like to take a look at a few individual stocks if you can. maybe check out shares of apple, which were under pressure earlier today. that would be impacting the nasdaq and the dow, so if you can take a look at that very quickly, looks like right now -- never mind. not coming. let me see if i can see apple shares here. they were under pressure. now down by about 3.6%. so that explains some of the weakness we've seen. now it's time for "squawk on the street." ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. david faber is at goldman's communicopia conference in san francisco, where later today he'll have an exclusive with goldman's david solomon, 4:15 p.m. eastern time. in the meantime, futures red as some of the labor data today runs warm. jobless claims lightest since february. our road map begins with apple's china challenge, shares moving lower on news of a broader iphone crackdown.

that decline also dragging down the broader markets. nasdaq on pace for its fourth straight day of losses as stocks continue to shake september here. and media at a crossroads, while wbd is still betting on the cable bundle. jim, you discussed this on twitter today. it looks like this is going beyond just government agencies. >> i think that -- got to go back to when obama was president. 2015. he meets with xi, and xi says he has no designs on the straits of china, and as soon as he leaves, he begins to have designs on the straits of china militarily. this is, unfortunately, a pattern. it's not something new. president xi meets with -- well, gina raimondo meets with number two. she reiterates, you're not going to get the chips that are artificial intelligence. that's really what's at the crux here, but she says, listen, go to disney world, really try to get things going. shanghai disney.

right in her face, didn't wait, didn't even wait 48 hours, basically, and says, listen, we're going to ban the company that is made in china for china. perhaps the best combination we have in terms of what you would like to have as a relationship with china, and so carl, i come back and i say, you know, this ban really does matter. we don't know whether government people were already using huawei, but it's the tone and the attenner. >> i know you watched some of the b of a analysis on this. >> yes. >> estimate maybe 5 to 10 million units are at risk here. every one million unit's about a penny in eps. they do think the timing between this and the huawei so-called breakthrough is interesting. >> yes, it is. david, you know, one of the things that's happened here is that we actually don't know. i want to see some lines or no lines at the apple stores. but we don't really know how

much apple was entrenched with people working in the government anyway because the government has been promoting huawei. i don't know whether one comes in and whips out their iphone. you've been in china. is that the case? >> yeah, you know, i don't know either. it's a good question, jim. i think, listen, the bloomberg story that carl also cited confirming "the journal's" reporting from yesterday, but extending it to the fact that this ban may extend to state-owned enterprises. that's got to be a bit more concerning. if you don't let people come to work with their iphones at state-owned enterprises, you guys know that's -- a lot of people carry two phones. that could absolutely dampen demand and certainly you can't overlook the coincidence of huawei coming up with a new entrant into the marketplace at this time. >> right. the 7 nano, which is big, but it's used -- by the way, carl, arm is in the apple phone. we got arm coming up. it's going to be an important

deal. one thing i do want to say is there is some fickle nature to the chinese government. they have, at times, changed their minds. i know i have an own it, don't trade it view on apple. i met with jeff marks this morning, my colleague, and i said, do we have to change it? we said, what happens if we change it and it turns out where this is one of those things where it's not as big or you have to take the view of morgan stanley, which was a very positive piece, but seems to be written before most of the stories come out. >> there is a sense, david, that this iphone we're going to get, we think, next week is going to be a little more revolutionary than some prior units. wedbush today thinks they're going to add a hundred dollars to the price of the pro and the pro max. at the same time, as the street sort of kicks around apple these days, i don't know if you saw bernstein earlier in the week. i'm sure jim loved tony comparing apple, after three quarters of negative revenue growth, to ibm ten years ago.

back then, big berkshire holding, big index weight. tony, we know, has not been a fan of apple in recent years. >> yeah. i'm sure -- >> i don't think you have to say anymore. >> we'll see. i don't know. yeah. you know, it could happen, i suppose. it seems unlikely. go back to -- i don't know if he's equating to what ibm's market cap is now, jim. although, you know, when it does come to the chinese and apple, obviously, we discussed how much manufacturing of the iphone is clearly still in the country there. >> it's the biggest employer in the country. >> what is the dynamic there? is it -- is it possible that this continues into something more perhaps even worrisome for the company? >> well, david, i do think that we're beginning to sewe an evolution of really an insular evolution where i think that president xi has really, you know, it starts with covid, the way they handled covid, but i think they're backing away from

all countries with the exception of russia in terms of who they are dealing with, and it reminds me, sadly, of 1951. i don't really understand what exactly they're trying to do in terms of alienating the companies that truly have -- david, apple has the best relationship with china of any company in the world. why would you do this? >> yeah. i mean, apple has a strong relationship there. tesla, obviously, has a very strong relationship in the country, given the production that comes out of shanghai for that company. carl, by the way, on the new model, i would add, it's interesting, mike seifert said, i haven't seen it. i don't think stankey had seen it either, the man who runs at&t. typically, at these companies, they have teams that sign separate ndas so that they can make sure everything is interoperable and done, but the ceos these days don't, apparently, get to sign those ndas, and so they're waiting like even else to see what's

unveiled. >> that's interesting. by the way, today, i think it's needham argues that a.i. and that big push will elevate microsoft, google, amazon market cap above apple's in time. >> that would be something, because i think that apple in its own has a.i. they just, unlike these other companies, they don't feel the need to get on their show and say, they have a.i. one of the great themes is that you'll have -- i haven't done this yet, but you might have a carpet company come on and say, listen, it's all about a.i. really. when it comes to tool and dye, it is a.i. you know, david, we've gone too far in terms of who has a.i. and who doesn't. >> well, listen, your point's an important one, and i have been able to get out here and talk to a number of different ceos in general, and everybody is -- not everyone -- but many of them are testing generative a.i. right now, but not really using it and certainly not at scale within the organizations, but there is a belief, let's call it, midpoint of next year, that you

are going to see a lot more applications of a.i. in the enterprise being used, and potentially adding a great level of productivity. that obviously becomes a key question. will it enhance margins, and is that already accounted for in the market in terms of so many of these companies that mention their efforts in a.i., in terms of using it, not actually being part of the chain of -- that provide the equipment for it, namely nvidia. so, you know, it does come up a lot, jim, and i think it's a very important thing that we'll be monitoring through the course of the next 12 months. >> thank heavens i had someone who speaks in english last night on "mad." george kurtz from crowdstrike. crowdstrike is arguably other than nikesh aurora and palo alto, the best when it comes to cybersecurity. he says, you have a large language model, a.i. instead of having a query, which you then give to a bunch of code

writers who then go in and figure out how to put it to their system and then come back and decode the code and then go to the person who's in charge of security, what happened is basically you would have someone who says, listen, i hear there's a lot of north korean threats. who's being hurt? boom. are we protected against north korea? boom. it's the actual person, carl. think about all the people you don't need if the actual person can speak english to a machine and get an answer. >> rather remarkable. >> well, i mean, productivity is something we thought we'd got a bit of in q2. these revisions weren't so great this morning. 3.7% goes to 3.5%. unit labor costs go up to 2.2. bulls can't get away with the data. >> this is a -- we got a september song going here, david. so far, in september, what's been good? david, even dave and buster's was bad. >> you know it's trouble when that happens, don't you? >> well, you're out there. is anyone saying anything good about the strike?

