questions could range on foreign policy or stance on domestic issues >> yeah, yeah, yeah. we're still better >> i think you're all right. >> my money's on us. >> a little bit better >> yeah. >> i don't know if that -- >> in your face. >> i don't know if you deserve a 40% pay increase >> in your face, chatgpt we're better >> oh, now i could say, what are the toughest questions you could ask? we'll tell you tomorrow. >> let's revisit tomorrow. join us tomorrow thank you. you'll be back make sure you join us. "squawk on the street" is next ♪ 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 bulls looking to add to tuesday's monster rally as ppi now gives us more disinflationary cues, down 0.5%, biggest monthly drop in two and a half years retail sales soften up a bit as well ten-year goes to 4.42% today

our road map begins with target surging. nasdaq and s&p launch what has been the best day since april. magnificent seven stocks adding billions to their market cap president biden is setting to meet china's president xi jinping a few hours from now, and of course, one question, how china's economic slowdown factors into today's loss? let's get the target holiday profit guidance above. comps did fall on weakness in discretionary. that's the biggest drop in comps since 2009 here's brian cornell on the call >> while we're happy to see inflation rates moderating this year, if you compare industry pricing in key categories back to 2020, food at home pricing for families has increased 25%

overall. and in some areas, up to 30% if you're a parent raising a baby, you're facing increases of more than 30% on baby food and formula too. and that's in addition to persistent increases in a variety of other categories. so, when you layer on the impact of higher energy prices, it all puts pressure on discretionary spending >> jim, you're getting a lot of time to chat with him tonight. >> yeah, and i think brian delivered the kind of quarter that you really want to see in terms of not having a lot of inventory, which is so important going into christmas he's got the right inventory, even better, and a lot of it is own private brands, which are selling like mad in the same way you go to costco and buy the kirkland signature, which is a premium private label, he's got close to $30 billion worth of private label. he did make the point, and i think it's really important that we're not back to where we were in 2019. a lot of people keep thinking, inflation is under control what brian is talking about, david, there's just a huge amount of money going to things

so it makes it so you don't spend a lot of money at target that's one of the reasons you have to have inexpensive products to sell >> right do you think this starts a new trend for this company and/or a new positive one they have gone through so much over these last, let's call it, couple of years whether it's boycotts, whether it was shrink and/or theft and on from there >> well, i think it's good that you mention that the shrink is better they have actually went over with me last night about all the things that are working to make shrink to be much less a piece of the puzzle that was so negative of course, he never gave into the idea that the cashier should be law enforcement, and that was one of the reasons why i think you remember he runs a very tight ship in terms of being -- having, i don't want to say good attitude, because that sounds like pollyanna-ish, but he was protective of his workers, which hurt him the most, i felt, for shrink but he's got this strategy of

doing partnerships right now, it's the starbucks strategy that is crushing, just crushing it. he's made it so you pull up and you can get a starbucks. laxman narasimhan spoke to me about how important this is. e.l.f. is one of the biggest sellers because ulta sells that, and cvs is working for him better than it is for cvs. is it a new one? the stock is incredibly cheap. i'm going to compare this, by the way, compare it to tjx, and my travel trust owns tjx it's been one of the biggest winners, but it always goes down when it reports. >> you said people are sick of these names going higher >> there's ennui there's magnificent seven ennui, which added the value of l luxembourg >> to $200 billion sounds way low. i bet you somebody did bad math.

>> they must have intel in there and they took out nvidia >> i'm going to check those numbers. but back to tjx and target i mean, tjx is twice the size of target, market cap-wise, such a big company, quiet company we don't talk about it as often >> they're the least promotional. i gave up asking them to come on i ask anyone to come on. literally, i beg >> they had a beat and a raise home goods sales were good very different in some ways than target their traffic is very strong >> they always give you a couple pennies light when they give the forecast this is a stair-step stock and i have found that's so hard to own for the travel trust because every time you get to the earnings, the stock is going up into it. they throw cold water on the big projections and then it goes down a little bit and you wait four days and you buy it again it's like a migraine >> couple things on target gross margin goes to 27.4. the pre-covid peak was 32.

>> it has lots of room it's just starting >> beauty, by the way, a savior category as some of these discretionary categories suffer. >> ulta, the way people go -- ulta was a great ride post to kohl's going with sephora. now, kohl's has rebranded kohl's sephora because they have a reason to go there i keep coming back to how the private label is doing incredibly well. you're up against this new figment is one of their best private label levels of selling, but you're up against -- >> we're looking at comp sales here they were still down 4.9%. that was better than anticipated. >> it's like joey brown, my friend nobody's perfect >> they controlled inventory very well, hence the margin we just discussed, and they continue to, but there's not an insignificant chance that next year they still comp negative, jim. >> i'm betting with brian. by the way, when you do a $2.10 number when i'm looking for

$1.47, i'm not going to rain on that parade. >> the profitability was far more than a lot of companies anticipated. >> they have to pivot even harder toward their own brands, i think, and i'm going to talk about that with brian, i think carl, in the end, there's so much that's food now, there is -- he does -- i'm not saying there's no shrink, okay because the benefits are partially offset by higher inventory shrink, and he does mention that but i think they have -- the biggest problem that target has is that walmart looks real good. >> yeah. we're going to find out -- we'll find out how good in a little bit. >> they need to have more sporting goods >> there is a story on the tape this morning that some of these retailers, including costco, target, others, are rethinking self-checkout because that is a source of shrink >> that is just -- self-checkout. the best piece ever of all -- you have to look, david, one of the things you've taught me. look at all sorts of publications, including "the times," "the atlantic" had a piece about the disaster that is self-checkout, and costco talked about how people have

watermelons underneath the cart and forget the check out >> the fact that people are once again replacing the machines >> it's easy i had a haircut, and i said, eddie, great to see you, and i walked out, and i said, shoot, i didn't pay him that is what self-checkout is. by the way, cvs, self-checkout is falling all over the place, and the guy says, don't worry about that that's fantastic >> those razor blades, i forgot. >> they're giving away stuff in the store. >> oops. my bad >> you see the chocolate aisle on water street at dwayne reed it's always empty. what's that for? tell them, take that don't steal the other stuff. take the chocolate >> guys, i wanted to talk a bit about disney right now >> is there something? >> there's a story on our website. >> what do you got you got something? >> i've got a little something we've got a little something we want to put some perspective around because that's important. but the activist spotlight, our friend ken squire notes that

valueact has been building a stake in disney, and that is the case certainly can also confirm that. but you know, very different very different from what we talk about with nelson peltz and the possibility still of him running a slate of nominees for disney's board. this is not the case here at all. however, i can tell you, and again, ken reporting this as well, that this is a large position for valueact. it's an $11 billion firm you can take a guess i don't know where it is probably a billion, maybe less, somewhere in there as a guess. they started building this in the summer they continue to buy stock is my understanding as well. and they've talked to bob iger mason, who runs valueact, has been in contact with iger. they've known each other for years. jeff, who used to run this firm,

founded this firm, was on the fox board. "new york times" is another name they did spotify. >> "the times" has some great numbers. >> remind people, they came in in salesforce valueact and acted as almost the peacemaker with all the other activists and then mason went on the board unclear to me whether that would occur here, but you can't dismiss that as a possibility, and it would almost be used to blunt any opportunity that they might see in terms of peltz by saying, hey, we're putting this guy on the board he's got some of the background we're looking for. they are an activist but again, sort of broadly speaking, that's the definition there that is not necessarily the same in terms of how it applies. my understanding is, listen, they like the theme parks business, as you might imagine, in terms of the cash that it's providing. $10 billion of profits for parks. the streaming wars resolution. they feel like there are multiple decision points that are going to end up being positive, and as i said, this is a supportive activist at this

