Target is looking to shut stores. Costco said its not a major problem. President biden urges uaw workers to stick with the strike while elon musk says the demands are a sure way to bankrupt the big three. We will get to costco in a minute. Lets start with the markets looking to rebound from yesterdays selloff. Jim, you have said this morning be careful, dont bite too soon. Thank you. Because you come in, now i have to tell you that when i was watching Frank Holland this morning, looked like we were about to have a breakout, then we go back down. What i want people to understand is october is a good month. I can understand you trying to position, but i also am more worried that Interest Rates, which did not go higher on the durable goods, the Interest Rates could reverse, and, david, i dont care what month were going into. This market, as weve indicated is really about Interest Rates. Its not about, as much as people might want to say, its not about earnings. The earnings we have had the last couple of days is pretty good. If rates go the wrong way, then whatever we have there in the future is just erased. What about if they just stay where they are for longer than we anticipate as kashkari n indicated . Im saying the long end. Were back to the tenyear or the 20. I like the 20 because in the old days, the 20 was king. How did the tenyear become king. It is the benchmark yield. I tried to get a mortgage. I got a mortgage for 308. Now its 8. A year ago, year and a half. Is that a jumbo. It was from a credit union. Those credit unions. So when do we stop having this conversation, then. When i say so and when does the market move on . Not this conversation, the larger conversation. No, because i feel like were headed for the end of the inverted yield curve everybody claims it would it would be horrible with the inverted yield curve. I actually am stuck with the facts, and the facts indicate that theres still a lot of good out there, its just that you have to pick and choose. Retail tougher, industrial not bad, even though the stocks arent out. Look, obviously youth is bad. Some of the drug stocks good, health care. Im just trying to present it as in other time. You were around the 80s and 90s, i think. Certainly was in the 90s. In fact, i was working here for much of the 90s, yes. So there were three rallies that we had during Interest Rates going higher in the 90s. Three considerable rallies. We had a significant one called the tech bubble where rates were still quite high. You could get out before that. Im just saying that we did have rallies. Theres a presumption, carl, youre fine, that you can have higher rates and have enough ma market. But we did, david points out correctly, we had irrational exuberance going into 2000. Irrational kexuberance was 96. One of the examples i have of rates going higher. 98. Rates went higher. I think theres this perception, all right, it has to go down. Its not empirical but it is based between 2000 and now. There was a market when rates used to go higher. We seem to only remember when things were anemic. I didnt mean to be mean. I feel bad about that. You should not feel bad. Thank you. Among the reasons to get tactically bullish here, a good earnings season we expect, positive earnings season. Better seasonality. Q4 is the best. Buybacks resume. A lot of these shorts on tech are going to be tough to hold, if, in fact, comes in with earnings solid. Theres a considerable short base, the largest in history against the tenyear, and the other thing, oi have been workig on oil at 100. The saudis have to make a decision. Do they want to encourage drilling in this country. Drill drilling is up barely. Our Oil Companies are doing more with less, but we havent seen the rate count go up. At a certain point, someone is going to break ranks in the oil market. David is close to these guys and say you know what, heres whats going to happen. We got to take advantage of this price. No one has done it yet. Its amazing how disciplined they are. No one. No one. Well, they have been disciplined for quite some time. They have a number of other areas in which they are putting capital, including in efforts to try to lower carbon. If not cash or carbon. Absolutely. Thats very true. Youre right, theres obviously continued capital going into drilling, but your point is not a lot of new capital as a percent overall of what could be available from these companies, which have a great deal, given where prices have been for some time. Right. I had the largest natural gas company. Theyre going 13,000 feet into the earth. And theyre doing it in no time. So you just say, why do i need more rigs, i can go down there and drill, and move to the next pad, but at a certain point, if i were an oil company, i would just say, you know what, were committing a huge amount of capital. I dont think their shareholders would like that, jim. Shareholders dont like this. Even though were founded every day with a message that the internal Combustion Engine has an expiration date. I think if youre speaking to ford motor, you will not have enough money to take the revolution. And i like what musk said in his tweet, which is these guys, whatever its called, the highway to the danger zone. Bankruptcy in the fast lane. Fast lane, the hov. I think that i have a better, you know, im not as curt as he is. The ftp being higher . Theres been a couple. Lets just say this one was the most twilight zones of the ones i had seen. She basically didnt know she had been hired until she was hired. Lets get this straight, oil prices to oil patch. So you were asking me how we could get rates down. Carl was making the point when you were saying about they should drill, drill, drill. I was saying, listen, they should not necessarily do that because shareholders will not reward them, and the question is when do we actually have worldwide declines in demand for the underlying product, which could be a while. Two of the most disciplined are Scott Sheffield of pioneer and jordan. Theyre incredibly disciplined. For all of their discipline, they stocks stink. Theyre not doing anything. Just nothing. And pioneer, you could see if you go for longer term, it hasnt mattered one bit. Cotura is off considerably. Other than hall bert, you got to go longer term. These are like these companies are not up since the time when they started getting disciplined. You can show. There you go. There, look at that. Dont necessarily put it in the ground. It means it doesnt matter. I think its what i really think its what carl said. People dont want these. These are like terminal companies. We should make the point, of course, there are very few who expect theres going to be a diminution in demand for the underlying product. Dont forget, its not just gasoline. Its jet fuel. It goes on and on, the list of products that we use in this world, demand for which is only increasing, and so thats why you get people saying its a 20 to 30year transition. People wont argue about that. That is what you hear from the large Oil Companies. Russia, brazil, my expert, he said the exploding nature of the natural gas, liquid, and our exports, to be able to make plastics, probably the hottest part of the entire market. So we tend not to talk about natural gas liquids, but the export market is fantastic. So im just saying these companies are doing much better and their stocks, people dont recommend. Where do you want to be in this market . Where do i want to be in this market . I want to be a buyer because the negativity is so great that there are no shoe shine boys. That i recommend. Everybody has been wiped out. All right, just after one kind of really bad day . Really . Thats all it took . Everybody has been wiped out . Everyone wants to be in the tenyear or the 20year, thats what i find, how about that. I told you, david, when i did that thing, the stop trading and the mad dash and all the tenyear people loved that. I watched that again it was so funny. I think you have to understand that i have a huge number of friends who are stock jockeys and theyre like saying, jim, municipals. G. O. S north of five. Count me in, i want in. Government obligations, 5 . Take your entire cohort from here to the top. Going to recommend a clorox dividend with a hack . How about macys. Talk about macys. Talk about the downgrade today. Gets a lot of calls. As for autos, the uaw strike against the big three continues today. A day after the president joined union picket members on the picket line. Lets get to phil lebeau with the latest today. Good morning. Good morning, and the talks continue. As we have talked about for some time, labor strikes are almost always about two things, whos got leverage and whos feeling pain. Near term or longterm, the fear of longterm pain, and you take a look at the map showing the strike locations around the country. Theres leverage on the side of the uaw, at least they believe they have leverage coming off the president s visit, and even though this strike is impacting about 12 of the big threes uaw labor force, you know what, it isnt resonating with the auto makers. In terms of the president s visit, certainly gives a boost to the uaw. He was only there for about 15, 20 minutes, but they believe it was enough to not only embolden their folks who were on the picket lines but also send a