>> one more thing? >> i'll send you down to the border to work on the border. >> i'd rather work on the underlying causes and stay where i am. can i do that? we've seen that -- oh, no, that's already been one. >> i'll send you to mexico. >> where i can get tacos. good idea. >> okay. thank you. >> are you sure you are not going to serve -- >> yes. >> join us tomorrow. "squawk on the street" begins right now. good tuesday morning, welcome to "squawk on the street" i'm carl finmi quintini. it begins with global markets and china's stocks come roaring back. increasing chaos and danger. >> plus the weight loss boom,

and it is a boom, eli lily saying obesity drugs will help boost sales by 20% this year. speaking of years so far tesla's no good, very bad year, shares down 30%. year to date does make it the worst performing stock for 2024. >> let's begin with the markets and earnings. palintir surging but china and growing geopolitical dangers on alex carp's radar and what he said on last night's call. >> the more dangerous, the more real it gets. the more battle tested your soft way has to be. our gdp growth is significantly better than china's. i know the always wrong crowd says we should then get peace but i'm telling you that the rational result of the rational consequences of that is our adversaries, america will be stronger tomorrow than today.

they don't have a gdp story because they do not build these systems as well as we do and do not have the tech community or u.s. market like we do. look at our results and so as this becomes more and more dangerous, every company in the world, whether they're small, big, whether they're a start-up is going to have to actually prove their software works on the battlefield. >> meantime, u.s. commercial business up 70 and the guide above on q1 -- >> it was a remarkable quarter and used to george from crowdstrike and handle themselves differently. karp does. they are statesmen where alex as revealed himself as the dave portnoy. my favorite line in the entire thing when he started talking, he said, and then you compare

your self-pleasuring to our commercially viable enterprise results, i think that -- i had never really thought about comparing my self-pleasuring to his results -- >> i never thought i'd hear that reference on the 9:00 hour. >> karp plays for real. >> when i started here 30 years ago there was a show on at 11:00 that talked a lot about that. i forgot the name of it but will get back to you on that. >> there is some tremendous discussion about how great our country is, but also palintir and companies working for ukraine and israel. hot as a razor getting the right people. let me step back on this guy. when he first started he was a bad boy, okay? now, he still speaks bad boy but he ain't a bad boy, he is getting a lot of orders. my only problem is if aurora and

george are listen they'll say get a grip, jim. but he is handling a lot of military orders. he's from philadelphia, by the way. >> is your point you would prefer palo alto and crowdstrike -- >> absolutely, because in the end i find military fickle. witness lockheed martin run by one of the great ceos on earth and cannot get out of its way. i don't want to deal with -- in this case it was a funding problem in the fourth quarter that made it so that you're at the mercy of the government, david? do i want to be at the mercy of what some people but not me, of course, are calling a clown show? >> no, it would be very difficult, a lot of relying on funding in various areas perhaps defense appropriations overseas certainly which we're seeing right now 250i tied up w, the border bill.

>> delivered a lot of orders and actually mentions bombastic. he is bombastic and the orders were bombastic. the orders were ex-troert. it's like some would say bombastic, well, i don't know, some would call him maurice? [ laughter ] we did have a bit of a bounce even after this ft piece about a goldman survey in which 40% of respondents said they thought china equities were uninvestable. >> i'm not so sure whether that is true. i have in my hands a document which is from amnesty international. when we try to get to the bottom of what happened in 2016 moment where china bottomed, we had -- you only had to look at -- i would say -- i don't know, relatively in a similar period, david, the execution of white collar criminals including a

known group of businesspeople who reputed to be sellers. >> so that's your point is that's not sending a lot of confidence? >> no, i think if you're going to be killed for selling, i think you might hold off selling, maybe take a look at the chart or something, i wish i were kidding. many attributed the white collar executions to the bottom of the market, which, amnesty international says there's far more that china reports. >> there are reports in bloomberg that regulators led by the china securities regulatory commission plan to update the top leadership on market conditions. >> yeah. >> and the policy initiatives, and potentially at least give some sort of dose of confidence to what have been falling stock prices almost every day. >> the government has a list of known sellers, not unlike what senator joe mccarthy had about a list of known communists in the state department. >> yeah.

>> they got a list of known sellers. i wish i were kidding. they'll put tremendous pressure on the sellers. >> as in threatening what, to imprison them? what's your point here? >> yes. well, what are they going to do, fine them? >> they're just looking for some sort of stimulus. >> in 2016, it is reported they called sellers in and made it clear what awaited them if they continued to sell. now, if this were a joke i would stop talking about it. but it was understood to be reality. amnesty international is trying to figure out what happened with white collar executions. >> the flows out of china are having a real impact. you can tell obviously by what's happened to markets in japan and here, jim, nikkei story that the united states now accounts for nearly half of global market cap, highest concentration in a couple of decades. >> and we have companies that i think we're all puzzled by like

a super micro that could go up at a level that we've never -- a lot of people are saying, when is the last time you saw this, other than dome petroleum in the '80s, i never saw anything go up at this level at this speed and, david, i had super micro on. it's adjacent to nvidia. >> what do they do? >> racks for a.i. i mean, it's a very company. they -- if you look at the performance you could say this is inconceivable any market could have a stock that is up 700% in a year. >> well, it's -- it's a reflection of the enthusiasm around the importance of a.i. >> do you think it's -- do you think it's excess? >> it may be. i don't know the particulars of that company, jim. you know it better than i do. >> look at our old friend

dave -- >> put in a terrific ceo and that company -- it's not in the s&p but outperformed every stock in the s&p. >> it did and investors look for continued opportunities beyond the obvious ones being nvidia and/or microsoft. >> so give you an obvious one. >> there's vertiv. >> you -- >> they are right in the data center helping you create and build your data centers. another, coherent. see that stock? >> nice numbers. >> optically communicate. >> marvel tech. so i'll give you the next one because -- i have the goods. jpmorgan is back writing broadcom. started as a buy, remember, they had to be quiet because of the vm deal and meaningful call and it won't stop at 16 because

qualcomm, of course, is adjacent to nvidia. >> how about nvidia over three months adding the equivalent of a tesla? >> nvidia if you look 10, 15-year period is the best performing stock but has duone t quietly. it's not like the ceo beats his chest. it's just the opposite. but he is everywhere at all times, and he's got products that enables you -- i was looking again at some of the most recent product compared to amd but their product is loaded with learning software. by the way, alex karp in palintir talked about the need we're great at software in this country. i would say that the software that goes into the h200 new system that jensen is unveiling is so powerful, it's very difficult to not use nvidia if you're mark zuckerberg.

