nasdaq up 338. take a look at yields. the 10-year dropped too. the last i saw was below 3.8%. 3.79% now. that does it for us today. join us back here tomorrow target earnings and a bunch of other news too time for "squawk on the street". ♪ good tuesday morning welcome to "squawk on the street". i'm carl quintanilla cramer has the morning off unchanged month on month 10-year below the 50-day moving average. oil below 85 our road map begins with new signs of easing inflation. wholesale rising less than expected futures point to a sharply higher open. >> retail, we will focus on

that walmart raises its outlook big sales numbers. >> and charlie slams crypto again calling it a combination of fraud and delusion. >> let's begin with the cooler than expected data core ppi zero. prior was 7.2. the estimate 7.2 as well evidence of deflation in services pmi >> yeah. pushing further in the direction of encouraging peak yields, peak dollar that's the case combined with incredibly defensive and negative sentiment and positioning which we saw again today in the b of a. it's not a big market mover. it's a little bit of a different mix of things you're measuring with pce, which the fed is anchored on. of course the fed doesn't want to see the markets celebrate

prematurely and get overexcited. that being said, it feeds on this process where we have had a good bottom at the release, october 13th up significantly from there. people have kind of grudgingly played along the burst higher last week as well everyone knows about seasonality after midterm elections. so it's getting the market up to a place where it's going to get to its next expected test. that would be 40.75 on the s&p just above where we might open here >> you talked about ppi not being much of a mover about consumer inflation peak fed funds hasn't really budged today >> it seems the market got the message that the fed is not going to toggle where it is headed with fed fund maybe pace will be up for debate it is what is after that you are seeing firming in economic activity this quarter and not to say, oh, the soft

landing is in the bag but it's something other than a direct kind of express dissent towards recession. you still have a baddley inverted treasury yield curve. that's often a precursor to recession. in fact,, it's been pretty much an erring one in the past. a lot of back and forth on exactly how to interpret this. by the way, the s&p is flat on a six-month basis. six months ago, two-year was 2.5. ten-year under 3 fed funds under 1. what does that tell you? we can take the punishment, or the market is mistaken that things are going to turn out okay >> we'll see a lot of discussion. we'll get to market and home de depot, david some commentary with walmart, they are working hard to bring prices down. in this case in the context of high inflation >> without a doubt going through the script

the call was at 8:00 if you're just joining us, walmart shares will be up at least at the open 27 minutes or so from now based in part on very strong comp store sales numbers year over year we're talking 8.2% in the u.s. 17.4% when you take it over a two-year period. almost a 7% rise doug mcmillen's script from the 8:00 call. talking about it being a good quarter. strong results on the top line across segments and the value proposition carl just mentioned being key saying customers that came to us less frequently are shopping with us more often, including higher income customers. they said of course they are bring up inventory levels. and 13% of total sales as a company now start in a digital fashion. it doesn't mean they get delivered that way people will go to the store to

pick things up 13% of sales start in that way inventory an important component overall for much overall we'll get to home depot. it's interesting talking about a high-income customer i have been hearing negative things about the consumer. you do wonder, well, were they trading down to walmart. >> exactly it's gotten the stock back to where it was mid-may it was the warning, the inventory issues everything came to a head at that point historically walmart as a company and as a stock is kind of, you know, you're wartime concillary they are always buying back stock. they had a $20 billion buyback it is like let's say under $400

billion market cap right now the family owns almost 50% >> i love that you and i think similarly. september 9th, 37% for walton enterprises. the family, 10%. 47.4% of walmart shares are controlled by the waltons. >> $20 billion in share repurchase is being applied to only 52% of the market cap because they are not selling stock into it. that's why it matters. it's a piece of the story that's been there a long time obviously top line and margins matter a lot more. but that's something that's been part of the story. it's why walmart manages to hold its valuation. >> carl, home depot also a feature this morning as well in terms of the numbers there it may be investors are not

quite as encouraged given the guidance at home depot did not change per se. there had been a look at pretty decent numbers >> inventories were elevated on a quarter on quarter basis, 25 12.7 at walmart. home depot, up 9, transaction down 4 walmart you had ticket and transaction higher also one of the silver linings is net sales down 75 basis points of course there are lingering questions about what other giant retailer needs to rein in expenses or head count >> the margin obscured by the opioid khafrpblgt crisis it is helping them on the margin side that's the ppi story as well to some degree. companies did what they could on

prices margins in general, you look across the s&p, they're tightening up. they're coming off peak levels but in a controlled way. it's not that they are immediately buckling so walmart doing what it has managed to do for a long time, preserve the margins >> it's hard to put the pandemic into context on a three-year stack, walmart comps up 26. the world of shopping has changed the last three years >> the entire top line got so big so fast because of stimulus and inflation, you're capturing that sam's club had great comps on that time period as well so, yeah i think there's been a sense out there that there has to be a pay back for that. on the good side, people overconsumed during the pandemic in absolute dollars, it's not

declining very much for the biggest players. and i think that is one of the themes too investors migrating back to the core, to the bigger franchises we'll see what it means for target as well >> walmart is the largest grocer in the country as well something to keep in mind. and three-quarters of the share gain they received in that area came from households that exceeded 100,000 in annual income and also noting that private brands was up about 130 basis points they do say reflecting of course consumers looking for value in what we know as a very inflationary period. >> kind of takes me back to yesterday and the morgan stanley note looking at excess savings, now concentrated in the top 20%. >> it is still there in aggr aggregate. there is still a buffer. people keep racing alarms about

consumer credit going up no doubt people are trying to bridge if you look at the trend preand post pandemic, it's rising back to exactly what the long-term trend line would be in terms of consumer balances. that's the tricky part about saying a recession is a slam dunk they have already struggled. it's not people think the consumer will be refreshed going into next year because of incomes being okay, employment at 3.5%, it's not as if you are seeing the pie shrink >> so all of this brings me back to a note goldman had where they argued at this point one should not dismiss the change that is the market needs to view as a force that can surprise to the down side. we have seen examples last week and this week.

you need to have the over on 18 times or 225 for next year >> right >> that's why a lot of firms are still saying strength. it is not a phaeufs challenge. this sounds ridiculous people think 24 is higher than 23 i agree the market does seem capped back on the uncertainty of how much people will pay up in aggregate for earnings. >> they still don't believe it

has fully taken place. they may well end up being wrong. the same ones happy to send you the list of all the huge rallies that took place during terrible bear markets only to revisit or go lower >> 100%. that's why cash levels among fund managers is at a multidecade high as we saw with bofa cash pays something. there is a bit of a hurdle rate. it restrains the market to go crazy. we have to be careful about addressing it as one big blob. the biggest stocks are much more expensive than the average and we are seeing estimates come down not as much >> we will talk about the fund

manager survey and the stagflationary view coming off the fed data looking at inflation expectations we'll get the latest on ftx. and what charlie monger is saying with becky quick. taking a look at the premarket not just the ppi data but some of the retail data we will get a lot more "squawk on the street" continues in a moment. ♪ ♪ we all need a rock we can rely on. to be strong.

