drastically. dow futures off by about 140. now they're up by about 150. s&p futures turned to positive territory too. the nasdaq, up by almost 100 points. folks, that does it for us today. make sure you join us tomorrow. we'll be right back here. right now, it's time for "squawk on the street." ♪ good thursday morning, welcome to "squawk on the street," i'm david faber with jim cramer. we're live from post nine at the new york stock exchange. carl is on assignment. let's give you a look at futures. you just heard becky say it, so you don't need to hear me say it again, so i won't. just look. all right, let's get to our road map this morning. it starts with the fed's preferred inflation gauge. january core pce in line year over year, up 2.8%. on the tech front, we got salesforce out with a beat in terms of its quarterly results.

stock's not doing much. revenue forecast, certainly concerning. we'll talk to jim a lot about that, and we'll talk a lot about snowflake. that stock is down dramatically this morning, both on guidance and the news that its ceo, frank slootman, will be retiring. >> suboptimal. >> yeah. suboptimal. let's start with the inflation data, sort of get that out of the way before we move on. what's your take on this pce number? >> in line is cool. that's the way i look at it. i think that there were a lot of people who thought after the cpi this one would be bad too, and when you look at the progression of the s&p futures, david, it really is incredible how negative people are underneath. i mean, when frank was on, frank holland, this morning, he saw the futures just sinking as if the -- it was a foregone conclusion that the number would be too high. we keep seeing that, which is, i think, one of the puts underneath the market, is the actual negativity of the

futures. >> interesting. and to your point, there is that move up in the futures again, and we'll see. oftentimes, we trade away whatever we were doing in the futures market very quickly when the market opens. but you see that big move up >> right it's the stigma of this market there's a belief that it all has to end i mean, that this whole nvidia-fueled rally, if you want to call it that, and we'll talk about it most of the day, is really just about people saying, oh, yeah, a.i., i don't believe it and by 9:35, they're temporary believers. they borrow the belief they're renters of the bullishness. they're bull renters >> bull renters. well, come on. >> that was good i just thought of it >> i liked it, but we've also had a significant rally overall in the market. >> right >> and even this year now in broader market -- >> the s&p -- and that was something that frank showed around 5:05. if he said, you look at the s&p,

the weighted -- >> the equal weighted, you mean. >> equal weighted. it's now good. and i thought that was a very significant -- i'm glad you saw that what that said is, stop it with the mag seven, which is mag six, which is mag five, and focus on the fact that sherwin williams hit a high when he did that this morning, i said, yes. let's go back to the idea that there are individual companies like home depot that reported. forget all this stuff about how their forecast wasn't good got to get away from beat and raise. this was the first quarter i've decided to rebel against the terminology the street uses. >> year to date, again, the mag seven is, as you see there, up 13%. really, it's not seven, though >> no one's complaining about apple. it's 9:30, and no one said apple has lots its mojo. >> two interesting stories, apple and also alphabet, which we have been talking about as well, which i find fascinating right now. >> and coors >> coors, really

>> kamurs. >> oh. >> no, we'll get to that when you see something like that, you forget what's going on it's a chemical company where the ceo, the cfo, and the comptroller are suddenly on leave. >> oh. >> makes snowflake look real good >> let's talk about snowflake and salesforce as well, of course by the way, both of which their ceos were guests on "mad money" last night >> we had three ceos last night. two were from one company. >> let's start with this this is the biggest loser. it's twofold it's slootman unexpectedly perhaps, and then it's the guidance as well, the shortfall, a sharp decline in fiscal q1 year over year and then revenue, 8%, but the shortfall, really about the guidance in fiscal year '25 >> let's understand that slootman took the company to

more than $2 billion he has told me on occasion that $2 billion is his magic number to go, which was the case of servicenow if he bought servicenow when he left, it was at $67 and suddenly gone to the 7 hundreds he's also criticized me when i've tried to pin him down on the guidance i said, you've given weak guidance >> and he said, the forecast is the forecast >> he reiterated to me last night offline, don't forget the guidance is the guidance >> that's not particularly helpful. >> you want to take him on >> 22% revenue guide is not what people were looking for where investors were paying as much as 18 times sales for >> actually 20 >> okay. >> they have this model called iceberg that they're switching to, which is a cheaper option, which causes guidance shortfalls, so they're changing the model. what i thought was interesting is you never call a memo -- never call anything because it's

project hit iceberg. >> it's "titanic." >> we have to go to ramaswamy. he did do great at google. he took a google ad from $1.5 billion to $100 billion we like that but david, i don't know whether he's oriented towards sales, which is what slootman is. he's a great sales person for the company, or if he's not more of a data scientist, and you need sales >> right you had both ramaswamy and slootman on. >> yeah. >> let's listen to what they had to say when you talked about this transition from slootman to ramaswamy as ceo >> i mean, i don't want to be one of those quarterbacks who doesn't know how to get off the field, you know? i'm making room for bigger and greater talent >> well, frank is still going to be chairman on our board, and i'll be talking to him regularly. he's still a big fan of the company and all of us, and we are all truly, truly grateful

for what he has made snowflake to be. >> it is unexpected. let's not fool around. >> it's unexpected >> last summer, he thought, don't worry, he's sticking around he's a giant and everyone knows he's a giant. his book, by the way, cowritten by him, is extraordinary, about the -- about what's going to happen with data, very prescient. but david, in the end, you can have both a revenue guidance shortfall and an unexpected ceo departure of the ceo of a magnitude of slootman and not expect this exact decline. it's a correct read. >> what is behind it again, it's slowing growth >> exercise all his options. >> no, no, no. not that what's behind the slowing -- what's behind the guidance being below what many had anticipated, given what has been a very strong growth rate, which is, of course, brought a multiple to revenues, 18 or 20 times, whatever you want to call it but obviously, it's quite high but was justified by that growth rate no longer is what's going on?

>> the consumption model they have is a good model that's why you rent is cloud that way, you can find out whether you really want to invest >> in very short amount of time. >> they obviously want longer, but yes. but david, they were growing in the 30s, which is why people were willing to pay that 18 to 20 times sales >> why do you know why? >> it's demand weakness. >> all right, well, that doesn't sound good to me >> the trading down to a cheaper product. no, david, that's not plus 46. it's minus 46. >> i understand. >> i want to say it's -- >> does the demand weakness come from their inability to make sales somehow? >> change the model, yes, you could argue that, that there's a slowdown among -- there's a slowdown, seasonal slowdown in demand they called it seasonal. i did not expect this was a season that would produce a slowdown plus don't forget we have an extra day. >> we have an extra day -- >> which is today. >> today is leap day >> 23 points of this was

slootman leaving i don't want to be joking about this, because a lot of people own this stock 23 points is slootman leaving, and 23 points, i think, were the change in the model to a product where the margins aren't as good >> what happens now? how long are these guys in these so-called penalty box? how long is it going to be until -- if we see a rebound in these shares you had to get some sense the growth rate is going to be above 22% for that next fiscal year. >> bull case is okta that's an identity company that was hacked -- it was successfully hacked by bad guys, and this was the quarter where people chose to forget about it. if you zoom in on that decline, you can see that things came back rather fast, and todd mckinnon, one of my absolute favorite ceos, was talking about how -- he didn't say this in so many words, but they used their own hack to be able to tell a better story about what they can

