good thursday morning. welcome to "squawk on the street." i'm david faber with jim cramer. carl quintanilla has the day off. we've had a couple strong days, at least if you're long. if you owned chinese stocks yesterday, you had quite a day, but we'll see what we get today. a lower -- our road map does start with that potential paw in the rally.

this after the fed raised rates for the first time in more than three years. oil prices jumpings. ed iea warning of a shortage in the supply and buffett boosting its stake in occidental. maybe he's using the $800 million a year he's making from that dividend. remember that? >> that was a sweetheart deal, but for him it was a shrewd investment >> let's start with the markets one day after the fed decision here wall street the fed chair's response. >> in my view, the probability of a recession within the next year is not particularly

elevated. >> why do i say that demand is currently strong, most forecasters expect it to remain so the labor market is strong, conditions are tight, payroll growth is continues. household and business balance sheets are strong. so all signs are this is a strong economy indeed. >> do you agree with him >> yes i think the problem with jour journalists, they want a bear sign, it's too hot, too cold if he had said i think it's important to give the economy some room, because i'm -- and then they criticize him for being a softy. if he comes in too hard, he'll say, look, i'm going to lay it out for you. we're going to raise rates until

this economy slows down. what really bothers me is they can do no right in the eyes of journalists. we have an incredible box of people that i think is unbecoming of a fed chief. i don't think that's what he should have to be. he's a heavyweight guy who is reduced to pandering to reporters. >> you don't think he should be doing the press conference >> it's stupid it's beneath him. >> he doesn't have an obligation to communicate >> no. unfortunately, it just creates confusion. he has to do rope-a-dope every time i don't like that. i want to go forward and i want

like reed hastings used to do, and just say, look, let's pick the best ten questions and have a fact tote many that looks at the questions and reads it to them i think that's a good conference call i call this as an unruly conference call where anybody can ask a question kind of like the elon musk calls, so let's ask that car guy, what do you have for me how fast can the car go? we have to get away with that. you need four times, you need your best ten, and then we have a semblance of -- >> clarity >> as oppose to do chaos it was chaotic these people are home? no, no, i'm at home, looking at the den, the plants. i mean, it's like -- some of them are like, tell me -- >> i know, you're right.

>> it's beneath jay. >> we're all title of looking at plants and fireplaces. >> get a fed governor in there. >> back to the economy, mr. giving advice on all things. >> there was an interesting story on the journal about walmart's plan to hire 50,000 by the end of april, not to mention, of course, from amazon's last quarter they were looking to hire 150,000. the hiring that amazon has done is totally nothing like it average wage at walmart is $16.40. >> wait. you're going to tell me that's low? >> no, it's up dramatically from what it used to be. >> what do ceos make in this country? >> look at you now you're elizabeth warner? you're now bernie sanders?

>> when i was in college i had a little inso i got that workers don't make enough. finally they're getting their due. amazon is 18 average my point is they have moved up a lot. >> good. >> i'm not saying it's bad. >> now, if we can keep prices steady and wages go up, purchasing power -- can i just say -- >> how long did many politicians on the left say this is egregious. bernie sanders still perhaps says the same. i remember when walmart was $10 an hour on average 15, 20-year base, what is number one? >> amazon? >> costco. what is the numb er one -- >> costco. >> who gives full dental who gives eye and ear? >> costco. >> who's the most profitable >> costco?

>> let me just tell you, maybe you need to manage better. jim senegal told me the secret is because they pay their people, they have no turnover -- remember what deadweight is. you train a person look i totally agree with you. >> the fact is inflation is having an impact. >> i've known you long enough we can joust. remember they're trying to do all this stuff on fintech. >> some of these are higher-end jobs as well >> the man or woman will place it into a refrigerator versus having it spoiled -- bob kraft, tell me again the amount -- not

kraft paper. my father used to sell kraft paper, but it was not -- amazon and walmart, walmart is making the movement -- they had need more people. >> there's a lot of boxes. they're everywhere >> what's your favorite aisle? >> i like the tvs, i guess >> you know, target is vizio look at the -- one pays people the most. >> we've been talking about that for ten year >> that's not that the guy got religion overnight. >> my wife is on the board at co

costco. >> the potato famine when the british starved ire listen, but convene victoria cut a chuck, there, there's my -- >> i'm glad we covered all of t that. >> can we talk about the stock market for a moment? >> i noticed that as well china stocks have been all over the place. >> alibaba gone down to something lure four times e

ebitda. >> where the values are i 3/4 you in -- ebitda incredibly low. you didn't mention this, but they are the first ones -- they'll put their stores in the mark zuckerberg metaverse. we don't talk enough about the metaverse. >> we don't? i thought we did >> they're going to put their stores in the metaverse. >> there we go pointing to the moon. >> there we go that's najarian on the show. >> then i wear my ralph lauren outfits -- >> i wish we had -- he's talking about raising -- i love it

we used to call it the number. it's now raising the algorithm people love to say consc"algori because it makes them feel smart. >> current quarter is not great. >> cigna joins us on "mad money" tonight, and will no longer use russian diamonds williams sonoma, you numbers were spectacular and then i thought the call of the day, hopkins conference call today at 12:00 will indicate this is the first drug for weight loss, but there is no drug for weight loss right now this could be the biggest of all

time lennar, numbers were great we have teem k time -- now i have to take a break. we have to get to industrial production you know it was down 27% in the first quarter of the great depression, and then it went to 27%. >> sounds like chinese stocks. coming up, cramer's mad dash as well we'll count you down to the opening bell let's get a look at futures as well and where is k.j.? more "squawk on the street" straight ahead friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors the garcia's, love working with you. because the advice we give is personalized. hey john reese, jr. how's your father doing? to help reach your goals with confidence.

