>> we can look at a tiktok -- >> tiktok on the -- >> oh, yeah. not a tiktok one of those partticktocks. >> happy birthday. >> bacon cake. that's never been done before. >> wow >> start of a new trend. i think it's going to catch on. >> bacon news. we have the graphic ready to go. make sure you join us next week. "squawk on the street" begins right now. good friday morning. welcome to "squawk on the street." i'm carl quintanilla jim cramer david favor has the day off. wage growth slowing to half of the prior month's initial print. yields tick lower after europe had cooler than normal data. roadmap for jobs, surprising to the up side of december. we will get the first reaction

from the white house with labor secretary walsh later on this hour does the strength of the labor market raise the prospects for a soft landing atlanta fed president bostic is going to weigh in with us. the ongoing tesla tumble shares down another 7% pre-market after they slash prices in china once again let's begin with the better than expected jobs number for december, jim. .3 on wages versus a prior .6 revised down to 4. still, that's good >> i've been ridiculed endlessly. i know him in real life. >> and i've always felt that he would engineer something that america would like without throwing too many people out of work he has a big heart and this is what you need. like the mercedes retaining wall, what i want is the ford-150 to slow down.

that's what you're getting now obviously. it's not a number that says he's stuck. he's got to go another .25 it is a number that says -- that confirms what james said yesterday. the fed has great numbers which is it was a potential cooling rate carl, you know, i'm a football fan and there are a lot of times when you win and you win ugly. this ugly win. the i mean, it's not -- you know, to the people who want it to be zero wage growth, they're not happy. >> sure. >> and the people who want it to be maybe marty walsh when we speak to him, listen, we really don't want to slow down in growth he may be disappointed isn't that what you want look, carl, i look at the bonds. i look at the futures. i look at what the shorts would think and the shorts are going to have a tough time in the morning. by the end of the day we're going to start worrying about the earnings. >> take our eye off the macro. we have services im in an hour >> right. >> prices there could add to

that narrative >> right we get these reports and you see things like an average hourly earnings not so bad. you start looking at the granular employment and professional business services made little change well, that had been a great spur we had a lot -- these are not -- they rose by 67,000, it sounds like a lot that's lower from what it's been again, i don't think people want full stop. if you've got full stop, that's hardly any i would say instead of the futures being up, you have full stop, all of those numbers would be wrong because you'd say, holy cow, i've been buying stock at gm >> there still are firms though, jim, that are looking for job numbers to start printing negative in the coming quarters or so. >> they're going to get it if they don't -- look, if there are hard liners in the fed and they just say, look, this is not enough, they'll get what they want what i wantis no wage growth

and then i want slight wage decline. wages are $32 an hour. that's a lot if you're an employer, but it's not a lot if you're an employee i want to go back to what i said first about jay powell like jay powell doesn't want to see you making 25 if you're making 32. owe wants to see you making $32.50 not $36. >> sure. >> i did a thing last night on "mad money" about if you -- what you could do it was a basket of food, it was $55. i did the generic it was $26 i think right now he's saying, listen, if you buy the generic, that's going to push the $55 guide down i think he cares about the supermarket. i think he cares about cars. i think he cares about -- he's a very thoughtful person there are a lot of people who -- he's not alone he's not with a big portfolio. >> inflation through the lens of costco which did see a little

light at the end of the tunnel then conagra said don't say the sun is setting yet >> i was looking at conagra's numbers. i happen to think the world of shaun copp he's very good what they've done is build brand equity they've been able to raise price. you didn't have to build up equity at a certain point you're going to run out of steam. when i saw what the nice brand at walgreen was charging and then i look at the ingredients, i'm a buyer of nice. i don't want to buy the expensive stuff. people could say, jim, don't trade down, but if the ingredients are the same, at a certain point your mom brings home the stuff and you don't know the difference. >> that's interesting. reminds me of the upgrade today of tap out of cowan. go to outperform on a cheaper beer portfolio. >> i'm a big fan of constellation. we had bill newlins on last night. the stock was down look, i'll be in there buying a

ton of stock and they do have -- when you raise prices like they did, what happens if you own a bar, you get the tipoff they are raising prices and then you have no choice buying it real december was a really good month for them this thing ended in november i thought the molson piece was very important, no doubt about it carl, when i look at interest rates going down and i look at the futures going up, i do not see futures going higher and interest rates going down. it is what it is i know that's a -- the usual cliche, and i do think that in the end the megatech, people just can't stand megatech. >> yeah. >> they -- they're looking at these and they're going to say, i get to sell blah, blah, blah you know, apple didn't pre-announce and it didn't go up so now i can sell apple. there's a cohort that wants to sell at any single increase because that's what happened in 2000, 2001

you got these spikes and they were good time to sell i continue to like slowdown stocks i'm not buying conagra on a spike but if it came back in -- >> that's interesting. today morgan stanley weights their staples on overweight. are they too expensive >> i think hershey is. the i think conagra is i don't think mon dolese. >> let's go back to costco those of us who are members at costco know that means trade down they're saying trade up. we have to understand the consumer's getting wise and they do say, you know what, i'll shop at costco for a week rather than go to the supermarket for a day. these are things that the fed wants. the fed wants pressure on the brand guys they want to see bogo, the buy one get one at general mills right now they're not seek that. you're paying for a full box of

cherios. cardboard's come down. your main stuff has come down. the plastic bag has come down. how dare you keep raising prices >> it brings you to what commodities have done. worst first three days of a year since '07 for commodities. >> that's called a win. >> lumber, nat gas, now negative. >> can i just go back? his piece with sheffield was great. natural gas was supposed to destroy us we are hearing $7. we're hearing it's going to end. you know, as i walk outside without a coat, i have nat gas my guy ps&g, i don't have to do something. i want to thank them my nat gas bill is -- it's falling apart. it's as low as it's been for a time. >> 20% down for a week. >> when it's up 20% we're just screaming. when it's down 20%, we have to say, look, that's a cost almost everybody has to pay it in that country and what a win

and coal can't maintain. you start saying to yourself, nick hakins, they're trying to make profit, that's what they do he would say, what a windfall for the consumer because he wants the consumer to do well but we tend to say, oh, man, i guess that's going to hurt chevron. no, no, no, it's going to help the consumer who can then deal with the fact wages go up and it's 32. the $32 is enough. we do have, by the way, minimum wages to help influence that number carl, i like what i see. i don't like some parts of the stock market they're just not -- they have nothing to do with what we're talking about. the. >> yeah. >> the enterprise software companies -- i saw a piece today about salesforce which just basically said, you know, marc benioff hasn't fired nearly enough if you look at tab bleau. >> gutting tableau headlines are out. >> he let everything go bad.

marc benioff, i met him when the stock was at 8 18 years ago. everyone said he didn't know what he was talking about then well, we do have -- we do have work from home so it's not like marc is sitting there on the 40th floor of the tower, and i think people wish he were. he took a 10% hit in his employees. zuckerberg, 13% hit. now maybe they have to do another 10, but i will say in the interim, the shorts are going to feel some pain today. and here's something that's interesting, carl. there are shorts for the longest time we had no short base. >> yeah zwr for the longest time we had a fed put we have no fed put but we have a short base. >> which you think is long term healthy? >> yes that apple you always say own it, don't trade it you're going to be annihilate. i come back and say, i'm on my apple 14 pro and you're telling

me it will be annihilate but let me change my air pod because i'm watching my netflix on my -- you know, i mean, it is a -- it's a fixture and it's not yet in brazil it's going to move to india. think have a lot of people is it moving fast enough no why? they didn't have enough numbers. look at the t mobile numbers which were gorgeous and we didn't talk about. that's a function of a 14 pro. i see people who want me to go and say it's final to sell apple, and i'm not going to play that game because i'm not trying to sell apple. i'm trying to get people -- i want people to get in and out of apple. i wanted to sell at 125, get back in at 119 we have a cop be stitt two wednesday si who watches our show, and they're not on the desk try to -- there's probably close to 300 of them who are begging for me to sell that, tell people to get out at 124.

