cents. i think demand in china was one of the big concerns off some economic numbers. wti also settled below its 200-day moving average yesterday for the first time since july. folks, we're going to wrap things up right now. it's been a fun morning. we have been glad you have been here with us. we'll see you tomorrow. right now, it's time for "squawk on the street." ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at post nine of the new york stock exchange. the dow up seven days in a row, longest streak since july. another wave of earnings and fed speak today, including fed chair powell this hour. oil approaching $75, lowest since june. our road map begins with stocks trying to build on this rally. s&p and nasdaq are riding their longest daily win streaks since 2021. microsoft shares closing at another record high.

that follows fresh optimism about growth from a key partner in its efforts in a.i. and we're continueding to kp an eye on the housing sector. mortgage rates are retreating. they posted their biggest one-week drop in over a year. speaking of which, let's get to the markets extending their win streak. a lot of that's going to circulate around. >> it was a data dog rally. data dog said something that was really key, which is that the optimization is declining. that's all enterprise software speak, but basically said there was a lull in orders. orders are back. that reverberated. everybody from service now to salesforce to amazon. >> microsoft. >> alphabet and microsoft. you got this little data dog, $33 billion company. in the old days, that was big. but what they're saying is there had been a problem, and we knew there was a problem with enterprise software, with devsec

ops, so to speak. that, apparently, is over, and that's allowing a lot of companies to breathe. that had been the theme of the quarter until yesterday. >> see, we can take that much of a narrative from data dog? >> that's really important. that's where the bonds come in. if the bonds weren't going the way of the bulls, i think it would have been no pin action. we'd knock the one pin and nothing else happened. but when you have the bonds going, people are willing to extrapolate all sorts of things, and that's what happened yesterday. >> right. so, you had that momentum being created. >> yeah, the bonds allow you to dream, you know? >> allow to dream. >> some people dream dreams of just data dog. i dream dreams of bigger things. >> you do. >> yes, i do. data dog was downgraded by some sort of -- >> mizuho does cut to neutral. >> you're cutting to neutral a

company that is at the absolute heart of a lot of both security and observability is the word that people use of your dashboard. and there are a couple companies that do that, obviously. david, when we look at enterprise software, you and i both know that there are -- there's, like, a dozen companies ready to come public right now, including databricks, which is $43 billion, and these are all companies that do the same thing, which is they allow you to observe how a.i. is doing within your organization. and i don't think there's anything more important right now. even apple, right now, front and center, morgan stanley saying don't worry about our a.i., but when you look at amazon web services, google cloud, which is trying to recover from a lot of bad publicity, we don't know why, and when you look at azure, it's all about observability. are people really using it? how's it being used? it's very impressive. >> right. >> mongodb. >> use of a.i., the measurement tools it provides, the data, these are the what the amenities software companies are focused

on, are enabling you to respond even more quickly. >> right. >> whether it's to your customers or employees, i guess. >> exactly, yes. and by the way, discover a hack internally. the idea is don't ever have another clorox. don't know where hidden valley ranch is hidden, so to speak. >> does it keep going, jim? i mean, first of all, the idea that these companies will actually be able to get to the public markets, for example, is still unclear, to say the least. >> i think that databricks is going to come public at a $50 billion valuation. >> $50 billion? >> yeah. because databricks is, in many ways, the a.i. way to rent the cloud. remember, a lot of people feel that snowflake is just the way to rent the cloud. an a.i. way to rent it where you have a lot of information and observability -- remember, david, you're talking about trillions of pieces of data. no human can do it. you can't do it. but snowflake is having a good run here, but the a.i. play is databricks, and it's not public. i want a piece of databricks. everyone should.

>> here, we're not talking as much about the generative a.i. that we have all been enamored with for the last nine months. >> right. we're talking about using a.i. to be able to figure out how your business is doing. i mean, look, this morning, ralph lauren reported a good quarter, and i think one of the reasons is they did direct to consumer. they're much more technology-oriented than most people. you can go into a virtual ralph lauren store on the web and fit yourself. there's a great plurality of their business is direct to consumer. what is that? when you see that, that means you can analyze who's coming, who's using, realtime, and you make your argument, listen, maybe a bank should be realtime, and that's absolutely true. but everybody wants to have realtime observability, and that is exactly what we saw from data dog. i wish they were named something else. there are a lot of companies that were trying to buy them before they came public, and the company had a -- it was a remarkable quarter. >> quite a reaction on the earnings print as we said the other day. rl does reiterate the full-year

guide. jim, everything you're saying is about companies getting more efficient. they went through their earnings recession. they're seeing some margin recovery. unemployment, strong. gdp, strong. what is there to be worried about now? >> these are productivity gains. let's be sure people understand that it's not like you're adding people. you're just being sure where your money is coming in and who's looking at what. this is something adobe and service now had before everybody, but now it's generally for everyone. that's kind of -- there is, i think, if you're not spending, and this was the key line, if you're still optimizing, meaning, if you're still just spending a little bit, you're getting left behind because the world's going so fast. this is something that jensen wa huang said over and over again, which is, if you don't spend, you're going to be left behind. companies tried to get back spending, but now they can't anymore. that was the theme of yesterday. that was a remarkable theme, because it was the opposite of

what we heard even three weeks ago, which is why it was so encouraging. there's jensen. he's doing so well. his hair's gone white. i don't know why, man. he'scrushing it. what do i know? >> sometimes thams t happens ju in general. >> jay powell. >> days pass, the hair turns. jay powell has great hair. >> great guy, jay. >> not our buddy over here. >> no. not yet. >> stay in the game with just for men. >> roblox was not this. >> bringing johnny cash vibes today a little bit. >> yeah. little variation. it's all about sartorial variation. >> "ring of fire." >> i think some of the stuff that dylan did with johnny cash was -- >> amazing, that one song. >> "northern"? >> yes. yeah. >> powerful. >> plus the cover of "hurt." >> and then warner bros. discovery. >> and then there's warner bros. discovery, speaking of johnny cash. >> and hurt.

>> they have massive cash flow. fantastic. >> the stock, listen, the calls have been going on, on warner bros. discovery, and we might as well talk about it because the stock has been moving all over the place. it came in as a reasonably decent quarter, then the call started, and the word began. let me give you some of the basics of the quarter. a lot of analysts saying, not bad, mixed. they did lose 700,000 subs in direct to consumer. free cash flow is quite strong. let's call it 2 $2.1 billion. that was above the estimates of many of the analysts that follow the company. ad revenue, we know it's a tough market for advertising for, i hate to say, old media, but just in general, broadly speaking, although not as much for the metas of the world. down 13%. but what got people worried on the call was, listen, we're very focused, as you know, it's not the market cap of this company. it's the debt load where they stand. there had been an expectation that they would have come in at a lower leverage ratio than they did. they came in 4-2, all in, summit

anticipates they might be as low as 3-8, ending the year as low as 3.5 going into next year. on the call, the cfo said, "we're unlikely to hit our leverage target by the end of '24 without meaningful recovery of the tv ad market." let's take a listen to that. i think we have a clip. >> you got that? good stuff. >> from today's perspective, we will hit our target leverage range by the owned of 2024 without a meaningful recovery of the tv ad market. >> all right. i said it, and he said it. but you heard it from him as well. now you can believe me. that was what started this decline. now, by the way, on the wall, they said, listen, we're not saying our ebitda is going to be lower. it's just a function of where we are in the ad market, but, you know, there had been this expectation that by the end of next year, you get to as low as at least three, maybe even below

