a programming note here, do not miss an interview with bank of america ceo brian moynihan later today on the closing bell. futures looking much higher, 240 points higher on the dow, s&p 500 up eight or nine points. the nasdaq up 25, 26 points. melissa lee, thank you for hanging out all three hours. >> join us tomorrow. "squawk on the street" begins right now. good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber and mike santoli. cramer has the morning off. futures once again on the hunt after a 3% drop for the s&p, worse than in more than a year. dow will benefit from unh. our roadmap begins with market volatility. six negative sessions in a row. nasdaq coming off its worst day in a couple months.

>> we've got united health, bank of america, morgan stanley, johnson & johnson also beating on the bottom line, although different reactions in the markets. sara eisen sits down to ecb president, christine lagarde discussing inflation, interest rates and where the central bank is diverging from the fed when it comes to rate policy. stocks look to rebound again, similar picture in terms of the premarket yesterday. we know how beholding the market is to some of these headlines. >> for sure. the yields are basically still pushing higher at a pretty moderate pace, but in service of the pain threshold for stocks and the economy, this has been a similar backdrop to what we had late last year except with the economy in more secure footing it seems. we basically unwound this idea, you can have the eem mat lack disinflation, talking about the economy almost in overheat mode.

what have we done or accomplished in the markets so far in april? that long streak of no 2% dips in the s&p, that's over. one of the longest streaks over above average, that's over. you kind of have this unwind of the momentum and systematic trade that is very, very long going into all this. it is a lot about whether yields impinge. we haven't had yields above 4.6 in the ten-year in the post global financial crisis world except for october of last year. october of last year, that's what really was the crucible of the deepening of the correcting. where was the s&p, under 41. it shows it's not a one-to-one, yields are here, therefore stocks should be here. if it starts to look like it's -- that's what's backed off the stock market. >> bofa, expectations for higher

global inflation going back a few years and for global growth. >> the no-landing scenario is at kind of a record high. that's the world that this new reality has been encountering which is everybody kind of embracing the idea. not only that the economy was in good shape globally, but that you could have this no trade-offs world that you don't have to worry about inflation staying higher or maybe the fed being more patient. it seems mostly all good excuses for the market to have what it needed to have which is a little bit of a reset. 10% up in the first quarter in the s&p. every single time that's happened except for one, the rest of the year was higher. the smallest pullback was 4%, and that was back in the 1960s. in the last 50 years, if you're up 10% in the first quarter, the minimum pullback is 6.5%. we're up 4 right now. >> this time yesterday we were all remarking on how it seems somewhat unusual how strong the

market appeared to be given the geopolitical tensions. we don't know what the israeli response will be to the iranian attack over the weekend. we, of course, reversed yesterday. anything you can share, mike, in terms of when it comes today to day to day. >> it was almost a net deescalation. we didn't think it was going to spiral from here. oil is your cue. if oil is steady, calm, backing off, it probably tells you we're not being held captive to the geopolitical concerns, but then the bonds started to sell off again. on friday you had a little haven bid in treasuries. that was gone. in fact, it became a little bit more of an aggressive selloff. we're looking for that level

where bonds either settle -- what's interesting is everyone is saying this morning, stocks starting to look over sold. earnings should be a net positive because they are going to be an aggregate. we kind of know that at this point. as we accumulate more earnings reports, that could create more support. tactically speaking, do we get over sold, do we have a fear entering this market. it's sort of maybe kind of at this point. it's not as if it's a clear picture. volatility index toward 20, but not quite above 20 yesterday. the thing to look for, when bonds start getting bought because people are worried about the stock market going down and yields have gone high enough that, in fact, it could pinch off growth. a really bad housing starts number this morning. bonds got a very brief bid and equity futures rallied a little bit. we're talking about small moves. >> talking multi-family, the print this morning on starts close to a decade low. permits down 4. we'll hear from powell today and barkin and williams, and

jefferson should be hitting the tape sometime about now. >> you want to hear how they're characterizing the three straight hot cpi reports. i doubt there's going to be a big rethink they'll convey. i do think if they kind of stick to the story of we can be patient, the economy is giving us that luxury, but we do have an easing bias, that's not new news, but it maybe doesn't resolve everything we'd like to see resolved. >> mike mentions earnings. it's all about the banks. goldman upgraded as they point out the recent quarter demonstrates the strength of their franchise and what they're calling an investment banking upturn. morgan stanley and bofa, plenty of good metrics to look at. >> it would feel like it right now. both stocks appear tore higher. certainly morgan stanley coming in with return on common equity 19.7% during the quarter, expense etch fish see ratio at

71%. they say it demonstrates operating leverage. again, what was a better market environment. we certainly sold goldman outperform, it appeared, many of its peers. morgan stanley has sort of trudged along as a stock and underperformed the group of the large cap banking sector. today will be a bit of a different story at least in the early going. as you can see, both bank of america looks to appear up and morgan stanley more so on the strength of the numbers. >> it does seem capital markets and investment banking was a net positive contributor to all the big ones. sometimes that's not the case. sometimes it's like who is positioned right. this seems like there was enough to go around. that seemed to be the margin of upside forthe old merrill lynch business. a little leakage and credit in bofa. it was expected in the credit card area. most of the lenders on the

consumer side are saying we see this bump in delinquencies, we don't think it's going to persist or get worse. it seems as if there was a moment in time from certain vintages of credit balances that maybe are souring. >> some of the charge-offs in commercial real estate. interesting piece in "the journal" about big tech not being a pillar of office occupancy as much as it was pre-covid. and then you talk about the consumer. average credit card consumer fico 777 has been trending higher over several quarters. we heard this from morgan stanley research a few weeks ago. it takes the edge off the concerns -- >> it completely does. it's really remarkable. i know people have gone back and looked at the pandemic-era stimulus and how it essentially cleaned up a lot of consumer balance sheets. it gets people out of paying minimum payments and all the rest of it. it seems to have had legs. you do have those things like

the household financial obligations ratio is very low, even though inflation has been high and people have built up their balances. that's basically how much of your disposable income goes to service tech. it seems as around tejs it's something to be concerned about. when it comes to bofa, it's about whereby the yields are, the unrealized losses, the general trends in deposit costs and how sensitive they are to every move in fed rates. >> also want to hit unh, one of the larger market cap companies out there, some 410 billion. it will be a bit higher as well, united healthcare group, based on numbers that came in, at least revenue numbers in particular ahead of expectations. this group has been getting hard hit in terms of actions from the government side when it came to medicare advantage, for example, overall. in particular there had been a lot of concern at united health about that cyberattack. we've talked about it, we've been reporting on it.

it's amazing that in some ways the market is willing to overlook what is a billion dollars in cost from the cyberattack. impact for the quarter totaled about $870 million. that was 74 cents a share. the company on the conference call estimating full-year impact a buck 15 to a buck 35. that will be roughly a range of about a billion to $1.15 billion overall for the full year. those costs are enormous. that said, mike, the market reaction obviously to the numbers overall is positive, and even perhaps the fact that that number may have been a bit lower than anticipated, as large as it is. >> the stock was in like a 20% pullback. you mentioned it, they have been hard hit. it goes to levels first reached 2 1/2 years ago. i think the company's willingness to essentially keep a lot of the guidance steady in terms of medical loss rates, things like that, cleaned up the story just a bit.

it does seem as if we're going to see where it's been on a year-to-date basis. it is, by the way, most of the early dow futures gain you see, is unh. >> if not all. >> about 200 points. >> we do have, i believe, the cfo -- ceo talking about the cyberattack and offering at least some perspective. take a listen. >> this was an unpress tented attack by a malicious actor on the u.s. health system. we rapidly deployed resources to develop alternative solutions and moved promptly to restore claims and payment services. we've made substantial progress, and we will not rest until care providers' connectivity needs are met and help ensure the uninterrupted care -- >> broad impact on the pgss of

the company. it was focused on the change health care business, by the way, a company they bought not that long ago. perhaps they had overlooked exactly how weak their ability to combat cyberattacks was at the time. i don't know. >> it's remarkable constantly how the market is willing to sort of say this was an extraordinary event, we'll take it from here and hope the numbers hold up for the rest of the year in terms of the bottom line. >> we'll get to j&j as well. the cfo on squawk earlier to come. still to come, university of south carolina's basketball team is in the building celebrating the championship. we'll talk to coach staley and first-round draft pick cardoso. that's when "squawk on the street" continues.