stop >> okta, a strong performer. i would like to see a longer chart. you asked for it >> i'm going to give you one just based on that go by zscaler. they're the companion company. zscaler does identity too. that stock will be up very nicely today that's my gift to you, david >> i guess that's the one-year i can never figure these darn charts out >> you can't see the right things >> it says it there. i don't know i give up. >> we see when they were hacked. the fact that people forget about the hack so quickly, but i don't know in this case, slootman -- >> whoa, whoa, whoa. we got to move on. >> i'm saying the good news -- >> we got to move on >> snowflake would make up but i think that ramaswamy is not mckinnon, whom i like very much my daughter wanted to replace mckinnon, and then she was willing to be a c.o.o. >> we've got only a couple of minutes because we got to get a break and then getting to phil

lebeau >> we're busting breaks. >> no, we're not busting breaks. talk to me >> mr. revenue >> it's not a pretty picture on that front either. >> your forecast is your forecast >> nobody's raising revenue for linear cable network, my friend. >> no, that's paragliding. >> nobody. that's not happening we'll get to paramount later let's talk salesforce. >> thank you, because this is one of those incredible stories where marc benioff comes on red hot, as you'll see when we play the clip, and then his c.o.o. comes on and says, it's just okay i'm going to take marc's view as the ceo as more important than the c.o.o.'s the c.o.o. is talking about, maybe we have green shoots marc says it's 180 degrees from when it was not good >> let's listen. >> marc is the most -- he's incredible promotional. >> let's hear benioff's view on the quarter. >> this stock is right to be up. >> we just finished up a year at almost $35 billion in revenue, and now, we see us moving

forward as the third largest software company in the world, delivering tremendous amounts of customer success, and jim, it's really about exactly like you said, customers giving them what they need right now and that is the ability to manage this huge amounts of data that they need to deliver high-quality artificial intelligence. >> i have this one cold, man >> i don't know what you're doing. >> i'm getting my -- okay. >> not everybody's a believer. bernstein is not particularly -- >> cut me a break, bernstein get on board the free cash flow here was up, david, the real number, up 27% the fact that he got stock -- everyone's worried about this stock being given out. >> stock-based comp. >> yes he's cutting that down, and put a dividend in, just like the -- just like mark zuckerberg did. the gold is the data in this case in other words, he actually referenced jensen. of course, if you don't reference jensen, get the hell out of the room, okay? but i thought that what mark was saying was the data cloud is going at a level that i can't

believe with higher margins. this quarter was exceptional, and i think -- >> they continue to be on the -- >> 7 trillion records this quarter in just the data cloud alone. unbelievable a.i. transformation. >> the margins continue to be strong is what you're saying >> i love margins. >> listen, it's the same thesis that, frankly, you know, jeff smith had some time back when he was the first of the activists to get in there. >> yes >> pressuring the company. this was the fall of '23 >> mark embraced the activists >> and he continues to talk about things such as when he tweets, he talks about revenue and margin trajectory in a way that he perhaps hadn't as much in the past. >> exactly great read of the situation. >> pricing power and margins that continue to improve that said, bernstein, for its part, and i know you discount this to a certain extent, says, you know, they just said the overall roughly 10% subscription revenue growth, total revenue

growth, 200 basis-point margin improvement, a bit lower >> i don't know what they were doing. they were obviously using a number that they wanted the company to fail. i'm tired of that from wall street david, i got to tell you, when you listen to marc, what he's saying is there was a tremendous decline in interest post-covid and now, it's all the way back, and then some, because of a.i. and that's why we're going to have to continue to talk about a.i., because he is the first time i've heard from any executive, empirically, this has improved since a.i everyone else is just saying, hm >> i don't think there's any risk of us not talking about a.i. .we got to take a break here when we come back, china's auto revolution is coming to south america, and phil lebeau is on the ground in chile. phil >> david, i'm surrounded by chinese-made cars and suvs this is from great wall. we'll talk about that after the break. there's no shortage of chinese

vehicles for sale here in chile where one out of every three new vehicles sold comes from china, and when we come back, wait until i tell you the price of this dfsk suv. you will be surprised beyond belief that's coming up after the break. fresh, warm hot dogs! when i'm not selling hot dogs, i invest in a fund that advances innovations like robotics. fresh, warm hot dogs, straight out of my torso! one for you, one for you. oh, you're a messy one. cool, right? so cool. anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. hot dogs! fresh, warm hot dogs! before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

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amazing. harness the power of xfinity internet and stay connected to the things you love. ah, they'll be like this for hours. hello dad, hello dad, hello da. uh-oh. good bunnies. ahh! china has become the world's largest auto exporter, and it is just starting to ship electric vehicles causing concerns to elon musk and tesla and a number of other car makers. phil lebeau is in chile to explain why that country and others are reluctant to restrict imports from china phil >> david, they love the pricing. that's the main reason why you don't see restrictions, whether it's an electric vehicle or more commonly the internal combustion engine vehicles. 71% of what china exports, and here are the three largest auto

exporters in the world, china surpassing japan, germany at number three it's the price of the vehicles coming out of china because of the size and the scale and the cost efficiencies or what you would say is cost advantages that they have i want to show you some of those cost advantages. we are at an auto mall, truly an auto mall, where every grand, even gm and ford are here, toyota, hyundai, and a ton of the chinese automakers this suv is from dfsk, which is a subsidiary of dong fang. take a guess at how much it costs, guys. $9,200 equivalent u.s. dollars $9,200 equivalent u.s. dollars here's another example that you'll say, it's easy to see why somebody in chile would buy a chinese vehicle versus a traditional auto maker that we see in the united states compare the price of a ha haval jolion with the toyota corolla cross. it's a $6,000 difference in the

base price when we talk with buyers, almost all say the same thing the quality is good and the price is right >> translator: because of the performance, and it's very cheap in comparison to other brands. so, that's why i prefer this chinese brand. >> so, you would buy chinese again? >> reporter: yes, yes, i definitely prefer a chinese car. i've traveled 500 kilometers, and it's very safe >> as you take a look at shares of byd vs. tesla, and i know byd is the one chinese auto maker we talk about the most, regular, tesla still outsold byd in terms of pure electric vehicles last year, this year, it is expected that byd is likely to pass tesla in terms of sales. by the way, they've just begun selling both teslas and byds down here in chile, and while this is not the largest market, guys, what we're seeing in chile, we're seeing in australia. we're seeing in israel we're seeing in countries around the world. they're not the largest auto markets, but they are markets

where the chinese, because they continue to build, and they need to use their capacity instead of shutting down assembly lines, they are exporting, and what you're seeing is more and more people saying, i like what i see, and i'm going to buy it guys, back to you. >> yeah, phil, it's fascinating. so glad you're there to bring it on the ground to our viewers here what is the possibility of the chinese getting closer and closer to our market mexico, obviously, comes to mind and/or even building facilities in mexico so there might be an opportunity to import into the u.s. >> that's the key, david within the next five or six years, you will see several automakers likely begin final assembly in mexico why is that important? right now, if you build a vehicle in china and export it to the united states, there's a 25% tariff if you were to build in mexico, because of nafta, you could bring it in under the nafta guidelines, even if you set a 2.5% tariff, it basically

eliminates that tariff, and because of the cost advantages that china has in terms of its scale, the concern is, they could come in with entry-level vehicles like this suv, and i know people will say, americans won't buy chinese. you know what? you ask somebody, do you want to pay $9,000 for an suv or do you want to pay 19 or $20,000 for an suv? no contest that's what we found with everybody we've talked to down here brand loyalty goes out the window when you have that kind of price advantage >> phil, this report is unbelievable by you, and i want to point out that if i had to buy a volvo here, many americans would not know that's chinese. so, let's put yourself in the shoes of the president you want to get the cpi down, but you're the union president this would smash the union we would buy volvos because we wouldn't know the difference this is a horrendous situation for someone who's trying to help the unions, isn't it >> it's going to be tough for them to figure out what they can do, aside from trade restrictions we heard senator josh hawley out

of missouri say yesterday, there need to be trade restrictions put in place if chinese vehicles are built in mexico. we're going to hear more and more about this in the years to come, because you're not going to be able to bring down the prices much more than what we already see, and yes, there are efficiencies and a few other things the big three are working on, as well as foreign automakers building in the u.s., but david, the bottom line is this our costs cannot come down as much as the chinese are enjoying right now as far as a cost advantage. >> yeah, which has been the case in so many different industries and certainly it's going to be a struggle phil, thank you. obviously, we're going to hear from phil throughout the day great reporting from chile we're going to take a quick break here don't go anywherement of ♪ ♪ every day, businesses everywhere are asking: of with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring

