else oil is something we definitely should mention in addition to what we're seeing elsewhere in terms of riskoff oil a big loser. 93. >> yeah. lockdowns are frightening when you read closely on what is happening in china make sure you join us tomorrow "squawk on the street" is up now. good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber live from the new york ek changes. coming off a losing week the shanghai lockdown extended the 10-year yield near 2.75. road map begins with another day and headline from elon musk. deciding not to join twitter's board. plus we have a new era beginning as discovery closes that deal. it is now warner media or warner

bros./discovery. it will begin trading today on the nasdaq as well as shares of china-based maker nio after the company hiked prices and suspended production let us start with elon musk. he'll not be joining twitter's board. the ceo made the announcement late last night in a statement they write in part, thinkable is for the best we have and will always value input from our shareholders, whether they're on our board or not. elon is our biggest shareholder and will remain open to his input. there will be distractions ahead, but our goals and priorities remain unchanged. the decisions we make and how we execute is in our hands, no one's else's music tweeting a number of ideas over the weekend how he wanted to change the social media company, which has since been deleted. he suggested to a large degree they turn the headquarters into a homeless shelters because "no one shows up anyway.

jeff bezos shares a story similar. i believe that's one he deleted. >> yeah. i think there's a discord in the message. one of the things that was positive, talking about a premium sector you're automatically logged in maybe you can avoid the appropriate -- maybe there's a way to contain it. david, he's certainly able to complain and do things more outside than inside. >> he is and this is raised a lot of questions as to what his ultimate intentions will be. clearly the only thing was hemmed in by is joining the board was the 14.9% cap on his ownership. that no longer a mys this morning there was a great deal of conversation, as you might expect, as well, does it bring him up to buy more exceed that? what are his plans it's hard to know. there was a 13d filed on time,

obviously, given the change here in terms of his relationship, so to speak, and the fact he won't be on the board. frankly not much we'll learn from this. it is fairly broad in its what it is saying that from time to time, the reporting person, as mr. musk, will or could acquire additional shares of common stock or retain and/or sell in the open market or in privately negotiated transactions might zript the common stock, as well, to other entities. it will be dependent on the reporting person's evaluations of numerous factors including the price of the common stock, general market, economic conditions, evaluation of the issuer's business, financial condition, and so on we're not learning much there. that's pretty boilerplate. >> right the fact is, david, let's say he wanted to sell stock is down. he won't get hit with -- right i don't know where he started

buying. >> started buying a lot lower. >> okay. then he would be hit -- >> started lower he failed to file a d. once the market learned about this, the stock went up dramatically in part because the idea, as well, what are his ultimate intentions as being on the board perhaps seen as a real positive in terms of pushing even more change to the company. why did he delete the tweets >> well, you're asking a person who doesn't think like a human being. when you see the homeless shelter, i mean, obviously, he suggested and bezos is actually doing it i'm not so sure whether -- initially i thought it was a jest obviously not. >> there were other tweets, too, deleted, as well clearly he deleted them for a reason. >> right. >> in some way -- >> one was whether we should remove the "w" from the word

"twitter" and the choices were "yes" and "of course." >> if a regular person we might say that person was not fully in possession of their faculties. >> some believe he was looking for a distractions to the china vehicle sales, obviously, shanghai disruption to tesla, which is down 4% premarket. >> wow holy cow that's one concern in china. there's others, i think, david, you would say are humanitarian and troublesome. we have a humanitarian food crisis in ukraine. we have a manufactured food crisis in china. >> you mean who are locked in and not able to get all the basics >> right. >> think about that. some crazy images. i don't know if you saw the video of the people screaming from their buildings. >> when my daughter was in madrid, they had lockdown. you had to stay in your house for five days.

the fines were unbelievable if you broke them they wouldn't weren't putting you in the jail and a policeman took you to the supermarket once every five days. and that was a very strict lockdown the most strict lockdown in europe this kind of lockdown is criminalized it's a criminalized lockdown and i think that one of the things you suggested there was some dissent among epidemiologists that said things and were taken down. it's a xi lockdown and i've got to tell you, i think there will be people -- i know you're supposed to be president for life this is not what you want when you're up for election in november when we shadow people i don't know why we don't talk about how their inferior vaccines are causing this and humanitarian give vaccines but

need humanitarian help for ukraine. >> i'm assuming you attribute the decline in crude to shanghai >> yes i think they should stop the reserve for now. i think you buy crude. it's at official i'm not sure when the lockdown ends and when we stop putting out the reserve. but, david, i mean, you know there's tremendous travel demand in this country. our country is out of lockdown 100% out of lockdown so these prices are artificially down really >> yes okay >> i think we are not pumping a lot. i think that there's tremendous activity in our country and i don't think they fall. i mean, we were in lockdown >>well, i think there's an opportunity for people at home to recognize that the oil companies have changed the way they distribute profits.

remember biden chastised them last week but that's what they do please take advantage of this, if you think that, like i do, our countries -- the consumer is strong i have matt voss on tonight. the consumer is strong in our country. let's not forget that. >> what do you make the chip stocks, in particular, i mean, again perhaps what it going on in china even though it's been front and center for weeks the market seems to be focussing on it more now you have downgrades in the bidding. >> i think they're looking for reasons. the main reason is bonds these are high multiple stocks with the exception of intel. people just sell the stocks. you need to have companies that make things. that are sell things return capital shareholders and don't have pes if they have high pes, no. >> no?

>> no. broad come is being propped up by the tremendous yield. nothing is tremendous when we look at long range now we have to to cushion on the 30-year. that's the fed has a lot offed if 30--year. >> the downgrade of nvidia is not a evaluation call. it's about warner cancellations and the consumer gv. >> yeah. it was an interesting and perhaps species downgrade. talk about russia's very important -- you know, russia is not important. after they say they're downgraded, they said the fundamentals are in tact if intact, why downgraded? you want to get ahead of other people who are downgrading there's a level of fear. the only chips that go into etherium are the ones that are thousand away. it's a fear downgrade. >> okay. >> people want to get out ahead of other people.

you don't have to run faster than the bear. just faster than the other people. >> what changes the dynamic? >> stock going up every day. it's a race. >> it is. >> these are long dated assets remember that class? >> i was an english major but sure. >> moby dick >> sure. loved it. >> heart and darkness, yeah. >> i have lord david over here it's good to know. >> that's great. can we talk about stocks now >> i've been doing it for 35 years. why stop now let's take snow flake, the highest valued stock in the market the highest price to sales that's one that is going to do the stock -- the company will do well it's a high multiple the high multiple stocks are for sale what if the chinese say we're going to stop this

we have the asymptomatic cases we're in lockdown. >> but 55 million people have not been vaccinated, according to dr. gottlieb. >> interestingly the statistics they seem to be sharing are few people are getting overly sick. >> i know. i don't know why -- okay let's say omicron -- we have people every day who come down with omicron it's always like news worthy it's like page six omar icron. >> yeah. it's the next one. ba.2. >> yeah. >> matthew broderick, mayor adams, sara jessica parker >> speaker nancy pelosi. >> right. >> just saying why, in this country, are we game with omicronand in china they are - >> i don't know. that's the difference between the two of us. >> yeah.