do you think i can get them back at 115 >> that's going to be tricky. >> tim cook, is he saying, my stock is $7 too high can we spare people? >> i do want to ask you, we talked a bit about commodity disinflation apollo's got a good chart out today. you look at what raw goods are costing. you look at transportation costs coming down. shanghai containers back to 1300 bucks. >> geez, losing money. >> is that going to allow companies and margins to handle wage inflation that is above trend? in other words, do we need to start -- are those worries about earnings revisions overdone? >> i think that one of the stocks i've focused on, i've been doing this series about what you can buy of the stocks that were bad and i look at stanley black and decker because we all know the product. it yields 48%. they had the worst problem with the containers of any company i know and the stock was at 196. there are people who are saying to me, jim, it's 78. this thing is going to break down i said, where were you at 196?

i think that a stock like stanley black & decker, which is $11 billion, it can go to 10 billion, but at a certain point i want to own it it has good management, good product. there are other stocks and there are a host of stocks that are downgraded today most of them are like, i don't know i am -- it is savant about knowing stocks i've been -- i've played the parlor game. name a stock, i'll pay the price, but there's like -- there's like 400 stocks that were created and they're all being downgraded i look at them, alburg, i wore those for about 5 minutes. oakley we served oakley at my inn but then people didn't like -- oh, toast. there was a guy toasting about doing toast at my restaurant if you pull that out, i'll pay you to take ours there are many companies that are legit companies, carl, and they are going down as fast. they're not toast, literally and figurati

figuratively. >> we'll get to a lot of research jim mentioned he has calls on boeing, snowflake, lulu and some others there. does seem to be no stopping though the slump in tesla. once again flirting with double digits as they slash prices in china and south korea by some reports. take a look at the market as we get a nice knee jerk 223 nikkei and unemployment 3.5. back to 1969 get more with nature's bounty. from the first-ever triple action sleep supplement... to daily digestive support... to more wellness solutions every day. get more with nature's bounty. if your business kept on employees through the pandemic, getrefunds.com can see if it may qualify for a payroll tax refund of up to $26,000 per employee. all it takes is eight minutes to get started. then work with professionals to assist your business with its forms and submit the application. go to getrefunds.com to learn more. i'm a vegas hotel.

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tesla's the biggest decliner prices slashed in china. a range of 6% to 13.5% that comes after tesla's delivery of china-made cars fell to 5% lowes. morgan stanley said the fact they cut is not shocking but the magnitude might be. >> china's in a recession and it's very difficult to hold price in recession this is -- by the way, jay powell, what he would like to see, a glut of teslas, people pay less for them. it's interesting to see how the economy really does work for people who only know that it goes up. when the economy slowed down in a communist controlled environment, then people just

say -- they rebel against the price. there's competition there. the. >> yeah. >> but i mentioned to you during the break, i don't like to emphasize the short sellers because that sounds like i'm capping, but i'm not i've been around for a long time he made it -- elon musk made it easy for two reasons because he was selling stock. as long as there's supply that you can bet against, this brings out real supply. now there are two believers like cathy woods who said, look, it really doesn't matter, but it does matter because price point is what determines profitability. if you are mary barra and you saw this, you're calling around. you're saying, oh, darn it cut price on our brand-new -- the hummer and it's bad for tesla. there's no doubt about it. but if china's economy picks up we'll be saying, geez, why did we use that opportunity. >> i don't know when the chinese economy is going to pick up. the cars in china are 30 to 40% cheaper than they are in the

united states. >> well, that should be -- that would normally be buy gm it's funny, when you say buy gm or buy ford with my travel trust, these are stocks that sell on five, six times earnings which means two things one is obviously they're not going to make the numbers but, second, it's just hatred and there's hatred of american car companies. hatred of american steel companies. hatred of plastic companies. hatred meaning there isn't price that people say. then we have these enterprise software companies and what we're doing, having a meeting at the middle if you are selling at 17, 18 times earnings you are now a high growth company. what do people want out of alphabet do they want aggressive growth and they want a low multiple you're not going to get both i think what people have with tesla, you had slowing growth and you have high multiple worse combo. >> it's been tough stock was 400 in the late '21.

>> well, you know, some people believe you buy and hold i say you buy and hold, that's always been my way. >> mad dash, futures hanging in there on this jobs friday. also ahead, the labor secretary marty walsh will join us with the first white house reaction to that print. we're back after a break don't go anywhere.

time for cramer's mad dash as we wait for the count joup of the bell >> deutsche bank is doing what i expected buying a hold.

this is important, carl. the reason why they want to do it they're saying, basically they have a slow joup. they're building reserves. they can't buy back stock like they used to if we have a soft landing, they're going to be wrong. if we have a hard landing, they're going to be right. i don't like these situations. the reason i don't like them, it's a roll of the dice. it's more roulette i don't want roulette. i want games where i can augment my hand like black jack. i don't want to do what they say. that said, if you're -- it's a very good description of what happens in a slowdown, which is that the banks have to -- you know, they have all these hold for sale loans -- hold for sale assets which are bad, which is what got silver gate, by the way. they also frankly can't -- they have to be more capital conscious. they have to raise after so long lowering those reserves, raise the reserves. >> right they do up p&c i think to buy,

going to 200. >> that's interesting. they downgraded just last week by a couple of firms i think p&c has been the one people like to buy because it doesn't have the biggest trading desk which have been anemic. negative note about goldman sachs today. goldman sachs, 370, 345 morgan stanley. my problem is david solomon who watches our show is saying do you believe that i'm just sitting here and just letting the chips fall he is being very aggressive in getting -- anyone's not carrying their weight is going. i once worked at goldman and there was the mortgage department did badly okay one day i went down because i wanted to see someone in the mortgage department and it had disappeared. they disappeared the mortgage department. >> that's what happened at some other banks lately >> by the way, governor phil, i did work with you and you just don't remember me. i got you. i bought you pizza and coffee. >> that's a good subtweet on air, jim we'll watch the banks later on today. the opening bell coming up in a

couple of minutes. don't go anywhere.

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bull market any time soon is looking the wrong way. we have had speculative financial history. specs of crypto. you know, weekly, daily options. you know, crazy valuations of the would be faangs and going into a new bull market any time soon makes no sense to me. >> lee cooperman on closing bell overtime going through obviously some of the bubbles we have deflated, jim. does that mean there are no seeds of excitement. >> there is always a bull market somewhere. when i listened to lee, there's some good tremendous drug stocks we'll have meg tirrell and it's a surprise. you have a chance to make money in the oil look, i think what lee is very sensitive to, he doesn't want to hurt anybody which is always great, but there are pockets of things that i like it's just harder to find them

than it would have been at one point. the megacaps color is thinking the megacaps, i don't want to use apple in this case let's use amazon the amazon, we don't know how to value it it's selling at a high pe and they didn't cut workers. lee has some situations where he's absolutely right. there's been a big decline the declines could be further. the one thing i disagree with lee, i wish he had said, we've had some dramatic declines >> you did good through some names you liked earlier in the week, halliburton, netflix, amd. meta, by the way, is going to have a bigger market cap than tesla for the first time in a year >> i think meta is an example of -- we all make a judgment about these things we all makes a judgment that mark zuckerberg is going to spend any amount of money on the metaverse. we make a judgment about reels

what happens if tiktok is banned and mark says, you know what, i really am going to reallocate metaverse time because i don't see the future as much as i thought. what happens if over the weekend he says -- he comes. >> andy: says, why don't we sell there was a time to sell hard. >> let's get the opening bell here on the big board it is the professional bull riders and wranglers celebrating the sports 30th anniversary and achilles international empowering people with disabilities to encourage people with running and endures sports they have the great denim franchise, wrangler. and i think they wish they had something as consistent.