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welcome back rick santelli here, awaiting the final breaking news of this session, industrial read on capacity, and 0.5% for industrial production, exactly as expected. sequentially following up 1.4, which may get revised, but at least up to this point that was still the best numbers since march of last year the really important number wassite lies-- it could have tan us to the best levels since

2018 these continue to reverse a bit from the best level of about 2 1/2 years, but still a very solid number it still reflects invite issues weft with supply chains and manufacturing holding back, but also look for things like mining and er pengyush the rate higher. "squawk on the street" will return in two minutes. ♪ ♪ wow, we're crunching tons of polygons here!

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>> the company has the groan that are the most official for the army the united states is apparently going to provide 100 tactical unmanned aerial systems. let me say, i had the privilege when i saw the ceo, they have the switchblade, and i don't see these weapons being sent these are the really effective ones i think we have some video but you have to understand, david, we're sending them the wrong missiles we're not even arming them as well as yemen. >> is that really true, jim? >> they're using backpack -- these are effective against artillery. the backpacks are effective against people now, this is an -- the faster --

the switchblade 600s are what we should be supplying. the russians are amassing a fleet, a fleet of warships off of odesa we have nothing we're sending to defend against that new threat to ukraine it's almost as if the government doesn't even know it's happening. amassing a navy near odesa i'm going back to this concept there should be hundreds of these drones supplied. these are ones that are unmanned, and you are not -- the backpack ones do not have the power. you're not close enough to the arti artillery. why does yemen -- i have no answers for these, but needs does our government. why is our government worried about the naval force, perhaps

back they're unaware i don't know. >> i don't believe that would be the case that we're unaware. >> then why are we not telling aerovironment we need thousands of these javelins are effective against tanks, but it's artillery that is historically used it was all artillery. when he destroyed syria, aleppo, eastern, it was almost all artillery. >> okay. >> i just think that the president should sit down with them and say how many can you make, sir? how many there. do they watch the show no >> they're busy. but we're glad you're

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i think that the nasdaq is not the place to be. for the short term, yes, because it's oversold. if you're truly an investor, i'm talking about looking forward to 2023 and beyond, i think you want to avoid these greatly overvalued momentum stocks i also think that investors should potentially think about invests in emerging market equity gradualisticly. it's volatile as all getout, but i think it's going to be a strong performer for a multiyear horizon, and it's cheap. >> greatisticly, i don't think

that's a word. >> i don't want those quotes to give the impress he felt as hoe did a few years ago about stocks by the way, he agrees with us, david. companies that don't make anything, that don't have operating cash flow have to be avoided. or companies like wash by parker, he would not be a buyer of that. but he would say, i look at -- that's not what i'm talking about. i think it's important to distinguishes, that i think he would avoid that, i would avoid that. >> i'm going to talk a bit about spacs as well, because it's under that banner. to his point about emerging market equities? by the way, gundlach is the bond king. >> i think the problem is emerging markets is no longer -- i know the msci is a great

index, okay? the problem is there are countries in there that are dictatorships that can't really be bought. but henry, hernandez, provides the msci, he is reluctantly to some degree putting in companies that are not capitalist countries. your why, and the bank is being treated as if it's glen fed as if it's goldman west, i'm not kidding. i would rather invest in.

we saw this incredible volatility, do you just stay away from this stuff or do you see opportunity? if you realize the stock is down and realize the levels are at a death cross or way below -- >> the moving in one week -- >> i'm not kidding that the chinese are very schooled in technical analysis i wish i could joke about that, but they have often come in when the charts are broken -- i'm not kidding. [ laughter ] >> it's now, it's now! head and shoulders, and -- >> listen to me! they're looking for dummy patterns, for cup and handle

[ laughter ] >> i met with chinese bank officials. >> all i want to do is talk about the charts >> how weak were the charts? i want, look, you have the stock down here i almost gave them fibonacci numbers. >> wti, let's look at it right now, and brent crude as well wti was above -- there it is, above 101. >> if it goes any higher, congress -- all of these -- >> short-term note supplies, but longer term, there are concerns. i've had a couple conversations, i'm sure you have as well. soto voce, where's there some concern. there's too many companies that have decided to return capital 9% yield aren't how do you get

9% yield by not doing more drilling they're so desperate to go public. >> already here we go we give you a look back at our headquarters as well let's see how we end up today, a strong couple days the lingo, that's ev charges network in europe, celebrating its listing via spac it is nasdaq amryt, a good day to celebrate that company. >> a lot of people lost a lot of money in ireland years ago it was a tough place, an emerging market. when i was an intel-aholic, i

went to see the opening, and they took us to the tavern before we say river dancing. my wife is a great river dancer. it's incredible -- >> she's got -- the baconator -- >> it would blow you away. she learned tap and river dance, and now -- i she's never watched the show, so i can say what i want. >> you can, and you do all the time >> you call that tie green >> it's not. i had a green tie picked out, and i forgot >> we have too talk about this two-day rally in the semis, and then they give up what they have made this has been a pattern. what we need to see is that

pattern broken, but look at those. those stocks -- look, intel appear 45, pat hasn't been speaking we need plants here and need them now >> also building plants in europe, too, right >> yeah, everywhere. >> where are they getting this money? >> it's a cash machine they just make a lot of money. they make a lot of money it's been poorly allocated until pat got in he's trying to allocate money correctly. the previous gentleman was a really nice guy. >> he got that moniker, really nice guy >> apparently. is kevin johnson going to be incredibly nice? >> you want to follow through on that story from yesterday? here's the word i heard over and

over again -- baffled. >> we made the point yesterday there was something we don't know there it just doesn't make sense >> let's focus on lennar for a second the chart is horrible there. president xi, don't go -- the gross margins are up 190 basis points average price for homes, went to 457,000. you think that jay polydoesn't have to do something that's right in powell's wheelhouse that has to stop we're pricing out americans. this is what worries me about the u.s. economy the ability to price increase have just virtual price increases every single month that cycle of pain has to be broken >> how will it be broken >> higher rates. higher rates. >> people will get six more, the