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gamecocks won their second national championship in three years, as you know, defeating iowa, caitlin clark and posting the tenth perfect season in the history of d 1 women's college basketball. this morning they're ringing the opening bell at the big board. joining us, kamilla cardoso and third overall pick in last night's wnba draft and south carolina coach dawn staley. thank you for your amazing season and incredible interview after the victory. we've been talking about the ratings and what it means for women's sports. do you think we're in a moment of sorts for women's college basketball at least? >> i do. i do think we're in a moment -- i've said this a long time that i think our game has been held back to now it's at a point where it's busting through the seams. i don't think we're going to look back. i think it's going to get better and better. >> what do you think has been holding it back? >> i think the decision makers

have held our sport back to the point of -- maybe because they don't think they would get return on their investment. i think now is the time in which they're seeing there's a return on your investment when you pour into our game. >> has it always -- have you felt that way, that we're in a change -- by the way, congratulations on monday night. i was looking at the odds for the sky getting the title. it jumped more than any other team on monday. >> thank you, thank you. i think our game is improving a lot. i think there's much more to keep improving. >> talk about the season and how it felt going from beginning to end and knowing that there were so many eyes on you, especially in the final four. >> i think we had an amazing season. since our first game, i knew we had an amazing team and we was going to do great things together. i was proud of every single one of those girls. >> does it change -- i know you've been doing this a while -- in terms of recruiting and getting women to come to the skooth and the path they're

expected to take in terms of playing to these huge audiences. you actually have -- obviously the wnba has been around a while. at this point it seems like a more defined path that people can follow. >> women's basketball is a sport, and it feels like that now with the good, the bad, the ugly of it. we have it all. we have villains. we have incredible talent in our sport. it's being highlighted. the good, the bad and the ugly, again, is being highlighted. that's what you have in every sport that's here and present. >> by that you mean you get celebrated and, of course, the critics come out and the hot takes come out. >> absolutely. i welcome it all. i welcome the critics. i welcome people thinking we're not a sport. i welcome, because they're taking time out of their day to talk about us not being a sport. i welcome it all. we also have people who have marveled over our sport and the people that are in it. i'm super proud of where we are,

and i'm encouraged by the future that we'll have. >> there's always the money thing. there's been so much discussion about nil and how agent legalities are compensated. you look at the contracts on monday night and people are realizing, wait, there's still a lot of disparity. do you think that changes? >> i don't do nil, so i don't know. >> i think now we're at a point where there are more eyeballs on our game and our sport, so they're seeing the disparities, either salary disparities -- i will say the wnba is moving in the right direction. we're still a very young league, a very, very young league, just like the nba. the nba didn't become what it's become in 28 years. think about that. i do think our future is bright. i do think again people are going to look at our sport and pour into it because they see dollar signs at the end of the day. >> that has to mean more schools that did not prioritize women's

basketball, for example, are going to invest in it, right? therefore, the competition becomes harder? >> i hope every school, every university treats women's basketball and women's sports like the university of south carolina. they invest. they invest in my salary, they invest in student athletes. you'll see they're getting -- we're here. we're on a channel that probably everybody goes by real quick -- i've done it, but i've stopped and looked to see what this is about. i hope that this is a time in which you'll have more women's basketball coaches here on stage because i do think our game is going to be rich with talent and financial gain. >> you were so gracious in your victory interview about caitlin clark. now she's on "snl" doing "weekend update." in order to create the success you're talking about, you need

superstars, yes? >> caitlin clark is a superstar. i credit her with raising the level. we're creating more aye balls on our sport, and we need to thank her for that. a lot of people think i'm being facetious when i say that. i'm not. i'm all for the greater good of our game. if she's a big part of it, we need to find the next superstar to take the game to the next level along with the storylines like the team we had, undefeated season we need to tell all the stories of the game. >> it's inspiring coach. thank you for both here. congratulations again. we'll be watching in chicago. speaking of able, you can watch the first ever cnbc changemakers on thursday, april 18th. you'll hear from changemakers including the commissioner of the wnba. scan the qr code to learn more. visit cnbc.com/changemakers.

we continue to watch somewhere around above 4.67 on the ten-year. take a quick bakre. we're back in a moment. don't go away. rm. amelia, weather. 70 degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. why not? did you forget something? my protein shake. the future isn't scary, not investing in it is. you're so dramatic amelia. bye jen. 100 innovative companies, one etf. before investing, carefully read and consider fund investment objectives, risks, charges expenses and more prospectus at invesco.com.

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still to come, an exclusive with ecb president lagarde. we'll take a quick break as we continue to watch futures in the green. busy tuesday setting up. "squawk on the street" is back in a moment.

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watching shares of j&j this morning beating quarterly estimates, getting boosts from strong medical device sales. tweaks the guide for the year a little higher. cfo on "squawk," actually looking at the plaintiff's bar and how that's funded in the future. >> a little bit of an upside to that revenue guidance above mid single-digit which is certainly welcome. it did seem as if the street was looking for more on the medical device side. there's still headwinds. fx might be an issue with the dollar being as strong as it is. now cheap stock, under 14 times

earnings, rarely is traded that inexpensively in the last 8 or 10 years. it shows you it's in that zone where people are assuming not a lot of growth. it sort of is what it is. it's much more about i think whether it gets into that quality portfolio. they raised the dividend for like the 63rd straight year, somethinglike that. 3% plus dividend yield. it feels as if it's not accelerating but certainly hitting its marks. >> you can never tell what chart we're looking at. i think that might be three years. that does show earnings have moved up somewhat and, therefore, to your point, multiple continues to move down. this stock has done nothing for at least three years, and a bit more than that. >> yeah. it's kind of where a lot of pharma was until really several months ago. all the glp stuff came through and other tough drivers like merck has also been a good

performer. it's left j&j behind. >> the underperformance has dropped off a lot of screened for some managers. let's get the opening bell. at the c nfrjtnbc big board. university of south carolina women's basketball team. we just spoke with coach sailly and kamilla cardoso. bloomberg media, also, as we check opening levels here. as mike mentioned earlier, a lot of the dow game will be encased in unh. >> the dow is mostly about unh. the s&p is at an interesting spot, above 5,000 here. folks are saying areas below 5,000 where maybe that would contain the initial pullback. i talk about how we go back in time, not just down in price. coming into this week we were back at early march levels when powell had said we see our way clear to a rate cut pretty soon.

we had a perfect jobs report on march 8th. you check the premises along the way. where we are is the day of the nvidia pop after its earnings. you go to this moment in time where you said a lot of stuff is working all at once and see if you get some support by the idea that on the earnings side at least, the ai themes, nothing much has changed, certainly not for the worse. >> speaking of things that haven't changed for the worse, tesla's stock price continues to deteriorate. it's worth spending a moment on. this is the very early going. somewhat mixed picture as we start with trading. the s&p 500 let's call it flat. nasdaq is already down. tesla shares down 3.3%. you can see it right there. it's below a $500 billion market cap for the first time i can remember, mike, in some time. half a trillion has been -- obviously it's been more than a trillion dollar market value and hit a high of $1.2 trillion at one point.

