prelude to what he'll be talking about. i don't know if -- maybe he'll talk about jamie's comments on bitcoin. >> pet rocks and all >> we'll be back where will we be we won't be back tomorrow. >> "squawk" is going to be on tomorrow we got a big show tomorrow with our friends who are going to be hosting for us >> we'll be back on monday thank you, everybody right now, it's time for "squawk on the street. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. premarket is adding to losses. mixed bag of data, but jobless claims falling to 190,000 means that yields are higher across the curvem our road map begins with the soft landing scenario. plus jpmorgan's ceo, jamie dimon, is still pointing to plenty of economic clouds, saying there is a lot of underlying inflation out there

still. and higher costs weigh on consumer giant procter & gamble. the shares are under pressure. we'll take a look at the numbers ahead of the open. let's start with the markets on track to extend the losses from yesterday earlier this morning on "squawk box" in davos, jpmorgan chase's jamie dimon weighed in on the economy months after warning about what he called an economic hurricane. >> part of that storm cloud's hurt, rates went higher than people thought stock market's down 20%. the ipo market disappeared and the economy, of course, we all talk about it. it's like the weather. we don't really know, and i hate guessing about that. we should have a little humility but the real issue for the world is russia, war, ukraine, energy, trade, and that is serious that's still out there hopefully it will all mitigate and go away, but it may not. as a risk manager, you prepare for some of that >> talked about rates once again, jim, staying under five

>> it's funny, he said he's never seen anyone get it right maybe he should meet this fellow, michael, who is his strategist, who does eye on the market, who's not nearly as negative as that, and has been consistently right >> that works for jamie? >> talks to jamie every week so, if the contrary nature i have about jamie is if he's got someone who is right who is not as negative who i think is the best there is, david, i've got to tell you, i regard this as business as usual. you have seven straight up days for the nasdaq, based on nothing. none of the numbers i see are that good. you have interest rates have an extreme move yesterday that seemed like a short squeeze in treasuries again, after the market's up and i know i'm going the say something that's not received as important, but i think it's business as usual. i think you had a couple rate hikes. i think james gorman is going to be right we're going to get -- >> what does business as usual mean what do you mean by that >> you got to cool off

inflation. we haven't had -- where are the bankruptcies party city i looked at a party city this weekend. i don't know >> i saw your pictures from bed bath & beyond. wasn't that this weekend i think i saw you tweeting, you in an empty store. you did go at like 5:00 in the morning. >> that was, like, 10:00 on saturday, like the caverns when you were the only person allowed to go in once i got in early to see cooperstown, and it was crazy. the magic kingdom. i got in early not anymore. i don't think they'd let me in the magic kingdom early. i think they'd put me at the back of the bus when it comes to the jungle cruise. >> i think so too. i don't think you get good treatment at disney at all >> peltz and i -- >> your endless criticism of that fox deal. >> geez, i hate -- wrecked balance sheets sorry. sorry. >> back to business as usual >> okay, i just mean that, look, we haven't had layoffs, except for companies that are very

rich oh, microsoft's balance sheet can handle that. when we see companies that are actual companies who file bankruptcy, and i'm not talking about the crypto nonsense, then the fed will be right. but so far, it's -- it hasn't happened david, where's the closures? besides party city where's all the -- i mean, party city had a bad balance sheet i was at petco this weekend getting stuff for ragu, you know, and for bob marley, and look, i think the business is pretty good. that's a leveraged buyout situation. that should be on the ropes. but it's not it's doing well. we need some -- i just mention that because that's where i was. there's any number of -- michaels was next door we can do that everything that's in the strip malls that you don't go to because you're busy on etsy. what'd i say jay, please get better covid. can we admit the guy's not well

right now? but you have to have layoffs, david. now, am i rooting for layoffs? do i want that no have you ever been fired >> no. >> it's awful. >> no. i haven't. >> i got fired >> there's still time. there is still time. >> i was like a union leader i was a shop steward i got fired. i've been fired a lot. i have to tell you, it was never satisfying but we have to have more -- i mean, i'm not -- it's not fun. >> i get it. carl -- >> google hasn't even fired. they were still hiring >> alphabet hired. now they're finally -- they hired, what, 3,900 people? >> they're laying off 200 people >> we did have a turn in the market overall we heard from mike wilson, as you know, who has been dead right. talking about the fact that, you know, there's something very underappreciated right now, he feels, which is the reversal in terms of inflation and the impact that's going to have on

earnings that he says is institutional clients have not fully reckoned with. take a listen. >> many corporations actually saw windfall profits because inflation went straight up, and the costs were lagging in that regard in other words, revenues were increasing at a much higher rate than cost of goods sold because there was a lag between the cost structure and what they were getting in the -- pricing their product. now it's going in the other direction and we feel like from talking to clients, so it's not -- it's not anecdotal, we talk to clients every day -- that this particular dynamic is underappreciated in our client base, institutional clients, meaning there's a general view that if inflation's higher, it's always good for profitability, but what that misses is the timing of costs versus ruevenue. >> how about empirical jb hunt, forth largest trucking company, says the costs are

coming down. they've already lowered their spot price now, they're going to lower their contract price, so you say, wait a second, everybody uses them raised price but they had to deal with the cost of jb hunt i'm talking about the procters of the world so, the supply chain problems are getting fixed. the transport problems are getting fixed. the supply costs are coming down procter has not lowered price yet. the ceo who, by the way, is not a liar can we just say he's not an idiot or a liar? i don't want to go out on a limb here basically said the opposite of what wilson said procter's a big company. now, mike wilson has been right. a lot of people have been right, but i just say that i'm smack in the middle of a company that basically said the opposite of what he said, and i find that john mueller, who is the ceo, is not a fool or a liar and i'm struggling >> we're going to hear what mueller said, i think, in the next segment, but wilson's point

is largely that your cost of goods sold slows slower than your sales sales erode quicker. but now we've got, for example, year on year ppis below year on year cpi it's the opposite of that view >> i'm struggling. i know everything that goes into a bottle of shampoo, but it's mainly plastic, surfactant, like a surfactant is something that's been going down in price plastic's going down in price. is price has not gone down to the consumer what am i supposed to do it's the largest consumer packaged good company. >> it is >> what am i supposed to do, just say they're liars >> we're going to get into that in more detail >> because futures are down? >> back to the broader market and business as usual. what does that mean you want to do here, jim >> how about buy >> you've been kind of cautious. >> own tech. i think tech's ridiculous. 27% of the s&p with numbers that are coming down across the board. i don't want to be in tech tech is a fool's game right now. >> you still think so.

>> i've been right >> i mean, some of your mega cap tech names sport multiples that are far below the average. >> look, i'm waiting for alphabet to cut. andy jassy, who, by the way, is a giant fan, okay, four fives, let's see what their record's been the last nine games versus the eagles but jassy is supposed to make the cut, so he lays off a couple -- he's like the six army in world war ii. similar size why doesn't he realize that the war's been won and start firing people >> amazon is firing people >> he's firing a fraction. he hired 300,000 people. what are they doing? >> that's true >> what are they doing, besides organizing >> they hired a lot. >> would you get as fired up as i am what an outfit you have. that jacket is gorgeous. >> thank you made in italy. >> by the way, jpmorgan's desk this morning, long onlies adding

to mega cap names. demand has been on and off since january 2nd. i bet the demand in the near term continues, though google, meta, apple, amazon. i think they'll start nipping on microsoft soon haven't seen that yet. >> well, microsoft was just classic. yesterday was up two bucks on the news that it was firing people and then said, wait a second, maybe business isn't good it was very much like what i regard as a false start, and it was five-yard penalty, except for it was a $5 penalty. they walked it back. the tech is doing not well and they haven't addressed it, and there's just -- the inventory problem across the board, including tech, i mean, there's too many companies that analyze data that can get you out of the vertical, put you in the vertical, put you on premise, put you off premise, i mean, are you kidding me >> yeah. but the stocks themselves -- >> they're coming down >> all right right. >> apple'sthe only one >> apple is up 4%.

