rational or not, certainly a good amount driven by what we call the quantitatively driven funds that have an algorithm working of late as rates come down particularly plunging on the ten year for example they buy the market. that is resulting in some unusually significant gains. that's it for us on "squawk on the street." "techcheck" starts now good thursday morning. today's cpi obviously sending the markets surnging the cooler than expected data giving a big boost to growth stocks the nasdaq having the best day since april, 2020 the wcld computing on pace for the best day ever. big tech gets a boost as well, apple, alphabet, microsoft all surging with amazon. which is up more than 13%. it is important to keep it all in perspective we'll break out individual names

in a moment. if we zoom out, the wcld and first trust internet etf flat over the last month, chips and software with a bit more of a sustained rally. pretty remarkable. the words baby steps, john, have been used in the fed's long term goal of getting us back to 2. >> so much guessing on what the fed actually wants and is trying to do happening here and it's important i think for us to stay focused on the context. we gave viewers a little bit right there. amazon is up i think around 13% right now 9% for the week. but look at what these individual stocks and what some of these areas have done not only over the past day or week but over the past month. over the past quarter. what were earnings like? now i think the next catalyst perhaps is how the holiday season starts with just a couple of weeks away from thanksgiving, from black friday, from cyber monday there's the expectation that

consumer spending isn't necessarily going to be what it's been in past years. that has all kinds of impacts not just on, hey, what is the fed going to do? they've already given a target they're heading toward, but also overall just toward employment the economy in general and the money that companies have the opportunity to make or not >> huge moves we're seeing today, kind of in contrast to what we've been talking about and the idea q3 may not be the tough quarter. it may be q4 the holiday season. we've heard from amazon and others that demand activity has sharply slowed in the middle of q3 what lies ahead? i mean looking at amazon, this is just an incredible move up nearly 14%. nearly bringing it back to the $1 trillion mark some headlines this morning helping that stock on top of the cpi print. the journal reports that amazon has launched a cost cutting review focused on unprofitable

business units even devices could be on the table here we know how committed amazon has been to its devices even at a loss bringing alexa is a big piece of that into the homes, into every day life. so the big tech companies, they are implementing all of these cost cutting measures which is what investors have wanted to see. then you get a cpi print on top of that resulting in these huge moves today. >> they point out, telling some employees, john, in certain unprofitable divisions, to look for jobs elsewhere in the company. we know it has happened at meta in terms of their reduction force. we know what for example alphabet has said overall trying to get more efficient, to do as much with less. >> we have to be careful about unprofitable when it comes to amazon very often e-commerce in general is unprofitable but that doesn't mean they're shutting it down as well as the delivery business. don't think it necessarily means that everything amazon does is on the table

they are very strategic, you know, the aws business didn't start out sort of printing profits the way it does now. it took a while to grow that over time. i wouldn't expect them to lose their, all of their long term focus. >> all right for more on what the cpi print might mean for tech and trading at large let's bring in cnbc contributor "wall street journal" market writer, good to see you again. what a morning between equities and what is happening in yields. i wonder how you think about the price action today and how much is due to the data itself or some of the evolving fed speak we've gotten over say the last 48 hours >> what a morning. i mean, we are seeing the best day for the nasdaq composite since april 2020, which is just wild when you think about what was happening back then. the economy was shutting down. we were at the onset of the pandemic and here we are two years later and we're seeing that type of

volatility again it is really the return of the long duration trade that we're seeing, the faang stocks, obviously the move in amazon with the yields lower. i would like to zoom out and point out we have seen some pretty big rallies throughout the year in tech, in these long duration trades. and they've proven to be short lived, right they quickly fizzled as we saw over the summer. every time investors have filed into tech, into growth, hoping for some sort of fed pivot their hopes have been quashed and those trades have ended up fizzling so this is a key trade to watch. you know, is it different this time >> yeah. the journal did a pretty nice job last month of actually predicting how health insurance inflation and maybe even medical care, the shifts in methodology would end up helping to keep overall inflation capped that is exactly what happened.

as we sometimes say in earnings, is there hair on this print or not? >> well, i think -- i keep thinking of fed chair powell's remarks months ago when he said this is not a time for nuanced readings of inflation. they want to see a sustained decrease so far this is one print and i think a lot of what is driving today is that people, you know, have gotten so bearish on tech and at the same time you have people who continue to buy the dip in tech and still hold on to that trade i had one investor say recently, there are investors who haven't really seen the type of high yield environment we're in right now in their couriers the past ten or 15 years. they don't know a playbook for this environment that is what makes reading inflation, figuring out how to position in tech so challenging right now. >> yes, some of the most unprofitable trades or the most bearish trades in tech are surging today. you have data dog, work day,

peloton, zoom leading the nasdaq in the nasdaq 100 but the fundamentals haven't changed here right you just talked about interest rates. they'll continue to rise at least for a bit. nothing has changed here but do you think these valuations are starting to look attractive? they've been beaten down too much >> that's the fascinating thing. when i talk to some investors i'm like hey is it a good time to step in and buy tech? what i've been hearing from a lot recently is no they're saying just because a stock is down 60%, 70%, doesn't mean it is under valued. take a look at valuations on the nasdaq 100 index for example home to a lot of big tech stocks that is trading around levels seen in 2019 however, the ten-year treasury yield is still well above levels seen in 2019 so i have investors saying, look something has to give, right how can yields be so much higher right now that valuations are at the same level when the rate has