that stock looks like it's bottoming. with lee, i've known lee forever and it is -- if there's -- if there's a needle in the haystack, no the if there starts to be a bunch of needles, you have to start becoming more bullish. lee is a shrewd preacher of the market if he starts seeing some under valued stocks, the next conversation is going to be, well, i have some under value. it's like dave tepper. i like him very much he might say, you know what, maybe things are better than i thought. change mind. facts change >> yeah, of course after tepper's interview with squawk a couple of weeks ago where he expressed quite a bit of caution based on central banks. we haven't talked about europe's inflation but they're back to single digits. the core is going to make things challenging. >> look, they do have an energy problem. i'm fortunate that they came to us and they said put solar on.

like, okay you going to give me money, i'll do what you tell me. and when you look at what the eu's doing, they're struggling they want growth they have ukraine. the war, we don't know they make drones you want to win the war. you can win it, it's just there's something i worry about. >> there was some commentary, i think the white house even had a line or two, the president you're talking about the great cease-fire and arguing that maybe it's a sign putin is looking for some oxygen to catch his breath >> right. >> i think there's some people that feel like, oh, do we really have to give ukraine, really give them anything in the meantime, i think we go back to what we're talking about in terms of the good and the bad. what's happened in a lot of situations is you have a good, a winner, t-mobile a bad, not winner, verizon, at&t we're seeing fewer winners in

the aisles of home depot fewer winners in the aisles of kroger and so that's tougher it's tougher to find the bull market is tougher but a lot of times, carl, right about now people want to give up we saw it in the flashback to 2011 during the big debt downgrade and what i say to people is i'm not warren buffett. no one is warren buffett you can stay the course. we're not seeing systemic risk. >> reports today that genesis claiming bankruptcy, cutting 30 perfecti30 of staff >> i remain worried. i'm going to remain worried because when you see the number of people that got involved in this stuff, it is extraordinary. i mean, it just seems like that people decided, you know what,

i'm going to sell merck and i'm going to buy salono. no no the and those people are still causing pain the one thing that is interesting is that there's not a lot of public trading, and the ones that are, people betting against coinbase. >> the tone this morning is pretty consumer friendly target and costco helping to lead the s&p upgrades of lulu, rcr, mgm. >> you're seeing illinois tool works up you're seeing some -- wow, costco costco 21 is interesting rich glansy runs costco and it's sundries, it's food, but it's not tvs. it's still not hard goods. >> right. >> which means you still can't say, this is the bottom and micron now samsung reported bad numbers. they've been killing drams if they would blink, just darn

blink then you could buy amd. >> on production >> yes micron is up very big from when they reported that interesting quarter. i say interesting because i like sanjay, i can't say bad, but it is amazing to me -- i think it may amaze sanjay that the stock is up 10% from when he said it that may be samsung being more brash. >> i was reading the bernstein note on it yesterday estimates for the space are down almost 30%. >> but the bcs are only down 19%. >> his point would be it's one of the biggest expectation resets we've had in maybe ten years. >> it's one of the great gluts that i've seen there was a glut in the mid '90s for micron that was savage and these are companies that have a level of -- like bethlehem steel did. they earned 27 it was 2 the micron's trying to be a little bit more consistent, trying to upgrade, be more

proprietary but it still trades as a dram stock. micron, it's selling at nine times earnings if samsung says, you know what, we lost too much money we are now going to let up the well, that's big that's big >> right >> by the way, let's talk about the oils for a second. >> yup >> you'll see chevron got a downgrade today. the stock's up 3 you know, what does that say >> you've been talking about there being a bid. >> more drilling going on and there's more growth. again, i defer we have unbelievable people. just like meg, brian sullivan. >> great to have meg back. 38.50. dow's up almost 400. back to the jobs number. that december surprise coming in strong outpacing estimates showing lighter wage gains joining us this morning, the u.s. labor secretary marty walsh joins us to talk about the number mr. secretary, happy friday. great to see you again. >> happy friday. >> markets really zeroing in on

wage growth. average hourly earnings up .3. prior was up 6 revised down to .4 how important is that to you versus the overall print of jobs being created? >> we're still seeing gains in wages, which is good to see. i think that as we move forward here certainly watching what we put out as an economic plan, what the president's been talking about, we're seeing strong job growth. we're seeing areas like leisure, hospitality, construction, health care, education that had great gains this month it's a good, strong report across the board the wages, yeah, there was a little bit of a .1 pe% year ove year, it's a strong job growth for the american economy. >> there was some movement yesterday on immigration, and i wonder whether or not -- you know, thinking of the fed chief a couple of weeks ago at brookings talked about just the need to -- we need some workers. need to get labor force up

we did get a little bit of improvement in this brand. >> yes. >> but do we think that the conversation is gaining any traction on bringing a fresh round of workers to the u.s. labor force? >> i hope so i've been saying this for months now. one of i think the biggest challenges to our economy is lack of workers and the real need for immigration reform. i think that hopefully when congress organized itself and we get a congress and a senate moving forward, i hope they prioritize immigration when i talk to businesses all across america as you do every day, i've heard you guys talk about this on the show, companies are looking for workers and immigration reform or immigration is another path for more workers and i think that, you know, as a country we've always depended on immigrants in our work force in the last couple of years we've seen those numbers go down, dwindle. we saw an increase of immigrants coming into the country going to work that is a big part of our economy. >> mr. secretary, good to see you. one of the things that i think that you can touch on here just to follow up on what you just

said, there are specific areas where we really don't have enough people. we do not have enough engineers. that's probably the area that we're most short of. is there a way to make it so that we can help retrain people to be engineers? >> i think there definitely is, but engineering -- depending on what you are -- i was down in oklahoma with congressman cole a few months ago at the air force base and they were talking about the need for the next couple of years to hire 3,000 engineers in that facility. and what they told me was they'll get about half of those from the university of oklahoma and the colleges in the area, but they have to recruit other people in. then they're in competition with other tech companies that have the ability to pay more money. we can do that and what we're doing with cybersecurity, we have 7700 people in an apprenticeship program we have to think about the specialty areas, whatever area it might be, whether it's finance, whether it's tech, whether it's engineering doubling down on apprenticeship

programs that is the plan forward that you have to do you look at countries in europe that do this every day they do apprenticeship brilliantly. they get young people exposed to the different industries at a younger age. last year we invested over $300 million. this year we have to do more than that. the. >> mr. secretary, i'd love to get your thoughts on this move to bannon competes out of the ftc. the line is largely that it would help actually boost americans' earnings power for obvious reasons. i've heard some other takes, for example, arguing that it would exactly work against the fed's efforts. where is this all coming from? >> that's in the rule making process so i'm kind of letting that take its course i really haven't been in that space that much as far as secretary of labor i know there are other parts of the administration that are working on that so i really haven't been in that space so i'm not going to comment on that at the moment. >> all right finally, you know, we've been watching, jim and i were just talking about oil production and the possibility that we might

