let's get a final check on the markets. this comes as we're headed into friday's big jobs report. right now dow futures are down, but only by about 65 points. nasdaq futures are off by 2 and s&p down by 10. we had seen more weakness earlier in the morning especially when you rlook at th dow. that does it for us today. make sure you join us tomorrow. right now it's time for "squawk on the street." ♪ good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with james cramer and mark. the port strike is in day 2. adp stronger than expected. our roadmap begins with these

mideast fears. traders bracing for some early october losses to continue with the open. >> plus, nike shares are sliding in the premarket. the athletic gear giant pulling its full year guidance ahead of the big ceo change just a couple of weeks away. >> we're also keeping an eye on humana. they're down sharply. it all has to do with how many stars they're getting from their medicare plans. a lot fewer as a result. >> let's begin with futures falling. oil extending its gains. wti, jim, they're pressing on 72 almost this morning. >> yeah, it's so tranch because the saudis came out and said go to 50. it's almost as if saudi is no friends with iran. they're saying it doesn't matter what happens, there's a glut. the saudis may be looking at the fact that iran's pumping $4 million a day.

thank you, jeff seinfeld, for this. it's almost like saudi's saying, don't worry about the price of oil. whatever you want to do against iran -- >> you're not sure. >> i'm not -- i'm not privy to anything that anyone else is suggesting. i thought that within -- we're watching the oil go up. the saudis know more about oil than anybody. t >> it had been going down. it reversed yesterday on this show as we, of course, started to outline the news from u.s. intelligence sources that the attack by iran was imminent. the attack occurred, it was well defended. it's still unclear what israel's response will be. obviously there's a concern about escalation in general in the region. this would seem to indicate that oil prices would remain, perhaps, a bit higher than they had been, but you throw in saudis talking 50, and it's kind of hard to figure, right?

>> maybe you're emboldened if you're israel by looking at what the saudis are saying? i don't know. there's obviously such confusion between those prices, which obviously don't reflect tremendous volume. i come back and say i'm going with the saudis. >> interesting. there is a piece. bloomberg has got a look at the market, and supply for next year, javier says given the choice between 100 and 50, he would err on the 50 side. >> look. we're not seeing, other than china to some degree, if you extrapolate the electric cars, any real demand -- pull here. one of the things, david, that's strange is iran's -- >> that's give largely to -- where is it going? china? >> china is pumping like mad. then you go to china and russia. >> and india. >> i'm sorry. china going to india.

what i don't understand is if there's -- away from those two countries, is there no demand? i mean, how would you have 50? what's that in the equation? it's certainly not the fact there is some electrical vehicles -- >> electric vehicles are not so good. >> unless people are saying china is making so many that the demand for gasoline is going to plummet. >> we're going to watch. that speaking of energy, transportation, the number we've been waiting for all week is tesla deliveries. we might have it. let's get to phil lebeau. >> we do have it, carl. sometimes the numbers are pretty darn close to the estimates. tesla delivering over 42,000. we're not going to see a whole lot of reaction to tesla's shares today. this is the first time since the fourth quarter that tesla posted a gain, a positive year-over-year gain or an increase, i should say, in

sales. last year they were roughly in line with where they were in terms of total deliveries. this is the number people were expected. 462,890, producing 870,000 vehicles. and we'll have the date when tesla will report its q3 numbers, which is on the 23rd after the bell. just a smidge, just a smidge more than the street was expecting. guys, i'll send it back to you. >> hey, phil, i'm going to bring you into the conversation we were just having. jim was bringing up the idea, at what point does the increasing number of evs start to affect the praise of gasoline? i don't know, we're still at very low percentages, aren't we? >> we're not there, david. >> yeah. >> worldwide, i mean, you definitely are seeing the growth in china certainly impacting the

demand for ice vehicles. but we're not seeing it definitely in terms of the united states. in terms of vehicles sold, it's going to be about 9% relative to the rest of the market. ice is still 79, 80%. you're seeing a slow erosion in the ice market but definitely not to the point where you're telling people, look, you don't need to buy an ice vehicle and, therefore, gasoline demand is dropping. >> well, phil, this is jim. is this the last thing that happens before we start talking about autonomous and the big day? i've got to tell you, phil, the expectations, we don't have a lot of things out there that i hear people are so excited about other than this day. it's really rather amazing. >> absolutely.

>> it's the thing everyone is focused on. we've heard we're going to have these vehicles and drive them all over the road. what we want to hear next week from elon musk next week is, a, first of all, what the vehicles will look like. we've heard some things being leaked out about the possibility that it will be more of a different design, more of a mi microcar. they're not going to be widespread. how much clarity does he give us in terms of the growth that he expected? does he tell us, look, in the meantime we're going to be focused delivering a lower priced vehicle to the market? there is no doubt when you look at the demand for the model 3 or

the model y, the reason those are so strong, so successful is because of the pricing that they come in at. that's where the market for evs is headed, lower priced vehicles. if he comes out and says, look, we're going to come out with something even lower priced and give us some clarity there, i wouldn't be surprised to see the shares move higher. but the focus on the robo cars, that's what people are focused on. >> the cyber truck, was that a big waste of time? >> they're actually rolling out the numbers. >> numbers are good. numbers are good. phil's right. numbers are good for the cyber. >> they're not huge, david. are they as big as the model 3 and the model y? no. but they are growing production and growing deliveries. look, you see them more and more

when you're driving around. i see them where there's heavy e ve adoption. in areas where you don't expect to see them, you're starting to see them a little more. i wouldn't call them a failure. did they zig while others zagged? absolutely. that's why elon musk did a 180 in the first quarter and said, we've got to come out with a lower priced vehicle, and that's what they're going to be expected to announce at the q3 results for next week. >> to go back on the cyber truck, they did surpass the mach-e mustang sales. >> yeah. it was never going to be as big as those. who knows where they ultimately get to. they've targeted 250,000 a year. i don't know. do i think they get to 250? hard to tell at this point. but clearly they're growing their production and their sales. >> phil, appreciate that. we should also keep in mind the

way in which rates are coming down for things heavily financed like autos. you saw this interview where they interviewed dealers, and in the words of one dealer, interest rates have stifled the market. no one is financing a bike for 84 months at 9% interest. >> if you don't have something cheap, people are not buying it. this extends to everythingty i'm looking at. a lot of the young people are tapped out or a lot smarter. i'm seeing it even in food. they're saying if you didn't take price, you're okay. not just chipotle, but if you raise price, we've now hit the upper limit of what people will say. >> conagra today, first earnings miss in three years. >> i know. a lot of that, just to be clear, hebrew national during grilling

season, they had a problem at one of their plants. frozen is doing well. they're inexpensive. i still think they had an inflection in volume. they do have protein snacks, and it works with go p.1. pepsi bought chips the other day. >> we've got lam west, also another one. frozen potato demand relative to supply continues to be soft and we believe it will remain soft through the remainder of fiscal 2025. i don't know if that's gop 1s or what that is. >> it could be. look, no one ever wanted to say anything that gop does when it impacts anything at all. >> no one being who? ceos of companies that might be impacted? that's who you're talking about. we're happy to talk about it.