>> sometimes it feels like between nvidia and lilly that sometimes you can make this a lot harder than it needs to be. i mean, i spend a day speaking to fund managers who are always focused on risk adjusting. seemingly never seem to miss an opportunity to mission an opportunity. >> that's because they're like, oh, wow, risk off, risk on. >> a.i. is ascendant. nvidia is the key, own it. gop1s are taking the world by storm and seemingly do not have -- >> they don't know what it is. >> not to mention the weight loss -- >> more in the engine. >> own lily and there it is. if you own lily a-- lilly and -

>> that's why my charitable trust does. we got data on the nash study by lilly, well, between 9 to 15 million people have nash and leads to liver damage and liver cancer and the drug works on that, which is shocking. nothing has worked on it. >> so yet another indication perhaps for mounjaro and/or -- >> turn to page 17 of your handout, their drug, synergy phase 2 study all doses met primary end point of absence of nash. i don't know how it's possible to work so well on something that's been, carl, for some people a death sentence and now they've got something. >> when are they going to actually -- >> they're in phase 2.

if i were the fda and read this, i would say we got to make this -- just put it right through. don't even go to phase 3 because this can save a lot of lives. >> meantime, lilly is up 121% in the year. going for five straight record closes today, jim. mounjaro beats 2.2 billion. was at 1.75. >> almost impossible to get mounjaro in new york. the truck for mounjaro -- i make jokes bit. >> the wells fargo wagon. >> they can't really get it to -- they have to get these other -- second north carolina plant going. there's also an issue with the actual pen, that's made by becky and dickinson. they're working 24/7 to get the pens out. one could have five different doses in it or four doses that would make it so they could make it more prevalent, but i'm shocked that mounjaro, that the

numbers were -- because it's not even out for the most part. >> and the guidance pretty much in line, yeah, would you say at the midpoint? >> that's rick -- you know, you have david ricks will not ever get ahead of what could happen and their cfo -- i'm talking almost as good as the cfo that retired that breaks my heart. maybe the greatest cfo of ours retired. >> who. >> rich from costco and by the way, the cfo from kroger yesterday. >> guys, to come back to the very top of the show and kind of surprising comments from jim, the show was called "real personal" and the host, bob berkowitz on cnbc 11:00 p.m. at night. >> i thought it was joe pine. >> thank you, kevin. our executive producer. >> there you go. >> good old magee. >> i never would have come up --

>> what does self-pleasuring mean? when it rains it pours for tesla, the worst performing on the s&p for another year, got another downgrade. the firm says the blows just keep on coming. meantime, we'll get you dupont, spotify, ge health care, thus on jpmorgan and estee lauder when we come right back. you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart! at morgan stanley,

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fire but i would love to see the board come out and ratify that they stand by him. and that he passed the drug test and that harf has been written is for the most part been discredited. it's really important they get that out. now, i know that some people feel the board is conflicted but what matters is does the board stand by him or is the board going to say, we have to do an investigation of him before, you know, in front of when the s.e.c. investigates? that "wall street journal" article wasn't meant to do anything than get the s.e.c. to crank it up, not justice. >> what would -- >> disclosure problems. >> disclosure. >> yeah. >> what disclosure problems? in other words, what specifically would they be citing -- >> internally they knew he was perhaps unstable and therefore should have been placed on leave. now, by the way -- >> how do you even -- >> i back up. i think the board has to say, listen, all the stuff is not true. we have no evidence of this, and that we stand by him. none of this is -- was in play.

>> right. >> because right now the s.e.c. is saying, okay, is he a rogue character? there is a board. now, you may think the board is conflicted. i don't care. the board has to issue a statement today saying we have examined all these or we have hired, i don't know, paul weis, and they're going to examine all these, okay? they have to do that. >> you don't care that the board is conflicted because the stock has been a winner? is it sort of ends justify the means? >> the judge talked about that. the judge said, listen, it matters if it's a winner or not but the disclosure in order to have the vote be correct and the judge goes into the idea we know it's a big winner and that's not what's at stake. a lot of us would just say, hey, you know what, i don't care how much you made. we made a lot of money but that's not in play. but i think what's in play, they have to discredit this "journal" story and do it now and say, listen, we'll point -- what are you shaking your head?

>> not at all. >> the board, i don't know, who cannot -- they get ted wells from paul weis and they find out, you know, can't be bought. somebody who can't be bought and examine it. get someone who can't be bought. >> the downdraft in the stock price occurring long before these articles came out -- >> that's because people think he's going to leave. >> no, it's also because of -- it was not well received. a lot of competition in china. >> e videotapes -- >> toyota shows hybrids are in ascendance because their portfolio of car, fleet is very much weighted towards that. >> calling it a vindication of the hybrid model. >> remember, this was not a -- this was a tech company that happened to be on wheels and have a lot of other tech including a.i. and then he kiboshed the a.i. by saying, unless he gets more money -- more share. >> more control.

>> more control that maybe the a.i. -- that's when i got worried. i wasn't worried about the quarter. >> the worries that it would do something to the long-term innovation prospects. >> the die was cast that day. i once spelled my first piece i spelled it d-y-e revealing me as a complete fraud, by the way. however my byline was jamer cramer. >> we'll get his mad dash to the opening bell. back in a minute. [disconcerting stomach gurgle] not again. maybe i should get this looked at? [suggestive stomach gurgle] zocdoc? [talkative stomach gurgle]

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i'm glad i found stability amidst it all. gold. standing the test of time. got companies being rewarded after results. lilly is one example. we'll get to gehc and dupont preannounced and carrier and spotify later. opening bell in less than five minutes. catch us any time anywhere, listen and follow the "skrauk on the street" opening bell podcast.

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( ♪♪ ) >> announcer: "the opening bell" is brought to you by nuveen, responsible investing. let's get to a mad dash with jim. a minute and a half before an opening bell on this tuesday. ge health care which we talked

about occasionally is the subject. >> one of the heavily so-called blue chips and they reported dynamite numbers and gave you terrific -- the three plus that people were worried they wouldn't be able to deliver. they've got great a.i. within the mris. they do mri, ct scan, these are important, ultrasound, not that good, okay, but the fact is that these machines are in strong demand because they give you a great roi, this was the breakout quarter and the shorts will rethink their game plan, not unlike the shorts who are still short he stay lauder. i bring these up because they're squeeze stocks now. they're squeeze stocks. the shorts just don't get it. ge healthcare is a high-quality company and people don't understand what the structure will look like. now we know. >> that was the amalgamation of

structures led by the amerson deal -- >> remember, i did a piece yesterday and it was a big beneficiary of the life spin-off. the big board. the nasdaq software and data company zoom info. >> not really doing much. dave, the ceo, will be on the show. big acquisition in europe and have to learn more. people were saying the number wasn't enough to be able to move thing, unlike train tt which is another hvac company which had superior numbers but we'll have to dig down tonight. >> hvac down 1. sales were a miss but they guide in line. >> right, look, i think this is one of those where you either

believe europe will continue to favor heat pumps, which have the least amount of global warming problems, and, you know, maybe some people feel that europe is too fickle and may not be able -- they were giving incentives and maybe now they won't offer -- by the way, in terms of things that people -- david mentioned what's next in nvidia, and i am so proud that chuck robbins has a deal, cisco and nvidia to help enterprise deploy and manage security a.i. infrastructure. cisco did miss the previous quarter and did not give good guidance for this quarter but have a link to nvidia. i do know that this is not strange in that chuck's got a good relationship with them but you'll see cisco up. remember, i ee iterate, not a good quarter last and did not give -- and if you remember, because he was on our show, that chuck did not give us a great

