chain. the demand for goods has come down pretty significantly. it's really about the services and everyone on the services side, we're starting to see some of that cooling. shelter as well. rents in the real economy are decelerating so although we feel like we're a little stuck here, i think we're going to make more progress into next year especially as we see the economy get back to normal and then start to slow. >> we're out of time, meera. someone told me tomorrow is friday make sure to join us "squawk on the street" is next ♪ good thursday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange futures a bit soft as we get more cautionary signals about the u.s. consumer, most notably from walmart and jobless claims, highest in two years on a continuing basis yields are dropping. ten-year 4.45% our road map begins with walmart. under pressure raising the full-year guide but

still comes in below street forecasts and does overshadow a quarterly beat it is also a rough morning for shares of cisco. after the company cut its full-year revenue outlook. and we'll also have takeaways from the meeting between presidents biden and xi. that, of course, on the sidelines of the apec summit in san francisco. lot of earnings to get to this morning, but we will start with walmart sinking almost 6%, despite beating third quarter earnings and revenue estimates retailer gives a cautious outlook about consumer spending. >> recently, we've experienced a higher degree of variability in weekly performance in between holiday events in the u.s., including seeing a softening in the back half of october it was off trend to the rest of the quarter. sales during november have turned higher as unseasonable weather abated and we kicked off holiday events so, sales have been somewhat uneven, and this gives us reason to think slightly more cautiously about the consumer versus 90 days ago

>> jim, people say the comp was almost the opposite of target, up instead of down >> came from a very hot place versus a cold place with target, and we had brian on last night, brian cornell, very bullish, not on the consumer but on his operation. i would point out, i think that john david rainey really did give you the thrust of why you probably don't want to sell it down here, which is that cold weather did ignite sales we did have october was weak, but if you're going to do this week to week, it's very difficult. i think it's very easy to say walmart's had a big run, so let's just go buy target >> all-time highs yesterday. >> yeah. >> tough to come in. >> they told us we'd be safe in walmart, though. >> i was wrong i did not tell you we'd be safe in walmart >> yes, you did. you were talking about how the stores are in great shape. >> i was talking about the movie "witness." geez look, i think that walmart's been the horse, and target hasn't, but e-commerce is up 24% versus target's much weaker same-store sales, healthy.

i do -- remember, same story sales were plus 4.9 and target was minus 4.6. it does matter >> we pointed out yesterday there was a big discrepancy in the performance of the stocks over the last couple years, last year as well, but you did have high hopes coming into the quarter. they seemed to be dashed a bit by this guidance >> i think that it is walmart's time if the -- this is the wheelhouse if the consumer is weak, they will go to walmart and i don't want to be too granular here, but in an aisle-by-aisle contest, you're going to go with walmart i do think that target got to the point where it seemed like that it was doing really poorly, and let's remember, same store sales are the real health, life blood. >> without a doubt, and yet that stock soared yesterday despite, to your point, the fact that many expect or at least there's an expectation you could still see negative comps next year for

target >> i asked brian cornell that exactly. and i would point out that one of the things that i liked was that they seem to have gotten this shrink, the stealing, under control. they have had to do it with lock and key, carl, and i don't think people like lock and key, but what he's doing different from what many of us remember anecdotally, let's say at walgreens, is there's someone on every single aisle when you press, what happens is there's someone there, as opposed to the, can i have help in the shaver area it's like, wow and you feel awful too >> grocery inflation down 300 basis points quarter on quarter. the headline that is popping this morning is the line that we may be managing through a period of deflation in the months to come >> which, therefore, it says that, look, you may think that the same store sales are decelerating, but that is in keeping with deflation that's actually a line-by-line i don't buy the decel, other than the fact it absolutely is -- it's one for one with

inflation. >> so, the idea that margins in the past have been the function of inflation, you don't think the inverse starts to happen now? >> no. look, profit is growing 2% faster than sales. twice sales in q4. i think the plan is working. look, i think you sell it down here the reason why i would -- well, i don't want to sell it down nine, but the only reason you would sell it down here is if you said, i have such a big run. i literally say this thing is overvalued versus target, and i would argue that's not the case. >> is there any read on the consumer overall, again, back to walmart here last couple of weeks of october were weaker or a slowdown, but the first two weeks of november, things started to pick up, particularly apparel, maybe because it got colder. is there any takeaway in terms of the consumer right now? >> the target call, there were over 30 instances of brian cornell talking about the

consumer was strapped or in a touch situation but resilient, and the commentary from walmart is, look, we're okay it's kind of where you shop if you feel that the prices are very good at walmart, as you know so, i don't know i mean, i was chafing when brian cornell was saying all these negatives about the consumer, and yet, the profit growth is good but the sale -- you know, i just -- look, the profit growth was so much better than people thought. >> on target >> yes and that was a function of, they didn't have a bad inventory problem, so there's no discounting, no promotion, and i think that they finally have a -- they have those costs under control. they have freight under control. steph was talking about this earlier this morning they have a lot of different things that were out of their control, supply chain, and they all now are in control, and they're opening stores again they just opened a store on 14th street in manhattan. >> he told you we like opening stores >> they did close stores in

philadelphia interesting that one of the most challenged stores is a mission street in san francisco, and brian told me that store is now making a lot of money. challenged because there was a shrink problem i saw a mass raid when i was there. he said, listen, we got that under control. >> td cowen, though, does cut target today margins can come without growth, says oliver, but it would be nice to have a great-tasting vanilla strawberry cake and eat it too also, by the way, children's police s place is down 16 we know what burberry said yesterday. >> it's just china i love oliver's stuff. i'm not backing away from thinking that brian's got this under control. i think that david's right, there could be a same store sale problem, but you know what people thought that about macy's and i wish i had bought macy's at $11 >> right macy's is going to be going the other way from walmart today you can see it right there up almost 10% on better than expected >> you know what would -- do you know what would be the pivot for macy's this is interesting. >> what?

>> if the chinese were to resume -- >> travel? >> yeah. there's three a day versus 33 before the -- >> yeah, the flagship store here on 33rd street certainly is a beneficiary of significant tourism, particularly from china, which obviously is not really happening >> no. and i didn't see anything from the conference that would indicate that the junk is going to bloom >> no, it doesn't appear that way. we're going to get to covering that very shortly. we should probably hit cisco as well >> we can lump cisco and palo alto together. cisco with the beat, but the guide below for q2 revenues and eps. chuck told you customers have stuff they still haven't installed. >> cisco clear mist. they first told you they had this big backlog, and now the backlog seems to have shifted to the customer, except it's not backlog with the customer. it's just they have too much, and they can't -- someone was staying this stopped the

channel. no cisco sold the stuff, customers bought it and haven't been able to implement it. that's just bad. that was a very big, very big number cut that they gave you for the future >> stock is getting crushed. >> that makes sense. >> a slowdown in new product orders in the first quarter of fiscal '24 believes the primary reason customers are focused on installing and implementing products in their environments following exceptionally strong product delivery i feel like this has happened with cisco in the past here along the way. >> i'm not going to disagree with that, and there have been times, and interestingly enough, here it is back in $45 i would tell you chuck robbins would say, you know what we didn't do well. it was not a good quarter. >> what accounts for that? do you need to push more sales i don't understand >> no, the customers wanted a lot. he had a problem delivering, because of supply chain, so then when he delivered it, they turned out they couldn't handle it all at once, but that's -- it was a bad judgment, but people, of course, are saying is that there's a macro concern, that the customer doesn't want it,