way we were told yet. >> if jay things we have to. that's what i hate about the hollywood square game he plays with the ten boxes how many times did he have to say if things are too high -- doesn't he have a better use of his time honestly even filling out the bracket is better than answering the questions. go gonzaga >> gonzaga really >> yeah. what about the impact of commodity prices worldwide as a result of the hostilities in ukraine? and what that means as the year goes along people are still talking about recession, certainly in europe in 2023. >> the economy is incredibly strong they have $1.84 increase in the stock because of the ufc, the

talent, the money. people are being paid a lot of money in this country. i think jay is uniquely saying, okay, i want it to be distributed correctly, but i also don't want a spiral of salaries, where everyone spends more, or if you're in a company, that you've got your raw costs up 30%,you have to call your customer, and say, listen, >> why does it have pricing power? >> unique product, addictive i wish mars would become public. hole cow, the number of different kinds of m & ms? shocking. >> i didn't realize it >> why -- i like conagra, do we

have cag i like conagra >> and others don't have pricing power. >> others don't. when you look at management, this michelle buff, who has lived any hershey area for, like, 17 years, a quiet, palace i area, has done a remarkable job. people never talk about her. >> no, they don't, but you are now. >> late president nixon said my mother was a saint, but we'll never write a book about her nix is non is rarely quoted. >> but he is by you. we should look at shares of moderna. that's a cnbc story, by the way. >> he did have a plan. >> he did. i said to him, when that stock

was at 18, he told me that he could do this, and i was skeptical, but then he delivers. then i criticized him when he sold stock and found out he has a plan he's using his plan. >> he is using his plan. by the way, are you keep an eye on the covid numbers do you have any concern? >> i'm concerned for south korea. >> south korea, hong kong, china we talked a good deal about, but, you know, it is often what we see in europe starts here the idea of another variant, i don't know that anybody will change their behavior at this point. >> another vaccine. >> and the fourth shot moderna shares were up sharply >> i talked to so many people last night, i'm a petrie dish. >> you've had three shots and the virus. >> it sounds like it's not enough

i want to go back and talk the semis. this is what's really crushing people we don't know what to do with tech >> how about the union pacific/csx light stuff? remember those days? i lie general mills, but don't like kellogg they're doing that with the rails. >> one thing i don't like is spacs. i do want an update on the spac world. saunders >> which we talk about so often, and obviously pointed out many of the inconsistencies, and things investors should be aware of when this sector, so to speak, was very hot. that's not the case anymore. we've gotten to the point interestingly even ipos and spacs are being canceled two pulledtheir plan to go

public many are pulling plans to go public given the volatility. you've got to go back to capital markets, what that will mean for some of the banks as well. it's been a very quiet two months bob pisani has great numb others that typically as well some of the numbers are amazing. you know, you have 83% of 2022 ii -- ipos are spacs 612 spacs are out there looking for a deal >> jay powell does not want them to find any. >> so many are not expected to actually find a transaction, as you would expect, given how many were looking that gets me to the next point we're starting to see the calendar catch up.

remember, they have two years. if they don't do a deal bick two years, you can get an extension or they return the capital in march, there's only four spac expirations. april, four, but then things pick up then into next year, it's -- you do wonder, jim, whether there might be some opportunities out there. talking about an opportunity for investors to find perhaps some opportunities within what is generally a sector. >> i did run a spac of $3 or $4. i'm not kidding. they're burning cash so quickly. david, there are companies out there that should not be companies. >> we made that point time and again, unlike a typically ipo, they were able to offer

projections, and -- >> these are -- >> these are 16 i my mean -- just a second. >> that's carnage there. >> nothing good, but anyway, did want to update people on that. we are starting to see the funnel up spacs coming public dramatically narrow. >> that's interesting. he buys lotteries and does it. >> if you see your jail powell, this is what you were trying to end.

>> have i done wheels up? >> there was a 30-day period where the capital markets were exactly what carl said would happen >> correct, both heavyweights.

>> what are we getting to. >> mike worth being the ceo,. >> i made this point the other day, right >> remember, it's the 10 billion he's getting paid 8 opinions on, also came with warrants. >> he's having close to being.

>> it was the most levered, and now they own it. it seems unlikely, in terms of what law they would be relies on, but it goes to the larger

issues we're seeing in the m&a market, which that it doesn't really matter what they may say. they may still go after you. it's very hard to fully understand the implications for any deal on an antitrust perspective at this point. the experts can tell you anything. >> it was like five or six.

remember the rewards club there? >> the ulta beauty >> let's get over to bob pisani a very strong couple days. >> even you get two, three down days, very choppy. the same with metals they tent to move together they're global commodity stocks.

choppy, just up/down, up/down. there's the leader right there , all of them are the leader bore 1/2 s&p, now in the dow or anything like that berkshire is at a in high. >> the only bank that's actually doing well, financials doing well here. the main debate is about powell here the first half hour, while we had the statement the emphasis is, my god, lower growththey

went up 100 points, as soon as pow started talking, what happens? what is now? there are strong opinions on that everyone throwing up their hands and say it depends on the inflation, meantime, life goes on we have earnings coming. the trend has been down, but not dramatically the s&p earnings now for the first quarter up 6%, up 7.5%, this is dramatic to the down side, but there's a split here again, another food fight. the bear case, you know, on earnings is are we going to have high inflation tighter curves on the fed. put up the next full screen. that's going to curb demand, oak? the bull case is, don't worry, bock, q1 is a problem, inflation is going to moderate

meantime, on the earnings trend there's one by winner. you guys know this they are gushing cash. they're going to have huge numbers. everything else, though, industrials are up 36% they're up 36%, but the trend is down, though it's lower than it was consumer staples are also up 1%, but, again, they're not down 1.2. they're just lower estimates consumer discretionary, same thing. we got stocks here, you know, like amazon, ford, general motors, where the trend has been down, guys that's where we're going to see more on this in the next week or so back to you. >> thank you, bob. of course, on energy, what i do love about this as well is the

interactive nature i ask about occidental, and i get an answer right away you keep track, berkshire warrants are now 83.9 million. but now, having an adjusted price of of 59.62 interestingly, buffett is almost in the money on those 83.9 million in warrants as well. >> 15% of occidental, right? >> exactly bob, thank you. >> all right. >> before we head to break, a quick look at the bond market. take a look at treasurys this morning. of course, we have been keeping an eye on the 10-2 spread as well that has narrowed dramatically in the last year ten-year 2.17. we're back after this.

