in the treasury complex with yiel yields. the ten-year yields 4.39%. you have the two-year at 5.218%. gentlemen, it's been a fun and interesting morning. >> as always. >> bostic tomorrow and the second part of the all american economics. >> and we're going to watch what powell has to say at noon. that does it for us today. join us tomorrow. right now, it's time for "squawk on the street." good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber, sara eisen at post nine of the new york stock exchange. cramer has the morning off. premarket has erased some early morning losses, even as the ten-year got awfully close to five. big day for fed speak. seven speakers, including powell, at noon eastern and tons of earnings movers. our road map begins with powell, of course, u.s. government bonds gaining for a fourth day. the ten-year nearing 5% as investors await tea leaves from

the fed chair today. plus we have that earnings parade. netflix surges on sub gains. tesla, that stock is down. at&t, blackstone, american airlines, they are all names that we will be telling you all about. and the ozempic effect. nestle is looking to offset any future sales impact, now dropping products to accompany weight loss drugs. let's begin with tesla. among the biggest s&p laggards in the premarket, the company did post a quarterly miss, including weaker than expected profit margins due to price cuts. cybertruck was in focus. this is elon musk talking about it on last night's earnings call. >> i just want to temper expectations for cybertruck. it's a great product, but financially, it will take, i don't know, a year to 18 months before it is a significant positive capture contributor. >> of course, musk did comment on all kinds of things beyond

the company itself. rates, of course. macro, work-from-home, sort of echoing themes he's had before, david. >> i remember during our interview in may, he went on quite a bit about work from home, really criticizing those who were doing it, but i think, obviously, for the stock itself, and for investors here, it's the margins. it's the impact of the price cuts. it's concern that this will continue for quite some time. and frankly, it's also the tone that musk adopted on the call itself. you know, we know, with musk, there can be ups and downs. and i would also just add that unlike so many other companies where there are armies of pr people and the cfo and the head of ir and on and on who try to craft a narrative around a call, musk has none of that. he has a cfo, don't get me wrong, but they've got none of that. it's just musk, and you're going to get what you get, sara, and in this case, he did seem very focused, as he has been in the

past, on higher rates and what that's doing to affordability. >> it's worked for him in the past, not having the narrative teams structuring the communications. >> it very much has. >> you mentioned the automotive gross margins. it's worth repeating the number, 16.3 was a surprise. the analysts were expecting 17.7, and even that is lower, so those price cuts are weighing, and i think a lot of people were looking for him on the call to talk about the fact that they bottomed or troughed or there's some visibility and we just didn't get that. i think the most expensive model x has seen price cuts up to 30%, so that's going to weigh on margins. the operating margin, down in the 7% range. we're getting closer to normal automakers. it's not being valued like a normal auto maker, but the margins, which was the edge for tesla, for so long, clearly in focus. i thought it was interesting, also, you know, in his colorful way, we dug our own grave on the cybertruck, because there's been a lot of excitement on that too, and it sounds like there are a ton of orders still. i think a million. >> they've got a million orders. >> but it's going to take a while to get there. >> the complexity of production,

and this, in part -- and musk will own this -- in part because of what he wanted is so complex that getting from a prototype to volume production is just a very difficult thing. and for those, for example, who have read isaacson's book on musk, there's a lot about sort of getting any number of tesla models to that production number. it's hell. it's why he likes to have the production team, the engineers, right near the assembly line so you can actually understand when you're making changes, but in this case, a lot of it was his own desires that have made just the level of complexity here, it's going to take quite a while, and that's why he used that "digging his own grave" analogy and saying it's just going to take a long time even though demand is not the issue, carl. >> bernstein has long had an underperform and a $150 target because their view in the end is that automakers inevitably start getting low multiples. it's hard to have margin prowess if you're a volume player.

the closing low for august was $215, and i think august intraday low was $212. we'll see if it holds there. lot of those people who had thought of it as a car company rather than a tech company today are sowing some oats this morning. >> they are. the other side of the equation is those who believe that fsd is -- i mean, it's been coming for so long. full driving, full autonomous driving. and it will be here. and the robo taxi won't be far behind, and the margins are therefore going to be far larger, and what they're able to do in a.i., both as part of the car but separately as well, is going to be quite significant. and on from there. not to mention the optimus robot and what that could mean. you're not going to eliminate those, carl, who i think believe there is a very strong future for this company outside of simple car production. but when it comes to it today, certainly you are seeing some moderation of expectations. >> in fact, rbc capital markets even said, you know, the core investment thesis or part of it

here is on full self-driving and with these lower prices, that could lead to higher adoption and profitability ultimately on full self-driving. i think the other reassuring point for the bulls on tesla is that they reaffirm the 1.8 million vehicles deliveries for this year, which was kind of a question. they're going to have to ramp it up in the fourth quarter to get there, but that does offer a little bit of consolation for those that we're worried about, production and factory delays and some of the issues he talked about. the other macro point that people took away, sort of the -- not as enthusiastic about the economy, people have been excited about the mexico factory, which he said at the end, they weren't necessarily going to go full tilt, i think, were the elon musk words, because of what's happening in the global economy right now. >> he said, even in rough seas, even the best ships have some trouble. interesting too. we have been watching the shutdowns, which is kind of like trying to paint your living room while you're living in it, and that's one reason why you can't be running full tilt on

deliveries and production all the time if you're thinking about the long-term. >> yeah. i mean, that said, there is still that question in terms of their ability to compete with detroit, so to speak, with gm and ford in particular. given, sara, their margins and ev are not there to begin with. and with the impact of the strike -- >> i was going to say, they're about to get crushed by labor. >> it becomes an even bigger question as to whether, yes, you may question the profitability in terms of tesla to some extent as their margins decline a bit because of price cuts, but what's their competition going to look like? >> that's the problem. mark fields was on, the former ford ceo, last week, and he was saying, the longer this goes on and the more that the automakers have to give when it comes to these increases on pay, the less competitive these companies are going to be with not just the asian automakers but the teslas and the rivians of the world who don't have to deal with unions. huge advantage. but maybe that's already

reflected in the stock. it was up more than 100% going into this report. it's only given back about 7% today in that context. still having a great year. >> it is. all the macro stuff must have made you very happy, sara, when you were listening, the impact to rates and everything else, stormy times and ships. >> it's great to hear it from companies, because that's like a realtime indicator of what's happening, especially with this strange economic data we have been getting, the acceleration that we have seen from the consumer in retail sales or the gdp above 5% or the jobs -- like, you're just not hearing that. you're not hearing it from the banks. you're not hearing it from the teslas of the world. they're still talking about an economy that's slowing, rates that are rising, and a consumer that's feeling a lot differently. so, it is very important to hear some of this color. >> yeah. again, musk, i can't emphasize enough, that the vast majority of people buying a car is about the monthly payment. speaking of monthly payments, what you're going to pay for netflix is probably going to go up, but it is, this

morning, the biggest premarket gainer on both the s&p 500 and the nasdaq. the streaming service added about 9 million subscribers in the third quarter. that was far above what had been expected. it did post earnings above most analyst estimates. the company has been helped by that crackdown on password sharing. netflix also announced plans to hike prices. that's a $3 a month increase for its premium ad-free service, basically coming in at $23 a month soon. you can see netflix shares are surging although, carl, to be fair, when you go back in the even that far, they haven't -- they were at levels that we are now going to be inhabiting again not that long ago because it had been suffering of late in terms of at least concerns overall about sub growth and all the other headwinds. >> yeah, couple of upgrades. key goes to overweight. truist goes to $465 as they up to buy.