point. >> did you read deutsche bank piece? >> one that is important when it comes to succession. they have been involved previously in succession, particularly most notably at microsoft. of course, that worked out pretty darn well mason was on the board there, briefly overlapped with hugh johnson, i think, who is the cfo now at disney but also with internal counsel as well on that board. we'll see how this ends up, but wanted to note it. thanks again to ken squire as well for bringing that to cnbc.com >> are you saying that mason could be -- could be, like, what happened with elliott as peltz like elliott comes in, not happy at all with marc benioff >> yes, that's exactly what i'm saying >> peltz comes in and is still not that thrilled, by the way, with what's going on at disney you should know that these guys come in and say, make something work but does peltz want on the board? >> peltz still wants on the board, jim you tell me. >> there's a lot of things that

are wrong. >> and disney does not want him on the board so, there is still a potential of a fight there i think there's a sense after this last quarter that disney is in a better position, certainly, than it was a short time ago we've reported on and talked about the fact that much of the stake the trian claims is really ike perlmutter's stock >> what's the matter with that >> they didn't put up their own money. >> who cares >> what do you mean, who cares >> how about this? the stock is down big, and ike perlmutter has every reason to beage agitated >> completely true >> he's outsourcing to nelson peltz. >> outsourcing what, like automatic data processing >> we've shared what we have on valueact at this point but they're an important shareholder here it's not one of the -- again, still, percentage-wise, not much >> the deutsche bank piece is

talking about a turn >> yes, positive piece >> very positive piece, but look, i think that -- you get these guys the billionaire class. they lose a lot of money after they built a lifetime of a business, and then it gets turned into something that people don't think is any good, they get angry carl, there's nothing the matter with being angry when you lose billions even billionaires, when they lose billions, have a right to be angry not that lenin would agree with that >> the rich are just like us they're angry when they lose money? >> i know what you're talking about when you mention lenin you're not talking about john, who i love you're talking about vlad. >> "what is to be done" is the best book on lenin i've ever read you don't like the -- >> i don't know anything more than that. >> went into cronynberg. >> i remember college, that's

all i remember >> stalin said, let's send a jewish general into germany. i tried to write a biography, but i don't speak german or russian. >> different person we're talking about, by the way. >> i was talking about when i was going to quit here, i was going to write a biography of the general. >> it's not too late >> it's never too late >> i'll encourage you, perhaps >> you know who i have helping me with that gunar from -- the warner brothers >> we're going to talk, this piece in "the times" about warner brothers, take a look at the premarket here we'll talk about the china data and, of course, president xi on u.s. soil. we'll get to microsoft, affirm, nvidia, calls on raytheon and netflix when we come back.

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as we said, markets looking to extend yesterday's rally where we got huge outperformance, jim, out of the russell, out of the most shorted, out of nonprofitable tech >> i was dazzled about the russell and to see how those stocks have been so beaten down. you know, carl, we have had a tremendous bear market in everything not magnificent seven, and i think what happened yesterday is even though the magnificent seven did well, daniel long, the bear market that's lasted for a couple years. it's funny, i talk to so many people because of "mad money." people don't seem to realize that we have been in a bear market for a lot of different stocks it's just kind of -- people have

given up on -- especially everything financial i got a call who calls me every night on keybanc same day as yesterday. i don't like keybanc but suddenly, i'm like, hey, keybanc. interesting yield. >> the aheadline in "the journal today is, "the elusive soft landing is coming into view. we do have kostin saying, 12-month target up 5%, 6%. >> kostin, you know, he's a happy-go-lucky guy on that piece. i say, put your tray tables in the upright position because we are about to land on powell airlines, and there is no foam on that runway you don't need it. you'll be on the jetway soon >> just a nice, easy landing >> you think you'll thank powell >> barely hear the wheels coming down >> that's exactly right. i've got 4,000 pieces here and not a single word about what a great job powell did it's almost as if the algorithms did a great job. >> i think everybody's afraid to ring the bell yet and say we're

done it's over. >> well, if you say something good about a movie before it comes out. i keep trying to get you to go to the zaslav piece. you won't go >> i haven't even read it. >> i was told to read it because you had read it. >> why would i read this i lived it my god, how many words how many words on the media business >> i had to read it because i got the word that david was going to comment on it >> there are some implications about what they do about basketball, what they do about leverage >> oh, boy >> basketball? john malone told me last week, they can't pay for it. they need tech it's like, done. all right. >> case settled then, i guess. >> that's what he said it's like, yeah, it's really hard >> i went back over because i got a 12:00 call, i'm being blatantly promotional, for the investment club. i went back over the amazon call, and there's this moment where jassy, who's a giant sports fan, they talk about the

nfl. i mean, i think there isn't a live sport that they don't want. understatedly, david, do you think that eddy cue doesn't want every single live sport after that coup from major league soccer >> i don't know, jim i'll defer to you on that. back to disney for a second, on the whole espn partnership thing, those are not the names i'm hearing. >> they're not >> i hear verizon. i hear nfl and nba frankly, i scratch my head on all of them. >> they're head scratchers, but apple is in the mix. >> i don't hear it >> apple wearable -- if apple hasn't surfaced now, maybe apple doesn't surface. disney, the theme park expansion was good to hear >> any thoughts on the market before we go to break? any broader thoughts here? just momentum continue in the magnificent seven? >> we have the interest rates are not great today. the magnificent seven, we had a note today about someone taking -- trimming nvidia because it's up so much.

i think we're probably in a trim day, perhaps >> although, the goldman desk yesterday said, all right, nvidia, up nearly 20% in ten days look over the past five years. that's not that abnormal >> no, nvidia has -- if you look back, you'll see the reason i fell in love with nvidia and named my dog after it was that if you look back, after every couple years, look back what it was trading at, it was trading at 16 times earnings you thought it was 180 times earnings, because jensen huang is -- he cares tremendously about earnings per share and growth that doesn't -- i don't mean to -- i don't want to sound facetious, but if you talk to elon musk, he cares about taking over the world tim cook wants to offer the single best technology there is imaginable amazon wants to have the greatest revenues. microsoft wants -- >> and we're going get nadella's keynote today. >> it will be amazing. he's got actual artificial intelligence products that work, but who is behind that it's all nvidia. this grace hopper, this h-200, i

mean, that is what -- i mean, she's coming hat in hand, hoping for grace hopper, and he ain't going to get it. he's not going to get the h-200. the h-200 is the bedrock next generation a.i. product. >> there's no way we're giving that to china, letting china have that. >> no, that's like -- to me, it's like, you know, giving away the h-bomb i don't mean it that -- >> right, exactly. >> i'm just saying that it's coveted. >> yes >> i don't want to make -- we're not going nuclear. >> no. >> okay? never "oppenheimer." >> good movie. >> universal picture we'll get cramer's "mad dash," countdown to the opening bell. if we do get to 4,513, that will be a full 10% off the october wel tcws 'lwah it when we get the opening bell in a few minutes.