and chuck will tell you that's not true they want everything, and he had a big meeting with jensen huang the other day where they're talking about, remember, nvidia bought melanox, which is a company that helps integrate, and jensen's gone to cisco and said, we want you to be a partner too, and cisco resells some of the nvidia stuff we can talk about microsoft later. >> one shareholder is probably happy they took all cash >> no disagreement there and i was hoping to hear the deal would be closing march, april, but it's really up in the air i air. >> it's going to take a little while. it's moving along, though. >> i want to say because nikesh is going to bury an axe in my head that nikesh from palo alto is arguing there's no change >> he said it's not a function of demand. >> he made a point that profits are what matter, and take a look at the revenues, and he gets into this concept, tcv, the total contract value, which

included financing because he said that the cost of money's gotten so high that conference call was incredibly contentious where there were people -- at one point, someone said, "is this like cisco have you listened to the cisco call?" he says, i'm giving you my call right now but when i'm done, i will not listen to cisco because that's a hardware company and we're not. remember, this was the sixth best performer in the s&p coming into today >> the case with many of these, walmart, palo alto, not so much cisco, alibaba, came in hot. they came in hot baba had been up in anticipation of the summit of apec. and target was ice cold. but palo alto did guide second quarter billings below the street, and they cut >> well, all right, so -- am i wrong? >> he was saying that billings are no longer the accurate read. you got to use performance and i'm not -- performance

obligation is something marc benioff taught me you should be looking at, at salesforce. i can't suddenly say, you know what benioff says rpo is good and nikesh doesn't that's not the way i looked at it he would say, you didn't look at it when rates were so high i asked him directly i said, listen, the stock is down 20 points how good could you be? and basically nikesh always reminds you that you're not as -- well, okay one time i told andy reid, because i have to use the nfl, andy reid, i didn't like a play that he did. he said, that's because you're a fan and you know nothing i said, thank you >> well, investors may know nothing and have decisions about the stock. >> yes, and i did get the impression that nikesh aurora andy reid-ed me. >> we give him the benefit of the doubt given the performance

they have had over the past few years. >> nikesh aurora has not missed. he wants to get to a $100 billion, and he will get there. what matters, the attacks are every day. threat prevention is what matters. the sales were terrific. the profits were amazing very different situation from cisco. and i want to give him that. the thing that david said, which is, look, the stock came in just everybody was looking for big upside, like walmart, and it turned out that what you should be going for were the things that we're doing badly, relatively, target not children's place children's place is not a -- not an issue >> right and i mentioned baba as well >> can we talk about baba for a second >> i think we can, sure. >> a lot of people were so high on the cloud initiative. >> yes, and now they're no longer going to be spinning the cloud. they're going to continue ahead with the plan to -- >> cloudy with a chance of meatballs?

is that what you're telling me >> cloud is staying behind that maybe a disappointment. as i said, it's hard to see on this chart, it came in with a little bit of enthusiasm in terms of some hopes for a breakthrough perhaps between biden and xi that would reflect positively in some way and it may be lack of that but -- and the quarter, which was fine but not great >> no. >> you know, they met estimates. they didn't beat >> eps was shy, but revenue was in line. >> right i think that china's been hit-or-miss. it's been good for starbucks they didn't have the oat milk yesterday at mine. they were out of the gingerbread. but i would point out that i'm not worried about starbucks, because the demand for a coffee is great nike, still saying good things apple said great things, even though we were supposed to think that apple was getting crushed by huawei, but when it comes to luxury goods like at estee lauder, david, that's been a challenged position for my travel trust

i feel like i'll bring that out ahead of you saying that >> challenged? that's one way to say that if you didn't own it, you'd say something else >> well, burberry comps up only one, and down ten in the americas, jim. that's raising concerns. >> look, you go to walmart, they're not selling a lot of burberry, okay they're selling things that look like burberry, and i feel great about that i love -- my walmart comped plus 16%. my walmart >> your particular walmart is that in the release >> no, i just -- >> that's just jim running up and down the aisles buying everything he can. >> i think it's important to know your walmart and how it's doing. >> meantime, busy day today. we got claims, of course, import-export prices, now industrial production. let's get to rick santelli >> yes, industrial production for the month of october expected down 0.4%, carl, comes in at down 0.6%, which means it's the lowest negative month

over month change of the year. you have to go back to december to find a bigger negative, and that was a big one at minus 1.54%. we do see a revision also a bit negative taking our 0.3% for september down to only 0.1%. on utilization, expecting 79.4%, another big miss here. 78.9%. you have to go back to october of 2021 to find a smaller number 78.9%. as a matter of fact, just to really put context, the last time we were at 80 or higher has been basically a year, november of last year these normally fuel lower interest rates, as you see today. weaker data points but do remember, we also have the other side of the equation in the form of debt, supply, and servicing that are also potentially a tug of war with interest rates

ten-year, down seven basis points on the session. "squawk on the street" will return after a short break at pgim, finding opportunity in fixed income today, helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today.

let's turn to u.s.-china a day after presidents biden and xi met on the sidelines of that apec summit in california. our eamon javers was in the room during their dinner with the u.s. ceos and a lot of discussion today about the standing ovations. >> yeah, that's right, carl. this was not president biden, just president xi of china i was in the room for this

extraordinary evening last night as the leader of the chinese communist party told a room full of many of the wealthy capitalists in the world that china is ready to be a partner and a friend to the united states, and he drew a standing ovation from the ballroom full of top american executives some of the biggest names in finance were there, including billionaire blackrock ceo larry fink and billionaire stephen schwartzman, who flanked chinese president xi jinping at the dinner table last night. also in the front of the room were tim cook of apple and albert borla of pfizer xi jinping said that the united states and china have a responsibility to lead the world. >> translator: ladies and gentlemen, friends, we are in an era of challenges and changes. it is also in an era of hope the world needs china and the united states to work together for a better future.

we, the largest developing country, that is, china, and the largest developed country, the united states, we must get along with each other. >> and one interesting note there, elon musk was in the building during the dinner he attended a vip reception before the event in the room where xi jinping was expected to be, but the tesla ceo left before dinner began and was not seated at the head table last night. back over to you guys. >> eamon, there has been some -- i'd like to hear from you, obviously, being in the room, that there really wasn't much offered, though, in the way of concrete invitations, so to speak, to corporate america to come or invest or anything sort of offered that might make things a bit easier, was there >> no, it was sort of a de-escalatory speech, very

diplomatic xi jinping talked about the raids back in world war ii, the pandas, all kind of things that the united states and china have in common. he said they have two different systems of government and that the chinese respect the american system of government but he did not say, specifically, to my recollection, we want you ceos to invest in china he did say he wants americans, generally, to travel to china. he wants a lot of back-and-forth he wants students to come. that sort of thing but this was just a fascinating moment, sort of this extraordinary scene where some of the top corporations in the world were gathering to honor xi jinping and the list of names -- i tweeted it out a short time ago of the sponsors and attendees at this event, it was pretty much an all-star list of american capitalism in the room last night >> yeah, a lot of the page ones today, eamon, talking about that establishment of military communications we'll see what kind of benefits that pays off, if any, in the months and years to come

eamon javers, what a story this week out west. take a look at the premarket here we've been through walmart and cisco and palo alto. get to some of the other names that are making news today futures, close to the lows of the session, and yields also a little bit lower today as well we'll get cramer's "mad dash" as well in a minute [ "i'll be seeing you" by the five satins ] the mercedes-benz holiday love celebration is here. come in now for the exceptional offers you're bound to love, now, through january 2nd.

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all right, sheila, are you throwing a dress like a dad party, a birthday brunch, or a vow renewal for your dogs? yes! the right drinks delivered for any party. drizly. s&p laggards are going to be reactions to the earnings we've just discussed there's cisco, palo alto, and walmart leading the list today we'll see what kind of impact that has on the major indexes. we'll get to williams sonoma and sonos and microsoft. got a call on intel today as well we'll get to that. opening bell in less than five minutes, and don't forget, you can catch us any time, anywhere. just listen to and follow the "squawk on the street: opening bell" poas dct.

