next from the federal reserve. how do they deal with inflation and higher commodity prices that we're seeing as a result of this, as well. we'll continue to watch this for you every tick of the day. we'll hand things over in a moment to "squawk on the street." the three of us will be back here tomorrow morning to pick things up. stay tuned to cnbc all day now time for "squawk on the street." good thursday morning. i'm carl quintanilla with jim cramer and david faber futures are lower as russia launches war in ukraine. air and ground attacks european markets down big. vix to 37. historic implications across asset classes. the ukraine invasion front and center vladimir putin anoumpbsing military operations had begun. the offensive appearing to stretch across the entire country with explosion and air

r sirens heard president biden calling the attacks unprovoked and unjustified. he will meet with g-7 counter parts this morning before addressing the american people jim, we're on watch to see how more severe sanctions get. obviously, any signs of commodity disruption. >> i do believe that we're down as much as europe, which isn't right. europe is directly impacted in terms of energy costs. this is horrendous that he's going to get away with it. it's basically a lightning strike here. he's evil. at the same time i recognize that we have thought about this every day. i don't think president biden could have prepared us more for how it was going to happen there were daily, david, daily reports it was going to happen now the markets are reacting like it's in shock it means you have to go against the market the market will be wrong today. >> okay. so you believe this is -- you

know, again, we don't want to make light of the humanitarian crisis >>well, that's right. >> that is unfolding that said, we're here to talk about the implications economically and for markets what i'm hearing you say there may be an opportunity here >> i am saying there may be an opportunity. we've got friday, which is historically a weak day when you go into a war. monday where people are discovering this i think you have to remember there are people who woke up today and looked at their 401 a and said are -- 401(k) said i have to take some action we have been preparing ourselves endlessly for this it doesn't mean we can't go down again. >> no. there have beens asset managers preparing. if you've been paying attention, certainly if you read that speech earlier this week -- >> well the speech was a stalin speech. >> it made it clear that perhaps clearer that this was a very

significant possibility. >> right. >> and so, yeah. there are those who are going to start to use this as an opportunity to cover shorts and things. >> that's right. >> it's a as a result of expectations. >> and sell oils oils should be sold. >> right i mean, the question i keep getting is how sustained is the move in oil? because of any economic ramifications, rodely speaking, it's that one. you pointed at energy prices in europe, which has a broader impact there certainly natural gas prices are up dramatically. we've talked a lot about germany's decisions in terms of relying on solar and wind and saying no to nuclear and how they're brewing that decision there perhaps there. not as much france. >> yeah. an excellent way to store it i think, carl, one of the things to recognize is that -- we started at 4:00 we were down less we do have abundant natural gas.

they do not. we do not have an nrmg problem in this country. but we've held back. i don't think that, you know, if you're some of these oil companies the ratio is $30 or $40, it's worth it for them to drill. even though they have held back. i think the oils should be scaled out of. i think if you want to the --ty do that. i feel the prices. if you get -- if stocks have a deal and treasuries make lot of sense to me. you'll notice a bunch of them aren't even down anything that is drug and therefore not related to the recession, as the market is predicting, i think is attractive today you buy proctor if it reaches $150 we'll see a slowdown i'm not saying we'll have a roll back in inflation. if you presume that jay powell moves anyway you buy drugs and consumer

package goods stocks. >> yeah. even with the currency effects and even with the slew of names that have not had good things to say about the consumer this week, we got more last night everything from e bay to bed bath to -- >> discretionary, discretionary, discretionary. >> hertz will be down. >> discretionary this is discretionary. i don't want to buy anything that doesn't need, you know, where you don't have to go i mean, i think you're not going to stop buying j & j products. i just don't want to get ahead of what i regard as being an opportunity over three-day period if the war ends because russia has been in stall. we haven't seen the ukrainian president of late, then what happens? we, the germans, continue to say no they wait until the spring. >> yeah. you would expect if the sanctions would deepen and/or stay in place for a long period

of time. >> it's a different economy than 1997 it's a self-sustaining economy. >> you're talking russia >> yes unless you think that china comes in and says, you know, we're going to risk fracturing our new-found relationship because we're so embedded. remember when you fly into milan, all you see are belt and road signs prc. the prc. >> why would russia sell all their u.s. treasuries, load up on gold, create $180 million rainy day fund, to stop now? >> okay. because that's -- that is the world war iii option you can't go against nato. i mean, nato does have troops. we have divisions. we don't have a -- most of the divisions are, you know -- but i believe if you try to take on the west on nato, nato will act.

that's world war iii i see it's the biggest incursion by russia. it's no the size of the army you go to hungary, which is extraordinary. we didn't have our act together. these are independent countries we sacrifice ukraine is not part of that whole world. this is not the iron curtain, okay, that was extended in a vicious way. those were issues. those were tanks into the west or at least countries we thought were neutral countries somewhat involved with the iron curtain. but ukraine is not one of them it's just sad. it's sad. >> it's expendable from nato's point of view. >> human lives are not. >> it's not a part of nato

why hasn't been allowed? it's chaotic it's got a government that is -- what other real threat is a potential for a wider conflict you do not see that as a significant threat >> i'm saying that even china will not accept a wider conflict it can't be a nation alone as rich as russia may be. the west has a backbone, a certain point. the west is well aware it turned out to be appeasement. we basically gave them the land. and then think move in we been letting them have areas

that were, you know, world war ii was defended by the russians and they're replaying world war ii they're not replaying soviet union. they're eplaying world war ii. in world war ii, there was a period of time where you could go against germany the germans are not going to let it happen this time. i believe you can have this. it's not going to be limited i mean, i think it's going to threaten other places but unless you think it's a joke. i have never felt th- i mean, president trump said that you think nato represents the free world and nato will not let anyone roll over pol p poland will not roll over. there are lots of people have guns in ukraine.

we wouldn't have in our country >>well, government basically said this morning anybody who wants a gun to defend the country is welcome to one. >> yeah. >> we got a lot of guns here. >>well, we have a militia because the second amendment allows us. >> yes. >> but i think that in the end, look, let's not forget this is not afghanistan where the russians came in and there was defeat right. >> uh-huh. >> or the british in the 1800s yeah or the americans, actually. >> crimea -- >> until not that long ago. >> this is not afghanistan. >> yeah. >> for whatever reason manages to -- >> have you read -- >> no. it's unbelievable. sketchers is fantastic we'll find out more what we might hear from the president today. good morning >> reporter: good morning. what you guys are discussing the news that we saw overnight, this

is what the white house and the west feared most and warned for weeks. a full-scale invasion by russia into ukraine we saw it launched overnight early morning in european time ukraine's president addressing the nation early in the morning over in ukraine in a televised speech saying citizens should be taking up arms, that the country is being attacked from the south, north, east, and from the air. so certainly a very dire situation there. after a u.n. security council meeting late last night failed to thwart the attack, allies are now convening on multiple fronts to go all out on sanctions according to u.s. and european officials. the question is whether it is too little too late. president biden will speak in the early afternoon after meeting with g 7 leaders virtually this morning that meeting was scheduled to take place at 9:00 a.m. eastern time meanwhile, uncertainty is spreading through europe and the

uk drivers filling their gcars wit gasoline prices spiking are higher on fears of supply shortages. in ukraine, nationals witt drawing money. as ukrainians flee the country, they call on neighboring countries to keep their borders open to asylum seekers. >> thank you for that, kayla kayla in washington. the you did talk about the prospect of further sanctions with david solomon of goldman sachs. you want to take a listen?