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opening bell, four minutes from now as you take a look at the potential s&p gainers. we'll get some best buy numbers and a lot of other earnings as well when we come right back

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. all right, let's squeeze in a very quick "mad dash." we've got an opening bell. >> well, the question is, david, boeing, the justice department is looking into it to see whether they violated the deferred prosecution agreement of a couple years ago. and they had the settlement. it was meant to be, there was

going to be compliance the question is, had they deceived the regulators? david, that is criminal. that is not civil. what i think is most interesting, the justice department looked into it, and we always want to see where. the answer is it's the seattle office that's where they make the planes that's trouble someone could see the faa in the actual manufacturing of the plane. >> boeing will be one of the names we keep an eye on. you can see at the realtime exchange, back at our headquarters, a lot more green on there >> that's the pce. >> not a surprise. here at the big board, doing the honors, rayonier, a real estate investment trust celebrating its investor day over at the nasdaq, st. jude children's research hospital doing the honors >> that's great. >> number of earnings we haven't got to i don't know if you want to start. best buy, hp >> best buy is a case where you just basically say, you know what, not as bad as we thought i still think that best buy is much better run than it used to

be the big appliances aren't selling well we know that from the whirlpool conference, full-day conference, but david, i see pc green shoot, and i think we have to talk about that, because it also says that, don't give up entirely on hp, and buy amd, which is the winner if you think there's green shoots for the pc. >> well, that gets us to hp as well, and we're waiting on dell. >> hp is every -- hp and dell are going to be the most difficult part of the market, because michael dell has a very good quarter and says there's a lot of good consumer spending and mostly corporate dell. and hp thinks that the corporate is weak. and the printer market is disastrous, and by the way, the printers, they're talking about japanese competition, like what we used to hear. >> the old japanese competition from the late '80s >> exactly right we don't talk enough about japan, obviously, because japan is in an ascendant stage, i

think because so much money is coming out of china which is regarded as a worldwide negative actor. >> the japanese stock market has hit new highs since 1989 that said, they have a demographic issue in japan that is nothing short of disastrous >> true, except for china's may be even more disastrous. >> perhaps, but they're so much larger japan's population declined, i think, 5% last year. i mean -- >> our country is concerned about immigration, but you do need demographic growth in order to sustain a growth economy. >> yes >> the $36 trillion treasury market, huge day we can only grow our way out we can't tax our way out >> we need as much economic growth and therefore higher revenues with which to tax the japanese do not have significant immigration, so they -- longer term. >> they never led immigration.

they've been anti-immigration since time immemorial. there's a belief that the dollar is backed up by the full faith and credit of a country that is so indebted that i'll just keep bitcoin as a part of a diversity strategy >> yeah. >> that's why i think -- >> that gives you a sense as to what has happened in japan over the last 44 years. >> david, you see that peak? that's when they bought rockefeller center >> i remember it well. i was a reporter covering banking when -- in the late '80s when sumitomo, mitsubishi, long-term credit bank, mitsui, they were all huge competitors to our then money center banks all of which, basically, are now one bank called jpmorgan chase >> yes that was a period where intel was challenged by many different japanese semiconductor companies, and we were all concerned about japanese machinery crushing caterpillar >> kind of shows we kind of pull

through, don't we >> yes >> are we going to be able to pull through against these chinese automakers, though >> that is going to be a question about, i continue to come back to volvo, because volvo is the way to get it in. that's the big door. >> as you point out, it's a chinese company. greeley. so, why is that any different? >> well, because enough of it -- >> do they have -- >> they can make enough of it here that it would be regarded as an american car >> i see >> that's the back door. that chile report is -- i find it frightening, because what that says is that you could have an unbelievably great cpi, but wh what would you do with detroit in that scenario >> you know, and again, what's interesting from phil, and you hear it a lot, is the quality of the vehicles has improved markedly the chinese evs i'm talking about, has improved markedly over the last number of years, so it's not just price, but it's also that there's almost an

eequivalency in terms of -- >> this is what happened with toyota they came out with lexus, and people were shocked. the lexus came and beat mercedes-benz and bmw in quality and next thing you know, toyota became the most successful auto company in the world, and that chart tells you everything you need to know about these -- what could happen to china. >> i don't know, lexus was a piece of crap. >> i think you're an outlier david, we haven't talked about paramount yet, and i think it's time >> would you like me to? >> yeah, because, cop, fire, hospital, it's all yours >> paramount shares are up we focus on it a lot more than we we should. stock is down 20% for the year a very small company, $7.6 billion market cap. but the stock is up. it ends up being, listen, they stop spending money, and that helps. >> the writers strike again. >> certainly helps when you can -- to put up $558 million of net operating cash flow and

$443 million of free cash in the fourth quarter and they are talking, obviously, very positively in terms of their ability to get their direct-to-consumer offering in the form of paramount plus to profitability, having sustained the peak and losses much earlier than they said they would. bakish was on the call last time i talked to him was right before the super bowl. the advertising market remains a real question mark and not just for paramount but for some others, at least in that sort of linear business. take a listen. >> the ad market was challenging in '23, and still isn't exactly where we want it to be but we're encouraged by some signs of stabilization, including healthy scatter premiums at the market level, many people are talking about increased supply and competition in the digital ad space, but what's not being discussed enough is the opportunity to grow the demand side of the equation, which is a big focus of ours.

>> you know, still to come for paramount is a big renegotiation with charter, one of the big distributors, remember, of course, that charter-disne dispute that took place last fall, last september, which we covered quite closely. how is charter going to treat paramount? what are they going to be able to do in terms of their carriage for networks a key question as you take a look at charter shares and then, of course, the continued, at least, conversation around the change in control >> right >> which namely is focused on red bird and david ellison and this potential bid for nai, the control shareholder in paramount, but it would not offer a significant or even anything conceivably to the common and would involve a plan in which ultimately you had to raise a lot of money, so you have to actually sell and subscribe to a lot of common stock at a certain price to

raise as much as what i believe would be $3 billion under that plan shari redstone -- >> that's chimerical >> red bird and other investors would step up for it you would also, under this plan, merge sky dance, which david ellison controls, the studio he controls, has had great success, into paramount, but you need a special committee vote of the board of directors of paramount. would you get it if you're not offering anything for the public shareholders i guess all of which is to say, that seems to be the main, if perhaps only deal on -- potentially on the table it's moving slowly >> well, david, you think that -- >> don't expect anything to come to fruition in the near term there. >> this is a fraught situation then the direct-to-consumer, we're talking about the loss and shrinking, but the size of the losses is so big versus the balance sheet.

