started to see some of that bubble up. >> thanks for being here today >> and tom farley, want to thank you for sitting in with us >> merry christmas, happy holidays >> happy hanukkah. >> take a very quick look at the markets. you're going to see the dow is down by 34 points. we'll see where this heads make sure to join us back here tomorrow right now, time for "squawk on the street." >> good monday morning, everybody. welcome to "squawk on the street." i'm david faber with jim cramer, and we're live from the new york stock exchange carl has the morning off let's give you a look at futures as we begin trading a half hour from now kind of a mixed bag after what was, if you're long stocks, not a good week last week. let's get to our road map. it does start with tesla shares. they're getting a boost ahead of the open elon musk coming up short on his own poll on whether he should

stay or go as twitter's ceo. and meta pressure. the european commission says the social network may be violating antitrust laws by abusing its dominant online classified ads position not seeing jim wave his hands at everything finally, you're not going to wave your hands at this. the ceo of costco joining us that one you're not going to wave away. we'll talk about inflation, the holiday outlook, get a nice pulse on the consumer when we speak to craig jelinek later in the hour >> how did you vote? >> on musk i felt like i shouldn't. >> you wanted to be neutral? i feel like i needed a sticker, i voted. >> we're starting with that elon musk poll, of course by the way, he did ask users if he should step down. and saying he would abide by the results. 17.5 million votes cast. that's pretty good >> i voted

when contessa was on, i voted like 5:24. >> the results are also giving a lift to shares of tesla, of course, as you know, we talked about endlessly the stock has taken a significant downdraft since you can see it, 31%. that's just since the close of the twitter transaction. >> what do you think it means if he does step down? does that mean -- people keep saying that means bankruptcy i think he's going to find another ceo. >> yeah. listen, that was always part of the plan we were looking back it was in may, remember when i reported he was telling the investor group he had lined up, the $7.14 billion in equity investors that included larry ellison and marc andreessen. he was telling them, i'm going to take over that was back in may, my story i'm going to be temporary ceo, and then i'm going to find somebody to run the company. i'm going to do it for a few months oftentimes thee polls do seem to be something he already expects

to do. and so it's not a surprise that said, it's not clear who his successor would be >> no, but i have a lot of sources at twitter and yes, the disarray is palpable but in some ways, that's musk's way. i mean, he really kind of didn't want anyone from the old group i think this was so positive, my travel trust doesn't own tesla, but such a positive for tesla to read that because i think the biggest problem here was there was definitely a sense that he's taken his eye off the ball, and now, he could appoint joe shmo, and tesla goes higher. >> it's unclear whether he'll listen to the poll, although he said this was his intent one would anticipate if this was part of the plan he was telling investors about last may, he does have someone in mind to potentially take over. that said, he's the owner.

he's still able to dictate what he wants to have happen. but toyour point, simply sayin i'm no longer ceo would be beneficial for shares that have been cut by a third just since he closed the deal >> right, but i really want to make this point that tesla is doing incredibly well. i think people don't understand. there's a china problem, but i think china certainly reasonable given the fact there's covid twitter doing poorly because of some ad degradation given the fact that -- >> overall weakness in the ad market we know about it across the board, and they have added to that with some of the problems there in terms of advertising, advertisers specifically pulling back saying they'll wait >> you could have some consolidation in that industry it would be good i also don't think, by the way, that he ever put into place what he has in mind for twitter if he has something in mind. a new ceo, i think, would be regarded as being positive for boat because i think people think he's doing badly at both i think that the idea that he's

doing badly at tesla is just wrong. tesla is doing quite well. i think that the fact he's doing badly at twitter, who wouldn't >> i'm looking at an oper hiemer piece from this morning. they downgraded tesla due to twitter related risks. that's the number one reason musk is increasingly isolated as the steward of twitter's finances with his user management on the platform we see potential for negative feedback loop for departures of twitter advertisers and users, incruising the financial needs that may lead to incremental tesla sales by him, just as the competitive environment is intensifying >> that vote made me feel like, okay, tesla sales are done so buy some tesla. and that i think there are plenty of people who want to do twitter. i don't know if you read the excellent article by jim stewart this weekend >> about cnn >> yeah, i did

>> what a terrible job to take and yet he took it and he took it, even though there's clearly some problems at cnn, had to do a lot of firings or go along with them. i thought the article applies in a lot of ways to what could happen at twitter. there's always someone who wants to be a ceo, always. even if it's a troubled situation. >> right >> and i think that -- >> i don't think james gorman wants to be the ceo, though. >> no, john ledger does. >> i'm mentioning that because morgan stanley was the lead on the $13 billion in financing when you do have the ceo and owner of the company bringing up the prospect of bankruptcy, that doesn't do a lot to sort of settle your nerves >> no, but look, the reason i played the analogy out for a second is that there is a moment in that article by jim stewart where stephen colbert says, you have to be nuts to take this i think that's going to be the

theme of whoever takes it, which is you have to be nuts to take it but you're looking at twitter the way it is, not the way it could be there are a lot of things that could be done. >> it would make a lot of tesla investors, we have spoken to them, gary black we spoke to last week, very happy because this idea of distraction has been a significant one >> i would love to move on to the broader mark we saw the futures initially looked like we were going to have an up open let's call it a bit mixed now. of course, we're in the midst of -- we begin the week with the markets in the midst of a three-session losing streak. that was of course after we got the rate hikes last week and the comments from fed chair powell dollar also a lot weaker, we should point out >> christine lagarde >> yes. >> going for maybe three 50 basis point hikes, which would

say, okay, we don't really even care about growth. >> yeah. >> i think that mattered i also think obviously the bonds started going down in price, up in yield but you know what, david, i get the sense that, look, as long as wages are even stable, that's not enough means more people need to be unemployed which is a tough call we had paychecks this week small business is a place where you would like to see weakness, even though i think we never ourselves want to see weakness >> even if goods inflation comes down, wage inflation, that differential - >> not what he's looking at. >> when you say he's not looking at, he's not looking at goods. he's looking at wages. >> my thesis about tech, you're right. tech is a portion of the country, but not really what he wants. i hate to say this, i think he wants bankruptcies i think he wants people thrown out of work.

