good morning stocks up to slight gains and officials signal the rate hiking is far from over twitter facing a wave of resignation after elon musk's ultimatum for a hard core work environment. it shuts the offices until monday. and ticketmaster cancelling the general public sale of taylor swift tickets now more lawmakers are calling for a probe into the company this is friday, november 18th, 2022 let me emphasize it is friday "squawk box" begins right now. good morning welcome to "squawk box" here on

cnbc we're live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. as joe said, it is fri-yay you will see the dow futures up 160 points s&p futures up 27. nasdaq up 101. this comes after a down day for the markets. not by much. we were looking at significant declines in the futures yesterday morning. by the end of the session, the dow was down eight points. for the week to date, dow d down .60 s&p and nasdaq saw losses. for the week, s&p off 1% nasdaq off 1.6%. if you are watching treasury yields, higher this morning. not where we had been in the last week and a half the 10-year treasury below 3.8%. the 2-year treasury at 4.478%. we have a political update nancy pelosi announcing she will not seek re-election or

congressional leadership role. that ends the two decade streak as the top house emocrat the first woman to lead the chamber. pelosi will remain a member of congress and serve out the term to which she was just elected. house majority leader steny hoyer will not seek a top role he throws support behind jeffries to be the democratic leader in the house. kevin mccarthy is the frontrunner to become the speaker when his party takes control of congress. the biden administration declared yesterday the office held by the crown prince mbs should shield him from the role of the killing of jamal khashoggi. his fiancee sued the crown prince over the roles in the killing. the recommendation to the court was based on precedent and called it purely a legal

determination. it is a turn around from the president biden campaign trail and denouncing of mbs. president biden has sought to ease tensions with the kingdom as the u.s. works to lower oil prices with saudi arabia not as low as they want. >> i read that it was weird the state democrats are blaming the mayor for the state losses he validated the crime did you see this it's very strange. i thought this was strange they called it fear-mongering tactics that swung suburbanites. he will be minority leader

pretty good for new york and everything else. i thought that was an odd take did you? >> i don't understand it at all. mayor adams said it wasn't an issue with crime in the city >> he got on board i don't get it he definitely was at odds with the governor before. there was a risk >> when she said -- did yousee the people are talking about zeldin being speaker >> i thought that was a different leadership position. >> i heard you don't need to be a current member to be speaker, believe it or not. >> i didn't know that. >> strange. >> there were other leadership positions. this may be payback for adams not on board and hochul. >> weird blaming the mayor of new york

city for losses in the state legislature. twitter suffered a wave of departures after dozens rejected the ultimatum to commit to a hard core work environment musk sent an email on wednesday expecting long work hours at high intensity one engineer said resignations hit the important parts of the company and musk advisers held meetings with workers who they deemed critical to stop them from leaving after the deadline passed, twitter emailed employees saying they would temporarily close office buildings and ban badge access the office will reopen on monday musk did not address the resignations, but how do you make a small fortune in social media?

he tweeted twitter hit an all-time high in usage he had other tweets that said we're losing some, but not losing the important people. i saw david portnoy. >> bar stool >> he said correct me if i'm wrong. isn't it up and running? it works do you need people to maintain it >> there is the decree from the ftc you have to follow you could get in legal trouble that is the one thing i watch elon and wonder. he is wound up in depositions and in court and that wastes a lot of time for a guy working so hard on so many projects elizabeth warren and others saying they are concerned about this and want the ftc to look into it. if they are not following the ftc decree, that is more headaches. >> some people said this is possible some say this is political retribution. this is the reality of

approaching the businesslike this and/or poke a lot of bears. >> that is what i said to joe the other day. if there is an issue, he is stretched too thin and has too many things going on last thing he wants to do is sit in more depositions and getting called before congress or anything else that goes through it you can have all of the money in the world, but if you can't control your time with the headache legal things, that seems why go down that path. there has to be an easier way. >> to be able to tweet how do you make a small fortune and invest a large for tour? fortune? >> he is right he works 120 hours a week. he was saying. he is stretched thin he said in a deposition this week in delaware court, he was called in for something about compensation he doesn't want to be the ceo. he would be happy to step out of it it is a lot of demand on his time he is a guy who works hard

you can't help but these are unforced errors that cost him more time. he has lots of money, but time is the element that any of the guys would love to have more of. >> he has so much money, he could sit in the front row at the taylor swift concert >> $21,000 >> $35,000. >> that's how much -- >> i haven't been on stubhub >> the update on the taylor swift. live nation ticketmaster canceled the general sale ticket for today. it cited high demand and insufficient inventory to meet demand greg weighed in on this issue in the interview with david faber live nation's biggest shareholder. >> first, the live nation team is sympathetic and long wait times and fans could not get what they wanted

reality, it is the function of the demand taylor swift has. the site was supposed to be opened for 1.5 million verified taylor swift fans. we had 14 million people hit the site including bots, which are not supposed to be there despite the challenges and breakdowns, we sold over 2 million tickets that day we could have filled 900 stadiums. >> he said the fact that taylor swift hasn't been on the road for three or four years was a factor in driving up demand. he said the bots going in for ticket scalpers was an issue he said this is also met with calls from washington to look into ticketmaster and whether or not there is a monopoly on this. this was unprecedented demand. >> we haven't gone to many concerts in the last couple years. >> this is a concert that kids would like to see.

>> and it is taylor swift. >> it is before the holidays what do you get your kids before the holidays >> pent-up demand for concerts in general >> right >> then she hasn't toured in a while. >> 14 million people and bots waiting to hit the site. >> she could probably go to each venue and do a couple of weeks at each one. >> he said enough for 900 stadiums think of that. >> think of harry styles in new york 14 concerts announced. then 14 more and 12 more in l.a. >> he only made half >> i didn't make any i wanted >> you did >> absolutely. absolutely >> for the kids? >> no. for me you know -- >> i gave you an out. >> no out. i wantstyles >> right >> what are you talking about?

>> i don't know any of his songs. >> i actually like his performance in movies. i don't know his songs. >> what is weird is when some of the people and tim mcgraw or somebody like that i tried to act maybe i would be better because i'm not scared of the camera it is hard to do a natural scene and you see a crappy low budget movie and you see actors real actors are pretty good at their craft. they do overplay that thing and think they're artists. >> you are gjealous. >> my emotional instrument is clogged. coming up, futures right now. >> i think you unclogged it over the years. >> maybe we'll talk strategy next and later, despite signs of cooling inflation, fed officials reiterating the commitment to raising rates. we talk to former vice chair

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welcome back to "squawk box. palo alto shares rising. this is a cybersecurity company

which raised forecast for the full year. stohares of ross stores bea estimates. the company faces a very promotional holiday selling season and inflation dary headwinds. >> go back to the ross of the 18th century someone named fried said your brother screwed. he said i'm not related. it could be a couple hundred years ago. who knows? same with you. >> actually. >> you don't have money from the ross stores. >> wrong side of the family. >> joining us for a check on the markets is catherine rooney.

you said in the past, it is amazing that the average time between the last hike and first cut -- they always seem to go too far and find themselves reversing. it is quicker to reverse a cutting cycle. we stay a zero forever on the way back up, they overshoot and have to make up for that >> if you look at the past 14 months, you see cycles, joe, that is the case my point here is the fed can reverse course quicker than the market is expecting. it is because we're in recession next year and the neighbor which is the rate of unemployment is higher than historically we are probably going to get an unemployment rate that moves

from 3.5% a month ago and now 3.7% probably hit 5% next year. it could be higher 6% or 7% by the end of next year, if we are in recession with the unemployment rate with shedding of millions of jobs, the fed could move quickly, history tells us, and starts to cut rates. the factor we have to consider is the balance sheet that comes into play as well >> your terminal projection is 5% that is after what we heard yesterday from bullard and others >> yeah, but probablyat least 5% inflation is sticky. >> 7 is possible i would say that, too. he could have said 12. you can say whatever you want. >> true. >> if you are uncomfortable with the recent rebound in the market and see retail sales numbers

that are strong, the coincidence economic data may not be as relevant they may see financial assets doing really well. they want to nip that in the bud. they can point to some of the strong economic numbers with friday's unemployment numbers. they can point to those and go higher i'm not sure there's a lag effect. >> there is a lag effect 6 to 12 months is the lag. by mid of next year, we will feel the effects of the fed tightening cycle which has been aggressive if you look at economic models, if you look at the curve, these models give us input if you were to look at the taylor rule, joe, we should be at 77.75% at least

the fed knows and they are not articulating this. they have to force recession to get the unemployment rate up and curb demand of inflation which is the most pernicious and the one that causes wage price spiral that is the situation we're currently in demand for labor is forcing salaries higher and forcing the cost of goods and services higher and a result. >> you see even in the uk now. tax hikes and spending cuts because eof all of the stumimuls in the pandemic. it is a microcosm of the same thing. everybody did the same thing it might have been wrong we were on board with a lot of these ill conceived in hindsight or maybe we stayed too long. >> yes >> you know, as far as labor

goes, that's where you think the problem is not in shelter and not in raw goods and not in commodities tho those are the things that might correct themselves, theoretically. housing is already correcting. you don't need to do much more to that. you don't need to do much more to commodities labor is where they need to slow demand overall >> i think so. the supply side forces will correct itself it is supply chain distortion and oil. shelter cost has a six-month lag. with housing prices and housing prices which collapsed we could move close to the target we could be at 2.5% in core pc by end of next year. especially with the rollover in the demand side. that is why i think fixed income

especially longer duration pape is a really interesting bet going into 2023. >> all right ka kat kathryn rooney vera >> come on, joe. >> i do say it i wanted to see if becky could >> he wants to know if i'm paying attention. >> we're all careful when we say it. >> you have to be careful. >> bultik. you have to be careful >> thanks, kathryn have a wonderful weekend when we come back, visa announcing a plan for kelly. and later today, sentencin .

