let's show you where the ten-year and the two-year sit. 4.197% on the ten-year. make sure you join us tomorrow, folks. >> us. >> "squawk on the street" begins right now. >> us. ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with sara eisen, david faber. cramer has the morning off. ten-year back to 4.2% as some of the data comes in light today, including the biggest retail sales decline in about a year. add to that some lower guidance from cisco, deere, wendy's, and others. our road map begins with stocks and the economy. investors closely watching the data today, including retail sales, claims, manufacturing, ip. plus cisco shares moving lower. the company cutting more than 4,000 jobs and lowering its revenue outlook. and warren buffett's

berkshire hathaway has trimmed that massive position in apple. let's begin with the markets. we mentioned retail sales coming in a bit light. philly fed was a little bit better, but then empire was a miss, and a lot of desk notes today, sara, saying tuesday was a hiccup as we got the two-year basically back to where it was prior to cpi. >> the best news of the economy this morning was jobless claims, which continue to surprise lower. only 212,000 jobless claims filed last week. that was less than expected. it was the least we've seen in about four weeks. continuing claims, those that are continuing to get paid out on jobless claims, that number a little bit elevated. retail sales is the big miss that we should talk about. negative 0.8% on the month. that was worse than expected. i mean, the economists were looking for a decline of 0.3%. some other important numbers here. ex-autos, and we knew auto were going to be weak -- that number

was still negative 0.6%. the most important one is the control group. that feeds directly ginto gdp o the spending side. it was expected to be higher. now, there is -- there are a few caveats here on this retail sales number. it's a noisy number if you read all the economist reactions right now. weather plays a role. holiday spending hangover plays a role. you saw the weather effect, because one of the hardest-hit areas in this report were the materials. building materials down. we know that's weather sensitive when it comes to building. so, yes, it will reduce spending and gdp, david, but i don't think it's something to really worry about in terms of, oh, the consumer's collapsing, because there are some interesting january factors that are usually unusual. we need to see more evidence. >> what's our next big data point coming up as we continue to try to ascertain when and if there's going to be a rate cut at some point? >> next week is going to be a

big one, because we get the pce, which is the fed's preferred gauge, and there's been this narr narrative after cpi this week -- it has been better. doesn't have the owners equivalent rent in there. that's going to be a key metric next week. we still have more data today. minor data. but -- and we have fed speak. we have waller speaking about the u.s. dollar later, which i think is going to be interesting. there will be -- there's a higher bar now for cpi. carl, you mentioned that some of the trading notes are saying, okay, look, they're teeing off the fed comments. a lot of the fed comments post-cpi, and janet yellen, the treasury secretary, have been, don't make too much of one data point. here's what secretary yellen said about it. >> i think it is a tremendous mistake to focus on minor fluctuations in -- and to fail to see the longer term and

bigger trend, and the trend here is that inflation is moving decisively down. >> so, she dismissed it. we've heard other commentary. barr was the latest yesterday, the fed governor who gets a vote at every meeting, that he expects it to be noisy coming down to 2%. they're not really surprised. they're playing it down. but i do think, carl, that the market has this nagging feeling that, especially the super core inflation number, coming in at, you know, 0.7%, which was a big upside surprise, now the market's going to need to see more proof that the fed is really winning the battle against inflation, no matter what the fed members and the treasury secretary says, just to feel a little more comfortable that we're moving into rate cuts. >> yeah. i mean, goolsbee did say yesterday, no need to wait for two to start cutting. big piece in the "ft" today, questioning whether or not economic resilience in the u.s. is as strong as we think. capex plans are coming down. full-time employment is coming down.

there's wage growth is decelerating from atlanta fed. excess savings is drawing down. lot of disinflationary signals from airbnb this week and mcdonald's and pepsi and kraft heinz and taylor morrison. so, we'll see if this micro data does catch up to the macro. >> disinflation has been the theme of earnings season, and that's why it's an interesting week that we got that hotter cpi report, because a lot of companies are talking about lower input prices, and lower pricing power. we talked to kraft heinz about it yesterday. they're talking about normalized pricing environment. meantime, let's turn to the tech sector, the other interesting part of this market. nasdaq 100 futures point to another higher open, off to a pretty strong start this year behind names like nvidia and meta. got a new note out of hsbc breaking down the broader tech rally. "should we prepare for a tech bubble a la 2000? we do not think so. we see opportunities for the

rally to broaden as the fed pivots and economic data stay strong." that hasn't stopped people from overlaying nvidia to cisco back then. lot of analogs. i think it was elaine, of all people, over the weekend saying the difference in this bull market is that it's resting on the most profitable companies in the history of the country. >> and that's a big difference. of course, we went through the dot com boom, and can well recall so many of the companies that absolutely had no business plan, frankly, or at least no way to get to actually free cash flow positive. that is a very different scenario, as you point out right now, because we are talking about the biggest companies, the most profitable companies, and as i point out all the time, numbers that are simply almost hard to imagine in terms of the size of them. nvidia being amongst them, yesterday, its market cap having passed that of alphabet. alphabet has had a more challenging time of late, and nvidia shares have been nothing but straight up for the last couple months.

third most valuable. apple or microsoft and apple still ahead of it, and a good ways to go. it would have to almost double from here if it's going to reach -- not quite, but almost reach where the levels that they are with microsoft still above $3 trillion. you mentioned cisco, and i do -- we can all, perhaps, remember -- well, most of us. sara was a child. when it was a $540 billion or so value back towards the 2000 range. of course, it did, to your point, carl, provide the guts of the internet revolution, so to speak. it was sort of the picks and shovels is a better analogy in the same way that nvidia now is by far the provider of the high-end chips that are needed to power all of the generative a.i. or most of the generative a.i. compute that is going on right now. cisco numbers, though. and we've talked about it. revenue's down. stock is going to be down given guidance was not particularly

strong. >> cutting jobs. about 5%. that's going to be a little over 5, 5,000 employees, and chuck robbins with jim last night talking about where some of the weakness is coming from. >> we saw more caution with our customers this quarter than we saw in the prior quarter, which led to our teams expressing more caution in their forecast. >> he did talk about longer lead times, sara, more scrutiny of customer deals, weakness in telco and service providers. >> on the plus side, they talked about cutting cost in the form of job cuts and a.i. and using their network equipment for nvidia. he talked with jim about the relationship that they have. he was careful to say jensen called me and asked me to use the networking equipment there. they say they have a line of sight for about a billion dollars worth of a.i. networking projects in fiscal year '25. so something to hang your hat

on. >> that's an instructive chart. every so often, there are unique moves in particular industries and stocks that give an investor an opportunity to profit enormously, and it doesn't necessarily mean they're going to be sustained or repeated, and you can see -- i mean, it's never come anywhere near that market value. and the chart, it may also look like it's back towards it. it's nowhere near that in terms of market value. it's less than half what it was at those incredible highs during that run-up in '97, '98, '99 that we talk about so often. again, carl, to that point, is this really representative to a certain extent, this current period, in terms of what we've seen in the accretion of market value to thatperiod. it's hard to say. it doesn't feel nearly as bubblicious. it does appear a.i. mentions have started to come down on some of these conference calls. i don't know how instructive that is or how -- you can really draw any real comparison, any