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welcome back let's get to a "mad dash." opening bell, very close minute and 15 seconds, so you don't have a lot of time to talk intel. >> if you want a tech stock that could rally today, there's a mizuho piece today, very good. $84. so, if you're looking for something to withstand the selling, go with intel it's a nice piece. they got a road map for prolific products launches. it's very positive pat gelsinger is doing a lot right. >> you've become a lot more positive >> i have to he's unlocking value, and he's got a better road map than the company's had in a long time i am more positive on what pat's doing. i have to be he's doing a lot of good things, and i can't ignore them and say, well, it doesn't matter. >> yeah, the upgrade talks about intel share actually may be up >> david, losing share, losing share. and i think that when you do a

spinoff, that is worth a lot of money. look, he's got the company humming. >> let's get the opening bell here at the cnbc realtime exchange at the big board, it is hamilton insurance group celebrating its recent ipo and at the nasdaq, women's soccer elite champions got some f1 action tonight as well >> can't wait. i've got to tell you, i always like stock takeaways, so i think there's a lot of stock takeaways, and i first got interested in these stocks, david, when you talked to the fed. that was when i first realized maybe you have something here, and you have stefano coming in, taking over. i'm just saying that you were the one that broke down the brains and broke down formula one and there's a lot of money being made >> there is. there is i mean, you know, obviously, you can see what's happened.

formula one tonight at 8:00. and don't miss sara's doc, and we'll be hearing from her in the next hour. >> there's something for everyone you can watch it, make some money off the stock. i think the stock had been red hot. >> they've created quite a franchise, been helped a great deal during the pandemic by that netflix show, which was just brought in a plot of new fans. and as for the braves, that's sort of a separate situation there is always continued question there, frankly, whether there's going to be an ability to sell it somehow, but typically, you know, those were all cash deals liberty doesn't like to do that. you want to do something that's got tax benefits to it we'll see. but that's been a very successful property for them as well, not just the team but the real estate. >> my travel trust owns wynn, and i would think there would be a read-through because wynn is doing so well. they have two properties in macao. one is doing well, and one's not. i'm always looking at china.

the upscale one is not doing one. it's almost as if xi has said, don't show us wealth he didn't really give a lot to -- >> to corporate america. >> hock tan was there. we didn't get the high sign. >> hock tan, yeah. have you heard from -- have you heard anything on vmware >> no. no i was hoping that that would be an olive branch. >> a lot of risk arms were completely locked up on the election the point is, they made an election weeks ago they can't trade the stock what you see right now is so little shares being traded because everybody else is stuck. it's a fascinating situation as they await approval from the antitrust authorities in china there had been some hope that maybe it will come out of this meeting somehow, even though it seems unrelated. >> remember, hock was saying, very shortly, and he was at the dinner >> he was at the dinner. >> the fabled dinner honestly, i'm putting together an etf tonight

i am my research director suggested that >> the j"the journal" broke it l down apple, walmart, qualcomm benioff and musk go but don't stay for the dinner and zuckerberg doesn't go at all >> he doesn't have any business being there. free speech. >> half of all tesla's cars are made in china and you don't stay for dinner >> zuckerberg has become the standard bearer for free speech and the good part of tech. >> they're now allowing ads on instagram that you can talk about a stolen election. that's one of the stories that broke yesterday. >> look, i was hoping at one-handed point, because i'm selfish and my travel trust owns it, that tiktok might be more than just some lone senator out west might be against tiktok, but i push back there and said, it's very hard to get a line >> the chinese limit the consumption of tiktok in their

own country to a very small amount of time amongst the population of course, that can -- you can do that when you're a dictator, which -- >> which the president said he is >> it was ad hoc it was not done as part of the formal remarks >> no, but he's like, yeah, he's a dictator >> we live in an alternate world with fentanyl. >> say again >> there's an alternate world with fentanyl where we're not going to flood your country with fentanyl honestly, fentanyl, how is that a foreign policy issue isn't it just a criminal issue crack down on the people who are selling us fentanyl. they have. >> they provide the chemicals to the cartels in mexico that put it together and get it over the border we don't discuss it at this show very often for obvious reasons, but it is a crisis in america of enormous proportions we're talking -- >> it's unbelievable >> -- hundred thousand deaths from opioid and opioid-related drugs in this country. it's shocking.

>> and i find only on our great, you know, the netflixs of the world do we ever hear about it hulu i mean, the best things that have been done have been these dramatic -- i shouldn't say -- there was a good -- there have been some books about it >> what are you talking about, "dope sick" >> i thought it was very good. it brought it to light >> i think a lot of us understand purdue pharma and what really happened there and how horrible it was. >> i remember going to the sackler museum at harvard and saying, these sacklers must be so terrific. and then i had a second thought about it >> you can hope if we cut the chemicals coming from china, that will help >> yeah. >> do you think that the establishment of military communications removes some of the worst case scenarios on taiwan that was discussed a lot yesterday. >> yeah, but i want to see a follow-through, because i remember when president obama met xi and he said he wasn't going to go down to the south china sea and literally a week later went to the south china

sea. i want to see a cessation of this taunting in the philippines. i want to see a recognition that not -- i know he's never going to say taiwan is a sovereign state, but a recognition that, look, we're not going to do these flyovers i mean, i think the flyovers are obnoxious and should end i felt like if this had gotten more out of control, that we should put troops there, but i know that's not our posture. >> broad retail weakness, jim. dollar general, costco, walmart, of course, is the story, but dollar tree. etsy is also in there. >> it's so indiscriminate. costco's table -- if you think that brian cornell is right about the consumer and there's all these different reservations, then you should be buying costco. but again, costco is at a high these stocks were at highs and there's going to be rotation into other places that are not doing as well. i find this is a market that says, all right, we see what's hot, magnificent seven, let's take some profits from magnificent seven. retail's been hot. let's take some profits. let's find areas that aren't

doing as well. i have csx on tonight. that stock's done nothing. let's go buy some csx. >> all right they're listening. see that buy some csx >> right david, are the brokerage stocks ever going to come back? >> i don't know, jim i don't know they did earlier in the week on the cpi number in particular not brokerage, but banking i mean, bank of america up sharply, given the benefit to its bond portfolio that we've talked so often about as being the victim of higher rates >> gorman is making some comments >> james gorman made some comments, i think, cnbc asia >> yeah. >> they were positive. >> constructive. >> yeah. >> constructive. now, i hate to see -- >> do we want to take a listen to those >> take a listen that's code for, what is it? s.o.t. >> sot, yeah sound on tape. take a listen to gorman talking about inflation.