message to the broader public that the white house is behind them. Weve got public support. He told us to stick with it, and thats what we plan to do. How much pain could there be longterm for the auto makers on the ev side of the business . If this contract is semdaccepte right now. Dan ives with wedbush, if the detroit three took the current deal, we estimate the average ev vehicle will go up in price by 3,000 to 5,000 to pass the costs on to the consumer and would be a torpedo to the future Business Models of the 313 area code. As you take a look at shares of gm, ford, and stellantis, jd power, we checked with them, the inventory levels youre seeing in dealer lots, roughly where it was when the strike began. Not feeling huge pain at this point. They are concerned about the longterm pain of signing a deal that they could could lock them into higher costs and that gets back to what you were talking about earlier with elon musks tweet about a 32hour workweek and a 40 raise driving them in the fast lane to bankruptcy. You know, phil, i keep, danger zone, i keep thinking, phil, that really, these countries have become whipping boys, every auto company, and im sitting here thinking jim farley at ford. His whole family has always worked at ford. They are ford families, and big ads about how they support unions and hire people, and now im hearing people dont get paid a lot. That the president is kind of caught up in whether its 40 that should be given. When do the Auto Companies strike back and talk about whats really going on in these talks . I think theyre trying to, jim, right now. All of them have made it clear they have done a number of interviews. We have talked with a number of executives and they have laid out how much their costs will increase if they were to go with a full 40 . I dont think anybodys factoring are 32hour workweek. Thats not even a starter in terms of what i understand about negotiations. Having said that, the big three do have a problem in terms of tacking the leverage off of the uaw. The uaw feels like theyve got momentum on their side. Their membership is adamant that they continue pushing the auto makers, and there is a sense that they will push this much longer. I dont get the sense here that, t okay, the president was here. Lets move into a room and settle this once and for all. Thats not on the table right now. It could happen with ford. I dont get the sense that its near term. I agree with you, phil. I see nothing on the horizon right here. Great report. Phil, well talk in a bit. Our thanks. Phil lebeau this morning. When we come back, the ftc n making its case for the its antitrust lawsuit against amazon. Well get to ctcoso, marriott, marcys, tesla, when we come right back. The federal trade commission once again taking aim at big tech, the agency and 17 state attorneys general are suing amazon alleging the company wields power, and stifles innovation for consumers and businesses. In response, amazon says the ftcs lawsuit would lead to higher prices and slower deliveries for consumers. They also say it would hurt businesses. Its amazing how few people mentioned this to me yesterday as something that rose up to the level that they would care about, which seems somewhat shocking, guys, i guess perhaps because its been so long in coming. But you think back to other lawsuits, whether its at t and modified final judgment from judge green. Obviously thats a long time ago. Even predates my time here. Sure. Or the fight against microsoft in the 90s. This one, well see. You know, no surprise having expected it. Jim, you have worked your way through some of the complaints. Theres so much more thats redacted thats crucial that its hard to read. Its hard. This was khans point this morning that as she believes as more is unredacted, well learn more about what their complaint is trying to say. Microsoft case started in may of 1998, finished in june of 2021. People are worried its going to be a lot of time. Thats when the Appeals Court overturned it. Right, eventually, it didnt matter because they had actually already done the things. Right. But i do think that one of the problems i have is, like, events have overrun her. Theres a great note about walmart plus. How theyre giving it away. Wedbush puts walmart adopting hyper local influence delivery, free for walmart plus. I read that and i think is she up to date. How about the deal between shopify and amazon where theyre talking about how theres so many more opportunities besides amazon but were hooking up with amazon to make it cheaper. Overrun by events since 2017. I think it smacks more of fiction than of fact. The market is correcting outsideover of their complaints her complaints are steal. And lina khan would dispute that s that. I hope so. And he obviously answered questions about the strength of her case on squawk box. Take a listen. Were focused on bringing cases we believe we can win. We bring cases when we believe theres a law violation, and if we believe theres a law violation, were going to fight. Of course things dont always go our way, and when we suffer setbacks, we look at the decisions closely and figure out, you know, steps forward. But we think this is an enormously strong lawsuit on the merits and are looking forward to explaining to a judge how amazon has violated the u. S. Antitrust laws. Thats a broad explanation. That was an answer to joes question, do you just go after companies because theyre big and successful. Right. Well, i do find that you have to deal with reality, and i know Jonathan Cantor is going to face the same problem with google and advertising. These markets grow fast. Tiktok came up while they were working on the issue with google and advertising. Not the issue with google and search. When i read her comments, khans, i think, does she understand how much she was saying that Online Amazon was half. Theyre defining a market that few people define. I can define that market any way i want to. A super store online marketplace. How about the way america defines it, does that matter. Which is what, just retail . Walmart plus, yesterday i know that we could say this is anecdotal, its completely not. Its totally empirical. C confluent does the work, if you order a pair of trousers, they find out where they are, and theres not enough, and they can do it. Walmart has the same technologies. Dicks has the same technologies as amazon. Its about the tech stack and if the tech stack is equal, not that she would understand that concept, then you would know there is no monopoly. I would challenge amazons technology with walmarts technology any day of the week. And the 17 states is just political follow through in your view . Yeah, i mean, i got to tell you, i would be careful running against amazon. Greatest bargain in history. What do they want . Not always the greatest bargain in history. You keep throwing that out there. Can i just say theyre not. The American Public is not sitting there thinking, yeah, lets beat amazon. Thats the case, lets crush amazon. I can throw things. I cant throw a baseball. Neither can steven a. Did you see that . Its a very difficult throw. 60 feet. You bounce it unless you practice. Well get cramers mad dash as we count down to the opening dash. Stay with us. Also, were celebrating a landmark day for david davfaber cnbc. Well talk about that in a moment. Everyone is watching levels, 4,300, 7 off the july lies, going to try to repair some of it at the open here as futures are definitely green. Dollar index, 106. 3 is the highest since november of last year going for 11 straight up weeks. Opening bell is coming up in just about four minutes. Explore endless design possibilities. To find your personal style. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. The first time you connected your godaddy website and your store was also the first time you realized. Well, we can do anything. Cheesecake cookies . The chookie manage all your sales from one place with a partner that always puts you first. we did it start today at godaddy. Com all right, we got an opening bell about a minute and ten seconds away. Lets get in a mad dash quick. Okay. There are some companies where you can judge what stocks are doing for earnings, by how many price target boosts there are, and sometimes its contrary to the way the stock acts initially. You take costco. There were six firms that commented on their earnings last night. All six raised numbers. The stock was down after hours. All six raised price targets substantially, you get an opportunity to buy this company. Especially when i have Craig Jelinek in a rare appearance. Why is the stock down at all if it was a good quarter. They didnt give a special dividend, didnt raise prices for members. K people dont understand the way gasoline works. It was a beautiful quarter. Very little shrink, and by the way, inflation going down from all of the different skus. [ bell ] lets get to the open and the cnbc realtime exchange. The big board, asia, celebrating the recent listings of five etf gz. A. The government, education, and health care, tenth listing anniversary. Jim, the other color out of costco was that christmas and gaming are looking pretty good, but computers and notebooks not so much. Thats true. But they are moving up christmas. Theyre starting christmas right