meta is up 10% >> meta fired a lot of people. >> amazon is up 13.6% for the year even tesla is outperforming the -- actually, no. right in line. no, it is outperforming the s&p. >> what's your point >> my point is tech's doing okay right now. >> i'm saying, it's got to do less than okay they have to -- those stocks have to go down. you have to have money coming from the sidelines, which is hard, because you're getting so much it goes to companies that are doing well that don't have to cut numbers. that's the transition i see happening. and that's -- mike wilson's going to be right about the 27% of the s&p is that needs to go to 20%, which is tech. but the rest of the money's not going to leave it could go to other areas that are doing quite well, including the non-fintech companies. am i upsetting you i'm sorry. >> you are not upsetting me in any way. you rarely upset me. >> i realize that i can -- >> i can hardly scan my memory to come up with moments that you have truly upset me, so don't you worry. >> thank you for that. >> you're welcome. >> so, for now, you think the

200-day is going to be pretty solid resistance >> 200-day, you know, take the roof piece up, carpenters. jd salinger? fabulous come on. raise high the roof beam, carpal tunnelers. >> i don't know it fra franny and zoe "catcher in the rye" is the only one i know >> oh, they made us read that in school clowns james gorman, i want to give the ball to the guy with the best quarter, and he's still sanguine >> sanguine? he said, "inflation has peaked, it's no longer a question. it's a fact. >> how'd he do versus jpmorgan i want to give the ball -- i want to give the ball to hertz, not to tom brady by the way, hurts was on today, and he said absolutely nothing but i just think you don't -- you know, jamie wants to say

something, which is basically, hey, you know, it could be 6%, could be really terrible, yi don't know could be also great. but it may not be all right. >> he's still sort of defending the hurricane comment to a certain extent, saying, well, we had plenty of storms nobody issued equity leveraged finance, obviously, has been very quiet. >> we had the equity markets shut down. we have issuance shut down but we don't have the layoffs that would make it so jay powell would feel -- i don't know what his temperature is, remember, because it's -- covid doesn't really affect the temperature, more the optimeter >> investment banking is down sharply, and nobody's going to cry. >> that's not anecdotal. it's empirical >> well, they've come out of comps. some are still in it, but it's ugly >> how about if i just say that the market went up every single day this year until yesterday and that's long, seven days in november of 2021 was wrong for the nasdaq and that's okay. we need to come down a little,

okay >> okay. >> could you just -- did you get any sleep last night >> no, actually, i didn't sleep well as i said, i had a jim cramer night. i slept like three hours >> i got three solid hours last night. i have to do my investment conference, 4,000 words. i said, shoot, it's 12:00. i got to get up in three hours better hit the sack. >> ten hours or i'm a basket case that's the line from manhattan >> if you sleep a lot of saturday and sunday, it gets you the wednesday. >> that's not true >> it is i did the work on it david, it's empirical, not anecdotal. >> did the work on it? yes, look what you can be if you get three hours of sleep a night. >> something to aspire to. >> i took that course 19 times, wilson >> we'll get a look at futures as we take a break on the other side, we'll get further into p&g and some of the smaller bankth rors atepted today. netflix tonight. there's futures. we're back in a moment [music playing]

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i screwed up. mhm. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? you can almost feel the drag when people walk by with their phones. oh i can't hear you... you're froze-- ladies, please! you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do. that and the paycheck.

protector procter & gamble moving lower the company did raise their full year sales guide as it deals with rising costs. earlier on "squawk," the ceo was asked about the chances of a recession. here's his response. >> things actually look pretty good if we look across the world, let's assume that china does recover. the u.s. economy continues to be strong demand for our products continues to be strong our markets continue to grow consumption continues to grow. the developing markets have been fairly resilient through all of

this europe is a bit of a question. obviously, eastern europe, but also western europe, depending on what happens in the energy markets, et cetera but you put all that together and it doesn't look, honestly, horrible >> taking ten points a price, jim. >> now, if the futures were up, the stock would be up four bucks. when you listen to him, what he's saying is that the scosts are coming down. but they have not lowered prices where there is tradedown, they've traded down from one kind of procter product to another. i think the supply chains that he doesn't think are easing actually are easing, but who am i to say that he doesn't know about those? but they're easing for most companies. so, all this is, david, leaving me sanguine now. my trust owns it we owned it forever. it's like, okay. >> organic sales up 5% >> what's the matter with that >> nothing, but volumes were down 6%. is that an issue some weakness in grooming?

fabric and home? >> well, you know what i look at these, and i say, they go up and down and up and down and i used to really fret if i saw grooming weakness. i would say, uh-oh, that's the beginning of -- no i mean, procter's a dividend aristocrat that does quite well over time and you get periodically these chances and for the people at home, it's a terrific idea. i'll tell people to buy it at $140 or $135 but look, this is a really great american company that's growing organic volume >> they raise their organic sales growth estimates for this year to between 4 and 5% >> had they lowered it -- >> they upped -- >> it's going to $125. but they raised it to use mike wilson's comment, empirical. >> yeah, left the eps guide unchanged and lowered their guide for currency headwinds >> i thought that was terrific, and currency -- they were being

very conservative on currency. the other thing i would say is that i wish he had spent more time talking about what goes into his product like when you buy a razor, david, you know, and you have to -- you get the chainsaw out or the hacksaw in order to get through the plastic. >> yes, that's tough >> that stuff's all going down in price i actually thought at one point he would talk about pilferage and talk about when you try to buy something at walgreens, you press a button and five minutes later, somebody comes by and says, they don't have that >> opens the drawer. >> i can get it from amazon quicker than i can get frit walgreens. their business is doing quite well i'm surprised organic was up 5%. they have a lot of divisions i never want to see one division down, but it's pretty much -- they never all go up at the same time so, it's fine. it's better than fine if organic's 5% so, let them sell it the futures are up people say, look at that it's not as bad as i thought

>> definitely folds in with what the fed's collins is saying again about a softer landing >> the bonds are saying, hard landing, and the stocks are saying, soft landing, so foam the darn runway. >> we'll get cramer's "mad dash," countdown to the opening bell coming up in less than ten minutes. don't go anywhere. ♪ ♪ a cyber-attack can grind everything to a halt. cisco security keeps your company moving forward. because if it's connected, it's protected. cisco.

let's get to a "mad dash," six and a half minutes before we start trading at the new york stock exchange you and i have spent a lot of time talking about disney. continues to get a good amount of research coverage and upgrade, you know, comments,i should say >> well, the old days, we were just grip bid apple, which, by

the way, had a savage -- i'm focused on disney, because you would think that in a recession, maybe the first thing that would happen is that people cancel those trips because they're expensive, but people want to go away david, life is short i think that if you don't spend some time -- i have a great picture with pluto and my sister where pluto has his arm -- anyway, i just think that what's happened is here's a piece by citi saying the parks are likely resilient, don't worry about a recession. and you know, frankly, it's -- downside scenario is very low. so, i keep coming back to a theme, which is that travel and leisure is very strong, of which, by the way, comcast, whom we work for, has theme parks too, and business is very strong >> core component of the company. >> yesterday, carl mentioned vale resorts what's happened is that if you're -- you got something where people want to go to, and

they recognize, you know what? since covid, i'm so glad that i'm alive, they don't say, and that's why i really can't wait for grand theft auto 6 they say, i want to go to a really amazing place and have a great time, and that happens to be disney. whether nelson peltz is on the board or not >> disney world is still -- >> do you think that if peltz is on the board, suddenly the theme parks would be lousy >> no. >> right but those board meetings, they be rocking >> they would be interesting they would be interesting. lot more to come on that fight, of course. we got months ahead. speaking of what's ahead, that's an opening bell about five minutes from now, and don't forget, we try to remind you every day, you can catch us any time, anywhere you can listen to and follow the "squawk on the street" podcast >> we won't see your faces >> you won't you'll just hear my voice, but hopellfuy i can convey irony in my voice >> you do it best with silence

