so, you got to come on back. maybe we'll do it all in-person at some point. thank you so much for waking up early on the west coast. 15 seconds to check the markets, triple digits on the dow. pretty nice gain this morning, 44 points. the year starting out a little bit better could be short-lived nobody knows make sure you join us tomorrow to find out, at least what happens tomorrow "squawk on the street" is next ♪ you are looking at live pictures from major airports around the country after the faa ordered all domestic flights to pause departures reports now say that ground stop's been lifted we'll get to that story in a moment i'm carl quintanilla with jim cramer and david faber futures relatively steady as we brace for december cpi in just under 24 hours but we will begin with the airlines, jim.

reports that they were trying to restore an outage of this notification system for crews, and you're talking well over a thousand flights delayed, at least. >> we seem to be just hopeless in terms of the amount of money we're spending on technology phil lebeau alluded to that. i keep thinking about, had i known that southwest had such poor technology, which apparently was an open secret, the stock would not be at 35 david, again, i mean, you heard the faa. they have bad technology now, when you hear "bad technology," and you hear "air safety," those don't go well together >> that's true we are spending an enormous amount on infrastructure >> well, that's good >> so, one would hope perhaps some of that will go to upgrading various technologies at various places, but i don't know, because this is not my area of expertise. >> wouldn't it have been better to have some sort of, like, every year, have kind of a

grounding that we all know about? just an enemergency grounding i think these call into question, again, how much money is spent trying to make things safe, and i think it's embarrassing it does not feel -- i mean, i've been hearing that the faa is a political organization that's completely untrue these are professionals. but if you don't give money to people to upgrade tech, they can't do it, and i think we see the military, where they haven't upgraded to drones we see it in this. we see it in the government in so many different businesses >> well, the irs is the one that's come into focus of late, given what's going on in congress, the money that's going to be spent there to upgrade technology from the '70s and '80s >> think about all the companies that have the ability, you know, have a google, they have the technology that was invented yesterday. and i think that there's two classes. there's the companies that do very, very well, make a lot of money, and then there's the government i don't know where the money

goes, but it sure doesn't seem to go to technology. >> meantime, president says he's going to open a full investigation into today's outage the press secretary says, no evidence of a cyberattack. there's actually a lot of airline news separate from this. we got a downgrade at southwest on some of the issues you mentioned. boeing deliveries, four-year high, although still dragging airbus >> china, you know, china south making -- their effort to look at it. 787, doing well, which matters tremendously of course, i think we have to have bob jordan on i know that gary kelly would have been on already saying, look, here's the real truth about what's going on at southwest. i don't feel we have the whole thing. >> we don't. i mean, again, talking about systems, a lot of the criticism of southwest was that they were not able to have the technology to keep up with getting realtime understanding of where their crews were and all sorts of other things so, the question that we would ask, i'm sure, would be, do you have to spend a lot more in terms of upgraded technology at that airline

>> one of the reasons people like delta -- there's been overwhelming love for delta is people feel they've spent enough money. we're going to hear from brian moynihan on friday now, this man has spent, at bank of america, a gigantic amount on technology i think he's trying to keep pace w with a will thlot of the fintecd that has been fantastic for them >> we'll get to some of that airline news in a moment specifically on the ground stop today, let's bring in phil lebeau, who joins us, i believe, from o'hare. good morning, phil >> good morning, carl, and it's strange to say this, but it seems like a rather normal morning, at least when you're here before check-in, before security, at o'hare airport. i'm in terminal 3. this is where american's operations are and you're not seeing a ton of people standing around saying, my flight's delayed, i can't get out, what's going to happen? there are going to be delays that are going to ripple through the system, but just within the last 15 minutes, we heard from the faa that it has lifted the

ground stop. here's a statement from the faa. "normal air traffic operations are resuming gradually across the united states dfollowing an overnight outage to the faa's notice to air missions system. that's the system that gets critical flight information to the aircraft, gets it to the airlines every airline wants to have nodam up and working in order to function safely and as efficiently as possible. the faa statement goes on to say, "that system provides safety information to flight crews. the ground stop has been lifted. the agency continues to work or to look into the cause of the initial problem. as you guys have been showing, and we have seen this morning, shots of various airports, when you take a look at their tarmacs, you're starting to see aircraft move again. i've checked in with a couple of airlines, three airlines, in fact, within the last ten minutes, and all have said the same thing we're starting to see flights go back -- get ready to take off.

it's going to take some time you just can't flip a switch, everybody goes out to the tarmac and everybody takes off immediately. so, there's going to be a series of delays likely this morning. flightaware says about 3,500 flights are expected to be delayed, at least, this morning. that number may increase as we go a little further into the day, and guys, as you take a look at the airline stocks, we're not seeing a whole lot of impact here. this is not an airline issue this is not a case where the airlines, like southwest after christmas, had problems and as a result, you saw the investors say, wait a second, this is going to cost the company, and it cost them almost $800 million this is completely different this is the system and the software and the technology that is used by the faa, which, by the way, guys, you were talking about, are they up to date in terms of the most adequate software i think everybody in the airline

industry and in commercial aviation would say the same thing. it is the best system in the world. it is a robust system, but it could be better. that's the most honest answer you're going to get in terms of the technology that the faa uses for a long time, jim, i've done numbers of stories on this i've talked with people in washington about this. everybody agrees it could be better but in order for it to be better, there needs to be the adequate funding put in place, and there's some of that, and the infrastructure bill will certainly help there, but there needs to be adequate funding put in place and a mandate, if you will, to go even further than what they have already >> well, what surprised me, phil, is that there are a lot of different companies that we deal with that it's not -- they say it's mission critical, but it's, frankly, not mission critical. faa, clearly mission critical. so, why don't they bring in some of these companies that we hear -- a google contract, i don't know, microsoft, and say, listen, we need this update, and

we need this now >> well, i think they do work with those kpcompanies, jim i think it's not a case where they have antiquated systems and they're not upgrading the software and the technology. they have been doing that. the question becomes, could they go further almost everybody in commercial aviation believes that the faa could go further, but again, this gets down to the question, i know it's politics, but we talk about this all the time do they have all of the funding and all of the resources that they would like? the faa would, like any government agency, will always say, give us more. we'll take more. and then you have the fight on capitol hill where others are saying, are you spending the money efficiently enough so, clearly, this will be front and center, carl, as people continue to talk about this in washington >> phil, great work getting started in a hurry, obviously, today. that phone call must have come early. we know this broke early in the morning. turning back to the broader markets ahead of tomorrow's cpi

data, jim, seems like the market is a bit -- is coiling a bit ahead of that. it's important >> it better be a good -- boy, they are just out there recommending everything. even when they have things to say that are -- where they're just kind of, like, tepid, they say, look, you got to buy it right now, and david, one of the things i found that is really interesting, the defense of the megacaps has now started >> has it? >> yes, and we're seeing people saying, look, you know, actually, google's doing well, and facebook, with the over 35 crowd, is doing terrifically, and reels is fabulous. >> and by the way, they're cheap. >> and they're cheap >> look at the fmultiples, and look at the potential growth rate they've been undervalued as a result of -- yeah. do you buy it or what? >> well, i think that -- >> do you buy the argument, i should say, not the stocks >> well, meta is cheap let's put it this way. >> meta is cheap it's been cheap, and it will stay cheap >> let's say zuckerberg's really spending time on reels and spending less time developing

