lawsuit from those customers who say, wait a minute we trusted you with our money and it is our issue. they have tried to shift the narrative and say it is a genesis problem. they talked about dcg, that parent company i mentioned potentially committing fraud so you have seen this back and forth. but a lot of fear around that exchange in general. >> kate, thank you and that's going to do it for us on "squawk on the street." happy weekend to everybody "tech check" starts now. happy friday welcome to "tech check." i'm jon fort giant hour of "tech check" ahead. alphabet joins microsoft and meta with a huge round of job cuts saying it will slash 12,000 jobs is netflix a good-bye or a good buy. the ceo seats the executive chairman and later, is there a supplier

surprise coming? why you might want to get bearish on apple exposed names in your portfolio or you might not. plus, call it the year of the bull ahead of the lunar new year. optimism on wall street for china stocks in 2023 karl >> jon, stocks moderately higher to close out the week here nasdaq the big performer jumping on the back of those strong results. interesting day today. got back below 20, on pace with major averages all lower, led by the dow. options expiration today, so we will watch that and see what volume does this afternoon. >> and the nasdaq off 1% let's kick it off with alphabet. announcing layoffs whenever a company announces, we say what about alphabet. well, the stock is jumping on the heels of that announcement the ceo writing we hired for a different economic reality than

the one we face today after microsoft announced cuts of 10,000 and amazon announced another round of cuts affecting 18,000 employers earlier this week if you take a look at total before the pandemic, alphabet had 119,000 employees. third quarter of 2022, alphabet was at 187,000 employees, so it went on a hiring spree like its big tech counter parts even with the recent cuts, this company is still above pre-pandemic levels. similar situation for microsoft, amazon and meta. but we're looking at a stock chart. and investors seem to be optimistic tech so far regained its leadership this year if you look at what happens to the stock at the back of these layoffs, largely they are higher except in the case of microsoft. you might look at the comments at the beginning of the year when he said there is more pain to come. could be two years what are we going to hear from the other big tech ceos on their

earnings calls and could that spoil the rally we have seen if we say there is more wood to chop here because these cuts don't get us back to pre-pandemic levels. >> arguably, they shouldn't be cutting to pre-pandemic levels because the revenues are above pre-pandemic levels. but i think the question is there has been a velocity of hiring and growth of cost. and will the velocity of topline growth continue in a way that justifies even which they have cut back just looking at alphabet, they hired 30,000 people in the first nine months of 2022. this cut erases just 15 weeks of hiring and maybe that's fine if this economic situation that we saw in q4 is more of a bump in the road and then growth continues, then, fine, they can digest what they did before. but if they have to do more in the future because the economy significantly slows in '23 including even their business, karl, then i just wonder if

there is more to come. >> that's really the response of the street today, jon. as you point out, 12,000 is about what they hired last year. the real question will be what is their mentality going forward reguarding head count. amazon, alphabet and microsoft are three of the biggest countries in the world for a lot of engineers in tech, that fallback to big tech has always sort of been there. with that now gone, maybe you start introducing slack into the labor market. >> you know, i really wish that we had more details from alphabet i e-mailed this morning but they just pointed me towards their ceos better. we know they're broad based. but we know that alphabet right now is in a competition heating up over ai yes, they have been working on this for ten plus years but microsoft and open ai are making headlines right now. so you have to think that at this moment, alphabet is still

hiring like many of them in specific places. where do they trim they have been hiring a lot in cloud over the last few years. >> they're not cutting the ai engineers. that's a safe bet, right people in sales and marketing, recruiters have definitely suffered during this period. there is a lot of overhead that comes with this growth but i don't think they're cutting the ai engineers. >> certainly not ai, but what about some of the other moon shots? what else kind of gets on the chopping board >> right there aren't that many of those either so i think when you look at the full breadth of these organizations that certainly, yes, have engineers that are still in short supply and you look at the totality of what else they have, how deep might they need to cut if the economy goes south and how much has the over all labor market, the demand for tech savvy talent across all functions hold up to support that well, let's continue this conversation the question becomes, are these