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after yesterday, here come some of the upgrades b of a ups american eagle, and jpmorgan ups vf corp >> backing down with great presentation i know you're not supposed to talk during this block because it's just supposed to be that, but i couldn't resist. >> matt boss goes to neutral we'll see how much holds when we get the opening bell in five minutes. you can get us any time, anywhere, listen to and follow the "squawk on the street: opening bell" podcast.

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. let's get to a "mad dash" before we get you an opening bell you want to talk a little rtx. >> monster piece by red bird atlantic this is the old raytheon technologies, greg hayes, and it talks about how many problems you're going to have with the gtf, which is the special engine i take issue with this whole piece. >> you do? that's a long piece. >> it's as long as that article you made me read about zaslav.

greg hayes point-blank told me that's not going to happen i think he's a man of his word number two, market share lost. it's almost impossible to lose share given how extensive you are integrated into an airline and an airplane. risk three entry into service of the advantage. that could possibly be but that's just a risk about innovation so, i would take the other side of the rtx, because i think that greg hayes is a man of his word, and i think he's going to be able to contain the losses don't forget, military is very strong for them. very strong. >> i can't imagine how many hours went into this and it took you 40 seconds to basically say, don't listen to it >> well, i liked "war and peace. i scarfed that one you know, you either believe greg hayes when he says it's under control, or you don't. and don't forget military is gigantic for them. i mean a lot of people forget. when you think of boeing, boeing says, we have this business,

military ge military lockheed martin, of course, they do military and it's really great. those stocks are undervalued because of what's happening in two hot wars i'm not talking about taking sides. >> it's important to watch let's get the opening bell at the cnbc realtime exchange at the big board, it is motorola solutions, and we are going to talk to greg brown in just a few minutes. over at the nasdaq, it is affirm, yesterday up 12 as they reiterate some of their targets. >> yesterday, i was telling you that such-and-such a company, senior growth, junior growth, i'm putting together a junior growth piece that i think survived this period of the market >> you've got a list of names that came public all around the same period that you think are survivors. >> yes i think that affirm is i definitely -- i have to tell

you, i think global foundries -- last week, they were on, and i don't think people greeted that as well as they should have. it's not as much of a growth stock, but doordash is definite. and draftkings i got to tell you. i think that jason robins has -- i know there's others coming in, including disney, but the jason robins ad and what he's doing, he's carpet bombing everybody with the, you get 150 bucks if you open -- i don't know, david. do you have an account you get 150 bucks right now if you open it. it's like when -- remember you got a coaster when you opened an account at citi. you can't gamble with a coaster. that's your real takeaway from today's show >> that is quite a chart >> that's an nvidia-like year-to-date gain. >> jason gets it i've got to tell you, if you threw your plan against the man, go play against somebody else. i played against jason i beat him and i pay like five bucks and i just watch it. it's glorious. i put five bucks down and made

94 bucks david, how many stocks can you say about -- draftkings is the king i know there's lots of competitors. >> i had not realized the success they had in the stock market >> did you know it was a spac? >> i remember it was a spac, yes. it was one of the few true success stories in spac land >> and that was because the technology is amazing. it's just such an easy site to use. and by the way, you don't gamble -- gamble responsibly just from the fact that it makes it really hard to gamble but i'm a big believer i live in jersey, so i can gamble if i want to, but before the 11:00 games, i put down $5 i make my line-up. especially because everybody -- as you were saying earlier, because of the injuries in the nfl, your fantasy line-up is probably decimated by now, so you go in and play dfs and you watch schefter >> you go short duration >> yes, you go short duration. you hear that? >> three years, you're still down >> what?

>> on draftkings you're down if you held it to three years. >> wow what a bummer, david >> that's what i'm here for. >> david, have a cookie. >> have a cookie >> be happy. he can't be happy. >> all right, i'll spend the rest of the hour reading this story in "the new york times" about zaslav >> cut to the piece where he has great assets >> he's undeterred he laid off thousands of peopl >> he's got the great assets >> who else you want to talk about? >> i have so many things to talk about. >> i know there are, so talk about it >> let's go there. let's talk about, when you get a turn by bracken from logitech. by the way, the previous ceo, i'm not -- not the guy that came in temporary from clark's. previous ceo, i'm not going to mention because i'm a really nice fella, but this stock, you want to see a stock, give me a five-year chart. you're going to see the destruction of capital like you wouldn't see, other than when

lem takes all the money and puts it in the chimney in "shield." >> down last 24 months down 80% versus s&p down 5%. >> it's vans you know, you got -- on got hit yesterday on the number. that is carl he stepped in from being very successful at logitech used to be p&g before, by the way. that's how he knew the ceo for clorox, who's now interim. and i think he could turn it around the guy came on with a quarter -- who comes on with a horrendous quarter and lays out a plan bracken darrell does and i know it's hard to turn around apparel ralph lauren's doing so much better, the stock is but i will tell you that they have brands at vf that he can ignite turning around a company is very hard, but new balance has turned >> look at tjx apparel, up 7%

home, up 9%. >> home goods is so good if you haven't bought your thanksgiving stuff at home goods, forget it it's gone. this stock always does this. people freak out they say, what's the matter? it's the extra week. it was a conservative guide. just four days from now, buy it. four days. i know >> you think walmart's -- >> sorry >> that's how long -- it's like, as i said, it's like migraine. >> is that four trading days i just want to make sure >> what if one day is a holiday? >> you cut me to the quick i'm just saying that there is a -- it's kind of like the pause that refreshes look, can we have a tjx chart? every quarter that's like this, look will you look at that? >> that says it all right there. >> then we just need to see nvidia's chart too because i need the high of nvidia. just give me the high. this is the kind of natural high that they're never going to do a series on netflix about this high right there. >> just an endorphin rush just looking at the chart >> yes, like having all that

turkey, david. >> yeah. >> tryptophan. >> yeah. >> look at that thing. it's going to take out $500. but someone has to trim it some buzzkill like faber go ahead, david, say something bad about apple. >> i was going to mention something about paypal, because you have warmed to that too with this new ceo >> it's like he's from intuit. that's a great firm, intuit. i couldn't believe he left intuit >> they named a lot of new executives, put in a new management team. senior leadership changes underscoring their commitment to building a high-performing organization it's about crews, chief people officer, michelle gill, a lot of people joining there >> and the cfo they have a new cfo. >> yeah. >> very tough. >> as the new ceo puts in his team >> okay. see the new cfo at advanced auto parts? >> i did not see the new cfo at advanced auto parts. >> yeah, they cut the full-year guide to 140 to 180?

