the market dow futures down by about 60 points boeing has had problems there, and a couple of other dow come po independents. ibm was the biggest pressure rl earlier this morning the 10 year is at 4.22 the two year at 4.05 that does it for us today. join us back here tomorrow right now it's time for "squawk on the street. ♪ some aerial pictures from a chevron oil rig in the gulf of mexico today, a vital region when it comes to american energy production, especially with prices at the pump at the lowest levels since february today. good morning welcome to "squawk on the street" i'm carl quintanilla with david faber at post nine of the new york stock exchange cramer is on the oil rig in the gulf futures bounce on the s&p after

the worst session in a couple of weeks yesterday as yields retreat some 40 s&p companies report today tesla, the biggest gainer on the s&p market following the stronger than expected q3 results, musk with bullish comments last night. >> and boeing shares extending losses from yesterday this after the machinists rejected the new labor contract proposal, adding to a strike that is already 5 weeks long southwest and elliott reach a deal, the company will add six directors, five proposed by elliott. we begin in the gulf as we said yesterday trying to set you up with the history of you going to rigs. this is not the first time. >> no, it's not. i have been in the gulf before and i will tell you, this is an engineering marvel

we're about 140 miles out. this is all new technology it's very exciting but david, i do want to say, as great as this is elon musk took a shot very early on in the combustible engine, it was very effective he called what was happening here, niche. it doesn't feel niche david because you've been on one of these but when you listen to elon musk he did have a lot of authority on the call last night. >> the demand for oil continues unabated where are we in terms of daily use right now? i'm curious how many barrels that thing you're standing on is producing every year >> it'll produce 70,000 barrels. you're right we use oil. it's interesting because chevron's rap is it's going to be many years before we switch to electric. it's really funny because in musk's call he started out here's what's profitable and

then talks about how everybody is on ev maybe he thinks all ev will be him but tesla is the leader today. i think as great as chevron is, and obviously the gulf of mexico and a beautiful place and it's going to be the -- i'd say the center of production, and maybe pass permian one day as it runs out. but look, carl, the fact is, this is an industry that desperately wants respect no matter who is president. and the respect comes from being a good citizen in the gulf, producing 14 to 15% of our energy going higher. so, carl, it's a normal but it's overshadowed by mr. ev, elon musk >> although, jim, a lot of folks pointing out today as good as the margin story was last night. capex is getting attention adam jonas calls that figure eye popping, 14% of sales. looking at 11 billion next year

and even jonas says there are long term questions about the capital intensity of his model >> it's incredible because he did not mention nvidia but he did mention neuroral brain the neural brain for ev is black well, the latest version of nvidia i go back to nvidia because when you see capex that's from musk to jen ssen huang. his stuff is expensive and people have to pay the freight to get to that level. >> tesla obviously is going to be up. we can talk about it, i guess we have after the earnings, jim you seem somewhat -- i don't want to put words in your mouth so i'll let you say it obviously it was a very strong performance in terms of margins at the auto maker we know that far above what many have anticipated. as you and carl have eluded to

already, in many ways they use the business to provide the cash flow for the other businesses that mr. musk basically says are going to send this company's value the likes of which nothing has ever equalled in the history of man kind. what is he talking about, $30 trillion i guess you get to 30 trillion you have to start somewhere they're up 14% plus today. >> look, in some ways it was a do over. we had the bust of a call not that long ago, the big cyber day and that left everybody cold not last night, he refined his message, he was on point again, this is a story about driverless and he's talking about being able to overcome california regulation. you see a lot of driverless in texas. it was a tour deforce call because he's basically talking about, these are cars that no one else can make. it's very exciting to listen to

him because he was so refined in his message. carl, last night you realized this guy is so far ahead of everybody elsethat the stock i too cheap. that's what you're seeing. up 10 when they first reported, up 31. this feels netflix like i think you can go higher. >> this would be in the top five of responses to earnings in the past few years although, only back to levels that it was at a couple of weeks ago. on the call musk did talk about his sales forecast for the year. take a listen. >> regarding the business we are still on track to deliver a more affordable models starting in the first half of 2025 you know, this is i think probably sales growth next year and i -- at the risk of -- taking a bit of risk here, i want to give some -- some rough estimate, which is i think just

20 to 30% vehicle growth next year you know, notwithstanding negative external events for example, some big war breaks out, interest rates go sky high or something like that, then we can't overcome massive force majeure events but i think across vehicles, the advent of autonomy, something like a 20 to 30% growth next year is my best guess. >> jim, this morning the j.p. morgan desk said the stock might be higher if it weren't for what they're calling election risk wrapped up in elon's election activity lately. >> look, he's become synonymous with former president trump. i thought it was interesting here he played the role of jay powell, the fed chief. he's saying as great as our cars are, we need interest rates

lower. and david, when you listen to him, he was trying to so hard, i felt, to stay on message, which is battery, self-driving, the best cars that are really cue. but actually not that expensive. not dirt cheap because they have electricity in them. but what i was struck by is he was trying so hard to not be political but he's become political. i think it helped the story that both democrats and republicans might like evs. >> there are people in california and other places that put bumper stickers on their teslas saying they bought it before musk went crazy i'm just telling you that. i know people are saying i hate him, i don't there's the two sides of musk. this was the business guy side

a very strong quarter. obviously, as you point out, energy storage has become a very important part of the company. it's just not sale of the evs or the credits as well that they're able to sell but also energy storage jim will continue to be a component of the overall story as they move closer and closer to their hopes and dreams when it comes to robotics and autonomous >> he ought to come down here. the rig i'm on, i am on a giant chevron rig in the gulf of mexico and this is an all electric rig it's about being a good citizen, low footprint. everything can be electrified. when everything can be electrified, everything can be ultimately, like nvidia describes, which is what anything you and i can do, they can do better. i thought it was a brilliant analysis that he gave you about what's going to be the not

evolution but revolution all numbers pulled forward even from the lukewarm day he spent he's rather remarkable, carl, when you listen to him he's talking about self-driving that if i was working for uber i would be concerned that's how aggressive his discussion was last night. >> that's interesting because back in july it was burnernstein who said if you believe it's the world you buy tesla. and if you don't, then you buy uber. >> real world has prevailed because musk has not told the story correctly. it was as if he was distracted he does have a few different things david, as you know, the reason why you're seeing me and seeing me live is star link there are a lot of things that this man is involved in, but he was focused last night on ev, on

battery, on message, and it was a very powerful call once again he has questions from p regular people really one questions from analysts and the way i listened to the call, david, it's a narrative which says we are in anyone, you won't believe it and what i'm seeing here, which is billions and billions of infrastructure, will be like a horse and buggy. i think he's a little premature. david you and i both know we're going to be driving horse and buggies for decade. >> we are. to the point that mike werth, the ceo of the company of the rig you're sitting on would say there are a lot of other things that oil is used for, other than just refining it to gasoline many other uses that are far from going away. and to your point, evs are not, even though they're growing as a share we continue to watch that happen, particularly in china, the most important market in

many ways for their use, gasoline powered cars are not going anywhere ask gm, given that quarter on the strength of their portfolio of gas powered automobiles >> look, i mean, he was making fun of the other auto companies saying they're losing fortunes in ev, he's going to make fortunes in ev in the end, he was a showman last night and we like the show. carl, you're right uber has been winner look out uber, this was a tour deforce call >> we'll see what else the stock can put together it's at levels today it first crossed in 2021. but we -- >> how. >> we know where it's been and what happened the last couple of years. >> was that that runup i think it was >> a lot more from jim this hour that's a great shot. when we come back, boeing's

