>> thank you >> thank you for coming in and great conversation. >> we can check the markets quickly. >> oh, thank you >> make sure you join us tomorrow boeing ceo is going to be on "squawk on the street" and that's coming up in a couple of minutes. we will see you tomorrow thank you. good wednesday morning welcome to "squawk on the street." big morning for giant corporate other thannings. at&t, coke, and we'll talk to the ceo of boeing in a minute. the road map begins with the heart of earnings season boeing ceo will join us, exclusively in a few minutes. mcdonald shares are tumbling this morning at least ahead of the open a deadly e. coli breakout

linkened to its quarter pounder sickens dozens in ten states. starbucks seeing a, quote, pronounced traffic decline sales are falling. what it means for brian nichols' turn-around plan we'll discuss. let's begin with the big news on the food front that begins with mcdonald's. the cdc says that e. coli outbreak linked to the company's quarter pounder hamburgers resulted in the death of one person, sickened 49 in the u.s the outbreak was reported in ten states and ten people have been sent to the hospital this is what the president of mcdonald's usa had to say this morning on the "today" show. >> we took swift action yesterday to remove the quarter pounder from our menu. this was swift and decisive action by us it is the quarter pounder, two ingredients on that quarter pounder under investigation by the cdc. so, i want to say to our consumers that you can confidently go to mcdonald's

today. >> as we know, jim, stock has been a monster over the last year this is a dynamic having covered the e. coli outbreak at chipotle. >> that took 18 months before people came back, jack in the box, very similar, same thing with taco bell it's an 18-month-period. this is one death, isolated. not since october 11th have we seen anything, so i believe the issue i find that is most unnerving, dave, you tell me, they think it might be the onions it's not the hamburger they think it's these states, not those states it's very difficult to get your head around if you're mcdonald's because you're dealing with the cdc, which is not exactly in control of the news flow so, i understand why baird would downgrade it i totally understand why you might just say, look, this thing, as carl said, is a monster. maybe take profits that's been the form of this -- of this earnings season of ours, take profits.

now you have another reason to take it. someone died but baird and guggenheim downgraded it because there's too much unknown. >> reading evercore isi, david palmer, well-known analyst, we have him on. mcdonald's may get more benefit of the doubt given an incredibly strong track record on food safety but their brand name, he goes on to say, it could cause an outsized sales impact in the near term. they have supply chain tracing that he thinks will limit additional outbreaks. >> the analog is the 1992-1993 jack in the box e. coli outbreak, carl 73 jack in the boxes, 42 people died, and amazingly, 18 months later the comp store sales numbers turned up. i remember dealing directly with chip

chipotle, they had first issue out west and novovirus at boston college. it was a bang-bang, negative, negative they still came back 18 months later. is this moving as though -- i think the answer is no, but if you want to buy it today, remember, you have to have the earnings and the earnings they'll talk about again, maybe wait until the earnings. >> you don't think it's a matter of waiting 18 months this time. >> this one is just -- when someone died, we always have to weigh it but, no, i don't think it's an 18-month i think they have their arms around it very quickly single source onion. there's no question of exactly what the outbreak is, what is what you had in the chipotle will people suddenly go to burger king? that's not been the pattern. i think they have their arms around it. no, i'm not concerned it's going to go 18 months. it's not as bad. >> some discussion about the suppliers. really for public companies, it may be limited to tyson, yeah? >> yeah. or onions. the problem with onions, no one

has ever seen -- we've never seen a cause and effect e. coli onion, but i think it's going to be that. the difficulty here is it's not like the cdc issued a statement. i mean, for instance, when i dealt with mcdonald's, the last one was october 11th we're at october 23rd. that's not reassuring. there's been no outbreak since then i think people are going to be confused and say, well, look, i mean, you've known this for x number of days and didn't do anything this is a cdc reporting from states it's not -- we don't really have a national process for if there's an illness i think that is part of the confusion. >> yeah. well, stock's going to be down, as you say we'll be monitoring starbucks. we'll talk about that later. completely different set of issues >> it's a parabolic move for mcdonald's >> understood. you can see the stock price chart there over the last few months >> yeah, up 40% on the year. >> ever since the $5 they understood quickly and realized if you don't go down to

$5, you won't be able to pull this off with with a softening consumer something wingstop understood. >> analysts say on the cusp of raising on a stronger dollar, the value menu, but some will wait on that boeing posting a $6 billion loss in q3, awaiting a vote on the wage deal that could end the weekslong strike phil lebeau is in arlington, virginia, with kelly ortberg first national tv interview since taking the job >> carl, how are you today kelly, thank you for joining us today. carl set this up by talking about the huge loss for the third quarter. you have a slew of problems to tackle and i think a lot of people look at boeing right now and they say, how long will it be until investors can say, there's no more string of bad headlines that are going to come out something that will make people say, here we go again with boeing >> i've said, there's no silver bullet

this isn't going to be fixed in well fell swoop. we have a lot of issues here that we're dealing with. the first thing we have to do is stabilize the business obviously, getting through the strike is the first big step in doing that but then we've also got to shore up our balance sheet, so that we have a solid balance sheet to manage the realities of our business going forward i think from a longer term perspective, getting focused on executing on these development programs is critical for our company. and then underlying all that is culture change we're off doing that we're re-evaluating the values in the company and we really need to embark on a culture change that is something more than just a poster on the wall it's really going to guide how the company behaves day in, day out. >> you're sitting on about $10 billion in liquidity right now at the end of the third quarter. you have this machinist vote happening today. how critical is it to your bottom line that you get a deal locked in if not today but very

quickly with the machinists, or else it forces you guys into some tougher choices >> i think we have a good liquidity plan, irrespective of the near-term outlook. i feel confident in that the vote is important. it's more in important in terms of our long term, get back to building airplanes, delivering good airplanes we've worked really hard to find that overlap where we've got a deal that the employees can feel good about and the company can be successful going forward. so, i'm very hopeful for the vote we'll hear later on tonight. >> you've spent some time on the floor. you've talked with some of the machinists can you understand some of the venom they have expressed towards boeing for the way relations have gone over the last 20, 30, 40 years? >> yeah, there's a lot of history there. you know, i wasn't a part of a lot of that history. but there's clearly a lot of emotion associated with this my focus is get everybody looking forward, get them back to work, improve that relationship i met with the union leadership

my first week on the job and i said, we've got to improve the relationship and i'm committed to do that nothing's changed in that regard so, when they're back on the floor, i'll be back on the floor, helping to improve that relationship. >> you guys are in the process of cutting 10% of your workforce. roughly 17,000 jobs. that will happen over the next couple of months if this strike lingers on, will there have to be even further job cuts >> i think you should separate the job cuts from the work stoppage right now the realities of our business is we're overstaffed for the forecast of our business going forward. so, we need to right size and be efficient. i think we need to continue to do that as we go forward obviously, the later that the strike ends, the more impact in terms of how fast we're able to recover. >> you have the potential filing for $10 to $15 billion in capital raise. you haven't made the decision on when you're going to do that

is the ending of the strike, is that one key thing once you get that in place, you have the certainty to say, let's go forward what i'm asking for the investors, when should they expect you guys to make that decision >> i don't think it pivots on the timing of the strike i think we have a good plan to raise and so we'll execute to that plan. you've seen we started to do some things to get prepared for that. >> jim, i know you have a question kelly, jim has a question. >> yes, thank you, both kelly and phil when i speak to people who went in on this deal, kelly, is they're talking about what the backlog is and what the backlog is in relation to orders lost. apparently, both are pretty good for you. can you give us some numbers >> so we've got across our commercial and defense business roughly half a trillion in backlog. what i've done coming into the new role is met with many, many of our customers

