rebounded all the way to 180 and now this is happening again. it's made the round trip, and i don't know what you want to glean from what target said, but that is a huge haircut, and it's almost identical to the one -- there are similar factors to the last quarter remember the last quarter when it happened? >> bunch of inventory. >> we got to go. >> sorry >> bye >> make sure you join us tomorrow, please ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at the new york stock exchange futures are looking for direction after target miss and warns on holiday spend but october retail sales come in nearly double the estimate, x autos, two-year yield bounces. our road map begins with that target tumble. the retailer delivers a gloomy

holiday quarter update >> plus those cuts in technology, well, they continue. amazon, of course, announcing those cost cuts, and yesterday, alphabet facing activist pressures to trim its own head count. and, quote, extremely concerned, the fbi warning of tiktok's potential national security risks. >> start with target, tumbling on that q3 earnings miss the company cites an increasingly challenging environment, announces a cost-cutting plan designed to save up to $3 billion a year jim, i heard you talking about it with becky, and you mentioned theft. that's $400 million right there. >> you annualize theft and you start to really get into something that a bunch of the other retailers kind of whisper about because no one really knows what to do the big issue -- i know home depot has this issue too this notion of, you steal it, and you put it on amazon you'll notice that there are brands that are really only available at home depot, and they're on amazon as their own

brand. for target, i think that part of the problem with target, and i think it's going to affect everybody, except for amazon itself, is this inability to be able to make it so that the people who check out are suddenly enforcers they weren't meant to be that. brian cornell is very much, i would say, a person who does not want to put anyone in a position where they may have to stop theft. so, you've got kind of open season on a store. >> yeah, that's one interesting, if you want to call it that, component of this earnings report was what we call -- what they call shrinkage, which is basically stealing, and groups -- organized groups that came in and -- to the stores and do that. but overall, the market is going to grapple with whether this is target-specific or whether this really is a reflection of the macroenvironment jim, you and i had spoken in recent weeks about what i had heard anecdotally, you had as

well, sort of some weakness in the consumer towards the end of october. >> yes >> yesterday's walmart report may have sort of had you question that, but when you look deeper into it, you saw grocery was a lot of the growth at walmart. in fact, they even cited the fact that income -- people with incomes over $100,000 were a big part of their share gain in grocery, and merchandise and apparel was not particularly strong target, not as big in grocery. and is certainly seeing some of that weakness in merchandise and apparel. >> i think that's a great point. i think we never really got clarity on cadence in walmart. it is very clear that october was a very weak month. we've been saying that we can address the retail sales numbers, the national ones, didn't seem weak >> no, they didn't >> brian cornell is adamant, november's -- we're not that far into november, but now we're starting to talk about holiday season, and you have to reach some conclusions that something happened in the country during the month of october where it really hit home, whether bit the

layoffs in technology, whether it be the general discussion of recession, but then you try to jive that with the numbers we got today from the government, which would indicate that there was robust retail sales and you know, i tend to believe in target and walmart now, lowe's was good lowe's represents good spend on the home but i have to tell you, when i look at the categories that were bad, so to speak, too hot in the national retail sales, some of them make no sense whatsoever. furniture. that shouldn't be hotter it's absolutely not. clothing, frankly, it's discounted everywhere. great promotions food at the supermarket remains a real problem it's a problem >> yeah. you're right about home furnishings. home goods and tjx down 16 that flies right in the face of the broader ecodata that we're getting. >> yeah, i mean, now, i'm used

to tjx giving a confusing report we know that they are the recipient of a lot of the problems, a lot of the product that others get. >> right, the inventory writedowns result in tjx getting your -- >> and they don't get them yet they tend to get them right at the time where people realize, holy cow, we have the wrong inventory. so, this quarter, this print is not as significant but david, there's absolutely nothing that i have heard that indicates that october was a banner month in the country. but you have to -- if you start getting these negatives, from lael brainard say, it's something. >> the retail numbers we got at 8:30 look pretty good. ex-autos above the expectations. but that said, i continue to hear -- things have not fallen off a cliff. >> no. >> and you go into a holiday season that may be okay.

but they're not where they were. and then the question becomes, who else are we going to hear from tomorrow? macy's, bj's, gap, kohl's, a bunch more coming in terms of the earnings that may give a better sense as to the strength of the consumer because it's not just about the retail stocks but this is also, despite what was a strong retail sales number today overall, that it is about the -- whether the consumer's starting to weaken at certain points, and then ultimately a lot of people are going to want to take that and say, well, what does that mean for fed policy? >> and then, you just get the same comments today from sanjay, just now, about micron, saying, once again, there's too much inventory in the channel once again, they have to cut back on capital equipment. and what this says is, if you want to know where weakness is, it is back in this so-called work-from-home new office where i heard from logitech the other

day that the new office at home is getting improved, but micron is a very big company and this is not sanjay's first time it is not his second time. it is his third time, and micron is the building block, so i mean, if you want weakness, buy anything electronic. now, we hear from best buy next week my understanding is it's okay. one of the things that's happened that i was kind of grousing this morning was, okay, so, we have people from crypto, and it's not crypto that's the problem. it's the fed that's the problem. we have people from the stores, it's not the problem it's the macroeconomic picture but then, david, we have the consumer himself or herself, pretty strong. so, i mean -- >> well, again, it goes back to this question, and we'll talk about micron in a moment, as to whether this is more target-specific or reflective. >> target also is fabulous >> just to tell people, they were looking -- investors were

looking for target guiding third quarter sales, comp sales, higher they were, instead, down, low single digits based on softening sales of profit trends that emerged late in the third quarter and persisted into november company believes it's prudent to plan for a wide range of sales outcomes in the third quarter and of course that's different than what we heard from walmart. >> i know. >> which, again, saw share gains, particularly in grocery, and had ongoing promotions when it came to general merchandise >> well, how about home depot? little more levered to the professional >> was home depot up yesterday in part just based on walmart's strength >> i think so. i think walmart give you a nice penumbra home depot, not pristine quarter. so, it's raining on the side of home depot street but sunny on lowe's no, but i think these companies are differentiated enough.

