with nelson peltz. truly an enemy of my enemy is my friend. it's friday, march 1st, 2024. finally march. it felt like we were in february forever. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. here we go. it is friday. if you are checking out what is happening with the u.s. equities, let's look at this hour. you see there are red arrows. dow futures off 75. nasdaq down 20. s&p down 10. this is for the first trading day of the month. it does come after the nasdaq

notched the first record close since november of 2021. it was up .90%. it wasn't the only index to set a record. s&p was up, too. the 14th record of the year. the dow broke a three-day losing streak and trading off .75%. nasdaq 100 set a record yesterday. if you look at treasury yields on this first trading day of march, you see the ten-year yielding 4.227. two-year yield at 4.58. and congress passed the short-term funding bill sending it to president biden's desk last night. it averts a partial government shutdown that would have happened this weekend. it is part of the broader bipartisan deal to push back the deadline for 6 of the 12 spending bills tofund the agencies until next friday and the remaining six until march

22nd. new york community bancorp shares plunge after replacing the leadership. leslie picker has the latest. >> reporter: andrew, good morning. the latest news is just salt in the wounds of investors who held on to new york community bancorp shares through the year. the stock plunging 30% after a filing yesterday afternoon revealed that management found weaknesses in the company's inn p te internal controls over the loan review. that is not complete, meaning more problems could arise. nycb contributes this to ineffective oversight and risk assessment and monitoring activities. it needs to delay the annual report and will formulate a

remediation plan. > piper sandler is downgrading the stock because there is concern over more issues coming down the pike for the company. that is now the sresponsibility of the new management. alessandro dinello is the new ceo. nycb has lost half of the market value this year after earnings reported at the end of january showed a sizeable deterioration in the company's office and multifamily commercial real estate portfolio. guys. >> oh, boy. >> this is crazy stuff, leslie. >> reporter: yeah. this is pretty wild. i think there were a lot -- a lot of thought that when surrounding the downgrade of their credit and surrounding the move to dinello in the chairman role and the call to analysts

with the concern and bringing back trust to the institution and people thought they were throwing out the kitchen sink here. now we know what is going on and we can move past that. the stock had stabilized in recent weeks. there was insider buying to try to shore up confidence here. i think some people thought the worst was behind them. the news from the material weaknesses and material controls is they disclosed what they found and took the hit to fourth quarter earnings. retroactive hit there. the concern is there could be more once you start looking and that concern is what do you find. that is the tremendous drop of the stock price in pre-market trading. >> excellent. leslie, we will have more later this hour. the story of the morning. elon musk filing suit against

openai and ceo sam altman alleging they breached the company's founding agreement by putting profit ahead of benefitting humanity. musk saying openai's close relationship with microsoft undermines the original mission. musk helped fund openai. he has been outspoken about the frustration with openai and the governance and sam altman. he discussed this with me in november. he has been quite public about it. filing a suit is another situation. of course, yesterday, we learned the s.e.c. was investigating openai. i think it was a prerfunctory investigation. i think elon musk can bring a lawsuit for a long time. he can go up against openai and microsoft and he can get it to

discovery. >> i'm surprised he did not do this sooner. >> i think it gets interesting very quickly. >> i want to know. those are noble words. he's very good at making profits. maybe they're subsidisubsidized. he is doing well in the cap capi capitalist system. is he worried it is a for-profit company? >> did he put in $1 billion? >> i know he wants it to be open, but does he not want it to be a money maker? do you think he is altruistic in this case? >> i feel comfortable is not because he wants groc or some other version of his a.i. to beat out openai. there will be that view of it. i think this comes from the place of genuine frustration.

i interviewed both of these guys, sam and elon together, back in 2017 or 2018 when they first were beginning openai. the effort was completely different frame of mind of what this was supposed to be. people say is elon hurt or feels hurt? this is one of those things that he hurts about. >> there is, in my view, i don't know if it is in your view, there is a precedent for him that he shows he doesn't always make a profit. >> this is one of those. >> it's talking about twitter. maybe people thought he was going to do it with twitter. maybe people thought it was a business investment. he was saving the notion of both sides and a public forum and say free speech. he lost his ass. how much money has he lost? i don't think he cares. if he did it then, maybe he is

doing it now. >> committed to $1 billion and then backed off. he put in $50 million. i think that's the case. he was unhappy with some things. >> you think that was altruistic -- >> let my make two distinctions. >> for me? you can bring me healong slowly? >> when he bought twitter, he bought it with his money and investors' money. he went to the investors and said this is a business. you need to give me money. we are value x. i'm suggesting if that is altruistic, tell everybody who lost money and call me. that explains that. on openai, this is his suit and i can put this in a comparable

category as peter thiel did with gawker. it goes to the idea with somebody upset on the personal level and will take it all the way to the very end. i think -- >> gawker got shutdown. >> it did. i don't know what the ultimate ramification, but this is the last individual in the world who can probably take on openai and microsoft. microsoft will ultimately have a stake in the outcome of this as well and he is probably the only person who can actually do it. we will see what happens. >> that was another great benefit to society in peter thiel's case. shutting down that crap. >> other people argue the en entertainment factor. the grandchildren of walt and roy disney are backing ceo bob iger in the proxy battle with nelson peltz.

nine heirs lined up behind iger, one includes abigail disney. she put together a movie which put out pay practices there. abigail disney says i have my differences with bob iger, but i know the worst thing that can happen to the company is nelson peltz. peltz is campaigning for two seats on the disney board and urging the company to cut costs and revamp the streaming business and clean up the suck suggest succession planning. >> enemy of my enemy. this is back -- if bob iger is not woke enough for you, there's no -- and you bring nelson peltz in. at least she knows what a real problem looks like. >> the heirs called peltz and

other activist investors circling disney wolves in sheep clothing. >> exactly. iger looks good. she's a piece of work. whoa. we had her on many times. when you are born on third base and you hit a triple. coming up, the biggest movers this morning. later, don't miss our interview with richmond fed president tom barkin. that is coming up in the:00 8 hour. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. real r 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.

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welcome back. mattel is delaying the filing of the 2023 annual report. the company identified material weaknesses in the internal control of the financial reporting relating to information it technology. it is not expected to impact the information in the report. mattel is working to file the report no later than march 15th. shares this morning are down 1.5%. there are shares of hpe that are falling significantly. down close to 6.5%. the company cut outlook for sales growth and profit for the fiscal year citing lower demand

for the networking products. the company warned of the shortage of graphic processor units. we'll speak to the ceoantonio neri at 8:10 a.m. eastern time. shares of dell technology soaring. company reported $2.20 a share which is above the estimate of $1.73. revenue is better than expected. orders for the a.i. servers increased 40% quarter over quarter and backlog doubled. the company warned that some customers were cautious about infrastructure costs because of the challenging macroeconomics environment. joining us now is stephanie link. chief strategist at hightower investments. i saw the stocks and companies you want to talk about today, stephanie. i thought they were interesting. let's get into them. they remind me of deep

cyclicals. >> they are. i think the economy that the data we have been getting for the last several weeks and months and quarters is better than expected. we're running% 3% gdp. consumption in the gdp number was up 3%. personal income up 5%. savings up 3.7%. consumer is just fine. manufacturing is what we don't talk about that often. last week, we actually got the s&p global manufacturing pmi that had new orders, joe, of 53%. that is a leading cater. indicator. we had $2 trillion in infrastructure spends coming our way this year and next year. you want to own more industrials and cyclicals. that is why the names i have chosen for today is that theme.

>> the macro picture in the last week and we have seen a double of data points which are interesting. now is inflation back under control? >> well, the inflation is the lowest since 2021. we saw in terms of the peak in pce, core pce being 5.6% to 2.8%. we're making progress. we may not get to the 2% f. the last mile is challenging. we are getting there. the fed is definitely done in raising rates, but the question is how many times will they cut? they can cut. they have a dual mandate of jobs and inflation and both give them the okay to do that. >> stephanie, the nasdaq as we have been talking about finally regained all-time high ground. that's with the benefit of a.i.

i don't know if we would be there without that glow or animal spirits. how would you describe what technology has been through the last two or three years? >> it's amaziamazing. a.i., we have been talking about a.i. for years, but obviously got jazzed about it last year as generative a.i. took over and gained momentum. it is $1 trillion total addressable market by 2030 probably at a minimum, joe. you want exposure. we talked about it. i'm not sure you want to go out and buy nvidia up 270% in the last year. there are plenty of names. dell. these numbers were huge last night. the stock trades 14 teams forward estimates. the numbers will go higher. when you have a.i. orders up 40%, you have a doubling of the backlog in a.i.

the pc cycle has been dead the last couple years and now starting to see recovery. you can buy dell up and you can buy a cdw which iss something i own. >> testistephanie, i try to rem everything you say. we have a lot of people that come on. if there was one trade that almost across the board over the past few years and people felt safe recommending healthcare. everyone was going to get older and always a place to be. recently, we had people on talking about there will be margin compression. it is happening. we saw some of the regulatory issues facing one of the greatest healthcare stocks. united healthcare. didn't you like healthcare in the past? are you changing?

have we hit the nader? have we hit the peak and on the other side? >> healthcare has been frustrating. yet, you have seen healthcare earnings up about 8% in the past quarter. we had a lot of laggards there other than bio-tech. bio-tech has done nicely. one of my biggest positions is ge healthcare. it is a spin from ge and i think that the hospital utilization rates are going up. we are seeing it. cap ex from hospitals will be 2.5%. they have a great product cycle story. they do have a margin improvement story because they're spun out from ge where they were underinvested when they were part of ge. i like spins, as you know. i like to be selective in health care. you don't broad brush. i think united healthcare is interesting because it is down a lot in the last couple of days

on regulatory issues. i think it's a lot of noise and p i think they will have pricing power. they will not let the mlr go up much more without offsetting with price increases. i like that one, too. i like bristol myers. that is dead on arrival. stock trading seven times earnings. there are places within healthcare. if i have to tell you, i prefer some of the cyclicals that we were talking about in the beginning of the show. i like the ge now they are spinning out. we knew this would happen. that is good news they are getting that past them. i like masko. there is a lot to do in the market beyond tech. i like tech, but there is a lot beyond tech. >> i'm thinking the weight loss and that sector of healthcare is a.i. almost. >> sure. >> now supposedly and i don't know if i believe it.

