archegos scandal it is thursday, april 28th thursday okay next week is may "squawk box" begins right now. >> good morning. welcome to "squawk box" here on cnbc i'm andrew ross sorkin along with joe kernen. becky has the day off. she will have a lot of great interviews from omaha starting tomorrow we have a big day ahead of us. u.s. equity futures here, joe. all of the earnings reports are getting people -- dow up 335 points comeback here. nasdaq 282 higher.

s&p up 67 points this coming after the flat close for the markets. stocks gave up the gains we had in the early session the question is does this morning look like yesterday morning? i don't know we can make a bet on that. tre thereasury yields the 10-year yield is 2.819 that is coming up again. that would have put pressure on yesterday. should we talk facebook? >> that's the big relief facebook we didn't need another netflix or something like that that's the nasdaq. 282. that's a big gain for the n nasdaq indicated this morning >> we'll tell everybody quickly. shares of facebook/meta soaring right now. that's on the back of earnings of $2.72 last night per share. it beat estimate of 2.56

daily active users to 1.96 billion. revenue growth of 7% marks the first quarter in the ten -year history of a public company that it hit double digits it could flip to a decline from the same quarter last year on the earnings call, mark zuckerberg talked about privacy changes at apple that is something he has been complaining about for a while. softness in congress and the short-term videos. despite the gain, facebook is still down 35% for the year. the other thing that was fascinating is how much money they are spending on the m meta metaverse, joe >> you need to if it is a meta platform i'm fascinated -- i'm not on facebook probably not the person to talk about facebook experience. you normally see a lot of stuff

from the people you follow and your friends as opposed to tiktok tiktok tries to find things that they know you will want to see and facebook is somehow going try to transition to that, i gues guess, in an attempt to juice their engagement i guess that's a problem it is up 16%, andrew it looks like most of the big cap tech stocks in terms of how it performed this year which is abysmally. 350 down to 200. >> i know you are on twitter you don't block me i don't think you follow me. >> no, no. i don't. people send me your stuff. all my people send me your stuff. >> are you on insta? >> i'm not on instagram. i have an account that someone started. i apparently send stuff.

>> joe kernen's hair may be on instagram. >> constantly suggesting new stuff for you. >> they have been doing that >> i don't know if you saw a tweet. tony fidel, who helped build the iphone at apple and helped build nest the meta operating at a loss of $2.96 billion. last year, reality labs lost over $10 billion he said the iphone did not even cost $3 billion to build, let alone $13 billion. he says effectively a four letter word, the metaverse >> you havesome positive views about the future vis-a-vis the metaverse? i'm still waiting to understand better i have seen people, you know, with the goggles and taking golf

swings and knocking over flower pots here is what would appeal to me, andrew hook up the electrodes to my muscles that stimulate them so they grow. >> we all want that >> let mel lay down and have a workout while i'm laying down. >> i'm with you. that's worth investing in, joe there are infomercials for those devices. >> i have seen it. >> they don't work with. >> no pain, no gain. no pain, no gain we know that about almost everything no free lunch. no pain, no gain the endorphin buzz? drugs, you take it and feel good for a while and then you feel terrible opposite for exercise. you feel horrible for an hour and then the endorphins come in.

that is better than the instant gratification with alcohol you don't know either. you have no experience in that arena. >> none. i drive fords and therefore -- >> i thought you were getting a tell telluride. >> i saw a cool kia electric car. the one that jason bateman drives around. let's talk ford. april has a lot. april 1st. you get to the 15th. then you get 4/20 and it is over in 30 days as we think about it april is almost done you realize. 30 days only >> we're coming up on it here. >> good. do your knuckle thing. ford shares are higher

adjusted earnings of 38 cents. net profit dragged down by the loss of $5.4 billion on the company's 12% stake in rivian. ford executives declined to comment on the plan for the rivian stake the blackout period ends next week it is coming up. ford reaffirmed the guidance citing strong vehicle pricing and expectation for production to ramp up throughout the year here is what ceo jim farley said on "mad money" last night with jim. >> great progress of launches. we launched on time. that is great for lightning. we launched e-transit on time. we have more work on warranty costs. it is expensiexpensive. we have to get past the chip issues the commodities held up the

profitable units that is an area where we have upside in the second half. >> ford confirmed it will cut 580 jobs as part of the turn around plan. reductions in engineers as the automaker pivots to electric cars which require different skill sets the ford ceo john lawler will join us in the next hour. we have more coming up the shares of barclays net profit declined 18% from the same quarter a year ago. that was driven by strong earnings barclays also ususpending its share buyback program. that issue currently investigated by u.s. regulators. the stock up 2.2%.

after the close, south korea overnight, samsung with a jump in profit in the first three months of the year strong demand for memory chips a fast sales start for the latest flagship smart phone. revenue up 19% year over year. samsung is warning supply chain issues would persist leading to shortages for its devices. almost 6:10. not too bad. omaha coming up. sorkin that's where becky is headed she's on her way to that >> on her way. that's where the action is this weekend. >> warren-palooza? buffett-palooza. what is that other burning buffett? all of those things thrown into one.

have we ever live streamed the entire thing before? >> nope. first time cnbc.com/buffett check it out >> it should be good trying to get to 6:10 to say we did it we're capable. we're capable. there it is. that's how you can find it watch live on april 30th, which as we have said, is the last day of april. coming up, futures indicated sharply higher like yesterday morning. it did to the hold on to the gains yesterday. nasdaq barely closed low we will get you ready for a busy morning for earnings including merck, caterpillar, mcdonald's and eli lilly and comcast, our parent company. comcastic place to work. are you are watching "squawk box" on

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this is xfinity rewards. our way of showing our appreciation. with rewards of all shapes and sizes. [ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes! find rewards like these and so many more in the xfinity app. comeback attempt on the nasdaq yesterday failed once again. index down 3% this we'ek up today after meta. with us is the reporter at the wall street journal and nancy tengler.

a lot of responsibility, nancy gunjan fair is foul foul is fair what are we surprised over what happened to big tech it has been horrific for the big names for the ones we loved or the ones we used to love you look at facebook, it is bouncing today the chart looks like the others. straight down. huge market cap losses and really just a bounce what happened? >> that's right, joe it has been a terrible, terrible month for tech you know, what is happening with facebook is a continuation of the trend we have seen throughout the year where the mega cap tech companies are reporting the biggest swings in history. gaining or losing market cap at a pace never seen before that's evident with facebook pre-market think zooming out a bit at this year it has been a turning point for

tech the faang stocks logged three consecutive years of big, simultaneous gains this year, they are all sitting on double digit losses the king of the stock market has been dethroned this year >> nancy, how many times in the last year have we heard interest rates need to rise and if there is one sector that will be hurt by rising interest rates, it is big tech here we are. there should have been plenty of advanced warning >> exactly those of us who were paying attention and reduced exposure to the names it is not bad news for all tech, joe. rising interest rate environment, you don't want to earn long duration stocks to wait to get paid back. many of the big tech names have actually held in okay. microsoft is actually up and ahead of the market.

one of our largest holdings palo alto is up about 60% on the trailing one year. it depends on the time horizon and type of tech social media is troubled going forward. we still like a lot of the big names. we added to them on the weakness volatility is a long-term investor's friend. we have used that to pick away at some of the big names >> that's the question it is nice to stick with microsoft. that's a good one. let's say you did lighten up or actually exit some of the other names you mentioned. you've got an opportunity here to get back in is that something you are adding slightly to those positions? what do you do >> we are low turnover managers. it is important for our clients who are taxable and byproduct of our discipline we added to adobe and service now in the quarter we added to salesforce

salesforce is the most difficult name from here going forward in the near term. it is also just important to remember that in a declining growth environment where the pmi is rolling over, thats has a strong relationship with the decline in earnings estimates. we want to earn reliable gr growers. not as economically sensitive as they used to be. separately, we want to own dividend grower. if you pay a dividend that is not ibm, we will be in there buying >> gunjan, remember w? it's hard. it's hard working a decider. it is hard netflix was $700 it is $188 why can't i just say that's a great deal here and just buy it?