actually get some traction on that front again, labor's been a detriment in recent months to get new rigs operating. do you think that there's some room there for things to start moving forward >> well, the labor folks i've talked to are very eager to get a lot of stuff moving forward so when i get the phone calls in different parts of the country, they certainly are putting pressure on me to put pressure on all of us to get these rigs moving forward i'm not sure what the detriment is, but there's a lot of pushing. i'm getting pushing the other way and by members of congress that are pushing everyone that they can push. >> mr. secretary, thanks appreciate it. market definitely appreciating the jobs number, at least in the opening here we'll talk in coming months. thanks >> thank you very much. >> what do you think, jim? >> well, i think that most of the people in the country do not have a stock position. so marty walsh is looking. he wants the biggest number possible with the lowest

inflation. we want a not big number with low inflation. there's a kind of tension there that is -- it's very difficult to resolve because we're a country not of wealthy people. people who watch us, but the vast majority of people are saying, look, i hope i can get a good job i can job hop. i hope i can make more because the stuff at the supermarket makes more then you have us, we're saying, we sure hope things don't stay high because, you know, his version of high and our version of high are very different. >> it's true it's true. it takes you back. this is the 24th straight month of job gains and it's hard to remember in some ways what the picture was like two years ago where we weren't sure where the job market was headed. the country added 4.5 million jobs last year. >> we're a great country the best country on earth, and one of the things we do is we add jobs if you are in europe and you get these jobs, disinflation, we'll take care of the inflation how about all of these people who are hired? a friend of mine who runs a big

company who hires, he was speaking to some of the mukety-muks over there, how many people do you hire i have a cousin and these were royalty. we have a different kind of country and we have a country where there's tremendous opportunity. at the same time we have a fed that cares passionately about the people who don't have a lot of money and knows that they've got to be able to have enough money to go to the supermarket marty walsh represents the people that need to go to the supermarket. a lot of our viewers, i guess apple got hurt by this >> right actually, yeah, truist had some numbers out. this sort of tallying what tech layoffs have looked like in '22. you're into the six digits now accounting for meta and amazon that's a big chunk >> they just hired they don't really know how to fire they don't know how to fire. they don't know how to bring people in and do a reduction in force. they've never said -- a lot of these places have never had hard

times, all they've had is growth they need to call in people to say, how do i do this? do i pick names out of a hat no but there's a lot of places that are very overstaffed out there and they have to take -- they have to take more pain because their businesses aren't growing the way they thought think about how many few companies were created this year do they need service now service now. i pick on service now. it's a great company, but they need customers now they'll find customers, existing customers, they'll take them from others but the one thing they don't have is creation, large scale new companies that need it because that part of our economy is not doing well >> small to medium-sized businesses >> they're going to start slowing. >> which is depending on your provider, your cloud provider, for example, there are some firms that -- that's a big needle mover is the smaller firms. >> someone recommended snowflake today. that's frank sluman's company. the frank --

>> wells >> i said, you know, frank, the forecasts are coming down. he gave me a line that was kind of like cincinnati with belichick. he goes, the forecasts, jim, are the forecasts. >> yeah. i know >> what do you say about that? >> their general view is, you know, as the year progresses there will be more demand for some of these names. obviously multiples have come way in. >> you can rent the cloud. you don't have to own the cloud and the cloud has become expensive. one of the reasons i am concerned about amazon is because they have too many people given the fact that i think amazon web services is not going to do as well as people thought. none of -- can't figure it out i am watching alphabet go down and they're going to miss the quarter. i don't think either is happening, but it's what i call a source of funds so you can go buy a drug stock and i think until alphabet bites

the bullet and comes out and says, okay, we hired 12,000 people last year, that was a mistake. we've got to reverse that. we were spending 9 billion on new plant, we have to reverse that that's how it stops and until that you're going to get the stock cut in half from its high. that means it was trading at one point at 140 and it's now at 84. this stock -- my travel trust, i'm not shorting it. my trust is long. i look at that i look at advanced micro i've got to say, come on we need growth in pcs and we need more people who want the web because google cloud services is trying to expand and we're not getting it so tech remains a source of funds as much as i -- as we've all loved tech, tech is not whereby you go it's just not. >> well, the nasdaq 100's on pace for five weeks down that sort of says it all. >> that's why last night and tonight i was trying to find tonight, too, stocks that are worth buying nasdaq. what did i come up with?

t-mobile then the second, pepsico then the third was american electric power thank heavens, i didn't know they were over there i knew 24er7 over here pepsico, wow i bought a windfall and i found something on the nasdaq i can recommend. >> i want to get you on southwest. we haven't really touched on it. the initial sfrimt the holiday meltdown, 400 million in lost revenue. pretax impact, 725, 825. they see a q4 net loss we don't know right now what the longer term impact is on their booking because of what happened >> it's painful. i wish i had known sometimes we sit back and we think we're so good and we're not. i asked gary kelly over and over again, how good they're doing. i didn't know about how little they were spending on technology. >> that was eye opening. >> gary, that's not -- you don't want that to be a legacy but it seems like that -- the people -- there are a lot more people who knew it. a lot of times i said, how did i not know that? the answer is, it wasn't booked.

i was shocked at how little they're spending >> right things -- sort of the back end runs they had to do around scheduling, for example. >> didn't know where people were you know, there's going to have to be -- heads have to roll. >> although, you know what reminded me of you yesterday because you talked about china was morgan stanley with a note about revenge travel. >> revenge travel. watch the semis. they remain -- they remain the toughest part. advanced micro, what a great firm and it just doesn't it doesn't have it. >> losing the initial gains. dow is up 100. s&p once again a tad above 3800 at 3814. don't forget you can always get in on the cnbc investing club with jim sign up at cnbc.com/jointheclub. use the qr code on your screen and it takes you right there as we go to break, watch for bond's reaction -- the continued reaction to the jobs number. 223,000 and we did have yields

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take a look at the biggest laggards on the ndx for the new year datadog, but tesla down 15% for the week alone just $5 above $100 next hour, don't miss the ceo of hertz. the company making a big bet on rentals of evs. dow up 134 we're back in a moment

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it's time for jim and "stop trading". >> a resurgent out of bank of america out of the oil and gas stocks exxon remains their top idea this is one of those stocks in the old days you could never go wrong recommending exxon then it was wrong. i don't believe in the $50 oil thesis, i do believe $60 to $80. they do very well with that.

dividend growth. looking for a bull market. you might just say, jim, you don't own a haystack i don't know to me, exxon is a great company. it's available to anyone not like someone says, that's not a hedge fund stock, they're not playing. i look at it, all right, that's a gift >> all right how about tonight? >> well, i have the most controversial stock there is in the whole world. i have aero environment. they are not letting them send everything they have to ukraine. is it too good can it go over russia? what is the problem here that company has -- and i've operated in our playground at englewood cliffs, they have the best drones, best drones in the world. they have plenty that could help ukraine. i'm going to find out why the orders aren't there yet. >> interesting on a week where we did get more information about bradleys and so forth. >> have a great weekend.