changed dramatically to some that means the sell-off will continue and valuations have to come down further. >> what are you hearing about the relationship between cryptocurrencies and the broader market in particular it seemed like there was some potential, at least fear of contagion within the crypto ecosystem from ftx token. the issues with ftx seem to be bringing down bitcoin and it was way down i think around $2.80 or so right before the cpi print. then along with other risk assets including some of the growth stocks we've mentioned, crypto popped along with bitcoin and even ftx token is up at $3.61 when we know the state of that company is it the potential that what's happening in the crypto market bleeds over into the broader market >> i think that's certainly a

fear out there i think it is too soon to tell what exactly that contagion is because this liquidity crunch happened this week but clearly yesterday with the sell-off that we saw there are worries that it is going to trickle into the broader market. and i think it is all very sentiment driven i can't help but think the move in cryptocurrencies, growth stocks, tech stocks, yields are all kind of moving in the same direction. it's almost like a reflexive reaction to the cpi print where as you mentioned people are piling into the pandemic trades. what were those pandemic trades? it was the arc innovation etf. it was tech. it was cryptocurrencies. it was betting on treasury prices to keep rising and for yields to keep falling we're seeing that all move in one direction and i think that is happening today it's incredibly reflexive. >> indeed. even as we didn't really mention geo politics but the wires now saying the white house says the president and president xi will

meet in bali on the 14th could be material. appreciate it. very important market day. thank you. >> thank you we mentioned a the top of the show the wcld cloud computing etf having its best day offer. we're looking under the hood at some of the individual names leading that surge frank? >> the wcld having the best day ever since inception in 2019 the decline in interest rates obviously a big factor in that at one point a few days ago we saw the ten-year yield at over 4.2% and now it is 3.8% giving a big boost to these stocks and also seeing the clou and the skyy also having a big move. so really what we want to look at is the factor creating this was the decline in interest rate which gives a boost to the high risk stocks, some not profitable quite yet. look at the chart. this shows you the dynamic every time you see the yield on the ten year drop you see the wcld and other cloud etfs have a

big pop. the inverse relationship well demonstrated here and talking about names that really benefit like snowflake, with a valuation over 500 times forward earnings. datadog a stock we mentioned many times feels a lot of rate pressure crowdstrike is another example you see right there. shares up more than 9% right now. when it comes to legacy tech names talking about cisco, ibm not with the big boost because they don't have the same pressure sap actually reports a euro so sees a benefit from the stronge dollar not from the interest rate hikes but definitely the stronger dollar. that also core related are interest rate hikes the stronger dollar something to watch today if the stocks continue to rally as interest rates fall off the cpi report something to watch going forward for the stocks where we've seen some fall on earnings and others have pretty positive earnings but again, interest rates on the ten-year,

the yield right there one of the major factor for these stocks going forward. back over to you. >> thank you we'll stick with the market rally and bring in the satori fund founder dan niles who has been bearish, skeptical of kind of the hopes for a sustained rally but you did predict throughout q4 there would be these little pops post earnings and that is exactly what has happened what does the cpi print bring to the table in terms of new information? what do you expect from here >> well, if you remember, you had me on the cpi print a month ago. and you had much stronger than expected cpi the market was getting crushed in the warning i said i think october will finish up and we'll get a rally through year end so going into this, which is obviously what happened, going into this cpi print i sort of have the same view of, well, if

it could go up 2.6% off a really horrible one, if you get something that looks a little bit better and the nice thing yesterday was you got the whole btx. they're not going to get bailed out. the market was only down about 30 or 40 in the morning because obviously the republicans did not quite as well as people thought but, still, you got a split government which is great for the opportunity for a stock rally. but the btx situation obviously, sorry, ftx situation obviously really helped, you know, drive the market to new lows which gave you a really great set up into the cpi print today so for us we're having one of the best days of the year. we're up the most we've been for the year with today, the market right now. and we think it is going to continue. >> how influential do you think the ftx situation and crypto movement in general are on the broader market you seem to suggest that you think it has an influence. >> it had a huge influence if you think about it, john, you

know, as i said, the market was only down about 30 or 40 bips in the morning before that ftx situation really got rolling then you have to worry about something much bigger. they talked about $8 billion cash hold so the thought in the back of my mind and i have to admit i was thinking about it, do i really want to get that much longer under the cpi print because what if tomorrow morning we have another firm come out? let's face it. there are a lot of hedge funds down 50% plus for the year so could you have a long term capital management type of situation, which your viewers don't remember this is back in 1998 when we had the whole russian bond default situation, etcetera, and you had to have the world's biggest banks come to the rescue to save the financial markets and obviously people probably remember lehman brothers that is sort of sitting in the back of my mind. by the way, that is still a tail risk between now and the end of the year