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you know, i like that ceos who deliver unbelievable numbers. stock is up $11. amazing story of work by gina taking over a company, turned into a jewelry company laura has done more for williams sonoma and the bears are going to have to eat crow, or whatever bears eat. >> great guests. >> how about the russian bear, putin? he has people who say he is not crazy. stalin, you know, he is very stalin-like. >> he is. >> yeah. >> i mean, lenin, who was a mass murderer, had better things to say. >> jim, i will see you tomorrow, if not sooner. >> great. >> we got the markets well off the lows in fact, looking at s&p barely

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good thursday morning. welcome to another hour of "squawk on the street. i'm david faber with morgan brennan and mike santoli carl has the day off a look at markets. we're up across the board following through on of course what has been a nice rally these last couple of days. morgan >> yes 30 minutes into the trading session. here are three big movers we are watching this morning. we start with dollar general quarterly results in line with estimates. stock getting a boost after the company forecasted better than expected full year sales up almost 2% now plus, wash by parker under pressure after revenue fell short of consensus now losing more than half its value since going public last september. down about 2% now. and we are watching netflix. planning to test a new fee for account holders who want to share their service with people who live outside their households that name is up almost 2% now. it is down around 40% though so

far year to date mike >> thanks. the federal reserve approving the first interest rate hike in more than three years with six more potentially still ahead steve liesman has the latest on the morning after. steve. >> yeah, the fed hiking rates and offering a hawkish outlook for further rate hikes and the market yesterday seemed to applaud. explanations for the market rally range from, hey, it could have been worse to, at least now we know what the plan is the fed in a statement saying it anticipates ongoing increases and expects to begin balance sheet reduction quote at a coming meeting it could come as soon as may the median forecast calling for six more quarter point hikes this year and four in 2023, maybe more in 2024 the median fed forecast is for a funds rate of 2.8% that's above the long run or neutral rate you can see on the right of the screen there

suggesting the fed feels a pump on the brakes maybe harder than it did before. powell saying the fed would go faster if inflation doesn't come down as it's expected to do. >> we'll be looking at the data as they come in. we will be looking to see whether the data show expected improvement on inflation we will be looking at the inflation outlook and making a judgment and we will be going each meeting is a live meeting. if we conclude it would be appropriate to raise interest rates more quickly, we will do so >> now, powell said that strong job gains and healthy economic growth meant the economy was in good shape to withstand rate hikes. the issue is whether the hawkish forecast from the fed will be enough to bring inflation under control. folks, we got good data this morning suggesting the economy is in good shape some of that data came after the price spike that was related to the ukrainian invasion >> yeah, steve, always hard to kind of pull apart exactly what

the market is reacting to on a fed day, even if it is all about the fed as opposed to the fact the market has been straight down this year, up to that point, embracing for rate hikes. the projection by the consensus, the median for six rate hikes this year essentially kind you have pulgz the committee up to where the market more or less this been sitting ahead of time. does that explain the fact that investors were able to absorb the admittedly hawkish tone of powell >> yeah, that's -- it could have been worse explanation there were some people who said that after powell said it was going to be 25, they might have been banking on 50 and you see b bullard dissented on 50. the other thing is that with the funds rate forecast to be -- it says the two-year has some work to do to get to where the fed is going and that means that the market has to kind of adjust a little bit more.

but maybe you're right maybe it's that and the idea that, hey, 2023 is a long time away i don't have to worry about that and maybe the fed is wrong and inflation ends up behaving better than we expect. >> steve, thank you. steve liesman. >> sure, david. >> for more let's bring citi's exist equity strategist along credit suisse chief strategist scott, you recently lowered your target for year end s&p, i think from 5,100 you are 300 plus points up from here so what has to happen for you to be right >> well, what i would say, what needs to happen is that the current path of earnings for the s&p 500 needs to continue to move down. what we're suggesting, which is sort of a mid-single-digit ramp for q1 and 2, higher for q3 and 4, and thread the needle here in

terms of the ultimate economic impact of the fed discussion just before where as we get towards the end of this year we need to look at a positive gdp in earnings outlook for 2023 on that premise i think we can then fall back on historical data that shows over longer timeframes the market can do pretty well when the fed embarks on a rate hike path. >> yeah, let's talk about that with mandy as well give me your thoughts you heard steve in terms of the fed and what we're seeing as another six potential hikes this year. are they on the wrong path, in your opinion is the chance for a mistake growing? >> so it's interesting listening to the fed, there are clearly more concerned about upside risks to inflation than downside risks to economic growth and i think that is wrong and it's not just me i think the bond market agrees they are wrong in their focus.

