going to have to wti ithstand a pronounced recession that is an overhang on the market and i expect it to keep us in a range moving forward >> thank you great to see you uber shares have take an bit of a down. join us again tomorrow "squawk on the street" is next >> good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber major indices aiming for a third day higher eu proposes the ban on russian oil and adp weakest in the year, the latest sign of slowing growth fed expectations, investors waiting a more hawkish fed, expected to hike rates by half a point for the first time in many

years. >> uber, lyft, starbucks a few and amd, sales surging 71% the ceo will join us exclusively in a few minutes >> we'll begin with the most anticipated fed decision in many years. today at 2:00 eastern time, fed chair powell expected to announce a 50 basis points hike. we'll see what he says about future moves we'll bring you full coverage of the fed decision later this afternoon. we have a lone 75 hike in the '94-95 cycle. >> right there was research out today which said the 95 postcycle, the banks outperform, which meant you finally got the short rates up they paid you almost nothing in your checking account. they got to keep a lot of money. that would be actually a godsend because i think then you get all

these people who believe the fed is impotent off their backs. people would start getting scared perhaps they'll miss a stock rally because it may tackle inflation correctly i think there's perception right now that jay powell has lost control of the situation and i say don't you dare take on jay powell like that >> you're still a believer >> i am. he's got it under control. >> i think it's within his ability to both tighten and say i'm not going to do this gigantic roll off of bonds >> right. >> that might cause a decent rally. >> do we rally at the fed because people are terrified >> david's got something going here people are terrified >> but that kind of a rally doesn't usually have legs. >> only if you see, like the piece we had this morning,

freight coming down, only if you see that we have a series of commodities go down that have been retractable but i saw a piece today which says amazon's not doing well so amazon won't build as many warehouses they're 7% of the steel, so therefore steel goes down and that takes care of steel i mean, you know, hipbone collected to the leg bone. >> but at the same time, it does get back to demand or this creation of overcapacity that resulted from the pandemic surge. it's funny because i missed the -- i polled this from the conference call. it's funny how you think i wanted to make sure i looked at amazon more closely it was pretty extraordinary, jim, when amazon said that we have too much labor. >> truck drivers >> our reaction was an uncertain labor environment. a lot of people were out on

leave. we hired more people and then found ourselves overstaffed. >> why are you the only person that mentioned that? i said that and said here comes the layoffs. a person who drives for amazon gets laid off, well, that's going to be a surplus truck driver, which means that a lot of people are worried about truck drivers. they'll be from amazon well trained so we have certain -- my old friend larry kudlow would always say the green shoots a lot of that time there would be a giant cement floor and you see green shoots hard to see them but sometimes grass can break through the cement ever seen that >> i have. >> green shoots, mustard shoots. larry had a lot of sayings adp today 247, lightest in a year small business down 120. >> that was interesting. >> which has some people believing we're either slowing

down in aggregate or companies like amazon were able to steal so many workers that smaller firms they couldn't do it. >> uncle jack's steak today, a guide line with becky -- can we give everyone a logitech web cam so people don't look like they're coming from outer space? he was talking about how hard it is, but he's still opening stores good for him how hard it is, people close the stores you can't. if you look at the economics of a restaurant right now and you want to start a restaurant and you say, okay, listen,ly only lose 10,000 a month -- >> you sound like you're speaking from experience >> kind of >> back to the fed and your continued belief in jerome powell's ability to navigate this we threw out a lot of different things in the course of the last few minutes -- >> and they're going jay's way but a lot of the billionaire, come on, now billionaires don't need to get rich again because

they're billionaires and they just say, you know, jay lost it, jay should quit, too bad about jay. i feel bad that jay's -- like jay's like a sitcom we canceled. jay didn't last that long. new jay. netflix choelz not to renew jay. tokyo buys jay >> his subscribers are down. >> they're renewing him. >> too low >> yeah. >> he didn't have legs >> right no legs. >> couldn't get to that second season didn't have the plot. >> could paramount plus pick him up >> maybe but that's why that stock was down yesterday, i find out, average revenue. >> he's a public citizen he's not crushing it these are not years he's bringing home the bacon, although bacon has doubled in price and that wouldn't be so bad. what he's trying to do is figure out how to slow it down. without doing anything, he got the rates free

he didn't really do anything that used to be considered brilliant under a previous fed chief. two previous fed chiefs. but no, not jay. what is he doing, david, that is making it so that even though he's getting it right people denigrate him? what is he doing what tho do they want him to do? i saw a tweet from a guy, a bear trap guy, he wishes things were about five i like people working and doing well these patter if jay would be just protecting rich people from inflation i think ultimately the working person does lose if we don't get inflation under control. not one of those guys. i do think that jay is not doing anything that i regard as being stupid >> okay. >> what did they say at the mitting institute? a lot of smart people. >> they're concerned but, i mean, i said this yesterday. you talk to people, everybody's very concerned that's typical >> what was the concern?

>> of a significant slowdown, but at the same time when you ask them about their business, oh, it's fine. >> do they havechina business? >> kind of wonder about, that but demand is still fairly strong some some the china part of this is very interesting in terms of the lockdowns in shanghai really playing through the supply chain yet again when we thought we were starting to straighten things out just a bit. exports from the china shanghai region they're starting to unlock a little bit today they shut 60 subway stations and we're hoping it doesn't spread to beijing. >> a doctor said we have no natural immunity to this thing, so good luck now, starbucks >> yeah. >> they're not saying a lot in china. they don't have doordash bringing you food. but the u.s. did quite well. >> we'll talk about u.s. comps and the china comps from

starbucks and from yum china, talking about the situation there deteriorating rapidly in the quarter. when we come back, we'll save time for amd, getting a boost on bether than expected results and upbeat guidance. we have an exclusive with lisa su in a couple moments shooting higher all three ind deese.