"squawk box" will be right back.

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visa has named ryan mcinerney replacing hall kelly who is stepping down january 1st. he has been overseeing the merchants. he previously worked for jpmorgan chase kelly will become the vice chairman >> good guy. i have known ryan since jpmorgan chase. solid choice. coming up, not done hiking yet? that's the message from fed

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good morning welcome back to "squawk box. we are live from the nasdaq market site in times square. it is friday morning so far people are feeling good about things dow futures up 142 points. nasdaq up by 95. meantime, i want to give you the latest comments from fed officials. yesterday, we heard from st. louis fed president jim bullard. he said the latest hikes have had a limit the effect on

inflation. and esther george said it will be hard to bring down inflation. we have former fed vice chair and tiaa ceo and cnbc contributor is roger ferguson. people get excited about the pivot coming and you hear the comments and you hear maybe not. what should we take away >> i agree i agree with you completely. i think almost every time i have come on, we talked about a consistent message from the fed. equity markets in particular getting ahead oft to note is one slightly bad inflation reading is not consistent with the clear and convincing evidence that inflation is under control secondly, even

measure that we saw was somewhat better, it still starts with a 7. that is a long way from a 2 that the fed is talking about the third point that was already made is there is a long way to go because the labor market, which is where they are most focused, is still out of balance. they are hoping to be able to achieve a soft landing you are hearing more talk of pain and recently one fed president talking about the possible aility of recession they have been consistent and markets are overly optimistic. >> we had barry sternlicht on yesterday. he made the case and for people watching the lag in terms of the data, to him, suggests things are weaker expected to be much weaker than perhaps fully appreciated and washington is missing the boat

>> i think let me agree with the fact that monetary policy works in long and variable lags. i think everyone understands that the flip side of the sternlicht story is the wage expectation and spiral beginning to pick up you heard that from one of the fed presidents the other day yes, it is true that there are elements of weakness in housing most particular. it is also true on the other side that one of the forces driving this inflation continues to be stubbornly out of balance. that is the labor market that is the tale of two cities the fed is trying to deal with >> roger, is the fed sort of in on the possible game of using language or words to maybe

accomplish some of their eventual goals by that i mean 7%. maybe it's possible. maybe inflation stay there is high and we fled to get there. it is certainly effective to say 7 just to bring everyone back to earth. you don't necessarily have to go to 7 do they know that? when you were there and would be in the meetings, did someone say, jim, if you want to go out and say the market is ahead of itself we may go a bit higher than 5. do they do that or know to do that because it is an ffn effec and smart way to do that without getting there? >> three reactions to that first, there's no sort of secret internal agreement that one person says one thing and the next one says something else each policymaker speaks for him or herself

>> they never wink >> that only happens in movies and on set the fed doesn't do winking or nodding. more seriously, two things are going on here. first, i think there is a need to communicate clearly about their plans and expectations particularly when the market doesn't seem to be listening to it closely i think there is certainly an element of let me try to be clear about think thinking part of what you heard from president bullard was also model driven there are models with the level of inflation we see now that might suggest a fed funds rate getting to 7. i think that is highly possible, but not impossible i think what you heard from esther george, we are likely to get into recession because of the tightening cycle and large

part they also know at some point and you heard chair powell say this. they will not just step down, but they will stop and see exactly the impact they've had with the long and variable lags. a number of things going on simultaneously winking and nodding is not one, but trying to be clear with the expectations of getting the market in line with the fed which is a legitimate thing for them to do >> they want to get in line with the current thinking is the data pointing to not go to those levels and maybe we don't need to? >> i think there is absolutely a chance, becky, that inflation may break for sure certainly we're seeing inflation interest sensitive sectors starting to slow the other things to recognize ra around inflation is external

shocks might break there are way. they are trying to focus on labor markets to get back in greater balance. that will over time reduce demand this might move more quickly, but i wouldn't bet on it >> and back to joe's question. is that in the back of their minds if they can tell people and clearly telegraph what they are thinking that it might help their case or cause because they don't want to see things taking off again? >> i think that's a fair point you heard chair powell talk about the mindset around how interest rates work and the first step is what k'scalled financial conditions every time the market gets ahead of itself, that is a loosening of the financial conditions. they are trying to tighten financial conditions if the market understands what they're trying to do and respects it, so to speak, you end up with a tightening

financial conditions which looks like equity valuations that are lower. looks like long-term interest rates higher that feeds into the slowing of the economy and perhaps they have to do less. until those financial conditions remain tight, they clearly have work to do in terms of communication as well as actually validating communication in the upcoming meetings >> so it is kind of, you know, the market will look at it later as a wink and a nod if things change it is all part of the -- >> semantics winking and nodding. >> if the market doesn't cooperate, it is like don't make me hit you again. >> the reason i resist winking and nodding is i think this is a very serious activity of communication. >> i know. i know >> i understand. you've got to keep viewers you know, i'll let you stick with wink and nod. i'll be the serious economist

over here sdpl >> i think it is legit if the market believes them and the reality is it is a science experiment we are dealing with here and following the market and how market participants behave will, in fact, affect the end result >> absolutely. a feedback loop here a lot of uncertainty the inflation moves quickly. with any luck, supply chains will even out quickly. global geopolitics may play in favor the slowing prices so, there's a risk that they say one thing and end up doing something less some people in the market think it was a big charade a big interpretation is uncertainty and they are inching along as best they can they started late.

they are moving quickly. >> we know what goes on at the fed on friday afternoon. people let their hair down and lamp shades go on the head alcohol is flowing >> joe is clearly projecting here >> i think you are suggesting -- >> they are under a lot of pressure you have to let that out somehow. all right. >> joe, it is not like the pressure of being on tv every morning and starting at 6:00 i imagine by noon, maybe one of you may be touching a little bit of alcohol >> somewhere >> i can see you loosening the ties up. >> we're trying this morning >> andrew. >> i was struggling with my tie this morning roger, we appreciate seeing you and getting your wisdom on all things fed and the economy and even just what it is like to deal with the pressures of a friday >> kashkari. he's a wild man. whoa >> thanks. coming up.

>> we're joking. >> joking. retailer gap returned to profitability in the recent quarter. we will tell you what the company said about the expectations for the holidays next. and later, we talk to louisiana senator bill cassidy on everything from the midterms to the fed and inflation reminder, you can watch or listen to us live anytime on the cnbc app we're coming right back.

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welcome back u.s. equity futures at this hour are in the green on a friday everybody in a good mood on a friday next week is a short week as you know thanksgiving >> best holiday ever family around. you don't have to buy presents >> all around the world. people preparing for a great thanksgiving >> no, they're not it's the united states >> that's right. stocks in china. >> i should point out you are joking and i know you are joking. >> you know what i'm used to it people not understanding stuff it's not my fault. i can't help they're out there spelling loaser with two "os." and china tech stocks following

alibaba's report yesterday the ecommerce giants beat estimate but revenue fell short. the company announcedan increase in share buyback program. the ceo says they expect the numbers to improve next year jd.com reporting this morning. ecommerce firm topping estimates. more online shopping still in what we were in for a couple of years. now people are suffering people locked in doing online shopping not here shares of gap higher after the company swung to profit. revenue beat expectations. the company gave a cautious outlook for the holiday season forecasting net sales could be down mid single digits for the fourth quarter comp sales up 1% year over year. that was compared to the decline of 3.2%. gap incurred a $53 million

impairment charge to the termination of the contract with the ye brand this is a little different than people expected from the target news this week that is why the stock is up 7% that stock was down right after we heard from target earlier this week. earnings out from foot locker beating consensus estimate by 17 cents. they had $1.27 a share comparable store sales rose. they were up by 0.8% year over year the expectation had been for a drop if you look through the numbers, by the way, the stock just hit and stock up by 10%. mary dillon is the new ceo she has been there two and a half months. she said despite the tough environment, the expanding customer base was resilient. mary dillon from ulta would turn

in fantastic numbers the street is looking at her with a keen eye with what she will do. we will talk with her coming up in the next hour run you through the guidance for the full year and fourth quarter. comp store sales for the year will be down 4% to 5%and down 6% to 8% for the fourth quarter. they were talking about strong demand and issues with inventory. sales down 4% for the full year. down 8% to 10% for the quarter the big news is they are raising full year guidance they are talking about earning a non-gap number of 4.42 to 4.50 for a year that accounts for the 16 cents beat the guidance they are giving is a little above the 16 cents beat you could expect stronger than the sprtreet expecting. mary dillon will join us liater this morning. when we return, economic

data showed signs of cooling inflation last month, but is main street feeling relief we will talk to cameron mitchell after the break. you can get the best of "squawk x" in boour podcast. you can listen anytime on your favorite podcast app we'll be right back. you go. no, you go! and call audibles... double our investment in omaha! omaha! omaha! omaha! or you could use workday. omaha. the finance, hr and planning system used by over half of the fortune 500. for a be-agile-like-an-mvp world. workday. for a changing world.