>> i'm calling that shortfall. >> they cut store growth forecasts. they see comps flat to slightly down now brutal >> how could they not preannounce? the chart there is is inverse of nvidia i thought that was astonishing and i hate it when the cfo just goes the cfo is, like, gone blown out. >> it's not usually a good sign when they're there one day and gone the next. >> it's not. >> jim, what do you think is going on with some of these locals voting against, in gm's case, this tentative -- >> i think it's much ado about nothing. i don't think it will matter by the way, i have a 12:00 conference call today with the club, and i'm going to throw -- i'm going to do a little re

i was out and rode a cruise and i loved it looks like it was maybe the last cruise >> you think that was the top for self-driving >> just ship of fools. >> yeah. i mean, the suspension, some of the layoffs here obviously, the regulatory pushback >> but it's the -- i mean, cars are unsafe, not cruise cruise -- i had -- i just find that -- i had veer mobility on yesterday that does a lot of safety for cars, and if everyone had a self-driving car, we would have far fewer deaths. >> now you sound like musk robots are safe than humans. >> i thought i was the inverse musk holy cow >> i think the statistics will prove that out >> i know, but it's not working right now. >> we'll get there eventually. lots more slowly than we thought. >> yeah. it is more slowly. it's a shame because machines don't get drunk. machines don't get drowsy. >> machines don't text while they're driving. >> by the way, machines are going to run you over. there's faber, let's run him

over you said a.i. is going to kill us >> oh, yes, that's true. >> a.i. in a car >> no, that will -- >> the dollar stores, which are not target, are really on the move >> that's good to know, jim. >> i think what brian cornell was saying, which is this problem -- >> target is really on the move, up 16% >> feeding people, it just costs so much. it costs so much it's just amazing how much -- i mean, that's why these -- we have these fatuous individuals who come on and say, the fed is going to start cutting they should talk to jay powell when you go to chili's, it's a lot more expensive than it used to be. >> that's true >> so is olive garden. >> so is everywhere. >> yeah. >> yes but it's slowing the increases are slowing. >> it's not deflation. just the increases are slowing >> you don't want to see deflation. >> right you don't want deflation >> i want people to be able to go out and have a decent -- >> then you end up like japan for 30 years >> we're not going to have that happen i'll tell you, when the glp-1s

come, look out vodka look out, bourbon. >> really? >> yeah, they taste like, you know -- >> you don't want to drink either how about wine how about tequila? >> agave spirits are exempted. >> that's what i thought >> it makes you want more mezcal >> glp-1 equals mezcal consumption. >> you know woodford reserve you know bullet? that's like jersey water and new york water >> got it. guys, should point out disney shares are up 3.5% on that story we brought you towards the top of the hour. activist fund valueact has taken, for it, what is one of its largest positions. as we explained, very different approach than, for example, nelson peltz's try they come in peace many conversations between mason morfet, who runs the firm, and

bob iger, who runs disney, but there is the possibility that morfet could end up on that board. they believe in the strategy they're embracing it still buying stock, apparently, but nonetheless, worth mentioning, and they will be involved, perhaps, as a long-term shareholder in the succession plan that while being put off because, really, we thought last year we thought now we'd be dealing with it, but of course, he has extended for a few more years >> i think that peltz is not happy with that board and feels that it's a bit of a arubber stamp board. >> i know. >> could be interesting. worth watching >> always. >> i'm so -- i am stuck on retail today, because i'm seeing -- i mentioned ralph lauren earlier he had this amazing quarter, and i talked to him and i said, wow, this thing's going to take off it did nothing today, because of brian cornell talking about people buying apparel, look at that monster. i mean, brian cornell, this is the brian cornell day. it is. it's brian cornell day it really is and good, because he has paid

his dues he has done great things, and by the way, if you ever dealt with them on a charity basis, they are extraordinary. when i was doing the santa claus shop -- >> put up a walmart versus target for three years look a little different, wouldn't it? >> walmart's got great -- david, you go with me to walmart. i will get you things that will -- you will love it >> there you go. that's just -- >> i did go to goldman my first day in a k-mart suit, and they sent me home >> i remember that story >> i think it was right. >> that's an oldie by a goody. >> we've discussed your k-mart suit >> new viewers see that guy over there? he's mr. ceo >> greg brown is going to join us very shortly. ceo of motorola. >> so great when he was on "mad money" >> when was he on "mad money"? >> everybody's on "mad money." it's like carson joan rivers crossed him. >> are you carnack, basically?

>> what group was on the most for letterman? >> foo fighters? >> no. i'll give you a hint eddie vedder >> makes sense letterman liked his '90s rock. >> sure did. let's check bonds before we go to break. still got fed speak to chop through today. barr just crossed, and barkin coming up at 3:30. didn't get to 4,513, which is that 10% jump from the october lows, but not far away dow is up 80 we'll be right back.

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- [narrator] call aag and get your free info kit. call the number on your screen. halfway through q4 some of the big gainers on the ndx so far this quarter. there is crowdstrike netflix today, b of a adds to the u.s. one list, jim >> that's a good list. crowdstrike. i have palo alto on tonight, but they're neck and neck with crowdstrike. zscaler is always there. kla corp. this is the beginning of the next leg up in the semis. >> 52-week high yesterday on

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motorola solutions ringing

the opening bell right here at the new york stock exchange. the security focus company highlighting its mission to provide safety across communities and businesses joining us now is greg brown, motorola solutions chairman and ceo. second time we have had you in not that long. good to have you back. >> thanks, david thanks for having in not that long. what's the point of the rebranding i know what your company does having focused on it recently. is there a sense a lot of investors don't? >> yes we split motorola years ago, exited the cell phone business and said we're doubling down on all things public safety the announcement this morning is the culmination of a multi-year journey where david we have built a public safety eco and security system that connects enterprises and businesses it connects people in need with those who can help so we thought it was appropriate to launch the new narrative.

our customers know who we are and a lot of other people but it was a time to say what is the new narrative of the company and what do we stand for and today we announced solving for safer because it's not static it's fluid solving because we're always innovating and safer because threats are always evolving and so are we. >> sadly those threats are always evolving. it made you a growth company you put up an 8% last quarter. even though you're not sharing guidance, it's still for more of the same. >> right. >> why is this a growth area >> what you said, and i said it to jim before. a loft t of what we do is need o have, not nice to have who doesn't need safer, schools, businesses, infrastructure, hospitals, stadiums. taking video security and automatically with artificial intelligence communicating through a.i., access control, facility lockdown, immediately notifying people in a 911

command center so we've built this ecosystem and it's in demand higher now than ever before we've had great growth but also exited the quarter with record backlog, orders, and the ad addressable market even though we're in the zip code of 10 billion this year, the market is 60 billion >> i think that's know i tell you what, greg, i don't know if you study the terrible maine shooter. >> i did. >> we have people you can't arrest them, you can't stop them if you're schizophrenic you can't just jail people, detain them. >> right. >> we have to have some line of defense. you can get guns in this country but the defense may be you, the panic button. >> absolutely. that was an important acquisition we made of rave, a framingham, massachusetts company, todd hyatt, the former

ceo is in the audience today but rave is the nerve center that takes the incidents and feeds and do an immediate panic button that was a missing ingredient and for us it's key you have it. >> last time you were on we had a conversation about a.i you delivered the statistic which i still remember about the number of seconds you can shave off of 911 call, and the thousands of lives you can save per year has that evolved since we last talked this. >> if you reduce the 911 response by 1 minute it saves 10 ho ho -- 10,000 lives we do public communications, video security and access control and surveillance and do it through the nerve center and security work flow through 911 so if a dispatcher can respond faster if he or she can answer a call faster. if david faber calls with an emergency speaking spanish and you're the dispatcher and you don't know it, we're doing a.i.