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amd shares heading higher after strong results lisa su, ceo, joins us to discuss. there have been a lot of fears, some ceos basically saying pcs are dead so therefore semis are dead and everything else is going wrong. what i read from your report, i did not feel that way. can you give us an update about how you get 71% sales growth, unbelievable expectations and the pc dead and your company losing shares? >> first of all, jim, carl, david, great to be with you this morning. it was a very strong start of 2022 for us. very strong growth across all of our businesses led by the data center business. that's where we've been strategically focused for last couple years and it's great to see the progress we doubled our data center business very strong gaming results as well as the pc business you know, what i would say is, jim, this is all about being in the right segments and, you know, we have

strategically been focused on having your product portfolio aligned with the higher end of the stack and, you know, really higher value products. that really came through in our revenue growth as well as our margin expansion >> you know what, i think the narrative we were expecting from you, which was really decided by one gentleman going around and say the sky is falling over amd. what i love is i expected that xilinx was going to be a single-digit contributor i was worried you overpaid for it i hadn't heard a word about xilinx i can't remember when xilinx was this strong. i followed the company for 25 years. this thing is working, isn't it? >> well, i am so excited we closed xilinx in february so we had half a quarter of our first-quarter results. more importantly, strategically, xilinx is such a great fit with the amd portfolio. what we now have is a dive diversified set of businesses

that are all about high performance computing and adaptive computing xilinx grew on a pro forma basis, 22% in the first quarter. we now see them growing sort of low 20s, which is great growth rate if you add that on top of the amd business, we'll grow 60% year over year into 2022 so we're excited about the combination, we're excited about what we can do in sort of the key markets that we think are going to be the secular growth drivers for us in not just '22 but over the next 25 35 years. >> in your upcoming analyst meeting, is it possible you'll be able to say the street should care more about aerospace, defense, industrial, health care, and of course auto than throw-away pcs like the one i have, which i would toss out and don't care >> well, i wouldn't exactly say that, jim, but what i would say is we have a great set of markets and great exposure

across extremely important markets. so, you know, data center for sure, communications, automotive frankly is becoming a driver for us which wasn't for let's call it stand-alone amd them you add industrial, aerospace and defense. the pc market continues to be a good market. now, you have to be in the right apartments of the pc market. so, yes, there's a little bit of softness on the low end of the pc market and consumer we've been focused on premium and high end and commercial. and those areas, we believe we can still grow the key is to think of amd as a broad-based, high-performance computing company. >> all right i'm going to go right there because i like it. you don't have to go there, but i have to. you've been losing a lot of share. i see from the analysts that you picked up 15% quarter over quarter and intel declined 6.5%. could all the analysts be wrong,

me be wrong, people who buy pcs wrong, people who buy servers wrong, or are those numbers right? >> we believe we gained revenue share in our key markets, server share. we doubled our server business, you know, year-on-year we grew in cloud and enterprise, which as you know are really, you know, extremely good markets in terms of, you know, their need for high performance. we believe we gained share on the client pc side that's really on the strength of our product portfolio. so, you know, at the end of the day, there's still investment in things like commercial and things like gaming and these kinds of areas that's where we've opt mimized r portfolio. we've gained revenue share and our goal is to continue to put great products out there because there is demand when we have a very strong portfolio. >> people tell me that consoles have gotten much weaker. i had the advantage of speaking to best buy, the largest console

seller microsoft and sony, sounds like you can't keep them. the stock and there's your business >> we are very happy with our overall, you know, game console business and our gaming exposure jim, i believe gaming is secular growth i don't think people should get hung up on what happens in this quarter, the next quarter. i can say for sure that what we see is, you know, strong demand for game consoles. i think there's good perspective there. i also view it as this is about, you know, sort of a broad based portfolio where we have access and really exposure to all of these growth drivers so, yeah, i'm bullish about the console business into the second half of this year. and i continue to believe overall that, you know, gaming is a strong market over the next, you know, several years. >> your semi custom business much stronger. i love the margins there can you explain it's not really ripped out by a competitor >> i think the beauty of our

portfolio is we have a lot of different it that can be used in different market segments. our semi market customizes we design products with our customers. it may take us three, four years to design and may be in market five to seven years. this is the type of business where we're building very deep customer relationships and we're able to really optimize together so i view this as not just a game console conversation but this is really a broader customization conversation as, you know, customers really think how am i going to differentiate in the future. this is the power of the portfolio that we've brought together with amd plus xilinx but i'm also really excited about our recently announced pensando acquisition, which will bring incredible capability for the key markets. there was a moment in the conference call that i think correctly captures the zeitgeist

until your numbers game out. rod seymour, deutsche bank, was talking about where you were plateauing you said you didn't see any plateau. he then apologized for using the plateau world. what that tell ls me is there are people who are so negative about this business that it's gotten completely out of whack versus 71% growth versus gross margins that are approaching the old days, the anti-grow days of intel, and the new work that you're going to be doing in autos. so plateau, make sense, or no plateau? >> well, we're very excited about the growth that we have. you know, if you look across automatic of our markets, we have substantial growth drivers in the organic amd business, substantial growth drivers in the xilinx business. when we come together, we have large revenue synergy opportunities as well. we're not seeing a plateau at all, jim i think what we're seeing is

substantial demand i'm out there in the semiconductor market there are a few places that we have to be careful watching the market, and we're doing that so we derisk the pc business and our second-half guide for 2022 but i really see multiple years of growth, especially as we bring this incredible ip portfolio together and parter in with the largest, you know, customers in the world so i feel great about the growth that we see in the business. >> that's an interesting point, lisa i wonder, you know, whether it's pcs or whether it's gaming, what do you say to people who argue that your own investment cycle, your own capex cycle, will get a second look on the downside? >> well, i think, you know, again, carl, the way to think about this is you're always going to see let's call it ups and downs do to tactical things. bre beauty of a broad-based business, people want products,

and they're in high demand the diversity we have in the business is great. i think the leadership that we have in the business is great. and i think the customer relationships and, you know, what we've been able to design together have also given us a lot of visibility into what people need in the future. >> lisa, i am a huge believer in stock buybacks you bought back $1.9 billion when i see a portfolio that has auto, aerospace, defense, industrial, health care, would bit better to put your money towards those bets than it is to keep buying back the stock wouldn't that be a better return for shareholders >> well, we are really getting to a police where we have a balanced capital allocation, you know, strategy, and when we think about it, absolutely the first priority is investing in the business, and we have invested a lot, grown a lot as a company in terms of both organically as well as inorganic bets we'll continue to make sure that's the first priority. i'll with you.