forecast but have a relationship with nvidia and nvidia is touched by an angel right now. >> up ever so slicely but as we pointed out, up 40% for the year, nvidia shares, which are, let's call it flat. >> yesterday goldman's piece talked about how the second half of '24 would be a slowdown because everyone would have had their chips, the great chips everyone that talk about run incredibly fast because of the hyperscalers and metas, they said, look, the demand is incredible. you know, carl, i i think people underestimate -- i talked to jensen about mark zuckerberg and skeptical and they have a close relationship and meta is a top customer. amazon an amazing customer. >> yeah, morgan stanley has what they call a cloud capex tracker, up 28 year on year, best since 18 in the middle of this capex

arms race at least in the cloud. >> what jim said about caterpillar. one thing he is saying but he's calling about the decyclization of cat and one of the reasons why because they're connected with the data center. >> that came up in your interview with him yesterday. >> our interview, i think. >> okay, i don't recall asking a question, but -- >> your self-effacing -- >> i was listening with great interest when he did discuss their opportunity and just building data centers or the fact that they are part of that boom. >> painful to hear endlessly china, china, china, i mean, no. i mean, we had the same problem with tim cook friday, china, china, china. can we just -- estee lauder. can we stipulate it's awful in china and, by the way, there is a man running for president and we don't talk about him much because we don't talk politics that the tariffs that

president -- former president trump would put on china would make it so that you would have to have catastrophic of their -- >> not our own? >> ohio we would be hurt? >> the supply chains are very intertwined. it would hurt. >> we are still deeply intertwined. >> you can't move things from malaysia or vietnam -- i remember when i did -- first started my show 2005, he would come on and savage at chinese and i don't think he's changed at all, nothing. although it's not clear that he understands the taiwan relationship, what taiwan semi could do. he just thinks taiwan semi has betrayed the united states this what i believe he thinks taking a lot of our semiconductor. taiwan is a tenth of the cost to

make things because they have a lot of engineer, so it was amd and nvidia did not betray the united states by making their high-end chips in taiwan but the secretary is trying to make the lower midrange chips here. >> bringing it back to the united states. i'm going to talk spotify briefly because the stock is up almost 11%. >> yes. >> we follow obviously the leader in streaming music. very strong revenue numbers being well received by the street. total revenue up 16% year over year. 20%, i think, when you're talking constant currency, fourth quarter to fourth quarter. premium revenue growth up 17% and they had their rpu up a little bit that supported revenue 12% and gross margin -- >> i'm glad you mentioned that. that's well ahead, guys. >> meta may be the leader in terms of efficiency, but it's

not like other companies didn't get that memo, and daniel over the last year has been focused, as well. >> yes. >> on paring things down and far from spending the amount of money they previously did in podcasting when it became a major priority for them. they did potentially sign this new deal with joe rogan, that said they are not broadly throwing the money around the way they were. that efficiency being rewarded by shareholders. >> let's go deeper, david. we had always believed that tech had unlimited assets, unlimited -- the coffers were tremendous and hire, hire, hire. but that is no longer the case. it's just -- i think people have realized because of zuckerberg that you fire 20,000 people and your numbers go up. i mean, that is extraordinary. >> your productivity went up. my god their per earnings per employee went up threefold at meta. something along those lines, 87,000 down to 67,000. >> carl, we haven't even started

with a.i. being able to make it so that call center people are much more valuable but, therefore, you may -- you could say they're more productive or let some go. we know that this economy is robust enough that it can absorb a lot of people but the nonhire of people is amazing. one of the reasons why people still don't like google, google has not owned up to what it's -- they're still hiring, but we don't talk enough about how they're slimming down at -- >> 32,000 layoffs so far, they tend -- they're -- separating them into buckets. there was a covid wave then an interest rate cycle wave and now this is very much more about restructuring, jim, as opposed to just sheer savings. >> exactly. if you talk with the great people at amazon, what they would tell you is we had to figure out -- we overhired. we had to figure out kind of -- this is not their analogy but

jenga, you don't want to pull out the guy that makes it topple. people don't understand when you talk to amazon, a lot of times you're in awe and it's hard not to be. i just find that i said you got to start firing. you people got to start firing people and the ceo says, which ones? do you know which ones? i said you got to fire 100,000. steve said, david, that's great. it's great that you don't run the firm. >> yes. jim, as for spotify b of a wrote over the weekend the future will be about not content being king but curation. it's important for audiences to get aggregated. on a day where, for example, "the journal" has this piece about disney's proxy season --

>> there's a lot of worry about what could happen and if we have to curate. my friend, john ellis, who writes a great news -- you know, blog was talking about how there's talk there's going to an obama oral, not video in a coffee shop saying something negative about biden that will be completely untrue and it will go viral and he's just saying this is where our democracy is headed. are you ready for it? and i would want someone in between me and that -- i would want michelle obama on spotify because it's vetted and it's professional. i really like spotify. >> guys, we talked about layoffs. >> layoffs? >> it seems almost every day we get something. today it's docusign announcing a restructuring and stock buffeted by constant rumors of a potential deal to take private. that doesn't appear to be in the cards any longer reflected in part yesterday in a decline when one of the news services that

had been reporting on the possibility of a take-out said that that was, i think fading, but this morning, it's the news that they're going to cut about 6% of the workforce. majority of the impacted positions in sales and marketing and they estimate that will cost them about 28 to 32 million in n nonrecurring restructuring charges and overall again a restructuring plan designed to strengthen and support the company's financial operational efficiency. they say they'll continue. this was a covid darling. go back and take a look at that. what has been more recently featured is the idea that would there be a private equity buyer for this thing when you initiate a restructuring plan, that typically means, no. >> so, firing out of weakness versus firing out of strength. >> a good point. >> spotify -- >> why is that being well responded to? >> because their business sucks. [ laughter ] hey, listen, karp gave us

license to say anything, right? alex karp with his great palintir quarter. he took us in places only george carlin warned us where to go. george carlin helped me with "mad money." >> he did? >> i don't think i knew that. >> my timing. he liked my timing. >> wow. jim, boeing, great interview with the administrator saying there probably need to be permanent inspectors at both boeing and spirit and that they are doing a full look at -- from nose to tail of the production system. >> to have inspectors built in, of course, one of the things they always prided -- faa said we're not baby-sitters but it's gotten too -- did you know that spirit -- yesterday i raised this issue of whether boeing should have bought spirit. this was before the board many times so it's not something i made up. spirit being a company that was sold off and i would argue to make boeing's quarter and obviously there's a quality control issue.

why won't anyone say there's a quality control issue? why so hard? why doesn't calhoun say, listen, i know he is a big man, it's really on us but that's great but can we find out where it's wrong? >> where things are going wrong. >> if you remember alcoa had some problem, in other words, a tile company making certain products, and they had to switch the kind of material they used. >> yeah. >> boeing finger-pointed. said, listen, we buy this tile from these guys. it's no good. oh, my god. he's going to talk simon and i got simon on tonight. >> you do? >> we made peace. >> i'll give a little tease. simon -- >> i hope you're positive. >> the rumors of that company's demise, i think, have been greatly exaggerated. >> he's fantastic. >> there was a period where we talked about the decline of the

mall and it isn't as though there are a lot of malls, particularly let's call it the b-level malls that are in bad shape, but when you own the good properties, as in really office even as well, when you own the really top of the market, you're doing fine, and simon property group, no exception there. >> oh, i love -- >> the quarter that i guess i'll let you opine on. >> you gave it an 8.3%. >> 30th anniversary as a public company. >> how much he's given. >> total share up 131% over those 30 years. not bad. >> one thing funny on the call, his dry humor, i would say, okay? >> yes. >> he said that his yield is too high. meaning he raised the difficult de -- dividend and sold a little bit of the authentic brands and one thing i love about him, if you go to the website, it literally is every mall that is still exciting to go to.

