the point is also you got to shake up some of these -- >> congress gave us $33 trillion in debt too. >> tim, i would love to have a longer conversation on this. we are literally out of time for the show, but please come back. you're close and we'd love to have it. tim wu again. folks, that does it for this week. join us back here next week. have a great weekend, everybody. it's time for "squawk on the street." ♪ good friday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. stocks trying to stabilize here after the worst s&p day since march. first 1.5% selloff in more than a hundred sessions. busy friday. global pmis, watching for a possible expansion of the auto strike. our road map is going to begin with wall street's no good, very bad week. stocks poised for steep losses. s&p, nasdaq both on track for their worst week since march. plus apple shares are rallying a bit. this as its flagship iphone 15

hits stores worldwide. tim cook at the building in midtown today, greeting people. questions still remain. i read it there. >> what do you need? what kind of demand do you have to have? never mind. we're keeping an eye on strikes. hollywood strud yos and the writers are going to meet again today. uaw preparing to possibly expand its walkout from detroit's big three. >> yeah. let's begin with the markets after thursday's selloff, jim. selling rosh hashana worked, sell yom kippur. >> larry williams said, be careful, september is going to be terrible. he came to me this week and said, okay, cover your shorts yesterday, buy today. he looked at cycles for short, medium, and long, and they all say that today, next week, we bottom. look, when you come in and you say september's going to be awful and then suddenly you say

it's time to buy, i think that guy has gravitas. >> okay. if you say so. >> he looks like harvey keitel. >> winston wolf. >> i'll do a little keitel for you later. i got to hear him. >> 30 minutes. i'll be there in ten. i think that larry williams, who is the market's foremost historian, is saying, buy. i love the fact that we won't out on the show and said, september is going to be awful and boy, september has been hideous. and now, david, time to buy. >> time to buy. >> yeah. >> i don't know about the yom kippur, because the cycles didn't turn. i think this was a very good call. >> doesn't always agree with the fed calendar where the chairman's going to say some things that conceivably -- >> there's 5,000 years worth of data on that. i don't know. 5,000-year data? >> yeah? what did the fed chair say to abraham 5,000 years ago? >> i don't know.

>> speaking of which, fed blackout window is now -- window has now reopened. we got cook on the table and we'll get kashkari and daley later on. >> these guys are thoughtful people, but i would say that i'm going to make a point. i thought yesterday was one of the worst days i've seen in the stock market in long time. it was just -- everything -- anything that was positive just went down less than things that were negative. and the market was cascading, and the give-up that i saw between three and four was extraordinary, and there were people, particularly, say, in the real estate investment trust who said, i got to get out of this so badly. the only utility -- they recently raised the dividend for more than 50 consecutive years. the give-up yesterday was as if something huge was going to happen. >> oh, yeah. the goldman desk note this morning, "floodgates opened yesterday at a substantial uptick in gross activity, particularly in tmt."

>> isn't that interesting? and by the way, in the end, one of the amazing things, all those deals that were really kind of cascading down made a little comeback. >> oh, really? >> yeah. >> instacart and arm and clavio. >> he calls it clavio and then he's got the wrong name for instacart. don't you know what instacart is? it's maple bear. get with the program. is that flammable? >> no. >> all right, just checking. >> it's not flammable, but i will see you at the club later. >> did you see the piece on clothing? >> did you see that robert frank double breasted? very nice. >> they're all holding their ipo price. couple of fiinitiations today. btig on cart. neutral. >> that was neutral, sell, sell, sell. that was one of the most negative neutrals i've come

across, and by the way, nobody likes arm. >> yeah. >> everyone thinks it's too expensive. >> their point on cart was kind of what you said, and that is, in addition to competition from walmart, amazon, dash and uber can cross-promote. so, they're looking at mid-single-digit gov growth. >> they put that -- that piece was -- there were more reasons to get out of that stock in that piece. by the way, i thought it was very well written and very convincing, and it made me feel that if you're really in maple bear, you may have to change your stripes there. >> again, let's remind people there are so few shares available for trading. so few. >> doesn't mean you can't go down. >> doesn't mean it can't go down, but it's not reflective, i still think you could argue to a certain extent, of the true underlying fundamentals. until that lock-up expires -- >> or you get a short squeeze going. >> you could. >> you could, but i thought the piece was a well reasoned piece

about how everyone was gunning for them, and finally, you realize why the valuation went down so big. by the way, i think uber and -- i think uber, particularly, but also doordash are formidable opponents. and that business, by the way, this is not the time to have an expensive assist at a supermarket when the supermarkets are sticky and have bad inflation. it's not. >> i'm not going to disagree. >> and i'm a melon feeler. i feel the melons. >> you feel the melons. >> left and right. >> so you don't want to let somebody from instacart feel the melons for you? >> for the price? no, i happen to like going to the supermarket. there's a whole fooldsds near u. i don't find it's an intimidating thing to shop, and i don't want to pay someone a lot of money to shop for me. what kind of idle nonsense is that? that was another era. >> i don't know. i'm all lost in the supermarket. i can never shop happily. >> jim, you've assembled a

number of reasons for this selloff. is food inflation among them? overall inflation concern? >> yeah, i was trying to put in context why there are rational reasons to sell, that you just -- why not lock in gains? a lot of hedge funds are up nicely. why give them up? the strikes amplify, but phil lebeau did a piece this morning at 5:30 about what the uaw is doing. it is total class warfare. the political climate, i wouldn't regard as good. even the republicans hate each other. fed is very reasoned in what it wants to do. the macro weakness, we heard it from gary steele yesterday, from splunk. i mean, all these -- >> what did you hear from him on the macro yesterday? >> he called macro headwinds. this was before you brought out the rubber hose, and you read him -- didn't read him his miranda rights. you just went right in.

witness for the prosecution. i got to tell you, you came at -- >> isn't it true, mr. steele? that was david's style. >> point of order, david. point of order. >> i disagree. i just asked him why he was selling and he didn't seem to be able to articulate it as well as he might have hoped. >> why did you take the giants and get ten? >> i didn't. oh. >> ten and a half. >> yeah, i guess the reaction on splunk-cisco, we got a couple loop in rbc, good hold. not a lot of clarity on execution risk this morning. >> i don't know. i think that cisco very much needed to have that -- the rate of -- they needed a continual arr. they needed a continual revenue stream. that had been the bug-a-boo. people said they're still a hardware company. they're not. i genuinely believe that gary understands cybersecurity. what he did with prove point was amazing. i think it was a very good deal. david would think, of course, that because he didn't take

stock, you're probably looking at the 10-b-1 he has. >> i find a lot of ceos are programmed to say, this is going to be a great deal for everybody, and my point is always, you've made a decision to sell your company at $157 a share. your shareholders don't care about the future. they're selling now. that's all. and so is your employee base that you may be energized. >> the company was -- >> your customers may be happier. >> the company is falling apart. it was leaderless. the ceo disappeared. we never found out a thing about why. we never -- there was never a release about why the ceo left. the company was just falling apart. this man comes in, he turns the company around in a record time and then he decides to -- >> but they may have missed a cycle, isn't that something? they may have missed something. still behind. >> they are -- well, i think that they're fighting to keep up because it was very hard without, like, doug merrick would come on the show regularly, the former ceo, and

