inflation, but then with china, how are we going to handle that? it's a lot >> issues that haven't gone away >> if we really thought about it all the time, we would sleep less than we do. make sure to join us tomorrow. "squawk on the street. it's coming up a year ago during the tail end of the pandemic, amazon had 1.1 million employees in the u.s. that's about as many as in the armed forces how many of these people does it need now the same amount? do you think amazon needs as many workers waiting for boxes, waiting on our amazon deliveries it's not just retail amazon that's under assault, it's web service business also slowing, so again, if there are too many people, they need to let some people go. even if their sales stay the

same, their earnings still can't grow as long as they find ways to cut costs and that would be enough to make this market happy. >> that's jim from last night, before the jassy memo. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchange david has the morning off. futures lost ground after adp comes in hot and jobless claims coming in below estimates. m plenty of fed speak today. amazon's belt tightening, cutting more than 18,000 jobs. the latest company to ramp up cost cutting watching yields climb after comments from esther george a few moments ago. s signs the fed does remain in hiking mote, and silver gate plunging, customer deposits plunging on what it calls a, quote, crisis of confidence. let's begin with amazon announcing plans to eliminate more than 18,000 jobs. andy jassy said the company stores and human resources teams are bearing the brunt of the

cuts he says, quote, amazon has weathered uncertain and difficult economies in the past and we will continue to do so. these changes will help us pursue our long term opportunities with a stronger cost structure, however, i'm also optimistic we'll be eventful, resourceful, and scrappy in a time where we're not hiring expansively and eliminating some roles that showed you you were in tune with what needs to be done >> i don't think they're done. 18,000 is a fraction of what they have to do. they added a huge number of people last year all companies that added, salesforce, alphabet, they have too many people. the economy, while these numbers show is expanding, is not expanding. particularly for these companies that rely on advertising, rely on consumer spending and those that are relying on enterprise being created a lot of companies created businesses to be able to meet the demand of all the companies that were going to come public,

but nothing came public. we're at a stalemate the only thing that is good is more people from china are traveling. everything else, i have to tell you, when i wanted jassy to cut people, it wasn't like he watched the show and cut 18,000. if he watched the show, he would have picked 50,000 >> is that a number you want >> look, it's like 130,000, 140,000. look, apparently, they hired 300,000 people we don't know the exact numbers because it kept changing, but they were ready for the ramp a lot of people didn't see the fed starting to get tough, so they really felt, wait a second, let's start hiring at least when you read the ohahna memo by marc benioff, saying he was cutting family, he said we overhired. alphabet overhired amazon overhired the only guyed who bit the

bullet were meta >> as you said, with becky a few moments ago. was it an appropriate level at meta >> no, unless mark zuckerberg realizes, i'm going to deemphasize meta and focus on the actual meta platform, and focus on reels where if tiktok goes the way of other things that we're trying to do to china, they have reels >> it does bring us to, we're going to get to the downgrades and there are so many, but one example is the american express downgrade at stevens where they're starting to talk about low caperal ratios relative to peers, lower reserves relative to the space and that's when these layoffs are going to come into focus, right? >> absolutely, but i do think american express is a controversial story because others like the stock, they have the better balance sheet versus capital one, which has been through a lot, all right. ally financial, no thank you

american express, goldman sachs liked it they see a top line increase american express, this is not 2008 where they were in trouble. they're in good shape. but i do think, carl, that the crypto world is falling apart. silvergate is falling apart. when i look at the crypto world, i keep coming back to my friend john stark who was chief regulators for the internet and at the s.e.c. for 18 years he's adamant that you have to stay away. stay away, even now. he talks about collapse seems likely for some of these i don't want to mention the ones because collapse seems likely is too scary to say on air, but the fact is that if you read him on linkedin, you'll see i don't think it's my role to say. >> you did tweet this is going to continue. the ancillary elements of crypto are going to continue to get hit. by the way, the silvergate news,

40% head count reduction q4 deposits or withdrawals, they were trying to cover $8 billion in withdrawals >> right it's not a big company again, what i want to do is distinguish between 2008 and now. a host of people saying good things about the banks that were in trouble bank of america likes goldman, likes wells. downgraded pnc, i thought that was curious. they like goldman and wells. these are not the epicenter of trouble. the epicenter of trouble this time is anything crypto, and also as i have been saying for months, the epicenter of layoffs is silicon valley. we have not seen enough. we have not seen enough closures, not enough bankruptcies which is why the job hop number was so big in that darn report adp report, i don't know if you saw the job number, it's double. remember, we're waiting for people to say, i got to stay at my company because if i job hop, i'm a loser.

no, you're still a winner if you job hop, and the only thing i saw that was significant this morning in terms of really cutting jobs is bed, bath, & beyond growing concern number 55,000 people last time i looked, working at bbby, those people are going to be job hopping and not going to find better numbers >> that was the news out of bed, bath, preannouncing fiscal q3 numbers. >> another meme stock. last night i was working on a guy nailed by the s.e.c. justice department he stole money from a spac, invested it in meme stocks then created a new spac and invested that in crypto. so this is -- we had some era here and that era is put to bed but it's being put to bed at a pace that seems a little rapid that's why you can come in here and see rates going the wrong way, amazon cutting people but it's arbitrary cut 18,000 people, they hire hundreds of thousands.

18,000 salesforce was real. salesforce was real. they had starboard in there telling marc, listen, you have real fat >> is there -- there's two schools of thoughts on layoffs one is you don't want do it more than once. you want to do it once and make it decisive. the other is maybe you want to do it gradually to see how bad this downturn, if we get it, will be. >> that's okay i mean, i think that amazon -- you had to look at how many they hired last year. let's talk about alphabet because that's the most glaring. what did they do they committed $9 billion to building new centers, data centers, and they committed to hiring 12,500 people then the economy fell apart. so what are they saying? when are they going to say it? they don't need those people it's very hard to hire and then fire it's not what we do in this country. but the institution must be preserved.

and i think that when you see alphabet at 87, you see the chart, you see how they're doing, you see advertising oriented they are, come on it turned out they were so cyclical carl, we heard for years, second inning, noncyclical. now it's game over really cyclical big difference >> there are cycles and then there's covid. that threw typical cyclical playbooks out the window >> yes, now i will say the difference between 2000 and 200021, thesis companies have a lot of money and they can do it. which is why they ought to do it let's go back to mark zuckerberg the guy recognized, wow, we're in an advertising world. remember, he said the things will get very, very tough. he really fired a lot of people. i mean, big, because i think he didn't want to come back and whack it again, but he may have to with spending billions on something that so far is noncommercial. >> it's funny. you think back to the initial

zuckerberg memos where we were sort of taken aback by his level of drama in terms of what he thought the economy, the macro was going to do. remember that? >> oh, no. it was wild. i mean, i remember speaking, checking into companies and saying listen, guys, is he off the reservation? >> him, restoration hardware, i guess -- >> bought a lot of stuff >> he went and bought something like you and i go into restoration hardware and buy everything they have rh bought a lot of stock during this period. gary friedman was very early on, but the stock got to a level where he felt it was insane and he just bought a lot of stock. i want to come back, before we get too negative everybody is negative, the research today was slit throat negative when you see that, they can't all be right i mean, when you have so many people saying bad things, they can't all be right a lot of this, let's use this

moment to cut price target, cut price target the price targets were very unrealistic. at the same time, we have themes that work. oil is going to work, drugs are going to work. >> we do have conagra today. six-year high. raised guidance. >> i like a lot of stuff that conagra makes. i think conagra is the kind of company that works why does it work because, well, they hiked a lot of prices. and the prices held. campbell's soup, they hiked a lot of prices and the prices held >> conagra is amazing because volume fell 8%, but price was up 17%. >> when the fed sees that, they're like, conagra, slim jim. look, conagra has -- they're in your pantry. and they do very, very well. and i gotta tell you, they're the kind of company that, this is what the fed wants you to trade down they want you to trade down.

