"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. andrew is off today. we have steve here. we will talk to him in a few minutes. steve kovach is here with the big story of the morning. the dow and nasdaq and s&p off the record breaking session. 20 records set this year for the s&p. dow futures this morning indicated up 50 points. nasdaq futures up 30. the s&p indicated up 6 points. if you are watching the treasury market, for the week, it was a good week for all of the markets. treasury yields have come down

after the fed meeting was more dovish than anticipated. two-year note at 4.6. if you are checking out gold prices, they are coming back down after topping $2,200. this is leading to the fmoc meeting. this is almost like march. in like a lion and out like a lamb. that is what we are watching today. $2,168. >> we have the same temperature. >> the turtleneck again. i'm freezing. >> it's march 22nd and 22 degrees. >> very cold. >> a mean, angry lion. >> you get the fake spring and back to winter. >> it is the rainy spring around here. >> that is usually april and may. >> april showers bring may flowers. >> once it's june. >> my allergies are kicking in.

>> once it's june -- >> the longest day of the year. >> basically winter when you hit june. >> it is friday. it's great to be here. >> apple's not happy. >> bitcoin, maybe not so much. down 6% for the week. all of the assets that really ran up over the last several weeks and giving back. week-to-date is 5%. oil prices are hovering around the $81 level. they were $83 earlier. >> we should put gold in the stack. >> we haven't done the stack in a while. copper and gold. >> gold. it hit an all-time high. it was up a lot. the heads of the nation's largest airlines want a sitdown with boeing. is that like an intervention? >> a skip level meeting. >> cnbc confirmed that the chiefs of united, american,

southwest and alaska airlines requested a board of meetings director about the problems with boeing. especially with the max door plug incident in january and the com company's response. boeing chairman and several board members are expected to meet with the airlines' ceos next week. larry should know everyone at united, obviously. those gatherings will not include ceo david calhoun and the ceo of commercial airplanes. why? >> skip level meeting. that's what they have around here. go over your boss' head. >> what are you doing about the calhoun guy? >> is that possible to do here? >> i think they do do it here. not with us, but with other people here.

>> can you send me a hierarchy? >> sure. >> i'm not sure -- >> who you should jump over? >> i'm not sure who to jump over or who i'm jumping to for the viewers i'm trying to satisfy. >> except for the ones that tweet you? >> they don't tweet me. they are blocked. i'm closing in on 10,000. >> 10,000 blocked? >> not really. five or six. five or six. >> muting is better than blocking. they can't complain. >> really? i want them to know. >> you want them to know? >> yes. see how they like that? they're dead to me. >> they can't complain if i mute them. >> i get the satisfaction. >> exactly. >> i get the satisfaction. they're dead to me. you cannot see the great things on my twitter. >> unless they log out.

>> i guess they could. i don't know. they're gone. i don't see them again. every once and a while, they are part of a chain. >> bye. >> i'm glad i blocked them. in the meantime, senator elizabeth warren urging the s.e.c. to investigate tesla's board independence. the senator calling out elon musk and the board over what she called the possible misappropriation of resources stemming from the dual roles of tesla and social media platform x. warren expressed concerns in july, but this time adds new concerns that recent evidence suggests that the tesla board lacks independence from musk and not operating in the best interest of shareholders. just in the last hour, bloomberg report shows the company is trimming in china. it produces the model 3 and

model y in china. the stock is down at this hour. >> i wonder if therhere was the life without elon musk and elizabeth warren. who knew? what about the world would not be better? >> who would you miss more? >> that's why i asked the question, kovach. i don't have to say it. it is all about asking questions. >> fair. >> how about a world without steve jobs? >> we've been there for a while. >> i know. we had tim cook to take the baton. >> he has done okay. >> what an incredible benefit to our lives apple has been. naturally, the government is going to take on apple claiming the apple ecosystem is a

monopoly. steve joins us now with more. i'm in the apple ecosystem. i don't want to leave. i don't feel like they're bullying me. >> i have good news. you don't have to worry about this for years. it's going to be ongoing. >> by the time it is settled, apple will be supplanted by someone else. >> we saw shares fall 4% yesterday because this was a really broad and far-reaching lawsuit and set of allegations touching on every product and service apple has. the app store and apple watches and siri and mobile payments and apple tv is all centered around the iphone which the doj alleges gives apple monopoly power in the united states. the alleged harm to customers and app developers say more

expensive products and services because apple makes it difficult to compete on the platforms. plus, collecting the digital fees for services sold through the app store driving up costs that customers have to pay apple says the response to the lawsuit is threatening who we are and the principles this set products apart and fiercely competitive markets. it is successful and it would hinder the technology that people expect from apple. that is joe's point as well. also, many of the decisions the company makes is to protect prev privacy of user data. this is expected to take years to play out and it is unlikely things will change any time soon. if apple loses this case, changes could look similar to what it is doing in europe under tough new tech regulations. opening the iphone and lallowin

third-party users to compete. the justice open efffficials ar ruling out the break yup of the company. >> con ssumers are not screamin about this. >> maybe about the text messages. >> the text messaging thing not being part of it is a bully situation. we bullied my dad to get one to be in the family chat groups. my uncle thejim, he got grief because it is harder to incorporate this things. competitors are angry about this and we need to rowprotect the comp competitors. it is a $1.1 trillion market cap. microsoft with the $1.5 trillion market cap. now we are going to take this?

it is a crazy cycle to see you are beating me so it must be unfair >> the best product is winning and it is unfair. there are a lot of things that the department of justice just get wrong about apple products and services. apple tv. apple tv plus controls the flow of free speech. is "ted lasso" controlling free speech? there are things that do make sense and they have evidence that some of these decisions they make in the name of privacy and the name of making the product better are also to keep people locked in the ecosystem. messaging is perfect. we don't want to put it on android or another platform to make it easier to text. that would give people a reason to switch to android. >> why not look at something? yesterday, we had tim wu here,

the architect tof this. >> he was on the mug. >> tim wu said they will probably not do something where you see a settlement. they will want to go all the way. >> we have seen that around the world. >> if that is the case, it is extremes in that crazy swing do not seem it is best for the american competitiveness overall. if there are minor issues and maybe not minor, but if you can find ways where it is unfair and say can we reach agreement, that would make more sense -- >> that is not what they're doing here. >> i know. >> it is everything. apple tv plus and siri. >> don't expect this to be the opening salvo and expect room for negotiations. >> i feel i need to go to law school to understand what you learn when you are there and where you end up thinking this

is a good idea. >> the other argument they have to make is customer harm. there are little things they can point to, but the other thing is the developers complaining. the argument we have seen in the eu is when developers have to raise their prices in order to absorb fees, maybe this gets passed on to you. maybe the fees need to be reconsidered or adjusted. the idea to do that is let more app stores on to compete on the fees there. >> we see when apple doesn't succeed. they can have terrible failures just like anyone else. >> they have. >> they have great success in this case that really stems from people liking what they do. you know, when you're in business, you know, books you can read about war and compare that to business. yeah, you do try to do better than your competitors.

you are not always thinking, golly, how can i make it totally fair for competitors? you don't do that. you can knit pick. this is another example about the government does best and it looks at the goose that lays the golden eggs and can't stand it and tries to kill the golden goose that lays the eggs. >> they don't think that. there are valid criticisms in here. >> i know. they don't think it, obviously. is that the first time that the government's doing something like that? what frustrates me the most is i like to get rid of everybody in the administration. everything they say about the business world, i would like to get rid of it all. >> gina raimondo is pretty good. >> you are bringing in someone who did not like apple because tim cook doesn't kiss his ring?

you have no idea why trump holds a grudge. what if he didn't? you could have -- that's not a panacea for this going away. >> it started under the trump administration. >> that's right. someone who is a principled libertarian or whatever. >> that is not trump. >> no. that's the issue. you don't get the hero you need or deserve. >> here we are. >> you've been bad this year. >> is that it? >> yeah. if that's what we deserve. >> i'm thanking you. thanks, steve. >> pleasure. >> you work for us, don't you? >> you don't have to say thank you. that's what the money's for. >> the programming note. the justice department anti-trust chief jonathan kanter will join us at 8:20 a.m. eastern time. when we come back, sneakers

and yoga pants. we have an analyst who covers nike and lululemon to breakdown the quarterly reports and the guidance that is trouncing those stocks this morning. nike shares off 6% and lululemon shares down 12.5%. reddit soars 50% on the debut, but the stock is not without challenges. orabt attalk me outh when "squawk box" returns. (vo) what does it mean to be rich? maybe rich is less about reaching a magic number...

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fedex shares are trading higher this morning. surging 12%. the company raised guidance despite the difficult demand environment. fedex says it will continue to trim spending and plans to buyback $5 billion of shares for the quarter with revenue falling 2% which was worse than analyst estimate. the company's eighth straight quarterly sales miss. that doesn't explain what is happening there. >> we had fedex pilots who are in talks with the company right now who were behind us this week. stocks up 12.5%. that is not going to help them in their negotiations with the pilots although they can point to the earnings misses. >> right. >> we'll see. nike shares under pressure this morning. the dow stock reporting better profits, but weak guidance for the quarter and fiscal 2025.

that has been pressuring the stock which is now down 6%. in the meantime, lululemon shares are sliding. they are getting punished badly on weak guidance in north america. that stock down 12.5% this morning. joining us is the analyst who covers both stocks. randy is the analyst. randy, it is easy to look at this and say this is a sign of a slowing consumer. you are looking at these two different stocks as two different stories. you are downgrading lululemon, but maintaining what you see with nike which is disappointing, but make improvement. speak about the theconsumer fir. >> first of all, thank you for having me on. the consumer, i think is okay for now. the consumer is erratic.

the shopping patterns is episodic and price sensitive. while the economy is okay for now, it is clear that under the covers, the consumers are getting more difficult and more choppy. as it relates to lululemon and nike, there are two problems here. first with lululemon, we did not downgrade it today. we had an under perform rating. we are the only sell rating on the street. what we see as a concern for lululemon is lofty expectations that the street has on the buy and sell side in perpetuity. companies don't last for every with the brand note ability. what we have seen in the last year was competition was rising in the athletic apparel state. particularly with alo. with the rising in competition,

we saw lululemon's numbers that would not last forever. we are seeing that now. that is the lululemon problem. as it relates to the nike problem, nike is going through an identity crisis in a way. they are making a lot of management changes. they went through a restructuring. they acknowledged they need to improve the product innovation which has been lacking. this has been a movie we have seen before with nike about a decade ago with the pipeline product innovation called. they had to recover with the stock fall. they are seeing that play out again with nike. that is why we don't like both. we reduced price target for nike this morning. with lululemon, again, we had a sell rating or underperform rating with this company. >> the price target is $300. that is below the $420 it is trading today.

