>> see, here's the debate we always go back to. are you talking about good for the christmas meaning from the economy's perspective or the consumer >> the stores, it's a mixed bag. for the economy overall, i think it will be decent. >> a win for consumer because you're going to find sales >> finally, after three years. that's it for us we'll see you next week. right now time for "squawk on the street." let's get this holiday season under way we have some cheer on the floor of the new york stock exchange this morning it's kids day at the big board, the first one since 2019 good friday morning. i'm carl with david and morgan jim cramer has the morning off today. it's been a good thanksgiving week for markets futures trying to hold in on this black friday. a short session for stocks we close at 1:00 p.m. eastern.

our road map begins with retail's big push. black friday weekend taking on additional importance this year as inflation continues to weigh on consumers >> plus, china's growing covid concerns record cases, renewed lockdowns and no signs of budging from that zero covid policy >> shared of activision blizzard sliding ahead of the open. reports that the ftc is now set to sue to block microsoft's $69 billion acquisition plan let's begin with black friday taking center stage the nation's retailers hoping consumers will give them a big boost despite inflation. we're staying on top of all the action, including at the giant mall of america in minnesota two locations on new york's long island outlets in deer park, roosevelt mall in garden city. a lot of retail news this morning, and some trends that are developing one is that the deals we normally look for beginning today have already been in place for a few weeks. >> curious to see what the numbers actually get posted for

this holiday season for the quarter look like come january because we have seen that pull forward. i think back to amazon putting forth its first time ever a second prime day ahead of the holidays and the fact you did see that deep discounting. we have known there are some retailers who are awash in inventory. the question is going to be those retailers who haven't managed inventories as well coming into the holiday season, are they going to have to discount even further. >> that's been a key question. one we have reviewed a number of times as many big retailers reported earnings. mix to a good overall earnings picture from the third quarter at least for many retailers but obviously this is a key time, including for amazon another side of this, you know, the are still predictions we're going to have fairly significant gains in online, but of course, we do have people returning to stores in a way we have not seen for the last two years unclear exactly how that's going to play out. >> adobe has a lot of data to

sift through this morning. namely, where the discounts are deepest and toys, peak discounts in the 30% range that's going to get interesting. >> i'm watching that one closely. unsurprisingly also thought it was interesting just looking at, i mean, every holiday season you see the seasonal trade among the retail names in general where as a group they tend to trade higher coming into the holidays that seems to be playing out as well xrt, the retail etf, is up this week it's up 2.5% this week up something like 18% for the quarter. if you look at this week where you have seen some of the biggest moves it has been to your point some of the mall retailers, names like bath and body works which is trading higher this morning. abercrombie and fitch, american eagle and also ross stores have seen big gains because there's this expectation folks are getting out unperson to do a little more shopping but again, it goes back to some of the commentary we have heard in some of these recent earnings about are people actually buying

versus just walking through the stores and checking things out >> right, although not the door buster days may be behind us, apparently people didn't want to show up at 4:00 a.m the crowds, the concern about physical danger, and so to carl's point, many retailers have sort of offered their bargains over a longer period of time >> a lot of old habits got broken by covid. for more on the retail landscape on this black friday, let's bring in cnbc's melissa repko. talk a bit about how big this particular weekend is and how black friday as a phenomenon has evolved over the years now >> even before we saw the pandemic change people's shopping behaviors we were seeing a lot of deemphasis on the lines we traditionally associate with black friday. people have been spreading out their shopping this year there's a little bit of a reversal as people do hunt for eals that's drawing them to the malls, to big box stores because

they really want the bargains. sometimes they associate that with touching and feeling items in person. >> i had to take note of what terry lundgren told squawk this morning. he was asked about where the money is coming from that's driving consumer demand. he said there is money to spend. it's dwindling and dwindling fast, but it will get spent this season i wonder how we're going to talk about the consumer once the holidays flush through and we're left with maybe a dimmer picture in q1. >> yes, carl, that's a good point that terry made. that's something top of mind for a lot of retail executives best buy's ceo was among the many who have spoken about how credit card balances are going up, and savings accounts are going down and so that does raise some questions about how even if people do show up and spend a lot this holiday season, what does that mean when they get that credit card statement come january, come february does that then make for a tougher start to 2023? >> melissa, i want to go back to some of the commentary we have

gotp from retailers in the past week and a half or so. it started with macy's and we have heard others follow suit, this idea that maybe some of the shopping activity started to fall off at the end of last quarter or even the beginning of this quarter is the expectation that we're going to see a surge again now or is it really just that going back to the conversation we had before, it is more spread out and there has been some pull forward. when are we going to know which one it is in terms of the shopping dynamic of consumers? >> it till take a few weeks but to your point, there have been a number of retailers, macy's being one, nordstrom, gap, talking about seeing softer sales in the back half of october into early november. the question is does that mean consumers are tightening their belt across the board or they're just reverting back to more of the pre-pandemic holiday timeline where they're shopping for gifts closer to christmas? they kind of turn out starting today, going into cyber monday,

and then they feel more anticipation building going into christmas, perhaps being more in the holiday spirit or does it mean that people are just going to be buying less this year? i think it's going to take a few more weeks for us to really know even if they really show up strongly in the coming days, that may just mean they're looking for bargains and there could be another lull and a deeper lull before christmas >> finally, we're going to keep an eye on some of the more distressed retailers this journal piece on bed bath looking at data suggesting they're having trouble keeping inventory stock, in some cases down 40%, as they obviously are having ongoing issues with their suppliers. >> carl, that's something that's really troubled bed, bath, and beyond they have talked about how they're working on those relationships with suppliers, but a lot of brand niems like the dysons, they do hold the power. they can choose where to send those goods and they may not feel comfortable sending them to bed, bath, & beyond if they feel

they won't get paid. they may instead send those items to a target or walmart or to another store instead that really matters in this environment where retailers have to execute and push consumers to spend. home goods is already a category where people have been pulling back so having that fresh merchandise, those brand names, really matter and will make a difference for bed, bath, & beyond and help them get through this tough period or not so much. >> we're going to watch for those shifts in share and see who potentially benefits on the back end of that melissa, thanks. we'll talk soon. melissa repko. >> let's move on to china now which has been a key story as this week has moved along. the country continues to tighten covid curbs amidst an outbreak in infections. eunice >> thanks, david the reported case count for the country is now close to 33,000 the leadership appears to be tolerating this higher number of

infections which is topping the number of infections that we saw when shanghai went into its brutal lockdown back in april. but the leadership appears to be tolerating it in line with its what it describes as its more precise zero covid strategy. however, unofficial a, we're seeing more lockdowns, quarantines, and shutdowns of businesses which are much more frequent and inconsistent. in the chinese iphone city, that city is now in lockdown until tuesday. this comes after a violent protest had erupted at the foxconn facility there that's responsible for 70% of global iphone production, including for the models, the iphone 14 models foxconn has apologized for what it described as a technical error in worker pay, which appeared to trigger the dispute,