but brian cornell is a very good merchant, and that shook me to the core that they could miss by that much after he cleared the so-called wrong inventory, brought in the right inventory, and it doesn't seem to matter. >> yeah. inventory's up 14. they did say comps began the quarter in the three range and by the end of the quarter, fell down to the one range. they also point out global shipping lead times came down so fast that they were receiving orders faster than they expected, and by the way, i know you've seen freight shipping is taking another leg down. >> logistics problems, and we know this from the trucking industry, were cured almost as far as they became a problem if you're the fed, you've gotten to be sitting there saying, you know what? we stretch things out. logistics are starting to go our way. we're certainly getting the materials. and we've got a glut so, we've got some pricing the individual may be doing better, but does the individual

do better at the expense of producers who are now stuck with inventory? is that where the recession is >> prices start to come down guys, worth mentioning micron again. we've showed you the stock price. doesn't look like it's going to be that weak when we begin trading. here's the key paragraph, so to speak, from this further actions to address market conditions press release. "recently, the market outlook for calendar 2023 has weakened in order to significantly improve total inventory in the supply chain, micron believes that in calendar 2023, year on year dram bit supply will need to shrink and nan bit supply growth will need to be significantly lower than previous estimates." >> so, sanjay came here, and he talked about the need to really cut back and now he's cut back again. is he just not clear about what his business is like

or, i mean, carl, is it the possibility that, frankly, these are agencies once again pcs and if that's the case, another leg down amd, another leg down, nvidia, which reports tonight. >> jim, he says he's taking bold and aggressive steps >> what were the other ones? they were unimpressive and not as bold? how many times can this man just say, look, it's just not going well why not just shut down for a couple weeks i would say, the stock's up every time he says it. now, at a certain point, what he's really doing is creating his own shortage i think perhaps overseas they're pumping them out sanjay owns this part of the market but there's a worldwide market to d.r.a.m. and nan and flash, and this stuff goes into pcs. i just think -- and yet, you know, it's funny if you try to get a current pc,

it's incredibly difficult. >> why is that >> they don't have any inventory. they have the wrong inventory. i mean, it's just seems like so many companies, whether it be target, whether it be the best buy, they got the wrong inventory. and i don't know what happened maybe, david, it's your theory about how finally the stuff came in, and it's like too old already. it is mystifying that somebody like sanjay mehrotra, who is very good at his job, was able once again to misjudge >> is he >> i've called out so many people lately. i will give him a pass >> you've run out of ammo? >> you're just tired of, like, screaming at ceos? there's no room? >> this guy doesn't know what he's doing >> sanjay gets a pass, not really because he deserves it? >> grading on a curve. >> you're just too tired >> i'm exhausted in calling people out i mean, i talk to sanjay all the time i did not speak to him last

night. obviously, this morning, he came out, and it is very similar to the last time i spoke to him but i can't get a handle on how he doesn't just take the big meet ex. >> the trimming to capex last time was not small >> it was huge >> and now you're reducing d.r.a.m. and nan wafer starts by 20% and saying that the calendar '23 outlook has weakened >> where's all this lam research stuff going to go? we told the chinese they couldn't have it lam research, you know, the classic d.r.a.m. maker stock is up gigantically from where it was it's up 100 points but it will go down today. and i think that people are going to continue to say, at what point is the channel clear of inventory >> right >> i know that there have been a belief that you could send d.r.a.m.s, send a lot of chips to india, to brazil. get them out of the channel. i guess it's just not working.

david, there is continual optimism among some of these people in this industry that you'll need another pc i mean, how many pcs do you need >> i don't know. i don't know how many. i've got plenty. >> i've got plenty of pcs. >> i had three last night. my personal pc, the pc i use for my financial transactions because years ago the fbi guy told me, don't do anything except with one pc and i had my work pc all in front of me >> did the fbi contact you about not using tiktok on that official fbi -- >> director wray called you? >> it was years ago when i did that cyber espionage thing on china. the fbi guy is like, do you do online banking >> you were omar you were the first person like omar you had a burner phone in "the wire," david's favorite series he goes to china, he recreates "the wire," and they weren't ready for you. >> it's worked, keeping all my financial transactions to one

pc i advise everybody to do that. don't go anywhere else on the internet >> why did micron do this on the day of nvidia? darn we had an nvidia recommendation. no, sanjay -- >> he's going to be bold and aggressive, jim. don't you worry. >> bold and aggressive i bet once on bold and aggressive, and she came in third. >> we got retail sales, as you know, about -- almost an hour ago. now we're getting industrial production let's get to rick san attelli. >> good morning. the mirror expectations, down 0.1% and that is the first minus number since august. and the biggest negative number that we have going since -- we have to go all the way back to december of last year. and if you look at capacity utilization, this is a huge

miss 79.9 this is the first time under 80 since june, and in the rear view mirror, the 80.3 gets downgraded to 80.1, and that is significant because the 80.3 that we had last month that was revised lower was actually the highest level of utilization going back to 2008, but we just pretty much negated that, so these numbers are both disappointments, so if you're looking at manufacturing and mining areas, this is something to pay attention to. yields for ten-year notes have dipped under yesterday's 3.76 low. excuse me. 3.75 low so, that is building momentum. look for more buying to accumulate, and remember, we have a 20-year auction at 1:00 eastern. "squawonhetrt"il turn after a short break

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futures just slightly in the red here obviously, the ecodata and the retail earnings are going to drive the bus at the open. we'll also get some fed speak today. williams, barr, waller on top of some of the commentary we got from the likes of esther george yesterday. ten-year, below 3.25 don't forget, you can catch us ay time, anywhere, just listen tond follow the "squawk on the street" opening bell podcast

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eight minutes before we get started with trading here at the new york stock exchange, and we've some time to get in a "mad dash." cisco reports after the bell >> i'm looking at a barclay's piece, which basically just says this is going to be a miserable quarter, that orders, which chuck robins had emphasized as being good, well, they're saying, don't expect that. they're talking about continued gross margin headwinds they're tall software move lagging. they're talking about how the overall camp is vertical to decline. the only thing they didn't talk about is the idea that we're really talking about cisco, the food company, because this may be one of the most damning with faint praise, this is an equal weight from barclay's. my travel trust owns it. because i have faith in chuck robins, i'm going to say that this is probably too negative, but it's still big stocks. it's got a good yield.

>> yeah. and i find that once again, listen, they're a big buyer of d.r.a.m.s and sanjay mehrotra is on their side, who just preannounced weakness in micron. but david, it's just incredible to me that once again, we have people giving up on this company. >> well, okay. i get it i do wonder, jim, sometimes it's instructive. it's a long, long time ago, but cisco will never, it seems, approach the market cap that it had -- i mean, you and i were still buddies back then, 22 years ago. can we bring up a 20-year chart? it sometimes can be instructive for people sometimes there are monumental changes, and you never regain the value. >> and that was the buildout >> and you know, that -- well, that doesn't capture it. you know why it's not long enough >> right >> it's not long enough. you got to go back to -- i don't know that we have.

>> this is $400 billion. >> we've already -- >> this was the largest company in america in market cap, and amazingly, this was considered to be the only backbone in the internet that everyone had to be connected to it. it's still very important, but there's more decentralization. there was some competition and the f.a.n.g. companies did not build their data center -- >> thank you >> there you go. >> thank you look at that >> i happen to think that chuck has done an exceptional job. >> he has. and this is -- i mean, this is ancient history. you and i were young men >> this is when nort el was kin. >> yeah. that was chambers. that was an incredible move. that was amazing >> look, this is one note, and chuck will be on "mad. look, the thing is, 15% to 20% declines in orders i'm not getting that read. that's the key thing i'm getting a more positive read i could be wrong

but it is the big one tonight. >> it's a big one, and as you said, chuck robins, of course, cisco's ceo, will join jim tonight on "mad money" right here at 6:00 p.m don't miss it. but coming up sooner than that, in fact, five minutes from now, is an opening bell stay with us