is that a good opportunity? how about the strike in the autos? we've got a terrific quote, i think, from shawn fain last night. i know he thinks the billionaires are liars and frauds. i think he took it up a step on last night. you don't think so? on last call? >> there's a bunch of news on the strike front. do we have the fain stuff cued up? >> do you have the ruther stuff from '50? >> the uaw is making a counteroffer to ford. meantime, stellantis is planning its own counter this week. interesting graphic out of "the times" today that argues even if the uaw were to go, that would be almost half a million workers involved in a work stoppage this year. it won't even be above 2018. >> no, and remember, right now, everybody's building inventory because of a strike. so then, suddenly, you see bronco ads. my daughter has one. she had to wait six months for it. now they give me $4,000 if i buy

a bronco. we're in a situation where labor is ascendant. yesterday, rock tefeller, giant picket line. are you sensing it's time for labor, capital's made enough money out there wherever you are? >> wherever i am? wherever i am. no, not really. i haven't seen any picket lines here in san francisco. not seen much at all on the streets. so, no, jim, i can't really weigh in on the state of labor right now, other than note what you did, which is, of course, certainly in the area that i cover quite closely, media, it's having an impact. you know, we'll get to some comments from david zaslav made here yesterday at the communicopia conference if we want about the strike as well, talked about backers from viacom. there's a hope when it comes to the actors and writers that they get something done, as you might imagine, soon, and i think few anticipated it would go this wrong, certainly for the writers now that we are in september. when it comes to cars, i have to

tell you, just apropos of nothing, and i wish i had the video, but i was in an uber yesterday, and we pulled up to a light. i had a driver. i looked to my left, and there's a waymo car, and there was no driver. and that freaked me out, i got to tell you. that was crazy. >> well, i mean, we know that there are videos of cars that seem to not be able to make up their minds. i know that waymo has been riding around for a long time in san francisco. maybe it's time for arizona. you know, carl, when i call an uber -- >> it's just weird when you actually see it next to you. it's like, whoa. >> remember, they're safer than drivers. what can i say? they don't get drunk. they're not tired. they don't go on strike. they don't care about benefits. >> we talked about it on that set for so many years. i mean, we can go back five, six years where we were saying, oh, they're coming, and of course they didn't. but now they are. now they are. slowly at first and then

suddenly. >> there is a story on the tape this morning saying self-driving cars might finally be for real this time. i mean, you've talked about black ice and how hard it is. >> that was jensen. i was dealing with jensen huang, and he was running these simulations, and he does a lot of automatic, and he said, look, they don't know black ice. humans don't either. but i want them to know black ice, david. i don't want to be in a waymo with no driver and there's nobody even says to me, hey, you know what, i don't understand black ice. i'd like to hear it from someone. hear that it's dangerous. what do you think of that? >> all right, well, don't get in one when it's really cold if you're somewhere where it gets cold. >> there you go. isn't that the real takeaway of the a-block? >> actionable. that's what we do. when we come back, we'll talk more media landscape as david said with what warner brothers' david zaslav had to say yesterday at communicopia. ceai, aeo and calls this morning

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we have been at the goldman-sachs communicopia conference the last couple of days, of course. technology and media. one reason why they moved it from new york to san francisco, but media is still a part of this. david zaslav yesterday, the ceo of warner bros. discovery, presented, and of course, as we

know, these businesses are challenged, to say the least, right now in terms of linear cable networks. we've talked a lot about charter's dispute with disney right now and whether or not that becomes a seminal moment in terms of the distributors saying, forget it, we're done with the video business overall, or whether it is more typical of the disputes we've seen through the years. but another question, of course, is the profitability of the streamers, and hbo max or max as it's now known is akey one. p peacock for our parent company, comcast. is there an opportunity at all to actually put together in some sort of bundle many of these streaming properties to make it easier for the consumer and perhaps to enhance profitability for all of those who are producing content for those various services? zaslav entertained that

question, at least in a broad fashion yesterday. take a listen. >> we do have a marketplace that is a bit challenged, and it's one of the reasons why you look at the marketplace, and you see a lot of players in the market losing a lot of money. we have 15, 16, 20 apps that offer content. if you're a consumer, imagine ten years ago, you're watching tv, and you're watching discovery, and you want to watch espn. you got to download another app and put in a verification. and then you wanted to watch a show. you have to google where that show is and then go and put that. in the long-term, it's not a great consumer experience. consumers have adapted to it, but in the long-term, i've been a big advocate for bundling. >> yeah. so, you know, interesting comments from him on that and on the strike as well, as you might imagine, guys, but it's something to keep an eye on. we've talked so many times, jim, about the fact that, listen, the expectation somehow that this incredible ecosystem that we operated in for 20, 25 years in

terms of cable and the programmers for it and the margins that were available, the idea that somehow that could be replicated in streaming world, nobody said it ever would, and i think at this point we can all agree that it probably won't be. netflix, of course, does manage to make a good amount of money, though. >> yes. and netflix -- the love for netflix continues. david, david zaslav did talk about it but did say, the deal we have coming up with the nba is through '25. david zaslav is saying these deals go long. how much does it matter if the nfl football, david, is a big hit for youtube? because if it is, we know that alphabet has the money to just say, you know, david, we love you, but you're done. >> listen, i think the presence of youtube, amazon, and apple in terms of bidding for sports rights is, without a doubt, seen as a threat to a certain extent, because as you say, they can pay

any price. i had somebody the other day say, why at andidn't apple just the entire nfl? that doesn't make sense. nfl's not going to do that. not the league. >> they could buy all the mls teams. >> yeah. so, it is an issue when you're a warner bros. discovery or you're peacock or any of these -- paramount or any of these companies, disney, dealing with an apple or amazon or alphabet and the capital that they have available to bid for content and sports rights. you're just not even in the same game. >> no, and one of the things that you mentioned is trying to find things. you have peacock, carl, running a -- doing a wild card game. you'll have amazon on thursday. bloomberg had a piece saying it cost $1,600 to get all of these. how about if someone could come up and say, you could have the nfl for $500, one station.

can you imagine how great that would be for america? we had jason roberts on this morning. one place, rather than all these different places running around and that stupid thing i got on top of my place. i got places from 1480 or something. i got a dish on top of it. christopher columbus meets ikea. what the heck? >> maybe that's why, david, the sell-side reaction this morning, deutsche saying disney has more to lose than charter does, and needham, laura martin, one of our favorite outside voices, says disney should cave, i think, in her words. >> $4 billion on the line, david. what do you think? >> listen, yeah, it's a dispute that requires a good deal of attention, and it's been getting it because it is, as we've said, it may prove to be different. it may not. it may simply be, they get a deal done, and as we said, though, it's going to be monday if it's going to happen, because there's -- once you go past not airing the new york jets, monday night football in the new york area to your millions of

customers, then you've said, we're done. >> there's dalvin cook. it's ridiculous. geez. what do you got, like, a wide receiver team? geez. he drafted first, probably. >> we'll get cramer's "mad dash," countdown to the opening bell here as futures still a little bit sticky as the macro data runs hot today. power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades

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take a look at some nasdaq 100 laggards. apple is right in the middle of that list. index is coming off two negative sessions and three on pace for the first negative week in three. we'll see how large cap tech holds in this morning when we get the opening bell in about five minutes. in the meantime, you can catch us any time, anywhere, just

listen to and follow the "squawk on the street: opening bell" podcast.