>> yeah. >> the market the last couple of days appears to be relatively resilient in the context of the news i would highlight it's early sanctions, i think, can be an effective tool to contributing to influence or behavior change over time. so we're watching this very closely. our clients are watching it closely. we'll have to see how it unfolds. >> did see big action in european banks this morning. >> right remember this is a controlled economy run by a dictator who is not up for election, so to speak. and i believe that in the end, europe is hurt more than us. we're down 4 to 5% then, david, what that says we are europe we don't have much natural gas, our banks are in trouble >>well, it's an initial reaction, jim. >> yeah. >> i'm saying don't panic. look for things with a higher yield and do well in a recession

that don't have supply chain problems. >> understood. >> maybe not peloton or weber grills. >> i disagree. we'll talk about it later. it's a time to buy free cash flow maybe google you mentioned a couple of times this morning 20 times earnings. >> yeah. >> we had a meeting this morning. we had a meeting this morning talking to cnbc what to recommend. and that is going to be our idea you buy google you buy a company that -- no supply chain problems. sells at a discount. >> yeah. those who look back to crimea in 2014 and try to understand what the market rep action was then, how long it lasted, and sort of overlay of that on the current situation. is that a fair representation or a mistake? >> crimea was considered to be russian. >> it was also quick

there was limited reaction. >> we justify it it was russian. it wasn't russian until we said that let's say the president flees ukraine. or that he doesn't dig in his heels or goes into a bunker or something. the russians will announce here is the new government. they could put in a puppet government right now okay they had a puppet government in afghanistan. why can't they do a puppet government in ukraine? our problem, the u.s., the west's problem we've said here is what we're going to do. there are five banks we're doing two banks. those banks have no problems they don't need the west they don't we're going after wealthiology garages. they don't need the west we're talking about not taking their energy they have markets -- the level here is nil. if you put -- if you flew the 82nd airborne in, which is a

great division, and said, listen, have at it, russia >> we sent them to poland. >> yeah. >> that's a big part of the discussion senator warner saying what if a cyber war develops in which other nato allies are, poland are affected. >> you have to spend money you can stop these attacks they're not as brilliant as you

think. >> we'll watch that. obviously, the opening bell in just under 15 minutes. we'll take a break here. keep your eye on futures there's a lot of corporate news. it's a difficult morning to talk about it but we'll try to get to discovery, moderna, lemona, d reheweomback [sfx: street ambience] ♪ ["fly me to the moon"] ♪ ♪ ♪ imagine a community where millions share ideas and trade stocks, crypto and beyond. to the moon? in other words... etoro.the power of social investing.

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tech continues to tumble in the premarket. we have a few names in the space reporting results today.

including booking, ebay, alibaba. jim, rev enough up 10. >> it's funny. they made the earnings we want the revenues it's interesting they're actually at the level of amazon. bookings i didn't thinker was nearly as bad. ebay said we won't do as well. when they give you that heads up they won't do as well, you don't run into the fire. >> no. they'll be down. there's a connection, in a way, between ebay and bookings holdings it's something we saw play out yesterday which is margins are getting compressioned. >> yes that's a concern for booking holdings it appears they'll be spending more on marketing. by the way, goes back to google, which will be a beneficiary of increased marketing spend. >> yes absolutely. >> you've got margin pressures

the ebitda number is below the guidance out there on e bay, not dissimilar they're looking for modest gmv growth in the second half of the year but greater than anticipated margin pressure due to a step up in investment what does it mean? it's marketing to some extent. it's also just increase overall in operating expepdtures that goes with trying to deprive the growth so decrease in margins that links those two. >> how do you know your spend will do well >> right. >> that's a good question. what los said yesterday margin expansion. >> yeah. >> not the case yesterday. we saw that with the number of that decline

back to alibaba for a moment i'm looking at the note here i used to know the company quite well i'm not as close as i used to be they're saying the main surprise the quarter came from cloud. rev revenue declining. >> yeah. cloud is not nearly as big. >> yeah. it was an amazingly bad number of cloud can we talk soft bank for a second they seem to be involved in a lot of things. >> well, they own 25% of alibaba. it's an enormous stake that is still a great investment given what they've paid for it go back to it. i mean, the stock was $600 billion company not that long ago. we're below $300 billion. >> it's fine they're on the other side.

>> do you overlay it with soft bank, they probably won't look dissimilar. >> don't count them out. i haven't in the past. >> i don't want to do that. >> he gets back up. >> i'm not counting cathie wood out. >> okay. silence. >> two name that will outperform on a relative basis today live nation and imax relative to norwegian and booking. i wonder if you think the consumer will go out but maybe just in town. >> absolutely going to go out. i mean, the consumer, as we know from brian moynihan last week, ready to roll. you know, live nation was very, very good. we talked about that last night. it's such an outlier i didn't think bookings was that bad. the two nations there's the nation that is so happy they're not wearing masks and going out. then the nation that is perplexed by ukraine

they're differentnations i mean, not a lot of people are being cancelled and going on a trip because of ukraine. >> no. not go to europe. >> might not go to europe. >> really? >> what. maybe not eastern europe. >> i don't think most people know where kyiv is they were still calling it the ukraine. al >> you mentioned -- i guess we'll call it the endemic now. 1129 beats 1016 at moderna. >> yeah. >> they have the new advanced purchase agreements with governments. >> yeah. that stock has been nothing short of a disaster for the last more than a year. >> very true wow. >> i mean, it's going to be up today but you can see it there it is. can you zoom in? sorry. nasdaq humor. >> it's up nicely. but the last year it's --

>> these are not splits. lemonade is not a three-for-one split. >> we'll talk about the lemonade. >> i had a lemonade stand. we had a great return on investment. >> you talked about zoom it's not looking so good either. >> you know they said, look, we always do this we announce basically a shortfall. don't take us seriously. that was a disjointed conference call. >> we'll get to the names after the break. opening bell coming up in a few moments here some of ecco data we'll get to back in a minute

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we have about two minutes before we get started with trading. we'll squeeze in a mad dash. something else you may be focussed on this morning. >> stop the yields almost 3% with a balance sheet that is radically improved and held at five times earnings and sounds domestic does it sound intriguing >> yes >> macy's. they decided not to spin off

their dot-com, so to speak are the stock is falling apart but the company is getting better now i have -- you can say, well, that switch one is no brick and mortar fashion revolve is interesting but this company is doing so much better in the fact it sells at five times earnings as a demonstration of multiple shrinking and opportunity. >> right but in this case, there are earnings, as well. i point that out because multiples have been shrinking for any number of companies. we're talking about a nasdaq going down we start trading about 20%. >> i look for companies that have just reported so we know that are the current state of play. and continues to make the balance sheet better i'm not saying -- i'm not panicking. i'm saying this is the destruction that we're seeing. >> right. >> and macy's has nothing to do with ukraine [ applause ]