the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. it will soon cost you a bit more to visit disney world next month, the theme park is hiking ticket prices for the first time in more than three years. cost is going to depend on which park you actually choose to reserve. the minimum price for magic kingdom tickets will increase by about 14% for the nine days during the christmas holidays. peak time, $189, jim interesting to see them now start to slice up prices between actual parks >> right now, when the company reported, i certainly -- i know i wanted much more about theme parks, theme park pricing, and the greatness of theme park. and now, they give it to you in

piecemeal. david, once again, the communication between disney and wall street is nonexistent i mean, why not, on their quarterly conference call, say, you know what? we have tremendous demand for theme parks. why stress over and over again the cost of disney+ when that's like talking about how bad espn is remember those days? >> yeah. >> and instead of talking about something positive, they spend time talking about good news, and you know what, the cost of disney+. so i think again, the message is -- >> is muddled, you feel like yeah i mean, the other thing you keep hearing is just the lack of free cash flow at the company >> yes >> you know, billion-something this year, $2 billion next, not a lot given their costs, but obviously, raising price is going to help that >> why not do a reset and admit that the original plan was set

in a different era rein in some spending. fix the balance sheet. make it so that people who are in finance at the company don't feel as perilous >> right >> meanwhile, 24/7 wall street calls chapek the worst ceo of 2022 >> really? >> not much of a contest >> well, i'm not going to dispute that right now i'm trying to think. i mean, because i -- sam bankman-fried is not -- you can't lump him in, right but look are there worse ceos there are some ceos that have been fired maybe they come in worse >> yeah. there's the opening bell this morning at the cnbc realtime exchange at the big board today, it's one main celebrating its centennial anniversary at the nasdaq. coeptics therapeutics,

developing therapy for cancer. we'll keep our eyes on the retail >> i would have expected more positive reaction from lowe's. i mean, marvin ellison is saying pretty much everything he wanted to say, including even select markets where low prices have declined during the pandemic, we are not seeing any impact to sales. david, marvin ellison is basically saying that the consumer is not going to stop spending on their home and i think that does jive with what we've seen with national retail sales and home spend is not necessarily the same as with target >> right you know, home depot yesterday, though, jim, i mean, i don't know it didn't feel like a great quarter from them. >> no. no and they didn't -- no. it did not feel like a great

quarter. it was an okay quarter >> it was okay and it got kind of dragged up a bit, i think, on the enthusiasm around the walmart print >> yes lowe's would have been up even -- much more. today, home depot and target -- well, target's pulling down everybody because brian cornell gave you that november snapshot, which was disconcerting, to say the least. >> did we get any real guidance from lowe's, though, for the next year? >> yeah. marvin's very excited. >> we got the full-year outlook. >> he's the most bullish i've heard him in a long time >> well, ellison was on earlier this morning if you want to take a quick listen to what he told our viewers. >> let's do that >> you don't see a correlating factor between home prices declining and home improvement sales declining. so, i just think we're in a unique environment home improvement is a unique space because home prices have gone up. there's a shortage of homes.

homes are getting older, and all of those factors bode well for our demand trends. >> pretty interesting. although, the association of architects has their billings index, which actually went sub-50 for the first time since january of last year >> and then the dallas fed talked about a 20% decline in the price of a home, which would -- look, we do hope that marvin ellison is right and that even with that decline, you get spending if you're the fed, you have to be cheered by this, and i'll tell you why it's confusing enough for you to think, you know what maybe we to the 50 this isn't, maybe we do the 50 and not the 75 maybe 50 >> it's also having an impact, i should say, "it," i'm referring, really, to target here on the broader retailers. i'm looking at macy's, which hasn't reported and won't until tomorrow macy's is down 7%, 7.5%, i think, and you've got bj's

wholesale down 1.75% i got kohl's down 6% >> even though kohl's has already preannounced >> exactly we already heard a preannouncement from kohl's. so, this is having an impact >> costco is up. >> gap is down almost 9% this is ahead of hearing from these companies on concern that target's problems will be reflected as well in those, particularly apparel and general merchandise. and amazon is down 3%. you know, amazon had a brief move higher, and outperforming the group or outperforming big tech for a bit there on the reports of as much as -- as many as 10,000 people losing their jobs, 3% of the company. but it retreated a bit and is down again today perhaps more on the actual concern about spending >> it's funny. you've got mark zuckerberg

curtailing spending and extraneous projects, and everybody loves it you have amazon curtailing spending and extraneous projects, and people hate it >> you had bezos come out and literally tell people not to buy stuff. >> well, bezos was kind of like, you know, the apocalypse is coming, so maybe cut back on alexa. >> i don't know about you, but i'm going to space see you later. i'm out of here. >> but meta, i think, some of meta is the nation that the fbi is going to shut down its principle competitor, reels, and if that's the case, wow. because reels did pretty well anyway what people are worried about, obviously, with meta is that what is mark doing with the meta wall, with the meta -- the virtual school the layoffs, again, were more generous than the twitter layoffs. >> where he says, either respond to this email by 5:00 tomorrow

or leave >> you get three months, though. >> you get three months. >> you get three months if you're an employee at twitter if you're not interested in working hard core, basically, all time >> round the clock or three months wouldn't you take the three months >> yeah. i think a lot of people will >> i think he wants to have a turnover there >> he's looking for turnover he's very focused on the software engineers and on the proper code. >> have you noticed any difference daily average users yesterday, he said, are up. >> i saw that you said something positive about daily average or you retweeted something. >> i retweeted it. i don't know the guy -- look, he's trying to figure out what to do. and i think he realizes that it was bloated. i think he wants his own people in i think three months -- we're starting -- these severance packages from silicon valley are much more generous >> meta was 16 weeks and another, i think, about two for

every year worked. this is just, you get three months >> what'd you think about the fact that mark zuckerberg give you perhaps the most generous severance in the history of silicon valley and yet is regarded as being someone who is -- >> is it the most generous in the history of silicon valley? it wasn't that it's 60 weeks, 4 months, what? >> i've heard people who got the package that i know are literally trying to reorient their lives, bally, south sea islands. >> that's very nice. >> four seasons. >> meanwhile, elon is going to actually be taking a moment out of his busy day to appear in court in front of his favorite chancellor, mccormick, who we talked a great deal about, because she's overseeing this compensation -- this trial about his compensation at tesla. of course, chancellor mccormick, you may recall, was also running the twitter deal trial, so to speak, but she never got to actually officiate the actual trial itself, because he bought

the company for exactly what he said he would. now he's stuck with it >> if you're on the tesla line and you're used to seeing him, let's let's say, in austin, i mean, he does seem to be uniquely focused at twitter, and is basically giving you a daily look at things when he does the daily average users. he's taking time to figure out whether certain people should be ceos i thought john ledger would be a great ceo. i thought this would be like a king and a prime minister, and you make him king and you say, prime minister >> he will find a ceo. i reported this a long time ago when he was first talking to those investors, saying, i will be interim ceo for a period of perhaps three months or more and we're in that period now at some point, he will find a ceo. i don't think he's going to listen to you. >> not at all. >> literally said, no.