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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 and i think we need to continue to do that as we go forward. obviously the later that the strike ends the more impact that

will have in terms of how fast we're able to recover. >> that's boeing's chief kelly ortberg. of course yesterday the machinists voted down the offer, which consisted of a 35% wage hike over four years unions have different realities and it's a different time. >> look, even out here at a floating platform unit in the gulf of mexico, 75,000 barrels a day. i am shocked that the boeing management we spoke to yesterday, kelly ortberg doesn't seem to be in touch with the fact this is a union unlike others, thinking how the previous ceo get a $32 million bonus when you have something like that they're thinking wait a second, we have 33,000 people,

this guy got 32 million that's not acceptable i am surprised that kelly doesn't recognize the past history and how angry these machinists are i know there are people talking about getting the equity deal done because they need that cash flow but does it not shock you that the ortberg we heard yesterday did seem pretty assured that the leadership was going to carry with the rank and file and the rank and file is not happy at all. >> no. apparently they're not i think there had been the expectations of the 35% wage increase over four years would be enough to get it done unclear what will get it done at this point obviously they did move down or more were supportive of the deal than the last time they put it to a vote but they're still far from getting the 51% they need i -- i don't know, you know, at what point the company needs to pull the trigger on doing some sort of offering, both equity

and as we said potentially mandatory convert, maybe as much as 15 billion, who knows at this point, jim, maybe more the clock is ticking the rating agencies are key here when and if they pick up the phone and say you're going to get downgraded, you can expect the offering to come i'm going to check and see if they passed registration already. i want to make sure it's deemed official >> well, union had ups over a barrel union had the long shoreman industry, the docks over a barrel carl, this union has these guys over a barrel. so it's time to come to the table. if they want an expanded pension. they've been cut cut cut, then they've got to get it. they're being penny wise here. i know -- >> they're not getting the pension you know that, jim that one is off the table. >> i know. i know no, i know i'm just saying the anger makes

it so you feel like everything is back on the table they have to come to a deal, david and do it in the next 24 hours. this is crazy. >> speaking of airlines or at least airplanes, move to airlines and talk southwest for a bit here because we did get a settlement in what was a pretty long-running struggle or fight certainly and an unusual one in terms of elliott which owns 11% roughly economically of southwest shares its largest shareholder because they entered into a proxy fight, really the first one since 2017. since then i think they had something like 36 or 37 settlements. hence why we expected perhaps this would also end in a settlement but it took a lot longer to get there. and it does change the composition of the southwest board in a significant way in fact, when you come next year to the annual meeting you'll talk about 14 board members eight of whom are new directors,

four of whom are legacy. so i think nine actually they get five of the original ten they had proposed. remember they moved it down to eight when they reduced the size of the board they get five of their directors on the board and then the addition as well jim of chevron's former cfo who you may well know. another highly regarded board member potentially here. i would say this, jim, and i'm curious to get your reaction four of these five are former ceos many of them with airline experience it's going to be a very different board for bob jordan to be a part of now. >> look, this is amazing i'll tell you why. you can say, first of all, a six was huge i didn't expect six second, these are really independent directors. third they're not calling necessarily for bob jordan's head i think they feel like if once

garry kelly leaves and gary kelly will be gone by next week. they think jordan kelly is going to do a good job so david i think this may have been resolved a little bit let's say -- look, you and i both know there was always a possibility they were going to ask for jordan's head. they did not do that, david. instead what they came to, we have an independent board and they have to really do some heavy lifting here. >> they are, and listen, jordan either performance or you would imagine his tenure might be somewhat short lived at this point, jim. >> totally true. totally true by the way, i am on a chevron platform just so you know. you mentioned former chevron cfo. 75,000 barrels coming from here. i can't run it, david. i'm just not as good as you are when you were off the coast of latin america -- >> yes, i was off the coast

about 110 miles. i also wore a lot more safety equipment, i would point out i don't know if it's just exxon but they made me get the training and the equipment, wear the helmet and all that stuff. i see you just out there with y your, you know, no helmet whatsoever just be safe be safe. >> david, on this platform, safety never takes a vacation. >> good. i want to make sure that's the case. >> he's going to want to chopper now every morning, even when he's back home jim see you in a moment. kramer is live aboard the chevron platform off the louisiana coast. we'll continue with the gulf of mexico edition of cramer's mad dash, the opening bell, ibm service, ump hog after the break. and you might be thinking... can ai make it all work? it can. on the servicenow platform,

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i know that at&t was better than expected but that's nothing like t mobile i think this is an excellent quarter. what people have to realize is they are taking share. everybody else, david that fixed wireless number keeps going higher and higher and higher what do you think that means to you what fixed wireless means to the industry >> listen, fixed wireless is a competitive threat to certain markets and broad band as we pointed out, ultimately you're using excess capacity in a certain area that you would rather be selling wireless service on, so the ideas that over time perhaps that's going to have to slow down but it hasn't and to your point, verizon also has been more aggressive in fixed wireless, again using the

capabilities of 5g to recreate broad band in the home is what we're talking about jim and it's a real competitor as is what you're using now what you told us to broadcast, which is star link we spent time talking about that as of late as well >> we also have to understand that mike sever was more positive about apple he thought it was a good launch that's consistent with what he's saying i know nvidia seems to have peaked all i'm saying is hold the stocks, don't trade them you don't know when they come back again what that history is, that's what they have a history doing. >> we had the decline in apple shares yesterday afternoon jim again on another one of those demand related forecasts i wouldn't say that sever went out of his way to say the

upgrade cycle has been great i didn't really hear that from him. >> no. you didn't and i don't want to say it's great. what i'm saying is when you just -- i think everyone on where we are, which is in the gulf on a floating platform. everyone is talking to me about apple's cycle not being that good so carl at this point, david, whatever, i don't feel -- if the people who are working on this platform know that apple's quarter is not that good i don't know who's left not to know it that means you might have a rally when they report. >> it would be something if jim went out there, they asked what about apple? do you like apple? >> i don't doubt it. >> what can i say? >> do you know how many people work on the platform you're on how many full-time employees >> i think it's about -- more than 100 there were 400 people who built this, this is new. it started pumping in august and david i had a really good

breakfast here the people are nice. i feel very at home pip probably won't come back because it's so super here >> let's get the opening bell as we look at the amazing shot of the platform, here at the big board. celebrating ipo today, it's ingram micro holding we'll talk to the ceo on money movers this morning at the nasdaq celebrating a recent ipo, hulu check international a provider of factory facility management as we see some positive breath here jim, tesla is a mover as we said but ups is going to come close, up 10 premarket. >> this is one where it was good enough a lot of people felt this would be one more blow up as opposed to say service now i understand you have bill mcdermott on in the next hour just consistently good

consistently good is good but what's better when you've given up on a company and they come up with the numbers she's got this together it's a good quarter, they were hurt by the near strike, maybe we're starting to get some good numbers. fedex did not have the good numbers fedex is doing very well but fedex is a d student going to b, you know how much wall street loves that. >> that's a good story and they can tell it. so they will certainly do so with enthusiasm. jim on earnings and there's plenty to cover this morning i come to honeywell as well. obviously an industrial that we do follow. stocks down about 2.2% not a great review on the quarter. i'm curious, though, as to what you think. >> okay. it's been a horse. i would tell you if you sell the stock here you're toing itahea of the reorganization that i think is going to produce good results.