now. Talk about going early. Thats what the customers want. I do think that when you think about what lisa su is saying at amd, you talk about what micron might be saying tonight in the report, youre going to have a brand new pc cycle. Its certainly worth waiting at this point, given how the new pc cycle is going to be exciting and whats going to make it exciting is ai. Lisa hinted at that, but i think that were all going to want to change pcs if we can just talk to our pcs. I would like to talk to my pc. I have reservations, i would like to tell them exactly what im allergic to. Im allergic to sardines and an c anchovies. King oscar in a can, better let him out. It feels when it comes to ai, were at a low moment of excitement of investor interest or excitement right now. I totally agree with that. By the way, were not even in i hate to use the baseball analogy. Are you really going to go there, ahead of the playoffs . We are in the earliest days. The earliest days. Look, i think that when youre at dreamforce, and marc benioff is talking about how major banks are looking at how to do it, they will figure it out, and thats who i think can save the most because of efficiencies. They dont need as many people. A lot of companies cant necessarily figure out who to lay off. Goldman, in terms of monetization. Copilot released in about five weeks. And by the way, lisa su did talk about the industry wrestling with the trajectory here. They may not be perfect. Take a listen. Were going to make mistakes. I mean, the industry as a whole will not be perfect here. But i think there is, you know cl cla clarity around its important, and we need to do it together, and there needs to be Public Private partnership. Meantime, were dealing with reports that johnny ives and sam altman are talking about a hardware a ish i device. I think that lisa is being a little circumspect versus what could be out there. I think that when you speak with hp, you get a much more bullish story. In what way . What are you referring to when you say microsoft amd partnership, it really is kind of a were a little more informal, it does have the possibilities of banking so that the wind tail, so to speak, pc, has got real excitement to it, and its an amd cbu chip. Not a gpu. Thats the one where youre talking about talking to your computer and asking it having it become your assistant, essentially in many ways. Right, my copilot. What i would point out, and i think this matters is that we had this big refresh cycle because of work from home, and they were catching pcs, right. I do think youre going to say, wait a second, if i can get a pc that i can talk to that gets to use my own data, then enrique is going to sell it to you, and its going to be an interesting opportunity to buy hp, down from 33 to 25. Kind of interesting. Big cash flow, remember, warren buffet was in there. Although the near term opportunity is in the data center still, and its largely filled by one company. Amd is expecting to be able to compete in certain areas. And would argue, i think, that the pie is big enough that its not like a winner take all situation. And i proposed that to her, that it seemed like its renee haas. Well, thats arm. Right. That its arm, and jensen, which, by the way, they commemorated. I know you love that story. At the booth when he started. Obviously had a grand slam. That is the best thing on dannys menu. But youve got nvidia, and youve got arm. Thats the gpu and cpu. They did not pick a and d, they certainly did not pick intel. This is where jensen and his cofounders cooked up the idea of this revolutionary chip. Just incredible. Trillion dollar company, and by the way, i have to tell you that in terms of cafeteria food, nvidia, the best i have ever had. Really . One star michelin, i think. I mean, i would give it a star. Thats good to know. Very important. Nice to see them celebrating the trillion dollar club in the dennys. I can be as dry as you would like. Would you like me to talk about the cloud fair and i can fgive you that, you want that . I have cloud fair on tonight. In addition to costco. Im bringing it. You bring it every day. What guest do you have . I got nothing. Thats about right. I have matthew prince. You got nothing. You got a whole lot of nothing. You got to know when to fold them. Im trying to think overall, the markets jim i want to get you on oil while i have you here. I think the shorts and the tenyear, the largest short position in the history of the trading report that we get, right, highest in history, and they would be forced to cover, i think, if crude were to go down, but i have no catalyst other than if the saudis change their mind and go against their own obviously incredibly successful move to get oil to go higher. But theyre so far not worried they have always been worried about united states. But as david says, theres tremendous conviction among our Oil Companies collectively. Yeah, well, but youre making a point as you did earlier that theyre not being rewarded for not theyre not being rewarded for returning capital to the shareholders and not going to be rewarded for putting capital into the ground for developing a new resource. They gave huge special dividends last year at this point, because oil was up. That didnt work, the stocks went down. The giant buybacks, that didnt work, stocks went down. Do they switch back to the big dividends. Its not like exxon didnt have a great year last year, not 23 but 22. His stock is still below. I thought mike werth was excellent. We do also, by the way, upgrade of oxy today. Our b of a top pick. Talking about not just capital efficiency but the backlog and the berkshire put in their words. Oxy has been a fan favorite ever since buffet got in and they are very levered and they bought a lot of permian, david. Some people say at the top, and it turned out not to be at the top. I remember when chevron walked away from that. Yes. I do of course. Of course. And oxy faced a difficult time there. For a period, however, they came through it unexpectedly. You followed up, you didnt just nod your head. I do remember that well. We do have to, look, if youre a bull, you need some break in inflation somewhere in the chain, and you didnt get it with durable goods, and july ho housing, you didnt get it with that. Youre not getting it with autos. I dont know where the break comes. Now, costco is the only situation where i heard that theres deflation. Only situation. 1 to 2 is their view for q4. They said it trended down throughout the quarter. Negative year on year in nonfood, which was encouraging. Yes, i thought that the costco was perhaps, when i read it, i was gleeful, heres an operator. You made the point, you said all the reasons why the stock perhaps was opening down but it quickly turned around and all the price target increases. I have been working on the theme about why it was down. Ive come up with this term. Idiots. Theyre idiots. In the sound and fury, which signifies what. Absolutely nothing. Lets talk about target, though because we havent actually gotten to a bit of that news. Nine stores, many on west coast. One in new york city up in harlem citing, well, there it is, violence and theft. Do you believe that . I believe the retail crime rings are real. Theres a lot of home depot inhouse product on amazon, i checked today. But home depot doesnt sell online. Thats organized crime rings. Right. Now, when you talk with any of the Big Companies with the exception of costco, they keep relying databa relying they want to rely on the feds. I would tell you, if you close one or more stores, you would get a lot of bears to go a little right. Like when i met with the mayor of San Francisco, shes very very troubled by stores pulling out. That said, target seems to have borne the brunt to a certain extent. We talked a lot about shrink where theft is the largest component so far, and we talked about target the most, they have given us the highest numbers. 