obesity is past hunger? that is a blessing and a curse. if we get to the point where the biggest thing we have to worry about is people are too well fed. fed with the wrong things, obviously. if that is true, it is hard not to think that is the silver lining. stephanie, thanks. nader, the word itself sounds, but it's not. >> it's the dip. >> doesn't it sound high? apex? >> the definition in the dictionary is the lowest point in the fortunes of the person or organization. then they wrap it up with the quote thatsays they reached the nader of the suffering. the height of the suffering. >> a negative on a negative. it's complicated. all right. i'll use it properly from here on out. i promise. coming up, news from several electric vehicle companies, including fisker's warning about the ability to stay in business. we'll talk about that in just a

littlebit. in the 8:00 hour, we will speak with mayor eric adams about all that is going on in new york city and the politics around the country. "squawk box" is coming right back. pga of america and t-mobile are partnering on 5g-powered analytics to help improve player performance. t-mobile's network helps aaa stay connected nationwide... to get their members back on the road. and las vegas grand prix chose t-mobile to help fuel operations for one of the world's largest racing events. now is the time to see what america's largest 5g network can do for your business. (luke) this will be a gold mine of local intel. just you wait. now is (marci)e to see what amright.s largest so, tell us about this corn festival? (stylist 1) oooh you got your corn pudding... you got your corn chowder... (marci) so... is it safe around here? (stylist 2) sometimes. (luke) if a family of eight were to need a cold plunge, where would they find it? (stylist 1) ...and then they dip it in butter, then bam, it goes right in. (stylist 2) ...really cute vampire bar. (stylist 1) the reverend does like a blessing on the corn. (luke) donut shops. how far from here?

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i am here... i am here.... because of dana-farber. what we do here changes lives everywhere. i am here. welcome back to "squawk box." fisker is announcing a warning with the concerns and the company laying off 15% of the staff. the after hours move bringing the market cap to $250 million. sp separately, s.e.c. names lo lordstown over the sales of the flag trip truck. lordstown agreed to the cease

and desist order. lordstown did not admit or deny the s.e.c. findings. >> i just drove by lordstown. the plant is now foxconn. you drive by it and that is what the plant is there. when we come back, we will talk about the potential regulation for regional banks a year after the collapse of svb. a market flash for you. beyond meat is not able to file the report on time because of technical difficulties. the stock which jumped sharply on better than expected results when it did report, is down 1%. as we head to break, let's look at the s&p 500 winners and losers.

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good morning. welcome back to "squawk box." we're live from the nasdaq market site in times square. the futures are indicated weaker. dow down 50 points and s&p down 6. it is coming after another day of significant gains. s&p set another record yesterday. dow was at a higher level and nasdaq set a record as well. it has now been one year since the collapse of silicon valley bank and the banking crisis. our next guest authored a paper on how to focus on future banba banking regulations. we have tomas with the national bank of economic research. we are a year out. i'm curious, do you think anything has changed in the past year, tomas, before we get to

the recommendations that need to happen going forward? >> thank for you for having me . last year, the regulators were able to contain the bank run. the vulnerabilities in the banking sector remain. they are rooted in the high leverage of banks. a typical bank in the united states is financed 90% debt. mainly deposits and then mainly equity. a small number of value with the high interest rates and the credit risks with commercial real estate distress can put the banks potentially in the area when they are subject to solvency runs. what to do about it and the thing is to raise capital requirements. if you look on a institution in the similar system than banks, they have twice as much capital than banks. one reason why banks are so

financially levered is the access to deposit funding. especially the smaller and mid sized banks which are subject to all kinds of risks now a days. go ahead. >> one of the things i was going to ask is a big question over higher capital requirements for the banks. when you look at just the sheer number of loans that banks make today relative to the shadow banking system, there is an argument to be made that the banking system in america is not necessarily powering the economy market in america today. should we think about it differently? >> thanks for asking this question. an excellent point and subject of our new work. if you look at the 1970s, 60% of all household loans were held on bank balance sheets. now it is about a third. that is financed outside bank

balance sheets. what it means if you would raise capital requirements on the banks, even substantially, the impact on other lending would be fairly modest. it is because the debt securities market with mortgage backed securities and corporate debt market and other securities markets which are more important. the funding comes from money market and hedge funds. the banks are not as important in financing lending as they used to be. >> so, if that is the case, then, are we fighting last year and last decade's war when it comes to higher capital from the bank or not? should the focus when people describe the shadow banking system and you weigh the credit market work today and the apollo and blackstone and everybody in that game, you could say it is a very different structure. >> you are right.

you know, the structure is more important than it used to be. what we are trying to tell to regulators engaged with discussions about that is we naturally focus on the banks because they provide the deposit insurance. as taxpayers, we are at risk here. most of the lending activity is on the side of the bank balance sheet. we should focus more attention on debt security markets and non-banking institutions with the regulatory lending. not to say there are no problems there, but the regulatory should shift there instead of focusing just on banks. >> tomas, it is fascinating. it is worth looking at as folks think about what is going on in the banking world. thank you, tomasz. >> thank you.

coming up, a new trend in the art market. robert frank has that story. you can follow the latest with "squawk box" with "squawk pod". we're coming right back. meets bold new thinking. (laughter) at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. old school grit. new world ideas. morgan stanley. at pgim, finding opportunity in fixed income today, helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today.

my name is sister monica claire. because of tiktok, i've created a community where people can feel safe asking questions about spirituality. i try to provide a really accessible way of them learning about religion and spirituality, that's not intimidating. somebody in the comments said, i have no idea how i got on nun talk, but i'm not mad about it. i'm going to teach you how to pray. i'm going to teach you how to meditate, how to connect with a higher power, because we need that. we need strength and comfort.

welcome back. yosemite national park is closed and will remain off limits to visitors until sunday. a fierce sierra storm started yesterday and is expected to dump 6 to 10 feet of snow in some of the mountain areas. visitors in the park were ordered to leave by noon today. you are looking at video from early this morning in south lake ta tahoe. that storm is expected to peak overnight. 6 to 10 feet, not inches >> that sounds cozy.

the tahoe ski resorts -- >> you are not allowed to drive into the park this time of year without chains. >> if you go over loveland pass, you need chains. welcome back. never mind. you're here. they changed it. let's talk about the fast growing trend in the market that doesn't involve auctions at all. private sales. robert frank has that story. robert. >> good morning, joe. auction sales fell 19% last year. one area that is growing is private sales. that is when an auction house brokers a deal directly with the buyer and seller. chr christie's and southby's did over 1 billion in sales before the pandemic. private sales do best during the auction when they're down. sellers can sell without risk of the auction block. buyers like them because the fees are lower and there is more

deal certainty. there was a private sale in january for over $100 million from christie's. art dealers tell me it was joe and becky's favorite. a rothko known as number 6. it was sold by the russian billionaire collector. the buyer was hedge fund billionaire ken griffin. unclear what ken paid for it. likely over $150 million. in the meantime, christie's sales of the elton john collection topped $20 million. that was more than twice the original estimate. elton's bentley sold for $441,000. his silver platform boots that he wore in the 1970s on stage, estimated at $5,000. they went for $94,500. the rocketman at auction. >> oh, man. which rothko is number 6?

>> i was looking it up. >> 1951. it is a masterpiece. one of the greatest. this has been in storage for the past ten years. he kept it in storage. >> it is not the one i'm thinking of? >> the four paragraphs. four blocks of coverage. >> four? $40 million a color. number 6? >> one of the most important. it was big news when he bought it and now it sold in the private sale. ken griffin can put it on one of his many walls. new york, miami or may donate to a museum. we will see. >> number 6. violet, green and red. >> folks donate to the museum. >> do they get a tax break? i know where you're going, andrew. >> you believe you donate to the museum for five years or ten

years. >> you can do that. >> with the plan to get it back. >> you can do that, too. >> you get the tax benefit for the ten-year period. how do they do the val ue? >> you know a lot about this. >> the period you donate before you get it back? >> that is complicated. i don't know how this is structured. you can pledge it to a museum. there was a period of time where people were keeping the painting at their house and getting a tax break. you are still owning it and looking at it and you get a tax break for something on your wall. people are playing games with museums. he is truly donated major works. >> that's a good one. >> it is. the violet. >> no, no, no. leave it in your house. i donated it. it's nice. let me show you something. it's not mine. >> it is good to be wealthy.

>> you can get the tax breaks before you do it? >> that is what was happening. you pledge it and say you give it over and you keep it for several years and you give it over later. the pledge onthe year you donate. >> you get the tax break. >> bingo. >> the private museums and they buy paintings and create a museum. it wasn't open to the public. it is open once a month from 12:00 a.m. to 1:00 a.m. or something. they cracked down on this stuff with the art market. >> that's why you need the irs to actually track this stuff. >> the rich really are different. it's legal. you need people to close the loopholes. >> did you see the irs? >> it is not legal. it should not be legal. if you have the museum open from midnight to 1:00. >> technically it is legal. >> the irs would crackdown on it and bring a case because it is

effectively against the law. you need somebody inn enforcing. >> it is usually the law that needs to change. everybody sis a cheater. >> joe, they are a cheater. that's the point. >> i think most people are not cheaters. >> here's the thing, the irs sent out 25,000 letters to people who make more than $1 million a year who did not file any tax return between 2017 and 2020. >> what? >> that is not playing games in a gray area like art. this is people making more than $1 million a year and not filing in that period. the irs because they have money is sending letters to the people saying it. how do you argue against that? >> can you guarantee they are going after people? every other agency in washington

is weaponized. the irs is the worst. >> which? >> the police on the street. >> the ones still left after you decide we don't need them a any more? >> yeah. those. >> no. the few we have left. we can ask eric adams. >> should we get rid of the police? that is what you are asking for. that is what it is. >> it's friday. calm down. your voice is getting high. >> elliott ness. >> untouchables. >> that is how they got al capone. >> just read the news, becky. >> shut up and dribble? up yours. when we come back, apple release being the vision pro a month ago to mixed reviews. joanna sterns joins us with her experience with the headset in the last 30 days. you will be surprised by what she thinks. later, interview with

richmond fed president tom barkin at 8:30 a.m. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. u! your business bank account with quickbooks money now earns 5% apy. (♪♪) that's how you business differently. intuit quickbooks.