on the positive side for tail risk, though, i saw that statement from china saying they don't condone the use of nuclear weapons or something along that line, i'm like, ah ha. so their relationship with russia does have limits. they're telling the russians they don't want this to kind of continue and zelenskyy sounded better about a potential truce let's call it. that is an upside tail risk. for us we're still playing this for a rally until at least sort of december 13th next cpi print. this could be a huge one you have to remember the biggest bear market rallies happen toward the end of bear markets if you go back to volker you had one 11% rally in the s&p and one 12% rally in the s&p before it went to its ultimate lows. that was toward the end. so we're pretty bullish between now and at least december 13th you got to play it day by day but that is how we're looking at it. >> from now till the next cpi report in the long term though i think you are saying you are still

bullish. do you still have the 3,000 price target on the s&p? what spoils this party is it that december number or is it something else? bigger macro event or some kind of failure in the financial system as you've sort of been talking about? >> let's step back from this for a second the cpi is still closer to 8% than 7%. this is still a horrific number. and the fed has just put in a tremendous amount of rate hikes. you'll get another 50 in december you'll get another 25 probably in march and so you need to go back and look at what happened in the 1970s and early '80s where you'll get these bear market rallies. it happens all the time. the fed needs to get inflation back down to the 2% level. we are nowhere near that what you're going to see is that the economy continuing to slow down i think the december quarter is when things will get really ugly in terms of guides for next year right now if you think back to the end of q2, everybody is like

oh, you got to own amazon, got to own google, you got to own apple. you got to own all these big cap tech names you think about what happened in october, the s&p was up 8% and apple, microsoft, google, facebook, and amazon were down 6% i think through yesterday down something like 5% or the day before yesterday down 5% and the market was down 1% before the massive sell-off so people are starting to figure out, yeah. these big tech giants are not immune they also have much higher market valuations than the market and the market overall also has a very high premium relative to history in the sense it is trading at a 19 times trailing pe and when you have cpi over 3%, the trailing pe is 15 times we're clearly well above 3%. so from a longer term view, yeah i fully believe the 3,000 is still in play but in the near term i don't care if this is the

bottom or a bottom because i treat them the same. i have less than 10% of the portfolio short. we are very long we're having a great day as i said if it turns out by some miracle you get, you know, everything going right and inflation drops a ton, maybe this is the real thing, but there is still a big gap between close to 8% cpi and 2% where the fed wants it. and, now, all those rate hikes are finally starting to affect corporations the biggest ones and that's what you need to think about fundamentally versus, yes. i'm getting a big rally and everything that was down the most yesterday you know, you need to figure out is this a real bottom or, you know, just a bear market rally >> yeah. okay dan niles, we know where you stand and of course we continue to watch it with huge gains on the major indices today. >> thank you let's turn to crypto now

great to have you. the headlines keep coming. the latest is sbf may be looking to fund raise. you've reported there could be an $8 billion hole to fill who? how could that ever happen >> that is the question. there is still a lot of this unfolding. i was talking to some sources close to the due diligence process with finance and have seen the balance sheet they told me it is at least an $8 billion hole and could go significantly larger they also said there is nobody in the industry that can fill this gap at this point that either wants to take on that risk and legal risk and has that amount of money. the other thing i was hearing overnight and two sources told me the doej is now investigating ftx saying two things, misappropriating customer funds and then misleading investors having to do with its relationship with alameda. we did get some tweets we haven't heard from him since earlier this week. he said there are a number of players that are looking here. they're in potential deal talks.

we'll see if that ends up happening. like you said, huge, huge burden to take on here. also winding down alameda research and the journal reporting he told investors he owes ftx about $10 billion and citing people familiar with the matter we talked to him about this in the bahamas and asked him about that relationship. i think we have the sound if you want to play that. here is what he said what about the relationship between ftx and alameda? i think there are some questions on where the lines are. >> yep. >> are there any potential conflicts of interest running as many companies as you do in the same space >> yeah. i put a lot of work over the last few years into trying to eliminate conflicts of interest there. you know, one big thing of this is i don't work for it none of ftx does separate staffs. the way we view ftx is as a neutral piece of market

infrastructure >> that is really a remarkable sound bite you asked him directly and he is trying to eliminate those conflicts of interest but this is all happening because of the ftx coin on the balance she had of alameda. >> the idea, like he said this was a neutral piece of market infrastructure and that was his argument for why he was able to avoid the same issues voyager and celsius ran into the companies he was potentially bailing out at that point. an exchange should not have this amount of debt the way he explained it made sense to a lot of people they said you're a middle man and shouldn't this type of lending and he said that is why we were able to avoid the blow ups. >> a lot of people went on his word and these are private companies not located in the u.s. >> he was the poster child also for consumer protection. >> kate rooney, thanks for bringing us the latest here to help us break down the fallout is the leader of the american arm of the world's longest standing crypto exchange thanks for being with us

