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, pfizer, gm

crossing the tape. we'll break down the numbers. >> exxon is smashing records, a $56 billion profit for 2022. ceo darren woods pushing back against white house criticism saying it needs to get its facts straight the s&p is headed for its best month since 2019 futures this morning, a bit muted as investors await what we're going to hear from the fed. let's get to the earnings parade jim, i heard you talking ups with andrew. is that the most important name at the moment? >> i think it shows you the difficulty of -- on a day with so many earnings, figure out what the right direction is ups reports a computer-generated line which says the revenues were light then you read the release, and you realize, they're doing better than we thought, and that revenue line is not dispositive. then the stock goes from being down 2 to 3, to being up 5

that's really the tale of this particular tape as people re-evaluate and realize they're doing a pretty good job. that's going to be the whole thing. gm reports and it's instantly good we might hear the comes call i don't know, i've got mary barra. i urge people to recognize because things are so jumbled today, david, you could be incredibly wrong, and wrong, by the way, on the negative side. ups was good, even though you look at the lines: there were lines you didn't like. sum total, in tow at that time you guess was good. >> was better-than-expected which is important they also did raise the dividend importantly i think how did it compare to fedex of course, the market does take note of fedex and has attributed some of the faults there, assuming ups would find a similar fate that hasn't really been the

case >> no, that's a good point fedex did have a bad quarter gm has labor negotiations this year, but i think the important thing -- >> ups has -- >> ups, yes. i think what's important is when you look at some of these companies, whether gm or ups, you do feel they have costs in mind we had that employment cost deceleration today i still don't think it matters that much, carl, because it's still above where it was these are companies you make a snap judgment on, and the snap judgment could be wrong. i know i -- they said e-commerce was at 16% of the total of retail before the pandemic, went to 24% it's now down to 22% ups is doing pretty well given the fact that 22% is ecom. i found that people were, as david said, worried about a

complete horror show they didn't get a complete horror show and the stock went higher maybe in a less buoyant market, it would do nothing. >> how are we thinking of them, assuming that's true, about caterpillar, their first miss in 11 quarters? >> i'm saying it's not a miss. it's just not a miss i think when you add back a number of things and you do have, of course, an unfortunate huge dollar issue, but i found there were a lot of things to like about caterpillar, and if you go back and look at line by line, you'll see that, if you add back this one-time charge, cat sales were up 20%. 2023 they predict better than 2022 fourth quarter up 20%. i think it's a great quarter being treated badly, and it will reverge. >> revenue was ahead >> it will reverse the stock being down 7 the instant it came out, i was in shock someone could figure it out so quickly

we know caterpillar, i was going to sit down and do the work and i realize, david, what the hell am i doing the work for? the machines have done the work for me it's down seven. i speak to the company and do some work, it's a real quarter the next thing you know, it's down a dollar. am i a magician? no >> stupid people. >> not even stupid chat epg -- >> the algorithms to your point move quickly i have no idea. >> all i can tell you, if you actually have people at cat and t they do things and make stuff and it's more important than stupid machines. this is a good quarter you have to x out the farm people will say why did i sell caterpillar? >> we should always make the point that while you do see

these trades, it's not on a lot of volume. >> was it 31 cent beat versus fact set a new thing. 31 scent beat versus fact set, 25 versus refinitiv. now beat not one, but two. how about faber? >> i didn't come in with an estimate i haven't expanded my universe of coverage -- >> this is one giant joke, but right now much better than fact set and better than refinitiv. that's everything yes we need to know about the greatest american machinery company. >> there's a ton on gm, a double beat guiding strong on adjusted eps, not going to match the tesla price cuts not planning any layoffs includes about $2 billion in even without bonus. >> adam jonas came out with a

nine-page opinion on it. he's like the supreme court. he does point out -- i make some jokes but he does interesting work committed ev and av, amazing they can do both double revenues by 2030. i have mary barra on >> other characterize they bet the company on ev over the next seven to ten years. >> ev and also -- av they're all over the place in san francisco. they're spending a fortune on these. >> automated vehicles. >> right now it looks positive right now. >> think smart or not to not try to match the tesla price cuts? ford did come down in price on certain models tesla, as we know. >> on certain models, not on everything, and not on the f-150. >> understood. musk said during the call that

they're starting to see in increased demand as a result of those price cuts they are by far the market share leader. >> they said they could raise it again. >> gm chooses not to compete. >> same with vw today. >> i think that -- i think farley from ford, he's not making any cars that they'll lose money on. he's not going to seed this area back -- he's trying to take share from us. he wants to beat his own numbers. he's going for personal best as opposed to personal against musk i think he's doing a good job. but at the same time the stock doesn't say so. >> no. these are important times. you can't -- the loyalty of a customer for a car for a model can last for decades you get somebody in your universe, not to mention your ecosystem. >> the f-150 has tremendous pull right through.

there's no sign the order book has diminished they haven't ordered a book the way tesla has. ma look, the market doesn't like ford i think ford is a pitiful helpless giant >> we've long said by some measures the f-150 is worth more in enterprise value -- >> oh, my god, yes the super duty, the f 350, had to retired -- >> had to retire yours, why is that >> 2008, rusted out. my friend michael haley, the one i bought it for -- >> done. zblit's done. >> is that sad for you >> no, no. we got it used >> you sound -- >> you hate to see a super duty -- >> 14--year-old car or truck >> rusted out, i didn't expect

that david, like he knows the difference between a super duty and something -- babies, you know. >> it's true he knows i can tell you all about subway cars, though. >> there you go. let's go there. >> i like the canadian ones better. >> double downgrade, people aren't getting a new heart procedure as much. >> how about mcdonald's, double beat, comps up 12-6, streets looking for eight. >> the stock was down. this is a good example mcdonald's, you talk to them and they're obviously -- you have to admit they're about as professional as you ever get they're not belichick. they're more andy reid because they're not gruff and angry. it was a really good quarter, and the market immediately sends it down. i don't know what people are looking for. what were they looking forth >> there was a comment about cost pressures >> true. >> digital 35% of sales in their top six markets. u.s. comps up 10-3

thank you mcrib. interesting note this morning, they have added since covid, 20 billion in system sales that's with closing 800 russian restaurants. >> how can you not love that russia was a big part. the stock is down five i venture to say, let's listen to the conference call maybe that's an overreaction because the actual numbers to me seem quite good. russia is such a wildcard. all over the place last night while prlpool report. that don't even know what's happening. 'n sync rater they bought from emerson. sold a large piece of the business and the stock is up three. now it's flat. mcdonald's down five, that may be an opportunity that we hear them, but people don't want to -- they don't want to -- they just want to trade >> you talk about russia it also figured into mobiles

earnings obviously the closure of sock land and removing that supply. the company says, hey, we're still up in terms of production. upstream earnings for 2022, 36.5 billion. midterm yen, of copersonal yen, 560,000 or more barrels a day. guiana, 360,000 or more barrels a day, starting up mozammozambi >> i didn't go there there i am on the platform in guiana i'm usually the shorter guy. on the right there with my really funny helmet. >> safety first. >> safety always first >> guiana, they can get up to a billion barrels a day. >> did you hear what darren wood

said i heard a lot of what darren wood said. i've spoken with him a lot. >> he said the president was ill-advised. >> we should take a listen the white house fired back again. chevron recently criticizing buybacks you have a company that makes $36 billion this year you might imagine. >> do we have the quote that says the president doesn't know what he's doing. >> listen to darren woods fire back against the white house. >> the white house needs to get the facts straight we've invested more than any of our other peers. as i said earlier, when times were toughest we were out there investing and investing in a level that exceeded anybody else in our industry. so we've done the hard work. we've made the investments we had a keen focus on making sure that we had the production there and products available for society when it was needed when the call came, we answered it we had spent that money, taken criticism at the time and grew our production and are basically

providing more products today because of those investments so i think we're doing what the white house, in essence, is asking us to do. >> of course, low carbon solutions becomes an even more of a focus this year and years ahead in terms of what they're spending benefits from the inflation reduction act, potentially a real tailwind for them decisions to deploy more capital. >> methane >> given all that and you've been to everywhere but mozambique. >> i haven't been everywhere >> let me ask, does the president need to get his facts straight >> yes. >> he does >> yes >> yeah. >> [ whistle ]. >> it's politics it's what plays. >> okay. are you happy now? you heard what you wanted to hear >> yes i was hoping you'd say that.

