just totally sold your case with a lot of things that i hadn't factored in that were actually in better -- in terms of easing that were better than we thought. have a great weekend we've got to go. we've got about ten seconds. thanks, jim. final check on the markets today. bitcoin is now below 17,000. everything is down triple witching. but it's friday. make sure you join us next week. "squawk on the street" is next good friday morning, everybody. welcome to "squawk on the street." i am david faber he is jim cramer carl has the morning off we are looking down thr after yesterday's significant decline in all of the averages two days now after the fed chair spoke at his press conference. not quite but -- >> no. >> -- continued reaction

let's get to our roadmap this morning. it does start with what has been december pain so far for wall street as you just saw, stocks are set to continue to sell off. there are some bright spots, however. megacap tech perhaps may be one. shares of adobe, we'll be watching them this morning they appear up there's an upgrade of meta that seems set to set that stock a bit higher this morning. >> right right. >> twitter's targeting journalists suspending several reporters who wrote about or tweeted about elon musk. let's start with the extension of that post fed selloff and, jim, i turn to you >> look, i mean, they're out for the market people feel that powell is now going to have to take rates up endlessly. at the same time the 10-year doesn't go up in yield which signifies that he's going to throw in more.

like many of the outfits we were talking about, they're doing so well he's not going to be happy. complete mystery. >> what's the mystery? >> it's done by these guys who sit back in their offices. they look at what they think the s&p is going to be, what the multiple should be and they decide, you know what, it's got to be lower because the rates are x but they're not looking at the fact that there are going to be companies that have to do significant layoffs. they're on the verge of layoffs. some of the stocks go higher when they do layoffs look at meta which has just been the best of big tech and you just have to play it out it's not going to happen overnight. as a matter of fact, we've had a number of rate increases, even powell has to play it out a little bit. >> playing it out can be somewhat painful there are those who are set up for what they thought would be seasonal rally. >> the christmas -- >> later >> later we're going to run out of time pretty soon given the performance this week. >> after christmas. >> yeah. >> be after christmas. i just find that this whole

ruination theory that somehow what the fed said could be all top down thinking and not looking at individual companies and realizing there are some great cyclical themes in favor of this market >> right all right. companies are looking at the prospect of 2023 not being that easy a year. earnings might be down but that said, they're going to start layoffs that are actually going to help enhance margins. >> yeah. >> therefore, people should be looking past this moment >> well, we don't want to go past it. we want to accept the fact that this is going to occur. >> okay. >> so, therefore, we don't just want to sit here and sell because everyone else is selling below the 50-day moving average and oil is looking down. no, i mean, let's -- >> don't you wonder how -- you know, the quantitatively driven funds that we occasionally talk about. >> dominate. >> they dominate trading mike wilson, for example, strategist that we talked about many times, he seems to have a lot of algorithms stapled to

him, so to speak >> right. >> he says something, then it happens. >> look, they're individual stocks -- okay let's say that you and i are total top down guys. david ten years saying this. i've looked at when the 10-year's done this and when the 2-year has done this and you should sell, it's great to meet you. i hope you have a great weekend. but then you say, jim, darden has a decent quarter meta looks good. i would say, these are all little things. i don't have time to mess with darden darden is a pimple what i have here i don't even know where it came from. >> you know who the best performers are this year, they are the algorithmically led much funds. renaissance, you go through them they're the ones who are winning this year. >> they're winning so there's another season coming -- >> you're a stock picking guy.

that's your whole mantra that's your whole reason forex is tense that's not working. >> no, it is working if you pick the right -- all right. all right. all right. so i have people on richard brothers last night, and what they do is they buy used equipment and they auction it. they really have the market to themselves and i said to myself, you know what, if i owned that company over a five-year period, i'll make a lot of money will i beat these algo funds i don't know i find companies i like, i stay on them and i likes what they do a little peter lynch right ma gel lynn. i don't want to get too existential with you. >> i'm happy for you to. >> when you indicate the balance sheet of warner brothers, discovery. >> somehow we always end up back

at warner brothers >> it makes me say, you know what, i'm going to look at another company. >> okay. >> when you have newcor revise their numbers and they were not as positive but u.s. steel revises the numbers, they are positive it is a quandary it's not an abstraction. i'm not sitting here saying that guy is questionable to go on sunday, that guy is out, that guy didn't dress so, therefore, i think he's not going to play so adjust your lineup. i'm not doing that. >> right >> okay? i am saying that if you have your money in draft kings versus having your money in binance, i think jason robins runs a top notch outfit he's closer to what gary gensler wants versus what binance wants. look, yeah i mean, look, right now i can get ahead of jason if i called -- i left my phone downstairs i'll get ahold of jason. >> jason robins?

>> checked in? siri, please call jason robins and ask him what rate i can get. we'll find out, okay. >> thank you >> because i am tired of coming in here and debating where crypto is. when i have a hard enough time trying to figure out netflix. >> yes, netflix which was down yesterday on that report that it wasn't doing quite as well selling ads as had been thought it might >> are you saying that perhaps calling into question exactly what we do for a living, like we read adobes. we read adobes com school. are you saying that's an abstraction? is that an abstraction, my friend >> no, it is not it gets us to what are some bright spots in tech this morning. we have meta up after the jpmorgan upgrade it's now an overweight as jim said, adobe is up sharply, this after reporting quarterly results that exceeded

what most analysts had been anticipating listen to adobe analyst shantanu narayen. >> impact hundreds of billions of collars whe when you look back and say we had exceeded eps, i think that is amazing performance by the finance team remaining focused i think as it relates to go forward, we've clearly talked about why we're excited about the innovative roadmap, why we're excited about all of the things that are going to come up in to 23 and beyond. i think it was a good year. >> he will be a guest on "techcheck" later this morning 11 a.m you're not going to want to miss that >> just a second. >> i think i was in san francisco during -- you were here, but that was a disaster in terms of what it did to the

market cap of the company. just crushed the stock they spent $20 billion on a -- obviously a private company that would be worth a lot less right now although this was already in the midst much blowups. >> right i look and i think, geez, the justice department, maybe assistant attorney general -- >> a second request. >> help them by vetoing the deal that's not fair. >> right they needed to do that deal, that they needed to do it. >> i question that. >> that it was a question to them in some way regardless what the price was, it had to happen. >> i don't understand that, but i think -- i felt -- okay, here's the way i felt about that you can ask him this i had more faith in shantanu than shantanu had in himself. >> right >> ibm has done a series of acquisitions they can do better than that

the red hat turned out to be working. >> potentially potentially. >> potentially >> yeah. >> say when? >> ibm no, it's working they're getting some revenue growth out of it and then they -- >> shantanu -- >> we're going to talk about ibm but not today. 2.68 billion in creative cloud, adobe. >> 200 billion for christmas >> holidays. i forgot. >> customer wins, electronic arts, meta, nbc universal. >> they had goodwins. >> roku, target. >> roku is good. did you really put roku in the same sentence as target? right now i think brian cornell, this guy -- he lives in queens he puts me in the same thing as roku. >> they put it in the same thing as roku. >> don't do that ever to robinson on me. >> i won't i won't. not now.