there's tremendous opportunity we're investing in software, in har hardware, in ai. all of those investments will be made we're also generating a lot of cash, and from that standpoint, we also think balanced shareholder returns should be there as well. our goal is to create a very strong financial model that checks, you know, all the things that are important to our constituents >> excellent lisa, if we were at the horse races i would say that the quote from the daily racetrack would be pulling away, which is what you're doing lisa su, who is ceo of amd, pulling away, large position from my travel trust we talk about it tomorrow at our club cal congratulations for great numbers. >> it's great to be with you guys this morning. thank you. >> thanks, lisa. up next, kram erp's "mad dash" and count down to the opening bell

we'll get the call on carvana and a lot more

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over the last year we raised prices several times to address increasing inflationary pressure, yet we experience d negligible attrition and demand for starbucks coffee even so, inflationary pressures have outpaced our price increases resulting in margin compression in the short term and costing us over 200 basis points in the first half of the fiscal year. >> let's get to a "mad dash" as we count down to the opening bell in about four minutes howard schultz firmly in control on an interim basis still. >> right look, david, already two starbucks, one run by a previous ceo. gets up in the morning, does stuff. i thought he brought the company

technologically where it had to be, digital. and then there's another starbucks, which is the soul of starbucks, which says the baristas should be treated better, make more company, the company therefore will make more money and also the technology franchise when it came to tips howard made an impassioned plea for why a buyback is not nearly as valuable as fixing what we, until this happened, didn't think needed to be fix preponderance of the evidence so on the one hand, i was glad that howard is there. on the other hand, if it was so bad, why didn't we know about it i think the answer is it was so bad because china closed and kevin johnson did a good job, but obviously there are some unions, you know -- >> some union issues or at least questions. he had pointed out that you can't negotiate or raise wages for those that have unionizing it makes it a different dynamic in terms of the conversation between the company and the employees. but he also went out of his way

it seems to point out the company's debt load has increased because of the buybacks, the dividend what do you make of that >> i think he made it sound like it was just another company buying back stock without any soul we have a lot of companies with buybacks i was asking lisa su, are you going to buy back stock? it generates a lot of cash for growth if you're howard shultz i think you're saying the baristas have been shortchanged and there's why it's not as much fun the inflation quote we played i felt was somewhat minimal. what mattered is howard is going to make it a better experience he feels the experience is not that good. the baristas are hard-pressed. he doesn't want that i think overall he feels like the company has lost the connection to customers. >> when you have a lot of people just going through a drive-through, that can happen >> right >> the customers -- you want cash in customers?

go to dutch bros because there's a kiosk. they said to me, you want the super octane nitrite you were here yesterday. i'm, like, i'm from philadelphia how do they -- well, because they have a smaller-scale operation and starbucks became a bit -- i'm going to use the determine -- an assembly line, not unlike what you might find say at company like juniper. >> where mr. johnson was the ceo on -- so the stock will be up a good amount when we start trading 50 seconds from now. >> we felt much better my daughter was a barista. quite a hard job do you know how hard it is to make those hearts? >> spelling your name. >> i can't come in there and fire you [ applause ] i will say this, david, i felt better, and if china opens up, you want to be in this stock

>> we got at least one upgrade evercore takes it to outperform, looking for 95, which would be about 28% upside and they did move up their invest day to september. [ bell ] >> kevin johnson, the stores that were getting 12% comped in the u.s., aren't those kevin's comps and not howard's >> yeah. >> u.s. up 12, we were looking about 7, so that was a positive surprise cnbc realtime exchange at the big board, staffing firm bgsf at the nasdaq cloud new york, a conference for cloud and sass company e ceos on the travel beat, jim, uber, lyft, air be nb will be the one to watch today. >> they were expecting $100 million in cash flow

they did $1.2 billion. there are a lot of companies that had no intention of making money because they say the opportunity is too great chesky was the opposite. here's an incredible statistic he has far fewer people working there than he did in 2019. the leverage of his model is absolutely extraordinary he has a giant day coming up, may 11, where he says it's going to blow your mind. and i think it's important to point out that they seem to be a company that is helping more people who are refugees from ukraine than any company on earth. business is the greatest force for social change. chesky is a winner he's saying, listen, if you want to work for us, you can work anywhere david, aloha, mahalo >> by the way, i love that answer to your question last night about remote work. probably the most extreme example we have right now of remote work. here's what chesky said. >> the results you saw in q1,

this is our low season most people l are traveling in q2 and q3. so first of all, i'm really excited for what's to come but you're right something remarkable has happened we're now living a world where most people that have an office job don't need to go back to the office five days a week. if you don't have to go back to the office five days a week, you have more flexible to travel longer, stay longer, and go more places >> so since they rolled out their policy where they can move anywhere in the country, your pay doesn't change, 170 countries you can live in for 90 days, they have 800,000 visits to the job site. >> and the stay time is now a month. the numbers we saw, i can't believe what numbers he's about to show. david, the model is a technology-driven model. it's very easy to book it offers a much better value. marriott has had a big increase. much better value.

>> recommendations as well as to where you might spend some time. listen, it's not a prize that airbnb would be allow their workforce to do that it's huge trend. >> when you use it, what was it like you each used it >> no. not yet. i will i will for that 30 days in hawaii you just mentioned yeah i'm going do it. >> airbnb is the most fun thing in the world when my daughter was a teacher teaching english in madrid, they would have a horrible lockdown every week she would go to a new place. half the world goes to a new place on the weekend don't you understand the pattern? people under 30, they don't have a lot of money so they go to somebody else's house. >> so marriott, meantime, april rev par, match 2019, they resume the dividend do they lose because of all this or not >> no, because the market is so big for travel

business travel hasn't come back yet. but i will say that airbnb is not a travel company this is what you'll hear at the analyst meeting. it's an experience company where you can have an experience -- basically he won't say this but i don't think he'll mind, you lead somebody else's life. you go to their house, lead their life, queen or king for a day. like, wow, when i did it in buck's county, i was, like, wow, you know, this is that rich area i grew up in the poor area what a blast, you know what a blast david? >> i hear you. well, there's reason why its market value is more than that of hyatt and marriott added up >> it will get much bigger >> gets a high multiple. speaking of things that are down, we haven't hit lyft yet. john zimmer was a guest on "squawk box. >> nice guy.