>> it's a political winner i think is what the white house is thinking. >> they did everything they're supposed to do. >> it is they are putting more money into production listen, there's always criticism that is worth being leveled. there is still questions, key questions as to this company's ability to navigate the next 10, 15, 20 years as the main commodity they produce becomes less in demand over time, and what kind of real returns they can get from carbon capture and things of that nature, those are key questions. i think it's interesting on the other side, they are going to benefit from the ira there's no doubt >> absolutely. >> particularly as one of the key suppliers with deep pockets so when they go to somebody and say we will do a project for you, you're not going to worry whether or not they're going to be there five years from now. >> one of the things that's incredible, the whole country has benefited, the whole world, from natural gas prices.

when natural gas was at 7-8, all we did was talk about how it was going to break the bank of the american consumer. >> the worst month fortu nat gas in 22 years. >> that's a win for jay powell >> by the way, even more important for europe, you heard woods talking about europe as well that whole energy transition and the questions -- a lot of key questions there about some of the decisions that have been made in terms of how they source their energy in europe not really that smart. they benefited from this -- >> how about fran ce -- >> macron brought up the idea of giving them planes they haven't said they're going to >> i have to rap >> when have you ever wrapped? we've got a couple months for that. >> i'm in a wrap mood. >> we'll take a look at futures. a closer look at oil on the other side as well as crude gets

to 76.5, lowest since january 11th with eel talk more about the employment cost number in a moment what that means for e thfed on this meeting that goes today and tomorrow back in a moment performers toda, so you can have more success tomorrow. ♪ one thing leads to another, yeah, yeah ♪ good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back. we all have a purpose in life - a “why.” no matter your purpose, at pnc private bank we will work with you every step of the way

to help you achieve it. so let us focus on the how. just tell us - what's your why?

nasdaq 100 up almost 9% for the month led by lucid, up 69% although today morgan stanley says really nice car, but already selling at a ls.os

under weight of the $5.00 target we'll talk about some of those names coming up. don't go anywhere. the carbon intensity of the fuels that keep things moving. today, we're producing renewable diesel that can be used in existing diesel tanks. and we're committed to increasing our renewable fuels production. because as we work toward a lower carbon future, it's only human to keep moving forward.

eight minutes before the opening bell let's check in with jim on a mad dash here. n xpi. >> i'm developing a theme here i'm sorry if i'm running it out there as being lunacy. nxpi reported numbers last night. the numbers look like -- things are still weak, but auto was terrific i'm thinking, wow, auto is terrific which is their main thing. how can it be so weak? the answer is it's not that weak auto was very good the stock was down nine last

night. now it's unchanged, and this just shows you what i'm saying, if you react with the perk, but it's down nine, without even having a conference call and you read it over and read the dak, you realize auto is good, then maybe you shouldn't be a seller. maybe you should even be a buyer. if a semi company says things are weaker and then reports a good number, you might want to think that's contrary to what you expected this was contrary to what i expected which was a bad number. we didn't get it nxp is a good company. >> how does it connect to the overall view on auto we've been talking about gm, ford and obviously tesla >> it looks like the supply chain problems that were affecting the autos have run their course that's the theme of this i kind of got that from texas instruments, too but if you are -- and the

internet of things, too. if you're in pcs, no hasn't improved. auto has improved because of the supply chain getting together. pc has not improved. nxpi doesn't do pcs. >> although internet of things, we're still waiting for a lot of the applications there i talked to your good friend john stankey on 5g -- >> you're such a -- chat gpt will actually produce a lot of internet of things remember, that's an nvidia-based product. they get a little bit every time dr. jenson wong, professor wong, i call him da vinci. he has other guys involved that i computing and gaining, you're selling it ahead of what could be the bonanza of chat gpt the opening bell is a little more than five minutes away. by the way, don't forget you can

catch us any time and anywhere by listening to and following "squawk on the street" opening bell podcast

the market in the space of really six, seven months has gone to corporate profits will be up 12% this year, inflation coming down to 2%. the fed may be easing at the end of the year. that's pretty much nirvana if you're a bull. >> that's reflouned short seller jim chanos on fast money offering his take on the markets. a lot of that thesis he doesn't necessarily believe. >> yes, the yield curve says that can happen. most people who i know are saying we have bad wage inflation. powell has said we're going to have to stay longer higher now we have commodities coming back up. copper coming back up, lumber is up big and getting positive stories about lumber

so i think the job is a little harder we've got nice number today about wages. i think that the pan loss scenario is a straw man. i don't know anybody that feels that way other than people who don't deserve to be in the business. >> they can't guard the terminal rate much higher, some would argue. you look at what mortgage rates have done, maybe they care about mortgages more than anything >> if they do, pulte is going to open at a high they did a great conference call we don't know whether -- we don't know what new orders to slot we haven't gotten a declaration from powell about the housing market one thing is for certain, if you dump the treasuries, maybe you can change the yield curve people are buying more homes [ applause ] >> home prices by the way,

case-shiller softening for five straight months. something to keep an eye on. let's get the opening bell at the cnbc exchange. [ bell ringing ] . >> among the big earnings, pfizer is one of them. beat revenue in line -- they do see revenue -- >> i think that's true i think pfizer is a bit of a wildcard that's why i have dr. bore low on tonight they've got a huge amount of money that came in the whole wrap against pfizer, a patent clip as they call it. i thought, well, they have all this money and they will solve that, but they can't -- david, kay can't solve it overnight they can't just start buying

they bought their tech from bio haven. >> they did make acquisitions, similar that big pharma likes to make, perhaps taking less risk and paying a bigger premium for smaller correspondence that have something close to, if not already through the approval pro process. they've got a lot more the windfall, so to speak, from the vaccine and paxlovid is enormous. >> next year won't be as good. >> no. >> future pe went from seven to ten. overnight you had that situation -- it looked a little cheaper yesterday and today. >> like a lot of pharma, it has had a very poor start to the year as opposed to obviously many of the companies we've been talking about, stocks we've been talking about that were bad last year merck in particular had a great year last year in the stock market pfizer less so, but still strong. >> look, this is another one where i say are you really just going to -- can't wait to hear

what bourla has? maybe they've got things up their sleeve it's about time that people realize this is a company with a lot of fire power. the piece we've seen about umira, you would think ab vee is down even more it's been down a lot pfizer down a lot. i'm looking for opportunity for those of us who think the fed is not done and you want to buy a nice blue-chip with a good yield while you wait for the fed to finish chanes is definitely right there are people who think they have to cut by the end of the year those are not sensible people. those are people that don't listen to anything the fed says. >> the average time between the last take and the first cut is nine months. that would put you somewhere in the back half of the year. >> that's like saying the eagles after they win the super bowl will come back hard, they'll be in the playoffs, but they might

get knocked out in the wildcard. you can't make this up, that people think they can predict. they do. >> yeah, they do. >> do you think they have their facts straight >> i don't know. >> went back to his more mercurial. >> yes i wasn't going to give you a yes-no answer there. >> i hope the president doesn't mind he's not watching. he's not watching tv like previous president >> speaking of the president, the white house is going to end the public health covid emergency as of may, to your point about fieszpfizer and thed business >> pfizer took in -- the amount of money they took in over these vaccines is gigantic the market is valuing it at nothing. >> sort of saying that was a one-time -- it's not clear that's going to be the case. paxlovid will sell for years and years to come.

