meeting. we gred get ready for the next interest rate decision. and johnson & johnson talc unit filing for bankruptcy it is january 31st, 2023 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with andrew ross sorkin joe is off today good morning, andrew >> good morning. good morning >> let's look at what with is happening with the u.s. equities you will see there are red arrows dow futures indicated down by

138. nasdaq right now down 81 the s&p 500 off 20 points. if you want to check out the january performance as we prepare for the final trading day of the month, the dow right now is up 1.7% s&p up 4.6%. the big winner is the nasdaq up nearly 9% this has been quite a month for the bulls. if you want to check treasury yields, the 10-year treasury at 3.53%. the 2-year treasury is 4.23% check out the big reports due this hour. we will hear from caterpillar, gm, pfizer, mcdonald's and exxonmobil we still have earnings season in full swing by the way, tune in at 7:30 a.m. for the exclusive interview with exxon ceo darren woods. famed short seller jim chanos raising alarm over the

trend in the market. here is what he said last night on "fast money." >> we don't try to time the market like anybody else, i have an opinion opinions things are not cheap they are not as expensive as a year and a half ago. the market is 18 times forward profit margins are at all-time highs. that has not been reverted one of the most reverted time series in time is corporate profitability. it has been stubbornly good and high since i've been on the street in 1980, not one bear market has ever traded above 9 times to 14 times the previous peak earnings '87 or '89 or '2004, that is a

long way down. >> ken said people are pricing a goldilocks scenario. he doubts the bullish plays out. he is a smart short seller he called a lot of things right over the years at a minimum, he indicated from the data perspective, i don't know where you stand on this, becky, thinking about the relative nature of the market. >> look, jim is someone who generally looks very much at companies. not someone who looks at broader market trends. when he speaks about it, i would listen up. it is not something he sticks his neck out and talks about

broad market trends often. if he is saying something, he has a view he is a short seller he is capable of looking at broad markets, but doesn't speak about them very often. he has some conviction about the call like this paramount global combining showtime tv network and service paramount plus the premium cable network is re-branded as paramount plus with showtime. prices for the platform will be announced in the coming weeks. a bundled of the two exist that starts at $11.99 a month. johnson & johnson shares fell yesterday during the session. this after a federal appeals court rejected the company plan to move talc lawsuits to bankruptcy court and try to freeze them in place you remember the company created the ltl management in 2021 to

try to limit talc related cancer claims it has cost the consumer business $4.5 billion. expected to continue for decades. the strategy is known as the texas two-step that is what they call it in legal circles. passing off the legal liabilities to another company which files for bankruptcy the court move now means johnson & johnson's exposure to the claims and it would make it harder for big companies to move past personal injury litigation. i always thought the texas two-step, i didn't realize it, becky, i didn't like the texas two-step -- i have known p abou it, but not the name. >> i have seen other companies that did it. that's a good name for it.

i can understand why a company would want to do it because you want to say there is only so much responsibility that we will have to something. it does. i can understand why the court would knock it down. you can't side step or two-step out of this. we will see what happens the legal bills that have rung up for the talc situation have been incredible. $4.5 billion at this point you can understand why shareholders want to do this, but the court to say forget it you can't do it. the in the meantime, the biden administration cracking down on medicare private plans overcharged the federal government it calls for tougher auditing in the program which accounts for half of medicare's enrollment. officials say the government expects to collect $4.76 billion over the decade from oversight

insurers receive extra payments when they care for patients with serious health conditions. that incentivized to maximize diagnosis to take advantage of the plans. insurance companies fought against the rule proposed by the trump administration they argue that the current system of risk adjustment is to make sure you don't discriminate against older adultwas serious illness. this is a situation where companies have taken advantage of it. that is the impact of how they set up rules are created and companies take advantage of it i completely am concerned if you change this, there will be some of the patients most in need who are the sickest who will get left behind and left out of the process. i don't know how you try to make sure you are not letting cheaters go through and some pretty terrible behavior by

companies. at the same time, make sure you are protecting the needy individuals. >> no question. we have earnings coming up first, u.p.s. out with earnings moments ago. looks like a mixed quarter reporting earnings of $3.62. that is 3 cents better than expected revenue coming in at $27 billion. that is lighter than estimates of $28 billion u.p.s. raising dividend and authorizing the $5 billion buyback program. the stock down at the moment we will keep our eyes on that and slew of earnings coming up coming up when we return, the fed kicking off a two-day meeting today. we get you ready for the next interest rate decision we get that right after the break. get ready for the flood of earnings exxon and gm and pfizer and caterpillar and mcdonald's all due this hour.

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welcome back to "squawk box. fed kicking off a two-day meeting today. we are joined by the wealth

management chief investment officer. welcome. i have not seen you for a long time i'm curious if you listened to the conversation of jim chanos' conversation last night. are you in the goldilocks scenario >> that is not a surprise. >> he is in the short business that is true >> from the fed perspective, things are going in the right way. therefore, they have no determination to squash things down i'm in the camp of 25 basis points in that environment, if you are bullish, you go along with that. whether that is sustainable or not, that is the question.

you see the acceleration in certain parts of the economy and some areas that are sticky. >> karen, we hear from companies today as well. i think let's stick to it. i will go back to krishna as well the better question i should ask is what the fed will do this summer or fall >> i don't think the fed is cutting interest rates soon. i think the fed will come out a little more aggressively in the hawkish tone i think we will have a 25 basis point rise in rates. i think the fed is starting to be a little bit aggressive to talk the market down a little more i don't think investors are believing in the fed when the fed is standing on higher rates for longer they expect to see cuts. i don't see that in the cards.

i think the fed will take a hawkish tone that might not make the markets very happy it is all about the earnings earnings are many ccoming in. earnings are not falling off the cliff. that is a good sign for the market the companies have been resilient. we are getting information today and it would be very important to see what happens with the jobs market report on friday i think the fed will be a little more hawkish than we anticipate. >> krishna, you suggest they are talking it down. why won't they >> there is a risk of significant weakening in the economy. even if it seems unlikely today. given they are close to the terminal rate they have articulated already. close to 5% and in restrictive territory. they don't accomplish anything

by being too hawkish at the moment it doesn't mean they are cutting. the market may have to reevaluate the pricing in of rate cuts in 2023. the fed doesn't have to address that today leaving that option open is something that would benefit them and that is why they will do it. >> what is your take if we had this conversation a year from now, what would the fed will or will not have done >> that is really the most important question it is quite likely the fed doesn't cut any time soon and the pricing in of the rate cuts that we have done, i think by the summer we will price that out. therefore, if we have a rally continue, i think the likelihood of that is falling apart later in the year is real. >> quite real. if that is your expectation, how are you positioning yourself right now? >> i think most investors, i

think, what is apparent is coming out of the episode and the growth outlook is better we are dealing with the inflationary issues. maintain neutral exposure in equities, but at the same time, not going full on is the strategy cash is the instrument have a decent allocation wait for a better opportunity around summer. >> karyn you like the watch and wait? >> i think there are opportunities. we are advising our clients for what worked in 2022. dividend paying stocks i think there are opportunities in fixed income at carolinas w wealth management. that is safe money at 4% i would rather see that than

cash this 2023 is going to be a positive year. i don't think it is sales a straight line up i agree we may have a bumpy road ahead. i like what i see. i like the fact that the market is not overreacting to the rates that a lot of the work is behind us i'm optimistic and i think there is an opportunity right now. >> we will leave it there. krishna and karyn, thank you when we come back, five major quarterly reports are due later this hour. get ready. here they come exxonmobil, caterpillar, general motors and pfizer and mcdonald's we will bring you the numbers lld instant reaction on wa street. first, a new gig for a familiar face for viewers. we have that story next. ♪ imagine something of your very own. ♪

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welcome back to "squawk box. online retailer shein is planning to name the latin american chairman. about $100 million in the retailer has been invested from softbank after the disagreement over billions of dollars of come -- compensation there has been reporting in latin america. we will see where he lands he ran sprint and ultimately sold to t-mobile it turned into the biggest and most profitable cellular phone

company in the united states over verizon and at&t. amazing. >> talk about a switch up in industries to jump from that to fashion and fast fashion at that that's interesting it tells you about marcelo and his skill set being universal is what they are saying from this perspective. that's quite a shift >> i look at it as one of many -- he has his own private equity firm that he is running mostly his own money it looks to be not an executive chairman role. it is part of the marcelo portfolio. the biden administration is planning to end the covid health emergency on may 11th. that is a shift away from responding to the pandemic as a national crisis and managing the virus more like a seasonal p

respiratory disease. it has also effectively barred states from withdrawing people from medicaid. andrew, think of all of this this is an issue when it comes to not being able to kick people out of the homes or apartments if they haven't paid rent or mortgage it comes to extending student loans based on the idea we are in a national emergency. it is counter to what biden said when the pandemic is over when he is giving interviews. a lot of confusing policies. you bet lawsuits will continue on all sides of this. >> no question no question. mean ctimemeantime, shares out. it came in above estimates and raised dividends

shares of whirlpool are higher guidance up for the year which was stronger than expected the company plans to announce the ceo will transfer to the advisory role before leaving the com company. >> i wonder if it means, andrew, the end of the pandemic declared on may 11th. will the cdc change guidelines the guidelines are still pretty strict if you have covid or direct contact of someone who has covid. >> right >> i know from experience. the guidelines are strict. do all of those guidelines change come may 11th because it is over and you are not tracking it like any other disease? >> these are all good questions without good answers >> yeah. weird stuff. when we come back, we talk quarterly results on the way we bring numbers from exxonmobil the ceo coming up. caterpillar and general motors

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welcome back to "squawk box. right here at the nasdaq market site in times square and cnbc headquarters dow off 152 points s&p off 21points also want to show you treasury yields flipping the board, you are looking at the 10-year treasury at 3.538%. 2-year treasury at 4.24% we will hear from jay powell after the meeting of the fed tomorrow afternoon

steve liesman will be on hand. wti crude is at $76.76 can we show the audience crypto this morning we were sitting at $23,000 this is the tailor t or the dog. we don't know. it has been holding up well, becky. it has been a bit of a surprise, i think, for folks trying to understand what is going on and how much of that is suggesting the risk on situation. do we get through the ftx of it all or did something else happen we will keep our eyes on that. we have earnings that are crossing the wire right now from general motors phil lebeau, what do you got >> andrew, this is a beat on the top and bottom line. a beat by a margin