>> i thought the adobe call was good but in the perspective people are saying, listen, service now is good. adobe is now is good workday is good. i look at them and i say, these are not necessarily what i want to own right now i want to own -- well, they're -- i want a low multiple stock because they tend to -- >> even though -- >> and i don't -- >> that mountain we talked about a lot and created incredible value over 4-year period a lot of it has been lost. you don't think this sort of marks a bottom in a sense? >> i think there's a bottom in salesforce and adobe and service now. all that said, i would like to buy companies that are levered to the gigantic infrastructure. >> how about a bottom in meta? >> definitely. definitely >> our viewers know your history with that name and the pain you suffered. >> i think he's not spending as much -- mark is not spending as

much in the meta verse as people realize. i think that tiktok is somehow banned than reels. it has an roi. i think instagram itself is having really good numbers i thinkwhatsapp is good but al that said, i think the stock was the worst performer in the s&p so it deserved a bounce. >> it got a bit of a bounce. heading into 2023 we think the top and bottom lines will ease and meta is showing increasing signs for discipline with more to come. >> that i got right. >> you have been saying the same. >> blind squirrel finds nuts i do think meta -- the more i talk to people about whether they're going to be in the meta verse, the more i find people who are discouraged and think it's not going to work commercially maybe until it gets to a flat screen people still feel like when you

put on the goggles you're not who you are. you're not -- that's not what people want to do is put on goggles. >> no. >> they don't want to put on goggles. maybe 3-year-olds will grow up. >> with goggles. >> yeah. they'll think we think they were view masters where you get to go to the grand canyon. >> remember those? i do as well the goggle thing could be problematic. >> i'm upset thinking about the algos. >> what are you yum csit -- upst about. >> you just called yourself a blind squirrel. >> i don't want to go through my confession again i made a bad draft pick. i admit it was a bad draft pick and i moved on. >> i did not mention it. >> i don't have to say it every day. >> i did not do it for that day. >> i made a bad draft pick in 2019 i drafted badly. okay let's move on. >> to today's game >> last night's game >> i don't even know who won i didn't even watch. >> there's a guy by the name of

cal mccaffrey. he won he also has a team. >> coming up, speaking of drama -- >> that wasn't drama. >> that wasn't >> you want be drama let me tell you something, you are guilty until proven innocent in this country if you say i'm guilty i stole a lot of money, but i reserve the right to be innocent no, you can't confess your way out of jail. there is no lawyer in the world who says, you know what i want you to do, i want you to confess and that way i'll get you out of jail it doesn't work like that. >> you can't get sbf out of your head >> you think sbf is in everybody's head. >> take a deep breath. we're going to talk about elon musk. >> that's it >> social media platforms suspending a lot of journalists. not him yet. >> turkey. sddenly guys like turkey. >>et for a lower open, everybody. stay tuned, we'll be right back.

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twitter suspending the accounts of several journalists who would cover the social media plat form and its owner elon musk that includes reporters from the washington post, "new york times" and cnn that came after an account was using public data to share mr. musk's plane. >> criticizing me all day long is totally okay but doxxing me is not okay. same doxxing rules apply to

reporters as everyone else sometimes away from twitter. >> i've been doxxing the hell out of people. >> listen, he owns the platform, he can do whatever he wants. >> yeah. >> he claims to be a free speemp absolutist and when he took over a number of months ago, he said he would open it up. yet, there does seem to be some hypocrisy here. >> you buy it. you're using fortress. people are asking you to buy money. 6. >> musk tweeted it

future funds. >> the changes approached it local style. take over twitter so he can go back and focus on tesla. >> so many of our conversations about twitter, of course, bleed into tesla we've made the connection many times between mr. musk's attention on twitter, his endless tweeting, his -- his attacking certain people who might be tesla buyers. >> right. >> declining tesla stock by the way, yesterday was actually better than the market.

it performed far better than the broader market. >> the apologists are coming on saying, listen, it doesn't matter he's paid attention and, you know, you want him there, which i do, too. david, in the end what we're discovering about a lot of the internet is it's very advertising connected. the people involved in advertising have been cutting back a lot of places and really cutting back at twitter because they don't want to be associated with fractious and unruly people. >> yes >> but twitter have had very good sales force that i met with many times they convinced me this is the way to go. you can get live sports, good people watching us, the super b bowl now i think you have to say to yourself, wow. maybe it's too nasty. >> do you think other journalists will follow his lead i'm sorry, will in sympathy say, i'm done, too? going to be suspending other journalists? >> yes but in the end they crave it,

too. >> it's a very useful tool >> i look at -- i mean -- >> use it all the time >> i don't think elon musk is doing a bad job. i feel like he overpaid for it and i think he's trying to figure out what to do. he doesn't have the staff he needs to go back to tesla and have others -- >> run it. >> like gary black said he wants him to do. >> that's what i thought the interview said. >> it was interesting hearing from mr. black let's move on here we have a mad dash jim has to get ready for. we're counting you down to opening bell once again we are looking at what will be a lower open after a 2.8%os ls for the s&p yesterday. we're back after this.

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opening bell a few minutes away take a look at the 10-year note yield. 3.54 we've seen a lot in the last 24 hours. >> you can catch us anywhere any time yocan ll tu foowhe "squawk on the street" opening bell podcast. we're right back

>> announcer: the opening bell is brought to you by nuveen. a leader in income, alternatives and responsible investing. if people only knew what went on during the breaks here >> such a great -- people don't know how great it is >> we have a good time. >> at night, too the i wish people could see our whole family. >> let's get people on mad dash who want to talk a bit about goldman sachs and the layoffs. >> there's an outfit called the scoop which i confuse with "the new york times" and "the wall street journal." goldman sachs to layoff up to 4,000 people goldman sachs did over hire, we know that. >> they over hired >> well, they did. okay, who didn't overhire? binance? >> no, there's a lot of

overhiring for example, morgan stanley is letting people go right now. don't know the numbers, but they're letting people go. >> goldman made acquisitions rationalizing things they are trying to decide who has done great and it's not district 13, but there is a sense that goldman has -- >> that's a big number though. if that number were true, that's 8, 9% of the company's workforce. that's a high number. >> that number is not true that number is not true. it's probably -- that would be if they decided, you know what, we've really got to hunker down. that's not their target by any means. now how did it get to that number they're certainly not willing to say, yeah, it's probably going to be around 4,000 they think it's less than that. >> okay. >> but the fact is, layoffs? yes. if you remember back, david solomon, i interviewed him he said, listen, if things don't pick up, you know we have to change compensation. managers, by the way, they just get calling us

so they're getting it. bonus doesn't look that good i don't know whether that means you count them as someone who's laid off or someone who they basically just said, look, we can live without >> right. >> i think this 4,000 is too dire. >> right. >> not in keeping with -- >> the consumer, the reports there and the other reports we've heard as well, the consumer businesses are the area where they have invested a great deal and perhaps feel like it's time to pull back a little bit >> it's perfect. that's the perfect description there are also different divisions where they're very high level people who the divisions didn't do as well and they may be -- they move on. >> right >> you do wonder if -- you know, the man i now call david recession solomon is worried about what's coming in '23. >> i think david solomon is saying we know how to handle a slowdown we're not going to be as cyclical as we once were and

