or less shut. >> roger, always a pleasure. thank you. >> thank you for having me. as we head to break, check out some other earnings movers etsy and ebay, both of those e-commerce plays are striking on strong earnings results. ebay is up almost 4% etsy is up 14% we're back in three with all the major averages lower the pursuit is on. the pursuit of outperformance at pgim. with deep expertise to outthink across multiple asset classes, actively managing investments in the world's public and private markets. outscale, with the resources to serve 1,500 clients

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walk to "squawk on the street." shares of kellogg are falling, despite a beat to the outlook. nonetheless, those shares are down 7%. joining us in cnbc first on kellogg chairman and ceo steve, it's great to have you back on the show we're scratching our heads a little bit because you put up a strong quarter and it seems pricing is resilient and more than offsetting inflation and the headwinds of higher costs. can that continue? >> morgan, great to be with you. yeah, the market's a tough grader today, i would say. you beat on every metric, raise guidance and the share underperforms. look, it's only one day, so we'll see.

we were very confidence in the rest of our youtlook. we're confident to drive productivity management to continue to enhance our margin opportunities, particularly going forward. we have a high degree of confidence that what we've done in the past is only the beginning beginning of what we'll continue to do in the future of course, keeping the consumer at the heart and soul of everything we do, and obviously, always looking at affordability. >> we talk about productivity, supply chain, this has been an issue. we talked to you about it for two years now. it continues you said on the call it persists but it doesn't seem to be getting any worse. is the expectation, what would you be watching for, i guess, to know that there's a turn, like a meaningful turn in terms of some of that gridlock and some of those shortages you have been navigating >> so morgan, like i said on the call, it stopped getting worse and there are not meaningful signs yet that it's getting

better the things that we'll be looking for is really a lot of our inbound ingredients, packaging, things we get from our supplier, coming in on a more normalized basis with less surprises. that allows us to put the right factory plans in place so we can run our plants, our bakeries and so forth in a much more efficient fashion. there's not, again, signs yet, but when we talk to our suppliers, i do sense a growing confidence that as we get into next year, a lot of the things we have been dealing with will start to mitigate. we have all gotten better at operating during times of great uncertainty. but the types of challenges that we see in terms of inbound shipments of ingredients continue to persist. >> so steve, when do you think end pricing gets more competitive? times was pretty hard on food companies yesterday, arguing it's really margins, about margin protection now, that input costs have come down and they're trying to keep end pricing as strong as possible to

elevate margins as long as it will go. >> carl, so if you look at our results this quarter, we didn't see margin expansion what that means is we have done our best to cover our costs as best as we can this is clearly by no means windfall profits for food companies and not for us we're looking to protect our margins going forward. in a double digit inflationary environment, there's nothing you can do on a productivity front that's going to cover that, so it's going to continue to be price. when woe look at next year, there's no mitigation to price pricing continues at a double-digit rate. if you look at the spot markets, sure, they're down from their highs, but year over year, they're significantly elevated >> steve, are you surprised, then, at consumers' willingness to pay the prices still. are you concerned at some point there's a price that's a bit too far and you see them trade down to lower price brands? >> david, we're looking at that

on a daily basis household budgets are based on absolute dollars available and what we're seeing is a lot of the discretionary spend is being challenged a lot of travel, entertainment, dining out, and so forth we haven't seen it in our categories yet we haven't seen any empirical evidence that private label shares are growing we're mindful, because we care about our consumers. we don't want to be unaffordable we look at it like i said on a daily basis. but right now, it's just an environment where double-digit inflation is raging with no sign of mitigation at the moment. >> so in light of that, given the fact you are the ceo of a packaged foods company, kroger's pro proposed acquisition of albertson's, your thoughts on it >> we have great relationships with both kroger and albertson and look forward to working with them when they become one

company. but like i said, we have a terrific relationship with each of those customers and we'll continue to work on joint value creation opportunities with both of them. next month, next year, and into the future >> okay. and then finally, we started this conversation, you were talking about productivity and the investments you're making there. what does that look like i ask that on a day where we got another productivity read in terms of macro data where we're basically seeing signs that's declining here in the u.s. economy on a macro level how are you, i guess, investing for that, how are you navigating that >> we're investing quite a lot in automation. one of the things that happened in the united states and around the world is the labor shortage is real. and it seems to be persistent as well so we're looking at every opportunity where we can continue to automate, and that doesn't mean job reductions. it just means getting more productive through automation in

our plants, in our distribution facilities really throughout our operations >> steve, appreciate your time thanks for joining us. >> thanks for having me. >>coming up this morning on "tech check," the faang plus index hitting the lowest level since july of 2020 we'll have a lot more on how to play the mega caps after the recent rate hikes we're joined on earnings. equinix. "tech check" at the top of the hour

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and up to $750 off. stocks on pace for their fourth straight day of losses but we're paring the losses here with the dow down now less than 90 points. let's bring in bob pisani for more >> the important thing is we were 40 points lower just a short while ago and we have come back from unlikely sources here. industrials, take a look at sectors moving semi-conductors still weak industrials have come back, energy stocks have come back and even ark innovation, which good indicator of risk on risk off is up 2 percentage points.

one thing you notice is these pandemic darlings sort of split today. for example, etsy had good numbers. they were above estimates. ebay had good numbers. the third quarter was above consensus. fourth quarter guidance was good peloton, revenue below consensus, guidance weak roku had weak guidance and they talked about the macro environment pressuring the consumer if you look at these individuals out there, some of these people that have been, these consumer darlings in the last year or so, notably weaker right now take a look at some of the numbers. peloton down 92%, roku, 86%. from the 52-week highs you can go all the way down the list, look at zoom video, etsy, netflix, chewy, crowdstrike. you can see them all down very big here finally, one of note, a lot of people talking about retests of the lows the nasdaq is only 3% from a 52-week low, so that's not a

very big call. s&p 500 is 5% to 6% above the recent highs -- lows we saw. david, back to you >> thank you, bob. yeah, not far from them, as you say. though again for today's session at least, off those lows as well make sure to join us tomorrow on "squawk on the street. we'll have richmond fed president tom barkin with us that does it for us. "tech check" starts now. >> good thursday morning welcome to "tech check." i'm carl, with jon fortt and deirdre bosa today, the fed raising rates for a sixth time and no signsthey're stopping any time soon. what that means for the mega caps later on this hour. plus, more on the consumer as names from qualcomm to peloton slump on disappearing demand, and a look at the key tech names poised to benefit or take a hit as rates go higher along with some of today's big movers there are plenty of them >> plenty. we'll kick it off with a look at big tech the faang plus index losing all of its gains since july on t