real lesson from it, but interesting, nonetheless, to note that we had an enormous mention in conference calls a couple of quarters ago of a.i. in many ways, many companies simply sort of making it clear to their investor base, hey, we get it, but you also don't know how much of it was a response to questions about a.i., and perhaps those have calmed down as we now look towards the commercializationof the actual technology and its use in the enterprise. >> it's interesting with because goldman has a -- i wouldn't say competing chart. >> went up, right? >> the proportion of s&p firms mentioning a.i. is at an all-time high in fourth quarter, 36%. it depends on how you slice it. >> i think it has to do with the market's mood and the media's mood. we were talking about -- remember how many mentions there were of ozempic on the food and on health care earnings a few quarters ago. that's come down. >> although we continue to ask about it, because it's still relevant in the same way that generative a.i., even if it's not going to be mentioned quite

as often -- >> for sure, but there was a huge selloff. >> the companies that you follow particularly -- >> medical devices too. now it's taylor swift, as i've been saying. >> does she get mentioned a lot in conference calls? >> she gets mentioned on conference calls more than one would think. remember, i highlighted. >> you did yesterday. i can even go back a day. my memory's that good. >> there you go. good for you. on the cisco job cuts theme, just another example of another company in technology cutting a percentage of its workforce, and i mean, there are no shortage of announcements. twitch, citigroup, blackrock, paypal, ebay, snap. these are all companies that have had announcements, and what's interesting is that layoffs are showing up everywhere except in the jobless claims number. they really have not made it into that weekly number, which we continue to see move lower. >> why is that? >> there's still strong demand out there for labor, even though

companies are refocusing and prioritizing around themes like generative a.i. or preserving profitability at a time of weakened topline growth. there's clearly still demand in the real economy for workers, and there's not a lot of evidence of mass layoffs, so these people are finding jobs, clearly. i mean, at some point, we do expect it to show up in the data. the challenger report, which people look at as a private sector read, has shown higher layoffs, and for the first time last month, mentioned a.i. as a reason for companies getting more productive. we expect to see it. it's a little bit of a -- it's kind of confounding. >> yeah. >> but clearly, people are finding jobs. >> that's true. although the hiring rate, the percentage of total employment that's showing up in new jobs, that has slowed. >> yeah, and you expect that. you know, you expect that to come down a little bit. but overall, the picture of the economy, look, we got uk and

japan both technically in recession overnight. >> surprising on japan in particular. >> it was surprising. >> we've been talking about its economic resurgence so often lately. >> the nikkei went up. and europe's flat, and the u.s. grew more than 3% annualized last quarter, so we're still on top. >> as sara said, not quite done with data for the morning. we'll get industrial production after a short break. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business. as the head of hr,

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♪ ♪ welcome back to "squawk on the street," rick santelli here with another tranche of breaking news. industrial capacity utilization, january numbers for production

we're expecting up 0.2%. the actual number is down 0.1%. a revision in the rear view mirror also weaker from up 0.1% to unchanged. down 0.1% is the lightest month over month change going back to, wow, down 0.1%, we're going to have to go back a ways, to the end of last year. here's an interesting number. capacity utilization. january. expecting the number 78.8. 78.5, which is the weakest level in almost 2.5 years. you have to go back to september of 2021. here's the issue. last month was honored as the worst since '21, but they upgraded it, which makes this month is definitive weak month. utilization levels continue to be on the low side. and something fascinating. the nikkei, the japanese stock market today, closed at 38,157. if you go back to 1989-1990,

that is when the peak -- so, right now, we're at the highest level since january of 1990, but it was december of 1989 where we made their all-time high. we're only about 750 points below that. pay attention there. and "squawk on the street" will return after a short break.

welcome back. natural gas prices continue to drop. that's the lowest level we've seen in more than three years. pippa stevens is tracking it and perhaps can explain to us what is going on here. >> well, bouncing back a little bit, but nat gas is still down 50% in a month, sinking to the lowest level since june 2020 as four key headwinds weigh on prices. the first and most important is the mild winter temperatures that we've seen in the u.s. december was the warmest on record, and apart from a few brief cold snaps, this winter has been moderate, which cuts heating demand and therefore nat gas demand. ebw analytics' eli ruben told me weather driven demand has been "off the charts bearish." inventory roughly 11% above the five-year average. production also remains around record levels, and finally, one of frooept's three lng trains is

currently undergoing repairs, which reduces export demand. in terms of how low can we go, otc global holdings' faulkner telling me $150 is where things really start to hurt. eqt held its earnings conference call yesterday where executives said that while they believe future prices will be higher, the next six to nine months might be a little bumpy. back to you. >> pippa, you mentioned exports and freeport. it's a long time ago that it had that big accident, which i guess it's still sort of recovering from. >> so, this is thanks to an outage after the winter weather in january affected one of their motor trains, and so they said that it will be offline for about a month, but at a time when the market is already very oversupplied, any change in the demand picture and any, you know, reduction in terms of our export capacity is going to hit prices. >> pippa, pretty stunning.

the multidecade lows. we'll keep track of it with your help. that's our pippa stevens today. opening bell coming up in about seven minutes. you can catch us any time, anywhere. just listen to and follow the quk t see oni g bell" podcast.

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we mentioned the reduction of guidance out of cisco today, got similar stories out of wendy's and also deere today is going to up down about 4% as they guide -- they take out the top of the range in terms of full-year guidance on net income. it's the cash flow, sara, that gets a bigger haircut for the full year by about a billion dollars. pretty interesting. also the story has been lower volumes, and we saw that in the quarter. trying tooffset it with higher prices but not enough. they saw lower shipment by volumes in allthree of their units, production and precision, equipment, small agriculture and terf -- turf business. the stock prices have come down and this is a stock and business that largely reflects and follows that. it's a sign that, you know, on the plus side, inflation is

coming down, but also raises question about demand because deere's always kind of an economic bellwether. >> we take pains every time they reduce guidance, david, to say deere guides conservatively and has for decades. pretty conservative. >> you covered this company once. >> yeah, back in the day. >> what was the day, carl? >> that would have been early '90s. early to mid '90s. >> i can remember that time. >> that's why i defer to carl. maybe 30 years ago, but i still defer to carl on deere. and comparing it to cat is or is not necessarily an apt -- >> deere's ag exposure is so much broader than cat, which is mostly in construction. but you know, given that they do have some construction and forestry exposure, and we're in an area where there's a lot of federal money pouring into especially manufacturing construction, it is a little surprising. >> the other name that i am keeping an eye on this morning is stellantis, which we don't talk about that often, of

course, but owner of chrysler and any number of other brands. it's the return of cash to a certain extent. they increased their dividend, 16%, but more importantly, perhaps, being embraced by shareholders, you can see the stock is going to be up over 4%. three billion euro open market share buyback program announced. revenues were up 6% compared to a year ageno. significant free cash flow of 12.9 billion euros. that was up 19%. so, at least -- we'll talk more about autos in a bit, but being embraced by shareholders this morning. >> lot of buyback announcements lately. feels like that's -- i know we have to wait until dave kostin comes on to find out how much it's potentially lifting the market, but it does feel like it's very en vogue right now to announce buybacks. >> that 1% -- isn't there a 1% tax on buybacks? that hasn't stopped any of these

companies from -- >> and goldman's done a nice job of charting the trajectory of capex budgets falling while buyback budgets are rising. is that a signal that companies are just too cautious to invest in growth right now? is that a -- is it a possibility that that's going to turn and once they feel more confident about the economy? >> or that they're signaling to investors that they feel confident in their cash positions and in their ability to generate profit in an, again, an environment where topline has come down a little. meta, i think, is a classic example of the year of efficiency. they did it. the market rewarded it. and then they announced the cash return for the first time in the history, and i think others are following that. >> uber is a similar story, right, with capital returns there. lot of positive notes about uber. >> "journal" had a good piece about uber and lyft. a lot of people touched on whether they could -- >> right, and i mean, uber, far,

far more than lyft. uber is going to potentially generate $9 billion in free cash flow by 2026, according to what the company says. lyft is just turning it around. maybe. >> let's get the opening bell here and the cnbc realtime exchange. at the big board, square capital. at the nasdaq, immunotherapy biotech tevogen bio. we're back to 5,000 on the s&p. dow with some milder gains, up about six. interesting story regarding a dow component, and that's boeing. through the lens of airbus today, with pretty decent results for the year, some cautious delivery guidance, but guys, i was looking at a five-year of airbus versus boeing, and it's pretty remarkable. boeing basically half the price it was five years ago, and airbus with quite a bit of appreciation. big piece today about airbus extending their lead. >> yeah.