three times, and that's been an important part of the story here, because the lower you get the leverage, the more free cash flow, you know, the more your interest payments decline, jim, and you have more money to do other things with, including, perhaps, being as aggressive as some of the other parts of the industry really suffer. a mixed quarter overall. not bad, really. free cash flow, strong. we're not clear, the benefit of not having to pay for content while the strikes were going on is also a key. so, that will come back at some point in terms of actually having to spend more money. >> they do have a -- disney only made about $1.5 billion in free cash flow. >> but the story here is cut, cut, cut, right? optimize, efficiency, cut, get free cash flow up, retire as much debt as you can at a discount, which they have been doing, reduce your overall debt load, and have your leverage ratio come down. so, that's where investors have

been very focused with warner bros. discovery. we talk about it a lot. market cap-wise, it's not that large, but they have 40-plus billion in debt, down from where it was been. i want to check that, actually. >> you haven't had your john malone interview. won't this be crucial? >> this will be important, his view of what mr. zaslav has been doing at warner bros. discovery, and what the future holds, not just for that company but for the overall ecosystem of direct-to-consumer, entertainment there, sports and everything else. tomorrow is going to be a good day. we got malone, maffei, chris winfrey's first interview. he's the ceo of charter. he hasn't talked publicly since they resolved that dispute with disney that we talked about. >> that would be great. >> they really did, perhaps, present a new template for how the distributors and the programmers are going to be working together. and then, also, sirius rolling out a new -- what are they rolling out, carrie, a new

format? what are we talking? at sirius. new branding. so, yeah. got that. >> okay. >> meantime, "barbie," $1 $1.5 billion, highest grossing warner movie ever. >> i think one of the problems with this story is you had these different items. i had this same problem with mattel. less birkinstock. how much did this movie have? i think a lot of people felt, well, look, everybody benefitted, but people felt mattel only got a quarter benefit. here, there were other things that made it so it didn't resonate as much, and the next thing you know, you have a mattel that is still down from when it reported, and a warner brothers that seems like the com is in free fall, but obviously, why not? this is a quarter where people said, things are choppy. i could go through. i've got robinhood's choppy.

although, of course, they won't admit it, but the numbers are choppy. upstart was choppy there. they came somewhat to admit it. i've got a lot of choppies. and i think that that's -- >> we obviously get disney after the close today, guys. >> choppy. >> i don't know. what are you expecting, jim? do you have an expectation there in terms of -- >> no, but i know what i need to see. >> which is? >> i need to see some strategic partnerships. and without strategic partnerships, that $84 stock is $80, flirting with $79, until we hear what nelson peltz wants to do. >> right. >> and i think that's what i worry about. a strategic partnership will keep the wolves at bay. >> i don't know that you're going to get that strategic partnership announcement. you're talking something like espn, for example, today. >> then the stock goes to $80. what'd they do with dividend? a penny? >> you may get some language around it. i don't know that you're going to get an actual announcement of news specific to where, you know, joining with fill in the

blank. >> that doesn't -- then the stock doesn't go up. that stock needs that. otherwise, you're going to have the perlmutter, the peltz coalition wanting to put someone on. we had someone on yesterday saying -- that was jim stewart, saying what it would mean to have somebody in the boardroom that could be disruptive. and i was in one of those situations when i was disruptive. broke my heart. come home every day and say, i can't believe how bad things are. >> how about some of the kevin meyers comments about coming back and helping out? >> he's been involved. he and stags have both been involved. hugh johnston has just come in. you had a real void there when mccarthy left, and -- >> or maybe the void was there when she was there. >> may have been. that's an argument that certainly some would make. but he needed help, iger, and fast. >> that's not going to make nelson peltz like it more. that's a false narrative. >> that's an impressive hire, isn't it? >> i think it's a very impressive hire.

i think hugh johnston can go anywhere. people would take him anywhere. really good guy, and he's much less divisive -- there was like a divisiveness about disney. that's got to end, the divisiveness. >> we'll be watching closely. >> it was like minnie vs. mickey, kramer vs. kramer. >> 4.2 times net leverage. little higher. >> it's that one line about ad revenue? >> and not getting the leverage down to where people want it. >> all right. >> that's all it takes. >> "barbie." who made the money off "barbie"? a adam aron? travis kelce? travis kelce named "people" magazine's sexiest man. >> wait, jason? the offensive lineman? >> how'd you know that he plays offensive line? >> for the eagles. >> well, all i know is that even howie roseman loved him. >> that's a weird segue, but all right. take a look at the premarket.

so many names to get to. we're not going to get to them all, but we'll try. rivian, under armour, toast. in a moment. >> every one, we're going to get to. >> sing "ring of fire." rrection? -unnecessary! -unentered sick time? -unnecessary! -go! -unnecessary! -go! -unnecessary! -when you can take this phone, you'll be ready. -make the unnecessary, unnecessary. let your employees do their own payroll. ( ♪♪ ) morgan stanley is partnering with the women's tennis association to remove boundaries... ( ♪♪ ) because this game is for everyone.

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rose for the first time in a month, up 2.5. it's the biggest jump in purchase since june. >> i think that, look, people are on the sidelines, people feel like that things just went up way too fast. i like the horton comments yesterday. it was a great quarter. they said, listen, we're going to make more affordable homes. they had to do that because rates had gone way up. i think that the biggest problem is inventory. housing is still about 30% above where it was in 2019. jay powell wants to see it back to 2019. it's not good enough. anything that makes it so that the house price itself can go up, even if rates go down, wrong. jay doesn't want to see that. we got to go with what jay want. everybody else doesn't matter. i think that while this number was terrific that it went down a little bit, if affordability, we have to make it so that there's so much inventory that people have to cut. that's his goal in everything, and it's the same thing with used cars. it's working with food, of all things, believe it or not,

because of a bumper crop, but this must happen, and rents, the bloomberg piece yesterday about rents going down, i think, was significant, particularly in the hot markets. so, things are going his way, but not fast enough. that's why you still here these rear guard people say there may be another raise, even though the yield curve indicates not. david, i'm not satisfied yet that the parts of america that people feel have gotten overheated have really come down enough. i still think a working person is being hurt. >> when will you be satisfied? >> i'll be satisfied when there's a glut of cars, homes, and apartments. that all has to happen. >> meredith whitney, on with us yesterday, argues that is going to happen, because there are so many people over 50 who are going to down-size. they got $20 trillion in equity over the past 10 years. they're going to pay cash for their smaller town home, and you're going to see inventory or supply improve. >> periodically, i disagree with her, but this was a spot-on performance. dead right.

and i think that that's why powell wins, but it can't happen overnight. you don't just have a sudden glut of homes, sudden glut of apartments. you could get a sudden glut of autos, but because there was a strike, which is still hurting that industry, you're not -- rivian is not going to make up for it. and certainly, lucid is not. >> well, lucid, i mean, they're producing so -- what is it, 7,000? 7,000 automobiles? >> it's fungible. >> rivian is going to have a -- we'll be looking at rivian in a bit, but there's lucid. rivian shares are up. >> rivian has power. they told amazon, listen, you're not going to get all of our stuff. >> producing for more than just amazon in terms of the vans. >> that's the only positive ev story i've heard since musk started cutting prices. it's a positive ev story. what's the music playing? we have another 40 companies to cover. >> think about your "mad dash." >> toast is toast. i gave it away. >> yeah, toast is down 20 last

night. >> no upstart. gave that one away too. >> we'll get to some of those names. we will get cramer's "mad dash," countdown to the opening bell. busy wednesday setting up with a bunch of fed speak as well. ten-year continues to circulate are around 4.55%. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today. (birds chirping) go. and go and go and go. ( ♪ ♪ ) but what if you... stop?

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now i see who all that hard work was for... it was always for you. seeing you carry on our legacy— i'm so proud. at vanguard, you're more than just an investor, you're an owner. setting up the future for the ones you love. that's the value of ownership. take a look at some s&p gainers this morning. bunch of earnings movers on the list, but you'll see take two close to the top on some of this gta news. we'll get to some of that as well. opening bell coming up in just about five minutes, and you can catch us any time, anywhere, just follow the "squawk on the street: opening bell" podcast.