>> we'll get to the opening bell at the cnbc real time exchange celebrating the real estate opportunities. the nasdaq -- if you're joining us, the big news for the day is russian launching war in ukraine. you mentioned the air and ground attacks. long lines at gas stations, pharmacies, bus stations, and pictures of refugees and parents with their kids. >> it's terrible there look we didn't really do anything i mean, we talked -- >> if you say you imply there's an ekation that our allies would get involved in a war with

russia it's an argument. >> it is we did not deter. >> how about that? we were unable to deter. >> we failed at deterring. i'm going give david and have him shoot something down and laugh at me. >> okay. >> get a little levity. >> yeah. >> david, facebook sells at 13 times earnings. >> okay. is that including or not including the investment they'll continue to make in the metaverse. when you actually add that in, the multiple goes up a bit. >> right. >> even the it's in the high teens. >> right i'm saying if you had -- if you wanted to -- if you -- you're not. you're very well-dressed individual if you were to want to catch a falling knight, you could do worse. this shrinkage in multiples. it may not be accompanied by a shrink age in earnings i'm saying that the platforms, which is now doomed -- yes >> it may be the third quarter i know it's a monstrously long

time higher than now. >> it may be it as we see it's down over 42% for the year obviously it follows the quarter that was unexpectedly poorer than the guy assistance. google -- >> we talk about that. certainly pull the trigger it's doing great faang and google are accelerating google return on investment is unbelievable the reason i'm interested in meta plt -- platforms. giant cash position and you think that mark zuckerberg is thinking you know what do i do the man is not a defeatist

it's an odd stock to talk about but i'm saying it's not going. >> certainly it's not a surprise that the defense names will help lead us northrup and lock heed. >> i would sell them. >> you don't think a long lasting? >> those are congressional and we're strapped as a country. the most daunting thing i find is this. we have massive amount of debt everywhere i don't think there's going to be a lot of checks written i don't. by the way, if you want to buy there could be where some commercial will hold it, i would buy raetzon technologies i'm not going to sit there and buy -- >> i don't want to buy lockheed martin they've been going up for they realize they're wrong?

>> this stuff collapsed after desert storm i'm not going into that. i compared it to desert storm except for the bad guy will win. it could be -- look, if there is massive fighting, then that does not necessarily mean there won't be capitulation. because ukraine has done the divisions. look, putin is throwing -- he's not throwing what was being thrown -- i mean, got a lot of fire power. >> true. >> and you can't fight them. you can't fight tanks with guns. you can't. and i don't see -- it's not tank protected. >> no. not by any stretch of the imagination. axp, visa, boeing a lot of cross border travel/payment-related names leading. >> warren buffett owns so much of the stock now on axp and,

david -- >> yeah. >> i mean, this is owned by big institutions and it had a great quarter. let it come in i'm interested in american express. by monday, okay, what -- >> you've been talking abouting axp for awhile. >> i've been loving it if you're in the restaurant business, rezzi is dominant but you don't tie it with everything else. >> ajpmorgan, we don't talk abou it enough. what happened there. >> we don't talk about jpmorgan enough. >> why it it collapse? >> well, there's a view that expenses are greater than anticipated. and that maybe they were under spending in certain areas under investing. >> do you think it's a big

story? >> i think that's an interesting story. it colored the entire earnings period for all the banks >> yeah. i've been with a bunch of bankers who say, you know, congratulations for this but who have said we wish jpmorgan hadn't gone first because they made everybody feel like stay away from this. >> yeah. >> you got some analysts, mike mayo at wells, who are concerned there's no end date to this cycle. that's his worry. >> i prefer -- >> guys, i want to are hit on discovery. we're getting closer to the close of the deal for discovery to actually acquire crystal warner assets or merge with them, i should say it's going to be highly levered. stock was up nicely this year.

that's not the case this morning. up 10% for the year. but it is down, atz you see, almost 8%. the numbers were pretty good you know, 10% revenue growth ebitda was up more than the analysts or the company anticipated. it does appear, perhaps, there's a focus on direct to consumer. the lack of subscription additions or at least below what had been anticipated i think, you know, there were 2 million added subs for what is discovery plus at this point this it going to change with the acquisition of hbo max or the addition and what they're going to do and how they do it a lot of focus on cnn, as people know zucker's departure david on the call said there's no organization in the world or news organization that looks like cnn that can do what cnn does on the ground with journalists in bulletproof vests

and helmets. >> they were doing it this morning. i saw interesting reporting from inside a subway station in one of the bigger cities. >> call your attention to the remarkable move of the semiconductors nvidia was trading around 12 now people are buying nvidia they understand it's 9.37. it's early the stand they're taking in the semis, i think is forged -- i think they had the fire power to do it is remarkable. broad com is expensive >> yeah. micron has made comments about getting supply of things like neon, for example, out of russia something that the industry uses a lot of. >> yeah. i checked with boeing. everyone saying boeing is going to be -- if you've been hording since 2014 and you have at lo of planes on the ground, then, you

know, you're okay. stwrm providing they don't watch the netflix documentary. >> right which you've been talking about. maybe the downfall. >> yeah. it's -- i've been hearing about it i haven't seen it. >> i think you should watch it. >> doesn't come off well there. >> yeah. >> i'm not a member of the justice department. >> right i've heard that from others. >> i'm not serving in the justice department. >> there may be indictable offenses there. >> they punished the company she couldn't take it but the fact is the company -- the company had criminal cases now when you have the big fines, david, who pays them >> share hold erls >> thank you. >> yeah. i rest my case. >> i know. >> shareholders are supposed to be the ones that are protecting. >> i think bowing is a great

company. it has a good defense business it has many overruns therefore don't get too excited. i think it does have a dividend. the dividend stocks are holding up that's why you want to watch broad com. it's a good dividend but if they're going to say trying to make a stand, it will be in the semis because the semis have been destroyed. but their businesses are probably not slowing there is a talk that united states might caught off key technology in russia. >> yeah. there's a lot of -- i think what they call the foreign direct product rule actually a hold over of what trump did with with a way, which would deny them all kinds of aircraft parts. >> yeah. with a way they built all the stuff. i would not -- meta platforms don't go up because i said something good that's ridiculous. i think we can we can bee sting

them i own etherium i sold a lot of it it's probably one of the smarter things i did other than marrying lisa. >> what about that the yields you were getting >> going to farm with the bitcoin. >> i know you did. i have to tell you, michael has radical thoughts he did a multi [ speaking in italian ] a -- what dr. pris e tow is saying gold have you seen gold >> i have. >> and what do you think >> i have. yeah a one-year high. >> i look at the gold miners, too. it's doing pretty well. >> yeah. really well.

>> too early? >> i think it is. >> i think it is we're not hording gas here pioneer can turn on the gasoline. >>arding gas here. pioneer can turn on the gasoline. >> >> pioneer has the largest dividend i think it's possible that cheffield, who is a brilliant man, said we have to do more drilling there's a lot of rigs. halburton's stock is anticipating there will be drilling so does slummer jay. i think the drilling stocks are good >> we had wholesale gas get to $3.05. it would imply $4 a gallon.

>> why are you saying sell the oils >> there would be less demand. >> natural gas prices in europe are up 30% >> our natural gas prices between 4 and 5%. >> your point is energy spikes should supply shocks in energy are disinflationary. >> yeah. well, yes. we are an energy -- we're act actually, i mean, our president is not as cool as i am on energy we're an energy-rich country we have a remarkable amount of natural gas. if we had more -- we could export far more. >> we could export more. >> we haven't moved it that much despite the fact that demand is very high. and we're about to go into months where you don't sell it we have a lot of propane. >> yeah. i know.