this is very volker like. he was the most hated man in america in the '80s. he was the most hated man. so i worry about - >> inflicted a lot of pain to wipe out inflation >> speaking of pain, mike wilson delivers more pain >> what did mike wilson say today? >> talking about 3,000 on the s&p, which is -- well, we know that would be pretty let's just say suboptimal by the way, david. coston comes out against the best performing group, which is the industrials. david kostin from goldman. so you have a situation where the long odds are out for even the few areas that are working and i don't know i think that people have gotten too negative, is my take then this morning i'm listening to someone, speaking with contessa talking about how retail is rushing in i don't see retail rushing in. i just don't see that. i think retail focused on bitcoin. when i speak to people, they talk about bitcoin

they don't talk about anything else, which is really strange. a lot of people talking about merck. i read a piece this morning about merck. historical piece for the club. and what it reminds me of is that there are a lot of high quality companies you can just buy and put away and they have done quite well during this period, and it's not like, okay, merck is going up because of recession. no this company really has its act together >> it does, and it's also had a very good move this year, up some 42% over the course of the year >> all right, some of that is the economy softer >> some was their own success. i reported a lot on their antiviral that has done well around the world >> i do want to come back to wilson in particular because he does seem to be the ax in this marked, as i said this week. he seems to have some algorithm

staple to him. what he says and then they do, they put into action i'm looking here you know, and this of course is the key question of so many other market participants, at least the one i speak to, what will earnings look like next year have we really seen the deterioration in outlook that we can say this multiple is reflective of that he says the earnings outlook has worsened we feel more confident about our negative operating thesis. client pushback to that view has increased which we think is directly related to the rise in equity prices and the view everybody is bearish the market isn't always efficient in pricing downturns before they arrive we compare to august 20008 and uses the number of key metrics we remember that market hung in there for way longer than we thought while the bond market and fixed income was falling apart. i mean, that was fed didn't know what they were doing

>> great tactical outlook. look, the guy has been very right. you know, it's very hard to criticize someone who has been as right as he has been, but the one thing i would point out, as soon as you bring up 2008, you talk about systemic risk he said it's like 2008 but no systemic risk. no >> he's talking about it from an earnings perspective, the fact at that point in the fall of '08, you still were not really looking at what was going to be significant earnings decline >> i would watch the stock of jpmorgan i would watch bank of america, because those are the ones most at risk for earnings we saw some negative news about capital one last week in terms of credit problems, not credit problems itself, for the customers, which is very different. they're used to it they can handle it i happen to like the company very much. david, when i read this, i just say, come on you didn't need to take -- don't invoke 2008.

invoking 2008, no matter what you do, is invoking something that says you must sell right now. >> it scares people. again, i think his point is not -- >> scares you or discourages you? >> it can concern people because you're talking about a period of maximum fear >> i read it immediately i started looking, even the mighty dow, the mighty dow we call it, i.t., i read that, they call it the mighty dow but i look at this, and i say, okay, you have a real beat on things but it would have been great to say the earnings are going to be very weak, much weaker than people think, but then we're going to look it over, because it depends where bonds are. it's more complicated. but i think that your mention about algos is so true, and by the way, when this piece came out, this is when i saw the futures turn >> right, because we were

looking -- >> they were fine. still pretty good. >> looking at what would be an up open, and then wilson came out with the piece and here we are. >> the piece was kind of very like the patriots or the colts >> that was incredible i have never seen anything quite like that. yesterday was amazing. by the way, also, i know you're an american football guy did you watch the world cup final? >> no. i chose not to watch it. >> the rest of the world has a football that's different than ours and that was one of the greatest sporting events i have ever seen. >> so, i'm watching it i turned to my wife and said, i got to buy argentina anything from argentina i'll take that's how important i mean, i don't know whether they have like a kind of short -- you have to cover your short. >> i don't know what the rate of inflation is, but they were partying like crazy.

>> what a match. when we come back, we're going to talk about the eu it's charging meta with antitrust violations linked to its online classified ads service. >> and later this hour, not going to want to misthis we'll have the ceo of cosco join us >> isn't that great? >> it is great inflation, the consumer, so many different things you can learn from mr. jelinek we have talked about, we came in not that long ago looking like we were going to be up you can see what's happens since then mike wilson and the algorithms 'rba a ts.hi you ok, man? the internet is telling me a million different ways i should be trading. look! what's up my trade dogs? you should be listening to me. you want to be rich like me? you want to trust me on this one. [inaudible] wow! yeah! it's time to take control of your investing education. cut through the noise with best-in-class education resources that match your preferred style of learning. learn your way. not theirs. td ameritrade.

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scrutiny from across the atlantic european aunion regulators charging the company with antitrust violations they accuse them of distorting competition by tying the online classified ad service to the facebook social network. meta could face a fine of up to 10% of annual revenue if the european commission determines that antitrust laws have been violated they are responding. it's saying, listen, quote, we continue to work -- it's disputing the allegations but then saying as well they continue to work with regulatory authorities to demonstrate their product innovation is pro consumer, pro competitive. always seem to be one-day stories. the eu is doing this or that that said, they're way further ahead of us on a number of issues, privacy being a key one in the eu and how it relates to so many social networks.

>> i found i don't think we need to go into that again. >> no, we don't. >> i found it quizzical because of the way they determine what the punishment is. we'll take this percentage of their revenues no, david. facebook is not doing that, and the idea they're tying anything to anything, i think we would say, well, they can't tie their shoes right now. they're not tying their revenues i think that what matters, when i read that, we have been piggy banks for them, and our companies are like that. alphabet - >> alphabet has run into the eu quite a few times. again, sometimes it's privacy. it depends sometimes it is antitrust. when it comes to meta, it was a bright spot towards the end of last week. some analyst notes cost discipline, stock was up versus the down market unclear whether this sort of stops any potential momentum >> well, i think that the

momentum for faang is nonexistent. i think it's better to own norfolk southern >> you do? >> yeah. i would rather own norfolk southern i would rather own csx, u.p.s., which doesn't have the fedex - >> you would rather own caterpillar? >> caterpillar i mean, caterpillar is like, europe is going to take 10% of caterpillar's revenues they would be thrilled if caterpillar was there. john deere is a horse. that was one of the best quarters i have ever seen. you compare john deere with let's say, well, facebook, metaverse. i mean, look, i think the good news at metaverse is i don't believe zuckerberg is spending as much time on metaverse, but deere, wow agriculture is the greatest business in the word right now >> all right, think about your mad dash

that's what we got coming up we'll get to research this morning, a lot of other stocks that will be moving. one more look at futures we're about nine minutes from the opening bell you can see things turned a bit. we're going to be down, perhaps ever so slightlyt e en athop

