inflation. in thchina, boeing and the a trying to figure out what caused the deadly crash of the 737. shares of mnike higher. it's tuesday, march 22nd, 2022 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc i'm rebecca quick along with joe kernen and mike santolli there are green arrows at this point. dow futures indicated up by 137.

s&p up 14. as joe mentioned, stocks were down yesterday the dow down 200 points. breaking the five-day winning streak this came after jay powell spoke about the aggressive interest rate moves to tame inflation that putting pressure on stocks which ended down across the board for s&p and nasdaq treasuries with the opposite being the case take a look at the ten-year yielding 2.351%. the highest level since may of 2019 the two-year note at 2.191%. the two-year note hit 2.02%. you saw crude oil prices moving higher yesterday, too. wti and brent up 7% yesterday. touching back above $112 for wti and above $115 for brent

down a little bit this morning wti at $109.63 and brent at $113 $113.76. rbob is up mike, comments coming from jay powell, is not a huge surprise, but think going a 50 basis points hike is next. >> you would think it is a reiteration of what he said in the press conference after the fed raised rates last week the market was kept off balance by it. goldman sachs out today saying they think .50% increase in may and june that would mean another full percentage point of rate increases by the middle of the year that kept that game going. the bond market is getting crunched the two-year note at 2.2% this morning is eye catching. we didn't think the ten could get there a while ago. >> if you analyze what he said if this persists

if you annual 00 iannualize wheo is right now, you should have done 50. you don't want to shock anyone you have to ease into it if you are ending qe and going qt and don't want to go 50, you ease with 25 you know how long it takes to get back to a normal number with quarter point hikes? >> a long time it is the easing process this is the easing process we said the market didn't want to be shocked at a 50 basis point coming this is how you talk people into it. >> i don't know what the terminal rate is if you need to get back to the actual interest rate that could do something about inflation, let's say it is 3 or 4 or 5. it will be 2030 with quarter point. you have to go a half. >> it is the response of powell

to questions last week they tried to pin him down do you think the hikes this year will be doing a lot to fight inflation and bring it down. he would not commit to that. it operates with a lag we don't think what we do this year is the thing that brings inflation down they are tightening alongside an easing back of inflation also, the take away isthe more room the market gives them, the more they will take. the more the market can feel it stays together and doesn't panic and stocks rally last week and financial conditions ease because volatility comes down, that means they will say fine. give us the slack. we will take it as long as we can. >> arguing for a temper tantrum there. don't let people know they have the power to do that. >> not arguing for it. the average stock went down 20%

from its high. maybe we have done that workan trying to figure out the effect. >> in the old days at 8%, half a point percentage was small whatever number you want to use now. oh, my god half a point is a 40% increase it used to be to get somewhere, you know, if you are going to try -- it reminds me if you are going to give someone antibiotic let's start with a low dose. if we need more -- give me the dose i'm not saying i need one. don't wait to see if it gets worse. you might as well try to get where you're going as quickly as possible y the first one you don't want to shock. it's been over a decade. >> what happens with the economy? does it slow down?

brian sullivan had another person calling for rehe scession the last hour. >> not in you look at airline seats or nike. people are pent up. people have money from covid relief and haven't done anything so long. cabin fever. >> right i think it is an unusual cycle in that way. you vant haven't had consumers the town. >> paint the town red. like the dress, becky. >> the shirt thank you. let's move on to the crash of the boeing 737-800 in china the flight carrying 132 people drones and manual searches are conducted to find the black

boxes. the china eastern flight 5735 te entered a steep fast dive yesterday. the plane plunged to 7,400 feet before regaining altitude and dove again the plane stopped transmitting 96 seconds after the dive. boeing shares ended the day down 3.5% it had come up off the morning lows no idea the mechanical cause >> disturbing. funny how the faint image you can see is disturbing. shares of nike are higher. results beat estimates thanks to robust demand in north america they delayed outlook citing inflation and war in ukraine and clogged supply chains.

it expects to provide guidance with the next quarterly report people were running in nike sneakers to get on packed airplanes to fly to places where there's no hotel rooms available and try to make reservations tat restaurants you can't get in did i forget anything? to order stuff that's stuff to get from the supply chain if you get a table. >> takes a long time. >> to pay twice as much for a steak. >> yeah. >> what else bacon $12 a pound. >> you got back to bacon. >> made it to bacon. never takes me long. you know what is still cheap best bargain in town taco bell. shares of alibaba jumped in hong kong bacon talk cos. covered it all

the buyback program. alibaba looking to boost investor confidence after losing 2/3 of the value since hitting the high in october of 2020 last week, china securities regulators said it would encourage companies to ramp up share buybacks to stabilize the economy after three sessions of selloffs in the tech sector. let's update ukraine moscow an appears to shift battle plan to compel ukraine to relinquish to the south and east of the country russia hands increased bombing o pressure the government in kyiv to give in to moscow demands ukrainian president volodymyr zelenskyy said yesterday he is prepared to talk about a commitment that ukraine will not

seek nato membership in exchange for a russian cease-fire, with drawl of russian troops an guarantee of ukraine security. he added that he is ready to discuss the status of crimea and donbas region held by russian backed separates. in the u.s., president biden fears putin could use nuclear weapons because his back is against the wall the u.s. is sending ukraine soviet made air defense equipment that is acquired decades ago. one official said systems were obtained by the u.s. to examine the technology the defense weapons are familiar to the ukraine military which inherited the equipment following the breakup of the soviet union

>> if it is any good in the old days, a soviet made jetliner how about soviet made vaccine? >> they figured out how it works. >> if it is not a market economy, you wonder about the quality of everything. >> look, if they are trained to use this stuff, it is useful to them >> one other thing i was thinking i already forgot all right. that happens prevagen. when we come back, we tackle the moves in crude oil prices with helima croft. she will join us from saudi arabia next. and later, the state of maryland announcing a gas tax holiday. governor larry hogan wiljol in us live. you are watching "squawk box" and this is cnbc

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welcome back crude oil prices around $110 today after rising more than 7% yesterday. this came as support in europe has been growing to join the united states in banning russian oil. for more on the driving oil prices, let's bring in helima croft. a cnbc contributor

helima, the move that the eu is red ready to start banning russian oil. >> germany is opposed to banning rush sian oil they are reluctant to go for embargo. hungary expressed opposition i think it is really hard to get an eu wide embargo on russian energy of the will congress force germany's hand impose secondary sanctions like iran to force refiners in germany? for now, we have the division of europe and penalizing the exports. >> will we see europe break where part of europe goes along with it and germany and hungary don't? >> we could see that the question is will it be effective? as long as germany is a holdout,

that is still a significant lifeline to vladimir putin he will continue to sell oil to india, china and less volume than before, because a number of companies are pulling back doing business with russia as long as germany is taking russian commodity imports, putin will have a lifeline. >> helima, you are in the middle east right now doing extended tour what is the feeling you get from the places you have been visiting at this point how are they reacting to everything >> i think it is very important to watch what happens in saudi arabia they are the only country sitting on significant spare capacity the saudi foreign ministry came out yesterday and said we are suffering an onslaught of houthi attacks on the critical energy structure. five key facilities hit over the weekend by missiles and drones they are saying don't look to us to make up for any shortfall in

the market if western nations and united states is not willing to guarantee our security this is a really big issue because we do have iran in negotiations there is concern in the region that the united states will cut a deal with iran that leaves them with more money, but no curbs on the regional activity or missile program and leaves saudi arabia and uae exposed they are saying you want us to help, you have to think about our security interests in the region >> i noticed an unusual statement from the national security adviser's office about the houthis. this sounds like something involved in all this if saudi arabia is not going to pump more, how can they say don't go to iran >> becky, this is an important question right now, we have the break in

iran talks one hang up is the issue is will the united states remove from being a terrorist organization desig designation? if you remove them, are you going to get any promises from the iranians they will not support armed groups like the houthis? this is a big issue in the negotiations right now if we were to get in iran, becky, it is important to understand a situation where iran will have to be compliant with the terms of any new agreement. they are not sitting on the ability to ramp up millions of barrels quickly. only saudi arabia can put significant numbers of barrels in the market immediately. hence, the white house has to ask saudi arabia for more barrels if they want to deal with the russian situation iran will not solve the problem in the near term >> it seems like a lot for us to go to iran considering

everything that's happened and all of their past actions, including what they continue to do in this day why would we bother? >> right this is a really important question this has been a core foreign policy priority for the biden administration that is to get back the nuclear agreement and expand the timeline the problem is if you are not dealing with the other iranian activities, ballistic missile program and what they are doing in the region and is this a good deal from the broader security dynamic that the united states and regional allies are worried about. this issue of the houthi attack and ongoing security concerns in the region that's causing the saudis to say, look, you want more barrels from us, you have to do better in security dialogue >> helima, good to see you thank you.

>> thank you coming up, a portrait by andy woarhol expected to go up for auction. as we head to break, a look at the cryptocurrency prices >> announcer: this cnbc program is sponsored by truist securities of people working beside friends and neighbors? pursuing 100% renewable energy in our operations. aiming to protect, manage or restore millions of acres of land. and offering you more sustainably sourced products so you can become part of the change. so, can a company make the planet a better place? we're working on it, every day.