this is a remarkable man, david. a lot of pride, which i think ee deserves, because, frankly, he is talking about omni channel, mixed use and his idea property he talked about has nobu restaurant so i wanted to move. of course, it's not -- >> nice cheerleading session on "mad money" for david simon? >> 100%. >> i just want to make sure. >> occupancy up a few basis points quarter on quarter. minimum rent accelerating per square foot. >> how can -- look, there's someone -- there's been headlines that say the forecast missed estimates. well, these are people who are bravely misguiding. the fact is, he would say 2022 is better than 2023, this is one of the great investments of all time and when i talked to him, this belongs in my travel trust. it's that strong of a story. really strong story. amazing. amazing man. >> if steve came back on, hertz,

would it be a cheerleading session? stocks not responding that negatively -- >> a big announcement and all he did was verify it that tesla -- he's trying to sell and are selling well. he did not order the teslas. that was the previous administration but the answer, david, is that -- >> it was a pre -- >> art fields was involved there advising -- >> am i going to throw myself on that one? no. david simon deserves it. but simon is not. i mean, simon survived. maybe -- there's not a lot of mall companies that survive plus his malls are great. you ever go to -- >> you don't want to talk about hertz? >> we had him on, was it two weeks ago. >> the stock is exactly in line with his preannouncement. david is trying to get me to do things like i tried to question him on musk yesterday and -- how about this, steve was a

monumental ceo. >> yes, excellent. >> statesman. >> jim, you mentioned el earlier, not going anywhere, he says, as the stock making its way -- it's been from 100 to 150 since halloween. >> they did talk about a very big restructuring, and they talked about how hong kong came back. i understand there's profit-taking. i believed in him for a very long time and i think that apropos of what david said, i'll go there. i believed and i was right and then i was wrong. >> yeah. you were right, and then you were wrong. >> yeah, i said that. >> i know. all right. i don't know why that was fun. kkr. >> people are interested in kkr. >> they are. one of the larger all tern sieve asset manager, market value of 81 plus billion dollars and reported earnings worth at least a mention.

you can see the stock is responding positively. fund-raising, investing, distributable earnings. i f tried to say beat although may have come lower than some. total aum, 553 billion. some looking for perhaps as much as 556 billion fee earnings may have missed as well but generally a positive perspective and crossed the trillion dollar of assets under management. >> some are unregulated and not hamstrung by banking regulations that make it so that they can't return as much capital as they'd like. >> extremely active in private credit that we talk about with some frequency here. obviously they still do have the old buy-out business that's still a part of what they do but it's gone so far beyond that. we try to make the point whether it's blackstone or brookfield or

kkr or apollo, these are enormous companies involved in every level of the capital structure seemingly these days. >> i think that the smartest people other than the ones who go to palintir where they're very hungry now go to private credit, not to -- the smartest people, of course, is a subjective issue. if you were to go out of school that's where you would go. that's where the money is. sutton. >> go where the money is. >> guy, the dow is up 160 to start this tuesday. watch bonds, as well. mess ter, on the tape this afternoon going into the evening hour, plus the three-year note auction, some $54 billion worth. s&p, 4953. we're back after a break.

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. watch crude, there's an increasing sense here that we're not going to get any further news regarding a potential cease-fire in the middle east before the new api numbers come in. a little bit of bullish action on wti above 73.5. dow up 30. we'll get stop trading with jim after a short break. uh-huh... - hip-hop! - limping! mmhmm! medical bills! uh-huh! - pancakes! - cash! who pays you cash when you have medical bills? grrr! no idea. [tapping] gap! the gap left by health insurance? who pays cash to help close that gap? aflac! oh, aflac! get help with expenses health insurance doesn't cover at aflac.com pictionary?! i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. life is for living. let's partner for all of it. i'm so glad we did this. edward jones

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let's get to jim and stop trading. >> lilly is leaving a lot of drug companies in their wake. magical pharmaceutical and 89 bio, were all companies on this illness and you can see what happens when lilly comes in and has some of the phase two work incredible business that says these guys may not. it doesn't matter. stop what you're doing. that's how good eli lilly is. they will, you know, obviously, these companies are not going to give up, but that's how great the study is. these are remarkable numbers out of lilly and it's such a good drug. it has to go higher. this is a disease that is a death sentence for a lot of people. everyone was working on it. it is -- they'vewon. they've got it conquered.

it's incredible. >> fascinating. >> tonight you mentioned simon. >> i have simon. again had a great number. gives you great yield. i have dave getland who rang the bell for carrier. did it do as well as train? we'll talk about it. maybe it should be up. chipotle, been recommending that stock since 400 when they had the airborne illness, any staunt restaurant could have had it. the cfo maybe he replaces rich, now that rich retiring from costco which is devastating. >> curious to hear about pricing after mcdonald's yesterday. >> absolutely. and that was a very throw yourself on your -- a discouraging comps call, mcdonald's. when talking about trading down from mcdonald's to cooking at home, i've always felt mcdonald's offered quite a bargain. apparently not enough. >> yeah. >> $6 hash browns people

started -- >> i know. >> and that bacon, some people are not deterred no many how many double baconator. >> a long time since you mentioned the baconator. >> i like being married. i tried other way and it's not so hot. >> yes, you did. >> just in case you're debating, don't. >> no debate. >> we'll see you tonight. 6:00 p.m. on "mad money." dow losing opening gains up about 100. chips are down. ckhe men.ch that as well ba t aomt. nconvenient, and disruptive to your life, posing a real threat to your family's comfort and safety. when the power goes out, you have no lights, no refrigeration, no heating or air conditioning. the winds are not letting up at all here. we're going to see some power outages. number one thing to prepare for is extended power outages. are you prepared? you can be with a generac home standby generator. when a power outage occurs, your generac home standby generator automatically powers up, using your home's existing natural gas or propane,

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good tuesday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and david faber, live for you as always from post nine of the new york stock exchange. take a look at stocks here in the early action. lifting. coming off of yesterday's selloff. the s&p kind of unchanged. dow is up 70 points. nasdaq a little bit under pressure right now.