100% of our customers are supportive of boeing they need us they want us to succeed. they're going to help us succeed. this is not a story about losing a market support for our products demand is tremendous this is a story about us getting our act together and being able to deliver the aircraft to the demand they need >>. >> december 7 of 2017 he talked about elon musk in terms of the space program and said he was committed to have a much better space program than anything that musk would do. can you suffer through that distraction when your company is on the line, sir >> well, look, jim, it is what it is. we have to manage through the programs we have i would say across our defense business we have some pretty tough contracts. that's been well publicized. we've just got to manage our way through those. i will tell you what i'm focused on is makes sure we're doing the things on those programs that

are under our control and we're executing the business strong systems engineering to make sure these are a success. >> mr. ortberg, it's david faber. a couple of quick follow-ups to the questions phil gave before he resumes on the restoring of the balance sheet, you sort of answered in terms of what you may do potentially. can you give us any more clarity in the investor base is it going to be your expectation of a $10 billion equity raise, perhaps $5 billion in a mandatory convertible preferred? will it be sooner rather than later in the sense of in the near term? >> i don't want to go into the details of that. i will just say i feel quite comfortable with our plan and we're executing that plan. that plan will give us the liquidity we need for the short midterm for our business and, of course, the long term it's about

getting our production rates and our 737 max production rates increased. and life gets a lot easier from a cash flow perspective. >> yeah, i'm sure phil's got some follow-ups on production. but if i could just come to you on culture, because in your first answer i think you discussed, you said culture is not a poster on the wall what do you do to restore culture? what does that undertaking look like from your perspective >> it starts with the values and the top of the company we have to make sure -- everybody not what we value and values what we are, and everything we do follows along with those values. so, we're putting in place a re-evaluation of the values across the company it also means getting people a lot closer to the business we need to be in the engineering labs we need to be in the factory talking to our people, understanding the challenges that they're facing. i know what good culture is. my previous company we had a good culture

and i think this company has had a good culture we just need to recover that, get back to what everybody wants boeing to be, this iconic company building great aircraft and defense systems. and everything i see, we can do that we just got to focus on getting back to our roots. >> kelly, let me ask you about space and defense. you lost another $2 billion last quarter in that division and there's more than a few people, and maybe you've heard these whispers too, more than a few people saying maybe it's time for them to sell these units within defense or space that are routinely causing charges or causing you to lose money. are you consider ing spinning of any parts of defense or space? >> we're going through a portfolio process and looking at the overall portfolio, what on do we want to look at in five years? that may include streamlining certain things i haven't come to that conclusion

i think our core commercial aircraft and core defense products will stay with the boeing company, but there's probably things we can stream line and be more efficient i would rather error on the side of doing less and better than doing more and not doing it well i think there's some cases where we can do less and do better. >> i heard you talk about commercial and defense you didn't mention space you have two astronauts up at the space station, starliner couldn't bring them back they'll catch a ride with spacex what do you do when you see -- let me ask you, first of all, when you see the two astronauts up there, what's your gut reaction to the fact that you give them a ride up there but you couldn't bring them back. >> my gut reaction is we have to improve our systems engineering and design capability so that never happens again. that's what we're off doing. having said that, i was just down at the space center, kennedy space center two days ago with our team. what we're going to do is look at the problems that were identified there with the thrusters and the helium leaks

and make the redesign changes that we need to make so that that platform is solid going forward. >> let me ask you about the 737 max. your production is capped at 38 a month. you're nowhere close to that you plan to get there eventually and i think the question many investors have is, how quickly will you be able to grow production once the faa says, okay, you've got the processes in place you've corrected some of the problems that were there >> well, first thing's first, we have to get through the strike and then we have to bring people back online. we've got to do that right, phil i think the important thing is not how fast we do it, it's that we do that right we've got training, recertification work to do we were approaching the 38 a month rate prior to the strike so, you know, how long it takes us to train folks and get them back on the floor and be efficient, we'll do that right and then we'll go from there we do a solid quality and safety management plan that we've laid flat with the faa.

that will inform what we'll do in terms of increase production rates. we'll hopeful we'll see rate increases over the next year. >> the 777 x, you pushed off entry is to 2026 as opposed to next year. people know about the problems during flight test and correcting those what do you hear from airline ceos have you had airline ceos call you and say, come on, man, we need this sooner. >> i've heard that from every airline ceo from every one of our platforms. they would love to have our aircraft sooner. with regard to the 777x, i don't anticipate any loss of demand for that aircraft. the aircraft is a beautiful aircraft people still want the airplane obviously, they want it as soon as possible. the strike has impacted our test program. so, we've rolled that into our new forecast and delayed deliveries a bit i think what's important is that we stay focused on this development promise.

get through the test flight and certification and the production ramp-up of the 777x and we'll see good demand. >> one question. now that you've been here two months, are you surprised at some of the issues that you've come across, or is the issue -- or are the problems facing boeing greater than you expected when you were named ceo? >> not really. you know, i spent the last two decades working very closely with boeing, so i came into this wide-eyed. so, i'd say, no, i don't think -- sure, i'd like to have the strike not have happened, but in general, i think i know what we need to do here. we've got a plan we're off executing that plan. and it doesn't surprise me it's going to take a little while so people need to be patient, but we know what we've got to do. >> kelly, thank you very much. good to be here at the boeing headquarters in d.c. guys, we will send it back to you. >> phil, appreciate that phil lebeau with kelly ortberg jim, thoughts? >> yeah, i think that kelly has

to watch what he says. they want to do the equity raise, as david says i do like the fact that to me twice they were asked questions about space. sounds like extraneous it's costing them a fortune. they moved headquarters from seattle to chicago, washington every one of those was wrong he has to go back to seattle this is ridiculous he moved to seattle. the problem is with the machinists the problem is with the culture. what is he doing in washington i think he has to -- he has to undo everything that was done in the last decade. everything. >> even his emphasis on next generation aircraft? >> he has half a trillion orders we'll be talking about data centers today. you'll see all the data center stocks down. one thing that's happened is we have tremendous demand insane demand. it's profit-taking right now, whether it be data center, nvidia, boeing, mcdonald's, insane demand. >> i still feel like there's

lots of questions from boeing. >> i agree with you. >> phil always does a great interview. >> it was fabulous. >> i don't think he got a lot of specifics there. >> i don't think kelly is in shape to do that. >> may not be. even to the point -- listen, there are a lot of people -- by the way, i don't know what happens if they don't get the vote from the machinists. >> then we'll be talking about that for a long time >> it's like the - >> we most likely will you seem to believe they will. >> it does sound good with the iam. as phil emphasized, culture, culture, culture i know kelly is involved with culture. the culture there is broken. >> but it's not -- that's not something you restore overnight. >> no. as we know of starbucks -- >> all of these things >> or nike these turn-arounds take time if you even can succeed at all >> speaking of starbucks, we'll get to the suspension of guidance and their view of q4. we'll get to some other names. a lot of names in the chips, whether that's qlcuaomm, futures

remain in the red on this wednesday. don't go away.

