not sure where it is right now somebody put a chart up. >> there, too, we have indecisiveness it's back into a consolidation phase, it follows the big breakdown of that $18,300 level so i think risk is heightened there, and i would be watching very closely the boundaries of that consolidation phase a dip below it would be a breakdown. >> katie, thank you. that does it for us this week. make sure you join us on monday. we'll see you soon have a great weekend "squawk on the street" begins right now. ♪ good friday morning, welcome to "squawk on the street," i'm david faber with jim cramer. carl has the morning off let's give you a look at futures as we get ready to end the trading week 30 minutes from now. you can see, of course, we are set up for a lower open. why? well, where we begin, the jobs report for november. it did reignite rate hike worries on wall street,

non-pharm fapayrolls were up the unemployment rate did remain unchanged at 3.7%. average hourly earnings up 0.6% from the previous month. and jim, the impact, well, you could just see it on the screen there. we've also seen it in the fixed income markets, which say, more work to do, mr. powell >> it's one of those reports where, let's say the economy were tepid, and you got this report you would say, you know what those rate cuts have just been incredible they're really starting to put people to work not, oh, those rate hikes are incredible, they're cooling the economy. this is an economy that is so strong that it has not yet been hurt, or if it's been hurt, it's been hidden. and yet -- >> not a day goes by that we are not featuring some level of job cuts at a company that many people may know. these are not hundreds of thousands, but you add them up,

and they start adding up to something, don't hey >> those are very recent i think that they don't -- this week, for instance, we have had so many more than we had the week before, but they're not sizable. they're not what i expect to see by now, which is such and such a company is closing it doesn't have anybody. we haven't hit that point. many of the companies that have come public in the last 18 months, they have to be running low. >> they do they do. i want to talk about that, but you've got a lot of things circled there. i didn't mean to stop you from sharing some of the things from the report >> retail trade down, losses in general merchandise. the problem with that is, that's exactly where i was thinking about. i said, geez, furniture and home furnishing, that's got to be lower. it was le electronics and appliances warehousing, amazon.

but the others, i mean, manufacturing is good. construction's really good government, of course, is adding like mad government's playing a pretty big role in putting people to work this is certainly not the reagan administration and i just -- look at this, and i say, thank you, chairman powell, for keeping rates so low and making it so that everybody's getting jobs >> what about wages? to go back to that, i mentioned average hourly earnings up 0.6% and i'm reading from peter, puts out a nice quick note. double the estimate and october was revised up by 0.1. it was up 5.1% year over year. that's been the trend for most of the year. it's double the pace seen in the 20 years that were leading into covid. and that continues by the way, it's what you have come back to many times in talking about what powell wants

to ultimately see lower. >> yeah. >> wage growth correct? not happening? >> no, not at all. now, i now realize, look, i speak to companies but they feel anecdotal at this point. or too retail oriented or too -- but look, i follow every industry >> yes, our viewers are well aware. >> i don't know anybody that's hiring at all the companies i talk to, but they're not firing, except for, say, mark zuckerberg firing a lot of people but the big, you know, amazon's laying off some, but i think there's some much bigger layoffs. >> we've talked about the fact that we're looking at some of the layoffs. those are all well-known names >> no kidding. >> the main posture has been, all right, we're going to slow if not stop hiring, as opposed to really begin significant firing >> that's really important, because okay, so, there's a downgrade today of salesforce,

and the subtle notion is that he has -- marc benioff has too many people a lot of those companies seem like they have too many people doordash, which was downgraded today, had too many people but why are others so reluctant to admit and i think that is because they're still doing good >> right >> we had a lot of companies in the enterprise software report this week, and those companies are badly in need of layoffs, but they just don't want to do it >> were we right to unwind the rally from wednesday that resulted, obviously, from what seemed to be indications from powell that rate hikes might be a bit less than anticipated? >> we are seasonally strong period but if you think that the two-year is going to give you, let's say, 5%, geez, that's a good piece of paper. it's not there

>> no, it's not there. >> but david, yeah, i think the rally on -- based on powell, seems, at this point, ill advised, that a lot of people went to it we are a little over -- david, these are astounding numbers, for heaven's sake. everyone puts out this recession forecast, and this is -- this is a growth number. i mean, like, people have to recognize that at any given time that i know of in my 40 years investing, you got this, this is a growth forecast. and if anything, you would think that the gdp's going to go higher >> yes all those things and by the way, more people are going to have more jobs and are paying -- being paid more money to do them why is that bad? >> well, because if we find that the cpi is much more aggressive than this. >> the idea that you just have very persistent services inflation and you just can't get rid of it. >> they started all these companies.

these companies are doing badly and they're not laying off anybody. they're just hanging in there. and then you have companies that give you bad forecasts the thing is, well, after the forecasts, aren't they going to let people go? no what a great time to start out and be young you don't have to go to work you get to work at home. >> well, not as much anymore a lot of the younger people i know are really, if they're ambitious, they're anxious to be back they want to be in an office >> is "yellowstone" over >> the middle rank, their bosses don't want to be there >> there's a world cup game on monday >> they don't want to come in because there's nobody there to mentor them and teach them >> let's say you can go to your boss, there's a world cup game on monday, so i'm going to stay home is that what they do >> there's a lot more flexibility now. >> there was someone the other day saying people are working even harder because they're at home and i wanted to say, what are you going to do? >> have you looked at

productivity lately? >> i'm playing a lot of video games. who would ever answer that it's a poll, right no, it turns out that i like "1899 "on netflix it's captivating >> one sector that has brought a lot of its employees back, in fact, even five days a week almost, have been the banks. >> look at goldman >> and i wanted to turn to the banks because i know you have been talking about them of late, given what we're seeing in terms of the economy what the expectation would be as we head into next year >> the fed funds rate is so attractive for these guys, it's very '91, '92, actually, much better, when at that point, fed chairman greenspan was worried about the crisis, so he took rates up so the banks could reliquefy. banks are making a fortune they did not get hit by sammy. >> sam bankman-fried that's what you go with now?

>> i tried to get jpmorgan to take my -- what the hell was that lithium? i don't know >> you own various things. >> i think they wanted me to take seroquil. put you to sleep for three days. >> okay. all of which takes me back to jpmorgan and means what? >> well, jpmorgan's just a huge bomb hurricane jamie. sorry, you may think there's going to be a hurricane, but we don't want to see big job losses, and you didn't get them. we just wanted wage stabilization and not a lot of hiring that would have been what i felt powell knew. see, i felt powell knew. i thought he had this. you always think those conspiracies remember when you thought president trump had it and he would come out on the 6:00 and do a healthcare briefing and say, you know, i saw the number, i'm not supposed to, it's really good like, you know, he hated that "mad money" beat him a couple

days when he had that 6:00 >> i really don't know what you're talking about now >> i used to have a 6:00 program against his 6:00 program >> donald trump? >> and i believe he did not -- >> whose program >> he had a program at 6:00. >> he did? >> yeah, it was a healthcare program. >> oh, you're talking about the -- during covid. all right. thank you. can we get back to the banks >> i was way out of line with that >> you weren't way out of line you just completely lost me and everybody else listening >> it just came to my head because i'm a very alinear thinker. >> really, i didn't know that. i haven't sat across from you now for ten years. >> i'm looking at the rates going shockingly higher, so now i'm worried it's going to be 8 %. but the problem is, that's not where we have too much hiring. you have too much government, healthcare i don't know how to reverse government how do you reverse government hiring >> meanwhile, when it does come to the banks, we've got gorman quoted yesterday at some sort of conference saying, some people are going to be let go

we're making some modest cuts all over the globe, and most businesses, that's what you do after many years of growth >> well, he's a realist and don't you think some goldman people say, i'm not going to take these lower bonuses, i'm going elsewhere? meanwhile, there's private equity firms that are in trouble. but are they laying off anybody? >> not that i'm aware of what are you referring to when you say, in trouble? >> blackstone. >> blackstone's not in trouble >> i didn't mean that. the articles read horrible it's miserable it sounds beyond the pale but it's actually doing okay >> we're going to talk about the impact on blackstone's stock price from yesterday of course, we were the first to report on them essentially putting up these redemption gates, part of the product we have been talking about. >> do you think a lot of people lost money how big was the losses on, say, crypto do you think regular people lost billions >> yes >> right do you know, i always felt it was hard to understand what a

nonfungible token was because i never understood what a fungible token was. >> good point. >> you didn't think that was funny? >> that was kind of funny. that was risible coming up, elon musk is kicking off deliveries of tesla's heavy duty semi-truck. that started last night. look at that you're going to want to hear how he described let's see a look at futures. we get started with trading 18 minutes from now we're seeing negative impact to that better than expected jobs report more jobs, not necessarily good on wall street we're back after this.

