insight because you know this stuff inside out you've been there yourself thank you. >> importantly, joe and i are going to play golf at the pebble beach pro am so we'll talk there. >> we'll see beyou before then. >> do not be in that gallery around either one of us. >> fore! anyway, we will see you tomorrow from washington, d.c please join us for a big show with the business round table. right now, it's time for "squawk on the street. ♪ good nond monday morning, i carl quintanilla with jim faber and jim cramer futures having trouble getting out of reverse, despite more optimism about a china reopening and hong kong up 4% overnight. very busy week, inflation data, road map begins with china changing course. set to announce a further easing of its tough covid curbs as early as wednesday >> plus, speaking of china, signs of waning demand

tesla is set to cut its output from its shanghai factory by more than 20%. and sbf goes to washington or at least he might do it remotely ftx founder sam bankman-fried says he will testify to the house financial services committee. let's begin with the markets set to open lower after a week of gains jim, some critical levels, some argue, at this 200 day >> i think mike wilson, when he comes out and says -- morgan stanley -- that this is it, we're done with the rally, he has such gravitas that the market goes down, and look, i love a guy who has that kind of call i did not like the substance of the call, which is he felt that earnings were going to come down i think earnings for tech will come down, but the industrials, who are the leaders right now. no one's talking about it. the industrials, the actual industrials, have had a kind of parabolic move here that no one talks about. >> well, give me some names. >> you want names? >> yeah, i do. >> i'll give you names >> i want names. >> honeywell

caterpillar. boeing deere. >> what's going on why are they all moving up >> it's not just china i think they actually -- this is my thesis, and i'm glad you asked. unlike companies that issue a lot of stock, you know, called stock-based compensation, which you follow, these actually have earnings they have ebitda but they don't call it ebitda. they call it earnings per share. and the stocks are not expensive. honeywell is probably the most expensive of those but you buy them, and they all have bought stock back when you look at how much, so there's no supply when the futures go up. it's a rather remarkable thing it feels like another market from the old days where, you know, you buy a lot of stock back, buyers come in, no stock, lifts the level, stocks take off. what do you think of that? >> makes sense does it continue that's one of the key questions. >> you don't have any earnings for a while. let it continue into the next year why not? i mean, that's why you see the dow down i mean, what is going to really

be down in the dow you want to worry -- >> salesforce was down on friday >> okay, i wasn't -- i didn't talk about enterprise software i did not mention that i talked about companies like honeywell. >> this is still a big piece of the dow. do you think it's possible, couple thousand more points, and you're flat for the year >> i think it could happen if china really is -- if they have really decided -- look, i'm going to give them their narrative. we beat the tough covid, the ones that america really felt, but we have omicron, which is better -- easier to deal with than flu go back to work, stay home if you don't feel well. brilliant. i mean, xi won >> that's a big part of what we're seeing today as well by the way, quick public service announcement on the dow, it's a statistically irrelevant index it's price weighted and there's no money index to it the fact that it might be flat for the year doesn't mean a thing. >> >> statistically, what's

important is the jets probably will not be able to make it into the playoffs they have a very tough schedule. >> statistically insignificant >> i want to balance that with david's public service >> i'm just saying that the s&p and the nasdaq are what matters. >> fine. >> it's an anachronism >> but what matters is, i was using it as an example of the industrials doing -- >> understood. and you were and you were making a cogent point. >> that's all i wanted to get my lovey blanket here and not go down the wrong path >> you're on good paths. >> i think what is interesting is that willison's going to be right about tech there's a glut of massive proportions everywhere in both -- there's too many companies. i've splunk on tonight they're part of this whole software, trying to be more software as a service. i mean, you heard a lot of these last week. i do want to go back i was dismissive of my partner, david, and i did not mean to be. salesforce, which my charitable

trust has owned from time immemorial, i don't know salesforce is the one everyone's keying in on because what happened to bret did they lose some big accounts? and what happens is that this becomes very self-fulfilling, very hard to stop the decline. >> interesting i mean, there's still a -- some -- a thesis out there of companies will look to get hyperproductive in the coming year that's one reason he's looking for a soft landing that's going to rely heavily on software >> absolutely. workday is another one workday stock is going in the right direction. david, when you want to digitize, okay, you bring in those guys if you want to automate, you bring in emerson emerson is another example of a straight-up stock. >> but your point's an important one, which is that investors are sort of congregating around names that are fairly easy to understand in terms of the earnings >> that's better than i put it

>> it's not an adjusted ebitda situation that we talk about so often where you're also talking about a great deal of stock-based comp that's not part of it, but at some point, they might need to pay more cash because stock-based comp doesn't work >> they have $14 billion in optionality. >> it's surprising to see boeing rallying >> what are you going to order for a hundred dream? dreams were just sitting around and suddenly united? >> morgan stanley ups to overweight, 67, top pick for the new year they say 2023 could be a goldilocks year. >> they talk about you all doing what united airlines is doing well delta is their favorite. travel remains a very strong thesis in this market, versus, say, well, lulu is going to have a great week, but the vf note has to be in our 8:00 block. this is our 8:00 block >> you mentioned vf. >> it's a disaster >> there's a change at the top of vf that does not appear in

any way to have been anticipated, at least in its immediacy. what we're talking about here is steve rendal's decision, they say, to retire from his position as chairman. >> he was 62 >> ceo but that was immediate effective immediately. >> yeah. >> they put ben in, a director on interim basis and jim, what you're also mentioning is their outlook for fiscal year '23 reflecting the impact of weaker-than-anticipated consumer demand across its categories, primarily in north america >> major estimate cuts january is down 13%. i was trying to figure out who picks up on that hey, dude? crocs? vans is really slowing down. tell you, carl, pvh had a good quarter last week. ralph lauren had a good quarter. i think lu lu's quarter is going to be great this week. this company has lost its way, and i think that northface is losing share to columbia, and i

really think that this was the premier name in the group, and they got to calm this thing down >> we're going to look for some color out of lulu and rh, where we tend to get a lot of color. >> i just want rh to be -- note to gary freedman calm down. everything will be fine. you're fine. >> you think that's the tone he's going to give >> i want him to not feel like -- i mean, his stuff is fantastic. i mean, just -- i mean, everyone else is worried about china, and 40% manufacturing down for u.s i think that what gary has to do is recognize, like williams sonoma, there will become another day. you know tomorrow is another day. kind of like a "gone with the wind" thing. >> do you have any insight on this vf? i don't, unfortunately >> intrigue? >> it does appear it was like, don't let the door hit you on the way out. >> it was. >> to move immediately like that and put a lead independent director as your interim ceo >> i think you raise a great

point. here's my vf file, and, okay, on october 26, they gave a very negative outlook, and it was a big cut. people thought it was almost a kitchen sink cut there's no way it could be worse than that. and they just took that and slashed that october 26 forecast to ribbons now you're talking about 3.18 going to 2 bucks, 2.20, and they talk about balance performance i would not have used that term. i would not say, balance performance. >> they originally were looking for as much as 5 to 6% in second half of fiscal year '23. now they're looking for 3 to 4%. and that was already down, as you said >> they thought they were going to do 2.40 they thought they could do maybe even over 3. now they're down to the d$2 to . this is a company that needs to get its act together

