good tuesday morning welcome to another hour of "squawk on the street. i'm carl quintanilla with sara eisen live on the floor of the new york stock exchange. vince reinhart, why he says the recent move in the bond market means the fed can keep rates at their current levels. an exclusive with the top executives at fashion giant shein. more on its plan to disrupt the industry and details on the expanded partnership with forever 21. pinterest surging on the heels of their results we have an update moments away. first, a check on the

markets right now. we've seen stocks recover a little bit from some early morning losses with the s&p 500 now in positive territory, up about 0.25 of 1% if you look at yields, they've calmed down from the places we were in the prior few weeks. we're seeing the ten-year note yield below that 5%, even though the employment cost index, eci, comes in a little firmer consumer confidence also came in a little better, which was a bit of a surprise. but nothing that really steers the fed, for instance, away, which just kicks off a two-day meeting, to pausing tomorrow and thinking about a too hot economy at this point. >> we'll be looking for the commentary, of course, as the market's betting on nothing happening tomorrow. topping the tape today, the next leadership trend for stocks, b of a says now is crucial time for s&p equal weight and individual stocks to prove they can hold up the market along with mega cap peers. let's bring in mike santoli as

the spw is down on the year. >> it's down on the year until august or september, it was easy -- and i was arguing, like, it's also in an uptrend. it's not as much as the mega caps, but at its peak up 25% from last october lows now a lot of damage has been done under the surface really you have to go back to the bottom in 1998, which was that long-term capital management panic to see a 20% gain in the s&p that was narrower than this one so, it shows you why a lot of people thought there was a lot of staying power in the last couple of days the market is trying to give relief to those parts of the market they are outperforming you see banks, small caps, oversold, tax loss selling by mutual funds, people trying to see if the seasonal and oversold conditions can maybe kick in a little bit but i also think it's an issue of earnings power. i mean, really, it's not just

that, oh, we don't like the little ones. we like the big stocks it's the top stocks that also have the better earnings growth prospects. even though everyone, me included, points out how much cheaper the average stock is the equal-weighted s&p is at 14 times earnings versus 17. >> i think it's important as i highlighted the ten-year yield is below 5%. some stabilization and let the market focus on earnings power. >> no doubt about it it's got to stay calm. i keep pointing to 4.8 i know that's not like a magic, technical level but it hasn't come in below that in the last week plus. it hasn't ticked below it, even though it's sort of come off the boil that would sort of look a little more like a short-term peak on the chart. it's definitely helpful it hasn't gone up it's definitely helpful you're seeing some interest in people owning duration at that level and maybe we could see if it builds on it >> really quick on the generals of the mega cap tech, nvidia below 400 today. btig just came out and said

maybe go back and revisit the 200-day. a couple weeks ago we were talking about it, i think, when it had one of those rough days after earnings they said, if it goes down to 350, it's still in an uptrend. it's going to be painful there's so much air under it it gapped higher from 300 on that earnings report and it looks like this massive island on the chart you have to kind of keep it in longer term perspective, but it's by far the biggest detractor from the s&p today along with apple and microsoft >> mike, thanks. talk in a bit. mike santoli let's turn to this week's -- to tomorrow's fed rate decision our next guest says a pause on deck, keeping an ear out from signals that the hike cycle might be over saying the rise in treasury yields can serve as a further hike joining us, vincent reinhart it's great to have you back. kind of echoes with what nick said in "the journal" earlier this week that this rise at the

long end might ameliorate the need for another hike that was in the fed's projections. >> a lot of mights and mays in there. there's a case to be made that a higher ten-year yield actually is a restraint on activity because it's about risk. investors a little more worried, correlations are different so, they manned a bigger term premium on treasury yields that means you get more policy restraint for the same short rate because the yield curve is a little more upward sloped. it might be that it could be more crowding out, that we are worried about government spending, we're worried about big debt and deficits that actually may be, again, a reason for the fed not actually have to carry -- carry it forward. they've got time they said they would do a quarter point by the end of the year it's not the end of the year they got one more meeting.