>> you can't just say we'll take that money, we're going to buy regeneron and we're going to combine the two and that's our game plan. you can't do that. w will you give the guy like five minutes. give dr. bourla five minutes he bought the migraine drug. i think it will be one of the biggest -- >> how about mcdonald's? >> spotify is up almost 10%, 9.5% the company did have monthly average user growth, 33 million net additions, 20% above last year $4 489 million. ten million above guidance total revenue up 18% year over year still losing presentity of money.

>> the cash flow was bad. >> cash flow was negative. >> that's called bad >> part of the plan -- i understand it's part of the plan to spend a lot of money and gain as much share as they possibly can. you know the strategy. >> we don't like that typically. >> at least they gain more users than people part. >> they see q1 as the low point for margins, 5 million podcasts, not going to revamp the podcast business. >> i'm playing devil's advocate to your incredibly rosey analysis >> compared to some companies losing money. >> by the way, take a look at spotify and let's do a three-year it's not as though it's always been -- >> it's been down. >> like a lot of companies, they built up during the pandemic, hired a lot of people. you can see what that's done

that's not much over three years. >> pfizer is down on amazing numbers because people feel that's one time only then look at spotify they believe they're coming back and that people are very trusting that the free cash flow numbers could be up for the year they're trusting there's just a lot of people making snap decisions and they're wrong. nxp. >> yeah, you mentioned them. and caterpillar. >> we're buying caterpillar for the trust. it's just wrong. >> i want to come back to a name we've also talked about a lot, looking at the three-year performance. it's a name my buddy knows oh so well salesforce, it's worth coming back to again. this fight is far from over. salesforce on friday obviously announcing three new directors, a board refreshed to a certain extent, is the way they're phrasing it with arnold donald and sachin mehra and mason

morfit joining the board starboard is still there, and in speaking to people around this over the last day or so, it's clear that this is far from over while there may be constructive talks between elliott and marc benioff yet to come, it does appear from elliott's perspective, best i can determine at this point, just because you refresh the board and announce cost cuts doesn't mean they're satisfied, or, by the way, it doesn't mean a lot of the longer term shareholders are satisfied. it begs the question, which we don't have an answer to, as to whether or not there will be a big proxy fight. elliott hasn't waged a proxy fight since 2017 they did nominate for the board in cardinal.

they did nominate for the board at twitter i think that was after -- they settled obviously in both of those. my point is, it's been a while since they've gone to a fight. will they here unclear. what is clear is that so far not enough not nearly enough. it would appear that they may want more board members who have more of a technology experience and expertise. they may want a very specific plan -- here i'm getting different takes in terms of how they see benioff's future, perhaps and how, for example, starboard sees it. there are those who believe he can be a very constructive force here in terms of resetting, getting in a plan that says we will get to 30 or 35% operating margins. we will do what needs to be done, and then i will exit with a successor in mind. but elliott may have a different plan unclear, but it's not as certain that they are as much behind mr. benioff, perhaps, as some other

shareholders all of which is simply to say february 12th is when the nominating window opens. this thing is far from over. what's your take >> i agree with you on everything to be fair, remember they made marc benioff,the ceo made thos changes with the board before elliott got involved >> just gotten involved. >> i think had he consulted with elliott, there may have been other people, certain lip elliott would rather have people well schooled in technology and they don't feel just because you're on the board of microsoft that that's enough the question for me, david, they want marc to stay. >> by the way, i don't know the answer to that >> we don't know >> executive chairman or something. >> his imprint on the company is so large his influence in the board room is so strong, there are those who make the argument that you need this board to be focused on the performance of the company it hasn't been good, in their

opinion, over a period of time, and the argument is he's such a large presence in so many ways, it's impossible -- >> they all said they love the product. look, the markets had given it a very shrinking -- which is not unlike what they had for many companies in the enterprise software business. >> you think they can get to 35% operating margins with 15% revenue growth >> i think it's doable i think we'll hear from elliott that the way they put together tableau, how much they paid for slack, it really caused some problems, and those have to be dealt with i don't know how, without talking to martin sitting down do you come up with a plan >> elliott is certainly not communicating directly, but my sense is there has not been a lot of talks yet it's still to come. >> let's step back

david, i need you to tell me whether this is the most number of actors you've ever seen. >> i've never seen four. value act started by jeff smith in the fall with us on cnbc when he announced that position at salesforce and then elliott. elliott the largest in terms of the dollar amount of their ownership -- >> i guess people are buying it at 140 to me when you have this many activists, it says stay tuned. i started liking salesforce at $8.00 because i thought the product was great, and everybody says the product is great. i think there's just a question of attention to detail, whether there's just too many people -- >> right listen, add another potential activist fight, still. don't want people to believe that wrapped it up on friday with that announcement it did not

we've got disney and pelts we've got salesforce and elliott. >> caterpillar below call, china still not coming back. they are saying there's still chip availability problems again, if you study cat, they're not saying anything that's different, but the stock is up a great deal and it's in free fall now. maybe that -- this is the opportunity you've been waiting for, this is the break in caterpillar stock. >> down some 4%. one of the worst laggards of the s&p. speaking of chip availability. tomorrow don't miss our interview with amd's lisa su stock not trading too badly despite samsung's results where the chip segment profit was down 90%. look at bonds in the wake of the performance number and softening house value number out of

case-shiller be right back.

we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i can't believe they're just sitting up there! sitting on all this cash. if you own a life insurance policy of $100,000 or more, you can sell all or part of it to coventry. even a term policy. for cash, or a combination of cash and coverage, with no future premiums. someone needs to tell them, that they're

sitting on a goldmine, and you have no idea! hey, guys! you're sitting on a goldmine! come on, guys! do you hear that? i don't hear anything anymore. find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

welcome back still have consumer confidence to go. this is chicago pmi from mni expecting a number of 45.0 for january, 44.3. a bit of a disappointment. there is a revision from last month's 44.9 up to 45.1. 44.3 is the lightest since november when we were at 37.9. quite a distance from 44.3 37.9 was the lowest level since june of 2020 even though we are sub 50 and we haven't been above 50 since august, it has come in at a level that is not the worst level but certainly does underscore the notion that when

it comes to chicago manufacturing, things are a bit under where they need to be to get back intexnsn deo paiomo "squawk on the street" will return after a short break the first time your sales reached 100k was also the first time you hit this note... ( screams in joy) save 20% with the lowest transaction fees and keep more of what you make. with a partner that always puts you first. godaddy. tools and support for every small business first.