welcome back, everybody. check this out, this photo. this is a groom wearing the apple vision pro at his wedding. photo went viral. this is software engineer jacob wright. he wore the headset during his february 10th wedding in utah. not during the ceremony itself but for photos and while dancing during the reception. his bride told sf gate she wasn't mad. she thought it was funny. you have seen more and more

scenes like this. it's been a month since the vision pro was made available to the public. our next guest was one of the very first people to try it out, joanna stern, a cnbc contributor. i was a little surprised by your take at the end of a month. it sounds like, for you at least, the honeymoon has worn off? >> it has. you know, i guess i could have gotten remarried or renewed my vows in it which would have been the ultimate stunt. i've been using it for a month. of course, when you view a product, you're using it all the time when you first get it. you want to evaluate it. i really enjoyed using the vision pro at first. i still enjoy using it. i'm just reaching for it far less. for me, it is definitely not an everyday computer. and the things i thought i would be using it for, which is work, i thought every day i would put it on to get my writing done, that's not the case. i'm turning this more for

entertainment purposes, to watch a movie, to watch a show. i do have to say, i believe the killer app is flying with this on. you will see more people wearing these on airplanes because it is a great experience up in the air. >> i loved your anecdote from that. maybe you can talk about it. you were seated between a married couple on a flight. and you were able to turn it off and basically make it look like you were on the moon. >> yeah. i think -- look, even if you have the best seat on an airplane, this will be great. if you have the worst seat on a plane, which i happened to have a few weeks ago on a flight, this was great. that speaks to what this is right now, which is a virtual reality headset. it's great for escaping those situations you may not want to be in or taking a break. in the case of the airplane, yeah, i was quickly able to log onto united's wi-fi, quickly to start streaming videos that i downloaded, even stream some stuff to the united app. it's a good experience, but that

question is, how often are you going to use this? really if you think about what's happened with virtual reality and the hurdles they had to go mainstream, es feshlly those quests, this is a similar situation. people buy them, they're excited and then they may sit in a drawer or in the corner for the majority of of the time. that is the real hurdle apple is up against. >> joanna, i'm sure you saw when mark zuckerberg effectively did his own review of the vision pro, and he made the argument he thought that his device was better just on -- both on a price adjusted basis and he thought overall better because of the weight and because of these other issues and thinks there's a lot of stuff those devices can do that the vision pro can also do, but that he believes they've either marketed badly or otherwise. how do you think about that? >> i still think the metaquest is a very strong product for

that price point. when you put on the vision pro, it is a markedly better experience in a few areas. it is definitely heavier and that battery pack is a pain, which is what he was pointing out, but some of the quality issues and the way apple has perfected the hand tracking is, to me, superior. it is a more natural experience in terms of navigating these digital interfaces. meta does a very good job in certain areas. one area i really think apple has to head into, and it makes natural sense for them, is working out. meta acquired super natural, which is this workout company, which you work out in vr. it's one reason i usually find myself going back to the metaquest. >> having said that, though, you're not keeping this vision pro. you're sending it back. you don't think it's time for you to buy one? >> look, this was a review unit and it's time to go back. to me the big question is, will i miss it? will i miss having that around

and will that be the reason to buy the $3,500 headset. i may just buy it because i should have it here and it's part of my job. but as an everyday consumer, i would not be buying the headset. >> thank you for joining us. good to see you. >> good to see you guys. >> the married couple, were they arguing? >> she was just sitting between them. i think the wife wanted the aisle and the husband wanted the thing and they were passing stuff back and forth. because she was wearing it and they didn't understand, they thought she couldn't see and offered to help her out, which is nice. it's hard to be between two other people. >> that's a big thing to carry around, isn't it? >> she made that point in the article, too. to take it on the train, you basically have to set up an apple shop next to you with all the things she needed for it. but she said it was cool to be able to turn it and make it look like you were on the moon. >> put in your buds and turn

them up, right? >> yeah. >> shut your eyes. come up, we'll have a bull/bear debate over apple stock coming up. straight ahead, elon musk suing openai and sam altman. musk says the a.i. company has lost its way. we'll have more details when "squawk box" returns. bigger leg! 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 investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

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a developing story this morning. elon musk filing suit against openai and ceo sam altman. we have details just seconds away. apple facing heat from investors. that stock down more than 6% since the beginning of the year. and this morning goldman removing it from its conviction buy list. we have a bull/bear debate on where shares could be headed. and inflation taking a big bite out of what americans have to spend on food. a look into why food prices are remaining stubbornly high. the second hour of "squawk box" begins right now.

good morning, welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square. let's show you the futures right now. 2 1/2 hours before the market's set to open. dow off about 40 points. we're looking at the s&p 500 off about 500 points. the nasdaq looking to open higher, about ten points. the two-year note at 4.591. we have been watching the rise of cryptocurrencies, bitcoin and ether in particular, but this morning down marginally, $6,945 on bitcoin. meanwhile, the big story of the morning is this, elon musk has

now filed a lawsuit against openai and ceo sam altman alleging they breached the company's founding agreement by putting profit ahead of benefiting humanity. musk said openai's close relationship with microsoft is undermined its original mission. back in november, i spoke to elon musk at the conference about openai and whether the startup should be a profit -- a for-profit corporation. listen to what he had to say. >> openai was actually started and it was meant to be open source. i named it openai after open source. it is, in fact, closed source. super closed. it should be renamed super closed for maximum profit a.i., because this is what it actually is. it's gone from an open source foundation, fi123 to $19 billion

profit profit with closed source. i don't know how you go from there to there. that seems -- i don't know how -- i don't know, is this legal? >> as we've talked about just in the last hour, this is a relationship that has soured between sam altman and elon musk over the last several years. elon musk has been pointing these issues out in great frustration, at least it appears to be personal frustration, philosophical frustration. he put the money in openai and frustrated with what's happened ever since. now the discussion is, where this lawsuit goes. he's one of the few people that has, quote, standing, if you will, from a legal perspective to bring a case like this. he also has the financial firepower to take on a microsoft and the like. the question is, what do you get to see underneath all of this? is there a settlement? what is the ultimate outcome of all of this? >> i haven't read the lawsuit so i don't know what they're seeking is or what he's seeking

through this. >> i think it's governance changes and a real shift -- i don't know, could it ultimately end the business? you don't know where this could all go. as we were discussing, there is sort of -- this is like a personal issue for him. and it's personal. i think it could get pretty serious. we're also going to be waiting -- we'll hear about it in the next month or two, all the government issues that happened last fall, we'll understand a little more about that. i'm sure that elon musk thinks whatever we'll hear will be completely whitewashed. one of the reasons he's bringing the suit is because he can then actually capture discovery and all of that. we'll see what happens. i remember interviewing both of these gentlemen together years ago when they were fast friends and this is something they deeply had a passion about, talking about openai. here's some of that interview. you can see how young they were.

this was 2015, actually. i was wrong about the timing of it, but this is when they were just starting this company together. we all looked young actually. but you can really get a sense of just what they were after at the time. >> i mean, and i think for people who don't understand, elon musk co-founded with him, put in a big chunk of his own money. >> it was his money, yeah. >> at the time he pledged $1 billion. it fell far short of that. i was just looking, i don't know if this is correct but it's been sourced at about $50 million he put -- >> i om believe it was about $50 million, which gets to potential damages. i don't know, in terms of what -- we talked about what the outcome could be. could a judge say, look, the damage is $50 million. you want your money back? you can get your money back. i imagine as part of this for elon musk it's not even about the $50 million. it's much more about can he change the outcome of this? let's get to dom chu with a look

at this morning's premarket movers. >> andrew, joe, becky, let's kick things off with a big downside mover in the market and that's embattled regional bank new york community bank corp down roughly 25%. off the premarket lows, by the way. just about 3 million shares of trading volume so far. nycb made announcement it made an amendment to fourth quarter financial results. they indicate management found, quote, material weaknesses in the company's internal controls related to internal loan review resulting from ineffective loan oversight, risk assessment. they announced effective immediately current executive chairman will take on the president and ceo roles as well, replacing thomas kinjinmy. he those shares down 25%. on the analyst side of things,

shares of apple are in focus. the now second most valuable company on the s&p is down roughly a percent or so, around 350,000 shares of volume. the volume maker and app services giant is getting cut from the conviction buy list at goldman sachs. they have found more attractive candidates for that list. goldman removed apple, merck and replaced themwith amgen, vulcan materials and monday.com. hewlett-packard is down 5.5%, 90,000 shares of volume. reported profits on revenues that fell shy of the mark but also forecast weaker current quarter revenue amid customers pulling back on spending. hpe down 5.5%. back over to you. our next guest says the biggest fear for investors currently is the fear of missing out on the market's momentum

higher. for more on options, we have amy wu silverman. good to have you, as always. >> thank you. >> what are you looking at? which sections of the option market indicate to you there's, i guess you call it, fomo if we were texting each other? >> lots of fomo. i don't think the stocks would surprise you, nvidia, a lot of the semi space, mega cap tech. what is very telling is since post-covid, that fear of downside, this idea of hedging in the market has all but disappeared. people are focused on the right tail. i joke the right tail is the new left tail. but that fear of upside has just captivated the options market. it's really at historic highs when you look at call buying. >> what historically, how does -- does this end well? >> it's interesting. we back-tested this. we sort of said post-covid when you get into these cycles of exuberance, when you see call options shifting to these

historic levels, what actually happens. what actually happens is momentum begets momentum for quite a bit until there's some sort of clearing event. what's interesting in nvidia's case is earnings was the clearing event. we actually saw more folks go in and buy calls. the next event we're looking for is march 18th, there will be an nvidia a.i. conference. that's the next clearing event. it will be very interesting to see if that momentum cycles or anticipates. >> you're looking at a phenomenon in the marketand all based on one stock? >> you know, and i know that makes you laugh, but the concentration of that one stock has become massive. the reality is we're not looking just at nvidia, but we areally looking at three or four stocks driving such massive concentration. what is interesting is post nvidia's earnings we call the skew inversion, that outsized call for buying like in an amd or micron, those would tell you

essentially what people are looking for is the next pocket of fomo. >> it's called a skew inversion? >> that's right, scu inversion? >> when call buying outpaces -- >> put buying. if you think about it, historically when you're long stock, you want to hedge. you would expect put options to be slightly more expensive than call options. when that relationship flips, it makes options people very nervous. we rely on our historical relationships, rely on our correlations. they have basically been blown apart since covid. and it started with gamestop and the meme cycle. you can't rely on historical relationships the same way you can't really rely on bond equity correlation. they would be blown apart. >> is it the total number of calls being bought or puts or how much the premiums are vertsz what they're actually worth? the call premiums are actually more expensive than the put

preet yums when you have fomo? >> you got it right. we use implied volatility but it's essentially the cost of one versus the other on an apples to apples basis. we sweep that for all names in the russell 2000 and s&p 500, that exuberance, whatever you want to call it, has been rising and rising. >> now we have to decide what to do with it. do you think that argues for more momentum or too bullish to where you think it's overdone and ready to peak? >> eventually these things go away, but essentially when we back-test this and look one week out, two weeks out, three weeks out, it tends to last, so momentum begets that momentum. it's a factor people have started trading on their own. just the idea winners continue to win is actually a factor that investors have useding a agnost

to -- >> you expect a lot more records to come? >> essentially until some sort of clearing event, that's when we look at when we see in the post-covid area. there are also mechanical areas which i haven't gotten into. when this happens with options, there are gamma dynamics, all these things on top of just greed. >> the nasdaq timely confirming the highs in the averages. what does that tell you? tells you nvidia had good earnings? >> yeah. i think, look, those things continue to perpetuate it. the other part of this u.s. exceptionalism that i think is interesting, that i've been speaking with investors about is just, you know, china was the story that was supposed to be the rebound. we've been hearing that for the last few years. i've been on the road a lot the last few weeks. what i've heard from international investors, there are just not that many places that go.