>> yeah. direct-to-consumer continues to be the key question not just for paramount but for warner bros. discovery and its max product, for disney and disney plus, in terms of can it really get to those double-digit returns and of course for our parent company, comcast, which continues to spend without getting, obviously, generating significant returns as yet, and certainly nowhere near profitability for peacock. so, we're going to see consolidation in some form or other over the next year or two, but it gets very complicated, in part because of the regulatory aspect of it as well in terms of how it's actually going to happen it needs to happen >> again, parent company of our network, which has a very low pe, arguably an 11 pe, comcast, goes up on paramount's direct-to-consumer numbers this is kind of a -- comcast is a broadband company >> it is broadband is the key product, and so is charter. >> broadband and technology.

>> wireless plays a more important role for both those companies as well than it did previously there are challenges to revenue per user we saw that with charter, down sharply this year, not growing subscribers at a pace that anyone would certainly hope for. and the challenge from fixed wireless that i have talked about a lot, jim, which has sustained its challenge, perhaps, longer than many had anticipated, given the capacity constraints. >> that's got to run down in order for those stocks to move >> yeah. >> meanwhile, david, people are thinking -- i'm sorry. >> let's get back to big tech. i'd love to get your thoughts. apple, yesterday, the turn around a little bit, the annual meeting, the continued discussion of what is to come when it comes to generative a.i. and the hopes, i guess, of those who were long the stock in terms of what that's going to mean be f -- for apple. >> i was talking about apple, and i say, own it, don't trade it i've said that for 10 years or 12 what i worry about are people

who sell it during a lull while the company is working on something that then turns out to be pretty good or we get a little bit of uptick in china, which we have definitely not had, according to hp, just as recently as last night i know this is going to sound strange, but there are companies where you really can't find out what they're doing, and apple's the one no one is -- it's a fight club situation no one's allowed to talk to me about apple. when the sports app, which i've wanted for a long time, came out, it came out -- i didn't know they were working on it i said, when are you guys going to develop a quick sports app? the answer was, jim, check your cell phone this morning. in the meantime, they do so much artificial intelligence on music, and no one talks about that go to your phone and look at -- don't look at jim's music because that's my music, or look at the personizaalization of pho they've got for what happened that day in your life. that's so much a.i but you know what? tim cook doesn't come on and say, have you seen our a.i.?

he's not a combative individual. >> no, but the bull case, so to speak, is that you will get a significant advance in terms of generative a.i. being made a part of the 16 >> the edge. >> and -- at the edge. and creating, frankly, an entirely new ecosystem on the app store as well. >> correct >> and you got a billion people with some sort of subscription product, add-on subscription product for it, and it can change a lot >> right, because then you start thinking that's how you get the price earnings multiple that has, which used to be at 16, and it leapfrogged over the gold standard of consumer products, which is procter >> and it's -- to be fair, its multiple is fairly high for a company that has not had a significant growth rate for some time >> that's true, but when you talk to tim cook, who is an unbelievable person to talk to about bigger things, don't want to be pigeon holed into thinking in the four walls of the spreadsheet, he would remind you, jim, it's not a consumer company. please it's a technology company that

happens to have the highest satisfaction rate for billion people who pay us on revenue, and i was looking, yeah, last night, i paid them $35 at 3:00 a.m i don't know i paid it to them. just, like, oh, i paid them $35. not to be too glib about it, but you take something like when i saw tim cook unveil at the old gm building, the vision pro, he said, look, this is it this is going to be the next big thing. and you look at the vision pro, and you realize what you're seeing is not a mock-up of a product but something that is going to be the beginning of the way you watch sports of the way you watch movies. and i believe in it. now, those people who say, jim, it's a $3,500 product, forget about it that's a work in progress, to get people to think about what to do with it. they reinvent themselves because they're a tech company this is not new and improved thai, which i doubt really looks new and improved

it is apple. >> when does a stock -- when does the stock conceivably start to move on the real prospect of something coming do you have to wait until you see what the product is? >> you do, because let's say you speak to the component companies. i have good relationships with all the component companies. i say, how's samsung how's apple? excuse me, i just mentioned apple. >> they are all under a cone of silence. >> yeah. and so it's very hard to get a read that's why i always dismiss all these little stories about, they changed suppliers so therefore must be doing badly, because the suppliers just get the order they don't know. they change suppliers. there's a lull in product right now. they would tell you that they're not -- remember, they guided to this quarter not being as good as we would have hoped but the service revenue is going to cross the combination of the -- of everything, of every device, everything other than the phone. it will be bigger than all those, and that's the hope they don't want to talk about

that as being the hope that's me. and then what they want to talk about is indonesia and brazil, and you google and add them up, and sure enough, they're equal to china, but no one thinks like that people don't realize, when you turn in your phone, it goes to brazil it goes to these countries, and the phone's pretty good. then you take the service product, and that's how the revenues go up >> between now and, when is it, june when we may hear something? we're going to be talking a lot about what may be coming in terms of generative a.i., addition to the iphone, but we're not going to know. maybe there will be some stories along the way. >> we got a good report yesterday, bank of america and merrill saying that china, the -- that the brand recognition and love has come back, but david, china remains the biggest black hole in the world right now. we have no idea what's happening. and it's a little difficult, because so many companies really

depend on china. >> they do there was a very interesting report yesterday, touring just completely empty cities, essentially. amazing. >> they need capital coming in from around the world, and they're not getting it and president trump and president biden aren't giving it to them. both presidents really want to starve china >> yeah. >> watch the semiconductor capital equipment companies because that's where the intellectual property is in the country. watch lam. watch applied materials. that's -- people don't understand those are where the intellectual property is. >> let's get to rick santelli. we have some more economic data for the markets to digest. chicago pmi, rick, right yeah, chicago pmi and it's a february read, david, and we're expecting a number around 48, a miss here. 44.0 happens to be the weakest level since july of '23 and a little noteworthy here is this is the 18th month where we've only had

one reading over 50, and that was in november of last year 18 months with only one read above the expansion-contraction line of 50 now, we have important data out this morning, and if you look at intraday chart, the initial response in yields, it went from 4.30% to around 4.27%, but it simmered a bit, yields moving much lower now as you look at the two-day chart. we're below yesterday's low yields it seems the data coming utmostly as expected over time, seems to have a more soothing effect on interest rates and potentially isn't a negative for the fed. "squawk on the street" will return after a short break

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let's get to it. what do you have for stop trading? >> before you sell hp, which is hp 2. >> hpe and hp 2. >> this is the company that is the laptop next week, 15 minutes, 15 minutes might be all it takes. jensen speaking of things to come. >> jensen huang of nvidia is speaking at what >> their vegas user conference. >> at hp >> hp. >> and what's the reference to 15 minutes >> he will be on stage for 15 minutes. >> and you think what? >> well, he's -- this is what you need these days. you have to demonstrate ai i told you how ai will work,

speaking to your pc. that's jensen's chip in -- >> you think there will be a demonstration. >> yes they're all going to be there. you need jensen huang. all you want to do is go back to when frank slootman did interview jensen huang at a user conference, the blind side of jensen, to see when he speaks what he can be like and how amazing. >> okay. >> people should watch it. he's amazing that's why - >> that's a head's up. >> there's a reason why nvidia -- jensen huang, he will say the team is good and they are, but he's incredible duo lingo the star of the day, the lessons here are extraordinary number of people who are taking the product i have hormel on tonight, the star of the s&p. >> duo lingo is one of the stars of the day. >> yes. >> and actually shockingly good. >> jeff martin, delivered the best of the utility quarters

i've seen and jim snee, the stock up the most today in the s&p. i think that there's a protein revolution to go with the documentary, people are not realizing that you need protein with these drugs or you get frail very quickly. >> yes. >> loss of muscle mass with the glp-1. for a certain cohort above a certain age where it's harder to build muscle mass they can become - >> you mentioned oprah off weight watchers. >> shares down this morning. >> diet and exercise have failed america. >> failed you. >> i'm working out today at 4:00, and i'm proud of it. >> as you should be. >> thank you. >> that does it for another edition of this hour of "squawk on the street. we'll see jim cramer later on "mad money." you'll see me in the next hour we have breaking housing data when we come back. don't go anywhere. "what should we do with it?" bacon and eggs 25/7. you're darn right.

