happy valentine's day. is that red? she's dressed in red. final check on the markets. you can see we're still in rebound mode, at least a little bit. 108 points now on the nasdaq. i don't know if we have a chance to look at the ten-year. that's something to keep an eye on again. there's the ten-year. bitcoin, above 50. happy valentine's day. >> thank you, sir. happy valentine's day to you. >> we already have some, but we can be junior valentines with each other. >> you got flowers coming? >> nothing coming. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. how much can the bulls get back after the worst day for the dow in almost a year? worst for the russell in almost two. ten-year still above 4.3%, though, and cisco earnings tonight. our road map begins with stocks seeking a rebound after that

drop. investors now pushing back rate cut expectations until june. plus, shares of uber and lyft are both rallying ahead of the open. lyft says it expects to post positive free cash flow for the first time this year. uber authorizes a $7 billion stock repurchase. both are up. airbnb shares also on the move. ceo brian chesky says it plans to expand beyond its core service with the help of a.i. let's begin with the markets. the dow come off the worst day since last march. s&p, not as much, going back to january, but obviously, jim, some called it. in fact, it was the former president of the boston fed today said it was an overreaction. >> i don't know if it's an j overreaction. we've been up nonstop since the beginning of november, and i think a lot of people said, wait a second, we've got things like arm, which are just too crazy, where you've got a short squeeze. it's too much like gamestop. arm became gamestop, and one became a growth stock, and one

is kaput. i find there's a level of enthusiasm that went too far. and i'm not saying everything's going to be tesla, but tesla's tended to be what can happen, which is you get too far, and then the future's just okay. we'll see what happens with airbnb. do you really buy uber for a buyback? don't you buy uber for growth? yes, you can add a zero to lyft and suddenly have a huge number, but then it comes back down. it's kind of indicative of what i see. i had harvey finkelstein on last night, shopify, one of the great stocks of all time, and itgets hammered. what i'm leading up to is the idea that, look, things are good, but can we just keep paying higher in an environment where interest rates are not going to -- where the fed's not going to cut? and the answer is that it's a little more problematic to keep paying higher for the same earnings and the same sales when, david, what happens is we don't get a cut. >> right. although the same earnings and the same sales, i mean, people are willing to pay more still

for growing significantly higher earnings. >> growing. but more -- >> and that is -- >> it's more than expected. >> right. which it has been for many of the companies that we cover closely. >> the last 48 hours. >> mixed picture for the mag 7, but at least a few of them have been in that. >> the last 48 hours, you have had a bunch of companies that everybody loves, and they did the number, and they didn't raise. i mean, look at cadence. cadence, by the way, is maybe the most dovetailed partner to nvidia, and they did not raise. you have a second dovetailer in the datacenter, and they did not raise. >> was that expected that they would raise guidance? >> absolutely. >> so, there was an expectation they would raise guidance, neither of those companies did, haven't seen their -- what their open is like this morning. >> a lot of people feel they've

slowed and there's this air pocket, and i've got to tell you that both cadence and, geez, orista did say, be aware there might be this kind of overhang where a lot of stuff was bought. >> look at that chart. >> that's what i'm getting at. do you want to come in now and say, i'm just so early to arista networks? does that look like early? that does not look like early. >> no, may not be. i would have no idea. >> no, you wouldn't. >> even three-year is pretty nice. >> this is the fourth best performer since the s&p went from 4,000 to 5,000. so, you've got these stocks that are priced for beat and raise, and instead, you get beat and kind of, well, let's wait for a raise. that's not good enough. >> are you eyeing the nvidia quarter with caution? >> oh, geez, there was a note today. now, it's not been great, but we did have a note saying nvidia could just do the number.

jensen huang, does he have to do $2 billion? i think nvidia is going to have a very big long-term run. i just think it's possible that you could have an nvidia that was, like, the july to december nvidia of last year when we forget, where i would get stopped on the street and say, thanks for nothing, nvidia. >> right. >> why did you name your dog nvidia? i said, i named my dog nvidia when the stock was $50. when he had the piece of steak in my hands, that thing just jumped when i said nvidia. >> is it your sense that expectations just continue to ratchet up for nvidia, making it very difficult for hit to hit a enough bar? >> i think when you look at what mark zuckerberg is doing, buying all the nvidia he can get -- everyone's buying all the nvidia they can get, but here's the issue. maybe he can't make as many h-200s as you want to. and if you can't, then maybe they can't sell them.

i don't know. i think that -- >> really? you don't think they can sell them? >> i'm saying you can't sell something you don't have. look, maybe these are -- you consider it and say, our order book is filled. but maybe you get a dynamic which is led by, say, a frank slootman, who is -- snowflake -- who is saying, we have a lot of people who are questioning why we should pay so much for these when they don't know why they need them, and then you had an amazing call last night. brian chesky on airbnb basically just throwing cold water on what people think is a.i., saying it's basically a modified google search. >> well, in ties in with the "journal" piece about copilot yesterday. this piece in the information, jim, with the ceo of databricks, suggesting that the price of gpus will plummet in the next year because, like internet broadband constraints in the early 2000s, they loosened up in

a hurry. >> well, i just don't know how that can be true. because when you talk to the people in the bowels of nvidia, or with lisa su in the amd people, the demand from whole countries is too high. i mean, jensen did this tour -- >> well, we made the point yesterday that there is potentially going to be significant demand from sovereigns, from countries, because they want to develop their own a.i. strategy, so to speak, and he was, again, as we pointed out, in the uae and touring the region. >> do you think he was in sell mode or explain mode? >> i think he could be in both. >> jensen is a master salesperson. >> first you explain, and then they want. so, there is the possibility. we talked to stacy yesterday from bernstein, saying, yeah, it's very possible there will be more demand from sovereigns. that's not built into a lot of models. >> well, i look at what the

m&ms -- >> delicious. >> meta and microsoft. but it is valentine's day. i did not buy my wife a bag of m&ms for valentine's day. >> how about a baconator? >> i hadn't thought about that. that's something that shows love. tonnage of love. i just find that the number of companies that want nvidia and counting nvidia would mean it's -- that's just sensational. that's self-motivating. you want it to plunge. why would you let it plunge? you can go on google. you see how much these things cost. >> by the way, look at the bottom there. look what's moving again. >> well, we know, david, that's arm, that's a shortage caused by people selling calls. thank you, redburn, for explaining. >> they did a nice job. >> wasn't that a nice piece? >> they did a nice job of explaining the short squeeze that we said it was. pointing out 104% for trading days.