real transcription and translation so the dispatcher hears the concern and the crisis in english >> this is what jensen wang felt was the biggest use for artificial intelligence. there are 27 languages spoken. and that's what you need i remember my daughter was on one of those lines and people are december separate, they can't say it, articulate it. you can probably articulate it for them. >> we're doing smart transcription in 911, over 90% of our security cameras are a.i. enabled. and now, if someone is calling in, a first responders or law enforcement officer to a dispatcher, we have an a.i. -- we will have an a.i. voice assistant. so instead of the dispatch trying to pull up everything they're hearing it's hearing the voice, translating it and pop

lating it quicker. if you can get the information you can response faster, if you can respond faster you save lives. >> you've been at the helm of the company for 16 years you've fought with and be friends with activists. >> someone has a fault with this guy? it's the greatest guy. >> i'm curious, given that experience, it's not many ceos around for 16 years, any broad advice you give to those in the leadership position at this point? >> you know this, right. carl icon, multiple years in the firm, representation in the board room, jeff and value act did i think it was, easy, no did it make me a better ceo? yes. did it make board management better, yes. the advise i give is don't wait until somebody comes into your company. where's the underbelly is your weakness, products cost structure

management capital allocation management knows what you're doing well and not well. the advice is be candid for what you're not doing well. act now. if you don't, someone else will come in and help you. >> we thank you for coming in and spending time with us. >> great to be here. what's on mad money tonight? >> you have brian cornell from target and nikesh arora. and then of course chuck robins. >> good show tonight. >> thank you >> you did a great job today. >> did i in did you see this piece? >> where it belongs. you're nuts. greg still wants to play >> it's a four-man show. >> can we get a wider shot now >> maybe retirement, if you leave, you never know. >> any time you want it. we love you. >> thanks, guys.

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good wednesday morning welcome to another hour of "squawk on the street. i'm carl quintanilla with david faber live at post nine of the stock exchange sara eisen is live in las vegas ahead of a big formula 1 race this weekend meantime bulls trying to hold levels, dow up 90. treasuries elevated still, ten year around 4.53 target reporting a jump in profit advanced auto parts a surprised loss and tjx cutting estimates. and disney is the best in the show we have economic data coming up as well for that we get to rick santelli good morning, rick >> good morning, david yes, business inventories for the month of september, expected to be up .4% deliver exactly up .4%

and just to put some context around that. those levels represent the highest month over month change in inventories going back to august of last year, these back-to-back up .4%. so building inventories is a good thing think holidays around the corner now the question is, what types of demand will we see? interest rates, a reversal from yesterday. we purportedly have good news on ppi and weaker than expected retail sales although last month was strong we are almost 10 basis points off the yields today in tens pay close attention to yesterday's low yield which was around 4.60, 4.61, 62, that will be a key level to test david and the gang, back to you. >> i'll take it, rick santelli rick, thank you. i am here in las vegas, nevada at the bellagio hotel,

why? you can see behind me. they set up a grand stand viewing seats in the middle of the famous bellagio fountains. it shows how all in these c casinos and this town is around the f-1 race this weekend. it cost about $12,000 for the practice round, qualifying round and the race if you want to sit in the bellagio club behind me but it's supposed to bring in $1.3 billion into the las vegas economy, more than 100,000 people each day over the race weekend. and businesses, big and small, just for las vegas we have seen new sponsors sign up for american express which is another reason we're here we are also previewing the documentary, coming out tomorrow night 8:00 p.m. eastern on cnbc, the inside track, the business of formula 1, i have spent a few months looking at how liberty

media has transformed the business to all the companies that are involved. i'm excited for you to see that and i'll be here to share the setup of what's going on here, which is a huge event already starting behind me the strip is already closed. they'll race right in the middle of it. but guys, i think we need to talk about the economy and the markets after yesterday's blockbuster rally and the fact it's following through today with the dow up 80 points we got a lot of economic data to chew on david, the way i would sum up, it's not too hot, not too cold economy. looking at ppi it was flat in the month of october. the year over year number goes down in the 1% range so some good progress. yes, energy prices factored in here just another important data point on the ppi, the core gauge, which is what the fed pays attention to.

posted the smallest annual increase since the start of 2021 so more progress certainly on the inflation front. >> is it too early to say that jay powell has engineered a soft landing? >> the market is telling you that they're betting on the soft landing because if the fed is done raising rates, which i think was what yesterday's rally was all about, and the data looks good, then that's what a soft landing is by deaf in addition -- by definition. if we don't see a big spike up in the unemployment rate because every recession starts with a slow down. so i don't think you can rule out the recession, but that is the view of the market, the chicago fed president says and he's looking at the fact that he's seen this historic drop in inflation. it's still higher than the fed wants on the target. i was reading the research yesterday on the rally because it was so big and such

excitement about the fact that the fed is done and new edge called it a pfizer moment. remember this, november 9, 2020. pfizer announced the covid vaccine, fed is done narrative sets up something like that. >> they did make that comparison to the pfizer day. they suggested means another 5% upside, 4,700 by the end of the year i guess the discussion can, sara, is leading us to can you get further disinflation progress without damaging the labor market do we start to cut into muscle there? >> that's the question and then we start coming into the question of when they're going to cut rates, if we do see further weakness in the economy and they feel confident that inflation is going to return back down to their target. the expectation the market has is we could see rate hikes starting, there's an 80% chance in may i think the fed is going to push

hard against that because they want to be sure inflation is coming back down to the 2% level. we're going to watch the data. we have retail sales today, the headline, weaker in october, stronger in prior months and it shows that the consumer is still pretty resilient. it was a weaker number but better than expected in october. and it also shows the prioritization of spending spending on health care services and food and beverage while weakness in apparel and electronics and the goods spending something we got in the target report today as well i know target is up double digits on the profit beat but i spoke to target's cfo about the report and asked him what he's seeing in terms of consumer spending he said -- this is encouraging i thought -- a modest improvement in discretionary trends. they were stronger in this q3 than q2, apparel and home were

better, but we are remaining cautious in the short term they saw sales down almost 5% the quarter overall played out as expected on the top line but the big line, the target on profitability which he attributed to the affordability and efficiencies and cleaner inventory and macro factors like freight costs coming down. and consumers are still looking for value, which is why tjx is doing so well. >> yeah, tjx is so much larger in market cap than target. but they are moving in different directions today as we see shares up over 17% tjx still maintains a more than $100 billion market. >> the setup is important. >> yes speaking of setting up, let's get to oliver chen because we want to talk about target more

he has a price target of 161 out performing on the stock. traffic declined but investors don't seem concerned with that, perhaps more taken with the margin number that fuelled a higher earnings number than anticipated. are investors getting it right >> shlgyeah there's a couple ths great to be here comps came in at negative 4.9 wall street was looking for negative 5.3 and sg&a those margins were better, that led to upside expectations were low coming into the quarter the pe multiple was about 12 times, that's in contrast to walmart at 24 times. overall, lots of caution still but the stock had been under so much pressure and these better than feared results are part of what moved the stock higher this morning. >> you mentioned, of course being under pressure that's been the case for quite

some time and it's a number of stories, boycotts related to lgbtq, shrink, related to theft and on from there. is the this the beginning of a new and more positive story for target. >> we hope so. however the consumer at large is under pressure target is 20% food, walmart 60%, the number one grocer. beauty has been working very well on the other hand apparel, home hard lines that's about a third of the business at target that's been running down high single digits. and inflation is weighing on consumers. in addition, student loan repayments are a key factor. some of the offsets are there are $700 billion of savings on the sidelines with consumers and unemployment is low at 3.9%. further more, there's still nominal wage growth running at 5% and inflation is running closer to four

so there's puts and takes. and target called it a consumer tug of war i think that's what's happening in terms of a consumer that wants joy and emotion, however this consumer is expersiencing fair amount of pain with inflation and being considered in how they think about purchases. bottom line we see a consumer focused on needs and wants needing tons of newness, our top ideas are ulta and walmart. how does it set up target for the holiday season when i was talking to the cfo, he was emphasizing that target is embracing newness, even though you know inventory is coming down. fente by rihanna, they're carrying the beauty products which are doing well i wonder if that's enough to move the needle for them in a tough macro economic environment for spending for a company like

target. >> we're excited about barbie, legos, pokemon, and beauty the consumer puts beauty almost as an essential in terms of that being so important for self-care. the other thing at target, a lot of focus on the conference call was opening price points and value. value will be a key theme and making sure you have low accessible price points. this will be a great gifting season, but unfortunately we've had warmer weather we've had volatile store traffic. and we've had a high degree of promotions promotions are still under control, but that's something to watch. apparel is a watchout category, especially because it's been warmer we're hopeful for toys and also hopeful that target is really indexes into these everyday low prices, low access price points and promotions to drive a holiday. but it'll be pretty choppy oliver we'll leave it there for today. appreciate you taking some time. thank you. >> our pleasure, happy holidays.

