thank you. we'll see you. final check now on the markets. we were triple digits, and then we almost got to a positive in the dow with the other indexes, but now we're back down almost triple digits in the s&p and nasdaq are no longer in the green. they were briefly there earlier. we will -- is it jobs friday? >> it is. >> tomorrow is jobs friday. >> it's going to be a biggie for the markets. >> and more importantly, it's friday. not just jobs friday. make sure you join us. "squawk on the street" is next. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. premarket, mostly red here after the dow did snap a three-day losing streak, got some cross currents at work. oil, lowest since august, but long-term yields are higher after claims come in light. five fed speakers today. our road map begins with the drop in oil, coming off their biggest one-day slide in 2023. plus the ozempic effect,

walmart saying it's seeing a slight pullback for certain food products because of those weight loss drugs. and disney's dismal run. the stock is back below 80 bucks a share, its lowest level since october 2014. let's begin with a drop in oil prices. wti on pace for the worst week since march, jim. we got down to $82.35 this morning. yesterday, biggest drop since may. >> the department of energy numbers were weak. gasoline numbers were weak, the lowest, what, since 1996. when you speak to the chieftains of the oil companies, they just want to stand there and buy the shares because they don't think this is the right market. they think the higher price is the right market. i look at what's happened with oil, and i say, if you have retail weakness, if you have fewer people from student loans, fewer people going places,

obviously, there's going to be a back-up in gasoline, but i think this price is actually real. i understand that the oil companies want to buy back stock, but the oil stocks never went up as much as the oil prices. >> i know, but when you say this price is real, what do you mean? >> i don't think the $94, $95, they ran into resistance and there was a lot of talk that it was a short squeeze. >> gas prices, meantime, lowest since the end of july, and if you look at front month futures of rbob, implies maybe another 12% down. >> i think it's possible. when you got up to $6 in california, that's a really high price. we keep getting this strapped consumer. >> natural gas. >> natural gas is -- >> that's in case you wanted to look at it. >> natural gas broke through $3. i tried to do a piece for the investing club on why you should buy coterra. nobody cares. do you think these -- there's linkage. >> right. >> but that's real numbers.

that gas number is a real number. >> there's gasoline. >> what rbob? what are you trying to say? >> rbob? you calling me rbob? >> i just think it's a very subjective thing. i think the oil companies would stand there and buy stock back because their stocks are not expensive. david, exxon put out some numbers yesterday that were pretty good. nobody cares. >> why don't they? >> well, because this is a very binary market. >> the earnings considerations we got from exxon? >> yeah, but i'm saying it's a binary market. two weeks ago, it had gone through the roof. now, we -- this market has got real problems, obviously. it's got not schizophrenia. it's not that strong. it needs xanax. you know what i mean? >> to your point, the stocks turned around before the underlying commodity, didn't they? >> what, in this last leg? >> yeah, just this last leg. >> yes, they did. they were forward looking. chevron never went back to where

it was supposed to be at $95. $95, chevron kind of languished, but i bet you mike wirth's in there buying stock hand over fist today. >> i bet he is. >> they'd rather do that than put it into new production. >> well, look, they want higher for longer. everybody wants higher for longer except for the people who take ozempic. >> people who want ozempic what lower for longer. >> i just got my no huddle. higher for longer versus lower for longer. >> we will get to that, don't you worry. >> i don't like the way my jacket's flying up. meantime, big part of the discussion this morning on "squawk" was whether opec can stand for this and whether we should expect them to respond to some of these lower prices now. >> they're a fraud. they talked it up, one million, one million, one million. by the way, oil production for us has increased in the last few months, quietly, david. people say we haven't been increasing. we have been increasing.

>> that's all-time highs, right? >> yes, back to all-time highs. >> in terms of daily production. >> so, therefore, we are not holding back, but there's a dispute. when the refiners have this gap where they don't lower the price of gas at the pump as quickly as they buy, they tend to be short-term buys. i like marathon mpc. halliburton, by the way, was $42 a few weeks ago. it's now at $37. signaling what you were saying, which is there's not more drilling. what they're doing is getting more out of each well, and they're drilling deeper. they're drilling -- they're like during -- they're drilling to the center of the earth. >> all right, how about other stuff? anything else? dollars? dollar? treasurys? enough with oil. five minutes on oil is enough. >> what do you mean, other stuff? >> i'm going to start looking at my phone. you guys go ahead. >> what do you want, a comedy routine? >> sure, i always like a comedy

routine. you got one for me? >> no, i have substance. i think it's time to talk about some of the earnings we had, because they were significant. conagra, for instance. i have them on tonight. this is what you're going to see from some of these food companies that have food that's not necessarily good for you. they don't get the topline, that's walmart. they get the bottom line because they know how to cut kpexpenses and make more money, but will the street want top line or bottom line? and i think the street likes top line, which is probably wesson, which is the worst thing for you, french fries. when you talk to walmart, they're saying, listen, it is happening. >> jim's referring to this comment yesterday about the glp 1s where they are seeing slightly smaller baskets, slighter fewer calories sold, fewer units, and this has been a theme you've been working on for i would say a couple months now. >> i think it's interesting. unless you're taking something to lower your blood pressure, or

diabetes, the insurance companies are very loath to pay, so you have a couple people paying a couple gs out of pocket. those are not people who are thinking whether they should have twinkies or not. those are people that want to look better. but people with blood pressure, they got to get that down, because they have heart attacks and they die and that's bad. >> that is bad. we talked about it every day, as we should, and obviously the headline we're keying off today is that, and a strange one, where walmart is saying, we're seeing people buy a bit less. article today in "the journal" as well, questions we have been raising and frankly asks of ceos, including earlier this week with the split. you were raising this many times. we talked about kellogg, the cereal company now, and the snack food company, will consumers, particularly those

who are on these weight-loss drugs, represent a significant part of the population that no longer feels like they have to buy pringles? i think we asked that kind of question. here's what he had to say. >> we don't know the penetration that these drugs will get. we don't node longitudinally what happens with consumer behavior. we know what people are saying they're doing in terms of changing their diets and so forth, but you know, it's just way too early to tell. we'll watch it. we'll understand exactly who's going to be on it, but very importantly, understanding what, if anything, behaviorally changes over a period of time. and it's just -- it's just far too early to forecast this as a headwind in our opinion. >> i disagree with that, and i really like him, i like what he's doing. 50% of the people in the country diet at the beginning of the year. they use diet and exercise. there is no data that indicates that data and exercise works, and that's why these drugs are being prescribed for people who have failed diet and exercising. that is a very serious finding by the doctors.

very serious. what it says is if you can't lose weight through what we thought was the way to lose weight, diet and exercise, we have no choice. anybody who thinks these drugs -- these drugs are very brand-new, and by the way, can i just tell you? there is no -- >> no, but -- >> there's a shortage everywhere for these drugs. >> where are we in terms of health insurers paying and the government being willing to pay? we think long-term there will be a benefit because it will prevent other diseases, which will cost even more to deal with. that said, these things are expensive. >> it's not private pay if you have high blood pressure that can't go down. it's not private pay if you have sleep apnea or drink too much. it's certainly not private pay if you have diabetes. if you take a drug that raises your weight, then it's not private pay. now, that comes to about 40% of america. did the numbers yesterday from mounjaro. by the way, try to find it at

cvs, walgreens, you can't find it. the wegovy truck, it's like tv sets during the '80s. >> the wells fargo wagon? >> you referred to the wegovy truck. there's no wegovy truck. >> there is a wegovy truck. they just are not marked "wegovy" on the side. hey, you know, it fell off. >> we find out where they are? >> it's like the easter bunny just comes and throws it to the crowd. >> is there going to be a jesse james of wegovy trucks? >> it's like mardi gras. here's wegovy, here's wegovy. no, mounjaro is in huge shortage. they've got another plant coming, eli lilly, but it's impossible to find, and wegovy is easier to find. but not -- but wasn't last week. >> if you need some, you let me know. i may have a guy. >> you have a guy? >> i may have a guy. >> your guy's got the expired stuff. >> probably. >> he's got the stuff that was never refrigerated. >> that's possible too. just in case. >> puts weight on.