layoffs enough are the companies doing everything they need to or just doing what they're allowed to do for more on this latest round of layoffs, we'll bring in cnbc contributor alex the way i set that up about what they're allowed to do, these companies are still making a lot of profit. and they are the big companies in the economy so even if they might want to cut more, it would look very bad for them to cut based on what might happen in '23 versus what's already happened in '22 >> absolutely. and there are risks to cutting more you do one big layoff. you plan it. you foreshadow it, right google has been talking about make lists of the lower performers we might have to do something next year. now it is actually happening you cut once and you cut big you don't want to keep doing this as you keep cutting, you have your high performers and innovative employees, they start looking about what else they can do what are their options so you do it once. you do it right. and then hopefully you don't

have to do it again. i think that's what's happening here. >> but i don't, alex i don't think that's what's happening here the reason why i think that is because these arrangements that we have heard from these companies where they're changing the way they're doing evaluations and how many employees get in the bottom tier, they haven't fully implemented that yet so it is not like they have evaluations and data on how to manage those folks that will happen in '23 and '24. so i wonder if we're heading into a situation where these companies are just a lot tougher about managing out people in order to be able to have room on the cost structure to hire some of those engineers that we were just talking about that they will need to build a future. >> yeah. i expect that to happen, too but that's separate from layoffs. you do this big layoff today and then you talk about what are your standards inside the company. i think everybody, including google, would admit that the company had gotten a little bit too soft and, so, as you move forward from today, what is your culture? what are your expectations from

your employees maybe it is managing out or maybe it is just saying you can't take it easy inside the company. you have to put your foot on the gas pedal if you are an employee i think that could end up happening. it is probably good for google you talk to a lot of tech employees that say they go to google to retire that can't be the case inside the company. you have to have people motivated to work hard if you combine that with this layoff, then potentially you are looking at a leaner but also stronger company moving forward. >> all right okay so the other side of that, alex, is a report they may be bringing back the big guns to help in those ai ambitions when they're facing endless headline after headline about open ai, chatgpd and microsoft. do you steeee that as positive the company in. >> i do see that as positive clearly google wants them in but the key thing to point to here is this is not a question of technology for google about

ai engineers, do they need them to make their technology on par with open ai actually, from all indications i have from inside the company, what they have lamba, which is their version of chatgpd is better than the chat bots out there. i think for google it is a question of will does the company want to put this out there you might meet people used to working inside google as a startup to say, okay, this is how we can productize it this is how we can ship it who better to end up pushing the company to that direction. they have about 20 different applications of ai and chat bot ai that will come out soon, and i can't wait to see what they have coming for us. >> so if we brought in that out, alex, i wonder, do you think we would be entering a moment in tech where founders need to become more involved do we need more input from jeff bezos at amazon after a tough few years? do you need that founder mentality? do you think that is something

going forward when we spent the last few years seeing founders in many cases distance themselves at the big tech companies? >> most definitely we have gone through -- with big tech companies in particular, this transition from the founders leaving the companies to moving to more managerial ceos people like tim cook inside apple. now, that worked out really well they were able to grow the businesses in times of peace but we're moving to times of war right now. not only does the market expect different things from these tech companies, putting a premium on profits and margins, but the competitions between them are starting to become more acute. look at what's happening with google and microsoft right now where microsoft is putting its weight behind open ai and might actually invest $10 billion in them according to rereports, right? you are starting to see the limits from the growth, demands of the market and now clashes to end up getting into the next wave of innovation like we're seeing with open ai versus

google more founder mentality, more inventive, more willingness to go battle. i think that's going to be something that we will see throughout big tech and even medium tech. >> alex, i'm glad you brought up apple because today the bernstein desk says, hey, tim cook, copy and paste from google's memo. they have teed this up nice for you. basically arguing you have cover now to make cuts of your own do you think that's a given? >> i do think it is a given. and i think apple is going to look, you know, to the market at least a little awkward if they're standing out there and saying it will keep its costs the way they are, when everyone else is making its moves to be more efficient that is the mandate from the market right now we will have extended. we know this we will have extended high interest rates coming at us, at least for the next year, maybe two years, maybe longer. this changes the way you do business at apple, facebook, google, microsoft and we're starting to see this all

throughout big tech. yeah, i don't think apple can standstill. >> that said, apple didn't hire like the rest of those over the past two, three years, so maybe they don't have to cut like the rest of them either. alex, thank you. >> thank you. coming up on the show, is netflix a good buy or a good-bye a blow of a quarter. we're back to the analysts who think the rally is just getting started. plus, president biden's tech scorecard. we will go through all of that "tech check" is back in a moment (♪ ♪) how do we demonstrate our unmovable strength? (eagle call) nope.

