336,000, double, effectively, what folks were anticipating. and now some fears, at least, about what the fed may or may not do as a result of it all. dow off about 225 points, nasdaq off about 176 points on this friday morning. the ten-year note at 4.858% right now and the two-year sitting at 4.119%. let's see where the day ends, and we'll see you on monday. make sure to join us. enjoy the weekend. "squawk on the street" begins right now. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. september payrolls, a blistering 336,000, more than double the estimates, but wage growth up only 0.2 is the smallest gaining in more than a year. that's keeping the ten-year yield from taking out the highs earlier in the week. right now, 4.78%. our road map is going to begin with the jobs blowout number, sending yields sinking.

we have a mega deal in the oil patch. and is it the time to buy tech? citi's upgrading the global tech sector, suggesting a recent pullback might be a good opportunity. we'll talk through that as well. let's dive into the jobs number. as we said, 336,000. we were looking for somewhere in the 150,000 range, jim. hospitality, up 96. government, up 73. >> you can't stop this thing. hospitality is very interesting because a lot of the people feel the travel and leisure bull market ended two months ago, and yet it's just the analysts. because whether it be cruise, hotel, restaurant, the numbers are great. and everyone's just predicting, well, that can't last, can't stay this way, and it's always the same litany. it's student loan, consumer strap. it hasn't happened yet. what you're seeing are numbers which are still indicative of what the companies are saying, not what the analysts said the companies are going to say. no gibberish here. this is -- this economy is so hard to kill.

>> it really is. you know, do you sell a strong economy? that's kind of the question. >> not if there's no wage growth. >> we see what the impact obviously is, and we've got to keep a close eye as we have for now weeks on long-term yields, which are skyrocketing and whether something may, as we like to say, break in the financial markets in some way that we're unaware of. but at the same time, i mean, the economy's really strong. >> right, i remember talking with someone, the ceo the other day, and i just said, if you knew that you would have really good growth without a lot of wage growth, i mean, that's called what you're supposed to be looking for, and look, obviously, when rates are where they are, the algos take over, and the algos don't sit there and think, well, this is a nice economy. the fact is that we've always hoped for this, so now we hate it, it's an odd thing. >> one market participant said that's a tough narrative to get bearish on. >> right. >> in the way. now, we're seeing the reaction in stocks >> the algorithms say to get

negative. >> they do, because yields are moving higher, and the chance of another rate hike seems to be higher now as well. >> right. >> not to mention what the bond market's already done for us in terms of rate hikes over the last few weeks, really. i mean, that's been tightening of its own. >> exactly. i think there was a guest this morning who i looked very much who said, listen, i never really heard of a soft landing. he's been at it as long as i have, and seen a lot of soft landings. a soft landing is when you have still decent job growth but there's no wage growth. and it's just kind of tapers off and it works, and that's what i think can happen, but a day like today, i look at where the bonds are, and i just said, you know, the s&p futures correlated to the bonds. nasdaq is even more correlated. so, nasdaq opens 1.25. i'm not going to sit here and say, that's wrong. who am i to say, that's ridiculous? it doesn't matter whether i think it's ridiculous. the machines say it's not. they're not going to react to the goodness of this. they're going to react to the

badness >> household survey was a lot softer, just south of 90,000. is that worth taking into consideration? >> i guess so. i don't know. then you get the revisions. look, i just come back to saying that if you think that this economy is being slowed at all by what's happened short and long, i think that's all that happened. i think we have had new people in the labor force. but they're not able to get more money. by the way, i mean, look, we know that the -- we know that the uaw is going to cause a huge problem. so many people look at that and say, uaw, but this doesn't include that. this includes nothing that was negative and everything that was positive. >> you think it might be the last barn burner for a while? >> i do think it is, because shawn fain is going to give you his update and he's kind of the secretary of everything right now. and david, you know that the uaw has the -- they have a -- more than a hundred how to workers,

but the ripple effect is very big. i can't believe that the hospitality index, that they keep hiring. they should be not hiring, given the fact that they're supposed to have bad numbers next year. >> well, maybe that's not going to be the case. >> well, i mean, look, when you're with marriott, like, marriott would say, what's with the analysts? our numbers are -- but the cruise lines, our numbers are great for next year. but the analysts say, that's not going to happen. >> the airlines have pointed you directionally, right? that's been about fuel. by the way, s&p energy, on pace for the worst week since may. >> gasoline's coming down. i mean, look, if you did not have the bonds, you would say, oh, look at this. we've got really good job growth but not a lot of inflation. david, you got to buy the stocks. >> you would say that. you would. >> right, but the machines don't let it happen. >> well, you really just going to blame it on the machines? i mean, there is the idea that, obviously, when you're getting to close to 5% on ten-year now, that that is going to have a significant effect eventually in causing significant slowdown. >> well, it's a jamie dimon

market. i mean, remember, he said, get ready for 6%, maybe 7%. they have to have one or two hoo hikes. they have to hike later. i think we're hurt by there were some people, some federal reserve people who said in the last few days, it's cooling. >> and that was the trade right there of the year, though. short the ten-year, six weeks ago, i don't know. makes you wonder if that's going to show up in jpmorgan's earnings in a couple weeks. >> the bank stocks are so bad. we know they have all these held to mature chooe portfolios that are awful. >> they are awful, but they're held to maturity, so as long as you hold them to maturity and don't have to worry about some sort of tilt, you're fine. >> david, you are just -- holy cow, man, you took happy pills. it's terrific. i feel great. >> you do? >> endorphin drip. >> i did not take happy pills, believe me. >> you just made me feel terrific, like we ought to go buy it. >> jim mentioned some of the fed speak. daley did say yesterday that the

tightening we've seen in the last couple weeks, probably worth at least one hike, and then she talked about economic conditions. take a listen. >> if financial conditions, which have tightened considerably in the last 90 days, if they should remain tight, well, then the need for us to take further action is diminished, because financial markets are already moving into that direction, and they've done the work. we don't need to do it more. >> i think that what we're seeing is that the financial markets may be doing that, but the small and medium-size business people, as represented by paychex, which is the payroll processing firm, i had john gibson on. he said, business is pretty good. more people being hired than bankruptcies. it's great. wage growth not exactly what you thought, but there's a lot of businesses being created. the small and medium-size business is not listening to the fed. they're listening to demand. >> how much do you think this move in rates is really basically taking the onus off the fed to do anything? >> i think that what they cared about the most was that the

endless increase in housing, 40% increase since 2019, well, i don't know, what did we have mortgage rates like 8.25% and just make it so you can't afford a new home. it's really -- the interest for mortgages, i don't want to make it seem -- my first mortgage was 12%. you have all these older people that come and say, i remember when it was 18%. but the fact is that all that matters is where it was versus where it is and it was at 3.5%, and now it's at 8%, then you're not going to be so happy about paying for a million dollar house for toll brothers. >> remember back when we were in that period where buffett would say the best investment -- he was always asked, what's the best investment? 30-year fixed. because he remembered, as do you. >> yes. yes. what a great investment. i think that, in the end, every single input that has been a thorn in our side, whether it be housing, oil, is diminished, so

if i were the fed, i would say, you know what? it's going our way. but not yet. let's do another hike, see how it goes. if we have an extension of the uaw strike, which i'm focused on because it seems so ugly, then you're going to have a lot -- they still have inventories but when those inventories go down, they can't rebuild them. it's going to be a considerable part of the country that's kind of just taken out and shot. >> really quick, jim, will you ever pay attention to adp again after this week? >> who's that? i have him in my fantasy league. i'm going to drop him. are you playing adp? >> no. but i have been. >> i don't want adp. >> what do i know? >> i'm playing mccaffrey. >> i'm a jets fan. i know nothing. >> don't worry about it. you have a good defense. >> we do have a good defense. >> i do feel that, look, every stock, if you take a look at the crawl underneath, let's take nvidia. nvidia, there's some comment about how china -- it would be great if china were open. no kidding, yeah, no, like, it would be bad.

