you -- >> 6%. >> take that back. >> we're eventually going to see -- >> oh no >> i don't want i want to be that don't get me wrong >> we're out of time >> let me ask you this, guys >> you'll come on back, greg, and we'll talk more about it we got to go and send it over to our friends on "squawk on the street." it's been nice to spend time with you, sir. >> do it again >> see you monday. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at the new york stock exchange david faber has the morning off. pretty steady premarket despite that historically bad quarter and guide from intel last night. meantime, the data today, fairly constructive core pce, the fed's preferred measure of inflation, the slowest annual rise in a year and a half vicks is below 19. our road map begins with intel's no good, very bad quarter, pat

gelsinger saying the company has "stumbled. plus, feeling the activist heat, salesforce announcing the appointment of three new independent directors. and then there's chevron sinking ahead of the open. we're going to break down that quarter. start with intel, though, tumbling after that fourth quarter miss and warning of a l loss here's pat gelsinger's assessment of the quarter an last night's call. >> we stumbled we lost share. we lost momentum we think that stabilizes this year, and we're going to be building a road map that allows us to regain leadership for the long term in this critical market >> don't miss an interview with gelsinger later this morning on "tech check" at 11:00 a.m. eastern time everybody's pointing to that gross margin guide >> i reiterate, he's one of the nicest people i know so, some really fabulous stuff here, from people who really aren't that funny.

stacy comes on all the time, very poorly dressed, from bernstein, and he says, "we have written the phrase, worst earnings report in our history of covering this company on more than one occasion over the last couple years but this time, we really mean it." i love that. >> they go to 20 >> yeah. rosenblatt, here's a good one, goes to 17 "no words can portray or explain the historic collapse of intel with management attempting to blame a worst-ever pc inventory digestion dynamic, macro, china, enterprise and over 20% quarter over quarter decline in sales. okay, so, at one point in this country, u.s. steel was the premier steel maker. along came a company that was smarter, better, faster, cleaner. its name was new corp. we don't think of u.s. steel as a major producer of steel. and if i were a crowing person, like -- and lisa su isn't -- i

would say, we're new corp. and they're u.s. steel >> so, intel's irrelevant here >> no. but it is -- there's a moment on the call i want to get -- i think people missed it a very good -- they have a really good cfo. not a nice guy just a good guy. and he's asked about the dividend and he goes, "we are committed to maintaining a competitive dividend all right, their dividend yield is 4.8%, the s&p's yield is 1.9 %. so is he implying what i think, which is, we're committed to cutting the dividend in the conference call, it was kind of unreal, because after that -- the quote that gelsinger gave, he's talking about things that they really can't accomplish, i believe. i don't think they can build what he says they can build. i don't think they can make what he says they can make. he's been the apostle for getting government money, and i don't want to say the call was

embarrassing, because a couple ceos ago, they bought mobilize >> which get some decent commentary this morning, which we'll get to later, but what about the notion that, all right, china reopens, and this is the reset of all resets will you buy that? >> if lisa su or jensen huang from nvidia would say it, i mean, there's some chance. but i don't think anyone thinks, even for the so-called good guys, the guys who are really good, that there's any hope that this -- that the inventory crash will be over by the middle now, there was some great comments from tim archer, lam research ceo, capital equipment maker, where he said, look, the drams could, and he thinks -- he said 2023 is the bottom. i agree with that, not just because china is coming back online, but because there's just so few chips that are being built because there's so little capital equipment being bought that's really the indicator of

whether things will be good. the different animator projections that gelsinger makes are, you just shouldn't have done it. i just think you shouldn't have done it. why put -- set yourself up because i don't think, when we hear from lisa su next week, we're going to get anywhere near the report like that and remember, he's not anywhere, although he would tell you he is, in the real high performance chips. that is now nvidia and amd i don't know he can't go on a call and say, we're getting beat, they're crushing us. he can't do that but don't tell me that you can leapfrog other companies that have really gotten ahead of you. just don't say it. just deliver don't say you will why set yourself up? >> well, it's going to be interesting to see how he frames this later on this morning their gross margin guide, by the way, which sub-40 is not -- no one was looking for that that's ten points below amd's.

>> look, in the old days of andy, it was 62. that's what you got. occasionally, you got 63 that was the holy grail. they knew how to build they built all over the world. i don't question the reliability of the chips, but they're much further behind the road map that amd has set, and they're -- throughout the call, there's a notion of equivalence to amd and that's just not fair anymore. and by the way, at one appointmpoint, they talk about nvidia nvidia is doing things -- the whole a.i. chat is built on nvidia jensen showed it to me when i was out there. i was talking to myself, and myself was a lot smarter than me, and i didn't realize that i was talking to artificial intelligence version of myself i sat in the eighth row of the globe theater and listened to a shakespearean actor, and then i painted a matisse. i mean, intel ain't painting no matisses >> right it sounds like you don't think

the rest of the space deserves to trade lower today >> no. i think that's a mistake i do think, look, there's an inventory correction, which is why amd fell from $170 to $70. pcs have come back there's a discussion about whether pcs are going to go more than down 19 there's people that say it's going to be down 25. that would be really disastrous, but it could be happening. i know there's not as much demand for high-performance computing than there was a lot of that is, you know, how much cloud is amazon web services expanding as much as they were if they were, i'm disappointed enough is enough after azure's decline in rate of growth. then i think even high-performance computing is going to be challenged >> that's interesting. well, we keep talking about seed count at companies and demand among consumers. speaking of which, this preferred measure of inflation from -- of the fed's, pce today, ahead of next week's two-day

policy meeting, did match expectations, up 0.3 from the previous month meantime, consumer spending, down 0.2, income up 0.2. savings rate, jim, actually goes up a little bit, was at 2.9%, now 3.4% >> you have to rely on american express. you can rely on mastercard and visa, but they don't have any risk -- they don't take any risk american express put up numbers that shows that people are traveling like mad, that restaurants are the big winners. travel, still not back to where it was in 2019, but you know, even millennials, they're not spending what i thought they would spend, and yet they're spending -- when they spend, they spend with american express. it's not just they like the points we don't want to be facetious, but american express guided higher the analysts simply didn't believe, and now they have egg, which, by the way, are very expensive, all over their faces. expensive eggs all over their

faces. >> if they can find them >> steve is like, when you talk to steve, who is, by the way, rooting for the eagles this weekend, which i congratulate him, what you realize is that people still are not back. we're still not going long-haul travel millennials are the preferred -- america's best is for lifetime people millennials love -- they love the points >> yeah. >> my wife loves the points. >> we all -- >> i never knew we had points. it was kind of like a lot of bergdorf stuff >> he did say, and i'm quoting here, we're not seeing recessionary signals they do think credit metrics will rise but not pback to pre-covid levels >> you're going to hear a lot of stupid -- i'm sorry, hear some ill-advised analysts who talk about how they've set up for more chargers they have to take later in the year. when you do more growth, you have to model more charges, but the analysts just keep thinking this is mastercard or visa,

which have no risk whatsoever. congratulations, al kelly, moving on. it was a great quarter he finished with over atavist but at visa. people are traveling but there is the actual spend on goods, only up 8%, so maybe that's in keeping with the pce, but you know, america's best is up a lot today because steve squeerry has been underestimated endlessly and it's driving me nuts, he's so good as an operator >> what about the notion that, all right, it was a good quarter but it's a luxury story after lvmh yesterday, second consecutive year of record sales and profit is it a matter of the rich have the money, that's where we are >> no. no it's chevron that works for the rich people. mike wirth just kidding but no, i think it's pretty across the board i do think that millennials like to go out, to have dinner a lot. because the dinner numbers -- i