either i say i don't know or i don't speak. never stops. [ laughter ] >> never in doubt. >> that's right. >> when we come back, discovery closing its deal with warner media, as david said the new company warner bros. discovery begins trading today at the nasdaq wbd. we'll take another look at the premarket. as we mentioned, 10-year near 2.76 so far this morning wel rhtraight days up on the yid. 'lbeig back. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates

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today is the day we've been talking about it i think the new symbol is wbd? >> yeah. >> wbd warner. warner bros./discovery and, by the way, at&t, also, we're going it keep an eye on both of the companies there. and see how they perform of course, the key question we've been asking with warner bros./discovery is distributed almost 1.7 billion new share to at&t how many say i don't want this and sell it. therefore there's a lot of selling pressure that's been talked to death at this point perhaps they won't see that much of an impact by the way, they got a lot of positive calls this morning. >> yeah. many positive. >> yeah. upgrades from i think it's deutsche, atlantic, enterprise

i. all coming out with positive comments on the fortunes for this new company right. it will be the number three streamer it starts its life, to to speak, over 100 million customers there's a look at at&t stank key talked to the journal and talking about what they're looking for and focussed on as a wireless/wire line -- >> as for warner discovery, there's a look at the analyst calls this morning listen, 100 million homes. going to do 8 to $9 billion in cash flow. expectations be able to deliver perhaps far more than that similar to the way asloff

acquired. >> oh, look, they're talking about $3 million of synergies. they need every penny. it's five times ebitda very levered. >> yeah. coming closer to 4.5. >> yeah. and, by the way, the linear cable network business is not going up. >> yeah. i'm glad you mentioned that. in the very informative piece what they talked about is this linear is -- the slowdown of linear may be less than we're worried about. >> right. >> and so you ended with one of the situations i want to be clear about this. it's going to be determined by how much stock is sold and you're right, david. everyone should know it but i think that you're going to be surprised at how many people did not know they owned this

because the at t&t shareholder base was so engraved that they may know they just got this. >> yeah. >> yeah and income funds that get it, as well. at least 200 million shares that will sell that it's not -- it doesn't have a dividend it's not an income play in any way. index fund to index fund probably shakes out as an even. >> right. >> we'll keep an eye on that but the multiple has fallen. it's about eight times it's well below the multiples of disney, for example, and certainly of netflix it wants to be seen as the key competitor there. >> one of the things they wanted to get visible was hbo max i think all of us know hbo max is one of the routines now there are at lot of people who are worried whether we're overwhelming but hbo max has a lot of ca catch -- kache i think that's what we have to

watch. >> not a mystery that -- part of the moffit note says to the degree there will be upside potentials within the company. it's going to come from dtc. >> yeah. i'm excited about that david, what is cnn to them >> you know, >> great question i don't know the answer. i think there's one case that said news will be important way for them to distinguish the product, if they want to include the subscription to cnn plus as part of the yearover all direct to consumer relationship cnn punches above its weight in distractions levels possibilities and cnn plus my understanding they could be spending as much as $450 million to $500 million. >> a lot of people feel it's too soon to decide.

>> way too soon. if you're zaz love looking to deliver, it may be hard to resist z zaslav is an incredibly nice man. >> he's the best come on >>well, he's retired. >> right he's retired. >> right but you agree with me -- >> retired. >> does not stab you in the back or the face. >> no. he has to execute and has time to do it don't forget this is not a controlled company. >> oh. you mean if he fails it might be interesting. >> speaking of control we'll get to the shopify split got calls on wells today , axp, and match. we'll get cramer's "mad dash"

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first "mad dash" of the open and getting close to the opening of trading for the week. i love evtol is what they go by. there's another one out there, as well. >> yeah. evtl now i'm bringing this up not because i care that much which is a company that is a flying car. deutsche bank talking about leading the margin not far behind what i liked about this, david, is a recognition that it's niche. so those who are saying i want to be -- this is a favorite of

cathie wood. basically, you know, guys, you may want to be interested in third dimension in the sky, but let's not forget, this is just not important! and i feel a lot of stocks that have are not important it's a strange way to put it. >> yeah. they're not. like rent the runway is not important. >> it may not be until the day it comes and i can take one of these for $100 to jfk to get on my flight and be there in 20 minutes. >> why can't you take blade? >> i don't know. it's more -- i don't know. >> yeah. >> there's a whole class. >> these are public ly through spaks. >> we kid about flying cars but they are electric flying eventually antonymous. there's a period, david, everybody can come public. let's get back a little bit.

those are not spaks. >> okay. there we go. >> all right but, you know, think about, like, kind okay. sara fryer stock. >> yeah. next door. i mean, they've just crushed people wheels up. is anyone rich enough? by the way i was a wedding this weekend and it was pj. >> private jets? yes. i feel like i was in a plane i said oh, my gosh. >> you're the poorest guy there. >> i was i was the poorest person at the wedding. >> all right we got an opening bell, by the way. and remember you want to relive this it's incredible moments. catch us any time anywhere we're a podcast! "squawk on the street" opening bell podcast, in fact, we're back after this.

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without pushing the economy into a recession. i'm optimistic we can do this. it'll be challenging but i think we can do it. >> so you think goldman sachs and bank of america and deutsche bank are wrong when they talked about an increased risk of recession? >> no. i think that certainly if you look at the risk you know what is happening in the world and the economy, there is an increased risk i remain optimistic and certainly my mode of forecast what will happen this year is that the expansion will continue. >> that's cleveland fed president on "face the nation" saying she thinks inflation will remain elevated through 2023 but the trajectory will fall. >> i think that's terrific versus what i feared i didn't feel at all -- [ applause ] it could be a good earnings season, if you just kind of are

not prepped for what could have weighed us i tell you, i see many countries that could have upsided their revisions including the banks. [ opening bell ] i've been waiting wait until the rates go up. they're going. >> yeah. i mean, the way yields have risen and bank stocks haven't responded is no good, as said last week. we'll see if it changes. there's the opening bell at the cnbc exchange it's boston omaha. i had thought is a pair of overweight wells >> i thought it was amazing.