by the way, just think about the estimates in terms of where the stock is now in terms of its valuation. 64 times enterprise value over ebit. that is an 80% premium to cadence. >> which is the -- it's very funny. cadence is -- well, cadence is one of the best performers last 10 and 15 years. i do find, carl, that everyone wants to find the next nvidia. i would say, wait until next week, and you're going to get nvidia all you want. there's your chance. >> there is a nice little upgrade of hp today, jim, basically rhyming exactly with your thesis the last few months that the refresh cycle from things we might have bought during covid in the way of pcs, then the newgeneration of a.i.-capable pcs is going to drive what is the second biggest pc seller. >> you're going to see a.i. for consumers. by the way, i think that before we trash, suddenly, copilot, that's going to be a.i. for the consumers. now, if chesky is right from airbnb, all it is is, tell me what hotel i should stay at, which he's saying that's not

sophisticated enough, and that would show you that a.i. is not what we think. i don't know. >> do you use it regularly yet in your daily -- >> i have used it for summations. >> but you don't -- do you use it every day? >> do i use it every day? no, i don't. i use it when i'm stumped, and i use it for guests where i say, i got this guest on, i need to find out if i'm missing something. i use it to double check. i don't use to it create. i use it to say, all right, am i off-base? unfortunately, we don't have to interview politicians, but any time i've interviewed somebody where there's a political angle, i go right to it. i want neutral questions, and so far, i think that a.i. does not really have a bias. >> still, something you wouldn't have done a year ago. >> oh, no, not at all. i would have said, oh my god, i got to google five articles and ten this. no, i just go and say, okay, what does jim farley think about, i don't know, what's going to happen in the future

with the cybertruck? and then overlay that with the credits, and are the credits going to continue, and then overlay that with china traarif and give me what people are saying. that kind of thing. is that all right? >> that's fine. i'm just curious as to how you're using it during your day. >> i say, how bad is kraft? >> work habits change over time. for me, until it's readily accessible, as you say, via my pc perhaps where i just speak to it and it tells me what i want -- >> i'll go a step further. until my daughters tell me how to use it better. my daughter uses it. >> that's usually how it works. >> she's got a subscription to adobe. there isn't anything she doesn't send to me that doesn't look better. >> it used to be about setting the clock on your vcr. >> yeah, but i go to my daughter for what she's doing with adobe, i think its looks like broadway show, what they used to do with the marquee. i don't know. david, what does jonathan --

we're not supposed to mention names. i'm sorry. >> that's okay. >> what does robert say? >> what does kevin say? i don't know. >> a quick internet search. they'll have his social security number in five seconds. >> when we come back, we'll get the rally and the ride-sharing companies, but that major earnings release with lyft last night sent those shares on a wild ride. hanging on to gains, though. take a look at the futures. not a lot of data today, but goolsbee in about 15 minutes, and then barr after the bell. back ia me. n mont trading at schwab is now powered by ameritrade, unlocking the power of thinkorswim, the award-winning trading platforms. bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. tailor the platforms to your unique needs with nearly endless customization. and track market trends with up-to-the-minute news and insights. trade brilliantly with schwab. a car is a car...

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talking about that company's earnings release error, initially sent the stock soaring more than 60% in afterhours trading. >> i think this will be an s.e.c. investigation, trying to figure out whether it was anybody who may have been involved in some sort of s chicanery, which i don't think is the case. it's a shame. it was a real good quarter. >> bookings up 17. not as much as uber's, but still revenue up, positive free cash flow this year. >> yeah. risher came on "mad money." he's a delight, by the way. he's taught more people to read than anybody. he spent years after amazon just working on literacy in africa. i mention that only because sometimes there's a little bit of a context you got to put for a guy. but he did a connect women initiative, which worked, and he's doing an airport initiative for on-time, which has been terrific. david, i think the ultimate takeaway is when you look at

lyft and you look at the buyback, you know, from uber, what you can say is, this is one of the -- still one of the great growth stocks. >> oh, overall growth. >> ride share. >> ride shares i mean, lyft, better than expected take rates in the fourth quarter. marketplace efficiencies. i'm reading from an upgrade to neutral in moffett nathanson. they got it wrong. >> they said in the first sentence they got it wrong. >> exceeded revenue for the entirety of '22. and demonstrated better than expected cost discipline. speaking of cost discipline, of course, uber has been sort of buying into that whole year of efficiency. >> uber's terrific. >> we told you about the $7 billion buyback. they had an investor day on going today. a lot of different metrics introduced, but a lot of the main ones are, as you might have anticipated, in terms of free cash flow conversion staying right -- or perhaps being as high as some would -- the bulls would say 90% of adjusted

ebitda. 30 to 40%, and the stock also reacting quite positively, in part to that buyback. first ever from the company at this point. continued growth, continued focus on cost, and not to mention what generative a.i. is going to mean for them at some point down the road. >> sure. by the way, that's -- let's go back to the airbnb. same thing. gigantic buyback. carl, we never bought these stocks from buybacks. we bought them for growth. i wonder whether there won't be a cohort which just says, do you mean to say that the best thing you can do is buy back stock? aren't you visionaries? >> it's being framed as, you get back to operating profit, a positive net, positive free cash flow, then you start capital returns. isn't that how it's supposed to work? >> that's what meta's doing. big buyback. by the way, nvidia's got a buyback. i just think that when i look at what airbnb wants to do with its platform, i would think it costs more than they're saying, and they can become the ultimate destination platform.

when i think at lyft, i would like lyft to be doing more than just doing ride share. they're going to be cash flow positive. and then, of course, with -- when you talk about uber, i mean, i want uber to become, you know, wipe out instacart, david. wipe out instacart. >> uber is the giant. >> they are. >> lyft can't even compare, really, in any way. when you're talking about a company, the bulls would say, can do as much as $9 billion in free cash flow by 2026. >> therefore, it's worth it. >> that's still two years away. >> they have an asset-light model. >> you throw a multiple on $9 billion in free cash flow, discount that back, you still get to a pretty decent price. >> i'm just saying, the old days. year of efficiency changed everything. when zuckerberg -- okay, let's just put our cards on the table. zuckerberg is cool. is it the hair? >> we'll talk about the whole vision pro product review. >> you want to be his pal. you're going to go down there and do one those musk

interviews. are you working on a musk interview? just tell me. >> i've got them all going. all. very close. i'm a text away from nailing both of them down. in fact, together. >> carl, i knew it. >> together. >> you know when he's not -- that 11:00 that you do? >> the best show of the day? >> of course. he's a booking magician. when we come back, we'll get cramer's "mad dash," countdown to the opening bell. lot to get to. kraft heinz, disney, walmart, citi and ulta in a minute. meets bold new thinking. (laughter) at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. old school grit. new world ideas. morgan stanley.

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we have seven minutes before we get to the opening bell here at the new york stock exchange on what jim and i still like to call hump day. time for a "mad dash." robinhood, we hadn't gotten to. >> listen, friar tuck, this was actually a pretty good quarter, and i'll tell you a couple reasons why. one, they have some -- they actually have a trading group of people. now, david, if you have a trading group of person, you're not going to earn that much on your account, so you're not getting that 4 to 5% that some of these other brokers have to give, and that -- even schwab, which is a company doing much

better than people realize, but these guys have trading balances that they make a lot of money off their customers. at the same time, crypto is 20%, and options is 60%. that is in the new world what young people do. so, they've got a young bias. they have a couple new products that work. they've got a gold subscription that people like that is a little -- gives you a little more things for your money. i like the quarter. and i like the fact that there are younger people coming in and not just buying etfs, which just say, listen, you don't know how the hell to pick stocks, so let us pick stocks. we have an etf that is good for shovels. >> is it any different than what they're doing on fanduel? or any other betting platforms? >> no, it's more like draftkings. >> okay. >> it's daily fantasy for stocks. if you play kelce, you make no money at all, but if you play hardman, that's like a call on arm. you're so right. i may have to do that piece.

which is better, putting the money on hardman -- he's the guy who won, by the way -- or do you put the money on options on, i don't know, let's say, tesla? >> right. >> so, the answer is, yes, you're dead right. >> all right, well, maybe they'll -- who knows? >> by the way, jason robins runs a darn good brokerage. >> i bet he does. >> how much does he make on that money you've got in your account? don't forget, you can catch us any time and anywhere. listen to and follow the "squawk on the street: openingel poas dct. bl"

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and son-responsible investing. all right, guys, so, i finally tried apple's vision pro, and, you know, i have to say that before this, i expected that quest would be the better value for most people since it's really good and seven times less expensive, but after using it, i don't just think that quest is the better value. i think that quest is the better product, period. >> that's zuckerberg reviewing the vision pro, jim. it's all fair game to do your review, even if you have a competing product.