at least in part and foxconn offers about $1400 for recruits that are departing. apple has sent in staff and says that it's working with foxconn in order to work out some of these employee issues, but there is a big question as to whether or not foxconn is going to be able to meet its internal goal to have that facility up and running by the end of the month. now, the tightening covid curbs have been sparking fears of citywide shutdowns in beijing as well as in guangzhou the big export hub, that city has outright denied there's going to be a lockdown or even what it's described as a silent period so a sort of slowing down on the entire city because city officials including in shanghai have said that before and denied citywide lockdowns and then of course followed through with a citywide lockdown, residents there are quite nervous as well as over here in fact, here in beijing,

there's been a bit of a pushback to all of these inconsistent lockdowns and snap decisions to quarantine people. in fact, communities have been organizing what they have described as connected dragon pacts where they agree as a group to push back against government authorities that might want to take them away in case there's a case in their building they say they're going to stand by their neighbors, still a big question as to whether or not these agreements will actually have any effect, but the idea is that residents are organizing to try to push back against government authorities by forcing them to abide by chinese regulations. guys >> so when i hear you talk about that, when i hear your reporting on the iphone city, is the sense that there is a growing anger or unease as you start to see things like these protests in iphone city erupt, is it towards in that particular case the

companies involved or is this really more broad-based towards, say, the government? >> well, for in foxconn's case, there is anger directed towards the company itself there have been a lot of workers who have complained online and just in reporting that they feel that the company has not been making good on some of their promises for worker pay, as well as some of the extra bonuses to work at that facility. also, there's been a very low level of understanding of the virus and a lot of fear that the virus is all over the facility the foxconn says that's not the case, that they have disinfected things and it's fine, but because the messaging here in china has been very consistent that the virus is extremely dangerous and this is something that we have been hearing for the past three years, that people are terrified of getting the virus over there but elsewhere, the anger has been directed not so much at

individual companies but more at the government and that government authorities so sometimes it's on the local level, sometimes it's higher up. what's been interesting is also that the world cup has been raising a lot of these questions. a lot of people had been watching the world cup, stuck in their homes. they see that a lot of people are unmasked and people have been asking questions online, saying why is it that nobody is wearing masks? don't we live on the same planet as all those other countries what's interesting is state media has now been blurring the audience for some of those matches so that the people here can't see that people outside of china are not wearing masks. >> we talked about that a bit last week, eunice. the degree to which they were getting a window on the rest of the world, and the world cup is a big window that's remarkable they would take steps like that we'll talk more in a bit, i'm sure >> when we come back, a lot more of our black friday coverage including what the data are now

telling us about the consumer, which retailers are benefitting from those numbers take a look at the premarket here we're going to watch some other things not a lot of data here, but we'll get the fed balance sheet. yields up just a touch as futures are just south of the flat line. don't go away.

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let's go! oh yeah! it's not the same. what could you do to solve the problem? we could get xfinity? that's actually super adult of you to suggest. i can't wait to squad up. i love it when you talk nerdy to me. guy, guys, guys, we're still in session. and i don't know what the heck you're talking about. welcome back on this black friday, who is winning over consumers whether it's brick and mortar or online kristina partsinevelos is following the data

she has the breakdown for us >> right now, we're seeing 1.3 million in sales per minute. over 3 million people around the globe are spending on black friday this morning, according to shopify data. that's $1.3 million, a lot of stores haven't opened yet. according to salesforce, the average online sales and we're going to keep rolling with that script, the discount was 26% globally that's actually 3% higher than last year and is even bigger discounts so even bigger dist counts in the united states. retailers are of course getting rid of excess inventory and shoppers have waited longer to start buying because we had concerns about shortages and shipping delays. but we have got retail announced on the ground and their reporting back to us right now we're told that gift cards are making a comeback today, with searches rising 427% year over year as people look for cash back and credit on their

purchases. now, for the investors that are listening, we pulled data and looked at the performance of the s&p 500 and retail related etfs from november 1st to new year's eve over the past five years that's the typical holiday season the average return for the s&p 500 in that timeframe was just over 4%. when you compare it to the online retail etf, you can see that was only up 3%. then lastly, xrt, the biggest winner of the group over here, 6.6% during that same timeframe. some of those individual names that we are talking about would be, you've got look at that, franchise group, which owns vitamin group as well as pet supplies plus and a few other furniture stores, and then boot barn, all during that same two-month timeframe, up 30%. guess was up there, up 28%, followed by nordstrom as well. these are some of the stronger names just over the last little while. we can see shoppers are heading out, however there is a delay

compared to last year. or the last two years, i should say. >> we're not done. we're going to get ulta next week, dollar general >> 9:00 a.m. eastern >> stock slayers i see what you did there >> you liked it. i didn't say it, but we were proud of that one. we love alliterations. maybe not everybody does, but we do or i do. >> thanks kristina >> when we come back, the big box retailers hoping for a black friday boost we'll get a live report from the ground take a look at futures as we start the shortened session for stocks in just about 11 minutes. this thing, it's making me 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. uh, how long are you... i'm done.

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there's a lot alstake for the big box retailers. let's get to bertha coombs who is at a target store in fairfield, new jersey. good morning, bertha >> good morning, carl. both target and walmart have talked about their consumers being pressured by inflation and less apt to spend on discretionary items but 'tis the season for discretionary spending while they're trying to coax them into the stores, they didn'topep all that early. this target opened at 7:00, walmart at 6:00, but not with the big door busters we saw in the past that prompted people to come in the first hour the question is whether they can coax consumers to loosen the purse strings this black friday weekend. critical for target which already said it had to discount inventory heavily in recent months consumers have been looking for black friday sales and when they looked online, walmart got the most traffic online. target came up last behind the

big box retailers, including amazon now, analysts at evercore this morning say that all of the major retailers are starting to see more of an uptick in online traffic coming into this weekend. and number of analysts do expect to see more people in store this weekend. but in some ways, guys, it's like we're back to normal before the pandemic, when stores and consumers are playing that game of chicken, to see just how long as a retailer you can wait before you really have to discount things and consumers waiting them out there are four weeks until christmas so they have time. back to you. >> bertha, i see a few folks behind you, but to your point, it doesn't look like it's brimming with people, at least at this early hour yet that being said, the shoppers that are there, what they are buying are there certain specific types of items you're seeing trends in terms of demand for? >> sort of the biggest holiday items i have seen so far, handful of folks buying

electronics, buying kitchen appliances, those are some of the most heavily discounted items. in terms of shopping for clothing and things like that, i spoke with one family where they said, hey, we went to walmart when they opened at 6:00 a.m. and got here at 7:00 a.m. when they opened and didn't see those bargains in terms of clothing and things like they they were looking for, so they're actually waiting. >> meanwhile, there's been some reporting about the holiday seasonal hiring we tend to get at the major retailers not quite as robust in past years. is there a sense that staffing is appropriate for the crowds or not? >> well, given the fact that we're not seeing that sort of craziness, at least in the first few hours of the morning, the staffing seems appropriate and in some cases it seems like there's more staff than shoppers now that things have died down from the first morning rush. but you know, a lot of folks may besleeping in after a late

night and lots of football, so we'll see what happens as the day progresses >> it's a long day ahead, and there was some good football yesterday. bertha, thanks bertha coombs in fairfield, new jersey, this morning take a look at futures again, abbreviated as the opening bell is coming up in five minutes