this is part of not being that cyclical. >> okay. all right. well, the broader market discussion of course that we have many days about companies and how they're positioning themselves in '23 and the potential for layoffs that you talked about >> negative. >> yes opening bell new york stock exchange real time exchange who's ringing the bell harry's. harry's celebrating the 50th anniversary of that steakhouse very popular >> nasdaq. nasdaq >> okay. yeah i see them all the our long-time executive producer sam wright is talking me down. she can't help herself we have the council of urban professionals who rang be the bell in honor of their 15th anniversary. >> goldman sachs, you're an intern or associate and you're paid nothing

what do you do you go to harry's and have m meatballs and little pizzas. that's how you live. you go there and eat the free food >> yeah. >> well, i know pie sani goes there. >> does he >> yes yes. pisani is a big fan of harry's and has been for many years. i want to start on a deal. >> going down. >> i want to start on a deal maxr the premium is enormous and it does point, jim, to something we continue to come back to here and there, which is there are certain stocks that clearly have been under priced based on the willingness of some buyer out there, in this case the private equity firm advent to pay a far higher price. >> and that's our space. that's our space >> yes it's a satellite company comprehensive space solutions. google maps, for example, they are the provider there

>> do you want to talk about how rigorous advent is >> advent is a rigorous firm very large. >> they got into lululemon when everyone thought lulu was not going to make it they got in and they turned lulu. >> $22 billion fund. >> these are operators. >> let me give you some quick stats on the deal. $53 a share. obviously it's a cash deal private equity almost always cash and tlp's some stocks and enormous premium to what was the close yesterday. 129% premium the value's about 4 billion. there is another 2 or so in debt they do seem to be raising the equity to pay the full equity check for the market cap at 53. >> remember that fund they just raised 22 billion. >> $22 billion >> unbelievable. >> they have a commitment coming from british columbia investment as we see oftentimes with private equity deals, at least many of them, there is a 60 day go shop in case maxar should be

able to find another interested party that's willing to pay more. >> and i looked at -- i know advent because one time i had a bit of a tussle with them. i was doing something on lulu and they asked me to go look at the things they had done and they are very good at what they do >> right. >> we may think they paid too much for maxar i will tell you that maybe we under value equities, including equities that have to do with space. that's why elon musk, everyone in the world is out for that guy, too you know what, you see the valuation of his space program >> 140 billion, spacex. >> who am i to say -- >> there are many that believe it's perhaps under valued and it would be an incredibly hot ipo if and be when he chooses to take -- >> i have chosen to take a positive stance on elon musk. >> because you don't want to get banned from twitter? >> you know what, my wife would be so happy. my kids would be so happy so bana way, okay

but i will -- i will say that he has a -- that he's been -- he's the best car maker that ever lived. ever lived and cars are a big market. >> the futures were pointing to what was a significantly down open we're seeing signs of life in megacap. technology apple is up. >> why not >> meta, the upgrade from jpmorgan saying overweight stock up almost 5%. >> your algo friends -- >> amazon and microsoft are barely down. >> a positive piece about meta, all right? we have really good -- really good numbers from adobe including a very rosie christmas, by the way. >> yes. >> we have a lot of people talking about favorite big cap names in tech and they tend to be names we all recognize, like servicenow >> right. >> we have u.s. steel saying -- announce that they are having better than expected -- >> u.s. steel -- >> oh, stop it

did you know that they used to talk about u.s. steel playing the god father. >> almost $6 billion u.s. steel's market cap. >> positive broad lines piece from jpmorgan. we have airline coverage u.s. -- u.s., delta, fantastic takeover really good a guy wants to get eli lilly that's because you're going to lose 20% of your body fat by april of next year and then i thought darden had a good number i don't care if people think darden's numbers weren't good. they were quite good they don't have a problem with getting work for people. i don't know you know, darden down 7. the. >> things are better than they are -- >> yeah, keep trying >> all right >> i resent that >> i'm sure you do. >> i really resent that. i mean, oil. okay, oil's down market likes that. i didn't mean resent it. i never took money from binex

and i never had anything good or bad to say to binex. >> you've moved so many different places. >> no, this is my future congressional testimony. i will say this, david -- >> where are we now? what are we talking about? >> i was getting my balance. >> for our viewers to sort of keep along, you can't get crypto out of your head so you keep coming back to it at odd moments. >> okay. >> you earlier made a moment to draft kings saying your money would be safer there than biance if you are a cz engaged if twitter about your comment. >> good for him. >> now you're coming back to binance. >> maybe i'll put it in my mentions column. >> i'm just saying people made a big mistake when they bought the market after the fed's comment because they didn't listen to jay who was very bulkish they've changed their mind and they're very confused about the bond market.

lenar is up. they're worried about housing. instead they're on fire. there's a triple witch people are very confused i have so many end of the worlders in my face again and they also lost money in crypto and i tend to think, okay, just chill. just chill it's not a bad time and if the market slows i had 85 stocks, 85 stocks that will do just fine. >> okay. i'll make sure to mention them to all the hedge fund guys who are getting their faces ripped off. >> i said yesterday in my conference call that i no longer wanted to speak to ceos because they're sales people for their funds. i looked at my record and this is -- this is the lunch. nothing insider. the lunches and dinners and how i've done recommending their stocks after since -- >> just stop talking to them >> no. >> they do tend to be promotional for their own companies. >> yes.

>> and oftentimes when they are ceos they are quite convincing. >> they are so good. >> for real. that's how they got that job. >> they sell it first. >> i want to talk about alibaba for a sec if i can. >> sure. >> because the stock is up again. sort of one would assume on just reopening trade, if you want to call it that, for china itself. >> right. >> it's been an important week there in terms of covid restrictions coming off. we tonight have active numbers in terms of how the virus is spreading. we do hear reports as well in beijing people are staying home. i should point out, eunice, we haven't seen her because i think she's taking a well-deserved break. >> yeah. >> joe sy selling his alibaba. perhaps as much as 8% of his holdings of course, he owns brooklyn nets. >> yeah. maybe he's buying some. >> he owns an apartment on central park south that he paid about 1 88 million bucks for

