but if you're looking at the ten-year note, we did see quick moves in the yields. right now, 3.5%. we'd been below that of course, big issue is going to be what happens next week. that's when we will get the super bowl price inflation and then we've got that fed meeting and that's what everybody's been waitin waiting. we made it to friday >> have a great weekend. >> see you on monday right now it's time for "squawk on the street. ♪ >> good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at the new york stock exchange futures did lose their gains after that ppi data didn't quite give us the five handle we were looking for. question now is whether bulls worry about cpi next week. ten-year, as buckyecky said, 3.5 our road map begins with the latest read on inflation, likely complicating the fed's rate hike policy expectations.

plus back in the antitrust hot seat, the ftc is suing to block microsoft's acquisition of activision blizzard. and shares of lululemon are under pressure this morning as the retailer offers weak holiday quarter guidance ceo calvin mcdonald will join us exclusively in just a few minutes. let's begin with that hotter-than-expected november ppi number, a lot of it blamed on some services in the financial business, margin loan rates, things like that. >> if you're going to try to slow down spend, if you're going to try to keep people from doing things that are speculative, what do you do charge more financial services this is one that's kind of counterintuitive, and i think that maybe this index needs to be a little bit more sharp you want to raise margin rates, david, because you want -- don't want people to create their own money. >> okay. >> okay. that's what your -- i'll switch because he obviously is not taking the bait at all

one of the things here, processed foods. well, all right, there's a company that has 100 million people who belong to it called costco, and those went -- foods went down. so, i mean, yes, it's entirely possible that this index has got something going, but i would rather trust rich galante who said corn, flour, sugar, butter, and steak are all lower. >> a 38% jump in fresh and dry vegetables >> but i just gave you -- >> chicken and meats >> chicken's already down, but he says meat is down costco says meat is down who do you trust chickens are down. who do you trust do you trust this news release from the labor bureau, or do you trust rich, who probably serves more food than everybody in the country? >> yesterday's similar conversation at the same time. who do you trust, the bank ceos or -- i mean, you were saying the same thing you're having some trust issues. >> i want to apologize to jamie dimon. i got a lot of heat, people

saying he won't come on my show. i apologize. >> you're having some trust issues, i think. >> i just like companies that have data that is from the companies that we talk about in tech that is up to the minute that morning as opposed to something that is processed over, like, as if we've never heard of the cloud i'm listening to rich galante last night giving numbers, and i trust them more than i trust this news release. >> yeah. >> and so should you >> we're going to get to what broadcom said and what sienna said earlier in the week sort of going against the narrative of tech. >> the broadcom was, like, happy days are here again. hawk is very tough, but he tells a very positive narrative. he's never really said anything negative about his own business. >> rarely. >> but -- >> but he's always been focused on cutting costs he's a guy that -- doesn't take a potential recession for him to be focused

>> wireless, plus 13%. all the hypercomputing, you know, cloud, up terrifically gross margins went up 110 bips he's fully booked for almost everything involving hyperscale. it was one of those calls that was -- wow hock should be here. i usually hear from hock i didn't hear from him >> we sttalked to multiple cios. we have not seen them talk about a reduction in their i.t. spend. >> i thought that was an amazing conference call, and it does call into question a lot of the negativity that i hear from a lot of business people look, you may think hock tan is a tough guy. remember, the vm's closed. but david, i got to tell you, after reading gbroadcom, i said maybe some companies aren't doing as well. >> what could account for that >> he's got good product and low price and he's tough >> good product, low price

>> he usually has the product that's basically the monopoly product. >> speaking of monopolies, that gets us to our next story. late yesterday, microsoft's deal >> i have a wrap on that you'll love >> activision. i'm going to go through a few things here, because i do want people to understand what's really going on in the playing field, particularly from an investor perspective, but of course as you probably are aware, the ftc taking action to stop that deal in a complaint filed with the administrative law judge, and we'll get to that in a minute because it is a bit different, although it is not necessarily of great importance. few things to share here a, in speaking to as many people as i could about the complaint itself, most are unimpressed unimpressed with the arguments being made in the complaint by the government at this point it's -- there's no economic data to support their contention. there's nothing -- no economic analysis it's microsoft may do that or

they could do this no real supportive proof or evidence at this point doesn't mean the government won't come up with some, but at this point, many, at least, who have read this complaint, are unimpressed, let's call it, and don't believe the ftc will win as a result. they define, for example, a high-end market, a high-end gaming market. they leave nintendo out. they just said, okay, it's just playstation and xbox in this high-end gaming market, but there are many different components or the lack of argument, at least, cited by those who are students of these things again, these can go over time. yes. >> i'm a student >> yes >> okay. i know that something called tide house rules, federal law, 1934, coming out of the depression a liquor company cannot own a restaurant, because it would favor that restaurant. so, the doctrine here is that a computer -- a software company, microsoft that makes xbox,

cannot own the liquor, the so-called restaurant, they can't do it because they'll favor that restaurant >> the vertical integration as opposed to horizontal. >> this is still the law of the land, as insane as it is, but the federal government has, at times, said, look, you can't own both because you'll favor your own product over someone else. >> that is the argument being made here, it's exactly that >> it's specious >> we also know microsoft has reached out, for example, to nintendo with a ten-year deal. they've been willing to offer the same thing to sony sony has been, by far, the single largest critic of the deal and they were offered that same ten-year for "call of duty." they're not interested perhaps they want it in perpetuity but again, you know, let me get to the second point here, because while we will talk a lot about this complaint, and administrative law judge right now -- by the way, microsoft and activision can close their deal. an administrative law judge does not have the power to actually enjoin the transaction

they could close the deal prior to any hearing >> but -- go ahead, say it >> but this is going to go, at some point to, a federal district court where they're going to try and seek an injunction, the government but let me back up a bit before that and talk about what is cited as the single most important impediment to a potential transaction, and it's not the ftc. it's the uk. it is the cma. their antitrust authority. that is where the focus is right now. that is where you will find people with the most questions here's a jpmorgan note this morning. we think the uk cma is the biggest risk given their traditional opposition to behavioral remedies and it's more difficult to appeal a uk cma decision we're going to get a sense from this cma, i think, let's call it towards the end of january in terms of their phase two findings that could give us a real sense as to how they're coming out on

the transaction. not a lot at this point to really go on they look at things different than we do in terms of their antitrust law as opposed to what we look at you can do a quick appeal, but as you just heard me read from jpmorgan, and it is true, there's a harder burden of proof there. so, that is right now where at least the investment community is most focused in terms of a true impediment to this deal not this case, at least, from the ftc, not the prospect of the eu, which most believe will, you know, maybe there will be some remedies but will say yes, and not even the antitrust authority in china it is the uk's cma finally, jim, let me just end on my points here were this deal to break, for whatever reason, perhaps opposition from the cma, perhaps you get to july 18th and bobby codic says, i'm not going to extend our merger agreement beyond the termination date. i'm going to take my $3 billion

in reverse break fee, i'm going to have the cash that i have on hand, and i'm going to go back to running this company. there are those who believe the downside here is fairly limited for activision shares. now, by the way, we'll see, because we've heard that argument many times in the past, and then often when a deal does collapse, you see the potential acquirer stock go down fairly significantly. why do they believe that, though you put an ea multiple on that and add back in what could be as much as $13 a share in cash, if you add in the $3 billion termination fee, and they simply say, hey, you can get to a stock price that says at least $70 if not more so, that's where a lot of the investment community stands right now. got a lot more to go here. obviously, i don't want to make light of the government's action here, but many don't take it that seriously, given the lack of strength of the case they've read in the 30-plus pages. >> my only problem is, again, my consistent problem, is that this government, this branch, this