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bam bank man-fried's said had i been a bit more concentrated, and here i think he means more focused, on what i was doing, i would have been able to be more thorough would have allowed me to catch what was going on on the risk side >> yes if only we had been more focused. i say that about myself, too, sometimes. i wish i had focused one thought he perhaps would have been more focused on the risk side. kind of detailing the changes that have happened, including mr. bank man-fried being set aside. this is going to be long and complicated. you take a look at a bounce in the ftt so to speak, the ftx

token at the center of the losses that took place here. and many on the streets trying to figure out as best they can, without adequate accounting at this point, how much liability in terms of customer accounts. 16 billion is what they are estimating 5 billion may have been withdrawn prefiling and will not get clawed back. you will have a call claims, vendor claims. all sorts of stuff you try and figure out, mike, what is your ultimate recovery going to be here it's not looking that good maybe 10 to 20 cents again, these are early, early estimates. so i don't want to make much of them there's so much we don't know. it's so deeply complex, spreading around the globe and dealing with an underlying currency, so to speak, that it will be incredibly volatile

>> what will determine whether in fact, that goes up or down? still in the coins >> i think some of it is, yeah yeah so that makes it even more difficult. it will be based on the move of the market itself. blackrock, third point, on and on, and what level of due diligence they conducted didn't even have a board of directors. >> or know where their own leverage was situated. your report about the fallout just beginning, the journal piece, trading tokens about to get listed alameda, visa pulling their pact citroen with a short on ether. and talking to becky earlier this morning, renewing

longstanding criticism of crypto >> i think the authorities have been confused about the whole damn thing bunch of elderly people having done things one way the whole team like a mosquito catcher. they know how to smack mosquitos. but they're gnats. >> they sneak through the net. >> some of that stuff would never have been allowed. >> what do you think the holdup is when i look at it, it seems like a big turf war >> it doesn't fit into -- of course it's hard of course it's hard for the regulators to do for -- to deal with na new activity

the whole internet was new and so this whole business is new. but danger flags are wagging so clearly. i'm going to sell you nothing. and nothing is plenty for you. you hear that and it's a joke. people think it's a real asset of course it's not a real asset. >> he called it trading turds. back then buffett talked specifically about exchanges and people of less than stellar customers trying to get rich >> one of the things that is going to happen, probably should have happened earlier is to know what we're talking about when we say exchanges in crypto. they really were not exchanges

they were dealers, private dealers. you had your money on deposit there, right attached to a market maker in a variety of coins but exchange implies something different. kind of a neutral venue where you know where the money is coming and going a clearing process and all the rest i mean, you know, one of the interesting takeaways, too, people who are believers in the core of crypto, well, this shows you decentralized, just hold it in our head, your crib drive as opposed to the popularization of coins that came through these branded quasi exchanges. and the question is what would the coins ever have gotten to in price if you didn't have the fronts and promoters >> deposit your money. >> yeah. there's no doubt this would have benefited from a great deal of regulation

at the same time, if it is proved fraud, that evades regulators as well they come late to that too i always quote silverman fraud by its very nature is hard to detect. if there had been a higher level of regulation would there have been able to begin with more not being taken advantage of and lighting a fire under one of the chip names as we look at some of these 13 fs "squawk on the street" is back when we return ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia.

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bunch of moving pieces today. there's a look at futures.

3.8 half a point below its recent high. dollar trend below the 50-year three-month although vick's we'll get to all of it

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>> we weren't sure if he was going to make it in after last night. he joins us. are you here for the rest of the hour >> of course are you kidding me i've always loved the commanders they've always been my second team >> oh, my gosh >> let's get beyond it et. that's all we have to say, right, david >> yes your team is still 8-1, 9-1? >> i heard someone talking about fraud and thought you might be talking about the eagles

>> what's on your mind, jim? we were going to talk about taiwan semi and warren buffett >> whoever is buying things is right, as we thought whoever was selling things yesterday was right. we've got to get beyond that taiwan semi is not doing well because president xi dealt with president biden. it is a little less dangerous. >> they bought it during the third quarter. we will talk about other names as well that berkshire bought, including increasing that stake in paramount but you're not a believer then >> let's get some orders.

i find taiwan semi interesting there's only a couple things in the world. it fits with some of the other things he looks at it doesn't mean it's up from here >> global did not have a great quarter. it went up anyway. when i look at all these stocks, i say someone got it very wrong thinking ppi would be bad. we do have a pattern in inflation. it is different from what we thought.

>> franklin templeton celebrating its 75th anniversary. and fentech celebrating a listing via spac it's going to also recoup the beginning of the spill that we took in mid-september. >> there was a sense that the guys who were saying it's going to go up, it's bouncing, it's over now they're going to have to rethink. why would they have to rethink because when you get a situation like a walmart, which buys back, that's different from buffett. that's real capital. how about this theory. the theory is that the holiday season, at least for walmart, will be better than expected that puts pressure on target we know that someone is -- we've not been able to see both do well we have not seen home depot and lowe's do well there was a special many, many years ago about the age of walmart i think it was

even though you haven't been down in a long time, it matters. >> it does i would point out grocery is where they had particular strength not that there wasn't strength across the board you are seeing 8.2% u.s. comp store sales numbers year over year but it does appear when it comes to growth it outpaced general merchandise. that is something to keep an eye on there because they said that they actually saw hiring people adding to their growing share of the grocery market in the country. grocery was the engine to a certain extent >> yesterday if there was good grocery there couldn't be good buy of everything else false narrative.