>> the answer is yes inflation was 10%. wasn't transitory. there was some structural issues there were supply chain issues are we done? we're not done is 2% absolutely necessary my personal view is no but directionally, to be heading in that around 2%, 3%, i think, is a very acceptable outcome >> look, he was telling me that 4% was going to be okay not that long ago i will say this about james gorman has he ever looked as refreshed and as excited now that he's leaving? i mean, maybe that's the trick when you're on wall street you serve time, and then you get to enjoy your life he looks so darn happy >> he does he looks good. >> isn't that nice >> yeah, sure. another chapter beginning for him soon although, he still will be chair. >> but he's got a glow about him. he's not -- doesn't feel like the weight of the world is on him. the $75 price tag from $100. east not wearing that. the cheap suit of that

>> hoe's not. you're right >> cheap suit is right, man. >> i'm not wearing a suit. >> jacket and tie. >> i'm so glad i don't smoke, because man, would we have -- >> i know. i know this is a fire hazard. i know polyester. >> it's unsettling if it was poly, it would be fine, but it's one of those -- it's like butane he's got a butane jacket on. >> as soon as i put this on this morning, i thought, this is the fire jacket that jim loves >> you know what ngls are? natural gas liquids. you're like a master limited partnership, david >> gorman's point, though, about deflation, jim, we mentioned the walmart comments i don't know if you saw ppi yesterday, but thank you, liz ann saunders, deep water freight, down. >> it's going too much the fed's way. til timbers was on this morning. he's obviously the person i

think is closest to the fed, of print, because steve liesman is very close he said, look, there's no case to tighten but jay powell is not going to come out and say, we're not going to tighten th that's not his style why declare victory? >> so, in other words, do not talk about it until you actually do it. >> i think that's right. don't ask, don't tell. >> cisco shares down 11.5% >> oh, you had to just go -- >> i'm sorry, up 6% for the last 12 months, but obviously, no longer performing in line with the s&p. >> talking more a billion dollar miss >> i did want to make one point here, and this is not a -- just a long-term value, sometimes you remember cisco i had a chart made i don't know if we have it >> you mean when it was $400 billion >> 500. take a look. sometimes you never get back sometimes it just doesn't happen for you. i don't know if we have the chart. >> you mean like the jets? >> remember the dot com boom remember that?

>> wow >> wow >> will you look at that qualcomm going to a thousand info space remember that one? first trillion dollar company. not. >> aol but yeah, there's cisco. a survivor for certain, but nowhere near the almost half a trillion dollar market cap that it inhabited at that point >> yeah, i remember the nortel orders didn't come through remember that? remember the nortel orders >> yeah, bankrupt because the chinese, huawei, basically stole all their intellectual poerpt, p property, put them out of business that was my first cyber espionage piece. >> you're sharp as the day you were canned. >> thank you >> lucid >> oh my god, the brazilian order. remember when it was, just don't sell us and then it became, just don't sue us with the beret >> like a $30 billion all-stock transaction. both companies are gone. >> unbelievable. copper mountain. that was the year we would come in -- i had this group called the red hots, and of course they

all vanished, but you would be following these companies, and they would just have unbelievable orders, orders, orders, and then one order would go away, like the lucid order, i'm not going to mention the ceo because was an ugly moment, but he came to see me and goes, the brazil order did not make it >> lucid, you're talking about rich >> i wasn't going to mention his name >> we're going down this -- >> the rabbit hole it's not memory lane >> it was like the most widely held stock >> everyone had lucid. >> where did lucid end up, with alcatel? >> yeah, lucid -- there's a new lucid. >> there's a lucid and a lucet >> that's not fair >> back to the news of this decade >> sorry >> microsoft, jim, na nadella's

keynote, there was a lot of discussion about the chips coming from amd and microsoft and what that means for nvidia >> great interview, but i would tell you -- you used to have vapor ware that's semiware. right now, microsoft has teamed up with oracle because they don't have enough nvidia chips sure, everybody has an nvidia knockoff everybody. well, show me the money. david, no one has -- no one has an h-200 no one has >> no one has it >> jensen has it they charge $40,000. >> your point is nobody else has that technology. you don't think microsoft will be able to design their own a.i. chips successfully >> he worked on it for 20 years. i want to see them i want to see the foundry that's making them. i think nvidia, which is going to report -- >> tuesday >> in light of what we've seen, when you report a good quarter and it's not enough, maybe there are people who say they're going to have to raise by a couple billion i don't want to put that hype in it but i think the fact that you can do an nvidia knockoff like

it's some sort of yeti, it's like a yeti. i got a yeti knockoff. >> we forget sometimes, we talk so much about generative a.i., but the writing of the code is probably one of its most significant advances at this point. >> absolutely. >> in terms of the ability to have engineers so much has filled in now. he was saying in the positive light, but certainly it will seem to replace any number of jobs >> it is amazing let's say you were designing something. you're designing a brand-new potato chip. all you have to do is just -- all you have to do is speak into the thing. just go to adobe and say, listen i'm just saying that adobe, service now, which i think we have some good announcements coming up, these companies are making money right now on a.i. and look, copilot is probably the number one way to make money. i'm not -- total props to microsoft, but adobe's having --

adobe and service now are the biggest winners so far >> it's aln all-time high on now microsoft about a dollar away as well >> service now, they're very integrated i'm beginning to question if -- i mean, if you're in the same room as jensen huang, does that mean you've got the glow i had dinner with him, and i don't feel like i'm glowing. he's the greatest guy. everyone says the same thing you know he's such a great guy. because everyone expects him to be, you know, kind of like a guy who doesn't have -- >> never met him >> we know there's some people, for instance, a guy who makes cars let's say there's a guy who makes cars and he does cars better than anyone, and he does them in china. you don't expect that guy to be a nice guy >> you don't >> no. >> okay. >> but jensen huang is just a delightful, fantastic man. and people don't expect that i don't know why why would anybody think that he would be other than? why? >> s&p, jim, green here.

4,505. i do want to get you on crude because we are aiming for four weekly drops, and the build data has surprised a lot of people. >> i was wondering whether our president, who missed the bottom last time -- >> we bought some. >> we had to refill the darn thing. you got to refill it, because i think people felt that a little token buy, no. i think there could be, recommending eog and diamondback. we sold everything oil except for coterra. this is bear marketville it's bear market >> it's good for inflation not core >> he always has to look at the bright side. >> always. pollyanna. >> probably helped biden's poll numbers on the economy >> i don't go there. but powell is just -- i mean, there was a -- there was a -- twitter i follow, rents are dropping very radically now. a lot of apartments that were being built all at once after

covid. i'm trying to figure out where powell is losing what is he losing on at this point? >> i mean, insurance has been troublesome. >> that's true i think chuck was at that meeting. >> he was. he did the intro for president xi >> he's a fantastic businessman. the stock's been hit i think the stock is good. but i come back and i say, powell is just -- it's just hitting -- he's hitting on all cylinders. he's hitting on all cylinders. he's delivering. >> coast is clear? >> yes >> what do you think, jim? >> i think the coast is clear. i can declare victory because i was with him even before he was with him >> is it safe? >> can't even believe it >> that's a different movie now. >> i love it is it safe yes. no, it's not safe. yes, it's safe by the way, the book was better than the movie >> that's impossible >> no, the william goldman book, it was better than the movie, i swear. >> that's the most controversial thing you've ever said >> well, i know. and olivier was just at his best >> olivier was great

roy scheider >> and dustin hoffman is getting up there in years, and so fabulous >> i think that's the right place to end, on "marathon man." >> is it safe? >> i don't know if it is >> it is very safe william devain never gets any credit for that. what a great bad guy >> that knife in the sleeve. we got green arrows. dow is up five s&p managing to reclaw some gains. bonds, we'll pay close attention today to the fed speak barr, mester, williams, waller, barr again, mester again, and cook with the ten-year at 4.46%.

don't miss cnbc's latest documentary tonight "inside track the business of formula 1" with our sara eisen. it does premier tonight on cnbc at 8:00 p.m. eastern and pacific. meantime i got some mixed

arrows dow down 15 but s&p is hdiolng 4500 and we will get stop trading with jim 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? ♪