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let's turn to the only stock trading higher than alphabet, and that is netflix. the stock popping after smashing expectations for net sub ads last quarter the move comes despite a big earnings on revenue in light of expectations netflix announcing that co-founder reed haasings stepping down, taking on the title of executive chair he hands the reins to greg peters who leads the company

alongside ted serandos talk about the quarter and what comes next it's great to have you both. jessica, let me begin with you and ask. you took out a bunch of numbers. is this safe to own? >> yeah. i think there are a lot of drivers that argues that the numbers probably go up higher over the course of the year. if there is any risk in the coming year, it would be in q1 as they kind of pull out and crackdown because they expect to turn at the beginning and quickly correct. password sharing will be evident in qs 2, 3 and 4 it will be done this year. these are subs that basically, as they say, borrowing other subscriptions. for them, it is very high margin they don't have to market to these people

they don't have content costs. they don't have technology costs. so they will be high margin. whether they could be 25%, 50% or more, we'll see then there is the advertising tier and here is another high margin business where i'm super bullish on this area because they have skill. they have reach. they will have high quality premium video, and they're capturing all of those videos away from television in a very uncluttered environment with soon to be aggressive and targeted advertisement the tier will be a growth driver for many years but i do think that numbers are more likely to go up than to go down. >> interesting julia, you and i spoke earlier in the week about what we might get in the way of guidance on the ad tier. we thought it would maybe not get as much since it is so

early. they are still in this crawl stage as opposed to walking or running. did you get more than you expected >> i mean, i think it was very early days, and i think they were clear that these are very early days, but they actually said they believe their ad business will top what hulu is doing in the next several years. so making it clear that near term, next couple of years, they expect to be at the level of hulu or greater in terms of generating ad revenue. the message they were saying is that even though we are new to advertising, even though it took us six months to get our app business off the ground, we are confident we will be able to scale it incredibly quickly. that was the key message there the other thing i want to flag is they mentioned that the concept of free ad supported channel which is something jessica asked about in the call because she was the analyst facilitating the video call last night, that they are open to that there will be multiple ad tiers. the fact they are open to a free

ad supported channel, that could reach more consumers and broaden that potential user base even more broadly so i just would flag that fast channel. and also some potential opportunities that they pointed to, including the collaboration with nike around fitness it is just an experiment for now, but there could be more potential around that down the line. >> yeah. jessica, i would love to get your response to that, along with other big bites at the apple they may take either on sports or gaming or as julia said fitness you have been constructive on rival names like wbd how do they respond to this environment? >> they did go to hulu as a target hulu's advertising is north of $4 billion as we understand it that's u.s. open remember, this is a global advertising platform i totally agree, this is a long run way for growth fitness, which i think is an amazing -- potentially amazing category they didn't jump all over it

when i asked that question, but, you know, for someone that does classes online, if they could make this work with nike, which is a great brand name, you basically get the service for free if you only do one class a week the other areas are consumer products sports, you know, if they can buy something like the wwe o something else, if they could own the sport, it would be very interesting. there are a lot of ways they could do another thing they said is that spending will be fluxed down free cash flow has just exploded, so they have an incredible balance sheet with massive free cash flow and a number of very obvious growth drivers for the near term. as far as warner brothers discovery, i think it is early days when they launch their combine service in q2, we think it will

be one of the most interesting services because they will re -- you know, it will be a whole new user interface with new content, all new product. we expect them to have news, sports, entertainment, kids, documentaries, nonfiction reality, et cetera it will be a very broad based offering so we don't know it. we don't know the pricing, but it is the one company that has a very deep library that is completely undermonetized, versus other competitors i think netflix is running circles around everybody everybody wants to catch up. one last point to just throw in because i think julia did touch on this. they announced the management transition, which is so smooth and it's -- it's just it's a very easy transition it seems like it will be a successful transition. >> yeah. we were talking about this this morning with kramer. if every company could do this