may be true for target, not walmart. >> low single digits with softness in electronics, home and apparel. remember, because i had been hearing there might be some weakness the consumer is getting weak it doesn't seem reflective of these numbers. you need to look a bit deeper because it is interesting mix between real strength and grocery and not quite as much when it comes to electronics, home and apparel apparel in certain categories are the heavy categories we will continue to work through those. reminder we said at the beginning of q1 we need a couple quarters to work through inventory in apparel >> that could make a tougher target i go food shopping there but in the end it's apparel. walmart says there's too much apparel. >> we talked about inventory they have brought it down for two quarters now i don't know if you saw -- i've been getting tons of 50% off from dominoes pizza.

the apple macbook on blom berg is discounting promotions are here. >> they are here and a lot of people believe no matter what that housing slowing means put more money in your house. one of the things we learned is we're supposed to say if they're not buying or selling new houses they're renovating i don't know if that's another false narrative. >> it doesn't seem there is a big push there's no refi activity that would support a lot of that. it just doesn't seem like it's cheap enough or in the right spot in the cycle to take hold what's interesting is how the home builders themselves refuse to go back to the lows from june >> home depot, despite what we hear, won't go down. what goes down is tech lennar has been the star you're not supposed to buy lenar

in a tightening cycle. unless you think it is about to break. >> and is it >> when you get a ppi this cool and people will say a second ppi is going to make it so brainard's story is right. if it's right, can you really wait can we wait? >> well, the other part of it is the 10-year is where it is how about the fact that the street, there's no way you can breakthrough, david. how about if the street is incorrect and there's just a lot of money looking for a few stocks

i want to know why we don't have chain link fence what is the other one? >> i don't know. i'm trying to figure out what serum. it was only worth 65 million but hey. >> how much was wage in the end? >> 1.8 >> why not put the powerball bug up there's still money left lietget it started it's more hon oeft it's honest. it's not defi. suddenly people are staying, that does lend some appeal except for the people who come on and they're angry and say you're stupid. they'll call me. they'll call me. they'll say, listen, you're really stupid.

solana >> i don't know anything about it hair salona. >> i know we are having a rally with the nasdaq up 2.4%. we're seven minutes into trading. amazon one of the leaders. we talked about it yesterday when that news came out from the "new york times" sort of detailing expectations in terms of the job cuts. as many as 10,000 jobs roughly 3% of the workforce overall. compare that to 13% of the workforce at meta we heard about only last week it gives you a little sense there. amazon hired 800,000 people. 800,000 people >> the sixth army but the war is over >> most to work in warehouses. the market likes layoffs, jim. >> meta, what they are saying clearly is it's the beginning of the layoffs. they don't need as many people in insta

maybe they have conquered reels. maybe that is a tiktok defeat. i don't know reels gives a good roi >> watching that full screen of some media names, netflix had a seven-month high bofa double upgrade. they rein state coverage i know you have been watching the comments from warner brothers >> he's been speaking at a conference ad market still weak would be sort of the highlight there. and then going on of course as is typical in terms of the strength that he sees at the company, reassuring people in any number of ways it would be the ad market weakness >> david, how about the slate. >> you tell me how about the slate. what have we got coming? >> d.c. is going to be monetized.

>> i'm good. >> they have a team capable of doing that they have characters that we do like when was the last time you you saw superman >> you know they had 10 games and the numbers were up 20%. >> in i i would point out i'm going to spend time with john malone >> largest shareholder >> one of the largest in discovery. we will be talking about

>> netflix already succeeded with that. it changed the entire conversation a lot orientation analysts can look at it. business starting from zero to something. they're getting enthusiastic about how it could take hold you get away from the treadmill of how many subs this quarter versus last a little bit you know, i think that makes sense. netflix has almost doubled it's 90% off the low >> people are very excited they're excited. on the last three calls it was like, hey, you guys got anything no, we have nothing to watch they had a half dozen things i want to watch. i pause it is disney a false tell this is still run by the same people isn't it >> every day

>> they can't stop the run disney cannot stop the run. >> i would buyback the middle deck >> yeah. trading at significant discounts. you want to make sure you have as much free cash flow as you can. you do need to meet investor demands. >> you tell me they can't make them better than nine. >> they need to make a decision where cash is best used. they own 68.9 million shares now 91 million the bad news is originally it

was worth 2.6 million. it is a rounding error the two companies do know each other. they have a violent venture. >> commercial real estate lender. one of the few mid market. >> on paramount, i would point out berkshire. it's clear it's buffet behind this, is a larger shareholder

than sherry rezulin. economics and vote, very different. but as for just economics, yeah. is there a way with any trust the way they are >> it is thought to merge nbc universal together you would have to figure out something with cbs probably the o&os. and question of control and governance and the part of the roberts family to have control it becomes a difficult deal to

do are there other details to embrace? i don't know does netflix want to buy them? you tell me, jim >> i don't want to speak too much about our parent company. i think it is largely thought to not have enough content. >> right scale is important back to netflix, i'm not sure the decision making, current multiples compared to five, six years ago when they were put in place. >> exactly >> that's what encouraged it looking at that multiple and thinking we have to do that. >> it said the market is telling us we're dinosaurs look at the capitalization of this thing that wants to kill us or is dominating the eyeball now, it is profitless prosperity everyone has a huge slate or enough subs. there are too many

subscriptions. the market is going back to the incumbent as opposed to the tpreupbg evs >> how many characters do they have how much can they monetize versus other companies that have character. >> it's like new basic cable everything is becoming that. right? we have talked about it. everything will be ad supported soon enough. i have a stable of direct to consumer things ad supported -- what does that remind me of. what am i paying is that different than what i was paying for my cable sub description. >> jonas at morgan stanley, sentiment is shifting because of elon's involvement in twitter. could test 150 by year end, jim. >> look, i've got to tell you there was a comment by musk on twitter saying that frankly that there's been encouraging data.

then you start thinking, wait a second, why should he continue -- was that a subtle hint that he is done selling any tesla? which in that case wow >> i wonder about the man's ability to simply focus. how you deal with trying to put twitter's business on firm ground when it doesn't seem to be at all right now. at the same time running tesla, running spacex, neurolink. and then you find time to read the "new york times" story on sam bankman-fried. what's he doing? >> why the puff story in the "new york times" last night. maybe he gets more than 24 hours. >> i wonder if he sleeps less than you two >> no. it's not possible >> we are close to holding