again after the down day. another higher week. treasuries right now take a look, it's been a story of higher yields. basically on a string of positive economic data, they come down today. the 10-year note yield 4.1%. what's working in the market today? materials, real estate, health care and industrials are higher. technology, staples, utilities and financials are weaker. 30 points into the trading session here are movers we're watching spotify, palantir and eli lilly heading higher on the back of earnings and a slew of other names as well. we'll break them down. tesla reversing losses. $195 per share analyst pointing to, quote, governance concerns aggravating tough financial concerns. tesla is down about 25% this year. watch china stocks today posting their biggest one-day gain in two years on optimism around more stimulus to help the market there's. we'll head live to beijing this

hour for the very latest. guys, we have some stuff to talk about when it comes to the macro setup. not getting a whole lot of data today, but i look at the senior loan officers data to get a picture of what helpeding in america looks like. it's a survey that gives a snapshot. here's a good chart from jpmorgan. guess what? lending standards are tightening. we know that, right. we had a bank crisis last year and higher interest rates, but less widespread tightening in lending standards. for many of the reported loan types, for example, 14.5% of banks reporting tightening lending standards for commercial and industrial loans to large and medium businesses in the quarter, but that was down from 33% the prior quarter. 50% the quarter before. so you can see we're above that horizontal line. we're still in tightening mode for sure, but we're moving south and that's welcomed. i think we'll see lending standards continue to loosen as

the fed cuts interest rates. but this is still a weight and a pressure on the economy, but it's moving in the right direction and that's sort of welcomed, i would think, for the fed and for those that are in the soft landing or no landing camp. >> yeah. >> i think the fed -- they're having the same conversation that we're having on this show. yesterday we were talking about a no landing or a soft landing. neel kashkari published a piece, the minneapolis fed president, he is thinking about whether rates are really too restrictive. here is the money quote from his piece. the constellation of data suggests to me that current stance of monetary policy may not be as tight as we would have assumed, given the low neutral rate environment that existed before the pandemic. they're trying to figure out -- >> explain to people what he's talking about. >> neutral rate before the pandemic. >> the rate that doesn't hurt the economy or help the economy, and it was super low. >> yeah. >> before the pandemic.

right. and they're trying to figure out where it is now because we're in a different economy. we have a lot more fiscal spending that's propping up the economy. we have experiences still booming. hertz doesn't see any slowdown today in terms of tourist activity. even though they have other issues with the evs. it's an economy that has been able to weather and handle higher interest rates. how long? we don't know. we're going to get a lot more fed speak today. by the way we'll hear from mester, kashkari, collins, harker. mester is a big one and a voter and tends to lean hawkish. this is a market where you see the march higher in yields and give back in equity gains. got a little enthusiastic about cuts this year. >> meanwhile, street still trying to get their arms around the "60 minutes" appearance. goolsbee yesterday was asked about a 50 basis point cut and wouldn't comment. the fact that that is the conversation, people going back

to the transcript and looking at that comment was in track, the reporter narration, not a sound bite from powell, to the point yesterday, added confusion. >> where scott pelley said they're probably going to cut around the middle of the year and 25 basis points or 50. but that wasn't from the sound of powell. it's hard to know. >> some producer writing that in who doesn't even know what the heck a basis point is. sorry. >> there's a lot a lot riding on every word. goldman reacting to the story well, don't know what powell said in the room -- >> "60 minutes" eight, nine years ago, getting everybody out of municipal bonds. remember that story. worked out really well. >> basically powell should talk to us and not "60 minutes" and we'll be super clear on all the language. >> people who understand what you're telling them. >> message to the fed who surely is watching. guys we have the great poll we did, cnbc ahead of the election, the youth and money in the u.s. poll with generation lab where

we're starting to survey how young americans are feeling about the economy ahead of the election. i pulled out two of the answers. how would you rate the economy? 41% say poor. 38% say fair. not a whole lot of good and definitely not a lot of excellent. and that gets to this sort of quandary for the biden administration about how unemployment is below 4%, real nys incomes are rising, inflation has a 2% handle, the economy came off a quarter where it grew more than 3%, and yet everybody feels lousy about it. >> at least 41% do. the only thing i can imagine that you could try to find out to make them feel better in the biden camp would be are they always -- are young people always feeling gloomy? >> it does feel like there's a bigger gap this time. >> what did the numbers look like ten years ago on a survey like that. >> we could.

>> it's never easy to be in your early 20s. >> people who answer surveys are usually negative or may be negative. goldman took a look at this yesterday. >> they found that, a, inflation is very damaging to confidence and they went back to the volcker years. >> there's a lag. >> there's a lag. and then there's the social media aspect that if you're going to -- getting contacted about your sentiments you're most likely to be negative than positive. the yelp effect. >> a partisan bias very apparent in some of these economic polls. they concluded that. and you're right, the volcker years and show it takes a while for that high sticker price to really to filter its way through. >> they think it will get better but not completely better by the election. >> also they say it could be worse this time because the price of especially goods we buy every day like food and like gas were such a prominent part of the inflation story that it's going to take longer. it's kind of that psychological effect that stays with us longer, even though we've seen

some pretty nice disinflation in the economy. >> gas prices are back down to levels they haven't been for some time, right? >> gas prices, although food prices are still elevated and sticky. taking a look at stocks, they are pulling back from the record levels driven by the higher bond yields we've been talking about and fears the fed might not cut as much as wall street hoped for. our next guest prefers the overseas market. joining us to discuss is david, harrow associates portfolio manager. always prefer the overseas markets, david. do you expect other central banks overseas central banks, to begin cutting this year? is that part of the thesis? >> yes, but that's not really why i have such a strong preference over investing in overseas markets. it's because of where value exists. from a value investors, we think a company is valuable if it's a good quality business that generates a good, strong cash

flow stream and we measure this by valuation levels. if you look outside the united states, in particular in europe, you're able to find extremely high quality, well-managed businesses that trade at ridiculously and almost all-time low valuation differentials. so whether you look at price to cash flow, free cash flow yields and you look at what's happening in terms of their businesses, they're doing fine, they're still growing their earnings, and yet we see p/es in, for instance, the german market around 10, 11 times, free cash flow yields over 10%. >> david, you have been arguing this for years? you could have said this for years. what makes now different? >> because we keep getting more extreme. it's a very good point. i would argue, first of all, of course foreign stocks should trade at some discount to u.s. stocks because business performance is generally better

for u.s. stocks. but that discount has tended to be 8 or 9%. now we're pushing a couple standard deviations beyond this. these businesses, though they're based in europe, europe in particular, they do business all over the world whether you take the auto producers, for instance, bmw, mercedes, one third or so of their business is even in europe. the rest is in asia and the u.s. and these are companies that trade up four times earnings and yields 7 or 8% and in the case of bmw and mercedes, healthy shareholder returns, big stock buybacks. you're right. it comes getting bigger. the big discount. the discount keeps getting bigger but at some point we believe, fundamentals will assert themselves and the value of financial asset its cash flow stream will be recognized by investors. >> the long-term track record would also point to that, so i

want to give you your due. it's been a long time. i mean, investors these days, david, seem to like one word, growth. they say it over and over. you're just on the wrong side of that trade. what will have to happen for you to end up being right? >> sometimes it just -- the teeter totter gets overbalanced. if you look at what happened the last time us value investors had a strong heyday was 2000 to 2007, seven years, of strong out performance a. it's oneyou really saw out of sync valuations. now i would argue the valuations are even more out of sync, so i believe this is positioning for a value renaissance. i know it's been long, but eventually, eventually fundamentals of buying an under valued asset, an asset that generates cash for its owners, will come to fruition.

now, you're exactly right with social media and algorithmic trading and strategic trading, all these things, are shielding fundamentals, but i don't believe it will last forever. eventually markets will price cash. especially as we go into this more normalized, higher interest rate environment. don't forget for the better part -- more than ten years -- we've had funny money where growth and nonfundamentals could fool investors and even though we've had this realization for the better part of a year or so, perhaps it's not quite enough. perhaps it hasn't sunk in that we are not going back to the funny money days, which means value will play a more important role. >> we'll continue to talk to you about it.

