take a quick final check on the markets this morning, green across the board now, the dow, the nasdaq up, and the s&p 500, up about 40 points i want to thank you, melissa lee, for hanging out >> pleasure. >> mike santoli for hanging out all week and waking up early god bless you. we're going to be joined by joe and becky from pebble beach tomorrow morning, so make sure to set your alarm. we'll see you tomorrow morning "squawk on the street" begins right now. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber at the new york stock exchange cramer's at the university of miami in florida as part of his college tour futures are steady after wednesday's fed-driven rally data today, pretty constructive. labor costs were light got the two-year yield, 4.05%.

news begins with the meta boom plus, fed expectations, delivering its lowest rate increase in nearly a year. disinflation yeah, believe it or not, that is becoming the word of the day from fed chair powell. and we got more layoffs. fedex, rivian, draft kings are among the latest companies announcing cutbacks in their employee ranks let's start with jim, though, and his back-to-school tour in florida. jim, walk us through why you're there. it's a beautiful shot, by the way. >> thank you so much i'm at the u, university of miami, because i'm trying to bring the message of what we all talk about, which is how fabulous is stock market is as a wealth creator i don't know i think i've got people here who have stopped me, just from walking 50 yards, who want to know about the stock market, what we're thinking, and i think it's just a fabulous time for young people to be learning, and i love to teach, and this is the best way the college tour, cnbc, i think i'm very lucky to work for cnbc today because i get to be at a

fabulous school and do some terrific teaching. on a day, by the way, david, where efficiency and disinflation are the two things that we're looking at. i didn't think that's what we would be talking about today, did you? >> no. i would not have, and it's funny you mentioned disinflation as we take a look at some good video of you you look a little younger there. i don't know what's going on here, jim. >> i knew you were going to say this i was going to cut this. i said, someone's going to say, he looks younger >> what am i watching here what is this a promo reel for the highlights? oh, road shows, i'm told we're just watching your road shows. >> when we come back from this commercial, i'm going to crush you. >> these are great, and you look amazing. really, you do that's why i love you. back to your question, and i think it's important, because i just had a conversation with somebody who said, the narrative right now in this market is pretty straightforwardly, we're at peak soft landing, and

everybody's talking about the soft landing and how well chair powell has done so far to make that more of a possible reality. person went on to say, listen, i'm not going to say this is something we're going to be talking about that's going to happen, but next narrative that could be, disinflation can you believe that i don't know if you can, jim but that's kind of where some of the market conversation's going right now as people look at the current inflation numbers, what the fed chair had to say and the way the market is reacting, of course, whether it's to bad earnings at microsoft and the stock goes up or not great earnings at amd and the stock goes up or very strong earnings at meta and the stock soars. >> it's a great analysis, david, because if you listen to, yesterday, what powell did, he's no longer talking about how inflation is slowing or inflation is leveling off. he's now talking about the rollbacks, and he wants to see rollbacks to where things were before the pandemic, and he's got a lot of things that are in, let's say, his camp that have

worked, box check, but carl, the one thing he hasn't got is wage inflation. he hasn't won on that. we have employment number tomorrow, and that's why he has to keep raising. these people who think that he's about to cut, carl, i don't know -- how could they be so brilliant? are they -- were they the kids in the class that were, like, i know, i know because they don't we need to see how wage inflation can get under control, because it's not i talked to brinker yesterday, which is chili's and maggiano's, and they said, there's a lot of people who have been priced out. they can't go to the restaurants anymore. but the people who are well off can spend like crazy, and they are. carl, i think that's the one thing that the uber bulls don't get, which is that wage inflation has not been conquered. >> today's unit labor costs, we were looking for 1.5, got 1.1 for q4, that's the lightest since march of '21, which helps but you got jobless claims awfully close to the lowest

levels since the '60s. speaking of rate cuts, the chair was asked about the prospect of those rate cuts later in the year here's what he said yesterday. >> generally, it's a forecast of slower growth, some softening in labor market conditions and inflation moving down steadily, but not quickly. and in that case, if the economy performs broadly in line with those expectations, it will not be appropriate to cut rates this year to loosen policy this year >> that said, jim, a lot of discussion today about just lower rate volatility. i noticed the vicks today, below 17.5 i mean, that's net good for credit on -- in a year where we're starting to at least talk about the prospect of defaults >> absolutely. and i think that what people are saying is even though the credit card companies are now giving you 20% interest rate, autos are 6%, those were both double of what they were about 18 months ago, there's a belief that we

have disinflation, powell talked about that, and in these numbers, meaning that people can't afford to do things, but he's still got more work to do carl, what i don't get is how could a guy say, listen, we're going to keep raising, and everyone just say, you know what he's not going to keep raising do you know that everything he said since jackson hole is exactly what he's done i don't understand the mystery, carl why can't people take him at face value because he has not deviated from the course one bit >> no, he hasn't, and he's starting to get a lot more plaudits for what they have been able to engineer so far, jim, but that doesn't mean the market doesn't see the possibility of what you're talking about or at least not just a soft landing but a quicker reduction in inflation and therefore the possibility that they don't want to get into, you know, a scenario under which they're under 2% and we start to get cuts it seems hard to imagine in some ways, but that would -- doesn't that have to be the underpinning for what's been the bull case of