selling another division too, personal protection division what we're seeing, this is what you have to worry about. you have people that don't realize there's a major restructuring about to occur they're selling the stock on something that is now the past but i understand wall street wants this quarter to be good the previous quarter didn't have any upside people will continue to sell it down the travel trust name will take a big hit today and then you buy it in the end the honeywell you're owning is different from what you're selling. >> and it's going to be a while. we had the ceo join us as well to discuss it will become an independent company and what they're saying is provider sustainably focused specialty chemicals and materials we talked about the deal at the time it was announced, carl and these things take time before you have the recomposition actually taking place. a la ge which took years but did

get there and has created an enormous amount of value that company reporting the other day, the stock also suffering a bit despite what were strong numbers. >> you mentioned the verizon downgrade over at key. they go to sector weight timo was one of the few companies today to do more than just reiterate guidance, they did tweak it a bit higher and stocks been up every day the last couple of weeks. >> i thought this was the one most prone to profit taking but mike sever tells a sorry of super growth they're not going anywhere if anything they love it the buyback was strong the capital allocation here is just about as good as you get. david, i have to tell you, we can talk about verizon, at&t all day they seem like dinosaurs

versus what t mobile does. t mobile wins big contracts they're so aggressive. they're winning. remember when t mobile was not a service we'd ever think about now the level of service seems very high and most of it is digitized, doing a great job of that, sever is quietly the king of this business, david. >> one can only imagine the efficiencies that come their way and so many of the other companies when you're fully able to automate the customer service process, jim and that is coming, of course. and coming quickly in terms of generative a.i. and the capabilities that are going to be able to be deployed by many of these companies i would point out to be fair to at&t, it's had a really good year in the stock market and there was a nice reaction to earnings yesterday as well >> that's very fair. i thought the at&t was much

better than the verizon quarter. let's talk about what you're talking about when you say digitization people have to understand, the model which service now has it, which has an agent next to a human. the model that salesforce is representing, an agent next to a human, the agent next to a human is internal for service now, it is outward for sales force that would be the kind of thing you get from t mobile. i'm a huge believer when you get a human you say could you please please please please give me artificial intelligence. the human is -- the human is -- is grumpy, has to work too hard. these agents are so happy, empathic but they're not real and it's really extraordinary to be asking for the one, can i have the agent, i don't want the human. what a reversal from press one for this, two for that that's ancient. >> it's going to be something if we come out on the other side, jim. i want to highlight some

weakness in key industrial names, carriers the main drag on the s&p, you see honeywell there, dover, i wonder what you think that's telling us right now about at least manufacturing? >> i think there is, in all of those i think the ceos can tell you a point counter point. i do think that even with ibm you get this kind of impression that you see why the fed must have to cut because even these companies we own dover, it's been a big hit we own eaton, you see something -- there's a glitch in all of these i think what's happening is you realize industrial america is not that strong, some of it is levered to auto, the part to the data center is good. but there are other businesses and the other businesses are erratic. you have a company like dow where everybody expected erratic and maybe that can improve what we're seeing is something the fed chiefs have to be

worried about because the industrials are reporting numbers that aren't as strong as others when i see that i say don't sell those, that's why the fed is cutting you have to buy them right now it's a lonely voice in the wilderness i didn't think dave from carrier did a bad job. i think the stock is a misunderstood quarter. i'm going with the industrials because this is the quarter you have to start thinking the fed is going to cut and you are going to win textbook believes you should be buying not selling but the textbook, it's crunch time i like the industrials because of the fed cutting not because of the current quarters. >> keeping an eye on shares of southwest airlines we'll speak to bob jordan momentarily. stock down about 3.6%. we have no shortage of activist situations still with that one resolved we spoke to pfizer the other day, cvs or air products and i wanted to quickly share some quick information on air

products i mentioned two activists there, mantle ridge, paul lyle, and de shaw, it's my understanding according to people familiar with the situation that de shaw is going to be supporting the efforts by mantle ridge to replace board members at air products and so will not be filing a slate of its own. the nominating window closes on the 27th of this month only a few more days from what i understand as well, mantle ridge has offered nominees for all nine seats on the board of directors of air products. d. shaw is supportive of those efforts. they've been trying to understand their perspective and so are standing down in a sense but simply supporting what is going to be an effort, jim, to take over the entire board, obviously with independent directors, only one associated with mantle ridge from what i

understand nonetheless it would be extraordinary, much designed to replace the current ceo at the company. >> right i think there's a -- there's a percentage of these people, the activists, so to speak, who believe this notion of clean hydrogen is pie in the sky is. carl, look, i have to tell you i'm on the platform in the gulf of mexico, it's an electrified platform that's as far as you get in terms of being able to go to the next generation. we're not ready for green hydrogen i think that's what air products has gotten wrong. that's why we like lindy for th travel trust, they're realists, not dreamers that's how i feel right now. >> we mentioned love of course we mentioned ba, american, phil lebeau has had a busy morning. right now with the ceo of southwest. good morning, again, phil. >> good morning, carl. bob jordan, ceo of southwest

we'll talk about the quarter in a bit but the news of the morning is elliott management, five of the people they wanted you to add to the board you're bringing them on the board why did you make this deal 1234. >> well, i think number one, the -- just getting this behind us and settling is a good deal we have a terrific plan in front of us, we unveiled a transformational plan a couple of weeks ago in investor day and all eyes forward focused on executing that for shareholders. i had a hadchance to talk to th elliott board nominees they're great, they each bring unique skills will bring something to the board. we have pierre from chevron, former cfo, he'll make a great addition to the board. we have seven board members exiting on the 1st i want to say thanks to them as well. >> you talked with david kush

and the others put forth by elliott. they were honest saying you should be fired. did you say wait a second why do you think i shouldn't be running the airline? >> i'm focused on southwest airlines and executing i did have a chance to talk to david and to our other -- to greg, our other airline folks coming on, the whole slate and they bring unique and different airline experience to our board. whether that's legacy experience, you know, david kush had a chance to start virgin america. i think that unique experience, will be helpful as we execute our plan and as we look to the longer future as well. >> thoughts on gary kelly forced out after the career he's had here at southwest. >> well, it's always been our plan to continue to refresh the board. the level of board refresh is extraordinary. the seven coming off were part of the plan we're just accelerating to november 1st. but gary and all of our members coming off the board on the 1st

are terrific they love southwest airlines love doing good for our shareholders and people. i just can't thank them enough and thank gary enough for all they've done for southwest airlines. >> the concern out there for the investors and customers, is culture has always been at the heart of southwest airlines. you're bringing in fresh voices here while there are many who say you need a fresh approach, there are people wondering if dwrou eel be able to maintain the culture that built southwest. >> part of the interview with the candidates, all six, five from elliott and pierre was about southwest airlines and what makes us special, our people, culture and they are all committed to doing good for southwest and maintaining the culture of this airline because it's unique and what sets us apart. >> i know jim has a question for you. jim, go ahead. >> hey, jim. >> it's great to talk to you, bob. the people coming on, they're

real air people. they really understand the business i am on a chevron platform right now. you've got the former cfo, pierre, will you rely on someone who's a board member cfo, will you rely on those guys people feel like you relied too much on gary kelly and didn't have a board to go to. i know you thanked them and that's terrific but you're really talking about a board that's probably the most focussed board of high level people you could possibly have what is going to be your day-to-day with this board >> jim like any board. the board's role is oversight and protecting our shareholders. again, we had a chance to talk to each of them extensively, and they all bring unique skills they understand what it means to be a board member. they are not management, they are oversight and have a duty to do good for our shareholders but obviously there will be a step here to assimilate this new