benno did a pretty good job. >> ceo of clorox for about six years. >> yes, but this is one i'm stymied by, because we all know that vf corp. was the gold standard for a very long time, so we got to follow this i know apparel is important to people, because we're trying to figure out how strong black friday is. we got a lot mike wilson is -- i keep referring to mike wilson baecaue he's had the hot hand and correctly called this move >> do we think there's some a algos built on mike wilson is there an algo stapled to michael wilson >> they did upgrade china at morgan stanley >> i think china is -- look, i think that they found a way out. it was a brilliant way out although, deutsche bank downgraded starbucks way too soon i think that was a big mistake because starbucks is going to have a great quarter >> this is an important call, the overweight call from morgan

stanley on china it's not mike wilson >> i think it's a very important call >> their base case is they, being china, is at the beginning of a multi-quarter recovery with a decent return on equity improvement, and they further increase exposure to consumer as reopening beneficiaries continue, and they continue to recommend adding allocation to offshore chinese equities. >> what do you think about the idea -- and brian sullivan is doing some excellent work -- that you should forget about what opec plus does and say, the numbers that you just talked about, china is going to be a million-barrel-a-day user, and that is going to upset the apple cart, move oil up. that's why i think oil is up nothing out of opec plus, and i think that, carl, one of the things that we had going for us against inflation, it was oil. we don't want to see that go up, because that makes jay's job, the 50 basis points, seems to be feeble >> but at the same time, china

is potentially loosening its covid restrictions to some extent you still have long stories. "the journal" did one on apple, for example. moving, trying to figure out -- and many companies, at least, no longer relying on -- no longer believing that they can rely on it to be their sole source, if not main source of supply. doesn't mean they're going to easily figure out a way to reshore in other areas >> i think it's a major story, because in china, this is the win that president trump wanted. >> except they're not coming to the united states. >> no, but -- no >> that would be a win >> reshoring is mexico >> they never made iphones here. >> they wanted to hobble china >> well, actually, u.s., as a percentage of global fixed asset investment is back to the highs where china entered the wto. >> i think that's very significant. and don't forget, the anecdotal,

tesla slowing in china, accelerating here. that's not lost on people. >> no. although you know what an iphone would cost if we made it in the united states? fou fourfold increase in $4,000? by the way, you see the tsmc in arizona, the trouble that company is having trying to create a $12 billion plant to get up and running for next year >> it's about supply materials and lam. >> it's also about finding the right engineers. >> we don't have a lot of engineers. >> they're taking them from taiwan it's a sad commentary. >> a lot of the engineers were probably trained here. and then they leave. i don't want to get into immigration. that's just such a political hot button >> it is >> powell talked about how important it was last week >> well, we have a supply problem, you know? don't have enough workers. >> rate hikes don't fix. >> i know. look at raytheon raytheon is now starting to get the orders they thought they would get for nato, so to speak,

which could mean unikraine, but they can't find the engineers. anyone -- who became an engineer during your era? >> i had a number of friends who were engineers at tufts. >> really? >> yeah, they worked really hard too. >> was it union pacific? >> then they all went into financial services and became private equity guys. your point is a good one >> private equity? we haven't even touched on blackstone >> let's do engineering really quick on tesla >> the railroad strike >> biggest premarket laggards this morning some of these published reports say the auto marker is set to cut output by up to 20% from the previous month amid waning demand in china. by the way, the company has come out and said that report is "untrue." >> there you go. i mean, that number is pre-the reopening. i like to buy tesla on that. i think that's a great opportunity to buy tesla because i think the opening's going to do well. i continue to hear -- i mean, twitter, i have to go there, david. you know, they have like about a

quarter of the people they had, and it's still twitter tweeting. still working. >> it still hasn't broken. >> no. it hasn't broken you get in it. >> i don't know what's going on underneath there i mean, you never know >> but wouldn't it be amazing if he just figured out how to do it with nobody? >> it would be amazing but when you don't have any advertisers, you also don't have to work. >> i hear people coming back >> really? >> well, yeah. have you heard that? >> no. i haven't. but i still use it in the same way that i always have, which is i view -- >> mostly retweeting >> i don't like to say much. carl's more active any time you do, people misunderstand you, don't follow you. >> usually 5 to 6:00 a.m. is carl time. >> carl time >> that's when you post your best stuff i love it. >> i'm just writing it down to remember it later in case i need to search. i'm not interested in whether other people read it >> i read it and i say, okay, good, there's something i can talk about

>> you still monitor your mentions column or not >> yeah, very closely. i monitor my mentions column from the hospital. that was an old mental hospital they managed to close, which was good >> on that note, when we come back, the sam bankman-fried tour could soon be heading to capitol hill he says he will testify before lawmakers about the ftx collapse, although maybe not on the timeline lawmakers have in mind take a look at the premarket here as we get set for a very busy week with ppi coming up on friday bunch of sell-side conferences, the georgia senate rofana t reunf d we're back in a minute

as you know, ftx founder sam bankman-fried has been making the rounds one of his future stops might be capitol hill in response to a tweet from maxine waters calling on him to testify before her committee, december 13, bankman-fried tweeted, once i have finished learning and viewing what happened, i would feel like it is my duty to appear before the committee and explain. i'm not sure that will happen by the 13th, but when it does, i will testify >> in other words, he had not learned when he was speaking to andrew ross sorkin last week david, i think this is one of the more quizzical stories i've ever seen, not unlike martin shkreli, who also did not really have that kind of reputation that you would necessarily want. >> martin is still in jail

>> i don't know. >> oh, he is >> yeah. >> pretty sure he still is >> i just think that whether sbf -- i love that -- >> he's reviewing the situation. remember that song from "oliver"? he's reviewing the situation ♪ i am reviewing ♪ >> can i break up that song for a second did someone tell him that intent matters? >> yeah. yeah, you've made that point >> well, i mean, if you just watches "law & order" or "csi," it doesn't take much to know that intent is not really a factor >> no. whether you meant to or not. he did it. if you did the crime -- >> i would go for it >> you're going to have to do the time >> keep your eye on the sparrow. >> don't do it >> i think there's maybe a mental defense he could use if he keeps talking >> is he still in jail too, robert blake >> i have no idea. >> must be

or is he -- >> i think that he could -- i think that he could plead insanity, frankly. >> who, sam bankman-fried? >> oh yeah he's insane that he keeps talking to the media i mean, why don't we just send him something right now, direct message him, see if he won't call in. you don't do that. only someone who is insane would continue to talk to the media. >> by the way, as for bitcoin, hit $17,400 this morning, that's the highest since november 11. we did have tim draper say $250,000 in the coming year. the dam is about to break. >> well, i just think that there's -- i think that when i read the research say on coinbase, read who's owed money, really read the stories like "the ft" there are a lot of people who are owed many other people, and to me, what is fidelity doing in crypto >> i don't know what fidelity is doing in crypto. what are they doing? >> i think it's time to just say, you know what why don't you cash in your crypto

while it's still cash-in-able, before it really just -- >> we had a combination spac and crypto today that went down. bob diamond's the circle internet financial and concord acquisition. >> they're not going to go >> they have announced the mutual termination of their proposed business combination. circle plays a key role in the blockchain's disruption of financial services >> oh really >> look. circle ceo's going to join you, carl >> see the far peak acquisition, tom farley, they have one that's still kind of -- you can still get almost ten bucks, so this one's on hold. david, i think it's time to rethink the notion of getting into some of the secondary coins that we often put up >> secondary coins have been a concern for you for some time. >> because there's billions of dollars in secondary coins and to me -- i know we really have to go, but i will say this. what a great time to take your money out of those >> ring the register, yeah >> definitely. >> we'll get cramer's "mad dash"