>> alcohol. listen, they're saying it's not cannabis while we're doing or being healthy or gop. as a matter of fact, the gop is good. it's 12 million people. people are heavy drinkers, two drinks or more per night. it's also attacking sweet -- >> did you see this piece of lvmh looking at kalcohol-free wine? and candy. >> i had candy. i didn't finish it. maybe it needs alcohol. >> you should work for nike. >> by the way, thanks phil lebeau on nike. they announced the mixed results last night. this is the cfo on the call.

>> given our ceo transition and with three-quarters left in the fiscal year, we are with drawing our full year guidance. we plan to provide quarterly balance through the end of the fiscal year. this provides elliot with the flexibility to reconnect with our employees and teams, evaluate the current strategies and business trends, and develop our plans to best position the business for fiscal '26 and beyond. to that end, we have also decided to postpone our investor day. >> referring to elliot hill who comes in in a couple of weeks. postponing the investor day, jim, double seem like it came as a big surprise. >> no, but this was truly a remarkably bad conference call. the last time i heard someone withdraw guidance was gamestop. >> wow. >> yep.

>> this was a call that just took your breath away. the amount of destruction done by one person, is extraordinar. the dismissal that they had for footlocker and for dick's, so stupid, so arrogant. there wasn't anything that this company did right during this period other than perhaps maybe not that bad in china, but i urge people -- >> the traffic declines notably across nike direct were more significant than anticipated. >> oh, my god, it was so -- it was -- that was mr. tech. mr. tech comes in and, you know what? these in the end are shoes that are fashion. if you spend more than 100 bucks for a pair of sneakers -- >> -- you're going to try them on. >> exactly. they're doing heavy in basketball, which is good.

there's a moment in tc the coms call, we're a running company. no kidding, steve prefontaine. >> this i dofrom deutsche bank. most of the analysts not particularly pleased, although there was one being seen as positive in terms of athletic wear. >> the only area -- actually china was okay. they say, we've been traditionally reducing our footwear. no kidding. your sales are off. >> by the way, b.o.a. notes

today, intraday following earnings usually fades 21 of 2 three-quarters in the last 15 years. >> that was '91, '92 that it came out. i'm not saying anything different from what they're saying. i wanted to be more bullish. they wouldn't let you. they just wouldn't let you be more bullish. talk about lowering the bar, david. i'd like to come in and take over. >> that does make it easier for the new coming ceo to meet expectations or not have any expectations. >> at one point i saw a lot of people wearing nike. honestly, nike. mark, when he ran the conference calls, they were harry iv part

2. >> we'll break down the types of vehicles that sold. hybrids, that i continue to do very well. there is the pivot of the business and that direction because of the demand there. an increase of 38%. ev sales up 12.2%. and then what's going on with ice demand? there is some erosion there, down 2.8% for ford.% but i should also point out, guys, the f series, the best-selling vehicle in the country, up 8.4%. there's still demand, but overall ice vehicle sales at ford as well as with the rest of the industry is kind of eroding a little bit. guys, i'll send it back to you. >> phil, thank you. well, ev -- >> let's say something. he did the numbers.

no one else is doing the numbers. >> yeah. >> do you follow the musk versus cuban stuff? >> you asked us that yesterday. >> well, yeah, but it just goats more exciting. >> yeah, i do follow it. if you follow both people on x, then you see it. i enjoy watching mark cuban punch back at him because nobody else can. >> there's also a climate of fear. everyone's scared. >> yeah. >> although, the "times" piece the other day, looking at five days of musk tweets and misinformation and falsehoods they had entailed -- >> i always hear the same thing. yeah, it's okay. i have star lynx, so what does it matter. i saw the star in the sky. >> the one thing he said, i don't care. >> yep. when we come back, more to talk about.

humana, tumbling on the potential news regarding medicare advantage. take a look at the premarket. nas dak was positive, but we've settled into the red across the board. more "squawk on the street" straight ahead. ♪♪ [inner monologue] in this gig... you get comfortable being uncomfortable. ♪♪ the enemy is always adapting... deepfake: hey handsome. ♪♪ [inner monologue] ...always iterating. ♪♪

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we're going to do sal salesforce? >> the product that they have, which is basically something you'll call and you'll -- you know how you used to be press 1, press 2 -- sachs has it if you want to try it. no, no more of that. you get generally ai. you get an agent that's not human, but smarter than a human, not angry like a human, doesn't

have to stay late. really fabulous. to the point -- >> matthew mcconaughey's voice. it's not his voice. >> if they want cooler, they're going to me. >> okay. >> we're discussing the idea that we're now in that era, you would get angry and say i need to speak to a human. now you say i need to speak to an agent force. you know what? maybe the artificial intelligent agent is better, knows more, knows more about you. >> by the way, you buried it. did you speak to matthew mcconaughey in person? >> i spent like a huge amount of time with him. >> you did. >> yeah. why? he's great. someone attacked -- i don't want to mention the reporter, but they attacked him and said he's

not doing anything for salesforce. >> who was that person? >> i'm not going into that. matthew mcconaughey was a poet. he was doing the lord's work when it came to a mass shooting at a school. he actually understands agent force better than anyone. tried to sign up for agent force. >> matthew mcconaughey understands agent force better than anyone. >> yes, absolutely. >> okay. what about the stock price. >> you don't believe me. sometimes -- >> i love you. >> i think the stock can go higher because i think that, frankly, it's the moment of the -- it's the greatest, i think, initiative that mark has ever had. >> really. >> yes, in terms of success right out of the gun -- right out of it. do you think i sometimes show disdain for companies with farnl gestures? >> yes, i do.

in fact, there have been a number of times you've done interviews where you have shown disdain with the interview. i think people do a little -- >> it's a time of forgiveness. >> or even this too. >> what do you think? i'm soupy sales? larry, moe, curly? are you accusing me of being sch shemp? >> no, never. you can't see the disdain when you listen to "squawk on the you listen to "squawk on the street" podcast and that m

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humana shares down. in a regulatory filing the company says the center for medicare and medicaid services cut the quality rating of its latest medicare advantage plan. humana added it's appealing to sunday results and availbling itself of all if the challenges are successful. this is all pending, jim.

