the -- krause -- i didn't say anything all day long, the entire time. >> you felt like you needed to -- >> maybe a border. if you're a country, how about a border >> nobody's disagreeing with you. who's disagreeing with you >> someone who's sitting in the white house. >> make sure you join us tomorrow "squawk on the street" begins right now. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and almost said david faber here at post nine of the new york stock exchange. david has the morning off. nvidia tonight is key. meanwhile, palo alto, teledoc, cutting guidance our road map begins with nvidia out after the bell, a day after the stock saw its biggest drop in four months. palo alto is plunging more than 20% premarket as they lower their full-year guidance later this hour, a cnbc exclusive with b of a chairman and ceo brian moynihan

let's begin with nvidia. under some pressure again ahead of its big earnings tonight after the stock suffered its biggest one-day drop in market cap during yesterday's session last night on "mad money," jim did reiterate his bullish stance on the company by comparing jensen huang to one global superstar. >> jensen huang is the ceo of taylor swift i'm not joking whatever happens tomorrow, do we think it's make or break for nvidia no way nobody's about to call a top on taylor swift, so why does everyone want to call a top with nvidia >> he's not sweating the quarter, working on something more long-term >> he's sweating the march k keynote, which is something that he does a deep dive every year there will be a virtual, but yo have humans, and that's what he thinks about, which is a five to ten-year plan. he has to deal with the quarter, because he is human.

taylor swift has to deal with her appearances in the box with kelce because she's human. what really matters here is that if you think that a.i. is a short, if you think it's all, you know, if you think it's degenerative a.i., if you don't think there's anything to it, you should sell, because nvidia is what makes it all happen. i have said own it, don't trade it the only other stock i've said that about is apple, because i need to restrain myself. i find myself from -- there was someone in the "journal" yesterday who quoted me as saying in 2017 that he bought the stock, and i looked up what i said in 2017 that's when i named my dog nvidia but i think it's really important for people to understand that this is not nearly as important for jensen as it is for everybody else, national nvidia day. colette krause will come on, will be very straight. there will be a line, which says that china's a problem, and if we don't get china by 2025, we're in trouble, and tomorrow you will hear that's all people

say. the reason why it's down is because they say china trouble that's what happens to the stock. i caution to say to people, there's something between plunge and explosion upward and that's what happened in the second half of last year, and i think -- they're not going to nikesh this thing. >> can't you be a believer in the long-term story and still have your eyes open to digestion by hyperscalers? isn't that part of the story tonight? >> i think if you go to -- jensen has many partners, but one of the more, i would say, tempestuous one is snowflake and frank slootman jensen went to the slootman festival -- everyone has a festival we should get festivals. one of the things that happened was that jensen was -- came in peace, as he said, and slootman basically attacked him and said, you're charging too much, and people are going to rent this, rather than spend the money. and i think that's true for a lot of companies they want to get them.

sovereign nations, they take a big chunk of these but i think there was someone who said, listen, maybe there's too many h-100s out there. well, that's why he does the h-200, but in his mind, he's working on the h-500 that's what people don't get that's why i compared him to taylor swift who drops an album while she's working on an album. you have to view him as a continuum. i remember when i went to his office and there was this thing behind me and it was calculating furiously. i said, what's that? he said, this is how fast you have to go to land a man on mars, and when you get really close to mars, you have to stop and take it back up, and i got to calculate exactly what would cause a soft landing on mars i said, why are you doing that he said, why wouldn't you do it? that's him this is a man who has dog robots picking up jerll-o and giving them treats when they get it that's the man

>> the move tonight, about 11% would be one of the biggest market cap moves ever. >> it could happen i'm prepared for people to say, well, it was the digestion, it looks like the grace hopper may or may not be big. china, they need to be able to sell the h-200 gina raimondo doesn't want them to amazon has too many, and sure enough, alphabet's developing its own. these are all -- i can write this i can chatgpt tomorrow's trading on nvidia, but i would come back and say, remember, this is a company that is doing and thinking on a different plane than the rest of us. and i wish they would do what walmart did when doug mcmillon said, we got to split because people want a share. then i think nvidia wouldn't be so nouveau riche nvidia stands for nouveau riche alpha. >> there is one last thing that jpmorgan points out today.

if the guidance is too good, the street, strangely, will sniff out, well, maybe supply is getting better, and then the inventory correction comes is that possible >> look, i think that to be smooth here is to be smooth on the apple iphone 4 to apple ipho iphone 5 he compares it to an iphone moment, and that's good and bad. iphone changed the world, but we have people who say, the best is behind it already. you have to understand, even though this is enterprise and not consumer, there's always going to be someone who says, this is the top, and it's all fanciful, and we're not going to buy the support from this guy. let's turn to palo alto networks this morning, down on its latest earnings results as well jim, three downgrades today. piper says, oops, i did it again, calling it their third straight disappointment. >> that's true i think nikesh aurora is basically doing -- and i want to quote this because i went through it with him.

he's offering -- instead of doing a la carte sales, he's offering a prix fixe category of meals. he downgraded the stock for the travel trust, and i shouldn't -- i told everybody -- i don't want to give everything away, but we have a big annual meeting on saturday we're upgrading today because everyone else is downgrading i want to run into the fire on this thing because i think nikesh realizes you can't nickel and dime all these pieces anymore. he used a word, which i think he wanted to take back very badly, which he said there was fatigue. what he meant is that there are so many people selling individual products that people are, like, exhausted and can't come up with the roi they're not fatigued in the sense that they're not going to buy any cybersecurity anymore, because they'll -- if you were to say, we're not buying any

more of this, chinese hackers, romanian hackers, russian hackers, venezuelan hackers, even pakistani hackers would be after these guys you cannot do that you cannot stop spending the idea that the fatigue was wrong. you're giving up the gain for this year. remember, this top five performer, s&p, top five performer last year, s&p, and nikesh is a visionary, and to be a visionary, there's -- i have to tell you. i want people to go to the conference call, because it is brilliant. at one point, he said to brad, first of all, he says, he's talking about platformization. that's what he's going toward. he goes, only introduced five years ago when you didn't believe us, but now we got to worry about consolidation. and he does say that there's -- this one he says to joseph gal low from jeffries. this is a short-term hiccup. i know you guys would love life that was linearly, nice in

quarters, and moved up in a beat-and-raise percentage. i'm trying to get this done in the next three to five years before we become even bigger and longer cybersecurity platform. i'll see that and raise him by the fact that nikesh is no long ore billionaire. >> that was good sound last night on "mad money. take a listen. >> there's no cybersecurity abyss. i think this is a reshaping of our demand curves. we want to platformize our customers. we want to execute with them as they want right now so we can drive this business to a bigger number in the future years >> interestingly, jim, the president is expected to sign an executive order looking at cybersecurity on the nation's ports. >> he does want a suite.