we discussed ad nauseam the issues facing the company in terms of demand for its product which seems to be at least slowing growth in terms of overall demand for evs, but even more so the challenges that tesla faces in the likes of the chinese ev makers, both in the domestic market in china but also important markets that tesla competes with them, exporting from its own shanghai factory which is 50% of its overall production. it's not just the layoffs yesterday. many times stocks react positively to lay-off news. that wasn't the case. but also the departure of a couple of key executives with long tenures at the company. >> absolutely. it seems as if -- first of all, it's a lot of assumptions that got into the valuation, have been challenged. yes, it's the idea they have a head start that's unassailable and they'll be able to charge premium prices and keep ramping vom volumes.

earnings estimates are down 30% for this year and last year in the last five months. for 2025 they're not supposed to earn four bucks a share. you're 40 times next year's supposed earnings. jpmorgan has an underweight on tesla. they say the retrenchment in employment and capacity is reaching implications for the hyper growth narrative still embedded in tesla's share price. that's what's being bled out of this valuation. they're going to talk about full self-driving, they'll talk about the software elements, the subscription base. it's not enough to overcome what seems like demand problems for all categories of evs that they're not immune from. >> that was the other reason that i think the pretty hefty

lay-off announcement did hit in a negative way which was you can no longer say this is a supply issue. it's obviously demand constraint, not supply constraint. >> every five years we have to retool for the next growth cycle. >> yeah. i guess the question is what is -- they haven't done a great job of filling the forward pipeline of these models are coming out, they're going to be compelling. at a different price point. >> yeah. suggesting material downside risk. that's the jpmorgan note. revenue could decline 13 year-on-year for the coming quarter. we'll get those results next week. the other story out of electric which broke the lay-off news yesterday, now saying that despite musk's denials, that they have, in fact, put a $25,000 car code named the nv-9 on the back burner. august 8th is still a ways away.

>> it is true. i don't know if he's trying to massage the details and say that the robotaxi initiative is still alive, and that might be the same platform as the $25,000. the point being, in the here and now what we can visibly observe in terms of this quarter, next quarter and the direction of earnings estimates, it's just a tough sell. now, i pointed out before, this is right where, you look at the chart there, where you actually have found some buyers around the half trillion dollar market cap. we'll see if that matters in the short term as it gets a little stretched to the downside. >> it wouldn't be a 52-week low until 15 the 2.37. that said, upgrade of rivian at ubs and more continued data on hybrid growth, q1 growth up. >> the rivian upgrade seemed to be, it's down enough. it's 70% off its highs, and

let's not be greedy about the negative call at this point. wasn't there an up graepd of gm today as well because of the general story, the steady state demand, plus the buyback. obviously, if this perception that slowing investments into lower return evs is now the assumption, it gets a little bump there. >> rivian shares, of course, that company at one point did have $100 billion market value if i recall. >> briefly. >> briefly, over $130 a share immediately after its -- >> it became public. >> there you go. 82% decline over three years. still an 8-plus billion dollar market value. they're meeting delivery estimates at least at this point. >> you see them around, the cars. >> you see them around, yeah.

>> obviously the large amazon contract remains an important component of overall sales for them. >> for sure. >> got some initiations to work with today. another one on reddit as bofa initiates neutral, goldman initiates ge vernova i think with a buy. draftkings, goldman again with a buy. certainly talking to the coach this morning about women's sports and rights and the interest that that naturally feeds into betting, for example. >> draftkings up a couple percent on that. i feel like there's just this general sense out there of maybe we've reached a point with sports betting whether it's so competitive or we've had such this buildout and you have all the wave of legalizations that maybe it's going to sort of plateau a little bit, hasn't really been the case. draftkings continues to get its share. it still remains to be seen if this is going to be an

attractively profitable business long term. they're making it up on volume at this point. as long as the sort of overall total value bet numbers keep going up, it seems like the story remains intact. >> i do want to mention shares of live nation this morning as well, a new story out yesterday from the journal saying that antitrust authorities at least may be moving towards an action against that company, a lawsuit, antitrust lawsuit. there you see it right there. live nation owns ticketmaster. at the time that deal was approved, i think there were many surprised, perhaps, that it was approved, given there was always a concern about the issuance of the tickets and the control of that market and obviously the company that also controls the venues as well. that said, there's been a consent decree. there's been a monitor. jumping to the conclusion that the doj is going to move to file a lawsuit may be a bit

premature. certainly one would expect there to be conversation, as there very well may have been. with a consent decree in place, it's not exactly clear, mike, what the ask is here in terms of the donl. i don't know, it wasn't clear specifically from the journal's reporting at this point. but the stock is taking a bit of a breathe ir here. it had been actually looking down more in the very early going. it may be a while before it's clear. if they were to bring a case and try to break the company up, that would be a years' long process. >> sure. in terms of what the ask is, presumably they look at the exclusive contracts for all the different venues, and they have that kind of vertical lock on the business. >> yes. they have to prove that they've been precluding real competition as a result of the significant market share. they had a consent that went along with it. have they been violating it in

some way? the company saying, even if you have complaints, it's a monitor that exists that you call and interact with somehow. i do think that while investors may be and have been waiting for this as a possibility, again it's not clear exact think what they've done wrong and what is going to be done to change that behavior. >> maybe, did taylor swift call the monitor line. >> that obviously put them under the microscope, including clearly the issues they had in terms of the demand for her tickets. >> the stock came off the boil to some degree. it was the leading, kind of reopening the economy. the pricing for experiences are stayed high. so it's held most of the pandemic bump in the stock, just because the underlying business has been so good and everyone kept waiting for people to get enough of going to events. it hasn't happened. >> it's all about services.

it, in fact, shows up in inflation rather than other parts of the economy. >> the rick rieder chart. have you seen it? lists price of nfl tickets. >> was it yardeni that said the price of an adidas or nike sneaker is virtually unchanged -- >> wasn't it larry fink as well? >> was it with fink on friday? >> yeah, it was fink. >> whereas the price of concert ticket or sporting ticket -- >> yeah. thinking of what yardeni said about crude. the s&p 500 going negative even though oil is down. looking for information out of the israeli war cabinet, meeting for a third day in a row. various reports about them attempting perhaps to make a response that it doesn't involve casualties, maybe a cyberattack, nothing but speculation at this point. yardeni's point was if, in fact, there was a serious geopolitical disruption to crude that took it back to 128, the 2021 highs,

that would be reminiscent of the thing we've worried about the most which is a double top in cpi -- >> for sure. whenever there's an oil shock -- recessions have tended to be preceded by a doubling of oil prices on some level. that's what that would be. there's all kinds of reasons to worry about that. also, there's some people saying, is there something in the geopolitical events that has the ie makings of a more accommodative fed? is that going to be the cover story for why the fed can get a cut? i don't think you ever want to wish for those circumstances where that would be what we get. i zee crude down, stocks down. there is an unwind going down. vast majority of stocks are lower again. nvidia, microsoft up, unh holding the indexes together. looking at 85% of new york stock exchange volume to the downside again today. that's been the rule, that when

yields are up, no more broadening of the market. small caps underperform, the big defensive quality floeth stocks. >> morgan stanley is the only gainer off of earnings again. we discussed it a bit towards the top of the program. bank of america shares down 2.5%. jpmorgan down. in this earnings season at least, the reaction to jpmorgan's quarter was the one most notable with the stock declining more than it had in a very long period of time. you can see bank of america shares down 2.6%. overall, mike, the quarter looked okay, but the financials in general have been -- i mean after what was a very strong first quarter, have not looked good these last few weeks. >> no. they've been stuck. they are right at the nexus of that, the economy can stay strong and we're going to get the fed to ease kind of idea. if that starts to take on some

water, then i do think financials as a group not as well positioned. jpmorgan i just think has so much air under it, such a strong stock. jamie dimon says we don't want to buy a lot back at these prices. costs when up when it wasn't expected. that's a dialing back of the enthusiasm. >> the stock at the end of the day yesterday did not end up sharply at all. >> meantime, still to come, exclusive with ecb president christine lagarde. what's her time terrible for cutting rates if any? ten-year well ak above 4.6 this morning. that may explain the lack of enthusiasm. powell at 1:15, williams 12:30, barkin at 1:00. s&p holding on to 50.50. stay with us.