>> i think he gave me, really, the same time of day that bob paycheck gave me >> i think you got feedback from elon musk, and that's pretty good >> i haven't won over anyone in at least eight or nine months. >> i agree with you. >> not one thing >> it's been tough on you. >> still haven't broken ground on that theme park in new mexico >> i'm trying to figure out where -- for instance, i went down to philadelphia to see the no-hitter. we were no hit i'm looking for a win. i'm struggling for a win >> 8-1, i think you can take that to the bank >> well, i'd like to think so, but we do play the colts coming up, and they're coached by saturday but playing on a sunday when did saturday play on a sunday last, david >> what's the question >> i'm musing about trying to get something right. how about netflix? that's going up. >> do we want to talk about netflix? we always do this is our time to talk what do you want to talk about >> how netflix somehow became

the darling. >> ad-supported, a lot of analysts have rallied around it. >> we know that ads are weak, so why would we think that ad supported is good? >> it's potentially accretive to their business come in at a lower price point but ultimately the ad load is not going to be that large it's already happened. >> didn't we like that netflix didn't have ads? >> you can get it without ads. >> how about this activist, tci? >> alphabet shares are flat on the day, and not suffering the losses that sort of mega cap tech is. listen, tci and chris hahn, who runs it, has been a very successful firm when you look at their numbers over the last 10, 15 years very, very strong. and it's not an insignificant position they've held it for some time. they may have added to it, but over $6 billion worth of alphabet stock we shared this on "tech check" yesterday. we had a long conversation about it wants head count reductions, a target margin that's better than

where they are now, wants them to cut back on all the other spending and a number of other things, jim. by the way, em bbraced by many the shareholders >> embraced by the cfo in many ways so, i think he's made sense. david, you know who's making a lot of sense of these people at starboard and salesforce >> tell me because you know that company very well. >> well, i think that when we deal with companies from silicon valley during this period, we really talk about the stock-based compensation and how they kind of went nuts with it but a stock buyback indicates a level of discipline that you're getting from marc benioff that is in keeping with what i think the people from starboard will want because starboard's very disciplined on spending and not on giving out stock willy-nilly. >> so, do you think that will result in salesforce increasing its share repurchases? >> yes, and i think that salesforce is -- which my trust

owns and it's down badly today -- but i think salesforce is getting religion. i think that there's -- i think that there's actually good rapport between -- >> between management and jeff smith at starboard >> yeah. and it's interesting because periodically, you have these really smart insurgents, so to speak, who are not insurgents at all. they're buyers they have good ideas they're listened to by very smart ceos who are not insecure. and they take the best of the best and i think that's happening at salesforce >> well, this overall, there's a theme here from investors in terms of silicon valley and cutting costs. i think we can all agree >> yes >> brad from altimeter, meta, amazon getting pressure not necessarily in the form of a letter but just saying, come on. and i mean, you think ruth will follow through on some of the -- >> i think ruth porat hired

12,500 people when things were still looking rosier carl, i keep trying to think you're an engineer, and you're laid off from meta well, it's a reduction in force. so, it's not like, you know, someone's going to say, wow, i look askance at you. so, i think the test will be how many of these very qualified people get jobs in the industry, in technology, or do they have to leave technology and learn how to be at other companies within a really short -- >> i mean, goldman's note yesterday said you could fire everybody in the entire industry, and it would only raise the unemployment rate 0.3. >> i think there's more of -- >> they make a lot of money. what was that average? i left the letter upstairs the average employee at alphabet makes $280,000 a year or something. what was the number? >> i think that report did not have -- i read that.

did not -- i think that you shouldn't be thinking about the people i think you should be thinking about the purchase power >> purchase power. >> that's my point >> purchasing power per person i was at dollar general this weekend. and the people who work at dollar general, you could lay off 42,700 of them and that would be equal to like a week of paychecks from someone let's be more rigorous it's not -- >> well, speaking of purchase power. >> lot of stuff is a dollar there. >> really quick, we had the cto on "squawk" this morning, genesis suspending redemptions, this bis study arguing that three quarters of bitcoin holders are probably in the red. >> it is remarkable. have we held the bug yet on -- >> solana? your favorite? i don't know that we've seen solana >> the wipeouts here are big you know, when people come on, they're very combative, again, they're always blaming us as being uninformed

>> helping to promote many of these things as well >> i look at this. when you lost everything, and we say you've lost everything, i feel more informed than the people who say, you didn't lose, that it was, blame it on i mean, david, let's say you gave me a big pile of cash and i burned it. you know what? smoky the bear told me not to. the absurdity of the defense of these -- i want to just say this i bought it, sold it, made a lot of money, best of luck why defend a concept that right now, if you put money in, you're going to hurt people let's say someone's on and says, all this has to do with the fed, it's a great bargain, and then you put it with some outfit, exodus corp., and it's frozen. well, we did that. we did that. we had them on they said good things. we couldn't refute them because

they're so vociferous, and then we hurt people good or bad? >> that's bad. >> meanwhile, cz commented on how an event like this happens in this country, even with our regulatory structure here's what he said. >> if you look at u.s., one of the most well-regulated markets in the world, madoff happened. madoff is ten times bigger than ftx, so that shows, like, regulation doesn't prevent scammers or fraudsters so, it just reduces it we can borrow from it, but we can't just say, look, regulation's going to fix all this it will reduce it. it's important but we got to have the right expectations i think the industry's got to come together, become tighter and become better. so, short-term, there's a lot of pain long-term, it's actually causing us to accelerate many of the efforts we're doing to make this industry healthier >> there you go. i mean, we know that you don't want to conflate madoff, which

is fraud, and not -- >> ftx may be fraud. >> i'm saying, gary gensler came on multiple times. we all told him that this was happening. >> yes >> that's -- we never said, like, had we said, you know, madoff is a crook, why do you not go after him >> if you had more transparency as a result of more regulation, there might have been things you saw sooner or questioned sooner. >> you couldn't have been more abject i was dealing with someone who watches the show, and said, you know what? you're not listening to it all thank you. you told gensler a number of times this was going to happen, and you know what? you failed and shame on you >> okay. >> shame on me >> that seems harsh, but okay. overall, pretty muted open dow is up 35 at 3,980. defensive serkts asectors are leading. let's get to bob pisani. >> defensive sectors are leading. for example, consumer staples holding up very well, healthcare, these are the classic defensive sectors.