you can't. it might be expensive at $188. it's hard. to me -- it's up 3 today closed yesterday at $188 it was so universe loved we wait for stuff to come out. i was watching a little yesterday. back to "ozark. why is it difficult to buy at $188 >> i think the tough thing is think back to netflix's earnings last quarter when they dimmed the outlook for the year it is hard to imagine things getting worse for the company. this came around and they lost subscribers. saying this is a good deal right now is tougher than it looks you can get burned pbuying the debt as many did pewing netflix

shares a few months ago. to nancy's point, it hasn't been all bad with tech. what i hear from investors is they are getting choosey over which stocks they are getting selective those days of those five faang stocks with the saimultaneous gains is over for now. >> nancy, why can't you sell and buy when things are loved? >> it depends on the time horizon. when information is readily available 24/7, people have a shorter time horizon you can, in fact, buy and put them away as long as you are not a professional money manager and judged on performance every quarter. there are great, not once in a generation, but once in a five-year opportunity in the tech names and other growth stocks those are now trading at fallen

angel at a reasonable price. as an example, joe we started buying apple in 2013. we sold a lot of it, but we still own a chunk. it pays to be long term. >> it is fascinating to watch. it really is the same company in a three-month period can be valued at $400 billion or $100 billion. because of a couple of hundred thousand subscribers gunjan, thank you. it makes us glad to be in the business to watch this stuff nancy, thank you is that art laffer >> yes old, old friend. >> awesome see you later. joe, we have news just out from eli lilly

we have meg tirrell with us. meg. >> reporter: andrew, anticipated clinical trial in obesity from eli lilly. the drug is under review for type-two diabetes with the fda they were looking at the drug for weight loss. they found it immemet the goalsn the study. the weight loss they showed increased with the dose at the highest dose it led to 23% average weight loss over the course of the study. that is up from 16% on the low dose compared to 2.5% for placebo. they said this is the first time the drug delivered more than 20% weight loss on average in the study. the events looks like gi issues which were mild to moderate. obesity is a space that drugmakers have been working on

for decades. bank of america is estimates the market could be big for lilly. $6.4 billion in sales for the drug in obesity alone. of course, at the fda for type-two diabetes. we are seeing this move down the line andrew >> fascinating meg, thank you we will see you later this hour when merck reports tune in for the interview with eli lilly ceo david ricks. joe. >> did you do the math can you imagine? if i lost 23%, i would go see a doctor if i lost 23% of my weight, i would go see a doctor to help ask me people at home would say that would be about right do the market. think about that if you lost 23%. there is no way, sorkin. we would all be worried about you.

so, i think the key word -- >> worried about me? i'm admiring you >> 23%, sorkin 23%? do the math. >> you have an eight-pack. >> i'd look like i need a cheeseburger the operative word is obese. that is a serious thing. 23% for someone morbidly obese is a very good thing maybe we're not. you're not maybe i'm not. coming up, the latest in the archegos scandal we have an update on the arrest of founder bill wang. a busy slate of earnings i hope i did not inspire people to tweet including eli lilly and merck and caterpillar. and we will hear from mcdonald's and twitter and

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welcome back we have news on archegos capital founder. he is free on bail after charged yesterday over accusations of the stock fraud which led to the meltdown of the firm bill wang with the cfo were charged with rat racketeering and wire fraud it sparked a fire sale in

stocks joe, this raising questions of swaps they were using. we saw the impact on discovery stock last year. also cbs as well this may turn out to be the largest white collar prosecutions on wall street we have seen in some time >> it reminded me of parking stock when in the old days that is the way they did it it got milken in trouble you were a young fellow. a book -- >> i remember the book i have a copy of the book. >> "merger mania." he was able to go through the weeds and identify under valued situation. it was funny he wrote that you know, actually finding out about things before. that's the best way to make money if you can trade on inside

information. >> the spider webs of the case you have to imagine they are pleading not guilty. you imagine it will go to trial unless they plead guilty before then morgan stanley played a role in the trades for them. lots of other banks. were they lying to the banks unclear? you will see a lot of stuff in discovery. text messages. >> when you see who is in on it. i remember we were looking at viacom. that must be a heck of a turn around spongebob. i spoke to zazloff at one point. i was intimating he joined this new club i'm not sure he did. he must have been close. it beginning with a "b" at one point. i don't know if he sold.

i don't know his personal finances don't you think he was close at that point i've known him >> a lot of people who did sell during that period there was a view a meme of the stocks and it wasn't reddit. >> it wasn't reddit. it was bill wang >> yup let's get to meg i don't think you were a billionaire? in areddition to the weight loss drugs. eli lilly beating estimates. ceo david ricks will join us at 7:50 a.m we will talk to meg and she can tell us if she so chooses. we will bring her back in

right now. she has dow's merck reporting. meg tirrell. >> nice to see you a long time. merck reporting a beat for the first quarter and raise. beat on the top and bottom lines. $2.14 a share. revenue $15.9 billion versus $14.6 billion that the street was looking for. raising guidance for earnings and revenue. the beat was driven by the franchises keytruda coming in. gardasil and the anti-viral drug coming in ahead of what analysts were looking for for the full year, the company says it is looking for $5 billion in revenue for the drug. they said it could bring p in $6 billion. i spoke with the cfo in advance of the report.

she said business development is a critical priority for merck. the company continues to be active on that front this has been a key question for the pharmaceutical industry. they have a lot of cash. bio-teches are horrible valuations do the sellers believe where the prices are is a permanent change or a temporary one that is something we have been hearing from leadership in the pharmaceutical industry right now. are these prices where they settle for merck up 1% in the early morning hour on the beat for the quarter. guys >> meg, thank you for that we will keep our eyes on all of the drug earnings this morning we have a programming note to mention as we head to break you don't want to miss this. on saturday, stop whatever you're doing cnbc.com has beexclusive. the entire berkshire hathaway meeting online it is back in person

warren buffett and charlie munger taking the stage live the first time we will bring you live access throughout the day if you are a shareholder, you have time to submit questions. berkshirequestions@cnbc.com. becky is heading out to omaha today. and tune in to watch the event cnbc.com/buffett the meeting kicks off at 9:45 a.m. eastern time. a pre-game show, the game, the halftime report, the game and bcter party all on cn.com/buffett we're back after this. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure ed a new wireless plan for my business, but all my employees need something different. oh, we can help with that. okay, imagine this. your mover, rob, he's on the scene

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caterpillar just out we see a bounce under 2% kind of a widespread between the bid and ask. 2.10 and 2.17. up 3.5 the number adjusted. $2.88. the street was looking for 2.60. the revenue expected 13.399.

the company did 13.6 that is above. caterpillar says dealers increased inventory. looking for guidance or outlook that may be for thethcoming that's a prettygood number traders arebuying shares this morning. pre-market >> we should get on a cat. >> a cat hat cat hat always works caterpillar. >> a facebook hat in the meantime joe, we will talk about facebook shares soaring this morning mark zuckerberg, i don't know if rich has him doing the jig on twitter. a gif going around revenue slowed user gains are lifting the stock. we dig through the quarter we do it next. don't miss the interview

with ford ceo john lawler. we have so many numbers impacting the market this morning. we are back after this >> announcer: currency check is sponsored by interactive brokers.

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welcome back to "squawk box. story of the morning shares of meta up in a big way up 17% right now the company reporting an earnings beat higher than expected daily active users. it is forecasting stagnant revenue. i was talking about this did you make the gif i saw floating around with mark doing a jig? >> a superman. think about mark running into the phone booth and coming out from clark kent to superman. if you thought about mark zuckerberg on the fourth quarter call, it was vulnerable. facebook and meta looked vulnerable he sounded flat footed he didn't sound excited. he sounded almost worried. this quarter, we got an entirely different mark zuckerberg.