they hate surprises. >> what did you make of yellen saying the long end -- the term premium is largely about economic growth. there's been a lot of pushback, bond vigilantes say big rates lead the world it's not just about economic growth and rates rising in all countries. >> so, look, the nominal yield on the ten-year treasury is part inflation compensation, it's part real yield. something about the state of our macro economy. and it's part compensation for risk taking. now, when secretary yellen was chair of the federal reserve, the whole ten-year, the risk premium was negative it's not that world anymore. investors are increasingly going to want to get compensated for risk that lifts all boats so, it's both activity and --

when we talk about economic activity, that includes how much people are doing and how much the government can borrowing so, secretary yellen should look into her own house, too. she's putting a big demand on the market to absorb all that treasury issue that's part of the reason real rates are higher, too. so, yes, some of it is real. but some of it is also risk premium. and, by the way, there's a little bit more inflation compensation just look at the index, compare nominal to treasury yields to inflation protected securities a little creep upward in inflation protection. >> are there going to be buyers for all the debt, especially going into next year, which is going to have to be another big year of issuance do you think we could get to a point where the fed will have to switch its takt when it comes to quantitative tightening because of concerns about that >> yeah. so, you're packing in a lot in

that question, sara. i think a big part of it is, why would an investor hold government debt? they've got to be confident about the path for future government debt and they also have to be confident that it's a process that governs it so it won't get out of control the bad news is the path is pretty much parabolic. it looks like a fighter jet taking off the carrier just goes straight up. meanwhile, the process is broken are you confident there won't be a government shutdown on november 17th? probably not but over the next three months and, oh, by the way, how many debt ceiling standoffs have we had? is this a government that would be willing to control the path for debt we got a bad path, we got a bad

process. that means that at some point investors are going to get restive. not yet. u.s. dollar is a safe haven asset. but it's not forever the more we issue debt well in excess of our gdp growth, our footprint to be able to pay for it, the more that brings that day forward. so the answer is for now, yes. over the long haul, no if you're pricing your decision today, take into account there's going to be rocky road ahead >> maybe something the fed chair comments on tomorrow, in about 24 hours vincent, thank you good to chat >> thanks, carl. turning to the latest in the middle east, israeli forces and hamas continuing to clash right now in gaza. nbc foreign correspondent josh l lederman is on the ground in

jerusalem. josh, what can you tell us >> reporter: israeli military continues to bombard the gaza strip with hundreds of targets hit overnight. we're in jerusalem where you can see smoke behind me. we think that's an unrelated fire things in jerusalem seem to be very calm. in the gaza strip, israel's military says it was able to wipe out a senior hamas commander who runs a battalion that is part of the hamas northern brigade this coming as the entire region is really on alert for more violence israel saying it shot down this morning some missiles and a drone headed this way from the red sea. there is a lot of speculation that might have been launched by the houthis in yemen, another iranian-backed group opposed to israel's war in the gaza strip we are continuing to see the humanitarian crisis deteriorate in gaza with reports of yet another air strike today that has killed what palestinian medical officials say was a large number of people our teams on the ground are

trying to figure out exactly what happened with that strike, but it comes as more humanitarian trucks are timely expected to enter the gaza strip today. we've seen israel commit the number of trucks it will allow in through the egyptian border will increase dramatically over the last few days we're starting to move from the neighborhood of 10 to 20 trucks to closer to 50 trucks a day aid groups on the ground in gaza say it's just a drop in the bucket compared to what they need but that aid will be quickly put to use as more and more medical facilities in the gaza strip are going out of service because either they don't have the supplies to take care of patients or they no longer have electricity to try to operate those facilities with aid groups and the hamas organization in gaza saying as of now, no fuel has been allowed into gaza as part of those deliveries of humanitarian aid >> josh, as we try to figure out how long this operation and mission will last, the israeli government has made it clear their goal is to eliminate the terrorist group of hamas

so, how big is it? how widespread any sense of what the scale and scope of this looks like >> reporter: israeli officials have been indicating they think this could go on, frankly, for months we heard a short while ago from israel's national security adviser who said they're not anywhere near the end of this. they think this is going to be a long war the challenges inherent in achieving these goals remain there's been so many questions about whether there could be potential additional hostage release. we saw yesterday israel freed one unisraeli troop. the national security adviser saying there is no cease-fire on the horizon, no hostage deal currently on the horizon israel signaling it plans to go full bore in achieving its goals in it the gaza strip, which include completely eliminating the group hamas. >> thank you, david. appreciate the update. still to come this morning, pinterest surging on the back of

results. are they experiencing the same uncertainty the ad market as meta and snap? we'll talk to bill ready next when he joins us in a cnbc exclusive. watching ulta. one wall street firm calling the stock the best name to buy in the beauty space we'll talk to an analyst when "squawk on the street" comes right back dow is negative again, down 12 points - [soldier] take a look at this! - they've left us a gift. - [soldier] i think we misjudged them. - i love horses. (birds chirping) - [soldier] we should open the gate. - let's see what charlotte thinks.