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welcome back time for jim's mad dash. we're going to do this together because it's an area i focus on and a call from a firm we follow closely. moffettnathanson upgrades verizon downgrades at&t. >> craig moffett, he is the most thorough analyst in the group. his issue here, you know, there's been some outperformance at at&t. >> without a doubt >> and he does take issue with

how good the cash flow is at at&t i come back, david, and i say that there is no reason to reach for the 6% yield at at&t there are a lot of people out there who want yield i suggest that it's much more difficult to find, and much more disconcerting when you buy a 6% yielding stock than it is saying it's a bargain >> right >> they have already cut their dividend >> they have, so that yield is a significant yield. they have a $17 price target by the way, not much changed here they downgraded at&t but they got 17 they upgraded verizon but stuck with their same price target of $41. the $17 is the sum of the parts, jim. terminal multiple of seven times eb ebitda and seven times on consumer wire line and on from there. latin america business, anyway, weighted cost, average cost

capital, 6.1%. they get to a $17 sum of parts that's at&t. here's verizon >> they have been very good on cable by being cautionary. i just come back and say look, go buy t-mobile. i know you don't necessarily want yield, but t-mobile is on fire >> the big success story and by far the market cap leader, having surpassed them all. just this year >> 170, 180 for t-mobile t-mobile is also thinking more about the challenge to cable >> yeah. >> these guys are worried about their capital structure. >> right you're right all right. we're going toc keep an eye on those shares we have opening bell a few minutes away and that will be followed with an exclusive with craig jelinek. stay with us

welcome back we get an opening bell in about

a minute and a half. we talked about a change in futures as a result of mike wilson, the well followed strategist at morgan stanley who talks about earning outlook deteriorating and further comparison to august of '08, not from a systemic concern but from a market that is underestimating the damage from the fed in this case, to what it will mean for the ability of companies to earn as much as perhaps they thought they would in 2023, and all the uncertainty that comes along with that. >> i think the fed should play for time if you're a ceo, you're really hesitant to fire people this week or next week, the holiday week you do it in january so i think that these negative pieces are not taking into account there could be a culling, the weaker go the stronger get stronger. hence costco today, strong >> right yeah, looking forward to asking

jelinek about those things, jim. we wait for the opening bell let's get to it. you can look at the real time exchange to see if we end up with more green on the board when we get the opening bell right now. foreign press correspondents in the united states doing the honors where do you want to start >> that's the analyst breakup. endless breakup. >> fortune brands. exactly. jim beam >> it was the ultimate -- david, look, i do want to go back to something quizzical today. why did binance, which we know, we had cz on this week, why did they buy voyager which is a failed outfit i keep coming back to, is there

just this endless attempt to try to stabilize bitcoin in the face of what could be a big change in the s.e.c., an s.e.c. sweep as john reed stark, a must-follow on twitter, enforcement for 18 years. and what he's basically saying is there was a big change in the s.e.c. in that gensler has basically had it you either comply, the runway is short, he said, or now it seems like the runway would be over. one thing i think that happened, i don't know if you know hester pierce >> i do. we have had her on, i believe. >> she has been very, very anti-regulation. i think the sam bankman-fried has really changed everybody's mind about regulation. now, she gave a very powerful interview, i mean, when i say powerful, i mean troubling february 25, 2022, where she

said, she was bearish. there isn't any clarity, there's nothing in the rule making agenda that says we're going to create a registration regime, and she said it would be difficult to regulate. that's all over. it's all over. >> sherrod brown, thesenator from ohio, who was a guest yesterday with chuck todd on "meet the press" shares a similar viewpoint. take a listen. >> are you at all concerned that if government decides crypto should be regulated, it's actually given a green right to something maybe some folks think ought to be banned senator tester isn't sure it should be legal. >> yeah, i share that thought. i think, though, that what we need to do now is, as i said, get treasury to get all the different agencies the agencies so far that have stepped up the most are gensler at s.e.c. and russ bammitt at the commodities futures trading

commission that's a more narrow jurisdiction he has. we want them to do what they need to do at the same time, maybe banning it, although banning it is very difficult because it will go offshore, and who knows how that will work this is a complicated, unregulated pot of money it's been in so many ways. >> chairman of the senate banking committee. >> look, i think that powerful senator, all senators are powerful but i would point out that gary gensler, he just wants them to comply, like anyone else would comply to securities >> yep >> that's been the law of the land for years and years so i think it's something to watch. i think it's another good reason to get out of these and to worry about the exchanges because i think that if the s.e.c. does the so-called crypto sweep that john reed stark is talking about, again, this man has 18 years in enforcement, you can get back in after if you really

want to be in it, but he's not talking about a ban by any means. nats off the table all that gensler wants is to shine the light. sunlight is the best disinfectant >> sam bankman-fried may be on our soil soon. be in the u.s., yeah agreeing to extradition. >> what would that mean? >> i have no idea. maybe he actually would be able to make bail >> he is trying to confess his way out of jail. >> that doesn't work >> which as my friends who went to law school with me say it's ann ill-advised strategy >> there's mr. bankman-fried, perhaps back on these shores >> can we talk about jane street first? >> you need to explain what it is to people >> it was always considered to be the hardest hedge fund to get a job at because everyone is so brilliant. before we criticize everybody who gave money to sam bankman-fried, you have to

understand, you probably thought they vetted him. >> what's the connection >> he worked there let's say we all feel that everybody was not showing any diligence when they put money with him well, i think that it's one of these things with the imprumater of jane street good gave people confidence. >> more than that. said oh, my god, i have a chance >> those guys hired him and he worked there that means he's genius listen, nobody is disputing he may be a very, very smart man. >> but - >> but that doesn't necessarily mean when i do my due diligence, i accept the fact he's very smart that he is very ethical. >> i can't agree more. i would like to look into anyone who backed him >> the ceo says there were no records of anything. what did anybody ask for i don't give a pass at all, at all to any of these vcs. they have a job to do. they have investment committee

meetings what were they doing >> i am coming up with any reason i can for the lack of rigor of people. can a sequoia be a biography that was taken away. i think the world of sequoia, i think they're fabulous, but there are people who can say, i was at jane street, give me money, and they wouldn't ask as many questions as otherwise. >> you're right. i want to get back to our markets, to news this morning. m&a news acquiring aerojet rocketdyne if you thought this company was once going to be acquired, you're right lockheed martin had a deal to acquire it until it was opposed by the ftc it was february of this year when in fact they terminated that deal. that is lockheed, all sorts of tumult on aerojet rocketdyne's board. there was some real drama.

at the end of the day, they come back with another deal here. $58 a share in cash and they expect to close in 2023. i would note in the press release itself to those who might worry, even though the concerns here on regulatory are not high, they say, jim, we have heard the dod leadership loud and clear. they want high quality, innovative, and cost-effective solutions to meet both current and emerging threats and they're relying on a strong competitive industrial base to deliver those solutions. >> i think he is a very smart guy. i'm not in the military nor am i on the ftc or part of the a antitrust outfit >> just a guy on tv who wears a nice tie >> thank you good luck. good luck destroying your stock and also doing a deal that was already rejected

>> wow >> there's no -- what the department of defense has told me over and over again is we want competition competition. >> in particular in this key area >> right so the idea that they -- david, look, why not? what's the break-up fee? i don't know it was such a good company i recommended it over and over again. this is not what i wanted to see. >> interesting well, maybe we'll get some questions in there then, because he's going to be -- he will be joining us at 10:00. speaking of questions, i know you have a few for the ceo of costco take it away >> thank heavens we have something that is so important and so bright. okay let's bring in one of my absolute favorites and big, big position for my travel trust, craig jelinek, the ceo of costco it's a joy to have you on. tell us what is hot this week for christmas. >> you're much too kind.