4,020. good morning, bob. >> we are over 4,000 on the s&p. that's a two-month high. ppi lighter than expected. good report from walmart and home depot to a lesser extent. those are the three things fueling the markets right now. take a look at the sectors i want to look at the risk on staff. cathy woods arc fund doing well. transports are doing well in the last few days overall. semiconductors do well on top of that and the kweb, chinese stock, doing well recently. that's the last self days. all the sectors have really been on fire. in terms of what's been moving here, it's great to see. you see the moves up for ark innovation, vanek semi and dow transports these comp numbers, 8.2%, wow. that is way above the consensus.

prices up 6% that's the most impregnancyive thing is transactions are up 2%. it's not just inflation. everybody likes to dismiss the reports. not as great over at home depot. prices up 8% transactions here you see the cynics say this is all prices and transactions aren't great that may be the reason we see such a good move on walmart. home depot flat. they didn't change their guidance at all. that may be another reason the important thing for ppi is inflation is starting to move in the right direction. if that's the case, the key story is earnings may not be collapsing at all. a month ago they were predicting earnings were down 20% for 2023. right now earnings for the fourth quarter are down slightly they've been coming down particularly tech and communication services 2023, about 4%, 4.9%

if you put up the full screen you'll see that's been coming down but not negative. we may not need to bring earnings into negative tear toe. that is one reason the market is continuing to rally. a lot of bearish sentiment out there. i mean, a lot. the fund manager, bank of america global fund manager survey came out. recession likely necessary 12 months, 77%. profits lower, 77% stagflation, 92% believe it's going to happen the next 12 months basically everybody's under weight stocks, overweight cash dramatically and the trade is the long dollar out there. the only good news is to the extent inflation is the great concern, recent ones, ppi and cpi may help improve the consumer sentiment fairly quickly and the investor sentiment. back to you. >> gasoline futures lowest in a while too. thank you. as we go to break, let's check

bonds. off session lows 10-year, just about 3.82 ppi number, the fourth straight decline. and that goose egg on core is the lowest in two years,going back to november 2020. back in a minute

nasdaq 100 gapers, some chinese names in there as well xi was up 4% this morning on some china reopening headlines also the foreign minister of china talking about ukraine, saying they will play a role in putting together, perhaps, some constructive peace talks in the future we'll watch that cseloly some big gains back in a moment ans. i'm lauren haydel owner of fluerty girl. today, my tiny online shop has grown into eight stores. we're a must-stop shop for unique nola-inspired gifts. lauren doesn't just create cool nola merch;

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jim, what's on "mad" tonight? >> the west point investing club they have won contests because they are so rigorous it's truly enjoyable because they are sensational we're glad they're here to help us. >> we're glad you made it in, despite last night's result. >> my real commute has been revealed 50 minutes, not 15

>> that was good we'll see you tonight. "mad money" 6:00 p.m. dow up 325 here. we're back in a moment don't go away.

♪ in any business, you ride the line between numbers and people. what's right for the business and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance. cla - cpas, consultants, and wealth advisors. we'll get you there.

good tuesday morning welcome to another hour of "squawk on the street. live at post 9 of the stock exchange stocks bumping up against two-month highs. got robust results out of home depot. >> cool is hot 30 minutes into the trading session. here are three big movers we're watching we'll start with a pair of retail giants. walmart and home depot beating on earnings. home depot slightly in the red right around the flat line walmart jumping up 7%. we have more on their quarters later this hour. plus, bath and body works rallying after dan lobes revealed purchase in the stock in the quarterly s.e.c. filing for last quarter

those shares are up 3-plus percent. we get those earnings tomorrow. we'll end with harley-davidson, under pressure after jeffrey's with an underperform rating. price target of $39, saying, quote, the early inroads of the hard wire strategy will be tested by a less favorable back drop over the next 6 to 18 months you can see those shares are also at the flat line. carl meantime, markets are cheering another lower than expected inflation report our senior economics reporter steve liesman has more >> the inflation data in the past week going 2 for 2, coming below expectations capped by this morning's beat on wholesale prices could point the way to better consumer inflation numbers down the road and, perhaps, less fed tightening ultimately the producer price index coming in at 0.2%, half the expectations take out food and energy, unchanged.

revisions downward to september, 0.2 and 0.1 on the headline and core the year over year rates for headline and core, as far as the fed is concerned, they remain far too high but they have been marching down at 8%. the headline number is the lowest at july 6.6 the core lowest since may. both, as you can see in that chart, been declining for several months, going in the right direction. what helped ppi were shipping costs, wholesale and retail margins. a decline in intermediate goods, further up the pipeline, suggests more disinflation to come the question whether retailers pass along those mriss to consumers. fed officials have been insistent. they need to see several months of declining to pause fed rate hikes. this might be the start of counting those months. the market looks to be in sync with the fed raising the current funds rate now up towards 4.5%.

each positive inflation report we get right now doesn't do much to that front end. what it does do, it reduces the back end of the fed having more work to do and raise rates considerably -- not having to raise rates, that is, above 5% we'll bring those questions tomorrow to san francisco fed president mary daly. we have an exclusive interview on "squawk on the street." i'll tell you guy, pathyeon saying this is the great margin recompression. >> i'll bite it. you touched on it earlier in your hit let's talk about what this does to stocks. >> well, look, stocks want lower inflation, they want less fed. along the way, one thing that has helped stocks along the way is higher margins. prices have gone up. you had fed vice chair brainard talked about this, the idea that margins and profits are higher historically than they have been one things that happens, prices

come down. margins come down. so, this becomes a sort of foot race between declining input costs on the back end for companies and then declining retail costs or prices to the consumer on the front end. so, we'll see how companies manage that, how they manage their supply chain we're listening carefully to folks like walmart, home depot about the levels of their inventory. we did hear walmart inventories have been coming down. that's a good thing. we'd like to see some of that excess inventory and, therefore, moving that inventory, those prices show up more in the consumer price index that could flatter it down the road >> we're going to talk more about walmart in a moment. since you mentioned it, steve. also interesting, though, grocery was a lot of the growth there. they're gaining share. they also say people over $100,000 are a key part of that gain not sure what your thoughts are about that they're seeing people not necessarily trade down but go for the private label as well in grocery. as you point out, it's an interesting reflection of sort

