that deal. thank you very much. a fascinating conversation. sean mcnulty, michael morris. we'll have you back soon. we're going to have all these viewers back soon. >> we hope so. >> tomorrow. >> first we have to see what netflix does after the bell and tesla. >> "closing bell" starts right now. thanks so much. welcome to "closing bell." i'm scott wapner. in this make or break hour, the first moment of truth for the tech trade. tesla and netflix reporting earnings in less than one hour from now with so many rally hopes hanging on the nasdaq's most important names, and it all comes with the markets, as you know, already on edge. your scorecard with 60 minutes to go in regulation looks like that for much of this day. the major averages in the red under pressure for much of the session as all eyes turn to the bond market, the ten-year yield tops 4.9%, sitting right at that level but we have yields on the

move higher all day. a new high, an oil rally because of the war in the middle east, and it's been a lot for investors to deal with. morgan stanley suffering its worst one-day performance in many years. the stock down 7 1/3 percent after earnings. transports downright ugly. names like united airlines, jb hunt trading poorly as well. and as for tech, it's a bit of a mixed bag, yields popping, some trying to be green but most have now turned red as we begin the final stretch. it does take us to our "talk of the tape." what today's key earnings do mean for the hopes of a year end rally as it relates to tech. let's ask our panel. dan ives covers tesla. alex, big technology founder and cnbc contributor. jason snipe of odyssey is also a cnbc contributor. he owns many of the tech names including netflix. we're going to lean on jason in a moment. but, alex, i begin with you. netflix has not traded well, to

say the least. shares are down 12% in a month. what's the issue? >> i'm embarrassed because last quarter i was here and said it seemed like it was in a good place as far as valuation goes. it's subsequently dropped 26%. the big issue is the prospects of growth. i think there's been positive headlines around the fact the password sharing has happened and advertising is coming. they haven't delivered the results that make you believe they're sustainable long run. yes, password sharing has helped grow users after contraction but reports the advertising is just not going the way it hoped, a report on the information recently that said subscribers and the money coming in from advertising are about half what the company expected this year. >> people just don't want to watch netflix with ads? even if it's cheaper. >> i think they do. i'm on the ad supported tier and it's fine for me. when we go past the ad units, sometimes there's no-ad that even runs. that indicates netflix is having trouble selling the ads. it's difficult to build an

advertising operation from scratch. to me that's the problem. it's not been the demand necessarily from the consumer. >> so 6.1 is expected, is that number atries snk. >> i don't think so. i think they'll hit their sub number. for netflix it's not necessarily the short term. it's leadership telling folks we can expect that growth in the future once the tactics have run their course, and i don't think the market has seen that to this point. >> jason snipe, you've had to watch this stock go through its tribulations. in a month down almost 9% -- it's down 12% in a month. i was looking at tesla that has its own issues. how do you approach this number now coming into "overtime" tonight? >> i think alex hit the nail on the head. i think the numbers will be relatively in line. i think subs around 6 million.

they'll probably likely be around $8.5 billion worth of revenue. yes, clearly all the discussion around password sharing and the ad-supported tier we heard from them. the media conference is where you start to see the pullback when they talked about those numbers will likely be muted in this upcoming print. there's concern for me but i do think the password sharing is 100 million users they can potentially monetize going forward. the ad-supported tier, the rollout is taking longer than expected. in the coming quarter you can see growth. i think their opportunity is really internationally. that's where the membership is growing at close to 90%. i think that's where the opportunity is for netflix. >> so, dan ives, speaking of growth as it relates to tesla, which has had its own issues from a stock standpoint, they're growing. they want more growth and musk

is obviouslywilling to keep cutting prices to get there. >> the strategy has paid off. we've seen that with demand. holding up relative to the macro, there's a line in the sand investors are going in nervous that more price cuts could be on the horizon. >> you told me before you thought they were done. they're obviously not done. >> what i think is key, there could be some price cuts but the vast majority in the rear-view mirror and we believe margins now trough out this quarter going into q4. you navigate through this trial for margins. they continue to own the ev market, and that story in terms of going after demand and volumes has been the right poker move, in our opinion. >> what makes you believe they're done with the price cuts as they are laser focused, musk