as we count down to the opening bell on this business monday take a final look at futures more "squawk on the street" is back in monta me

a lot headed our way in the next few sessions, including some macro data, fair amount of earnings from some home builders, retailers, just a little bit of tech we're starting, though, in the red on this monday l t e eng lln i less than five minutes

sf >> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. all right, let's get to it, our first "mad dash" of the week, as we get ready for an opening bell about a minute and a half from now. where you headed >> well, i'll tell you, people -- i think there's a very cogent piece out today, beyond brands, doing many things wrong, talking about the key metrics

that should win. taco bell, maybe up to 8.5% comps. consensus is much lower. and david, here, some of the parts. remember those things? >> of course >> we got kfc at 85, taco bell, 55, pizza hut, 14. that rounds out to 155 the stock's been straight up, and i like this call, because yum is asset-light, and just a fantastic place in terms of inexpensive places to eat, that i happen to like, frankly. >> yep and not to be confused with yum china holdings, yumc >> right >> as you might imagine, actually, has hung in there pretty well. >> one of the things that's amazing is that europe, i was watching our 5:00 -- excellent 5:00 show, and europe's been quite strong now for many months, which is very odd. >> right >> and yum has a lot of europe i'm all in favor

>> let's get the opening bell this morning and the cnbc realtime exchange. at the big board, it is p-10, a private markets investment firm celebrating its first listing anniversary. and at the nasdaq, a specialty vaccine company. going to open right around 4,070, jim i know you mentioned downgraded starbucks over at deutsche to hold >> look, one of the things that's happened is starbucks has been a straight-up stock, and i totally understand the desire to say, you know what that's enough. but i warn people that when you have a winner like starbucks, where everything is going right, stick with it. if they're just opening china, the numbers they can put up in china are rather extraordinary, so i think that the downgrade is ill advised versus what may be one of the great stocks for 2023 >> they upped their target just a touch. >> i know. that's why i don't like -- i don't like downgrades where you have to raise your target, and i

think that starbucks has got great leadership, and this is really after a slowing period, china is going to be so good for them you know, they do well min milan which is the capital of coffee >> that's where schulz got his inspiration. >> it's a very exciting time for starbucks. i really don't want people to leave starbucks on this. my travel trust owns it. i very much want to own it >> careful there you look like you're calling the cops or something. >> i'm turning my phone off because i'm tired -- i don't like to watch our show and also text >> and you don't like it when i do it either >> that's why i did it like an affront to david when are we going to get to blackstone >> you want to talk about blackstone again >> wealthy individuals are trying to figure out what to do. i thought you could help them. >> you're talking about the breit product. these are not publicly traded.

these became enormous reits. it was obviously a very well-received option in a low-yield environment, but that has changed significantly. nonetheless, many of their investments have been valued above, certainly, even where they bought them at, not to mention well above the publicly tr traded reit complex, so to speak. they had to put some gates up, which was part of what the rias who were investing their clients' money most likely knew in terms of 5% net asset value, 2% during a month. nonetheless, not a great look, jim. the question is, and i'll put it to you, are people looking to sell these products now, because obviously, they can get higher rates other places >> right >> and/or they know right now where the marks are, they can benefit, if they can get out, because there are lower marks to come >> i hate to say it, but i think this could be the latter because

we don't dknow about the core underneath it. >> it's a lot of rental housing and warehouses and industrial. >> sl green today cut its dividend they're a very good company. >> they own a lot of b-class real estate in new york city >> people are not coming back. >> that's not where you want to be >> this -- not coming back this weekend, dealing with a lot of people in business who just keep saying, we can't get people to come back >> even now, jim, really >> i always felt that when you are a boss and you ask people to come back, that meant, well, you either come back or you don't have a job it doesn't work like that anymore. i don't understand why that is >> you say -- are you arguing that the new policies at snap and salesforce are hollow? >> well, no, i think that basically, we're in a new era where you can declare that you're going to come in three t days, and people will say, wait a second, of course, you don't do that much in the office anyway you should be out on the road

drumming up business i have been hearing that from companies where selling is involved what are you doing in the office anyway we want business they force people out to make sales calls. >> but to your point, we hear it consistently, most buildings are nowhere -- are closer in major metropolitan areas, 50%, 60% max occupied on a given day. now, leadership, they were rarely at 100% pre-pandemic because, to your point, there were always people traveling, but we're just never getting back to that higher level. some financial services companies have been more successful in getting people back, at least four days a week, but it's a new world what it really means, longer term, for commercial office space is a great question. >> right i mean, we're next to one wall, which was the old bankers trust. hallowed building. and it is, i don't know, condos. who knows? i mean, where are they going to find all the people who want to be down here if they don't have the jobs >> they're not now, conversions down in this

area have been very strong in terms of taking these older buildings and making them residences the question is for buildings built in the '60s and '70s, they're much more difficult to convert. this is a key question for that sector the highest a-class continues to see -- hudson yards is doing okay one vanderbilt on 42nd street doing well if you built something really nice, people seem to want to pay. >> it's a rational market to some degree. >> but the occupancy is going to be very -- is a question >> well, it just -- i'm more interested in the new change in hierarchy where there are people at the top who wanted very much for people to come back and failed, and that meant -- it wasn't that the younger people said no. was that tier where they might next be running the firm that said, no we're not listening to you >> it's the people, particularly, who have younger kids or have a commute who are much more resistant.

the younger people at this point, i think, have woken up, those who want to have a career, at least the ones i talk to. it's all anecdotal, but they say, i want to be in the office, but if there's nobody to teach me -- >> in the meantime, the area that mike wilson, to beat that dead horse, he says, why not own the safety stocks? and yet the premier safety stock of this year so far has been pepsico, and down very, very hard worth noting, because that is kind of a -- where mike says you should be. mike like my pal, mike. but i do think pepsico's had too much to move but that is one to watch it's a very good stock >> how much of that is pegged to, for example, what rodney mcmullen of kroger said last week, and that is inflation's going to moderate, and some of those margins at grocers, for example, are going to soften >> well, i do know that you still everything that goes into pepsico, every aspect of it's come down. but they only replace once a year, so if you're going to think about what to be in, in

2023, don't give up the ship pepsico. i think -- of course, headwinds turn to tailwinds in 2023 for them for coca-cola too. there's a lot of companies that did very good numbers next year. people don't understand what went into a product has all come down everything >> we have a couple of conferences. uvs has their annual media conference going on. our boss making comments on the ad market that may be worth sharing. ad market's gotten worse over the last month or so, hard to figure out if that's because of macroconditions or because people are just uncertain. he says he thinks it's more uncertainty, and basically said fourth quarter is where we're seeing some weakness, where our ebitda will be challenged more than we thought, although looking at 2023, mr. shell says it's not that worrisome. i'm not that concerned pretty comfortable with '23, but the fourth quarter will be a little worse by the way, peacock, the

streaming service, reaches 18 million paid subs, up from 15 million at last quarter. comcast, our parent company, did get an upgrade today wells fargo -- >> wells fargo upgraded them >> it was a good call on their party to have it as a, you know, not even an equal weight, an underweight. now they're at equal weight. less negative on cable, more negative on nbcu is the sub-head of the piece >> and you work for who. >> i work for the nbc universal company. and have for quite a long period of time. yeah but you've heard about the ad market there comcast shares, which actually have been on a bit of a tear lately >> that's why i think that was a -- kind of, like, i don't want to miss covering the short, dividend good. buyback is a little muted. >> yes, a little muted >> what is that about? if the stocks are cheap, why aren't they in there hand over fist