and you're not trading down. the country is not trading down. >> well, i think the research today would say maybe they'll start in apparel with downgrades of tpr, downgrades of nordstrom. >> that is happening >> but not in food >> not in food and that's major, major disappointing. i mean, the price of butter. if you buy organic butter, you ought to switch to inorganic butter it's time to buy curry gold with a lot of salt in it. my wife paid $10 for butter. i said you're buying that butter that's good for you? are you out of your mind there's no good for you butter $10, give me the bad butter. when we were growing up, imperial margarine imperial margarine the stuff was made of lard but they called it something else. things are too expensive and the fed is not appeased. >> we'll talk more about the fed speak today. we have esther george under our belts this morning we'll talk about some of the

downgrades and get to tesla as well under pressure again worries about china demand after their december data. take a look at the premarket took a hit on adp, which came in at 235 we were looking for 155. we're back in a moment (swords clashing) -had enough? -no... arthritis. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon.

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with a screen the size of your hand. home internet shouldn't be a luxury. everyone should have it and now a lot more people can. so let's go. the digital age is waiting. big day for oddoes ford is out with sales figures for december let's get to phil lebeau at ces in las vegas with the numbers.

good morning, phil >> good morning, carl. in december, ford sales rising 3.2% so it was a healthy month in terms of ford sales, especially when you talk about the f-series pickup truck for 2022, sales however were down 2.2%. not a surprise a number of automakers reported a slight decline in auto sales last year. given the number of the factors that were moving against the industry ev sales up 126% in 2022 yes, it's coming off a low number, but ford has momentum. it believes that now that it's number two in ev sales and you start to see the ramp-up of production in lightning, those ev numbers will grow even further. in terms of traditional f-series sales they were up 20% in the month of december, but down 9.9% for all of 2022. and remember, the f-series that still is the vehicle that pays the freight at ford in

terms of profit per vehicle, but overall, a good december, a good way to end the year for ford with the f-series up 0% and sales up 3.2%. back to you. >> phil, this is very interesting because you did mention something that is not just a little ripple you mentioned something ev, which to me says look out, tesla. they're actually a competitor in 2023 >> i think they're going to be more of a competitor i don't think they're yet at the level of tesla i think the lightning has strong order flow and they have shown that they're going to be ramping up production. you're also going to have a number of other competitors coming into the market so they're going to eat -- all of them collectively are going to eat into tesla's market share. they're probably going to end the year about 60% market share for 2022 most believe it's going to come closer to 50% for 2023 roughly speaking, depending on how many, vs the automakers say

they're going to build, they actually put out this year they're eating into tesla's market share ford i would not say at this point is a true competitor one to one with tesla. yes, the lightning is gaining momentum, but they don't have really -- yes, nay have the mustang, but they don't have something to compete with the model 3 and the model y. and that's really where tesla is eating everybody's lunch in terms of ev demand right now >> although, phil, i want to get your take on tesla's china numbers for december lowest in five months. down 44 from the prior month i was fascinated by your interview earlier this morning with bmw trying to close the space between them and tesla >> everybody is trying to close the gap between themselves and tesla, with regard to china, i would say this you don't want to take just one month and say it was one month, there were covid restrictions, a lot of things happening in terms of lockdowns and demand. keep in mind they have been cutting prices in china.

i think that's more important than the fact you have one month where you have a big drop in sales. we can see the delivery rate increase in the month of january if the covid situation improves in china nobody really is quite sure what's going to happen there i think the pricing is far more important there. with regard to other automakers, they do believe as they bring more on these models on the market, they will close their gap, the gap between themselves and tesla. who is going to emerge as the truest of the true competitors i think we're at least a year and a half away from finding out, whether it's general motors, volkswagen, ford, whoever it is. >> yeah, that kind of puts a point on just how important this year is going to be for the industry overall and tesla in particular phil, thanks we'll talk more later on >> we'll get cramer's mad dash as we count down to the opening bell see if the futures can claw their way back out of the red post-adp and a couple more fed spearsat oth mnike lern isorng don't go away.

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. is this the mad dash >> we heard it was cramer's mad dash >> we have to go >> three minutes >> the semi-conductors >> we thought the mad dash was us good-bye >> love you. >> come back >> we can't. we have to go. >> that's called storming the stage. >> that was the mad dash yesterday. and as you said, jim, they're welcome any time >> any time because they're two of the greatest people in the world. we both know them on camera and off camera this is not a today call, but bed, bath, & beyond when you get

a growing concern letter, that means you're in real trouble and you have to close a lot of stores, many, many stores. i know that from the work i have done that target has the most stores that are next to bed, bath target we know yesterday, people cut numbers and were afraid target has too much inventory. but when this is when the smoke clears, target is the winner off of the bed, bath problems. and there will be winners. it's just that they aren't calculated instantly >> right there's a note out, we mentioned the downgrade today of tpr, nordstrom. the idea that premium had a great year in apparel, and it's going to be tough to repeat that where does target fit in that? >> target had too much inventory and then they got rid of their inventory. one of the reasons we bought a lot of tjx for the travel trust. i would say you have a leg down. and then you have to look at it. because once you have this clearing event, i don't think that target is doing nearly as bad as the analysts because

they're not projecting any problems with bed, bath, and those problems are going to play right into the hands of this company. >> interesting whether or not we see multiple share donors in retail as we make our way through the year, right? >> people want dollar tree and dollar general you go to dollar general, they don't have a lot of power. the ones that they -- i have to tell you dollar tree when they bought family dollar, they had a lot of apparel you go to dollar general, there's not much for a dollar. dollar general is not a dollar store. and but it is a trade down store. anything trade down is going to work, and that's why the fed is so puzzled about food. why are people still paying up for food why aren't they going to costco, why are the conagra brands which are good brands, able to maintain and then increase prices despite volume reductions i think what happens at a certain point, it unwinds. i look at target and think, you have premium retailer that is going to go down, and you want to buy it because one of the

things people end up doing is at some point, this recession, everyone is so worried about, ends and target is a long term winner i don't think anyone disagrees with that. short term, no long term, yes >> we'll talk more about esther george said this morning about her own view we'll get the opening bell in five minutes you can catch us anytime anywhere, listen to and follow eng llodstk on the street" opinbe pca back in a moment

we understand that high inflation is going to require our action so we have been moving our forecast up to higher levels you saw that in the most recent dot plot that came out in december and i think holding that until we get confidence that inflation is actually coming down is really the message we're trying to put out there i'll be over 5%, and i see staying there for some time, again, until we get the signals that inflation is convincingly starting to fall back toward our 2% goal. >> that's kansas city fed president esther george with