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the street." our sarah ice innings en is in d.c. today and has a big exclusive. sara, take it away. >> exclusively in washington, d.c. is the president of the european central bank, christine lag lagarde. welcome. >> thank you so much, sara. happy to be here. >> you're in town for the imb world bank meetings as always. interesting timing because geopolitics are front and center. these meetings come after the iranian attack on israel. i wonder if some of these events change the economic outlook for you at all or impact them. >> geopolitical developments have been with us for a long time. certainly from our perspective in europe, the developments started in a harsh and difficult way with the unacceptable invasion by russia of ukraine. that was a major geopolitical development that had significant economic impact, particularly on the energy front. then, of course, we had more and

more. not really often commented upon, like sudan and yemen. obviously since october 7th, it has been a succession of geopolitical developments which have a bearing on economic activity. i think it has a bearing on, number one, consumer confidence and confidence of investors. where are we heading? what are the developments? what impact will it have? it also has an impact on commodity prices. it's not been very significant in the last few weeks, but obviously those geopolitical developments matter a lot. we factor them into our forecast, our modelling as much as we can, and we have to constantly monitor and see how it develops and what impact it has on all these fronts that i have mentioned. >> on commodities, oil has been affected. we watch oil, of course, with

iran. brents are trading around 90. if it spikes higher, if there's an escalation, does that become a factor that changes your inflationary outlook for europe and potentially your policy? >> we will -- as you say, we are monitoring very closely the most recent reaction in the last few days has been moderate. it went up, it went down, but it's a moderate movement. we have gone through the period of significant hike of oil prices and we will be informed by that episode. i think that, you know, since the -- particularly the latest development in ukraine and the energy crisis that europe suffered in particular on oil and gas, have change the landscape as well in terms of sources of supply, in terms of dependence, independence, level of inventories, relationship with other countries, and i think the situation will be different from what it was then, but it does impact and does

impact across the world, not just the area. >> it's not just oil that's been rising. >> sure. >> we've seen prices from aluminum to cocoa to copper, which is happening at a time where overall inflation rates have been coming down. >> yep. >> and i wonder how confident you feel about that level continuing to fall in the wake of some of these rises in commodities? >> you know, i think on commodities we cannot be brought -- it cannot be a general assessment. we have to go sort of sector by sector by sector. when we look at food, for instance, whether processed or unprocessed you have the first difference, and then cocoa has been a very -- has had a significant impact, but you also have to, you know, drill down, taking out cocoa, what is actually the inflation on food. now you can't leave cocoa, and

all the other elements have to be really measured in that basket of food elements, but all commodity prices have an impact and we have to be extremely attentive to those movements. clearly on energy and on food, it has a direct and rapid impact. >> the market is thinking that you're going to cut rates in june. you've signaled june. is that still the plan? >> you know, we are -- we are observing disinflationary process that is moving according to our expectations, and as i said in our latest press conference after the monetary policy decision that we made to keep rates on hold, we just need to build a bit more confidence in this disinflationary process, but if it moves according to our expectations and we don't have, you know, a major shock in

development, we are heading towards, you know, a moment where we have to moderate the restrictive monetary policy that we have applied certainly since september when we decided to hold rate and to keep that restrictive monetary policy. time, subject to the no development of additional shock, it will be time to moderate the restrictive monetary policy in reasonably short order. >> sounds like june. that's your next meeting. how do you think about the policy path from there? every meeting gets a cut? every other meeting? >> i've been extremely clear on that and i have said deliberately we are not precommitting to any rate path. why is that? because number one, we are data dependent. because there's huge uncertainty out there. we just spoke about geopolitical

development. we have to be attentive to those developments. we have to look at the data. we have to draw conclusions from those data. we will continue to apply the three key criterias that we have signaled, which have served us well. it's the inflation outlook, the underlying inflation, and it's the strength of monetary policy transmission. so we will at each and every meeting, particularly when we have projections, but not necessarily only when we have projections, we will look at the evolution and whether or not those data under the three criteria headline if you will, confirm our perspective or not. that's what we will do. >> market expects three this year. is that reasonable? >> you know, i wouldn't comment on that because if you asked me two or three months ago, we were

expecting more than three, and i think we are better off from our central bank perspective. of course, looking at what they anticipate, because they are big boys and they -- too many boys -- but big boys -- >> always. >> and they run their models, observe things, they take risk, they assess, you know, term premium, but we have to be data dependent. we have to look at our own work and we are very steady and focused on what we are seeing and we apply judgment at the end of the day. what is produced by these numbers and data and model projections, have to be taken into account with judgment on the part of the governors. >> i'll try it one other way, which is how restrictive do you see rates right now being for the economy? >> i think we have said that we believe that they are restrictive enough and they are producing an impact.

waesh saying by the same token as data comes in in the next couple months -- april and may will be key moments for data, our confidence will grow that this has been strong enough and we can begin to dial down and moderate the restriction imposed by monetary policy. >> on the inflation front in particular, 2.4% inflation, you've come a long way down. what is the path to 2% look like? >> bumpy. it will be -- you know, i think it's important to actually understand that because we have had this very regular, steady decline in the last few months, you know, 2.8, 2.6, 2.4. i have no idea what the next one will be, but it might not be 2.2. it's not linear, and given the base effects that will be produced by very low prices of

energy, a year ago, we will have a bumfypy road. rates, inflationary rates, might go down, might go up a little bit. they will fluctuate around this line that, for the moment, is going downwards and as i said, unless we have major shocks that would disrupt that expectation, we should continue to be directionally down to our 2% target, which we believe we will reach sustainably in mid '25. that's the expected path of inflation. >> why do you think that inflation has come down farther at this point in eurozone versus in the u.s. where we're still in the 3s? >> i think we're talking about two different -- two different economies, two different series of shocks, and a different kind of inflation. but what is most different between europe and the united

states of america, is the behavior of the consumer and then we can go into why that is. i think what we observe is, european consumers that are very cautious, that continue to save significantly -- when you look at the saving rate in europe it is high and higher than precovid. when you look at the american consumer the american consumer consumes and the level of savings overall is less than what it was precovid. that's a major difference. if you go to the root of why is that? >> fiscal? >> it's fiscal. it's energy. and it's the natural tendency of the american consumers to have confidence, to spend, not to save so much. but fiscal has played a role. it was significantly high in

this country, and it was targeted to households, to consumers, so when people got a check in the mail, they really had money in their hands that they could spend and as a result of that consumed. >> you said at the last meeting that you are not fed dependent, you're data dependent, because the view on the fed and what we're hearing from policymakers is, it's going to be a little bit longer before they think about cutting interest rates. do you not worry about a gap, a divergence in policy, between these two major central banks? >> well, let me explain what i meant by we are not fed dependent, which i think is absolutely correct. there was a debate about the cpi numbers, which came out just very briefly before we had our monetary policy decision, and suddenly everybody fretted about that number and the assumption was, well, if the fed is going to be delayed, which nobody