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responsible investing. time for cramer's "mad dash." >> carl, i'll tell you, in a sky-blue sea of red, you've got one piece that i really like. wells fargo is saying channel checks for mcdonald's, hold to buy. mcdonald's has been stuck for a while. these numbers sound absolutely terrific. they just think that mcdonald's is going to stand tall. it has been a dow stock that has lagged. i like the call. they did say, by the way, also yum tracking ahead. they don't like burger king, which is, i don't know, i happen to like that stock very much, but where's restaurant brands? but i think this could matter. it's a stock to watch, because if you can get a little momentum in the dow, maybe you can separate some from the nasdaq. it's happened before in september. >> yeah. $310 target. they did say firing on all cylinders. btig, though, had a good chart yesterday looking at restaurants versus gas, and you can see right in the mid part of the

year where gas was bottoming and restaurants were topping. >> no, i know. and we use -- when i was a hedge fund manager, you just short cracker barrel every time because they're on the interstates. i'm not going to say that's wrong. these are very international companies that people love and if they've done nothing, i don't think they're going to get hurt by that. if they've done something, yes, they could get hurt. >> certainly huge dollar exposure here. >> look, it's september, and i did this ode to september for the club, for my investing club, and i just said, look, this is a time that tries men's souls. it really is a -- and i should say people's soles but that's back to thomas paine. and i look at this period, and i remember, temper your expectations. there are companies, hedge funds that have a lot of profits, and they're not going to let them go in september. they're going to book. >> you have said, wait until -- what's that? wait until oil's down three? and the ten-year -- >> we got to get that down.

look, i'd take 4.25% but just stable right here. >> let's get the opening bell here. it's a special one for the nasdaq. our colleagues at "fast money" celebrating the launch of their new studio space and 16 years, jim, at the market center. >> that's sensational. what a job. >> congratulations to all of our friends and our president, jason sullivan, doing the honors. dan, the head of business news. sandy, senior executive producer. brad ruben, who makes the trains run over here. >> it's hard to realize outside how much we love our colleagues, and look, melissa lee is just incredible. of course, kc has just done a great job. look at -- casey sullivan. i'm so proud just to see how long they have going. >> there's guy, karen, tim, dan, all the regulars. it's really an amazing show. >> i know. it's an institution. institutions are hard to come by

these days. >> at the big board, energy company eqt, and we'll talk to the ceo, toby rice. >> he'll have some very good comments. they're one of the lowest cost producers of natural gas. they've been around for a very long time. most of these guys are reluctant to ever say, well, i don't know if -- i just focus on my business. he'll give you a forecast. >> jim, we mentioned a.i. in the a-block. the ticker, a.i., narrower than expected loss but they're ramping up marketing and sales as the revenue forecast remains unchanged. >> i didn't like that. i happen to be a big fan of tom siebel from the old days. i've known him for many years, but when you're a.i., you got to come to play. you got to say, listen, the sky's the limit. we can we think do x. and he didn't. and when you don't do it and your stock is bid up by people, kind of a little bit of a meme story because of the symbol, a.i., it is disappointing. once again, i come back to the idea that we have a lot of hope about a.i. but right now, the

air is going out of the a.i. balloon as we speak. >> yeah, you know, which may not be unexpected in some ways, jim. i mean, there have been plenty of people who have said the market has been -- had been sent higher as a result, and multiples have expanded as a result of enthusiasm around what a.i. will mean, but that doesn't mean that there won't come that time. it just may not be right now. it's not dissimilar, is it, jim, in some ways, from the prospects of the internet, which obviously had the effect of, in that case, sending stock market up in a much broader fashion for a much longer period of time, i would argue, and inflating a really speculative bubble during that period in the mid to late '90s. but ultimately, it did do what many thought it would. it just took a while. that may be the case here. although perhaps, again, you know, if people have the technology executives, i had an opportunity to speak to in the last 36 hours are right, it may be sooner than years. it may be the next year where you really start to see

significant applications. >> one of the best performers and just a great company is adobe, and they've got a product on the market, firefly, and that makes any small business look like a big business, and it's being used -- anyone who's on it -- my daughter's on it because she does some baking, and what you have is just, i tell you, you look like the big shots. that product is driving that stock. they had a fabulous quarter, and look at how it's done. bill mcdermott talks aggressively with jensen huang, and they're using it a great deal at service now, and those two stocks have not given up anything. they've just been forging ahead. carl, there are companies right now that can demonstrate a.i. i'm going out to see salesforce next week with marc benioff, and he's telling me it will be a great story. >> dreamforce will be a big thing. oracle earnings coming up. >> i like that quarter. katz is so smart. >> we have schumer's sort of a.i. forum where he's bringing together not just altman and musk and zuckerberg but randy

weingarten from the teachers union. >> elon musk just had some things to say, we're discovering, about a.i., and they're not all that positive. >> well, he has -- he's been concerned for quite some time, as you know. >> yeah. >> and i think that continues. that said, he will also tell you that -- and i think those who are very positive on tesla will argue they have a sophisticated a.i. product there as well, kind of two separate things there. but they are, you know, you know how many things -- how many chips he's been buying from nvidia. >> oh my god, he hated -- there was a dispute, because jensen huang comes in piece, a dispute about the two. they had not been cooperating, but you can't avoid the grace hopper chat. you can't avoid the arm and nvidia chip. i got to tell you, carl, none of this is going to save the day today for nasdaq, but we're going to regret, i think,

dumping everything right now. i think it's a mistake. >> worst back-to-back sessions for apple in about three years. thanks, mike. 171, jim, was the august low. how important is that? >> the stock had been moving higher, and it had been one of the best performers of the year. hard to see that stock was up 40%. look, i am adamant that you don't trade it. you won't know when to get back in. you should own it. let's say we see lines outside of an apple store in shanghai. do you cover your short? do you go buy it? i think you let it come in. it's a lot of money, obviously, but we've seen time and again that it's a lot of money that has hurt apple or is going to be missing. i don't think the stock is worth -- if you don't own any for the investing club, i might say in our 10:20 broadcast, you don't have to yet, but i don't want to wholesale dump this thing. there's too much at stake. >> how do you think about the fact that two of our giants, apple and tesla, are so -- are

leaning so heavily on what happens in china? >> well, you know, look. i go back over when commerce secretary raimondo was on the show. i thought there was a lot of possibility for china to be able to say, you know what? let's buy some planes from boeing, get this thing going. let's do something that shows an alive branch. they didn't come with an olive branch. they came with a bit of a bazooka. that's not what she wanted. >> president's going to the g20. obviously, xi will not. president has had modi to a state dinner. he's going to vietnam after the summit. he's brought japan and south korea to camp david. reuters piece this morning saying he's going to g20 with a lot of world bank money, arguing, if you want to grow, you don't have to rely on china for your development funds. it can be the u.s. >> yeah, listen, carl, that effort continues in terms of both stabilizing and enhancing many of the alliances and/or even new ones that conceivably

are being used to try to combat china in terms of at least in the world of commerce. and obviously, chinese influence around the world, right, jim? which is quite significant as well, particularly in many developing countries. >> yeah, but i think that, look, there's no doubt about it, david, you started the show by talking about how there is really no give without a get. apple makes them there, okay? that's what china says you're supposed to do. and sells them there. so, the question is, when you decide to go against the biggest employer, is that wise? that's why i continue to believe i want more information on this before i tell people to take action. david, we do not have a straight story, so what happens is people sell it, and then it turns out, you know what? there's an informal memo. it really didn't mean like that, because you know, david, president xi, he's got the bad unemployment, not us. i mean, if we had his unemployment, we would have powell furiously cutting rates,

right? >> yeah. well, especially youth unemployment as we know. now they're not even measuring that in the same way. i agree with you, jim. the frustration that i have given the importance of china overall in the economy and in so many other areas is it's very difficult to truly understand what's happening there. and notwithstanding great reporting from so many of our news organizations. it's just difficult, and it continues to be and there's a handful of people that i have relied on, although frankly, i think it's become more difficult for them to fully understand things, in part because it's more difficult to spend a lot more time on the ground in china than it had been previously. i share your frustration. the question here is, is this seen as some sort of a national security issue? is it simply a response to what the u.s. has been doing? is it even real? or is it, you know, something that will kind of go away quickly after the headlines? i agree. and it can be very difficult as an investor to fully understand

what the ramifications are and what the reasons are behind this since you tried to sort of analyze the longer term impact. >> yeah. i mean, you don't just go out there and say to the largest employer, you know what? we're going to ban, like, state this, state that. what you want to say is, let's go after the companies that actually have discriminated against us as opposed to embraced us. you do not cut your nose off to spite your face if you're trying to grow. carl, the numbers that we got this morning, again, export numbers from china. >> not good. down 88. not as bad as we thought. >> no, but down 8. >> on a rolling 12-month, the percentage of imports we're getting from china is like the lowest since '06. >> it's canada and mexico. can you imagine those great countries have passed china as partners? >> speaking of a lot of this, getting some comments from boeing just now. let's get to phil lebeau at the nasdaq. >> carl, these comments are coming from boeing cfo brian west talking about where boeing is right now. what the outlook is.