>> nice guy. >> joe's a very nice guy. >> estee lauder is down. charitable trust name. estee lauder is keion china reopening. >> they are relying on cleaning your face which is not as good as gross margins they're betting the chinese are going to come back also particularly related to travel rmp why is harry's ringing the opening bell >> why wouldn't harry be ringing the opening bell >> remember when it used to be u.s. steel >> i think it's nice mix it up. have someone who gives you the real flavor of wall street >> so much fun harry's is just a great place to go i'm going to come back to the market again. >> please. that's what we're here for, jim. >> i just think that there is a lot more negativity than there was, say, monday and that that's

probably wrong we cannot -- we cannot waiver like this. we cannot say, you know what, it's bad, it's good. how about picking some really good stocks that are doing quite well, sticking with them and then when the stocks go down -- >> that sounds like a plan that sounds like a plan if you are ready to ride out what might be a difficult year next year. >> lily is down 3. if you take the pill, you'll lose 15 to 20% of your body fat. if you take the needle, you can lose 20 to 25%, not approved yet by the fda. >> right >> are you telling me that's not going to be the biggest drug of all time >> no. the this is a stock up 29% for the year lily, by the way, has moved into the upper ranks of market cap for big pharma it is bested only i think at this point by j&j at 461 billion. j&j has other businesses. >> i'm saying the market is a

menu in the menu it has slow down, it has speed up and you want to order from the slow down part. >> but you're also -- you also believe that lily has a lot more hedge for it in terms of the ability -- in terms of the success it's going to have from selling a drug that hasn't yet been approved for weight loss, right? >> merck doubled. >> true? >> merck, they thought mevacor, the highest was 400 million in sales. it became the greatest selling drug of all time and merck doubled and doubled and doubled and pfizer got in. >> pfizer got in with lipitor. i remember that period as well >> i'm saying lily could have the same move. you can take a pill and lose 15% of your body fat and there's no -- no side effects? are you telling me that we can tackle obesity and that stock is

still going to be at 357 that seems absurd to me. that's absurd to me. i just checked -- let me see if my draft kings balance has been h h hacked you're right >> they will not say a word about their alzheimer's drug >> that's the other area obviously. >> i've been doing a gala for this and i've been begging them to give me a snippet of what they're up to. >> that's different than biogen. >> biogen witold you, we're going to do it the we're the best lily is the opposite they're from indiana they don't play it that way. they just do it. i love them. >> well, pharma's been the place to be this year, of course. >> slowdown. >> merck shares up 42.5%. >> merck was under valued coming

in mckesson, has to have a movie eventually, is walgreens. >> why does it have to have a move >> cvs had a great move. walgreens has to have a move i always ask by the way offline to ceos about pilferage. that's crushing a lot of companies. stealing >> yeah. >> they don't want to talk about it nobody wants to talk about how their stuff ends up on amazon. they need a bill from congress saying amazon has too control it, lease it, sell it? >> can they do that? can amazon affect the sale of stolen goods >> if you are going to be prosecuted, yes.

are you with me? >> i'm with you. i'm always with you. i know what you're going to talk about next draft kings. >> initiative to get out of something risky. i happen to like the utilities very much here i just found out that i had p, g&es -- well, not supposed to say who i had but i had some very influential california utility companies coming on next week. >> you do? >> yeah. we started the show with adobe we should end our conversation here with market movers. jim, it's up over 6%, adobe shares you did not seem enamored of the quarter in the sense of you think it's too expensive, the stock? >> no. no i'm just saying there is another era where we would have said this was particularly not good but what's important is we've now ratcheted down expectations to where we can feel good about

a company with 15% growth where we would have been horrified if it was below 9 the firm people use is it's derisk 15 is fine i am concerned about the acquisition. i think you'll be able to drill down more about that so people can figure out why he's paying so much. i think it's an amazing thing to watch a company where you would have had to have had this quarter, it got cut in half. stands to reason. >> you can't see a bit of a rebound from that significant down from that figment deal. private company. they were going to purchase for $20 billion. >> if you are creative, you need adobe. if you are creative on the web, you need adobe they do remarkable things. if you study the quarter, they'll tell you about companies and what they're doing on adobe that's very, very exciting that they didn't have before. >> right. >> i think it will be an excellent interview. i like the company, i department like the stock at this point i think the stock is derisked because it's come

down so much. >> finally, jim, as we talk about 2023, i talked about merck. exxon. d do you want to own many of the same names >> no. no. >> or is it time to mix it up? >> well, look, i happen to think that s&p is, what, 5.5 oil, 6 oil. >> i think it's 6% oil i think when you have someone -- amazing operator saying pioneer intends to have the highest yield in the s&p and he ain't doing it because the stock's falling. i think devon's done a lot devon's come down. excellent company. i like exxon someone called it in i think chevron is very inexpensive. i'm quite comfortable in buying oil.

i see a lot going. here i like the dollar stores when it comes to retail. i like five below. i likecostco >> you do. you do. >> that's my job i'm not a top down guy that says, okay, i hate the market. i like the market. sister, mother, sister, mother. >> we have signs of life in the market itself. of course as i mentioned, big cap tech a number of those are up. >> look at the market come back. disney is up wait a second. national holiday national holiday disney is up. >> fresh economic data out from -- flash manufacturing pmi for december came in -- >> david, stop it. disney's up. >> compared to consensus -- >> no, wait. i want to know what this is. >> of 47.7. >> which character which character? is it dopey? the dopey guy? >> no, dopey didn't die.

>> i don't know where i am telling people about the services pmi. >> that's an allegory. you know what that was an allegory for >> i -- i -- i -- >> the hulk. >> you learn something new every day. >> all right how about the bond market? let's get to a bond report now take a look at how treasuries are fairing this morning yields you saw it earlier there's the 2-year note. now in the green 4.25 the 10-year at 3.51. >> 10-year is the thing that has everyone so worried. i say worry about something else. >> we're back right after this

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there is a look at the worst performers of the week topped by two companies we have spoken a lot about charter, of course, that larger than expected capex spend coming in 2023 that they shared at daa up ds yst y coleay

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well, we fell in love through gaming. yeah... oh. but now the internet lags and it throws the whole thing off. when did you first discover this lag? i signed us up for t-mobile home internet. ugh! but, we found other interests. i guess we have. [both] finch! let's go! oh yeah! it's not the same. what could you do to solve the problem? we could get xfinity? that's actually super adult of you to suggest. i can't wait to squad up. i love it when you talk nerdy to me. guy, guys, guys, we're still in session. and i don't know what the heck you're talking about. welcome back of course, markets still down. let's get over to bob pisani, get more of what's going on.

bob? >> we broke 3900 overnight that was a big sort of expiration strike price. when we did that overnight, we took another leg down. semis are holding up micron, amd, broadcom. there are the reits, just not looking good they haven't been looking good all year sl green is at a 13-year low now. a lot of worries about the office reit situation. vornado not a new low, but down 45%. regional malls like macerich, simon property down 30% on the year a quarterly expiration day we saw enormous at the opening we'll get a rebalancing of the s&p 500. happens four times a year. huge volume and usually does not result in price moves. although, overnight had we broke through 3900 on the s&p, we de see a move to the downside expiration is secondary to the issue for stocks still higher for longer. the economic data is sort of

turning against the hard -- the soft landing crowd yesterday's data was just awful. it's making a harder -- difficult case to argue for a soft landing that means earnings have to decline even more. they've been coming down the valuations are really very, very high. the strategists think eshings will be down 5%, 6%, 7% next year if that's the case the multiple on the s&p is 19 now it almost never goes above 18. when it does, it usually comes back down. that's the real problem right here it's finally great to see my old friend, harry, one of the great restaurateurs of all time ringing the bell. >> i figured you would be down here, bob, celebrating with him. >> unfortunately, i got to be up here for a podcast with jeremy siegel or else i would have been >> all right bob, good to see you talk to you later. let's do "stop traditrading >> it's coming back to

advertising. morgan stanley say good news/bad news i got to emphasize to people that a lot of the companies out west thought there was a secular trend towards advertising in their vehicles no, there's no secular trend it's a cyclical business. >> companies cut back on advertising, they cut back. >> that's an easy way to cut back of course, it's a dumb way, but that's what they do. what a good show. >> really? you think so >> yeah. >> i'm glad you did. >> i may -- i'm not going to focus on crypto for a while. i think i've crypto'd myself. >> i don't believe it. we're staying on top of the post-fed selloff stocks are off the lows of the morning. back after this.