sort of the mark zuckerberg we're used to of we know how to make the transitions we've done this before he never mentioned the word tiktok he just had an air of confidence that was missing last quarter. i can't explain it it was a different mark zuckerberg i think his body language has a lot to do with why the stock is higher today >> you think that body language is a reference to just basic confidence in the future of the company and business >> i think they have greater confidence that tiktok is a major threat, that they are gro growing. it is not just about your friend's feed, but it is about any piece of content tiktok is less who you follow and more of servicing great content. they are clearly leaning into that aspect of technology to change facebook and inn that

g instagram for the future the other thing that investors are excited about for the future is they are understanding this is not a black hole tied to the metaverse. there is discipline which you did not hear about on the last few calls. it is we are going at the huge opportunity. we will spend aggressively this quarter it was we're going to cut back on some of the investments because revenue growth is slowing. we are facing head winds that, you know, it reminds me when ruth came in and they made cut backs of investments investors love that and investors love that body language today >> relationshipich, you mention google they reported prior. there was an issue are the youtube report

what is happening on youtube and facebook >> the market is slowing down. this is not facebook crushing advertising numbers. you said it. the bottom end of the range is decline of 4% in revenue year over year. the ad market is challenged. we are looking at an increasing inn fflation fears. there is souconcern for the ad market this is expectation for facebook was so low less about the trajectory of advertising over the fear of tiktok this theyis where they can't fie out how to keep up that is where you can't fix the economic environment as you move into 2023 and 2024, facebook will grow again this is trading mid teens. earnings multiple on 23. even with slower growth, because

of advertising that google talked about as well, investors at 175 which was cheap this is too penalized. >> rich, we have to run. the advertising piece. all of the media companies you follow everyone wants a piece of the advertising business we talked about this yesterday netflix and warner media is this exstrategic shift happening at the wrong time insofar as we are seeing weakness in the space? >> the irony of it even elon musk is trying to get away from advertising on twitter. they love an ad free experience or ad light experience mobile products free like facebook and tiktok are different than netflix and disney plus. i'm not convinced when people are watching netflix or disney plus "frozen" movies want to be

disr disrupted. look, andrew, the single biggest reason why everyone is looking at advertising is linear tv, not with standing cnbc linear tv is in trouble. everyone is trying to figure out how do you reach consumers with brand messages? how do you reach the consumer in 2022 and beyond? that is why advertisers are fixated on this. >> rich, we appreciate the perspective. >> rich? hold on, andrew. i want to take out second mortgages on my properties and buy netflix. am i wrong >> netflix has been crushed more than any other reason. they haven't said this, but their own content has just not been good enough for a long time netflix had a lot of content, but good enough. in this environment, competitively, good enough is no longer good enough. >> i didn't know anything and

hate it at 171 why do i need to know anything to take a shot >> if you believe they are creating compelling programming again, this price is too low that is the point, joe if you believe the content is cyclical and not cyclical for any reason, but runs in cycles, this is going tor be a good place. >> you love that company you used to. >> i'm frustrated with the advertising approach i don't think the consumers want advertising. it is two years away who knows if they do it. >> thanks, rich. let's get to phil lebeau you have the numbers i do, joe. this is a wider than expected loss for the first quarter for southwest. losing 32 cents a share. revenue coming in slightly better than expected at $4.69 billion.

you want an example of the inflation environment the airlines are dealing with. costs per available seat excluding fuel for southwest in the first quarter up 17.9% the company is going to be reporting a profit in the second quarter. that's the guidance. they swung to a profit in march and they expect not only for q2 to be profitability, but all of 2022 expected to increase 8% to 12% strong leisure demand in the second and third quarters. what about corporate travel? it is critical for the airline it is down 30% compared to the same time in 2019. in april now, down 30% compared to april of 2019 one last note, the fuel hedges program. they are aggressive. it is going to be delivering a 61% -- 61 cent benefit in the

second quarter lots to talk about with bob jordan we are talking to him on "squawk on the street" at 9:30 you don't want to miss what he has to say with the high fuel costs and tricky environment for the airlines guys, back to you. phil, airlines back to you. >> thanks. coming up, tom fanning will join us. "squawk box" will be right bac

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utility giant southern company out with a quarterly report a big runup for the last several months joining us now with the comments on the results that we're seeing, what's going on with the sector, inflation, energy security, probably talk putin a little bit southern company and

chairman tom, you're going to really consider exactly how to answer them. but first off, your numbers were good i think of southern company almost like box makers when the economy does well, or waste management companies peoplegenerate a lot more tras in a robust economy. isn't it the same thing with you in that's all it means, or are you just a great operator? >> well, we incorporating a lot of technology. but joe, you're hitting the nail on the head. you know, and i watch you guys all the time this worry about inflation hitting the economy in a hard way, the worry about a recession potentially, we're nottyi seeint

in the southeast other parts of the united states, we look to see that recovery this the 2024-2025 time frame. people are moving to the southeast and are finding jobs year-over-year, growth in jobs in the economic development pipeline are up 166% capital investment is up over 70%. and so we're seeing this tremendous influx in growth, and i'll peel the onion a little bit tighter here look at industrial sales, a 2% number for us would be reallied fwoo sales were up 1.7. you say that's a good quarter. holy smokes. if you eliminate two big plant closures, that number would have been over 4.5% so we're seeing a tremendous amount of growth i would argue pipelines is, you

know, given what's going on in europe and the ukraine, holy smokes, we'rye seeing a whole lt of growth. a lot of people worry about supply chain a year ago we would have had 30 ships off savannah today it's a handful last quarter it's about zero we're able to move the material out of the ports so the transportation lines are getting better port of mobile is getting better as well. the economy is getting better other than in other places in the united states. >> when prices spiked in the industrial complex, your customers may have to pay more, what should our energy, what

should we be doing right now to try to make sure this doesn't happen us to, what's happening to poland and ukraine and w germany, what can we do? >> unleash the american energy economy. let's develop the resources that we are blessed to have in this nation you know, the idea that somehow natural gas is going to go away and that it's bad for america is simply wrong what we have to do and what america has done over decades is build technology to be able to control the things you don't like about hydrocarbon look, we can do that we've already done it in a big way where the by far the biggest research and development company in our industry, biggest partner with the department of energy. the united states can do this. >> okay. all right, tom, i think we have, we have some company you may have heard of that we're going to talk about after a bit,

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welcome back to "squawk box. becky is off, and it is just the boyc boy this is morning. we did have a situation yesterday when the markets ended flat right now dow up about 287 points often th on the back of the meta earnings now we've got earnings from -- >> comcast earning just south of our parent company rising 13% to 86 cents a share, and that is above where wall street was looking for 80 cents. revenue also topping consensus

sentiments revenue is up at this point, 14% to $31 billion and that was above the estimate that the street had of about 30.5 then there's, as there always is, think about what we're talking about with comcast we're talking about theme parks, broadband, networks, cable, sky tv talking about so many different moving parts, and statement, whe at the same time you're talking about cash flow and ebita they have expectations. it's a great start for 2022, and the company feels it's in a unique position, relative to peers. one thing we always look at, andrew is we're just obsessed in

this business, in that the video customer losses. the total relationship with customers rises every quarter, but people continue to watch as people leave the bundle, exit the bundle cord cutting it was five video customer losses, 512,000, compared to 491,000 last year in the first quarter. it's almost like a disclaimer, we are not chasing unprofitable subs that's what the company always says about why you do see, you know, people continue to maybe not decide to keep the bundle, and you don't see comcast lowering prices. broadband, 262,000, customer relationship total customer relationships, net adds 194,000, highest level of customer retention on record, and then

some pretty good nbc universalness. revenue up 36% if you back out the olympics and other thing, i think it was up 7%, excluding the $963 million in revenue from the winter olympics, $519 million from the super bowl, media revenue up about 7% it's amazing what's just happening at universal i'm talking about the theme parks for demand in the u.s. up $941 million revenue to 1.6 billion. so that's like more than, more than doubling on the theme park revenue, which i guess that shouldn't be that big of a surprise at this point either, considering that we're reopening. >> the question over time, we were talking, when you think about all the folks who may be unbundling is whether they end up re-bundling in just a different way. the way the count works, it

looks like they're coming off, but in many ways they may be coming back on for some of these new things, we talked yesterday about the jv with charter, folks. those types of systems and on top of youtube live and, you know, hulu and the like. where can you get things like cnbc and espn and everything else >> sky, adjusted ebita and this that area of the world for sky. one thing that, you know, we are employed by comcast, obviously, but in terms of the asset mix, andrew, we aren't, comcast is not not like some of the, there are times when you wish wow, i wish

i was part of, but peacock's important but not the end all be all. cable's important, but you've got broadband. so i, some people might prefer a more pure play, but others would say, wow, it's got a different mix of assets that shouldn't have, i don't understand why it's gone from 60 whatever 45 from 65 it seems like the baby's being thrown out with some of the bathwater with some of the other media stocks >> it's always been the issue if you look at the charter or some of the other pure cable companies, that's where the multiple has been the and what you see is the multiple on media companies come down. the distinction i would make in terms of the nbc media company relative to a netflix for example or even a disney in certain cases, nbc universal has never been chasing really the

streaming business as aggressively as some of these others in terms of cost. you could argue, some people have complained that they've been slow rolling it, and arguably, it's starting to pan out to be the right choice >> right and things like sunday night football i said that the other day. we don't have to spend a lot, comcast, we don't swant to say we, but comcast doesn't have to spend a lot on great talent for sunday night football. it's not, netflix has a rough road ahead they're going to have to perform. there are things that are almost annuities for this business. we've got to move on >> it's a different kind of thing. >> i thought we would take this to eight no, we can't let's get to mcdonald's,

mcdonald's also reporting disappointing results. offsetting higher labor in food costs, mcdonald's says its new loyalty program hoped drive the rise we talk about comps. 12% global comps and obviously, we're going to break out some of the domestic comps and everything else so far, up 1.2%. that might help out the overall average as well. >> okay. meantime, we're going to get over to dom who has some of this morning's other top movers >> two thoughts to start off with first of all. i would say that the two fast food restaurant chains that i have frequented the most frequently during the pandemic were mcdonald's and taco bell.