yeah. that was reflected in the results. i'm just looking at the week to date chart on the s&p. we're still down for the week after that huge selloff we saw on tuesday, by the way, from the cpi report. we've clawed a lot of it back, but i think that the technical analysts made the point that the strength we saw yesterday in the comeback was not as broad as the weakness we saw on tuesday. it does still leave some questions and concerns about rising bond yields, sticky inflation, and whether the fed is going to be able to cut rates sooner rather than later. can you hear? it's very loud in here today. >> yes, it's a loud time. >> guys, wendy's is interesting. we mentioned that third bit of lowered guidance today, 21 cents is a miss. comps miss. in fact, if you look at the comps at wendy's, less than 1% versus 4% at mcdonald's and

6-plus at burger king. has a lot of people wondering what's happening to, at least, the core business at wendy's. they're going to make some investments in digital order boards and perhaps some a.i. and some suggestive selling, but this is a bit of a turnaround story, stock's down about 4%. >> baconator not so hot in this environment, although they did say they're going to continue to invest in breakfast, and in the press release, they say they significantly celebrated their digital sales. expanded the margin to pre-covid levels, despite the inflationary headwinds, but stock's down. it's down 16% over the last 12 months and has underperformed. >> shake shack is a very different story if we're going to stay in this area. that stock is up almost 20% as you can see there after reports of revenues that were up 20%. and same shack sales, as they like to say, were up 2.8%.

it's that same store sales, essentially. systemwide as well, up 21.4% versus 2022. so, generally, a positive report from shake shack being responded to as you can see quite positively as well. adjusted ebitda -- i like to look what the adjustments are, but adjusted ebitda, $131.8 million. you can see shack shares recovering over the last, let's call it, since last year or so. again, we're talking about roughly $4 billion market value at this point. bit different than apple, which has a $2.8 trillion market value. we haven't really gotten to buffett's moves this morning. they trimmed, that is, berkshire hathaway -- we got the -- most of the positions there. occasionally, there's things that are omitted by buffett. he's allowed to do that because he's either building a position in something or any number of other reasons. but they did trim it.

it was a 1% trim, as you might expect, given the enormity of the position itself. >> 167. >> yeah, $167 billion position. obviously, percentage-wise, of apple's market cap, it is quite small, but it is still enormous, and you might anticipate a bit of a trend there. but it's been a great performer since they took the position. perhaps not quite as strong as some of the other names that might have been available but nonetheless far outpacing the s&p's performance. >> he also lightened up on paramount. that stock is under pressure a little bit today. >> that's always been a curious position. there were those who pointed to do you have's and/or berkshire's ownership of paramount as a positive when they talk about the possibility of it being sold, wondering, is there something he knew? they still, i think, about a third of the shares they sold. 30 million shares. again, a rounding error. truly, a rounding error for

berkshire in terms of the actual dollar amount, but it does go to this, you know, we've talked about it, this continued talk, consolidation around paramount specifically. i'll give you updates as we go along if i have anything significant to report. i can tell you right now the name that continues to come to the fore is redbird in partnership with david ellison, who owns sky dance, as a possibility there. buying the control position, namely control at national amusements so basically paying a premium or buying national amusements but not the common shares of paramount itself. those talks continue. to merge skydance into the studio, the paramount studio, you would need a special committee, and that would be part of any deal they would undertake, so it does become somewhat problematic. can you get a special committee vote from the board of directors if you're not offering anything for the common shareholders, who they represent?

otherwise, you know, our parent company's not doing it, as i said previously. i don't believe warner bros. discovery, even though they may have engaged, is interested in doing it. we may hear something from warner bros. discovery when it reports earnings late next week on that topic. we'll see. bankers out there trying desperately to find another buyer for the whole company. our parent company is down in part because of a downgrade today. you can see that. and talking to paramount gets me to disney, gets me to trian, your interview yesterday, sara, with nelson peltz. >> what'd you think of that? >> he was saying many of the same things he has. i thought it was interesting when he dismissed the possibility of losing the proxy fight. they sold stock from the third quarter to the fourth quarter. not a lot. but remember, this is that unusual position that trian holds where really $25.5 million of the position is ike

perlmutter's stock. they're obviously voting it. they're controlling it, but that was sort of contributed into the so-called spv, and they went from 7.3 million shares to 6.7 million shares. it's odd to see a company and/or an investment manager sell stock during a proxy fight, even if it's only 700,000 shares. it's still odd. that's 700,000 votes. >> i don't think it means he's backing off. clearly, that was not the message that we got from him. >> they were not great sales either, though, because the stock is up nicely thisyear. this took place in the fourth quarter of last year where it was nowhere near its -- it was in the 90s. >> which is part of his case, of course. >> yeah, but he sold 700,000 shares. like, why? why would you do that if you're in a proxy fight? >> i don't know. 13-f is a little stale too. we'll find out. we'll ask. >> it's stale, but it's not -- it's telling us he sold stock. he was in the proxy fight. he sold stock. >> but the question of, what does it mean for the proxy fight? that's still on. it's april 3rd.

>> absolutely. i just -- again, it's -- it is rare following these things to see that. unless they have redemptions that they had to sell some stock for. >> could be. >> unclear. obviously, he made his case with you yesterday. >> the market embraced and was enthusiastic about the earnings report from disney last week, the targets they set out, the moves they made, the $1.5 billion in epic gaming, the taylor swift "eras," and here's nelson peltz of trian's reaction to everything that was announced. >> it's not that i'm not satisfied. you know, this company sells at a multiple of their pronouncements, you know, a very high multiple. they made these announcements like this management team just came into office about a week and a half ago. they have been here for 20 years. all of a sudden, they've awakened and they want to start

making all these announcements? >> he had a cartoon that was good in the latest fight letter about the -- what the board table and the spaghetti at the wall. >> spaghetti up against the wall, yeah. >> he raises this issue that they were election announcements and not state of the union announcements, when it comes to strategic vision of disney and how they're going to think about existential ideas like the world of streaming. he looks at -- >> still waiting for them to put out a significant white paper the way that trian has so often in the past when they've really dug deep on these things. there's been nothing. >> i asked him about it. he said it's coming in a few weeks. i think they probably want to keep them on their toes. >> two weeks? this thing's close -- i mean, they're meeting with iss. that's all happening. we talked about this a lot. it does take an awful lot of time. bob iger is going to be spending a lot of time with shareholders and iss. it's a distraction, to say the

