Consumers getting more cautious. Instacart is getting ready to make its debut, pricing at 30, implies under 10 billion valuation. Indications for the first trade above 39. Well bring you that first trade as it happens. Topping the tape, market is in wait and see mode ahead of the Federal Reserve meeting tomorrow s p is selling off down 0. 6 of 1 investors widely expect there to be no change about Interest Rates but the message about the path forward will be key lets bring in cnbc senior markets commentator, mike santoli. What is expected in terms of the tone and the outlook for rate . Tone will be to maximize flexibility and react to data as it happens thats the mode they want to stay in. I dont think theyll necessarily try to put 100 chance of a november hike on the table, but have you to be open to it and respond to the numbers. I think that the market movements, the yield move on the long end as well as whats happening with fuel prices, it complicates the story, but i dont think in the direct way of saying, now they have are more likely to tighten i think higher fuel prices more immediately pushes against growth and depletes the ability of consumers to feed inflation elsewhere and discretionary items. The historys clear. 2008, two fed members dissented from the cutting of rates after bair sterns failed nobody looks back and says, that was a great idea we should have raised rates instead of cutting 2011, ecb, same thing. They hiked into an oil spike, although that was a brief turnaround. Exactly my point is, i think theyll not necessarily just take that on face value and say, this is inflationary not to mention the external factors, the strike, the shutdown, the Student Loans and Energy Prices that at least some doves, Morgan Stanley is a good example, thinks thats additional reasons to stay pat. That gets at what the market is most concerned with right now, which is how long can this expansion stay sturdy . Is the economy going to remain resilient . Youre seeing the consumer cyclicals and industrials waiver i think thats why the fed is not the worry point number one, at least until its clear it went too far. And, you know, the stronger oil prices, higher bond yields, stronger dollar, and whats happening, it doesnt typically happen, is that oil has been marching higher and the dollar has been marching higher alongside it theres one of my charts of the day today. Thats never quite a good sign they usually move in opposite directions i think the last time that happened was, i dont know, around covid times. It did happen during covid times. When there were concerns around oil. Ive definitely seen the correlation has loosened up n part because the u. S. Is a net exporter of oil. In the old day the petro dollar was we need to buy oil at higher prices overseas and that hurt the value of the day jpmorgan pointing out its looser of a connection both of those things act as tightening mechanisms, dollar higher and oil higher are both restraining growth on some level, restraining profitability on some level. Also with the yields and oil, if its all supply driven or at least largely supply driven, too many bonds being sold, not enough oil being bruised because opec is withholding it, thats an economic message, too its not just demand pull type story with oil or obviously growth looks better, therefore, yields are going up. Mike, well talk in a little bit. Mike santoli starting us off. Take a look at what the recent rise in oil might mean for inflation and the feds decision our next guest says a combination of reasons may push oil over creating downside for 2024 citis ed morse is with us thanks for the time. You have had elements of a dovish message on crude for much of the year. Is that changing wholesale we had a quite bullish view we werent so far off in arguing it was likely to average around 83 a barrel, which is more or less where it has been averaging, although now its being pulled out higher than that yes, we definitely have a view that supply will outweigh demand sooner rather than later in that sooner were on the edge of refinery maintenance and that means there will be a lot of oil unsold in the market and filling up inventories in a way we had the summer with the cuts accelerated by saudi arabia and russia making sure that there was a pull down, an inventory draw we see inventory draw turning in the coming months into what we think is a certain inventory build wherever demand is going in all likelihood. What kind of on the downside next year, what might we be looking at so, were looking at demand growth thats going to be significantly lower than what we think has been forecasted. We think there are a lot of people with us that are arguing that between europe, china and the United States, the slowdown of the entry into recession is going to make it clear that Global Demand growth is going to be in the low 1 million a barrel plus day just as gdp growth is likely to be lower next year than this year as a whole. With that, nonopec production alone can more than satisfy the demand growth. So, were looking at prices weakening to blow not only 90 but below 80, into the 70 range in 2024, all else equals, and it will make it difficult for opec to bring money bring oil back to the market thats going to probably create a little dispute within the opec countries themselves we have five what we used to call the fragile five countries. Theyre all seeing higher production rather than lower were pretty certain iran will be up between now and the end of the year iraq has a dispute to work out between baghdad and ankora, basically, on the reopening of the kurdish pipeline we think its in everybodys interest to see money flowing, whether youre in kurdistan or baghdad or in turkey and we think sooner or later, probably by the end of the year, well see