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we've observed softening consumer trends to date in q4 and particular challenges in europe, suggesting we may see a more muted seasonal uptick over the holidays. we are focused on controlling what we can control, being prudent about our costs, leaning into operational efficiencies, and continuing to drive innovation for our customers. >> all right, that was jamie iannone, the ceo of ebay on the call. that's the subject of your "mad dash." stock is going to be down. >> bummer. >> okay. thank you, jim. let's move on now. >> look, when you see -- there are certain words that you see and you just say, listen, i got to sell or knee-jerk. consumer demand in september and october was weak. cash flow, not what i wanted to hear. premature commentary in the

midst. >> what was the last thing? >> we always want to see accelerating free cash flow. and david, in general, volume uncertainty, global economy. these are all the things that just say, oh, man, i don't know, i'd rather be in costco. i'd rather bein amazon. i'd rather be in walmart. this is a retailer. >> it's a retailer. >> so, they are not an upstart. i love those. but i just think that the ebay file, done. >> you're not going to be picking that up for a while? >> no. i want you to stick a fork in it. >> okay. >> all right? stick a fork in ebay. >> i'll keep that in mind. >> i mean, enough, enough. it's like, how long -- can you just disappoint me forever? at a certain point, i'm going to take you off my screen. what? what am i saying that's wrong? i mean, i have a number -- just a second, will you? i want to take upstart on my screen. i want to take toast off my

screen. these are just -- they're not upstarts, and they're toast. >> we'll get to toast. we'll get to a bunch of big movers on results. >> there you go. i got the wrong up. >> cnbc realtime exchange, at the big board, it is sherman wil sherwin williams, and at the nasdaq, syntec optics. the bulls, once again, will make a run at 4,400, which is some year-end target around the street. >> yeah, look, i was listening to brad today, and he directly blames mike wilson for creating a shroud of negativity, and i don't know mike personally. i hear he's a super guy. that's the word on him. super. >> super? >> super. i'll take him out to dinner at del frisco's in rockefeller plaza if he wants to do that. >> that's a choice.

that's a go-to? del frisco's rockefeller center? >> for my wife's birthday, we're going there and then to "saturday night live," and i'm golden. this was the first birthday present i had done where she didn't say, oh, uh, thank you. >> good, that's nice. >> do you have the receipt? i have that. you bought that for me last year. that was a bad one this time. i forgot! looked nice. what are you doing? >> i'm looking at thing that are moving. >> all right. talk to me later. i think that this apple negative calls remind me of when you -- let's say you get something wrong. you can either dig your heels in and say, continue to hold it, the max, you can't get it. or you can just say, you know, the view of morgan stanley, which is the serious, still, the ultimate a.i. app, is one that resonates to me. and are they defensive about not

being a.i.? i think they have a lot of a.i. my suggestion, just for the record, is to have affinity a.i. let's say you want to -- you're on fantasy and you have a lot of players whose names you can't type in. well, you know, you just type the first three letters, it comes in. tim cook, the ceo, that's it. interesting idea. so, affinity a.i. may be something you want to look for, and remember, if it happens, you heard it here first. >> you were making fun on twitter today about those who told you to sell at $171. >> the keybanc. i brought the keybanc piece, not because i'm a mean, horrible guy who's also known as a blow torch, but apple -- earnings in line, results got below, cautious view, november 3rd. this is the apple piece. i took it from $177 to $171. and i only mention that because i'm a blowtorch who's mean and just felt like i should do it. >> that's quite a rebound.

that surpassed the october highs. >> people don't understand. it was about the service revenue being bigger than the imac and bigger than the mac and the wearables, bigger than the ipad altogether, but -- and that will happen this quarter. but they don't care about that. these are the same people that don't understand a lot of people in the philippines and indonesia and turkey and mexico and brazil, canada, these are all countries where they're setting records. they act as if the only record that matters is china, which, by the way, they took share from huawei. meanwhile, the government's letting a thousand flowers bloom. i don't know if they don't look at this as a sign, a token of goodwill. maybe this is the time that broadcom gets the high sign on vmware. what a great way to be able to show that the prc is on the team. >> it's true. i don't know that they're on the team, but i guess ahead of the meeting -- >> they're going to san francisco. everybody's going. >> there are expectations that broadcom will finally get the approval from the antitrust authorities in china to complete

its deal to acquire vmware. this is an interesting situation in that you made an election as an investor couple of weeks ago already, deciding how much cash and/or stock you wanted or what -- and you're stuck in that. you're just stuck. and probably going to be until the 26th when the agreement at least expires, so it's kind of weird. >> it's weird. >> it's making a lot of people unhappy, who are wondering, what really is going on here? >> they're unhappy? >> is it bureaucratic or is it political? >> well, i mean, hock tan, who has rarely been wrong, did insist to me that he's not a pawn in some sort of big geopolitical fracas. >> right. >> i think the deal gets done, because i believe in hock, but these people, they were unhappy? go take some xanax or something. take a clonopin.

half of one. i don't want to overdose. >> i think the expectation still is they're going to complete the transaction. >> i agree with that. >> not on the timeline they originally hoped for. >> another one that's sneaking up ahead of when they report is nvidia. the word for nvidia was, indeed, if they don't get china, two years from now, that would hurt their opportunity since the fact that the chinese market is so large, but i keep hearing the same thing, which is the china flowback. anything you couldn't sell to china, you can literally mark up and send. it's like when you see a bath & bodyworks -- no, i shouldn't say that. let's use bed bath, although they changed their name. when they're in a tanger or -- and they decide they can't pay their lease, the new guy pays more. >> is that why nvidia always responds to these curves by saying it's not material to results? >> yeah, because everybody wants it. i have to tell you. i can't get this on the record from amazon or alphabet or meta,

but i think those companies would take every single one that nvidia makes. every single card. by the way, take two interactive, if that is indeed coming out with a new "grand theft auto," that will be using, i believe, the latest and greatest from nvidia, which is very hard to tell the difference between reality and -- remember, it's not computer generate. that's not what it is. >> what is it? >> it's artificial intelligence. it's done by numbers. when i was talking to myself, david -- >> not sure i understand the difference, but okay. >> well, numbers are very much better. when you're talking to yourself, you don't know that it's not yourself. you think it is yourself. kind of like the mentalist. >> oz? >> oz was the guy who lost in the senate race in pennsylvania. >> oh, it's oze? the mentalist is oze? i didn't know that. amazing show. >> it really is. >> the things you learn. >> part of fun is just trying to decipher what we're talking about. >> yes. >> that is a lot of it.