their china bets have not worked out. that's helped simple fund positioning into u.s. exceptionalism. where do people go? they go back into the mag 7. this is interesting but one thing i've heard them say, if china is a story they can hang their hat on, that is something that breaks the flows away from u.s. exceptionalism. >> that would be -- so we're already -- there's indications of some froth from this stuff you're talking about and that could be what finally results in this trade being, i don't know, less lucrative in the future? >> look, joe, if you're feeling angsty, it is incredibly inexpensive to hedge and there are always unknown unknowns in the market. people just don't care right now. >> i think i am feeling angsty,

but i don't think i'm allowed to do any of this, can we? >> no. >> so i have nothing for my angst except for alcohol. >> well, it is friday. >> it is friday. >> it's always great to have you. >> thank you. when we come back, food is taking a bite out of disposable income for many u.s. families. in fact, it's the highest percentage in 30 years. we're going to talk about this right after this break. later this morning, we're on washington watch. libby cantrill of pimco will join us to tk oualabt the fed and an election year.

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consumers, what it means for retailers as well, is morgan stanley's retail analyst. these numbers are pretty astounding. 11%, that's a huge chunk of consumers' disposable income. what's it mean overall? >> well, it's been elevated for the past couple years. and actually on an inflationary basis, it was even higher. it's starting to come down. what it means is we're consuming less units. units are actually down 4% to 5%. volume or actual tonnage is down as a result. we're seeing cutbacks across the board. >> cutbacks where specifically? >> in how much we're consuming. now, it's not isolated to one category. it's across the board. so if you think about the perimeter of the store, the middle of the store, you're seeing units come down across the board, the units and the middle of the store are probably done a little bit higher than the perimeter. there's some shift towards the

outside. ironically we saw private label, which you would see consumer naturally gravitate towards, that actually increased all throughout '23 until the middle of the year. by the middle of the year we started to see private label come down, which was ironic given the shift. >> what does this mean in terms of grocery store sales versus eating out at restaurants? i would assume that people try and cook more meals at home if things are getting more expensive? >> we're just starting to see that. if you take a look at the long-term average of food at home, it used to be at about 60%. that shifted over the last couple of decades. it got to as low as 44% a couple months ago. now we're seeing it start to tick back up to 46%. the share of stomach, if you will, is in favor of the restaurant, but it's starting to shift back to food at home. especially in the last two months. january we saw a spike. that spike could have been partially due, there was bad weather, there were storms. i think people were probably

forced to eat at their home, but we are starting to see that tick back up. a major restaurant chain called out in january, starting to see that phenomenon as well. >> what does that mean in terms of who the winners are, the grocery stores writ large or certain players who will do better? >> so far it's been the discounters and club stores. i put walmart, costco in those buckets. also genre of stores that sell value. if you see the market share move it's walmart, costco. the hard discounters. the grocery stores, the ones that are public, they're sort of in the middle of the pack so you're not seeing market share gains there. you're seeing stable trends, but it seems like the customer is moving towards value. i would say walmart in particular, midsingle digit grocery sales. the industry calls it flat to down. that's a big market share from the largest market shareholder of grocery store sales.

>> walmart is your top pick out of that? >> walmart of the grocers is. that's beyond a grocery call. it's about them being able to grow their earnings a little faster through alternative revenue. there is that defensiveness in the grocery side of the store. >> thank you. coming up, libby cantrill of pimco. tech billionaires pushing in san francisco. in the next hour you do not want to miss this, new york's mayor eric adams on the migrant crisis, that and so much more. "squawk box" rolls on after this. time now for today's aflac trivia question. on this day in 1969, what popular center fielder retired from major league baseball? tus. nswer when "squawk box" rern ? that's like the gap in my health insurance. gap in your health insurance? yeah, it didn't cover everything when i got hurt. good thing i had aflac. hmmm the cash i got from aflac helped pay for

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7 world series. welcome back, everybody. this is "squawk box." we're watching the futures. it's a first trading day of the month, of course, first day of the month. the dow futures are down by 70 points. s&p futures down by seven. the nasdaq down by five. this is coming after a series of new records for many of the major averages. s&p a new record yesterday, so did the nasdaq and nasdaq 100. we'll continue to watch it as we get under way in the new month. our next guest says clients are beginning to fret over what the federal reserve might do with rates, given this is a presidential election year. we'll bring in libby cantrill, head of u.s. policy at pimco. we've talked about this, or the prospect that the fed could get into a unique place as we get closer to the presidential election. i imagine that's where you're going with this. >> that's probably number one question from our clients, will the election cycle inform what the fed does, particularly as we get closer to the november

election? >> in form or influence? >> well, it's semantics at this point. but, if the fed has not cut by summer, will they be more ambivalent about cutting into the fall as we get closer to the election, with the possibility of the perception they're being political? we looked back at every election cycle since 1980. the fed has either cut or raised rates or used their balance sheet in every election cycle since 1980. >> you think this is a myth -- >> yes, there's this misnomer in the market that they're worried that the fed is trying not to be political -- >> they've actually raised. >> in 1984 they raised and then they cut. there are actually these cycles where they've done both. so, again, i mean, our view has been that you kind of have to take the fed at their word that they are going to be data-oriented. if that data suggests they cut closer to the election that they will be willing to do so, if

history is any indication. >> you spent an enormous amount of time traveling around the world, and they have some pretty interesting views about what they think is going to happen here in terms of our election. i'm so curious what you're hearing. >> i think there's been a lot of questions and some confusion about whether biden -- whether it's going to be a biden versus trump match-up. >> this is the international community trying -- >> this is the international community. >> coming to you to say -- >> maybe they're projecting their hopes and dreams it may not just be a rematch. but we've been saying this and we have been consistent for the last few months, that it will be a biden versus trump rematch. there is going to be no sort of parachuting some new candidate at the convention in august. >> so let's break it down. the view in asia is what? >> the view in asia has been interesting. it's ranged from gavin newsom being the potential candidate to jamie dimon to michelle obama. some of this is just process

that actually -- this really cannot happen, but there are still these rumors in the marketplace out there. >> middle east i've seen has a very different view of the world. >> i think they're realistic it is biden versus trump. >> what's the outcome? >> they have not indicated. i think they're more interested in the analysis of what could happen under each scenario. >> what is your analysis of what happens in each scenario? >> this is a little bit where people's eyes glaze over but a lot depends on the composition of congress as well. everyone is focused on who's in the white house. as it relates to international policy, that really matters. as it relates to things that matter to the market, whether it's tax policy, government spending, the debt ceiling or what have you, a lot is predicated on the composition of congress. i think the senate very likely flips to republican control. right now democrats are in control by one seat. the map for democrats is very challenging. likely the senate flips. at least at this point. a lot can happen. the house, i think, is a jump

ball. there have been signs of special election that democrats have a higher chance of taking the house. >> this is an aside. yesterday -- my son is crazy about looking at all this stuff. he said something kathy hochul did in terms of gerrymandering, that it was beneficial not to democrats. she only did two -- she only did two seats -- >> what he's probably referring to -- >> the republicans could keep the house, he said, because of this. this is from him. >> what he's talking about is a bipartisan commission presented the new map, the new congressional map here in new york. the democrats and kathy hochul decided to not necessarily take that map. and they've suggested a new map -- >> it's not helping themselves. >> in some districts it's slightly beneficial to democrats in other -- >> you're not gerrymandering? >> she learned her lesson in some way -- >> she did something that made it less likely that the house was going to be a really

tough -- >> i think your son makes an excellent point. the majority of the house will likely go through the suburban districts in places like new york and in california. so that's why there's been so much national attention on this redistricting in new york. it is going to be -- the special elections have maybe previewed the democrats are outperforming their partisan baseline. not too extrapolate too much. >> let me ask you a different question. i imagine under a biden administration the economic policies we kind of know relative to the status quo. i think we generally know what former president trump's policies would be if you think they would -- he would try to do a lot of the things he wanted to do then that maybe he didn't get to. what do you think he would be trying to do that would be different? >> in some ways this is a predictable election cycle. there's not too much uncertainty because we know their policies. i think maybe it's a question of degrees for president trump and who he decides to have in his cabinet. he had a lot of establishment republicans his first term. would he sort of go to that well

again or would he actually diversify to people who are maybe a little more ideaical? one thing from our international client perspective, the big unknown is how does he use these tariffs? we know he likes tariffs, he has unilateral authority of tariffs. congress doesn't have a check on the president's authority there. how extreme does -- does he actually go to a 60% tariff on chinese imports, for a for instance? >> libby, it's great to see you. thank you for your analysis. coming up next, elon musk, as we've been discussing filing suit against openai and ceo sam altman. details after the break. some investors souring on apple over slow a.i. development. we'll find out if it's a buying opportunity or, perhaps, if there's more downside. "squawk box" will be right back. your skin is ever-changing, take care of it with gold bond's age renew formulations