elsewhere, tech sort of mixed, apple's down fractionally, but the real weakness is in the retail sectors, and that's been an issue for all throughout the morning here if you just take a look at the main retail movers here, target's down rather notably, 16% or so. lowe's opened fractionally on the upside, but some of the other apparel companies like gap, macy's, also weak in the department store area here in terms of what the issues are for target, it's pretty clear. looks to me like there's excess of inventory still out there that's been there for several quarters that's been bothering them you had decelerating spending and then, of course, you have all these multichannel demands on the company put this all together, and what you've got, essentially, is real margin pressure out there. lowe's, i would note, the comps were up 3% but the transactions down, 5.4% the ticket was up 8% so, there you go there's the inflation component that's really helping them out but transactions, down 5.4%. that caught my eye overall in terms of what we're doing

here today, we've got a pretty powerful rally it's been driven largely by short covering the s&p is up about 6% in the last weeks and if you look the a what's going on, the big macro-trends, so, inflation has been positive. the news has been positive the china news has been positive overall. and the seasonal trends, the post-election trends are a real positive for the markets so, this is why we have been lifting recently here. the problem is, the earnings trends have generally been lower. so stock momentum has been higher at the same time as the earnings trends. you put up the next one. has been lower what's causing this here is the earnings slowly coming down is a problem for the market you can't keep the market going up with the earnings coming down we've noted they're negative for the fourth quarter this just happened in the last week or so and 2023 numbers, up about 5%. most analysts are expecting 2023 to be flat now so, essentially, now, you've got a market multiple that keeps going up with earnings going down, and that's a little bit of a problem, carl, because remember, we were at 15 in

october. today, we're at 17 the historic average is 17, and when you get towards 18, which is where we are if you assume flat earnings, that doesn't happen very often. it happened during the dot com bust it happened during covid but it's tough to keep it up there >> break, watch bonds today as we mentioned yields swirling around in the wake of some of the data we got earlier this morning ten year below three and three quarters, see if it's still there just about, as the two year is still hovering below 4.4. more fed speak on the way. we'll be right back don't go anywhere

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i think is mixed cig signals in text mixed signals in retail, tech. again i argue that's a case for the fed to do 50 and see what happens. if the targets triumphed over the walmarts we will have gone too tight. >> we're going to find out in a few weeks obviously, jim see you tonight, look forward to hearing you and chuck toss the ball around. when we come back, an exclusive with san francisco fed president mary daly.

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welcome to another hour of "squawk on the street. i'm carl quintanilla it is busy today markets not moving a lot but we've been through retail sales, industrial production, targeted lows and now some fresh data crossing the tape with rick santelli >> carl, business inventory through month of september expected to be up half 1%, darn close up .4% here's the issue, up .4%, is the smallest month over month build on this inventory number since april of last year since april of '21 when it was minus 110. that gives you the expansion we have experienced in the inventory sector we have the housing market index for november out also and for that we head to diana o'lick >> sentiment dropped again the 11th straight monthly drop since june of 2012 anything bel0 issidered negati ofast yearat 83 in nber hi interest rates are mo than twice whatt waed e start of this year despite a bacst week. 59of bers rt hing to use cent, a er share than the last few mont rrent sales condns f x points to 39 ctat in the next six to 20.ed 4 points, andbuyer tras sentimfelloss nation but rdesin the south whe me bing is usually mt acti th home buildersayin 're up against highestfor just . > we 30 tes into the trg sen. we're starting with cruise line. thosares down big after a $1 billion coniblet offering the company's rencin down 13% anwe'sghtlhigher a f a at oe top and bottom lines, nowt's higby4.5% they also ted e guidance werio 97$98 billion foe ye and finally targhares, those are metiollow a miss profit fell by abo0%, they tried to clear unwanted ntor stock down 15%, ace r the worsday e math and guysit ry isping up to be aed pre f these retails.todais a perfect o just the tail wo rlers if you will. lo is ng ty're not seng awdow coers the cash, more that sh tthe emic, and they puttg it to work d yove tt saying no, we're seeing a huge slow down. seeing our consumers come in and trade down, smaller pack sizes

looking at store brands, et cetera, et cetera. it also kind of speaks to, carl, the difference between walmart and target this quarter. where the inventory discussion is concern too >> yeah. inventory is the target up 14. of course, a little bit more than walmart's yesterday also private label, david, growing roughly 2x the overall enterprise to morgan's point about people potentially trading down. >> we saw some of that mentioned yesterday in walmart, which obviously was a very different report, a positive one, 8.2% comp store sales in the u.s. growth but a lot of it made up by grocery. and, in fact, even they said they're seeing higher end consumers come to them, which increase market share but also consumers trade down to some of the private label. and they did talk a bit about a lack of growth in general merchandise and apparel. perhaps a bit of a hint maybe not to expect too much from target but the question that many have in the marketplace this morning is, is this more target specific than not or is it reflective overall of weakness in the consumer that we will see when we get more retail earnings later in the week from the likes

of macy's and gap and others. >> it's a key question i would say if there there's one big takeaway from the numbers, the data we've gotten so far this week, it is that higher inflation is affecting consumers. it's affecting sales, we saw it in the retail sales number that came out this morning as well. and just higher priced items and people spending more because those items cost more and in case of some retailers, depending on what they're offering to those consumers, that means that it might be fewer ticket -- fewer -- fewer people making fewer purchases, even though they're at higher prices whatever you want to say, whether it's home depot, target, walmart, some of the others, inflation is affecting consumers and we're seeing it in some of the dynamics even if it's playing out differently across the specific companies speaking of inflation we did get ppi this morning, it came in

lighter than expected yesterday. another positive data point i should say for the market as morgan just mentioned, of course inflation continues to be something that all market participants are very much focused on let's bring in steve liesman he's going to speak with san francisco fed president mary da daly in a moment. >> yeah. monetary policy should not be used at least in the first incident to address financial stability concerns, there are concerns about liquidity in markets with the aggressive tightening by the federal reserve. he said monetary policy should not be a jack of all trades and a master of none the public and private sector should work together to enhance resilience of the financial system and particularly points out year end funding which can be a time of volatility in financial markets. let's talk now to john williams' successor at the san francisco

federal reserve bank president mary daly. i don't know which of you guys got the better deal, john got the gold in the basement but you got san francisco and the bridge and the weather. >> look at the background here, i'm in good shape. >> exactly thanks for joining us. >> my pleasure. >> tell me how you react -- tell me how you react as a fed official who, i assume, is looking for the economy to slow. but you see robust retail sales this morning and robust discussion among the anchors of the show about what is going on with retail. do you want to see the consumer continuing to spend more >> what i'm looking for for monetary policy to work and do its job, raising interest rates. we've seen interest sensitive sectors, housing notably, come down that's a good start. the consumer is hanging in there. i have nine western states, spent a lot of time out there talking to businesses large and

small, consumers, workers, community groups and i'm hearing consumers are stepping back. they're changing how they allocate their spending. they're dealing with high inflation of course so they have to make tradeoffs and put things back that they would otherwise get and also preparing for a slower economy that's a good start. we're not there yet, obviously but that's exactly what we want to see we want to see the economy slow down, bring demand back in line with supply, get inflation down over a reasonable time period and get back to a sustainable pace of growth >> so we just got some inflation numbers. they were both better than expected i know they're only one month's worth of data and you want to see more than that, but when you look at the numbers we got, is there anything inside the inflation die m naik that you're looking at that tells you things are moving in the right direction? >> sure one of the things i look at in the cpi is the change in core goods inflation

for a long time we've been saying that's terrible we want goods and service spending to rebalance and see goods and inflation come down both as demand is pulling back but also as supply recovers. i saw that as positive news. you're right, one month of data does not a victory make. but those were positive signs. you see it in the ppi this morning. these things getting better are encouraging. as is a slower labor market. if you think about it. but we need to get more of that to be sure that -- and confident that inflation will come down to our price stability goal in any reasonable amount of time. >> in journalism, president daly, we like to say you need three items to make a trend. am i right to think about three good months of inflation data would be enough of a trend for you to maybe pause >> well, this is -- pausing is off the table right now. it's not even part of the discussion right now the discussion is rightly in slowing the pace and