>> there is a belief that is part of the strategy, particularly if you're not going to do something on the m&a front. of course, the go-to for every banker is, you got to figure out a way to spin out nbcu into something else, merge it, creat scale. >> do you believe that >> i think you got to think about it, of course, but there's plenty of gating issues as to why it becomes a more difficult transaction. guys, also worth turning to disney, because the company did late last week, and a couple of analysts have weighed in i thought, you know, barclay's sort of focused on this acceleration of the rate of amortization of their -- of certain content at disney. essentially means they're sort of changing the way they view, you know, the lifetime -- the overall -- how valuable, over what period of time is their content. so, if they tuck in on the amortization, shorten it a bit, that's going to have the impact, potentially, of changing

earnings guidance. remember, it was the earnings guidance in particular that shocked so many people barclay's says -- and you just read it there -- one of the reasons why disney's recent operating income guidance for next year was significantly lower than consensus expectations was because of that, perhaps, accelerated rate of amortization in early periods for their content. they go on to say at barclay's, this is not just a disney issue. this is something that other media companies as well, most likely, are doing, could be meaningful they all try and figure out, what's the value of my content in a streaming world how long can i amortize it >> that was amazing. far less profitable company than we expected. >> that was unbelievable >> half the net income we thought they'd generate in fiscal '22 only 12% of the free cash flow compared to their prior -- >> they need a catalyst there. they need something that says that, okay, look -- >> iger is not going to be a

catalyst >> you have to take each division we have a lot of people in these divisions. there's too many people, too many divisions i don't know i look at it d-- i read that piece. i said, talk about having your work cut out for you >> they try to be positive >> they tried to be positive >> still overweight. target at 120 over at moffett. >> tannehill ran for more yards than derrick henry try to be positive >> if you are interested, there's always a lot more information in the company's 10k. for disney, that's the case. >> i thought those pieces taken together were -- my travel trust owns it -- were just one more of the beatings will continue until morale improves. >> speaking of upgrades and downgrades, truist ups mgm to buy. they go to 50. a lot of the casinos, jim, benefitting today from this macao optimism >> my travel trust, follow by joining the cnbc investing

club -- suddenly, it's not a disaster and i'm anti-disaster and pro nondisaster. i think that wynn also has -- til tilman fertitta, maybe something is going on there. wynn is not run by that mob i used to love so much this guy, craig billingsley, he's good, but i loved -- they sold some of the land to boston. i think there's a lot of good stuff here but at the same time, what a run. so, be careful >> shares of apple are up, guys, bucking the overall trend on the market at this point >> when are they going to preannounce? that's the way every single one of these pieces reads. give me a break. >> and they would preannounce because, what, they're not going to be able to meet iphone demand as a result of the problems? >> there's so much demand. look, if you want -- verizon, att, t-mobile, i mean, these are people, when you buy -- you get

your phone through them. i'm thinking of switching. i'll switch to t-mobile. i make some john legere happy and get a new phone. >> john legere has nothing to do with t-mobile anymore. you'll make mike seaver happy. >> mike did a big deal with salesforce, not that anybody cares, because it was just business >> shares of alibaba also up again as a result of this resurgence of hope and enthusiasm involving the chinese economy. >> yeah. >> you're dubious. >> it's just that, they get you, and the party gets you, and the party decides, okay, enough money's been made. i think the party determines the prices it's not the pajama party. it's the people's republic >> you think the party determines the prices. >> the party determines the prices remember when they used to be

very chartist-oriented, the party? wow, we got to put a floor under this because it's going to be head and shoulders pattern soon. >> xi jinping is a known technical analyst. yeah >> the morgan stanley upgrade at china today, they point to a bunch of things. one is covid relaxation. property market stabilization. >> it's real >> regulatory wrapping up. those are all policy-driven. >> i think that everything that was done is exactly what you needed to do you needed to be able to find a face-saving way to open, and it's very easy this strain is just the flu. >> that's his out? >> it was brilliant. had the advantage of being true. the strain is just the flu david, i started -- i'm -- i'm not saying i'm not as careful, but i just feel like that they should be more boosted but if it's just the flu, you can call it the flu. it's the party the party determines whether it's the flu or whether it's -- see, the party, it's kind of a

totalitarian regime. >> it is >> filling you in on that. >> yes, high surveillance. very high. they can even surveil you when you're wearing a mask. they can still figure out who you are. it's amazing >> they have the ability -- >> 5g, by the way. >> they have the ability to recreate you and say, i really love the regime, even though you're an opponent of the regime they can create you, and it looks like you, and has them -- you can say, i really love this regime i didn't like it, but now i love it doesn't have to be you, you know >> pretty fascinating. by the way, speaking of all that dollar index today still below 105. it's going to be awfully close to the june 28 low >> i think that people have to start realizing that if it stays down, when the companies report in january, that is another tailwind, and i think that that's why i don't like those super negative pieces that i have been reading, because they seem to be out of sync with the idea that the dollar doesn't matter well, all the raw costs. raw costs are all lower.

freight is lower how about containers >> how about containers? what are they doing? >> containers, gasoline's flat for the year, right? >> look, i think there's a lot of good stuff happening, but no, the analyst -- these analysts, they want to fight the tape. don't fight the tape and the fed's pretty much laid out the course fed's -- did you see last week >> yeah, but that employment number on friday was pretty hot. a lot of people saying the terminal rate may be above 5%. i know you're not there. >> i'm not not with the pmi this week >> speaking of which, we're getting services pmi right now let's get to rick santelli hey, rick. >> hey, carl these are november final reads remember, the mid month read was the fifth consecutive month in a row that boast the composite and services were under 50 in contraction mode that remains the same. the 46.1 mid month read gets replaced with 46.2 that is still the weakest level

going back towards august for both these indexes, and 46.4 is for the composite. 46.3 was the mid-month, so both reads improved they're still the weakest that we have had going back to the summer, and they still represent the fifth month of contraction you can see that despite that weakness, we see interest rates moving up towards the highs of the session for ten-year note, that's at 357, so we continue to see the markets somewhat out of sync with both fed discussions and in many ways some of the very weak pmis, but "squawk on the street" will return after a short break.

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it's time for jim and "stop trading. >> some firms reaffirmed they think blue will have a fantastic quarter on reports on the 8th. i agree with that. i think the opportunity down seven may be what the doctor ordered. because i think when you get that many firms that are saying good things, you've got to believe that this could be a terrific quarter this is not to be confused at all with the f corp. this is what people wear at home or even at the office because they have casual pants and i think they've got a terrific dtc i actually think mirrors will be breaking. >> on the expensive side of apparel. >> true. but i think that the higher end has held up very well here and lulu is a premiere brand that doesn't seem to actually trade with apparel at all. it kind of trades as a -- like

an lvmh. >> are you nodding >> i was thinking of the f, which we talked about -- >> the f is different. it's clothing. is that the same as apparel? >> yeah. >> i don't know. >> meanwhile, marvel cut their stocks it's now above. >> intel will present at ubs later in the week. >> nice. >> we really didn't cover the market's reaction after the jobs number friday. sort of the way in which it escaped what could have been a worse session. >> i still think that the fed chairman would have been a terrible situation and i was shocked, but everyone has said, well, you know what, we have a hot market i think david's terminal rate versus nonterminal rate is important. i don't want to see an oil rally. >> you think oil might based on the opening up of the chinese economy, right >> opening up of the chinese