is, on competition, they have to be done with the price cuts in order to hold up the margins you say will even though they've narrowed as a result of everything they've done? >> it's been a tough few quarters. i think that's been the right moves in terms of going for volumes in this game of thrones that's going on. it's the refresh. what we see in china in terms of what i believe is further and further upstream. though demand when it comes to ev, it continues to be tesla that owns the market. with the uaw strike, that's been a gut punch. this is a time to go on the offensive not defensive. >> expectations for tesla, are they low given what's happened with the stock price? by the way, bespoke was talking

earlier this is the quarter where the results give the stock the biggest boost historically rather than any other. i think it's 4% on earnings day. what do you think? >> a lot of numbers across the board, you've seen the band-aid ripped off, the big focus here, scott, gross martin credit, can it be above 17% is sort of the whisper number. the most important thing, the drum roll, will musk commit to the vast majority of margins. take a step back, still talking 35% type of growth from an auto delivery expected. >> is netflix at risk? as you said, it will take a bit of a while to build it out. who knowwhat is sort of economy

we're going to end up with in the next 6 to 12 months. what about near term? >> near term revenue growth is at stake. i would be concerned. it's a standard ad unit, the tv ads. so why is there trouble filling the spot? showing wall street the money that they need to be bringing in. >> we had that sound effect on the screen because recession lows for all three of the majors almost a 300-point decline for the dow jones industrial average. what other analysts are suggesting, that company should just start spending more as legacy media is having its challenges.

people like rich green field say take advantage and spend more. would you tolerate that as an investor? >> i'll be looking for free cash flow and have over $3 billion and they're better positioned than the other streamers in the marketplace. they have a really strong library as it stands and i think they have better flexibility than the others. it could drive revenue growth. >> dan ives, it's all about targets that you set. you tell the street one thing. tesla's numbers, are they going to get it? >> that is hittable. that's a number they'll be able

to hit at web pricing in terms of the margins. >> bigger picture, the other stock on my list is apple. a stock everybody knows how much you like it. the chart, though, doesn't look that good. how do you assess what's happening here? >> i focus on our asia supply chain checks. no cuts to demand when it comes from iphone 15. i think we come out in a few weeks when apple reports, i think cook instead of being conservative will talk about the demand story that continues to play out not just in the u.s. but in china. and, in my opinion, this is a name we've used to table pound not the time to back out in terms of what we're seeing in an environment where investors have white knuckles going into this quarter. >> some of the data coming out of china suggests there's a slowdown there and that huawei

has eaten into market share. those are real numbers. i feel like you're dismissive of the story in china which is 20% of revenues. >> for huawei, there's no doubt from a competition perspective in terms of what i go after. i go after the 100 million iphones. the demand in china and globally -- >> said to be slower after getting out of the gates fast. uptake of the new iphone is slowing down or slower than expected or disappointing, is that not in your orbit at all? >> we disagree in terms of asps that continue to increase almost 100 hours to the pro max.

i think we're looking at 225 units. i think yet again the bears, and they take a shot every foo years. i think this is wrong. >> is there a story here? >> i do think there's a story. a few months ago there was a story where the chinese government was telling officials not to bring iphones into the office, and a lot of people shrugged that off. that was a signal if you have national pride you will not buy an iphone. and i think that we see huawei taking over. some of that might be trickling in. if you're an apple shareholder i think it's a moment to be nervous. >> how do you respond to that, dan ives? >> we're talking 2% to 3% of units that potentially could be impa impacted the bark is worse than

the bite. we'll be in asia doing more and more checks. so far from a demand story iphone 15, no cuts in terms of the supply chain is the most important thing, scott, i look at. >> when does the revenue growth story reverse itself? one of the more dominating narratives that's emerged. >> when we go into december and march that's where that starts to uptick not just on services but units but the asp, which alex knows well is an important thing that's happening here. i point back to 240 million iphones have not been upgraded in four plus years. that's something the street is missing. >> assuming people have money left after spending on travel upon travel upon hotels, cruises and everything else.