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over the lgbtq plus issues over the florida don't say gay legislation. bob chapek is discussing the issue with the disney creators >> that is an issue. you talk about how things spun out of control and exacerbated the differences with iger and chapek's style campaign donations by koch industries are under scrutiny after the company doing business in russia. lawmakers received $100,000 in donations in the weeks leading up to the invasion in ukraine. you can look at cnbc.com for more on the story. it looks at the members of congress who received the money and talks to ethics lawyers over

what should be done. i talked to mike about this earlier. the ukraine story and we were reading. putin harps on biological and chemical facilities in ukraine saying that means this is another false flag he is saying it is there he could be preparing to use one are or the other or both i guess when i read it, he is not trying to make it look good anymore. the propaganda i guess he hasn't for a while. so patently obvious. i guess it doesn't matter to a true propagandist. you throw it out there no matter what you come back and use it >> does that cause enough doubt for domestic purposes for him? >> i guess the rest of the world will always remember baghdad bob.

maybe it is for the best. >> when it comes to china and the things they said and picked up and gone with the same things state media coping russian media. they are taking a lot of the russian propaganda and airing that and not allowing the u.s. to go ahead with its news on this stuff that's the thing maybe for his home audience primarily. you add another 1.5 billion chinese people to the mix on this >> with china, they -- they -- it came from a wet lab or wet market they are still saying that they claim it came from an army base over here in texas. they put that story out there. you can try anything i like the marilyn monroe. it looks like her. it's not exactly a photograph. the campbell soup can.

the portrait is his best it is hitting the auction block for $200 million it expects the painting to set the record for the most expensive 20th century art work to ever sell at auction. warhol created five versions of the piece each on a different colored background this is known as shot sage blue marilyn. >> you better stop trying to say that you will get in trouble. >> the previous record at auction for a warhol is $100 million. let's say you have more money than god or more money than warren let's say that you are having a party and people walk in and you have that thing on the wall. that's keep for $200 million to have the marilyn monroe andy

warhol or jeff bezos or whatever that's pretty good that's actually it >> no way. nobody would believe that. if you showed up with a ring this big no way. >> so i conic, it would be worth it i picked that up last week. >> a stretch for me. even if i had it it's not my thing. >> you already got a global express. a couple of them you already got -- >> it is another way of saying i have enough money to put this thing on my wall >> another way of compensating for something else, right? >> very cool people walk in >> a fashion thing it has to be mine. >> you can throw your party in like an art gallery. people do that. coming up, the latest on the investigation of the crash of the boeing 737

we are calling it an 800 it was in china. phil lebeau will join us with what he knows. as we head to break, here is a look at the s&p 500 winners and losers >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure something different. oh, we can help with that. okay, imagine this. your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, like asap! so basically i can pick the right plan for each employee. yeah i should've just led with that. with at&t business. you can pick the best plan for each employee and get the best deals on every smart phone.

good morning welcome back to "squawk box" on cnbc live from the nasdaq market site in times square. checking the futures see we are in the green. we weren't earlier we are now after the first day in a few where we did not gain yesterday. it was minor toward the end. it was pretty good for what powell said. i thought the market acted well. >> negative most of the day and up and finished flat. >> i'll tell you why i was smiling, becky you know my mind

you go to apple tv they show the beautiful shots and moving along like a helicopter or satellite shot it was manhattan i was trying to figure out on this big wide shot where we were and i saw the empire state building i could see where other things were i go, we are right and i looked. there's nothing more dead center in manhattan than times square >> i know what you jumped to next >> i immediately thought, we're toast. >> yup that's where the bombs are said headed >> yeah. the bullseye on the map. >> yeah. just occurred to me. is it ironic 9:01, i'm out of here. let's now get to the

investigation of the deadly crash of the boeing jetliner in china yesterday. investigators are expected to hold a news conference in the next couple hours. phil lebeau has the latest good morning, phil >> mike, let's see what the investigators will tell us i suspect we hear where things stand and search for possible survivors. nobody is expected to survive the crash given the incline and impact into the mountain we will wait and see what the investigators have to say. here is what we know they have not yet recovered the black boxes. the cockpit voice recorder and flight data recorder some 737-800s have been grounded in china the china eastern fleet of more than 100 grounded by the airline. president xi is calling for safety checks. not grounding them not saying that 737s should not fly in china, but all airlines

should do safety checks to make sure they are meeting the standards they should be meeting. look at shares of boeing keep in mind, china is the largest market for the 737-800 these are basically the next generation 737s. these are workhorses within aviation they are popular flown by airlines all over the world. they have logged billions of miles over the last 20 or 30 years. you are looking at a fleet that is well established and has a strong safety report in terms of boeing and exposure to china, keep in mind that it is not just that they have delivered hundreds, thousands of 737s, but 737 max which is the discussion with boeing and china. they yet to resume the delivery of 7376 max

here are a number of max planes which are waiting to be delivered. that has not been approved by the chinese government and it is just in december where china said it is okay for the airlines to once again begin flights of the 737 max. commercial flights have not resumed there. for boeing and airbus, china is the market that is so much of their businesses focused on because it is the second largest commercial aviation market in the world which continues to grow for boeing right now, making sure that the 737 continues to fly. at this point, we have seen china eastern ground fleets of 737-800. it may be a few days or a week and then say it is good to go again. at this point, we don't know for sure. >> phil, putting together what you are saying on the extensive

safety record of the model and the authorities have said in terms of treatment i wonder if that all suggests there aren't really based on what we know now many implications for boeing with future demand from china for any of their jets right now. i'm trying to point out why there was a hesitant market reaction and people extrapolating something about the treatment of the planes in china. based on what you are saying, it would be a leap to think that is the case >> i think it is a leap to say they will ground all 737-800s. it has a great safety record worldwide in the last 20 years engines used have a strong track record we don't know enough about what caused this crash. was this a case of cockpit confusion or components within the aircraft failed?

there is no indication looking at the data, what limited data is out there there are too many questions for to us say i can see china grounding all of the 737-800s. what i think is happening is people are saying china, for boeing, china is one of the markets where there's so much involved with the political discussions and when the max deliveries resume and this just adds another layer of concern, if you will, in terms of its relationship boeing's relationship with china and the chinese view boeing. >> that's good context, phil thank you. we will look for the press conference later coming up, the teslas made at the first germany facutory delivered today. and kalamazoo, we talk to

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tesla is unveiling the latest model y today at the event at the new gigafactory in germany. opening the opportunity to expand throughout europe joining us is gene munster and

gordon johnson gordon, let's let gene set this up talk about how awesome things are. you take notes and you decide what part of what gene is saying is somewhat true or not true at all. maybe open discussion. is that good, gene >> i like it, joe. for starters today, giga berlin. it is important for three reasons. first, increases the overall production by 25%. second, manufacturing in europe does allow advantage in terms of gaining market share there are costs advantages they can deliver lower prices, but they can increase profitability. it is production, market share and profitability. when i put this all together, i

would go back and think that this is one piece of the puzzle that will keep momentum going. i suspect that the march quarter for delivery is 312,000. i suspect it will be above that. this will continue the piece here and what is significant today is it doesn't seem like big news, but it is important. it is how tesla's story keeps turning higher. >> gordon, if you came on in october of last year and said, man, i love tesla and loved it for five years and ridden it up. now i might lighten up or get bearish on it. i would say you are the best ever i'll not say that. you have been right since october of '21 when it got up to, i don't know, above $1,000 well above $1,000.

you have been bearish for longer you think this is the beginning of you being vindicated and correct about the negative forecast on tesla? >> thanks for having me. we do. i want to put it in perspective it we think this is not news. let me explain toyota has 67 factories across the world. 14 in the u.s. they delivered 10.5 million cars last year. tesla has two factories. the third factory. 9 937,000 cars last year tesla is trading valuation four times toyota keep in mind, the betrlin factory, the factory is run on generators it is not complete the drive train unit is not open the cars made in berlin do in

the have permits we don't know why they will deliver cars to people this is not a complete facility. we think this is a pump story like many of their events. we think when you consider that, you take a step back and look at the market share which is collapsing in europe we think their deliveries could be flat to down in the march quarter. gene may be disappointed you consider the deliveries in europe peaked in q-4 of last year we think q1 is down versus q 4 and q 3. we think tesla has big problems. we are on the verge of proven right. we want to talk about the competition, but this facility is another pump story. the s.e.c. response to elon musk to get out the fraud lawsuit is due today. this may be a distraction story. >> gene? >> gordon is correct there are two factories that are producing teslas, but two coming

on in the next -- one today and another one. it will force the overall point that tesla has less factories. i want to focus in on the piece on market share. this is something gordon and i have debated in the past tesla shares are going down. no doubt it will decline. there have been some contours that suggest there is a stabilization or reversal of that if you look at the german market and in the month of february, they basically have a country where you can look at rest administrations. the top two vehicles were model y and model 3. the third vehicle was the fiat 500. i would recommend googling the fiat 500 versus the model 3. it was a distant third this concept that there is a deterioration -- again, market