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good friday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with mike santoli. morgan brennan and david faber have the morning off market hanging in on the heels of a pretty good jobs number right in line with expectations. slight deceleration from the prior month and wage gains cutting cut in half from the initial print. more data crossing the tape. rick santelli's got it >> our december reads on the ism service side of the equation, and every eye is going to be glued to this. it's all about the service sector and how prices are moving the index itself moved under 50. it's in contraction mode 49.6 we haven't been under 50 since may of 2020 when it was at 45.2. that's not good. on the employment side, also

under 50, 49.8 49.8 well, we were at 49.1 in october, so that has been under some pressure. if we look at prices paid, 67.6. in the rearview mirror is 70 67.6 is the lightest that read has been since january of 2021 that's something the markets are definitely going to pay attention to it's all about services and prices ism new orders, 45.2 that obviously is now in contraction territory. what a drop from 56. and 45.2, lowest level since may of 2020. let's look for november factory orders double down on that, minus 1.8 and a negative revision. last month's 1% gets halved, strip out transportation it drops from minus 1.8 to only minus 0.8% in the rearview mirror, also a

negative rye vision from 0.8% only down to 0.1 durable good orders, these are november final reads these replace the november mid-month read minus 2.1 remains minus 2.1, ex-transportation, moves from up 0.2 to only 0.1. a proxy for capital spending gets halved. it was originally midmonth at 0.2, now 0.1 shipments instead of order minus 1.10 where they were mid-month if you look at two-year note yields, they're now at 4.35. they've dropped six basis points that services data at 4.35, they are now down 8 on the week down 11 on the session get this, ten-year note yields also just dropped three or four basis points they're now at 3.64. that means they're now down 8 on the day. they are now 24 basis points on the week

fed guidance, you think long-end investors are paying attention no they're paying way more attention to the slowing of the economy and the service numbers. mike, back to you. >> absolutely. pretty cool batch of numbers there. appreciate that. we are 30 minutes into the trading session. here are three big movers we are watching this morning. including tesla, down for the third time this week after it cut prices in china for the second time in less than three months more on that move coming up this hour tesla down 3.5% on the morning plus, costco reporting upbeat december sales holiday numbers were up 7% year over year, even as online sales receded. that stock up 6.5% southwest airlines saying in an s.e.c. filing that as a result of the operational disruptions, the company currently expects to report a net loss in fourth quarter of 2022. a significant impact is from an estimated revenue loss in the range of $420 to $425 million.

>> dow is up 250 or so here on the heels of the jobs number the economy adding 223,000 jobs in december. unemployment rate edging down to 3.5%, which is going to be pretty much a post-covid low, matching what we got back in 1969 also this morning, citi cutting u.s. equities writing, we thought -- we cut the u.s. to underweight where market earnings expectations still look too optimistic, especially given the second half of 2023 rece recession. citi has been glass half full for quite a while. sort of explains their downward view on crude, which ended up being directionally correct late last year. >> for sure. the call that underweight the u.s. relative to europe because other markets seem to have priced in a slower economy they look cheaper, is an extension of the observation that big, expensive growth stocks in the u.s. still have more room to underperform.

and more room to come down really the big source of u.s. outperformance for years was the fact that we have the dominant tech platforms they got very expensive. they got overexcited in a way, it's essentially an anti-nasdaq call yes, they're expecting earnings revisions lower and all the rest of it. the market has already been in the process of really digesting that exact type of outlook you see this morning, right, we have an opening pop in the index, the selling immediately hits the high multiple nasdaq names. it seems almost systematic at this point that seems to be where we are now. data moving in the direction the fed wants to see, but how fast can it happen. we still have four weeks until the next fed meeting. >> perfect segue to our next interview. the fed continues to remain a key focal point for the markets. steve liesman joins us this morning with a very special gust morning, steve >> morning, carl yeah, i'm joined at the american economic association annual conference by raphael bostic,

atlanta fed president. this is in your district you come and you have a variety of duties you perform. >> yeah, this is a busy conference for me. it's really good we haven't done one in person for so many years, so it's nice to see some people >> let's talk about the jobs number this morning, 223,000 i guess the most important thing is, does it change your outlook at all on the economy? >> so, it doesn't really change my outlook at all. you know, i've been looking for the economy to continually slow from the strong position it was at in the summertime and this is just the next step in that. the question for me has always been, like how fast is it going to slow? it's going incrementally, steadily, not super disruptive because of that, it really says to me, we have to stay the course inflation is too high. we need to reduce those imbalances so it moves more rapidly towards our 2% target. >> you could look over at the separate household survey on unemployment rate of 3.5% and think the job market is getting tighter. >> you could make that argument.

you know, i'll just say, in atlanta, it is rock solid. throughout our district we're hearing that people are not having a hard time finding job and that employers are still pressing to get more people to come to work for them because demand is still strong it's stepped back a little bit from where we were in the summertime, but there's still a lot of tightness. >> what about the wage numbers they revised away that massive gain in november and a smaller wage gain in december. did it make you more confident that wages will not be driving inflation? >> we've heard through the entire episode, through the whole pandemic, that wages have not been the driver of inflation, it's been more on the demand side. when i talk to employers, they say we're setting wages with the expectation of where we think prices will be in the future so, wages are not driving the dynamic right now. but it is definitely something we have to keep an eye on because historically, that's been an important driver and i want to make sure we're on top of this so if things change,

we know about it as soon as possible >> what has to happen? does the unemployment rate have to rise and how much does it have to rise to make you comfortable that the job market will not be the source of inflation? >> i think unemployment is going to rise a little bit we have to do our summary of economic projections submissions. in my submission for this year, i have inflation moving from -- unemployment moving from 3.7% to 4% so, a slight increase. but not huge numbers and i think it's just going to be the by-product of the economy slowing down at some point, we will absorb all of those excess jobs and the slowdown will take in some of the jobs that are currently out there. >> i want to get to your summary of economic projections as well, but does that mean you don't see us having a recession if unemployment only goes to 4% >> that's not -- recession is not my baseline projection and, you know, as we see today, there's still a lot of momentum in the economy there's a lot of energy that can

absorb the more restrictive policy stance we have. and so i'm not really expecting there to be a recession. if there is one, it will be -- i'm -- my sources are telling me t will likely be short and shallow. >> in the sep you forecast the fed fund rates are you one of the folks above 2023 >> yeah. >> 1719, not a bad guess. >> you do good math. my projection has us between 5% and 5.25%, in that range that's the range i think we need to move to if the economy proceeds as i expect, which is continual, gradual slowdown, like we've seen in the numbers today. and then what i think is the most important, actually, is just to hold there and stay there and let that policy stance really grip the economy and just make sure that the momentum is

fully arrested so we get to a place where demand and supply start to come more into balance and we start to see those pressures on inflation really come down. >> do you stay there through 2023 and into 2024 >> yes that's exactly right once we get to a number, i want, if the economy continues to proceed as we expect, just to stay there and hold it and, you know, for me, my projection i have holding well into 2024 because i think that we should just wait and see, and i don't think there's a lot of urgency -- there will not be a lot of urgency once we get to that level to step back. >> so, again, doing some math on the fly here, if you're at 4.38 now and you want to get to 5%, 5.25%, you have about 75 basis points can you see going 25 basis points at the next meeting or better to go 50? >> i think the data will guide us i think the most important is we're stepping back from the 75-basis-point incremental jump. i think that's more appropriate

as we get into more restrictive stance today i'd be comfortable with either a 50 or 25. and if i start to hear signs that the labor market is starting to ease a bit in terms of its tightness, then i might lean more in the 25-basis-point position the other thing i would say is, i heard a lot from businesses toward the end of last year that the results from the holiday season were going to be an important marker as to where they think the economy is, how strong they think it is and how they're going to approach it we haven't gotten all those numbers yet, but i'm expecting as we see more, we'll get a clearer sense how the economy is and that will help you. >> you're currently the subject of an investigation by the inspector general of the federal reserve about trades that were made outside of the conflict of interest rules i'm just trying to understand how those happened you said they were in managed accounts and you were not aware of those trades, is that how you describe what happened in this case >> so, as you know, this is

under investigation with the ig, so i'm really not going to say more on this beyond what is on the website. >> okay. >> i'll let you investigation play out and we'll see. but there's a lot of information already out there. >> no, i know that, but the only thing i'm trying to figure out is did the inspector general -- i'm sorry. did these managed accounts, was that person not aware of the conflict of interest rules that you were under because my financial advisers are aware of my conflict of rules. was your manager not aware of those? >> i'll let the ig put a report out that clarifies all of that i don't want to shape that investigation in a public setting. >> in terms of the things you have said, that you were not aware of the trades made by the manage -- in the managed accounts, is that accurate you were - >> so, everything that's posted i put out is accurate. and i'm just going to let the ig do its job and not - >> okay. when do you expect that report >> i don't know. you'd have to ask the ig about how that's -- what their timing