avatars that look funny that you play in the metaverse or that they actually have some contracts from people who say, i want to be in the metaverse mall well, that would be a reason to own it, but we don't seem to have that. alphabet, the word on alphabet, is that they're still getting a lot of advertising, and that youtube is stabilized. the word on amazon is that advertising turns out to be better than we thought a week ago, all we were worried about was slowing of the hyperscalers well, turns out not only is hyperscaling doing well, you should be buying oracle because they're good at hyperscaling i feel like they flipped a switch and some of these analysts said, we better get on board, we've been quiet enough i don't like any of these calls, frankly. >> someone who has not flipped a switch is mike wilson at morgan stanley. as you may know, has been warning about a severe drop for stocks sometime in the first or second quarter, and he reiterated that view last night on "fast money." >> we've been talking about kind of a softer first half, led by growth disappointment and a fed

that's still fighting inflation, and then hopefully that will lead to, you know, the next bull market, ultimately, that could be a pretty good second half but you know, we're all kind of creatures of checking our own calls, and i just wanted to kind of be sure that we weren't part of the consensus that would get fooled >> i think he's still looking for sub-$200 in s&p earnings this year. >> i think, though, he gave you this second half possibility, and if you're a giant fund, then you want to abandon the shakespeare and you want to go dickens. it could be the best of times. >> i know. we had laurie on yesterday, looking for -- >> you were asking some very piercing questions >> we only -- i only asked one question >> no, no, no. analysts come on all the time, and we say, thank you very much, that was very -- not you oh, no i was like, wait a second. david's, like, what? >> congratulations >> well, thank you for that. >> she's a guest, god darn it.

what the heck are you doing? don't you know she's a guest you had her in your house, and what did you say here's your hat, what's your hurry? >> don't let the door hit you? >> unexpected. >> i do try to think that we have rigorous questions for any number of our guests, jim. >> just a little different >> in this case, the point i was going to make was simply that she thinks that there's going to be a second half rally, even though her numbers are similar to wilson's in terms of s&p earnings >> exactly >> that's what you were just saying >> i was saying, wait a second let's say you're in union pacific, all right do you want to get -- can you go down 20% in union pacific and then go back up? the answer is -- david answered it with a question, as he often does, because david's an excellent prosecutor, and the prosecution never rests with david. what he's basically saying is, so, i'm supposed to buy it and take the hit and then come back? and it was like, okay. yeah maybe. and i love her but the fact is, david, i don't

want to see anything like that >> you don't >> i want to say, thank you. i want it to be like a guest at your house >> okay. >> that's very interesting >> okay. >> that's very interesting >> can i get you something to drink? >> i say something to him like warner bros. discovery upgraded again. will he say, that's interesting, tell me more no, he'll say, yes i want to be treated like a guest. >> you do? that's never going to happen >> a guest in your house >> never going to happen unless and when you are a guest in my house. >> i don't think you have any right to ask those kinds of questions. >> i will apply tough questions to you >> i just thought that i was listening, and i said that david is posing the question of the day, and you have to ask this to mike wilson, too, which is, can people look through the valley of the shadow of bad earnings because they fear no evil? i remember saying that when i went to school, the lord's prayer pennsylvania was really something. public school. and i just said to myself, most

of the analysts that we listen to believe that they can, because these are big funds they can't get in, get out. but the individuals who are watching are like, holy cow, i just lost 20% on union pacific i want out that's why that's the question >> her point was that a lot of the buy side is already expecting those kinds of earnings and perhaps already anticipating >> i don't think that's true >> meanwhile, if wilson ends up being right, guys, for the second year in a row, we put him in the hall of fame. i don't know who he joins. one year getting it right, nice job. >> it's not just getting it right, it's getting what he calls double-breaking punts right. >> who do you put in that hall of fame? >> not tom brady, because i saw he was a chief investor in ftx >> and kraft >> that's why i very much want to face them in -- if the eagles play them, because they'll worried about sam bankman-fried, and we'll be worried about

winning. >> i don't really think tom brady's going to be thinking about sbf when he's on the field. >> you don't think so? >> no, i don't i don't know why i don't think that, but i just don't >> i think he's more likely to get a subpoena than a game plan. >> sbf just did another interview, by the way. >> oh, yeah, he likes to interview. >> he said he was surprised that he got arrested so quickly >> can you imagine if you were his client the first thing is, the lawyer says, i don't want you to speak to anybody he's inviting journalists over >> yes, come on over i'm here >> what does he have, gin and tonics i think he has hendricks he drinks hendricks. >> there's an ftx attorney on the wire right now saying the total amount of the shortfall for customers is still unclear, even at this point as they wrap wrangle over many of those shares to the point about markets, a lot of that is going to depend on the course of the fed and gundlach had some interesting things to say about the fed's

view versus the markets. here's what he said. >> it's pretty obvious is fed is not in control it's a bond market that's in control. i remain amazed at how frequently i see commentators and financial media talk about how the fed controls the two-year treasury. it's obviously the other way around >> he says, go with what the market says, jim does that mean we get cuts in '23? >> no, i think the fed said longer the fed doesn't want to lose this battle. and one of the most important things that happened yesterday -- i had conagra on monday, and sean conley talked about how easy it is to give food price increases i think the fed wants to hear from everyone, they're done with the price increases, and they'll eat it a lot of industrial companies won't make the numbers unless they put the price increases, but there may come a time where companies say, you know what we're done we are recognizing that our input costs are too high, and

we're going to -- we do not want, in the case of food company, to find out that costco's coming in well underneath us. the fed not in control, i mean, this is the pinata this is the jay powell as pinata i tire i tire of the jay powell as pinata i do >> well, you are a defender of the embattled fed chair. >> he could win. i mean, is that so crazy >> he could. >> jay powell wins >> find out a lot more tomorrow at this time >> stranger things have happened >> we'll take a break here when we come back, we'll get to some of the calls we mentioned, including downgrades of salesforce, coin, upgrades in home builders today. more "squawk on the street" straight ahead down, but you're right on track to reach your goals. my ameriprise advisor helps me feel confident about my financial future. he knows me and my goals. it's not the first uncertain environment he's helped me navigate.

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s&p gainers, tesla's going to lead you in morning on headlines regarding a potential deal to start a new facility in indonesia. we'll get cramer's "mad dash," countdown to the opening bell, faa does say normal air traffic operations are resuming gradually. back in a minute

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scan this code and get cnbc pro today. ♪ ♪ all right, seven minutes to go before we get started we were looking for the open let's do a "mad dash" here what's the name? >> okay, i am now on "i love jay powell" watch. i'm looking for downgrades that indicate that there is pricing pressure in an industry, because that's what powell wants to see. this morning, i think we got

good news on inflation when jpmorgan cut carmax from hold to sell we know used cars are a huge part of some of these indexes. cpi, oh, early on. and i just think that what's happened is that where you've seen a real plummeting of used cars, we've seen it from carvana. >> we've talked about carvana many times >> so, at a salescertain point,u have to say to yourself, the fed may be winning the people who say the fed is losing are obviously talking about wages, but we had good news on friday about wages, and cpi, we have to wonder whether they even care they care about wages, and i think that when you're starting to see layoffs, you're starting to see sells, what that means is there are layoffs. >> right >> and layoffs lower the price of labor >> now, one might be tempted to look at a chart like this, to be fair to -- what was the downgrade, jpmorgan? they had a hold on it. >> don't you start that again. >> it wasn't like they were

saying, buy it but i mean, jim, really, here, now, i want to sell? >> well, admittedly, that's -- i would say, late in the game. i was more referencing something that says -- >> you were mentioning from a macro perspective. >> i was using it as a macro example, not great timing by the analysts, but here you are knocking analysts, knocking strategists. i am out to praise, because my mother always said, if you don't have anything good to say, don't say it >> all right there's that music again it just never stops. we got an opening bell coming up we'll be right back.