>> you let me know. >> i'm guessing, jim, you think the impact on -- we talked about hershey, medtronic, strooiker, what's next? planet finance and peloton? >> i think planet fitness is -- >> it's going to get overdone, isn't it? i've been talking about this for a few months. all these hedge fund managers looking to short these names and it's been self-fulfilling. we don't really have the data. >> smucker will tell you that you buy hostess. the people who buy hostess are not spending $2,000 a month getting maunjaro, okay? they're not buying twinkies and saying, you know what? well, there are people who just are -- don't really care about this and they like their cheat day, like their fattening food, and then there are people who are trying to get their blood pressure down and let's say you're 150/90. and you take all the different blood pressure drugs and it's not working. so they give you this.

smuckers reacting, that stock is reacting to not a great quarter. >> they just sold a lot of french fries. >> it's case by case. >> a lot of french fries. you know what's the worst thing you can eat is a french fry. >> spun it off in 2016. >> mcdonald's, we didn't mention the 10% div hike. >> i know. >> 10%. on french fries. >> okay. do you get my point? the people who buy french fries, you know, when they go to the department, they go to the convenience store, when they go to grocery, those are people who are not saying -- there's like two -- i don't want to say there's two classes of people, because david will be acting like he was with the jury duty, but there are people who don't necessarily care about their weight because they want great taste and then there are people who want things that are less filling. >> where's bob uecker? >> speaking of beer, you had molson on last night, right? talking other things. more beer category. >> they had great numbers. now, there, they had good numbers going into the fracas

with bud light. now they have great numbers. incredibly fast growing. by the way, constellation reported this morning, they reported great numbers, but the conference call doesn't start until 10:00, and wine and spirits weren't good. wine and spirits are a problem because they are directly in the crosshairs of mounjaro. >> another there's no -- there's -- >> the stock is always down. they report the quarter, then they have the conference call, then they come on tonight and the stock goes up. take it to $247. >> on this idea that these weight-loss drugs are going to impact people's taste for alcohol, there's no studies yet to support that. >> it's being done right now. two-drink study. people who think two drinks a night are not doing that under the study. so far. they're studying everything. sleep app knnea, blood pressure. they're studying everything. >> as they should be.

>> david is skeptical that everybody can be on these, but the -- and i'm sure there was someone saying that people are ideating. there's always going to be people who ideate when they take drugs but the side effects are minimal so far. >> so far. i'm looking at the things coming in from people out there. >> walmart, when i checked in with walmart yesterday, i thought for sure i would get, are you kidding, these things just came out, or how did you -- we have no read. instead, i got, yes, there's a slight change, but we're watching. i mean, you know, so, you can have kellogg -- and i like kellogg. but you can't argue with walmart. walmart is -- that's gospel. >> is the population on the drug as a percentage of walmart's overall customer base that big? >> that's what's shocking. >> it can't be. >> it's not. it's not. i mean, that's why there's also

a move, younger people don't buy -- younger people, by the way, are not drinking much brown and clear alcohol. the group 21 to 24 has cut back and the 21 to 24 has cut back on bad food. the 45 to 55, no. but 21 to 24 has cut back on impulse bad food and they're not, you know, remember, they're not mounjaro. they're just people who have cut back. >> this is what molson told you about the overall move toward health and wellness. take a listen. >> we're moving beyond beer. we're moving into nonalcohol products, whether they're energy drinks, nonalcoholic beers. one of our biggerinnovations, which i think is going to be a big deal for us, is the launch of blue moon non-alc, which we're bringing in december just in time of dry january, and i think that's going to play right into that space. >> and when i talked to gavin after, the ceo, they're not even clear exactly when non-alcohol beer started tasting as good as

alcohol beer, but they recognize it and they know they have to have it and they think it's going to be the hottest seller. nonalcohol beer. and you get it -- you don't, by the way, you do not ask for it by can or bottle. you ask for it in a glass so no one knows it's na. it's called na. >> non-alc, as he said. >> david, i know that these things have no interest from you whatsoever, but nonalcohol beer is the thing right now at the big liquor stores. >> okay. i didn't know that. i learn something every day here. >> do not patronize me. >> i'm not. i'm being honest with you. i learn every day from you, jim. >> you know what someone said last night, a major ceo? >> what? >> said, does he think you're a legendary wall street funny man? i can't be sure. >> you could be. >> take a look at the premarket here. we'll see if we can open a little bit above the flatline,

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exactly! don't delay the game with verizon or t-mobile 5g home internet. catch it on the xfinity 10g network. take a look at some s&p laggards. we did get some notes earlier in the week, holding out hope that clorox's update on the cyberattack impact would be positive. not the case. q1 organic now looks to be down

26-21. stock's going to open down about 6%. got a downgrade out of ray jay today. we'll talk about that and a lot more when we get the opening bell.

we got a little less than eight minutes before we get to an opening bell on this thursday. man, the week's going by. >> it's amazing. >> every day. >> i want to talk about ford. >> tell me. why? >> there's some movement between ford and the uaw, and ford is trying to prove that they really aren't the same as the others. jim fired a huge number of united auto workers in the last, i don't know, the last decade,

but ford didn't. ford's moved a lot of uaw temporary works to full, which is the only way to get them, within the contract they're operating under, more money. so i know that ford felt that a little upset that biden joined the picket line, but at the same time, ford is seeing some movement by fain. david, i have a feeling that if fain doesn't -- >> fain being the man who runs the uaw, we should point out. >> if they don't come to the table soon, mexico will be. >> how soon? >> couple weeks. >> and you can -- how quickly would they move manufacturing of certain things? >> they already have manufacturing. >> what does that mean when you say mexico is in play? explain what you mean. >> say you have plants in mexico. you can add on to them very easily. you can't do green field. it took mercedes-benz a huge number of years. >> but if you have an existing plant, it's not as difficult to add on. >> that's the way you can do it. by the way, the companies are very worried the -- remember, there's a big -- it's not just the 146,000 uaw workers.

we're seeing some original equipment suppliers get hurt. the layoffs are starting. i find the president -- look, hate him or love him, joining the picket line may have been a very big mistake, because that hardened fain, hardened the uaw, which then hardened the auto companies, and until -- if he hadn't come there, i think there would have been a deal. >> yeah. >> that was not a great move. if you want to -- >> he wants to be identified as the labor president. >> if you favor workers away from uaw, it's not a great move by the president. i would be surprised if he softens a lot. if he has horse sense. i don't know if he has horse sense. >> we'll keep an eye on shares of ford, of course, as we get you ready for an opening bell that's about six minutes from now. you can catch us any time, e qufoow, listen to and ll th"sawk on the street: opening bell" podcast.