>> so we're in good shape. >> does it crush are the esg thesis at large? or does it inflate it? because of what europe is looking for alternatives now. >> boy, that's a great question! they were doing a giant wind business called wind catcher kind of not unlike the stephen king movie one of the best. and, by the way, they killed it. the transition is underway and whether it fills the gaps as quickly. that's where you'll find the major energy producers arguing one thing that is different -- >> the germans -- >> yeah. listen, i've been spending time on this issue and, you know, government plays such an important role here.

there may be expectations on the part of government that are a bit further than what can be accomplished we'll have more electric cars in the world. likely more wind and solar power. you have to get transmission lines in for wind. we've seen what is happening in europe they are dependent on natural gas. i keep pointing at the germans they are are -- that have decommissioned aggressively nuclear because the green party has a good amount of party there. they're a big coal producer. they're decommissioning there. they're dealing with their own issues we have frack. we have to get it all over the place. we have the pipelines to do it it's basically two companies. >> yeah. >> lng will move. >> yeah. most of it in asia. >> yeah. next year the contracts are ironclad to go to asia. >> they sell to overall

producers who can decide where to send it >> yeah. i don't want to make fun of the germans but it's not sunny. >> no. and it hasn't been as windy. >> yeah. that's been an issue. >> 27% of the time it's hot and sunny enough. >> winds calmed down in the north sea. it did i think they made a series of tremendous misjudgments but the greens, i think, would say, you know, i think this is -- david, the greens are saying good now people will use them less. now they'll be even more of a rush maybe they release musk. >> you need an electric grid that is reliable for you. >> good point. >> what does that -- >> you know they recognize elon musk in europe even though it's a heavily unionized continent. >> right i'm told, by the way, propane

inventory is the lowest in five years. prices are at seven-year highs. >> sell propane because the fire department came 0to my place an said you can't use propane. >> street side dining. >> you have to switch to electric nobody has 220 con ed get ready. >> they come in. they said, listen, everything you put up has to come down. >> you mentioned, tesla, it hit a six-month low. reports out of reuters they're planning a new shanghai plant taking china capacity. it bounced off 7 u had. >> i'm not worried about that stock one bit. i think that tesla is doing everything right except for picking fights with all sorts of governments you know, all sorts of agencies. you know, speak softly and just sell a lot of cars. >> yeah. but he's a promoter, too

that's part of -- >> operator and promoter very rare. >> yeah. >> most of the skills are instrumental in raising enough money to get him to a point where he can get to free cash flow positive. you can't discount them. you can't just stop it cathie wood is -- >> yeah. half a million strong. half a million strong. >> we're holding 41.36 vix has come down. >> yes people should watch that because that's -- people are fearful. >> yeah. bob may have more. hey, bob. >> i love it when jim speaks loud stocks are not -- they're screaming right now. the problem is we're at the lows because the banks and the industrials are weighing let's take a look. energy is flattish today, as you saw there. but the real problem is what is going on banks with the goldman really down jpmorgan weighing on the dow

semiconductors trying to bounce right at the open. essentially come back downright now. and industrials just not looking well we have a bunch of new names at lows today caterpillar new low. 52-week low today. 3m 52-week low stanley black and decker 52-week low. intel new low. crm in the dow also 52-week low. so this is all embroiled with the debate with the federal reserve. what should the federal reserve be doing in light of this? everyone agrees we've got a problem. the federal reserve has to keep raising rates, even though normally some bulls would argue, agree -- gee, they should pauds they have to raise rates most people feel 50 basis points is unlikely. goldman reflected that he often reflects very are consensus opinions he came out this morning with a note saying we don't expect geopolitical risks to stop the fomc from hiking steadily by 25

basis points we expect some participants will see it a compelling reason not to hike by 50 basis points in march. i think that's the consensus for most the problem is look at what we have for stocks now. this is just not good. three facts that really don't weigh well for stocks. number one, higher stocks. number one, higher inflation stocks can do well, but rapidly higher inflation, no, historically they don't. number two, slower growth. the u.s. is nowhere near a recession, but higher commodity costs slow u.s. growth and the fed tightening here, slow rate hikes in a strong economy, not bad, but rapid rate hikes in a weaker economy, not good these three things are why the market is down the mark is cheaper. 21 times forward earnings in early january. now 19.6 times it's getting cheaper nobody feels god abood about th. is there good news >> no. we are trying to find a bottom

how about a drop in selling fresh? no, haven't seen that. how about multiple 90% downside days followed by 90% upside days that's a sign. no, haven't seen that. divergence in new lows nope, haven't seen that one either so the bottom isn't there. one thing's for sure the sentiment is lousy did you see the retail numbers this week? these are terrible retail traders are in a very good mood. 23% bull iron. normally it's almost 40. bearish 54%. now, jim referenced the backardation in the vix. yep, that's going on we have 37, 36 on the vix right now. there we go. and there is the futures contracts. look at this 31, 29 this is backardation historically, a sign of extreme sentiment hurting in the front part the problem is of course, carl,

we have no confidence in that. we don't have an answer to the question how long does this last and what is the extent of the impact of it and until we get that those things like vix futures, unfortunately, aren't going to be a real good sign of any kind of bottom carl, back to you. >> we will watch it, bob. we'll take a break here. dow's down 700 if you are locking for some good news as we look at bonds, gdp revised up now running at a 7% annual rate. continuing jobless claims new post-covid low and q4 price index down 0.2 it's a little backward looking it's what we've got this morning. we'll be right back. check out this vrbo.

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i'm not focusing on raising prices i'm focusing on doing exactly the opposite, and exploring how much price elasticity there is for the business >> that's peloton's new chief barry mccarthy with jim last night. he is known for when he gets a new gig making big moves. >> i think he will go on a peloton light where he won't be making this stuff, and crowd source music, i think he can run this thing on a subscription basis. he turned around subscription models at netflix and spotify. he also does not suffer fool's gladly frank slootman on instacart, just like shut up. get it together. there is a great moment -- >> he is going to lower prices >> yes tremendous amount of inventory remember, he is actually given a better hand. he has plenty of cash. and he is a genius a frightening genius

>> what's tonight, jim >> i got revolve it's the way that people buy clothes now. they go to the revolve nick aikens is amazing at aep because he continues to generate great returns. he is often chairman of the rock & roll hall of fame. if you have been to one of their galas, may i suggest on an otherwise gloomy day, carl, it's great. i was sitting next to quinn at my table and i didn't even know from - >> really? >> quinn was next to me. i didn't pay any attention was mesmerized >> a lot of people rooting for duran duran. "mad money" 6:00 p.m. eastern time stocks under pressure. dow down 700 "squawk on the street" is back in a moment.

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♪ ♪ good thursday morning. another hour of "squawk on the street." i'm carl quintanilla with morgan brennan and david faber live at post nine of the new york stock exchange severe selling at the open here. dow down about 800 a few moments ago as we watch developments in ukraine, russia launching war with a series of air and ground attacks across multiple fronts

got new home sales out a few moments ago. rick santelli. >> yes, our january read on new homes sales expected to be a whisker over 800,000, that's seasonally adjusted annualized units is 801,000 last month leased at 811,000, upgraded 839,000, the best since march of last year 811,000 isn't bad if you look. the 839,000 upgrade was in december you have to go back to march to reach that eight handle again. so pretty good number, but we see that the obvious story today is geopoliticals and it's putting a huge bid in treasuries and the dollar the curve, which had been flattening, steepening a bit as treasuries, purchases are catching up to those of the short maturities. >> very interesting. rick santelli, thank you

we are 30 minutes into the trading session. here are three big movers we are watching in light of the geopolitical situation that is unfolding. energy prices surging after russia's attack on ukraine with brent popping above that $100 barrel price we saw levels like this in 2014. so 103.09 which is the world benchmark. u.s. crude not far behind. mo gold spot prices jumping to the highest levels in over a year as investors continue to seek out safe havens. 1938 is the level there. and finally don't forget wheat hitting a more than nine-year high, meaning prices could be headed even higher across the food chain from bread to meat, given those higher costs to feed livestock and of course the fact that some much world's wheat comes out of ukraine and ruhr. >> thrussia the market is focused on ukraine as president biden will be meeting with g-7 leaders later