as smoothly as they appear to be doing it. >> yeah. i would just say one thing that's important to note here is that greg peters was very much involved in the advertising business from what i understand, he has been interested in that ad business for a while i think his elevation to that role, he is the product guy. and then you have ted is more of the content guy. the idea that the two of them together will be able to manage this company i do have to say it was raised in several articles today that if you have three people involved in making decisions for a massive company like this, the question is which vote will win at the end of the day. there has been challenges with co-ceo roles in the past their roles are so clearly delineated that they will be able to compliment each other. i do think it is important to note the fact that greg peters is tied into that there. >> really great, comprehensive look at all the moving pieces right now surrounding the name, guys appreciate it. great weekend, jessica

thank you so much. and julia. up next, president biden's first term hits the halfway point. we look at a scorecard on regulation, cyber security and other tech issues next plus, what nordström can tell u about the state of the tech consumer a lot more "tech check" straight ahead. to new opportunities. your dedicated fidelity advisor... -surprise! -for you, mama. ...can help you open those doors. by proactively reviewing your entire portfolio. with an eye on taxes and risk. doors were meant to be opened. the hiring process used to be the death of me. but with upwork... with upwork the hiring process is fast and flexible.

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welcome back halfway through biden's first term of presidency, where do we stand on regulations, krcyber, security, crypto lots of different areas to cover. >> yeah. a lot of different areas, but both the white house and congress have talked about being tough on tech, but two years into the biden administration, far-reaching regulations have remained elusive president biden has repeatedly called on congress to write laws that rein in the power of these

companies writing, we need bipartisan action from congress to hold big tech accountable we've heard a lot of talk. it is time to get something done that comes after the white house lost its most vocal proponent for a wholesale breakup of facebook and other companies tim wu returning to academia losing the north star at 1600 penn the federal trait commission has launched a process to curtail business's ability to share consumer data and is now studying comments received from stakeholders late last year. one of many regulations that could restrict business in the industry a treasury-led committee is studying a ban of tiktok a senior official tells me no recommendation has been made to the president. congress could take its own action in the meantime and lawmakers have issues with the platform's legal immunity and performing the section 230

protections could produce some bipartisan support house republicans have also said they're going to be probing the biden's administration as they search for evidence of what they see as muzzling conservative voices and evidence of possible collusion. so there is a lot of talk on this front, but not much action. >> i was just going to say you took the words out of my mouth. that's the takeaway. lots of talk, not a lot of action it is a reason why investors never seem to trade these stocks based on regulatory action what grade do you think the administration would get if the europeans were grading, which have obviously been a lot more active on this front >> well, certainly there are stark ideological differences between the u.s. and the european approach to especially the big tech companies these are domestically created companies. the u.s. wants to be able to protect the entrepreneurial spirit that led to the company's creation while europe is more

intent on policing them. i would give the administration a grade of c they have remained very confidently on message for the last two years, and they have begun some of these processes to produce regulations down the road it is just there hasn't been much that has been produced by either the administration or congress for that matter in the last two years, guys >> thank you >> thank you, kayla. i think i would do a c as well coming up after the break, weak retail numbers. that no show from nordström. warnings from lululemon. plus, is a supplier surprise ahead for stocks relying on apple? th'somg nt. stay with us blondie's “dreaming”] [music playing] ♪ imagine something of your very own. ♪ ♪ something you can have and hold. ♪

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92% still active? seems high. seriously? it's just a bike. wait. they make a treadmill with an intuitive speed knob? yeah. want to try? 92% stick with it, so can you. rent a peloton bike or bike+. terms apply.

welcome back to "tech check. i'm con december ta brewer tim kaine will run for a third term he raised speculation about possible retirement this month his plans to run again will ease democratic worries about holding on to that senate seat he says he has four good reasons to stay in washington. >> here's why in conversations with friends and especially with ann and my family i decided to

run for a third term i'm a servant. i love virginia. i'm proud of what i have done. i got a whole lot more i want to do. >> good thing you could remember that sometimes you forget if you say there's four existing home sales fell in december it was the 11th monthly decline in a row the sales rate is lowest in more than a dozen years state street and regents are up. both states getting a boost from higher interest rates. that's the news for right now. >> thank you very much two hours into the trading day, let's get a check on the markets. we are near session highs with the nasdaq leading the gains on the back of, yes, netflix earnings and alphabet's layoffs. here are some of your movers at this hour. a big bump following a fourth quarter earnings that beat up nearly 20% pager duty as well getting a bump after morgan stanley hikes