putting the pace discussion in the background focussing our attention really on what is the level of interest rates that will end up being sufficiently restrictive i want to turn back to the statement we released, to chair powell's press conference that reiterateds a aspects of the statement. we're in a slightly restrictive space by most people's calculation. now we're talking about the level that is sufficiently restrictive. that means extreme data dependency, thinking about the cumulative tightening we've already put into the system and the lags in monetary policy that become really important if you're trying to gauge exactly how you get somewhere without over or under doing it >> i don't want to make fun of this, but if pause is off the table, is it maybe in the kitchen getting prepared in the following way, if you raise 50 in december and go another 25 in

january, that means you could be at the end of a rate hike cycle at the beginning of january, maybe march. that's something i can see forward is the end of this very aggressive rate hike cycle, potentially in sight here early next year? >> the way i look at it. let me say where i think we're headed you know, i've been a little more on the we'll probably have to go higher side. i don't usually disclose my dots so don't get used to it. but in september i thought when i was looking at the economy, the likelihood we had to go to 5% is strong enough i wrote that down i think of that as a reasonable ending place for us before we hold somewhere between 475 and 525 seems a reasonable place to think about as we go into the next meeting so that does put it in the line of sight that we would get to a point we raise and hold i want to make one point that is

very -- isn't often talked about. when we raise and hold, over time as we're holding monetary policy is becoming tighter as inflation comes down so that's another factor we have to consider. so the discussion squarely today is in the idea of how high do we have to go and then it will turn to how long do we have to hold it >> president -- >> that's an important point morgan >> thank you, receive. i realize you're focussed on the economy here in the u.s. but the geopolitical situations that we have seen unfolding over the past year have certainly contributed to things like inflation, with that in mind, the conflict playing out on the ground in ukraine right now, if we were, i realize we did see this missile that hit poland yesterday and kind of speaks to a ratcheting up of the barrage of russian missile strikes in ukraine, but if we were to see

an actual end to that conflict in sight because we know the u.s. and our allies have been signaling the possibilities of peace negotiations, we'll see, how would that change this entire conversation and the inflation picture? >> so you know, energy inflation and food inflation is an important part of overall inflation. the thing that consumers have been struggling with a lot but it's not the whole picture in the united states much more part of the picture in the european countries in the united states we have core inflation that is troublingly high so that means we get some relief should the conflict end. it's a tragic war so hopefully the conflict does end soon i'm not thinking that would be the magic bullet that brings inflation down we have work still to do at the federal reserve because we have demand outstripping supply even in core services and in core goods. that's where my focus is you said our levers are for the domestic economy, that's our

mandate and job but we have to focus on global conditions because in either any case they're head winds, tailwinds or neutral. right now the global economy is a headwind against u.s. growth we have to be thought of that not only in the inflation front but also in the growth front. >> president daly, i want to make sure that somewhere between the time that the words left your lips, came to my ear that i heard you correctly. did you say a range of 475 to 5.5 somewhere -- >> 5.25. >> thank you very much pnchts think of 475 to 525 seems like a reasonable range my own view today with the caveats that tomorrow and new data and things change that is that 5 seems like a reasonable starting point that's what i wrote down in september and i still think that's a reasonable place. i'm data dependent and laser

focussed on the lags in monetary policy and how much tightening we have in the system and we have to wait for that to play out a bit while we stay -- i have this phrase i'm using now because i think it's important we have to be resolute to get the economy back in balance, fight inflation and be mindful of the factors affecting what restrictive looks like if we're not doing that, we're going to over or under tighten and either one would be a costly error. >> let's talk about the lags i'm guessing you may have heard professor jeremy segal talk about the lags he said you're on the verge of making a mistake because rents are already coming down, he looks at monetary aggregates and said those are declining sharply. are you missing signals out there, rather than looking at cpi that tells you inflation is coming down? >> the point is really this one -- i think you raised an important issue. we can't look at backward looking data

the published headline data gets all the play but the forward looking data are really the leading indicators. we have many leading indicators that are published look at the labor market, vacancies, quits, hiring by small firms, how confident businesses are they'll hire in the future but we also look at new leases and one of the pieces of information i spend a lot of time looking at, what are new leases on rental properties coming in at are they lower or on average the same as existing rents they're coming down. that's a sign that the housing market slowing is playing out the way we thought it would. we have a ways to go before shelter price in general comes down so absolutely i factor that in you're using generators to reflect your overall inflection. i expect it to come down next year you're right, leading indicators matter i don't know how many of your

listeners know, reserve bank presidents like myself we spend a lot of time in our communities talking to business leaders, community leaders, workers as i said why do we do that? because we want to understand what they're doing they put real money on the table each day looking forward so we're looking at their indicators, not just the backward ones to see where the economy is headed. right now what i hear is the economy still has momentum, they still worry that inflation is going to continue to rise. and they really want us to restore price stability and do it as gently as we can so we don't go from one bad problem to another. >> president daly, i want to finish up with a two-part question here. i think they're related. how much slack do you need to see in the labor market to make you comfortable that inflation is, indeed, going to be -- get some relief from that aspect of the economy? and then second, what is your outlook for a recession? is there still a possibility of

a soft landing >> so let me start with the labor market the way i think about it is, how do we -- what kind of slowing in the labor market do we need to bring wage growth back in line with longer run productivity and our 2% inflation goal. right now i'm thinking between 4.5 and 5% would be consistent with those numbers that would mean there's jobs for people but you have to search lodger to get them that's still a reasonable labor market to have the natural rate of unemployment people put at 4%, some people higher 4.2 but still within a stone's throw of that level when we're not trying to fight back high inflation on the r word which everybody wants to talk about. i want to broaden the conversation for a moment and say monetary policy works by slowing the economy. that's how we restore price stability. right now i'm 100% determined to

do that as effectively and gently as we can history is on our side if you look at allen blinder's work, he said a gentle adjustment that does slow the labor market, growth, does result in a couple quarters of negative gdp growth that is still in his characterization, a pretty smooth landing people tend to think of the last recession we had as their worst case scenario, frankly we did have a worse case scenario in the financial crisis but we're tightening into a strong economy and i'm still optimistic we can bring it down so americans don't feel we solved one bad problem and put them in a worse one. that's where i'm focused i still have a lot of confidence we can achieve that. >> president daly, thank you for your time and the answers to these questions. thanks very much. >> thank you my pleasure. carl, back to you.

her answers were great. >> appreciate it very much, steve liesman. a look at the rest of the hour we seal have more on target and retail earnings overall and discuss how you may want to approach that sector >> and then, nasa's new moon rocket blasting off. we have a lot more on that that's a $4.1 billion test flight based on some estimates that's coming up next on squawk on the street.