the effects of inflation hitting the restaurant industry as we all know operator cameron mitchell says the cost of goods has increased by 9.5%. hourly labor is up 10% as a result, the company has increased price of 7% and

profitability is down 8% joining us right now is cameron mitchell, the founder and ceo of cameron mitchell restaurants we've been keeping up with cameron all through the pandemic as restaurants were forced to close. it's been like the book of job what's going on at this point? how are you doing? >> good morning, becky, it's a pleasure to be with you today. we head into this holiday season we really got to contrast it back against 2021. omicron hit in 2021, december, and by the middle of december we had large parties dropping and canceling left and right new year's eve which is our busiest day of the year ended up being pretty slow. we would take anything that would call this year the forecast is very strong for a holiday season. we have our large party business up almost 70% over last year which is a great sign. business lunches are back. people just want to get back together and enjoy each other's

company and celebrate the holiday season we're expecting a fairly strong finish for 2022. >> that's great news i mean, just wrap it up for how your profits look right now, how your revenue looks relative to pre-covid. let's say 2019 numbers. >> i got to say, in my 42 years in the restaurant business, this is the worst cost environment i've ever operated in. i've never seen this before. we've had to take a fairly aggressive pricing strategy. we're normally up 3.5% a year. we doubled our prices. with that said, though, we took a -- two price increases a year, one spring and one fall. and this fall price increase we took our normal price increase of 1.5% to 2%. we feel we're getting some relief a little bit on the cost of goods side. labor seems to have -- is still up by -- but has calmed down a little bit it's not rising as rapidly so from a workforce standpoint

where we are prepandemic, about 95% staffed, we do have a lot of overtime across the company right now which is adding to our cost overall, thank goodness the sales are holding and our consumer is holding. in fact, this week will be our highest revenue week in the history of the company nonholiday week. a lot of that is due to price. but we're still experiencing aggressive -- you know, good, solid traffic within our restaurants. >> so revenue at the highest levels what about your margins? >> margins are down slightly but down on a higher level of sales. so we're doing okay and i still am concerned about my independent brethren out there because the costs everywhere below sales are just, you know -- have been skyrocketing it seems now it might have plateaued. we didn't want to take any

additional price outside our normal increases because we do feel our consumer is probably at their limit in terms of tolerating a price they know we need to charge more, but, again, we're back to our normal pricing strategy, i should say, as we head into 2023 >> cameron, what happens if there's an economic downturn as a lot of people are predicting for next year? if the customer really gets pinched and stop coming in, do you eventually bring your prices down if inflation cools? how can you maneuver. >> i worked through many recessions in my history and typical recession, you know, as sales drop, so does demand -- or demand drops so does pricing. our margins are lower on sales are still holding pretty good. i am concerned what keeps me up at night is next year, if we do hit a recession, sales do start

to decline in a typical recessionary environment with these high costs, we'll see a dramatic pinch to our margins. on top of that, we have our interest costs, they're up almost 4% over -- where they were this time last year so we're concerned -- or keeping an eye on that too that's exacerbates the problem if we hit into a strong recession. >> how many restaurants do you have again, cameron? i know you're located across the country. >> we have 16 restaurants right now coast to coast. >> and is this a time when you've added restaurants are you looking to expand? are you holding on and hoping to get through? >> we're still being opportunistic. we're opening our largest -- or new flagship restaurant? las vegas in april we committed to that restaurant a year and a half ago. we have a number of other restaurants opening.

we're opening a restaurant in columbus so we're excited about that. but, you know, it's -- we're still growing. with that said, we did drop one restaurant next year and another one in '24 from our plan to just be a little more conservative as we move forward. a lot of the restaurants take a long time forward commitment we've been committed to our growth for the most part in '23 a year ago there's nothing but moving forward and executing great openings here in '23. >> it's been a pleasure. i'm glad to hear you're doing well showing us how entrepreneurs really need to adjust with the times constantly we appreciate everything and hope to see you again soon. >> thanks, becky, appreciate you and we're somewhat optimistic

for 2023 i hope it pans out. >> we do too. we got mary dillon joining us in an exclusive interview talk about some sneakerhead stuff with her "squawk box" coming right back makes trading easier. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades and stay on top of the market. thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective.

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good morning stocks are on pace to conclude their second losing week of the last three as fed officials try to dampen the enthusiasm generated by two tamer than expected inflation reports. foot locker reporting results better than expected and the stock is up sharply. the ceo will join us in her first interview since taking the helm new this morning, banning beer at world cup stadium sites just two days before sunday's kickoff. what we're going to get the details and talk betting odds. the second hour of "squawk box" begins right now ♪

good morning, welcome back to "squawk box" right here on cnbc on this friday morning. i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equity futures at this hour fri-yay, is that what we're calling it dow jones is up 150 points nasdaq up 93 points. s&p 500 up 25 points treasuries right now if you look at the ten-year, 3.805 the two-year note sitting at 4.499. closing in on 54.5. >> i'm buying crypto. >> okay. which one? >> i'd buy -- i don't know, i

have some. having some is like buying it for me >> ftt serum >> dogecoin. >> oil right now, you can buy that by the barrel wti crude. $81.21 it's come down a little bit here and crypto right now, mr. kernan needs to make some transactions -- >> could go to 12 supposedly >> on ether, 1,216 >> i forget when we were laughing at tom lee when he said it was going back to 20 when it was at 4,000 >> we should talk to tom lee now. >> we should we should. i think he's -- things ebb and flow it's had these big pullbacks

before i think they're real >> anything could app. xrp, people can make a case for that too for border transactions. >> i was just hearing people -- yeah i'm going to get myself in trouble. >> you don't like getting tweets >> i was thinking about foot locker i'm just gratified that it's -- i'm gratified it's called foot locker remember they changed it remember that? it actually is around. it's something -- this is what it should be they do innovative pigments and additives. but you know what's cool, it's the latin word for hunter. >> oh, that's pretty cool.

and guess what a feminine hunter is >> diana. >> a venatrix. >> that sounds cool. >> let's get to dom chu. it's up and down right now hunting for those? >> i've been hunting, but i haven't had so much of this kind of etymology use flowing in my head forever so we're going to start off with more earnings. you guys mentioned foot locker you have chinese e-commerce company jd.com the u.s. listed stock is up 4.5% right now in the premarket trade. just around half a million shares plus of trading volume. one of the best performers jd comes out reportedly quar quarterly profits that top

estimates. interestingly here, jd was helped by the ongoing covid lockdowns in china which ended up leading more people to use its platform to shop online. and u.s.-listed shares closed above their 200-day moving price in two years we'll see if that kind of positivity carries around into other chinese tech names applied materials. those shares are higher by just around 4.5% or so, around 4,000 shares of premarket volume this is maker of equipment that makes computer chips it posted profits that were better than expected it gave it better than quarter may be indicatin those shares up 4.5%. and we're going to end with an

analyst call shares of coinbase are down this morning. this is due in part to analysts of bank of america it was a buy the target price goes to 50 bucks. it was $77 they cited among other things a more uncertain outlook given the recent collapse of ftx analysts feel confident that coinbase is not another ftx but it doesn't make them immune from the broader fallout. coinbase shares were negative. now they're up one quarter of a% we we'll keep an eye on those. >> everything we talk about affects crypto, obviously, especially when this tightening cycle were to either slow down or end because as long as we're doing that, risk sets seem susceptible to any hot growth

numbers. >> can i -- i think you're absolutely right, joe. i think it's going to be one of those things where that dynamic plays out. i want to ask one more thing, becky talked about it before in the tease to this particular hour she mentioned that they're not going to sell beer at world cup events would you go to any supporting event in person if you were not allowed to even have the option of having a libation >> can you bring up one of those flasks i don't have one of those. >> not a good idea -- what happens -- >> i'm not going to a basketball game with a flask. if i was going to go to metlife, msg, if i had to fight the crowds to -- >> it's nice to have a beer. >> i hear 'ya. >> i like beer >> i'm not going to my

daughter's -- >> we have to be clear on that we don't want to sound like -- >> i'm not going to my kid's basketball games completely blasted, but i would like to go to metlife and have a drink. >> stop somewhere before you get there, tom >> you didn't know we were going to turn this on you. >> i'm open to it. i opened the door. i will walk through it >> okay. >> i hear you when i saw that. >> we're going to talk markets right now. chief investment strategist at i-capital. good morning to you. we've been talking about -- i don't know if it's -- it seems like it's been a head fake for me -- not for me but it seems like it's been a head fake for the equity markets. you have all of these cross currents of news over the past two weeks and everybody is -- and you heard roger ferguson the last hour. he said the fed is doing what it's going to do and we've said that the other time and the

equity market doesn't seem to want to believe it. >> first of all, it's nice to have seen some stability in the equity markets we've been able to hold on to this 10% rally i think we can still build upon the rally that we had because to your point, the markets are starting to believe the fed and i think this next phase of fed policy which is still continuing to hike, getting to 5%, but getting there at this slower pace, i think that's well digested by the markets. inflation is coming down we're not going to call for peak inflation because we've done that over and over again and been wrong but that inflation print, that doesn't actually change fed policy what fed really wants to see now is the labor market to show signs of weakness. if it does, then what i think the markets will start to sniff out is the end of the tightening cycle. again, the reason i think we can digest that policy is push hire is because it is priced in

they're pricing in 5% by sometime next year if labor market weakness appears, we'll jump to conclusions and we might be nearing the end of this tightening cycle. >> from here on out through the end of the year, if you were to start -- if we had this conversation about what it looks like a year from now, what do you think the opportunity is for the market >> so, first of all, near term, i think if we do continue to build on this rally, i would sort of think about it as a gift to investor, one that you probably want to cash in and not hold on to near term, you want to be selling the rallies as we get towards 4,000, 4100. i think that's the near term resistance level you want to sell things that aren't going to work well even a year for now the things i would put into that category, some of the big tech names which as you know, they've not -- they've not kept pace

with the market. maybe it's companies that relied heavily on valuation expansion again, i don't think it's going to be an environment of massive multiple expansion going forward. the things you want to buy, especially as the s&p dips, let's say, to 3600, you want to buy things that can compete with a cash yield that's 4 or 5% and to me, those are dividend-paying stocks, some of them which are paying dividends of 4% i would put energy in that category you want to have the portfolio of dividend buyers and some tech companies that do have cash flow and is they're not pandemic plays and they're not broken leaders. that's how i would approach it for the next year. >> how do you think about how folks are going to think about tax losses and tax harvesting come december and how that may affect buying and selling going into christmas

