dinosaur juice >> and very unexpected >> have a wonderful thanksgiving >> thank you, brian, you too >> all right, got the verbal hook, andrew i got the -- you know that voice. got to go. >> i know that voice we got to go brian, i want to thank you for hanging out for these three hours. i want to wish everybody a very, very happy thanksgiving. make sure you join us on friday. "squawk on the street" begins right now. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber and mike santoli at the new york stock exchange futures timid on this final trading day of the week. stocks closed for the holiday tomorrow, short session on friday we'll get a full plate of data today. fed minutes this afternoon jobless claims, the highest since august our road map begins with the calm before the retail storm investors digesting the latest economic data ahead of the thanksgiving holiday >> plus sam bankman-fried's

latest mea culpa, the crypto founder continues to claim ignorance of wrongdoing in a letter to ftx staff. and protests rock foxconn's massive iphone plant in china. we will get a live update. we will start with the markets on this final full trading day before the end of the week obviously, black friday coming up this week pretty interesting dynamics going on regarding the discussion they just had about industrials and the dow relative to other indexes >> yeah, the parts of the economy that are kind of the capital spending, wholesale parts of the economy seem to be doing fine it's interesting industrials, stocks have done well things like deere. steel stocks have been some of the strongest in the market. they're kind of small market caps, but they've done pretty well it's this weird moment where we just see a temporary thaw, where it seems as if there's a window of, okay, we've priced in where the fed's going to go, treasury yields are off the boil, oil prices are down, inflation seems to be receding and we have not yet seen, really, the demand

pinch in a broad way on the economy or the employment situation soften up too much, or, you know, is it a soft landing? i think that's the debate right now. s&p 500, up 15% off its lows in five or six weeks, levitated yesterday at a very thanksgiving-week feel to it where it just kind of walked higher after going sideways for a little while, and now it's, what can the economy deliver to either substantiate that or refute it? >> we did mention jobless claims, david, a little bit elevated, highest since the middle of august but you look at what deere said last night, guiding above for fiscal '23, specifically referencing infrastructure, demand for their equipment, which is something you and jim and i talk about a lot >> we do, and jim comes back to that a great deal, being a strong part of the economy at the same time, you had hp saying very different things significant layoffs at the company as it tries to cut costs significantly to get itself in the right position for what is weaker demand for pc sales,

which we've known was the case for some time. we saw the dell results from the day prior, mike, but the layoffs in tech, so to speak, continue to mount >> without a doubt and it's definitely this sort of undertone of the employment picture right there. people trying to quantify it it's not necessarily that big a deal i know, you know, some models are showing because of what's going on in housing, i mean, you have to expect job losses in construction-related industries too. it hasn't quite happened yet so, there are shoes we're sort of waiting to drop, and there's pockets of the economy in the markets that are definitely struggling, and those that have been more resilient and the overall level of activity seems okay so far. economic surprise index has been just sideways flat so it's not necessarily saying, reacceleration or dramatic weakening yet. >> yeah. of course, we'll talk more about the fed minutes coming up this afternoon, maybe we get a hint

if there's any discussion getting off the raise and hold narrative. for more, joining us this morning, bob dahl. happy thanksgiving, great to see you. >> same to you and your colleagues >> what do you make of this ongoing sort of thesis that if this year, painful as it was, it was largely about a rate shock and next year invites potential earnings shock >> i think you hit the nail on the head, as did mike a few minutes ago. that is to say, we are drifting from the fed and inflation are the entire driver and therefore p.e. ratios to one where, what are earnings going to be the impact of the fastest rate increase in history, we don't know it. monetary policy has long and unpredictable lags, and so the slowing in the economy is still in front of us we don't know we going to skate through with a soft landing, a mild recession, a deeper recession, it seems to me earnings estimates are too high

and they have to come down that's going to be the story we deal with at least for the next few months >> we did get a pretty decisive close on the heels of that cpi print. it doesn't sound like you think we're going to make it to that 200, though. >> yeah, i think 200 will be a resistance, as it was last time. as you know, we went and kissed it and backed off. we might have to go through it to get those who are calling for that being the resistance point to scratch our heads, but i don't think we're going to pene penetrate significantly above that until we answer some of these other questions. as mike pointed out, we have a 15% run already and i'm not sure there's a lot more in it this round. >> bob, there's no doubt about it, and anybody who says we have to wait for the market to kind of prove that, in fact, there's a trend change is always going to miss the first 20%, right that's just by denfinition, so nobody's trying to pluck the

exact top or bottom, but what is interesting to me is the level the market is at, and 2023 s&p 500 earnings forecasts are down 20 bucks over that period of time they were above 250. they're around 230 it's not as if the world has been oblivious to the weakening picture and i wonder what the interplay is there between, look, we've tried to price something in, a 27% peak to trough drop in the s&p, before you even saw broad recessionary trends take hold so, i just -- i wonder how this sequencing is playing out. >> yeah, good observations look, the market knows a lot of things before we do, as we found out over the years, but it seems to me, yes, we're down $20, but you know, that 250 number, plus, was before there was a whole lot of talk about, are we going to have a recession, before we knew the fed was going to go as far as they have gone and are likely to continue to go. so, it seems to me we still have that earnings question mark.

if we have a recession, even if it's a mild one, we're going to have earnings risk to 200 next year, which the -- it's not in the market, in my view >> also that 250 number came before we realized china was going to be ultra-serious about covid lockdowns. mcquarry had a note out overnight arguing they might have passed the point of no return, meaning they're unlikely to return to zero covid without broad, vicious lockdowns, return to that state of affairs i wonder, i mean, obviously, no one has edge on what china's going to do, but how do you read it >> ouch. that is an issue we know how important china is because of their size to the whole world, obviously, that part of the world even more so and if demand there is not happening, that just puts a pall on a lot of things and creates supply chain issues that are beginning to fall, they will become entrenched again, so we need china to have some openness

and some economic activity for the world to be okay >> bob, in terms of positioning, i guess, strategic portfolio building at this point, the play this year has been de-emphasize the biggest stocks, so go equal weighted indexes versus market cap weighted, go value, maybe go quality, look for cash flows as opposed to, you know, rapid expected growth. does that all continue into next year >> i think so. cash flow for sure i mean, that's an evergreen sort of thing, more important and difficult times, but it's always there. i would pay attention to that. the quality one is the one i think, mike, will shift first. when we come out of whatever slowdown/recession we're going to have, you know you don't want a high-quality portfolio, you want a low-quality portfolio that's where we have to do our homework i don't think positioning in that direction a whole lot makes

sense, but it will before long >> hey, finally, bob, on europe, we spent a good part of the morning on "squawk," i think, talking about potential caps on the price of russian oil it sounds like you think -- and at least in terms of sentiment, the energy crisis and obviously they've got a tough few months ahead, a tough winter ahead, but you think that might have peaked, that negative sentiment. >> i am in that camp, coupled with the dollar showing some sloppiness, which tells me that non-u.s. stocks may do okay. non-u.s. averages are only a couple hundred -- only a couple percent behind the u.s., despite the strength of the dollar year to date, so i think the doom and gloom is well known, and of course those stocks tend to be cheaper, so i'd start doing some homework there for global investors. >> yeah. we did get some flash pmis in the eu that were better than expected, but still in contractionary territory >> yes >> great holiday to you. >> all the best.