least, for ceos and management teams when you have an activist like this and a proxy fight coming up, about a month and a half from now. >> which way is it going go? >> it's hard to say right now. it's not clear to me that he's getting any traction. obviously, nelson says otherwise. >> between the pandemic, between the phenomenon that was netflix with a ten-year head start and then the strike, you're dealing with operational challenges that, i don't know, industrywide might be unprecedented. guys, keep an eye on ford today. interesting comments from the ceo about evs. big piece on the tape about chinese demand and the c.o.o. of ford's ev unit basically saying these guys have a huge competitive advantage, and we've got to get religion on cost if we're going to survive as a -- as a competitive threat in the ev business. they do, though, say, david, leaving open the possibility of working with another ev maker, which is interesting. >> that is interesting. i thought it was, overall,

again, some of the quotes you've highlighted on x as well, carl, were interesting. we talked about the ascendance of byd, the largest maker of evs now in the world, obviously not selling in our market, but selling significantly in other parts of the world, not just domestically in china but in europe as well. also an interesting piece from jonas as well, carl. i know you read him. talking about how intertwined the supply chains are when it comes to ev here in the u.s. and without china, you really are nowhere. certainly when it comes to batteries, for example. you can have western evs without china, says adam jonas, the analyst at morgan stanley. western car companies have come to realize that mass ev adoption in china are inextricably linked. and you know, we do have a presidential election coming up, not that far from now, and i am starting to hear questions from some of the asset allocators i

speak to about, well, how do we think about it if donald trump were to return to the white house? certainly, this is one key area given he's talking about 60% tariffs immediately. that would probably collapse all supply chains and would have a significant impact on evs. >> interesting. i read the other day, sara, that amlo may be the first mexican president to leave with the peso higher than when he got there. >> i don't know. that's a good statistic. look, money's been pouring in to mexico. we've talked about it. as it has in india and other places. the china -- anywhere by china trade benefitting from a near-shoring and friend-shoring perspective. also, they get benefits under the trade agreement that we have with mexico and canada. i wanted to hit technology. we can't go through this without hitting nvidia, which is a little bit lower today, but tsmc, taiwan semiconductor, hit an all-time high overnight. remember, it had been closed for the holiday over there and the analyst notes continue to pour in around nvidia, the latest, of

course, d.a. davidson, they say that they analyzed -- the newness here was they analyzed comments from google and amazon, the biggest customers of nvidia. microsoft as well. all of them communicated plans to significantly increase their investment in a.i. infrastructure this year, which obviously bodes well. this is a company, nvidia, that reports next wednesday. some people think it's going to be more important for the market than the cpi report. hard to believe that. but it's clearly something we're all watching now, and there's tsmc, which gets benefit of it as well, and it had a big move overnight. >> we haven't mentioned super micro, which is technically a russell name. this stock has gone from $300 to $900 in a month, and today, david, this initiation out of b of a with a buy, $1,040, but ssci gets a ton of chatter right now given the backdrop that nvidia provides. >> wow. i wasn't informed. >> yeah.

>> yeah, almost $53 billion market value. you can see up almost 1,000% in one year. speaking of tech, guys, and big tech in particular, meta shares are really the only, well, of the -- sort of the big five that i keep an eye on, apple, meta, alphabet, amazon, and microsoft, meta is the only one up. hock tan joining the board of meta. hock tan, of course, well known as broadcom's president and ceo. and a member of that company's board of directors as well for a long time, as you might imagine. he joins, along with john arnold, kind of the name from the pagst. remember the old -- huge trader is what i remember him as. of course, centaurus energy, commodity hedge fund he founded after being at enron for many years. but the two of them joining that board to sort of round things out there. but hock tan, particularly, interesting addition. >> considering the focus on a.i.

semiconductors -- just another bullish statement, i would say, by meta, in terms of pivoting towards a.i., and something he's talked about on the call, but adding more. >> we showed the zuckerberg review of the vision pro yesterday. verge had a piece out in the afternoon about people returning their vision pros. you get two weeks. because of eyestrain, motion sickness, including one of their own product managers, who complained that just eye burn, redness. he's, like, i'm a fan. it's a magical experience, but i'm going to wait for the next generation. too painful to wear. >> you wear it. >> all based on anecdotal reporting. >> i remember when we talked to joanna stern of "the wall street journal." she wore it for 24 hours straight. she was feeling -- >> she got through it. >> that's probably not how you're supposed to use it, though. what i hear from everyone is, planes. it's a game-changer on planes. if you can have wi-fi and a good battery charge, then you can do your work privately and watch

those movie theater movies. it's interesting to see the analysts sort of change their tune about this and whether it gets factored in materially to apple earnings. tony told us he didn't think it was going to be material. dan ives thinks it's a huge boon. >> he's at 600,000 shipments, that's his forecast for the year. >> i did note we had dan niles on yesterday during our 10:00, short apple and alphabet. shares of alphabet, by the way, are getting beat up a little bit this morning, down 3.4%. guys, i don't know of any particular -- >> is it about this openai? >> there is a report. openai was going head-on against google. >> web search product powered by bing and take one more notch out of google's search dominance. that's the thought. >> and that has been -- listen, we have been talking about that as a possibility for quite some time in terms of what has been the lock that alphabet has on search and whether that would start to loosen as a result of the new offerings that will be available over time in a different way, perhaps, that

will take you in a more -- for search as well. but do it in a very different way as a result of generative a.i. it's got to be a risk. it is one that obviously is being calculated by shareholders, and it's one reason why alphabet shares are flat more or less for the year, up some 0.8% as opposed to the likes of nvidia, up 47%. >> before we go to break, let's watch bonds as well. yields, mostly lower. maybe the event of the day is going to be waller, 1:15, who's considered by many to have set the tone on a potential rate cut path. we'll see what he says, and then bostic later tonight at 7:00 p.m. eastern. back in a minute. to build the electric vehicle of the future, you need partners. mining partners. technology partners. education. supply chain. energy. what if one partner could do it all? that partner is ontario, canada.

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representing mcdonald's franchisee is speaking out. kate rodgers is here with the details. >> good morning. mcdonald's franchisee advocates speaking out on plans to make mcdonald's a destination for discounts. they are worried the company's actions could hit their bottom line. cnbc obtained a copy of a letter from the national owners association, an independent advocacy group of franchisees. it cheers the success in 2023 but warns momentum could be challenging writing, quote, since 2020, although sales and cash flow have continue to build, 2023 year-end cash flow trailed the cpi by $24,000 per restaurant. in addition, it suggests what it sees as the solution to being a value destination for consumers responding to a discussion that played out in the company's earnings call last week as ceo chris kem chen ski said lower income consumers were pulling back. this is not a new or unique message.

value has always been at our brand's core. value should not be discounting our core and iconic menu items. the group points to opportunities like bringing back snack wraps and testing out affordable beverages at the new mcdonald's cosmic's location in texas. mcdonald's said affordable brands are core and impressive returns with cash flow up 50% since 2018 and even when accounting for inflation it says 2023 was one of the highest franchisee cash flow years in the history of mcdonald's. it sees the end goal, of course, is the same, but the path to getting there is different on both ends. >> who sets the pricing for restaurants? >> great question. the company uses third-party consult nltss that talk with franchisees about pricing. franchisees set pricing at the local level. if it's coming from the top that value needs to be a priority here, how that plays out remains to be seen. once again, they have consultants work with t

franchisees. 95% operated by franchisees. >> not a corporate kind of thing. >> thank you. busy day for eco adult. m -- data. more coming up after the break. don't go anywhere.