knows -- and i would certainly not make -- pass a judgment on that, of course, it's going to impact the ecb and the ecb will be delayed. we are data dependent, so our data came down in march. we have had a little bit of data in april. but it's on that basis that we have to make our decisions, and not on the basis of any central bank in the world, be it the fed, which is the largest and with the largest economy measure of gdp. we cannot make decision on that basis, hence, we are not fed dependent. but what i will say, the evolution of inflation, the evolution of monetary policy in any of the large economies that actually have a bearing on the global activity in the world, of course, we take into account, and we take that into account in our own measurements and in our own models. it does find it ways in how we forecast. as i said, one of the three key

criterias are inflation outlook and the other two, but inflation outlook, and that, of course, receives and is informed by multiple data, including what happens in other countries. >> and also currencies. i wonder how closely you're following -- >> central bankers don't talk about currencies as a matter of principle because we don't target currencies. >> it's a transmission mechanism. >> yes. it does have an impact on inflation, so we have to be very attentive to exchange rates, to the value of currencies, to the value of the euro, and how much it impacts inflation in terms of imported inflation, for instance. trade is affected also. >> if euro goes back to parody against the u.s. dollar, is that a good or bad thing for europe? >> as i said, i don't want to comment on exchange rate of any

particular number. >> you're seeing what's happening with the japanese yen, for instance, which has been plummeting because of the huge interest rate differential between japan and the u.s. and i do wonder if that factors in and would be a concern if you do go ahead of the fed in cutting rates? >> we will be driven by our data. we will be driven by our analysis of the situation and we will be targeting the sustainable 2% target we have which will determine price stability. this is our mandate. we are single-mindedly focused on the 3% target and price target. we're looking at lots of other things, including, you know, inflation, including the volume of trades, including the productivity numbers. the multiple data that find their way into the world that will determine. >> european central bank president christine lagarde talking exclusively with our sara eisen in washington this morning. welcome to another hour of

"squawk on the street." i'm carl quintanilla with david faber, live here at post nine of the new york stock exchange. alongside sara live in d.c. after that fascinating interview with lagarde which we'll talk about in a moment. stocks for the most part steady. s&p down a few points. dow supported by unh. up 100. our attention around 4.675. sara, wow the american consumer consumes. david and i were saying it back. >> and the european consumer saves. i was a little surprised. i thought she was going to pin it or month fiscal stimulus as to why here in the u.s., we're seeing higher inflation rates and higher growth rates. here's great chart to just show you the difference in what each economy is seeing in terms of inflation. so europe's inflation or disinflation has come all the way down to 2.4%. that's why she feels confident in talking about the next move being a cut. i thought the headline on that

front is, ecb will cut rates soon barring any major surprises. she did not talk me away from the next meeting which is june. we're viewing this process moving according to our expectations and if there's no additional shock it will be time to moderate restrictive monetary policy in short order. if you see on that chart the u.s. in blue, is in the 3% range. europe in the 2% range. the u.s. has flared a little bit this year and that's the gap, and she pins it on the american consumer. we talk a little bit later and you'll hear in the next hour, carl and, david, on "money movers" about what she's expecting for the european economy which hasn't really grown much, it hasn't fallen into recession, we also talk about and you'll hear in the next hour the balance sheet which doesn't get a lot of attention, not the sexiest topic, but it's important right now as it relates to the liquidity backdrop and how she's

thinking about what the size of that balance sheet should look like. i'm excited to share that in the next hour of "money movers" and our entire interview 8:00 p.m. eastern, a leader special, and, david, i talked to her about everything including her own leadership and how she became a central banker. she's a lawyer. she was leading a major american law firm. she was a finance minister of france. she was the head of the imf. now she's in this eight-year term leading the european central bank until 2027. >> yeah. she has had a somewhat unique but certainly incredible career to your point. i didn't know a number of those things, so i look forward to the longer interview that isn't just going to be necessarily -- will be focused on, but not necessarily all about ecb policy. what else do you got for us this morning? i know you're in d.c. but still prepared beyond lagarde here in terms of things we should be watching certainly from a macro

perspective this morning, as carl said, we continue tokeep a close eye on that 10-year in particular. >> watching the 10-year and the fed speak because we don't have major economic data releases for the rest of the week. we got some housing numbers today, but as far as it shifting the view on policy and rates, that's really the topic de jour mongts investor community. we did get comments from mary daly a voting member at the san francisco fed. the worst thing she says to do is act urgently when urgency is not required. very different tune here than christine lagarde. we have to be thoughtful about not getting too confident that the latest sticky inflation is an indication we are going forward and can't get to confidence she says on the other side basically, that it's necessarily definitive in terms of what they should do. the lack of urgency, there we go, the projection that inflation will continue to come down is going to materialize, that we don't have to be urgent.

it's a continuation, and now they're all singing from the same hymn book of the backtracking of okay, we're moving into a rate cut. they're not saying that they're not going to be cutting rates. they're saying they don't have to be urgent about it, and they don't have to be immediate about it. i think there was less of that than say what we're hearing from europe and the ecb. just because, you know, europe is on the mind with the christine lagarde headlines, if you look at the gap between u.s. and europe gdp that does tell the story of the u.s. consumer consuming and the european consumer saving. it's also just interesting we talk a little bit and hear about it in the leaders interview, about where the growth can come from in europe. why doesn't europe have a silicon valley. why don't they have a single market yet. would that make the economy more dynamic and encourage more investment and more capital? those types of -- so bigger picture issues that maybe should be part of the more immediate

conversation about growth right now. we also talk about china with some of the numbers out of there today and how that's feeding into the export economies with places like germany. >> we did get gdp and industrial production number out of china. the continued focus is on what is an economy certainly led by exports, by industrials, as opposed to anything having to do with domestic consumption at this point despite the hopes that were dashed, the chinese consumer would step up in a bigger way after the lockdowns ended some time back. >> and that's a savings rate story. high savings rate. larry fink of blackrock talking about that and the chinese are saving, they're not consuming, and now there is this chorus of policymakers and ceos, starting with treasury secretary yellen in beijing last week but ecb president lagarde saying that the source of the growth should come from consumption and they should pivot that economy and ultimately that would be better

for global economic growth. look, it's a fascinating time. geopolitics how that's going to impact global gdp going forward. the fragmentation, a lot of discussion about that too, carl and, david, about moving supply chains closer for security reasons, trade barriers and tariffs, which is, obviously, front and center because of what former president trump has been saying he will do if he becomes president again, which is increase those kind of protections and restrictions. >> right. something else front and center this morning, the financials in particular, we got results from the likes of bank of america and morgan stanley. they're moving in two different directions. you can see it reight there. results are down, but morgan stanley a bright spot. over to leslie picker who has been tracking that action and she's been on the conference calls and can tell us what's going on here. >> hey, david. yeah, that morgan stanley call still ongoing now with the market very receptive of the

quarter. toward the top of the call, pick addressed what he called, quote, client onboarding and monitoring in the wealth management business that was a nod to last week's report in the "wall street journal" that multiple agencies were probing the way that morgan stanley vets clients at risk of money laundering. the results in the quarter speak for themselves, and he said discussions with regulators have been ongoing. >> this is not a new matter. we've been focused on our client on boarding and monitoring processes for a good while. we have ongoing communications with our regulators, as all the large banks do. as james said in january, we want to ensure we continue to be world class in every aspect of this growing business. >> pick also said the firm has been spending time, effort and money for multiple years and the costs associated with this are largely already in the expense run rate. this is pick's first full