never thought they could move the needle boy, are they popular. >> and after mastercard's cross-border guidance yesterday, right? >> mastercard's doing so well. he's really good, very real, the ceo of mastercard. and by the way, their cfo is very real. congratulations. she's got a board seat at salesforce lot of activity in the credit card area. i really like the kind of things where if you look at the actual american express number, you have to add back some money that they spent on some venture capital products that have -- 23 cents, add that back, because that's how much they put into some of these venture capital fintechs that are not doing as well as we thought by the way, i left out the word arrogant fintech i have to apologize. arrogant fintechs. i'm looking at my executive producer nothing that i have said does he think even remotely funny, so he must be worried about the niners

i don't know what's -- i'm giving him some real zingers, and he doesn't care. >> the last thing i'll put on axp was the tax rate, 16%. there's some out there saying low-quality beat no >> low-quality beat? they wish they could beat. i wish i could beat with that low quality. this was just inexplicable they don't have anywhere near what was going on in 2019 in this country, and they are making this much money look, it is the card -- no, look, this is all go back to the idea that american express is something that was of the old days and it turns out that's old people trying to figure out what their kids are doing, but they -- obviously, the kids don't pay their bills. the kids don't give them to the parents. they're paying the bills themselves i'm blown away by how much people want to go out to dinner. i got to get back in the restaurant business. it's killer. holy cow >> you really should get back in >> no cash remember they don't use cash anymore.

>> did you happen to look at the "new york times" crossword puzzle this morning? >> "squawk on the street." >> "squawk on the street" error is the clue, and a four-letter answer is? cnbc >> it's about time we've been on for, what? >> that is good. that's when you know you're in the zeitgeist, don't you think >> the business section. i always felt it used to be much more nitty-gritty. it's gotten more zeitgeist i prefer nitty-gritty, because you can make more money with nitty-gritty than szeitgeist. mike wirth is not a silver spoon guy, and the people who own the shares are not rich people and i really -- i personally resent it. >> it's a big story yesterday and another today with their print. we'll get a closer look at chevron. record annual profit a day after

announcing that $75 million share buyback. we'll talk about that and some of their guidance on production for the coming year. take a look at the premarket not moving a whole lot on the dow in the wake of some of these earnings and the data. we got more coming, though, tetowi pending homes don't go away. o in 2023. but you're ready. because you've got the next generation in global secure networking from comcast business, with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want... your team, ours or a mix of both... with the nation's largest ip converged network, from the most innovative company. bring on today with comcast business. powering possibilities™. conventional thinking delivers conventional results. at allspring, we break away with purpose. harnessing data-driven insights and boundless curiosity. we dissect the market from every angle. helping to build portfolios that redefine what's possible.

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chevron's moving lower in the premarket. company misses on the bottom line but does post a revenue beat in the fourth quarter annual profit more than doubling to a record $36.5 billion on an

adjusted basis, thanks to high oil prices of course, that comes a day after they announce that $75 billion repurchase program, jim, and you did talk to mike wirth. >> i just talk to mike all the time, and i do think that what you have to recognize, the cash return to shareholder stock price and dividend reinvestment, this is a period of a longer period when you look at ten-year chevron is $81 exxon, $57 shell, $7, so you have to look a little longer term there were some issues involving -- some accrual, some expense involving stock that aren't that important. in 2011, when oil was $10 higher, the company was making a ton of money, but nowhere near what they're making now, so let's just focus on the fact that it's extraordinary how much money they're making now versus what they were making with oil dramatically higher. and i think that's important too. you know, look, i think the

analysts were reacting to a modest beat of the last few quarters, so i don't want anyone to think that this is the time to sell. i know that it was up huge yesterday, but this company is doing so well, i mean, it really is it's, by far, doing better than all. they're spending money on decarbonizing. when i said the president was being unfair, i think that mike would be willing to sit down with anybody, if we were allowed to have more pipelines, if we were a little more, let's say, give to get, then they would produce even more, but they're going to produce a million barrels from the permian soon, and just ten years ago, we were producing five million in the whole country. and this one company's producing a million. i mean, they're a very, very impressive company, so let's not hit them for the quarter the quarter's unimportant. >> they did say they see production flat this year at $80

present, and they did reiterate they intend to be a steady buyer of their shares across cycles. do you think it's -- do you think the buyback means -- takes anything out of the production >> no. i think that they are spending a huge amount of money, more than anyone else, to produce. and by the way, they bought noble not that long ago, and they are really spending a lot of money overseas. they have a big natural gas field off of israel, the largest in the world, and they're spending a lot of money for that that was a noble product you know, i think that the analysts had a hard time modeling this quarter. they also, remember, they did surpass the all-time high earnings and free cash flow by a mile, even though oil was $10 lower, and look, they're making $35.5 million. now, let's, just for a second, talk about what the president was saying the shares are largely -- warren buffett owns a lot, berkshire hathaway, but you can own

berkshire hathaway they're owned by all the typical index funds, and there really is nothing to the idea that it's a wealthy person's company or that the ceo and his management team is making a lot more i thought that was a cheap shot. it's a cheap shot. >> this is what cecilia roush said about all this on closing bell yesterday >> the issue with shefrp's buyback is they made record profits, they could choose to invest that. we know we have big challenges in energy going forward. they could choose to invest that instead, they chose to do stock buybacks >> well, that's, like, you know, theirs is growing, compound annual growth rate of about 6%, which is amazing they're spending more and more they had a little bit less last year, but there was -- there were reasons having to do with some contracts and countries, indonesia, they had a problem. but everyone produced like chevron versus, say, the permian

companies, where they're not bothering to grow. my travel trust owns devin and pioneer. if you pllook at what they're spending versus what -- and i like their dividend -- it's just nowhere near, but chevron doesn't have that policy chevron is a giant spender on growth it just seems that the -- that it's more nuanced than the white house thinks, is what i'm saying i'm not saying the white house doesn't know what it's doing they've got a lot of good people i'm saying they're picking on the wrong one. they just are. chevron is spending a fortune looking at a time when it costs so much -- the service companies charge so much >> right >> so, chevron's a bad example and they want to buy back stock, but they would -- they're putting a gigantic amount to work really gigantic. >> interesting and while i'm glad we had -- we touched on nat gas, now 73% off the august high. >> right, and there they are producing -- digging crazily to produce natural gas in the

mediterranean that is for europe, and you could argue they shouldn't be doing any of it with this price. but no, they're full bore off of israel >> yeah. >> that's nat gas for europe so, i just think that they -- you can argue, well, why don't they stop that why are they doing that? why don't they bump their decarbon from 7 to 10 billion? why are they the second largest producer of recycled oil this was the wrong one there are companies that are not producing as much as they should yes, buybacks, you don't like a buyback, well, i don't know, every money manager in the world likes -- what's he supposed to do >> right >> is it a charity is chevron a charity >> i think there's some element that they have a responsibility -- >> it's a publicly traded company. >> yes >> we could take over all the companies. >> nationalize >> we could go with a leninist policy of shooting all the ceos. that did not work. i just want to say for the record, didn't work. >> cramer's "mad dash" and the