liesman last hour, offering her take on rates. we heard her say above 5%, not forecasting a recession in the united states. >> i think that's actually -- that's where i am. i think a lot of people are at that level, which is one of the things we were talking about let's use target as the analog here if you don't get a severe recession, you do have things you should be buying by the way, you should also buy the banks. if you believe in her view and i think that's one of the reasons people are reluctant to sell the banks banks have been going up all year i think it was very reasoned commentary that was not a call to action as much as a consistent view even with the minutes. the fed has been very consistent here the economy is a little too strong they're going to do what they can to slow the economy down they don't want to bust the economy. to me it does seem like one quarter where you get a recessionary number, you need two numbers that are not recessionary i simply don't think it's worth panicking over

i see a lot of people dumping stocks furiously off this. why? i thought that's what what they were going to do and she confirmed it >> makes some sense. i have seen one firm up their numbers for payrolls tomorrow to 275. >> too hot it's still too hot raise, raise, raise, and not impact i think it's just an extraordinary testament to our economy, what a juggernaut it is, and then we also have a lot of fed infrastructure money coming but look, the federal reserve can't be happy with how strong the economy is they're trying so hard to slow it down, but not crush it, and people are going to start thinking they have to crush it >> by the way, here at the big board, constrained capital celebrating the launch of the esg orphans etf, partners with schools in low income areas of

new york city. will amazon be a tell this morning? how important is it? >> don't know. i don't know i do think that -- look, i'm looking at some things that are different than individual stocks i'm looking at how the oil stocks are bottoming, how poorly amazon is acting despite the firing of people i'm looking at this overall gloom that has descended upon us because we know we have to go down before we go up i don't have an answer i don't have an antidote to that >> interesting piece in the journal about insider buying basically, the lack of it, and the ratio of buying to selling has been going down for six straight months. longest decline in two years >> look, i think people just -- people are hunkering down. everybody is hunkering down. everybody really just feels like, you know what, we're in a situation where we know we're

going to have recession. we're going to have a housing recession, a retail recession. if we don't have a recession, it's going to be good buys but right now, it's good-bye it's good-bye versus good buys and the sense right now is it's good buys. i don't want to join the crowd and just bust out, but if you look at walgreens report today, dow stock, i thought for sure that they would have something to hold your hat on to say it's worth buying and they're just not giving you anything the numbers just aren't good ross brewer, ceo, doing a terrific job they're just not good. and we're going into the jpmorgan health care conference and i think we're going to say, oh, at least there are stocks to hide in, but it's a hide and seek game. >> we got a downgrade this morning. one was the bioprocessing business slowing as the covid

vaccine slows. >> we own it for the long term, why, because it is one of the best run companies in the world and always has been. carl, this long term is killing people when you say you're owning something for the long term, that just basically is considered to be an excuse and there is no excuse for owning it. i come back and say look, i know it is a high multiple stock. is it a too high multiple stock? historically, no, but short term, anything goes. and if it's got a high multiple, we say no. it's such -- like, also, by the way, every chart is bad. >> yes >> every chart so you look at a chart, you say wow, that's rolling over, that's rolling over oh, there's meta, not rolling over >> i'm just trying to think of charts that don't have a rollover merck, conagra we already mentioned. there are not that many.

even hershey and knb have shown weakness >> kimberly has tradedown possibilities. hearsy has some tradedown, not that much. i do think that the supermarket is going to be under assault they can't keep this up. they're just not able to maintain these price increases we're going to find a way to beat the price increases >> that reminds me, barclay's today, chipotle got another top pick >> starbucks has china i think one of the anomalies we're going to see is china is going to go everywhere, they're putting one up every nine hours, starbucks. that's very positive chipotle may be too expensiexpe. i have gone back and forth, i don't think chipotle is too expensive, but then again, i'm very fortunate, doing okay in life i think that there's going to be chipotle going down to taco bell, i think it's like, well, i

don't know >> you mentioned china fascinating story in nikkei about dell making a push with their vendors to get out of made in china chips by 2024 and trying to lessen the number of chinese made at least components in their pcs >> by the way, the auto companies don't want to rely on china. china has become an unreliable company, and also a company that -- a country that can't be trusted. china can't be trusted companies don't want to be there. but i think what people should be worried about is taiwan that's the 60% of the chips come from -- of chinese chips come from taiwan. you don't want to move to taiwan malaysia, people are trying. vietnam, but when you move, you don't initially get the high quality chip that's one of the problems china's got us right now but a company like dell is very

forward company, they'll figure it out they're trying to get away but it's just so hard. we have spent decades moving businesses to china. decades. >> that 30, 40 years >> so now you have to pull out of china you can't just do it when you talk to the auto companies, they're very worried. new autos are chaock full of chips. >> watching apple try to rebase their supply chain, one of the most fascinating logistics stories probably of our lifetime >> yes, and maybe that's why i come back and like the major banks. the major banks are not trying to wean themselves off china >> yeah. reminds us of the double downgrade of ally. we talked about cars with phil a moment ago if you're thinking of tradedowns, don't you have to be worried about delink waenss at least in autos >> yes, that's why carvana once again, negative there. yes. we have to worry about tradedown. people worry about capital one

i will say this about capital one. i remember twice i have worried in my career about capital one there's a man that runs that bank and twice he's the to lecture me about how things work in the world and twice he was right. yes, you can sell capital one, but he's defied the short sellers for years because he understands that if you charge a certain amount of interest, you can handle a certain amount of charge offs. go ahead, make his day he's not some guy who just fell off the turnip truck i know the stock can go down, and i do, by the way, really like the classic >> it reminds of the number of things esther george told liesman. one was she was impressed with the way in which crypto's collapse has been contained. >> yes >> we talked yesterday about institutional caution regarding crypto >> right you're talking about silvergate, coinbase, the s.e.c. still is doing now basically a quiet

sweep, but they want you out of it i think the s.e.c. is very clear, there are 200 coins and they're like, are you kidding me, and they're all securities i think you have to watch if you're in any of them. i just don't think they're the right place to be. some people were telling me, jim, bitcoin held at $16,000 i said maybe it's being manipulated. we know that market wasn't so big it couldn't be manipulated >> silvergate, deposits in q4 down 68. we talked to the ceo i think in november about the status of business here's what he said. >> as of september 30th, we have silvergate had $13 billion, a little over $13 billion in cash and investment securities that were available to support only $12 billion in deposits. another way to think about that is if all of the deposits left, silvergate has cash and securities to support all of that outflow this is certainly a deep crypto

bear market, but we don't think it's going to zero, so anywhere between zero and that $12 billion that we ended the quarter at, silvergate has the liquidity to service our customers 24 hours a day, 7 days a week >> we now know thanks to the journal's reporting they did have those assets but they were forced to sell them at a loss. >> again, 18 years s.e.c. enforcement, silvergate is a tiny club of tiny banks providing deposit fund transfers security, et cetera, serves as a crypto ecosystem that operates in a mammoth regulatory vacuum amid widespread grift, fraud to me, it's the continental, and its collapse seems likely. that's from stark, not from me but i like stark because he started -- he was the internet enforcer he's very tough. i'm getting it from his twitterer but he's been right about everything