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good thursday morning. welcome to another hour of "squawk on the street. i'm sara eisen with david faber. live for you as always from post nine of the new york stock exchange carl is on assignment. take a look at stocks and bonds rallying off that pce number which was hot, but that was expected and so it wasn't worse. the market liking it the s&p 500 gaining about a 0.5% communication services in the lead with real estate, technology and consumer discretionary. the only two sectors are down are staples and health care. part of the story is the bond rally. we had seen a back up in yields into this report and goes the other way today. the 10-year yield lower 4.23%. the 2-year yield 4.67% we're 30 minutes into the trading session. here are some movers we're watching fresh results from a few of the cloud names. salesforce, snowflake, okta on the move more on those numbers and what to do with the stocks in a moment don't miss the ceo of okta on

money move years hormel and papa john's both in the green after strong results sales coming in higher and both names, anheuser-busch is lagging after the revenue and profit missed estimates we're watching bitcoin because it is headed towards its best month since 2020 up 50% in february alone it's incredible actually it's more than $62,000. >> quite a move, yeah, approaching 63 let's get to pending home sales out just a moment ago. diana olick has that for us. >> reporter: david, pending home sales in january dropped 4.9% month to month according to the national association of realtors that's a miss. the street was looking for a 2% gain sales down 8.8% from january of last year. this number is based on signed skrooktsz -- contracts so people out shopping. when 30-year fixed started, down

from the high of 8% in october, off the lows of december they rose a little bit during january before, of course, crossing 7% in february. now the realtors chief economist wrote consumers are showing extra sensitivity to changes in mortgage rates in the current cycle and that's impacting home sales. regionally, sales rose month to month in the northeast and west, but fell in the midwest and south. sales down across the nation year over year there was no mention in this report of inventory, but redfin in a separate report said new listings rose 13% during the four weeks ending february 25th compared with the samea year ago that's the biggest increase in nearly 3 years, but pending sales for that period dropped 8% so there is your higher mortgage rate effect. >> got it. thank you very much. diana olick. adding to that the inflation report which was very highly anticipated today which we should talk about. the pce. it comes from the commerce department the fed's preferred measure when they target 2% inflation

what did we get? what we expected and why the market is treating it as good news is it good news? i think the most important thing to watch what the fed will be looking at is core pce, prices excluding food and energy and look what happened in january it ticked up 0.4% higher than where we were. it was where consensus was, but that is something that is going to get the fed's attention on top of a hotter cpi and ppi. >> 2.8 year over year. >> we're in the 2s we're looking pretty good, aren't we? even with hot reports we got - >> you look at the breakdown one thing that could be worrisome to them we saw a 0.6% month over month increase in services inflation. goods are deflating. negative 0.2%. that's the hot part of the market and a pick-up, that 0.6%. it's about the highest we've seen in a monthly read in a year so they're going to be watching those trends we're not back at target yet sure, it's good to see a 2% on

the year over year number but the reason the monthly is so important because it shows the month-to-month change. the annual incorporates all these base effects in it yes, the white house is going to say we're back in the 2% range, but the fed is going to be a little more cautious i think at the very least, david rosenp berg put it well this morning, it justifies why the fed had to push back on aggressive rate cut expectations going into this year they were well advised to do so because they want to continue to see progress and make sure inflation isn't flaring back up again. >> right so how do we put it in perspective now that we've gotten all the key metrics for the last month >> we wonder whether january is an anomaly and want to see the data on prices for february which we'll start to get. >> we're data dependent. >> so is the fed

january has weather which some think was a lot of the reasons of some of this. >> you have retail sales in particular you showed us that yesterday. >> walmart thinks that was a weather affect on retail sales and there are price adjustments that come with the beginning of the year, so we want to make sure we got other data, though, just to add to the overall picture today. personal income strong, up 1%. that was, you know, thanks dividend growth and we're seeing wage growth. spending was okay, not great but the spending if you break down the components, it's in services it's in health care services, utility services, portfolio management because stocks are gone up a lot. it doesn't -- nothing here changes the overall macro narrative that we have right now. i would also mention jobless claims because they ticked up a little bit to 215,000, but they're still at low levels. it's not any mass stress or layoffs in the industry. i think the bottom line is we're going to have to wait for

february data on prices and the economy. >> when does it start rolling in. >> next week we're going to have -- next week we'll have a jobs report first week of march and we'll see whether this acceleration both in price and some of the spending components of january calm down enough. there's a fed comment to mention that happened overnight from the new york fed president, always important, john williams, always a voter, on key talked about sort of the balance of where they are right now and what they need today listen. >> like traveling to the moon and back, inflation shot up and then it's come back down it's with the apollo missions it's a safe return home that's essential. while we've seen great progress towards achieving our goals, the journey is not yet over, and i'm very focused on making sure we complete this mission successfully >> i love when fed officials use like analogies to make it more accessible i think the main point there was

that the journey is not over. >> did you read this piece in the journal on waller. >> on waller >> about how he is being proved right, even though larry summers had come after him, for example, that the way you measure vacancies, that a rise in rate was not ultimately result in layoffs, but simply fewer vacancies. it was interesting apparently his voice is becoming more significant on the day. >> the market pays close attention to him he was early first of all on the more aggressive rate hikes when they did that. >> right. >> he was early on slowing down the rate hikes so yes, he's become a little bit of a thought leader, and that makes sense. his background at the st. louis fed in the research department, and they have all the data, the fred data, good charts and economic data they have there. he's been leading on that front. what he's been saying lately the patience, the wait and see, before the fed makes its next move. >> you like to keep an eye on

credit card spending you do that and you have some new data for us as well. >> bank of america had weekly data up 0.4% last week that was good. robust they do the weekly numbers it was down the week before. the spending i looked by areas, what's driving the spending right now, groceries are strong. the other section, general merchandise had a rebound. that's been negative for a while and last week it was positive. maybe some bottoming it echos what we've heard from walmart, for instance. and online spending continues to be strong. that was a decent number then some of the commentary we've gotten from various companies. we've had a lot of retail. let's hit best buy that was a good number and been under pressure the category for the last few years here's what the ceo is saying now. >> we are optimistic that several indicators will continue to show favorability this year these include decreasing inflation leading to the lowering of interest rates, encouraging trends in consumer

confidence and the beginning of a housing market rebound we remain confident our industry will grow again after two years of decline simply a matter of the timing. >> very different, looking forward to lower interest rates. that's been an industry that's been in recession after everybody spent involved their electronics for the home and covid. the numbers were good. the stock is up. the other one i want to highlight is papa john's which spoke about the consumer and the changing winds right now >> the consumer has changed a little bit i think we're seeing some softness in general and the industry particularly in january. we have seen some strength in february we were the number three brand ordered on uber eats for the super bowl so, you know, despite some challenging, you know, situations in january, we've seen some resiliency. >> mostly good commentary i