late >> well, you're absolutely right. the -- what people are doing, they're quickly getting out of anything cyclical for fear there could be, let's say, an overreach by powell. and i've got to tell you, david, some of these cyclicals are going down second day, third day. i think it's a mistake because a lot of them are related to infrastructure, which is going to kick in but you're right, david. what do you make about the fact that the worst stocks, the companies that are really in trouble, carvana, bed bath & beyond, what do you make about the fact that those are going up along with crypto? doesn't that say there's too much new money coming in, in the wrong places >> could be. certainly could be a sign of that it has been in the past. some of those moves seem far from rational. you've also got a number of companies, jim, that we know well that are still not earning money that have started to see significant increases in their stock prices again, this is off of what was a horrible -- horrendous year last

year, broadly speaking, and certainly for growth companies with incredibly high multiples, jim. but yeah, we talked about that at the beginning of this week. i mean, the accretion of market cap, also in names that we know well that are amongst the biggest, whether it's nvidia or or tesla, but i go back to the microsoft numbers and the fact that stock the higher than it was off that one-day lower trend on azure numbers and the worry about deceleration that came and went fast. and amd, a name you know better than many out there, again, that move yesterday, deserved or not in your opinion? >> i think that you said it first when you said these stocks have come down a great deal, and i think people feel they overshot because eventually, inventory, and it's been a big inventory glut, does get worked off. microsoft's surprising to me because that was a slowdown in azure, which is their fastest part of their business, which is their cloud business and lisa su, by the way, said the cloud business may not be that good this quarter, so i

think the market is a little bit misdirected and too enthusiastic, and i think people want to buy anything in s.t.e.m. >> speaking of enthusiasm, jim, meta today surging on those better than expected numbers last night and the guidance, $40 billion buyback, the trim of the capex. on the call, mark zuckerberg did talk about how meta's growth picture has changed in the last year >> obviously, that changed very dramatically in 2022, where our revenue was negative for the -- growth for the first time in the company's history. so, that was a pretty big step down we don't anticipate that that's going to continue, but i also don't think it's going to necessarily go back to the way it was before, so i think this is a pretty rapid phase change there. i think just forced us to basically take a step back and say, okay, we can't just treat everything like it's hypergrowth. >> jim, after your initial

disappointment with that operating expense guidance last year, is all forgiven? >> yes absolutely i mean, it was like a, you know, a brain transfusion. i mean, you had a zuckerberg last night that was talking about a mature company, doing well, doing a $40 billion buyback, very efficient, hiring freeze, we're cut back where we can, not hiring when people leave. what we really care about is the bottom line. ther there's that thing where you use headset, we're going to get to that, but what's more important is the core business and half the world is on facebook it was a transformational call because he used the term "efficiency" 16 times and this is a company, david, that sounded like they're a tool and die company, doing much better you and i both know that's not what they are, but it was a joyous conference call from the point of view of shareholders, sober from the point of view of

zuckerberg >> well, you used two words at the very top of the broadcast, disinflation and efficiency, and to your point, that was a word used very often by mr. zuckerberg on the call and a lot of people are focused on that his new-found affection for efficiency and what that will mean, whether it is using a.i. to help support them in their new datacenter architecture, you know, both a.i. and non-a.i. workloads, giving them more optionality as the ceo said as they better understand their demand for a.i. over ime, new designs being cheaper and faster to build than previous datacenter architecture. and the numbers themselves, jim. they have obviously come down in terms of their capex expenditure expectations, which is being embraced by investors this morning. >> yeah, exactly right, and i think what is most interesting is that you kept waiting for him to talk about the mysterious metaverse. he didn't give it to you he mentioned it a couple times,

mentioned a.i. far more. david, there's a moment in this call where he basically outlines, if you really follow the subtext, that it's -- he's not spending as much time in the reality lab as he used to. he's still spending it, but i got the feeling that he's now talking about whatsapp and $10 billion run rate maybe that's worth a hundred billion. he's talking about instagram coming back and facebook coming back he's really, really interested in the -- what i would call the meta family. it was a total deemphasis of what he had been emphasizing, and before last time, he shot from the hip and said, things are going to get worse they're horrible this was a call -- it was a well orchestrated call that i'm not used to, david it was the call that you get from a mature company that's saying, don't worry, we're going to make the money, do it through expense, and we'll give you revenue growth, so stick with us it was an amazing call, unlike any call he's ever given us. >> really? >> jim, earlier in the week -- >> it was shocking >> -- you had thrown some cold

water about the relevance of f.a.n.g., at least, beyond meta. does that hold up after what powell told us yesterday >> well, i think that powell has given you the green light to buy pretty much anything that's down i think that you can buy all of tech, all of a sudden, after you saw what amd happened and what david said with microsoft. my feeling with f.a.n.g.'s irrelevance is just that we never really seem to get the true story from the companies, so we can't really suss out what they're worth, but then it's almost like zuckerberg saw the show, which, hey, sometimes he watches, and said, like, listen, let's tell the truth about how we're doing. let's go down. let's tick boxes it was not this kind of free-form, let me kind of just ramble about what i think. carl, it was about the quarter it was about the darn quarter. like everybody else. i mean, it was reduced to being prosaic, and i love prosaic. it's what i want it was like otis elevator.

