than expected guidance those shares up just about 6.5%. becky, back to you >> frank, thank you very much. let's get one more check on the markets as we head toward the opening bell you can see the dow futures up by about 210 points. s&p futures up by 27 the nasdaq, up by 87 we've seen yields pick up as well that does it for us for the week make sure you join us right back here on monday right now, it's time for "squawk on the street. have a great weekend ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at post nine of the new york stock exchange david faber has the morning off. stocks do try to claw back some of thursday's losses worst day for the nas since september. the jobs number is weird, 12,000, but plenty of noise. unemployment stays at 4.1% our road map begins with big tech and a.i., though. amazon pledging its investments will pay off, and tim cook saying apple intelligence is "a compelling upgrade reason. job growth, as we said,

flattens in october. unemployment stays stable, a sign the labor market may be solid. big oil with an exxon profit beat and chevron's mike wirth will join us in a few minutes to talk about their quarter let's start with apple, posting a beat, thanks to stronger demand for iphones as the company ramps up its a.i. strategy services revenue hits a new milestone of $25 billion, but total sales guidance for holiday quarter does come in just shy of consensus, jim, and everyone is talking about the services revenue miss and the margin that falls out from that. >> well, look, i spent some time talking with tim last night, and i feel that the direction of the chatter is wrong i think that people have to realize that apple's going to be far more of a software issuance company, maybe get a little bit away from the hardware were services great or bad i think tim would emphasize, look, it's $100 billion.

europe, very strong, by the way. the idea that china is supposed to be strong, we got to lose that that's silly but the most disappointing thing, carl, was that the sell-side analysts were sticking with this 6 to 7% forecast there was no way that was going to be good i came out here every day and said, that's not going to be any good the buy side knew it isn't any good, but it was a little disabling because you, on the one hand, you have this guidance that's low to mid-single digits. >> for the december quarter. >> right but on the other hand, you had tim cook say some things about the excitement, about -- i've never heard tim be more excited about a phone release before, because there's just a lot of word of mouth building said, please don't concentrate on the lead times, they tell you nothing. i think that we're in for an elongated software cycle that is going to surprise people and i think that if you want the expectations finally to get to where they have that they can beat them, that's fine

there will be people who say, jim, how can you give something like 2 to 3% growth a 30 pe? and i come back and say, we have to start thinking about one, services, but two, india india's being left out he's got -- tim's got for india by india, and what's going to happen is india is going to go like this, and one day we'll come in and it will have inflected against china, and we'll be saying, why are we still focused on china this is going to happen sooner rather than later, so what is my feeling? own it, don't trade it the real disappointment were the analysts, not tim. >> right >> you couldn't do that number you just don't have the horses >> your point about china, increasingly, is that the news is getting washed out in a sense. cover of the "ft" is about all these multinationals, ab inbev and others saying the stimulus is not moving the needle

>> it's the denouement of them they're not paying for anything expensive. you still don't even have good numbers. what you're having here is this conundrum of people who are on the sell-side doing brokerage research continue to hope that china's going to come back and -- because of the so-called stimulus, and there are even some data from china -- >> i saw you mentioned that. >> carl, there's a company i'm dealing with right now, i'm not going to mention their name, but they're telling me, look, jim, you got to stop measuring companies by earnings per share and i come back and say, bill parcells, bill belichick, they may say it matters if you win more or lose more, but how about if you rig the numbers to win? why do we trust china? they wanted to stay in the msci as a growing concern, which then

brings in more money i think that the numbers from china are suspect, and i think that we act as if somehow the chinese communist party is putting out some real solid numbers, like they know. now, there are people like dave tepper, whom i truly respect, who were right about alibaba, but why did alibaba go up? was it because of consumption? consumption of the stock, because you can rig anything it's one thing we're certain -- well, no, other than when michael corleone -- the second thing we're certain is that you can rig markets. why don't people say that? why can't we admit that the markets are rigged and the numbers are rigged >> it's a big part of the apple story, but bottom line, this quarter, is it a push on apple >> i thought that europe was surprisingly strong. bookings, europe, surprisingly strong it is the story. it's the pigs, by the way. portugal, ireland. italy's getting some good numbers. i really like what's -- greece i like what's happening in

southern europe. northern europe's still a little conflicted because of russian gas, natural gas, but i think the -- the story that's coming out that no one's talking about is that europe with a major comeback just a major comeback. and people have to realize, stop focusing on germany, which has problems with tariffs. start thinking about the rest of europe as being a growth engine in the world 800 million people, and people forget there was one time in our distance before we all decided that china was the be-all and end-all that selling diapers and prell in europe, wow we're going to be talking about europe for a long time because amazon has such great europe numbers. >> that will be a big number >> india and europe, carl. we've got to change the narrative. we can stick with the china narrative, but i tell you, i'm like vinegar joe stillwell he lost china. i'm losing china >> on a related note regarding mega cap tech, of course, amazon is up premarket sharply. the company does have a quarterly beat, helped in part

by demand for cloud and strength in e-commerce. ramps up its investments in a.i., plans to spend tens of billions on capex. also, this 19% jump in ad sales, jim, and their commentary about aws a.i. growing 3x what aws was doing at this stage. >> what's hilarious is that if you spend a fortune, but then you make 2x fortune, people love it nobody cared about capex when it came to amazon i'm going to give you an anecdotal thing about capex and nvidia they're happy with how much nvidia they have alexa. i don't know if you guys have alexa, but alexa is like a fifth grader the most stupid person in the room and the new alexa is -- you don't have to say alexa, alexa, alexa. will understand your inflection, your voice, and it's no longer like, alexa, please play beethoven's sixth symphony and suddenly it's mozart's 45th.

idiots i'm using this as a metaphor for what's happening with blackwell. you are going to be so impressed both with inference and the training they have they have their own chips that are doing very well, but the head count has fallen for second straight year. that's -- these people cost 200 or $300,000. these are the little things going on prime days extraordinary. they worked. remember how we were worried about prime days you speak with them, by the way, they're so smart i bought the heaters 2 for $75 there's so much more coming. their knowledge of what they do is so spectacular that you come away and say, thank heavens for amazon they are the real inflation-fighter in this country. >> we're going to talk about what it does to the rest of retail stocks on days where it beats well >> i would be careful with everything else. i wanted them to advertise why don't you advertise for, like, the heaters during the thursday night game? which, by the way, because of garrett wilson, was pretty good. they don't have enough room. if we had enough room to advertise, we would.