we'll actually get the actual numbers on october 10th. >> when you get someone to figure it out, the star system is vital because it's really hard to discern who's better, who's not. you'll see the others up just because the -- the degradation. people are complete -- >> we'll have more time to go into this after the bell. they have 40 different categories they measure these companies on, plans on, like how quickly can you get an mri and on from there. this is company that 94% of their plans had four stars, now their ooh going to 25% having four stars. if you're talking 118 in revenue, that's 70% of $118 billion in revenue. they get a 5% bonus when you're above -- when you're four stars

or more. then you get nothing. that's what we're talking about. that's why the revenue reduction is so significant. >> each plan, carl, is a nightmare. >> it's the "opening bell." on the big board it's standard arrow, aircraft services provider, celebrating an ipo today. we'll talk with the ceo later. and speaking of china, shanghai up 8, hong kong up 30% over the

last dozen trading days, jim? >> no. i see money going into things like jp.com and alibaba. that's where it looks like the hot money is going. i come back where he goes everything, everything in china. > >>although yours appears to be alibaba. >> anyone who wants to look at a chinese company that's run like an american company, it's baba. >> very much involved and sort of helping to run the company again. take a look at one week basically on baba. that one year is almost a week. where is it? 20-plus percent and continues, jim, in terms of momentum that

you saw yesterday as well. we'll see what the ultimate impact is. but right now the market seems to be just is getting way ahead of it. >> and you're going to get this problem if you're a fund that tracks worldwide, you know, flows. you have to come in. you have to come in right now just because the momentum is so great. so it feeds on itself. carl, look. no one's thinking about whether the companies are doing well. >> they mean it this time. there have been a couple of times where jpmorgan who's not been a believer until now, he's convinced a lot of us -- hey, i like baba. when i was in italy, i got a very curious tiktok from david tepper. it was a little thing sings baba black ship and my boy said what

are you watching? i said, i think i'm watching billions of dollars being made. >> you were. >> that said, the big four, nike, apple, starbucks, and tesla, are they going to be beneficiaries as well with the stimulus? >> yesterday you doubted me. i said when you have a little more money in your pocket, you go get pumpkin spice. >> i didn't doubt you on that. >> i was -- people thought -- >> so many things, but not -- >> i was chided. >> you think it will have an impact. >> i do. right now when we suddenly find out that apple might have good numbers versus, you know, huawei, that could happen. >> do you think it's sort of -- remember last week we were talking about tech stocks harvesting? maybe this takes some of that off the table? >> it could. i was with the guys from

chipotle yesterday. candidly, i think brian's going to have a pretty good run. >> you talked to them last night. >> well, they give you a -- this information. i think it's a halcyon time. you know, he's king of throughput. he gets you in, gets you out. and the honey chicken in nashville -- >> wait a minute. you talk about starbucks and chipotle. >> you can follow me. >> i can't. >> just follow me here. >> what was interesting was your discussion with chipt poetly, not about china or even north america, but europe. take a listen. >> we're really excited about the europe opportunity. we think under a knox leadership, we're starting to move the needle and sell the economic challenge there. we have a model we like, and we think we can grow that pretty

aggressively over the next few years. >> interesting. inflation is now undershooting targets. >> i know it. what i like is they've got great expansion plans. europe can give you a whole other leg. today they open in dubai. they actually are being with a franchiser. can you imagine the growth? everyone thinks chipotle is tapped out. i say no way. f have you had the brisket? >> no. >> celebrate the holiday with a >> i'm e not going to do that. my son goes to chipotle a lot. i don't. >> i learn something new from you every day. >> like how he doesn't go places? >> yeah. but his son does. wow, okay. now we're cooking. >> he's big. he's is got a big appetite.

>> he's 6'2". >> yeah. >> is he pitching? >> no. he's retired like everybody else. poor guy. i hope he's not watching this. >> he's a good kid. >> thank you. i appreciate that. i think so too. apple shares down again. remember we had that negative piece from barclays? we're going to have the analyst join us at 10:00 at well. we talked a little bit about china. i don't know if you saw this first review i saw on the times about apple intelligence. i would not say it was a ringing endorsement at all in terms of, you know, the reviewer and what their thoughts were about what it really can be used for effectively. >> is it now the concern about the high end because users feel whatever we're going to get is still on the card as regards apple indulgence? >> yeah. you may want to wait. costco has a great deal and i'm going to go. i want to see what it looks like

before i jump the gun. i'm like a lot of people. i'm in that period where it's time for refresh, and i want to see what it's like. i trust it, but i want to see what it's like. i think i represent the majority of people. why don't people understand that then the next quarter is going to be better. i don't think it's a reason not to own apple. it's going to be extended 16. why not. >> we got this out of timoimo we they raise the target. >> i read that and thought they went from buy to strong buy. ben, who's our chief scientist, said, what is this? remember, mike receiver was saying the phone's selling well, but these analysts know more than mike seaver, right? they know more than him. >> they do occasionally have to question management and the rosy

outlook. you never know. you made the point yesterday, it ee well taken. nobody has done a better job over a period of time than timo, whether it was john legere prior to mr. receiver or the transition of mr. seaver and how well he's done there. they've crushed the competition. >> absolutely. >> period. past performance not necessarily indicative -- >> that's a good statement. >> thank you. i appreciate your views. >> it's like lily put. timo got into the entertainment business that arguably might have been distracted. >> there are some questions about what they're doing in fiber. they've got those two acquisitions, particularly well. we talked about seaver when he

was sitting there. what exactly is the plan? >> fixed wireless. >> i know, but -- >> why were you hoping that that would match that? >> it's not great for broadband providers such as our parent company. >> you had to go there. >> you went there. i just finished the sentence. i want to go back to humana. there's a downgrade this morning saying this represents a worst-case scenario result. what happened? well, they were at 94% of their plan getting 4 stars. that means they can get a 5% bonus from cms that makes decisions about the quality of these plans being offered for medicare. now they're at 25%. now a huge apartment of overall revenues is no longer going to be harboring a 5% addition.

that's bad. >> i switched. they ain't got nothing for it. >> i know. it's graded on a curve. but we talked about this in the past to your point. they had one plan that i went from 1 star to 3.5 stars that was 45% overall. you don't get a 3% bonus at 3.5 stars. you go from 5% to 0 and that's what happened here. regular cigna? some of their sharmds were talking about the idea of trying to buy humana. these shares now down 56% forhu >> when you get to medicare, david, it's going to be you-oyou eye /* eye. opening for you. >> are you going with the 4-star plan? >> yeah. you go to the doctor. do you take medicare? i don't take that.

medicare is like, boom, now i have the plan, boom, no plan. >> we've been talking medicare and then we've been talking cvs, their medicare unit, mispricing medicare advantage in part because you pointed out pickleball, but you have this post-covid period where elderly people didn't go to the doctor and then they did and unfortunately things were more advanced that are not good such as cancers and all sorts of things which become more important to treat. that's up a bit after a decline yesterday. a lot of people saying this potential split of the company doesn't make sense. >> look, i told you. i think they're reviewing it. >> they are. they're reviewing a lot of

things. ka they made up their midnnd. >> i switched to blue cross/blue shield. >> how's it going? >> people take it. i don't feel like i'm being crushed. >> people take that, but you're still taking -- there's no benefit -- would you -- >> look, medicare is a great program. i'm just saying in new york it's very hard to find a doctor that takes medicare, that's all i'm saying. >> who will want it. >> they don't want it. you have to write a check. i never thought about -- you have no idea -- i want to say -- i apologize. this is going to come out wrong. i went and got -- i had to have an ear medicine, cortisone ear medicine. it was typically $5. instead it was $190 and i said i want the formula. i don't believe -- i'm not paying 190. you see why people say they get the prescription and don't fill