he's up against crowdstrike and a lot of things. i don't think he's trying to take it down to $100 to make a record that's facetious i think people feel like, the model was working really well. you were a $100 billion company. you were number one. why does the number one company have to commit suicide and the answer, he would say, is no, we have to be able to take this thing into a prix fixe meal we can't keep getting nickelled and dimed by crowdstrike we're going for suites so, he's going towards that. no one was expecting it, candidly a lot of people felt, this is just gold. he's not sitting on a gold mine right now, but he could later. >> we're going to watch it today with other tech names. in the meantime, want to get to leslie picker down in miami with a very special guest. good morning, leslie >> good morning, carl. thank you so much, and thank you to brian moynihan, the chairman and ceo of bank of america, for joining us from your financial services conference here in

miami. appreciate your time >> thanks for coming down, and it's a great group of investors and companies and the team's done a great job pulling it together >> the event is great so far you just came off your fireside chat where you that you could about some big macro themes you're watching. you're saying the consumer is firing on all cylinders. they're still borrowing. activity is high but you juxtapose that to the commercial sector, and you see that moderating a little bit as we look ahead to the fed minutes, i'm curious what you think all of this means for, you know, the fed's kind of decision making as it pertains to monetary policy. >> i think if you think about the consumer, the consumer's still spending more out of their accounts of bank of america than last year, 4 to 5% last year at this time, that would have been 9 to 10% it slowed down, and it's consistent with a lower growth, lower inflation economy. that's good news because the consumer isn't going south and is not spending --

they have money in their accounts the capacity to borrow there's a lot of concern about the aggregate debt levels but if you normalize them for the growth in the economy, they're in the same place they were pre-pandemic, so that's good commercial companies have to look at the world around them and everything they read, whether it's the wars, whether it could escalate, whether the fed is going to hold longer, whatever the news of the day is, and you'll hear more this afternoon or whether it's just worried about final demand, that's more concerning they're not using their alliances aggressively, which is indication they're not putting money quite at the rate -- it's more costly. the decision to borrow on your line is a 7.5% decision versus a 2.5% decision 36 months ago, 24 months ago they are going to be more careful. that means that the investment rate has slowed down >> so, putting this all together, there's this grand debate out there, i heard steve liesman talking about this on "squawk box" this morning, just about this idea of whether the fed needs to cut kind of preemptively to make sure that

some of these cracks that are kind of percolating under the surface don't come to fruition and push us into a recession, and others say, no, you need to follow the data. you need to make sure that you are, you know, not being too easing in order to make sure that inflation is officially stamped out. based on your vantage point, where are you on that debate >> our team, the research team, which is nurmg onmber one in th world, has three cuts last year, four cuts next year. that's this debate about whether the data that just came out shows the economy and the inflation is coming down, but not quite at the rate people had hoped. so, they've got to have a clear path the fed's not being mysterious they're saying, we have to have a clear path down to the 2% target we have to be well on the way before we cut. now, the error potential is not to bring rates down and normalize soon enough, just like it was not to raise rates fast enough, and you can hear the fed governors and the chair talk about, well, maybe we didn't

move fast enough before when you saw signs of inflation they had the same possibility. so, that's what they're wrestling with our view is that -- our team's view is three cuts this year would bring the economy back into equilibrium at the end of '25 with the fed funds rate in the mid -- you know, 3%, 3.5%. >> my colleague, jim cramer, has a question for you back in studio >> brian, what price of anything is down from two years ago >> i'm sorry, jim. i didn't hear you. >> i'm trying to figure out what price, house, car, rent, what is down so that we should feel confident that the fed should cut? >> you know, at the end of the day, the pricing went up the wages went up. they just went up in two different cycles, so the wage growth that occurred early in the post-pandemic cycle and the contribution from the government to them added a lot to consumers' firepower the problem is then the pricing

caught up with it and now we're trying to get that back in equilibrium. so, it will take people getting used to mortgage rates of 6%, 7% jim, you well know, because you're about as old as i am, we've been around a while, that is what we used to think was a good mortgage rate it's just for 15 years, we had no real rate structure in the united states and around the world, and so people got used to lower rates. it will take time to do that that will work itself through the system as rates normalize. the inversion of the curve has to be corrected. there has to be some changes made but when you think about it overall, jim, the reality is, yes, prices are up, but wages are up, unemployment is down, people are earning money, so that's the tug of war that's going on they've moved the consumer to a different level of spending and capabilities will that hold that's going to be an interesting question >> 12% mortgage for me first time, brian, so, yes, we are similar age. yesterday, kind of an amazing tie-up capital one with discover financial.

is this something that you think should be investigated by the ftc? it might actually cut back competition in the credit card business >> jim, it's far from me to look at somebody else's deal and reflect on it. capital one and discover have made a major transformative discussion it will concentrate in a credit card business. we're an effective competitor at $150 billion in balances and a great opportunity among our customer base to drive more growth i don't worry about the consolidation from a competitive standpoint but that's someone else to judge on whether they have it or not >> what does that mean for your business as a credit card issuer this tie-up would make them the largest credit card issuer in the u.s., as measured by card loans outstanding at $257 billion b of a has about $102 billion, so sizable player there, but this creates a pretty significant competitor for you how do you kind of assess the landscape if this deal does go through? >> well, at the end of the day, we, if you go back and look

historically after the m&a transaction, bank of america rose to the top of the credit card outstandings, and we have been more cautious and direct on how we do it we do it for our customers we drive the business to be in affinity with our customer base. we drive the business to have great credit underwriting and in a world where we're talking about normalization of credit, we're talking about getting back to 3.5% chargeoff rate we underwrite to higher loss rate tolerance that. so, that's good news being the biggest is not necessarily what we want to do we want to be the best with the best rewards product, consumer franchise, 11 million customers are 70% of the balances in our consumer business that are tied with preferred rewards through their card, the checking account, the home equity, and that is where you generate real economic value for your shareholders so, we never said we were going to be the biggest in any business we want to be the best in every business >> but is scale important here >> it is, it is, but our scale

and their scale is not much different when you look at operating costs. if i were at $20 milbillion issr it might be concerning we're growing exactly the way we want our balances grew 10% year over year >> your mentioned chargeoffs i want to pivot if we can to what's going on in the regional banking world, because there has been since we last spoke to you in davos a flare-up in that community with shares of new york community bank corp. seeing half their value evaporate this year valley national also down significantly. the concern there, once again, kind of this commercial real estate and at this juncture, especially as the prospect of rate cuts are getting punted further and further down the road, do you think that the markets is overreacting, or do you think there is a real risk here in commercial real estate and that these flare-ups are just going to keep happening until something gets solved? >> so, if you look at the commercial real estate out there, loans out there, half are

in industry, and half aren't half in the industry are more heavily weighted to regional banks, and that's where the concern comes up from our research team and others but if you look at the underwriting, people forget that the underwriting standards, you know, on commercial real estate, in the late '80s and early '90s when you had massive failures, have been fairly well regulated. as we look at our portfolio is $60 billion on a loan book of 1 trillion, so 6%. if you look at that office space, it's underwritten at 50% ltv, loan to value reappraisal is only in the 70s for current appraisal and properties that have been rated down, that we had concerns about the cash flow. we feel very good about our portfolio. will it be a constant question yes, because at the end of the day, what has happened in commercial real estate is evidenced by the trend in our company. when the team took over in 2010,

we had about 130 square feet that's less people so, that change is going on. it went on with velocity before the pandemic, and it was accelerated by the pandemic, and the work from home day a week, two days a week. if you think about it, we, all through that process, only got about 25% of our floor space built to the modern environment that we have then, the pandemic hit now, we have people -- if you think about it, if you do four days a week out of five, that is a 25% reduction or 20% reduction in usage, so that gives you a whole other configuration point. that's going to go on, and that's what's happening in the office space market. the reality is it's a slow transition that takes place, and we feel very good about our portfolio. people forget that in, whether it's the c card process or the shared natural credit process or just how regulars operate together, ratings integrity is a critical part of what the banking system has all these banks have been going through c-card stuff