appreciate the time today. >> thank you. >> david herro. >> getting breaking news out of washington, d.c. for that we turn to eamon jabers. >> that's right. an appeals court in washington, d.c. denied former president trump's sweeping immunity claims as part of the ongoing wrangling surrounding his federal case regarding election interference in 2020. what we're reading now from the court here in d.c. is today we affirm the denial for the purpose of this criminal case, former president trump has become citizen trump with all the defenses of any other criminal defendant. but any executive immunity that may have protected him while he served as president no longer protects him against this prosecution. the appeals court here in washington saying that the former president's sweeping immunity claims are nonexistent and we can expect this will be appealed to the supreme court. this doesn't end the legal wrangling but it is one of the things that has held up the timing of that federal case, which is now sort of in scheduling limbo as they waited

to hear what was going to be the resolution of these immunity claims. now the appeals court has ruled, carl. we expect at some point it will go to the supreme court. ultimately to decide on whether the former president of the united states has sort of sweeping immunity from the law that he has asserted. that is the crux of the matter and something that the conservative supreme court now will be expected to face. back over to you. >> they've also got the potential to rule on whether he's eligibleby to on the ballot in a couple states that have said he's not, is that correct? >> we're expecting potential rulings on that later this week. the supreme court with members appointed by the former president donald trump, now really wrestling with his fate as a political figure here in the united states, whether he has access to the ballot, whether he has the immunity that he contends he does. the former president taking to social media time and time again to say, that former presidents need sweeping immunity from

prosecution for all sorts of legal violations and saying that if this president doesn't get it, future presidents will be hounded when they leave office by presidents of opposing administrations. that's the argument. this appeals court did not buy it. we'll see whether the supreme court buys it or not. >> thank you, eamon javers in washington. as we head to break our road map for the hour. eli lilly rallies to more record high on the back of earnings. market cap overtaking tesla. the key pharma names to watch. >> china's stock market with its biggest one-day gain in two years on optimism about stimulus. some of the china related names that trade here rallying. what you need to know before jumping into those names. >> fed chair powell says commercial real estate is a manageable problem. a fresh read on the ground from the ceo ofxr. r we have a big show ahead. "squawk on the street" right back. your skin is ever-changing, take care of it with gold bond's healing formulations of 7 moisturizers and 3 vitamins.

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post nine. great to see you. welcome. >> you too. >> monster and you think some of these concerns about supply imbalances might keep the street a little more cautious, allowing for future beats as well. >> for sure. this is a company that typically guides conservatively and came in ahead of the street. that's a very good sign. the stock has been huge, up 20% in under six weeks. think it pretraded a lot into the quarter here, probably why the stock is not up even more. yeah, i think the supply and demand imbalance favors the company. they're ratcheting up manufacturing. novo did yesterday to keep this thing going. >> are clients asking about valuation or not yet? >> they're definitely asking about it but talking about it over a year and hasn't been a huge deterrent because in health care there aren't that many big opportunities from a market standpoint where the street can just say okay, this seems clear to us that it's going to be a massive opportunity.

that's kept people in the game. 16 times earnings on this year's numbers is well outside the peer group. that's been the biggest pushback and that will continue to be the biggest pushback into the rest of the year. >> where are we on the next stage of different types of dose mechanisms or advertising that would, i guess, bolster demand even more? >> yeah. i don't think the drugs are really in, you know, the majority of america yet. i think this is pretty much a metropolitan area drug for the most part. new york, miami, l.a., dallas, are the four cities i've been talking about a lot. middle america, i don't even think close. eli lilly put that lilly direct business in operation a short time ago. i think that's to get the drug into people who actually need it that are, you know, medically obese by definition. that we haven't seen in numbers yet and yet, zepbound did almost $200 million in one month. right. you annualize that and not so

bad. i think this will probably keep going and, yeah, the manufacturing to me is probably the biggest hurdle. >> it's funny, manufacturing, because we saw that deal yesterday for novo nordisk, where they bought those -- well will buy the three manufacturing facts from cat ta lin. there is a capacity strength problem for lilly and/or even novo nordisk over time. >> for sure. that's what we're seeing. $11 billion just, you know, to make one drug essentially. it will be more over time. but i think novo mentioned last year they were going to set aside $6 billion, so they almost doubled that number with the deal supposing this goes through with ftc et cetera. lilly has earmarked $3 billion. this is the most substantial manufacturing or capacity build out we've seen in the drug industry, maybe ever. certainly since covid. i think these drugs will, obviously, clear that hurdle over the next few years. >> will they be the biggest selling drugs of all time? >> they will be. i think the biggest kind of

impediment is going to be pay or push back. insurance companies saying enough is enough. who needs this versus who doesn't. we're not there yet and haven't scratched the surface in terms of how big the drugs are going to get. >> in ai, they talk about the chase is crowding out other crowd spending. is this clouding out other growth stories in cancer? >> from an investment standpoint certainly. these are the easiest stories to understand and the street is on to it and has been for a while. in terms of manufacturing potentially. that's one of the things that i think novo and lilly have alluded to, to say the capacity they have for manufacturing in this one category might eliminate, you know, different skews for other drugs, but i don't think we're, you know, in that arena yet. >> jared, pretty amazing story. thanks for helping us understand. >> for sure. >> appreciate it. china related stocks are rallying today on growing optimism around stimulus to

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stocks in china jumping overnight following reports that regulators are planning to brief president xi on the markets as soon as today. eunice yoon joins us from beijing with more. it does appear they're taking this issue very seriously now, eunice. >> yeah, that's right, sara. i think that's what a lot of investors believe as well, that chinese regulators as well as other authorities are stepping up their efforts to restore confidence in the markets. the country's security regulator had announced new curbs for what they described as zero tolerance approach against malicious short sellers. the state fund linked to the sovereign wealth fund announced it's expanding purchases of etfs of onshore stocks and the authorities also vowed to guide, they say, institutional investors to buy more shares.

this comes after the stock prices here had hit multiyear lows. if you look at some of the markets in shanghai, down 14% over the past year, hong kong down 24%, shenzhen down 30%. there's speculation there could be action on the market and economy because of some reports that president xi could be getting a debrief from financial regulators as early as this week. it's not clear as to whether or not those -- that meeting is going to result in anything concrete, but there is a lot of pessimism right now, guys, that really needs to be addressed. >> what sort of specific steps are they talking about, and eunice, can they do more than paper over some of the stock market losses and get to the fundamental issues with the property market and debt problems and the economy? >> right. well that is exactly the issue here, that what we are seeing is

the authorities really addressing what appears to be the symptoms of the issues, but not really the fundamental problems, that they're going after what they believe to be politically embarrassing for them, which is a stock market fall, and what that might mean to domestically here, but also internationally, instead of really trying to address people's concerns about the job market, about the lack of reform, about the lack of clarity on policy, and that's something that we're going to be watching for, especially this week if that meeting does indeed take place. >> eunice, appreciate that. good setup for our next conversation. eunice in beijing. dom chu, tracking some of the china names that trade here. >> it's been a huge, huge move higher. some of the best moves we've seen in two years, generally speaking, for some of those. if you take a look at the way things are playing out in the market here, it's the biggest u.s. listed at least chinese stocks that have u.s. listings seeing some of those gains.