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ford is just coming out with its auto sales figures for november, and i think we can go over to phil lebeau who has those numbers in hand. phil >> david, we've got a decline of 7.8% in november sales compared to a year ago for ford keep in mind that a year ago, and we're talking about the lumpiness of ramping up production as we come out of the chip crisis for the auto industry, they were up 6.5% a year ago, so year over year, you're going to see some lumpiness in these numbers in terms of how ford did with trucks and suvs, specifically,

truck sales down 1.2%, suv sales down 15% the f-150 lightning is going to get a lot of attention with ford as they ramp up production going into next year again, another month where they're continuing to grow sales, up to 2,062 overall, ev sales for ford up 103% take that with a grain of salt a year ago, ev sales were, what, they had the mach-e and you didn't have a whole lot else from ford. those are the numbers from ford. the thing that people will be watching with all of the automakers, they are not lowering prices yet, and the analysts are saying, we're not seeing the type of sales that we thought we would see, given the demand from the consumer out there. something's got to give soon, especially with interest rates at these levels. >> well, phil, i've been following, actually, from oil and gas and utility people, the actual f-150 as a factor in the electricity in this country, and as back-up to your electricity

for the places where the grid is suspect. i mean, this thing has got a life of its own, doesn't it? >> well, jim, they're optimistic that the number of people who are going to use it as a reserve power source is greater than he expected in fact, he was talking at an event yesterday, and he said, you know, when they put this in there, obviously, they thought this is a great opportunity. you've got a reserve power source with the f-150 liepgtening, but the number of people who are buying this truck or ordering the truck and saying, yes, i want that feature, that has surprised him, and i think we're going to see this with evs to a certain extent certainly, with pickup trucks. you will see people saying, can i get a reserve power source here and if i can, i will, because you never know when you may need it >> phil, i want to get your reaction as well to musk last night talking about his truck.

what do you think? >> it was okay having covered all of these since they went back to the very first tesla vehicle that they unveiled, it was kind of subdued, guys. relative to what we usually expect from elon musk, it was pretty subdued it was relatively short, 40 minutes, i believe let's see what happens with the semitruck. is it going to move the needle no it's not that's just the reality of how few class 8 trucks are sold, and they're just starting up production right now so, obviously, they're expanding the line-up to a certain extent, but really, in terms of product expansion, people want to see the cyber truck. when they see the cyber truck next year, that's when i think you might see a little juice coming off of an unveiling, but we certainly aren't getting that from what we saw last night. >> i think we have some sound from musk as well in terms of discussing his view of that semi take a listen.

>> it's fun. it looks awesome and you know, there's actually a big shortage of drivers, and so if you're a truck driver and you want the most bad-ass rig on the road, this is it >> all right just remember that >> there's no longer a shortage. >> there's not >> just read jb hunt's conference call. phil, we know that people come back to work, i mean, look, the main selling point of this thing is that we have had a shortage of trucks, but phil, i agree with you i mean, when i looked at it, i said, okay next right? not that cool. >> look, i think everybody agrees that if you can come up with an electric semi truck, and by the way, they're not the only ones who are building an electric semi truck. there's a number of other firms, established class 8 semi truck builders, manufacturers, who are working on it or have rolled out models

the efficiency that could be gained from shipping companies and large corporations, pepsico took the first ones, immense potential. immense. but at this point, still, we have to see how it shakes out, so to speak. >> as always, phil, thanks for bringing those numbers and your insights as well on tesla. phil lebeau. up next, we're going to have jim's "mad dash. of course, we will count you down to an opening bell that is n nus ay wee ing to have a lower open when we get started with trading. more "squawk on the street" straight ahead

all right, time for a "mad dash." marvell is a name you want to focus on >> one of my favorite and most aggressive ceos in all business is a guy named matt murphy

he put together an amazing company, and if you saw a longer term chart, you'd see it was down 18, 19 bucks. he's made it into the least consumer-oriented semi, other than than xpi. >> what do they sell to? >> storage for datacenter. thank you. i'm sorry, i should have gone in that right front business is down in some ways, business is down big. revenue outlook is very much below, i thought it would be gross margin, very bad datacenter revenue missed by 27. that, by the way, now you're starting to talk about how's microsoft's azure doing? how is amazon web services do you think? they ordered a lot of equipment. they haven't grown the way they thought, so they don't need a lot more it's an inventory problem. how long will it take? china too, but not government. how long will it take -- >> why isn't that data point reflective of a slowdown in economic activity? >> because of average highs. i think a lot of these datacenter companies, they

expected more advertising and more traffic, and they haven't been getting it. remember, you're talking about facebook you're talking about google. overall, the web slowed because the web's a little more advertising-based than we thought. amazon has a giant advertising business so, what it says is, like, be careful. they all got very excited. this is a good example they all got really excited. they all bulked up, hired a lot of people, did a lot of stuff, and now they don't have as much demand, and they don't have enough product not the product maybe that's right. but this is reflective of what powell might have been thinking of, which is, hey, the hottest center in the world, and they've got too much inventory, the demand is slowing. but david, there's no -- the end markets, it isn't like we come in and ruth announces she just fired the people she hired the only guy who's really taken radical action is mark zuckerberg, and he's spending a lot less time on the metaverse than people think.

>> he said that, but i didn't know that you agreed with him. in other words, that you believed him he's speechless. let's just enjoy the moment. still. >> he said it. he said it >> he said it. he said it to andrew sorkin. >> what is he, sam bankman-fried, i didn't mean it and therefore i'm innocent have you ever noticed that everybody in prison didn't mean it there's no one in prison who didn't mean it, and they're all innocent he's innocent. >> all right >> he's innocent of everything other than a really bad haircut. >> oh. sam bankman-fried's hair all right, opening bell is just a few minutes away remember, you can catch us any time, anywhere, listen to and follow the "squawk on the street" opening bell podcast

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go plant go. go boldly. emerson. >> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. chinese demand is clearly down it's never really come back yet from the pre-pandemic levels, unlike the u.s. and some other places in the world where we've seen the strong demand recovery. >> all right, there's chevron

chairman and ceo mike wirth. he was a guest this morning on "squawk box," offering his take on overall oil demand specific to, of course, chinese demand. the economy for which has not been growing anywhere near the rates that certainly many have been accustomed to, given endless covid lockdowns that continue to take place big story earlier in the week. things have quieted a bit, i think, in terms of the protests. >> look, the china story is definitely always -- we'll find out this weekend but i thought mike was very measured he said, look, we're not going to start pumping a huge amount oil's high we're going to pump what we think can -- i think people are realizing, what he's saying is, look, we're gauging demand, and we're pumping. old days, they didn't care about demand or not. they just pumped he's actually treating oil as if it's a product that may or may not be needed at any given moment and they're not hiring like mad in the oil patch