>> the stock had a market cap before the print up $60 billion. you brought up fedex in the comments. fedex and lululemon had the same market cap. does that make sense? i don't think so. the market cap of lululemon is $$42 billion. for a company that generates $10 billion of revenue. we have seen this movie before with the brands slow, the multiples compress. lululemon is one of the most expensive stocks in all of consumer discretionary. one of the most in the stock market. we think the lululemon downside is substantial from here. we through the downside to the stock has just begun. >> management is saying the international expansion is going to help. they are talking about how more color is going to help bring the consumer back in. i love to dig deeper. we are almost out of time. nike is a dow component.

let's talk about china. china was better than some people had anticipated. >> look, for nike, china was fine. it was up 6% on the currency basis. you know, china is not really the issue for nike. what the issue is how the north american market plays. china is about 17% in revenue for nike. the majority of the business is europe and north america for the company. if nike cannot get its act together from the innovation perspective, they are talking about improving that going forward and if it doesn't work, they will continue to have stalling revenue growth or revenue decline for that matter in the next few quarters. that is why we have a hold rating on nike. >> what happened to it? >> say again? >> it is good to have a hold. you are lucky. what happened to it? i'm trying to get a five-year chart up.

you go woke and you go broke. is that part of it for nike? is that yes or no? >> i guess the answer is the market speaks. >> i haven't bought a nike product in five years, probably and i won't. draw your own conclusions. i don't like the treatment or dealing with that business in china and what happens with the uyghurs. i won't buy a nike product. that is part of what's going on there, randy. >> it's a good point. i think the other issue is that other brands are taking market share. think of hoka and on running. these are gaining pieces of market share beyond the points you made that collectively are creating issues for top line

going forward or in the past for nike. >> randy, thanks a lot. >> thanks, guys. i appreciate it. coming up, reddit making a splash on the first day of y trading. the social media company has challenges ahead. julia boorstin will fill us in. for me, a changemaker is someone who forging their own path and allows others to come along with them. one thing i noticed is there say difference between something that is impossible and something that is his hard. is this hard or just impossible? it may be a self-imposed constrai. op c dha tngs. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. babies, but for adults.

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a huge debut for reddit yesterday on the new york stock exchange with the shares up 48% from the ipo price which was at the high end of the range. julia boorstin joins us with more. she will tell us if it is prospects for reddit or a hot ipo market. which is it? >> i think it is a mix. there is a lot of excitement for the stock yesterday. reddit's market maker told me this was a picture perfect opening for an ipo with a ton of investor interest and massive volume. 48 million shares traded. more than double the stock. steve huffman told me it is just a day and tomorrow we get back to work. today, huffman is dealing with challenges. first up is the inquiry into the data licensing practices and the deal with google.

reddit says it is a huge growth opportunity. research says the ftc inquiry is a 5% overhang on the $54 price target for the shares. second up, stiff competition with pinterest and snap and particularly with meta. 50 times the revenue of reddit last year and massively profitable while reddit lost $90 million. in the fourth quarter, the growth rate was the same despite the size. then the third usuaissue is if redditers turn against the stock? many are advocating for shorting reddit stock. and fourth, reddit sees an opportunity with subscription in the user economy, but it may take a while. wall street estimating a $24 billion market by 2027. >> i think you said it might be a hot ipo market. not necessarily reddit. >> this company has been around

19 years. they only started to monetize it in the past three-to-five years. the question is whether the advertisers which are thrilled to have another option. google and meta on a duopoly. >> you have the meme guys to buy this? >> they did offer 8% of shares to their active redditers and users. i have to say the chartetter wa mixed. some enthusiastic and some critical. we will see how it plays out. we will see if they can accelerate the growth rate with revenue >> we need hedge funds to short reddit and they will all love it. >> we all saw the squeeze with robinhood. >> they have all of the people who work for the platform who t actually don't work for them.

>> i'm curious to see what they think and the opportunity to buy shares was a good thing or what they will take advantage of it. >> julia, thank you. >> pleasure. when we come back, another record-breaking session for equities, but are big cap stocks getting overextended? we will tap into that question next. "squawk box" will be right back.

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good morning.

welcome back to "squawk box." we are live from the nasdaq market site in times square. it's a friday. we have that going for us and if you are a bull, markets are looking up. dow futures are up 50 points. s&p futures up 6. the nasdaq indicated up 20 points. by the way, this adds to gains we have seen all week long. all three of the major averages were up yesterday. the s&p has set 20 new records for the year. treasuries market is showing a pullback in yields. the two-year at 4.61. let's talk more about the markets with the cofounder of data trek research. is sentiment reflecting what we just talked about, nick? >> sentiment in terms of how retail investors feel about the market? >> how much after the most hated rally in history last year?

i still don't think people are as bullish as we have seen in previous. >> that is absolutely true. we have seen money flows turn positive. they are still down on the year. we are two weeks into some interest in the market. nothing more than that. >> since the pandemic, i mean, if you can find a way for the market to do what it is supposed to do and that is confound everyone, we saw the economy and the s&p doubles. we consolididconsolidate for tw. everyone thought we were going to have to test the lows. we never did. where are we now? are we headed to significant all-time highs in the next couple years, do you think? >> the short answer is absolutely, in my view.

we're in a mid-cycle the market. not in a recession or close to one and not facing something that will be dire. those broad middle parts of the market, 8'82 to '89, shows the growth. there is one down year. it was 2018 down 4%. >> why would the fed be cutting interest rates in an environment like that? >> the fed had to jack rates to fight inflation, but they are scared of cutting too little in the face of a slowdown labor market. we are seeing the cracks from the labor market. particularly the top end. they don't want to be blamed for the next recession particularly going into the election year. that is why powell pivoted to three cuts from two in december. that is why they are staying with the messaging now. >> since 1981, all we do is go

up. we haven't had a ten-year period where we went nowhere. is that never going to happen again? >> we had close to one from 1997 to 1998 to 2007. >> that was the financial crisis? >> the beginning of dot-com bubble and came down on the s&p. aside from that, we had a pretty good run. that's what markets do. the u.s. economy is generally strong because the u.s. creates great companies and allows them to grow. we have a long track record. >> it drives the justice department crazy. >> they're not a fan. yeah. you're right. >> if only we could be like europe. people lost their jobs and looking for 3,000 on the s&p and holding to that.

we know some that don't come on anymore. we're at 5,200. 3,000 it 5,200. what's next? 6,000? >> you have a long and steady pace of three-to-five years. >> for what? 10,000? >> to double over five years. >> come on. >> yeah. >> from here? >> yeah. that's the way the markets work. my worry is it happens too fast. we're getting the conflation where the fed cut rates in '84 from 11 to 6% and the s&p doubled from 85 through september of '87 and crashed. and the tech bubble with gen a.i. we have two trends. my worry is we get the trends over 24 months instead of five years >> can technology or a.i. save us from our debt problems?

>> i don't know what can. i'm not sure gen a.i. can do. my hope is it saves us with that growth. productivity is a hard thing to measure and hard thing to improve. we can hope and that seems like a reasonable argument. the data is not there to support it. >> we can't count on policymakers to do the right things on the revenue or spending side. >> that's fair. i don't see any other -- i think you're right. >> the private sector has to save us even if there is headwinds from what the government decides to do. a.i. and innovation might save us? >> that has been the way for the last 25 or 30 years. >> the three most pertinent words are many things happen in spite of. >> in the end, the right things happen. >> i wonder why.

we can screw it up. we're trying right now in certain ways. nick, thank you. >> thank you. >> enlightening and good for international happiness week. >> yeah. >> if we're going 10,000 or the s&p. coming up, the communications sector making a connection with investors. we'll look at names to watch in the economic moves with "sectornomics" next. get the best of "squawk box" in our daily podcast. it is all equally good. follow us on your favorite podcast app and listen any time. we'll be right back. bold. what straps bold to a rocket and hurtles it into space? boring does. boring makes vacations happen, early retirements possible, and startups start up. because it's smart, dependable, and steady. all words you want from your bank.

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it still does. what can you do with spy? ♪ ♪ [thunder rumbles] ♪ ♪ welcome back. the communication services sector has been on a tear over of the last 12 months, but is there room for even more gains through dividends? dom chru joins us for "sectornomics." >> becky, this is not the sector you look for with dividend payments. the .75% dividend payment. the category makes up for it. the technology is the best in

the s&p over the last 12 months. if you look for dividend payments within the sector, it may be beneficial for the strength before you make a dividend decision. sometimes the dividends can be big for a reason like dropping or falling stock prices. we ran a screen with the cnbc pro screener tool to look at the s&p 500 for communication services that have had stocks which were positive for the last 12 months and above average dividend yield of 0.75%. with the parameters in mind, you have four stocks that pass. here are the three that have the biggest dividend yields. verizon with 6.6% dividend yield positive price. omnicom and comcast here with a 2.9% dividend yield. t-mobile did not make the graphic for spacing reasons.

becky, keep an eye on those as payers in the sector. back to you. >> dom, the question is on dividends is are they safe above 7%? >> becky, absolutely. that's the reason why we have the screen in for price appreciation. at&t has a massive dividend yield. it did not make the screen because shares are duown in the last 12 months. >> dom, what happened to tv newser? i did the regular cbs -- >> i don't know, joe. we will talk about it later on. i feel better. maybe much of america does because everybody's brackets bust. >> i was eight out of 3 million and now i'm doing well. i had 13. that's not great. >> that's not bad. >> i'm done now.

>> we're all done doner? >> who do you have? >> uconn. i live in connecticut. >> you are coming back. >> just like scottie scheffler. >> purdue got wiped out. >> i know. so did houston. uconn lost to creighton. when we come back, we will talk about much more important things. the senate has a bill to force chinese tech giant bytedance to divest tiktok. we will talk to mitchell green, the founder of lead edge wpital. weill talk to him about the controversy next. "squawk box" will be right back. >> announcer: sectornomics is sponsored by sector spdr etfs.