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it's possible. with james hardie™. >> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. yields have been criss crossing the flat line this morning, at least relative to the prior day. ten-year back to 4.71%. bunch of people have weighed in this week, jim.

clarida yesterday, bill gross saying, maybe a little oversold here now. >> i heard someone just blast gross this morning, saying he's dead wrong. i come back and say, well, look, the interest rates, you know, rates went up very substantially after we got the jobless numbers and they've come all the way back. i continue to believe that what you have to watch is oil because i said the other day, i mean, come on. if oil let us up, how can we dismiss oil now? there are people out there, and michael has done some fabulous work on this, who are just saying, listen, the deficit has destroyed us. by the way, the deficit, it's not as much the biden plans that drove money to the economy, it's really just the amount of interest that we have. but there's no doubt about it in my mind that oil going down is -- people are just saying it's a measurement of the economy being weaker and the treasurys aren't trading like they used to on the economy.

we have very important job number tomorrow, but the fear that i hear that we are finally in the stages that the government is going to have a hard time financing the deficit, well, look, they can finance it. it has just a matter of whether there are buyers, and david, we have some natural buyers in bonds who actually think that they're -- >> we're going to have to find a lot of them, and most likely within our borders more so than in the past. >> because china's dumping. >> we've learned about term premium or not learned, but we've been hearing a lot about that of late. >> i'm just saying, i don't buy the, we finally got the existential crisis. if moody's downgrades are, yes, the rates -- >> i don't think this is the existential crisis. >> i'm saying these people who come on our air, and you want to hide. it's like the cuban missile crisis with these people. >> well, i agree. there are even some notes out from mike winlson, for example, and people who work with him, saying, yes, equities are in

deep, deep trouble because we've lost control of -- >> yeah. i'm not buying the lost control scenario. i do buy the fact that oil may have gone up too far and then -- and interest rates, therefore, went up too much. it never hurts. >> as liesman said the other day, those who think they can time stocks, we'll see how well you can time bonds. let's get the opening bell here in the cnbc realtime exchange. at the big board, it's pro shares, celebrating the recent listing of three crypto-linked etfs. at the nasdaq, t. i.e. new york. we think think of one scenario where bonds rally materially, and that's if risk assets fall sharply in the coming weeks. >> i know. we need to crash some stocks. the stock market is so small. i thought that piece was intriguing, but the stock market

is teeny tiny versus bonds, so don't give me that. that's -- i mean, come on. look at the size of these markets. what i thought was most interesting, gold's been down, down, down, and yet costco, this gold program, is on fire. >> where they're selling bars, you mean? >> yeah, selling bars, and costco had some good numbers last night. can it go up again on the good numbers? i think costco, david, remains very strong as a place that people want value. there's continual pressure on the target stock, home depot, lowe's, because people say their traffic's not been that good. at a certain point, things should stop going down on the same news over and over. we know traffic's not that good. it's not like they have been hacked, a la clorox. >> right, right. speaking of stocks going down. we just talked about the ten-year >> what is next era? >> i'm going to get there. not just next era or energy, but even the verizons of the world. every portfolio manager, every algorithm out there, i guess,

every -- all the ctas, they have been going through every balance sheet, looking at the average weight of maturities, who has a lot of debt, when do you need to refinance that debt, and if you're going to do so in this higher rate environment, what is it going to mean in terms of interest costs, and therefore, your ability to continue to pay, for example, your dividend? verizon moving up today in part because we have seen yields settle down just a bit, but you can see the damage that's been done, and it's not just verizon's stock, which is down 20% this year. we talked about this. >> what is directv worth if they're selling att? >> directv is not worth a lot. >> no? >> no. >> will you get that stupid dish off my house? >> it's still got directv. but at&t shares have also been down. they've been down 20% this year. again, coming back a bit, but we talked about this earlier in the week, jim. dividends. but then you look at some of the utilities, nep, for example -- >> let me know what's happening, will you? >> what's happening, really, is

that, you know, again, you take a look at -- i mean, look at that thing. i can give you a little specifics on that. they've got -- let me see. talking $5.4 billion of debt, average weighted maturity, 3.6 years and some other structured preferreds as well, and so you've got people targeting some of these names, looking at, okay, what's their ability going to be to continue to refinance at what level, what are interest costs going to be? how's that going to eat into potential dividend? then you got these yields soaring. for n.e.e., it's more of the same story we've seen with many utilities, and you brought this up earlier this week. you're in the market financing, and what are your costs going to be, and how is that going to impact your ability to continue to return capital to shareholders, which obviously is a key consideration for utility

investors. so, there's a look at those names. worth doing. worth taking a look at here, because we have seen continued weakness in many companies that rely on the debt markets in a significant way to finance their businesses and/or have a lot of leverage that is going to need to be refinanced. let's call it the next year, two years, three years. >> who doesn't need to do that? it's a quiz. it's rhetorical. drug companies. and the drug companies -- >> i don't think apple needs to do that. >> no, but do you know what's interesting? >> by the way, they have $130 billion in cash. i think bob was talking about this the other day. they're earning a lot more on that now. >> well, i think that chevron's buying back more stock than apple. very interesting. they're buying back almost two times the rate of apple. chevron. and yet -- >> chevron doesn't need to do it either. >> when i look at these companies like the drug companies, well, they're not hurt by -- they're not hurt by any weight loss drugs. as a matter of fact, lilly, should stocks be up.

j&j, there's a recommendation this morning from j&j, and it's working. this is, again, thinking pedestrian. maybe the economy's weaker so you buy the drug stocks. that's the way it used to be. now, you can't buy the food stocks because we don't know what the -- what wegovy's doing. but you shift the money over to drug stocks, and they're working. that is a sign that, look, the old days are back. oh, okay, the economy's a little weaker, i'll go buy the drug stocks, and i think that we feel like a lot of people feel that the tyranny of the ten-year has made people blind opportunity, and i agree with that. i read the j&j piece today, and i said, that makes so much sense. they've managed to get rid of the kenvue, which is slower. i do care tremendously about what's going to happen with the plaintiff's bar, because i don't like the talc situation, but you know, look at this. >> i see it. >> the recommendation is working. abvy has a very big yield. that's working. i just think that this is like a little bit like the old days,

except for they're not buying the food stocks, except for lam west. >> let me give you a name that's not working today, and it's one that we have talked a bit about lately. in fact, the ceo was on with phil lebeau a couple days ago. take a look at rivian shares. >> they did that stupid bond curve. >> by the way, phil asked the ceo, he asked him about future funding needs, will you be able to get to the r 2 without having to raise more money, conceivably? and the answer, i remember listening, he didn't answer the question. maybe because he knew they were going to be doing a $1.5 billion green convertible senior notes offering. they need to raise as much money as they can. they have a lot. what, $9 billion or something? because when you look at it -- when you lose $30,000 on every automobile, every truck rolling off the assembly plant -- >> you can make it up in volume. >> yes, you can, but you want as

much cash as you possibly can to get you to that point, jim. the consumption of capital, these kind of companies, is enormous, and we know that. we've talked about it. $1.5 billion. these are due -- senior notes due in 2030. they do have the opportunity to be redeemed after october 20, 2027, if, in fact, the last reported sale price per share of rivian's common stock exceeds 130% of the conversion price, but we haven't gotten that yet because they haven't sold this offering yet. >> would this be a musk situation where people say, i'm willing to hold my nose and buy that because he may be the next -- no one's the next elon musk. i don't want to do that. >> nobody is. in reading the isaacson book, you really do get an even better sense of just how focused musk was all along the way on cost, simplifying, doing more with less, pushing constantly to reduce complexity, and just

being unrelenting in -- and mean but getting it to work. and you just wonder, is anybody else really up to that? to the point where they make so many of their own components as well at tesla. so, they have that cost advantage. maybe rivian will be able to replicate it at some point. there was a period during which musk and tesla obviously needed to hit the capital markets constantly, and in part, his ability to do that ensured future success. >> well, look, i think this is one worth watching, because there's definitely a love for their product. >> rivian? >> yeah. but look, if you can't make -- there have been a lot of love for a lot of different car companies that have failed. i happen to think that management here is very good, but i am very worried that when you did a convertible like that and the stock goes down, that means there's less faith than there was in elon musk and tesla, after year two. >> it was down nine premarket, a

little bit worse than that now. vfs, by the way, reaffirmed, for whatever it's worth, their fiscal '23 delivery target. you had gm put a target on the strike cost for q3, and then you had jonas and morgan stanley with this investor survey where he asked, do you expect the d-3 to decrease ev spend post-strike? and 57% said, yes. you know, this has been his -- >> the detroit three. >> this has been his take, that the strike will bring, i think, he said prosperity through austerity. >> well, i do think that you are going to see the hybrids are selling very well. that's really good for ford. i think they'll cut back. if the congress does not finance all this different debt for the batteries, i think they'll make the batteries in mexico. >> okay. you're talking up mexico. >> i'm talking about mexico because mexico is the nuclear option that they've not used with fain. i got to tell you, they've been

playing with kid gloves with fain, and they have not gone directly to the rank and file yet, which would be outrageous to fain, but fain does not have a huge mandate. >> you pointed that out. >> well, you go to the rank and file at ford, i mean, remember, those people, david, are not making that much right now. and they were being paid 100 gs at ford on average, and now they're making, what, $500 a week for the strike fund? there's a disparity there. meanwhile, ford stock, i know, it's been terrible. i'm not going to defend it. >> don't often go over to france, guys, but i'm going to do that. >> france? >> because of alston, which is one of the larger companies. apparently, train manufacturing is having a rough go. this is -- like, this is an important stock over there. i mean, they basically had to suspend trading in the shares on the paris stock exchange. >> you know who liked that business? >> well, they sold the power business to ge, remember? >> that wasn't colt. >> that was not colt. that was ml, i believe.

