philly thank you. final check on the markets we're down now almost exactly 100 points we'll see what happens as the session goes it has to do with oil and interest rates and the yield curve. >> this was fun. if we got both sides of everything come on. >> we did. make sure you join us tomorrow and do it again with becky good wednesday morning welcome to sk"squawk on the street." i'm carl quintanilla with jim cramer the kremlin down plays any notion of the cease-fire talks the vix below 20 road map begins with some recession risks. the bond market sounding the alarm and a stark warning from the ceo of restoration hardware. apple is eyeing a $3 trillion market cap once again

and micron rally on the optimistic guide we'll talk to sanjay in a few moments. we'll start with the markets and recession risks. this is what rh ceo gary freedman had to say about the fed and inflation on the company's earnings call. >> i wonder if anybody picked up the phone and called what do you think is happening with the inflation these are business that's will make less money or raise their prices i don't think anybody really understands how high prices will go everywhere in restaurants, cars -- everything and, you know, i think it's going to outrun the consumer and i think, you know, we're

going to be in some tricky space. >> it's actually part of a much longer almost bizarre answer in which he references the big short and all kinds -- bottom line, jim, he said it's the toughest guide since '08 or '09. >> right it was rambling man conference call i love gary. he's talking about look, it's kind of like the rich not like you or me. he talks about who can afford the stuff. now i'll say he did say that business has fallen off pretty dramatically since the war again. there's a component which basically i could have said he said that rich people are worried about being the atomic bomb so they're holding back but what he mainly is talking about, and he's been talking about it for a long time and done a lot about it. the stuff jay powell which is, you know, we have to find a way to cut things. i think if people called jay, he

would say everything you said i know i'm doing my best. it's hard to stop. one thing gary has, he caters to the ultra rich the ultra rich are doing quite well so he introduced a new look for a yacht. he's introducing a place in london that i'm trying to get into that is a gorgeous mansion museum i think he's going to do fine. he gave a three for one split. i bet he buys. i bet he buys stock. >> he's going to sell some >> yeah. through the options. >> yeah. >> i think he can do it so that in the end he's longer than we thought. >> yeah. >> jeffreys comes to hr's defense today. the 50% called the multiples expensive. moderation and luxury real estate baked in. march datasuggests million dollar homes are not doomed. their target is 560. >> yeah. i like that. i find he's doing the steel

places in san francisco he's got the guest houses in new york he's doing amazing things. i actually tried to get, i mean, you can rent these yachts. he's saying this is the way it looks. overall what i thought of the conference call, i think that gary was upset upset by the last few weeks and how he was doing i wish gary had been less rambling he's a fabulous ceo. i think you can distill what he said about the cliff notes. >> yeah. three for one split as we continue to be on split watch. >> yeah. if he called powell, wouldn't be the answer be i can raise rates but how will it affect -- >> if you raise rates, the business will do poorly. he references are yellen four

times and powell twice he should call yellen first. he was hard on yellen in the call i think gary is upset about what you're talking about we can't control -- mccormack, the spice company was on last night, and talking about trucks. we can't control trucks. and some of the things with the ports and trucks seem attractable. things are going up. i was talking to jason i don't know if you know him he's been doing amazing stuff. >> yeah. it's about my restaurant i'm now transferring but it'll be a later story everything is up 30% and i just don't know if would be such a knuckle head to open up a restaurant now. it's too expensive unless you have skin then you can tell some of the suppliers to stick it. >> you think there's emphasis on chipotle and yum. >> they can talk to suppliers

and say, listen, that is not going through. when you've got your party $300 or $400. that's basics, small to amaze -- medium size business say i'm not taking that then go elsewhere. you can't charge $9 for beer everybody is bumping up against the door dash problem. people are stayinghome we're in a market that says there's a lot of opportunity i don't care what they said. i think gary will be right. >> it reminds me of what ed said last night distillable market downside might have been 4200. upside he thinks 5,000 range

next year. 5,000 to 6,000 >> yeah. you retweeted that if you were to do wilson i would go with area key knee. >> really? >> absolutely. >> by the way, part of our delivering alpha investor survey, there was a question about the biggest threat to the market is. number one answer federal reserve misstep. followed by inflation, jim then russian aggression. then china and resurgence of covid. he's been denigrated for way too long i'm not worried about him at all. i am concerned about the idea that we thought that the russians were done with kyiv when what they did was the exact same thing they decided to destroy chechnya that was the russian republic.

they said, listen, we'll back off. then they just let the women and children go and level the city i don't like what we did with fallujah except we were the good guys. >> brett stevens today at the times argues what if putin did not miscalculation. >> i thought it was a fabulous piece. >> the whole idea to get control of the energy-rich part of eastern ukraine. it's what may happen still. >> right i thought that piece is a must read i really truly believe that people don't understand other than zelenskyy that the russians have been adistricted to artillery since 1942 it works for them. tanks not as much. when you have artillery and the other side doesn't have the ability to spot it or bomb it, then it's unassailable you can lob missiles from now to kingdom come after putin's finish with it, the u.n. voted it the most levelled city in the world i didn't know they had that particular nomenclature.

there was nothing left. >> yeah. and then today zelenskyy is on the tape suggesting that russia will be sending in new forces. there's a lot of skeptics among them how do they do that given some of the broken supply chains? i'm surprised the general petraeus has not studied what happened in world war ii they always have more divisions. hitler misunderstood the divisions. stalin explained the divisions he knew he had more than other people it's not $101. it's whatever he wants to one. putin is able to conscript the nation. >> yeah. jim was skeptical yesterday. >> yeah. when we come back, micron's chief on the better than expected guidance lifting his company's stock. a lot of talk about data center. comments from taiwan semi, as well, about consumer electronics beginning to slow, perhaps we'll talk to sanjay about that in a moment.