two pieces of news that he has just said at this conference. first of all, the company will be sticking with its guidance when it comes to 737 max deliveries. remember there is the issue that came up a couple of weeks ago with its supplier, spirit aerosystems, which is going to be hurting near-term production or near-term deliveries, we should say, but brian west says the company still expects to deliver between 400 to 450 maxes this year, though it likely will be on the lower end of that 400 to 450. and in terms of free cash flow, while the company will see an impact in the third quarter, it is sticking with its guidance for full-year free cash flow between 3 to $5 billion and remember the company's target for 2025 and 2026 is $10 billion in annual free cash flow. so, those are the comments from boeing's cfo. again, reaffirming, essentially, that the 737 max deliveries for this year, that's not changing.

the guidance remains 400 to 450 planes. guys, back to you. >> jim, thoughts on the guidance? >> i just very frustrating. but look, if gina raimondo had gone to that boeing hangar in shanghai and gotten the orders that i was hoping she would get, because boeing has the planes, this wouldn't happen. i just find, look, the 787 is good numbers, but i find this is a -- david got me out of the stock. i had it for the travel trust. david just shamed me and i ended up selling it. you did that. and david, this is -- this was a story that was making a comeback, and i still think there's a comeback. >> so it's my fault? right, my questioning of you at the time was solely the reason huawe that you sold it. i'll take full responsibility

for your sale of boeing. >> someone has to take the blame, david. i'm not going to take the blame. david is. >> our thanks to phil lebeau, by the way. interesting. one of the morning shows, "good morning america," had a piece today on airfares in deflation. meaning, 10% below 2019 at this point. now we're getting into the fall season, so some of that is seasonal, but it is curious to see whether the -- whether it's dave & buster's, the beige book yesterday, airfares, if we're starting to see prices reflective. >> southwest air, those numbers, the seat mile numbers. david, there is a sadness. people are trying to back away from the travel, leisure, long on money short on time thesis post-covid as if we've forgotten that we were indoors for a long time. i don't know. i'm reluctant to do this because anecdotally, anybody who flies, david, knows when you look at the price, you can't believe it. it's still too high. >> yeah. i mean, we all rely on anecdotes

sort of to support the thesis there, although the numbers themselves still show, i think, are still quite strong when it comes to experiences, let's call it, and everything that you have discussed that comes under that heading versus consumer goods. >> airbnb is very, very strong. you can't get into the theme parks. i'm not against anybody that says -- when i listen to american express, looked at a good quarter and people just decided they didn't. carl, i think that one of the things that is absolutely true is that we are now paying the price of the other side of the fed. we all thought kind of, hey, you know what? we can slow down a little. you'll never see it in the earnings and it will be fine. no, there's going to be cracks and we have cracks right now. >> you had cooperman, i don't know if you heard him on "squawk," basically saying, maybe it's my age and how long i've been around, but i don't think interest rates are all that high. wouldn't surprise me if the ten-year got to 5.5%. >> well, i mean, you know, when i worked with lee at goldman, the ten-year, if we ever had

5.5%, we thought the dow would have doubled. i think that when people say mortgage rates are 7% and suddenly that's horrible and my first mortgage was at 12%, i think we have to -- the older people remember terrible rates. the younger people are saying, what happened to my 3% mortgage? that was just a fanciful moment in history. >> david, kind of leads us maybe to a discussion of what you might talk about this afternoon with solomon. >> i'm looking forward to that, of course. we're at a goldman conference, and we are going to be joined by david solomon later in the day, as you said, 4:15 eastern time. and we will talk about a broad range of topics involving the broader economy, as we often do with david, of course, and the capital markets, where things stand. i'm certainly hearing green shoots of hope from bankers, both on ipo front in terms of capital markets and also m&a. we'll see if he concurs or whether he's somewhat negative. the regulatory environment continues to be quite

challenging in many ways, and i know he'll want to weigh in on that, and then, as you might imagine, a few other things we may hit as well, given some of the recent press around mr. solomon. >> david, i mean, look, you wake up, actually, right before i left last night, rock was doing a deal. that's a lina khan deal. you're not supposed to have big paper companies merge. what's happened? all the thaw from microsoft-activision and the fact that once you get to the courts, as you always said, have to give him credit after driving me out of boeing 180, the courts have doctrine, even if khan has lower views that she wrote when she was such a great star, i guess, second year. i don't know. i was taking law in the banana by then. she was taking her law review, and i guess that was not what the court seemed to want. >> well, that is the key challenge, i think, that they face, and at the doj as well. where i know you're more a fan.

but you can't say -- yes, and obviously, a veteran, but you can say you want the law to change, or you view things differently, and you want the antitrust regime to be different than it has been, let's call it, over the last 30, 40 years, but can you get the judiciary to go along with you? can you get the judges to actually see it your way? so far, that has not worked. and so, you can put out all the guidelines you want, jim, but ultimately, if companies, if they are willing to challenge you, they typically, at this point, would seem -- come from a position of strength. that said, don't underestimate the fact that the very aggressive posture from the doj and the ftc, as we've said so many times, is still keeping certain deals on the sidelines that others might actually occur. >> we got to remember that the real test here is not -- it's kroger and albertson's, giant companies, potentially the largest -- one of the largest union company as we would hear

from kroger, but they have a -- someone who's willing to buy the stores, overlap cns wholesale. david, this is softbank -- i don't know what tech -- softbank is in supermarkets too. you have rodney mcmullen going around telling everybody, this is not an issue, and you have jonathan kanter from justice saying, the deals that we have done where we offload to another company have been failures, and yet, have you been watching what's happening with the stock of rite aid, which was allegedly saved by -- from suitors? i don't know. there's a lot of stuff going on i'm not liking. lot of stuff i don't like. >> yeah. i'm going to dig a little more into that, but you're right. you and i, i think, have both been doubters to a certain extent, based on history, of the ability to have mcmullen to get that done. certainly, the market is viewing quite positively the possibility of this divestiture having enough wherewithal to be a real

competitor and being viewed that way by the antitrust authorities. but like always, we will see. >> right. meanwhile, of course, let's not get away from the fact that there is a separation going on in the stock market. we've got the drug stocks really flying and including j&j, which has just been one awful stock, and that, again, carl, is people saying not -- there's regulatory issues or refining what's going on with apple in china. it's, hey, let's face it. we got a real slowdown. let's go buy the drug stocks. they're not buying the food stocks because this general mills, blue buff story really killed the whole thing. >> j&j, number one dow component at the home. you got utilities up almost a percent. 1% declines on the nasdaq. and the ten-year, right around 4.27%. quick reminder, you can get in on the cnbc investing club with jim. just sign up and find out more at cnbc.com/jointheclub or use the qr code on the screen and it

takes you right there. meanwhile, as we said, bonds, not necessarily higher on the jobs claim number, lightest since february, and below the 230 we were expecting. but still, not too far from some of the recent highs. back in a moment. (fan #1) there ya go! that's what i'm talkin' about! (josh allen) is this your plan to watch the game today? (hero fan) uh, yea. i have to watch my neighbors' nfl sunday ticket. (josh allen) it's not your best plan. but you know what is? myplan from verizon. switch now and they'll give you nfl sunday ticket from youtubetv, on them. (hero fan) this plan is amazing! (josh allen) another amazing plan, backing away from here very slowly.