120 increase in theft incidents, involving violence and threats of violence. There were cross currents about why they closed these stores. I continue to believe they are worried about the safety of the people who are at the rengister. In april of last year, somewhere at the register at home depot was killed because they tried to stop theft, and thats what Brian Cornell is worried about. Brian cornell in many ways is not about eps. Hes trying to protect the workers. You cant protect them in the stores. Walmart has a Police Precinct in one of their stores. That ought to do it, right . You would think. Meanwhile, the stock is down 26 over the last 12 months. Costco when they were asked about it, thefts a little down year over year,costco. And the theft, by the way, is at the selfcheck, which is a little more like, you know, people just kind of leave. Do you use selfcheckout . I do at the whole foods around the corner here. I do too. Its a very good selfcheck there. Its not bad. Its fine. Works out. That is a fresh threeyear low on target. Target is challenged. And gordon. Have they not been to the one in coney island . Theyre crushing it. Burlington to me is exactly what you shouldnt downgrade when its down 35 and theyve got terrific items, but its tjx has pulled back from 93 to 88 that i think is really sensational. I really like that one. The one that, david, a lot of people are talking about is tom kings bury going to turn around kohls . Great operator. I dont have an answer for you on that. Yes or no will do. Oh, will it . So i can hold you to something. Tom kingsbury, going to turn around kohls. Hes a great operator. Then ill go with yes. Levis is getting a little bounce, jim, as td cowen outperforms. Worldwide pants. Early innings of a favorable denim cycle. Oh, my god, the denim cycle, i took that denim cycle to the moon with true religion, remember that . I remember jordasche. Remember the inventory. Levis is down a great deal. Chip is retiring. Weve got Michelle Goss coming in there, and i do think its got a good yield. My problem is i dont want to be levered to pants unless its lululemon, they can buy mirror for a fortune, write it off in a couple of years and the stock doesnt blink. Great piece about how its managed to be cool to parents and teenaged kids. Not easy to do. It is. Stores are packed. Theyve dgot great looking stuf. I think you, david, would shop lulu. I have. Ive been in there. Bought a few things phillies looking good in the playoffs. Phillies are coming in hot . Clinched last night. Braves are shorthanded pitchingwise. I stopped paying attention to baseball quite a while ago. Im curious to know your thoughts about this master basic agreement out of the writers where we got some language on ai, at least. We did that they say is favorable, of course. Figuring so prominently in terms of what its going to be in future earnings. They want to make sure they have control over the product they create over time and they wont be replaced so to speak. The actors may have a bit more to worry about in that regard. Certainly an important component of the negotiations they have in terms of using likeness and the like and what you have licensed or not. By the way, we should be thinking about these sththings frankly. Nothing says 20 years hence, couldnt create the trio. We look the same too. Not nearly as entertaining. And chat is a yes man. You can get chat to say what you want it to. 20 years from now, it will be doing much more. Two years from now its going to keep increasing in effectiveness. I mean, look, chat is obviously not working hard yet. No, were on four. You know, theyre working on seven. I mean, its going to be by the way, thats chatgpt, and then youve got baird and other efforts that are underway. Its going to become such a more powerful tool. We know that generative ai, theres no doubt about it. It could be five years were fully recreated. Full image of you. Its going to make us better. All its going to do is make us better. Youre in that camp, the better camp . I am in the better camp. Why shouldnt i be . The copilot makes you better. The copilot makes you so much more productive, david. Listen, i think thats great. I think we will be incredibly productive and then we will be replaced. Someone from the radio industry, it didnt take chatgpt to wipe that industry out. Artificial general intelligence, let me know when i get there. Who just joined us on set, sara eisen. I heard we had some breaking news. Always good to see you. As we mentioned, it is a special day around here, actually for our own friend, david faber. Today marks 30 years since david started his remarkable career here at cnbc, and now normally we would do some sort of look back. We would have a lot of people going on saying i really like david, davids terrific or talking about davids hair, which is something everybody is jealous of. Weve done that already so many times its painful. We decided to reach out to someone, might be the most influential business person on the planet, for thoughts on davids illustrious career. Take a look. I dont care. So you just dont care . All right. One way to look at it. I dont care, just like you didnt kill your wife, did you. We want to bring on someone who actually does care a great deal. Maybe the most important chief executive in your life, okay. Can we bring her on . Yeah, where. Oh, my god, my mother. I knew it. I said it earlier. Im like, dont bring my mother here. Oh, my god. Will you give her a hug, please. Hi, ma, i finally made it to the Promised Land after 30 years. You look fabulous. Five years ago. You look fabulous. I think she loves jim more than me. Well, i mean, you know. Whatever. How long are we going now, five years ago i busted every commercial. Five years ago, we kept going and i ran out of things to say. You look well, ma, i just saw her the other day. 30th anniversary is pearls. Shes got pearls. 30th anniversary, you were going to give david pearls. I was going to go to barts next door but they were too expensive. Do you remember when david said i have this new gig at cnbc . Yes. And did you think it would last . I didnt know what cnbc was, you know, and at first he was doing news. He didnt start off. And i was once away in a foreign country, and i somehow, the news came on, and david was there, very stiff reporting, and i realized how far advanced things were that, you know, cnbc was in, you know. We were global already. Already. But i know you watch. I watch every day. She watches this show, right . And again, were very proud of that. She loves me. I love her, she knows that. I wanted my dad to go out with you, but it was late in the game for him. I think so. Shes still on the market, so, you know, right ma . Whatever it takes. You look good. And you look good. Ive been here ten years. Its an amazing thing to think about your lifes work, which this obviously is for me. And has been for these 30 years. And working with people i love every day who work so hard and i have such Great Respect for, and well beyond that, obviously. Im looking at todd, our wonderful executive producer, and my god, so many of the people i have been privileged to work with for so many years, and people im no longer working with and who i remember so well and went on to other great careers. My first appearance was with Bill Griffeth and neil cavuto on the market it was called the money the money wheel. And then there was bull session. A lot of sessions. A lot of failed shows, no doubt about that. And yet a lot of great historic scoops. Yes. I remember being on set with you when news corp. I remember world kcom. Broke the fraud at world com. Its been gratifying, obviously the documentaries through the year and our team there. Which is your favorite . Probably the one on the financial crisis. The school district. House of cards fantastic. Ive been so lucky and privileged to work with such great people in front of and behind the camera for so long that im going to keep doing it for a little longer. Another 30 years. I dont know if itll be that long. I wont be watching. You never know. You should be proud, a great year. Yes. It was a great year, obviously i know elon doesnt care but sitting down with him. And the iger sperinterviews. And the pga li v. From the early days when you and i started together when you were a hedge fund manager, watching the internet being created, the tech bubble through the Global Financial crisis we dealt with that was the most overwhelming time i can remember as a journalist. To now the advent of a. I. Which we talk about all the time. Id like to know what belle thinks is probably the greatest moment. Whats the most thing i was fascinating with the elon musk interview. I thought that was a singular moment. Wasnt that fabulous. I couldnt take my eyes off the screen. But then all you know, anything he does, of course, i love. Do you know that david was the first person to reveal that amazon violates the 13th amendment. Remember when you did that piece and they were slaves. You mean the documentary, yeah. That your dad liked. My dad watched it over and over. I love amazon but that one, i think about those documentaries and never having sat down with bezos, that was great but not what i you always want more. Thats why im doing it, you want to get better. Thats what i love about you, every interview, i could have done better. Youre the least selfag selfaggrandizing, most selfdenigrating person i have worked with. Thank you, jim. So humble. Its a pleasure. It is. You are the best. Did you take the subway down . No, i got picked up in a car. I didnt walk. You didnt . No. I may walk home. My mom walks 7 miles a day. Thats why youre so young. You did a lot of great things in your life and career. Its in the past. Still a lot ahead. Lets not make it morose. Were not. Do you still call in with tips . Your hair is out of place. The only thing she says is to tell jim she loves him. Thats what i get. Ive loved you for years and years. Surrogate mother. I mean it. My pleasure. David, congrats. So proud of you. Thanks, guys. Thank you so much. Thanks to all of my amazing colleagues out there and to my incredible producers throughout years. Glad to know theres more to come. David faber, guys, 30 years. Back in a moment. Jim, whats tonight . Cloud flare Just Announced deals with meta and nvidia and barely doing anything at all. I have costco finally reversing now up from 20 when we first talked about it. See you at 6 00, jim. Thanks. Congratulations, dave. Sticky tape, dow is up 20. See new a moment. Good wednesday morning. Welcome to another hour of squawk on the street im sara eisen with Carl Quintanilla and david faber. Live for you as always from post nine of the new york stock exchange. Look at stocks this morning, a rebound after yesterdays 400 point selloff. Dow is up, strength in energy, real estate, communication services. Weakness in the staples, utilities, health care, and financials. Here are three big movers, costco in the green after beating estimates. Breaking down the quarter later this hour. And tesla, deutsch bank trimming the price target to 285 per share citing limited volume growth next year. And Regional Banks some of the biggest laggard as the street weighs the higher for longer story and what it means for the banks. Thats the mantra du jour and driving the ratings. Lets dig into treasury yields and whats happening there. Interestingly were not seeing a tick up in Inflation Expectations and a lot of this does hinge on inflation. Thats why the fed wants to stay high or go higher for longer. Its delivering alpha season here at cnbc. We have our big Conference Tomorrow so we have the survey out from investors and strategists that we poll in advance and i thought the response on inflation was interesting, because we asked over the next 18 months inflation will do what . So 59 majority say fall from this point. But its not that. Its kind of split. 