it was like an air-conditioning company. i loved it it was like other companies. >> more on that. i don't want to get into the soap opera that's you and meta through the years, jim, but something you have been talking about is your belief that reels would become a real competitor, and this seems to be the quarter where that also is the case. you know, he's talking about monetization, efficiency, that is zuckerberg on the call, and we know there's demand to see some more reels and we naturally improved the monetization efficiency, and so on, but he -- they did see a significant uptick there you have been talking about it as it -- to become an important part of the company. take a listen to what he had to say. >> currently, the monetization efficiency of reels is much less than fees, so the more that reels grows, even though it adds engagement to the system overall, it takes some time away from feed, and we actually lose money. but people want to see more reels, though, so the key to unlocking that is improving our

monetization efficiency so that way we can show more reels without losing increasing amounts of money we're making progress here >> thoughts, jim >> see, there, david, that's what i'm looking for he's obviously spending much more time, as i said he would be shifting to reels, didn't mention tiktok, obviously, it would be great to have congress go with him on this. we saw a democratic senator come out and say tiktok's a problem this is a new zuckerberg he says, i'm spending time there. we're obviously not making money yet. it will inflect next year. this is really important to the company's growth david, tiktok was barely mentioned the last quarter he was just talking about how maybe even corporations would embrace the metaverse, the -- that was gone. what -- tiktok was more important on the call, david, than the metaverse >> interesting but it's not as though they're not spending enormous amounts of money, still, on reality labs

and the metaverse, jim >> more than ever. $5 billion it has to do with his time, david. the company told me, listen, he's going to shift his time he realizes these other areas -- and you know i would say somewhat of a relationship, he said, listen, i'm not going to let you down we're going to move over and do the stuff that are really necessary, the social -- david, social media that is the term i'm looking for. their really into social media at meta. kind of book to the roots. >> "back to the future," yeah. exactly. >> jim, we're going get -- >> it was a joyous call. joyous >> we're going to get auto sales in a minute, but before we get it, the annual run rate's at a 20-month high and you've got incentives down, inventory up, i just wonder what you make of the rapidly improving auto picture >> it's a big conundrum, 16.2 units. looking for 15.5

the incentives are down dramatically, very similar to what mary barra said it is really hard to understand how homes could be selling incredibly well and autos are selling well, and they all sell at five times earnings dare i say you could even buy ford i don't want to get too excited, but carl, autos and housing, they're supposed to be horrible right now. and they're probably the best two segments in the economy. >> ford's up 2% premarket. we'll look for some of those numbers in a little bit. take a look at futures here. nasdaq, obviously benefitting the most on a percentage basis from that -- those fed comments and the idea that a soft landing still is in the cards. nure "squawk othstetin n e re" a n e re" a mite lomita feed is 101 years old.

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getting those auto sales numbers for january from ford. broncos up 37% interesting look at the mix of evs. sales there up 104%. that does outpace the industry transit sales also more than double jim, the mix of evs is approaching that 10% level for the industry as we get some of these -- these numbers from ford will help. >> these are -- this is very exciting of course, just one month, but evs, this is the year where evs are going to go into mass production for ford. it's interesting that he said he would have to cut, even though

sales are good not for the f-150. the electric f-150 is electric that company reports, obviously, today, so i don't want anyone to be buying it on this but once again, carl, there's this theme that it's not happy days are here again. it's that we have disinflation, as david said, it's just i can't find it. i'm looking for it i'm looking under my pc. i'm trying to find disinflation, but it's -- you get numbers like this, and you say, wow, ford was at 25 and now it's at $14, maybe i can buy it up to $18 >> i'm thinking about what bank of america said this morning ev price cuts appear to defy logic as the industry dredges through this big transition. it will likely, they say, irrational pricing behavior, jim, may emerge and that's going to make the business a lot more challenging until scale is achieved >> mary barra from gm, no price cuts you won't be able to get -- the first hummer was auctioned off

for $500,000 the demand for silverado, demand for the hummer is so great she's like, musk no it's like a fragrance. she's putting out the best numbers right now, and i think the stock could easily trade to $40 or $45 >> see this "variety" piece that gm's going to start putting evs on netflix shows, big ad campaign with will ferrell on the super bowl we're going to start seeing a lot more of it >> i would expect we would marketing's got to be a key part of this, although, tesla, of course, doesn't spend any money on that. >> free advertising. take a look at futures here as we get closer to the opening bell, about eit nughmites away kwauk "squawk on the street" continues on this thursday with purpose. harnessing data-driven insights and boundless curiosity. we dissect the market from every angle. helping to build portfolios that redefine what's possible. because investing isn't one size fits all.

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looking for some s&p gainers this morning there's plenty of them align technologies, almost up 20%, followed closely by meta. f.a.n.g., not far beyond carvana, up almost 30% this morning. you'll see a lot of these names move after what we got from the yeery.da opening bell's coming up in five minutes.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. all right, two minutes before we get started with trading at the new york stock exchange let's get back down to miami and jim, get a "mad dash" for this morning. what do you got? >> yeah, first of all, i want to thank the university of miami. this is the greatest venues i've ever been in, great education. i'm going to get them both here's the deal, dave. you've talked about efficiency we've both talked about that efficiency and cutting your way to good earnings fedex. today, they announce a 10% reduction in management head count. how many people do they have that even a management head count cut is big but it matters the numbers are going up there's a 40-cent quarterly