>> he gets the "nice guy." q1 was better than expected he said in the press release, ride volumes reached a new covid high that was logan green, co-founder and chief executive officer as well new covid high but about 77% of whether they were in 2019. you can see this is what, jim, is preventing anybody from taking -- putting a lot of capital to work. you're going to come in after an earnings print and be down 50% expedia wasn't that bad. today it's this one. netflix. amazon these moves down on these misses are horrible >> and the gains, it ain't going to make up for lyft. >> by the way, every so often i like to point out ebitda i'm not doing this to pick on lyft, by adjusted ebitda does include -- they take out income tax, appreciation, taxes,

payroll taxes related to stock-based comp, changes to liability for insurance required by regulatory agencies >> take out cap next. >> no. net amount from claims seated under the insurance requirement. they take a lot of stuff out when you talk about adjust t ebitda we don't talk about it a lot but it's important to do so. stock-based comp, by the way, nobody wants that stock, no offense. so you may have to start paying people more cash >> i'm think mig restaurant would have made $2 billion >> you could have adjusted >> i made a little more than that david, you know what adjusted ebitda means >> what? >> we're lying to you. >> if that's the case, we should be spending a lot more time talking about it every morning timts way these companies are measured wall street is happy to take it. >> they're just trying to fool you. >> i don't know about that

there are things that are not indicative of the day or month-to-month operations of the company, so they should be separated out. stock-based comp, maybe, but my point is that you maybe are entering a period where so many stocks are down sharply, the companies will be obligated particularly as they compete for talent to pay more cash. you can't exclude that from ebitda >> that's why i like cash flow that's why i thought airbnb at $1.2 billion in cash flow. it's hard to adjust because it's what you make. >> yes >> mike angelakis -- >> former ceo. >> i mentioned adjusted ebitda at a meeting i went to and, i don't know, anything he was going to shake my hand at the end of it. it's called profitable cash flow >> not a minute who likes adjusted ebitda. then i said where do you go to the beach, what house, what town he said it's none of your business >> by the way a board member of

exxonmobil just to mention. >> oh, yeah? >> yeah. very rigorous gentleman. >> i would say what would you like i'll do it guy was so smart but he taught me a valuable lesson adjusted ebitda is nothing profitable cash flow >> yeah. >> i liked how tough he was, by the way, because that's what you want out of a cfo. you don't want some guy who says, you know what, let's asterisk insurance we don't have to pay for -- what we would asterisk, safety. >> did boeing report adjusted ebitda >> uber does it was a revenue beat. monthly actives up 17, a slight miss, like lyft, but it's not being punished nearly system >> somehow they got the costs under control. lyft is saying they need to pay a lot more for drivers so maybe they would go to amazon. >> that's still terrible

look at that stock >> david, it's relatively less terrible, it's adjusted terrible airbnb is up 11, why they're making money >> down 50% for the year >> we talked about expedia yesterday, for the year, uber down as well >> 50%. >> that's one year i mean year to date. what's happening in the opening trade? disney, the theme park, our parent as well >> disney should come back they've got some good movies coming out people still going to the movies they're packed but people don't like -- coming good will charge for fox what do you know of it >> i don't know. >> just guess. $71 billion deal >> it was a very large deal. it will be a large number. >> 60% >> maybe >> what does that say? >> are you giving me a number that you know? >> no. i'm just saying the balance sheet was remembered and it's hard to rebuild a balance sheet

if you're mickey and minnie and pluto. >> that deal was done for direct to consumer, which now is i think there are a lot more people wondering about the ultimate profitability of that business, not just in this industry but all to reach their customers, to find new customers, which gets back to apple's privacy policy by the way. >> ties in with roku and apollo. >> exactly >> a piece of some library >> let's just say it oil. i mean, faang, the only faang that matters now, diamond pack went to a 9% yield pioneer. they've chosen to be companies -- responsible companies. meantime, remember there's war going on in russia >> sure is oil is ripping again >> ban russian imports germany says they're on board but it will drive prices higher. slovakia and hungary say we

can't support it or we need a three-year exception >> natural gas >> it's oil too. natural gas -- >> natural gas prices are uneconomic >> securing new supplies and making sure you have access to them at all times is not an easy thing to do. not talking about six months but some are three years >> back to something you were cogent about >> thank you >> you're welcome. look at a stock like -- you're thrilled it's only down a couple bucks. netflix, only down four. they must have renewed that jay powell sitcom. data down three. >> caribbean down 2.5% >> i'm talking about a bermt level selling that is just incredible >> it is it's brutal. >> like, oh, nike was only down three, david >> when does it end, jim

that's what everybody watching wants to know. when does it end >> when they renew jay powell. cliffhanger. season two, jay powell >> i might pay -- what does netflix cost now $14.99. i don't know i was borrowing it from you. >> don't tell them that. they'll disconnect you >> you can sit through a few ads and it will cost you less. >> i'm considering family. >> you're on the plan. i'll take care of you. i got you spotify too. don't you worry. >> i've been using that. i'm sorry. it turned out to be kid' flames plus one >> i've been wondering about play daily play list >> we'll get out of here so rick can give us pmi in a couple minutes. but energy is leading this morning, up almost 20 v 2% keep your eyes on bonds today. press conference 259:30. adp coming in light.