(woman 1) i just switched to verizon business unlimited. it's just right for my little business. with a partner that always puts you first. unlimited premium data. unlimited hotspot data. (woman 2) you know it's from the most reliable 5g network in america? (vo) when it comes to your business, not all bars are created equal. so switch to verizon business unlimited today. 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.

nike claims it's suffered irreparable injury from the sale of lulu footwear nike says three of the patents involve textiles and others including one addressing how the footwear will perform once pressure is applied. we don't see these things often go all the way. >> no. nike, they're like ten, they come in peace, to see them do this is amazing. i look at lululemon which had a quarter that was so-so but calvin mcdonald, on the board of disney with mark barger, can't they just get along? >> we'll see the other interesting thing about nike, this thing they teased with tiffany, which they said they would give more

details on later you're talking about two companies that, arguably, target the higher end. >> lvmh. nike coming back in china. caterpillar said they're not coming back that much in china difference between a shoe and a machine. lululemon has had a bad run here, and this does not help maybe there's some people who didn't know they had footwear and they have footwear, let me check it out no david, these are companies, nike, lululemon, they're like the new generation companies. >> they are. >> owe hannah's marc benioff being charged too. >> they are. >> you never can tell the real impact of a lawsuit on stock prices >> some of these are [ inaudible ]. >> lawyers. >> i like lulu, but you get

e-mails every 30 seconds about something they're discounting. >> lulu? >> we'll talk about it. >> i don't get any. >> you have to shop -- >> i have family members who do. i have two ladies in my family who like to shop there. >> he's thinking google is in his head, but they're everywhere else project nike and project perot justice found out. you know i bet google is happy that memo was written. >> they weren't. >> holding steady s&p up 11. let's get to bob pisani. >> good morning. the outlaw josey whales. i love the clint eastwood reference jim threw in positive all morning on the s&p because the eci number came in still too high but better than expected, at least inflation is moving in the right direction. take a look at the sectors a mixed picture at the open. you want to look at the stuff that moves every day ark innovation, vanhe ech

arc is up positive pulte and gm helped. energy down, but that's kind of oil i think. oil is 77, just topped 78, down three days in a he row. the earnings all over the place as you can see the numbers are okay gm great, ups doing great. whirlpool was interesting in their guidance we'll get to that in a minute. cat and exxon weighing on things right now. the important thing, i think, is the revenues you hear a lot about raising prices, and that's true, some are doing a lot better, but not all of them. cat, gm, marathon, mcdonald's, pulte, their earnings were -- their revenues were above expectations and below expectations, ups, exxon and whirlpool. look at the companies that reported we have about 30% of the s&p reporting. 65% reporting revenues above expectations that's not far from the average,

but the beat is very small they're not beating very much. this is the same with earnings too. they're not beating by very much 0.6% on revenue beat 2.5% is what we've been doing in the last year. the numbers are up, but they're not beating impressively here. as for where we are on the earnings situation, everybody's hiding in the second half. every single day, first quarter and second quarter earnings system keep coming down. you see 1.8 down, 2.3, every day these go lower the fourth quarter people holding on around 10% right now. if you want to see a good example of people hiding out in the second half of the year, did you see what whirlpool did they had an earnings beat and revenue miss look at the guidance 16 to $18. wow. the street's at $16, $16.19. you're talking about 12% above the guidanceoverall. that's pretty good here. how are they going to do that? they're expecting lower costs but expecting more importantly,

a demand recovery in the second half of the year in other words, this is based on a lot of hope in the second half of the year that suddenly demand will rematerialize we'll see. the point hiding out in the second half of the year. for the end of the month it's the january barometer and we're positive up 5% so far as goes january so goes the year the tendency for the january s&p performance to mirror the full-year performance. it has a decent track record and right now up close to 5% for the month. >> we'll cross our fingers thanks bob pisani jim and stop trading. >> two different buys on disney. goldman sachs, visiting key investors coming out positive and deutsche bank, saying listen it's going to work because they don't expect major strategy change why? because it's higher strategy it was executed poorly these are positive notes that actually say nothing

>> they report later next week. >> february 8th. >> saying hulu could work and not going to spin off espn mostly, someone really competent running the company and that's going to be very positive. you know, it - >> i think the other point is they don't expect them to retrench just to kids programming because fox's idea to begin with. >> look, i read these pieces i don't want to be facetious they're saying they're dealing with -- that he will deal with the cost cut -- he'll deal with cord cutting, deal with the different issues, the theme park of course, that's what we expect now they didn't bring him back to do nothing. they brought him back to right the ship, not just the disney cruise ships, but the ship itself. >> got it. >> so tonight, pfizer? >> pfizer and gm two unimportant topics. >> up 9%. >> let's find out what that's

about, david once again, the president, how is he on the facts when it comes to exxon >> i'm not going there i said it once we're done. >> you got the tape. >> you got it. >> no changing that. >> see you tonight, jim. "mad money." >> come in peace. >> when we come back we'll stay on top of today's earnings winners and losers with the dow up 18. .

good tuesday morning welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan and david faber live at post nine of the new york stock exchange a lot to process today, even though the tape's relatively flat a lot of industrial earnings, some important pieces of data and we're not done consumer confidence is out let's get to rick santelli. >> yeah. these are january reads from the conference board and do keep in mind we've already dabbled under 3.5% in a 10-year down to 3.48, it's bounced back. for january read on headline confidence, 107.1. now that is definitely less than expectations it's less sequentially than the

108.3 in the rearview mirror we're expecting a number much closer to 109, 110 that is actually the lightest number going back to -- i have to go back quite a ways. only since november of last year when it was 101.4. the present situation and expectations have not hit the wire here we go 77. are expectations, 150.9 is the present situation. there are revisions. 107.1 on the headline, 108.3 upgraded to 109 and 150.9, actually is much better number we haven't had a number in that camp since april that's the best number since april on present situation and 77.8, well, that is not necessarily a good number. it's sequentially following 83.4, so we could see that only one of the three is above its previous month and that was the

present situation. morgan, back to you. >> rick santelli, thank you. we are 30 minutes into the trading session. we will get to mcdonald's, to exxon mobile, to ups some of the others in a moment first, here are three big movers that we're watching this morning. spotify, those shares are jumping after subscriber growth topped analyst expectations with monthly active user net ads hitting $33 million, even as the company posted another quarterly loss after investing extensively in its podcast business. shares are up 8.5% whirlpool, also in the green, thanks to strong guidance for the year as that company plans for easing raw material costs and notes, quote, expected demand recovery during the second half of the year, one to watch as it is a housing proxy those shares are well, almost flat now finally, dow component caterpillar reporting quarterly sales rose 20% year over year, but higher input costs and currency headwinds weighed on profits. nonetheless, there's some noise around the eps and how that fits

in with system coming into this print. it seems like a beat the thing i would note about cat, you saw strong pricing going on for the better part of four years, record backlog growing again and 2023 expected to see both revenue and earnings growth, so as we do sort of try and read the tea leaves of the macro economic situation on a global basis, cat, despite a 5% drop, today, does seem to be hanging in there you are starting to see some more uncertain environment as we've heard from many companies but you are seeing some glimmers of hope in what is perhaps going to be a better 2023. >> was there something said on the call that has pressured the stock in particular? >> well, i think the one comment about weakness in china, heavy excavators was interesting dealer inventory back at historical range the most interesting line, was highest level of parts availability in the company's history. over at cat.

