labor. we got about ten seconds but it's different, isn't it >> that is different and we, again, expect that labor component to do its part in bringing inflation down and see plenty to do, which we lay out in our 2023 outlook that was published this week. >> very good thank you both good to have you both on make sure you join us tomorrow "squawk on the street" is coming up right now ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. china loosens those covid restrictions, but the trade data add fears to worries about global recession we did trim some losses on this continued decline in labor unit costs. those easing covid restrictions, china is pulling back from that zero covid policy. >> plus, morgan stanley is joining the chorus of layoffs. we'll give you some details on

that and shares of paramount, they are down again in the premarket. this follows yesterday's big drop share an exclusive that we did with paramount's ceo bob bakish. >> let's begin with china this morning, relaxing those covid restrictions,moving away from zero covid following those protests, although the trade data, the biggest slump in two and a half years or so >> they had to pivot they had to find a way to be able to save face. i know there are people who keep saying there's opposition. you know, they just coronated the guy. i think what does matter is the restriction where you had to take a test before you went anywhere else, that's over so you can go to the hawaii of china and no longer take a test, which might have said that you had covid and therefore you had to go to a camp. i think that the opening of hainin, which is the vacation paradise of china, cigsignifieso

me, back to normal whatever numbers you saw that were negative are at the bottom. >> right although as carl said, you did have exports and imports both contracting at steeper occupations in november than had been anticipated now, you're looking at a number of the shares this morning you can see, though, the move up there. i mean, we have had a very significant rally in china-related stocks over the last few weeks as first there was, well, maybe they will start to ease, but it was very much unclear. then there were the protests, and then there have been the real, concrete steps towards easing that policy that, of course, has, in part, contributed to what we're looking at right here, which has been a significant cut in demand in china that has resulted in very weak economic numbers >> well, but economic numbers are a thing of the past. >> yes they're backward-looking, of course >> yeah, i mean, carl, major change we have been waiting for a way for president xi to be able to save face.

it became very easy. all he had to do was say, this strain is not as bad as the flu, so let's open our economy up maybe zero-covid in the eyes of zero bad covid worked. >> it's hard to know ft has a piece is this morning suggesting they could be in for a tough winter of covid death. 50,000 a day >> i'm no longer buying it i now feel that -- i feel that omicron is just simply not like the others >> but that's our issue. we've got prior immunity, prior infection. they have none of that >> i know. okay to be very specific about them, you'll never know it >> true enough >> you'll never know it. i mean, maybe they'll a little it flu we have had more flu deaths this year >> they might. >> they just call it flu >> they have been changing the rhetoric around the virus, indicating that it is not nearly as deadly as it had been

but to carl's point, there is still the possibility of significant death, particularly among elderly population that has yet to be fully vaccinated and even when they have been, a vaccine that is not as effective as the ones used in the west >> okay, so, we had a million people die 400,000 of them shouldn't have died >> the only real question is whether you believe it are they truly going to do all they seem to be doing? there is some doubt among the investor base they're going to follow through on this it's more of, we shall see >> i think that it's better than where we were two weeks ago. we act as if -- this is -- this reminds me of oil. when oil was at $120, it was going to $150. okay, three weeks ago, we thought china would never open now you're able to go to the chinese hawaii i mean, can we just admit that there are things that are changing that are positive i know it's dangerous. >> is this a positive, though? isn't this going to be inflationary, potentially? >> their economy is so

deflationary right now, they got to save it they're in a massive deflationary spiral, not unlike pre-vimar, so let's say they got a -- >> too early to worry about it having an inflationary impact. >> they could have major defaults in their entire property sector, which is falling apart. >> although, to your point, it could have an inflationary impact on oil. >> that narrative was left out look, let me step back for a second >> please. >> many things have been regarded as positive when the market was going higher are now regarded as negative, because the market's going lower, because we didn't get through the 200-day, i kid you not we have so many trend followers in this market right now, david, that when things are bad for five days, suddenly information that we think is good is now bad. and i'm not playing that game. i'm not saying that something that was good is now bad because the market's going down.

that's not -- >> same man is judged as sane in an insane society, jim >> you guys been using that app? >> where you sing in apple music? >> the new one, the cpd? i said i wanted a poem about "mad money." it produced a poem i'm going to produce something about you. it will be better than you it's in "the new york times. i did a poem about "mad money," started off with boo-yah this thing is smarter than anything i'll do one of yours and it will start with skepticism, lead to paramount and bakish and then back to me done >> soon enough, we will be replaced by a.i., and you'll be like a blow-up figure. they'll inflate us and we'll talk >> i thought that musk was headed that way, but he apparently isn't bogged down by twitter, i keep hearing this >> jim, we mentioned the labor unit costs came down >> i thought that was great, but

you know what? the futures are down, so it must not be that good i'm not going to play stupid, carl >> my question is, in the next five days, we've got ppi, cpi, used cars. do you think the market's coiling on data that will be cooler than we think >> yes >> you do? >> i absolutely do, and i feel that what's happened is when you speak to trucking companies, when you speak to companies that are involved in, say, waste management, when you speak to companies that are involved in anything e-commerce, what they say is, we don't want you. we have all the people we need, and that's how wage -- that's how wage stabilization occurs. but people look at the nasdaq futures, and they say, i must be wrong. i'm not -- i don't -- >> what? >> what could be so important? >> what do you mean? why are you always so focused on what i'm looking at? >> because you're my partner, and i like you very much >> well, i like you very much too. here's what i'm reading.

a note that indicated, we had bank of america yesterday at a conference, signs of consumer weakness with spending starting to slow. consumer deposit balances are starting to come down as well. we've obviously talked a great deal about private credit funds hitting redemption limits, whether it's breit or sreit or bcred or go through a lot of them "the journal" article yesterday by nick. >> he's the oracle now >> labor intensive services sectors could lead more of them to support raising the benchmark rate i'm just going through -- >> is powell a ventriloquist and this guy's a dummy i'm tired to of that too. >> just because you're tired of it, doesn't mean you're going to be right >> what i'm looking at is empirical. when nordstrom says things are more competitive, when ali's doesn't deliver a great quarter, when morgan stanley is laying people off, when the only

positive note i get this morning the lululemon, when dave and buster's says the current quarter is not going well, i conclude, wait a second. things are a little slower but none of those are positive >> no. dave and buster's comps are tracking three prior quarter, 13. we saw the downgrades of trip and expedia and airbnb >> airbnb was -- i'm urging people not to read airbnb because you won't travel what it basically says is, people stopped traveling, don't you travel i mean, i'm trying to book a holiday vacation, and i read these things, and i just said, you know what? if i cancel, maybe two weeks from now i'll get a better one the research today is positively as negative as i've seen, which typically means to me that things are getting overdone. the only positive comment was something that was wrong about how applied materials is the one to buy there's nothing with the chip glut there's no reason whatsoever to buy. >> how about toll? >> toll is interesting

we had the conference call i happen to think that the world yearly, but when we look at toll, they did have a lot of people -- a huge number of -- they had top and bottom line beat but there's -- the buyers are on the sidelines buyers on the sidelines and numbers were not that good in the future >> yep orders -- contracts down 60, but they did talk about lumber being cheaper. >> what's so incredible is that you never would think that the gross margins would be going up right now. it should be the opposite. gross margins should be squeezed, but they don't have -- the country doesn't have enough homes, which brings me once again, david, back to the story of this moment, which is breit >> really? you want to come back to that? you did that on the show yesterday, too, didn't you >> look, okay, let's say you talk to a wealthy individual at any of these firms what do you think they owned >> it's like the common thing that they own was breit because jonathan gray and blackstone were the finest, smartest.