this morning kayla joins us with the latest on the conflict. you know, kayla, we already know about one wave of sanctions that took place a couple of days ago. but what are the likelihood there is going to be more coming >> i think it is, if not likely, then just about inevitable at this point we heard the white house say the sanctions were demonstrative, that they sanctioned smaller banks to show president vladimir putin they would be willing to sanction the largest banks in russia, too. we heard senior administration officials talk about novel export controls that would prohibit moscow from acquiring everything from chips to artificial intelligence capabilities to new defense capabilities as well so we could see those rolled out. we know that there is broad support within the administration for those export controls that would be initiate bid the commerce department. essentially, they have been saying that those types of rules would keep putin from empire

build, from building the 21st century economy and nation that he has aspirations of doing. but there are some questions about two specific buckets of sanctions. first, whether the allies will be moving to curtail exports of russian oil and gas. we have seen some headlines that western banks are beginning to stop credit for purchases for end buyers of russian oil, but i have spoken to a couple of bank executives this morning and hasn't been able to confirm that we know that the white house is worried about inflation. other countries in europe are record about record inflation as well so that has certainly been a consideration. and then cutting russia off from the swift global payment system. that had been something that had been threatened early on the u.s. supported it. nato allies didn't necessarily support it as recently as this week, a senior administration official warned of spillover effects from cutting russia from swift. but certainly it remains on the table. >> we have been hearing some reports about declines in lines

of credit for buyers of russian energy this morning. we are going to hear from the white house around is:30 according to the wires here. eu diplomats talking about a series ofsanctions tomorrow. and then there is congress, which is getting briefed what is the likelihood of any legislative balance assist here? >> any sort of legislative package would be supplemental to what the white house already has the authority to do, and they have been saying that from congress at least it would just send the strongest signal that there is bipartisan unity on hitting back against russia in a very harsh way so far, that unity has been elusive. it was reduced to a simple message in the form of a letter from lawmakers last week condemning russia's actions and military build-up and what they said were the strongest terms. so far any agreement on policy that would further what the white house and the executive branch are doing has been elusive at this point, what is the administration end game

here it seems like there is a strong line in the sand the focus is on sanctions. there is a line in the sand that we are not going get involved militarily other than to send troops to the area to our nato allies and weapons into ukraine into our nato allies so just how much bite could sanctions actually have? and i realize that we have got tranches that are ratcheting up. and just what does the biden administration hope to accomplish longer term with these sanctions? >> i think the sanctions would and will have bite, but it's a question of whether russia feels that it can withstand that it's been amassing a rainy day fund the former deputy foreign minister told nbc's keir simmons so far they haven't been strong enough, that they have not been enough to deter him, that putin feels like he can withstand whatever pressure is coming from the west yesterday i asked the white house press secretary what the end game is, she said

deterrence clearly, we have seen that that is not working that strategy is not working the way that the administration and the west had intended. then there is the question of what president putin's end game is russian experts say there is no good outcome here and the reports overnight about closures in ukrainian airspace said that russia ordered some of the northeastern ukrainian airspace closed until mid-may so there is a question about just how long this conflict is going to proceed as we discussed with the end game could possibly be guys. >> kayla, so many moving pieces. appreciate that. talk to you soon for more on the market reaction to the invasion today joined by rbc capital markets head of derivative strategy amy silverman and urian timmer we have been talking about the vix. we talked about the inversion.

so much for another 15 print what is the future for the vix, do you think >> it's been pretty orderly in terms of what investors are doing and what they are doing this morning is actually unwinding vix positions. so essentially they have made money on this vix move higher, but they are saying we probably think we hit a local peak for now. inve this was also true yesterday we had historically high hedging demand that has been coming off yesterday was a little preemptive given what is happening today. overall, investors have come into the year very well hedged mainly for the fed, but they got in geopolitical risk covered as a result as well. >> it does lead us to some discussion about the fed, some argue it's not a reasonable discussion to have given how much we don't know about what wwe will be facing come march. what do you think the near-term playbook is looking like now

>> if we look at the rates market and what they are pricing in for the fed, at the peak of a few days or a week ago the market was pricing in six and a half rate hikes and eight to nine in the coming two years to end the cycle at 2.25 or so. the market has taken away little bit of that, but not a lot even if we look at the ten-year yield, we were at 205 last week, at 185 earlier this morning, we are in the 190s. so the move in the bond market really has not been as severe as the move as the reaction in the stock market, and i think there is a clue in there it tells us that, obviously, without minimizing the gravity of what's going on around us, it does come back to the fed, right, and i think what the market either is focused on now or will be focused on in the coming months is that if the ten-year curve inverts. >> and that's not a prediction

on my part we are at plus 40 basis points or so. if that were to happen and we see kind of the price of gold hinting at this, what would the fed do the fed, obviously, is very aware of what yield curve inversion means for the economy. would the fed back off from any ongoing hawkish narrative and kind of tolerate higher inflation, or would it sacrifice the economy in favor of maintaining price stability? and i think that situation down the horizon really does not get changed by this. if anything, it might get compounded because if the biden administration throws the book at russia in terms of very significant sanctions, and nobody knows if that's going to happen, but if that ends up curtailing the flow of energy into europe, then that could elongate the energy inflation, it means rationing energy for industry which might extend the

supply chain bottleneck. so all of it still comes back to where we are in the rate cycle, and this doesn't really change anything as far as i can tell right now. >> this is just a perfect storm, amy, for the markets we heard kayla talk about the fact that some of the airspace in ukraine has been ordered closed potentially into may. if this geopolitical situation continues to stretch out over the coming weeks, over the coming months, just how much could that impact or compound, the broader market sentiment right now? >> yeah, look, i joke with my kids that my job is that i'm a professional worrier i worry not only about the fact that right now the market is simply pricing kind of extended sanctions from the u.s. but not necessarily military involvement. i also worry about the volatility of asia, what if china kind of looks this

situation and thinks about what they could or could in the do with taiwan. i don't think any of these tales are still priced into the market even at a vix with this handle remember in the peak of the pandemic we hit over 80 on the vix. there is more room and volatility even though it looks quite rich i am not in the business of saying let's catch a falling knife here i think you continue to find pockets to own tails and volatility if it starts to come off and people are monetizing any hedges they have on. >> how should investors be putting their money to work more broadly right now if they should or should they be sitting on cash you mentioned gold as well just there is so many uncertainties here how are you advising clients >> well, i always say the same thing and i sound like a broken record, but the game plan is to, a, have a plan, have a broadly diversified portfolio.

it sounds boring, but stocks, bonds, inflation henls, geopolitical hedges, you know, gold comes to mind, obviously, because gold has been zigging while it should have been zagging. it should have been coming down on narrowing real rates and instead it has been gaining ground so having that solid plan i think is job number one. executing on that plan is probably even more important because our fight or flight impulses on days like this is to get out and ask questions later. and the same thing happened two years ago during the lockdowns a lot of people sold and then they have to buy back. oftentimes the best days come right after the worst days it's so it's difficult to time these. the third kind of propping on t prong is to rebalance. so oftentimes we will rebalance on certain times of the year,en anniversary, christmas, whatever, but it's wise to rebalance after a lot of volatility when the market suddenly drops