>> to you. we want to move to disney, shares up about 3% had been up about 3.5% this on news, in part at least, that we brought you towards the top of the 9:00 hour with this well help from ken squire, 13d monitor and his active spotlight on cnbc.com. a large activist investor, though typically different in terms of playbook than some of the other brand name activists has taken for it what is a large er -- larger position in disney. doesn't mean it's enormous but it could be. they started to buy this summer, they continue to buy, is our understanding as well. and they're attracted to the company because of the theme park business, delivering 10 billion in profits and what they believe is an undervalued asset within it. the fact that streaming has come a long way and is nearing call

it a resolution of its lack of profitability. and ultimately that bob iger is following a play book resulting in a higher stock price over time mason, who runs value act has known iger for quite some time it's my understanding they had plenty of conversations. value act itself has been involved in a number of other media companies, fox at one point, jeff oven who ran the firm was on the board there. "the new york times," spotify. again this is more of let's call it under the friendly activist headline as opposed to what you're seeing from nelson peltz. one question, of course, is there a way to blunt peltz by putting mason on the board again, that's conjecture at this point but something you can consider as a possibility. succession is also something they've been involved with in

value act at the past, key being the presence on the microsoft board when they chose satya to where run the company. good choice there. you can see what's happening to those shares sara back to you in las vegas. >> yes all right. thank you, david coming up on squawk on the street, after the break i speak with the ceo of liberty media, who owns formula 1 why they're making such a big bet on the strip in las vegas this weekend , backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today.

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welcome back to "squawk on the street" i'm live in las vegas for the grand prix formula race coming this weekend ahead of our cnbc documentary "inside track: the business of formula 1" which premiers tomorrow night at 8:00 p.m. on krcnbc here's what to expect. >> the cost cap on what they can spend on developing their cars has made their finances more predictable. >> before someone investing in a

race team didn't know how much they would spend a year, it was everything in between. >> reporter: financial stability in turn has helped drive a surge in the value of the teams. >> when we got involved, the bottom teams were being traded for zero today i don't think you can buy a team for less than $750 million, the top teams are valued 3 billion that's a total change. >> joining me now here is that man, liberty media president and cfo. it is good to see you. >> thank you for having me >> how long has this vision of las vegas been in your mind? >> well, we became involved with formula 1 seven years. and even before we were involved we had the dream of vegas. we knew it was the pair gone of bringing sports in the united states, raising the profile of sports in the united states

rather than a race down the strip. >> it's different than other races where you partner with a sponsor, you're putting this on yourself talk about the cost and how you know if it'll pay off. >> you're right. the model used to be the circus came to town and f 1 depended on people to do the local promotions, ticketing, setting up, all this we made a large investment because we believe in the sport. we believe in the united states. and we believe in vegas. and it is an unusual model and we're both, as you noted, spent a large amount of money buying the land, 40 acres there and then the largest paddock and pits in the formula 1 circuits so we're very excited. >> what is the importance of the las vegas grand prix to the growth of the sport in the united states? we've seen a nice spurt coming out of drive to survive. now what >> i think we'll continue to see growth that's our goal.

you have to continually change change isn't always easy but if a sport stays, you lose ground and everybody has upped their game social media, new rules changes. everybody experiments and tries new things we believe this is the next leg of our growth. we think we're going to sustain from here and only go higher as we build in vegas. >> so the model is, you're aiming for bigger broadcast deals as you get more fans in the united states and sponsors vegas has already, as a race itself, brought in new sponsors. how much room for growth is there? >> you're right. attracting new viewers drives broadcasts but also sponsors so we brought in sponsors like am ex and t-mo who have joined because of vegas so growing that interest, particularly among strong u.s. and tech companies you're right.

we have only so much paint but we look for new ways to activate and bring sponsors in and the teams have done that as well you see that growth because of actions like vegas. >> carl when we were talking about it i didn't do mentioned comparisons to the nfl i told him how you brought roger goodell to the montreal grand prix and that's in the documentary. but how much do you see that as arn inspiration, a model, are there valid comparisons to make here with formula 1 and the nfl? >> the nfl has done an amazing job in the united states but things like the cost cap, how the nfl is so much stronger because the league is strong with centralized revenues. play hard on sunday, all together on monday, trying to build that mentally. we have a lot of differences from the nfl but we have more advantages, no sport is more global, the nfl is still just an

american sport. >> let's talk about the female demographic. >> the last four years, we've taken the average age down four years and 40% of the fans are female. >> there are no female drivers, very few females on the grid at all? >> a couple points we have an attractive products and handsome young men doing exciting things. >> i agree. >> but in addition we have a sport that will be built on women. we have f 1 academy bringing young girls in to give them a role and grow. it's led by susie wolf, who was a driver as you interview later today, we have a host of women who run what is going on in vegas. >> renee wilm coming up next hour ceo of las vegas grand prix. >> someone pointed out how many

women there were that's not what we sought out to do -- >> you mean executive roles? >> yes we have so many women in executive roles at f 1 from sasha to renee to who's driving las vegas. that wasn't what we did by design, it just happened they're there. >> the other knock against f 1 that you get is that it's a an elitist sport. $12,000 a ticket, not exactly the most accessible sport to attend is that a problem? >> look, i think vegas is going to be an expensive place, the most expensive of our races, most expensive to put on and most expensive therefore in tickets. i think there's room to ensure that we have offering for everybody. there are other places which are clearly more affordable. and we'll continue to look at that there are ways to try and make sure the sport is accessible to all and as we grow we need to ensure it's accessible to all. >> how do you determine the success of this weekend?

is it already a success because of the sponsors and vegas has gone all in on this? what should we look for? >> we care the most, our fans are going to leave on sunday thinking wow, that was amazing fans on television and the fans here, we want to impress them think there's nothing but exciting >> how are they going to watch on television, it's 10:00 p.m. local, 1:00 a.m. eastern time. if you try to cater to a u.s. audience, that's a weird time. >> we cater to a global audience it's a challenge for us. we have fans that have to get up at 6:00 in the morning we're a global business. it's a great opportunity and a challenge for viewing times. >> my kids will watch at 6:00 a.m. on dvr. thank you, greg. >> thank you, sara. >> reminder, the cnbc documentary "inside track: the business of formula 1" debuts

today at 8:00 p.m. you'll hear a lot more david. let's talk semis for a brief moment up 60% this year a number of hedge funds shorting or selling in the group. we're name names and look at the 13f filings. some of thstk e ocmoves may surprise you we're back after this. 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