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welcome back to "squawk box." it is the story of the morning and the story potentially of the year depending how it plays out. elon musk suing openai and sam altman, claiming they breached the company's founding decision.

joining us see it kovac. we've been going through the lawsuit. >> wild. >> it is wild to see. it is also wild because we were talking about what the outcome of this case could be. it's unique in that elon musk is one of the few people that has standing to bring a case like this. you have to think about what the, quote, unquote damages are if you are a judge. he is seeking to open up openai so that it is effectively truly an open source situation. >> and to stop microsoft from using it. >> and to stop microsoft from using it. the question is whether a judge would stop that or a judge would say, we'll give you back your $50 million initially because those are the damages to you personally. but it also means we could get real discovery in the case about all of the things that have transpired and how openai has operated. >> he says -- in the lawsuit that only openai knows what's in

this chatgpt 4. they suspect microsoft does, too. >> we've been talking about in a.i., open source and closed source. you have that european company who also raised money for microsoft, facebook is open source, you have google and openai as closed source, you can't tell. one thing that stuck out to me is part of the case against openai, the argument that musk is laying out is they've achieved what's called artificial general intelligence, agi, is what -- what the acronym is for. they're alleging chatgpt 4 has already achieved that. if you talk to the folks at microsoft, they say, nowhere close to agi. so a big chunk of the case -- >> it rests on that? >> that's what it sounds like. we believe, something to that effect, based on our outside view, they've already achooeed this milestone of artificial

general intelligence thereby negating the deal because their deal says once openai achieves agi, they can't use it. >> i read the case differently. i read that -- but i don't believe the whole case rests on it. >> it doesn't rest -- >> but it's a problem. it's a component part of the case. i think the other issues are -- because otherwise if you were a judge, you could rule against this case in about ten seconds and say there's no agi. if you looked at how they did it, they separated the issues so that is sort of -- >> it's the contract. it's breach of -- it's breach of contract. >> and the contract is the founding agreement that musk and altman sat down and agreed to. >> they have to prove -- we know how the structure got changed. openai would tell you the way we have it structured today, we're still a nonprofit. we just have this other division here they call capped profit. what that means, we've never

quite understood. that seems to be the division they're going after and saying this is effectively becoming the r&d version -- or situation for microsoft. >> the bigger question i have, if you're openai and microsoft, you actually want to settle this case? the truth is -- i'm of the view this case is all about discovery. this case has nothing to do with anything else other than -- >> they're not asking for money. >> therefore, if you don't want to participate in the discovery process -- >> write a check. >> the question is what kind of check could you write? is there a check you could wright? >> or does the richest guy in the world want a check? >> i don't think he does. the question is, how does this play out? >> let's zoom back, what's happening in musk's x world. he's trying to create xai, a competitor to openai, a chatbot called grok, unwoke or something. fine. it hasn't taken off. he's trying to raise money. he's unsuccessfully --

>> you're in the camp of you think this is not just sour grapes, you think this is a cynical play to compete in a better way -- >> yes, that was my initial read. here i am, elon musk, the richest guy in the world, the hottest startup in the world is openai -- >> i'm going to take the other side of that bet, which is i think he fundamentally at a visceral and personal level feels philosophically frustrated with what happened in a way that -- by the way, maybe right, maybe wrong, meaning he shouldn't feel the way he does, but i don't disbelieve he feels the way he does. >> feelings are great. do feelings work in a case like this or court? >> in this case they might actually. >> what could he possibly get out of -- in this discovery? what is he going -- what advantage does he get out of that other than maybe nuking a competitor so his platform could get better? >> well, that's the issue where i'm going. i'm not sure it's about nuking

the competitor as a competitor. i think it's about nuking the company that he feels on a very personal basis that he effectively created. this is like -- >> well, he's been taking credit since it became really popular, he's been taking credit for it. >> you're saying he shouldn't -- >> no, no, he was founding -- >> you say it in such a unique way. the reason i'm making the point, it's literally -- i try to put myself in other people's shoes to meet them where they are. he's somebody who looks at this and says, this is my baby. i helped birth this baby. >> but he left, too. >> well, he left under very unique circumstances. by the way, against the narrative or against him, you could argue one of the reasons he left is because there was an argument, a period of time where he was even trying to turn openai himself into a commercial entity. that's a separate argument about this. but i do think it's a very personal issue rather than a competitive one.

>> that too feels sour grapesish, right? >> doesn't matter. if he contributed -- according to this complaint he contributed $44 million to openai between -- >> that's not nothing. >> that's not nothing. >> the question comes down to, does the founding agreement stand or not? if they vee lated the founding agreement, i think that's -- >> he puts microsoft in a really tough position if this gets unwound because microsoft is so heavily dependent -- i don't know if we have any microsoft -- >> it may get unwound. maybe nothing happens but it becomes one of the great distractions for openai, for all of the clients who are thinking, do i want to be part of this or that, do i want -- >> it's good for google. >> it may be good for google, it may be good for a whole number of other a.i. companies, maybe good for even some of the stuff amazon is doing. >> or anthropic. this is a time for them. >> maybe there's a partnership they work out. >> could be. >> steve, nice to see you. >> when we come back, business and tech leaders are getting

more involved in local politics, trying to fix san francisco's issues and igema. "squawk box" will be right back.

the tech community in san

francisco is getting more active in local politics to try to fix the city's ongoing problems and reputation. kate rooney has more. hi, kate. >> hi, becky. good morning. the tech company here in san francisco is mobilizing to try to fix the city and what some have said is a doom loop in mayoral and city elections are the main focus. you've likely heard. none of that is good for business. many have blamed the city's progressive politics and are backing a group of more moderate politicians for office. tech's recent involvement in local politics started with the recall of the district attorney, who was criticized for being too soft on crime, a group of controversial school board members were also recalled at that time which emboldened some folks. >> those two being successful were a great catalyst. and i think i -- i could feel a

turning in like, let's just say, vibe shift, which is like, okay, we got this. we can -- with he can bring change to the city if we do the right things. so many of my peers in tech are leading the charge. >> there is also a venture capitalist leading the charge and entering the mayor's race himself, mark farrell, interim mayor with closer ties to business. >> there was a reason that technology industry was really founded in silicon valley and in san francisco. we can capture that once again. it's going to take a mayor that's going to be a leader on all the main issues of public safety and homelessness, but also a mayor that comes from the business sector that says, you know what, we're going to use tax incentives to welcome business back. we'll be aggressive working with the business community, not against the business community. >> farrell is running against london breed and levi strauss.

according to one poll, farrell is in the lead. lori has raised the most topping $3 million. sequoia partner and michael moritz and chris larsen have given more than $1 million to back the ballot initiative. >> kate, i guess from the outside, from somebody who doesn't live there, it's always felt like the technology guys ran it. there's this huge sense of frustration they don't have a say, things have gotten way out of whack and too far away from the ideals they're looking for? >> it's interesting. if you look back the past decade or so, there has been this sort of attack lash. the twitter headquarters, when that launched and seems there's been animosity between local government and tech. you've seen this animosity toward the big tech campuses on market street and here in san francisco. but it's interesting. you're seeing a little bit more, i would say, civic engagement by the tech community.

they're getting more involved and working closely with local politicians. same thing citizens are talking about. if you look at the polling across san francisco, it is some of the same issues that affect businesses. major things like crime, homelessness, this fentanyl crisis are the same things that businesses care about, but it's what you hear from the average citizen, at least based on some of the polling. you are seeing more chatter, i would say, in the tech community. >> kate rooney, thanks a lot. >> thanks, guys. coming up, the cancellation of the apple car project. we'll talk about that. plus the slow move into a.i. are investors growing impatient with apple? that's the question of the morning. the stock has been reflecting it. we'll talk about it after the break. take a look at the futures, though, as we head to that break. right now looking at red on the screen on the dow, off about 63 points. the nasdaq powering margalinly higher. we're coming right back.

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apple ceo tim cook announced wednesday the company is heavily investing in artificial intelligence. particularly generative a.i. seeing transformative opportunities for users in productivity, in problem-solving that, will this be enough, now to jump-start the stock? traded lower the last three months. the nasdaq now hit an all-time high matching its 2021 levels. joining us for a bear debate over apple dan flax, newberger berman research analyst. looked high and low. walter piecheck, analyst, do you feel lonely? anybody else a bear on apple? really, walter? that's heresy. >> definitely heresy. i definitely feel lonely sometimes and definitely frustrating when the company

posts month growth and investors continue to bid valuation multiple higher. >> recent development -- and you know, apple is amazing, because for a long time we've been waiting for that next, big product. whatever it's going to be, and they've managed to convince people that just the, the services and ecosystem and just how apple is a part of our everyday lives, that that should be enough to give it a premium valuation, but now, you know, there's not going to be a car. there's been criticism they're behind on a.i. is this finally a day of reckoning for you, do you think? >> i mean, joe, i think when they first came out with the iphone they were spending less than $1 billion in r & d. 3% of revenue. now spending $30 billion a year. a report yesterday on this car investment spent $10 billion alone, and it's producing no

revenue growth right now. you mentioned services. the services, it's a 10% grower that probably moderates. look at why services have grown in the last couple of quarters, it's not innovation. it's price increases. reminding the telco stocks i own, excuse me, i don't own. excuse me. that i cover. that, you know, no subscriber growth so increase price positive muster up, like, a 1% or 2% of revenue and yet investors still -- it's less now. multiple's contracted a little bit, but investors are putting this like nasdaq or growth-type multiple in a company not growing revenue. look, the market is going to be fine without apple performing. you can see it already this year. right? down 6%, markets up -- the past year, look, rough for us. stock's up 20% over the past year but market's up 30% and nasdaq up 50%. the -- go ahead, sorry. >> sorry.

turn dan's mic on. he's screaming apparently. we had to actually cut off his -- his -- dan, you okay? can you believe what you're hearing? >> good morning, joe. good to see you, as always. we're currently in the midst of a tricky period in terms of smartphone demand globally. china soft obviously. what matters in the coming months and into next year you're likely to see better growth. you'll see generative a.i. form part of the experience with iphone 16. if we step back and think about what the company has done over the last couple of decades with the ipod, clearly iphone, ipad, wearables, it's about getting the experience right. it's about integrated the hardware, the software and the services. a lot of what they work on does not see the light of day you mention the car. products and services that they do put out i think are differentiated. users value that. seeing that in the continued growth of the iphone in stall face and other keep piece to the

equation, you have a big, vibrant ecosystem. the real magic here is empowering millions of developers to write applications. they create value for themselves. obviously users get value and that contributes to apple's growth and ultimately, excuse me, generation of about $100 billion of free cash flow a year. we continue to like the name. >> and convinced? >> i'm not . definitely putting a lot on the shoulders of a.i. which we have no information today and talk about past developments. people thought they'd have a tv. tim cook said pulling the string on the tv and the car which never really materialized. it's not a blip in iphones. the replacement cycle has been lengthening for a decade. i mean, just talk to the operators and people are holding on ththeir iphones longer. to the company's credit. they're making iphones better, batteries are lasting longer. the incremental changes are not

incremental enough to get folks to upgrade fast enough. the narrative, return to growth next quarter. that's the narrative from the bull quarter. 5% growth in december quarter pushed out to the first quarter. 5% the next quarter. same thing's happening in june. look at the consensus estimate for june and, again, the analysts are expecting 5% growth. in the june quarter. we'll see what happens when they report the quarter and give the outlook and see if they can even grow revenue this quarter. >> jae, i can't even believe that, yeah, people don't even talk about the possibility that apple's not the answer to everything, walter. good to see both sides and, dan, time will tell. has been a couple of tough months, which we haven't seen in a while, but have you guys back, maybe. thanks. >> you bet. when we come back, richmond said president tom barkin joins us to talk interest rates, the economy and much more.