>> it gave high net worth investors access to levels of private equity real estate investment they didn't previously have. it was through rias, this channel. a lot of them may not have been aware they couldn't necessarily get their money out of certain limits i don't know if it was a part of breit for the very beginning not something nefarious that's happened here. and it is being covered very closely now, suddenly, after i was talking about the enormous inflows into this unlike anything we've seen, really n m, in many ways the product has been around for the last five years, but the inflows during the spring, even, during a very low rate environment, yes, were incredibly high. billions and it's very high net fee income for blackstone, and that has resulted, in part, as to why blackstone is down in fact, today, jim, you've got an analyst who lowered his rating on the stock last week coming in and cutting again, cutting gross inflow this is csfb and redemption

assumptions further for bced and breit, reflecting worsening data points since their downgrade and worsening macro. >> how are the markings there? >> well, the marks are going to come, and they're going to be lower, one would expect. >> let's look at something how big? >> i am curious as to why you think this is so central others would argue, this is important, a story that i've been focused on for some time. that said, it's just one small part of -- >> it's a pastiche you have bezos saying, batten down the hatches you have jpmorgan -- i mean, you can say whatever you want. the takeaway of jamie dimon was, you got to be really careful, because some bad times are coming and then you have wealthy individuals in these products that get additional income, not unlike, by the way, in 2008, i don't like to go back to 2008 -- >> by the way, there were also some asian institutions, unknown to us, frankly, that owned some

significant amounts that redeemed and in part may have been responsible why they hit that 5% of the quarter limit >> the canary in the coal mine yesterday. i hate that. >> that was unfast >> using canaries? they have devices. mine safety. but what matters to me is that this is what -- when you meet wealthy individuals, i have not met a wealthy individual who wasn't in this thing i mean, i can't believe this this thing was, like -- it was like cash. >> it still has a 4.5% dividend yield and capital appreciation, so yes >> can it put pressure on rents? >> i don't know. >> i think it can. >> the pressure on rents would occur as a result of dump. >> got to get out. sell and it's a win that's why i say a broader pastiche, win for powell carvana, huge win for powell >> is there carvana shares -- >> lower carvana, basically, is hertz there's a lot of cars.

carvana -- if carvana goes, so to speak, david -- >> yeah, well, that seems to be the prevailing wisdom, that carvana shares are going to be down sharply on that news that apollo and pimco have gotten together to make sure they have the same negotiating package on the debt for potential bankruptcy >> all i can say is -- >> we'll talk about it more. >> they're happening suddenly, they're negative because the futures are negative and that's a bad way to invest >> definitely sets the tone as we're down four straight days on the s&p, three straight on nasdaq when we come back, don't miss david's exclusive with paramount's bob bakish, stock down double digits since the beginning of the week on the heels of the comments yesterday. we'll get to names like carvana, downgraded again today by wedbush to a $1 targ resqwkn e street" in a minute wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations,

like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back.

welcome back story in the market yesterday was the continued tumult in the ad market having an impact on all the stocks that you see right there. take a look at some of the losses the latest, you know, we had jeff shell, who runs nbcu, talking about a weak ad market, and then yesterday, about 11:00 eastern, bob bakish, ceo of paramount, also coming out and saying, essentially, the fourth quarter not going to be better why was that important he and i had sat down at a goldman-sachs conference in september in which bakish had

been relatively positive in his thoughts about the future ad market, so i asked him, what changed? >> we're just not seeing that improvement that we had hoped, and so as a result, today, i in indicated the fact we're going to come in a little lighter in the fourth quarter than we did in the third quarter, said it would be comparable performance. the market values certainty. they don't like uncertainty. and there's a lot going on in the broader economy, in media and transition, and tv versus streaming, and so people don't like that in general, and when they don't like that in general, they err on the side of conservative versus aggressive >> of course, they have been selling this stock for quite some time, and paramount's not alone. you've seen the weakness we just showed you in disney and roku. >> roku's got that platform, but they can't be encouraging. >> the ad market, later in the day, i had another conversation with another meeting executive -- let me just make

sure ad market is imploding that's what somebody said to me. now, bakish did not say that but you know, there's no spot market right now >> have you looked at the crypto ads? they dropped 80% for the first time quarter that was a giant advertiser. gemini went to 2,500 >> it's a good point crypto is an important component of what we're all advertising budgets. >> they were that's what people -- >> lot of it's gone away you can take a look at paramount sh shares the destruction of value in this name and so many others, go back to cbs and viacom and where it is now you have the arkagos where they did sell over $2 million worth of stock but it's not been a pretty story >> so, let's just go over this for a second >> sure. >> there is probably no asset as important in tv as nfl >> nfl is the king

>> there may be no better presentation of the nfl than in cbs. this used to be the way that you were able to talk about your schedule there's no doubt about it, i think anyone who watches cbs, i don't know a single person who wouldn't say it isn't among the best, fantastic presentations. are you telling me that it's done nothing for paramount >> no, i'm not telling you that. >> you are >> their content slate and the nfl and "yellowstone" and movies such as "maverick," of course, they had a great year in content. >> what more do people want? why don't people like the stock? >> it's an interesting question. right now, they're ngenerating t generating a lot of free cash flow they're going to peak when it comes to streaming all of which you'll hear bakish talk about in the next hour. there's a lot of debt. you've got pressure because the ad market is quite weak. >> why do people like netflix so much >> well, "wednesday" has turned out to be one of their biggest

hits ever, maybe surpassing even "squid game." yesterday talking about a crawl, walk, run scenario where they are rapidly gaining steam. >> i think they are the exact polar opposite of bakish everything that comes out is quite exciting i think netflix is a really interesting stock. it's very creative they don't have any nfl, and yet they're still going incredibly well >> and he said live sports, not interested, really no way to make that work >> doesn't want to be involved in that world. >> live sports is fascinating as a prospect, again, because of the cost it's imposed on the cable bundle, to your point, and the nfl sits alone in terms of product. and then all these other sports. i don't understand how baseball is pulling off -- how these players are pulling off getting record contracts >> judge >> meanwhile, the sports rights -- have you seen the sinclair rsn thing it's restructuring there's no money there anymore >> that whole world has changed. that's just a group of rich

people it's no longer people who care i look at the philadelphia phillies i mean, that's like we're run by -- >> how much will steve cohen be willing to lose on the new york mets we hope a lot. a lot. >> right you want him to lose more than philadelphia, and certainly -- >> he's got to lose at least $200 million he's doing a public good >> i was comparing aaron judge to paramount, i think you would be a buyer of judge and a seller of paramount >> we'll talk more about that deal this morning. cramer's "mad dash," countdown to the opening bell, busy wednesday taking shape one more look at futures don't go away.

♪♪ my relationship with my credit cards wasn't good. i got into debt in college and, no matter how much i paid, it followed me everywhere. between the high interest, the fees... i felt trapped. debt, debt, debt. so i broke up with my credit card debt and consolidated it into a low-rate personal loan from sofi. i finally feel like a grown-up. break up with bad credit card debt. get a personal loan with no fees, low fixed rates, and borrow up to $100k. go to sofi.com to view your rate. sofi. get your money right. ♪♪ - [narrator] if your business sofi. get your money right. kept on employees through the pandemic, getrefunds.com can qualify you for a payroll tax refund of up to $26,000 per employee, even if you got ppp.

and all it takes is eight minutes to find out. then we'll work with you to fill out your forms and submit the application. that easy. getrefunds.com has helped businesses like yours claim over $1 billion in payroll tax refunds. but it's only available for a limited time. go to getrefunds.com powered by innovation refunds. osisko development is a premier gold mining company with a goal of achieving mid-tier gold producer status with the company's advanced-stage projects located in north america, headlined by the cariboo gold project in bc and the tintic project in utah. osisko development as jim said a moment ago, market largely treating bad news

as bad last couple days, although futures trying to reverse back to the flat line coming off the worst two-day session for the dow sie tor.nc opening bell in a couple of minutes.