>> look, i think if it was just -- look, if it was -- >> need to be a code breaker. >> you need a rosetta stone. the navajos know this show cold. >> roblox, bookings beat, losses narrow. that's going to take you back to july. >> i often make fun of people by saying they're nice because that's my grandma, nana lily, told me to do it that way. in reality, dave really is nice, and this was, for those who know him, yes, because the kids that use roblox, it's either they use roblox or they're, like, on -- they're on, like, "fortnite" shooting games and this is good. this is the gentler, kindler. >> kindler? >> it's in my head. this was a terrific quarter from

david, and i salute him. when's he on? how many shows is he on today? the 10:00, 11:00, 12:00, and 1:00. >> i think we cut him back to go two appearances. >> everybody wants this product to win. i don't think the shooter games as much as -- i don't dig them, so to speak. >> i wanted to briefly mention a company we rarely talk about, in part because it's european. bayer. the german giant that bought monsanto a number of years. one of the worst deals. >> do you want to explain why? >> it wasn't a great quarter. you have a relatively new ceo in there. here's the quote that caught my eye. "we're not happy with this year's performance. nearly 50 billion euros in revenue but zero cash flow is simply not acceptable." they go on to say, hey, you know what, we might separate consumer

health and crop science. >> kenvue. >> we may separate them. you know what that means, of course. that means monsanto lives again in some form as a public company as a possibility. but yeah. >> has michael clayton been added to their board? >> michael clayton as not. one of the great movies. i believe tony gilroy wrote that. >> what was that about? >> crop science. >> it was. >> george clooney's best movie. >> such a good movie. bill anderson, again, you can have a quote like that when you're a new ceo. when you're a few years in and you got to own the fact that you didn't produce any cash flow, you're probably not putting a quote like that in. >> that's a huge company. so good you mentioned it. >> thank you, jim. we don't talk about it as often. you can see it's not been a good performer for quite some time. of course, the monsanto acquisition, disaster in every way, in terms of the litigation

and everything else that came along with round-up and otherwise. guys, couple other things on my radar. >> do we know these? >> no. endeavor reported fine. endeavor, what you're waiting for is, are they going to reach a deal with their largest shareholder and control shareholder, silver lake? remember, 71% of the vote. this is going to be interesting, because you can move quickly here. maybe get something done as soon as before the end of the year given there's only one buyer. they know the company extraordinarily well, but they're in -- they're going to get someone to come in, ari may roll in, shapiro might roll in, some other shareholders. if everybody's rolling in at one price, who's on the other side to argue for the highest price possible? they obviously will have a special committee. it's unclear to me whether they've hired a banker as yet. i might be wrong. i don't think they've hired a banker. but they will very soon. then you'll get questions like, will there be a vote?

will you have to have a majority of the minority to protect these minority shareholders, particularly when you're set up for when your ceo at 6% is rolling in, your largest shareholders -- so, how's that going to set up in terms of an argument? will they, at least, try and get a number above and how much above the ipo price? for what may very well, jim, be a very short visit to the public markets for endeavor. >> that really was. it was a quick in and out. >> it hasn't happened yet. we'll see. governance will be important here to, see how they structure this. whether there's a majority of the minority required, obviously a special committee, who's on it. they're going to have tough negotiating to do with all these guys. there had been hope there would be a 3 in front of it. >> you get great coverage on that. >> i got nothing yet. i'm just talking about a process. >> i was trying to compliment you, for heaven's sake. take it. >> i don't have any great insight into where -- >> i gave him a compliment, what does he say? how about thank you? >> what happened to manners?

>> it wasn't deserved. >> i liked it. >> there was nothing i did there. >> i want to talk about robinhood for a second. >> i was going to get you to robinhood. >> robinhood, most of their trading is either options or crypto. now, they do have a very good i.r.a. product. if you keep it for a while, they give you some match. but i felt that the quarter, frankly, was awful, and the reason i say that is because i know that they claim that they're really involved in education. they claim that they're really, you know, the organization that is pioneered inexpensive trading, you know, not trading, but what they haven't pioneered is more growth, and growth is everything. and when you read the conference call, once again, vlad lennon -- i'm sorry, vlad tennen is involved with himself and how san sanctity moan us and great

things are. you will not have, at this pace, a viable business. and am i being harsh? i'm being realistic. we let a lot of people get away with saying that things are great when they're not great, an and i saw that on the toast quarter, and i saw it on the upstart quarter, and i am tired of the obfuscation of ceos who come on at the top of their calls and tell you everything is great, and you look at the stock, and you say to yourself, who's right? who's wrong? and i find mostly the stock is a better arbiter. >> mau is down 16. >> that's really terrific. >> crypto revenue, down 55. >> that's robinhood, right, not toast? >> toast is toast. >> and vlad tenev did talk about the stock price in particular. >> it feels like we've made a ton of progress, and we haven't seen it translate yet to a higher stock price. on a macro level, interest rates are up, which generally isn't

good for stock prices, and it hasn't been good for fintech companies. but we're staying focused on things that are in our control, like growing our business and driving profits higher. over the long-term, we think this is the approach that will move our share price up. >> by comparison, toast really just cut the top end of the guide. >> oh my god. toast, look, i was in the restaurant business for -- the federal government won't let you be in the restaurant business and the alcohol business because of the three-tiered system, the rules after prohibition ended. but when i was in this business, trying to figure out point of sale, which is what toast does, what would happen is you would have a point of sale system, and then someone would come in and say, i'll give it to you for half. i say, the last guy gave it to me for half. it's a price war. it's a price war that you're not going to win. you got sequential decline in ebitda compared to the third quarter. this is one of those quarters where you listen. they do have a lot of customers, toast. but this is a lousy business.

point of sale is a lousy business. >> why? because it's so competitive? >> there are no -- there's no moat. i had point of sale, i picked caviar, and all of a sudden, doordash comes out. everyone wants to be your register. square, which is now block, wants to be a register. it's a lousy business when everyone wants to do your business. lousy. and anyway, intuit is going to take over the world, because intuit is the one that makes it so you can fire -- i'm sorry, optimize your workforce. >> and file your taxes all at the same time. >> intuit is amazing. people do not understand the power of intuit. they don't. look at that stock. there's a stock. >> that's a market cap there. >> we should bring them in, save money. fire your accountants. you can't understand your payroll. >> that's with the threat of the irs doing their own simple plan. >> exactly right. $145 billion market value. >> wow. amen. great company. but you know, look, i mean, toast, if you go in and you listen to the beginning, what a dynamite quarter. right?

i mean, the dynamite quarter? give me a break. it's not dynamite. here. it's been a journey. >> speaking of -- >> i'm sorry, they're nice. everybody's nice. >> let's end here with warner bros. discovery. >> you're back on that? >> i just want to reiterate because stocks are down a lot. we're waiting for disney after the close. listen, you know, the expectation in terms of leverage, some would say, well, nobody really anticipated they'd hit their year-end targets. the cfo on the call, "we're fully committed, that is, at the end of 2024. that said, taking together the factors just mentioned from early view on '24, it's unlikely from today's perspective that we will hit our target leverage range by the end of '24 without a meaningful recovery of the tv advertising market." that's what has taken the stock down. many people say, nobody really believed those leveraged targets. well, i don't know. appears enough did. and then one analyst saying the inclusion is networks, worse

than expected, so management might feel the need to invest for growth in digital assets even more than they had previously. paramount is also down substant substantially on this as well. >> what's the end game, paramount? >> depends who you ask. >> kind of an unscripted. >> depends who you ask. we don't know the end game. >> no. not yet. it's not like one of those great movies. have you been watching -- >> tom cruise will come to the rescue of paramount in some way. he'll be flying out of a plane without a parachute, and he'll figure it out. >> check this payback. >> he does all his own stunts. >> i watched it again. >> which one? >> tom cruise. the last mission. >> it was one that very few people watched. >> that had the impact on paramount that "barbie" had on warner brothers. >> didn't help. expect "barbie" was a big hit and "mission: impossible" was disappointing. >> my wife bought some

birkenstocks because of it. that's the takeaway. >> got comment from powell. got lisa cook under our belt. we're going to get williams, barr, and jefferson this afternoon as we watch bonds. pretty tame here. one reason, the dow is up 63. tomorrow, you can join cnbc's your money virtual event. you're going to hear from cramer and other financial experts on ways to maximize your finances amidst inflation, invest for a brighter future. scan the qr code or visit cnbc events. events.com/yourmoney.