>> he had some things that were good to say. he didn't trash it. i think he was ironic about it. i think that, david, he was kind of playful, but his most important thing that he said was he believed you can't get the ray-bans. >> he was being filmed not with the ray-bans but by a colleague who was wearing the full set, which is lighter, and if you watch the entire video, he obviously says that he outperforms the vision pro in many different areas. i did find zuckerberg here so much more natural than i'm accustomed to. >> that's what i'm saying. >> i know it's just presentation, but you know, he has this robotic way oftentimes. >> not anymore. >> not now. >> he's been freed. >> yeah. >> it's incredible. >> he seems like a normal person. >> that is zuckerberg. that's not his digital twin, right? that's him. >> i think it was effective. i think it was effective. people will watch it, and it was

interesting to listen to. >> i mean, dare i say, carl, that there was enough, i would say, sardonic but not cynical attitude that made it fun to watch. >> do you agree that the vision pro is not as good? >> i happen to love the vision pro. i think that the meta quest is very good. here's the way i look at it. i would say that, you know, my kids work, and my kids aren't rolling in it, but it's a toyota, and i think that the -- the vision pro is maybe a lamborghini, not necessarily a lexus. >> yes. >> you lower the price so it's not a lamborghini, and i think you get more buyers. although i had a hard time trying to get an appointment this weekend to try the vision pro. >> yeah. >> when are you getting yours? >> i have to delay it, because i have to find time. i'll probably get it on friday. >> what about the meta?

>> have it. >> you have it? what do you have? >> the meta -- the three. >> you do? >> quest 3. >> you'll be able to give us your own product review. >> yeah. remember, my one daughter has the glasses. one daughter has the three, and i got gamer, you know, the gamer daughter has the three, but games are interesting and exercise, she does yoga, and that's her kind of -- that's her milieu, and my other daughter is a baker. she loves instagram, carl. she just says, look, it's a great dovetail with instagram. it really is. >> we'll keep an eye on it, obviously. exciting times in hardware. by the way, at the opening bell here at the big board, it's new york cares. at the nasdaq, it's a biologic celebrating a recent listing. back within points of the s&p 5,000. the interesting thing about

yesterday was the pop in the vix and that history would expect first half volatility kick, maybe you're due for an overall 5% slide. >> i think that what happened yesterday, you had everything go down, and now we're going to start looking at things that are attractive. interest rates are behaving today. what i don't want to see is that the money gravitate toward oil and gas, because that's been creeping up, and there's some very good stories there. so, i would hope that the rally does not just concentrate there. i want to see the financials -- financials were really tagged yesterday, and so i'm a little worried about that group. tech's had a big run. financials were really kind of nascent. >> we are on the lookout for a lot of post-cpi fed speak. we mentioned goolsbee out a few moments ago. let's get to steve liesman. >> hey, yeah, austan goolsbee in remarks being given right now is saying that the fed should not

wait until inflation is at 2% over a one-year period in order to cut rates. he says you have to have confidence, but he can have that confidence without the one-year annualized rate being at 2%. higher inflation, he says, for a few months is still, he says, consistent with being on the path back to a 2% target. again, goolsbee, the first fed official to comment since that hotter than expected cpi yesterday, and he says the decline in housing inflation is "not as fast as expected," but the cpi housing data is at odds with the market data, which we have been talking about, and he says he's watching that difference there. he says it's important not to judge a trend from a single one-month number, and the cpi and the pce, which is the one the fed follows most closely, can sometimes differ significantly. just a couple more comments here. he says the current policy stance is quite restrictive and that real rates or the inflation-adjusted rate, is "as high as it has been in decades." if you're not getting the point

there, goolsbee seems to suggest the fed ought to be moving soon. he says maintaining the current funds rate will create concern about the employment side of the mandate. he says productivity has rebounded and could have profound implications for the economy, and he also sees inflation expectations as anchored. carl? >> steve, thanks for that. we're not done, by the way, for fed speak for the week, jim. waller tomorrow is going to be interesting because he was, in some ways, the tip of the spear for rate cuts. >> i think that there's -- i heard for the first time today someone on air say, look, if anything, you need a rate hike, and we need some clarification from people just saying, yes, we're still on the course, which says we're watching more for a slowdown. i don't think any of these numbers -- he was talking about the migrants and the governments being able to rent all over the country because of the huge influx of eight million people, but i car about unemployment. if unemployment were to go to

4% -- there were a couple of big retailers that i want to mention that are teetering, and have liquidity problems. you'll start reading about those layoffs. without layoffs, i think that we're just on hold, and i don't care what these guys say. >> are you willing, at this point, to guess if we retest 4.5%, let's say? >> only if we have a gigantic failed auction. we got our guy, josh frost, in there. >> who you've been a fan of. >> that guy's fantastic. he's a hero of mine because he actually decide -- he speaks to a hundred bankers, he realizes where the demand is, as opposed to just saying, all right, here we go. let's do some $30 billion of the ten-year. david, we have pros in treasury who are trying to make this so that we don't -- interest rates don't spike. they have more to do it with the figure than the cpi. >> it's not an unimportant position that gentleman has. >> yes. >> because we have been very focused on those auctions for obvious reasons, and they can be dislocating for the market should they not -- >> i want to ask ruben about the

auctions, when he was running treasury, and his answer was very interesting. he said, it's not anything we should ever gain. didn't want to say, look, we -- this is how we do it. we're going to look and see how much we can make the most money for treasury, and we're going to do that. we're not out there trying to figure out how to not hurt the market. as if -- that i was basically being meretricious and rapacious as opposed to being prudent. >> understood. understood. did you see that story yesterday, walmart may be buying -- >> i'm so glad you brought that up. to me, it said that if i were the people running roku today, i would be running scared. >> roku did react to it yesterday. today, roku shares, at least a moment ago when i looked, they were up a bit. >> yeah, great. >> look at walmart. >> no problem. >> one read on it from ormorgan stanley's analyst is that it's all about advertising. walmart is the largest retailer in the u.s.