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inflation numbers are better, right? clearly, inflation peaked. that's no longer a question. it's a fact. the question is, can they get to 2%, and how hard will they try to get to 2% versus stabilizing around 3.4%? second thing that happened is china has made a major, major pivot. >> that's morgan stanley's james gorman in davos on "squawk" this morning talking about inflation. i mean, you can get to 2% cpi if you annualize six months, jim, past half a year >> yeah. look, i thought that what he said was very not lacking in provocation. it was just kind of a layout of a decent stretch he's positioned his bank similarly, and look how well they're doing, and i think -- i don't know, david, when i listen to him, i said, all right, well, there's some issues. we're not there yet with inflation, but it's okay >> he's more positive, i think, that's true. when you do talk to these ceos, and not just financial services, they will also go to the outside

issues, war in ukraine, certainly jamie came back to that relationship with china. those are incredibly important, obviously, outside of the -- their ability to control what happens, but having a response, potentially, to what will happen >> you know what's happening right now? within this period of about 30 days, india passes china as the largest country in the world with half the people under 30. when we saw china like that 20 years ago, that was the -- became the halcyon days for consumer product good, and for companies like, you know, an apple, ultimately. so, india is -- i mean, the real story here is the demographic one. india, larger than china unfortunately, china some sometimes -- it's come down to one child but also the ridiculous policy on covid, which is anti-elderly. but i think that we have to regard that as a positive, that india is bigger than china india is a democracy

now, andrew ross sorkin had a very disputatious conversation with a minister from india, basically talking about how they're taking all this russia oil. but can we just say it's not such a bad thing in the world to have a capitalist country with a government that is democratic become the largest country on earth? not a communist dictatorship that locks up whole groups of people because they don't like their religion >> demographically, politically, you think india's adscendance is important. >> my wife spent a while in india. they're not a developed country, but they sure do have a developed education system >> like every country at one point with 4 billion people, they have their share of issues. corruption is still an important issue there as well. >> right >> one they deal with all the time >> we can just ignore it at our own peril. it's just a -- this is a great opportunity. >> are we ignoring india

>> the fact that in the last month that they passed china as 1.4 billion except for their age is almost half of china? i mean, yes, we're ignoring india. >> who's the "we" here >> we, being people who talk about the stock market >> okay. >> david, as mike wilson said, it's empirical >> you allude to apple, the supply chain migration over there. you also alluded to jpmorgan trimming to $180 on this -- they don't think the december quarter is going to be quite as bad, but they think the set-up for the march quarter might be rough >> we got to have more layoffs i hate to cite negatives thbecas i'm kind of sanguine, but fernado, they had to cut their quarterly dividend from 53 -- it's now down to 37.5. they cut their dividend pretty seriously, and david, this comes back to the change since covid it's hurting some companies. >> yeah, if you're an owner of

commercial real estate, significant office buildings and major metropolitan areas, you're not overly excite about your prospects. >> no. >> you've got, you know, you've still got probably 80% leased or something along those lines, but you've only got 50% of the people coming into the building, so what does that auger for the future in terms of those companies' willingness to pay for a space that isn't being used those are the big questions. we've dealt with them for years. still go to downtown, midtown manhattan, you can see there are not as many people as there were three years ago. >> no, and that's -- i'm wondering now that that's a secular trend, 29% discount -- dividend cut i come back, david, and i just say, again, if you're the fed, you're needing dividend cuts you're needing to see dividends eliminated you're needing to see companies that are not doing well to close. you need these things because

you need to get employment so that people don't say, you know what i'm willing to pay $8 for kerrygold butter >> wells has a note out about new york real estate today their large point is that it's mostly been about new construction, flight to quality within manhattan specifically, but some of the wage -- wage growth in manhattan, year on year, is 30% >> that's why when you go to the supermarket -- david, you should try it it's really amazing. i'm not doing that where's my buy one, get one cereal no i'm going to buy the cereal that's generic >> yes, wages are up pra pr prices are up a lot, and people continue to not go to the office as they once did >> are you trading down? >> i'm unaware of any tradedown going on >> that's part of the problem. >> i'm not making the frontline decisions. >> no, you aren't. >> none of us make the call. >> i'm not making the frontline decisions. >> people just say, i'm not paying that price, and you get a

combination of schwab double downgrade where people say, i don't want to be in stocks when i can be in treasuries then you're getting that momentum that you need that's basically saying, i don't want to take any risk, and i'm not going -- >> let's talk more about this schwab downgrade, just taking it right from you we forget this is a $150 billion market cap company you know, this is not -- yeah. this is not schwab from years ago. this is an enormous company, one of the bigger financial companies out there. they reduce, what was it, b of a, right >> it is >> and they go to an underperform >> 75 target >> remarkable. it's a great company, schwab >> what's the problem here >> well, you know, look, have you looked at what you can get in rates pretty compelling. >> yeah. >> the two-year, you get 4%. you sleep at night even you last night would have slept. >> you circled and crossed things out and underlined. >> this is called the craft. if we were in a movie, if we

were actors and actresses, we would say this is the craft. >> that's the craft? >> that's the craft. not bob kraft. the craft. >> i see looks more like something out of "a beautiful mind." you remember that guy? >> i met the guy who did that. he wanted to know if i had a beautiful mind, because he said, you seem to now 2,000 stock prices i said, yeah, but i don't know how to tie my shoes. >> well, schwab is do youwn on t double downgrade >> it should be. this is nuclear war. >> to the point early, sl green is down another 2% these are the companies. these are the reets that are particularly impacted, in part by worries about the commercial real estate business >> but how about boeing? >> i should say, office space. >> remember boeing, you talked me out of selling from my travel trust. boeing is getting orders we had a construct -- janet yellen has seemingly constructed -- they're talking about constructive power

>> we talked last week about china southern or at least australian coal, china's reopening, access for boeing >> so, boeing's down maybe you buy some boeing. i think that it's really interesting when you talk to someone like carmine, who runs ey, he will tell you that the ability to have face-to-face talks with the chinese rather than zoom actually produces a better relationship, no offense to mr., you know, zoom but what i'm saying is i'm looking for things to buy, not sell there's a piece this morning that says, boeing's free cash flow won't be as good but there's two companies that make planes we have a big plane shortage maybe you look for boeing. but be opportunistic dr. borla was on with sara eisen. he's got drugs coming, got a good yield the stock went down $1.50.

>> capital one down 7% is that about the discovery of net chargeoffs from last night >> yes, it is. they historically have given people credit cards where some people struggle to pay i don't think it's nearly as dangerous as buy now, pay later, because it's becoming buy now, don't bother to pay. there's a guy who runs it and he's seen every downturn, and i think he would explain to you that the people who own the stock panic. >> we're talking capital one here, although we also saw discover >> discover was not good >> no. in part, that's what -- total net chargeoff rate was 2.13% that's higher than the prior year period reflecting what they say is credit normalization across the portfolio credit cards, net chargeoff rate, 2.37%. >> that's too igh.