i can sort of get some of the mcdonald's thing number two, can we keep talking about comcast. that's the only stock i care about because it's the only stock stock i can own as an employee shares of caterpillar are down about 1.75%. as you can see, with this particular caterpillar trade, it did come out with results that were better than expected. this is the maker of construction equipment, maiinin equipment and what motte a caterpillar is seen as that kind of bellwether, an indicator for economic activity. watch those shares down 9%, 10%

over the last year next we have shares of pull tee group. average sales prices increased by 18% over the prior year profit margins also improved indicating pulte was able to pass on those costs to the buyers and we're going to end on shares of merck you can see up 2%. profits and revenues both beat expectations merck was helped along by development in its cancer drug treatment, keytruda as well as gardasil and we've talked about an

anti-virals. >> we've got a lot more coming up this morning. eli lilly's ceo. and we talked about the confidence that mark zuckerberg seems to have on display during that call. the social media company reporting earnings of $2.70 per share. up from 1.93 billion in february the first time that public growth hit single digits facebook still down. put a context around this, more than 35% for the year. a little bit of happy ne, wsbut

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quarter, the news on the obesity drug was something investors were really looking for. it's under review for the fda for type two diabetes. and now we're seeing the results for obesity. it met the goals of the study. it's a once-weekly injection and the results were pretty starred, especially as you get into the higher doses on the highest dose, people lost an average of 23% of their body weight over the course of this study, compared with 16% on the low dose and 2.5% on the placebo. the average baseline was about 230 pounds the 23% weight loss was about 50 pounds they did see adverse events in terms of gi issues that were mild to moderate the

and the street is saying it could be a $6.4 billion drug in obesity alone by 2030. >> great, meg. thanks stick around, join us for more on though nis news. and what is the macro environment. there's a lot of specifics that we want to talk about, and talk about the obesity drug as well but what are you dealing with in terms of headwinds and tail winds in the macro environment that affected first quarter results. >> thanks for the question it's getting to be a busy world, right? and we do see rate pressures on the quarter. health care tends to be a little bit more resilient consumer trends, that goeses

b both directions. there was quite a bit of omicron. and we're concerned about east asia and particularly china and the same effects happening in q2 fortunately for us, russia's not a big part of our portfolio. a lot of companies talking about the conflict with ukraine. and we did stop investing there, and we're not promoting our products anymore in russia, financially, it's not abig one for us our trends tend to focus on what our innovation cycle is. fortunately, for lilly, we're in a very positive one right now. >> we do want to talk about pipelines. but just in terms of their reopening, there are a lot of health care companies that felt like whatever services they were providing were put on the back burner, and it was very difficult for a year or two. that's probably not the case with eli lilly necessarily

would you say the pandemic was more of a, i mean, i hate to call it a tailwind, but for example makers of knee implants. a lot of the elective stuff was not done you make essential parts, it probably was more of a tailwind the last two years than a headwind for eli lilly in or were pharmacies empty for a while? >> of course we made the anti-bodies. but on the other hand, you do see a slowing. i think it will show up later in the health statistics, slowing in people seeing their doctor. at one point in 2020 for instance, we saw 20% reduction in people going to test their blood sugar. and if you're not doing that you're not going to change your

medications. it looks like western u.s. pretty much back to normal we have a lot of renewal a lot of people continuing on their medication we didn't see a big change in that during the pandemic >> meg terrell here. wanted to ask you about the big news on your obesity drug this morning. this has been a space that the pharmaceutical industry's tried to tackle unsuccessfully for decades. but this drug and those that work similarly seem to be having a lot of growth. tell us about the opportunity you see here and what the toll rablt profile looks like >> it's the best-case snare grgyoe. and this is one of four studies. it's also being investigated under review for type two

diabetes for a long time, we've been researching this for a long time, they've come up well short of what doctors and patients would find impressive to change people who suffer from serious amounts of overweight or obesity, and we know obesity is sup a driver of long term bad outcomes for our health but also health care costs. this the u.s. we spend, the estimate is a trillion dollars a year treating conditions that manifest from obesity. it's one of those big areas that we needed to look for solutions the a and here now we have great day with the first drug to show 20-plus percentage weight loss 100 million americans have obesity. >> go ahead, sorry, joe. >> in the past, there's been different modes of action for diet drugs

and i was doing something else i don't know whether you already addressed it what's the mechanism and i think that has a lot to to with what we're seeing on the stock right now. what's the mechanism, how this works, and how do patients feel? when you're dropping 23% of your body weight, i can't imagine people feel pleasant >> people feel good. >> thougno, the process. >> everybody in the study was on a calorie-restricted diet and exercise that's the standard of care. and unsurprisingly, those who were put on the placebo, so a fake injection of this lost basically five pounds over the course of 72 weeks that's probably pretty familiar to many people who've tried to lose weight and suffer from obesity.

it just doesn't work very well, calorie restriction and exercise contrast that with those on our medicine who lost between 35 pounds and 52 pounds at the highest dose that's highly effective. on that high dose, if you came in at 231 pounds, you left the study at 179 we can all think about the kind of lifestyle impact that would have on someone. very interestingly, discontinuation rates for the patients were in the teens, whereas placebo was over 20% people discontinued more on the standard of care than on the drug and i think that tells us people want to lose weight, they like to lose weight, and with this drug they can. and lose meaningful amounts of weight ji >> that's what i was going to ask you about, the tollerbility. >> what we've done is taken a

clafs medications that's been very successful in diabetes, which was developed to boost a normal process that we already have, which is a signaling mechanism after we eat to the rest of our body to absorb calories, reduce the hunger sen sn ization in our brain here, lilly scientists have combined another hormone, it's a dual-acting hormone. to dot the same thing, boostin that signal that we have that tells our body that we're fed and it's time absorb calories. in doing so we reduce appetite and calorie input and other functions such as speeding up metabolism, et cetera. the effects are profound >> that's a nice revenue boost for the year, and is it due to

this the diabetes, sale for diabetes, and 28.8 to 29.3 even the low end of that range is above where the street had been >> it's really two things. the covid anti-body sales in q1 were about a billion dollars, and we do see positive momentum in the core business which includes diabetes, cancer, immunology and we're estimating $300 million headwind but we're overcoming that. we're going to take up r&d a little bit >> just in general input costs, what can we kbleen ab glean about how a pharmaceutical is doing >> it's a high-margin business

what's different is our r&d cost, bigger than our cost of goods. labor rates are going up everywhere we're starting to see that in the short term, the transportation cost has been pretty meaningful for us as we're putting a lot more things on airplanes and ships and rerouting things around the constraints we have. so far, we haven't had shortages or gaps. but we are seeing some inflationary pressure. >> an injection is not something you mess around with, someone who just wants to lose weight, the mechanism of action is something that someone who's not morbidly obese that they could benefit from i have a friend >> we all have friends >> could it ever become widespread and easily accessible you know, if you were less hungry all the time, it would be

something that a lot of people could possibly use we know what a money maker that could be >> excess weight is a huge driver of costs and bad health in our country we know that so in the study, we had people that are obese, that's a bmi of 30 or above, and people who are overweight, which is 27 to 30 on the pbmi with a preexisting condition. that potentially, this could be indicated for as well. bm i-27 and above. you have to do a little math to figure out for yourself, google that that's for people who you probably wouldn't look at and say oh, that's an obese person, but they're carrying extra weight, and this could be indicated for them as well and it's a self-injection. >> i don't know. i haven't tried that david thank you. get the pill form, the pill form >> we are working on that, too

we have a phase two program, that's oral. >> i think 27 to 30, that's a little strict. let's not go crazy 27's not bad, is it, meg you think? 26 26, 27 >> that's tough issue. >> if you're tall. 27, that's kind of rough there, david. >> i didn't make that line up. >> i'm talking about a friend who may be a little hurt thank you. >> thanks for having me on >> meg, thanks for that as well. andrew, you're like an 12 bmi, aren't you. >>sy i can't think about injecting myself "squawk box" coming right back after this y i can't think about

injecting myself "squawk box" coming right back after this i can't think about g myself "squawk box" coming right back after this aflac! ohh, mark is about to become a living piñata. luckily, aflac will help cover his unexpected medical bills. aflac? - (whimpers) i don't think he has any candy in there. am i at least going to get hit hard enough to forget this? nobody is going to forget this, ever. (bat hitting) - ohhhh i'mma call his momma. aflac! aflac!