>> jim mentioned coin. they cut the target in half. they were at $75 they go to $36 low visibility and stabilization in retail trading and then potential for s.e.c. enforcement obviously going up >> s.e.c. doesn't like them. they want to do a sweep. you have to go back to what they had to say when sam bankman-fried was first caught, which is look, we're going to do -- we're no longer accepting what these outfits are saying. and that was the clarion call to get out. and i will reiterate the clarion call >> we should point out, not all downgrades today jefferies ups oracle they say got their mojo back we like their reacceleration growth theme >> they're doing an unbelievable job. i begged her to come on because i thought that quarter was so good i also think their health care maneuver is really good. i think they're doing so much that's right and look at that chart

and the stock is very inexpensive. larry gets on, he's a genius he gets on and says, you know who these big outfits, cloud, they use they use the oracle cloud. i think that maybe people are saying, we don't need to move so fast to the cloud. maybe let's stay with oracle a little while and it's a testament to the people that run the company that they figured out a good model and they're not going anywhere but up the buy was so smart >> the other upgrade, argus upping delta we haven't talked a lot about travel demand as we work into q1 and maybe q2 >> china opened. they love to travel. i don't mean to discriminate that didn't sound the way i meant. china has been unleashed, and this travel. when they travel, they spend and the airlines will be

beneficiaries. >> meanwhile, 3800 for now, even though the dow is down 400 points, 3800 has been an important at least recent psychological floor. >> again, everybody is so, so negative and i mean, i'll give an example. i have constellation brands. and i care about cash flow the cash flow is terrific. they have a cannabis business, some people said they're reacting to the stock. i know the company well. the cash flow here is enormous people are sending it down they're sending down everything. i'll have bill to talk about cash flow, but the cash flow is better than expected but no one wants to see that now. i don't think amazon for instance should be down on jassy getting disciplined. i think 3800, the battleground >> for the time being, every s&p sector is red except for energy, with a slight gain >> energy is very -- don't

forget the fed put they are buying it the government is buying at $70. >> as we go to break, let's watch bonds as well. we'll get bullard at 12:20, i think as well. we'll hear what he thinks in addition to bostic and george. the ten-year almost back to 3.8% we're back in a moment [finger-tapping] if your work, works for your community, then you're on team earth.

welcome back to "squawk on the street." rick santelli here live with the last breaking news of the session in the form of s&p global services and composite pmi. on the services side, the final number is 44.7 that replaces the mid-month read of 44.4. it's the lowest level since august it is the sixth th month in a under 50 for contraction and august's number on the services side was the lowest since --

august was lowest since may of 2020, the was at 43.7. if we look at the composite, it improved from the mid-month read 44.6 gets replaced with 45.0, also the lowest level since august august's read at 44.6 was lowest since may of 2020. and also the sixth month under 50 in contraction mode "squawk on the street" will return after a short break ah, these bills are crazy. she

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i was thinking the next two years are probably going to be the most challenging because we did have a lot of acceleration during the pandemic. and there's some amount of normalization of that demand and on top of it, there's a large recession in large parts of the world so it means we will have to adjust that will cycle through the demand cycle in fact, come out of it with what can be a massive growth

cycle for the tech industrial cycle. >> that's nadella on cnbc india saying the world of tech should brace itself for two more years of struggle before we return to growth, jim. >> i saw that interview. i said to myself, look, microsoft is a great stock we've owned it forever for my trust, but that was not a preannouncement, so to speak, but it was a recognition, as it is with all major tech, they're just not set up for two years of downturn, including his own company. and i think that when we see numbers from mega tech, we will be surprised to the downside come back to salesforce, it took a lot for marc benioff to hack a lot of people and to certainly close some buildings is easier no, these companies aren't ready for it they're just not ready for it. they're not ready for the downturn you said something so important, which is that do you really just

make a small cut or the big whack? these companies don't know how to fire. we're not talking about an auto company or a tool and die company where they've had to fire - >> with the stroke of a pen. >> i'm not saying they're too soft to do it. i'm saying they don't know how to do it the only guy that seemed to know how to do it really well was mark zuckerberg. now, maybe it takes -- it doesn't take a village >> right we're going to watch it closely. pretty interesting interview with nadella from our partners. >> that was a must watch. meantime, holding onto 3811. let's get to bob pisani. >> double whammy the strong adp report and esther george talking higher than longer estimates above 5%. that's continuing to weigh on the growth sectors risk-off and risk-on this is a risk-off day ark innovation, vaneck, and

growth sectors holding up and consumer staple, which mostly are value stocks, on a relative valuation holding up well. the constant rerating of the growth stocks is the major problem for the market tesla down noticeably again today. servicenow, nvidia, microsoft. it's not necessarily that every growth stock is having earnings estimates come down, although so many are, it's that the relative valuation is coming down the pe ratio, how much are you willing to spend for a future stream of earnings, even if the earnings are the same, you may not be willing, that's the pe ratio, they're dropping that earnings coming down in some cases and the multiple coming down meantime, value is holding up fairly well. most of the big valu talked about conagra, they keep raising prices, hieinz, delta,

these are all up on the year once again into the year, the old story does happen here value is freedom naturing over growth names at the same time i notice auto a relative basis the banks are holding up better. most of the big -- most of the big banks are up, even though they're down a little bit. wells fargo, jpmorgan, bank of america, citigroup at the open were still even down up on the year so, loan growth is still there we'll see what happens in the next few weeks net interest holding up fairly well for them. walgreens had the earnings report out we talked about the cold and flu season here's evidence that it was massive. retail sales, that's the front of the store, that's cold and flu personal care products, up 2.1% pharmacy sales down 3% that's very, very interesting because, obviously, this is massive sales of cold and flu products and personal care products that everybody was talking about over the last quarter. pharmacy is interesting. this caught my eye for covid

vaccinations 8.4 million in the quarter we're just ending there. look what happened a year ago. 15.6 million for the same period they did half the covid vaccinations, and, carl, 2.9 million for the third quarter. it was trending up still, i think that's a major reason walgreens opened to the downside right now i think probably pharmacy was a major reason and problem for that carl, back to you. >> we'll talk in a bit, bob pisani let's get to jim and "stop trading". >> micron is up, a little water on this one, but micron ran yesterday on a story that china may scale back making semis. there's tremendous glut at micron it's not just pcs, it's also phones those who are buying it now are betting the glut is going to end. you're premature you can be close to the good quarter, but we're not there yet. you have to have the bad quarter. those who are buying micron thinking, you know what, i'm

safe here. no you're not >> we didn't even mention the samsung consumer chief who said demand for gadgets might get better in the second half, but might be weak for the whole year. >> and yet it's samsung flooding the globe. unfairly to some degree. samsung is wrecking pricing. it ain't going away. samsung is the reason micron can't be bought right now. >> constellation tonight >> it's really about, i know the stock looks horrible, but it's about cash flow. it's always about cash flow. it's never been about cash flow when cash flow is up at these prices for my travel trust, if i were allowed to, i would buy more. >> and jpmorgan. >> yeah. look, lisa gill, it's safe some of these health care stories are safe they have nothing to do with the economy. it's where oil with the put of the spr and health care because, frankly, they can raise prices with impunity.