>> yeah, i mean, mutual funds have done this already i think that's actually a nice thing that's behind us there's not this way of tax selling that has to happen for mutual funds for individuals, i think it's going to be about balancing, taking some of the positions and offsetting them with some of the losses i don't necessarily see that as a big market moving event because i think it's going to be more squaring of those positions. the other thing that can be constructive and to your end is that one of the largest buyers in the market is corporates. and corporates have faded during -- buying back their shares during the blackout windows during earnings. but they're back and that's going to be the case into year end as well. even if we see some individual investors accelerate the tax laws harvesting, i think you have a force that's offsetting that which is the corporate buyer. >> always good to see you. appreciate it. talk to you soon happen fri-yay. when we come back, the ceo

of master works on the art market and the big auctions we've seen over the last few weeks. and mary dillon will join us to discuss quarterly results in her first interview since taking the helm at the retailer "squawk x"ilbeig bk.bo wl rhtac ♪♪ >> announcer: this is cnbc program is sponsored by baird. visit bairddifference.com. i would have hired actually talented people from all over the world. instead of talentless people from all over my house.

we heard about it yesterday with sotheby's art sales continue to remain hot. last week paul g. allen's collection set a new record bringing in $1.6 billion investors are wondering if art is now a safer store of value or an inflation hedge than some other asset classes. joining us now is scott lynn this is like buying, like, i don't know, an etf or buying masterpieces and being able to own things that sell for tens of millions of dollars in your portfolio which over time have been a great inflation hedge and even better than stocks and other assets, scott. >> yeah, i think that's right. i mean, one of the crazy things about this week is that we have seen the paul allen collection sale for 1 and a half billion dollars. that's across 60 paintings

and that's kind of across this macro backdrop the crypto market is falling apart. it continues to go to our visas that the art market behaves differently than other asset classes. people who own these paintings are immune to a lot of these macro dynamics. >> people wonder if the digital art, nft, whether that was kind of a fad this is almost like moving way back on the risk curve to classic art which is like a gold or something like that it's always been a pretty good inflation hedge. i think what's interesting, correct me if i'm wrong, scott, some of these collections that have come available, how do you price those when you don't have a -- ten years ago it sold for this some of these guys bought things from the artists as they were made so you don't know where

they're going to be priced i don't know how you would do that i guess you do it with an auction. >> you do it with an auction half of the volume in the art market trades at public auction. you can see public comps for all of these artist markets and what things are selling for to appropriately value them interestingly, paul allen bought lo these paintings relatively recently. so his were not that far back. but, yeah, that's the case >> different that he was older and collected for longer you are an impressionist aficionado so you know how to do this with your own collection. like anything, there's times when you take profits. you've sold some paintings you need some exercise in terms of being an art collector to run this investment that other people buy shares of >> yeah, i mean, definitely. we have a research team that is just dedicated to researching how all of these individual

artist markets are performing. interestingly this year, we've seen many artist markets continue to accelerate, increase in value more than 15% our private sales team which is really a team within master works that just sells paintings, i think this year is on the low end, sold a painting that had a 9.2% net realized return, another one that had 33% net realized return. i think we sold roughly a dozen paintings this year. the art market continues to be hot. there's lots of billionaires that continue to buy these paintings. we're proving that out so i think as we close out this year, we're feeling better and better about this thesis that it behaves differently compared to other asset classes. >> it's great during inflation but during inflation, youget into a tightening cycle. look what the tightening cycle

has done to other speculative -- i'm not saying art is speculative. but it's hard -- it's not a company where you can measure cash flow and say it's worth this much. it's in the eye of the beholder and it's not a greater fool theory, obviously, but it could be prone to saying that, that's only -- i'm not going to bring up -- can you explain that to me >> is it a vertical line, what's better, a vertical line or a horizontal line. >> it's a vertical line across two colors, regular orange that's the best painting >> but you see what i'm saying i don't know it's always going to be worth tens of millions of dollars and i don't understand sometimes but i'm -- >> if we go back to the 1970s, which is the last inflationary era, the data that we have shows that art, real estate and gold were the only things that gained relative value

so we do think that art performs well during inflationary periods, but that's really the only data set that we have >> from 95 to 2021, it's also outperformed most assets you can pick your time periods, but if you know what you're doing, you probably can appreciate something on your wall and it's probably going to end up being more. if you can't buy these -- art is expensive. this is a way that people can do it just for an investment. >> yeah, i mean, all of our vehicles obviously are just focused on investments so people can come to the website, open an account and invest in individual paintings, generally valued between 1 and $35 million. so that's -- that's kind of how it works from the investor perspective. >> when was the last real art winter, when it was just not good. >> the biggest collapse in the art market was the early 1990s following the japanese crisis. there was this moment in time

where the japanese were really kind of running up prices of impressionist paintings, you know, 2x, 3x and that stopped and impressionism collapsed in the early 1990s. that was the last time >> scott, it's probably not going to be replaced by the nft world any time soon. keep making paints and pigments and canvas and stuff like that probably a good idea. >> i think that's the lesson. >> we'll do that all right. good to have you on. let's talk again soon. see if it's still hot. >> thanks for having me. >> you're welcome. coming up, foot locker ceo mary dillon in her first interview since taking the helm of the retailer. we're going to talk inflation. the holiday shopping season and what they're expecting to see in stores across the country. i want to know if she's wearing dunks this morning check out the futures right now. dow up 183 points nasdaq, 115

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>> announcer: now the answer to today's aflac trivia question. what year did mcdonald's serve its first happy meal the answer, 1979 >> all right, up next, foot locker ceo mary dillon on the company's latest quarter the state of the consumer, inflationary pressures and much more that stock taking off after much better numbers than expected this is her first job since leaving ulta beauty. she's been there for 2 1/2 months. after that, a look at how netflix is performing. we have new data about the service and what it could mean for their bottom line. and louisiana senator bill cassidy will be our special guest. "squawk box" will be right back.

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welcome back, everybody. foot locker beating estimates on both the top and the bottom lines for its latest quarter also reporting better than expected comp store sales and raising guidance for the full

year that stock right now up by 14% joining us in an exclusive interview is foot locker's new ceo mary dillon. it's great to see you. >> thank you. >> congratulations you're there 2 1/2 months and these are some really impressive numbers. >> i'm thrilled to be the ceo of foot locker. really my team delivered an amazing quarter. strong results, better than expectations in a tough macro environment. but our customer proved to be very resilient our top line sales were up 3.3%. comps were up 0.8% why is that? customers love the category. they love what we offer in terms of brands and what we do in our stores. >> i think you mentioned you had a growing customer base too. were you able to get comps up because mall traffic is up or is this a situation where you had advertising, digital what brought in more people. >> the category of sneakers is really hot it's very exciting and foot locker offers a great

array of brands. our customers love choice. our guests buy three or more brands they love -- this is a category that's a lot like beauty there's a lot of enthusiasts, there's a lot of enthusiasm, innovation and newness matters what our customers love around the globe is that we offer them all the brands that they know and love plus a lot of new ones too. >> you're appealing to the sneakerheads >> foot locker has a long heritage here. street basketball is where we started. they're finding what they want at foot locker. >> what percentage of sales do you think customers are coming for utility. when i was a kid, i would buy a pair of sneakers and they would run out, and i would need to buy a new pair of sneakers, versus, the fashion of it. >> you were not a sneakerhead as

a kid. >> our customers are very engaged in the category with a lot of enthusiasm. so it's about individual expression it's about newness and investigation. it's about collectibility. and with a causalization of society. we're not -- we're wearing sneakers and we're not going back. >> what about runners? and i think there's something to this because -- i'm not talking about wearing them out i'm talking about -- i feel shin splints coming, how often do i need to -- i need to replace -- >> now you're a podiatrist. >> i run as well. >> they look fine, but i think -- does it -- >> you must be running a lot >> i have pew -- puma. >> does it break down to where they're not as cushioning after six months. >> i don't know if there's an exact time frame with runners, i've been a runner my whole life and i replace

mine -- >> now i'm finding that i can create a sneaker wardrobe for all sorts of occasions >> i think we have a camera where we can catch the sneakers. what i'm learning is that you can create a sneaker wardrobe. these are really fun this is a puma shoe. we announced a great partnership with puma. and it gives you a little bit of a platform you can wear it with all sorts of things. but there's lot of operations in the sneaker world. >> is that part of it, getting exclusive brands, getting partnerships with -- >> absolutely. we sell all the brands that you know and love. and we've got great partnerships with nike, adidas, puma, we have hoka, crocs and uggs there's an array >> i was going to ask you, signature items. we're in a moment now where, for example, nike, as you know, has tried to pull -- to push the

dtc, meaning direct to consumer, they've got their sneakers website, they're trying to put these sort of -- the hot collectible versions of stuff on their site and i think you're going to ultimately -- this is the challenge with all sort of brick and mortar, is that, that everyone is trying to pull it back as opposed to bring it out. how do you either change the economics around it or do something where nike or others say this is what we want to do >> it's a balance, i would say certainly one of the exciting things about the sneaker category is high heat and scarcity but also, you know, most consumers in this category shop instore and increasingly online. as we've seen other consumer categories both really matter. for us, we look at our fourth quarter, we've got a lot of really exciting product launches coming so it's a combination of working with our brand partners to sell in our stores and online as well as what they do on their dtc. >> let me ask you, you had a

partnership with the kardashians. here at foot locker, you pulled all of the yeezy products after the anti-semitic comments. what led you to the decision >> at foot locker, hate speech, anti-semitism, there's no room for that in our business and values we stood behind our partner adidas i think they made the right decision it was one of those situations and the small amount of inventory we had, we brought back to adidas and we'll move forward. >> you need to be as fashion savvy as like a hot topic or something. does your buyer -- you just have everything in the store so you can satisfy everyone or do buyers really need to make decisions, i'm going to carry this and that -- >> absolutely. i was at our store close by. you'll find our stripers are