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let's get to jim and stop trading. >> sometimes the good guys win

laura albert put up amazing numbers. williams-sonoma. many thought the top line wasn't that good. the bottom line is fabulous. she tells me the presents are wrapped, music on, excited about holiday season and we went by it this weekend and my wife says that place is way too crowded. that's what you want if you're williams-sonoma's ceo. i sa her one of the things she's done is make it so they have a terrific both on prem and website and i just think their stuff looks really good. the halloween stuff was killer. >> do you have -- next week best bay, anf, lowe's, kohl's. >> the consumer is so unpredictable week to week even, like walmart, that i think the people are just erring on conservatism, trying to be conservative, some saying it means it's bad, some saying okay, if the stock is up we tend to think -- see like walmart, i

do want to buy walmart down 11, means they probably want to sell it down 15 i salute williams-sonoma and target because they went for profitability. >> at least a shutdown of the government is off the table now and that's going to go to the president's desk one thing -- after strikes and the shutdown, two big potholes for q4 that are -- that have been arrested pretty quickly. >> speaking of strikes f starbucks strike was going to be that bad, why is that stock up a 1.25%. i think look, i'm not saying that labor, the high tide with the autos, but that was a flat out victory by the union i don't think you're going to see that flat out victory with other people they're ready. i don't think the ought autos were ready for shawn fain. >> nissan and others are saying we'll nip this in the bud. >> walter ruther, welcome back actually a little bit stronger

not -- take trot ski off the table. >> tonight on "mad money"? >> csx where people are rotating to let's do industrial stuff. remember, you still get infrastructure no one is talking about the trillion dollars that's coming next year. joseph - >> it's not all coming at once. >> no. but there is a tailwind. there's a tailwind to the economy. >> between that and ships. >> people rotating back to the real economy. >> there's a lot of money. >> two-year anniversary of the infrastructure bill yesterday. >> finally coming out to the general contractors after all that state money so look for that to really help the economy. >> jim - >> great show. >> we'll see you at 6:00. >> yep. >> "mad money. what a week. as we take a break we'll turn to some of the big earnings movers, cisco, walmart, ba ba on the move we're back in 2.

good thursday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with david faber live at post nine of the new york stock exchange. sara eisen is live in las vegas, the second day ahead of a huge formula 1 race this weekend. meantime pretty mixed open here but steady, 4510 s&p, ten-year

at 4.44. 30 minutes in we're watching walmart, of course as we look for those shares falling. after the guidance and the quarter, of course, very interesting development with walmart watching the consumer. cisco slumping on guidance amid a slowdown in orderers shares almost down on the year and macy's higher after margin improvements led to a beat that offset a 7% decline in sales. housing data crossing the tape to diana olick who has that for us. >> home builders sentiment fell 6 points in november on the monthly index, that is a big miss the street was looking for unchanged. this is the fourth straight month of declines and anything below 50 is considered negative and sentiment is now down 22 points, just since july, to the lowest level since the end of last year. the builders did make a note that nearly all of the monthly data for november was collected

before the cpi report showed inflation moderating, so you can factor that in of the index's three components current sales conditions fell six points to 40 sales expectations in the next six months dropped 5 points to 39 and buyer traffic fell 5 points to 41 higher mortgage rates did start to come down this morning but we're at a more than 20-year high last month. more builders did report cutting prices in november 36% of them up from 32% in the previous two months, and that is the highest share of price cuts in this cycle tying the previous high two years ago the price cut was 6% back to you guys. >> diana, obviously, a big downside surprise. we're seeing reaction in the home builder shares, the etf falling to the lows of the day home builder confidence is correlated to what a leading indicator of sales >> it's a leading indicator to housing starts, however the builders feel will necessitate

how many holes they put in the ground if the builder sentiment is falling we're going to start to see single family permits, all single family housing. again, we are at a low level of housing starts as it is and doesn't look like the builders are feeling better they don't do a lot of spec homes right now. when we were seeing builder sentiment higher last spring because rates dropped back you were seeing a hurnlg in housing starts what we need is supply, so this is a forward indicator of housing starts which doesn't look great. >> no. doesn't look great and we're seeing the reaction, home builders losing gains going into negative territory there thank you. diana olick. i am here from las vegas where the festivities around formula 1 race weekend have begun, guys. they have the opening ceremony here last night. an event that is uniquely created for vegas. they don't do this at the f1 races, and it did not disappoint there were lights, lasers,

fireworks in full vegas over the top style. that's part of liberty and formula 1's strategy here to capture the attention and gain more fans in the u.s it's something i explore in the documentary which i'm so excited for you all to see tonight, 8:00 p.m. eastern timon cnbc "inside track: the business of formula 1. let's talk about the market and the economic data we got, only fueling this treasury rally that has been supporting stocks overall, stocks a little bit higher again today, treasuries firmer with the 10-year note yield around 4.44. i think we should start with jobless claims because they went up to a three-month high, carl and david, and it's a good proxy for layoffs and while it's hard to read into one week's data because these are volatile, especially when you have a veterans day holiday, the trend is showing that the job market is cooling and the market, the bond market and the stock market, has been liking that,

carl it's in a weird place where bad news is good news for the market and gets us closer to a rate cut. as long as it's not too bad we talk about recession instead of soft landing. >> yeah. we had a softer jobs number and cpi, softer ppi. we have the highest continuing claims in two years. so folks who are unemployed are not getting rehired as quickly, and now we have walmart and we actually have cisco, although that being -- might be a little more cyclical than structural, but there is a point where the market will stop trading bad news is good news. we don't know when. >> exactly so you mention walmart which we will get to, but i would throw in as well, because they were lower, they were negative, even if you strip out crude, and what that tells us we're no longer importing inflation. this has been going on since march, basically, so that trend is very much intact, and there's the negative numbers there on the import prices.

another good sign for the fed what it's doing is starting to work you mentioned walmart and we are parsing all of these consumer names for commentary around what's happening with the consumer even though it was a beat and a raise, the stock is down and the commentary was a little cautious we pulled apart one quote to share with cfo john rainey we've experienced a higher degree of variability and weekly performance in between holiday events in the u.s. let's listen to what he said >> recently, we've experienced a higher degree of variability in weekly performance in between holiday events in the u.s., including seeing a softening in the back half of october that was off trend to the rest of the quarter. sales during november have turned higher as unseasonal weather abated and we kicked off holiday events sales have been somewhat uneven and gives us reason to think cautiously about the consumer versus 90 days ago. >> walmart cautious about the

consumer, despite what it's seeing as strong sales growth, which is a step down, david, from what they saw around this time last year comping around 8% i think the expectations around walmart got very high. a stock up 20% into this print year to date and much higher premium valuation to say a target, which reacted very strongly to its results yesterday. >> despite a 4.9% decline in comparable store sales over the time period in question, sara. overall, i would, again, we did get comments from target's ceo that didn't seem to be particularly positive when it came to consumer demand. walmart, we just heard from there, i know burberry, we could go on and on here, there is any overall takeaway at this point is there something pointing to perhaps a slowdown that many expect >> yeah. this is a slowdown i think you're hearing it. you're hearing it from the ceos. macy's had 7% down sales here's how macy's talked about

their consumer we do expect that consumer is under pressure they are in some cases continuing to shift into experiences and away from our discretionary categories or burberry, the company did talk about a march slowdown in retail comp sales in its second quarter and actually said that the slowdown in luxury demand globally is having an impact and if the weaker demand continues they're not going to achieve the previous stated revenue guidance for full year '24. the slowdown is here and happening and we expect that as a result of higher rates and higher inflation and everything that's going on geopolitically the question is does it materialize into something even weaker where the market has to start figuring out if earnings will really deteriorate in a recessionary way that's not where we are. we're sticking with the soft landing story because there's nothing to indicate even in these jobless claims which are elevated that we're in any kind of more worrisome territory and

that keeps this market story intact also, importantly keeps the fed on hold story intact because they'll look at these data points as more evidence that they feel okay holding. >> yeah. what they're doing is working. >> indeed. let's dig deeper into walmart and retail stocks plummeting despite a q3 beat. the company getting more cautious on the consumer as we said our next guest says it makes sense for the company to take heed going into holiday. joining us d.a. davidson, michael baker, target of 181 and buy on the stock great to have you back to the degree that they mentioned deflation and managing that in the coming months, according to the call, is that a liability for margin if, in fact, inflation was positive for margin in the past >> well, i think in a way it could help because if we do see deflation, particularly in the food areas, couldn't that lead to some crowding in rather than crowding out of discretionary purchases. a year ago you had so much inflation in the basic