it's not slim jim that can raise prices, it's also drug companies. sun company, they've done a lot of good things not just say, they're charging a lot for the same thing they've upgraded >> that's a good show. we'll see you at 6:00, "mad money" with jim cramer at 6:00 p.m. eastern time. doisow35 w dn 0. don't go anywhere. we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance

policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i can't believe they're just sitting up there! sitting on all this cash. if you own a life insurance policy of $100,000 or more, you can sell all or part of it to coventry. even a term policy. for cash, or a combination of cash and coverage, with no future premiums. someone needs to tell them, that they're sitting on a goldmine, and you have no idea! hey, guys! you're sitting on a goldmine! come on, guys! do you hear that? i don't hear anything anymore. find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

good thursday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with mike santoli, live at post 9 of the new york stock exchange. david faber and morgan brennan has the day off. yields up and stocks lower today coupled with some fed speak as we try to hold 3800 here. >> we are. we're 30 minutes into the trading session. here are three big movers we're watching silver gate capital plunging after they said in a business update this morning that the crypto industry meltdown triggered $8 billion bank run. the firm having to fire 40% of its staff as a result. the stock down 46%. western digit getting a pop this morning following reports that the semiconductor company

has restarted talks with japanese memory manufacturer kioksia. and andy jassy saying they would lay off 18,000 employees that's a bigger number than originally expected. amazon specifically acknowledging it had added workers too quickly in warehouses had as consumers shifted to online ordering down with 3.2%, as the hangover continues in big tech, carl. the stairmaster we've been on has been pretty much the same, working against the heaviness in mega cap equal weighted s&p is coming up. everything working in favor of the amazons of the world and microsofts during 2020 and 2021 are going in reverse that's not just the fact of pandemic full forward, demand, interest rates, but they had a

monopoly on earnings growth, or rapid and reliable earnings growth people paying up for it. all of that is being unwound if you look at the earnings estimates for amazon, since the middle of last year, they're down 30% for this year down 30% for fiscal 2024 so, yeah, the stocks are coming in because rates are up, people paying less for each dollar of earnings the growth rates are declinidec. for alphabet, it's like 20% declines in forward earnings estimates. amazon, even though it's not a bottom lines earnings metric all the time for that company, they're basically going to have earnings this year lower than 2020 you know, it seems like it's something you don't exactly know the right -- where to make a stand in paying up for it. >> it definitely fits with the theme we got warned about in the second half of last year that is, thinking about mike wilson, for example, of morgan stanley, earnings recession and risk to the 3300, 3,000 level, as the market begins to figure that out. >> that definitely is the

scenario i think everyone has in mind coming into this year so far it's been a little stickier because the consumer has remained okay. the job market is really stubborn and weakening maybe that's a good thing. the problem is, the fed seems to want to have a certain level in mind of labor market softness before they're convinced they've gotten the market's attention on what they feel like they need to do that's why i think the market continues to twitch around, even in response to things like the adp employment number today, which usually not necessarily the key market mover. >> although typically undershoots payrolls claims at a 3.5-month-low. steve liesman talked to kansas city chief esther george this morning and joins us. hey, steve >> good morning, carl. kansas city fed president esther george strongly backing the higher for longer message. i don't want to say longer because you'll hear in a minute. saying her own forecast sees rates rising above 5% and staying there well into 2024

>> i'll, over 5% and i see staying there for some time. again, until we get the signals that inflation is really convincingly starting to fall back towards our 2% goal >> george, of course, is leaving this month after more than ten years as fed president in kansas city and 40 years at the bank. she said she's not forecasting a recession but sees the economy as very vulnerable to shock. she has two main concerns about inflation. first what she says is the tight labor market continuing to drive up wages and prices, and secondly, large amount of savings in households that could continue to power growth and spending in the months ahead. >> if that buffer of money, though, begins to be spent out, we will have a harder time, i think, in terms of bringing inflation back to our target over time. >> the outlook for fed tightening rose after yesterday's minutes and again during the george interview, and also following labor market and economic data that continues to

be relatively strong the peak funds rate now seen around 5.04% tomorrow we'll look to see if the upbeat jobs data is confirmed in the government's december payroll report. we'll talk exclusively with atlanta fed president raphael bostic right here on this show >> steve, you know, the message remains clear. of course, from the fed minutes yesterday from the december meeting, they have some attention on wanting to make sure the market doesn't overanticipate a dovish turn even if inflation starts to come down what's interesting to me, though, is the fixation on the labor market, which is clearly the first place to stop if you're trying to figure out the health of the economy and the drivers of inflation, perhaps. but don't we remember the history of in the' 90s we thought unemployment rate couldn't go below 5% without sparking inflation, spiral higher when things were good. people were confused we couldn't create 2% inflation with unemployment low i guess my point is, they seem confident in the relationship

between the labor market and inflation trends when, in the past cycles, it hasn't been that reliable >> it's true, mike everything you say, the history is 100% accurate the trouble is history is not really rhyming right now and i really go back, mike, to the time when powell gave that speech and he talked about the idea that the accelerated retirement pace is continuing. that we don't have the immigrant workers coming into the country. we're not seeing the increase in payrolls in participation and people coming back to the workforce. so, the fed is seeing a finite labor force. and it looks to that finite labor force, it looks to the idea of wages being high, it sees high inflation in the service sector, it's connecting the two and saying, we cannot solve this inflation problem until we solve the labor force problem. it's an unfortunate set of circumstances, especially, as you guys pointed out, the labor market data has been strong and

continues strong today i was surprised to see continuing claims back below 1.7 million. jobless claims, the weekly number, low at 204,000 strong jolts data, and the quit rate, carl was talking about the quit rate yesterday. we continue to get strong data i believe because of the weak trade data we have, by the way, i think -- i'm reading already upgrades to fourth quarter gdp some of whom are going to be north of 3%. that's a heck of a slowing of an economy that's almost double what potential growth is >> wow we'll see what tomorrow morning brings, steve. going to be a big friday we'll talk in a little while that's steve liesman on the heels of his interview with esther george. let's turn to the amazon layoffs. we're joined by our own deidre bosa to talk about these numbers and how they fit in the scheme of overall attempts to lower cost structure, dee. >> we talk about it every day on "techcheck," how much is enough? we know a lot of tech companies, they overbuilt, they overhired during the pandemic.

are they chopping enough wood as we potentially enter a recession to make up for that? i think a lot of the big tech ceos would tell you they would rather overbuild, overhire rather than lose market share, the once in a lifetime event, the pandemic the question is, are they scaling back enough? in terms of amazon, i heard your conversation with jim in the previous hour, 18,000 employees. that makes up 5% of its corporate workforce but just 1.2% of its overall workforce. maybe that's not enough. and i think the key question is really the worker at the warehouse level. this relates to your conversation you were having with steve liesman what is going to move the needle in terms of the overall labor force? it's going to be some blue collar jobs, which tech isn't really in. these are white collar jobs largely, but amazon is such an important indicator because you have to wonder, after corporate layoffs, do we see a smaller workforce in the warehouses? remember, this is america's second largest employer.

>> you know, i'm wondering about the implications of this effort. if they find themselves, perhaps, having overhired, but does that mean there's a lot of idle capacity in amazon's labor force right now? in other words, do they actually not need what they built to deliver on what they're doing in e-commerce, or as they cut back, are they going to have to scale back expectations somehow and how they perform for the customer >> to answer that, look at where they are cutting much of it is in human resources and recruitment. that makes a lot of sense. they won't be hiring a lot going forward. also in the online sales portion. we're not hearing major cuts maybe a slowdown in aws's cloud unit when you actually break down

where they've been hiring they haven't been in search which makes up a majority of their reeve new and profits. they've been hiring in cloud they're the number three player. feels unlikely, the ceo tells us quarter after quarter that investment is going to stay in the cloud so they can catch up with the aws and azures. a lot of folks think that alphabet is the company that will be indicative of tech at least getting close to that better efficiency. >> you know, it's interesting. tiny market cap is stitchfix cutting 20% of salary positions and close a distribution center in salt lake city. reminded me of what dan niles told me on "techcheck" late last year is that layoffs is not going to be enough we will need to see layoffs at small and medium businesses before you get the macro effects the fed is looking for