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protect every connected device. on the largest, fastest, reliable network with speeds up to 10 gigs to the most small businesses. so you can be ready for what's next. get started with internet and voice for $64.99 a month. and ask how to add securityedge™. or, ask how to get up to an $800 prepaid card. shares of micron are trading higher this morning. i love these numbers joining us now is micron's ceo you've delivers again. what is going on here? >> hello, jim. great to be on yourshow. micron delivered an excellent

quarter. our team clearly executed well in the face of pandemic-related supply chain challenges. we delivered a strong results. and as well as enterprise and desk top pcs and we are having strong momentum in the technology execution. technology leadership. and it's positioning us to guide. an we've some revenues and beyond on the delivering a record year for the company and our fiscal year' 22with robust profitability. >> i know we can talk about data center growth 60%. you were doing enterprise. but you know what they want to focus on whatever is wrong let's focus on pc for a moment they are not that great. i can focus on enterprise versus

pc and say your stocks should be sold i think that's incorrect can you help explain to people, you know, more than a pc chip maker? >> first of all, jim absolutely it's many end markets from data center to smartphone to pc to automotive to industrial and pc strong demand transfer -- in the hybrid work and the return to the office not actually doing well. and keep in mind that's a favorable mix for us because those are content obligations for pc enterprise pc and desk top pc require more to be in storage. and one of the fastest growth markets. and hundreds expected to be introduced globally. those are like data center it's going up 15 times from standards. and think about it

19 million or so it's six times higher. it drives strong content growth, as well. >> you've become the leader in trying to get our country to be competitive when it comes to building plants here yesterday the senate passed $52 billion. could you reconcile and get it done right now >> i think it is really important that we -- between senate and house investment tax is important, as well these are needed to bridge the gap with what has been going on. u.s. needs to catch up we will catch up with chips.

these will support the growth of semimanufacturing which is essential. we learned from covid how important to have resilient domestic supply chain. micron, of course, we have manufacturing here in the u.s. i couldn't to support the biden administration and the bipartisan coalition on capitol hill in terms of driving for passage of chips and investment tax credits. micron announced last year we're investing over $150 billion over the course of the decade

as we look at second half of the decade demand to bring more semime conductor and only u.s. supply and storage i think we are well poised to continue to assure rust leadership in semiconductors. >> production is important but so are raw materials you gave some reassuring comment about saying the supply of neon out of ukraine is that more at risk now the longer this conflict has gone on >> we highlighted that we had some supply coming from the region we have a -- number of supply base from asia and other parts of europe as well as from the u.s. of course, we work with the suppliers to assure supply chain continue we have done a good job in terms of diversifying the supply base

over the last few years. we have long-term with them as well as strong inventory in place. razz ♪ed by many others in the industry and it's a common challenge to everybody inflation related as well as the pandemic related and russia and ukraine the costs are going up with respect to many however, micron, we believe, will outpace the semiconductor industry in terms of cost reductions because of our leadership today we're several quarters ahead of many in the industry in rampings up into production these most advanced technologies. that position says we're -- leadership not this year but the road map we are well positioned in the future, as well

the new products and solutions at the data center space wells other markets. we believe we are well poised for growth. >> i thought you gave us an optimistic outlook about the whole industry in terms of supply chain problems. after i finished your con fence call i said maybe some of the areas we keep hearing the auto companies they can't get chips maybe that shortage is getting better am i too optimistic? >> so we do think that all the short annals are getting better. as we move through but we also said in certain parts of the markets, in certain parts of the semiconductor industry and some of the shortages do still continue and we see those continuing into 2023 so all and all, yes, shortages are easing in most areas in some areas, they are still

continuing >>well, okay let's take that out a step further. there are a couple of companies that make the chips. why haven't they broken ground with you why haven't they contacted and got the chips they need. are the companies afrald of something? maybe they put the merchandise in and spend the money there will be a surplus. as the analysts are worried about your deramp? >> well, the industry has, of course, been investing in expanding capacity and increasing production. look at micron of course, being very prudent and making sure that our supply growth is in line with demand growth and we have been successful in continuing to fulfill the requirements of our customers. there are shortages with respect to some of the foundry products

as well as with respect to some analog legacy components those shortages, while improving, still taking bit longer than what we initially thought. industry, of course, continues to make investments. you know it takes awhile before there's production outward because of the long lead times that are there certainly some of the equipment supply -- on getting pushed out, as well. micron has done a great job in managing it. for the year, we see our supply growth will be in line with our product expectations because we have been successful in continuing to manage our technology transition. >> i wish you were up there with pat gelsinger on the state of the union. you're too modest to say you belonged up there too. i want to thank you for coming on "squawk on the street." thank you, sir.

>> thank you, jim. he runs micron and humble winner. >> yeah. we'll watch shares of micron as they open today and we'll get cramer's mad dash and count down to the opening bell. other earnings to get to incl including chewy lulu and more.

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a lot of discussion yesterday about that shot right there. the 210 spread did it, in fact, invert for a

moment looking about nine points as we look at recessionary in the year ahead. opening bell in about five minutes.