10, 15%, that's a good time to rebalance. then you're essentially buying low, hopefully, and so that's always my advice and it's particularly relevant right now, i think. >> we have been talking a lot about rebalancing as we have gotten moves both to the down and upside thank you, guys. talk to you soon i hope. >> thank you >> thank you. >> we have a lot more to go in the show take a look at the markets with the dow down 2%. s&p hanging right around this level for a bit now at down, let's call it, 1.4%. we will continue to focus on this conflict and all the implications don't go anywhere. ♪ ♪ this idea of making a movie about caring,

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with the network from the most innovative company. comcast business. powering possibilities™. welcome back russia launching not just military, but cyberattacks on ukraine and its allies one question of course could multinationals and u.s. businesses be impacted eamon javers with that story >> david, the nation's cyber defense agency issuing a warning calling on american companies to be if in a shields up posture today in terms of cybersecurity. here is the guidance they say companies need to empower chief information security officers and make sure everyone in the company understands that security investments are a top priority right now. lower the reporting threshold. they would like companies to report cyber incidents today, even those stopped by company

defense. test response plans. they want you to conduct tabletop exercises to plan a response on a plan to a company or the supply chain. and then focus on continuity ensure that tests are conducted to ensure that critical business functions can continue no matter what happens finally, plan for the worst. the u.s. government says it does not have credible information now regarding specific threats to the u.s. homeland, but managers should ensure that they can disconnect parts of their network if they are hit by a cyberattack. we are not seeing any reports of companies hit by russian cyber activity an expert says the russians could react to u.s. sanctions with a wave of cyberattacks on american infrastructure which he describes as colonial pipeline times 100. he warns that the russians could respond to sanctions with sanctions of their own on the u.s. those could disrupt the flow of critical materials and further

worsen supply chains and boost inflation. back to you. >> scary comments right there. thank you. joining us now, retired four-star general and former nsa director, keith alexander. he serves as the first commander. u.s. cyber command and is the founder and co-ceo of ironnet. we heard the reporting from eamon. as the leader who stood up u.s. cyber command, i wonder if you could walk us through how vast and how grave the role cyber is in modern war fighting. >> that's a great point, morgan. as you look at cyber, it is an element of national power. it will be usedin this conflic against countries. it's already being use against ukraine. and i agree with dimitri i think it will be used against our country and be used in europe against the finance, the energy, the government to break the will of the people to stay in this contest of sanctions

versus the physical assault that russia has going on with ukraine. this is a new form of warfare where the public and private sector have to work together i think chris english pointed that out you can see the importance, tell us what is hitting you so we can help defend this country we have to work together we have to work with our allies. what i learned is that being responsible for defending the nation when you can't see it, you can't achieve that objective. so we have to help work this together as a nation >> so in terms of russia specifically, you personally have experience dealing with them when it comes to cybersecurity on the government and military side and on the commercial side. what are the capabilities there and how is it affecting the way you are advising clients now >> so russia has three agencies, the gru, their military intelligence, the svr, their

foreign intelligence service, and the fsb, their internal service. three ways of attacking, but really it will be the gru and the svr that does the offense. they have done a lot you have seen that with things like fancy bear on the gru side and you have seen it with the solarwindsen the svr side. i believe those were practices when you think about the impact just from solarwinds of what they could have done with a destructive virus in that case, the impact it would have on our country and others, it's significant. so those are things that are within his reach i don't think he will use them yet. i don't think he is prepared to do that given they have to conquer ukraine and they are going to focus their cyber on ukraine right now. i think we will see attacks in the next few days reaching out to many countries to help from their perspective break sanctions. so this is going to grow and i think we are in a new place. you hit it on the head

this is a new change for the way we think about warfare >> that's what senator warner talked about last 24 hours he goes, this has been an area that has been viewed as nerdy and hypothetical i hope we have a conversation a week from now where we say, hey, senator, urm totally wrong he raises the scenario, what if poland were to suffer denial of service and how forcefully nato were to respond to that. >> this is a question on article 5, does that constitute an act of war i think it depends on the impact of that. and i think that's something nato will have to wrestle with, whether an attack on a country in nato with cyber that has destructive and causes loss of life is in fact an act of war. i think that's a new realm i think eventually it will be included perhaps more importantly, what you bring up there is nato is built to bring folks together. if you look at the european

countries, they all defend themselves in cyber and all of the commercial companies defend themselves had cyber that's not a defensible way. an interesting point u.s. cyber command was created when the russians got into the defense department network it's ironic. >> general alexander, it's david. i heard you say similar things in the past about the need for more coordination and deeper coordination but has it started to happen are we going to actually see evidence of it >> yes, i think you're seeing increased coordination i think with what they are doing. what chris english is talking about in terms of getting the public and private sector working together >> the outreaches from nsa cyber command, that's all in the right way. and in the right -- but what we need to do though, and what companies actually need, is when

they are being attacked is to have the defense department and dhs stop that attack, help them defend their network and take down the folks that are shooting at them. that's where cyber war is going to go towards and that gets us into that collective defense posture that chris talked about. >> general alexander, we appreciate your insights, especially on a day like today thank you for being with us >> thank you, morgan thanks, david. as we continue to track russia's invasion of ukraine, so, too, is the commercial space sector capturing the action on the ground are earth's orbit satellites smaller and faster to make and data easier to analyze with artificial intelligence and new set of satellite operators is bringing intel from this conflict to the masses case in point, planet labs, which operates the largest constellation of image satellites in the world. russia amassed its forces and prepared for the scenario we see

playing out now even as putin denied it. i discussed this new era of so-called open source intelligence with planet's co-founder and ceo will marshall just last night. >> we don't have to rely just on what the u.s. government or the russian government or anyone else, the ukrainian government have been saying, but we can look at the satellite imagery, see who is doing what. is it true that troops are moving back when putin says they are withdrawing or not and they can verify these things themselves open source intelligence bringing a new era of transparency and accountability to these world events, and that's not lost on the global leaders. >> this commercial earth imagery, which doesn't require security dechassfication can be released rapidly it's integral to the biden administration's effort to prepare next steps they collect images daily, selling that data to a variety of customers across industries

and sectors, including to government agencies. you can hear more of my consideration with will marshall on "manifest space," the latest episode of my podcast, which is going to be out later today. carl meantime, morgan, eft spotlight. meg tirrell has a look at biotech on a day moderna is helping to lead the s&p. >> yeah, carl, it is, although the last six months or so it's been an opposite story the biotech etf, the xbi, that is down about 10% over the last week more than 170 of the 189 companies in the index all down for the week so it's been a tough time. you can see down there 11% the last week. but it's been longer than the last week that biotech has been having a tough go. if you look at the xbi and ibb the last six months and compare that with the broader market, you can see both of those indexes or efts down 30%

34% for the xbi, which is smaller and mid cap companies. the ibb more like companies like moderna. if you look at that performance down about 60% however are today up almost 9% on an earnings beat for the fourth quarter and raising its covid vaccine forecast for the full year. we talked about moderna's ceo this morning about what the rest of the year potentially looks like for the pandemic and the outlook for boosters in the fall here's what he said. >> so wie think most probably we need to -- where i think people are going to need boosting in the fall especially, you know, people -- people above 50, comorbidity. also people who don't want to be sick >> so it may not be everybody who has to get boosters in the falls, just folks at higher risk we will have to see. he said the u.s. has not placed an order or have an option for ordering more for the fall yet

guys, back to you. >> thank you. more on the market action. we continue to monitor the situation in ukraine right after this break don't go anywhere. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq hey businesses! yeah... oh. donyou all deserveit! something epic! so we're giving every business, our best deals on every iphone - including the iphone 13 pro with 5g. that's the one with the amazing camera? yep! every business deserves it... like one's that re-opened! hi, we have an appointment.