of the economic times when you look at the walmart customer and what they're choosing to do. >> that's a third part of the dynamic for the retailer, which is all of this happening against a back drop of a slowing economy. employment remains firm, wages remain firm. that's a good thing for them it should keep up sales on the front end. on the other hand, you have things like those who can, david, i was struck several months -- several years ago, i was looking at this inflation story. remember, one of the things for poorer people is they can't trade down anymore they're already at the lowest possible price -- they're already at the private label brand. that's why it hurts poor people and low income people, inflation does, more than it does. wealthy people have the opportunity to trade down. they'll do that for a while. if prices stabilize and you start to see there's a bargain to go upscale, people do it again. >> all right steve liesman, thank you >> pleasure. >> that's a good way to tee up our next guest where we continue

to focus on retail walmart beating on top and bottom lines, announcing $20 billion share repurchase program. home depot also beating, reaffirming full year earnings forecast with us da davidson retail analyst michael baker. i want to get your thoughts on this conversation we were just having with steve and how it's playing out. whether it's this idea of margin compression as inflation begins to come off, whether it's this idea of the consumer mix shifting and fueling growth at a name -- in grocery at a name like walmart your thoughts on what we're seeing play out from a macro level on the microlevel through the retail results we've gotten so far >> well, sure. and i think highlight of the day is certainly walmart, and we think their ability to take market share, particularly with higher end customers that is a function of somewhat distressing economic environment we're heading into it is forced some customers to think about where they shop differently. walmart is well positioned to take care of that. the most important thing we saw

today, i think, was the inventory levels come back really cut in half, up 12% versus 25% last quarter. that's really what i think is the key throughout the earnings season is taking a look at those inventory levels up 12% versus sales up closer to 9% not really too much of a glut anymore. they've done a great job working that down. to the question about margins and how that plays out next year, i think that is a key question and the idea of will retailers be able to hang onto prices as some costs come down walmart and home depot were asked that on the conference calls, which just ended. neither are being overly -- getting too far ahead of themselves in predicting margins next year. i think that makes sense, saying you're holding onto higher prices as input costs come down. we think it could be a margin benefit next year relative to the drag we've seen? retail this year. >> interesting let's dig into home depot.

we've seen housing markets soften and soften aggressively is that a forward-looking indicator for activity at home depot, or if you have more people staying put in their homes because interest rates have risen as much as they have over the past year, is it a beneficiary? >> yeah. i think home depot has done amazingly well in this environment, which does seem to point to some slowing demand in that category. so, we give them all the credit in the world and i do think as people stay in places a little more, that could help business. but in general, home price appreciation is the most important metric home prices are up, certainly, about 40% in the last three years. but those increases are starting to moderate. we think the bar is set a little higher here for home depot given the fed back drop, which is still a little bit of a headwind so, they had great results but it's tough for that stock to work here, as long as rates are going up again, we think that will lead to lower home price appreciation looking ahead.

>> so, how does all of this set us up for more retail results this week with target in particular in focus tomorrow given, back to your earlier point, the inventory drawdown we're seeing at walmart. >> watch inventory pressure is on target a little bit here i'm sorry, walmart certainly did a great job working down the inventories. we expect to see the same for target we've seen a lot of markdowns. we know that the retailers are ordering less so the inventory levels should be better in the third quarter than they were in the second quarter we don't know if target will show quite as much progress as walmart did just because walmart's mix to nondiscretionary items that's really the key metric to watch tomorrow for target, is inventory levels >> okay. michael baker, thanks for joining us >> happy to do it. thanks as we go to break this morning, here's a road map for the rest of the hour, including the berkshire bump names like taiwan semis, jeffries all benefiting from the firm's latest 13-f.

betty quick caught up with legendary investor charlie munger an exclusive interview as he continues his criticism of crypto. a live picture of kennedy space center nasa is getting ready to launch its artemis mega moon rocket that will happen much later tonight. don't go anywhere.

welcome back we continue to follow the collapse of ftx. an updated bankruptcy filing was filed overnight, giving us a bit more detail, although there's still plenty to learn. kate rooney joins us with the latest >> david, good morning lawyers for ftx now say it has roughly 1 million creditors from the crypto company filed its bare bones paperwork on friday ftx said it could have more than 100,000 creditors. we do expect to get a list of its 50 biggest creditors by friday ftx also saying over the past few days it's been in contact with dozens of regulators in the u.s. and abroad, including u.s. attorney's office, s.e.c., and the cftc it says ftx faced what they called severe liquidity crisis that necessitated the filing on an emergency basis last week alvarez and marsal and lawyers pointing out the complexity with over 100 ftx

entities involving what they call nontraditional assets, or cryptocurrencies it mentioned ftx's governance. ftx did not have a board or a cfo. john ray is the new restructuring officer. and for a reminder, this is the same john ray who worked to restructure enron. he's now working with an external legal team for ftx and cyber security as well as forensic investigators to secure customer money in addition, ftx hired independent directors at each of ftx's parent companies to ensure what they call proper governance and added new independent board members. former ftx ceo sam bankman-fried and founder of the company with some cryptic tweets saying he's going to talk about what happened we have not gotten details yet all of this is affecting crypto markets. alameda was one of the biggest market makers in the industry. the hedge fund bankman-fried

founded. data is calling this now the alameda gap. it says this past week has marked the largest drp in liquidity they've seen across any other crypto crash thinner markets tend to mean more volatility. you can see that affecting the depth, as we call it, bitcoin. >> why sam bankman-fried continues to communicate, whether an interview with "the new york times" or these tweets. it must be driving his lawyer, paul weiss, insane you spent time with him not that long ago that "new york times" piece, curious your reaction to it. he's playing a lot of video games. he seems to be doing some other things i don't know if you have anything to share in terms of what this guy is thinking and why he continues to commu communicate, please let me know. >> the tone struck me, that he wouldn't comment on the biggest