>> i think about that all the time also. even if you cut all the tech jobs, it would make up 2% of the overall labor force. however, we'll talk about this more in "techcheck." they may make up a small percentage of the workforce but tech makes up 10% of gdp if this is a leading indicator, it is going to have effects on the wider economy. you certainly see that here in a place like san francisco. >> we'll talk to you soon. let's bring in mk and partners rohik with a buy rating of 105 make the case here in terms of why you think amazon is mispriced at these levels given

the fact they seem in this retrenchment mode and people are trying to figure out what it's going to mean for the earnings path >> thanks for having me. i think amazon has not changed i think it gets stronger as we get into a downturn where we think amazon is a company that gains market share across the board in all markets it operates in that's e-commerce, cloud and advertising. so, i think as the buy starts shrinking in each of these three markets over the next 6 or 12 months, amazon is probably the best position to capture market share probably at the sake of margins. they're trying to work on that right now as we see through layoffs and data centers and fulfillment centers, but as you said, it is a market share game right now. in '24 the best stock would be the one that has the best evidence of growing market

share. and i think amazon is probably one of the best positioned companies to do that across all three markets. >> does that require that, you know, investors go back to really paying up for scale and top line growth and market share as opposed to, you know, efficiency and return on capital and cash flows and things like that >> for sentiment to be a little risk-on will help amazon i think in the interim for the stock to work, probably they need to show margin improvement. retail margins are the ones that are kind of the thorniest in amazon's cushion, i would put it that way they have been negative the last six, seven quarters. so, when revenues start to shrink a little bit, margins would decline even more. that's where people are worried the next six months. as we go beyond that, i feel amazon is right sizing itself in

a way that come beyond the recession, they're going to be growing market share so, i feel next six months we are probably in a sideways movement, a little extra margin will help the stock, but beyond that, we have market share across all three verticals that have highly asymmetric upside. >> thinking back to the bull narratives being spun in september, is prime fees would go higher, ad margins would go higher and peak surcharges and even margin leverage would come back in spades i mean, is that who thesis gone or does it return in six months, as you suggest >> right now we are in the revenue softness era, so probably some of the margins that they would have otherwise extracted because of the three or four things, and there are many other things such as aws kind of pricing. they have prime pricing, they

have fulfillment by amazon pricing. so, they have leverage -- pricing leverage that should translate to margin increases, but we are in revenue softness right now, which kind of doesn't completely amplify the margins that this company could have look, back in '21, retail had record high margins that we had ever seen in amazon across the board in the past 20 years i feel that is where investors are anchored around. show me the pathway to get back to early '21 margins if you're showing me the pathway, they can look at that. >> rohit, thank you so much. as we go to break, a take a look at the road map for the rest of the hour, including silvergate slump continuing from the crypto fallout. tesla troubles continue. we'll talk to an investor who

says the chances of the company re-entering the trillion dollar share is slim. and cheniere ceo at the global conference. dow down 260 stay with us the first time you made a sale online was also the

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a customer, then our obligation is to verify those wire instructions we get a wire instruction that

clearly says, send your money to alameda or ftx or blockfi or any one of our 1600 customers, if that is a valid wire instruction, then we are going to honor that wire if we do see activity that is inconsistent, we're required to file a suspicious activity report the industry calls it a s.a.r. really quickly, those are confidential we are not allowed to tell the customer, i'm not allowed to tell you, i'm not allowed to tell the s.e.c., i'm not allowed to tell anybody i filed a s.a.r., but that then can potentially start an investigation that can sometimes lead to the things that you see a year or two later. >> that was silvergate ceo alan lane, last on our show november 30th company's stock plunging after the bank said the ftx meltdown triggered a run on deposits, prompting silvergate to sell asset as at a steep loss kate rooney has the latest. >> mike, good morning.

silvergate wanted to be the banker for the crypto world. now the bank is reporting some pretty bleak preliminary results, blaming what it calls a crisis of confidence in the sector following ftx's collapse. silvergate says the deposits plunged by about $8 billion in the last three months of this year that's about a 68% decline silvergate also says it was forced to sell assets at a loss to cover those withdrawals it offloaded $5.2 billion in debt for the quarter with a $718 million loss as a result, to reduce costs as well, the bank says it's cutting 40% of staff and scrapping plans to launch its own digital currency if you remember, it had bought the technology behind libra, facebook's failed crypto project a fuel years ago it's now writing that off. that was $196 million in terms of that writeoff silvergate says it has more cash on hand than crypto deposits and another $5.6 billion in liquid

debt that can be sold off quickly. the bank will report some full results later this month and says it's still committed to this industry. reminder, this used to be a small community lender it's based in san diego. it really transformed to cater to crypto companies, which make up about 90% of deposits there ftx and subsidiaries of that company may have about $1 billion in deposits in the bank. shares are down more than 40% or so this morning. they have nosedived more than 70% in the last few months or so 45%, it looks like at this point. elsewhere in crypto, there's still a feud playing out over who has claim to $465 million worth of robinhood shares. this has been playing out over the past few weeks yesterday u.s. prosecutors said they were in the process of seizing shares owned by ftx founder sam bankman-fried. he had bought about 7% of the trading app earlier this year. the court is still working out some of the competing claims to those shares coming from the bankrupt crypto lender blockfi,

ftx, bankman-fried himself, and liquidators in antigua robinhood shares down slightly this morning, about 3% back to you. >> kate, on the silvergate, the flight of deposits out of that bank, is there a sense out there of where it's going? in other words, people are all of a sudden very suspicious of perhaps a lot of these lenders, these exchanges. if they're going to stay in crypto, presumably the deposits have to end up somewhere coinbase has been trying to make the case they're a relatively safe home. but is there a way to figure out if people are just cashing out of crypto entirely or if it's migrating elsewhere? >> yes the data we've seen, mike, shows money just moving off of exchanges in general so, whether it's coinbase or binance or any global exchanges, those are not actively trading bitcoin or cryptocurrencies have taken their money and moved it

to something called cold storage. essentially holding your money on a hard drive. it's the equivalent of putting your money under a mattress because they don't necessarily trust any of the names out there, even if they're regulated in the u.s., can protect their money. we have seen this massive flight off of exchanges, regardless of the name you can kind of track that data on blockchain. you've seen record withdrawals when it comes to bitcoin there has been more of a flight to safety. if you look at the price of bitcoin, it looks relatively weak, but if you compare it to some of the other smaller coins, the risk has definitely left that market and bitcoin is actually looking like a bit of a safe haven within what is an extremely risky market >> just a torrent of headlines, even as we speak regarding the crypto space we know you'll be on top of it all. that's our kate rooney. coming up, a lot more on tesla's turmoil and this drop in chinese deliveries our next guest says the ev maker is a bubble that's about to burst. first, watching the nasdaq

getting a look at leading the ndx. china tech names lead along with t-mobile amid upgrades in the wireless space if your company actually practices the values that it posts about, then, yeah... you're on team earth.