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good friday morning. we will come to another hour of "squawk on the street. we're live at post 9 of the new york stock exchange. you can see we're still down the nasdaq showing some signs of

life with meta certainly helping. and i know that's one of the names you may be mentioning, sara. >> 30 minutes into the trading session. i'll give you three key movers we are watching. meta shares, heading higher after an upgrade by jpmorgan to buy after the firm gets bullish on the company's revenue outlook. it's the only faang name beating the s&p 500 so far this month. adobe also an outperformer after strong results there profits coming in better than expected revenue up 10% year over year. don't miss a breakdown of those numbers with the ceo next hour on "techcheck. finally, keep an eye on the chinese tech names today seeing some green after u.s. officials say they gained sufficient access to audit documents from companies in china and hong kong for the first time and that eases fears of mass delistings as china continues its path towards reopening after zero covid we'll discuss with kay webb a little later on in the hour. i guess they are moving towards reopening.

though the signals are hard to tell. >> they are hard to tell clearly, that does seem to be the case it's certainly been reflected in a lot of movement in the stock that's been up alibaba which i look at as a reflection to set up about 2.5%. stocks overall still off -- still down, but off the lows of the morning. in the wake of the hawkish central bank outlook with that said, despite the volatility, interest rates, they're barely moving. our senior economics reporter steve liesman joins us to explain what it all means. steve? >> yeah, dave, while stocks have sold off hard since the fed meeting, interest rates have risen only a bit and not even some in some cases that comes after the fed's mother hawkish outlook on rates. influencing financial decisions, that's a major reason -- or major way the federal reserve tries to steer the economy and interest rates it kind of raises questions about whether or not they're losing control of the interest rate market and maybe have to do more if thispersists

fed chair jay powell says not a problem in the short term but could be a problem if it persisting david merkel, economist at goldman sachs. he tells me, quote, what would make powell feel like he has to respond is the combination of continued easing in financial conditions plus growth reaccelerating to a level clearly above potential plus a failure of labor market adjustment to take place in the battle tweebetween the f and the markets, bill dudley, former new york fed president, he has no doubt who wins he says the fed has the hammer and all it has to do is keep going. the fed will win every time, he says now, of course, right on cue, the current new york fed president john williams said if the fed has to do more than currently penciled in 5.1% for 2023, it will do more. most fed observers i talk to said that the fed is probably set on 25, but again, if these factors don't start going the way it wants to see them, a 50

is possible either in february or later sara >> steve liesman, thank you very much markets versus the fed, it feels like, is sort of the setup here, dave i do wonder if we're moving into a period where it's not as much about what the fed is going to do and what inflation is going to do and it's about what the fed has done and what the economy is going to look like. and the more they are hell-bent raising rates in this inverted yield curve, the outlook deteriorates i feel like that's what's been the story of the markets post-fed, post-ecb, where they have promised to keep going in the wake of slower growth. that's why steve said, they're getting lower interest rates, not higher interest rates. >> the conversation i have most of the day with people who allocate equities for a living is what's '23 going to look like in terms of earnings have we started to see that period where companies are reining in in terms of what

their expectations are and the answer seems to be not yet. right now everything is okay they're pulling back on advertising. they may be starting to lay off. but the vast majority of the people i speak to are fairly negative maybe that's a positive, but they do not see 2023, sara, as a good year for earnings they don't believe the multiples have effectively adjusted yet to account for it. >> the market is pricing in this soft landing people are feeling more negative it does feel if there's a greater chance of a hard landing, that explains some of the weakness in the setup. everyone expected a santa claus rally, i'll tell you that. >> they sure did. >> where are we hard landing versus soft landing? what have we learned over the last week? >> retail sales were worse than expected and that took down gdp forecasts. it's not services spending it's all goods in the retail sales. the only part were bars and restaurants and that was higher. it's not like the consumer is falling apart here they're definitely spending less

on electronics and apparel and furniture. we bought enough ottomans for our house. part of that is covid. they're spending less because inflation is coming down a bit brian moynihan was on last friday, bank of america. consumer spending picked up in december, according to him. >> 3.7% unemployment rate will do that. >> as long as they have jobs. >> right i think the consensus is soft landing on at least jobs growth is more of a question mark and earnings, you know, so far expectations have not fallen that much. that's why the bears will say, look, there's more downside to come for more on the market, let's bring in charles schwab's liz ann sonders and wells fargo investment institute's darrell kronk. i believe you two are leaning bearish, is that right >> i would say for the first half of the year it's a tale of two halves, if you will. the first half will be choppy and rough. you're correct all signs point to, whether it's

72 basis points, two 10s, inversion, the lei what's interesting on the equity markets, the u.s. dollar peaked 11 weeks ago, rates peaked 6 to 7 weeks ago. those should have been supportive to equities in fact, they haven't been particularly long duration equities like tech and growth and everything else. they've only continued to move lower. so right now the risk/reward tradeoff doesn't look to us compelling yet if we drop into the 3500 to 3700 range on the s&p, i think that starts to flip a little bit and becomes much more compelling as we stand today, we're on the 50-day moving average and all 200 and 50 are tightening up like a coiled spring history tells us, when that happens, you break one way or the other, to the upside or downside we think the downside.

>> everyone was talking about the 3900 yesterday as a technical level. we closed below it i guess if we close below it again, according to a technical analyst, that's not a good sign. liz ann, what are you leaning toward >> it forces you to think in calendar year terms but neither the economic cycle or the earnings cycle cares about the calendar what we put in our outlook was in agreement with darrell. it's not so much first half/second half the cycle doesn't care about the calendar the medicine still needs to be taken. by that, it's weaker economy, weaker labor market. very clearly shared by the fed as a most likely serious and necessary ingredient in the recipe to get inflation down therefore, i think sooner rather than later is the best time to

take the medicine because it does set the stage for maybe not a pivot, but at least a pause for the fed to reassess. so, i think there's still more downside in terms of earnings estimates. there's still more weakness to come in the labor market we're starting to see some of those cracks but i think from a market perspective, we're better served to have it happen sooner, not later. >> yeah. do you think that will actually happen >> well, when you look at things like the regional pmis, the s&p global pmi that came out today, retail sales, industrial production that was weaker than expected, you are starting to see some of those dominos falter you may continue to see a bit more resilience in the labor market, at least if you look at metrics like the unemployment rate but even within the labor market, whether it's hiring freezes, whether it's layoff announcements, which in the challenge of great christmas data are up 400% year over year,