$2.12 a share in the fourth quarter. the consensus was or estimate was $1.69. highest on wall street was for $1.80. they blew past that. revenue above expectation coming in at $43.11 billion $3 billion better than the estimate on the street the metrics within the metrics in the fourth quarter, auto free cash flow down 20% from the fourth quarter the ebita adjusted margin is a little below q4 of 2021. the north america adjusted which is what laanalysts are focused is up compared to the same quarter in 2021. the guidance will get a lot of attention and shares moving higher pre-market. net income for 2023 of $10.5 billion to $12 billion and

estimates of $6 and $76 the consensus was $5.73. overall free cash flow of $5 billion to $7 billion gm is buying 9% of lithium americas they will work with lithium americas to develop the patch out in nevada where lithium is extracted there. it is considered one of the largest lithium deposits in north america. the goal is to generate 1 million vehicles worth of lithium annually once they get that up and running by 2026. again, gm with 9.9% stake in lithium americas that is worth $650 million we will talk with the ceo coming

up in a little bit on the media call we have the conference call. curious of what mary barra has to say if you look at q4 numbers, not a surprise given what we have seen with the pricing in the market above expectation and guidance above what wall street is expecting for 2023 guys, back to you. >> that stock up 4%. 3.75% now. phil, i appreciate it. we will get back to you throughout the broadcast becky, has other earnings news. exxonmobil hitting the wires. andrew, looking through this and for the fourth quarter on adjusted basis, the company earned $3.40 that compares to the $3.29 that the street was dpexpecting. the revenue number is higher $95.4 billion. the street looking for $95.6 billion. you run through the numbers and p what they are bragging about is increased year over year.

ghana and permean production they have the refining in north america and highest globally since 2012 comments from darren woods said we benefitted from the favorable market, the investment we made before the pandemic provided products people needed here is a quote from him we leaned in when others leaned out. look at the stock right now. it is off 2.9% try to figure out what some of this is. on a gap paces, $3.09. there was a charge that came in the quarter which was mostly european windfall profits taxes and asset impairment you know this is a situation where they sued the eu because of the $2 billion they were looking for in windfall profit taxes. they are suing because the eu

did not a have all of the membe states agree before it happened. there is disagreement in general. you see the stock down 3.1%. we will continue to dig through it it is a 22-page release. we have time do to do that we should point out we have an interview coming up with exxon ceo doppler radar ron woods at 7:30 a.m. eastern time look at futures. the gm numbers with that stock up 3.7%. exxonmobil down a little bit we were looking at a negative market before the numbers hit. you are looking at dow futures down just over 200 points. 203 points exxon putting pressure on that s&p futures off 23 nasdaq down 92 andrew coming up when we return, price wars tesla and ford reduced the eving offering pricing tag will competitors follow? and later, the check on the

wealth with paychex ceo hnjo gibson you can watch us any time on the cnbc app we are live in times square this morning. back after this.

we have caterpillar out with quarter results. reporting earnings of 83 cents

revenue many coaling in at $16.6 billion. ahead of $16.4 billion you are looking at the stock off close to 3%. becky quick, what do you think >> i'm reading through something the company sent me on this. this is from the company take it for what it's worth. they say that quarterly adjusted profit per share included an unfavorable non cash machine energy and foreign translation impact of 41 cents a share which negatively impacted the share and an judjusted pps. they feel it will be a 31 cents beat against $3.96 25 cents beat over $4.02 because of better top line and margins

than expectations. take it for what it's worth of the the company is saying this the 41 cent negative impact per share from the foreign currency translation and they are saying that they have better top line and margins than the street had anticipated. if you dig deeper, the stock is off 2.5% we will see. sales were up 20% in the fourth quarter. they say that is record quarterly adjusted operating margin of 17%. free cash flow of $3 billion in the fourth quarter all-time record full year adjusted of pps of $18.80 they expect 2023 to be better than 2022 with the top and bottom line. the stock down 1.75% we will see. we will have the conference call later this morning >> you are right

as you have been speaking, it has gotten a little better. equity futures at this hour are lower. dow up 154 points. nasdaq down 73 s&p is off 17 points off in the last couple minutes. ford following tesla in cutting the price of the electric vehicles. here is jim chanos on the short bet on "fast money" last night >> the narrative seems to be the price war going on the legacy auto guys are hurt more than tesla is okay that shows you the auto business is a business. if you got to cut prices as well as raise price, that being supply and demand, you are in the auto business. in the cyclical business. >> for more on ev price moves, let's bring in tim higgins

let me ask you when people ask the bet of the century, some people say it is an auto company and some say it is something else entirely, tim. i think we may have lost tim before we got to him we will take a pause and bring him back on to the broadcast, folks. i think we will take a quick break and we will try to do just that >> break dance for you >> we can dance in the meantime while we wait. >> i think we will -- we could do that. >> we could take a look at other things we have pfizer set to report in the next few minutes. we'll take a break as we await the earnings reports you have a flood of earnings exxon and caterpillar and general motors and u.p.s there is still more to come. pfizer is on deckat this point that stock is flat ahead of the release of the earnings.

don't miss the exclusive interview coming up with exxonmobil ceo darren woods at 7:30 a.m. eastern time the initial reaction from the street was down. i'm not sure why the company beat on the bottom and top line we will dig deeper and talk to darren woods later this hour. reminder, you can get the ilst of "squawk box" in our day podcast. follow us on your favorite podcast app and you can listen any time we'll be right back.

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welcome back he's back. he's back after a technical snafu. w we covered tech for a long time. tim higgins. author of "power play. a power play here, my friend nice to see you. >> good morning. nice to see you. >> we talked about the valuations of the companies. i was going to ask you as you have been covering tesla for a long time. there are two ways to think of the valuation. one is a car company and one is a car company plus, plus or something else entirely. i'm curious where you land these days >> you are right the market would like to the value as a tech company betting on the idea it will be more than

a car. autonomous robot taxi service and energy company the market has been struggling the last few weeks as you see the reality of moving metal in the storeroom. it is messy. it can be expensive. i think in the last few weeks, you have seen that excitement return as a tech company it is a long road for the year heading into a possession recession could test that. >> where do you land with the pricing issue? the good news is they lowered prices and it is moving vehicles from the price perspective, can everybody else do that maybe they can't >> in a lot of ways, it is a classic auto sector move you know, the issue here are is that tesla has so much margin it can afford to do this. investors traditionally here are willing to see margins decrease

and pressure with the seeing the growth of sales. they rather see market share gains or keep the market share strong because tesla is a growth story. other auto makers don't have the ability. they are in a bind as they come to the marketplace with the new technology they have been betting the pricing would be what it would be now you know, they are facing pressure from tesla. >> i don't know if we can put a screen back up of the ev makers. what we do is a very interesting thing. we show tesla up against rivian and lordstown or nio not ford or others is that the right way to look at it i was curious how you are thinking about rivian and the days about lucid, for example. >> i think of them in the same way i thought about tesla in 2008 and 2009.

a critical period. the cash is king for the smaller players. can they get through the downward cycle that is the big gamble people who look at the product that rivian is doing have a lot of praise for it they have a lot of praise for s doing. if you look at tesla as a product that could be a painful process of being a cool product to making a car at scale, just asking about musk and his sleeping on the factory floor for all those years, it's messy. >> the other thing that tesla is not getting involved in in a much more meaningful way, i know they delivered trucks to pep saw co at one point. >> it could potentially be very big. the question is do these fleet

buyers want to go that route the incentives the u.s. government put out there to help that business, and we have seen recent announcements of expanding their factory in nevada for that business that's a real potential there. the past few years, as we watched tesla, the priority has been getting the battery sales and putting the intellectual might towards getting out the model y, and that's where the growth has been. it's hard to know if the semiis going to be a significant part of the business it could be. they are still pulling the levers of what they could potentially be as a car company for the next car company >> we look forward to seeing you soon we are getting earnings news

from pfizer with its quarterly results. >> for the fourth quarter, looking in line for pfizer, you have $1.14 on the adjusted line. it's right in line with what was expected adjusted gps looking to be 3.25 to 3.45. you are seeing pfizer drop they are down more than 3% and that may be because the 2023 numbers were forecast at they are saying 2023 is a trough year as we transition to commercial markets particularly here in the united states from the government buying the products, and that's going to

happen in the next half of the year they also do forecast their covid vaccine and their covid anti-viral for the vaccine they are looking at $13 billion for the viral they are looking at the estimates and assumptions going into that, and that's interesting to watch but pfizer is down 3% in the premarket. >> thank you for more on the major results this morning, we want to bring in victoria green, the founding partner and investment officer at g square private wealth, and also a cnbc contributor. >> i think we talked about maybe 2023 being a trough and we were ready for that because of the

health conference recently where they mentioned pr2023 was goingt be a trough year, so we are seeing where it's going to land for them covid has been between the world treatment and the vaccines it's 50% of their revenues right now. they have a great strong pipeline they are looking at 7 to 9% top line growth. but when you have so much revenue at risk, and they think 2023 and 2024, they might wait and see. i will not say nobody cares about the fourth quarter, but it's about the 2023 guidance >> we use refintive for our

estimates we go by, and according to refintive they beat on the line, too and i will say the revenue line has not been something that we have often used for exxonmobil because there are so few analysts that dare to put up a guess as to what their revenue numbers will be because it bounces all over the place why do you think the stock is down they blew out the record for the most money that ever has been earned by a western oil company in any quarter i think the last time they broke their own record from 2008 >> yeah, i think somehow we are getting fixated on the boo-year

buy backs. i think the market is getting greedy, and they are saying that's great but we want more money, exxon i think the market was really hoping they would accelerate share buybacks or the dividend, and the market is pouting a little bit, and they have great numbers but they market wanted more of a return >> chevron did that just last week, increased the buyback and raise its dividend and, boy, did it get blasted by the white house. wondering how that will kind of play out if it does happen here in the united states >> they had a billion write down on the eu windfall taxes i think the market is looking if