the sub adds were the best since covid began, bernstein points out. very impressive especially since it wasn't exactly their strongest slate on display during the quarter. the debate will be whether or not this new round of sub adds is pulling forward the future or if maybe the market for paid share is bigger than people think. >> what was even more impressive than that almost 9 million sub adds, they said next quarter they're going to see a similar amount of subscriber adds, plus or minus a million. i think that was very surprising. i was matching mark mahaney yesterday on "closing bell," and he was saying that was like a wow, because it's one thing to get nine manager subscribers on the password sharing, but the fact that they think that's repeatable -- i do think the question from there is, how much longer? so, people aren't canceling, and they are signing up for this family plan and these new plans. however, how much more juice can they get out of that? they were also pretty bullish on the ad tier, up 70%, of course,

off nothing. >> they haven't seen the impact of that as yet. that's still to come. >> i love the netflix investor letter, because you get so much color, and they mentioned some of the examples. frito-lay's smart food, for instance, advertising and putting something out on one of the netflix shows. they were talking about, of course, i noted the t-mobile sponsoring this f-1 program they're going to live stream out of the vegas race with the golf players. trying to sort of communicate to investors that they're really tailoring these experiences for brands and these opportunities for brands in a valuable way. >> there is also a question, carl, as to whether you'll hit some sort of a vacuum in terms of new content, as a result, again of the writers strike, which has been resolved but also the actors strike, which has not, and whether that decrease in production is potentially going to bring people at some point to say, i don't need to watch this month. >> that said, "wednesday" is coming back.

squid game is coming back. some of their tent pole franchises you'll see. >> "squid games" is coming back? i didn't know that. >> yeah. and "wednesday." "stranger" maybe one more time. >> they've been working on that for years. >> what's with everybody watching "suits"? they mentioned it's available on all these platforms, it's an old show, is it a meghan markle thing? >> they do have an ability to revitalize franchises that did not do well in other places or at least have been forgotten, even on other streamers. they'll take band of brothers from hbo max, 20-something-year-old show and then people will watch it like i am. >> it's like leftovers. sometimes they taste good. one question getting tossed around this morning is whether or not -- if paid share is working so well for them, why shouldn't it work well for the likes of disney, for example? >> is there read-through to disney, which is sort of the key number two player and/or warner bros. discovery with its max offering and on from there.

is it applicable across streaming services, the strength we saw here? that opportunity appear to be the way the market's taking it this morning, carl, at this point. their content budget came down a bit. >> it raised cash flow. >> that helped. >> free cash flow numbers. >> but next year, it's going to be going back up. >> it's just because of the strike they raised the free cash flow. >> you're going to see a benefit to that for warner bros. discovery for that as well but over time, it evens out. >> netflix set to open sharply higher here. meantime, president biden has returned from his trip to israel where he expressed support for that country and its war against hamas. hescheduled to deliver a primetime address from the oval office tonight. nbc's jay gray in tel aviv with the latest for us. jay, good morning. >> yeah, good morning, sara. and american public will hear from the president tonight, but we're hearing from israel on this already. the headline here saying, "biden dictates new rules of the game."

a lot of that surrounding his push to get humanitarian aid into those in gaza who desperately need it right now. we learned overnight that israel and egypt have agreed to allow some of that aid to cross at the rafah border crossing between gaza and egypt. can't start today. they are repairing roads in the area that were damaged during bombing runs by israeli fighter jets, but they believe they can start some of the aid, food, water, and medicine, moving into the area as early as tomorrow. they haven't had a delivery for the better part of two weeks, and there are a lot of people, two million or so, caught in the cross-fire there who desperately need sot help. what we don't know is the duration, how long this is going to last as far as bringing this help in. but when you look at the situation as it's unfolding, you would think they may need it for a while, because when you go to the opposite end of all this, we're seeing an increase in the number of skirmishes between hezbollah, now, and israeli

fighters. we know today there have already been anti-tank missiles launched toward a kibbutz in what is considered the security fence area of that border. the idf retaliating with artillery fire and they have been going back and forth for several days now, the israeli forces moving more manpower, more troops into that region. and when you consider the atmosphere across the area right now with protests, thousands spilling into the streets, it seems like it's really ramped up the concern about this moving to perhaps a second front in this war and the war spreading throughout the region. very concerning, very tense right now. >> part of the story in this country has been the information we now have regarding the hospital attack. i'm just wondering how much of the data that we've gotten in the last 24 hours is resonating with the people where you are right now. >> yeah, and i think it's a

mixed bag, carl, to be real frank. i think there are a lot of people who have made up their mind already that this was something carried out by israel and that this is a partner of israel stepping to their defense. there are a lot of people, especially those angry enough to move out into the streets to protest around the embassies that says this is israel and it doesn't matter what you show me, if that makes any sense. so, that's something, i think, that's going to be a long play, that is going to continue to have to show the evidence and data involved in this if they plan to win anyone over as far as that's concerned. but in some instances, i have to be real honest, carl, i don't think it's making a difference. >> jay, thanks for that. we'll talk soon. jay gray joining us this morning, giving us an update on all things israel and gaza. when we come back, we'll watch this rise in yields ahead of powell today, speaking at noon eastern today in new york, along with six other fed speakers throughout the course of the day and the evening. take a look at the premarket.

it was negative for much of the morning. we'll get to some other movers, including unp and at&t, discover, taiwan semi, and some others when we come back.

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with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network. futures pretty stable here after yesterday's selloff on wall street. worst day since the third of the month. fed chair powell is due to speak at the economic club of new york today at noon easterntime. yields continue to rise. the ten-year at 2007 highs,

marching toward 5%. got to 4.98% today. general take, sara, is that he acknowledges the data's been strong but also acknowledges that long-term yields sort of reflect that. >> yeah, and he could overweight either one of those points, and that would be interpreted as hawkish or dovish. will he be more concerned that the data has come in strong and there are signs that inflation could stick around or even flare back up, or will he echo some of his colleagues and i would say most of his colleagues lately, in saying we've done a lot, we're going to watch, we're going to stay on top of inflation, but at the same time, we've seen this move up in long-term rates, which also helps our cause, and we're willing to wait it out a little bit. that's what people think he's going to say because that's what other -- even hawks have said lately. i mean, i think fed governor waller is always sort of a thought leader on this and was early to go hawkish and even he is in the wait-and-see mode right now. >> yesterday pointed out that

three-month core pce, running about 2%. we did have jobless claims this morning. lowest since january on an initial basis, but the continuing was the highest since july. so, you could read it a couple ways. >> it's a noisy number, back and forth, but the fact that it was under 200,000 just continues to show that we're not seeing a lot of layoffs in this economy and that the job market remains strong, which explains a lot of the consumer strength as well, even in the face of excess savings dwindling and even in the face of student lone payments getting resumed and even in the face of rising rates. the 30-year fixed mortgage rate, 8%. >> highest it's been in 23 years or more. >> and we're in this crazy environment where you should see prices tank on the back of that for housing, but it's just not happening because there aren't enough of them. >> there's no inventory. >> so people are just stagnant right now. we are getting this accelerating economic data, and i mentioned it's not really being matched by the tone on, say, the tesla earnings call or the banks call.

beige book two, you know i love the beige book. it is so poorly branded and named because it's the most colorful economic report that we get. here's a quote from beige book summing up all the districts around the country and what they're saying. they say, "expectations for future growth mostly unchanged. two districts saw outlooks deteriorate. consumer spending was seen as flat to down slightly amid continued reports of moderate price growth." doesn't necessarily match up with 5.4% gdp growth and nominal growth of more than 7%. so, fed is getting kind of a mixed picture right now anddoes have ammunition to stay pat. i think that's the key takeaway. >> we'll find out what happens at noon. going to be interesting. we'll take a break here, get to some of the other movers this morning, including at&t jumping on this earnings beat and this free cash flow guidance. futures here hanging on to gains this morning after mostly red arrows earlier today. rur "squawk on the stetwh re" en re" en weetn.

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decent number of gainers this morning, a lot of them on earnings. that's going to be the case for netflix, at&t, las vegas sands, unp. the only one on there that's not an earnings call is best buy. that's out of goldman today as they upgrade to buy. they go from 79 to 85. opening bell coming up in just under five minutes.