actually, probably some of the things that are hot is playstation, thing like that gaming is still relatively strong out there apple is still strong, although there can be some issues getting product at the moment. but particularly phones. but overall, it's probably not one of the most exciting christmases i have ever dealt with and i think that has a lot to do with the consumer being a little bit careful going into next year >> well, let's talk about the oddity of costco and costco's product. i once -- i once talked about on air the trade down with kirkland and i was quickly upgraded to talk about it's a trade up, which i always agreed. anything that is the name of a company, and kirkland is your name, makes me feel we'll have -- rich galanty was right

to say bad things about my view. how is kirkland brand doing versus the name brands >> kirkland signature continues to grow market share on everything that we sell. you know, it's our brand, one name, one brand. we put it on everything from alcohol to luggage and it continues to take market share as we continue to figure out how we continue to lower prices in that brand our kirkland signature is one of our real strengths in our company. and for the consumer >> i want to go back to something you said about apple and inability to get product you have got some fantastic operations in china. you also have been, i think, the number one retailer when it comes to safety for the people who work at costco how are you rationalizing what's going on in china with your commitment to the safety of people who work at costco? >> you know, one thing about

china right now is they have relaxed some of the restrictions over there, but right now, covid is on a real rise in china and it's affecting our business over there although they have not shut down the shanghai yet, they're continuing to recommend people stay in while covid is moving forward over there so it's been complicated in china. i'm concerned about what happens to china next year in terms of factories and things like that you know, a lot of product, whether you like it or not, continues to come out of china, particularly in the nonfood merchandise, so it could be a problem going into next year >> speaking of next year, craig, it's david in answer to jim's first question, you said just now,th consumer is being a little bit careful going into next year just give us a little more sense

as to why you say that, what you're seeing, what your expectations are about that being a little careful >> well, one of the things we're seeing, although we're selling a lot of tvs, our tv -- when i say a lot, our tv business is up, but only in units, not in dollars. so some of the real hiring tvs we don't see selling at this point. furniture, which was one of our strengths, is relatively flat. we're not seeing big increases in furniture you also have a much higher cost of goods in furniture because as you know, when this stuff started rolling, your container costs were much more expensive coming out of vietnam than they are right now. what's starting to happen now, which i think is going to help deflation, is that merchandise now starting to come out of asia is going down in price because of the container costs are starting to drop significantly from where they were six months ago and indeed a year ago. i think that's going to help us

in terms of deflation. i think right now, you know, unemployment is still in a relatively good place, but every time you turn around, particularly in some of the technology jobs, people seem to be getting laid off. and i think people are saying, wait and see, and let's see what happens on into next year. i'm not an economist that's strictly an opinion our food sundry business, our fresh business, our travel business continues to be very strong >> is there any way you're positioning the company in a bit of a different way than you have typically because of your expectations and what you're seeing for next year >> i think we're being very careful in terms of what we buy in jewelry, televisions, and probably furniture and maybe relatively careful next year of what's going to happen in apparel. >> all right, so i have got to

ask you, craig, mr. glancy on the last conference call, the cfo, said that if people raise price and raise price and raise price, your suppliers, and then you start seeing that there are fewer reasons to raise price or even that they should lower price, then costco will act as the arbiter and say, lower those prices have you begun to tell some of the suppliers, given the fact that things have eased, say, with containers and supply chain, it's time for you to cut prices to us >> absolutely. and that's continually going on during covid we'll continue to do that. one of the things about us also that we have a limited selection of skus. we can also figure out how to negotiate with a lot of different suppliers. we're working hard to continue to bring prices down and that's what we do you pay to shop with us, and our job is to lower prices we're the price police >> you are the most, i think the

most powerful and aggressive force in retail in that you have basically said to big companies, hey, listen, if you don't do this, you don't have to sell at costco and everyone has to sell at costco are we starting to see some things come down i'm trying to gauge the inflation rate in the country, at least for goods given that you have tens of millions of customers who know that you are going to be the price arbiter. >> i think you're starting to see prices come down on certain things you're starting to see that lumber is starting to come down. one of the problems that you have with even wheat prices are coming down. if you look at eggs, they're not coming down, but that's a whole different issue. that's based on the avian flu right now that's taking its toll on flocks. you're going to see eggs increasing over a period of time that has nothing to do with covid or anything else bacon will start to come down, the price of pork bellies is

coming down. it's things that may continue to go up a little bit, you know, detergent, chemicals seem to be going up a little bit for detergents, and also some of the paper goods are starting to go up because of the cost of paper. so i think you'll balance it out, but i see in my opinion particularly of just supply and demand, you're going to start to see prices start to slowly start to come down after the first of the year again, that's an opinion i'm not an economist >> that would be terrific. >> what will still be an issue is labor >> now, let's go in there. >> labor, yeah >> you historically have spent a lot of time telling people, and i think this is correct, that it's just you have to hire a new employee because you have to spend so much time training them, they make mistakes you have the best retention of any retailer in the country, you also pay the best and have the

best benefits. why would you have to worry about employment unless there are so few people out there that when you have someone retire, you need -- and you bring in someone new, they're hard to find >> that is becoming a problem as i say. it's still very popular, not so much a problem for us in the retail industry, but one thing about the retail industry, it's not a job that you can work from home it just doesn't work that way if you're in the brick and mortar business we have to continue to look at our wages, look at our benefits, and continue to make sure people want to come here and have careers in the retail industry >> wow >> okay, mixed picture, inflation always great picture, costco, and fantastic to have you, craig jelinek thank you, craig >> you guys have a great holiday. thank you. >> you too >> you too great to have him.

>> when i was -- >> the wine brand. >> they had a bottle for $78 that i just paid $100 for, and very good wine i said to rich glancy, you must lose a fortune on that he said do you not understand? we're about volume, not about price. i loved it because it shows you why costco is the bargain it's a membership club i did not bother to ask whether they're going to raise membership fees because they never say that i didn't bother to ask about whether they do a special dividend because they said if not when make those points that these are wasted questions, but the inflation questions were troubling for me because i wanted to hear - >> a lot of product both good and bad, and their view of the consumer, a lot of interesting stuff in there as a reminder, you can get in on the cnbc investing club with jim. sign up, find out more cnbc.com/jointheclub or point your phone at the qr code on the

screen let's give you a look at the bond market. take a look at how treasuries are faring this morning and our bond report. you can see yields up, two-year at 4.28% well ahead of the ten-year we talk about that inversion a lot and what it means. we'll be right back. from one company committed to building a world that works, to three that will focus on a future that does too. this is ge healthcare, creating a world where healthcare has no limits. this is ge vernova, helping generate and move the energy that our world needs. this is ge aerospace, advancing flight for future generations.