categories that a lot of the discretionary items were crowded out. the reverse could happen you could invite more general merchandise sales which would be positive for margins inflation, that can hurt the dollar, but units should get better and, in fact, again those units could get better in the discretionary areas. >> between walmart and target, who would be better poised to take advantage of that scenario? >> well, you know, walmart we think. walmart is still taking market share. you know, target could see a little bit of an inflection point and be less negative in that environment, but we still think walmart is taking share relative to target now, of course target stock worked better yesterday. a lot of that is due to valuation in expectations. but we see that walmart is a share gainer in this environment. >> what are we learning about consumer discretionary trends? it still feels like, you know, first we were wondering if they bottomed, seeing some goods? i think the target cfo did talk

about better trends in apparel and home, but when can we factor in a recovery? or is that too far with the trends worsening on the macro level? >> yeah. you know, you said it earlier. we are seeing a slowdown and we're seeing that in the data points it feels a little bit like a soft landing things are slowing a little bit. discretionary, the basic goods are still doing better than discretionary, although i think discretionary could catch up a little bit but again, it does -- we are seeing a slowdown. november was better. the end of october worse in a lot of ways i think that's weather. simple as that it was really warm towards the end of october, november has gotten cooler and people are buying colder weather apparel. i think this generally does all the data points we're seeing including the retail sales does point to slowing sales we think it will be a modest holiday season, consistent to us with a soft landing. >> michael, thanks quite a story. obviously, we'll get a lot more

c clues on retail from the specialty names. thanks a lot. >> sure. thank you. as we head to break, here's our road map for the hour. a lot more from las vegas, including the impact this formula 1 race has on the casinos. how china is viewing that big meeting between presidents biden and xi we're going to head live to beijing for that. >> another luxury name warning about its ouootlk. burberry shares sliding. don't go away.

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president biden meeting with chinese president xi jinping yesterday for the first time in more than a year on the sidelines of the apec summit in the san francisco bay area after the summit president xi attended a reception and gala dinner with a number of prominent ceos eunice yoon joins us live from beijing. curious how it's being covered there. >> well, the chinese are selling the san francisco meetings as a new starting point for stabilized u.s.-china relations. the narrative here has been that president xi jinping has gone to the u.s. to meet with president biden and that he was stressing that he would seek peace with the u.s. the two had made a lot of progress that's the way it's being presented here in a new areas establishing high-level communications, including in the military, crackdown on fentanyl and green

exports from china, and also ai regulation the pattern, though, in what we're seeing is a lot of emphasis on talk and not necessarily on action. there wasn't any offer, for example, on policy changes instead, president xi's message here has been that u.s. understand the harm of containing china, that president xi had urnlgds the removal of export curbs, sanctions and investment screenings, and he was tough about taiwan saying chinawill reunify and has to this phrase has gone viral here with 720 million views so far. xi's warm receptions and standing ovations by the american business community has been reported. xi is being quoted as saying that china is a partner and friend of the united states, and that chinese modernization is a huge opportunity for u.s.

business, but what's not being reported interestingly enough is president biden's remarks at his own press briefing when he referred to president xi as a dictator so the foreign ministry today was asked about that comment they did say that they opposed the term of dictator, but they didn't attribute it to president biden. in fact, in the official read out by the foreign ministry, you can't see that term at all or the question, and that really suggests that the chinese are hoping to play down this remark and sort of move ahead with u.s.-china ties. >> it's david. i'm curious just on the taiwan comment that you highlighted for us is that language any different than has typically been the case >> well, it is tougher than what we've seen previously, but a lot of times when we've seen chinese

officials go to the u.s. when they had some sort of meeting, they do come back and talk very tough about taiwan, but what i thought was interesting was that when you heard what president biden was saying about it, it sounds as though he was -- he didn't really think it was much of an issue and also the u.s. officials have said that this wasn't necessarily, you know, a heated discussion at all it was interesting to see the chinese take, that they wanted to make sure that the people here knew that president xi was very tough in his language on taiwan. >> yeah. very interesting thank you as always. much appreciated >> let's continue digging into that biden-xi meeting and what it could mean for the future of u.s.-china relations clara read is a former trade re representative for china affairs and joins us now no breakthroughs, but that certainly seemed to be the

expectation. what is your take overall on what was, if anything, accomplished >> well, i mean, to understand what it really means for economic relations between the two countries, i think we have to start with the reality check. china and the u.s. are going to be competing with each other hard in almost every arena, with the u.s. now under no illusions regarding china's goals. china wants to be preeminent and free of u.s. constraints and spheres from geopolitical economics. this is frequently win-win competition, contrary to how china likes to portray it. someone gains and the other loses. xi believes it is imperative to have control over all the actors in china, to ensure the communist party's survival in the economy, control easily trumps pursuing economic efficiency and economic growth so that's not for business

those facts really have to be looked at when you then look at what happened in the meeting it's clear that both sides want relations to calm down, at least for now, because they have plenty of other issues to deal with and there's no major upside in escalating short-term tensions >> yeah. is it your expectation that anything could follow this that would be more constructive when it comes to the relationship between the two countries, as it involves commerce? >> that's a very good caveat because, as it involves issues like climate change, for example, the -- both countries want to demonstrate leadership in the global system on climate change and they need to because they're very big actors in that space. but no breakthroughs in this

meeting, no [ inaudible ] pandas, but no commerce. you know, china did what it often does it gave back what it took away, like agreeing to start up again the frozen talks and then gave something that didn't hurt china in any way, curbing the fentanyl precursors, but the -- there were no agreements on the commerce side. no agreements to curb supports for chinese domestic champions, no change in xi's goal to sharply reduce chinese reliance on foreign products and services you know, china needs high-quality investment and trade from the outside in some sectors for now because it's still developing, and china needs raw materials. so xi said some nice things to the ceos and make could take more steps to shore up those activities, but we need to be

skeptical. foreign players in china's market need to sleep i would say a little restlessly at night they need to see that they are tools for china's development and they will be discarded as soon as they're no longer useful so they need to make strategic plans to hedge over time in my view >> no real talk of tariffs and i know you were at the ustr and the biden administration has chosen to stick with the tariffs of the trump administration, something china has complained about in the past. why are the tariffs still on are they accomplishing anything? >> well, one of the processes that's under way at ustr supposed to be completed at the end of the year is a review of those tariffs to see which ones are sort of strategically helpful in terms of our national security concerns, and possibly

looking at, you know, shifting around how the overall tariff burden works there's a political reality in the united states that we need to be aware of, where in some quarters any kind of reduction in tariffs on chinese goods is seen as, quote, weakness so we have to take into account those domestic political pressures, even if they don't make the most sense from an economic perspective. >> claire, thank you as we take a look at a picture of both sides. thank you for your time helping us sort of try and understand what happened and what's to come appreciate it. >> my pleasure still ahead, another luxury warning, this time out of burberry what that means for retail names. shar dn moesowalst 10% we're back from a break in two

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burberry is the latest luxury retailer to report a slowdown and it's weighing on the rest of the space as well. robert frank is here to talk about what some of the numbers and commentary said. >> the commentary weighing on that stock price those shares falling about 10% today after the company reported a 1% increase in sales

that was below the 4% expected it was the guidance that really affected the stock price burberry's ceo saying the company is, quote, unlikely to achieve the previously stated revenue guidance for the coming year the u.s. was the worst performer with sales falling near 10%. big turnaround in burberry, that has yet to show results. they hired a new creative director hoping to attract a more upscale consumer. expert says this brand remains too expensive for the mass affluent but not enough quality to attract the high end. the winners and losers, the top, her mess, lvmh they're holding up the middle brands, gucci, struggling the most. those that raised prices without an increase in perceived quality, burberry dragging down the sector, lvmn and richemont, seeing declines.