board. there's a change and we're focused on getting the board structured, bringing the board together, bringing the board together to be a team. but at the end of the day i want the board to challenge they need to challenge, hold management accountable, me accountable to producing the results that we had in our transformational investor day plan. and the variety of experience we're bringing on, we have somebody that's experienced with the faa and governmental affairs, somebody that was the president of marriott and pierre the cfo of chevron all of that is terrific experience to add to an already really good board. >> bob it's david faber at our set at the new york stock exchange. >> hey, david. >> i had a question, actually, about the earnings more about the buyback you obviously have a $2.5 billion authorization you're doing 250 million accelerated. i'm kind of curious, particularly given your expectations and hopes for the

stock price, why aren't you doing more here if, in fact, it might offer the opportunity to buy back more at a cheaper price? >> well, david we just wanted to start prudently. obviously you have to manage a number of dynamics we have our investment grade credit rating to maintain. we have work to do to talk our rating agencies and number one, get started so we're committed to the 250 million in an asr again we'll re-evaluate that as we go across 2025 here but it's good to get started >> bob, i'm curious, david brought up q3 and the results there. you beat on the top and the bottom line. improvement, but certainly not where you need to be, correct? >> no. we -- we are not producing the kinds of results that i want that our shareholders want but we're on the path. so what i love is that the changes that we made in the third quarter particularly to our revenue side, so revenue management actions, network

actions -- >> pulldown capacity. >> yes pull down capacity that's why you're seeing the trends improve. we're seeing improvement in revenues in the third quarter, continuing as a tail wind in the fourth quarter it's all about our plan, the revenue components, efficiency components, and the cost plan is about improving the results and we have 2027 targets out there the plan is intended to meet that will be roic as well as 15%. >> thoughts on the machinists rejecting the contract at boeing, do you have to bring down what you're expecting in terms of deliveries from boeing next year. >> we have planned to control what we planned to control so for 2024 we planned for about 20 deliveries, sitting on 19 right now looks like we end on the 20 we planned. >> what about next year? >> looking at 2025, the schedules through about spring

break anticipated a modest strike on boeing's part. it's really uncertain and fluid right now. so if the strike continues we'll continue to replan 2025. but we have a lot of flexibility in our fleet that we can deal with this it's just too early to tell the impacts but no nothing better for southwest airlines than for boeing to settle the strike, get back to the rate and deliver aircraft >> bob jordan ceo of southwest airlines down here at their headquarters. back to you. >> appreciate that, phil, very much good look at southwest robert was with phil on american where we did get some healthy numbers on revenue per available. >> i think it's good we had amazing numbers from united we had pretty good numbers from de delta. the airline and travel are halcyon. which is why it is so so

important that boeing get a deal with the machinists that the man is there, they have to get back in action. this is a national treasure. and i think that just being nickel and diming -- when you have this kind of demand from the airlines this is when you need to come to the table get a deal, get the equity offering done and go back to work. >> meantime, cooperate up six sequence rsequentially after american you know, carl you do wonder if boeing keeps coming up in what they're willing to offer obviously that gets passed along in the price of the plane which gets passed along in ticket prices one would assume. >> which luckily for most americans are negative year on year resumption in air fares would not help the cpi or the cpi basket, right, jim >> yeah, look.

it's an extremely full flight you don't have enough room in the overhead bins. carl i think they can raise prices because when was the last time it was not extremely full flight for you it is just a moment where they have cut capacity. they've taken it out they can raise ticket prices it's something to watch when you're the federal reserve. >> speaking of the fed a lot of input today on the bond market flash bmis were out a couple of moments ago. manufacturing for september, 47.8 compared to forecasts with 47.5 services reading of 553 that was inline we get new home sales at the top of the hour. as we continue to process what we got yesterday claims today, 227, biggest two week drop in about three years ten year still holding be right back.

(intercom) t minus 10... (janet) so much space! that open kitchen! (tanya) ...definitely the one! (ethan) but how can you sell your house when we're stuck on a space station for months???!!! (brian) opendoor gives you the flexibility to sell and buy on your timeline. (janet) nice! (intercom) flightdeck, see you at the house warming.

♪ everybody's talking about generative a.i they're talking about large language models. most of them are not really doing what we think. you want real technology you come on this floating black fort and the person who feels most at home happens to be mike worth, who's with me, the ceo of chevron. this is the eighth wonder of the world. i've got to tell you that's something real. >> well, jim, welcome to anchor. this is the newest producing facility, the deep water gulf of mexico a lot of technology break throughs here, a lot of firsts the ingenuity of our industry on display. we're excited to show you that today and talk about the deep water gulf of mexico, which is a key part of u.s. energy security and economic competitiveness

>> and at the same time, this is an electrified facility, low carbon emission. you think about these things >> some of the lowest carbon intensity oil production in the world. we'll produce here for three decades or more. >> elon musk has said that you might be on a horse and buggy in just a few years i don't know if he's accurate about that >> the world is -- we just passed 8 billion people on the planet demand for energy continues to grow we need all types of energy. we need all solutions. evs are great for the people they work for, but there's a lot of other uses for the products we produce we can reduce emissions. we can produce affordable, reliable energy, and contribute to american economic competitiveness and energy security >> i think it's important we speak about technology, this is not shallow drilling and this is not a small facility >> we're in water that is over a mile deep before you get to the sea floor. and the field we're producing from is 35,000 feet below where

we're standing right now so, you think about it, that's as if you were cruising in a smeshl jet liner and you're looking all the way down to the surface of the earth that's how far we are above the field. >> you have a lot of people working here at all times 24/7 >> we've got 100 people on board working 24 hours a day, seven days a week, 365 days a year, working safely, taking care of the environment, and producing american energy. >> does it matter the oil is going down or it doesn't matter because you think long term? >> we first acquired the leases here in 2003 we made the discovery in 2014. we began producing oil in august of 2024. that's two decades the price of oil, two, three, four decades out is what really matters for our investments. not the price today. >> think long term, carl, david, thank you so much for giving me the chance to come out to the gulf of mexico with michael. >> jim, we can't wait to find out what your day's going to be like and what tonight's going to

bring. >> well, we're going to have an extravaganza that explains how important all this is. but i want to focus on technology i want to focus on what's possible now versus what used to be possible in the old days where you could have, as david knows, a straw and hit oil >> not anymore it's incredible, as you point out. they can make two things connect at 35,000 feet down somehow. i don't even know how it gets done to your point, jim, we spent a lot of time, as we should, talking about generative a.i. because these advances are going to be earth changing, life changing that said, this technology is incredible as well >> thank you thank you for recognizing there's somebody else -- david, you always bring up jensen long and nvidia thank you for not focusing on that and focusing on chevron >> and i didn't show any

pictures of me in guyana walking the platform all safetied up by the way. oh, there i am yeah >> jim's not wearing any safety uniform. >> you don't have on the suit, the hat, nothing you didn't go through the helicopter training. i mean, come on. >> you know, david, i have never felt more safety conscious than i've been on this rig. maybe you were in some ways. maybe, david, you were -- you didn't man up, and that's why you wore that outfit >> there i am jumping in the water. you're lucky you didn't have to do that helicopter training. i'll tell you. >> safety first, carl. >> you know, jim >> there we go he's got his hat on finally. >> i don't know how you do it. get up to speed from the middle of the ocean we look forward to "mad money" tonight, 6:00 p.m. eastern time. >> you know i hate sleep it's about hating sleep. >> so, we unwind opening losses, s&p 5810 don't go anywhere.

we design them, we build them. and one day, we have to let them soar. ♪ i'm always coming home ♪

♪ good thursday morning. welcome to another hour of "squawk on the street. i'm sara eisen with david faber, live as always stocks are coming back a little after the tech led sell off yesterday. s&p is up .25% consumer discretionary is in the lead thank you tesla. but tech is rebounding a little bit. that's why the nasdaq comp is up a little more than half a percent. besides tesla, it's nvidia, t-mobile, meta, and amazon treasury yields are stabilizing a little bit as well 10-year yield 4.22%. we are seeing buying today with yields hanging around these 4.2 levels on the 10-year, carl. >> got new home sells. let's get to rick.