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we are revisiting our stores to make sure we're offering the amenities you expect in a community coffee house even if customers don't want to stay in the cafe each time they visit, we know they expect our stores to look and feel like the community coffee house they remember we will simplify our overly complex menu, fix or pricing architecture and make sure every customer of time they visit. our near-term focus is the u.s it's our biggest business and we need to return it to growth. we also have significant opportunities around the world our team is focused on how we return china starbucks to growth and get all international businesses performing again. >> starbucks chief brian niccol

in an online video announcement last night in his words, we need to fundamentally change our strategy. >> i thought the video was compelling and powerful. what it said, basically, is we got to fix everything. and the takeaway of the analysts this morning is things are far worse than people realize. i don't know a soul who felt they weren't horrible and that they got worse when mons was fired. i find it surprising that anyone thinks this is surprising. instead, i think the takeaway is this is a man who understands -- he understands simplicity, baristas, how to get this thing turned around. if you tell the stock today, you're only selling it because you're reacting to the analysts who are looking backward and not forward. >> but you need to believe in mr. niccol

you have to believe, given his track record, as many do believe, that he's going to be successful in still what's going to be a multiyear recovery i use that phrase again, david, palmer from evercore isi, multiyear recovery that could take a while. >> so, let's think about whether we should have been buying it when he came into a broken culture with chipotle. broken in through-put, broken with health concerns terrible that was at 6 at march of 2018 wow, that's a dangerous level to buy chipotle or look back and say, what was i thinking >> that's where i am. >> you're all in with niccol. >> i'm all in with niccol. he's an operator, not a promoter he's not a mckenzie blue sky guy. >> you don't think things like concept or growth profile are different from the time niccol

joined chipotle to now >> starbucks is a bigger challenge but niccol is much better than when he took over in 2018 this is a person who understands -- i want to emphasize the community, the community coffeehouse. when you speak with niccol, niccol is making it about so there's a 23-second, 23-second bowl/burrito if you were at the boston -- boston chipotle. that's what he highlighted on the last call. think about the minutia, think about what happens when you get into a starbucks i don't go because my triple venti cappuccino was skim. i have to have "the times," the journal, a stack of research this big for the wait. that's over. >> the restaurant between cake, red lobster, mcdonald's, denny's closing a ton of stores today and starbucks, so many challenging stories. on the other hand, you got cavas

crushing it. >> sweet green is automated. >> and they're crushing it. >> you go to the modern kitchen there, oh, my god, it's unbelievable >> the key thing because it's 927. are they going to close the denny's that jensen huang worked at >> that was my first thought, too. >> i don't know, jim i'm glad you mentioned his name. i think you may have earlier but the kids in the frat houses can now start drinking. >> good for them i don't encourage under age drinking i want to go on -- >> they have a game and they drink every time you mention it. >> good for them i like bud light when you look at nvidia, last night there was a denmark -- the first -- we had the first sovereign a.i. in denmark. i think it's linked with novo nordisk.

going to india, big cnbc india anniversary, there's a three-day conference and the stock's down. what is that about eenui. >> we're going to get cut off here this increasing battle between qualcomm and arm - >> can we say that i got a dossier on that. >> let's set it up and we'll get the opening bell and come back to it. basically, arm has given qualcomm a 60-day notice of cancellation of what is their architecture license agreement and if they were to stop getting the ability to actually use that license, a lot of what qualcomm produces would no longer be able to be sold, conceivably. >> full stop. >> they've already been in litigation they continue to be about a separate issue let's get the open out of the way and come back. >> this is probably the biggest battle we're going to face

this is zero sum now >> let's get the opening bell on the cnbc realtime exchange the big board, the new york liberty celebrating their first wnba championship. big parade today, jim, coming down broadway. >> i like something good we agree there's great polarization we love these people >> champion new york >> you're not against them, are you? >> believe me, joe, very happy play at the barclays center here in brooklyn. >> the nasdaq, upstream biofocused on streeting inflammatory diseases celebrating a recent ipo jim, it's kind of -- you've been mentioning this earlier in the morning, wake up, future's weak, soft open, yields higher. >> this is all about the tremendous move, 4.2 goes to

4.5. we all act as if the ten-year has never been -- thank you. we never act that the ten-year has been at 4.5. anybody that made money in the 1990s is saying, what the heck give me 4.2. how about mortgage rates up 1.8. is that going to shut down pultehome? that's what people are saying. the negativity is how great the market has been. >> yeah, it does feel as though there was a heightened bullishness at the beginning of this week. >> now, david, i want to get to this point instantly david, jamie dimon comes out hard for no one and yet somehow "the times" says he's endorsed - >> why are we talking politics >> no, i'm saying right now the press is very anti everything. we're dealing with one of the great tapes in history we had two down days in the s&p for the first time in six weeks. you read the press, it's cataclysmic what's happening. >> we haven't had an all-time

high since last week. >> that's what i'm worried about, we may stall out on the all-time highs there's an absurdity to this these markets. larry kulpa is being conservative this morning we have some amazing numbers from ge vernova. >> let's take a look at vernova. wind doesn't do particularly well but power and electricity certainly do. >> orders surge. >> sorry, say again? >> orders surge is rather remarkable with the stock down anyway. >> this obviously was a spin from gr aerospace. when you put the value that's been created from gev, take a look at what that stock has done, and ge aerospace or aviation, you're getting back to a stock price that is not bad in terms of the long-term old ge stock which hit lows of, what, i mean, in '08 - >> i'm sorry, '09, march of '09,

we're like 3 bucks, 4 bucks. >> i can tell you are my stock issues got profitable last week. >> you still have actual -- i got -- we got options that are -- >> you went for options. you should have gone for the rsus i'll talk to you later about that. >> i had no choice it were options given to employees -- >> who negotiated your contract? >> i don't know. >> almost all expired. worthless. management, however, did get repriced right at the lows not us i'll never -- i'll never forgive them for that. but they're all gone now anyway. >> look at that line in the sand >> i'm still here and they're all gone >> yeah. you remind me of eli wallach in the magnificent seven. >> now, vertiv was down ten. now it's down seven, now down three. what's down ten?

that's the first anticipation that that order is not good enough has the guy done any work to sell it? i'm seeing nonqualitative work taking action. emerging people at home, take a deep breath. we're thinking future, not past. in the future vernova is very good small farm factory - >> you can't - >> you always said 20% >> come on. >> i'm saying, take a breath when the stock goes down, don't say it must be bad that's a mistake >> nobody's saying it's bad. are they >> well, the people are -- there are people saying it's bad. >> there are people who are saying -- you know who you sound like >> no, don't you go there slm. >> you know who you sound like >> don't go there! >> i saw someone on twitter who said it's bad. >> not sure what they're eating

but they're saying - >> witness the fact that david's going to talk positively about at&t. >> i will. we didn't get to arm we forgot all about arm and qualcomm let's come back to this and get to at&t. >> arm believes that you don't need qualcomm. they can do it themselves. well, this is apple talking. >> i mean, they're becoming -- they were partners in many ways, arm and qualcomm arm designing things that qualcomm then used for the chips that they sell to almost -- into every phone, basically. >> everything. >> and so many other things. now they're becoming competitors. is that a fair assessment? >> that's fair and i think rene haass is a tough guy. this is all or nothing arm can do what qualcomm is doing. they hate each other no one says that could it be they hate each other like cleveland hates the ravens? i don't know you know who the ravens are?