jason snipe, how do you feel about the biggest and most important stock in the market which over a week is down a couple of percentage points and as some have suggested doesn't look great? >> absolutely. the challenge is the multiple. when you have an anemic revenue growth and a multiple, a forward multiple, of 29 times, that becomes challenging when you look at the greater tech spectrum and other places you can own stock. as i look at the buyer here, i agree. it's very close to the 200 day, where it's pricing now. as well as what's going on with the iphone 15 upgrade cycle. it's not looking as rosy as we expected, maybe a quarter or two ago. >> i said at the outset is the first moment of truth for

important tech. netflix is important. there's obviously a size advantage for tesla in terms of movement and markets because of how it's market cap weighted. what about the space of mega cap overall? >> i think the prints later on this afternoon will be important and then we turn to next week when we have amazon and meta and microsoft. the price action hasn't been great over the last few weeks. when i think about the tech space and this year and what has gone on, i think about the catch-up trade for the fourth quarter, what really resonates with me is predictability of earnings. within the mega cap tech spectrum is going to be strong. i think that's why folks will turn there and feel good about them going forward. >> you talk, dan ives, what these companies are trying to

do, the key perhaps for their next leg of growth for tesla. the batteries, they continue to sign more deals with more major automakers around that end. thinking about ai as well, autonomous driving, where are we? i want a reality check from you. i don't want musk talk, i want ives talk on where it is truly going, where it is, and what it means for the ai story that has been dominant. >> they've turned the attorney in terms of issues they've had. for them to make strides, i do believe the story for tesla is a huge part. in terms of the earnings season, you talk about reality versus hype, i think the big theme,

we'll see it next week when it comes to microsoft, amazon, google. i think cloud, you'll see an a.m. celebration. the ai monetization, i think now the rest of tech starts to participate in the party that will be important in terms of the earnings season. >> 10, 11 months, alex, into the ai hype machine, did we overdo it at the beginning? are we just right? where do you think we are? >> i think we overdid it. there was belief this original version of chat gpt and the open ai gpt three and four models are the step to getting us there. we've seen a lot of building, chatbots, something used for law, something used for medicine, something for students, plenty of these character chatbots from a company like meta. to match the hype, unlike the other big trends in tech that

haven't amounted to anything, i see tech companies build with this stuff, deliver actual benefits to their customers, and so this is real and will take more time to ramp up. >> which leads me back to jason snipe. nvidia is where many bets have been placed, the stock is down 10% in a week alone. you have these new export bans weighing on the stock. some of the notes taking price targets down. it seems to be no margin of error for nvidia relative to where the story has gotten that stock to. >> i think clearly the expert bans are weighing on the stock. this week down 10%. i think going forward the margin for error has obviously decreased. i think what will be important, guess what, nvidia has delivered

and that's why the multiple is cheater today than it was six months ago. even with all the growth it's had this year. for me i do think they will deliver. the demand for the gpu chips is extremely valuable and i think that will play through when they report. the bar continues to set higher. >> all right. we'll leave it there. we've covered a lot of ground. jason, thank you, and the guys here, dan and alex. we'll see what happens in "overtime" and in subsequent days we may lean on you. will big tech earnings fuel a year-end rally? you can head to @cnbcclosingbell on x. a check on top stocks to watch as we head into the close. kristina partsinevelos is back with us today. kristina? spirit aerosystems is soaring on a deal with boeing that will see higher prices paid to spirit on some parts and that

should help some of the recent cash flow issues related to the fuselage problems. shares, though, are up 25%, almost 25% to date, but down 25% just over the last three months. switching gears, roku, deep in the red right now, as wells fargo analysts expect softness in the streaming player's fourth quarter reiterating equal rating and increasing to $70 a share. right now trading down 8%. and the reason for this is citing a weak ad environment. >> we're just getting started here on "closing bell." up next, stocks are lower. the dow down more than 250. liz young is back and is breaking down how she's navigating the season, keeping eyes on the fed, jay powell speaks tomorrow. there's a lot to consider which is why she joins me at post 9 just after this break. you're watching "closing bell" on cnbc.