i mean, the demand for even their nfl -- i need to know what they're doing wrong, carl, because i can't find it. >> jassy, great bit of sound about the duration of datacenters as an asset. take a listen to this one. >> datacenters, for instance, are useful assets for 20 to 30 years, and so i think we've proven over time that we can drive enough operating income and free cash flow to make this a very successful return on invested capital business, and we expect the same thing will happen here with generative a.i. it is a really unusually large, maybe once in a lifetime type of opportunity, and i think our customers, the business, and our shareholders will feel good about this long-term that we're aggressively pursuing it >> this was the way to tell it microsoft didn't tell the story as well. interesting, zuckerberg didn't tell the story as well i thought he would be more, but he wasn't as much important on

the conference call. apple didn't take advantage of the fact that they don't have to -- they're a total free rider. that was a mistake by them there were a lot of mistakes on these conference calls there were no mistakes on the amazon call. and by the way, since annett ashkenazi moved over to the cfo, there are no mistakes -- >> your two favorite calls are amazon and google? >> i think that's by acclimation, they're the best. these are undefeated teams so far in the season, and i really want to point out that jassy -- i know this is going to sound soporific. jassy is regarded as a good man and a nice man who is friends with everybody that was not the case with his predecessor. that doesn't mean that his p predecessor is bad, it just means andy is like jensen huang, he comes in peace. he's a soft spoken giant i think if -- is about, like tim cook, when i asked tim, why don't you charge for the health care and he said, jim, i'm about

democratization for heaven's sake what am i going to charge for? jassy, about cutting the price so that people can have more money. >> b of a with a great stat today. on days where amazon closes up 5% or more on earnings, rest of xrt lags s&p >> well, i don't know how -- boy, am i -- when i listen to that, i say, you know what one of the great things in life is i'm not a brick and mortar manager. >> and many of the biggest laggards on that are best buy and some others. >> you can't stop it it's a juggernaut. shorter christmas is going to even help them look, they're -- no one talked about kuiper, the money-losing satellite. i found myself having a kuiper soda after the -- you know, after the conference call. >> when we come back, we'll get to chevron, earnings revenue production beating expectations. mike wirth is going to join us live first on cnbc we'll tough on exxon as well, get to intel, wayfair and talk about this jobs number

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carl, i spent some time last week, last thursday, on a platform in the gulf of mexico, and had the graciousness at one point, big mama, who runs the kitchen, thought that i was the ceo of chevron it just so happens we actually have the ceo of chevron here chevron shares are rising after third quarter results beat street estimates the return to capital is amazing, and we have mike wirth, the ceo. mike, congratulations on a very clean quarter where you're actually once again leading the industry i've been waiting -- this is what you have been doing, but no one's been talking about it. why don't you just give us the stuff of what a good quarter is made of in your industry >> well, jim and carl, good to be with you this morning the third quarter was good it was a nice earnings beat. we had strong operational and financial results. we started up some key projects in the gulf of mexico, and we returned record cash to shareholders if i click down on that a little bit, production was our highest

third quarter ever in the history of the company same is true for production in the u.s., production in the permian. project start-ups, you were out at anchor and saw the technology that's being applied there we had water flood start-ups at two other fields in the deep water gulf of mexico, which we intend to grow to 300,000 barrels a day by 2026, and we distributed over $7.5 billion to shareholders in the quarter, the highest number in the history of our company, and 2x the purse share average of our energy index peers. so, a strong quarter operationally, financially, and for shareholders >> now, mike, looks like you're taking out a lot of costs over the next couple of years, and that is directly going to go to the bottom line. >> it will go to the bottom line this is an industry where costs always matter. you have to stay very disciplined on capital you have to stay very disciplined on operating costs, and our plan is to take absolute cost out of our business at the same time as production is growing, and so unit costs really come down

we've been able to hold unit costs relatively flat for the last several years despite the inflation you've seen in the economy, but we always have to do better. so, we're looking to take 2 to $3 billion of costs out by the end of 2026, grow production significantly during that same period of time, and that should drive more value to the bottom line >> i've been thinking a lot about our time together on the platform on anchor, and reflecting on it, i realize that you genuinely believe in long lead time, long life offshore projects and even if new car sales, let's say, 20 years, are 60% ev, i think you believe the gasoline demand is still going to be strong and these are good investments. >> we allocate capital that can take decades to actually deploy, as you saw offshore, and then these assets are in service for many decades, so we've got a take a long view on supply, demand, technology, and look,

evs are a good solution for the people they work for at this point, despite last year being record ev sales, they represent about 2% of the entire u.s. auto fleet, which turns over about once every two decades. and so, we're going to see demand for gasoline continue to endure in the u.s. and to grow around the world, and i just remind people that maybe 25 to 30% of crude oil production ends up in light-duty vehicles. the balance ends up in a host of other things that are much more difficult to electrify aviation marine transportation. long-haul road transportation. off-road transportation and agriculture and mining or in petrochemicals, so the demand for our primary products is robust it grows with the global population and a global economy, and we're going to see our products in demand for many, many decades to come >> mike, you know, last couple of years, it's been hard to talk about the business without talking about capital return,

and you did give some guidance on buybacks for q4 is that story evolving in either direction for viewers? >> we've bought shares back in 16 of the last -- 17 of the last 21 years, actually, at the same time as we've grown our dividend for 37 consecutive years so, we've got a very consistent set of financial priorities, carl the first is to sustain and grow the dividend the second is to invest in future projects that grow the cash flow for shareholder distributions. the third is to maintain a very strong balance sheet, and then the fourth is to return the excess cash to shareholders, which, as i say, we've done more than three-quarters of the time over the last two decades, and so we've got a durable, robust set of financial priorities. we've got a very strong balance sheet, and it's important in our industry to maintain constancy of purpose, not only to be generation with your shareholders during the good times but also as you go through the inevitable cycles of a

commodity business our shareholders depend on us for constant returns and for disciplined and prudent management of our business in the difficult times, and i think the good companies have a track record of doing that >> yeah, mike, i've been thinking you've been an adopted californian for a long time, but you believe you moved to texas last weekend and that there were two refineries that were all-time, big, big employers in california, so i'm just trying to -- put me in the shoes of you, the back and forth you have with governor newsom about staying and keeping those refineries open, and just give me a sense of what he was offering to keep you >> well, i am in the process of personally moving to texas, and the company is moving, our headquarters, there as well after 145 years in california. not an easy decision to make, but the right one for our company. texas is -- houston is really the global epicenter of our

industry, and so lots of good reasons to be there. we've still got important assets and businesses in california, both upstream production, two large refineries that supply a significant, you know, portion of the overall demand for transportation fuels, and it's just not gasoline and diesel fuel but jet fuel to keep l.a.x. and san francisco and other airports going, and so, we're very committed to our customers there. we have had policy differences with the state of california, and they have had restrictive policy choices that hurt consumers, that discourage investment, and that drive prices up. and we've been very specific in our criticism of some of those policies and our feedback to the state that their actions are actually reducing supply we've seen an announcement of another refinery that's going to shut down in the state, and constraining supply faster than demand adjusts creates a market that tends to be more volatile, and it pushes prices up. and we have been very clear in

our communication of that, and we're advocating for a policy that balances economic prosperity, energy security, and environmental protection, and when that policy gets unbalanced, you can have unintended consequences. >> those seem to be things that i think both parties could agree on mike, one last question. i look at these numbers, and i say to myself, why do you need this hess? why do you need the battle with that fella, woods was on the first show you really need that you're crushing it >> well, look, we've got a very strong growth profile as we are today. we're growing production strongly we'll be over a million barrels in the permian next year, million barrels per day, million barrels per day in kazakhstan next year on our big projects there. we're growing the deep water gulf of mexico free cash flow, which is strong today, is going to grow at great greater than a 10% compound

annual rate over the years, so our base is strong hess is a good company, a good acquisition that will make us stronger, extend that growth in free cash flow even longer through the end of this decade and well into the next so it makes us a stronger company, but we start out with a very strong hand we're confident in our position on this arbitration, which we will see through next year, and we look forward to combining with another great company >> well, thank you, mike wirth, so much. the ceo of chevron and an adopted texan who may have to deal with a team that was without receivers last night i'm sorry that that happened but could be a bronco fan. i don't know these days, mike, enjoy yourself thank you. >> okay, jim and go birds >> there's a man who can read the room >> you two have clearly spent some time together take a look at the premarket here we'll talk a bit more about the corporate results and the macro. yields pretty steady don't go away.