>> that was up 87 basis points from the prior year. and just 45 basis points quarter to quarter >> that's not good and i -- one of the things people are doing, they're selling insurance companies, and they're selling them because of the storms now, historically, initially, you sell them and they raise their rates viciously. >> oh my god still my -- chubb's crushing me. it's crushing everybody, right >> my wife's real estate empire is being crushed by chubb. i had evan greenberg on, one of the greatest ceos. he said that my wife's real estate portfolio is right on the top of his desk, left corner >> you probably own up 20%, because mine did >> went up a lot >> it's a big number, man. >> what do you want me to do, call them? >> when you have, like, 14 homes, that's got to add up. >> how about 15? >> i missed. >> on the other hand, guys, truist is doing okay as expense

controls were good little upside guidance on that interest income. >> i've liked every bank except for the masses have decided that pnc is the one that did a bad job and yield is 4%. but yeah, truist is good the one that i still love that everybody's just kind of said, stay away from is wells. wells is -- when he -- when charlie scharf is finished paying the government for things he didn't do, you're going to see a nice move. you're going to see a stock go to 62 where it was on february 8 of 2018. you're going the surprise everybody. >> what are we thinking about netflix? >> if it doesn't do 5 million allysubs, then this is one where the expectations have gotten very high i think that ted sarandos is doing a remarkable job you know they have a good stock if they talk about the things they liked on netflix versus they talk about the financials if they talk about the financials, you got to sell the

stock. >> on the call. >> what did you watch? if they say, i watched mayor of kingstown, no, that's the wrong channel. >> each quarter has been an adventure, beginning with significant losses and then the last quarter, additions that were helpful to the stock. >> what are you watching on netflix right now? >> i don't know. not watching netflix >> i mean, they had, like, seven of the top ten shows in december by minutes spent >> my kids are >> led by "wednesday," forone. >> there's the win they are not -- there's absolutely nothing formulaic about it i watch "jack ryan" and it was totally formulaic. >> isn't that on amazon? >> i'm mentioning something that's formulaic you buy it on amazon >> i don't buy it. it's their show, isn't it? >> no. maybe it is. >> yes, it is. >> maybe it is i don't know okay >> clearly, you don't know >> i don't know.

"mission: impossible" is paramount. >> i could ask you what you're watching on netflix. you have to idea >> that looks okay in the book i keep referring to. one of the prokzblems is, look what just happened one of the biggest movies at amazon, and i got it wrong there's like, "yellowstone" every seven years. >> "yellowstone" is on peacock >> netflix has a slate that's different from the other guys, and i think that has appeal. >> interesting note out of b of a today on disney, and sort of putting cold water on an espn spin because of the low multiple it will likely get >> there's not going to be an espn spin. >> hope springs eternal on that. dan loeb had suggested it. chapek dismissed it. plenty of people in the media mafia out there have been talking about it, wondering, would it happen? how could it happen? >> who's this? >> just the hedge fund guys, the bankers, all the guys who focus on media and would there be interest if

espn was spun in some way from our parent company, or could you imagine other companies that might want to take a look? it seems more -- less likely that it will happen, but it has -- but iger's ascension to the ceo spot has reinvigorated people who are hoping, perhaps, that there's an opportunity that could be presented by that being spun >> i do work for the company, but you know what comcast has over disney? >> what? >> a balance sheet >> yes yes. and actually, going to get more money when disney steps up to buy more of hulu >> exactly what hulu was, you like that one -- you liked something h"handmaid's tale." >> the first season of that was good i've watched a lot of stuff on hulu watched the fleischmann show >> is it fleischmann fleischmann is in trouble. >> it was a good book too. >> if you live in manhattan, you

should watch it. >> it's a certain subset >> evercore today takes comcast to check academic 42, on just multiple expansion within the sector we know it's a good start to the year >> it's a great start. they have optionality. they, by the way -- >> who's "they"? >> they could put that theme park that i want on that 300,000 acres i found in new mexico. the biggest corridor in the country is that one from austin to denver. they have the optionality to put that theme park in new mexico. >> "harry potter" times ten? >> oh my god, come on. have you been to disney? >> i have been to universal in california and florida >> i think it's very exciting. >> if they ever do it, you get to crack the champagne bottle or cut the ribbon >> i love that theme park. i've been to all the theme parks. >> is there an airport near this land that you've bought that you're trying to sell to disney or comcast >> i can put up an airport it's not just going to be private jets for ceos and hedge fund managers.

i'm serious, there are -- comcast is expanding its theme parks, recognizing that there's lots of customers. disney, on the other hand -- >> it's a good margin business >> it's a great margin business. >> like the old cable business so sad to watch that go away >> they have characters. >> they do how much land do you own in new mexico at this point >> i looked at new mexico, and i just didn't find value i didn't find value in new mexico it's just too hot. >> you were looking near the cool part, like santa fe, taos >> i looked at -- >> albuquerque >> i looked at the blood mountains. i looked north i looked south i went, also, looking where "breaking bad" was filmed, and i found no value there >> i picture you in a trailer cooking up who knows what. >> yes but you still want to sell all that land to comcast or disney or anyone else >> no, i found the parcel. >> you found that parcel >> i googled

there's 300,000 acres for sale, and i would buy it in a second, but it has -- doesn't have enough houses on it for my wife. >> as we track jim's real estate empire >> this is what he spends his time doing let me look on google maps to find a good spot for a theme park in new mexico >> i'm a visionary you think walt -- i mean, i remember a reporter covering some crime in florida, i went -- >> you are a visionary you have a lot of visions. >> walt had so much land there, and i thought he only had like a parking lot. they're not going to end up selling land to comcast. just you wait. nelson gets on the board >> meanwhile, we're holding 3,900 this morning let's get to bob pisani. hey, bob >> yeah, down 200, and the problem is the big industrials here, boeing, caterpillar, 3m weighing on the dow. they were leadership groups early on this year and of course home depot, consumer name weighing on the dow.

the strength of the consumer is a big issue. you heard them talking about the credit cards your risk on sectors are the ones that are weak today so, look at semiconductors look at metals and mining. you want to look -- there's the banks. three days in a row for the banks to the downside now. and defensive stuff here, health care, utilities doing a little bit better so more defensive posture to the day. i think the big decliners here -- and i know david mentioned this -- but the credit cards are important here because it goes to this question of loan loss reserves and what kind of net chargeoffs we're getting discover had 2.37% in their chargeoffs last night. see all the credit cards down. amex is probably 40 points, 45 points on the dow right now. so, you see them all trading to the downside so, the question now is, where are we in the economy and, well, the numbers yesterday, the industrial production numbers that were well below expected, were they outlier events or not? the issue is now, everybody's trying to figure out how much

damage has been done already, not what's going to happen in the future what's l already been done? the bears are out saying your soft landing scenario is a lot less likely now and the bulls now need something they need to see this data improve and see that industrial production retail is going to be outlier events, or they need the fed to get less hawkish, and nobody believes that's going to happen nobody thinks the fed is going to sound less hawkish, so for obvious reasons, lael brainard speaking at 1:15 i can't imagine why she's going to say anything different, but the good news is mercifully, maybe the fed will stop talking. the blackout begins friday night and the next meeting, february 1st for the fed. we'll get a blackout and less fed speak. meantime, we've got about 50 companies reporting for the s&p 500, including procter & gamble, and of course, this is a difficult story here, because when you have sales up 5% because the prices are up 10% and the volume's down 6%, well,

that's just a problem out there, and it creates margin issues what happens when they start pushing back against the 10% prices that are out there? the good question here is, china is a big part here, it's about 15% of their overall revenue, so that may be a very important factor here, and we may see those numbers, those volume numbers improve when china reopens a little bit but procter & gamble is one of the most steady earnings grower, it's an aristocrat dividend, aristocrat for years it routinely trades in the mid-20s on a forward multiple. it's one of the most rock steady stocks out there win of the reasons it's so popular among investors. overall, want to chat about the important thing about haerngz h earnings here. s&p 500 were flat for the year second quarter, your see these numbers here, carl we're basically flat and look at that fourth quarter, up 10.5%. carl, the entire analyst

community is hiding out in the fourth quarter of 2023, believing that somehow we're going to have a miraculous turn around at the end of the year. >> bob, appreciate that. thank you, bob pisani. as we're at 3,900 this morning, time for the bond report as well keep an eye on how treasuries are faring we are getting brainard at 1:15 and then williams later on tonight. after starts a little better than expected and claims down to 190k, we were looking for 214, the en-year back below 3.4 back in a moment [music - cover of blondie's “dreaming”] [music playing] ♪ imagine something of your very own. ♪