>> no. they're not hiring like mad, but they're not firing either. they have no reason to all right. going to get started with trading in about ten seconds the opening bell, right now. headquarters, going to be a lot more red on that board nba all-star charles barkley celebrating cidc world markets miracle day. supporting kids in need. over at the nasdaq, curing brain cancer foundation. wonderful thing to happen. >> we should be thinking about this government number i mean, you know, the government, when you talk about what everybody's waiting for, it's all the spending from the government and the government is expanding and expanding and expanding, and the government's being a chief hirer. and healthcare, as if they finally have enough money to be able to start hiring after a period where they were just

stretched. these are the earnings >> you do have money that is -- i mean, your friend, or at least guest on "mad money," occasionally, she's got a lot of money there that she's going to be putting out for the chip stack. >> i think we have to start projecting >> that's -- between infrastructure, chips, and the inflation reduction act, there's a lot of money that is going towards various efforts. >> we profiled jacobs engineering, which is an excellent company. they're about to get billions. >> yeah. >> to put to work to hire people and i think that what people have to recognize is that you are now seeing the put to work money from the federal government, which is very hard to stem. i mean, do you know how many people they got to hire for just roads as each department of transportation gets a check from the government and that means how many caterpillar and deere machines so, the thing that i think that powell may be missing is the purloined letter right in front of him the government's spending like

mad. >> is he missing it or not why do you think he's missing it he doesn't seem to be changing his tone too much. >> well, this was not the report of the man who spoke on wednesday. >> you don't believe that. you think that was -- >> if i were him, i would say, look, we are really -- we don't know how hard-hit the economy's going to be by the rate hikes, other than maybe a prelude is housing. we have companies that are related to housing that are getting hurt badly we even know -- i mean, real estate investment trusts that are being hurt badly >> yeah. you know what? let's go there let's talk blackstone, because we were the first to tell you about it yesterday it's a story we've been covering for quite some time here, namely the growth of this bre eet of blackstone this morning, in a downgrade, barclay's saying as much as perhaps 20% of fee-related

earnings related to that $70 billion portfolio of largely what is either industrialor rental assets, essentially, that's a downgrade we're seeing this morning and this follows on what we told you yesterday, which is -- and by the way, it was part of the breit fund from the beginning, but they said, if any quarter, more than 5% of our net asset value wants to be repurchased, in other words, rebuy your interest back from you, or over 2% in a month, you know, they have the right to say, all right, can't pass through that and so, they put that out there yesterday. and there has been, jim, just a torrent of sort of interest, i think, at least in certain circles about this a lot of research this morning i mentioned this downgrade from barclay's. let's just give you a quick recap of what they had to say at barclay's if we can do that. looking for where my notes are here they are.

"we're downgrading equal weight, represents 10% of feaum, but nearly 20% of fee-related earnings." the now being limited at breit, they're concerned the nav may continue to decline as investors seek to withdraw their capital and that may have a second order effect resulting in significantly lower net inflows. >> that's incredible >> because it represented, at that time, and remember, where the two and ten-years were, you know, your ria, high network broker >> barry had a vehicle that backfired. >> 5%, we're going to get some -- you'll get some nice return also, we're going to increase net asset value, and by the way, they have done that. they have increased net asset value or at least certainly they have said they have increased net asset value.

but there are concerns or at least some question that, well, you're going to have to reverse that at some point, because when you look at, for example, the publicly traded reits, it's down we know what's happened to many of these now, that said, they did a deal yesterday for this which will help them create liquidity, right? they sold a significant stake in the deal, they did it above where their mark was, and it will allow them to meet further repurchases, not yet, but when the deal closes, it creates more liquidity. >> look, i want to just say, point-blank, if you read any of the -- it's not even fine print. large print. we are not obligated to repurchase any shares and may choose to repurchase only some and maybe none of the shares that have been requested to be purchased. this is big print. this is not, david, oh my god, i didn't know. this is, like, okay, here's the deal you may not get your money out the way you want to.

so, i mean, the people who are in this thing, it was the most caveat emptor piece of paper >> but it also was a way to generate yield in a yield-starved environment and became -- the reason we talked about it so often is because it became such an enormous -- one of the largest reets out there a great product for blackstone, helped to generate a lot of earnings at the company, but that obviously has changed i've asked john gray about it previously he didn't have too much to say the last time we spoke about it publicly at our delivering alpha conference at the end of september, but they do market every month. if you were able to get out in october, you may be benefitting as a result of that, because the markets every month, and we'll see where they are they sold $5 million in assets at a premium, again, to where they were being carried very recently with this deal. and you know, they're managing the liquidity well it's not an issue of that, but it is simply a reflection. >> do you get schadenfreude?

i'm in awe of jonathan gray and not just for what he's doing here but also for his charity, and i don't think -- this is what you sort of expected, mortgage rates shot up a lot faster i'd like to know who doesn't trust and thinks they're going to default i mean, isn't that what people are worried about? sort of the fall >> no, listen, it's not a great look when you don't let your clients get out. that's it. >> bad look. >> but it's not about anything more than that it really isn't. >> that's fair >> we're not talking about -- >> yield's only 4.4% >> it's not an expectation that many people -- well, it was potentially something people had thought might happen here, and again, let's wait to see some of the navs >> it's early so the market might not be down, but my friend larry williams, great market historian, just reminded me the annual percent change is going the fed's way. it's down a lot.

you sit here and try to figure out, wait a second, why isn't the mark just down huge? the answer is, people are finding things it's the same average. it's not going up. it's roughly 260 the percent change from a year ago is actually very good for the fed. so, maybe what people are saying is, okay, look, it does seem like a red-hot number, but remember, it's actually in keeping with the number that could generate a soft landing. >> okay. well, that's a positive. >> you're supposed to say, oh my god, now he's really got to slam on the brakes. no, raise the rates and things are -- i just think that you got to break out the government. i just hear too many companies h that are just getting big checks to build things. >> right, so, where does all this leave you, then in terms of the jobs number, in terms of what you're talking about, i mean -- >> interest rates should be higher >> we talked about marvell and datacenter demand declining to some extent. there are a lot of -- jim, where does that leave you in terms of

your expectations for the fed and therefore what the market will ultimately do as we now are in the last month of the year? >> this is the first quarter where guidance was bad for tech. first one. now, what tends to happen is there's -- is that they don't guide correctly, and things actually turn worse, and then that's when you would do the layoffs. if you guide slightly down, there's no reason to lay off people i also think, david, that we see a lot of stocks that we don't talk about that are one, two or $3 that were spacs they will close and you'll see layoffs there. it's just -- a lot of people raised a lot of money, and it's taking longer for them to fail not too big to fail. too long to fail >> you still think we have a terminal rate of 5%? is that what you're working with still? >> no, i was going with this level. >> you thought it would be lower than that. >> i thought we'd be 4.5%. this number does say 5%. i would like to see, somehow, we

start bring -- you know how with we break out oil and gas we have to break out government. i know we can't do that. but the government -- i mean, david, there are all the engineering and construction companies, i've never seen their business this good and that's because nothing that the private sector's doing it's the public sector >> right well, the private sector is being empowered by the public sector i mean, if you're going to build a giant chip plant in ohio, or upstate new york, it's going to take ten years >> if you're moving semiconductor manufacturing from taiwan to here, that's a huge number of jobs very expensive jobs. once plants are open, you don't need a lot of people but if you're reshoring very, very expensive coming here, you heard what phil lebeau said. maybe they have to give, but nobody's giving. look, i'm not saying i'm speechless i'm just saying that this is a number that if the fed had