i'll start with the same question i asked the ceo of another exchange yesterday how can you assure your own investors and customers that you haven't leveraged their money or their reserves short of publishing your balance sheet? >> great question. at bit stamp you mentioned the longest running crypto exchange. we've made this topic specifically regulatory compliance and the safety and security of our customer assets the center of our company. so we absolutely segregate customer accounts. we absolutely never repurpose or use customer funds for anything. we're not affiliated or operating any trading operations or other investment schemes. we're on the other side of that ledger completely. now, in terms of proving that, we are working on several things we had a proof of reserves process in play or in operation for a while that we hope to be able to release soon because the public and specifically crypto investors

need to have that visibility and transparency >> bobby, when can you release that it feels to me like this is really a show me moment, not a tell me moment a lot of the things you are saying is what we've heard from other crypto exchanges, sand bankman-fried had similarities to what you're saying as well and was talking to regulators. what can you do beyond that? i know you are the ceo of the u.s. business but what the last few days have shown us is what happens internationally can affect what is happening here even if there is more regulation >> yes, absolutely so one of the things that is unique about our infrastructure and our approach to customer safety is we do not custody our clients' assets. we work with a separate entity, which we think builds in risk management we work with a qualified, fully licensed custodian, and i think we can work with them to provide some additional transparency in the near term while our proof of reserves process is under way

with our auditor one of the other things that, you know, we took for granted but i think is not normal practice in the crypto space is we've been audited by a big 4 accounting firm for four years running. on an annual basis we're actually work k with them around our proof of reserves and that is where the time factor comes in. >> your u.s. reserves are audited by big 4 accounting firm what about your international reserves >> our global company is audited on a financial basis by a big 4 accounting firm including the u.s. >> do you think then bobby that tokens need to be regulated as securities as fits into the conversation and ongoing conversation we've had about stable coins as well you bring up auditing. they are still not audited what kind of risk does that bring into the market and do you feel comfortable having all of these tokens on your platform when the past few days have shown ftt, the ftx token, was

not properly backed? >> yeah. i feel absolutely comfortable that cryptocurrencies can be custody id safely and securely such as the manner that bitstamp does it. i think the nature of cryptocurrencies and whether they qualify as securities is an entirely separate question what we had with this ftx situation is i hate to say it but a bad actor, right somebody who was using customer funds without letting customers know to do things and to work with other affiliated entities and presumably operate in the markets. it is very, very risky and very dishonest. i don't think that means cryptocurrency should be secured as securities for instance i think that is a separate question. >> bobby, i am really -- good morning by the way it's john. >> hi, john. >> i'm skeptical of the sort of selling, marketing of cryptocurrencies as assets

anyway the technology idea behind crypto is one thing. the block chain. that's great i get the technology argument behind it but the idea people are buying these expecting them to go up, i'm not sure what the value and rationality of that is it seems like there are a number of exchanges that are incentivized to have people trade these things because that's how revenue comes about >> yes, i mean, from an exchange perspective, our view is to operate and enable people who want to buy and people who want to sell to interact and to do it safely and securely and rapidly and efficiently. it is not really our role as an exchange to opine about which cryptocurrency is worthy of investment or not apart from the fact that at bitstamp we have a very vigorous process around

what we decide to list i will agree from an exchange standpoint, and we've been at this for 11 years and have seen a lot of market dynamics come and go when exchanges start naming stadiums, you know, focusing on celebrity endorsements, and super bowl ads and these types of things, as somebody who's been in the space that makes me uncomfortable. it really does to me, that signals they're not doing what we do which is focusing on the customer experience and making sure that it is safe and secure for the next day and the next week and the next month >> it may also mean they are more profitable and that is because of the international business they are able to do those things but your point is taken, some of the flashiness we've seen over the past few years thanks for being with us. >> thank you. a gut check on meta back to 109 highest levels of the month so far julia boorstin has that for us. >> that's right. meta shares are up over 7%

today. now they're up over 20% in the past week on the heels of meta's first mass lay-offs. meta employee laid off yesterday provided this video to nbc news. >> i'm the founder and ceo -- >> i was wrong >> i'm responsible for the health of our company for our direction and for deciding how we execute that including things like this. and this was ultimately my call. it was one of the hardest calls that i've had to make in the 18 years of running the company >> an out perform rating on the stock, saying yesterday's announcement they were slashin 13% of the company's employees, quote, is a clear affirmation that this is a rational company led by a ceo who cares about his share price and what investors think of his leadership skills saying that the slowing down and core cash operating expenses should stabilize the recent collapse of family of apps

margins and cash flows other social stocks also surging today. snap up 4.5% sorry. snap up 5.5% pinterest up nearly 7% other ad supported players are moving higher. spotify shares up nearly 9%. alphabet shares up about 7%. also, take a look at shares of bumble that stock rebounding after initially falling last night, falling a weaker than expected earnings report up about 7% while match group shares are up over 12% john >> it's happening fast today, julia. thanks now a news update from bertha coombs >> hi, john. here's what's happening. two days after millions of voters cast their ballots in the midterm elections and control of congress remains undecided nbc news projects the gop will regain control of the house from democrats, while the senate hinges on a few tight races in arizona, nevada, and georgia