it? $190,000 for something that's off pa tent? this country is crazy. a lot of people in the country don't realize what it's like out there. i don't say i don't benefit. i'm a very lucky person. medicare can be shocking when you get to the counter and you have to buy the thing that's not covered by medicare and you say i'm not taking it. >> one thing you talk about price shocks. the other one we were talking about, the port strike. a lot of attention being paid to d dagg get's comments. if it goes past the 12th of october, it would weigh on the reference week in october. >> definitely. and i do think again this is always one of those things where -- i was looking at harry bridges who used to be the longshoreman guy out in california. they have a communist union out west, but during the heyday, i

find this is a union that's not going to -- is this going to have an inflationary impact going right into the election? is it possible it would have an impact, or is it too soon? >> i think it's too soon. your fresh produce is going to go up rather dramatically. that's where it's going to hurt because that's sent by boat. remember, we're going to be out of season, so if you want fresh fruit, it comes from -- >> is there any scenario where the biden administration would order them back to word. they say, even if you do, we're going to slow things down so much, it wouldn't matter. >> if i was running, i would do that today. i know he's a union president. all i know is get ready for really high prices for fresh fruit because that's what this is about. >> right. meantime you've got the machinists on the west coast telling kelly he needs to get more involved. that's 30,000 workers right there. >> this is a period for labor.

these are the two most -- i mean the teamsters have folded -- i should. say. the teamsters are not as present. they're very smart unions that have held major companies hostage, and they're doing it right now. i'm waiting for the administration to say something. this is not ruled out half heartedly. they ruled out what truman did with the trade workers. they're just not going there. >> right. it is interesting how often we've mentioned unions over the last number of years and how prominently they've figured so many things, whether it was the port strike, the actors and workers, the steelworkers who are not on strike but are opposing the acquisition of nippon steel and starbucks and on from there. >> airlines. not to a strike level. >> obviously. >> the union president emboldens everybody. remember he walked the picket

line against ford? no president's ever done that. >> right. and he really -- i bet he regrets not inviting elon muffing to that original ev meeting because he was unionized. >> you're going there, man. >> well, that was really stupid. >> did you say that? >> don't you think? and it made musk his enemy for life. >> don't get me involved. >> you're not involved? >> don't get me -- that's the first remark, i don't want to -- >> you're afraid. >> i'm not afraid of musk. >> you are afraid of muffing. >> no. just because you called me a hologram? just because you think i'm not real? i see you go back and forth. >> just checking. on a much smaller scale but regarding transportation, toyota, jim, investing half a million into joby. >> i'm shocked. even wants me to recommend joby.

i just haven't been able to, but that's a substantial -- that's a nice endorsement. >> you haven't been able to get there. >> it was a spac. >> it was a spac, yeah. there's a chinese spac, i guess. don't you think 10% -- >> japanese spac? >> he said he's buying everything. >> joby. yeah, those aerial -- those little aerial transport -- >> you doubted -- the day came and you said you doubted everyone in 2024 -- >> the morgan stanley piece. >> some of these projections were aggressive. >> i think they came out at the same time as weber grill. >> it was one of the more rmore /* rizable. >> i've got go get capital. >> you say fanciful.

>> how did you know that? >> as we go to break, watch bond. we've seen it creep a little lower in europe. yesterday, the biggest drop in a couple of years. we will get some fedspeak today. adp came i (vo) memory and thinking issues keep piling up? stay with us the more options you may have. learn more at amyloid.com. leo! [whistling]

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take a look at home depot. stocks up about 50 bucks the past month. today gordon haskett goes to a target of $450. they asked mortgage builders, what rate would you be interested in if you delayed buying. there's a sample of responses but they think we'll get activity. >> that's why we bought it. i thought this was the sweet spot. they've had a couple of bad years. no longer. this is their time. it's their time. >> we'll watch that. we'll get stock trading with jim in a minute. in a minute. dow is dow

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let's go to jim and stop trading. >> nike really identified, they kind of shafted dick's and footlocker. mary has a basketball program with them that is terrific. i would not sell footlocker

after reading this. very, very positive. they've been one of the companies that have been left to dry and that's no longer the case. >> overall, jim, you think we're stuck in irons here while we figure out israel's response. >> yeah, i do. and then, of course, the employment number on friday. i do think the bias that you see at the end of the day is rather extraordinary. there's tremendous buys at the end of the day, and it's not just chinese. >> that is true. definitely some recoveries yesterday. >> conagra, we're going to try to explain -- by the way, they've had good volume growth in frozen and in snacks, and it's not reflective because they did have this hebrew national factory problem. at levi's, this is one of the great denim markets, and levi's has not capitalized. and matthew prince has some amazing stuff that can really help, when you're using ai there's a lot of mistakes that are made. he's going to be able to show

you a product that eliminates a lot of mistakes, and he's going to talk about -- i hope to get him on the election. he is someone who can really stop the russians, the chinese from hacking us. the russians, they have a candidate that they want. they don't like the other guy. and it's pretty important. >> our intelligence services have made no secret about that as well. >> who do the russians want? >> i think we all know who they want. >> how many electoral votes do the russians get? >> pennsylvania doesn't. i'm from pennsylvania, but russia is near france, right? >> jim, we'll see you tonight, "mad money," 6:00 p.m. eastern time. when we come back, more on tesla's deliveries for the month. shares under a bit of pressure,

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good wednesday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla live at post 9 of the new york stock exchange. we continue to watch the israel/iran conflict, watching the port strike in day two, tesla deliveries adding news, s&p down about 15. we're 30 minutes into trading. here are three big movers. we'll start with humana shares, plunging after the company said the center for medicare and medicaid services cut the quality rating of its largest medicare advantage plan. we've got more details ahead. look at the stock, down 20%. another name in the red today, nike. the company reporting results but withdrawing guidance and postponing investor day as it gears up for a ceo change in two weeks. much more analysis there on what to do with that stock coming up. then oil, check it out. spiking again today. we're going to break down all the headlines, moving prices, of course our eye on the middle east with wti pushing above $72

per barrel. wanted to start in hong kong, guys, because the index continues to rocket higher on all of the good news lately about the stimulus, both monetary and fiscal, from china's government. look at hong kong. remember, china, shang ryhai is closed. look at the week-to-date performance. the property developers, interestingly enough, which has been the source of pain, coming back. yes, we know positions, there was short-covering and everybody was on one side of the trade. that magnifies the moves, but there's also optimism out there. but not from everyone. did you see the miller quote yesterday? he was speaking at a conference and he said he's actually staying away from china. he said that even if china equities go up a signature amount, he said he has no interest in it unless there's a change of power at the top and a shift in the communist policies.

bas basically, he said as long as xi jinping is in charge. i always look to him on china because he's been an investor in that country for a long time, rail dalio, he said they need to have a beautiful de-leveraging. he said it was a consequential week but it depends whether policymakers in china restructure bad debts, eliminating zombie conditions on their institutions, and lower interest rates below inflation and nominal growth rates, he says, which does feel like they're doing. if that proves impossible, monetize debt to get the rates below the inflation and nominal growth rates, while weakening the currency to devalue the debt. bottom line, he said this could be as big of a week for china as when mario draghi said whatever it takes, put a floor under the euro when everyone was worried about breakup. but he's really focused on the debt and de-leveraging.