>> lvmh, they've been the sort of key names to your point it feels like something of a mixed picture, so the highest end, if i hear you correctly, is okay. >> that's right. >> but everything else is under pressure. >> even within the big conglomerates, gucci just raised prices without an increase in quality. same with burberry, you can't just slap burberry on a pair of sneakers, charge $800 and think that's going to work forever it did work two years ago but not now. >> what is an increase in quality? what does that mean? >> the design is different it's perceived to have features or whether it's materials or designer quality, that's a clear improvement from another pair of sneakers that only cost $300 as opposed to having the burberry check on it. >> sara. >> or, robert, just that it's cool i wonder how much of these companies that are suffering

like a burberry alluding to this are blaming the macro economic environment when you have hermes here at the wynn in las vegas, they're not talking about a slowdown ralph lauren on the quarter wasn't talking about a slowdown in the luxury consumer the winners and losers are getting separated based on what's working in the fashion world, it seems. >> you're absolutely right one of the things we're seeing here is that faragamut, the smaller brands that don't have the marketing brand with beyonce and jay-z and that buzz, they're really suffering, so you're absolutely right what's cool, what's sort of thriving in social media culture, who is attracting the celebrities has remained an important part of this and those companies that just can't afford that are really suffering as well. >> two questions is this tied to stock performance around the world because at least u.s. stocks are still up double digits for the year, and what happens if asia

does start to open up, how much relief could that bring? >> it's a funny paradox. for markets this year has been strong you would think that would boost the art market, luxury market, classic car market and we're seeing those areas start to soften if not decline dramatically the auction sales came in, total for this year, november down 30% from last year that's drama given that stock market is up double digits for china, you know, there were big hopes in the beginning of the year for the reopening that hasn't panned out. there's still a lot of these companies that say, well, we think it's going to come back at the end of the year, early 2024 it's going to be great i don't see economically a reason in china to believe that that high end, which, you know, their executive are being detained left and right, massive flight of capital from china - >> reluctance to spend for social reasons. >> for social reasons and people's real estate is under water. they haven't gotten wage increases. i don't really see where the hope is, but you listen to the calls, the calls even on

burberry, we're hopeful about china. we'll see. >> wow quite a story we're watching with your help thank you. robert frank at post nine. s&p largely unchanged. a news update with kristina partsinevelos. hey. >> hi, carl. the israeli defense forces claimed troops faunds automatic weapons, grenades and ammunition inside gaza's largest hospital but the video shared does not appear to show evidence a hamas command center,ists beneath the hospital a claim that israeli officials have made. the u.n. and world health organization say negotiations are going on to evacuate the hospital and hundreds of patients and staff remain inside the complex according to israeli military officials. capitol police say six officers were treated for injuries following last night's clash at a pro-palestinian rally outside the democratic national committee headquarters in d.c. police say they arrested a man who slammed one officer into a garage door and punched another

in the face. police estimate about 200 people took part in the rally the athletics are cleared to leave oakland. mlb owners voted to allow the a's to move to las vegas, but legal challenges over state funding of a new stadium could threaten the move. back to you. >> okay. kristina, thank you. when we come back, the state of the year-end rally with chuck schumer's liz ann sonders. the bond market rally and why she's warning of a possible market indeson sryheigtito aad don't go anywhere.

half a dozen fed speakers on the tape today steve liesman with the latest. >> we have an interview coming up with loretta mester, cleveland fed president, but she has made headlines saying the need to assess -- sorry they need to assess the need for rates how long to remain restriction tivg and says the

past restrictive rates are keys to the policy outlook. the cleveland fed president also says heightened global tensions, pose risk to the outlook and mentioned the israel-hamas war and ukraine and slowdown in the chinese economy. demand, she says, is moderating, supply conditions have improved and says there's been an economy and unemployment slowed and discernible progress on inflation, inflation she says is well above the fed's goal and will take time to get it down. monetary policy is in a good place. now guys, for the first time here, we're presenting the probabilities for the federal reserve funds rate without looking at the hike probability because there is none. all we're looking at now are cut probabilities. get used to that, i pose, at least for a time here. 0% probability in november unchanged. january 4% cut probability march, 36% may now 69%. so within a few short months the

market has pretty much baked in the idea of a cut in fed policy. i tee this up because we have an interview with loretta mester, the cleveland fed president, and ask her that question, that's the question for all fed folks coming up, but i think it's the question they don't want to answer it's also questions i'll put to susan collins, the boston fed president, tomorrow. we have a 10:15, right on this show coming up tomorrow with susan collins, that's going to be the question. are you going to cut, sara, or not going to answer the question is where we're at right now? >> i feel like even if they say we're a long ways off from conduct not thinking about cutting, the market is not believing them. >> yeah. here's the thing i don't know about you, sara, but i have trouble like making appointments for january because it's on the other side of the year may seems further away than it is the market is going to start to price this in and may have already priced it in

it's a really interesting question how the fed pushes back on this, i will say, lore ret ta mester talked about the fed coming up with a framework for the market to at least understand or process that data. you remember there was the evans rule when the fed was talking about whether or not it should hike rates again and setting some benchmarks on economic data i don't know if they're going to go there, sara, but it is interesting to think about what kind of framework the fed is going to arrive at to answer these persistent questions that are going to be throughout about when are you cutting >> or they could pick up the old we're data dependent and need to see inflation come down. >> right. >> and keep the economy, you know, as strong as we can. thank you very much. looking forward to some of those fed interviews steve liesman. let's continue with the broader markets. our next guest warns of market indig

indigestion charles schwab chief investment strategist joins us now. >> it depends on the yields. yields are in the driver's seat. indigestion would come to the extent you get an outside inflation report or stronger economic reports which causes this retreat in yields to the benefit of equities in the case of the 10-year from 5 down to 4.5, sub4.5 today. i think any move back higher as we learned in the correction starting in late july, i think would be tough for the market to handle in turn a big drop in yields is not the right ingredient i think that would probably lead to some indigestion. i think stability in yields is probably the most important ingredient for this rally to have legs. i do still think yields are in the driver's seat. >> no question about it. i was going to ask you if the move from over 5% on the 10-year to now 4.44 has caused a change

in thinking and your view of the market overall because we are away from those sort of higher, scarier yields, which we didn't know what it would do to the economy. >> right they weren't there for long enough, i think, to have a significant impact other than through the equity market because of the much shorter reaction function associated with that. so i think back down at levels that we saw in advance of that spike up, which had a lot to do with positioning, yes, it was an increase in the term premium, but it was a really mixed bag of reasons why you had that shoot higher in yields, seeing that settle down, has been to the benefit of the market. i think a more significant retreat in yields, if it's not sort of also accompanied by ongoing disinflation, could be a signal of a much weaker economic backdrop, and i'm not sure that's built into expectations i think we are at that point

where it's more about lower volatility and stability in yields that would be most helpful for the equity market, versus a shoot higher because of inflation reasons or significant shoot lower due to much more significant concerns about the economy than what exists right now. >> meantime now we're talking about central banks globally goldman says boe may cut as early as match. dollar is back below 104 i wonder what you think happens to the dollar if banks start to get in a race to cut, for example? >> there might be more of a race to cut and cuts coming sooner outside of the united states it was interesting listening to the conversation before i came on about the market and fed not being in sync in the first half of next year and the fed pressing higher for longer keep in mind that fed has been more, for lack of a better word, accurate in saying hey, we're