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it's time for the mad dash as we count down to the opening bell. >> i have to tell you, carl, i know the chewy ceo -- it will be fun. and the reason it'll be fun. it was a huge miss and we need to find out what is going on i want to caution people at home when you go to the conference call, the company's had almost nothing bad too say. but the companies is losing a lot of money the company is quite confident perhaps the losses are here -- you know, indemmic one of the reasons -- they didn't mention the call. i think it was a big mistake pet smart has come out strong. it's a new dynamic

you need brick and mortar. one of the things about pet smart, they have vets. chewy doesn't. they're online we'll find out chewy reverses this they have to admit there are problems they didn't want to. they talked about one bit of softness and everything else was great. they're losing a lot of money, carl the companies losing a lot of money, they had a good day yesterday. >> it was wider than expected loss sgna up 35 gross margins down. >> then they claim they have the new hub and the fedex deal and claim this and that. the fact is the dogs want in they want pet smart. which you think about that --

[ cheers and applause there's the opening bell. >> wish they pushed sanjay on ai and machine learning his chips work that's nvidia. it's not like he says i think nvidia is a great company but that's their strength.

apple today b of a looks at trade in prices and suggests there's no slow down >> i thought it was terrific report there's more to apple than we used to do i know the stock had a historic run [ cheers and applause when you open up shanghai, people will say wow it looks like they returned they have direct to consumer there, too the people dumping on apple here are kind of saying, wow, you know, i've had a big run maybe it's time for me. >> apple is going for 12 straight wins today. it would tie the longest ever. last time in only time it happened in '03.

by the way on watch for a $3 million market cap at 183 this is a self-effacing man. even if duke wins the tournament i don't think he'll say duke is the best team. whoever duke beats -- that's the way itis i buy the app store. i'm sick and tired of trying to go to it

i bought a british newspaper i couldn't figure out how to do it. >> it's called consumer friction we don't like it. >> yes i'm an app store guy forget it. apple is easy. i did it yesterday my credit card my american express was hacked i'm in an uber $270 to go around the block. and i just put it on apple pay what the hay >> yeah. definitely. >> about you yesterday you said own it don't trade it. >> yes this last two weeks, if you sold in the weakness, the door closed on you almost immediately. >> that is what happens. here is your have what you have. don't lit the door hit you on the way out. the people who don't like apple continue to think it's a hand set story. they don't understand it's a hole listic story. one of the reasons they don't is because some degree of apple said can't you figure it out

yourself is that you and your wife? last i looked, it was a decent idea no no it's got to be me and amy girlfriend i don't have one me and amy children? i like this. what matters they give you a choice like you wouldn't believe. >> right that's what he talks about it means customer satisfaction is great they're number one everywhere in the world. >> we'll wait to see speaking of popular consumer brands lulu guides above billion dollar buy back plans to raise prices on about 10% of the styles. >> no problem.

they have an analyst meeting coming up. i thought it was one of the greatest conference calls that got new styles that are selling immediately. they have no resistance for higher prices. it was a tour deforce conference call they'll talk about it. you know, it was black mirror until now. i think mirror will be good. when the numbers came out, people sold it nine ways to sunday they didn't simply understand what was going on. they shot first and then asked questions later. by the way, robinhood. if they open up longer hours, they'll be short lulu and not wait for mcdonald to talk about the unbelievable spring outlook. that stock can go higher that stock was at 45

it's at 360. i love that conference call. >> yeah. very good after i shot it. >> yeah. almost the highest for the year of lululemon taking you back to the first week of january. >> pvh will not benefit similarly. will they beat when revenue was ahead? >> i don't know. they're so down and out. i'm not sure how bad i don't think it'll go back to the low. i mean, the problem was that it didn't -- tommy hill figure domestically was not that good they also have a problem it's expensive but stephan larson is a man of great history. he's not coming on it's not like many used to come on all the time. i luke to know more about pvh. >> also, one of the most leveraged names, too eastern europe. >> yes, it is. and europe is actually quite good versus the united states. i was surprised the united states was almost as if somehow traded, i mean, macy's is a big play i think macy's is having a good quarter. i found mystifying the united

states was so weak i think that it's time for larson to come on-air. he was a regular. >> yeah. he was a regular i remember i was having dinner with my nephews. my head writer and only writer and many was next to me and started the show i think he was kind of like everybody else blown away by my nephew. he said i think he should come on the show and never missed as soon as he retired, stephen larson i don't know. tommy was up. >> kline was good. i root for them. they are american. i mean -- but, i mean, this is our bellwether as i feel that about rh.

i was upset gary was in a crisis mood don't do that, gary. call me first. i know you had a couple of bad days i want to buy it when it settles. if it's down but rh is going have a huge spring and gary stop talking about, like, when they're goingto -- the mortgage rates have gone up. if you didn't refinance. it's kind of over. the numbers the housing numbers

this is the problem we have. there sitting there and buying more and more land put everything on pause they get hit but jay has it going. and i think one of the things that is most incouraging about my interview with brett smith he's saying we'll have antonymous -- i don't think you'll look at it. if you have antonymous truckers and you have a driver and you

have a trucker next to it. maybe they can extend the hours again. that's really good. >> yeah. maybe. i mean, safety never takes a vacation and i was once on -- i had a guy on msnbc i never like to mention anybody against us i was talking about the in that i own. i said one of the things that happened it cost us was the sprinkler system it cost us a lot the host said you want to cut back on safety no. >> yeah. trucking is maybe one of the hottest. >> it is with a whatever is going on in the ports changed. it's july 1 deadline. >> transports don't seem to mind. >>well, they make, you know,

they can make a lot of money they pay the truckers far less than they make there's a tremendous move by truckers the reason with the large trucking companies get their own insurance and become trucking. they creating their own company and getting under 10. >> yeah. sure a lot of people are more upset what i'm upset about is the cost of food is so high it only gets worse ukraine/russia a humanitarian. we can't supply enough of that gas. but you know ge has not gotten

that he has to make it -- gotten pressure on compensation and came back. >> right pat is a great guy the stock was at 62. it's at 52 it's a big run he has one of the biggest pay packages he's honest and earnest. does it suggest that comp remains broken >> no. it remains broken and they couldn't get anybody good because the company was run into the ground by the previous ceos. this is just a company that was once great company

it's painful look at it, you have a great company. look at nvidia look what they're doing. they're crushing everybody else. that's how you get to 700 million. i'm not insulting it the largest investor they are not who we think they are. and i have to tell you that pat gelsinger. it's a terrific time for him to come on, which i love, go sit down with dihedra and john of fort knox and say i was paid too much it's time to give back maybe give back to ukraine to the refugees. >> yeah.