>> stress tests. >> have had constantly review of their portfolios as to underwriting criteria, throwing it against a 40, 50% downdraft in commercial real estate prices and how to you charge off? in the last results, we were about 9% over nine quarters, so 50% drop in prices instantaneously and no ability to work around it. doesn't mean it won't with workouts and chargeoffs but the system is much more ahead of the problems than they were back in the late '80s and '90s when we had a less serious commercial real estate crisis, when the regulators came in and rerated whole portfolios overnight that work and the top 30, 40 banks goes on every day. >> brian, i want to thank you so much for your time really appreciate it great conversation talking about the changing landscape in the financial services industry against the backdrop of your conference in miami. carl, back to you. >> great stuff, leslie, thank you. leslie picker with brian

moynihan we'll take a look at futures here, get to some of the other names moving on earnings, including adi and toll we'll revisit the great discussion with jim last night between him and doug mcmillon of walmart about inflation eranthe now, i'm loading th 76s d e flyers into my apple sports app >> priorities. bringing you an elevated experience, tailor-made for trader minds. go deeper with thinkorswim: our award-wining trading platforms. unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. and sharpen your skills with an immersive online education crafted just for traders. all so you can trade brilliantly. you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather?

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you're right, i bet they deal with this all the time. dr. finley really puts you at ease. let's do it! you've got more options than you know. book now. >> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. let's get cramer's "mad dash" as we count down to the bell >> one of the most amazing companies is actually a spac,

and the company is called vertiv, and its ceo is dave cody, late of honeywell -- sorry, its chairman. this is the ceo. but this stock, had it been in the s&p, would have been the number one performer last year it makes heat rejection, power transfer, picks and shovels inside a datacenter, and last night it reported, and it was a great quarter. they gave good guidance, but the guidance was too weak for some this may be a precursor to nvidia in the sense that this stock was at $65 last week on february 15th. it's now down $10. there's nothing wrong with it except for the fact that it came in hot you could say, wait a second, people who own nvidia are getting plastered because the stock is getting clocked ahead of time but keep in mind, vertiv, number one performer if it had been in the s&p, and somehow let people down, even though it was an amazing quarter. just expectations.

and the long knives are out for the nouveau riche nvidia no one can believe it went up so much in four years, but it did >> not to mention adding whole intels by the week in recent weeks. >> jensen huang, okay, so, he wears a leather jacket, and he's a cool guy the problem with people who think he's a cool guy is they're missing the point. he's the da vinci of our era he has thought long and hard about what what's going to appear in 2034, which i hope he's still running the company, and the rest of us are peons we're like lilliputians, and we're thinking, wait a second -- no, we're not even in his plane. i've got -- when i have been out there, when he had me, he created me, and he said, hey, i'm cramer it was, like, it was better than me he did a great monologue i don't think people realize, we are not of his world so, you can sell it. you can sell him when you go through

headquarters, he's saying "hello" to everybody by name they don't even know who he is and i just think that he's otherworldly, and that bothers people he's everywhere, giving speeches he just this morning comes up and he's got an announcement with google about a relationship about a.i. platforms someone is going to say tonight that google is oppositional to nvidia well, then, what do you do with "shining brighter together"? this just came out a few minutes ago. i'm thinking, okay, go sell it make my day. >> it's a key data point for the market overall of course, jim, it's a good thing we have it, because the week is sort of a vacuum of data in terms of macro, although we're getting a little bit of fed speak, and then minutes this afternoon will give us a taste of whether or not they want more evidence >> i see your minutes, and i raise you walmart. yesterday, doug mcmillon talking

about, unlike brian moynihan -- i asked a question about what's come down. the natural answer is to say, why don't you go to walmart or costco they are at the forefront of -- speaking about food inflation and how it's sticky. i thought doug had a lot of good things to say about what walmart's doing to make it so you get it when you want it where you want it on last night's "mad money." >> take a listen to what he told jim. >> our general merchandise prices, things that are not food or consumable, are actually down versus a year ago, and comparable to two years ago, generally, and on the food side, we're seeing some of our fresh food categories come down, but processed food, dry grocery and consumable, still have a two-year stack of inflation that's problematic, like, mid-double digits. but this year, compared to a year ago, prices are up less than 1%, so i think we've -- even in those categories that have been more stubborn, we have been fighting hard to keep our prices low >> now, i like walmart's private label, and i defy anyone to say

that it's any different. i'm not just talking about string beans and peas. i think that kirkland signature is better than any brand i've ever gotten. these are the two companies that are saying, to their suppliers, you want to sell here? do you want to be in walmart you want to be in costco take your prices down. they have the power that jay powell wishes he had they can wave the magic wand and evict you. i had a company that had a popcorn business in costco, and just geared up big for christmas and was, like, unbelievable, and we're just all set to raise prices and costco kicked us out, and the company went out costco is powerful than any other company. >> food prices were up 2% yesterday. we had general mills and hershey present at cagney, and they are talking about volumes recovering in calendar q2

>> good luck ozempic, we're going to have a special. eli lilly is offering mounjaro and zepbound we have been seeing that your willpower is what this thing is about. these drugs give you willpower, and lilly, under $300 under -- no one even knows this stuff it's killing me. go sell eli lilly. that's another one people want to sell. but i think general mills is shaking in its proverbial boots. >> that piece says food hasn't taken this much income in 30 years and they quote steve kaelin saying, it's hard to point to eras in which food prices go down and stay down >> the supply chain is really drastic. everything costs more. the transport really just gutted a lot of people. you look, and you look at where's the two ruby red grapefruits for $3 when it's now

$6 how did this happen? the answer is that everybody let it happen and someone is going to have to hurt their gross margin, and the company's going to hurt their gross margin are the companies that are going to lose sales to the empire that is eli lilly that people don't -- are all -- no one -- doug wouldn't go there. no one is willing to admit that the 7 to 10% of the people who are going to be taking these things just don't want those foods anymore. pepsi was up 3%. i think that raymond is amazing, but if you can eat just one, then you're going to eat just one. >> the other thing you got to with mcmillon was the stock, dealing with the employees, and also the vizio deal, which continues to bite on roku today, jim. >> he's continuing -- he mentioned -- i asked him about roku, and doug, the ceo of walmart, is saying, look, the more the merrier, but the fact is that vizio is a game, set, match. it's a check mate because they can win advertising. by the way, they have $3.1 billion in advertising. i think they can go to