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>> announcer: is opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. ftx returns to bankruptcy court today amid these fresh comments from embattled founder se sam bankman-fried. he said, "house arrest doesn't feel like being bored on vacation," and while he's lost a lot of the relationships in recent weeks, "i don't blame

people for wanting to avoid getting drawn into the bleep show." b of a goes to underperform. shares could drop at 20% >> remind people, you do these cuts, it's usually because earnings aren't that good. i know there was an american banker story about silvergate bank, loaded up on a $4.3 billion home loan bank loan that is highly unusual that was from a filing it turned out it was done last year, but you could argue that that was done in order to stem deposits coming out. coinbase, not protected by anyone, but your deposit's not protected. look, i continue to believe that this is the whole group's a house of cards i really believe that. as more people come forward in the ftx empire, we'll realize that there was a lot to prop up. david, one of the reasons why i

believe the s.e.c. did not agree with an etf, to have an etf, is i think they felt this was too early to -- that's important this is not as hard as we think. >>let get the opening bell here at the cnbc realtime exchange. at the big board, cooking and delivering meals to new yorkers with severe and chronic illness. at the nasdaq, victory capital celebrating its u.s. sector etf. report about coin volume and b of a's point is that december volume, which was the first full month after ftx, $34 billion, less than half of the average between q1 and q3. >> that was incredible we keep seeing those spats between these different companies, and i just find that, again, like, i don't want anyone to -- who the american dream may

be crypto, but i just keep seeing that people who have your crypto are at war with each other, and i remember we had gary gensler on. he said, if you're getting a huge rate, like an 8% rate when you're getting zero at a bank, beware that there's risks being taken. and i think, you know, david, one of the things people may not realize is, you can have risk in both the security and where you keep the security. i mean, it's tough enough to have risk in a security. >> it is >> like, so, david, i know you're invested about solana, light coin, along with -- along with alphabet and amazon, solana but i think maybe solana is, i don't know -- >> you question solana a little bit. >> i just try to offer -- i went to a really good restaurant the other day, and i was tempted to pull out my solana, but i ended up pulling out my american

express. >> they don't take solana? >> i wanted to take, so badly, at bar san miguel, i thought it was time to take light coin, but i couldn't find anyone who knew what light coin was, and i said, listen, i'm going to take nonfungible tokens but everybody was offering me fungible tokens. it's a strange world i came to the conclusion that it was all worthless, and i wanted dinero when you bought a consolation beer, but david, they just never stopped. they had a different coin a day. >> you wanted something backed by the full faith and credit of the united states. >> of anything not even the united states of anything. >> by august, with this current congress, we may be discussing that quite a bit >> we still have yellen to stick around and help out. >> yes, we will. >> does he traffic in solana i want to know who traffics in solana >> yellen is going to have quite a job in front of her, potentially, if this current congress does not choose to raise the debt ceiling >> it's going to be a disaster i've already decided how to prepare that >> that's going to be -- what

actually will happen, jim? >> i'm going to use king richard iii, my kingdom without a budget no go with richard iii? who do you want to go with >> i'm going to give that some thought. and i do have some time to think about it, prepare for it, the possibility of it. it may not -- i think most of us hope it doesn't happen >> maybe don't plan a vacation to a national park that week >> i think that's a good call. we could get a closure but the actual -- if we actually got to that. >> the september, oh my god, the september 2011 default where, oh, it was during the summer, july >> we haven't defaulted. we got downgraded. >> there's the downgrade, i remember going and giving a talk to the eagles in training camp, and i said, are there any questions? how about this downgrade and i said, no, we're really kind of talking about how we're going to do against the giants no the downgrade. and it turned out to be an opportunity, and i said that we're down 19% i think you ought to do some

buying >> the s&p downgrade, of course, at that time, which was a big story. interesting that a player wanted you to talk about your area of expertise instead of telling them how to play defense >> a lot of times, i've found, as my friend andy reid once said, when i told him that as long as we wear my green gap shirt, we win, he said, i'm not sure and then tammy reid, his wife, said, i think that andy reid himself has more to do with it than your green shirt. i had to demure. >> they figured out the defense part anyway. >> yes, they did david, a lot of the stocks you wanted to be critical of, analysts are up today. >> i don't make much of anything of it. i will start with tesla, guys, which is up 2% we haven't -- >> are you going to bemoan how little he has? >> a plant in texas could cost as much as $750 million. batteries, a number of other things "the journal" story citing various permits and the like that have been applied for by

tesla. could be a significant increase in capacity. >> $700 million in the plant near austin. this indonesia headline is weird too. preliminary deal to build a plant there. >> i know we are beginning to hear, wait a second, bmw's coming in, ford's coming in, gm's coming in i know they are. what you would need to see would be advertising and tesla has not had to advertise, which is always a sign of strength now, david, i am reading a very interesting piece in bloomberg about how elon musk might never be the world's richest person again, and i thought of you. >> why is it that you thought of me >> i knew that you would be the most critical of musk without any fear you don't fear -- you and brett taylor are the only people that do not fear his retribution. >> no, i don't fear any retribution from elon musk, but i hope that i have been -- >> open minded fair >> yes, i do get a lot of

criticism when i criticize him, because we have a lot of people who believe in musk above all else >> this article is dispositive that he, obviously, this twitter financing that david has talked about, endlessly, does seem -- that's something that -- you wouldn't like to have it if you looked at your statement every month. >> no. if you're one of the banks that financed the go private of twitter to the tune of, let's call it, $12.5 billion, the value of your loan is not 1 hundred cents on the dollar at this point now, he's been so many things at twitter, including cutting half the staff. he's being focused on,by the way, in the rest of silicon valley, "journal" did a story on this, but if he can get away with it, if he can say, you know what the people sitting next to you are useless, that will be a moment for many others who run big technology companies >> carl may disagree with me, but i think twitter's been better since he took over.