agency hates mergers and will go to great lengths, even twist doctrine, in order to try to stop something even if they lose. what this does do is say to another company, you know what look, this microsoft deal, there was nothing wrong with this deal at all, and they rejected it your deal better have -- what she's saying is, listen, unless you're a liquor company and you're buying a toy company, forget about it. there's no -- honestly if there's any sort of synergy, it's no good >> lena khan does not believe in behavioral remedies and this is intended to send a chilling effect to those who would consider undertaking these large transactions >> if you're kroger right now, just break it up >> that's a doj review >> tanner is probably going to kick that to ftc >> oh really i didn't know that >> yeah. >> when we come back, an exclusive this morning with lululemon's calvin mcdonald, company's guidance weighing on the stock, although a lot of the

prints, pretty good. we'll get to ducu and lulu and calls on netflix, the casinos, and coin don't go anywhere. as an independent financial advisor, i stand by these promises: i promise to be a careful steward of the things that matter to you most. i promise to bring you advice that fits your values. i promise our relationship will be one of trust and transparency. as a fiduciary, i promise to put your interests first, always. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com

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xfinity rewards. our thanks. your rewards. here's an oddity lululemon reported last night and it was a clear earnings beat stock, though, is down sharply on current quarter guidance, which some say -- some say was below analyst expectations so, joining us exclusively is lululemon ceo calvin mcdonald.

calvin, let's start right now with the fact, how is holiday season going we can get a real sense of what's happening >> morning, jim. as we shared,we are tracking and monitoring our guest spending behaviors, and in q3, we saw continual very strong response to traffic, to transactions of existing guests, of new guests, and very balanced growth across our men's and women's lines, across north america and international, and that obviously drove our quarter result, and heading into q4, we haven't seen any change in those guest metrics. i shared record-breaking black friday, thanksgiving weekend sales, but there are some key trading weeks ahead, and the guidance of 23 to 24% growth on a three-year really reflects the quarter to come versus where we're sitting, which i'm very

happy with where we're at from a quarter-to-date perspective. >> good. the expectations got very high one of the things i thought was very interesting was your topline growth is trending in the high 20s and it was a mid-teens annual target is what we were looking for, so is there not some misperception that somehow you have fallen down on the job when you're actually ahead of what you told us when you had your bigconference? >> as you mentioned, our power three times two growth strategy were in the first year of that we guided to a 15% kager through that period to double the business to $12.5 billion. and we achieved 27% three-year kager in the quarter and guided to 23%, 24% in q4. so, we're pleased where we sit our strategies are resonating. they're working. we put on 1.5 points of market share last quarter, the most

we've ever put on in a quarter the product continues to sell at full price we guided to a markdown ratio equal to that of 2019 as we reset, and we achieved those numbers. so, we have great pricing power, great momentum, the guests are resonating with the new product. our traffic and guest acquisitions are strong, so one year into our five-year growth plan, we're sitting in a very good position and have a lot of confidence in our business moving forward >> and i think it's important for others who are watching to note that nobody i follow in the retail business has these numbers. or anywhere near them. let me do some positive. i think international can double i think men's can double i think accessories can double those, to me, explain that you are not late in the game but early in the game. >> we agree. actually, our power of three times two is to quadruple our

international business and i've shared before that as we look forward, our international north american business can be 50% of the revenue of the company today, it represents 17% we're having success in every market we're in. in europe, we opened two stores in spain, incredibly successful. our asia pacific markets are all contributing, driving growth there isn't a market we're in that isn't double-digit growth around the globe and being driven through product, being driven through our community efforts, which connect us to our guests and our unique d to c model. >> i want to make sure people understand you point-blank say here, mainland china playing a big part of that performance you're not one of those people who's either banning china or being concerned about near-term issues as i imagine. >> no. we saw 70% growth on a three-year kager last quarter, and that is where stores and the teams being challenged with

covid outbreaks. so, we're very confident in our business we have great brand momentum in market and excited we continue to invest, opening incredible stores and seeing success across both tier one, tier two, cities, and both physical and our dot com channels so, it's exciting to see the momentum of the brand in the market, and it is a big part of us quadrupling our international over the next five years >> mr. mcdonald, particularly in this holiday season, i'm curious to get your sense as to the consumer are they as strong as he have been are you concerned there's weakness being shown >> morning, david. we haven't seen any weakness with our consumer. we're well aware of the macro environment. we're well aware that many other retailers in the malls are

heavily discounting. we have not. we don't see a need to regular price is driving our business and as we look forward, what i would just call out versus last year, where we saw a lot of gift-giving pulled forward into the quarter, it really started to just tick up over the thanksgiving weekend so, that would suggest there's a lot of gift-giving still to come, and that's what we're tracking and looking for but on a quarter-to-date basis, our guest metrics remain very healthy, and i shared the q3 ones, and there's no change in that behavior. but it is the gift-giving in this quarter that's critical, and behavior is pushing it -- it appears to be closer to the holiday than last year when the headlines were, shop early >> calvin, some on the street point out that lulu has a history of guiding pretty conservatively in december and then raising in january. any reason to think that pattern

might be broken? >> we are pleased where we're at from a quarter-to-date perspective and feel the guidance of 23 to 24% under the circumstances of some of the topics we've discussed is the appropriate, right guidance at this point and the teams are ready and focused, and we have the product, and what we've seen through the thanksgiving weekend is the product continues to resonate, requiring new guests as well as our existing guests engaging with us so, we're excited about the holiday season, but there's some critical weeks still ahead for us >> yeah. you know, and i know jim asked you a bit about this, but this -- some of the analysts being concerned about what they called higher inventory than they might have expected, and your cfo obviously defending that can you give our viewers a sense as to why they should not be concerned about, obviously, what was a growing inventory level at the company at this point? >> no, for sure.

inventory came into where we guided, and we did say q3 would be the high point of our inventory numbers. it's a combination of where our manufacture partners were in their ability to fulfill our orders, a kbcombination of managing ocean and air and trying to get ahead of that balance and costs on shipping. and on a three-year cagr, it's up 38% on a unit basis on a growth of 27% so, we're definitely sitting slightly -- well, we are sitting above our growth number, but with almost half of that inventory being core, nonseasonal inventory, those investments, we believe, have helped fuel our demand we're selling at full price, and we're well positioned for the holiday heading into q1, and we will start to now be able to work those inventory numbers down but we don't see and haven't called out any concern or risk >> all right calvin, let me just ask what i

know is out of left field, but i had an interview with marc benioff, and he talked about how his co-ceo, bret taylor, he did a great amount of work, chairman of twitter you are on the board of disney i know disney just had a big change at the top. is this the type of thing that just takes much more time from a good ceo from a good company, then you can afford to spend >> i don't believe so at all it's an opportunity to equally share and learn, which you can take back to your business, in my case, to lululemon. so, i'm very proud to sit on the disney board and work with my peers there. and i am 100% focused working with our management team here at lululemon, and i think the results indicate the strength of this team in challenging -- in a challenging environment, and when you look to our peer sets, you know, we are succeeding

through our growth plan as a result of the strength of this team and the product innovation and how we're all applying creativity to how we're moving forward. >> excellent thank you, calvin, great to talk to you i agree with you there's nothing wrong with this one. good to see you, sir thank you for coming on "squawk on the street. >> happy holidays. >> let's get one more look at futures before we get the opening bell in about six minutes. more "squawk on the street" when we cog back come back. power e*trade's award-winning trading app makes trading easier. with its customizable options chain,

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you're puss in boots? normally i have a sword. -ok? ♪ ♪ i need that wishing star to get my life back. it's like a possum crawled on your face and died. please, mock me quietly. futures remain in the red after prpi comes a little warm ten-year gets to 3.53% after the print. we're still on pace for a fairly large weekly loss, even with

thursday's bounce. opening bell coming up in a few minutes.