i don't want to short anything they're the first quarter and they could shock so much david, you see jpmorgan of late? >> yes i have. >> come on >> come on what? >> fairly well. >> it's down 16% this year it's never recovered from that quarterly earnings. >> no. and goldman sachs could have a good quarter remember there were no capital markets this quarter remember you talked about how discovery i thought it was a poignant analogy everybody knows. everybody knows. >> yeah. is there anyone that thinks the banks are doing well >> no. >> no. therefore it's an intriguing to me to get into a group that is not unlike 1990 to 1992 when fed chief green span said we have to recapitalize the banks let's raise the short term rates. then the numbers, carl, they

were incredible how much money they made. so look out. the big deposited institutions could be the surprise of the quarter. then we have the consumer staple we've got the banks. we have the oils some of the industrials versus tech. >> yeah. today b of a said it could be the last big beat for awhile they're looking for 4% upside but the year guidance that will be tough. >> yeah. >> they think it could result in some broad based down river revisions. >> they have to talk about geopolitical most talk about supply chain raw costs are definitely a problem. hiring is a problem. i also want to pause at something else i had paychecks on. >> yeah. >> and brian sullivan had this small business round table the person who runs it the number of businesses that are started that people have left companies, maybe going to

new states and start new businesses what happened to people not being able to find employees there's been a liberation of this period. >> yeah. >> a recognition that you don't have to be, you know, you can break your shackles because you got a little extra money from the fed. you can move -- i was down in florida. i can't tell you how many people i bumped in and half dozen executives said the same thing what are you still doing how would you like to cut how much money you made. it's like i have a show. i don't think -- >> we'll be the last men standing, or sitting, for that matter. >> you get my thesis it might be a great resignation. maybe the great entrepreneurial. >> the flexibility. >> shopify is crucial to that. shopify change good and bad, i think. 10 for 1 but then curious, david, increase in ownership stake by the founder. >> yeah. can you help me there? >> i can't really.

they said it's going to support long-term growth or continued long-term growth, jim. but it is odd, as you said three for one split of the shares this does preserve the founders voting power in which conceivably you want to do when you do a split like that >> yeah from 34 to 40. >> i thought it was curious. i mean, the whole point of shopify is kind of like a rigorous independence. >> i know. >> you're right. you usually don't want to see these go in that distribution. you want to see less control it becomes potentially important, obviously, activists can come in or change can happen you can replace board members. in this case, they say, well, it'll modernize their governance and allow them to remain mission driven and sustain an innovative

culture. >> yeah. >> and strengthen the foundation for long-term stewartship. know how to pronounce his last name we never hear from him we only hear from larry. >> yeah. harley. >> yeah. i should point out health care extraordinary. we can focus on tech over and over and over again. i think we do. because of the market caps but we're seeing a change to the way it used to be. you had health care be really important. banks be really important and tech so now we see tech and it's in a bear market. anyone watch the drug stocks they're amazing. the housing and whether we see the peak if it's not time -- goldman is saying good things.

it'll start may 2nd. >> yeah. i have to -- pfizer tells a low multiple j&j is breaking up and that's terrific regeneron is up. we focus on, like, the seven-tiers. and i'm thinking we are wrong. and refocussing on this amazing recovery in pharma. >> if you are of the view that rates are topping, i think which you're saying. wouldn't the names be vulnerable as a result? >> though redically, yes there's enough people who genuinely believe over the next two quarters, these are the guys that won't have to cut numbers by the way, can i say these companies are so good. their expenses are somewhat expensive but not pfizer

i look at -- when you look at the moderna, remember moderna it was twice -- they got crushed. >> yeah. moderna almost had a market cap equal to merck. >> why is america up it's a pharmaceutical. not a single word out. >> yeah. >> it's what you're talking about. it's movements in the market as a result of the move up in rates. the banks every time we see -- [ applause ] it was so similar. and being acquired for

$6.2 billion and sale point is being acquired for $6.9 billion they're in similar industries. >> yeah. it's like poor man's octa. but identity security, they said is cybersecurity and businesses realize that to fuel business growth and success they have to start with identity what is interesting here, let me read the financers of the sell point. >> it's got to go shop, as we often see with these who is financing it? i wrote it down. do we have it anywhere it is -- where is it here it is black stone credit and alan rock capital. they're the ones financing -- by the way, the overall price is

$65.25 share in cash it's a 48 percent premium to the 90-day volume weighted average price. as for the deal, the financers there gallop capital, black stone credit, al rock, oak hill, carlyle financing. what is missing? the banks. the banks, jim this is a very profitable area it usually comes along with significant fee generation and profitability. banks are not winning this business as often any longer the private credit funds which raised an enormous amount of money and can offer yields of 4 or 5%, let's say, to the lps have really stepped up to compete. it's something i pointed out before it was in the stance.com deal we got a sense on this. but it's not happening every

deal that's $12 billion of deals today being financed by private credit no banks in site. >> well, goldman. >> i want to hit a special situation. u.s. foods i've, following it a bit. there's been a battle between the hedge fund and scott ferguson they've been back and forth on a settlement he's been trying to potentially actually replace a majority of the directors. there's a time line from u.s. foods and in it that they go on the back and forth in terms of very recent conversations they've had with mr. ferguson. he reiterated on march 30th that the company, in his opinion, had three options. sell it to private equity by the end of the year, in the event a sale of the company is not

pursued begin an immediate search for a new ceo or if it decides to not pursue those options, then he wanted control for a majority of the seats on the board. as you might expect, the company was not that interested in those. but they did offer this, and i think it's worth noting the formation of the five-member committee charged with the evaluation of avenues to create shareholder value. which would include both for the sake of the directors that are there. and so they haven't come to a settlement there doesn't appear to be any potential sale as of yet for u.s. foods and prospect. but it was worth metioning i thought, jim, they are at least willing to explore strategic alternatives. >> yeah. should point out the businesses. >> yeah. and cisco. cisco has been remarkable. by the way, this hurricane who runs it is fantastic. >> yeah. >> so u.s. foods.

>> airlines not doing too badly. i think mkm with a pretty good update with the negative commentary we've heard about the space the last couple of races they raised jetblue from a sell to neutral. >> yeah. it was very important. >> yeah. >> they're talking about, i mean, kind of presuming that the deal gets done, to some degree but, look, i keep coming back to the strength of the consumer the consumer is travel it's not just antidotal. i'm sure you've been on flights saying this is cool. but i know that andrew was very upset this morning about some routes being cut back after being financed by the public i've never really been that vociferous in saying you should buy the airlines but, wow, they're expensive, if you believe in travel spend. i've never went -- gary kelley, the former ceo of southwest said if there's a place to go, we'll start. there are many this country is open >> yeah.