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yields? >> as it should be. fresh highs, mortgage rates that will creep closer to 8%, fresh highs in the two year and then the fed will be done. they may not have to hike rates because the that is not bullish on the short end of the curve. if it was grinding lower, maybe a different story. that's not the case. >> most of the fed speak of late has been leaning towards we don't have to do any more because the bond market has done the work for us. there was perceived to be a dovish pivot, if you will. >> sure. >> maybe waller was on those lines. the fed chair himself talks tomorrow and those are his last comments before the quiet period before the meeting. how do you factor all that in?

what if the fed is done despite rates are where they are? >> i'll be at that presentation tomorrow so i'm very interested in hearing what he has to say. i factor it all in in the sense i don't know if it matters if they're done or not. the damage has been done. i think we're seeing it in the spreads, if you look at a time the ten year has ridden. i think it's start to go come i do think the last couple hikes have beenmore about the narrative than the actual move itself. they can be done here but the tracks are starting to form. >> the beige book was out at 2:00 this afternoon.

the data doesn't necessarily agree with you. the anecdotes are concerning. going with the data more than the anecdotes, how do you factor that in? ss yet.asn't shown all of the ththe labor market, consumer spending, consumer spending are closely tied to one another. consumers will spend as long as they're employed. the anecdotes are important. there's a lot of pressure in this earnings season and probably in the fourth quarter earnings because expectations are so high. nobody wants to be the first to come out. >> i would say they're kind of low. it will not take much to get over what feels like a

reasonably low bar. right now they feel kind of low. >> we're hoping for a 1% positive growth number up from a negative 0.8 number. i'm talking more about fourth quarter and into 2024. the commentary is about that forward looking period. if they say we might not try to get there, right now than surprise them later, if we start to hear more and more about that it will be hard for markets to get to a place where the valuations make sense, priced for a good period right now. and the equity risk premium, you're not getting paid to take that risk. >> the nasdaq is down, it's the

hardest hit. some say the apple chart doesn't look great. it really is the first moment of truth for this group of stocks. will it be enough to overcome the stuff you said and carry the market higher? >> i don't think it will be enough to cancel out everything out there as a headwind. we've had some periods where tech goes up, yields go up and that doesn't make a lot of sense from a long duration stock perspective. expectations are probably okay. they might meet them. i think we're in a period where stocks will get punished for missing expectations. >> why isn't it enough in your mind if it was before?

rates were elevated really long duration growth got pounded. they offer you more than those stocks do, profitability. a lot of cash. unreliant on debt markets. >> people are not willing to pay. the big tech stocks have been utility players. yields go up, they're supposed to do well. the market goes up, right, not everything can work and we're getting to the crux of that decision factor will we contract in the economy, if we do contract, if we do see something that looks like a recession, these valuations are overly extended for where the ten year

is. >> the market has been resilient to this point since the whole thing start ed. oil is up today. crude is at 87, how should we be thinking about the new risk? >> geo politics are always a risk that always boils in the background. i don't think the market has been entirely resilient if you look at something like gold. gold has seen a lot of upside. and i don't think that's a random coincidence. so far that risk has not pled into u.s. equity markets. there could be conditioning by investors if it does and creates and wreaks havoc the fed will save it. and they certainly cannot do it

at a time it's not safe to do it at a time inflation is style too high. i think we're running into maybe something where the expectation is a savior and we won't have the savior. >> some believe the fed can save you from every risk. >> right. >> at some point they can't. i'll own that one. >> liz young, thank you very much. liz, of course, with sofi. up next, the fed is in focus. jay powell, as i said, set to speak before the economic club of new york tomorrow just ahead of the flagout period. what is he going to say and how will it impact your money and thmae rkets? we'll ask steve liesman next.

welcome back to "closing bell." shares of morgan stanley sinking. a tough day, leslie, one of the worst in years for this stock.

a tough day in about three years, on pace for its worst day since june of 2020. shares under pressure amid a clear continued slump in investment banking and decline in net interest income, and net new assets that were about 45% below the same quarter last year. a big culprit spanning most of morgan stanley's businesses is higher for longer rates that is causing clients to punt large transaction, muted activity creates a ceiling to the firm's fees they generate from advising clients on those transactions, and then it's changing the deposit mix for wealth management customers who may offer cash free securities which are yielding much more than they were even at the start of the quarter. so a turnaround depends on the macro and chairman and ceo james gorman spoke about the recent surge in rates saying he thinks the fed will do one more hike by the end of the year and thinks the fed will cut some time after