there's a lot of nonsense. but the stock was up $1.50 and then it was flas t and now it's down $5. what i'm saying, it's ridiculous, but it doesn't matter. our markets don't work. they are just about the algorithms. so, you have to wait until the -- a little longer. >> and then see how it plays. >> david, we have not even mentioned ozempic yet. >> and we haven't mentioned -- let's talk about the big potential deal in the oil patch. we're talking here about, well, originally, i think "the journal" reporting that exxon may be close to a transaction in which it would acquire pioneer, a company jim knows well, of course. >> big position for my trust. >> been a frequent guest on your show for many years. i was hoping coming in this morning that i would be able to provide our viewers, perhaps, some sense as to price or structure. at this point, i think it's just a lot of guessing in terms of, well, would it be $60 billion or could it be? that was the rumor around yesterday, $60 billion energy

deal. >> that was there three weeks ago. why would sheffield just accept something that he had three weeks ago? >> what's that? i'm sorry, jim. >> pioneer is at $250. >> i don't know. i don't know much, sadly. i wish i had more to provide. >> but the fact that exxon 's down. >> the rumors yesterday. that seemed to be the number, but we don't really know much in terms of giving you a specific here in terms of where it's going to be or whether it's going to be all stocks. all cash would be more accretive as you might anthony icipate. it's not like exxon doesn't have the ability to pay all cash. even their borrowing costs are higher than they might once have been. >> good point. >> there is also a question, jim, you know, about whether or not exxon -- last spring, there was some reports about -- >> in april, yes. >> about pioneer potentially looking at potential acquisition

interest. i poked around at the time. it didn't feel like there was much there. including even exxon. it just didn't feel like there was anything really close to a potential deal. what has changed, i think, is a question, and there is one potential answer, which is that exxon and darren woods has not spoken of this directly, but he has made some references to technology that they have that improves the recovery factor in these particular wells. obviously, i've been there. i've been to the permian. with exxon, obviously, and seen what they're doing down there, but -- and that might give them the impetus, a higher recovery values they feel confident of given the technology they are now employing in some way. i don't know what it is. we're guessing here, a.i.-related, who knows what it could be? that says the math now works >> pioneer's of the larger independents, is the -- cthey have the cheapest all in. scott sheffield came on "mad money" and said, categorically, we've not talked to exxon.

that's not necessarily repudiated. he said, we're not looking and we're not for sale, and one of the reasons why is because he's transitioning out, and richard dealey is coming in. so, why would you sell the company when you have a transition going on? i will say this. that is the best group of properties in the permian you're going to get. >> is it? >> yeah, because they're getting a lot more out of each well, and that's why you're so right. they didn't increase their budget, but these wells are really productive. so, it makes all the sense -- look, if you're going to make a splash, if you're going to really do something in the permian, you buy these guys. this would be better than anadarko. >> we talked about the share revolution overall. it's a technology revolution is what it is. it's incredible what they can do in terms of sending pipes out miles one way and miles another and they connect like this, and when you continue to improve on the ability to recover from these wells that obviously increases the return for the capital that you're putting in. and that comes with either new

wells or wells that you're buying from another company when you acquire another company. maybe that's what's -- it does feel like we're set up for a monday deal, but frankly, i have not been able to get much at all this morning. >> well, i know that scott sheffield has come on "mad money" many, many times, and what he's always reminded me of is that he is a huge believer in having the highest yield in the s&p. and then, when we had the collapse in oil last year, he switched and started buying the stock furiously. so, i don't think, if you're buying your stock at $205 and $210, you're a seller to exxon at $240. >> you don't? you think it's a higher number? >> yes, i do. >> i wish i had some sense for you if whether that $60 billion number is the right one. >> the company traded at $270 a year ago, so i don't think it's going to get $270, but they have a huge amount of money in their

balance sheet. >> true. although you could do -- >> they did buy a lot of companies. >> you do all stock, i think they did with denbury, and exxon moves up. >> that denbury was a great deal for both sides. >> much smaller deal, but obviously in a very different area. >> i know that to kill this deal, i mean, obviously, we're all making our calls. i can't get any confirmation, but that actually may be indicative that it's happening. >> i think this one, i think, feels like it's on a path. you never know. >> i agree. >> certainly no lack of hot takes today regarding the rationale. >> we're not going to sell it for the trust. we're going to play it out. >> you want to play risk arb now? >> there's no deal yet. >> there is no deal. >> do people do that risk arb stuff before there's a deal? >> it's always happening. of course. you're doing it right now, arguing for a higher price. >> i sure am. >> yeah. >> when we come back, b of a, interesting take this morning on these weight loss drugs, including the impact on restaurants, apparel, snacking, gaming. we'll talk about that note. we'll get to some auto news,

of course. busy news again today, new initiation of some of the media names when "squawkn e re" ntuein a minute.

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♪ no one really knows exactly how prevalent these drugs are going to become, but let's say

they become more prevalent. if that were to happen, i believe we would be very well positioned. if we were to find ourselves in a situation where suddenly more consumers are looking for healthier meals and portion control, products like bird's eye and healthy choice are incredibly well positioned, and we'd be happy to turn those consumers into loyalists of our brands. >> that's sean conley last night on a day where b of a takes a crack at these weight loss drugs, jim. they've got a calorie model, and they argue this might trim maybe 1%, 3% of calorie intake in the united states. >> i think it would be more than that, depending on what the ceo of eli lilly said. this will become the standard of care over many years. and yes, there will be weight that comes off. there will also be more money, by the way. individuals will have a -- families will have more money. i know that the question is how quickly the uptake will be, and there's a number of notes today about the lilly, about how phase 3 will make it a pill.

right now, it's a shot. people are not into taking -- putting a refrigerator, shot, taking it out once a week. if you have a pill, the adoption's going to be big. >> but the pill's not until when? >> it's in phase three. >> so, maybe 2026? >> maybe. the fda's always loath to be able to put out another drug when they have one that works, even if it's not necessarily the way that people like it. i think what's really going on is that the market has decided that this is going to happen sooner than expected. i don't know if you saw the stocks, david. like, pepsico yesterday? i mean, people aren't going to have potato chips? no. >> it's so interesting, the reaction in the marketplace to the concerns that ultimately you're going to have a lot of people on these drugs and just have fewer people eating things that are bad for them or just eating in general. >> i think there's -- one of the things i talked about with sean connolly from conagra is that the big issue is that you don't

get enough protein in your diet. you may not think a slim jim is good protein, but whatever produces protein is going to come to the fore as something you want to have, and you just don't like sweets. >> not to mention older people, because when you lose weight, you lose muscle mass, and that's important. >> they need to -- >> that may not be the best for taking them. >> and i think that there's also a story out today, jama study, which just talked about some bowel problems, problems with nausea, but i think what really matters is that you have to pay a thousand dollars a week if you don't have insurance. now, maybe some doctors are ginning up prescriptions, but you need to have either diabetes or high blood pressure weight loss. >> mounjaro is not even approved for obesity not. >> remember, david, the mounjaro truck. >> you said the wegovy truck. >> wegovy truck is here. >> the wells fargo wagon is coming down the --

>> throwing out wegovy? >> you got to ring the bell. then they come and get it for you. >> carl, they're talking about a $100 billion market for these drugs. >> they're talking about annual patient rate, 6, 8, 10, 13 over the rest of the decade. >> this will be the greatest selling drug in history, more than humira, but i think that people have to recognize there's only two of them right now and novo does not have the manufacturing capacity that they have. david ricks saw this coming and is building factories in north carolina to meet the demand, and the demand is insane. david. >> yes, people are running after that wegovy truck. >> i shouldn't be saying that. >> yep. b of a takes lilly from $600 to $700 today. >> they don't know about the bonds. >> oh, right. they didn't incorporate the bonds. >> the bonds people are going to want to be fat. >> we'll get cramer's "mad dash" and countdown to the opening

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call 1-800-miracle to test drive our hearing aids risk free. that jobs number is getting a second look here as equity futures improve. ten-year, highs for the week was about 4.87%. haven't quite gotten back to that. the two-year high of the week was about 5.18%. we're about five or six basis points shy of that. we'll see what happens in the opening bell rings in four and a half minutes.