not -- if jay powell hadn't spoken, we would say, yeah, this is kind of what bullard was saying this is what -- this is what we had coming that's what would have happened. it was the -- it was the run-pass option that fooled everybody. >> we're up over 3% in the sam bankman-fried s&p as a result of those comments >> the post-brady belichick. >> what does that mean >> they're really bad. they can't do anything they were terrible last night. >> really? i didn't watch >> i mean, i don't know if you -- it was so bad >> no kidding. >> i'm just kidding. i'm just saying that powell is not -- was not -- how did he miss this? how did he miss it he has great input, and i think it's because we're seeing too much money from the government go into every -- >> meanwhile, we've seen days like this before where we almost entirely reverse the losses. >> that's what i'm saying. you could make the case, it's

not getting hotter don't you think it has to stay kind of just okay for a couple months before it really falls apart? yes. but david, every company -- i got to go back nasdaq, every company was like marvell. like, look, things are not good. and they're getting worse. you know, so, mark zuckerberg laid them off early. he was an early indicator of what's to come i believe that >> with that 11,000, was it 13% of the workforce >> he's an early indicator that my expenses are out of line with my revenues. >> it's a big percentage i want to talk about advertising. there's a note from b of a this morning talking about the tough road ahead for media and entertainment. advertising markets remain choppy >> did you read craig moffett this morning take away your shoelaces, take away your tie -- you don't wear a tie. it's basically, most people thought could be bad

you thought. but i guess a lot of people don't work in linear tv. >> well, bank of america's one of their conclusions is bringing the magic back at disney could take time. again, nothing here is revelatory yes, it will take time also, sports rights remain in demand i didn't know if you knew that >> the nfl look, andy jassy was very bullish on the nfl >> they are negative on advertising. so is -- >> amazon. >> yeah, and so is mr. moffett >> doesn't this make you say that maybe jeff bezos's batten down the hatches comment is like the hurricane comment from jamie? another rich person telling us to be very worried >> i suppose how are you supposed to juxtapose comments like that with a print of 263,000 and wage growth of 5.1% year over year. >> if guidance was bad, first bad guidance, next quarter is not guidance and that's -- by the way, i

would say probably 70% of tech, bad guidance so the next quarter, they are trying to say, listen, we're okay but they're wrong. there's only a handful that really have made the pivot to profitability. okta did palo alto networks did but that's -- i mean, that's it. what do you got there? >> i'm just looking. >> we're on air. >> i know, we times i get important texts. it's the way i learn things sometimes when i can't talk to people because i'm speaking to you. >> that's when you -- >> yesterday, i got a text about breit. i just want to check things. nothing going much there by the way, speaking of checking, i did want to -- since we check in almost every day, credit suisse, it's up today it's up in part because yesterday, the company's chairman said in a tv interview, not with our network, that outflows have basically stopped. >> yeah, that's great.

he's terrific. so glad. very significant that a man who's presided over just sort of magical move there david, we haven't talked about apple. people are saying things aren't good there. >> now we have talked about apple. do you want to add anything more about apple? >> no, new people say things aren't good. i'm so -- you know, like, why don't all the analysts collectively get in a room and say, you know what things aren't that good. let's move on to something else. >> okay. that was very quick and concise on your part on apple. >> just a second i got -- stocks dropped. got some interesting -- i only got 13 >> i don't do it to offend you i just make sure there's nothing i'm missing. i noticed some people texting, i wanted to make sure. >> i thought it was going to be a better number. >> all right let's get over to bob pisani for more on this broader market, particularly after those jobs numbers. bob? >> good morning, david

good to see you and jim as well. so, the report does not support the narrative, the market wants, which is inflation is moderating, but we opened down about 40 points on the s&p, given the rally that we've seen, really since the bottom of october, that is not a terrible response look at the sectors today. as you might imagine, the classic risk-off, risk-on, risk-off sectors, ark and semis are the weakest ones that's not a surprise. i look at -- there's that china internet, kweb, still strong today, and the metals and energy stocks, proxies for global growth, are holding up relatively well. so, just take a look at some of the energy names generally, energy opened positive oil's been fairly steady in the mid-80s right now, so devin, slb, marathon, mosaic, some of the metals and mining companies, some of the materials companies

are a little bit stronger. i think that's a good sign indicating at least that there's not worries the global economy is weakening is there any good news in this inflation report well, there is, and jim sort of touched on this earlier. the strong jobs report does sort of undermine the imminent recession narrative that's out there. there's two kind of narratives out there. there's a concern about the inflation narrative, and then there's a secondary, which are related, about an imminent recession. a strong jobs report definitely undermines any kind of imminent recession narrative, and there are other inflation reports out there indicating inflation is moderating so, this is one data point, and i think this is why we're not seeing an even stronger downside response for the markets what's the bad news? you can't really sugar coat this the bad news is, in wage inflation, which powell talked about this week as an important component, is definitely very sticky we're seeing that very clearly more bad news is, this may revive the whole terminal rate

hire story remember bullard talking about not 4 or 5%, but 5 to 7% this will revive that bearish argument that the terminal rate is going to be higher. it's not a good thing. and the overall story about earnings estimates is they are declining, even as the stock market has generally been on an uptrend. we talked about this yesterday these 2023 estimates are coming out now, and they're generally way below the current estimates for most of the analysts that are out there. $231 is the estimate for 2023. today, it's $22. goldman at $204. from there, it goes straight down jpmorgan's $205. bank of america is $200. rbc is $199. you get down below $200, you're talking about 10, 15% decline in earnings that's a recession. that's an earnings recession so a lot of strategists are pricing in earnings recessions

for 2023, and the market is pushing back because they don't want to believe it look at the s&p 500. we are 15% off the lows in october. we are in a very powerful uptrend. the market's been expanding, david. not just the s&p is above its 200-day moving average, but the majority of s&p sectors, david, are above their 200-day moving average right now, so who's right on this narrative? it's not exactly clear if we end down a hundred, it's going to be a problem. but 40 right now, that's not a bad response david, back to you >> that's true all right. i mean, am i wrong, bob, in recalling days like this or similar days where the market has an initial response to what seems to be a very hot number and then things calm down by the end of the -- by near the close? >> right, well, that's the question so, are we going to be down 100 points at the end of the day or are we going to be down 30 or 40 if we are down 30 or 40, if we end right down around where we opened, i would consider that a victory for the bulls, because this -- across the board, the report itself, the headline

report, and the wage part of this whole thing was not supportive of the narrative the market really wanted to believe. so, down 40, to me, would be a victory for the bulls. >> yeah. bob, thank you >> that's great reporting. this feels down, that 75 basis point, not 50, even though it's. looking at these defense stocks, by the way, and think something is going on that we don't know. >> defense stocks? >> yeah. they're going crazy. >> i don't have anything on defense stocks i want to tell people what's going on in the bond market. let's give you a quick look at how treasuries are faring. we know yields did move up again on the numbers when they came out at 8:30. there you can see where we stand right now with that ten-year at 3.596 and the two-year at 4.35 we'll be right back.