that 450,000 barrel a day flow going up. And on top of that, iraq is adding more oil. Mexico and venezuela adding more oil. We see we see even nigeria potentially producing half a Million Barrels a day, more on average by the end of the year than they were all last year and the year before. So, we think theres plenty of oil in the market to bring prices down. Once we get through this hump. The hump has been created by taking a little too much oil out of the market, for cautionary reasons, at a time when inventories were unexpectedly very low ed, i talked to secretary yellen yesterday about this. She said they are closely monitoring the price of oil. Weve seen this administration take action before when oil prices got too high. What are the options for them . Whats the magic number . Well, we think were getting through the magic number it depends on whether we hit 100 and how long it stays above it you know, the administration is concerned about Heating Oil Prices the theyre concerned about gasoline prices. What can they do about it . One thing they can do about it is focus on where the real shortages are. The biggest shortage is in the east coast one, lack of refining capacity, lack of Pipeline Capacity to bring in products from refining centers of the country and we have this obstacle called the jones act which means you need an american flagged vessel to bring oil from the gulf coast to east coast if they suspend that, that will make life potentially easier they already indicated theyre going to halt after this round of filling of the svr is completed. But other than freezing exports, which we think theyre not going to do, theres not much else they can do to deal with the situation. Other than working on getting that iraqi pipeline up and running. And see what theyve done in encouraging more iranian oil to come into the market. Its been a tough market to read, trying to see around the corners for much of the year well see if you can help us see around this upcoming one ed morse at citi. Turning to one of the hot stock stories, instacart set to start trading today at the nasdaq leslie picker is there what are you seeing in the latest indications indications coming in about 40. 50 a share or so, that implies a gain of 35 from the 30 ipo price. But were still about an hour, hour and a half away from the first trade. Right now the underwriters of the nasdaq, theyre finding that price that matches the highest number of shares, buyers and sellers paired together in order to open the stock. Theyre currently they currently have matched about 1 million shares out of 22 million total. Now, technically about 13 million shares are claimed by the cornerstone investors which is norges bank, d1, tcv and valiant agreed to buy at that price. No money has changed hands quite yet. A higher open would be a reprieve for a company that initially filed confidentially 16 months ago, waited for the right moment as higher Interest Rates prompted a selloff in Technology Stocks. Its not the only company grappling with what could have been, though theres a large proportion of vcbacked startups that reached their nearterm valuation peaks two or three years ago theyre deciding whether to do a down round ipo or stay private a little longer. Thats why weve seen such a large drought over the last 18 months in the ipo market on paper, instacart is profitable, its growing, multiple is coming in at a discount but investors are weighing intense competition, both from grocers and other platforms like doordash. Well be here to monitor the action from the nasdaq as the matching continues were expecting an opening somewhere afternoon, maybe 12 30 or so, but, you know, stay with us and well bring you the latest leslie, thank you leslie picker this morning another important day for the ipo market well hear more from instacart ceo fidji simo. Chipotle hope consumers dont buy more groceries and continue to dine out Ceo Brian Niccol is with us next ella fashion moves fast. 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Get way more into what youre into when you stream on the xfinity 10g network. Watching disney today, the worst performing down name this morning, near session lows, announcing plans to invest 60 billion in its parks and experiences division over the next ten years, doubling that investment shares down almost 4 as their investor day continues kind of unwinding the progress it made from 79. 75 up to 85 the last couple of weeks. Wasnt this a costcutting story at disney with the iger strategy the whole strike about union wages. Yeah, exactly a lot of spending. Markets giving a thumbs down lets turn to the restaurant space. Chipotles latest earnings showing the company is still dealing with food prices the stock is down more than 8 since that report in july. Joining us with an update is chipotle Ceo Brian Niccol. Welcome back how is that Inflationary Pressure looking overall in theeconomy and food we start to see it come down yeah, good morning. Good to be with you guys weve seen kind of the inflationary environment moderate its still in the mid Single Digits with labor and food yeartodate weve taken no pricing, so were actually behind the inflation that youve seen in restaurants in general as well as at the grocery store. Were always evaluating the puts and calls we need to navigate through. Fortunately weve got a great brand with really powerful pricing command. If we need to take pricing at the end of the year, obviously well do that. I hope we can get back into a normal cadence of how we used to do this. We do it like once a year in that 2 to 3 range. Very predictable i hope we get back to that way of doing business. This year it will be more than that . We havent decided yet. Based on how weve seen the year go, part of the reason we held off doing any pricing