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good thursday 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. the s&p 500 is up just a little bit, continuing to rebound from tuesday's big selloff. we're still down on the week, by the way, about 0.4%. nasdaq and nasdaq 100 are under pressure today. nasdaq is down 0.3%. why? well, nvidia is down, apple, microsoft, alphabet, amazon, some of the biggest weights.

cisco is lowerafter lowering its forecast announcing job cuts. we'll talk about that. tesla bucking the trend higher in the action right now. a number of earnings movers, cbre commercial real estate company up 8% at the top of the s&p 500. the bond market, we've had a lot of economic data. better jobless claims. add it up and there's buying. reversal of what we saw on tuesday post hot cpi. 10-year yield 4.21%. 30 minutes into the trading session, movers we're watching, cisco systems shares down, guidance for the full-year falling well short of system for the year. the company planning to cut 5% of its workforce, just over 4200 jobs. two consumer related names in different directions. shake shack up 20% on a beat. yeti plunging 10% after the company's earnings and guidance fell short of estimates.

shares of paying paramount, berkshire sold about a third of its stake in paramount. stock down 2%. >> more data crossing the tape. let's get to rick santelli. hey, rick. >> hi, carl. indeed, business inventories for the month of december, expected to be up 0.4%. come in as expected spot on. up 0.4%. what's interesting about this business inventories number is that we now are at the best inventories going back to when was the last time we were up 0.4%. we have to go all the way to august of '22 to find a higher inventory build than that. we had one other up 0.4% exactly that in august of last year. why is this important? because inventories boosting potential gdp figures for the fourth quarter. now, national association of home builders housing sentiment index for february hitting the wires at 48. 48. it is definitely better than

expected. since it's under 50 builders confidence is positive. this is the best number going all the way back 48, you have to go back to the last time it was at 50, which is august of '23 to find a number above 50, that would be july of '23 when it was 56. so this is a nice jump, but still, in negative sentiment territory. interest rates aren't much different. right now, it's at 4.21 for 10s before all the data hit. it has been a wash. looking at equities you can see they're, obviously, outside of the nasdaq looking pretty positive at the moment. sara, back to you. >> all right. especially rate sensitive ones like the office reits are up and the real estate services on the relief on the rate side. thank you. rick santelli. just adding to the data narrative that we have today. retail sales is a big one that catches your attention because it was a miss.

down 0.8% for the month. but it was january and january has weather and january has holiday spending hangover. if you break it down by categories, what you can do, and this number is not inflation adjusted, so that also skews the number every month. building materials down 4.1% on the month. that's weather. you also saw kind of flat in general merchandise spending. on-line sales down for the month. electronic store sales were down for the month. furniture had a nice pop for a change. i think we these to get a few more data points on the consumer to really worry for any cause for concern when it comes to the retail sales numbers. it will subtract from the consumption around gdp because the control group, which feeds into the gdp, was lower and that was unexpected. that is something to watch. jobless claims continue to point to a picture of a strong labor market, which ultimately should bode well for the consumer. there's continuing claims. those that are still on claims,

that's trending a little bit higher. jobless claims down to 212 for the month on a month, carl, where there were a lot of layoffs, beyond just silicon valley, we saw it at other big companies like a ups, cisco the latest announcement today, and i love this chart from pantheon which showed that google search data on layoffs is sharply higher. that usually is a leading indicator for jobless claims. it hasn't really been and continues to not be, but they're looking at real-time indications given all the announcements. it's not surprising to see that google searches are up. >> that's interesting. pantheon said a moment ago about retail sales, remarkably down beat with a unexpected plunge, downward revisions, are consumers starting to tire? >> we know consumers are starting to tire. we see it in dlinsy data the consumer has held in better than we thought it would given

the higher interest rates and a lot better than the rest of the world. we mentioned earlier the numbers out of the uk and japan, showing negative growth two quarters in a row. technically that's a recession. if you look at what we got from around the world, 3.3% growth in the u.s., eurozone is flat and negative in the uk and joapan, which continues to be in part the american consumer. we got a lot of stimulus in this country relative to some of the other countries. that's the story. that's been a key narrative for the market as well. >> germany not doing well. you see the eurozone, they are also revising their expectations for this year and next or at least -- >> revising lower. >> lower. the expectations being revised lower. >> that is expected to happen. people are expecting look, it's more tied to china i think on the export side, though it's a little bit weaker. germany is a manufacturing powerhouse. with the japanese data, germany

becomes the third biggest economy in the world. japan slipped to number four. even though the nikkei rallied on hopes march is supposed to a time where the bank of japan will tighten monetary policy and get out of their negative rate policy. they won't have to do much more. they can keep conditions easy because the economy is hurting. just some other central bank speak to get to on all of this, we heard from bar, the fed governor, on inflation which we continue to process all the reaction to the hotter inflation read. on tuesday, january's report is a reminder that the path back to 2% inflation may be a bumpy one. they're kind of dismissing it as any kind of game changer and could pivot from rate hikes into rate cuts. laggard is also of the ecb, the president, also in the we need to see more evidence camp, echoing powell here. the latest data on europe confirms the ongoing digs flation process is expected to bring us down gradually over

2024. she's buying into the fact that the disinflation trend is real, but they need to see more evidence. that's where central bankers are right now and where the market is right now after the cpi report. we want to see more evidence. tomorrow you asked me for more data points. ppi is tomorrow. wholesale inflation, it's been a leertds. it's shown a very disinflation and almost deflationary trend in many components. that will be key. and then pce is the week after next on the 29th and that's the fed's preferred measure that doesn't have as much of a shelter kind of skew. >> right. jpm said the spread between cpi and pce is disturbing to the fed in and of itself and they said don't take too much heart in a more dovish picture drawn by pce. >> p has a 2 handle in front of it. there's a full point difference with core cpi at 3.9%. >> market is trying to regain momentum. our next guest helps run over $86 billion in assets building a

defensive buy in his firm's equity exposure, joining us is chief investment officer josh emanuel, wilshire has $86 billion, $1.2 trillion in assets under advertisement. >> thank you. >> you are migrating your allocation out of equities into bonds. >> we are gradually. well, if you look at valuations where they are today, u.s. equity valuations at roughly 20 times earnings, that's almost 10% of over long-term average in terms of valuation. 20 times the multiple of the long-term average over ten years and 16 times over 15 years. i think investors need to be aware of optimism priced into markets which contrasts with what we saw at the beginning of 2023. early 2023, many investors were bearish sentiment was negative, and that's an environment where you have the risk that things surprise to the upside. we think in this environment, when you look at the sentiment

survey, when you look at the valuations today, a lot of the optimism around the fed cutting rates, we have concerns that perhaps things have gone a little too far here. we're moderating some of the equity risks in portfolios. we find bonds to be attractive from a valuation perspective here. so just gradually starting to pair back risks. we think this is the right opportunity for inventostigatoro think about diversification. >> post-lehman highs, we keep hearing about sideline cash that would come to the rescue one day. is there anything wrong with that thought? >> no. you know, i think when you look at money market assets a lot of people look at money market assets, there's been a lot that has moved into money markets out of bank accounts. you've had a flow into money markets because cash rates are high that you can get into a money market versus deposit rate you can get. there's risk there's cash on the sidelines that comes back in,

but if you look at portfolios today, equity versus fixed income, incorporating that bond allocation that captures some cash, i think what you more likely would see is investors moving out of the front end of the curve or cash or money markets out in duration, taking a little bit more interest rate in this environment where i think on balance, if you look at where the 10-year treasury is today, 4.2, 4.25%, pretty attractive yield relative to where we were several years ago. >> so i guess my question is, is the big risk now that inflation remains sticky and that the fed isn't able to cut rates and how big of a concern is that after tuesday? because fed doesn't sound concerned about it. >> i think there is definitely in our opinion too much optimisms or dovishness that's priced into interest rate