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jobs number. where do you want to go this morning? >> constellation brands was down 3% on what was a pretty good number. they had good beer. they had bad spirits. remember, spirits, you know, they don't have the best spirits line-up. they have decent wine line-up. here's what i think is the takeaway. beer, bill newelen said, is not necessarily affected by the glp ones, because it's more of an experiential, and don't -- this is why i'm going with you on this -- don't take that number as the most important one because there's a november 2nd meeting, analyst meeting, that's going to be the first one that's influenced by elliott partners because they have two board members. >> oh, right. elliott is there. >> once that's -- obviously, they want the stock higher, but they have the ability to suggest things, including, perhaps, maybe getting rid of some of the disappointing spirits business. maybe they don't have -- they have a buyback right now, but they didn't use it this quarter. but i think they had two board members, and david, elliott is being worked with very closely

by newlan. not only no opposition, but he really welcomes it. >> he's working with the activists. >> he welcomes it. >> let's get the opening bell. at the big board, it is "travel + leisure" celebrating the launch of "sports illustrated" resorts. and at the nasdaq, conduit pharmaceuticals celebrating its recent listing via spac. how do you characterize what the bulls or bears need to do today to demonstrate they've got the ball? >> i think you want to look at a couple of the megacaps, megacap techs, because they do very well no matter what. if you think that the fed is going to hike, they've done well. and they've been the only place where there's really been buying in the last few weeks. there's been a lot of bull markets that we have lost, and there's -- it's undeniable that the narrow -- the narrowness of this market, when we do have up

days, is just horrible. so, down days, if you lose the megacaps, you really could have a nasty day. >> yeah. i think earlier in the week, bespoke was tracking the number of down days for spy, the spy etf, down 33 of 50. >> no, it's just -- it's not a great time. david, there's so many bear markets underneath. i mean, when they got to the food stocks yesterday, people look at them and say, hold on just a second, they're 21 times earnings? they should be at 12 times earnings. there's six sells of clorox. that hack didn't help. >> that cyberattack -- actually, let's spend a minute talking about cyberattacks because we got mgm resorts giving us the numbers there. >> the numbers are extraordinary. >> that cyberattack on clorox was extraordinary. it closed things down there for six weeks, basically, is what it seemed, where they were doing everything by hand. and it results in a very significant impact to clorox, and then you see mgm say it's

costing us a hundred million bucks as they try to get back to business, notifying relevant customers by email as required by law, and providing them with credit monitoring and on and on from there. it was -- what was it? name, contact information, and date of birth, driver's license numbers for some, social security numbers. this goes on and on, all the time. it is having an impact. they wanted ransom there. i don't think they paid it. >> no. but my understanding is once again, it's about training. i mean, if you go to palo alto or crowdstrike, if you go to okta, identification, if you go to zscaler, they're all going to say the same thing, which is, you've got to teach your employees that every call you get may be an impersonator. so, don't help people. you're at mgm and you get a call that says, look, i've got a big gambler here, i want to give credit. i can't get ahold of joe. will you give me the guy's information? and then you're thinking, well, wait a second.

i don't want to be the person who turned down a big gambler who could be fantastic for us. so, boom, you give him the information, and that's the end. it doesn't matter whether you have good cybersecurity. the kindness of strangers is paying off here for the bad guys. >> yes. and again, in this case, caesar's and clorox, it may have been the same hacking group, and they're looking for, basically, to get paid. >> do you know who's had to put a stop to this and done a very effective job? trying to? verizon. they want you to go to the station. they want to go to the stores. they have been hacked -- this is what the cyber experts say -- they have been hacked so often, they have the procedures to say, listen, we're not going to let anybody just call and say, hey, my name is david faber, and i've got, you know, you owe me a hundred dollars. okay, where do i wire it? no. you're not going to get anything out of those guys, which has good, because i don't know if you've seen the verizon yield. >> it keeps going up as the stock keeps going down. >> how has that happened? >> speaking of verizon, with

longer term rates continuing to rise, you are going to continue to see pressure on highly indebted companies, even if they have enormous amounts of cash flow and their interest costs are not any question, those costs are going to go higher as they refinance potentially into the future and you got the algorithms, everybody else poring over all these things. we talked about the utilities yesterday. next year, for example, and others as well. but any capital structure that's going to be -- need to be refinanced, where there's a lot of debt or you have a high leverage ratio, you just get hit, jim. >> yeah, i know. >> that's been a great trade for the last few weeks. >> that's why i want to look at the technology. the technology companies don't borrow. they have so much money. i'll give you a really interesting one to watch if you're trying to figure out what's going on. look at micron. they reported an incredibly disappointing number. the stock was at $68. >> yeah. >> and then it dropped to $64 and now it's at $68.67. >> well, how about western digital, 52-week high yesterday,

and you look at the best dow stocks of the year, salesforce, apple, microsoft. >> those are all good because they don't have any monetary woes. salesforce is doing so much better. remember, the last thing they did was have a huge upside surprise. the stock is down 10%. apple, will the downgrade that we got from keybanc mark the end of that selloff? that would be brutal, wouldn't it? microsoft, they have copilot. dave, do you use copilot? >> i have not yet used copilot, no. >> do you use chatgpt to say, i want to summarize that 180-page deck? >> i will start to do that, or i will ask others to do that. >> that's what a.i. is about. >> i haven't really incorporated it into my daily work flow, but i know many others have. it is already a productivity tool. it will only increase. we're talking chatgpt 4, if you're paying for it, you're getting more, but if you're not -- >> i still don't like that it's not up to date for everything. >> but it is more up to date now. >> it sure is. i find -- carl, i use it when i -- okay, i'll give you -- let

me give you an example of what i use it for. let's say i'm about to interview someone who's political. well, i would like nonpolitical questions, and chatgpt, i don't know what their bias is, but i think it's kind of none, so when i -- i look at their questions. they tend to be very good. >> really? >> yeah. because they don't have ideological bias, which i think is important for our viewers. >> you're using chatgpt for questions for your subjects? >> you put them in the prompter and just roll? >> i incorporate it into my routine. >> because at some point -- >> is that wrong to say? >> at some point, you will be replaced by an actual simulation that looks like you and it will be generating the questions it apparently already is. >> will it take you personally when you ridicule it? >> it might simulate conflict between us. >> that's when you know the technology's taken a leap forward, jim, when it can recreate your chagrin to david's ridicule. >> david, if you prick me, do i not bleed? if you poison me, do i not die?

>> at this point, you might, but soon to be, no. >> have i not hands? >> we will both be images that aren't actually real. >> well, that's certainly possible. >> our voice will be recreated. we won't age. >> when jensen did that to me, i was talking to myself. >> there it is. >> it's been a while. >> it has been. jensen huang, when he had the specialized, and i was telling my wife, saying it was hard to get that little philly accent in that dooms me. that's kept me from advancing in life, the philly accent. >> yes, it has. we've all talked about how you haven't advanced very far in life as a result of your accent >> he's just incredible, isn't he? we had his mother on. nothing pleases him. nothing. >> but i'll tell you what, 336,000 jobs. without that much inflation, that's a good thing. >> i think that you can buy the qqq. buy the qqq. they are not impacted by this. >> not for the markets. >> they're not impacted. look, maybe you could argue there's a new group of people in

the workforce. we have a gigantic amount of immigrants. they do have -- they are tapped to be able to work. it does make it so that you don't have to pay people as much. now, in the meantime, we do have the minimum wages going up big in california next year, fast food, which is a lot of people, 1.4 million people, but this is not a bad number if you're the fed when it comes to wage. and i know that the fed is looking at that wage growth more than it's looking in the number people are hired. >> for sure. it's interesting. b of a, hartnett today, this call, he's been pretty bearish overall, and says that once the recessionary bond and market activity works its way into the data, that bonds will be -- will rally big and will be the best performing asset in the first half of next year. >> really? >> yeah. >> wow. >> do you buy it? >> no. i think we're normalizing after years of where bonds were below and david, you know, any time you mention what carl just said,

the deficit -- >> the deficit? >> he does make that point, that you've got 40% of the global population going to the polls next year. and that's an environment in which austerity is not going to be popular. >> i'm kind of always confused. why don't these countries -- the dollar's been up against every single currency in the world. why would you not buy our bonds? china, i understand. i think china's worth watching, because china may be doing things that are not necessarily -- >> well, it's in a different interest. >> yes. >> as part of its -- >> are you worried about war? >> am i worried about war? >> with china? >> no, not on a daily basis. i've got a list of things that come before that. >> you do? can you give me a couple? >> sure. scaffolding really drives me crazy. >> umbrellas on the sidewalk that they hit you in the head. >> that one, not as bad. for me, it's -- i'm not worried about crime. i'm worried about scaffolding, and that just drives me crazy. >> losing one sock in the dryer. >> that, i don't like.