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got some weak innocence financials this morning. axp, the worst performing dow stock today as the dow's down another 218. once again, flat for the year. obviously, just a couple weeks al bow023. s&p soel 3900. we're back in a minute

just look around. this digital age we're living in, it's pretty unbelievable. problem is, not everyone's fully living in it. nobody should have to take a class or fill out a medical form on public wifi 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. let's get to jim and "stop trading". >> part of the craft, david, if you listen to the conference call of procter & gamble they said that russia cost them a point.

china cost them two points because of covid you strip that out and you actually have a very good number they got pricing and volumes didn't go down nearly as much. yes, they're not going to sell as much into russia because they're engaged in world war iii in europe. china, you weren't allowed out until about a week ago also, lunar new year, boom if you listen to the call, david, you find out that it's not true about the volumes it's about them pulling back from areas and it's a buy. life is too short. >> life is too short. >> go to the theme park. come with me to new mexico i will outline it. >> your vision, your whole vision think of what we could do here >> like bugsy seigal in vegas. >> do we have a plaque >> man doesn't get enough credit >> redstone godfather. >> we'll see you "mad money,"

6:00 p.m. eastern time. when we come back, shares of discover under pressure along with a bunch of other l lk ter-facing financials we'ltao the ceo in the coming hour. don't go away.

good thursday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan and david faber. markets adding to yesterday's losses, which was the worst day in about a month as we're trying to hold 3900 and the dow trying to hold gains for the year to date >> we're 30 minutes into the trading session so here are three big movers we are watching this thursday morning. procter & gamble, those shares are under pressure after 34ictioned results for the blue chip name. sales volumes down 6%. we've got more on what it says about inflation, the consumer, the broader market coming up later this hour. shares currently down 1%. speaking of inflation, or disinflation, alcoa also in the red after a big drop in quarterly revenue. the metals producer getting squeezed by higher energy and raw materials costs, and falling aluminum prices. those there's are down 3.5%. finally, keep an eye on the

cruise ship operators. norwegian cruise ships is falling after it released a revised earnings forecast for the second half of 2022 and now expecting a net loss for the first quarter of 2023 and other cruise names are falling in sympathy as well david? as usual, a lot of people following the fed very closely of course, as calls that inflation have peaked continue to grow. steve liesman joins us with that story. steve. >> good morning, david in remarks delivered in just the past hour, boston fed president susan collins continued the drum beat of fed officials saying central bank should hike rates above 5% and hold for some time. among 19 members there seems to be very little deviation among their comments collins says she anticipates further hikes but slower, 25 versus 50 basis points she added rates should rise above 5% and hold there for some

time because the fed needs to slow the labor market. this fed hike to 5 and hold mantra, having very little impact on the market with with the gap between where the fed sees rates going at year end and the market sees it, three 25-basis-point hike disagreements. fed funds futures picked up steam yesterday with downbeat economic data suggesting markets bracing for, perhaps, a harder landing for the u.s. economy today's data a bit more mixed jobless claims, 150,000. that's the lowest since september. job market still seems to be strong housing starts a bit above expectations at 1.38 million but the fort straight monthly decline. philly fed at minus 8.9, fifth month below zero slightly less worse than december and not as bad as that very ugly empire state manufacturing we got yesterday

more fed speak on tap today with fed vice chair lail brainard, john williams at 6:30 and tomorrow i'm going to speak with fed governor chris waller, counsel of governor relations. the economy looks to be turning south, inflation is easing is it time for the fed to change its rate outlook carl, i'm watching this ten-year, which is 3.32 now. 3.03, that's where the ten-year was when powell stepped to the podium in jackson hole and shocked everybody and put rates up to 4.22 on the ten-year just 29 basis points of that tightening left from powell's speech in jackson hole. >> 100 basis points off the high that will be great tomorrow. talk to you in a bit. our next guest says the bull market may be back calling for an uppier for the s&p and saying

the global economy will not fall into recession this year ed, great to have you back appreciate the time. >> thank you, carl >> you were pretty early in saying inflation peaked. now you raised the prospect of a new bull market. has the data this week shaken your faith at all in that? >> a little bit. certainly looked more supportive of the recession or hard landing view than my view, which is a soft landing view. we did have retail sales down, but some of that decline, as we know and reported, was as a result of discounting by retailers who got stuck with some inventories we saw that as good news in the ppi. but all in all, i'm still sticking with the idea it's going to be a soft landing not a hard landing >> and it seems like whether it's larry summers or collins at the fed or david solomon, the consensus appears to be warming up to that idea of a soft landing, but does that now mean

we've graduated into a period where bad news really is bad news >> well, i think we saw that yesterday. as you know, this market can change what is important to focus on and right now i still think that we go back to the issue that we had all of last year, which is inflation. inflation, i think, clearly is moderating i thought the ppi numbers were particularly impressive to the downside and then, as you said, the new york data -- as steve said, the new york data came out for the january survey of business as did the philadelphia today, and they both indicate a weak economy, a soft economy. again, not really definitive one way or the other on soft versus hard certainly the inflation number, the price numbers have continued to come down that's a good thing. and i think that's what the bond market's reflecting, that

inflation is coming down. >> that's exactly where i was going with you, ed the bond market. you steep inversion along the yield curve. we were talking about it with steve liesman, the ten-year has fallen so much from that peak we saw in fall, the fact it's moving closer to the august levels we saw before powell spoke at jackson hole. it's this inflation or disinflation story you think being reflected in the bond market you don't think it's recession fears and worries, especially when you see inversions that historically have always signaled a recession. >> i think it's all of the above. you're absolutely right. an inverted yield. curve has pretty good at predicting recessions. i think when you look back at the history of inverted yield curves, what you'll see is they anticipated a financial crisis that if the fed continues to tighten, something will break. wouldn't you know it, something broke in the past that would lead to a credit white credit

crunch and recession i think what is different this time is the credit system is in a lot better shape if that's the case, i think the economy will remain resilient. >> the other piece of the puzzle is fiscal policy in addition to monetary policy. now you have all the talk about a debt ceiling, which i realize that could maybe not manifest until the summer now, given some fancy footwork at the u.s. treasury but is d.c. gridlock still a good thing for the market? >> it depends. clearly gridlock where factions don't get to push through what they want in spending or taxation is a good thing it's good to have checks and balances however, when it comes to the debt, we certainly don't want to get into a situation where we, you know, stiff people on paying interest on our debt i think it's going to be either

a last-minute deal, and if there is no last-minute deal, the stock and bond market will tank for about a week and then there will be a deal they'll force a deal so i think one way or the other this too shall pass. >> ed, finally on the labor market, it was remarkable to see claims today at 190k there's been commentary. just reminding people that it operates with a lag. sometimes with such a lag that you wind up calling things, say, a jobless recovery in the '90s where it did take time but eventually the labor market did break as well. do you think that happens this time in the opposite direction >> well, i think the bottom line of what's going on in the labor market is plainly a shortage for all sorts of reasons related to the pandemic, demographic factors and so on. i think this really suggests to me that wages are going to start rising faster than prices. as price inflation comes down, i think wage inflation comes down, but not as rapidly

i think that's one of the reasons i'm expecting a soft landing. i think real wages will increase again, here we're talking about possible hard landing based on yesterday's numbers but today's numbers on the labor force certainly suggest the jobs are there. >> we'll see a lot of contradictory cross-currents, at least for the moment, ed appreciate it, as always good to see you. ed yardeni. here's our road map for the rest of the hour we have more on the market action with ubs's art cashin. the latest from washington with the debt ceiling deadline looms. secretary janet yellen pens a new letter to congress this morning. discover financial shares slumping after results last night. we'll break down the numbers, take a look at net charge-offs and what it means more the health of the consumer with thr o ene meaceicewh wco bk. et e a million different ways i should be trading. look! what's up my trade dogs?