would say today. amc had good commentary, monster beverage at least the positive notes on the consumer. >> what were the number one and two brands on uber eats from the super bowl now i want to know. >> i don't know. >> i don't know. >> we can probably look that up. >> or somebody on twitter will let us know. >> did you order for the super bowl >> no. >> we ordered pizza. >> we go to a party. >> we host. major averages on pace for their fourth straight month of gains. can the rally keep going evercore's julian emanuel has a target of 4750 joins us at post nine you have to raise that target now that we've surpassed it? >> i think we're going to hold on to where we are for the time being. if you look, this has been breathless rally since the october lows four months of gains you look at a lot of these statistics, 15 out of 17 weeks, kinds of things you haven't seen more than twice in an investing lifetime we think it's a time to catch

our breath and realize there's a lot of good news baked in, in a year where, frankly, what a we're seeing is a reluctance to short by professionals, the likes of which i've only seen after the meme stocks and then, of course, earlier in the decade in and around the tech bubble, which gives us pause, but -- >> you think it's frothy >> it is frothy. the difference between froth and a major turn down is we don't see the economy weakening significantly yet, and that's a good thing but there are signs of fomo. >> what would they be? >> again, short interest at an absolutely decade low after a run like this, which actually if you think about it, stocks that have missed on earnings this morning in the software space are a very good example of having these extreme moves because shorts are afraid to actually take on positions and then, of course, the converse is

the, you know, incredible chase of momentum from the ai names. when we think about it, again, particularly given the political backdrop when things are as contentious as they are, history says that years like this when congressional controls are as tight as it is, that stocks tend to have volatility we're not calling for an end to the bull market. we're calling for a pause. we think there are some other, more interesting places to put your money. >> other than short interest, what about the overall metrics that we all typically look at, whether price to earnings, price to sale? i don't know anything else you might think about? >> so they are high. valuations have gotten to a point where if you look at it, on a one-year forward basis, the average return is zero okay doesn't mean they can't get higher certainly was the lesson that a lot of shorts learned in 1999 and 2000 and again in 2020 and 2021 off of the bottom, but from our point of view, if you're a

retail investor, and you're feeling as if nothing can go wrong, it's the time when you want to think about rebalancing your portfolio as asset allocators typically do. we think there are interesting places such as china and japan where there are actually - >> china >> china from our point of view, you're in the exact opposite situation. record short interest, record disinterest, bearishness when it's likely there's going to be policy stimulus and they can because interest rates are low we think next week, in fact super tuesday, in beijing as well as in the u.s., there's likely to be some policy stimulus announced then. >> we've been waiting for policy stimulus from china for the last year and there are also geopolitical and structural factors there when it comes to things like offshoring, manufacturing,

supply chains, property issues that has stood in the way of the street >> there most definitely are we have seen policy over the last six weeks and if you go back to it, though, i think it's sof a watershed moment back in november when chairman xi was in san francisco at the apec conference, he overtly courted american business. that was a signal that there is going to be a renewed focus on the financial aspects, something that has been largely ignored for many years and we think, again, when you think about valuations and the fact that it's a market where everyone has sold, we think there's potential upside there. >> all right. >> not a popular opinion here, which is why you like it thank you very much. >> thank you. as we head to break, here's our road map for the hour, some big moves in the cloud space to talk about salesforce, snowflake, okta, be how to play this group from here >> the oprah effect. shares of weight watchers dropping on news that oprah is

leaving the company's board of directors. >> shares of lil and novo nordisk posting nice gains this morning on top of huge gains last year. can the gains continue big show still ahead we'll be right back.

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frank slootman, its ceo, is retiring that pressuring the shares salesforce beat estimates but the guidance for 2025 giving some investors pause the stock not doing much of anything brent phil the jeffries tech analyst has buy ratings on both and let's start with snowflake you know, what was your take, how unexpected was this? clearly to answer my own question, fairly unexpected they would come in with the lower growth rate for next year? >> yeah. good morning, david. it was definitely a lower -- the street was looking for 30% growth, they guided to low 20s part of this you can believe they put a new ceo in and you would not want to set a high bar for a brand new ceo coming in, so that was, obviously, disappointing. behind the scenes they had strong backlog acceleration and signed their largest deal ever at $250 million on a five-year deal they're showing great strength

and underlying momentum. part of the downfall is related to slootman resigning effectively frank and mike scar pelly the two co-pilots many bet on they sold their first company, went to servicenow, established the company, grew that to $100 billion market cap with phil mcdermott's leadership and so this is a big blow for shareholders that really believed in these two co-pilots that had flown for a while for many, many years and given amazing returns to shareholders. >> yeah. >> part of this is the slootman effect and a conservative guide. if i was the cfo of snowflake i would set the high bar coming in we don't think this is competitive. >> makes it easier for him to exceed expectations is your point. i wonder as well, you know, does it take into account any of the new products conceivably the company will be introducing over

the next year? >> it does not none of the new ai products are in the mix effectively, i think this is the bigger issue for a lot of these software names if you look at the semi names, nvidia and amd are up again. traveling through europe meeting with investors and no one wants to get off the semi trade. effectively many ai products it's hype and it's not revenue reality today. for every software company it's low single digit it percent of revenue so investors have gotten a little bit over their ski tips as it relate to the excitement of ai. it's going to come you have to be patient it's not here yet. the revenue is not going to be material until the end of '24 into '25 right now you have a semi cycle working allof our companies in software and internet are buying semis and getting ready for the ai wave. expectations this creates immediate revenue are false. that's not happening and so right now we believe you want to be positioned in a lot

of these names on weakness every software company i cover has set numbers below that of the street and i think it's a common pattern this isn't, you know, new for snowflake. everyone is doing this even salesforce loerds guidance below the street for the year. this is because you don't have a big product cycle in ai that's material to revenue. it's hype today. >> you mentioned salesforce. the stock sort of flat on the day. the margin improvement continues, though, and that seems to have been what's caught the sort of imagination of investors over the last year. >> absolutely. margins have been first for marc benioff, nice job driving from the 20s to 30s they have a long way to go we've said the cruise altitude from 30 going up to high 30s is very easy if you look at all their peers, adobe, mid-40s, oracle low 40s, everyone above salesforce in their peer group

there's tremendous operating margin left and we believe they'll catch the ai wave later in the year and early 25 it's super early there we believe that they're in a good position as it relates to their solution in the front office m mckenzie commissioned a study and said the use cases are in the front office. >> thanks for the update. >> thank you weight watchers shares plunging this morning. we've got more on why and what oprah has to do with all of it after the break. r since switching to workday you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday.

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two celebrity board departures in the spotlight. first oprah winfrey announcing her departure from weight watchers board she joined in 2015 shares are down over 25% following the announcement and the company's weaker than expected fourth quarter earnings release. the stock doubled back in 2015 when oprah joined the board pushing the company's market cap over a billion dollars, but then it has plummeted the company worth less than $250 million. oprah saying she will donate her

shares to the african american museum of history and culture and advise and collaborate with the company and the ceo. and then shaquille o'neal announcing he won't seek re-election on the papa john's board. shaq joined us at post nine on that announcement alongside former chairman jeffrey smith who was enthusiastic about shaq's ability to pivot the company's brand. >> the food is great, quality is fantastic. it's the best in the space you're right, it's both opportunities. we have an opportunity to improve the operations and the marketing. shaquille is a great partner for both of those. he is a natural leader and a natural marketer i've been impressed with his creativity, but he's an owner and operator of restaurants. he's going to be a value enhancer on the board. >> he will continue to be a brand ambassador and investor in nine in atlanta but says other business commitments make it challenging to extend board service for another term

he's certainly had a better run as board member of papa job's than oprah at weight watchers, up 73% the stock since he joined that board it was a real turnaround moment when starboard came in, new management on the oprah thing, just odd because she's the skinniest i've seen her and she did admit to being on the weight loss - >> the drugs for maintenance and i think there are bigger questions for weight watchers beyond oprah not being there what they do in this world. >> yeah. you think? i mean - >> they bought sequence the telehealth provider to try to get into the space but weight watchers is the points and the weigh in and community and it's a small community because people are wondering if that can exist. the drugs are so effective. >> that's what i hear. >> that's what we hear. >> hear more about it tonight on melissa lee's documentary on ozempic as well. and more to come

we saw that therapeutics this week, phase two trials and conceivably lilly has no problem competing with whatever they have coming. >> the tam. >> the total adjustable market very large. >> not at this desk. >> no. >> exercise and diet. >> correct pilates and yoga. >> there you go. >> old school. >> well done. >> for you. >> yes. >> the fed's inflation gauge sara told you, the pce did see its lowest year over year increase in nearly three years and, of course, the key question what does it mean for rates and that higher for longer narrative? we're going to talk to one former fed governor about that after the break. don't go anywhere.