earnings per share tailwind by cutting those. so, david, another one you can buy. sorry, another positive. can't make them up >> there it is bank of america citing those cost-cut aspirations raises the stock to a buy this morning as you know, jim. listen, i followed it somewhat closely. d.e. shaw had been in there as an activist. i keep wondering whether there's another activist in there. i think there might be so -- and i'm not sure this story is over yet when it comes to fedex, the pressure on the company to continue to cut costs, become more efficient, and obviously increase the bottom line. nomination window, by the way, doesn't open until june. >> but there is a disruptive activist it's the ceo he's just crushing it. he's got a t&p attitude, david total t&p. >> all right >> that's ticake no prisoners

tnp. >> oh, take no prisoners >> just taking no prisoners. >> got it. tnp. got it >> you don't know tnp? i got to teach you stuff i'm going to teach you >> opening bell here at your cnbc realtime exchange at the big board, it is blackrock's black professionals and allies network celebrating black history month. at the nasdaq, trading view, a charting platform and trading social network jim, as we watch brett fill in, back to $41.60 or so, one of those rare days where meta's going to lead the index. >> well, look, meta -- we forgot, and it wasn't helped, frankly, by zuckerberg, that this thing -- half the people in the world use it more people are using it than we thought. i think people are going outside, taking pictures of themselves i mean, look, i'm taking pictures of myself because i've never looked better. you understand that.

i'm being facetious, but the end of the business that we used to love stopped growing and now, it is growing the costs cuts are serious the idea that he spent so much time making sure everybody knew, carl, that no one's getting hired and that they're still trimming back, it was a joy to people who felt that it didn't matter to, you know, that mark zuckerberg didn't care that he didn't -- that he dismissed the needs of shareholders no more. and that's a common theme in technology we know. and david, you know this salesforce thinks it's under continual pressure for the same thing. they want to hear mark zuckerberg's words come out of marc benioff's mouth they want marc to talk about efficiency i don't know, david, if he's going to give them efficiency. >> well, that's interesting. why? what do you think benioff is going to give them there is a playbook to be followed here in terms of getting your stock price up, and we know mr. benioff is under pressure from -- you don't even have enough time to list all the

activists, but elliott being the main one right now why won't he go that route >> well, because i think he's going to say, i've done it before i've announced the big head count cuts i've announced the buyback i've done the zuckerberg playbook, but i don't think it's enough safe for elliott. i think that an activist like elliott wants to see a new board. i think that they think that it can't be business as usual and it's not done, david, and i know you're hearing from people -- >> well, i reported that the other day. >> the activists are not happy yet. >> i mean, i did that -- that was the faber report two or three days ago when we were here i think you're right >> well, that's where i -- that's where i heard it. now i recall that's where i heard it. >> february 12th is when the nominating window opens there. >> is it -- you have a, now, a new benchmark, which is zuckerberg, which just says, listen, you couldn't get a job here to save your life, and if you leave, we're not filling it. then there's the soft cuts, which is marc benioff saying, we have to trim the ohana

we got a great product and i think there's no activism -- i love that. there's no activists in facebook, but david, i just think that there's a belief that salesforce is not going to get to those margin targets if they don't cut more, whereas zuckerberg never had any pressure and it's just kind of self-imposed, so i come back to you, david, and say, will there be more pressure and will there be a statement that says, basically, from these activists, not enough that boardroom still looks too university-like, not enough technology, and therefore it's going to be a long, drawnout fight with benioff. >> i think it's a real possibility. i don't have any new reporting beyond what i reported the other day, jim obviously, you have great insight into the company, but i think that seems to be a more likely outcome right now, and again, there's a lot of conversation yet to come, but a more likely outcome, perhaps, right now than otherwise jim, carl, let's move on to some other, i don't know, jim, you want to take it -- you pick. bri bristol myers, honeywell, merck,

estee lauder where do you want to go when it comes to earnings this morning >> all right, okay, these companies, honeywell is historically very conservative this quarter so they can raise the rest of the year it always fools people, this quarter, the stock goes down you have to buy it bristol myers, what can i say, david? bristol myers, this is a stock you buy when things aren't that good with the economy. so, that's kind of a bit of a drag i don't necessarily buy that i'm very close to fabrizio and estee lauder you knew exactly this, that he knew this was going to be a bad quarter. the stock was down 12 at one point this morning and these are from people who have no idea, they can't pick estee lauder from chili's he told you it was going to be the weak, it was weak. you buy the stock because now china's open this quarter did not have any of the good news. i think that estee lauder uniquely is about to go back to the 300s because it was bad only

because of china and now china's coming back, and you should buy it fabrizio will not let you down who is doing that? >> it's coming back to flat. >> names >> carl, to jim's point, they even said, listen, chinese travel was not a part of those numbers. china is, as we know, much more open travel is back, and estee lauder's expected to succeed we do have a lot of weakness, carl, in merck and in eli lilly. david ricks was a guest earlier on "squawk box." >> yeah, stock of lilly, lowest since october. they did raise their guide, but when your tax rate is 7%, people are going to call it low quality. >> okay, so, people were keying on the majority number this is the drug that i told you, the weight loss drug. right now, people are taking wagove that's the one that the insurers will payfor. right now, $1,700 a month if you want to lose weight. diabetes is proof for it

ricks did not give you the kind of thing that a lot of people want, which is to say this is going to be the greatest drug afof all time he's very conservative what a chance to buy eli lilly this is a chance people don't understand, buy eli lilly right now. >> how much of these, jim, in terms of david mentions pharma here, are execution stocks, specific stories, or just general rotation into obviously what's a huge emerging growth story now? >> well, i've got to tell you, i thought pfizer's guide wasn't that good. merck is just not a hype company. but at this point in the cycle, you're not supposed to buy these stocks the reason why i like eli lilly is because majorno is going to be in the numbers going forward. no professional doctor is going to give it to you to lose weight w when it's not approved by the fda for that but next quarter, it will be, i