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one of the joys of putting covid behind us, the best we can, is returning to old traditions here at the new york stock exchange today, it is kids day. pretty good turnout, i would have to say. santa is going to make an appearance there's food and drink they can trade maybe if they want go to post eight and make a market and a stock >> a smorgasbord to be had a great tradition. wonderful to see this back in action again on a day like today. >> very nice interesting too, given we just talked about some of the restrictions in china. we obviously have made a lot more progress in this country, whether it's about travel or

going to the movies or shows or even things like this. we're glad to see it >> absolutely. it's worth noting, given the fact you are seeing some of those headlines in china, some of the headlines out of here, too, with different viruses running rampant because it is the holiday season this morning, preact, you're seeing some health care names trading higher >> yeah. and to the story regarding china, of course, we heard from eunice and we will again later in the program alibaba shares which often are used as a proxy for what's going on there, are going to be down another 2%, 3%, maybe more, 4% when we get started trading 40 seconds from now >> as for the week so far, thanksgiving week is usually strong for equities, but through wednesday, we're up about 1.5%, which bespoke said would be the 13th best thanksgiving week since 1945

so the melt-up has been taking place. as you have yields a little lower, jpmorgan yesterday looking for better demand for global bonds in 2023 as supply rises. here's the opening bell. the big board, it's american express celebrating small business saturday. and at the nasdaq, new york city mayor eric adams also celebrating small business saturday that's a franchise that amex got going long ago to compete with black friday >> another shopping day, more data to add to the pile we're continuing to assess as we glean more detail around the health of the consumer and what is a high inflation environment. and certainly worth noting that i would imagine it's not just investors and market participants that are watching and economists watching the

numbers s but also the fed we went through minutes suggesting a number of officials are looking to step down the size of the rate hike come next month. but of course, data is going to be everything. >> minutes were really interesting. kind of got -- didn't get a lot of attention given it was the day before thanksgiving but they talked about, quote, various participants believing the terminal rate would eventually have to be higher than they previously thought normally, the fed says many or few participants, so that's going to leave us scratching our heads. by the way, next week, the data flow will resume we get jobs friday pce on thursday. jolts on wednesday powell is going to speak at brooking on wednesday. so the picture regarding the fed is going to fill in in the next five or six sessions >> a very busy december, and then of course, you get another cpi report just as the fed is meeting ahead of that policy decision as well. in the meantime, just taking a look at the major averages, we

are down a bit this morning, to your point it is one of the lighter trading weeks of the year. certainly doesn't take very much to move it one way or the other because volumes tend to be lighter but the dow is slightly higher the s&p is trading at the flat line it is above 4,000. 4024 and the nasdaq is the underperformer, down .5%, because tech stocks are largely under pressure >> a couple stories out late wednesday that we're seeing some impact, the one we mentioned, the top of the program, is a politico story involving microsoft. of course, remember, it was january 18th of this year when microsoft announced its intent to acquire activision. $95 a share in cash, and politico on wednesday later in the day had a headline that basically said the ftc likely to file an antitrust lawsuit to block that they were citing three people with knowledge of the matter again, i want to caution people.

we'll see. certainly no shortage of those who believe from the very beginning that this deal was going to have some significant impediments when it came to regulatory review, not just here in the united states, by the way, but as well in europe, with the eu, and even in china with the cma. the stock you want to look at is activision you'll see it here, which is down about 3.5%. but the point is it has been trading well below the $95 share cash offer from the very beginning. as you can see activision shares had been once higher than that but certainly have not been anywhere near it once they announced the transaction. >> sony has been very aggressive in terms of pressing its case in the eu that's kind of going to be first on the calendar here in terms of what they can potentially work out. can they get the eu done can they make certain remedies for example, perhaps saying, all right, we'll make sure call of duty is available on the sony playstation for at least a ten-year period after the deal

closes would something like that suffice to satisfy u.s. regulators here at the ftc again, unclear, but there has been another sort of theme involving this, which has been that even if this deal were to break, he would not see a significant sell-off in shares of activision. and obviously as i pointed out, trading well below $95 almost throughout the idea being call of duty, that franchise, has rebounded nicely, and the ceo, who was in the midst of some difficulties at his company, if you recall, has sort of outrun those and may very well be happy to both be ceo and sort of not dealing with the distractions that he was in terms of internal problems at activision we'll see. if in fact the deal were to break, you would still have selling pressure, but we're keeping an eye on it as we move into december. >> what's interesting is the stock was upgraded by baird on wednesday.

upgraded by mkm last week, was upgraded by rayjay on the 10th you don't often see sell side analysts change ratings on companies awaiting big deals we have to game out what happens if it doesn't. >> i think some of that is based on the fact there is a belief that, again, were the deal to break, were there to be a mutual termination, for example, that you simply would not see the downside in activision some even argues perhaps you would get a rating a bit higher. that said, we have seen recent weakness from taketwo. the peer group hasn't been performing particularly well, but there's saens things have calms and improved over the last ten month at activision during this period. >> the video game industry, it would seem, is at risk of posting its first annual sales decline in at least a decade we had commentary from some of the video game publishers basically suggesting you're not going to see some big

blockbuster releases that would be expected during the holiday season in years past as well so certainly, there's a bigger broader dynamic playing out for the video game industry. also really noteworthy about microsoft piece of this deal puzzle because that had been seen at least until more recently, as the name that would be potentially immune to tight deal making scrutiny because of its own history of being looked at by regulators in decades past versus some of the other big tech names so the fact you're seeing this scrutiny from what would be a vertical integration kind of speaks to i guess the administration's take on deal making across industries writ large. >> there are many who would question whether there is in fact or should be a case made. in this environment, it's not -- it seems less often that the case being made is necessarily based on the underlying law as much as it may be on just simply not allowing the big to get bigger even if in fact it

doesn't necessarily pose a true anti-competitive implication in this one you're talking about protecting sony essentially and saying, all right, what could microsoft do to shut sony off from certain titles it would then control because it would want to advantage its xbox service. i don't know we'll see. but especially as we get into closer to the end of the year, we'll start to get some answers here >> you think it puts the ice on mega cap tech m&a in general or at least cools hopes for better activity >> if they come after them, i don't know it's funny what i hear actually is from bankers and lawyers who work on these potential deals is surprise on their part of the level of activity so far, not that you're seeing, not public announcements, but the willingness of ceos even i have heard of fairly large companies to consider doing deals in part because they're seeing something they have been looking at some for time at a price they feel has become relatively cheap. again, it doesn't mean these are

going to get to the finish line, but antitrust as a gating issue has faded a bit at least in the conversations i'm having with bankers who are surprised to see a letter sent, for example, saying hey, we're kind of interested, we should get together it doesn't mean those deals are ever going to get to the finish line based on whether you can negotiate a price and regulatory is a significant issue >> speaking of banking, rbc with a note on deutsche today, basically arguing the restructuring is not getting enough credit from investors a wire story about deutsche beefing up their investment banking operations in asia and david, i know you have been watching credit suisse, new intraday low after your reporting earlier. >> that was on wednesday, and again, they completed the $4 billion swiss franc offering of shares to help bolster the credit sheet of credit suisse. the question we have had and when i say we, i'm reflecting