41 say hold steady. 0 say it will stay worst. I think the 41 hold steady is partially what is a worry for the fed and for investors. And what that might mean ultimately for policy and whether it gets us into a stagflationary environment where we have lower stagflation but lower Economic Growth. Today j. P. Morgan said the yield surge has not been matched by a rise and break evens they figure half of the move is not fundamentally driven chlk. They think its technical. Weve heard supply issues and worries about the deficit. It could be factoring in many there. The odds of rate hikes have moved up a little bit but not to the extent yields have risen. I thought costco was notable. Pulled this one out, because they always comment on inflation and the consumer and they say their estimate for q4 is 1 to 2 , thats okay. And its trended downward. So these inflation trends will continue, meaning downward pressure. We have to see. Thats what you want to hear. It is what you want to hear. You mentioned the deficit and supply a number of times as of late. Those are issues if they are having an impact its hard to imagine theyll go away any time soon, even as fed policy perhaps changes over time. Is that something we believe is in part at play here or is it lai layered on . Its layered on, and we wont know until we see the fed come down or the economy start to fall. But i know this, yesterday we got Consumer Confidence that missed. H home sales that were weak. That should be positive for bonds, and they reversed the other way. So there is something going on out there about whether its the deficit, the supply that needs to happen, or whether its technical in nature. Well have to wait. Because its your 30year anniversary on cnbc i made for you the fed Balance Sheet because you asked me about it every day. Theres the peak, right, during covid. 9 trillion. Im glad you asked because last week something funky happened, the biggest weekly draw down we have seen so far. That 75 billion. Part of that is paying back from the Regional Bank crisis loans and part of it is the qt. The fact that the fed is trimming the Balance Sheet. Why its important its de facto tightening and why the rates are rising. Right. That does also put upward pressure on yield. That puts into perspective what were talking about. Its 8 trillion instead of 9 trillion. But the direction is important it could be a headwind for stocks and bonds. No doubt. Simple percentages say going from 7 to 6 it has more of an impact as well. If we get to that point. If we keep going down. So far the fed hasnt gone there in terms of using the Balance Sheet as a tool for offsetting weaker Economic Growth but we know they will if they have to because they have done so before. Thats maybe comforting to the market but id watch it. It could be part of the reason were having some discomfort in the market. Kind of a mike santoli way to put it. The economy is doing well our next guest says, thanks to c consumers defying the gravitational pull from the fed rate increases. What are you worried about . Im worried about everything that everybody else is worried about. The number one issue for me is inflation. If inflation continues to come down as i think it will, itll offset a lot of the problems out there. A Government Shutdown, if if it occurs wont last that long. The uaw strike is going to be settled at some point. But the key is inflation, i think supply is an issue now all of a sudden with regards to the deficit. I think ever since the Government Debt was downgraded on august 1st, people have been focussing on the deficit issue. And if inflation comes down, then i think we can live with the deficit issue. If inflation kind of stays sticky here, i think well have a real problem with the deficit issue. And the bond vigilantes may need to come into the horse here to really convince politicians we have to do something more fundamental about reducing the long term outlook for the deficit. Were fortunate to have you because arent you the coiner of the term bond vigilantes back in the early 80s . Yes. Thats your claim to fame. My claim to fame. Are you saying theyre coming to the u. S. Itll be on my tomb stone. Exactly. Thats major. Thats like bricks. Are you saying the u. S. Government should be worried about bond vigilantes coming here . Absolutely. The Biden Administration should put james carvel on their pay payroll and talk to him. He said in the 1990s, he should keep the deficit down or the bond vigilant es are coming for him. And the bond vigilantes have been sleepy for a long time but theyre waking up, thats a danger for the economy and the stock market. But if inflation continues to moderate as it is and will continue to, i think that gives us buys us some more time on the supply issue. So inflation comes down, you think the fed wont have to be as aggressive. Right. And that calms some of the fears over fiscal . Thats the best Case Scenario. Thats the best Case Scenario. Thats my baseline but im worried about everything the way everybody else is these days. Can the market continue to rally because the stock market story has been the soft landing weve done this and so far gotten away with lower inflation and not a recession. That has to happen too, right . Yes. Ive been in the soft landing camp since early last year. Argued we were in a recession but it was a rolling recession. But right now i think the issue is whether the economy can continue to grow and i think the answer is yes. I dont think i find myself in position arguing now that the economy is going to slow, whereas since early last year i was arguing that heres why its not going to fall into recession. But yeah, i think all in all we have an economy thats pretty resilient. In terms of the stock market i thought wed get to 4,600 by year end when we basically got there at the end of july i concluded we were going to stay around this level, the second half would be tougher than the first half. I did think we might redestest 200 day moving average, and then i think a year end rally getting us back to 4,600. Why . Because i think the Government Shutdown will be behind us. The uaw strike will be behind us. And if im lucky, if were lucky, well see inflation coming down and the economy slowing. Yeah, ed, i know some people were pushing you to hike your target for year end more to 4,800 you resisted and thats paying off at the moment. So far. Some argue, the desks are out saying theres a backdrop going into earnings season but last night you posted a chart of earnings expectations ticking lower for the september 21st week. Thats not great. Its not great but its one week. We watch it its kind of my responsibility if im going to watch all these things to update people on whats going on. And it is what it is. I think some of this concerns about the Government Shutdown, about the uaw strike may have affected the latest weeks earnings. But as you know, the analysts for the past several weeks, which i think is more relevant is, theyve been actually increasing their earnings estimates for this year, next year, and for 2025. So i go with that trend of the past several weeks rather than suddenly conclude that this latest one week weakness is an issue. But im watching it. Ed, bond vigilante father i guess we can call you. Thank you very much. Thank you. As we head to break, our road map for the rest of the hour. Leigh khan takes aim at adam kinzinger. What it at amazon. What it means for tech. We get a top pick from one of the Fund Managers big show ahead dont go anywhere. So this lawsuit is fundamentally about protecting free and fair competition. And the u. S. Antitrust laws prohibit firms from using their monopoly power to punish or preclude or prevent competition. Thats what our lawsuit lays out that amazon has done. Thats ftc chair lina khan earlier this morning discussing the lawsuit against amazon. Our next guest said the complaints are, quote, plausible doug melman joins us now, he was a top attorney in the doj case against microsoft in the 90s. Great to see you again. Thanks for the time. Nice to see you. Hard to