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let's get to jim and stop trading. >> we have our sources in china and i monitor social media pretty closely. there were a lot of people lined up last night at an apple store. it's important to know that china mobile has refuted this rumor, and that state-owned

china news service reported the rumor is untrue, so those who want to sell apple or trade it, rat are than own it, good luck. >> invitation to the funeral. >> send me an invitation to my funeral if i'm a short seller of apple. jim fist rumored to have said it at delmonico. short goal. that's what he said when he was over there at federal hall. anyway, keep selling apple if you want to. i don't care. i've got nothing to say. i sold boeing at the advice of david. not true. i sold it because i couldn't take the pain. that's what i wrote recently, can't take the pain. >> david, the interview of t-mobile, that was one of the great interviews, better numbers, nobody carried. that's a sign that i like in terms of a little bit of a bottom coming. >> how about tonight? >> tonight we're going wide ranging. you know what tonight is?

it's, you know, we have -- this is a company that i'm looking for enterprise software companies that are very profitable. they're all winning. this is winning. this does it for -- actually for insurance, keeps track of portfolios. enterprise software remains the battleground in this market and that surface now and i like that company. i say buy enterprise software right now! >> jim, we'll see you at 6:00. >> by the way, tonight i think the chiefs play? >> yes. >> yeah. i don't know. you got to -- give them 3? >> let's get this going. >> detroit 4-3 there. >> "mad money," 6:00 p.m. eastern time. there's a look at the live shot. when we come back, more reaction to apple extending its decline, off the opening low of 1174. stay with us.

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in san francisco this morning. taking a look at stocks, pressure especially on tech. look at the nasdaq down 1.4% right now. the dow remains higher. nasdaq under pressure by big tech and apple a loser. concerns around china. overall market is selling off. got a mix of hot labor data. this morning certainly fueling part of the decline. also an eye on treasury yields. 30 minutes in, here are three movers we're watching. second day in the red for apple, as shares fall on reports of an iphone ban for government officials in china. more on that story from beijing in a moment. c3.ai down after forecasting a larger than expected operating loss, shares still up triple digits, as investors bet big on a.i. mcdonald's shares today. wells fargo upgrades the stock to buy as they say the business is, quote, firing on all cylinders. carl, let's dig into the jobs data for a little bit because,

you know, a lot of economists watch the jobless claims and say, if they're low, things are okay in the economy, not seeing mass layoffs. we got a surprisingly low numbers at 216. a big drop from the revised number last week. fewer americans filing for jobless benefits is a good sign and a sign that labor market remains tight. we also got a revision on productivity, which was a little bit lower than expected, but still really strong. so nothing to worry about there, which measures sort of the output for worker. and unit labor costs which also came in a little bit firmer and that's a proxy for wage inflation. if you add it up, along with yesterday's services number, perhaps the market is a little concerned here that the fed might have to do more or at least stay higher for longer and pushing out the first cut. if inflation stays firm, especially in the jobs and services part of the economy, and that's the concern. >> indeed. you saw the productivity chart

there. even with the upward revision, still the best number since q2 of 2020. best in three years and we haven't gotten started with the a.i. revolution. >> 3.5 annualized rate on productivity is good. that was negative in the first quarter of the year. strong. >> meantime comments like bailey saying this is probably very near the top of the cycle. that splashed across the front of the "ft" this morning. >> yep. also we got -- everybody is talking about this. in the macro world that i live in, of course i want to highlight this later that was posted on the chicago fed website. did you see this? looking at a model and this gives -- this is for the camp of soft landing and the fed's done enough. a quote from the letter. according to the model's forecast, that they looked at, chicago fed, the policy tightening that's already been done is sufficient to bring inflation back near the fed's target by the middle of 2024 while avoiding a recession. they have a model, david, which

shows larger effects of monetary policy and faster policy transmissions than other empirical models. translation, if fed economists are going to say we're a pleased, we've done enough, the lags will work through the economy, and inflation is going to come back to target, they can point to this model if they want evidence of that. >> how does their model differ from other models and why should we believe their model and does the chicago fed have any a real influence? >> we don't know exactly, right. of course. but it's a data point, and of course the chicago fed has real influence. these economists work on these models, and the problem is, we just don't know what lag impact of 525 basis points of tightening is. we don't know how much to gdp and we don't know whether it's going to be enough to bring down what is proving to be more sticky inflation a tight last month -- labor market.

the beige book came out for anecdotes about hiring flaingsds and demand because it gives you a snapshot from each region of the country, all the fed regions, and i pulled apart a few quotes for color of what we're seeing around the country right now. new york city, tourism where it's, obviously, been strong, a quote from the beige book, while the number of travelers is nearly back to normal, that's good, tourists are substituting lower cost experiences for premium ones such as partaking in casual dining instead of fine dining and staying at reduced services hotels, a signal that is starting to turn. the beige book overall noted we've seen the surge in tourism potentially at the last hurrah before we see a weaker economy. we've been talking about the impact on bank lending and what that's going to do to the economy, tighter lending environment. business loan rates increased a bit and standards tightened moderately.

consumer loan demand also decreased modestly. multiple contacts noting an increase in credit card debt and one reporting that delinquencies for auto and car debt had risen back to precovid levels. nothing too alarming, but we're starting to see thetrend change and weaken when it comes to credit and consumer spending and price pressures, which was the other notable thing of the beige book. saw across the board, prices moderating and we know that fed takes this into consideration and they're going to be meeting on policy and deciding in two weeks. >> opening line of the beige book, retail spending continued to slow, some districts suggest consumers may have exhausted their savings and relying on borrowing to support spending. so it's interesting to see something like that get reflected through all the tiny clues we get in the daily earnings prints the last couple weeks. >> that's what it's about. i think the fed is leaning to not hiking anymore because

they've done a lot over a short period of time but the economy is weakening enough to bring down the inflation levels and still seeing evidence that whether it's employment costs today or prices paid in the services index yesterday, there's some pressure there. let's head to apple now. it is the stock story of the day, and it what's pressuring the nasdaq reports china is b banning the use of iphones by government officials, a ban some warn could grow beyond government officials. eunice yoon has more from beijing. what can you tell us about this? >> reporter: it's unclear just how expansive this directive is. the government hasn't confirmed it, and neither has apple. but what we are hearing is more and more reports of state agencies and state firms asking their employees not to bring their iphones to work on national security grounds. the focus has been on those who are in investment, trade and international affairs, and the employees have about a month to make a switch. now the question here isn't so

much about how many iphone sales this would impact when it comes to the government, but it actually is bringing up a question as to just how politically correct apple iphones will be in broader society. we spoke to some distributors of iphones. they said that apple's bigger problem might actually be something totally different, which is, huawei's 60 pro. this phone was released when u.s. commerce secretary raimondo was in town. the company hasn't released specs, but it's operating as if it's as fast as a 5g phone. most of the folks in the tech industry i've been talking to here, don't actually believe that huawei would be able to produce this phone without foreign technology, however state media has been touting this as a poke in the eye for the u.s. commerce secretary and the department's export curbs. cctv posted a social media post

and -- which says, mocking her here, mocking her as a huawei ambassador. what was interesting, these are actually phone covers which have been with raimondo's face, there's a counter argument now within the public and that is, that people are quoting what huawei's -- one of huawei's executives said we are far ahead, getting far ahead, and his intention was to say that huawei is getting ahead of the u.s. export curbs, but what people are kind of seeing that as a joke, that huawei wouldn't be able to do that. that's a discussion right now here. >> eunice, it's david. is there an expectation that there will be some sort of official announcement from the chinese government regarding this possible ban on bringing your iphone to work? or is us more likely, given your experience, that it will simply

be rolled out, if it is being rolled out quietly, and that will be the extent of it? >> yeah. you know what, it's really difficult to say because there are times when the government does actually make these official announcements where either on the local level or the central level, they'll say that a certain product is banned or they don't want say, for example, tesla cars to be in sensitive areas. they will actually make certain statements, but as you well know, david, with your experience here as well, there's a lot of unofficial messaging that goes on to make sure that things kind of go in the direction that chinese government wants. i wouldn't be surprised at all if we kept hearing more and more about these directives, but nothing was officially announced. >> eunice, appreciate that. huge story. we'll see how it evolves. eunice yoon joining us on the apple story. the street's take, joining us bofa security has a neutral on