it brings to mind a couple of notes from b of a. one from disney. other on our parent comcast referencing leverage and theme parks. i think orlando has cracked into the top ten in this country. >> wow. >> i know that our theme park -- we work for comcast, theme parks, david, rarely get the attention of others. yet they're jammed. >> yeah. they're jammed. >> yeah. theme parks are important component of walt disney but also of nbc universal. >> yeah. more runway to put more parks if nbc universal wanted to pivot that. >> to expand dramatically? >> yeah. >> there's two there's a disney in a lot of places why not have a place in texas? i mean, i know they're levered to film. the fact is people think theme

parks are a great buy. but i think that it's we're undertheme parked in this country. >> something else i have to worry about. >> undertheme parked you like that? >> overstored but undertheme parked [ laughter ] i like that. i may use it tonight let me write that down. >> some say tomorrow's cpi print could be historic. >> oh, yeah. >> do you believe it's going to mark a top >> well, it's the first time i think where the estimates are finally not -- look, the problem is the estimate -- you'll hear the estimates for 6.5. no whoever makes the estimate, i mean, let's just accept -- this is 8 to 9. people say it's not sustainable. it's going to stop. >> you have used car prices down three straight months. >> that's it it's actually driving down new

car prices they have the semiconductor problems but used car has been to the vein of the expensist and -- existence. >> another bid from freight. shipping rates 40-foot box from shanghai to california is -- >> what did i tell you about freight and the number of drivers. >> yes. >> freight is peaking. >> yes. >> you seem to look askance -- >> i wouldn't say that a week ago we were talking about freight and that float the previous friday that pressured so many components iran and you had them on mad money. you were saying the same thing on friday you noted the downgrade from bank of america on your mad dash i would say i was paying attention. >> i want to be sure. >> yeah. >> i think if i hear freight being the reason why you didn't do well, you better, like, say i think it's going to be better. otherwise it's becoming an excuse for poor performance.

excuse for bad execution >> look what happened to the transports. >> yeah. >> i told you the markets are good except for tech you didn't listen. you said we would be safe in tech >> is it safe? >> safe? now we're talking about two great actors. >> we are. dustin hoffmann and sir lawrence. >> clove or something this. >> yeah. the book is even better. >> is that true? >> yeah. goldman wrote the book, right? >> yeah. the book is fabulous the other note we let slip by is axp. jp morgan cuts fully reflected in the multiple we're talking about consumer spend. >> i thought it was such a fact use downgrade. steve is doing a great job people are traveling like mad. tv is coming back. he's talking about the internal.

wait until the end of the day but i would be a buyer and not a seller that company is levered to the best story out there not the comprise. >> right to come back to what we started the program today. twitter shares up over 2%. good luck trying to figure out what elon musk is thinking it's not easy. >> must be so weak at 4:00 a.m. >> so much has been shared on twitter. back and forth between the company and mr. musk my communications he's had with the company began some time ago is with the ceo. the largest single share hold we are the company that filed a d that indicated he might buy more or sell. something of great value there. >> he's no longer -- can you

buy -- >> yeah. yeah i mean, yeah he's no longer bound by any agreement as a result of having -- >> maybe he's buying now. >> he could be he could be increasing his stake. we don't know. 23 increases the stake by at least 1% he has to updecade the 13d in a timely manner. we talk about the failure that has done it previously and filed the wrong form g which indicated a passive stake. it was never passive it doesn't seem it now but as for understanding his intentions here very difficult to do so. >> an incredible story. >> yeah. most of the time when people join words, carl, it's like, okay, pro forma. not this guy not this guy i mean, maybe they didn't want to serve maybe they told him he had to go to the meetings. >> yeah. it was contingent on a

background check. >> he pspent a lot of money liquids funds there's a lot in twitter. >> i wouldn't sell twitter. >> we'll see what happens. >> yeah. by the way warner bros./discovery now open up about 2% here. >> incredible. >> yeah ticker wbd get in on the cnbc investing club with cramer at cnbc.com/join the club the 10-year did get to 2.76 this morning we get action on the long end today. we'll be right back.

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♪ that shanghai lockdown drawing more attention to chinese makers of evs. nio, of course, suspending

production trying to hike some prices, but shares down about 5% as we are getting some broad based weakness out of the china vehicle sales for the month of march, down ouabt 11%. we will get "stop trading" with jim in a moment. hybrid work is here. it's there. it's everywhere. but for someone to be able to work from here, there has to be someone here making sure everything is safe. secure. consistent. so log in from here. or here. assured that someone is here ready to fix anything. anytime. anywhere. even here. that's because nobody... and i mean nobody... makes hybrid work, work better.

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let's get to zwrim and "stop trading." >> a small piece of research, marathon oil continued strong recovery of capital. if the oil goes down today off the price of crude, i want you to buy them because these companies are not stopping they are keeping with their discipline they have never done this before and it's a remarkable thing. so don't get des swayed by the price of crude. >> a good uptick on friday of baker hughes rig count. >> that's what i'm saying. they want to drill more because they feel like they can make a ton of money and rusty brazil was on from rbn. they are talking about $30 is the average price. so think about what they are making and a lot of their hedges are coming off. >> this is the group to buy if you want value. >> how about tonight >> i have a great conversation a positive nature of the consumer, whether it be the tjxs of the world or the major

department stores. but certainly people have to recognize that he thinks the consumer is alive and well and i really think that adding to another group that's positive. don't forget, defense is very positive i like raytheon. so there is a lot to like, except for tech. >> did you see the piece where costco is rivaling amazon as the most richly valued retailer? >> amazing interesting. costco the highest paid of people amazon struggling to not unionize by the woi, howard shultz back with a vengeance doesn't want to do tv. no buyback that was a wave of, basically, okay, we're done giving it to the rich robinhood. robinhood! howard shultz is robinhood. >> robinhood is not doing so well. >> no, that's different. >> yeah. we will see you at 6:00. "mad money." it's the best. it literally is the best dow's down about 40. don't go anywhere.

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♪ good monday morning. another hour of "squawk on the street." >> i'm carl quintanilla with

lestly picker and david faber at post nine of the new york stock exchange morgan brennan has the morning off. a big week about to begin as we get cpi tomorrow and of course the beginning of earnings season with jpmorgan wednesday. equitie equities down a little bit on higher yields. >> cross currents to be expected this week. 30 minutes into the trading session to start the week. here are the three big movers we are watching today jetblue announcing it is cutting back the summer schedule to avoid flight disruptions while working to ramp up hiring. the stock having a rough start to the month, down more than 15% since april 1st, up about 3.4% right now. plus, shopify shares getting a boost after propose ago ten for one stock split. the company planning a founder share to increase the company's ceo voting power to 40% from the current 34%. down 50% year to date, but up 2.5% right now. and nio plunging after the china-based company suspended production due to covid-related

supply chain disruptions shares down 3.8% so far this morning. clearly an issue that's plaguing many, many companies with exposure over there. >> yeah. althoug although pairing some of the losses we saw a little while ago. a stock up, twitter. up about #.6% on the news that elon musk is abandoning his plans to join twitter's board of directors. this of course after he purchased roughly 9.1% stake in the company. julia has the latest for us this morning. julia. >> well, david, that stock has been bouncing around first it was down 3% in the open now that stock up more than 2% this comes after last night twitter's ceo announced that elon musk will no longer be joining the board. he tweeted out, quote, i believe this is for the best we have and will always value input from our shareholders whether they are on our board or not. elon is our biggest shareholder and we will remain open to his