real curators. we have merchants all around the world who are experts in trim, function, form and fitness i met with a group of our leaders yesterday that are working on all up and coming brands we have access to sneaker culture which is exciting. >> shows wholesale more expensive because of material costs -- >> we offer a wide variety of brands in a range of price points as well >> have they gone up >> sure, everybody is experiencing inflation. >> people will pay ridiculous money for sneakers. >> this is a category, if you're into the category, you prioritize it and we've seen our customer to be very resilient. that's why we see our results, momentum in the business -- >> what's your highest price point? >> i would say up to $200. but our average is about $100. you can spend a lot -- >> remember when a $100 sneaker was the big time. >> again, i would say what i

love about what we offer is a wide variety of choices for everybody, even things like ugg which are going to be really hot. >> are the performance companies still selling the idea that they have even better technology and innovation for runners they are and -- are they really better -- >> this industry is driven by innovation not just fashion and trend but form and function. that matters for the more serious athlete, for the every day athlete as well as just wanting -- >> i told you, i put that tread millennial on 4 1/2 miles per hour i'm like cranking, all right -- >> i was at 6 1/2 this morning not to compete or anything. >> do you do it for 30 minutes >> yeah. >> i go up to -- >> he owns you >> real quick. online versus online versus off. long term, what do you think the online piece of your business looks like. >> i don't know exactly where it's going to land absolutely it's a big

opportunity for us i would say in the time that i've been at foot locker, what i see is opportunity and there's opportunity for us to be even bigger online than we are today. and it will continue to grow we have about 16% today in sales online we also -- >> what would you like that to be >> it's harder than that, how is that it's early days. i don't have a specific answer for you, but higher than that for the category. >> gross margins were down by 270 basis points part of that was higher markdowns. how much pressure are your consumers feeling right now? >> our consumers -- our customers at foot locker are showing extreme resilience which is fantastic that's why we raised our guidance for the fourth quarter. our promotions are working and i think consumers are expecting that right now >> mary dillon, thanks for coming in. this is exciting we want to see you again. >> thank you coming up on the other side of this, betting on the world cup. contessa brewer is going to join us with a preview.

>> a record-breaking 5 billion people around the globe are expected to watch the world cup. it's the first time legal sports betting is widely available in the u.s. for the soccer tournament the question here is, will it make a difference to the sports books' bottom line let's kick that around a bit after a break. "squawk box" will be right back. moderate-to-severe eczema. it doesn't care if you have a date, a day off, or a double shift. make your move and get out in front of eczema with steroid-free cibinqo. not an injection, cibinqo is a once-daily pill for adults who didn't respond to previous treatments. and it's proven to help provide clearer skin and relieve itch fast. cibinqo continuously treats eczema whether you're flaring or not. cibinqo can lower your ability to fight infections, including tb. before and during treatment, your doctor should check for infections and do blood tests. tell your doctor if you've had hepatitis b or c,

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sportsbook operators are gearing up for the start of the world cup sunday contessa brewer joins us with more people are betting whether there will be a goal scored at some point in the tournament? >> that's about the most popular bet. draftkings tells us that normally soccer in the u.s. ranks only as the 8th most popular sport to bet on. but americans will bet $1.8 billion on the world cup in the united states this year. for some comparison here, new york state handled 1.6 billion in wagers in the month of

october. and globally, the last world cup saw $160 billion in betting action sport radar estimates that each match in this world cup will bring in more than a billion dollars in wagers around the world. the sports books we've talked to say they don't really know what to expect. in 2018, the world cup took place just a month after the supreme court decision paving the way for states to legalize sports betting 31 states offer it and the sports books are trying to gain out how they can maximum this opportunity for the tournament points bet tells us it's translating its app into spanish so they can reach for soccer fans mgm has signed on tim howard has a celebrity brand ambassador and draftkings says most of its betting action now coming in is on the favorites argentina and brazil but fan duel tells us it's seeing a greater number of

wagers on team usa with 150 to 1 odds. >> i think a lot of this comes down to team usa americans are very focused on american performance and so i know we're a long shot, but if we can make a deep run, i sense there's a lot of upside to that number >> they're opening the enthusiasm drives more action. the u.s. plays monday 2:00 p.m. against wales. and real questions about whether they'll be able to enjoy a beer at the match the "new york times" reports this morning that they will not allow beer sales at the world cup. we reached out to budweiser. they have a $75 million sponsorship deal with fifa and it was supposed to be budweiser branding and opportunities for sales everywhere, joe. >> what? >> it sounds frivolous this is going to be a big story,

i think. and you just noted why a lot of money involved in this not just about the enjoyment of having a beer. you don't have to have ten beers, necessarily it's crazy to not -- it would seem like the next time you were going to pick a venue, you might not pick a place -- what's the rational what's the rational? >> fifa has been -- i will say fifa has been under a lot of scrutiny and skepticism over choosing to allow the country to host the world cup in the first place because of its history of human rights abuses. there's been a lot of backlash and the fact that they had committed to permitting these sales of beers and does this very last minute 48 hours or so until the first match, and they've done this about-face do they understand the business

implications for making a decision like that and apparently the "new york times" reports that a lot of the budweiser branded tents that were supposed to be so visible have now been change today white tents and the red budweiser refrigerators have been changed to blue for the nonalcoholic brand and that maybe beer will be available, but only in the suites for the very wealthy or the fifa officials themselves. it just calls into a lot of questions about whether they understand the business implications of what goes into a match of this scale. >> a lot of different -- it seems so me it's difficult to bet on soccer. i've seen people really good at it on -- i've seen predictions they made and they go 8 for 9 in some of these things it's possible to do it if you're a huge soccer fan, it's great that you can do that. >> good luck to you. >> i'm going to bet on how many academy awards are given out when they get -- you know, they graze someone and -- looks like

he might not even got back up ever and then two minutes later he's the fastest guy on the field scoring a goal have you seen that >> i can't say that i have >> you don't watch soccer then, because they're the best actors -- they all deserve best actor awards when they get a slight little injury >> that's where we were going with that. yeah you lost me there for a minute. >> you've seen those guys? >> human rights abuses, we'll turn away. but don't give me a beer and that might be the end. that's going to be what pushes it over -- >> china hosted the olympics where do you draw the line >> right how the new netflix ad tier is performing for the company. we'll talk about what it could mean for the company's bottom line right now as we head to a break, let's take a look at the leaders and laggards on the nasdaq this

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streaming companies are battling it out for more subscribers. netflix kicking off the ad supported tier since then the stock is up more than 8%. talking about how those shares

and ads performing, kevin krem ceo of edo and former colleague. >> and friend. >> great to see you. >> great to be back. >> we had a lot of debate about what's happening at netflix. the shares are up. the performance of what the ad can do for the business or not. >> it's a pivotal moment for the industry it's a pivotal moment for netflix. netflix has always dragged this forward whether it was content, distribution and now it was advertising. it was a surprise they would bring advertising in, but when you look at the perspective of they were starting to lose subscribers, they had pushed their prices up to probably about the limit they could go on pure subscription, advertising is the natural next move this industry has always been supported by subscription and advertising. it's the cable model and it works because there are a bunch of consumers who have a limit of

what they want to pay for a month in subscription. the best way to subsidize that is advertising. >> do you think over time there is not an ad tier but on the higher tiers you're going to start to see ads >> i think they at netflix understand they have elasticity on the high end of the customer base they can probably keep pushing that up without ads. what they will learn quickly is that the economics of how they're driving average revenue per user through advertising is going to be very compelling. >> you think the performance of those ads, the effectiveness of those ads relative to linear television, relative to social media, relative to other advertising platforms is what? >> well, we at edo, we specialize in advertising on tv. first of all, tv works whether it's live linear, cnbc or "sunday night football." >> god bless you for that

answer. >> it works and it engages the audience and they're engaged with the ad rates and then when you go to live streaming like amazon's "thursday night football" move or netflix or peacock or hulu, what you see is that the -- it's non-skippable advertising on content that people want to watch so the ads work what we see is it changes consumer's behavior, it changes their hearts and minds and advertisers, marketers know that they see the results the outcomes change when they run campaigns. >> there's a way to do and that's what really is where you measure elasticity 3 minutes is a long time 45 seconds i have 45 -- i almost like it because it gives me a little bit of a break. >> look at your phone. >> or just because the show is -- depending on what you're watching oh, my god, i need to relax. >> and what is important and has been missed a bit in the first wave of evolution in streaming has been the contextual

relevance of programming and advertising. cnbc has always done this very well, the endemic audience and the endemic advertisers. that's a match and that's information that people want to know >> right >> so the opportunity for a netflix who knows their customer very well, they know their subscribers, they know what they watch, they know what they like, that opportunity is less about targeting the individual based on indicators of what they bought in the past, it's much more about what they love to watch. >> the ultimate is the super bowl some people watch -- they don't even watch the game. if you could get it like that all the time. >> that's right. you know, the move for amazon to pick up thursday night football, those are the apex predators of this ecosystem really. you've got the nfl, which in our day it dominates, dominates the effectiveness of advertising. >> except for "squawk box." >> "squawk box" is special -- >> niche. >> very important audience, too.