the stock. we're grateful for your analysis this morning which we referenced in the prior hour, putting some dollar signs ahead of various scenarios. can you talk about what's snobl possible? >> thanks, carl, for having me. look, i think that the most important thing as it pertains to the development over the last week, one what you heard from eunice, the release and launch of the huawei made pro and the regular version of the mate 60, and huawei has not had a flagship phone since 2019, so the chinese consumers have not been able to buy anything other than apple. samsung has little share in china. really, apple gained about 15 to 20 million iphones over that period of time, which is now subject to some sort of -- if you think about a replacement cycle, 5 million units of iphones purely from a huawei hit if that share were worse. if you think about the ban in

china, about somewhere between close to about 40 million employees or so, government employees, that we think could be subject to this ban as it stands right now in very loose terms. now, some of those have already been subjected to restrictions around bringing iphones, you know, at security departments and things like that, where it has been sensitive, and so you can sort of take them out of the picture. when you look at the remaining 30 million or so, you know, apple has an overweight share in terms of high-end customers and so, you know, at the end of the day, you can think about at least, you know, 5, 10 million units from an annual perspective impact that can come from the ban. it's going to take time because there is a replacement cycle cadence to this. if you kind of sumpp those things, you have about 10 million units, eachmillion units about a penny to eps. we're talking about the magnitude of 10 cents or so, right. but the bigger question is

really, does this pose other risks in china? like china could essentially do something relative to manufacturing, relative to tariffs, relative to even on the services side, we've just been talking about on the product side and they have full control over gaining approval, for instance, and they can say we want to slow down the pace of gaming approvals which would impact the app store and services as well. the amount of influence that china can have on apple's numbers is actually very stupendous and we shouldn't be underestimating the impact from this. >> is your neutral rating primarily about china exposure, as opposed to something on a valuation or something else that might go into the model? >> yeah. it's a good question. look, china has always been a risk and we've known it. apple has navigated this. no other word to describe how they managed this relationship in the face of a lot of other companies struggling. they've largely been immune and maybe there are chings in the armor. our neutral rating isn't about

the china risk per se. it's about estimate revisions. apple's estimates get cut over the last three quarters and a cycle of negative estimate revisions given the weak iphone 14, the reference on the last call about how there is a slowdown in the u.s. phone market and replacement cycle getting stretched out. it's on a fundamental call. earnings has been more of the crux of where we thought the risk was. given the china incremental pressure adds another layer to estimate risk, quantifying that at 10 cents. so in the face of $6 it's not really that big. >> right. >> if everything else goes right there could be more positive scenarios as well. >> we'll see if next week can act as any balllast to this. thanks for the help today >> absolutely. thanks for having me. and the dow just joins the s&p and nasdaq in negative territory. thanks in part to apple. biggest drag. as we head to break our road map

for the hour, the ceo of one of the largest fast food chains, subway, joins us on the heels of a private equity deal for the company. plus, green chutes in the ipo market. instacart may be preparing to begin its road show as early as next monday. and the nfl season kicks off tonight. lions at chiefs. it could bring in big bucks for gaming stocks as a record number of americans eect xpto place bets. big show still ahead. don't go anywhere. .

welcome back. welcome back to "squawk on the street." our next guest is making the case for cyclicals. citi's scott crownna joins us with a year-end s&p target. >> thanks. >> cyclicals, frame that, net constructive about the cycle? >> the way we're coming at it, we think the cycle gradually dissipates and these companies end up over the course of the next few years, mitigating some of the traditional cyclical effects. essentially the fundamentals set up, the incorporation of technology into their business processes, we think ultimately reduces a lot of the traditional swings. you get a through cycle higher valuation as a result, and it keeps us constructive on the outlook for that part of the market. >> no matter what happens with the fed and the inflation numbers? >> it's all part of it for sure. again, the argument we're making

is that through cycle, the industrial economy will look pretty good for the u.s. in particular. keep in mind, you've got a lot of stimulus spending that kicks in next year and that becomes a tailwind even as we're navigating concerns regarding china and where the fed sits. >> some make the argument it will keep the fed higher for longer or have to do more, which would act as a headwind for the equity market and for growth having all that stimulus coming through? >> so the higher for longer fed continues to be an issue in terms of thinking about the growth component of the s&p. don't doubt that. but even there, we think as we look at the setup for next year, tech in particular we think looks interesting in terms of earnings growth acceleration. a lot of that is going to be natural maturation of the business models for some of these companies, but all told, we think as we look into 2024, you know, we're going to take the high, if you will n terms of the earnings outlook for next

year. >> can you get more granular? materials, construction, transports? >> yeah. so color me structurally bullish on u.s. industrials. i think that's an important call we want to be associated with. we think materials plays along with that. en energy, we want to have exposure to. financials, sort of the conundrum for us and we're looking for a bottoming we've been underweight financials all year. as we look into 2024, even there, we think that setup is for a positive earnings mean revision. >> what would be the catalyst to change your view officially? >> on financials? i think we need to get a little bit more evidence that curve flattening begins to unfold here and you get confident that a lot of concern regarding the commercial component is fully embedded in the reserve setup for the banks. >> the negative view to sara's point about higher for longer seems to be about heightened risk for crises, right,

financial crises, geopolitical crises is getting kicked around a lot. do you dismiss those or think they're well priced in? >> you don't dismiss them for sure, but it's hard to model a longer term outlook around that. that falls in the category we have to be prepared for volatility. we think the underlining traction for next year can unfold even with some of the hot spots around the globe kicking in. >> do you think that the china risk is correctly priced in to the u.s. market, to the global market? more bad data overnight, imports and exports, currency, onshore yuan at a 16-year low, pushing the lower end of that ban and you wonder agts things like debt and growth and credit events in china? >> geopoliticals. we did the apple story. >> yeah. he with think it's correctly priced in for the most part for the u.s. so the rest of the world may be a different story.

we know the story that europe is going to be more exposed from a traditional business perspective to china than the u.s., so we completely understand. you know, we've been dealing with trade discussions and issues regarding china for several years now, and so we think to a certain degree, the u.s. investor mindset regarding the china influence is mostly appropriate and factored in where we think earnings expectations are setting you. >> a huge story developing. we'll keep our eye with your help. thank you. good to have you in. david? carl, we have a quick programming note for you as we head to break. an exclusive, it's this afternoon, i'm going to sit down with goldman sachs' ceo david solomon at 4:00 p.m. eastern talking about everything related to goldman, usually broadly about the economy, capital markets, m&a. 4:15 tod. n'mi iaydot sst. everywhere are asking: is it possible? with comcast business... it is.