read into it with the redactions and not knowing amazons defense. Youre not dismissing outright it sounds like. No, this is a serious complaint i think. It alleges like the microsoft case, the u. S. Case against google, it alleges that amazon has am monopoly. We were talking about the 17 states and whether thats inertia or is it significant . Its a big number ordinarily but its quite a smaller number substantially smaller than a number of states that joined the ftcs case against meta and the Justice Department case against google. So there is an interesting question of where the other states why arent they joining the complaint. Possible they have political reasons possible they have concerns about the complaint. How important is the definition of the market itself. The on line super store . That one, it looks a little bit contrived because theyre comparing amazon to walmart and just a couple of others and eliminating other kinds of online sales. Its important. But they alleged two markets. If they can prove either of them they can probably move that amazon has monopoly power. These things stretch out typically i remember microsoft over years. Is that your expectation here as well . Yeah. This is going to be a fog, i think. A lot of difficult factual issues here. We dont know amazons defenses. This case wont be dismissed right away. It states a claim, if you accept the facts as alleged, but it will take time to litigate it and resolve the allegations and defenses. Doug, this ftc under lina khan hasnt had a great track record when it comes to defending the cases in court and prevailing. You see this one as different . I think theyve had problems in the past not because they tried bizarre theories, but because the facts havent supported their claims in the cases they lost. Here the question is, will the facts support the claims . They alleged two kinds of anticompetitive conduct, one i think is weak, that has to do with requiring vendors who use amazon prime also to use amazon fulfillment centers. But the other allegation about efforts taken by amazon to suppress price competition. If the facts support them could be a substantial claim. Sorry, i you know, i forgot my question. I was answering some texts. Ill pick it up and ask whether or not you think there is some deg gre designation in integrity in the agency given what weve heard about the staff and what they weve seen in court so far. Chair khan has had difficulty winning over the staff, a lot of people have left and they left because they dont like the way shes running the agency. To some extent shes come in with an agenda saying what weve done in the past isnt right. You want to change course. Youre going to shake people up and have people who say i dont buy into the new agenda. So thats to be expected. I think the problems maybe have been a little more serious in the past than they had to be. But it you know, theyre i think theyve gotten the ship a little bit righted. They hired some good people in the last several months. So i think you have to look at this case standing on its own merits and not dismiss it because of problems the agency had in the past couple of years. Doug, i remembered my question. Its about the movement of markets in technology. They dont stop. Theres an argument to be made that things continued to evolve in a way thats perhaps more competitive. Does that figure in at all to how a judge will decide the merits of the case . I think, of course, antitrust laws always look for the goldilocks spot you dont want too much Government Intervention to interfere with the market but on the other hand if you have too little, allow the big guy to extinguish competitive threads before they have a chance to get off the ground and mature then you intein interfere with the process youre talking about. Thats what this case is about. If the facts support it, theres a claim that amazon has been suppressing opportunities of others to compete against its platform and perhaps shake things up and make some new evolution and new improvements in online marketing. I know youre waiting, doug, to hear from amazon on their rebuttal and their facts. But for investors, whats the upshot . Whats the worst Case Scenario for amazon as a result of all of this . I dont think this is going to lead probably to any kind of major structural change. I think, as i said, i think the stronger of the two claims has to do with the behavior regarding competitive pricing, and if the government were to prevail would probably lead to a remedy that would say dont do this or anything like it again in the future. And whether that would have a big impact on amazons business, i dont know. Im skeptical frankly this is going to be huge importance to amazons business but it might affect the market a little bit. Finally, doug. Does the complaint act as yet another deterrent or suppressant or are corporates in that realm used to this . I dont think this has to do with m a, the proposed guidelines and the activities the agency has been taking and threats theyve been taking in the merger area probably have a deterred effect. But this complaint is one of those oneoff complaints about a very substantial company. These days those companies that track this kind of litigation, i dont think that changes the calculus. Doug, really good read, eye opening on this and well look for your help in the future if you dont mind. Good to see you, thanks. Thank you. Still ahead, check out this mystery chart. Its plunged more than 30 this quarter but named a best idea by one Top Tech Fund magenar. Well talk about what it is and why hes bullish on it when we come back. Called you first but i was trying to get to you i was dreaming while i drove the long straight road ahead i drove all night to get to you the distance is nothing when home means everything. Been a tough quarter for chip stocks, unperformed the s p despite big gains earlier in the year. Kristina partsinevelos joins us. She has the results from micron. Yes. Ill be covering that. We see that prices may be changing the corner but micron has an overhang, china. That is in may, they moved to ban micron products. They estimated half of the china and hong kong revenue exposure were at risk. Thats 13 of total revenue sre. This quarter that well talk about at 4 00 p. M. Is the first to show the ban. Despite the ban, analysts are expecting an improved environment for micron. The stock is up 2 from the june. Why is that bullish call coming . Firstly all three memory makers have been Cutting Supply to undership demand. And thats helping dynamic memory prices. This past august, micron management said the pc and smart phone inventories are in good shape. Although they pointed out Data Center Revenue remains challenged but nonetheless were seeing the return and another potential driver has been bidding on a higher guidance and that has to do with a. I. Of course. Micron is working on new bandwidth mecmory. They expect meaningful revenues in 2024 and has already received strong feedback from customers. And pivoting to amd, because the ceo spoke last night and weighed in on the timing of the current a. I. Cycle. Listen. Were in such the early innings of how a. I. And especially generative a. I. Is coming to market i view this as a tenyear cycle were talking about. Not how many gpus can you get the next two to four quarters. So not a flash in the pan when it comes to a. I. Despite the mixed commentary that maybe were not going to see revenues from the a. I. Push. Its all nvidia thats only going to benefit. But we do know that amd is launching their chip in q4 of this year but really ramping up next year. Theyre going to benefit, maybe thats why shes pointing to this being a longer process. The argument is the pie is big enough for so many to benefit. Exactly. And the price point is supposed to be cheaper. Still questions on the specks on how they compare. I think the main selling point for nvidia is going to be the software. So lets see how amd stacks up to that. Expense is important when youre outfitting the data centers. Exactly. So Many Companies were not factoring in the cap x that goes to powering the infrastructure. We can spend 20,000 on, you know, x amount of gpus and maybe have 100 in our unit but to power the entire system is to expensive, which is why were going to start or companies will start renting, you know, the gpu space in the cloud and can benefit but thats a factor in the coming year. Micron, nvidia, amd is in a. I. Are they in different stages or powering different parts. Powering different parts. Micron hb 3e and theyre working on the memory part of the chip. Thats separate from the Graphic Processing Unit that nvidia is working on. Amd is known for the central processing unit but they too will come out with the graphics. The graphics chip with nvidia is visuals, images, all that and they process quickly versus cpus thats a little bit slower. Getting a little technical. Gpus over cpus for sure. Yes. Do you have a question, david . No, im good. I never know these days. I havent phased out. Im good. After 30 years youre forgiven. Im not answering texts too. I thought you were choked up because of your mother. Shes still here. I dont know shes not going to leave. Tomorrow ceo of micron Sanjay Mehrotra joins us at 9 30 a. M. Eastern. And next, the tech fund