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let's get the opening bell at the big board, everest construction group celebrating its big offer. at the nasdaq, recent ipo, a chinese developer of, what else, autonomous driving technology. >> can't get enough of that. chinese companies trying to raise money here at the same time they treat our companies so poorly i think it's an anomaly that should be explained by some authorities, but we never get an answer to that >> there was a time where you did not like any china ipo in this country >> and i have -- i'm pretty down on them. i still believe in alibaba because it's got american financials, but i do believe that -- and maybe baidu. not pinduoduo. i think these are -- they're chits, and i like jason robins very much, draftkings. he runs a more honest shop than

the prc. >> are you impressed with the market's ability to shake off this jobs number >> yes i just think we should be thinking, normally, wow, exit out and do the revisions and maybe we're in far worse shape instead, the market says, oh good, we go to a 90% chance of a cut. we do need a cut rates bounce back, and -- bounce back up, and i've got to tell you, i hear it from more and more i heard it from lindy last night, which is an industrial gas company, saying, we need rate cuts. we need rate cuts, and i think that you're going to hear it from all the retailers too, and that's -- you have industrial down a little bit, you have retailers down a little bit, and i just think, you know, it's time >> what about people who say we just printed a 2.8% gdp and we're tracking for another 2.8% in q4? >> i think these people should do more research that's what i think. we have had a series of numbers that have come out, and for the most part, they're not -- after the banks, not that good

not a lot of beat and raise situations a lot of companies are in line, and when europe is stronger than america, when it comes to apple, in terms of the delta, that says things people should be a little cognizant that the country got slow during the month of october. >> you're not suggesting europe is poised to surpass us in growth is it more of a dead cat >> i'm saying that if they solve the ukraine war, yes, they would. i know germany still has a big problem with chinese buying, but the rest of europe is really on fire i never thought -- i never saw it coming. i don't think amazon saw it coming adam, the unbelievable ceo from the largest bank in europe, gave me an inkling that this was happening and i was too dismissive she's always right she's really solid >> we have not yet touched on intel, jim, which was the other big tech name from last night. there was a lot of noise in this one. >> i wish david were here when i said it's done -- don't short intel anymore.

they were -- this was a humble pat gelsinger ceo. there was no flamboyance to him. there was no, we're going to take over the world, pinky and the brain attitude what i did hear was a company that has downsized, a company that is now spending within its means, and that quarterly loss, the biggest ever, does not tell the story of a company that's going to make it and they actually have some decent products coming out they stayed strong in a.i. pc and server you know, it's just -- it's fine it's not bad anymore >> right the guidance in line the a.i. chip will maybe miss targets, but no one seemed too shocked. this is gelsinger on inventory >> our client business, we made significant adjustments with our customers to lower inventory levels so we go into the rest of the year with a very good inventory position and a very robust product line for our client business overall. clearly, different segments of the market, like the desktop products, we weren't quite as strong this quarter, but

overall, we're on it for the a.i. pc, our leadership there. >> so, you're done selling >> yeah. >> i mean, look, what happens if we get -- if former president trump wins, then -- and then you have qualcomm bidding for them, and you say to yourself, why was i still against it they have -- their balance sheet's okay not great, but not bad they're not, like, a boeing where they need to raise money i think they're a little too -- little too positive about alterra in the quarter look, their time has come and gone marvell tech is the company i look to now to handle the amazon -- amazing numbers from amazon but i just say, you know what? intel's not bad. that may be enough for people. i like other companies, but i'm taking them off the endangered species, certainly, and what i really like is gelsinger not just -- i mean, gelsinger, one of my biggest criticism of him was that he thought he was king. he thought it was the intel of

andy grove that left a long time ago. the idea that there didn't have to be -- that there was this interegnum, i think he's come back -- >> you were looking for more humility >> humility is really important when you're losing when you're winning, graciousness when you're winning, but humility when you're losing. >> speaking of boeing, jim, three times now, we got a third attempt at a tentative union is going to vote on monday, a little bit more of a wage and a bonus this time >> kelly ortberg has to get this done we want this off the front page, want them to be making planes. and i -- kelly knows that. he's a considered man. but this is enough is enough just get it done brian niccol, he gets it done. brian niccol says, listen, we had a horrible quarter, but we're going to get it done he said, very bad. we do need to see ortberg do the

same we got to get this done, get back to business one of the things that was great about the brian niccol starbucks, he said, we have to get back to making a good cup of coffee that people can have and buy. he's got to go back to making a good plane that people can buy, and that should be his sole focus, and he's got to stop with, should we do this, do that, and just put his nose down i don't want to hear from him again after this not until the quarter. i don't want to hear from him again, from kelly. >> from kelly or niccol? >> the more i get from niccol, the more i learn he's like an every sunday guy. the man is just -- he's can't-miss but kelly's just got to -- look, don't bother me, i'm on the factory floor right now. that's what he should say. don't bother me, i'm on the factory floor. i, by the way, suggest that he do what the great frank slootman did at second inningnow, put the cot on the floor musk did that do, but now musk

is so otherworldly >> it is fraught boeing does belong to that subset of companies where e.l. is a good example. i know you covered it in depth yesterday. today, wells does cut to equal weight after all this time >> at this point, i said something to the -- to jeff marks, ben stow this morning, sometimes maybe it's better never than late. these downgrades were -- this thing was one of the most telegraphed really -- look, i struggle over this, because fabrizio is a man with great dignity, but this is a disaster. it's an unmitigated disaster they made the bet on china, they didn't pivot, they didn't have a plan i remember when i stuck all this e.l.f. stuff in front of my wife's mac, and she was using it for about a couple weeks, and i said, you're using stuff made in china by e.l.f she goes, i don't know, seems cheap. no, go back. >> right >> e.l.f. is -- e.l.f. destroyed them, and china destroyed them and by the way, they're destroyed.

let's not -- let's not fool around the $35 bottle when you get the $7 bottle and it's the same -- the only thing they have to fear -- their hope is that trump wins, because then he puts a tariff and maybe the e.l.f. costs 10 bucks instead of 7. >> i know you don't usually like to weigh in on the race itself we did have the former president in arizona last night make these remarks, sort of fantasizing about liz cheney facing a firing squad. at this late stage, jim, i mean -- >> i thought that was ill-advised. >> how do you think this weekend is, to the extent we get more headlines? >> i'm going to put it this way. my wife -- we have a place in pennsylvania, and somehow it hit our utility bill every hour she gets a phone call from the people who -- one side or the other, and it just keeps telling me that -- i don't mean to -- i'm just going to say it, carl i don't think you'll be able to leave until thursday >> you mean because of the -- >> i don't think there's going to be any clarity about who's president. >> well, certain states have had

laws proposed that would allow them to start counting faster. those have been rejected by gop state legislators. >> i just think that this -- unless there's a blowout by trump, then we're just going to be stuck with this election for a very long time it's bad for the country very bad for the country >> bad for stocks? >> the stocks are controlled by -- right now, they're controlled by profits, and profits are fine >> there's a look at djt were you moved at all by this letter by former ceos, doug parker on "squawk" today, ken chennal, ken fraser, ann mulcahey, ursula burnz, endorsing harris through an economic lens? >> an old friend of mine, ray mcguire, from college and law school, tony west, the former general counsel of uber, and same of pepsico, these are people that you can deal with if you're a business person they're people that, frankly, you probably have been speed-dialing and talking to for