expectations today. if you look at the inflation data, core inflation is still running at 3.9% year on year. if you look at a three-month moving average of core inflation it's still above 3.5%. so if you look at the most recent inflation print we had an upside in the coreand headline number and to your points a big part of that was shelter, owner equivalent rents, it's hard to see any path towards weakness in the real estate market nor rent at this point in time. the risk here is that the economic data continues to surprise to the upside. we've had non-farm payroll surprise to the upside two months in a row, we had strong gdp data. the consumer is in pretty good health. there's been a lot of discussion about delinquencies, but if you look at household debt ratios the biggest part of consumer debt service is mortgages and most consumers are sitting on low mortgage rates. you have the capacity to borrow. that powers the consumer and

that i think is the big risk here, if growth is surprising to the upside, if unemployment or the employment market is doing better than expected, sism data indicates business conditions are improving, this is a healthy economy and despite the retail sales data this morning, if you look underneath the data what you saw is spending at restaurants and bars was a pretty healthy number, which really captures what's going on in services. while perhaps consumers are pulling back on demand for goods or things because we just came out of a holiday season, looks like they're spending on services. >> all of which would point to the fact that perhaps rates are not going to come down as quickly as many anticipate. i am curious on your equity valuation and call to perhaps pair back a bit on exposure there, what would it take in terms of a fall in rates for you to revisit that? >> that's an interesting question. so, you know, the important point here is, the historical

valuation, you know, stocks today are expensive relative to historical valuations in light of the fact that interest rates are elevated, which would imply that markets should trade at a lower multiple. the way to think about it is, for every 1% move in the 10-year treasury that makes equities about 10% cheaper. you can kind of see that reaction function in markets. we moved from 5% to 4% on the 10-year and you had the response in equities that came with a lot of optimism. i think we would need to see the fed start to move before we would really feel like there is more of an all clear here in terms of the path forward with equities. i think you'll continue to see resistance here for equities until you get that all clear. if you look at what markets are pricing in today it doesn't look like that cut is coming until the summer and we still have -- >> if economic growth tons surprise to the upside you expect it to do, that bodes well for earnings growth and revisions and that helps equities. >> it's a great point.

what's already priced in? we're talking about a forward earnings multiple that implies about 11% earnings growth in 2024, and over the next two years if you look one year ahead into 2025, you have $275 priced into the s&p. 25% earnings growth over the next two years. i don't mean to sound bearish -- >> it's okay. >> we're not arguing that, you know, pull away from equities too much here, but the point is, there's already a lot of earnings optimism and economic growth optimism priced into the market here, and in environments like this it's prudent for investors to think about diversification and adding to their portfolio, particularly with yields at these levels. >> josh, great to have you and thanks for the time and kicking off the hour. >> we've got some fresh news out of meta that was moments ago. let's get to julia boorstin for those details. >> hey, meta's rolling out ways for businesses that advertise through boosted posts on facebook and lewis hamilton

avoid a 30% apple service charge. meta directing those advertisers to go to instagram.com and facebook.com to pay for the promotions. now this all dates back to october 2022 when apple announced that boosted posts on social media platforms would be considered an in app purchase and would qualify for apple's 30% in app service fee. now ahead of that required fee, that launches later this month, meta is complying with the requirements and at the same time directing small businesses to alternative ways to pay and avoid that fee. now this is all part of an ongoing conflict between apple and meta, a conflict which heated up after apple made it harder for meta to target ads on apple devices and this conflict, of course, continues now with these two companies rivalry over vr headsets. back over to you. >> okay. thank you. julia boorstin. as we head to break, our road map for the rest of the hour.

nvidia's market cap topping alphabet to become the third biggest company. where they're putting their money specifically. >> financials moving higher getting close to what would be new 52-week highs. we'll take a look at that group amid the prospect of higher rates for longer. >> a number of headlines in the auto space. ford warning of a colossal threat in evs. big show still ahead. "squawk on the see iba teth.strt"s ck 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 curated to fit your unique goals, you can spend less time searching and more time learning. trade brilliantly with schwab. you got this. let's go. gobble gobble. i've seen bigger legs on a turkey!

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welcome back to "squawk on the street." new clues on what top investors and hedge funds are doing. leslie picker has been tracking all of this over the past 24 hours. >> always seems to be a lot of tech action and fourth quarter in particular we saw what appears to be some profit taking in some of the magnificent seven names during that quarter. microsoft's stakes getting reduced in portfolios from code 2 to d 1, viking sold out of a nearly $1 billion stake in microsoft and those shares surged 19% during the quarter. viking decreasing holds in meta. meta was up 18% during the quarter. code 2 and tiger global decreasing nvidia, d 1 dissolved the stake completely during the quarter. amazon was a mixed bag with code 2 cutting their holdings, apple and d 1 and tiger added. amazon up nearly 20% in q4. interestingly, alphabet, which was up 7% during that time

period was somewhat of a mixed bag in terms of hedge fund moves there. tesla, the laggard of the group during that time period, got a small boost from code 2 which increased its stake. berkshire hathaway sold 10 million shares of apple, that's just 1% of the firm's ownership, worth roughly $174 billion at year end. now these, of course, are snapshots from the end of 2023. they may have changed in the six weeks since then, but those who remained in names like nvidia and amazon, microsoft and alphabet, likely continued to see gains from there year to date while apple and tesla holders may be a bit more disappointed. tesla doing decently today. >> code 2 or tiger or d 1, i don't think think too much about their public holdings as private holdings which we don't talk about often. what do we know about things

being marked in the all-important private markets, particularly for firms that have spent so much capital in terms of buying those stakes? >> oftentimes those private holdings are marked relative to what their public performing peers are doing. we did see rebound in performance. tiger global up 29% in 2023 through that year. and so a lot of that has to do with just, you know, how tech performed. tech rebound, if you're a hedge fund more exposed to tech, both your public and private holdings are going to rebound as well. the challenge, as you know, david, is that the ipo market has been essentially closed for venture backed companies, as have a lot of private to private sales. i hear all the time that things are picking up in that world, but that affects things as well. because you can mark things relative to what their public peers are doing, that's one thing,in terms of distributions, to the lps that gets more complicated when the venue to exit those positions is essentially closed.