2023 is going to be a pause. recessions are historically bad for oil companies, and i think also market is nervous -- valuations on oil companies are still very reasonable, like seven and eight times their dividend you are right, number one, you have a lot of political headwinds, and number two, you are facing this, is china opening enough to offset the potential recession, and i think peak profits is weighing on the oil prices, what is the trajectory for 2023 and 2024 >> thank you the fed kicking off a two-day policy meeting we will tell you how big of an we will tell you how big of an interest rate hike i

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good morning, the earnings pa parade rolls on. we have a breakdown of the earnings for mcdonalds, pfizer and more and then we will talk to darren

woods woods. the second of "squawk box" begins right now ♪ good morning welcome back to "squawk box" here on cnbc i am andrew ross sorkin along with becky quick joe is off today we have a lot going on, though futures at this hour shows everybody where we stand we are in the red right now. s&p off about 11 points. we have a slew of earnings numbers coming in and we have the federal reserve on tap with their two-day fed meeting, and then we will hear from jay powell tomorrow afternoon. we are going to be hearing from exxonmobil in a little bit we have the ceo, darren woods,

coming up in a bit take a look at the oil crypto bitcoin just under 23,000 >> another dow component, mcdonalds. what are you seeing? >> earnings per share coming in at $2.59 that's 14 cents above expectations the number is down 1% year over year thanks to fx impacts, as foreign currencies weakened against the dollar and sales rising 12.6% during the fourth quarter, which was well ahead of the 8.2% analysts were forecasting in the u.s., sales were up 2.3%.

for the full year, global comp sales rose 10.9% the ceo said he expect short term inflationary pressures to continue in 2023 stock up about 2.6%. becky. >> 2.6% of a gain. we have had caterpillar, and exxonmobil and pfizer. i get the sense that dom is going to be here to give us the wrap up on all of these things >> that, he is you probably get that sense better than i get that sense, because he's probably off to your right or left >> he's off to my left but i can't see his board.

>> i am staring at becky right now. kind of creepy -- >> but he has his screen turned so i can't see it. >> they tilted it because of the lights as becky and andrew points out, it's a very busy morning for earnings in the time allotted we will see what we can get through this morning. let's start with ups, roughly 7,000 shares of volume l logistics giant had a good report they offered a full-year revenue forecast that disappointed some investors, but it did unveil a buyback program. on balance with all of that you are talking about a 1 plus percent gain for ups caterpillar, those shares are down to around 35,000 shares of

volume posting mixed results. profits mixed forecast, and those were helped by other things, so we will watch caterpillar shares down about 3% next up, exxonmobil. those shares down -- they have been moving around, but just around 25,000 shares of volume better than expected profits and revenues they are pretty much records at this point despite the fact that oil and gas prices fell during the previous quarter we will have much more on this exxonmobil story later this hour when ceo, darren woods, will be here on "squawk box" to talk about those results. must-watch interview at 7:30 eastern time and then general motors, roughly 150,000 shares of volume the automaker reporting much

better than expected profits, and so after all that, andrew, there's a lot of stuff to go through. there's about 30 s&p 500 companies reporting today. that's the highlight there i will send things over to you i know we have a lot more to talk about through the course of the hour >> dom, thank you for that we will look at a whole punch of stocks in addition to the fed, becky. >> that's right. the fed kicking off the two-day meeting. steve liesman joins us with the latest results from the cnbc survey what do they tell us >> they are saying, like the market itself, becky, they are in agreement over the near term for the policy look at the fed's expectation chart. 100% seeing the quarter point

hike 82% see another hike coming in march. that reaches the peak of 5%, the forecast by april, where it holds on average for nine months, and then 44% seeing cuts by december with a handful expecting them as early as september and another small handful expect the rates to continue through september here's the fed funds rate from the survey it comes down to 4.69, which is higher than what the funds market pricing is, and it comes down even more next year, december 2024. steve blitz says, the idea the fed is going to hold at high rate is silly. the fed will end up with the funds rate less than inflation asked if the fed is really watching the data, 58% said yeah the fed is data dependent, but

42% think the fed is headed to 5% regardless what the data says 24% believe the market is underestimating the fed's reserve, and 9% say the market is more pessimistic on growth. the fed will not hit its 2% target for sometime according to this survey, not in 2023 47% do see the target being hit in 2024, and 15% say it's not going to happen. a vast majority don't think the fed changes that 2% target the 44% bank on a cut, they are up against the fed that made a point in the minutes of the last meeting to note that no fed

member sees cuts this year we will have to wait for the meeting to see if the fed and powell dig in their heels on that forecast or take a step towards the market's view. >> i am trying to figure out that 3% that think it's going to happen that they hit their 2% target rate in 2023, this year, is that one person >> it's 34 responses >> so 3% is one person, basically? >> exactly >> who is that looney tune >> let's see i would have to look it up >> i am just joking. >> that's okay you know, i wouldn't call them a looney tune. i guess that person will have a very, very sharp negative forecast on inflation -- on growth and sees inflation coming down quickly there are some folks -- >> by the way, if i am right i

will stand corrected i will have to eat some crow if i am wrong >> i will get you that there's a school of thought, folks believe the inflation is linked to the supply chain problems that do see inflation coming down sharply this year, and those folks, also, they pair that with the idea that the economy is going to slow very sharply. >> it's not a positive outlook, they think we will get hit that because we are going to head into a recession anyway and that's why inflation is going to come down? >> right >> i get that. >> maybe not entirely looney tunes, but we do have a group of people that say, you know, the whole cause of inflation has been the supply chain backups. also you have housing coming off sharply. >> not to mention the oil prices have come back down. oil prices are lower now than

before the start of the ukraine/russia war there's a lot of things that have to go that way. i do want to know who that is and i will eat some crow if i am wrong and that happens >> i will be back at 8:30, and we will talk about that then and i will look at that person's forecast i think it's a great idea, becky, by the way, to look carefully at the outliers because sometimes they can be right. >> yeah. >> i agree coming up, we have a lot more on "squawk. we will talk about the state of small businesses with the ceo of paychecks. then earnings from exxonmobil. we will hear directly from the chairman and ceo of that company, darren woods, shortly checking on the futures after hearing from other big companies. you have dow off about 112 points and nasdaq down 57 s&p 500 off about 12

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meantime, wage inflation slowing at the lowest point since january of 2022, but hiring remaining strong. paychecks and market national job index turning positive the first time since january of last year.

small businesses continue to high -- hire, and employees are working more hours we are trying to understand how strong the job market is, and how backward looking some of the numbers are. you have them about as in real time as anybody can. tell us what is happening on wages themselves, and what do you see in the employment picture? >> absolutely, andrew. great to be with you what we are seeing is wage inflation is really going down it's the sixth consecutive month. in fact, our one month annualized earning metric that we follow fell below 3%, and that's the lowest since 2020 while at the same time we had the first increase in the job index, and the small business job market continues to be strong, and small business owners are able to go in the job market now and get employees at reasonable wages that's something the fed needs to keep an eye on as they make

their decision today and continue to be careful on what they are doing with interest rates. >> what are you seeing in terms of by industry how does it look to you? >> we are seeing calming across all industries with the exception of leisure and hospitality. leisure and hospitality fell behind, and they are still 9,000 jobs where they were prepandemic. they are having to pay more to get back to the jobs their annual earning rate is up 3.2% and minimum wage increases were in many states, and the wage inflation in january went up 11%. the low numbers i just quoted you include very high numbers in leisure and hospitality and some of the impacts of the wage increases on gen z

interestingly enough, for the first time the job growth was broad-based across all the regions. the south has continued to be the strong winner through the course of the pandemic, and that continues to be true in the last january, every one of the regions saw improvement in job growth and cooling in wages. >> the other piece of this, we see a lot of headlines about technology, job loss in the technology space you are seeing in real time -- are you seeing people move from tech company to another tech company, is it really actually pushing out now into other industries where they are taking technology-oriented roles but in companies not considered strictly technology? >> i think it's the latter, andrew, is what we are seeing. what you are seeing is a rebalancing of the labor market from the shock of the pandemic i think small businesses struggled to compete with what i think was a very irration hraeb

market -- remember the great resignation? people got concerned over that, and tech companies were over spending and over hiring, and now that bubble bursts and that talent is being redigested into the job market and small business owners are able to go back in the job market and find good, quality talent at reasonable wage rates. >> if jay powell is watching us right now, and he's getting ready for the two-day meeting here, what would you be telling him? >> well, i would be telling him that what he has been doing is working. we're seeing a cooling in wage inflation in small businesses. i think one of the things that i get concerned about is we have a prime rate now that is up almost 7.5%, and that's coming a issue for our small business owners. they need access to funding. i would like to see more

participation. we need to get more people back to work. >> your view is if you continue to raise rates -- i guess the question is, if it's working maybe it's goldilocks, but it sounds like you are worried there's a tipping point here and the question is where is the tipping point, right >> look, i think small business owners -- small businesses are the driver of jobs you go back according to small business administration, two-thirds of all the jobs in the last 25 years have been driven by small business owners. since the start of the pandemic, 4 out of 5 job openings are from small business owners. they don't have the same as what large businesses do. the way to get wages down is to destroy businesses, you can do

that how do we get more qualified labor in the marketplace, and that's a pay for policymakers to think about it >> we appreciate your time and perspective on all of that you want to make a bet about what you think we will see on friday >> no, i am not going to bet i have a lot of confidence in our numbers, andrew. >> how often on a friday, you know, on a jobs friday are you surprised? or where you say, you know, this doesn't match what i am seeing >> not very often. >> okay. it's nice to see you thanks >> nice to see you, andrew >> appreciate it when we come back, big earnings from big oil. we have an exclusive interview with chairman and ceo of exxon, darren woods we will look at the production

and outlook for the company. that company earned $59 billion in profit. that's a historic high, not only for the company but for any western oil industry we will talk about what he sees coming down the pike in 2023 check out some of the names we have heard from this morning. ups out with earnings, along with pfizer and caterpillar. all three of the stocks turning lower at this point. pfizer the biggest loser down by 3% gm is the big winner here. it's up by 2%. "squawk box" will be right back. meet jessica moore. jessica was born to care. she always had your back... like the time she spotted the neighbor kid, an approaching car, a puddle, and knew there was going to be a situation. ♪ ♪ ms. hogan's class? yeah, it's atlantis.