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california this is the b-2 spirit when this aircraft, this bomber went into -- now it is poised to be replaced. the b-21 radar will be unveiled here later today for the first time ever. we'll speak with northrop grumman's kathy warden we'll talk about why this matters for investors, the bl a tpuicndhe world that's coming up in the hour on "squawk on the street. even if you got ppp and it only takes eight minutes to qualify. i went on their website, uploaded everything, and i was blown away by what they could do. getrefunds.com has helped businesses get over a billion dollars and we can help your business too. qualify your business for a big refund in eight minutes. go to getrefunds.com to get started. powered by innovation refunds.

loaning-term bull on salesforce.com it's going down like frazier i thought that was great remember that one? >> i remember that so well >> have a great weekend. >> oh, man, you have a great one, too. >> i will. you try. you rest up. >> i'm going to watch that giants game. >> the jets are at the vikings. >> commanders. >> oh, yeah. great game >> see if we can see if they can shut down jefferson. when we come back, more on the market pullback. the roerstng than expected jobs report the reason we're back after thi

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 . good friday morning. welcome to another hour of "squawk on the street. i'm david faber along with mike santoli live from post 9 of the

new york stock exchange. morgan brennan as well joining us from northrop grumman's site 24 ahead of the company's unveiling of the b-21 bomber we'll have more on that. first, a quick look at the markets. kind of where we started trading about 30 minutes ago much of this -- almost all of it, perhaps, a result of the 8:30 jobs report where the expectations were exceeded in terms of the 263,000 jobs that were added >> exactly and bond yields higher stocks lower here are three big movers we are watching marvell technology falling share is off 7%. zscaler, another name slumping post-results down double digits around 11% timely keep an eye on opendoor today, the digital platform

replacing ceo with cfo cara wheeler. shares down 90% since january. let's get back to the fed because, of course, it is in focus once again, this after payrolls and wages were way past expectations when we heard this morning's jobs report. steve liesman joins us he's got a lot more on what we heard and what we can expect when it comes to the fed. >> you nailed it payrolls and wages this stronger than expected november jobs report really dashing markets hopes for an end to fed rate hikes and raising fears of more rate hikes to come evercore isi writing after the report, it will reinforce the fed's assessment that the labor market remains very overheated and rates need to go higher for longer wanted to bring it back into balance. here's the numbers he's talking about. 263 coming in for november payrolls 200 was the expectation. we did get a downward revision this september/october but not that meaningful. there's the number faber was

talking about. 0.6%, double the expectation unemployment rate unchanged at 3.7% the labor force participation rate ticking down to 62.1%, a tenth lower than october let's take a look at where the jobs were. what you do see is two forces in the economy. one is the cyclical slowdown from fed rate hikes not showing up much but still getting the post-pandemic hiring, leisure, hospitality coming in very strong at the moment goods producing, it was supposed to be down but it was up 37,000. local government education, also hiring teachers again. only retail trade down 30,000. that might be a seasonal adjustment issue tech was still strong as was manufacturing. remember, adp reported decline of 100,000 jobs in

manufacturing. markets take the data as it comes in here's what their doing to the fed funds' peak output we haven't given it all back but a good part has come back. the market is reacting to this number not so much by dialing in the possibility of a 75 hike in december it's still pretty much 50. some have mentioned the idea of 75 more so it's increased the probability of another 50 coming in february. the thinking has to be this economy is not slowing the fed will need to lean harder on it to create the slack. the fed needs to bring it down guys >> steve, as you know, in the hour or two after we get one of of these jobs reports, people try to comb through the subsurface details to figure out if there's a secondary story line one being that hours worked went down that's one of the reasons that hourly earnings, average hourly earnings went up so the weekly incomes maybe didn't move as much the suggestion that in some

sectors, even severance payments might have accounted for wage growth how do we read that? and does it matter in the end? >> it could matter if that was something that puts it up. i thought about that i saw that report. i've got to run that down. i'm trying to think if there's an issue here where, mike, in general, when you have big layoffs, you have a spike in wages. i don't remember looking back on the history of that. i will counter that thought i saw with the thought, mike, that why didn't see see the pickup in the layoffs? people should still report they're not employed if they're picking up severance in any event, mike, here's the deal, if the layoffs are in the tech sector, sector is a lot of gdp, a lot of revenue, a lot of profits but there's not a lot of people in that business. goldman sachs said if you laid off everybody in the tech sector, it would increase unemployment by 0.3% there's not a lot of juice for slack in the economy from the tech sector itself what i'm wondering more about, mike, is if this job market is so hot, you get the layoffs and

these people end up employed right away somewhere else. there's very little time spent on the, quote, unquote, unemployment line, which you know doesn't exist anymore because it's all electronic. >> steve liesman, thank you. >> pleasure. i'm in palmdale, california. i'm here at northrop grumman's facility this is the first time ever that cameras have broadcast live from this facility. so, later today under the cover of darkness, this will be open to a small gathering of guests, senior pentagon official it is, for what is a highly anticipated unveiling of a new aircraft that will help to usher in a new era of nuclear deterrents. meant to replace the b-1s and b-2s currently in service. the b-21 is capable of carrying conventional and nuclear payloads it's a highly classified program started seven years ago. it's been so secretive that the

air force has only released three renderings, until today. this is a $203 billion program that is how much the service is estimated it will spend on 100 of these sixth gen aircraft over three decades, including development, procurement and operation. b-21 represents one leg of the nuclear triad being modernized and it comes at a key moment as geopolitical tensions have risen. for investors, northrop grumman makes the b-21 that's one reason forecasters are forecasting top line growth when so many others aren't in the defense sector still, why analysts believe northrop will be the fastest growing defense prime through the next decade as well. it is one reason for that. in terms of where we are right now, just a little more detail as i mentioned, this is northrop's facility. this is air force plant 42 a nearly 6,000-acre compound out here in the desert plant 42 has a storied reputation it is not dissimilar to area 51 thanks to a number of so-called

black programs you have lockheed skunk works in this area, plant 42, in general, has birthed some of the most ambitious aircraft in the history. in the case of northrop specifically, the b-2 bomb er was assembled here. also the fuselage for the f-35 fighter jet is manufactured here as well, among a number of other programs of course, the b-21 also that is coming up. kathy warden, ceo and chairman of northrop grumman will be joining me exclusively in just a few minutes. in the meantime, mike, stock is trading higher in what is a down day for the broader markets. it's actually one of the best performers over the last 12 months behind energy stocks. >> absolutely. within industrials, aerospace and defense has been strong. northrop in particular a strong one in that group. morgan, very cool. we look forward to getting back to you soon with all of that turning back to the broader markets, looking at 1% decline in the s&p 500, giving back a portion of the gains that came

before today in the stronger than expected jobs report. here to help us break things down, jpmorgan's david kelley and mona from edward jones david, the jobs number certainly better than the consensus forecast stronger than you expected on payroll, growth and the wage growth line. i wonder, it comes after a few days when it seems people were getting more comfortable with the fed getting closer to its destination on rates and maybe higher probability of a soft economic landing is today's data alter that picture at all for you >> not really. i think this report is not as strong as on the headlines i noticed, first of all, an increase -- or decline in the number of temporary workers, which is always a bad sign also the household survey lost jobs the second month in a row the payroll shortstop got this births/deaths model for

companies which often means when you're at a turning point in the economy, it tends to overestimate the number of firms that are actually in existence therefore, overestimate payroll job gains. i'm suspicious about these gains in manufacturing everything i'm seeing suggests thos those jobs are shedding. even on the wage gains, we had a shortening of the work week. it was because of bad weather. it's also because of illness there are almost 4 million people who weren't working because of their own illness it's way above what it should normally be in november. i think these are distorting the numbers. when i look at the overall mosaic of what's going on in the jobs market, i think it's moderating and i think the federal reserve will have plenty of excuse to taper down the rate hikes and pause them in had the first quarter of next year >> a pause not too far in the future in that scenario. mona, what does it mean from an investment perspective at this point? we had the s&p 500 rally back to

above 4,000. it's kind of in this zone where it's make or break whether it's a bear market rally and what does next year hold if, in fact, the consensus is right that overall earnings numbers probably have to come down a bit? >> it's a great point. the labor market broadly, we also think labor market tends to be a lagging indicator if we have coincident loit leading indicators like leis, the yield curve, even housing market and the broader picture we're seeing real time in terms of tech layoff, those seem to be the more leading indicators of the economy. you'll start to see softness in the labor market in the 6 to 12 months ahead we're starting from a position of relative strength that's what gives us comfort in that we won't see this deeper prolonged recessionary environment. your point, we do think the first half of 2023 brings some softness not only from the economic picture, the earnings picture, earnings being revised downward.