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. you saw the movers there in the s&p, at&t right near the top. it's going to have a good morning, at least at the open, it would seem, up perhaps as much as 6.8% when we start trading a minute and a half from now. just a good quarter. good quarter when it came to postpaid net adds, 468,000.

that was ahead of most analyst estimates. consumer wire rline, they are vy focused on fiber, broadband, doing that overbuild. they added 296,000 subscribers. that was also better. and then they increased free cash flow guidance. it had been 16 billion. now they say about 16.5 billion for the year. but investors will take it. it's a bit better, and it is seen as a positive. you know, always difficult to understand exactly what's going on under the surface, but it may be as simple as they're winning sort of on the local level. they are, you know, empowering their store managers and the like and taking it to -- this is what they would say -- the competition, mainly verizon and t-mobile in terms of just gaining more share. and so you see, guys, the stock is responding quite positively this morning. there had been concerns in earlier quarters about free cash flow. in many ways, those seem to be answered, at least at this point.

>> we'll talk a little more telecom in a second here. there's a ton of news in that sector this morning. let's get the opening bell and the cnbc realtime exchange. at the big board, executives and guests of hewlett packard enterprise. at the nasdaq, it's american battery technology company. they're focused on primary battery manufacturing and secondary lithium ion battery recycling. we get some green arrows at the open. david, you mentioned "t." hard not to pair it with nokia and the miss there and the 14,000 job cuts they're planning because of weakness in 5g in the united states. and then, huawei selling 1.6 million of their new handset in china in six weeks. we have had tim cook in china last couple of days trying to bolster demand for apple products in that country. >> and we've gotten, as we always do when it comes to

apple, already different stories in terms of weakness or perhaps not as much weakness. by the way, going back to at&t, nothing there that would indicate sort of weakness in terms of upgrades and the sell through of the 15. it appears to be sort of business as usual. apple shares are -- well, there's at&t up 8%. remember, that dividend yield there too has been so dramatically high at the 7.7% range. actually, excuse me, 7.1% now, but obviously, that's because of an almost 8.5% increase or more in the stock price. >> it's just interesting to see we're up again now 4.94% on the ten-year yield, continues to march straight up. and today, it doesn't appear to be unnerving the tech sector as much because we're opening here with those communication services, information technology at the top of the market. the nasdaq's higher by almost 0.5%. could be a reversal from what we saw yesterday, which was more than 1% declines across the board, but boy, do these yields

continue to march. and the other difference is oil is a little bit weaker after a big jump yesterday. >> oil's being eased by news that the u.s. is finally getting started. the suspension of sanctions on venezuela in return for some guarantees that their elections process gets more democratic. but if it were to work out, you'd be looking at, according to some reports today, of an increase in 200,000 barrels a day in venezuela. that's a kwaquarter of their production, and might move the needle a little bit, marginally, in terms of non-opec supply. >> at the same time, news out of the middle east has not gotten worse, i guess you could say. we haven't seen a ground invasion yet. we haven't seen iran do anything more than sort of saber-rattling against the u.s. and israel. we're watching it very closely. yesterday, some reaction, potentially to, that on the upside of oil. today, we're giving it back, 1.3%. there is this question, david, when i talk to people, about why

investors aren't reacting more to what we're seeing out of the middle east, and just around the world in general, out of china, china and russia, and it really is hard for you to price these kind of risks. i mean, you go back to semiconductors and tech stocks and companies with a lot of china exposure, and we don't know exactly where that's headed but it feels like it's move sboog a dangerous place and it's a really difficult one for investors to grasp. >> no doubt, and when it comes to china in particular, it's just so difficult for investors to truly understand at the government level and beyond or below what really is going on. there is data available, although less data, perhaps, than had been the case not even that long ago. i refer today to shares of vm ware. this is a company that's getting bought by broadcom. it's cash in stock so it moves around a little. let's call it $183.80. that stock is trading well below

that in part because even though the company keeps saying, we're going to close our deal on the 30th of october, at the end of the month, 31st, there are -- continue to be reports that the chinese anti-trust regulators may have second thoughts about that. hock tan was in china very recently and is stick biing sti 30th. to your point, sara, for investors, it can be difficult to understand the underlying there, what the response will be, for example, to the latest move by the u.s. government to restrict certain other higher-end a.i.-related chips. >> or block deals like this, at least. they could do that. >> and will it show itself through blocking deals? again, broadcom says, no. and their expectation is they're going to be closing this deal within the next two weeks but the market seems to be thinking differently when you think about $158 stock and a $183 price potentially. not very far away. >> on the bullish side of the

ledger for china today, we do have las vegas sanldds as one o the biggest gainers in the s&p 500. the company swung pack to a profit in the end of the third quarter. last year, they were at a loss and things were shut down. the commentary recovery story is happening in singapore. the ceo said it's not fully there in terms of air travel and accessibility, but it's on its way, and i think what also might be happening to the stock as we see here is authorization of a $2 billion buyback plan. that stock down this year into the print getting a nice lift today. there was also that really bearish -- did you see that article in the "wall street journal" about china and the debt problems and how in a normal economy, you might be more concerned about a financial crisis given some of the property problems and the local government debts piling up. but in china, you know -- >> local governments took on a great deal of debt from the country's banks in order to fund

and they rely on property sales for a lot of their revenues. those sales have not come through as a result of the significant decline in the property market in china, and so, yeah, keep raising this question as to whether you could have some sort of a rolling financial crisis. not necessarily one that would happen immediately but over time. >> right. meanwhile, the yuan weakness has resulted in them recycling fewer dollars into treasurys, and that was the big point this morning on "squawk box," that the treasurys have sort of lost key anchor tenants, whether it's the fed is a buyer, institutions as a buyer, the chinese as a buyer, possibly the japanese, and in his view, anchor elements of the market are beginning to wither away. that's an important thing to address. >> it's part of the narrative on treasurys, and one of the more worrisome ones because it can't be solved by the fed unless the fed, you know, turns around qt and starts buying bonds again as if they have to step in and become a buyer to get rates under control and it's not what the fed members are talking

about right now, i can tell you. they think that qt is on autopilot and has a long way to go. you're preempting a great chart i have for the top of the 10:00 data which basically shows that china continues to reduce its holdings of u.s. stocks and bonds. one argument could be that they're doing that to defend their yuan. their currency is a lot weaker than they might want, and they have to sell u.s. assets to intervene. but it's also part of the geopolitical backdrop and the backdrop for treasurys, the global backdrop for treasurys about who's going to step in and be a buyer. >> economic activity, though, here, you saw the weakness in the transports yesterday. at one point, it was the worst day for the trans since april. unp comes to the rescue today. revenue was a miss, but the guidance was unchanged. and nice recovery in some of the rail operators. kind of reminds us what jb hunt said yesterday, sara, about increased activity among the

rail providers. that's a key look for what's happening at the ground level in terms of the macro. >> yeah, stifel says union pacific is the best railroad network of all of them. strong unit economics, efficient cost structures. there's some things there too, but obviously on a day where the transports got smacked yesterday -- united was down almost 10% on the day -- you wonder what that says about the cyclical story, even though part of the united story was just a rerating on the cost structure with costs going up. we got american today as well. >> american, yeah. american, not a bad quarter. 38 cents beats 25. revenue was shy but they do see the holiday quite strong, and bob was on "squawk box" earlier today. there's a.l.l. up 2% but then you got alaska air, which was a miss by 4 cents, a miss on revenue. they guided below. i'm trying to see where this will take you back to at these levels on alk. sometime in mid-2020. but this was united's point

yesterday. the growth in the business is really reliant on the legacy carriers and not necessarily the low fare rivals. >> it's just hard to determine whether we have a demand problem or not and for a market that's jittery about buying anything that has worked well in terms of where consumers have spent on the discretionary sector, the hotels, all the services sector, hard to get a clean read on where that's going right now and whether we can see that kind of demand. although in the beige book, i did learn, you get all these snippets, that tourism was very strong in the new york area in the past few months. actually, in the past month, i should say. statue of liberty visits finally regained their pre-covid levels. >> first -- two things. first, you should do an hour just on the beige book every -- what is it, every month? every month. and they usually do give new york city a shoutout. i know it was broadway a couple quarters ago. >> they're taking information from all of their contacts of businesses all around, and trying to get a snapshot, and i

thought the tourism in new york is a good sense of the we're trying to -- if the fed is trying to put a lid on services sector inflation and services spending. that's where it's been hot. >> they're everywhere. they can just call me, because i see them -- they're down here when you start your day. you go to 30 rock, they're all over the place. they're all over the subways. >> that's good. >> they walk slow. they're looking around. >> they want to know where the museum is. >> where's the museum? >> you're an angry new yorker. >> i am never angry. the poor people, they walk through central park. they don't walk across. they walk through the tunnel. i'm like, oh, that's so sad. anyway, i divert. let's get back to blackstone, guys. i wish i had a reason for you to why the stock is down as much as 4%. the pace of assets sales, perhaps, not what people have been looking for. this is the largest alternative asset manager out there. trillion dollars, they cross in assets under management. that is truly something. $1 trillion, up 6% year over year. fee-earning aum, by the way, is