♪♪ we all have a purpose in life - a “why.” maybe it's perfecting that special place that you want to keep in the family... ...or passing down the family business... ...or giving back to the places that inspire you. no matter your purpose, at pnc private bank, we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why? ♪♪ ah, these bills are crazy. she has no idea she's sitting on a

goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. welcome back let's squeak in a "mad dash. campbell's soup has reported first quarter earnings >> now, stock's already up 21% for the year mark claus has done a remarkable job. he delivered double-digit growth, big raise in fiscal year 2023 guidance, 7 to 9% growth, had been 4 to 6% growth forecast a lot of it, inflationary, meaning that he raised prices. but the prices stuck by the way, supply chain problems come down, and this is what you see when tailwinds develop from where there were headwinds, which is a remarkable company, remarkable stock. i think it's both the sauces and the soups that are doing well. and this is also your stay-at-home, and their product's pretty good.

i've got him on tonight. i've got a lot of their product, and i think that mark clouse, served in the military, by the way, one of the people we celebrate on veterans week, but this is what should be happening and will happen to a lot of companies when the supply chain problems go away and, frankly, their costs go up, they can outrun the cost because they have a superior product. >> supply chain is getting better no doubt about that. >> and yet they're not cutting price. they don't have to >> right >> because they have got superior products that people like >> is the reduction in inflation we're starting to see a result of supply chain more than it is anything else? >> yes their actual raw costs -- their raw costs are going up, but they're raising prices, and the consumer's buying it now, this is jay powell's nightmare. obviously, what they're saying is, listen, you're going to pay more for soup, but what's great, carl, what's great in this is that this is a variable -- this is what shows you in a very well run company improves its product

and has a new audience which likes snacking because they're not working fridays, it's a work-from-home play that's the exact opposite of many that we've seen it's been improving. >> it's pretty amazing they take 16 points. this is, like, trade down. >> if we go to the store, you know that campbell's is better than it used to be that's mark that's mark clouse i can't say enough good things about what this man has done for this company he sent us a care package of all the new things they have, and this is just -- it's a rejuvenating campbell's. they had really kind of fallen on hard times. snider lance, by the way, figured out how to make that good, and i just think that the kettle brand, cape cod potato

chips, hanover pretzels, these are all taking space in supermarkets he is winning. he is competitive. as i've ever seen. he got out of things that weren't working, and i think he's about as good as you get in that industry. >> that's a pretty good-looking chart for the year >> the new christmas milanos, to die for. >> really? >> better than my starbucks christmas latte. >> no kidding. >> yeah. >> all right try those out. >> you've got to i mean, they're so unbelievably good 150 calories per two, so you can have two, and you will be okay >> can you have ten? >> then you're like a blimp line why do you do that >> i have ten. sorry, carl. i didn't mean to interrupt you with discussions on my cookie habits go ahead >> we got other corporate results to get through campbell's is one. how about southwest? >> dividends >> reinstating the dividend. >> so, again, sorry, doesn't fit with the negative narrative. a dividend from southwest air. i mean, you know what? how about mongodb?

how about they announce a one-day thing, but mongodb is somebody that pivoted toward profitability. yesterday, it was gitlab we have companies doing what we've asked them to, but no, we've chosen to not focus on them because of the overall jamie dimon/bezos gloom. >> what do you mean we're not focusing on them we're focused on it now. look at mongodb, down 66% for the year, even with a 23% -- >> he hadn't pivoted he said, i'll lose more than anybody else and then i'll win that game is over. i don't want to see 100% growth anymore. i want to see 7% profitability because that says you'll make it and when you deal with these executives who are still in the prepivot mode, you listen to them, and you listen to them, and then you say, you know what, guys i want profitability no, we're too busy growing no profitability equals viability

i don't want the year 2000 when people just said, listen, we don't care about profitability, and next thing you know, they didn't exist so, a company like mongodb, which had been in freefall, because they were only interested in land and expand, what are they, like the sixth army in the solomon islands, for he heaven's sake? now they're focused on making money and we like it >> surprise profit >> he will be a delight. i know when i had him on during the growth period, and it was painful, because i wanted him -- his stock to do well because he's a sensational guy, and he's going to tell you all the things that dara is trying to do and nikesh is going. it will be a delightful interview. i can't wait >> what do you think it means for tech as we watch that? i don't know if you noticed, toma bravo raising more money for a tech fund. >> they raised $32.4 billion, obviously, one being a new flagship fund, $24 billion plus. there's a lot of money out there

for the right private equity they have a strong track record. >> do not -- we got a pro-powell show here and then you bring that up? let's just leave that out. >> why >> because we want people to know that the trade down more -- that ali's isn't trading down enough i booked the last days of the third reich, bought ali's, and it had been in a fire or water or whatever. i paid 49 cents for it >> for "the last days of the third reich" i think that's probably the going rate for that book >> it wasn't because it was water-soaked >> no. you can get it for 99 cents anywhere >> there was not a single hole in any of the tarps. win-win. >> was it "the rise and fall of the third reich" >> no, no, that's a great book this is just the last days >> oh. "rise and fall" was a great book >> i'm giving you a show today

my own view of the show, which says, there's a lot of negatives, but they're the negatives that we've been waiting for. >> let me give you a negative we've been waiting for >> is it crypto? no >> no, we mentioned it earlier >> carvana >> there's a tower of power outside philadelphia past that, it's kind of a vending machine, except for diet coke comes out now >> i have no idea what you were just talking about, but -- >> have you never seen a carvana vending machine? >> no. >> big towers of cars. >> have you ever -- >> oh. >> put the dollar bill in, get the car. >> have you ever left 87th street and columbia? do you ever go to, even, like the west side of the highway >> i do. i go up that west side highway a lot. gone up thousands of times >> fdr no >> always take the middle lane during the rain. always very dangerous otherwise >> i-85 before you get to comcast center, there's a giant tower and it's full of cars and also full of carvana >> got it.

thank you for explaining to both me and to our viewers. there's a look at carvana shares why are they down so much? the latest is the story from bloomberg saying that apollo and pimco are in a pact to prevent creditors from brawling over a potential bankruptcy here. in other words, these two very large creditors have gotten together, will act together in negotiations with the company, and so, by acting together, they may be able to very much get what they want now, by the way, this is not -- apollo, remember, last may -- last may, you can go back and see where the stock was. >> it was so much money. >> $1.6 billion. they came in to buy almost half a bond offering then they accepted a yield of about 10.25% >> they should have put it in breit. >> i think we got a halt right now. >> is it a halt on price or news >> volatility. pause. >> okay. but there is an expectation here that bankruptcy could be coming. >> the garcias put a lot of

money in >> apollo was very active in the bond market buying up the debt of carvana to try to put itself in an advantageous position in case of a bankruptcy because of the $1.6 billion it had already purchased that it shouldn't have it did so at a nice yield, but jim, as you pointed out, they would have been better off putting it in breit or anything else >> should have been breit, yeah. >> and so -- but by bulking up in the capital structure, they put themselves in a more advantageous position with a potential bankruptcy filing. stocks halted the volatility right now. we talked a great deal about the pressures carvana is facing, and we'll see. we've got an analyst with our dollar price target today. this is not a secret that this is a real possibility. >> jonas nailed this thing with that zero target >> adam jonas of morgan stanley. >> ten-cent bear case. >> he did a great job on that. and i've got to tell you, the

manheim index came out again for used cars. used cars are very important in the different indexes. and i think that people don't realize this outfit was, in many ways, who hurts. that doesn't bode poorly for hertz, because carvana will still be in business, but in a new form >> in a new form >> well, it's not going to be -- it's not a chapter 7 >> no. of course not. by the way, they haven't said anything, and we don't want to, you know, there's still another $4.50 left >> they're a viable company. >> they overlevered. they made -- >> is it too early too early to buy >> made some poor decisions. >> too early to buy? >> too early to buy carvana? yes. >> in the meantime, as everyone gets negative, take the bellwether stock of this era, which is service now, because that's one that is a very good saas company, and it's up today, even though the breeding of negativity is endless.

endless. >> somebody sent me a picture of the carvana tower on twitter thank you. >> that's it is that the one in philly? >> i don't know. how many are there >> it's so great it's filled with cars. it's just a happy machine. >> your point, though, jim, about service now, i mean, productivity, 0.8, prior, 0.3. and that's with the layoff news we've gotten that we're going to mention earlier. >> this is down a few dollars. some of the supply chain the numbers look okay to me but that's expensive jds, jack daniel's is expensive. and you know, people don't want -- i'm saying there's tradedown everywhere i think the brown foreman wasn't as bad as people think, but the stock is down precipitously. i keep seeing what the fed wants and yet no one gives powell credit for having it go in the right direction because people can't handle any inflation at all. i mean, they'll say campbell's, it's all made up by inflation.