what i'm hearing from many people in the marketplace is simply whether it's going to be enough that outflow of assets particularly from wealth management where it was centered was surprising to even executives i believe at cs, in terms of the fact, the numbers which were about $85 billion overall out. remember, as much as 6% at wealth management. and the fact that it didn't stop so what appeared to be, you know, an offering that was going to actually be used in part to add to capital, help initiatives that were going to be under way, retention packages, may now only be enough to keep the rating agencies happy, to maintain an investment grade rating, but not enough to do those other things. what that means is we expect there might be more behind it, and that would obviously be more dilution for a company that has about a $9 billion market value. as we pointed out, last five

quarters of losses equal the current market cap >> yeah, outflows 84 billion francs in the first six weeks of the quarter. a lot of reporting suggests maybe ubs and morgan stanley get some of that, get some of that share or at least that interest. >> yeah, the question is where it's gone. another question, though, is even if the worst were to occur here, there is nobody who believes the swiss government is going to let this thing go bad they're going to force it somehow to -- they'll bail it out, force it into ubs, who knows. again, that's conjecture at this point, i want to make that clear, but it does go to the question as to why you would be worried about your assets being housed there if in fact almost everybody agrees they won't let this thing go. >> all right for more on markets more broadly, we are joined by oppenheimer asset management chief investment strategist john

great to have you on this black friday let's start a little bit, kind of a middling day for the major averages as to be expected on this holiday shortened trading day. in general, your thought on where we are when you have the s&p closing earlier this week for several straight sessions above 4,000 again. >> thanks for having me on, morgan great to be on cnbc. i have got to say, you know, we're ending a year that has really been for both bears and bulls at different points with the bears having the overall upper hand but we see here a nice rally that has really come in since october 12th with the s&p 500 up about just under 13% from that, and it includes leading sectors, materials, industrials, financials, and utilities. okay so you look at that, and it's a spread you have some value, you have

some growthier value as well as defensives and cyclicals it looks like investors are coming back into this thing. we think it likely holds our target for the end of this year that we put in, in the fourth quarter and adjusted fourth quarter -- adjusted target was 4,000 we're a little above it. we think it will likely be exceeded >> so what are you expecting come 2023? because we keep hearing about this potential for an earnings recession, there's obviously the questions about an economic recession. where do we go from here what does that mean in terms of your price target looking to next year? >> well, we probably won't put in our price target until we're into december, probably about midway, but for where we stand right now, we think the equity market is fairly well priced in recession earlier on then it's deciding that there may not be recession and the bond market looks like

it's sort of caught in between so we would have to say with part of it looking like at the short end of the curve the fed continues to hike, and then the ten-year having come off its high with the two-year, it looked like the two-year was at about 4.5% the last time i looked this morning. so where we're standing right now is that it's a mix and match in terms of opinions but we think things are getting better. we're actually headed out of the woods, but we're not out of the woods yet. it looks to us if you want to own consumer discretionary, if you want to own technology, two of the worst performing sectors this year, although much better performers when it -- in terms of technology since the october 12th blow. and then looking at things like financials and industrials look particularly good to us with materials and energy likely to still do well. we don't think energy will do as it did this year, the only

sector up almost 60% on the year >> john, do you think, i mean, there's been some technical work trying to game out the notion that we're actually now in year one of a new bull. and looking at historically what that -- what returns in that environment have meant that's obviously really leaning on the idea that we will get a soft landing how much does that resonate with you? >> it resonates fairly well. we are intermediate to longer term investors so we don't count as heavily on technical analysi as traders might, but we will say this we tend to agree with the technical analysts here, and we do think it's very possible. we think we were in a bear market within a secular bull market that is driven primarily by things like technology and globalization, neither of which is going away even as the global supply chain is diversified away

from one country's centricity, away from china and other countries. we'll still be global and we'll still have technology. they're both counterinflationary, longer term trends so it looks good to us >> so john, final question for you here we were talking a little bit about credit suisse, whether it's credit suisse, what happened with the ldis and the pension funds in the uk, whether it's ftx, all very different situations with their own specific stories just to be clear but all of them happening because we had this world that's awash in stimulus and liquidity and now you have the fed and others central banks tightening and pulling all that liquidity back out of the system are there certain areas when you look across markets that you see as pain points and you would steer clear of or be wary of >> at this point, we wouldn't be aggressive on european banks at this point when it comes to europe, we

would be more looking towards exporters that can benefit from sustainable economic recovery stateside. this is the end of free money is what we're seeing from the federal reserve as well as from other central banks around the world. it's bad for highly leveraged players but actually healthy for the overall global economy, we believe, as well as for the equity markets and even the bond market where for once bond issuers are beginning to pay for the privilege of borrowing money and bond buyers are getting something back in terms of protection to a certain degree against inflation. >> yeah, we knew that era of negative yield debt, that was not healthy either so we're trying to find something more in the realm of the normal john, appreciate you coming on on a black friday. very much. great to see you again >> thanks, carl. thanks, morgan >> as we go to break this

morning, let's look at treasuries, speaking of which, we have most of the curve up a little bit but the two-year down just a touch, south of 4.5% as we said, markets close at 2:00 eastern time. yields currently as you can see. we're back in a moment

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as holiday shopping kicks off, 166 million people are expected to shop over the long weekend, according to the natural retail federation. cowen has a note this morning detailing which retailers stand to gain this holiday season. joining us is oliver chen. great to see you. >> great to see you. happy black friday as well

>> i wonder what you make of the week, some of the discipline we saw, for example, as macy's, some of the better than expected guidance at abercrombie? >> the inflation is hitting the middle to lower income consumer. there's a tight labor market at 3.7% unemployment. there's a lot of positives about the consumer, too. the consumer is going out again. inflation is negatively impacting consumer discretionary categories we like macy's we like walmart. we like ulta shoppers are back this black friday season. mix signaled highly promotional, too. >> is it your sense retailers got religion on inventory early enough to salvage what might have been a much more difficult environment? >> retailers are working hard to work through inventory now there is still too much inventory in the marketplace what they've done is guided gross margins lower and there's

lots of planned promotions so, what's happening and what we're seeing is a wide array of promotions at 20% to 40% off they're widely available so inventory numbers are negative and they still need to be worked through, depending on what category. >> we talked about it earlier in the show, but there tends to be this seasonal trade where retail stocks move higher coming into this time of year. we're seeing it now. just looking at xrt, for example. is that still a situation where investors can jump in and trade right now, at least in the near term or maybe steer clear because there is some uncertainty? >> i think you have to be cautiously optimistic and pretty selective in what you're thinking about we like recommending retailers that have inflation resistance, such as luxury goods stocks, such as retailers like costco, which offer exceptional value.