rene haass. >> so you're going with arm? >> ike going with the ravens/haass i hadn't brought in the nfl since 9:35. >> not at all. >> so i do believe rene has the cards. arm's down eight today what is that that's someone -- who is selling it down to eight a genius einstein >> it is worth watching and we'll continue to because this is a significant dispute - >> it's huge. >> -- between two partners to jim's point, now competitors perhaps becoming even more significant competitors. >> once again, magnificent 7, do you remember when steve mcqueen said, no, we're competitors. they deal in lead. my bet is on mcqueen/haas. >> do you want to do texan in the neighborhood >> that's a good example

i'm on the call and saying, holy cow, chinese evs, very good. only one area weak, industrials. i read saying, future is bad, business is bad. who is writing this? it's a nonpromotional company. >> it could be a.i. writing these stories. >> we didn't get to a.i. we could have invoked a.i. and jensen today quiz hint, 10:00 show not mine because i'm furious about it >> i'm not sure what you're -- i'm not following. >> who this morning of the major companies invoked a.i. and jensen huang to me in terms of a partnership they have? >> i don't know. carl, any guesses? >> coca-cola >> really? >> james quigley you probably heard about that on the ten. they have a dtc strategy it's not going to be in your documents. this is my own work. >> i'm just looking at earnings. >> there was weakness in india

weakness in china. there is monsoon season in india that did depress sales and that's what's going on. >> we're talking about coke now. >> we put up nvidia. >> carl, this is one where there's profit taking because of weather. i think james quincey is terrific and he's on the 10:00. i won't be here because i'm going to edison. but then i'm going to chevron and doing my show on the oil rig. >> is that tomorrow? when are you doing your show on the oil rig? >> i don't know. maybe tomorrow. >> where >> in the middle of the gulf of mexico. >> when are you leaving? >> tonight i'll be there tomorrow. >> be careful out there. >> 90-minute chopper ride. they got me fire retard ant clothes yesterday. >> i walked around those looking ridiculous myself. >> thank you, starlink starlink - >> that can get us to at&t well done. starlink to at&t at&t shares are up 1% this

morning. the company did report earnings, a different response in the marketplace than verizon got yesterday. we were talking yesterday, of course, verizon was down rather sharply. they had an analyst day yesterday as well. i'll get to verizon in a moment. as for at&t, hit on many of the metrics that you'd expect. wireless service revenue growth, 3% broadband revenue growth you know, sort of keep an eye on the balance sheet as well. $129 billion in debt the debt loads of this company, $121 billion at verizon, enormous they're going to have an investor day on december 3rd where capital allocation certainly will be important. will they get to buying back stock, for example full year now, what, 17 to $18 billion in free cash flow is what they're looking for they did 5.1 billion in this last quarter

they're $12.8 billion overall as they head into this last quarter, or am the middle of it now. so, free cash flow, 17 to $18 billion. capital investment, $21 to $22 billion are the current numbers for the rest of this year's outlook. they're all about fiber. interestingly -- not all about it, but certainly that is a key focus for john stanky and the management team. verizon with the potential frontier deal is moving more strongly into fiber. we talked about t-mobile and deals they did to move strongly into fiber maybe, frapz, john stankey being endorsed by his competitors. revenue down, equipment sales. equipment sales are phones upgrades are not there i talked to cfo, he said fewer upgrades, people seem happy with their phones we saw apple responding yesterday to that same number

from verizon today at&t >> well, a very good note from bernstein talking about pretty much now it's understood that it's really muted, sales are muted. i think it's an a.i. cycle carl, i think when you deal with apple, it's -- and i'm not -- i think that t-mobile has the best orders here. if you go with apple, if you play the iphone cycle minute to minute, you'll miss the bigger picture. there was an article today saying, look, it's not ready yet. it's going to get better and better if you want it, you can have it. tim cook historically doesn't put out anything until it's perfect. perfection is the enemy of great. everybody wants this. >> cook is in china. second trip this year where he did tell some of the tech titans in the government over there they're going to continue to invest. >> they're investing a lot in india. their big push is philippines, asia, brazil, other markets. this is a very good company that

has figured out if they do india, david, 1.4 million people and they build it there and the indian government let's them do it, you know this stock has a long-term ramp. >> yeah. i think there are some questions right now, though, about the upgrade cycle and whether it's unique in the sense of apple intelligence not really fully available and will that, when it is, you can only get it, what, with the 15 and the 16, right? >> yeah. >> when it is available, will that then bring further upgrades guys, verizon shares are up, regaining a bit of lost ground from yesterday they had this analyst meeting in the morning yesterday after reporting earnings they did increase their leverage target it went up a bit from 2 -- it is now between 2 and 2.25 again, a bit lower than at&t's, which will be at 2.50 come the first half of next year. but not a great response there

really everything looked more or less in line again on revenues, equipment revenues were down that's not necessarily a bad thing for these companies since, as we all know, they subsidize the phones it's not like they're making money from equipment sales we'll keep an eye on verizon as well. >> look, this is another industry -- i come back and i say, if we are going to look at verizon's numbers, i regard them as disappointing and the company has been very promotional. at one point i thought at&t was promotional. they put the numbers out without any spin i like the quarter i like the way they gave you the quarter. >> yeah. they've been sort of quietly executing to a certain extent. >> i think that's important. >> now, this fiber strategy that's being embraced broadly, you mentioned starlink, that's how we got -- i do continue to wonder what competition starlink is ultimately going to bring when that starship is going up and back regularly, dropping off 400 new satellites at a time

they're going to be able to quickly increase the capacity of starlink will it ever be a true competitor in urban areas? that's very much unclear suburbia is certainly a possibility. right now much more ubiquitous in the rural areas. >> i know, david, i know we'll be all over the map here, so i understand and anticipate your -- let's just say your -- you won't mind, how about that enphase is down a lot today. that's because of european business going down. european subsidies are down. >> we saw deutsche and volvo today. >> europe is doing a lot of things with the government i had a solar project going on in italy and they gave me a huge, huge rebate. then they took the rebate back that discouraged me from completing my solar. >> you might not want to engage in more business activity as a result. >> at the same time. at the same time starlink comes in with the euro package

what am i supposed to do it's faster, it's doesn't -- >> doesn't go down in a storm, which in a lot of areas that matters, too. >> a bunch of ceo friends who carry -- not friends, but they carry starlink everywhere they go because they don't want to be in a situation it's a juggernaut. starlink is going -- >> i think it bears watching for the entire industry. to your point, obviously, i don't know where the latest valuations are on spacex starlink is a part of spacex. >> people can take -- whatever price that deal -- >> we're stuck with the dichotomy, which we discuss all the time the success of ventures, both present and future the piece in "the times" today, which basically argues that x is the biggest source of misinformation that we have going into this election >> i'm not going to disagree with that. i tend to -- i've kind of backed away from reading x because it's

so -- >> have you entered the $1 million sweepstakes. you sign the petition -- >> you can't buy my vote i'm not a cheap date $1 million how about $5 million market down at ten, then down five at 8:30 and down three at 9:30 this is a good test of my theory here oh, verta is up $1 .50. >> there you go. up 1.46 bucks. stock is up 12%. >> you know who drove the bus? dave cody. >> one of the more successful spacs. >> other than draftkings. >> another successful spac djt. >> djt, which has now tripled

off those $12 lows. >> i can't find a lot of research on it. >> djt, underwritten by ef hutton that's true. you remember that? licensed the name and -- licensed the name and -- yeah, that was - >> what about herbalife, what's your view? >> on what >> herbalife >> herb and life, i'm in favor of both. >> peaches and herb. shake your groove thing, partner. yeah, yeah, remember that one? >> i kind of do. sorry i do, but i kind of do. >> yeah, it's like yesterday >> we used to talk about herbalife like it was something worth talking about? >> the same way we talked about tupperware. >> dow is down 260 watch bonds today. we mentioned the ten-year getting back to 424. not much data but we'll get existing at the top of the hour and bowman on the tape, barkann on the tape later on

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keep your eye on travel today including hilton down about 2% a miss on sales, a miss on rev par. u.s. up only one and gdeui short, 160, one of the mid streets at 176 with that in mind a fairly weak take, dows down 240. we continue with "squawk on the street" in a minute. it can. on the servicenow platform, ai transforms your entire business. your people work better, your customers are happier, and todd... well... he's practically euphoric. practically. so, let's get to work. (♪♪) so, you know, han is 22 years old, and we've been together most of my life.