quarter as ceo. when he also spoke about what he called building momentum in investment banking, both in m&a and underwriting pipeline. >> additional regulatory clarity and a sustained capital markets recovery should have a multiplier effect across our global franchise. further unlocking the unique power of our integrated firm. >> on the bank of america call earlier, there were several questions about net interest income going forward. that's the profitability metric for loan making. executives on the call expect nii to be a little changed in q2 which they expect to be the low point for the year and grow again in q3 and q4. the cfo saying at the end of q1 there were three rate cuts expected starting in june, but if there were fewer the firm would benefit from that. that isn't necessarily an upping of that guidance that's kind of in line with what they've said

previously so perhaps the market was hoping to see a little bit more in terms of that benefit and that's why the stock is down about 3.9% right now. guys. >> i was going to come back. that is the main reason you think, leslie? it's not quite the performance or lack of performance that we saw after jpmorgan's earnings release, but nonetheless, that's not reat. what else, anything else at play here? again, the numbers did not disappoint, at least in terms of what they were expecting? >> when the numbers came out before any kind of guidance was given or reiterated, the stock was doing fine and had been solidly in the green for most of the morning. it was kind of that hammering of what to expect on the net interest income front. it's also worth noting that bank of america had sequential growth in net interest income, kind of a divergence from some of its peers, but a lot of the street was looking for some kind of a boost from this higher for longer environment. however, bank of america, as erika najarian of ubs would call

it, in this rate trap dynamic where they are benefitted by higher rates, but they have these underwater securities on their balance sheet which can put together some kind of a drag and that number ticked up to $109 billion in unrealized losses this quarter as well. higher rates are good in some ways for this bank, but also can be a drag as well. >> leslie picker and a whole lot more on bank of america this afternoon. 3:00 p.m. eastern. ceo brian moynihan will be joining me on "closing bell." as we head to break our road map for the rest of the hour. the pulse of health care earnings with results from dow members j&j and united health taking shares in different directions. >> netflix shares have outperformed this afternoon, but, of course, can the gains continue is the key question for investors. we'll talk to one analyst making a new call ahead of the earnings we'll get later in the week.

>> chinese stocks in the cross hairs of lawmakers. the exclusive is cominup ag s a big show still ahead. "squawk on the street" is back after this break.

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don't wait! call, click or visit an xfinity store today. we turn to the impact of middle east tension in the oil markets. our next guest believes oil prices will ease lower. a cnbc contributor joins us this morning, john, great to have you. i guess that would be taken as a welcome sign. how confident are you in that call? what needs to happen to make it

happen? >> first of all, i think a lot of the least angst and concerns have been priced into this market. look, i mean, brent is hovering around $90 a barrel, carl. a lot has been priced in. also, too, the uptick in demand that we've seen from china, some of the data has gotten better, although there's plenty for data as well. that's pushing against any further increases in my view. so it shouldn't take much. if we can get the situation between iran and israel to calm down here and for a potential peace deal to finally be brokered with respect to gaza, we should be all set here for prices to head lower in time for the driving season. >> yeah. >> memorial day. >> would that allow the administration the ability to afford or avoid either producers or talking about the spr? >> i do. i think the administration is very on top of the oil market for obvious reasons and also,

too, they didn't want to sort of rattle the market with their spr releases. one second, carl. i'm sorry. >> no worries. >> still got me, john? >> i am here, carl. sorry about that. yes. i do think that the prices should ease sufficiently that administration can stay intact on trying to fill the spr, refill it, and also, obviously, not tap it and not have to draw upon all that. i think prices should, again, ease as some of these situations come off the oil. >> although there is always the possibility, of course, that israel will respond forcibly to the iranian attack and that we will see a significant escalation, if, in fact, that occurs, what does that do to your forecast? >> i mean no doubt about that, david. the market, that's why brent is at $90 a barrel, going back over

100 is a chip shot from here for sure. i think we certainly rally. i mean big buying in the crude market last week around -- earlier in the week, tuesday, wednesday, as a result of, you know, word coming into the market about what the iranians were finally going to do. yes, it's very much a cliff trade at the moment. do we go much higher or do we go somewhat lower. that's what we're staring down. i think people are overreacting to a degree, to the situation in the middle east. iran, obviously, doesn't want to provoke an israeli -- the israeli response and the israelis are getting pressure not to do so. if you play that's way, that's what oil market seems to be treading on right now, steady to lower should be the direction. >> i wonder about if it's higher, if it's higher for longer, john, if the duration of this conflict and war is leading to any rethink of how long

prices might stay elevated and what you're seeing in the forward curves around that point? >> interestingly, the forward curve is indicating that prices in the back of the second half of the year are appreciably lower than what we are right now. however in the commodity markets that curve structure is indicative of a tight market, of a market that's very vulnerable to upside moves, so that's what the concern is. >> john, appreciate that and we'll watch it closely this week as we see crowd below the flat line today. thanks. >> thank you. speaking of tensions in the middle east, let's get to the latest on the ground. matt bradley joins us live from beirut, lebanon. matt? >> yes. so what we're hearing here in beirut is, you know, the thud, the prospect of war in the background. now the situation here is not so dire. this is a country that is, unfortunately, quite used to violence, but there has been those warning signs from the

israelis. nbc news was told by the israelis that there could be an imminent israeli counter attack to the iranian counter attack that happened over the weekend. this was, by the iranians, a response to israel striking one of their diplomatic buildings, a consulate, in damascus, a couple weeks ago, and so there's been a tit-for-tat and we're about to see the latest tit-for-tat within the next 24 hours if the israelis are to be believed. one of the troubling things we've seen here is that the israelis sounds like might not do a reprisal attack against iran itself. that made that such an unprecedented move attacking from iran itself by the iranian military against israeli land itself. there was that -- this fight that is normally done between proxies and other militant groups was not done directly between nations for the first time in decades. it looks as though the israeli attack, again if the leaks we're hearing are to be believed, might go against iranian

proxies. that would put lebanon in the cross hairs. hezbollah, the main dominant force, is waiting for more of a fight, but we've been seeing something like a war already going on over the border between southern lebanon and israel. it will take a lot to see that increase any more than it already is. we've seen hundreds of people killed in fighting across that border. if it weren't for what's going on in the gaza strip and israel that would be a big headline for the past several months but it has been dwarfed by the huge loss of life we've been seeing from the hamas attacks on october 7 and then the more than 30,000 palestinians who have been killed, most of them civilians, according to the gaza ministry of health over the last six months. so this is a situation that really does risk an internationalization of the conflict and that's why we're seeing frantic diplomacy on all sides trying to tamper emotions, trying to keep the israelis from launching some kind of attack that could tip this over the edge.

a lot of this is about israeli domestic political concerns. benjamin netanyahu, the prime minister, is facing calls from the right wing of his already very right wing government, demanding some sort of attack, demanding not to let iran's huge missile barrage go unanswered even throw it caused very little damage. again, this is a very good moment for all sides to step back from the brink, but it looks as though we might not get that lucky. >> thank you very much. we'll watch the tense northern border. matt bradley in beirut, thanks. we're going to continue to watch that and still to come, fresh earnings out of two dow components, united health care and j&j heading in opposite directions this morning. stay with us on "squawk on the street."