economy is the most important thing happening right now. >> you had been -- i wonder if you think 80 is a floor or a ceiling at this point? >> oil did touch very low. and, yeah, i think -- maybe it's seen its low for the year. if china is really back on, china will take all that oil from russia and instead of sending it back to europe. i know coal is making such a comeback. >> coal. europeans need it. >> csx is doing well, norfolk southern, we get upgrades every day. very exciting stocks, the rails. >> and it's getting colder in europe they benefitted from warmer temperatures. >> watch the rails union pacific is down a lot today. that's probably a mistake. there's some real good things going on people just don't want to believe it. >> you have a busy one tonight. >> splunk is this area i'm most

worried about. you know i'm worried about the enterprise software. the area i'm least worried about is makeup, david kimbell is doing an amazing job at ulta and prices for chicken wings have come down a great deal. it's wingstop's moment it's their moment. >> big piece in "the washington post" over the weekend about gasoline, wings, apparel >> i had a lot of wings this weekend. i felt very good >> at the game >> yeah. the wings were fantastic thank you, donna the wings were fantastic. >> congratulations, by the way >> thank you >> it was all you. >> we did really well last night. >> apparently richard fischer is involved with what the dallas cowboys -- >> ceedee lamb was - >> he's in great shape, but -- >> see you tonight, jim. "mad money" at 6:00. don't miss morgan brennan's exclusive with palantir's alex

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welcome back to "squawk on the street." rick santelli live at cme group

with break news. let's start with the november ism services index expected to be 56.5, a nice beat now, that is only the best since september was at 57.7. it is a move in the right direction, considering how many of the pmis have been moving in the wrong direction. this actually hasn't been below 50 or contraction mode since may of last year -- excuse me, since may of 2020. now, let's go to factory orders. expected up 0.7 for october read up 1%, up 1%. that's the best read since june when it was up 0.8 ex-transportation, it's still up 0.8%, and that's the best since june when it was up 1% durable good orders on the headline, 1.1. that bests the expectations of up 1%. up 1.1% is the best read going

back to june when it was up 2.2% take out transportation and we're still solid, but about hachlt every half the gains. we drop down to only 0.5, that equals our last look, our look for october was 0.5. these are finals they are, indeed, replacing the 0.5. if we look at nondefense ex-aircraft, that's also a final. 0.7 now becomes 0.6. if we look at shipments, which, by the way, last month at 1.5, they were -- or 1.3, they were the best going back to january, up 1.9 they actually improve. they improved up to 1.5. 1.5 is the best still since the beginning of the year at 1.9 it really does underscore how some of these supply issues are shaping up carl, back to you. >> rick, appreciate that rick santelli. good monday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla and david

faber and morgan brennan we already worked our way through pmis dow's down 350, holding by 23 points. >> we're 20 minutes into the trading session. here are three big movers we're watching vf corp, ceo and chairman steve rendle is retiring effective immediately. this could be the start of some downward revisions amid the crucial holiday season for other apparel makers and retailers shares are down 0.8% tesla is on the move with a host of chinese tech stocks they were reportedly cutting output at the shanghai plant but the company is batting down those reports as, quote, untrue. nonetheless, shares are down 5%. that said, we got more signs of a wider reopening in china, at least reports of such. that's giving names like alibaba a slight boost this morning. we'll talk about that later this hour. check out credit suisse is

moving higher as the bank moves closer to completing a $4 billion stock sale saudi arabia's crown prince along with some others are looking at equity stakes in the company's rebranded investment banking arm. those shares are up 4.5% so beaten down this year david? >> a rebound, they'll take it. they'll take whatever they can get. friday's strong jobs report renewing calls for higher rate hikes and leaving many wonder if we really can have a soft landing still in the picture steve liesman joins us to break it all down for us steve? >> yeah, that was a heck of a suite of recessionary data rick just reported, i caesar casticly ism services and factory orders beating expectations along with a strong jobs report friday, marking another data point that beat expectations. define the prevailing outlook for a cooling economy, careening towards a recession. at least for the moment. but the main outlook this morning showing most if not all

respondents forecasting a high probability of recession take a look to the national association of business economics. 57% of their respondents see a 57% of recession or greater in 2023 23% see a 50% chance or greater of a soft landing. now, aggressive fed rate hikes designed to slow the economy is the primary reason cited by economists for that impending recession. some believe the high wage gains in the jobs report could prompt the fed to do more here's the high north report, what the soft landing can seize. they have an argument worth looking at hard to have a recession without a sharp unemployment increase. peaking inflation, gas prices are back to where they were before the start of the ukrainian war -- russia's war on ukraine. low interest rates, down from september. credit spreads, especially in the junk world, have come in improving supply chain and cost of living adjustments coming from the government for social

security recipients this year and next here's evercore isi writing the broad slowing overall seems to be consistent with either a softish landing on are a mild recession. but the gradualness of the easing of labor markets condition is difficult to square with something more serious so far. a danger of the soft landing, you saw in the jobs report, the stronger economy doesn't allow inflation to come down or spooks the fed it won't the fed would then raise rates more to bring it down, creating a recession that might not be necessary. carl, it's not crazy to think maybe this all works out somehow, some way. >> we're going to find out, steve. thanks steve liesman. for more on where the markets may go from here, joining us, u.s. bank wealth management's lisa erickson and pimco and georgetown adjunct professor, paul paul, you're in tune to this push and pull between some of the good work that's gotten done and fighting inflation, but the unwillingness or ability of the fed to let the good times get out of control, so to speak.

>> yeah, i think the fed's walking a pretty thin line here. i think they're doing it very well i thought chair powell's speak last week at brookings was absolutely fabulous. he was more transparent than he's ever been before, i think, in this cycle. and they're in the restrictive neighborhood he pounded the table they're there. real rates are up and positive across the entire curve. you're seeing goods inflation roll over. the housing bubble is popping. essentially they're trying to find the right street in the restrictive neighborhood going forward, which i think under goods -- undergirds the probability of a soft landing. i would associate myself with the soft landing camp as a feasible and likely outcome, not a remote outcome. >> interesting lisa, you're a little cautious on equities at least in the new year does that mean you're not quite on board with that scenario paul describes? >> we are cautious, to your

point. really, if we look at what's going on both from a top-down basis as well as corporate earnings, we do see, even though there have been some positive surprises in the data, that definitely the economy is still on a downward trend. we do have risks, as paul pointed out, with the fed being in restrictive territory they acknowledged themselves as very hard to calibrate exactly how to maneuver to get to that soft landing so, in our view, whether it's an outright recession or maybe even a growth recession where you have maybe close to flat or only slightly positive growth, that could still be a very difficult headwind for u.s. equities again, as those growth rates continue to come down. >> paul, what do you make of that, what's happened to earnings estimates and even some macro desks call for a weaker down stock market next year. how much vulnerability does the real economy have given what the fed's already done >> i think the economy is going

to be soft, and i agree with the notion we could have a growth recession, which is also known as a soft landing. on the earnings side of things, i think we've already taken the growth stocks out and shocked them they've had a nice bounce recently but we got reality back into that sector i think the industrial sector will be fine i don't want us to pound the table and get wrapped around the axel about earnings. the stock market is in fair valuation. it could go into a trading range, particularly after this big bounce over the last month but it is not time to be a big bear on stocks that was a year ago. >> so, paul, just to dig into that a little bit further, we've had this conversation repeatedly on our air over this past year is it still a bill challenge for powell and the fed then every time that he comes out and the market at least the equity