president biden will meet with chinese president xi in person at the g20 summit in bali next week. the highly anticipated meeting will be the first time biden is face to face with xi since taking office. meantime the russian president vladimir putin will not attend the summit preventing the chance for him and biden to meet for the first time since russia invaded ukraine in february hurricane nicole making land fall in florida's atlantic coast last night causing widespread power outages and potentially life threatening storm surges. the rare november hurricane weakened into a tropical storm as it made its way over east central florida, bringing continued strong winds and heavy rains. hurricane season doesn't end until december 1st, carl it is rare to see something like this in november >> water is still warm thank you. bertha coombs. we are a couple hours into trading this morning with markets getting a massive boost from this morning's cooler than expected cpi print

let's bring in cnbc's senior markets commentator mike santoli to talk about the price action it is interesting. after the print there's plenty of opportunity for fed officials to come in and pour cold water hasn't had much effect. >> not yet i think it would only happen in a scheduled way. it does fit into the general scheme of, look. we've done a lot of tightening we're waiting for data to follow along because it lags. just the size of the moves outside of stocks are worth observing. the 2% drop in the u.s. dollar index, massive declines in treasury yields across the curve. it shows you that this is a massive tension release type move people bracing for yet another upside surprise in cpi almost every single cpi report of the last 12 months has been an upside surprise that is why i think you have the magnitude of the move and the set up with the declines yesterday. and the real extreme action happening in the most beaten down, heavily shorted parts of the market, the disruptive tech

baskets going down for the better part of two years at this point. >> right dollar point is a great one. we were at 114 on the dxy. 108 today. vix has gone from the mid 30s at the worst of it to the low 20s now. >> yes it hasn't been one of those really steep drops where you had a perfect spike on the chart what you had is a grudging one people realizing the market was not buckling and making new lows staying in a range but, still we had the cpi number or the fed meeting. there was always something that was going to create another hazard and of course the lows for the vix this year occurred generally like 19, 20, in that range maybe there is more down side. i think it is much more just telling you what we're seeing on other screens as well. it is not really predictive at these levels then you have the tech piece of it, which is the extreme under performance of the nasdaq 100 relative to something like the dow on a year-to-date basis. and tech versus energy or something like that. so i think that is why you get these real quick silver

rotations into the stuff that has lagged so badly. >> don't go far. for more on the market rally let's bring in our guest as we have a thousand-point gain on the dow. welcome back and good to see you. >> thank you >> during the dark days of october and maybe even earlier this month your advice was to stay invested. does that hold given some of these opportunities today do you make some decisions based on that >> yes, carl thank you for having me. i think the inflation data today was very significant as mike pointed out we've had a series of upside surprises so it is nice to get a down side surprise i think that this helps to confirm one leg of the fed fund's puzzle if you will. there is the pace. there is the level that we're going toment then there's how long we're staying there i think this confirms what we heard from the fed last week, that the pace is likely to slow. what we still don't know is

where the peak fed funds rate lies and how long the fed is going to stay there typically if you're talking about softening growth you'd expect rate cuts we're starting to see that getting priced back into the market i don't think the fed is really going to want to see that. they've really tried to, despite over communicating, they've tried to pull back on some of the forward guidance, which doesn't really have a great place in today's uncertain environment. i don't think we'll get a lot of encouragement one way or the other. but it is definitely fueling a balance into some of the over sold parts of the market. >> a thousand-point move on the dow, it is really 3% higher which is significant and then 6% upward move on the nasdaq i have a hard time remembering the last time we saw that though the day is not over. how much of this do you think is because of new information how much of this is a snap of the rubber band based on what we've seen happen in the days

prior? >> i think it is both. in terms of the snap of the rubber band as you put it, we know that the growth year parts of the market are very over sold they are looking attractive on a valuation basis relative to their own valuations and relative to other parts of the market and we know investors have been very defensively positioned holding a lot of cash, being under weight to these beaten up parts of the market. so to see some reassurance i think rates is a huge part of this driving the market today to see rates come down and the ten-year back below 4% you're seeing that rubber band snap back but at the end of the day it still comes down to the growth dynamic and if we're looking into 2023 we still think growth is likely to slow significantly. actually revised our base case to expect a mild recession in 2023 i think you have to be focusing on parts of the market that can generate growth as well as keeping an eye on valuations because i don't see rates coming

in significantly from here to fuel much more of a rally in those very highly valued parts of the market. >> right fitting into what you were talking about, the three pieces of the puzzle it feels like the two most important parts, the level funds are going to and how long they'll stay still remains unclear or at least unchanged. what do you recommend to the retail investor right now thinking about getting in now or selling on this pop? >> we have had a neutral allocation to equities versus our strategic benchmark favoring the u.s. over international and i think days like today despite some of the weakness in the market and how much pain we'd experienced so far this year, days like today are a reminder of why you have to be invested the market is going to move very quickly on positive data and probably going to sniff out an improvement in the trend of inflation as well as the economy, well before the market does and even if you do expect a

recession in 2023, if it is the first half of the year story we could very well see the market bottom and start to show some real momentum in the early days of the year or even the back half of this year. so we're staying patient through volatility but staying invested. we do have a little extra cash that we are being patient on and looking to put to work i don't know if today is the day to do it if we do get some further evidence on the real time, more fast moving data that inflation is starting to slow it could be a real opportunity to move to an overweight on rest. >> interesting finally on crypto, there's two basic schools of thought one is that it is the lines between the crypto system and the legacy financial system are much thinner than they were in prior crises and so there's some separation there. but there's also the prospect of would be margin calls and what jpmorgan calls a cascading event that could lead to certainly lower prices in crypto and maybe vulnerability for equities what do you think?