input. now, musk not holding a board seat means he is no longer required to keep his stake under 14.9%. sparking speculation that he could take an activist stance at the company. this morning musk's amended twitter holdings report filed with the s.e.c. saying that musk, quote, may express his views to the board and/or the public through social media or other channels with respect to issuer's business, products and service offerings. this comes after musk posted a tweet storm, which he has since deleted, recommending changes for the company subscription service twitter blue it included recommending a price cut, authentication for anyone who subscribes and banning ads, attacking the core of twitter's business model musk tweeted, the power of corporations to dictate policy is greatly enhanced if twitter

depends on advertising money to survive. now that musk isn't limited by his role on the board, wedbush writing today that they predict a "game of thrones" style battle with the high likelihood that musk takes a more hostile stance with the potential he joins up with a private equity partner and forces major strategy changes to the company and/or a sale the tweet also said that there will be distractions ahead now, that is one thing we know for sure this is all just another challenge for a new ceo who is not really known by wall street. so, guys, it would be great if he wanted to come on and do an interview and talk about all of this with us >> yeah. you know, we have been trying to understand exactly what's going on behind the scenes the best i can tell at this point, i mean, they had some conversations with him certainly even before we knew about the actual investment from musk but i think some of them are sort of in the dark as we might

be about what the next steps are for musk will he really try to exceed 14.9 one would imagine there is only a small number of reasons why you wouldn't go on the board one is, well, because you want to get beyond that 14.9. to the point you raised via that report that we just read, i don't know what that looks like. how large he would get whether he would consider partnering with private equity also got to mention jack dorsey steps off the board in about a month. they are kind of friendly. i don't think they are hostile with each other. knee way, you know, we'll have to wait and see. i guess the one thing we know for sure something's going to happen because it always does with musk, right >> yeah. not quite sure what he has up his sleeve interesting that he posted all those specific recommendations about the subscription service there has been a lot of focus on how twitter is going to diversify the revenue streams and subscription service a key piece of that. this question of what he does

next the fact he deleted those, obviously, he is less constrained if he is not on the board, guys. >> yeah. at least with the traditional activist like elliott, which has been in twitter previously you have a playbook, hire advisors, they tell you what to do sometimes it works sometimes it doesn't it's a little more uncertain as to what his next steps are thank you very much. for more on twitter and musk, from one bush securities, covering twitter, maybe we can jump off that point that we were discussing about musk's next steps here there was pessimism in the stock market before the shares began trading in the premarket this morning. now shares are higher. do you think it has do with the idea that by not joining the board he doesn't have to sign the agreement, people think that maybe he could ruffle some more feathers as potentially an activist >> yeah. thanks for having me today look, i think that's likely what's driving it. elon brings a certain aura

around him with these things you saw over the weekend he was not quiet about some of his views about the company and he really hasn't been being on the board, you can't really be that vocal the way he was over the weekend so that's likely kind of the take right now, where do we go from here, and elon takes, you know, a greater stake and it becomes a little bit more active that said, exactly what that looks like i think is hard to tell and whether that can be successful, the ideas that elon has thrown out so far are things that can help twitter, that's debatable at best. >> what's your take? do you think his ideas he has thrown out, tweeting that twitter should consider removes ads, changing its name, converting a san francisco headquarters to a homeless shelter, would those be net positive for twitter >> i am not sure if those things

would be net positives at all. the only serious thing in any of that was really around these subscription product even that, it's really not amenable right now to really -- first of all, it's brand new and a small portion of the overall, you know, revenue and products and so that's not really a thing that's going to be a game changer for twitter right now. removing ads, that's not even a possibility. that's their entire business model. so really so far there has been nothing constructive from elon about how to actually improve twitter, and i think that says a lot about the current situation right now, especially for twitter, its management team and board. >> yeah. to that point, one of his more provocative tweets was this suggestion and the question of whether twitter is dying, pointing out those users with the highest follower count and how there is a -- their tweets

i mean, does that lead you to believe that someone is going to come along at some point in the company and trim that long term dau target >> from the management team itself i mean, probably not in the near term and they have set a target i think there is a lot of debate about whether they can actually hit there. there is a lot of execution that twitter needs here over the coming quarters to get -- early last year. you know, you saw a big boost of engagement early on in the pandemic that's when you saw cross, you know, digital as a whole, really the entire digital landscape twitter saw a benefit from that. that faded a little bit over the past couple of quarters. and now really it's about, you know, product innovation and creating an environment that can bring that level of users. i wouldn't expect the company to cut the target, but whether they can actually hit it i think is a

critical question and it's something that -- i mean, you look at the street consensus it's not near where their target is set i think that says a lot about the expectations >> well, to musk's credit, he is associated with innovation if that's what they need, perhaps they will be listening to some of his suggestions thank you. appreciate it. thousands of financial advisors are headed to miami beach for the world's largest etf conference bob pisani is there with the latest good morning, bob. >> oh, carl, i wish you were here wish david was here. wish leslie was here we'd all be sitting by the, well, by the bar, hopefully, all chatting listen, this is good times and really tough times for the etf business good times because they are throwing mo money at the etf business $7 trillion in assets under management it keeps get bigger all the

time it's stuff because there are 2,000 investment advisors here and they are really worried about what they are seeing, worried about inflation. this whole 60/40 bond split for years and years, it's falling apart because the bond business is in serious trouble now. there is a survey out, investor concerns who were attending this, almost 50% say interest rates, inflation top gern. geopolitical risk is number two. they are worried about inflation. they are worried about a prolonged economic slowdown, market volatility, things like that the biggest funds that these investment visors have in their portfolios, vanguard, the biggest in the world, new lows every single one of them in the last day or two hitting 52 week lows including pimco no wonder they are worried so 70/30 is the new 60/40. we will talk about how the advisors are dealing with this and what kind of advice they are getting on the bond funds later

on the bitcoin etf, the bitcoin conference was over the weekend. the people who are at the bitcoin conference are staying over and they are getting very aggressive and angry at the s.e.c. they want a bitcoin etf. there are demands for that the s.e.c. said, no, fraud, manipulation, we don't want it we are happy with thebitcoin futures etf. we will have michael on, who is the ceo of grayscale bitcoin trust. they have an application in front of the s.e.c. right now. they have until july 2nd to approve it sonnen shine is telling me, if they don't approve a bitcoin etf for them by july they are going to turn around and sue why? what legal grounds we'll talk at 12:35 eastern time about why he is going to sue if he doesn't get that and we will also be talking with the conference organizers about what we do with the bond et cetera at new lows a lot of people here and nice to get out of new york. carl, back to you. >> bob, the one conference you

never seem to miss and who can blame you? bob pisani down in florida. >> here i am. take a look at our roadmap the rest of the hour, including a closer look at the fed's ongoing fight against inflation ahead of cpi tomorrow. >> plus, a lot morning that mega media closing of the merger warner bros. discovery trading today as a new public company. and shanghai easing covid restrictions despite reporting a record number of covid cases a live report omfr china a lot for "squawk on the street" is straight ahead. don't go anywhere. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