>> that's the underlying issue. the question is whether the chinese have done anything to really deal with that, largely in the property sector, whether it is the indebtedness of the municipalities that relied on selling land to developers. the developers themselves. there are so many people under water as well. the amount of total indebtedness that may need to be written off, so to speak, may just be too big. >> and while doing that, not inflict so much pain and sentiment on the owners that it creates worse economic conditions, and also get the right balance between deflation and higher inflation. we talked to the head of the imf yesterday and she advises the chinese on what to do to stimulate their economy and get out of all of this. she's very encouraged by what she's seen so far, but this is what she also wants to see the boost china. >> we also know that without

very decisive measures to stimulate domestic consumption, to reorient their business model, china risks to continue to see growth rates going down, all the way down below 4%. so structural reforms that are reorienting the chinese economy toward domestic consumption are paramount for china in the medium term to continue to be an engine of growth for the world economy. >> everyone is getting really excited about what china is doing, but also saying, okay, but they have to do this to get to the underlying issue. and her point is, like secretary yellen, it's not just fiscal stimulus, but structural changes in the chinese economy to reorient them to a consumer-led economy, where the chinese consumer actually can spend and not save. and there's evidence, at least, that they are focused on their consumer, and it's why you've

seen such big jumps in names like estee lauder or in the casinos in china. we'll see if they follow through and start to do some of these changes. but there's definitely a lot of excitement building in this trade right now. and it could have big implications for the global economy. >> yeah, if you get that chinese consumer going in a real way. you can see the impact it's had. again, we've talked about it this last week in terms of the stock, but the real question is whether it will translate into more spending for what is still going to be an export-led economy, but one they had been hoping, certainly, would find its footing, which has been really hard to get, really ever since they emerged from covid. >> right. and you can track the stock market underperformance back to 2020 when they sort of reopened and there were high hopes for reopening. but we had a lot of stimulus thrown at us and they did not. >> and they didn't reopen for some time even after 2020, it was quite bumpy. >> and the property problems. >> and not to mention the

attacks on the technology sector, in part by the state itself, and a lot of questions in terms of what xi would really allow for or not in terms of business practices. >> that gets to the quote about the unpredictability or what xi's path is. as far as the u.s., though, we got a nice surprise in the form of private sector jobs. adp report, which in the last three months has correlated a little bit. the last three months have been disappointments on adp and same with the government jobs report. today was an upside surprise. private companies added 143,000 jobs in september, and that was a bit of an acceleration from the 103,000 in august, better than what was forecast. and it came from goods and end services sectors. goods got some jobs. and then i'll also highlight that wage growth continued to slow. so pay gains for job stayers, people that stay at their jobs, 4.7%. and that was an ease. then it was more pronounced for job changers.

so people changed jobs to get paid more. wage growth fell from 7.3% to 6.6%, so a little bit less pressure on the wage growth. the chief economist even references, she said, the halmark of this report, stronger hiring didn't require stronger pay growth last month. in fact, typically she says, if you change jobs, you see faster pay growth. but the premium over job stayers actually shrank to under 2%, matching the low we saw last january. so better job hiring without stronger wage growth. we'll see if we get something like that on friday for the government report. >> and then job changer numbers, 66, the lowest since april of '21. as for friday, i think goldman is at 165, jpm at 125. and we know they've been dovish on the fed and economy overall. >> it looks like now what's priced in is a 25 basis point

cut, but it's only a 35% chance. so the market doesn't have a ton of conviction in this, if we do get a substantially weaker jobs report, the market could start pricing in 50 basis points of cuts. the data on jolts yesterday was confusing. better hiring, but a lower quits rate, on manufacturing kind of in line, but the sixth month in a row of contraction. those are dovish numbers for the fed. so powell said today he's not in any hurry to sort of rapidly cut rates. now it feels like a 25 basis point cut. but let's see what happens friday. >> the price was the low of the year. meantime, energy to watch. oil prices are higher, once again, after israel did strike back at hezbollah in lebanon. the real story may be why oil is not even higher, given some of these rising tensions. let's check in with brian sullivan. and this morning's headlines regarding opec and the saudis. >> or maybe why oil is not

actually lower, you know, that "wall street journal" article we'll get to in a second. i have a fax coming in. unbelievable. yes, they still exist. here is the thing. let's talk first about why oil prices are not higher. i think it's pretty obvious, they're up 3% to $72. that's pretty obvious. why aren't they at 80 bucks given all the tensions we are seeing in the middle east? let's talk about it. number one, you've got a couple million spare barrels of capacity that the saudis are sitting on, basically opec could release if we see a description to iran. u.s. oil production, as you've noted many times, is at record high, 13.2 million barrels a day as well. and the most important thing is we have not seen a major reaction from israel. yes, they attacked hezbollah sites in beruit, lebanon, overnight, but we have not seen a big response by israel directly at iran, either at their oil ports or the nuclear facilities. those would be the things, guys, that we all know that wouldsend

oil much, much higher. now, to the little palace intrigue story, carl, that you sort of referenced. big article in the "wall street journal" today, opec just ended their virtual meeting today, no change in output, none was expected. they said russia and iraq are now conforming. here is the story. is opec sort of on the inside fracturing? the "wall street journal" story noted that there was a conference call recently, like last week or whenever it might have been, and that there was some concerns about the saudi price target, which there is no price target, by the way. but will they defend the price or did it devolve into a market share war and send oil down to maybe 50 bucks a barrel? saudi has reached out directly to me and said -- they didn't say the story was wrong, but they said there was no conference call recently. so it appears saudi is pushing back on the "wall street journal" story, but i think your

point, carl, is well taken. this $50 thing getting a lot of attention this morning. i guess i'll go check my fax machine and see what rolled in. >> who has a fax machine? >> i know, that's really kind of bizarre. what is it, 1992 in the sullivan household? >> listen, i'm glad that i could make the hit more interesting, no matter what it was. >> you always make them interesting. come back to us. you know the saudis as well as anyone, brian. so how do you view this in terms of the communication you've gotten, the fact they're questioning the journal story? where do you think the truth really lies here? >> somebody is talking. listen, opec is a big group, opec+ an even bigger group. i think it seems clear that there are likely members inside of opec that are sort of talking to various parts of the media, maybe myself included, who knows, and basically saying here is what we think is going to happen. this is a group, they are aligned in many ways, but they

are also sovereign nations, as you know, looking out for their own sovereign nation best interest. how do we read this? i think we read this as -- and i want to clear up something that has been wrong in certain parts of the media for a couple weeks now. there is no saudi arabian or opec price target. there is no official opec or saudi price target. i want to clear that up. there's been a lot of talk about defending higher prices, but i think this is a clear sign that some in the group maybe are not happy with their quotas, that they are sort of being allowed, i'm using air quotes, to pump out. so says my fax, anyway. >> got it, all right. keep us abreast of all things, including whatever faxes you're getting over there, brian. thank you. brian sullivan, still living in 1992, but he looks good. let's turn to tesla, shares falling after the ev maker missed delivery estimates, down almost 6%. phil, when you reported these,

we thought they were in line. any idea why the market is reacting this way? >> well, there's a couple of things. first of all, $462, $463 was the consensus out there. they came in at $462, 890. they're shy of the estimate. that's not enough to drive the stock down. there is the numbers. 95%, as is usually the case every quarter, model 3 and model y, production coming in at just under 470,000 vehicles for the quarter. this brings up the question, will tesla be able to hit the consensus in terms of what the street is looking for for full year deliveries? remember, last year they delivered just over 8.18 million vehicles. the consensus going into this morning was for 1.78 million. you add up the first three quarters, they still need to come up with about 510,000,