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downgrading waste management free cash flow growth remains negative and i just want to say i did a conference call last week about five mistakes and good things i did aspart of the investing club one thing i left out is i sold a stock based on the same story, sold it 35 points. so all i'm saying is waste management is a darn good company. i was worried about free cash flow so i dumped it. and jim fish, who runs waste management came on the show and said, look, everything is pretty good i don't think this is a piece i would follow i think that waste management is the class of the field i think the industry is doing quite well and i think that you're getting a very rare chance to buy a quality stock down a great deal. what do we have on mad tonight? >> i'm still following this -- i

know it's a tiresome thing but i am going to talk about the crypto, the s.e.c. croack down i see coming because i know enforcement has been eager -- >> it's an important story don't apologize for it, it's an important story. >> one of the commissioners have been making it difficult for gensler to take action i think that commissioner has been now taken out of the equation and gensler is going to say get in compliance or get out if you're in the stocks, including coin base, it could be ill-advised. >> continuing a lot of focus on binance. we got a really good, i'll take that coming up the ceo of lfree harris on the attempt auitocqre aerojet rocketdyne >> i like the company itself

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the street." breaking news from the national association of home builders, builders senltment dropped two points to 31 in ecember. that's a miss. the street was looking for a one point gain, it was 84 last december when mortgage rates were less than half what they

are now. anything below 50 is considered neg negative this is the 12th straight month of declines in the sentiment survey, the lowest reading since mid 2012, but it is the smallest drop in six months the builders noted given the recent drop in mortgage rates the index may be near the b bottom sales expectations in the next six months increased four points to 35. sentiment was strongest in the northeast, weakest in the west where prices are highest and the higher mortgage rates are pointing to weaker affordleability. 60% of builders are using incentives but with the construction costs up more than 30%, only 35% of builders reduced home prices in december, down from 36% last month david. >> diana, thank you. good monday morning to

everybody. welcome to another hour of "squawk on the street. live on the new york stock exchange a quick look at markets. we are negative across the board. did appear coming in that we would start with a rally perhaps some of that changed with negative commentary from strategist mike wilson. >> we're 30 minutes into the trading session. three movers we are watching this morning we start with at&t getting downgraded at moffett nathanson, saying it's time to sell the stock, shares down more than 1%. moderna getting updated to buy you can see those shares are up 1% and l3harris buying aerojet rocketdyne for about $58 per share in cash. you can see shares of l3harris

are down about 3.5% right now, a aerojet rocketdyne up almost 1%. the ceo will join us this morning. >> from a risk arbitrage takeover perspective, people think lockheed martin was presented from doing the deal. is l3harris a different buyer and getting an easy pass from the regulators >> is anybody getting an easy pass from the regulators right now, which is a key question lockheed martin, that was a vertical integration lockheed martin was the largest buyer of aerojet rocketdyne motors

and it is the last aerojet rocketdyne is the last stand alone rocket engine maker of heft supplying into the d.o.d. and nasa as it stands right now because the main competitor was taken over a number of years ago. so seen as a key strategic national security asset that being said it's had a tumultuous year with the lockheed unravel to start the year and then a big dramatic, very public board fight, proxy fight that happened through the middle of the year with the ceo eileen drake basically emerging the winner from that and then a ton of supply chains with raytheon's greg hayes has been vocal about that aerojet rocketdyne largely has been seen by wall street as an

entity that was going to need to be absorbed to run more efficiently, have more scale, deliver, but it is it is the ski strategic national security asset and speaks to the need for a robust defense industrial base so it remains to be seen if the ftc will go forward with this. l3harris doesn't have a lot of overlap with it. >> and those taking comfort from the second paragraph in the release they talk about hearing from the d.o.d. leadership loud and clear they want cost-effective, high quality solutions. >> l3harris is looking to become the sixth prime. chris has been vocal about this, including on our show in past interviews so the argument that company, and i would expect him to today to likely make, this is another acquisition, their second in this quarter they announced after a military communication

segment announcement that this is going to make them more competitive and create, again, a more robust defense industrial base we'll getinto more of that later. stocks trying for their first gains in four days after two straight weeks of losses so far not prevailing. not successful joining us now morgan stanley strategist lisa, i'll start with you. as david mentioned perhaps this note from mike wilson adding to negative sentiment for the market today expectations around earnings recession, how deep that could go next year, what that means for how deep i guess further selling could go for equities as well >> yeah, look, i think we've been, you know, blowing this horn for a while talking about the reality of moving from living in a nonmina

world to living back in a more real world what we mean by that is profits get reported in nominal dollars. so over the last two years company top line and bottom lines have been flatter, not only by volumes that have been benefitted from the fed and the fiscal government and fiscal spending from the government, volumes have been flatter, but they've gotten pricing and they've gotten pricing of 7 to 9%, which is where top line inflation has been as we move into 2023, we see that fed policy probably is working. all of the indicators are suggesting that we are getting slowing, particularly on the manufactured goods side of our economy. so you're going to lose volumes at the same time you're losing pricing power and it's going to be really, really hard to hold

margins and to make some of these profit forecasts that are out there. >> i want to get into that more, but first, brian, do you see it the same way as we head towards 2023 >> i think we have near term challenges but not really. the market tends to bottom well ahead of the economy so this market was already down over 25% peak. now in the near term do we have to retrace a bit of that sure but ultimately what the market is going to look to is a more normalized growth environment. that typically sets the stage for the next recovery. investors that wait for things to look good tend to miss that it's all about whether conditions are going to get better or worse relative to expectation. the market is already priced in a decent amount of pain. on the point about earnings, yes, earnings do go down in a

recessionary environment, call it 15% or so, but multiples tend to expand. as interest rates expand you can see multiples on stocks come back up. so could you see a move down back to around a 3600, yes that would be an earnings recession, multiples creeping up some but from there we believe that the recovery commences as the fed shifts to a more -- a pause or at some point a more accommodative policy >> right lisa, kind of refreshing to hear a bit of a bull thesis out there. curious to your thoughts to what you just heard >> i guess we couldn't just disagree more. it really comes down to valuations, right. this market is either pricing, you know, one, two, or a third scenario either, you know, we're pricing this idea that we get this soft landing and, you know, the fed

immediately cuts, which we just don't think is particularly plausible. and we're suddenly off to the races. or more realistically, we get earnings misses. that means that your actual, you know, earnings, your denominator goes down and while your price earnings multiple could go up the reality is you're in the middle of a recession. and during a recession, consumption goes down and forecasting the future is really, really hard. so i don't think -- and i don't think history would suggest, that markets start a new bull market really on the first up tick in unemployment because once unemployment starts getting going it tends to be correlated and that means consumption goes down in those out years. so i don't think that this is a market that's going to rally if