even higher for tech space, differential between the household survey and the establishment survey that generates payroll. you already are starting to see some weakness. it may not manifest itself in a serious uptick in the unemployment rate because of the labor shortage but i think more weakness is coming >> darrell, talk us through the earnings expectations for the next few quarters, because what i hear is that fourth quarter should be fine but it's the outlook for the first quarter, which would be very muddy and uncertain because nobody knows what the economy is going to look like and what the fed is going to do. so, where are expectations versus where you think they're going to be? >> yeah. i think fourth quarter will be fine the interesting thing is, you know, what's beaten earnings has been revenue growth. if you impact revenue growth, it's not in unit demand. it's just in price increases, which is on pair with inflation. it's the companies raising prices and not underlying demand, which i think you need to understand as you think

about, you know, q4 and q1 we do think q1, the markdown on q4 probably starts in earnest in early january as we go through that season. and then q1, q2 will likely look like the tough quarters. i find it ironic that markets, you know, are surprised by kind of where economic data is at and where the slowdown is. we all know monetary policy acts with a six to nine-month lag if you spin back the first six months, you're at the first fed hike in june we know we had 75 in june, july, again in september and again in november those haven't bit yet orbiten on the economy. so, you know, those are still yet before us. and i think have to play out the last point i would make here, too, is the two-year note has always peaked above the terminal rate in past cycles if you look at the new terminal rate at 5.1% where the fed told us this week it was, the two-year note is nowhere close

to that. we're 75 to 100 basis points away from that if the history holds, the short side of the curve probably has to go higher >> that's where the fed would like it to go. liz ann, darrell, thank you very much appreciate it. >> thanks. as we head to a break, let's give you a road map for the rest of the hour. we'll have more on the markets, of course, and this volatility that will be this hour as we check in with long-time economist jeremy siegel, he's arguing inflation has peaked >> he really wants the fed to pause. more on the wall street's top picks from retail to china tackling that this hour. goldman sachs, it's joining the growing list of companies that may be facing layoffs these are reports out there that thousands could lose their jobs at the wall street firm. we have a big show ahead don't go anywhere.

it's been a tough month for the stock of apple, thus far, down about 8.5% for the month. apple weighed heaviest on the nasdaq 100 yesterday tesla on the other side of that led the index. our next guest covers both those companies, bernstein's tony joins us i would like to start with tesla, just because, you know, i find it fascinating this connection between musk's behavior involving twitter and

the continued decline in the shares, except for yesterday what's your take right now in terms of tesla, whether he really is damaging some of the brand loyalty? >> i certainly don't think musk is helping tesla's cause in terms of his association with twitter or the actions he's taken there, the proclamations he's made. but i do think the bigger fundamental issue is that tesla appears to have demand issues. and we've seen them last quarter fall a little short on deliveries and we've seen pretty aggressive price cuts in china. now we're seeing discounting in the u.s. and discounting in europe as well so, if you have a company that's growing or hoping to grow 40%, 50% per year and it's struggling with demand, that's the

principle fundamental issue. but to your question, absolutely, i think, you know, to some degree musk may be disenfranchising potential tesla customers, and that's certainly not helping. >> yeah. we had a guest on yesterday, though, gary black, who owns the stock, said, you know, at least on his numbers, he thinks trading is 22 times earnings thinks it could earn as much as 22 bucks a share by 2026, arguing the stock could be as high as $800 what's your take >> we're a little under $5 for next year, so that means the stock's still trading at about 30 times earnings. you know, we are in a higher interest rate environment. when you look out to the future and you look at earnings, you have to discount those at a higher rate. and that's part of the reason we've had a -- you know, a pullback in high multiple stocks again, i think the fundamental question is, until about six

months ago, everyone thought tesla could continue growing at 50% a year for the next few years and sustain their enhanced margins. and i think we're seeing real demand issues. so, that means either the growth rate's going to have to slow or they're going to have to cut prices like they're doing now and have lower margins and i think for the next couple of years, given there's no new high volume product coming, that's going to be a real challenge for the company. so, i think it's difficult to say beyond '24, '25 because there may be some new products when we look forward over the next year or two, i think those are going to be challenging relative to the expectations that tesla has set with the investment community and that's the principle reason we're seeing this continued pullback in the stock. >> it's almost at your price target, tony you're at 150, underperform.

sounds like you might have to take that lower. it also sounds like the twitter purchase doesn't factor into your bearish thesis, the fact he's had to sell stocks, he's clearly been very distracted and now concerns about buying a tesla and what that brand image means. >> right yes, we think the risk/reward -- we've had this price target for, i think, a year and a half when the stock was at $400, i think, you know a lot of people thought, oh, well, you know, this will never happen and there have been a number of factors that have contributed to that principally that we've had a big market drawdown and inflation across the board but my principle concern is more fundamental. i do think we've seen some impact on the shares because of elon's association with twitter. i think the stock was up yesterday, in part, because people were relieved they said, oh, well, the stock's been going down. that's because musk has been selling shares

there's an explanation for that. we feel a little better. we're seeing the shares down again today. and i do think that, you know, the principle reason remains demand concerns. overnight there was incremental discounts. tesla is now giving not only $3750 discounts on cars taken in december, but also offering 10,000 free miles of super charge that occurred overnight. >> interesting obviously, our viewers just saw stock's down 30% since they closed the twitter transaction obviously, he's also banning journalists from the platform as well tony, we didn't even get to apple, but somehow i think we'll have you back soon enough to talk apple again appreciate you taking the time have a great weekend. >> my pleasure you, too. wall street is getting bullish on nvidia. we'll discuss new calls next more market action after the break.

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dow's down about 360 let's check in on the chip stocks smh, on pace for back-to-back losses and first monthly loss in three as stocks in the space continue to see pressure nvidia, the etf's second largest holding, 10% of the fund, getting top pick by bank of america as they say they see fewer estimate cuts for the sector going forward the stock's also a top pick for evercore and cowen that said, it's been an underperformer this year nvidia down almost 2%. meantime, let's get a check on another sector that has been caught up in the selloff, industrials. kristina partsinevelos joins us with a breakdown for us. >> yeah, industrials are continuing to fall they fell yesterday over 2.5% lower. investors are worried. maybe reflecting that companies may postpone expansions, may produce fewer goods. in turn, demand less input resources. the sector is on pace for its

second straight weekly loss. i want to zoom out for a second so we could actually trade this. you can see the xlie down 1%, down 7 -- or over 7% year-to-date it's on pace for its first negative year since 2018 2018, though, was much worse, down 15% today we are seeing industrials and material names actually leading the dow. you've got, let's see, caterpillar -- well, look at that i had these in green and then they all turned red on me. only amgen is leading the dow higher let's skip past that boeing is outperforming caterpillar and honeywell on a month-to-date basis. wall street seems divided on their investment strategies for the sector after going through reports. i saw morgan stanley believes machine and construction offer a good entry point since margins are underperforming the market average. they increased their price target on cart pirl to $190. caterpillar trading 11% higher on the one-year.

it's also just less than 4% off its 52-week-high morgan stanley increased the price target on cummins to $264. on the opposite side, you have deutsche bank, they believe industrial names have yet to price in a recession, have not cut their names enough illinois tool and terex is their top pick johnson controls back over to you. >> thank you because the market has deteriorated down 391 on the dow. s&p 500 is down 1.3% we're going to continue to follow this market as the volatility continues post three central bank meetings this week. investor questions grow around a soft landing s&p 500 down 1.25% we'll with get jeremy siegel's take on what comes next after the break. he's very opinionated about what