which sort of flies in the face of what we've heard lately. >> yeah. it's kind of interesting, too, right, guys. the fact that you are seeing a lot of cross-currents that we talk about every day in terms of the economic picture, the demand picture. we've got china reopening in the mix. you have upward revises overnight from the imf, for example, on the global outlook too. so a lot to parse through here and cat is a good example of that. >> meantime gm, wow, almost an 8% gain in a pretty flat tape after smashing system for the quarter. let's get to phil lebeau with his thoughts on the print. hey, phil. >> hey, carl it's not often you see gm popping 8% early in a session like this, but the reason is because you had strong q4 numbers and strong guidance for 2023 that's really the story for general motors they topped the estimate for q4, topped the estimates in terms of what to expect in 2023, and the

strong pricing outlook they are not seeing a drop-off in terms of what they're expecting to charge for their ice vehicles as well as their small but growing ev portfolio speaking of evs, they announced a deal where they are going to be taking a stake, 9.9% stake n lithium americas it's a $650 million investment together they will develop lithium production in nevada it's not going to happen right away take a look at lithium americas. they believe production will start in 2026, potentially they could get enough lithium out of the deposit out there in nevada to power 1 million evs annually. general motors understand the importance of this, especially with the new incentives for evs that are going to be in effect when you take a look at the ev market, keep in mind, what you're looking at here is that gm, i think they're at about 4% is where they ended last year, they have maintained that by 2025, they expect to pass tesla.

for some point of reference, tesla's 64% of the ev market back in the envelope math, i think there was 810,000 evs sold in the u.s so they're well in the 400, 450,000 evs in the u.s. sold are teslas and a small percentage are gm they're going to be ramping up production >> phil, the fact that we're seeing ford up another 3.5% today. we got price cuts for some ev models there yesterday we're getting earnings later in the week is the reason the shares are trading higher read through or in sympathy to gm and the fact that we did see such a strong report this morning? >> typically they go in tandem with gm. i mean, that's been the way for decades, gm and ford, tandem move in the same direction, although it can change every once thin a while the thing to keep in mind with the price cuts it's overstated by the broader market all evs

will face price cuts the mach-e the only vehicle at ford where they're cutting prices because the model y is the closest direct competitor and when you cut 20% off the model y when your forward you don't have a lot of choices. your mac-e much higher and that means that some of those mach-es are no longer profitable which is an important designation that ford estimated some will be profitable at the lower price, but not all of them. >> which leads to a key question, which is the cost advantage that tesla may have over gm and ford as they compete more fiercely. >> it's not a may, david. >> okay. a real cost advantage. >> you're hitting right on it. >> do gm and ford have the innovations they're going to need to be able to compete in the sense of bringing costs down so they can compete on price >> they believe that they can bring the costs down and be much

more competitive the question is can they get the costs of goods goods sold. can they get it down with their ev production ramping up to the same level of tesla. it's going to take a while it's going to take a long while. look at gm they're starting to ramp up three battery plants, one in northeast ohio, two more coming online later this year and next year and more battery plants in the future they're still in the early part of investing and getting to scale. by comparison, tesla already has a lot of that scale built in, and they're only starting to extract more savings and synergies out of that network. it's going to be hard for gm and ford to ultimately get their costs on the ev platforms as low as where they are for tesla. >> it kind of raises the question, phil r consumers going to respond to availability, price, or the reliability and scale of the charging network,

ni right? how much of that range anxiety are you going to insist upon when you go in to buy? are you going to make sure there's a network you can tap? >> all will be key in the future when they go to buy an electric vehicle, up until now, for the most part when you ask somebody, are you buying an electric vehicle, they will say i'm going to buy a tesla it still is essentially the kleenex brand of evs i've said that for some time we have not seen a model that has come that is as popular as the model 3 or y as popular, i'm talking about when you're at a starbucks having a cup of coffee, somebody says have you seen this? there hasn't been one yet. yes, there have been evs that have come out like the lightning, like the mach-e they're very nice and good vehicles nobody is knocking those vehicles are they generating the same level of buzz as the model 3 and y? nope that's going to be the challenge for everybody. at what point is there somebody

who can roll out a model that is as popular, getting as much buzz as a tesla model >> phil lebeau, on a big week for the autos, thanks. we'll talk in a while. mcdonald's beating on the top and bottom line thanks to higher menu prices, increased foot traffic at restaurants but warning short-term inflation could continue through the year. joining us today evercorp's david palmer has an outperform on mcd, target of 285. great to see you again when you're doing double digit comps and adding units, it seems likea pretty positive recipe. any idea why the stock is not responding today >> i think to some degree the company gave guidance about their units, the unit growth to some degree, people were hoping for more the other thing they're operating profit margin guidance was light. mid-40s, 45% the street is at 46.5 to 47, so they're talking about doing

things to make their franchisees more healthy in europe and that's going to be part of it. 150 million there. the profitability in the earnings are not going to be going up today, but the sales are very strong, and they definitely are doing a good job of gaining share virtually everywhere we see. >> explain to a lay person why you would be getting more aggressive on unit growth at this particular moment what is the rationale and strategy behind it >> they've been on pause for -- in units for a while, and to some degree they've gotten a lot of -- the reimaging under their belt at this point the asset base around the world is in great shape, and i think we can see that here in the united states. from here, you know, they've added 25% to each unit in sales in the last three years and about a million in the u.s. over the last ten years they feel like they're worthy and their franchisee cash flow is worthy and the way they're

going about it with smaller footprint units that will not need a half acre, more like a quarter acre, more drive-through centric and mobile order centric. they will be more productive on sales per square foot, and that will also help them be worthy of more units. >> in terms of that productive, more productive per square foot, walk me through the economics of focusing more heavily on drive-through and also focusing more on all of these digital investments which we're seeing the whole restaurant industry do right now amid a tight labor market. >> well, we're going to be learning more and more i think later this year. they're going to have an analyst day about the types of prototypes they'll be developing and ultimately what that will mean in percent unit growth. people are hoping this company can do from the mid 2s to towards 4% unit growth by the end of '24 to '25. that's the sort of metrics people are thinking. in the u.s. in the near term, they have mobile technology

they're excited about where they'll fire up your order as you're getting within three minutes of the store, and as you pull into that curbside, that will be a better, seamless experience than maybe you get in the drive-through during peak hours and in their test markets it's done very, very well. the company is excited about their terms of capacity from mobile order technology being refined and that's actually going to be competitive with peak hour drive-through which is a major unlock that's a type of stuff that they're working on in addition to grading and renovating the food and chicken, big mac and other things. >> david, looking at a one-year mcd is outpacing the s&p, outpacing wendy's, outpacing shake shack, but lagging qsr, restaurant brands. talk about the competitive fight. >> well, restaurant brands, gosh, i would say restaurant brands has brands that have been

under pressure by mcdonald's in north america. tim horton's canada, burger king in the u.s., and that business is now has to show itself to be a stabilizing market share player it looks like it's achieved that already with tim's and the recent momentum they're getting up there in canada burger king u.s., it's more on a bet come from here, patrick doyle joined that team that include many friends from dominos trying to affect the stabilization from burger king mcdonald's is the beast along with chick-fil-a in the u.s. gaining share. taco bell and yums gaining share, one of the reasons we like yum this year. >> interesting fight taking place and marketing dollars on the line thanks so much good to see you. >> thanks, carl. as we head to break, here's our road map for the rest of the hour ahead of another big fed meeting is a soft landing still in the cards? we've got more on what legendary

short seller jim chanos is calling nirvana for the bulls this hour. >> a deeper dive on exxon amid record profits for the company for the year. >> more on earnings movers you might have missed from ups to pfizer and nxp big show still aadhe [music - cover of blondie's “dreaming”] [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, ♪ ♪ dreaming is free. ♪ accenture, let there be change.