thanks guys, wanted to update a story we've been following for sometime, which continues to worsen for the giant swiss wealth manager, credit suisse, obviously also an investment banking firm here in the united states, certainly known under the csfb or soon to be first boston moniker but the specifics that we've gotten out of credit suisse and what they're calling a updated outlook for the fourth quarter are -- are perhaps concerning for people because of the loss of assets at the company that was, i am told by people close to the situation, far above what had been anticipated you may recall, of course, sometime back, the company announced its plans to raise as much as $4 billion in equity, the saudi national bank, a large family in switzerland, the qataris amongst those that were signing up for that $4 billion

but despite that announcement, and with the thought being, perhaps, the announcement would be enough, it was not enough to stem what has been a very significant and continued number of outflows of assets. let's give you the numbers themselves, because credit suisse did share the basics with us they had -- they're expecting $1.6 billion loss for the fourth quarter but the outflows are what is key here 6% group aum at the end of -- or as of november 11th, net asset outflows were about 6% of assets under management at the end of the third quarter of 2022, and wealth management, those outflows, they say, were reduced substantially from elevated levels in the first two weeks of october but have not yet reversed and were about 10% of assets under management, again, at the end of the third quarter. you're talking about $1.6 trillion in total assets, something around those levels. 6% of that, you can do the math. we're talking significant numbers. why is this important?

well, it's that $4 billion in equity raise going to be enough? that's the key question. it would seem, perhaps, no longer is that going to be the case the market certainly may have sniffed that out already you've seen what's happened to the stock price over time. but when you are in the business of trying to keep yourself investment grade rated and trying to fill a hole here that is worsening as a result of the loss of assets and the fee income that comes look with them, the number that you need to raise in terms of equity not just to keep the rating agencies happy so you maintain investment grade, which is vitally important, but also so that you can retain important employees and have the packages in place to do so and actually have the growth capital you need for your business, because remember, they're talking about this not being profitable for a couple more years that's where it becomes more concerning and so we're going to keep a close eye on it. when it comes to the profits or lack thereof, the company also told us together with the adverse revenue impact from

previously disposed exit from noncore businesses and exposures, they will expect the investment banking group to report a substantial loss before taxes in the fourth quarter as much as 1.5 billion in swiss francs there they're maintaining their ratios, but they did hit liquidity buffers, and they had to utilize those liquidity buffers at the group and legal entity level and they have fallen below as well certain legal entity level regulatory requirements mike, these are always interesting scenarios, because you announce a capital raise in part, you're trying to stem or you're trying to bring confidence to the market if it doesn't work, more assets leave. you raise that is it going to be enough or are you in a negative spiral where you can't simply get ahead of it in terms of imparting enough confidence to the marketplace to stop entirely the asset losses

>> i mean, the bet by the company was that they had a strong enough core franchise in asset management and wealth management that there was going to be a more steady base now, the $4 billion expected capital raise, i mean, what is it, under $10 billion equity market >> that's correct. it's enormous dilution, but it would appear based on the conversations that i have had, it's not going to be enough at this point if, in fact, they really want to, as they certainly do, get ahead of this, and maybe, you know, we'll see. but the key is for them to restore confidence i don't know what the number is. perhaps they don't know what the number is. right now, it's $4 billion that's what they've got to prove for. they've got the investors lined up but the dilution will be massive. >> no doubt about it it's easy to pull these. it's different from what we were talking about with when you had these kind of counterparty risk issues, where it was lehman or bear stearns where it's hedge funds pulling their business from these -- this is actually funds.

this is people managing your wealth and your portfolios so, it's a steadier business if the assets stay. but if they leave, that's the revenue. >> yeah. and obviously, they still have those plans, carl, as well to spin off the u.s. investment bank to a new you don't want led by michael klein but even there, you've got a lot of questions about keeping people equity retention packages and what that's going to look like >> yep we'll watch that we're also going to take a closer look at china covid lockdowns and this unrest at foxconn's iphone assembly plant. we'll get closer in on hpq and nordstrom. amazing calls on tesla and best buy today. resqwkurook at futes mo "ua on the street" is straight ahead get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech.

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some new tensions as china widens its covid restrictions, protests erupted at foxconn's flagship factory, the world's biggest iphone assembly plant. eunice, fill us in. >> reporter: well, foxconn says that as of tonight, the facility in central china is back to normal and this is after videos emerged online that were obtained by a.p. but not verified by nbc that seemed to show people who claimed to be foxconn workers clashing with authorities dressed in hazmat suits, while they shout, give us our pay. now, these protesters complain that they're being forced to

work weeks longer than agreed upon under very tight covid restrictions in order to get extra pay. they also say they are fearing the virus spread in the facility now, foxconn said in a statement that it is communicating with workers and the government to avoid a recurrence and is offering workers compensation. now, this protest comes as china's covid situation appears to be going national china's iphone city announced tonight that it's putting its downtown area in effective lockdown until next tuesday. it's also ramping up mass testing to go to every day mega city chongquing is now in effective lockdown chengdu is now in mass testing shanghai canceled an auto event. manufacturing hub sanya in china's version of hawaii, both are imposing more restrictions in public places, and this comes

after beijing and the area around it, as well as export hub already said they were tightening controls. so capital economics, a research firm, said they're fearing that the situation could head towards what we saw in early 2020 when hundreds of millions of people were in lockdown to the detriment of the economy now, the capital economic says while there's little prospect of the authorities opting to step back from the zero covid policy during the winter, there is a significant risk that containment efforts fail guys >> eunice, talk to me about the degree to which any kind of stimulus or government support for the economy is being considered, and how would that even be helpful if, in fact, you're restricting personal economic activity in the first place? >> reporter: right i think that the -- of course there's been a lot of discussion

about stimulus measures, especially when it comes to the property sector and the government has been directing some money into that sector as well as other incentives however, the big problem, of course, is all the uncertainty and from a consumer perspective, the fact that you could get locked down or that businesses are randomly sit and the fact that the regulations are not very clear at all. in fact, a lot of the -- as we've discussed, a lot of the decision-making is being devolved to the local level, so a business, for example, told me just today that they wouldn't be able to deliver a chair that i actually had ordered because their local -- their local manager said that they are not allowed to go into the shop to pick up the chair. so it's those level of decisions and it's all being handled at the local, micro-level that make

it difficult to do business. >> that is targeted for sure, eunice and huge implications for companies with exposure to china. eunice, thanks we'll get to some movers this morning, including tesla and this latest note from morgan stanley's adam jonas about the effect that elon musk's involvement at twitter is having ers tus.lahas. the'fure we're back in a moment you ok, man? the internet is telling me a million different ways i should be trading. look! what's up my trade dogs? you should be listening to me. you want to be rich like me? you want to trust me on this one. [inaudible] wow! yeah! it's time to take control of your investing education. cut through the noise with best-in-class education resources that match your preferred style of learning. learn your way. not theirs. td ameritrade.