years, and so you're -- tony west is the brother-in-law of vice president harris, and so it's not like, wow, once they get in, we can actually sit down they've been sitting down for years, and they're very comfortable. these are democrats, by the way, who i put almost in the bloomberg camp he was a republican, he was a democrat you just didn't know you didn't know they were democrats. you just knew that they were reasonable, and that's what i think these ceos are thinking. reasonable i did not -- by the way, mike wirth is a diplomat. i think gavin newsom is someone who is willing to sacrifice any amount of jobs for one of the oldest and longest -- standard oil, california, for heaven's sake that will end. that idea that giving him the heisman, saying, listen, i'm not talking, that's over these people respect business because they're business people. >> well, wirth did talk about finding balance between public spaft and economics. >> yeah. and by the way, ray mcguire, whom i've known for a long time, he was in my class, and i always said, ray, it's always -- i hate it when you're in one of my

classes because you're so damn smart, and i sit in the back and i read "the journal" and you know everything. he knows everything. he's the head of lazzrd. people don't understand that the people in the harris camp in new york are people that, if you're someone in my position, trying to figure out what's going on in business, you never thought they're democrats. what you thought was, i got to call them because i got to be sure i'm right >> we do have a statement from the trump campaign about the jobs number today, jim "this jobs report is a catastrophe and definitely reveals how badly kamala harris broke our economy. on the flip side, of course, there's fitch today, which says, "the fed is likely to place a high weight on the headline number," and they go into the reasons why >> i knew this would happen very quickly. i don't blame president trump's people for saying it there's a simplistic notion about what you can do. but you know, liz cheney, firing squad, versus that, you start

weighing and say, well, i don't know, maybe there's a person -- we have a house in bucks county. maybe there's a person who's going to say, the economy's really going downhill. i got to switch my vote. i don't see a lot of switchers >> yeah, there's a look at drudge today the percentage of native-born 25 to 54-year-olds who have a job is higher now than it was at any point in the trump administration >> this is a period where we have great unemployment, great employment we have prices coming down we have a kind of a halcyon moment in the economy. we're going to be cutting rates for a long time. but i do not see vice president harris getting that point across at all instead, i hear about the catastrophe. now, by the way, i've never met liz cheney i know -- i had the privilege of meeting her mother and her father her mother, when she was reading my book, like, wow holy cow you like that book these are reasonable people, and you kind of -- they don't --

their family doesn't deserve this, but deserve's, as we know, it's got nothing to do with it >> meantime, dow is up 330 we're getting some of what we lost yesterday, jim, back to 5,750-ish. >> amazon putting everything in perspective, which is basically, if we can get your stuff in the food chain, whether that be marvell, whether it be nvidia, then we have a great roi, and they just demonstrated it. again, i come back to what was amazon -- what was microsoft doing, not being able to demonstrate that well? and you know, amy hood did a good job on the call, but they didn't demonstrate it, and mark zuckerberg, he should have spent more time. it was truncated i liked it because i think the world of what they've done, but they didn't talk enough about how video, which is the new nature of nvidia's chips, have enable us to go -- i wanted mark to go on instagram and show people what they're doing. i think he thinks everybody knows, because there's three billion people on it i don't know

three-fifths of the world is covered by water honestly, i wanted more life to it i wanted more life he sounded a bit distracted. he left the cfo run the call that said, it's a monumentally great company, and people just didn't like it, and i think that's silly it was silly >> did you see any of the halloween costumes of mini-jensen huang running around >> including someone from our own team i did a little video yesterday, i had ink on my face, and behind me was a picture of me and jensen i got right with jensen. i have it there, own, don't trade. he's an icon jensen is an icon. >> we saw zuckerberg post some john wick action >> he should spend a little more time on the call again, liked the call, but i didn't know he was going to need to justify his spend so much the hard numbers would have sent this stock to the moon, but he's not about the stock. he's about getting it right, and somebody -- you have to understand that amazon, when they talked about spending more,

you can realize, what a return they get from spending advertising, amazon web services, and i thought the zuckerberg call was good to take it to the next level, to take it to the -- get it from the -- out of the first round of playoffs to the championship, he needed to say, we are owning the consumer maybe they were concerned if they said they owned the consumer, rather than me say it, maybe the people who were in the justice department and the ftc, who single-handedly could wreck some of the greatest companies on earth, the pride of our country, might target him because instagram's so good. first, they'd have to come up with a reason, but once they did, they could take him down. >> on that appointment, we did get earnings at least from u.s. steel. not a huge mover neither is wayfair >> wayfair is nothing. you want to buy abbott abbott last night, they were being sued for $6 billion for a terrible disease that people have been saying killed -- hurts

or kills infants and they won a case they were supposed to lose i will tell you the stock is dirt cheap and the day of the plaintiffs taking it to abbott over -- because the fda has come out and said, listen, we see no link -- they wouldn't let the fda's statement in that was a rigged trial, and yet the defense still won. what does that tell you about the rest of the country? if i were someone who was a plaintiff on abbott labs, i would be begging to speak to the general counsel now bzand say, look, i want to come to the table. if i were their outside counsel, i would say, pound sand. >> right >> you had your chance >> we are watching abbott today. dow up 330 ism's coming up at the top of the hour, but we are getting some manufacturing pmis, and for that, we'll get back to rick >> yes, s&p global now, these are manufacturing pmis and their october final

reads, which means we replace the mid-month read usually, the changes are small not this time. 48.5%. that jumps to the best reading since july and at 4.11%, two-year are higher on the week, and contemplate this right after the last september jobs report, we were prior at 3 3.70 and in a two-year now at 4.12%. point i'm making here is, the market didn't take much back on a big jump in yields after the strong report, which means it has a very good opinion about the current report "squawk on the street" will return after a short break

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s&p heat map, breadth pretty good as we try to inch back to 5750 vix is coming up a touch, still above 21 quick reminder, we are live all night on election night, which of course, just four days away special coverage begins at 7:00 p.m. eastern time right here from the stock exchange. continues overnight and into "squawk box" the following morning at a special 5:00 a.m. early start. we'll get stock trading with jim after a break.

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it's time for item and stop trading. >> i put up this top ten list for people who subscribe or want to check out what i do for the club, the investm club goldman backed away from end face energy. what's going on with solar, with nuclear. the two best plays i found, nxt, the stock was up the most of any stock yesterday. and another one is intergy they happen to have a fantastic

nuclear asset. etr is probably the hottest in the market nobody is talking about. >> i love how we're getting used to acronyms like smr, small modular reactors >> you have to be able -- they can do as much as six gigawatts but they have to be next to other nukes. but absolutely small, jassy didn't talk, none of the hyperscalers talked much about energy you want to put brian and jassy, these guys know how to put on a call they have now really eclipsed everybody else in terms of explaining what they do. a lot of times the quarters were a little opaque. not anymore. >> we remember we remember investment cycle windows were dangerous and all kinds of stuff >> they're lowing the price of a package. europe could be huge for them. just huge. >> how about tonight >> i have otis, a really good view of things with elevators and then godaddy the first time i had godaddy on.

they have been shooting the lights out we don't talk about the company enough >> a huge small business proxy >> exactly right exactly right. we need that simple team is a nice enterprise small business i hope to bump into you this weekend. happy birthday to my wife, lisa. >> the best. have a good weekend. we'll take a break here. dow hanging on to nice opening gains after yesterday's drubbing up 320 so you can reach today's financial goals and look forward to a more confident future. voya, well planned, well invested, well protected. do you have a life insurance policy you no longer need? now 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 friend sold their policy to help pay their medical bills, and that got me thinking. maybe selling our policy could help with our retirement. i'm skeptical, so i did some research and called coventry