how does that happen, carl? that is one of the great necessa mysteries. >> this is like "seinfeld" territory now. >> china war is far down. >> you're not worried about taiwan and whether they'll find a way to make it so they can't control taiwan like they did hong kong? >> i'm aware of that as a possibility. i don't believe it's quite as acute as others. >> i keep thinking of that, the incredible henry kissinger interview that was on bloomberg. he's 100 years old. just as sharp as he's always been. he says, listen, we have to head this off. we don't want this to come to some sort of really bad -- >> biden and xi may be getting together in november. >> that's important. i would think that jake sullivan -- i thought the national security guy. >> we have had a lot of visits there this year, as you know. >> schumer's taking a big group pretty soon. >> we need more business here, by the way, if you listen to jeff at macy's. we do not have -- we used to have tourism here that was just bountiful, china, and it was very positive. and look, i always come back to,

and i know the chinese are not necessarily crazy about some of the things i say, but the people -- >> right. although today, one of the lead stories in "the wall street journal" is that executives don't want to get on planes and go over there anymore because they're afraid of being detained. >> that's bad for business. >> yeah, that's not good for business. >> i think that i like to talk to nike and apple about these things. they've managed to navigate it. starbucks as may thas managed t navigate it. >> tesla, stories this morning about cutting surprise on the 3 sedan and the y suv. >> there are a lot of people who feel that 2024 has to be a bad year for tesla. i come back and say, wait a second, if ford and gm can't afford to fund their evs, it's not going to be a bad year for tesla. we don't know what's going to happen if they settle for a huge amount. they all say, listen, we can't do ev, right? at the same time as i.c.e.

>> we just don't have -- right. and as we pointed out numerous times, tesla has actual margin that others don't have and still will exceed whatever potentially they have, even over time. rivian gave up all the gains of the year. >> can we talk about that? >> and is now negative based, again, on yesterday's plan to issue $1.5 billion. there was no a lot of dilution, but i think it's the concern that it's not the last time they need to go to the capital markets in some way. >> boy, what a different environment from musk. >> that actually was looking fairly good for much of the year, at least. obviously, we remember when it had a hundred billion dollar market value during the height of the speculative craze in technology shares. >> can we just comment for a second away from rivian? market has pretty good. it's a long day. long day, david. but we're not seeing -- we're seeing some people interpreting what we saw today as maybe, hey, we're not -- we're going to have

a soft landing, and that's what i was hoping, because if you saw 80,000 jobs created, and you knew they were going to raise rates, and you already see what's going on, and you have the uaw, and we know that there's a built-in, we're going to have travel and leisure be down, then i think we would be sitting here and saying, oh my, we have no wage growth, and we're going to have a crash. instead, we have jay powell sitting there saying, listen, you know, so far, so good. >> maybe not a surprise. we do expect to hear from the president at is 11:30 on the jobs number and national manufacturing day. >> did you know october 14th is national obesity week? we're sitting here talking about ozempic the whole time. >> what happens during national obesity week? >> you take ozempic? >> it's different from national doughnut day, i'll tell you that much. i want to get you on the bernstein initiation of media names. big 150-page report. >> i chatgpt'ed that thing, i'll tell you. >> as the analyst writes, "my

young associates do not understand how cable remotes work." >> i saw a wolf piece saying that people will be -- that there will be people who are happy to pay a huge amount for the espn single. >> that's not a surprise to anybody, that the younger generation doesn't know how to use a cable remote and/or will not be subscribing to a package of channels the same way we did. of course, many of them, they don't watch -- they pay for, which was the beauty of the bundle for those who provide content for it. yeah, okay. so, now what? >> how about charter? you always have a view on charter. >> sure, i have a view on charter. you got to try your new box from comcast and charter that is going to make it easier to navigate, for example, streaming services, which, you know, that's one of the problems when you're untiin the streaming wori got to close that one, open that one. what am i watching? i don't remember. i don't remember where i was watching. >> i got the clicker that says, put on monday night football. >> now you -- >> sunday night football is going to be big again but no

swifty. >> is she not going to -- where are they? >> she's not going to see dallas play the niners. >> kelce's mom was on the "today" show today. i don't think this is going away any time soon. >> they're milking it. as they should. >> i have had the pleasure of having breakfast with the philadelphia kelce, who is very shakespearean in his abilities. he's a great -- by the way, jason, the center, he's going to be a hall of fame. >> jason, right, the other hall of fame kelce. >> he's incredibly well spoken. he gave a great speech when we won the super bowl, and he was so self-effacing. i said, can i get a picture of you? he said, i have no shirt on. i said, i don't care. who cares about your shirt? if he were here right now, he would be pure joy, and he would be saying, carl, i just think you look terrific. david, i know you don't hate jim. i mean, he's just remarkable. >> would he tell us what to buy or sell on the market? >> no, he would listen to us on that. >> he would?

>> david, do you use temu? >> excuse me? no. >> the subsidiary of the chinese duo duo? >> i don't, no. >> launched in september of 2022. 15% of consumers shop on this. >> shein is the other one. >> it's worth talking about, because when people trade down, they're not just trading down to the dollar tree and dollar store anymore, which don't act that well. now, dollar tree happens to have a candy aisle that i think is going to be -- >> they have not been acting well for quite some time. >> people figured it out. the smaller portions? >> yeah. >> they do that. when you go to the dollar tree, they have the smarties for $1.35 at the counter. >> there's not as many of them? >> i said to the guy, listen, this dollar tree, you charge $1.35 for the smarties.

he said, it's only 35 cents more. i said, come on, be true to your ethos. he said, are you jim cramer? i said, yeah. he said, what do you care about pay 35 cents more for smarties? i said, it's on principle. i think i have to think about temu as one of the reasons. >> pxd, jim, still leading the s&p this morning. by the way, there's been a lot of work. i know you noticed this morning on what gas prices may do in the coming weeks. there's chatter about maybe 25, 50% downside or 50-cent downside. >> we have way too much gasoline, but we don't have much oil, so i don't know how long it will last. if i were jay powell, i would say, let's not panic. go on our way. maybe we do one more hike and then we see if we haven't really won. but he's got to be monitoring this strike, which i keep coming back to, because there's a ripple effect once they're -- you know, finish their inventory. there won't be anything to sell.

they got five months worth of power. gm just did that bond yield. they're taking no prisoners. these guys are about to say to fain, heche in mexico. >> made in mexico. you've said that many times. you've called it the nuclear option. >> well, when it happens, you'll be saying, you know what, jim? >> maybe we get a settlement to the strike, jim. >> i'm betting on ford, them coming to the table, because ford's not fired uaw workers, unlike gm. it matters. ford also has those campaigns with the big ten on peacock about how much they like the workers. >> we'll watch it, obviously. expecting an update from the uaw today. check bonds today as well. we will hear from waller at 12:00. for the time being, you'll see the two-year, curve's been all over the place, but the two-year, somewhere around 5.10%. the ten-year, pretty much the highs of the morning at 4.82%.