what we're still seeing is a pressured middle to low income consumer and inflation is going to be a big negative for the next few months at least. it's a mixed picture. >> oliver, it's david. what's the unifying theme, then, in terms of your recommendation of ulta, walmart and macy's? >> i would say all three offer very strong values to the consumer at wall matter you have consumer staples piece. 50% plus grocery ul that is a beauty retailer all in one place that's a very good category. and macy's has done a very good job across a diverse portfolio all three are offering great gifting assortment as well and they have very clean inventories coming into a tough situation. >> what do you think early next year looks like? if terry longron, who was on, and some of that excess gets worked down by next summer, what

does the retail sales picture look like then >> i think we're going to watch inventory levels january will be a telling month in terms of how much clearance there will be. retailers are really calibrating to be as clean as possible for next year. we're optimistic things can get better however, the savings rate, savings dollar, safings percentage are something to watch, also rising credit usage. these are all things we're thinking about hopefully the interest rate environment gets more favorable. that will have an impact in terms of how the overall economy looks. unfortunately, consumer confidence, that barometer is a negative there are positives and negatives in terms of what we're seeing people being back in stores is very exciting to see and retailers thinking about giving promotions to customers in an easy way, that's a positive, too. people are going out, traveling, wanting fashion, wanting to look great for parties, et cetera

that's positive as well. >> oliver, appreciate that great to see you as we see pictures of shoppers in stores. when we come back, we'll take a closer look at apple facing some challenges as it looks to capitalize on the holiday season a big laggard on the dow what if you were a major transit system with billions of passengers taking millions of trips every year? you aren't about to let any cyberattacks slow you down. so you partner with ibm to build a security architecture

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good friday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla along with morgan brennan and david faber. retail is a big conversation on this black friday but watching the lockdown in china dow up 140 coming off the highest close in seven months. >> 30 minutes into the trading session. here are three big movers we're watching this morning. we'll start with activision/blizzard, that stock is sliding on reports ftc will block microsoft's buying the video game publisher. tesla recalling more than 80,000 cars in china over software and seat belt issues. those shares are trading down

0.50%. manchester united those shares are surging following reports earlier in the week it's considering strategic options, including a possible sale. the stock is up more than a 60% this week alone. it's up 13.5% right now. we'll see. >> not a lot of liquidity. big day, by the way, uk/u.s. later in the world cup. let's move on to apple their products are usually in high demand on black friday but supply chain trouble could lead to weaker than usual sales this holiday season seema mody is on the ground. >> reporter: we are at apple's flagship store where foot traffic is increasing over the last hour. apple's loyalty has been put to the test the way for an iphone pro and max, reaching the highest level in six years morgan stanley, their analyst tech suggests roughly 30 days.

in europe, lead time of iphone models extending to 40 days in the uk 39 in germany. a similar wait time in china, 43 days there if you're looking to buy an iphone today and hoping to have it under the tree by december 25th, you'll likely not receive it on time that's the big concern going into this holiday shopping season it's very important for apple. iphone sales tend to decline 30% from december to january, according to ubs, as apple tries to resolve issues at its largest iphone factory in zengzhou, china. overall, taking a step back, jeffries analyst say covid disruptions are costing apple $1 billion a week in missed sales some promotions are being offered inside this store, a $250 gift card if you buy the higher end mac pro $50 gift card if you buy the

lower iphone 13. we've been watching the foot traffic at 8:00. 50 people are in a separate line they are hoping to get their hands on the latest iphone pro i spoke to a sales associate who said they have limited inventory available at the store they didn't give me the exact amount unclear how long that will last. this is the flagship store a number of international tourists walking into the store. i spoke to a number of people from mumbai, tel aviv and london carl >> thanks for that seema mody in midtown. let's keep that conversation going and bring in oppenheim's morgan yang to talk about the potential supply disruptions it sounds like your thesis any kind of scarcity or extended lead teams enhanced the perceived value of the brand and they could potentially make it up next year >> yeah. definitely i believe whoever is looking for

iphone this holiday season is willing to wait into the next quarter. fundamentally, android phones are readily available but doesn't really have the system and hardware advantage iphone has. so, those consumers who can't have their hands on the iphone before christmas is willing to wait and not going anywhere else >> some of the video we've seen come out of foxconn. >> so, we have to look into two ways one is the recent unrest, the clashing of workers against factory workers. those are the result of disagreement over incentive pay. those workers are not yet production workers working on the assembly of iphones. they still have to go through the training period.

and so believe the core of the workforce working on the iphone are still in place just the capacity is not at a level that apple expects or foxconn expected. >> interesting martin, we've seen apple begin to diversify its supply chain outside of china, and more meaningfully because of the pandemic, is your expectation that continues and accelerates and how quickly? >> we expect india to be a major hub for iphone manufacturing in the next three to five years right now india is mainly manufacturing iphone 14 and older models we believe that the -- with worker unrest, you know, covid policy changes, and major growth coming from outside china, india is to be the main focus area for apple to diversify the supply chain.

>> i mean, apple's 7% of the s&p. the s&p is up, though. apple is down 1.6% martin, what do you think that is due to? the covid lockdowns, continued concern about that >> i think there's a number of factors. number one is loss of capacity, and then i think there's overall growing fear of extended consumer pressure into first half so, iphone has done relatively well much better than its competitors in the past two years. but the cycle is likely to lengthen and subsidies is likely to be lower than two years into 2023 that may reduce the overall shipment outlook for iphones when it comes to next year >> finally, martin, i know you cover activision/blizzard. is an ftc lawsuit in your baseline scenario? >> this is not in my baseline

scenario but i've been asked about this question numerous times, how likely does this deal get through? my baseline case is that when you look at the market share and overall competitiveness of xbox after only activision, the deal is going to go through but a lot of this discussion is politically motivated and so -- which makes the outcome very, very hard to predict >> martin, finally looking at video game publishers you cover more broadly, your expectations for this holiday season, since i know in the past it's tended to be a strong time of year from a sales perspective for them >> exactly this year we still expect very strong growth for specific publishers those are activision and sony. video game industry, there are talks about gaming industry being recession-proof.

i tend to disagree it is more discretionary spending for consumers and it's driven by content this year into the holiday season, sony as well as activision has strongest content for consumers and definitely we are seeing record-breaking results coming from those two publishers for their very high-profile franchise, since as call of duty >> martin, appreciate that very much thanks for helping us on two big names in the news today. we'll see you soon >> thank you for having me. as we go to break, take a look at the road map for the rest of the hour, including how the social giants like meta, and youtube are building a revenue stream this holiday season that are not ads. we'll be live in beijing china expanding lockdown measures in rising covid cases. and a lot more on black friday how retailers are preparing for the holiday season