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as we said earlier, last full trading day of the week as the dow, s&p, nasdaq are up two of the past three days, futures mixed this morning as we got yields swirling around a bit on the heels of a lot of data, and more coming up at the top of the hour the opening bell in five and a half minutes

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the all-new, all-electric eqb from mercedes-benz. the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. hp, inc., reported quarterly results that were above what a

lot of wall street analysts had been expecting it did announce plans to cut up to 6,000 jobs over the next three years, citing a slump in pc demand. the ceo spoke to jim about the road ahead for the company >> we know that we are facing a tough market environment, and we believe that we will continue to face that through the next year. from an inventory perspective, we have been making progress reducing the inventory that we see in the channel, and our expectation is that by the first half of the next fiscal year, we will be back to our normal situation. >> stock is not down on this company generated about $3.9 billion in free cash flow in fiscal '22. that was a good way to measure these things >> yes, and it trades at a very low cash flow multiple it's been a cheap stock for a very long time, and that's because it's really kind of a slow growth to no growth type business and they're managing it the way that a lot of investors would prefer companies that

don't have a huge organic growth thrust to manage themselves, which is careful on the cost, if it's a 12% free cash flow yield, it's a buffer. >> right >> for value so it's almost like it's incidental that it's a tech stock. kind of the way ibm's trading this year where it's just kind of a cheap pile of cash flows, at least as they measure it, and it's -- >> as long as ibm does come through with the free cash flow guidance for the fourth quarter, which is quite significant >> yes, it is. and by the way, doesn't always stand up to scrutiny they do a lot to maximize their stated free cash flows, but nonetheless, this is part of a story of a constant rationalization of costs as opposed to a shock also different from, you know, the metas and the amazons where they just binged on people, feel like they're not productive enough >> ibm, by the way, the sixth best dow stock of the year

interesting on hp, pc units down 21, printing down 7. that's something, if you work from home, you definitely understand why that's happening. >> exactly >> there's the opening bell at the cnbc realtime exchange at the big board, it is the 96th macy's thanksgiving day parade on nbc tomorrow morning. santa came that's nice. it's meals on wheels america addressing senior isolation and hunger but the job cuts at hp, i think, david, slated to save, what, $1.5 billion by fiscal '25 >> yeah, $1.4 billion over that period of time and this is a company that has -- i mean, i can remember when meg whitman was running all of it and of course, slowly but surely, it has been sliced up into a lot of different pieces, many of which

are low-growth businesses, as you say, mike, and therefore reliant on maintaining high levels of free cash flow, to the extent they can, although, they did benefit like so many others from what was that pandemic pursuit of pcs, given work from home that's reversed, so dell yesterday, not as much, though, in apple, where it would seem the demand for the macbook, the mac pro, macs in general remains fairly high. >> it so far has you know, just the premium pricing is such an advantage, the ability to -- people pay out of pocket. very, very significant subscription revenue right now and to me, it's much more about, you're just buying this massive -- this financial entity that just is a source of stability in the world i don't know what the right multiple is for it nobody says it can't get cheaper if you're apple. but it has held up very well it's 7% of the s&p 500 it's a massive percentage of the

tech sector. if apple were down as much as the tech sector were down, i think the s&p's down another 1 or 2% so it shows you the heft that it has and how the index can illuminate or obscure what's really going on. >> interestingly, one of the biggest laggards this morning is auto desk. they do miss by a penny, but they talk about a lot of the things that you could argue affect all kinds of i.t./software companies. forks, headwinds, softness in europe regarding new business, rather than multi-year contracts now, clients asking for single-year contracts as they try to hedge against long-term macro weakness >> that's a big overhang on a lot of the subscription-based software companies now, autodesk, of course, very close linkage to creating real-world stuff industrial processes and things like that and design so, there's a little bit of a -- when the aggregate macroeconomy

slows up and down, it's not just some app that's for fun. so i think that's a little bit of a tell right there. but in general, it's really this bifurcated market where if you were -- if you were an ipo, if you had this big total addressable market thesis, that stuff has been really crushed, and maybe there's still unfinished business there, a lot of stuff's trading below cash, they can't outrun their stock-based compensation burdens, and then there's the established stuff that seems like it's making its way through. so, the ipo index has not gotten off the map whatsoever through this whole rally the ipo index is no longer an ipo index. there haven't been enough ipos, so they're all stale most of the top 20 holdings are more than two years public so, it just sort of shows you this whole tier of the market we got excited about a year and a half ago has been dormant and in retrenchment mode. >> hoping for better activity in the next year, right >> i don't think it could get much worse >> exactly >> i mean, it would be almost impossible but we will see. you're right, carl, in terms of

capital markets activity overall. and a lot of different areas, including, obviously, taking companies public guys, back to retail for a moment, if i can we got nordstrom earnings. they weren't particularly good third quarter, net sales down 2.9% versus the same period in 2021 gross merchandise value down 2.5% you know, they did note, of course, that given the weakness they started to see in june, they aligned inventory to deal with that. customer demand, they say, decelerated. we took action to align inventory and expenses with the changing trends. core categories in the third category, men's and women's apparel, shoes and designer had the strongest growth versus '21, and people continue to shop for occasions, travel, work, and holidays again, we're talking fairly small market cap here at this point. roughly $3.3 billion so, not necessarily a bellwether >> no, although some consistent commentary from a lot of the management, sort of the

retailers that have been reporting, which is, it's going to be more promotional there's some shoppers are stressed or trading down or more discerning about how much they're spending, and the overall market's good with that, because we want disinflation we don't want pricing power. i keep going back to what fed vice chair lael brainard has repeatedly pointed out, which is the source of persistent inflation can be located until the expanded margins it's got to be whittled down for the fed to be satisfied that the demand slowdown is going to make its wayinto the inflation data >> which makes it sort of a dilemma for equity investors >> for sure. >> do you want margins to come in >> in those sectors, for sure. that's why almost all the chain retailers trade really cheap they're undemanding valuations because nobody thinks, necessarily, you want to bet that they can continue like this >> they did make some comments, again, as macy's said, sort of

bifurcated consumer, rack not doing nearly as well as the flagship stores. you want to do the tesla note? >> sure, let's do that tesla shares, guys, are up 2.5%. we've been talking in recent days about whether the impact of twitter and, i guess, i mean, is it chaos is that fair to describe it as chaotic? >> wedbush calls it a circus show >> i think that's fair it has had an impact on tesla shares, because it certainly would seem to be the case. adam jonas, a well-known and influential analyst at morgan stanley seems to agree towards the bottom of a note here, he says, what needs to change for tesla's stock to stop the slide? he goes in to say, twitter is potentially exposing it to a number of areas including consumer sentiment, commercial partnerships, government relations and capital markets support. we've been surmising the same thing.

it's almost a proxy for how badly things are going at twitter. >> since you've basically had a realtime glimpse at musk trying to change things, corral things, weighing into these controversial areas, i don't think it's the whole story, because the stock was already kind of broken based on its massive run-up, and then it had kind of rolled over from there people keep pointing to china and the fact that they seem to have to cut prices and maybe they have to work harder to get the volumes that they need in those markets, so a lot of things coming together at the same time. but there's no escaping the fact that in a big picture way, tesla, in a weird way, is the ultimate kind of backstop for twitter. one way or another >> yeah. >> sell more stock >> right it's potentially sell more stock to fund losses >> does he have to give up the ceo role whatever it might be and i think it's simply a matter of, you can't quantify or handicap exactly what's going to happen >> exactly what jonas says while difficult to quantify, there needs to be some kind of

circuit breaker that gets investors off this notion that he's distracted or hurting tesla's overall image by his behavior on twitter. jonas does say rivian emerged as a short-term beneficiary, and he says even if 10% goes into other auto stocks, has huge implications for rivian or porsche or who knows what. >> now, again, like, if you sold it at today's price, it's not like what you lost is available for you to reinvest into something else, right? but i know what he's saying. you distribute the enthusiasm for evs across more companies and stocks, and it can work. on the other hand, his bear case for the valuation is still, for tesla, 25 times free cash flow for the core business. >> at 150? >> yeah. yeah although i thought the 170 current valuation, i mean, he's talking -- he's going off fiscal year '25 numbers, enterprise value over ebitda, would be 14