share will go down somehow rapidly declining and the european consumers are turning away from tesla doesn't capture what is going on i think that a third of the business will come from europe those are two points that i would give extra light on. >> okay. you need more time, gordon i thought you did a good job. >> i do. i would like to address that the market in europe is fa fallen 33% to 12%. gene, have you driven the kia? have you driven the iconiq 5 the new version? all of these cars are significantly ahead of tesla and have equal or better technology. when you talk about market share, by the way, market share in europe is the half. you have to look at what the future looks like, not the past,

gene if these cars are better, that means tesla will see significant market share and we're analysts we have to predict the future. the future is grim for tesla they rank tesla cars nearly last in quality and reliability all of the other guys are ahead of them. they lost market share in europe and china. it looks when the cars hit u.s., it will lose market share there. you have to consider that, gene. once you drive the cars, which most we have, they will see they beat tesla in nearly every as aspect >> all right someone's got to finish and get the last word. i'm sorry, gene. >> no problem. i got the first word >> you did you guys are model for being so nice in disagreement i can see a twitch, gene you can feel the onslaught

coming thanks, gene, gordon >> thank you good to see you. >> see >> lesson for all of us. when we come back, we're going to talk about the comments from fed chair jay powell of raising the odds of comments fr fed chair jay powell that are raising the odds about moregressive rate hikes coming "squawk box" is right back getting the incredible iphone 13 without t-mobile, makes as much sense (ready or not,) as playing hide-in-seek... (here i come...) in the desert. really guys? t-mobile has more 5g bars in more places. and now, when you switch you can get iphone 13 on us

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coming up, we've got some reaction to fed chair jay powell's comments that looked like it raised the odds for a more aggressive rate hike path that's straight ahead. steve liesman is here next, and former yum brands ceo david

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laying down some serious markers on the outlook for rate hikes at his n.a.b. speech yesterday, and the market did sit up and take notice he's got more on what powell laid out and how we should interpret it all hey, steve, good morning >> fed chair jay powell putting markets on notice for the likelihood of rate hikes that fight even to the opponent they rise to the neutral point. that could mean a funds rate that ultimately rises above 2.5% >> if we conclude it is appropriate to move more aggressively by raising the federal funds rate by more than 25 base point we will do so, and determine we need to cover neutral into a more restrictive stance we will do so as well >> the market head the fed chair

more definitively they did in this press conference last week. before the meeting the probability of a 50 basis point hike in may just 5%. after yesterday now faces a 68%. so 50 is the likely call at the next fed meeting what happened here the result of all this hawkish talk from the chair was exactly what he wanted he pulled forward future tightening into today's economy. the two year yield 2.17. the highest level since may 2019, up 30 basis points this last week. behind this move, behind the change looks to be the impact of the ukraine invasion is going to be more inflationary and that

leads to tougher action from the federal reserve. >> just the idea the fed is going to do what it thinks the market will allow, what the market will go ahead with. if they don't get push back and too much of a temper tantrum they will go ahead and raise rates more frequently. >> i think it's a back and forth. the fed kind of, you know, puts those markers out there. remember we had governor chris waller on our air on friday, and he kind of said, you know what, get ready this could be coming, and we were like, well, we're not quite sure he's totally in line with powell and now it seems like he is and the market is getting used to this, up to the point you're right the market starts to spin it back and the fed says, no, we can't stomach this it's interesting to watch that 210 spread which has narrowed a bit, and it's kind of like the

long end of the curve of the fed saying you're going too far. so not really a belief of a soft landing. >> steve, next when you talk to athletes again in your all american survey -- actually when you do do the next all american survey, you know what i'd like to know, steve there's got to be a certain number of money managers or investors that were disappointed that the fed wasn't going more quickly. and where some people probably would be gratified if it was a half a point or if a half a point was on the table and i'm wonder do you really believe that, or the normal thing we think about these traders is they're crack addicts and want easy money, anything that looks like it's not going to stay easy, they're ready to sell is it really possible it could be 50-50, and there could be some long-term bonds that are

actually worried and 150 if it's 50 they're going to go holy crap i'm out of here. >> joe, the all america survey asks the general public those questions. >> that's what i'm talking about. they're the ones that own the stocks if they watch squawk they're smart enough to understand this stuff. >> okay. okay, that would be interesting. but i think what you mean is our fed survey where we asked money managers and strategists and stuff. but anyway i can give you some data on that already the survey from yesterday they asked their economists 77% think the fed policy is too stimulated that's a remarkable number in any regard it's up from 50% which is remarkuble in itself this group of guys, if you go to any of these meetings these guys are guys that generally support where the fed is at.

>> i want the commonperson the "squawk box" common person go ahead and do it, you've got the money. >> we were talking about how it hasn't been as much fun for the retailer traders lately. when you have so many down days in a row it's not as much fun, and i wonder if that's going to be the impact. if they're not thrilled markets have come down so substantially. >> you guys were talking about this becky, joe was talking about this earlier i may be crazy about this.

is santoli around because i really -- i gauge or pivot from the 1130 pivot, and mike, i only have the nasdaq down 12%, and we stomach the 170 basis points of tightening since november. i actually don't thinkthat's a >> i agree it's not that point to point so that's been the distinction some of those stocks never

belonged where they were honestly if you traded based on those assumptions i'm not sure the losses you've bip given are unwarranted. >> steve, thank you. we'll see you later. it is just after 7:00 on the east coast, and you are watching "squawk box" on cnbc i'm becky quick along with joe kernen and mike santoli. andrew is off today. a big line up in the next two hours including yum brand ceo david novak, larry hogan and wells fargo's mike mayo. futures this morning have been higher dow futures up by about 157 points s&p up by 13, and by the way let's take a look at crypto. crypto has been climbing this morning anymore than we ever see

a reason. >> i was reading the prompt towards the end, for no discernible reason, and yeah, that would be different how? taking a look at today's market moves. you're over there now. is that where you watch the individual stocks? do you watch them from over there? >> you know, crypto, by the way, on a daily basis it is a pretty good risk appetite typically the stock market is going to be, don't know why but that has been the coincident indicator. of course remember last week it was up more than 6%, one of its best weeks going and then it finished about flat, so you have to say that a pretty decent absorgz of the

keep in mind from the january low and also february low we did have rallies this one right here is a bit over 7% from the low of last week so it's not as if we necessarily have five to the up side but incrementally better when was that fed pivot when they really became unequivocally focused about raising rates and inflation? now, the fact it's almost -- not quite but almost as high as the ten year yield, therefore people talking about the flattening yield. what it really means in literal terms is the market says there's going to be a bunch of rate hikes in the next.

implications for sectors over two years, home builders against energy, you see both of them are telling an okay secklical story right here but recently energy because of what's happening with the commodities themselves and steady demand have actually kind of overtaken home builders which still rate sensitive no matter all the great things youcht to say about the housing market, great supply, prices up. people still say it's a lousy time to buy a home of course mortgage rates going high again we do want to bring in another voice from the markets lisa erikson cohead at u.s. bank wealth management. great to have you here, and real curious about your thoughts. don't fight the fed became a clixi for a reason.

>> good morning, mike, and thanks for having me to your point there's a number of conflicting currents going on right now. we're actually at a neutral stance on the u.s. equity market and what we really see on the big picture on the one hand to your point stocks have done okay really since recent sessions and really on that it's on the back of what's going on fundamentally with the macro kmae as well as underlining company earnings if you look at those there has been so some slowing but really both of those factors have been quite resilient. obviously the fed is becoming more hawkish in its stance it's moving to normalize what's going on with policy, and you do have some uncertain effects from the russia, ukraine conflict

we put that together and we believe that same cappual your current strategic allocations with your equity makes mor sense as we watch some of this data evolve and where we see policy going in the next few months >> if you're remaining neutral which means obviously staying invested based on some target location does it mean you think the fed is going to be successful and not raise the risk of recession and took us into recession >> well, the fed really has a very tough path going forward to navigate obviously they have to stay very alert the give the market the message it wants to hear in terms of being determined as far as elevated levels of inflation. to your point it's got on the other side the fact it needs to be careful not to overtighten. we just really see a tough path ahead. and reasons for our neutral

stance because it's going to be hard to see how that all plays out in the next few months >> in the stock market what does that mean in terms of what you've emphasized for the fed? >> right now we've a more balanced opportunity for the sectors. we still see some of those secular growth areas and ongoing trends to cloud computing, need for artificial intelligence, machine learning are all still intact, but on the other hand you do have continued growth in the economy, and overall fed policy is still relatively accommodative with interest rates at a fairly low level, and so that does allow some of these more economically sensitive sectors and those that are also prime to take advantage of some on going reopening activity to do well as well. >> all right, better balance unlike perhaps last year lisa erikson, thanks very much

>> coming up, the big questions facing corporate leaders right now from the supply chain crisis to the war in ukraine. former yum brand ceo david novak joins us next. before we head to break let's get a check on the markets "squawk box" -- up again, green "squawk box" will be right back. competition beat us again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. it's got to be something workday. i think i got something. work... hey, rob, you're on mute. hello! hey, rob, there he is. workday. the finance, hr and planning system for a changing world.