alibaba up 3%, pdd, baidu, jd, up 4 to 6%. the reason they're bouncing so much is because they have fallen so much over the course of the last several years. if you take a look at the spider s&p etf versus the fxi which tracks large cap chinese stocks traded in hong kong, that gap has been massive over the course of the last several years, over the last five. 81% gains for the s&p 500. 47% losses for that fx side that tracks the large stocks. taking it further if you look at the reasons we're seeing the big divergence, it comes down to where we're seeing the market action and how much the equity values are worth. on the nyse and nasdaq listed stocks according to the world federation of exchanges, at the end of last year you're talking together roughly about $49 trillion in total market cap

across those exchanges. juxtapose that with shanghai, shenzhen and hong kong which together here get about 14.8 or $15 trillion. now the big reason why is because those values are increased for the nyse and nasdaq listed stocks, versus showing declines for the chinese and hong kong listed ones. what's powering some of those moves is very much about u.s. mega cap technology. apple, microsoft, nvidia, over the course of the last three years, nvidia up about 400%. meanwhile, those same three years, take a look at some of the big chinese names that we've come to know well. alibaba, down 71%, baidu down 60%. netease down 15%. it really is a tale of two different economies, even though, david, china remains the world's second biggest only to the u.s. back over to you. >> yep. although more and more questions as to whether it will ever pass the u.s. in terms of the size of its economy. dom, thank you.

dominic chu back at our headquarters. still to come, fears for the commercial real estate market. $2.2 trillion worth of maturities coming down and our next guest overseas $20 billion worth of real estate assets and will give us a read on the health of office properties here in new york and around the ayitusuny. st wh . power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis, help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley. oh no, a rash. maybe it'll go away. awww, how am i going to find a doctor i'll actually like?

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. welcome back to "squawk on the street." i'm bertha coombs with your cnbc news update. former president trump is not immune from prosecution in the case charging him with plotting to overturn the 2020 election. that's the ruling from an appeals court in d.c. issued just moments ago rejecting his claims of presidential immunity. the final say will likely come from the supreme court.

the massive storms making their way across california claiming the lives of three people according to state officials, all were killed by falling trees as torrential rain, flooding, and mudslides batter the state. forecasters predict while the rain will continue today, the most dangerous conditions have likely passed. country music legend toby keith has died. the news comes 18 months after the "should have been a cowboy" singer announced he had stiomac cancer. keith released his last album in november. according to a statement, he died peacefully surrounded by family. toby keith was 62 years old. david? back to you. >> thank you. our next guest told us that commercial real estate financing or refinancing has been a, quote, slow moving train wreck. where do things stand now as fears of widespread losses

continue to reverberate in the banking sector. joining us is rxr scott rechler. good to have you back. >> good to be back. >> you've been making the rounds and, you know, you're unsparing in your commentary. it's an existential moment you told "60 minutes." why are you outspoken and negative about an industry in which you are an important part? >> i'm sort of the view you take an eyes wide open approach and when you can really identify what's happening and understand it, you can take advng of the opportunities. i said that last year about the slow moving train wreck and the train in 2023 really never left the station because the markets i think became a little bit paralyzed with the surge in inflation, interest rates, what was happening with the war in europe, and then the financial shock in march. as we get into the fourth quarter people began to capitulate and realize rates will not go back to where they

were, values arnlgts going back, banks began to take reserves, the fed topped out on where rises are going to be. now it's going to start, the train will slowly leave the station, but it will be a process that is a couple year process, as $2 trillion of commercial real estate loans that were financed over the last 15 years at rates that were much lower than today, are going to have to get refinanced and are going to need injections of capital or restructures and it's going to be a rolling -- >> a lot more potential equity given the decline overall. that's one of the key questions. i mean, you, obviously, have properties you feel great about, but i think there's a building across the street you walked away from. >> we didn't walk away from it. it's a good example. we went back to the lenders and said here's a property that in its current value doesn't work, and the lenders went through a process and we said we can sell it. there was no buyer. right.

now we're finalizing a deal with the lender where we'll put in new money and we're going to convert it to a mixed use property for office and multifamily. that hasn't been one situation where we've gone to a lender where we've said okay, values have shifted, we need to reset those values, to reflect the current environment, where they wanted to take a building back because they don't want it back. they don't want to invest the capital to have to do that and the expertise to do it. if you're a borrower willing to invest money, banks are willing to reduce their loan balances to reflect the current environment and you will recreate the value there. you have to be selective. >> is it too soon? you just started a new distress fund with arias management. is it a little too early or seeing real opportunities now to put capital to work in the way that you just described with the building here on broadway? >> i think as i said, we're just starting to see this capitulation. the reserves, banks take every quarter you hear it from the big

banks and small banks and now they want to reduce their commercial real estate expe sure. they're getting pressure from the regulators to reduce commercial real estate exposure. i think the timing is right. when we came in the market in 2009, august of 2009, for the first time we were long in the market. we ended up buying $4.5 billion and got all our money back out in 2014. it's a little bit like that. the difference this time, there's no big surge of liquidity coming in that all value is going to go back up. this is a stock picker strategy. you have to pick the right property in the best location, that has all the attributes that a tenant wants to go to because not -- >> what's different now also is the fact that people don't go to the office. you are dealing with this dramatic change in work behavior. >> and then i will say to you, that post labor day in new york at least, i won't speak for the whole country, we've seen a significant change in terms of that. if you go to our portfolio,

tuesday, wednesday, and thursday we're back to precovid levels. friday is, obviously, not what that is. and monday is getting closer. right. so the return to office has changed and it's changed the psychology of companies. like i would say to you and i'll call it here, that last year will be the lowest leasing volume post-covid in manhattan. as i look forward and watch the level of tenant activity, it is increasing and, you know, vts, a group that looks at forward levels of leasing activity, there's been eight months now where there's been new incremental demand brought to market and it's 40% over where we were last year. so you're starting to see tenant demand. >> we talked about that on the show last week. so the occupancy upside we're getting, right, the demand upside, is not a false sale? you don't think it provides false hope, in manhattan? >> when you speak to the users and the companies, they made the determination, they're going to be coming back to the office.

if it's three days a week or four days a week, you need the same amount of space almost you did if it's five days a week. they're coming back to the office and want offices that are appealing and comfortable to make it, you know, worth people coming back to the office. so there's this flight to quality. that's where i think the big thing needs to be focused on. you need the distinction between which buildings will be successful and which ones aren't, right. when we invest, we're looking to invest in what i call the best of the rest. not the brand new stuff because there's not a lot of that out there, but what's right below that. >> you mentioned the lenders finally reducing their exposure here. there are new worries. last week new york community bank corp got hammered and one of the stresses was on the commercial real estate portfolio and i wonder if there's a bigger reason to worry systemically about the banks? what's your sense? >> i do think there is. i'll use the word systemically carefully after david called me out for being too hyper -- among other things.

there is a -- an issue here, particularly on the smaller and medium sized banks because we haven't really yet gotten to clearing pricing as to where this stuff is going clear. office and multifamily. multifamily tremendous amount of exposure in that market because it was a surge of deals done that were done when people expected interest rates to stay low, rents to go high, interest rates went high, rents stayed low. that's not going to work. that's in a lot of regional banks. as transactions start to happen they have to mark those loans. they may not have marked appropriately yet. on top of that the regulators are really, you know, evaluating them carefully. >> you think the federal -- we need a federal program to have like talc like thing in investment grade securities here? >> we may get to that. one of the challenges we face in the banking sector is the senior loans, a lot of money on the sideline like rxr has, but the senior loans aren't there.