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let's get to the opening bell this morning. final one of the week. and the cnbc realtime exchange, at the big board, it's getaround, a car-sharing marketplace separating its listing via spac and at the nasdaq, it's the miss america organization so, jim, with today's data, are you worried about cpi next week? >> i'm less worried about cpi than i am worried about ppi because we have used cars have come down a great deal, which is a very, very big part of what's happening. i'm not worried about the services line. i do think that we keep hearing that eating and home has gotten a little bit less expensive. obviously, gasoline, terrific. so, no, i'm not sweating the cpi. well, david, i want to turn to you, because of the kind of sunday night football aspects of what i'm hearing, meaning, i

can't hear you at all. >> yeah, the hearing gets tough. each year that goes by, for some reason, it gets tougher for me i'm not quite sure why that is >> it's a 12th man situation >> it is >> maybe we can just do that thing with the leg on the snap, right? visual cues. >> let's do silent count >> he's our quarterback. we're listening for "omaha." >> you mentioned used cars, jim. got another downgrade at carvana today. >> yeah. >> goes to hold. adam jonas yesterday saying that the manheim index, which you looked at earlier in the week, you could have 20% declines in used cars next year. >> used cars are incredible, and i think people have to recognize that carvana is a giant force in used cars. giant. so you're going to have a lot of used cars around hertz uses carvana as a place to be able to trade cars. >> to sell their old cars. >> so, there are -- this is something that had been, really, the bane of the cpi existence, was the fact that you couldn't buy a new car, so used cars went through any price we've ever

seen we're back to august 2021, not down enough, but the trend is clear. so, if you're powell, you do 50, not 75 >> because of carvana? >> no. not because of carvana >> well, how about maybe oil right? that's b of a this morning >> thank you >> oil crashing means it's 50, 25, zero >> david, there's this thing i'm going to demonstrate >> he's standing up, carl. this is trouble. >> first of all, depends on the side for mine, it's the left side you pull up to the thing, it's called a pump. you pick this up this is amazing. it smells like gasoline. and you look, and it says, $3.35, but then you say, i don't want regular i'm going what my father used to call high test premium. it's $3.65, and i say to myself, that was $5 not that long ago. this thing's come down in price. >> yes >> that's what happens in america. >> got it.

i will make sure to think about that >> and you can top it off. that's something people do they top it off. >> how about jpm yesterday saying, sell oil here and buy it 30% lower. >> i read that and there is some truth to the idea that russia is going to flood the united states could look the other way. it is good for europe. and europe will actually get all the oil it wants so, i think there's some truth to that. and i don't want that, necessarily, because my travel trust has a decent percentage of oil, but i think that thesis is a good thesis. >> really? he's talking about oil outright and anything surrounding oil >> well, i just think that there might have been some sort of compromise between our country and europe that said, look, we'll let you -- you know, we're going to look the other way here, because the ukraine war was going to send oil up during the winter i just -- i keep hearing -- i mean, i know we're not sending a lot of the weapons we could to ukraine, but we do want to keep europe as part of the coalition

and not decide, you know what, we need a separate peace a separate peace, david, because of the price of oil, would just be -- it's not munich, but it would be a repugnant way to be able to end this war >> it would. >> to pressure ukraine because of higher prices at the pump i just demonstrated, by the way, the whole pump situation >> i know you did. thank you for doing that, because i was unaware. >> it looks like it's cheap. but it's liters. >> yes, in europe, it's liters europe, overall, energy costs are higher, whether it's filling up your car or powering your home or a factory. >> right >> far higher. we've talked a great deal about that, and it's still early in the winter we haven't really even begun >> how sunny is it in germany? >> not sunny enough sometimes. >> that's right. >> or not windy enough that's even more of a concern sometimes when you're not getting that north sea wind, sometimes, to power some of those wind turbines. >> what do you think about the idea that we would sell out, that the west would sell out

ukraine for cheap oil if it weren't for, you know -- >> we haven't done it yet, have we >> no, i think there's a deal. i think we've made a deal. we can look the other way. you can go get all your oil. stick with us in the coalition >> okay. i think i understand what you're saying >> i'm saying, we're worried about the coalition staying together >> right >> during the winter months. >> do you think that cheaper gas can make the environment brighter than gary freedman appears to think it is over at rh >> i felt so horrible after i finished rh that i told my wife, you know, why are we buying all this stuff from rh it sounds like it's going to come down in price and you know, look, i think gary is an emotional executive who's excellent, but he made me feel very, very down. it was not unlike a large bank -- i'm not going to mention the name -- which also felt that

things were bad. he said, widespread discounting continues across our industry. he gets two sale emails per day from promotions. business trends will continue to deteriorate. i've never been more uncertain about the present. wow. david. >> ever? >> i was going to order stuff, and i said, you know what? maybe i should wait. >> he is always -- or often outspoken on the conference call to hear him say, i've never been -- >> i thought that was -- i was wondering whether that was hyperbole. >> is he forgetting how uncertain he's been in the past? i can remember him saying somewhat similar things. >> i remember when he had a piano sonata going on, and i wanted to buy the heck out of the stock. but this makesing you think, we wait a second, maybe this is the problem. i'm not being facetious. i told lisa, maybe there's going to be some discounts if we just hold on. that's the kind of thing that can build.

and i don't want that. i don't want that. i think that it's not the worst time, and that unless gary's business is specifically falling off a cliff, which it does not seem like, i don't know if that language is supportive of the situation. >> docusign? i'm sure you have seen >> it's better than fear etf, david >> it's a lot better >> it's not lbtf, just btf >> we've often talked about docusign being a pandemic play, being down 70-plus but this morning the stock is up sb substantially. >> new ceo >> i guess third quarter billings were up >> new products coming i checked with them. so it's not -- it's not one and done there's some more things coming. >> you said earlier this week on "mad" that you thought chewy and docu had spent enough time in purgatory. >> i know chewy's down, but chewy, i thought, had a very good conference call and there's just no end to the -- this

brilliant strategy they have with lemonade for insurance. pets -- when you have something wrong with a pet, and david, you have a pet >> i do. >> holy cow. >> we all do >> they need healthcare insurance. you need, like, united health for pets, and they have got a very good healthcare plan. >> my dog has better health insurance than we do >> what, crowns? >> they'll actually pay something occasionally >> i love it when you rail -- the house insurance policies >> i'm sorry i wish i didn't have to. >> no, you're -- look, you're right. the operations for animals, which you'd pay any price for because they're yours, are very expensive. >> they are. they are >> and that's why i think chewy is correct in teaming up with the healthcare provider to give it so that you have more reasonable insurance, because people who have pets need to have pet insurance, or else they're going to spend $3,000 on an operation at the university