believe, and then you're going to miss the next run to $400 but yeah, i think it's a little stock specific, but the overall trend is to want to go into really bad tech rather than go into really good pharma, because people feel that powell gave you the high sign to do that >> yeah. i mean, we've noted that and the market continues to move higher with the nasdaq up some two full percentage points, jim, on that very theme, which is, stocks are just going to rip because the fed chair gave you what you were looking for, a soft landing becoming more and more likely, she's more likely than many of the bears may have expected but jim, you came to this earlier. wage inflation still persists. we have seen some signs, perhaps, that it's trending the right way. but where are you in terms of when powell's going to actually take the foot off the brake? >> well, i think he has to do at least two, because he's cared

more about all the things -- all the services that people have to have for a home. he can't say that he wants food down you saw whole foods asking suppliers to cut down, but he knows that the consumer is strapped because of inflation. and it's wage inflation that's driving up all sorts of costs. i think people should listen to what he's saying, rather than just look at the yield curve what he's saying is the average worker is not making enough to keep up with the things that the worker has to buy, so we have to keep raising, and when we're done with -- and we break wage inflation, we had good productivity numbers this morning, then he can slow down, but he'll have to do these continual quarters because he's very worried about purchasing power for people, and he doesn't want to disrupt it, but david, you're right about what people are doing with tech. for instance, people feel that when amazon reports, andy jassy or brian is going to say, you know what? we too are celebrating efficiency we're laying off people. but if they don't, the stock will go lower, because

zuckerberg has just set a new bar. >> it's interesting, because amazon shares are up almost 5% of course, we are going to get earnings from the company. alphabet shares are up 5.6%. >> how do we know they're going to -- >> we don't. they added 800,000 jobs over the course of the pandemic they've cut, what, 18,000? we don't, but there is a belief that the operating leverage there is going to start to trend in your favor. there's also a belief that given the microsoft numbers, the market has already accounted for potential, not weakness, but slower growth at aws, jim. i don't know but there you have it. amazon is now up some 31% for the year >> well, my travel trust owns its it because we think they're going to get more rational here's why before the pandemic, e-commerce was 16% of retail. at the height of the pandemic, e-commerce was 24% of retail now it's back down to 22%.

has jassy cut back as many people as that inflection from 24% down to 22%? if he doesn't, i think you're going to feel like, i don't want to be in this stock. 800,000. that's an army, david. he added the 6th army in world war ii, and he's got to muster them back, and he doesn't, then i think -- remember, my travel trust owns it -- if he doesn't talk about efficiency and cutting the jobs back to the equivalent to what e-commerce has gone down, then i think, david, people say, wow, i bought this one, i was too aggressive >> you know, jim, we talk a lot about tech here, but parker hanifen is up, illinois tool, up 4%, hogs up 8%, all with pretty good guides today. >> yeah, and that's the story. these are industrials that are not letting you down i know when i look at something like illinois, it's just an excellent company, and if you know that the fed has engineered

a soft landing, which i still believe, i was mentioning it earlier, a tool and die company is what you buy. illinois toolworks is much more than tools harley's execution you asked me how much was execution and how much was resolution i'm very close to stanley black and decker that was an inventory problem. there was way too much inventory in the system, meaning home depot and lowe's, and they suffered through the consequences but that stock is down so low that that one could really take off, not unlike what illinois tookworks is doing right now, so i would buy stanley black and decker, betting that the great inventory glut of tools is over. >> i did want to come back to another name we're going to get earnings from, and that would be apple. up 2.5%, but that's largely in line with the overall nasdaq

jim, your good buddy, toni sacconaghi, was a guest on "squawk box" this morning talking about the name, but we have had guests on cnbc, whether their name was hans from verizon or mike seifert from t-mobile or john stankey from at&t, all of whom have answered questions on the lack of upgrades the upgrade cycle does not seem to have been as quick as everybody thought. seifert was talking about it yesterday onset with t-mobile. is that going to have an impact on the numbers >> no. and this is not an important quarter. and i listened to toni, and he is my good buddy let's go forward what i really see happening here is you got to go not cuervo, a lot of people confuse that because you know i like mezcal and i like good tequila, but corvo, a supplier to apple qrvo they said some things last night that were shocking they did say that the inventory

correction is really -- well, it's up a lot. but the inventory correction's really running through the glut is winding down. inventory down 20% okay, so, they supply to apple what that says is basically this quarter, one that's about to be announced, there wasn't a lot of demand from apple, but next quarter, we already know that demand is ramping, so why would you change and upgrade if you haven't even finished the cycle before because it's been so stunted? i think that as much as i like all three of those gentlemen, of which mike seifert is actually performing well, i think that you just have to let this run its course this is not -- thisquarter, no great. next quarter, i think, is going to be very good because the inventory situation that qrvo talks about. look at that chart david, that's reverse head and shoulders. i know how much you care >> you do. you know that technical analysis is really my go-to it's my first thing, carl, that i look at every morning. >> you're a chartist you are. you're the biggest chartist i