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with russia in response to the russian invasion of ukraine, but as the conflict wears on, what's the criteria for return? for more on all this let's bring in david novak he's retired chairman and ceo of yum brands he's now the founder and ceo of david novak leadership and also the coauthor of the new book, take charge of you, how self-coaching can transform your life and career. and it's good to see you we have been talking a lot about the companies that have pulled out from russia. mention some of the ones that have stayed, too but as easy as this may seem, look, this is a bad situation. vladimir putin has done terrible things, and we don't want to see companies not take a stance on this it is pretty complicated from the ceo's perspective. it's not just about cutting business ties but about the people who work for you in some of these places. how do you go through this as a leader >> becky, i think you're making a really great point just two months ago the russian

team, the yum russian team had me speak to them i did a zoom call with them when they were having their leadership meeting, and they're fantastic people unfortunately, they've got an incredibly bad leader run their country. and this whole situation i think is really, you know, put a lot of pressure on leaders because there's no play book for something like this. you know, the pandemic there was no play book and actually i think the pandemic has really helped leers prepare for what is going on in ukraine, and i actually think that every -- every company situation is different you have to take a look at it. you have to understand what your employee base is, and you have to understand what the economic factors are, but i think that what i'm really proud of is american countries -- companies who basically have taken a high road on this and said we're

going to support the united states, we're going to support ukraine. you know, we're going to either suspend operations, we're going to put any profits we make for the time being into humanitarian efforts, but i think companies are really stepping up >> i've heard from some ceos who said, look, it's a serious problem. we have people who work there who are not american citizens, who are russian nationals, who are ukrainians, and for them in that situation they said we don't want to hurt those people who have worked with us for a long time for decades. they've tried to get money into the country ahead of time, but now what because that money is probably running outright about now. >> i think that's the rub. that's why i bring it up our russian teams are fwantastic and no one wants to do anything that's going to hurt your employee base. that's what i think has been the sad, sad part of this.

in russia, for example, our restaurant managers, almost everyone of these a masters degree in something. they're electrical engineers, doctors. and the real fact of the matter is they can't get any jobs other than retail jobs and we've got an incredible, incredible team there. so, you know, your heart goes out to those people that are impacted in russia because of a terrible leader like putin i think who knows what's going to happen next, but i think every leader has to assess, you know, what's happening on the ground, you know, how -- how the things proceed with ukraine in russia no one knows what's next where wrote the book on self-coaching and i think this is a time where there is no play book and leaders have to coach themselves and figure out what

the reality is and then figure out what the best thing is, and it's always a balancing act. it's always a balancing act between your people and in this particular situation, you know, an enemy, very unique. i never went through anything like this when i was ceo and i'm glad i didn't have to. >> what are the parameters now for a company that have been pulling out or suspending operations what makes them say we will go back is it a cease-fire or putin has to be gone from the equation for them to say this is now acceptable for us to come back into the country >> i think the real answer to that, becky is, and i'm not trying to dodge the question is we don't know. i think what has to happen is that things -- events have to unfold and we have to take it from there and you can't really assume anything, but certainly i think

a cease-fire at the minimum will get people rethinking. but i think it's going to depend on the company >> it's going to depend on the company or public pressure let's face it. some companies may have pulled out quickly on this but a lot of them did it because of very public pressure coming their way. and this has been a focus this was before you even had the official block aids on these some american public demanded it >> i think people realized this was a huge issue

a lot of people making a lot of money in russia. no one wanted to do it, but they know they had to step up and i actually think business was much better prepared for what's going on in ukraine because of the pandemic, because they learned how to handle a crisis i think crisis management is the name of the game for companies today. >> what about companies that have not what about companies that have not suspended business that continue to do business there? what would you say to them >> i think they ought to have really good reason for it, becky. you know i think they ought to have a good reason for it >> i know joe's got a question for you, too go ahead >> i do. hey, david yum! h has a lot of operations in china. i wonder how you walk that fine line now and there's the chinese consumer, which i mean i think they should enjoy the benefits

of all the yum brands products, but then again there's things in china that should make a ceo think, wow, i don't want to enable this regime how would you do that? would you just fall back on, well, everybody deserves pizza hut, everybody deserves taco bell >> i think the great news for yum china businesses is we have a fantastic ceo there and her job is to grow the company in china. yum is a chinese company we have a chinese board. it's run by chinese people everybody who works on the ground is obviously chinese, and, you know, their job is to bring pizza hut, taco bell, kfc to the chinese customer and give them a great experience. you know, so i think what i would be doing is basically what

david gibbs, joy watts are doing right now. i would focus on running the business and providing our products to give them the best experience >> i guess the situation would be expanded though if china were to do something like go after taiwan, something along those lines. would it be the same or that be a situation much more similar to what russia is doing to ukraine, or would that be a line too far >> again, it's a big hypothetical i personally don't see that happening. i think china depends very much on the global economy. i know when their leaders wake up every day they're worried about employment and economic growth and, you know, the kind of sanctions that have been levied

on russia would be something that i think that -- >> david, there's certain things china is already doing they don't have to do things worse. i mean if you -- with uyghurs and human rights, you make a decision you saw the nba, they bent over backwards to make sure they didn't ruffle anyone's feathers. and i don't know i heard your answer you want to satisfy -- you know, run a good business over there, but any second thoughts about operating in a country that has that type of human rights record >> well, you know, i think there's problems in every country, and, you know, i -- i don't have any second thoughts about operating in china i mean, i don't agree with a lot of what happens there, but i don't agree with a lot of what happens in a lot of companies. if they get exaggerated like

they are in situations like right now what's going on in russia and ukraine, of course it takes you down a path you don't want to go down. >> david, coke got some criticism. they were all too quick to exit, you know, georgia and atlanta and where it didn't really cost them anything and make comments about that but, you know, totally silent on when things were happening in china. it's tough for ceos to decide where to make a stand and where not to make a stand. >> i agree my opinion when i was ceo i stayed out of politics i didn't make any political statements -- >> i tried to get you into it. >> you tried but i tried to stay out. i tried to focus on running the business, and i think that's what ceos are doing today. i think every ceo in this country i'm sure a great patriot, okay? and they're just trying to navigate their business and figure out what's best for

everybody. and it varies. so, you know, i can't really make judgment on anybody else because i think that's basically, you know, a situation that only they know best, and you can opine on whether somebody got in or out too early. that's not really the way i look at it. >> definitely a difficult time for managers everywhere. good to see you. >> thank you, becky, i appreciate it. coming up former sec chair jay clayton on a new proposal by his formeragy that would require u.s. companies to disclose climate related risks. he says it's overreach before we head to a break let's get a check on the markets the s&p up slightly, and dow is up about 150 this hour regaining yesterday's losses

nasdaq up about 15 points. "squawk box" will be right back. plus some of the lowest options in futures contract prices around. [ding] get e*trade and start trading today. ♪ ♪ 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

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welcome back to "squawk box," everybody. in our headlines this morning shares of nike are higher in premarket trading. nike expected projected better

than expected growth this quarter and the company says it was able to navigate supply chain issues that stock right now up by 6%. of course that's a dow component. going right now you've got shares of okta it is investigating reports of a digital breach thousands of companies use okta software to try to manage their networks hackers actually posted screen shots from okta's internal network that security experts say appear to be authentic and that stock down right now about 7.3% then you've got apple services they're back online after a monday afternoon outage. more than 20 services went off-line including the apple app store, apple music and tv plus in addition that outage kept employees working from home off-line, and it caused issues in apple's retail stores as well you have to wonder if any of this is a precursor what's to

come if the russians are actually considering a cyber attack as the administration has suggested. when we come back the king of the mountain may be toppled roman's megamansion could be seized by the u.s. government. that story is next "squawk box" will be right back. . each day looks different than the last. but whatever work becomes, the world works with servicenow. ♪ ♪ nice suits, you butguys blend right in.es, the world needs you back. i'm retired greg, you know this. people are taking financial advice from memes. [baby spits out milk] i'll get my onesies®. ♪ “baby one more time” by britney spears ♪ e*trade now from morgan stanley.