of pennsylvania. >> is that where you would send your -- >> absolutely. >> -- your friend? >> i would not go to new york for an operation for a pet i would go right to h.o.p. >> it's known -- >> the veterinary schools there are the best in the country. >> i'm learning things every day at this desk that's why i show up >> you would not check around for it >> i would do anything for scoop. whatever he needs. >> then it's h.o.p >> infinite elastically when it comes to pets. >> i don't want him to have to go to hup. >> he's a strong 6 >> i feel so good. >> costco, two-month low >> can we just -- all right. all right. now, rich galanti, who is the cfo, tells a tale where he basically says it's not if you're going to get special dividend, it's when. there are some people who are nitpicking and talking about his e-commerce not doing that well i come out and say, everybody who is a merchant should be jealous of what you heard on

costco last night. i mean, they are -- he had to downsize his feet. that hurt his numbers. he had a fleet of container ships, but they did save $1,000 to $2,000 pertainer, adding 24 new stores the gasoline business is not as good, because gasoline has come down in price, hence why i don't mind the cpi this is a situation where the u.s. traffic is extraordinary, and you sell this one at your own peril. my travel trust does own it, and i felt terrifically about the call terrific anybody who knows costco knows that rich galanti, who is really one of the best cfos in the country, would signal if things were weaker. tvs are the only thing that i heard that i was worried about they're still being bought, but in smaller sizes that's the only thing i heard that made me feel at all suspect about the consumer at all >> we didn't hear from calvin

mcdonald he continued to say the consumer is strong. >> that stock's down >> lulu is down about 7% we were just joined by mr. mcdonald >> his stock had run big, mr. mcdonald costco's already down. my travel trust did sell some higher i hated that we've owned it forever, and i sold some, but i said, i think it's going to go down because the november numbers weren't that good. but at a certain point, if you don't own costco, and you're a member of costco, you know that it just gets better and better, and they're holding the line on chickens, david. >> i'm glad to hear that well, mr. mcdonald says lulu's holding the line on price. take a listen. >> we have great pricing power, great momentum the guests are resonating with the new product. our traffic and new guest acquisitions are strong. so, one year into our five-year growth plan, we're sitting in a very good position and have a lot of confidence in our business moving forward.

>> there you had it. >> i think the stock is down people are very downbeat i think people feel, wait a second, if everybody's doing badly, how could lulu be doing well i think we're talking about better operators you can sell the stock the stocks are expensive but in the end, you're going to want to come back because these people do it better. they are just better at what they do. it's okay. and they had a longer runway the international runway here is shorter. >> we do have some betting on, say, bed bath, a little third point action there stock had not topped out early the last few days. >> bed bath is a problematic situation. >> i'm sorry, i meant bath & bodyworks. >> oh yeah little saber rattling there. it's not that bad. the last numbers weren't that bad. >> bath and body works, right. >> i'm looking at one of my favorite technicians who says costco has to hold right here. i follow her on twitter. >> it's been a while since we

mentioned spacs. we used to do our spac data, all that on fridays. >> do you have a video >> we should point out that this company that just went public despac'ed here at the new york stock exchange, getr thank you. it's been so long. 94% redemptions. the new symbol is getr, and they're celebrating here, but it's not particularly great debut. stock's down 66% >> can you explain that to people >> excuse me it's down -- no, wait. it's down 67%. >> can you explain to people how that's possible? they are looking around, they're hearing lots of people, and they're thinking this is great excitement how are people doing if they bought it? >> it's one of the -- we talked a lot about this dynamic where you get a deal approved at the same time you have a huge number of people who redeem -- want

their $10 back obviously, getting your ten bucks back here was a smart move you're talking about a $3 stock. down almost six bucks. i don't know if we have it for people to show so, that was the smart move at this point although we have occasionally seen strange situations where, in fact, because there are so few shares actually outstanding, you get an enormous short squeeze in the stock for a brief period of time >> that was getty. and grindr >> that is not occurring here. you've simply got a significant fall in the stock price. reynolds rental car. i don't even want to -- i haven't looked closely at the business model, i have to admit, jim. >> yeah. >> i'll leave it at that but we did want to mention that the stock is down sharply. apparently we don't have it to show people. >> i feel badly. i mean, getty's a very good company, remember, first iteration, it spiked to 30 and there were people saying, i got to get on this this thing's going to the moon

and then they just lost everything >> yeah, we're seeing a lot of -- what we're seeing in spac land is there are still deals that are de-spaccing, in other words, they found a sponsor, they've gone through the process and they're coming public on their own once they've despacced, but we're also seeing many spacs give up the hunt and just return the money. that is happening a lot more don't have the updated data for you. we'll get it at some point we'll share a lot of it. but because there's just not a lot of opportunity seen out there. by the way, people don't want to end up with something like that. >> now, david, is there enough money -- gina francola shared with me, david, the sheer amount of money that is in spacs that is coming back to people, actually, i thought might actually kind of hit the needle. >> that's an interesting question i mean, you could make an argument that those who invested in spacs that have been returning the capital actually did fine in a market that's down whatever we're down, the s&p,

16.7%. you came out even. >> that's a great point. that's a really great point. better than they did in their checking account >> yes so, there is that. but whether that money will end up back in the market, i think we'll see. >> that's what i was wondering could it go back in the market i think the market needs a shot in the arm, carl >> we've talked about it being forced savings, in a sense, for the better part of two years we got green after futures did take that spill. s&p up four points let's get to bob pisani. >> happy friday. that is really quite a victory for the bulls. we dropped 60 points on the s&p initially at 8:30 eastern time when the ppi came out a little bit hotter than expected we were up prior to this, but again, this is really quite remarkable let's take a look at the sectors. a couple things i want to point out. we're seeing metals again on the upside, some of the reverberation of the china trade, industrials are okay. energy is flat today, but that's kind of remarkable even then and semiconductors are positive.

so, sort of growth sectors, risk on, like metals and mining and semiconductors are up. i want to show you energy stocks we're flat on energy, but some of the big names, the higher beta names, were generally trading up at the open, like apa, eog hall halliburton was also up. this is rather remarkable here when you consider the fact that oil is sitting near the lows for the year energy stocks are not really buckling at all. they're off of their highs, but they're not even close to really buckling let me show you the chart here this is what's very strange about this so, there's the -- the orange is oil prices, and the bottom is energy stocks, and beginning in the middle of october, they have diverged now, they don't necessarily always move one for one on a daily basis, but they tend to move in the same direction this is a little strange, the divergence, with oil that's the white line. i'm sorry. oil is moving to the downside to dramatically, and energy stocks holding up so well so, it's easy to say somebody's wrong. remember, though, oil reflects near-term. this is a contract that is the

near term oil price contract, whereas energy stocks reflect the opinions of investors 6 to 12 months out. so they don't necessarily diverge on the time horizon. investors in energy stocks blooe believe that oil is going to hold up better and maybe even be up more next year. they may be wrong, but these two are not necessarily divergent in their opinion. as for where the markets are right now, this remarkable turn around remember what the story is for the bulls. inflation is high but trending down that's the key story, and i think why we are holding up so well today that story is predominant. inflation was the 2022 story, and the extent of the recession is the 2023 story. now, the problem today and for the last few weeks is that the earnings numbers are all over the place of what's going to happen on 2023, and it depends on where you are on that recession story. so, bloomberg had a story out this morning, 134 fund managers, they're expecting earnings to be up 10% next year heavens, that is really

optimistic most of the strategists are flat to down now. here's the q4. it's already down slightly but q1, 2023, q2, lest call that flattish but look at blackrock. i think they're more reflective of a typical strategist. we find that earnings expectations don't yet price in even a mild recession. we do expect to turn more positive on risk assets at some point in 2023, but we are not there yet. so, there's the question, carl where are you on that? in a real, notable recession, earnings would typically decline 10 to 20%. right now, expectations, up about 4% big divergence in opinions >> indeed. as we go to break, let's take a look at bonds. yields did spike a bit on ppi this morning got 3.53% on the ten-year, currently around similar levels. of course, the big granddaddy is going to come next week when we