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welcome back. tiktok under fire in washington. our next guest has a unique view as a bytedance investor. joining us now is mitchell green, he's lead edge capital founding partner and, mitchell, thanks for coming in today. good to see you. >> thanks for having me on. >> how big of a stake do you have in bytedance? can you tell us? >> we don't get into specifics of our investments. but it is a pretty material stake. >> how long ago did you get in? >> i think we first invested two or three years ago and recently bought some more. >> this is a company with an incredibly rich valuation, if you ask anybody on the street and what it is going to be worth. however what is happening in washington right now really throws this into an entirely new world view, i guess. what are you thinking right now? >> for me, headline number people would say 200 billion, the company was buying back stock at 270 billion. that seems crazy.

what people should remember is two years ago, two and a half years ago, bytedance was worth 200 billion and facebook was worth 300 billion. now facebook is worth 1.3 trillion or thereabouts, bytedance is worth 240 billion, but the companies are roughly the same size. when one is growing 3x plus faster. bytedance is an incredible business. what people in the united states need to remember, so, first, i am not a policy expert, right? but what people need to remember is bytedance, you know, tiktok u.s. is a small part of the overall business. it is an exciting part of the story, for sure. but relative, you know, not profitable, and relative to the overall size, it is a very small part. >> so you're looking at what happens in washington as almost a non-issue because even if the u.s. part is shut down or kicked

off and sold, you're looking at bytedance overall. but let's talk about the -- >> the u.s., for sure. >> you got the phouse passing a bill saying you have to ban it. the senate received intelligence briefings this work and the senators who came out said, wow, this is a really concerning situation. so probably is more likely to get fast tracked than it was at the beginning of the week. >> it is going to make a lot of great news headlines for the next many, many months. but i think there is a lot of different ways you can see it play out. in one way, it actually, for, like the potential prospect future ipo, it actually would probably help settle like some news, you would know we're not -- uncertainty about going public. i think -- let's say the senate tried to say they voted, that's long uncertain, if they're going to or not. i know a bunch of senators said,

listen, maybe we should be looking at more, like, children around social media for all the websites. >> anybody who is on the senate intelligence committee, a lot of other people have said the ways that they can mine your data and spy on you are eye popping and more shocked the more they hear about these things. >> what i will say is if the u.s. government is going to try to force a chinese company to sell it, they better be prepared for yum brands and mcdonald's and apple to be thrown out of china. and it is going to be tick forfor in tock, right? >> national security is a different issue. >> yeah, yeah. >> if you think it is a national security threat, i can see them throwing it out. i understand your point. you as an investor are saying you wouldn't sell, you wouldn't get rid of it -- >> buyers. >> you've been buying. >> if it was kicked out of the u.s., we would not -- we would not sell, no. i do think there are a lot of companies in the u.s. that are

extremely interested in this asset. what will be interesting is will the ftc relax regulations to let other companies buy it. what would a company like amazon or facebook or microsoft or oracle, who already has a huge amount of data, pay for something like this asset? >> steven mnuchin came forward and said he's trying to put together a group of american investors. i can see u.s. regulators signing off on it much more easily than i can see the chinese government signing off on this. >> 100%. >> if they are forced to do something, i have a hard time believing that the chinese are going to say -- they would rather shut it down burn it down than allow american politics to tell them -- >> no surprise that donald trump came out in support of it. he knows the millennial vote is going to -- >> in support of it, but then he was -- had his ear turned by steven mnuchin, his former treasury secretary, who said this is better in a sales situation. >> we'll see. it is going to take a long time to play out. >> you don't have security concerns about it?

>> i think there are very different opinions on both sides of the aisle. >> on the chinese government -- >> on both sides. >> you don't listen to our government with maybe a little more -- >> i have -- go look at the apps and tell me, like, you know, how much they -- do they really care about this stuff. who knows. i have not read the intelligence briefing, none of us have, but i know that people make big deals about big things and there are senators on both sides that will support it, there are senators on both sides that probably won't. we'll see. time will play out. but, again, such a giant business outside of -- >> mitchell, thanks for coming in today. mitchell green. >> coming up, we got elon musk and tesla now in the cross hairs of, again, senator elizabeth warren. she's up for re-election this time around. the company's board independence. more on that story coming up. at 8:20 eastern time, the

head of the justice department and antitrust division u.s. attorney, assistant attorney jonathan kanter on the government's case versus apple. all right. "squawk box" coming right back. >> announcer: this cnbc program is sponsored by truist securities, experience expertise, execution. they're waiting for you. hey, do you have a second? they're all expecting more. more efficiency. more benefits. more growth. when you realize you can give your people everything, and more. thank you very much. [applause] ask, "now what?"

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futures ticking higher after another record-setting oday for stocks. more on the market optimism. fedex helping the cause this morning. surging double digits after earnings beat the street's expectations. we'll break down the quarter. and senator elizabeth warren calling on the s.e.c. to investigate elon musk and tesla's board over governance issues. musk striking back on x. we have those details straight ahead. the second hour of "squawk box" begins right now.

good morning and welcome back to "squawk box" on cnbc live from the nasdaq market site in times square. i'm joe kernen along with becky quick. andrew is off this morning. take a quick look at the futures, which we have been mentioning for most of the morning, after that couple of big days this week. big, big days. we'll talk about why and whether it makes sense in just a second because it is based, i guess, mostly on fed speak and what we have seen and here is where the treasuries settled out, after all the conjecture and all the words that we wasted, not wasted, but expended on what the fed -- what jay powell said after the two-day meeting.

4.24. crypto, it has been down a little bit for the week, but let's not forget where it was a month ago or two months ago or five years go or ten years ago. 64,000. let's bring in kelsey barrow, referencing some of this stuff, kelsey is thinking about, fixed income portfolio manager at jpmorgan asset management. thank you for joining us. what is amazing is you said, yeah, there is a lot of fed conjecture about what our own central bankers did, but -- and it was dovish. it was crazy. we'll talk about it in a second. but you think even bigger development was what happened in japan and i've already -- we kind of laughed about it, after their eight-year -- an experiment you can do in an afternoon, okay. you try to test something, you learn -- an eight-year negative interest rate experiment is not an experiment. that's a big old mess that didn't work. >> right. and they have officially exited that experiment. so what we saw this week was the

bank of japan moved out of negative interest rates after eight years, they also removed something called their yield curve control policy and essentially what they're doing is saying, all right, we're going to raise up our hands and say let's let the market dictate what the price should be and what the yields should be and jgb is more than what we have been doing, which we have been tightly controlling them for a really long time. now, why does this matter? so i'm a global fixed income investor. just a few years ago, you look back in 2020, there was 18 trillion in negative yield in debt in the global fixed income market. what did that do? that caused most investors to structurally underweight fixed income in their portfolio. honestly i don't blame them. who is investing in negative yields? not me. that tide has really turned in the last few years. and there is finally yield in fixed income again. and i think that bank of japan decision is that last puzzle

piece that really is bringing us into a new era of structurally higher income and it is a better position for investors who want a 60/40 portfolio. >> can you tell me why we keep trying either way to price controls after -- when did we figure this out, that the market needs to set prices or else there is dislocations on either side and we tried it again, we tried it -- i remember wage price controls under the nixon administration. but now we're doing it with maybe drug prices. when do we learn? why do we keep trying again? it is going to work one of these times? >> for the bank of japan and the japanese economy, they had a unique situation. they were dealing with deflation, the ultimate number one enemy of a central bank. that mindset can become very engrained and hard to break out of, and that's why they went very full force over the last many years to break out of that

mindset. and actually, we can debate the efficacy of negative interest rates versus some of the other things that they did. but, we are seeing wage growth in japan again, which is a really different paradigm than we have seen in the past. now, here in the u.s., on the other hand, the fed is worried about too high inflation, too high wage growth, looking at those trends and how they're coming down. japan is just trying to get into a more healthy price wage dynamic. >> when you heard -- okay, let's bring it home, anyway. what was -- why was the asymmetric risk that looked to me like it was on the economy slowing too much or somehow powell decided, okay, did he say 2.5, 3 is not too bad, we're worried about a recession, or what caused him to take a different perspective on what the biggest concern was? >> so, i think we need to

realize that this is not like a normal easing cycle or the easing cycles we have seen in the past few. when did we last cut rates? it was because of a pandemic, it was because of the great financial crisis, it was because of a tech bubble. those were, you know, very serious situations where the fed was responding to significantly higher unemployment. this is not one of those situations. the fed, i would describe it as fine tuning, and i think we need to keep an open mind to the fact that in this easing cycle, the fed is doing it to elongate the cycle, not to respond to materially higher unemployment, and that means that it may be a bit shallow, it may be a bit more orthodox, it may be start and stop. think about in 2015 the fed hiked rates once at the start of the cycle and then waited a year until the last hike. so, it is really going to be data dependent from here. >> it is not traditional. it is not what we have seen the last 25 years.

but it is very different than what alan greenspan used to say. because when we talked to alan greenspan, he would say, yeah, we have two mandates, but you have to pay attention to the inflation one, everything else will follow from there. what you just described is bankly saying, we're not going to pay attention to the inflation part of this, we're more focused on the jobs creation and looking at that part of the economy. very different. >> it is a dual mandate, so they're trying to balance both. >> but most central bankers would have said we really just focus on inflation. >> and i think the inflation is still the wild card. so, we get pce inflation on friday. the market is closed. i think chair powell next friday -- chair powell is also speaking on a market close, so get ready for an interesting monday morning in the bond market. but ultimately it is the inflation data that still matters. and part of what is giving him the confidence to say, yeah, we may cut rates somewhat this year

is because he is expecting inflation to continue to slow down. and, by the way, if you look at pce inflation, both headline and core in a year over year basis, they have a two handle on it. it is not at two, but it has come down about 3% from the peaks. so, they made a decent amount of progress so far. >> i think it is more that we have all sort of -- we already had the mission accomplished banner for the soft landing and i think they're petrified of causing a, i don't know if it is a recession, but no one is expecting now, that's when they come. if you believe anything about the inverted yield curve there is still time, still time for something like that to happen and there is a lag on all the policy effects. do they know something we don't know? do they see some cracks in the economy that we don't know about yet? >> well, i'm not sure if they see anything we don't, but i do think that they appreciate the lags. so i think they appreciate the fact that -- >> got to appreciate the lag. we need to say that. appreciate the lag.