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good morning. it is the first day of march. major averages finishing last month in the green. the nasdaq needed that extra day in february to see its first record close in more than two years and a gauntlet thrown down. the a.i. wars. elon musk sues openai claiming they've walked away from the company's founding principles. and where does the fed go from here after this week's brand new pce data. we ask richmond's fed president tom barkin in an exclusive interview. all of this on this final hour this friday morning on "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with becky quick and andrew ross sorkin.

and u.s. equities fiche futures this hour marginally higher at least the nasdaq. we're focused on that finally the nasdaq joined the party. you would have thought. the magnificent seven and tech, wouldn't you think would have been leading the averages to new highs? just finally as of the close yesterday. hit a new high, from what did we say? >> higher highs. >> but from november -- >> 2021. first time -- >> november of 2021. >> november of 2021 and basically has been working its way back to -- to be able to be an all-time high territory. look at the treasurys this morning. you can see the ten year. it was yesterday. well above 430 and got some numbers, pce and the like, and we did see a little bit of a pullback in yields. >> talk about our top story of the morning. it is this, and it is explosive. elon musk suing openai overnight. the company he helped found and its ceo sam altman as well

claiming e they've abandoned 9 founding mission to help humanity. lawsuit filed in san francisco. lawyers say openai for investors and microsoft breaks its charter to help the world broadly. i spoke with musk at a doable conference about openai and whether the start-up should be a for-profit portion corporation. >> i named it openai, after opensource. it is, in fact, closeds for. should be, it should be renamed super closesource for maximum owe a.i. openai. what it actually is. gone from an opensource foundation, fy 1, 2, 3, to suddenly a $90 billion corporation with closed sources. i don't know how you go from

here to there. seems like a -- i don't know how -- is this legal? >> openai and microsoft weren't able for comment since that lawsuit filed. the piece of sound was from november of last year. compared to how musk and sam altman talked aqi aye close to a decade ago when i spoke to both of those men at a "vanity fair" event in los angeles. >> i think the happy vision of the future is sort of humans and a.i. and a acceptably operation and empowers a lot of individuals. not the single a.i. kind of governs everything we all do that's a million times smarter than any other entity. that's what we should work towards. >> i agree with what sam said. i mean, we are effectively already a human machine col

collective symbiot. like what society is today, a human sidewalk. but obviously i have an affinity for a human portion of that sidewalk collective. and -- i think, we need to be careful about development of a.i. making sure it is beneficial for humanity, that it's, that the future is good. >> what a world. almost a decade later looking at all of those men together. you know, the most interesting part about this when you talk about it, just what kind of discoveries we'll get to out of this lawsuit and perhaps maybe that's the effective goal of the lawsuit in many, many ways. >> yeah. in fact, joining us right now on the "squawk" news line to talk about it, jay clayton, cnbc contributor and, jay, put your legal hat on here. reading through the case on this, sounds like they are going to be looking at that founding agreement, founding agreement that, musk put together with

altman. not only did elon musk put a lot of time and effort into founding this company he put about $44 million of his own money and this lawsuit says that the defendants set aflame the founding agreement back in 2023 when they got into this new movement with microsoft and released chatgpt 4. what do you think about the legal strength of this case? >> first, it's a fascinating complaint, articulates history here in a way that's really interesting. much in line with the clips you just played. you know, just as a quick take on this case, i would summarize it as follows -- openai is at an inflection point. clearly you need the cooperation of large players, computing power, data, information to

develop its potential, and the question i think the lawsuit says is, as they have engaged with commercial actors, microsoft in this case, have they gone too far in giving them something where the promise of open and benefitive humanity is being lost? so if i were the -- the takeaway from this is we're at an inflection point in time, and is the governance of this company gone too far away from that core mission? i think the damage is, and there's discovery, but a request for what we call here equitable injunctive relief. saying, you need to rejigger how your decision-making takes place in terms of what's going to be available to the public, who you're going to partner with and the like, because if you go too far down this track, a corporation will be benefited much more than the public. that's how i sort of sum up --

now, and there's tons of atmospherics around this. musk is arguably a competitor with openai. there may be personal issues but i think that's the numb of the claim here made. >> do you think that claim is valid? that it will stand? under -- a judge looking through it? >> yeah. i think this is -- you have to always be careful when a complaint is filed because it's one side of the story told to their most benefit, and what we have to see here is, is this right? is this a question where you're giving one entity such a head start, and they put this pivot point in there having reached agi. have we reached such a head start where we've gone against the mission? and i do think people are going to have to sit down. most lawsuits, let's just remember, most lawsuits get settled. and people have to sit down at the table and say, okay. we know we need commercial actors to help, but what

additional governance steps will we put in place? >> jay -- this suit is unusual in that elon musk is the one bringing it and the idea of a settlement might seem like a sort of normal course scenario. very few things with elon musk are normal course. >> yes. yes. and, because elon musk is one of the few people in his own resources has the power of a large corporation. and he also has -- >> bingo. bingo! and so -- the idea that there would be a settlement, the piece i can't even understand, what the outcome to ultimately be. first of all this case could go on many, many years. my question to you more generally, considering the distraction this case is likely to create for openai for microsoft, potentially what it may do in the public sphere depending what discovery comes out to benefit the likes of google, by the way, may become a

beneficiary of this or other big players. do you imagine that a judge, at least in the first instance throws the case out or let's it continue? because that's going to be the fundamental -- that may have actually an even bigger impact than whatever you think the outcome of the case would be. >> yeah. yes. and andrew, you're heading -- we don't have the benefit whatever the defendant wos say here but hitting on, which the defendants would say slowing this down, stopping this, keeping these joint ventures and partnerships will actually hurt the public, because other commercial competitors other governments are going to get ahead of us. this is a race. we need to move fast. so a judge is going to face the fact that this is not something happening in the abstract. i think people are argues every day counts, and there's probably a very strong argument that any slowdown as a result of this case is going to be a problem. so -- >> jay, is your read of the case that a judge could -- i think

two views to this case. one is that effectively elon musk is asking for equivalent of adjuncttive relief. could a judge say i can't grant you that, but i will grant you discovery to continue to bring the case and the question is, obviously injunctive release to stop all of this immediately would become a massive problem for openai and microsoft. >> and microsoft. yes. >> discovery is, is going to be pretty complicated unto itself as well? >> and drew, immediate injunctive relief in a commercial case of this type is an incredibly high bar. look, handicapping that after an hour of digesting this i would think highly unlikely. some type of claim for equitable, how you govern the company, whether you're actually true to your governance documents is an interesting thing here, and there may be other parts. any time the public interest is

at play, judges think a little bit about that as well, andrew. this is not just one commercial party against another commercial party. you do have this idea of public beneficiaries and not-for-profits. >> jay, thank you for shining a little light on that for us. something we've talked about all morning, and i guess it will continue throughout the day and beyond. jay clayton. >> thanks. happy friday. >> you bet. still to come this hour, three can't-miss interviews. richmond fed president tom barkin and new york city mayor eric adams and more as "squawk box" rolls on. british announcer: rose is really struggling. it's something you build over time. american announcer: that's 21 missed cuts in a row. [car trunk slammed shut] for 88 years, morgan stanley has offered clients determination and forward thinking to create the future... crowd: stop it! ...only you can see. american announcer: rose, back in the winner's circle.

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welcome back to qb "squawk box." shares of hewlett packard enterprise falling. fiscal first quarter beat and sales dropped more than 13% from a year ago. hb forecasting quarter revenue below expectations. joining us hb president. good morning to you. let's talk about it, sir. looking at stock, which has fallen about 5% on the back of this news. >> yeah. good morning, andrew. thanks for having me. i just said we had a terrific, i will say, quarter on the back of the work we have been doing for a number of quarters. continuing to shift our portfolio to high growth. you can see the results, eps, gross margin improvement, 200

basis points, but revenue short of expectations driven by three key factor, i would say. number one tough year. everybody understand that, but second key factor was the slowdown in work secusecular, w suspect will continue short term, and even though we have terrific a.i. shipments, a big chunk of those shipments actually are deferred. meaning revenue now in the air, annualized int lies inventory r >> demand strong at a time revenue has been very, very tough. sound like going to guess tougher. no? >> no. what we said that we actually, just guidance reflected, working a slowdown. think about our cumulative a.i. holders now end of q1, see high

cycle of a.i. we actually booked $4 billion of orders and we have a $3 billion of backlog. so reality is we only shipped only a billion and even that billion dollar we shipped a portion in the service because of huge success with greenlake and particular enterprise to consume business and services. to employ a.i. is very expensive. we've seen a lot of traction in mobile training side with fewer companies as we go forward the inference inside it will be, in my mind, more consumers service. these are very expensive systems. >> and i want to read you something. this is from morning star this morning. we maintain our $16 fair value estimate of shares of hp. this after you reported what they call weak fiscal first quarter results. by the way at 1450 right now. once the bright spot, well, let

me say hp's main and markets continue to be plagued they say by weaker demand. you say you don't believe that's the case. bright spot of networking softening matching what cisco is seeing in the campus where hp largely plays. expect networking softness to weigh on fiscal 2024. what do you think of that a analysis? >> i think it's fairly balance, i will say. think about it, the working market has been a strong success for us in the last two years we had the $2 billion of revenue in that market and even this quarter we've got 2% of the higher baseline. but obviously now customers are digesting where we shift in the last few years. no channel issues whatsoever. even the channels are super clean and i'm excited about independent closure of the juniper acquisition, because we think about hp will play, it's going to play three key segments. networking, core of the company

going forward, cloud and a.i. and a.i. requires more network ports. not less ports. that's why when this cycle goes through, other end once we close the transaction we see a significant opportunity and upside for us particularly working in a.i. >> hope that upside comes. antonio appreciate it. thank you for joining us. >> thank you, andrew. >> you bet. coming up, two more big interviews. reaction to this week's inflation data from richmond fed president tom barkin. then, new york city mayor eric adams will join us for a wide-ranging conversation on the biggest economic challenges facing the big apple. gotham, manhattan, new york city, whatever you want to call it. stay ted.un you're watching "squawk box" on cnbc. trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley

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it is just about 24 hours ago we got the latest update on

the fed's preeferred measure of inflation. core pce prices rose in january up 2.8% from a year ago in line with expectations. major averages then gained ground in the pre-market and nasdaq went on to see its first record close in more than two years. to talk more about the latest inflation numbers, steve liesman joins us on set along with a very special -- what if i just ended there? talk about this. steve liesman joins -- good enough. >> elation throughout -- the television world. >> you are here with someone that will really inform us. >> much more than i ever would. tom barkin, richmond fed president. thanks for joining us around the table. takes a bit of courage to be here, right. >> face this rogue gallery here. let me start off. in an unusual place. rather than hammering you about what you think about interest rates and that which we'll get to, you started off many, many months ago with an idea about inflation. and the profound insight you

brought, inflation was not about an s abstract process, somebody has to pay them and tuned into companies have ethos and culture of raising prices compared to what it used to be. where are we at now in discussions with business people? culture of raising prices still in effect right now since it causes you concern about future inflation? >> good. thanks for your nice words. i've been saying that for 30 years before covid price centers had been beating to desubmission. you really didn't have the power to increase prices and consumers had run with the expectation that prices weren't going to go up. it's very hard to do anything. two years where all of a sudden people have power to increase prices and logic for it. wage costs, supply chain. you know, revenge spending. whatever. so given the opportunity they do it. now i definitely think we're on the back end of that journey.

when i talk to price setters they know that inflation has come down and they know that a lot of these extraordinary price increases, pricing pow sir no longer, in their hands you know, but i think they're still pushing. a little what we saw in the data yesterday. a fact that i think is useful. go back to the ten years before covid, 26% of the pce basket had price increases greater than 3%. look at the last 12 months it's 2.4%. 55%. over 3%. >> you still got a world where people are increasing -- >> pretty wide spread. >> more than normal or more than historic levels and offset by a bunch of places like used cars coming down, but not the spread. it's not the disburpersion we u to see. luckily offset by some of that prices coming down. >> in my mind when i think about the story you tell i think about a dam breaking. now you're trying to shovel mud

back over the flow of the water and put that dam back into place. what are the things people believe is required, one of the things slower consumer spending and slower growth but you don't seem to be getting that. does that make you pessimistic about the idea of bringing down inflation? >> the places it's coming down most nicely is in good. home improvement an example, you see slower growth. that growth has taken off the edge. whatever combination of excess inventories or big box retailers negotiating a little harder has brought prices back down. you may need that in the rest of the services part of the economy. you know, vacancies for example on theapartment side are rising slowly. you may need a little vacancies to bring the edge off that as well. >> let me go back to where joe started, which is, what was your view of that inflation data yesterday? do you see it as an anomaly or

raising concerns we're on leading edge of reacceleration? >> i try to discipline myself not to take much out of january. >> january in general? >> january data. weather issues, seasonality adjustments which are extreme and even more extreme because of a couple omicron waves during covid. i try not to look at january too closely. by the way, true last january, too. saw a blowout january. that's consistent wit story i'm hearing which is on the good side inflation is settling. on the services side not so much. dealing with this balance issue and let's see where we go over the next few months. >> do we need to rethink everyone learned about relationship of a strong economy and inflation? and is it possible that a.i. productivity could allow us to stay at full employment and -- not have inflation? i mean that would be amazing. would it not?

>> nobody's reooting against that. that would be great. productivity could be part of the story. you know, good productivity numbers the last couple quarters. take a four-year lens. you have to do that because of dislocations of the pandemic, you'll see productivity went up, went down, gone up. four-year number is about where it was before covid. a little bit -- so if you think a.i.'s going to come and bring great productivity, awesome. one of the issues i've wrestled with in my mind, to the extend cost increases are driving inflation in sectors like construction. right? how much is a.i. going to help you in those sectors? right? going to help you in a lot of sectors, professionals -- is it really going to help across the -- >> anyone at the fed ever said we're at x, 3.5% employment we need to get to 5 to cool off inflation? has anyone ever said that's what we are going to aim to do? >> i haven't heard anyone -- >> is it implied? if you think we need to do that or --

>> no. bring inflation down. by the way, with spending normalizing with labor availability increasing, a lot of supply side issues we had during covid coming down, inflation's coming down. 2.4% cheer that not criticizing it. on the other hand, just see how much more has to happen to get -- >> perfect world. i just don't know if it exists. if we could do it. you'd like that, wouldn't you? started saying maybe it's possible? >> i would absolutely love it. an interesting -- talk about that later. >> if you don't look at january and think much of it, if you see a similar sort of gain in, inflationary numbers for the month of february, is that something that starts to concern you? >> yeah. oh, sure. one data point is one data point. all of a sudden two data points, draw a line between them with three draw all kinds of geometric shapes. the more you see -- don't forget in the seven months before january, we got very good

inflation rates. in total. then in january had a not very good inflation reading. we'll see where we are as the months go on. i think it's a, an important time, because the overall numbers are likely to come down over the next few months because comps from last year weren't very good. rounding over, losing those high inflation comps. so we've got a shot here to bring inflation down very close to our target. the other hand monthly levelling come in a level inconsistent where we're going to tells something different. >> you don't snouound you're in hurry to cut rates. >> never in a hurry. >> and what could be deflation a thought, fascinating. have you focused on anything that was talked about in that regard? >> i haven't seen his comments. in the sector's he's in, an example. prices come down.

i mentioned home improvement. you're seeing prices come down. a lot of the goods where prices went up, transportation dcosts supply chains those coming down. a big part what we see on the inflation story. like i said -- >> can that become its own spiral, too, though? >> in theory, sure. i still see wage pressures, inflation pressures. hard 20 to imagine closing in that. put differently, just had a high inflation point yesterday. interesting you connect deflation right after that. >> tom -- the outlook right now, are you feeling a built of a swagger now, the market had seven rate cuts built in. came back down. now there's only three and a third built in for this year. do you feel you've won the battle in terms getting the market back in line with where you are? >> not spending time to have swagger against the market. i'm sure the market always wins.

look, all we're trying to do every quarter, put down our best forecasts and based on that forecast to try to figure out how you would run policy. the future always starts with the forecast not with the policy. so what do you see happening to demand, employment, inflation? based on that -- >> he wasn't, swagger. he was not -- >> so we have to do another one in march, but we'll see. the forecast has come in more consistent with our forecast and, therefore, the markets adjusted. i think if the, if the data comes in different we'd adjust. >> you still believe there will be rate cuts this year? >> we'll see. i'm still hopeful inflation's coming down and inflation normalizes. then it makes the case why you want to start normalizing rates. for me, starts with inflation. starts with demand. doesn't start with rates. >> and possibly a lot more normal than the past ten years. >> that's our star question. the question of, raise rates to

5.25, 5 and a third, why not more impact on gdp? >> the change is shocking after being at zero but absolute level is not shocking with what we've seen the last, the average over the last 30 years. what i can't -- >> 300 years. years under 3% interest rates are really holy focused in the last 20 years. >> how do we know this isn't we we should be and shouldn't cut ought all and end up at 6 permanently? >> how strictive are we? >> never answered that. >> folks i talked to in manufacturing and real estate, commercial and residential, home improvement, they think we're restrictive. certainly -- certainly having -- >> magnificent seven say, no? >> having impact there. one piece of data alike looking at interest cost as percent of revenues, personal and commercial sector come back up.

only to so many levels. so many refinance mortgage pay down credit card dead, so many companies refinance their debt. in aggregate impact of interest on the economy is i think somewhat on the cuff. >> we have to go. superstar guests are waiting in the wings. quickly, is there a chance there to be wait hikes this year and/or no cuts this year? >> the economists will tell us what to do. rate hike scenario is accelerated kind of scenario. inflation starting to spiral. i said that's not what i'm hearing talking to my contacts. always have to be aware of the possibility. >> did you say earlier you were going to come back in march? have to do it again in march? did you mean come back here, sit around the table? >> happy to come back if y'all will have me here. >> love it. thanks. >> appreciate it. when we come back, the impact of immigration on new york city and finances in the big apple. a very hot topic in this town. and around the country, frankly. speaking with new york city mayor eric adams. taking note of shares at new