we all have a purpose in life - a “why.” no matter your purpose, at pnc private bank we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why?

exxon mobile shares up 1%

after the company posted almost $56 billion in full year profits. that's a record. the company never earned that much in its history. it would have been as much as $59 billion excluding certain items as well. let's see, total shareholder return 88%, return on capital 25%, the highest return on capital since 2012. cash flow $77 billion. these are huge numbers, numbers you kind of become accustomed to seeing with apple or alphabet or microsoft, so moving exxonmobil up there not in terms of its multiple value. one we focussed in our document this this summer on exxon mobile is low carbon solutions, the efforts they're making to reduce their footprint and make it a commercial business. darren woods in ap interview

earlier on "squawk box," indicated that there is an impact and a positive one in terms of their efforts there from the inflation reduction act. take a listen. >> i've said all along this is a tough market when you're trying to establish a carbon market and reduce emissions what that policy does and something we've talked about with governments around the world you have to kick-start that industry through incentives to support the investments that have to be made and they're very large investments. that's one of the things where we think we can bring some advantage. we've got the experience in making these large investments the technologies are in line with the capabilities we've built over time. the financial incentives weren't there, and the ira provides it there's a lot of work that needs to be done a lot of investments that have to be made and a lot of progress we've got to make in technology, but starting with policies that incentivize that work, i think is the right first step. >> so a lot more to come, of course they're at least sort of in

line, morgan, with the white house and the policy there that has been put forth through that bill, but, obviously, still at laggerheads on the issue of production darren woods saying the white house doesn't know what it's talking about. >> yeah. i think white house has to get its facts straight, quote, unquote. also noting that, you know, no apologies for the dividend we've paid he said in that interview too, and they're doing what the white house has asked the company to do. this idea, goes back to the conversation we're having last week around chevron in the midst of the 75 billion buyback and dividend by that company, it's not either or in terms of the investments given the breadth cash flow and the profits the companies have been reaping in the midst of ongoing investments, production increases, return to shareholders and ongoing to your point, ongoing focus and investments in technologies around clean carbon and emissions capture and everything else for the future. >> yeah.

and, obviously, record permian production diana, where we also visited, we're going to get over 360,000 barrels a day as well. >> i think more than 30% increase they said. >> there it is watch it on peacock. so go to peacock, watch it it's good. >> 20 million subs. >> is that where we are? there you go, all right. >> it's great. well, nxp headed higher this morning. speaking of earnings after a revenue beat couple that with a dividend raise. see up 1% right now we get amd after the bell. speaking of semiconductors too still ahead, after this break, the breakdown of a different earnings name. that's also in the green and that is ups. tethawk on the street" is back afr is

welcome back we want to get a share on -- i mean check on shares of ups whichare up almost 4% right now. reporting mixed results. revenue in the fourth quarter coming in weaker than expected this was the peak holiday

season, slipped on fewer items delivered. pricing power, though, that did endure with revenue per item up more than 5% for the quarter and also reflected that strategic push by ups to target delivery of higher margin, more valuable goods. something ceo carol tome's bigger, not better strategy, she talked about on the show and elsewhere over the quarters. top line weakness died to international and supply chain businesses this is in part due to the softness in china trade, something we've seen reflected in the plunge in air freight and container shipping rates not to mention rival fedex's results last month as well revenue in the u.s. segment rose as pricing more than offset a bit of decline in volumes here for 2023, ups forecasting a decline in revenue, also slightly below expectations, but citi, the analysts there, noting the outlook is likely better than feared for domestic, probably the reason you're seeing this lift in shares this morning. also ups raising its dividend announcing a $5 billion share buyback.

as i mentioned the shares are popping right now. guys that is despite what has been a slowing macro economic picture, at least the expectations for one. goes back to what we're talking about at the start of the show. >> it's true you know, jim was talking about the share of retail that's e-commerce we've seen good action in the likes of say shopify last couple days, new pricing tiers. take the right side of the chart as maybe the soft landing scenario, at least globally, may be getting some oxygen today. >> it does seem like that. also speaks to the theme that has been emerging sofar from this earnings season, which is the idea that companies have been able to maintain pricing power, even as they have seen softness, they've seen volumes come off we've seen it with consumer staple names that have reported and seeing that essentially play out here with ups, delivering some of those goods that we talk about on a daily basis as well. >> meantime our market shaping up to be nirvana for the bulls

if you ask jim chanos you bet they are stay with us new customers get our best deals on all smartphones. that's right! but what if i'm already a customer? oh! no problem! hey, cam? wow! same deal! yeah! it's kind of our thing. what if i'm new to at&t? cam, can you? - nice! - hey! but what about for existing cus- it's the same deal! is he okay? at at&t, we give everyone our best deals on every smartphone. get up to $1000 off on our most popular smartphones.

welcome back to "squawk on the street." i'm bertha coombs. here's your cnbc news uchts at this hour. ice storms sweeping through parts of the south are prague roads and runways treacherous. over 1,000 flights have been canceled across the u.s. the dallas-fort worth area is hardest hit. about a third of the flights into and out of dallas-fort worth international have been scratched. in pakistan, the suicide bombing at a mosque inside a police compound is now one of the deadliest to hit that country in years 100 deaths have been confirmed as rescue crews combed through the rubble for survivors at least 225 people were wounded. whoever carried out the bombing remains unclear.

fundraising for former president trump's re-election campaign got off to a rough start. nbc news reports trump donations totallied about $9.5 million in the last six weeks of 2022, that's over $2 million less than he raised in the six weeks before he announced his re-election bid. back over to you. >> bertha coombs thank you very much. the fed kicks off two-day policy meeting this afternoon. the meeting is under way with many expecting a rate hike tomorrow let's get to economics reporter steve liesman. good morning, steve. >> good morning, carl. yeah, after an aggressive series of rate hikes that, you know, many expect to end this very soon or result in cuts by the end of the year, the respondent to the cnbc fed survey see a flat year for the s&p, but next year looks like it's going to be a little bit better. from yesterday's close of 4.17 look it for 1.7 gain by the end

of the year, which is nothing to write home about seeing 10% with the level rising to 4433. as for the 10-year, really unchanged. we're in the 350 range right now, going to 356 by the end of the year and ending next year at just about the same level. what you see is what you get in that regard. risk remains elevated. we have this thing we call the cnbc risk/reward ratio we ask people what's the chance or the probability of a 10% decline or increase in the s&p over the next six months, and right now, it's negative -- in negative territory at minus 12 but little improved -- a little improved from minus 16 in december still in fairly negative territory. still 71% of our 34 respondents include economists, fund managers and analysts, they think that stock values -- stocks are overvalued relative to their forecast for earnings and the economy. asked about the level of