512,000 vehicles delivered in the fourth quarter in order to hit the 1.78. so that may have to come down a little bit, let alone you would have to go up another 30,000, 40,000 vehicles in order to get up in that 1.8 million range. that may be some of the pressure that is out there. as we take a look at shares of tesla, you've got two events coming up next week that will likely be catalysts for the stock as well, whether it moves higher or if we see a bit of a sell-off. robotaxi next week and then financials on the 23rd. and one final note regarding the stock being down about, what, 5%, 6% today, there has been a whisper number out there for third quarter deliveries of 565,000 to 570,000 vehicles. is it possible, after the move this stock has had over the last couple of months, that some people said, ah, they didn't get 565,000 to 570,000, we're going

to sell our shares here? that's a possibility. but those are the reasons why you might be seeing a little bit of pressure on the stock today. >> got it. thank you very much. phil lebeau. here is our roadmap, nike shares falling. i'll have more color as nike's new ceo gets ready to take over. plus, there's a lot of attention being played to how the port strike will impact the u.s. economy. but there's one area that could be a winner. we're going to tell you about it and the stocks that could benefit. we'll talk about the analyst whose note raised fear about iphone demand. "squawk on the street" continues "squawk on the street" continues on this wednesday.5dalonging ri.

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watching shares of nike under pressure, down almost 8%. profit topping expectations, revenue falling short. the company also withdrawing its full-year guidance and postponing investor day, which had been scheduled for november 19th, as it gets ready for a ceo change, which happens in two weeks, guys. not much to be surprised about here. we know that they couldn't really do an investor day because they have a new ceo starting in a few weeks. we knew that they would probably want to clear the decks when it comes to the financial outlook ahead of that new ceo. the current ceo was not on the conference call, i don't think that came as a surprise, either. nor was he quoted in the release. it was the cfo. in fact, the cfo did talk about some progress when it comes to

the turnaround, at least getting newness and innovation, working with consumers again, particularly in running. they have this peg 41 shoe, which apparently is doing very well. however, what investors are focused on, it's hard to see the next catalyst for financials. and when the financial performance might improve, especially when we don't know the ceo's plan. i don't know that much about him. one thing of elliot hill, a lot of people are googling him. he's very well liked within nike and we heard that on the call, and i've heard that from a number of employees, past and present, that it's going to change the morale basically overnight. but how do you then forecast the financial performance, especially, david, when what we learned last night is it's going to be a heavy lift. a lot of the analysts were worried about higher inventories, suggesting they're going to need to discount and promote into the holiday and that's going to cut into some of those better margins, for instance, as nike tries to figure out the right balance of the franchises, the air force 1s

and how much to get out to the market and make sure it's getting to the right places and the right styles. that's really what this is about. >> well, a number of the analysts saying the same thing, the turnaround will be a marathon, not a sprint. nike direct not looking particularly strong, which was one area that donahoe was supposed to be on top of in the sense of being a tech guy. no shortage of challenges, many of which you've been outlining for some time. and it can take some time to turn around. it's not bad to come in as a ceo and have a very low bar. they do seem to be creating that for elliot hill. >> let's get more of the street's take. joining us is williams trading analyst, sam poser, who has a buy rating on nike, $95 price target. i always give you credit because you identified the problem with management and with some of the culture and leadership around innovation, i think earlier, and

were willing to go there when other analysts weren't. how do you feeling after the quarter? >> as you said, i don't think anybody should have been surprised, and i also think that if you consider, you know, what nike was two weeks ago, under the outgoing leadership, anything they would have said yesterday and the outlook was going to go down. it was going to go down, anyway. so, again, no surprise. but what has changed is new leadership, and a big increase in morale. and as an ex-nike person said to me, who still likes nike a lot, said it used to be, when you would go to work at nike, it was a mission, you were on a mission, and it became a job. well, now it appears to be back to a mission again, and i think a lot of people keep looking at what's going to happen in china, what's going to happen with its inventory, of which none of it

would gotten better under the old leadership. >> it's about brand heat and putting out products that have good re-sells, that people are talking about. >> you have to have motivated people to actually even get there. so it really has to start all the way at the bottom. and that's the point. so now we have that opportunity, we can see that will happen. i believe, given that they focus on much on the air force 1 dunks and jordan 1s, that there was probably a lot of product they could commercialize that was left in sample rooms. i wouldn't be surprised if, you know, new eyes go on things and look and go, that's a good shoe, we can pull that out and make that something. it's just they were so reliant on those three franchises, they overcooked them. >> and elliot hill, he came up the organization through sales, which is very different than donahoe. so the optimist would say he knows how to identify a hit. and i also wanted to mention

china, because i know there's a lot of pessimism around the china numbers, and they were down 4% on the quarter. but if china is really serious about stimulus, as we're hearing and seeing in the chinese market, isn't that a big tailwind for nike? >> it could be. they still have to come out with great product and do all those other things. but it's certainly not as much of a headwind as it would be otherwise. >> given you've been very realistic about the challenges of the company and were so in previous interviews we did, why do you have a buy on it right now? >> i don't think there's a middle ground on this one. i either think you're going to like it for the long term or you're not. another analyst said, you know, this is nike and they're this. well, this was nike five years ago, six years ago, and then it became a company. and now it has the chance to become nike again. but if you can see that light, it's a buy. i'm not pounding the table on it, going, this is a top, top pick. but i think you've got to look

out, as i wrote, 15 to 18 months, and we'll see it. and it could be 12 if i'm right about the merch styles in that sample room that come out. and that's stuff that retailers will start to see in five to seven months, you'll start to get feedback and you'll see some movement. and i believe that elliot hill will also put forth a realistic and credible plan that, arguably, wasn't going to happen at an analyst day and hasn't happened on the day two earnings calls before yesterday. >> do you know him? >> i've met him years ago. i don't know him. >> because i think the question now is when, how long it will take, right? >> right. and that's why i'm saying, i think it's in that 15 to 18, and 12 if there's more there. >> okay. sam, thanks for joining us.

appreciate it. with the stock down 7%. later today, don't miss a major interview with the ceo of nvidia, jensen huang, and jue li sweet, they're announcing a new partnership. partnership. that's comin with gold and copper prices pushing towards all time highs, us gold corp. eastern time u.s. gold corp has a reserve of almost 1.5 million ounces of gold equivalents. permits to mine zero debt with only 10.73 million shares outstanding and a portfolio of world class american strategic metals assets. u.s. gold corp, join the golden age.