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didn't get to under armour yet, shares highest since

august. they cut the full year revenue guide. inventory up six but gross margins up a couple hundred basis points. stock is up 6%. dow up 100, and stop trading with jim is coming up next.

let's get to jim and stop trading. >> eli lilly is moving. i expect monday the stock might be high erpause -- be higher because we're getting data about overnight cardiovascular events that can be stopped. the reason why this is important is a lot of people feel what insurance company will pay for something that makes it look berth, or thinner, whatever you can't be too rich, too thin. but this is about a heart drug. and a lot of doctors, card yol justs a-- ycardiologists are gog to put people on it. so i want people to be up on it. >> what a year it's been. now we have targets with seven handles as well. >> most drug companies have not

had numbers. >> lilly moves towards the $600 billion market value. >> to get this out of the realm of just -- of diabetes, which is very important and weight, you need cardio, cardio and blood pressure is dramatic decline. so you come in monday it's a drug company that's very different than what it is now. >> how about tonight? >> dutch bros had a terrific quarter, i was glad because i worried they expanded to quickly and yes, rene haase. i think he's having a good quarter. this crop of companies that became public, except for cava. >> we didn't mention cava either. >> partnered with nvidia it's going to demonstrate it has a bigger reach than it does now. almost expensive more than every semi, other than nvidia, more

expensive than amd. >> they have to prove they're deserving of the multiple. >> i think they'll do it. just like the downgraded data dog -- >> citi did cut mxp, that's right. >> we have a lot of stuff today and it's company frankly showing cracks, the way i look at it they're showing cracks. an upstart we didn't get to. a toast, robinhood when you read through the first, five, six, seven drafts of the conference call do not be overly impressed because you might be wrong. robinhood took from the shareholders and gave to the short sellers. a different narrative. >> see you tonight, jim. when we come, sara eisen's exclusives with karen lynch and trisha griffith from the women's forum of new york's corporate

breakfast event. bulls making a run, 12 points away, first time since mid september. don't go anywhere.

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good wednesday morning, welcome to another hour of "squawk on the street" i'm carl quintanilla with david faber at post nine of the stock exchange. sara eisen is on assignment. preside we'll see her later. industrials in tech are leading today, utilities, energy definitely lagging. treasuries are important to watch. a lot of fed speak on the tape, including three more speakers before the day is out. here are big movers. shares of roblocs up. stocks up almost 40% this year with some big gains. the opposite direction, warner brothers discovery, ongoing strikes, weak ad market will impact the market. and robinhood, a loss missing. monthly active users dropped 16 from a year ago.

and transaction falls double digits as well. we have wholesale trade data out. let's get to rick santelli for it. >> this is a september final with regard to inventories. our last look was unchanged. it moved up to .2. .2%. what's notable here, it hasn't been above zero since november of '22, which makes this the best read since november of '22. and we look at trade sales for september, up 2.2%. that's the best since january of last year. and definitely something to pay attention to as sales ramp up, we want to see the inventory levels that have been on the low side start to come back a bit. we know there was post covid issues with inventory but we're going into the holiday shopping season and sales seem to be wearing down inventory look for numbers to kick up a bit. and as for yields, two and three year note yields are slightly

higher than yesterday. the rest of the curve is lower. so we're seeing more inversion in the yield curve and if we're on pace at current levels of the ten year note yield at 455 to be the lowest yield close since the last week in september. carl, back to you. >> rick, thanks very much. s&p nasdaq seeing the longest win streak since '21. but can the rally continue? mike santoli joins us with his take this morning, is the year end playbook playing out? >> it's part of the story. but also it shows you what set up this win streak, which is a three-month losing streak in the s&p 500, the first we had in three and a half years. so you have a little bit of that equal and opposite reaction. we're unwinding some of the extreme negative positioning and short selling and i think just under exposure to stocks and pessimism we had coming into this period. but there is a quirk how we're

continuing the streak this week. which is doing just enough with the large cap stocks to get the s&p 500 into the green each of the last couple of days. so it's not necessarily that salient we have the streak but it's showing you the market is allowing the average stock to settle back a little bit and cool off after that big sprint higher last week while in general, not doing much damage to the index. kind of what we had to do is have some digestion of those gains. we're getting it. past peak earning season, an earning season we have to weather through rather than celebrate in terms of market reaction. to me that's the set up and it has exacerbated the debate going on forever of is it a handful of stocks that matter. we have microsoft all-time high, microsoft actually now the largest weight in the s&p 500 funds because of the float adjustment to apple's market

cap. the way to think about this is, s&p only considers the freely floating shares in their weighting in the index. which is why, for example, walmart should be the 15th biggest stock in the s&p, it's the 30th because the family owns so much. >> what's apple? >> as far as i can tell the rules are if another publically traded company has a reported position it's counted against it. 170 billion shares -- >> $170 billion worth. >> i didn't know that. so the weighting now is make this clear -- >> they're neck and neck but m microsoft. >> where are they now? >> 7.3, 7.2. 15.5% total. and apple bought back 3% of public shares last year in the last physical year so all of that works against it. but if you look over two years the nasdaq 100 weighted to the

s&p 500, there you go, what looks out of whack about that? right, in terms of point-to-point, equal weight is lower, 5 percentage points but last year the stocks everyone is saying is the whole market accounted for $5 trillion of market cap loss while the s&p was down 10 trillion. no one was saying the rest of the market is in a normal correction, no big deal. so you're kind of just taking back what you lost on the down side last week. it doesn't mean the massive message is great. this is the defense the market is playing right now in the perceived safe stocks. >> we have megacap tech running to the highs again. >> yes. >> is it all related to the ten years? >> i don't think it's that. >> it's out of earnings, what? >> it's a matter of the quality factor has been the best performing characteristic of

stocks this year, better than momentum and value and pure growth, quality. everyone is going balance sheet strength, returns on capital. all of those things you would say these are reliable companies over the long-term and the megacaps are a branch of that. what you expect off a good correction low if we got that last week is high beta stuff, aggressive stuff, riskier stuff out performing. that's not really been the case. it has quickly migrated towards, let's buy the familiar favorites, the balance sherlas favorites, the balance sheheets they're cheaper than they were almost two years ago at the peak. not cheap but cheaper. and i think that's as much of the story as we can tell going on. >> mike, thanks. >> shares of warner brothers discovery, down over 15%. this on the back of --well really a lot of it seemed to be comments in the call. a mixed quarters, some numbers

out performed, free cash flow, for example, it did say in the call, it's unlikely to hit the target leverage range by the end of 2024 without recovery of the tv ad market. and disney reports after the close this evening. let's bring in michael morris from guggenheim. what is your tame, was it the metrics from the quarter pressuring the stocks or the specifics of what was said by the cfo during the call we just shared? >> i believe it was what the cfo said during the call. his comments that were really forward looking about the company's pace of reducing financial leverage at the business. that reduction of leverage is really critical to the way investors think about the equity value here. it's kind of viewed as -- i don't want to call it bullet proof per se but a real reason to be involved in the stock, even though we know there are

secular challenges. so when we hear those secular pressures are weighing more heavily on the pace of delevering, that's creates concern in the marketplace. >> so what is your reaction to it? there are those that say we never believe their targets at the end of '24 were realistic so we had it built in. meanwhile, the stock is down 15%. so i'm curious as someone who's been positive on the name as well, what's your take here? >> we've hadconcerns about the ecosystems in this company as well, we did move to buy last year, really looking at a couple of critical compocomponents. one we think they have a great collection of assets twaen warner brothers, hbo, cnn and moving to their digital strategy. so we feel good about the core set of assets. however the pressures in the broader marketplace are heavy. we're seeing it across the board in this linear ecosystem.