no if the product wasn't good enough, people wouldn't buy it hormel didn't have these numbers. hormel did not put up these numbers because people feel that hormel's food isn't as good as campbell's soup. >> right but you love hormel. we know that >> no, no, i have to tell you -- >> we witnessed it >> i made the hash on friday and i made the chili, because i was having a fight with my wife. i said, listen, number one, let's just eat i mean, it's going to be great and she said, this has so much salt, i can't eat it why didn't you buy campbell's? i'll eat anything campbell's >> no kidding. >> i was shocked anything campbell's, she'll eat. you know what we ended up having instead of the chili two boxes of milanos >> you went in far lot more than two. >> it was mostly my wife doing the milano >> there you go throwing the wife under the bus >> she went to mcdonald's on monday she said it was good as gold she loved mcdonald's

>> we got to talk to her she's not eating well. boxes of milanos and mcdonald's? guys, getting back to the market, shares of tesla continue to be weaker, even than the group. down again a bit today >> we heard that your buddy >> we've seen a rebound in some of the shares. i wanted to point out not just tesla shares, but i don't know if you guys have seen lucid. it takes me back to the spac craze. remember when lucid was cciv prior to the deal under which michael kline got, remember, got the saudis, made it all happen and lucid shares -- look at that >> i drove one >> you can go back even further than that, because when it was cciv -- it is now below -- the reason i point this out is because it's below the spac price. remember, 10 bucks and it is now below that

this was one of the -- >> the spac disasters. >> the peerless, let's call it, in terms of the spacs and the value it created for some period of time. >> how about the crypto spacs? >> meanwhile, kline may have sold most of his shares. well done for him. >> i was worried that he might not do well. >> i know you were very worried about him as he's poised to take over the leadership. >> the farcical nature of -- this is like what the gulags were like when lenin was in style. talking about lenin. >> why wouldn't you? be unhappy about it. >> this is late-stage capitalism, when getty images opens -- it's at 33 and now it's at $5. okay i mean, this is late-stage capitalism some people made a lot of money, and a lot of other people didn't do anything. >> that's true >> well, lucid still has a $14.5 billion market value we've both been in the car i know you feel -- >> i like it

i had a back operation, he went 80, and he threw me, and i had to immediately go right back to the doctor but it was all right it was just my back. >> your point about bernstein, though, they did say they believe tesla has a demand issue now. >> i know. what show is he coming on to say that that will be reverberated all day. >> your love for tony knows no bounds, does it? >> i think he does a great job i just -- i think he's getting the seven. is he getting the seven? >> seven i don't know if he's getting the seven. >> you don't think he's getting the seven? >> i don't know. >> the seven >> after my show >> oh. >> the 7:00. >> oh, the 7:00. >> is there a new tesla model that i don't know about? >> that's where i thought he was going. >> i thought the 7:00, 8:00. i don't know maybe he's going to be with mr. wonderful. maybe he's going to be like a co-judge >> sure. >> i don't know. >> tony and mr. wonderful. >> as long as he gets his benefits because it's $10,000 for my kids now for healthcare

today's the last -- by the way, we just finished open enrollment you ever do open enrollment? >> yes, i do it every year >> no, no, that's something you do when you're older >> i'm not sure what i'm doing it for all you do is end up paying medical bills endlessly. >> how about oil we haven't touched on oil. the downgrades in oil are incredible at the same time that our president made a deal to supply a huge amount of natural gas to the united kingdom, coterra is taking to a sell now, coterra is one of the single -- maybe the best lowest-cost producer of natural gas in this country. doesn't matter because why? because when it was going up, they were recommending it, and now it's going down, so they're taking it to a sell city citi takes it to a sell. when it was going higher, a buy. what is this i mean, this is like bad odds making in the nfl. well, they've been winning, let's take them. david, there's more to it than that >> tell me what we're missing.

>> this is the old cabot oil and gas, one of the greatest companies out there. it has an amazing dividend, and people are saying, wait a second, they're not going to be able to pay that because prices have come down, they can't make the 10% yield. sells at five times earnings and now it's being downgraded. i question that. to me, that seems ill advised. >> it's quizzical. >> it's quizzical. >> it's interesting, especially since citi's been directionally correct on crude ed morse was talking about 70 months ago >> why now i happen to think -- i think coterra should be bought it's an incredibly well run company. that should matter diamondback is a well-run company. i don't think people are paying attention to whether a company is well run. they're just saying, there's inflation, and i've got to sell. that's not investing i don't know what it is. but it's not investing >> we have found some agree arrows, though, this morning, back to the flatline at 39.45. let's get to bob pisani. >> good morning, guys.

i want to note, though, we rallied preopen when the productivity numbers came out better than expected, unit labor costs were lower, bond yields turned lower, the ten-year yield, 3.46%, that's the lowest since mid-september, so we're flattish today, but we came off the lows on those productivity numbers at 8:30. take a look at the sectors generally a little more risk on, although the banks are weak again today, so ark innovation was up slightly. it's now flat. vaneck, semiconductors, smh, a good risk on indicator was up. metals and mining also up. that's an interesting risk on one. it's the banks that have generally been weak this week, and some of them are pretty bad. moving to the downside we've seen 6, 7, 8, 9, 10% declines in some of the banks today, so fifth third just presented at the goldman-sachs financial conference, and deposits expected them to grow into 2023. generally positive comments, maybe a little bit of slowing in certain areas. zions had a new 52-week low.

they presented recently, and that's just been straight down for the last several days. m&t bank is down 8%. they're releasing numbers, going to be reporting a little bit later this morning at the goldman-sachs conferences, but they seem to indicate that net interest income is going to be a bit lower than expected for the fourth quarter and i think that's the reason it's down 8% bank of america, you see, down about 1% citi group is going to be presenting later let me give you the rundown of who's talking at this. there's a lot of focus on the banks. fifth third just spoke huntington at 9:20 they're in the process of doing the presentation regions at 10:00 u.s. bancorp after that. citigroup, blackstone at 12:20, steve schwartzman will be on our air talking about that overall, while there was a lot of focus on the negative yesterday, most of the time, i heard what i would call cautious but not gloomy comments from this goldman-sachs conference. american express talked about

record travel bookings the consumer was strong. the bank of america ceo talked about travel strong. he did say the rate of growth for the consumer was slowing a little bit, but i couldn't call that overly gloomy ali bank said they're expecting soft to mid landing on the economy. pnc said loan demand was softening but they forecasted a mild recession capital one said the consumer was in a strikingly good place that's a quote so, overall, i would call this cautious but not overly pessimistic. as for where we are right now, the powell mini-boomlet that we had, we went to 4,100 on powell last week, all completely back down again, and a lot of people felt there was no particular reason for us to rally on the powell comments last week. carl, back to you. >> bob, thanks quick reminder, you can get in on the cnbc investor club with cramer sign up and find out a lot more at this site cnbc.com/jointheclub or you can use the qr code on the screen it takes you straight there. let's check bonds this morning

yields down pretty much across the board on the weaker-than-expected data out of china. two-year, below 4.3 back we'll be right back.

i guess we're giving you a tutorial david is that what this cluster is all about? >> oh, my god, there it is do you really get the cars >> yes, you get the car. >> you go and -- >> i got the car i didn't like it i sent it back you can't send back a can of coke. >> i wasn't following jim, as often is the case. clearly he was talking about this >> one time we had tobacco machines >> would you go get a car in a machine like that? >> why not you can take it back >> now with david up to speed -- >> feeling good about it

>> oh, my god, david >> we'll get "stop tdi" thrangwi jim in a moment.

look what the cat dragged in. trust me. you call that cute? ooh! with the paws? with the hat? it's official, america. xfinity mobile is the fastest mobile service.