>> well, you don't know what skeltons are in the closet until you open it up and turn on the light. i think it is definitely possible there's more vulnerability and more risk underneath the surface than we realize. but i don't think we're seeing signs of evidence yet that there's broader contagion. certainly some linkages and higher correlations between crypto and some of those growth year, more highly valued parts of the market. but i think that is probably just because those investors tend to move in the same circles. so there's maybe some pessimism and risk taking moving off the table there. but for now, we don't see broader contagion risk in the crypto space but of course tightening financial conditions, removing liquidity, you tend to see some of these fractures in the surface. >> right that's why we're paying so much attention to it despite its relative size to the equity market as always, thanks so much and good to see you. >> thank you, carl speaking of that potential

risk canary in the coal mine, let's talk about ftx and more. some of the biggest names in crypto weighing in this morning. galaxy digital's ceo pulling no punches talking about sam bankman-fried with "squawk box" earlier. >> unbelievably frustrating we basicallyhave a situation that looks like theranos. looking back there are always red flags. oh, i kept asking myself where is he getting all this dammed money? excuse the cursing i'm angry. where is he getting all this money to be buying these things? >> he pointed out he has millions of dollars tied up there. we also heard from micro strategy executive chairman michael saylor offering his take on what this means for regulating crypto moving forward. >> i think the industry needs to grow up. and the regulators are coming into this space. what the world wants is it wants

digital assets and digital commodities and digital securities but there's no way to register a digital security. there is no clearer guideline or road map for designating a digital commodity. the world wants a trillion dollars of digital currency in the form of the usd stable coin. and so i think that the regulatory intervention of late has been all negative like enforcement but the market place is waiting for the regulators to say, this is how you register a digital currency >> remember, he is bit coin, bitcoin, all bitcoin this is not shaking him off of his bull case. he says bitcoin needs a way out of its, quote, dysfunctional relationship with the broader crypto landscape i think now we look ahead to the next milestone for what happens to risk. i don't wln tknow whether that e

holiday numbers, initial numbers, whether they're weaker or stronger than expected, what it means for inventory overhangs. i keep going back to inventory for much of the year i think it is a big issue. the market response today, it is giving some breathing room for those who like risk. >> it is a wild market day the nasdaq 100 up 6% you know, even the crypto landscape is doing well today. ignoring what's been happening over the last few days i think, you know, everyone that seems to come on air is talking to us still about regulation i understand that. the u.s. is arguably more regulated than other places. but that is sort of why this is happening. you can't make a lot of profit here in the united states if you're a crypto exchange you have to go internationally there's not enough regulation internationally to make sure those aren't comingled, that they're not leveraging their balance sheet over there so it is kind of lose-lose where does the u.s. end up in here gary gentzler this morning the s.e.c. chair, he didn't say a lot because i just wonder if there is not a lot he can do

ftx u.s. wasn't part of this but is going to be impacted. >> that is a great point especially when you have entities that have basically gone regulation shopping around the world for the better part after year and maybe it is not so much that the s.e.c. can't do anything at all but certainly it is very difficult to do things in a hurry. >> yep speaking of the next domino perhaps watching stable coins very closely you saw tether wobble a little bit but largely keeping its peg. there have always been questions about those reserves which are nod audited and not super transparent. meanwhile gaming names are trading up this morning. take a look. our own steve kovac is here with the latest >> these gaming names coming off a really tough earnings season but they're green today with so much of the other market let's talk about what we're seeing electronic arts up nearly 3% after reporting earnings last week activision up 2% this is a big move mostly trades on the microsoft acquisition which is not

expected to be finished until june of next year and also breaking sales records with th new call of duty game over 1 billion in sales so far. that is a hot game take-two interactive up 4% after the big drop tuesday following its earnings and revising guidance down for the rest of the fiscal year. due in large part to a weakness in mobile gaming roblox a similar story up 6% after missing earnings expectations a couple days ago and showing a fall in user spending within the game now, over all, what we're hearing about gaming, the gaming industry out of these earnings they're lapping the really tough comps they experienced during the covid lockdowns and all that growth during the two or three-year period but they are above where they were pre-covid so gaming behavior is kind of normalizing now post covid lockdowns. john, over to you. >> all right steve, thank you another stock surging in today's rally, unity software. higher buy let's see. i don't want to -- 28.5% after