>> yes, like all the other data points this morning, a little bit better we've seen yields moving up, testing yesterday's highs. new home sales for september better than expected at 738,000, seasonally adjusted, analyzed units. that well puts it very close to the highest levels just since july when we were slightly over 750,000. what is interesting here is last month was downgraded from 716 to 709,000, which makes it, of course, the weakest level going back to june now, what's important here is remember, this is september data mid-september, we saw the fed cut 50 we saw a little bit of optimism with rates it didn't last long. we know that following these data points, rates have gone up. most likely new home sales going to take a bit of a ding, next time we look at it, especially considering interest rate movements that are associated with lending on 30-year fixed. for more color on new home

sales, let's go to diana >> i want to dig deeper into the mortgage numbers the 30-year fixed started september at 6.4% then dropped to 6.11 in the first couple of weeks of the month in anticipation of the fed cut, they started to move higher. you have mixed months of rates coming down at the beginning and expectation providers that they're going to come down even further and them shooting back the other direction unexpectedly this number on new home sales is based on signed contracts. so, it's people out shopping during the month of september, and their expectation, again, is that they're going to be looking at lower rates that may be part of the bump on existing homes, we're also seeing reports that they saw pending home sales coming up in september as well. i want to note price the price was basically flat, up just .05% to $426,300. that's the median price of a new home sold in september the builders though said, the

margins were difficult they said because they had to offer more incentives so, those are the incentives that are cutting into builder margins but again keeping that cost down. >> diana, thank you very much for the deep dive on housing as mentioned, stocks are stabilizing a little bit here after that big drop, more than 1.5% for the nasdaq. worries about higher rates, maybe election angst, earnings misses or corrections. jobless claims today again come in benign. the four week moving average of jobless claims is 238,000 for the week, up from the previous average of 236 but, you know, claims are still low and they're not suggesting any kind of deterioration in the job market or layoffs across the board. it's also -- they might have even been lower if we didn't have the hurricane impact. we've had four big hurricanes since august, which is distorted. if you're looking for a signal of pain in the labor market or

increasing weakness, you're just not really seeing that in the week-to-week layoff numbers reflected in the initial jobless claim. what are we getting from the beige book we know this is important. it's the anecdotal data that comes from all the different districts around the fed and i think maybe it played a role in the last rate cut, which was 50 basis points because it has been more pessimistic and down beat than some of the other macro data what we got from the beige book this time is a lot of election impact, david. >> i read it now, yes. >> more than 10 -- i think almost 15 references to election uncertainty. i just picked some for you here's from boston contact saw risk to the overall business climate from uncertainty surrounding, what else, the presidential election. in new york, many contacts reported hesitancy in decision making due to heightened uncertainty surrounding a presidential election. in richmond, a textile manufacturer expected tepid demand because customers were

bu buying -- several contacts noted that some producers were holding off on orders because of uncertainly unrelated to the coming presidential election >> the original sale came from pepsi when people said people are holding off purchasing snacks i had a question and we had bastion also discussing it. fair point it's clearly impacting certain people's and certain companies' plans. >> this was widespread across the u.s. and across different industries what i would say overall is economic activity was flat in beige book it didn't show the pickup we necessarily see in the macro data that's been pushing yields higher and getting people more optimistic i think q3 growth next week is going to be a big number as far as the commentary from companies, what they're seeing in the economy, pretty mixed listen to the ups ceo.

>> in the third quarter, we faced a macro environment that was slightly worse than we expected in the u.s., online sales slowed, and manufacturing activity was lower than we anticipated. this slowdown in manufacturing activity was also true outside of the u.s as we continue to see lower industrial production weigh on volume >> so, we know the manufacturing sector of the economy has been weaker we saw that in fedex results, ups results. you just heard it from carol tome harley-davidson is also impacted we have worked diligently through the quarter to mitigate the impact of high interest rates, macroeconomic and political uncertainty, that continue to put pressure on our industry and customers not great either from o'reilly automotive, which is interesting in light of the tesla strong results. when it comes to reports we

faced broad based consumer pressures and a soft demand environment on both the professional and diy environment. and honey well ceo called it a challenging environment. just a little bit of color and less optimism than, again, what we're seeing in some of these real numbers the jobs report is going to be really important coming up because it'll be the first data point in october and we'll see if this sort of acceleration in the data continues that we've seen in september. >> all right let's turn to tesla. shares are surging, of course, after the company -- after the bell yesterday reported better than expected profit let's get the take from two analysts who are on different sides of this. collin -- wells fargo analyst joins us he has an underweight. tom also joins us, rbc caput tal markets analyst. he raised his target as well, and it's far higher than 249

guys, collin, let me start with you. is it getting a little harder to defend a negative view given that quarter >> i mean, the quarter alone was a good quarter i'll give them credit for that energy gen was stronger. it was a 12 cent beat versus consensus. 7 came from full sale driving release, which is a -- prior deliveries and prior services they gave on software. i think that should be considered one time in nature. and most of the rest was actually stronger ev credits i'll give them credit, the comps were very good my concern has been the price cuts and volume. year to date volume is down 2% and pricing is down 3% in the quarter versus 5% in q4. i think the core auto business -- >> you're not a believer in musk's predictions for next year in terms of the increase in sales? >> i am not. i think if you look at the lower price model is probably going to c

can cannibalize some of model three and y. demand is sinking on those models even with the price cuts. so, i think demand is going to definitely not fall short of the 20 to 30%. i think there's a risk volumes could be down next year. so, yeah, i don't believe in it. i also think we have to focus on about margins. a lower priced model is going to be hard to make that profitably. you're already getting something like 3 to $5,000 in financing promos on new vehicles like the model 3. doesn't leave a lot of cushion to lower the price of the model 2.5 or whatever people are calling it >> tom, i would assume you have a different view and obviously an important point here is that margins did come in well above what many anticipated, including, i believe, yourself >> i agree with a lot of what collin said, believe it or not the 17.1% gross margin x credit was a strong beat. i do think if you take out those fsd deferred revenue piece, you

still come out with a very strong gross profit margin x credit and that comes with all those price cutting. so, exactly that is why we actually think that the automotive performance was actually pretty healthy. they were able to do it with substantial price cutting. look at the other oems, legacy oems what's going to happen to their margins with price cutting i think the setup for next year on growth, i agree with collin it's not going to be 20%, 30%, that maybe elon is saying. there is growth rate and if they can do it with the margin strength that they have, now folks can stop thinking about the automotive piece and margins and start looking at what really should drive the stock, right, which is non-automotive things, energy storage, autonomy, potentially optimist but now i think it's more of the distraction that was this automotive piece now folks can turn their attention to things that