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the third thing we saw was a more measured environment and we realize that ceos are kind of buckling down. they saw there's a storm ahead, they're not sure, the stocks are down, you know, we're not the only stock down. the market is down >> that's benioff with jim last night. you said you were going to find answers. >> we asked every tough question and i felt better, stocks down 50%. b buyback, there are many forces in the, i'd say, the long are out for the changes.

mark said he's there to stay, there to run it. >> no co-ceos seen in the future >> no, no. >> a lot of stocks are down that are doing quite well for him. >> good week we did some work. >> wild week. >> "mad money," 6:00 p.m. when we come back, roger what should the future deliver?

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welcome to "squawk on the street." i'm carl quintanilla with david faber and mike santoli a little uncertainty in light of ppi coming in a bit warm some decent mixed results on the earnings front inlags is taking center stage. we'll get consumer sentiment and wholesale inventories with rick santelli >> these are december preliminaries on university of michigan sentiment expecting the number at 57 like most data this morning, better than expected 59.1

that is the best since october's final read of 59.9 the low there, the low going back 50 years was 50, and that was in june. if we look at the current conditions, 60.2 much stronger than expected. and expectations of the future, 58.4 that follows 55.6 sequentially and expected to be up 54.5, outperformed by four points. if we look at one-year inflation, 4.6%. high water mark was in march at 5.4% highest level back to 81 4.6 is the lowest level since that extreme five to ten-year inflation, another 3% read, although the high water mark on several occasions has been 3.1 on january and june inventories, 0.1% replaces 0.8

many areas places had overhangs of inventory finally an october fresh read on the sales side up 0.4 last month revised all treasury maturities are up in yield on the day, but long dated treasuries are barely up on the week with 30-year bonds still five basis points below its 3.55 settlement last friday. mike, back to you. >> rick, thank you very much. we are 30 minutes into the trading session. here are three big movers we're watching including costco missing on top and bottom lines. inflation hit on consumers who pulled on shopping, and margin and operating expenses were higher this stock is down 11% this month alone. netflix getting an upgrade at wells fargo saying content growth should lessen customer churn. pointing to additional

monetization avenues including the new ad-supported tier. the stock up 4.5%. lululemon down after issuing a weak outlook comparable store sales did not increase as much as expected we'll bring you highlights from our conversation with lululemon's ceo. let's get to this morning's inflation number it's the ppi and came in a bit hotter than anticipated. steve liesman hasthe market reaction and the potential impact it will have at the fed steve? >> dave, yeah, good morning. a hotter than expected producer price report dashing hopes in the markets of making more progress and making it faster and bringing down inflation. there were still some parts going in the right direction i'll show you to in just a second the headline number 0.3 month on month versus 0.2 7.4 year over year

hotter than expected down from the prior numbers. the core coming in at 0.3% look at the up and down. energy down 3.3% with a big decline in gasoline prices they continue into this month. food up 3.3% a big increase in vegetable prices could have been related to weather. trade services, that's the crazy number in here it's wholesale and retail margins. that is up, in part, because fuel prices decline and you don't have time for me to explain why that's a weird number transportation housing down 1.3% that could be a clearing of supply chain issues. year over year, headline and core are cooling, but more slowly than hoped. it still could mean pass along into consumers and consumer prices next week hotter inflation numbers they drive expectations for the fed higher as they always do, and this morning peak funds rate priced in may 2023 at 4.97 that's a few ticks higher than

this morning but around the 5% number this shouldn't change the expectation the fed is going to hike 50 basis points next week it could make the case harder for anyone around the table, arguing for earlier end to rate hike cpi on tuesday, as you know, folks, will be a major factor in that conversation. just when the fed is meeting >> steve, for sure i know that it's not a one-to-one pass through from the ppi into cpi there's nuances to it. in terms of where within the ppi report things were hotter than expected or cooler, is there any way to handicap how that plays into what we might expect from cpi next week? >> well, that food and vegetable number, that could pass along. that would be in the headline number we do have, mike, a cooling of the trade profits or the profits of car dealers we could see auto prices come down next week there's a decent correlation

with the ppi and the core pce. i know it gets arcane for viewers at home probably throwing things at their televisions right now. that could be a better sign for the fed when those numbers come out. we'll look to the inflation numbers. i think the fed will play it pretty much on the fence on this one. not making a big change because of expectations for inflation falling. they want to see the whites of the eyes of lower inflation. >> steve, thanks for that. let's stick with the broader market starting to come off the morning lows s&p green once again dow is on pace for the worst week since september joining us oppenheimer assets manager john, and darrell. happy friday darrell, let me begin with you sounds like you're not in the mood to buy aggregate. fed, you argue, remains a bit hawkish, valuations have not become cheap, in your view.

>> i think that's right, carl. they're obviously cheaper, but it's interesting if you look at things like equity risk premiums we're still lower today on equity risk premiums than the june lows or october lows. we still think as the fed finishes this tightening cycle, 50 next week, i think they'll do 50 in february and 25 in march, that you probably have a little better buying opportunities than first quarter of the year. we're getting closer bear markets are a function of price and time we dropped into this bear in mid-june typical june lasts 190 days. first quarter would be very consistent with what history gives us >> interesting, john, how about you, i wonder what you make of the early december weakness. do you think this is the historical first half as a lot of tax laws settling before santa arrives? >> in part, carl, it most certainly is i would say the market is in the

middle of a real fin funds hike cycle. whether it was the ppi today or the cpi next week, the sentiment number from university of michigan in terms of the consumer, all of this creates a period of volatility, which we think actually offers opportunity for investors to catch some babies that get thrown out with the bath water >> darrell, the valuation point you were making there, clearly the market has not become cheap on the index level you mention the equity risk premium. this is the earnings yield of the s&p, subtracting the treasury yield from it or some other bond yield in other words, stock versus bond equation. you say stocks are more expensive relative to bonds than they have been, i guess, since the 2010s or since the financial global crisis, maybe since 2000.