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the economy is simply not working for millions of hard working families. they're working harder than ever and they still can't make enough to get by to afford food and medicine to even keep a roof over their heads. we need to build more housing that's truly affordable. we need to address this terrible epidemic of homelessness. we need to invest in good paying jobs, union jobs and investments in our future.

this, this is why i'm running for the us senate. i'm adam schiff and i approve this message. welcome back to "squawk on the street." i'm bertha coombs with your cnbc news update. defense secretary lloyd austin is appearing before members of the house armed services committee this morning to answer questions about his secretive

hospitalization this year and subsequent cancer diagnosis. the committee's chairman requested the testimony after launching an inquiry into the secretary's days long delay in notifying the president and lawmakers. russian president vladimir putin threatened the west with a nuclear response if nato allies send troops to ukraine he made the comment today at the beginning of his annual state of the nation address his comments coming after france's president suggested sending troops in, in the future, rather than just funding and arming the country indirectly. a russian court rejected an appeal by russian american dual citizen to lift her detention on a treason charge and let her go under house arrest authorities arrested the los angeles resident last month accused her of trying to raise funds to support ukraine she is among several americans

currently being held in russia back over to you david, sara. >> thank you bertha coombs. traders adding to bets on a june federal reserve rate cut after the fed's preferred inflation gauge saw its lowest year over year increase in three years. doesn't tell the whole story randy kroszner, professor of economics at the university of chicago school of business joins us now the year over year number went down that's good to see the monthly rate we highlighted earlier, especially on core, up 0.4% and a 0.6% rise in services how worrisome is that going to be for the fed >> it is exactly what they are concerned about and why they're not rushing to cut rates we've seen the inflation come down from its peak quite rapidly, but to continue to move down is going to be tough, particularly because wages are not moving down nearly as rapidly. they've been around 4% when

inflation was much higher. they continue to be around 4%. that's one of the largest costs that firms face, and particularly firms focusing on the services or the manufacturing. so it's going to be a slow decline. the fed is not going to move too quickly. you know, june is possible, but the -- this is one of the reasons why they want to see more data to see whether the wages start to come down, whether the -- start to see services prices come down. >> what is your sense, we were talking about earlier, about what's happening in january? there appears to be some sort of acceleration not just in prices, in parts of spending, manufacturing numbers turning up, and some of the other weaker parts of the economy do you think january is unique or telling us something about the rest of the year >> it's always hard to tell from one number whether it is the unique or something on a trend, so that's why the fed is going to wait to see

i think you can't overinterpret any one number but a number of factors that come in, you know, we're seeing a little bit more fwhaekz some areas of -- weakness in some areas of spending, increase in social security payments. that has to work out over the next few months. that's why the fed is not moving now. i think it's unlikely they move in may if things continue to move down and we see more signs of labor market weakness, then likely to move in june i wouldn't even say june is baked into the cake. >> so what's your guess, three cuts this year >> i think broadly that seems reasonable based on their forecast and based on the way the economy is likely to evolve. we've been in a really fortunate situation of having this very soft landing i'm a little skeptical that we can get there with no pain, and if there's a little bit of pain

and the fed is going to have to move a little bit more. >> you peen, economic pain you mean labor market? >> yes exactly. i think -- >> it hasn't really materialized yet? >> not at all. now, i think one of the reasons for that is that even though the fed raised interest rates rapidly, still, inflation was quite hot and moved up even more rapidly and wage rates moved up very rapidly you are starting to see them move up not as much as inflation, now inflation has come down, interest rates, real interest rates inflation adj adjusted interest rates are positive and have been for six months, growth rates are positive they've only been positive about six months or so i think firms are going to be less sanquine about hiring now that they have to pay a positive real wage, but it's great for households, not as exciting for terms to be hiring and a real interest rates have become positive for the first time in

decade or so i think that is going to be kind of a one-two punch which will slow the economy down probably -- not necessarily leading to recession but we're not going to see the gang buster growth we've been seeing over the last few months. >> randy, that's a prediction. appreciate you joining us with insight on today's big number. former fed governor. ai and tech names a key part of the broader rally. is health care where you should put your money now eli lilly up more than 140% over the last year. novo nordisk up nearly 70% more on those stocks to watch right after the break.

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( ♪♪ ) meanwhile, at a vrbo... when other vacation rentals aren't what they're cracked up to be, try one where you'll know what you get. mega hit glp-1 drugs such as ozempic and mounjaro have completely changed the way society approaches weight loss and with an estimated 5 million people already on these medicines potentially for life,

there's plenty we have yet to learn. melissa lee takes a look at "big shot the ozempic revolution". >> reporter: in 2018 novo launched the diabetes drug many used off label to slim down. ozempic. followed by rebel sis, a daily pill and wegovy to treat obesity made with semaglutide. lilly countered with a one-two punch releasing mounjaro and zepbound both with its active ingredient tirzepatide. >> different companies are trying to combine different mechanisms >> lilly is a leader here and we plan to make it hard to be caught. >> i believe we have picked the best mechanisms to combine even if the competitors succeed we're going to be a successful company. >> reporter: and we're just beginning to see the drug's potential on everything from sleep apnea and kidney disease and alzheimer's many associated

with obesity. >> was there a light bulb moment when you thought, wow, this could be a game changer in terms of how we treat obesity? >> when we started to see the data with profound weight loss and in the more recent study showing reductions in cardiovascular risk, we probably will unmask more safety issues my hope is they're not profound, they're predictable, but time will tell. >> "big shot the ozempic revolution" tonight 10:00 p.m. eastern. here to discuss is melissa lee i mean, we talk about them every day. >> every day. >> it's been a revolution. you are in -- you went to see novo >> we did. we were in the laboratories and they are furiously looking for the next big weight loss drug, whether it be a variation of semaglutide the ingredient in wegovy and ozempic or a new molecule and just recently, they're saying that maybe we should think about a molecule that is more vaccine like. they're thinking about something that could be a once a year injection instead of a once a

week injection they're already at work thinking about the next sort of iteration of this class of drugs. >> isn't oral the next i mean just being able to take it in a different way than having to inject sglurz. >> there's a lot going on for oral formulations. the limitation for an oral formulation you typically have to take it within a certain number of hours of eating and so as opposed to giving it weekly, you have to think about when you're taking it in the course of the day and that may be trickier for people to comply with. >> what did you learn about whether they can use this in kids child obesity is a big problem as well? >> it is approved for use in children in the american academy of pediatrics actually in their guidelines say for children 12 and up it should be part of the options that are explained to parents, all options should be explained including medication and surgery. for these kids, you think oh, kids are just overweight no they're prediabetic. they're taking heart medication. people with the comorbidities