we continue to monitor the port strike, of course, day two. we're looking at one sector that could see a brief bump, at least from the fallout of the strike. diana? >> we're talking warehouse, and i would emphasize this is a short-term play. it all changes if the strike goes long term. for now, warehouse will see more demand and pricing power as tenants need workarounds for goods in containers, this according to a new report from piper sandler. what are the names to watch? let's start with lineage logistics, it benefits from increased demand to manage food inventory in the case of port disruptions. you may recall them seeing more demand during the first years of the pandemic, especially when vaccines required sold storage. now we're talking food. then terreno will have strong

demand for truck parking. they raised prices during covid for container storage on their properties and pulled them back a bit. they could go back up a again now. i spoke with prologis and they are providing parking areas to temporarily story inventory. they said customers are evaluating different options and will adjust depending on how to situation evolves. again, this is all if the strike is short term. if there's a port shutdown long enough from the economy suffers, then really everyone loses because no new goods come into warehouses and it all just kind of grinds to a halt, carl. >> that's the scenario the market is trying to gain out. thank you, watching the port strike. shares of humana extending losses for the year, now down around 50% for '24. we're going to tell you why the stock is plunging in today's trade again when we're back in

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welcome back. i'm pippa stevens with your cnbc news update. israel says they banned antonio gutierrez from coming into the country after his response to the missile attack. the foreign minister said gutierrez did not forcefully condemn the assault and, quote, does not deserve to step foot on israeli soil. meanwhile, an israeli soil says retaliation for yesterday's strikes will be swift, however the timing could be complicated by the jewish new year, which begins this evening. ukraine says russian troops captured a strategic stronghold today in eastern ukraine and ordered its troops to withdraw.

the hilltop coal mining town has resists the intense attacks since russia's 2022 invasion. back to you. >> pippa, thank you. biggest loser on the s&p 500 right now is humana, plunging double digits. bertha coombs here with more on why that stock is sinking. what is the story? >> for medicare advantage insurers, the fate of government reimbursement rates is literally tied to their stars, that's the quality ratings issued by the government on their plans. in a filing this morning, humana said the star rating for one of its biggest medicare advantage plans fell a full point, from 4.5 to 3.5, based on, quote, narrowly missing higher industry cut points and a small number of measures, according to the company. that cut below a four star rating means that humana is going to miss out on a 5% bonus payment for higher quality. the centers for medicare and medicaid or cms, looks at a

number of things, whether a plan is able to keep patients from having to go to the er, to be readmitted to the hospital after an initial stay to develop those ratings. humana says it's in talks with cms to try to appeal the designation. but if the rating stands, they could go to court, which a number of insurances did last year, and they ultimately won and did get back some of those bonus points when the court decided that cms did not calculate properly. in the near term, as medicare enrollees are starting to shop for plans, lower star ratings could drive customers to other carriers, one more headwind for humana from a competitive market. united health and cvs are higher this morning. all of these insurers are grappling with maintaining margins at a time when seniors are racking up more and more medical costs. >> which is another part of the story as well, bertha. the stock not down quite as much as it had been. you know, as i understand it as

well, there might have been a time if they had a higher percentage and still were getting four stars, they could move people from one plan to not. but when you're only get 25% of your plans with four stars, that becomes a lot more difficult as well. >> exactly. that was the problem with cvs, the 2024 plans, the big one was like 75% of its enrollees, was the one that got hit on the star rating. so it didn't impact this year's, it means the bonus payment, which comes in the fall for them, it will come in 2025, that's where the impact is. and that's part of the headwind that cvs has been really trying to deal with. they've been trying to beef up their star ratings, but also grappling with margin issues, and their plans have been one of the issues that has really weighed on the stock. >> fascinating, and a great explainer to a tough story to comprehend. thank you. bertha coombs watching the story

out of humana. our next guest does prefer growth and cyclical names to manage choppiness going into year end. citi's u.s. equity strategist, s&p target of 5600. scott, great to have you back. since we last talked, we got china stimulus, a couple of strikes in the middle east. does any of that change your overall playbook? >> the middle east is an ongoing wild card. geopolitics is something we keep an eye on. trying to translate it into fundamentals has been trickier, going back to russia, ukraine, and now the ongoing israeli situation. so we're keeping an eye on that. what we did do tactically was go overweight energy going into q4, so this was over the weekend. we think the setup allows for some potential beneficiary of that continuing to flare up. but i would say it's a contrarian call right now. >> does that move in on your monetary policy forecast? >> well, essentially the way this goes in terms of the

monetary policy setup is that we still think we're in this less restrictive mode, we're not to the point yet where we can say, hey, the fed is at this point, being accommodative. so what we're looking to do is balance here in terms of growth, to be defensive as a play into the end of the year. we wanted to marry it with cyclicles and we've gone overweight financials. so essentially what we're doing here is avoiding the more defensive parts of the market, which in our view are generally historically expensive. health care, a little bit of an outlier. we've been underweight for the better part of the year. we don't see any urgency to go back to those sectors. we prefer to either go down the growth path or begin to kind of set up for the other side of this hawkish fed narrative. >> so the fed has to stick the soft landing for that to work? >> i think the bet is that the fed trajectory from here continues lower, the market is telling you we're prepared for

as much as 200 basis points. >> the market has been wrong on that before. >> the market has been wrong on that. but i do think that the setup here, in our view, is one where fundamentally, we think we're still looking at a pretty good q3 reporting earnings season. we did go underweight industrials and the spin is clear, relative performance has been pretty good, valuations have gotten pretty expensive. we think there's going to be fraying around the edges from the fundamental perspective as we go through q3 reporting. >> is it a bigger risk that the fed doesn't cut as much or that the economy performs worse than expected? >> okay, so from our perspective, the bigger risk is that the fed needs to stay ahead of the narrative here, and we don't want to fall too far behind. if you do begin to see some further deterioration in the labor circumstance, which is essentially a house economics call, we will see a downward

spiral or deceleration in labor. i don't think that necessarily means -- >> that just means they're going to be cutting more. isn't it a bigger risk that we have reflation because commodity prices are rising again on geopolitics? >> i argue that is more of a '25 risk but a little bit different. we're talking about the election in nearly every conversation, and our view is that both candidates are mostly fundamentally negative for u.s. equities. but we have that lingering deficit discussion around spending in the background. so when i look at the rate environment, i think the fed is on a path where they can continue to ease, andi think that's net-net constructive versus the past two-year narrative. but as you getfurther into 2025 and we continue to go down this debate around how to finance the deficit, then you begin to risk things like the bond market, the vigilantes coming back, where

it's less tied to the traditional economic circumstances. >> what's your number for friday? >> well, i don't have a number specifically on that. but what i would say is that i think we're prepared, in position that it's going to be sup supportive of the current fed trajectory. you potentially get 50 in november, i'm happy with 25 or 50. i want to see the trajectory continue. >> thank you, as always. still to come, how worried should apple investors be over the weaker iphone reports. we're going to talk to an analyst and why he holds one of the lowest targets on the street 'lr pl wel be right back. the dow is up 14 and the s&p 500 climbing back toward the flat