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>> that's jimberg of levi with jim last night. >> he's a straight shooter. this will be his last conference call. one thing about him, i asked him questions that elucidated much tougher answers than i expected. he was not happy at all. direct to consumer is good. what's happened, it was very hot, and he said denim doesn't sell well when it's hot. the consumer, the consumer, the consumer. if you listen to that conference call or the interview, you would say if you're jay powell, wow, we got to be careful. people are not buying jeans, because jeans are too expensive. i thought it was a sober interview, which said be careful, fed. the consumer is much more strapped than you realize. >> yeah. and chip is a former proctor guy. >> chip is maybe one of the most

loved brand people in the world, and by the way, levi stadium, 49ers-dallas, going to be game. >> that's going to be huge. >> how about tonight? >> i love these mri companies giving a good read of what's going on in the economy. people are going -- moving out of hospitals and doing single mris. i'm very interested in that business because, well, you know, if you're going to get the all timer drugs you have to have a brain scan. >> we'll see you tonight. good weekend. "mad money" 6:00 p.m. eastern time. markets trying to hold to some moderate losses, but s&p 4225. we'll watch it closely when we're back in two.

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good friday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and david faber, live for you as always from post nine of the new york stock exchange. take a look at stocks, not loving the jobs report today even though it comes in much stronger than expected. good news is bad news mode. yields up, stocks down. s&p 500 giving up 0.7%. it looked worst earlier this

morning. here are three big movers we are watching. levi strauss shares lower, cutting the full-year sales force. earnings per share was a beat for the quarter. tesla, one of the biggest laggards on the s&p and the nasdaq right now, after cutting prices on some model 3s and model whys this morning. exxon reportedly closing in on a mega drill to buy pioneer resources. they're going to have the latest on the deal talks in just a moment. jobs, it just shows you everybody is wrong. economists are wrong, fed is wrong. nobody knows thou forecast this economy and this labor market, it is a lot stronger than is expected. headline number, 336,000 jobs expected in september. the consensus estimates $170. almost double what was expected. some economists, carl, had 150s for the monthly expectations. >> there is a reason why it's so hard?

is there something in particular about this economy that makes it more difficult? >> yes. the post-covid jobs market is just in a much different and healthier place. a supply problem. we don't have enough workers. it's a demand issue, which is good. we want to have more workers. the best part of this report is that wages were actually softer than expected, only adding 0.2% month over month. >> what david is getting to, is survey response, and that's been a long time criticism of the data. it's harder to read because survey response is degrading. >> i guess, but it also just speaks to the fact that it's that after all these rate hikes, i think everyone would be surprised to see a jobs market that at full employment is still adding 300,000 jobs per month. i mean that's not typical in a cycle, whether it's all of the stimulus that has flowed in that has helped consumers and now helping parts of the industrial and manufacturing economy, because of what washington is

doing. we had 119,000 revisions higher in the last two months, largely government jobs added interestingly. also, if you look at this report, the diffusion index, which looks at how broad the jobs gains were, it went up because we saw it wasn't just leisure and hospitality. there were job gains across the economy. the question is what does the fed do with this number. yields are up, especially the 2-year. expectations rise for another rate hike. the commentary this morning, they're not going to hike because of a strong jobs report, but it increases the probability that they would hike. >> even without what has been a worry about wage inflation? >> because, you know, there's this -- in economics, strong jobs and strong economy leads to higher inflation. now can they get away with stopping hiking and seeing inflation come all the way back down with the job market firing on all cylinders? maybe. that would be nice to think. >> also with the 10-year that's moved up substantially in yields

and that's had a tightening effect of its own. >> not setting my new highs today. >> it's higher. mary daly, san francisco fed president, did speak about this, how the market is doing the fed's work and maybe the fed doesn't have to. here's what she said. >> the bond market has tightened about 36 basis points since we met in september. that is equivalent to a rate hike. the need to do tightening additionally is not there. so from my own perspective that's what i look at. my job as i see it, our job as i see it, is not to tighten just do our part, it's to watch financial conditions because monetary policy works. we raise the funds rate, and it moves through all the other interest rates. if financial conditions are sufficiently tight, our work is not necessary because we don't need to boost them more. >> that's the case for not having to do more because the market is doing more. there will be those on the fed

that look at these numbers and think we have to make sure the inflation fire is put out. that is job number one. it is task number one. great to see it come down and why there's going to be more importance on next week's cpi report but they have to make sure. with an economy firing like this -- you talked to -- you're following the deal market. are we seeing behavior like we would see after 525 basis points of tightening? it's not changing behavior totally in some of these industries, and usually, when interest rates go up like this, it does. so they might have to do more. >> they might. they might. and certainly there's an expectation. the other fear, though, sara, as we like to say, with that move up in rates that you see in particular in yields, will something break? is there going to be some -- something we're perhaps not anticipating, as there was in the spring, with the handful of the banks, that is going to scare a lot of people?

when you have a move like that, to carl's point, not that significant a move higher in yield today on the jobs report, but we've seen what happened over the last few weeks. >> it's the speed and magnitude of the move. what could stop the bond sell-off? if something breaks, the emerginequity market throws a tantrum. today's job report was a question mark. we can throw out adp now. it's like useless. jobless claims are the story and jobless claims are historically low and they were again this week and they show an economy not in recession. >> for more on the market reaction to the jobs number, let's check in with bob pisani and see what's moving here. do you think it's orderly? >> yes. i am shocked by this number, 336. on the floor they were talking 140 to 170, just below the expectation, and particularly, the incredible upward revises in july and august, really, really strong, so job market is strong.

a curious reaction in the stock market. the usual laggards are there. so utilities, banks, reits. some of the consumers -- the reason the consumer discretion is so weak, tesla is down 3%. that is an outside weighting. look what's holding up better. commodity-based things are holding up. energy, china, holding up better, metals and mining stocks holding up better. positive. oil and gas exploration, because of exp, pioneer, but actually some other things are going on there. oil rallied, copper rallied on the jobs report. that's interesting to see here. exxon down. occidental, marathon, across the board, energy to the upside. i think sara, you put your finger on what core stroshgs it's inflation stupid. that's what we care about. average hourly wages month over month, below expectations. year over year, below. 4.2. below 4.3 expected.

so what do we have here? we have wage growth, the thing we care about, moderating, going in the right direction, but job growth is strong. what does this mean? consumers still have jobs, but inflation is going down. this would generally be good news for a certain sector. it would be good news for cyclicals holding on. even some consumer names, home depot is holding up well. industrial, caterpillar is up in the dow this morning here. so i'm not trying to sugar coat this. we were all shocked. this was an outlier. there may be a modest silver lining here. i don't think -- wage inflation going in the right direction down and job growth stronger than expected is a catastrophe even it is surprisingly strong. i'm trying to explain why the market is reacting the way it is. that's the explanation. >> a few month ago this would have been a goldilocks report the market would have rallied on. lower inflation strong jobs growth is a soft landing. they're getting higher at lower wages. that's a good thing.

i think in this stage, where higher for longer is getting psychologically priced into the bond market a lot longer. >> the bond market is up because the economy is really strong still. that's the message. it's to the going -- it's not up because the economy is weak, but because it's strong. daly had the key point. they're going to stay here. look at the numbers. why would they keep moving until they break things? don't they have that balanced? aren't they worried about breaking things? powell said he is. >> a concern amongst equity investors about that. again, we don't know. we hope nothing gets broken which means a market reaction to some area we don't anticipate because of concerns as a result of something failing or something going awry because rates are so much higher than they were. >> i think they're going to stick. daly had it. you had the right -- you brought up the right quote there i think the consensus at the fed. >> many fed members want to keep

raising rates on that committee, including some of the governors. >> the one guy, what does he want? >> not sure. he probably leans towards stay. he doesn't want to break anything or blow up the economy in order to get inflation down, but they need to get inflation down and they need to send that signal. >> but wage inflation is starting -- >> that's the point. that's what the silver lining was today. i'm trying to explain why the market is reacting this way. >> after the cpi report comes out next week on the 12z 212th s more important. >> i think we're primed for a rather significant rally at this point. i think we're moving in the right direction. we're bottoming. >> bob pisani. >> the problem -- here's the problem, as tom mcclellan used to say to me, oversold is a condition, it is not a signal. we are so -- everybody keeps messaging me, bob, look at the rsi numbers. we're so oversold. we have to buy. you can stay oversold for a long time. it's a condition, not a signal. that's the problem. here we are.

how many weeks have we been sitting here oversold at all of these -- historic oversold in utilities and reits. we haven't seen these conditions in reits and utilities, ever, but decades. yet -- >> not going down. >> you could say the same for bonds oversold and guess what, yields keep moving up an that's a problem. bob, thank you. >> condition. not a signal. >> condition, not a signal. great. >> bp. as we head to break, our road map for the rest of the hour. goldman sachs chief economist jan hatzius joins us at post nine on a jobs day toway weigh -- weigh in on the strong data. >> exxon, in talks to buy pioneer. we're going to give you details. >> finally, the state of the consumer and the retail stocks that might be on your shopping list as we go into holiday. jpmorgan's matt boss is going to join us in a few.