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on the largest, fastest, reliable network with speeds up to 10 gigs to the most small businesses. so you can be ready for what's next. get started with internet and voice for just $64.99 a month. and ask how to add securityedge™. or, ask how to get up to a $650 prepaid card. leaders across the u.s. and abroad condemning russia's attack of ukraine. biden meeting with the g 7 this morning. shepard smith with the latest. >> the ukrainian government reports anvation from the north, east and south with strikes on t air fields, including kyiv military bases and command and controls targets therein russian tanks and troops rolling over the border from russia, belarus, and the crimean area. jets seen in video in multiple ukrainian cities now the subway systems are bomb

shelters in kyiv for the cities close to 3 million people. it's moscow's most aggressive action since the soviet invasion of afghanistan in 1979 clearly, has the potential to rewrite tgeopolitical order president biden vowing extreme consequences he meeting with his counterparts from the world's largest economy, g-7 nations, expected to address the american people around 12:30 washington time this afternoon and unveil a whole new round of severe economic sanctions on russia the last few minutes we have gotten a tweet from the ukrainian president volodymr zelenskyy saying his troops and russian troops are now fighting for control over the chernobyl containment area where the nuclear disaster happened in the is the 08s the ukraine president said they will fight for their lives to keep a repeat from happening of that nuclear disaster. difficult and intense times. a lot of information we are

getting from sources we don't know if we can trust. >> reuters talking to a senior defense official, saying the russians trying to decapitate the ukrainian government. >> we widely have been told it's about legacy and getting back what president putin said a couple days ago was his own territory, it had been given away for reasons that he didn't prefer, and he wanted to really rewrite the european order the question is will he be able to put in a puppet government without a lot of resistance from the people ukrainian has centuries of history of pro tktect itting it own wfair the speed at which they are able to do such a thing remains to be seen the kyiv airport is out and they are beginning to establish martial law. >> we'll touch base throughout the day. see you soon. meantime, markets plunging this morning we are off the lows, dow down

690. high-profile names trading in the green, adobe and under armour are a couple of examples. arthur cashin joining us great to have you back i guess big discussion this morning is to what degree traders hedged enough in front of this, and how much did they not helpdge enough >> well, let me start out by quoting somebody, something that an old trader said to me 60 years ago when i was first breaking into the business he said, kid, never bet on the end of the world it only happens once as those are pretty long odds so are they hedged no, not by any means i think they came to believe yesterday after the cyberattacks that the military moves would come today i think this will probably last

for several days at least. we'll wait and see what the russians plan to do. i think the viewers want to watch this market take its own pulse and its own temperature. so the first thing to watch, the opening lows for example, the s&p at 4114 or so if we thought the sell-off in the afternoon when the new sanctions come out, we'll watch to see if they break that level. if they to break that level, does it, in turn, bring in new selling? this is going to be a step-by-step thing here, carl. and i think the markets will be cautious for several days until we see when the military operations wind down >> yesterday's open we were tossing around the phrase a soft sanctions rally, meaning the market was encouraged by sanctions not as biting as maybe the market expected.

at in point do the bulls want fiercer sanctions, or not? >> yeah, i think they do the tdanger here is what, while it's sanctions bite russia, do they, in fact, bite back at the west we are going to have the global economies, are they going to be hurt you are seeing all this tom brady all this debate about how much this geopolitical risk and the pullback on the global economy, will it effect the fed? i think the fed is trapped they can't skip doing things they are viewed heavily to be behind the curve on inflation. so pretty much they have to move in march barring major, major calamity i think that probably have to d that quarter a point or risk losing credibility so, yes, we're going to look for further sanctions. we want to make sure they don't

hurt the global economy as a whole and call the most dangerous part of this is if those sanctions either, strangely, don't look like work, or do appear to be so onerous that it upsets the russians, will we go to cyber war? that is the most dangerous risk in this whole thing. there has never been a cyber war, and nobody knows how that works. you know, denial of services could run everything from the electric grid to the water supply, and no one knows what the economic swing of that would be so that's the great danger here. >> yeah, cyber and space just given how much of our infrastructure on a daily basis is powered by both of those things and how intertwined they are, art i mean, you are deepliage knowledgeable about history. of course, i will ask you a

historical question here we heard the compare response to 1979 when russia invaded afghanistan. is there a playbook in that timeframe that we could look to or investors could look to it in terms of market response or is there another time period that this reminds of you? >> well, i'm not sure so much the invasion of afghanistan. they were surprised, as you recall they got in there and restarted supplying the rebels and it became what was known as charlie wilson's war and it cost russia a great deal of manpower and credibility. it was in many ways their version of vietnam, and it was a problem. i think, morgan, that it is hard to find exact comparisons here only because of that risk of cyber war. i would think that by former standards, you would think -- and military operation like this

will take a couple of days, it looks like the primary russian goals are to constrict and disrupt the ukrainian military to overthrow the government and put a puppet in who is very favorable to russia on the face of it then, this thing could be resolved within a matter of two weeks, and on the basis of that probably not a great deal of global economic problem. but as you and i just were discussing, that risk of a cyber war is somethingyou can't thro away that's got to work in the back of traders' minds for that multiweek period. >> of course, there is inflation, which was so prevalent in that time period. obviously, such a big dictating force for the market and economy now. is that the key risk here from an investors' standpoint, what this does to inflation when

we're already running at four decade highs >> well, you know, it certainly will be disruptive of inflation because now we are twoing to have commodity risk added into the risk that we already had remember, this was supposed to be simply a transitory problem that was pipeline disaster now we' hav that was pipeline disaster now we' compounded that with shortages and things of the like so it's going to be a very difficult time the inflation is what's going to put the fed in a hard place. you look a and you say if these sanctions are onerous, can it change the world economy what will happen in europe what is the spillover here and yet, what you can't know is the fed -- the fed can't just walk away from it. in other times, in other ways,

you always say there was maybe not the fed put, but the fthere to protect us. their hands are tied, too. >> definitely a rock and a hard place, art that's for sure. we watch some of these levels having gotten below 1442, a point you pointed out earlier is lows from january. keeping with russia/ukraine, defense stocks on the move this morning. more of a mixed picture right now. lockheed and north europe are higher general dynamics and boeing are all under pressure really a push/pull happening an aerospace and defense as investors weigh potentially more defense spending, more demand for certain types of weapons systems against what the potential negative impact could be on something like commercial aviation, as you are seeing some of that airspace in the region close. we are joined by roman schweitzer

points out this morning, to, quote, expect congress to promote emergency spending quickly. we have had a number of conversations where -- and you are not the only person. everybody i have spoken to within the defense and national security industry is saying this, that defense spending is going up both domestically and internationally among our allies just given everything we are seeing playing out with russia and ukraine, what could that trajectory look like >> good morning, morgan. it's great to join you and, look, i really think we are in unchartered territory i know there is a lot of metaphors and historical examples to use. but i will use the most recent one. if you look at the fed spending after 9/11 it went straight up for about 14 years now, i am not suggesting something like that and i am not suggesting this is a complete analogue, but we really do have a shift in the geopolitical

environment that is still unsettled, that i think even some of the best cases that art just even contemplated leave open the door for a follow on negative effect. and i think the west, to coin an old phrase, does need to show unity and resolve, and that's going to include more spending, both by the united states. also in nato and other not aligned eu countries and perhaps even in asia to prevent further spillover there. >> how quickly could we see an increase in those defense dollars manifest i ask that because as of earlier this morning based on my own reporting, the dod had not reached out to congress looking for supplemental for funding there seems to be this growing sense that congress may provide it anyway. is that your sense as well if so, how quickly would that happen >> well, i do think it's going to depend on the u.s. response