734.5 billion. that's up 4%. then they have perpetual capital. you got to love that. it's not going anywhere. $388 billion. but it's, you know, yeah, of course, higher rates. i mean, john gray, president of the firm, was on "squawk box" earlier talking, sara, about the impact of higher rates overall. making the point as he always does that we're very small in office buildings. we're very small in sort of the parts of the commercial real estate industry that are suffering right now. but did allow that higher rates have an impact across the board. you can take a listen to mr. gray. >> if you take an intermediate longer term view, we have been underbuilding housing by about 4 or 5 million homes since the financial crisis. we're now going to see housing start to, i believe, across multifamily and single family, probably come down, exacerbating that shortage. and so, if you think about an asset class over time, i think it should have pretty good performance, even if there's some near-term challenges.

>> that was him on housing, not on rates. >> he's been warning that it's going to hurt the consumer and hurt the economy. i think also the fund-raising numbers were not necessarily what investors were expecting. it's a tough fund-raising environment, so those numbers, i think, coming in late, especially for the new flagship fund, little bit less than expected. blackstone down 4% right now. >> a year ago, we were talking a lot about breit, though. the held in there quite well for one of the most difficult reits out there but of course private and a significant offering to so many high-end clients around the country from their brokers. >> speaking of things we were talking about a while ago, remember the regional banks? we're getting more regional bank earnings numbers, and so far, okay. fifth third is up the most of the bunch. we're going to talk to the ceo later this hour, up 2.4%. but i think what mike santoli

said yesterday still holds, which is no major alarm bells set off when it comes to the state of regional banks, whether it's reserves coming out -- we're still watching those reserve numbers, and they're still up and down a little bit. but it really comes down to whether you're beating or missing on net interest income these days, which should theoretically be higher for the banks on the back of rising interest rates. but their deposit costs go up as well. it's how they're managing that and what's happening with share. for now, the financials as a group are up, and week to date, they are unchanged, given all the big bank earnings we have had. >> morgan stanley did get whacked yesterday. it's rebounding a bit today. >> that was one of the worst earnings responses in terms of stock activity since the financial crisis. >> yeah. >> but a lot of different moving parts there. we keep trying to probe some of the bank ceos, first horizon ceo yesterday on credit and whether there is real deterioration in credit. it's hard to get them to say yes. >> they are putting aside more

provisions for bad loans, especially related to real estate and commercial real estate but they're not talking about a huge deterioration in credit quality. they're not talking about recession. they're not talking about stress. bank of america, brian moynihan said that to me as well, not stress, you know, but we're watching this, but it's more normalization trends than anything else after consumers had so much excess savings coming out of covid that it was more the anomaly of the last two years that things were so strong when it comes to deposit balances and savings rates and spending. >> interesting action, s.a.p. with a pretty decent quarter here, reiterates the guide. those adrs back to levels that we last saw probably mid-september, above the 50-day for the first time since then. that's interesting to watch. and then taiwan semi had a pretty nice gain premarket, up 4%. profit was the biggest drop in almost five years, but they did sort of hint, david, at the recovery, which we've long been waiting for in semis, may be

getting closer, and with that, definitely the highs for the month on tsm. >> yeah. you know, it figures so prominently, obviously, in the geopolitical concerns that so many have in terms of china, taiwan. this is the company that makes the chips for so many of the important companies that design them, namely nvidia being certainly one of their most important customers. and you just assume demand would be fairly good. but it's not just the highest-end chips. it's across the board and that is where you can see certainly a diminishment in some demand. >> i think it's worth hitting netflix again. it's the top gainer in the s&p 500. it's up almost 15%. remember, of all the big cap tech this year, it had been the underperformer because people weren't really sure about how this password sharing was going and the ad tier, but it does feel like what netflix delivered yesterday brought the company back to, first of all, growth mode in subscribers, and gave the -- turned the narrative on its head.

how long -- when was it? 2022 when we were talking about subscriber losses for netflix? they predicted more subscriber losses. the whole question of the model of streaming was sort of turned on its head and then everyone started saying, we're going to emphasize profitability, not subscribers anymore. >> crackdown on password sharing seems to be working, and it doesn't seem to be resulting in a lot of people leaving, which i guess was the key. although at the highest-end package, 23 bucks, carl, that starts to add up for the average family when you're talking over -- >> that's true. >> almost 300 bucks a year. >> one last name i'll add is goose getting a downgrade today over at td cowen. they go to market perform, a target of 15. they were at 22. i think that's an all-time low on canada goose as we talk about a pressured consumer. we'll watch that one closely. dow up 12 here to start this thursday. before we go to break, let's watch bonds. as we said, most important thing of the day is going to be powell at noon easterntime but we got

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among the most active names, no surprise, there's tesla down almost 8% this morning on the miss. the gross margins down 30 bits quarter on quarter, although they did reiterate the full production guide. we'll see if it holds 215 the 'lta arelosing low. wel ke bak and be right back.

avwe've been researching an we have products that are a good fit already now. for example, our opti fast range of products which is good before and after the treatments, products in our boost range very much targeted to that and new innovation hitting the market as soon as next year. >> that was nestly ceo mark schneider on the earnings call. the company has not seen impact from weight loss drugs on its sales so far, but is moving ahead with efforts for companion products to the drugs and sees it as an opportunity, guys, after david explained what aggo nists are. the important thing to remember here is that nestle has a wide

portfolio and asked the questions because they make things not good for you like kit cats and hoggen das ice cream. he's talking about they do a lot of vitamins and weight loss stuff to begin with, opti fast does bars and low calorie meals and boost, like high protein and high vitamins and it's more of a seemingly marketing opportunity for them to rebrand those things to cater to this increasingly large -- >> you have to come up with an answer in the question you're going to keep getting. there is a loss of muscle mass because when you drop as much weight, you are losing muscle mass as well. it is a concern for the elderly in particular and you may not see the uptake of the drugs. if you have products that increase your intake of protein and maintain muscle mass while on them, you could argue that's a positive as we take a look at shares of eli lilly, we talk

about that has benefitted so much over this time from -- mounjaro, still not approved for weight loss, unless i missed something -- >> diabetes. >> which is a game changer for the class as well. to people stay on these drugs forever? is that the goal? >> that's the question i think. i think many don't. there are side effects. they get the necessary weight loss -- we haven't seen, right, do you gain it back, go back on? do you reduce dosage in some way, but stay? i don't know, sara. >> does it make you too nauseous to stay on it? i'm trying to -- it's taken the market and the investment community by storm, and leading to all sorts of -- what does it mean for this, for coffee? i heard when you take these drugs your coffee tastes different. even though you don't want less coffee, it gives you a bad taste. there's so many ifs on this question. we've had diet drugs in the

past, atkins, all sorts of -- i wonder where -- if this is different than everything else. >> i believe -- based on what we understand about the science thus far this is different. >> yeah. yeah. providers, insurance doesn't, you know, pay for your atkins diet, but if they pay for this, that's going to change everything. >> the health outcomes are amazing. >> yeah. >> by the way, i don't know, you probably can't chart s&p food and beverage versus novo but deutsch's chart of the day yesterday and you can see chal where novo took off and s and p food and beverage tanked. the causality is obvious. >> the medical device makers, fewer surgeries needed, that sof thing. >> bariatric surgery, for example. >> exactly. >> when we come back existing home sales data and leading economic indicators and talk more about the reaction to tesla and netflix. their stocks moving in opposite directions on this thursday. don't go anywhere.