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welcome back to "squawk on the street." rick santelli with more breaking news our s&p global pmis, april finals replaced the midmonth reads for the service sector was 5 55.6 a nice improvement we see big imflooucht the composite pmi, midmonth read 55.1 it moves to 56.0 that's the second highest read of the year on the service index, excuse me, on the composite, and that is quite important. we have yet to do services at top of the hour, but it certainly looks as though we may also see some improvement there. "squawk on the street" will tu itwmites. ” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

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welcome back this was earnings from yesterday, but you may remember the numbers on the face looked good but the market didn't react well average revenue per user was not as high as perhaps had been anticipated. that goes to the larger question of how much can you spend on content and how much can you charge for it? and is direct to consumer back to the conversation we were

having even about disney, jim, going to prove to be anywhere near as profitable as the cable ecosystem? i think we know the answer to that, but you can't rely on that so you have to do something, and this is the way these companies have gone. getting people to pay direct, doing most pay direct, using most of their production for the direct-to-consumer offerings, and spending a lot of money on it on paramount. >> is it a mistake >> i don't know the answer, but people are questions the overall model. what will these spend? 17, to 20 billion? >> other parts of the world as well it's not even here >> you can amore advertise they franchises >> you can't rely on sub fees

anymore, now that the universe is shrinking of homes that want to pay. >> that's why "squid games" was supposedly -- >> i think that was the gold there just haven't been enough of them. you know, you have -- i've been watching "tokyo vice." >> i'm not familiar with that name. >> they're not renewing. it's like -- remember the netflix -- red when reed said we never had a bad one, we renew everything that was the golden days of streaming. >> they didn't last long, did they [ laughter ] when erv was just about getting there, they were over. how about that sky works >> how about that amd? it's still up.

>> is it d did. >> sam amount of year. and it's just ridiculous, but you know what? the fact that they're up, and where we want to talk about opening -- >> janus henderson is down 14%, that's not good. eps was not good >> the beating people are taking correctly puts robinhood stock -- >> now lending shares. we're going to talk about that bob pisani >> chevron is doing well, caterpillar is doing well. taking a look at the sectors, it's energy today. oil's approaches 107, that's pushing up energy. commodity plays in general, metals and mining doing well there was a star a couple months

ago. amd is doing great banks are up slightly. they've had a terrible week overall. a modest bounce day. new highs, who is refiners, valero is at a new high. marathon petroleum, two of the big refiners devin isat a new high, coterra just gushing cash. these are the only stocks on the new high list set s&p 500. pity restaurant owners, people who have to make things from plastic, like tutupperware the ceo of brinker, of course, we're continues to navigate some of the most challenging cycles many of us have ever seen. the margins here, they were

13.9%. is that a lot? yeah, that's a 12% to 13% drop the stock moves, and they're not the only one howard shultz was talking about it as well, but there you see it, down the outlook is sun changed, but obviously the margins come down, they come down, too, and we have a fed meeting today. the big question is very simple -- has the market priced in enough hawkishness for the fed? many stocks are at or near multiyear lows the bulls are insisting inflation will peak. can i point out what powell said last week on this exact question he was asked, is inflation peaking? here's what he said. in the case of the u.s. we've had an expectation that inflation would peak around this time and would come down toward the course of the year, and these expectations have been

disappointed in the past, and now we're really wants to get actual progress. it may be that actual peak was in march, but we don't know that, so we're not going to counseled on it. here is mr. powell pointing out to everyone, guys, we don't know and we're not counting on it i think the bulls are going to have a tough time dealing with that kind of co. carl, we'll finally get an ipo worth noting on friday b bausch and lomb on friday. let's get to jim and stop trading. >> karen is doing a remarkable job at cv says obviously they're a big winner when it comes to covid shots this quarter was magnificent 820

to 840 for revenues coming up. and it's so what the so what has to end that's why i say bring on the rate hikes the way you get that, there, they set it up got stuck in the 50s and 60s but here it goes you can buy cvs, because it's doing great. >> moderna, too, was higher on the premarket, but now red. >> that's david's new theory. >> which is? >> everything goes down. >> yes. [ laughter ] >> sometimes it feels true. >> until it doesn't. what's on "mad money" now? >> nvidia is down. i'm cancelling my show just kidding resolve. gxo, because i care about logistics, and remember when i said that clorox is so bad, so,

the stock is now up eight point. she's getting her arms around the problem. it got to the point where people wouldn't even drink clorox. >> don't do that >> yeah, we can't make jokes about it. >> don't do it >> joke apology, joke apology. >> i'm fed up with the market. like with my wife, i did a joke about my wife in front of -- you know -- -- she says you had to say that i said, what was the matter? >> we'll see you at 6:00, jamb when we come back marriott's ceo in a moment.

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this is the second weakest number of the year, but again this is only the fourth month of the year the weakest was february, not a bad number, and, of course, weapon fed meeting and decision wonderfuling up carl, back to you. >> all right rick, we'll see how the market takes that one good wednesday morning, welcome to another hour of "squawk on the street." pretty tight range to open here, but coming off the pmi print, and the fed decision later this morning, morgan. >> here are three big movers we are watching we're going to start with starbucks jumping after matching earning estimates.

plus moderna moving higher, toughingly it's lower, posting $6 million in represent, the stock, hour, still down significantly. reversing course, and now down about 1.5% we'll end with amd, beat on the top and bottom line with everyone one of its -- the company issuing stronger that expected outlook. >> steve, take it away

>> david, good morning, it's an historic day, as the market expects a fast and furious tightening cycle to sharply slow the economy, and of course, combat inflation. it comes as the market is once again raising the outlook for just how fast and furious this cycle will be. >> 5 billion in monthly bleed reduction. then language in the statement to say they'll move expeditiously towards neutral. to take a look here. fed funds futures, a near 3 her

rate hike by the year end we can't keep up with this chart. on that terminal rate, these are all 25, i don't know, 50 basis points higher than they were a week ago former fed staffer bill nelson sang you're likely to be disappointed, quote, there's no reason why the fomc state or chair powell will take a position on anything other than the immediate future all we know now it's higher for some unknown amount of time carl? >> steve, thanks for that. , as the fed takes center case,

we polled our stock -- 29% favor tech, health care come in third. when asked about some specific names, joining us this morning for more. >> we spoke in december. can you update us on your thoughts >> the economy is strong unemployment is low, indicators are favorable. housing is pretty good, we have a strong economy that's the struggle.

it's a dug of war between those two factors. >> house have those things altered your view? >> i think there's three factors affecting my view. the covid, which is still with us, and i think will be with us indefinitely, will be modifying behavior the war in ukraine, which is creating supply disruptions and contributing to inflation, and, by the way in the covid thing, tough 373 million people in china in lockdown and the spike factor is monetary policy.