i think there is a prevailing narrative that the fed is behind on inflation if you look at what is priced into the bond market, long run inflation expectations are actually below average it's remarkable well anchored despite their high inflation we're seeing ten-year at 2% does not indicate panic about inflation. and then if you focus on the growth, what the bond market is signaling is significantly rising risk of recession one of the things that we have been highlighting if you look at money markets and what they are signaling, not about fed actions this year, but out two years in 2023 and beyond. the market is starting to price in a full rate cut by the fed. and that's almost unprecedented for the markets to be pricing rate cuts before the current cycle has even gotten underway that again speaks to the downside risks to economic growth so i think for the fed, you know, i don't disagree they need to be raising rates now, but i

don't think they need to be panicked about it and i think there is a risk that they become very aggressive and overtighten this year or the upcoming meetings and really drive us into that economic recession >> that's a very interesting point. scott, just to tie it back to equities, if this is what the bond market is signaling, rising risk of recession the next couple eof years, at what point do the equities take their cue from that? >> we have come to be accustomed to areas of growth within the equity markets proving to be defensive and that's where the tech and the growth side of the ledger comes into the discussion here the impetus is that the market look through economic valleys in the past on the premise that you have eventually fed accommodation coming in to resolve it and given the weight within tech within the s&p it becomes a pretty big toggle in terms of how you specifically factor in what typically would be thought of as economic

downturn or recession impact on earnings you are more traditional sensitive side of the ledger, industrials, consumer discretionary and so forth, more risk on this so we have, i think, it's going to be sort of a sector gamesmanship in terms of how forward-looking you think about the shorter-term economic consequences tied into higher prices and fed action with a longer-term run rate a as we get to a, let's call it a more normalized fed policy stance. >> one explanation for how stocks have done well the last couple of days is just that investors were crowded into kind of a bearish bet implicitly, underinvested position for further downside does your work suggest that's the case and where does that get to ultimately if we are going to have some kind of an unwind of the bearish positions? >> yeah, sure.

in terms of investor positioning, really the pain trade or the painful downturn in the market for most equity investors was actually january so january we had a 10% pull back in the s&p that was led by tech on the back of rising rates and we saw at the time a record rotation out of tech into some of the other sectors, more cyclical sectors so i would say for a lot of investors that's kind of been -- that has been -- which is why the most recent downturn we haven't seen any panic hedging in the derivatives market in terms of buying into s&p protection going forward, i do think there is a pain trade on the upside. if we could end up rallying and the rally is led by tech, you know, most have rotated out and is underweight, i think in that case we could see more of a panic of upside exposure and on the downside most people have,

you know, quite a bit. so we don't expect panic on the downside but the pain trade could be more on the upside. >> scott and mandy, thank you both >> pleasure. as we head to a break, a look at our roadmap. it includes a closer look at rates and the impacts of the housing market we are going to discuss that with the ceo of redfin >> plus, moderna's ceo shedding more than $400 million of company stock during the pandemic we have got the numbers. >> and the bitcoin bypass. russian oligarchs turning to crypto in hopes of circumventing u.s. sanctions quk t s uonot more comingp "sawonhetreet. don't go anywhere.

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switch to xfinity mobile for half the price of verizon. new and existing customers get amazing value with our everyday pricing. switch today. welcome back despite rising interest rates inflation at a 40 year high, a report by bank of america predicts the home prices will rise 10% another 10% by the end of 2022 joining us redfin's ceo. does that sound right, we will see another strong year in terms of home price gains here in the u.s. >> it feels strong to me i don't know where they got that prediction because it is a wild time in the housing market right now. so on one hand you have crazy bidding wars with investors bidding up homes, 10, 20% right now. on the other hand, you have mortgage interest rates shooting through the roof website traffic stepping back.

tourists stepping back it's hard to make a call for the year >> wow okay so when you see that step back, do you see that as a sign of rising rates and the fact that affordability has sort of jumped through the roof and many first-time homebuyers have been priced out market, or is it something else? >> it's exactly that if you look at the average mortgage payment the past year, it's up a whopping 23% so to increase that much in 12 months is crazy. some of that isoff set by the fact that people are moving from california to oklahoma so even if prices rise in oklahoma, it seems like a cheap house to them. nonetheless, it's a bit of a shock. and so investors are really putting the heat on consumers who are just trying to find a place to live. >> as we have these conversations about affordability, inventory shortages, about inflation, does it feel -- and a fed tightening in the midst of this, does it

feel like housing is poised to take a leg lower >> i think that's too strong, too. it feels to me like prices will stay fairly strong they are not going up 10%, in my opinion. maybe they'll go up 5. but i don't think they will take a step down. you are going to see a slight increase in foreclosures because the moratorium has been lifted but that is off ridiculously low levels most people are not over their skis we are not going to see distressed inventory hit the market i think we will be supply constrained for at least the first half the year. >> glen, it's david. what are the metrics what are the things you keep a close eye on that might change your opinion in terms of what you can expect the rest of the year >> one is the percentage of homes that are selling to investors. so that's at 19%, typically around 12% so investor activity remains really high. obviously, we look at inventory, which is down 50% compared to pre-pandemic levels. and then we look at interest

rates and affordability. rates have popped about 50 to 100 basis points, which really affects people's ability to pay that mortgage. maybe the last fact or is rent those two are going up in lock step so rent is up about 15%. so you have this conundrum that there is nowhere for people to live and that means that the for sale market is probably still going to be strong just one step not as strong as bank of america, whoever you quoted at the beginning of the segment. >> right glen, you've got to get out of the house. don't you have an office >> i do. it's just a dump right now i need to clean it up. >> okay. its f. >> it's been two years i mean, come on. inventories are, you know, you gave us those numbers. i'm curious. in terms of sort of you cited investors being up 12 to 19%, is

that typical will that number come down what is that reflective of >> it reflects that right now when you get a mortgage at 2 or 3% you can rent the property out for hundreds of dollars extra a month. somebody else can easily pay your mink. because rents have gone up so much and it's hard for people to access a mortgage, investors can still play this arbitrage game so i think investor activity is something that's new in the real estate market wihere people normally are competing against one another. now there are so many cash buyers in the market we looked at what it does to your odds if you have a cash offer. it improves your standing 334% so 70% of hopes right now are selling in a bidding war and a win in a bidding war you need to be prequalified, usually now you need to actually have the cash so that is favoring investors who are buying a house, renting it out and getting someone else to pay their mortgage. >> glen, all that you are describing right now probably