we get that type of uncertainty. >> brian, given your thesis what would you be buying right now? >> i want to make a point on that if you look at the four of the last nine recessions, equities were positive. if you go back and look at any time in u.s. history with the exception of '08 when inflation peaked and came down, stocks have been positive over the next one to two years so it's always about getting -- you always hear people getting negative on the macro environment when the market has largely priced that in investers who wait until conditions look good miss recovery in the near term do we have challenges yes. volatility persists until there's greater monetary clarity the we're not there yet. if investors are worried about the next 5 to 10% move in the markets they want to be more defensive here

but it's about positioning for the recovery trade and in the recovery trade you want to own risk credit. i believe credit is already compensating us for what a default cycle would look like and you want to lend into more cyclical value assets as long as nondollar assets. >> love a good bull, bear debate maybe a little asterisks given the concerns but thank you for joining us with the dow flirting with positivity right now, up about 15 points. >> we'll take it the latest around ftx, sam bankman-fried the man who founded that company and led it heads back to court today. kate rooney has the latest for us. >> reporter: sam bankman-fried just arriving at a bahamas courthouse in the last few minutes. a source familiar with the matter tells me he plans to surrender himself to the u.s. extradition process.

a quick pivot in his legal strategy last week his lawyers said he planned to fight extradition to the united states. he's been in the correctional facility in nassau since his last court appearance since last tuesday. i'm told the change of strategy could be the conditions in that jail, a report of overcrowded, sanitation issues, some inmates there complained of a lack of medical care and food. this change here could speed up the pace of a trial. a source telling nbc news that subject to officials' approval he plans to go straight to the airport today. had he fought the extradition i'm told it could have added months or a year to the legal process. the next step is getting him back to the u.s., he'll be

arraigned and the trial will you kick off from there. last week he was indicted in a u.s. federal court on eight charges. he's also facing civil suits from the s.e.c. and cftc attorneys for sam bankman-fried declined to comment. we should be hearing more from the hearing today. >> if he does get extradited here, does he have a chance to be out on bail in a way he doesn't seem to be getting afforded in the bahamas right now? >> that's what he's fighting for in the bahamas, denied bail, they mentioned he was a flight risk you have to wonder if there's better any chance -- it's hard to handicap but if he were allowed to go out on bail here, it doesn't seem like what we heard from the bahamian judge. but it does seem like the jail conditions are one thing, this

speeds up the trial, other legal experts say this maybe a way to get federal prosecutors on their heel or just a capitulation and the idea they thought they might not win not getting extradited to the u.s they thought it's going to happen eventually we might as well go for it but it's speculation based on what legal experts are thinking here and we'll find out today. >> thank you, kate rooney. as we head to a break here, a road map for the rest of the hour it includes elon musk polling twitter users asking if he should step down as the company's ceo. that poll giving tesla shares a bit of a bund this morning. meta shares sliding over anti-trust concerns from the eu. we have those details. and don't miss our interview with the ceo of l3harris on the deal to buy aerojet rocketdyne,

we have a big show ahead, don't go anywhere.

elon musk well, making some noise on twitter, what else is new. this time it was polling users if he should step down as the company's ceo. with over 17.5 million votes, 57% said yes and while musk said he would abide by the results, he's yet to comments since the poll closed earlier this morning. keep in mind that musk established earlier this year that leading twitter was temporary.

he said on november 16th in testimony expect to reduce the time at twitter, find somebody else to run it it was back in may when i reported that, based on what he was telling investors, remember he raised 7 billion in equity, he was telling them i'll be ceo for a few months and then i will find somebody to run it. so this is not unexpected that would be the case. that said we don't seem to have a group of people yet we're aware at least that might be seen as the potential ceo. >> we haven't heard any names floated, but that's also not necessarily that surprising. what is interesting is the fact that tesla shares -- i realize there are other headlines more direct to tesla are also in the mix here but tesla is trading slightly higher up half a percent, presumably in part on this news and we know that tesla investors and wall street analysts have been concerned about twitter becoming all consuming for him or a distraction

you saw a downgrade. we'll get into that in a moment as well this morning around that shares are down more than 50%. they've more than halved in just the past three months at tesla and for better or worse it's a proxy for the twitter headline. >> since he made the offer they're down 55% and since they closed the deal down 31 plus percent, just a couple months ago. that's all he's been ceo for, seems like a lifetime. staying with elon musk we had gary black on last thursday and he said he would like to see mr. musk refocus on tesla, adding pressure from the board, at least in his opinion, is likely mounting take a listen. >> what we would like to see is that elon musk bring in a ceo for twitter, who's from the social media space give up running twitter and focus, again -- refocus again on being 100% tesla's ceo i believe that the board is

probably pressuring him to do that because i can't imagine a board letting him spend so much time rebuilding a company from the ground up. >> let's bring in collin rush, from oppenheimer, he downgraded tesla after naming it a top pick for 2023 just last week. what's going on. i assume if he steps aside as ceo you would be encouraged for that as well. >> it's about rebuilding trust for us what happened last week, the sale was one element and i don't think we were surprised to see him sell a few more shares to fund this enndeavor but the engagement with journalists and banning folks without consistent methodology of who's getting banned and why was a problem for us for someone working towards free speech from his own words but really doing damage from his brand, not his personal brand but also tesla

which is linked to him so for us, seeing that was a bridge too far as we go forward, obviously he has work to do to rebuild that trust for us, and rebuild the trust in the brand and the mission that tesla's been on in terms of climate mitigation and evolving better solutions for people through technology. we need to see a lot more work from him and that company to get back on board here >> right but i want to be clear you're still positive on the fundamentals of tesla. if he were to abide by the poll and say i'm done as ceo of twitter, would you change your rating or is it going to take a while for you to get that so-called trust back >> it's going to take a little bit of time. we see tesla as well out in front of peers, two to three years of technology advantage, we think it's longer than that, maybe as long as four to five years. and the challenges are around material science those are long, hard problems to solve tesla has done a tremendous job

around that and massive data advantage for ai and self-driving vehicles, continuing to extend that lead but the backlash from brand and consumers is substantial, and the forray into twitter is not helping that and as we go into more competition and people have more choices, we think there's some real risk around what that means for tesla. we continue to be conservative versus our peers on units for 2023 but we'll see how it plays powerp out. we're seeing pricing increases from people, including ford, in the last week. and we think tesla has a tremendous technology position but rebuilding the trust they've gotten from the brand is going to take time. >> when you talk about brand damage, have you calculated it quantitatively speaking how does that bake into your downgrade today and your estimate for the

stock in the near term >> you know, it's still very fluid in terms of what that looks like we're looking at sell through on the vehicles and seeing shortening the times on specific vehicles we've gone from having a six-month lead time to in some cases a couple of weeks in certain geographies. that's where you see the potential impact on earnings is really about that pricing and their ability to lever, you know, availability of supply into the higher prices and as they see some of the availability change, the price leverage becomes diminished. so i think we'll see it more likely in the first half and we expected some of that and we take a conservative view on pricing, a solid 8 to 10% below what's advertised on their websites because we go forward, we can see some of that eroding and one of the things we're watching for is incremental marketing spend the company has been impressive in terms of their ability to sell a lot of vehicles without spending a lot on marketing,

next to nothing really as we see them spend on marketing we'll know they have a demand issue and that's going to be a real problem for the stock. >> again, to be clear, you're citing those reduced lead times and other things you just cited as supportive of your backlash from consumer contention, right? you don't have specific data beyond that, though? >> you know, it's really hard to collect the brand data and what that is. there's anecdotal evidence we're hearing from talking to folks but the actual data takes a while to emerge in terms of what the real brand value is. >> colin, thank you. appreciate it, particularly on a day you downgraded the stock. >> could potentially argue that buying twitter is the ultimate marketing spend. we'll see. after the break talk meta under pressure stocks down about 2.5% as the eu cus e company of violating anti-trust laws. don't go anywhere.