they were always an outlier. it turned out their client list was quite strong. >> it's going to be cisco's. 9 to 12 months, by the way. that's why it's trading -- >> was that a segue into activision blizzard? activision blizzard, cgen and spirit. >> spirit, i got nothing for you. >> talks broke down. they broke down. >> they did? >> that's what i understand. >> wait. what talks? >> they're trying to get the deal done. >> yeah? >> no deal. >> and we'll get to activision and microsoft. we'll update people on that. and on c-gen 5 as well. >> why was there so much news today? so much research. the vast majority of it, in keeping what i wrote last night, was negative. there was just such a give-up that i got to go with williams and say that yesterday was an important moment for the market. >> well, you certainly have been sounding off on apple today. the iphone 15 kicks off

worldwide sales this morning. tim cook greeted customers in new york city about an hour ago at the fifth avenue flagship. tech giant hopes its new product is the solution to this dip in smartphone demand. apple is coming off of three straight quarterly revenue declines. you call the 15 a monster this morning. >> by the way, if you want to see monster lines, look no further than china where at one point two weeks ago, we just go back and rewind the tape, it was considered to be that the party would, you know, detain you if you bought an apple, completely untrue. i think the thing that matters the most that people are very excited about is the way the titanium is so light, david. it's incredible. when paired with a watch, you can play, like, hot/cold, find out where it is. but the camera, you can go like this, take a picture like this, and it is not blurry. and that's a remarkable thing. there are so many different aspects of it that i will get it

asap. >> you will? >> oh, absolutely. it's just so different. get good trade-in value. it's so much better. by the way, if you drop it -- >> you're not one, and you obviously indicated that at the very top of the show, who believes there should be real concern about overall demand? >> absolutely not. there should be no concern. i have -- i believe that the consumer is very challenged in a lot of different ways, and i think the people go to the dollar star are not going to buy this. there's a couple research saying the carriers are not necessarily going to make any difference. that's completely untrue too when i speak to the primary carrier, but i would just say that this -- this is underrated new addition that i find a big break with the past. >> the overall point about weak smartphones globally, reflected a bit in this piece that qualcomm is cutting jobs in r&d in shanghai, jobs in taiwan, hundreds, not thousands, but still. >> look, there's -- qualcomm did get, obviously, they got the

apple contract, and look, i can say it's anecdotal. a guy posted a bunch of pictures from china stores. i got another five or six pictures i could have posted but the reception for this, i find to be a little bit extraordinary versus what the incremental nature that the press said it had initially. further, the reviews got better, but i just think that if people tried it, they would say, wow, this is a very different phone, much more -- a big break with the past. >> yeah. >> i really think that. >> other interesting thing. we're going get nike next week. citi today does some survey work in china, and they argue that consumer intent is favoring local brands over western brands. we'll see. >> there are two local brands that are doing quite well. i would point out, by the way, that this not -- that there's a series of articles, they're not planning, they're not planning, about starbucks and how starbucks is challenged in china. and yet, right at the exact time that people say it's challenged,

i would point out that the company just -- the first innovation tech center, largest manufacturing and distribution facility outside of north america, opened with great fanfare, with government support and attendance this past week, we are now for the first time in 24 years since we opened in beijing vertically integrated in china. not mentioned anywhere and that happened this week. not mentioned anywhere. all we hear about is lucken and the people who used to run lucken. i don't know. last i looked, lucken, you banned. like you're banned from doing any deals in this one because you're charlatans. >> okay. >> is that the thing? he still does it? >> rendered him speechless, jim. congrats. >> thank you. when we come back, the uaw preparing to possibly ramp up strikes against the d-3. that deadline at noon eastern today just hours away.

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don't delay the game with verizon or t-mobile 5g home internet. catch it on the xfinity 10g network. it will uaw set to announce more big factory strikes if what it calls substantial progress is not made by noon eastern. our phil lebeau is on the ground in michigan this morning.

>> hey, carl. at 10:00 a.m., so, what, about 45 minutes from now, uaw president shawn fain will go on facebook live, that's been his favorite way of communicating with the rank and file. at that time, he will give an update on the talks, and if there's not what he deems serious or substantial progress, then we will likely hear about more strike locations. is it three? is it two? is it one? that remains to be seen. those locations, workers will start to walk out at 12:00 noon. the other story that's getting a lot of attention here in detroit and is raising the ire of auto executives, leaked messages from within the uaw where one of the executives with shawn fain was messaging another member of the uaw and said, essentially, we're going to keep this thing going for a while. it said, "if we can keep them wounded for months, they don't know what to do. the beauty is we've laid it all out in public and they're still

helpless to stop it." if you take a look shares of gm, ford, and stellantis, the reason this raises so much anger is they continually hear shawn fain say, we're here. they don't want to negotiate with us. they're not stepping up to the plate. they're not bargaining in good faith. they filed a complaint with the nlrb. this message goes completely counter to that, and by the way, when you talk with executives at the automakers, they will say, time and again, we don't feel like they're -- we don't feel like the uaw is stepping up to the plate. we feel like this is just dragged out and they have pretty much decided, you know what? we're going on strike, whether it's one or two locations or multiple locations, and we're going to keep this going for many, many weeks. so, that's the situation as we wait to hear what new locations may be walking out at noon today. guys, back to you. >> phil, could the empire be striking back? is today the day they take the clothes off? i have to believe that ford is not going to sit here and take

this anymore. i have to believe they're going to say, listen, get rid of this guy. we'll negotiate with someone real, this is ridiculous. i think it's today. >> well, jim, i'm not sure. okay, let me play this out. if you think that jim farley should say, we're not going to deal with shawn fain anymore, the uaw is going to come back and say, i don't care if you don't like shawn fain. we elected him. maybe not by a huge margin, but we elected him to be in charge of this union, and jim farley may not like it, but the uaw will come back and say, too bad. that's who we have here. you don't like it, that's the way it goes. so, i understand what you're saying. but i don't think that the solution is for ford to say, get rid of shawn fain. >> well, i -- >> nor do i think that jim farley will do that. >> how about if jim farley says, you know what? we're going to close all our plants. we got five months worth of strike fund. start dealing in good faith. phil, this was such -- you and i communicated. i thought this was such bad faith. i do feel a bit of pique because

i thought the bad faith of these messages made it so someone in the industry has to say, this is not about the deal. this is about corporate sabotage and wrecking these companies. these were just egregious messages. >> and that's the anger that you hear from auto executives. and look, we all understand, the point of a strike is to inflict pain on a company. you don't go on strike to say, hey, can we please have this? you go on strike to send a message to the pocketbook. and that's what they're doing here. the problem with those leaked messages in the eyes of many auto executives is, if you have no intention on reaching a deal, yeah, let's shut it down. because then, we can at least say, you know, okay, when you're serious, we are ready to talk. but if your plan is, we're just going to continue this, and that's how it's going to go, well, then, what's the point of negotiating? >> phil, real quick, i can

imagine what the lebeau meter is showing in terms of a sentiment. >> you know in the '50s where they used to go, whee! it's not going to get resolved any time soon, david. these messages make it clear. what we're going to hear from shawn fain today, i would be surprised if he says, no more strike locations. i think what he's going to say is, we have made it clear this is what we want. he'll run down their list of grievances and then we will hear local here, stand up, local here, stand up, walk out. and that's what they will do at noon. >> phil, we'll be talking to you well before then. that's our phil lebeau watching the progress in the work stoppage this morning. when we come back, we'll get cramer's "mad dash," countdown to the opening bell on this friday as the bulls trying to get the ball back somehow. (ella) fashion moves fast. setting trends is our business. we need to scale with customer demand... ...in real time.