look at what's going on here, guys. this is a real -- this is not an insignificant company. >> oh my. that's one of the biggest employers in france. >> they had been looking for free cash flow, not to be negative, but 40-odd million euros negative. now, 1.15 billion euro negative is what it came in at. also, free cash flow in the range of 500 to 750 million euros for the full year where they had been saying previously it would be positive. it's not pretty. >> no. >> the call last night, i'm looking at some notes, was uncomfortable, bordering on offensive for some of the analysts who had recently turned buyers on management's reassurances, despite the predominant issue happening throughout the year. some of it may have to do with combining with bombardier or what hasn't gone well there.

they rude out an equity raise and pointed to numerous facilities. no covenants, access to a 2.5 billion euro cp program. but you can see when you get to start talking about things like that, you know things are not great. wanted to point that out. we don't often go there, but this is, as jim just said, an important employer as well. >> oh, wow. that was a big issue when ge bought them, remember? became an issue to the government. >> it sure did. that's right. that's right. exactly. when ge bought the power generation business. >> that's devastating. >> yeah. >> spain's the strongest country in europe right now. >> spain? >> spain. spain's very strong. >> any time you want to go to madrid, i'll be there. >> spain has got tremendous growth. i don't know. i'm just pointing it out. >> i appreciate your doing that. >> no problem. costco spain is very strong. >> interesting. >> yeah. black friday's 50 days away. >> oh, my. >> as of right now. we did get some adobe online holiday forecasts today, jim.

they're looking for growth of 4.8, but a lot of that's going to be on the back of aggressive discounting in adobe's view, and of course they track online pretty well. >> yeah. i mean, look, i think that when you read the ftc suit, and it's heavily redacted, you get the sense that amazon and walmart could be in charge of this one. so powerful. and they're not -- they can be bad for margins. now, i know when i spoke to macy's, jeff, tony think it's going to be a terrific holiday season. >> why do they think that, jim? >> they think that, first of all, they've -- they think they have the right merchandise. but they expect more travel. >> okay. >> and when you have travel, remember, a lot of their -- not a plurality, but a big chunk of their sales are harold square. >> people visiting new york or visiting other places. >> and china, you know, a lot of people just wish that we were a little bit less hard on china, but there's some more travel coming from china. not nearly as much as there was. >> not what there was.

>> you see the discounting going on at disney parks? >> okay, so, let's go there. >> on the wire today. tickets as low as 50 bucks for kids. >> florida is definitely weaker. there's no doubt about it. california's on fire. china is amazingly strong. the cruise ships are operating full, five crews, so you've got one park that definitely has some weakness, but now, this is what's important. it's still better than pre-covid. so, let's not freak out. >> okay, but orlando is weaker. >> right. >> california's -- what? why? any reason why florida would be -- >> ours is not to reason why. ours is just to tell the truth. now, what's interesting is that walt disney was at $110 last time we got these numbers when -- the 2019 numbers, and these are better than 2019, but nobody cares because this is what i call a down stock. >> it is a down stock. >> down stock. >> they had their investor day recently, didn't really tell us too much, other than what

they're going to spend on the parks over the next ten years, which is significantly more than what they spent over the last ten. parks is the key cash flow contributor to this company without a doubt and will continue to be, but i think a lot of that move down is also just because of confusion amongst investors and trying to understand the real story here when it comes to the other parts of the business. >> are you talking about hulu? >> i'm talking about direct to consumer, what the cost of hulu's going to be. they're now negotiating or that period has started with our parent company, comcast, for their 33% stake or roughly. what happens to the future of espn, you're certainly not going to get, from what i hear, any leagues that are going to be your partner, but will, as you pointed out, will there be another partner? is that possible? >> they have the wlbalance shee to do it. i think people misinterpret -- >> here you're talking about disney. >> their balance sheet is much better than i had initially

felt. i did not know how much they had rebuilt their coffers, so i'm not as fearful. and you say, of course, you own the stock for the travel trust, but look, i don't understand the stock. this stock is just as if they are a pitiful, helpless giant and can do nothing right, and yet if you have california, great, beijing, great, you know -- >> shanghai. >> shanghai, great. you have california, great. and you have florida, above 2019, and you have a better balance sheet, i don't understand the panic. >> i mean, i think, to david's point, there's a bottleneck of deal flow that's sort of interrupting the operations narrative. hulu, espn, abc, got charter out of the way at least, but it is the third worst down name over 12 months >> it is incredible. i keep thinking that apple -- remember, he was in the presentation for the vision pro, bob iger. >> he was. >> but why couldn't apple be a good partner? >> they conceivably -- you brought it up a number of times.

they could be for espn. it's unclear. i haven't heard much in terms of updating where they really are. >> we don't know. >> they've got kevin mayer and tom staggs both in there helping to advise on kneesthese kinds o strategic opportunities. they've got day jobs, too, but they are in there as well. >> at least we got another meeting with s.a.g. tomorrow. >> with the actors, yeah. finally, guys, just real quick, i did want to add, horizon-amgen is closing tomorrow. we followed this deal very closely. >> it's a very good deal for amgen. >> it had importance on the antitrust front, unexpectedly fascinatinged opposition from the ftc, they did reach a settlement, which didn't require much of amgen because it wasn't planning on bundling anyway. that's going to close tomorrow. next two to three weeks is what i'm hearing. pfizer, in terms of complying with the second request, and then of course, we're also probably days if not more than a couple of weeks away from microsoft-activision closing, so three of the biggest deals, one

will close tomorrow. two more headed towards close very soon. >> you can raise numbers on amgen when that deal closes. i think that's important. this is a very good franchise for them. >> yeah. >> they were surprised that it was opposed, given the fact that what happened is they offered a solution, and it was rejected, and then it was accepted. because they were not doing -- >> they weren't doing what they were accused of. >> he was accused of being a liar. that was one of the reasons why i said the ftc has overstepped. it's overstepped. as we go to break, let's watch bonds again. five fed speakers today. mester, kashkari, bostic, daley, barkin and barr. you can see the ten-year holding. not a great open, equity-wise. all sectors are red with the exception of health care barely positive. we'll be right back.

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not too many under performs on carrier. but bofa does cut to under perform. they were at 62, go to 55, nervous about specific markets. the heat pump market in the eu, the commercial hvac business in the united states. shares down about 2.5%. we'll get stop trading with jim after a short break.