times, and a 26 pe now, again, that's on fiscal year '25 it's not that many years away at this point >> no. tesla has -- between the stock getting cut in half and the fact that the business has continued to grow -- >> they've grown into their valuation that doesn't sound absurd >> it doesn't sound absurd it sounds super aggressive if you consider it a car company, but if it's just a big consumer products, tech-driven growth stock, then it's in the zone of being relatively -- >> their profit margins are better, aren't they? >> much better >> no doubt about it x credits. they make money. >> credits are almost not even that big a swing anymore >> by the way, citi does upgrade tesla from sell to neutral the other call on our autos was bernstein arguing that the porsche deal is overvalued, and they initiate a sell but interesting times in the car business >> for sure. >> i was going to mention just in terms of the general year ahead outlook stuff that's coming out here, david kostin

saying, don't expect much out of the market that seems to be the consensus that's coalescing about 2023 you look at morgan stanley, citi, everyone's got a target that's right around where the s&p is right now normally, people pencil in 5, 10% upside it does show you that we feel as if we're heading toward this maybe recession on/off type of a world. lag to effective fed tightening. whatever the result might be, i think it's a net positive that expectations are pretty low in general for the market next year and you know, you can't be purely contrarian about these things people are looking at the rational stuff but it is interesting that you can find people who feel as if market bottomed in october, inflation's going lower, valuations have been rationalized, this market's been stress tested by crypto crashes and the fed balance sheet shrinking, et cetera and we could be off to the races. almost nobody's saying that. >> finally, guys, i did want to end. the world cup's going on right

now. and manchester united is potentially for sale even though it will no longer include ronaldo. but that stock is up 14.6% the glazers made a great purchase back in 2005, at this point, given the valuations for clubs, obviously, a lot of premier league championships there in recent years, but they do now say they are considering a sale, and that stock is up almost 15% yes, it is a public company, again, controlled by the glazers. >> meanwhile, at ftx's bankruptcy hearing yesterday, attorneys for the collapsed crypto exchange made some eye-opening statements eamon javers was at that hearing and joins us this morning with more the words "personal fiefdoms" got a lot of play yesterday. >> it was a wild one this was an opportunity for the new ftx management and their attorneys at sullivan and cromwell to really take out the trash and dump a lot of blame on sam bankman-fried for what he did. they called it a personal

fiefdoms of sam bankman-fried. they said the efmperor has no clothes in terms of the previous management, and they laid out answers to all the questions we had going into this hearing. one of the big questions was, just, how much does ftx owe? we didn't get that answer. but we did get some other answers. here's what we learned yesterday, including the fact that the company is now under cyberattack on a fairly regular basis. they said that, in fact, the company has hired a cybersecurity advisory firm. they wouldn't even name that cybersecurity firm because they were worried that firm would be under attack too because of the significant threat against this entity they also said that substantial funds here have been stolen or are missing, so they left aside the idea of who stole them, so there's a big mystery at the heart of this, which is how much was stolen, if any who did the stealing where is that money now? a lot of those answers, not forthcoming yesterday. and then we also saw the judge weigh in on this dispute that we had over the customers at ftx.

who is going to be named in this bankruptcy typically, the creditors would be named here, and that could be millions of customers. the debate was whether those people would be made public or not. the judge sided with the company here and said those names can remain private for now, guys, but no guarantee that if you're a customer of ftx, your name will remain private forever. so the way we left it is, we've got another hearing coming up in december, a hearing in january, and some of the lawyers i talked to privately after the hearing yesterday, guys, in wilmington, said this could go for years, carl >> well, actually, you just answered my question i was going to ask you exactly how long they anticipate and again, you said years. is that likely scenario? >> that is sort of the betting of the guys in the room who have been doing this themselves for years. just because this is a very complicated situation. you've got multiple jurisdictions. you've got a lot of litigation, potentially, coming.

you had lawyers in the room representing various ad hoc groups of customers out there who are all trying to sue. there's international issues here one issue to think about is, you know, how many of these customers were in the united states, how many were in europe where they have entirely different digital privacy laws how many were in china where it's illegal to participate in the crypto market and some of the chinese customers may have been doing that anyway and face exposure from the chinese government so you've got the chinese communist party to think about, u.s. legal authorities to think about, the bahamian authorities to think about this is a very complicated one, and that's why they say, could be months but could be years >> hey, eamon, the letter that sbf wrote to his staff in which he says, i'm deeply sorry, i'd do anything to go back in time and change things, i froze up in the face of pressure, how is that affecting the trajectory of the legal maneuvering? >> not at all. i mean, the attitude from the ftx attorneys in the room

yesterday was, you know, we're moving past sbf. he's in the past we're moving forward here. they referred to him as the former management who no longer works there. they cited a number of other people who no longer work there. i think he's going to be the fall guy for the current management team and they're going to say, look, there was this problem it was created by sbf, and we're the clean-up crew. they refer to themselves sort of as the adult to come in and manage the situation and i think, you know, that's sort of going to be the way this shakes out i mean, the question for sbf, is, you know, whoo at kind of criminal liability does he have? he's going to be dealing with this personally for years too, that's for sure. >> eamon javers, remarkable ongoing story. breaking news on pmi let's get to rick santelli >> yes, carl, on november preliminary reads, which means in a couple weeks, they will change s&p global pmi for manufacturing, 47.6. that would be the lowest level

going back to may of 2020. if we look at the services pmi, 46.1 if that's stuck, it would be the lowest since august. that was the lowest since may of 2020 and finally, the composite pmi expected to be 48. 46.3 so we missed on all of them. 46.3 is the weakest since august and that was the weakest since may of 2020. so the pmis for manufacturing services all are weaker than expected, very similar to europe's numbers today and "squawk on the street" will return after a short break

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- oh, the stock market is doing that fun thing again. just tell us - what's your why? news from the future: you're going to live through that about 10 more times! (laughs) no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing.

as an independent financial advisor, i stand by these promises: i promise to be a careful steward of the things that matter to you most. i promise to bring you advice that fits your values. i promise our relationship will be one of trust and transparency. as a fiduciary, i promise to put your interests first, always. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com we've told you about a few of these stories this morning. deere's going to lead the s&p this morning, up 6.6%.

tesla, not far behind. overall, it was those pmi numbers a moment ago that sent yields lower, ten-year now back to 3.71. dow up 100, is looking for its ghclose in about seven months back in a moment if you wake up thinking about the market and want to make the right moves fast...

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take a closer look at retail earnings this morning ahead of black friday cnbc.com melissa repko joining us we've gotten so much information over the past few days, the big boxes, department stores, specialties, discounters what do you think the big far raters are going to be >> what we're starting to see is over all the consumer is being more selective with how they're spending during the pandemic everyone was a bit on that sugar high there was a lot of stimulus money. people were spending across the board. now what we're seeing is shopper is being more selective, looking for values, looking for deals and also looking for brands they want to buy even if they come at a higher price. >> how about how they're doing in terms of working down inverch tory some of the inventory increases this quarter, not as big as the prior quarter, but still talking double digits if a lot of cases.