we know that. but it has purchase data on what they say is roughly 90% of households, at least to some extent. so, ownership of a distribution platform, remember, these are all connected these days, of course, could help it grow its advertising business. and they're talking about $3.5 billion in revenue this year or, excuse me, last year, could be as much as $6 billion by 2025. now, for a company like walmart, that's still incredibly low number in terms of revenues, but those are high-margin revenues as we know from amazon, and that can help drive earnings growth. >> you turn it on, and you would be able to see walmart -- >> you get walmart plus. yeah. you probably would be connected in there, not to mention, obviously, that you get to see your behavior in other ways and share that data with your advertisers. >> i don't know about your walmart, david, but my two walmarts, when you walk in,

before the super bowl, the deals on big-screen tvs reminded you of -- it's like buying a, you know, a 25-inch sony from best buy right now. i mean, it's a 65-inch -- walmart offers such incredible value on tvs that i would be shaking if they bought vizio. they have like $240 for a 60-inch tv. >> it's really about leveraging their advertising business, so it becomes like a razor -- i mean, they'll sell you a razor for nothing. >> right now, i turn my tv on, carl, and i have a samsung. i've never clicked on that thing ever. never will. >> mine comes up every time. samsung tv comes up, and it's all these procedurals with all these actors you know, and i'm -- but i never watch them. >> they need money, the actors. >> i can't figure out how to get rid of it. >> i know, but you start -- i can't either. and it drives me crazy. i say to my kids -- sends me to

a painting, which i really don't want. right now, i got a painting of the add irondacks. i go to samsung and it's a fire/cop show. >> i got to understand the economic model behind samsung tv shows. >> at samsung today, they're probably saying, what's the economic model? the top brass. anybody know? we made america know who we are. >> it's employing actors, so that's good. >> interesting, jim, speaking of walmart, evercore today, tactical underperform. >> for target. >> we see potential near-term downside due to what we likely believe is going to be conservative guide tone on the consumer on february. >> i think they're loath to be able to say the consumer is not doing well. >> even after mcdonald's or other -- >> that's -- you know, i think that people are turning

against -- they don't regard healthy good at any value, and i say that because when you talk to jack hartung at chipotle or brian niccol, they say, listen, $40,000 a year customer is buying the same thing as the $150,000-a-year customer. at mcdonald's, i don't know -- burger king, by the way had really good numbers. they really -- patrick doyle's on last night. they had the best growth in burgers. david, burger king is back. >> burger king is back? >> they did this flame -- refuel the flame. >> i didn't know they had gone anywhere. >> i said that to patrick doyle too. i said, are you telling me this is like when you first took over domino's? i had breakfast with him before the campaign, and he goes, jim, i'm thinking about doing this campaign that says that domino's tastes like shirt cardboard, and i said, geez, i don't know how well that will go over. he said, watch it. it was the most brilliant campaign ever. listen, we're losing the shirt cardboard, and corrugated tastes

better than our banana peppers, and boom, best-performing stock in a generation. >> as we think about consumer health, there's a piece in the "journal" about auto insurance and how transitions to delinquencies on auto insurance annualized is the highest in 13 years. we saw this in the cpi yesterday. >> well, why stop with auto insurance? i mean, every kind of insurance is high. by the way, i don't know if you've seen -- if you try to get a health care policy and you're an individual, a self- -- a proprietor. i mean, your entire profit goes to it, and you got to have a $5,000 deductible. >> now the tax refunds are coming in light. fewer refunds, lower refunds, fewer filings year on year so far. only a couple weeks in. >> biden better send us a $1,000 check before the election. someone else did that.

it's novel. >> it's an idea. >> it's an idea. >> or you can just own nvidia. >> thank you. >> that's wealth creator as well. >> thank you. >> nvidia, our usual check on it, up 1.5%. >> versus what, the company that bezos sells $2 billion every night? >> i would make the point it continues to move up the market cap. >> jensen's not selling $2 billion every night. >> $1.8 trillion. it has passed amazon, in part because amazon shares have not moved up as much of late, and it is approaching alphabet's market value. it's only about $20 billion away. it can make that up in a matter of minutes. so, yeah, nvidia -- >> what has alphabet done for me lately? >> -- moving up into the top three. >> what's alphabet done? how was that last quarter? >> alphabet is up 4.4% for the year. >> go waymo yourself, david. >> is alphabet going to surprise us with its cost discipline at some point, or is it going to

truly lose its grip on search? >> a year of inefficiency, apparently. >> year of inefficiency. >> the year of living safely and bad. mel gibson -- linda hunt. >> linda hunt. "year of living dangerously." >> is that linda hunt? >> yeah, linda hunt. >> i think just not recognized as one of the great movies. fantastic. >> oscar nod for her. >> well, google is not living dangerously. they're living safe, happy. >> i would say that they are living dangerously. >> in terms of their stock. google has not had a great number. everything else was so convoluted, you didn't notice they had a great number. >> well, david, toyota motor is down. that's the first time that's happened in ages. there's the stock. >> that's -- this is jim, by the way, looking at the tape, which is what he does nonstop. go see jim up in his office, he's just looking past you at the tape. >> what i love is waking up at 5:00 and seeing a tweet from him an hour before. >> i was late that day. i was late this morning. the other day, i had one at 3:15. that was much better.

>> toyota has had a great run, though, in part because we have said many times on the strength of the hybrids. did you read "the journal" story? lot of what we discussed in terms of changing demand for evs and what's gone on there. your friend, jim farley, in terms of reacting to it. don't hear you talking about the f-150 lightning as much as you once did. >> you see it's not doing as well. what do you want me to say? >> exactly what i want you to say. thank you. >> yeah, and i can blow up my friendship any time i want. >> there's some global ev data today. month on month, down. that's subsidy cuts in germany, france, not to mention chinese new year, china weakness. >> byd -- how many can mexico buy? 33% of mexico is evs for china. >> it's going to be even more. >> yeah. there's 55,000-person pueblo vw

factory. let's say you get a gigantic, tectonic election where the democrats win, there will be a governor who says, okay, we're not having any hydrocarbons in our cars by 2029. and then that's it. >> who's going to do that? california's -- where are they? anybody remember? 2035? >> i'm saying they got to do -- i'm saying they'll do some radical thing, and that will be it. that's it. and that's it. everyone's going to have to go ev. i'm saying this is a tectonic shift election if that happens, and i think there's going to be states that say, look, you got to go buy a new car. >> if you don't have a charging infrastructure, and you're basically subjugating everybody to not having enough power for their cars -- >> have you seen the taxes in california? do you think that they're not afraid to do something radical? >> they've already done something somewhat radical. >> nobody leaves. >> they do leave. >> where? >> they go to texas. >> well, yeah. >> they do. they leave. >> you look at eton.

>> california is amazing, it's like 40 billion people, the fifth largest economy in the world. >> i'm positing that if you have a green election in our country, that there could be some states that make it so that they're the ones who decide. >> do you think new york three last night suggests that's in the offing? >> that was an interesting -- >> by the way, morgan stanley, jonas note today, just back from easily the most bearish of our tesla bull/bear lunches. >> didn't you love that? >> some doubt sales grow at all this year. most see consensus falling and a.i. "off the table for now." >> i lovethat piece. >> doesn't sound good at all. >> he reiterates overweight. >> that's just clients showing up. they're all negative. we're talking. >> did you notice the stock of tesla stopped going down? >> hedge fund managers. >> tesla is not going down anymore. >> it's stabilizing. >> look, i'm not -- i think fan boys are going to buy the cybertruck, but i think that tesla's next generation is going

to be huge. it's going to be huge. i think the last one you had was steve schurr talking about how it didn't work for hertz. the next generation could be huge. >> is it going to be be able to compete effectively with byd in markets other than the u.s.? >> i think byd is scary, how inexpensive it is. but then again, prc is trying to put people to work. >> it's not just inexpensive. apparently it's a fairly high level of automobile. >> it's a good car. that's what i keep hearing. >> that's buffett, right? >> it was. >> i'm hearing great things about it. but we're not going to let it -- neither president -- look, we have a union president, the guy who walked the picket line against ford. he's not going to let china come in. and then we have trump basically saying, listen, we have $500 billion business with china. that goes to zero. zero. 60% tariff would go to zero. >> yeah. we'll keep an eye on this. obviously, as jim has pointed out, the election is getting folded into markets by the day.

dow up 63 here. back to 4,980. watch bonds, pretty much a data-free day, but these goolsbee headlines were interesting, and we'll wait for barr this afternoon, waller tomorrow. back in a minute. oh, charades! - okay! - love it! umm... first word. - tonsillitis! - nostril! uh-uh... bill! 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