yeartodate, we wanted to see what happened with inflation, both on the labor side and the food side. And it appears to be moderating. Im optimistic well get back into the normal cadence we did historically, the 2 to 3 range. What about the labor environment, what are you seeing there . Particularly, how do you plan to manage through the minimum wage hike in california to 20 . Yeah, you know, weve always paid well above minimum wage, the same to be true in california obviously, i think that takes effect in april of 2024. And, you know, accordingly, well take a look at the whole business and evaluate how much needs to come through pricing versus how much we can grow through it im sure some piece will be handled through pricing. On a national basis, you know, labor appears to be, again, one of those things thats moderated in the mid single digit range, which is something we can plan for and manage the business accordingly. Brian, a lot of attention has been paid to you on just your ability to get through put, use innovation, technology to ease the whole engineering part of food delivery. Are those stories well enough understood are there going to be more interesting ways to make guacamole in the next couple of years . Yeah, look, one of the things we put an emphasis on is how can we be more productive in the restaurant and how can we improve that restaurant experience for our team member that ultimately results in a great culinary experience for our customer you touch on a few things. Were looking at things where we can automate prep. We still want to do fresh food every day in the restaurants, which means cutting, coring, mashing avocados but there are ways we can use robotics, automation in a way to do it in a more efficient way we have the autocavodo which cuts, cores and cuts out the fruit and our team member just has to mash the gauc and put in the other ingredients. Were looking for those solutions that become an assistant for our team members to do their jobs with more productivity, more efficiency, more speed kind of the we went down this path of asking, what are the assignments that folks would appreciate our ability to automate or simplify cutting, coring, scooping avocados is one of those things. Weve been working against that. We have a lot of fun things happening in the space trying to figure out how we automate our digital make line were working on some new grills that we can increase the cook times. But all these things ultimately are driven against productivity and making the job easier for our crew so we can do fresh food, real culinary every day in the restaurant. Im looking at a fiveyear stock chart. Its an amazing growth story, chipotle is, i dont have to tell you that. Where does the next leg of growth come from is it international . I dont want to walk by all the growth we still have in the u. S. And canada. Were only at 3,300 restaurants. We believe it can be 7,000, 7,000 plus restaurants in the United States and canada yeah, were excited about the opportunity for chipotle to go outside the u. S. We have Company Operations in europe well continue to develop the Europe Market with Company Operations we Just Announced a partnership in the middle east, with one of the best operators in that region well be opening some restaurants in kuwait and dubai in early 2024. Were really excited about that opportunity. And, you know, as we kind of roll the concept out and talk to consumers around the world, a lot of people like the idea of fresh food, great culinary, clean ingredients and great speed and great value. Im optimistic theres another story of growth to be had outside the u. S. To complement the great growth story we have going on in the u. S. What are you seeing in the u. S. You mentioned value in terms of the Consumer Health in general where does the 12 to 13 burrito fit in when consumers cut discretionary items when theyre feeling more stress . Were still a tremendous value because our burrito is less than 10 bucks across the country. And, you know in new york its like 13 speaking from experience. Im sure there are markets where it is a little more. In general its still less than 10. Relative in just about every market, we are about 20 to 30 cheaper than the competitor that provides the same quality of food, the caliber of food, and the convenience at which we do it weve got a strong Value Proposition. Your question about what are we seeing with consumers. We continue to see really good foot traffic i think we shared this in Second Quarter results. We have traffic growth we continue to see that traffic growth i think thats something thats really important i think the best health of a brand is to have traffic growth complimented with some pricing if we need to do pricing i feel really good about how our Value Proposition is playing out and how our operations are executing so consumers feel like theyre getting a great experience for what theyre paying finally, would you argue some argue mcdonalds, especially the breakfast day part, is a proxy for employment . You generally dont stop and get mcdonalds breakfast unless you have somewhere to go in the morning. Would you argue the same about chipotle if thats true, are you worried about what consensus says about unemployment next year, next summer, lets say . When ive gone back and looked at the data on what happens when theres been a slowdown, chipotle has been one of those fortunate companies we were one of the last ones impacted and the first ones to recover. And i think that will be true if we do end up having a slowdown and unemployment weakens but one thing that we continue to see is every income cohort, you know, sub 100,000, sub 75,000, north of 150,000 income, continues to talk about a great Value Proposition from chipotle we know if we stay focused on great cul