>> definitely. inventory continues to be the headache and the hangover. target is still struggling with a lot of markdowns some of that comes from having a lot of stuff and frankly not having the right stuff dick's is having traction because it's selling things that people are buying, thing like nike, titleist and northface >> melissa, is a consumer being more careful and looking for better value, does that translate into spending being shifted back toward the latter part of the holiday season it was a few years where it seemed like everything got pulled very far forward, people just wanted what they wanted and got it delivered is it going to be more pro protracted this time >> people are reverting back to that more typical schedule some of that is because people want to get the best deals

best buy ceo cory berry also told me that people are wanting to get sales, wanting to get discounts. they associate black friday week and cyber monday with those best deals. >> what about digital? i did notice there were a couple -- nordstrom digital down 16 how much are we going to rely on e-commerce to drive sales once we start talking about the end of this fiscal quarter >> e-commerce has become less of a factor this holiday season there's a couple reasons for that one is people have missed out on the in-person shopping experience the other one is as people are watching their budget, they want to touch and file the eat terms they're buying i've heard that from a number of retail analysts and also industry watchers, that they really think that people want to know what they're getting. by going to the store, they sometimes see that item 40% off, 50% off and that might motivate

them to put it in their basket. >> another theme some ceos have hit on, consumers relying a bit more on credit people alarmed at the rebuild in credit bounces a lot of it seems like catchup from a big decline from the pandemic and the stimulus. i wonder if we're worried about the consumer getting toward the end of spending capacity or just more of a return to normal >> i think this is something that definitely retail executives are watching closely. cory berry mentioned specifically she has noticed people are running up credit card balance, dipping into the savings account. going into next year, not knowing what the consumer will be willing to spend on and much money they'll have left. she spoke about in some cases lower-income households are making tradedowns, buying things like tvs that are cheaper, but also across the board making tradeoffs about spending

>> melissa repko from dot-com on retail when we come back, we made our way through durables and claims after the break, you mish and new homes. don't go away.

good wednesday morning welcome to another hour of "squawk on the street. morgan brennan has the morning off. dow shooting for its highest close almost going back to april. we're getting a lot of the data out of the way before the long holiday. let's get to rick santelli >> our november final read on university of michigan sentiment expected to be around 55.0 impresses up, impresses us at 56.8 remember the low area there was 50 in june of this year. as we look at current conditions, 58.8 -- 58.8, that's the best number since october when it was 65.6 of course, since this is a final read, the previous numbers for this will end up being 65.6, and

finally expectations, 55.6 so we improved all the reads from what was the mid-month reads, and this is a good thing. let's look at the inflation index, shall we? the one-year inflation, 4.9% the high watermark there was 5.4. that was in march, the highest since '81. we are reversing if we look at five to ten-year, it's at 3% 3% we've had several times do keep in mind 3.1 is the high watermark going back to 2011 we had that twice, the most recent being in june finally, new home sales expected 570,000. that seasonally adjusted annualized units, much better at 632,000. keep in mind it was july's low point, the 543,000 that was the lightest since march of 2019 we know interest rates have gone up we no housing has a variety of issues, not the least of which

is we're not building enough this is a much better number than expected. to dig down into it, let's head east diana olick >> i agree it's a much better number than expected i would note that september's figure was revised slightly down so that 7% increase is a bit larger than given the numbers. still, in the raw figures in the amount of homes sold, it is more than expected. i wonder if this isn't all the concessions that the home builders have been talking about. we still see prices up 15% year over year on october home sales, and we do see inventories coming down all the builder earnings reports, all the ceos said they were really turning to incentives, that is buying down the mortgage rate or adding things to the home that people might not have been able to afford before. is it possible that buyers came in and they were able to jump in fearing that perhaps rates would go higher. i do want to note these numbers are based on signed contracts in

october. mortgage rates were over 7% for the vast majority of the month before they started coming down this month so, again, i'm thinking this is incentives, people jumping in, worried that perhaps there would be higher rates later. also the very short supply of homes for sale on the existing side, perhaps helping the builders a little bit here during october mike >> for sure, diana on balance, pretty encouraging batch of data. thank you very much. we are 30 minutes into the trading session. here are three big movers we're watching, starting with deere reporting better-than-expected profit and revenue, stock up close to 7% this morning hp ink, the latest company to announce lay-offs, saying the plans to cut 4,000 to 6,000 employees over the next three years due to an extended slump in pc demand hp shares modestly higher in the early going. we'll end with nordstrom, stocks

sinking despite beating on the top and bottom lines after retailers have said sales have slowed over the past several months shares off 7%. for more on the retail landscape heading into the holiday season, let's bring in oppenheimer analyst brian nagle. brian, good to have you this morning. try to characterize if you could what you're taking away from this latest run of earnings reports. i know you cover most of the kind of hard goods yesterday we got best buy, dick's sporting goods. is there a theme you can pull out at this point? >> thanks for having me. i would say if i bottom line it, what we're seeing is a very mixed backdrop, but also not nearly the disaster or pronounced weakness they're calling for. there very much are still pockets of strength out there where consumers are performing quite well i think one clear example, we heard this yesterday from dick's sporting goods is the sporting goods category there's a place the consumer

continues to spend well. it seems as though thatwill continue through the holiday season >> when it comes to home improvement, we got this better-than-expected new home sales number home improvement retailers have been what resilient given all that's been going on what do we attribute that to, and can it continue? >> i'll answer the second part first. i think it does continue that's another favorite spot of mine, home improvement, home depot and lowe's i think what we're seeing happen, it's a different consumer generally speaking the shopper at home depot's or lows is a higher income home they're less impacted by the inflationary factors, gas prices, et cetera. what we're seeing here, and this is a demographic shift that's happening as the pandemic subsides, even though we're now able to move around a lot or going back to our offices for traveling, we're still spending more time in our homes i think that's encouraging people to continue to undertake

those home improvement projects, whatever they may be that's a big benefit for companies like home depot and lowe's who don't necessarily look at this as a holiday plight to some extent it is, but i think the trend persists >> brian, from a sort of a broader perspective, though, assuming, as you said, consumer demand has not been damaged as much as many anticipated z coming into this earnings season, where do yu think investors are best served being focused right now in terms of where the dollars will be spent? you talked about home improvement. anything beyond that >> i'll go back to sporting goods. there's a lot of high-quality companies in the sporting goods and agthleisure company. another under the radar, academy sports doing a great job, repositions, under a new management team and then the big brands, nike and lululemon what we're seeing is confidence.