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and track market trends with up-to-the-minute news and insights. trade brilliantly with schwab. welcome back to "squawk on the street." to health care, dow component the out and shares moving different directions on the back of those numbers. bertha coombs has been covering it since early this morning. good morning. >> hey, carl. j&j's adjusted earnings of 271 per share solidly beat expectations. on the top line revenues of 21.4

billion were in line. the quarter benefitted from a big jump in medical device sales. we've been hearing about that from the insurers a lot of people are getting these transplants. med tech was below consensus. j&j cut its guidance, particularly on the top line a bit below expectations. on the other side united health big beat on the top and bottom line. adjusted earnings of 691 per share, nearly $100 billion in revenues, despite the impact of the change health care cyberattack which made for a complex report. on the call the ceo said united health's scale has really helped them provide support for providers during the outage as they've worked to get billing and payment systems fully restored. >> extraordinary example of really the resources of usg and the support of many of the biggest companies across america

in the tech environment coming in to help recover from this particular attack, which was, you know, straight out an attack on the u.s. health system and designed to create maximum damage. >> now one of the big takeaways for united health's peers from the report is the company sees medical cost trends still high, but stable, notwithstanding all the disruption from the claims processes. the health insurance giant side posted a medical cost ratio of 84.3%, how much premiums they're paying for medical costs that includes a 40 basis points impact from change disruption, which is well below what they saw in the fourth quarter of last year having a positive effect for the likes of humana which has been struggling with high costs amongst seniors. >> we're seeing it across the board. thank you. the 6% move good for 170 dow points. such a weight on the dow jones industrial average.

after the break, is the china rebound real? fresh economic data there overnight. we'll break down the numbers after the break. a big earnings interview next hour on "money movers." the ceo of pnc financial, the shares falling 3% on a revenue miss for the quarter. bill demcheck's read from the ground across the economy and what they're seeing on rat aess well in the 11:00 hour. don't go anywhere. [city noise] investment opportunities are everywhere you turn. do you charge forward? freeze in your tracks? (♪♪) or, let curiosity light the way. at t. rowe price, we're asking smart questions

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my name is oluseyi and some of my favorite moments

throughout my life are watching sports with my dad. now, i work at comcast as part of the team that created our ai highlights technology, which uses ai to detect the major plays in a sports game. giving millions of fans, like my dad and me, new ways of catching up on their favorite sport. welcome back. i'm pippa stevens with your cnbc news update. jury selection continues this morning in donald trump's hush money trial in new york. no jurors were selected monday. the former president is required to attend the trial, which could last up to eight weeks. he has entered a not guilty plea on 34 counts tied to a payment he made to adult film actress stormy daniels at the end of the

2016 election cycle to cover up an alleged affair. the house will send its articles of impeachment against homeland security secretary al han be dro mayor kags to the nate today, according to a spokesperson for mike johnson. the move will kick off a trial in the upper chamber expected to end with democratic led chamber dismissing the issue. a fire broke out at the koppen hager stock market. emergency responders and employees pushed to save large paintings from the building. the flames caused the building's roof to collapse and sent the famed spire tumbling town. it's not clear what started the fire. carl? >> terrible images. thank you. i'll take it. pippa stevens. a host of new economic data out of china today raising questions about the recovery narrative there and ecb president christine lagarde just told me she isn't sure where the economy there is going. have a listen. >> china is no longer the

single -- well the largest supply and trade partner for the u.s., for instance, but it is still a significant trade partner for many countries. that export engine is slowing down. massive infrastructure project, that engine is probably slowing down as well, and it remains to be seen how much focus and push there is on consumption. question mark, i don't have the answer. >> that was in response to a question i asked her about whether we've seen peak china in termsof growth rates, which she admitted those days of 8% growth, really do seem like they're behind us. let's get to our eunice yoon on the ground in beijing with the latest on how today's data is being framed and how we should look at it. >> yeah. that's right, sara. it looks increasingly as though china's answer to that question might be that they should crank up the factories and sell overseas because that's really what powered the q1 gdp growth

and put in the numbers that are a surprise to the upside. they came in at 5.3%, versus an expected 4.6%. the march data, though, raised some doubts that therecovery could last. the retail sales numbers, the industrial production both missed. new home sales and new home prices i should say fell at their fastest clip since 2015. the investment figure for the property sector was down by 17% from a year ago. sales were down by 24% from a year ago. property sector very important to drive the economy forward. fixed investment, a traditional driver, actually priced to the upside for the quarter. a lot of that money going into the manufacturing sector again to help super charge the sector and a lot of those sales overseas. much to the dismay, of course, to the trading partners of china, the u.s. as well as

europe. in fact, most recent critic of this was the german chancellor who is in china the past couple days and criticized what he described as china's overproduction and said there need to be more progress on some of these long-standing structural issues. sara? >> so eunice, what do you make of the consumption data that we've seen so far that's been mostly weaker than expected on retail sales and the fact that now you have this louder chorus of u.s. policymakers, european policymakers, ceos, calling on china to shift the model toward thinking more about consumers? how is that landing in china, and is there any evidence that they would do something about it? >> there isn't a whole lot of evidence that china is going to change its tact to try to really ramp up the consumption. they definitely give all the lip service and we've heard from the

premier many times saying that they want to upgrade big ticket items, home appliances, go green, that sort of thing, but in terms of really juicing up the consumption, what they need to do is rev up the confidence and what we're seeing in the property sector, the outlook that people are worried about, the fact that job market hasn't been doing so well, that's really what's driving the people to save here as opposed to spend. >> yeah. big topic we were talking about last week. eunice and i missed each other in beijing but now i know where you're standing on the balcony. thank you very much. our eunice yoon. speaking of that trip, treasury secretary janet yellen is on the wires making some headlines speaking at the imf world bank meetings and taking some questions from reporters. she's mostly talking about geopolitics. one interesting head line because it relates to, obviously, the fluid situation in the middle east. she said, all options are on the

table to disrupt iran's terrorist financing and also she fully expects there will be further sanctions against iran in coming days. one more, she says we've been working to diminish iran's ability to export oil. there may be more that we can do. let's get more on this and the market right now. joining us is jpmorgan asset chief global strategist david kelly. oil prices weaker again, but i wonder if they're out of the woods, especially if the treasury secretary is talking about more restrictions to iranian oil and how they've been able to sell it to places like china and bring in a lot of cash. >> well, there is always a potential for a supply shock, and i think, obviously, the heightened tensions between the united states and iran and israel increased the risk of either our sanctions or, perhaps, activity by iran in the strait of hormuz having an

impact on oil prices. in some ways, what you reported about china is equally important. chinese consumers are, you know, they lack confidence and that is slowing the chinese economy down more than is portrayed in the gdp numbers. that has an impact on total global consumption. i'm not seeing a about ig growth in global commodity consumption that would push oil prices up to a permanently high level. we've seen oil prices move up and they are at high levels and they could get pushed higher by shock, but longer term over a year, two years, three years, unless we see more global economic growth i don't think we'll see a permanently higher plateau in oil places. >> what do you see as the stock market's next catalyst? feels like we're adjusting here to a new rate path or rate expectations from the fed. we're in earnings season. are the earnings going to justify these levels and what comes next? >> i think the earnings season will be okay. i think what u.s. economy is

proving, you can see this in the jobs report from march which seems like a long time ago, seems like the economy can do very good economic growth, with still a lot of wage restraint, because of immigrants coming and because workers in the united states are generally passive in terms of demanding wage increases. what that should allow happen, we should see the inflation decline begin to resume. it's stalled out over the last six months or so, but i think we will see it begin to decline more and if inflation resumes a downward path it may not be fast enough to allow for a june rate cut but the rate cuts will come back on the table if inflation begins to come down more. that's the most important thing to look at. can we get a further slide in inflation here? earnings i think will be good, but i don't think the market is teeing off that. what's the rate environment going to be for markets in general.