actually drive the stock price and the market capital position to where it is >> collin, is there election risk around tesla stock? is that part of the thesis at all? >> well, one, i think, you know, just on the last points, i think we have -- the stocks are forward looking. so, can the level of cost performance continue they cut price about $1,500, can they really take another $1,500 sequentially i don't think so as we go into q4, not only do you have the sfd coming down, but you still have pricing pressure i think forward looking we'll see the auto business under pressure we just had the robo taxi event. there's still challenges they really aren't addressing some of the issues there can they do this with vision only will the economics work? will they get regulatory approval and realize that robo taxi was done in a hollywood studio because the vehicles aren't approved to be tested on public roads yet there's a lot of challenges

ahead. i think you look at companies lik like waymo, they're doing a lot better >> what about the election >> oh, the election, i think there is definitely a risk here for tesla. i think they get tons of i.r.a. credits. i think if trump wins, those are likely going to go away and a lot of that tail wind goes away. >> i think despite elon's support for trump, i think it's a big risk for tesla as a company. >> interesting tom, let's get to you for, sort of, the last words here. what did they do then to improve margins so much? was it simply cutting costs in a very effective way >> yeah, i think it's definitely cost control we also know there were some logistics issues, some freight that was going on. but some of this stuff is not necessarily unsustainable. i just note, like, regulatory credits, it's not something you should x out forever they're going to get more regulatory credits next year in terms of the -- just a quick comment on the i.r.a i don't think trump can just make that go away. that's pretty much law it's also the battery production is in a lot of red states.

so, i think that's here to say it should benefit them, especially producing batteries and i would just note really quickly on robo taxis, this is more of a tectonic thing that a rising tide lifts all boats. it's more about this will happen in the future. my valuation only has them reaching 9% share of it. it's still a substantial profit center for them. and the evidence, we can see what sfd has done on the roads only time will tell if that will really work longer term. this is decades away we just think they'll be an important player in this market. >> well, while you guys have been talking, the stock is up even more, 16.5% is that justified? is that move you're looking at right there justified on these numbers? >> i actually think it is, right? the stock sold off on 10.5% after robo taxi day. i know that was underwhelming, but it was such a sharp pullback we get that gain back up because

a lot of folks thought that oh this car business isn't real i will a car business. it's just backed on regulatory credits. now we're seeing it's not. so, a huge bear thesis has kind of been removed. i'm not surprised at all >> okay. guys appreciate it thank you. collin and tom as we head to break, here's our roadmap for the rest of the hour service now riding the a.i. boom and the ceo joins us with his outlook. plus striking boeing workers are walking away from the table. shares are falling on the news they did not ratify that latest deal that many thought they had come to with their employer. and a unique look at how voters view trump and harris when it comes to the economy, as "squawk on the street" continues on this thursday don't go away. you can sell your policy - even a term policy - for an immediate cash payment. call coventry direct to learn more. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. our

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big news across the airline space this morning we'll begin with boeing and get to phillebeau with those details, plus more out of american and southwest today, all thanks to phil morning, phil. >> carl, let's start off with boeing, as you mentioned the stock under pressure after the machinist union once again rejected a contract offer from the company. 64% of the machinists -- there are about 33,000 of them, mostly in the seattle area -- 64% rejected the latest offer. only 36% voted for it. so, the strike now moves into its 41st day a reminder, as you take a look at shares of boeing over the last year compared to the s&p

500, this stock is estimated -- this strike is estimated to be costing the company about $1 billion a month let's see how quickly the two sides can get together, and let's see if there's another tentative proposal perhaps in the next week or two that goes before the membership. again, shifting gears to american airlines, reporting earnings for the third quarter before the bell, beating on the top and bottom line, earning 30 cents a share, 14 cents better than what the street was expecting, and revenue coming in better than expected and let's talk about southwest it also beat the street on the top and the bottom line, earning 15 cents the street was expecting flat. so, that was the good news in terms of the earning, continued improvement in terms of the operations but the big news at southwest is that they have reached an agreement with elliott management regarding board representation at southwest airlines so, here's what's changing five new directors, five who were put up by elliott, they're going to be joining the 12-member southwest board. there is also a new independent

chair who is going to be named to the board or is joining the board starting next week gary kelly, the executive chairman, former ceo, he retires earlier than planned all of this kicks in a week from friday, november 1st so, that's when the new board takes place. here's bob jordan, ceo of southwest, talking about the changes and how he feels about them >> i had a chance to talk to and interview all of the elliott board nominees, and they're really good folks that are going to make great additions to the board. each bring unique skills we've got pierre coming from chevron, former cfo. he'll make a great addition to our board. >> that's bob jordan talking about the reconstituted board. and, again, that starts next week david? >> phil, it's interesting because you do have a number of former ceos now who are going to be on this board it is going to be a very -- you asked this question. it's going to be a very different -- culture is not the right word for a board

but very different group really in terms of their experience and their expectations potentially of what mr. jordan is going to be doing in terms of executing his plan >> bob jordan has laid out a number of changes for american airlines, assigned seating, premium seating, red eye flights. he knows there's more that has to happen. this board is going to push him. i asked him, elliott said point blank, bob jordan should be fired. now they've got five of their directors there. and yes bob jordan talked with them and he believes he can work with them and they will be good for southwest. but make no mistake. they come into this position thinking that southwest is underperforming, dramatically underperforming. so, they're going to push it quite a bit. >> yeah. and we'll be watching it closely. boeing, of course, as well i mentioned earlier for some reason i hasn't checked the wire -- you reminded me. the registration statement for the potential large equity offering has been deemed effective. they could hit the market at any

point. still unclear, though, when they're going to choose to do so, isn't it >> yeah. we talked to kelly -- yesterday. he indicated they would prefer to have an agreement with the machinists in place. that gives you some certainty on your cost before they go ahead and file and remember they also took out a $10 billion credit line. so, they've got a few levers they can still pull before they have to say, look, we're at a point where we want to do some type of a 10 or $15 billion filing, whether it's an equity raise alone or a convertible as well so, they have a little bit of time here. david, i would not be surprised -- and i heard you guys talking about this earlier. what's it going to take to get a deal done? i would not be surprised if you see rather quickly boeing going back to the machinists and saying, you know what? we're going to sweeten the offer for the signing bonus. it's a cost effective way for boeing to say, we're going to give you a little bit more here. it'll cost us in the near term but it certainly won't cost as much as it would be if they were to say, look, we're going to

dramatically go up to 39 or 40%. that's a bigger ask, if you will, of boeing. and they certainly are not going to be doing the pension. >> all right, phil thank you for the update on all fronts. boeing down 1.5% as we head to break, check out the biggest gainers on the s&p 500 this morning tesla having a great day, up 16.5%. not as good as monlina health care tesla is helping the consumer discretionary sector of the s&p and nasdaq overall rebound a little bit from yesterday's selloff. the ceo of servicenow, phil mcdermott, is going to join us next servicenow up almo7%

shares of ser vicenow, a bea and a raise. the company raising annual subscription forecasts, leaning into generative a.i. bill mcdermott joins us now exclusively. welcome back, bill good to have you