>> yeah. >> i'm going to do that. >> yeah. they appreciate that there is a lot that they don't know. and, i mean, just think about where we were sitting at this table, 12 months ago, and it was for certain we were going into a recession. because there was a regional banking crisis, svb had just collapsed, right? there is a lot we don't know and i think that they appreciate that, and that's why they're in this position of max flexibility. but what we're hearing from our boots on the ground, our credit analysts, who talk to the companies who are impacted by these interest rates, is they're saying actually this is the best these companies have felt in quite a long time. and so, in our world, that's not just investing in treasuries, but also investing in things like investment grade and high yield credit, where you don't have to deal with the inverted yield curve. in fact, you can return -- you can get yields of 7% to 8%, that's equity like and you're higher up in the capital structure. we think it is a pretty good time for that.

>> appreciate the lag. mind the gap, when you're on amtrak. remember that. right? you got -- don't step in -- do you mind the gap? >> yes. >> yeah. >> 100%. >> yeah. just reminding you. subway too. subway too. do not forget. kelsey, thank you. appreciate the lag from now on. you may have coined a term here. >> all right. >> have you coined any before? i think you have. >> maybe this is first one. the first one that matters anyway. >> a good one. i don't think we do appreciate the lag enough. liesman does. >> i agree. when we come back this morning, fedex delivering for investors. that stock is surging this morning. last i looked, it was up 12.5%. we're going to run through the numbers and talk about the company's guidance next. and then, elizabeth warren calling on the s.e.c. to probe tesla and elon musk erov governance issues. we will talk about her six-page letter and tesla's board. "squawk box" will be right back.

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fedex shares are trading higher this morning after beating expectations. it says earnings beat, which is a noun, somehow. brandon oglenski joins us. so, what was in here that was surprising to the street and to you? >> hey, joe, hey, becky, good morning. great question. i think the surprise here was not so much that they technically beat the quarter. people got negative. there was some weather events. the airline will lose a little bit of money. the bigger issue is that incrementally they cut some costs and committed to giving about $2 billion out incrementally next year. and more importantly, they're moving to fedex one next year which is merging express and ground delivery operations here

in the u.s. for customers, that's goingto be a big change. today, if you ship express and ground, two trucks show up, two different pickups, so it is going to go to one pickup starting maybe next year and over the course of the next two to three years, it is going to merge into one fedex. i think that's why people are really excited here. >> that might explain it. it is kind of weird that the -- like the world leader in logistics, and they have to -- just watching this company over the years, the way that it has managed itself, they still got logistics that they can streamline? >> well, and fred smith is a great guy, but they have run separate operations for about 30 years between ground and express. if you look outside today, you'll see a u.p.s. truck, express and ground packages go on the same network there. that's what fedex is pushing toward. a company that is turning around $6 billion of operating profit today, we see duplicative costs in the networks of about$6 billion, that's very similar to what management is targeting to

get out by fiscal 27, so three years from now. we're talking about potentially a doubling of earnings. very big for the stock. >> yeah. had the same multiple. when they said demand, in spite of demand, we just had someone talking about how strong demand is in -- looking for weakness in the economy, having trouble finding as much weakness as we had expected by now. what are they talking about? >> well, overnight shipments were down about 3%, ground shipments were flat. we were looking for a little bit better there. i think the retail supply chain is getting back to life. i think l.a., long beach imports are up 30 or greater than 40% in february. so, the retail supply chain really contracted for about 12 to 18 months as we destocked. we're talking about lululemon and nike, but we think the consumer is on a good track and this is going to feed into better fundamental outcomes for the company looking forward. >> you watch the transportation group and we can glean things

about the overall economy from the dow transports, right? what is it telling us, the demand picture? >> railroad volume for the first time is up the last two quarters after contracting for about two years and, again, i think a lot of that was driven by retail stocking. the supply chain just got whipsawed so much during the pandemic. everyone thought goods consumption is going to be up 10%, extrapolated, we brought too much inventory into the country, we went through a very big correction so arguably we have been at a freight recession now for over a year. i think we're finally exiting that. >> and as far as margins go, what could the company hope for with some of the things you're talking about? >> consolidate. they're about to financially merge their ground and express operations. >> ground generates 10% or 11% margin, which is okay. express business is like at 2% or 3%. so the opportunity is really to get that to, you know, midteens level. that's where you actually generate an adequate return. >> how do they get to that

point? is it just pandemic stuff? you hired a lot of people and made sure you were getting things there when a huge surge in demand came through? >> that's part of it, becky. honestly, if we go back in the history of this company, 30 years, express profitability is probably average around 5% or 6% and the good years they can do eight. we argued that never earned its cost of capital. i think the big reason has been the separate ground and express operations. so, as they look to merge those, i think that's where the real margin opportunity is. >> we had the pilots here yesterday. for fedex. what are labor issues right now at fedex? and just how about workers? >> well, this is a pretty important distinction between fedex and u.p.s. on the pilots, that is one of the biggest unions, one of the only unions here in the u.s. the rest of the employee groups are not represented. i understand that the pilots issues here, there is a little bit less flying going on. what we peaked during the pandemic, that's come down.

but they're also without a contract now for a couple of years. if that's important to them, but more broadly, as they look to merge the operations, i think there is going to be a lot of head count reduction through attrition, especially front line employees, which is just to get the company much more efficient, much more sustainable. it creates a pretty good growth platform for them. so, they're going to compete with a non-union workforce versus a unionized workforce at u.p.s. this is a pretty important distinction. if you look at the less than truck load carriers that we covered, small freight business, but non-union carriers have really taken a lot of share from what was a very heavily unionized business. >> yellen. >> yellen is out of business now. >> why? why are they taking share? >> it comes down to pay rates for union versus non-union carrier, very similar. we think it comes down to work rules. if you're going to make a lot of money as a driver, can we ask you to do a local run versus an over the road run or maybe help

out in the terminal? if you're a unionized employee, your job is strictly defined. we think that's impacted service over there. so the non-union carriers are providing better customer service and that's how they're winning share. >> yeah. all right, brandon, thank you. >> thank you, joe, thank you, becky. >> you're welcome. when we come back, a look at other premarket movers, we got the futures this morning in the green ahead of the open. yesterday, all the major averages up again i think for the fourth day in a row or something. s&p set its 20th record high of the year. this morning, dow futures up by 56. s&p futures up by 5. the nasdaq up by 5 as well. "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. what song did mtv use to launch its television network dedicated to music videos? the answer when "squawk box" returns. good thing i had aflac. hmmm the cash i got from aflac

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you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather.

where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart! and now the answer to today's aflac trivia question. what song did mtv use to launch its television network dedicated to music videos? the answer, "video killed the radio star" by the buggles.

the video debuted on august 1st, 1981. >> that is the worst song to have stuck in your head for the rest of the day. ♪ video killed the radio star ♪ sorry, everybody. let's get over to dom chu with a look at this morning's premarket movers. dom? good luck. >> thank you, but no thank you for that. anyway, now that that's stuck in my head for the rest of the day, we'll kick off the morning movers with the stock of the week, reddit. the newly minted public company is down roughly 4.5% or so, just around 200,000 shares of premarket volume after the social media platform soared by 48% in its debut on the new york stock exchange just yesterday. shares did get as high as around $57.80 not long after the opening bell, trading at 47 with an open. ipo price was 34. it got as low as $45 and change

at yesterday's closing price, by the way. reddit is worth around $9.5 billion. keep an eye on that. we got a couple of big earnings headliners on the move as well. both in athletic apparel. lululemon shares down now, 13% down, around 45,000 shares of volume. the maker and retailer of high end yoga apparel, athleisure products reported better quarterly profit and revenues, but the forecast came in below expectations driven in part by what the ceo calls an unfavorable product mix for current demand trends. so some of those things, you know, attributing to 13% drop there. we're going to end with the biggest athletic apparel and footwear company in the world, nike. the dow component is down 6% or so, 200,000 shares of volume. it posted a beat for profits and revenues, but growth in china, that key market continued to show signs of slowing down and nike's current quarter and full year guidance was viewed as somewhat disappointing as well. by the way, analysts at rbc

capital markets are downgrading that to a sector perform from outperform, also cutting the target price to 100 bucks, it was 110 target before that. for more on rbc's nike commentary and other big analyst calls of the morning so far, head over to cnbc.com/pro, subscribers there can get more details on the biggest analyst calls of the day. joe, nike, a big one. i'll send things back over to you with "video killed the radio star." >> somebody suggested "friday i'm in love." >> you didn't end because of air jordan and stuff like that, you didn't end on nike to talk about the tournament, that wasn't your segue? >> i could have, but i like optionality.optionality for the things because sometimes we don't have a lot to talk about

them. i was talking to mike over here off camera, one of our camera guys, and he basically and i were talking about the fact that nc state is pretty much the hot team right now. so nc state, texas tech, thank goodness sanford didn't beat kansas or else even more would be busted up than we thought it was going to be. >> we know there will be blood like the movie, in terms of bracket losses. i just said there will be blood. that probably means i'm talking about january 6th. i didn't mean a bloodbath. oh, my god, did i say that? >> daniel day-lewis movie. >> that's what i meant. what about tv -- the only good thing to ever come out of tv newser was that we did -- the only good thing, believe me, was -- now we don't even do -- we don't even do that anymore. >> i think, you know, the heyday

a.j. katz at tv newser is the one who got everybody going, right? >> there would be 40 of us playing and, like, i think i would be doing well right now. >> you always have done well. >> no, you won. you won. i remember who you won with. >> once. >> north carolina. >> no, i won back, i want to say, what was it -- a long time ago. uconn that won that year. >> no way. the repeat from uconn and the repeat for dom chu. >> yeah. and i just figured it was a sign when scottie she cheffler was t first player ever to win back to back championships, so i'm thinking this could be a back to back year. >> they took rutgers star shooter cam spencer. >> yes. >> she still -- you're still -- >> i'm with them. i'm with them. luke murray, assistant coach. i picked uconn too. >> thanks, dom.

thanks. coming up, senator -- we'll watch each other. i'm on the cbs bracket. i'm with 3 million other people. much harder. >> we're still in first. >> i was in first for eight games. senator elizabeth warren urging the s.e.c. to investigate elon musk and tesla over board independence. that story is next. later are remote workers more productive? no. it says -- we have some new -- i can answer that. we have new data on the topic and we'll share it with you. "squawk box" will be right back. (grunting) at morgan stanley, old school hard work 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