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indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire in another sign the ipo market is thawing, grocery deliver start-up instacart reportedly kicking off its road show as soon as monday. leslie picker joins us with the

latest. good morning. >> hey, sara, yeah, monday kickoff would be pretty much the fastest timeline instacart could have toward the public market. regulators require an s1 to be public for at least 15 days before starting that marketing process, and since instacart disclosed its perspective on august 25th, instacart is pfree to market its deal with a price range and an implied valuation as soon as monday morning. now last march insta a cart slashed its internal valuation to $24 billion from $39 billion amood mid-a broader sell-off in tech sell-off it's compared to. that valuation declined by another 50% by last year. in a relatively uncertain market the key will be pricing this one essentially to perfection, while maximizing the amount of capital raised for the company and selling stock holders. a tailwind for instacart the large gains by its publicly traded delivery peers, doordash,

uber and amazon which owns whole foods are each up 60% this year. instacart was profitable during first six months of the year and managed to grow its top line by 31%. some aspects of the deal will be out of its control, including the performance of arm which is set to debut mid next week in likely the largest ipo in years. if that falters, it may impede investors' willingness to buy new issuance in the instacart deal until the window opens wider, but the flip side could be true, and arm's capacity to lift instacart higher as well. guys? >> hey, leslie, you know, arm's road show is under way. are you hearing anything at all in terms of expectations there? i know we've already got price expectations potentially. i'm sort of talking about general chatter in terms of how it is going to be received in the marketplace? >> so i've heard from a couple investors they're excited there

are deals and road shows and things that are happening. i think the valuation came at a more muted price than a lot of people were expecting, so that's appealing, at least to the select group of investors i've been talking with, just because they feel like they're getting it at somewhat of a discount to where there were rumored valuation targets previously. that said, on a price to earnings basis, the deal is still very expensive relative to chip designers traded out there. it's all game of psychology. feeling like they're getting a good deal relative to what was previously out there is a good sign. >> leslie, question on instacart. i mean, you mentioned some of the headwinds and tailwinds that investors are looking at here. i mean, the biggest headwind for me, grocery delivery had its heyday during covid-19 and no one expects it to get that high again, that and the fact that the big guys, the krogers and walmarts of the world, they're all getting into online grocery

and delivery. they have a lot more scale. they have a lot more money. and they're not using instacart necessarily. >> that's there's a lot of competition out there and that's why instacart, in the marketing materials and their s1, have basically said we're trying to diversify our revenue sources. they have an ad platform for cpg companies to advise on their platform, getting into more technology with regard to a.i. in terms of figuring out kind of ways to suggest different products for people to buy, so all of that, they say, is a competitive advantage. to your point, this company saw huge boom in covid. that's part of their risk factors as well, the volatility there, but then also, this is a company that, despite the fact that it's been around for a while, seems like to many of us forever, it hasn't seen a full economic cycle. and when you, you know, account for some of the fees that are paid as well as the up charges, at least for certain grocers

that use this platform, it will be interesting to see what happens in a tougher economic environment. >> yeah. perhaps investors will like the fact that they are diversifying with the ad profitability and the ad growth they are seeing that a lot. leslie, thank you. it will be busy and interesting for you over the next few weeks. after the break what's next for the fed with former governor randy kroszner, news initial jobless claims hit the lowest since february. the broader market continues to sell off. the dow down 50 points. the nasdaq getting hit the hardest thanks in part to apple but pressure from nvidia, tesla, qualcomm. we'll be right back.

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welcome back to "squawk on the street." i'm bertha coombs with your cnbc news update. closing arguments are under way in the trial of former donald trump white house advuzer peter navarro accused of failing to comply with a congressional subpoena connected to the

investigation of the january 6th riot at the capitol. the jury expected to start weighing the case this afternoon and could potentially return a verdict later today. dozens of rescuers are working right now to free an american man who became sick while exploring the third deepest cave in turkey. turkish caving federation says 40-year-old mark dickey's condition is stabilizing after he suffered from gastro intentional bleeding thousands of feet underground and calls the rescue operation one of the largest in the world. bruce springsteen postponing the rest of his concerts in september. springsteen shared the news in a social media post wednesday night and says he's being treated for symptoms of peptsic ulcer disease and promises to make up the dates. carl? >> thanks. bertha coombs. about an hour into trading here this morning. the dow down 65. 34 points on the s&p.

definitely a defensive stance with the staples, health care, utilities the main sectors in the green. let's get more on moving with dom chu. >> carl, the nasdaq composite is working on a four-day losing streak. the last time that happened the four days that ended august 18th. we're roughly about 6% below the highs that you saw earlier this year. one of the worst performers in the technology trade today is seagate technology down by nearly 8.5% or so. the maker of computer hard disks and data storage is getting downgraded by analysts at barclays to an equal weight from overweight and maintain their $65 target price. it's a valuation call based on the run of the stock and lowering of their estimates for revenues and margins. shares of akamai higher by 1.75%. buck the technology. this is a services company gets initiated with a buy rating by

bank of america. $145 price target. they like the prospects being able to offer customers the ability to gain computing power without the use of a single computing system. shares up 1.75%. we'll end with a downside mover, chargepoint, the operator has lost about a fifth of its value so far today. it reported revenues that missed estimates, despite a 39% year over year growth rate. the expectations were high. chargepoint said it would cut around 10% of its global workforce. chargepoint shares have lost 40% of their value this year, down another 20% today. back over. >> ugly. thank you, dom chu. >> new reads on jobs. productivity since the highest level of 2020. unit labor cost revised higher. the fresh data after the fed's beige book showed slower activity growth and hiring. what do we make of all of that.

joining us on the news line is former federal reserve governor randy kroszner, professor at the chicago university school of business and external member of the bank ofengland's financial committee. do you think the fed will have to do more on hiking rates? >> so clearly they are in a spot they think they will wait a little bit. i think when governor waller says we need to wait, they probably are likely to wait to see. the real question is, will we start to see a consistent and sustained return to inflation moving down, as you mentioned we've been having high productivity growth which is excellent, that allows wages to grow without as much inflation pressure. will that be sustained? that's really the question and that's really hard to predict. >> and then we have the hotter services number yesterday, a little bit firmer unit labor

cost today. suggesting maybe that it's not going to be a straight downward trajectory as maybe the market and fed would hope on inflation? what do you think? >> exactly. models say very smooth, but the world never works that way. you can't rely on vladimir putin and others in opec to make sure that energy prices come down in a consistent way. we may see headline inflation bump up here and there because of tightness in energy markets. the core numbers are flat to starting to come down and that's going to have a lot to do with wages and productivity growth. tra >> you see november as a toss up as far as potential action? >> for sure. if we continue to see very strong labor market data, continue to see the inflation rates sort of around where they are, not coming down further, particularly on core, i think

that's still live. i think they're starting to get queasy about -- there are long and variable lags, but man, it's been a long time and maybe some of this stuff will have impact so i think there are more people around the table who have been hawkish, who say we need to see what's going on. if the numbers continue to come in strong, i think they are likely to move in november. >> the lag question, it's just hard to know how long it takes and how big of an im pact it's going to have, both on inflation and the economy? that's why i highlighted the chicago fed paper on the website saying that their forecasting model shows that the policy tightening is sufficient and enough to bring inflation back to the middle of 2024? we don't know, do we, randy? >> yeah. we've never known. people say oh, gee, the fed is unchartered territory and this is new. milton friedman, more than 50 years ago, said monetary policy

has impacts of long and variable lags and that has been the case for the last five decades. this is nothing new. although it does seem like the lags are a bit longer. i think part of it is because usually interest rates have a big impact on people's ability to pay mortgages, but with everybody moving to fixed rate mortgages and refinancing to sub3% mortgages, it had impacts on fewer people that will have more impact down the line. i think it had a slower impact than normal because of that. >> as someone who has been inside the room, randy, and knows what these conversations are like and the dynamics, what is your read right now about who has the upper hand? the hawks or the doves? we know there's kind of a split at the fed right now, and i feel like the hawks had it for a while, and powell was siding with them. i'm not so sure right now? >> i think that's right. i think as i mentioned, governor

waller, who has been one of the most hawkish, has said maybe we can be a bit cautious and consider the data. so i think people are -- many of the more hawkish people are thinking well, we've done a lot, where there are signs of the labor market might be softening a bit, let's kind of reassess, but they're going to be alert to this because they don't want inflation to take off again. this is what happened in the late 1970s, early 1980s, when the fed said we have inflation under control, bring rates down and inflation took off and they had to bring rates double digit levels. the last thing they want to do is bring rates to 6, 8, 10% and so they're going to err on the side of being tougher now to make sure that they've bought insurance against that outcome. >> i'm going to pin you down, next move from the fed, in your bet, there's variables, is it a hike or cut?