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shares of pioneer natural resources are up almost 10% you can see. exxon shares are down. this originally on reports from the "wall street journal" that exxon can confirm that, not that you really care, but i can tell you the two -- >> i care. >> sara cares. >> the two are in conversations. here's what i know at this point. can't give you structure and don't really know price. $60 billion sort of a number going around yesterday about a big energy deal. $60 billion. journal reporting that number of $60 billion. you can back into a price on

that. couple of things to keep in mind in previous deals, and talks, the one i'm most aware of, the talks that went on with danbury earlier this year and through the year until they reached a deal for exxon, far smaller deal, i mention it because of two things. a, he held the line on price, did darren wood the ceo, even though i didn't report on air a lot, i was hearing a lot during the course of that, and danbury wanted more but did settle for a deal in which it was all stock. that ended up being a smart idea, until recently with the decline in exxon shares. they got 0.84 shares. there is a desire on the part of pioneer to take stock in some fashion with a very secure dividend? we'll have to wait and see, but it's not something you can overlook as a possibility even though they have plenty of cash at exxon they could put into a deal. another thing that i continue to hear is that while this was

around in the spring, the possibility of pioneer selling, didn't really go anywhere, at least the adviser at the time sort of putting out the for sale sign, again what i heard, but not a lot of potential takers. exxon's technology in the permian where it has significant presence, i've been there, seen their cowboy plant, for example, they have a lot of what is called very strong technology in terms of increasing the recovery value of the shale wells. it may well be that the use of that technology on pioneer's wells, as well, sara, is going to bring higher recovery values, which, obviously, does increase exxon's interest in the overall asset which would give them a very significant position in the permian in the midland area, and they have a lot of infrastructure there already that would, again, benefit in terms of hydrating gas and pipelines and everything else.

thanks for the -- i can put it in my head and think about it, because i was down there looking at all that stuff for our documentary over a year ago. >> the question i think, would it be too much scale in the permian it would raise antitrust concerns? >> you can't rule out that possibility. it doesn't appear it should be the case, at least based on certain metrics, but you're right. there's no doubt. >> the administration letting a big oil company buy another big oil company. >> that always comes to the floor and conceivably will here. you know, this may not have been as far along until the leak yesterday. if you're exxon and pioneer and thought had more time, my understanding is they were not as far along we might have anticipated, you move things up quickly and speed things up. you don't want uncertainty hanging out there. i don't know if we see a sunday night announcement, monday morning open, but it is point,

given i was surprised to hear in this were not as advanced giving the reporting that has taken place from the journal being first yesterday. >> all right. guys, s&p on pace for five straight weeks of losses. there are bright spots. a number of stocks hitting new highs in the down market. google and microsoft green with the dow down 225. we'll talk about somnas xt.e me ( ♪ ♪ ) ( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪ ♪ ( seems impossible to face) ♪ ♪ (a lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ a bank that knows your business grows your business. bmo.

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. let's get back to this morning's blowout jobs number showing the strong jobs market. the hiring surge did raise a chance of the fed hike in the market up 28%. our senior economics reporter steve liesman is here on set with his take on the numbers having had time to dig in. >> i think the most important thing is the thing you said, 28 is less than 50. and so is the december probability. i don't know if we have a chart there, but it's 45, 46, less than 50. what's happening? you look at what's happening with the 10-year. the 4.80, 4.90, blink your eye it's higher. there's the chart and there's

what happened. the odds on bet it doesn't happen. now they did take away a bit of the probability for the cut in june. it's still the odds on favorite at 42%. it was up at 45%. what's happening now is this belief that what's happening in the 10-year, happening in the real economy rates, going to do the work for the fed. they can still wait to see, and i don't know that they're going to overreact to this number. this number feels high to me. there was a time in november of '21 the number came in below 200,000. i said this number is wrong. >> what does that mean, feels? >> i'm going to get there, david. i'll try to explain. >> predicting the revisions. >> i'm predicting the revisions. i thought that number was way low. it was revised to like 700,000. i think there are seasonal adjustment issues in there, teachers coming back to work. i don't know that high in the sense of it's below 200,000 but maybe more like 250. i think what's happening now with the revisions, the idea that we are able to add these

people, as you guys have been talking about, these lower wage rates tells me that the competition in the job market there is softening there and does put something in the argument of the doves who say we have softening in the labor market. they're going to take a step back but i don't think they're going to react saying we're going to hike again. i don't know what a quarter gets them. if they do a quarter i think they do 50. i don't think there's any -- know what i'm saying? >> they're going to do it, do it. >> if you feel like you're out of place, then you're not out of place by a quarter, by more than that. >> it feels like the thinking has shifted a little to let's keep on restrictive for longer than going higher. >> right. bostic gave us that trade this week. remember, he very importantly used the term, sufficiently restrictive. that was the benchmark that powell gave us for the -- for what would be the level that we would stop at it. bostic was the first guy to use that. i haven't heard others use it.

daly said restrictive, didn't say sufficiently. what bostic did is say sufficiently restrictive and then went on to say one quarter point hike at the end of next year. that's the trade being made right now. >> daly pointing out 36 basis points or whatever has been added to the long end here in terms of yield or rate being restrictive. >> it's interesting to look at how we got here. you go back to mid-july, right, we were 100 basis points lower on the 10-year. mid-july, to mid-september, the whole story was the combination of surprise issuance from the treasury and stronger economic growth. remember that upgrade we've had to the third quarter gdp which has stuck around surprisingly so. >> 4.9. >> we'll do probably our wrap it up over the weekend to get to 50, the other 50, is from the fed. right. so the fed changed the whole outlook.

50 and 50 gives you 100 right now and we'll see, we may get more here, but i don't think the fed needs to add on more here in terms of what it's added. >> i think you can make a strong case for hiking. i think you can make a strong case for staying. they're going to make both. there are now divisions inside the fed about what to do next. >> that is correct. you have michelle bowman, fed governor. >> wants a few more hikes. >> straight out used the word hikes, plural. we watch the language carefully. i don't know where williams stance on this. my guess so far on this, williams let it ride. i did not get a sense he was in a hurry. >> waller is going to speak today. >> we'll listen to chris waller. you guys were asking what's the big guy think? i think the big guy wants to take a step back and just watch this thing play out for a bit. he doesn't want to break it, but he has been seriously on the record saying he is not the guy that's going to leave here with inflation still out of control. he's been definitive about that. he's got a sense of his place in

history on this thing, and i think when you walk into the fed's -- you know how it used to be don't ef up the one thing they told you, at the fed they say, don't be arthur burns. that's the thing. the same as don't mess up. >> he's not going to be that guy. >> we don't get declines next year as much as we thought in rates. >> 50 basis points off. i have to look at the curve right now, but right nowfy if i look at this, we're still above 5%, 5.1%, into july, and there's a 43% chance of a probability of a cut in june, 4339. call that even. as the year goes by, they are increasingly baking in the quarter point cut right there. just a quarter. and, you know, i talked to paul mccauley, he said it's simple, the bond market was mispriced for the economic strength, mispriced for the fed to remain