>> kevin, we had an audience how netflix has always kept all of its data buried. black box. they don't share any of that with anybody are they going to have to their with advertisers for proof of performance? >> i think so. they made a few announcements. nielsen is going to be measuring netflix advertising in 2023 and there's a couple others that they've announced. >> are they going to actually just measure the advertising piece or tell you about the programming thattest associated with them? that's the big question. >> i think that is the big question i'll tell you, in the drivers of the economics of this business, the amount of hours watched is a huge part of this business and netflix has never disclosed that. >> why is the data better than what meta has? they have that and facebook has that and google. >> amazon is the perfect ecosystem of understanding the

consumer, what they like and what they buy. that is the ultimate. >> what does this mean for microsoft? >> microsoft, it was a big win for them to pick up the advertising. >> they're powering all of this. >> exactly. >> the question is what kind of data are they putting behind this what are they doing with this data is there sharing involved? >> netflix is going to remain -- my suspicion is netflix will remain private and microsoft doesn't need that necessarily for this to be a very successful partnership. this is a scale business and amazon brings very good scale to it it's a crawl, walk, run in terms of how many subscribers are going to sign up for that ad-supported tier. we should expect it will be in the many tens of millions within a year. >> kevin, thank you. great to see you. >> great to see you all. coming up, senator bill cassidy on the fight against inflation and what to expect

from a split congress and check out the futures. quk x"ominmorng. "sawbo cing right back

good morning futures pointing to a healthy opening. the dow and s&p and nasdaq all down for the week at this foint. elon musk's hard core deadline passes. they're seeing what could amount to another mass exodus of workers after the new owner asking employees to commit to intense working commitments or get out and they are. theranos founder elizabeth holmes expected to find out her fate final hour of "squawk box" begins right now good morning and welcome to "squawk box" here on cnbc. live from the nasdaq market site in times square, i'm joe kernen along with becky quick and andrew ross sorkin

u.s. equity futures are up on this friday. we're not waiting for the employment report or any weird inflation data >> we're waiting >> the big friday numbers we do so often always keys off treasury yields. surprised to see even the two-year is not near its recent highs so not to say that it's fit but i think it got over 4.6. >> 4.7. >> at one point. >> at one point in the last couple of weeks. >> it all depends. we're data dependent in terms of a 2-year yield >> meantime, we have stories investors will be talking about. twitter hitting with a waive of

resignations cnbc viewed internal company messages with employees posting good-bye messages with a 5 p.m. deadline musk had posed. he asked workers to commit to a hard core work environment or resign it's unclear how many workers left yesterday but it could be in the hundreds. reports say musk tried to convince some employees to stay on with the company. they say twitter is closing its offices until monday meantime, now to some earnings news foot locker shares soaring on better than expected profit revenue. raising the full-year forecast mary dillon has only been at the company a little more than 2 months she's joined us on set she was here last hour and here's what she had to say >> my team delivered an amazing quarter, right strong results

better than expectations in a tough macro environment, right our customer proved to be very resilient. our top line sales up 3.3% we exclude currency. foot locker up high single digits why is that? they love the category and brand and what we do. >> shares of foot locker up 20% in the pre-market session. they've given back a little bit of those gains you can see they are still up 15%. we're tracking shares of gap the retailer posted an unexpected return to profitability. gap is in the midst of a turn around effort which has included scaling down inventories and streamlining its brand portfolio. >> let's get to the broader markets. for that we join mike santoli. he's got exactly what he's watching on this friday morning. mike, it has been a long week but we made it >> yeah, for sure, becky we've absorbed a lot of retail earnings and a lot of hawkish fed speak. the market firming up as you

mentioned. two days of i would say very controlled pull-back type activity a week ago was the big 5 1/2% jump that took this rally to 15% by tuesday morning. it's kind of consolidating over there. we're going to open underneath 4,000. that's the level where this rally did hit a little bit of friction so still one of the healthier rallies we've had within this down trend plenty more to prove it's going to be more than that take a look at this two-year chart. i was pointing out earlier we were approaching the 1 year anniversary of the peak in the nasdaq composite and 100 that's tomorrow is the anniversary. on a 2-year basis the nasdaq and equal weighted nasdaq 500. there was the peak november 19th of 2021. you've seen the underperformance it has remained the down side driver the over valued, over crowded

megacap growth stocks have compressed a fair bit. the average stock, as you might put it in the s&p 500, really not down all that much over this span of 6% and down i think less than 10% or so from this year's highs. take a look at energy. we have some softness again in crude il just yesterday the energy stocks started to roll a little bit off of what were year-to-date highs. this is a pretty big gap between the xle energy etf and crude oil. it's not quite as stark, but this is one of the widest gaps outperformance of the stocks versus commodity since the commodity went negative, remember that, back in 2020. so it shows you there probably is a little bit of difficulty for energy to make too much more up side from here. people are crowded into that area because it's one of the few sectors that does have earnings growth of course,$80 crude, the companies make pretty good

money. >> mike, it's a friday i was trying to figure out why it felt like such a long week. then i was thinking about it you had the g20, weapons falling in poland, we're ending the week with an icbm kind of launch by north korea it looks like at this point you had the decisions made about pe pelosi stepping down republicans taking the house retail earnings. weaker than expected ppi the fed talk what of all of these things matters the most to the market as we head into the weekend? >> i think it still remains -- the hawkish fed talk and whether, in fact, you can still believe it or whether it still has the same effect on investors because at some point we get towards the end of the cycle, they start talking about slowing down if they have to start talking about the fact that they might see the destination in site for where rates go, that changes the equation honestly, the structure of the yield curve, the fact that you have short rates above long-term rates we are in a defensive

crowd anticipating the economy having its reckoning next year we don't know if that's going to be the case. that is the big shadow over everything today is an options expiration which as much as anything else might explain why the futures are firm november expiration has been up something like 3/4 of the time you don't want to get too negative ahead of it that's technical noise but i think it's the fed and whether the economy is headed for recession are the two main things still >> that makes sense. i forgot the crypto crash, sam bankman-fried. mike, it's great to see you. we don't get to talk enough. >> i agree. coming up, louisiana senator bill cassidy joins us on inflation and what a divided congress could mean for spending in washington and what do we do about inflation really we'll speak with the sec's former enforcement chief on what's next for ftx and its

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welcome back to "squawk box. take a look at the futures right now. we are in the green on this friday morning things looking up. you're looking at 01 points higher the naas dagg opening higher and the s&p 500 up 200 points. crude oil down more than 8% this week on its pace for the worst week, we should say, since the beginning of august, joe >> yup and eight days after the mid-terms it's official. republicans gaining control of the house. democrats still in charge of the senate, at least looks like 50-49, could be 50-50. that would bring vice president harris back into the mix what kind of climate will businesses face over the next two years, both on regulations and taxes? joining us to talk about that, louisiana gop senator bill

cassidy. senator, great to have you on. by definition we're trying to figure out what we can do about inflation, not the fed but congress, the senate, the white house. it's intractable it's very difficult. do you think by definition with a split congress that that will help inflation because there won't be anymore spending or do you not tie inflation to some of the spending we've seen for the past couple of years >> clearly inflation has been related to the spending, not just things like the american relief plan, $1.9 trillion pumped into the economy but what it was spent on. for example, extending unemployment benefits for those who chose not to work, therefore, creating artificially a manpower shortage constraining the ability to provide services. i tend to be optimistic and i think the american people want to see something positive happen over the next two years.

republicans will shut down wishful spending, that's good. that's positive. i also think divided government gives the opportunity to work on things like social security and medicare, both of which are going insolvent, will contribute dramatically to our nation's debt and deficit if we can address that, that would be positive. that works best in divided government where people can't demagogue it. >> we've seen in both houses some of the more conservative members in the senate and in the house. we saw a little bit of a kerfuffle with senator scott and leader mcconnell and obviously it looks like he's going to prevail. the freedom caucus in the house making some rumblings. do you expect debt ceiling problems do you expect the more -- i don't want to characterize them as extreme, but just say people that have not liked the spending

we've seen do you think they'll go nuclear, scorched earth on things like that in terms of debt ceiling in any spenting . >> a couple of things. democrats may try to do it in a lame duck session, but keep in mind that debt ceiling negotiations have brought about some of the most important deficit reduction activity that we've seen the budget control act as one example, which mitch mcconnell negotiated so it'll get -- the debt ceiling's going to be raised whether i vote for it or not, it's going to be raised. that's just history. but it also can be a catalyst for let's get our fiscal house somewhat in order. so i don't view that as negative, i view that as a positive >> do you at this point, sir, see any actual legislation or just the lack of legislation

is -- is going to be -- may be what the economy ordered is there anything we can do proactively? what about energy? anything republicans just controlling the house can do about energy >> i think there is a possibility of a grand bargain on energy. right now, for example, i am concerned our environmental regulations, which i strongly support almost all of them, are lowering the cost of production in china, india, asia, elsewhere and therefore incenting companies to move operations is there something that both sides can agree on that would level the playing field. you can move to china but you're not going to benefit by bringing your goods back here, taking advantage of their lower cost of production because they ignore environmental regulations. i've been speaking to both sides. i think there's an appetite for

that. >> senator, you saw the developments of the week it's thrust ftx and sam bankman-fried into the news. there's a perception he was the second biggest fund-raiser for the democrats but he contributed to you as well and i'm sure there were otherrepublicans that he contributed to are you the exception to the rule or were -- how did that happen are you going to do anything, give it back, go somewhere else with it? how are you going to handle that >> you know, i was talking to my wife about that this morning and i think what other folks have been doing is have been contributing the funds they received from this gentleman to charity. i'll probably give it to the salvation army here in louisiana. they've got incredible programs for the homeless, incredible programs for those who are broken, if you will, drug addiction, et cetera, trying to restore them to wholeness. it's a great charity which is obviously a terrible negative and do something positive with it. >> senator, did you ever meet

with him, speak with him >> you know, we were at a table together once. i remember seeing him but i can't really say we conversed. it was a larger group of people. >> has your view about crypto changed? did he have any influence over it and i will say and i remember, i was going back to look, because when el salvador adopted bitcoin you came out with pretty harsh words about all of this and suggested the united states should be worried about preserving the role of the dollar. >> yeah. so i'm not going to say this entirely tanks crypto. bitcoin is a separate category of crypto than what this gentleman was using. i can imagine that bitcoin might be the last person standing, and i know this not from my own base of knowledge but those who are knowledgeable. cynthia lamos from wyoming is an expert on this i think there's a future for it. the markets will decide.