welcome back to "squawk on the street" retail remains in focus on the heels of home depot and walmart earnings target plummeting on a miss. shares falling double digits lowe's popping higher after a top and bottom line beat greg, great to have you on i want to start with target which is just having such a dramatic drop today. it looks like you actually published a negative tactical trading call ahead of this report walk me through why you're probably not surprised by the results we got today >> i think for target it's basically been a mix of inventory. they've had a lot of inventory, growing faster than sales and they didn't make enough progress getting through that and now the consumer is getting

softer in a lot of those discretionary cat govegorcategos so that's what we learned today. inventories are high and they lowered their fourth quarter guidance as a result >> what did you think of lowe's? >> i think lowe's continues to execute well in a decelerating but slowly decelerating home improvement rate so retail sales will decelerate into the fourth quarter. home improvement down to 1%, retail sales to 3% next year lowe's is doing a good job holding share, gaining share the issue is there's still traffic running down five but kudos to them, they executed well >> so, looking across the different retail earnings that we have had so far, what is your

takeaway, i guess, on the state of not only inventories but the consumer, the role that inflation is playing, and where it put positions for this holiday season >> so for holiday we think retail sales will decelerate to 5% growth year on year from what's been running over 7% year to date. so in that deceleration, we're most concerned about areas where inventory is high, that generally is about 20, 25% of retail that's general merchandise, think electronics, sporting goods, you know, think of other parts of apparel. it's those areas where we think the biggest risk is. and that's why, frankly, if we look at our top five we've gone more defensive with ho'reilly automotive therefore companies can pass through the pricing and cost pressures. we like dollar general which we think has positive traffic for the defensive tradedown consumers. and sherwin-williams and home

depot to us seems to be good for us we don't think there's anything falling off a cliff in home improvement demand. >> we had a discussion about theft early this morning certainly target is not the only victim but do people talk about potential solutions that don't then drivaway shoppers because it becomes too inconvenient to shop >> it's a great question target called out $400 million hit this year. lowe's has h a hit it's a problem that is, as long as we frankly aren't prosecuting people for shoplifting in our largest shapes you're tying it in with organized crime reselling the hot goods via the internet so there could be some building pressure to say what can we do to solve this? we can't raise prices on all

consumers to make up from the shrink hits and loss from this crime. >> greg, you've kind of addressed this but more pointed. is target's miss really target specific or is it reflective of overall weakness headed into the holiday season that all retail investors should be mindful of. >> to give target credit where it's due, they have continued to grow traffic their three year comp growth is still beating the industry and gaining share. they made it worse for themselves this year by really applying too aggressively they continue to comp and therefore they bought too much inventory that was the own goal part of it i think they were sort of set up to have a deceleration that they misplanned and now they're going through several quarters of pain to clear that out. i give target credit for gaining share, taking care of the customer but given the inventory build they had earlier in the year

which was why we had the negative call last week, that's the own goal part of it. >> greg, thanks for joining us today. >> thank you still to come, a lot more on nasa's historic artemis mission nearly on $100 billion is projected to be spent in this effort to get american boots back on the moon stay with us

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more than a decade in the making, at 1:47 a.m. eastern time, this morning, nasa's megamoon rocket blasted off from kennedy space center >> two, one. boosters and ignition. and liftoff of artemis i we rise together back to the moon and beyond. >> the historic launch ushering in a new era of american space exploration kicking off the space mission 50 years after the

final apollo moon landing. these are the first images of earth from the deep space capsule orion which was carried to space by the sls, which is now the most powerful rocket flown. this morning, nasa administrator bill nelson grading the mission so far with an a-plus. >> this is just the test flight. and we are stressing it and testing it in ways that we will not do to a rocket that has a human crew on it but that's the purpose to make it as safe as possible, as reliable as possible for when our astronauts crawl on board and go back to the moon. >> orion will now spend 25 days traveling around the moon before splashing down in the pacific

ocean. you can see the complicated flight path right there. with the first astronauts expected to climb aboard in 2024 and an actual lunar landing come 2025 so many companies are involved in this mission. and the artemis program overall. including boeing, lockheed martin, northrop grumman, aeroset rocketdyne as pro cure space, notes what artemis does is forge a path to a safe and tested presence at the moon think about a lunar economy, which is likely to spur more private sector as well which for example commercial space stations the which we've seen already in low earth orbit. it could be applied to things like lunar orbit as well >> yeah.

morgan, you mentioned spacex, it's worth mentioning as well, reports of a new funding raising the valuation there to $150 billion what exactly is their role here? >> it is my understanding that those reports are actually not accurate and we'll see what happens with that elon musk took to twitter as well to bat down the initial reporting by bloomberg calling it, i believe, false on twitter. >> okay. good to know. >> yeah. but spacex for what it's worth did get a word in a second contract, a follow on contract as part of the artemis program just yesterday because it is developing its mega rocket and capsule combination called starship as the lunar lander portion of the artemis program so they were just awarded a second contract on that and are one of many contractors that are involved in this process

and kind of speaks to this evolving commercial space sector as we see more of the types of public/private partnerships take root >> pretty fascinating and quite a video from last night, morgan. let's get a news update with bertha coombs. >> your cnbc news update, michael flynn has been order to testify in the georgia probe into election infeerns by donald trump interference by donald trump and his allies the investigation led by the fulton county district attorney continues to hang over the former president, who announced his third run for the white house last night actor kevin spacey is facing seven sexual offense allegations in the united kingdom. british authorities say the charges relate to a number of

alleged offenses to have taken place between 2001 and 2004. spacey has plead not guilty. intelligence officials say that russia's spy capabilities have been limited since their invasion of ukraine. the director general of mi-5 said at least 400 russian spies have been expelled across europe, including nearly two dozen in the uk. and morgan, back to you. i have to tell you, lunar, that word is going to ring in my ears all day. i love it. >> it is a funky orbit thank you. speaking of russia, an update on a geopolitical event that we continue to monitor, prelimina preliminary analysis showing a missile strike that hit in poland yesterday was likely fired from an air defense missile fired against russian missile attacks.

ukraine said it saw yesterday the biggest barrage of strikes by russia so far in the nine-month war the nato secretary general saying let me be clear, this is not ukraine's fault. russia bears ultimate responsibility as it continues its illegal war against ukraine. they will not invoke article iv which provides for consultations among allies in the face of a threat you recall yesterday the initial reports had indicated it was a russian missile that hit poland. that sent the market here in the u.s. lower initially on those headlines in the early afternoon, before we saw some recovery there we'll continue to monitor the situation and any new developments and we will bring you the latest david? >> after the break we're going to have the latest on the continued fallout from the collapse of ftx, the ceo of u nto arhaheadghing in yowa the wt h to say. "squawk on the street" is right back and want to make the right moves fast...