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good friday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with leslie picker at post nine of the new york stock exchange. sara and david are the morning off. coming off the worst day for the nasdaq since september got opening gains. dow up 300 s&p up about 43. amazon definitely helping out as we wrap up this busy week of mag seven earnings the jobs number a little squirrely. a lot of noise

12k is a miss from the 100 estimate we'll talk about why in a bit. >> feels like the market is focused on the idiosyncratic gains. here are three big movers we're watching apple and amazon, the latest tech names to report, headed in opposite directions, despite top and bottom line beats from both names. amazon up 7%, apple down a percent. chevron and exxon both in the green after their report cards chevron announcing huge cost cuts, as much as $2 to $3 billion worth by the end of 2026 while exxon increased their dividend and watch intel. shares still cut in half on the year, but gaining this morning after better than feared numbers. those shares up more than 6% >> got some economic data crossing the tape. busy morning for them. let's get back to rick santelli. >> reporter: absolutely. we do. construction spending for the month of september expected to

be unchanged comes in a bit better. up .1. and last month's minus sign becomes positive .1. reversing the stretch of negative numbers since june. the ism manufacturing complex, the headline number, 46.5, is definitely a miss. sequentially lower than the 47.2, 46.5, well, that is the weakest going back to june of last year. june of last year when it was 46.4 if we look at prices paid, this is a number we want to see going down, but it remains above 50. 54.8 well above the estimate which was exactly at 50. last month, it was 48.3. 54.8 takes you to the highest level since may of this year, but last month, last month at 48.3 was the weakest of the year, so a big reversal on prices paid. on new orders, 47.1, a whole point above the 46.1 in our last look that is good news.

but it remains in contraction territory under 50, and finally, we just had the employment report this number expected to be at 45 on the employment index, comes in light at 44.44. that's sequentially following 43.9 i would like to point out even though all yields are down for the day except for the 30-year bond, tens are almost unchanged. short maturities are down a handful. on the week, everything is up on the week, and i consider that important considering how big of a move we have had in yields upward since the september jobs report, which really does underscore what you pointed out, there's a lot of nuance to today's jobs number. back to you. >> yes, there certainly has been a big move in the last few weeks in the treasury complex. rick, thank you. at least ten firms raising their price targets on amazon this morning, and shares, well, they're very high. much higher this morning up more than 6.5%. kate rooney has been tracking the action for us.

hey, kate. >> reporter: good morning. yeah, so amazon really delivered exactly what investors wanted to see. better profitability while still investing in growth. the street was really focused on margin expansion and better operating profits, especially in the retail business. 5.9% margins expanding from 5.6. that segment had contracted in q2 overall margins coming in at 11%. that beat expectations operating income grew 129% from a year ago, highlighting amazon's cost cutting efforts and a focus on efficiency paying off. the ad business, it's emerging as a high-margin growth area for amazon, and the cloud business, amazon web services has 38% margins growing 19% year over year, which was right in line with what the street was looking for, plus a lot of bullish commentary when it came to artificial intelligence within aws. despiend all the spending around it, the ceo saying ai is a

multi-billion dollar run rate business growing triple digit percentages year over year >> it is a really unusually large maybe once in a lifetime type of opportunity. and i think our customers, the business, and our shareholders will feel good about this long term that we're aggressively pep pursuing it >> aggressively pursuing it. they're also aggressively spending on it capex for the year, he says, should be around $75 billion, and jassy says he suspects they're going to spend even more than that next year. the majority of that will be on aws, and ai is a business growing three times faster at this stage of evolution than aws did back in the day. amazon does have a track record of investing for growth and returning on that, aws and the retail business. stock lifting the dow this morning, been up more than 7% or so back to you.

>> thoughts about this aws ai business growing 3x where aws was at this stage? how important is that? >> reporter: really, really important. bullish commentary from andy jassy and there had been this narrative in the past year or so that amazon, some would say it was behind because they didn't have a large language model. you had open ai really pulling ahead. they had been investing in anthropic. amazon has stayed with this strategy of hey, guys, we're going to offer you a variety of models, a strategy where we're the third party agnostic provider that's one side. they stuck to that and the street seems to be saying yeah, that's going to pay off and we agree with that strategy not having a leading large language model is okay for aws they seem to have come around to that the other thing is the return on investment yes, they're spending big. data centers, all this infrastructure, but they're spending to get ahead, and jassy really highlighted that on the call, saying yes, this is a big price tag, but it will pay off

and they also have the track record they have sort of proved this in the past with whether it's the retail business or amazon web services they're getting a bit of a hall pass, especially because they have shown the core business is firing on all cylinders. that was really the needle they had to thread and you can see the reaction in the stock price. they did that perfectly, really in the quarter, showed they were nailing it on the retail business, spending but spending wisely and showing better profitability along the way. the scale of amazon at this point is huge, too to have that type of growth on such a higher basis i think is another thing that the street is rewarding. >> we mentioned this scientific, too, when amazon rises 5% on earnings the xrt, the rest of retail, essentially, lags s&p on the day. kate, thank you. kate rooney on amazon. let's get to apple sales hit a quarterly record, beat estimates, but shares under a little pressure. actually coming off the premarket lows, pointing to a murky outlook for holiday iphone potentially.

our next guest feeling confident about the ai thesis after that print. dan ives, web security analyst is back on set, has an outperform and a 300 target. happy friday >> great to be here. >> what services a concern >> look, ultimately, they need to produce on two things iphone services, services, $100 billion run right now for the year if you look at that, and they basically said that's going to be 12%, 13%. this is not going back to single digits, and iphone, despite all the worries, billion dollar beat on iphone before apple intelligence and a core iphone 16 comes out i think you look at this, as this all gets rolled out, even into next quarter, iphone guidance was in line with expectations i think this is sort of get the popcorn out. it's a six to eight quarters ahead where i think we're going to have iphone beats to high single digit, potentially double digit, especially in china >>ia don't think the cell side was over their skis looking for

december revenue up 7? >> i think when you ultimately split that, iphone growth, 5%, basically stays in line. i think the delta was really related to mac ipad, wearables. i think the reason the stock is coming up is anyone coming through this, you own this for iphone, for services, you own this for gross margin. all those checked every box. so no one is selling this on any sort of timing issues on ipad or any of the others. iphone rock of jiblgibraltar go into what we're seeing and china hasn't even had the ai rolled out. that comes out in april. >> but there was a decline in china revenue last quarter it fell short of estimates there. do you think china still has the potential to rebound based on the ai features or apple needs to at this point find growth elsewhere? >> a great point look, china, hearts and lungs of the cupertino growth story

despite the declines we have seen, now we're seeing flat. you only had a few weeks of iphone 16. going into the next few quarters, china is going to be up high single digits, potentially double digits. india started to come up as a huge potential opportunity you have a lot of growth levers. what cook and cupertino, they continue to play chess in the broader strategy, a lot of competitors, they're playing checkers at the kids' table, and as this plays out, that's going to be the growth story for apple. >> was covero earlier in the week a head fake what explains some of the supplier weakness? >> a little hid fake we have talked about it on the show in all our asia trips in the last eight weeks, there are some head fakes depending on where you're seeing on the supply perspective i think the one thing many have underestimated is the install base upgrade cycle you have 300 million iphones that haven't been upgraded in four-plus years. if that's december, march, june,