2024, but in about 12 months, that's when he thinks the game will really start to change, maybe will see a pickup in m&a activity, any of the cash sorting will be largely behind us, so we'll see some time in 2024 if we see a reversal, scott. >> leslie, thank you. leslie picker. fed chair powell set to speak tomorrow before the economic club of new york. here to discuss what to expect is our senior economics correspondent, steve liesman. what do you expect based on what some of the other fed speakers have been saying? >> well, we've been putting this all together, scott. i expect him to use the time the market is giving him. the first thing i did when lisa asked me to come on and talk about this story was to say, well, what has happened to the data since powell last spoke? i'm calling this the unofficial powell data dashboard.

what you'll see is almost all the key economic indicators have trended up. there's that strong jobs report, the strong retail sales report just last week and the gdp now from the atlanta fed has been trending up. what's happened to the inflation numbers a little more mixed, scott. headline ppi trending up. core ppi down. core cpi was unchanged and went down. so i think he will look at this and will say, you know what, this is not the time to make a big decision. all the fed speakers so far, scott, have really not pushed back much on the market pricing. we do divide it into three camps here. first we have done or near done. we have a bunch of guys there. patient or noncommitted. and nobody is solidly in one camp except the may likely go

further, they seem to be suggesting that a bit right there. i think powell takes the time. the market 50/50 for a january hike. >> so the data has been telling one story. as you mentioned i think perfectly earlier today when the beige book came out there's all these anecdotes. i believe a second straight month of beige book that you've had all of these anecdotes suggesting slowdown here, slowdown there, uneven here. and yet the data hasn't been telling the same story. what does the fed do with that? >> the anecdote gives you time, scott, to let it play out, and we saw barkin, the richmond fed president. he said i know the data is strong, but what i'm hearing is not strong. waller, the fed governor, today similar kind of take on it.

and, of course, the beige book today as you suggest was also very much sort of leaning towards weakness or at least not much growth. not as strong as the gdp number we have. so what happens? that anecdote has to show up into the data. if it does, then the fed was right to wait. if it doesn't and that anecdote is just, well, we're on the wrong side of the story and the data continues to be strong, i don't think you can rule out another rate hike here, scott. >> another question, and it has to be quick, what's happening in the middle east and that risk that poses to the fed's own outlook on a number of fronts and how that might impact policy decisions? >> i think it's another reason for the fed to be patient here and i think when i look at that full screen we put up where the fed is, scott, i think the center of the board is with patience right now, and i think powell goes with that. we don't know how this breaks. it's a different world on oil.

essentially it could detract from business investment and capital spending. it could detract from hiring, create weakness and inflation. a potential stagflationary impact from higher oil prices, but i don't think the fed will react to just how the market immediately reacts to what's happened recently. again, i hate to keep hammering it. the fed will take the time the market is giving it. >> it has the time on its side because the bond market has done a lot of its work for it. >> precisely. great point, scott. >> that's steve liesman. up next, tracking the biggest movers. kristina partsinevelos is standing by with that. kristina? >> no, weight loss drugs won't kill glucose monitoring devices. and a key component of electric vehicle batteries may be an oversupply. i'll have the details after this short break.

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about 15 to go before the closing bell. we're at session lows for the dow which is declining as we speak near 370 points, even more than that. you can see activity. kristina partsinevelos looking at the key stocks today as we approach the end of the trading session before overtime. >> abbott is climbing right now,

higher following an earnings beat. the medical device maker also says the market is overestimating the impact of new weight loss drugs and says its customers still use its devices in tandem with those meds. still down 5%. in the next hour a cnbc exclusive, robert ford. lithium stocks getting slammed today as bank of america says supply is exceeding demand. they expect the market to be oversupplied for the next two years which could pressure margins and earnings. they reiterate add buy rating on livent. that's not helping the stock as the whole group trades lower. 9%, 7%, 6% lower across the board. scott? >> kristina, thank you. kristina partsinevelos. last chance to weigh in on our "question of the day." will big tech earnings fuel a year-end rally? the results are coming up just after this break.