if the stock was up 10 i wouldn't be talking like this. >> the stock is down 17. he was up 24. >> yeah. i would call that suboptimal you mentioned disney yesterday on the heels of that park presentation a couple of notes out of wells and b of a they raised their numbers. >> right jessica reiterates by 191. they are doing it with limited cruise capacity of capacity. >>yeah you get a price reduction in disney plus. >> shareholder loyalty >> yeah. when they do the shareholder loyalty, you'll see the stocks play do you get long-term

individuals. what is the reluctance to do this it's not good enough i'll tell you. business is, too you want to give loyalty where loyalty is deserved. okay talk to ulta anybody who has the app. i get things i have no desire for. like on my birthday. they giveaway the store. come on, disney! and the ongoing gait about broad or focussed ordinary row. >> right very dark and unfamily like. it shows me that jane is expanding. >> right. >> he made that gaffe. he took it back. a lot of people had a change of

heart. i think it was well attended and amy travel trust owns it this is your chance to get on board and i'll thank you and congratulate you we'll get to bob. >> a down day here after a big momentum the last two weeks. essentially back to being slaves to oil oil at 108 guess what we have oil stocks moving. metal stocks are moving. also moving to the outside metals moving to the upside. tech kind of flattish. cathie wood had a rare down day. it's a rocket ship for her arkk is up dramatically in the last two weeks but up today. new high list looks like the

old. we had a smattering of new names. we're back to energy stocks. pioneer, valero, marathon. new highs there. i mentioned this big momentum. it has been quite a rocket ship in the last two weeks. since the close on the 14th. the 15th we've had up 11% on the s&p. up nine of the past 11 days. and the last hours have been remarkable we closed at or near the highs for the day. nine out of 11 days. the last hour has been a rocket ship a lot of momentum. this looks like momentum people coming in. it's been interesting to watch this look what has been moving. it's basically a lot of tech names and consumer discretionary in the last couple of u weeks. arc innovation it's 33% consumer discretionary

the market is holding up because the economy will hold up it's simple. we're end the quarter here 234ur78s are holding up. the rest of the year two, three, and four the analysts have been raising their estimates recently zwroefr all for 23022. up about 8% these companies are gushing money and trying to figure out how to return it to shareholders dividend or buy backs, for example.

there's a few sectors seeing their earnings coming down airlines and hotels. some of the retailers. you saw some of the comments today with them. amazon, meta, you know, so keep an eye on the numbers here as far as what we see for the second and third quarters, there is a divergence of opinion where are you on the growth slowdown it will be the major question. there are people who think we are. they're trying to argue the numbers should be lower for the second and third quarter other people say it's not. it's essentially taxes on food and energycosts. there's a lot of confusion how reliable second and third quarterest mafts are now back to you. >> thank you for that. quick reminder, always get in on the cnbc investing club

with jim we got final gdp for q4 this 6.9, not far from the prior estimate final core pce was 5 they did mark down personal consumption to 2.5 from a pyre 3.1 and and the ten-year is around 2.4 be right back.

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[ kimberly ] i feel so much better. i feel energized to go outside and play with my daughter. i can ate anything. like, i don't have to worry. clearchoice changed my life. very busy day in the energy complex. we're going to get a house hearing on gas prices later on opec plus tomorrow we'll get some ventinventory nur and the ability to wean from russian supply but for now crude back up to 108.40. we'll continue in just a moment. don't go away.

jim, what is tonight. >> we have paychex and then chafive sookie realized we have more naturalized gas and i think he'll tell us what is going on worldwide. he knows everything. >> you did include it in names

that you favored. >> he was one poin the highest paid ceo but he made a ton of money. he should not have given it back but i'll applaud pat gel singer and then i think nathan does the upgrade, but when they do my affinity plan, this will fly. >> it began right here. >> it doesn't have to be invented by them. >> we'll see you tonight jim at "mad money" at 6:00 p.m. dow is green, despite the chatter about the inversion and with oil higher. vix though back to below 19. esg into your investments? at pgim, the pursuit is on for outperformance. as active investors, to outdeliver with customized strategies, integrating esg best practices into our investment decisions. as asset managers and fiduciaries, to outserve, with our commitment to better esg outcomes.

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good wednesday morning, welcome to another hour of squawk on the street david faber is on signment a lot of chatter about the curve inversion between twos and tens. we got close yesterday but for now the market in a period of stasis the dow is up about 50 points and we're holding on to 4627. >> we're 30 minutes into the trading session. here are three big movers. we'll start with lululemon

while q4 revenue missed expectations, the ath-leisure brand beet on earnings and announcing a $1 billion stock buyback program and you could see shares are up about 8% right now. different story for chewy, which is sinking double-digits right now after falling short of estimates. swinging to a loss amid higher costs. the pet store disappointing sales for the current quarter and the shares are down 13%. plus norfolk southern, those shares are chugging higher after the freight railroad will repurchase $10 billion worth of stock. shares are up 1% but they're up 13% in march and now just down about 2% on the year speaking to some of the action in zwgeneral, we've seen transports as of late. >> we'll start with markets this morning an the impact yields are having on stocks yesterday the two ten spread did

hit sear steve liesman joins us. >> a good amount of debris about whether it is sending the recession signal or if there is so much out there distorting the bond yield and the curve and that is just not the reliable indicator that it previously was. hit zero yesterday not crossing the inversion or the zero line and setting off recession calls and declarations that all is well or not lost. the spread is now positive, does that say about four basis points and now it is just like four right there. anyway, really close right now anyway, citi said to the contrary, move was in reaction to positive geopolitical developments and accompanied by a rise in equity prices. among the distortions out there there are treasury buying or purchases in flight to safety

trades with the russian invasion of ukraine that depressed before they came off and the fed is only this month stopped adding new treasuries to its portfolio. but joe from natixis, he said flat curves have always predicted weaker economic activity while inverted curves have always received recession and jay powell have suggested that looking at the nearer term spread, those more closely tied to the time period you're trying to forecast over the next several years, does a better job. this focuses on the three-month two-year spread and that is positive at 181 basis points so that suggests either strong growth or at least a fed continuing to hike guys >> so steve, presumably fed officials have been anticipating we could see something like this take place as it tightens. what does this do to the plans around the balance sheet >> i think the fed will go ahead and at least let some of the balance sheet run off.