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jim, you got a special show planned for this week? >> yeah. we are going to go -- yeah, we leave tonight, virginia gillman, heather gaines and i, to go with mikeworth on the anchor, this is a really big deal, david, we're going to the gulf of mexico, 90 minutes out by helicopter maybe we should bring the whole crew it's exciting. you buy a gallon of milk it's like 5 bucks how do you get a gallon of gasoline from that the answer is maybe we're not

paying that much at the pump we'll find out. >> times peiece this morning, lowest national average since february. >> don't know how they do it and make money but they make a ton of money. >> we have a bit of history. i found it in my photo file. this is you on a rig this is 2014, where crude was 101 and the story of the day was cracks in boeing's wings. >> history repeats itself. that was on an oil rig, company was promotional and then went bankrupt i hope i don't do that. >> the cramer curse. >> they're works of human engineering, really. it's stunning. the size and scope of what -- >> impossible to do. >> what we -- certain people are able to accomplish. >> in the tarpin rodeo a few

weeks ago i fished off of one. i will tell you, mike said i can't bring my fishing rod not allowed to. >> it's a long way down. >> i'm a decent caster but really the -- david, you won't believe the red fish i'll show you a picture after how much i caught off a defunct rig. >> just be careful. >> be careful? >> yeah. >> what is there like flying objects? >> yeah. it can be slippery be careful walking, going up the stairs don't fall. >> don't look down. >> chopper is fine. >> i'm excited and i'm excited about costco, a nice piece today talking about how you can't -- maybe they're going to stop letting you. they may have a netflix moment i went to costco this weekend and my wife was stopped there's now a scanner -- >> their magazine is like the third largest circulation in the country. >> when i was featured in the magazine, jimmy kimmel was on the cover.

jimmy kimmel invited me on the show to ridicule me that he was on the cover and i was like page 7. >> tonight >> i got mattel, very important they'll report a number, a lot of people bullish about it and then going to the etsy pop up store i reference my wife for no particular reason. saying what'sthe matter with doing well why does it matter to you whether the stock goes up? i looked at her and was like you got to be kidding. that's what i care about the stock going up i'm just a dollar sign represented by a man what is that >> it's what you are >> thank you very much i will see you guys from the rig. there's no degradation whatsoever -- >> you're going to do this show from the rig no >> yes >> wow. >> why not >> i didn't do that when i was in -- i have two all nighters coming up. that's all right, have you heard of caffeine? >> you have some kind of caffeine generating thing going

on. >> i bring the iv. by the way, we have not talked about how brian niccols is going to make it so you can't go up there and expect -- you know, when my daughter was a barista she had to put the hearts in, that's over. >> safe travels. see you later. >> james quincy. >> all right >> sorry

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welcome back with "squawk on the street" i'm diana olick with breaking news from the national association of realtors. existing home sales in september fell 1% month to month to an adjusted annualized rate of 3.84 million units right along expectations but it is the lowest level since october of 2010 sales down 3.5% since september of last year and fell in all regions except the west contracts signed likely in july and august, mortgage rates started july at 7%

and rates are now a full percentage point lower than a year ago inventory rose 1.5% from august to 1.39 million homes per sale that's a 4.3 month supply and pressure continues on prices the median price $404,500 that's up 3% year over year and the 15th consecutive month of price gains. 30% of sales, which is high, homes are sitting longer and average 28 days compared with 21 days a year ago. and first time buyers fell out, just 26% of september sales. that matches the all-time low from august. sara >> thank you very much good wednesday morning everyone welcome to another hour of "squawk on the street" i'm sara eisen with carl quintanilla and david faber stocks are under pressure this this morning, s&p down .4%

energy just popped into the green. everything else is weaker. you have tech under pressure that's why the index is lower same with the nasdaq, it's pulling back, so we are tracking for a loss on the week, would be a first time if we continued through friday in the last seven weeks or so. but part of the reason is we're seeing higher treasury yields. look at the 10 year, hovering around 4.2% above there looking at the highest yields since back in july. two year yield above 4%. 30 minutes into the trading session. three movers we're watching. shares of mcdonald's dropping weighing on the dow right now. the cdc saying an e. coli outbreak was linked to the quarter pounder burgers. more on that in a moment starbucks, sales falling for the third straight quarter fueled by a 10% drop in traffic in north

american stores and pulling guidance for fiscal 2025 we'll have more on both consumer na names later in the show. and coca-cola, down 2.4% right now. the ceo will join us exclusively in a few seconds to talk about the company's outlook. the overall picture today is one of these rising treasury yields which is happening because the data has come in better and strong is happening, a lot of people think, because also with a view towards the election, higher deficits, fiscal spending all of that could be inflationary and could also put pressure on treasuries in the long run certainly if we have more debt problems i'm paying attention to the macro commentary from companies today about what they're saying about demand, it's a mixed picture winnebago's ceo performance fell short of our expectations,

priorly reflecting the sluggish retail demand environment. l'oreal. our business remains pretty good in europe, north america and emerging markets despite the summer slow down and reckitt we're seeing continued good volume growth across many of our health and hygiene brands and geogroggeogr. and from the hilton ceo, how he described travel demand. >> i think the world resiliency i use to describe our business i think that word is getting used a lot to describe the economy. and i think, you know, there is a very broad consensus view that the economy will continue to be -- you know, it obviously has been slowing because that's what the fed has been trying to do here in the u.s. and to a degree in other parts of the world but focus on the u.s

but, you know, it remains strong, resilient and showing positive growth. >> strong, resilient, positive growth, that's travel. but even a home builder like taylor morrison, the word was generally solid we're not hearing such slow down discussion even in parts of the economy that were super strong like a winnebago for instance nobody is talking about recession, talking about the consumer pulling back. there's talk of value, choices but again, overall pretty healthy. >> as we get closer to the november fed meeting, what are the various inputs that you're taking i almost think of you as an adjunct board member. >> thank you i like to think of myself as that with no expectations. >> how are you thinking? >> the expectation is cutting 25 basis points. >> do we think it's in danger. >> the market thinks we get two

more by the end of the year. i think we get one or two more one or two is reasonable given the strong data and they began the cutting cycle. they want to recalibrate back to a lower inflation rate we'll see what the data tells us i think one is reasonable but maybe they'll pause. >> election concerns don't seem to be stopping hilton travelers. >> no. we'll ask coca-cola right now. shares are slipping as i mentioned, higher prices offsetting lower volumes case volume down 1% in the quarter. in north volume was flat however coke did reaffirm full year guidance even lifted it on the chairman side a bit. james is here to talk about the quarter and the road ahead how would you describe demand right now given the softer volume trends but overall good numbers? >> look, i think global demand is pretty resilient.