helps explain why, if luke at the consumer surveys, that the number of people saying it's a good time to buy a home or a record low so basically people maybe if they feel forced to get into a bidding wars, it's not comfortable, on a forward going basis is that a negative for how this housing cycle goes? people in general think it's a lousy time to buy? >> yes i think there are two fact iters. if you have somebody, is it a good time to buy a stove, a good time to buy a car, a good time to buy anything, the supply is low, the competition intense consumers have had it. some isn't about their desire to move, which is still fairly strong there is a migration happening across the country people want to relocate. that is not going to change. and some is about prices and that is the part that is really dampening demand. so i think some is an inventory frustration and some of it is just exhaustion over the high

price of housing. >> yeah. of c of course, from a macro standpoint, it speaks to the concern about the entrench of inflation in the economy. what does this mean for redfin >> it means we are going to keep taking share i think when it was crazy and there was all this funny money in the market it was hard to compete with buyers who were paying 50 or $100,000 more than the home was actuallyers worth it was hard to compete with new age brokers throwing cash around to recruit agents, sometimes $1 million signing bonuses. we are fighting like wild animals to bring our stock price up, but it means that the truth will come out and redfin delivers fantastic service that's the truth it will come out keep taking share. >> glen, thanks for joining us today. ceo of redfin. >> thanks for having me. have a great day >> thank you all right. as we head to a break, let's get a check on the energy markets. oil is jumping again this

morning after a pretty sharp pull back from the highs you see wti crude at 101.74. we'll be right back. stay with us

welcome back yesterday's jump in chinese tech stocks caught many traders, including the shorts, by surprise looking at the ongoing volatility in the space. >> that's exactly right. the explosive move in chinese tech stocks yesterday catching a lot of investors, particularly the shorts, those betting against these names, by surprise the k webb etf closing out by 39% after the chinese government signaled that it's crackdown on tech stocks could ease soon. the result, extreme moves in the options market the call volume which tracks the number of contracts traded more than doubled the all-time record ten times the one-average, abu ibrahim al hashimi al qurayshi,

jd.com the largest increase since 2009. credit swees believes it's driven by hedge fund covering, long is yet to add back their wait thisuntil they see support data points and policies ahead similar message reiterated by ever bright securities say there is a need for more clarity from beijing on how it plans to add more sustainability to the market and resolve issues that has caught the attention of wall street if you take a look at the 12 month performance of these names, yes, a big rebound yesterday, but a lot of ground to be made up. >> yeah. instead. deed. steel and aluminum stocks are moving higher today, including u.s. steel, century aluminum take a look. all up more than 20%, by the way, so far this month amidst that continued volatility in so

many commodities we are back in two minutes ♪ ♪ 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 do you think any of us will look back in our lives, and regret the things we didn't buy? (camera shutters) or the places we didn't go. ♪ ♪

♪ welcome back i'm rahel. here is your cnbc news update at this hour. ukraine survivors are beginning to emorerge by a theater hit bya russian airstrike yesterday. hundreds are still trapped but rescue efforts are being slowed by continued russian attacks russian denies it was responsible for the strike on the theater. lawmakers applauding a speech addressed to him by ukrainian president zelenskyy. that was before he accused germany of putting their economy before ukraine's security. he criticized support of the nord stream 2 gas line and called them to tear down the wall between free and unfree europe the war in ukraine will cut

global economic output by a percentage point that is the forecast from the organization for economic cooperation and development. the group also predicts higher prices as a result war. mike, back to you. >> rahel, thank you very much. checking on the markets. trading about at the highs early losses have been recovered. the s&p 500 up almost a quarter of a percent at a two-week high right now. nasdaq composite flat after a big two-day surge. after the fed approved the first rate hike since 2018 yesterday, fed chair powell spoke about the decision and the probability of a recession in his press conference >> in my view, the probability of a recession within the next year is not particularly elevated and why do i say that aggregate demand is currently strong and most forecasters expect it to remain so the labor market very strong continues are tight and payroll job growth is continuing very high levels. household and business balance

sheets are strong. to so all signs are this is a strong economy indeed. >> joining us now is former fed governor and harvard law school professor daniel turual owe. good to have you with us to weigh in here. i guess you were among those who believed the fed found itself somewhat behind the curve on inflation coming into this year. does the plan as set out by powell and the committee yesterday get them back in line with inflation and do you agree that the risk of recession right now is not all that high >> well, i think yesterday was mostly about the fed's getting its policy position more aligned with its external rhetoric and market and public perceptions. but i suspect that the harder choices are yet to come. they created some optionality for themselves yesterday, but really there are still some disconnects in the story that they are implicitly telling about where the economy is

>> what would those disconnects be in terms of they don't believe there will be much of a slowdown or giveback on unemployment >> right well, that's right i think you have zeroed in on it essentially, if you look at the projections and you look at what chair powell said yesterday in the press conference, on the one hand the fed regards the economy as very strong and this has been widely noted, the chair indicated he thought the labor market was tight to an unhealthy level, but they are also basically projecting a series of incremental hikes that get them just around the neutral rate so accommodative policy for a while to come and then a slightly contractionary policy that would be, as you say, very little affect on unemployment. that would be a soft landing, obviously. and so they implicit in that story is the idea that a good

bit of inflation we're seeing now is supply side inflation which would be transitory, although they will never use that word again, i don't think, and you don't believe that the inflation -- that they are going to get that help from inflation moderating sort of on its own. that's where the hard choices come, i think. >> in terms of the hard choices, are the possibilities of the fed having to rise above neutral now increasing especially given some of the commentary we got yesterday? >> i think they are facing downside risks in both directions, which is not a comfortable place to be. i think some of the people who have been on cnbc in the last 18 hours or so, i think they have said that, both inflation, higher inflation risks and lower growth risks may be elevated at this point of course, all of that is driven by -- it's not driven by, but it's exacerbated by the situation in ukraine, and as you