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i'm kate rooney and here's your cnbc news update. russia has launched a major air attack on ukraine. residents in kyiv seeking shelter in the city's subway system there were strikes in the city, 60 of which were intercepted power was knocked out in some areas. and a rocket hit an apartment building. in berlin, a massive 80-foot tall aquarium burst unleashing more than 260,000 gallons of water. the resulting flood inundated the hotel and stores that share the same building. police say only two people suffered minor injuries. however, none of the 1500

tropical fish in that aquarium survived the cause of the incident still remains unclear. and nasa has launched a satellite that will help scientists research the world's oceans, rivers and lakes the surface water and ocean topography satellite, also known as s.w.a.t., will precisely measure water levels across 90% of the earth's surface and help researchers track water flows around the world back to you. let's get back to the broader markets. deterioration all morning following the selling we saw yesterday. down 400 on the dow. just yesterday art cashin was here he mentioned the significance of maintaining the 3900 level on the s&p. take a listen. >> you have to maintain 3900 if you break 3900, be careful as to how the rest of the day goes. if it develops into washout selling, that raises the

possibility that you could get an extension to get new selling on not friday but on monday and tuesday. >> well, we closed below 900 yesterday. we're below it again today 3847 here with his take, professor at wharton school of finance, jeremy siegel joins us it's great to have you, professor. i know you've been fired up lately about the federal reserve. now we had this meeting. we got the message from the fed and, frankly, the ecb they have a lot more work to do and the market doesn't appear to like it what's your take >> sara, i think the fed is making a terrible mistake. their plan, their dot plot is way too tight. inflation is basically over. despite the way chairman powell characterizes it, and we could go into that if you want i say over 90% is over

and with the bulk of monetary policy, as he himself admits is yet to be felt, i see no reason to go any higher than we are now. in fact, i wouldn't have gone as high but it's a done deal, certainly, what happened earlier this week. but the talk of going higher and staying high through 2023, i think, would guarantee a very steep recession. >> first i just want to say, i do always listen to you, especially on inflation. you were very early and very out front on the fact that we have an inflation problem in this country and the fed was very late on this fact. so, i pay attention when you say inflation is over. but i don't see that in the data if you look at what's happening with services,prices, if you look at wages, food. i get rent is a lagging thing. we can put that aside. but where is the evidence that inflation is over? >> and you mentioned rent.

in fact, i think there was a headline today saying the biggest drop in rent in the last month they just reported in their history. of course, we know in the government statistics, we still have a big jump and will for another six to eight months. powell has admitted it, prices are going down, we won't see it. let's talk about wages because that's really important. he fears wage is an inflationary force. first of all, wages since the pandemic have not matched the increase in prices the real worker wages have gone down it's hard for me to see they're pushing inflation up when they don't even match inflation sara, over time, over the post-war period, wages have gone up 2% on average above inflation. since the pandemic began we should be 5% higher instead of lower. secondly, chairman powell mentioned in his news conference about a structural shift people are not working as they

did now, and that could, you know, really change the nature of the labor force it is not the fed's job to suppress the economy because there is a structural supply shift. they take care of aggregate demand not shifts in supply chairman powell was very clear when he misrepresented the inflation we had a year and a half ago and saying being supply if induced saying we're not going to act against supply-induced inflation if people don't want to work, firms have to offer higher wages to induce them to work it's wrong for them -- >> the problem with -- i'm sorry to cut you off you know the wage price spiral if people get paid higher, they are willing to pay higher prices and the inflation mentality becomes more entrenched. >> but inflationary expectations are not being unhinged powell admits it

but the latest - >> they can't take that for granted? >> they an't, but if you take look around you at everything that we have current prices of, commodities, gasoline, housing prices, in particular, cargo prices, shipping prices, lumber, aluminum, everything that we have prices for -- >> all coming down. >> aregoing down. >> food prices are not coming down food prices are still going up hopefully moderating but still going up. >> jim cramer will argue on that because he talked to the head of costco who said, i see now food prices going down. now, i'm not an expert in that field. >> that's great but it's not in the data yet the fed can't base its policy on the head of costco saying food prices are going to come down soon. >> it's not a matter of coming down it's a matter of stabilizing i mean, certainly the fed has never talked about we're going to bring the price level back down to pre-pandemic levels. i mean, that would be a deflationary disaster.

>> but they want to get to 2% and they're at 7%. >> right, right. i think if you take a look at forward-looking food prices given what we see in the market, you're at that 2%. by the way, you know, another thing that worries me, by the way, informed me about why we were going to have so much inflation to begin with is the money supply if you take a look at what's happened to the money supply since march, the biggest decline since world war ii, the tightest policy on liquidity that we've had in over 85 years, we're going to get another supply at the end of the month, my data says it's going to decline again. i mean, that is just slamming on the brakes way, way too hard don't forget, 5% increase in money would be consistent with the fed's 2% goal. not a negative decline in the money supply that's the type of policy that precedes a recession >> jeremy siegel, good debate.

love playing devil's advocate with you that's what's happening, that's why people are scratching their heads. fed says higher for longer and then rates go down jeremy siegel of chawharton. >> thanks for doing that i wonder if he's a tough grader? is he a tough professor? nice to his snunts. >> he seems nice but tough. >> questions for another day. >> i haven't been his students he's a good debater. >> he is always wonder. all his students into crypto let's move on, though. goldman sachs, let's talk about that for a bit because the firm may be planning to cut as much as 8% of its workforce over the next month let's bring in hugh. what do we know? that's a big number if they were to hit it? >> it's a meaty number, david. i think it shows a couple of things let's start with the bakes they're talking about doing this in january

as you know covering the industry for as long as you have, david, you know, they like to cut people before bonuses are paid out the reason -- the thinking behind that is you're really preserving the bonus pool for the remaining employees, the people you favor and you make want to feel good for their work the past year. the other thing to keep in mind on the timing, they're having another investor day in mid to late february. so, this is where they go out and trot their executives out for shareholders and say, these are the key performance metrics we are going to hit. they is why we merit a higher valuation than we currently enjoy. so, i think they want to look lean, you know, ahead of this february investment conference and they're going to do it and the optics not great they had a layoff round in september. to do another one in january so quickly shows that either they should have had a bigger round to begin with or that the outlook for '23 has deteriorated 37. >> right to be fair, they hired a lot of

people over, let's call t the last 12 to 18 months they've been building that consumer business. hugh, any idea exactly where these cuts to the extent they occur would fall >> yeah. my understanding is they're broad-based. not a corner of the bank that's untouched, but that, you know, if you're an underperformer, you're considered an underperformer, you're more likely -- on top of that, if you're in a business, which is being etrenched, obviously they're de-emphasizing consumer. if you're in a business where you're in market loans or worked on the checking product that's now being essentially shelved, obviously, you know, there's much higher chance you'll be cut in this round. >> yeah. and what about the industry more broadly? i know morgan stanley is making some targeted cuts what are you hearing out there is goldman going to be first to this or is this going on quietly at a number of its competitors