market parses through and tries to find the slightish bit of dovishness in his tone and the words he uses and we see a rally? the fact he has to come out and jaw bone that, is that no longer the situation? dare i use the word pivot, a pivot to market reaction to him based on what we saw last week >> i think he's got a very difficult job. because monetary policy is essentially all about forward guidance these days. chair powell actually noted that last week. it's not what they're doing so much with the spot policy rate, but their guidance with respect to financial conditions, the yield curve and equity market. so, it is a rhetorical gain, particularly now so, i think you'll have to tack back and forth and effectively rhetorically manage financial conditions i think he's proven pretty good at doing that. i think this is the new reality that we're living with

monetary policy is 99% words and 1% action. >> lisa, given the caution, given the uncertainty, as we look to a new year, where should investors be finding opportunity right now? >> we're actually very interested in higher quality fixed income as well as global infrastructure the reason why is when you have a more difficult economic environment where, again, slowdown is the current name of the game, having that higher level of cash flow up front as well as from diversified asset classes really makes a lot of sense. that helps buffer the portfolio. again, as things go through the year, our hopes, again, is that inflation continues to come down we see some loosening of policy, even still in a more tighter mode, but again, that remains to be seen. so, we would start cautious and emphasize those higher income asset classes at this time >> lisa, great to see you both thanks for the help on this

monday until next time. as we go to break, take a look at the road map for the rest of the hour china stocks rallying on some reopening hopes. key names to keep an eye on. after the break, my exclusive will palantir ceo alex karp talking everything in the midst of the ukraine role and palantir's sliding price >> do you think wall street truly understands what palantir is doing, particularly on the commercial side, given the fact the stock is down 60% this year? >> i think wall street largely understands tech companies and punishes tech companies. wall street will understand palantir as they take account that we're outstripping everything with our foundry problem. it will take a while honestly, we were talking last year, we're going to do a, b, c,

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>> we cespent well over a decad if you look from inception, building products for peace. to say you can distribute vaccines and organize the most important institutions in the world, but products of war we believed and believe, unlike most of our colleagues at silicon valley, if you are strong, you prevent the adversary from acting up that's why we thought this war might happen we build products that allow you to do very high-end ai-enabled targeting. most of the details we can't discuss, but our adversaries are very, very well aware now of their impact these products have changed the course of history. they changed the power structure of america and, perhaps, most importantly as a former academic, our adversaries used to run around the world. we have a significant business outside of america saying, well, america has liberty and

entertainment and freedom, but we're better at fighting wars. we're better at building products of war. we're better at surveillance and now, lo and behold, it turns out those of us of purveyors of not just war products but of liberty, most importantly, the united states of america, are not only better at entertainment and having fun, we're also better at building products of war. and that narrative is going to change the world, is already changing the world because of the many things we're not allowed to say that have happened in ukraine, our adversaries know every single one of them. we are are no longer viewed, america, as just a place that produces the most important articles of liberty, but as a culture that builds the best software >> there's a lot i want to pick up on there. i guess, the first thing, though, is i see these conversations happening at places like this forum this idea that we have to move more quickly where things like software and new technologies are concerned. dod and other entities are not intoog enough, not deploying

enough, but then i hear you talk and it sounds like maybe that's not necessarily the case at least where palantir is concerned. >> a lot of tech companies -- not all, but when we had our conversation last year, we're still in a phase where most software companies, certainly most companies in silicon valley, their basic view is how can we help the adversary world pretending to help america first and foremost, what we need to do in america, especially everyone in silicon valley, we're aligned with we're going to give our best technology and products to u.s. first, not second, fourth and fifth, because we have the crazy idea that no one cares that makes them feel superior to everyone else that's the most thing. the u.s. economy, we're seeing this in our software sales in the u.s., especially the u.s. government, sure, there's a lot you can complain about it is the best at adaptation we had to fight our way into dod because of the size and footprint of our work, people think we're insiders we see dod's work twice, but once we won twice

and so the u.s. government has been it's rating and adopting and adopting, quite frankly, the larger problem is many of our allies are living in the '70s where hardware could work alone and spending their money on local industry that isn't that good at software i think the onus of us in technology is to really invest most companies can't be focused on the u.s. military the way we are because -- but they can't be focused last on the u.s. military and complain it's too hard. >> is it changing now because of ukraine? >> well, there's a lot to changing -- a fairly good situation is getting better for technology companies because the u.s. economy and u.s. institutions in general are very pragmatic. much less ideological than other countries. how did it work? how much did we spend on it and what were the results? it's a very american way of looking at something it's exactly the way you look at tech, whether it's a company or a government and, you know, there's the outside version of what you're allowed to say

the inside version with all the data, a lot of which is classified, you see that it is not just a benality that we're in the software world. what is america indisputably the best at doing? building software. and no one doubts -- if you ask most americans, they're like, we're good at football, we're good at films that i never watch. we have, i don't know, we have a great finance industry we're good at having politicians that none of us really understand we have a lot of aptitudes what we're the best at is building software. it turns out for transforming your industry in hard times and winning against adversaries, it's the single most important thing. >> sort of speaks to what you talked about in your recent letter, which is you shifted from insurgent outsider to incumbent. this idea of software as a prime. how big is that opportunity for palantir >> america spends about $800

billion on software. also, we're very big in britain and a number of other countries. to use a term i hate that financial people love, total addressable market is probably north of $900 billion. and, you know, we believe we have a single -- the single most important components for adaptive warfare against a large adversary that's willing to allow their troops to die. exactly what you see us on ukraine. the percentage of the $900 billion we would be able to capture is very large. pragmatic people are like, i could spend $100 million on something that has marginal impact when you ask value, you ask, what can i build the adversary can't build? we're building things adversaries can also build but software they cannot keep up with us. more and more of that market is going to come not just in palantir's direction but in the direction of people that can build software that is useful or critical for warfare

>> we hear so much about china's investment in technologies you mention the surveillance states earlier in this conversation, i mean, the sing surveillance state, case in point, what we've seen play out in terms of protests and initial response to those protests in the last couple of days can we really counter china when technology and -- where technology and software are concerned? are we that much more dominant when they have a different business model and they've been much more aggressive on the government side? >> they have a business model to control their citizens we will not surpass them at that thank god. we have a business model in america to increase liberty at home and to make sure adversaries that attack us or our allies pay a very heavy price. we need to stay focused on our business model if it's central control, either of economy or your citizens, they win if it's about distributed systems where you share information that's crucial for weapons of war with your

adversaries, we have a huge advantage. we actually have allies and friends. >> let's talk about the commercial side of the business, especially when you talk about technologies that have been applied to, for example, evacuations in afghanistan being the same type of technologies that are now being purchased by commercial entities. >> well, what we see is that the most important market in the world, the u.s. of a, the most adaptive market in the world our commercial offering is flying off the shelf we grew in the last 12 months 102% in the u.s. america adapts, adapts, adapts, adapts, and will in the end buy the single best products on the market that's why we're succeeding, despite the fact that wire new to this game and building out a commercial sales force communicating with normal otherwise adult people is not our -- something we're particularly adept at, but we're very good at building software the same software use cases you

have in government can be applied to america. >> do youthink wall street truly understands what palantir is doing, on the commercial side, given the fact that the stock is down 60% this year? >> i think wall street largely understands we're a tech company and punishes all tech companies right now. the interesting thing about palantir, all of our products historically, whether our intel product, mapping, the ai product that changed the world, the product we built for distributing vaccine is five years ahead. our commercial product is five years ahead of what wall street understands. wall street will understand the value of palantir as they take account of the fact that we're outstripping everyone with our foundry product. it will take a while just honestly, when we were talking last year and i was saying, we're going to do a, b, c, d that looks bat [ bleep ] crazy it's not that bat [ bleep ] when russia goes into a country by the way, i would say palantir has been over and undervalued.