>> there have been -- there's been some, you know, tech trading desks that say, you let go of half the people, has the product changed that much? >> i think it's better i think there's minor improvements >> not nearly as much chatter about it right now as there had been a couple of weeks ago he's still throout there potentl trying to find a new ceo that continues tb o be the case, but it's not clear that he will find the person that he wants or that he'll find someone to take the job. no matter what, he's looking to be the boss, given he owns the company. so, that's not an easy thing tesla shareholders are eagerly awaiting the possibility for him finding somebody to run twitter and perhaps being able to focus more on tesla. that said, there was a lot of speculation about the gentleman who got promoted at tesla a couple of weeks back and whether that person might be seen as one day being the ceo of tesla

>> anything -- maybe a virgin orbit ceo. whipping boy someone in there look, i'm on twitter every day, and i'm going to reiterate it's better than it was, and it is -- >> you want to fit morgan stanley for some of their loan >> i think james is going to come out perfectly on that loan. my travel trust owns it. but i think that james -- >> a lot of other banks, by the way, including morgan stanley. >> i think that james gorman, i don't think you'll see anything that's -- >> they had a big plan at twitter. it's unclear where it stands they really saw an opportunity to do a lot of different things. not just cutting staff, but -- >> look at that chart. there's a chart. >> yeah, look at that chart. >> not everybody's an idiot. there's my new theory, my new mantra for 2023. not everybody's an idiot >> it would be a great book title. >> how about that? we have people come on and they are not idiots >> guys, i want to talk about

wrestling. >> change in management there. >> yeah, wwe, this was the story last week, vince mcmahon coming back he had stepped aside, and then he came back, and he's basically running things again a lot of his re-entry has sparked speculation that the company might be sold, and the stock has moved up appreciably you can take a look, even, in a short amount of time stephanie mcmahon stepping down, he came back, exec chair, running things again at world wrestling. would there be potential buyers for this company one would think yes. doesn't take much to think that even the likes of our parent company might have -- >> it's a great subscription business >> peacock runs it runs the wrestling endeavor, which owns ufc, you put those two assets together, absolutely it's unclear whether endeavor,

given its market cap and balance sheet would be willing or interested in levering up to the level it would to potentially be able to buy world wrestling. mentioned it again this morning because there was a tweet overnight from somebody, saying that the saudis were going to buy it that got deleted, wasn't true to begin with but it has had the effect of s sending the stock up a bit more. you might see some books go out, couple of investment banks being hired to send books out and say, hey, are you interested? but i also hear from prospective buyers that it's very much unclear whether vince mcmahon really would want to sell this thing. and if he were to, he'd still want to run it, potentially. do you really want vince mcmahon working for you, so to speak so, a lot of -- some doubt out there as to not whether or not you might see some sort of a process, but whether it really would end up with this asset actually being sold. and again, the saudi thing

doesn't -- at this point, it doesn't appear to have a lot behind it right now. >> well, i know that when -- >> you would need, by the way, if you were endeavor, you would need -- if you were to do it, one would expect you would want outside help this is all speculation. but we'll keep an eye on those shares you can see they're reversing a bit. again that, tweet had been deleted, i believe, carl, from earlier. >> that's right. >> from some gentleman associated with whererestling ad marketing overall. not that the pif is not gr aggressive the saudis are but let's just take a step back and see. books haven't even gone out yet, if, in fact, they do >> okay. all right. i always know the subscription business is a great business they have a tremendous -- >> they were the earliest to, in many ways, do subscription streaming. >> and i know the people who were involved in it, and it's been a beautiful business, and i think you're right that people

ought to be thinking about how to have consistent revenue that is not dropped off because of cord cutting >> right >> it's cord adding. >> speaking of which, as we mentionee for wbd today at guggenheim, they go to buy yesterday it was bank of america. again, cost cutting with direct to consumer. >> new macs. >> some of the affiliate deals the reset from last year >> i mean, there's a stock that was, if you looked at the chart, of course, you're not getting it too early. >> no. i mean, maybe it's run out of a little bit of steam here >> i mean, it's an attractive narrative is what guggenheim said that's an interesting term, because people are looking for stocks that everybody's given up on and said, you know what i can do that. and that, by the way, i actually like i actually like research, which just says, you know what this thing's overdone, and it should be down >> how about when it goes the other way? we finally have a sell on crm

from bernstein, as you know. >> i've been going back and forth on crm the essence of the crm deal is -- >> growth purgatory. >> the growth -- there isn't any real growth, and it's been hidden by acquisitions and it's interesting, because w when you think about it, there's -- they report core products, and then they report acquisitions separately, so you can't hide it. i mean, if -- it does say they're hiding it, they can say, listen, they're hiding it, core products weren't doing that well but the core products were doing well, and i don't know i mean, i think that it was a -- i thought it was savage, okay? i thought it was a savage piece. and you know that. you know that piece basically just says they have no real growth >> yeah. >> but you know, david, from time to time, we've seen that, and we've always said those cuts and companies must be avoided. >> and in their opinion, it should be avoided.

>> the margins have improved >> it's an underperformer. >> i know, but that kind of piece, basically, says that you must avoid this stock at all costs, and i'm working all morning on whether that is a fair characterization, that they make an acquisition like tableau, and make an acquisition like slack, because business is so weak that this way, they can do better, versus what i have seen, this is what they've -- there are half the people are doing most of the sales and they need to rationalize the salesforce, and they're going to do that, and they're doing that in conjunction with some very smart activists, and the product still remains a great seller by the way, the dollar being weaker has helped them tremendously, but the piece -- i'm not saying the piece calls them a ponzi scheme. i am saying that the piece is so critical that i'm going to spend at least the next three or four hours being sure that that piece may be as accurate as it is. >> i did want to squeeze in another upgrade of blackstone, in part because i've focused on

it a lot this is wells. they say it's been overdone, the selloff in breet they say, while breet shouldn't have offered a 5% quarterly redemption structure, we think the situation will stabilize they go on to say, they are decreasing their estimates for the fourth quarter by 9% they're now at $1.01, and 23 estimates go down by 5% to $5.30 but again, overall, it is a positive they upgraded to an overweight in the belief that the liquidity has improved with that university of california deal. we had john gray on a little more than a week ago talking about -- and that overall, they do not see any further hit from breit. >> when we talk about blackstone, this is a $98 billion company. this is not a little operation >> no, this is an -- obviously, had been well over a hundred

billion, $130 billion. >> it's got a 3.4% yield i think this is one of the situations where i urge ceos, come on the show be straightforward comeon the show. tell the truth, and your stock's going to stop. i had it last night, tom jordan. we had it with jonathan gray it makes all the difference in the world. these ceos who duck us, they are doofuses >> you got to communicate with the street one way or another. >> if you don't, i'm just going to say, you know what? i don't believe you. >> meantime, dow is leading the dow higher best dow component of the year so far to date, dow is up 142. let's get to bob pisani. >> that's a good point, carl material stocks, stuff that was lagging last year, is doing better this year so, let's take a look at the sector gainers materials are on fire. all of these stocks are up 6%, 7% so far this year, the copper producers. real estate, big laggard last year, it's doing well. consumer discretionary is doing

a lot better it helps that you have amazon and tesla stabilizing. what's lagging one of the winners last year, kp comparative winners last year, is health care fie pfizer is down bristol meyers lam is down. we are off to a good start for the year it doesn't feel that way but this is one of the better starts we've seen in a long time. dow transports up almost 6%. the russell is up. outperforming. that was a terrible performer last year. nasdaq's outperforming s&p, up 2.5% by the way, the rest of the world is doing even better europe, which had a terrible year, underperforming the united states, is doing well. the stock 600, sort of the s&p 500 of europe, is up almost 6% this year. that's the highest level since april. we're 8% from a new high in europe and china is outperforming china had a terrible year.