at the top of wild catamounten in aspen sits a 14,000 square foot megamansion owned by russian oligarch roman abramovich but if the u.s. slaps sanctions on the russian oligarch it could be seized. i guess it won't be a fire sale. we won't end up getting this are we, the possibility? >> no, we're not, joe. somebody might, though the global hunt for oligarchs assets may soon turn to aspen and over $60 million worth of real estate there. roman has been sanctioned by the eu, u.k., australia and canada they have frozen his assets and barred him from traveling to those countries. sources telling me the white house may add into the list in

the coming weeks, so that would add him to the u.s. sanctions list if they do the first asset they would likely freeze would be his trophy property near aspen, colorado now, he owns two homes there one is a 14,000 square foot modern glass mega home on #00 acres right next to aspen he bought the property in 2008 for $36.5 million. expanded underground and with soaring prices in aspen brokers tell me right now it would likely sell for well over $50 million today. he also owns a second home that is a 5,500 square foot ski in, ski out villa just down the road he bought for $12 million the same year. ee probably uses that as a ski house. both properties remain in his name that is highly unusual in fact, they're believed to be the only properties owned by a

sanctioned oligarch in the u.s. that haven't been transferred or are owned by an anonymous shell company. because they are in his name the feds would likely be able to freeze them almost immediately it's unclear what's going to happen to these properties buyers already circling now. that's because supply of listings in aspen is down over 60% over the past year and, joe, the average sale price in aspen right now over $13 million for a single-family home back to you. >> i don't -- that's got to be near the top 13 million, that's unheard of. >> it's a record, all-time record >> it's got to be. >> palm beach is a little higher palm beach right now i think the average is over 20 million, but next to palm beach average aspen is by far the highest in the country. >> perfect all right, thanks, robert. >> robert, quick question. did i hear that right, that this

is the only property that any of the russian oligarchs actually have in their own name, and we still haven't even seized this one? so what good are any of these ideas that we're going to seize all this property if, "a," they've already changed them out of their names, they're owned by shell companies. it's going to be much more difficult to track and even the ones that haven't been transferred, we're not going to take those? is that a bunch of talk? >> right now it is and that's because abramovich has not been sanctioned as soon as they're sanctioned they will because they're in his name it doesn't mean the government can't eventually freeze them but they have to go through a long process to prove the shell companies are owned by the oligarchs or that transfer was not a real transfer and they're owned by the oligarch. doesn't mean they can't, it's just going to take a while with

the other assets these will be immediate. still to come the sec proposing some new rules that would require businesses to report climate risks we're going to talk to the agency's former chairman jay clayton for his tech pretty good one in the journal today, lead editorial. plus maryland, the first state to pause its gas tax governor larry hogan, oh, a current picture, how nice -- joins us in the next hour to explain. "squawk box" is right back insty delivers quality candidates matching your job description. visit indeed.com/hire ♪ ♪ maconnecting to opportunityon. is just part of the hustle. ♪ ♪ opportunity is using data to create a competitive advantage. ♪ ♪

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the sec rolling out a new proposal that would require u.s. companies to disclose climate related risks. the chair gary genzler joined cnbc yesterday to discuss the rule >> what we have is hundreds if not thousands of companies already making disclosures and yet those disclosures are fragmented and following different standards. we have a role to bring in some consistency and comparability. materiality is a really important concept. >> joining us now with his response, genzler's predecessor,

former sec fed chair jay clayton. and jay has called the rule an overreach, maybe more strident language in the journal today. genzler stages a climate coup. that's the lead in the sec chairman is doing black rock is doing bidding on the left right now there's no standardization, so he would like to see everybody reporting the stuff the same way as if that's even remotely possible given the complexity of the issue and especially the way they're approaching it where it wouldn't just be the company but anyone who supplies the company, and even once people use your product, the customers, you've got to know about the emissions that you're somehow going to be generating the logistical nightmare in and of itself boggles the mind in terms of what it would take in

terms of time and expense. i'm sure the big four accounting firms are like, wow, this is amazing. but they couldn't get any closer to reality than where it is right now. >> well, look, joe, thanks for having me. i want to say i'm sympathetic to the position gergenzler is in trying to respond to calls for more standardization here. but you hit the nail on the head, which is in order to have what i would say is a standardized approach or a common approach you have to have a climate policy to begin with now, we have a climate policy today, and companies are doing i think a very good job if you look at the disclosure of public companies of addressing what that climate policy means for them but there's a movement afoot and, you know, i'm sympathetic to some of the voices here that say we need to do more but we don't have a set climate policy in this country we don't have carbon neutral

2050 or something else as a climate policy and so what the sec is doing here is in essence assuming a climate policy because it's picking which metrics are important and which ones aren't. and you can't do that unless you assume what the climate policy is that's not the sec's role. that's as simply as i can put it and you put a super background obit when i said look at all the complexities that need to go into what your climate policy is going to be. not to mention national defense and our place on the world stage. >> shis a another attempt i mean a back doorway of allocating more capital again or that's the way it would be used it was voted for 3-1 the three democrats voted in favor of it. there's no way this passes muster with the court. back in 2015 there was something

similar, wasn't nearly as nutso as this, and that didn't even pass this is not the sec's purview not even in the craziest sense of the word. >> and that's what we said in the op-ed we put in the journal yesterday. this is a step on the way to the courthouse, and i think there's not really a rational analyst that doesn't see it that way there are two points around authority and expertise here one is does the sec have the authority to pick the metric of course the people at the commission are some of the best people i've ever met they do an incredible job, but they're not climate scientists, okay and then the question is stat statutorily do they have any basis on doing this. >> no, it's congress

>> but i'm just thinking exxon i could see, you might have a chance maybe with their suppliers, maybe with their customers. but pick an average companies, a consumer goods company, how is -- whomever, how are they supposed to look at a normal company's business and figure out the material climate impact of what they do, what their supply chain issues coming from the far -- wherever they get everything what that's going to mean and how the customers are going to impact. there's no way no wonder it's not standardized. it's impossible to do. >> i think david novak who i was talking to a lot was on and said something about sanctions. he said every country has to approach this differently. if you're sending goods, sending

textiles, sneakers or something it's pretty easy to deal with that you stop shipping your sneakers, do what you can for your employees and everything for every company that, doing what you can for your employees, they still have to get paid. >> i mean this would be expensive and cumbersome, and it's kind of ironic we've been having the discussion about, you know, russia being somewhat emboldened by europe's acquiescence for providing its own energy, sort of given up on nuclear, giving up on other things and now we come to -- we don't want that to happen domestically, but you saw the executive order the bidesen administration put out in january 2020 on climate.

it basically -- i mean the overall-purpose of it is to make it less likely you bring hydrocarbons out or at least you price it higher so you hurry the transit. this is coming right in the face of what wave been talking about for the past three weeks it's amazing the hubris. >> joe, let me just say this if you're going to have a whole of government approach the place to have it is grs acongress ande white house. >> rightinstead of this -- >> it's kind of that simple. >> i don't know. all it does is just sort of cause a lot of controversy, but it doesn't really -- nothing really changes and itdoesn't really accomplish anything >> and i mean, look, patrick and i said this. and i'm not going to hide the ball on this it's easy for congress to push these hard questions to agencies because they can say, hey, look, i'm doing something here, i'm banging on the sec and very sympathetic to the secphobes

responding to it it is a political pass >> we had the executive order and possibly the fed needs to get involved you know, sarah bloom raskin, so that was a going to be a back door approach to trying to i don't know control the marketplace instead of just -- instead of just make sure the marketplace is fair and open it's a way of actually allocating capital >> let me go to that, joe, because you raise a -- we've done incredibly well in the economy, in the banking sector, the capital market sector. i tried to make the dialogue between companies and investors fair, open, honest, you know, enforceable, but we've done everything we can not to put our thumb on the scale of capital allocation and because i think if you start doing that, you undermine all

those other key tenants. you know, it is for -- it is for investors on the one hand and companies on the other to have that dialogue to make those capital allocation choices if the governor wants to make capital allocation choices we've got the tax code the tax code is how you do it across the board for public companies, private companies, foreign companies, et cetera if you want to allocate capital you have the tax code. >> we're watching crypto and guns, those efforts there and stuff. and, you know, i had to commend them on some of that, but i've got to be honest this makes me think, wow, i'm not sure what to think. >> i think gary is doing a fabulous job on a lot of stuff i just think this is one of those things that's outside their authority and jurisdiction and i'm not alone in that. >> no, i guess not i try not to show where i come down on these things anyway, thank you, jay clayton

good to have you on. anything else going on you wanted to talk about today but you wrote an op-ed, there's another one today, so this is good stuff we'll talk about something else next time hopefully. >> oh, joe, that's you trying not to show how you think about these things you did such a good job. >> my first question was almost on a scale of 1 to 10 there's bonkers down here and absolutely nutso bonkers up here. where would you put that this is like an 11 >> i heard anyway, when we come back we have much more on the markets and what you need to know above the opening bell and plus the latest on the crash of a boeing 78 jlir cna "squawk box" will be right back.

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let's get a check how the markets are setup this morning the s&p indicated higher by about 100 points the s&p fell about 200 yesterday. it's gaining most of that back in premarket nasdaq was down about 55 yesterday a small gain so far. treasury adding to their gains in yield you see the ten year note there close to 234, shorter term

moving much faster, the two year yield 2.2% at some point this morning. federal chair jay powell vowed to fight inflation powal suggested rate increases could be even higher if necessary than the quarter percentage point move approved at the last meeting. >> if we conclude it is appropriate to move more aggressively by raising a federal funds rate by more than 25 basis point at a meeting or meetings or we will do so. and if we determine we need to tighten into a restrictive stance we'll do that as well >> we'll talk markets and hear from noah blackstein after the break about remarks and atwh investors should be doing with their portfolio. "squawk box" will be right back. ♪ look at me ♪ c'mon. ♪ here i am ♪