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pinterest is a big earnings mover. best day in three years. q3 sales topping estimate, ebs of 20 cents, better than the 20 cents expected now the street is turning a bit bullish. stiefel got ahead of the move yesterday, upgraded to buy based on positive commentary based on digital ads, mostly from amazon. b of a goes to buy saying pinterest has a leg up on the competition with better expense attrition. for more on the quarter, let's get to our senior media and tech correspondent, julia boorstin who joins us with the ceo.

hi, julia. >> hi, carl. i'm joined by bill ready, the ceo of pinterest thank you for joining us today on the heels of these better-than-expected results i want to start off with that top line-up side what was the key factor that accelerated revenue growth faster than anticipated? >> it's really two-fold. on the one hand with users we're finding our best product fit in years. we've hit an all-time high on monthly active users the core of the product driving more engagement, more relevancy for users is working we're flowing that through to the ad platform where we're driving more clicks, conversions for our ad partners as users are able to take more action on our platform, find more of what they're shopping for so, we're seeing that really resonate on both the user and advertiser side of the platform. that's behind the solid results we put up. >>. >> bill, i know you've been working to diversify your advertiser base. where are you seeing the

greatest strength and improvement in terms of ad spending >> you know, retailers have been a core source of strength for us largest contributor to our growth and so i've talked about taking pinterest from digital window shopping, which was historically great for discovery, but the actionability was low. after bringing in more of the actionability, that means users cannot only find what they're shopping for on pinterest, they can increasingly take action on it, which is great for the user and also great for advertisers, particularly retailers >> now, bill, i want to talk about your guidance for the fourth quarter there's a lot of attention and some warnings we heard from snap as well as meta about the uncertainty and the fact that advertisers, some brand advertisers did pause spending around the israel/hamas war and the start of that conflict you mentioned a little bit about this tell us what you're seeing in the fourth quarter and the impact you expect because of that war in the middle east.

>> well, you know, advertisers do respond to major geopolitical situations especially when as tragic as what's playing out in israel and gaza right now we did see a momentary pause when the situation first started. we're seeing advertisers largely return in addition to stabilization and the ad market, we also have a lot of product momentum that is driving our results. as we're bringing more of the actionability with things like mobile deplanks, we talked about direct links of investor day where advertisers are seeing 88% increase in clicks from our direct links that's causing advertisers to lean into more of the actionability we're bringing to the platform that's created a night tailwind. three quarters in a row of acceleration in the business with everything we see, we have confidence in our ability to continue executing as we go into q4 >> so, given that focus on shopping, do you think you're better positioned for this

geopolitical instability and any impact it might have than, say, a snap or a meta >> oftentimes, you know, and at the conversion end of the consumer journey, the performance advertising is more durable. it's leaning into the performance end of our ad stack, driving more clicks and conversions. and that's now more than 60% of our revenue. that tends to be more durable. again, we've made really great progress there really great momentum with gen z retailers like pac sun saw 70% lift in attributable conversion. that's one example significant improvement advertisers see with our platform so we see that as more durable. we're not immune if something were to take a major turn for the worse. >> you mentioned a.i. a number of times on the call yesterday

you mentioned a.i. is already helping improve results. give us a window into the future, q4 next year how much more do you think a.i. tools could really impact the company? >> a.i. has become a core strength for us. we have really unique user experiences on our platform. notably users are coming to our platform to shop not just at the moment of purchase but to plan their shopping journeys well before they decide to buy that's a magic moment for the advertiser to engage the user when they have clear commercial intent but haven't yet decided what to buy or where they're going to buy it. we're using a.i. to drive significant increase in relevancy for user recommendations and the ads. our models are 100 times larger than they were a year ago using large language models, gpus and that's led to relevancy issues approximately 10 percentage point lift using these models.