>> great to be with you, sara. thank you. >> so, 23.5% growth year over year above consensus what is driving it and what is separating it from the rest of the software industry >> well, it's really wonderful to have a company that consistently beats and raises. i'm not too aware of any other that's doing that right now. and it's really about innovation we went on a gen a.i. movement in the company several years ago, teaming up with a great company like nvidia, really to co-develop native a.i. agents on the servicenow platform. and if you think about nvidia, new age, and blueprints with servicenow on the platform, we're taking on the world's biggest challenges one would be security vulnerability as an example. but now we have 44 customers that are investing millions and millions in our gen a.i. capability and great companies like london

stock exchange they're achieving amazing business results as a result of our gen a.i. technology on our platform it's really been all about innovation and elite level execution. >> can you quantify at all to what extent you are benefitting at this time from the gen a.i. adoption >> sure. i mean, look at the results that our customers are getting. you know, bt, for example, is improving agent responsiveness by 55% and meantime to resolution in fixing problems by 33% the london stock exchange took 15 siloed systems across 14 lines of business. and now instead of solving problems in 90 minutes, they're doing it in less than five seconds. same is true with trimedix the amazing developer productivity they're realizing for citizen developers on our

platform so, -- just took a cyber secury service to improve shop floor operations zoom is integrating their a.i. with our a.i. to essentially not only summarize what happens in zoom meetings but issue actions to all the necessary people in the company. so, what's happening is the movement is in full flight, the referencebility of what we're doing has taken hold and now everybody wants in on servicenow, including the partners you know, i want to tell you something big, sara. this is a big story. we introduced something called work flow data fabric yesterday. here's the situation we invented the world's fastest database, 27 times faster than any other one, at analytics. but now we can take a look at every data source in a company, structured and unstructured data alike, and marry that with the work flow automation now we're solving not only the automation of work and how it flows but also data and how it

flows. and this is going to be a break through. and big kudos to cognizant and rah i have for being first mover in believing in this because he thinks we can take data and bypass systems altogether and go right to servicenow to change the world. and so do i. >> how does that change your t.a.m., your total addressable market >> that's a great question, sara it doubles it. so, we go from a 250 billion addressable market to a 500 billion addressable market on one swift strategic move and we see the future. the future is all about platforms that matter. there will be mass consolidation of point solutions that don't. and everything is going to be a.i. driven. and we see an unbelievable future in the front office we're winning in the front office everywhere we go because we can connect the front office consumer to the mid-office operations and the back office systems that it takes to give a customer an unbelievable experience

so, whether it's front office, it's work flow, data, platform, or it's gen a.i., servicenow is on top of the pack >> all right, bill you are the greatest salesman. we know that you've made the case here. i want to come to you on macro a little bit you know, you always get questions on the conference call as well. you're obviously telling our viewers how your various products are being used in the enterprise what's your sense, though, overall in terms of generative a.i. and how it is at this point and what's coming in terms of how the enterprise -- you know, how it's going to be penetrating the enterprise in a productive way. >> everything is going to be a.i. driven. in the next two years, every single enterprise in every industry will reinvent every work flow around every persona or a job in a company. so, the people that are deniers on a.i., they're going to lose big. so, we leaned into it more than

five years ago building gen a.i., large language models, and domain specific multi-modal models on our platform, which just simply means when you run an a.i. use case on servicenow, it's domain specific, which means we built it into the platform it has zero latency, which means it's rocket fast, and it's totally secure but best of all, it's really cheap to run and that's been the missing element in the enterprise. no one's brought enterprise gen a.i. to the customer in an affordable way where they can literally -- forget about offshoring labor -- take all the labor arbitrage and do it right here, whether it's in the united states or europe, somewhere else in the world, because the platform can now do the work and that's been something that's missing and we filled that gap one other thing. you have to integrate with everybody else's language models so, there's great companies out

there like microsoft and google and amazon and meta, and they have great models. we integrate with all of them seamlessly so, bring your own model, work with other great companies like that but in the end, as jensen wong would say at nvidia, servicenow is the a.i. operating system for the enterprise this will be the central nervous system for how best-run businesses run >> how is your strategy around a.i. agents, which is what everyone's talking about, different differentiated from a microsoft or a salesforce, which are in a little bit of a beef right now about agents >> great question. if you think about the problem in the enterprise, the 20th century enterprise is a state of chaos. there is 50 years of legacy systems that were built to serve each department, sales, finance, hr, accounting, et cetera. what we did is we built a platform that spans all of those departments where you could

integrate business operations seamlessly with a great user experience so, today, 17 different user experiences per employee eating up 33% of their productivity the enterprise is a disaster we took one clean pane of glass, put it above the mess, and made everything productive. let's go to gen a.i. agents. people will put out their gen a.i. agents departmentally because they build departmental solutions, which is actually going to cause even more chaos it's, like, hitting a hornet's nest with a bat. these agents are going to run wild with servicenow, not only do we have our own agents, but we integrate with everybody else's agents so humans and a.i. agents can be in a work flow working together and we control the governance, the compliance, and the risk of managing those agents so things don't get out of control that is another competitive advantage for servicenow

>> there's that upbeat management commentary that all the analysts are writing about today. bill, we certainly appreciate the time on the quarter and on the stock move, which is now up more than 7% thank you. meantime, dow is down 75 let's get a news update. >> hey, carl good morning five former wwe ring boys are suing vince mcman, his wife, the wrestling league, and its owner, over claims they allowed abuse to boys who acting as ring side announcer. the accused parties have not commented on the suit. phillips died in 2012. south korea's defense ministry says some 12,000 north korean troops will be sent to russia the new estimate was released to nbc news today and it comes as the u.s. has warned that any north korean troops that are deployed against ukraine are, quote, fair game. and new york city is rolling out the seafoam green carpet for

the wnba's newest champion, the new york liberty the team is traveling to city hall right now, where there will be a ceremony honoring their accomplishment it's the first ticker tape parade to honor a local new york city team since 2012 that's when the giants last won the super bowl, sara i'll send it back to you >> that's going to come right down our way right by the exchange apple shares lower on the week after another warning on these iphone orders. 'ltabo what to do with the shares here when we're back in a moment. i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. 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. he gets it. yeah. (vo) time to move? make it easy with opendoor. sell your home in any season, for any reason. [vampire hiss] (vo) start your move at opendoor.com.

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intelligence could be the boost that's needed to increase demand mark, always good to talk to you. what do you think we're going to get on monday? >> i think we're going to get, in terms of the apple intelligence that comes out before the earnings report, it's a slow roll probably we get a few features on apple intelligence, summaries. it's really just a very small intro. so, it's a taste of what's to come you know, i think it gets much more meaningful with ios 18.2, which comes a few weeks later, where you start to actually integrate with chatgpt you start to build in visual intelligence, which gives you that ability to use your, kind of, visual camera capabilities and a.i. and to do some image, kind of, generation, things that get to be much more full featured there's more to come after that. i think that, you know, what is going to happen is that this has

been one of the key selling points, and it hasn't been there. as it rolls out, that should be helpful for iphone sales >> so, is it your general view that the 16 is, kind of, a bridge to the 17 and should we try to tune out this supply noise about the 16 in the meantime? >> i believe so. i mean, we're certainly modeling that we're modeling that the september quarter iphone revenues are going to be up 3% the idc has said they see september quarter unit sales for iphone up 3.5% apple is guided for revenue growth near the june level, so around 5%. we're consistent with that they haven't warned the consensus is consistent. i think the september quarter is fine i think the guide for the december quarter is going to be interesting. but they won't really know what a.i. is doing yet because it won't really be fully deployed so, i think you have to fasten your seat belt and have some faith that this thing will be

interesting, as you look later into next calendar year. and then iphone 17, the features should be very fully deployed. and that's when you think you start to get the double digit growth that looks like a super cycle, as people have seen what the capabilities are of a.i. and they want to get it. so, that's what we're banking on in our model >> some have tried to use that phrase to describe the current cycle that we're in. but we'll see if they jump the gun or not we'll see, hopefully talk next week too thanks so much >> great, thank you. honeywell shares under pressure today, reporting a decline in net income and cutting four-year revenue forecast challenging operating environment in the release more on another earnings name dragging down the w.do ibm, including commentary from the ceo. don't go anywhere.