i think these companies are managing well now inventory situations the other big positive when we think about inventory, dick's mentioned this yesterday, is that now that more product is flowing better, the supply chain constraints are letting up that's allowing both the retailers and the brands to much better satiate underlying consumer demand. >> you mentioned nike. i'm curious to what degree territories like china impact the model that otherwise would fit into a more north american consumer mindset there's huge wild cards out there, aren't there, brian >> i agree nike is a small part of the business but a big part of the stock in china it's always difficult here in the united states to evaluate what's happening in china. what we keep hearing from nike is that brand has never been stronger, continues to res naelt well with the consumer the weakest we've seen in china

has been largely transitory in nature, whether it relates to covid, the lockdowns or supply chain constraints. i think when the dust settles, nike is still performing very well in china and ultimately that's good for the stock price. >> one other group that quietly has been outperforming is the auto parts retailers, brian. they almost trade kind of like a consumer staple type multiple and seeming to be immune to a lot of the broader demand forces is that something that can continue do you actually like that sub sector >> i do. that's been -- through this year, as we've been talking to our clients, the auto parts retailers, particularly autozone and o'reilly, they've done quite well it's been a great place for discretion snare investors against the threat of macro malaise. it sounds a little

counterintuitive i think one of the factors that has driven the sales strength in that category is the ability for oems to produce cars and the result is uptick in used car pricing. all that disclose case has kept people in cars longer, encourage people to maintain those cars longer that's going to benefit autozone and o'reilly i think it persists but we have to keep an eye on it as the world gets back to normal, that will normalize, so to say. >> kind of countercyclical in that way brian, appreciate your thoughts. happy thanksgiving. >> thanks for having me. a big test coming for the airlines this holiday season the number of travelers is expected to return to prepandemic levels, namely what they were three years ago. our phil lebeau has a lot more for us from o'hare >> we're off to a good start in terms of the thanksgiving travel rush no major storms, no major delays around the country for the airlines, they're

believing 24 is the start of what could be a big holiday season just this week, 4.51 million people are expected to fly that's a hair below how many were fly two years ago during the pandemic or right before the pandemic, 4.59 million those passengers who were flying, the airfare they're paying, up about 10% compared to back then. then you're looking at the airline staffing it's up 6.4% the airlines are better prepared compared to last year to handle a surge of travelers in terms of capacity, that's the other addition or change that has taken place with the airlines look at how the airlines have adjusted their capacity relative to 2019. only southwest has increased its capacity american is flat, united and delta both a reduction there one area where the airline and the transportation department have been working together to make sure there are no issues, florida. here is the transportation secretary talking about the changes that have been made in terms of flights to that state

>> i've written the airline ceos suggesting they use overwater routes, a little underutilized, coming in along the north, the eastern seaboard, even if that means they have to incur a bit of a cost to make sure their planes are configured that way >> take a look at shares of delta, jetblue as well as american three airlines with some of the biggest exposure into florida. keep in mind that the airlines are benefiting from lower jet fuel costs relative to a year ago. as that takes place, as they get a surge in traffic, greater airfares they're able to charge. this could be the kind of fourth quarter that the airlines would really like to use as a spring into 2023. of course, there are a lot of questions out there, guys, in terms of whether their costs will be substantially higher which is the e peckation once a lot of thooes pilot and flight attendant and mechanic contracts get worked out within the next six months to a year, which is

the expectation. >> right speaking of which, phil, if the issues do get worked out and labor isn't a source of strife and if we continue to get softer fuel prices at least trendwise, what would be their argument if, in fact, fares don't come off the highs going into the beginning of next year >> i think the fares will stay where they are that's partially because you have a constricted supply, carl. you're not seeing the airlines add as much capacity as they have in the past essentially they've got discipline right now now, can they maintain it as they go into next year and then into the next summer that's going to be the challenge because this is an industry where -- you know how this works -- you get one airline that really increases capacity as much as possible. the other feel as though they have to match whether it's a particular market or region of the country. >> phil, thank you phil lebeau at o'hare airport,

once again on thanksgiving eve. as we head to break, here is roadmap. for the rest of our hour here incredding incredding credit suisse, a $1.6 billion loss confidence evaporating after ftx's failure threatens to blow up another key player. former ford ceo mark fields as tesla tries to rally. a lot more "squawk on the street" is still ahead causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life.

tesla trying to rally this morning after losing over $600 billion in market value since the highs of november 2021 getting a boost today, citi grades the stock to sell cnbc mark fields joins us to talk about tesla and the auto market at large. >> hey, carl good to see you. >> i know recalls are an issue with tesla, more profitable in evs than their peers their logistics are savvy, demand is robust yet we have these sort of external be hafrl patterns that puts the brand's strength at risk. >> you just noted what's happened with the stock. the stock is down even 25% since they closed the twitter deal less than a month ago. i think when you think about this, the three or four factors

playing against the valuation of twitter right now are obviously the number of recalls they've seen, which have been more kind of reputational damage than what i would call financial since a number of them are fixed through what they call over-the-air updates versus a physical fix. you also have at the same time the potential slowing of demand because of consumer uncertainty. we have the issues of new covid lockdowns in china, going joe province with demand for tesla finally it's just musk's distraction with twitter when you think about it, investors have bid up the value of tesla based on elon musk and his vision for the future and his drive. if they're getting less of elon musk, that's going to be reflected in the share price, and i think those four factors are really contributing to what's happened with the stock and, of course, going forward,

the question is can he get 100% focused back on tesla which is important because every legacy or traditional oem, every single ceo in those businesses is 100% focused on the car business and catching up with tesla >> speaking of which, speaking of competitors not standing still, i wonder if you thought gm's guidance the last few days regarding their ownersv ambitions, will we talk about that as a potential turn or pivot in the quarters to come? >> it remains to be seen, right? it's one thing sending out a press release, another thing scaling up production on evs you've seen the journey tesla has been on over the last few years. i think in gm's case they've been very consistent in saying they want to be selling about 2 million evs by 2025. this upcoming year is a huge pivot point for them where they're going to have to scale, because right now they're

producing the low volumes, whether the ev hummer or their cadillac lyric they're going for their high volume vehicles for next year. if they deliver on that, that's going to cause more pressure in the market on tesla. for example, they get about 70% of the ev market here in the u.s. that's down since last year, but it's going to come down to gm's ability to execute but they've laid out a good plan now you've got to back it up with actions >> mark, to what degree is the way the different companies sell their cars a factor in how much market share change? tesla's vertical integration, direct-to-consumer model, is that an advantage over the legacy automakers. we have networks of affiliated but not owned dealerships. as you were running ford, was that a benefit, or is that

potentially a hindrance to getting evs to be more mainstream >> well, it could be a combination of both. i think in tesla's case, because they got what they called early adopter, very facile in terms of technology, ordering the vehicle, taking delivery of it, arranging for service was pretty natural for them david, as you get to mass adoption and consumers are used to working with dealers to going, touching, experiencing the product, learning about it, but also service problems. i don't view a whole swath of consumers used to the dealer model. i think that's going to be really important, particularly as all these new models come out and you're appealing to the mass market, so to speak. i think as we get into mass adoption, that actually will be a benefit to the traditional oems the dealer networks, you can say whatever you want to say

positive and negative. it's a huge positive for a lot of these automakers in terms of they are the face to the consumer when you're introducing a new propulsion system and going for mass adoption, that i think is a big benefit. >> yeah. market, it is david. that was mike previously >> sorry >> don't worry about it. qualcomm, your board member, our viewers have seen that because it's at the bottom there, moving much more aggressively into the auto, connected vehicles, excellent vehicles, what the snag dragon digital chassis. are you fully endorsing that as a board member, and do you believe that does represent a significant potential profit area for the company >> absolutely. when you look at a christiana ar man, the ceo, they just did their recent investor day, obviously the addressable market for automotives is quite attractive when you look at the expertise

that qualcomm brings, not only just the basis of the infotainment they've been supplying automakers with for quite some years, but as you look at the systems on the chip and 5g kanlts and you think about adas or driver assistant features going forward, i think qualcomm is very well positioned and have a good reputation for delivery for the ouautomakers which, as you know, as software becomes more important in terms of the contribution to the vehicles in terms of the content and the value. they're looking for very trusted partners so, yes, we think it's a terrific strategy. they're making a lot of inroads. their bag log is quite impressive, so they have a lot of work in front of them yes, absolutely. >> mark, you mentioned china, of course, in relation to tesla it's also an important market for qualcomm as well very difficult to ascertain exactly what's going on there,