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urging the s.e.c. to investigate whether tesla violated regulations over board independence. joining us now is tim higgins, "wall street journal" reporter and cnbc contributor. where do you think this is coming from? >> well, it is not the first complaint or first letter the senator sent regarding elon musk. and, you know, it is open season in some ways, an actual question about the independence of the board, it is not the first kind of question that is raised in recent months. we have that judge in delaware who raised similar concerns about the independence following that massive pay package and

rescinding that pay deal. and so, it is the question on the table. >> is this something you think the s.e.c. will take up? the s.e.c. has tangled with elon in the past. and doesn't seem to have come out on the -- with the upper hand in many of those wran wranglings. >> that's a good question. we know the s.e.c. is also investigating elon musk and his efforts to buy twitter back in the day. they're definitely on his radar and there has been lots of back and forth in that regard. the question about the board independence is hanging in the air, and the senator has -- this isn't the first letter she has sent asking for a review of the situation. and, you know, it is also kind of -- kind of fitting with the relationship between her and elon musk over the years. there has been a lot of back and forth between these two over this issue, but also taxes and

just kind of political alignment these days. >> the other probably more important story facing tesla today is that it is slowing down production in china, which is the world's biggest ev market. there have been questions about ev electric vehicles all over the planet though in the united states. consumers seem to be slowing down with their adoption of the entire issue, some of the big three pushing back and saying they're going to slow their manufacturing of electric vehicles as well. how do you see this playing out because tesla is the biggie? >> yeah, it is an interesting kind of dynamic here, right? consumers in general haven't necessarily bought into the idea of the electric future. when they do buy into the idea of electric cars, they tend to be buying teslas, tesla has been the clear big winner in this evolution. and so, the suggestion that tesla is seeing some softness in the market, or not seeing the growth that it has seen in

recent years is on one hand, you know, troubling for its growth prospects, but also in some ways not that surprising given the radical amount of growth we have seen in the last few years from them. >> maybe some context on that. i was a little surprised reading more deeply into the story. tesla basically told the workers in china to only work five days a week, which is kind of funny. let's slow it down to an american style workweek. how big of a slowdown is that really? >> yeah, well, you know, it is interesting, elon musk has talked many times about how he prefers -- he really admires the work pace of the chinese workers when he goes there and visits. but, yes, any suggestion of slowdown in china for tesla is a worrisome sign. and it kind of ignites concern among investors who are already concerned about warning signs from the company that growth this year was just not going to be what it is like -- been like in the last few years. earlier this year, tesla said it was going to be significantly

slower, but in recent weeks we have seen more and more signs that perhaps analysts and other people on wall street just haven't had the right expectations or just how slow it is going to be in the coming quarters. and that has a lot of tesla investors very jittery and you can see that in the stock performance this year so far. >> thank you for your time this morning. >> thank you. >> tim higgins from "the wall street journal." coming up, the latest in the disney proxy fight. influential shareholder firm iss backing nelson peltz. more on that story in just a bit. > enat, assistant attorney general jonathan kanter will be our special guest. we're going to ask him about the apple antitrust case and much more. we're coming right back.

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possess. but on the whole, a research paper from stanford on the evolution of work from home found that working fully remote actually is associated with 10% lower productivity than fully in person work. hybrid work actually appears to have no impact on productivity, but it is popular because it improves recruitment and retention according to steve davis, one of the stanford researchers. data from jobless actually found that younger workers are seeking in office experiences these days at higher rates than other generations at a rate of 57% versus about a third in other generations. i spoke with two gen z workers earlier in their careers who say they prefer working in office for career growth opportunities, socialization and, yes, even productivity. >> i think as someone who is pretty recently out of college, it helped me transition into the workplace life more and just adulthood more, being with other adults. >> i think being able to

collaborate with your team say benefit of being able to go into the office. in my experience, collaboration was a lot more difficult when working remote. you don't really have that in person ability to walk up to a desk and ask the questions. >> with all of that being said, these younger workers as we all do appreciate the one or two hybrid days that they're offered. that flexibility is nice. they're saying they do like to be in person. who knew? >> i think if you look at that chart, it says a lot. because the ones who really want to work remote, not even hybrid, it is gen x and they're millennials, the ones that are raising little kids. >> that's what steve davis said to me, essentially the people who are working the most have the most paid work from home days are those in their 30s or 40s with young children at home. because they need the flexibility, but as someone who does have a young kid, i prefer to be in the office. it is easier to focus, right? and do our jobs well when you're not near them. >> everything you said, it kind

of seems like something that i thought -- i like the recruiting part. yeah. if you don't have to work nearly as hard, and you don't have to come into the office, it helps with recruiting. no kidding. this is a much cushier job here. of course it helps with recruiting. >> we havegone to this place and it is hard to pull back from that, especially for kids who started their careers with some type of flexibility, right? but i think the socialization part and the ability to work with your co-workers, the pandemic up ended college for a lot of these younger workers. they are missing out on that. and i have friends now who i met in my first job and some of my closest friends, so there is a socialization part too. >> if you don't go to school until kindergarten, you don't know how to socialize. >> no, no, no, a lot of those

things -- someone got mad at me for saying i don't wear a mask anymore. masks did not help for people in terms of being able to read expressions or hear or look at lips. it was a huge issue for -- do we know for sure that it was really -- do we know it was really, really helpful? do we know it prevents -- we don't even know that at this point. >> i don't have any problem with other people who walk around in a mask. you want to do that, you do it. >> outside? >> whatever. i don't know. i don't care what somebody else is doing. it doesn't impact me. >> ever? >> as long as you're not touching me. get away. >> don't look at me. >> you have a nice distance here. so nice to see you guys in person. your faces. >> it is easier when you have small kids, i will admit. if you have the chance to have full time work it easier to do that. >> and we're on tv, right? it is a little bit of a -- >> right now? >> right now, joe.

>> oops. >> did i use the s word? i didn't. it is hard to cut it off at shi -- which i did. i said -- i said -- >> i'm shushing you. >> okay, but i said -- i didn't say t. there is in t, you're not in violation. and on cable, you're not in violation. >> we'll find out later. >> gloves don't fit, you must acquit. >> all right. >> thank you. >> thank you. >> great to see you. when we come back, advisory firm iss endorsing nelson peltz for disney's board. that move could sway some shareholders in what has become a pretty bitter proxy battle. we're going to talk about it after the break. the futures this morning, mixed picture at this point, dow still up by 15 points. but the s&and p the nasdaq are down. s&p off by 1.5 points. the nasdaq down by 28. "squawk box" will be right back.

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another twist in the disney proxy fight. advisory firm institutional shareholder services recommending disney shareholders elect nelson peltz to the board in his ongoing battle against ceo bob iger. earlier this week, major disney shareholders george lucas and marine powell jobs spoke out in support of iger. joining us is puck's matt bellamy. this has been a crazy one to watch, how heated this has gotten. we should point out that glass lewis, the other proxy voting firm, actually said, no, you shouldn't be electing nelson peltz or his second person for the board seat. how do you think this plays out? >> it is fascinating. they really are drawing the battle lines and people are lining up. we saw george lucas, who obviously sold lucas films to disney, he is backing iger. we saw lorraine powell jobs obvious lu, she has a very good relationship with disney, big

shareholder, she is backing iger. iss is an interesting one. they have had ties to nelson peltz in the past. they are friendly there. and it sort of is the only big one that he has been able to line up. he's done a number of been lining up on his side. so i would say iger has the distinct edge in this sort of a who's backing who category. >> what do you mean iss has ties to nelson peltz in the past? >> i believe that he has worked with them in previous fights. check me on that, but i believe that he has, he is friendlier with them than the other firm. but -- but, you know, it's really turning into a, who is friendlier with who? because everyone has an interest here. i mean, peltz has point the out a number of the people iger lined up on his side had been paid millions of dollars, if not

billions of dollars by disney. george lucas among them. >> yeah, but george lucas is the biggest shareholder. seems like a weird conflict to say it's a conflict because he's a big shareholder and got paid -- got paid in stock. not to sell. >> and george lucas has not been the most friendly towards disney. >> he has not in the past. yes. complained about how he was not going to stay around and work with them, but he was relieved when iger came back, that he thought a better move for the company and why he's kept his shares. >> exactly. and, you know, the same with the disney family. iger has a very tenuous relationship with the disney family, particularly abigail disney, an activist, and very critical of bob iger's salary in particular. she has come out in favor of iger, which i think a lot of people were surprised disney was able to line up the family like that. they don't get along with each

other. they certainly have notalways gotten along with iger. so that's a big win on his side. >> i guess they look at it as fox in a hen house sort of scenario to all of these circling wagons like that, to mix a bunch of metaphors. >> they essentially said that. abigail said that. had my differences with iger but clear the peltz deal would be worse in her view. >> maybe the biggest thing disney management has is the stock this year. what's is it? up about 23% for the year so far? >> yeah. honestly, we would not be talking about the strength of the disney position in this proxy fight if it weren't for the gains in the stock this year. they have done -- iger's performance on the last earnings call was especially strong. made a bunch of announcements, got people excited. you know, disney has that thing where you can tease a new ride

or tease a movie, muana 2 or others an disney has shareholders individuals, passed down through families, gets them excited. they're counting on those people showing up in the proxy fight. >> even if disney winners this battle, though, there's a lot more heavy lifting the company's going to have to do. this is a troubled environment for media stocks. and you have the issue of trying to find bob iger's successor, which didn't work last time around. now brought in james gorman as lead director. involved, or as director involved with helping find that succession planning. how are things shaping up on that front? >> well, he recently joined the board, and he's made some comments about the process with

stanley, perceived a very successful process. nome did they find a successor, but the people passed over didn't leave. i think that's a key point. there was a bloomberg report last week, i had written about, that highlighting that disney is focusing on four internal candidates. doesn't mean they won't select someone outside, but they have four people that they have focused on. head of the parks, head of tv, head of film and head of the espn. those four executives have been interviewed. iger's, you know, teaching them the ropes. they're getting to do other things outside their typical per v purview. saw one except one at oscars. so they are making moves like that. i think that bloomberg story that dropped will help on that front, because that has been a big problem with iger, and peltz has poungspounced on that sayin guy doesn't want to leave.

no succession plan and now at least are making noises about it. see how serious they are but they are making noises about it. >> matt good to see you. take care. >> thanks. a quick check on the pre-market futures before we head to a quick break or c or cg in on the 8:00 hour. and down, s&p down. we had been higher across the board. not huge reversals, but different than before. green coming up. congressman raja krishnamoorthi weighs in on the president's budget, china and much more, and then assistant attorney general jonathan kanter will be our special guest. we're going to ask him about the government's antitrust case 'ragnsape. wee coming right back.