as high as it now believes it will be. the fed might have made a mistake there, but we'll see. it feels like they did not make a mistake by remaining quite so tough. >> steve thank you. >> thank you. >> come down here more. >> i would, when congestion pricing is in place. >> yeah. >> and the traffic is not so horrendous >> that's coming. >> take out the small violins. >> overall, it's been another tough week for stocks on the back of this higher move in bond yields but a host of names posting big gains and hitting new highs. dom chu tracking those. >> the positive news here is amid the possibility fifth straight week of losses for the s&p 500 we have a couple, just two, that have hit so far this week. the interesting part about the new highs we've seen and the outperformers, what parts of the market they've come in. take a look at the two new record highs we saw in the s&p 500 this week, it is for the most part names that you might

think about as maybe defensive in nature and more on the exchange side of things. talk about at least for now, the shares of mckesson, which are to the record to the upside here. also you have shares of cboe holdings, exchange operator, that have hit record highs so far today. if you look at the biggest s&p 500 gainers, market access, big platforms for trading of bonds, not surprising given the dynamic we've seen in bonds and everything else, edwards life sciences, cme group up 5% and lamb weston on frozen foods, french fries up 5% as well. for the bigger laggards over the course of this past week, you kind of take a look at the names we've seen, many of the media telecom names have taken 52-week lows. the utility companies specifically. aes, nextair, 27 and 17, and mccormick on the back of what's viewed as a disappointing earnings report, down 18%.

perhaps the most important one about this whole story is the mega cap technology stocks, they have been more stable over the course of the week. apple, nvidia, alphabet, all positive between 2 to 4% this week to date period. something to keep an eye on while the market is still in transition. >> it's a good point, dom, in particular the mega cap which had the nasdaq only down 0.2% off of that jobs number. some saying economic growth could lead to higher earnings. >> not just that, doing this in the face, these are rising in value amidst rising rates at a quicker pace as well. i mean, it's a curious story for sure, sdmifds yeah. thank you. >> still to come here, more street reaction to the blowout employment report as we told you, 336,000 jobs were added. that was almost double consensus. goldman sachs' chief economist will join us to break down the numbers and talk about what's

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. ♪ welcome back. i'm pippa stevens with your cnbc news update. former president donald trump is throwing his support behind his ally, ohio representative jim jordan, for the house speaker election. the endorsement seems to put an end to the prospect trump would be a candidate after he said thursday he would be interested in serving as an interim speaker. the controversial deal to merge the pga tour and saudi backed liv golf is facing delays over antitrust concerns. according to a bloomberg report, the deal is struggling to get over the finish line as the

justice department investigates how it happened and the leagues may continue separate tour schedules next year. the know bell committee awarded a jailed iranian activist for her fight against the oppression in iroan who has continued to fight for human rights in the country. she has been arrested 13 times, convicted five times and sentenced to 31 years in prison. back to you. >> thanks very much. some renewed questions today about the fed and where interest rates are going following that shockingly strong jobs number today. payroll growing by 336,000. markets trying to shave some losses. s&p now down to 8 points down and the nasdaq going green. some sectors have gone green as well, materials, info tech and communications. jan hatzius here to help us better understand the number.

>> it's nice to be here. >> is it clean? this print? >> i don't see obvious distortions. that said, this is a very high number relative to other signals, so, yeah, i think it overstates the underlying trend. the household survey was softer. you have to take any monthly number with a grain of salt. the bigger takeaway the economy in the third quarter was strong. gdp is probably going to show a big increase. we're at 3.7%. the payroll numbers for the third quarter were consistently strong, not 336, but in the 260, 270 range on average. >> the white house today said be prepared for the job market to cool. you've written about what you're calling potholes for q4. is this -- is it your view this may be the last strong number for a while? >> the pothole is really in gdp, so i think there are good reasons to think that fourth quarter gdp growth is going to

be a lot weaker than third quarter, in part just because, again, there's some payback for a very strong number. consumption is looking weaker. we may still get a government shutdown. we have a hit from student loan payments. i don't think that necessarily means a big weakening in the labor market. i wouldn't say the unemployment rate is likely to increase significantly, but payroll growth is weaker than the very strong numbers we've had. >> the market is now recovering, the stock market, the nasdaq is positive, bond yields come off the highs and i wonder if after getting over the initial shock of how strong that headline jobs growth is, the fact that wages were weaker and year over year posted the biggest declines since 2021 is it a sign the fed wouldn't have to keep hiking? >> i think that's the right takeaway, yes. if you have strength in job

growth, but actually no big change in labor market slack, the unemployment rate was unchanged, and as you say declining wage growth, that doesn't mean that we need tighter monetary policy from here. the broader view is also that we've generally seen rebalancing in the labor market, we've seen declining inflationary pressure, despite the strong economy. that's a good thing. and again, not a reason to run a much tighter monetary policy because it's inflation that the fed is focused on. they don't want to create a weak economy for its own sake. they want to -- >> just kill inflation. >> if i'm a hawk on the committee, you could make the case the economy is going to grow 4.9% this quarter in q3. we're getting jobs numbers at what seemed like full employment more than 300,000 jobs added. yes, wage growth is coming down, but it is still up more than 4% from last year.

core inflation is down, but it's near 4%. we've got more work to do. >> i think the answer would be -- part of the answer would be that the funds rate is 5.25 to 5.5%. that's a pretty high level. we've seen a material tightening in financial conditions with the big increase -- >> why suspect it hurting the economy more, though? >> because i think the economy is strong underneath. also the increase in bond yields and the tightening in financial conditions is pretty recent, so i think you always want to be looking forward. there are good reasons to expect weaker growth in q4 and tighter financial conditions probably after that at the margins. with the inflation numbers and the wage growth numbers, what they are, it just seems to me there's no urgency to deliver another hike. i don't think they're going to say we're done here. but at least postpone the decision beyond the november meeting. >> you're not an equity strategist but what about

corporate profits given the streng of the economy and underneath strength that you referred to as well? do they go higher? are we underestimating how profitable companies could be in the next quarter or quarters? >> we think that the year on year rate has bottomed and we're, you know, in the process of moving into positive earnings growth. i think that's going to be hard to see very strong earnings growth given that, you know, the stage -- at this stage of the cycle you don't get the kind of earnings gains that you have early on when you're coming out of a recession or coming out of a, you know, very substantial slowdown. i would expect positive earnings growth next year. >> finally, you did raise a little bit your year-end view for the 10-year yield and for the year-end 24 to 43 in both cases. >> that's right. >> is that worrying? >> no. i don't think it's worrying because it is the flip side of an economy that continues to do very well, also 4.3% would be,

you know, down somewhat from where we are. t i think to a large extent an economy that continues to be robust and staying out of recession. >> as you've told investors to prepare for for a while now. jan, good to see you. >> thank you. >> jan hatzius, goldman sachs. up next, a makeover for retail giant shein. the read on retail as we head into the crucial shopping season. matt joins us with a list of stocks he says a auyig re b rht now. we'll be right back. answers, it's good to have help. because the right information, at the right time, may make all the difference. at humana, we know that's especially true when you're looking for a medicare supplement insurance plan. that's why we're offering "seven things every medicare supplement should have". it's yours free, just for calling the number on your screen. and when you call, a knowledgeable, licensed agent-producer can answer any questions you have and help you choose the plan

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let's talk retail. levi strauss on the move cutting its full-year guidance citing weaker shopping trends at department stores and big box retailers. this is three months after the company had to cut its full-year profit outlook. the next guest is a top retail analyst on the street. jpmorgan's matt boss has a

neutral rating, $16 price target on levi and i think you like other names in retail better. why? >> thanks for having me on, sara. look, we actually recently put out a macro and micro primer. the reality is for the low to middle income consumer, 2024, i think sets up worse than 2023. particularly the front half. you're seeing savings rates for the low to middle income consumer diminish. the excess they have. we now sit 500 basis points below where we did in 2019 and the interest rate dynamic, it's not just housing but credit card balances. that low and middle income consumer they carry balances and it's a lot more costly. that's in addition. you've talked about student student loans and some of the other headwinds that we have. so for us, you need either total addressable market that's larger or you need trade down. that's one of the things in our survey work we're seeing become a much bigger theme.