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at the stock's performance overall which we know hasn't been good -- >> been very rough that was a two-year chart, just barely up off the lows it's not materially too different from the path that's been taken by others such as amazon and netflix every one of them has something specific going on, right so it's netflix hits a wall in user growth, contend spend amazon pull forward in demand. whereas meta their perception is, it's a little more in the company's own control because it is the heavy spending on metaverse compromising earnings forecasts looking ahead. take a look at the valuation over the last decade of meta relative to alphabet as well as the s&p 500, and you show meta just cracking to a significant discount to the overall market that's if you believe the earning path for investors i think there's a debate whether it could be a value trap because earnings by

the way are only supposed to spring back in 2024 not even to where we got to in 2021. so it's a long period of earnings, you know, plateauing at best. and then, you know, we just don't know if it's going to be a fruitful investment cycle for them we know the issues and it creates this idea there's no hurry perhaps to buy whether that's right or wrong, that's where we are. >> right sort of the long period of investment as you speak with a potentially low multiple but justified because of lower earnings he's not talking about the metaverse becoming a true commercial enterprise until the end of the decade, right >> it's remarkable he's willing to stand behind that multi-billion dollar effort with an uncertain payoff. there's two ways to think about it one is it seems risky or aggressive or reflects a little bit of desperation strategically about their core business and of course an inability to buy anything which i think is behind it ll. but on the other hand, it shows

you that they could dial it down and make shareholder friendly noises and do what a lot of people on the street are saying and maybe it wouldn't be that bad for the stock. >> all right mike santoli, thank you. >> time now for news update, contessa brewer has it for us. >> thai navy ships are searching for 30 missing sailors, their ship sank in high water 36 hours ago. the high water has subsided somewhat but apparently still it's a danger to the smaller vessels out there. the house january 6th committee will gather pick cli today. members are expected to vote to urge the justice department to pursue at least three criminal charges against former president donald trump related to the riot they plan to refer several members of congress to the

ethics committee fans are hitting the streets to celebrate argentina's historic win in the wkt. those celebrations erupted after the argentina's men's national team won in a penalty kick shootout lionel messi scored twice in the match in which would be his final world cup appearance headed in he said it's probably my last world cup. now that he's won, he's backtracking i want to play a few more times for my team as a world champion look at the other greats, michael jordan, brett favre, people who are champions don't want to retire, do they? >> he's riding the wave of winning. that was a game yesterday. that was on all of our televisions in our house yesterday. thank you. >> see you. after the break don't miss our exclusive with l3harris ceo

chris kubasik. we're back in two.

welcome back to "squawk on the street" defense contractor l3harris agreeing to buy aerojet rocketdyne in a cash deal valued at $4.7 billion after lockheed martin's attempt to buy was abandoned after regulators sued to block that deal later this year today shares of l3harris and air o aerojet are moving in different directions but joining us on set is l3harris' ceo chris kubasik great to have you back tell me how your deal to acquire aerojet came together. >> first of all, morgan, i think this ties in perfectly with the strategy i laid out four years ago, starting with the merger.

we wanted to build a company to provide more competition for the department of defense. so the fact that we're growing organically and inorganically is not a big surprise this is going to benefit the customers, the share holders and the employees. the customers want to strengthen competition and bolster the defense industrial base and this acquisition does it. aerojet rocketdyne being part of l3harris we have the people and strength to invest, and it spurs innovation from a shareholder perspective, this fills in a gap in our portfolio which are the weapons systems and i think when you look at the budget, you look at the national defense strategy, this is a growth market. we're going to add 7 billion of back log, 3x their annual revenue, it's on eps, cash, and

it makes a lot of sense financially. and the employees can't wait to welcome the 5,000 employees to l3 s l3harris we're a technology company, they're a technology company focused on security for the u.s. and our allies it's going to be exciting. >> i want to get into more of what this means in terms of a further portfolio, especially since space has been a big outsized growth area what makes you feel confident you can get the deal done in front of the ftc when lockheed couldn't >> that was two years ago, different time, different company. i think the government is going to look at four things number one, does this strengthen competition, and it does secondly they'll say does this bolster the defense industrial base, this company will have the strength and power of l3harris behind it, it does they're going to look at us and

see these are two new markets we're getting into, weapons system, space propulsion and then look at the concept of merchant supplier. l3 was formed 25 years ago as a merchant supplier, it means will you sell your products to whoever you need to. aerojet has that business mold we're going to maintain it we want to sell these to the primes, oems, end user so when you look at those four criteria it makes sense. there'll be a review, they'll respond we'll respond. i respect the process and see how it plays out in 2023. >> the merchant supply is key. i think of other ceos at other defense primes that were vocal about the last with aerojet. who said aerojet needs adult super vision given the fact that the company is going through a

lot, has come through a lot. how do you apply adult supervision which has been an issue for raytheon and many others. >> i reached out to raytheon, lockheed and all of our customers last night so we've already been in contact and they understand our strategy and what we want to do i think the entire industrial base is struggling with supply chain challenges it's well documented and i think we have the processes and the controls and the people that are going to be able to help improve the performance of this company. i go back to the l3 and the harris merger. we took out over $600 million of cost, we have common systems, common processes we understand the industry, operations, program management and i'm excited to get the deal behind us. >> talk about the portfolio mix and what that means in terms of future earnings. i ask that because a big portion of l3harris is short cycle

business, 100% long cycle business for rocketdyne. which means some of the revenue opportunities on the high rowson for aerojet are going to be coming down the pipe in a couple years, things like nuclear deterrents, missile defense of the homeland the new vulcan rocket which has a huge launch deal with amazon's satellite cobnstellation, nasa' artemis. i guess i just laid it out, but how do you balance that portfolio versus the amount of debt you're taking on with the acquisition? >> great question. so when i look at our portfolio, will 3 harris is known for awareness with our radio comes and networks and sensors we have sensors in space, air, maritime and ground. so the missing piece was the