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annual meeting itself, the day's events kick off at 9:45 eastern. still to come, ford reporting first-quarter reports. we're going to dig through those numbers with the cfo and we're expect being the latest read on jobless claims. dow up 282 points. s&p up about 65 points one on us! (mom) delightful. (vo) with no trade-in required. (dad) i love it. (vo) what's not to love! verizon is going ultra, so you can get more. this is hannah, she's a posh virtual receptionist (vo) what's not to love! at the ready 24-7 to answer your calls and assist your clients. you can't be in two places at once. let posh answer. posh virtual receptionists.

ford's first quarter results were in line with expectations let's find out what drove the quarter with phil lebeau and a special guest. hey, phil. >> hey, joe, let's bring in john lawler, the cfo of the ford motor company joining us from in front of the stock, change q2, when you guys look at this market right now, it's a red hot market in terms of demand out there. given the turbulence we're seeing in the economy, are you given any indication that that

market is going to cool off at all? >> absolutely not. demand for our products is extremely strong the electric vehicles, and now the incredible f-150 helightnin. we closed march with a very strong order bank. so we're not seeing any sign of demand easing. >> you expect 4 billion dollars in commodity costs and increase of that much through the end of this year. where is the pain, if you will, when it comes to commodity costs? or is it across the board? >> from a commodity standpoint, our biggest suppose urs are aluminum, steel, precious metals, and now with the launch and ramp up of electric

vehicles, the components that go into the batteries, nickle, lithium. we're seeing inflationary pressures from labor and from suppliers. it's an inflationary environment. so we're also seeing strong pricing. the pricing that we've taken, it's stuck we've been able to offset the head winds from the commodities and inflationary pressures but we know in this environment we also have to focus on driving productivity, drive efficiency throughout all of our operations and that's how you have to run a business in an inflationary environment. >> when we talked with jim farley at the f-150 launch a couple days ago in dearborn, he said you would be prioritizing your chip supply for evs, particularly for the f-150 lightning, which means other vehicles waiting for chips i think you have about 53,000

built and waiting for their allotment of chips they're not going to be able to get them as quickly. will you be able to bring down that inventory of built but waiting for chips? >> exactly we're going to bring down in the second quarter and third quarter. our f-150s, super duties, we're going to maximize returns and it will be good for shareholders and all of ourstakeholders >> you know people don't like that monthly payment going higher any of that pulling back on the consumer at all? are there people who are perhaps thinking twice as you guys are looking at them in the market for buying a new vehicle >> we have not seen that in the demand yet we have not seen any pullback.

about 100 basis points increase in interest rates is about $15 a month. we're watching that very closely the we fully appreciate the affordability factor for our consumers, so we're trying to manage all the head wind ts to t the best foot forward. that's why we have adjustments >> thank you for joining us outside the new york stock exchange a huge week for ford, the production start for the f-150 lightning. and john lawler explaining that they have reaffirmed their guidance for the year. coming up, is the economy bad or does it just feel that way? ion fjohn ford is going to join

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we learned that annual inflation spiked 8%. so is the economy bad, or does it just feel that way? john ford is here. skb >> i'm not telling you what to think. i'm telling you twice. here's answer. it just feels that way the economy feels bad but for understandable reasons don't forget t wa, the unemployt rate was down. and the labor force participation rate state stable. the inflation spike is dangerous dangerous. then there's stocks. they hit year-to-date low this

is week but might be headed high after results from microsoft and qualcomm none of that sounds like a bad compli economy. the latest trouble, including inflation and supply shortages feels awful, but that doesn't mean the economy is bad. look, this month, lowe's offered a plan for education the economy isn't as good as it was, joe, but it's not bad >> that's true but doesn't that depend on whether you own things that have gotten more expensive? the fed just getting started, my friend what they're dealing with, we have not really been exposed and where we're headed there

>> on the other hand, the economy is pretty bad right now for most people, and we've just gotten good pat overlooking tha, because rich people are look great. if you already have a job that doesn't matter to you. average hourly wages are up almost 6%, but you know what's up even more rent the national average, one and two-bedroom rents were up more than 20% year-over-year, chicken breast prices could spike up to 70%. and how about gas? up 43% from a year ago that's the real economy. now let's talk about the stock market the top 10% of income earners own 70% of stock

if you own your house with a fixed rate mortgage and order doordash a couple times a week you think the economy is a little off but if you're in america today you're living this your own personal recession >> very good >> you doubted me. >> i kept reading that it's the message that's being lost and how great things are that's heavy lifting for the administration, but i don't think that's the case. and the jobs that we've added, yeah, woof we've added more jobs than ever before in history, but we just got back to where we were. pre-pandemic >> you won't get any argument here >> you're done with your report, so anything you say now could be used against you >> you'll get both reports now >> if i'm getting you to come down to which side you believe, it's not going to happen

we're going to break at least you're in here, and that's all good that you came in and you're in studio but john is going to be sticking around for the next segment. we want to get his take on this. i hope you don't have two sides to this one. i want to hear what you reilly th really think. we'll discuss what it all means after the break. here are the fiutures at the moment nasdaq up about 285 points higher s&p up about 65 points we're back with a debate over mr. musk when we come back after this adapts to different oxygen levels and starved it. i am here because they switched off egfr gene mutation and stopped the growth of tumor cells. there's a place that's making one advanced cancer discovery after another for 75 years. i am here...

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welcome back to "squawk box" this morning elon mux causing quite a bit of a stir, a twitter yesterday if you will facing a backlash from twitter employees over his criticism of one of the executives. questioned the political bias. twitter employees asked in internal discussions whether the move breached the terms of the deal to buy the company. employees also question the silence of former ceo of jack dorsey to rely on this lawyer to

navigate issues around content and moderation joining us is a harvard professor, business professor and business administration and senior administration dean and also corn ferry vice chairman what do you think of this situation? i have to say, i'm not surprise thadsurprise that elon is doing this. but the whole thing seemed in bad faith. >> i agree but elon musk has proven himself as an extraordinary innovator but we have little evidence of his mastery of the social sciences to bring forward a social media company, which is about the human experience and discourse about it

and you're right poking at their top lawyers and poking at their work model, critiquing their stance on free speech, whether right or wrong at this early stage would freak out any employee today >> allan you think this is totally fair game and by the way, do we think that this deal's even going to happen at this point? you look at the stock price at 49 bucks part of me has, and i think the market thinks maybe this whole thing is some kind of strange game >> you know, andrew, when this news broke, a lot of people were thinking about the financial mechanics of the deal. we were thinking immediately about what we would, the talent aspects of the deal, and our prediction was, because purpose is why people go to work today generation z, generation i, driven more by purpose than by mon

money. elon entering this company was going to be disruptive it's bubbling up behind this our ceo's book the five graces really talked about the humanization of the world of work ver very different work environment than previous generations. yes, it is a big deal. how this company gets run will determine how many employees actually stay. >> maybe he doesn't want them to stay john, what do you make of this >> i think elon's burning the place down and i think there are a lot of people who think that the place should be burned down and something else should grow in its place. but the usual incentives that a acquirer has is not here elon's not sure whether he wants to be responsible for twitter.

he's going toneed some lawyers what lawyer is going to want to go work for elon right now probably, if you talk to the lawyers who have to work for elon at various companies, you know, they have a stressful life so, when you also have to worry about whether he's going to turn on you on the platform that he hopes to earn, that can't be a good situation >> last night he said i want to make twitter, talking about free speech, and he said i want to make twitter fun what i don't understand, the easiest way for him to make it fun is to model grace and empathy and to, you know, tell his followers to have some sense of civility towards others, and if he does that, by the way, he is a role model, whether he like it is or not if he acts aggressively, his followers and everybody else acts aggressively. if he acts with civility, people

can have conversations and not feel like they're going to be made fun of, he can have a great business and i don't understand why he's pursued this tact. >> that's your idea of fun, andrew that might be a lot of people's ideas of fun but if you're the most popular kid in school, your idea of fun may be having fun with people in a way that's not fun for them. we saw the way he went after bill gates over the weekend. he thought that was fun. i'm not sure bill gates thought was as fun but this is what we celon wants people to feel free to do. if he owns it, that's what twitter will be for. >> well said, well said, john. thank you for being here i could use you every day. for a reasonable, laid-back explanation of what we're talking about here >> joe, i don't understand --