>> and that's got to affect to bring inflation under control. we may get a 50 basis point today, but in my view, we're definitely going to have higher rates by year end. >> i was looking at your report, from 2022, which is widely circulated pretty incredible number three, that the bond market begins to respond to rising inflation. the fed completing its tapering

with the yields now touching 3%. >> when i wrote those, we didn't have the war in ukraine. >> i think i'm going to turn out to be too low. i definitely think you'll see a ten-year move higher the real question is will the fed have to raise the federal funds rate above the interest rate -- coming down to four our five.

is there a period you can relate to, in terms of multiple revisions, does it bring back a particular period for you? the four factors i look at -- manufacturing back home and monetary policy, the confluence of those very significant factors all at one is unique it's not a sure thing that it

will drive the economic into a bear market, i think we have a 50-50 chance of a soft landing, but the challenges are well established out there. >> finally, byron, everyone is sort of invoking voelker, and that part of the '70s. the point was made yesterday over at b of a, by the time voelker was made chair, inflation had become deeply embedded, and there's still room this time for the fed to prevent that from becomic as exacerbated as it was then. >> i thvoelker was determined t break inflation. he didn't care whether we went into a recession or not. he knew that the country couldn't tolerate inflation at its then sounding levels

i feel powell will be as courageous as that, i think -- i think inflation whether not be as vittant as it was in the '70s, but it is a problem. so we are going to see higher rates. >> byron, i appreciate you helping us start the hour. looking forward to next time we talk. two other big movers are lyft and uber, both sinks this morning. deirdre bosa has more on their quarter. dee, what is so interesting about this, is they were two, in many ways, different quarters for these companies. >> they were taken as an whole -- it was different, was lyft really, the shares started to tank after the

company said it was -- uber moved up its relee to bangly say, we are not lyft we do not have to spent as much on incentives, because we did that last year. while the market may feel better there are still concerns, like regulatory risks, like taxi margin, as well as market share, right? so if lyft will be spending so much going forward on getting more driver onto the platform, will uber inevitably have to i spoke to uber's ceo shortly after the earnings call, and i asked, what makes you so confidence that your strategy is right. he said our scale in global position is just a superior business proposition so i think share comes naturally. it may put competitors in a position where they have less to

spend. today he's pointing to the so-called super-app strategy he says they're able to cross-sell in this market, in particular, investors don't necessarily want to hear about adjusted ebit dat 3r069able. they're more focused on income i asked fame this they're going to get there he said 100% we said we would get to ebit dat profitability. we did so, he said earnings profitable is next, quote, it's absolutely going to happen, and it's not going ton in multiple years.

we have a lot more coverage next hour on "techcheck. bill gurley at 11:00 a.m. eastern that kicks off as we head to a quick break, here's a road map for the rest of the hour, a look at consumers, food prices continues to soared. we're going to discuss with the ceo of i hod and applebee's parent company shares of marriott are moving higher. ceo will join us later this hour. mortgage rates continue to spike. home affordable is nearly the worst on record. more as "squawk on the street" continues in a moment. ♪ ♪

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welcome back to "squawk on the street." we're taking a look at the spdr aerospace and defense etf this morning, ticker xar. it's down about 0.5%, trying for its third gale of gains, as, but with the fed poised to high rates today, the defense sector has not been immune to cost increases, either. this is just a short wile ago at the economic club of washington, d.c. >> we're really trying not to nub or prices.

that reduces the buys pour of the government, and increases the burden of the tax pressures at bay they have seen prices soften, and speaking to the di234578ics at play after president biden visited lockheed just yesterday the lockheed raytheon javelin missiles as well as the stinger anti-aircraft missiles really highlight the challenges involved in boosting military readiness, as the u.s. emerging from the pandemic, and materials and parts -- or the parts still being made, that are still being made are costing more. all of this factors in, as

northrop, lockheed, raytheon, also others look to recover. at least where that conflict is concern, it's very much the reason why they stocks have cup off their highs in the last few weeks. david? interesting, morgan. the s&p is in negative ter territory, nasdaq down 1.2%. there it is, energy, that's your bright spot, beginning to become a larger percentage overall of the s&p, and these keep going higher of course, oil itself is also up 'rth mnias 4% isorng wee back after this. ♪ ♪

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an earnings beat despite ongoing challenges first on cnbc, john peyton great to have you back on the show >> thanks, morgan. good to see you. >> given the fact that both applebee's and ihop comped sales, walk me through where we sauce those increases, how much it suppose to the ongoing health of the consumers. >> like you said, we made bold choices and smart investments over the last couple years, that we think are paying off. like you mentioned, double-digit sales for applebee's quarter advise the last. we're at a time where there's economic headwinds and tailwinds, right as we've been speaking about all morning. while there is inflation and

fuel prices, supply chain issues, there are also some encouraging consumer stats that i think are helpful to share you know, the first is that the real wages for the bottom quartile of earners is outpaying the other three. our guests earn under $75,000 per year, and that's helping them in part combat the inflation issue. the other thing is qsr pricing, morgan, has risen faster than full-service that was favorable for us as well when you look at the cpi index, the cost of eating at home is growing faster than the cost of eating out the last thing i'll tell you, we look at a lot of research about consumer intent to return to restaurants, it remains at an

all-time high. at a time when we're all trying to sort through this economic data, there are interesting points that are supportive of the guest behavior we saw in the last quarter >> those are some interesting statistics you have just put out, but in therms of labor, and so the di234578ics we have seen there, are youable to get enough workers are you able to have stores open as many hours as you'd like to see? that's the challenge at a time when you're still seeing encouraging guest behavior, we're only about 90% staffed nationwide it doesn't affect our ability to

open to full pre-pandemic hours, particularly late night hours. it also prevents us from turning as many tables and seating as many people as we could during peak hours, like breakfast and brunch for ihop on weekends. we have to focus not only on recruiting, but reextension tension. we trying to make bold decisions to make our workers more productive you know, we need things like that for the future to help our servers and our back of house cooks be more efficient.