usually you measure progress in these areas on beta points seeing 10% improvement is phenomenal a.i. is a core strength for us, driving great relevancy for users and much more performance for advertisers. we think there's a lot more to go we're in the early innings with this with much more positivity ahead. >> one question i have to ask you before we're out of time is about amazon this quarter is the first full quarter since you announced your partnership with amazon to open the doors to third-party advertising. you've said you'll see the full impact in q1 of next year. what kind of impact can investors expect from this partnership with amazon? looking beyond q1, how important will that amazon deal be for your ad revenue? >> one of the things we've done is prove out when users in a commercial mindset, which more than half users on pinterest are there to shop, ads can be great content. so, as we're leaning into ads as great relevant content for shoppers on our platform, we

found that it really matters to make sure we have great inventory of the things they're looking for. and amazon has been a great partner on that for some time now. we've opened our platform for third-party ad demand. we think that can bring a lot more relevant content with amazon ads and setting the stage to expand into additional partnerships as we go into next year to get the right, relevant inventory for those users shopping on our platform we feel good about the progress overall opening up third-party ads with more upside as we move into '24 >> well, bill, we hope you'll come back and tell us about some of the other partnerships in the works. bill ready, ceo of pinterest thank you for joining us on the better-than-expected results sara, over to you. >> thank you, julia. with the stock up more than 17%. up next, what a change in japan's monetary policy signals about global growth and inflation. plus, watch caterpillar today, weighing on the dow

the worst performing component earnings were a beat but the stock getting hit by weaker bookings, growth in dealer inventories. the commentary on china. that's a four-month low on cat you can read more on cnbc.com. when you're looking for answers, it's good to have help. because the right

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some data to highlight eurozone inflation numbers come in late. good for ecb, 2.9% was the inflation number the economy starting to shrink the eu's flash estimate for third quarter gdp indicating a ten-basis-point contraction versus the forecast of stagnating. bank of japan overnight deciding to hold interest rates steady despite aiming for zero percent target yield for ten-year bond, they're allowing flexibility now of up to 1% due to extremely high uncertainties surrounding global economies the bottom line is they didn't go as far as they could have when it comes to adjusting or even scrapping their yield curve control, which is there to try to boost growth and inflation. but now that growth is higher and inflation is higher, there are calls for them to go farther. they stopped short of going as far as they could have, though they adjusted it a little bit. as a result, the yen's weaker. and i think that tells you that

they probably could have gone a little further. >> yeah. >> they're enjoying the weak yen and stimulation. >> a lot of commentary saying maybe we would have expected the boj to have a little more dotee. at same time, we got the china numbers overnight. interesting stuff going on around the world. a couple hours into trading, the s&p is trying to hang onto gains. let's go post to post with bob pisani. >> it's been very choppy trading. appear lot influenced by the earnings caterpillar is pushing around some machinery stocks. cummins makes diesel engines all these companies that are in the industrial engine business on the downside. i keep waiting for a little bounce in the airlines this has been a miserable month here but nothing here delta is down 15%, 16% this month. it's essentially about a point or two, sitting at a new low here most of them had no bounce at

all this month despite a terrible month gold had an incredible run on all this geopolitical uncertainty. so, beginning of october we were 1800 or so, we went to 2,000 gold has been looking a little toppy. some are moving down here's a really good example, though, of difficulty of playing commodities. gold goes up, commodity stocks, gold stocks go up a little bit but not as much because stocks behave a little different than commodities. you can have gold, the xhod going up, but gold stocks are still stocks they behave differently than just gold by itself. this is a very good example. gold stocks did not rally nearly as much as gold did because of the poor environment for equities that we saw in october. here's simon property. the reits are doing better today.