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sending a letter to congressional leadership on the debt ceiling this morning. >> that letter says the nation has begun using extraordinary measures in order to keep paying its bills as of today. in the letter she says that the time frame for how long those measures could last is uncertain. she says, quote, that the period of time that the extraordinary measures may last is subject to considerable uncertainty, including the challenges of forecasting the payments and receipts of the u.s. government

months into the future she respectfully urges congress to act promptly to protect the full faith and credit of the united states. house republicans have said they will not agree to any increase in the debt limit without significant spending cuts. in fact, they're discussing a bill that would let treasury prioritize certain payments if the debt ceiling is not raised that's an extremely controversial maneuver i'm told this proposal was part of the agreement that conservatives struck with house speaker kevin mccarthy and the house intends to vote on this in the first quarter, even though it will never pass the senate where democrats are in control at davos jamie dimon said congress needs to stop pointing fingers. >> we should never question the creditworthiness of the united states government. that's sacrosanct. i don't care who blames who, even questioning is the wrong thing to do. that is a part of the financial

structure of the world this is not something we should be playing games with at all. >> democratic senator joe manchin told cnbc he has spoken with mccarthy about a bipartisan bill that would create rescue committees that could revamp federal trust funds. another bipartisan bill would give the president the authority to raise the debt ceiling on his own but still allow congress to override him republicans and democrats are on a collision course right now and it's not a good sign that some lawmakers are already looking for an escape hatch. back over to you. >> as it stands right now, as concerning as this is, it is a slow-moving collision course if the treasury can buy time until summer when is the expectation we actually see lawmakers come together and truly start to strike a deal if that is something that does, indeed happen is it going to happen now, in the spring, coming into the summer >> yeah, i think what we're going to see first is a lot of messaging bills. i would expect the house to have a vote on that prioritization of payments bill i mentioned earlier. you would also expect the house to vote on a bill that would

reduce federal spending, some sort of budget blueprint that would set a path for cutting spending down the road all of those things aren't going to go anywhere so, after you see a lot of things fail, that's when lawmakers then have to sort of pick up the ball and say, okay, where can we go from here? and you're probably not going to see any real compromise or solutions until we get down to that deadline. i think that's why investors are so worried because this is all going to come down to the wire >> thank you discover dipping despite a beat on top and bottom lines seeing a 20% increase in overall loan growth year over year a hike to provisions for credit losses and net chargeoff rates will double this year signaling customers are falling behind in a cnbc exclusive is discover ceo roger hochschild great to have you on the show. we just sort of teed it up, but the fact your earnings did beat, it's really that net chargeoff guidance, that view on debt that

will be owed to the company and not collected that's putting the stock under pressure today walk me through that doubling and what is assumed in that guidance >> so, first i'd say 2022 was a great year second most profitable year. so, i think our strong q4 is getting a little lost. but, you know, losses have to come up from the levels they were at during the pandemic and immediately afterwards what you're really seeing is normalization for our prime portfolio as well as just some of the more recent vintages starting to hit their peak loss rates. we feel really good about what we're seeing from a credit perspective. i couldn't be more excited about the year ahead >> okay. is the possibility of recession baked into all of that guidance? >> definitely. clearly a lot of uncertainty around what the economy will hold, but so far the prime consumer is doing really well.

we're seeing sales for january so far up 13% year over year and i think what's helping our customer base is the really robust employment market even a lot of people getting laid off are finding jobs relatively quickly i think that's very constructive as i look at our portfolio. >> we did talk about you did mention the fact you saw loan growth how much is that is the impact of inflation how is that inflation affecting how consumers are banking with you and how consumers are using their credit cards >> so, inflation and the rate environment are really helping us in a couple ways. first, our deposit business. we're seeing very strong flows there. and i'd contrast that with the outlows that some of the traditional branch banks are seeing second, we're seeing a lot of demand for our personal loans, debt consolidation and equity loans as consumers react to the

higher rate environment and want to consolidate and pay down debt on the credit card side, really strong usage but disciplined payments payment rates on credit cards still remain about 300 basis points higher than they were prior to the pandemic. >> net interest margin, what you're collecting versus what gets pushed back out to customers this year, is that something that could pressure margins? >> no. we, in fact, expect to see net interest margin modestly higher in 2023, so that combined with the strong loan growth give us a lot of momentum on the revenue side >> you know, you mentioned normalization. you also said you feel really good what you're seeing in terms of your credit portfolio give us a sense, what does the normal world look look is this it can we not see significant increases in provisions for net credit losses? >> no, we expect losses to go up over the course of the year.

depending on the economic environment, hopefully the rate of increase will tail down towards the end of the year and peak early in 2024 again, a lot depends on what we see in the economy >> roger, what are your assumptions on unemployment, do you see us getting up to 5% plus does that have big implications for the credit quality of your clients? >> unemployment traditionally is the largest driver of losses part of it is how persistent it remains. we use a range of scenarios that go from 4.5% all the way up to 6% as we calculate our reserves. certainly we're making adjustments continuously in underwriting we started typing in the back half of last year. we'll continue to adjust again, this is a business we've run through multiple credit cycles so we have an established

playbook we use late cycle or even as you head into a recession. >> finally, just want to ask you about your digital banking and payments business. plans to expand in that segment? how does it speak to the competitive landscape more broadly as we see tech become a bigger and bigger part of the financial picture overall? >> i think discover truly is going to be the diblg tal bank of the future. we have some significant advantages in terms of having our own payment network. so, we're going to be relaunching our cash back debit product this year. a real differentiated product, bui builds on heritage of rewards. i think the transition of discover from being known as a credit card company to a digital bank is well under way and i couldn't be more excited about what lies ahead. >> roger, thanks for joining us today on the heels of discover's

earnings we appreciate it roger hochschild take a look at some underperformers on the nasdaq this morning some high multiple names in there, along with some semis getting hit. qualcomm among them as the dow is off the session lows that started thisorngow17 ay with us0.

opening arguments began yesterday in a shareholder lawsuit against tesla and elon musk this is over that 2008 funding secure tweet, of course, where he told the world he was considering taking tesla private at $420 a share. lawyers for shareholders at the time who are arguing musk should be held liable, saying, quote, his lies caused regular people to lose millions and millions of dollars. essentially arguing this was material information he was sharing. musk's lawyer disputes that claim, arguing the tweet was not fraud. not securities fraud in any way, a split-second decision by musk, telling the court that musk decided in that rushed moment, perfect or not, that disclosure was a better course.

just updating people what he was thinking about, not necessarily that he was going to do it musk himself expected to take the stand tomorrow or perhaps monday when the trial resumes. of course, we anticipated we would have seen him in delaware chancery court in october or so. that didn't happen this does appear very likely to happen he had tried to get the venue moved to austin, texas, arguing a jury would not be impartial but the judge was having none of that. >> tried to get the head of the saudi sovereign wealth fund to testify up successfully. it will be interesting to see how this shakes out. it seems so far it's that pola polarized description of musk as polarizing and -- i don't want to say moves fast and breaks things but moves fast and breaks

things things and being reckless instead of costing investors money. that's like every day talking about elon musk. >> they go together in some way. he moves incredibly fast, accomplishes enormous amounts that don't even seem possible, including what's going on at twitter right now. as he sleeps on the eighth floor of that company's office building and is continuing to remake twitter at the same time he does things that many people say, why did he defeat that? >> we should also note, tesla's stock is up more than 450%, i think almost 480%, splits included and everything, since that tweet so maybe that was a rough couple of weeks and even a rough couple of months but it's been, despite the selloff last year, a good couple of years for tesla stock. >> many shareholders are quite happy that the board did not -- or they were unable to consider really the go private at that level. if you sold at 4 to you would have missed a lot of upside.