manager making the call on this mystery stock make joins us next. Can help you build the future you imagine. T. Rowe price, invest with confidence. Welcome back to squawk on the street. Heres your cnbc news update. New jersey senator bob menendez walked into a federal court this morning in new york to respond to corruption charges alleging he. His wife used his influence to pocket hundreds of thousands of dollars in bribes. Hes expected to plead natural gas. U. S. Soldier travis king is back in american custody this morning. North korea said they would expel king two months after he intentionally ran across the border into the country. State media confessed he bolted to north korea because he was disillusioned about the ration discrimination and treatment in the army. And Israeli Citizens will be able to enter the u. S. Visa free soon. The Biden Administration accepted the key al lie into the Visa Waiver Program starting on november 30th. It means all u. S. Citizens will be able to enter israel without a visa as well. Silvana, thank you. Stocks are on pace for the worst month of the year now as higher yields continue to weigh on things. But that said, some tech has been holding up. Meta up triple digits on the year. Lets get to mike santoli with the breakdown. Its interesting to see meta go against the grain. Earnings e mats are surging, up 30 in the last six months and alphabet their estimates are rising. A lesson how tech is multiple things. Not just the inverse of a bond yield not just safety although sometimes it has that aspect to it. And its not just pure growth. If you look from a little over two months ago in late july when huh the ten year at three and three quarters, thats really started the surge. It was july 19th. The nasdaq, equal weighted s p and the discretionary from that period. You see the real impact of higher yields is about what is it going to mean for the real economy, for the consumer as opposed to the arithmetic as what it means for growth valuation. This month tech has backed off a little bit more but in general megacap growth as a category has held the outperformance since june 1st. So its gone flat versus the market since june 1st. A lot going on the. The yield sensitivity on the market is extreme right now. Tech is not immune to that but its a more nuanced picture. Goldman points out 10 draw down is about as bad as weve had for, say, the past year. In a bull market thats usually when you get. People feel like its gotten overdone. Everyones gauges had that read out as yesterdays close was coming into view. Which was were startling to se the washout conditions, doesnt mean you buy but you have the recipe for a balance. On the flip side, everyone focused on the structural shortterm fragility where you have the selling by trading firms. And i think the more important of the flows is the knowledge of those flows and those levels that everybody has at all times on their screens. So it creates a greater awareness and maybe a greater, i think, nervousness around them. Thats how you get the market oversold. It happened last october. Not saying we have to go that deep but seems like thats the process under way. Equal weight versus the s p, top ten are 30 of the s p index. Absolutely. Its become more extreme. I was less concerned about this when you see both of those lines going up. If the equal weight is going up less than the mega cap rate, okay. Both in up trends okay its where youre making more and performing. Now youre seeing breakdowns. You see small caps no longer in an uptrend and creates, depending on your view, thats where we hunt getting a big market snap back or the underpinnings in the market has not been great. No matter how you think about things this has all along been an underperforming bull market. If we call it a bull market, since last october, an unimpressive one. Why . Since then it was not a comprehensive washout. You didnt reset valuations that much. You didnt set the market up for multiple years of amazing returns which is usually what a bear market does. But this is a 20 drop usually you get 30 on average. We got it at the highs, 30 in the s p. Now we have to figure out whats happening in the really economy to decide the next move. I would only add oil prices to your first chart. Thats why the consumer has been so weak not just yields. Its all of it. I look at every direction you look, it doesnt look like you have daylight. And that has been energy prices, its been yields and a dollar. Although the share of disposable income its not critical. Yeah. Psychology. I also feel if i cant imagine we look back and say the bull market of 2023 ended when the economy was great and the fed was fine with higher for longer but rates got too high. Thats not how it ends. The economy has to succumb or were okay. How are investors positioning into q4 lets get to leslie picker. Im joined by gill simon, thank you so much for being here fresh off of your presentation in San Francisco which i want to get to in a moment. But maybe if we can kick off where they left it in the last conversation with mike santoli about the Broader Market. As a tech focused investor im sure you have seen some volatility over the past few years or so. The nasdaq rebounding a bit today. Sliding yesterday. Investors grappling with the idea of higher for long erwhat that means for tech valuations. How are you screening . Is it profitability, growth, owe factors youre looking for . How is your portfolio positioned for hedging and cash on the sidelines to account for all the uncertainty out there. Hi, leslie. Thanks for having me back on. Nice to be back. So this year as you have spoken about quite a bit, has been led by the biggest companies, a flight to safety. A flight to a lot of the megacaps as you talk about the magnificent seven who have been cost cutting, who have scale. People want predictable in this market. Weve been looking for, optimizing for, duration. Where the market has lost duration with the rates going up the last couple of years theres been opportunity in companies that are maybe earlier in the life cycle, maybe arent currently profitable. Or just have some more complexity to kind of their story and profitability. So a couple of names were going to talk about fit that bill and theres definitely a lot of opportunity right now in the market as we see it. I want to see an example of that. Your pick was road blocs. How does that fit into your solution, this stock hit a post ipo peak nearly two years ago, been essentially range bound at one fifth that high for the last 18 months. What cat liezs this stock . The stock is down 60 or 70 since they ipoed a couple years ago. It was a darling stock, direct listed, a play on the idea of the metaverse, which everyone was excited about a couple of years ago. We think there are aspects people dont appreciate about the company or fully understand. One is the scale theyve built to. So its now a 17yearold company. It has 300 million monthly unique users. Almost 70 million daily unique users. Thats more than tripled since before the pandemic. Theyre engaged at higher levels than tiktok or youtube at an average of over two hours a day. So the scale engagement of the platform are unique. The other thing we think people dont fully understand its a great Business Model. They dont create games themselves. They attract developers to develop games and publish them on the platform. What roblox gives are the infrastructure, the developer tools and their in the roevenue to attract those developers. But theres already an audience in the platform and all that should lend to high ultimate profitability. The problem is in the short run the company is investing significantly to catch up with some of the big growth theyve seen in users since the pandemic. But also, several meaningful initiatives, including layering in advertising onto the network for the first time. Including layering in a. I. To help developers make games. As well as trying to age up the users of the platform, which are around 13 years old today. So a lot of initiatives, a lot of investment spending. We think theyre at the peak of their investment spending now and the Company Continues to grow really nicely into this big kind of social media platform. Not just i think what a lot of investors view as a gaming company. I hear what youre saying in terms of the engagement and the a. I. Overlay. You say this is going to be a double from current levels. At what point does that peak investment spending ultimately filter through to the fundamentals and at what point does the Broader Market appreciate it . The stock is now up about 2 , and steadily climbing higher since you started describing your case. Good i should come on more often. I hope its not my kids buying stock. If you look at their Business Model before the pandemic they had 19 ebitda margins. During the pandemic the usage spiked. Kids were at home. And so both the growth and the margins spiked and theyve been investing to catch up with the massive growth and usage. This year the margins are troughing around 10 . Last year below that. We think the next few years is a nice trajectory for them to increase the margins by as much as 300 basis points a year. So we think next year will be an up year. This year will be the trough. And looking out to 2025 and 26 we think