elephant in the room, allegations of misappropriate rating customer funds, some regulatory issues and potential criminal liability he'll be facing the ton meanwhile, the back drop, one of the quotes is, it could be worse, he said. he's also talking about playing video games and finding a way to, seems like, disassociate with what's going on i think that struck a lot of people as odd. those i'm talking to saying, we didn't learn much from his comments it was more of a roundup of what's happened. but surprising that he is speaking out based on some of the legal issues and a lot of poo em on twitter are wondering why he's -- he's putting out statements in multiple tweets. didn't say what happened but it's taking days there is questions on the communication tactics. your guess is as good as mine as to what he's thinking here >> i'm sure. >> disassociated is a good word. >> yeah. >> kate, thank you >> thanks, guys. sticking with crypto, our becky quick caught up with

berkshire's vice chairman charlie munger, long-time crypto skeptic and joins us with some highlights i wasn't sure he would be able to find new ways to talk about crypto, but you got it out of him. >> he's a pretty creative guy. you know he hasn't liked crypto, hasn't liked it for a long time. he's called it evil, he's called it rat poison, and even compared it earlier this year to venereal disease. if you wonder if the debacle at ftx it making him like it any more, you would be right, that's not the case it's not just crypto he's concerned with, it's also the big name investors we're familiar with, names like sequoia that got involved with ftx. that's where he is focusing some of his ire today to. >> it pains me in my own country i see people, less reputable people helping these things exist and so forth this is a very, very bad thing

the country did not need a currency that's good for kidnappers and so on. >> what do you think happened? there are a lot of big names, people and firms that you -- >> that's what distresses me there are people who think they have to be on every deal that's hot. and they don't care if it's child prostitution orbit coin. if it's hot, they want to be in it i think that's totally crazy reputation is very helpful in financial life and to destroy your reputation by associating with scum ball and scum ball promotions is a huge mistake >> do you think those companies did any due diligence or what happened >> i think they actually meanwhile -- you're seeing a lo

of delusion. it's partly fraud and partly delusion that's a bad combination i don't like either fraud or delusion and the delusion may be more extreme than the fraud >> delusion how so >> nobody can build a new thing that every 12-year-old kid can be a billionaire or something. he just calls it munger coin, starts trading it or something it's crazy it's demented. >> now, he did say there was an underlying sexist thing, a good thing, a lot of people got dragged in by the computer science aspect but he says it's a good idea to take excess than a bad idea he referenced ben graham in citing some of those issues. one of the big issues is, yes,

people will dress it up and make it sound different because nobody ever tells you that they're trying to sell you crap, although he used a different word for it. it's just that this is the smoke and mirrors, the magic and fairy dust as he puts it in terms of putting those things out there back to you. >> becky, you know, did he have any thoughts on whether or not the entire collapse could be siloed or offer contagion to other elements of the industry >> i asked him he said when you see a decline in society, it doesn't come all at one time like rome and other places he doesn't think it's for the good of society, shall we say. >> becky, great conversation great reporting as always. thank you for bringing it to us. becky quick. after the break, semi stocks surging.

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semiconductor, popping 4%. sector is getting a nice boost from taiwan semi rallying after berkshire disclosed in an s.e.c. filing it bought 1.4 billion of the chipmaker's stock in q3. joining us is cowen research analyst chris to talk about the chips, tsm, and how much the sector has added in the last month or so. what do you think is happening overall, before we get specifically to taiwan semi. >> thanks for having me, carl. i would say that what you're seeing so far isle market has been discounting negative news for a while. and in the last three months we have seen semiconductor companies coming out and acknowledging demand weakness. as they get revised downward, that's a d-listing you stipulate out macro aside, industries are willing to get in these names now that fundamental headwinds have been removed as

they demand and numbers get weak. >> the price action we've seen all year, starting to get validated. what do you think is behind berkshire's bet? if you were to try to describe both thesis, would it align with your coverage of the universe right now? >> the best company in the world, they know how to execute really well. they're one of the only game in town technology. from that standpoint, i would definitely say the company makes a lot of sense we like the company, not the stock. from a stock standpoint, we look at how the stock has behaved in the last year, year and a half the stock moves because of berkshire news, it's moved based on price action and gross margins move higher. we begin to see next year, asp is going to moderate and gross

margins are peaking. from a pure quality standpoint >> we get more earnings for more in the sector this week. nvidia, but applied materials as well which i know you do i guess talk to me about some of those manufacturers. the manufacturers of equipment to manufacture the chips >> absolutely. i think when theother peers reported last month, you saw where company management came and said capex is going to be down that is basically -- the cyclical downturn and the same thing happened where numbers got delist i would say since mid-october they relatively outperform the market i expect the same thing for

applied materials when they report >> the idea of supply chain diversi diversification, whether it's the c.h.i.p.s. act or looking for europe to stand up more of its own semiconductor manufacturing itself, does this buoy these names over the coming years despite the cyclicality? >> absolutely. i would say the supply chain in u.s., europe or japan, is actually huge. when these transitions happen, it's never seamless. definitely a lot of inefficiencies those are positive because they tend to buy a lot more treatment. i think the next three to five years, i would say as this funding starts loading out and the buildout of fabs across the globe starts happening, it's a net positive >> speaking of that as well, the

president and president xi, a lot has been written the past 24 hours about their meeting, and to the degree it was constructive, do we think this week will mark a turning point in managing that kind of economic cooperation or competition and their access to companies like isml? >> it's tough to say last month we saw the u.s. -- on semiconductors in electronic company in japan those chinese customers cannot get u.s. tools, not even necessarily need to buy the non-u.s. tools it's hard to handicap how these political things would play out. taiwan semi, investors do ask once in a while what happens with china i think it's a very hard question to answer because

nobody knows the timeline for that if you strip out the politics, some of the macro-related concerns, i would say largely many of the -- is already being discounted in the stocks. >> obviously a tough space to read right now good to see you. talk soon, i hope. >> thanks for having me. >> let's get a news update for that we go to seema mody at hq. >> here's what's happening at this hour. ukrainian officials are reporting widespread russian attacks that are knocking out power and creating emergency blackouts. one senior official calling the situation critical the mayor of kyiv says one person has killed. strikes have included residential buildings that have been set on fire. president biden pressing g20 leaders for strong condemnation of russia's invasion of ukraine at their summit in indonesia a draft declaration seen by associated press echoes pressure

approved by the united nations and includes careful wording as some countries seek to avoid being entangled in the war. the world's population has topped 8 billion india and china account for nearly a third of the total between now and 2050, much of the population growth is expected to be from just eight countries. half of those are in the subsaharan africa. >> seema, thank you. seema mody. we talked about taiwan semi, of course, moments ago given berkshire hathaway has become a significant shareholder. two other names we're watching this morning because they're both up on berkshire purchases by the way, this doesn't always mean it's buffett behind this. there are a number of decision makers when it comes to the portfolio at berkshire it's unclear if warren buffett is making decisions on paramount. 130,000 shares they filed for.