cook basically said last night, look, apple intelligence off to a roaring start. this is just the start of a renaissance of growth for apple. do you think some of the major ai features are coming a little too late to capture the holiday spending surge i ask that because obviously this is a big quarter for holiday spending, but at the same time, a lot of these ai features are going to be things where people see their friends doing it and say that's kind of cool so all of that word of mouth takes a little time to really filter through >> yeah, and you see it in the marketing campaign 18.2 will come out in december, ahead of holidays. you have other big features coming out in march and april. what we're really setting up for now from an iphone perspective, you have a very strong holiday season but here's the difference march and june, instead of waiting for iphone 17, that actually starts to tick up from a growth perspective then you get china that comes out with ai in april this is basically an elongated

supercycle over the next few years. and that's why for anyone to go against apple with that 2.2 billion install base with all these iphones coming out and ai, i continue to believe ai comes through cupertino on the consumer side just like enterprise goods through jensen and nvidia >> now we have a bunch of your names on the tape, what do you think was the most impressive quarter or call? >> google was probably the most impressive because it showed, don't forget about us when it comes to gcp what jassy is saying, too, don't forget about us as well. it's not just about nadella. you're seeing strength from microsoft, amazon, google. bullish for nvidia, bullish for ai revolution. despite some of the knee jerks on microsoft, i believe that's the most unwarranted in terms of the sell-off, but it's a tech

bull going into the weekend, you feel, i think, emboldened about the broader ai thesis. when you look at apple, many yell fire in a theater in terms of iphone cuts it will flex muscles for cook. >> the 21st on nvidia? >> and that's one, you have the watch parties. everyone will be getting ready in terms of what we see from the hyperscalers, that is good news for jensen and nvidia. >> dan, thanks dan ives this morning's jobs report coming in extremely far below expectations but that said, a lot of noise on the labor front in october senior economics reporter steve liesman here to explain. steve. >> reporter: yeah, it was a weak distorted and confused jobs report, affected by storms and strikes. they still showed some gathering softness in the job market that's enough to keep the fed on track to cut interest rates. nonfarm pay rolls up by 12, it was 223,000 in the prior month

august revisions taking off 112 combined from august and september. unemployment rate remaining unchanged. we put some people to work who had been looking for jobs, keeping that unemployment rate down average hourly rates pretty firm, so that's pretty much in line with where it has been. but let's look at where the jobs were and we can maybe tell a story. health care, social services, largely unaffected by what's been going on and local and state government as well coming in stronger, 39,000. retail trade a little soft right there. but then look at manufacturing down 46,000. 44 of that is transportation equipment. that is your boeing strike right in there and then temporary help, a bit of a head scratcher. i went back and looked there is some evidence when you have big spikes in storms and people not working due to weather, employers tell temporary help, stay home during the storms, come back in later they're not on pay rolls so you get a big decline.

what was behind the weak report? storms, strikes, there was a low response rate, not apparently related to the storm, just because there was a short period of time in the month to answer the surveys from the government. bigger question is whether there is weakening in the job market supported by down revisions and the big miss on expectations the fed futures market seems to think there is some softness in there. you can see more certainty on the quarter point cut in november up to 99% december, more certainty there for another cut. then there's that january swing month where there was a pause built in at 40%. now it's up above 52%. it's going to go back and forth until that happens backing up the idea that a lot of this was storm related. you had spikes in jobless claims in florida, georgia, and north carolina adp data we looked at exclusively to the decline in payrolls of a combined 24,000 in the storm week, but those jobs

bounced back the very next week and then some. so that's a sign that it was really a storm remains to be seen how this plays politically. a bad time for the harris campaign to have a lousy jobs number but there are good reasons that still suggest it's been a good run in the labor market >> and i wonder if you think we're going to be having that annual residual seasonality discussion in the early months into next year >> yeah, and by the way, carl, that also comes home right now on the inflation front because remember, we had a pretty good fourth quarter of '23 when it came to inflation. so it's going to be a little harder to bring down those inflation numbers right now. we have a three-month annualized core about 2.4%. the three-month headline is 1.8% so these are pretty decent numbers. a little firmer than we thought or hoped for and then you have, as you say, that residual seasonality. what does it mean for people who

haven't followed this? it means we took care of all the seasonality we thought would happen in the beginning of the year and there was still some seasonality we didn't catch. it's a good question whether or not the fed is a little more cautious, and i think that's a good explanation for why the market is 50/50 on what happens in january >> glad we had you here, steve, on this one especially steve liesman on the jobs number as we go to break, take a look at the road map for the rest of the hour 12k in october, a lot of noise as we just discussed we'll talk to goldman, their chief economist about the numbers. >> plus more on the results sending amazon and apple in opposite directions. >> and a potential end in sight for the strike at boeing they have a new proposal to be voted on monday. we'll talk about detls aais we now have 1% gains.

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negotiating on a new offer to end its seven-week-lock strike will it pass let's get to phil lebeau with the latest >> reporter: third time may be the charm for boeing and the machinist leadership they're hoping this agreed upon tentative offer, this contract that the union will vote on, is enhanced enough that the rank and file will say, okay, yeah, we can go for this they have increased the raise over the next four years from 35% up to 38%. they have also enhanced the

401(k) match from the company and the signing bonus which was $7,000 is now $12,000. though you can take $5,000 and put it straight into your 401(k) they have enhanced what you can walk away once this contract is ratified up to 12,000. remember, this negotiation between the union and the company, twice, twice now, the union has said no, there is no pension in this latest offer, by the way. and when you look at the offers that have been rejected, initially in september, it was a 25% raise that was rejected. then when you talked in october, it was 35% offer raise that was then rejected. and this means for boeing if they can get this deal done, the strike has been going on 50 days they likely begin manufacturing in the middle of next week it could potentially mean the resumption of production and then eventually deliveries of the all important 737 max. the impact of this contract,

it's about $1.1 billion. they have already lost more than a billion dollars at least by one estimate, they're losing a billion a month. if we get close to two month, it will be $2 billion free cash flow impacted by more than a billion the question becomes if you are boeing, can you get this deal across the finish line yes, they did the capital raise so they have a little more flexibility on the balance sheet. that capital raise coming out at 24.3 billion the bottom line is they need to get this strike rezaubled. and they believe increasing this offer as they have that they can get it across the finish line. the vote is on monday. all day long, we won't get the results until well after many people are probably in bed monday night on the east coast probably about 8:00 or 9:00 on the west coast >> phil, would you say this ratification if it were to take place on monday would be seen as a win for ceo kelly ortberg? >> reporter: yes yes. look, he needed to do the

capital raise. he did that. now he needs to get this strike resolved that's two things down next up, they have to work on getting the integration, the agreed upon merger acquisition of spirit aerospace. or aerosystems once they do that, this allows him to move forward here you can't do anything if you're kelly ortberg and his team until you can say, we have to have everybody back at work and we have to get our production rates start moving again first of all, get production going. and then gradually increase from here >> absolutely. step one, just get production back on track. we will be watching that coverage monday very closely, and the fallout on tuesday as well phil, thank you. as we head to break, check out the biggest laggards on the s&p this week. more on the movers you might have missed after this less than two weeks to go as well until cnbc's delivering alpha investor summit here in new york city on november 13th

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. our plan is to take absolute cost out of our business at the same time as production is growing. so unit costs really come down we have been able to hold unit costs relatively flat for the last several years despite the inflation you have seen in the economy. but we always have to do better. so we're looking to take $2 to $3 billion of cost out by the end of 2026, grow production significantly during that same period of time, and that should drive more value to the bottom line >> chevron's mike weather with us the last hour, breaking down the company's cost cutting plans as much as 2 to 3 billion in savings by 2026. company also posted a top and bottom line beat in q3 alongside record production in the permian, and it's not the only report card from the oil patch exxon shares higher an mixed q3 results. better than expected production, raising its dividend by about