>> great laace and what was it said civility >> if he modeled civility and grace and empathy. >> not going to happen that doesn't happen on twitter >> i understand, but if he did -- >> then it would be bankrupt >> though, but from a business perspective, the reason why people aren't spending enough time there is because they feel they're being bullied. they feel that it's not a happy place. it's a negative place. >> on the other hand, just a mo moment j i >> very to agree >> very nice place, very nice, lots of virtuous people. >> leaders have to model certain types of behaviors they need to bring predictability and motivate people instead, what he's provoke something anxiety. the playful muss could be one

th could be one thing the current leadership has to maintain operational couldn't knewit knewity which will be very difficult to do. these are existential threats for individuals and happening so poublly. so you need to maintain fun as a leader as a leader, you have to think differently. >> want to thank you, appreciate t thank it thanks for the civil conversation are you leaving? >> that's what i'm told. >> you don't have anything to do until 10:00, do you? hr shares of meta jumping

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good morning, and welcome back to "squawk box" right here on cnbc. i'm andrew sorkin. becky's on her wray to omaha where she's got a big weekend on the way with warren buffett. cnbc live streaming that meeting for the first time the dow's come down a little bit. nasdaq up about 260 points on the back of that positive facebook news and the s&p up about 60 points. we'll show you treasury yields we've moved back up a little bit, 2.844 we come below that yesterday meantime, fitttwitter out this morning. with first quarter results, kind of meaningless to the stock price. the company reporting a gap

earnings per share of 61 cents its revenue missing expectations slightly as we said, maybe the price tonight matter, because mr. m musk's buying it the pros out there are not so sure that he's actually buying this thing for a billion bucks he can walk away, it's pocket lenint for im >> saw what happened to tesla the other day. caterpillar's down not trading as high as it was after it first came up maybe that's why we're not 3u7 up 350 anymore.

mcdonald's saying price increases helped offset costs. and global comps rose 12%. u.s. comps, i think, 3.5 f good numbers for mcdonald's. drug giant merck, beating expectations caterpillar reporting above estimates. cnbc parent company, comcast reported sales above street consensus. nbc universal benefitted from the olympics and super bowl broadcasts media revenue was up 30% year

over year. now comcast is actually down let's get to the broader markets. mike santoli joins us with what he's watching. hey, mike. >> hey, joe. the s&p 500 looking to make the case that this sort of floor in the trading rings of the year maybe is going to hold this time this is the s&p 500 etf, and you see just below 4200. it also was where the exhinterdy low was in late january. and obviously, the bull case is also, sentiment is depressed it seems like that's flush to market just a little bit

people are just going to say it's a bounce. not a lot of talk about oil, because it has calmed down the price of crude has been hanging around, wti, around $100 you sayee after that massive ru, some of the bulls are saying you have china shut down so we'll see if that becomes a mover and part of the inflation story as well. yesterday a little bit of softness take a look at how the high-yield etf is traded against a comparable treasury. almost all of it in the last year in high yield has been about treasury yields going higher you sigh ee right here the whiti has improved just recent limit

there was a carvana. but nothing that's necessarily telling you that it's yes roding quickly but something you have to watch in terms of capital market stress. >> yes, lot of cross currents. you can see the earnings and the expectations, and it still tonight doesn't tell you anything about, there's a lot of things in the report that you might not necessarily see at first glance. it's very difficult to dee said. >> the market's been really preoccupied with this. it's what you pay for every dollar of earnings the uncertainty remains. you've got to get throughout fed meeting next week.

>> we have that going for us, as theysay. which is nasice. >> meta beat earnings projections, and it's the slowest since the ipo. but the stocks soared. the company added daily active users across every region except europe citing the war in ukraine. and you see the shares are now up over 15%. zuckerberg said they're going to be slowing some spending

>> based on the strong revenue growth we saw in 2021, we kicked off a number of multi-year projects to accelerate some of our longer-term investment, especially in our ai infrastructure, business platform and reality labs. these investments are going to be important for our success and growth overtime. so i continue to believe that we should see them through, but with our current business growth levels we are thousandnow plann slow the pace of some of our investments. >> sheryl sandberg had a cautious note. >> we're working with european l regulators on these rule us. they are largely in range of what we were expecting and the details on this will matter but overall, the regulatory environment is a real challenge for our industry

>> but on the upside, zuckerberg was bullish on the lon long-term-money-making of reels. they say they're making progress in addressing apple's operating changes, seems like they are finding some work arounds. >> what do you think about the cost side? we talking in the 6:00 hour about this tony fedell tweet, who said we spent $20 billion to build the iphone and they spent $13 billion to build a meta verse that's not really here yet. what do you think's going to happen to their costs over time? >> these investments in the meta verse are going to be so long

before they actually pay out for the company that they're going to have to pull back how many they're spending on them right now. there was a shift in the way he was talking about this they've renamed the company meta, saying they were going to be spending these billions and billions of dollars in order to get there, now they're being much more practical, saying what can weig do near term. they talked about having horizon word, which they talked about it being something you could do without vr glasses i think there's this shift in conversation, in this idea that now with inflation, with all these advertisers pulling back they need to be more practical with how they're deploying their resources. >> julia boor sstin, thank you.

we will talk next week's big fed meeting. as we head to break, here's another mover. eli lilly. it's without trial data for a drug hasn't to treat diabetes, but these new numbers concern weight loss, and also the company raised revenue guidance for the year here's the lilly ceo with us earlier on the show. >> the first drug ever to show 20% weight loss. the middle and the top dose, and we think that will be ofndprou for so many people, 100 million americans who have obesity

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trying to figure that out as well, andrew you know, you never know there's different constituents that go into the averages. and i mean by the end of the day. i don't mean at the end of the day. i mean by the end of the day i wouldn't venture a guess. yesterday was flat today maybe we get, i don't know many on wall street expect ing 50 basis point move. ahead of that, hot inflation has sparked serious market volatility we're joined by eric cantor, former congressman from virginia and vice chairman and managing director at mollusk and company.

there are a lot of factors we've gotten used to the last couple years, not the least of which are supply chain issues. but again and again we come back to the fed and central banks around the world and how we deal with what has been a lot of printing, a lot of printing that we have to stop and maybe pull back on, and that's what we're dealing with, don't you think? >> joe, it's always good to be with you and a great conversation this morning. i've been listening, to sum it all up, it is all about volatility how do you navigate in a world where you have all of this going on but, you know, from our standpoint and looking at the markets and talking with our clients, there is such volatility out there it brings about a need for decision making. that's our business to help people make difficult decisions in these times, and unexpected things that can happen

and i think you're exactly right. something has to be done with this inflation they lose some monetary policy that we have experienced, even jay powell has said i think the country can withstand tightening monetary policy. said that in a speech last month. listen, we coming off of historically low rates, and even if we do experience another six or seven rate hikes, you know, historically speaking, rates are still low, but, begin, you mix in all the volatility with this. that's going to be the challenge. we'll see what happens at the next fed meeting, but i tell you one thing. there is, if you recall, two years ago when the pandemic started, it was the fiscal injection of cash into households that really amped up the kind of spending that we are still seeing, and yet, there is really no recognition that there

should be anything done about reining in the fiscal situation and getting back to some normalcy here in washington. >> do you think that the, and i even saw that, i don't know about senator joe manchin, but he almost seemed to at least implicitly agree that maybe reversing some of the trump tax cuts would somehow be deflationary or be what's necessary to get inflation under control, a big piece in the journal today that this was like, same guys that came up with modern monetary theory came up with this idea, that raising taxes is a way to help combat inflation. do you think he believes that? who knows what the rest of the democratic party believes? but do you believe nancy believes that? >> look, i'm not in his head, but i have to believe the impact of his party is certainly there. he is a democrat