$4 billion the vizio deal is not accretive yet, but i think it will be next year >> amazon going into the dow on monday bezos selling some more shares great piece in the "journal" about how nobody wants warehouses in their neighborhood, jim, but they still want next-day delivery >> there's a warehouse country in the lehigh valley, and you get there, and you're looking at it and saying, is that a vet area 51 installation no, it's amazon. amazon's up. very little money is indexed to the dow, so that is just ridiculous is it as ridiculous as nikesh's stock being down 90 to $100? kind of. but i think that one of the things that i'm grateful for is that it looks like that bezos is done selling 50 million share >> the 50 handle >> and maybe we can go back to talking about how good jassy is. >> the other one, uber going into the transports, replacing jetblue. bernstein today, looking at how uber went from being a

money-losing stunk, in their words, to a name that's returning capital, transport-worthy, asking which is the next one. >> and what happened was this moment that people forget where dara said, okay, look, this is it he did a -- a year of living efficiently, not unlike mark zuckerberg, where there's a funny video of him doing something. i don't know they won't pass him a shirt. i think what is amazing is that they were the first company to realize we got to stop the spending, and within a year, they were making a lot of money. they were spending way too much. do you know that drizzly -- they bought it for like a billion a couple years ago i went in because my wife has this liquor. i said, what is this immediately, they come back and said, would you like to buy it they're clever people. they're fun. they're great, and they're on top. look out for risher. risher comes on the show, lyft, stock's at 9, and he makes bold challenges, including this airport pledge, and look

the stock is good. it was just a decision by dara khosrowshahi to get the company profitable i remember when he did it and it was like a memo. the memo was saying, we're cutting out the peanuts and the free popcorn it was one of those. the paper clips. boom that's what happened and they did it. good for them. >> meantime, we just had some flashes on nat gas, for example, rebounding on this chesapeake capex number, jim, down 20 >> well, i mean, i got to tell you, there's a -- i read rusty brazil's notes today, we're talking about a big lng terminal about to be turned on we're going to be sending this stuff out. when brian moynihan, when i asked him, has anything come down it should have been one of those where it's rhetorical because the answer is nat gas. nat gas affects probably more people than many people realize because it is how -- it is our heating fuel it's good. it was minus nine when i was in

kansas city, and you know, that was kind of cold and the only thing that kept you warm at all was nat gas. >> no, with the first close below two got our attention and just kept going. >> look, this is an amazing thing. obviously, we have the lowest cost natural gas in the world, we can't export enough, and what happens? it's going to be a great source of national security, but the president said that 2028, we're going to put a pause, which might hurt wes ferrell, who's a great visionary. might hurt his project i think this cheap fuel is not hailed enough, but we don't build pipelines. everyone -- no one wants pipelines in their land. i have a pipeline in my land every year, they give me a calendar fantastic. >> much like a toaster at the bank >> they give me a calendar where you rip the page off a toaster would be better. >> wementioned palo alto we've got teledoc with similar losses on a smaller scale and solar age technologies down too.

>> solar edge turned out to be a financing play and a lot of the european financing was not there, similar to enphase. teledock -- teledoc is the ultimate commodity i could probably call up five people and get a prescription for a super duper prednisone but palo alto is different that is a man, nikesh arora, deciding that we are going to risk our market cap and get this thing right and go with a prix fixe product it's shocking people because here he was, king of the world, you know, and suddenly, it's, you know, it's like, he's not -- he's like a rook no, he's like a pawn no, nikesh is not a pawn he's way too cool. >> we were talking about teledoc. wba, jim, not just getting kicked out of the deal but also

the downgrade from hsbc to reduce structural headwinds, new leadership, cash flow pressures. >> here's the scoop on wba my friend, lisa gill, who runs the jpmorgan health care conference, would tell you that tim wentworth, the ceo, is a brilliant man who cut the dividend, that was smart he has another bad quarter he's got to reset. and then i think walgreens is going to be back now, what did walgreens replace in the dow ge what's been the best stock around let's not just necessarily, you know, in keeping with that, i think that walgreens, wentworth will turn it around, i think it bottoms at $18 i think karen lynch is turning and cvs, although there's so many minute clinics. i could toss my wife at a minute clinic that didn't come out right >> mortgage apps down 10 or toll raising the guidance >> toll, million dollar homes,

gross margins up again, orders absolutely fabulous, and just -- i mean, doug yearley, i was congratulating him last night. his nephew works with me for the investing club fabulous job but what i think i like best about this is that they have basically said a few years ago that they were just going to make a lot more money on every home they're not going to lose money. they're going to buy back stock until the street recognizes how great they are and they did everything. every single line for toll, whether it be the unit orders, whether it be the land that they're selling, they made a fortune on one piece of land, but this is just a remarkable company with remarkable quarter, and stuart miller from lennar, he's a competitive fella, you got some work cut out for you, because doug yearley has delivered fabulously >> of course, the 30-year fixed back with the 7 handle, jim. >> that caused a number of -- mortgage applications down

and toll brothers did benefit from a january decline in mortgages. the sprin g is fabulous. look at this and say, how many people can afford a million dollar home? i come back to inflation because on that home depot call yesterday, they're talking about 46% housing inflation since 2019 that's why i say you can cut three times and make it so that inflation's 60%, and is that what you want? is that what you want? i say, no. >> you mentioned depot they do get cut by hsbc today. >> yeah. >> back to reduce. sales momentum is poor muted industry fundamentals, jim. >> well, i thought that was an ill-advised downgrade because right now, the do-it-yourself was -- i was surprised professional and do-it-yourself were equal the renovation market isn't as strong as we think, but you got a company selling at 23 times earnings, premium group, 2.5 they just raised the dividend, and it finally comes down, you get a chance i think, look, it's eight points

from its high. you can let it come in a little, but ted decker is doing a remarkable job, and if you go aisle by aisle with the quarter, they had a lot of aisles that were very strong i don't want to give up on depot. i think this could be lowe's time, marvin ellison, because when i hear that the do-it-yourselfers are really browsing the aisles of home depot, maybe that's a different quarter for lowe's i know you were mentioning apple news earlier >> aq, a remarkable fellow who we both know, has insisted and pushed through a sports app. it's apple sports. i downloaded it and voted immediately. the sixers and the phillies and the union. what you do is you load your teams in it's got the odds of all the games. you pick -- this is a lot of this is because, like eddie, with duke, withich had a good o last night against miami, what happens is you have your teams

that you like and you want the instant upgrade. this is the beginning of what i regard their major sports initiative it's very early, and you can say, listen, i want to have a leaderboard. i can do whatever i want apple tv, go to it when i said, how about my vision pro, which they did not have, he said, no that means, to me, vision pro, coming >> well, and he's definitely going to be watching the duke news we know that it does bring iup -- we haven't mentioned the fubo tv efforts to go after the sports bundle >> i think it's pretty easy because i think that the ftc -- if the ftc doesn't go for that one, that would be a shame i'm not so sure there's such a great thing for the consumer, and by the way, it's not just to protect -- i don't want to protect bob kraft and the patriots, but they should have mentioned the nfl they were going to do this fubo, i would say they need this or they need to do a 10 for 1 reverse split, something that makes them seem a little more serious. >> we are going to hear from the ceo in the 10:00 a.m. hour

we haven't talked about aci-kroger and whether or not that happens next week >> if you go back to the history of the justice department and the ftc on these mergers, supermarkets, they've all been bad. one of the reasons is usually like a straw man that's set up to buy the divisions that show overlap, and that was heaggan with the safeway deal, and it went bankrupt almost immediately. they have a real -- they have a real buyer, but i know that jonathan kanter, and of course, this is not justice -- well, this is everybody. i think justice, ftc, the states, everybody's looking at this has said over and over again that this and the airline mergers were the bad ones. rodney mcmullen has great data that shows you that prices have been held or going lower i think rodney's real. i think he's earnest, and i don't think they play earnest down there they're not earnest. >> we've also got american hiking some baggage fees >> thanks for nothing. >> another conversation with

oscar munoz on "squawk" today, saying it might be an effort to get people to book more directly with the carrier than through some of the online agents. >> that could be we're call kind of tired of paying more and having an extremely full flight and not being able to take our carry-ons in anyway. i think that american has been stuck at this price for a very long time. they all have. they've been not great stocks. not great stocks at all. >> what's buffett's old line never going to be a wonderful business >> that's because he owned u.s. air. it's one of his few really, really bad mistakes, and he will mention that i'm watching the cybersecurity companies because i think that what people don't realize is that nikesh arora has declared war against everybody else as he does his platformization, and that's going to make it so everybody is going to be saying, all the -- the clients are going to be saying, listen, i want a better deal, and i don't know.