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welcome back, everybody. china's factory activity bounced back in january and expanded for the first time since september the official manufacturing purchases managers index road to 50.1 in january, and it's barely above the 50 point mark. yesterday famed investor, jim

ch chanos, said not a whole lot changes. >> obviously china will become more insaw lure. i have been watching the china reopening trade like everybody else has for the last six or nine months, and sort of marveling at it. i don't think there's any way to handicap it from my perspective. >> as jim points out, that's a view he has had for a very long time 12 years i remember that talking about that 12 years ago when he first started talking about these things he said people are pricing in a goldilocks scenario, and a fed rate cut in the next six to seven months he doubts the bullish scenario

will unfold, and he said at this point things are more expensive in the stock market, and you are talking about 18 times forward earnings and it's less expensive than a year and a half ago, and more expensive than not long ago. >> we're still at all-time profit highs, it's the most important component of that when you think about where we are, because it doesn't leave a lot of wiggle room for things to come down. we have more on "squawk. still ahead, the interview of the morning, exxonmobil chairman and ceo, darren woods, joins us. and then saira malik will be here and talk about a few ideas. we're coming right back after this

reporting fourth quarter and

full-year results this morning joining us is exxon's chairman and ceo, darren woods. the numbers are good, came in with adjusted earnings better than what the street were expecting, they were looking for $3.29. profit numbers on the annual basis, more than $55 billion that's a record for exxonmobil and beats what you have seen since 2008 why don't you talk to us about what is happening and what you are seeing and how these numbers came >> sure. good morning, becky. good to see you again. i think the results in 2022 reflect the right strategy and excellence in execution, and the hard work of our people. extremely proud of what we delivered. in 2019, we talked about what we were encountering, and

recognizing what we were producing, and while it was not well received at the time, what we are seeing today, five years on, that investment and the fundamentals to grow production, and we are at record levels. we brought on two production units in guy yawna we ran our refineries in north america at record levels, at the highest rate since 2012. we have done a lot of work to grow valuable production i think an interesting statistic, if you look at our net profit margin and go back to when we earned record profits in the past, our net profit margin was 10%. in 2022, it was a 14 basis point improvement. that was invest in advantaged assets, and restructure and lower our cost and focus on

productivity there was a commitment to the strategy and a commitment by our entire workforce to deliver when people needed us most. >> darren, they are very strong numbers. i have looked through it several times trying to figure out why the stock was trading down this morning, it was down by 2.5% this morning, and now down by 3% we talked to an investor earlier today saying the reason you may have problems in the markets is because the market is pouting about it what do you say about that >> we have been clear for as long as i can remember, certainly since i have been in the job, the first priority in our business is finding advantaged investments if you look at the three sectors we participate in, and the

upstream is depletion business if you are not growing you are shrinking. it grows faster than gdp, and if you are notinvesting to keep u with market demand you are losing market position if you are not investing to adjust your footprint and your product slate, you are becoming aub obsolete we have a lot of investment now going into low carbon solutions. the things, twe are finding tha in the early days of the low carbon solutions days. building the balance sheet so we can ride through the commodity cycles and continue to execute the strategy and invest in the

critical projects is very important, a priority, and the third is sharing our success with the shareholders. we have grown our dividend, and we instituted buybacks, and it's a balanced approach and one geared for long-term success, not responding to any one critic on the day, frankly. >> is it tougher to try and respond to critics when the one critic is the occupant of the white house, who has been harsh for oil companies overall. there was a harsh statement last week from the white house when chevron said it was raising its dividend and going with the buybacks they want to make sure oil companies are investing, and they have been very harsh. is that a harder line to walk

these days when you have a president and a white house that feels that way about things? >> my first comment would be the white house needs to get its facts straight we have invested more than any of our peers when times were tough we were out there investing at a level that exceeded anybody else in our industry we have done the hard work we have made the investments we had a keen focus on making sure we had the production there and products available for society when it was needed when the call came we answered it we spent that money, taking criticism at the time, and grew our production and are basically providing more products today because of those investments i think we are doing what the white house, in essence, is asking us to do. our shareholders stuck with us as we went through the pandemic and the low points, and they hung with us in our investments and strategies, and they are seeing the benefits of that, as are the shareholders through the

dividends, many are retirees that count on that we're proud of our ability to share our success with the shareholders, and at the same time focused on meeting the needs for society. and also to address emissions and focused on lowering our emissio emissions footprint. it's the lowest it has ever been we are on track to get to net zero by 2030 we are striking the right balance in our portfolio, and we are meeting the demands of society and sharing our success with those that invest in our company. >> the inflation reduction act did a lot of things, and people argue if it reduced inflation on any counts, but it also increased the paybacks there for carbon capture and laying out an incentive for hydrogen, which is what you are also working on now, too how does the ira change the

value prospect for any of the projects you have been working on >> i have said all along, this is a tough market when you are trying to establish a carbon market to reduce emissions what that policy does, and something we have talked about with governments all around the world, you have to kick start that through incentives to support investments that have to be made. they are very long investments we have experience in making the large investments, and technology is in line with the capabilities we built over time. the financial incentives were not there, and the ira provided that we have to strike to reduce emissions and generate returns for our shareholders that's providing products that the society needs and lowering emissions and making sure we

generate returns for our shareholders, those can all be done and it has to be done thoughtful the ira helps with that, but there has been technology to lower the cost if you have to help society meet its ambitions for net zero, there's a lot of work that needs to be done and investments that has to be made and a lot of progress we have to make in technology starting with policies that incentivize that work is the right first step >> darren, i think for the quarter you took a $1.3 billion hit to your earnings from taxes that were coming from the eu, and they called it a solidarity contribution let's be clear about it. it's a windfall profits tax. you filed a lawsuit against the eu you don't think it's fair or done legally where do things stand with that lawsuit right now? >> well, i mean, let's start by, i think, putting the situation in europe in context

i will start by saying we feel for the challenges people in europe are feeling, and so reliable and affordable fuel is something we have talked about, and we are trying to address that need while lowering emissions and it has been a priority for us for sometime we have invested to try and accomplish that. what we are seeing play out in europe is the consequence of ill informed, frankly bad policy, policy based on ideology rather than the realistic constraints you don't solve bad policy by worst policy that's what we are seeing there. our suit basically addresses the approach they use to put those taxes in, violating their own rules and we feel it's illegally

done we are challenging that and working our way through the courts on that >> where do you think things stand right now in terms of the energy markets, the challenges that may be faced ahead, the china reopening and what that all means for energy prices? if you look right now, wti prices are back below where they were before russia first attacked ukraine we have come through the heightened tensions around that. ph most people, though, seem to think that oil prices will go up from here, the supply to demand picture will be a little tighter. >> yeah, i would set the ukraine invasion aside for a moment. what we are continuing to see here is the challenges associated with coming out of the pandemic and the fact that during the pandemic the industry suffered huge losses and not much cash flow, a lot of refineries shut and businesses going out of business.

supply was not there to meet that demand when the economy was going to recover prior to the russian invasion of ukraine, we were seeing the prices come up again throughout the ukraine invasion, we have not seen a decrease in -- a large decrease in crude products coming out of russia. that has not -- there has been volatility associated with concerns but we have not seen the supply deteriorate with crude. it's going to take time for the investments being made now to bring to capacity on i think we are going to be in a fairly tight window of demand and supply being tight and probably going out of balance if the demand grows faster than the supply comes on, and we will see prices come back up again. i think it will be a fairly constructive environment in most of the sectors we are in in

energy >> you have just completed your beaumont refinery expansion. will that change the picture in terms of the margin there? >> what we invested in, we made that decision many years ago, looking at the growth we were seeing and frankly justified that expansion on transportation differentials from the crude we were importing and the transportation we paid on that versus what we could bring into the permanenten. we recognized refineries that are complex, we have chemicals and lubricants at that plant our beaumont expansion, we completed that project at the end of last year, and we are in the process of commissioning that that will bring 250 barrels of

capacity in the u.s. market, and that's the largest expansion in a decade it will help relieve price pr pressures here in the u.s., and you look at the world and the refineries that closed during the pandemic, it will not solve that demand balance. it will take time to catch up with that picture. >> you have gotten smarter about yourinvestments and smarter about making sure they are profitable what is the number you just said, 14% margins now versus 10% when >> 2012, if you go back to when our highest revenue period was, 2012, it had higher revenue than what we are seeing today, but lower earnings that's the net profit margin, today at 14% that improvement is around making sure we are investing in more productive assets, and

better leveraging our scale and integration and becoming more efficient and lowering our costs. we are proud of that we have more work down the pipeline to take advantage of the scale we have as a company and the integrated businesses we have we have a unique position. we have a diversified portfolio businesses our strategy is built on the fact that each of those businesses, while somewhat diversified, share the same core capabilities, so we can centralized those capabilities and meet the needs of the businesses as the businesses evolve it makes us somewhat robust to associate with transition. whatever the speed of the transition, we can allocate that to the speed of the business we have a good position where we

have a lot of options and flexibility. >> you should be proud of the profit margins that's what managers are supposed to be doing, finding ways to be more effective and efficient. when you talk about profit margins of 14%, and given the hot potato that everything in the industry is in oil -- or the energy industry, not just oil, but do you worry the politicians will crack down or the windfall profit tax is something they will propose in washington >> i am hoping that politicians around the world learn from the experiences that we just have been through i think we will continue to work our way through in europe, which is a commodity market. prices are set by a supply and demand balance, and when those get out of balance you get high prices, and that's the fundamental. the way to make sure we have affordable prices, reliable supplies of energy, is making

sure that you got production and supply that's how you address that. the more work that governments around the world do to suppress that supply, or to penalize the companies engaged day in and day out of bringing that supply on, the worst that problem becomes you only exacerbate it the only challenge is the time frames associated with the decisions made today don't manifest themselves for years, and that's one of the challenges we have here, is the disconnect between the political time cycle, and the energy time cycle, and those are two different cycles but important to understand. >> fair point. thank you very much for your time this morning. darren woods, the chairman and ceo of exxonmobil. good to see you. >> good seeing you, becky. >> great interview, becky. when we come back, a breakdown of pfizer's results, we will talk about the highlights and you get the best of "squawk box" in our podcast, and you can

listen atinyme "squawk box" returns after this. this is real time insights thank you so much for joining us how are companies rethinking their supply chains given the constant disruption we have been seeing >> it's important to keep in mind supply chain operations, we are seeing companies make the shift away from that traditional supply chain model to a more circular supply chain model that moves away from the make, take

and waste model of the past. >> how does a company go from traditional to circular? >> company executives need to develop the strategies necessary to maintain these products and parts and pieces and supplies throughout that product life cycle. at the same time, they need to make sure they are working with sustainably focused suppliers and venders that are helping them implement and execute on the ground >> how are you helping your clients make that shift? >> we are working with a number of companies to move to more of a product as a service model, in particular in the consumer sector, we are seeing luxury fashion retailers, rent and resale, and we are seeing equipment usage where we are renting and reselling is equally happening. >> thank you for sharing your expertise. >> great to be with you.