systemic risk, it's come down a bit, which is pretty good news there. 25% say it's very or somewhat low. that's up from the 14% in the last survey. 31% say it's normal. and 41% say it's high. that's down from 72% in november so uncertainty about the stock market mirrors uncertainty in the rate outlook i did a little math and among those looking for a lower funds rate, 5% or lower, compared to the rest of the group or compared to others, they have about 100 or 200 points more baked in for the s&p this year than others do so what happens to the fed, at least for this group, is seen as very consequential for what happens for stocks this year guys >> steve, we were having a conversation on this show yesterday about what it's going to mean in terms of a rerating in the private markets and whether we've seen the impact of the fed's tightening trickle out to the private markets and one

of our guests said this could be a three to six quarter lag in terms of the impact and what that's going to mean for credit and mean for some of the other areas. i guess how do you see it? how do fed officials see it, given the fact that so many companies were sitting on so much cash coming into this tightening cycle >> so, i think you identified one thing that alleviates the impact to the private sector, the amount of car on the books the other interesting aspect of this which i have been looking into, morgan, is the need to refinance or rollover corporate debt and this year is not a big year for it. cfos and companies were pretty smart. they basically termed out their debt over the course of the pandemic and so we don't get to big numbers of refinancing for corporate debt or high yield until '24 and more into '25. i think it's about a trillion

dollars and then jumps up to 2.4 and 2.8 after that it's not really a big deal what's interesting about that, morgan, it kind of makes the transmission of monetary policy a little bit slower, so it's not maybe just three to six months or three to six quarters it could be a couple years yet before you imagine a company may have to refinance from whatever they got during the pandemic, some of it was very low, and they have to go back into going to 4 or 5% funds rate and refinance at that time it could be higher and have a bigger effect. >> yeah. it's a fascinating conversation and gets right back at the idea the debate around systemic risk. thank you. famed short seller jim chanos says the market is anticipating with rising corporate profits with inflation coming down to 2%. the results, market nirvana for the bulls. here's his take last night on "fast money". >> the market in the space of six, seven months, has gone to

corporate profits are going to be up 12% this year, inflation coming down to 2%, the fed may be easing at the end of the year i mean that's pretty much nirvana if you're a bull. >> let's discuss with new burger group joe amato. i want to get your response to those dplentsz chanos and whether there's a lot of hope to use another word we haven't used, priced into this market right now? >> thanks for having me this morning. jim makes a number of important points i think that earnings expectations are a bit ahead of themselves i think that needs to be recalibrated and one of the reasons why we've had the rally, the framework that jim referenced that's not where our perspective is we're still under weight equities in terms of our asset allocation, and, you know, while we see a pathway for inflation coming down to a more reasonable level, maybe not necessarily the fed's target per se, and we have

a pathway to see where rates are basically peaking. the last piece of it, i think is still a big open question, where earnings are going to fall out and our view is they still need to come down, which is why we're cautious right now on equities. >> so the rally we've seen to start the year in equities, you don't think, in the near to medium term, has legs. what is it going to take for you to get less cautious on stocks what is the key point, the key data that you're looking for to turn >> well we have seen these rallies over the course of the year we had a strong rally in march, in the summer and fall, you kind of see the bear market bounced in terms of what we need to see to change our perspective is, inflation decelerating at a rapid rate it's come down nicely but that will lead the fed to be a bit less aggressive, but, you know, our view is that the fed is still going to keep rates

relatively high for a longer period of time than the market is expecting we don't expect the fed to cut rates later this year. we think there's components of the inflation mix that are stickier that the fed is going to be worried about. that's certainly the fed is a huge driver. this week is a big week. we have a ton of earnings. we've got multiple central banks deciding we have a labor market report at the end of the week. this week is going to be an interesting one to see where the market moves near term, but the big issue right now is where central banks are and financial conditions as frustrating as it may be to the fed, financial conditions have eased a bit over the course of the last number of months, which has to drive chair powell crazy. >> you know, joe, yesterday what got some people talking was spanish cpi, a hot surprise, and certainly something that the market does not want to see turned into a trend at least in europe i wonder, when you talk about

commodities rebounding year to date and numbers like that, what is the danger of inflation making a second run and would the market have quite a visceral reaction to that >> well, carl, i think that's an important risk if you see inflation, inflation sort of rear its ugly head again, and surprise on the upside, that in our view would cause central banks to be that much more aggressive in tightening policy, which would raise the risk of recession to be even higher than it is today. and the numbers out of europe are structurally higher right now and cpi in europe is higher than in the u.s. right now we do expect that to come down over the course of this year, but we still think by the time we get to year end, inflation is going to be running in the 3s, maybe 3.5 plus, which i think is still a problem for central banks, which is why we think financial conditions need to stay tight for a longer period of time and the fed is probably going to keep rates at a higher

level. >> hey, joe, real quick question from me, you know, i always like to get -- you have so many personalities at neuberger and groups and approaches to the market what's your take overall are people more bullish than bearish in terms of what you're seeing at the investment groups within the firm? >> well, as you know, david, we have a wide range of styles and approaches, so we have everything that ranges from people who are bullish to bearish. i would say buy and large, we have a bias towards quality and probably lower beta strategies, so our positioning right now is actually consistent with what i framed earlier in our discussion about being a bit more cautious. it's hard to make broad generalizations given the range of our strategies, but our teams certainly pride themselves on staying long-term focused so our performance, we're quite proud of what our performance has been over the course of the last two or three years, where you've had lots of highs and lows we've stayed consistent in the long

term and delivered better outcomes for our clients. >> joseph amato, thanks for joining us. >> thanks for having me. still ahead, apollo's deputy cio of credit john zifo runs about $400 billion of credit products he's going to join us. we're back in three. we all work differently now. so cdw helped us deploy mac, supercharged by apple silicon. ♪♪ built-in security protects me from malware and forgotten passwords. i've got enough battery life to get me halfway around the globe. and lower overall costs leave more money in our budget. for more practical furniture? this was supposed to be hip. no. can you help me up? with mac, configured by cdw, a solution that works for everyone isn't just possible, it's powerful.

ga-a-a-ap! oh... hi. what's this, a hospital bill? mm-hmm. for 1,100 bucks? ga-a-a-ap! looks like your wallet may need a sling too. tell me about it. did that goat say "gap"? he's talking about expenses that health insurance doesn't cover. eh-ehh-eh! well i'm talking about the money aflac pays to help close that gap. aflac, huh? aflac! ga-a-a-ap! aflac! gap... uh-oh! that duck can motor! get help with expenses health insurance doesn't cover at... aflac! ...dot com.