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can the government prove its case against apple? we're going to talk about the new landmark lawsuit first on "squawk box" interview with the department of justice's antitrust chief. and do reddit investors know how much power rests within the site's community of moderators? we're going to speak with one. she said, no, to buying into the company's idea. final hour of "squawk box" begins right now. good morning, everybody. welcome back 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. andrew is off today. watching the futures on this friday morning, and we went from green arrows across the board to

now red arrows across the board. dow indicated off 18 points. s&p down by 7. nasdaq off close to 50 but this comes after, i believe, four days in a row of gains for most of the major averages. all of them up yesterday, and the s&p is setting its 20th high of this year. treasury yields this morning a little weaker. ten year, 423. two year, 461. ahead of the opening bell, the final opening bell of the week, over to our senior market correspondent mike santoli. what you got for us today? >> becky, fatigue in the market but well-deserved rest, if that's what we're going to get. 207 new highs less than one quarter of the way into the year pretty much a record pace piling up all-time highs. s&p 500 did have follow-through to upside after that reaction to jay powell on wednesday. although in the afternoon did decelerate a little bit. from about two weeks ago that would be the 8th, high on the

day, 5190. a percent above that. flattened a little. remarkable, per simpsistence of rally and hugged upper end of that trend. no 3% pullback. keep saying we'll get one. maybe a balk from the blue. for now, really, a lot to like about the market action. feel we're overdue for a little churn and chop. stocks versus bonds. obviously next week is end of the first quarter. sometimes you have rebalancing. people who acid allocate, 64, whatever you have. a massive out performance of stocks over thing total stock market index, the aggregate bond etf. this is what is in your target date retirement fund basically. if that's what you have. so you are -- selling into the strength of equities rebalancing into bonds if that's what you do. usually not a market-wide driver

but something to note. nike, mentioned earlier, downside movers this morning and a tough stock. look at nike versus disney. kind of like the 12-year-old's portfolio give the kid a gift of stock, nike, disney. those types of things. it's had a rough five years, close in performance point-to-point at this point. you do have these kind of global franchise brands that have premium valuations and for one reason or another structural industry or geographic when it comes to the china exposure for nike. questioning whether it deserved as much of a premium. see how that shakes out. >> well, they're both founding members of the woke is broke etf. right? >> yeah, yeah, yeah, yeah, joe. doesn't hold up to rigor, but, okay. >> okay? sorry. never mind. never mind! okay. i got plenty, but -- >> five-year chart. >> those two are -- yeah -- a couple leaders there. if it doesn't hold any water i'll never mention it again.

thanks. >> okay. talked with house speaker mike johnson yesterday here on "squawk box." this is what he had to say about president biden's fiscal 2025 budget proposal. >> the biden budget came out. it would make the largest tax increases in u.s. history, about 4.9 trillion dollars in tax inc increases, raise the debt to about $52 trillion over the next ten year. we can't go down that road. we're going to crash the u.s. economy. we all recognize that. what we present is alternative view that our house budget committee passed their resolution here in the last couple weeks, and it would balance the federal budget in ten years and cut $15 trillion in spending while not affecting social security or medicare. >> joining us now, to respond to that illinois democratic congressman raja krishnamoothi.

it doesn't stop us from i think talking about opposing priorities, i guess, or policy ideas of the different parties that we have in a two-party system. what are your thoughts what you just heard, congressman, speaker johnson say and what did you think of the proposed budget from the president? >> so i respect speaker johnson. he's my classmate coming into congress at the same time. but i really disagree with his conclusions about his budget. there are massive cuts for instance to medicaid, children's health insurance program, even cuts to programs to ease the housing affordability crisis. with regard to the president's budget, i think it's directionally correct. let the negotiations begin, joe. that's what happens around here, when one of those budgets land in congress. >> aww, geez. i'd love to have a budget. we've heard, heard that this

latest -- i don't even know what you call it -- it's like a kabuki dance. we might get to september. i don't know how to last, if we have something that lasts longer. will you? we can coast -- it's a frustrating process to watch. >> it is. and today hopefully we can, at least, like you said, give us all a little reprieve. i think that it's a situation where i was actually with a friend and a colleague from the other side of the aisle, a republican, who's going to be voting for the bill, and his complaint, he agreed with me. there's way too many people in the vote no, hope yes caucus. they want other people to vote for the budget but they don't want themselves to be responsible for their budget so they can rail against it. they can complain and criticize instead of being a constructive part of the process. >> let me ask you this, congressman, we -- we went through, i think, $4 trillion in

spending under president obama. then we got up to $6 trillion and change during the pandemic, and now we are talking about $7 trillion for 2025. we know that we've got a lot of debt interest that we're paying, that keeps us, you know, soaks up a lot of the revenue that we have. we'd like to do it for other things. why do we still have to spend emergency-level amounts that, you know, were maybe more appropriate during the pandemic? why don't we try to cut where we can for things that, that would allow us, maybe, to some day spend more money on good things but we're not going to have it, if we just keep spending it all now? >> i don't disagree with you, joe. you make a great point. as ranking member of the select committee with regard to competition with the chinese communist party we absolutely

have to invest in those areas important for our compe competitiveness. whether basic research and development or making sure that our workforce is skilled for technologies of the future as well as increasing defense spending to deter conflict with the ccp. all of that being said, i think that this is an ongoing problem. i was a form 0er small businessman and like to say i signed the front and back of the check. we have way too much debt, and so we have to both reduce spending, but also we have to see what has to be done on the revenue side so that we can balance the budget. >> i got a good one for you, congr congressman. we need growth. going to come from a.i. come from a.i. the whole $34 trillion getting rid of that somehow. you know it actually -- >> artificial intelligence, our natural intelligence may not, may be escaping us right now. >> ask artificial intelligence

they might say we need to do something about some of the entitlements that the programs aren't going to be around, unless we don't do something. my point, we really -- it could help with productivity and we are the envy of the world in terms of silicon valley and technology, and innovation and entre entrepreneurs. here we go again. now we don't like apple. yesterday the justice department. >> can i say one thing? >> yeah. go ahead. >> if you put in your chatgpt or a.i. program how do you balance the budget, how do you make sure america keeps growing? i think one thing that it would definitely spit out is fixing our legal immigration system, joe. >> yep. >> i know we have a problem right now on the southern border, and we can talk about that, but our legal immigration system. people waiting in queue to come to america legally is now more than 1 million people long.

okay? these are the future entrepreneurs, investors, future employers of our economy. future workers. and yet we're keeping them out. this doesn't make any sense if we're to compete with the ccp or anyone else. >> right. i think elon musk even made that point. that it's -- it's so hard to do it legally. you might as well go down and just come on in. it's -- that's not -- that's not the way is should be. you got to address both sides of that issue at the same time. >> that's absolutely right, and we can't win this competition with the ccp by keeping out innovators. >> and going after apple. is that a good, a good usage of our time and efforts? do you think? >> trying to get me into trouble. >> i am. i am! >> my iphone cost $900. if it could cost a little less, nice. but that's the -- >> the bailiwick. no one's forcing you, congressman! you love that ecosystem.

don't you? >> i -- i do. look -- let's -- obviously this decision is above my pay grade but what i can say is, i'm glad that the biden administration is looking to make sure that we have a situation of level playing field. especially for small businesses and others competing with the larger ones. >> okay. perfect. the needle, the thread -- shweeew how it happens. you're good. >> thank you g. to have you on. when we come back acheck on reddit, the first full day of trading on the new york stock exchange. plus, we'll tell you how much money openai's am sal-- sa altman made on paper. and inside the justice's case against apple. jonathan kanter will jn oius.

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welcome back to "squawk box," everybody. futures this morning under -- aww, not under pressure.

weaker. dow off by 14. s&p by 6 nasdaq off by 51. bloomberg reporting tesla is trimming its output of cars in china and slower ev sales growth and intense competition in that country. an article this morning notes that the economy told employees in shanghaito reduce production of both model y suv and model 3 sedan by working just five day as week instead of the normal six and a half in china. different than things are here. shares of tesla off by 4%, you can see. reddit the first major social media company to go public in five years. stock rose sharply higher first trading day yesterday. priced $34 a share, and opened at $47. went to as high as $58 before settling in at $50 and change. see off a little this morning. openai ceo sam altman is one of reddit's biggest shareholdershis stake in the company gruesome

$200 million to more than $600 million. later this hour we'll speak with a reddit moderator. two big earnings to tell you about. first nike beat street's expectations in revenue sales continued to slow in china, even though up in north america. that stock down by about 6% to $94.55. interesting watching some of those things this morning. by the way, shares of fedex trading the other direction. logistics giant beat analysts profit estimates even though sales missed expectations and fell year over year for the sixth consecutive quarter. cost controls helped the company's operating profit margin beat expectations. fedex's board approved a stock buyback program. stock up by 11.5%. coming up, how strong is the government's sweeping new lawsuit against apple? an interview you don't want to miss. what the justice department's

assistant attorney general for antitrust, jonathan kanter, what he has to say. stay tuned. you're watching "squawk box." this is cnbc. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right? rylee! from rylee's realty! hi! this listing sounds incredible. let's check it out. says here it gets plenty of light. and this must be the ocean view?