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take a look at some s&p gainers. you got some energy at the top here as jpmorgan gets more bullish on global energy, says the near term upside risk to crude is $150. ford as well on some flash heads suggesting some optimism. we'll find out. opening bell is coming up in less than five minutes.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. let's get to a "mad dash." opening bell for this final trading session of the week is two minutes away. meta. >> yeah, david, i know that you're an aficionado of catalyst watches by research companies. >> i'm always on alert for catalysts. >> citi is putting out a catalyst about meta's got a big festival coming up, and they are saying you're going to see this is the 90-day positive catalyst watch ahead of meta connect on

9 /27. we're expecting more details around meta's gen a.i., generative a.i., plans in mid-october and it may be a huge increase in reels. i think it's very, very important. i understand that mark is making incredible progress in this and the improving advertising situation could take meta up big. catalyst watch, meta. what else do you need? >> okay. it's 12 months, already up 107%. year to date, up almost 150%. >> awll i can tell you is i expect some big things from this conference, and i think that meta's got -- it's meta, it's amazon, and it's google. that's the -- like, abc, nbc, cbs when we were growing up. >> of generative a.i.? >> advertising. >> yeah, meta connect is, i think, tuesday. also some comments about the ad market. they believe reflecting higher.

>> reflecting higher for these companies. amazon, able to have a couple tiers. amazon, last night on football, they really -- wow. they have stepped up. that was some very good presentations. really good. >> that's the opening bell. the big board, it is the prime minister of thailand here in new york for the u.n. general assembly. at the nasdaq, it's theprime minister of vietnam, who rang the bell here yesterday. >> great allies. don't get -- we don't talk much about our allies, which is bad. we've got some great friends. >> we mentioned some of the action on ford this morning premarket. let's get back to phil lebeau with more on that. >> hey, carl. call up shares of ford because this is significant news. we have learned from a source familiar with the negotiations with the uaw that when uaw president shawn fain addresses the state of negotiations with

all of the automakers coming up at 10:00 a.m. this morning, he is going to say that there's real progress in the talks with ford. now, it is unclear to us at this point if that means that there will not be any strike actions at more locations for ford or if there will just be more strikes being called at general motors and stellantis, but this is significant. this is the first time that the uaw basically, what we understand, that there is some indication from those close to the negotiations that there is substantial progress with one of the automakers, and in this case, it's ford, and that's what we're going to hear from shawn fain coming up at 10:00 a.m. this morning. guys, back to you. >> this is what i don't understand. jim farley has been saying, look, to fain, we hired union people, they laid off union people. we have no temporary workers. stop treating us as if we're gm and stellantis and be serious or go. and i think that the uaw may be taking farley up on this.

>> well, we've long thought that they were further along than general motors and stellantis in terms of the negotiations, jim. but then we were thrown for a -- off the track of that when shawn fain camout with his messages last week and he took ford to task. it's our understanding that there is real progress there between the uaw and ford. now, let's not get carried away. the people that i have talked with have not given any indication that there's going to be an agreement any time soon. but it is the first time that we have heard about one of the automakers making progress with their discussions with the uaw. >> perfect. >> phil, appreciate that. phil lebeau will be coming back to you quite a bit today. jim, meanwhile, got a little more labor piece in australia with chevron lng. that's 7% of global supply. >> look, i have eqt on, which is the biggest in our country, tonight, and there's a lot of difference in our country, where california's trying to make some

rules about how much you should be able to have natural gas. the natural gas that eqt is doing is now, because of the -- that last pipeline that was done in congress, they're going to be exporting. there is so -- we are going to own this market. and i know australia, i think they're overproducing in australia. we have enough natural gas to become so much more important than everybody else. our refining costs are so low. the story's been kind of lost in the whole oil going too high, but natural gas is at a sweet spot. we have a lot of companies making $1.60. eqt does have higher costs, but i brought them on because i want to know what australia means, what it means for us, but we are just a powerhouse, and i don't think people realize how good we are at it because our president's not a real fossil fuel guy. >> right. do you think energy is still the most interesting thing going on here? are we turning krocorners? >> i just like nat gas. if it's cold in europe, it's going to be absolutely

incredible how much money these companies can make. if it's not cold, no. but it will be highly unusual if it's two years in a row. then again, we do have an incredible weather pattern in our country that's much warmer. but i just really like natural gas here. my favorite is coterra, which is the old cabot oil and gas, and they have dollar refeigining co and they are all in. >> let's talk activision-microsoft again because the deal is getting closer and closer to closing. very important news overnight from the cma saying it considers the restructured deal, makes important changes that substantially address the concerns it set out in relation to the original transaction earlier this year. earliest it could close, probably october 6th, but that does seem to be a significant possibility at this point for that transaction. remember that we thought was,

for all intents, dead when the cma said, no. and really, there had been no road map for companies to do what microsoft has, and activision have succeeded in doing. namely, rolling it back and getting the outcome they wanted. you know, the fight here in the u.s. was never the main fight. it was really the cma's objections that were thought to be permanent because the idea had been that if the ftc did object as they did, you could beat them in court, which they did. there's, again, what i told you earlier. you know, the question now is simply, really seems to be one of timing because microsoft has offered remedies to ensure the terms of the sale of activision's rights, that is, the streaming rights to ubisoft, are enforceable by the cma. really remarkable what microsoft and activision were able to accomplish here, and that's why the stock is trading ever so closer to the $95 price after

there is an increased reverse break fee, but that is really not going to come into play here. very soon, microsoft will officially own activision. >> i'm so glad you're pointing this out. one of the things that is amazing about the apple 15, games. lot of the team i work with, my team, are gamers, and it is just extraordinary. it's hollywood production, taking these games, like an activision blizzard game, and making it so it's lifelike. fantastic. you'll have to come over to my house and use it. >> okay. >> gaming night at jim's? >> absolutely. and we'll watch amazon, you know, thursday night football. we'll do everything. >> we'll do it all. >> he doesn't even believe me. and the watch. he doesn't have the watch. the watch is just a device to find your phone when you lose your phone. >> that's great. >> it also tells time. >> wow. that's quite a device. >> jim, yes. that's what it's all about, the double tap. the watch operates, it reads the blood flow in your wrists.

>> yes, and i can check his blood flow. i the turn off his -- you know what it's going to be? this is called toto. you know what toto is? turn off the oxygen. >> oh. i thought maybe we were making a "wizard of oz" reference. another story that had a big impact on at&t and verizon shares was, of course, that "wall street journal" investigation of lead-covered telecommunications cables across the u.s. buried in various places. there were some significant questions raised not soon after about some of the allegations in the story, and i talked to john stankey at at&t a couple of weeks back about it as well. he said, listen, we've done a lot of investigation at this point. we do not see the significant risk. the epa did -- at least has done some sampling of its own, and let me read to you from a press release out from the epa.