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welcome back to "squawk on the street." the fed always wins in its battle with inflation, but sometimes it wins ugly and takes a long time. steve liesman has that for us. hey, steve. >> hey, good morning yeah, in-depth look by cnbc at the fed's previous efforts to fight inflation shows the central bank is 4 for 4 going back to 1977 but the game clock can run for months and years and the victory is not always pretty it took 37 months from the first rate hike in 1977 and sharp rate increases later from the fed and a recession until inflation peaked in 1908 it took nine months in 1999 and a bit over a year or two other episodes so why does it take so long? well, for one, this was interesting to find, the unemployment rate continues to

decline even after the fed starts hiking, sometimes for months it declined by almost two percentage points in '77, 1.2 under greenspan in 2004. it takes time to slow the labor market and the county. the lags help explain why some officials want to move with some urgency, acting before inflation expectations become locked in among the public now, once unemployment starts to rise, can do so sharply. in '77 shot up by five percentage points. in '99 just by two in june '04 the great financial crisis, 5.6 percentage points. every cycle is different this time fed rate hikes against a rebounding economy from covid that could both slow the economy, slow to slow, but also provide more supply, lessening inflation pressure one thing that's clear the fed often fails to see that inflation has peaked and it

keeps rates too high for too long that's a reason for the fed to act quickly at the beginning, but be cautious how far it goes later in the process guys, back to you. >> see, this is really interesting, historical analysis did you learn anything with regard to how quickly the fed started hiking rates based on the backdrop of inflation and whether that was more effective in getting inflation under control in a moreexpedient manner a lot of people criticized the fed for being potentially behind on hiking rates this time around i'm curious if there is anything we can extrapolate from history there. >> yeah, i mean, it's a great question i wish i had a chart of 1977 because it's kind of interesting. the fed starts very slowly raising rates in the face of pretty tough inflation, and it's not until volker comes along and slams the hammer down and starts to slow the economy. and even then, leslie, we had a second bout of inflation

so the fed needs to act commensurate with the inflation going on doesn't always know it though. sometimes the inflation gathers steam and picks up on the federal reserve and it has to kind of speed up as well so it has to -- i mean, really it's going along in the dark here, trying to feel its way and get the right policy for the economy that's going to be coming and then sometimes things come along like the nasdaq bubble bursting and 9/11 creates the 2000 recession and then the great financial crisis ended really inflation peak then >> yeah, certainly covid was one of those things you simply could not predict. >> exactly. >> thanks. obviously, inflation adding pressure to a volatile market. earnings season kicks off this week credit suisse chief and head of quantitative research, jonathan. great to have you back good to see you. >> good to be here. >> you have been putting out a lot of empirical chart work.

appears you are constructive on earnings season. why won't this macro uncertainty or the supply chain shocks affect at least the guidance for the rest of the year >> well, first of all, it will affect the guidance. and i think that that's going to be something that's going to be really uncomfortable for investors. the earnings will probably come in fine and companies and virtually every industry are going to be complaining about inability to find labor and higher wages and higher input costs and energy and i think that that's going to spook investors and in many ways it's probably going to mean, like last earnings season, when the earnings are fine, the stock market may not respond to the earnings the way they have you also have a number of areas that have preannounced or reported early that are showing that there is some impact from the economic backdrop. and you are seeing that in all the travel-related stuff because covid played out a little bit

worse in the beginning of the first quarter, and you're seeing that in expectations around everything from cruise lines to airlines, bookings companies, things of that nature. >> right are you a believer -- we were talking about sort of the rate cycle, that equities can once again, as they have historically, perform better not just from the beginning of a fed hike cycle, but even after the first inversion, let's say, on the curve? a lot of people argue historically historically s&p could could go am double digits over the ensuing year >> the real question is, we were always going to have our next recession. the question is when we think that probably is not going to happen until late '23 at the earliest, maybe 2024 more likely, a and if you look at what happens to market when you're a year, a year and a half away from your next recession, returns tend to be really great. think about how good returns

were in the market in '98 and '99, even though we got a downturn or a roll over the beginning of 2000. or think about what the markets felt like in 2006 and 2007 before the financial crisis. so there is lots of things that are flashing yellow right now, but i think that getting out of the market too early on these when we still sister robust growth is probably a mistake >> what about the vakt fact that historically stocks, bonds haven't performed that well in inflation, commodities have risen quite a bit. where should investors be allocating money now in advance of all of those yellow signals that could turn red potentially out there? >> when people talk about equities as theultimate inflation head, it's because corporate profits do really well in periods of inflation. they tend to pass it on. they complain like crazy about

input costs, but then raise prices and their margins hold up fine what is so different about now compared to 1970s, and there was a lot that was different, interest rates got really high not the ten-year going to 2.5 or 3% mine, you had inflation that went to 13%. the treasury, the ten-year treasury to 15%. volker had to raise the fed funds rate to 17% in order to kill this inflation, and we're not looking at anything at all like this. so interest rates are still quite low, you know, when you -- yeah, may be higher than a year ago, but they are very supportive of hire valuations. >> capital still chief for now thank you, jonathan. >> yeah. at the end of the day, as long as the earnings continue to come in, even if they take a couple of body blows, then equities are a good place to be as long as interest rates don't

do anything crazy, you still have a really good support from a low cost of capital. >> of course, this week we will see more details to how companies are faring with regard to inflation and other headwinds out there. thank you very much. appreciate it. as we head to break, in nvidia under pressure today as bear downgrades the stock to neutral. also shareholder approval double the number of the authorized shares which would give the company more flexibility to take actions like stock splits without further shareholder votes. you can see shares down more than 4.5% right now. ck wh ayitus

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opposition to the secular trend. year to date can cloud spending up 30%, year over year, also sequential growth expected to continue as the stocks continue to fall. increasingly optimistic forecasts for cloud spending and a great deal of room for growth with less than half of all workloads on the cloud as opposed to on premise. in europe adoption trends are lagging but security concerns related to the war are expected to be be a catalyst for increased adoption one factor weighing on the stocks is the current concentration of the cloud market the big four, amazon, microsoft, google and abu dhalibaba have t quarters of the market companies continue to manage hybrid work. loop capital forecasting continued cloud spending but saying networking systems names for now at least the safest way to play cloud growth, arrist a up 8% the last month

juniper networks and ciena in line with the s&p while cloud has crashed. back to you. >> thanks. after the break, warner bros. discovery first day of trade today as the new company we will give you those details next we are back in two ♪ ♪ 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 hybrid work is here. it's there. it's everywhere. but for someone to be able to work from here, there has to be someone here