decent results most important thing here is things like rents, not just the interest rate environment, it's rents. can you raise the rent they had 2.9% increase in rent year over year and that's what's moving them. it's been a horrible month, again, for the reits the home builders also had a tough month overall. they're moving up a little bit i see lennar, pulte are up about 2% again, lennar was 130 in july. now lennar is like 106 so, you see the huge damage that's been done this is one of the reasons i'm a little optimistic going into november because of the enormous amount of technical damage we've already seen in the market it's always going into that seasonally strong period back to you. >> one sector i'm seeing higher for the month, which is utilities. bob, thank you up next, da davidson doubling down on ulta, calling the bottom after a 20% drop this year we'll talk to the analyst behind the call

welcome back let's get a market flash on shares of embev. brandon has been tracking that. >> shares are up 5%, on pace for best intraday performance since november of 2022 the quarter mixed refvenue beat revenue in the u.s. dropping over 13% as the bud light boycott from summer continues. what's actually boosting the stock? well, despite continued weakness in the u.s., the company reaffirmed guidance. and announced a $1 billion share buyback. it's a possible sign the company expects to offset some issues it's having in north america

with momentum from the global growth they're seeing in the market it's a nonalcoholic offering showing strength maybe even some brand recovery for bud light. shares, though, as you can see, still down just about 5.5% year-to-date. >> really interesting note out of koehn about the nonalcoholic beer market growing pretty quickly. let's get a news update with bertha coombs. oral arguments are under way in a supreme court case over whether public officials can block other users on social media. the high court is weighing cases from california and michigan over whether the blocking violates the right to free speech comes after the supreme court dismissed an earlier case concerning then president donald trump's blocking of users on twitter which, of course, now known as x. thousands of afghan nationals have amassed on pakistan's border ahead of a november 1st deadline for them

to leave the country the undocumented afghans moved to pakistan to escape war and other conflicts but pakistan is pushing them out, claiming they pose a security issue in the country. an estimated 1.7 million afghans in pakistan are undocumented. and the philadelphia 76ers reportedly have agreed to a trade to send star guard james harden to his hometown in los angeles to the clippers. the 76ers will receive multiple draft picks in return, along with four veteran players. according to an espn report. the trade has been a long time coming harden requested to leave philly over the summer. i don't want to see what it's going to look like when he's back playing in philly i can't imagine they would welcome him terribly warmly. >> i don't know. he's very good >> he is, but, you know, philly fans - >> i know. >> they're tough.

>> they're tough ask jim cramer thank you, bertha. a bull call on ulta bufk from da davidson grabbing our attention. the firm pointing to favorable market dynamics and consistent financials including strong operating margins on the high end of discretionary retail despite underperforming the sector overall year-to-date. the analyst on the call joins us, da davidson's michael baker. forever it was the high flyer, growth was good. and then came the concerns about comps and earnings growth slowing down and the stock has been punished. why do you think we're at a turning point? >> hi, sara. thank you for having me. well, we just think that the stock has been washed out. it add the just off an all-time low valuation on a relative pe basis. in other words, it's almost never been cheaper versus the market last week it hit that all-time low. we elevated as part of our best in breed to find exactly stocks like this, which is high quality

companies that we run through a pretty rigorous screen of 12 criteria but trade one of those criteria is a positive risk/reward. with the stock having underperformed year-to-date -- by the way, estimates have gone up, stock has gone down. that means the valuation is much more compelling. this fits all 12 of the criteria we're looking for. we thought now is just the right time. >> i wonder, you know, in beauty, if you were looking at, say, e.l.f. and ulta, can you ladder which ones you would prefer >> well, being a retail analyst the name i cover is ulta e.l.t. and el are covered by one of my colleagues i know we like those names as well we like the whole beauty segment right now. within retailers, ulta is our preferred name in fact, one of our preferred names among big box retailers just given the long-term fundamentals combined with the valuation, which i think most -- ulta is a really strong company.

to sara's point, high flyer trading at a high valuation. it's compelling if we leave the e in the denominator but we do we think the market at this valuation is pricing in at least 20% miss to earnings next year we just don't think that's the case. >> i feel like ulta is always susceptible to, well, is this as good as it gets when business is going really well. we saw that, didn't we, in 2022? with i realize you say estimates are going up but it got that premium valuation when business had never been better. >> right like a lot of retailers, 2021-22, best years ever we are coming off that a little. if we look at it from a margin standpoint, we're over 16% in 2022 we don't expect that to be sustainable. in fact, it will be in the 14% to 15% range but that's where we think they bottom out we think this company should be in that 14% to 15% range a little higher than

pre-pandemic, i think in 2017 and '18 they were in the 13% range. i think the market is assuming the margins keep falling from where they are this year our view is that for a number of structural reasons, this is a more profitable company today than they were pre-pandemic. therefore, it's somewhere in this 14% to 15% range is sustainable. not only this year but in future years. >> all right high conviction call, michael baker. thank you for joining us $495 price target on ulta from da davidson. when we come back on "squawk on the street," shein defending its relationship with forever 21 we'll hear from shein's top two executives on that new partnership and how they're trying to disrupt the fashion industry when we come right back