and gives you unmatched savings with the best price for two lines of unlimited. only $30 a line per month. the fastest mobile service and major savings? can't argue with the facts. no wonder xfinity mobile is one of the fastest growing mobile services, now with over 5 million customers and counting. save hundreds a year over t-mobile, at&t and verizon. talk to our switch squad at your local xfinity store today.

wanted to come back quickly on lucid, the stock is down. i talked about the recent weakness and mentioned michael klein, the sponsor of cciv the original spac that did the deal may have been selling stock. that's incorrect i want to clarify that he's under a lockup that continues and so has not been a seller just wanted to share that. >> absolutely. that's important >> jim, what's tonight >> i like to do a show periodically that wows david i have campbell soup, norfolk southern and pin interest. >> the elliott deal. they installed a new director. >> i felt i should wow you because yesterday squawk had 17 former ceo -- dead ceos they even had. >> a great lineup yesterday. >> they had president grant. he's on the 50 they had him, too. >> they did a great job. i think they were happy to be on

the road. >> i was incredibly jealous. that's who i am. never going to change. >> at this point you're always going to be that person. >> i am. >> sometimes you have to know yourself. jim, we'll see you at 6:00 "mad money" 6:00 p.m. eastern. next hour, don't miss david's exclusive with paramount's bob bacish dow is down 65 what if you were a major transit system with billions of passengers taking millions of trips every year? you aren't about to let any cyberattacks slow you down. so you partner with ibm to build a security architecture to keep your data, network, and applications protected. now you can tackle threats so they don't bring you to a grinding halt. and everyone's going places, including you. let's create cybersecurity that keeps your business on track.

ibm. let's create

good wednesday morning i'm carl can't nia with david faber. pulls trying to draw the lines, s&p down 7 of 8. some of the data out of china making that challenging. >> that's right. we're 30 minutes through the trading session. here are three big movers we're watching this morning chinese tech names are lower as the company begins the retreat from the zero covid policy november trade data seeing the biggest slump in 2.5 years if you could see the stock charts, we'll tell you some of the names we talk about on a daily basis like alibaba are under pressure

campbell soup with supply chain improvements helping things there. shares up 3% also another positive sign we'll see. toll brothers reporting a rapid decline in backlogs and building costs. those are up 3%, those shares. keep in mind net signed contracts down 60% in units, 56% in dollars in the fourth quarter. speaking to what we've been talking about, the rapid cooling in housing david. >> cnbc out with its latest all-america economic survey, consumer demand appears to be as strong as ever let's get over to steve leisman who can fill us in. >> did you know we're in our 15th year and we have this cool logo what do you think? that's better than kornacki has at ms for his thing. >> he's got nothing on you. >> we're in our 15th year, trying to tell you, on the holiday survey, two things, how much consumers are spending.

it is less than last year, but where they're spending we have some really interesting results here take a look. 51% say online shopping is their top one or two destinations for the bulk of their holiday shopping why is that interesting? let's go back here before the pandemic where it was just 43% it ratchets up to 55% during the heart of it. the important thing here is it's held on to the bulk of the gains there. take a look at big box stores, 24% before the pandemic. they lost a lot to the online, and they're gradually creeping up maybe this is the new normal here i want to show you one other set of destinations here department stores, they have not done well. they were at 14% they're now half and maintaining that local non-chain stores, they got a little bit more and they're keeping it which is what we're trying to see, what is the new normal in this post pandemic world when it comes to online

shopping moving on, let's take a look at those -- where americans are holiday shopping by income the wealthy love shopping online, much more so than lower-income americans, just 31% of that group of less than $30,000 pick it as their top destination. when you look at big box stores, they like going to walmart, like going to best buy. wealthy people like apparently to shop from home. those who are extremely concerned about covid. my pollsters they wanted to take this off they said the numbers are going to be small. they are small but you can judge how small they are obviously those attending large events, 60% were concerned back in 2020. halved in 2021 it's still 18% for attending large events, still 16% for flying on airplanes. i'm interested in following that over time to see if that remains, if 1 in 5 is still

concerned and that affects flying or going to concerts or large events, i think that's still a meaningful number. carl. >> thanks, steve meantime markets are in the red for another day as investors keep their eye on china. the country finally easing the zero covid policies allowing for home quarantining in some cases, scratching digital health pass requirements to get into most buildings and public transportation here to help things down, jim paulson and citi's scott krone ert is with us this morning. jim, let me begin with you, on china, there was a period where the market didn't like hot data. now they appear to not like cold data how hard is it going to be to find that happy medium >> i think it's going to remain somewhat difficult till the fed stops tightening, carl i do think that that's coming closer to an end

i think the inverted yield curve is putting more and more pressure on the fed. data is showing more and more that inflation is declining, moderating i think we're going to wind that up if we do, then the debate will be, is there too much damage already done for recession or not. i think that's still out there if the fed doesn't do a lot more for much longer, then i think a new easing cycle has already started. we've got the dollar coming down, long raeds coming down, commodity prices coming down, gas prices coming down the real wage rate is going back up the fiscal juice as a percent of deficit-to-gdp ratio is going back up. that's all giving immediate support for stocks and longer term support for the economy if the fed eventually capitulates fairly soon, we might still have a soft landing. >> we were talking last hour, scott, about we'll get ppi friday, cpi next week.

do we think some of the data will ratify the high frequency stuff, the survey work we've been getting >> we have to assume the fed is going to continue with their on going narrative well into the first quarter. the way we're positioning here, we have been more constructive into year end. we hit our 4,000 target a week or so ago. we think q1 next year will be trickier, a combination of on going fed hawkishness, more signs of economic indicators deteriorating, and i think we'll go into q4 with companies being more specific on '23 guidance with a bias to numbers. >> you touched on the inverted yield curve. yu isn't the bond market right now signaling a recession is very likely when you look at the inversions across the curve? >> yes, yes. i agree with that. historically inverted kufr has had an excellent record, probably better than anything else, predicting a recession

over the next coming two years at some point. the likelihood of that is certainly high doesn't mean you can't avoid it and it won't be mild it's certainly high. i look back since 1960 at all the curve inversions we've had and looked at how the stock market did in the one year and second year after the inversion. what i found out is more than half of them, the stock market did great over that period of time, despite the inversion and despite recessions that resulted the delineating factor between when they did well and when they didn't was when the curve inverted, where was the stock market at? those periods when you had curve inversion and the stock market was at its cycle high, that's when there was real risk for the stock market in those where the stock market already adjusted downward and you got the first month of the inversion, the stock market usually did very, very well. we've been off 25% before the

ten-year three-month final lynn verted in october. that would put us in a very good position we've already adjusted for curve inversion, and i think the stock market might see it through like several of the past cycles have. >> scott, i want to get your thoughts on this and also what it means, just looking at your notes here, that if we see a recession and/or bear market that invokes a transition in market leadership, where we could see that leadership come from after more than a decade of big tech being it. >> we're starting to talk about that coming up in conversations quite frequently what does this look like on the other side of this what we're suggesting is the valuation paradigm supporting big mega cap tech over the past decade probably fades. at some point you get law of numbers where it's harder for the companies to maintain earnings growth trajectories we think over the next two to five years, you can see the tech weight within the s&p come down, 18 to 20% from 26 currently.

where does the weight go we think industrials, materials, and to a certain degree energies as well. >> certainly feed theories about investing leaning into cyclicals. >> you're getting benefit from that with the china reopening discussion >> a fascinating q1. scott and jim, great to see you both we'll talk soon. >> thank you. roadmap for the rest of the hour, more on the markets and where you might put your money as the volatility continues. is the key to europe's energy crisis hydrogen with brent crude below $80 a barrel, we'll discuss that. finally paramount or shares of paramount continuing to fall. the stock down double digits in a week we'll have an exclusive with mot ceo bob bakish next. don't go anywhere. a lot more "squawk on the street" next

you want to see something cool? xfinity rewards is how we go beyond saying thanks. so we're going to spread the joy this holiday season, the xfinity way. take your trusty sidekick to see puss in boots: the last wish what's a puss in boots? he is me. with buy-1-get-1 movie tickets, on us. in theaters christmas. join for free on the xfinity app. xfinity rewards. our thanks. your rewards.