4% of course, we mentioned with mike, how much of the capital returns story is just embedded in all of these energy trades. >> yes, and doing quite well today as well. stocks trying to rebound following a rough month of trading. the s&p breaking a five-month winning streak after seeing only three sectors end in positive territory for the month of october. led by the financials. six of the major big banks all ending the month with gains led by wells fargo up around 17% during that timeframe, the financials outperforming the s&p year to date as well so i don't want to say this is too surprising because we saw those numbers come out in the middle of the month and they were much stronger by and large than expected. and they also had all of this macro tailwind as well as the economy appears to be coming in more for a soft landing. and there was some interesting data as well just released by kbw showing how the financials tend to outperform during periods where the puolls are

favoring donald trump over kamala harris. they kind of characterize this based on certain periods of time one was the first assassination attempt in mid-july. showing the financials outperformed the s&p by about 2.3% then the early october rise where financials outperformed by 4.9% and then you take a look at when harris polling was more in favor, and you see post-biden dropping out in mid-july, they actually underperformed the s&p and the september rise, they outperformed but not to the same magnitude as they did when the polling was favoring trump a lot of investors see the potential for a winding back of the regulation we have seen in the biden administration that's targeted the banks the banks have been very vocal in fighting back against a lot of that regulation, but the prospect for upside at least seems to have according to kpw, seems to have generated a little bit of outper formance based on

this polling correlation >> regulatory friction lessens, m&a, broader runway for deal making that more than offsets what some would argue is a steeper yield curve environment under the trump? >> yes, they all believe that less regulation would be better for their organizations. especially when it pertains to some of the actions by the cfpb, bezel 3, those capital rules they're expecting a watering down of, and the m&a, the approval, the antitrust environment, but you have all this potential for deficit spending which really concerns these ceos because of its potential to rattle markets. to disrupt the confidence and disrupt the economy. so it's kind of a multifaceted thing when you really hear it from the ceos but the markets at least seem to be treating it as a positive >> good illustration of what's

on the line in these next few days when we come back, a couple hurricanes and a strike driving this morning's jobs number to the lowest since december of 2020 we'll get goldman's take on the numbers. >> apple shares on pace for the worst performance this week since april. we'll talk about what's driving that action as the shares remain negative today, after this ♪ i'm gonna hold you forever... ♪ ♪ i'll be there... ♪ ♪ you don't... ♪ ♪ you don't have to worry... ♪

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welcome back to "squawk on the street." i'm silvana with your cnbc news update span, emergency officials raised the death toll from this week's devastating flash floods to at least 205 with 202 of them in the valencia region alone. three days after the storm, many streets are still blocked by piled up vehicles and debris and some places don't have electricity, running water, or

stable phone connections >> two people are dead and at least six others injured after a shooting in downtown orlando, as thousands of people enjoyed halloween celebrations police arrested a 17-year-old on suspicion of carrying out the shooting a motive has not been established yet. police say the victims range in age from 19 to 39. and manchester united hired a new manager friday he will take charge on november 11th as the storied english premier league takes a gamble on a manager unproven in europe's top leagues. he's joining united from sporting lisbon, carl. >> thank you very much a bit of a rally mode as we try to undo some of yesterday's losses you have gains for the nasdaq approaching 1.5% of course, down 2.5% yesterday top sectors on the s&p, discretionary, tech and financials hard to divorce yourself from

the amazon effect on today's tape as for the jobs number, the final number before the election came in far below estimates. 12,000 jobs added in october the lowest since december of 2020, breaking down some of the numbers is goldman sachs chief economist jan hatzius. good to sooyou >> good to be back >> what's the best way for a viewer to understand this print? >> i think it's a very noisy number we knew there was likely to be a negative strike effect and a negative hurricane effect going in the number came in well below the estimates, but there also seems to have been potentially a bigger hurricane effect. we thought that helene was going to weigh on pay rolls by something like 40 to 50,000. if i look at the note from the labor department, it seems like milton also might have had an effect because they noted the evacuations around milton. so it's very hard to know. i mean, even with that, it might

be a little bit weaker wrrbs and the household survey was also a bit weaker and the labor department said that wasn't real a affected but i wouldn't put a lot of weight on it. it's also a very low response rate in the establishment survey so you have to take these numbers with a big grain of salt just like i think you have to take the 254,000 that was reported a month ago with a significant grain of salt. i think the labor market is still doing well and the trend is materially higher than this, and the unemployment rate seems to have stabilized in the low 4s which is a good place to be. >> was it surprising that bls said we can't put a number on storms would you expect them to >> i don't think they really have the information yet because this is going to really depend more on the state and local numbers. they will publish state and local numbers and then i think we'll have a better sense. oftentimes they note these qualitatively without putting a specific number on it.

>> for a fed that is data dependent, when the data is coming in so lumpy, what does that mean for next week's meeting? the rates complex seems to be acting kind of like steady as she goes do you agree with that >> yes, i think the expectation going into this was already that they were very likely going to cut by 25 basis points next week, and of course, that's being re-enforced, but there's not really anything very new there. at the margin, you might get a slightly more dovish message in terms of what happens at subsequent meetings. we have been expecting another cut at the december meeting and at the margin, i feel maybe a little bit more confident about that, but again, i wouldn't put too much weight on today's number >> how would you characterize the moderating contribution of immigration as you describe it, and its role in that 4.1% unemployment rate? >> well, i think the increase in the unemployment rate from the 3.5% range that we had a year and a half ago was in part

driven by a large influx of less skilled workers, you know, that are unemployed at slightly higher rates at least in the early years and also compete with the less skilled parts of the native born workforce. it takes a while to absorb all of those people in the labor market so i think that's the main driver the other point to keep in mind is that because of this immigration, which was so strong a year ago and seems to have come down a lot, it's harder to estimate what the break even rate of pay roll growth is, that keeps the unemployment rate unchanged. it adds further to the uncertainty that i just noted. >> the president made a point of mentioning the 2.1 print on pce this week and you wrote a report almost a year ago pondering whether inflation could fall below target

where are you on that discussion >> 2.1 on headline pce, 2.7% on core pce over the last year, we have gotten a moderation, a little less than we thought a year ago. most of the upside surprise was concentrated in the first half of the year but we have made a lot of progress. i think we'll continue to make progress because if i look at, for example, the labor market indicators, the supply demand balance, job openings, quits, wage growth, i think all of those suggest that the deceleration is still ongoing. my expectation is we'll be at about 2% by the end of next year but over the next couple years could we be a little below 2% for a period yes, but i wouldn't expect a big undershoot because the u.s. economy is still very strong >> much has been made about this being the last print before the election next week how would you characterize what we're seeing with this lumpy

month of data versus what it indicates about how americans are feeling about the economy right now? >> well, i think a lot of the economic indicators have performed better than i think most people, certainly the consensus of forecasters, thought over the last couple years. inflation has come down a lot. and that has happened with above expectations gdp growth, strong employment growth, still a strong labor market. but consumers also look at the cumulative increase in prices, not just the year to year inflation rate, and if you look at a lot of the surveys, they still say prices are up a lot. so it's still a mixed picture. you know, if you look at the consumer sentiment and confidence indices and adjust them for some noise and some breaks in the data, in the university of michigan, for example, there have been some