clearly we're undervalued but at some point we'll be overvalued again. >> that was my conversation with alex karp. if you wonder what's in the background, that's a piece of the berlin wall. that took place at the reagan library. when we talk about ukraine, whether it's palantir, andrel industries in the conversation i had on "techcheck" on friday this conflict has become a case study for new technologies we've been talking about and dod has been talking about for a number of years now in the case of palantir, software is a prime, part of what's being referenced is the titan ai competition i actually had an inside look at this competition back in october at the army's big conference, ausa as well that competition is currently under way. it pits palantir against raytheon it's a retrofitted combat vehicle into what is essentially a computer on wheels

you're talking about connecting sensors with users in the world to help beyond line of sight targeting. that's one example in this conversation about some of the moves a company like palantir now is making on the defense side also worth noting, you can't really talk about software without talking about the hardware, the infrastructure, upon which that is possible. that gets us back to semiconductors, which was a key discussion this weekend at the forum, including on the panel i moderated. we can get a bit more into that piece of the puzzle as well if you want >> okay. when should we do that >> let's do it right now this was actually something that came out of the wall street notes, analyst notes we've seen from reagan forum was tied to this panel semiconductors lockheed martin ceo on my panel, basically, said china, taiwan,

south korea are the dominant chip suppliers -- global chip suppliers. in a nightmare scenario, in a crisis, he would expect and the u.s. should expect china would withhold chip exports, a blockade of taiwan, a lot of talk of a blockade of taiwan, and basically blackmail south korea of any chip exports to the u.s. first time i've heard that scenario laid out. on the panel, under-secretary of commerce alanest e e ealanestev that and that's seen by the biden administration as a way to slow china down in this technology, i'm going to use, they wouldn't use the word, but i'll use the word cold war, if you will, and that commerce is looking at other ways and other industries where similar policies might be crafted. that's something, especially in

a day where china stocks are trading higher, that investors should think about you'll see more around industries in the decoupling of the u.s. and china where it makes economic sense. >> so many important issues to continue to focus on and we know you will your beat just keeps expanding in terms of all those different subjects. >> national security is a very broad topic. certainly given the geopolitical situation we see ourselves in, it's touching everything right now. moving on, morgan stanley is naming a new top pick when it comes to the travel business tend out why and what it is afr the break. we're back in two.

as we get further into the holiday travel season, airlines outperforming the s&p over the last three months. the global jets ticker jts up 10%. core holdings, ual after an upgrade from morgan stanley to buy as the firm remains bullish on the air travel outlook for 2023 analysts crowning delta a top pick as they see a bull case for

the stock as high as 65 or even $70 a share. we got more market action in a minute first, a news update with our bertha coombs. >> here's what's happening at this hour. two north carolina power stations were intentionally struck by gunfire over the weekend, leaving more than 30,000 customers in the dark, according to authorities the outages began just after 7:00 p.m. on saturday after officials say someone attacked the duke energy stations in moore county crews estimate it could take until thursday until power is fully restored no arrests have been made so far. bob mcgrath, one of the original sesame street cast members died in his home at the age of 90. he played a friendly neighbor and music teacher for half a century. he appeared in the sesame street pilot in 1969 and went on to work on 47 seasons of the show departing the series in 2017

a piece of rock 'n' roll history could be yours come january. elvis presley's private plane, a 1962 lockheed jet will be up for auction next month presley bought the red and silver, considered the jet of choice for celebrities and ceos back in1976 for $840,000 in today dollars that would be about $4.4 million previous auction last august failed to find a buyer for the jet, which had a minimum starting bid of $100,000 mother garngs i got to think it's probably not going to be as fuel efficient as today's jets. >> i was going to ask, and maybe i missed it, whether you can actually fly this plane or not >> i would hope, right, if you're going to pay for it you'd want to be able to fly it, but then again, who knows. >> all right bertha coombs, thank you. energy is headed higher amid new russian sanctions and hopes for a quick reopening in china

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equity still under pressure after we got ecodata hotter than expected the ism unemployment index back above 50 let's get to bob pisani with more market reaction. >> the ism higher than expected, jobs higher than expected. we're lower than thursday, only 1% sector, risk-off as you might anticipate we keep an eye on arkk, that was weaker at the open, semis, energy weaker. the china play, the energizer bunny keeps going. it's running out of steam. if you look at the big stocks that trade on the new york stock exchange like alibaba, kind of

on the flat side today that stock was 60 something a short while ago, a month or so ago, month and a half ago. now these are 90 they're starting to run out of steam at this point. keep an eye on banks and credit cards. goldman sachs will have a big financial services conference tuesday and wednesday. and will speak tomorrow on the state of the consumer. we'll get an update on how the banks are doing in the next couple of days flattish today biggest decliner on the s&p 500 right now, vf corp that's an apparel maker. they've had had a terrible year. vf corp is down 55, 60% on the year ralph lawyeren, columbia sports year have had a terrible year. not surprising what they had to say. what's surprising is they lowered estimates five weeks or so ago and lowering again. citing lower demand in north america. mostly north america but they have a european sales unit as well china also citing the covid disruption there as for where we are for stocks in the fourth quarter, good news

is we're up 13%, s&p 500, but earnings keep trending down. something's got to give here the pe ratio, because of this trend, has been going up it's approaching 18. when you get over 17, folks, you to have a soft landing or expanding economy. those are tough ones to argue with right now the reason people are starting to feel optimistic, david s because we've had the right sectors turn around in the fourth quarter we're up 13% industrials are up 19% technology is up 15% materials. these are the reopening names, industrials and industrials and tech on the growth side, david, up almost 15%. that's why a lot of investors are still optimistic back to you. >> thanks, bob you just heard the index up nicely china stocks in general had been up after plummeting last month and for much of the last couple of years investors somewhat optimistic that the country is going to continue to relax that zero covid policy

we have seen rallies after beijing and shenzhen said they would require commuters to get a negative test before traveling the country is said to continue to have those easing measures. let's get more into this and what it means. joining us is msa capital's ben harbor good to have you and check in with you just give me your take in terms of the protests, whether they have been effective in some way, enforcing the government to really roll back these restr restrictions and what your expectations are as a result >> it feels like a marked change today. the opening up you mentioned is on the way and it's going to expand significantly our anticipation a month ago or so is that we wouldn't see a full reopening probably until the end of 2023. and maybe a partial reopening, you know, q1 i think that's been accelerated by some of these activities,

some of the protests you referenced they are now actively working to quell that through these active policy measures. so, rolling back people's mobility, allowing people more mobility in the major cities, allowing people to potentially reduce the quarantine as recently as the offset of this -- of the end of the year, early next year. and there's a lot of optimism in the market the perception is everything that's weighing us down is due to human action. so, i think it's a huge shift. >> you think it's a huge shift is the optimism warranted? there have been plenty of stops and starts along the way, as you know better than i what gives you confidence this is the real moment where things are going to shift >> i think we can have dips and peaks again.

nothing is set in stone. i came on the show on the 24th of october after that huge crash, central party congress, and to me it felt leak a huge emotional overtreekz what was a fairly mundane event fast forward to today, a month or so later, and most of those stocks are up 50% to 100%. and that was off of really unfair bottoms really off fundamental bottoms regardless, i think there has to be an upward trajectory here there are so many things we can tick off along the way to help stimulate that be it opening up, being the clarity around the u.s. public accounting oversight board, whether companies are now going to be cleared for future ipos in the u.s., be it more stimulus within the economy there's so many bullets left to fire >> we checked in with you, i don't know where you are, but you spent a lot of time there. has your experience changed? are you expected to in terms of just doing business on the ground in china?