i don't think -- i think they see that as part of their primary objective right now, morgan, which is to battle inflation and so taking out stimulus from the economy which the fed believes is intrenched in the buying of assets and then in the size of the portfolio that it has. it will let that run off at least to some extent, i believe in the summer along with raising rates. probably quite strongly over the next couple of months. >> steve liesman, thank you. as we keep an eye on that basically flat yield curve turning to the broader markets where it is a mixed picture. the dow is up 55 and the s&p is down, 4628.5 the level and the nasdaq also in the red and apple shares are just about flat, going for 12 straight day of gains if we could see that reverse. that would tie its longer ever win streak also turning positive on the year this week joining us now interactive brokers and timber hill head

trader steve sosnick it is quite a reversal for the broader markets in the last couple of weeks but for the mega cap tech names like apple and tesla, like amazon your take on why we're seeing that now and the role that institutional money is playing as we come to the end of the quarter. >> good morning, morgan. i think that institutions realize just before the fed meeting that they had really gotten underinvested in a big way. they had been selling partially because of fed -- potential for fed movement, partially because of the geopolitical situation, and so they've been -- i believe they've been raising cash. individual investors have been resolute about trying to buy the dip the whole way and just before the fed meeting we saw a turn and i believe that they continue to -- they continue to do the bond selling, which we see interest rates have continued to rise throughout but i think instead of deploying that into cash, they took the

cash that they had on their books and started to invest it in stocks and they're still selling bonds and buying stocks into quarter end the timing is very interesting here because today is sort of the first breather we've had in a while and if you wanted to have your books showing that you were long a lot of equity, you have to buy them yesterday because settlement date, that is the last date for settlement day in march. so it is critical to see if the theory that we saw was institutional asset allocation into the mega cap those are the easiest to buy, whether that continues or not. >> which raises the question as we do get to april and we get to a new quarter. where you're not going to see the rebalancing and this positioning. but you are in fact going to get earnings which perhaps have never been more crucial given the fact that you do have a fed tightening and these macro challenges and uncertainties as well what are you looking for as that starts to unfold >> i think it is going to be very critical to see how the

market reacts to disappointment. i think they're going to take good earnings in stride. it was talked about on earlier programs that the market is looking for good earnings growth and that is going to continue, up 5 to 7%, et cetera. but we think about what happened in previous quarters to growth stocks that stopped growing. like at meta or facebook after earnings the market was punishing growth stocks that were not growing at the pace that they were accustomed to.y becomes the key. it is hard to predict in advance which companies will disappoint. and that requires a crystal ball but that to me is really going to be the trigger. if there is disappointment, how does the market deal with them they're not dealing well with chewy today which may be a harbinger that the punishment of

stocks that are not growing at the right pace may continue. >> as far as earnings guidance goes as we work into earnings season, we're not doing great on the ratio of positive to negative preannouncements. there was a period where the market was sort of in trouble where the thinking was why would anybody guide high when they're unlikely to be rewarded for it in the tape. but i wonder if that situation is changed now, if companies could be a little aspirational on the guide for the year, or at least the quarter? >> that is the multi-billion dollars question i do think that it behoves company management to overpromise and ubd underdeliver and failure has dire consequences so i think that -- i think companies will have probably a decent chance of beating reported estimates then let's see what they say afterwards and even though, the market can

be quite forgiving to certain types of misses. think about lulu today where the revenue was a shortfall but they like the earnings and the guidance so it is a very mixed bag. i think right now in general, you're going to have to be a lot more selective coming into earnings season. and you're going to have the potential for a lot more potholes because just the guidance is so -- is so flexible right now with the lack of transparency that a lot of companies have into the economy, into the supply chain and et cetera. >> so whether you're talking about the potential inversion of a yield curve and whether that is signaling recession on the one hand or the stark reversal and even i dare say complacency being reflected in the vix right now, do we know yet whether this rebound is for real or whether it is a bear market rally. what are you looking for to signal that? >> that is a great question, morgan i can't say that we -- that we're not in the midst of a bear market rally yet i do think some of it, as i

alluded to earlier, we'll see over the next couple of days , f we continue so see the institutional push higher, i would say that we may have formed a real bottom if it sort of peters out and we just continue to see what i would call the low quality stocks lead, the flight to crap as it were in some of the cases of stocks that don't make money leading the way, that could be a real warning sign. and so, you know, the change in sentiment, as you alluded to at the vix, is remarkable the idea of going from solidly above 30 to below 20 in two weeks and with the shape of the vix curve inverting, i'm sorry reverting to normal from a steep inversion, these are massive psychological changes. and i don't know that we've seen the sort of economic change required to really make that a lasting psychological change

that will keep the bull market going higher so, it is really -- this is a very crucial time in deciding whether to be selling the rip or continuing to see a further advance. we'll know in a few days i think. >> more questions than answers steve sosnick, thank you for joining us. >> thank you. as we go to break this morning, let's look at the road map for the rest of the hour including europe's energy warning. why germany said the gas rationing could be in the future. >> and will a fourth shot provide a second dose of gains for investors. we'll talk potential biotech buying opportunities. plus we're watching apple, trying to make the 12th positive session in a row not succeeding so far yet. but squawk on the street is just getting started to stay with us.