even the digital players are seeing acceleration in the back half of the year. we published a note on it, expressing some of the concern we have towards the future of the business. >> you point out the strike -- you think the streak basically understands but it's the advertising commentary that took some by surprise? >> absolutely. if you think about it, everybody understands that the strike is a challenge for the business. there are some uncertainties around, one, the timing of the strike being resolved and two what the outcome means for future expenses, levels of content spending et cetera. and that's consistent across all the companies. so we're not making decisions on one stock versus another given they're all going to tackle that narrative. i think that's digested. but talking about starting to lap, already challenging advertising environment and seeing equivalent declines going forward. we didn't mention this before in

this conversation but the company talked about leaning into some incremental investment going forward. that's fine, long-term investors like investing on the back of a strong ip but that's a surprise given we don't seem to be past the synergy and cost cutting part of the story yet to be talking about incremental investment. >> the networks are a concern, perhaps declining more quickly than those who were pessimistic might have expected. not sure what that means for paramount or my parent company, comcast, as well. >> it matters a lot. we're looking for data points. i guess i say a couple of things. fwhurnl, there is a handoff from linear businesses to digital businesses. this is another topic that i would describe as completely understood by investors. however, the pace of the declines and the lower multiple traditional business and the rate of growth in the new business, the streaming business, those are uncertainties. when we look on a consolidated

basis, which is what we advise investors to do. even though you're seeing big percentage growth numbers, the dollars are still small compared to the compression. and until we see what i would consider either a stability in the linear declines or a sort of supercharging in the digital rate which is a competitive environment, we continue to kind of incrementally take our numbers down and that's an issue. >> all of which sets up for disney after the bell. is there any takeaway from what we've been talking about specific to wbd. and what are you looking for and listening to on the call as well when disney reports? >> disney, i would say there's a similar component and a different component. on the similar component, disney is in the thick of this movement from a linear world to a digital world, whether it's espn, abc or some of their entertainment assets that we saw through a new

distribution agreement they did with charter this year which moves some content from the linear world to the streaming world. so disney is navigating that and they're likely to need to talk about some of the challenges that we've seen at other companies. at the same time, disney, as we know, has unique assets and the company has been under a lot of pressure over the last one to two years as bob iger has come back, they've tried to get back on top of their content cycle and really drive what should be one of the strongest branded platforms in the world to incremental digital growth. so we have at least the first stage of the hulu ownership resolution behind us. the company named a new chief financial officer. these are things that should position the company to make incremental statements going forward. i think it's probably a little too early but we'll get a preview, a first look, what that future can look like. >> we'll watch closely as bob iger joins julia boorstin after

earnings. tomorrow i'll cover, as i do every year, liberty media's investor day. and we'll have exclusive with the company's chairmon, john malone, greg maffei, the ceo. and chris winfrey his first interview as ceo of charter since the agreement was struck. and also jennifer witz. fisker hit some all times low. phil lebeau is tracking the action. a lot of this revolves around production guidance. >> with regard to fisker it's pushing off earnings doing it next monday instead of this had morning. let's start with rivian and the company doing better than expected when they reported their results after the bell yesterday. a couple of things stand out, they boosted their fourth quarter production guidance.

narrower than expected loss. and they're continuing to lower the loss per vehicle, every vehicle they make. here's the ceo on squawk box this morning. >> the vast majority of our customers are coming out of internal combustion vehicles, on the order of 80% of our customers have never owned an ev before so it's exciting to be the brand to be the gateway for ev for a lot of customers. >> a positive report from rivian, though it's not reflected in the shares right now. and look at shares of lucid, their 2023 production they have cut it. it was going to be 10,000 vehicles this year now they're bringing it down to 8 and 8,500 vehicles build this year. and fisker, the company was scheduled to report q3 results this morning, and then a couple of hours before the results were coming out or supposed to come out, they sent out a note saying

we have a transition at cfo that happened the last couple of weeks we'll push it to monday. you don't see that often that you get results pushed off at the last minute to a couple of days later. we'll see what they have to say on monday. and you have the uaw president shawn fain meeting with president biden in illinois tomorrow. and tonight on last call, shawn fain will be on. they believe they can unionize the foreign auto makers, as well as tesla. >> we won this round as he said the other day. phil on rivian we had the discussion with jim, the ability to sell vans beyond amazon, how significant? >> very significant. because i think everybody looks at that market and realize, if there's one part of the ev market separate from what tesla is doing with retail vehicles, electric vehicles, the part of the market that's really going

to be hot and is already percolating is commercial vehicles. so if the they can go beyond amazon, which they now can, it opens up a world of possibilities for rivian. now they haven't said what other vehicles they might start rolling out or other customers but that's a market. the commercial market is chomping at the bit to go electric. we're looking at the stock price. you spoke to this a moment ago, phil. any idea why it's not reacting positively. it did appear to be in the pre-market certainly to what you characterized was a positive quarter. anything said? just give me take here. >> there was nothing specific. the same general question that is out there. you are improving. if you are rivian, you are improving the last several quarters this sets up 2024. you have to show the progress in '24 and there's some production transitions between q2 and q3 of next year. we won't go into minutia what's

happening there. but it has people saying can you accelerate what you've done in '23 in '24 and is the path to profitability a true path there? those questions are still out there. >> phil, thanks. so much going on. we didn't even mention gm and cruise. maybe later on today. sara eisen is live at the women's forum at the new york breakfast of champions with big interviews this morning. >> hi, yes, that's the reason i'm not with you. i just stepped off stage at the women's forum breakfast of corporate champions. an event that recognizes companies that have at least 40% representation of women on their boards. i'll bring you interviews with two heavy weights who were on stage with me, trisha griffin, first time on cnbc she oversees progressive, the insurance giant and after the break, karen

lynch, the ce of cvs health. both of those exclusives coming up for you on "squawk on the street." we'll be right back. (swords clashing) -had enough? -no... arthritis. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme. you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

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wireless that works for you. it's not just possible. welcome back to "squawk on the street." let's get to sara eisen with a special guest. morning, again, sara. >> morning from the women's forum. one of the champions is karen lynch, the ceo of cvs health. good to talk to you. >> nice to see you. >> we had a conversation on female representation on boards.

but i do want to talk to you about the business here on cnbc. you just reported earnings. it was a beat and you reaffirmed guidance but narrowed it for next year. talk to us about the growth. >> we had a strong quarter. 221 eps guidance, beat consensus, $90 billion of revenue, 11% growth year over year, strong cash flows. generated $16.1 billion of cash flow in the quarter. all the businesses are performing quite well. we had strong growth in our bpm business in our pcw business. and seeing a little bit of pressure in our health care business because of medicare utilization. but all in really strong results. >> what about the retail pharmacy business? what do you see? >> the consumer is acting with some caution but we're not seeing a dramatic change in consumer behaviors pre-pandemic

to now. so what we've seen is we've seen -- and we've taken share in our pharmacy business. and our front store sales are flat, excludeing things that people were buying for covid. so consumer caution, but still seeing -- >> like a normalized environment. >> normalized coming into this year. >> is theft a big issue for you? the. >> theft is a really big issue for us. we've taken many actions to protect our colleagues. because, you know, people are combing in just taking things off the shelf. and running out the door. >> what's the solution to this? >> i think it's a big solution is we're working with attorney generals, local law enforcement, that it really has to be prosecution. and there's been some lax in that. and we've been working really closely to really fight and combat for prosecution of those individuals that are in our

stores stealing things. >> you're not alone on that front we hear it from a lot of retailers. you mentioned the pbm business and how results are good. the constant worry from investors this is under regulatory pressure, political pressure. it's become a political punching bag. what do you expect on that front? >> first of all, i think the bpm is one of the most misunderstood benefits we have. and what we are, we are the only one in the value chain, our whole sole purpose is reduce pharmacy spending. we have demonstrated that time and again, we have kept trend flat, our business continues to innovate and a regulatory standpoint what we expect to see is transparency. and i think that with transparency we already do that. so we anticipate much -- many issues with our business if, you

know, if anything passes this year and that's yet to be seen. >> so not a big head wind. is there really a role to play there when it comes to the obesity drugs, the ozempics. >> there's a big role. >> that's where the growth is in your space right now? >> yes. if you look at the obesity drugs, they are proven to, you know, help with reduction in weight, help with individuals with diabetes. the problem is, they're incredibly expensive. so i said this on our earnings call if all americans that were obese were prescribed a glp 1, it would be $1.3 trillion of health care spend. so our job is to really figure out how to reduce that overall spend and that's exactly what our pbm does and we're creating more competition and we're going to work on lowering the overall cost of that drug. >> when does that materialize?