know central banks have a hard enough time projecting what's going to happen in the economy t they have a harder time projecting what will happen in geopolitical. >> it's a perfect storm right now. it raises the question to me, looking through history, how successful has the fed actually been at achieving one of these soft landings when it is hiking into a very inflationary environment? >> not highly successful i think that would be -- and it's not limited to the fed. it is not an easy thing to engineer that's one of the reasons why you get these debates, at least pre-global financial crisis debates, should we start raising rights now in an anticipatory fashion even before we've seen the prolong effects of inflation. so it is difficult to engineer that, and, you know, they are, obviously, aware of it but that's where i think the

harder choices are going to come and it's not in the nature of this particular fed, i think, to lay out a very pointed narrative about what exactly they think is going on in the economy. you heard chair powell use the word nimble. i use the term optionality but i think at this point they are very much going meeting to meeting. >> dan, you point out how difficult it is to predict geopolitics, not to mention what is in putin's head, but people need to try to can that now. i am curious your thoughts about what the recessionary impact or potential may be of rising commodity prices worldwide and in particular rising energy prices in europe which would seem to certainly crimp that economy. >> yeah. i don't think there is any question about that. but, you know, i am going to play the central banker here and try to deflect the question by saying the central bank is going to need to react to what

happens, i think so we know that, and there already has been, an inflationary jolt from the invasion impact on energy markets and many people expect we are going to see the impact on commodities markets, particularly food, wheat, corn markets as well. so for central banks point of view, you can take that into account. there is going to be inflationary push there, and, obviously, for europe the risks have been a recession increase because their energy costs are going to go up a bit more. but beyond that i think for the central bank to try to say we can map out how we think this is going to go and incorporate the outcomes of geopolitical conflict and fighting wars into our own projections and policy, i don't think they can do it and

i don't think they to do it. that's why it's a dicey situation because they have got to take on the impacts as they occur, but, you know, what, they are going to project we are going to have higher inflation and energy and a week later a ceasefire is announced or vice versa, they assumed it will be resolved and all of a sudden the thing explodes into a broader conflict >> you know, daniel, during the press conference yesterday chair powell said he looked around the room at the members of the committee and he saw people who are very committed to fighting inflation, and there is no doubt that's likely the case, and it seems that's the message that needs to be front and center for the fed now. if you pull apart the prore projections, saying core inflation 4% by the end of the year as they raise six times, it seems as if the fed says we need to get back towards normalcy in terms of the rate level and hope

that we're doing that as inflation takes care of itself to some degree is that fair >> i think that's the way -- if you put everything that is in the statement, in the sep and in chair powell's press conference together, i think you have inferred exactly the right conclusion that in order for the things to happen the way the sep lays them out, or the median sep lays them out. you would have to expect that they are going to get a good bit of help from the dimunition of the inflation in the economy it raises a larger question. remember chair powell said yesterday that the pandemic was an exage nous event that came in on the market back in 2019 when things were going pretty well. if one believes that ultimately everything is going to snap back to the conditions in 2019, then

you would say, okay, that's one way to make policy but suppose you think that the median term disinflationary impact that we saw really for most of the 21st century has now turned around, that global supply chains are now not putput downward pressure on inflation, abundant labor market are not, so we have tight labor markets if you have background conditions that are more inflationary than disinflationary, that's going to have to change the fed's calculus to come back to my initial point, i think that's why there may be very difficult choices in the months ahead >> yeah. and that's why they'll take to ming m&a /* meeting to meeting. thank you. >> peeking of the fed, tomorrow morning do not miss a big interview with fed governor christie fer waller on "squawk box" tomorrow at 8:30 a.m. eastern. and as we head to break, check out the top gainers on the s&p which is hovering around the

flat line. it's largely energy memes led by occidental, up another 8% right now, devon energy. twitter is in the mix, too, up 4.5% we are back in three ♪♪ care. it has the power to change the way we see things. ♪♪ it inspires us to go further. ♪♪ it has our back. and goes out of its way to help. ♪♪ when you start with care, you get a different kind of bank. truist. born to care.

many members of congress are concerned about russian oligarchs will turn to crypto in an attempt to circumvent u.s. sanctions. eamon javers have that story. >> good morning. the senate banking committee is diving into the role that crypto plays in illicit finance around the world. it's a hearing that's taking place now. we heard concern from members of congress the past several weeks about the possibility of russian oligarchs using crypto, as you say, to he is same those worldwide sanctions. but what we are expecting to hear is testimony suggesting largely the opposite, that moving vast fortunes using cryptocurrency is difficult to do in secret the co-founder of chain analysis says the trans paurnsy of block

chains enhances the ability of policymakers and law enforcement to detect, disrupt and ultimately deter illicit activity the former acting director of the financial crime enforcement network says crypto has been crucial to help victims of russian aggression in ukraine, including donations of more crypto by the public than funds sent by the united nations transparency makes it more difficult to get away with the oil for food type scandals and a lack of intermediaries or fees that would water down funds that are donated. they opened the hearing expressing deep skepticism of cryptocurrencies and suggested the innovation in crypto has also led to a burst of into ovations by the criminals themselves senator brown said our laws and law enforcement agencies need to keep pace with bad actors and so far with limited oversight we have given them plenty of opportunities. we will monitor the rest of the hearing and bring you any more news