. welcome back to "squawk on the street." i'm dominic chu. stocks are higher right now. session highs with consumer discretionary leading the pack right now. within that sector we are seeing notable out performance among the home builders, pulte group leading the way, trading at its highest level in a year after reporting earnings and revenues that beat estimates on a handily basis there. given a boosts to dr horton and he nar hitting the highest level over a year as well. keep it right here "squawk on the street" is back afr isre teth bak

the first time you made a sale online was also the first time you heard of a town named... dinosaur? we just got an order from a dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. godaddy. tools and support for every small business first. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even

a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

. welcome back let's talk some credit, shall we yields have doubled from 15 months ago on many different credit products, so what does it mean as we head deeper into

2023 let's find out john zito is the deputy cio of apollo's $400 billion credit business down at a conference in miami. sorry i'm not there with you to enjoy that warm weather, john, but appreciate your coming on. about a few months ago, october, i watched a conference you were a participant in and you were talking about getting as much as 12% on levered returns on the senior part of the capital structure, things you hadn't seen in a long time. is that available still or have things tightened up since then >> hi, david thanks for having me right now it's a great time to be a lender across investment grade yields a year ago were sub-3% and now they're double, high yield was yielding 4% and now close to 9%. as you mentioned, secured lending is in the double digits. the last decade has been all

about equity returns 16.5% for equity industries for the last decade. investment grade and high yield debt effectively 5%. now -- >> you know -- >> go ahead. >> sorry, go ahead go ahead. >> no. now with interest rates higher all of that excess profit, excess return is going to the lender, so it's great time to be a lender. >> yeah. you know, i wonder, in asking the first question, things have tightened a bit, it would seem, over the last few months, have they not but in your opinion i guess the window hasn't closed >> there's 250 billion refinanceses that have to happen clearly investment spreads and high yield spreads have tightened but central banks continue to keep rates high on the front end. if you're in floating rate debt insurance you're achieving high rates of return. it's exciting if you're in that asset class. >> yeah. we've talked a bit about the enormous growth in the private credit market, john. obviously, you guys own and

insure, a story in the journal, about many of your peers sort of aligning themselves with insurers you know, does this have more to go in terms of the appetite from private credit and the ability to get investors in these funds? >> there's a demand for private credit right now, is at an all-time high. you have a trillion dollar asset class in a decade, growing at 20% a year, and we've been building all of our origination businesses over that timeline. there is not one lp in the world not focused on reallocating out of equity into credit, and not only is the lending happening at the corporate level, it's now transitioning into the asset markets where you can borrow more against airplanes, cars, residential mortgages, commercial mortgages even last month we did a private loan $1.8 billion against music royalty rights, one of the

largest private lending deals for a company called concord music. the marketplace is expanding and it's growing and double digits rates for return and the asset categories, so it's a pretty exciting time for us. >> yeah. you know, in that same journal story i mentioned, they said private debt is opaque, growing fast and something credit rating firms and regulators have flagged as a potential danger do you agree >> 80% of what we do is investment grade or investment grade-like typically the definition of i will -- illiquidity, we feel like actually we're doing it on a first lean basis against various assets just because it's illiquid doesn't mean it's riskier. we think over time through different cycles that will prove out.

>> high yield bond issuance down from last year you just mentioned $250 billion of refinances needed are we reopen in that market fully? what are your expectations for this year? >> we are starting to open up. w you saw etf and credit increase. we saw a handful of issuance the markets are definitely more open today interest rates being about 80 basis points lower in the last six months has helped. we're definitely open and we expect to see lots of activity as long as the markets are open to address all of those refinancings. >> what about leverage buyouts, something i followed and in the earlier part of last year, the rush of private credit to help finance deals, replacing banks in many instances, and then things got much quieter, in part because of some of these hung loans and the like have things opened up there? could you get a fairly large

deal done in terms of raising the private credit needed, john? >> yeah, there's $1.3 trillion of dry powder out there. we have to find a solution we're working with the banks to help provide solutions for sponsors together. we feel like the market's more open today than it was three months ago if a traditional commitment was very difficult three to six months ago, if it's the right business right now, noncyclical, we feel like there are deals to do and it feels a lot better than six months ago so, given that amount of dry powder, given the markets feel like they're a bit -- they're a bit more balanced, we feel like you can get a deal done. >> yeah. finally, just broadly speaking here, for the longest time everybody was trying to get out of credit. now it seems to be the opposite. are we going to find a midlevel here at some point >> yeah, the last ten years have has been -- i've been at apollo

11 years the last ten years have been how to get your money out of zero interest into equity and now the conversations are about how to get your money back into credit. we are starting to find the middle ground. if you can generate double digit rates of return or returns similar to equity and similar to capital structure, we expect there will be a lot more demand for those lending products we're prepared for that. >> yeah. you certainly seem to be john, appreciate the update. thanks for joining us. >> thanks, david talk soon. >> still ahead this morning on "techcheck," spotify surpassing 200 million paid subs, just weeks after announcing plans to lay off 6% of the workforces losses do continue there we'll speak with the ceo paul vogel on "techcheck. don't go away.

realtor.com (in a whisper) can we even afford this house? maybe jacob can finally get a job. the house whisperer! this house says use realtor.com to see homes in your budget. you're staying in school, jacob! realtor.com. to each their home. welcome back to "squawk on the street." pfizer after a record-breaking 202. shares are just above the flat line meg joins us with a breakdown of the earnings quarter. >> looking at the 2023 guidance, that's where all eyes are, and it's all on covid. pfizer is forecasting a revenue

decline of $30 billion in this coming year. they did shatter records in 2022 with more than $100 billion in total revenue. the forecast for this year is down to 67 to $71 billion. you can see the big difference pfizer says that is entirely due to revenue declines for covid products this year they essentially called 2023 a trough year as the market in the united states transitions to a commercial market. that coinciding with similar timing of ending the public emergency for covid. covid vaccine is down 64%. paxlovid antiviral down 58% year over year. you are seeing the stock come back from where it had gone when it looked like that forecast missed maybe because pfizer is spelling out in detail where it gets that assumption for the 2023 covid guidance on paxlovid they are estimating

112 million, more than they saw last year. they estimate 17% of people will take an antiviral and most will take paxlovid. you're seeing them go through in granular detail how they see the year ahead, guys we'll be talking with the ceo on the phone later and i'll bring headlines from that and he'll also be joining us, i think, on tv back over to you. >> meg, just walk me through this transition to a commercial market what does that actually mean what does that look like for the future beyond this year and how is pfizer balancing that or thinking about that outlook longer term versus its product pipeline that's not covid related? >> yeah. so, what it means is up till now the government has done the purchasing of vaccines and of drugs for covid. it's going to start to go through more traditional commercial channels. the same way we get vaccines or medicines now, the purchasers are going to be making those one of the things that will change is our insurance companies will have to reimburse for that and the price is going to go up the list price of these things to $110 to $130 for the

vaccines, for example, from where they started around $20 a dose so, that's how pfizer is kind of thinking through that. essentially it's a trough year because there's a lot of government stockpile left. that has to be used up before more purchases are made. thinking about how that relates to the rest of the business, it doesn't necessarily, but they are starting to think about these drugs more similarly to the rest of the way they do their business >> you know, in the brief time we have, meg, what are they -- in terms of acquisitions, have they outlined their priorities given the wind fall they have received from both paxlovid and the vaccine? >> yeah, david, the ceo was just talking about that on the call he said bd is one of our biggest priorities he said he personally is very involved in that they laid out a plan to do $25 billion of bringing in revenue by 2030 for bd alone they say they're 40% there through some of the deals they've just done. i think we should expect them to do similar deals to what we've

already seen. >> bd being business development. thank you. >> thanks. >> shares of pfizerdown a bit. of course, it has been a vast underperformer in the market after a strong year last year. down 15-plus percent that's going to do it for us on "squawk on the street. "techcheck" starts now good tuesday morning welcome to check teck. i'm carl quintanilla with jon fortt and deirdre bosa spotify surge. biden thinks about cutting huawei. good day for gm. that stock higher, dee. >> let's get a check on the markets. stocks look to rebound from yesterday's losses take a look root now the dow industrials up 0.25% but nasdaq up more than 1% it's the e