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♪ welcome back i'm christina and here is what is happening at this hour. president biden is expected to announce a new nominee to head the bureau of alcohol, tobacco, firearms and explosives. he is set to speak on gun violence this afternoon and expected to discuss new efforts to get so-called ghost guns off the streets.

in the besieged ukrainian city of mariupol new video shows crews clearing up rubble at the site of a destroyed apartment building the economic output will plummet h 45% this year because the russian invasion. shanghai officials are lifting covid restrictions even as officials say new daily cases hit a new record above 25,000. the actual number is feared to be much higher than that lockdowns are being expanded to other regions, including the key manufacturing hub of gong joe. and in england an islamic state supporter found guilty of murdering a british lawmaker he was convicted of preparing terrorists act and plotting to attack other lawmakers the jury took just 18 minutes to reach its verdict. back over to you, david. >> thank you. well, shares of warner bros. discovery are higher this morning on the first day of

trading as a stand alone company. doing quite well michael nathan, senior research analyst at moffettnathanson, out with a report. warner bros. discovery contender or pretender giving yourself a wide range of outcomes here. what do you think is most likely and what does david need to do in your opinion to make sure it is a contender >> well, i think the opportunity here is outside the u.s. as you know, the u.s. is really competitive for streaming. discovery has a very strong position outside the u.s hbo has been slow to move there. to get to thigher level of contender, we want to see what they do to build the international hbo max products we are waiting for details on that. >> zaf love would say that they have a strong international franchise via the discovery,

sports rights in europe and on and on from there. does that help in terms of the penetration you are talking about internationally? >> i think it does the question is going to be how quickly are they willing to move those rights to the streaming service, right that's one the second thing is they have the advertising salespeople in all markets of the world hbo max needs to build an advertising-based product with an add here internationally. so he has assets abroad that he can leverage the question is how aggressive will he be, what's the pricing look like, and your point on rights moving over there is lots of moving pieces here we are taking our time we know there is at&t shareholders who will sell the stock. they are not doing it today. but we think at some point there will be a line from the at&t side that will put the stock lower, give us a chance to buy this thing with more upside price target >> yeah, we've -- i have been talking about that, the so-called flow back issue, and clearly you don't think that's being reflected today.

the question is, how much stock will come to market over time for those who don't want to own it some would say and some of your colleagues up graded it today, trading at a lower multiple disney and/or netflix and with as much room ahead as either of those when it comes to direct to consumer. >> yeah, for us the issue is, when you look at the asset mix and cash flow of this company, it's coming from cable networks, domestic cable networks, right and you know this as well as anyone those networks are facing pressures, ratings challenges. you know, we are bullish on networks that have live content, live news, live sports there is a bit of that at the turner side, but not enough. and discovery's networks are really, you know, moving towards the content they have. that content is better watched on demand. to us, yeah, it's cheap on cash flow, but the core of the cash flow are from businesses that are going to decline, right? and that has been the problem.

whereas, disney and netflix don't have those exposures. >> right for quite that leverage ratio. michael, come on, 35% of the viewership in the u.s. watches my networks every night. my cpm is 25 i have lots of room to go on the add side. >> yes, but you look at the decline and reach of the networks, broadcast networks holding on to the audiences better because of the nfl and live sports, whereas cable networks are under pressure. so they have 35% of the viewing but that will be declining, the absolute numbers will be delang. and cpms -- you know the argument they are higher because they have better reach. to us i think you touched on it. the leverage it gives us pause for concern, right? it against the levered playing cable networks, we have time to

make that bet and a lower valuation. >> yeah, i think it's $55 billion in debt for the combined company here. obviously, those were issues that plagued at&t as well, which is why they chose to sell warnermedia in the first place to discovery given that, given the current macro environment, you said it gives you pause. do you think that they are going to start paying off some of that debt quickly and would that make you more optimistic about their future >> yeah, they have to de-lever quickly. that is their number one goal. you mentioned the macro issues, which is interesting to us will there be broadly industry he headwinds from advertising because of macro concerns? we have not heard that yet and if there is a slowdown in ad spend, that type of leverage will scare folks no doubt gunner and david, the cfo are focused on debt reduction. we have that we though that the question is, will there be any types of bumps in the road next couple of years on the

macro side that may make that payback harder to achieve. >> right that synergy number, malone said to me -- and he was including cost innergys, to. there is a lot of low-hanging fruit. no offense to at&t from what i hear, just the number of personnel they had in certain areas that is a far lesser number over at discovery for actually larger opportunities, michael, gives them an opportunity, it would seem to me, to save a lot of money. do you agree >> oh, yeah. without a doubt. they are going to, unfortunately, really cut extensively at warner and turner they have done that with description when they bought scripps networks i agree. 3 billion of cost savings. getting to four, we will see it's sad i would not want to be an employee at legacy time warner or warnermedia because there is going to be massive cutting. it has to happen. >> yeah. since we've got you, michael,

and twitter's been a story and you cover it, i just love to get your thoughts on this if possible changing directions a bit. musk can clearly go beyond 14.9 if he chooses to do so i don't know if you have any better idea what he may be up to than anybody else. tell me what your thoughts are the stock is flat now. >> when you said change direction i think of elon musk, right? you change directions and the question -- but we can't figure out what he wants to accomplish here it's really interesting. like my gut was once you saw that stake, and the stock popped, i thought i would take profits on this because twitter's challenges really are about monetization and dau growth and i'm sure he will bring in new talent and, you know, kind of invigorate the place. they have always had this challenge of being able to mobtize their footprint. they can't to it as well as

google and facebook. i don't know call me a skeptic on that. i don't know what his end plan is here, but the problem is it's ours, a business model problem, that twitter is always suffering from i am not sure how this fixes that problem i just don't. >> do you have a model that indicates where you think this thing could get taken out if -- and again who knows? but if he partnered with private equity and throw a lot more money at this thing, you know, and they had to go to alternatives and they looked around, do you have a number you think is reasonable in terms of what twitter could fetch if it went to option mode? >> you will laugh at me. it's a lower number because the challenge is, this company is barely profitable. it doesn't throw out that much cash flow. they need to bring more talent on engineering i don't know this is always the downside support. someone has to take out twitter, don't you worry. it hasn't happened yet salesforce looked at it. disney looked at it.

i don't have a good list of potential buyers here. private equity possibly. i don't see it as a lasting bet that you want to own twitter for the takeout. i don't see that >> yeah. no i can't answer your question either i don't necessarily see it as well, at least in terms of the potential strategic, who might be interested at this point. michael, we got lots of conversations down the road about that and about consolidation and direct to consumer always appreciate you taking time thank you. >> pleasure. thanks, david. as we go to break, bitcoin today down back below 41k. some say some of the enthusiasm from the miami event over the weekend starting to wane a broad based sell-off in tech ck ith1.%.n 75 ban ree minutes. the aflac pre-pain show. aflac! ohhh, mark is about to become a living piñata. luckily, aflac will help cover his unexpected medical bills.