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and now a lot more people can. so let's go. the digital age is waiting. welcome back positive "squawk on the street. markets seem to be poised to end the week on what would be a higher note. of course, it is a trading shortened day here at the new york stock exchange. joining us is chief investment

officer for private wealth jason. i see your note, thankful for a healthy consumer let's talk about the consumer ask what your expectations are some would say a mixed picture and certainly some concern heading into the new year. where are you? >> consumers are going to be able to spend more this time the retail federation expects them to be able to hit record highs in terms of dollar level spending across the board. the problem is, they are facing inflation. with inflation, they're actually going to be able to buy less this year in terms of magnitude of goods than they were in prior years. the consumer is probably not going to be that happy about that >> what does that mean for your investment approach right now? are you predicting the consumer will be fairly strong or are you more concerned, perhaps, than some others? >> consumer will hold, they're going to keep spending and

spending their wallet because they are making more money but will be able to buy less goods that leads into this circumstance that we all find ourselves in the fed has raised rates in reaction to inflation. inflation's high, making spending at a -- therefore we are facing a slower economic environment hampering growing next year. >> to dig into that a little more, jason, we're starting to see weaker data, particularly on the industrial side. you're starting to see pain and ripple effects of the areas of capital markets. consumers and consumer strength sort of the last piece, the last domino to fall if that's the case, does that mean there's more pain for equity markets to be had going into next year as well >> it's one of the last holdouts employment is one of the last

holdouts at this point in time consumer is the main pieces. capital spending is starting to slow a bit businesses are feeling some of that pain. we're seeing earning estimates to come down we expect that to continue next year under the pressure of inflation and higher interest rates going all the way into next year. the fed's expected to keep rates at a level that's meaningfully above neutral through the back end of next year at minimum. and that pressure will sit on both businesses. businesses primarily but probably with ripple effects to the consumer and that creating the mild recessionary environment we're likely to face >> where do investors put their money given that fact and what do they steer clear of >> number one place to put that is with bonds. bonds are more attractive across the board and that's throughout the credit spectrum, although more investment-grade bonds are probably the more attractive place to be in the face of a recession.

that also means if you're overeighting bonds, underweight equities, therefore the moderate defense positioning within portfolios quality equities as opposed to the wings of growth or the value cyclicals is a preferred place to be due to stability and less leverage on the balance sheets, as well as down the market cap into earning small cap companies, which are trading at material discounts in relation to larger cap peers. >> where does that leave international equities earlier in the year there was a sense by some that china growth was going to be better than it turned out to be, maybe europe as well, that the u.s. might actually, in terms of q4 gdp might be the silver lining on the global economy do you think that continues in the next year? >> europe is the silver lining for now. we're probably still going to look to be the better economy of the bunch of economies when you

look abroad heading into next year that doesn't mean we don't face some weakness going into next year in terms of international equities, as you mentioned, that is where the majority of the economic damage is feeling -- being felt the discounts are there from an equity perspective, but we are at this point in time, still recommending investors stick with underweight to international equities having said that, the currencies are down a lot the stocks are down a lot. at some point in time, that portion of the market will get more attractive just due to the magnitude of the discount that is priced into those equities. >> jason, thank you. appreciate you taking time >> thanks for having me on still ahead, much more of our black friday coverage including how mall owners are adapting to this live holiday season we see video from locations from around the country

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welcome back to "squawk on

the street." a number of energy-related names are rallying today the xle is on pace for another week of gains. that would be fifth in the last six weeks. as you see, the etf is up over 60% year to date check out shares of some of the group's top holdings exxonmobil, eog resources, marathon petroleum, all amongst the top holdings and all in the green today. >> of course, the earnings from this sector intoing the broader s&p picture as well. we have a record of people expected to shop, expecting 166.3 million, that would be a record joining us is ray washburn great to have you back on the show given the fact you do have your hand in so many different aspects of consumer-facing businesses here in this country, what are you seeing so far during this holiday week and how is it reflecting back on the health of the consumer

>> well, i'll start with our luxury shopping centers. we're seeing tails through this year have been pretty good compare to last year the things that are really selling are rare items like watches and women's accessories, things like that sales were up substantially through the year starting about six weeks ago, we did start to see sales start to plateau on the luxury sale side it's been very, very positive. >> why do you think that plateau? is it ahead of the holiday spending season? is it because of inflation and maybe, perhaps, representing a pivot in terms of consumers' appetite to spend? how do you see it? >> well, i'm also operator of about 60 restaurants throughout all kinds of price points. we saw the same thing in our restaurants about six to eight weeks ago. we saw consumer accounts starting to drop it's interesting sales are still very, very strong but we've all taken price

15% to 20% in the last couple years. so, even though sales are very robust, customer accounts have started to drift i think overall consumers are getting leery of the recession potentially coming up. so much of what we hear in the press is people are pulling in the the reins a little bit we've seen it in our shopping centers and restaurants. good sales but not the robust one we were having up until about the first of october >> ray, sometimes when you're on the show, i have flash backs to times you came on in the depths of covid where we wondered whether or not people would ever shop or go to a restaurant again. and we were hoping for a large stimulus package out of the government there's been a lot of buyers' remorse because of inflation do you regret any of those >> you mean from the consumer -- from the ppp programs and stuff like that? >> any of that anything that was built fiscally to support the economy when we

didn't know how this health crisis was going to end. >> i'll speak from the ppp side. our firms employ several thousand people. and if the ppp program hadn't been put in place at the time, this was in march or april of 2020, you know, to assemble your staff back after you let everyone go would have been an impossible task. what the ppp did was three things it allowed us to pay rent, pay our utilities and salaries even though people didn't do a lot of work during that time period, we were able to keep the band together. otherwise once they scatter to the wind trying to put 30, 35 years of a company back together that dissipated literally overnight would have been an impossible task. if you take that through the entire economy, that would have been impossible to do. now, fast forward to the money given out and things like that, i don't think that was a good idea the ppp of keeping companies together, that was a good idea

and it's proven through the economy. as you see from the small operator who had five or six employees who got ppp money to thousands of impeesz it was the only way to keep the economy stitched together from march of 2020 to july of 2020. after that the economy could take care of itself. that's when it got out of hand and they continued to pump money in this economy. the money that went to us to pay salaries, that was a base salary people were getting anyway what happened later with the money coming out, that was frivolous spending, in my opinion. >> let's go back to the current economy. you mentioned you started to see a falloff beginning in october is there an aanalogous period, ray? are you as we head into next year pulling back in certain areas or having expectations, perhaps, that that consumer will not be as strong as perhaps had been thought even a couple months back?