>> although, john, we've been watching that technology, especially in areas like qsr, but inevitably there will be franchisees who say, look, it's a great idea, i would love to do it, but i can't afford it right now, it's either the cost of the technology or the other input costs. isn't it adding friction >> when franchisees and franchisors work best is when the franchisor can demonstrate roi on hoover the initiative is. if it's in this case a robotic arm to work the deep fryer if we can demonstrate through testing and learning there's an roi on that, then our franchisees will be on board all day long it's when we say, do this and there's no business case, that great the friction

our relationship is now stronger than it's ever been s because of covid we've had to all work together to navigate this once in a lifetime event, it helped align us around what is important, what is strategic, and takes the notice amp from our relationship. >> finally, i do want to talk about food prices, because in some way also, especially with everything we're seeing play out in eastern europe, and the impact on agricultural commodities, there does seem to be a growing sense though the worst is yetto come. are you already starting to have a hard time getting your hands on certain types of ingredients? >> we're seeing that price pressure and like i mentioned, for our customer, our brands are all about delivering great value we need to make sure we worked

with our franchisees to stake in that zone, but prices last year in our restaurants increased about 6.5% this year we're forecasting 13% to 16% for the year. >> wow with 20% to 22% in the first half of the year we think it will moderate in the back half. that translates to what we believe is prudent, responsible increases to make sure we stay in that value proposition. typically pre-covid our franchisees raised prices 1% to 3% a year. last year they raised prices 3% to 5%, just the last quarter it's about 5% to 8%, which is not entirely covering the cost of food and labor increases, but i think good choices to make sure they stay in this value zone form one of the things that's hard to get now is the creamer cups, which is a big deal for cups of coffee at ihop.

it's because of the metal in the little flip top is hard to get right now, for obvious reasons so, you know, we have to inventory creamers to make sure we can meet demand thanks for joining us today. >> thank you. as we look at the top gainers, though the index itself is down about 11 points. starbucks is in there. u.s. comping did come in better, at least one upgrade, and names like amd and marriott not far behinds. in fact, closer to 29. we're back in a minute

ru russia's ground offensive

continues to stall artillery and aircraft targeted fuel and ammunition depots, including in oil facility. ursula banned an oil on russian imports. she says it should be implemented in an orderly fashion without time -- all 27 countries in the eu would need to approve the ban, but to -- they may need to get an exemption. a 23-year-old man has been arrested for allegedly running on stage and tackling dave chappelle. a replica gun that could eject a need blade was found on him. checking in on the markets, an hour into trading, s&p down 16, obviously some carts being held close to the vest

two-yearese surging to the highest level. got the ten-year above 3 for a third straight day. >> well, i thinks it's not so much for the day -- they are aware of this. that, whatever they say today, or they're because when you're behind the curve, it's not enough just to get back to neutral. given that the inflation is high

and it's going to stay high, that they're going to have to go, to positive real interest rates, not all that much they're going to have to get to something like5% interest rate at some point. that's a real problem. >> how does it tie in with qd? i think the issue is clearly they're going to be tapers but i don't think that's the really important thing. the real issue is interest rates. that's unfortunately the problem they face. they also deserve some of the in it's really now they are

getting -- by reality. >> yeah, which gets back to then the question of whether you can engineer a sort of soft landing. what do you think? >> i'm very doubtful they can. this is the problem they face. soft landings, by the way, it's not true that they can't do it, they have done it, but never in a situation where inflation is getting out of control they have done soft landings, they had credibility to keep it low and do preemptive policy to keep it under control. i was inside the fed in '94-'95, and that's exactly what we did testify quite successful the problem is this is a situation that more came from the '70s, it's akin to where they let inflation get out of control, and the result is that the credibility is actually questioned, and in those cases, that's not when you can do a

soft landing easily. voelker got out the baseball bat and had to ray interest rates and it created the worst recession up to that time though i don't think the situation is nearly that bad. they've got to get thing back under control. i think the answer is the probability is quite low we'll get a soft landing >> so then i have to ask what do you expect you say it's not as bad, but that could be pretty bad >> absolutely. yell they were brilliant, by the way,

they did. >> and the fed basically taking the view they didn't have toe preempted against inflation, for reasons which i think were incredible they're not going to make manage takes of accommodating this and not tightening, but they're between a rock and a hard place. >> frederick, looking at the jolts data yesterday alone, you can make the argument that the labor market is beginning to overheat are we officially in a wage/price spiral in if so, how real is the risk that inflation is already entrenching here? i i this think the risk is very

high pardon of the fed's mistakes, which again i think is a huge mistake but will come back, and they haven't done preemptive policies they also thought that it was 3.5%, clearly a big mistake. it's been very, very tight, higher than that, unprecedented cases of people not being able to fill jobs, and that's -- this is exactly the environment where wage prices spiral can develop, and they have to stop that they know they could allow what happened any '70s. it's going to likely a recession is quite high in the near future how do they get up to high interest rates, the recession comes early, they may back off of it. but right now the economy is going gangbusters, and that will be tough on the economy at some

point in the not-too-distant future. >> finally, randy quarles gave an but view yesterday, where he argued a lot of mistakes were made, but part of the problem was the white house's delay for announcing a second term for jay powell is that an aggravating factor? >> no, i don't buy that at all the mistakes were basically a mistake in the policy framework. this is something i described in detail in an op-ed i had in "the financial times" in january. i can tell you, when we had four -- really understaffed in terms of governors, and that did make a difference. the capability of making decisions is not any different i'm not saying that it's a good thing, but i think it's a minor factor the fed not if they have an

acting chair and two governors, they can do it it's not optimal, but they can do it. and, you know, not the 70s, which is terrible, but still, a serious mistake, and it's good deal to create huge problems, and they have a tough situation for them this is life, you know my mother told me it's better to be lucky than good, but it's really bad to be unlucky, which i think is what's happening with the ukrainian war. >> frederick, good to see you again. we'll talk soon. my pleasure. after the break, week tale with the ceo of marriott on the hotel operator's latest quarter. we'll be right back. ayitusst wh those shares are up 2.5% but your staffing plan needs to go up a size.