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it's time for jim and stop trading. >> one of the tougher stocks out there is clox. they did have the hack. what's difficult here, first of all, people, analysts did think they would turn positive numbers, maybe mid-single digit it organic is going to be down badly. second, the lingo of the actual release makes it sound like they haven't gotten to the bottom of it yet, which is one of the reasons it's down more than initially. they haven't gotten to the bottom of it, then you're not going to get the snapback that people thought would happen. i thought she's a good ceo and it's a terrific brand, but, obviously, people have said they can't get a handle on this thing. if they can't get a handle on it

it's hard to say it will be a snapback. >> most impactful cyber hack you've seen. >> this is one where okta would tell you that that's a self- -- identification company, that you have an okta something that todd mckinnon came on and said when you have employees that are trusting and help other employees and you're imitating an employee, when an imposter, you'll give up the keys to the kingdom. so it really doesn't matter whether you have an okta in there or whatever, but the idea is that maybe they'll go after someone else if you have the full suite because it's just like that's the locked car versus the unlocked car in the parking lot. >> all that employee cyber training is for something. >> don't give up the information and just presume that other person is not being honest. >> tonight? >> i have the ridiculous constellation. the stock is down. give me a break.

wine and spirits. if they get rid of wine and spirits at their november 2nd meeting you will feel like a dope if you sell the stock here. sean conley, the estimates were beaten when it comes to the bottom line but not the top line in terms of sales. levie, always controversial because are people buying apparel? it's not clear. you mentioned macy's, they need apparel sales to go up. >> a good show. we'll see you tonight at 6:00 p.m. eastern. "mad money." we'll take a break here. markets down a little bit yitrng to hold 2450. don't go anywhere. bf - ♪ unnecessary action hero! unnecessary. ♪ - was that necessary? - no. neither is a blown weekend. with paycom, employees do their own payroll so you can fix problems before they become problems. - hmm! get paycom and make the unnecessary, unnecessary.

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. good thursday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with david faber live at post nine of the new york stock exchange. sara eisen is live at 30 rock this hour. we'll check in with her. a muted open. dow down about 30. s&p down 12. decent mix of data between challenger and claims and fed speak, five fed speakers as all attention is still on yields. >> the trading session, carl,

here are three movers we're watching starting with rivian. shares getting slammed on news that it plans to offer $1.5 billion of convertible debl. he they issued sales estimates in line with expectations. clorox warning quarterly sales and profit took a hit tied to the august cyberattack that significantly affected its operations and led to product shortages. stock down 7.25%. constellation after results showed weak wine and spirit sales were a factor, but it was a positive quarter. constellation's conference call kicks off this hour and we're monitoring it. we have to talk about the big news of the day, and it it's not positive if you are looking to buy bonds and looking for some relief and that is jobless claims. we're not in recession. jobless claims are the best indication for how companies are operating and whether they're

seeing stress because it reflects whether they're laying off workers and we continue to be at these very low levels. they only increased 2,000 last week and up to 207, 208. there's the four-week moving average. it shows this step down. there is a historically low amount of americans filing for unemployment claims. the continuing claims number, which is a good snapshot, carl, is showing those that are still on jobless benefits, it continues to remain low. 164, 600 versus the week before. if you're looking for a recession or investors need to see that to see relief in bonds, we're not seeing it. >> went from 202, 205, 207. it's hard to imagine anyone it looking at that chart and saying we put in a definitive bottom, even after adp, for example,

yesterday and depending on what jobs number says tomorrow -- >> market liked the adp number because it was weak. there's not that much of a correlation with jobs. a lot resting on tomorrow's jobs report, 170,000 or slightly less, that would show there's less hiring but there still is hiring and things are on track. here's the setup. if you add the strong jobless claim numbers, overall strong labor market numbers, to some of the other factors at work right now, the federal reserve making it clear it's in no rush to cut rates and it's going to remain high for a long time and higher than europe and china and japan because our economy is in better shape. the fact that inflation is still persistently above the fed's target. it's coming down, but it's still higher than that. the fact that fed is tightening in the form of reducing its balance sheet. all the reasons for why we have

seen this sharp and somewhat sudden bond sell-off, which has pushed yields to the high levels. you add that to know the concerns about the supply and demand mismatch on treasuries and you've got this recipe for what has been a violent bond sell-off. we're seeing a little bit of relief today. equities can rally off of that. that's been the theme. until something stands in the way like xdata, it's hard to se. >> you were talking about supply and demand imbalance. we've been talking day after day, for weeks, seems to have come to the floor in the notes and analysis and the coverage in general of the bond market. do we have anything definitive? because if we pointed out so many times and you have, if this is sort of what we're dealing with it's not going to go away given the deficits we're generating this year and next year and in years to come.

>> we try to get ahead of the research notes. there is a good one today that apollo put out on how much more treasury issuance has to happen in the coming year. he looked at all the -- all across the maturities, bonds that need to be issued th is year in yellow, 2024 in blue. the percentage above yellow is the percent there. so on average about -- it's more than -- it's 23, 24% more than last year in terms of how much treasury has to issue to fund the deficit. that's something that market has been paying increasing attention to. now i don't want to overhype it because it's not like we hear bond vigilantes and worry about default and austerity, that sort of thing. it's not a full-on fiscal panic. if it was you wouldn't see the dollar strengthening. you would be dumping the dollar if there was question about the u.s.'s ability and credibility here. it's clearly a factor out there.

and so it's adding to the mix. the pervasive theme is the higher for longer, no question about it, but i think the investors are eyeing that issuance calendar and deficits and another looming shutdown, you know, all the research notes said yesterday including goldman sachs that kevin mccarthy's ouster increases the odds of a government shutdown november 17th their next deadline because they can't fund the government. it's all playing into it. it's certainly part of the story. >> lucky for us, fitch said that a shutdown probably wouldn't affect their ratings since they figured that in. as for the consumer, guys, pretty interesting comments we're going to talk about oil in a moment and what that might mean for the consumer given the demand data. worse for this time of year in 23 years, but these headlines out of conagra, consumers moving away from convenience into more staples like canned tomatoes and

chili, trying to make meals stretch a little bit longer. >> i saw that, yeah. they've been actively reducing their remnant household inventory for the pandemic as well. they typically, they say that convenience oriented items typically top consumer priorities have lagged as shoppers have turned to hands on food prep to get bang for their buck. it kind of jives with what we're hearing which is the pressure is on for especially the low income consumer and habits are changing right now. reprioritization is a word i'm hearing across the conference calls among typical consumer behavior. conagra had a sales miss and conagra is concentrated in frozen foods. we're monitoring the slowdown, but nobody is talking about recession. we're monitoring things, david, like disney, reducing its prices for children's tickets at disney world on signs that all that pent up travel demand may be

cooling off. signs everywhere, but overall it's nothing that would cause the fed to rethink, for instance, its higher for longer policies. we have to watch the stuff. >> finally, just, sara, you mentioned the dollar. we saw it. to your point it's not an environment given everything else you've described that would mean a dollar should be as strong as it is. what explains -- obviously, higher rates is helping but give us a sense as to what has been that turn? >> the major pull on the dollar is the yields. currency chase yields. you chase the higher returns. when u.s. treasury yields go up the dollar tracks it higher. that's the simple explanation. what's underlying there is that it's all relative when it comes to currency. our economy is in better shape. our fed is singing the higher for longer tune. more so than europe. have you seen the european data? it shows they are closer to recession if not in one especially for their largest economy germany than we are.