"epa sampled soil for lead in an area nearsome telecommunications cables in coal center, pennsylvania, and california, pennsylvania. epa's scientific review of the data and current conditions in the area indicate that there are no threats to the health of people nearby that would warrant an immediate epa response action." not seeing much of a response here, and at&t and verizon, they did come back a bit, but you remember how much those stocks were down. the concern being that perhaps, especially at&t would have to unearth thousands of miles of cable and remediate to the tune of billions of dollars. that seems to be less and less of an actual chance. >> that story was so big. i thought the plaintiffs bar was going to come after them. it had all the earmark of the next groundwater pfas. you're telling me it wasn't that significant? >> they did say, listen, the results they did show some soil samples had lead concentrations above an epa screening level of 400 parts.

but they were primarily covered with grass. well maintained grass provides coverage to prevent exposure. they said this is not where children gather and it's not a concern. >> wow. that was a long, long investigation that they did. >> it was, it was. without a doubt. >> is that much ado about nothing? >> i don't want to say that, jim, but i think there were some questions raised and continue to be some questions raised about the validity of some of the sampling that they did. >> that's amazing. here i thought he was going to do the 1-0 deal. >> i'm not doing that. >> you did this. >> i did this. i got some other things i can do too. you want an update on c-gen and pfizer? >> i happen to know that the bladder cancer's end points were met and that's a same drug they use with keytruda. >> the question on pfizer closing the deal, of course, is when are they going to be asserting compliance with the second request from the ftc?

you can see positive response on pfizer and seagen. the cv 302 hitting its end points and supporting label expansion. nobody was questioning whether pfizer didn't want to buy the company, but there were some questions about whether this particular drug would be a success. >> can't give people too much hope. i always find that the old seagen, seattle genetics, would urge me not to say, listen, these are cures, but it's great that they met the -- >> we talked a lot about pfizer's performance this year, of course, after, you know, what were covid sales? i don't even know what the billion number was. and obviously, helped get rid of the covid pandemic, that being pfizer, but when you look at the stock over the last 20 years, it's done nothing. >> no, it's not been great. >> that's the last year, obviously, it did have the spike as a result, but there's going

way back. i mean, that's just not what you're looking for, 11%. maybe when they close seagen, of course, some of the money that was taken in, used to acquire this company, they will have a new investment story they can start to sell, jim. >> they have fantastic anti-cancer. fantastic platform. it's a platform. it's not just -- you know? and i like that. it reminds me of keytruda. they're partners. they bought the biohaven -- i was the chief spokesperson for the american migraine association. i don't think they've done nearly enough with that drug. >> the idea is that some of the benefits -- some of the revenues and/or profits they received from the covid vaccine would go towards trying to fuel new areas for pfizer to move ahead. >> great call. stay on that. >> by the way, don't have updates, really, on timing. again, we're still waiting for them to assert plans with the second request, that is pfizer and seagen, with the ftc to get

that deal done. >> excellent. >> or to be in a position. jim, industrials, deere, lowest since june. boeing, lowest since may. boeing's down 11% for the month, and now we got this downgrade today over at cfra. >> boy, it had no new facts to it. it was just kind of like, hey, listen, it's not doing that well. i don't mean to belittle it. i'm just saying, that's part of what i was saying last night. you could knock a stock over with a feather. deere, everyone knows there was no super cycle, sells at 11 times earnings now. they had laid off some people and now suddenly no one wants to own ag, and ag was a super cycle. >> got the same call last week out of evercore, basically ag schedules in europe, inventories building for used. >> yeah, and i would have thought, carl, that somehow that negative story would have been discounted in deere's stock, and it wasn't at all. another negative for deere. it hits again.

that's the sign of a very tough market. but you know, against that is still the -- i care about the larry williams call because he was so negative, but i also think that we -- the only thing that people seem to want to buy is the oils. that super cycle piece that we saw this morning -- >> jpmorgan? >> jpmorgan. i thought that was a terrible piece, because you know i hate super cycles. >> their point is largely the stocks haven't kept up with the commodity prices. >> great. that's just a lot of effort. but it is a terrible moment. right now is a terrible moment in the market where you can say something negative. that boeing piece, all it said was, like, boeing's not doing as well as we thought. and boeing goes down big on that. what kind of market is this, david? >> what kind of market is this, jim? i'll ask you. >> it's a market that says to me that we are so negative that be careful. things could rally. that's what i'm saying. that's what i'm saying. it's too negative. you can't have the same pieces of research come out every day and the stock drops the same

amount every day because of pieces that we already know. that doesn't stand up under close scrutiny. >> okay. >> okay? >> i'll accept that. i'll accept that. couple pieces about fees going higher. one is amazon going to bring in ads next year. >> i thought that was a big piece. >> $2.99 if you want to avoid the ads. and mcdonald's raising their fees on franchisees for the first time in 30 years. >> i had wing stop, you can make t $2 million. but i mean, you can see they could raise theirs because there are not a lot of wingstops. most of the wingstop areas are taken, but this is a big move by mcdonald's, and why is it up? this can't stand. you can't have really big news that's great and a stock not go much at all. you just can't. this doesn't make sense. the only thing that's gone up

are refiners, which you mentioned yesterday, because the margins are so big. i don't think this market is as bad as -- it can't stay this negative. it just can't. another stock that is up is charter. carl mentioned there's an upgrade this morning over at wells fargo. upgrade to overweight. they say the worst of cable is behind it and charter is the clearest expression of the new normal. of course, charter having just emerged from that fight with disney. and you know, i think the longer term plan, a company like this is sort of the -- connects you to everything, whether it's wireless, broadband, and if video is a part of it. total connectivity, one bill, one -- that's a ways away, but that's sort of the -- that's the longer term goal. they seem positive on rural growth and video as well contributing to ebitda acceleration is what wells fargo says. >> but that's a good piece. that's value added piece. that's something no one was

thinking. that's what i want to see right now. >> yeah. >> not, i'm as negative on nvidia as everybody else. you know what? it's time to sell oracle. i can't stand microsoft. these are people who just throw -- they're towel throwers. they're just towel throwers. >> and he does ask the question at the end, why not upgrade comcast, our parent company? it does appear it's because of the continued further investments in content and experiences. that obviously includes streaming. >> okay. >> nothing makes jim sadder than mentioning peacock. >> peacock. $45. >> what's $45? >> you can take $45 to the bank. >> oh, you mean comcast? >> it's an epoxy to $45 right now. it's gorilla glue. >> it's stuck there. >> it is. it's been a busy morning for global pmis. now it's our turn. let's get to rick santelli. >> it is our turn, and some things aren't changing very much. these are september preliminary

reads from s&p global. they will change in a couple of weeks. on the headline number for manufacturing, it is the fifth consecutive contraction month. 48.9, and that is, well, actually, 48.9 is the strongest level going back to april of this year when it was last positive at 50.2. speaking of 50.2, that happens to be what the services pmi is, and that is the eighth consecutive expansion. we know services have been more healthy than manufacturing, 50.2, and finally, the composite, 50.1, also the eighth consecutive month in expansion mode, and both those numbers on the services and composite are, well, they're actually the softest since january of this year, but still over 50. we see interest rates somewhat lower on the session, but definitely higher on the week. twos are down three in a session, up nine on the week.

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. some week to date laggards on the nasdaq 100. moderna and lucid in there as well, intel, align, illumina. it's been a tough week for certain sectors of the market. holding tono 4340 roughly. stop trading with jim is up next.

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time for jim and top trading. >> sometimes, carl, our colleague david faber would say what's the key to the market and today if we're going to have a turn, a negative piece by barclays about tesla talking about a slow down to missing quarters. if tesla is able to turn, i believe we could have a substantial rally because this is a negative piece.

>> do you buy the "times" piece this uaw regional director said workers at tesla are thinking about organizing or is that self-serving union commentary. >> i was talking to david about organizing. tesla doesn't have anybody -- the machines are organizing? >> they do have employees. they'll higher more for the cyber truck when that gets working. >> that's a right to work state. >> it seems unlikely that there would be -- >> i agree, but i just want -- this is a true negative piece about numbers and if tesla can rally on that, then that says we have -- we're done dumping, when every stock in this market except for the refiners, up with group, a good leadership valero. >> oh, yeah. >> bow here ro and valero. >> how are you closing out the week today?

>> having federal realty on. i want to find out about the states of reits. tobey rice, and then leon topalian, nucor has been money. >> u.s. steele, any chance nucor would look to partner? >> nucor does not need them. >> just for something, nothing? you don't think so? >> no. they're the michael parsons of steel. >> wow. >> fun to watch. >> wow. >> have a great weekend. see you tonight. "mad money." >> carl have a great weekend. >> nice. sick burn. when we return, the latest on the uaw strike. don't go anywhere.