i think the group's going to be under pressure for more than just three days. george at crowdstrike, he's never missed, although i think nikesh arora would contest that. i would go with crowdstrike and then zscaler because the street loves zscaler so much. >> we'll see how the session develops some red arrows today. let's watch bonds as well. not a lot of ecodata this week, but we are getting bostic at 12:30, bowman at 1:00, and of course the minutes, which are about three weeks old at 2:00 p.m. eastern time dow down 117, holding 4,960. we're back in a moment at morgan stanley, old school hard work

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it's time for jim and stop trading. >> people don't like the wendy's numbers and one of the things that's interesting is they have t tanner, i think he's terrific but a 5% yield raising eyebrows some people think they can't be sustained. mcdonald's talked about how just difficult the business is. so wendy's you can see it as a great opportunity or be like my wife and go eat the baconator and move on. today j.p. morgan does cut to neutral on the back of looming price competition. >> getting price competition a lot of places, including cyber security. >> that's your key for tonight leading into nvidia i assume is watching palo alto's actions. >> long knives, don't give up the ship, three day love fest, 300,000 people listening to the keynote, there's more to it than

a quarter. it's like go to the davinci museum in roam, he had the hospital b helicopter but there's a lot of other things too. >> how much of the market is vulnerable. >> there is. because a.i. has created the biggest move that we've seen in many, many years i think it could be not a hiccup it could be people saying listen, what was i doing i urge people to think longer term that's not something anyone wants to hear on wall street. >> reminds me of katy huber. a nice piece today arguing the bond markets have corrected to price in fewer fed cuts but stocks have not. >> i don't think there will be any cuts. >> are you saying no fed cuts this year? >> if we keep up -- if we don't have employment -- unemployment has to go to four and change or i think the j is going to say we're watching we're watching and i think they're very

worried. i asked brian moynihan, i want to see something come down in price, other than natural gas. >> we'll see the minutes are instructed but dated. >> they are. i have realty income and then brent saunders from bausch & lomb load up the app, there's a real company there, palo alto, jensen huang if you are going to sell them, go sell taylwior sft. >> see you at 6:00 "mad money". quick break with the do you down 318, back in three

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welcome to another hour of "squawk on the street" i'm kellyancarl quintanilla with courtney reagan sara and david have the morning

off. a busy session with fed speak this afternoon it's really all about the nvidia waiting game after the bell tonight with an 11% implied move. >> everything is nvidia. here are three big movers we're watching palo alto shares are plunging after trimming their full year guidance and a disappointing forecast for the current quarter. the drop down about 27%. shares of solaredge also sinking giving weak guidance as high interest rates and depressed demand hits stocks across the sector and toll brothers gaining after strong numbers and guidance there, home sale numbers up 10%. the ceo calling it, quote, another quarter of solid demand. shares up 6%. a big test for the markets tonight with nvidia. many expecting a double digit move in either direction

kristina partsinevelos is here with more on what to look out for tonight. hi >> reporter: hi, carl. let's recap yesterday, nvidia lost $78 billion in market cap, the largest daily loss on record investigators are opting to take profit that's one reason. the continued sell off is google will use less compute for their a.i. model and overall, the magnitude of the beat for nvidia over two quarters that have some analysts anticipating a slight sell off this afternoon. like you mentioned, possibly the options market an 11% move the street though is expecting revenues of about 21.3 billion with a buy side whisper at 21.7 billion a few risks you have improving supply which could cut lead times. demand weakness from china, future competition from amd, intel, semi custom chip solutions from google,

microsoft,et and yet the stock has dropped 40% year to date nvidia's management saying 2025 will be a growth year. cloud cap x increasing from the likes of microsoft, amazon, google and all of that, that you just saw on your screen, is sending the message that the a.i. is sustainable and that's what inves investors need to hear in today's market especially for the up tick in nvidia stock the last year. let's talk about that with lucas kay. lucas, kristina partsinevelos mentioned the 20 year revenue, is that the important number. >> it is thanks for having me i think another figure to keep an eye on is the data center sales how the gpus have sold to major customers and what the guidance and outlook on that is given as mentioned there are still some lingering supply

risks and constraints that the overall industry is facing today. >> where's the balance right now in terms of supply inventory, availability guidance, the market wants to see some but some argue you don't want to see too much because that implies maybe a correction coming down the pike >> yeah, i think it's an ongoing delicate balance between the supplier and nvidia. we've seen commitments on the foundry end to continue to increase at capacity for waivers that are being constrained by these advanced packaging issues we're seeing today i think during today's earnings this is a key thing to monitor whether they mention ongoing issues or potential roadblocks down the road or if they can look to diversify some of the supply with maybe domestic partners like an intel and see how the performance is for them. >> i know that you were going

over some analyst notes in the last couple of days leading up to this. it feels like there's no room for any kind of even slight disappointment from nvidia what would you say are the biggest, the single budget risk? i know you went through some caution points, but if there was oneto watch out for. >> reporter: it would be growth for 2025, sustainability of the a.i. trend that's what investors want to hear you mentioned analyzes, seeing price targets of $1,200, i saw that yesterday $1,200, trading at $68.3.24$683. i'd like to point out to viewers post nvidia earnings it may drop but nvidia has this big a.i. event march 18th and the last six years on average, the stock has traded 6% higher so it's usually a positive catalyst, which means the selloff could be short lived and

could be an opportunity to get into this name if you haven't. >> that's an interesting point i know your coverage universe expands beyond nvidia, lucas, you mentioned intel as something you're looking at going into these results. can anyone catch up to nvidia? i'm not necessarily talking about just the stock price but the momentum and where they are in a.i.? so many things seem interconnected to nvidia is there any room for another dominant player like this? >> the good news for these other chip makers is the market is still in the early legs and growing. for nvidia competition will always remain a factor that sort of looms in the background i point to players like amd and also some of the biggest public cloud customers like amazon or microsoft or google that are looking to develop and put more efforts into their custom sil silicon. now the question is, how quickly can they ramp this up and how soon can they look to displace

at least some of the nvidia dependency, they're seeing the custom silicon yields to reach these advanced chips for many customers that have been been doing it as long as nvidia may take longer than expected. >> finally, there are some out there who have gone on a limb and sort of forecasted a dramatic decline in gpu pricing over time. is that something the treat takes seriously? does jensen need to address it tonight or not >> i think it's already been addressed or starting to have been addressed so we see that the h100, obviously, the cash cow of nvidia is priced fairly high, anywhere from 30 to 40,000 retail in most data center or enterprise cases, all that compute power and the degree of -- the complexity of acceleration is not as needed for everyday workloads nvidia has begun to already

address this, through their more specialized in certain a.i. workload chips i'm expecting nvidia to release at least some of their a.i. developments, even today >> final thought on that >> yeah just a quick thing the b 100, new a.i. chip is priced 10 to 30% more than the h100 that could help margins if you're concerned about the drop just in the near term. but given 2026, that's the talk that's peak earnings for nvidia. pushed out but still nonetheless competition is coming. >> appreciate that, going to be helpful to understand tonight. well ee'll turn to the broa market giving back returns today. despite the prospect of higher for longer rates, brian moynihan is bullish, telling us last hour