you see all those underperformers tend to outperform in the next year. you see that move up there, and that's not far, oh, maybe 15% from a new high as well. elsewhere, we're going into earnings season, and a lot of talk about dividends i know you don't think they're exciting, but they were huge last year. we had a record year for dividend payouts last year because the cash flows of corporate america are really strong, and the margins are still high, and the estimate is, will likely continue into 2023 the important thing here is that investors have been throwing money into dividend-yielding funds, dividend-yielding etfs took in massive amounts of money last year. they tend to favor etfs where companies are increasing their dividends year over year, so for example, noble, which was one of the big dividend payout companies that were around last year, nobl, dramatically outperformed the s&p 500 put that chart up. look at that ten percentage points. they own companies like procter & gamble, for example, that tended to outperform last year, and they paid roughly 3%, 4%

dividend yields for these companies overall. i know you don't think dividends are interesting, it was about 1.7% on the s&p 500, but it's a critical component of overall returns. here's why most people reinvest the dividends that they have these dividends are compounded on a yearly basis. and over time, they are a critical component of overall stock returns. you cannot look at yearly price returns on the s&p carl, the average yearly return on the s&p for the last nearly a hundred years 10. %. 40% of that is from reinvested dividend the other 60% are price returns. this is why dividends are not boring reinvested, critical part of the investor perspective >> great advice, bob thanks bob pisani this morning. as we go to break, let's watch bonds. as you know, cpi, the main event of the week, is tomorrow morning. in advance of that, though, you got the curve mostly lower, two-year around 4.25%.

dollar index, worth watching as well back in a moment

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we've got top for "stop trading" with jim. >> i love this research. credit suisse saying fedex is our topic, talking about it could surprise the upside. $300 price target, 12 times earnings, $25. i love this call i think the company has got a whole new game plan, and i think sometimes when you get to the beginning of the year and hope springs eternal, sometimes that hope is right. once again, not everybody is an idiot. >> we'll see we did get xpo and marest.

>> i always thought the shipping company, they all seem to have the same prices. mossimo is a company that won a first round of a suit against apple for their watch. so i've got joe on tonight we have to watch apple, by the way, getting rid of -- we don't even talk about this -- samsung. i always thought it was interesting their chief -- be a little nicer >> i'll try. >> say hello >> hello. >> how are you >> goodbye. >> no, that's something else. >> we'll see you tonight "mad money" at 6:00 p.m. we'll take a quick break don't go away. ♪

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. good wednesday morning welcome to another hour of "squawk on the street. markets holding on to opening gains. dow up 82. we are one step closer to tomorrow's cpi and friday's bank earnings as we watch some of these travel disruptions today. >> we'll be getting into that in

a few moments. we're 30 minutes into the trading session. here are three big movers we're watching in the meantime salesforce sliding on a downgrade from bernstein as analysts there say the software giant is falling into a, grquot, growth purgatory shares down almost 2% right now. there's a report that they may be close to build a plant in indonesia. goldman naming tesla a top stock pick for 2023 as well. finally, watch the home builders bank of america saying incremental headwinds will be offset by lower input costs. we'll get earnings from kb home after the bell later today we could see both those names up more than 2% right now. >> it's been a volatile morning after a ground stop by the faa

led to delays and cancellations this morning let's get the latest from phil lebeau. >> airports around the country are gradually getting back to what would be considered normal operations we'll see a lot of delays and cancellations today. there was a ground stop that was initiated by the faa essentially from about 5:00 a.m. eastern all the way through 8:50 a.m that's when it was lifted. why? there was a system outage overnight with a critical piece of software that delivers flight data and flight information to the airlines to aircraft you need that if you're going to be flying. the airlines stood down almost all of the flights this morning. the flights are gradually resuming how many will be canceled and delayed? so far 871 flights canceled around the country for a point of reference, there were 150 cancellations yesterday. so we're already seeing much

more than a normal day or something typical of what we would expect delays, almost 5,000 so far flights being delayed as i look at the boards at o'hare, a number of flights that are maybe an hour and a half, two hours later in terms of when they're taking off as opposed to what they were scheduled. as you take a look at the airline stocks, we're seeing a little pressure with the airline stocks this is not one of those things. we've seen this before when there have been outages, where it has a lasting impact on the airlines, largely because investors realize this is a short-term event and not something that is systemic with the airlines you can talk about whether it's systemic withthe airline industry and the faa that's a completely separate debate that's why we're not seeing a huge impact on the airline stocks so far. >> it looks like most of the airline names have turned higher this morning in trading. for more on what all this means.

let's skrens with helene becker. thanks for being on with us today. >> hi, morgan. so phil said, obviously, is very accurate the impact is short term but i find it almost ironic that the faa screamed quite widely at southwest airlines or at least the department of transportation did for their delays, and then just a few weeks later have issues of their own. this isn't the first time the faa has had issues with ground stops. it's the first one we've seen in quite a while, but still, it speaks to the lack of technology investment across the board in this industry. the airline industry were early adopters of technology way back

with mainframe computers, and then they went through all those bankruptcies earlier in the century and they didn't invest in technology. i feel as if things are starting to catch up across the board, and there needs to be a focus on technology, on making sure the airlines are -- and the government as well, making sure that the investment is where it needs to be so these kind of issues don't continue to happen. >> who pays for it this morning? the fact that folks had flights canceled, being put on other flights right now to make up the difference we know when there's a technological or technical issues it comes out of companies' coffer s but what about this issue today >> with this issue, it's really in this black hole depending what the airline wants to do some airlines are offering

waivers to allow people to change their flights if they have some flexibility. other airlines are reaccommodating those passengers on later flights during the day. obviously they're working very hard trying to make sure that passengers who will miss connections at hub airports to other cities can be rerouted over different hub airports or can be reaccommodated over another airline if it comes to that >> helene, more broadly, just to start the year, we're hearing this thesis that industry is finally being able to hire some pilots that's going to be one of the key drivers of their ability to increase capacity this year and allow maybe fares some breathing room does that make sense to you? is delta the tip of that superior not >> well, i think that we're going to see a lot of -- the continuation of a lot of hiring that we saw last year. i think for some airlines, not named american, delta and

united, it's more that they need to figure out how to retain their pilots hiring isn't the issue it's retention that's the issue and making sure they have enough captains to fly. that's where it gets difficult so we are going to see a continuation of pilot hiring, flight attendant hiring, and the one that nobodytalks about, mechanics. that's where there's a huge shortage you're going to see a lot of hiring in that area as well, and the goal is obviously to get ahead of the retirements that we see in this decade and to keep up with the growth that we're seeing we're pretty much back to 2019 without business and international being fully back which i think is really important to think about the industry is doing really well without those two cohorts which tend to be higher-yielding tickets, and they're starting to come back, especially

international business travel where it's difficult to do zoom calls with the time changes that you see to eastern europe seven hours, india more than eight hours, asia-pacific anywhere from 12-15 so it's really difficult to do zoom calls without people agreeing to giving up hours of sleep. you're doing it -- if it's a 12-hour time change, you're doing it midnight. i think that will come back, morgan and carl and david. >> final question for you. just the start of the year, week and a half now, dow transports is up 6% that rally has been led by all of the airlines, united, american, jetblue, delta, alaska they're all up double-digit percentages since the start of this year. presumably china reopening is a big part of the trade we're seeing take place there. is there still room to run in these names given this recent

rally? >> yes, i think there is i used to jokingly say, if i said sell the airlines, i was only wrong an hour a year. i think the industry already anticipated a recession. i think they were -- they saw the worst of it in april of 2020 they come out of that deep hole where, as i said, we're back to 2019 traffic levels. the pricing is very strong for all the things that you highlighted before, not having pilots, infrastructure issues, oem delivery delays. it's going to be difficult i think that was pointed out a couple weeks ago with the southwest issues they aren't going to be able to grow as much as they want to grow the infrastructure isn't there to allow it. with very strong demand and with capacity still below 2019 levels, you have a really good environment in my opinion for