shares of paramount weak yet again, this a day after the stock declined when ceo bob bakish indicated at a conference that fourth quarter ad revenue would not be above that of the third quarter. it had been previously seen as being perhaps a bit higher of course, a weak add market to that i sat down with bakish yesterday at the conference at which he spoke. he took a lot of time talking about all the good things going on at his company. take a listen. >> november was a new record amount for paramount plus. it was a record by significant double digits on net subscriber

additions, active viewers versus total subscribers, percentage, and hours of content consumed globally i also said the fourth quarter is going to be the most -- the strongest quarter in paramount plus history that's on the back of a contents -- >> measuring subscription adds >> yes. >> where will you end the year. >> we talked about 75 million adjusted for russia. i'm feeling very good about that number we haven't changed our guidance. i'm telling you november was a record, and december, our momentum is incredible driven by content, driven by things like wall mrt plus, et cetera as i look at '23, it's going to continue the content slate is very strong. >> no doubt you've had a good year in content. even your competitors will concede that you've done well and that obviously does drive things. that said, i'm curious about the performance of paramount plus

overall in terms of what you're seeing on add-supported versus none how is the split going, how is the ad-supported product looking. >> we're a believer from day one. that goes back to pluto and why we did that deal. >> that's why i ask it everybody has followed you in now. you probably have data sets that are a little more constructive or at least instructive. >> yeah. pluto was our first step paramount plus when we did that, we included marymount plus essentials, the ad-support tier at $4.99 we believed consumers would want optionality, pay less and watch ads, $4.99 or pay more and don't watch adds, $5.99. >> 50/50 >> yeah. >> what's the churn? >> churn overall is something we continue to be very happy with

churn overall improves quarter to quarter and year to year for us we really like that trend line. >> i just wonder if fewer people turn off ad-supported because it's a lower price point it doesn't make a difference in their monthly budget >> i actually -- they're not a major difference between the two. because the product overall is sticking people do -- again, it comes down to consumer taste some people don't want to watch ads and are willing to pay more. some are willing to watch ads and pay less it doesn't really affect the churn. >> right in terms of the price point, do you have a sense as to what's enough everybody is raising price you've discussed it as well. how much room is there >> there's plenty of room. streaming represents an incredible value proposition for consumers. there's no question that price is going to go up, and some of our competitors have raised prices including multiple times.

we're value priced that make sense. we didn't enter the market first so we didn't want to go in at the high price point we will most certainly raise price. we'll probably raise price on the premium product before the ad-supported, so if anyone has price sensitivity, they can churn down with all the analysis we looked at with respect to price increases, you don't see a material impact in churn where you see the impact is with subscriber addition, but you can manage that through promotional pricing. if they've been there three months, they're going to stay. >> back to the big picture question which is the ultimate profitability of this business has your view changed at all we continue to see content spending at a significant amount for you and many competitors wall street is asking the harder questions about the long-term profitability of this business it's real return on invested capital. have you changed your view >> in word, no we've always built our plan in

streaming not just on a top line basis but with an eye towards profitability and building a real business, if you will we've characterized that as tv media like margins we're very much on that trajectory. >> what about cost we started off this interview, the ad market is less than robust right now we're heading into an uncertain year next year do you have to focus even more on cost? your free cash flow is not particularly strong right now. i think your dividend payment may even exceed it next year, bob. does that concern you at all do you have to do more on costs as many of your competitors, disney, warner brothers are focusing on. >> a couple points one is we've always said 2023 will be our peak investment year in streaming that's the case. that hasn't changed. clearly the macro environment is a little more difficult and we've talked about that. one of the things we're doing is using that as a catalyst to accelerate changes that have

both economic benefits, i.e., costs and strategic benefits we've consolidated networks for six years, now we're folding showtime into that clear economic savings there. >> a subject we've discussed, although not in our recent interviews, scale. you say you'll get to 75 million maybe exceed it in terms of dtc. i mention id because there's always that discussion of my parent company, for example, and the benefits that would potentially accrue as a result of nbcu and marymount being brought together, as difficult as it would seem to execute a deal like that given the vest tours and antitrust. is that something you think about? >> it's a popular question people say you need to be bigger, et cetera. my answer continues the same what is the incremental benefit of scale sitting here today i've got the number one broadcast networks,

beating all the other networks in the fall season two, number one service in pluto tv, extraordinary momentum on the consumption side impacted, sure, by the current ad market. it's firing on all cylinders with an incredible slate for '23 and beyond i've got one of the fastest if not the fastest s spot services. what piece am i missing? >> you could save a lot on costs. that's the basic assumption. the cost synergies putting the companies together conceivably would be significant in an environment where cost is -- >> you can always save cost once the question is how do you drive the long-term business we have what it takes to continue to lead and take share in traditional media which we've been doing in broadcast and cable and film and create a scale asset in streaming which we very much have been doing in both free with pluto and pay with paramount plus. i feel great about that. will we think about opportunities that emerge?

of course we will. we're stewards of shareholder value. fundamentally this company has tremendous momentum, executing well we put to rest one of the questions two years ago where people said, yeah, your content engine is not that great i don't think so. >> finally, i'll end with berkshire, your largest shareholder. have you talked to whoever it is that's behind that decision at berkshire to own so much of paramount? >> we're very pleased that berkshire has seen the value of owning a position in our equity. as you know, they bought stock three times. they're now our largest shareholder, own 15% of the company. you know this. they do their own work. >> do you have any sense as to what it is that's behind their thesis >> i'd like to think it's value opportunity, and they're about the strongest beacon of predicting it out there. we're thrilled to have them as shareholders. >> it was made obvious from the

answer that they haven't spoken to berkshire berkshire hasn't reached out and had conversations with paramount or the managers. it is the largest shareholder of the company. it's been curious watching >> there were so many nuggets that came out of that interview. i thought what he had to say about churn was fascinating. he made the case towards the end of the interview, what don't we have, we're feeling pretty good about our business >> it's the old question about consolidation. we sit down frequently for conversations, obviously indicating he's opening to it, but questioning the long-term viability. is it getting me more growth i think there are plenty of shareholders who believe scale is going to be the most important thing here and having costs come down or bigger scale with the same amount of money being spent potentially is one way to make a business that right now is still not profitable more profitable. >> i think we'll hear more of that type of tone. as the m&a guy i would think

we'll hear that type of tone from more companies across more industries given the current environment to actually get a deal done. >> yeah, you will. getting a deal done in an environment where price becomes a key -- is always a key issue, more difficult to negotiate perhaps because people want a pre recession price on whatever it is they're selling. obviously the borrower wants a post recession price, if, in fact, we have one and it becomes difficult. no doubt the focus on cost could certainly lead to more deals. >> paramount plus downloads leading among the younger streamers, between that and peacock, the best growth lately at least. >> no doubt. they've had a very goodyear in content. they've got this new '23, that show coming up as well >> helen mirren is a bad ass. >> yes he called her a bad ass. they're very happy about that. let's not forget and take step

back cbs and viacom together, when they put them back together, the loss of value since then has been nothing short of enormous you could make an argument, if cbs was trading on its own, what would that look like probably not very good i understand that. it's not been going in the right direction for quite some time. >> fascinating as always really good nuggets. brent crude hitting the lowest level since january as europe looks towards hydrogen as the potential answer to their crisis we'll talk authainbo tt a moment stay with us

good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back.