>> it's weird to talk about a weakening consumer on a day where we saw more than 300,000 jobs added. if the mantra has been the consumer is hanging in because jobs growth has been healthy, we still got that. >> they are, but what you're seeing is a dichotomy. higher income consumer is holding in. low income consumer, is pressured by the expenditures. the big five expenditures, as you think about housing and you think about utilities, for me, i mean, this now makes up more than 300 basis points higher of their wallet than in 2019. so these inflationary cost pressures are really weighing. for us, trade down is one of the biggest themes in some of our recent consumer survey work we're seeing. that would be tj maxx, ross stores, burlington of the world. you want to be position where value is king, as well as convenience. the other theme that we're seeing is casual. so as it relates to athletic and

active, i think that's a total addressable market that's larger. we like the lululemon of the world and nike as you think about multiyear. >> total addressable market i was going to ask about that. you like macy's though and some of the other department stores? >> i think it's a tough road right now for u.s. wholesale, and i think that's what you heard last night from levi and chip was on jim's show. u.s. wholesale, the consumer is slowing, and that really started in august. inventory was a year ago caught heavy at a number of retailers, and the brands really pushed some of that inventory back and forth across the wholesale channel. i think you've seen an equilibrium. inventory at retail is rationale and you're seeing more full price selling as you move forward what you have because of that, but you need self-help. that's the point i'm making.

so you either need an idiosyncratic self-help story or a customer pull given the trade down and that's where the off price retailers are taking back share, which makes it difficult for the department stores and specialty, where you're seeing share shifts happen. that would be your mall based specialty retailers, victoria secret, bath and body, abercrombie, american eagle. that's where these single retailers on the specialty side are battling up against some of the more value retailers out there. >> finally, matt, two questions from me to finish up. one is to what degree are lower gas prices offering some relief to the consumer? second, what do you make of the early efforts to quantify the impact of weight loss drugs on sectors like apparel? >> look. i think from the gas price perspective, the consumer hasn't seen it yet.

so that may be an opportunity. you know, look, i think for me, the gas prices are a constant check of the consumer's budget. meaning the prices at the pump, they see it, and they recognize the sequential change. look, any dollar, my point here, helps, and especially for that low to middle income consumer where the reality is, the low income consumer exhausted their pandemic savings in the mid-summer. the middle income consumer is set to exhaust it by the end of 3q. it sets up a tough comparison because they had extra dollars in their wallet for the first three quarters of this year. if gas prices do come down, obviously, that could be an incremental help. it's something that we're watching. look, i think on the weight loss side it's early to monitor it. i've seen some of the reports coming out of some of the discounters. it's a little early in my opinion. i think the consumer still wants

newness, differentiation, innovation. that's the self-help that we're flagging with the lululemon and nike of the world. ralph lauren fits into that and pvh. we're watching for this differentiation, idiosyncratic self-help and larger total addressable markets to offset what i think is a tougher macro backdrop over the next six months. >> thank you for joining us, name something names. appreciate it. from jpmorgan. another story in retail this morning, fast fashion giant shein announcing new leadership at the company. former softbank group executive marcelo, he led sprint, will serve as group vice chairman overseeing global growth. joined sheen back in january to oversee strategy for the online marketplace in latin america. shein is valued around $66 billion. claure's role will focus on expanding manufacturing and supply chain beyond klchina to

closer no shein customers. i spoke with the executive chairman last month. here's how he described the shein strategy. >> we went back to rebe invent and reimagine the supply chain by aggregate and digitize the small and medium sized factory, the moms and pops, and put them together on the same software with the transportation vendors and provide the kind of choices that the consumer wanted. what we do is we look at every single customer in every community and every country. we do business, by the way, in more than 150 countries around the world. so when we measure all these things and then we deliver all the things that, according to the choices and also giving them the prices they love, and also the quality they deserve. >> that's basically been the shein strategy. i spoke to marcelo this morning about the move, why he's deciding to do this, right.

he said he's loved the company ever since softbank and at softbank we tried to invest, didn't work out. when he left, he became an individual investor. he has $200 million of his own money in this company. which makes him i think the biggest independent investor in shein. he says as the company expands we want to be closer to our commerce, local execution of the marketplace the marketplace in places like brazil, they're closer to their customer. that's been a big part of his strategy. as far as some of the questions around shein, you know lawmakers have made a lot of noise about where the cotton comes from, for instance, and how the factories are used. he told me this morning that before he invested, visited hundreds of factories in china before coming on board. he said, there's no child labor, there's no forced labor. he said he found a lot of small and medium businesses thrilled to have a growing business.

look, i think that this just adds some legitimacy to shein at a time where they are now one of the top three most valuable startups in the world, outside of spacex and tiktok and trying -- >> and bytedance. >> tiktok, right. parent company. >> bytedance is worth $230 million. >> they're the owner of tiktok. >> yes. >> they are trying to make inroads in the u.s. they have a huge consumer market in the u.s. and they're trying to convince and explain to lawmakers they are not a chinese company, diversifying their supply chain and -- >> are they going to go public at some point soon? >> probably. why do you think they're doing all this? >> he visited hundreds of factories? hundreds? >> he visited china for two weeks. >> he can visit hundreds of factories in two visits? >> made sure it was all cool. >> was he on a drone? >> he did the due diligence. remember when i did that interview with jamie salter of

authentic brands who was partnering with shein for forever 21, he said we also did due diligence. we have a pretty high bar. that's been part of shein explanation, they're trying to make to washington. still ahead this morning, pretty bullish call on tech from citi. says the tech sector is back to the buying mode. we'll talk about what citi sees after a tough september. more on who that is in just a moment. dow shaving its losses to about 25 pointoro. ayitus. s

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as sports media leagues and teams move to monetize for gambling, so are the streamers. contessa brewer has details. >> big news. for the first time ever netflix has agreed to a casino licensing basis baseded on most watched show ever, the global blockbuster "squid game." the manufacturer is light and wonder and will show off the new slot machines at global gaming expo in las vegas next week. these are massive slot machines. 90-inch displays. players when they sit down will see games from the show. red light green light, tug of war and glass tile, without the death at the end. light and wonder will also

launch a digital game for online platforms next year. i talked with the company's ceo matt wilson about taking advantage of the international streaming hit. >> it's not just about taking ip and slapping it on a slot machine. you have to do it in an eloquent way that will draw the players in and have them experiencing something similar to the original ip in the way that was designed. >> tv branded slots aren't new. think of wheel of fortune. deals like this, and look at competitor aristocrats nfl branded slot machine that just launch pd. these could be transformative because they atrack younger adults to the slot machines where it has been the purview of older generations. slot gaming revenue makes up the biggest chunk of overall casino revenues. by the way, lots of speculation here about other streamers and whether they get into the sports betting business following that espn model, license your deal, and then see what happens with it. bill hornbuckle joins us on

"squawk on the street" next tuesday. a lot of talk about this cyberattack and the financial impact. that's sure to be a talk at the gaming conference as well. >> thank you. >> red light green light isn't the same if you don't get shot. >> no. and the glass tile, too. >> oh, yeah. i hated that episode. we end this hour with the s&p down 0.3%. nasdaq basically flat on the session. not as bad as the reaction initially to that monster jobs report. a lot more on that and all the quk t seer the next houof "sawonhetrt." again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

good friday morning. i'm sara eisen with carl quintanilla from post 9 at the new york stock exchange. citigroup saying it's time to buy the dip in tech and sell energy. the strategist behind the call joins us in a minute. taking stock of what's happened to staples. higher yields, the rise of weet loss drugs. we'll separate some winners from losers. topping the tape for us this morning, that september jobs report. stocks bouncing off the lows. the nasdaq going into positive territory and the dow climbing back from a 200-point drop. let's bring in cnbc senior markets commentator, mik