clearly, clearly folks have gone into this with eyes closely shut ignoring some fundamentals beneath it, and that's not the way you should enter into any business transaction >> when asked about 2024, senator, you said we need a candidate that looks to the future that's kind of like code or -- that just means someone besides former president trump am i reading that right? >> yeah, look, i mean, it spaeks for itself, right? if all you're doing is speaking about two years past, you're not speaking about the future and the american people want an agenda which meets their needs the american people want their leaders to speak about them and not about themselves so the fact that you see that as code i think kind of makes it clear that there are some candidates for whom they're not talking about the future and they're only talking about themselves i'm about the future i'm about speaking to the constituent. i think that's where successful

candidates will be. >> must be some hand wringing in the back rooms of -- maybe you haven't -- it will start if it hasn't yet, but you're going to need the people that love former president trump, republicans are going to need them do you foresee the president -- former president finally at some point if it were to go the way you're forecasting, do you see him finally being part of the solution or part of the problem? would he play spoiler if it looks like another candidate is going to get the nomination? >> you know, anyone that thinks they can predict what former president trump is going to do, you know, don't talk to them but regarding those american voters that are concerned about -- you know, that like president trump. if you look about it, their concerns are how is their life going to be better they are fearful that a life which has brought prosperity now brings prosperity to others but not to them. i don't think former president trump is the only person that

can speak to that and i also think if congress and republicans are positive in putting together an agenda which speaks to their needs, then republicans have a chance to win in 2024 and do very well that's our goal. that's our challenge that's what i'm trying to do what are their needs speak to them. then we'll decide. >> why does everyone want to be governor of louisiana so much? >> it's a great state, brother you should come down here and i'll take you to new orleans first, but many other places as well. >> can we have draw fish i love those little -- those things have you had -- >> oh, my gosh, we can have crawfish, alligator, anything -- >> have you done that, sucked their brains out >> it's not the brains but you do suck the head if you've never sucked it out of a crawfish. >> hear some good music. i haven't been i need to do that.

good luck, senator, and so much to talk about. we hope to have you back and talk more at some point in the future. >> a lot going on. >> funny, isn't it, with politics seams like there's always a lot going on >> it's a game of kings. >> game of thrones, right? >> when we come back, what happens when the place where businesses like amazon store their stuff preps for an economic slowdown? jane wells is live outside the port of los angeles and she will join us next jane, what do you have >> reporter: well, becky, i was at this warehouse near the ports a year ago during the worst of the supply chain crisis so i've come back to see what the ffenation is now diert year, different challenge when "squawk box" returns. [drone speaking] technology lets drones deliver pizza.

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juror all right. right now we've got an update on an important aspect of the supply chain as we approach the peek holiday season shopping this has to do with where companies store all that stuff that americans will buy, we hope jane wells joins us with more on that front good morning. >> reporter: hi, yeah. the do they have the right stuff right now? with an economy so dependent on consumer spending, are warehouses the canary. here's video we shot a year ago.

you had inventory that was coming in late, trucks that were not taking away empties, chassises were everywhere. all right. this year it's the opposite. things have gone from choke to fluid. almost too fluid a lot of cargo now goes to the east coast and in part because some retailers have stopped ordering containers from china in order to work through their current inventory. >> remember november 2021, 160 vessels lining up waiting to be unloaded i think a few days ago it was less than five >> reporter: now big picture it's mixed amazon is closing or canceling some warehouses but target has gone from one sorting site in minneapolis with five this year with more to follow in 2023. prologis is the largest warehouse. it only has 2% of space available. they are securing that space regardless of what happens next

year however, prologis is pausing new construction on projects built on spec without signed tenants >> given the inefficiency in the capital markets, we're waiting to see some more clarity before we make decisions to move forward at the same pace we've been moving forward. 2022 still a record year for prologis >> reporter: and they're still moving forward with building construction where they have signed tenants, but i want to point out one thing. i'm outside right now. this is a trend that's growing it's called yard management. retailers are renting space in the parking lots of warehouses to store their inventory on trucks until they need it, until they can clear things out rather than necessarily wanting more space inside warehouses are being built, guys, with more outdoor space available for that sort of rental isn't that weird i didn't expect that >> no. i remember hearing about that last year. i just wonder how much of that is going to be a temporary

situation just because, look, the retailers are now facing those same pressures on their margins. they were trying to run as fast as they possibly could to keep up with incredibly strong demand, demand going faster than they ever could anticipate now they're talking about cutting back and trying to find ways to cut back it's the whip saw effect. >> reporter: it is we haven't found the happy medium idc is working with the retailers here, electronics companies and discount retailers about ways, they call it game sharing, ways to improve the logistics inside and then they share in the cost savings for that, but regardless, retailers don't want to give up too much warehouse space because there's so little of it available and it's so difficult to build new stuff. >> the other story i was reading last night, jane, was for the third month in a row the new

york/new jersey port has had more traffic coming in than the california ports. >> i know. >> that's incredible it's almost like yogi berraism >> reporter: i thought that might be a temporary situation i was asking prologis, dan, are you seeing the traffic that went to savannah, new york, new jersey last kwleer l.a. and long beach were so crowded and it doesn't sound that way we had over 100 ships a year ago and they just processed 5, it takes a while to change your logistical channels and you're not ready to change them back. i found that very surprising, becky. >> me, too jane, thank you. it is great to see you. >> reporter: you bet yeah, great to see you. coming up, the law and order beat we're going to ask a former sec

chief. elizabeth holmes set to be sentenced today. stay tedun you're watching "squawk box" and this is cnbc can he stand on his own... once he's all on his own? this is financial security. and lincoln financial solutions will help you get there. as you plan, protect and retire. ♪

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theranos founder elizabeth holmes who was convicted of lying to investors and investigators in her blood testing startup is about to learn her sentence prosecutors say she should go away for as long as some of the most notorious corporate criminals. she should go away for just as long attorneys for holmes say she should not get any prison time scott has the story. >> reporter: no prison time at all, they say, for a billion dollar fraud well, first of all, holmes' defense attorneys say they disagree with that calculation and they also say that we, the media, and the books and the movies have all turned her into a caricature that they say is unfair and this they say is, literally, exhibit a, this is 280 pages of letters from friends and family and

associates, 130 letters in all led off by a letter from her partner, hotel air billy evans who appears to confirm that the two are expecting their second child. he says her selflessness knows no bounds. there's also a letter from u.s. senator cory booker who says he still believes in her ability to make the world a better place. the defense team argues she's become a caricature to become mocked and vilified. the court has the opportunity and the obligation here to look beyond the caricature and look at ms. holmes as a human being the prosecutors say she should get 15 years in prison that would put her in the league with others. they say her crimes were brazen. no guarantee she wouldn't do it again if she had the chance and that the court should send a message to silicon valley. a significant custodial sentence will serve not only to protect

possible startup schemes the decision will fall to u.s. district judge edward dodd-frank avala. on the bench since 201 1 his rulings in the trial have gone both ways some have favored the prosecution but some important ones have favored elizabeth holmes most legal experts expect she is going to be exposed to some significant time because of the size of the fraud. elizabeth holmes is very likely going to appeal. >> yeah. what did he say? >> cory booker gave her a character -- >> there was a bunch of people who gave her character references. >> like a character reference? >> reporter: that's right. cory booker said he met her years ago at an event sponsored by john mccain he was impressed by her -- just

her attitude and her ideas and that they have remained friends and while he doesn't make any specific recommendations in his letter, he just asked the judge, as all of these letters do, to show some compassion. >> compassion. >> wow >> looking up donations to cory booker >> you could always, i guess, bring that -- prison's a terrible place but, you know, a lot of times the punishment needs to fit the crime everyone wants to be compassionate, i think, scott. she was judged by her peers, right, and now this is what happens. >> reporter: yeah. and, you know, this whole idea of a message to silicon valley is important and we'll see what message judge davila sends this whole sort of fake it till you make it culture that many have thought was on trial here the prosecutors lay into that heavily in their defense -- if their sentencing memo saying that the -- as we said, that

they should -- the judge should send a message to silicon valley and to restore that trust. what the defense argues is elizabeth holmes still has the capacity to do good but it's not exactly clear how that will happen the defense sentencing talks about the fact she's so sigm advertised she'll never work again. nonetheless, they asked the judge to show compassion, maybe just put her on house arrest for 18 months or less. we'll see. that doesn't sound terribly likely according to what the legal analysts are saying. >> wow. >> thank you, scott. now to another former high profile and high flying company brought low, that is ftx been talking a lot about it. among the latest details, ftx has information that the bahamas allowed sam bank man-fried could

open accounts after he filed bankruptcy they're calling for new crypto regulations. she's doubtful this will spur lawmakers to act joining us is lisa brongaza, former sec enforcement officer in that division good morning to you. we've been trying to figure out whether regulation, lisa, unto itself would have prevented what appears at least from the outside to ultimately actually just be a fraud? >> well, there's two reasons that regulation -- the kind of regulation we might expect from congress would not solve this problem. first of all, as you said, fraud happens. the second reason though is this activity is primarily taking place off shore. u.s. regulators and u.s. congress have limited ability to

be able to enforce anti-fraud provisions or any legal provisions off shore if people choose to invest in a -- or put their money in an off shore exchange, they are opening themselves up to, you know, greater risks than if they choose to do so in the u.s. >> i have to press pause for a second we have breaking news. >> we do we have news from the fed. steve liesman. >> reporter: good morning, becky. the new boston fed president susan collins out with a speech this morning at a labor conference i'm attending she says she is optimistic that there is a pathway to get back the labor market balance with only a modest rise in unemployment that kind of goes along with something we were talking about in a second which is a report out from goldman sax they are worried about the risk of a downturn and she says price

stability is a key for achieving sustained maximum employment the intent, despite what some people may think, is not to create a significant downturn restoring price stability that remains the current imperative it's clear there is more work to do more work to do means additional inquiries in the federal funds rate that will be required then of course what the same course other fed officials have been saying, the need for a period of holding rates at a, quote, sufficiently restrictive level for some time. the latest data has really not changed their minds of what sufficiently restrictive may mean a slowdown in labor demand can be lower vacancies rather than higher unemployment and i ended there because that is a central park which says the u.s. could narrowly avoid or will narrowly avoid a recession next year and one of the reasons they point out is because they think that the slack in the labor market

will come primarily from a decline, as susan collins said, in vacancies and not in a large loss of jobs however, important to point out that goldman in that same report raising to 5, 5 1/4. this notion of a funds rate above 5 if not already seems to be becoming conventional wisdom. >> it's the 7% that's still the outlier i think. some tough talk but not the extreme hawkishness over the long term. >> there's a wink and a nod between bullard and collins. >> yeah, right. >> you say this thursday and then i'll say this on -- no, i'm kidding. >> you say tomato. i say tomato >> talking to roger ferguson jim, you go out and say this and the next day we'll go o you the and say -- you know. they can jawbones. that's a better way than going to 7. >> it is it is. but, look, bullard's been doing

this exercise for a while here i think this might have been the first time he mentioned the 7% upper range. >> yeah, i was surprised. >> it's an exercise and thought exercise some people thought it was reckless to do that and i think it's reckless not to do it there were numbers for the funds rate to combat inflation that are above 6. that's not crazy i think it's an important thought exercise to do you may not like the result of that thought exercise -- >> no, i don't. >> -- but i still think you should be engaging in that. >> thanks. >> want to thank you for the market moving higher want to get back to lisa now we were so rudely interrupted but with news nonetheless about what was going on with ftx and really whether regulation can fix all of this. you were saying, look, go the truth is there's a fraud, there's little that can be done, i think. >> that's correct. frauds happen.