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the cycle continues as we close out the books on the last earnings season. we're going to kick off a whole new calendar starting just next week. one options trader is already

layingut satie otregs for the early part of that earnings season. tune into our market navigator segment later today. power lunch, 2:00 p.m. eastern time.)

some concerns growing around apple shares this week. a number of analysts, including our next guest, warning of softening demand for the iphone 16. he believes apple has cut about 3 million units for the december quarter, the earliest build cut in recent history. tim long joins us now, has an underweight rating. price target $186. the part of your report yesterday that seemed to concern people, you cited supply chain channel checks and 3 million units being cut at a semiconductor component in iphones. how confident are you that that is true, a, and, b, that it will have the impact you think it means on demand? >> sure. thanks for having me. yeah, look, we do think, we're

pretty confident that there have been some adjustments to the build plan. if you remember correctly, a few weeks after their june event, there was a lot of speculation that apple was telling the supply chain to build more iphones for this upcoming cycle, given all of the data that we've seen and others have talked about with preorders being weak, it's likely that upside that they were hoping for in these devices is not there currently. we're still only a few weeks into the cycle, so certainly things can change. but we do think this upside case that was built in has probably gone away, for now, and we'll just have to track to see how sell through or true demand is tracking over the next month or two. most indications are we're tracking about 10% down, if not even a little bit more, compared

to the iphone 15 cycle. so it is off to a little bit of a weak start here. >> yeah, i mean, you say in the report yesterday, yourself, 15% declines year-over-year for iphone 16 in the first week of sales. doing some reporting here, so to speak. does this mean this thing is going to be -- i don't know, would you term it a weaker expectation overall for the entry of the new iphone than we've seen in some time? >> yeah, it certainly feels that way, particularly because the iphone 14 and iphone 15 cycles were basically flat. so we're coming into this with an iphone-installed base that's very old. on average, people are holding phones that are five, five and a half years old. so the setup was pretty good into the cycle. the apple intelligence features are not out yet, so there is a possibility that when we start

to see apple intelligence on these phones, at some point in october or maybe november when the betas are completed, there might be more demand. there could certainly be a lot more promotion and co-marketing, maybe with some of the u.s. carriers, maybe some more discounting. so it's a little bit different cycle this time around, because we do have a meaningful software feature, for the last decade or so, most of the features that have been added each year are some kind of a hardware-based feature and those haven't really resulted in much change. we're shipping this year the same number of iphone units we shipped about ten years ago on the 6 and 6+. so apple has not really had that killer product in almost a decade. will apple intelligence and these ai features change that dynamic? it still remains to be seen. i think consumersreally need to get the services in their hand

to try them out and see if it's something that's worthy of considering an upgrade for their current device. >> how much of the stock move and the conviction on the stock story has to do with just the sales of this product, the 16, and apple intelligence versus some of the other bigger picture reasons to own the stock services and everything else they've got going on? >> sure, there's a lot of dynamics within apple, of course. i'm a tech hardware analyst and i've covered this space for 25 plus years. this stock has morphed into being looked at in a lot of different ways, but for us, yeah, this iphone is important because there is some ai premium built in, like happens with a lot of technology stocks. so if they can't prove that ai will drive the cycle that will be meaningful, there's still a lot of regulatory risk, that is something investors are watching. we should get the initial ruling

on the google doj case, which impacts a large part of apple's earnings through the tech payment they get. that's a meaningful driver as well. so there are several vectors here. we think this iphone is very well. so, there are several vectors here. we think this iphone is very important coming off two weak cycles with what is -- some were expecting to be a super cycle. we don't really expect super cycles, that's pretty rare in smartphone land. that's why i think it's extra important. there is still a lot of regulatory, china exposure. there's other things that are getting a lot of attention, as well. >> right, right. finally, if you're right and this thing is down 15%, let's call it, year over year, where's the stock go? >> well, we're using a 25-multiple on the stock. it's currently trading at 30 times.

so, you know, we're in the mid-180s for our price target. you know, there's a lot of different constituents owning this stock that are looking at different things, and the base of these numbers doesn't move around a ton, so i wouldn't expect units to ultimately be down 15%. but the sentiment could change certainly. >> tim, appreciate it. thk u.anyo >> thank you. >> after the break, eli lilly unveiling its new multi-billion dollar factory here in the united states. what's at stake for that company, when we come right company, when we come right back your record label is taking off. but so is your find talented candidates,ings so you can connect with them fast. visit indeed.com/hire

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for the company, of course. they have a lot more in development. we sat down with ceo dave ricks yesterday about what's next, here's what he had to say. >> currently, lilly has 11 pipeline projects in obesity. all with sort of different modes of action or different modes of delivery. oral is a big need, of course. multi-modal, so it's different than other glp-1s. we have dual acting and triple-acting drugs with multiple mechanisms to have more potent effects. >> now, a big piece of this investment in going forward for lilly is figure out how to make these medicines. they're really complex, and that's why the company today is saying that it will spend $4.5 billion to open gnaw center about 40 miles northwest of here, that will focus on r&d manufacturing. that new facility will do some of what's happening here at a bigger scale, particularly to supply the clinical trials.

back you guys. >> because, angelica, there's still a big supply demand mismatch on these medications, isn't there? >> there's still a supply mismatch. we'll see that going forward. about what's happening here, the scientists knew that creating peptides the traditional way, which takes too long, they went ahead and developed a faster way that was more efficient to do it. that's why the company said, this is something that we want to do with other medicines, and that's what you're seeing with this investment today. >> and you don't know what that is next, exactly what it is, angelica? >> reporter: we tried to ask a few times. we asked about specific drugs and they wouldn't tell us. but they have 11 different obesity drugs in the pipeline. i assume it's one of those. it's hard to say. there will be much more to see from lilly going forward, both in the pipeline and also in the data that we're going to see over the next two years. be sure to look for that.

and we'll have more from or interview from david ricks later today. >> angelica, thank you. lilly shares for their part up about 0.75%. not quite an all-time high, but an $850 biiolln market value. speaking of the market overall, we're basically flat on the s&p and the nasdaq. of course, geopolitical concerns continue to color some of the trading. we have a lot more market coverage for you, straight ahead.when you're looking for aheanswers, 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 especially4■ true when you're looking for a medicare supplement insurance plan. that's why we're offering "seven

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good wednesday morning. welcome to "money movers." i'm carl quintanilla with sara eisen live at post nine of the new york stock exchange. today, william cohen on the conflict in the middle east and the geopolitical impact for the markets. >> plus, what we learned from a crucial quarter for nike. earnings reaction and what the company plans to do for a turnaround. later on, one this year's most highly anticipated and oversubscribes market debuts. the ceo of standard arrow is here on that ipo. as for stocks, we're flirting with unchanged on the s&p 500. energy is powering the market higher, because oil prices are rising again