and so he is, even though he's a democrat from west virginia, he has to deal with the activists and the pressure in his party, and, you know, he's got chuck schumer breathing, you know, on his neck, just pushing him to try and want to produce something, and so i think the default sort of line on the democratic side is to go after the rich, and that's always been their default, and, again, nonsensical if you're saying, hey, we want to raise taxes on companies. we want to raise taxes on individuals making more money. therefore, it will make it better for everyone else, it just doesn't make any economic sense. we've been there if we're worried about trying to make sure that workers right now who are in need of, you know, an ability to combat this inflation, you don't go raise taxes. so i think it's sort of part of his split existence, joe manchin's, in terms of how he lives as a democratin a very red state of west virginia, but,

remember, joe, he's also running in the, into a conflict with kyrsten sinema who has consistently taken the approach that she doesn't that i imposing or reimposing those tax rates prior to the tax cuts are going to be helpful. that's why i think there's a less than 50% chance that you're going to see anything move on this reconciliation measure that's back in the news. >> i can see how inflation can moderate, eric i could make that case that the reopening in terms of the economy around the world and trying to bring back workers and labor issues and shortages and material shortages, i could see how that could ease as we get out of, you know, further away from reopening the economy, but then if you throw in what's happening in china right now, and throw in potentially putin going beyond just, just poland

and bulgaria, what would germany do with natural gas prices already up, i don't know, six times over 52 week, what if that spreads and the energy prices around the world, you know, don't, don't pay attention to what the fed is doing and don't care if the fed raises 50 basis points that's not going to necessarily tame inflation >> no. first of all, i was in germany about three weeks ago, talking to some of our clients in the industrial sector. as you know, they are so reliant on the provision of russian gas to, you know, to fuel their plants, whether it's the car manufacturers or the other heavy industrial players in skraerm. t they don't have a choice right now. and this is where i'm not sure that, in fact, i'm positive that this administration is not doing everything it can to try and respond to the upyward pressures

on the energy situation, and this notion that somehowqu we c jump to renewables without natural gas is just fiction. i heard tom fanning on earlier when you were interviewing him, it's just not true that natural gas is going to go away. and it's not true that natural gas is bad for us. we can do this cleaner, and there's a lot of ability for america to unleash its potential, and that's where this administration hemmed this by the political left is unable to say hey, we're going to have to have some hydrocarbons and natural gas as a clean fuel. i wish there could be more common sensereinjectedna into th discussion that would help these workers and american families as they deal with utility bills and gatt g gas bills. >> i wonder how long, how long

we're in a period where, you know, we may be recessionary, we may be inflationary. i don't know which to bet on i don't know what the terminal rate for interest rate should be i'm used to 6%, 7% and 8%. and we're never getting there again. >> there you go. these are all decisions that people are trying to make in the market han and that's why i think we're tipp continuing to see a lot of activity companies and investors are going to have to take that into consideration as they plan for the future, all with the disruption that's occurring through technology a lot to consider. >> all right, eric cantor. wow, vice chairman your parents are probably really, really proud finally >> i would say my wife is, yeah. >> okay. good see you later. thank you. coming up, our first look at first quarter gdp, plus, what to

expect when mega cap tech earnings wrap up tonight apple's on the list. you're watching "squawk box" on cnbc

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. welcome back to "squawk box" on cnbc. we're seconds away from the initial gdp. right now the nasdaq's almost up as much as the dow rick santelli standing by in chicago. hopefully the numbers are up >> hopefully they are. 180,000 are expected and 180,000 is exactly what we seed. the low watermark going gak in t the 1960s. we are looking for a whichsker under 1.4 million. and even though it doesn't map

up with expectations it's the west, taking us back to 1970 levels gdp, first look, first quarter is a nasty minus 1.4, minus 1.4. we haven't had a minus sign since thats that at this second quarter. covid-related in 2020. let's go through it. consumption dropped to 2.7, well below expectations although, sequentially, it's actually higher than last time, which was 2.5. the pricing index, buckle up, 8% 8% that is unbelievable to find a higher number than 8% you have to go back to 1981, and if you look at the personal consumption expenditure quarter over quarter, that was up 5.2 now that isn't so bad, because

the high watermark there is actually 6.1 from june of last year, and that took us back to 1983 so we see that there are some serious surprises here on weak growth, there was lots of clues, joe. record trade deficits, month after month where we're importing boat loads more than we're exporting. that hurts gdp, even though there's an asterisk. some of the export numbers aren't nearly enough you, but they're the they're still at records inventory bills were record. and i'm sure they're going to be instrumental this time around. interest rates have made a bit of an adjustment we're seeing down turns to some degree, but look for them to remain hot i look at interest rates the way i look at housing. housing is supposed to be much

more destabilized, but with supply being so low, it distorts the measures >> there's lots of one-offs and distortions. when you have heard people start to talk about recession fears and a negative print on gdp, you add into that pretty serious inflation in the backdrop and you're immediately going to hear the s word, the stagflation word you're going to there that again, rick. >> weigh he heard that a long t ago. when was it, june of last year when i thought the fed was making a mistake and everybody thought i was crazy. i look at this chapter as the long good-bye. good good-bye to all the pandemic

spending, all the mountains of money that boosted not only inflation obviously, but all the other growth metrics, gdp metrics. that rparade is over >> i initially thought the market started going down, then i figured it two go back up because maybe the feds got more room now, that they drag their feet and change their mind and, you know, maybe we don't need, but, but then you get, come back to what they're trying to deal with is inflation, so though don't really have the cover of a weaker economy to stop raising rates. they really can't do that. we're in a pickle. maybe leaseman you like dill or sweet what's your preference it's a pickle one way or the other. >> i like half sour, which is not one of the options this is not the beginning of the recession that you fear. i can say that pretty confidently.

it doesn't heene thmean there it going to be one. inventories took off, .08% add it together and you have a 4% 4% we have seen this lthroughout te pandemic stuff comes into the country, stuff doesn't come into the country. they order stuff, they don't order stuff. china shuts down the things we're watching, business investment up 1.9%. consumer spending a little bit lighter, i had seen numbers 3% this came in at 2.7%

cr crazy swings in trade. we need to pay attention to these trade numbers because of the impact on gdp. almost everybody i saw, and hats off to our friend, ian sheppardson. he had a minus 2% fum. almost everybody who was negative on this number today says we're getting it back in the third quarter, because you won't have this big inventory draw down. you won't have this big trade subtraction, and you'll still have the consumer doing well none of this is to say that down the road, joe, third quarter, fourth quarter, i think next year you could get the drag from inflation, you could get the drag from higher interest rates, but that's not what's happening right thousand thisnow. this is a pandemic number.

>> can you go back on the inventory issue? i've talked to executive whose think there might have been overordering that, and overordering that's continued. meaning that it actually will not be a one-time situation but might actually start to play out in ways that maybe we're not anticipating >> i that ink that's a smart question i hope they're overordering trolling motors. but that's where you could get into trouble we talked about this yesterday recessions are caused very often by rinventory overshoots they have to cut prices and/or cut production to who have that stuff out. in addition to what your executives say to how difficult it has been given the time lags

trying to order stuff from overseas the hope is that all of this ends up in more domestic production because companies find hey, i can't rely on the overseas supply chain. what we expect is something of an inventory build in the second quarter, given the inventory draw down, inventory change from the fourth quarter of 2021 >> great analysis from the capital this morning we're going to talk more about the markets. this sub par gdp number as well as a big week for earnings katie coach is here. recently promoted to chief officer. and what are you thinking about these numbers this morning, how's it changing how you may allocate things? fi >> first of all, great to be here, thanks for the recognition

of the promotion you'd have a lot of empathy. it's been very interesting the gdp data point is not particularly relevant for us for a lot of the reasons the previous speakers just walked through. we knew there would be a rlot of noise in that. i'd love to walk through three themes so we've had a good earnings season f another 20%. but the market's still down. why is that? three things to focus on, the consumer, china and inflation. the consumer is very strong. and we are seeing a very dramatic shift in expenditure. and this pretty understandable to everybody watching this because they're a consumer, and we're all focussed on doing things differently we don't, no longer try to

renovate our house, ride a bike if our bedroom the visa tdata supported that. travel fully recovered the we do expect the consumer to weaken. we are focussed on the change in the balance of what consumers are doing. >> what's the catalyst on the consumer what's the catalyst that's going to movethe consumer even less in. >> we are very worried about weakness in the consumer, and we think the catalyst is going to be the inflation and particularly gas prices. if you look at gas and utility impact on the consumer, it's 4% of the total post tax net income for the top percentile and so we're very worried with seeing weakness there. we're very bifurcated.