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let's get to jim in stop trading. >> one of the things happening

is g.e. is going higher. mostly because of engines for aircraft but today ge is about to be spun off, the energy business, a lot of green energy. they just got approved, ge's nuclear fuel business for higher enrichment fuel. people love anything involving, you know, small reactors anything involving any way to be able to make nuke clear fuel wo nuclear energy work. hats off to larry, ge health care it's been a rocket and now this is going to work. i think he has the sight, it's not just for show. >> i wonder what you think it says about the industrial cycle, jim, on a time we're getting hotter numbers out of the south carolina -- out of south korea manufacturing and stuff like that. >> i think there's a huge

secular story to travel. i didn't think marriott was nearly that bad. yesterday they give a bit of what they thought could happen but it's more financing than travel and travel was hit. they're riding the secular wave and he did that. he doesn't get talked about much, the reason is he's not seeking any publicity at this time. >> you are going to talk to chuck tonight. >> yeah. i know cisco said this next quarter may not be that good either. but these people are my friends and i want chuck to deliver a good number. >> i know you're rooting for them. >> and then generac. i have one because the power is so bad at my place. the generac trades by the way, with solar. trades with first solar, it trades with the young person's favorite stock which is end phase energy. when i get stopped in the street it used to be tesla now it's end

phase. >> sold. financing as well as an important part of the business. >> i'm liking tesla holding at 280. >> it is? >> yeah. but i wanted all day for jonas. whatever jonas writes it's like when charles diggens put it -- >> nvidia and phetrealab a like this in market cap. >> what has alphabet done for you lately? >> we'll get to more of the big earnings movers in a moment. conquer hair thinning... ...and fall in love with your hair all over again. only from nature's bounty.

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good wednesday morning, welcome to another hour of "squawk on the street" i'm sara eisen with carl quintanilla and david faber from post nine of the new york stock exchange. up .6 in the s&p trying to rebound from yesterday's ugly day. nasdaq up .8. communication services in the

lead today along with industrial and energy. only consumer staples are lower thanks in part to kraft heinz down 5%. treasuries yesterday, on the back of the disappointing cpi data, ten year below 4.3. two year at 4.6. as expectations coalesce more around a summer rate cut around july is the first 100% in terms of the swaps market. 30 minutes into the trading section. shares of uber are rallying announcing the first ever buyback plan. the board agreed to purchase back up to $7 million in stocks. lyft going on a wild ride after a typo on its earnings release. however it was still a strong quarter for the company. more on these two names straight ahead. airbnb going the other way. the company planning to buy back

$6 billion worth of stock. buybacks are very in right now. guys i think we should start with the latest fed speak which came in the last hour from austin, the chicago fed president because it was the first to get a reaction to that hotter cpi inflation report. here's what he says. >> the fed has a 2% inflation target. that is on pce inflation. not cpi. there's a little -- we can go through the differences. the major differences right now center on the very categories where things are acting weird. so there has been a bit of a gap between cpi and pce inflation. as i say, especially about inflation, one month is no months. so let's not get amped up when

you get one month of cpi that was higher than what you expected it to be. >> that last part i think was the key. because it sort of jibes with the notion that they're not going to freak out about one month's data coming in hot on the monthly and that's what the market was grappling with yesterday. how many cuts do we have to take out this year, worry about rates going higher potentially, not that that was priced in but question marks about how the fed would react to a 4% month over month rise and a 7% in the supercore. >> do you want to explain the differences since he didn't. >> cpi includes more of rent and that's the biggest knock against it. it's why it's been skewed higher first of all. >> is that the weird stuff he was referring to? >> that's one of them. it's different methodologies but the owner's rent and the shelter component of cpi is a third of

the price. that's why the fed pays more attention, why it's been trending lower as well. there's also a report you were watching about powell. >> yes. yesterday powell apparently did have a closed-door meeting with democrats on the house financial services committee. that's not unusual. he goes up to the hill a lot, powell, to talk to both sides. but what so many people are focused on is the fact that whatever it may be he said, we have some quotes from one rep who was in the meeting, you know, that they're going to be waiting for pce to give them more intel but didn't get particularly excited about the hot cpi number. the market did end down sharply but it rebounded around the time that meeting ended. we all know that house members do like to trade stocks. so just interesting going around that story, at least we do know the meeting took place. >> just another reason they shouldn't be able to trade stocks, perhaps. >> don't know what was said but when you look at a minute by

minute of yesterday's s&p see right around 3:00 or so, a rebound. >> that goes with the narrative the fed knew it was going to be bumpy getting from 3% to 2% wasn't going to happen in a straight line, weren't expecting it to happen in a straight line. they want to see progress but one data point isn't necessarily enough. >> i made this crazy chart of cocoa prices. i don't know if you have seen what's been going on here. the price of cocoa, the commodity, has basically gone parabolic. there's the five year, doubled in the last year, it's at a 40 year high. there's been extreme weather in aftrica africa, it's damaged the crop. ivory coast has been a huge problem. at one point the dealers weren't even putting it for sale. people think it could go higher.

i point it out to show you we have things to weather and other issues. this is something the fed can't do anything about it's the weather p and it's why you're paying higher prices. i spoke to hershey's ceo, it's one reason why their earnings are supposed to be flat this year and why mandalay is still talking about price hikes in a moment most packaged companies are going low r. so the unfortunate valentine's day chart for you. >> it's pretty fattening. >> yeah. chocolate? >> yeah. >> but it also has health benefits, especially dark which is my favorite. >> it's my favorite too. >> because it's valentine's day in the air and so much love between taylor swift and travis kelce. another company mentions lost in an earnings race. forget the dollar, last year

lyft said fans flocked to stadiums with these rides growing by more than 35% year over year, driven by high attendance stadium events including taylor swift, beyonce concerts, the u.s. open and football games. a number of companies mentioning taylor swift. here's my favorite. nbhc, national bank holdings, a small colorado based bank unlikely mention of taylor swift as well. they had particular strength in kansas city this quarter. in terms of the markets, i'm really proud of our team in the midwest based out of kansas city we've seen nice growth coming out of that market. we've described that market as middle of the road, solid player but that's a market that's really stepped up and guess why? i think it has something to do with taylor swift and the c chiefs. but there is momentum in that market. sounds like he was joking but maybe not. >> maybe not. she casts a large shadow.