frauds happen in highly regulated areas and they happen in low regulated areas. >> here's the question then. if there's so much fraud in an industry, if you think that it is an industry that has just had its base filled with all sorts of manipulation, and there are those who believe that, as you know, do you, quote, unquote, regulate the business so that it can be -- this goes to do you allow the banks to custody this stuff? if you think all the stuff is manipulated, you don't want them k custodying stuff >> that is the approach that the sec has taken and i think it's the right approach to say, look, we want these participants to come in and be part of the securities industry. we want you to, you know, be using custodians

we want you to be following the kinds of -- i mean, the securities industry is massively regulated, even more than the commodities industry, so to have the industry come under that rubric is what would be helpful because there's lots and lots of circuit breakers in there, there are controls, there's oversight -- >> but, lisa, if the truth is -- here's the part that doesn't make sense to me if the truth is most of these folks are not going to do that, they may say the regulated to a certain degree but others don't and as long as you have others, you have this global phenomenal and there are all sorts of shenanigans going on abroad that have an impact here, what do youdo? >> there isn't a lot you can do when u.s. residents can choose to send their money overseas

that's just -- you know, the -- congress and the u.s. regulators do not tell americans what they can invest in, where they can send their money, with a few exceptions so given that people can go overseas, you know, that's a problem. one way to stop those outflows of u.s. funds to purchase tokens in foreign exchanges or to purchase foreign issued tokens is to bring people -- bring those issuers back into the u.s. and i think that that is the approach that the sec has been taking >> lisa, want to thank you this morning and appreciate you -- you being patient as we got some news about the fed and what it's doing in the markets this morning. >> thank you. >> when we come back, we'll talk to jim cramer about some of what's going on this morning

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let's get down to the new york stock exchange. jim cramer joins us ow just talking about the fed again, jim got any -- we had foot locker on and we had a long discussion about retail, sneakers, everything else. should we talk about the fed do we get anywhere with that >> everybody says it's an uncertain environment. uncertain environment. in the meantime the fed seems to think it's the most certain environment ever i'm trying to deal with uncertain environment and promotional and they think it's a certain environment and all

systems go the they don't look at the stuff you and i look at. they look at aggregate demand somehow and they decide that all the things we hear from every single company really doesn't matter there wasn't a single company on these retail calls that i was on that said things that were expensive were selling well. almost everybody said things were trading down. it's not going to be reflected in any of the dialogue we're getting. >> the real, very high end of jim, has that ever not been the case i'm thinking about art and how well sotheby's -- >> yeah, the high end that has at times provoked an entire nation because they wanted them the gateau i do believe, yeah, that end never seems to die like all those people that buy the houses on dude row the houses are 15 million and can't be ensured

they're not hurt by this. >> jim, what did you finally conclude about target and what it means for other retailers and what it means for the economy and the fed and everything else. is it specific to target >> well, i do think -- brian tried to go high i looked at the stores i thought the stores were gorgeous maybe the stuff was a little more expensive, but the stores were exciting. there was merchandise in there that might have been a little more expensive than the other guy. but i guess that target -- the target consumer just wasn't ready for those price tags but i've got to tell you, when he said that november was weaker than october, i was thinking, is the fed listening? but the fed's got its own set of -- i mean, the fed wants to see wage growth down, and i think that they will get all the wage growth cuts they want from silicon valley they have to understand that silicon valley is really important to the country and more important than housing, which they're really hung up on.

>> one more for you. what happens when a sporting event, one of the biggest in the world, and corporate sponsorships and everything else run headlong into a theocracy? do they reverse this with the beard? does it stand? this is unbelievable i can't believe it's that important. >> i have so many friends who are not willing to watch because of that. i mean, i actually -- close friends who will not watch because of that, and i find it to be shocking, because i love world cup, but i totally get -- >> i know. and i love beer. >> it's going to be a problem. >> i just don't see how -- how -- >> ncaa, no beer at the -- at barclay's center >> okay. that's true. all right. i guess i could -- that would be okay, i guess. all right, thanks, jim we'll see you. i still might have one tonight see you in a couple mitenus.

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just over half an hour to go to the opening bell on wall street this friday morning joining us to talk markets is

liz young. and liz, we've seen a pretty decent rally, although maybe not for this week. we're looking at green arrows this morning you think this rally is going to run out of steam soon, why is that >> if we look at the amount we've risen over the last month, months and a half or so, we're up 10% since the end of september. that's a pretty big jump, and look, bear market rallies can be really powerful. i think that if this turns out to be one, this is no exception. but when you look at valuations, and this year has been a valuation story, absolutely, when you look at valuations, the s&p is trading now at 17.3 times forward earnings that is higher than the five, the ten, and the 15-year average. we know that over the 10 and 15-year period, most of that time has been spent at zero rates, but it just doesn't feel right for the s&p to be trading at that level in a time when we've really just started to hear about earnings contractions and layoffs.

so, i would expect that we probably give some of that back, but the good news is, if we do have another pullback in the market, i think it's the last one. >> why >> because we've now seen a lot of the economic data start to crack, and when you think about the timing of how things usually work, the market typically falls before the economy really bottoms. what we need to see is that economic data come down enough that the fed gets comfortable with the idea that inflation will actually be taken care of i think what we don't want to see, and the biggest risk that investors are hoping for, i think, is that the fed pivots too early. that would be a bad thing, and we'd have to clean up for it much later on, and it becomes a much bigger problem. so, as the economic data softens further, and we start to really come to grips with the fact that a recession is likely in 2023, that's when the market gives its one last breath and says, okay, we have to regulate where we are with valuations, and we have to set our expectations properly for next year.

>> did you see the goldman-sachs call that steve leishman was just talking about, that they think we can avoid a recession next year? >> look, anything could happen, right? crazier things could happen. but when you look at just the signals, not only the signals that the market is giving us with a yield curve at its deepest inversion since 1981, we've got economic data leading indicators saying things like new orders are contracting, small business optimism down, back to covid lows, and now we've got capacity utilization turning down, all of those things would point to the idea that there probably is going to be a recession that doesn't mean it has to be terrible that does not mean it has to be deep or long all it needs to do is reset the business cycle, and really, at this point, if that recession is contained to only certain sectors, some of the ones that have felt most of the pain, tech being one of those, then it doesn't even necessarily have to hit all corners of the economy

we might not feel it that deeply, and we won't know about it until it's over so, i actually would welcome some pullback in gdp i would welcome a reset in the economic cycle, especially one that takes care of inflation, because then we can start on the other side with more of a clean slate. >> one thing that has been a little concerning is what we've heard from a handful of retailers, target talking about how sales really slowed down in the second half of october and the beginning of november too. we heard similar things from kohl's and macy's. is that just those retailers that are really focused on apparel? or is this something that you think is the beginning of a larger trend >> well, i think that this has been a year where a lot of companies are managing guidance, and they're being very careful to lower their guidance and lower the expectation so that if something does come off the top line or the bottom line, it's not as big of a negative surprise but we're heading into the holiday season we're going to be paying very, very close attention to what

retailers are saying and what consumers are doing. what i would say is this over history, when you look at the industry groups of the s&p 500, retail stocks tend to do pretty well in november in anticipation of a holiday spending season. and then we get reality after things like black friday and cyber monday, and we find out if consumers are actually spending. because of some of the results that we've heard from big retailers and some of them that have actually contradicted each other, i would expect this year that demand does slow, and consumers are already showing that they're changing their behavior and trying to save some money. i don't think that retail spending is going to be especially strong this year, but i don't think it's going to be hit yet in november, because a lot of this weakness has not really baked into sentiment quite yet for all consumers. >> liz, thank you. have a great weekend >> thank you >> i'm sure we'll see you in the next week or two folks, let's take a final check on the markets before we hand things over. if you're looking at the futures, you're looking at green

arrows today dow futures up by about 230. for the week, the dow is down by about 0.6% s&p is indicated about 30% up for the week, and then the nasdaq, which is off by about 1.5% for the week, is indicated up by 122 today. all right, that does it for us we made it through the week. make sure you have a great weekend. make sure you join us next week. right now, it's time for "squawk on the street. bye-bye. ♪ good friday morning and welcome to "squawk on the street," i'm david faber with jim cramer we are live from the new york stock exchange carl has the morning off let's look at the futures. we are set up for a higher open, and our road map does start with that very fact stocks look to close out what's been a choppy week perhaps they will close out in the green. plus we're going to round up some retail for you. not looking so