the high end consumer should be more resilient, and so we own lvmh and are positioned for that bifurcation. >> walk us through your view on china. you aid you said that was the third piece of your theme >> you saw that they've seen demand weaken to even 2019 because of the lockdowns there so that is weighing on a lot of the coming out you probably reported on and read that many of these companies are moving toward closed-loop manufacturing, which is the sleep at work strategy. that puts the return to work strategy here in the u.s. in context. from a fr inflation perspective

part of it is cyclical demand will moderate,but part of it's quite secular. and those would be the themes of d de-globalization being a high impulse to inflation the consumer, china and inflation. >> katie, thank you for the analysis congrats on the promotion and we look forward to talking to you again soon thanks >> when we come back, a lot more on squawk. three mega caps down, two to go. meta earnings and look ahead to apple and aim on tonight a the stock draft returns 2:00 p.m. eastern time. new big names as well, youdon'

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let's get down to the new york stock exchange. jim cramer joins us now. is it based on the fed being able to relax a little what about the cross currents? >> i think the fed can't relax

the companies, including last night, they all say inflation is a big problem. if we want to get past that number, everybody has delivered numbers that i really like >> does it matter that when you define what a recession is, what is it? a couple of quarters of negative -- >> yeah. >> do we have one under our, we got one under our belt >> we >> we got to get it over with. everybody thinks that inflation's too hot. i think very few people think that jay powell can navigate a soft landing, i think he can he wouldn't have started making things tougher if he knew omicron was going to be, he's hoping omicron would be as weak as it was, but who knew.

those can't come back until we have the two quarter recession apple many of them, the ones that will come back will be the high-quality companies >> you're like a kid in the candy store. what was the best that you saw >> i thought lilly was the best, because there are 40 million people who are probably going to be on this drug. 40 million people are on drugs that make you overweight that you can't codo anything about. i know they had to have some sort of asterisk to their earnings that's the one people are going to say when they put pen to paper, wow, maybe this is the largest drug in history. >> yeah, give me a pill. i don't know about self-injection

that could be a problem. you know whether i give it to myself or not. >> i think that, like i'm on a drug that gives you a pound per month that you don't want, and it's called lyrica, and it's almost impossible to lose weight and that is something you can go to your doctor and say can i just have the shot once a month. and i think that's not necessarily what it was for. but i think that a lot of people are on drugs that make it so that no matter what they do they can't lose weight. >> and i'm wondering if the mode of action could be more widespread in pill form. we've had a problem with that. >> hoeroh, it would be great. >> you have people who would like to lose five or 20 pounds and not have the craving but there's always something wrong with the diet drug we don't have the mechanism.

>> what doctor ever says, you know what? you look good but you have to gain eight pounds. it's always you look good but you got to lose 15 the medicines theyprescribed are ones that make you gain weight those numbers are extraordinary. i'm calling today. i'm just going to get it, i'm tired of this lyrica it's a nightmare >> none of them are appropriate, i don't think, jim, we appreciate it. we'll see you in a couple minutes and remind you about the new cnbc investing club. fan find out more at cnbc.com. your record label is taking off.

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a little more than a half hour till the opening bell on wall street. dominic chu joins us >> you can debate traders and investors, whether or not the it the -- the twitter warnings were there. the shares are up about a percent in the premarket, $49.10 the last trade there

twitter comes out with earnings that are not comparable to estimates but revenues were a narrow miss, but it did report a better-than-expected number for a key measure of daily active users. remember $54.20 is the takeout price, so at $49 and change, there may be a little uncertainty whether this deal gets done. watch twitter. also southwest airlines flying high right now, pun intended those shares are moving higher in the premarket trade after it posted numbers that were a wider than expected loss for bottom line but it had a nice outlook for the full year. it turns in a solid profit southwest shares are gaining on that news. then our most popular ticker search on our website, cnbc.com, the usual names, meta platforms, one, apple, which reports earnings after the bell today, tesla and some of those other ones as well keep an eye on those, andrew, joe, and the rest of the top ten

highlights from the top 50 on my twitter feed back to you. >> thank you, sir. we have some mixed postearnings reactions so far for the quarter on the big megacaps. alphabet fell, microsoft jumped and meta really jumped joining us to preview tonight's results from amazon and apple, good morning to you, tony. >> good morning. >> i don't know if you want to look backwards or forwards first. i'm curious what you think we'll be hearing tonight from apple and amazon >> i think the thing to watch out for with apple and amazon, with apple we're looking at china, some of the supply chain issues, you know, there are some labor issues as well that impact all these companies based on inflation. and so i do expect, however, for apple to show the expectations that the street placed on them pretty confident there

with amazon, you know, they've got a much more complex business model because there's different components, but i think the shining light will be the cloud once again but then when we start to look at the e-commerce and tough comps, consumers may slow down on spending given inflation. there's some labor issues with amazon given some of the organization around the labor and the workforce. so, you know, we'll e need to watch out for some of those things but overall, i think this common theme that we're seeing is that the cloud business of big tech is really performing strong, representing the fact that digital transformation is not going to slow down when we look at the surveys for the people that lead i.t. within the large enterprises, they still plan on spending and i think, you know -- i just go back to this notion around faang and what we saw over the past few years was that we could almost just kind of look at faang as an index of big tech without really understanding the underlying business models now it's much more important to

drill into those business models because not all those letters are equal. >> what's the take-away on the advertising front from both an alphabet and a facebook to the extent you can extrapolate from that even more broadly onto the larger economy >> look, we've got many challenges with the economy, geopolitical, inflationary, and so, you know, people have been signaling, you know, ruth and alphabet signaled that, look, the war is causing some issues in terms of the pullback in advertising spend in europe, and i think what we know historically is that advertising is a place where companies typically will pull back during a slowdown in the economy during a recession. and so we should watch for that. i think that's going to be really important again, i go back to the fact that we have to unbundle the faang and really slice out the different business models of these companies and look at the dependents when we look at a company like microsoft, they don't really have a lot of dependency on

advertising. they have a very strong cloud business when we look at google, alphabet -- >> is there any -- is there any part of you that looks at, like, a netflix, which has obviously gotten slaughtered, and say actually, maybe it's been overdone >> well, i think we definitely have to look at the fact that, you know, what really is the fundamental driver of some of these businesses with netflix, netflix could be oversold without question. the fundamentals of a lot of these businesses, whether consumer or enterprise, are still pretty solid, but i think in certain instances, and this was the case with netflix, you know, how big was their market truly? >> i think peloton is probably the case study for that. in times of covid, there were tailwinds from people being at home, watching more streaming, buying pelotons and working out. now that things have opened up, you know, maybe the market size that a lot of these companies thought they had access to as new customers, maybe that's gone

away and they've actually seen their market shrink. that's a little bit of what we're seeing with netflix as well >> you still like the enterprise business model the microsofts of the world, it sounds like you like, you like the cloud side of amazon i get that does that mean you really don't like these more consumer-oriented plays? >> well, i think -- >> and what does that portend, by the way, longer term for the enterprise guys who typically are dependent on the consumers of eventually? >> let's slice out enterprise too and look at the new entrants that have recently gone public where their valuation is still based on the projected future growth those companies have been questioned even though the fundamentals haven't changed and their growth prospects exceed 30% 50%, 100%, like sentinel one and get lab. the way we value those is based off the future projections on earnings, and when interest

rates go up, which we know they are, the -- that punishes their valuation based on discounted cash flows now, when we look at companies like amazon, microsoft, alphabet, which have strong cloud businesses but have been in business for so long they generate significant cash flow, i think what we really see is that, you know, there's a little bit more of an emphasis on the fact that they have the cash flow, they can do these massive buybacks, and they almost look a little bit more like value stocks when we see how much the multiples have come down >> okay. thank you for joining us this morning. great to get your perspective on all of this. >> thanks for having me. >> we'll see what happens this afternoon. joe? >> thanks, andrew. we are going to get a final check on the markets in just a second i just want to mention amgen in terms of where the dow is. we haven't mentioned it today. late yesterday the company disclosed that the irs wants some money, $7 billion, with a

"b" in unpaid taxes and penalties from the latest salvo in the dispute over back taxings related to amgen's operations in puerto rico. but that immediately hit that stock, and it says 5.1 i see 7 here maybe it's a dispute as to exactly what the penalties on it are. join us tomorrow "squawk on the street" is next good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer david faber is on assignment the bulls try again after numbers from facebook, qualcomm, paypal, pinterest are better than expected or provide a reset. all those names higher today q1 gdp goes down, first decline since 2020 gdp does unexpectedly decline in the first quarter. meta surging on better-than-expected profit. we'll dig into tha