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take a look at some s&p laggards premarket we talked about intel at the top of the show. it's followed by hasbro, which is cutting 15% of its workforce, pretty dismal guide on a day where the layoff picture is beginning to broaden, not just hasbro but meredith and goodyear cutting 5% as well we'll talk aut tbohat in a bit opening bell coming up in four minutes.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. it's time for cramer's "mad dash" as we count down to the opening bell >> really want to highlight a piece by bernstein they upgrade mccormick, the spice company, and i had them on

last night, and everything that could go wrong went wrong last year they had supply chain problems, input cost pressures they also had some very tough compares and problems with china, opening new plants, andand i'm telling you, this stock is at a level that reflects nothing that's good in a very good company, whether it be frank's hot sauce, whether it's cholula, the mexican hot sauce, or french's mustard, which, if you go to the supermarket, is just aisle -- they've done so much. and i just really like this stock, especially if you think there's going to be any slowdown in the economy this is the one to buy of the food stocks, because it's down so low, not colgate, which is a consumer product company that just did an okay job mccormick is really -- it's set up it's so hated that i think you got to take a shot at it >> that's interesting. colgate, pricing up 12 in the quarter, and volumes fell a couple of points there's some pushback, but 12

points a price >> yeah. i just -- colgate mystifies me i knew -- i should have realized my ollie's discount that they had a lot of colgate stuff for sale i want to point out, i might want to be wary of decker, because bed bath & beyond has a lot of uggs, and they make uggs everything you're probably going to end up seeing those at ollie's or tjx which my travel trust owns and i really like here the meme people continue to think that bed bath is a stock >> yep there's the opening bell, by the way. the cnbc realtime exchange, and the big board is txo energy partners, formerly known as morning star partners, celebrating their listing at the nasdaq, a chinese online learning service provider, recently went public on the exchange you mentioned bed bath and the default notice silvergate today suspending a

series of preferred dividend the buzzfeed, mini-meme action on their opening news. >> and the anniversary of the craziness a couple years ago silver gate's got a loan from federal agency i don't know how much trouble silvergate's really in, but i don't want to be in it, obviously. the crypto world, i think crypto's being manipulated higher i've been saying that. i have no problem saying it. >> four weeks of gains for bitcoin. best month in a year and a half. >> we know that sam bankman-fried was able to manipulate he just moved it up, and it's a very small market. and it can be -- there's a -- john stark, who used to be at the s.e.c., 18 years in enforcement, great follow on twitter, would tell you over and over again, it's just being manipulated. and you know, look, it's kind of like a jade gould gilded age market where you go, let's

corner the market, ask president grant to sell gold to eliminate the squeeze. they do whatever they want, and that's what you get. when you defeat gensler, the chairman of the s.e.c., because you constantly say, are you standing in the way of innovation then, you know, look, you're going to be -- you're in a market that is so easily manipulated that you got to at least accept it. i don't even think there's anything wrong with saying, if you're going to have an unregulated market, why can't you manipulate it? there's no s.e.c >> right >> but it's okay i mean, look, you can bet. you can bet, and you can say, you know what? people are saying that elijah mitchell is not going to play for the niners, and so therefore, maybe you should get three, but it's two and a half you can spread whatever you want that's that market you can spread that mccaffrey's not playing and then, you know, take a new line. there's no -- no one's going to say, hey, you can't do that. >> it reminds me of this piece in "the journal" today,

regarding tesla options, which account for 7% of options any given day, often at prices that are almost lotto-like, jim >> maybe this is just spare money. you mentioned tesla. i go baack to that conference call the old conference calls just made fun of analysts, and they were historically -- they were just comical it was great the new conference calls are perhaps the most thought-out of almost any conference call, maybe fabrizio from estee lauder he just ticks down, raw costs, competitive costs, battery power, i mean, it's -- the thorough nature and the seriousness with which he takes the process now is amazing >> you mean musk >> musk is very -- he's a rigorous thinker we always knew he was, but he had such contempt for others now he's either got the contempt in check, or he realizes, you

know what? i have to play the game. he's remarkable. >> well, maybe that option game is -- illustrates why, for example, adam jonas at morgan stanley yesterday updates his bear case of $70 and his bull case of $390 >> well, jonas is, as we said at law school, i've never seen anyone like jonas, because he's got a flare. it's, look at me a look at me, i'm an analyst, i'm over here. no one really does that. how's he doing with livenation and ticketmaster he should testify. he should say, listen, i'm not -- my tickets aren't selling. you know, you got to be -- he is funny. he has a buy on quantum scape. that's david's favorite. but i think that there is a notion of lotto to a lot of the -- what tesla's doing, and

yet at the same time, if you listen to what musk is saying, you should just own the common stock. own the common stock he is making it -- that whole call was about ford, gm, you want to come in? let me tell you what this world is like. and not only that, jim farley, with your mach-e, you better cut prices it was so interesting because it was so henry ford-like without the -- >> yeah, don't >> i'm not going there it is so henry ford, and now the question is, is he going to commoditize his car so it's not that special i want to know what -- i think we really have to focus on this, the truck, to see what it does to the f-150 the f-150 is kind of obviated the need for generac, because you can just plug in your whole house. the one that i thought was most harsh and wrong, we got a downgrade of ralph lauren today. they are doing the best of anyone in apparel. what is that all about we have some people who just -- geez, i wish they'd do more

homework >> they're down 4%, and a pretty good tape for consumer names, especially travel names today, jim. visa we've already mentioned. but even caesar's, carnival. >> people are traveling. we know that from visa visa's call, al kelly, great job. but again, you can go -- i refer everyone to american express to understand the big change in not buying hard goods. by the way, if you want to link that to the problems with intel, they're not buying anything that's electronic, and some of that does indeed involve intel when you go over intel, i would have liked it if i were pat, i would have preferred to say, look, it is true that others have gotten ahead of us. we're going to have to spend a huge amount of money, perhaps we may not be able to maintain the dividend we have $28 billion in cash, so it's not a problem but the problem is getting the machines can we get in line for a lam

machine, for kla the problem is, it's just not that easy to go back to the way we were with foundries, and that would have been more responsible. that would have been a more responsible call, to explain the gating factor about why you can't do two nanometer -- he used to talk about leapfrogging amd, and it's like, why? what you want to do if you're pat is you want to be more like frank wright, the new coach at the panthers, who says, we don't have the horses yet. we're not going to be able to do it overnight david tepper was my boss at one point at goldman, but i'm saying, they do it in the nfl much better. you don't go out on a conference call and say, look, i know that we're in last place, but look out. next year, we're in the super bowl you just don't do it and it hurts his credibility it hurts his credibility >> we'll see if he frames it any differently this morning >> i think he's going to disagree with my dividend analysis, but i really want him to look at what his cfo said when he said, we will offer competitive dividend

i thought that was code for, we don't do 4.8 % if we can get it down to 1.9% he will disagree with that, but i have to take the word of the rigorous cfo >> best down name is visa. >> i think the problem with crm is i don't believe, i actually know, that they didn't consult with elliott >> on these new directors? >> i think that elliott can't be all that happy i know that elliott is very tech-centric i think they were hoping that they would get some tech people on i love arnold donnelley from the cruise business. they got, a obviously, mehra is from the credit card business. mastercard is very technologically oriented but i don't think that's necessarily what they want and a value add guy is a financial guy. where are the tech people?