the consumer is in good shape. listen. >> the consumer is still spending more out of their accounts this year compared to last year, 4 to 5% last year would have been 9 to 10%. so it's slowed down and consistent with a lower growth, lower inflation economy. that's good news, the consumer isn't going south. they have money in the accounts. capacity to borrow if you normalize them for the growth and the economy they're in the same place they were prepandemic. >> darryl joins us now at post nine we have had some disappointing economic data points, retail sales disappointing people look at that, it's january, seasonality, pushing it aside but mr. moynihan quite bullish where are you looking at the outlook for equities going forward for the rest of the year. >> we think equities are close to fully priced here pushing up the upper end

we pulled forward almost a full year's return last -- if you take the last 16 weeks, since the october bottom, 14 of 16 weeks have been up and the indices is up 21.5%. on actually earnings down since we started the fourth quarter earnings reporting season, they've been down from that. if you look back and say in 2022, $221 of share for the s&p, tracking this year at 224, so $3 higher but not materially higher to get to 243 is a jump, right the narrative has been about the macro. we need to see the micro deliver this year. we need to see earnings come through and give us the double digit return if they can't, i think that sets the market up for p.e. or multiple contraction, which is where we've been running the last 12 to 18 months. >> if we get there, do we need it from more than just the

magnificent seven. we need it from -- some broader growth, right? everything can't be run by nvidia. >> that's right. >> today notwithstanding i guess. >> good news there, when you look at the industrial sector, health care has caught a bid as of lalt and started to contribute financials are a big contributor, actually. they outstrip their market cap in earnings contribution to the index. getting that broadening out is a key element. you need the consumer to hold up, the market to broaden out. inflation mattered last year, those things matter this year. >> there is still a lingering feeling that a rationality creeps into the market do you discount that completely? >> i think that's a little bit of what we've seen, carl if i take the s&p, depending on where you want to mark earnings 21.5, 22 times we're in the top 10% of current run rate of multiple over the

last 30 to 40 years. you don't get the market trading at 22 times on a regular basis or sustained basis across the broad index. huge push for technology giving us that. but we need to see the earnings come through and the breath widen out and i think that remains the key point. >> you upped energy, is that right? >> still neutral on energy at this point we were long energy a couple of years ago, which turned out to be a great trade right now we have industrials, materials we think is a good value here an underperformer tied to chinese growth obviously and what happens there overweight on health care for quite some time that's starting to play out. we're fading the traditional reits, utilities, some of the laggards on the defensive side at this point. we don't find good risk/reward value there. >> thank you for joining us on post nine. help keep us honest as the year moves forward. take a look at the road map

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welcome back to "squawk on the street". fubo tv suing disney, warner brothers and fox here to discuss julia boorstin with a special guest >> carl, that's right. i'm joined by david gandler. the ceo of fubo tv thank you for joining us on the heels of filing this lawsuit. walk us through what your allegations are, why you believe the streaming skinny sports bundle will be anticompetitive. >> thank you for having me it's pretty simple ten years ago, roughly ten years ago, we set off on a path to create an affordable alternative to cable a skinny bundle around sports.

and for the last nine years we've been blocked from doing so this sports cartel has used different tactics, used their marketing power to impose bundling of channels that obviously don't fit the bundle that we were looking to build and that has led to hundreds of millions of dollars of costs related to that. which has become a heavy tax and burden on customers. they have forced us to pay egregious licensing fees in the order of 30 to 50% plus above market they forced us to include all channels in our basic bundle we call that penetration rates and our rate is around 100% for most of the content and then they also have what i would describe as tyrannical contractual terms that really limit our ability to create

different packages and product features that are in line with some of their offerings, such as hulu so all in, this has really created a difficult situation not only for us but for customers at large this makes, you know, junk fees look like a walk in the park >> but, david, you say this is bad for customers but ultimately isn't the launch of this new streaming option just having more options, aren't more options better for consumers >> well, you know, of course more options are always better and we are -- have always said in our statements that we welcome healthy competition because that always results in lower pricing. but i think we've seen, you know, this before. this sports cartel, this group of programmers has previously launched a product you're well aware of called hulu in 2008 and ultimately they ended up with all the programming and i don't think you can mention one

competitor since 2008 that has launched to compete with hulu directly with the same content across all the different programmers out there. so ultimately, if you look at what we've done the last six or seven years we've been able to maintain prices way lower than cable. this to me is a step in the wrong direction what you'll see is the typical playbook, start with low prices, and then drive prices higher which you've seen with all streaming services over the last 36 months. >> is part of your lawsuit the fact that you want to be offered the same ability to sell these channels or to offer access to these channels to consumers? this is going to be a costly legal battle no doubt. but what is your best case scenario outcome here? >> look, obviously we believe they're engaged in anticompetitive behavior your previous guest also suggested this suit has legs

but our goal is to compete on fair terms you know, i think the government wouldn't appreciate an airline manufacturer selling the same airplane to a regional airline for 30 to 50% above costs. i don't think they would appreciate egregious terms like forcing us to carry channels that aren't even part of some of the programmers' deals we're doing. so this to me is an attack on consumers. we certainly need someone to take a look at this. we see widespread and rampant misconduct across the stacey abrams - misconduct across the space. as you know people are paying for virtual tv and some of the streaming services that it's the same content they're double paying to get

something that's slightly different maybe, you know, a different game but all in is this is bad for customers and we're here, finally, to step up and share everything that we know that has been done to us and to our customers over the last ten years. this cannot go on any further and this is the straw that broke the camel's back. >> david, there's no doubt that your stock has taken a hit on the news of this service we still don't have a name for it or a price tag or launch date yet. but your stock has plummeted on the news the service is in the works. but even before the service was announced. in the two years leading up to the announcement of the service, your stock was down 75%. are you fundamentally, just in an industry that doesn't make sense, does your business model fundamentally flawed and is this lawsuit trying to address that >> our business model is obviously not flawed as you see you see companies that have

focused on direct to consumer services i think i heard you use a phrase rebundling, which i have used as far back as three years ago, in one of my earlier shareholder lea letters. i said we were moving to a bundling world to unbundling to eventually rebundling world. and it works because there are companies like charter and others, the parent company of your network, that makes money distributing content it seems to me we are the only company that isn't able to access a full sweet of sports. taking market shares for many years, up until '23. but we want to do it on fair terms. i just don't understand why this should be the only industry in america that doesn't allow fair terms for all participants it's a very simple story here. you see the financials >> it's going to be a

fascinating lawsuit to cover and to see how this all plays out. david we really appreciate you joining us to talk about this on the heels of filing that lawsuit. thank you so much. >> visit savemysports.com. >> we appreciate the callout thanks so much, david. >> absolutely. thank you very much. this is fascinating. certainly not the end of this. this bundling fascinates me. still ahead the ev price wars heating up as lawmakers battle worries of a slow down. so we'll look whether demand for these vehicles is running out of juice or just charging up. after the break. don't go away. to create new legacies, to transform a company, industry, economy, generation. because grit and vision working in lockstep puts you on the path to your full potential. old school grit. new world ideas.