we do think that overall the shortages aregetting better as we move through calendar year '22 but we also said that in certain parts of the markets, in certain parts of the semiconductor industry, and some of the shortages do still continue and we see those continuing into 2023 so overall, yes, shortages are easing in most areas but in some areas they are still continuing and continue to challenge the industry into 2023 as well. >> that is micron with us last hour on the chip shortage. talking a lot about, morgan,

data center which is now eclipsed mobile as the market and they do guide q3 revenue above even as he did say they have managed to diversify like neon of which ukraine is a huge provider to the world. >> i homed in on that when you asked him, say they do have some supply from the ukraine region but the supply chain sources that they've efforted over the years and that means to make chips and bring costs down over the long-term as well. also worth noting that pricing improve add cross the company's product portfolio and as you mentioned, 5g and electric vehicles higher adoption of driver demand all playing a role in these earnings numbers and the results we saw shares of micron are up 3% right now but very wide-ranging interview.

carl, some interesting commentary on the senate bill just passed for $52 billion in funding toward more u.s. production which we've been talking about for the better part of a year now. >> unlike tj rogers on our show yesterday who said the industry needs to handle it on its own. meanwhile, let's turn to the vaccine makers biontech did top profit for q4 and guidance for the year, pharma stocks you could see mixed following the fda approval of the second booster for people over 50. and the immunocompromised. joining us is louis chen, whether the guidanceond the prospects of those of us over 50 mean anything for the revenue trajectory right now. >> my view is it probably doesn't to pfizer and other vairk makers out there because i think it is a smaller subsect of the population and folded into the guidance they've given for 2022. >> is that because, i mean there

is a long debate about some argue the data that the u.s. has right now, about booster efficacy, we're relying on israeli data do you expect more transactional friction because of that, more hesitancy? >> i don't necessarily think so. i think the israeli data has been the basis for a lot of decisions that have been made and i think the data is good i don't think that will create vaccine hesitancy. but we'll see more u.s. data, more so on some of the omicron variants that the companies are working on to provide data for. >> i realize we get getting more and more boosters approved, here in the u.s. and we're still in flux where some of the data is concerned. but the fact that we have seen other companies start to come to market with other vaccine possibilities, are those going to, i guess, take on more weight now within the market place given the fact that perhaps you only have to get one or two shots instead of maybe four. >> yeah. i think that they will

i think over time you're going to see vaccines during cough, cold season and during flu season that will incorporate pcv, the flu, as well as covid going forward and i think that is what the companies are working on and that is more cost efficient. >> and i'm looking at the names that you analyze you have buy ratings on everything is this sector just for sale right now. >> i think the sector is really interesting. i think what the street is pol missing is the innovation and covid has taught these companies from a collaborate perspective and get drugs to market to treat important diseases in the space. so i do think a lot of companies are undervalued and you can't just look at the pe because it doesn't take into account the wave of innovation coming into 2025 and beyond. >> we talk about seeing around corners. these are really sharp corners

in public health you're also pretty, i would argue, bullish on therapeutics and oral anti-virals, which we hope are going to be a bigger part of our lives as we deal with this. but what do you think availability will be like and pricing going into the second half of the year >> yeah. i think going into the second half of the year, availability is much more widespread and we're going to have more data on this in a prophylactic population so i think it will get more widely used and then also during cough and cold season there may be surges but the prices is pretty much already set but right now it is higher in higher income, such as the united states, about $700 for a course of treatment and then in lower income nations it will be lower priced similar to what we see >> and finally morgan mentioned your host to buy ratings do you have a favorite this point? >> yeah. i think that -- one my favorites is actually j&j

we think that the company is interesting both from a valuation perspective and from the perspective that they're separating out their consumer health care business and they'll have a pharmaceutical and med tech business going forward and the acceleration growth of those franchises are still under-appreciated on the street. >> 4% gain on the year as a lot of large company values have done very well fascinating. w we'll see what the coming months brings. >> looking for themes in health care right now cnbc healthy returns is happening today. featuring ceo's of walgreens and johnson and johnson and much, much more. to check it out, go to cnbcevents.com we'll be right back. you guys blend right in. the world needs you back. i'm retired greg, you know this. people have their money just sitting around

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as the president proposed this new billionaires tax, is might encourage some companies to go private. robert frank taking a look at that today >> good morning, carl. well the billionaire tax would apply to households worth $100 million or more but it applies differently to

owners of public and private companies. now the liquid wealthy, or those whose wealth is mainly held in tradeable assets like stock, they would have to pay the tax every year of up to 20% on the unrealized gains so even if they never sold the stock, they would pay that tax every year on the increase in the stock wealth the value would be mark to market at the end of every year. now the illiquid wealthy or owners of private businesses or property, they do not have to pay every year they could defer the tax until the business or asset is sold. the white house saying this is all aimed at helping family businesses manage the tax without being forced to sell and there is an interest charge that owners would have to pay when they do sell but tax advisers say that over time this amounts to a substantial tax break for private company owners and could lead more companies to actually go private or maybe fewer private companies to eventually go public. it could also incentivize big

stock investors to move more money into real estate and art and less liquid and easily valued assets. experts say there could be large disputes over private companies and the valuations between the irs and the owners, because these things are hard to value unless you have a publicly traded stock guys >> this is a thicket of tricky questions for which there are probably no quick and easy answers. i mean, it raises the question, robert, how likely is this to actually find its way through congress or is it going to be dead upon arrival, especially in a midterm election year? >> well senator joe manchin is a deciding vote. he's already thrown some cold water on it. saying look you can't tax what you don't have an unrealized gain is not income, it is paper wealth, so therefore it can't be taxed. we'll see. this is similar to a plan that senator wyden has proposed but

it is hard to see this at least getting through the senate. >> robert thank, thank you. let's look at the etf spotlight. it is time for that now. we're taking a look at xrt that is down nearly 10% on the year it is under pressure again this year down about 1.5%. underperforming the s&p about 7% year-to-date five below, sales coming in below forecast the discount retailer saying it expects sales to fall in the current quarter as well. you could see those shares are down about 2.5%. another name to watch is rh. those shares are down 12%. revenue missed though profit did come in better than expected the home furnishings offering a three for one stock split. oil rebounding and why germany is warning of a possible gas shortage stay with us