and i think elliott wants tech people i know they do what will happen is there will be a clash will it be a titanic clash i don't know what people don't realize is that marc benioff, besides having a great product, is not a fighter. he's a person of great reason. so, if you appeal to reason, i think you're going to find that marc's going to go with it people think that somebody's going to duke it out he actually -- i mean, jeff smith, for instance, at starboard, he thinks jeff's view is terrific. he welcomes input, and it's not for show he doesn't say, i welcome input and then text me, i hate these guys, theit's not like that >> you think any activist interaction at salesforce will be less combative than disney. >> yes, i do that's a great example where i think there's no meeting of the minds whatsoever between nelson peltz and bob iger i think that marc will listen

very closely to what elliott has to say and say, listen, if you've got good people with technology, i am happy to augment my board look, he got rid of allen hasan feld, checwho had been there sandy, a titan, had been there very long. they don't understand marc at all. marc wants to make a lot of money for people, and he wants to do it right, and if you present someone who's terrific or even several who are terrific, marc is going to take it now, laura albert was appointed, and i think she's amazing. she was williams sonoma, but once again, you could say, williams sonoma, i mean, do we need a real good furniture person what they don't realize is laura albert is a very keen mind but i think they were looking for someone with more technology they don't realize that laura albert has put some incredible technology to work in the furniture business i think they want a tech person. >> that's good analysis. jim, i want to get you on the

labor market, because next week is going to be very busy employment cost index, adp, jolts, jobs friday, we're looking for 175. i don't know if you saw robert half last night, big temp company, contracts down in december "the journal" with a piece on the workweek shortening. >> i come back and say, cvs and walmart are going to cut pharmacy hours as staffing squeeze continues. >> i saw that too. >> let's not forget about the burrito season >> at chipotle you're fascinated by chipotle's $15,000. >> when you're laid off, let's say you're laid off from alphabet, i don't think you're really immediately going to go into the burrito business. because you were making $500,000, and look, there's no place more competitive in terms of pay than chipotle, but it's just not -- the people -- and chipotle, by the way, has made many people millionaires who have worked at chipotle. but it's just -- the skill set, you know, if you went to

stanford for comp sci, you know, you want to get the job at raytheon >> understood. but i did tweet out a table this morning looking at the number of mentions of labor shortages and job cuts on earnings calls, and they're flipping they're flipping >> they are. they are and a lot of the -- look, you mentioned goodyear tire. >> hasbro. >> i mean, hasbro, jeez, hasbro's been doing so badly for so long. and these places are so overstaffed. but it is the valley it's silicon valley. like i said the other day, the first cut's not the deepest. how can alphabet fire the exact number of people that it hired last year and not more >> in one quarter alone. >> when is jassy going to wake up to the fact that people are not buying like they did, and he staffed for the pandemic, for heaven's sake. i mean, marc laid off a lot of people at salesforce, but i could argue they bought tableau, they paid a lot of money for

slack, and i think that elliott might say, you know what do we really need these? now, slack is difficult to deintegrate because -- and also it's against microsoft teams, but i think that there's going to be a bit of a tussle. i think marc's going to listen i think you could argue very strongly that slack's necessary. but don't bet on the idea that elliott's going to come in there and say, you know what we're thrilled but don't bet on the idea that marc's scorched earth >> we have had folks on our air argue that alphabet gives tim cook license to announce some cutbacks of his own and we'll be hearing from them soon >> i think that's true you know, that's the one company whose stock hasn't plummeted it's the one company that's very consumer focused, not enterprise focused. and it's not being charged by the government to do anything with that government case. it's so ernicious, because it really questions the core business of what google does, which is help small business get

customers, and that's what they do anyone who's used them as a small business knows they're really good, and google is an enemy of the people, not unlike mike wirth from chevron being really just for the wealthy. these are the kinds of things we really would not expect, even from an old-time democrat. >> i think the president's been playing from the beginning that he was going to -- he was going to push the pendulum from capital back to labor even more. >> well, i know that if there was a picture of mike wirth and the president together, it would compromise his don quixote position on windmills. by the way, new core is making w windmill steel and gm. sometimes it's not windy >> that's the problem. >> just call on me in class. what's the issue with solar? 28% of the time in germany, it's sunny. how about the rest >> i'm sure you saw the gas storage figures in germany they're 85% full in the middle of winter. >> nat gas is back and bigger

than ever. now, i mean, there is a war. they were totally dependent on russia they had a chancellor who has not been heard from one bit who's from east germany, and i'm just saying that they had a different view of the russian government if mike wirth were over there -- they need a mike wirth they need a spokesperson like mike who was really working so hard to decarbonize. now, i think that people say, come on, what is he doing? how about $10 billion. >> he's been on this very desk talking about that move, that initiative >> i remember when his stock was downgraded because he's suddenly spending too much money decarbonizing. what is he supposed to do? marc benioff does 1% of the profits to charity mike, maybe you could do that. if companies did that, the world would be a better place. >> we're in the middle of a huge, massive decades-long transition it's going to be choppy. >> it is there's two grids.

there's two systems that we're developing in this country there's one that is old, and it involves, you know -- at least coal is no longer the biggest, but it's nuclear and nat gas and then there's the second, which is all renewable and the renewable costs a fortune and is kcumbersome, and you need a base load you can't just have it and expect that the lights will go on >> exactly some minimal chop here to hope we're holding 4,060 or so on the s&p. vicks, 18.5. let's get to bob pisani. >> you know, it's quite remarkable that we're breaking that down trend line that we have been talking about for a couple weeks now at 4,060 and we're about to go positive on the s&p. we started, the low print was just right after the open. look at the sectors. i mean, yeah, semis are weak what do you want in intel's down 10%. kla is down 6% metals are a little bit weak, but they have had a huge rally on the china reopening the highest levels for the metal stocks since june or so

yesterday. communication services, up alphabet, meta is up discretionary is up. tesla is up. amazon is up target, ford are up. now, there are some losers, and we've been talking about some of the problems with the consumer names, so, yeah, colgate's down about 4% at the open it's got the same problem we talked about with kimberly clark, with procter & gamble, and it's pretty simple the prices are up. they're able to raise prices, but the volumes are down so, this points to problems if the consumer starts pushing back against the prices we'll see what clorox says next week they're going to report next thursday, but i can't imagine this is going to be that much different. so, there's a lot of pressures her here, potentially, on margin the other is am ex i want to point out a couple things here. highest ever quarterly card member spending. that doesn't look like a dramatic slowdown in consumer spending credit metrics remain strong, below pre-pandemic levels, so everybody says, oh, they got a

billion dollars in provisions. you don't look at 2022 or 2021 you look at what was going on pre-pandemic, they're telling you that these levels for metrics are not that startling so, i see here, look, amex up, mastercard came out and made some positive comments as well i see visa up here i see new card issuance at amex look pretty good customers seem like they're still spending, and the credit provisions are up, but not compared to pre-pandemic so, this does not -- and the guidance was good for amex that's why it's trading up we're trading on the second half of the year, and the metrics here, the guidance seems to be pretty good from amex. mastercard also said consumer spending has remained resilient here so, what we're seeing here, overall, is really strong technicals i talked about the trader talk this morning about this when the fundamentals are confusing, active traders turn to technicals we're breaking a long-term down

trend. stocks are above their 200-day moving average, a number of over 200-day are expanding. it's equal, value and growth stocks are all up in 2023. this is a fairly strong technical rally. yes, the earnings situation is kind of crummy, and we've been talking about it for two weeks now. the numbers are flat to down for the first half of the year they flattened all the numbers out, and it's all back-ended in the third and fourth quarter it's probably looking at 3 or 4% earnings growth on the year, but carl, the bottom line right now is the market is playing with a, at best, very shallow recession and anticipating an upturn in the second half of the year. back to you. >> so well said, bob thank you, bob pisani. speaking of which, take a look at the bond report today, see how retreasuries are faring. core pce, year on year, 4.4% that's the smallest rise since october of 2021.

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s&p still looking at a gain for the week as well as the nasdaq 100 take a look at the leaders over the past few days. a lot of evs at the top. tesla, 23% gain for the week al alone, followed by lucid and rivian warner bros. discovery in the middle there we'll take a short break and move the energy that our world needs. ♪♪ welcome to a new era of energy.