is. >> i don't have a sense of the timing >> no. >> a couple more questions on economy. financial stability and issues of rye session, how much concern do you have that you could go too far? >> that's always a concern i watch your show. a watch a whole bunch of others. this is the thing they talk about the most, that the fed is going to miss something and we'll push so far and it's going to create extra damage i worry about that all the time. what i would say is as we talk to business leaders, as we talk to people in communities, the thing they tell us is, inflation is still painful it is hurting us and it's making it hard for us you need to take care of that. and that needs to be top of mind as we get closer to a place where it feels like that's taken care of, then we need to think about how far you need to go we don't have that answer right now. what i do know is there's still more work to do as we stand today. >> in terms of things you're missing on, blinder has an op-ed in the journal today saying, five-month annualized inflation is 2.5% or 3.5%, if you look at

core pce are you looking at recent numbers over the past five months inflation has been much lower than over the 12-month period >> we absolutely are you know, we are seeing the full range of the economy i got a bunch of people who spend their whole days looking at these things and trying to understand the dynamic what i will tell you is that right now the most difficult pressure space in the inflation space are in the services. we know that the -- that service inflation historically has been slow to reduce over time so, we want to make sure that we don't claim victory prematurely such that you start to have the bounces around in inflation we saw in the '70s and '80s i think that would be much more damaging for our economy than the stance we're having now. you know, i've said before, you know, we want to be cautious as we get more into restrictive spaces and then we want to calibrate as effectively as we can our policy to make sure that we get as close as we can to a situation where we don't see

significant job loss >> raphael bostic, thank you for joining us. >> it's good to see you. >> atlanta fed president here from the american economic association conference in new orleans. >> making a bunch of headlines, appreciate that. broader markets, hanging onto a nice gain on this jobs friday dow up almost 300 points let's bring in jim o'neill, former uk treasury minister and current northern grid zone manager. good to have you back. watching the jobs number, i'm thinking back to some of the ism prices paid. obviously, cpi coming up in the coming weeks you think inflation is really starting to move and potentially to the downside? >> so, i managed to log on before the interview, so i watched all of that. the most interesting part, to be honest, was the reference to what alan blinders has written about because that's amongst the

things i'm watching pretty closely, too i think if you look at the rate of change, and now it's starting to include wages, too, never mind the whole global commodity price, the inflation indicator is moving quite nicely, let's say. so, for the markets, which is so tricky, the -- i think the scene is set for a repeat of what we've had really since mid-november where the fed keeps coming out and saying the kind of thing the boston fed president said there, that they want to stay tough and prove the credibility and not make mistakes, et cetera, et cetera and we're going to keep getting evidence suggesting that things might be moving more than the fed think. and at some point, i remember saying this last time i was on with you and times before, the only thing you know about the

fed is that they will change their view when the evidence changes. and there was a hint of that from the boston fed president, too. so, i'm sort of -- i can see how the markets can strengthen in the future goodness me, the minutes the other day really emphasized financial condition. so, that will probably limit any upside move. but i think eventually if we're going to break out, i don't know, let's call it, 38,500 on the downside and 400 on the upside, i think we'll go on the upper end. i think the underlying pitch is improving. >> jim, it's interesting you say -- the markets, for example, the bond market clearly is trying to capture the range of probabilities about where inflation heads from here and that, yeah, the fed can say what it's going to say until the moment the evidence changes. at this point we see yields dropping again and the market seems to be saying, well,

inflation is going to probably be coming down hard, perhaps faster than the fed thinks but it can happen the easy way or the hard way i guess the question is, what's the real wear and tear on the economy on the way until the fed is convinced inflation is under control? >> there you go, that's the judgment the fed is going to be careful about. of course, they're never going to admit it, but the other factor influencing my thinking here, and i would imagine some of the more experienced -- or many of the more experienced bond market and equity -- and all market players is that, in the real world, the fed's not going to sound as tough as it's doing now when they actually start to see evidence of the economy slowing very sharply and with unemployment actually rising and so it's fine for the fed to say all these tough things when we just see evidence about the momentum of the economy slowing, particularly the unemployment set and wages.

if that was to accelerate, i think already some fed voting members would probably change the view of it it's interesting when you compare it with here in the uk where obviously there's differences, but some aspects as there are in other developed economies are very similar you already have a much wider range of views from voting members of the corresponding -- the bank of england monetary policy council already some of those members are looking at the weakness that seems to be building and, you know, the normal human being is trained in the same stuff -- >> sure. i want to get your take on this morning's european inflation print, back to 9.2 how much of this is truly about european heat waves? jim, i've got to get you on china as well. i mean be, the - >> yeah, yeah. >> -- the threads have been all over the map in terms of their policy reversal and their ability to rebound in a way that xi might want to

>> so, on that, you know, i think he's got a huge reputational issue to deal with management wise given he's the king of all china. but the way in which it's changed. but that said, you know, i credit the -- i spoke at an important event in london about uk/china relations in november before any of this happened. and i -- you know, one has to be very careful courtesy wise with chinese audience, one should do that everywhere, but i sort of made a jokey speech that i was pretending to be president xi and i said i was going to announce we were abandoning zero covid. that's effectively what they've done you know, it became increasingly a ridiculous policy given the economic problems going on, and crucially all the evidence we have that omicron is not anything like as dangerous as

the original wuhan variants. what i find -- i'll throw this out there because i saw some reference to it from a european policymaker. i think the next savvy thing for him to do would be to consider china actually buy some of the better western vaccines so they could protect their own elderly people better than the one they've got, which obviously would be quite a tricky thing. if they really want to show a sign that the china get beyond the mess they've made for themselves the past four years, including improving relations on international trade, i would have thought that would be a really smart thing to do as well >> yeah. well, plenty of reporting suggests the offers are there when they're ready to take them. that's going to be a fascinating turn as well jim, we'll keep it brief obviously, busy market day always appreciate it talk soon. >> all right, guys happy new year to you all. >> same to you jim o'neill. as we go to break, take a look at the road map for the rest of this hour, including tesla cutting prices in asia once again stocks are freefall continues.

back close to 100. a key decision coming on whether to approve a new alzheimer's drug what that means for one biotech stock in particular next. a lot more on the jobs number today ief l check in with goldman's checonomist jan hatzius who came in on target. ough the “wo”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

welcome back the fda is set to decide whether to approve another new alzheimer's drug, this one also

from biogen. meg tirrell has that story good to see you. what's the setup >> it's a really interesting setup. analysts are estimating biogen stock could swing either direction. if you go back to june of 2021 that's when biogen and their japanese partner got approval for last alzheimer's drug, and stock went up. it's come back down since then as they price it as $56,000 a year there were a lot of debates around whether this drug actually worked. there were safety concerns around it. and then centers for medicare/medicaid services declined to cover it except in certain clinical trials. that's a decision that will stretch into this next drug as well if it's approved. it is expected to get accelerated approval from the fda today. this one is being led by the

japanese partner, eisai. it had a positive phase 3 trial so it's a different setup. priced lower, potentially $20,000 to $30,000 it still has the same side effects, perhaps less of them. brain swelling and brain bleeding is what people are looking for there. rbc estimates biogen stood could go above $300 on approval today. if it's delayed or any other problems, down 5% to 10% they believe it could be a $9 billion drug in peak global sales if approved. there's a lot of debate here a long shadow cast over this next alzheimer's drug because of what happened with the first one. guys >> meg, you say that probably a lower targeted price point is it a similar drug in the approach how does the cast benefit analysis likely to play out as people decide how effective it has to be in order for it to get coverage >> yeah, absolutely.