reporting third quarter results. also completing its merger with iron source earlier this week. joining us now an exclusive interview with unity software's ceo. i want to get into the quarter and especially what happens with the app ecosystem going from here but before that i want to give you a chance to respond to the bloomberg article that is out focusing on you including on your relationship with a former head of hr some investors might have questions about the way you're managing the company what is the kind of discipline that you intend to bring to the company from here compared to how you've done it in the past >> well look i think there is really strong discipline in the company and always has been. the article is really false and misleading and i really wouldn't want to comment on it because it is really not worth it i would say, though, comments like culture and discipline, we've been doing very important

work around surveying our employees, with anonymous surveys, to understand how people think about the culture the numbers are top tier top 10%. it is a really strong culture. people trust in the culture. one of the values we talk a lot about is in it together. people use that expression to describe how strong we are as a team again, it is hard to comment on something false and misleading and what i'd really love to spend more time talking about is we just reported a quarter where our create business was up 54% we are dealing with some head winds in the advertising business, everybody is right now, but we have a really strong set up for growth in the future. >> it is also what i wanted to talk to you about especially since the iron source merger in acquisition is complete now. to what degree does the slowing consumer spending affect not just the advertising environment but also the demand for the kinds of tools and data insights that you're offering through there? does it intensify the need for

those tools? and thus is it a tail wind for you? or is the overall slowdown in spending in that area going to be a head wind >> steve commented a moment ago on your show it is a really interesting time to compare gaming centric stocks to a year ago when covid had things lifted so high. at least for us 54% growth on create, part of that is mra driven but 30% organic that is really strong. we aren't seeing any flagging there. i can't say anything is permanently economy resistant but things are gang busters in gaming and beyond. if i look at the ads sides of business there is no question that at this moment in time there is some conservativism on ad buyers. they're looking at quicker payback periods, spending less none of these things last forever. i think it is a little bit of a slowdown here is the point. the merger with iron schwartz gives us really the only

end-to-end platform for the kinds of things that will help a developer make better game and application and monetize it better and for that we're really saving the money and building the revenue. so reticence to save money and build revenue is something no one said ever. so i feel really confident looking forward. >> speaking of what's good or not good for developers i want your take on a deal in the gaming space getting a lot of scrutiny that is microsoft activision would that be good for developers and competition in your opinion >> i think first off some of the intellectual property acti vision, call to duty or some of the most incredible intellectual properties, it is an incredible portfolio. one thing that's been true about gaming i've been listening for 25 years now. there's always another big acquisition and what happens right after that is the next great company comes from nowhere, you know, great

franchises i could give roblox credit for that years past people like super cell i can remember when early days of take two looked like a one franchise company and look at the incredible success they've had around their basketball franchise. there's always the next rising star company in the gaming industry i don't think that is going to stop >> john, are you benefiting from what i'll call early metaverse spend? mark zuckerberg is spending a lot of money trying to create this market that is a ways off is this the equivalent of china building these cities nobody is living in? there is money clearly that would be going into construction equipment and paying laborers and what not but not necessarily the pay-off on the other end and eventually the spending has to drop off i wonder if there is any of that perhaps shorter term revenue that might not turn into continuing revenue that is going into unity or others

>> that is a great question. i have to tell you the hype cycle around theword metaverse is one of those things that gets me to roll my eyes sometimes to the point they're practically in the back of my head. there is a lot of hyperbole around there when we think about that world we are thinking about the next version of the internet where it is real time, 3d, and within unity we describe that as digital twins, real time digital twins. i remember when we went public about two years ago we said within five years that business would be half. it is already 40%. and so it has gone gang busters. what this is about, like orlando, wanted to be a digital twin to manage their city better or airports doing the same thing or luxury goods players trying to get to the digital which they think is part of their future or data coming in so they can manage it better or visualizing things we'd otherwise be buried

in a blueprint or architecture program. and so my sense is it is 100% true that most of the internet by the end of the decade will be real time in 3d and what i mean by realtime, it won't be a video or photograph. it is going to be something you interact with and it changes as something that you interact with that changes as you interact with i think we've all done ourselves a disdisservice by lashing onto two great books that put the words out there and gave us a science fiction view that has truth to it but not an awful lot. >> i hear you. we'll see if that vision has legs i appreciate you joining us. >> thank you stocks continue to surge this morning on the heels of cpi. g let's get over to the nasdaq >> so the 6% swing right now on

the nasdaq seems pretty much a sigh of relief after the cpi index came in cooler there's been tension after investors bracing for a hot cpi number fed chair powell, though, keep in mind did say he needs to see a multimonth string of numbers like this before shifting policy still notable the nasdaq itself is down 30% year to date let's talk about the movers. the biggest laggard on the nasdaq after reporting its new ceo. more tech names in the red, but everything else in is in the green. amazon up by 13% apple, alphabet, microsoft, all up over 6% right now those names helping ark etf -- up 13% right now but still down

about 2% over the past five days or so. and then chips with semiconductor posting its second highest monthly sale numbers in october. those numbers just released this morning. up about 13% after upgrading its 2025 forecast and announcing a new buy back program, so that's helping the sector as a whole. >> christina, thank you very much as we mentioned, too, amazon getting closer to re-claiming that $1 trillion market cap level. let's take a look following the ftx fallout. telling its partners last night that it's telling its limited partners that it's marking its investment down to $0 and saying its exposure to ftx is limited our next guest has been talking to sources they as they navigate the crypto crash joining us now