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let's get the results of our "question of the day." will the majority of you said, yes, it will. 55%. up next, the countdown is on. netflix and tesla reporting results in a few minutes in "ot." we'll take you through the key themes and mrietcs when we take you inside "the market zone." for cyberattacks. but the same ai-powered security that protects all of google

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and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity. e*trade from morgan stanley we're now in the "closing bell" "market zone." mike santoli to break down the crucial moments, plus two big earnings releases out in "overtime" toenlt. phil lebeau and what to expect from tesla and julia boorstin on netflix as well. mike santoli, do you want to opine on, here it is, the start of tech, important tech. >> yeah. well, it is the start of important tech. what traders might wish for is the ability to focus on those numbers as opposed to trying to

worry about getting the quick silver moves in the bond market, this morning 10:30 a.m. eastern time, 30-year yield ticks up, the high on the day, down 1% since then. it shows you the very short-term seesaw action that we have with stocks versus bonds. on the other hand we were at this level in the s&p at last week's lows from friday, 4311 or something, about this level, september 22nd, and the ten year was under 4.5. there's a way for the market to try and establish a peace treaty on a short-term basis where yields are unless there seems to be this volatility. financial accidents waiting to happen. that's the story on the afternoon. the s&p is only down a quarter

percent. the vix is trading above december. you're starting to see the market tense up but it doesn't know why. >> let's see what happens in overtime if it helps us feel something in either direction. and, phil, to you first with what tesla has on tap. >> scott, aside from the top and bottom line, it's the numbers within the numbers, i know people are tired of hearing about gross auto margins. three things to look for in the earnings report. 17.6 on gross auto margins excluding the credits. if it's dramatically lower than that it raises the question how much lower will margins go in the future. and what do we hear about the cyber truck, remember the

conference call starts at 5:30 p.m. eastern time, we expect to hear from elon musk at that time, and when he's on the call the focus for analysts will be what is the chinese market doing right now. what does elon musk say about that? other questions in terms of development down in mexico. later when we get the conference call. >> julia boorstin, we'll talk to you when netflix reports, what's the key theme we need to focus on? >> netflix cracked down on password sharing. now we'll see if the paid sharing strategy they have to get free loaders to start paying is working. the street's projection of 5.5 million subscribers is the number to watch, down slightly from the subscriber additions. 50% of analysts now rating the

stock a hold or a sell. downgrading the stock to pure perform writing, quote, while netflix is on course to build a massive advertising business for the long term, we have rising concern about 2024-'25 growth forecasts. those issues around advertising, et cetera, and any commentary on the strike expanding video games and even the financial opportunity, those are all sure to be in focus. scott? >> julia, thank you. we'll see you in a bit. two-minute warning. you heard the sound effect. back to mike, banks haven't traded well today. morgan stanley having its worst day in a few years. you can find it in places. >> today was a day when there was questioning about the strength of the cycle. transports, both trucking and airlines as well as broader industrials.

it's been this way for a while. the economy looks strong. the fed is willing to give it a pass. a lot of things are lining up to say we should be in a better period here but we keep testing the economy at higher rates. we didn't really do okay but didn't break anything. it's always like you can't really rest. able to absorb this much, expectations have come in a fair bit. none of them look cheap. tesla is an $800 billion market cap company. it's not as if it makes sense for the size of the business today but expectations have been down scaled. we'll see if that pays off. in general stocks have not traded really great off earnings. that doesn't mean the earnings aren't there moving in the right direction. >> this is the one earnings report in the one quarter more

than most where tesla tends to move the most. we'll see. we're going to see shortly because as we wind down here the dow off by more than 300, so it's been that kind of day across the board. it's all going to get real in "overtime" with morgan and jon. i'll send it over to them right now. some buying into the close but nowhere near enough to make up for the ground loss, the scorecard on wall street. welcome to "closing bell overtime." i'm jon fortt with morgan brennan. >> one of the most exciting afternoons headlined by results from tesla, netflix, and in just a few moments numbers from las vegas sands, lam research, zions bankcorp. >> an exclusive interview of abbott which reported before the bell. we will ask about the impact of the weight loss drug craze on th