i think the last person on was talking about resiliency i think the global economy is hosting good numbers there was a small upright yesterday. consumers seem to be resilient yes, there are puts and takes, some countries doing better than others and some sections of consumers doing better than others but overall good resilience. the quarter was unusual in the sense that actually the developed economies did better than a few emerging markets. we see that as largely temporary. a couple of them are ongoing but largely temporary. we're confident of re-establishing our overall growth equation which is growth with pricing. >> let's talk about the volume the unit case volume down 1% is lower than consensus should investors be concerned about that what happens next? >> look, when you disaggregate the volume what's interesting and typically, the developed

economies, u.s., europe, japan, australia, they grew volume and grew ahead of the emerging markets which is not normal, usually emerging markets grow faster but there's been ongoing slownesses as we chose bits of the portfolio to focus on in china so the overall number is down but actually coke is up in china as we work against the economic backdrop and and invest for the long term. and the middle east, there's a spillover from the conflict. but also a number of quite profound macro economic restructuring that a number of the countries are doing there and those are ongoing. but there's factors, big monsoon in india, hit the third quarter, tends to produce a better year next year. we think it's going to work itself out and we'll be back to volume growth and a strong balance top line as we go forward into next year >> pricing doing the work.

price makes up 10%, and that was better than expected how is that happening in a time where inflation rates have, and are, coming down >> yeah. i think you can break the global price fix down to three buckets. there's the actual kind of ongoing rate pricing which as you say, has been tracking down and moderating and kind of directionally similar to cpi. there's still input cost going up, like wages and agricultural and packaging but the price of the on the line rate is continuing to moderate there's a number of high inflation countries that have a disproportionate impact on price level and that too is moderating but that was about 3% this quarter and then we have the mixed effect where we are balancing affordability with premiumization opportunities and this quarter, the outsized performance of the developing economy relative to some of the

emerging ones. we expect to see price mix moderating over time into 2025 and coming together with a positive volume growth ongoing moderation i think is the key message. >> i was going to ask you if you were concerned about vice president harris if she gets elected. she has talked about capping prices, specifically at the grocery store. talked about greed-flation and gouging. i'm not sure what that would look like. still growing pricing double digits i wonder if that's a concern? >> take the u.s., the pricing was up 10% but only half was price. price in the north american business was growing 5% in the q3 the other 5% came from other businesses that had lower revenues the mix is half the effect in price in north america, 5% is

not far out of track with trailing cpi, so i don't think there's a big problem there and input costs continue to go up, even as i said in the u.s. around wages, agricultural commodities and materials and packages are still rising and we expect that to be the case going into next year. >> what about the north american business you characterized it earlier in a conversation with me as strong which is interesting because your competitor pepsi talked about weakness in the consumer, trade down, less traffic in the consumer, going to buy bulk. more value seeking consumer, are you not seeing that? >> absolutely there's a section of the u.s. population that is pursuing more value seeking behaviors whether it's a lower entry price point, a meal deal in the away from home channels or looking for smaller packs or

smaller number of packs in a multipack in the at home channels at a lower price. there's some of that behavior going on in the marketplace but also people with more disposable income looking for those higher priced opportunities or different opportunities in the round when you put it all together, the beverage industry in north america continues to grow strongly and the two brands that added most retail dollars to the at home channel for example were trademark coca-cola and fair life. if we focus on our brands and innovation, the right kind of packaging price offer and our execution, we can continue to grow the industry and gain share within it and that will be a good result for the coca-cola company. >> what is it about fair life? how have you grown that? i don't think of it as a value brand. it is higher price we buy it because it lasts for a long time, has later expiration dates but what have you done for

the brand to super charge the growth here? >> i think fair life has been an exceptional collaboration with select partners and it has really done well it really is a consumer proposition the milk itself as you say is a longer-lasting milk it also has the filtration so it has less lactose in it it goes through core power which uses the filtration technology to amp up the level of protein and reduce down the lactose in the core power a tremendous protein drink through the nutrition plan so sit's really an exceptionally well done product. and it comes with, you know, a good amount of positioning around the execution in the marketplace. just a well done product it's been more than 10 years in the construction it didn't happen overnight but it's been really done. >> less lackatos is good in my

family. >> i notice you talked about your nvidia partnership and earnings which i think is a sign of the times how far along are you in the gen ai i know you've been working on it with marketing with drinks, where are you in that process? >> we're getting past the phase of which people are using for advantages of the analytical models through using a.i. and the innovation, the beverage, all the way through to the next frontier, at least for a marketing transformational point of view moving from imaging to video to text to sound to music. and we are starting to make ads now and looking at with where to use them and when and seeing whether we can have, you know, true life quality through the a.i. i think we are arriving at that point with the technology. and we're seeing whether they can be made faster and cheaper and arriving at that point with

the technology so i think we'll start to see it bleeding into the marketplace. and it is a productivity and effectiveness opportunity for us so i think we'll start to see that next waive of truly generative video and sound. >> what are you doing in the environment when it comes to ma marketing? are you increasing, decreasing spend? does the gen a.i. productivity around that lead to a change one way or the other >> two parts on that answer. one is our bias is to lean in and invest in marketing innovation and execution where we see opportunities to grow and only if it doesn't happen to reshape the approach with gen a.i. it's going to make all the time, the production of marketing cheaper and quicker. how that then plays out, and what the ultimate unit costs of using it are are yet to be seen. that i think will be one of the big shakeout factors as we go

forward. in the end if unit prices really do come down, you have kind of a question mark as to whether that then floods the marketplace with advertising and what the response from consumer engagement will be i think there's a lot left to be seen as to how generative a.i. will transform marketing and how consumers will respond and also what the price point of the relative different media outlets are. i think that's going to be a journey we have to go on but it's coming and it will be more productive and more effective. >> yeah. you and everyone else we're waiting to see the progress. finally james i wanted to ask you specifically about china you have a big business there and we've seen the weaker data lately i know it wasn't a strong spot for you in the results as some of the other regions but there's hope and new stimulus and seems to be new commitment from the leadership there. what do you see on the ground in china from the consumer and what are of your expectations

>> clearly this year has been a little softer than it has been historically, but as you say, they put some stimulus in. we're investing for the long term in china and we've been focussing on what we can control within our action. that's been very much around the marketing, innovation, execution, and even within our own china numbers which declined in volume this quarter part is choices we made about deprioritizing the lower cases so we saw coca-cola trademark grow in this quarter i think what we are focused on is what can we control that will help improve our business for the long term? >> you have to settle a debate between me and david about the election do consumers act more uncertain and do you see that in their spending habits around the u.s. election some ceos have cited it. we're wondering if that's an excuse or real

>> our north america business has done pretty well so far this quarter getting close to election i will say, look, the coca-cola company is the product of american entrepreneurism we've been through 34 presidential cycles so far. we've found a way to advance the business for the people and prosperity through all the cycles and that's what we're focused on. >> i think that's a no david for you thank you, james, good to get the color and commentary on the quarter. james james quincy shares for mcdonald's and sta starbucks dropping and the boeing ceo joined us the last hour saying the company needs to return to the core business and get leaner. and a lot of oerigth b movers to drill down on, especially in the chip space the stocks you need to watch