when rates were higher before 2000, equity valuations were higher than they are now in other words t seementz like it matters what the absolute level of rates are as opposed to just the difference between those two things is there any reason to think there's a fixed relationship there? >> no. you're 100% right, mike. the issue with equity risk premium is we think it's a better valuation tool than traditional price earnings because you're just looking at the price of the index divided by the earnings. today it's about 170 basis points over the last decade it's run 300, 350, 400 basis points what that tells you is when it's below 200 is you're not getting a great risk/reward tradeoff for equity valuations with where interest rates are because, as you know, veinvestments are alws a tradeoff equity risk premium we think does a better job of understanding, when do i get paid to take that risk

we do think we'll get there, again, in the first quarter, but we think things are going to cheapen before they actually start to move higher and make that next leg higher conditions are still tightening. it's not just the fed increasing interest rates it's qt, the dollar up 15% year over year, the m2 money growth has dropped negative from running 27% positive we've drained $1 trillion off bank reserves. all of that has to play its way out in q1. >> that's interesting. john, others make the point that conditions are actually easing with yields down, junk spreads narrowing, dollars getting more accommodative. that's led some to argue we're in the early innings of a new bull. >> we tend to agree with that. we think we've got a secular bull, a longer term bull running on things like technology and a change in globalization or a diversification against one country centuriesty.

we think that's intact in upheavele you go from money to buying a bond it creates disruption. once again, i think it's tough to time it we are advising in my group, individual and institutional investors who are primarily intermediate to longer term investors, and so we think the opportunities that are turning up across the aisle, across market capitalizations, and across sectors, it favors cyclicals over defensives. just looks very typical of an opportunity. i've been in these markets for four decades and there's a lot of things that suggest that history may not repeat itself, but it's likely to rhyme >> well, we're certainly getting the playbooks starting early

last couple of weeks for the next year. we look forward to diving into that with you guys in the days to come. have a good weekend. >> same to you as we head to a break, here is our road map for the rest of the hour, including ftx's sam bankman-freed saying he'll testimony. we'll have more on the ftc's decision to try to block microsoft's acquisition of activision we'll speak with a former ftc commissioner will what's going to happen. food prices are a big contributor to inflation in today's print, at least. grocer spartan nash is with us when "squawk on the street" continues. yellow ones, too. fees, penalties... unnecessary fees! ...playing dirty. so i broke up with bad banking and moved on with sofi checking and savings. now, i earn higher interest on all my money, and pay no account fees. feels good to get my money right. banker disqualified! [announcer] break up with bad banking.

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welcome back we are a day removed from something anticipated for quite some time, namely, fert trade commission would take steps to stop microsoft's buy of activision it's an administrative law judge they're going to, made their complaint. we'll get to that, but as for the complaint itself, and again, we'll see how thisr time, but many of the arguments, perhaps, seen as not particularly strong. those who have been following recent actions by both the doj and the ftc may be aware they've had recent losses in trying to bring cases to stop deals.

we'll see if this may be added to that list why? well, you know, a number of people who have said a lack of any sort of economic data or analysis is part of the complaint at this point that would indicate why this should be seen as any competitive transaction. obviously, they're relying on the idea of this being a vertical merger. not horizontal, which is typical of getting any trust challenges when market shares are large enough in this case, the vertical nature of the merger, in this case, one the ftc feels would harm competition with microsoft's control of activision, control of key titles such as call of duty, and the fact they have already reached a deal or preliminary deal with the likes of nintendo, for example, to license that game for at least a period of ten years. sony, the biggest opponent of this transaction not willing to go for that ten-year deal, at least as best we understand at this point. again, the ftc applying what may

be novel views in terms of anti-trust laws. a judge will decide. at this point it's an administrative law judge they would not have the power to enjoin this transaction, so there's the possibility they could choose to close the deal with the prospect that if they were to lose, they would have to unwind it. more likely is that the ftc will end up in federal district court seeking an injunction. more to come the main thing market participants are focusing on is what you'll get out of the competitive -- the cma in the uk which overseas antitrust there late january is when we may get preliminary findings that would give us a real sense as to whether or not the uk sees the deal as anticompetitive. that is seen as the biggest risk right now. many people believe the eu will ultimately say yes, even in

china, also seen as saying yes the uk seen as a key impediment. we don't know. if they were to clear all of these, the ftc becomes paramount. many believe it's a weak case, as it currently stands mike, there are others who simply come back to activision stock prices in the unlikely event the deal were to collapse or that it was to pass the july 18th termination date without being extended and they were to say, i want to take over my old company and run it, they would have 13 or more dollars in cash, including the $3 billion break fee, maybe closer to 16. if you put an ea multiple on expected earnings next year, they come back and say, not that much downside. we've heard those arguments in the past doesn't always hold when you see a deal break, nonetheless, it's giving comfort to those who continue to believe, i don't have that much downside and i still have a chance to get 90 bucks in shares and cash. >> it looked for a while --

activision outly performed ea and take2 on a short-term basis. you look at it on a two-year basis, they're kind of similar at this point. it supports the idea that activision doesn't have huge downside given it seems like a longshot case for the government and the u.s., the stock -- activision has never traded long for -- even within 15% of the deal value. the market was all along saying, look, we don't know how this plays. >> since day one there was a concern you would get an ftc action >> and the time it's going to take and everything. >> of course at this point, as we know, microsoft is committed to going to court to challenge that again, we have to wait and see the uk could be one of the key moments here we won't know that until at least another month or so when we start to see the preliminary findings you can appeal in the uk as well should they move to block it it's a fairly quick process but a fairly high bar. let's get more on all of this with our next guest, who argues

there is a strong growth rationale with the microsoft/activision deal. we're joined by former ftc commissioner terrell msweeney. first, give me your thoughts on the case >> great to be with you. you've been discussing the very issues here, which it's an interesting complaint. it's a bit of a departure from the traditional vertical foreclosure case it was voted out 3-1 three democratic commissioners and one republican dissented as you point out, in a more traditional foreclosure, what the ftc would need to show is rivalries in sales and incentives to withhold content in this case, i think that's going to be very, very hard. that's the economic evidence that you were referring to that's going to tb essential if the staff is going to prove that

case here. >> do you expect -- again, we don't know how these are going to go, what judge is ultimately going to oversee this, but you do seem to be indicating at least at this point it's an uphill battle for the ftc? >> i think it's a challenging case, for sure it's consistent with the democrats on the ftc taking on new vertical theories and trying to push cases that are very aggressive in merger control as you noted, they struggled a bit with actually making the case in those situations and that's because they really do have to show the competition. again, it will be hard, i think, to show real incentive, especially given microsoft's statements already that they're really going to withhold the aaa content that activision has from rivals and that rivals who are very strong are going to be harmed if they did do that those are the key pieces of

evidence the complaint didn't provide a lot of that. the complaint we can look at that's publicly available is redacted there might be some evidence within those redactions. again, they didn't lay out strong, compelling points, at least publicly available. >> they defined what they call the high-end gaming market as having two parties, xbox and playstation. nintendo apparently not part of that high-end gaming market. just curious your reaction to that >> anti-trust lawyers love to draw narrow markets. it's how we look at defining conduct and competition and look at market share. again, they didn't make real allegations of the market share here as you note, they do define this high-end console market and sort of draw nintendo out of it i think typically we look at the console market more broadly in the industry and think nintendo

as very much being a player as well they'll have to show that that is a narrow product market again, another bar they're going to have to cross and i think a challenge here, as well as the way the gaming industry works, which is incredibly dynamic and cob stast constantly evolving and there are tons of acquisitions happening within the industry all the time one of the thing that customers really want is to be able to play across platforms. i think a lot of gamers are playing games not just on one console but on a variety of platforms. so, the ftc is going to have to really show that those dynamics don't exist and aren't strongly pushing towards making content more available and i think that's going to be a tough bar for them. >> terrell, obviously, you lay out exactly why there's a pretty high burden on the government to