the margins could be back in the 20s. Uber is your Largest Holding up about 83 yeartodate. Are you crystallizing gains or holding this for a longer haul . A great question. Our largest position still. We bought during the pandemic so when people were not sure if we were getting back into cars with strangers again. It presented a unique opportunity to buy into this company. The company has done an effective job leveraging their structural advantages. If you look at lift stock. I think now uber is 90 billion, lyft is 4 billion. Thats their biggest competitor, they struggled to make money, keep up with uber. So the stock is up nicely this year, but just starting to get respect on the streets. If youve followed the story the last few years its been a headache of a stock. A lot of investors owned it before it was public and the last few years was a tough period of time to own it because it came out of the gates, its ipo with question marks if you remember the management turnover they had and then, of course, the pandemic really threw a wrench into their growth. So in addition to also regulatory questions, which have always kind of circled around this company and driver classification issues. So we think the company is starting to get some respect finally and we see a path still for the stock to double from here. So youve got uber, which suffered in the pandemic and now up nicely. And now roblox, benefitted from the pandemic but now down you think has the ability to go up . . Yes. After the break, the read on retail. Target shutting doors and what costco says about consumers. But first time to register for the delivering alpha summit. You can scan the qr code on the screen or visit cnbc events. Com delivering alpha. Well be right back. With comcast business. It is. Is it possible to help keep our Online Platform safe from cyberthreats . Absolutely. Can we provide health care virtually anywhere . We can help with that. Is it possible to use predictive monitoring to address operations issues . We can help with that, too. With the advanced connectivity and intelligence of global secure networking from comcast business. Its not just possible. Its happening. vo explore the world the viking way from the quiet comfort of elegant small ships with no children and no casinos. We actually have reinvented ocean voyages, designing allinclusive experiences for the thinking person. Viking voted worlds best by both travel leisure and conde nast traveler. Learn more at viking. Com. Ah, these bills are crazy. She has no idea shes sitting on a goldmine. Well she doesnt know that if she owns a Life Insurance policy of 100,000 or more she can sell all or part of it to coventry for cash. Even a term policy. Even a term policy . Even a term policy find out if youre sitting on a goldmine. Call Coventry Direct today at the number on your screen, or visit coventrydirect. Com. We are asked often recently about our inventory shrinkage results and whether its dramatically increased in the past year. And the answer is no, our inventory shrink is a couple of basis points in part due to the rollout of selfcheckout. So no, thankfully not a big issue for us. That was costcos cfo ieludig to this idea of theft noting not a big issue for costco beau it came hours after target announced plans to close nine Stores Across the country due to high theft levels. I do wornt how much of it is targets urban i do wonder how much of it is targets urban exposure due to the fact its more heaviily weighted in urban cities. Thats the point. Well go through geography. Where target is closing one of those new york stores theres a costco in the same center. So shrink, or inventory loss, particularly theft, has gotten attention from retailers theyre calling it out like they havent before but its not an issue for all retailers, there wasnt pressure on growth margins for that retailer or left the as a source of shrink. The membership model likely has something to do with it you have to have a membership to go in and shop there. Costco beat expectations. But they did call out strength in food and weaker sales of nonfood, big ticket items. That weight on costcos online sales in particular, they overindexed. The cfo did said one ounce gold bars sell out in a few hours on the website, limit two per customer. But shrink is an issue with retailers because theyre pointing to it in varying degrees. Theft was largely in line with past years, at least as a percentage of shrink in the Retail Industry overall. Target has quantified the issue and is closing nine stores due tost, target will close three stores in the San Francisco oakland area. One store in new york city, in the harlem area, two in seattle, and three in portland. And three of those areas, as you mentioned, are also identified as top cities for organized retail crime by the National Retail federation. Also, again, largely urban areas. Target says, quote, we cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests and contributing to unsustainable business performance. When reached out to ask about more details, but target not disclosing anymore details at this time. It just oppose up a lot of questions, again, why is it happening at certain retailers and not others . Again, to your point, certain cities do seem worse than others. Or even certain locations. You did mention, of course, that target, that im familiar with as well. The one on the far upper east side. Yeah, around 117th street. Yeah. But right off the fdr, where the costco is. Again, are we going to get a little more information around the decisions particular to these locations . Because you seem to be, at least others are raising questions as to how much is theft and how much is perhaps that they simply were not pulling their weight . Yeah, i mean, again, thats kind of why we wanted to know some of the financial details of what was happening there. Does it have to do also with customers potentially feeling uneasy, so then traffic is lower because theres crime. In some case, maybe its the latest. But i think it was really interesting, david, yesterday, where they talked annually to retailers, asking them about shrink. And theft is one part of shrink. It is the biggest part. But the one area that actually increased was the thing that retailers had control. Process failures, other kind of forms of inventory loss or damage. So i just find that interesting, as well. I think theres just still so many questions. I also think its harder to steal from a costco, where everything is like in tenpacks and i cant even fit that stuff in my apartment. Good point, too. Courtney, thank you. Appreciate it. Quick note as we head to break. This friday, do not miss an exclusive sitdown with jane fraser, fresh off of these new move shes made to restructure the bank. That is at 10 00 a. M. Eastern right here on squawk on the street. Dow is down 91 and the s p has gone negative as well. Werba ia mee ckn mont. That first time you take a step back. I made that. With your very own online store. I sold that. And you can manage it all in one place. I built this. And it was easy, with a partner that puts you first. Godaddy. While latinos are the second largest Population Group in the united states, new data shows theyre massively underrepresented on corporate boards. Our Contessa Brewer is live from the latitude conference in miami beach with more on that. Hi, there, carl. The good news is that theres progress. There are latino directors on 40 of fortune 1,000 companies. Thats a 5 increase over last year. Up and 27 since 2011. According to a new report from the latino Corporate Directors association. But the bad news is that progress is ponderously slow, especially in the biggest companies. In the fortune 100, theres been only a 1 increase in the last year, or in other words, one more company added a latino director. And for latinas, the women, the representation is downright abysmal. The overall picture is one of profound underrepresentation, considering nearly 63 million americans are latinos. Advocates say there is a distinct upside to having a latino director and a downside to not having one. The upside of having latino Corporate Directors on your board is youre more connected to the Business Case rather than the diversity case. Which is substantial growth in a market that hasnt been tapped. The cons is that you wont make money. In a new mainstream economy that is now 25 of the population by 2050, if youre not playing in the game, youre going to be out. And whos leading the way . Here at latitude, theyre highlighting bank of america, ulta, general mills, biogen, Federal Home Loan Bank of San Francisco for having two or more latinos on the board. Bank of americas Ceo Brian Moynihan actually says that mir rowing the communities they serve drives responsible growth. David . Contessa, thank you. Well, that does it for this hour of squawk on t see otr g ur, straight ahead. Good wednesday morning. Im Carl Quintanilla with sara eisen on the floor of the new york stock exchange. Is october opportunity ahead as we close out a rocky september, will the next month bring back the bulls or is more pain ahead . Youngyu ma will way in. And low inventory and record prices, can the Housing Market hold on or is a big downturn ahead . Z zillou founder Spencer Rascoff is here. And why David Rosenberg says