we want to get straight over to meg who has been digging through pfizer's latest quarter this morning what are you seeing? >> well, andrew the quarter itself, essentially in line, adjusted per share 1.14 versus 1.25, and it's the forecast weighing on the shares, down almost 3%. the company is forecasting $71 billion for revenue, and the street was looking for $74 billion. the forecast on the covid products is coming in light of what analyst had been looking for. the vaccine will be $13.5 billion, and that's down 64% compared to 2022 the company is saying the total 2023 guidance is lower due

entirely to revenue declines for covid products they topped $100 billion for 2022 revenue, and of course forecasting $71 billion on top of the forecast. you can see the assumptions they are making for the antiviral drug. worldwide, excluding china in this upcoming year and they say 17% of people may take an antiviral. both of those numbers are actually higher than 2022. the reason the numbers are lower are, especially in the united states, we're transferring to a commercial market. so using up the government supply it's going to be a trough year andrew >> okay. meg, thank you for that. when we come back, a number of tech giants ready to report results this week. we're going to talk valuations, job layoffs, and so chmu more as "squawk box" rolls on after this

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welcome back to "squawk. we are awaiting quarterly results from the biggest names in tech this week and right now we want to focus on some valuations that have shrunk in the last week. alphabet, meta, and amazon have now lost over $1.5 trillion in market cap that's with a "t," trillion. joining us right now, his take on the tech sector is jeff lewis, he's the founder and managing partner at bedrock capital. i think there's a lot of folks out there this morning who have been holding on to some of those names that i just mentioned, hoping, praying, and wondering, "a," are they coming back, and some others saying, should i even be dipping in again, maybe

putting some money into those stocks given where the valuations are where do you land? >> i land on, you know, hoping is definitely not a strategy praying might be, but i would say that of those three names you listed, andrew, those are, you know, meta, meta, amazon, there's a sense in which those are sort of megaplatforms of the past and the question that investors need to be asking themselves today are what are the m megaplatforms of the future? and there is this reality that most of meta's revenue is advertising. most of google's revenue is advertising. most of amazon's revenue is still marketplace, despite their awesome efforts with aws and i do think the advertising business models on the internet are going to get disrupted and you really need to be looking for what's the next mega platform and i don't think it's the same ones >> so, you know, it's not funny, but i was going to say, ten years ago, 15 years ago, people

wrote off microsoft. there was a view that microsoft was a platform of the past that would have been a bad bet is there any prospect in your mind that either of those three companies has a different kind of future than the one you just articulated? >> well, i think microsoft is the best bet of the megacap tech companies today. it was written off decades ago i think it is massively undervalued today. of all of these mature megacap tech companies, microsoft is the one that is most exposed to the cutting edge of technological innovation but honestly through their partnership with open ai, which recently announced, where we are proud to be investors here at bedrock and open ai. they do have exposure to agi over the long-term and will be able to integrate open agi's gpt products, and things like azure, and even for microsoft, azure is only 30% or so of microsoft's

revenue. >> jeff, we don't have that much time, but let me ask you, you are an investor in open ai obviously, creating chatgpt, there is a question among people in techland right now, which is, how unique is that product, long-term, could it be replicated by others how much does it cost to replicate. you know, you hear people say, in the business, you know, if you spent maybe $100 to $200 million to compute power and some engineers, could you train something that does something similar to it? what do you make of that is that possible >> well, many of these things can somehow be replicated. you know, the facebook social network, it was very easy to replicate. lots of folks tried. you know, i would argue that open ai has a very multi-layered mode and in practice, they have a tremendous, tremendous lead and advantage and the microsoft partnership is going to really allow that to compound over the many years to come >> and that's a function you

think, i image, of the fact that azure will allow them -- i mean, it's not just training the ai, it's then actually using it. and right now, it's costing 2 to 3 cents, literally, a query. that's expensive over time the question is, how did the economics of that change >> i mean, just the way in which open ai's capabilities are being integrated into microsoft's product suite, over many years is going to just drive a significant mode for open ai, we believe. and quite honestly, they do have just an unfair advantage on the capital side, on the model side. and that entrepreneur -- we're often always about the entrepreneurs here, and sam altman, someone i would never bet against. >> jeff, it is always good to see you. it is a longer conversation. i hope you can come in and we can do this all together in person for maybe an extended discussion appreciate it. great to see you >> great to see you, andrew.

>> i like this thanks, andrew when we come back, much more on today's big earnings, including results and guidance from general motors. check it out, that stock actually trading higher. it's up by about 4.5%. phil lebeau will break down that report, next plus, spotify shares are jumping after reporting subscriber growth that topped expectations we will have the latest comments from the ceo on the quarter. that stock up 8.25%. "squawk box" will be right back.

good morning it is a final day of january and futures are pointing to a lower open on wall street. in focus, earnings and lots of 'em. results straight ahead from gm, mcdonald's, exxonmobil, and so many more. and what the short seller-induced thrashing of the world's richest man means for emerging markets and specifically india that story and so much more as the final hour of "squawk box" begins right now good morning, everybody. welcome back to "squawk box" here on cnbc i'm becky quick along with andrew ross sorkin joe is out today, but we're going to see him later this week let's take a look what's been happening with the u.s. equity

futures. things have improved overthe course of the morning. right now, you're looking at the dow still down, but only by about 85 points. we'd be down by well over 200 points earlier this morning. part of that is what we've seen just with earnings, with some of the stocks immediately taking a drop and then coming back. s&p futures down only by 4.5 points right now we were down by over 22 points earlier. the nasdaq still down 2, but only 28 points we'll see what happens between now and the opening bell you've got about an hour and a half to go among those earnings, exxonmobil said that earnings and revenue beat the street's expectations in the fourth quarter. the company posted a yearly profit of $56 billion. that is an exxon record, and one for the entire western oil industry, i believe, as well that stock was off by about 2.5% earlier, but then the ceo, darren woods, came on and started talking, and wall street seems to like what he has to say. that stock is now up by a third of a percent we spoke with darren woods in the last hour and spoke with him about returning money to

shareholders >> we have grown our dividend 40 consecutive years. we instituted buybacks last year, raised it a couple of times. we're now, i think, buying back more shares than any other -- anybody else in the industry so it's a balanced approach, and one geared for long-term success, not responding to any one critic on the day, frankly >> and by the way, a note about exxon's profit last year it was more than $10 billion higher than their last record that they had set for the company. that was back in 2008, when oil hit $142 a barrel. but one of the things we spoke with them about, andrew, was just this idea that profit margins have increased pretty drastically. that's because the company has done a lot of things divested a lot of those assets that were less profitable, that were, you know, you were paying much more to get the oil or the energy out of the ground so part of that is what they've been doing internally, just trying to make sure that they are going after the cheapest

relative energy. all of that's in the perm yan basin. but they now have profit margins of 14% that's something they've been very conscientious about, but something that could draw ire from washington, d.c they also talked about how they spent $1.3, maybe $1.7 billion that they got hit with in the fourth quarter from the windfall profits tax that was put in place in europe. they are suing the eu over that, but there had been threats here in the united states, darren woods laying out his arguments about how he thinks that's wrongheaded and why that actually hurts energy production down the road. >> we will see where that lands here in the u.s., of course, but in that case in europe as well i want to get over to dom chu. he's got this morning's top earnings reports and big movers what's going on? >> so in addition to the exxonmobil trade that we've been watching with becky right now and you, earnings-heavy morning. among some of those other stocks making waves in the pre-market are a couple of dow components first up is caterpillar, which right now is down about 2.75%, about 7 bucks to the downside,