that adults have plus going through adolescence so being teased for their weight. this could be a game changer for kids who are, you know, where bariatric surgery was the only option, this could be another option, but there is one caveat and that is trial data is only available for one year in this age group. >> you want the long term impacts. >> we don't know. >> the access and who's paying for it. >> we look at two families one of them right now would like to take a glp-1. their daughter is teased every day. it is impacting her mentally and the family cannot afford it. they are not going to take it. >> what about broader indications or more -- i mean even the idea of the potential ability to curb alcoholism >> yes this works with the brain. it basically makes you not want to have too much so for alcohol, for drugs, for all sorts of kinds of

addictions, this medicine is considered and investigated right now. >> stick around. we'll get more on the stock impact with these weight loss drugs. it's a conversation we've had with jared from mizuho securities the health care strategist there, and i mean, you know, we talked about this in the -- with you on set as well lilly and norvo the front runners. i assume you believe that that will continue for some time. >> hey, david. thanks for having me i think these are the two frontrunner for the next several years. obviously, we're seeing large cap pharma companies and a whole host of big tech companies buying for position here for this year and the next couple, lilly and novo are too far ahead. it takes so much investing just to get the drugs through development and then worry about manufacturing, commercialization and all those things over the near term for sure, lilly, novo the stocks have been

incredible and i think they will be in the lead, at least for the next few years >> well, i assume you were listening to melissa talk about other potential indications. are we just at the beginning in terms of what this could mean? you said before these will become the largest selling drugs of all time, but does it even go beyond sort of what people may be seeing right now? >> yeah. i think we're kind of like we're in the very early chapters of this novel, so to speak. you know, zepbound from lilly was just approved towards the end of last year and, you know, wegovy and mounjaro have basically been obesity centric drugs for a year and a half, two years now, so we're really not even scratching the surface and the demand is so insane, i mean every other person i know is taking one of these drugs, the kdemand is so insane, you've seen novo nordisk and lilly invest billions into

manufacturing, so, yeah, i think we're in the very early stages we talk about it like it's -- like this market has been going on now for some time but in essence, it really hasn't and the drug is apreevds just for obesity as a subsection of this population is very new. >> we talked about therapeutics which triple day which showed similar results, but in terms of the 70 potential, you know, antiobesity drugs in the pipeline, what do you think are the most promising in terms of breaking through i know there are several companies working with combination weight loss drugs plus drugs that will actually help you gain muscle mass, so combatting the number one, you know, one of the biggest side effect concerns currently with this class of drugs? >> yeah. i think on that point i'm still probably betting on lilly in terms of their ploipeline and

development. other modalities including less frequent dosing. i don't think it's that big of a deal it's easier to monitor yourself as a patient on the once weekly. i'm not sure if the once monthly or quarterly or as you alluded to once a year is going to take off and be a game changer. i think they're probably in the lead from a number of different modalities for the drug including an oral, muscle sparing, and there are a bunch big tech biotech companies working on that they're super focused. every headline out of this sector is another company, whether in the public or private arena, trying to like, you know, tell the street that they're -- they have something in development, or they're moving something into the clinic. it's something we're going to keep an eye on for a while. >> what is the total addressable market how do you make those

calculations and give valuation on a stock which you clearly like there's more demand than supply. how do you think about the numbers and the potential? i know it's a relevant question for the food companies that i cover. >> totally i don't think you can really get to a realistic number in terms of the addressable market. i mean the population in the u.s. of $330 million you kind of, you know, kind of had to separate that into the adult population what percentage of adults are obese, call it like a third, that's kind of how the market models are being built you can get to some astronomical numbers if you're willing to take the base population, what you believe is the percent overweight and then multiply that by roughly a thousand dollars per month which is the going rate of these drugs, especially if you're paying out of pocket. it's very easy for analysts around street to get to $100 billion plus i know there are some investors

who think $100 billion by 2030 is actually going to prove to be light, but on the other hand, you know, you got the payer complex which you guys talked about earlier, who is going to pay for it on the other side. i think right now i mean going back to, you know, where we are in market adoption, i don't think we really scratched scratched the surface yet in terms of getting the drug to middle america, different regions where the obese population is more prevalent because affordability and access this is basically a new york, l.a., miami type of drug, for starters i think in terms of building the market, it's really population multiplied by some price, but it's unrealistic to be overly liberal because you have the payor complex on top of that and access and manufacturing and can the drug companies actually make enough to, you know, sort of satisfy the demand that's where i think you'll have abnormalities or reconciliations between estimates and what these companies -- yeah. >> got to end it there always appreciate your time.

thank you. >> thanks, guys. appreciate it. >> thank you as well >> thank you >> looking forward to it. just a reminder, tune in, 10:00 eastern, "big shot: the ozempic revolution". webull announcing plans to go public in a $10 million spac deal their ceo joins us to discuss the news next hour on "money movers." we also have the ceo of octa, those shares are surging we'll discuss it with the ceo. thdodoe w wn 21 points just gone negative bies, but for. it should be called wiffle tennis. pickle! yeah, aw! whoo! ♪♪ these guys are intense. we got nothing to worry about. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right?

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the industry is changing if you look at walmart, amazon, costco, aldi, all of those companies continue to add stores and continue to expand their footprint. when you look at the industry overall, there's a tremendous amount of change, tremendous amount of competition. and this will allow us to be

able to compete against those nonunion players >> that was kroger ceo rodney mcmullen joining us yesterday right here, defending the deal to buy albertsons. it was his first broadcast interview, only since the ftc's decision to block the $25 million merger mcmullen made it clear they're going to fight this in court didn't get a time frame on exactly how long it would take >> they don't know yet really. >> probably. and what that legal fight is exactly going to look like we went point by point on the ftc's argument that it raised prices for the consumer, will hurt the union's bargaining power -- >> a couple of times you cited emails and things referenced in the complaint, i believe, in terms of internal communications he didn't really have an answer. >> no. so, one of the more damaging parts for the company is in this complaint they cited kroger's executives, no name kroger executives saying albertsons is their top competitor when it

comes to price or services i did ask him about that he said, i don't know who said that, but it's not true. walmart is our top competitor, which is what they plan to argue. as someone who's covered the company for a long time, it really has, when it comes to price competition, been about walmart. the other issue for that is that there's a long history of supermarket mergers. safeway/albertsons is one of them, that have resulted in fewer jobs and stores closing. mcmullen promised there would be no store closings but it's something the ftc is challenging. >> i recall you put up a market share chart. i doubt we have it now i think walmart was 29%, even with the combination of albertsons and roger >> it would be much lower. of course. kroger's point is costco is a big player, target's a player, dollar stores are a player, and the ftc sort of dismisses that as these are the two biggest

grocery chains i think the union piece is really important, too, because they included labor, the ftc, and i believe believe for the first time as part of their legal argument in the complaint, not just about harm to consumers. >> i'm glad you had him. we'll continue to focus on the potential for that transaction. >> they have earnings next week, too, so more to come. we have a whole lot more on the fed, inflation, the markets. tomorrow we'll sit down with chicago fed president austan goolsbee that will be a first on cnbc interview. market coverage continues. rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund

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good thursday morning and welcome to "money movers." i'm sara eisen with david faber live from the floor of the new york stock exchange. barclays' bull case, thinks the s&p might break 6,000. their head of equity strategist joins us next. shares of okta are up 20%. ceo coming up this hour. later, are spacs back? webull thinks so