>> best you didn't think i had the national bank -- >> i didn't know where you were going when you said love was in the air. i should have, of course. >> we don't have any major economic data releases so it's taylor swift and cocoa today. our next guest does not expect the feed to ease any time soon. saying the latest cpi is not a concern. ed, it's great to have you. >> thank you. >> great to read your stuff lately. talking about your 5,400 year end, 6k year end '25. if anything your concern was a meltdown. did the print or the action yesterday change that? >> i hope so. i would not like to see a meltup. there are a lot of fun on the way up, but almost by definition melt ups imply they're followed by meltdowns. so i'd like to see it continue to be a normal civilized bull market, move up with earnings

and economic surprises on the upside. >> did you see anything that suggested that the data yesterday will interrupt an overall downward trend? >> not the way i sliced and diced it. i think the fed will look at it and conclude maybe they were smart not to move too quickly here confirming the market is right. i think the market is wrong. i think inflation is coming down, that'sno reason for the fed to rush to lower interest rates when the economy is doing so well. why mess with success is my motto here thinking about the economy. but when i look at the cpi numbers yesterday, they weren't bad. i'm a big believer, carl of taking out whatever doesn't support my story. so if you take out shelter, the cpi inflation rate both core and headline were right around 2%. the cpi is already around 2%. just that annoying shelter

component that's taking its sweet time coming down. >> it's that gap between oer and primary rent or oer and new rent. is it taking longer than it should? >> not really. it's doing what it typically does. it's nothing new. and i think that the fed would be wise and all of us would be wise to look at what inflation is doing excludeing shelter, recognizing that market indicators of rent have come down rather substantially. i think we made a tremendous amount of progress bringing inflation down. but again i don't think the fed has just tightened over the past two years. i think they've all normalized. everyone that point out the fed raised interest rates by 525 basis points should mention from where? from zero. zero was abnormal. rates are back to normal. 4% is where the bond yield should be in my humble opinion given what the economy is doing

with low inflation. >> we -- i mean, there were also some pop ups on inflation in medical insurance, transportation services, and i get it that shelter was the big thing there. food ticked up. the fed does not want to see those go in the higher direction at this point of the tightening cycle. i guess the fear is if they get more evidence need to see more evidence to get rates, if they push it out, does that have a more restrictive and harmful impact on the economy and the market? >> i don't necessarily think so. by the way, i think we can get kind of lost in the details when it comes to the cpi report. certainly you can pick out that auto insurance increased i think 20% year over year. it was just a high flyer. but i think that when you look at inflation, monetary policy perspective, you look at the overall number. and that would be including shelter, but at least you would

recognize that shelter is a bit of a bizarre component that takes awhile to come down. but i don't view the current level of interest rates is going to kind of recreate a lagged an variable depressive effect on the economy. in the past what caused recessions is monetary policy causing a financial crisis, something to break, causing a credit crunch which is what causes recessions. this time around the fed did, in fact, create a little crisis in march of last year but within two days they came up with liquidity facility. so we haven't had a credit crunch and we haven't had a recession. i think the economy is doing fine. >> yeah. as you wrote the other day, almost as good as it gets. we'll keep track of it with your help, of course, during the course of the year. great to check in with you. thank you. >> thank you. before we head to break. big name guests to let you know about, the ceo of kraft heinz.

the company reporting the third straight sales miss. we talk to him. and nelson peltz with us to discuss the proxy battle with disney and the results of disney and slew of announcements that came last week. as we head to break, our road map for the rest of the hour. nvidia's market cap getting closer to alphabet. the mag seven should be named the fab four our next guest said. >> i think it just passed alphabet. we'll look at the other rate sensitive stock, talking about reit's for example, are there opportunities. shares of robinhood soaring, making aggressive moves to get market share from the rival ji giants. what the street is saying about that stock. don't go anywhere. hm? you! your business bank account with quickbooks money, now earns 5% apy. 5% apy? that's new!

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5% apy? that's new! ♪ ♪ ♪ ♪ god a news alert, elon musk is seeking to pause a ruling on his pay package, according to a new court filing. musk and the tesla shareholder who won a verdict voiding the pay package are proposing a stay of the pay ruling until an appeal is resolved. keep an eye on that. tesla is a tech name our next guest is shorting. saying instead of the magnificent seven it should be four. just moments ago nvidia did top

alphabet making it the third biggest company. dan, let me get it straight. you're long four of the mag seven and short the other three? >> that's right. >> what's the strategy? >> well, i think if you look at the last couple of years earnings haven't really mattered. go back two years ago, 2022, they all went down pretty hard. the magnificent seven were down 46% in 2022. look at 2023, earnings didn't matter again there where as a group up 111% despite the fact that tesla's earnings for the december quarter came down 50%. look at apple, similar situation, earnings came down 10% in the fourth quarter and the stock was up 46% or so. so it didn't make much of a difference. you look at this earnings season so far and the earnings have actually started to matter.

apple's numbers came down for the fifth quarter in a row and the stock went down. tesla, similar situation that's down over 20%. google, it's more mixed in the sense that their most important businesses, search, youtube, owned and operated, all three of them missed in tadvertising. you put that in contrast to meta where they crushed the advertising numbers. you combine that with amazon did great, beat operating profits by 20%. talked about nvidia. and microsoft did well on azure and that's why we have the fantastic four on the long side and short the other three. >> the four you're long are consensus and you had a great call on meta last year. now it's up another 32% year-to-date. nvidia up 49%. does it make you nervous that we're sitting on top of the

gains in many trades that everybody likes? >> not really because you have to look at valuation which is something that, you know, very few people want to talk about. they want to say, i love this because of, you know, big subscriber numbers or whatever. look at a meta, you're right, the stock doubled -- sorry, tripled last year almost and it's up again strongly. but it's driven by earnings unlike an apple or tesla, meta's december quarter eps over the course of last year went up about 90%. so there's a reason the stock tripled -- almost tripled. if you look at this year, it's still trading at a 24 pe you compare it to the s&p you're not paying much for it. nvidia revenues expected to grow by 70%. i think it's a big beat and raise again but you're paying 38 times for it. it's hard to say you're in an

overvaluation for some of these names. with amazon i think you see the gap eps double from 2023 to 2025. so again driven by earnings and then microsoft obviously with co-pilot and their investment in open a.i. which produces chatgpt seeing a lot of benefits from that. so i think you have to marry the valuation against this and apple is the one i like to bring up because you had no growth. you can look at what they guided to for the march quarter. >> you've been negative on apple for a long time, dan, haven't you? >> yeah. look at the growth. >> in part on the same thesis they have no growth, which is true but it hasn't stopped the stock going up. >> yeah. and that will happen. that's why i brought up you have last year earnings didn't matter, year before that, earning didn't matter. but this year the stocks have dispersed based on how the earnings are turning out. so we all know that earnings

short term doesn't drive stocks. it's multiples and what are they doing. over the longer term, earnings always matter. and so, i think you're starting to see that play out now. >> yeah. i mean, but it feels like you're just a momentum investor at this point? >> no. it's not a momentum investor. i'm an earnings investor at this point. and i try to marry that with multiples. you look at apple people want to say it's china, it's affecting the companies. it's not a china problem. it's a competition problem. you have huawei on the rise, you have smart phones from other players that have things built in like the galaxy. apple doesn't have any of that right now and you want to pay 27, 28 times p.e. when you can buy the s&p at 21 times which includes a lot of these other great companies that are, in fact, growing revenues. be my guest but you're taking a lot of risk in doing that. and that's why i focus on

valu valuatoin. >> i get being long but why you've decided to be short or is it a hedge on the other side? >> it's not a hedge. apple's earning have been come down five quarters in a row. i don't think it's over because huawei is not finished gaining share neither are a.i. phones, et cetera. with google you have to look at it and say they missed all the search numbers. that's an issue. you go is that partially related to chatgpt now growing incredibly fast and the fact that you have videos that amazon prime is now showing. you have netflix with an ad supported tier, disney with an ad supported tier is that sucking away the revenue growth that google is seeing. you have to look at the fundamentals and not just apple stock is up, therefore fundamentals must be great. that's what momentum investing is. this is focussing on earnings and what earnings do. >> understood.

>> thanks dan, appreciate you joining us. watching shares of uber and lift today, some of the best intraday reactions in a couple of years up double digits but for different reasons, what investors need to know in a minute. that can treat a migraine when it strikes and prevent migraine attacks. treat and prevent, all in one. don't take if allergic to nurtec. allergic reactions can occur, even days after using. most common side effects were nausea, indigestion, and stomach pain. relief is possible. talk to a doctor about nurtec odt.