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jim, what's on "mad" tonight? >> acouple of my favorites, w weyerhaeuser and rockwell. >> are you excited for the games? both, i guess? >> yeah, it's a really big deal. i'm not going to say it's not. it's just a very big deal. and i love the eagles so much. i love howie roseman just a lot of really great people hurts is terrific. i totally respect the fact deniers -- >> it's going to be great to watch with some of the ratings

coming in the last couple of weeks. >> yeah. this is just going to be a great -- a battle. two battles. congratulations, by the way, to frank reich, for david tepper, because he's also a fabulous -- i know this is -- there's some controversy, but it's great he landed somewhere because he's so good. >> we'll be thinking of you sunday >> thank you >> we'll see you tonight "mad money," 6:00 p.m. eastern. when we come back, a lot more on intel, reaction to the company's miss and guidance. don't go away.

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good friday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla, morgan brennan and mike santoli david faber has the day off. a lot to balance today between the ecodata, american express, intel. we have more data crossing the tape let's get to rick santelli >> yes, some very interesting data as well, carl pending home sales for the month of december, remember, these are pending contracts for things like single family, condos, co co-ops, contracts written but

not yet closed they were up 2.5% on a month over month, up 2.5%. doesn't sound like a lot but it's the best since october of '21. in between then and now, we had months down close to 9%. if we look at the year-over-year numbers, minus 25%, last month's was the worst on record keeping, and before it was revised, even a larger negative. minus 34.3, as ugly as that is, is actually the best number going back to soept when it was only minus 29% and change. so, we'll take any improvement we get we can see higher interest rates have not been kind to the housing market university of michigan sentiment, january final, we are replace the mid-month read with a better read, 64.9. that's the headline. current conditions, they didn't improve. they went from a 68.6 mid-month

to 68.4. expectations, what lies ahead, move from 62 to 62.7 it did improve now, to the money numbers, one-year university of michigan inflation, 3.9%. last month was a bit higher. last month was 4%. the high water mark was in march of '22, 5.4% that was a four-decade high. this number at 3.9% is the best number going back to, let's cipher it, to april of '21 finally, five to ten-year inflation, 2.9%. that's the best read while going back to september when it was 2.7% still high, but making progress. interest rates, well, they're pretty much up across the curve but they're not up very much morgan, back to you. >>. >> thank you. we're 30 minutes into the trading session. here are three other big movers we're watching starting with another

semiconductor stock, kla core under pressure despite beating on earnings. kla sells to companies like intel. their customers work through chip inventory amid slowing demand shares down 6% hasbro sliding after warning of weak quarterly results. they are the latest company to announce layoffs as well down about 4% right now. it's also been sending shares of rival mattel lower in sympathy. finally, a name that is bucking that downtrend l3harris, edging higher in early trading after the defense contractor posted better than expected q4 results. forecasts sales growth this year says supply chain strains are easing l3harris benefiting as we've seen a surge in defense spending those shares are up 7.5%. got key data this morning showing inflation did ease for

the month of december. while consumer spending also declined our steve liesman joins us with what he thinks is interesting in the data of course, there's a lot more coming next week, steve. >> yeah, the trouble with me, carl, i think it's all interesting. maybe the most important thing is worries about the consumer and the economic outlook rising with data showing spending decline for two straight months after that really strong and anonymous october, income up 0. % versus 0.3 income isn't the problem, it's spending 0.2% in december versus 0.1 in november you can see inflation is still there but not much higher than it was a little on the core but flat, up 0.1% on the fed's preferred inflation indicator there. incomes were up 0.2% on a real basis but consumer outlays, they couldn't keep peace with inflation declining when you take out inflation or inflation

adjusted year over year, inflation's down from its peak of 7% for a headline in july to 5% now you can see that driven lower by fallen energy prices. core at 5.2% and coming down more slowly on the core. now down in the 4% range inflation indication preferred by fed chair powell takes out energy, food and household services, running 3% on a three-month annualized basis not much change from all of this in the outlook for the fed with the market still expecting 25 bips next week and a peak rate of 4.91 by june the pricing by year end, touched higher to the fed's 5.13% at 4.47%. that closes the gap between the fed and the market, too, about 66 basis points. it had been as high as 79 earlier this month the key question now is whether the consumer has taken just a pause in the last two months or

is this the beginning of a real downshift that threatens growth? there are expectations coming down for first quarter growth already. social security, cost of living increases coming out soon. that will help if unemployment increases and consumers become worried about the outlook, temporary payments from the government ain't going to cut it, carl. >> so, just to dig into that a little more and the fact there are these key questions about the consumers and we are getting mixed messages certainly, the credit card names, for example, aretrading higher because they're continuing to see a resilient consumer that's going out and spending the airlines, for the most part, have said that people are going out and buying tickets and traveling to places. but then you've got the hasbros and the consumer staple companies of the world basically seeing that weakening consumer, at least where theed goods part of purchasing is concerned so, when does this become -- when does this become a trend rather than what could potentially be a blip, at least from an economic's forecasting

standpoint >> well, you know, i would say it's a trend already, but we had that really weird october where -- which was the really strong month of the holiday season, morgan i would say it's a trend already. consumer spending is going to come down and stay down. first thing you want to see -- well, you don't want to see it if you want to say there's a real trend here, you want to see wage numbers come down if unemployment rises then you know consumers lack the income with which to keep spending it's not just a bounce back or bounce down from the strong october. that would be th focused on the thing, which is we had these tech layoffs we knew they were kind of overemployed, overstaffed. you heard the -- one of the companies letting go of its masseuses. i thought that was a good sign of the fact they had, perhaps, overstaffed themselves on the other hand, it seems to be spreading that's the key thing to watch. is it just a couple industries that have overstaffed during the

pandemic or does it spread a little wider that's what we have to watch the other side of that, and when that employment report comes up, i'll be watching the duration, morgan, of unemployment, which is are people losing their jobs because of the tight job market getting picked up real quickly or starting to spend more time unemployed is that will give us a clue as to where things are headed, morgan. >> that claims data all the more important as well. steve liesman, thank you >> right, right. intel shares are sliding after missing expectations for the fourth quarter and forecasting another weak quarter ahead. our next guest says that even the company's dividend is at risk here. here to discuss success quu hannah analyst christopher rolland who has a $23 price target on intel. chris, good to have you back on the show the weakness seems to be very widespread where intel is concerned. is this an intel-specific story? is there read-through to other

semiconductor stocks when we get those in the coming days >> the title of our note was head-on collision from pc, rear-end collision from serber this is very much around those two end markets. not necessarily for all of semis, but this was a very disappointing report from intel. >> certainly saying they need to work through their inventories, the fact the dividend -- you think the dividend is at risk, i guess, how meaningful is that for intel to even consider cutting a dividend, what could that do to change the financial picture for a company that's already been in the midst of this multi-year turn around? >> intel has a significant cash flow problem they are building factory after factory while at the same time they're seeing their top line just erode so, they are eventually going to

end up in some sort of a cash crunch here. we think the most kind of quickest way in order to generate some cash and to fix that problem, maybe not permanently, but at least in the short term, would be for the board to agree on a dividend cut. how deep that cut is, whether it goes to zero or not, that's unclear. but we think that's one way -- one lever they can pull to get some more cash back on the balance sheet. >> yeah. and obviously with the decline today in the stock, i mean, data dividend of 5.2% is way above even something like an hp, which is 3.5%. clearly the market is, to some degree, bracing for something like that. i guess the question here is, where can we try to sort out what an earnings level is going to look like in other words, what's base level where this thing bottoms out and how are we going to value the stock if we're looking at a couple of years

is there any way to do it based on the trajectory we know right now and some assumptions about market share >> yeah. it's quite difficult right now i think this company was overshipping during the covid and work-from-home period. they, for lack of a better word, stuffed the channel in front of an october price hike last fall. so, now all of these oems are sitting on tons of cpu inventory and don't need any intel purchases for the next few quarters so, they're clearly undershipping right now. the answer is somewhere in between. somewhere inbetween the good times of covid and work from home and the bad times now in which they're undershipping. perhaps something like $1.50 in earnings might be more ream for them >> we talk about the dividend potentially at risk. what about leadership? >> i don't think -- yeah,