>> why are you confident inflation will continue its downtrend from here with the rise in commodities with the re-acceleration in u.s. growth, including manufacturing going back above pmi above 50 expansion? >> well, growth is okay. i know that it's 2.8% for the first quarter. we're lower than that. housing starts are a little bit on the weak side. retail sales look okay. we still see the economy slowing down to about a 2% growth rate. what's interesting here is the growth in immigration seems to be having an impact on the labor supply which is allowing us to do that wil with lower inflation. i don't think you have that overheating. if you actually look at the way inflation is calculated, so much of it that is in rent and in auto insurance, those two categories represent over two-thirds of the inflation that we actually saw in the month of march and year-over-year basis. that's going to fade going

forward almost certainly when you look at those numbers. it's hard for the overall inflation to go up if those two categories are coming down. >> we continue to see yields march higher. 10-year towards 4.7%, 2-year yield at 5%. david do we need those yields to start falling again for the equity rally to resume? >> possibly because what we're also seeing is we're seeing much more volatility in long-term interest rates in the last few years, but certainly this year a lot of volatility and we also do need to see, you know, a change in attitude at the fed. the fed is so nervous about being seen as being dovish here and that's why, you know, when that cpi print hit, that was enough to say, well if you don't look at the dot plot, they're not going to go in june. they're nervous about easing just because of lower inflation, the possibility of lower inflation in the future. i think that's really what's

keeping the rate outlook high here. as i said, if inflation begins to crack again, interest rates should come down even in a bumpy fashion should help out financial markets in general. >> bulls will be encouraged by your words and your predictions there. thank you very much for the time today. >> you bet. >> david kelly. tune in tonight for the full interview with ecb president christine lagarde. it's a cnbc leaders special 8:00 p.m. eastern time. a lot of conversations there about the big picture and what president lagarde is seeing right now. and some comments, carl, that i've never heard from her and i've been covering her a very long time. >> can't wait for that. look forward to that tonight, 8:00 p.m. eastern. still ahead a bullish call on netflix ahead of earnings this week. we're going to talk to the analyst behind that call when we're back in a moment.

welcome back to "squawk on the street." investors are getting ready to tune in to earnings from netflix later this week. the shares have been a strong outperformer up almost 30% this year right near new highs. stock getting a price target hike today. joining us is the analyst that made that call, guggenheim's michael morris boosting to 700, it had been 600. always good to have you. what is giving you the confidence to make a price hike like that, especially, you know, i mean, netflix can be notoriously volatile around its earnings print. >> that's absolutely an accurate statement. it's very hard to predict the quarter especially around the company's most important metric for sentiment which is member trends. if you think about a business with 260 million global members, paying members right now, and 1

or 2 million net add change can impact sentiment in the short term it is difficult to predict in the quarters. the longer term prospects for the company, the reason we raised our price target, really around two things, number one, we think there continues to be a tremendous amount of addressable market opportunity in the u.s., but really outside the u.s. for membership growth over time, and number two, we think as a company continues to widen its lead amongst streaming competition, they're able to better target their investment dollars into areas that drive adoption of the service. we like where they are on the virtuous cycle even now after the success the company has had over the last number of years. >> you seem to also believe that total addressable market is going to expand. you mentioned it briefly. as a result of what broadband becoming more available in some of these parts of the world essentially, i guess, where it is not been available

previously? >> that's a part of it. certainly i think when i look at a growth opportunity into 6 or 700 million broadband customers worldwide and 260 million current members i reference it's about penetrating the broadband households that currently exist. it shouldn't be lost there are a couple of other expanders there. one is that broadband availability does continue to also grow on a worldwide basis, and two we're talking about broadband households, right. as we think about sitting at home watching netflix with our broadband subscription, but as you grow globally, especially in emerging market economies, it's really about transaction and broadband enabled smartphones as well, so that addressable market i would argue is bigger than the 6 to 700 million households we talk about right now. >> we end to focus long term here but also short term on occasion, particularly when there could be a lot of price movement around earnings print

such as netflix. do you think they're going to benefit from the crackdown on password sharing or has that run its course? >> there is benefit there. the implemented policies in the second quarter of 2023 was a ace was impacted. so, that rolling impact, whether by market or by type of customer, they've tried to be selective about when they've put the policies in place, is still ongoing. but i do believe it's in the latter stages. at the same time, i don't want to lose sight of that forward growth. i think the genre expansion that the company is doing on the content side is continuing to fuel demand in the u.s., the most mature economy, the data we look at, indicates that the first quarter of 2024 was particularly strong in the u.s. but it also will feed into that growth opportunity outside the u.s. so, the password crackdown certainly a benefit to the company. and i think benefitted member growth. but we think that the core growth is still the story going

forward from here. >> all right. michael, appreciate it. thank you. >> thank you for having me. in d.c., an interview you do not want to miss next hour with the california congresswoman maxine waters. she'll be joining me in washington. the ranking member on house committee for financial services. that's at "money movers," which kicks off at 11:00 a.m. after the break, a group of lawmakers want the nasdaq to delist certain chinese companies. ayituseronhy. st wh he "squawk on the street." you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

washing djt, the first dip below the 200-day moving average since halloween. big story in the journal this morning. the journal's words, once hot stock turned cold. market cap has gone from $9 billion plus to 3.8, somewhere in there. we'll continue to monitor that as they talk this morning about the r&d phase. their new streaming service, which they hope eventually brings a streaming application to households. >> yeah. and revenues and profits to the company. carl, we're also watching this issue of chinese companies. they're back in the cross-hairs because washington lawmakers are urging the nasdaq to delist some

companies in the space over national security concerns. let's get to emily wilkins, who has been following that story. how serious is this, emily? >> reporter: hey, sara. at this point it's just an inquiry. could become pretty serious pretty quickly. this group of lawmakers is encouraging nasdaq to delist chinese companies that have been black listed by the defense department. in first letter seen by cnbc, republicans on the select committee on the chinese communist party, they're raising the alarm that chinese company has raised over $190 million while being on the defense department list of chinese military companies. congresswoman ashley henson, a member of the select committee who led the letter, said that the funds went towards building a mega factory in china to help china's liberation army and access military equipment. in a statement to cnbc she said she's looking forward to working with nasdaq to delist hesai and protect u.s. investors from unwillingly funding chinese companies that could pose risks to national security.

this is not the first time the select committee targeted hesai. . they use lasers to measure the speed and distance of physical options, self-driving vehicles throughout cities. it could pose a serious national security risk for lawmakers based on the data they collect. hesai was on the department of defense's list of chinese military companies, but they said that addition was unjust, capricious and meritless. they said they have no ties to militaries in any country. and lawmakers still have these concerns and want more on nasdaq's policies around black listed companies. she hopes this begins a discussion. we'll see what the next steps are. >> we'll certainly follow nasdaq's response and what they find out. what can you tell us about the bills that speaker mike johnson is trying to get through the house right now, where that stands and where he stands? >> reporter: so, johnson is really trying to get forward that package that's almost $100

billion of aid to ukraine, to israel, to taiwan and the indo-pacific. his strategy for doing so right now, because remember the ukrainian aid is not popular among house republicans, he wants to basically take the package, break it into four different votes, let everyone vote on individual pieces and put it together. house republicans just wrapped up a meeting and it does not sound like there's a lot of support for that plan, or at least as much needs to be. johnson is facing yet another potential outster like kevin mccarthy. that motion to vacate was filed a couple of weeks ago. it was just one lawmaker. now another one joining. again, perilous position for speaker johnson, as well as aid for ukraine. ha you. our live market coverage will continue right after this. giving traders even more ways to sharpen their skills with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more -

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♪♪ ♪♪ good tuesday morning again. welcome to "money movers." i'm sara eisen live in washington, d.c., today. carl quintanilla live from new york stock exchange. an exclusive with the european central bank president christine lagarde on the outlook for rate policy and the outlook for the european economy