one would think they bought more after the filing period had passed the companies there do share 50-50 ownership of a mortgage servicing business as for paramount global, back in may is when they initiated that position as much as 2.6 billion worth of stock then it's worth a lot less now even though they increased from 68 million shares to 91 million now. berkshire owns about 51% of paramount global not quite sure what exactly it is they're looking for but they are the largest single shareholder, even larger than its control shareholder, national amusements. we're back in two. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna.

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welcome back dow is up 343.

session high was plus 450. nasdaq hanging on to pretty much session highs. joining us at post 9, ubs private wealth management ally mccartney and timer. thanks to have you on set. thanks for coming in ppi, big topic of discussion today. after cpi. are we believers at this point or do we need -- what is the path of clear and convincing >> we'll take it we're not going to fade it just like we're not going to fade the fed, but i think it's a little too early for a pivot party. we have the beginning of some really exciting data we have some comps that should be terribly beatable what we haven't dealt with is, a, slowing growth. b, geopolitical tensions that continue to escalate despite some of the things we see. and we haven't necessarily seen any of this work its way through the market from an interest rate perspective. one of the things i saw that

i've been focusing on is, and i have to read this, the fed senior loan office opinion survey that came out last week this has proven for many, many cycling to be a leading indicator. what they're asking is they're asking bank senior loan officers, are they tightening credit almost 40% are tightening industrial and commercial credit we have not seen any of that yet. >> does the price we pay for lower inflation is still to come >> you know, i think the big win with the cpi, now the ppi, is i think it's giving the market some conviction to look past peak fed, if you will, whether that's 5, 5.25, 4.75 and onto some return to a neutral rate. whether that's 3.5, 4 or 3 when you look at the math of valuation, market is trading around 17 times now. the fair value was around 15, based on where rates are i think what the market is doing is looking past the terminal

rate and some normalcy to your point, the big question is, how far do we come down in terms of the inflation numbers do we go all the way down to the fed's target the fed has kind of made it clear that it's willing to kind of, you know, throw the economy under the bus. i hate to put it that way. in order to get to 2% inflation. what if we go to 4 and it stays there, what does that mean for the fed funds rate do we stay kind of structurally restrictive and what does that mean for valuation i think that's a 2023 story. i think that's the next big chapter. >> i want to go back to the data you just cited does that suggest if you're looking for earnings recession, economic recession, early indicators it's going to be the industrial side of the economy that's going to take us there first? >> that's a good question. i think that -- we definitely at ubs are on the low side of earnings for 2023.

we to see an earnings recession. we see contraction of about 4% we see the street needs to come down closer to us than the opposite the question about whether there is a recession full stop and what that looks like, i think is still to be determined i think the way you get around that and the way you can get around any volatility is to invest into demographic trends we are pushing people into oil, we're pushing people into parts of real estate where demographics give you a tailwind and health care, where we see a global need, we see technologies, many of them that were developed during the pandemic that can help catalyze. but look, i think we are in a terribly precarious situation. i think we have more to be positive about now than we did three months ago so, whether you're calling it peak inflation, peak uncertainty, peak angst, i think that there is a definite path

forward. but i don't think -- again, i think it's too early to call a pivot party and i think it's too early to say this is a sustainable rally to the upside. >> i want to get your thoughts on this and how you would be positioning or counseling folks to position investors to position given this conversation we're having. >> it's certainly the question about earnings is a big one. if you look at ex-energy, producing 100% earnings growth, the estimated growth rate for this year is only 1.2% inflation is 8%. in real terms earnings, growth is already negative and probably going to stay that way the hard part, it's a very nonlinear exercise usually price bottoms two quarters ahead of earnings even if we get the right e in that pe, it doesn't tell us if the market has bottomed or not you can make the case that we've seen the worst levels.

it's hard for me to see the bullish catalyst here. we're trading already at a 17 multiple even if rates back down further, it's hard to justify more than that when we're still kind of looking into the eyes of possibly a recession in 2023 >> i'm just curious what you're hearing and seeing from -- amongst your client base in wealth management. it's been a brutal year, even with the rebound in prices and the stock market lately and even bond prices. it's still benl brutal regardless of exposure are people willing to take risks as they watch the rally in equity markets or are they still sort of scared >> there are people just starting to take risks, but i think what we're seeing is bifur indication in the market where institutions and fast money are willing to take risk for a day or two you have a lot of individuals, a, they can be in cash in a way that a lot of institutions and

fast money can't and you have treasuries that are a great risk return right now to do that, which you didn't have before b, you can -- we've gone from what we call fomo to tara. they're alternatives you know, you can take risks right now by going into munis. you can take risks by going into corporates of one, two, three years and pocketing 4% or 5% that's the place we see clients taking risks the conversations we're having as we got through maybe not the bottom of the market, but the nader of sentiment among individuals is you're starting to see people understand, just like during the global financial crisis, that there will be opportunity and that opportunity is going to be three-fold. it's going to be equities. it's not going to be in beta it's going to be in fixed income and alternatives as both hedge funds and a lot of privates

rerate to whatever this new normal is. >> finally, you do such great chart work i know you've done analogs post-midterm and post-peak cpi those charts look constructive is there a reason to think it might be different this time >> it's interesting. the presidential cycle, the four-year cycle. we know the first two years tebd to be weakest and last two the strongest. going back a couple hundred years because the party in power wants to stay in power so they prop up the economy. especially after the midterm season, especially when the market's been down during that year, which it has been this year, the seasonal pattern gets very constructive. it gives me hope with peak cpi hopefully in the rearview mirror and peak fed not too far in the future that the markets can get more orderly at least. to your point, 60-40 has been a

nightmare this year. neither one has worked adds tempting as it is to buy t-bills or two-year notes and call it a day, the problem is you're doing market timing market timing is impossible. i've done it it for 37 years, or tried to do it my sense is at least the 60 or 40 will start to perform both of them now have value, right? you can get ten-year yields at 1.5% real. you can get the s&p at 17 multiple so, at least the markets have level set. that provides a more level playing field going forward. >> next six weeks are going to be interesting then we can start talking about the next 15, too thank you for coming in. >> still to come, the countdown is on for nasa's historic first artemis lunar mission. that's set for lift-off later tonight. much later tonight first, a look at the top gainers on the s&p, which is trading above 4,000, 4120.