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nine of the new york stock exchange. stocks a mixed picture and you can see that by the sector. the dow is unchanged right now. the s&p 500 up 0.1%. so not quite a bounce back from yesterday's more than 1% sell-off. there are pockets of green you can see in the sectors like technology is working, communication services, utilities, industrials, financials higher, materials are up as well. consumer discretionary and real estate under pressure. netflix is certainly helping the nasdaq. netflix stock is surging on the back of earnings right now. it's up more than 16%. let's show you what's happening with treasures ahead of jay powell two hours for now. past 4.9 on the 10-year, new 16-year highs and watching the levels, more than 5% on the 30-year yield. the 2-year backing off, above 5.1. movers we're watching, tesla, netflix, at&t, las vegas sands

and taiwan semi on the move post results and all over these stocks in the next hour. let's start with three other movers we're watching. blackstone, shares are dropping. revenue and profit missing analyst expectations, though blackstone's ceo said the company is well positioned with a record amount of dry powder, $200 billion. goldman sachs upgrading best bay to buy. price tart $85 a share there. the street getting bullish on crowdstrike which we want to show you. jeffries upgrades the name to buy as they see gains ahead for cyber security players. argus research initialating the name with a buy rating and $220 price target. stock is up 1%. >> pretty busy morning for data. back to rick santelli. hey, rick. >> yes, carl. september read on leading economic index, and the interesting thing about lei is the word leading. where is it leading us?

down 0.7% for september. down 0.7 of a percent. that means it's 18 in a row negative month over month changes. 9 from the end of last year and now 9 this year. and to really drive this home, if you look at what the best level has been, it's been down 0.3. it's been the best level since march of '22. when we had our first 0. we have to go all the way back to feb of last year to find an integer up 0.3. this is a weak number. but in terms of leadinged economic indicators, moving markets, it's usually not moving markets in a big way, but it certainly does figure into the strategy of the big tug of war going on between what the labor market shows and other weaker data points show. we have september read for existing home sales and for that we head east to diana olick.

>> rick, existing home sales dropped 2% in september to a seasonally adjusted annualized rate of 3.96 million units, slightly better than the street was expecting. sales down 15.4% year over year. we have a 3 handle, the slowest sales pace since october of 2010, which remember, was during the foreclosure crisis. for perspective two years ago sales were at 6.3 million annualized, when the average on the 30-year fixed was at 3%, today it's at 8%. the realtors say it's all that crushed affordability and lack of supply. 1.13 million homes for sale at the end of september, down 8% from a year ago. inventory now at a 3.4 month supply. slightly better than last year, but only because sales have dropped so much. adding to higher mortgage rates median price of a hold sold in september was 394,300, up 2.8% year over year and we're continuing to see more homes

selling on the higher end of the market likely because there's more supply there and higher end buyers can often use cash. mortgage demand at the lowest level since 1995. sara, the cash share of buyers in september, 29%. that's tied for the same level again during the great recession. >> diana, thank you. as we look at the 30-year fixed mortgage at 8%. continuing to climb higher. that's the story in the market lathe lately yields continue their march higher. it poses a headwind to growth for the consumer when it comes to borrowing everything. there's the 10-year note yield. jobless claims is not having a big impact on the labor market right now. we've got the lowest jobless claims since january 2023. dropping below 200,000. 198,000 filing for claims, and

that's a low number wondering if the economy is starting to turn on the back of the higher rates. it poses a challenge for the federal reserve that has been pulling out all the stops to fight inflation had done a ton to do it, waiting to see the impact. we've seen inflation come down, and yet, the economy is still strong. can they be confident they've done enough? and that's the question of the day. fed governor waller making big headlines i wanted to highlight in the last 24 hours. he lead the hawkish parade and now called down a little and seems content with waiting but did say, i believe we can hold the policy rates steady and let the economy evolve, but thinks about two scenarios and in the second scenario, demand and economic activity continue at their recent pace, possibly putting persistent upward pressure on inflation and stalling or even reversing progress towards 2%. in that case, the fed would have more work to do on raising rates. continued uncertainty even though the market feels like the fed is done.

there's a 40% chance now they raise rates in december. i think the data is surprising everybody and doesn't match up with what people are seeing or feeling or hearing. >> sara, just to bring it back to the real world and we'll talk about tesla, but, you know, interest rates took a significant amount of time on the call in part because elon musk said affordability is the key and when your monthly costs are going up as much as they are to pay for your car -- >> auto loans now -- >> he's been lowering the price of his automobiles. so -- >> which is deflationary. >> which is the point. >> which is the point, but -- >> soft landing. >> not happening in all sectors of the economy. that's not happening as much and we're not seeing it enough in rents and housing. a lot of people think that's coming and going to hit with a lag. services have been a bright spot in the economy where people are paying up to go on vacation and they're paying up to go to concerts and paying up to go to restaurants right now and the price increases have moderated

but they're not back to precovid levels and not coming down sharply. the thing is we still have good wage growth which is great for the american economy and consumer, but it does add to the risk of the wage price spiral where people have higher wages and willing to pay more. that's what fed is trying to avoid here. i think it's one of the reasons why you continue to see the yields creep higher even with the expectation that inflation is coming down and even though tesla is cutting the model x by 30% in terms of price. >> you saw the inflation adjusted net worth figures yesterday foramerican households. up 37 in three years. more than double any three-year period in the history. i mean people had a lot of money either made or given and nowhere to spend it for quite a while. >> that was the covid story, and the thing is, the federal government is still in stimulus mode. it's not giving money to people's pockets like we saw

during covid, but it is stimulating and it is spending a lot when it comes to the industrial part of the economy to build chip factories and infrastructure and things that need it, inflation reduction act. that's why the larry fink and other people don't think we are going goat this recession, that it is going to keep the economy humming and demand for jobs and labor. >> it also raises the question we've discussed many times, gets back to the move in the treasury yields in terms of will there be enough demand to fund all the programs. >> i'm glad you asked. we have the tick data last night from the treasury, the monthly inflow data, and, you know, if you were worried about china not stepping in to be the buyer, i don't think it did anything to comfort you. here's a look at the china securities purchases over the last few years, and you can see at the end of the chart where we are, the most in four years in terms of selling of u.s. securities. >> they're a net seller. >> they're a seller. >> unlike '21 where they were a

big buyer. >> stacking up. right. so here'sp one possible explanation, the chinese currency has been weaker than desired, same with japan, and in order to intervene and have reserves you have to sell. you can sell trooeasuries. the longer term trend is wondering who the buyers of our debt will be. we have twin fiscal deficits and someone has to fund them. >> with that, 10-year still around 4.95. let's bring in mike santoli and get his take as we're holding 4300. one technical note as long as that's the case you have to hand it to the market for at least being able to withstand some incoming. >> no doubt, carl, at the index level you would say it's been resilient given what's been thrown at the market. almost a month ago, we were at these levels just about, around 4300, just above, and the 10-year yield was below 4.5. that doesn't mean we're

shrugging off what's going on in yields. it's more of a nuanced impact and you can -- if it's for the right reasons, taking recession risk out that's okay. below the surface there has been damage done and wear and tear on a lot of different sectors. the home builders, yep, they felt the effect of higher mortgage rates. sara was talking about fed policy or rates in general are not having as much affect on the inflation components related to rents and housing. if they're not impacting those areas, they don't have any impact. >> right. >> if it's not working there, it's not going to change the cost of manicures, you know, and cookies, right. so i think that we have to wait. i think that's what fed is saying, that they think they're kind of restrictive right now, in the ballpark of where we need to be. the long end is just barely started to rip the way it has. it hasn't exactly made its way through the economy. so if we, as the fed, don't even collectively see getting back to the 2% inflation target until the year after next, what's the