>> piper says the price cuts we talked about at tesla earlier in the week might be elpful we think tesla can easily achieve 50% delivery growth in 2023 in the u.s. alone that's been adding to the positive chatter about tesla the last couple of weeks. >> it's been a volatile week for the markets more broadly as investors weigh cooling inflation against a hawkish fed. we'll break it down. where things could go from here with ubs's art cashin. that's coming up next with the s&p at 3900. ♪ ♪ a cyber-attack can grind everything to a halt. cisco security keeps your company moving forward. because if it's connected, it's protected.

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welcome back to "squawk on the street." i'm bertha coombs and here's your cnbc news update at this hour in a surprise move, new zealand's prime minister is stepping down, citing burnout. ardern has become a global icon for many progressives during her five years in progress

her party's ratings have fallen ahead of elections later this year. israel's attorney general has told prime minister benjamin netanyahu that he must fire a key cabinet ally this after the country's supreme court ruled the minister was unfit for office because of a conviction for tax offenses. the move highlights a showdown between the high court and netanyahu's government, which wants to limit the judiciary's power. and liv golf has finally found a broadcaster that will air its tournaments. the cw network will show all 14 liv events in 2023 as part of a multiyear deal with the saudi-backed golf tour the terms of the deal were not disclosed. morgan, over to you. >> the competition, it's heating up in golf right now bertha coombs, thank you markets are seeing another day in the red as investors work through new calls and cautions

that the fed could overtighten the s&p at 3900 and mike santoli joins us to help break things down we can talk hard landing versus soft landing, given the data so far. we could also talk about the fact that we've seen and talked about in the past over years, fomo inthe equity market, but the bond market, that seems to be where that's materializing right now. >> right now there's a massive almost buying panic in the long end of the treasury curve. in part, people are correct in saying the bond market is trying to speak loudly and say the fed ought to, in a sense, declare victory over inflation and back away on the other hand, we're having a suspension of debt issuance by the treasury because of debt ceiling. feels like other dynamics at work there the 60/40 approach is off to a great start because bonds have rallied so much. i do think that that's not necessarily an outright negative for equities when treasuries are

rallying this way. the big issue is all the incoming data, are both compatible with a soft or hard landing. that's the way it's going to be until we get complete weight of the evidence tilting one way or the other. when the s&p is at 4,000, technical resistance and bumping up against the same ceiling, which is the long downtrend line, the burden of proof for the bulls becomes higher we didn't surpass it this time right now i don't see anything that has broken down in terms of this three-month lift we've gotten since october it's defensive sectors leading to the downside in the last couple of days you've seen health care and staples get hit. to me, that's not an outright negative on the economy. it's just kind of the churn and rotation off of 2022 outperformers. >> okay. we're not even -- we're talking about macro data and the headlines there. we're not even really talking about earnings yet i realize earnings season is still ramping up here, but what is that telling us so far when we've been having these

conversations about the possibilities of an earnings recession? >> it is tough to generalize yet but it's been a soft start, i would argue, on balance for earnings the beat rating is not as high as it is in a typical given quarter. it's early and we don't have the meat of the reporting done yet it shows you there is probably still some downside to estimates. the thing i keep coming back to, this is not news to the market entirely it seems as if prices had gotten farther toward where reality is than the consensus estimates did. we had a 27% peak to decline drop in the s&p 500 while earnings were still at record highs. that shows you it wasn't all about getting blindsided by the numbers. >> meantime, sentiment, where are we right now what changed since the beginning of the year? >> we came into the year very defensive, across the board you had light exposures to he can witds. people were pessimistic. i think mild recession is probably the consensus it's brightened a little bit since then

obviously two weeks going straight up in equities is going to do that i still think sentiment is supportive of the markets holding together okay because we're not necessarily kind of getting overexcited. people definitely focus on the frothy stuff, bouncing hard in the first part of the year to me, that's the typical january laggards leading effect and not saying people are back to their old tricks but you don't want to see meme stocks and crypto, the only things working. i think we're sorting that out this week, actually, and having some of that settle back >> been remarkable the last couple of weeks. mike, thanks for more on the markets let's check in with art cashin, ubs director of floor operations who joins us on the cnbc news line art, speaking of january, as mike mentions, youmentioned seasonal weakness in the latter half of january in your note today. you say maybe a retest of 3600 walk us through what you're thinking >> well, we got a couple steps to go first, carl.

i think mike was right in alluding to the, you know, couple of weeks up, but that was new money for the new year and historically as you get into the second half of january, that tends to have been committed already so there's a little bit of a gap i think we're moving into that we got a key test of 3900 today going on as we speak a minor test of 33,000 in the dow. if we pull back through there, very important test of the 3800 level in the s&p, if we get really weak as the month goes on and if you break that, then i think you may go back and test that area around 3600, 3500, as a critical test. and not to get too far ahead, if we develop enough weakness to do that, then we're going to test

the very critical area down around 3200. but that's big steps away and i think we've got to take it one at a time. we'll watch at 3900. i think mike was very apt in pointing out that we have this debt ceiling crisis coming up. that's going to inhibit the issuance of new treasury bonds, which will allow some support. we saw that yesterday. we're seeing a little bit again today. giving us a kind of split opinion here, carl, in that you recall no more than a week or so ago when every yield ticked down, stocks ticked up you didn't see that yesterday. that's a two-part situation. number one, the situation in bonds is changing, as we just discussed. number two, people think that if the economy shrinks more rapidly than we thought, the fed won't

be able to act, that the fed will be behind the curve now in trying to get that soft landing. so this is going to be a very interesting couple of weeks, and the viewers want to stay tuned every minute >> absolutely. no doubt about that. what kind of data does the market want right now? if disinflation has truly become consensus, if we get more soft reads like we got yesterday, does the market punish equities? >> it does i think, you know, we've gone through those cycles of good news is good news and good news is bad news and now we're back to, i think, where bad news is to some degree bad news. and that's why, despite all the things we said about the debt ceiling and default and whatever, and the other thing about debt ceiling and default, before i forget, is the possible involvement of the fed if these guys really go into a big game of chicken, and it

looks like we'll be stuck, then the fed will have to move not on the economy so much but on the debt ceiling the fed doesn't want to get involved in that but that's another thick in the back of traders' minds so, we're at the point now where bad news is bad news in the fact that the fed maybe can't move as fast as it wants, in the direction it would need to so, for now, god knows how long it's going to last, but presently bad news is bad news again so equities will be punished somewhat again. >> art, china reopening, i want to get your thoughts on how that flows into the market conversation, how that flows into the global economic conversation right now, especially since there seems to be a lot of watching and analysis about just how choppy that reopening process could be. >> it can be very, very choppy, morgan

and that's the concern we're going into lunar new year. that's one of the great mass migrations annually on the face of the earth hundreds and hundreds of millions of people traveling back home, here, there, in and out of cities. if covid is going to break out and spread, this could be the three weeks that it could happen that could change the face of almost everything. secondarily, if it all goes well and china does reopen, and i think the central committee felt under great pressure to see that the gdp was shrinking, if that economy dries up, they're going to be politically in trouble so, they've got to get this reopening to work. if it does, guess what, that's going to raise the price of oil and other energy products. guess what that does it's going to bring inflation back in. we have a tight rope to walk here, morgan >> ukraine's the other big question mark for the markets right now, art i wonder if you think we've reached some level of fatigue or