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that's 1-800-376-4376. ska. good friday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with david faber, leslie picker at post nine of the new york stock exchange. sara eisen is on assignment. mixed market finishing up a tough week, worst week since

march for the s&p and nasdaq. watching the pmis, some of the media names and autos. >> standout stock, ford shares rallying. phil lebeau reporting on the progress with the uaw. joins us from outside a ford assembly plant in wayne, michigan. phil? >> let me give you an update on what we're expecting to hear from uaw president shawn fain in just a couple minutes. sources familiar with his comments say that a couple things will stand out. one, he will say that there is real progress between the uaw and ford. whether or not that means there's no strike actions against ford remains to be seen -- furtherstrike actions remains to be seen and the other message, he is going to invite president biden to come to detroit, or to another location where a strike is taking place, and join the picketers on the picket line. not sure the president will take him up on that, but those are two messages we expect to hear

from shawn fain when he begins his facebook live presentation in a matter of minutes and likely hear if there are more strike locations and those strikes, if he announces them, when he announces them, he'll say this particular place, this particular place, those strikes would begin at noon. so the workers, the union members would walk off the job at noon. >> thank you for the update. as carl said, we'll keep checking back in with you followings they so closely for us. phil lebeau. >> breaking news on the fed. steve liesman here's with that. >> david, yeah. susan collins, the first fed president to talk after the meeting on wednesday and expects rates to stay higher for longer and says basically in agreement with the statement and those hawkish forecasts that came out. she says further tightening is not off the table. the fed will stay the course, collins says, to achieve its

mandate when it comes to inflation. and the recent statement that was throughout and the fed's pause should not be mistaken, does not imply the fed reached the peak funds rate yet. current policy does require patience. some inflation readings have been encouraging. that's one of the few good things she says. core services, inflation exshelter has not improved with price stability. on the upside, which may be the downside for fed officials, she says economic activity continues to be above trend, though she is optimistic that price stability can be restored with an orderly slowdown of activity, including, by the way, only a modest increase in the unemployment rate. the pathway to a soft landing she suggests has widened and there is some evidence supply and demand are coming back into balance, especially in the labor market. guys? so a little hawkish out of the

box there. >> although, i mean, did sound somewhat optimistic. the widening of the soft landing is that a positive or anything new or not? >> definitely a positive. but i think it comes along with higher rates and certainly a more sustained what would you call it, sustained restrictive level for rates. i think the reason you might want to follow collins, i'm not sure she's a died in the wool hawk here. i would have thought more dovish but she's coming out in full agreement with where the -- not just the policy statement is, but where the forecast is. that hawkish forecast freaked everybody out and the idea that the neutral rate may be higher for longer and that's an additional challenge to the stock market above and beyond whatever the fed does this year or next year. the idea that you could be talking about we have john taylor on yesterday on "the

exchange" talking about maybe a 3.5 or 4% long run neutral rate. you got to factor that into your investment thesis as you look at the risks ahead. >> i'm interested steve in the line from collins, cash levels are returning to prepandemic normals, households, businesses expected to become more normal to rates, what bofa, consumers showing interest in borrowing more and the line from ken griffin you would expect some of this to bite in ways it hasn't in the past. >> i think that's very true. all you have to do is put up a chart of the two-year, 10-year and there's been essentially a step change where now all of a sudden -- not that chart, that's the dow. okay. which shows there's been a step change in rates and those rates are starting to felt near the economy in ways that they hadn't before. there's been this big debate on the fed about the lags of policy, and as you'll note,

chairman powell on wednesday used the word carefully i think six or seven times proceeding carefully and that's why. they want to see the lags and how much effect there will be, whether or not there's tightening of credit from the banks and that kind of stuff and what kind of effect that has on economic activity. they're going to go slow here but there's little forecasting here from the fed that the fed that will be reducing rates any time soon and keeping alive this idea of maybe one more hike this year. >> steve, thanks. good to have the fed speak back. our steve liesman this morning. stocks have dropped as you know as treasury yields soared. 10-year hits the highest level since november of '07. next guest says higher rates are not a road block. chief investment strategist brian belski has a year end target of 4550. good to see you. how does the economy evade what some would argue are increasing effects from rates?

>> great question and good morning, everyone. thanks for having us, carl. you know, i think it's less about the economy right now and more about the stock market trying to digest what is increasingly becoming normal. if i go back and look at what we wrote in our year ahead piece we published in november, the predominant theme was the return to normalization. i think that's what the broader trend is over the next three to five years. you have to remember that the average 10-year treasury over the last 70 years is 5%, and what we think is happening right now is that the stock market in terms of the u.s. stock market is entering into this kind of normalized performance pattern of high single digits, low double digits, where earnings will be high single digits and we'll see some sort of a trading range of the 10-year treasury between 3 and 4% or 4 and 5% and gdp of 2 to 3%. how we get there is we've had

shock last year and awe this year, especially considering what's happened with stock market performance the first half of the year and i think the biggest troubling factor is this whole -- i'm getting bored with this higher for longer interest rate thing. of course, we're higher for longer. zero was not normal. zero rates are not normal, and i think what we're going to do is settle into normalized trading. i think the investors that have been in the business less than ten years are not going to understand this, quite frankly, because we've reared an entire generations that only believe you buy stocks because interest rates go down. interest rates stay higher because the economy is in good standing and the stock market following suit. >> bofa has a good desk note where they talk about the movie "wall street" 1987 where the real estate agents are going crazy with business with mortgage rates at 8, 9, 10. the shutdown if we get it, the strike if it expands and student

loans, can offset good seasonality going into year end? >> good seasonality is kind of what everyone is keying in on. we had a bunch of meetings withenutional clients this week and there are fears with respect to the government shutdown and we quelled those a little bit going back to 2011, and saw what happened. the president's approval ratings at that time were higher than the current president. i think we're going to get a better standing in terms of trying to get this shutdown done faster. that's number one. on the student loan payments that's a hangover, but remember, you said in the prior hit that cash flow is up, the consumer has been smart in terms of their money, so i think in terms of interest coverage ratios on the consumption side, i think we'll be able to weather that. i think the bigger issue is what happens into next year with the added volatility of an election and stock market gains this year that people weren't really positioned for, so i think we

could get a, quote, unquote, chasing factor in the fourth quarter that will have money managers to chase the market. >> how should investors be repositioning now, given all of those confluence of factors? in your latest note you talk about technology, energy and industrials benefitting during periods of high interest rates. is it too late for those sectors? >> no. i don't think it's too late for your favorite sector financials that you cover. everybody hate financials. but i think, you think of financials and banks in particular, in the very bifurcated fashion, meaning the really big ones will do well and the really small banks are going to do well. everything in between is going to have a harder time, and then also, the scale theme, the theme of scale, asset managers and brokers can do well. i think the big banks will come out with new products that will help cover some of these new debt costs, number one, especially on the consumer, but also on the commercial bank

side. look for that. number two, value starting to come back a little bit, and by the way, dividend growth and lower kind of duration assets are starting to work. on your cycle, that'sing if to be a call for 2024. i think even more cyclical on the industrials and materials can do well, as we start to see increased onshoringp and capacity coming back defined by a.i. and robotics >> an explanation of where we are at the moment and headed our way. have a good weekend. thanks. brian belski. >> you too. as we these break our road map for the hour, high hopes for the ipo market but recent debuts are slumping. so is the ipo reopening already on hold? plus, apple's latest iphone is hitting store shelves today. we're going to head to midtown manhattan, later this hour. ma> the uaw shawn fain making rerks. we will bring you headlines after a short break. them. we're excited about what ai will do for business.