but just in your view, is that something that bears watching in terms of the covid lockdowns, in terms of what, again, is going on in that market, the impact it may have on qualcomm and/or others >> well, when you look at obviously china writ large, its impact on the overall supply chain, it's very important it depends on the industry obviously in the auto industry given the componentry that comes out of china as well as just the domestic market demand for a lot of the automakers including tesla, it's an issue, because it's a big market for supply, a big market for demand. when you go through these continue merry-go-rounds of lockdowns, starts, stops, et cetera, it gets really difficult. if you think about it from a manufacturing standpoint, let's use auto as an example, when you shut down a line, you don't just flick a switch and it comes right back you have to ramp up. so i have to think where it's going to continue to be an issue

going forward, particularly as china continues with their zero covid approach in their market >> finally, mark, the white house has made a real push trying to draw attention to their ability to get companies to invest in battery production. in fact, they've tried to get the term battery belt instead of rust belt as a thing, i wonder how is the industry feeling about the long-term supply of batteries relative to the long-term adoption of evs? >> it used to be probably five years ago a lot of automakers felt we can just rely on the battery manufacturers to deliverer the volume for them because they were able to take advantage of the scale efficiencies now that demand is starting to gin up, you're seeing a lot of automakers saying, hey, we can't just leave this for suppliers. that's why you're seeing a lot

of joint ventures between the oems and battery manufacturers ultimately in my view the automakers are going to insource this themselves. the reason being is that propulsion system, when you think about the value of the total vehicle, it's a big piece. you just can't rely on outside suppliers for that but, you know, the long-term -- from a long-term standpoint, the bottom line is the industry is going to be continually growing in terms of their percent of ev penetration. we can debate on the time frame on that, but it's really important for the automakers to get ahead of that. if they fall behind, they're going to really get hurt that's why you're seeing a lot of announcements of build on capacity now in anticipation of the market coming later on if it doesn't materialize to the extent they have, they're going to have a lot of unused capacity which is going to be a problem, but they're placing their bets on the table right now >> it's a big bet. mark, really fascinating

thank you for covering so much ground have a great holiday >> you, too, carl. see ya >> we were speaking with mark a bit about china. let's go there right now hundreds of workers erupted in protest at the world's largest iphone plant eunice yoon is live in beijing so many different things going on on your beat, eunice. >> reporter: absolutely. apple supplier foscon said as of tonight that facility in china is back to normal. this is after videos online that were obtained by a.p., not verified by cnbc, seemed to be foxconn workers clashing with authorities in hazmat chutes suits while shouting "give us our pay. the protesters claim they're being forced to stay in isolated covid-controlled areas for much longer in fact, weeks longer than they had agreed upon with the company in order to get extra pay and

bonuses. they also say they are fearing the virus spread at the facility foxconn says it's communicating with the workers and the government to, quote, avoid a recurrence of that offering worker's compensation. this comes as china's covid outbreak appears to be going national that very city said it is now putting some of the downtown areas in effective longdown until next tuesday it's also going to be ramping up mass testing to daily mass testing. chongqin is in lockdown. shanghai canceled a big auto event today. and the manufacturing hub both said they'll be putting more restrictions in public areas

this is after beijing and the surrounding area already said they're going to be imposing tighter controls as did export hub going joe which has been putting several districts into tighter lockdowns. all of this is adding up to what research firm, capital economics, believes is a very worrying sign. they've been flagging that they're concerned that the situation in china could be heading toward an early 2020 situation in the very beginning of the pandemic, basically saying, while there's a little -- there's little prospect of the authorities opting to step back from the zero covid policy during the winter there's a significant risk that containment efforts fail we all remember, or at least i certainly do, the early days of the pandemic when hundreds of millions of people were put in lockdown and just had a

disastrous effect on the economy. >> something we continue to watch closely with, of course, your help. eunice yoon in beijing. as we head to a break, check out this move at nat gas, the highest jump since september the reason, a possible rail strike 20% of u.s. power comes from coal, 70% of it is transported via rail ifhe's a tre rail strike, there will be more demand for not ral gas. ♪♪

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welcome back to "squawk on the street." ticker igv is rising today, up about 1% still down double digits over the past three months. one name in the group to watch, autodesk, third quarter results in line with analyst estimates, but weaker-than-expected guidance citing a challenging economic environment showing customers are showing more reluctance to sign longer-term contracts, that stock down almost 7%. meantime, time for a news

update with contessa brewer. >> here is your cnbc news update a guess grunted employee opened fire in a virginia walmart killing six people that shooting started about 10:00 last night at the store in chesapeake the police chief says investigators believe the gunman shot and killed himself. they're still trying to figure out what his motive was. a newborn baby was killed in ukraine after russian shells pounded a maternity ward in the southern part of the country the chilled's mother and attending doctor were rescued after russian missiles leveled the two-story building outside zaporizhzhia it comes after russian bombs are sending millions into darkness, and, of course, this time of year the cold. two explosions in engineer russ let me have killed one and injured at least 14. this is the first time bombs have been used in an attack on

israeli civilians in jerusalem the white house condemned the attacks and offered assistance in the investigation "squawk on the street" will be back after a quick break ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

s&p 4025 if we can get to 4029ish, it will take us back to september '19. let's bring in art cashin on the cnbc news line happy thanksgiving if we manage to put together some multi-month highs, is that something to be thankful for >> it will be, carl. i think we're experiencing very positive seasonality since about 1950, 80% of the time stocks have had a rally from the tuesday before thanksgiving almost into the end of the year. there are occasions, however,

when we've had to put santa's picture on a milk carton because he failed to show up so far it looks like the seasonality is holding up in here your next risk is going to be probably the 200-day moving average which is up around 4,065, '75, up in that range that's our next target for the bulls. >> we did get santa on the floor today as you know. good to see him. i have seen strategists argue that the dynamics you mentioned are in place you could get into a bigger number is that a view you can sympathize with? >> yes, unfortunately it is. i think that we're going to start to get to a further review people are going to begin to look at earnings for next year and see when they pull back.

i'm concerned about the fact that we've got the vixx down under 22 in this year whenever the vixx has gotten down to its standard level which is about 20, we've had markets reverse downward on us so with seasonality, the tailwind we've got, we're a little overboard we've got resistance at the 200-day moving average and ultimate resistance up around 4150 so i'm kind of walking a ti tightrope here, hoping for santa claus. i'm wary of that vixx in particular. >> yeah. art, obviously even if the october low proves like it's a good one, its process is probably going to have to play out in a back and forth way to create something that people are persuaded is a decent low. you talk about seasonality through the latter part of the

year, do we put much stock in the post midterm election dynamics that's one where the bulls have thrown a shutout since 1950 on that one. >> no. that's been helpful, too you've got to remember, as i say, very solid 80% of the time, but that means 20%, 1 of 5, santa claus takes a left turn somewhere. seasonality clearly is favorable at this time of year, and in the election cycle area, you're dead right on that. i never put 100% into cycles of seasonality. i watch for the overbought things, and that's why that vixx is number one of my concerns. >> we can talk more positioning and buybacks and even crude back

to the 77 range. art, we'll talk to you soon. >> look forward to it. happy thanksgiving everybody as we head to break, check out the top gainers in the s&p led by deere with a strong earnings report. tesla shares rebounding after a number of down days of the last few weeks. maybe things at twitter are going better today we're back in two.