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big highs this year. kristina partsinevelos joins us at post nine >> it has to do with the 13f filings. you maybe remember mike for calling the subprime crisis and portrayed in the big short, he's betting against semiconductor stocks as of september 13th. but they had a 100,000 shared put position in the etfs, he's betting that socks will fall, depending on the timing because we don't know when he took that position and if he's still

holding it to this day but it's up about 8% since september 30 lt so he could be sitting on a loss david tepper also cutting his exposure, this according to their latest 13f filing, the fund dissolved positions in broad coms, marvel, cutting in qualcomm, taiwan semi. and dan lobes, third point reduced the stake in tsm by 0% by 20% chips were under a reset during q3 and maybe slightly into october. concerns about china, weakness in autoindustrial demands are some factors weighing on the sector a few weeks ago but as you talked about, momentum is back into the sector, nvidia closing at an all time high yesterday.

adding $2 billion in market cap over the last few days applied materials, broad com, intel. and amd, data center gpu revenue above expectations, the microsoft event today making their own a.i. chips maybe not good for nvidia. aws announcing rental services and a slew of other events. >> we ignite today. >> i just used ignite several times. >> we get nvidia on the 21st the. >> next tuesday. >> right how much is riding on that guidance. 's not necessarily the guidance -- yeah, it is the guidance for 2024. it's how much confidence can nvidia put in that can keep the growth growing you saw the beat last quarter, the beat the previous quarter. the expectation is more tempered

for this quarter in terms of beat but it's how are they going to keep the gpu growth growing and launching a new gpu chip next year, that could have people slow down orders until they wait for the new chip it's about building confidence into data center revenues. >> so that's going to be the most important near term. >> that and the china overhang see if they say anything china contributes 20 to 25% of revenues the reaction was negative. news they created three work around chips to sell to china so maybe it won't have an impact in the next year or so. but two years from now it could change. >> maybe something to listen for with xi biden today. maybe. let's get a news update. >> i'm bertha coombs with your cnbc news update

the israeli military is pushing ahead with the raid of gaza's largest hospital saying it's operating on intelligence information that hamas is operating inside the al shifa hospitals soldiers have delivered supplies the idf said but the hospital says troops are questioning people inside and taking some away. federal prosecutors announced charges today in a vast russian smuggling ring. seven people are accused of sending prohibited electronics worth millions of dollars from the u.s. to be used in making guided missiles and tanks for the war in ukraine. and the biden administration announced $3.5 billion today for companies that produce batteries the effort to strengthen the supply chain that comes as the energy department estimates the demand for lithium batteries

will increase by ten times by 2030, lithium is the main battery type factor for electric vehicles and clean electricity storage. back to you. >> bertha, thanks so much. stocks are adding to yesterday's huge rally the s&p at more than two months high small caps coming off their best day in more than a year. should you ride the rally into year end we'll talk about that after a short break. ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

the rallies tries to march on today the nasdaq exits correction territory. big question of course is can the rally keep going our next guest is hesitant to take rate hikes off the table. bob diamond is here at post nine lucky to have you bob, good to see you. >> good to see you, carl to the degree yesterday was a rerate, was it deserved?

>> i think so. we felt there was little chance for a raise in december one more fmo meeting in december, i think it took it off the table for now and we can look towards next year we're in a pause you know, our sense is that the fed is pretty pleased. given that, you know, as recently as march '22, hard to believe, 18 months ago they were still buying 120 billion in treasuries and mortgages a month. they waited too long the first rate increase was 15 months ago, june or july of 2022 550 basis points unprecedented. and yet, the economy is moving forward and frankly the bond and equity markets are in balance. one of the things i discovered, i was in asia a couple of weeks ago, the middle east last week and the perspective of what happens -- what's happened in the u.s. in this correction phase is like did they really

just pull this off did they really raise rates 550 basis points, beginning taming inflation, the economy is not in recession, markets are balanced and sometimes we don't take the look that people from outside the u.s. have, which is yes, they waited too long, yes, we had too much stimulus. but this is a pretty good result and i think the fed is sitting there feeling good right now they're err on the side of waiting too long -- >> so you don't see rate hikes next year? >> i hate to say anything is zero but if you go through fed history, the barrier for them to reverse course versus pause is very, very high. so barring something systemic, i think they're going to wait quite a while before they contemplate rate cuts. >> meantime, wells today, they're still pretty cautious on equities we feel there is a significant post qe rot in many bond

portfolios ie unrealized losses which make for an unstable foundation fair >> i think so. if you look at the banks, we talked about svb and the ten years versus the deposits and the flight of deposits the mark to market on the banking industry for their treasury portfolios, what was the negative mark to market if it went through p&l was 600 billion. b of a was 100 billion i think j.p. morgan was 30 of 35 so you don't have 550 basis points in rates without having damage in the portfolios they can't be short they have to be long. so i think it's fair to say that overhangs the bond market to some extent. i don't think it's a huge barrier but it has to be considered. >> i think sara has a question >> bob. >> hey, sara. >> what about the overhang of

the sheer amount of treasury issuance that has to come going into next year i know it helps to have lower interest rates but they're still a lot higher than they have been and there's questions about demand and who's going to absorb all the debt. >> listen, for all the positives we just talked about, you know, the stimulus in the beginning of covid was spot on. but we've had some big whiffs. the fed waited too long and as stan pointed out a few weeks ago, they did nothing about extending duration and i think that was a big whiff. so i think the dark cloud hanging over us is debt. from the time trump took office, so seven years, the debt has gone from 20 trillion to 34 trillion the bill this year, i think the fiscal year ends 9/30, $570 billion in interest costs and rates weren't all the way up and so, as we look forward, i

think the big, dark cloud overhanging us, sara is the debt pile and how we're going to manage that over the next few years. >> yeah. especially with a lot of refinancing coming up of low cost debt the next three years your firm also plays the distressed credit part of the world. we followed private credit to an extent here, the explosion of it i'm curious given everything we mentioned, what your expectations are there seems to be the possibility of a lot of distress coming given the 550 basis points rise in the last 18 months. >> we think so we think cracks in credit are going to be real you can have a positive economy, no recession, and still have a really, really serious crack in credit we had 14 years of zero interest rates and almost free money with very, very few covenants so our credit opportunity fund is staying very liquid,

opportunistic. we think there's a lot of -- if you look at the svb situation, that was an extremely well run bank, incredible client base, incredible service, and they had one big issue, which was the treasury portfolio so our view is we'll see really good companies, really good corporates that have not adjusted to the 5.5% interest rates as they could have and that's going to create an issue. so we think opportunistic credit, looking for kcracks in corporate credit where maybe the asset liability wasn't managed as well it could have been is a great opportunity. >> would you agree with the line if you're a corporate treasure and haven't adjusted by now you probably don't deserve to have your job >> reporter: yes, i would. i think there's still time to do things because the economy is not in had -- not in recession. clearly it's not too late. this was not a secret the fed

was going to raise rates it was probably the best advertised series of interest rate rises we've ever had. >> great guidance, bob good to see you. thank you for coming in. good to be here. >> sara? when we come back, president biden and chinese president xi jinping gearing up for their high-stakes meeting later today. we'll tell you what to expect there. as we head to break, check out the top gainers right now on the s&p 500, higher overall. targets at the top of 17% on that profit beat vf corp. continues to come back strong after another tough year. and expedia is on the list as well the rally continues after yesterday's big day. "squawonhetrt"ilbek t see wl right back from las vegas and the new york stock exchange. don't go anywhere. medicaid, i have some really encouraging news that you'll definitely want to hear. depending on the plans available in your area, you may be eligible to get extra benefits with a humana medicare advantage dual-eligible special needs plan. all of these