this -- pat came into this company. it already had problems. he probably was the best man for the job at the time. but he has his work cut out for him. i wouldn't expect him to have much pressure from the board any time soon given that structural issue they had when he came in perhaps this is something they could revisit next year but i think he's safe for now. >> thanks for joining us. >> thank you >> shares of intel are down about 8% right now a quick programming note tune in at 11:00 a.m. eastern for more on those results with the man himself, intel ceo pat gelsinger. that's coming up on "techcheck" in the next hour. sticking with intel, kayla good morning. >> intel's decision to slash jobs and cut costs after a

full-court press in washington to pass the chips and science act and unlock billions in subsidies for new plants and research administration officials privately acknowledge that to the average taxpayer, the timing of passing landmark legislation and holding flashy ri ribbon-cuttings followed by layoffs is not a good look micron announced they would have layoffs. behind the scenes there's a longer-term view and acknowledgment that the semiconductor industry runs on five to seven-year cycles. by the time the funding reaches these companies, they'll be increasing investment once again, or at least that's the hope so far the application process for the c.h.i.p.s. act funding has not yet gone live so intel and micron have not received this funding just yet. there are no strings attached that would require them to

maintain a certain level of employment the only string is they don't invest long-term in china. >> thank you fascinating story with all kinds of ramifications take a look at the road map, including a closer look at chevron. record profit today after the company's massive share buyback. power in the payments. both american express and visa moving higher after reporting results. and after a rough 2022 campaign, tesla making a big comeback so far this year. it's up more than 30% just since the start of the month we've got more "squawk on the street" after the break. ♪♪ for skin as alive as you are... don't settle for silver. harness the power of 7 moisturizers & 3 vitamins to smooth, heal, and moisturize your dry skin. gold bond. champion your skin.

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so let's go. the digital age is waiting. welcome back despite posting record annual profit, shares of chevron are falling post earnings, down about 3% let's get to pippa stevens with the breakdown for the oil major. >> the weakness comes after chevron missed fourth quarter earnings estimates, with adjusted eps of 4.09 while analysts were looking for $4.38. profit came in at $6.4 billion for the period, down from $11.2 billion during the third quarter, as oil and gas prices fell at the end of last year the miss was also driven by weakness in chevron's downstream division as well as higher corporate costs. chevron also taking a $1.1 billion writedown in its international upstream business. however, fourth quarter revenue did beat expectations. and the eps miss is relative in

the sense that chevron still reported record full-year earnings of $35.5 billion. cash flow also hitting an annual record now, looking forward, the company reiterated its $17 billion capital spending plan for 2023 and said worldwide production will be flat to 3% higher and that $75 billion buyback announced wednesday evening does remain front and center. we'll be listening for more clarity around that, including potential pace of the repurchasing when the call kicks off in about 45 minutes. carl >> pippa, thanks for that talking about chevron. mike, we talked about this yesterday. watch the white house reaction last night you looked at some history >> yeah. look, it is a big buyback relative to chevron's market cap. it's about a quarter of the current market value over time it really is relatively aggressive. the question is, are they really going to be buying in shares on a net basis? and is this an automatic win for

shareholders which i think there's a perception that it's a rigged game as soon as you decide to be aggressive with buybacks, your stock goes up. the etf over five years is more or less performed in line with the s&p 500. by the way, that particular etf is made up of companies that have repurchased and shrunk their share flow by, i think, 5% in the past year alphabet has been doing a big buyback all year didn't save its stock last year. i do think you have to keep it in context when it comes to oil companies, it reinforces the idea they're in a moment where they're tremendously profitable, there is enough to have a big shareholder return of capital plan and also meet their capital spending and r&d commitments or plans. so, i think it all can work together by the way t also works politically. for whatever side you want to be on on this one, white house can get its talking points out there.

c investors can say, they're not going to be investing for the sake of it >> yeah. it's not an either/or scenario - >> in this situation it's not. >> but the fact that they're projecting projection volumes flat to up 3%, just from a political standpoint, that's what they will seize on. yes, they have come down but if you're a lawmaker -- >> we can have a debate about whether chevron's return expectations or requirements are too high the hurdle rate is just too high and they're not willing to expand production because they see the fact that we're still trying to get -- >> that's the other point. would the picture be any different if there weren't such a push to electrify, at least transportation, right? they saw the end of this century-long demand for at least that use of oil. >> i think it would be different

if, in fact, people basically said, okay, we tried and it's not going to -- we're going to decelerate the transition and all that stuff i suppose to the extreme example of this is how the tobacco companies became just buyback machines over years. they raised prices, because they could, and they bought back their stock because they knew the end market was shrinking and they were soft criminalized, in a way, their product oil companies can't set the price of their product, so all they have is the buyback and demand expectations. >> such a key point. after the break, we'll tell you how to play the payment stocks amex and visa are moving higher on earnings. amex is up 10% visa is up 3%. we're back in two with the dow up 0.25% ♪ ♪

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a host of ceos have made consumer warnings this quarter, but not the credit card names. kate rooney joins us on a busy day for those companies. >> the credit card names were pretty upbeat in the face of inflation and recession warnings we've heard lately american express, the latest payments company, as we've seen from strong consumer spending,

especially with its higher income card holders. upbeat revenue guidance and dividend increase helping shares this morning you can see almost up 10 mrs or so full-year revenue topped $50 billion for the first time last year for 2023 amex is expecting to grow revenue by 15% to 17% that was well ahead of wall street's expectations. eps forecast all beat amex will raise its dividend by 15% to 60 cents. for q4 it did miss on top and bottom line. executives said that was due to increased reserves for loan losses those delinquency rates can be seen as a troubling sign for customer base but executives on the call kept saying they are not seeing any signs of weakness they say uptick was more of a reflection in their overall loan balances ceo saying he's not seen any recessionary signals

he says, we can only run the business and forecast the business based on what we're seeing and we're still seeing high consumer growth says amex has a premium customer base, while not immune to an economic downturn, certainly is still spending through recent layoffs we've seen have not yet had an impact on its customer base. visa and mastercard, meanwhile, saw pretty similar spending trends, alsobenefiting from a travel rebound as well it was a beat on the top and bottom line. for visa last night, revenue was up 12% year over year. similar story at mastercard, what she described as remarkably resilient consumer they all noted they are closely watching the labor market. they're just not seeing the slowdown right now in their own results. opposite of what we heard from steve liesman earlier this hour. interesting juxtaposition with the card names. >> it is interesting reminds me of discover that was on our air last week and had seen that stock sell off because of those loan loss reserves that were put to the side and worries

about what that meant about the health of the consumer that company saying, no the company is good but we're seeing return to pre-pandemic spending. it goes back to the debate, whether we're seeing a more meaningful slowdown on the horizon where the consumer is concerned and possible recession or whether we are just seeing a normalization. >> it seems like the latter from what you're hearing from the card companies they said they're all aware of the economic signals this morning on the amex call, it seemed like every analyst was saying, it seems great, but what's the catch here? the executives from amex essentially said, guys, we're just not seeing it in our results yet. our card holders, especially the higher income card holders with amex it's a different customer base really than visa and mastercard they've got high fico scores, high earners, a small subset of the population they said they're not seeing any sort of white collar recession,

as they put it on the call, and some of the layoffs aren't hurting their customer base. amex speaks to that higher end spender. visa and mastercard is global at this point and really runs the gamut, although they said they're seeing spending shift, wholesale stores, discounts. you're starting to see that but not to the point where it's changing any of the card company's revenue forecast meaningfully they said we're ready to adjust if we need to, but at this point it's not necessary. >> thank you. still to come, we'll talk tesla on a tear since the start of the year and up 50% over the last four weeks of trading it's helped the major averages, too. particularly this week to adapt in the changing world, you could hire a professor of theoretical mathematics. we all know this equation, right? he'd crunched numbers day and night. that's it. to maximize profitability. morning. i have quarterly numbers that are beautiful. and forecast revenue from every corner