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i'm leslie picker and here is your cnbc update at this hour ukrainian officials say attacks continue in the city including this local market. the attacks come hours after moscow pledged to scale back its military operations in those areas. ukraine's defense ministry said it has seen no mass withdrawal of troops. united nations said more than 4 million refugees have fled ukraine. about 2.3 have entered poland, another 6.5 million are believed to be displaced within their own country. and a nasa astronaut has set a new record for the longef time in space mark vander hei is back on the ground after 355 days on the international space station. he caught a russian ride back to earth along with two cosmonauts.

and susan collins will be the first republican senator to back ketanji jackson brown and ensuring she will become the first black woman on the highest court. morgan, back over to you. >> he traveled more than 150 million miles on that record-setting space flight. that is pretty cool. thank you. germany warning they could be facing a natural gas crisis as brian sullivan is looking at the energy moves >> there is a lot going on germany warning about a possible rationing of natural gas none yet they're just kind of prepping the population that it might happen it all comes because there is worries that russia could slow down or cut off gas flows over lack of payment in rubles. russia is asking to be paid in russian rubles, not in euros or dollars. the g-7 rejecting that idea but putin is trying to hold firm so what is going on now is kind

of a stage one warning in germany, they're monitoring the storage levels but they're also asking citizens to be smart with usage. turn down the thermostat, wear a sweater. about half of germany's houses heat with natural gas and it is a huge industrial power souse. right now russian gas is flowing to germany and europe. they simply haveto take the gas. it about 40% to 50% of the power source and those natural gas prices, by the way, they're rising again on this payments fight. right now spot natural gas is going to cost you about 120 euros per megawatt hour and that is up $35 u.s. for gas and we pay about $5 for natural gas here that spike in natural gas cost as long with the wind not blowing as much as they, is causing electricity prices to surge. reporting power cost have hit an all-time high, as much as $250 per megawatt hour.

what does that mean. last year it cost about 50 euros for megawatt hour so prices in march, in europe, were five times higher than a year ago it is also about five to six times what we pay here on average in the united states these costs are pushing through electricity generation and supply chains. that is going to crush european manufacturers. look at that producer prices in germany rose 25% year-over-year that is the long-term average of 3% and keep in mind, much of that was before the spike caused by the war. that is february's numbers here is the question will companies just have to shut off production because it will cost more to make something when they could sell it for we're already seeing things like fertilizer and chemical companies, why cf and mosaic stock have been soaring. you wonder if it will hit other

industries that have to spend a lot on power and like vw and renault and loreal have been hit hard and by the way, want to feel better about living in the united states. parts of europe right now, guys, are starting to see gasoline, not natural gas, but gasoline, petroll and diesel,

[ technical difficulties ] wind turbines, and koshon fiber an plastics, morgan. >> brian sullivan, you're real -- it is incredible what you're laying out and of course the repercussions of this aren't just european manufactures but multinational european manufacturers it lays out the case for higher very quickly rising risk of recession in europe and how that could ripple out. brian sullivan, thank you. let's get a check in the broader markets. dow is down 83 points and s&p still holding above 4300 joining us today charles schwab

jeff client and jeff sapporo jeff, if you could put the last couple of week news perspective. we're hovering near our december levels, even though the fed is pivoted hard and mortgage rates have skyrocketed and the ukrainian situation is threatening energy and commodity supply why has that happened. >> sentiment has shifted on the sanctions we're likely to see as they impact businesses in a major way, are maybe now behind us markets are beginning to focus less on the volatility on the geopolitical side and more on the earnings picture so far we have not seen much in the way of revisions global companies are still expecting to see solid earnings growth this year with maybe positives in energy and materials sectors offsetting the weakness elsewhere but no matter where you look, even in the emerge markets we're looking at expectations for earnings growth and not declined

and some have seen a boost on the higher commodity prices. there was canada and latin america and have seen higher earnings and the market is focus on that fundamental back drop. >> that is anyich where you want to buy into. do you think it will radfy the balance that we've seen. >> that is quite a possibility so you know, one area that we've been looking at is the tech sector a lot of that in the past month, what woe've seen is momentum. you have apple turning positive for the year, microsoft turning positive for the year. a lot of these companies that we saw pull back quite staggerly over the ukraine/russia conflict, some has happened with the fed in raising rates and how much is priced in and a lot of that has also been a little bit of a cease-fire talk so i do think it could be buying and you mentioned volatility index is down under 20 now and i think it will become

comfortable. a lot of my clients have asked, do we stop investing and how do we get back into the situation now that we feel more comfortable so i think the sentime sentiment from smaller retailers is more acceptable i wonder where we're at as far as the pace of the rebound you mentioned the s&p, ten-day in the green you look at the pace, some questions about bear market rally. so you have to be careful but we do think it is a kind of a positive picture right now, carl >> jeff, when it comes to investing you just heard the report from brian sullivan and what is happening in europe. is it a steer clear for investors until we see how all of this continues to shake out >> well, i'm watching it closely. but so far i've been impressed with the resilience in europe. even if you look at germany, consumers know that the challenge to wean themselves off russian energy over the next fine months before we get the next peak demand season and we're seeing open table dining reservations up in germany over