>> sure. sunoco, we're one of the largest sellers of gasoline in the united states. 10,000 points of purchase. whether it's a gas station or fbo or marinas, things like that we have seen volumes come back from a year ago. first half of this year, things were dropping. that has come back that is totally price driven that does put more money in the consumer's pocket to spend on the luxury side, the higher end retailers, i don't know what to say i think people are getting cautious going into this holiday season i was surprised on the restaurants. i called around this morning before i came on to a lot of my friends in the country in the restaurants, and they're seeing the exact same things. customer accounts are down 8% to 10% nationwide from my analysis, people i know, in the restaurants again, sales are up because we raised prices 20%. it's going to be an interesting thing with a lot of these companies when they come out and

report record sales. the real thing to look at, how are your customers >> i mean, we've all had sticker shock going in a restaurant these days, i think it's fair to say. is there any elasticity for these operators to lower prices or are they simply responding to what we know is inflation across the board? >> when we look at our commodity prices, things have flattened out this year. beef was up 15% through august they flattened out the last three months chicken has started to go down things like avocados and produce is starting to flatten out we've had to hold prices up because labor costs have gone up you look around the country at the cost of labor. the other prift to our deal is labor hasn't been difficult to hire people. rear still short at all our restaurants a few people but nothing like it was or what people talk about. i think labor is -- labor has flattened out.

commodity prices have flattened out. do we drop prices? we really can't. rents have skyrocketed labor costs are up we still need that margin. our overall margins are less than they were in 2019. >> the other piece of the puzzle is real estate you're a real estate developer what are you seeing within that market right now in terms of pricing and your ability to access capital to develop? >> capital markets have totally shut down. the big money center banks, i'm just talking real estate, chase, b of a, any of those guys, they're not doing any loans through the end of this year the regional banks have pretty much shut down we do a lot of development this multifamily and shopping centers. when you talk to them, the reason they're shutting down is they can't roll off existing portfolio construction loans they have into the capital markets because they have shut down with that shutdown, you can talk to any of the big people, jrl, to their mortgage brokers, it's

basically the brakes got thrown on about a month ago because there's no new money to pump into the market. if you had a unique situation, could you find money yes, you could the price has skyrocketed to where class a apartments were trading in the 3%, 3.5% range. they've shot up to 6%, 6.5%. sellers don't want to sell anymore because they're looking at last year's prices and buyers the same there's a lot of praralysis you'll see volume dry up for loans that weren't committed to previous about 60 days ago. >> ray washburn. it's always great to get your insights, especially on a day like today. >> good. thank you. coming up after the break, we'll talk to the ceo of ll bean we're back in a couple of minutes.

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hour the u.n. human rights council voting to condemn iran's recent crackdown on protests and planning to create an independent fact-finding mission to investigate alleged abuses. protests were triggered by the death of an iranian woman who was arrested by morality police. over 50 million birds have died from avian flu in the u.s that makes this outbreak the worst in u.s. history. losses of poultry flocks sent prices for eggs and turkey meat to record highs this year. adidas has launched an internal investigation following an article in "rolling stone" of

allegations by inappropriate behavior by rapper known as ye the german athletic brand turned a blind eye to his behavior. adidas says it takes these allegations very seriously and he's running for president david? >> thank you social media giant such as meta, snap and youtube, they're all trying to take advantage of the holiday shopping season by building a new revenue stream that is not advertising. our julia boorstin joins us to explain. julia? >> david, this year the social platforms are counting on you to do some shopping while busy posting thanksgiving pictures. 34% of shoppers say they plan to do shopping on social media this year, up from 28% last year and 26% in 2020, according tocy aur say by deloitt

sales are projected to grow to about $1.25 trillion next year all of this offers meta, snap and youtube, all struggling with an ad contraction, an opportunity to lock in e-commerce advertisers and ultimately diversify their revenue streams. meta is offering advertisers more ai-driven tools, including this tool that automatically creates up to 150 different instagram and facebook ads meta telling us advertisers using these ai campaigns so you a 32% higher return. snap is offering new ai-driven augmented reality shopping tools, like the new balance lens it's the first of its kind lens. a bot asks snapchaters questions about the person they're shopping for and voice based machine learning analyzes their answers and shows the user gift ideas which users can click to buy. youtube is focusing on expanding the shopping capabilities in

shorts that's its tiktok rival. they're doing that by doing a week-long shopping event with influencers selling their merchandise. youtube will take a percentage of creators' affiliate sales nor now meta and snap are not taking a cut of commerce right now they see these tools as a way to driver advertiser and consumer engagement but they could take a cut down the line >> interesting, julia. thank you. more on that topic, on the consumer advertising holiday, let's bring in l.l.bean ceo steve smith. great to see you again. >> thank you happy thanksgiving to you and your family. >> and to you. speaking of advertising, i saw a number of your football adds and wondered how aggressive you are. >> we're bullish about the holiday season it's an interesting year but the customer is really resilient and we're seeing great traffic

through e-com and stores are full i was at our flagship campus in freeport this morning and the parking lot was full and people were shopping. feeling cautiously optimistic in line with others' projections for the year. >> we heard a lot of retailers the last few days. the dynamics are similar between them and that is, we got goods a lot easier than we expected to inventory is a little bloated now. we'll look at being promotional this season. how much of that makes sense with what you're seeing? >> i definitely hear that and see that from other retailers for sure i think they essentially overbought after last year's high demand. for us, we feel we're in a great place. last year we encouraged everyone to buy early this year we're seeing real-time shopping people coming in, buying now, whether for the holiday or for cold weather for us, we don't play deeply in

the promotions game. we're not hung with a lot of inventory. our merchants worked hard to place products on the ticket with a fair price. that allows us to not be too promotional because we know we're delivering high value to customers. >> steve, it's morgan. so much of your stuff is made in america. i know a lot of it in maine. looking back over the last couple of years and everything we saw with the supply chain, were you able to navigate that more easily? if so, does this provide a template, manufacturing more of your apparel and goods here for others to potentially learn from >> yeah, for sure. our supply chain team is the mvp of the past two years. they're building the ability to get products on our customers as quickly as possible has been extraordinary. for sure our boots, our totes, dog beds, furniture and textiles coming from the united states have been easier to move around. also the global supply chain has eased up this year if you look at supply chain in

three parts where you have raw material, production and logistics. raw material is still high but logistics and movement of goods has come down which has allowed us to be in stock in a great position with key items going into the holiday >> what does that mean in terms of prices? did you have to raise your prices the fact you're well managed on inventory? does it mean you can continue to hang onto those prices >> yeah, our products take anywhere from 20 to 40 weeks to produce. what we're selling today we produced several months ago. we had major cost pressures over the previous year. we do have price increases in play this fall for us that's $5 to $10 on a key item we're not seeing a major impact on our unit sales on those items. what i'm encouraged by are our teams are negotiating for next year's products. those costs are getting closer to flat.

we are seeing the inflation on costs are coming down, which i think bodes well for the consumer in the future >> speaking of which, one of the things we try to track closely is freight certainly ocean freight and the way in which those rates have come down. how much of that can you benefit from do you think that's going to be long lasting >> i do think it's long-lasting. president spikes we had last year that were huge have come way down the cost of containers has come down the cost of getting spots on shipping has come down we feel like those are -- they're definitely higher than pre-pandemic levels. we have had to plan for higher logistics costs but it came way off the peak we had last year. we're hopeful the prices we have now can hold >> and finally, i guess, labor how much is that market loosening up, do you think when you look ahead to the next, say, 12 months, do you get a

sense it will be easier than it has been the last couple of years? >> i've been encouraged. when we do a holiday road show where we bang out 25, 30 stores within two days. every store we went you to two weeks ago was fully staffed with super high-quality people. they were excited about the seasonal staff they had, they had experience, trained, ready to go. it was the first time in a couple years we had that optimism at store level. same with manufacturing and returns, and fulfillment center and warehouse. we have been able to staff up for holiday. i do think it bodes well that good, high quality people are ready for work and we're finding them. >> that's interesting. we'll get a jobs number a week from today we'll see how much of that is reflected in the data. steve, appreciate the time >> thanks, carl. nice to see you. have a great holiday. coming up, a closer look at this year's huge rebound in