its price target to $36 on improving profitability. jon, that stock up nearly 6%. >> all right, d. let's say on the markets the question, is this latest wave of tech layoffs just about overhiring and correcting for that or is the economy slowing down in general. wayfair cutting 10% of their workforce, twice as big as a cut it made in august. then there is nordström cutting sales after lululemon and macy's after the last couple weeks. let's take a look. good to see you. i wonder if this is enough, what these tech companies are doing, given how much they hired. and if it's not, does that mean potentially their margins get squeezed later in the year if the slowdown we're seeing in q4

continues. >> jon, thanks for having me that's a great question, is it enough let's look at alphabet's numbers. they grew in 2021 by about 24% revenue only grew by 6%. you saw margins decrease you saw earnings down in that quarter in comparison to q3 2021 so one thing that you mentioned is there was an overhire i think that's clear to see. you are seeing all of these companies pull back on that and restructure the other costs. also the factor of the demand, the outlook that you are seeing companies like salesforce said that is just not the same as it was in 2021. and, therefore, they're not going to see the same revenue growth in these periods. those two factors are heavily being weighed. if we didn't see enough cuts now, we would possibly see companies do second rounds and third rounds as we see tesla and other companies do to

restructure that income statement. the ability of the companies to show earnings. >> that's part of my concern if i'm looking at the numbers, i'm pretty sure he said he wanted 25 -- 20 to 25% better productivity out of the workforce. then you get this 5% cut okay that doesn't get you there also, mark b. said the latest hires they had weren't as productive as the ones before. he was trying to talk about slingshot effect of this cost cut now in the second half of the year doesn't that only show up if the growth trajectory continues into the second half? >> yes 100% i think one of the factors is going to be not only just the cuts, but if you look at some of the other things that are impacted into the cuts like attrition or people moving jobs that you have that tight labor market, that will push let's take the numbers and just project 8 to 9 or 10% and factor in those other factors that's something they could probably lean on in the fact they may have done enough now.

but if they haven't, you are certainly right. there will be more cuts because at the end of the day, investors are looking at the profit and earnings and those earnings estimates have come down they are coming down if you look at what they're projected for the 2023 outlook. >> so how receptive will investors be if the companies say, yeah, we will have a few quarters of pressure on gross margins? but this is an investment in the future so just suck it up, investor, and understand that, you know, in a year or in a few quarters we will be back to where we were. if that's the message, is that priced in? or do investors get disappointed >> so i think personally, you know, for me that's what i'm going to be looking at if a company is making those restructuring to be more e sp -- efficient, that's code for obviously making cuts, being more efficient and putting resources in the right places. that will be enough for me especially when you look at the

big tech companies because there will be a comeback and better earnings at the bottom at some point a recovery or better numbers in the top line if you look at what netflix did in the past quarter, the subscriber numbers fairly beat what the destinations were that's bringing in new demand and just the fact that they had great confidence looking for those companies that with stand these quarters and a downdraft or a soft recession and have a great product, that's what you are looking for that's what personally i'm looking for. >> earnings coming up. we will see how much conservatism is built in. >> thank you, jon. getting a news alert this morning on gold man sacks. >> the sock down 1.5% on a pick up in volume as you can see in the charts that are going to come up, we have seen a sharp move to the downside this is on the heels of the wall street journal reports citing

sources familiar that the federal reserve is investigating goldman sachs in its consumer business to determine whether the bank had appropriate safe guards in place as it ramped up its consumer lending business. this is a source reported story. the fed is looking at whether they exercised appropriate oversight over that product and whether it has management or governance problems. all of those headlines coming out with that journal story are leading to the decline you are seeing in goldman sachs shares we'll bring more when we know more i'll send things back over to you. >> yep coming even as the cfpb is probing the credit card business even as we're close to session highs, dow is up 126 when we come back, why the apple exposed names in your portfolio may be at risk from a suppliers surprise we'll explain that one after the break. plus, year of the rabbit or year of the bull why wall street is so optimistic about some of these names in

china for 2023 when "tech check" tus.