>> thank you. our next guest says that concerns about crypto being used are myths. president of anchorage digital, the first federally digital asset bank why are they myths i feel like we touched on it with eamon how do you see it? >> yeah. the transparency of crypto that is backed by this technology called blockchain means that it's a very poor choice for evading sanctions. think about it as trying to rob a bank and actually having colored dye explode all over the stolen cash. the money not only is rendered unusable but the robber is exposed. crypto transparency works like that it's easy to track on chain to see if sanctions are trying to be avoided. >> how are we seeing cryptocurrencies used amid this conflict in eastern europe right now? i know a lot of fundraising efforts, for example, with aid going to ukraine is being done

through cryptocurrency channels. >> i think, obviously, the war is a humanitarian tragedy and is actually showing how crypto can be a force for good through this fog of war right now the reality is crypto is a lifeline for ukrainians they have access to the financial system and can receive aid even when faced with russian efforts to shut down their local financing system so i am very optimistic these socially uplifting use cases are glimpses of the future of the digital ecosystem. as we nensed, there is no sanction evasion actually happening because these assets in cryptocurrencies are transparent and you can actually track them and see what the funds are moving and where >> and diogo, is there a system in place, or the processes in place to where there is sort of real-time surveillance and understand of where things are going, or is it a matter of when a case is being investigated or

brought they can, you know, the authorities can somehow uncover the trail of the money >> we are actually a federally chartered bank we meet the same level of regulation as tradition banks. we meet the same regulatory regime and track transactions the same way in fact, we have this bonus aid of the transparency element to blockchain that allows us to track in real time all transactions coming from the platform or leaving the platform even though anchorage digital works with institutions, a lower risk profile, not directly retail, the technology can be used to analyze everything that is happening we are meeting the same bar as traditional banks. >> and certainly you are in kind of a fascinating position because, to your point, you are operating amid regulations even as we have these conversations and we see governments,

including the u.s. and governments in europe, moving to more aggressively regulate right now. so how does that all of play out and the ten plate that you have in place at anchorage, how easy would that be to expand to other aspects of this asset class? >> it is very easy the tools are in place the platforms are in place the regulation applies to digital assets and has applied for a long time. there is clarity how to monitor these transactions and do risk assessment of client onboarding. if anything, i think we should talk about the executive order that really affirmed how we're responsibly regulated digital asset ecosystem recommendation the future of finance. that is actually the prize administration has made it clear that the u.s. should lead in digital asset development and that regulation is necessary while ensuring that u.s. stays competitive. so we, anchorage, are years

ahead for what is responsible innovation with all the tools available in the space to make sure that we are meeting sanctions and going above and beyond than what the rule of law actually says. >> from your vantage point, how would you size up the moves we have been seeing within certain cryptos like bitcoin and ether in recent weeks? this has been sort of seeing everything that we are seeing play out on the world stage as a potential case study for something like bitcoin, this idea of so-called doomsday insurance or digital gold, and yet because it has become so correlated with other asset classes, including equities and you have those institutional flows, we haven't actually seen it trade that way. your thoughts? >> there are clearly two differentnarratives and all crypto is not the same you can look at bitcoin and claim bitcoin as digital gold, store of value narrative that applies to that asset. it does not apply to the other

crypto assets that are more of a risk asset than bitcoin is and so we really have to split those two narratives and capital preservation and all of the utility that bitcoin brings as we have seen in the ukraine to enable aid even when under attack by a very powerful foreign adversary. that is capital preservation and the ability to retain access to the financial infrastructure mile under attack. compared to other cryptos that are a lot more risk assets, v is c style investments and early up and coming networks. >> thanks for joining us coming up on the next hour, don't miss the ceo of pager duty that stock up after reporting results. over 13% that's at 11:30 a.m. eastern don't miss it. we'll be right back.

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20%. this after president biden announced 100 switch blade drones would be sent to ukraine. it's still a small order baird which raised its price target, exacts the demand for come cozy drones expects it to expand in the next 12 to 24 months lockheed martin, raytheon, saab, keep in mind these are relatively low-cost weapons, $1.5 million to date as defense spending rises, many analysts do expect more orders for major weapons system the reason, increased support for spending, improving cuts or

delays in ship building. shares of huntington ingalls are up 2% as well. mike. wh wt's not just a trade right no ene return, moe der noe ceo sharing mills of his shares of the company. we've got the details next look, as cfo it's my job to be ready for whatever's next. that's why i have my finance team, randomly hurl things at me. it's also why we use workday. it gives us insights, so we quickly pivot our strategy, people, planning, you name it. sorry, sir. i will aim straight at your next step. see that you do. would you like some coffee? workday. the finance, hr, and planning system for a changing world. ♪

the street". ceo of moderna is with us. robert frank has been digging through the numbers. robert. >> stephane bancel selling his $400 million worth of shares since the start of the pandemic. this is according to s.e.c. filings. some terrific reporting. he sold over $150 million of his own stock through a prescheduled stock program. he sold most of those shares at prices over $300 a share that stock trading now at about 166 bucks a share -- 1612 now. he sold -- in addition to that he sold $170 million of stock through an llc called ocha that he controlled is his children's

trust fund and a biotech company, he sold an additional $80 million. it's only 13% of his total holdings so he still has a lot more stock. that's according to open insider, moderna pointing out his stock selling program was launched way back in 2018. his first shares were in november of 2019 so all of that was before the pandemic, the company is saying the plan was amended last may to reflect his charitable giving. bancel still has around 25.1 million shares this is just going to add fuel to the already fiery debate how much profits both personal and corporate have been made from these vaccines. >> yeah. although, again, to be fair, a lot of this was off the 10 b 5

or part of a planned program of selling, correct >> yeah. and a plan, again, that was started back in 2018 and he didn't start selling until november of 2019, way before the pandemic they would argue this has nothing to do with inside information they had regarding the pandemic sales. >> of course, moderna, itself, well off the highs and has been quite volatile for most of this year robert frank, thank you. we turn to mike santoli now. moderna, one of the stocks in fpharma that's actually down. >> big pharma has been great, 5% month to date. the drug stock, sort of defensive leadership as you might expect the s&p 500 is overall flat. although, today digesting a move to the upside. we're right at the borderline of is it just a bounce in an ongoing downturn or maybe it's

real, you know, recovery attempt. >> does three days matter in a row? does it make some difference. >> i don't know that we necessarily need the three days. any further strength is probably better than not, but no problem with giving back part of the gains as long as we don't go below yesterday's low. >> which was. >> 42.50. >> that's going to do it for us on "squawk on the street." "techcheck" starts right now happy thursday welcome to "techcheck. carl's got the day off investors are fed up with poor returns. why nasdaq is not the place to be, at least not long term plus pagerduty having its best