the last four weeks, we're seeing movie-goers, and weekend box office numbers are strong and driving and traffic is strong with higher gas prices. we're not seeing the signs of economic deterioration that mayor consumer sentiment has pointed to and we're not seeing that in terms of earnings revisions. so i'm favorable on the european outlook despite the headline risks tied to the dependence on russian energy. >> the part i keep coming back to is that if you're an investor focused on fundamentals, the wed behinds that everyone was focused on in january and that elicited here in the u.s., are they not stronger today? >> i definitely think they are one of the things that was mentioned was the consumer sentiment. we do have a strong economy where we're looking at consumer sentiment. wages have increases employment is down so those sentiments are stronger today. so if that is in my mind that the underlying economy, the fundamentals are stronger. so some of the head winds that are starting to clearup, is no

sentiment where you're thinking of if the headwinds are clearing up and we have a stronger underlying economy, you should be looking at situations where you like those certain securities so they are stronger we think that it bodes well for someone with dollar cost averages or buying in this current environment, morgan. >> certainly a lot of chop, there is no question about that as we look at some of the laggards this morning. thanks, guys appreciate it. >> thanks. >> my pleasure. >> after the break, the treasury department warning to crypto exchanges. bitcoin positive on the year but down this morning. stay with us

what we want to make very clear to cryptoism changes, to financial institutions to individuals, to anyone who may be in a position to help russia take advantage and evade our sanctions, we will hold you accountable. we will come and we will find

you. >> that was deputy u.s. treasury secretary wally on cnbc europe as washington continues to fight back against russia's ability to skirt sanctions by using digital assets meantime senator warren and others are looking to punish anyone who aid sanctions with digital assets joining us sheila warren, also from the world economic forum. great to have you back on show i do want to get your reaction to the deputy treasury s.eecrety and we're hearing talk about sanctions and keeping an eye on russians where they are concerned, are we seeing actions on the ground in russia that would be using cryptocurrencies to evade sanctions >> good morning, morgan. we're not. it is really interesting to see this rhetoric coming out of washington right now because there really isn't evidence that anybody in russia

is using crypto to evade sanctions. or for illicit purposes. if anything the evidence is quite strongly in the other direction. the ukrainians are using crypto to basically fund humanitarian assistance and crowd source, crowd fund their defense in this situation. >> why is this become such a talking point then, at least among politicians? is this a situation where you have current or former employees of a centralized government who are just in general critical right now or maybe misinformed on something that is a decentralized platform >> well i'm not here to speak to motivations but i do think there are folks who have been looking for a way to vilify crypto and this is serving as something that they could talk about that gets a lot of hits, right. so nobody wants to be on the wrong side of this crisis. nobody wants to be supporting illicit activity that is true for the crypto industry but where the allegations are made, even though the data doesn't prove it is happening, they become a talking point,

right. so, again, not to speak to motivations of anyone, but i find it very interesting given the evident of what is happening. >> meantime, the action in bitcoin and other cryptocurrencies in recent weeks, i guess what would you chalk that up to and does it speak to the fact that what we're seeing play out on the the ground in eastern europe is perhaps offering a realtime, real life use case for some of these assets. >> i think that is exactly right. we this the ukrainian president administer the government itself calling this an economic breakthrough in this situation i don't know what more validation you need of the incredible utility of this particular asset class during times of crisis which is something that i think as people in the community have always been saying in a crypto industry, what happens when things go off the rails. well now we're seeing it and seeing that this is a truly necessary part of putting up a defense. >> it certainly the uses, the use cases both good and bad, seem to have turned some heads i would argue in the last couple

of weeks, i'm thinking about larry fink's letter to shareholders in recent weeks, just arguing that it is probably accelerated the use and the industry is going to counts on those nefarious means being held in check by regulations somehow, right? >> well i think that is right. i think there is a lot of self regulation happening here so anybody who watched the recent hearing it is important to understand how much information and activity is already happened in the industry to ensure that these kind of illicit activities can't be done. so there is analytics firms and track and trace that you could do using block chain technology. we are in a world where we almost say, look come and try it because we're going to catch you an the industryis going to catch you. so i do think that that is right. i think there is a lot of understanding now that when it comes to the different use cases, here is one that is just kind of blown up and shown tremendous value but it the not the first time. it is just that the

ukraine/russia crisis is getting more air play than other instances. >> i wonder if i asked you a year ago if we would have had an executive order from the white house, the likes of which we had last couple of weeks, if we would have the irs basically bake in income pretty seamlessly into tax filing. the s.e.c. guidance on crypto getting a lit more granular. has that happened faster or slower than you would have thought. >> i would have said sure, let's hope for the best. and even i with the frame, i was very pleasantly surprised. i think it is impossible at this point in time after the ceo to have a black and white conversation about the space any more everyone now understands that there is a lot of nuance, it is complicated, we have to be very th thoughtful and create a consistent framework for the industry to build but also making sure that we're protecting innovation going forward for future generations so i'm thrilled by what is happening here

but would i have predicted it, probably not >> well sheila warren, thank you for joining us today. >> thanks so much. let's get a check on the market this is morning as the dow is trying to shave some losses down to 19 points on the downside, still holding on to 4621 crude inventories did come in and they did fall more than expected down 3.5 million barrels we we are looking for 1.5 million decline. see how that effects the indices when we come right back. with my hectic life, you'd think retirement would be the last thing on my mind. thankfully, voya provides comprehensive solutions, and shows me how to get the most out of my workplace benefits. voya helps me feel like i got it all under control. voya. well planned. well invested. well protected.