>> i would say given the data that we have now, it's more likely to be a hike, but i would say the most likely outcome is no change for quite a while and then eventually a cut. given the strong data, it might be an increase before the end of the year. >> all right. randy kroszner, thank you very much. good to hear from you. some of the top questions that investors have around the fed. >> interesting, journal has a piece saying walmart is cutting some pay for new hires. meantime one of the largest fast food chains sold to a private equity oer cwneo of subway will join us to talk about that, inflation, and the health of the consumer. (♪ ♪) the walking tree is said to change its entire location in pursuit of sunlight

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welcome back to "squawk on the street." one of the world's largest restaurant chains subway selling itself to roark capital for a reported price tag of nearly $10 billion. the sale makes rork capital one

of the largest operator in the worlds with names like sonic, dunkin', carvel in that portfolio. joining us to discuss the deal and the state of the consumer is subway ceo john chidsey. it's good to have you. first on the deal, this auction process has taken months, i don't know, maybe years. feels like it's been a while. what took so long and how did you get to this deal? >> as you well know and talk about, difficult financing market given the rate increases and just the size, it is a large private equity deal, so when you think about the size of the equity check required there were a lot of consortiums spinning and that complicated the process a bit, that and macro environment. >> will you stay on board leading subway and what changes do you anticipate? >> yeah. i think one of the things that enticed a lot of the groups were the management team and the turnaround we've been on, we've out of the turnaround phase and more on the growth trajectory, but i don't think you'll see any

changes. i think, you know, we're going to continue to work on men it n -- menu innovation and improving the guest experience and focusing on the international growth which we've talked about which i think subway has tremendous runway there. >> just one more on the deal, how do you feel about roark, which i showed some of the names in the portfolio, but they own jimmy john's and slotskis which are direct competitors? >> the great thing about franchising, franchisees set their own pricing and consumers visit all kinds of brands, as much as we would love it, they don't focus on one brand. this firm they understand franchising well and shoouts we face and i think they will be a great partner for us. >> i wonder how you think of the evolution of the physical model, whataburger opening their first cashless and seatless digital only location.

is that the future? >> you know, it may well be. i think there are places outside the u.s. when you think about scandinavia where things are incredibly digital, you look at places in asia, we have lots of places we can try things and learn even outside the u.s. that's the beauty of having a brand in 100 countries and so i think we'll try lots of things in different parts of the world and see where we get adoption the fastest and throw things against the wall and see what works and what doesn't. that is pretty much where the world is heading. i think it's going there. >> i mean, australia is always famous for getting a lot of say mcdonald's toys first before they go to europe and maybe here. do you see the u.s. becoming more of a laboratory than it has in the past? >> i do. but given the scale of most of the large qsr players in the u.s., there's a reason people try things and some in smaller countries so if you break something or do damage, it's not quite as impactful. yes, i think more things will be

tried in the u.s. because it's clear we're a moving in the same direction. >> you mentioned that you've been executing this turnaround here and seeing double-digit growth in subway and near the end of it. i'm curious what new subway looks like. >> carl and i were reminiscing growing up with the $5 footlongs and feel like we're a long way from there? >> you know, i hope that we have enough things that would remind you of the subway of the past but as you've said we have ten straight quarters of sales growth about about to complete the 11th quarter and subway hasn't done that since 2010 to 2012. we have it back on the right trajectory in the u.s. and globally. our sales are up globally same. subway series was big because millennials and gen-z don't like to engage verbally. they like doing things digitally. i think having the brand where you can still customize if you want but take the number 5, the number 10, i think that's really a step in the right direction

given third-party delivery digital. ike we can play both sides of the street and say this is the subway you love, but it has a lot of new things to offer as well. >> finally on the deal, any concerns about antitrust approval or review? >> no. i think the beauty of franchising is i came from a world where we had century 21, i was there a long time ago, sold a lot of houses and our franchisees competed against each other. they're independent contractors and hire and set pricing. i don't expect issues there. >> really appreciate you coming on to talk us through the deal and strategy. >> thank you for having me. >> ceo of subway, john chidsey. coming up at 11:00, more deal talk for you. toma bravo of orlando bravo, brings us his outlook for m&a as they bet big on health care with a private deal this week. ayituss.ks off in ten minute st wh .

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tech is under. materials, consumer discretionary, cyclicals and tech all weaker but strength in the defensive plays, the safer plays like utilities, health care and consumer staples at the top of the market. that explains the market action. down 1% on the nasdaq. a little improved over the last 30 minutes. apple is still the biggest loser. continued concerns about china on these reports that the chinese government has banned apple iphones for government officials and potential spreading of that. nvidia is also under pressure. we're keeping an eye on yields, two-year yield, a march higher and in the u.s. dollar. both of those things have stood in the convey of equity rallies before. dollar is pulling back a little bit today. kind of flattish but near a six-month high. everybody is talking about this big move lower for the chinese currency on the back of more weaker data. >> 105.15 the intraday high.

nfl kicks off with the kansas city chiefs taking on the detroit lions and the sports betting world is bracing for a lot of action. contessa brewer is here with more at post 9. we talk about how football season is the super bowl of the business. >> all anybody wants to talk to me about is football. this is the time of year this is on everyone's minds. a record number of americans say this year they're going to wager on an nfl game. 58% say that. more than last year, according to the american gaming association. the question is, will investors bet on sports betting stocks. over the past month notable names have lost ground, penn, draftkings, betmgm along with attain in europe. fanduel, they're all down. sports radar down 20% over the past month. yet all these guys see a silver lining. maybe it's gold. it might be gold lining. they have turned a profit in a given quarter. football season means an opportunity to attract new

players and the sportsbooks will spend big on promotions and marketing this quarter. here's draftking ceo jason robbins on "squawk box" this morning. >> new states are opening up, not only kentucky, the first football season for massachusetts, our home state that our company is headquartered in. ohio opened up. in the end it was playoffs and super bowl only so the first full football season for ohio. >> draftkings raised full-year guidance. it has a lot of competition. fanduel is the market leader. betmgm and cesars. don't forget about fanatics opening with pointsbet acquisition that gives it market access. notably new york is the biggest state for sports betting and fanatics has that.

penn does not have market access in new york. and there's been questions about can they go back and try another bite of the big apple. >> matt king is going to join us next hour. the head of fanatics sports betting. >> we'll talk to him about how confident they feel going into the season as the newcomer on the block. he was former ceo of fanduel. he has someone at the helm launching and getting things up and running. the question now is are they too late to the party? everybody else has had more than five years to get this in under their belt. are they late? >> is there a sense that penn's growth targets are too aspirational at this point? >> i think that the trajectory for penn or the expectation of the trajectory changed the moment they announced they were rebranding with espn. the moment they said, the score by all accounts is doing amazing things in ontario. the tech is working. and if you ask ceasars, what

makes a difference, or fanduel and draftkings, they will tell you technology is super important. they're coming into this. they're going to rebrand the technology that works is espn bet here. they think that is a huge opportunity. so, is it too aspirational? i don't know. they've got a lot of ground to make up. >> yeah. it would be amazing to see them get to where they think they might want to go. can't wait for tonight, contessa. we'll talk soon. > quk t seet" continues after this. ever since she was a little ki, all maría wanted to do was bak. i'm maría alvarez, owner of maría's cakes. and i'm axel, proud to be her state farm agent. her baking superpowers have brought sweetness to our community. i make delicious cakes to make special occasions even better.

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welcome to "squawk on the street." i'm carl quintanilla with sara ei eisen. fresh off latest billion dollar deal, thoma bravo founder orlando bravo, areas he's looking to with potential targets with $131 billion in aum. let the games begin. as the football season kicks off tonight, expectations for the betting industry are huge. fanatics gaming ceo is here with his outlook. eqt, can the industry bounce back this winter with the commodity down