>> i think there's a story there that says that goldman is cutting more aggressively and deeper because they have had adventure in consumer banking in which they candidly are slightly embarrassed by them because they're retrenching and admitting defeat to a certain extent there's that specific story with goldman. however, you know, they tend to be trend setters i wouldn't be shocked if there weren't rolling layoffs some time in '23 for the other firms as they realize that these huge drops in investment banking and capital markets activity, you know, they don't bounce back as hoped for and '23 isn't as good a year as '20 or '21 was. >> thanks for the reporting. appreciate it. >> you got it. >> i think that point on perspective is interesting, right? you mentioned, it's coming off a period of very strong growth it's not like some sort of mass

layoffs preparing for recession. yes, the environment has changed but everything has the covid distortion. >> that being said, david solomon has been fairly aggressive in saying the word regression over and over again, sort of given him the moniker of david "recession" solomon. >> it's like jamie "hurricane" dimon. >> you got it. she picks up on things. evercore adding four retailers to what they call their nice list this holiday season you want to find out who got the top spots and why. we'll have the analyst behind that call next

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greg >> that's what we're saying, sara we've been doing the survey now for over 15 years. basically people are getting cautious taking some items out of the basket and looking for value the categories they are looking to spend, know they have to spend more because of inflation is grocery-heavy those are some names particularly we would say costco, for trying to play that value side more for grocery. and amazon is in our top five. they look like they're gaining share across a lot of categories as well as people -- we call it the revenge e-commerce last year it was the revenge of stores. >> who is amazon gaining share from now >> honestly, if you look at it category level, it's consumers are going to them again for value and for convenience. a lot of it is up against what they were last year, which were particularly poor.

one word of cautious, they don't play that heavily in staples categories we didn't change our amazon numbers as a result of this. it looks like they're having a good share category. because of discretionary areas like electronics, toys it, those categories are weak. we think it's a net-net neutral for amazon around the holiday season but they're having some good share traction. >> who is on the naughty list, greg >> discretionary, big-ticket things, consumer, durable goods bought over the last three years, they're in the tougher spot frankly, walmart and target look like they'll have down discretionary sales. sporting goods and select areas could be at risk but i would also say some bigger-ticket held funnishings you heard restoration hardware talk about their challenges. best buy we think is in consensus expectations but it's going to be a down holiday

that's what we got from our survey panel >> greg, thank you i mean, a lot of that has kind of played out but the amazon call i find interesting because that stock is down a lot year-to-date, down 23% david, your turn. >> sara, thank you i'm going to tell you adobe actually beat its earnings estimate despite fears of a slowdown the quarter was more profitable. the stock is up 4% and the ceo is going to be on in the next hour on "techcheck. ♪ don't get an ev for the “e”... ♪ get it because it pins you to your seat... and takes your breath away...

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stocks are in the red. we're about at the lows of the session here we got some weak manufacturing numbers in the 9:00 hour and we're continuing the selling that we've seen, post fed, post ecb. every sector red right now it's being led lower by real estate and energy. we're down 2.3% for the week, heading in here to the final trading day of the week. we'll be right back on "squawk on the street. stay with us

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stocks of chinese technology companies, a rare green spot this morning alibaba up and j.d. and pindoduo the investors easing fears over the risk of that and the covid cases, the further impact that will have on the country that seems to be reopening in a way joining us now is chief investment officer brendan hearn. what do you make of it all we can talk about the pcob, saying it completed the access to the books and move on from covid. >> the pcob decision is great work from the 30-plus inspectors that spent nine-plus weeks in hong kong. there to protect the interest of u.s. and global investors. and they got a clean bill of health

almost 200 come off, holding the foreign companies accountable list that moves the delisting risk. that should bring many institutional investors, professional investors back into the stocks in the days and weeks and months to come >> yeah. is that delisting risk removed for quite some time? or is this something that we'll be revisiting with some frequency? >> it certainly resets the three-year clock, at the same time as the s.e.c. and pcob. noted is this is an ongoing effort and the companies and the out t awe auditors will have to get to the standards. it behooves the chinese government to allow the companies to stay listed >> yeah. let's move on to the other side. both lifting of restrictions on covid, the number of cases and what seems to be at least a

sense that the chinese government is lifting or easing on chinese technology companies. do you see it? >> postparty congress, we're seeing a pivot to address three significant issues that have weighed on china's economy and certainly also china consumer sentiment and investors' sentiment towards china. u.s./china political relation, zero covid policy and the real estate sector. and you're seeing a major change on all three of the issues we think that's going to allow a rerating that investors can come back into these stocks we want to emphasize that domestic consumption is where chinese policy is headed and certainly for us, as investors in chinese internet companies, those companies, the ecommerce companies are the transmission engines for domestic companies in 2023

>> how much of a of pent-up demand do we expect in china can we use the u.s. as a playbook and if they open up, some of the ran models have 100 million symptomatic cases of covid 100 million hospital admissions. and up to 1.6 million deaths >> certainly one of the key issues is that omicron had a lower lethality rate than delta and other variants, part of why you're seeing the change in policy at the same time, you see a major push to vaccinate china's elderly population, which has been slow to adopt the various medicines. to your point, sara, mckenzie released a great report on the chinese consumer, saying almost 1 trillion of excess savings have been built up in china, due to covid restrictions, real estate issues.

and that's something that you're going to see that money come out of savings and go into the consumption. that's a great thing for the internet companies and it's great for many u.s. multinationals operating in china today. >> thanks for the update appreciate it. >> thank you happy holidays >> and to you. we got a couple of minutes left here. we're looking at a market that's worsened in the last hour, with the s&p 500 down 1.25% industrial production data we got was not great. what are you focused on when the day comes to an end? >> we're focused on the interplay in the markets we have two perfect guests to talk about it. we have the former vice chair of the federal reserve and published a buzzy blog post this week about the fed and what it has to do to keep terminal rate high and push higher and he addresses the question about financial conditions and whether they have to move basically to keep stocks under

pressure and bond yields going up and the dollar stronger to control the market here. that's part of the plan on fighting inflation we have josh friedman, most of it in debt securities. it will be important to hear from him, where he sees rates going, bonds and what some of his -- he gives us interesting names in the portfolio that he's betting on >> you can get double-digit returns in fixed income. maybe some opportunity there's >> we hear that. some of the fund managers are moving out of stocks into bonds, into 2023. >> yeah. this year, as you know, the combination regardless, has not been good at all we got a market that's down about 1.3% meta, one of the only rollout performance, that upgrade from jpmorgan this morning, to an overweight, citing cost discipline as we discussed with our last guest, alibaba shares up

>> it's amazing what sentiment can do on wall street. once facebook or meta started tightening the belt, that is the invogue trend on wall street net netflix was down 9%. and on the higher rates of growth >> that's going to do it for us on "squawk on the street." thanks to sara you'll see here later. "tech check" starts right now. >> good morning. and welcome to "tech check." i'm julia boorstin stocks off of the lows of the morning after the s&p 500 and the nasdaq see their worst day in two months. there is at least one bright spot this morning, adobe it leads the s&p 500 after reporting an earnings beat this past quarter we'll see jon's interview in a few minutes. and later, two more top picks for wall street. why investors should be bullis