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visit findyourindependentadvisor.com stock markets now with noah blackstein, senior portfolio manager at dynamic funds i'm glad to vhave your

perspective here on what does and doesn't matter for growth stocks i see you're with me on this idea higher interest rates themselves don't really explain the stronger story with the boom we've seen so far. what do you think mostly has been driving things? we had this massive relative peak in growth back in november. it's been a tough four months. >> it's certainly been a tough four months. i think this narrative growing stocks are somehow intrasensitive and the higher rates grow the worse it is for growth stocks, but it's been true since the fourth quarter of 2016 but it's been a positive correlation, a lot of science experiments, a lot of absolutely atrocious things thrown into spacks but i think that shakeout has

happened, and typically growth stocks have had a positive correlation door interest rates and a stronger economy so i know there's a narrative going around that the higher rates go, the higher the discount rate is and that means growth stocks are worth less that's an answer you can expect from a first year business student and even worse perhaps even one of their professors fundamentally, it isn't true and seemingly intelligent people have reiterated it so i'm not sure where it comes from what matters most is the strength and determine oiation f that earnings growth and the economy remains to this point anyway fairly strong >> where does that leave you in terms of just looking for stocks either that have been way too punished of stuff to stay away from and average pull back is close to 50% from higher up. >> look, i've been running the

same fund since the late 1990s what's gotten me through every bear market i've been through is companies with actual revenues and earnings are the first place to start having said that there's obviously a big surge in work from home stocks, for example. but there were companies that were trading a year and a half ago so i would say continue to focus in on the secular names with revenue and earnings, but there's so much carnage with other stuff with actually pretty good companies and especially the ones 50 times earnings and don't look at it actually if you look at it now it's trading at 25 times earnings inasmuch of those stocks have been absolutely decimated so i always start with revenue earnings in companies continuing to grow

>> you did one of the interesting aspects of this environment and nominal u.s. growth has been higher than anyone's ever seen and that's just the top line for your average company in some sense, right so if every other basic nongrowth business is able to post pretty good top line growth does that mean those typical growth stocks are going to stay in the penalty box because i can just go and buy cyclicales right now? >> sure. and i think that's what was going on if you look at what i think was the bigger driver you had these companies that were able to go through the pandemic and fast forward a year later and everyone is growing at high rates. and that abundance of growth which is certainly out there isn't going to be the same as the year over year comparison from 2021.

so i think it could be the number of companies that are going to be able to execute and grow at those high rates is going to continue to get slimmer as we move forward i'm not forecasting a recession. obviously we're always looking at the shape of the yield curve and credit spreads to give us an indication of that but to see the fed this aggressive and the yield curve flatten this much and continue to see people buy deep cyclicls certainly is something i've never seen before. >> you would think it's going to become a less generous environment. good to speak with you it's now two minutes after 8:00 a.m. in new york. you're watching "squawk box. i'm joe kernen along with becky quick and mike santoli and futures were positive in the green. yesterday not much to speak of a headlines this morning canadian

pacific railway resuming this morning after company and workers resolve an arbitration an a labor dispute the railway is part of supply chains in u.s. and canada had halted operations and lock out workers over the weekend another labor dispute is taking place at a chevron california refinery for the oil company a major producer of gasoline and jet fuel more than 500 members of the united steel workers union has gone on strike after the plan was rejected, however the plant continues to operate normally. and nike shares are higher this morning after the footwear maker reported better than expected profit although it is seeing higher freight and logistics costs, and they specifically mentioned north america for the good

results. got an audio issue there becky was saying the wreckage of the china eastern airlines flight carrying 132 people we want to get back to phil lebeau who joins us with 24 hours later on what we know. >> we don't know a whole lot there, joe we expect to get back to authorities in china on the crash site, an update if you will we're expecting that any minute now. no survivors are expected from this crash i hate to be the bearer of bad news but when you take a look what this crash was and the plane at the steep level of impact, nobody is expected to have survived black boxes have not yet been recovered. the ntsb is assisting in the investigation. china will lead the investigation, but as isusual

protocol whenever there's an accident with u.s. aircraft overseas that country does the investigation, ntsb assists. the 737 ng planes are 26% of the china eastern fleet. unclear how long they'll be grounded for if this is just for a few days or for a week will remain boo be seen but for boeing this is huge deal because china is the largest market for the 737-800 planes. they really are the bread and butter plane, if you will, that boeing has delivered over the last 25 years. it has a strong safety record. we talked about this yesterday, and this will continue to be a theme this is one of the safest airplanes in commercial aviation as you take a look at shares of boeing keep in mind there's the other story here which is what impact this crash may have on the 737 max returning to service in china. it's been cleared by regulators

there to resume commercial flights though no airlineshave put it back in service yet and we still have not seen a 737 max delivered to china, and that's what we're going on three years now. there's a number of them that are parked out in eastern washington that have been built that are ready to be delivered, but those deliveries have not yet resumed. so a lot of questions that need to be answered i'm not sure how much we're going to get from the authorities when they hold their press conference here in the next few minutes in china, but we'll be watching it and let you know what they have to say >> phil, thank you we'll look for you in the updates. >> shares of alibaba jumping in hong kong overnight. eunice yoon joins us with more on that move hi, eunice >> hi, mike. alibaba shares closed higher by 11% and this is after it unveiled an expansion of its program.

this makes it alibaba's largest ever am the repurchase program is going to be effective for the next two years, and this is the second time the e-commerce giant raises buy backs in a year, the last hike of $5 billion took place last august. the deputy ceo said the upsized buy back is meant to reflect what he said as well as worries about the slowing growth of the government here has been trying to shift the concerns in the stock markets, trying to improve the negative sentiment today the front page of the official securities daily ran a commentary that said beijing would be proactive to support stable market development. it would correct policies that hurt market expectations and that it believes stable foreign

investment is the only way to achieve high quality growth. now, again, this is the latest effort by beijing to try to signal tothe market that the priority here is stability guys >> yeah, eunice, that $25 billion buy back authorization, it's pretty significant given the size of the company at this point after the decline it's more than 8% of alibaba's market cap before this latest move. does is say anything you think about chinese authorities message about how these companies should be thinking in general about allocating capital? in other words is market stabe l alizations helping their program expened globally more than anywhere else? >> i think that market sabli stabilization is the priority. there were several analysts who said this buy back share thing is probably a good thing for

alibaba and it may not be a good opportunity for it to expand, make good investments and do everything it's doing to broaden out the empire the government continuously, this is the third time now where you heard from two very high level officials, the premiere this week, the vice premiere last week where they're really trying to hammer home stability is very, very important at this stage for the capital markets, for the leadership here. >> seems like china put a bottom in that market, might have worked, eunice thank you very much. when we come back disney facing employee backlash for the company's response to florida's controversial don't say gay bill we'll have the latest on that conflict next. plus maryland governor larry hogan on why his state decided to speusnd its gas tax stay tuned you're watching "squawk box," and this is cnbc

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another write off. that's a foul! what kind of call is that!? definitely “not” watching basketball. not us. i wouldn't do that. welcome back to "squawk box" on cnbc. disney is trying to address employee frustration over its handling of florida's so-called don't say gay bill, but today some workers are planning a walk out.

julia borstin joins us now with the latest >> in a virtual meeting yesterday disney's ceo acknowledged missteps and announced new plans to help address that employee frustration. he said he wanted to use this moment as a catalyst for meaningful change in in addition to working with those of fighting the florida bill and pausing donations in florida he announced three new steps the company is taking. goingon a listening tour to hear employee concerns around the world. he announced a new company wide task force to develop strategy and concrete actions to engage lgbtq plus employees and creators to be a force of good for those communities with a special focus on developing more lgbtq plus content he also revealed that the company has signed the human rights campaign opposing the texas policy that criminalizes parents providing gender affirming care for transgender minors now, these moves address many of

the demands of the group that organized the walk out scheduled for this morning those demands include requesting that disney cease donations to politicians involved with the bill, commit to an actionable plan and reaffirm the commitment to protecting lgbtq plus staff now, sources tell me that the temperature, the level of outrage at the company has cooled since last week as employees see disney engaging with these issues. mike >> julia, in fact i was going to ask that if the employees who are upset and may be leading these walk outs, are there things incremental beyond what he's committed to in terms of engaging with these issues they're specifically looking for from management? >> look, i think we'll learn more today and very interesting to see how many people walk out.

this meeting is going longer than the 90 minutes planned for it and very emotional. the one thing i heard from a number of people they brought in a lot of outside experts, people who are in florida, who are dealing with these issues and fighting these types of bills similar to the don't say gay bill around the country and also they're really listening to their employees now. this they've all told me is just the first step now the question is what does disney do next, what does this task force look like and what are the next steps to make sure disney follows through on the conversations and promises it's made in the past week or so? so it seems like this is a valuable first step, but the question is what is the action that follows >> what's the future of disney's longer-term political engagement in florida which has been very extensive, of course, over the years. thank you very much. >> joining us now to talk about these latest challenges for

disney and how much lost in this fight. just reading one of your pieces that's about a week old. you say it outright. you think bob was trying to pivot to the center from the perception disney was too far left and this was a miscalculation that backfired. >> i think it's pretty clear it backfire because of everything we've seen over the past week and the fact he literally had to flip-flop on the issue and come out against a bill that they had decided to not take a position on and caused a firestorm and this is a narrative that's been created around bob chapek, he's

been sort of tone-deaf to the issues important not only to the employees but to the talent successful to the company. >> since it's been a week since your piece has he pivoted back to the point where is it possible for him to do damage in your view? whether it's still as front and center as it was a week ago, do you think it's working, these initiatives? >> i think these staeps are a positive change. the first and most important he apologized to employees on the position he took i think julia is exactly right it's going to be proof in the pudding what they actually do on these issues going forward because the entire company is now watching every step he makes, and it's going to be, you know, a gradual but i think a positive thing for him to engage directly on these issues because

everyone is watching, and he's got a year this is a ceo whose contract is up in february of next year, and if you can't fix these morale issues and these perception issues within the company and outside, he's got a real problem. >> sarah, what have you -- in terms of the last week or so, what are your comments on the whole situation? >> well, one, it's notable this is florida this is a state where disney has i think, you know, 80,000 employees. many of them are lgbtq, and so it's going to have to deal with these types of political issues moving forward with ron desantis as governor. you know, this is an opportunity for him to elevate his own political cashe ahead of a potential 2024 run this is the first time bob chapec is running into this but it's not going to be the loss. there's some whiplash happening right now with disney employees.