stocks of tesla this morning, shares down 5% or so. china shipments fell in december it's a five-month low there. our next guest is confident that tesla, quote, seems like a bubble about to burst and believes it will not reach the trillion dollar mark again and bets within a few year nvidia will be the next trillion dollar company joining us, stephen yui, blue whale capital officer. great to have you back i know you've been skeptical on their long-term projects for a while now. how has your view evolved regarding the future of tesla and its future valuation >> i think if we look back historically when tesla peaked at over $1 trillion, i think it was very difficult to get to the point when is this bubble going to burst obviously, that journey just recently started from last year. and now i think if you focus on the fundamentals of tesla, focus on the competitions, focus on

what elon musk is doing outside of running tesla, then that's a lot of question marks that need to be answered and i think even look at valuation today, if none of this happened, that you might argue that tesla is a lot cheaper now compared to before they were selling over a million cars annually and also making about $100 billion a year. but given all the concerns that you actually think like tesla shares would need to trade at a discount a lot more compared to where it's sitting at today. >> right how much more of a discount? i mean, i've seen some downside scenarios that take us to 90, but, i mean, do you see a tesla eventually trading with a typical legacy oem valuation >> i think even how tesla is positioned in terms of the -- i mean, the ev car they produce relative to some other cheaper alternative, let's say the china manufacturers, they would be trading at a premium to oems

what is the potential size of the market in time and i think a fairly sensible assumption is unlikely they will ever get back to $1 trillion for the foreseeable future, given there's no significant improvement in terms of what they can do. at the same time, you just have a lot more competition from other providers that maybe consumers want to pay a lower price for the ev cars in the near future. >> yeah. and to be clear, getting back to trillion dollar valuation is essentially a triple for tesla from here. pretty high hurdle in matter what we were talking about you -- you do contrast it with nvidia and the way that company has gone from close to $1 trillion, not quite, to something similar. yet still has a higher stated valuation on this year's earnings, let's say. why do you think that nvidia is in better shape as an investment >> i think it's fairly interesting to compare the two

both of these companies have been fairly well owned by retail investors during the pandemic. they did very well in 2020 and 2021 and the thing from our perspective is when you look at the fundamentals of nvidia's products versus tesla, we can easily see in the next ten to five years we'll need a lot more nvidia's product in the world. you were talking about artificial intelligence on a hyperscale data center you talk about higher silicon content within the auto space. you talk about automation, 5g, so many things happening literally there's no competition for nvidia's product compared to tesla where you have other ev cars if you try to draw a line in the next five to ten years, do we need more of tesla i mean, how many more cars could they sell? but if you contrast that to nvidia's product in terms of the needs that we do have, then

that's going to be multiple of what they're selling now so, i think looking at the valuation today, you can argue nvidia is more expensive than tesla but it has a potential runway, which is going to be quite long i think the journey for nvidia have just got started. >> finally, i wonder, if you were to rank tesla's challenges at the moment, you mentioned competition, obviously, their peers are not standing still, but would you argue its competition, overall macro slowing, or as you suggest, elon musk's distractions at companies like twitter which of the three do you think are the most acute at the moment >> i think if i have to bet, i would suggest that is the disruption elon is getting at the moment looking at competition, looking at the fund mental of the company or even slowdown in macro environment. that's not new that's been going on for the last couple of years everyone would know at some point we would go into a

recession of some sort i think what elon was trying to do with twitter, i think distracted, selling some shares over the last couple of months to raise money for acquisition of twitter, i think it raised a question mark. and i remember that when i first suggested that tesla was in a bubbly territory, wasn't just about the fundamentals of the company. people weren't buying tesla. people were buying elon musk people were betting elon musk could be the next steve jobs, which has done amazing things for apple. now i think it's more question about elon musk as the leader of the company, whether tesla could be the next apple when steve jobs was running it. and it's just -- so i think that is outweighs a lot of things, which have been around the last couple of years. the management team is the biggest question now. >> that's interesting. makes a lot more curious about some of the upcoming lieutenants we're paying more attention to stephen, appreciate it

we'll talk soon. thank you. >> thank you. coming up, it's goldman sachs global energy and clean tech conference. oil and gas prices are nearly flat as warm weather up-ends worries of an acute energy shortage we'll talk with the -- the outlook with the ceo of cheniere energy

welcome back to "squawk on the street." the house of representatives once again reconvening without electing a speaker gop kevin mccarthy having lost now six rounds of voting >> good morning, carl. republicans seem unlikely to get any help from democrats at this point as the house prmz for its third day of votes for speaker democratic leadership just wrapped up a news conference minority leader hakeem jeffries said his party has not had any discussion in what they might demand to bail out republicans he said the gop needs to figure out a path forward on its own.

>> it's my hope that today the house republicans will stop the bickering, stop the back-fighting and stop the back stabbing of each other so we can have the back of the american people >> democrats have remained unified behind jeffries during all six rounds of voting in fact, jeffries has gotten more votes than mccarthy though neither one has reached the magic number of 218. mccarthy made some room with conservative holdouts. in exchange, a group committed to supporting his bid for speaker. mccarthy also apparently made some key concessions on how rules. representative matt gaetz, one of his biggest critics, said mccarthy allowed a single member to oust him from the job he also promised to put hard-line conservatives on influential committees the house will reconvene for its seventh round of speaker votes at noon.

we'll find out if any of this is enough to move the ball or if we're still stuck in the same place. back over to you >> thank you for that. a little over an hour to trade. a quick check of the markets we tried to recover from the opening lows but the dow is still down about 340 holding 3810 we are watching the wires here the kremlin announcing a brief cease-fire beginning tomorrow in ukraine so that a large number of the citizens in that area, who celebrate orthodox christmas, can celebrate market tried to react to that, but it feels like it might not be that material. >> just a quick automated bid came on that very familiar levels remain churning around this 3800 level back to december 16th, basically. that has been the low of almost every trading day, is in that vicinity what we know is sentiment, super negative you got more proof of that with the retail investor survey outflow is heavy at the end of the year from equity funds it seems like expectations are low. the problem is the idea of a hard landing and if the fed

wants to engineer one, it can't be disproved in time good jobs data maybe we get more tomorrow gets translated into, okay, yields maybe have more room on the upside and we have to assume the fed is going to be emboldened in its aggressiveness today also it's microsoft weighing on things, it's amazon, nvidia the familiar mega caps just leaking market cap and valuation premium. >> we mentioned with jim this morning, the slew of downgrades, ally, coin, gap, amex, wendy's is that a sign the street is starting to religion at least on some of these earnings outlooks? >> yeah. i think the street is sort of running the recession scenarios or near recession scenarios through all the models it is interesting when it comes to financials. i think it's more art than science in saying, oh, a mild downturn is priced in, not a deep recession that deems to me to be the imp impulse. at the beginning of the year you're not seemingly going to get immediate gratification for

being boldly optimistic about what's to come in the next six months. >> we'll watch that. oil has a slight bid this morning. the only sector this morning that was in the green. the annual goldman energy and clean tech conference is taking place in miami beach today that's where we find our brian sullivan with the ceo of cheniere hey, brian >> hey, carl, mike, thank you very much. jack fusco joining us. we have to stop meeting like this, multiple years some years the price of nat gas is at 2, sometimes at 8, now it's at $4 earlier today we interviewed the ceo of chesapeake. they want higher nat gas prices. they sell to companies like you. as an lng exporter, are lower prices what we're showing our viewers on the numbers, are those actually good for cheniere >> yeah. well, thank you for having me here today for us, we're kind of indifferent. as you know, 90% of our production is sold long term it's sold at an index to henry hud.