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profitability is an important milestone for us and we're getting closer and closer. >> how much has the landscape

shifted as a.i. has intensified. >> our strategy hasn't changed and then a.i. just showed up as a big accelerant. >> improve performance of one of these chips by 1,000 times every couple years. >> coming up with something so much more incredible. you've probably heard by now the department of justice is suing apple in a landmark antitrust case. charging that the iphone ecosystem is monopoly. eamon javers joining us with a special guest. good morning. >> good morning, joe. that's right. here with jonathan kanter head of antitrust division at the united states department of justice and as such is the man who led the u.s. government's efforts to bring that lawsuit against apple yesterday. jonathan, thank you so much for being on cnbc this morning. >> thank you for having me. >> you can't talk about remedy. the legal term for what happens to apple if you win. i wonder if you can tell us off

the bat if you're taking off the table some kind of a breakup of apple, if you are to win this case? >> let me take a step back. the attorney general explained during our press conference yesterday when a company violates antitrust laws there's a law for that. first and foremost, we are a law enforcement agency and our objective, make sure companies are held accountable if they violate the antitrust law. our lawsuit is to ensure apple is held accountable for antitrust violations and remedies achieve an intended result, which is restore competition now and in the future. >> would a remedy involving a breakup of apple achieve that desired result? >> our lawsuit asks for remedies necessary in order to address the anti-competitive conduct and violations, whatever those remedies may be. >> sound like not taking it off the table? >> focused on liability and we are focused on making sure we can bring our case to a court and explain why apple has violated the antitrust laws and then remedies will flow from

that. we explained relief in our lawsuit. >> another area you probably can't give a lot of detail but have to ask anyway what were the negotiations like with apple before this case was brought yesterday? we saw reports that you met with them about three weeks out and had that sort of last meeting with them. did apple make any offers in terms of behavior changes, business operations changes, to stave off what you did yesterday? >> sure. i can't talk about conversations with apple, but i can say, and i think is evident from our lawsuit, is that our investigation was methodical. it involved millions of documents. it involved 16 state attorneys general working alongside lawyers at the department of justice for many years to uncover the facts and provide an explanation in a lawsuit that has sufficient detail to support our claims. >> let's not talk about apple specifically, but entire business ecosystem around apple. if you are to succeed, what does

that world like like in a world apple has less pricing power, less control over development of app technology in the future? are there app developers now we should look at? businesses we should look at? for example, banks able to offer their own wallets inside apple's ecosystem? >> absolutely. we talk about this throughout the lawsuit, which is that consumers, if you ask them whether they want to pay less for their iphone, the answer will be "yes." ask developers if they want to pay less to rate users on the iphone, the answer will be "yes". ask banks whether they want to pay additional fees for credit card transactions when people are tapping to pay inside of retail establishments, the answer to that will be "no." competition means to lower prices for consumers, lower prices for developers. more opportunities for entrepreneurs and ultimately more innovation that benefits society. >> one of the headlines in recent weeks has been that apple and google want to work together

on a.i. technology. absolute cutting edge of the future. you've run antitrust cases against both of those companies. what do you think of that potential partnership, and is that something the department of justice will review? >> i can't comment on any other matters outside the forekur cors of our lawsuit against apple. quite comprehensive. >> ultimately more or less competition in the a.i. space in general? >> competition is sflvital in o industries. a.i. especially. think about a.i. chip to the user. just as we saw with the growth and development of new technologies going back to railroads and the industrialization of our society to telecommunications to pcs, to the internet now to a.i., the antitrust laws are flexible and they are capable of making sure that we have open, fair competition so that businesses,

u.s. businesses, can build and thrive and compete to deliver better prices, to deliver better innovations, and deliver more for society. >> joe kernen up in the studio has a question. >> appreciate you being here, mr. attorney general. and i -- we've had you on, you've been on-set and i know you're totally ready for anything i can ask you. i don't care. i'm going to ask anyway. >> fire away. >> we know that there are people that totally disagree with you. reasonable people on this. in the political spectrum. i wonder, how do you know for sure that people -- just don't love apple because it's so great at doing what they -- they offer premium products. they offer premium services. i'm fine paying up for it. i like to pay less, would like to pay less for a porsche, too, but they offer premium services, and that's what i want. and do you ever, when you wake

up in the middle of the night, you know, say to yourself, am i absolutely sure that i'm not, you know, hurting the goose that lays the great golden american egg, that is apple? and do customers -- i'm not complaining. am i representing customers? or am i representing complainers from other big tech companies that aren't as good as apple? >> so i think it's really important to read the lawsuit, because what you're learn is that first of all, this is not, this was a methodical, lengthy observation that include apple's internal documents. end of the day we have a system of laws that say competition should result in benefits to consumers. competition should result in benefits to entrepreneurs. we just want to make sure there's an open, fair playing field for all competitors including apple. if you read our lawsuit what you'll see is that our concerns

are not with, necessarily what apple is doing with apple's products. our concerns are with restrictions when apple tells others what they can and can't do with their products. that is our primary area of concern, and that is the primary area of our focus in the lawsuit. ultimately, allowing others to innovate, yielding more benefits, including the kinds of benefits apple is able to generate and we talk about this in our lawsuit when it had access to the windows operating system in the early 2000s so it could launch products like itunes, ipod and the iphone. >> i guess, jonathan, the other issue is, look, just because you're big doesn't necessarily mean that you're anti-competitive. sometimes you get there because you have a better product that consumers choose. is it your understanding that any big company, even if they've invested in the system and built it themselves, is going to have

to open that system to all competitors, even if there are concerns about privacy or hacking or anything else along the way? >> yeah. so this lawsuit is not about saying just that apple is big. a monopolization lawsuit focuses on companies that are big or have monopoly power. we detail in the course of almost 90 pages a pattern of exclusionary product, contractual issues. what we say in the lawsuit is that the conduct we are addressing is not necessary to protect privacy and is not necessary to protect users. in fact, in some instances, apple's conduct as we allege in our complaint makes the device less secure and less private. >> jonathan, one of the things we saw yesterday was apple's share price, hit apple invest. and they lost money yesterday. what's your message to shareholders watching this all

play out and it's hitting them in the wallet? >> i message to shareholders is encourage companies that you invest in to compete on the merits. competition on the merits is good for everybody. good for businesses. good for consumers. it's good for the economy and so ultimately that is what this lawsuit is about. it's about making the market more competitive so that people can pay lower prices including for their iphones. >> spin it forward a little bit. obviously we're at the tail end of president biden's first term. make a second on the way. maybe not. there's an election in november. donald trump could win that's election in november, if you look at the polls. how do you think this case, going months if not years would be affected by a change of administrations if trump wins in november? a trump department of justice takes over this case. how does that affect the outcome? >> i can only speak for my job. i took an oath, swore an oath to defend the public against antitrust violations. we're going to keep our head down. working alongside as i have. the extraordinary professional

staff at the united states department of justice and state attorneys general to bring a case we believe is right on the facts and the law and we're going to focus on bringing that case to court and proving it. >> given the fact there's only a few months left in this term, is this the last case that this department of justice is going to bring against a major american company this year? or are there more to come? >> i can't speak for any other cases right now. i can say so long as companies are violating the antitrust laws they should be on notice we will bring additional lawsuits and hold them accountable. >> talk about corporate america in general, in the c suite. you have been incredibly active in your term in office. and reset expectations what antitrust is and how it will be enforced in this country. can you share what your message is to american executives as they contemplate all their activities whether partnering with another tech company, whether acquiring another firm? what do you want executives to be thinking about antitrust? this year, next year and going

forward? >> a few things. first, i want executives to know that the vast majority of companies are never in our sights. the vast majority of mergers, vast majority of practices never show up on the desk of the antitrust division. why? because they don't break the law. so if companies are on the right side of the law, they'll have no problem at all competing and delivering to the economy. also, that competition benefits everyone. businesses benefit from opportunities to compete. that is the beauty of our system, which is that if people have great ideas, if they can sub cede on merits of their innovations they can achieve new heights. we want to protect that opportunity for all companies. we don't want it to just be available to a small few. >> let's talk about some other sectors beyond just technology. right? obviously health care is a sector that's important. important to the u.s. economy. we've seen a lot of activity there. what do you think about the

health care sector as you look at it right now and say, is there anti-competitive behavior going on there? >> yes. we've brought cases in the health care sector from payers to pharmaceuticals. this is an extremely important area of our economy. not just because it's valuable to the markets. it's because it saves lives. so we need to make sure that markets are competitive so that participants in the health care sector are delivering the best outcomes for people. keeping people healthy. keeping health care affordable. it's hard to imagine a market that is more important to our daily lives. e were all know somebody who has suffered, who has received care that they believe may not be up to snuff in a hospital. we've all, i know people who ask had difficulty with medical bills and the billing system and the insurance system, and we need competition to help make

sure that is working for americans. >> so if we're looking for another case of your department of justice, maybe think in the health care area? >> nice try. we're focused here today on the case we filed yesterday against apple, and i think the message to come away with is we care about competition throughout the entire u.s. economy and that includes health care. >> jonathan kanter, great conversations. thank you. appreciate it. >> thank you. and eamon, thank you so much. a lot learned. when we come back, perspective on the reddit ipo from one of the sites's powerful mod laters. what does it mean when a company is so dependent on an army of unpaid volunteers? next, takeaways from a big week for the federal reserve. vit chairman richard clarida will join us. stay tuned. you're watching "squawk box" and this is cnbc.

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this week the fed maintained its outlook for three interest rate cuts this year sending to record levels. for more and questions ahead for central bankers we bring in rich clarida, former vice chairman of

the federal reserve and global advisor for pimco. looks younger, more relaxed. life is good. is it not? >> there is life after the fed. for sure. >> it's hard. it's hard -- sound like w. it's hard work. don't i? >> i worked for him, too. >> yeah. the decider. it is hard, and i -- i have a lot of compassion or empathy for what chair powell and the rest of the fed are up against. everything's nuanced. everything's gray. did he say the right things? are we on the right path? >> i think we're on the right path, but the chair does have a complex message against signaling three rate cuts, but inflation is obviously not 2%. the goal's 2%. so he's trying to convey a message that they're going to start cutting with inflation at 2 point something and if anything revised up the economic outlook. i can see why markets liked it.