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data on new home sales came in strong this morning and that's helping to put a bid to housing related stocks we're going to chat with a housing expert to see if the trends are looking up or down. tune in to our market navigator segment later on today, "power lunch," 2:00 p.m. eastern time the type a cpa. the bootstrapper. the bootmaker. yeehaw [narrator] but many do have something in common. we all trust schwab with our wealth. [narrator] thanks to our award-winning service, low costs and transparent advice. every day, over a million multi-millionares trust schwab with more than two trillion dollars of their wealth. tamra, izzy and emma... they respond to emails with phone-calls... and they don't "circle back" they're already there. they wear business sneakers and pad their keyboards with something that makes their clickety- clacking... clickety-clackier.

but no one loves logistics as much as they do. you need tamra, izzy and emma. they need a retirement plan. work with principal so we can help you with a retirement and benefits plan that's right for your team. let our expertise round out yours. keep your eye on mcdonald's today. we are getting some news from u.s. foods to their u.s. customers saying that taylor farms, which is a private supplier, is conducting a recall of onions. the reason for the recall, u.s. foods points out, is due to potential e. coli contamination. of course the food safety concern that bedevilled mcdonald's earlier in the week a similar story regarding cisco. we'll see to what degree this provides mcdonald's shares some relief that this was in fact an ingredient issue and not something, say, in the kitchen

process. >> and an outside supplier that was distributed through these u.s. foods and ciscos. scott gottlieb, former fda commissioner, tweeted the recall of the slivered onions and said it is strong work. it appears to have happened very quickly. >> took the narrative down very fast >> got the source of the issue look at ibm, a company swinging to a loss after a one-time pension settlement charge tied to agreement with prudential revenue came in slightly below expectations the company forecast similar revenue growth in the current quarter. the earnings were a good story it was the revenue, slight miss, which ibm i think is being punished for right now arvin christian, the ceo, i did speak with him he's how he broke down the quarter. he said the software story was really good across the board the a.i. story, where they added a billion dollars in revenues over the quarter and a cash flow

and earnings margin story also very good. he recognized in consulting we have weakness, and he did say this is not a one-quarter story. it will take some time to recover. the infrastructure, which is the other piece of the business, where the revenues tell a little bit short, he said he expects that to recover soon by mid next year it has to do with mainframe cycles on consulting, he said, here's what's driving it. with all the uncertainty around geopolitical issues, political uncertainty because of the election, and rates staying higher longer, all of that causes cfos to squeeze third party discretionary spending he said, we don't see it as a long-term issue. it really depends on that confidence factor that cfos have why is it impacting consulting that's the, sort of, more discretionary part of the business, versus software, where a.i. has been driving and also

red hat, a lot of growth i asked him for an example of how they're seeing that enterprise a.i. being put to use. he gave me the u.s. open in wimbledon, which ibm is a big partner. and basically their gen a.i. generated match summaries much more than you would get from commentators and the proof point is it generated overall 20% more engagement in the app and the website because people were able to interact with more data and analytics and actual matches so, i thought that was interesting. ibm is a very global company we talked about the different regions and what he's seeing as far as enterprise spend and macro. japan, still a hot spot. china, still a soft spot europe, interestingly, has been remarkably resilient there was growth there in the quarter. and in the u.s., other than the consulting business, it has been strong overall a lot of that obviously driven by a.i. and just this continued

strength in technology spending over gdp growth, which continues to be better but the stock had run up, right? it had a great year. it has had a great year. so -- >> highest multiple it's had in quite some time. you can see that consulting obviously when they talk about revenue growth being talk about the revenue growth being below the low single digit range, which i believe is previous what they indicated, i believe that's most of the hit that's taken place here, sarah. >> right they've changed the structure of this business. it is software, consulting in terms of the revenue contributions. in 2018, 20% of the business was software now it's over 40%. kris kr >> we're a long way from the days of pc mainframes and when

that drove the business. raymond james' ceo is going to join us to break down results. after the break, a survey showing a clear lead for one candidate when it comes to americans' views on the economy, different view when it ces tomo honesty and leadership we'll talk about that in a couple of moments. ...the worst call in the history of this sport. he should never be allowed to ref... (♪♪) ♪ i tell ya... ♪ (♪♪) ♪ how much i love you, love you, love you ♪ (♪♪) ♪ i believe. ♪ (♪♪) ♪ i believe. ♪ ♪ i believe in you. ♪

it's our son, he is always up in our business. it's the verizon 5g home internet i got us. oh... he used to be a competitive gamer but with the higher lag, he can't keep up with his squad. so now we're his “squad”. what are kevin's plans for the fall? he's going to college. out of state, yeah. -yeah in the fall. change of plans, i've decided to stay local. oh excellent! oh that's great! why would i ever leave this? -aw! we will do anything to get him gaming again. you and kevin need to fix this internet situation. heard my name! i swear to god, kevin! -we told you to wait in the car.

everyone in my old squad has xfinity. less lag, better gaming! i'm gonna need to charge you for three people. cnbc is out with its latest all america survey focused on the election one candidate has a clear lead, at least to a clear view of the economy. >> judged by just americans' views and their answers on the economy, former president trump should be running away with this race, but our economic survey showing there's more than just the economy at play here nationally and in our focus on the battleground which keeps harris in the race and makes it a tight race as we head into the final days we asked who would be better off officially a little bit better for harris in the seven battleground states but not all that much boetter.

now look at the key economic issues trump has a 13-point lead among those voters who say inflation is the biggest concern 13 about the economy overall he's plus five on addressing the needs of the middle class, though harris is plus three in the battleground states. protecting democracy, the second-tier issues harris showing better, plus nine. crime and safety, big lead for trump there. health care, plus eight then immigration plus 35, taxes plus 22 and harris has this big lead on the abortion. what keeps her in the race there are some personal issues that keep harris in the race on the state of the economy,

just 26% say it's excellent or good 7 72% say it's fair or poor. 46-48 nationally, 47-48 in the battleground states. that is within the 3.1% margin of error it's a dead heat. >> we spend so much time talking about stocks and the record number of millionaires in 401(k) fidelity accounts. do you think that's weighed in on the race at all >> i don't think so. 52% of people own stocks, so it does affect them i don't know they necessarily feel that because a lot of that stuff is going to be ira or pension plans. i also think there's a sense that among the millionaires and billionaires, hey, they're doing okay under biden/harris but i think they feel like they can do

a lot better with tax cuts trump has promised. >> interesting information tune into our special coverage at 7:00 p.m. eastern time on november 5th. our live market coverage including coverage of the response to afternoonings from te -- earnings from tesla of 17% elon musk is yet to get that stock award that was reratified by stockholders.

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