japan is going the other way and buying bonds to try to maintain its yield curve control. for the dollar as a relative strength and high yield play in this type of economic environment. >> meantime then you have oil. we'll see if that is a tell as well, down after sinking more than 5% on wednesday. that is the biggest one day drop in over a year. wti crude trading at the lowest level since the end of august. let's bring in paul sankey to get his thought on oil move. >> yeah. i mean, you have several major points, which is the consumer weakening, the major issue is gasoline demand. the gasoline crack has cratered. remarkably. that's telling you that the saudi pushed the oil price too high. essentially that's what's caused gasoline cracks to collapse. additionally as you mentioned, you've had weak demand. we're coming in weak. we called for the peak in u.s. gasoline demand in 2019. what we're looking at is weak

demand. weaker consumer, strong dollar. a lot of things working hard against oil here and that's, you know, why we're selling off so aggressively. >> does opec respond again? >> that's a major problem for opec because saudi at 9 million a dollar. does saudi go -- will force the market to stay higher going down to 8 million? they've done that in the past, but the problem for them is they're losing a tremendous amount of market share. what the administration has done here is shifted from using the spr to pressure prices to using geopolitics to allowing venezuelan exports, allowing our rain yan smuggling, blind eye to russia. all those things haven't been appreciated by the market. allow for much more oil supply from sanctioned nations. >> where are we in the u.s.? expected to go higher? >> we're at record highs. the rig count is coming down, so that's unlikely to go higher. i would say that u.s. production

has been very resilient given the oil rig count has been down quite a bit. >> paul it's sara -- >> the other thing you talked about is the dollar and with us being huge oil exporters and gas exporters, you've broken the relationship to the that are, but we say that really nervously because, of course, now we see a strong dollar and suddenly oil is collapsing and maybe this is a major issue because, of course, in india and brazil, in china, dollar prices for oil are high, turkey. >> sara has a question. >> no, my question is on the price action. you're talking about it like it's normal supply and demand type movers. brent crude oil is above 97 last week. we were talking about $100 a barrel and now down to 95. these are abnormally large and volatile moves, aren't they? what accounts for that? >> it's, obviously, a massive move. after 30 years covering oil, you know, i was around last time we had a drop that big but as you said it's a good long while since we had that.

you know, at this level as you know, machines trade the market. i think it's very much a risk off move. the market just decides to dump. we thought we could go higher on speculative interest. the run before this was low. we got up to neutral level of speculative interest and shots at 100 was that speculators would pile in. the problem as you know, risk off turned into risk off and that became, you know, the speculators running for the exits again. still a lot of things that can happen with oil. we don't know which way putin is going to go. this week we had an outage on a canadian pipeline that would have been significant. you never know especially not heading into winter. but the reality is that this -- the single biggest element of the global oil market is u.s. gasoline. we consume not far off 1 in 10 barrels just in u.s. cars. when it's as weak as it came in yesterday and had been weak the week before, it becomes a problem for the global oil

market. >> implications for retail gas prices down. >> 3.30. >> the wholesale gasoline price is a big part of the margin falling. the wholesale price is not off as much as the margins because the crude price forced up by saudi. you can see the refiners are going into turnaround season inning by a way. crude demand is down a million barrels a day. and that's where saudi has the problem. if we look through wholesale gasoline prices you will see lower prices at the pump, quite a lot lower. >> it's such a small percentage overall but tesla is selling 2 million vehicles a year in the united states now. >> yeah. >> is there going to be an impact on overall demand for gasoline as you say if we consume one of every ten barrels in the world? >> yeah. we called peak, u.s. gasoline demand in 2019, and tesla is part of that. the other thing people miss is the conventional cars. the average conventional car is more efficient than the one it scraps from 15 years ago. it's not the penetration of ev

which has been disappointing apart from tesla, it's the hybrids that the engines all shut off as you know in traffic, et cetera, and then high gasoline prices at a time the consumer is weakening. with conagra as low-income people get affected by high gasoline prices they drive less. they have a fixed budget for gasoline and drive less miles. i think that's what's coming through strongly here. >> paul, it's a great look at the market overall. there's a lot to devour. thanks for coming in. >> it's a pleasure. >> sara? >> as we head to break, here's our road map for the hour. a crisis of confidence for utilities. what investors need to know about the s&p's worst performing sector of the year. >> plus, what constellation results are saying about the consumer and key headlines from their conference call which gets under way. >> bofa and citi trading close to 20 year lows. a couple wksee ahead of earnings

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welcome back. stocks lower trying to hold steady. joining us at post nine capital markets head of equity strategy laurie with her target of 4250 a few days ago we talked about the target. has the yield picture since then changed anything in the playbook? >> not really. it's funny a couple weeks ago i put stress tests and actually i thought i was going to get

questions, if yields are at x, what should the p/e multiple be? if you took a 6% 10-year deal and ran it against our data that goes back to 1962 and says if the yield is x what should the trailing p/e be? it spit out 19.4. if you multiply that against our earnings number it gets you above 4200 on the s&p. it explains to me why we're sort of meandering around this level right now. >> you have a lot of -- individual stocks and/or sectors that are getting hit as a result of indebtedness. refinancing needs, sensitivity to interest rates. that starts to add up. >> it does. it's been a big concern on the small cap space right now. it's interesting because the data you can pull in the small cap space, whether you're looking at the effective interest rate, the amount of variable rate debt, it's not as bad as people have in mind but there is capacity around that data. i think you're just seeing the

market say we're going to shoot first and think later and that's what i think happens when you have a very fierce, quick move up in yields is you shoot first and think later. >> is there a play book anything history can tell us in terms of what the right thing to do is? >> the thing you want to do when bond yields are surging is buy energy and financials and those were working or energy was working until recently and now as helen was saying earlier, the storm overwhelming the fundamentals, but i think that's what's interesting because this bond yield move tells you to beat up on the growth sectors and we were doing that, but 20 minutes ago, we looked like we were getting a little bit of stabilization there. i think the market is just fighting a lot of very complex cross-currents. it can focus on one thing and then shifts to something else. >> isn't the problem with the higher yields it increases the odds of a hard landing or a recession, the consumer shock, which if you say that market's resilience is built on the soft landing narrative, doesn't this

throw that out the window no matter what level of yield is. the speed of the move we're seeing so far might be too much at a time where student loan payment resumption, we're seeing these strikes, the job market is starting to weaken a little bit. i don't have to tell you the headwinds. >> that's a good point. a couple weeks ago i was talking to someone and we side it felt like the soft landing pendulum had swung too far back in the complacency. we're having a recession, we're definitely not having a recession, so maybe it was time for the pendulum to switch back. you're right, when we tested sector performance against moves in bond yields one of the most consistent relationships you see over time the consumer sector at least, the discretionary sector under pe underperforms badly. you're saying we're going to have a soft landing or a mild recession, we know growth will stink for a while and i think maybe that's one of the reasons why things like tech are getting a little bit of stability today,

even though they should get beaten up by the bond yield is if the negative effects to the economy, you want to be in secular growth stocks in the environment. it feels like it's complex right now. >> it's a really interesting point. i was going to ask if you're worried about the economic environment and shift to the hard landing you would go to staples or utilities but those are praering worse than the cyclicals right now because of the yield moves and then technology during a low growth environment, but that's risky too when it comes to the multiple and which sector tends to get hurt. it's a tough call. >> it's a really complex call. utilities is really funny. i was telling carl and david over the break someone was making an argument to me before utilities cracked is value it on a peg ratio and didn't look that expensive. i was pushing back saying it's too expensive, i don't care if the market takes a breather. i would rather play defense in health care which doesn't have fundamental problems to the same extent and has better valuations and i thought it was funny we saw the sector people trying to

stretch to make arguments we saw the bottom fall out from it. there aren't good choices in defenses. staples has a pricing problem and you're starting to hear companies across sectors and industries say look, inflation is moderating, we don't have as much pricing power as we used to and staples is caught in the cross hairs of that. hard to play defense there too. >> finally, a couple notes arguing that the only thing that brings bond stability is a hard sell-off in risk assets and analogs to 87 in the way yields crept up into october. do those interest you. >> we had a lousy september. didn't great august. look at history when you have rocky times in the fall it's a couple months, not like a three month stretch. i've been hoping we would get stability in here. i do think that things have been pretty orderly so far. it feels like there's a little bit of a sniper out there kind of creeping around. tech was working okay, shoot that. utilities were working okay.