you had bob iger, an open democrat, someone considering a presidential run as a progressive. he took swift action in response to lot of these political situations you think back to his handling of the janel hill controversy. now as matt has reported so well that the company is looking to shift a little further into the center, i think it's going to have to reckon with how that move can impact internal morale and the big picture here is one piece of politics but think around the world you have russia who were the first studio to pull out and china. he's going to have figure out how to manage all these controversies going forward seemingly as the company ceo >> and matt you actually had

some anecdoteal knowledge i gu guess. how did that go? what was that like can you describe that? >> it was his chief communications officer i was actually randomly having dinner with jeff who runs communications now for disney and is one of the architects behind this shift politically and he'd actually never met bob iger, and we were sitting at a restaurant and they were having dinner a few tables away and they met chatted cordially and very nice. iger i think could see what was coming with this controversy, and he very deftly had navigated a number of controversies for disney in his tenure, and, you know, disney is different. it's not like other companies.

people have an emotional connection to this brand they plan their entire family vacation around going to this brand so you have to really trend carefully when you are taking positions in the world because people look at what disney does, and they feel what they do. >> well, then chapek hired this guy, right how do you think it happened do you think the new communication were up -- do you think he advised chapek to move to the center. >> i think so. you have to ask them exactly how the conversation went, but it's very clear both chapek and his communication chief jeff morale, they have made contributions to the past two republicans and the chief of staff at disney

also comes from conservative politics of the bush administration so the kind of brain trust around bob chapek is a more conservative brain trust than, you know, what the previous ceo bob iger, which is fine. the previous communications head for disney also had background in politics. it doesn't mean they can't successfully manage it means they need to be very cause nizant of reading the room and knowing when you are a create chb company with, you know, 200,000 employees you have to be cognizant of the lgbtq issues and the fact people at this company feel very strongly about these issues, and they've been trained to expect that the ceo will speak out because of what bob iger did over 15 years so i think they perhaps learned their lesson here. we'll see how it goes moving

forward, but i think it was a real wakeup call >> we're not really talking about florida or legislatures, and we didn't really talk about georgia and i guess we don't talk about texas and the legislature there. all these laws were passed voters there have the ability to change things, and i know i -- we talk about all the companies and their reaction to the votes in these different states. it's kind of strange because it's one step removed from the people that are actually involved with passing these laws >> something major happened during the pandemic, though, which is that there was a huge shift in america where people started to place more of their societal trust in corporations and business leaders as opposed to government. if you take a look at who handled the vaccine rollout, it was private companies. it wasn't the government as a result there's more

pressure on ceos nowadays to address political issues amid various states as they come. now, if you're a company like disney and matt just smoke to this, and you have an employee base of thousands of people who either are lgbtq or allies of the lgbtq community, you are almost forced to ally with them in many of these situations or at risk of losing talent look at disney right now they're trying to compete with some of the biggest tech companies in the world when it comes to streaming and creative talent they're can't afford to lose these people because they're not going to speak out issues in the correct manner if you take at look at pixar's response they even opened up a new can of worms they said we don't think you guys are letting us represent our lgbtq voices in our own creative unless you want to open that can of worms with your employees you have to take a firm stand on these social issues. and if you decide not to, be

prepared to have backlash on your talent pool, and that could impact you long-term >> eventually affects the company in a big way matt, it wasn't in there they should put rhymes with phony in the notes, they should and it wasn't there. so i apologize >> no problem. >> anyway, thank you both. >> there you go. or axios anyway, when you come back the company whose covid drugs it claims are close to working on almost any variant we'll bring you that good news story next plus we'll be speaking with maryland governor larry hogan about his state pausing its gas tax to give drivers some relief at the pump. stay tuned you're watching "squawk box" and this is cnbc

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some news on the covid front. despite omicron fading in the united states a new bion tech company is pushing for more drugs. >> the goal is to develop better drugs for covid right now including working at potential future variants but also to develop drugs for future

potential pandemic threats it's the combination for antibody drugs that the group has developed with some scientists from switzerland that they're going to be testing for covid prevention they have preclinical or animal data it's not yet peer reviewed but they say it's very promising with what else is already out there. the team is very familiar to pandemic preparedness and to the bion tech space. and the architect of the original pandemic plan in the united states under the george w. bush administration the executive chair bion tech vc is the founding investor of this company along with f prime capital. we talked with the doctor yesterday about this promising set of antibody drugs and what they see in them

here's what he said. >> what we try today do with these antibodies is look at all the ways that a situation could arise that makes the antibodies ineffective and say what's the likelihood that's going to happen and if it happens are we likely to see those variants or strains emerge in nature so far we haven't been able to see that, and so it gives us hope this could be useful for near-term variants arising from omicron or from delta. >> so of course, guys, we've seen how quickly these rate antibody drugs can be wiped out by a surprising new variant. they say based on their data now they don't expect that to happen at least on the near term. and they expect a pretty quick development way through trials and into the market. >> if you're talk about a

pandemic that has waned at least in the u.s. as best as we can tell, if you're talking about some funds starting to run out for testing in other places that have been there, this seems like a really important plan. we all know covid is not going away, but who's spending on it, and who's willing to put up the cash right now >> that was exactly my question, becky. when we're at a place where congress is at a stalemate for providing a response is now the right time to start a company based on these threats, and they acknowledged they will need government funding to support these kind of endeavors. obviously they're getting funding from the space right now and pursuing partnerships from manufacturing and things like that, but it requires society and governments coming together and agreeing we need to keep investing in these kinds of threats but it's going a be interesting to watch how wall street and government and other kinds of public health funders respond to an initiative like

this >> seems like it requires us being better prepared than we were in the past even when it's kind of spelled outright in front of s coming up fed chair jay powell vowing tough action on inflation. what does that mean for the big financial stocks in your portfolio? we're going to speak with a banking analyst. next we're going to have a gas tax suspension in maryland first place. will that make a difference for drivers struggling with higher fuel pries we're going to ask maryland governor lryar hogan he just signed some legislation into law stay tuned you're watching "squawk box" on cnbc until nurtec odt changed all that. nurtec is the only medication that can treat & prevent my migraines. don't take if allergic to nurtec. the most common side effects were nausea, stomach pain, and indigestion. now, i run a non-profit for other green berets. when i feel like myself, i can do so much more.

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maryland is the first state in the nation to pause its gas tax. as fuel costs have surged nationwide governor larry hogan signed emergency legislation on friday to ease consumers pain at the pump i should say. georgia has also announced a gas tax holiday, and more than a dozen states could follow. joining us right now is governor larry hogan ofmaryland governor, thank you for being here this morning. this was bipartisan legislation.

why did you all go ahead with this move? >> well, we saw the pain at the pump with the rapidly rising prices everyone in the country was seeing, and we decided we wanted to take some urgent, immediate action and this all came together really quickly within a week of calling our legislature to act they passed unanimously in both houses here ipmaryland instead of arguing just who to blame for it we decided to take immediate action to do something about it. >> it makes sense and i suppose every little bit helps, but obviously there are some people asking some questions what this might mean some critics have pointed out for the average marylander who drived about 12,000 miles a year they're only going to be saving about $15 over the coursef of this 30 day savings. that does mean the state is going to have about $100 million

shortfall so i guess it gets to the point are you robbing peter to pay paul if you have to make up the difference elsewhere? the averagecost around the country is $4.25 and we're cheaper than most. and i had people all weekend all over the state thanking me because they saw the difference if they put 10 or 20 gallons in their tank and got # ce50 centsa gallon, it was a pretty big deal to them. we had $3.6 billion in our rainy day fund and a triple bond rating we could afford to do this it's not going to take any money away from important programs and not going to take anything away from our infrastructure, which the gas tax is supposed to pay for. we're improving infrastructure

all across the state on every priority project >> i'm sure it is. my point is i guess if there are other states end up using covid relief funds, would you have a problem with it? >> i don't know what other states are considering i just now know we proposed this, signed it into law that day or that friday, and immediately gas prices came down dramatically and people were very happy about it. it's obviously just a short-term fix -- >> and you all are doing what you can to help obviously, but there are some big problem here. what would you like to see happen on a federal level because the federal gas tax has

not been suspended yet >> i think the biggest issue we've got to provide for america's independence and increase production here at home and so we're not so reliant on foreign countries for our oil. and i was one of 24 governors who signed a letter to president biden calling for just that, to, you know, rapidly change position and increase production so we can solve this on a long-term basis. >> governor, let's talk a bit about cyber security president biden warning yesterday that russia is prepared for cyber attacks on the united states. i know it's something he is calling on companies to make sure they're shoring up resources, but i assume as governor of the state you're looking at things too. i know the department from