welcome back to "squawk on the street." we continue to follow the ftx fallout with genesis now the latest name feeling the impact our kate rooney has more this morning. good morning, kate. >> good morning. genesis and its parent company are the most imminent risk investors i'm talking to, here is context it's considered the birthplace of lending in crypto capital markets. really the first lending desk out there. it's created about a decade ago. suspended withdrawals last week and is reportedly considering

bankruptcy genesis responding to that saying it wasn't imminent and it's having constructive conversations with its creditors. its loan book had been around $14 billion earlier this year. it took about a billion dollar hit and had a billion dollars of exposure to the now bankrupt hedge fund three arrows. also got about $175 million locked up in ftx in the most recent quarter the book was under $3 billion. there are also potential effects around the parent company. digital currency, dcg, is one of the most valuable in the space the ceo saying we have weathered previous crypto winners. like this one may feel more severe, we'll come out of it stronger as we hut it. dcg is also the parent company

of grayscale which runs the trust. it's trading at about a 43% discount investors are worried that if the lending desk collapses, dcg may be forced to unwind that bitcoin trust i'm told is unlikely all the confidence eroding after ftx is showing up elsewhere in crypto you've seen exchanges seeing record withdrawals as people look to put their coins off-line for safe keeping there's also been more selling by older wallets as they put them with the longer-term investors. usually the least likely to sell kathy wood, ever the optimist, bought $60 million of bitcoin and crypto stocks, though, this week david, back to you >> kate, thank you our next guest says he doesn't believe we're in the middle of another crypto catastrophe. tether's co-founder william

quigley joining us calling it a crypto winter, do you agree with that? if you don't, why not? >> i definitely agree it's crypto winters this one is longer than average but not the longest. when you have had the greatest bull market in crypto we started at 200 billion market cap in 2019, got up to 3 trillion, and now we're back to like 800 billion. so better than where we started. but we've retraced 70% along the way, as you and i talked about in the past, lots of new entrants and lots of people who started using debt and leverage as we know, when things decline and collateral values decline, if you're overextended you're going to be in trouble this is really what we're seeing now. decisions made a year or year and a half ago that are now

coming home to roost. >> obviously there's also been a lot of calls for transparency or more of it even to the likes of tether, a company which you helped co-found in terms of the stable coin and the reserves behind it. is there anything you can share that when people question why are precious metals part of the reserves in the latest attestation report from tether >> i can't say anything directly because i don't make those decisions. i would prefer that tether be backed one-to-one with dollars i would even back it with short-term marketable securities i think it would be perfectly fine to back it with dollars which is how it began. having said that, tether has been around for now more than eight years. it is the first stable coin. it's a coin that trades $30 trillion annually.

it's the most traded crypto on earth, more so than bitcoin, the number one trading pair against other cryptos. so people do have a lot of confidence in it as far as transparency goes, i think any centralized exchange, any centralized business in the crypto ecosystem should be more transparent. i would love to see balance sheets, income statements and balance sheets, but certainly balance sheets i'd like to see those. maybe even more frequently than quarterly, maybe monthly those are things that would start to make people feel more comfortable with what's being done with their tokens >> when you see how many people question on tether, well, where are the earnings from conceivably given the higher interest rate environment, there should be significant earnings why aren't we getting more information? you seem to be amongst those who would certainly like to see that >> yeah.

i use tether anyone who trades crypto probably has used tether in the past the liquidity for tether is probably better than any other stable coin. i can't answer why there isn't more transparency. i'd like to see it, too. it would provide everyone a lot more comfort it has been the case that tether has stood the test of time people have clearly put a lot of confidence in it because we all use it a lot the practice of more transparency on centralized businesses, it needs to be pushed mostly by the consumers, the people using it. i think you're seeing that now on exchanges exchanges are now starting to publish proof of reserves, demonstrating that they have the tokens the customers gave them i'd like to see, as i said, any centralized business do the same thing. one of the reasons decentralized

finance, which is really what it's about, is so appealing is because you can inspect it and instantly see what's being done and where are the tokens that are being held that's the benefit of blockchain and the centralized businesses have a role because they'r >> but i think they need t copy some of the trades people look for when they get on bloc chain and crypto related businesses >> william, that is one of the points being emphasized by purists, by people who are going back to the firs principles of what crypto wa meant to be in the first place decentralization and tha transparency but where does that bring th class? you mention the unwind of thre trillion dollars in value, because the centralized players, you can call the exchanges broker dealers, whatever the really are, they promoted an made easy the investment for people who are really just

looking for things t appreciate and then you had the yield farming side of things, jumpin through all of these hoops, to generate yield from instrument that did not inherently have any. now the world has more saf yield in it. so where does this bring the overall asset class in terms o adoption >> that is a great point when it really took off, which was in 2020, rates wer basically zero for sovereign debt, which is the biggest way that you can invest money on the short term and defy yields for 10%, som 20% or higher, so it was ver appealing. it is now more competitive rat environment, where you can get four or 5%, with presumably lo risk or very even zero ris talking to the u.s. government securities so i think that raises the competitive elements here. but defi has to offer more tha what it is offered so far.

and it is the most appealing aspect of the centralize businesses let's be clear, all of the calamity in the market has bee around centralized businesse that did things with the token that they were not supposed to or took greater risks than anybody realized the big issue here has jus come down to consumers find it very easy to use these platforms, and that is why the use these intermediaries you can communicate directly with blockchain, but it's more difficult. so you just have to bring more transparency to the centralize businesses, and i guess ther is a role for them that's th demand, we need to see more. there is a reason why we are seeing 800 million in a theory i'm, last coinbase, 800 millio last update, 500 million or so in the last, this was in the last seven days, the las gemini right >> william -

>> until they get more proof these things are holding the money safely >> yes william, always good to have you and a good discussion have to end in their, thank you >> thank you guys. >> going to check on the markets this morning we did get to the 40 29, takin us back to september 14th, b the s&p, we will be right back >> this is sponsored by sea an the group. see any group, where risk meet opportunity.

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its highest level in over year as the club says it's looking for outside investment including a possible sale. stock for its best week, going public in 2012, almost 17% thi morning. stay with us

>> welcome back. keeping an eye on a shares and credit sweeps, what's really going on with the 12th manager an update from the company indicated significant outflows continued. there was a peek towards the end of october, but they hav not been snapped that was, from what i am hearing perhaps a bit of a surprise, just after the company announced this plan, which is now been approved, as much as four billion in equity by the way, as four billio

inequity on a roughly te billion-dollar market cap. i should mention just over the last five quarters of th company has lost or lost equivalent of its curren market cap think about that for a moment. the real question is, will fou billion be enough at this poin given the continued outflows from the wealth management unit? there is concern, certainl that you will have to rais even more inequity this is a story we wil continue to watch. for now, we will say farewel from squawk on the street, happy thanksgiving everyone. tech check starts now. >> good wednesday morning, welcome to tech check, i a carl with john - today, black friday isn't focu as consumer fears mount. who is most at risk? we will discuss that in just a moment plus, the latest tech layoff as hp cuts thousands, an rumors mount that even googl may be at risk by the way, a lot more on apple, as violent protests rock the massive iphone plant in china, john >> the health of the consumer' top of mind fo