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the right message at the right time, every time. ( ♪♪ ) constant contact. helping the small stand tall. expanding its partnership with forever 21 in recent days, designing and distributing the brand's clothes on its platform.

i spoke to donald tang and marcelo claure about how shein is trying to disrupt retail. >> this is the first time we're actually going to design, make, distribute exclusively on our site of a brand that we co-own. >> forever 21. >> forever 21. >> you're going to make forever 21 ex-shein. >> that's right. >> and the store within the store concept. >> store within store is going to come later stage and return is going to come in the later stage. right now we are testing and doing the forever 21 products on our site not only we sell the products on marketplace, we actually design and make, manufacture and distribute on our site >> why do you need to do deals like this? >> because we want to -- we want to see if supply chain as a service can actually be

something that other brands would welcome and would utilize in becoming something very efficient and better for the consumers, because this way we can actually have many more products, many more scus for the consumer to pick. >> how important do you think is it for the growth story, deals like this? we saw another ip buying from british retailer. >> one advantage is we're very close to our customers we can understand where the trends are and we listen to them another international example, we have launched something called a marketplace and consumers came to us and said, look, we love buying our fashion from shein but we also want to buy what we put in our homes. we also want to buybeauty products therefore we decided to basically open the platform to thousands and thousands of sellers who now want to use the platform to reach millions and millions of customers. and it's more of the same. in this case, consumers are telling us, you know, there are

certain brands we like, that we like to see them in the shein platform and it's the perfect example of listening to customers, they love the brand forever 21. >> i also asked them about growth specifically in the face of tighter regulatory conditions and deteriorating relations between the u.s. and china and how shein's business model separates it from its competitors. listen. >> we're still growing in a very healthy, very robust way so, value for money is still one of the key themes our business affordability, accessibility and availability. >> still growing. >> still growing >> we're able to bring a lot more for less. to make sure it's clear, it's based on a unique business model. traditional retail in many cases, most of the capital is in working capital, it's in inventory, it's in stuff they didn't do a good job forecasting that eventually got discounted

234 this case, we're designing product based on customer needs. and that allows us to bring affordable prices way better than traditional retail, which means, you know, and value for money applies for everybody. everybody likes to be able to get more for less. that's a huge value proposition all over the world >> that game-changing business model often referred to as on-demand fashion. although a lot of people call it fast fashion, a tag both claure and tang want to take away from the brand as they think about the global footprint. >> let's put it this way traditional retail is an old-fashioned business that business basically mass-produced apparel products in -- with predetermined size. when you're doing that, sometimes you get it right you don't have enough. sometimes you get it wrong, you have too much.

>> the inventory management is the problem. >> inventory management and also supply chain management is the challenge. fast fashion is evolution of that they do better, they do faster, they have shorter cycles from what we did, when we first got started, we focused on the other side of the direction, that we focus on demand. customer demand. the tech-enabled platform we have, enables us to read the signals. it's a proprietary technology we called large scale automated test and reorder enables us to read the signal of demand, connect with an app and to do it together to be able to respond and measure and respond the real demand in real time so we don't have -- we minimize the inventory. so the inventory, we also -- we also want to give wide variety

of all kinds of products that customers desire >> that's called on demand in the way of on demand, what we do is as we eliminate or minimize the inventory, that we actually can pass the cost savings to the consumers so it's consumer, accessibility, availability and affordability. >> this is the new model this is what attracted you to shein. do you think it will change the fashion industry >> i think it started. most of our customers utilize an app to buy their fashion goods, and it's fascinating to see a company that a lot of people say one of the misconceptions is we do manufacturing in china. and what i love about the company, this is the most global company i've ever seen, have been engaged with. we have thousands of designers all over the world who are designing on behalf of shein and we basically manufacture those