>> and you think this was his shift to say, okay, inflation doesn't have to get to 2%? this is -- >> i think that shift has been in play for a long time. if it's hypothetical, a year ago when i did your show, it is actually 2 point something. yes. i think they believe that it is appropriate in the base line to start cutting before inflation goats 2. very clear from the press conference. two-sided risk. the last time i did your show only looking at inflation. now they're looking at the risk that if they keep rates high for too long, pushes the economy into a downturn. they're trying to navigating soft landing. >> went from inflation to recession risk? >> whatty a think is going on here. the delicate balance he's trying to navigate is financial conditions will very naturally start to ease when they get the sense the fed is done cutting.

then, of course, that improves the economic outlook potentially makineieing it harder to get inflation down to 2. interesting when he got questions on financial conditions he asserted we think they're tighter. look at any indicator stock, credit rates, a lot higher than november. >> a little easier than november. >> a lot of hard work with a good outcome so far. >> yeah. >> normalizing interest rates. why give that -- it's -- now, we have some dry powder for the next thing that happens, and -- >> sure. >> why cut now? >> right. >> it's really, again -- not mission accomplished, but -- >> you're not sold. i can tell you're not sold on when we should cut? >> more two-sided risk inflation stays sticky and stubborn and i think that's a risk they should be willing to take to start

cutting, but you shouldn't eliminate or ignore the fact there is a risk. i'll make one point. the fed targets pce inflation. sorry. sounds wonky for the crowd. the cpe index people understand better is somewhere in the high 3s. in fact last three months running at 4. if the fed were targeting cpi right now we wouldn't be discussing this. >> you must be convinced, or chair powell must be convinced, that we're restrictive, and -- >> oh, yes. he asserts that. and the fete bd believes. >> even considering cuts? >> for sure. a very good point he gets questions along the lines of what if inflation is more sticky and stubborn? he's not suggesting more rate hikes jut we can stay on hold longer. >> is there a chance they make it through this year without any rate cuts? >> you know, becky, there's always a chance, but i think

they think not only they're done but that they're going to be cutting. the dots indicate that. obviously the dots have their problems but the dots indicate that. so, yes. there is a chance, but i think under a pretty broad range of scenarios. they're going to get at least one cut in this year. >> that's amazing. >> not three. >> potentially not three. let me say this and maybe here i should say this may be more of a hope than a forecast. i do hope that the fed really moves into data-dependent mode. there can be have ar good case if inflation is sticky and stubborn that they shouldn't deliver three cuts this year. >> cpi not for another month. that would be, i think, all you need to say. hey, not going anything until we see where this is headed. >> well, now had four press conferences in a row, november, december, january now march, where they're basically signaling they want to get that rate cut, cut in.

i think it's going to happen. >> do you think any of that is tied to the potential for some of the smaller banks to run into trouble if they don't get rate cuts? because they have commercial real estate and other things on their books? >> i think probably not. you know, i think they're pretty -- i think they have a pretty good sense that the banking system as a whole has a lot of liquidity capital. it's very profitable. i think they have tools to deal with individual situations, if they need to. so my sense is that that's not a driving factor right now. >> they supposedly respect the lag, i guess? >> yeah. >> do you think they know anything that's not public knowledge about some weakness somewhere in theish -- if the economy stays like it is, the s&p keeps hitting new highs, if, you know, bitcoin and speculative assets -- >> my son today texted me. look add t reddit, dad. >> and maybe they really don't

know the economy is facing -- not the "titanic" but something under the water. you just see top of the iceberg? maybe there is something big. is there something big under the water? >> not that i know of. i think everyone including the chair in the press conference acknowledged that everyone knows that commercial real estate in simple business district office is not coming back to where it was pre-pandemic. that exposure's in both the banking system and securities markets. i don't think they think anything is imminent. more of a slow burn a slow grind through revaluing and's liquidating those assets. >> seems things are going pretty well. >> goodness. two years ago, exactly two years ago to the month where the powell fed starting lifting off. i think very few, if any, forecasters or even fed supporters would have predicted we'd be here with 2.something

inflation. lowest unemployment in 50 years. >> could cut without bringing back inflation. if it's in decline, rwhy not? >> dry powder for later. unless we actually do run into a real crisis. >> the other thing to consider right now is the fact that they're very willing through rhetoric and they're signalling to start cuts and perhaps, you know, a number of cuts, with inflation above 2. in that 2 point something range gliding down to 2, in the forecast from above, but clearly, this is a fed that's not going to -- not going to try to accelerate that last mile to get down to 2%. >> reasonable smart guy. all of this has to be encouraging. >> for example, suppose we get, you know, .2 on core pce, 2.4% inflation every year. i think the powell fed would take that.

>> like lavish, boorish or passive? >> passive and boorish are good friends. i do know know arthur lack perspective. the two i know either of them would be an excellent choice. remind everyone jay powell's term is in place until may of 2026. >> how about clarida? pup pull you back in. >> we're on. >> good to have you. when we come back, what a moderator has to say about overseeing the reddit site and the company's ipo. rich, stick arndou. learn more about reddit. "squawk box" will be right back. you! your business bank account with quickbooks money now earns 5% apy. (♪♪) that's how you business differently. intuit quickbooks.

welcome back, everybody. reddit popping nearly 50% first day of trading on the new york stock exchange. some of the investors taking

part in the company's public debut had close ties to the site. reddit actually offered 8% of shares to a select group of users and moderators in a direct share program. however, not everyone in the group took part in that ipo. one member of the reddit community who did not joins us. courtney swearingen currently moderates along side the day job as an attorney. courtney, thanks a lot for being here this morning. >> thanks for having me. >> i'm not sure everyone knows. we've talked a lot about it recently but i'm not sure our entire audience knows how this relationship works. you're a moderator, which means you spend a lot of time going through moderating discussions on some of these issues. you're volunteering that time. not paid, and doing it 13 years. i guess the question is, why? >> right. why is because of the community. so i love reddit because i've

been able to create a community of friends. when i first started moderating i used to know users by their first names sometimes last name and able to connect and grow a real community of people that you knew you could rely on and you could trust and you had friends. i've met some of them in real life now and can honestly say i have internet friends i have met in real life and have been my friends for a while. some of them never met in-person but i know they'd be there for me at the drop of the hat if i needed them. i continue to do it mostly because i really like the community i've built and the friendships that i have. >> why did you decide not to opt-in? >> i have to be honest. i didn't buy in because i've had this relationship with reddit for so long that i can't really trust them.

for me, it was a matter of, i can't risk money on something that i just can't trust. i can't rely on it. we have a kind of fraught relationship with thethes -- >> it's such a strange relationship to think of moderators who are so important to the company and who, by the way, have held a lot of sway. you were involved with the 2015 revolt where some of the reddit -- subreddits went dark because they were so unhappy with what was happening at the company.

i mean, it's hard for investors to kind of understand that. this is something you've spent 13 years -- i would guess you spent a lot of time practically every day working on this community, and yet, you don't have a great relationship. how do you see that playing out? have things gotten better over the years? >> they have. to an extent. you know, after 2015, there definitely was a rocky couple of years in there for that relationship, but we did kind of grow a little bit closer after that with the admins. they did fly us out to san francisco, a small group of us, to meet and talk about our needs as moderators and the tools that we need and the help that we really needed from them, and that helped a little bit. but we've gotten better but not -- it's not a lot better, at least not for those of us who have been doing it this long. >> i mean, there's 74,000 moderators, at least, for a community that's got 73 million

average daily active unique users. that's a huge, huge community. it's a huge number of moderators. what do you think about the company's moves to say, okay, we are going to have to try and find some ways to turn a profit? because 19 years of reddit, company hasn't been profitable. >> yeah. that's kind of what surprises me about the ipo is that they've never been profitable, so i just don't understand how that's going to work. but for the -- i just completely lost my train of thought. but yeah, so , for moderators, think they've done a lot of updates lately to the website. we've been calling it the reddit redesign for i don't know how long now. and they've made a lot of tools and made a lot of things better, and we're definitely grateful for that, because it has made

our job as moderators easier. >> okay. >> but part of that -- part of the frustration for me and a lot of moderators who have been around like me is that most of that came when it sounded like they were starting to think about an ipo. so, it wasn't that they were doing it because the people whose labor is building the site needed it. it felt like they were doing it because they wanted to make the money to make the ipo happen. >> to be fair, those tools probably cost money. it's hard to invest money if you don't think you're going to get money back on the other side. >> yeah. yeah. absolutely. and it is a business transaction, at the end of the day. there's just a little bit of, because reddit felt like a community when it first started, and that's kind of how those of us who have been around a long time feel about it, it's really difficult to kind of juxtapose that with not getting the help that we need as moderators,

simply because, i don't know, we don't know why. so, you know, we understand kind of the tenuous relationship between those two things, but it's hard to help grow the site if we don't have the tools we need to do the job. >> courtnie, we've got to run, but i'm guessing you're not going anywhere. unhappy or not, this has been so much of your life for 13 years, i would guess you're in this for the long haul. >> yeah. i love it. i really do. i love reddit. i'm so grateful for the opportunity given me. i get to be here with you today. i really do love it. i love the community i built. i love the time i spend on it. my relationship with the admins is not the greatest, but at the end of the day, i still love what i've gotten from reddit, and so i will be around for a while. >> courtnie, i want to thank you very much for sharing this perspective. i think it helps us understand a little bit better. >> thank you for having me. coming up, we're going to

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just a little more than half an hour to go before the final opening bell of the week. joining us right now is the chief investment officer for bmo family office, and carol, here we go. we are looking at now 20 record closes for the s&p 500 just this year. we're not even a quarter of the

way through the year. how do you feel about that? does that mean -- you think momentum begets momentum, or do you think that things start to peak out at some point? >> i think there is that piece where the trend in motion tends to stay in motion, so momentum does beget momentum, and it's important to remember, too, we have had other periods of time when we have had major technological change go on when markets marched to new highs for not just part of a year but years in a row if you go back and look at 1995 to 2000. but that said, it wouldn't be all undue to see some sort of pullback. that's very normal, even in an upward-trending market, to see a pullback up 10% or more, but yeah, the last few weeks in particular very have been exuberant. >> i guess we've got an earnings season kicking off in a few weeks. maybe that is going to be the answer. companies are going to have to live up to these stock gains. >> yeah, there definitely is a

lot of -- the expectations are rich. multiples have moved up. so, companies are going to have to do a to the of performance in terms of the earnings they produce, the commentary they have about pricing power, the commentary they have about cost inputs. people will be watching as well. investors will be watching what they're doing with hiring plans, and we saw a lot of credit in the last quarter for companies that were very strategic, saying they were laying off in one segment, and putting additional emphasis on other parts of the business as well as dividend increases and share buybacks. so, investors will have much to parse, and they'll look for some industry themes as well. >> carol, thank you very much for joining us today. we're going to keep it short, but we do appreciate your time. >> thank you. very quickly, folks, let's take a final check on the markets before we hand things over. you'll see that things are in the red, but barely. dow futures only down by about

six points. s&p futures off by six. the nasdaq is off by less than 30. treasury yields have been a little bit weaker. 4.21% on the ten-year right now. that does it for us this week. it's been a good week. it's been a lot that's been happening. >> what do you mean? >> well, there's just been a lot happening. things to watch from the federal reserve, see what's coming out of washington. we are going to see you right back here next week. >> another good week. >> stay tuned with "squawk on the street." they've got a lot that's happening. opening bell coming up, last opening bell of the week shortly. see you later. have a great weekend. good friday morning, welcome to "squawk on the street." i'm david faber at post nine of the new york stock exchange. jim cramer is over at one market in san francisco. wrapping up what has been an amazing week for jim out west. let's give you a look at futures as we get ready to begin trading for the final day of trading of the week. do we have that?