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shanghai announcing it is easing the lockdown in some areas despite reporting record of 25,000 new covid cases.

eunice yoon has the latest >> shanghai authorities say that they are switching to what they describe as a zoned approach they are going to allow some movement in certain zones where they've seen no positive cases for the past 14 days no word yet on when that is actually going to kick in. but because of the lockdowns, companies such as ev startup nio have said that they have now suspended production and have had to delay deliveries. tesla battery suppliers said that they are going to operate in a closed-loop system because the city where it's in has tightened pandemic controls as well and we're seeing that all across the country, there are more and more cities that are imposing covid restrictions for example, manufacturing hub guangzhou is mass testing the 18 million residents and shutting

schools. ningbo is limiting travelers and banning indoor dining and gatherings wuhan, which of course is the original epicenter of the coronavirus, is requiring negative covid tests for anyone who wants to ride public transport. so bus or the subways. the lockdowns have disrupted trucking routes, logistics, and food supplies, and that has been stoking inflation. so the latest numbers for march show that producer prices for march as well as consumer prices rose faster than expected and the ppi was also up due to high oil costs. leslie >> you know, it's david. i have a quick question. the numbers that we've seen, and i'm sure you have the updated numbers, indicate that people are not getting overly sick and/or the death rate has been extraordinarily low and yet that doesn't seem to be moving the officials to loosen the lockup,

or does it >> well, in terms of the numbers, there are a lot of questions about the numbers. especially when you mention the death rate right now, say, for example, in shanghai, officially there are no deaths. but there have been plenty of reports coming out of some of the hospitals that specialize in elderly care that orderlies have seen bodies being taken out of the hospitals. the suspicious is because it's because of covid, because there has been an outbreak of covid in some of these hospitals. so there are a lot of questions just among the population about the numbers. but you're right in terms of the actual overall, when you take a step back and you look at the number of people who have been infected compared to some of the numbers of deaths or the severely sick, it doesn't seem as though the fact that like the number of sick, you think that the lockdowns would be more of a concern, especially

because the pushback that we're seeing from the public among the -- of the beijing authorities. but as of right now officially, the government is sticking by its zero covid approach, and that is, carl, what we've heard over and over again not only from the officials themselves burks also in state media, that they are sticking by this approach >> even as we watch it, all the difficulty of doing that thank you. eunice yoon with some of the shanghai lockdown news. meantime, we are watching whether it's the shanghai lockdown, the move in yields we have the nasdaq 100 down almost 2%. that takes you back roughly to the 18th of march and the dow touc down 166 trading isn't just a hobby.

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and welcome back to "squawk on the street. i'm frank holland. stocks are mostly lower today. you see the s&p down a percent, with most sectors here firmly in negative territory industrials the best performer right now. up about half a percent. energy, that's the worst performer so far with notable declines in names like occidental, diamond back and conoco phillips. those moves come as oil prices slip with brent and wti trading

below $100 a barrel. on a year to date basis, both benchmarks are still up right around 25%, but also around 30% off their highs. following the start of russia's invasion into ukraine. when wti traded as high as $130 a barrel now back down to you, guys carl, back over to you. >> frank, thank you so much. big show coming up on "techcheck" this morning don't miss academy award nominated actor and producer, mark wahlberg. we'll talk everything from streaming to studio releases as well as his latest business ventures that's later this morning at 11:30 a.m. eastern time. first, though, during april, we are celebrating financial litteracy month. here is mark morial with why he prefers the term financial empowerment. ♪ here at the national urban league, we prefer the term financial empowerment to the term financial literacy because most americans, they do

understand and know about money. they do have a basic understanding of the financial system they're not empowered fully to confront the complexities. we like to talk about the goal and the goal is for people to be financially empowered. ♪

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welcome back to "squawk on the street." the lack of deal making is expected to be a drag. near halt in ipos during the first three months of the year most analysts are expecting investment banking revenue to decline at least 30% year over year led by an 80% slump in equity capital markets that's the group where ipos and stock issuance is handled. however, they're benchmarked against tough comparables since last year was so strong. as a result, piper sandler last week downgraded eps estimates for those banks with the largest exposure goldman sachs received the largest cut. morgan stanley followed with 11%

reduction and you can see that bearishness affecting the stock prices too goldman among the laggards year to date of the six largest u.s. banks. the past is the past what investors will really focus on this week is the commentary from executives about the pipeline, whether the market backdrop will shift to become more accommodating to more deals in the back half of the year, maybe so those deals that were punted, that were expected to go earlier this year but then were punted, maybe they will be able to go. for that i turn to you david who has a perfect insight into the pipeline. >> had this conversation -- thank you, with mark shaffer, of course at citi listen, you know, it's still not a bad deal -- year for deals. >> all things considered, yeah. >> still heading for as much as what might be 4 trillion in deal volume it is the larger deals, though, leslie, that i think there are some real questions about from a

regulatory standpoint certainly and the difficulties they might encounter from both a very aggressive ftc and doj on the anti-trust side. and then to your point, uncertainty about the macro economic environment and geopolitics, which may keep a lid on things, not to mention the volatility in the stock market which always has a dampening effect overall makes it difficult to figure out what a price should be, whether you're using your currency or buying another company. >> that's especially true for ipos which of course are untested comparables in the market that are all over the place it's a big risk if you price wrong and the stock plum ets price it well and the stock soars. one other thing i did mention this morning because we did see two sizable private equity related deals this morning, was -- is private capital. financing these deals. >> direct lending. >> direct lending, blackstone, galob. no banks.

>> no. >> no banks. >> i heard you mention that with regard to the bravo deal fascinating trend. these financing getting done in the billion, $2 billion, not using banks, not using syndicated loans at all. it's a new world. >> it is so that's an fortunate fee generator for the banks. the last minute we have here i want to come to shares of microsoft. the nasdaq comp is down 1.8% but microsoft is off 3.6%. you see it there in part because of a research note from ubs. they're saying a lot of nice things about their commercial office 365 business. you know, the fiscal year '22 revenues, as much as 35.1 billion, still growing 19 to 21% but that sentence that seems to be giving cause to some investors this morning apparently they say they spoke with several industry checks and with microsoft i.r. and therefore now believe that there could be, as they cited, a

gentle deceleration of that business by the way, they also say that their checks arguele the google cloud leadership have all but given up on the goal to replace microsoft 365 and shifted its efforts. so at least they got that going for them that will do it for us on "squawk on the street. "techcheck" starts now ♪ ♪ happy monday welcome to "techcheck. i'm jon fortt with carl quintanilla. deirdre is off today elon declines twitter's board invitation hostile takeover ahead then sale point shares surge as bravo takes another cyber security company private. later, mark wahlberg on warner brothers discovery.