know >> from way back >> you are a closet chartist >> yes, i go in my closet. that's where all my charts are, actually, is in my closet. >> david, if you look in my closet, it's like stepping in a brione showroom. >> jim, where do you think -- when do the mike wilsons of the world -- do they break here? do they stick with their guns and say that first half's going to have some reckoning of some kind >> is that woodrow wilson? which wilson >> yes, woodrow wilson >> wilson. wilson mr. wilson that's who it is that's what i'm thinking, right? because you see, he's kept you out of a great rally he got you out that was terrific, in jackson hole, well, that was fabulous, get us out but now we're back to jackson hole where you're starting to talk, thank you, mike santoli, for this, but the guy's been right. it's okay to say he missed this rally. he might say, listen, i think i said there are going to be

animal spirits and they're going to wind down, but he said that people would be very depressed when they saw the earnings, and i think it's the opposite. they're seeing the earnings, like parker, like you mentioned earlier, seeing the earnings with illinois toolworks and they're saying, things are pretty good. did he count on mark zuckerberg talking about how it's time to batten down the hatches and make a lot of money for shareholders? i don't think he counted on that mr. wilson didn't count on the earnings being great >> you know, i sometimes think back to what chuck robins told jim, david, a year ago, and what is the danger of talking yourself into a recession and maybe we're at a period now where we can say, did we avoid that we'll see. >> yeah. well, the consensus certainly seems to be reflected in the marketplace that that is a stronger possibility now than it even was a few weeks ago, carl >> right guys, for now, though, dow has some weakness, down 260, giving back some of yesterday

hey, bob pisani. >> hey, guys the dow down 260, the s&p up, united health is down. caterpillar is down. they don't like honeywell's earnings the important thing here is we are moving, and i want to take a look at the -- >> we'll take it back, bob, fix the audio. apologize for that we see some weakness here. but still circulating around 4,150 and we'll watch the two-year, which got close to a three handle if that closes to a three handle today, it's going to take you back to september. quick reminder, you can get in on the cnbc investing club with jim. you can find out more at cnbc.com or use the qr code on your screen. speaking of bonds, we'll keep an eye on that as well as europe. the euro stocks, 54% from the highs of last year back in a moment

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little rotation here as money goes into the nasdaq out of the dow let's get to bob pisani again. hey, bob >> a strange morning here, united health down 15. they're not happy with down 6, i weak strange die could the my here. the growth stuff they're going for. cathie wood's arc fund off to a great start, five-month high meta strong, alphabet strong, consumer discretionary, amazon, strong there, and semiconductors also strong. i want to hit on consumer discretionary. home building stocks are hitting new highs today, so pulte had a great earnings report early on there's been several price upgrades to pulte in the last few days horton's at a new high, lennar's at a new high. i don't think kb home is, but it's close elsewhere, big cap tech here meta is on fire.

google, amazon, apple, all really strong. growth is really back. this is a big trend in 2023. mark zuckerberg got comments about the love of efficiency people like it when revenues go up and costs go down the buybacks, $40 billion buyback is 10% of the market cap if he they go through with this. they've been buying back shares, reducing share count 2.4 billion, today 2.2 billion and that would be a reduction of about 10% and if they go through with the buyback and don't add more shares, that will be a significant reduction as well. that count will go down even more here. and this buyback thing has really been big in 2022 and it's continuing in 2023 you remember the chevron announcement that got a lot of discussion last week that was the biggest one these are announced buybacks, not executed $75 billion. meta is number two

there's been a bunch of ones in the 6 and $5 billion, mondelez and blackrock, bank of new york melon, ups, marathon pe tollium announced significant buybacks meta the second biggest of the year all this is happening because corporate america is really flush with cash. 2022 will likely be a record year we don't have the final numbers but you're going to see these are executed buybacks, almost a trillion dollars bought back in 2022 dividends were almost half of that buybacks are definitely more popular as a way of returning money to shareholders. if we get anything close to a soft landing, carl, there's going to be a lot more of this interestingly, carl, i have not seen any press releases out of washington from people who are outraged about meta's buyback the same way they were angered by chevron's buyback, they should take the money and deal with oil wells i haven't heard anybody saying meta should spend more money on the meta universe or virtual

reality. i'm waiting for that press release to come out of washington carl >> david, real quick, tlhere is the 1% tax washington should be rejoicing that's going to add up to a significant revenue number. >> it's having no impact on their decision to do it. it's about how much cash the individual companies, the cash flow they're having is going to matter, not a 1% tax. >> maybe one day when cars run on instagram posts, the white house will have some outrage, bob. thanks, bob pisani we'll go to break here with dow down 180 don't go anywhere.

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so jim, tonight, on "mad money" we showed video of your past back-to-school tours. is this your first time out on tour in a while and can you recreate that energy >> it is i sure hope so this is such a great school. i know from summit high, where my daughters went in new jersey, this is a place that everybody wants to go now. i don't blame them i want to teach a master class and i hope people attend it's beautiful here. people are going to cut my class but we're going to try to do our best i want to thank the university

of miami and casey sullivan. this is a big deal the tour is back like the old days the old days were great days. >> you got that right. although, not as good as today it's good to see you out again lucky students as well. >> i'm so thrilled. >> "mad money" at 6:00 p.m. eastern time when we come back we'll get more reaction to meta's post-earnings rally. best day for meta in ten years back in a minute