hurry to do something now when we have so much happening that is still kind of in process of being felt by the economy? so i think the market is trying to read good economic news and good corporate fundamental news at face value and try to capitalize on it. it's just not permitted to when you just have disorderly moves in the bond market. it's the increments really unnerving and creates a greater likelihood of some kind of financial accident out there and that's, i think that's where we have the twitchiness of the stock market. very volatilie in this range. you have really been kind of churning around just below the area that everyone said, well, we got to get above 4400 before we can declare this corrective period behind us. here we are still stuck in it. >> what would you say we're learning from earnings? david mentioned tesla. a lot bemoaning the tone of musk and what he thinks about the

economy, got a lot of regional banks who has a good take on what they're seeing as far as loans. overall, my take, it doesn't feel like they're talking about recession but does seem like they are noting that consumer is slowing down which goes contrary to what we've seen in the data. >> i think that's right. most companies are at least prepared for some slowing. look the year over year effect is going to be a little bit of deceleration, almost no matter how you slice it, for most companies. i think the general message so far from earnings, the banks no scary surprises, that's good, things seem like they're more or less on trend in terms of what you would expect on the credit side of things. and then the good news about tesla for the broader market it has never really been a bellwether of what was going on broadly speaking in the economy. musk loves to complain about the level of interest rates. you know, wants to say that's where the blame lies. tesla didn't get up to $1.2

trillion market cap because it was so sensitive to demand going away at a certain price point. it was supposed to be supply constraint, infinite demand. that story is up ended and now we have to deal with, you know, what margin effect is. i agree for the broader economy, you know, it's affecting us in pockets, but not across the board. we'll see. i think the big question is, get through next week and you get a much more critical mass of earnings done, you can see whether, in fact, the first and second quarter projections look plausible. >> mike, thanks. perfect segue. appreciate that. tesla is hold 225 dropping after missing estimates and the margins down from a year ago. next guest called last night's conference call a mini disaster. joining us this morning at post nine, dan iv, wedbush security analyst, cuts his target to 310, keeps the outperform rating. thanks for coming in. >> what about it made you say that? >> you look up disaster in the dictionary there would be a

video of last night's conference call. the problem is the street wanted to get details, have the price cuts ended? where is the gross margin outlook. >> what does demand ultimately look into 2024? and instead, it was really musk put on his macro economist sort of hat and that's not what the street wanted. i think it was lack of details and ultimately a somber note for when he looks at cyber truck and the margin outlook, and the long-term thesis is there. no rose colored glasses. this is what i would call a disaster. >> would y expect anything different from a guy who runs a company whose goods are 90% financed? that's the automobile. >> yeah. now look, there's no doubt that that's something that has helped them and hurts him, but i think the big issue is really around the price cuts. as you've seen the price cuts, there was a view it would start to end by this point. ultimately, by having the door

open and also losing your cfo, a huge part of the credibility, investors came off that call, i can tell you institutionally speaking, still a lot more questions and no answers. that's the frustration and that's why you're seeing the stock almost extra pressure because of the head scratcher conference call. >> you're one of the biggest bulls on the street and talked up tesla correctly so in many years, glad you're here on a bad day, but what did you get wrong here? >> what we got wrong in the short-term was the price cuts were going to end. you knew -- the move of the price cuts has paid off massively. i think that's really shared from a demand perspective. but really 95% of the price cuts i believe are done, i thought musk would put the line in the sand, maybe a few more price cuts, then we're over. instead, by leaving the door open, i think the communication is maybe what we underestimate even from musk.

by not putting on and saying that's the frustration here because now it's a pandora's box and you can't put the genie back in the bottle. >> how can he put a line in the sand on price cuts when we see the 10-year and 30-year yield move up every day to new highs and if that's what's driving it, how can you know? >> yeah. it's a great he question. i think it's really about the price cuts in china. if you look what's happened there, even byd and some others, have started to soften some of the price cuts. continuing to cut prices, especially in china, that price war, they're making worse. i think that's been the biggest thing because you take about 40, 50% demand coming out of china, we believe the long-term story intact. full self-driving ai. but no doubt in the near term and because of that conference call, uncertainty. it's almost an albatross right now that's around that stock. >> is where the operating

margin, 7.6% came in. how does that -- that's closer to other awesutomakers, night. >> they were in a massive nogs strength and come down towards other automakers and now it comes down to does this start to stabilize? increase from here? software, you could argue, fsd will be a big piece going forward. we've been here and seen in '17 and '18 some of the white knuckle periods with musk, but i would put last night as a top three probably worse conference call i've heard from elon in the last few years. >> yeah. in terms of just the psychology also? >> yeah. >> you never know what kind of day he had coming in. literally can impact how he talks about things. >> twitter and x. >> how much time he's spending on twitter fighting battles there. >> if musk is not on that conference call last night the stock is reacting differently. he threw so many variables out there, and even though you talk about fds and ai and some of the

things down the road, cyber truck, some of the words he used, dug our own grave, that's not something as a bull, that makes you drink in champagne after the conference call. >> that's musk, and what you get. >> it is. but at this time, given the geopolitical, given the macro, they wanted more what i believe as a conference call, guide, direction. you wanted a little less of the traditional musk. >> what do you dmig on from here and figure out? whether the price cuts are done? >> yeah. >> what do you do now? >> sunday i'm going to asia and i will be in asia a week and a half and trying to understand what we're seeing in china. the supply chain. do we actually see demand stabilizing? do we think ultimately the bark is worse than the bite? if we believe that, this is just a speed bump, which i believe it is. that's why we sit here and not here, but going out in the field to make sure things are, you know, better than maybe we saw

last night. >> what about new designs, which drives sales? we haven't seen a new design in years. the model s the same since it was introduced. how does tesla address that and how much would it cost? >> yeah. cyber truck, the complexity of that build-out, that's part of the issue. to scale that in terms of a mad max vehicle is difficult. the demand is there. million reservations, call it 50, 75% stay, but the big thing is the refresh on model 3 and ultimately a model $2. sub-30,000 vehicle along with what we believe would be some sort of suv down the road. look at what rivian is doing and the other automakers, you need a refresh. you cannot continue to cut prices. otherwise the consumer will continually week after week and that becomes a spiral. >> that's one of the few things where the legacy ceos dis him. you have to refresh with more

frequency if you keep the consumer close. safe travels. look forward to checking in when you get back. >> thank you. oil prices giving back a little bit of yesterday's rally as we monitor the israel-hamas war. nbc's jay gray live from tel aviv with the latest headlines. jay. >> it's been an active day as far as the israeli defense forces are concerned. these are their accountings of what's going on here, but i can tell you they say continuous attacks over the last 24 hours with hundreds of air strikes in gaza. they've hit missile launch sites, tunnel shafts, intelligence and operational structures and they are continuing runs to the south as well and in some of the areas where they instructed some of those trapped in this region to move to. now they say they are specific with their targets and that those people remain safe, but we know and have seen video from

the region of strikes two, three blocks from hospitals and other areas. we know it has been an active time inside of gaza. what they have also said as of today is that they have, their words, eliminated 10 leaders of hamas on the ground in gaza. that is the status of the conflict right now. as it continues. on the other end of the spectrum, you've got some aid that may be making its way in rather quickly after the president's visit, israel and egypt agreeing to allow food, water, and medicine to move through the rafah border crossing with egypt and into the area where people may need it most. it's not flowing yet. they're repairing some of the roadways in that area that were damaged by israeli bombing runs. they expect that they may be able to start things tomorrow. 20 truckloads moving in with this first group, and it is desperately needed. >> jay gray, thank you very much for the update as the british prime minister rishi sunak is

there, the latest western leader to visit. he's in jerusalem to show support. here is our road map for the rest of the hour. netflix shares on a tear. the streaming company raising prices adding customers, is the stock a buy at these levels? >> at&t, taiwan semi, las vegas sand,s, all rallying on the back of results. what investors need to know about these stocks. >> fifth third bank corp with a beat. the bank ceo will join us to give us his outlook and talk about how the soaring yields are impacting his company. stay with us.