in terms of transferring manpower and perhaps equipment to europe. so certainly the meter is going to be running on those bills just keep in mind, the fiscal '22 defense appropriations hasn't been settled yet. that's something that would, hopefully, be done by march 11 so i think gosh knows what the world is going to look like by march 11 so it's easy to imagine something being tacked on to whatever omnibus spending bill congress decides to pass also, you might even have the possibility of something like direct transfers or a lend lease to front line countries along that nato eastern flank, the baltics, poland, romania certainly there was a lot made and still a lot of, you know, sort of armchair quarterbacking about whether or not ukrainian military forces received the right equipment. it's difficult to train them on

short notice, to hand over advance u.s. systems you might expect to see an up on arming of those nato countries the quickest way is with direct transfers and backfill that with u.s. contracts. >> what are the types of equipment that we could see more demand for >> look, i mean, honestly, this is across the board. i think one of the things the biden administration and it's no surprise, most experts and analysts in this town have been talking about the looming china challenge and preparing for -- to deter china in asia that's a much different category of -- or style of warfare. and this is, you know, really good old-fashioned cold war, you know, tank warfare on the plains of europe. and so to a great degree, ground combat forces, shorter range

systems, those kinds of things have been downplayed and largely expected to be cut in the u.s. budget those would probably be the ones not on increased but required by front line countries as well as european countries that have been spending, you know, sort of wellbelow 2%, along the lines of 4% of their gdp during the cold war, and you have countries like germany that have to weigh the economic, you know, piece of sanctions as well as where they stand militarily as a role in the bloc. >> fast-moving situation, and one for which the money flows potentially changing evolving quickly as well. roman, thank you for joining us and breaking it down. >> thank you. markets are off the lows in fact, the nasdaq down a little over 1% microsoft in the green, but there are the laggards on the statistically insignificant index. we also call the dow, jpmorgan

not having a good morning. we will be back right after this

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the broader equity markets are down one asset gaining amidst in volatility is metals pippa stevens has a look at that sector >> across the board, including metals, russia is a major player in the global metals industry and any disruption in supply could strain an already tight market aluminum jumping 3% to a record high nickel at the highest in more than a decade. palladium up and platinum the highest since july russia is a key supplier of them all. let's run through the numbers. it controls 35% of global palladium, 10% of platinum, 6% of aluminium, 5% of nickel and four 4 of crude steel. this is exported

more than 90%. these metals of instrumental for auto companies, catalytic converters and lithium-ion batteries. lithium, packaging to soda cans. jump in prices comes down to fears over what potential sanctions could mean as jpmorgan put it, there is very little additional cushion for further supply disruptions higher energy prices also having an impact. some european production had already slowed due to high power prices in the energy intensive metals industry. all of which is contributing to the inflation we're seeing across the economy carl, back to you. >> pippa, appreciate that. it is a lot of cyclicals, energy that is dragging the dow down. still 640. nasdaq down 5% for the week. has trimmed its losses to less than two-thirds of a percent a lot more mart vege ikecoras coming up in tech in the next hour don't go away. ound engineer.

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crude oil surging above $105 a barrel for the first time since 2014 you can see right now a bit below 104 for brent crude. joining us now is energy

analyst steve richardson steve, good to have you this morning. how has the current events changed your view of the oil market and/or your predictions of where prices will sort of stay for some period of time from here? >> well, thanks, david i mean, i think that if anything these, you know, with a bit of historical context, the volatility events, super volatility events and geopolitical events, you have to keep your head about you it's about duration, as an equity analyst, it's about duration of the equity we're bumping up against levels to be concerned about some of the broader, you know, macroeconomic impacts which is beyond just that of oil price. it's were the global economy, right. >> yeah, right, which actually dampens demand then potentially? >> if you look back historically, whenever we get global oil expenditures, kind of

at 7, 8% of global gdp, and we are kind of at those levels certainly at $100 brent, jgenera t generally the wheels start to fall off ultimately you get that if you stay triple digits for a longer period obviously we usually have, you know, like in 2008 we had an economic accident that wasn't anything to do with oil and it certainly took down oil prices you keep looking over your shoulder as an oil analyst >> one thing that characterized the current period is return of capital shareholders as opposed to putting it in the ground and finding new oil. is that going to change among companies you cover? >> the simple answer is no, david. i mean, i think that it's important context, right, we were just on a call with a large number of our clients. one of the things to just impart is the fact that the u.s. is

growing despite this narrative of the fact nobody is re-investing 50% of the recount in the west taxes is private operators private operators reinvest the cash flows they have cash flows are up. you have some companies including super majors who are intent on reinvesting the grow what's different this time is we have this 30, 40% of the market, this cohort intent on not. you heard that from the c.e.o.s the last two weeks they are. it's not a question of price it's a question of value and they're pretty intent on continuing to buy back their stock which is hugely bullish for these stocks which means you don't have a quick fix for the global oil market in terms of seeing u.s. oil supply going up 100, over a million barrels a day. it will take awhile to get there. >> in light of that, steve, i mean, the supply piece of the equation does seem to be very much in focus right now. could we really actually see some of the supply coming out of

russia go off line i ask that because if the west were to fan russian oil to europe, seems unlikely, china is going to step in to buy it how much is this going to affect oil flows despite we're seeing an invasion? >> you really have to watch the flows to eastern europe, right what's taking up prices right now is some of the alternative buying in the market and some of the scrambling for volumes it's just not a base case scenario you're going to hear from the administration that that's not slowing down russian exports is not the priority here. if anything, you know, strategic petroleum reserve release, working with opec to get production up, working with the u.s. to get production up is the more likely outcome for supply >> steve, thank you. >> thanks very much. >> in the meantime, china refusing to call russia's attack on ukraine an invasion

eunice yoon joins us hi, eunice >> hi, morgan. as you said refuse to use the term invasion, instead the ministry said that the ukraine situation is a result of complex factors and is blaming the u.s. for increasing tensions. the chinese appear to be tap dancing around the ukraine issue. on the one hand they want to be seen by russia as supportive since the two share several different interests aligned against the united states as well as other western powers however, the russian move also violates what china has long said is a core tenet of their international relations, and that is that one country should not interfere in another country's sovereignty. so, china wants to appear to be abiding by this principle. state media having described russia's action not as an

invasion, but a special military operation. by holding back, though, beijing does side with moscow, and we're seeing that also on the economic front. today the customs authority announced that they were going to expand their import of russian wheat. and this is really just the latest sign after president putin and xi had signed several energy deals during president putin's visit here at the start of the winter olympics this is just the latest sign that beijing is really trying to help russia manage through some of these sanctions imposed by the west guys >> eunice, thank you eunice yoon of course reporting live for us from beijing before we let you go, the tech check, quick look at the markets. particularly the nasdaq, of course, which is down 17% for the year it has been painful, almost two months so far, but well off its lows for this session. i'm looking at names, there it is let me look at faang add in not just alphabet, but

microsoft as well is up. you've got amazon up alphabet as well and netflix. so a bit of a bid there for some of the names, morgan >> we're coming off the lows of the session already with the major averages still in the red, but not at the worst levels we've seen gold is higher crude is higher, though. and bond yields continue to be lower. that's going to do it for "squawk on the street. tech check starts now. ♪ ♪ welcome to "tech check." i'm carl quintanilla f-16s have been deployed stocks sharply lower, although

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