svb financial, paramount global, up 9%, and carnival and walmart rounding out the top five. we're back in the.re ♪ ♪ we all need a rock we can rely on. to be strong. to overcome anything. ♪ ♪ to be... unstoppable. that's why the world's largest companies

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welcome back to "squawk on the street." after a flurry of false starts, three at least and counting, nasa's mega moon rocket and deep space capsule at kennedy space center is preparing for lift-off overnight. you can see those live images right there. the uncrewed launch marks the debut of the space launch system or sls this is the most powerful rocket ever built and it is the first mission in nasa's artemis lunar program, which is expected to land government nasa astronauts on the moon by 2025. artemis i will spend 25 days traveling around the moon testing deep space capsule orion before people climb on board it's a huge moment for a huge

project that's years later and millions over budget nasa's inspector general estimates $40 billion has been spent, and to get boots on the moon, all in, total cost, $93 billion. it's $4 billion just to launch the expendable rocket, according to those auditors. artemis supports 70,000 jobs it has a list of contractors involved, including boeing, which is an sls prime. lockheed martin, prime on orion. northrop grumman, aero jet rocketdyne the private equity firm behind orion's red wire corporation is watching this closely. >> there's definitely competition between the u.s. and the chinese for legal commercialization and lunar commercialization that will play

out over the next decade we're believers that this is a once in a generation opportunity for us to invest in an area of growth to use a cliche, the next frontier, within civil space >> ae industrial is the biggest investor in space, according to konert he's betting it will be a $2 trillion economy by 2040 more on my conversation with him on the latest episode of "manifest space. it will be publishing just a bit later today. you can access it wherever you access your podcasts as for the launch itself, 1:04 a.m. eastern tonight is when that two-hour launch window opens. yours truly will be watching and monitoring and covering tomorrow, bright and early here on cnbc. >> seemed a little frustrated when you read some of those numbers we're spending on going back to the moon, morgan, or

perhaps reflecting what many others are saying as well in terms of that expenditure for obviously something we did a long time ago. >> so, yes so, it has been -- it's been many decades since we were on the moon, since we put humans on the moon this is basically a return to that capability it has been -- sls has been in development for ten years now. certainly we've seen commercial space and the likes of spacex come in in the meantime and really bring down the cost of launch to space. that being said, compared to the apollo program, this is still trending, inflation-adjusted dollars, much lower than apollo. but there are folks out there that look at something like sls and say this is more of a jobs program than a space program nonetheless, goes back to the comments right there about this competition with china that competition is not just playing out here on earth. it is playing out on the lunar surface as well. there are a lot of capabilities

we get by going there, colonizing there and being able to move on to, say, deep space exploration of mars. >> i see >> so there's good reasons to do it the price tag is hefty. >> it's not just about bringing back a moon rock you're going no. >> go and stay. >> go and stay those contracts, part of the reason this is watched closely by investors, because there is a, a lot of opportunity to contract with nasa you've got public/private partnerships in play for some aspects of that. spacex a contractor, for example. we're looking to build a lunar outpost. a space station going to orbit the moon in coming years. >> and hotels eventually, or, no no hotels? >> yeah. i think lower orbit first. >> and then spacex takes you there, stay a fewdays? >> yeah. potentially starship becomes its own orbiting hotel all kinds of conversations.

>> the rick incredible. >> i would do that one i would. wait until i'm really old just in case but would do it. >> i wouldn't go mars, though. obviously. >> you wouldn't go to mars >> i would. >> i'd go to the moon, though. >> mars is a one-way trip for now. coming up next hour, a lot more on today's rally in tech names including chips. taiwan semi leading the way after a good overnight session in asia and kweb aiming for gains first month ever "techcheck" top of the hour. don't go anywhere. clunky beige, plastic... or... presto... you choose. better hearing made virtually invisible.

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welcome back midterm shows voters hold mixed messages on taxing the rich. joining now to explain, robert. >> morgan, more than a dozen tax proposals on state ballots this midterm. big three all about taxing the wealthy. massachusetts voters approving a tax hike on high earners going to be a 4% surtax on those making more than $1 million a year bringing top rate to 9% and marks the first change to that state's flat tax in over a century. added revenue goes to education, roads and bridges. meanwhile in california, voters there rejecting higher taxes on those earning $2 million or more surtax would have raised rates over 50% highest in the nation. spent on transition to evs

calf g california governor and others opposed the plan colorado, a little of both cut the flat tax for all taxpayers from 4.5% to 4.4% but raised taxes on high earners by capping their deductions those added revenues will go to education. so bottom line here, voters care about how their extra tax dollars are spent as much as who are actually getting taxed david? >> robert, thank you. robert frank. before we end here focus viewers on shares of alibaba up as much as 11% of course, a stock well known to many here in the u.s., and often used as a proxy for sort of whether bad or good news from the chinese economy. in this case, it and names such as ten cent moving up dramatically as result of data showing better than expected retail sales particularly online

sales, and you can see what that's meant very significant rally for, of course a group that's had a great deal of volatility much lower as those chinese lockdowns, as a result of covid, continued for quite some time. there is hope they are in the process of being lifted. that does it for us right here on "squawk on the street." "techcheck" starts now. good tuesday morning welcome to "techcheck" i'm carl quintanilla with deirdre bosa, jon fortt live from cnbc's fourth annual technology executive council summit here in new york city. today nasdaq seeing a nice pop as another inflation print comes in lighter than expected where you should put your money this hour. plus, walmart results giving hope to retailers, but what about the rest of the ecommerce and q4 holiday spend talk about that in a minute. finally, like an old man chasing a chorus girl. billionaire charlie munger's take on crypto investors