weapons. and then a couple months ago we announced via sat, connecting all that so i feel real comfortable when these two deals are behind us we have the portfolio and the right domains, right areas, i wouldn't anticipate doing anything for several years and, in fact, we have some noncore assets that i'll probably sell in '23 when the financing market turns around, pay down the debt. that's how i see the next couple of years playing out. >> if i can come back to the anti-trust question. you mentioned you spoke with raytheon, i don't know if it was greg hayes or management team there. they were one of key opponents of the last deal, lockheed martin, did they give you assurances they wouldn't give you trouble here >> we exchanged emails, gave them a heads up, he cong congratulated me and said we'll get together in the future to

talk about this. he talked about the importance of getting them these systems to meet their commitments i'm hoping he'll be supportive as will others >> i'm sorry, go ahead >> go ahead. >> a quick follow on the financials their margins are below yours, they're at 14% is that an opportunity to you or is that a function of their business where adjusted ebitda stands right now >> i think we have a good track record of being able to improve margins through our improvement program, the leverage of being part of a larger organization for supply chain and such and i think that's something we'll be able to work on. we're all struggling with the inflationary headwinds these contracts tend to turn over every year or two so we'll reprice them on cost and da data i'm excited about the margin upside as well. >> the annual defense policy bill just signed into law, authorizes an 8% top line increase in defense spending

when would you expect to see that increased money, that increased demand result in sales and how does supply chain factor into that since i know you, along with everybody else in the industry has been dealing with those issues >> we need to get the omnibus bill passed because we're still in a continued resolution. i'm hearing that could happen this week. once we get the appropriations approved, 75, 80 days into the year, later than any of us like. the only people that like the continuing resolutionmore than industry is our customers. so we have to have a budget. when that happens i think awards are going to start flowing we have the short cycle business we can see some things in '23, the longer cycle business thereafter so 8% is great you and i were at the reagan national defense forum as you recall i think administration has done a great job laying out the

national defense strategy, aligning a budget to that strategy we need to get it approved and then the money can flow to the industry and down to the suppliers. >> final question to you, you pointed this out to me i'm going to bring it up on tv you took over at l3 in 2018 as ceo. you're joining me here on set at the new york stock exchange when that happened. since then you merged with harris, bought vie owe sat earlier this quarter and earlier this year struck the deal with shield capital to develop future technologies as well what is the future look like for l3harris what are you working towards and are there more acquisitions as a part of that future? >> reporter: great question. it has been a busy five years now that i reflect on it '23 is going to be very straightforward. we have to focus and execute on the programs that we have. we have three separate segments. those leaders are going to focus on the customers, strategy, and

their programs we're going to get viosat integrated, that should close hopefully in january of this year, nsa has approved it, uk approved it, just waiting for australia. we'll integrate that get aerojet approved and start that innovation and then make divestitures to pay down debt. i think '23, '24, '25, focus on execution, grow organically, keep our investment grade rating and see where we go beyond that. we're having a lot of fun and it's just great to be on stage with you and david again >> chris kubasik, ceo of l3harris thank you for joining us. we'll give you the results of cnbc's millionaire survey checking out the biggest laggards on the s&p. wynn reports leading that group

lower this morning we're back in three.

i think we're being very careful in terms of what we buy in jewelry, televisions and probably furniture and maybe relatively careful next year of what's going to happen in apparel. i think right now, you know, unemployment is still in a relatively good place, but every time you turn around, particularly in some of the technology jobs people seem to be getting laid off. and i think people are saying wait and see and let's see what happens going into next year >> that was costco's ceo, he joined us last hour. morgan, i asked him, he said the consumer is being a little bit careful going into next year and i asked him to give us a little bit more and so that was part of that answer. you know, it wasn't negative but it certainly wasn't positive either in terms of what he was

talking about. some things being disinflationary that he saw and what he saw in consumer behavior. >> and speaks to what we saw in consumer confidence. the idea the con susumer is getg more cautious but also lapping all of those stimulus payments and everything else that the consumer has been sitting on on all of that spending power we talked about the last couple of years with the consumer too and doing more things like travel, there's still strength there as well, versus staying at home buying more tvs, although in my house, we're buying more tvs because my toddler likes to break tvs. >> he has a record, it's four and counting. >> i don't want to say it outloud. it's four televisions. >> he didn't like tv >> he loves to wing the remote control at the tv. also interesting what he had to say about container costs

coming down. >> container costs dropping significantly from where they were six months ago and a year ago. he said that will help us. >> disinflation. what we've been talking about. >> yes exactly. >> as we head to break let's get a check on the markets right now. it's a mixed picture dow up slightly 26 points. the s&p is down about a quarter of a percent, 3841 is the level. and nasdaq down about .8% to start off this holiday week.

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welcome back to "squawk on the street" i'm dominic chu. stocks mostly mixed this morning to start the trading week. though some of the tech focused areas of the market are weighing on things right now. for example, within the communications services sector we are seeing notable declines in several big media companies including warner brothers discovery, that stock down 15% in about a week as investors are

trying to digest cost cutting efforts. disney, fox, paramount also among the laggards this morning. keep an e eye on the media stocs today. stay with us, there's more "squawk on the street" after this commercial.

welcome back cnbc out with its new millionaires survey, part participants feeling bearish the results. >> millionaires own 89% of all individually held stocks in the u.s. that's why we poll them and they move markets. right now they are bearish the majority of millionaire investors say stocks will be down double digits next year, that's according to the survey 56% expect the s&p to drop more than 10% next year with a third expecting declines of 15% or more last time they were this bearish was early 2008 during the financial crisis when asked about the biggest threat their wealth, stocks ranked at the top. few plan to buy stocks next year

and they're holding more cash. about half have more cash in their portfolio than they did last year. also an interesting optimism gap between younger and older millionaires 81% of millennial millionaires expect assets to be higher, while a majority of baby boomers say their assets will be lower or much lower at the end of 2023 guys >> how does that compare you know, i -- do we have anything to go by in terms of previous polling we've done? >> yeah, so we've been doing this for eight years, david. and again, this is by far the most bearish we've seen them you go back to similar questions in similar surveys back to 2008, they're generally much more optimistic than retail investors and even institutional investors. so this bearishness given that they own 89% of individually held stocks is worth noting.

>> it certainly is robert, thank you. robert frank as you can see, the markets have deteriorated a bit. we came in this morning with the expectation we would be higher mike wilson the well known strategist at morgan stanley had a thing to say about that, talking about earnings being weak next year that's going to do it for us on "squawk on the street. "techcheck" starts now happy monday, welcome to "techcheck" i'm jon fort today more on the street's top picks where to put your money as the nasdaq continues its fall this morning down a little more than 1% more on the street's top tech picks, yes and plus retail investors buying the dip this year and bumping their heads on the ceiling again and again on the way down while institutions get bearish who's right? we're going to discuss