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is going to have a good upside for a really long time, and that's why i bought back with a higher price than $51. i just want to have all the investors have a good time going forward. >> we feel like not focused on the price necessarily today or next ten days, but creating value for shareholders over the

next ten years. >> we try to find investors that shared our long-term focus and honestly we've never tried to top tick price when we raised our private rounds. that's when i talk about the public markets, investors that want to go long with us? >> just a few of the ceos and business leaders behind the big ipos of the last week and a half whose stocks have stalled out, despite rallying on their respective first days. you have arm pricing at $51 a share, now trading below that at 50.84. klaviyo and instacart each priced at 30, both trading marginally higher above that issue price, but still dramatically -- dramatic pressure relative to the first day of trading. wall street cautious on the stock with susquehanna and arm initiating instacart at neutral each. i don't know if you saw this whole tweet. he talked about his short bet on treasuries but embedded in there

was a sentence that encapsulates what people are talking about with regard to the ipo market imagine trying to do a massive ipo where the underwriter, insiders and short sellers, kind of the key there, all selling at once, competing to hit every bid on the way down while the analysts downgrade their ratings to sell. so there's kind of a confluence of factors afoot here. david, you pointed out the float a number of times. >> for all of them actually. >> all of them but instacart in particular. >> with the cornerstone investors, which are supposed to be more of a stabilizing mechanism. you have partners buying the offering and therefore it's not as much uncertainty world war to w -- who would flip or sell the stock. the ipo market -- >> arm was surprised wouldn't say aggressively, per se, but the multiples are high.

>> over 100 times. >> trailing. >> the question about growth is a significant one. they are talking about an a.i. future, but it's not as though it's written in stone that's going to occur. >> yeah. >> although, i mean, as an underwriter it's a little more than a week now, but that's not great. >> not the best. it's interesting because on these road shows you heard so much about the demand and it's oversubscribed x number of times and so much, you know, in the way of investors clamoring for these things. doesn't appear they are necessarily there for the long term. i have learned, you know, as we look ahead to future ipos that berken stock in particular, that one is still on. they're not undeterred by the price activity we've seen with the three large deals this week. they are aiming according to a person familiar with the man for a listing in mid-october. that is still ongoing. we'll see whether this actually opens up the ipo market in a meaningful way, or if people

look at this and say i'm going to put my plans on pause with the exception of berkenstock and see how this market treats the riskier securities. >> i would argue the other reaction to a couple names, arm and cart, have been they're coming to market where rivals have taken steps to get competitive, and you have arm as i think it was susquehanna today testing the limits of royalty payments against open source and then with cart, uber and dash, having already done a lot to bolster their balance sheet and their cost structure so they're not coming into a vacuum. >> not at all. competitive pressure. there's this question about discretionary spending on the consumer. if you're in instacart are we at the point in the economy where consumers are willing to pay up for the tips and fees to make their lives convenient. want to bring in bob pisani. you've been reporting all week, bob. >> i'm waiting for the 1% float.

because that's what they're down to. the only way to keep these things up. 10% float on most of these right now. there's two speed bumps we've had. number one, a very mediocre reception to the recent crop of ipos. that's a problem for arm, instacart and klaviyo. number two, the big problem, rapidly rising interest rates and a lower stock market. my heavens, if it's not an ipo killer i don't know what is. that is the classic ipo killer. mediocre reception, rising interest rates are a problem. we mentioned instacart, it broke below its initial price of $30. btig and susquehanna with a mediocre rating of neutral and pull valuations in both those reports. arm broke below its initial price again today. klaviyo at 31, barely above 30. this is a mediocre reception here. remember earlier candidates we were talking about oddity tech,

k k kenview, blow as well. 800 tech unicorns sitting out there. you can go public at a lower valuation. we talked ability lower valuation and we talked about the need for haircuts and issues like that. stay private, continue to see funding. good luck. might be able to get it. it's going to be more difficult. or you can merge and deal with the fallout from merging. i think a lot of people are going to do that if we continue to see this higher rate mark. you were talking about birkin stock but they're not the only one. we were talking two or three weeks ago, a laundry list of companies throughout, taur ro, the car sharing company, rock, the marketing company, flexport management firm, shine shein, waystar. stripe, canva, fanatics, sitting out there. if the rates keep going up,

guys, if we see the 10-year go from 4.5 towards 5% in the next month or so, and the s&p is down 3 or 4%, it's going to be a lot tougher for some of these companies to move forward. that's my main concern right now. guys, back to you. >> bob, you bring up a good point about overall valuation and that was a key part of some of the sell side research notes. one said the cart is full insinuating instacart's valuation has had its full value at this point in time. the road shows seem to be going well. all price at the high end of the range, above the range, two boost their ranges. you have this unbridled demand that you need to give shares to, you can do so at a higher price. so, you know, was there a retail component, do you think, that they were banking on that didn't come through here? what is kind of the missing piece of the puzzle this time around that, you know, leads to this gap that we're seeing in

terms of pricing and then the aftermarket demand? >> yeah. the two things are pent up demand that existed and we saw this with cava where 22 goes to 42. what happened here. that's an issue. and the second is the float. david is right. in the old days, and i'm going back to the mid 2000s, you used to have floats 20% was very typical. 25%. nowadays we're 10% and below that at this point. i was joking before. i'm waiting for the 1% float to come out and that's how you control the price. you have a little pent up demand with the controlled float and you get these one day pops. look what happens. everything happens on the first day. even in the first hour you get the pop and they sell into it. look at the price action on instacart. people are going to catch on to this. you think the average viewer at arm first day was $60 since the average price. where is it now? $51 or so.

that's going to be noticed by people and it's going to be harder to get those kind of first day pops. that's why i think there's still pressure on valuations for these companies. >> yeah. bob, thank you. bob pisani. quick programming note by the way as we take you to a quick break. we're officially under a week away from cnbc's delivering alpha investor summit. that's where the street's top investors and business leaders will break down where they see risk and reward. so scan the qr code or visit r reevents.com/delivering alpha fomo. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund

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prevagen. at stores everywhere without a prescription. we mentioned those remarks of uaw president shawn fain. to phil lebeau with the latest. >> carl, we are going to see more strikes at noon today and the strikes will be for gm and stellantis. at their parts an distribution centers around the country. all of them. 38 of them. located in 20 states will walk off the job at noon today. the interesting decision here to do the parts and distribution centers as opposed to an assembly plant or a major

component assembly shop is that this is one of the areas where they believe they can inflict some pain on the automakers. because if you don't have the parts being shipped to the dealers, to other locations, that really limits your ability to continue manufacturing and filling out your entire supply chain. so again, we're looking at 38 uaw represented parts and delivery centers for general motors and stellantis collectively 38 in 20 states where those workers will be walking off the job at noon. one last note as we reported earlier, carl, shawn fain did talk about progress being made with ford. that's why we have not heard about more strikes impacting ford. he didn't -- he also went to great lengths to say they're not all the way there with ford. it's not as though, you know, we expect a contract to be reached within the next couple days, but that is the update regarding the