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box." president biden and former president trump separately visiting and speaking from the u.s.-mexico border. it happened yesterday talk of a security bill shunned by many in the house gop conference. trump blaming biden for the broken state of things. tens of thousands of migrants that made their way into the country have come to new york putting a strain on some of the city's services. joining us to talk about that and so much more, new york's mayor eric adams. great to see you. talk about the migrant crisis and ask you, frankly, although do you blame for what's happening here? >> i think the goal is not so much pointing the blame. blame can go around in so many different sectors. that's not how we solve the problem. 177,000 asylum seekers migrants found their way to new york city and there's a way to solve the problem. we need this to go throughout

the country and allow people to work. what is more of the american dream than the right to work. you cannot prevent that if we want people to take the next step in their journey. >> but tell us about the battle that's been happening between the city of new york, the state of new york, and washington. you all, plus ceos in this city, called for federal funding from the white house, and that call has not been returned. >> well, actually, when you look at it, a real coalition has developed. you look at what's taken place in chicago, denver, houston, washington, d.c., and other local municipality. el paso, texas. no city should have to carry the load of the migrant and asylum seekers crisis. it's a national problem. the long term is having a real immigration reform that's taking place but immediately we need the proper funding, because it is impacting all of our cities at this time economically. >> there's a historical issue to

talk about. the sanctuary city status new york has, or has had. something that you are now trying to change. can you speak to that? >> well, we believe in a sanctuary city status of immigrants that are here to be allowed to continue to move forward in their lives, we're talking about a specific part of it that was changed under the previous administration. from the days of mayor koch and mayor bloomberg there was a clear indicator for those who commit serious crimes in the city, they should be able to be deported after they serve their time and i continue to believe that as a former police officer. we have a job of apprehending those who commit crimes, prosecutors prosecute and i think the federal government should use its authority after time served to deport the individual. dangerous people, no matter mile grants, asylum seekers or long-time new yorkers should not

be carrying out violent acts on new yorkers and asylum seekers here trying to take a small step but a small number of vileant and they're dangerous. >> talked about having these migrants work in new york, giving them an opportunity to work. have you ever thought just doing it on your own at this point? >> we would love to. trust me. i've turned over every legal stone to see how we could take, go about doing it, but if we do it, we could expose ourselves to violating federal laws as well as the city being sanctioned. would you believe i cannot even allow migrants to volunteer and give them a stifen. if i wanted them just to clean up the areas where they are staying. that's not allowed to do. when you think about this, this strikes at the heart of who we are as a country. all of our immigrants that have come to this city all of us in this country, we had authorization to work and earn our right to be here.

that's all the migrants and asylum seekers are asking for. >> one of the things you are doing as an experimental program to provide debit cards with cash on the card. this has created enormous controversy in the city among taxpayers who say why are we paying giving out money to migrants and isn't this only going to encourage more migrants to come to new york. the reason it's created such controversy is how it has been reported and distorted. we are required to feed migrants and asylum seekers as well as everyone else in our homeless system about 40,000 are in the homeless system that are not migrant and asylum seekers. we're required to feed them. so what i told the team to do is we have to find a way to do it that's less costly. 30% decrease in cost of the migrant crisis, and that we don't have food waste. we were able to do that. we're saving approximately

$600,000 a month. $7.2 million a year by giving individuals a card that allows them to buy food or baby supplies, spending $13 on food. cheaper, less food waste. this is a real win-win for us and the money will go into the local economy, because now we're going to local stores, supermarkets, we're going to hire local. this is a smart way to bring down the course and replace the money back into our city. >> mayor, a very direct and political question. when you look at president biden and look at former president trump and the migrant crisis that you're facing, which -- which one do you believe will ultimately help you solve that crisis faster? >> i am a supporter of the president and i think when you do analysis of this issue of immigration, this is an issue that's been played out too long on the political stage of our country. that's to be resolved one of the top issues voters are looking

at. i think that we can solve it now by taking some very clear steps such as the decompression strategy, funding these cities, allowing migrants and asylum seekers to work. we did almost 25,000 with work authorization and tps when it was recently expanded. we can go even further to some of the other cities and municipalities. >> mr. mayor, i've seen a -- you know, you can imagine, dressed up from 2019 and it was president biden basically saying, sounded like something from the statue of liberty. bring us your tired messes. why we're here. do you want to come here for a better life, come here. we want you to come. then rescinded, what, 90 executive orders at that time. i mean, it's clear where the $7.2 million -- i think we can at least describe getting rid of

executive orders. do you think the president could reinstitute some of those executive orders with sign of a pen back on and would you urge him to do that? in your situation? >> the most important thing i believe we can do during this crises is allow people to work. everyone who passes through the statue of liberty came here and even if it was a menial job it gave them the dignity and respect that everyone that is here deserves. think about it a moment. we don't hear about the ukrainian citizens that arrived here. we have a large ukrainian population after the war in new york city. you don't hear about them. know why? they have authorization to work. gave them financial support they deserve. did the right thing for them. we should do the same coming from south, central america and other parts of the globe. that consistenty would solve the issue.

>> talk about evs, social media and frankly weed in new york city. i want to talk about evps first. part include ev infrastructure and doing it in time when a lot of car manufacturers in the u.s. are actually pulling back on some ev ambitions. >> evs are here. electric vehicles here and will be here. you'll see a lot of laws shift and change to move away from fossil fuel. they're here. the problem is that if you build it they will come, and the building is the ev charging stations. so we have a real win-win here. if we proliferate our cities with charging stations, number one, you can deploy many of, individuals who know how to install them, to prepare them to fix them, to manufacture them. it would be a real job growth in the process and it's a win for the economy.

we know our economy can take this and our environment, when moving in the wrong direction with environment. i think evs are the way to go and we're going to continue to expand. faster chargers, technology getting better and better as we continue to use it more and more. >> on social media you're on so instagram, youtube, you're suing over the mental health crisis you say is happening in the city and costing the city $100 million. you've sued them now, partnership for new york says that it's the wrong approach. i'm curious what you think the end result of that suit is supposed to be, meaning, are you hoping to get dollars from them? are you hoping to change their behavior? are you hoping to do both? >> i think that all of you who sit around this discussion reflect on your children. you know what's happening at home. you know how addictive these devices and social media platforms, they have become to our children. increase in suicidal ideations,

increase in depression. our young girls no longer believe their body types are really part of their heritage and who they are. we are watching violence being proliferated. here in new york city, you're seeing young people ride on top of subway trains, getting 35 million views. we're seeing them steal vehicles because they're learning it on social media platforms. it has hijacked our babies, and what i want out of this is for our young people to regain what we all need as we do our personal development, all our neurologists and scientists are talking about less than 14 years old, the brains are not prepared to do this form of intake of information and some real unfortunate information that our children are receiving. so, we want them to improve, remove, and stop using algorithms that is harming our children at such an early age, and to pay for the cost of some of the mental health crisis we've seen coming out of this. this is the right thing to do, just as we did with cigarette

manufacturers years ago. >> you mentioned cigarettes. i want to talk about weed for a moment. just yesterday, you had a ribbon cutting for a legal pot shop that opened up in thursday, owned by a small business, a minority small business owner. i'm curious what you think of weed in the city. it feels, to me, as somebody who lives in this city, that every block you walk on, you smell it everywhere. it's everywhere. >> agree. >> and i wonder just how you, as the mayor, feel about that, and whether something needs to be done about that. >> and i concur with you. we had a law that was passed in albany. i thought the law had good intentions. we knew for far too long that the heavy-handed approach of dealing with small quantities of marijuana was really criminalizing large population of people, particularly black and brown communities, but we cannot allow this to get out of control. what does that look like? we're seeing far too many

illegal shops opening, because the police department, the sheriff, we do not have the local authority to immediately close down these locations. we should make sure that this is a well regulated, legal shops that are opening, and then we have to be clear about where you can actually smoke, like we did with cigarettes. people thought it was not possible to regulate where you smoke cigarettes, because we can't have our young children starting the day smoking marijuana, sitting inside a classroom, and trying to learn. we know what this does to brain development at an early age, and so i'm concerned, but i think if we take the right steps and the right precautions, like we do with any other substance such as alcohol, we can -- >> but what does that -- what does that require the city to do? what does that require the state to do? >> number one, in albany right now, we have been having conversations with the governor. she introduced it into our budget. we just need local authority to go and do inspections. right now, our police department

cannot go in and do inspections for marijuana. we need to change that. we need to be able to go up to those landlords that intentionally rent or lease their locations to people who are selling illegal marijuana. give us the authority to do so, and we'll clean this mess up. >> what about the people on the corner of the street just smoking every which way? >> the law allows you to do that. >> i know that. but that means that the whole city is just going to be overrun with it? that's part of the problem, no? >> i feel your pain, but i left albany many years ago. i'm no longer the state senator. i'm the mayor. new yorkers don't want this to take place, they have to share their voices in albany about open use of marijuana. right now, it is legal to do so. >> mr. mayor, we always appreciate having you on the broadcast. >> thank you. >> we are always rooting for new york. so, thank you. >> take care. >> you bet. >> got that, mac? all right. up next -- i'm kidding, kidding. we're going to talk -- johnny

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joining us on the markets, matt rowe, head of portfolio management and cross-asset strategist at nimura. one of the things you mentioned, and it is weird, why is

volatility basically zero, matt? is it -- you know the expression, it's quiet, too quiet. >> yeah, i think that's a great way to put it. one of the reasons why is because, you know, during the period of very low interest rates, selling volatility as a yield generator on top of equity exposure was a very popular trade. that sort of habit and that commercial momentum has really followed through into the higher rate environment that we're in right now and it's been a big part of a lot of portfolios, so there's just this constant selling of volatility in the market to generate yield, and we have had this glide path of upward higher in equity beta just across the board. it's been working, and people like it in their portfolios. it's much more complicated than that when it's all said and done, but that's a big reason for it. >> youdon't really minimize the importance of nvidia, and i haven't said this before, but nvidia, right now, is invincible. it just -- there's no one close, and you think that's not a

fluke, and it's not going to end any time soon? >> no, look, i mean, i remember watching you in the late '90s when i was early in my career, and all that we watched during the dot com era, and we've seen amazon and the likes of them experience multiplicative, exponential growth. nvidia is the amazon of today, and people like to have a core allocation in their equity portfolio to something that can multiply, not just appreciate. it's intertwined with the interest rate story. the lower interest rates are, the more attractive growth and momentum stocks become, but nvidia is really in the right place and the right time to be just dominating in artificial intelligence. >> thanks, matt. we got to keep it short. nvidia's not the most expensive a.i. stock, which is also weird. >> yeah. >> so, it's amazing. thank you. appreciate it. happy march 1st. we had a lot of people today.

we had tom barkin, mayor adams. we'll have him back. final check on the markets. you can see, got the nasdaq up just a little bit, but that would be another high, another new high, and then the dow jones indicated a little bit lower. we did five days this week. >> five. full five. >> yeah. >> how about you? >> sick. >> let's think about that four-day week. let's just think about it. put it on the table. join us next week. "squawk on the street" is next. ♪ good friday morning, and welcome to "squawk on the street," i'm david faber with jim cramer. we are live from post nine of the new york stock exchange. carl will be back on monday. let's give you a look at futures as we get ready to start the final trading day of this week. that doesn't do much of anything for me, probably not much for you either. let's move on to our road map, though, because that does begin