welcome back with apple increasingly looking to move design in house, which suppliers might be most at risk. steve koeis exploring that. >> the latest versions of the macs with the newest apple chips. they're almost finished ditching

intel for got. they're working on 5g modems to replace qualcomm modems. now, there are plenty of other suppliers with key components for the iphone and other products that could also be at risk ifapple decides to bring that tech in house, too. these are companies with significant dependent on sales to apple like lumentum or qorvo. and plenty of others including jabil, sony, you name it there are dozens of them no indication if apple plans to ditch these technologies yet, but it is a trend that apple investors and these suppliers need to be aware of. shares of many of these names are up after the selloff we saw across tech in 2022. so what to watch out for moving forward, signs of fallen demand now that the production issues in china are largely over.

that's what could impact these stocks in addition to moving in house. >> steve, you and i were talking earlier traditionally that the risk to these suppliers isn't just that apple moves them out it is the tradition. apple will say, here's a new technology we want go ahead and you build it on this, you know, investment we're going to give you. we get the first items off the production line, and you will get tiny margins after we're done, you can figure out how to display it. >> they make lcd panels for apple, and they have been struggling lately because the entire industry, apple included, is moving away from those genes and they have had to be bailed out by the japanese government the real question is do they bring it in house or not. >> steve, if apple like the rest of big tech, looks to do more cost cutting against this macro backdrop, do you think there is

a chance it scales back these vertical integration considerations >> yeah. i know we could talk about this all day, but apple is the only major big tech companies that has not issued these mass layoffs we have seen yeah, they will look to cut costs going in house they're doing it right now with the 5g mode of business they bought from intel for $1 billion. started their own modem situation down there in san diego right by qualcomm. it is not a cheap process to do this yes, if they're looking to cut costs, maybe relying on these suppliers moving forward is the way to go. >> except when you do go in house and it succeeds, your margins do better. apple is making a lot more money on these m chips. >> the licensing agreement they have, apple pays a few bucks for every chip they sell to qualcomm they don't want to do that anymore. >> thanks. coming up next, why it is time to turn bullish on china

an explanation of the street's newfound optimism abroad shares continue to fall, crossing the tape a few moments ago about sources saying a fed investigation is in place into the consumer business. more on that story in a moment stay with us

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welcome back to "tech check. as china gets ready for its new

year's celebration, the bullishness around its reopening continues to grow. ended just shy of a bull market, capping off a fourth straight week of gains. global funds where net buyers they expect chinese companies to report their highest earnings growth in about five years for more on this big test for china, the commentary about china's reopening and the implication for global growth have really taken off this year. >> and now the lunar new year, karl, this weekend over two billion trips are expected during the holiday which unofficially kicks off this weekend if you look further than that, due to a lack of transparency, investors have been using mobility data to track the reopening across the country so far this month, weekly operator flights on the mainland have risen to 75% of pre-omicron levels that compared with 25% in december and then there is daily

visitation to macau from china, recovering to 34% of 2019 levels that according to morgan stanley. expect a further improvement over the lunar holiday beyond macau and hong kong, revealing travelers. now, the speed at which travel has rebounded that is prompting strategists to raise their gdp targets to 5.7% for this year. estimating 6.2%. but anxiety over the spread of covid has only heightened in recent days. president xi jinping finally addressing the risks saying he's most concerned about citizens in rural communities outside of the big cities, but that hasn't stopped investors from putting up chinese stocks and even some of the travel related names, kppedia and airbnb up. china also a topic at this

year's world economic forum annual meeting key business leaders weighing in have a listen. >> china is once again open for business, once again china is going to be out there in the world. >> china has reversed most of the policies that they put in over the previous two to three years, which were really slowing their economy. >> when we saw the reopening in the u.s., we saw an important surge of activity that came as a result of that it's entirely possible we could see something similar associated with china reopening china, which has opened up quite dramatically with a human cost to it but nevertheless should open well for stronger growth there. >> brenden, hardly a bearish voice to be found at davos and otherwise. i don't think you're coming in