uaw and further strikes today. guys, back to you. >> phil, what a are you hearing and has he mentioned about what are some of the key sticking points that remain with ford they're trying to work through? sounds like there's been real progress, but how far of a gap are they on everything from, you know, pay to benefits and so forth? >> hard to know how much the gap has closed over the last week, leslie. certainly there is still a gap when it comes to the percentage pay increase. ford is at about 20% over the next 4 1/2 years. the uaw would like it to be in the mid 30%, close to 40%. let's see how that gap changes as negotiations continue. and there's also the discussion of a couple other areas in terms of cost of living and tiers. a lot of that work he called out and said we've made real progress there, but he did not say with any of the areas where there's progress he did not say that's good enough. we've gone far enough or they've gone far enough to meet our

demands. >> phil, i guess the ball is in the white house's court and see if we get reaction to the offer from fain. we'll come back to you soon. phil lebeau in michigan. a news update wil silvana henao. >> good morning. here's your cnbc news update at the hour. new jersey senator bob menendez has been indicted on federal bribery charges. the charges come after a year long corruption probe into whether the powerful senate foreign relations chair and his wife improperly accepted cash and gifts. menendez's office did not immediately nbc's request for comment. this is his second indictment since first elected to the senate in 2006. his other trial ended with a hung jury. ukrainian officials say 13 people were injured in a russian attack on a town near ukraine's eastern front early friday. the attack came as ukraine's military announced its forces successfully hit the headquarters of russia's black sea navy in crimea.

russia's defense ministry said one service man was missing after the attack. and the biden administration announced new regulations that would wipe medical bills from credit reports. the consumer financial protection bureau estimates one in five americans have medical debt on their credit reports. lower credit scores can limit options for housing, loans and credit cards. carl? back to you. >> thanks. turning to the week in crypto, after selling off following the fed's decisions on rates. some point to growing risk aversion across the street, of course, and strength in the dollar as headwinds for a rebound. second largest crypto currency ether some pressure in the red as it continues to under perform bitcoin. up 60% versus ether up more than 30. apple launching the newest iteration of the iphone today. will it overcome three quarters

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busy morning regard the fed. steve liesman with more news. >> another fed official speaking after the meeting. fed governor bowman saying she expects it will be appropriate to raise rates further and hold them at restrictive level for some time. she goes further than susan collins from boston who said they should be thinking about it. bowman is more positive that it needs to be done. she points right to the surge in energy prices saying the continued risk energy prices could reverse the progress they have seen on inflation. she has seen progress in lowering inflation. inflation is still too high she says. getting to the discussion we had at the top of the hour, as if she was listening.

governor bowman says strong balance sheets by households of consumers, along with credit from the nonbanking sector limits the effectiveness of monetary policy on the economy. the economy has remained strong including growing gdp. consumer spending remaining robust. other sorlfrtsz things like tha and solid job gains as well. what you see so far, two of the fed officials speak, more fed speak coming up and they are firmly backing both the policy statement and also backing the forecasts that was out there which was really what spooked markets, that hawkish forecast. >> no doubt it definitely gave the markets pause yesterday as we saw. steve, thank you. apple's latest iteration of the iphone hitting store shelves around the world today. take a look at tim cook earlier this morning. he's outside what was the flagship apple store outside the old gm building in manhattan. this as the tech giant faces

continued some perceptions of slumping sales of the device. steve was there with cook this morning and joins us with some details. steve? >> hey david. there's still lines. i got here before 5:00 a.m. today and there was a line around the block and it's still around the block. look, it's all cheers right now, but the pressure is on for the iphone 15 lineup to return apple to sales growth after three quarters in a row of declining sales and potentially and likely the current quarter a fourth in a row of declining sales. comps will get easier next year but everyone looking at the pro lineup of the iphone 15, especially the pro max which is $100 more than it cost a year ago. i talked to the first guy in line actually. he said he's here to buy the pro max because he wants the latest and greatest technology that apple puts into the pro phones that ends up trickling down to the lower models in the years to come. that's what analysts are looking

for. bofa out with a note this morning saying wait times for the pro max in the u.s. 29 days if you try to order online. that's almost a month of wait times for this. early signal that demand is strong there, david. >> always curious, any comparison for the lines today versus what you have seen in the past? i know it's a different location than you may have been at the past. >> yeah. it's about the same. i was here in front of the fifth avenue store in new york a year ago and very similar looking line. it's not the best read on demand, the lines, and also this is a flagship store. we're in the middle of fifth avenue in manhattan so it's going to attract more lines and attention and tourists and so forth than a store in a mall. online orders are a big deal. that's what all the analysts have been tracking and we should get more sales data coming after this opening weekend.

i would note china bofa saying in their note today, china sales looked -- the demand is not as high for the pro at least based on this preorder windows that they're looking at and then there's another note also by ubs note saying that early demand is down. concerns there as we see some renewed competition from huawei over in china. david? >> in fact, we're going to get to that with our next guest. thank you. steve covac. stick with apple. our next guest says, quote, unlike years past apple may not be able to rely on strong iphone sales to drive its share higher. that is tom forte who has a hold on the stock. 180 price target. explain yourself. why aren't you more positive in terms of what this will mean in terms of driving the stock prices? >> basically in years past you could count on the iphone, still the most important product as far as largest percentage of

sales for apple, to, you know, drive the stock higher. i don't think you're going to see that this year. they have multiple challenges. one of them being the soft economy in china. you think of china is about 10% of apple's revenue. the good news is you're seeing some pretty significant subsidies coming from the wireless carriers. they still want you to get a 5g device, but i don't think we're going to get that sustained lift in the stock from the iphone this year. i don't think the titanium is a big deal mover, nor is essentially the apple version of onstar, things of that nature. they have the de facto price increase because they're not offering the 128in mega bit pro max that can help a little. >> but again, connect it to -- are you saying it's because demand is not going to be what people anticipate that the stock won't move up? >> correct. >> okay. just want to make sure. you mentioned a number of things

there. >> the quarter sales after the launch. so correct. >> waze it that's not enticing consumers then in your opinion? china is a separate story and very much unclear, i would add. we had that potential government ban, although again, there it's still unclear. what do you think is not going to motivate people to upgrade at the same rates they have in the past? >> yeah. i don't think there's a lot of incre mentality between the 15 and 14. we still have a challenging macro. however, apple has performed well in a challenging macro. not a lot of newness. still persistent challenges in macro. apple pulled a lot of levers already. they've done the buy now and pay later, 50% north of 50% of their iphone sales are in installments. that's not low fruit to be picked. >> you mentioned the carrier incentives being significant here. is that key driver of demand?

are they different than they've been in the past? >> i don't think they're different, but i have been concerned going into the launch that you would see the carriers scale back the incentives, but i think that that's very encouraging that you're seeing still robust incentives from the carriers and that, you know, maybe that will result in better than expected sales for apple, but i had been concerned going into the launch but now i'm not concerned, but i don't know that that will be enough. >> tom, finally, you know, one of the bull arguments the company would make is that iphones that are traded in do retain their value better than android and those get sold in the secondary market and that in turn sort of amplifies the installed base and leads to services over time. is that a material part of the story? >> it is a material part of the story, but i would say there's not a lot of incre mentality there, meaning i don't think the 14 did a better job holding down into the 13 and 1, hthings of

that nature. that is a reason that consumers are fond of their iphones is that they do retain their value generally speaking and makes it less expensive to upgrade to the lest next generation device. i don't think there's incre mentality that will drive the iphone 15 sales. >> tom, thank you. >> thank you. real estate stocks in the red after the fed signaled a higher for longer position this week. o opendoor and redfin down double digits since monday. more on the markets with piper sandler's investing chief next. we're back in a moment. with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring to address operations issues? we can help with that, too. with the advanced connectivity and intelligence of global secure networking from comcast business.