welcome back to "squawk on the street." oil on the move as brent crude continues to trade below the pivotal price at $80 a barrel for the first time since january t. energy spdr etf, ticker xle, that's up a little bit right now, hoping to break a four-day losing streak. even the etf's top holdings have taken a hit. exxon mobil down more than 8% over the last month. names like chevonne and slb are not far behind still big gains for the year

while many focus on those oil names when it comes to europe's energy crisis, key question, could hydrogen be the key to a recovery brian sullivan is near the port of radaotterdam in the netherla. >> the biggest in europe, by the way. outside of rotterdam, look at the size and scale apparently if you took all the pipe in all this facility and laid it end to end you could circle the entire earth four times. amazing. it's not just a big plant, it's big money. shell is taking a third of their global capital spending every year and investing in renewables and new technologies obviously there's climate mandates, political mandates there's a lot of talk about hydrogen the bulls, they love it. you know what they say they say it's plentiful, the most plentiful element in the universe it is low carbon, maybe, depending how you produce it if it's with coal, it's not. it will be green with windmills

ultimately it should be green hydrogen and existing infrastructure can be used as well you can take lng pipes or natural gas prieps and use that. the bears say no, no, no, hydrogen, no thanks. it's expensive it's hard to produce as well harder to ship you've got to freeze it as well. either way, bull and bear, hydrogen shell, they're all in, morgan billions of dollars. ultimately this facility, there will be wind farms 30 kilometers offshore that will generate the electricity to make the hydrogen that will go into feed stocks and transportation fuels maybe some of those rockets that you cover so well ultimately they'll take us to our new home on mars using hydrogen as a power from this facility outside of rotterdam in the netherlands. >> that would be very cool, brian. i love when our beats overlap here with these conversations. you can also talk about blue hydrogen and the role that

natural gas plays in all of this it kind of raises the question in general about what we're seeing in terms of trade dynamics around lng because we know europe, for example, has continued to improve lng from russia new deal announced between the u.k. and the u.s walk us through that and hat the implications are >> reporter: yeah, this is a big one. not getting a lot of attention elsewhere which i find a little odd. we talked about lng yesterday. this morning the white house and the u.k. administration announced a huge new trade deal for energy security. and as part of that, they not only talk about nuclear, they want to double the u.s. ex-poexports of liquefied natural gas to the u.k. for years this will help solidify it, keep the people of the u.k. warm with the lights on. moments ago i had the chance to conduct a very quick zoom interview with the ceo of chesapeake energy about the deal

listen >> this is a big deal, brian we're happy the administration, generally the public is starting to pay attention to the strategic value of natural gas in the u.s it is so important to be able to deliver affordable, reliable and lower carbon energy, both domestically and internationally to our allies. >> reporter: so much of europe and the u.k., they're trying to get u.s. gas to replace the russian gas taken off-line and more affordable as well. at the same time, longer term, shell investing billions of dollars to turn this into not blue hydrogen, green wind power electricity, separate the carbon dioxide with hydrogen, use the hydrogen for fuel down the road this is the future, the netherlands. they're always ahead of us, not just in speed skating but also apparently in renewable fuel sources, and soccer. not to bring that up. >> you're talking about carbon capture. to be fair, the houston hub

where exxon is trying to focus on getting so many different companies as part of a massive effort to capture. but there again, rotterdam right behind you, we see it, a lot of carbon to capture back there how far along are the efforts, though, in terms of where they are and the timeline that always becomes a very important part of this >> reporter: they're basically making the so-called blue hydrogen, david, where they can use natural gas. the bears will say, wait, what's the purpose of that, using energy to make energy, you're using double the energy. there's a point there i guess. it's not perfectly zero carbon the ultimate goal is to get the wind farms offshore. the netherlands punches above its weight they have shallow waters in the north sea, a lot of wind you can probably see the wind turbines behind us they're moving along on the hydrogen side. green hydrogen is what is next if this works and they can make

a lot of money from it and hydrogen finds a destination and ultimate end customers, i wouldn't be surprised to see the exxons of the world, the chevrons in the united states start to maybe pursue this this is the first of its kind. that's why we're here. >> fantastic, brian. look forward to a lot more, brian sullivan in the netherlands today. let's get a news update with kate rooney. >> good morning. here is what's happening at this hour democrats won the georgia senate runoff election. incumbent raphael warnock has a nearly two percentage point lead over republican challenger herschel walker. german law enforcement agencies have conducted a massive series of raids targeting a far right terrorist group. officials say the group was planning a violent overthrow of the government some 3,000 officers searched 130 sites across germany, and 25 people so far have been arrested. home run king aaron judge is staying with the yankees the yankees signing him to a

nine-year deal worth $360 million, far more than the seven-year, $214 million contract judge turned down before last season some of the biggest names in news were also some of the most badly mispronounced according to a group that monitors live events on tv they include, sooep rezaporizhzd tua tagovailoa, the miami dolphins quarterback at the nfl overhauls its concussion protocols. "squawk on the street" will be right back after this. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi.

okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq movies are dreams... yeah... oh. don't worry i got it! that you never forget.

stocks are mixed this morning an hour into trading our next guest says the markets are firmly in the bad is good and good is bad camp could sentiment be too low

joining us, adam parker. great to have you back, a.p. >> thanks for having me. >> what is good news what is bad news right now >> it's like we need the old goldilocks if it's too good, then people will say, wow they're going to stay hawkish for a long time i guess if it's really bad, people get nervous that the bear case on earnings can form. we're back in that we need goldilocks moment. we know a lot of what moves the market is perception about policy and perception about rates. it seems like the data -- we get big data points next week. so i think that can cause -- today is the first low vol day in a while, with the s&p basically flat it feels like people are waiting for fed commentary for the cpi and other stuff next week to get some capital moving around. >> we got bank of canada signaling a potential pause in their upcoming meetings. does this get easier once the

fed does pause and we can worry about the work already done versus how much they would add >> you know, there's five or six things that are competing forces we're tied at zero because there's three positives and three negatives. we've got a much higher probability of the economy slowing than getting better. i think that's pretty obvious. we've got incredibly low sentiment. we see it and get a 7.7% cpi stocks are up, two years of returns in 15 minutes. we know there's some power to get behind things if we can believe in the soft landing, if we can believe in consumer being robust i think we'll continue to slowly erode -- >> you mentioned this a number of times you think '23-'24 is not going to be some great big growth -- that view hasn't changed in the last few weeks >> no. i think that's still my base shape. i don't see the v shape that we've all gotten used to in aggregate. i don't see us on a v recovery

path >> why not, though >> i don't think the fed is cutting next year. i know that's what is in the price, next november it gets above 50%. why would they raise rates aggressively now to cut them next year? i think they're hoping to slow things down. we'll see if they're that good i don't think that's the base case, if they start cutting next year in my mind. >> the implication of that being that maybe they've broken something if they start cutting. that's the concern there potentially. >> yeah. >> longtime market participants will say there tends to be three legs to a bear market. are we there yet are we in the third leg, or does something mor something more, to that point, need to break? >> i think top-down folks, when people say 190 to 200, that

feels like when you get a bit of a clearing in there. i think that's way too negative. i think the s&p 500 has superior attributes and tooblt protect mar margins, that probably 220 or 215 is a more reasonable estimate if you get 190, people think the market can have another big leg lower. that's reasonable. i don't think that's what's going to happen, though. next year, probably auto will be up when the economy is slowing there are some things that will offset as we still get -- i don't know if the pig through the snake is the right analogy we still get stuff happening from covid, some anomalies happening. i've got micro cap and small cap stocks trading at all-time lows. i ask see more and more private companies saying public equities look cheap to me this started a month, six weeks ago when you saw blackstone do an emerson deal, a little bit

for me a watershed, these guys think public is cheaper than private. small caps at 10, 11 times forward. i think you can see that as a positive vibe when people feel like there's a floor valuation in there. >> how about banks, especially regionals. monday i think was the worst underperformance since march is that just about deposits, low end exposure, delinquencies? what's happening >> when i talk to clients, i think a fair question people ask is, i don't even know what i'm rooting for. an increasingly inverted yield curve. now in the last few weeks, loosening financial -- when i wake up today, what am i hoping happens with rates and how can that benefit with me on borrowing and lending? i think that's confusing for folks. you saw bank of america at the goldman conference, they raised prices for new hires

that's a one-way street. i look at the aggregates and say we had the highest nominal gdp we've ever had median bank stocks had zero percent earnings growth. if you told me two years ago, high economy, nominal gdp -- i think it's not only participating in the economic strength, but participating when it's week sounds like a bad asymmetry. >> if we're in a period of goods deflation but wages are sticking, does that allow more room for consumption and is that net positive for gdp the next couple quarters? >> maybe it's okay for the economy, not so good for stocks argument that pressures the companies on their margin profile one thing i worry about is as we get a more dovish or less hawkish fed,it happens at the same time we start seeing some persistent margin erosion from the company. so the e comes down, p goes up, e comes down the combination is tied at zero.