254 bucks a share. we have roughly 85,000 shares of pre-market volume. profits are falling shy of estimates on better than expected revenues. caterpillar was able to raise prices for a lot of its products in a strong demand environment but profits did take a hit due to foreign exchange-related headwinds. so the onbalance of those shares, down almost 3% right now. also, fellow dow component mcdonald's providing a drag on the blue chip index, at least for right now, down about 2% the quick service restaurant giant has traded about 100,000 shares of volume it was a beat for both profits and revenues at mickey d's, sales growth at established store locations both here in the domestic u.s. and internationally came in above estimates, due in part to its ability to raise menu prices while still attracting robust customer traffic ceo chris saying he expects more short-term inflationary pressures to continue in 2023. for those of you keeping track at home. basically, the entire dow's loss

in the pre-market trade is just those two stocks alone we'll end on a non-dow component, but a strong bellwether for the global economy. that's shipping and transportation logistics giant, u.p.s., which is up roughly 2.25% right now. profits stopped estimates, revenues fell shy of expectations u.p.s. was hurt by lower shipping volumes during the holiday shopping season. though that was offset by higher prices charged per parcel. u.p.s. also raised its quarterly dividend by nearly 7% and also approved, andrew, a new $5 billion share buyback program. i'll send things back over to you. >> okay, thank you for that. meantime, dom, we've got general motors out with its fourth quarter profits, or i should say, results and profits phil lebeau joins us with the details. take a look at this stock this morning. >> nice move higher for general motors pre-market, andrew. three things are driving it. first of all, q4 results, far better than wall street was expecting. that 2.12 a share, way above even the most optimistic analyst

expectation of $1.80 a share then you've got the 2023 guidance this is also coming in better than many analysts forecast at this point specifically, you've got them planning to earn between 10.5, $12.5 billion this year. what does that work out to a per-share basis, $5 to $6 a share. the street coming in today at $5.73. finally, there's an announcement from gm and lithia americas. buying a stake in lithium americas they will now work together to develop lithium production in nevada, as you take a look at shares of lithium americas, that nevada production, by the way, not expected to start until 2026 at the earliest. but eventually could produce enough lithium to power 1 million evs. mary barra, ceo of general motors coming up tonight on "mad money" with jim cramer do not want to miss what she has to say not only about the business right now, but the lithium america deals, as well

and there you have gm up more than 4% pre-market guys, back to you. >> phil, thank you very much right now, i want to take a look at the broader markets this morning, following all of this morning's earnings we do that with sarah melich, who is newvine's ceo a lot of earnings to wade through, a lot of different circumstances. but is there some sort of message for the markets that you take out of it >> i think what we've seen year-to-date is a typical january effect, where there's two main events of the fed's pe perils so in terms of the fed, they're walking a tightrope, the market widely expects them to moderate rate hikes to 25 basis points. but we expect them to balance that with hawkish commentator, because they need to make sure they don't become too bullish and ease financial conditions even more. payrolls, we think we could see a beat again this month. 250,000 payrolls, maybe even more due to strong demand, tight supply, and continued in hiring and services so all of that together, i

think, is why the market is going to have trouble continuing the rally that we've seen in january so far >> yeah, having said that, we are looking at the futures this morning, trying to rally back pretty sharply the dow has made some improvements, so has the s&p, so has the nasdaq i don't know if it will go positive today or not, but we did talk to jim and he's worried about how the market has gotten more expensive he is a short seller, but doesn't often make comments on the broad market he point out that we're looking at earnings at 18 times forward earnings -- we're talking about 18 times forward earnings right now. and that's not as cheap as we had been just a month ago. >> evaluations are one of our key concerns one of the issues is that the market is basically pricing in the most optimistic scenario, which is a soft landing. now, add to that risks around inflation, which is still sticky, recession, earnings downside we're happy to see earnings

estimates moving lower, but revenue growth is still expected to be in the mid-single digits on the positive side this year that's a risk. and of course, the debt ceiling, another shorter term issue but if you look back in 2011, debt ceiling issues caused the markets to decline in the double digits and with the polarization, politically this year, i think you could run into an issue where there's a lot of arguing over the debt ceiling and also, if we have to cut spending going forward, that could lead to an economic recession being exacerbated. so all of those are issues that we have to deal with as 2023 goes on. we're not pricing those in when it comes to valuations >> are you a buyer here? >> i think at this point, we're looking for quality and defense, so i would be buying on the defensive side dividend growers within equity we like fixed income over equity where you can get historical equity-like returns for lower volatility infrastructure stocks, we like those. tend to have more recession-resilient factors behind them, like waste management and utility so two key factors to watch for, quality, defense, those are companies we think can continue to do well something like mcdonald's, which is a safe haven stock.

i think that could be an outperformer if the market starts to give up some of this rally that we saw in january >> the buy on the dip used to be the thing to do. it has not been, at least not for the last year. are you back into that idea, if these are stocks you like. if you do drop down, you'd buy them, because you like valuations all of a sudden or is it far more complicated than that at this point? >> if there's a high-quality stock, i would be looking to buy on the dip more broadly, we're more in the sell on the rally camp when it comes to equities, because i just don't think earnings reflect reality. in terms of consensus estimates going forward. it's opposite that the market and the fed disagree, in the sense that the market is more optimistic on the fed. i don't think the fed will be looking towards pivoting anytime soon and a pause could be a long pause. and there could be a longer pause of these basis points going forward. i don't think that's what the market is considering. all of that together makes us more of a seller >> sarah, thank you.

it's great to see you. >> thanks for having me. >> we've got a lot more coming up this morning on "squawk box." what can we learn about the world's biggest emerging markets from the sell-off in shares of an indiana con glomerate that's been targeted.

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. welcome back to "squawk box. this has been quite a saga india has worked hard to try to raise its profile on the world

stage for companies looking to do business and investors seeking returns, but accusations of stock manipulation, accounting fraud against the adhani group conglomerate leading to a lot of questions. joining us right now with broader context is marco papich, strategist at clock tower. it's been quite an extraordinary, as i said, saga, to behold. i'm curious what you think the headline takeaway for you is in what we've been seeing, of course, there have been lots of accusations against this company. they've denied them thus far, but that hasn't stopped the market from selling. >> well, you know,i'm a macro investor, so i look at this from a very top-down perspective. and what's been extraordinary has really been the performance of indian assets, despite a commodity bull market since 2020 so in 2021, in particular, something very interesting happened indian stocks absolutely outperformed the rest of

emerging market complex. india has been the best-performing equity market in the world, including the u.s., since 2020 and in 2021, this happened despite the commodity outperformance, which stands to hurt indian economy, because there's such a huge commodity importer and i think that this really was about the anti-china trade china started regulating its tnt sector and all of these large allocators flooded into india as an anti-china alternative, if you will but the problem is now in 2023, we have signals that china is going to stimulate growth. as growth goes up, so do commodities. and that creates a very pernicious macro context, for indian equities, fraud or fno fraud. >> marco, help me with this. this is the biggest issue. fundamentally, do you believe the numbers that you get out of india, do you believe the legal

and sort of the laws, if you will, are there to protect investors and do you believe the shenanigans are taking place >> so you're talking about governance, right? and a lot of investors again, as china started to become less pro-business looked to india as a governance alternative, because it has presumably better governance and my answer to your question is i look at india as any emerging market economy. so there will be a level of shenanigans that any investor has to be comfortable with so things like this do happen from time to time, what's was kind of lost over the last two years as investors plowed into india as a beacon of hope in the emerging market complex. and i think you're starting to see that unravel i think what we're being reminded today is that india is an emerging market

>> and therefore, you look at the adani situation and you think what >> i think that it's merely a catalyst for a broader sell-off that honestly is probably 18 to 12 month, you know, overdue. india outperformance makes no fundamental fact look, india needs to invest more in its infrastructure, if it's going to benefit from this french shoring, onshoring, whatever shoring thesis that everyone thinks is happening there is absolutely no evidence that fdi flows into india have gone into manufacturing, have gone into fixed capital asset formation. and there's no evidence that india has gained market share as all. so you have a headline of apple or some other company moving production to india. those are just little anecdotal pieces of evidence there's no macro evidence in the data that india is grabbing market share from china. and so i think a lot of investors just plowed into the country, you know, as a panic trade over the last two years. and are now getting whipsawed by the macro context. >> what do you think the

geopolitical risk is to india in its relationship with russia i'm thinking specifically about oil, but i wonder whether it becomes a bigger problem >> that's interesting. that's again, when something like this comes up all sorts of skeletons in the closet start being brought forward. i don't think that's a big issue for most macro investors india is doing what many other emerging market countries are doing, is getting access to some cheap crude. it does bring up the issue that we've kind of ignored all the works of india for the last two years. >> marco, i want to thank you. it is quite the soap opera i hope at some point, we can all get into it, because the actual story itself with the tax shelters and the like are something. but we thank you thank you, again becky? >> thanks, andrew. when we come back, we're going to go inside spotify's new results and what you should be watching when snap reports

tonight. squawk box will be right back. hello, world. or is it goodbye? you know, it seems like hope and trust are in short supply. [clap] now, as businesses we can blame and shame. or... [whistles] we can make a change. [clap] we can make work, work for our communities. create more equal opportunities. [clap] it's time for business to show its true worth. because it's not goodbye, world. it's hello, team earth. [clap]

welcome back to "squawk box," everybody. have been watching the futures this morning, and things are looking the best that they have all morning. we are still in the red, but not by nearly as much as we had been an hour ago ago, two hours ago now you're looking at the dow futures, indicated down by about 45 points. we've been down about 200 more points than that s&p futures are down by just 3.5. we've been down 22 earlier this morning. and the nasdaq futures down by only about 31 points we've got a lot of different earnings that came in. you had, let's just name it here, u.p.s., exxonmobil, gm, plus three dow components. pfizer, mcdonald's, and caterpillar. yeah, those are the ones that we've been waiting for, that we've been seeing this morning you can see how it all shook out. gm is the big winner it's up by about 4.6%. u.p.s. is also a little bit

higher pfizer is down by about 2.9% caterpillar is off by 2.7% and exxonmobil, down by just over 0.8%. >> let's talk music. spotify results out this morning and snap's latest report due out later. julia boorstin joins us with the latest she just spoke with spotify's ceo. good morning >> that's right. good morning to you, andrew. i just spoke with spotify's ceo daniel lech and cfo paul vogel on the heels of the companies' better than expected revenue growth the executives telling me that the revenue growth was in part thanks to the growth of their multi-account user plans, which of course cost more. they noted that they rolled out about 40 price increases in different markets over the past year and will consider more price hikes in their mature markets. ceo daniel lech telling me, quote, we're really focused now on that we're entering a new era, where we will drive a lot more efficiencies going forward. and that marks a pretty big shift from how we acted

previously of course, responding to some cost cutting they didn't have any commentary on the overall ad market, but they did say that they are confident in the advertising products that they are developing i'll be interviewing spotify's cfo paul vogel, that's coming up at tech check at 11:00 a.m. eastern. looking ahead to snap's earnings, that company reports after the bell its advertising business will be under the microscope amid concerns of a broad ad contraction. and its earnings are expected to decline by 48% from the year ago quarter, while snap's revenue growth is expected to decelerate, to just half a percentage point now, analysts expect snap to add 12 million new daily active users. that is 4 million fewer than snap added in q3 snap laid off about 20% of its employees and streamlined its companies focus at the end of august, so we'll be listening to see if more cuts or more streamlining are in store. andrew >> when you think about snap's

business, how much of it right now, i mean, the whole -- so much of the business is at the whim of the advertising industry, but at the same time, i'm curious, you know, we keep talking about chatgpt and ai and how that may change the business, change all of these businesses do you think that has a big impact, potentially, on snap >> i expect to hear a lot about cha chatgpt, tor at least how these companies are using, a i from snap as well as from meta. meta reports after the bell tomorrow and we hear from google after the bell on thursday and i think there will probably be some questions about "a," whether chatgpt and that kind of generative ai technology is a threat and "b," how they are implementing more ai tools, "a," to better target ads, "b," to make the content that they show users more entertaining, more applicable, more relevant, et cetera >> all right julia boorstin, thank you. appreciate it. coming up when we return, breaking economic data ste fourth quarter employment co index, it's next when "squawk" returns