shoot that. so far it seems kind of quiet, stealth and not disruptive to me. >> look forward to having you back soon. >> thanks for having me. >> we're talking about utilities, the worst performing sector right now for the year by far. one firm on the street says, quote, close your eyes and buy. find out why and what's driving the downturn straight ahead. "squawk on the street" will be right back. some things are good to know. like...where to find the cheapest gas in town. and which supermarket gives you the most bang for your buck. something else that's good to know? if you have medicare and medicaid, you may be able to get more healthcare benefits - through a humana medicare advantage dual-eligible special needs plan. call now to see if there's a plan in

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welcome back to "squawk on the street." let's get a check on crypto. bitcoin up more than 3% on the week despite a volatile time for stocks and bonds with the crypto currency up 70% on the year and the world's second largest ether headed in the opposite direction, down on the week, despite some institutional interest rates. vaneck pro shares launching this week tied to ether futures in a total of six funds. the six funds saw trading volumes total $1.92 million in the first day of trade. >> it's amazing to see crypto's resilience during this period. utilities, on the other hand, biggest loser on the year

as higher rates and costs hit the sector and some are warning there could be more pain ahead for this group. pippa stevens has been digging into this with particular names in the cross hairs. >> we are seeing selling in what has become a crisis of confidence for utilities. the sector had been under pressure all year thanks to rising rates which increases their costs and makes their dividends less competitive. this latest leg lower comes after nexera no longer planned to drop down an asset. its yield because it got too expensive and that spooked the market. in the last three weeks it has shed nearly $40 billion in market cap. even so it's still by far the largest weighting in the sector and the move will have an outsized impact. the year to date spread between the sector and s&p 500 is now the second largest on record, going back to 1941. that's according to bespoke.

key bank this morning said the sector overall finally appears inexpensive and that the sell-off has created sufficient valuation dislocations. the firm upgraded cms and center point to over weight and reiterated buy ratings on duke energy finishes energy, excel. on the flip sided, key bank downgrades nextera. >> thanks. pretty amazing story. still to come, ubs's chief economist joins us with more on where he sees rates and yield ahead. tight range at the open circulating around 4250. south of that with the dow off of the opening lows. stay with us. >> both of my parents were born in cuba and migrated to the u.s. for political reasons. growing up in miami the cultural

melting pot that it is, was always a comforting feeling because i always felt like i was surrounded by folks that understood my heritage and understood the dynamics of my culture. and now that i'm able to raise my own kids here in miami, it's really nice because we're able to really keep a lot of our own cultural heritage alive.

. welcome back. i'm silvana henao and here's your cnbc news update at this hour. the biden administration is

clearing the way to build more walls along the southern border with mexico. the white house announced today it waived 26 federals through permit the construction in a reversal from the president's promise not to build another foot of wall under his administration. japan's fukushima nuclear power plant began releasing a second batch of treated radioactive water in the sea. the releases are expected to continue for decades have raged strong opposition especially from china which banned all japanese seafood imports. the nearly 1.4 million tons of radioactive waste water has been aclatsing since the plant suffered meltdown after the 2011 earthquake and tsunami. the covid vaccine cards once a ticket to concerts or restaurants are a thing of the past. the cdc announced it had stopped printing the cards now that vaccines are not being distributed by the federal government.

back to you. >> thank you. i'll frame mine then. we're over an hour into the trading day. the s&p down again. bob pisani what's going on? >> the entire stock market is oversold. the entire stock market and yet there's no buying interest no real attempts to enthusiastically go after stocks. what you want to see is volume up on stocks beaten down, and those stocks moving up. it's binary. it's what would it take to get 10-year yields down. that's the story. we need better economic data. look at the sectors moving. you heard pippa stevens talking about utilities. nothing, no bounce. you think this is dramatically oversold. nothing. reits, three-year low yesterday. three-year low in reits. no buying interest. consumer staples terrible. you heard about conagra, confirmed their numbers but talked about the weaker consumer at the lower end.

tech is doing okay. look under the surface, nvidia, and and, down 8, 9% in the last month. still a lot of damage underneath that. take a look at other things the downside leaders here and this is what i was talking about here, no bounce in utilities, energy has gone from leadership group to under performing group in a head-spinning last couple weeks. pepsico. pepsi the first company reporting a september ending quarter. that's going to be next tuesday. you want to hear from them. they have all these other companies reporting ending in august. pepsi will be important. it's doing nothing. coke doing nothing. consumer staples. a little bit of weakness in the semis today. heard paul stankey talk, great on energy and oil, head-spinning move in oil and gasoline. we went from a month ago talking about oh, my heavens, oil is contributing to inflation, to now, weak demand for gasoline collapsing, disinflation in it. this is in less than a month.

they're head spinning. you can see the effect on the whole energy complex. these were market leaders two weeks ago. this week, what's been going on with the energy names, valero and the refiners are down 7, 8%. exxon, production companies like conoco down. halliburton. the entire energy complex doesn't matter what you're looking at went from the market leader two weeks ago, the bright spot on the stock market, to lagging on the stock market. these changes are head spinning and happen quickly and hard to get your head about them. the question is whether or not we can get data supporting a treasury rally. that's all that matters at this point. the joltings report was negative, the adp positive for stocks. tomorrow 170,000 non-farm payrolls we want below 170,000.

we're thinking -- i think we're looking for 4.1% ex-food and energy for that. we had 4.3 in august. obviously, we want 4. it's just all about treasury yields right now. >> thank you very much. let's talk about what to expect from the data. 10-year yield is falling from session highs. investors tuning in to plenty of fed speak ahead of tomorrow's job report. let's bring in jonathan pingle. you never want to root for a weak jobs report. we want americans to have jobs and higher wages. it does feel like that's what the market needs to see to calm down over the bond yields. >> unfortunately, i think you're probably going to get an upside surprise. we're forecasting 200,000 gained, solid back to school, private sector looking okay, and probably an upside surprise on average hourly earnings as well. i mean, you know, the market

this is going to reinforce the resilience theme that market is having a hard time digesting at the moment. >> so what's that going to do? you think it's going to spark another sell-off? bonds? >> yeah. if you continue to get the strong data we're going to look ahead to the cpi which matters more than payrolls, but, you know, you get a slew of strong taut here. you can easily put a november rate hike back on the table for the fomc. i mean, you know, we're expecting a 23 basis points increase in core cpi next week. if it comes in at 0.30 which is normal or higher, that will look like you had an acceleration and cpi from july, august, to september. if that's coming along on the back of, you know, a really solid employment report, i mean, data dependent fomc is going to end up having to have that discussion about, you know, hiking again, which was their

base case in the september summary of economic projections, and potentially as early as november. i mean that's not our forecast, but, you know, you get strong enough data and they're a data dependent committee. >> so i mean, i guess we should talk about why this is happening. i know there are lags on fed rate hikes. i know we had a lot of excess savings from covid. we had a lot of behavioral changes. people went out and traveled and saw taylor swift and all that helped the economy remain resilient. what is it? why is it hanging in so much to the point where many on the street are still not expecting a recession, which is presenting a big problem ffor the bond marke? >> we would chalk it up to really first of all, the consumer has been super resilient. when we look at the labor market, the labor market is basically just moved in line with output growth. it's really the sort of strong spending and output growth that

allowed the labor market to chug along, too, here. so when you decompose what's really supported consumer spending, you just got a lot of support from the wealth savings and credit. household balance sheets were in tremendous shape, a ton of excess savings. we would estimate there's, you know, still excess savings sloshing around. and you certainly, you know, house prices have hung in there until really the last few weeks since the september fomc meeting. equity valuations have held in there. so you've had a consumer that has had, you know, a lot of support here and has really powered the expansion along. >> we're showing the two-year, 10-year spread. this is the yield curve and what everybody is glued to. something interesting is happening which is that it is uninverting from its deep negative levels. it's still negative. but typically, traditionally that's a sign that recession is more imminent,correct? is that something you see