we as a company are indifferent to the price of natural gas, but we prefer it to be lower for our customers. that makes us more competitive worldwide because their overall costs are less worldwide. >> you have global competitors, but you also have a growing number of u.s. competitors some that are actively exporting, some that are still in the process of building out do you worry the u.s. lng industry is going to overbuild and sort of can abolize itself or is there enough demand not to worry about that >> i don't worry much about the u.s. competition for cheniere. because there's a lot of tailwinds and headwinds associated with lng facility one, it's extremely expensive. it's very capitaltive intensive proposition. there's only so much capital that wants to build natural gas infrastructure in the world. so, i don't worry about that aspect of it the other thing is the

infrastructure in the u.s., we need more pipelines. we need to touch more basins it's been very difficult to build pipelines throughout the u.s. for a whole host of reasons. i feel good about our position i'm glad we're already $40 billion into our investment horizon and we launched another $7 billion infrastructure expansion project at corpus christi in texas but i'm not overly worried about it i think that we'll see continued tightness in lng for a very, very long time. >> globally? >> globally. >> more demand than supply >> much more demand than supply. >> analysts i've talked to said they do worry, not that you won't be able to find a customer to sell to, but you -- not you but a pipeline company like plains or williams is not going to be able to build the pipelines they need to get their gas to you. >> it's gotten harder to build pipelines. i think ultimately if they

partner up with us and we have a needs story that we can make, because as you know, we commercialize for the long term, that things get done i mean, we ourselves were able to build a 260-mile pipeline from oklahoma into louisiana so, we feel pretty good about our ability to continue to build infrastructure. >> do you feel the image -- okay so, without diving into the dirty world of politics, i wouldn't ask you to do that, but energy is a political topic. >> yeah. >> and there seems to be a change in the white house on how they perceive fossil fuels it was sort of do away with them now it's, we need more production are you seeing that on the ground do you feel a change on the regulatory side or is it still tough? >> we feel a big shift as the white house, the administration has recognized that energy security, energy security for our allies is

extremely important, in that we have a role to play in that, you know, things have gotten better, for lack of a better word, as far as the regulatory -- >> less bad or better? >> i'd rather not say. >> don't answer that i was in europe recently talking about the european energy crisis, which some people were saying, oh, it's fine now they're full of storage. they're not. next year it will be much harder i ran the numbers. roughly it's 10 to 12 lng ships from cheniere to make one cubic feet of gas. europe would need 350 more lng ships to fill the russian gap. obviously, that's not possible we don't have the capacity, do we, and they don't have the import capacity. how much bigger could we be in five years >> okay. so, we -- today we take about 8% of all nat gas in america, we buy it from 70 different producers, we send it to our two

fa facilities, we process it and send out two tankers a day we're in the midst of having our expansion project, that will probably add another tanker a day of processing, maybe -- yeah, about a tanker, tanker and a half a day of processing so, that's three a day and that's within the next three to five years. there's a few other facilities that are going to start up in that time. line golden pass - >> the exxon/tar joint venture in texas. >> exactly there's lng canada. >> out of vancouver. >> out of vancouver. there's not enough, though, i don't believe, to meet 100% of the needs of europe. >> i know we have carl and mike there, i think they might want to ask a question as well, but you gave me a number before we interviewed. i don't get stumped easily, jack, but i kind of did one of these. you said china is building $1

trillion in natural gas or energy infrastructure. i mean - >> yeah. most of asia - >> that's a big number even for china. what does that mean for you and the u.s. lng industry? >> so, around the world today, brian, there's about $1.3 trillion of nat gas infrastructure being built out of the $1.3 trillion, about $100 million is associated with europe and all those regas terminals and pipelines. the other trillion is asia out of that trillion, it's around $800 million of the $1 trillion is just china alone that's power plants, that's regas terminals, that's pipelines. these are long-lived assets. some of our contracts go out to 2050 we're going to be around for a long time and nat gas is here to stay. >> how do you view the competition? so europe benefitted from the fact that china locked down so hard with covid, because china then didn't need some of the gas, maybe not yours, but some

of your competitors would -- we would watch the ships. they would be on their way to asia, turn around and go to europe and resell those cargos at massive margins are you sensing that china, quote, is fully back and if so, jack, what would that mean for europe, which was getting a lot of gas because china didn't want it >> yeah. i'm not sensing china is fully back yet, but it's starting to come back. so, there's a couple -- >> what's your timeline? >> -- a couple of headwinds for europe the real headwind is in europe, its own industrial and commercial demand, right, it dropped 5.5 bcf a day. and it's come back slowly. if it comes back fully, then there's going to be a big shortage. >> so, dropped -- i want to -- correct my math, jack. 5.5 bcf is dropped in china --

>> fwho, no, europe. >> in europe >> so, one of the -- >> which is about 50 ship loads of lng takes about ten ships to make one billion cubic feet so it dropped off by about 50 ships. >> 50 ships. just in industrial and commercial demand. so, that's starting to come back in europe. and then china is starting to come back with its, you know, lifting its covid restrictions so, it's going to be very, very tight for a long period of time. the lng market >> and your selling costs, we're showing our viewers, $3.78 natural gas, down from $8, but above $2 where it was a couple of years ago are your prices all fixed, for the most part? >> no. so our construction efforts were so good that two of our lick we faction trains came on a year early. that 10 million tons has all been to our benefit and the margins have been pretty substantial. >> well, if we could bring up a

five-year stock chart for your company, lng, we would see that reflected. it's been one of the hottest stocks not just in energy, but in the united states lng, thank you very much some parts of energy hasn't worked cheniere is one of those companies that has worked really well for shareholders in the last, i don't know, 12 to 18 months back to you. >> sure has. absolutely thank you, brian sullivan. we'll get more from you at that conference as the day goes on. opmajos anaire investor leeon coern inushead of the jobs report.

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welcome back to "squawk on the street." i'm steve co-avalanche stocks are considerably lower

today. lamb weston is trading at an all-time high after snatching revenues it's a silver story at conagra who has also raise its forecasts, citing price increases. that stock is trading at its highest level since april 2017 mike, i'll send it down to you. it has been a tricky time to be in travel, but could the sector rebound from the holiday lows we'll have more on that in a moment. and a programming note, delta ceo ed bastian is on "closing bell" later today at 3:00 p.m. eastern time don't go anywhere. >> announcer: selector sore is sponsored by sector etfs

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that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business. welcome back to "squawk on the street." before we go, we want to get a check on the travel sector rising since the holiday weekend. our seema mody's got the details. >> a battle for the ages between a recession and a recovery that is the title of bernstein's note out this morning on the hospitality sector where analyst

clark sees hotels at a growth as the economy softens. his top picks are hyatt and accor. and airbnb after a 50% drop in the last year, he says the stock is oversold on concerns of supply interest rates will be a dominating factor how hotels operate this year. it show as 40% drop from 202 that's compared to two years ago. what it's giving investors a hope is china reopening. morgan stanley says expect revenge travel around the lunar new year trip.com reporting a 45% increase in bookings around that time the u.s. now in the top five most popular destinations for chinese travelers. ceo glen fogle shared last week on this show people are

preparing for a rebounding yesterday carnival shot up its shares by 9% prices are going up including wi-fi effective april 1st. guys, i'll send it back to you. a quick check on the markets. the index is sags. nasdaq and s&p, all down a bit more at 1% energy the only group bouncing that will do it for "squawk on the street." "techcheck" starts right now. >> good morning. welcome to "techcheck. this hour,two giant warnings from two giant tech companies. what amazon and microsoft are saying about the state of the tech sector today. plus the doctor eoceos of and a qualcomm we'll dive into that. good morning