we could start to see market volatility return. in fact, we think markets go through this period of what we are calling a bottoming process. before then kind of looking forward towards that recovery. we think the first half or so will still be led by those defensive value parts of the market then we start to see moderation of peak in fed funds rate, perhaps a peak in yields, perhaps potentially a move lower. that gives us better balance for the rest of the year where we think some parts of quality growth start to rebound. in fact, we see better performance overall from both equity and the bonds space. >> right now then, mona, given your view of a deceleration in earnings growth, i think i'm quoting you correctly, in the first half of next year, is the market appropriately priced or do we still have some work to do on the downside to sort of get to a multiple that makes sense to you >> yeah. i think generally we do think we will see some downward bias in the markets. keep in mind, we do think there's a credible case that a peak in yields has already

occurred earlier this year we saw the ten-year reach 25 or so we also think the bottom in equities probably has occurred this year as well. we're not calling for another, you know, 20% down move or bear market in 2023 but we do think as markets and the economy catch up to what we're seeing in some of the real-time data, we start to price this economic downturn in earnings growth picture appropriately. when we look at history, markets tend to be about six months forward-looking. we could be in the midst of a recession and even in earnings downtrend and markets will look past that and towards the recovery recovery playbook becomes important. we think about things not only the growth parts of the market, but cyclical and small cap arena which has been beaten up this year starts to look more attractive think of better growth and the volatility we may get in the first few months could be the opportunity. >> david, how does it fit into

the global investment picture right now? you see european markets perform much better than most would have expected china maybe is going to reopen a little bit if you think the fed can pause early next year, is that going to create a little more support for at least nominal growth here >> well, it will help give some softness to our landing here i do think -- i agree with mona completely in terms of the idea that we'll have softness to come but it shouldn't be a deep recession. i think another story is the dollar if you have some stabilization, some stabilization with ukraine, if china figures out how to deal with covid, all of these things will help the global picture if the fed pivots, then the dollar comes down and that should really amplify international equities, which do look cheap here relative to u.s. equities. >> they certainly do have for a while starting to act better we'll see if that can play out david and mona, thank you very much we do appreciate your time this

morning. let's get back over to morgan in california hey, morgan. >> mike, as i mentioned air force and northrop grumman revealing the b-21, estimated to cost $23 billion it's expected to be -- make its first flight early next year we get this first unveil later today. i'm joined now exclusively by northrop grumman's chair and ceo, kathy warden. great to see you today. >> great to see you. thanks for having us >> it's a major milestone. i realize it's a highly classified program and been very secretive up until now what can you share about what we'll see at the unveiling tonight and how it speaks to the capabilities of this sixth generation aircraft. >> the b-21 raider is a long-range strike aircraft what that moons is it has the range to go anywhere in the world and keep a target at risk. it also is a platform, though,

that is low observable that means it can enter enemy air space and not be detected. those are some of the attributes of the b-21 that make it special. that's about the aircraft itself but also inside the aircraft it has the ability to connect with other platforms and really provide the u.s. and our allies an information advantage. >> interesting so, basically, it's a computer in the air, is what you're telling me >> it is that's exactly right >> what's pretty incredible about this, highly complicated, highly complex program what we typically see, unfortunately, when programs of this size go through development, they tend to come over budget, they tend to be delayed. that has not been the case with b-21 so far you're on schedule. how have you been able to pull that off >> we've been using digital engineering from the beginning of this program to help us it's rate on thousands of designs and translate into the platform the world will see tonight we are so proud of what our teamworking alongside, in a very

transparent way with the air force, have been able to do differently in the acquisition program for the b-21 raider. >> there's several layers so far to the contracting process around this program. there was the contracts around development, now poised to with the first flight, which i believe is scheduled for early next year, you'll start to see early production rates for the first several dozen planes fixed price contract we've seen estimates that go back a number of years now that's going to be $550 million per plane but we know inflation will play a role in all of this. what do you expect that flyaway cost for the plane to be -- the aircraft to be now and can you make money on it >> well, the air force is continuing to update the cost of the aircraft and the target for us and as you noted, back in 2010, that was $550 million per aircraft that's up to nearly $700 million, based on inflation, as you noted. we see the value creation for

northrop grumman as still very much ahead of us as we move into this production phase. the air force is talking about building at least 100 aircraft >> and how many are under production right now >> we have six in production right here in palmdale. >> so, when we talk about the b-21, it's one of several major programs that northrop grumman has. the reason analysts expect this company to grow and be the fastest growing defense prime over the coming decade also a reason why you are forecasting top-line growth next year when many other defense primes are not i guess, speak to us about how you are able to grow in this environment. is it that supply chain issues are easing or that you're growing in spite of them >> we are growing in spite of supply chain challenges. we talked about those continuing to create challenges well into 2023 i also spoke when we were together last year about labor i'm pleased to say we're starting to see labor turn the

corner we're optimistic about 2023 and our ability to grow faster than 2022 and we've guided to that. i was also say, morgan, we differentiate as a technology company. so, the way we're winning work and being successful on programs like the b-21 raider is because our people are incredibly innovative and our talent is creating the ideas that solve our customers' hardest problems. >> when we talked about labor last year, i actually asked you what were you most concerned about looking at 2022. you said the workforce is it that you're seeing, and i asked this on jobs friday where numbers have been stronger than expected, are you seeing some slack in the workforce or have you had to raise wages and you're able to recruit more aggressively despite tight conditions >> we've done a number of things some is the external labor market seems to be easing for the skills we're hiring. at the same time, we have increased our labor rates. we've also been able to create internal training programs that allow us to bring people who don't have all the skills

needed, but we train them to be productive on our manufacturing floor and in our engineering organization >> the geopolitical situation has certainly heightened the tensions this year with russia invading ukraine we're seeing subsequent increases to defense budget says not just here in the u.s. but the world over nuclear deterrence is taking on a new meaning as well. how would you assess the current situation? what does that mean in terms of demand for northrop products >> the u.s. national defense strategy relies heavy on our strategic deterrent and the b-21 raider is one of those the three pillars. not just for the united states but our allies are an important part of our overall power projection scheme to keep peace and stability around the globe we're pleased to be bringing this capability to them. >> you do have two legs of that nuclear triad, b-21 and, of course, the replacement program for the icbm minutemen missiles as well, which falls in this space segment of your portfolio.

space has been growing very strongly speak to me about that and where you see those opportunities, even beyond the ground base strategic deterrent. >> yes you're talking about the sentinel program, the ground base strategic deterrent, the second of three legs we also participate on the third leg. northrop grumman is key to our nation's strategic deterrent across our portfolio we've seen strong growth, as you noted, and in space is where we've seen the fastest growth the u.s. is recapitalizing just about every element of our space architecture n nasa's budgets are growing we've been taking share. that's allowed us to grow ou space portfolio significantly and build a backlog more than two times sales for that portfolio. we see that continuing to grow over time. >> looking at the defense sector more broadly, m&a possibilities are back in the news just this week some reports that aero jet rocket dyne is on the sales block and some contractors might be interested in bidding for

that particular company. how do you see the landscape right now for a consolidation? how are you approaching that i know you have a number of partnerships, for example, at northrop grumman. >> we do we think about our strategy for working with partners wholistically. sometimes it makes sense to acquire. other times we take an equity stake to have a bit more control. many times we just partner in a more traditional way, working with them on new product development and helping mentor them and how to do business inside the department of defense. all of those strategies are working for us while the regulatory environment right now is a bit challenging to make mid or large scale acquisitions, we think our more comprehensive approach to teaming is working for us. >> final question for you. looking to 2023, what are you most concerned about what's keeping you up at night >> so, i would have sat here last year and told you labor this year i'll tell you it's supply chain disruption. we are still seeing that we are long cycle business some of our suppliers are 24 to

36-month lead times. we're still seeing disruption from the early days of the pandemic trickling through our supply chain and into our production lines but i do hope not to be talking about supply chain issues a year from now when we're together. >> all right i look forward to that conversation as well in the meantime, major milestone. not only for northrop grumman and the military, but also for the u.s. and just on the world stage at a key geopolitical moment in general. kathy warden, ceo of northrop grumman, thank you so much for joining me ahead of the b-21 unveil tonight. >> thank you, morgan. >> guys, back to you >> morgan, thank you for bringing us that as well. inflation continues to be in focus on the heels of another hot jobs report. we're going to have more on what that means for markets, rates and, of course, your portfolio this hour. don't go anywhere. good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help!