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we do have a solid quality and safety management plan that we've laid flat with the faa that will inform what we'll do

in terms of being able to increase production rates. so we're hopeful we'll see rate increases over the next year. >> that was kelly or tberg. it was his first interview since he took over as ceo of boeing which reported a $6 billion loss of course the machinist strike may be concluded as soon as this evening there's the possibility of a large equity offering sheila joins us. she has a buy rating, 240 price target what did you think about his public debut so to speak, conference call, interview with us as well didn't have a lot of answers. >> it was as expected from kelly. there's a strike vote tonight that concludes after 5:00 p.m. eastern time and obviously an equity raise coming up he has to be pragmatic in his approach

slow and steady wins the race. surprising factory, boeing counted 15% up 2018 levels so we could see more head count cuts and i think some of maybe what investors want to see and what we wanted to see is other portfolio realignments >> what would you like to see? >> he didn't commit to anything last about defense and other areas as well. i know there are some expectations that there may be some divestitures. >> we have a 10 billion potential equity raise to fund 25 and 26 and obviously cash flow needs but you have a $3.5 billion services business and where we see assets is 15 times ebitda so we're not talking about a spin of the entire asset but bits and pieces of that. defense, 2 billion today and 1 billion each of the next three years this asset was generating 2 billion of free cash flow in 2019 there are legacy businesses that folks might want.

>> can he put out the fires of the moments and focus on nextgen? >> i think he can. when it comes to boeing production you're manufacturing two aircrafts. so let's focus on 87, 37 we have a strike, at zero. let's see how quickly we can get up to 25, 30, 35, 38 we think we're stuck at the 38, 40 range for the next two years. >> what's the market expecting in terms of the equity raise we've been hearing 10 billion maybe a 5 billion mandatory convert? >> most people are expecting 10 to 15 billion. you probably have 10 billion already in the stock price and what we've seen in secondaries in the market recently in our space has been positively severed. i think some people have been buying aed he of that and that's the activity this week ahead of the positive negotiations with now a 35% wage increase on the table. >> what about the culture and the issues there

has there been any progress? >> i think that's why he's pragmatic. 70 days on the job, this is 170,000 employees you have to overhaul and reinvigorate and put in new things. that's what's going to take time and that's why he's steady on that front and potential wild cards could be asset sales funding the business and being in a better balance with the balance sheet. >> do you think moving corporate out of seattle long ago was a mistake? >> clearly there's a focus on seattle and charleston, virginia where the headquarters are now but the management team has to be where their largest facility is and employee base is. >> have they become less productive >> i think they're less productive boeing has become one of the most bloated companies in the airspace production place. you look at transcend, their base is 20% below 2019 levels and revenue is higher. somewhere along the years boeing

overhired. this is not an undercapitalized company. there are a lot of changes that the company can make. >> still to come this morning we are watching mond'cdals and starbucks dropping on two separate headlines we'll get the street's take on where they may go from here. starbucks trying to recap early losses after the break

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welcome back i'm sylilvana with your cnbc nes update lloyd austin said there's evidence north korean troops have been deployed to russia saying if they join the war in ukraine, it would be a very serious issues nato allies are consulting on the deployment harvey weinstein is due in court this morning for a hearing ahead of his retrial on sex crimes new york's highest court

overturned his 2020 conviction earlier this year. the judge is expected to consider prosecutors' requests to consolidate his case with a newer charge it comes one day after nbc news learned harvey weinstein is being strtreated f cancer. and shohei ohtani's 50/50 ball sold for $4 million it's a new record for any ball in any sport last month he became the first player to hit 50 home runs and field 50 bases in a season sara >> was that you, did you buy that baseball, david >> no, i would not be buying that baseball as a mets fan. >> why not >> sh suffering a defeat in six games to the dodgers. >> i think the yankees are doing well, right? >> yes they're in the world series. >> i know.

my kids are on it. thank you very much. >> yeah. ton of news in the food space. starbucks posting results showing same store sales fell again and suspending outlook for fiscal year 2025 new ceo there. we're watching mcdonald's, stock is dropping after the cdc said an e. coli outbreak linked to quarter pounders has led to one death and 49 hospitalizations their ceo sent a video to employees yesterday. listen. >> it's important to note that the majority of states and the majority of menu items are not affected other beef products at mcdonald's including the cheese burger, hamburger, big mac, mcdouble, the double chee cheeseburger are not impacted.

we're working quickly to return our fulmenl menu in these statea soon as possible. >> i was looking at the fda complaint on this. the preliminary trace back according to the fda and distribution information shows that slivered onions served on quarter pounders are likely the source of the contamination. they're looking to determine if they are the source of the outbreak and if they're sold at other businesses that's one possibility here, the slivered onions. according to the commentary this morning, the stock might be in the penalty box until we get more answers about the source. was it a supplier that will affect other businesses or was it mcdonald's and how quickly can they get their arms around this to determine whether it could last for, what, a year and a half, two years, which is what we saw with chipotle, the other ones investors remember with the e. coli outbreak. >> stock has been on a tear

since the summer let's talk about the fallout for starbucks and mcdonald's david palmer joins on mcdonald's, people are trying to look at prior episodes at other chains is that a fair analog? >> you never know. but it does look like this is in the past, we have an october 11 is the last day that somebody was reported sick. only we're now in the headlines and the number of people that reported they had a sickness will go up from here but it's likely as the company has said that this has worked its way through the food supply and the company is taking steps to limit those onions on distribution and even the fresh beef burgers those go on the quantities are apprfresh bef bur burgers. it feels like if this was a supply chain issue, like

chipotle, for instance, it had five different instances felt like it was the protocols in the restaurant that was the problem. that was far more damaging this seems like a supply chain issue, a fairly common e. coli sickness that goes out in the industry, over 200,000 cases a year in restaurants. >> right a lot of notes today making note of the fact that we obviously mention the stock has been a winner over the past 12 months and the informnotion that thing beginning to click the last few months whether that was the value dollar menu, the stronger dollar -- >> there's still concern about international weakness but the u.s. was gaining momentum traffic more than sales and chicken big mac dropped, that's helped their check reinflate in recent days, the momentum in sales before this news was stronger and stronger. so it is -- it's tough timing in

terms of this u.s. turn around that seemed to be getting into full swing here headed into the fourth quarter but the key thing from here is whether the news kevin meps on flowing and the cases keep on coming. >> we were talking about yesterday good brand exposure between the two presidential candidates fighting over how much time they've been at mcdonald's my question is on the operations side another question is, chipotle owns the stores, mcdonald's are nearly all franchised. is that making it riskier or less risky when it comes to correcting supply chains, putting in new safety measures that sort of thing >> operations are always important and it's important for the franchisee to represent the brand but the brand is the brand for the consumer they're not thinking about that.