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welcome back to "squawk on the street." uber hitting some all time highs lyft with nice gains as well deirdre bosa is tracking both. uber announcing the first ever buy back and the best over for lyft if a few years. >> even at these levels. we'll talk about that in a moment. talk about the dividend and the mature ration of gig economy companies an interesting move from uber because they've reached gap profitability, generating free cash flow to $3.2 billion in 2023 but it's free cash flow margin is about 9% compared to airbnbs which announced a new $6 billion buyback. its average for last year was more than 40%. we should note that free cash flow doesn't take into compensation for uber last year,

that was $1.9 billion. and the operating profit hasn't been strictly fundamental. the core has become profitable. uber holds stakes in several other companies which fluctuate each other and which ieb uber can and has sold off so they may not be in the best position to do a buyback like this but clearly giving the street what it wants and that's worksed out. and they seem to be holding the growth name versus the appeal that has carried it most of the lifetime. as for lyft, the attention was on the enormous typo. beyond that drama this is another gig company focused on generating free cash flow saying it will get there. i didn't mention instacart expanding the buy back as well. >> it is interesting after meta

promised the first dividend. you are seeing a lot of these not just tech companies but companies everybody is talking about buybacks and dividends. >> that's why i looked at free cash margin some are in a better position to do so. but the last few years, years of efficiency, get trim for wall street, companies know what to do, and he knows how to give investors what they want. but look at the free cash flow margin, 9% versus i think it's somewhere around 30%, for meta, 40% for airbnb. uber has now seen consistent profitability, gap profitability, nobody is going to take away from that but there's noise in here as well like stock based compensation and stakes in other companies. >> there's a belief they're going to have a conversion rate to adjusted ebitda going far higher. >> yes. >> i have some bulls that think

9 billion i'm look at here in free cash flow within just a few years. is that doable? is that realistic? free cash flow i should say. >> dara believes it is. and they got here quickly. he was able to turn the core business right sharing pro prof profitable. but i have to mention what's going on in the backdrop as well. there's a strike today, there's the overhanging risk, yes, the financials are looking better but the regulatory landscape is fraught with risk. there's a strike today with uber, lyft and door dash drivers are going to not drive people to the airport. it's a a reminder that the business model doesn't work. based on the labor force they have to remain independent contractors and in the background is the fight to potentially make them employees. >> definitely a risk but what a move today. up more than 11% on the first ever buyback. >> confidence that's what he's

doing instilling a lot of confidence saying the cash flow number is going to jump. >> thank you. why yesterday's hotter than expected inflation data maybe carrying a worst case scenario for the fed. former dallas fed robert kaplan also joins us next. a car is a car... is a spa. an office. hi! hello! a cinema. so automated. yes, the definition of a car changes... but one thing stays the same. it's a mercedes-benz.

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welcome back to "squawk on the street" i'm bertha coombs with your cnbc news update. nato secretary general announced today that european members would invest a combined $380 billion on defense this year. taking spending to the goal of 2% of gdp.

the announcement coming days after former president trump suggested if he were president again the u.s. might not protect allies that did not spend enough. the razor thin gop majority in the house got thinner. nbc news projects former democratic congressman tom suozzi is headed back to congress after he won a special election in new york's third district to replace george santos who was expelled. apparently valentine's day and procrastination go hand in hand. nearly half of spending on flowers, candy and cards happen between february 11th and 14th over the past two years. walmart that sells nearly 40 million red roses for the holiday say half of the sales occur on the 13th and 14th. >> that's not procrastination, that's being practical. you don't want to buy roses too

soon, they would die, and you can't hide it in your sock drawer like a box of jewelry. >> i tend not to wait too long. yesterday's inflation data missed sparking fears the feds have to keep rates higher for longer. our senior economics reporter has thoughts on that. steve? >> reporter: two opposing scenarios out there, carl, they dominate the debate over the hotter than expected inflation report. the one held by a majority of economists it was mostly a blip and inflation resumes the downward trend. here's the outlook here. one time a january price increase is taking effect things like motor vehicle insurance, housing pushed up inflation but will decline. the pce will be cooler february 28th when it comes out in part because it has a lower waiting for housing. austin goolsbee talking about

this morning. he pointed to the difference between housing inflation in the cpi and market indicators showing rents falling. but there is a more worrisome scenario. the easiest disinflation behind behind us. sara talked about that yesterday. the result of supply chain shortages easing and the last mile from 3 to 2 a tougher one that could require a hard landing or more. economic weakening as roger ferguson told us this morning to get the last bits of inflation out. >> the fed may well have to hold rates higher, staying in restricted territory longer and that by definition increases the risk of recession. so yes, my assessment is the risk of recession has gone up moderately. >> reporter: markets reacted to yesterday's report betting on later and fewer cuts.

the year end fund rate rose 30 basis points. the market looking for 100 basis points cut this is year not the 175 it did a month ago. that's three cuts now have been baked out. for now the inflation report introduces risk to the coveted soft landing scenario that's not the base case of economists but you can only encounter it with better inflation desiata. good news is it doesn't contemplate a rate hike if inflation picks up. seems like they're keen on staying pat. >> i'm going to double check you on that, you are correct. no bid at the moment in all of the contracts for rate hikes. i do see the lowest thing i have is only the 9% chance of a rate cut in march. that obviously is way down. 40% in may. and it looks like june is it. but one more bad inflation report, sara, i don't know.

. >> thank you, steve. steve liesman. laid out on the scenarios coming out of yesterday's report. our next guest said a june rate cut is possible but no one should prejudge. robert kaplan joins us now. how how would you, still inside the fed, look at a report like yesterday's. >> my first reaction would be not to overreact to one month. however, i would be on guard and vigilant that we need to see continued improvement in inflation. i don't want to see a resur gens a resurgence and i want two or three months of inflation data. you and i talked about before why i'm on guard is fiscal spending is very stimulative. inflation reduction act projects, infrastructure act projects, unspent arpa money.

so i'd be focused on service sector inflation. i want to see that improve and some evidence it's going to get sustainably better. i'd need to see more information to see that. >> you have been more vocal on this point than anyone i know. it's interesting that the fed. i get they don't want to talk about fiscal policy but has been dis dismissive of the idea the fiscal impulse is boosting the economy and potentially boosting inflation. how does it work? where do you see it show up in the data? >> so there are goods and there's services. one of the things that is helping us on goods disinflation is china being so weak. china's got lots of overcapacity. their economy has been well publicized, is very weak. that helps with goods disinflation globally. the part on services that's trickier is if you have got billions and tens, hundreds of billions of dollars being spent

on new battery plants, infrastructure projects, you still got the unspent arpa money, that's being spent all through the united states and it's -- it creates a bid for not just goods and services but typically workers. so it means in the service sector they're still struggling in my confers to keep workers, having to pay workers more. these projects create a bid away for workers. the other thing you saw yesterday is the housing market. and that's -- it's got its own dynamics in that there's a supply issue in many cities of housing, the labor challenges are part of that. and also, for new home buyers, rates are high, affordability is an issue so they have to rent. and so there's a lot more rent pressure. >> so should they not be thinking about or talking about rate cuts at this point with the economy doing so well and inflation not back down to 2%? >> well, i think where they're