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welcome back to "squawk on the street." we've gotten some pretty big news in the media industry over the last 24 hours with netflix being a key part of that. shares you see up sharply on subscriber growth seen from increased password sharing crackdown efforts. it is the best performing stock in the s&p today. meanwhile, disney gave investors a look at espn's financials and broke them out in a more significant way, a detailed a.k., first time we've seen that. joining us at post nine, alan gould, luke capital's managing director, buy rating on netflix and disney. good to see you. start with netflix, subscriber growth, obviously, surprised to the upside. can they keep it up? >> i think they'll keep it up for a while. i think this year will be unusual and close to 25 million sub-ads this year. there's a little bit of a pull

forward with the password sharing crackdown. it will keep going for a few more quarters, but we have them down to 15 million next year. the key thing with the larger sub-base it ensures they're back to a double digit revenue growth. >> that's what you expect for some time then? >> yes. >> a growth stock and deserving of a higher multiple? >> i think so. i think the stock deserves to be rerated in here. two things happening, when, they've sort of cracked the code on the borrowers and secondly, the environment is getting br for them. they had irrational competition, pricing too cheap by all the competition, the competitors are raising prices, there's less demand for content, so content should cost netflix a little less or not going to be going up at the same rate it was, and then i think there's going to be an inevitable consolidation in the business. the traditional guys in general are losing too much money. two or three of them will have to merge or drop out of the business. which should make it a more

rationale environment. >> not that netflix would be a buyer. >> netflix won't be a buyer. i mean, comcast, your parent company, nbcu merge with max, that's been speculated. what happens to peacock -- excuse me, paramount plus. there has to be consolidation. they all can't lose the money they've been losing. >> are you struck by the things netflix is doing, advertising, passwords to some degree, sport, never do that? are the u-turns creating a pattern? >> yeah. i mean, now they say never say never when they talk about these various things such as sports. i mean, it makes sense. they have to -- they just have to evolve with the times. >> what about the strike? do they have the pipeline? clearly it helped cash flows this quarter, but going forward, do you have to start worrying about subscriber growth in the face of lower content? >> i think you do. the strike is affecting everyone. look at it from the time the writers went on strike to today is about 5.5 months.

the writers are back but actors still on strike. it sounds like they're at a big impasse right now. i mean, netflix is -- content purchases are down 30% year over year. the last quarter was low. i don't think ted is just giving us a line. i think he really does want the strike to be settled. it's going to start affecting '24 and '25 release slates. to some degree short form video, tiktok and reelz, is probably gaining shares as there's less compelling product on the streaming services. >> i mentioned disney, what did you think of that? anything we learned there or you learned that goes against what you might have expected from the financial performance of espn? >> i think two things people learned. so espn, if you break out the domestic espn and break out spren plus, there's about a 26% margin business, about $3 billion of operating income.

last year was a little bit less than i was anticipating, which means more goes to abc or the other cable networks. the other thing that came out is espn plus lost about 400 to 500 million in '21 and '22, lost 150 million for the first nine months of '23. we knew there was something, there was a capital call on that one, but we now see exactly what the numbers are. >> alan, appreciate you coming by, thank you. >> thank you. still ahead on the show, why results out of taiwan semiconductor are giving investors hope for the rest of the space and whether demand recovery could really be in the cards. stock up more than 4%. we'll diuss atheto uscwh ty lds when we come back. 're looking fr answers, it's good to have fr 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

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smartphones and pcs were weak, auto chips dehapmand has enteren adjustment mode and the slower recovery from china within the ev sector is weighing on q4 inventory levels. once you move past q4 and the drop in customer inventories, tmc believes the recovery is under way and 2024 will be healthy growth. there are signs of recoveries in pcs. intel, results out next thursday. the biggest driver is the demand for ai related technology which is three nanometer chips. they are building or working on advanced packaging and that should double next year. and also why there was no down or reveision in q4. they surprised investors and kept up with capital expenditure spending despite lisa at its

arizona plant and factor in the controls that could hinder shipments. tsmc says that's not the case right now. according to them, the big down sentence is the recovery is under way and that's why you're seeing shares up 4%. >> over 4. >> yeah. >> thanks. kristina partsinevelos. meantime the transports off the worst days since april but ump bucking the trend higher despite coming up with results that were short on revenues amid a broader decline in freight demand. more about the earnings movers you might veisd enacha msewh bk in 2.

welcome back. i'm leslie picker with your cnbc news update. trump attorney and co-defendant in his georgia election interference case sidney powell has pleaded guilty to charges stemming from trying to overturn trump's loss in the state. her plea on six misdemeanor charges is part of a deal with prosecutors and comes a day

before she was supposed to go to trial along with attorney kenneth chess borrow. a spokes person for jack bergman says the michigan representative is ready to run for speaker if his colleague jim jordan can't win the vote. the hardline representative jordan failed to win the gavel for the second time in two days on wednesday. bergman's office says he would only remain the speaker for the remainder of the 118th congress. and oscar nominated actor and "rocky" side kick burt junge has died according to his fool. young played the role of paulie and had roles in "once upon a time in america." he was 83 years old. back over to you, david >> thank you, leslie. at&t, las vegas sands, amongst the best performing stocks in the s&p 500 this morning. of course netflix also is performing well as we've said. both those companies beat revenue system frtsz quarter.

contessa brewer is here to help break down the latter name, but i'll give us a start with at&t. the shares had been up, still having a very strong morning in the green after beats on top and bottom line. raised the free cash flow to $16.5 billion. they're citing reasons behind that being the transition from legacy network, copper to fine, and that's being a better product and more cost efficient. work force reductions. and efficiencies with ai and call centers and the like. you have that roughly half a billion dollar increase in guidance for free cash flow. for the other metrics quarter to quarter, they did pretty well. post paid net phone ads 468,000, better than anticipated by many analysts that follow the company. consumer wire line, fine broadband, at&t is making an effort, addition of 296,000

subscribers was better than had been anticipated. so you got a better number both top and bottom line and overall free cash flow guidance. that is bolstering those bullish on the stock this morning. they may be competing better at the local level in terms of gaining subscribers or losing fewer subscribers as well. keep an eye on t-mobile and verizon. the biggest players in terms of adding wireless subs are our parent company comcast and charter's spectrum unit. they are the bigger additions, but the fight continues amongst the big three as well. sara? >> is there growth in this business? >> well, there's 1% revenue growth for at&t. >> so something. >> that's growth. >> you made it interesting. >> i did? >> yeah. >>p copper. >> she can't believe it. >> during the break she's like, so boring. >> which he took as an inassault. something not borng, las vegas sands and mthe ma ccao recovery

>> so what we're seeing here is that china's travel and tourism spending is fueling the cash flow. singapore is just on fire. it is surpassing prepandemic levels on a slew of metrics. macao is burning it up with a ramp in the eight months since the end of covid restrictions that on the call, ceo rob goldstein raised the possibility of the market surpassing $40 billion in gross gaming revenue in a short period of time. just a side note, remember, last week bill hornbuckle told me on stage in las vegas they had the best five days during golden week in the history of the company in macao. visitation is still down 20% for las vegas sands from prepandemic levels and macao, but the occupancy at lvs is 96% higher than 2019 with more per capita spend. that shows up in the revenue and

profits, especially the retail business is incredible. the key profit metric in gaming, of course, is adjusted property ebitda. sands came in at 1.1 billion bucks this quarter. it is sitting on $5.6 billion in cash. it indicated on the call it is moving full steam ahead with its plans to invest more in its properties, continue the expansion of the lender macao, doing a $2 billion renovation. that's going to result in four times the number of suites. where sheldon adelson used to say dividends on every call his son-in-law, the president and coo of las vegas sands, is like buybacks. the company announced $2 billion share repurchase plan. we saw the stock pop. it indicated buybacks are the preferred method of returning capital to shareholders. ceo rob goldstein will join me for an exclusive interview in a few hours on "the exchange." he said on the call he's like plus look at our stock price.