good thursday 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 got a lopsided market today. nasdaq up 2%, the dow is negative after the fed, as money goes into tech, semis growth and leaves staples and health care behind got factory orders out back to rick santelli with a busy day on data. >> i think some money might be going in thetreasuries or some of the people looking and investors looking at higher rates. rates are significantly lower on central banks that have raised rates, factory orders for

december expected up 2.3%, up 1.8% that isn't a bad number. up 1.8%. to find a higher number you have to go back to january of '22 the number we're coming off of, minus 1.8, that was 32-month worse and they made it worse making it minus 1.9 on a revision we strip out transportation the number deteriorates. aircraft, auto issues there. it drops to a minus 1.2% minus 1.2% and that is the lightest going back to april of 2020. not very often that you got a minus sign of that magnitude on ex-transportation. durable goods all these in substitution of bid month. 5.6 mid-month, that remains and 5.6 a good number, the best since july of 2020 and if we strip out transportation, same issue here.

down 0.2 of 1% capital good orders nondefense ex for business spending minus 0.1% it was minus 0.2 on the mid-month read we want to pay very close attention to that, because that is an important number ultimately to see money going back into projects shipments not good, down 0.6%. we have two negative months in a row on shipments, and that would be the worst number also since february of '21. close to one year. we continue to see interest rates finding buyers, pushing yields a bit lower we are trading below the december 18th level that was so critical to many on the technical basis. carl, morgan back to you

rick santelli. thank you. we're 30 minutes into the trading session. three movers we're watching. let's start with honeywell under pressure after mixed results to supply chain challenges and labor shortages and offering first quarter guidance below street estimates, full-year sales were -- are expected to be between 36 and $37 billion the dow component expecting strong growth in aerospace and energy shares are down 2% right now to consumer stocks, canada goose and estee lauder in the red, thanks parts to covid disruptions in canada. estee lauder moving towards the flat line about half a percent keep an eye on merck sliding as the post outlook clouding a q4 earnings beat. a new studio out overnight linking merck's covid drug to new virus mutations, merck

surprisingly, disputing those claims, but it is a steep drop in those covid antiviral pill sales weighing on the outlook for the stock down 1%. let's get to the morning's biggest mv mover, shall we meta the facebook and instagram parent reporting a revenue beat and $40 billion stock buyback. its first quarter forecast suggesting revenue could rise year over year should results come in at the top end of the range and you can see the shares are judge jumping up almost 19%. mark kelly raising his price target to $210 a share rosenblatt, upgrading from neutral to buy with a $220 price target good morning to you both barton, i'll start with you. the upgrade now, does it speak to what is an inflection point for meta >> yes what we saw first was an inflection in expenses

they took down their expense outlook by $6 billion and they took down their capex outlook by $4 billion if your au calling for revenue growth, which we are right now, the expense cuts matter for the numbers and thematically it tells you you have a company growing up, doing what a big company like this should do, and then you layer on top of that some interesting opportunities on the revenue side. the reelz effort is narrowing monetization parody, we'll be arguing for an acceleration for revenue growth as we go through the years and having great traction with the click to messaging on whatsapp, $10 billion annualized sales should continue to grow and then, you know, we're less worried about the macro which makes us more comfortable with ad exposed names generally as we see the inflation numbers kind of ease and the fed looking like it's nearing the end of the rate hike cycle it sets up constructively.

i would say that, you know, meta has been penalized as a low multiple internet stock for some time if they continue to act like an adult, you know, i think you could pivot from a discounted multiple to an argument for a premium multiple over time, which is the long-term argument not in our upgrade but could play out. >> mark, do you see it the same way that meta is acting like an adult? i just wonder, given the fact that you cover so many of the other ad dependent internet names, whether you think this is a very company specific story right now in terms of some of the signs of potential strength or re-emerging strength across the businesses or whether it does speak to, perhaps, a macro environment from an advertising standpoint that's not as bad as feared >> yeah. i think on the op x and capex they call it the year of efficiency, being in the adults

in the room. that's one huge positive and something frankly we were not expecting given they kind of provide their outlook in an 8 k towards the end of the year after they gave us their initial outlook for 2023 i think they are, you know, behaving appropriately today versus what they have done in the past and then just, you know, the broader advertising market, one thing we've been picking up on when we talk to ad agencies and advertisers, things are relatively stable. and that's something that we heard, you know, even with snap's print, they suggest that the ad market has stabilized a bit, meta the same thing, and, you know, our target growth rate for the year for digital ads is 5.5% we feel increasingly more confident in that outlook. >> barton, want to get your thoughts on reality labs revenues $727 million, down 17%. huge operating loss, $4.3 billion. maybe it's not getting as much attention on the conference call, maybe zuckerberg isn't talking about it quite as

excitedly and to the forefront the way he once was, but the company still spending a lot of money on this endeavor, no >> they're spending a lot of money. i think they're spending too much money i'm not saying about how this will work out, you know, in terms of return on investment, but i don't think the spending is so large that it swamps the growth and earnings that they're making in the apps part of the business, making twice as much on apps as you're losing on reality labs we're at a high water mark in spending on reality that it's not going to inflect to a disruptive level we gated this and we understand it it could be better, but i don't think it's going to kill us from here >> mark, share buyback $40 billion. i imagine it's only a tailwind, right? >> that's a good number, yeah. they had $11 billion left on the