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let's get back to that jobs report and the overall economic outlook and the impact, of course, on the markets, which you can see right there at least. art cashin, ubs's director of floor operations joins us on the cnbc news line happy friday to you, art always glad to have you. just give me your take on the market action in response to that number and your response to the number as well >> well, a couple of things. first of all, as a back drop, i've been a little concerned for the last couple of days. we've gotten the vix down to the

20 level all this year that's been a sign of complacency whenever we've gotten to 20 or slightly below, the markets had a pullback i think we were set up in a vulnerable fashion the number came out, as you and others have noted, that the income part was a bit of a hot number and i think you got a slight overreaction here. anybody who went back and looked at what powell said in his commentary, he had kind of hinted at. i think outright suggested that there was concern the payroll part of -- with the wages was still too hot. but he seemed to concede that at the same time he was going to go for 50 basis points. i think initially the market was frightened that it might mean

another 75 and upon reflection. and finally, david, i would like to point out we're at a very, very critical point here the 200-day moving average in the s&p is right around 4045 and if we close below that, i think that will have some negatives. and if they manage to close above it, they might be able to steam up a little bit of a bounce back rally. >> yeah, art it's mike. you're right there, as you know, 4044 kind of playing with that level or up just a little bit on the week and nadz to the 200-day average t seems like if we went a good deal higher from here a few percent in the s&p, it would kind of give people some belief on some level that, in fact, a downtrend in general had been broken you have somewhat strong seasonals coming in later in december so, people willing to give a little bit of a sense that the

upside has some room, do you think that's a trap or is that plausible? >> well, i still continue to believe, michael, that we probably are going to retest the lows i have echoed what everybody else said about the seasonals. i think you stated it very aptly that later on in december is when it becomes seasonally the strongest. we have a a little bit of maybe a two-week window here i'm also concerned about the numbers we're seeing economically we've got people starting to use credit cards quite aggressively not widely noted thing a friend pointed out that people have begun asking for emergency withdrawals from their pension funds. and that -- given the tax implications, that tells me there's some real pressure

there. so for now i think the market's going to keep the internals going looking at the 200-day moving average if they manage to close above it, you might even get a sigh of relief i think we're still vulnerable here >> it's interesting in the sense that the jobs number is still showing that the labor market won't give in just yet obviously you can say maybe there's deceleration in there. and yet some consumer stress is showing up you know, the other side with the bond market has really got those yields compressed. we're at 3.6 on the ten-year at this point i suppose it gives the market and some economy breathing room unless you think that's a little bit more of a worrisome message in itself. >> no, i think you're right. the pullback in yields has been somewhat remarkable. and the market seems to have adjusted to it for a while it was 3.75 to 3.85.

below 3.75 was bullish above 3.85 was bearish now we ratcheted that down and it looks like 3.60 for now is right about in the middle of it they get around 3.55 or lower, you start to put a bid into equities and above 3.65, the bid comes out. it hits a very narrow game they're playing here that's why i'm going to keep looking at the vix if that remains low, i'm going to think -- i think, mike, almost every time this year when we've hit here, we've had a pullback not an insignificant one i'm going to hang my hat on the vix for now. >> art, thanks for joining us. have a great weekend >> thank you, too. >> all right time now for a news update let's get to contessa brewer. >> hi, mike. here's your cnbc news update this hour.

in a rare move ukraine's presidential advisers talking about how many soldiers have died in the war with russia. he says 10,000 to 13,000 ukrainian soldiers have been killed in the nine-month battle against russia's invasion. he also said the number of injuries is higher than that and civilian casualty counts were significant. arizona's has finally certified its location, cochise county arizona secretary of state katie hobbs sued cochise county after the two republicans on the board voted to further delay certifying the results the certification confirms the republican will be the winner in that race. formula one has canceled the 2023 chinese grand prix. it was set to return to china for the first time since 2019. of course, china continues to pursue that zero covid policy. formula one decided it's not reasonable to hold the race at

the shanghai international circuit. it confirmed it's looking for other alternatives guys, back to you. >> thank you very much still to come, consumer spending may be on the mend, but household debt is rising and rising fast. 'ldiusthat

let's get a check on the cloud. amid a slew of results in that sector wcld headed higher -- now back up did start higher on pace for its second week in the green. probably still after closing out its worst month since may. core holding, asana in focus as shares slump down 10% on a week forecast for quarter sales from what the company calls macro economic cross-currents shares down 80% since january. "squawk on the street" back in two. 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,

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on the heels of the hotter than anticipated jobs number, our next guest says a downshift to a 50 basis point hike in december by the fed is likely but the bank has a ways to go in its tightening cycle let's bring in sara house, wells fargo senior analyst you topped your comment with when good is bad stronger numbers how bad is it likely to be for what the fed needs to do and the impact on the economy, do you think? >> i think this is consistent with the fed needing to go further in terms of rate hikes, even as there's been a lot of attention on that overall downshift in the pace. so, when we look at our expectations for the fed funds rate, we didn't change them after this morning's report. i think it's consistent with the fed funds rate reaching over 5% by early next year as there's still more work to do for the fed stomping out inflationary pressures coming from the jobs market >> if you didn't raise the

ultimate peak or destination fed funds rate, the big question is, i guess, given consumer incomes are still strong and jobs keep growing, is the economy strong enough to withstand that or do you have a recession call for next year? >> we seem to have lost sara i don't know if you can hear >> yeah. we may have lost sara. apologies for that >> well, let's - >> let's take a quick break. >> we'll take a quick break. dow down 200 the s&p up off its lows, 0.8

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while home prices are weakening as the housing market falls deeper into recession, affordability isn't improving much our real estate correspondent diana olick joins us with more

on what it would take to get back to the affordability we saw just a year ago. diana? >> yeah, mike. the housing market, as you said, cooled dramatically. in just the last four months that's due to the sharp rise in mortgage rates, huge price gains during the first years of the pandemic as well as inflation hitting the consumer hard. now, prices are pulling back a bit. still higher than a year ago but dropping month to month more than the usual seasonal patterns we wanted to take a look at what it would take to get affordability back to where it was just a year ago. so, the average rate on the 30-year fixed has been moving between 6.5% and 7% over the last few weeks it was around 3% a year ago. so let's compare home shopping at today's rate versus last year's rate. take a $400,000 house, which is around the median u.s. price with a 20% down payment on a 30-year fixed loan and a rate of 3%, the monthly payment, that's including principle and interest, would be $1,349

a 7% bumps that up 58% higher payment. so, if we're keeping the rate at 7%, the home price would have to drop 37% from $400,000 to $253,500 just to get back to that first lower payment that level of affordability. and much thanks to black knight for doing all this heavy math for me it is highly unlikely prices would drop that much because this is a unique market with still strong buyer demand and very low supply of homes for sale realistically it will take adjustments across the board that's in prices, in interest rates and in incomes to bring affordability back to its long run averages back to you. >> diana, the incomes piece is interesting. we were talking today about 5% annual wage growth, at least on an average hourly basis. that doesn't bridge much of that gap but it's part of the equation i guess i wonder about the maybe