it's tagds as though we're still in covid closures. of course it's a great opportunity to go in and buy it. >> thanks. looking forward to that interview. contessa brewer. after the break, fifth third posting a beat. the regional bank ceo joins us to break down the results and weigh in on the economy, yield and more. don't go anywhere. hi, my name is damion clark. and if you have both medicare and medicaid, i have some really encouraging news that you'll definitely want to hear. depending on

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indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire fifth third shares are higher today. they're up about 1.3%. more than a few minutes ago. after beating estimates the company expects income interest to decline in the quarter after the third quarter profit. let's talk more about the

quarter, fifth third bank ceo tim spence joins us in a cnbc exclusive interview. tim, from cincinnati, welcome back. >> thank you, sara. good morning. >> good morning. looks like it's a beat in all the core numbers, net interest income, looks like the credit losses provisions were less than expected. talk us through why the results seem better than your competitors in what's been a noisy quarter for regional bank earnings. >> i think you're right it was a good quarter for us. revenues were better than they anticipated, net interest income and fees and expenses were better, credit costs better, the byproduct is the bottom line was better and i have to add what you were saying earlier i know that in the banking sector these days boring is good. >> right. he wants to be boring like at&t. >> that's right. >> so tim, what does that mean for what you're seeing? the credit provision lower than

expected? what does it mean in terms of the economy and what's happening with consumers and businesses? >> yeah. and our credit metrics have been well behaved. charge offs rights in line with what we had in line and continue to look good for the fourth quarter. the delinquencies on the consumer side and non-performing assets declined and based on the rule forward that we do, are set to decline again in the fourth quarter, so very consistent with i think what you're hearing more broadly that economy remains strong. that said, i will note we probably feel more cautious than where the prevailing sentiment is right now. i know the aggregates, whether payrolls or consumer spending and otherwise continue to look good. when you look underneath the surface we're getting our job growth because you have more people working at least one, sometimes two or three part-time jobs and the spending numbers are uneven and there are slices

of the economy being bolstered by the large volume of federal incentives right now attached to the green economy and otherwise. and i think it's reasonable to ask whether or not, you know, that will continue to carry us all the way through next year and to a truly soft landing. >> so, to the extent that you have perhaps a more cautious view than others, how is that being reflected in terms of the risk you're willing to take on your balance sheet, extend credit and on from there? >> yeah. i mean, we have had a more cautious view than others for some time now. we came into this year with the lowest loan growth guide of any of the large banks, so we have been cautious. we never fully normalized our credit policies post-covid because we were worried about our ability to split risk in an environment where you had all the stimulus and loan forbearances, ficos, and otherwise, so we are continuing to be really cautious. we stress test all of our

underwriting to existing curve plus 200, so that would be a 7% 10-year as an example today, and have re-underwritten north of 90% of the portfolio in the last 12 months as the fed has really gotten aggressive. and we just continue to be very cautious with where we focus on deploying capital, maintaining prudent coverage level in terms of our reserves, and running the bank to perform well when the environment is difficult in times like this when the environment from a credit perspective is benign. >> given the parameters can you find enough business to actually deploy your assets appropriately to get a return? >> well, we are in the middle of what we have deemed our rwa diet or risk weighted asset optimization which has been focused in enabling fifth third to adapt to the proposed capital rules faster than, frankly, i think that fed will even, you

know, lay out in terms of the timeline here, so earning assets were actually down in the quarter and we anticipate about another 2% rwa reduction in the fourth quarter. that then is going to put us in a position where we can start to grow loans again next year. really into both the fintech platforms we acquired in the last 24 months and what has been consistently really strong new middle market commercial relationship acquisition. >> i was going to ask you, tim, what loan growth looks like next year. i mean, the big worry after the march crisis was that there would just be this credit crunch. it didn't really materialize, but demand is weak. >> demand is definitely softer. and so i think that loan growth that anybody generates is going to be loan growth you have to get by taking share. >> and it comes back next year, or you take share next year, that's the forecast? >> that is -- yeah, that's what we indicated on our call this morning, is we anticipate being

able to return to loan growth next year. >> all right. tim, thank you very much for joining us with an update. tim spence, fifth third ceo. >> thank you. programming note as we go to break, do not miss a special extended edition of "last call" leading up to and taking live the president's speech on the growing geopolitical risks abroad for both israel and ukraine. he'll make those remarks live at 8:00 p.m. eastern time. make sure you tune in tonight to "last call." stay with us. when you think of investment risk, do you consider climate risk? changing weather patterns are impacting the way we live and the value of businesses large and small. this can mean disruption to supply chains, changing demand for products and shifting regulation. what does this mean for your business, your clients, and your investments? ice offers data and markets that can provide critical insight. manage your climate risk with ice.

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introducing storm-ready wifi. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network. monitoring some headlines from the london stock exchange today. let's bring in bob pisani to discuss and see if it has anything to do with the leg lower we took, bob. >> no, i don't think so. there seems to be some technological issues in trading some london stock exchange stocks. i walked around on the floor. thequestion is -- british petroleum, it seems to be trading fine. i'll try to get more information. as of now, it's not moving anything here at the new york stock exchange. i think the big story is the interest rate story and where we are with the earnings situation. if you look at the sectors, the good news, banks and semis, which are the main things moving the markets this week, holding

up fairly well. reits still down. consumer staples, both of these sectors are essentially 2%, maybe 3% from new 52-week lows. no real bounce at all in that sector here. the key story here is the earnings. very mixed picture. tesla is really affecting the consumer staple -- excuse me, consumer discretionary sectors, but it is well off the recent lows we've seen. union pacific, we've got a freight recession going on here. you heard that from jb hunt yesterday. fortunately, it's bouncing, but it's had a terrible month overall. and the regional bank, zion and keycorp, mixed reaction. the earning situation, we've got about 15% of the s&p 500 reporting right now. the good news is the average earning beats about 5.5%. that's about the historic average. 3% to 5% is typically what you see here moving through the markets here. i think if you look here, the earnings growth at 2.8%, bigger, higher than we expected.

we're expecting flat overall for the sector. i think those numbers will come down a little bit, particularly after the energy companies report. and the big surprise is revenue growth is generally much stronger than expected. if you take a look, i think the big concern is the bond situation. i want to show you bond etfs right now. there is no escape velocity from this decline in the markets we've been seeing without bonds rallying. these are 52-week lows in all of the big bond sectors. we're in this higher for longer limbo and that's been a big issue. there's no escape velocity without relief on these bonds and we're not getting it right now. the odds of recession seems small. inflation is not low enough for the fed to move here. we have to get going with the jobless claims again. pretty good numbers for them. no recession. pretty good numbers on the earnings. >> tough situation. >> it's not as simple, you know, bond yields are up, sell stocks anymore, because we're seeing some strength in technology, to your point. it used to not be like that,

although good earnings from netflix helped. >> it's -- i'm calling it the higher for longer limbo. i'm trying to find a new phrase for this, but we're at the higher for longer limbo. we can't get out of this situation unless the bond yields stabilize and they're not. we're knocking on the door at 5% on the ten-year now. that's going to be a big headline as soon as we hit that. >> will be, could be as soon as today. thanks, bob. "squawk on the street" will be right back.

good thursday morning. i'm sara eisen with carl quintanilla live from post 9 of the new york stock exchange. netflix and tesla moving in opposite directions from the earnings. what went wrong and right for each. san francisco's president larry bair is live from oracle park. he'll joining us with his plans to revitalize san francisco. we have a first on cnbc with the ceo of novis. we talked about the ten-year yield getting close, within two basis points of 5. meanwhile, holding by one point. a lot is still headed our way as we get a ton of fed speak over the next, say, ten hours. >> the