prove a lot of these things and why there's financial incentives for microsoft to sell to all and not try to keep things exclusive, but isn't there always in a case like this the counterpoint that, microsoft, why do you want to buy activision if you're going to your investors and saying there's advantages to actually owning and being vertically integrated in this way, doesn't the company have to essentially sort of lay out how that rationale is not going to be anti-competitive >> absolutely. the company gets to show some pro-competitive benefits, but i think it's been articulating those very publicly during the duration of the deal even precluding yesterday. there's an incredibly dynamic and innovative industry. there's a lot that could be offered to gamers and development of new games these aaa games are huge and very important content in gaming they're also very expensive to

create and constantly imaking those. i think there's a lot of synergy and potential benefit to gamers and developers as well microsoft has been making that point pretty consistently. as you note, the cna is an area of action right now on this deal as well. but there are other regulators like in brazil that have already cleared the transaction. >> finally, how important is what judge they get? everybody wants to point to a republican judge will look one way or a democratically appointed judge will look another. is that a really important moment, when we find out who's going to oversee this? >> the federal trade commission is a bit of an unusual agency. so, what they're going to be litigating is in the ftc's administrative court in front of an ftc administrative law judge. so, that's different than being

in federal court article 3 court where -- >> terrell, we do expect we're going to end up in federal court. many do at some point because they're going to seek an injunction that was my question because a lot of people don't think they're going to end up seeing the administrative law judge on august 2nd, or whenever they set this for. >> what i thought was interesting, though, is the complaint sets an eight-month trial date in august, as you point out, which consistent with its rules it can do because it's not seeking a temporary restraining order or preliminary injunction right now it's not doing that in part because it's relying on the reviews ongoing in europe, but, you know, again, we'll have to see what they do if they decide to file in federal court, but whether they're in the ninth circuit or d.c., what judge they draw, that could be impactful as well we have seen, as you noted, both the department of justice

anti-trust division and the ftc struggle a bit with some of the more innovative mergers. >> thank you for your time appreciate your insights >> sure. my pleasure. as we head to a break, the latest in the ftx fallout. sam bankman-fried tweeting he's willing to testify at a house hearing on tuesday we'll bring you live coverage next week. you can also read more on cnbc.com 'lbeacafr iswel bk teth

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look what the cat dragged in. 1-800-376-4376 trust me. you call that cute? ooh! with the paws? with the hat? let's get a check on the chips. the soxx trying for its first back-to-back gains since thanksgiving dipping a moment ago losses of that the s&p broad com is the fund's top holding. only down 17%. last night the chipmaker had better than expected quarterly results while also providing a pretty upbeat outlook. management adding they are raising the dividend and said the company will resume share buybacks also in the space, jpmorgan naming a few top picks for next

year, including nvidia, which they believe is benefiting from key growth drivers like gaming and autonomous driving david, they point out, we believe estimates have been sufficiently derisked after the second and third round of estimate cuts. >> autonomous driving. we used to say, by now -- >> a million robo taxis on the road who said that? >> travis kalanick had it all happening by now. up, google and faceboo investor rocker mcnamee has a take on microsoft lawsuit and where he's seeing opportunity in techlo iesng n'go anywhere. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna.

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welcome back to "squawk on

the street." i'm frank holland with your cnbc news update. after nearly ten months in detention, brittney griner is back in the united states. she was seen getting off a plane in san antonio, texas, this morning. federal officials say she's headed to a medical facility for treatment and for counseling asked if other prisoner swaps could happen, russian president vladimir putin says everything is possible. arizona senator kyrsten sinema is no longer a democrat she registered as an independent because of the, quote, broken partisan system in washington. she does not plan on caucusing with republicans democrats will maintain their narrow majority in senate. homeland security is seeking $3 billion in new border funding. the agency wants the money to prepare for a possible surge of migrant crossings when covid restrictions end this month. republicans have been reluctant to fund new democratic initiatives. saying they want the border secured before any more money is spent. that's the latest. david, back to you. the federal trade commission

suing to block microsoft's acquisition of activision blizzard he sees the regulator eventually winning the bigger battle when it comes to antitrust. joining us, roger mcnamee. always good to have you. give me your take here in terms of whether you think the ftc is in the right and even if they are, they may not succeed here. >> i think the core issue, david, is that the global economy has changed. we've had a period really 20 years of incredible stability, super low interest rates, super low inflation. global peace as a consequence, every country in the world has subordinated every interest to economic growth because of what russia did in ukraine, because of what's going on in china, we can't count on peace anymore. interest rates are going to be higher for, i think, a long time inflation will be higher than it was. it's going to be higher than it was. and the economy we had over the last 20 years, where we've had

tremendous concentration of power in every industry, you basically wind up with mondopol. from an economic policy point of view, what you really want to do now is to encourage as much competition as possible. you want to have startups. you want to have small things doing much better than they can do in the market today the problem here is the legal system is really slow to change. so, i just don't see the courts that provided over ftc cases being quick, anywhere near the leading edge to recognize the importance of a different economic policy. so, i think investors should probably think this deal will go through. i expect whoever the administration is will recognize the importance of entrepreneurship and growth to the economy. so, i i think they're going to keep pushing on this for a long time until the court system finally adjusts. >> well, what would that look

like how does the law need to change or the application of the law so that what you're talking about will actually occur and a judge won't be real estate lying on antitrust law, as has been typically applied, and therefore, not rule in favor of the government. >> prior to 1980 the standard was clear. you could own a marketplace or participate in a marketplace you couldn't do both that was really the legacy of the new deal antitrust policies. and we've gotten away from that. we allowed people to do vertical integrations, to concentrate markets. that worked great during the stable environment we were in, particularly for investors for the one we're going into, where you have to get all your demand closer to home because markets that previously we've been trading in won't be available to us, you're going to need new types of companies, new industries happening, which means you can't have every industry controlled by a handful of companies

how we get there -- a lot of ways but from an anti-point way is to block vertical integration. that has to stop how long it takes us to get there remains to be seen i don't see the court system doing it alone you're going to need something from congress. >> roger even if the court system is slow to change, if it changes at all, maybe the government in part has as its goal to just raise the hurdle for deciding to do one of these deals. make it less convenient, make sure the companies prove it, go to court, chilling effect. perhaps, who knows, this is a hypothetical, but if meta felt they could buy roblox, would they be spending $10 million on their own to create the metaverse? i'm just making that up. but there's a sense that if a big company does not feel they have the ability to gain new scale or enter markets through acquisition, they have to do something else, whether it's good for invezer or not.