is that a next year story? >> it's an ongoing story because we have to see more competition in the market with these drugs. >> you're also in the middle of a cost reduction program that you announced last quarter. where are you in that journey? >> we are complete with our cost reduction. we have eliminated 5,000 jobs, mostly corporate. we didn't touch the front line at all. and it was really to realign the company so that we could focus our initiatives on our strategy of health care delivery and technology. and we're continuing to hire in those spaces. >> we've seen store closures. more to come? >> two years ago we announced we'd close 900 stores we've closed 550 stores at this point. at the end of in next year, we'll have closed all 900 stores p. we've been keeping our colleagues, we had over 95%

retention of our colleagues. and we had a shift from those stores. you know, from our front store and our pharmacy we had 75 to 80% retention there as well. so good, solid results. >> what about consumers and those worried about pharmacy deserts not having access to drugs, rite aid recently filed for bankruptcy. >> we've been very deliberate in where we reduced our stores. we made a conscious decision that we would not create pharmacy deserts. because we know that sometimes cvs is the only place people can go for their pharmacy, for their meds and for food sometimes so we are deliberate in our focus on where we would close stores. it was more of a density. on every corner we had cvs so we were reducing them. >> we had a lot of them. >> we do. >> what about the walk outs from

pharmacists at cvs, walgreens. i think the protest is not necessarily pay like we see on other industries but on conditions. they have to do vaccines, ring up customers, fill prescriptions. how are you managing that? >> it's a really great question. first and foremost, my philosophy and my management team's philosophy we want to be the employer of choice we have invested a billion dollars in wages, in technology to support our pharmacy and pharmacy teches so we could improve their work flows, efficiencies, we've been actively engaged in hiring and training. and as you know, we have a common purpose with our pharmacy and pharmacy teches and that's to ensure that the patients in our communities are getting the safe medications that they deserve. >> are the walk outs going to have an impact on the business. >> the walkouts had minimum impacts on the business. we had very few and we closed no stores and had no disruption to any of our stores in any

community. >> so a little different than the competition. karen, thank you so much for taking the time to talk through the issues. >> thank you. nice to see you. >> karen lynch, ceo of cvs health back to you. see new a bit, that's sara eisen. after the break a lot of consumer facing names on the move today. we geelt you some of the names you need to be watching in today's trading as we've lost some of the opening gains. stay with us. have options, but too many can be confusing. for instance, if you have medicare, you may be able to get a plan with extra benefits if you know where to look. a licensed humana sales agent can help show you the way. take humana's medicare advantage prescription drug plans. these are convenient, all-in-one plans that offer all of the benefits of original medicare, plus add extra benefits. with a humana medicare advantage prescription drug plan, you'll have doctor, hospital and prescription drug coverage in one

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welcome back to "squawk on the street" i'm dominic chu. stocks are moving between gains and losses so far this morning and we are keeping an eye on a number of consumer related names. we start with ralph lauren that reported better than expected profits and revenues, helped with sales growth in europe and asia. so shares up 2.5%. turning to recently public cava, trading lower despite reporting better than expected revenues. the chain saw a 14% increase in sales at its restaurants fuelled by higher guest traffic and

price increases. the shares down 8%. and kellanova is higher after beating estimates. the first since they completed the spin off of their cereal business. they saw volumes decline in the quarter but price increases helped fuel profit margin growth. those shares up nearly 3% david. back to you at the new york stock exchange. >> for what has not been a good move since the announcement of the split. dom, thank you. microsoft hitting all time highs. the stock up more than 6% just this month and now up more than 50% for the year. but, of course, the question you're all asking, how much higherou it cldgo from here? we're back in two.

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welcome back i'm kortney reagan with your cnbc news update. secretary of state anthony blinken reiterated opposite to israel occupying the gaza strip after the war. this came one day after prime minister benjamin netanyahu said his country would have an overall security responsibility in gaza for an indefinitely period after the war ends. ivanka trump is testifying right now in her father's $250 million fraud trial. she is the fourth and final member of the family to take the stand. ivanka was initially listed as a co-defendant but an appeals court removed her from the case in june. and democrats celebrated a handful of wins in tuesday's election. they won the kentucky governor's

race and a seat on the pennsylvania supreme court. and democrats took full control of the virginia state house. and ohioans voted to enshrine abortion rights into the state constitution and recreational marijuana. let's get to steve liesman with news out of the cleveland fed. >> thanks very much. the cleveland fed president maybe the longest serving president right now on the fomc i haven't had time to figure it out, but she's announcing her retirement in june 2024 along with the fed's mandatory retirement policies they retire at 65. and the fed of cleveland announcing a search committee for a new ceo. mester one of the more hawkish members of the committee. over time less willing to go down the road of zero interest rates but she'll be retiring and

one of the -- i would say one of the pre-eminent economists on the board. >> lots of big news for fed watchers. one of the gainers in the rally this morning is microsoft. shares all-time highs stocks up more than 6% this month alone, now up 50 on the year. brent fill joins us this morning with a buy rating on the name. brent it's good to have you. 40 bucks in a couple of weeks. what do you think has happened? >> i think the success around a.i. excitement is a huge driver coming out for microsoft one of the best cycles we've seen coming for a long time. you have to go back to azure to look at that cycle with that graded. i think the stability of the core business, the quality of the management team is exceptional. the best management team in software with no question as we said there's the two co-pilots

you want to fly with. so we think a combination of the product cycle, pricing power, one executive that's at a large company told me they effectively doubled our price for our office seats going forward. when you think about what that means, it's incredible bli generative to their revenue into the next year. they said they can do this a.i. without really damaging their core margins. so you have an accelerated revenue growth story sustaining 10 plus percent on a top line of $200 billion plus run rate with margins that aren't falling out of the sky for investments they're making so they can recoup this and their combination of their durable diverse model which is infrastructure applications to productivity tools. it's just -- it's hard to -- to get off the story because of the

quality in every nook and cranny of the business. >> it's interesting. of course it was the announcement of the pricing back in july that marked the high for the stock. we've filled that gap. how durable is your target, do you think, does momentum take over? >> the price starting, you're looking at $15 earnings power and you keep a 30 multiple on that, you're at $450 on stock. and then right now, no one really knows exactly what the a.i. movement is going to do. microsoft has said this repeatedly, they're not exactly sure what's going to happen. so there are a lot of bullish sus scenarios you can generate between 30 to $50 billion in incremental value in these new products. and it's way too early to make the call. but the what ifs, in one product line, office, we can get to 15, $20 billion in incremental revenue in one area. they'll have an a.i. co-pilot

which they charge more, security, azure, applications. again remember if you look at the shifts in tech, there's one vendor that captures the most of it. and nvidia caught that in semis. we think microsoft is going to capture this in software. software hasn't captured yet because the services aren't fully live. less than 50% of microsoft's a.i. services are live. as we go to '24, they're all live. >> '24 is around the corner. so what data points are you looking at to judge whether they are making the progress you expect they will when it comes to the generative a.i. products obviously led by co-pilot. >> right now we're getting early evidence of big companies committing to this. initially on a.i. we thought it would be a small out of the gate, everyone take baby steps. we heard major companies taking massive steps, ten to 20 count

deployments. the r.o.i. studies we have yet to get fully but yi think time back in your day is a common theme. the things we're looking for is feedback from the customers now implementing the products. all this has been in power point if you will. and now we're into we're live in the field. so we're in the field talking to customers. our own firm, jeffries, is deploying this in a little bit. hasn't fully rolled out and we're not getting all the seats we want. we're getting idley companies today that want the service that can't get it. that's another example i think right now the demand is outstripping the supply. and that's a good thing for microsoft. >> amazing, brent. it's going to be -- we'll get a lot more information obviously about the product in the coming quarters. brent thill thank you very much.