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. welcome back to "squawk on the street." the s&p and nasdaq on pace for their worst quarter in a year. the markets are in the green today. our next guest believes a broad-based upturn in earnings is unlikely. piper sandler's chief investment strategist joins us now. no upturn. does it stay flat or down turn?

what do you think are some of the key issues at play for earnings? >> yeah. you know, i think there's a lot of debate around are we needing a recession or not, in a recession or not? there's equal reason to look at the other side of the story and say are we in a recovery or not? right now, neither of those situations are quite apparent. and i think that's why we've seen the market really reward the higher quality, larger cat, more visibility, better balance sheet companies this year and why you've seen the bifurcation. i think that will continue in the market until we clearly have a soft landing, which is a broad-based recovery in the economy, or enter into a recession which is usually signaled by rising unemployment. >> you have this call for 2023 and the bifurcation you're referring to has to do with the largest stocks and the smallest stocks. but how are you thinking about things in terms of valuation.

the magnificent seven came down a little bit but a lot are looking at the key driver for this year's broader index performance. are you concerned that maybe it would be the wrong time to be getting into the bigger companies that have been a key driver of market activity this year? >> yeah. i think this year the market is up and the indices are up and those stocks are up for two reasons. the earnings have been pretty good and we've seen a big amount of multiple expansion this year from last year's down turn in equities. the way i look at that, we priced out a lot of risk around inflation, around the fed doing too much, and so we've kind of removed a lot of risks and the companies that maintain earnings momentum are doing well. with regards to valuation, i think that's what that reflects. what i would be concerned about is not necessarily the valuation levels of these stocks or any stock individually, but try to understand what drives these

valuations and where those drivers are going. we've seen the soft landing hope a number of times this year pick up risk assets and when that's played out you see cyclical stocks do well and then the last, for example, six weeks they've given that momentum back. i'm more concerned about the drivers of valuation and investors pricing in and out of risk. we'll continue to see the back and forth. >> how would you characterize the current risk environment right now? i think it was morgan stanley that that characterized it as fragile. and bank of america reporting outflows and on pace for one of the worst weeks we've seen in months this year. how would you characterize just the overall sentiment in the market right now? >> i think it's very uncertain and we're seeing the narratives shift really quickly back and forth which is most evidence in

the most cyclical parts of the market. and, you know, when i look at the -- through our lens, we see a lot of asymmetric downside risks in the economy and that's where our conviction lies. the odds of getting any broad-based recovery, which would provide you that sustained broad-based market, especially led by the more riskier is small cap value parts of the market the odds are extremely low with the tightening cycle, banks tightening lending standards and so, yeah, that's kind of how i see it. >> piper does a lot of good consumer work. tough to get bank ceos to say anything negative about the consumer. more money than precovid, delinquency rates rising, no worst than 19. is there any -- what would be the most aggressively positive argument you could make about the consumer going into year end? >> you know, i think the consumer and the first part of

the year i think what's overlooked in this view that there's been a lot of resilience in the consumer we had ahuge drop in energy prices last year in the back half of the year that has a lagged positive effect on the economy. now that's going the other way. i think when we talk about aggregates whether the stock market, the consumer, or the economy, it's -- there is no aggregate and no single. we're seeing variation underneath the surface. i think some consumers are doing well and some consumers are really struggling and we see that in the confidence data and the stocks. we remain underweight is mort lower quality consumer areas that are going to be impacted most by higher energy prices in the last several months and higher interest rates. we don't see everything go in one direction unless we see a recovery, and then everything broadly improves, or a recession and everything broadly turns down. we're in the backdrop neither

are true and it's mixed. >> looking beyond the aggregate data, lots of bifurcation, the consumer, the market, so forth. thank you. >> thank you. coming up at 11:00, more on the markets with citi's chief economist who says to expect another rate hike still ahead. we'll talk about why in the next hour of "squawk on the street." we're back in a moment. >> to me it's important to celebrate the hispanic heritage month. diversity matters a lot. this cannot be the flavor of the month. it's something that we have to do on a three basis. we as leaders have the responsibility to lead by example. for me, it's not only the right things too, driving diversity and inclusion, it drives the right business outcomes. good night!

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mcdonald's is raising its royalty fee from 4% to 5% for franchisees who open new locations in u.s. and canada. the first raise in nearly 30 years. the higher fee, known as a service charge, will affect new franchisees or buy company locations. it will not impact those with current footprints or those who by a location from another franchisee or restaurants transferred between family members. mcdonald's president saying, we're not changing services, but we are trying to change the mindset by getting people to see the power of what you buy into when you buy the mcdonald's brand, the mcdonald's system. they say it has not kept pace with the brand and mcdonald's are at all-time highs with cash flows up 35% in the past year. the business has remained strong and a top position pick in a potential downturn. same store sales up 10.3% in the most recent quarter.

what comes next is how franchisees react. they run 95% of mcdonald's locations. they have butted heads with corporate. we have been reporting on franchising structure, as far as putting in place a new grading system and changing terms for new lease owners. the stock is just fractionally higher this morning. back over to you. >> kate, i'm curious how these royalty fees compare with other restaurants in the industry. >> yeah, leslie, i talked with btig this morning. we wendy's is around 4%. taco bell, 6%. wingstop at 6%. pizza players, domino's at 5.5%. this rate is competitive. although some numbers we just laid out are global. he also added that for mcdonald's, rent is a high single digit percentage of sell and there are ad fees and technology fees on top of that. he was saying to me he feels the brand is taking market share and they want to participate in the upside, which makes sense here. >> kate, thank you.

>> thank you. >> taking a look at a couple of movers we haven't gotten to yet. microsoft and activision getting much closer to closing that transaction they've been waiting to close for quite some time. the opposition of the uk and trust regulator of the cma is no longer an impediment. october 6th is sort of where some people are working with. could be later. could be another week or so. it's 95 bucks. you can see what's happening with the stock, moving ever so closer to that $95 level. as we pointed out in the last hour of "squawk on the street," amazing what microsoft and activision have been able to do in overcoming what appeared to be an unremovable impediment to that transaction, namely the cma saying no. but they have been able to reverse that decision. obviously, are doing astreaming

games, and it is being looked upon favorably by the cma. >> no last-minute curveballs? >> i don't think so. if you ask bobby codic, he would probably say, i'll see it when i believe it. we start counting down the days. perhaps as soon as october 6th. follow-on from yesterday, tko group, the u.n. member of wwe and the ufc, 51% owned by endeavor. down yesterday sharply. down again today on that new deal in which smackdown is going to nbc and nbc properties, usa network, some specials on nbc, the market and investors simply did not like the increase in terms of where they ended up paying for it. $1.5 billion. they were of the belief it would be higher and perhaps they were led to believe it would be

higher. that's only a drubbing. only a week out from the official listing of it here at the nyse in terms of when it began trading as a combined company. >> but down another 2.4% today. i think you're right, that the valuation i was was a bit of a disappointment. >> that did have pressure yesterday on formula one, which is liberty media. today, though, that stock is rebounding a bit. the concern about sports rights. the leverage was supposed to be coming from the union of wwe and ufc in terms of what they would be able to get from the distributors. a lot more "squa oth re" raight ahead. don't go anywhere.

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good friday morning. i'm carl quintanilla with leslie picker at post 9 of the new york stock exchange. citi says expect maybe another rate hike in november. the chief economist will tell us why in a moment. the uaw's next deadline is one hour away. more walkouts appear to be on the way. we're live in detroit next. big upgrade for energy from jpm this morning. we'll talk about the bull case on oil getting maybe to 150. >> topping the tape for us this morning is the market showing signs of being oversold? that's what cnbc senior marketso