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welcome back to "squawk box" right here on cnbc we are just seconds away from fourth quarter employment cost index data we've, watching the futures this morning. as we've mentioned, the picture has improved you're still looking at red arrows, but not nearly as significant. the losses that we've seen earlier in the futures dow futures right now, down by about 52 points. the s&p futures are off by 4.5

the nasdaq down by 33. and if you've been watching the ten-year, you'll see that the ten-year treasury right now is yielding just about 3.5% 3.553% rick santelli is standing by at the cme in chicago and rick, this number is not one that we generally pay a whole lot of attention to, but the employment cost index data may be important when you've got the fed meeting right now. what should we be reading into with this? why is it an important number, potentially for the fed? >> this is a very important number for the fed and just to put a face on it record keeping on this goes back to 1996. and a recent read in march was 1.40%. that is the all-time high, since record keeping began prior to that, pre-covid, 1.20% was the highest ever month-over-month percentage change that was back in '03 the fed has, on various occasions, referenced this remember, when you're looking at costs and labor is important and you still believe in the phillips curve, your biggest cost goes up and down the

elevator every day in the form of your employees. so the employee cost index, of course, has a huge imprint in my opinion on how the fed is ultimately going to perceive the relationship between wages, costs, of course, and what's going on with inflation. we are just a few seconds away we continue to see a consolidation, actually, going on in many markets, fixed income is no different. treasury yields on a closing basis have been compressing. here we go it is out. it is now 1% we are expecting our fourth quarter eci employment cost index that we were just discussing to come in around 1.1% it came in a bit lighter at 1% and let's go back to history here that would be the lowest level going back to june of '21. that would equal december of '21, when it was at 1% as i said, in between there and now, we had 1.40 in march. the last couple of months have been 1.2 and 1.3 so based on history, these are at very lofty levels

so it is a big plus if you are one that is looking for inflation to subside, although, historically, and this is very important. you know, when we talk about inflation on cnbc coming down a bit and the markets have seized on that, it doesn't mean inflation is at a point where we can ignore it. the fed is going to continue to pay close attention, becky, because historically, these are still too high they're not near levels that would suggest that we're getting close to 2, 2.5%, which is the fed's target, 2% so we'll continue to monitor but it is a move in the right direction, and we can see that pre-opening dow futures have ticked up a bit, even though they're still not, of course, in positive territory and we see that interest rates have definitely moved down in the ten-year, from 353 down to 350. we want to continue to monitor that back to you. >> pretty impressive we've really battled back. first it was earnings that maybe helped out a little bit, in some cases, not in all of the

earnings that we've heard this morning, but you're looking at green arrows across the board. rick, stay with us we'll look at steve and an additional panel, too. steve, you've been looking through this number. what do you think? >> heading in the right direction, but rick had it right, becky it's still too high for the fed. and rick is also right that fed chair powell, jay powell mentioned this number specifically as something he's watching, as a potential source of inflation i don't think he believes it's coming there right now, although there is some push-up from higher wages into prices, especially in the service sector and he's going to say, look, it's going in the right direction. and it really boils down to this debate, becky, about how much is enough market looks at three months of declining year over year inflation when it comes to either on a 12-month basis or a 3-month annualized basis and then i talked to waller last friday, and he says, yeah, great, talk to me in march and see this continues the fed will put out this fire very, very -- very assured that

the fire is out and that the market is ready to move on and say inflation is already under control. >> steve, just in terms of the fed's perspective on this, do you think they're breathing a sigh of relief at all or no? >> yeah, i mean, i think they're breathing a sigh of relief, but i don't think that they're sort of letting down their guard. it's funny, they think that the mistake they made last year was being too dovish about the inflation prospects. and so, they're compensating that by being extra careful this time around. you know, as i've said before, i think one of the potential issues last time was they were too obstinate about their outlook and didn't change it and for some people, we talked about an individual from the survey in the 7:00 hour, becky, this person thinks that the fed hits its inflation target. they have a 1.9% year over year rate for inflation this year and they think that it happens

because the economy turns down pretty sharply this year that's also a concern of the market, less a concern of the fed. that person is a friend of our show here at joe lavorgna. >> you added him i wasn't sure if you were going to i don't know if they think these results are -- >> joe is -- joe is -- joe is negative about hisoutlook and he's happy to talk about it. you know, he's -- we email quite frequently he has a pretty negative outlook for this year. and he's pretty confident in that outlook >> he must know, but he's the only guy, the only person in the entire survey who thinks that they're going to hit 2% this year, that fed target. and not because of good reasons, not because they're successful in their job, but because things are going to be so bad, the economy will collapse so quickly that inflation will automatically come down. >> but that's what the fed wants, so that would be considered successful. >> that's a fair point that's a fair point, rick. >> i'll just point out, becky, if joe didn't know it before, then he was the only one -- no,

sorry, i was going to say, if joe didn't know before he was the only one, he'll know it now. i'm sure i've got an email from him already. >> all right steve, rick, stay with us. we want to expand this conversation from the data from today's fed meeting kickoff and that interstate decision tomorrow for more on that, we are joined by megan graper, who is global co-head of the syndicate team at barclays and kim harvey, who's professor of finance at duke university. rick and steve, of course, are here still with us why don't we go ahead and start with you, megan? what are you thinking after you see this number, after you start to try to get into the head of the feds, the feds, the feds people who are meeting, i should call them, what do you take away from this? >> i think steve's exactly right. i think today's data is just another illustration that we're entering a far more complicated phase of this cycle, with the market and policy makers, i think, clearly at odds over the path of rates. i think as we look to tomorrow, 25 is a fear gone conclusion,

but i think the fed has not only their credibility on the line, they're also fighting with this soft landing hope that i think is still going exceptionally strong we don't think powell blinks in his commentary tomorrow. i think he's going to look to buy optionality, i think he's going to reiterate sort of a willingness to maintain a more restrictive stance even as he acknowledges some of the accumulating evidence of a slowing economy. so i think he looks to downshift. i think he looks to do that without a reduction of this 5% terminal rate that they highlight at the last meeting. and i think he tries to do that without the further tightening or easing of financial conditions, i should say >> rick, let me jump to you real quickly, just as probably the most market-oriented person out of this grouping if that's the case, if powell doesn't blink tomorrow, if he stands pat, what's the market's reaction you think >> when you say, stand pat, doesn't blink tomorrow, what do

you mean comes in with a 25 or -- >> 25, but then he talks pretty tough about it, doesn't relax, doesn't let people think that they're going to let up anytime soon >> and i think he explicitly counters any expectation of a near-term dovish policy term >> you know, i don't think that the market is necessarily conforming to the question you asked. and i'll explain why when i watch a baseball game, i don't necessarily pay more attention to the strategy of the manager or the fact that the umpires are calling the game balls and strikes and plays. i look at the game for what it is and there are many investors that are looking at the markets and not spending an over amount of time trying to dissect and get in the head of fed powell or any of the other people on the fed, because in many ways, their behavior is counterintuitive and their past history is not successful, if your litmus test is making money. i think there are many investors out there that look at what's

going on in the market, they see inflation coming down, and they say, okay! let's be macro and easy about this what's really changed from preto post-covid really, two things over half the buildings in chicago are still less than 40% filled, okay and there's about 7 or 8 million people that for whatever reason aren't coming back to the workforce. now, if you can square thaose tw things, you'll probably find the answer to your question without a preponderance of time trying to get into powell's head. >> i love this rick, you just laid out what the market is saying every day when they ignore what the fed does, ignore what jay powell and company have to say, they're looking through it and looking at their own data, and kam, maybe that's the next question we talk about how the fed is data dependent, but it's dependent on different data than the market and a lot of market participants are watching. >> well, actually, i think that they look at the regular data, so obviously, they'll look at

today's announcement but, my opinion is that -- i like what steve said about compensating for your earlier mistake, but i think that they're compensating for the earlier mistake of being so late, calling inflation transitory, with another mistake. so if you look at the data, if you look at the cpi data, there's no inflation over the last six months. if you look at money supply, which was a major driver of inflation, it is down 1.3% into the first year over year decline since 1938 so what i am worried about is the continual push, even of 25 basis points, in my opinion, the market has got comfortable with 25, as the least-worst scenario. in my opinion, the fed should stand down the inflation, i think, is under control. there could be idiosyncratic inflation, but the main thing of

raising the rates, cooling the housing market, that's job done and it's time to stand down. >> wow >> that's a question -- >> yeah, steve, do you want to respond? >> i want to ask cam, how much crow do you want fed chair powell to eat at the upcoming press conference let me explain i mean, he has staked out a world in which the inflation dynamic is linked to the jobs dynamic. and you have not had very much loosening up of thejobs market so, he cannot make a change without saying that he was either wrong about it prior dynamic -- he would have to make a major reversal he does not have the data in hand to make that change, based upon the prior criteria that he made >> so this -- think about what the objective is so the objective is not to save face the objective is to do the right thing for the economy. >> i agree >> and we do not want to drive