>> i could not have said it better than myself that's exactly what the ftc sees it's going to keep raising these cases to raise the cost of doing transactions like this at the end of the day, some people are going to persist through it from microsoft's point of view, they're looking at the global economy and realizing that buying growth vertically is a better strategy than trying to make the markets they're in now grow faster. i think some will be closed off to that. we'll see what happens here. i do think we need a different economic policy in the country and i think there are plenty of opportunities. the price of oil right now is a key driver of geopolitics. almost all the countries we're competing with, other than china, are oil producers driving the price of oil to zero reduces the global threat. clearly if we can get to renewables and all of that, that

would be a very valuable thing to do. it's super hard to do today because the politics are totally blocked. >> how you got us from that -- from monopolies to renewables, i'm not even sure. that was quite something let's go back -- >> that's what we need, buddy, a new economic policy. the thing is it should be great for investors but we have to get started. i don't know when that's going to happen. >> well, that's a good question. let me come back to where you started as well. you seem to be somewhat -- you said you expect inflation, for example, to persist for some time you sort of indicated that we're in a new economy, so to speak. give me a sense, roger, as to why you believe that's the case. >> i just don't see how they put the genie back in the bottle with china china made a set of choices that have caused us to look at them with suspicion, in a way that -- for a number of years we literally overlooked the theft

of intellectual property, overlooked civil rights abuses in china we overlooked a lot of things in pursuit of economic opportunity. at the moment, you know, working with china is harder than it was so those tradeoffs don't seem as clear. that's messing up supply chains in practically every industry. you'll be building factories in a lot of places today and you'll probably be building some kind of new technology you don't have today. the commitment to do that requires some change at the government level as well and requires change of investor behavior i would look at this as what we want to be doing now is having an economic policy that sits there and says, we do want to promote u.s. manufacturing we want to promote north american manufacturing we want to work super closely with the countries that want to work with us and we want to be more careful about the countries

that are challenging us in ways we are less capable of competing with that would be china and russia. >> roger, always thought-provoking and always look forward to our next conversation thanks for today. >> take care have a great weekend meantime, shares of lulu falling after reporting earnings we'll bring you highlights s&p in the green oretical mathem. 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.

welcome back let's get a check of shares of lululemon after it issued weaker than expected outlook, comparable sales were up we spoke to ceo kelvin mcdonald and i asked about the overall health of the consumer. >> we haven't seen any weakness with our consumer. we're well aware of the macro environment. we're well aware that many other

retailers in the malls are heavily discounting. we have not. we don't see a need to regular prices driving our business >> maintaining price, talking about the fact their inventory control, while it appeared inventories have increased a lot, that they still have it under control. supply chain has improved. nonetheless, the stock were acting negatively over the quarter. >> had been quite an outperformer if you look at things like nike and these global brands. it is just giving some of that back it's going to remain a bit of a question, even if you don't see overall consumer weakness. lulu, in a sense, has defied expectations for how long they can continue to grow as long as they have. certainly a give back of the outperformers. i wouldn't say it's a total change of the upbeat thesis that people have. >> well, we've been watching inventory levels at all kinds of retailers.

this is a doozy compared to -- >> it wasn't a category where you thought, you pulled forward. it's not electronics. a check on the markets this friday we've been in a tight range. inside day today dow down about 70 points just south of 3960 stay with us

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than expected. food prices offsetting energy costs. our next guest is a distributor to 2000 grocery stores tony, welcome back we're trying to make sense of the food market given there's this huge disparity between categories like eggs and ham and chicken and poultry. how do you explain it? >> great question. happy friday a couple things to share here, a season overall with higher food

costs, the christmas season we'll see the evidence of spot commodity increase for example, egg prices are up substantially due to the avian flu. increases in dairy items, like whipping cream, cream cheese, butter, due to the impact of international pressures for demand for those items other things we've experienced recently here with the leafy greens so you're seeing some of the spot changes are spiking up the constraints, supplies and in a time of great demand. >> i'm not sure what's going on with audio i can hear you fine, our control booth says they cannot we'll work out whatever hiccups we have in the meantime. between financial services costs and food costs a huge dynamic in ppi. we'll take a break and work that out. be back in a minute.

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tony is back with us thanks for sticking with us as we worked that out your point was about the disparity between categories but when it comes to food pricing is it largely right now about different supply dynamics

within category or is it an overall demand issue >> seeing a little bit of both the spot change as i mentioned a moment ago is a combination of demand and supply. and you have the confluence that drives prices up quickly and aggressively we have a year, though, of increases over the past 12 months that are still with us and still seeing some of those increases, particularly on center store items, as i mentioned a moment ago, the big items are things like eggs due to avian flu, butter, cheese items being up because of demand international. as we get into the season, spiral cut hams, increasing costs right now but all grocers have to look for a way to win the holiday season and we know you win big with meat this season and i think you'll win with ham and great items for consumers. >> tony, appreciate it sorry we had to cut you short

there. do appreciate your time today. >> thank you very much >> turning now to tesla, according to reports the company will suspend model y output in shanghai in the last week of december phil lebeau has details. hi, phil >> reporter: this gets to the broader question that has been weighing on shares of tesla for the better part of the last three to four months it's what's happening in china whether it's the covid lockdowns, whether it's the question about the economy slowing down, is ev demand slowing down as you take a look at shares of tesla, as you mentioned, there are reports coming out of china that the company will be halting or suspending model y production for a week at the end of december going into january. this coming after a month in november where they had record ev deliveries in china and we should also point out the annual delivery estimate for 2022 is at 1.3 -- excuse me,

1.35 million vehicles. that's down only slightly from where it was a couple of months ago. so the analysts really haven't brought back their estimates a whole lot. and if you take a look at the ev complex, if you will among ev stocks yes, tesla has come down from the heights it was at just a year ago, but it is performing better, and that's a relative term, guys, better, it's not down as much as the other pure ev stocks that are out there. so this is one of those things, guys, one day it's up a little, next day down a little trading in the 170 to 185, 190 range, largely because people are unsure what to make of a, demand in china, and b, how do you value the stock coming off the incredible levels it was at a year ago >> yeah. phil, another company that the stock was at incredible levels was lucid.

talked about that a lot obviously. >> sure. >> elon musk taking shots at them as well i don't know what you make of his latest tweet war >> reporter: i don't make a lot out of that. i don't. he's been doing that for some time peter raw linson jokes about it. when i talked to him a few weeks ago in southern california and they were unveiling new models before the interview i said what do you think elon has to say, remember he worked at tesla, he said it's elon being elon. i don't make much of the comments i think there is a broader question for lucid with the fact they're trying to bring their price points down for their entire range of vehicles, the question becomes they've got the 37,000 now down to 34,000 reservations, can they hold those as they ramp up production over the next year, year and a half >> phil always a pleasure. thank you. >> you bet. a quick look at the market

and also an area i tend to focus on as you know, the media company stocks netflix is up, an upgrade from wells fargo. they seem to be enamored of the company, with the ad supported and what that means. and also rare moves higher for paramount, even disney and fox, our parent company comcast as well maybe just a bit of rebound, short covering. >> i think that's a lot of it. >> they've been down on worries about the ad market i think. >> the cloud etf is up 1% today, also what we're waiting for is what we assume to be a lot of tax law harvesting related selling in beaten up stocks to lift have to get it done by the end of the year, so maybe some of that is happening but the idea they've taken a lot of punishment, maybe a little more stabilization in the streaming market than we thought

of course they're all cutting costs radically too and that's spinning to next year and what margins might be. >> restructuring is a key word in that industry that does it for us on "squawk on the street. we'll see what the rest of the day brings have a great weekend, everybody. "techcheck" starts now ♪ good friday morning welcome to "techcheck" i'm carl quintanilla with jon fortt is it game over for microsoft, the ftc suing the giant over the proposed $69 billion takeover of activision blizzard. what it means for the company and the rest of the tech sector, we'll turn to enterprise software check in with dock sign and pro corp sam bankman-fried said he's willing to speak to congress next week if even if he doesn'