raising ticket prices and for higher fares, driving higher ancillaries and driving revenues higher. >> okay, helene becker, thanks for joining us. >> thanks for having me. turning to the broader markets, dow up 103. it's great to have you back. i wonder before we get to your playbook what you make of the setup so far in these early days, meaning wage growth appears to be softening, some recession calls in europe being lifted china reopening, commodities down for the year. people argue it sounds goldilocks does it make sense >> i think it does in some extent in that the consensus, there's never been a time in history where economists have accurately forecast a recession. as you know, if all the

recessions -- economists have a track record of having never called one yet we got to a point late last year where a majority of economists for the first time in history were calling for a recession. there's potential for an upside rise as farr as economic growth is concerned and the rest of the world is delivering that europe is delivering that. some of the asian markets are delivering that. the u.s. is softening, but the rest of the world, the growth has been surprising a bit on the upside. >> you talk about the dollar i still remember dxy 114, ten points below talk about why that's important to watch and what it says about the u.s. and the rest of the world. >> as we spoke last time, we were on it together, that was really the crescendo of the dollar up move back in the fall, that really i think marked the climactic drop you get a climax where everyone

gets bullish and the dollar has already been in a bull market for over a decade. that's the longest bull market in the u.s. dollar ever since it became a free floating exchange rate in the 1970s. i think a dollar downturn was overdue. it was begun the dollar seems to have peaked and that has very important implications for international markets, typically emerging markets, international markets tend to outperform when the dollar is weakening. i expect more of that. i think this is a multiyear dollar down trend that has just begun. these trends tend to last five to seven years we're possibly just in the first innings of this. >> is that why you also believe sort of in the rises of what you call the rest of the world >> yeah. this massive disconnect has opened up in the world where the

u.s. economy is 25% of the global economy yet the u.s. stock market comprises more than 60% of the global index that's never happened before the gap has never been that large. the u.s. has always been the world's dominant capital market, but never an instance where the u.s. has been so far above its economic weight in the global economy. so i think it's time for international allocations. it was a terrible decade for international investing since 2008, but now the tide has turned and, yes, the dollar's decline is a very important part of that declining trend of allocations towards the u.s. so that i think is the really major shift for capital allocators of going international, seeking out emerging markets again after a dead decade for them the last few years. >> so taking that ruchir, taking the debate we're seeing play out on our air about what chapter

we're in in terms of the bear market right now here in u.s. equity, how does that speak to what history shows us and tells us about echo bubbles, for example? >> the concept of echo bubbles is the fact that once -- even though we think in broader terms that once the bubble bursts, it's the end of it, what history teaching us, including the nasdaq bubble burst in 2000 and the commodities bubble burst of 2010, '11 onwards, bubbles don't burst in a straight line there's a lot of hope still embedded because it was such a long train you get these echo bubbles, values of 50% to 60% that give false hope that the trend is still alive. that's what i call an echo bubble those echo bubbles need to be faded. that's what i think needs to happen a lot of the bounces we see in some of the tech stocks, even

the chinese big tech stocks, but just like we saw in 2001, 2002 or even a decade ago with commodities, all these tend to fade i think the leadership of tech, of growth, of u.s. and private investing, all these big bubbles of the last decade, those have burst, you get echo bubbles of rebound. those need to be faded as the leadership moves toward international, industrials, commodities. that's where i think the new leadership is building. >> that's interesting. i'm actually really interested in your view that there will be structural churn in large tech, the players within large tech, and a lot of it will be industrial for example, today, so much discussion about open ai and microsoft's investment that has severe consumer

consequences >> yes, it does. the point here is this, if you look at the big tech winners of the last tech bull market of the 1990s, just like at the start of this decade, of the top ten companies in the world, a majority of those were tech companies back then. the only real survivor after that which continued to be in the top ten was microsoft. all the other big tech winners, cisco, ibm, all those faded into oblivion i think that's the true nature of capitalism, even more so in tech there's a lot of mortality once you reach such an elevated level, some new business model comes in, some new technology comes in and takes over. therefore, i suspect that the big cap tech still has a lot more to fall over the next few years or at least underperform maybe there will be one or two

survivors. of the ten leading companies in the world at the start of the decade, history suggests one or maybe two will still be in the top ten by the end of this decade so massive churn will need to happen still. >> some of us are old enough to remember some of the names you just mentioned we used to talk about them all the time, ruchir, thanks we'll talk zbloon thank you. as we head to break, here is the roadmap, domestic flight disorder more on whatdrove this morning's disarray and why one former airline ceo warns it could happen again. chinese technology stocks have been having a bit of a comeback we'll discuss with one investor who says the latest rally has legs. the ceo of pf chang's will join us with the lesatt gauge of the consumer with the dow up 70.

a good year so for for chinese stocks, rallying amid optimism around the company's reopening. our next guest argues those gains will hold. let's bring in msa capital's ben harper i'm sure you're feeling a little better about things. there are those who look at the chinese government and don't have a great deal of confidence that what is now will stay but you do why? >> they have no choice there's no option here but

growth this is a government that underwrites its legitimacy based on economic growth people give up a lot of other rights that we hold in other parts of the world in return for improved market opportunities and stability. we have to grow this year. it's evolved as we expected. we have to get through the political strife of the party congress, have to get through the central work conference, economic work conference which details plans for the coming years. it's all systems go for growth as the only option for this country. >> what does all systems go now for growth mean, particularly when it comes not just to zero covid and abandoning that, but more to the regulatory side on the technology names that's been such an impediment to growth >> you look at the context of that central economic work conference, they spoke about reducing regulation and being a lot more friendly towards private sector businesses,

entrepreneurs, super platforms there was no mention of common prosperity, no mention of the regulatory interventions that have marked the last three years or so, and we've even seen them teasing opening up sectors that have previously been shut down we've seen no new approvaling in the gaming space, potentially the education technology sector, and i think ultimately they've finally come to the consensus after those waves of protests, the declining economic data, that rapid intervention was needed on a sustained basis. they have to rebuild trust for global investors this could take years to do. so we anticipate it will hold. >> we rarely talk to you about specifics of names or sectors. i'd like to do that for a second, ben. we've talked a lot about tesla china is such an important market for that company for production, but also consumption of its vehicles.

you own or at least invested there, what's your sense of the ev market in china as this year unfolds? >> i think it's definitively been on track to be 50% of global ev consumption. the government has supported that through some of the same types of subsidies that we witnessed in the united states some of those were rolled back or sacrificed over the last few years as resources were saved up for the zero covid infrastructure and other types of subsidies but definitively i think this is a secular trend that this is china's largest ev market, it will have the largest charging infrastructure my expectations that things like ne-yo relative to tesla are underpriced to day and one of the many stocks driven downward by chinese actions, self-imposed actions be it zero covid or regulatory interventions.