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jooishgsz. welcome back to "squawk on the street." airport volumes flying shy of pre-pandemic levels. the heightened demand has seen the airlines after turbulence earlier this year. for more on the state of travel we're joined by sun country airlines ceo what are you seeing this holiday week >> thanks for having me. we'll have record days, particularly on sunday, which is typically the busiest travel daft of the year for us. we'll be up 9% versus pre-covid levels in 2019 weather around the country is cooperating for flying, so it

looks really good. thus far it's been a great operational weekend. >> so when you say 9%, that's 9% growth in passenger volume you're seeing more people get on planes right now >> that's right. >> how is the price of those -- how does the price of those seats compare? >> we're up about 40% versus '19 levels >> okay. >> a lot more expensive to fly keep in mind, feels a lot more expensive, but the main issue we're having, like supply chains everywhere, we have fewer seats in the industry. some parts of the country are an exception. we're in growth mode most of the low-cost guys are growing but the network carriers haven't been able to come back to the levels we saw pre-covid. >> you announce the recently you'll be adding more routes starting, what, summer of next year in light of that, given the fact you are a low-cost carrier, in the midst of inflation, in the midst of higher prices, the fact

that people do want to get out and travel, has that meant more demand for the product you have on the market, perhaps even more so than the industry growth levels we're seeing? >> sure. we've definitely seen a catch-up in travel that had been sidelined through the covid pandemic so, it's real strong demand over the summer that demand hasn't let up. we're selling today through labor day of 2023. all my advanced bookings look to show the same kind of demand that we saw last summer. sole demand environment for airlines is holding up really well we're continuing to try to balance operational results with fares. i would like to see fares come down do that by adding more seats, but i have to balance out how much capacity i can add without taking operational risks i think we're striking a pretty good balance at sun country. it looks like most of the industry will have a great

weekend as well, based on the results i've seen the first couple of days sunday is the test, the hardest day for airlines on the calendar. >> those who follow the industry over many cycles, we're waiting for that moment where players start adding capacity, getting into new markets, trying to take some share there's been remarkable discipline i wonder if you've been surprised and whether or not labor is putting a ceiling on that dynamic >> yeah, i think you hit it on the latter point about labor it takes a long time to bring a pilot up, in particular with the network carriers with multiple seat types, they have to train a lot of people up and down all the left and right seats across their fleet. and i think it's just taking a long time for airlines to bring back staffing to what it was the actual pilot count is about what it was. we're employing the same number of pilots, roughly, to pre-covid

levels just a lot of training to be done and positioning and then, you know, we got a black eye as an industry in the spring as we were trying to recover into the post-pandemic environment. and we don't want to go through those operational environments again. it's a balance and i think you'll see slow growth in the airlines probably until late summer next year. >> so, next year not -- some growth but not an enormous amount then? >> exactly i think demand will exceed capacity through next summer, at least. so fares will be high. >> jude, finally beside the passenger business, you have a cargo business what are we seeing on black friday as we talk about the state of the consumer and what it means for retail and spending >> yeah, this is our peak period going into cargo right after thanksgiving we'll fly as much as we can in cargo right up through christmas

holidays it looks really, really good so, you know, our partner is amazon we do most of our -- all of our cargo flying for them. and we're as busy as we've always been this time of year. >> all right jude, we appreciate you joining us today jude bricker, sun country airline, ceo >> thanks for having me, guys. happy holidays. >> you, too. get a check on the markets this morning pretty good stability for most of the morning dow's up 167 s&p has gone green and stayed above 4,000 now for several sessions in a row. 4031 we'll be right back. stay with us

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drop everything and get to the xfinity black friday sale. click, call or visit a store today. china is expanding its lockdown measures as covid cases in the country have touched a new daily record eunice yuan is live for us from beijing with the latest. >> reporter: thanks, david china's overall reported case count is nearing 33,000 cases.

and this is higher than the number that we saw when shanghai went into its brutal lockdown back in the spring the leadership overall seems as though it's officially tolerating these higher numbers in line with what the authorities have described as a more precise zero covid strategy however, unofficially, the lockdowns and the quarantines and random shutdowns of businesses are much more frequent china's iphone city is now in lockdown until next tuesday and this after the fox con facility there, an important iphone plant which produces about 70% of global iphone output, including the iphone 14 saw violent protests rock that facility. the company has apologized, they say for the technical error they

described in worker pay which appeared to, at least in part, trigger those protests and fox con is offering $1,400, about, for departing recruits apple has sent in staff and it says that it's working with fox con to try to address some of the concerns of the employees there. but there are major concerns as to exactly how fox con will be able to meet its end of month deadline -- internal deadline, carl, to try to ensure that that facility is up and running. >> eunice, i'm curious to know your sense of apple's response we've been waiting for sort of statements i guess to be released but to what degree are they on the ground, working with authorities, and registering any kind of dissatisfaction, if, in fact, they are upset about this? >> reporter: well, all we know right now is that apple has sent a team there and they are on the

ground they said they are working with fox con because they want to address some of these concerns of the workers there but for the most part it looks as though foxconn is the one that's handling a lot of these worker complaints. the workers have been much more frustrated with foxconn itself, saying that foxconn hasn't been making good on some of their contract agreements. >> thanks. huge story massive story especially given these -- the importance of the supply chain all around the world. next week is pro week all week long on cnbc.com. some of the biggest names of stock picking are with us including lee cooperman, tom lee, cathie wood go to cnbc.com/protalktos register we'll be right back. stay with us

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welcome back to "squawk on the street" it is thanksgiving week one of the things to be most thankful for is our loved ones and it is family day on the

floor of the new york stock exchange, the first time we've seen the event since 2019. i'm joined by the kids of traders and other folks that work here at the nyse on a daily basis. guys, so great to have you, welcome, welcome so i have to ask a few questions and i'll start with you, what is your name? >> melanie >> what would you like for this holiday season what gift are you most hoping to get? >> puppy. >> a puppy, the heat is on that's a good gift what is your name? >> hudson. >> what are you looking to get in terms of a gift this holiday season >> a dog >> a dog, too. we have two dogs anyone else? what is your name? >> aria. >> what would you like >> a dog. >> we have a lot of dogs here. >> how about you >> new sneakers. >> and yourself? >> a cat >> all right

well, as you can hear here, we have some live animals in the requests and also some other really cool gifts. guys, one, two, three, let's say happy holidays. >> happy holidays. >> david, back to you. >> big takeaway, be long dogs. that's going to do it for us on "squawk on the street. "techcheck" starts now ♪ happy black friday welcome to "techcheck" i'm carl quintanilla with julia boorstin. searching for a pulse on the consumer, we've got it today, along with the latest data, stock moves, winners on this shortened trading day for stocks plus more on where e con goes from here. finally the apple breakdown as covid cases surge in china and questions continue to grow around iphone supplies going into the holidays. big show today