products in china, in brazil, in turkey today most manufacturing is in china but we're expanding to other parts and we sell off to over 150 million customers in over 150 different countries, so if there was a company that's global, shein is one of the most global companies i've ever had a chance to work with or be involved with. >> really trying to emphasize, carl, the global nature of shein, the fact they are diversifying their supply chain to places like brazil and get closer to the consumer and help explain their business model to investors, it's not fast fashion, it's on-demand fashion to figure out in real time what the demand is and get it cheaply to people using their own factories and then away from shein company i did get a look at an investor letter the company sent to investors in the last few days, not from the company, but it came from the company. i did not receive it from the

company. but record profit for the first three quarters of 2023, net profit year to date, and also in this update it stays business in q3 accelerated faster than previous quarters. they clearly want to send a message because the u.s. is the largest market to washington and to potentially investors as it gears up for an ipo. >> fascinated by one of the most highly sought after executives choosing this as his next chapter, too >> he said he's been interested in shein since he was at softbank he's one of the biggest individual investors he went to china and visited tons of factories to make sure it all checked out and everything was okay, and then he ran the latin american business, opened the brazil market, and is now taking it to the next level trying to do that. >> i imagine we'll hear more about them in the coming quarters >> they wouldn't comment on the ipo. nothing to saythere. still to come, the spookiest

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it has been a scary october for tech the nasdaq headed for a more than 3% decline this month, the biggest drop of the three major indices. our deirdre bosa lay out the bare case that is could bring tech down more in today's "tech check. hey, dee call it the spookiest bear cases in tech. it's halloween, after all. the morning note gave us this idea plausible but low probability down side scenarios.

let's take big tech first. what if the ai hype cycle is all hype and struggles to move beyond chatbots or the flip side, too powerful and gets shut down, overly regulated amazon, google evaporate, nvidia share price crashes. mark zuckerberg pivots back to the metaverse to future proof the company. earmarks billions of dollars more for reality labs. now aside from major ai blow-out, bear cases around the edges to consider, what if amazon, aws growth, hasn't bottomed and gives up market share to google cloud, the third place player or the rise of shein and tiktok take marketmu, soft microsoft can't charge as much as it wants for co-pilot the company is losing $20 a month on average the spooky case is customers find alternatives or never want to pay up. finally, there's apple, the

giant with an outsized influence on the broader markets this one may be the scariest to consider because its earnings are coming up this week and there are dark clouds on the horizon. one risk that has come up during google's antitrust trial is the billions of dollars google pays apple to the default search engine or option on safari now that payment at more than $20 billion gives apple a very steady high margin stream for its all-important revenue services it accounts for 35% of gross income if that goes away, nightmare in cupertino. another risk getting focus these days as well which you'll hear, concerns over china. the rising geopolitical tensions, the ban on the use of iphones by government employees, crackdown on foxcon and huawei's comeback check out our "tech check" weekly for an in-depth view of

apple's china risk guys, like i said, they're plausible but low probabilities. there are many more we could go into the case for big tech because, as you said, carl, as you started out saying, a scary october and second half for these names. >> deirdre, the street, wall street analyst, largely bullish on all the names still >> yes and maybe that's another risk as well, right, once everyone gets complacent largely bullish on these names, and that's why every once in a while it's good to consider some of these risks and what better excuse than halloween. >> dee, thanks deirdre bosa joining us on "tech check" today some of the street commentary about the a.pple event last night, from wells, weird, desperate, taking pot shots at intel, maybe trying to get interest in their mac lineup ahead of the quarter later this week >> they emphasize the m3 chip and the new capability there

they did call it -- what did they call it, a scary event? >> scary fast. >> they brought on the jokes themselves as far as the markets, day one of a two-day fed meeting comes out tomorrow that's the big event obviously overnight, the question is just the tone, because we don't expect the fed to do anything but how will they frame where they're going to do more in december >> it explains the narrow range today. to post 9 and the judge. carl, thanks so much welcome to "the halftime report." i'm scott wapner front and center this hour, after three straight down months for stocks, some much-needed relief finally in sight. the investment committee debating the road ahead as several members make newport f portfolio moves. lot of stuff going on today. check the markets. we've been mixed for much of the session. the dow is positive. the nasdaq a touch negative, 4.86 the yield on the ten-year note three straight months of declines it's been a bit of a rough

stretch. mo w