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welcome back to "squawk on the street". it's the final tournament of the season for the lpga as the championship kicks off tomorrow. dom chew is live in naples,

florida with a special guest >> it may feel like we're doing a weather channel hit right now but we're in naples, florida, it's torrential downpours. i'm here with cme group chairman and ceo terry duffy. we have some news this morning because the cme group has extended the sponsorship agreement with the season-ending lpga tour championship until 2025 can you take us through why the cme group is well positioned to stand alongside the lpga. >> we think it's important to support women, women in sport, cme has been a leader in this for many years this helps build the brand i remember sitting around listening to charlie rose talking about some real luminaries in the business they asked what could hurt your business, reputational harm. and one thing i'm protective of is reputational harm and making

sure we are branding our customer the best we can be and with the lpga and st. jude's is very important. >> what do you think is the future of golf and women's golf going forward. >> it's hard to predict, dom i think we have to wait and see how the men's game shakes out, and see what happens there if there's a follow on by the women. i think they'll be able to do their own thing and not be too committed with where the men go with liv and the pga tour. >> it's great to have you here on a day when the market had a massive rally. these days everyone is trying to figure out what happens going to happen next. you have a front row seat to volatility on the future side of things take us through what you think the markets could look like in the next six to 12 months. >> i think we'll see a lot of the same of last year, continued volatility, i know everyone is excited over yesterday when we

came in with the cpi number that was .1 different the markets anticipate where the market is going to be, what the fed may or may not do. i didn't hear people talking about the geopolitical events or using those inputs going into the marketplace. so i still see risk out there. uncertainty in the middle east, between russia, ukraine and who knows what's going to happen between chinese and taiwanese so it's an interesting time right now. i see a lot of the same for 2024. >> just a few moments ago, bob diamond was on talking about some of the potential issues around the debt markets, debt overhang, treasury issuance in the future and cracks in the market that may or may not emerge what do you think is the unforeseen, foreseen factor that can drive market volatile besides geopolitical. >> one thing i've seen, i said it before to carl in studio and

sara, when you look at the govern issuing debt, if we don't get the demand for our treasuries we have to continue to pay more for people to buy those. again i don't think people are factoring that into the equation so i think we'll see more of that pricing as the year goes on so i don't necessarily disagree with what bob diamond said. >> i'm going to toss back to you guys but this is going to be a great tournament, a big announcement from cme group. >> thanks, dom carl i hope you're doing well. >> carl is doing great dom, thank you sorry about the weather there. quick note as we head to break. don't miss it we have a cnbc exclusive with satya nadella he will be live from microsoft's annual ignite conference of course we will talk a lot, as you might imagine, about a.i. initiatives at microsoft

it's a $2,750,000,000,000 market cap company. 1:00 p.m. eastern, don't miss it we'll be right back.

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tell us at least what we are expecting. eamon? >> good morning, david president biden landed in san francisco late yesterday he was greeted by local officials and headed off to a democratic party fund-raiser last night chinese president xi jinping also landed shortly after the president greeted by treasury secretary janet yellen california governor gavin newsom and a military honor guard one thing that is still officially a mystery, though, is where this meeting is going to actually take place. the administration is only saying it's going to happen in the san francisco barrier and not offering details other than that officials are setting low expectations around the meeting, saying that the goal here is to show that the u.s. can have competition with china without having a confrontation with that country. and although some of the outcomes have likely been agreed to already, the key one is going to be reestablishing military-to-military communications, which could help prevent an accidental conflict in the region. president biden would also like china to agree to measures limiting the flow of fentanyl to the united states. and this is an opportunity on the chinese side for china to

reset global market expectations about the direction of its economy. one way china is going to do that is with a $2,000 a plate dinner tonight with what we expect will be a glittering array of american ceos here in san francisco. a chance for beijing to remind washington and the world that it has powerful friends here in the united states. we've already seen some agreements nailed down in the run-up to this meeting the administration announced last night for example that u.s. climate envoy john kerry and his counterpart have agreed to a set of climate measures, including relaunching bilateral climate talks. so all of that is to say that there has been some success in the run-up to this, but the expectations are low for what will happen in terms of concrete deliverables on the back end of this summit, guys. back over to you >> yeah. eamon, you just mentioned a $2,000 a plate dinner. for u.s. ceos and xi ji pnping s

going to be there. who are they paying that to you? >> they're paying the money to the organizers, for security to rent the hall and all of the food that everybody is going to eat tonight. they say it's just an expensive undertaking to put this on it's the u.s./china business counsel and another organization that are sponsoring that dinner tonight. and it's -- so it's not like a political fund-raiser, like you would see in the american context, but we will see a bunch of american ceos, no attendee list has been released publicly, but i'll be in the room tonight and i'll be keeping my eyes peeled for any familiar faces. >> eamon, thank you and thank you for clarifying that as well. >> you bet >> meantime, a quick programming note cnbc is launching a new cross-platform franchise called "cities of success." we'll feature a different city each quarter and highlight the entrepreneurial spirit that is attracting capital, companies, and employees. our first stop is going to be nashville, tennessee do not miss our one-ohour

prime-time "cities of success" special december 6th at 10:00 p.m. eastern time. kind of a cool way to look at how capitals move it away from urban hubs into a different generation of cities as the ability of the american city to reinvent itself is pretty astounding right now >> national is a great way to start, given all the business taking place there >> music, health care, and a bunch of new industries moving in it's going to be fun >> great, looking forward to that we have a documentary coming up as well tomorrow and sarah is in las vegas, where the race will begin soon, as well what's coming up in the next hour, for "squawk on the street"? >> thank you, david. well, you know, eamon, the ceos that are there for the meeting with xi jinping, many of them will go from san francisco here to las vegas for this big spectacle, as you know businesses big and small have been jumping into formula one, trying to tap into some of the growth in its demographics and its viewing. and just the spectacle that is here in las vegas. we're going to talk in the next

hour to renee wilm. she is the ceo of the las vegas grand prix she was in charge of making this all happen and it was not easy to build a track in the middle of the vegas strip. they have to close it down and deal with security and infrastructure and there are questions about ticket prices falling into the event and what demand looks like and what success will be we'll talk all about that with her, and in the next few days, i'll have live coverage from vegas ahead of the premiere of our documentary tomorrow night, ac00 p.m. eastern on cnbc inside trk. squawk on the street continues after a quick break. a competitive advantage. ♪ it's raising capital to help companies change the world. ♪ opportunity is making the dream of home ownership a reality. ♪ ...and driving the world forward to a greener energy future. [applause] sometimes the only thing standing between you

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good wednesday morning and welcome to another hour of "squawk on the street. i'm sara eisen live at the bellagio hotel, fountain club in las vegas, ahead of the formula one race this weekend. carl quintanilla back with me at post nine of the new york stock exchange today the ceo of the las vegas grand prix, more than $1 billion of economic value expected to be brought to this city >> huge news will be all over it, sarah. meantime, a softer than expected inflation print. ppi with its biggest drop since april of 2020 targets the top s&p gainer on