changes in sample design, you do see an upward trend, but maybe not to the degree you might expect if you just looked at the year over year inflation numbers and employment numbers it's still a mixed picture >> a lot to absorb, especially today. thanks for helping us. >> thank you apple shares under pressure despite a top and bottom line beat, in record september iphone sales. let's get to steve kovac live with more on this quarter. >> reporter: apple did beat expectations on the top and bottom lines but the stock under pressure today because services revenue was missed and no guidance really on iphone sales for the december quarter and that's really all anyone wanted to hear on the call last night, will apple intelligence keep the iphone business growing? they did not get that. the only guidance they did get, top line revenue will grow a bit and services will grow again by double digit percentage points

a little color, though, on early iphone 16 demand from tim cook i talked to him on the results and he told me the first few days of iphone 16 sales were better compared to the 15 last year and 15 sales were strong as well cook pointed out the 15 pro models still work with apple intelligence so that in part at least explains the record september quarter for those iphone revenues also, it was the opposite of what many analysts thought were happening for those initial sales. meantime, apple intelligence just launched on monday and cook told me in the first few days more people were updating to the new software than they did for the same version a year ago. he called it, quote, a really early stat but he said they're also tracking how many people turn on apple intelligence after the update, couldn't tell me how many, but he sounded optimistic about the momentum and we're waiting for more artificial intelligence features to launch.

chatgpt is coming in september and more features and languages coming next year it's unclear still if ai is driving iphone demand. for now, the best we have from cook is he says apple intelligence is a compelling reason to upgrade, carl. >> really quick, is the next big catalyst the ios update in december >> yeah, that's the next big one, when they finally start putting chatgpt on there, that's one everyone is watching for apple, of course, considers that the best of the ai chat bots that's why it's the first out of the gate with the ios integration. >> steve, appreciate it. important story as we're looking at as shares resume. >> as we go to break, nasdaq is leading the charge this morning. top gainers, jim mentioned it, you see amazon there, holding on to a near 7% gain on earnings last night we'll talk more about that story with one analyst forecasting double digit gains ahead after a short break. 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.

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and todd... well... he's practically euphoric. practically. so, let's get to work. (♪♪) markets, we're in a serious rally mode for a slight minute we were up 400-plus points on the dow. settled back just a touch. session high was maybe half an hour ago interesting to watch the sector action utilities, health care, sorry, materials are lagging. everything else is green >> i wonder if some has to do with the slight move on the ten-year >> which has crept above 4.3 >> exactly >> vix remains elevated as well, although 21.7. meantime, watching amazon today. >> amazon shares are popping, of course, after a top and bottom line beat. cloud revenue growth up 19%,

better than a year ago but still lagging the growth of more than 30% from microsoft and google's cloud business cowen's senior analyst joins us with a buy rating and a $240 price target you raised that based on what you see as the numbers from the quarter and the guidance from the quarter. what do you think generates additional upside from here, especially given today's moves >> yeah, i mean, well, if we can click back to the quarter and the guide. amazon definitely delivered some treats for investors last night. with the strong 3q results that included the blowout margins amazon was 1%, 19% and 25% above street consensus revenue operating income and earning key drivers of the margin beat were aws advertising and other cost efficiencies and then what helps drive the stock, they gave this 4q outlook that was really strong revenue guide range bracketed us

and street consensus and the income guide range was huge, well ahead of investor expectations capex growth is also accelerated with this ai infrastructure build-out. all in, we ended up raising our long term revenue and earnings forecast also raised capex and we went to $240 on a price target from $230 to maintain buy. >> do you think there's room for them to expand that operating income and margins from here, especially given all the projections for capex? you're saying you're forecasting $75 billion of capex in 2024, up 57% year over year >> yeah. we expect further margin expansion like into '25 and going forward, and the drivers of it will be obviously aws, which actually had blowout margins in 3q. sustained mid-30s, aws margins the advertising business which is growing like almost 20%, that's going to continue to grow very quick and has been a huge

benefit for the company's margin trajectory over the last couple years and the thing that's going to help next year is going to help a little in the fourth quarter is around fulfillment efficiencies they went to a regional fulfillment model lastyear and they're working on, they were i centers, they're open now. it's going to help margins in 4q, then it will really help as they build that out next year. so those are some of the things. the other thing that dynamic that we've seen is unit growth has exceeded shipping cost growth the last four quarters. and the unit growth accelerated this past quarter. it's being driven by fast delivery speeds and amazon's history and also amazon is leaning into a low priced items where they think they're under penetrated since they've lowered costs to serve over the last couple years, we see this dynamic of faster unit growth and shipping cost growth which is also good

for margins over the long term >> pretty remarkable move today, john up more than 7%. we really appreciate your time and for breaking results down for us >> thank you coming up next hour on "money movers," the white house's first reaction to the jobs number today with jared bernstein joining us in a few w 4tes. doup00

while inflation and trade have dominated conversations around the election, there is another major issue that's a serious concern for many business owners. less than a week from election day, let's get to emily wilkins with more from the battleground state of arizona emily? >> hey, well immigration and border security, they're hot-button issues this election. there is a real concern among businesses, especially construction and hospitality companies here in arizona who are facing a shortage of workers. and they're worried that it could get much worse the president and ceo of the arizona hispanic chamber of commerce - >> we have several members that are in the construction industry that aren't able to find workers

to complete projects and when they can't complete projects, that means there is a lack of housing. >> immigration is also a major issue in the competitive senate race in arizona between democratic congressman ruben gallego and former news anchor ckari lake. gallego wants to expand work permits for illegal immigrants while lake says people are denied jobs because of lack of training and schools however, john graham, ceo of - >> the issue is that these people are not taking somebody else's job there are jobs that we have to have, and there is not a substitute for that if there was some kind of significant loss of labor. so it would be -- use the word catastrophic >> reporter: that was john graham that was john graham he is the ceo of sunbelt

holdings he's saying there, it's already tough enough for businesses to find the workers that they need. the state has a little less than 200,000 job openings in june graham and others told me they are worried about a ballot measure that if passed would allow local and state police to arrest and deport those illegally in the country a similar measure in 2010 led to businesses boycotting the state. guys, there are concerns that if that measure passes you could see another boycott. >> emily, can you help explain to us kind of the economic backdrop of arizona in particular they're expanding into manufacturing, so presumably those -- the workers that they're looking for would be those types of jobs, is that right? >> reporter: exactly it's construction, it's manufacturing, it's hospitality, it's agriculture, of course. and you know, we were talking with john graham, he was constructing a brand-new hotel in downtown. and he's one of the folks who's worried that if you see some more strict standards come in, he's not going to get the workers he needs to build that

up >> big implications for not just construction, manufacturing, hospitality, but gdp at large. emily, big weeks coming up great piece. emily wilkins joining us on immigration. quick reminder, cnbc is live all night on elections night we will have the results as they roll in and the reaction from some of the biggest names in business begins at 7:00 p.m. eastern time live right here at the new york stock exchange we're going to go all night, live coverage in the overnight hours until the next day when "squawk" will start an hour earlier at 5:00 a.m. stay with us on election night movers humana medicare advantage plans. carry this card and you could have the power to unlock benefits beyond original medicare. these are convenient plans that

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good friday morning. welcome to "money movers." i'm carl quintanilla with leslie picker here at post nine of the new york stock exchange. today the white house's first reaction to the jobs number at 12,000 a miss to the estimate of 100k how does the number impact the election, a few days away? chair jared bernstein is with us only nvidia remains. the street reacting to earnings from apple and amazon. should investors stick with the mag seven through year end we'll discuss.