health was and these attacks are stepping up. how prepared are you, and what are you seeing on this point >> it's a serious problem we're watching closely they're going after not just large companies and, you know, our critical infrastructure, but every federal and state essentially across the country and it's something to be concerned about. we're home to the nsa and u.s. cyber command and we're very focus on that. anne newburgher who made the announcement yesterday and i can tell you our whole team is focused on it. the threats are real and we've been talking long time about russia's capabilities i cutting

off his financial supply, taking dramatic actions against them, i think he's going to retaliate and we've got to be prepared for it >> how safe do you feel at this point and how safe should the average citizen feel >> i think we're doing everything to keep us safe, all our security agencies are working on it. but i'm not convinced they won't be able to get through you remember the colonial pipeline they shutdown on the east coast was a major problem we've had attacks in different places and i think they've made some pretty serious threats and we're aware of them and going to try to provide the best defense we can >> one of the things we've been talking about this morning is the fed's move to say it will raise interest rates and do whatever it needs it be done to tackle inflation consumers seem to be very flush,

businesses seem to be very flush, but obviously everyone is were ed about what comes with inflation and things like higher gas prices when you're kind of looking out across the horizon, what doia see on the taxes your state is taking in and where do you advice from where you sit where things look? >> so your company is booming and we've got the fourth best economy in america inflation is an issue. our revenues are up dramatically so it puts the state in better fiscal shape but the cost to consumers are going up, which is why we've been like we did on the emergency gas tax legislation, this week we're trying to finalize eliminating our retirement taxes to ease the burdenen folks that are on a fixed income and cut taxes eight

years in a row but i think inflation is a major concern. there's no question about that and it affects, you know, individuals and businesses and state governments as well. >> it's funny to have such a flush economy and having consumers feel on edge what's coming next and businesses, too. it's a different time we're entering thank you for your time today. >> yeah, thank you very much all right, coming up, jim kramer's first take on the trading day ahead and why today is such a big day for tesla. and mike mayo brings us his take on financial stocks now it seems fed chair jay powell is getting more hawkish don't go anywhere. "squawk box" will be right back.

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down to the new york stock exchange jim cramer joins us now. we tried to take the nike results, jim, and extrapolate to whether it's everywhere. so in north america it's great i said it and was kind of kidding. i go people are running in their nikes to catch a plane that has no empty seats to go to a hotel where they can't get a room to try to book at a table at a restaurant that doesn't have any openings is that an economy we're looking

at in north america right now. >> that's why to get ahead of all this we say to fed powell go to 100 basis points next week. the nike call is extraordinary and on every single line and what's incredible is the separation they have from everybody else they continually talk about how there isn't anyone in their university and it was a very true the stock up is up 6 i don't want to say up 10 because i don't trust the rest of the market. i think the litany used to describe is the litany a lot of people hay which they want to slow down. i understand the 50 and 50 and i suggest it could be 50, 50, 50 because i'm ahead of the curve. >> i guess here we are in the west and you've got, jim, every

day we realize how good we've got it sometimes i feel fwaelt we're going life is great and going on and waching that happen. i wonder whether that's okay, just what it is. it's a world away but just really bad >> i was explaining about something in my life to someone and the person said, look, you could be huddled in a basement in kyiv and here you are complaining about -- >> is it about faber >> i think faber has a better time than i do when he goes away >> he can do that. >> but i feel guilty >> i do, i do.

how can life go on >> how can we name the generals? >> never get into another western country ever they can stay there and see how that works out >> i went to jeperal names we have them, let's print them >> how about this, i saw this posited by a former defense official, that even if pultin does say, okay, we're not going any further, the sanctions kmev come off >> and he was the best writer about the mill and he was in the marines. i just get the sense when biden goes to poland unless he gives us the names of the generals and

steps up the seizing of the oligarchs mansion and, man, was that place hideous but let's go after the jgenerals >> i mean, we have real genera let's just -- give me the names. >> maybe like four fewer of those guys or five fewer thanks to some of the ukrainians, which -- >> we know the generals destroyed. they just destroyed grosvney we know who did it >> jim, thanks we'll see you in a couple minutes. we want to remind you about the new cnbc investment club you can find out more about cnbc.com/join the club point your phone at the code on the screen it's magic magic mike, it will take you there. "squawk box" will be right back.

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tesla will officially begin delivering its model y cross over utility vehicles from its newest giga factory outside berlin, and the timing couldn't be better. phil lebeau joins us now once

again. phil, good to see you. >> hi, becky a big day for tesla and the folks in germany as tesla opens giga berlin. it's been open for a while in terms of pre-production. but today is officially the beginning of deliveries. and this will be important because this plant will be supplying tesla model y's and other vehicle in the future to the european market. they've been supplying those vehicles so far out of their plant in shanghai. that will free up capacity there. and as you take a look at what's happening with tesla in terms of its capacity, think of what's coming on. this is a big year 2022. giga berlin is opening now and you've got giga texas opening next month here's their annual delivery supposed to hit 1.42 million this year, up considerably from the 936,000 last year. but in terms of capacity, look, they're adding berlin today, giga texas next month, and production will be focused primarily on the model y

i can't wait to see what the numbers are in terms of model y delivery this year it is rapidly moving up the list of most popular vehicles in the world in terms of overall sales. they'll be near the top for 2022 again, this is a plant that is critical as tesla continues to expand because in the past they've been supplying vehicles built in china, shipping them over to europe, and that was not a sustainable model in terms of growing sales. now they can ramp up sales in europe with giga berlin opening. mike >> phil, thank you very much as we've been telling you this morning, fed chair jay powell vowing to get tough on invasion. central bank chief telling economic conference yesterday inflation is much too high and that the fed would take necessary steps to address it. this is particularly important news for the big banks joining us now, mike mayo, senior analyst at wells fargo. mike, the rate story seems to be working in bank's favor. the stocks kind of lagging a little bit what's your read on that should we be concerned what the market is saying about the

fortunes for this economic cycle or is it an opportunity? >> it's a great opportunity to own bank stocks. look, the single most important factor for banks right now is the recovery from the pandemic and we expect the best main street banking growth since the 1980s. you have record cash, and that includes record deposits, sticky deposits, higher interest rates. maybe we get 11 rate hikes through next year. and growing loans. business loans, commercial real estate, really amazing credit card spend so you get cash plus rates plus loans, and you get the best growth since, you know, almost any of us were in the business mike, i don't think you were in the business becky wasn't in the business maybe joe was in the business, but not since we were all wearing neon and watching wall street that's a great backdrop for bank stocks and our number one pick,

bank of america with more revenue growth and higher spreads. >> mike, even though it's been debunked that the treasury yield curve is very important for bank's earnings, it seems like it's still a story line. it seems like the stocks maybe trade a little bit worse when we're looking at a flat curve right now. is there a way out of that >> well, we do look at the two ten spreads, the spread between the two-year treasury, the ten year treasury. it's gone from 70 basis points all the way down to a little bit less than 20 basis pointsas we speak. and that's one indicator for the potential for a recession. so the playbook is if we go into recession, sell bank stocks. number one, that just ignores the de-risking that's taken place. bank of america used to have 25% subprime loans now it's down to like 4% so first of all, they're much more resilient second, you know, our house view is we're not going into recession. and third, the ten year treasury

yield is somewhat, you know, manipulated due to the actions by the fed the true, the pure ten-year treasury yield could be as much as 100 basis points higher so monitoring the two ten spreads for the risk of a recession is not as relevant as before so we think the stocks have sold off on concerns about bad loans at banks, and right now loan quality banks remains really good might go from great to just good, but times are good for banks, and i'm really surprised with the ten-year yield going up as much as it has that the bank stocks have not caught up. eventually i think you'll see the better earnings through the course of this year, more after the first quarter. so it's definitely an opportunity. >> you know, what you say about the safety of banks, they have more capital, they have fewer riskier loans. does that not also restrain the returns they can return? we're talking about a ton of

reserves on their balance sheets >> what's under appreciated structurally -- you know i talked about this on your show -- is the tech revolution at banks means the industry is trending toward the best efficiency in history. and it's not just that top line growth which you get through higher interest rates. it's the incremental profit margin on every dlooollar of new revenues is better than expected that's one reason we're so much above consensus, again for example, bank of america >> mike, great to talk to you. thanks very much >> thanks for having me. >> wall street is 87 also 82, zack mayo doing well, 85 years old >> sergeant in that movie. >> still got the oscar, still got the oscar. yes, he does he's 6'4". final check -- mayo. final check on the markets see, you can work with me on this you know these things.

>> movies are pretty good. >> up 167 points, 25 off on the nasdaq you, too, becky. we'll get by we'll be back tomorrow make sure you join us. yeah wind beneath my wings. that's beaches make sure you join us tomorrow "squawk on the street" is next good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber has the morning off. equities hanging in there after powell's speech on monday. one of the worst days for bonds on monday. selling continues today. ten year yield 220, we have more fed speak on the way road map begins with fed chair powell's fight against inflation saying a rate hike above 25 basis points is on the table nike jumping on a quarterly beat while navigating some of the supply chain issues. an