the economy into recession or a hard landing so the data is fairly clear, it's time to stand down. the alternative is to keep on hiking the rates and push us into recession and i don't think anybody wants recession. recession is bad or the economy is bad for families, so i think that this is about doing the right thing for the economy and not worrying about -- >> if you ask central bankers around the globe if they would mind or are theylooking forwar to a recession to impede and slow dramaticallysome of these pricing pressures, i think we would all be surprised at the answer for many of these central bankers is going to be "yes" so, listen, i agree with campbell, but on the other hand, i also agree that part of the game plan here is to push into a recession. and i think chairman powell and others have pretty much said that >> i completely agree, rick. i think the fear that they pivot too soon and that causes the economy to overheat is

overshadowing here and at barclays, we're of a view that a recession is a very deliberate and intentional second-half policy implication of a fed that has said that they're going to be focused on 2% inflation we've already seen that play out in the rates and the yield curve. i think we've seen u.s. manufacturing telling us a very similar story. the one exception is looking into credit, where, you know, we're only pricing in maybe a 25 to 30% price of a recession. but inevitably, i think that catches up so, steve, is joe lavorgna right. i called him a looney tune earlier, not knowing who he was, who made this guess that we would be looking at 2% inflation this year. he's the only one of the 34 you surveyed who said that is he right in this scenario >> you know, i'm going to -- in a second, i'm just going to give cam the floor, because i don't have my numbers in front of me, but three-month annualized inflation, cam, even on the pce level is running down near 2%.

and the fault the fed has made, and i think kam is on to this really interesting idea. they've created this dynamic where job growth is going to create or push inflation down the road, but the data has gone the other way, and what you're hearing in this conversation is the market's consternation, expressed here in words, expressed in the market in pricing, with what is the fed looking at when it comes to inflation. kam, are you looking at those three-month annualized rates, which to me are the real drivers at what the markets are looking at and the drivers of the pricing in the fixed include markets. >> we know that the fed likes the pce. i'm looking at the cpi, which is often the most relevant for customers. and over the last six months, there was essentially no inflation. and if you think about the key component of the cpi and for the pce is housing and we've seen a softening in housing demand, starts, prices

and that will work its way through the cpi. so i think that we're on the right track. and i fear that we'll have this self-inflicted wound by continuing to hike to basically live the ghost of arthur burns from nixon's time. so this is not -- it's so fundamentally different than the early '70s and this compensation for the earlier mistake being tougher, i really think we're setting up for a recession that we don't need why do we need recession it doesn't make any sense? >> yeah, but at the same time -- >> becky, three-month annualized inflation, three-month annualized inflation on the pce level, 2.1%, on the core level, 2.9% on that level, the fed could declare victory and go home. >> can i just take my own survey from the four of you is there anybody here who thinks that the fed should do anything other than just wait at this point?

because that's what it sounded like from the four of you? >> i think it's -- >> megan >> i think it's three consecutive 25 basis point moves. i think 25 is -- >> you think that's what they'll do is that what you think they should do? >> i do think it's what they should do. i think there's even some debate whether they should take the pain up-front and then pause i think the bigger concern i have is the market expecting a near-term cutting pattern to start playing out in the summer months to me, that feels premature. i think they need to sit back and see some real confidence and clear data points that are suggestive of them getting closer to that 2% injury i think we need to be, you know, the employment report is a meaningful indicator of where the direction of their policy impact has been made so the impinge of the factors to me says it's premature for them to do anything but to continue to go. i do think at a more measured pace and we do think we get cuts, but we think they're in the tail end

of the year, not the summer, where the market is currently pricing that in. >> kim, i have a really important question for you before you go. when i introduced you at the beginning, i said that you were a professor of finance at duke university i did not say the name of the business school, because it's so dangerous, i could mispronounce it wrong i think it's fuqua, but i've mispronounced it in terrible ways in the past and now i'm scarred for life you tell me. it is fuqua, right >> it is fuqua >> thank you think about it, folks, you think about how you might mispronounce that cam, thank you, megan, rick, steve, breewe appreciate it >> thank you coming up, not mispronouncing it, jim cramer's first take on the trading day ahead. take a look at futures they've come back quite a bit right now. we're in the green after living in the red for most of the morning. a reminder, you can get the best of "squawk box" on our daily podcast.

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want to get down to the new york stock exchange. so many different earnings reports to go over with you, jim. i don't know which one you want to pick out. we talked about exxon, we saw darren woods earlier i don't know if that's the one that --

>> that was fabulous -- >> get your fancy pfizer, you name it. >> i got dr. boarla later. and you know, they've got to make some more money off of what they made, obviously haven't done that yet. i want to talk u.p.s- this is le th programmatic programmatic chaind chat gpt ups looked very bad, and based on absolutely almost nothing, the stock reversed and went up very big there was nothing in the release that made me feel like it should go up. but people first looked at it and they didn't like it, and then they changed their mind, and that may be the course of this earnings period i think gm is good i have mary barr on tonight. thank you for mentioning it. who knows? it could be bad. i think people have to listen to these conference calls and make judgments. the fact that ups can switch like that is daunting to me. it says a lot of the companies that reported numbers that we don't like may end up being up so let's be a little bit more

circumspect because we bury ups at quarter after six and we resurrected it at quarter after seven. you know, andrew, that's not the way you should be thinking about stocks that's chat gpt decidingto buy and then deciding to sell. >> weigh this. a little bit of kres currents and maybe expected what we're seeing out of the earnings and we've got jay powell tomorrow. the question is what you think he's really going to say about all of this? >> i still think he's going to say we have no cap in page inflation ever we just don't. he's not a win on wage inflation. >> he says that. you tell me how the market takes that i think i know. >> i think that all the big joke stocks that have gone up this month -- i use joke liberally. a lot of the stuff that you and i would regard as being without real substance will give back their gains and go back to

believing in like the mighty dow and not the ones going up. i think a lot of companies will be like the stock of lucid which was looking up 10% and finished down i would be careful if you're in a stock that's moved up a lot because of selling, relenting and going higher and you think it's better, jay powell is not in your camp. he's just not with you. >> then the question is -- look, i think some of the stocks that have actually moved and maybe are officially moved, they're going to get taken down. but the other question is whether everybody gets taken down >> no, no. the fact that he is against speculation, and the fact that he doesn't like wage inflation means we're going to have the value of good companies will b preserved. companies that have a dividend, they buy back, they make things and they're valued reasonably. they will come and shine again the jump that's gone up is going to go back down. i don't think people believe that because we have a lot of people who came back into the

market as soon as they allowed the high growth stocks that don't make any money are doing well a test case today is spotify that was a good quarter. they're not doing good on a cash flow basis if spotify is up really big, that would be the one that will be the test case tomorrow because they're not making any money. i still believe in companies that make money. i'm not being facetious. >> jim cramer, we'll see you in just a couple minutes. always great to get your quick and early perspective. "squawk box" coming right back with everything you need to know ahead of the opening bell. a reminder, you don't want to miss it, mary barra tonight on "mad money." [music playing] ♪ imagine something of your very own. ♪ ♪ something you can have and hold. ♪ ♪ i'd build a road in gold just to have some dreaming, ♪

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we're just over a half hour away from the opening bell futures are near their highs of the premarket session. they were down actually most of the morning. joining us is eric khan nknutzo from newberg and berman. i don't know if you heard what jim and i were talking about you look at ups, gm on one side, pfizer on the other. the crosscurrents are everywhere where are you? >> we would agree with what jim cramer was highlighting, that the markets have gotten ahead of

themselves our view remains that growth is going to slow, that recession risk remains at the same time, the fed and other central banks need to keep financial conditions tight the fed has observed that financial conditions have actually loosened since october and hiked since then our view is that the fed is going to keep at it. they're going to raise two, maybe three more times and keep rates where they are through the year, unlike what the bond market thinks. as you start seeing earnings slow, there's more trouble ahead, more volatility ahead for equity markets. >> okay. i think the question is, is it just the high flyers that we've seen rocket up even the past couple weeks that get taken down if your assumption is right, or does it take everybody with it >> the pipeline is that the overall market should decline from here.

you already see earnings expectations coming down 30 a share this year to 225. we think those continue to come lower. valuations at 18 times at these interest rate levels are a little rich. you won't get help on the valuation side, you might get some pressure there -- >> eric, are you sitting in cash waiting for some moment to happen timing has always been a tough business to be in. is there some other trade or other investment that you think is more valuable right now >> we do like cash cash for the first time in 15 years is a valid allocation choice at 4.5% we like short duration fixed income, short duration high yield, short duration emerging market we're beginning to add exposure in emerging market equity. if we get better growth than expected with tighter financial conditions, em should do relatively better.

they're benefiting with china reopening. we're under weight at the dollar we like commodities -- >> what do you do about big tech i've been asking it all morning. i think there's a lot of folks who have been holding on holding and hoping and waiting for things to turn, and the question is, at some point do you give up the ghost? at some point do you double time >> there's going to be a time for those stocks, but it's not that we think the rates remain high, as inflation is structurally higher invest ter flow, a dollar of earnings, a dollar of income now versus a dollar in the future. it means the big growers, the long duration stocks will be less attractive for some time to come relative to quality value, quality dividend yielding, lower beta stocks. >> fair enough eric, thank you for joining us this morning on what has been a very busy day, becky, giving all the earnings reports we've got of course, the fed coming up

later today and tomorrow >> you betcha. what did we have six big earnings reports, three of them dow components, and then you've got that measurement of the employment cost index that was up 1% versus the 1.1% estimate all of that adds up to us being able to hand things over with the dow indicated up by 75 i guess that does it for us today. we'll see you back here tomorrow right now it is time for "squawk on the street. andrew, see you later. good tuesday morning welcome to "squawk on the street." i'm carl can't nilla with jim cramer and david faber final day of january, s&p enjoying its best january in about four years as the earnings from industrial giants roll in q4 employment costs soften a bit and turned futures green as the fed map begins today corporate earnings and a gauge of the economy mcdonald's, cat,