if you're doing salary increases in december and thinking about what you're going to pay people in january, it's certainly going to be up, 3%, 4% at a minimum. you might tell people i took you up a little more than cpi when it was one or two or zero and now i'll take you up less than it's six or seven. >> we'll have a lot to digest. >> good to see you guys. >> you, too. morgan stanley is joining the growing list of companies that are cutting costs, reportedly laying off as many as 2% of its staff, that would be 1,600 jobs it does have more than 81,000 employees. the move follows other firms as well such as goldman sachs, citi, barclay, all reinstated annual job cuts of underperformers. the lay-offs had been paused during the heart of the pandemic morgan >> the hill's armed services committee is finally releasing

the compromised national defense authorization act as the race to pass that bill before year's end is on. yes eve we've been going through it, all 4,400 pas.ge we have more on what it means fordefense names and other names, too, next

aerospace and defense stocks are higher today with the ita up about .5%. this as lawmakers release the latest text, more than 4,400 pages of the national defense authorization act which sets spending policy for national security this compromise ndaa as it's called boosts top line defense spending to $857.9 billion, up 9.7% versus last year, $45 billion higher than president biden's request at the end of the year

this ndaa would fund more ships, more aircraft, tanks and defense missiles, development of more hypersonic missiles. also more money, $2.7 billion to boost emissions production amid the war in ukraine authorizing up to $10 billion over five years. no more vaccine mandate amid recruitment challenges that's been a sticky subject with the president already pushing back on that $4.6% pay raise for troops and dod civilian workers not included in the must-pass bill, and you tend to see other things wedged into this bill because of that must-pass nature, the safe banking act for cannabis, the max certification reprieve for boeing, perhaps the reason you're seeing boeing trade down 1%. senator manchin's energy permitting overhaul, also the collective bargaining measure for news organizations to demand

more money from tech companies like meta and google, and no ban on tiktok. keep in mind, this is the policy bill, expected to go to the house today for a vote, then the senate if all goes according to plan, then to the president for his signature. it will be the only bus spending package that will actually appropriate the funds. of course, there are many question marks about when and how that will happen with more talk of another continuing res luks right now we'll see. over the weekend, though, ahead of the nda's release and amid all the buzz at the reagan national defense forum about it, i did speak with greg hayes, ceo of raytheon about missiles and other weapons for ukraine, as well as china. >> what i would tell you is we have been in discussions with most of the nato countries -- i was in brussels a couple weeks ago talking to the secretary-general. we're seeing the demand, not all the contracts yet. it's something germany talked about, this extra $100 billion

they're going to add to the defense budgets, we haven't seen a contract yet so i think we're out there trying to capacityize, facile ties we probably won't see a significant uptick in revenue for at least two years when we actually can start delivering. we have amram, the air to air missile contract, but those leads times are such it's literally two years from the time you sign the contract to the time you get the material in the hands of the war fighter so it's going to take some time. >> i want to get your thoughts on china obviously from a defense standpoint, national security standpoint, it's considered the pacing threat, but it's also a major commercial aerospace market as well. >> it's not a conflict we have to find ways to work together where our interests are aligned and be prepared for what could be a potential conflict down the road. nobody wants a conflict.

nobody wins in war i think having a strong deterrence is our best bet there's a lot of technology that we're working with with dod to continue to make sure we have the edge in that particular potential conflict but the chinese have made great strides in the las hypersonics is a great example we stopped testing hypersonics around 2011. took some time off for a number of years, the chinese did not. so again, it's a real threat but it also remains in our best interests to find a way to get along. we can't decouple from china the way we've decoupled from russia. back in february of this year, we shut down all of our russian operations, closed our factories, and discontinued all of our commercial sales into russia it's about a billion dollars for us we couldn't do that with china we are too dependent the american economy, $400 billion of trade too dependent on china

so it behooves us to find a way to compete but not get into conflict >> zero covid policy in china. markets have been whipsawing on expectations, especially in midst of the protests we've seen in china in recent days about the beginnings of reopening there. what would that mean how are you assessing that from a commercial aviation, commercial aerospace standpoint? >> commercial air spaces everybody knows has come back remarkably well from 2019 level the. right now we're about 75% of the traffic we saw back in 2019. the biggest piece that's missing today, china 14% of global traffic happens in china. what we have seen is when they do reopen, traffic rebounds quickly. when they close down, traffic shrinks. and i think opening china is going to be the key to the recovery next year as i think about '23, we think by the end of next year, assuming china reopens, we'll be

back to 2019 levels of air traffic. >> all right a lot to unpack there. i'll start with the ukraine piece of the puzzle here the medium range air defense system that had been sent into ukraine that raytheon makes has seen success raytheon just received another contract last week to build more of these systems what hayes told me, it's going to take two years to see that manifest when you talk about missile production where ukraine is concerned, you're talking about javelins and stingers which raytheon makes but it gets back to a conversation we've had over and over again which is supply chain, supply chain issues and also how do you work with an entity like the dod to continue to ramp production and get more of that capacity online more quickly in the midst of this war in ukraine, which goes back to the ndaa and some of the funding that we're seeing in that policy bill that i just unpacked a few moments ago. in terms of china and hypersonics, i have this conversation about hypersonics so much, but it's the fact that we were ahead as a country in terms of some of those

technologies, maneuverable hypersonics because we have many capabilities that fly at hypersonic speeds and we basically put it aside for a while and are now picking it back up. we're now seeing more funding, more funding, more funding, but still from very low levels where this capability is concerned raytheon is one of those companies on the forefront of it, though. >> thank you, morgan great stuff as always. let's get to our top gainers on the s&p before we take you to a quick break. campbell's soup reported strong earnings and state street topping also right fo ♪ ♪ i've got a plan to which i'm sticking. ♪ ♪ my doc wrote me the script. ♪ ♪ box came by mail. ♪ ♪ showed up on friday. ♪ ♪ i screened with cologuard and did it my way! ♪ cologuard is a one-of-a kind way to screen for colon cancer that's effective and non-invasive. it's for people 45 plus at average risk, not high risk. false positive and negative results may occur. ask your provider for cologuard. ♪ (group) i did it my way! ♪

did you know one of nissan's evs survived the north pole? ♪ and one can go 0-60 in 2.8 seconds... ♪ and they're all emission free. but don't get an ev for the “e”... ♪ get it because it pins you to your seat... ♪ sparks your imagination... and takes your breath away... nissan evs aren't just electric, they electrify you. ♪

still ahead on "tech check," mongode shares rising after that profit we'll talk about what it means with their ceo in about five minutes. the dow is up 150.

as we close out the hour, you can take a look at shares of carv carvana down 34% there's a pact between pimco and apollo involving the possibility of debt restructuring both on the same side. i do want to quote from a jcht m morgan note saying the biggest debate is if carvana has enough car runway in the near term. we believe they have enough cushion through short-term revolvers to get through the end

of 2023. so that might put to rest some fears about an immediate bankruptcy they do point out a severe recession could accelerate that and also bring up the idea what could we see in the near term, a debt equity exchange that could extend maturities or perhaps even some other actions as well. i did want to end on that note, though that will do it for us on "squawk on the street. "tech check" starts now. good wednesday morning welcome to "tech check." i'm carl quintanilla with jon fortt. two earnings ceos this hour join us in just a moment. some big stories on both fronts. then trouble in tech travel. expedia, trip, airbnb booking all downgraded today by various firms. later on, what we learned from biden's chip trip to arizona, jon, and what that means for u.s. industrial policy. >> yes, and we've got to start with