is a very similar drug, targets the plaque buildups in the brain, clearing those and hoping that contributes to the slowing in declines in cognition that comes with alzheimer's, and it's shown to do that in its trial. a watch dog group on pricing suggests it would be cost effective at $25,000 a year and under. eisai has put out numbers potentially higher than that we'll see where they price it. reimbursement would be a long road because of that medicare decision on the last alzheimer's drug that's going to be the next debate. >> fantastic, meg. we also want to note, you'll be leading our coverage of the jpmorgan health care conference on monday and tuesday. meg's going to interview the ceos of pfizer, merck, lily and more it's great to have you back. dow is up 350. we'll be right back.

let's turn back to tesla we mentioned it. cutting prices in china for the second time in less than three months for the model y and the model 3. the model 3's now about 30% cheaper than it is in the united states that comes a day after the china passenger car association said

the tesla december deliveries hit that five-month low in the country. mike, it's not a small discount on price you're up to 13% reuters suggested they're also doing the same thing in countries like south korea. >> news flow on the demand side just remains poor. it's a huge shift in the psychology of this company and the stock around it based on the idea of demand being the thing you never had to worry about and now also just the dynamics of the unwind of this massive manic move to the highs. volumes were massive there's so much stranded capital at higher price points it feels like finally some capitulation i noted at this morning's lows, the stock was back to the level it had gone up through when it announced a five five for-one stock slit in august of 2020 you're going back 2 1/2 years, or thereabouts however, from the beginning of that year, from basically three years ago, it's still a triple you have this dynamic where people still have profits if

they were in early and they want to lock them in. it's getting oversold. at some point when they report numbers, if the cash flows look okay, if you can have some confidence that earning estimates for this year don't have to go down much, maybe that's where you get stabilization. >> mike's right about this morning's low, 101.81. and, man, morgan stanley's bear case was 150 just a few months ago. we sliced right through that we want to get an update on the house speaker vote some reports of progress mccarthy's speakership bid failed for the 11th time our senior congressional correspondent has an update on what to expect when they reconvene in about an hour and a half good morning. >> house republicans are scheduled to be on a conference call right now and punchbowl is reporting that mccarthy told members he has struck a deal with at least some of his opponents. now, what mccarthy has said publicly is that he's not sure there will be a resolution today, but he was adamant they're making progress. he said, we are going to shock you, but he did not say how.

now, his negotiations with those hard-line conservatives lasted late into the night. much of their discussion has been focused on this process of bringing bills to the floor. the holdout want spots on the committee in control of what gets voted on, they want bills focused on a single issue rather than lumped together like the $1.7 trillion funding bill that's an essenpecially sore po. they want to target the earmarks attached to that mccarthy could still be difficult even if he has struck this deal. some of his supporters may need to leave town and won't be able to vote for him. and even the most optimistic scenarios have him swaying about ten opponents, which would not be enough to secure him the speaker's gavel. meanwhile, a gop advocacy group focused on pragmatic politics is worried the in-fighting has already damaged the party's reputation today mainstream partnership released this ad it says, grandstanding is not

the solution the group said the majority of house republicans are ready to get to work, but, of course, nothing can get done until the house elects a speaker mike, we'll see if there's any real break in this log jam today. back to you. >> remarkable. thank you. after the break, we'll have much more on this morning's jobs number with goldn chmasas chief economist jan hatzius. be tradi. 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. where smart investors get smarter℠.

we've heard through the entire episode, the whole pandemic, wages have not been the driver of inflation. it's really been on the demand side, not being able to meet demand when i talk to employers, they say, we're setting wages given where we think prices will be in the future so, wages are not driving the dynamic right now, but it is definitely something we have to keep an eye on, because historically that's been an important driver i want to make sure we're on top of this, so if things change, we know about it as soon as possible >> welcome back to "squawk on

the street." that was atlanta fed president raphael bostic talking about the jobs number this morning, talking about wages and inflation as well. joining us at post 9 to talk more about the print today is jan hatzius, goldman sachs' chief economist. great to have you back on. welcome. >> it's great to be on with you. >> do you think wages are driving the dynamic now? what do you think he means >> well, i think he means there's not a white wedge price spiral i think, nevertheless, wages are important because ultimately, you can't have wages growing at 5% plus, and then have inflation sustainably at 2%. that doesn't really work so, i think it is encouraging in today's employment report that wage growth, you know, does seem to be decelerating it's decelerating gradually, but while the report a month ago showed a very strong wage number, with some questions around statistical issues around it, that was reversed. and we had a very significant

downside surprise relative to the expectations going into the report so, i would put some weight on that. >> right we had you on last month, of course, and we talked about return to disposable household income on a real basis doing well do you think that's going to continue to accelerate through cpi and through some of the prices paid figures we're getting out of the surveys >> i think the basic dynamic is intact where, you know, wage growth is slowing gradually. headline inflation is slowing a lot more quickly, in part, because of commodity prices, in part because of supply chain improvement. and that is helping real disposable income because real disposable income is wages relative to prices employment growth plays a role having a solid number, 223, slower than it has been, but still very solid, all of that, i think, is helpful for disposable income. >> the data on the employment report, in general, adds some evidence to the soft landing

camp, it would seem. you have this glide path lower in terms of total job growth but wages moderating a little bit. we don't know where that's going to end up. then you have the ism, which the market seemed to embrace where does that leave us with regard to, whether in fact, we can avert an actual contraction in the economy >> well, i think overall it's encouraging news because the economy is still growing it's growing at, you know, a slow pace. i think how quickly really depends on how much weight you put on business surveys, which have been clearly softer, and many factors ism has been softer, non-manufacturing ism is softer and gdp and employment numbers have been quite firm for gdp, we're probably going to be printing 2.5% to 3% in the second half of 2022, and then you have these employment numbers which are still very far

away from recessionary so, my overall view would be, rear growing at a below trend pace that's necessary to rebalance the economy. wage growth is gradually decelerating price inflation is pretty clearly decelerating and i think that should be encouraging for achieving a soft landing. >> and i guess the other question is whether the fed feels as if the job can be done without really softening up the labor market that much more, right? bostic said he expects 75 basis points further hikes i think that's in the zone of consensus and keeping them there for a while. do you think they're going to be impatient in terms of wanting to see a higher unemployment rate >> i don't think they want to see a higher unemployment rate, per se the prediction is the unemployment rate is going to be, you know, a percentage point higher basically by the end of this year. but i think they are -- what they want is inflation to come back to something close to 2%. and if that can be done with

unemployment still lower than what they're projecting, so much the better i mean, that would be very, very welcome. it's just that, of course, nobody knows and their best guesses you'll see a sizeable unemployment increase. own view is in between we have an unemployment increase next year as well to 4.2%. but that is, you know, obviously only about half a big as the fed projection >> this blinder piece in the journal is interesting what if inflation suddenly dropped and no one noticed he takes a look at back half annualized, in his word, almost back down to the fed's 2% target what are viewers supposed to make of this, being told we're almost back to what the fed has been shooting for all along? >> it depends on, you know, which indicator you use. obviously, core versus headline. there's pce versus cpi there are a lot -- and then the question of whether you take a three-month rate or 12-month

rate you know, our view is that we are moving back towards kind of acceptable rates we have the major inflation indices -- actually, all of them in the range of 3% by the end of this year and then coming down to 2.5%. i think right now the trend is still clearly above the fed's target but not by as much as it was three or six months ago. we're moving in the right direction. >> but is there downside risk to that, do you think i mean, this notion that maybe inflation is not as sticky as we thought? if we get another 0.10 next week, there could be a reset of what the fed's expectations are going to be? >> in terms of headline, headline is obviously going to be more volatile there will be an impact from commodity prices there has been a pretty sizeable impact if i look at the underlying measures, they're decelerating and is there downside risk to it i could imagine a more rapid

deceleration as well so, it's not one-sided risks as it has been to the high side for much of the past year. i do think it's more two-sided risk >> it's getting interesting now, jan. it has been. it continues to be good to have you, as always. thank you. jan hatzius. >> thank you. coming up, the ceo of hertz is with us he has insights into the u.s. auto market. plus the company making a big push into evs. we're back in two minutes. anoth? of course - you're a cio in 2022. but you're ready. because you've got the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want - your team, ours or a mix of both. with the nation's largest ip converged network. from the most innovative company. bring on today with comcast business. powering possibilities.