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well, marriott reported an earnings beat, the company seeing the largest surge in demand seema has the ceo. >> fresh off the earnings call, welcome back thanks for joining us. good to be back. thanks for having me strong numbers luxury remains a stand outamong the highest. it also costs a lot more with average daily rate 27% above pre-pandemic levels. one question that continues to come up, is this sustainable environment where inflation is becoming a bigger concern? in fact, in the quarter we were up about 10% by you think what

gives us continued optimism is the recovery we're seeing in the other two segments in groups, certainly, but also in business transients i want to get your sentence around the shorter booking window what kind of color can you provide us, from business travelers, clients that you speak to, at a time when. >> i think it i just was in europe look exceedingly strong, both in our fly-to and drive-to leisure destination. we see really strong demand, so

we feed agreed about the summer. internationally, tony, what are he seeing? it seems like you've seen automatic regions, except china. it really will relate to how well the chinese government handles their covid policy even great markets like shanghai are shuttered right now. that's been terribly impactful to demand patterns as brought vaccination distribution occurs as borders open, maybe the middle east is the best example of that we saw meaningful rev par improvement over 2019 in the quarter, and we expect that to continue through the balance of the year. >> you just talked about strong pricing, we know it's costing more to travel in general right

now. when you do raise prices, how sticky are the increases >> we think quite sticky we've been really encouraged by the speed with which pricing power has returned in the haas two big shocks, those being post-9/11 and the great recession, it took between four and five years for pricing power to really recover. so it's really remarkable that two years after the start of the pandemic we're talking about pricing meanfully ahead of where we were in 2019. i think that really i89s the depth of that pent-up demand we're seeing around the world. >> just in temples of tiers, proa socioeconomic standpoint, where are you see the most strength high-end travelers? or across the board? >> it's really across the street one of the things we mentioned is a cross-quality tiers, and

across types the markets we're seeing broad recovery of travel. that may be in our select service portfolio, all the way up to fly-to luxury resorts and city hotels. >> regarding business travel, tony, one thing on the call, larger companies have recovered more slowly than smaller-sized businesses why do you think we're seeing that discrepancy >> a few reasons, i think. number one, many of the big urban cities where those companies conduct business have a little slower to open up i think, number two. some of the big multinationals continue to be focused on managing travel cost, a we'ring collaborative with them to help them achieve both objectives, getting out and seeing their customers, and being thoughtful about the environment. your strong numbers follow

airbnb numbers overnight how do you respond to that is that by just investing more in the home and villas platform? you have about 57,000 properties, or do you just make that hotel offering, better, stronger loyalty customer what's the answer? >> what we hear from our 164 million bonvoy members, as they're getting back on the road, the quality of the accommodations, the quality of the service, the certainty of service delivery, those are really important to them as they make their lorjing selections. i think our ability to deliver on those factors consistently is driving the strong numbers we reported in the first quarter. >> we'll be watching your numbers to get a sense of how strong the consumer is in this type of environment. tony, thank you for joining us today, tony capuano, ceo of

marriott, thank you. seema, thank you so much don't miss another big interview coming up on "techcheck', legendary bill gurley will expand on what he tweeted a couple days ago about valuations we'll talk uber, along with poed does expected to talk about economic growth and deficit reduction. stay with us

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it's been a rough year for home buyers as mortgage rates hit their highest level since 2009 we're going to take a closer look next. first, let's get a check on the markets which have largely given up their early gains as in investors await this afternoon's fed policy decision and that news conference and, of course, softer-than-expected ism services data. this morning the dow just barely hanging on to gains, up 37 points the s&p 500 is lower and the nasdaq is down 1.3% right now. stay with us

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welcome back to "squawk on the street." home affordn't is nearly the worst on record as mortgage rates continue to spike. our diana olick has more >> the federal reserve played a

massive role in fueling the pd-induced housing boom over the last two years and now it's doing just the opposite. when the pandemic started, take a look, the average rate on the 30-year fixed dropped from just over 4% all the way down to 2.75 it set more than a dozen record lows in 2020 alone and rates stayed low through the end of last year. why? because the fed not only kept its key interest rate at zero, but it also restarted its large-scale purchasing of agency mortgage b-backed bonds and holds 30% of them. big fed demand kept mortgage rates low. prices up nearly 34% since the start of the pandemic. low rates give buyers more spending power but now the 30-year fixed has spiked up to over 5.5% just in the last few months because the fed stopped buying mbs and is about to start selling off its balance sheet in addition to raising its rate which pushed the ten-year yield

for home buyers today with both higher prices and higher interest rates, the monthly mortgage payment for the average home is now about $1,800 more than it would have been for the same home at the start of the pandemic as a result 95% of the 100 biggest u.s. markets are less affordable than their long-term levels that figures was just 6% at the start of covid david. >> diana, thank you. as we wrap up, morgan told you the nasdaq comp is the chief underperformer today down 1.2% you can see it right there down 26% for the year. plenty of hedge funds down even more than that, some doubling that don't forget the private investments that have come down as a result. didn't want to end with netflix, uber and lyft. we talked about the lyft numbers, on uber as well

deirdre brought you that raising the question, how much do you have to charge to actually make money? they seem to have been pushing to a point where it's already very expensive perhaps for all of those services. yet, the real question is about long-term profitability continues. that's going to do it for us on "squawk on the street. "techcheck' starts now good wednesday morning welcome to "techcheck. today amd trusts the processing, sales jump 70% airbnb says investor is here to stay, booking rebounds, stocks are higher all eyes on ride hailing companies. once again chasing growth with big incentives and will uber have to follow t. company pushed up earnings to get in front of all that derrick bosa says he