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welcome back to "squawk on the street." i'm seema mody president biden has announced his new chief of staff as expected, he picked jeff

zients zients is replacing ron klain, a long-time biden adviser. this is the first time major personnel change for the biden administration comedian jay leno has had another accident this time it was a motorcycle crash resulting in a broken collarbone and broken ribs and cracked kneecaps just two months ago he suffered burns in a garage fire he says he's fine after last week's crash and will be working this weekend. a state of emergency has been declared in auckland's new zealand's largest city after massive flooding many roads are covered in feet of water after more than 10 inches of rain fell in less than 11 hours numerous homes and businesses have been flooded. there are reports of washed out bridges and landslides back to you. cooler >> seema, thank you very much. let's keep an eye on shares of tesla as you might know, up over 30% for the year so far as the ev maker did post record profit for the fourth quarter this week joining us today, gary black, tesla investor and future fund

managing partner i imagine you were impressed by the print. i just wonder if you think it's worth the return we've seen. >> it's currently unspectacular. they missed on gross margins, especially if you back out the one-time items president earnings were right in line what was more significant is just the optimism that elon and zach, the cfo, showed on the call they basically said that january's orders were double production and, you know, elon even dropped a hint, they could do as much as 2 million in volume i think that's what got the stock moving the third thing, which i think a lot of people are not paying attention to is the energy business is suddenly on fire they had a new facility come online in the third quarter, gross margins are high you could add 50 cents a share for the new mega product that is out. i think that's getting people excited. and you have an investor day in about six weeks. for all those reasons i think the stock is on fire today and

yesterday. >> we're definitely going to be busy on march 1st. i did see some bears try to slice and dice at least the language in the call for example, you mentioned orders twice the rate of production some point out shanghai is going to be closed for almost a third of the month do you think that's just sour grapes >> i think it's sour grapes. if you go back to the history of price wars, going back to marlboro friday in 1993, when the market leaders starts a price war and their gross margins, this is true of tesla, two to three times what the competitors have, they have so much more ammunition most of those cases, the market leader wins the price war. so, i think what people have to figure out is, how much incremental volume are they going to get as a result of cuts prices by, let's call it 12% i think you're going to end up with at least 35% to 40% volume growth this year and i go back to valuation where else are you going to find a mega cap stock growing units

by 35% to 40% and revenues and earnings and cash flow, and selling for under 40 times earnings i think that's why people -- i'll put the bears in this category why are people getting excited about tesla now, let's call it 160 and not at 105 i think those mreetrics, you ca find those volume stocks >> there have been a lot of talk and a lot of commentary and a lot of concerns raised that elon musk is spending so much time at twitter, at least focused on that, coming off the tesla results, coming off the call, the commentary, the fact there's now this price war afoot, to your point, with tesla, the market leader there and ushering in this new era for ev adoption. can we say those concerns about where he's spending his time can be put to the side or does he really need to get a ceo appointed at twitter and focus more heavily on his other companies like a tesla or like a

spacex >> we believe that's a catalyst. we believe he will choose -- he's promised to do so after that twitter poll he did, last year, earlier this year, to replace himself as ceo i think he's got to find somebody who gets advertisers, understands social media, understands how to monetize, let's call it, 260 million users. also can get along with elon and do well with his, you know, management style and personality. look, there are people out there who would die to work with elon. he's brilliant he's a money maker i think as soon as they appoint a ceo to run twitter, and elon can, let's say, refocus on tesla, which he's obviously very focused on tesla it's the largest part of his wealth i think that's another catalyst for the stock. when i think back and say, okay, the stock's had an amazing run, up 55% in three weeks. can it go higher it's still very cheap. i got the march 1st investor we have cyber trucks, mega packs, which is not on the sell

side radar screen and a new twitter ceo coming in. that's -- for all those reasons, i would still want to be in the stock here >> gary, you mentioned as market leader if you decide to compete on price, have you more ammunition the ammunition is your profit margin, right? when do you get it back? i guess the question is, longer term, what's the return profile here 2024 earnings estimates have gone down below 6 bucks a share. can you argue about whether that makes sense and whether, in fact, that still is going to be supportive of a much higher stock price from here if we're just talking about valuing it on volume times price equals margin >> right i think you have to take the longer term perspective. again, ga back to marlboro friday they cut stock 20% on marlboro, stock went down 26%. go out three years, philip morris was up 100% where i think the s&p was up 50. that's what you see in most

price wars the current year, have you to take your estimates down you're right 2023 estimates are down 16% year to date because of the price cuts this stock is up 30% because investors are saying, look long term i go out to 2030 we have an earnings model, we have them making $30 a share by 2030 they have to build mor factories. even if you put a 30 multiple on the stock, because then it's going maybe 20% a year, that's $900 in about seven years. you discount that back at some 14%, 15% discount rate, you're above $300 that's the way portfolio managers think they don't look at current year earnings, despite everybody saying they're short term. we try to look at net present value and try to figure out, where is the stock going to trade in a couple of years it's a long-term game. it's not this year's earnings.

if you just look atthis year's earnings, you probably wouldn't own the stock. >> speaking of another name you -- that you hold in your fund, salesforce we have these activist investors circling the stock you have the company appointing a new slate of directors in response to that activist criticism. as a shareholder, your thoughts? >> look, it's positive for salesforce we have owned salesforce for a long time. it's another one of those stocks, it's a classic road stock that hasn't done well. the activists are trying to get cost reductions in place it looks bloated compared to everybody else when you look at its margins versus other folks we think the activist is a good thing. we don't buy stock because we think an activist is going to come in, but it's kind of icing on the cake here it's actually helping the stock. we're positive about -- there's like three or four activists now in the stock we think they will get people on the board and that will be a good thing that will be a good thing for

the stock. >> finally, gary, one thing on macro, you know, musk mentioned on the call the fed and what he appeared to believe was an existential threat to equities if they continue to push on rates. do you share that view >> i don't we have our own macro view we're not listening to elon and his views about the economy. i think him saying there could be a deep recession, it gives him a way out if they miss numbers. he's blamed the economy before on the stock he blamed the fourth quarter, we'll say, tesla plummeting on the economy when tesla was down 55%, nasdaq was flat if it was all the economy, nasdaq would have been down 20% to 30% we don't share that vision about a really bad recession when i look at the fed, inflation's coming down. we got another print this morning. if you look at core pc, multiply that times 12, that's about 3%