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coming up in the next hour on "techcheck," our live coverage of ces continues. we'll talk to ceos of the nasdaq and trade desk, plus amazon's svp of devices and services is with us, as that very important show continues meantime, not far from session highs. echeup 475 "thcck" begins in about 15 minutes and "squawk on the street" will be back in a minute

just look around. this digital age we're living in, it's pretty unbelievable. problem is, not everyone's fully living in it. nobody should have to take a class or fill out a medical form on public wifi with a screen the size of your hand. home internet shouldn't be a luxury. everyone should have it and now a lot more people can.

so let's go. the digital age is waiting. ev sales getting a big boost in the u.s. last year, jumping 8.5% of all vehicles sold while all autos faced an 8% decline. hertz aiming for 25% of its fleet to be electric by the end of 2024. joining us now here at post 9,

hertz ceo stephen scherr good to have you here. it's been a year and several months since you announced the tesla purchases. what is the demand for ev rentals? also, are those rentals as high a return for you or better, worse, how does it play out? >> >> ev rental demand is strong, and strong across all aspects of our business leisure travelers are looking to get into these cars. there's no better sort of test drive of an electric vehicle than to rent one from hertz. corporate travel, evs are also higher largely because corporates are satisfying their own esg objectives by compelling their employees to be and rent electric vehicles from us. then we rent a considerable amount of electric vehicles to uber and ride share. and that makes an electric vehicle an affordable option to a driver who is not going to be in a position to spend $50,000 or so on an electric vehicle so that venture has been going well expanded to canada and soon we

have ambitions to have it in europe as well >> from a business perspective from your end, are you indifferent as to whether somebody rents an ev or internal combustion >> evs are proving to be attractive we're getting a 30% premium on rate from an electric vehicle point of view. equally, the maintenance on these vehicles is lower than it is on a combustion engine car for all of the obvious reasons and so that's working out very well and what we're doing with uber and ride share is proving to be very profitable for us in part because they are long rentals. so a driver will keep it four weeks at a time. we don't need to turn that car five, six, seven times in a month so they're proving to be quite attractive >> i read some research, citi has a note out today talking about the potential of the u.s. as an ev market because our ratio of cars per household is pretty rich, but is it playing that way in rentals as well?

>> other countries are especially in europe are marginally more advanced in part because charging networks are more mature in those countries it's new and young in the united states we have about 2500 chargers ourselves. we just announced a couple months back a venture with bp to co-develop a charging network built with theirkeeptle to work on our premises and the data is quite rich because we know where the cars are going and where they ought to be placed. we are going to be at the u.s. conference of mayors in about two weeks' time because cities are engaged and interested in charging networks. ubiquity of electric vehicles on their streets for a whole host of reasons and i think hertz will be in an interesting position given the advance we have on rolling those out in our fleet >> the mercedes news yesterday about their own network. is that all going to meld together or are we going to end up with competing types of

stations >> it will meld together for hertz in that we will be a large customer of any and all networks we'll negotiate large scale purchases. all of them will sit behind a single app such that our customer will be indifferent as to where they go they'll know there's a charging station available to them, never mind whose charging network it's on i think this will develop over time >> in terms of overall travel demand, we finished this year, a tremendous amount of pent-up travel lust got satisfied. a lot of people on the street think maybe we're going to see a giveback this year hot are you seeing >> i don't think we will we're certainly not seeing it. demand in leisure is well now past where we were pre-covid what we're seeing on corporate is 75%, 80% back to where it was. and we have yet to see a full return of what we call inbound travel, so these are european or asian travelers coming to the united states. i will tell you at christmas, we saw a remarkable resurgence of

european travelers uk, france, and germany coming to south florida, the southern part of california, not withstanding foreign exchange working against them so there's clearly a desire to travel in the united states, and we're the beneficiaries of it. >> you were saying you think corporate travel is really almost all the way back. interesting to watch that. >> it's coming back and the lect of keep on arental among corporate travelers is up, it's longer by about 1 1/2 days which is a big deal for us >> stephen, great to see you >> as we go to break, check out shares of chevron. big winners in '22, as you know. today, b of a says the stock may have peaked. they do go to neutral, despite that, the stock is up today on a pretty good take dow is up 517. you can go over to cnbc.com/pro for more on that call. be right back. itis. here. aspercreme arthritis.

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hello, world. or is it goodbye? you know, it seems like hope and trust are in short supply.

[clap] now, as businesses we can blame and shame. or... [whistles] we can make a change. [clap] we can make work, work for our communities. create more equal opportunities. [clap] it's time for business to show its true worth. because it's not goodbye, world. it's hello, team earth. [clap] welcome back the markets continue to react to this morning's jobs number right near session highs across the board. you look at the index, about 1.5% gain in the s&p 500 bob has more on what's moving this morning bob, what's catching your eye? >> you know it's that lower wage

growth, hoping for lower inflation, essentially that's what's moving it. we're just off the highs of the day. pretty good, 7 to 1 advancing to declining stocks right now take a look at the movers today. energy is having a moment. oil is over $75. that's nice to see despite that cvx downgrade, all the stocks are basically up there. materials are having a great week freeport, newcore, mosaic on the upside part is china reopening. consumer staples are up. you see this odd hodgepodge of stocks tech is up but lagging and just starting to catch up this recent rally we have seen in the last few minutes is largely tech here. apple is up, nvidia is up. google is still not up alphabet still not up. all three of these stocks are having not a great week. still down about 2% despite the rally today. microsoft up, but down almost 7% on the week. that's just had a really tough

time of it financials are doing well. i have been noting that insurance stocks, travelers, a big help for the dow jones industrial average that's an historic high for travelers. chubb is at a high, aflac, hartford financial these are helping with the s&p 500. other nice movers, you know, kind of an odd hodgepodge as i mentioned, caterpillar hitting new highs reliably merck has been hitting new highs. two other dow components right there. some of the retailer, oddly tjx and ross stores. some are having a terrible time. very bifurcated market in the retail space but the discounters, new highs where are we we're up about .5% this week for the s&p 500. so not a bad start tech, not great. health care, consumer discretionary, they're both down consumer discretionary really dragged on, of course, by tesla. in this range, 3800 to 3860 or so we'll see if we can break out of

that range we have been there about three weeks. remember, guys, we were below the october low, the close was 3577 so we're reliably bchbabove that right now. >> in fact, goes back almost four weeks right in this range we last traded above 3900 december 15th. that's going to do it for "squawk on the street. "tech check" starts right now. good friday morning. welcome to "tech check." i'm deirdre bosa with carl quintanilla and jon fortt. too early to rush back into tech the sector's severe downturn still has legs and we'll ask the ceo of the nasdaq about that, along with the trade desk ceo and amazon's head of devices later, call it a tech tug of war on chat gpt's new evaluation we'll debate it it's one of our friends.