and food safety is the number one thing you want to do well. mcdonald's has a lot of kill steps for any pathogens and good tracing of supply. those things are important and has made mcdonald's one of the safest over time so that's really the key chipotle obviously needed to tighten up its own supply chain and given the fact that it had a certain mandate around local growers and whatnot and organic supply and serves a lot more fresh produce it obviously had a lot more risk in yester-year but they've tightened up as well. >> let's talk about starbucks in the brief time we have left. they preannounced fourth quarter results didn't look good to say the least. you say in a quick note, there's almost no visibility into the trajectory of the recovery >> yeah. >> so how do you go about modelling things then? >> we basically straight lined

the type of margin performance they did in the fiscal fourth quarter through fiscal '25 that's poor performance. they have productivity but still a lot of deleverage from the negative 10% traffic in the u.s. coming into november, december, because of the gaza incident last year, they got entangled with all of that politicized issue. but more importantly, this is just the beginning of a brand turn around under brian niccol and you're going to see a lot of the same things he did there at chipotle here. that's going to be important on the brand building side but a lot of it is going to come down to operations and restoring the piece on the inner store and for the barista getting them better support to be the brand ambassador they can be and refocussing on the core cough. so a lot of work to do but

headed into fiscal '26 we're betting that's going to be a turn around happening by then. >> david we were saying how active your coverage universe is right now. appreciate it as always. good to talk to you, david palmer. >> thanks, carl. still toomwel lk ce 'lta the earnings out of major telecom stocks at&t reporting today, t mobile is on deck we'll give you the full run down when we come back with the dow down about 229 right now [scream] seat protector to save the seats. they're all yours! -we're here! -hey, i knew you were comin'... so i weatherteched the car! -can we get ice cream? -we can now. order your premium american made products at wt.com.

getting a news alert on goldman sachs. we turn to leslie picker. >> the consumer financial protection bureau announcing an enforcement action related to the partnership for the apple card a lot centers on customer interface and customer service in terms of the fines that will take place as a result of this the cfpb is ordering apple to

pay a $25 million penalty goldman will pay a $45 million penalty as well as a $19.8 million in redress to affected customers by this in a call that ended a short while ago, the cfbp outlined the case it made for the enforcement action saying they found that apple failed to send tens of thousands of customers dy pews to goldman and when the disputes did make it to goldman ultimately the bank did not follow requirements for investigating those disputes and there were also issues with technology and handling those disputes and then the cfpb found that apple and goldman misled consumers about interest free payment plans for these devices thinking they would get interest free when they did pay interest among other allegations. goldman is responding saying apple card is one of the most

consumer friendly credit cards that has been offered. goldman said we worked diligently to address changes that we addressed after launch they're pleased to have reached a resolution with the cfpb but they said before introducing any new product, goldman must give cfpb a plan to how it will apply with the laws. >> thank you very much as wgo to e break. shares of trump media continuing the rally. shares have tripled since s sinking to the all time low around 11 and change stick with us. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right.

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can you profit from a payment stock? a key name in the sector is getting ready to report rngseain next week and one options trader is looking at a strategy to play for potential upside there find out which one during our market navigator segment later

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taking a look at shares of at&t having a strong day in comparison to its competitor verizon stock which was down yesterday though rebounding slightly today at&t's numbers fine, they were relatively strong continued to obviously invest in fiber. give you the outlook for '24 17 to 18 billion in free cash flow, free cash flow 5.1 billion. capex 20 and 22 billion. revenue down in part because equipment sales are down that's hand sets and that leads you to sort of questions on the call for john stankey the ceo about apple and the upgrade cycle. here are his thoughts. >> i think some of these things are a more graceful ramp up as opposed to big bang. software oftentimes tends to be that if you went back and thought

about any software innovation that occurs on a hand set over the past decade or so. you tend to see that dynamic occur. they become material and meaningful over time but oftentimes certain features didn't exactly go to this massive ramp when they're first released because software is an iterative technology it has to be it rated on to improvement and make it meaningful. >> so perhaps as apple intelligence is introduced it'll spark as he said a ramp. apple shares are down a little less than half a percent down in part yesterday on verizon's numbers as well. seeing a pattern emerge in terms of equipment sales december 3rd we get an investor day from at&t. next year they are on target to hit the leverage target of 2.8 times right now. i do wonder if that might bring

talk of share buybacks, perhaps that's entered into the mix here in terms of why the stock is strong. >> the stock is out performing the s&p this year. >> yeah. >> that quietly happened after some underperformance. >> a quiet resurgence for at&t up 30% and the marketis feeling good sy guess. getting out of warner bros. was probably the right move. >> some of those justifications from stevenson back in the day rang kind of weird didn't work. >> and directv both, terrible deals. another mover we're watching is baker hughes. ceo will join us on "money movers." 3in r te. dot go away. not working? at least, not the way it could work. your people are buried in busy work. and you might be thinking... can ai make it all work? can ai help your people work... without all the workarounds? feel better.

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cnbc's election road trip is rolling on to one ofs most important counties in america. our brian sullivan is live in east grand rapids, michigan, with more. good morning, brian. >> good morning, sara and team listen, it's kind of these neighborhoods that are going to turn the whole thing we were in erie on monday. now we're in grand rapids. actually, east grand rapids. kind of a nice suburban areas. it might be the suburbs that

determine things given the market moves and what some guests have said today, have you to look at some of these polls. if you look at the polls we picked up, whether it's quinnipiac or the arrp poll, they're showing a slight lead for the former president that has set off some alarm bells. nbc news with an article yesterday called, are there cracks forming in the blue wall, michigan, pennsylvania and wisconsin. they tend to often go together what do we do when we get inside of a county like kent county, where we are as we talked about earlier, there are a couple of types of rings. here in more of an affluent or downtown, mostly for harris. the middle suburban ring, purple, 50-50 and the rural side of the county, that's opposite and be a lot more for the president. really that purple ring is going to be where things ultimately

develop. so, we haven't been here a long time we were here today, last night, and i'm talking to everybody what are some of the concerns? inflation remains a major concern. talking to a restaurant owner here a couple of minutes ago they just raised prices and have to raise prices again because their prices are being raised. this is michigan i know we're not in detroit. but the automobile sector looms large in the entire state. kent county has a large gm facility, bosch. we saw tesla, a rivian but other than that you don't see a lot of electric cars we made a point of counting as we were driving. eight, that's it, erie to here patrick is my witness on the count in the mini van we rented. auto industry another big concern. quickly, into the markets, we talk about inflation not my opinion you have been hitting on it all morning. look at the bond market.

the bond market spiked gold at a record high. those are things that suggest there is a real concern in the bond market that inflation could be ready to spike again. and inflation and the economy probably on the minds of many of the folks that are watching right here behind our cameras in east grand rapids. >> i was just looking at the unemployment rate for michigan 4.5%, higher than the national average, which is 4.1% wondering what might account for that >> reporter: this county, sara, it's a good point. i think we have the unemployment rate kent county was 3.2% it's now at 4.0. it's still a very, very good unemployment rate. this is one of the few key swing counties we've talked about where the unemployment rate has actually ticked up we talked to a bar owner last night. we ran some of that sound earlier this morning on "squawk on the street. he was saying that his business was down a little bit. the question we don't know, and here's the question, is the business down a little bit because it was such a covid

super spike that it's just normalizing, or is it the sign of kind of a slowdown overall? i can tell you this much what's not, david, down is the advertising market every commercial break is a political ad every billboard is a political ad we don't see it in new york and new jersey, but here, everybody i talk to, just says, let it be over sooner than later because it's every break >> yeah. makes the comparisons for next year not so good all right, brian, thank you. brian sullivan. >> reporter: thank you >> grand rapids. our live market coverage coins ghafr isntuerit teth

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good wednesday morning welcome to "money movers." i'm carl quintanilla with sara eisen at the new york stock exchange today the dow and s&p trying to aavoid a three-day loss. how does the election less than two weeks away impact near-term trading? we'll talk about it. three names in the consumer space on the move. why shares of coke, mcdonald's and starbucks are all falling for different reasons this morning. a rare and exclusive interview with the ceo of baker hughes a