the notion we might be in for a long-term stalemate, does it seem like the market's reacting to putin and nato headlines the way they did, say, in the middle of last year >> i think the market's trying to assess something about that, carl right now the russians still have air superiority and they're pushing on it. in the meantime, they're doing joint task force work with bel belarus. and i think that's -- i don't mean to be a military strategist here, but i think that's a feint. the ukrainians to fear that an attack can come from the north and, therefore, have to send some of their troops up north to protect against it the ukrainians have the advantage on the ground. the russians do not look like they're going to counterattack on the ground. the real problem for the ukrainians is, as you point out, even though it's been good

weather in europe, the europeans seem to be wearing out on their enthusiasm for ukraine that may prompt them all to say to zelenskyy, you got to get to the negotiating table. that's the big thing to be watching here. russian air initiatives should be followed by ukrainian ground initiatives, but the temperature of what's happening in nato around europe will be important to the rest of that invasion >> yeah. and certainly speaks to why we're sending or starting to deploy the raytheon made patriot defense missile systems to the region now as well art, finally, the dollar has come off pretty dramatically, at a seven-year low as fed rate hike expectations do recede. wonder if that creates a tailwind at the time we're talking about an earnings recession. >> i think it is a problem i think we may see a very brief

bounce back in the dollar. nowhere near, you know, the old highs. and i think it will weaken as we get further into the year. i'm mildly bearish on the dollar, but i think in the near term, within the visibility month or so, you may see a little bit of a bounce in the dollar and some of that -- again, oil is denominated in dollars, so you tell me if the price of oil is going to move sharply, then people will need dollars to pay for it, so that will change what the dollar does. it's, once again, a very complicated picture, morgan. >> art, covered a lot of ground on key issues. we'll talk to you in the coming days appreciate it as always. art cashin. >> my pleasure thank you. supply chain pressures continuing to ease, but are the dark clouds on the horizon jane wells is live from the port and she's diving into that story for us hi, jane

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welcome back to "squawk on the street." i'm dominic chu. we are now drifting towards session lows right now with the s&p down almost a percent on the day now. i know we talked about discover financial earlier, but we want to take a look at some of the more bigger names and the action in the financial sector so far, which you can see here, overall, is one of the underperformers. now northern trust is the s&p's biggest loser right now for reporting earnings that came in more than $1 per share below analyst estimates. elsewhere, b of a securities has double downgraded charles schwab, saying the firm's growth would decline as clients adjust to higher interest rates and also watch insurers like

allstate, warning that catastrophe related losses would be higher due to the winter storms we saw in december. insurers have been riding high, taking a bit of a hit now. carl, back over to you at the new york stock exchange. >> thanks so much. coming up on "techcheck" a couple minutes away from netflix tonight, of course, this afternoon we have more on the key metrics you should be watching here in a moment. don't go a wap 3

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this week's ppi report showing that the rise in wholesale prices is finally below the increased cost that consumers are paying and that's putting pressure on companies long-held aggressive pricing power. p & g is one example reporting its biggest drop in sales volume in years after raising prices 10% in the last quarter. stocks taking a hit this morning as a result but off the lows this is chairman and ceo john muller with his take this morning on "squawk box." >> generally what we're seeing from an input cost standpoint is

prices continuing to rise but as you indicated at a lower rate than they were previously. with some turnover in the feed stock areas from a commodity standpoint but that will take a while to flow through our income statement. so these are challenges that we're going to plan on and continue mitigating. >> so with cleaner inventories, better supply chain, obviously producer price is falling. the question is how long can you be raising prices 10% in a given quarter. >> argue blow you're starting to see some pushback. they have raised prices, raised prices, raised prices. now volumes are dropping expectations that that is a situation that could keep going. so there seems to be that pushback and it goes back to what we heard and the discussion we had just yesterday with mike wilson of morgan stanley that you're going to start to have these companies where the top line because of it falling inflation is going to come down. the cost piece of the puzzle is

not and that's going to continue to squeeze margins so potentially that's a situation that could be developing here with procter & gamble and one to watch. >> they do raise the lower end of their organic sales growth guidance this year from 3 to 4% so it's now between 4 and 5%, which is seen as a positive obviously. >> the question is can those price increases withstand what is clearly falling demand. when you're paying -- because i know, when you're paying $55 for a box of diapers, at some point you're going to start to trade down. >> that's a lot of diapers >> not enough. not enough for $55 >> wow >> i'm so glad i'm out of that aren't you >> takes me back, though. >> potty training is coming early. let's give you a look at the biggest laggards on the s&p this morning before we take a quick break. they include as you might expect a number of financial names, including capital one. charles schwab got a dble ou downgrade to an underperform we're back after this.

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well, the ports of new york and new jersey overtaking the west coast when it comes to shipping volumes that said, some cracks in the armor on both coasts are seen as

we head into the new year or deeper into the new year it's already the new year, jane. of course, jane wells joins us from the port of l.a. to tell us more jane. >> reporter: i know, david, we're already halfway through the first month. make this crazy thing stop first we're going back in time this is me out on the water 15 months ago >> it is so busy here at the port of los angeles. today there are 65 ships parked out here it's going to take ten days to get an appointment back then, we followed the journey of a care bear from china to the u.s. and it was a fiasco here on the west coast. so some shipping shifted east. the cnbc survey of logistics managers said 40% rerouted traffic to other ports like new york and new jersey, stealing so cal's crown. over the last few months container traffic on both coasts is down. the major reason, lack of consumer demand and fears of a recession and the west coast contract talks with dock workers still not being resolved, just

makes it another thing to be really hard to be the head of the port of l.a. >> the first quarter is going to be lighter than what we're normally accustomed to row tail inventories are still real high. i'm hearing that factories are going to be closed for longer than normal for lunar new year which starts on sunday instead of a seven to ten-daybreak, we may see as long as three or four weeks. >> reporter: now, he's giving a state of the port speech today even though volume was down in 2022, it was the second best year ever. now, a trend to watch. near shoring to mexico don't need any ships at all for that it's not a big deal yet. it may not be for every industry, but the ceo of a startup called zip fox which puts together companies and factories in mexico said a lot of big firms are starting to experiment with it >> you've got people like walmart even moving some of their uniforms that they were producing in china over to one

of our factories called presslow in mexico. so that was a direct decision to not produce them in china because of the risk, because of the delay, and say let's move them to mexico. >> reporter: the good news for this port, it is still really cheap and really fast, once again, to come in here the ceo of basic funding which sells those care bears said he shifted some traffic to the east coast. he's brought it back to the west coast. that's when he's shipping. right now he's starting to store inventory made in china in china, because it's cheaper there, waiting on the american consumer to come back. guys >> jane wells, thank you great reporting, as always it's just -- it's fascinating. you've also got to think, david, that maybe that business comes off of container ships but if you're seeing something like reshoring take place, that's going to be a positive for, for example, the railroads that are going to be moving more of those goods too in the meantime, in the midst of

financials and the weakness there, allstate, the second property casualty insurer this week to basically come out and preannounce because of that bad winter weather we saw, those storms that represented across so much of the u.s. last month, shares are down almost 6% on that insurance rates have actually continued to move higher as we do stock about sticky inflationary areas. >> s&p is down about 1%. that's it for us on "squawk on the street." yeah, going to "tech check," starts now. good thursday morning, welcome to "tech check." i'm carl quintanilla with deirdre bosa and jon fortt we're going to tell you more top picks for meta why the street is so bullish on mark zuckerberg and company. jim briar will join us from davos.