now probably in the right spot. i'd say in december, after the meeting, there was too much optimism. they walked it back. you know, you got to remember, the december sep, summary of economic projections, said three. that might still not be a bad estimate. i just think because of the fiscal stimulus, the starting point may be later than people expected, june is still a possibility. and they may be -- they're certainly going to do fewer i would think than the market was anti anticipating. but the december sep may be in the strike zone possibly. but even on that it's still too soon to say. >> i wonder if they take down the dots in the signal. the next time they put out the sep or dot plot. the market is coming around to the fed but i wonder if we -- look, it's one inflation report but it comes on top of some wage

growth numbers that have been strong. prices paid in the ism. better economic data. it does add up to a picture where fed might need to be patient for longer. >> they might need to be. if you're at the fed we have a dual mandate, full employment and price stability. there's no problem right now with the full employment mandate. that gives me the luxury as a fed decision maker to be more patient and make sure we win the inflation battle. the fear was, gee, unemployment starts inching up and then we have a real tradeoff tension to deal with. as long as the unemployment rate stays relatively low i have the luxury of being patient and i think they'll take that opportunity to be patient. >> it's good to talk through all of it with you rob as someone who's been there. appreciate it. >> good to talk to you. still ahead the latest data raising fresh questions about rate sensitive sectors like real

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welcome back to "squawk on the street." that hotter than expected cpi print yesterday did make some investors rethink perhaps when the fed will cut rates and of course another question where does that leave distressed commercial real estate in terms of upcoming refinances, for example. our next guest said those remain the elephant in the room. joining us is jon kim. great to have you here. our viewers understand there's more to reits and real estate than commercial and office which is a small part but we talk about it a lot for obvious reasons. what are you seeing there? particularly in light of cppi's sale of two jv stakes with boston properties saying we're out of here.

>> yes, that was essentially an ominous sign you have a sophisticated owner looking to reduce their office exposure. it's not a complete surprise but they've been dedicated to the market for a while. the rumblings are there could be others that follow suit and that would not be a positive sign for the market. having said that, going through earning season right now, occupancy held up, leasing activities picked up especially in new york and boston. i would say the news is mixed and it's a fluid situation. >> we had any number of people joining us who seem to be manning or raising distressed funds so to speak to put to work for certain properties they can come in with some equity at least that's required. is that going to stabilize the market? are we there yet in terms of where the money can be deployed and generate a return? >> i think values have been reset, so if you can get equity and other investors in at the lower bar of asset values we can start leasing activity picking

up at a lower rent so you can get a decent return on that. good for the market but painful for existing owners. >> are there reits with large cash positions that can take advantage of the reset? >> in multifamily where there is refinancing, the multifamily rates have good balance sheets. it's more nuanced, boston properties has great balance sheets, more access to joint venture partners. some we like don't have great balance sheets but very sophisticated owners and have capital to other ways, rather than bns sheet. but we like boston properties, empire state, cousins and avalonbay. >> you do have some buys. when the industry is going through a reckoning how do you

determine which to buy? >> it's just the market value of some of these companies and whether we think it's fair. some are trading to massive discounts and the short positions are high. i think the sentiment doesn't match where we think the asset values shake out. >> does it matter if the fed cuts in june or july if we've seen a pronounced move down in market rates? >> as long as the view is interest rates are not going to go up. if it's going to come down, whether or not it's this year or delayed towards the end of the year or next year that's fine we need stabilization in interest rates. >> to be clear when it comes to commercial, particularly office, we haven't put the bottom in yet, have we? >> i would say, it's definitely a bifurcation market. i would say the value could go down, we might start to realize that now some of the activity is going to pick up, some of the debt maturities will be

addressed. i don't think we're at the bottom yet but for top end premium assets i think we've already passed the bottom. >> john good to get your take on the sector, thank you. >> thank you very much. up next shares of robinhood soaring after reporting a surprise profit. deeper dive in robin hood's growth strategy next. and don't miss the ceo of kraft heinz discussing ruts in his first broadcast interview since taking the helmet. and pretty ugly share price reaction, down 5.6%. we'll be right back. ♪ ♪

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kate. >> hey, sarah. yeah, that profit was in part thanks to more crypto trading volume, but they also saw this flood of deposits for the quarter. robinhood has been known for serving in these younger first-time trader, but it's now getting a lot more aggressive in courting more experienced, wealthier clients from traditional brokers like schwab and fidel ty, for example. robinhood saw $4.6 billion in net deposits in that quarter, $3 billion of that came from transfers in from other firms. that continued in january. the company already topping that fourth quarter total for its highest monthly inflows since 2021, the height of the gamestop era, when robinhood saw a lot of growth. they've now got more than $100 billion in assets at this point. the average transfer balance, this is key, was over $100,000. key reason, though, cash bonuses. robinhood is offering a 1% match on transfers, and a 3% match for some ira contributions, as well. bears have argued for a long time, really since the company's ipo, that robinhood wouldn't be

able to serve clients beyond a first-time or active trader that it's been known for, but as bank of america put it, in a note this morning, the momentum signaling that it's not suffering from what it calls graduation risk, and that it's winning larger accounts. they talk about things like retirement accounts as a positive step towards making their revenue and some of the revenue streams less sensitive to overall macro volatility. then you've got jpmorgan this morning, really waiting to see how sustainable these flows are, as some of the promotions expire. others on the street touting cost discipline. you can see that in the share price this morning, helping shares. the average price target, guys, rose about 13% on the back of earnings. we'll ask the ceo of robinhood about all of this. we have an exclusive interview with him at one market coming up at 1:00 p.m. eastern, guys. back over to you. >> kate, how correlated are they with bitcoin at this point? both the price action and trading volumes? >> less so. -- in the beginning, when this company went public, it was very much tied to the price of bitcoin. it's a lot less of a bitcoin

proxy at this point, compared to square or block, for example, that jack dorsey has poured a lot of resources into crypto. it is more tied to high-growth tech, but as they start to look more like a traditional brokage firm, they'll start trading more, the shine has sort of come off of the high-growth tech story with robinhood, and now they're becoming more of a traditional financial institution, but a lot less correlated with crypto, although they did see a big boost from it in the quarter. >> although a fairly young cohort. i always wonder how close they are, in fact, in some ways to draft kings. >> that's right, there's probably -- if you looked at a venn diagram, i think you would see a lot of overlap there, and that's been one of the criticisms. really since the ipo, the graduation risk, that was the only audience they can serve. they are really trying to prove that that is the opposite. they can take market share and serve even a td ameritrade clients. it's interesting, that promotion came in the middle of the td ameritrade integration, so an

opportunistic moment there. they seem to be jumping on there to try to take market share. >> kate, thanks. kate rooney. >> i finally saw "dumb money," by the way, and your cameo was -- >> was i good? >> i thought you should have been nominated for something. >> i worked very hard going into method to play myself. it's not easy. >> i thought it was a good movie. >> a nice review there. we have the markets rebounding a bit from yesterday's sell-off. the nasdaq leading at about a 0.6% climb. many of the names including nvidia powering that index higher. next hour, don't miss activist investor nelson peltz. live market coverage continues after this. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot. fresh, warm hot dogs! when i'm not selling hot dogs, i invest in a fund

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good morning wednesday morning and welcome to "money movers." i'm sara eisen with carl quintanilla live with you from post nine of the new york stock exchange. nelson peltz is with us, just moments away with his latest on the activist fight with disney. >> ceo of kraft heinz on earnings and the state of the consumer, as sales slip. >> later, cme group ceo, terry