pullsing strength in home builder stocks up 25% off the lows. flat on a six-month basis. maybe that just speaks to an underlying sense of shortage so whatever clearing price we get to in terms of homes, that maybe the builders are going to have plenty to do. >> right it is that shortage because they get that from the existing home low supply stock it's also what we saw last month in home sales. we saw a nice pop-up because builders are providing inc ince incentives they can do that more than a traditional home seller. they're paying down, buying down the mortgage interest rate to help their buyers get in the door that helps, again, with affordability. the builders have that obviously it will hit their bottom lines a bit but they have concessions, inventives they can give to buyers and bring them in the door as you say, if rates pull back and get buyers in the door, they

have supply and growing supply. >> back to it the banks. shares of wells fargo, for example, are weaker than the group. there are reports they're cutting hundreds of people, potentially in their mortgage business just getting your reflection on where things stand they are one of the largest mortgage lenders in the country. >> yeah, absolutely. and we've been seeing layoffs in the mortgage market for the last six months when rates got up into 6% and hit the first 7% range in june. we've seen a lot of layoffs in that sector. you would think those stocks might be doing a little better some of the rocket mortgages because we've seen rates come back in october we were at 7.37% on the 30-year fixed according to mortgage news daily. now we're at 6.29% we haven't run today's yet, which may change because of the jobs we have rates a full percentage point lower than they were a month ago and yet twice what they were at the beginning of this year. that's where the stocks are kind of sitting with that

>> we'll keep an eye on that all things housing, thanks to your help, diana thank you. consumer fears on the back burner this after big spending jump in october. but that said, should investors really be keeping an eye on debt kristina partsinevelos joins us with that story. >> hi, david americans, right, they appear alive and well after spending a record-breaking $11.3 billion on cyber monday not adjusted for inflation shopper's money is being stretched in any possible way with many taking on credit to pay for those goods. signs that maybe this cash crunch is here buy now, pay later revenue surged 88% from black friday to cyber monday compared to a week ago. a method that doesn't cost you extra until you can't keep up with the payments. affirm is a pure play on the buy now, pay later trend, with shares jumping almost 7% right now. just over the last week or so.

paypal and block also offering tools that let consumers break up purchases but credit bureaus like equifax and experian have included buy now, pay later programs on credit reports that means delinquencies will hurt your credit report. target's ceo warning on a recent earnings call that many consumers this year have relied on borrowing that's driving household debt to grow at the fastest annual pace since the great recession, thanks to hefty increases in credit card usage and mortgage balances so, if americans are sitting on all this excess savings, why are they tapping credit to pay for these goods? even the household savings rate has plunged. check this graph this is as of october. it's at the lowest level since 2005 look at that drop. just over the last two years or so even americans are tipping less. they're tipping 17% less because of inflation whether you believe the fed will

drive a soft or hard landing in the economy, these examples show there will be a much thinner cash cushion to buffer it. david? >> thank you it's been a tough market overall this morning certainly tech results have contributed in part to that. contributed part to that take a look here you can see that stock is down double digits. we will have more on what that earnings report means for enterprise spending in the last hour we will have the ceo of pagerduty, this as those shares actually are up on what was fall guidance from the company. all in ten minutes on "techcheck." stay with us

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b-21 raider is because our people are incredibly innovative and our talent is creating the ideas that solve our customers' hardest problems >> so that was northrop grumman's kathy warden earlier this hour talking about the company, the b-21 raider unveiled we get later today, and, of course, the defense sector at large which has been plagued by supply chain and labor issues for the better part of take year we have lots more to come including an interview with palmer luckey on his defense startup which just raised a major round of funding and nearly doubled its valuation so strength in the public markets and the private markets for defense. >> morgan, thank you i want to take our viewers now to the roosevelt room of the white house where president biden is about to deliver remarks on signing that legislation to prevent a rail shut down. >> without a doubt would have been an economic catastrophe at a very bad time on the calendar.

our nation's rail system is literally the best in the supply chain as you all know and so much of what we rely on is delivered on our rail. from clean water to food and gas and to every -- every other good a rail shutdown would have devastated our economy without freight rail many u.s. industries would literally shut down in the event of a shutdown, my economic advisers report that as many as 765,000americans, many of them union members themselves, would have been put out of work for the first time, and within the first two weeks of the strike alone. communities could have lost access to chemicals necessary to ensure clean drinking water. farms and ranchers across the country would have been unable to feed their livestock. thanks to the bill congress passed and what i'm about to sign we spared the country that catastrophe. statement we ensured workers

will get a historic 25% pay raise over the next five years, improve working conditions and peace of mind around health care look, i know it doesn't have paid sick leave, but these rail workers and frankly every worker in america deserves. but that fight isn't over. i didn't commit we would stop just because we couldn't get it in the bill, we were going to stop fighting for it i have supported paid sick leave for a long time. i will continue the fight until we succeed i want to thank congress, democrats and republicans, for acting so quickly. i know it was a tough vote for members of both parties. it was tough for me but the right thing to do at the moment to save jobs, to protect millions of working families from harm and disruption and to keep supply chains stable around the holidays, and to continue the progress we have made and we will continue to see on the economy. for months you couldn't look anywhere without seeing headlines screaming gas prices at the pump are up

look, folks, gas prices are down and you barely hear anything about it they'll continue to go down and there's a lot more that's going to happen. they're down more than $1.50 since the summer and they continue to fall our economy continues to grow. the economic report, the gdp is up even more than it was previously thought we continue to create jobs, lots of jobs. today we have learned that the economy added 263,000 jobs in november we've now created 10.5 million jobs since i took office, more than any administration in history at this point in the presidency 750,000 of them are domestic manufacturing jobs, made in america. unemployment rate remains near an all-time 50-year low, 3.7%. wages for working families, i want to say this again, wages for working families, in fact, over the past couple of months have gone up, up

these wage increases are larger than the increase in inflation in that same period of time. so we're in a position now where things are moving, they're moving in the right direction. as we go into the holiday season, here is what this all means. the americans are working. the economy is growing wages are rising faster than inflation, and we have avoided a catastrophic rail strike it means our plan to build the economy from the bottom up and the middle out, you're tired of hearing me say that, but it is working. the wealthy are still doing very well while the middle class and the poor are having a shot i want to thank congress once again for being partners today, for averting this disaster and keeping our economy on a stable footing during the holiday season i want to thank you all. i will reach over here and sign this bill and make it official this is the house joint

resolution 100 okay by the way, i really can't emphasize enough how much i appreciate the team behind me working with business anr to get this done and avoid what otherwise is a really good bill, lacking only one, and we will get the one thing done before it is all over anyway thank you, thank you, thank you. >> mr. president, are you going to georgia to help senator warren >> i'm going to georgia to help senator warren, not warren i'm doing a major fundraiser in boston before our next and continued senate candidate, senator. >> how soon -- >> -- rebuild the strategic reserve, mr. president >> as soon as i can convince our republicans to see the light >> and part of the -- step in to

prevent spread - >> thank you, everyone you've been listening to president biden deliver remarks on averting a rail strike as well as the state of the economy on this jobs friday. good friday morning, by the way. welcome to "techcheck. i'm deirdre bosen in san francisco with jon fortt at headquarters carl has the morning off today stocks sliding after hotter-than-anticipated jobs data, but the nasdaq still positive after the bill rally following fed powell's remarks on wednesday we will look at how lay-offs are impacting tech plus, what are earnings telling us about enterprise demand, zscaler, asa snarks, pagerduty falling. we have two more interviews to close out the week those ceos are coming up this hour, jon. >> let's run through some of the names that you mentioned