>> given the fact that china is reopening and the data we're getting out of the country is so limited in terms of what that looks like around the pandemic and infections, et cetera, what is playing out on the ground what does it mean for i guess the economic trajectory of this reopening in china >> we're going through a very challenging period right now, anecdotally. you'll never get data on any level of accuracy or scale we are seeing mass debts of elderly populations, colleagues, friends, reporting their elderly grandparents, parents passing away just over the last couple weeks. i expect those numbers to exceed well over a million if not a couple times so we're going through a very challenging period which the expectations is it will peak somewhere around the chinese new year when everyone is returning to their own provinces so outbreaks will continue to scale. we have not yet hit or maximum point. thereafter, from an economic sense, we should start to see a

normalization and a stabilization. in the months preceding this, the end of zero covid, malls an large stopping centers were abandoned for fear of catching or getting involved in a small outbreak and, therefore, being locked down or people worrying about where their next paycheck might come from and using discretionary income to buy clothes, toys, whateverless it was. i expect tourism to return. >> to put a fine point on it, the days of the government stepping in and closing everything down, those are behind us? >> i believe we have no choice i believe they're behind us. >> ben, thank you. >> are you in china right now? >> not today, but headed back in a couple weeks >> ben, always appreciate your taking time. thank you. >> thank you let's get a check on some of the nasdaq gainers we have thus far this morning

there it is. that's laggards. there are the gainers. tesla moving up nicely this morning as well. patyrts about new production caci near its current plant in austin. we're back after this.

coming up this morning, a lot more on the faa frenzy for this morning and what it means for the airlines in a month where the sector has been hit by delays, cancellations, chaos the arca airline index is up back in a minute aughs) spare be. why not both? use the u.s. bank mobile app to apply for a home improvement loan. it's easy! wonderful alex! hey, that's what u.s. bank is for. anything else? how about a loan for a bigger car? our family is growing. awe. yeah, my brother's moving in with his five dogs. oh... heyo! and we're expecting. ahh! (dog sound) expecting what? help for today, planning for tomorrow. u.s. bank. we'll get there together. osisko development is a premier gold mining company with a

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welcome back to "squawk on the street." i'm kristina partsinevelos here is your cnbc news update. in california millions are under flood warnings as thunderstorms and more rain are expected today. 17 people so far have been confirmed dead parts of the state have been drenched with more than a foot and a half of rain the supreme court is allowing new york state to enforce a sweeping new gun safety law that bans firearms

from sensitive places such as schools and playgrounds. opponents sought to put the legislation on hold while a challenge to it works through the court system in eastern ukraine intense fighting continues over the strategically important town of sole dare. ukraine disputes reports that russian private military units have captured all of the city. the mega millions jackpot is now up to $1.35 billion. there was no grand prize winner last night friday's jackpot will be the fourth largest in u.s. lottery history. my cab drive tore day told me he was buying one i'm not so sure about myself carl >> kristina partsinevelos. turning back to the airlines, the faa announcing normal air operations have resumed after this morning's system outage. that said, they still don't know what caused the issue in the first place. our eamon jaffers has more this morning. senior law enforcement

official tells nbc news that there's no indication at this point that there's any kind of malicious activity behind what we're seeing at the faa. the question here is what caused this so far, carl, we don't know the answer to that at this point we've been scouring the dark web to see if there are any cyber actors in the hacker community taking credit for this we don't see anything to that effect cybersecurity experts i've talked to this morning suggest it's not likely this was a cyberattack. they're not ruling it out entirely but so far the early betting among cybersecurity experts is this is not the sort of thing you would see in a cyberattack they point to the fact that some of these faa systems are known to be pretty well antiquated the first guess is some kind of technical snafu before you look to the possibility of a cybersecurity incident or hack all options still on the table at this point. no indication from what we're

seeing here of any malicious cyber activity >> certainly drawing attention to some of those bones, that infrastructure, eamon. thank you. our next guest is warning today's ground stop could happen again and calling for congressional hearings because, quote, the story is bigger than just today's outage. joining us is david ban miller, former pan a.m., aloha ceo, author of "turbulence. appreciate the time. you have to pay attention to the wording in the faa tweets about the notice to air mission system, we continue to look at the cause of the initial problem. >> doesn't that bother you it sure as heck bothers me when you mention turbulence which is obviously what i wrote about, let me give you a couple of talking points that you don't see on the other talk shows. obviously the infrastructure means upgrades they criticized southwest two weeks ago, and they shouldn't

show rocks at glass -- you know what i mean. that's a problem that's a problem the infrastructure has to be upgraded the key question, where does the money come from? 15% of the ticket that you buy goes to the faa for system upgrades but it gets involved in the federal budget process you never know where that money is going to go i believe there's money available, but it's reallocated through that budget process. there's been discussions over the years about privatizing the operating end of the faa in other words, taking those monies and focusing on air traffic control, the towers, flow traffic and technology and leave the regulatory piece separate i certainly endorse that >> we had a discussion this morning about whether or not we should move into a period where there are scheduled utages, scheduled ground stops to allow for improvement in some of this back office architecture

do you think that's where we're headed >> i think the first thing technologywise is you have to have a backup system i don't know whether they do or don't. sounds like they don't i can tell you at american airlines, their operating center is like nasa, and they have backup system after backup system because they're ahead of the curve on technology. they have been for years but to shut down an entire system is kind of a bizarre recommendation bike boyd who you had on earlier talked about the politics of faa appointments i agree with him there is money there and they have been looking at upgrades for years, but nothing has happened i think congress in the new session needs to have hearings with the committees they have, the aviation subcommittee is responsible for that, to look at where the money is being spent and what we need to do technologywise to fix it >> david, just to go back to this idea of privatizing or partially privatizing the faa, are there examples of where that

has worked and worked successfully in other parts of the world that could be implemented here >> well, goodquestion, morgan. let's start with canada. canada has a much better system of managing this than we do. while i can't represent all the technical aspects of how canada does it, their funding process is outside of our -- what we call the federal budget process. they don't manage and fund their air traffic control systems, their faa the same way we do so in our case those monies are sitting there and they're allocated or reallocated not necessarily to where you put your 15% that is a difference other parts of the world i'm not quite as familiar with but in canada's case, as of this morning, checking with some other people, they have a better system for the budget process. >> so whether that were to happen or not, it sounds like

just even trying to completely determine what money is coming from where, going to where within the faa, given the budget and how wieldly that is on an annual basis and knowing how long that takes for private companies themselves to be able to invest in and roll out technology we're talking about infrastructure changes that will probably take years, even without the details actually known yet. >> let me quote confucius. the walk of a thousand miles begins with the first step we have to take that first step. it's definitely going to take a long time, but we have to recognize what needs to be done for technology upgrade we're talking about thousands and thousands of airplanes in the air at any one point in time and talking about fixing bridges, which, by the way, is important. but what about managing air traffic control systems? we can reduce emissions, all

that technology is available and should be employed but it's not. you need somebody driving this in congress. >> finally we have airline executives on every quarter, and i would argue, this never comes up why isn't it more of a rallying cry on industry leaders on the private side >> i've got to tell you, carl, you're hitting a sore point here i have been trying to do it for years even when i was ceo of different airlines right now when i'm talking to you, i'm my own guy. i don't have a board of directors. i don't have other folks i have to worry about i don't have to be politically correct. they have the same feelings, but won't go on nationwide television to say what i said. it's time the d.o.t. secretary and others within the faa and our congress gets their act together i can say that, they're probably reluctant to believe me, they all feel the same >> i'll tell you what, it's

going to come up this quarter when the calls start happening appreciate the insight today on an important day see you soon thank you. >> thanks for having me. as we head to break, with the s&p in the green 39.35, here are the biggest gainers, bio rad labs, also ge healthcare up 4.5%, other names include charles river, solar edge and etsy is up 4 'rba ithe.%. o better...together. like your workplace benefits... and retirement savings. with voya, considering all your financial choices together... can help you be better prepared for unexpected events. voya. well planned. well invested. well protected.