not cutting any time soon. we have to remember that a year ago the market was priced to expect the fed would already be cutting at this point in the year so those expectations have continued to be pushed out i don't think we have the information to say okay, high likelihood of a may cut as steve suggested. if you were to extrapolate the current set of circumstances, i'm not suggesting you should, everything moves fairly quickly, but if you were to extrapolate the current set of circumstances it doesn't justify the fed pivoting from the most aggragrees tightening cycle to rate cuts. it probable only had happens with inflation continuing to come down and maybe a bit more deterioration in the labor market so there's probably more likelihood what's priced into expectations outside of the united states for what central banks are doing because they're telegraphing it to greater

degree i think that will happen sooner than in the united states and that interest rate differential is i think the play on the dollar. for now you've seen the dollar roll over because we've started to price in cuts, but i think that dynamic could change. >> just end on the broader market or market structure as well our viewers have seen the s&p performance for the year largely driven by seven stocks up 94 plus percent or something on average. and account for an enormous amount of the market value given they're only seven or eight of 500 stocks what about the rest? >> i heard a comment the other day from somebody that said, you know, the magnificent seven, the seven best performing stocks, that's not accurate. they're the seven largest stocks, not the seven best performers they're all strong performers but you have to go down to about the 35th ranking on a year to date to encapsulate all seven of the magnificent seven.

there are other stocks that are working fairly well. if you look at the s&p 439 or the equal weight and then try to see where leadership has resided and where the laggards have been, there is a technology bias to leadership, but really where there's been the most consistent leadership is at the factor level and in particular, quality factors like strong return on equity, lower volatility, and in particular, strong interest coverage if there's one fundamental supporting the magnificent seven is such a big driver is that if you looked at those seven stocks and considered them like they were their own sector, first of all they would be about 30% of the s&p, so wow, but they would have the lowest interest expense and the highest interest coverage so if you did want a fundamental to point to that would be it that's also the types of factors that have worked outside of just those names as well. >> liz ann, there is a sector that you like right now?

are you sort of sector agnostic going to quality in this kind of environment where economy is slowing but with the treasury rally market likes it? >> we think there's maybe some interesting opportunities within energy, even financials. i think you have to be pretty picky in materials but we do continue to think that for most investors, stock picking oriented investors, they're better served focusing on factors and applying that screening and analysis across all sectors because there are opportunities within all sectors. so, you know, there are -- the quantitative work that our folks do, do have some mild biases, but we're still emphasizing that factor-based work. >> got it. liz ann, thank you liz ann sonders from charles schwab david, the s&p goes negative still sfleng -- strength in tech and communication services. >> although i notice apple shares, speaking of the largest

market caps still down from highs of the morning. >> the impact of formula 1 for the strip where sara is right now, and many of the names that also operate casinos on that strip. stay with us hi, my name is damion clark. and if you have both medicare and medicaid, i have some really encouraging news that you'll definitely want to hear. depending on 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." i am live in las vegas for the grand prix formula 1 race this weekend ahead over new cnbc documentary "inside track: the business of formula 1. it premiers tonight at 8:00 p.m. eastern and pacific. here's a quick preview >> red bull team principal and ceo christian horner is giving us a rare peek into his post-race briefing for the company some 1600 strong.

>> the best start, kept his head and was able to recover. >> reporter: he goes over all aspects of the business including engineering. >> we have an upgrade coming. >> reporter: and entertainment. >> marketing team are doing great job posting i think close to 400 guests. >> reporter: the british grand prix win is oracle red bull's racing tenth of the 2023 season. out of the ten races held so far. it's been a commanding performance. they've got the season's winningest driver, best car and masterful pit crew how does number one impact the business of the red bull racing team. >> there's an old adage of win on sunday and sell on monday what we do for the red bull brand and the energy drink in advertising the product globally for 23 race weekends a year, we're the biggest marketing impact that the beverage company has. >> there's a correlation between -- >> absolutely. >> you winning and sales of the energy drink >> absolutely. they see it, they can measure

it they see the amount of consumption of red bull that is happening. but the fact that red bull and max verstappen are winning every single race already and already secured the championship is one of the questions about the business going forward, will that lack of o competitive drama turn off fans? it's something we tackle in the documentary, which i hope you'll watch tonight. very excited to share it here with me to break down the impact this race is having across las vegas, the casinos, the strip and more is our own contessa brewer. she's here in her second home of las vegas. >> welcome to my town, sara. >> it's good to be here. you've been covering this for a while because there's been so much anticipation going in how much of an impact will it have on these casinos? >> you've already reported on what the economists have predicted, it would be $1.3, $1.4 billion impact. the question is does that really hold out what we heard from the ceos with the most exposure on the strip,

you heard it from caesars, you heard itfrom tim hornbuckle at mgm and wynn, that this is exceeding their expectations so, for instance, caesars anticipated it would be a 5% lift we told you last year that would be the high end. we're on track for that. we've had an incredible amount of play come in. we heard from mgm they had more credit play coming in. remember, the higher end customer, the better the margin. as you move up in terms of luxury and the prices charged, you would expect to see even greater impact craig billings wouldn't talk about what the profit would be he wouldn't put a number on it but they said they're going to exceed their all-time hotel revenue in these three days. exceed it by 50% >> they would have to sell a few million dollar packages, i guess. >> if you look at the fourth quarter earnings, this can be a

really slow season up until the leadup until new year's eve. new year's eve is huge but the weekend before thanksgiving is one of the two slowest weekends of the year when you bring in this kind of crowd and this kind of activity on what was the slowest weekend, and it's going to be back year after year this is not a one-off. >> ten-year deal. >> so, there is a real impact. however, the restaurants, many of them have lost. they've seen their revenues plummeting because of construction, that drivers didn't want to come in and be there, which wouldn't deliver customers. that's a problem that they're going to have to tackle if they want buy-in. >> i was going to ask about the local community aspect here. first of all there are reports in the run-up that hotels are discounteding prices because they're not getting the sort of demand and ticket prices have come down on the resell market to me it reflects the fact that they just waited too long to release some of these hotel

rooms. and this is a high-end crowd this is not attracting those that pay a few hundred dollars for tickets. it's in the few thousand dollars. what do you make of the local impact >> if you have 150,000 rooms, give or take in the market that you need to fill and you fill the high-end ones, then you need everybody coming in that would normally come in for a las vegas weekend. what happened is they -- i think there was an expectation that you might fill all of this with f1 they should have maybe just held back some of the -- those high prices now you're seeing it now you're seeing last-minute reservations and bookings coming in. >> the high rollers are here there are a lot of experiences that i know you've been testing out. >> i'm going to show you the whole thing on "last call "re." >> contessa brewer "squawk on the street" will be right back secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience,

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welcome back this morning we highlighted the moves down in cisco, for example, and walmart if you want to come to alibaba, you can see significant weakness and the barometer of the chinese consumer to spend, it wasn't that part of business that is of great concern.

more or less numbers came in okay on the two platforms that sell but it was the cloud business. kind of being called anemic growth 2% year over year was the number and alibaba also saying that the u.s. chip ban, which we've talked a great deal about, named materially and adversely affect the cloud business they're canceling the full spend of that cloud segment as a result also some filings indicate jack ma's family trust will net $870 million. "squawk on the street" is right back after this. meet gold bond daily healing. a powerhouse lotion that moisturizes, heals, and smooths dry skin. with 7 moisturizers & 3 vitamins. and... new gold bond healing sensitive. clinically shown to heal & moisturize dry, sensitive skin.

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good thursday morning. welcome to another hour of "squawk on the street. i'm sara eisen at mgm casino in las vegas ahead of this weekend's formula 1 race carl quintanilla at the new york stock exchange traders continue to debate on a busy week. ubs laying out what they think happens with rates and the market the chief investment officer out with the 2024 portfolio strategy free retail reports paint a different picture of the american shopper what earnings from walmart,