5% headline inflation, it's 2 we believe the fed will raise rates 25 next week and 25 in march and that will be it because they don't want to have a recession. they really believe they can navigate a soft landing. we don't view there being that much risk of a deep recession, even though elon doesn't share that view. >> that was one of the more colorful parts of the call we don't always get gary, great guidance and insight as always, thanks very much. >> thanks, guys. see you again. let's turn back to the chip stocks the smh starting off the year very strong. intel's drop today bringing down the entire sector. dom chu joins us with more. >> a bit of a changing dynamic, given that move in the semiconductor stocks if you take a look overall at the smh, the etf that tracks all of them, since the lows we've seen earlier on this past fall, that white line is big because it's up now 43% from those recent lows. that beats the 16% gain we've seen off the lows recently for

the s&p 500 and the nasdaq 100 now, intel and amd, they're in this kind of maybe bit of a fight back and forth, this kind of jockeying, if you will, this tug of war between who has the bigger market cap. going back to about february of last year. they've been battling who has the larger market cap. right now advanced micro is roughly $120 billion of market cap and intel is $115 billion. so, that kind of gives you an idea of the back and forth happening right now in market caps advanced micro, a bigger company as it stands as for where analysts see the most upside, check these out, the universe of stocks, 22 in there. marvell technology, 30% upside amd, 18% possibly. synopsys 18% those could be the bigger this year. >> thanks. coming up next hour on "techcheck," don't miss our interview with that man right there, intel's chief pat

gelsinger, so many questions to get to. after the break, a lot more on the markets dow pretty steady, up 22, aiming for its sixth straight day of gains. s&p holding break even for the week would be 3972 we're well above that.

welcome back to "squawk on the street." markets are higher right now albeit modestly. the dow is basically flat. the s&p up slightly as well, 4064 the nasdaq is up 0.4%. we're on pace for weekly gains, on pace for monthly gains. the s&p is on pace for its second best january since the turn of the century. all of this as investors continue to work through fresh signs that the fed's rate hikes are slowing the economy. our next guests see where we are ahead. joining us, citi u.s. equity strategist scott kroner and at post 9, mona

great to have you here mona, would he have had such a strong start to the year some technicals would suggest we go higher from here. your thoughts. >> yeah, you know, look, it's been a great start to the year the technicals have to be respected. what i would say, on the upside, there's been far more surprises than on the downside on the downside, yes, we've got some economic deterioration, pmis pointing to slower growth ahead. on the upside we've seen not only better inflation data, we've certainly seen better resilient labor markets. and then, of course, the whole story in europe and china. that kind of came out of nowhere else providing a little comfort to markets. so, the risk/reward has been better for investors coming into this year, but what we would say is have we gone too far too fast we're certainly invested -- investors are gravitating towards this reopening, recovery play, high growth, more speculative parts of the market. can this go up in a straight line forever we would say as we get more

signs and, perhaps, a bit of a confirmation of a potential economic slowdown, mild recession, whatever you want to call it, markets will have to acknowledge that but that being said, we do think that sets up for a better back half of the year. >> scott, i want to get your thoughts on this at least in the near term, you're pretty cautious >> yeah, so, i appreciate the comments regarding market technicals and i think under the surface there are a lot of interesting looking stocks on the heels of last year all told, when we look at the broader s&p through our proprietary fair value lens, especially as you move through 4,000 and you look at current s&p multiples, you know, in the 18 or higher range, you begin to push where we think fair value is given what we know or think we know about interest rates and the earnings outlook so, the point would be on technicals, sure, you can run a little stronger as we have to start this year. but we think ultimately you do run into, let's call it a valuation headwind

that would be augmented. what we think will still be ongoing earnings pressure we perceive through the first quarter and first half of the year. >> scott, what about the thought that -- i mean, you don't want to necessarily try to explain away the valuation situation it is what it is but, you know, if you look below the very largest s&p companies, the more typical equal-weighted forward pe, it's not as demanding. and then the idea that we were printing record earnings levels last year, most quarters and we got a 25% pullback in the market so, now we're actually -- we're kind of beating earnings at a lower rate but yet the market is on firmer footing. are we looking at leads and lags there? >> i think we are. a couple of points there we like to talk about the composition of the index your top six weights in the s&p are 20% of the index, let's call it those are the companies that kind of typify that tech, communication services, consumer

discretion, mega cap cohort that lagged so much last year doesn't take much on the rate relief side to get a repositioning effect that plays through to the index to your point, you know, i think among the things we have to keep an eye on is that, yeah, last year while the fed was raising, inflation was rising or staying high that ended up being a net positive for revenues and for margins. so, we do have to allow that as we go forward from here in a counterintuitive fashion, you can get inflation gradually coming off as we think it will might actually have this, again, counterintuitive negative impact all told, yes, lead lag effects are very clear p will always lead e we think there's probably still more room to the negative on the e. but again, all told, a common view of ours for the past year has been, i think through this recessionary discussion, that earnings are going to end up proving more resilient than many

expect for a recessionary type condition. >> yeah. we're starting to hear a little of that. i think it was -- might have been jpmorgan last night where they looked at claims and some of the inflation trends and said, there might be some upside risk to our growth forecast. do you think that view will become more common in the next six common in the next six weeks? >> it is certainly hard to ignore some of the better data we've been seeing. gdp of course more resilient, the jobless claims much more resilient than expected. this mild recession based case, could it prove to be just below trend gdp growth that is certainly a possibility. but even in that scenario, markets would probably see volatility heading into that especially after such a strong start to the year. how we want to think becoming positioning longer term is thinking about more balanced leadership going forward we do think while defensive and value parts of the market have been lagging a bit, rates are

not moving lower anytime soon, and the bounce in tech, probably a bounce, but longer term picture, more balance between value and growth, think about bonds in the portfolio as well as yields move higher. so this is a year to position yourself toward risk assets in a balanced way >> all right thank you both for joining us. as we go to break, watch colgate beating on earnings and revenue, but stock down 5% actually down to $70 this morning. that will take you back to, say, almost halloween of last year. margin did fall short. pricing up 12 points, but volume do twnoo on pace for their worst day since april. don't go away.

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welcome back did you catch the "new york times" cross word puzzle today you might have seen a shout out to our show. spoiler alert. 9 down is "squawk on the street" airer. you got it, cnbc do you do the cross word puzzle? >> i was going to say, i'm not a cross word puzzle person, but good that it is the friday puzzle and not the easy one on monday where they expect to have

people a little -- >> if it were sunday, we'd have a problem. not a compliment but if you need a clue with no vowels, we delivered for you >> i don't like the cross word because you have to know all the special -- >> yeah, they have all their inside jokes do you play? >> no. i'd love to. maybe when the kids are grown up >> when we have spare time as we go to break, check out some of the biggest leaders on the s&p for the week tesla is among them and some chips despite all the back and forth we've seen dow has ppdied into the red by about 100 points about 100 points back in two. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

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markets might not like an uncertain economy, but insurance brokers sure do. contessa brewer has more on that story. >> yeah, complicated world, uncertain economy is certainly great for the business of brokerages they help companies reduce risk through analysis, through consulting, and through insurance of course. insurers are hiking premiums across lines of business to coverrising claims costs so who benefits? brokers who take a set percentage of that premium the world's largest brokerage

reported earnings yesterday and the heist rates it has seen in 17 years look at its performance over the last year. up 17%, way outperforming the broader market the rest of the sector also is outperforming. up 30% will husbanis towers, berkeley p analysts believe generally that there is even more room to run gallagher reported strong earnings just yesterday for the quarter. well positioned to take advantage of soaring reinsurance pricing in january we're seeing that -- you're seeing the shares under a little bit of pressure today. wells fargo says shares of wr berkeley are at a compelling valuation with good growth proc prospects. i was told that they are just profit machines. they may fly under the radar when times are good, but they offer a down turn playbook with

organic growth, with margin improvement and very defensive on a relative basis. his words? it is an easy bet. >> all right, contessa brewer, thank you. and i'll check on the broader markets. the dow has turned to negative, down about 63 points s&p down slightly as well. >> but up 2% for the week. >> and that will do it for us. tech check starts now. happy friday, i'm jon fortt. a dramatic tumble for intel, the stock getting pummeled in today's trade with some calling it the worst earnings in the company's history. pat gelsinger will be joining us in a moment with his outlook and plus why tesla's options are wall street's the whoest new trade, that stock up more than 20% just this week a big hour of tech check ahead