to be bullish either what's left to be priced in here and is the market complacent when it comes to the very real risk that is kicking off this week with the lunar new year potentially being a massive super spreader event >> i think a lot of investors are still very skeptical about this rally i think there's a lot of professional investors are still on the side lines, but some of that skepticism or even call it scar tissue based on a tough market in china in 2021 and 2022, i think that's the dry powder that could lead to higher movement in chinese equities because i think, again, there's a lot of money on the sid lines that hasn't gotten back involved and i think markets tend to grind higher that climb that wall of worry in this type of situation. >> some might argue skepticism for good reason. let me point to something we were talking about not long ago which are golden shares. these are special interest stakes in some of the biggest

chinese companies that are held by beijing so effectively putting them or possibly putting them in control of the communist party. two of the k-webs biggest holdings does that compprise what the kweb setout to do in the first place? >> ultimately the stocks within kweb are the transmission engines for consumption as it occurs online. part of the reopening trade for china is the rebound in consumption, which we think is really the way to play china in 2023 certainly china is well-known for having very district data rules, user laws -- >> you said that last night. what i'm asking a lot has changed in the last few years those goldman shares specifically does that change the story here? these companies you can't say they're run by the management when beijing has a sort of

influential stake in them. are you saying nothing has changed in the last few years? >> certainly companies have to adhere to the local laws, and certainly many u.s. tech companies chose to leave china google chose to leave china because it's unwilling to adhere to the local law companies have a choice, and these companies are choosing to take advantage of big opportunity, and that requires adhering to local laws when you go to europe there's a lot of u.s. websites don't work in europe because those u.s. companies refuse to adhere to the eu's general data protection rights so, yes, i mean this is an element of doing business in china. >> some might argue that's different, though, than the communist party taking a stake but, i get your point. thanks for being with us up next goldman on the move on reports its consumer business is coming under scrutiny by the fed. we've got the latest and don't forget to subscribe to our podcast, the tech check

podcast available wherever you usually download those things. tech check on tv is back aer e rereak [music - cover of blondie's “dreaming”] [music playing] ♪ imagine something of your very own. ♪ ♪ something you can have and hold. ♪ ♪ i'd build a road in gold just to have some dreaming, ♪ ♪ dreaming is free. ♪ accenture, let there be change. ♪♪ ♪ a bunch of dead guys made up work, way back when. ♪ ♪ it's our turn now we'll make it up again. ♪ ♪ we'll build freelance teams with more agility. ♪ ♪ the old way of working is deader than me. ♪ ♪ we'll scale up, and we'll scale down ♪ ♪ before you're six feet underground. ♪ ♪ yes, this is how, this is how we work now. ♪

we probably took on more than we should have, too much too quickly. >> we want to come back to that headline crossing a moment ago from the journal the fed supposed to investigate the consumer business. such an implication for fin tech let's bring in kate rooney you and i were discussing this during the break this is really why fin techs are fin techs and didn't start with banking licenses because they're regulated in a different way >> completely underlies the operating in this consumer business this fin tech play book while being a highly regulated entity like goldman sachs. they were competing with sofi, robin hood, and it really is a loss leader. it's expensive to offer people that type of yield when really they're getting nothing on those deposits and it's a way to

attract customers. their play book is exact when they're going to pay people to get people in the door the problem for a lot of fin techs and goldman sachs we've seen those aren't necessarily sticky customers they're not the ones going to stay around and maybe be lifelong bank customers. they're looking for high yield, and they're chasing it and might go to robin hood if you don't give them 3% >> at one point goldman sachs was offering almost 3% apy in savings accounts, but that was really an outlier in the banking space. what do you think this means going forward? do they have an easy out to say we're not going to offer that? >> the banks have conceded and now that rates are going up they'll have to meet in the middle and pay a bit more on customer deposits. jp morgan is an interesting example of this. they haven't felt enough pressure to haveto raise interest rates and people still clearly use them as their go to.

>> something we keep talking about are these fin tech ambitions of banks going forward. >> going to be an important end of the session with the options expiration and next week a ton of big names with cyclicals, microsoft, j&j and some in tech. let's get to frank holland and the half and welcome to the half time report i'm scott holland in for scott wapner the question here is the january rall investors brace for a huge week ahead. has the stock gotten ahead of itself we're going to debate that and much more with our investment committee today. and joining me right here on set the lovely and talented shannon and jenny. ladies, thank you so much for coming in person let's get a check on the market righ