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shhh... fund investment objectives, risks, [ achoo ]expenses [ flatulence ] it's been a rough ride for shares of tesla year-to-date along with other ev makers as questions grow for completely electric vehicles. let's get to phil lebeau with more on the picture. >> reporter: evs are selling let's be clear about that, but the companies making electric vehicles are in a brutal, brutal price war. look at ford yesterday forced to cut the price on the

mustang mach e $8,100, why because of competition we're seeing it around the world. so we wanted to see what the ev market looks like in europe as well as in asia, particularly in china. in china let's start with eunice, eunice yoon. >> one out of every three cars sold is ev byd had the five most popular battery and plug in hybrids last year with prices ranging from 16 to $30,000 tesla is still on top on the high end with its best-seller the model y. at $37,000 to $50,000. the ranges of the byds are around 250 to 375 miles. the model y in the 340 range evs appeal to china's wealthy, tech savvy and environmentally

conscious. and to those on a budget the government's ratio of evs to charging points is 2.5 to one with economically developed provinces and cities like beijing and shanghai most quipped. now to europe. >> over 20% of new car registrations in europe were electric vehicles. more than 2 million in one year. but the likes of vw, renault, stellantis, mercedes and volvo developing models for this market bet sellers lretail at upwards f $40,000. and the race has heated up, with competition for tesla and chinese car makers seeing the

block as a massive market for new factories in countries like hungary and norway the longest range on sale this year will be able to travel over 350 miles in a single charge this is important as while france and the netherland boast the infrastructure, the yuk and germany lag on that infrastructure there's some uncertainty to the year ahead with the development of a mass model market more important to maintaining demand in europe. >> one more note about evs in europe check out norway it has long been a country where early adopters have pushed evs so the sales grow at a rapid pace one of the hottest markets for evs in the world

right now we take you inside of norway and everything that is happening there. and then you might be saying to yourself, what about latin america, south america those are a couple of areas that are quickly developing a taste for electric vehicles as well. and the chinese have noticed that next week we will be in chile looking at china's auto revolution, not just when it comes to china exporting electric vehicles but china importing all kinds of vehicles. china is looking for markets around the world one of the markets they have developed and where they are very popular, chile we'll show you why next week. >> fascinating stuff, fill i was thinking the european angle and norway when you were saying their adoption rates are high perhaps they're not driving as far distances as americans or midwesterners filling up a car

driving from ohio to florida for vacation, i know a couple of families that do that. but the anxiety people get about the battery or the distance rather when is potentially the next innovation coming when we can go beyond 350 miles per charge? >> yesterday we talked with the stellantis ceo and he said it's coming they are working on an ev that gets 500 miles range it's not going to be here overnight. the other thing with regard to charger anxiety is the fact that our public charging stations in the u.s., they're woefully inadequate in terms of how many there are, there aren't enough and in terms of how quickly you're able to charge a vehicle or they don't work at all. that is front and center for the biden administration but it takes time to build these public charging stations and it's going to be some time before you feel that people are confident to take a road trip from chicago to cincinnati >> just recently i was getting a

rental car and they asked me if i wanted an electric vehicle and i kind of wanted to try it but i was in a place i'm not used to, i didn't know where the charging stations are >> don't blame you at all. >> so i got nervous and didn't try it. >> nothing wrong with that look, when you have a rental car, do you want to go hunting around for a charging station? seriously, you don't you don't. i talked with many people, i'm on the road all the time, renting a lot of vehicles. i don't want to get in an electric car not because i don't trust them to deliver but i'm busy. i don't want to stop or hunt down a charging station. that's the issue >> that's right. we don't want you to miss a live shot because you're stuck with a charger. >> there you go. >> i can't wait to see the live shots out of chile you're in for a lot of fun a good look at the industry around the world still to come today it's all about nvidia set to report q4 after the close. we'll get you ready after a

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welcome back to "squawk on the street" i'm bertha coombs with your cnbc news update president biden's brother is testifying this morning behind closed doors as part of republicans' impeachment inquiry into the president the house oversight and judiciary committees have been focused on james biden's business dealings. the interview comes one week before the president's son hunter biden is set to appear for his own deposition. syria blamed israel for a missile attack in its capital city this morning. it was reported that several missiles hit a neighborhood near a school israel has not responded to the allegations. the biden administration announced $1.2 billion in student loan forgiveness today the relief will go to about

150,000 borrowers who enrolled in the government's new save repayment program. those who qualify must have been in repayment for ten years and originally taken out $12,000 or less you can read all about that on cnbc.com carl >> bertha, thanks so much. big test for the markets tonight when nvidia reports after the bell the street is expecting a gang buster quarter with revenue tripling compared to 2022. stocks up more than 200% in the last year. and the next guest expects them to come in ahead of guidance joining us is joanne feeney. great to have you. looking at charts of nvidia call volatility versus the nasdaq vix and they separated why is the street treating this name so explosively. >> obviously there's high expectations headed into the quarter given what the company has done the last couple of

quarters you have long-term investors which we tend to be and shorter term investors who are not only trading this on the a.i. potential but also on the momentum trade so they're going to be nervous here headed into this call whether they beat or not for this quarter isn't as material for the long-term investor it's what can a.i. do for the next several years we see nvidia well positioned to sell into a supply constrained market and that's supporting their prices and margins and we think there's a lot of growth to come. >> would you call it a core holding? >> it is for our growth strategy it's not for everybody it's a higher multiple, volatility stock, higher risk because of the presence of the short term investors who can make it a little bit volatile and because expectations are so high for a growth investor it's a core holding because of the power of a.i. because we see it as a fundamental driver of the change in this economy and the global economy >> when you're looking forward and you mentioned the a.i. innovations to come in the years

ahead as a long term investor, how much really solid information or solid strategy do you need to hear at this point or is the hope enough and nvidia is the strongest player in the space and as long as there is not too much constraint in the supply that you know, maybe that's where you put your money, even if we don't really know what the a.i. strategy looks like three years from now? >> you know. the difference here, i think, is that we know that microsoft, amazon, google, meta, and others, cisco, et cetera, are building a.i. data sncenters. and we know there's a lot of demand across the economy for bringing a.i. capabilities into analytics, customer service, into new product design. so we know these things. that's not based on hope so we do have indications that

there is a lot more demand for those capabilities than there is currently and supply and that's what gives us confidence that nvidia is going to see strong growth for years to come. there may always be hiccups but we see the demand out there from conversations with companies how that rolls out in terms of the specific applications that's where we have less information right now and where we're watching what the software companies are doing, what the industrial companies are doing, the health care companies are starting to roll out capabilities so that's yet to be fleshed out in terms of details. >> i wonder how you would advise viewers to digest the nvidia print along with all the other important things that are going on, like cap x plans from taiwan s semi, for example. >> that's exactly the connection that investors need to make. so nvidia is constrained on supply tsmc is providing the chip manufacturing but also the ones packaging the chips, breaking

them apart from a wave of individual chips is a complicated process. and we know that tsmc is adding to that capacity this year as they have for several years but really a step change we know that nvidia has talked to intel about doing that packaging as well as some taiwan e companies. so we need to watch to see how much nvidia supply can really go up over the next couple of years and seeing good times in terms of the cap x spend and announcements from those companies so we think that factor eases over the next couple of quarters. >> joanne, appreciate it as always important day, thank you still to come, consumer spend on food as a share of their income hitting 30 year highs as inflation continues to bite we'll get a fresh read from the ground with the ceo of kellogg