we may need that to start creating liquidity. >> finally scott, some buildings don't fit, they can't be converted to residential, but they aren't a-plus properties. are they just going to be ghost buildings in a lot of downtowns where the bank has to take them back, but really there's no tenants for them? >> those types of buildings they'll start trading like land value and you'll get to a point you have to demolish them and go through a process of creating higher and better use. hopefully you'll have government policies and incentives to help accelerate that process because it is not, you know, good in terms of the urban ecosystem and the strain it puts on the local economies. that's a subset of those buildings that need to be dealt wit. there are other buildings like the ones that we're investing in, the right capital, you see the tenants are there, we have, you know, clear visibility of leasing and you'll invest money into those buildings and upgrade them. >> it's always good to get your read on things. thank you.

scott rechler from rxr. >> still ahead the head of the faa not wincing words when it comes to boeing. the headlines and more from that part of thbala, ire ckshspit aerosystems, when we return. - "best thing i've ever done." that's what freddie told me. - it was the best thing i've ever done, and- - really? - yes, without a doubt! - i don't have any anxiety about money anymore. - great people. different people, that's for sure, and all of them had different reasons for getting a reverse mortgage, but you know what, they all felt the same about two things: they all loved their home, and they all wanted to stay in that home. and they all wanted to stay in that home. - [announcer] if you're 62 or older and own your home, you could access your equity to improve your lifestyle.

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aerospace manufacturing spirit aerosystems, a figure in boeing's ongoing production problems reporting results. shares down more than 15% this year. to phil lebeau with the breakdown and more from the sit down with the head of the faa earlier this morning. what is it we learn? >> we learned that faa and mike whitaker who runs the faa and will be on capitol hill starting in 15 minutes wants more direct oversight into the manufacturing process at boeing and at spirit. take a look at shares of spirit. the company reporting its q4 results this morning. earnings well below expectations, revenue topped estimates. the real focus will be the conference calls with analysts that starts in 15 minutes for

spirit. the oversight of boeing, the faa has added inspectors at spirit's facility in wichita, kansas, where they build fuselages, and 20 inspectors at the plant in washington, where they build the 737 max, and today, mike whitaker told me, we will add more if we think more need to be added to check on the manufacturing of these aircraft. he will be out there next week to personally take a look at the process of building a 737 max and one of the key things that he mentioned this morning, they are still assessing whether or not the current wave of checking on the aircraft that are being built at boeing, is that enough or do they need more direct oversight? >> what we're doing is introducing more direct inspection, putting more boots on the ground in the factory, rather than reviewing paperwork and making sure the quality control system says what it's supposed to say we need people there looking at that. >> shares of boeing and mike whitaker said they are

comfortable with boeing keeping production of the 737 max at 38 per month. if boeing wants to raise it they need the approval of the faa and whitaker says he's not sure when they will give boeing the right to increase production on their own. they're keeping them at 38 a month. back to you. >> how about spirit aerosystems. the stock is up today. did we learn anything there about the problems and their relationship with boeing from here? >> no. not directly from the q4 results. they pulled their guidance, not surprisingly, given they're not sure what's happening exactly with max production beyond 38 a month. that's the conference call in 15 minutes with pat shanahan who became ceo in the fourth quarter who is tasked with getting spirit manufacturing on a regular basis efficiently without problems, which has been the main issue over the last several quarters. >> all right. phil, thank you. keep us posted on that call if anything comes out of there.

phil lebeau. coming up in the next hour on money movers the ceo of fiserv, the stock has been an outperformer over the last year and a good gauge of consumer spending. after the break a look at how the, quote, war on dei is impacting representation on black history is not about excluding the contributions of any. it's about lifting up the contributions of a people, but it's also about the celebration of the long work and the long struggle by black americans who were enslaved in this country and the role they played in the making of modern america. black americans are america. ♪ ♪ every day, businesses everywhere are asking: is it possible? with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats?

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2019. but the so-called war on dei is impacting some programs that fueled that increase. companies that are also trying to figure out their legal ricks. in august activist edward blum filed a lawsuit against the fearless fund, his claim is they are guilty of racial discrimination. >> we've already seen the financial impact of this lawsuit on us. we have had somewhere upwards of eight figures of potential commitments being removed just due to litigation. people have dropped out left and right. >> the supreme court decision against affirmative action is another factor. the black economicalliance released a legal tool kit to help companies evaluate their dei strategy. co-ceo tells him ceos are not eliminating dei but relee calibrating and in some cases

rebranding. >> they say they may talk about it differently and reassure us because they made commitments to us. i say as long as the work is getting done, call it whatever you want to call it. >> mlt, one of the largest, tells me they have seen a change in enthusiasm, but last year mlt saw a 60% increase in student placements from wall street banks to other big companies including apple and nike. >> kind of sounds like it's -- it's a little like esg, where they're still focused on the priorities of climate and good governance, but that word has become so politicized and sort of toxic in the environment. >> it's so funny you say that. charles phillips said it's exactly like that. in fact, he says just like some companies are moving away from dei, others are moving away from esg, but he really wanted to point out the companies really focused on diversity or just finding untapped talent. they're continuing these programs because they're finding value. >> i think there are also

questions about dei going beyond representation. it's great to boost representation, of course, but you have to build in other things like empathy and inclusion and be all-inclusive and not just targeting certain underrepresented group. that's the war on dei is a little hyperbolic. the criticism around some of these policies and sort of the narrow thinking around them, i wonder if that could be examined and addressed at the same time without undoing progress and boosting representation. >> some programs i spoke to, including troy prince says right now some people are framing diversity as the option of excellence. he says we have to eliminate that correlation. the real point is that some of these programs allow excellent people who don't have the same opportunities to get in the room, get a seat at the table and prove themselves without these programs a lot of these same people wouldn't have those same opportunities. >> it's true. it is a way to get the door open, but you have to keep the door open yourself. >> right. >> it's very difficult. some of the commentary you're

referring to, that is spurring this backlash, is gruesome. that's coloring the overall view of the acronym itself. >> yeah. i think the real question is, do you have to be against diversity to be pro-yourself? i don't think that's the case. also there's so many other programs, apollo and oak tree, they have their own diversity program where they're bringing people into their firms. they're looking for people to bring in new ideas, talk to clients in a different way. just basically boost profits. that's what they're looking at. if diversity is one way to do it, some companies say, okay, we're willing to invest in it. >> thank you. our live market coverage will continue right after this. trading at schwab is now powered by ameritrade, giving traders even more ways to sharpen their skills with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more - all crafted just for traders. and with guided learning paths stacked with content

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you! your business bank account with quickbooks money now earns 5% apy. (♪♪) that's how you business differently. intuit quickbooks. good tuesday morning. welcome to "money movers." i'm sara eisen with carl quintanilla live from the floor of the new york stock exchange. today stocks trying to bounce back after slipping from record highs. bank of america sees the biggest inflows to equities in seven weeks while citi says it's worried about a selloff in tech. we'll debate the direction of the rally.

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