>> it's certainly a much more of challenging environment than a couple years ago there was a lot of exuberance from to 15 to 2019 a lot of cross-border flow, flow into silicon valley and global capital. that's been squeezed significantly. there's very few western companies coming in, thinking about expanding into the market. very few western investors want increased exposure to china but others have replaced them. new markets, particularly the middle east, southeast asia, other allocators that were underweight china are starting to come into the market and sensing opportunity now at these bottom prices. it is a very different world than it was pre-covid. many expats are gone the sectoral mix in the area is very different consumerism is much less weighted and more so core technology and health care the landscape looks physically different. massive change in the last three years.

>> ben, it's such a key point. certainly something that came up in my conversations over the weekend where i was at reagan national defense forum that and also just this idea that with the semiconductor, export controls we've seen put in place by commerce in the u.s. in recent weeks and signals, perhaps, we could see more of those types of actions, potentially taken, where other industries are concerned, does the decoupling between the u.s. and china continue and continue now at perhaps an even more accelerated pace >> i believe it does to what you alluded, i believe there's likely a capital ban floating out there we know it's being drafted and wording and terminology is being worded it will probably come in some kind of presidential order to avoid going through congress now that the democrats have a bit more control than expected, it might go that way certainly that will be an effort to name and shame and at least psychologically if not legally

derive people away from the market and that will come with continued technology decoupling. no, i think it will accelerate >> ben, appreciate it. all the help on china. obviously, a huge story. we'll talk soon. big implications as well for oil where prices are on the rise on the heels of new sanctions from the west on russian crude. our brian sullivan joins us with more this morning from brussels. hey, brian >> you know, carl, i'm not a math whiz but i play one on tv isn't it amazing the odds of china reopening or loosening these controls on the exact same day that the eu sanctions and the price cap kick in? it's kind of amazing how that just may or may not have been coordinated. i'll leave others to speculate on that. that's the eu parliament you know all the headlines from oil. oil is moving up a bit this is not a today story, guys. this is a next week, next month

story. opec keep the production cuts going. they didn't change anything but that's still a 2 million a day cut. you have the eu sanctions basically banning themselves from importing russian oil you have the price cap, which is then supposed to deny russia revenue for oil they sell outside of the eu. and, oh, yes, the china stuff you just mentioned there's a lot of stuff happening all at once. there is some concern because russia, they obviously want to get their oil and sell as much as possible around the world there is growing concern of some weird stuff going on in the oceans for example, some people i talked to suggested something like this. there's a price cap but let's say russia sells oil for $55 or $60. they sell $60 oil to india or china or turkey or wherever. those countries buy more than they need. europe is now suddenly becoming desperate for oil. guess what india or whoever might just turn around and resell that back to

europe at, i don't know, $90 or $110 a barrel, because some refineries in italy and germany have said, we don't know where we'll get the oil. earlier today, white house energy adviser spoke with cnbc and said it's possible but unlikely listen >> you're going to see there's a lot of limitations on shipping and other logistical concerns for the russians to be able to significantly expand what they're doing. so, i don't see that as -- you know, that may happen on the margins, but not as something that is going to be a major play in the market. >> there are already reports coming out of super tankers. en sure if they can go through because they don't have the proper insurance that's the concern higher costs also a concern. we'll hit more on that in the exchange, 1:30 eastern time with kelly evans. >> looking forward to that brian sullivan, thank you. after years of secrecy, the

u.s. air force and northrop grumman have unveiled their b-21 bomber we have more on that story next.

welcome back to "squawk on the street." i'm steve kovach stocks are mostly lower to start the steve kovach consumer staples are firmly lower with names like kerr, dr. pepper and consolation brands among the worst performers kroger is the biggest laggard after two down beat anal kroger is down 6% in a week >> a quick programming note as we go to break just one day away from cnbc's latest financial advisors summit where we'll be talking with financial heavy weights and getting their takes on the state of the markets addressing client

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still ahead this morning on "tech check. the chinese tech stocks are rallying on the reopening hopes and more on what that means for the likes of apple, plus the bear take on amazon and why one analyst warning of wkneaess ahead and that's coming up in about six minutes. don't go away. we all know this equation, right? he'd crunched numbers day and night. that's it. to maximize profitability. morning. i have quarterly numbers that are beautiful. and forecast revenue from every corner of your organization. is that important? or you could use workday. the finance hr and planning system that helps cfos make better decisions faster. for a solve problems like a genius world. workday. for a changing world. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way

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welcome back to "squawk on the street," after seven years of secrecy amid flyovers of existing bombers to a upof 2500 including the secretary of defense and northrop grumman employees who only just recently were allowed to tell their families what they've been working on, the air force's b21 raider rolled out to the public friday night for the first time. >> ladies and gentlemen, our mission's b-21 raider. >> this is the northrop made bomber touting a space-age stealth coating. it has the ability at some point to fly without a pilot it's designed to deliver conventional and nuclear weapons while flying undetectable to

advanced radars anywhere in the world. this is a key piece of u.s. nuclear modernization. it is a classified program estimated to cost upwards of $200 billion over the next 30 years for aircraft based on one service aircraft from the reagan national defense, i spoke with the air force's top general, chief of staff c.q. brown about how this helps usher in a new era of deterrence >> what it really means is it provides us long-range strike capability that can penetrate any threat environment and from that perspective, it actually helps us against our adversaries and our allies and partners when i think about the mission of the united states air force, any time, anywhere, that's what the b-21 is about. >> i also ask how the use of digital manufacturing techniques has enabled northrop grumman to so far stay on budget and on time for six bombers that are currently in production. >> it changes a bit of our culture to work in a digital

environment and using a major weapons system like this and seeing not only what the current industry partner on the b-21 and having talked to other industry partners or going down the same approach and it will make sure that it's adaptable because the threat will evolve and as the threat evolves we will evolve not only with the airplane itself, but the mission systems to provide us advanced capability because we want to stay ahead of the threat and that's the goal. >> think, that is part of the conversation we had with northrop ceo on friday despite the fact that we did get this rollout, still some scant details around this aircraft because of its classified nature it is expected to take its first flight next year and we are anticipating that you will see the first production contract roll out next year and this aircraft and service some time according to analysts

mid-decade >> mid-decade. six being workeded on right now, though, correct? >> yeah. six being worked on right now and jefferies put a note out on this, as well, b-21 is expected to deliver 13% to overall north ropp sales come 2025 and talking about a 22% kager in term was growth and it it speaks to northrop's strength on the top line. >> got it. that will do it for us on "squawk on the street. "tech check" starts right now. >> good monday morning and i'm carl quintanilla with deidre bossa and jon fort t. it has accelerated timeliness outside of china one wall street firm says amazon could fall 45% from here given its exposure to inflationary cost headwinds and a potential impact from slowing consumption. stocks are down by that amount this year and we'll talk to th