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food prices and grocery bills continuing to rise, now 30 year highs by some measures. consumers now spending more than 11% of their disposable income on food, that's according to the usda joining us is kellogg company and chairman, gary pillnik it's great to have you big piece in the journal today looking at the share of income going to food and exploring the idea it's hard to find eras in which food prices retrenched and stayed down. talk about what you said today >> carl, thanks for having me. i prrappreciate it. we think ability our consumer under pressure there's things we can do the cereal category is a great

place for consumers under pressure we're advertising about cereal for dinner think about the cost of cereal for a family versus what they might otherwise do, that's affordable. we talk about making sure we have the right pack at the right price in the right place so having a different size pack that will have a different price point that will take pressure off the consumer while they're shopping toez are some of the things we're doing but in general the cereal category is a place folks might come to. the price of a bowl of cereal with milk and fruit is less than a dollar you can imagine why they might find it the place to go. >> the idea of having cereal for dinner, is there the potential for that to land the wrong way >> we don't think so in fact, it's landing really well right now, carl when we look at our data, we would know that breakfast cereal

is the number one choice for in-home consumption we understand it for breakfast. but 25% is outside of breakfast, a lot of it at dinner, and that occasion continues to grow, as well as the snacking occasion. but cereal for dinner is something probably more on trend now and we would expect it to continue as the consumer is under pressure. >> as a busy mom i've had cereal for dinner more than once recently maybe your marketing is working on me. i'm wondering about the conversations you had to have with some of your bigger clients, walmart, targets as they're trying to offer the best possible prices they can to their consumers that are coming in are they asking you to sort of take some of this on the chin so that the retail price they're selling the cereal for is a little more manageable to the consumer >> courtney, it's a great question that's exactly what retailers always do.

retailers are in the business of making sure they do the right thing for their customers. that's the end consumer. so whenever you want it to have a price increase they're doing what they need to do and we're driving productivity so we can cover as much inflation as possible. if you go back in time, inflation was so great companies had a tough time covering it that's our job as well those conversations have always happened, they're happening now and will continue into the future >> a theme running through a cagney this year is themes that the volume is going to recover in the second half are you in that school >> it's interesting, the way we talk about it, when you look at the curves of dollar and volume, there was a gap particularly last year, as price elasticity hit, we said that gap would narrow, it's happening now in

the cereal category, the cereal category is doing well, it's in growth so the volumes are now rising up to meet where the dollar curve is as well so we think that is going to be the case we think the narrowing continues. >> is cocoa getting talked about all over the place is it considered sort of just a weird combination of one offs or is this something that might -- migrate to other commodities >> the -- we look at a different package of commodities if you're asking about how we look at all of our input costs and managing that we're seeing some deflation in our ingredients in the supplies we use to make our products. but we're also seeing inflation elsewhere. the good news is inflation is moderating in our business. >> i have a question about breakfast trends in general. i know for a long time we were talking about cereal falling out of favor with many consumers opting for healthier options is that a battle you're still

fighting talk about where you were and where you are now when it comes to trying to market frouit loop or frosted flakes for someone having yogurt dinner, but particularly for breakfast, we know people can go elsewhere if they want to. to be clear, cereal is still the number one choice for breakfast consumption in how was but we know there's even more we can do we talked today about the nutrition credentials of cereal. and there are some things that we know while people know a lot about cereal, there are things that they don't know, that cereal eaters tend to get more of the nutrients that you need than non-cereal eaters like fiber and vitamin "d" and folate and get less of social media and saturated fat. what's interesting is, cereal eaters get no more sugar than non-cereal eaters and only contributes to about 5% of your daily intake of sugar each day

so we think it's our job to make sure people understand the credentials of our category. we think that is another tailwind for us. we just need to tell that story. >> gary, appreciate it pretty fascinating, of course, a busy, important week for packaged goods appreciate you coming on with us thanks >> it's my pleasure. thank you for the time coming up after the break, the latest read on housing, as rate on the 30-year fixed erag crosses back above 7 we'll talk about what investors need to know in just a moment. shopify's point of sale system helps you sell at every stage of your business. with fast and secure payment. card readers you can rely on. and one place to manage it all. whatever the stage, businesses that grow grow with shopify. power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis,

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welcome back to squawk on the street mortgage demand taking a massive hit, as treasury yields take a leg higher in february and the average rate on a 30-year mortgage pops back above 7%. let's get to diana olick with the numbers. in this case, 7, not so lucky. >> no, not so lucky. mortgage rates surged last week to the highest levels since early december and that hit mortgage demand hard total application volume plunged over 10% compared with the previous week. that according to the mortgage bankers' association the average rate on the 30-year fixed increased to 7.06% from 6.87, and that's for loans with a 20% down payment applications to refinance dropped 11% for the week, and they were just 0.1% higher than

the same week a year ago, when the 30-year fixed was 6.62%. now, refinance volume had been running higher than year ago levels, even though today's rates are a little higher, but this latest jump clearly made a refinance not worth it for more borrowers. applications for a mortgage to buy a home fell 10% for the week, and were 13% lower than the year before. affordability is already awful, with home prices surging again, due to still-tight supply, and more demand coming into the spring market. and higher rates caused the adjustable rate mortgage, that's the arm share of activity to rise arms offer lower interest rates, but they are considered more risky. and speaking of the spring market, presidents' day weekend is considered the kind of unofficial start, and this new rate level, it's going to hurt toll brothers reported strong quarterly earnings yesterday, but that was during the brief rate dip in december and january. ceo doug yearley did say in the release that they saw strong demand in january, but again, january didn't see a

seven-handle on the rate, so we might be looking at some trouble ahead back to you guys >> i was just going to ask you about those toll brothers earnings those seemed pretty good on the high year end, especially. >> yeah, but the earnings are backward looking we're talking november, december, january, november is when rates were coming down off the highs. we hit that peak in october of 8% so people were then kind of feeling a little better about 7, but then they got into the 6s in late january, in late december and early january, and that's when people really piled in. also remember, toll and all the other home builders have been buying down the mortgage rates they have the ability to do that, and that's been getting more buyers in the door. >> just about 30 seconds left here, diana. the other thing you're hearing about is a concerning drop-off in starts on the multi-floamily pipeline is that going to come back to bite us soon >> it's not concerning now, we have a record number of new supply, new units coming in the market in multi-family where it will hurt is in the coming years that is in maybe 2026, 2027,

when we start to need that supply again and we don't have it in the palestine. right now, we've got a ton of supply and that's why you're seeing rents on the multi-family side ease up a little bit. >> yeah, waiting for that to creep into cpi in the meantime diana, pretty fascinating with toll and all of that thank you, diana olick this morning. still to come, a lot more on the consumer next hour with the ceo of ckelanova, the spin unify kelloggs' former snack segment, in a minute. what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart!

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good wednesday morning welcome to "money movers." i'm carl quintanilla with courtney reagan live at post nine of the new york stock exchan exchange >> let's take a look at where we are right now. all lower, nasdaq composite, lowest of the group, down 0.6%, as we wait for nvidia, the big one of the day the yield on the ten-year, below 4.3 at 4.291%. >> let's begin with the market today. our first guest is still sitting in the recession camp for '24, but does see some hope of rate cuts by june, with value in tech, industrials, and financials joining us here at post nine this morning, global head of