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welcome back to "squawk on the street." we continue to follow the latest with the ftx collapse. in fact, the house financial services committee has now announced just in this hour that it will hold a hearing in december on that collapse of ftx. saying it expects to hear from the founder, sam bankman-fried, alameda research, binance, who knows a lot of others. kate rooney joins us now to bring us up to take. >> reporter: the latest fallout this morning we're getting news from one of the biggest lenders in the space genesis saying it's pausing new loan organize nations and redemptredemptions. saying the custody business remains operational. and with regard to lending the number one priority is to serve clients and preserve assets. they have taken a difficult decision to suspendredemptions

this is a major player in the space. they have about $2.8 billion in total active loans and genesis is also a major source of liquidity in this market it comes as another big lender block five paused withdrawals in the past week or so due to its exposure to ftx. all of this could have a price impact at least on bitcoin analysts have been worried about what it means on liquidity sam bankman-fried's research is closing. alameda was one of the biggest market makers in the space in addition to genesis. we have seen a significant drop in bitcoin market depth across exchanges. the markets tend to mean more volatility if the markets can't absorb the larger order and trades without impacting prices. bitcoin prices are down today as well and hearing from sam bankman-fried in a series of tweets overnight he said his goal was to make

customers whole. he says maybe i'll fail. i've failed before, but all i can do is try. and then tweeted some financials says the company has about $9 billion of liquidity assets questions of what that means considering where prices have gone in the past month or so back to you. >> he continues to be unaware, i think, that he's potentially criminally in big trouble, doesn't he i just can't -- i keep coming back to his willingness to comm communicate. one of so many parts of this. >> we're getting the tweet, it's a slow trickle of information and some of this, this is real financial information that he's at least presenting it that way. so you wonder what the legal implications are you wonder why he's allowed to comment in this way. we have heard from him consistently so it's interesting that's our direct line to what he's thinking on all of this. he also said the journal is

reporting but we've also confirmed with a report that he is indeed looking to raise money still at this point. bankruptcy is imminent, dealing with it right now, getting some of the filings in the past week or so but he's still looking for the hail mary option to raise money that he has framed as a way to protect customer assets but a lot of new tweets every hour or so. >> and yet bitcoin has been unable to break below the november low despite fresh news kate rooney, thank you coming up on "techcheck" we'll talk to arvind krishna, and also more on the retail earnings and the read through for the rest of ecommerce as the eainrngs continue to come through next week. "techcheck" begins in just about 15 minutes

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course, across the technology industry how is the corporate real es staet market reacting right now? joining us is the chairman and ceo of rxr, it's every two weeks that keep you guys busy. good to see you. it's been a while. let's start with occupancy, something we've talked about for quite some time. work from home being a key driver now it's layoffs. >> we have seen people come back to work so a big uptick after labor day, not to where we were in our peak days, maybe 70, 75% the norm 50%, clearly hybrid work is a place people are at. the economy shifted, the tug of war between the c suite and employees moved to the c suite saying we need everyone back at work, all hands on deck, focus on driving our business. and the employees' perspective, they want face time, the ability to be part of the team and continue to grow with the

company. >> that's the reason people may be coming back at the same time if you're laying people off you may not have a need for quite as much space. are you seeing any impact from the layoffs we're starting to hear about particularly from the technology side >> it's interesting. the first three quarters of this year, exceeded last year by 20%. but then, i would say, when we saw the hiccup in the uk, things pulled back a little bit, almost like a pause i think everyone is pausing to see what's happening with the economy, is there another financial shock? how long does it take for people to calibrate to the new interest rate regime. people are waiting it out. my guess until we get into the beginning of next year we'll see much less activity. >> give me a sense of your view of the activity, particularly part of the new york fed's board. >> the fed has made it clear they're going to slow down the economy and do what they have to do to fight inflation.

and there is a lag between interest rates rising and the impact on economy. i think of it as the bpig and th snake. the higher and longer they last, the more it's going to be by the time it gets into the real economy and harder to digest i think ait a's choppy 12 do 18 months as we go through that process. but on the other side of that i see a strong economy. >> when is the other side? >> i think it's 12 to 18 months. you talk about this, too. >> of course. >> think about the level of investment in decarbonization, the digitization going on. the deglobalization. the lack of housing built and the need to build more housing so there's a tremendous amount of growth potential probably more than we've seen as a country post world war two so we have this cycle we have to work through it's not a surprise. we flooded the economy with liquidity, the tech companies grew thinking the surge in demand was going to last now they're pulling back

you said this morning with retail, excess inventories everyone has to get through. so we have to get the underbrushed cleared but once it's cleared we should have a stronger foundation. >> how do you think of it, as a key developer of developer for e are you willing to put capital to work now. many of the buildings may never be back to 75% occupancy. >> you have to be very focused and thematic on your investing where are the buildings and product types that are going to have the demand drafrs on the other side of covid that will do well office buildings, that's limited to the trophy buildings, the class a buildings, the ones well-located bringing people back and engaging multi-family, there's still such a high level of demand the housing market being in the state it's in has put more people renting versus buying

homes because they can't afford to buy homes health care, logistics. >> what about capital formation in the market? what about the ability to find the financing given rates have changed dramatically >> there's been a real dislocation in the capital markets. the last three months which has seen a significant pull back but that also creates opportunity. during covid in 2020-'21, we bought as people were fleeing the city today we're lending to people that are buying high quality multi-family buildings but can't get the financing. the same in investing in office buildings. they don't have the capital. you need to be strategic and what's going to be competitive in the post covid world. >> my colleague morgan has a question for you >> i do. scott, you mentioned

multi-family dallas fed came out with a study saying that the u.s. house prices could drop as much as 20% on u.s. surging rates. what would that correction look like in the new york area? >> there has been a lack of supply around the country. there needs to be 5.5 million units that need to be built to get us back to equilibrium where interest rates have gone up, the same priced home costs 50% more for someone to service that mortgage. i think there's a perverse by-product that is getting people back to the rental market economic uncertainty makes it even more challenging for people to buy homes versus rent. >> scott, real quick we're running out of time. you did raise 200 million for view, glass on the side of buildings. why are you doing a deal like that

>> dynamic glass thinking about decarbonization 75% of the electric used in the u.s. comes from buildings. we're trying to think of office buildings, hospitals, airports, how do we reduce the use of that view dynamic glass can reduce energy consumption by 30 or 40%. >> all right scott, always good to get an update thanks for coming down. >> thank you >> "squawk on the street" is back right after this. actively managing investments in the world's public and private markets. outscale, with the resources to serve 1,500 clients in 52 countries. and outlast, with long-term conviction that looks beyond today's volatility. join the pursuit of outperformance at pgim. the investment management business of prudential.

welcome back to "squawk on the street." let's get a look at vaneck it's down more than 25% year to date it has been rebounding in general over the last month. it's up 30% over that time period today credit suisse laying out some topics for the short term analysts say micron, qualcomm, skyworks and global foundries have time. if you have a longer term time line, get into amd, nvidia and

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we're at session lows for

the major averages right now you can see the s&p is down .8 of 1%. the nasdaq is down 1.6%. the dow is down fractionally retail earnings, a big piece of the puzzle with advance auto parts leading the declines for the s&p. we're going to be speaking to advance auto parts on "power lunch. that's going to do it for "squawk on the street. tech check starts now. >> good wednesday morning, welcome to tech check. we're live from rbc's global technology conference. nasdaq erasing the gains as they continue to grow into make or break holiday season more on the key tech names at risk this hour plus, a look at the street's top ecommerce names amid the volatility why it's no longer anyone wins and do not miss with