>> thank you. leslie picker with the run down. our next guest helps manage about $15 billion and has nvidia as one of her top holdings. joining us at post nine is the portfolio manager at alger, her firm has $22 billion in assets under management. welcome. so you have -- i mean you have microsoft, nvidia, meta, alphabet, where are we in this mega cycle related to ai, as it relates to the stock price performance? >> yeah. i think we're very early on, and that is reflected in terms of the stock price performance that the stocks have moved a lot, especially as you look at them over the last two years, maybe year and a half. however, i think what people keep forgetting is that the stocks have moved in like coincidentally with the numbers moving up. i looked this up this morning. in january of '23, the 24 estimates for nvidia were $4 on

the street. today, they're 21 or $22 with whispers, like ebs put out a number for 28. that's a seven-fold increase in the earnings for an nvidia. and that is what happens when you're so early on in a cycle, which drives not only the performance of the stock, but the performance of the earnings, but also the multiple. >> and that sort of gets around one of the central questions around nvidia which is at what point do earnings level off or revert to a trend? how many quarters away are we from that and how can we tell? >> that's the 1.5 trillion dollar question, and it's difficult to know in part because this ai world is so -- it's just burgeoning. we are just starting. i mean, you know, baseball analysis, we are still in the locker room. we haven't started the game. we are so early on in ai, that

it's unclear as to where it tops, if you believe lisa su. lisa su said that $400 billion for all accelerated compute in 2027. you know, that might be $300 billion, but that's three fold bigger than it is today. >> there's been a budding conversation this week about the potential for deflation in gpus, right, the way we solve bandwidth constraints in the early 2000s and i wonder if that's forced you to take a second look at your model over the long term, not that it's going to happen any time soon, but technology tends to invite competition and price declines. >> for sure. i think if you look at the compute, the history of compute, is that you get more for less in terms of price per performance. so you get more compute capability, and you pay less for it on a per compute basis.

that's what we're going to see. so, you know, i don't expect to see a lot of deflation in the pricing because, for example, b-100 the next version of the nvidia chip, is going to come out some time in the second half of this year. highly likely it will be priced at a 50% increase to the h-100 wisc which is their current generation chip, in part because it's offering something 2x to performance. long term, could there be different workloads that go on to acics that are cheaper? sure. the market is not going to be a winner takes all, but it could be a market where winner takes a majority. >> right. >> if you have a portfolio like this, which is really a lot of mega cap tech, do you have to hedge yourself at all from the risk of higher rates basically? we saw tuesday what a hot cpi can do in that backup and we've seen in the past few years, what those rates can do to these big

tech stocks? >> if you look at what happened through 2023, as rates increased over time, as rates increased over time, these stocks actually did beautifully. and in part it was because it was the realization that they were going to be driving the next ai cycle. they were in a pole position. that trumped the rates, not to mention, the valuations are not stretched. we worry about rates more so for the very, very long duration stocks that have no earnings today. these companies are cash flow generators. they could be banks, really. to some extent, you know, do we worry about rates? of course we worry about rates and the impact on multiples. nvidia, three months ago, was trading at a 20 multiple on numbers that were too low, and today it trades at a 30 multiple on newly revised street numbers.

but, you know, it's not an egregious multiple for a company like nvidia. >> the funds you oversee have had strong performances, as you might expect, given what they're composed of. alphabet is one of your top holdings in one of them and do you think their competitive position is going to be, you know, at risk at all, given the advances we've seen in generative ai products from competitors? >> i do. alphabet, we are very under weight google in our funds in terms of the long bench we compete against, and yes, i think google is in a very, very different spot today than they were a decade ago. you know, it's classic of a market and a company that went through a mat turization prose process and now a saturated product with digital advertising

and google has to figure out how they will pivot to the new world because their core market of search does feel that as -- it's at existential risk. as ai becomes more prevalent, just last night, openai announced, you know, the efforts they're making with microsoft and bing on a new kind of search, you know, this is a perplex ai. i use it daily. >> you do? >> yeah. >> what do you think of it? >> i think it's fantastic. look, it's not for everything. it's not for finding a dresser. but it is for any kind of question or informational search. it came out of nowhere. so we will start to change the way we search and google has to figure out how to pivot with that. we call it life cycle change for a company where the business has to pivot and we haven't seen

google pivot yet. we actually see them kind of existential risk of their core business. >> i'm curious you own it at all given what you just said. >> yeah. i think it's also -- i think the counter to that, what is baked in? if you look at the multiple for google. it is not stretched. they're cash flow generating machine and there are many things they can do to increase. they have the year of optimization we saw from meta that takes their earnings power from x to x plus 30%. there's an option value in the stock. it's not a bad company. we're just waiting for them to pivot. >> year of efficiency they've yet to have. >> thank you very much. good to have you here. >> meantime industrials hitting fresh highs. not deere, down about 4.5 on the guidance cut from the ag and construction equipment maker. more on stocks to watch here after the break.

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. welcome back to "squawk on the street." i'm canontessa brewer. a judge just dashed donald trump's hopes that cen teres on hush money payments allegedly made to stormy daniels during the 2016 campaign. the judge also set jury selection to begin march 25th. trump pleaded not guilty. in georgia the fulton county district attorney will be in court in trump's election interference case. fani willis expected to testify about allegations brought by trump and a co-defendant claiming that willis has a personal relationship with prosecutor nathan wade. it is possible willis could be disqualified from the case. and family members of a kansas city radio deejay say she was the person killed in yesterday's deadly super bowl

victory celebration. lisa lopes-galvan was a popular figure in the hispanic community and beyond. police are holding three as they try to determine a motive behind the shooting. authorities say 21 others were injured. back to you. >> so sad. thank you, contessa. shares of deere adding to losses over the last year after results there. the shares are falling on a cut to its profit guidance for the full year after high borrowing costs hurt farm equipment demand. don't miss the company's cfo there to break down the results this afternoon on "closing bell: overtime" at 4:00 p.m. eastern. speaking of industrials, the overall sector closing at record highs yesterday. eaton, ge, aerospace, helping lead the charge all up double digits on the year. >> still to come we'll take a look at some of the quarterly results sending stellantis shares higher and the warning exute kine ford ecivmang headlines this morning after the break. er threats each year.

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. shares of stellantis as you can see up almost 5% on strong earnings planned to buy back some stock. let's go to phil lebeau from the large automaker we don't talk about that much. >> we don't, but we probably should, given the fact that performance of stellantis has been remarkable over the last several years. take a look at the stock chart. this stock is at an all-time high after the company reported a net profit growth of 11% last year, also last year, revenue up 6% and then there's the company announcing that it is going to do a share buyback. $3.2 billion share buyback, put that all together and you have shares of stellantis at an all-time high. switch gears to ford. ceo jim farley talking at a wolf research conference within the last hour, talking about the fact that the commercial vehicle

business huge margins there. the growth that probably doesn't get enough attention. people ask questions about evs. what does jim farley think about when he thinks about getting ford up to speed in evs and the competition? no question, it's the chinese. here's what he had to say. >> i got to handicap the chinese here. why? i watch europe. i was, you know, there to help build toyota europe from nothing. and then i ran ford europe and the chinese are 10% the ev market in europe. they were zero two years ago. don't take anything for granted. this ceo doesn't. >> ford struggles with evs, is one reason it has pivoted because the demand in the market for hybrids and there you see the hybrid leaders in the u.s., it's still toyota's market but ford, by far, it's really the only one of the big three doing

anything with hybrids and they are pivoting to develop and sell even more hybrids. back to this discussion about the chinese awesomutomakers whe comes to evs. jim farley talked about it at long and we hear from people, you have to pay attention to what they are coming to terms of exports and their cost advantage. that's really where they are going to town on the established automakers not just in china bs but worldwide. >> phil, on that note of evs, back to stellantis, they had comments as well, though, i believe they said they're profitable in evs but, you know, i'll go to you on exactly what was said during their call? >> yeah. but remember, they've got an ev business in europe where they're making smaller evs and not going to be coming into the market with small evs here in the u.s. when they start rolling out the ram electric or jeep's first electric vehicle later this year

here in the united states. it's going to take them time to get to profitability in the u.s. alone. in europe they've been doing well when it comes to electric vehicles. though carlos will tell you, it's not easy from a competition standpoint in europe because the chinese are coming in so aggressively at low price points. >> not to mention some of the subsidies rolling over in europe as well, phil. pretty fascinating. appreciate that. phil lebeau this morning. still to come financials within inches of fresh highs but what's ahead for the group if higher rates are here to stay. we'll bring you some headlines of the big banks hearing just getting under way on the hill when we come back. ♪ i am, said i ♪ ♪ and i am lost and i can't ♪ punch buggy red. ♪ even say why ♪ ♪ i am, i said ♪ ♪ ♪