eric, a line stands out to me in that piece it says at the time of our investment of ftx we ran a vigorous due diligence progress. how? how can an $8 billion or more hole be discovered if some of the best and brightest vcs in the world looked at this and ran diligence projects >> it doesn't take a board seat. i spoke to a bunch of investors over the last couple of days and a lot of them trusted sequoia so much they didn't worry too much if ftx didn't have a board, and given he had two exchanges, a separate investment fund any investor looking at this would know this is a very risky sort of governance structure i mean not having a board and the multiple entities sort of offshore they knew due diligence you could take in like 30 seconds

learning the overall structure, so that wasn't hard to find out. and, you know, sequoia, you know, really sort of celebrated this company they put out sort of this glowing magazine article where the partners are looking at the investment and just sort of cheering for bankman freedman. >> while he plays video games. >> exactly league of legends. >> there you go. eric, what does this tell us then about all the billions of crypto invests from vcs, from private equity is it possible to do due diligence on these companies given what we've seen, and what does it mean that has cut so many techs in this space does it call into question >> totally this is a devastating blow for the crypto venture world you know, somebody was saying it might have set crypto venture back like five years

this is devastating. on the other hand, crypto has always experienced these traumatic events whether it was sort of crazy hacks so there has been the resilience it's going to be terrible for this idea of bringing pension funds, institutional investors into investing in crypto whether it's directly as some people did in ftx or through these crypto venture funds just because it's a big financial risk and it's a big reputational risk. >> eric, i wonder whether there's a systemic problem within the crypto ecosystem, whether there's a cultural problem within the crypto ecosystem, and i'm asking this it's something i wonder in that software folks are used to building stuff and then it doesn't quite work, and then they tweak it and, you know, it gets better and better over time we're seeing elon musk do that with twitter right now and with mixed results. well, not really that mixed,

mostly bad but when you're doing with that people's actual money, that's potentially a problem. when you're looking at the way certain stable coins and pegs are setup, when you're looking at the way sam bankman freed appears to have, you know, organized his businesses is this something crypto has done and said it's innovative it's going to eboo okay or are these really you think isolated incidents >> first of all i have to laugh because sequoia is also exposed to it twitter situation. to your question, no, i think this is broad issue. crypto in some ways has always wanted to reinvent the regulated financial system you'll see people on twitter saying, oh, you know, someone should come bail out the small ftx holders. it's hard to understate we're talking an $8 billion shortfall, there's a lot of customer accounts that hang in the balance and a lot ofm money tha

could be loss. it is devastating for crypto actually i think some of the crypto community was more skeptical of ftx than maybe the media. sam bankman freed did a great job of playing i'm a big democratic donor, i myself am somewhat skeptical of sort of the crypto world and he's not really a true believer he's saying explicitly he's out to make money on this, he's an arb. there were some red flags specific to ftx separate from crypto, but certainly there's no question this is really bad for all of crypto. everybody is going to hurt from this >> that's a good point willingness to work with regulators may have been his downfall in the end. >> thank you so much >> dow remains higher by about 1,000 points quick gut check on media names

in the midst of this rally >> media companies are up varying amounts right now as investors weigh how cooling inflation might help the ad market and booster subscription services roku shares they're up about 13 merse. mine while netflix is up more than 6.5%. they're two stocks struggled in the past year and watching them move higher. warner bros discovery, that stock hit a 52-week low yesterday, posting the lowest close since that company's merger it is down about 60% over the last 12 months and paramount, those shares up nearly 10% but still down up 50% in the past year a few media giants are underperforming the s&p 500's gains today. fox up over 4% and disney is sort of underperforming the lot. it's up just 3.5% in the wake of its disappointing earnings

earlier this week. carl >> julia, thanks for that. one more thing before we end the hour and that's web bush taking tesla off the best ideas list highlighting the musk-twitter antics they say spilling over to tesla putting some near-term pressure on the stock. term does maintain an outperformed rating, though. stocks down 15% since musk closed the twitter deal. john, dan ives says musk has done what the bears were unable to do for years and that is push tesla shares down. >> well, musk has been sort of trying now remember when he said he thought the stock was overvalued a long, long time ago. he wasn't really exactly hyping it but all that cash sloshing around sure helped people believe in it. >> yep dan ives put it very succinctly cutting price target to 250 but still believe in that long-term

story like many. we'll see. this is going to be a long journey. >> overall a remarkable day. obviously the market action is obvious, about 3,900 the dollar we talked about earlier on pace for the worst day since 2015 with all of that let's get to scott wapner and the half. carl, thank you very much. and welcome everybody to the half time report front and center this hour the big jump in stocks after the cpi comes in cooler than expected, major implications obviously for the fed and your money and by the way the wharton professor jeremy siegel will join us in just a few minutes with his reaction and outlook for the markets. the investment committee they're with me as always. let's check stocks you heard carl and the gang talking about we've got a cool 1,000. that's where we were a moment ago. s&p is good for nearly