happening as a result of the action the last few days and weeks? >> so, you know, we still have a recession in our baseline projection, but i will say, market sentiment has swung substantially the other direction towards really ongoing, solid growth over the next few years, and you can see that in the fomc's economic projections as well, where they basically got, you know, really fine gdp growth for basically four straight years in their projections. now i think what's happening on a long end of the curve is more than what's happening at the front end where you've got the fed rate hikes being priced in. further out the curve, you know, our treasury strategists have done nice decompositions where you're a seeing a slump in demand, at the same time we have a deficit problem and a certain amount of ongoing supply concerns. but, you know, certainly the combination of this slump in demand for treasuries along with the signals out of the fed two

weeks ago for, you know, higher real rates, you know, certainly pushed up the long end of the curve and added a certain amount of term premium further out that's undoing some of the inversion. >> yeah. i mean if it's about the deficit and supply concerns, it's not exactly getting fixed. we could be looking at real higher rates for a while, right? >> i mean the deficit has been a little bit worrisome to watch because net interest payments are headed towards 3% of nominal gdp and, you know, you used to think that might be some sort of cap on a sustainable level of deficits and, you know, we're looking at, you know, beyond that, you know, 6, 7, 8% deficits for the foreseeable future. so the first fiscal outlook doesn't look great. the higher net interest payments by the federal government has not helped. and, you know, how that gets resolved is very unclear. >> all right. jonathan, well, thanks for talking through some of these top issues that investors have on their minds right now. jonathan, ubs.

>> thank you very much. as we head to a break check out the top laggards led by clorox. the cyberattack crushed the company. it was out of whack for six weeks in terms of getting things and operations and systems off-line and back online. net sales expected to decrease 28% to 23% from a year ago quarter. organic sales down by 26%. stock is getting hammered. we're back after this.

we lost again. the number 52-week lows today. some of them with dom chu. >> there are roughly 20 of them so far. 52-week lows or worse at this point in the morning. we'll see what happens in the market if it does decelerate a

bit. there are certain ones getting attention on the consumer staples side of things, check outs names like clorox, we talked about that, david mentioned that with regard to their earnings report and some of the issues they had with cyber security and hacks. coca-cola hitting a 52-week low, down 2.5%. conagra, cisco, target among consumer staple names hitting 52 week lows. also, some of the industrial names, consumer discretionary ones making 52 week lows as well. 3m down 1.25%. general motors off nearly 1.5%. ch robinson worldwide transportation side of things down 1.5%. new 52 week lows. two names on the money center bank side of things, citigroup and then today bank of america hitting a fresh 52-week low over the course of the year we've lost about 21% of its value. at the highs of the year we were

roughly $294 billion in market value and lost $90 billion to this point here. bofa certainly one of the financials to watch. citigroup made a 52 week low yesterday, happened made one in today's session. we'll keep an eye on bank of america. >> we've been talking about of bank of america in particular, its portfolio in terms of assets and where they are. rising yields, of course, are concerning and when it comes to profits for the banks or, in fact, their assets, by the way, we're about to kicks off earnings season next week. chuck joins us now, owns wells fargo, fifth third in his portfolio. the banks safe here? you have to be selective. why those two? >> i regard both as very attractive, very cheap. wells fargo has some issues in the past with creating false accounts. they have been punished by the federal reserve. the stock got crushed.

very cheap. slowly but surely fixing the business. very attractive on that basis. citi is another one that's changing its structure, selling off a lot of foreign businesses. they'll do very well. fifth third is our regional play. they took out all the banks and shot them back in march when silicon valley fell and this is an attractive company. we're very well positioned. more capital than they need. they're a survivor. we want to play that theme. >> any concern about the embedded losses and bond portfolios at the banks and whether that will become a concern again? those losses don't need to be realized or often don't, but nonetheless it doesid rise up te a significant concern in the spring. >> that's right. investors are well aware of what those losses are and they get reported. they don't show up in the income

statement, they do -- the balance sheet can be adjusted to reflect them. there's enough capital at the bank that it shouldn't impair them. and every day that goes by, those bonds come closer to maturity. so they'll recapture those losses. >> rising yields overall, you know, you've seen this before. where do you want to be in an environment like this? obviously, beyond a couple of those banks that you mentioned. >> you really want to be in parts of the economy that are going to grow. every one is hit by higher interest rates. the hurdle gets higher, discount rate gets larger. all stocks get hurt. some get hurt more than others. it depends on their business. companies that have a high level of debt like utilities, those are more at risk. fixed income. that's at risk. so you have to keep your duration short which what is we've been doing. in terms of sectors of the

market, consumer staples tend to trade at high p/e multiples, and yet, their growth rates lower. that's a bad combination in a rising rate environment. i would rather keep my consumer staples allocation on the low side and certainly utilities. for portfolios that need income, i like business development companies, bdcs, they're very attractive, high yield. i also like pipelines, oil and gas pipelines, demand for energy continues to rise. and those companies are doing very well and paying out large distributions. >> chuck, we're going to leave it there today. appreciate you taking time. thank you. >> thank you. >> meantime, some fresh results out of constellation. we'll break down those numbers in a moment when we come back after a short break.

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constellation brands reporting an earnings beat.

the company's conference call under way this hour. the stock is selling off. our brandon gomez has been listening in. what are you hearing? i thought the beer guidance in particular was strong. >> good morning, sara. it is a strong beat for constellation this quarters. shares are down about 2.5% there. still, though, up year to date. earnings and revenue both a beat, strong beer sales but the focus was on the guidance for the fiscal year, raising guidance. why are shares lower? part of the reason is wine and spirit sales came in weak. a bright spot were beer sales. seeing double digit growth year over year. the question is will that momentum continues as the marketplace is factoring in a more cost-conscious consumer? take a listen to what ceo bill newlands just said on the call. >> we continue to see significant opportunities to maintain the growth momentum of our beer business, particularly due to the resilience of key secular trends in the consumer

landscape. like ongoing consumer-led premiumization across beverage/alcohol and continued outsized growth of the hispanic population in the u.s. >> you'll remember, sara, from our reporting in april, shares have climbed about 9% since then. when constellation brands modelo brand became the topselling beer in the u.s. after controversy over bud light boycott. q4 is traditional a strong quarter for alcohol and beer sales. a lot to follow for the year ahead as well as the quarter. >> i think that bar was high for investors on this one because of the share gains. i was going to ask you about that, brandon, you've been tracking the fallout from bud light in particular. has the bleeding stopped or is it continuing to lose share and shelf space? >> if you talk to analysts who cover anheuser-busch, we've

reached a peak point for the impact of that. bud light gaining back some share since the controversy, but really you're seeing brands within the constellation brands portfolio seeing the benefit. you have modelo, pacifico, corona benefiting from that fallout. as we continue to follow it, we're seeing it, but it was an industry wide game-changer. >> thank you, brandon. >> thanks, sara. >> thank you as well, sara. in the last minute we have here, the s&p has hit the lows of the session, down over two-thirds of 1%. you can see it with the nasdaq down 1%. we've talked a bit about some of the standouts, whether they be higher or lower. rivian chief amongst them. 18% on this $1.5 billion offering it's proposing, green convertible debt.

obviously, it would be have a dilutive impact -- there's a look at anheuser-busch as well, which is actually up. you just heard brandon talking about constellation and the loss of share there from bud light. that does it for -- yeah, there's rivian. thank you, guys. just getting crushed. again, you've got to raise a lot of money when you're losing 30,000 or so with each vehicle that rolls off the line. at least as of now. "squawk on the street" comes back right after this.

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good thursday morning. i'm carl quintanilla live from the new york stock exchange. is the boom or bust cycle for stocks here to stay? fidelity's head of macro is with us this morning. a warning on the three bears that could break the market. sa satori funds dan niles is with us. wells fargo's head of fixed income weighs in on higher rates and why a harder landing may be inevitable. we start the hour with the activity in the bond market, which continues to dominate sentiment for stocks, which are selling off and the momentum is fading fast here. s&p down