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to improve joint comfort in 7 days, with significant improvement over time. ( ♪♪ ) the banks are in focus as house financial services kicks off a hearing on, quote, issues with the fed discount window and emergency lending. our meghan cosell has been listening in and joins us with the headlines at least so far. >> that's right. house lawmakers are taking a

look at why the fed's discount window isn't working as well as they think it should. it's designed to increase stability but lawmakers have been raising concerns banks haven't been using it often enough and a key reason the stigma attached to it. they're looking for ways to reduce that. bill nelson who leads the bank policy institute is telling the committee now that one step would be to get rid of a requirement that forces the fed to identify everyone who uses the window. he says the fed has a role to play here, that they should be telling the public that using the window is, quote, a business decision and not an indication of trouble. now regulators are actively working on this. yesterday michael barr said he's looking at ways to improve bank's readiness to borrow and they have told cnbc there's a proposal and active discussion to require banks to tap the window at least once a year and believe that would reduce the stigma at play here as well. david? >> thank you.

let's stick with financials and that sector by the way less than half of a percent front fresh new 52-week highs as this comes as the group at least -- let's talk about what's ahead for the sector with the prospect of higher rates for longer and we bring in gerard cassidy, head of u.s. bank equity strategy. things are going okay for your group so far this year. what are you most worried about? >> david, the biggest risk for the banks as it's always been is credit quality. if this u.s. economy does not have a soft landing, the stocks are pricing in a soft landing, we believe the soft landing is coming, and if it doesn't happen and we have a hard landing that would be the biggest risk for the stocks. >> yeah. you don't see that happening, do you? >> no, sir. we do not. the soft landing, you look at the employment data, you look at the wealth of the country, you look at the expansion into manufacturing space with the onshoring of america, there's a

lot of positive trends in the u.s. economy and so we're in the camp that we are likely to see a soft landing in some of the early indicators are suggesting that's what's going to happen. >> meghan was talking about this hearing on capitol hill, not the sexiest on the discount window, but does make me wonder, gerard, whether there is an increased liquidity risk from the banks, something that was learned the hard way back in last march, whether that was a one off or whether this is a legitimate topic that the discount window or other methods should be able to help with in the future? >> when you think about the discount window, sara, the fed was created to be the lender of last resort. as much as the politician bureaucrats and regulators want the banks to be tapping into this window just as a way of forming up a trend, it has that stigma attached to it. the banks don't want to do it and they don't need to do it. there's plenty of liquidity in the system. as you pointed out in march of last year when we had march

madness as we referred to it, when silicon valley and signature bank failed and first republic in may, there was a liquidity problem for some of the banks at that time. those banks very severe and put them out of business. what's interesting is, the deposit flows of all those smaller banks, there was outflows around march of '23 and we're almost back now for the smaller banks at the deposit levels where we were before march madness hit. there isn't a liquidity problem today, but i understand they want to grease the tracks so when there is a liquidity problem, the banks will be able to use that window and they're all set up to do it, they just don't want the stigma of testing it on a regular basis. >> we've seen some upgrades of at least some of the investment banks. i think you have holds on morgan stanley and goldman. are you a doubter that any return of capital markets activity is going to be robust? >> carl, it's a really good

question, and we're on the fence. maybe we're trying to be too cute to see better evidence that the capital markets business will be -- businesses will be coming back, but if people looking for pure plays on the expectation that the ipo markets come back, advisory business emerges and acquisitions come on the scene, those two names are certainly ways of playing it as well as the universal banks. we have rated out perform bank of america and jpmorgan and part of the reason is that they are going to benefit from that as well. but you're right, a pure play would be those two names and we're trying to figure out when is the best time to jump on board. >> all right. well we'll be checking in with you along the way. appreciate your time today. thank you. >> you're welcome. thank you. when we come back, how one of the biggest investment frauds in u.s. history is reverberating still today, 15 years later. we'll head live to houston for that story. stay with us.

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15 years ago this week one of the biggest and most brazen financial frauds of all time blew up, $7 billion ponzi scheme run by alan stanford.

his victims felt the pain, made worse by stanford himself. scott cohen joins us outside the former headquarters in houston. scott? >> think back to this week in february 2009, the global financial crisis was well under way. then authorities raided this building, the stanford financial headquarters, alleging a massive ponzi scheme built on certificates of deposit that stanford sold from his bank in antigua, more than 18,000 people, most retirees, lost everything. all of this came weeks after the other big ponzi scheme of that era. you remember that one, bernard madoff which unfolded a couple months before. the difference in how the madoff victims and stanford victims fared is striking. madoff victims have made about 75 cents on the dollar. far more than your typical ponzi scheme for sure.

stanford's victims at this point have recovered about 25 cents on the dollar. that number could nearly double thanks to a $1.3 billion settlement with three of the banks accused of aiding and abetting the fraud, but that is a problem there because stanford is almost single-handedly -- well, he is single handedly blocking that settlement. he continues to appeal the case and is delaying that payout to the victims. ed and beverly put about half their retirement savings into stanford cds. the delays, the meager recoveries are maddening to them, so are the discrepancies, the disparities with the madoff victims. >> just don't get treated fairly, i guess. >> they put nearly half of their

retirement funds into stanford cds. they're now in their 80s, they have medical issues and could use that money. why the difference? authorities argue stanford's fraud was based in a foreign bank so they did not give investors coverage, which madoff investors got. that means the investors in stanford have bore the entire cost of the recovery. the expense, half a billion to date. another big difference is the justice department went after madoff's banker, jpmorgan. this settlement with the banks is being paid for by the investors. by the way, stanford has until today to file his last appeal, what may be his last appeal of that settlement to the u.s. supreme court. >> scott, stanford is doing all this from prison, correct? >> he is. he's in prison in a federal penitentiary in florida.

he's acting as his own lawyer and he's managed to up-end this case and delay the payments to his victims. he claims there was a jurisdictional issue. the s.e.c. sued him in dallas. stanford was based here in houston. that has been thrown out again and again by the courts. but it doesn't stop stanford from continuing to appeal and continuing to delay. >> does he have any net worth if and when he gets out of prison that he could claim? i mean, is this about trying to preserve that? >> well, he's not going to get out of prison. he was sentenced to 110 years. at one point he tried to argue for compassionate relief and didn't get that. he's his own lawyer. he's doing this on his own. as you've heard, it's totally frustrating to the victims, frustrating to the court-appointed receiver, who has been trying to get this money back for 15 years. really all it seems to do is delay. by the way, we did send a letter to stanford in prison about a month and a half ago. no surprise, he hasn't

responded. >> all right. >> why is he doing it? >> maybe he wants a visit from scott. scott, thank you for the great reporting. especially over this entire time period. we'll have more on the state of the retail sector. that will be in the next hour. the former ceo of walmart's u.s. business, bill simon, will join carl and sara. live market coverage also here at cnbc continues.

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good thursday morning. welcome to "money movers." i'm carl quintanilla with sara eisen live at post 9 of the new york stock exchange. today citi's chief economist why he says a recession is ahead and a soft landing is the least likely scenario. do this morning's weaker retail sales mean the consumer is finally cracking? bill simon gives us his outlook. tesla has long held the crown as favorite trade among retail investors but that dominance may be fading. we take a look at