welcome back to "squawk on the street." inflation top of mind for investors as the fed continue to raise rates. that said, are there signs things could be slowing down our senior economics reporter steve liesman has more hi, steve. >> good morning, morgan. new data suggests tomorrow's inflation report from the government could be soft with a possible negative headline number, and it would join other private sector data we've been following, suggesting easing in

inflation. the state street price steps inflation index falling 0.3% month to month for one of the biggest drops since the pandemic not surprisingly driven by a sharp decline in fuel prices along with apparel as well other sectors like food look like they were bouncing back toward the end of the month from a soft november. the monthly decline pushing the year over year rate down to 3.9% from a high of 6% in the summer. it's running below the cpi, but generally tracks in the direction of it. no guarantee the cpi tomorrow will follow this data. it's not the only inflation indicator trending down. we've been looking at these price indices inside a bunch of the survey date the. the ism down 17 points from its peak in april 2022 ism manufacturing price index down 53 points and the nfib, percentage of respondents

raising prices down 30 points from the peak in november 2021 falling inflation data could explain why the market isn't following the fed. it's because fed chair jay powell's case, the one that says rates needs to right because of rising inflation and core services, knapp says thatis falling apart. he sent me this data, the measure that powell focuses on, it's fallen every month since peaking in june at 12% and now stands at just 3.17% the result is market pushes rates lower because it has to believe at this point the fed has done enough and inflation is easing fed officials kind of acknowledge the progress but they've stuck to their hawk kish comments about higher or longer when it comes to the outlook for rates. morgan. >> steve, thank you. our next guest warning it could be, quote, the biggest threat facing the restaurant industry over the next two years. here to discuss, pf chang cfo.

thanks for being on with us. where the fed and markets are concerned. they strip out things like energy prices and food prices. what are you seeing in your stores >> a lot of it is driven by grocery in addition to restaurants, you see on both sides there's a lot of pressure in certain segments within grocery, like eggs have been particularly painful for consumers. as the fed thinks about inflation, they break it down to goods and commodities and they look at housing. they feel good about both of those categories it's the services piece driven by wages that presents the biggest problem. we're watching the wage rates closely, seeing how they're trending there is some positive trend in the last few months, but still at very elevated levels. >> are you able to hire enough workers in your restaurants? >> we are.

there's more availability for jobs than there are people seeking jobs in the economy broadly, and we see it in our business as well that's starting to stabilize a little bit, starting to get back towards parity you see a lower number of severances in the last month or two, lower turnover rate, higher retention, all of which are precursors to being able to fill the jobs we need to fill and being able to manage wage rates in the next few quarters >> we talked to you about that in the past. how different is it than it has been is it your expectation it's only going to improve as this year moves along? >> if you would have asked me three months ago, it would have been no different. our peak kind of difficulty in filling positions would have been middle of this year, q2 month over month over the last three months, i'd say it started to improve again, not talking about wage rates necessarily. that's started to marginally decline. what you're really seeing sharp

redu reductions, in things like separations, points, turnover rate, and that should lead to a more kind of stable labor environment, people are quitting less, leaving their jobs at lower rates and staying with the same company longer. that's going to put less pressure on wage rates which i do think we'll see in the next few months. >> i wonder how you're processing what appears to be huge disparity in food inflation. we've seen downdrafts in things like chicken and coffee. everybody talks about what eggs have done because of avian flu and so forth what's the overall trend right now? >> you nailed it it's category specific the overall trend is declining in terms of inflation rate the peak again was in 2q of last year, 2022 where you saw the massive increases in chicken sought categories went from $1.00 a pound to $3.50 in june

that's come back down to close to a dollar. flank has come back down most categories, oil, driven by the broader energy picture most categories are under control. there's a couple categories that are speaking some have unique issues in their supply chain markets you look at eggs, for example, there's the avian flu epidemic that's wiped out 40 million birds in the supply chain. that's driving prices up in eggs, rises in other categories where prices are going up. we manage category by category overall, commodity pricesare coming down. goods prices are coming down building and commodity prices are coming down. the biggest issue again is wages which you're starting to see preliminary signs that that might start coming down in the next few months as well. >> we talked about the back of the house. what are you seeing in the front of the house, specifically where consumer behaviors are concerned? are those changing or moderating are you making plans for the potential of a recession this year how are you thinking about it? >> we've been planning for

recession, and that's maybe just being conservative and making sure we manage the balance sheet and cash appropriately our plan has called for recession in the first half of the year driven by the fed's focus -- well, the fed's coke cuss on wages, and i haven't seen wages com it hasn't happened yet it's premature to expect the fed to ease up until they see that with that, it's possible to get a recession. it doesn't have to be a deep recession. it can be moderate it's just slower growth. we're planning for that and managing the business accordingly. >> thanks for joining us >> thank you >> a quick programming note, as we take you to a break

we're looking for a read on the consumer we all are you're not going to want to miss an exclusive interview with kroger chairman, rodney mcmullen, this afternoon on "the closing bell." they will be talk inflation, consumer spending and more 3:00 p.m. eastern. 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

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welcome back stocks starting the day off with fractional gains the s&p stringing together back-to-back positive sessions every sector is in positive territory. that's thanks in large part to performance of tesla, on the heels of the e.v.maker in texas. and also, online retail helping the cause. check out what's happening with etsy and amazon.com. and bullish territory out of oppen oppenheimer, with expedia. watch the travel names and discretionary. now, carl, back to you folks at the new york stock exchange. coming up on "tech check,"

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welcome back ftx back in delaware bankruptcy court this morning big potential rulings on the tape kate rooney joins us there >> the latest ruling for ftx is in a court this morning. the judge saying that the crypto company has recovered $5 billion of liquid assets that's crypto and crash. that's welcome news for customers who are owed about $8 billion in terms of the estimates there. adam landis telling the court that it includes liquid tokens that are so large, that the accusations cannot be sold outaffecting the market with the tokens we got update d court filings

showing a new list of holders. affiliates of kraft group. that's robert kraft's firm, owner of the new england pa patriots also affiliates of endeavor. others affiliated with the ali baba co-founder. it's a high profile list venture capital investors. sequoia wrote off its investment down to zero also on the list, ontario teachers pension fund. controlled over 6 million shares in ftx tom brady and giselle bundchen were spokesperson and brand ambassadors. he has pleaded not guilty to eight counts of fraud.

back to you. >> fascinating part of the story. questioning the diligence, whether there was any from the well-known investors, fiduciaries. not brady and giselle. the other names you mentioned. that's going to do it for us on "squawk on the street. "tech check" starts right now. good wednesday morning welcome to "tech check." why last year's worst performers on the dow are thriving to start 2023 then, is it time to start rethinking apple the analyst who slashed his price target this morning joins us have we reached a third act on streaming? why investors are not pulling the plug on streamers so far in the new year a check on the markets, as we begin this hour stocks are higher for the second day, adding to solid gains so far. the nasdaq, on pace for its first four-day