after the break, a rare and exclusive interview with progress what she's seen in the insurance business and the impacts of climate change and how they're dealing with that in a moment. when you're looking for answers, it's good to have help. because the right information, at the right time, may make all the difference. at humana, we know that's especially true when you're looking for a medicare supplement insurance plan. that's why we're offering "seven things every medicare supplement should have". it's yours free, just for calling the number on your screen. and when you call, a knowledgeable, licensed agent-producer can answer any questions you have and help you choose the plan that's right for you. the call is free, and there's no obligation. you see, medicare covers only about 80% of your part b medical expenses. the rest is up

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welcome back to "squawk on the street." i'm sara eisen. i'm here today in midtown manhattan for the women's forum breakfast of corporate champions. which recognizes companies that have at least 40% of their board membership as women. and one of those who is recognized here today with more than 50% of representation is trisha griffith, the ceo of progressive. it's great to have you here. >> great to be here, sara, thank you. >> great to have you on cnbc for your first interview ever. >> it's my first time, i'm excited. >> let's talk about the insurance business. for a lot of americans, they have been dealing with higher prices and higher premiums in this inflationary environment. is that calming down? what should we expect next year?

>> it's hard to say. if you asked me at this time last year what inflation would be, i would say it's abating and it didn't. think used car prices, body shop prices. there are so many inputs into it. we have seen it slow down a little bit. our pricing is based on frequency and severity of accidents and the severity is not as severe. we have prices earning in, we have a little bit more to earn in. we feel at progressive we're in a good position to grow and grow profitability. >> there's the higher interest rate piece. what do you expect next year? >> it's hard to say. from that perspective it is our capital management, so our investment we have a short duration and so we're able to, as maturities come due put them in higher yield. from the capital management perspective, what they're trying to do is protect the balance sheet so we can grow the operational part of the company so that's where it fits in.

>> what is growth looking like on the operational part of the business. >> really, really strong in both premium growth and unit growth. think of unit growth as policies inforce for customers. we're one of the few companies that report monthly. so you know within a matter of weeks how october looks but we're feeling bullish headed into 2024. >> part of the story is growth in market share in auto insurance specifically. what are you targeting on that front? how big of a part of the market? >> we've had a long standing objective to grow as fast as we can at or about a 96 combined ratio. we want to make four cents of every dollar that comes in many. we want to grow as fast as we can. as long as we can take care of the customers. we don't sell anything tangible. we're in the business of trust. we need to make sure when something happens, usually in

the form of accident or incident, we're going to take care of you. that's our priority. >> does the uaw strike affect you at all? >> it has a little bit, more a time frame with which to get parts. we heard it'll get back to normal business, 12 to 18 weeks so we baked that into our indications and how we think about the future. >> the other factor when we think about insurance is what's happening with weather and climate. i'm wondering if if you rethought the strategy at all given the higher incidents of catastrophic issues happening. >> we thought it on the homeowner side, and a couple years ago we decided rede-risk a little bit. we're trying to spread our portfolio out. it'll take time, though. >> do you think it'll change the

business? >> we have a lot of modelling, work with our insurers to understand what would happen, although it's difficult in the last ten years we continue to evolve our models to understand our rate to risk and how we can protect our customers. >> what do you worse? >> you know what? it's a coin toss. you never know. we've had light weather this year compared to last year. i think of hurricane ian last year. we don't know. we try to model out what we think will happen and some of the models have changed, especially from a time frame. it used to be a ten-year model, a 100-year model. we're making our models shorter to understand what could happen in the next five years. >> tricia griffith, thank you very much. we'll talk to you more in the next hour. but for now, i'll send it back to you guys, david and carl and squawk o"squawk on the stre. >> last month cnbc announced a new franchise, cnbc changemakers. it's an annual list highlighting female leaders across the

business world. it will be unranked, the list, but it will focus on accomplishments that have taken place in the last year, feature women from companies across all sectors of the economy, inclinclude including philanthropic organizations. the deadline for applications is november 17th. that's coming up. scan the qr code on your screen. apply now. or head to cnbc.com/changemakers for more. coming up, the ceo of cava dropping this morning. revenue up nearly 50 year on year. we'll breado tk wnhe numbers and talk about whether the growth can continue in a few moments. don't go away.

welcome back to "squawk on the street." while consumer debt levels are rising across the board, one group in particular is having a very hard time repaying that debt. sharon epperson joins us now. she's got the story for us. sharon? >> david, even though the increase in delinquencies can be seen across income groups and regions, it is disproportionately driven by millennials, especially those with auto or student loans, and those with relatively higher credit card balances. millennials have the largest share of credit card dlin delinquencies. those borrowers who are newly late on their payments now

exceed 2019 levels, before the covid-19 pandemic. all other generations are at or near their 2019 averages. in millennials came into the workforce during the 2008 great recession. they experienced the housing bust and then boom. high rates of student loan debt have made it harder to buy a home and stabilize their housing costs. they also may be in the time of life when they're working to buy a house, have children, and save for college all at the same time. >> it's been a difficult time for millennials, as well, who are in this kind of really expensive time in their lives. it's not hard to see where millennials would be struggling more than some other groups, when it comes to making those payments. >> the new york federal reserve bank says it wants to dig deeper into the reasons behind rising delinquencies. they're considering the impact of changing and lender standards, whether lenders and borrowers are simply overextended, or if they're experiencing deeper economic

stress. now, to find out more about tackling your debt and maximizing your finances, join me tomorrow for cnbc's your money virtual event. i'll be with jim cramer and top financial experts to discuss ways to maximize your finances and investments. scan the qr code or visit cnbcevents.com/yourmoney. register right now. >> sharon, thank you. >> sure. >> sharon epperson. before we go, we'll take a look at the laggards on the s&p. not surprisingly, they're led by the likes of warner brothers discovery. we've talked a lot about that this morning, as you might expect. not as much the quarter as it was reported. in fact, free cash flow at roughly $2.1 billion, a bit better than many had anticipated. it was the commentary on the call from the cfo specific to hitting leverage targets at the end of 2024 that now may be in question, unless the ad market rebounds. that really gave investors pause here. and as you can see, it has had a significant impact on that stock

price, bringing it below that $10 level. they do have about $45 billion in net debt at this point. leverage at the end of this quarter is 4.2. there had been an expectation and hope that by a year roughly from now, it would be below 3. but that seems to be in some question. and that is having an impact on shares of paramount, as well, which actually rebounded a bit, on better than expected results last week. by the way, tomorrow, speaking of media, malone, mcfay, winfrey, and with its all joining me from liberty's investor day. that does it for this hour of "squawk on the street." another big hour coming your way, right after this.

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but the ones who matter most to me. ♪♪ good wednesday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with sara eisen live at post nine of the new york stock exchange. this hour, disney prepares to welcome a new cfo as activist nelson peltz mulls his next move. what you need to know ahead of tonight's print. >> then, toast gets burned. cava's ceo will join us in just a few minutes with more on how the company plans to weather moderating restaurant sales. >> plus, a mixed quarter for teva pharma, results led by sales of its d