orig orange repurchase authorization. >> barton your cover what i will call the aaas reporting after the bell, amazon, alphabet, and apple, quickly thoughts ahead of those results? >> i think the setup for google is somewhat reminiscent of what we've seen at meta they won't have the level of cost cuts and the incre mental revenue trends, but it's a low multiple, high quality ad focused stock, so i think there's a positive kind of tone as you go into that report you know, i think for apple, expectations are low i think the quarter is a throwaway. the question is once production normalizes will people return to their love of smartphones from apple which has been taking huge share and i think as we see that play out over the balance of the year, things will look better for apple. amazon a question of cloud services and i think cautious there. the retail environment wasn't as bad as feared in the fourth quarter which is helpful. >> okay. we'll leave the conversation

there. thank you both for joining us. barton and mark. just a quick note, be sure to tune in to halftime report at noon, meta investor brad gerstner who calls on the company to, quote, get fit and focused back in october reacts to the quarterly results and stock surge as well. as we head to break, here is our road map for the rest of the hour a rally for the nasdaq on the heels of another rate hike from the fed. we're going to discuss wha comes next with ever corps's julian emanuel after the break. >> we have more on meta shares as they hold on to the almost 20% gain and ceo mark zuckerberg kicks off that year of, quote, efficiency. a slew of results to get to including retail, industrials, tech, and more this morning. we'll break down some of the key names to watch on this huge sh n'goway.ow

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. it's not just the fed, there are a lot of moves globally when it comes to central banks and rate hikes this week let's get over to steve liesman who joins us to wrap it up all. >> david, markets are seemingly dissing central banks around the world this morning in europe the u.s. and in england the leading central banks cranked up rates, promised high rates will stick around markets showed lagarde and powell the back of their hands

and lowering rates take a look at this chart, not what you expect to see yields are falling around the world in germany after the ecb hiked 50 basis points and promised another 50 in march the uk did the same. bank of england hiking 50 as well the u.s. bond rally also continues strongly this morning down about 11 basis points from yesterday's fed announcement to a new five-month low the result here in the u.s., a widepenning gap between where the market and fed are priced. the futures market pricing in a 50 basis points cut the fed forecasting 5 and 8 by the end of the year. even while fed chair, jay powell, and the fed promised more rate hikes the market is focused on the acknowledgement it's seeing disinflation and reluctance to push back on market pricing for the fed outlook. >> we see goods inflation coming down for the reasons we hought and we understand why housing inflation will come down and i think a story will emerge on the

nonhousing services sector soon enough, but i think there is ongoing disinflation we don't yet see weakening in the labor markets. we'll have to see. >> powell doesn't think that story emerges of lower inflation in services until the labor market loosens up. the danger a market priced whole he for the fed to be wrong loosening of financial conditions that sparks renewed inflation. guys >> steve, you know, a conversation with a large asset manager this morning not saying he was -- i'm not saying this is going to happen, but the narrative that we could start to hear is, disinflation. it seems hard to imagine, although i heard the words from the fed chair's mouth. what's your take here in terms of the way the market is seeing things, versus the way the fed is >> you know, i always balk at extremes, david. i think that the market may be all the way on one side now. when i look at the tail risk of probabilities throughout, it's

all on the left side, a lower possible funds rate. it is true that tail risk of a higher funds rate, some guys were talking about 6 or 7%, that has, indeed, baked out, but, you know, the market has this idea, which the fed mocks a little bit, david, this idea of immaculate disinflation, that you can bring down inflation and not have a loosening of the job market, not have an extreme downturn in the economy, and the fed doesn't think that's possible, i think at this point. what's happened, david, is the market has moved to one side, maybe an extreme side here, not just in the states, but it's remarkable, all over the world where the bet is on inflation coming down and i just hope they're right. >> just really quickly, steve, to follow up he didn't take a cut in interest rates off the table for this year, though. >> he -- >> the market has been betting

on. >> doesn't foresee cuts. he said he doesn't foresee cuts. he didn't push back against the idea that rates are low and financial conditions have loosened but he does not foresee cuts remember, morgan, the minutes of the december meeting, also said no fed member sees cuts this year you're right, though, in the sense that now we got to wait and see what other fed folks are going to say there will be plenty of fed talk, probably beginning tomorrow after the jobs report comes out, and we'll see how much pushback these fed officials give against where the market is priced right now. >> steve, thanks for that. >> and whether it -- >> remarkable 24 hours steve liesman. our next guest activating the fed pause playbook, upgrading consumer discretionary to outperform, evercorp julian emanuel joins us at post nine. >> great to be here. >> the chase is on, wouldn't you say? >> the chase is on i mean, frankly, at about 2:38 yesterday, the fomo calls

started coming in and lighting my line up some of them were the same people that had an abject fear level in october, so there's no question about the fact that, look, the soft landing is certainly on the table, more than it was several weeks ago. the data is telling you that's okay but, frankly, there are other indications that recession is still out there, leading economic indicators, the ism is in recession territory, the money supply contracting, and when you think about the chase, there's still this possibility that there's an element of trap to it. this is really a time where investors have to be under emotional control. >> although, clearly your sector move here speaks of something, right? >> so interestingly enough, consumer discretionary, if you think about last year, worst performing sector, we were under weight the vast majority of the year we were a little early going neutral, and, frankly, the fact

is, is that it has worked. it works a, because if you think about it, there is still a considerable amount of savings, and b, the other thing, the thing that's the conundrum here, as much tightening as there may have been, the labor market has not cracked and that's bullish for consumer discretionary >> let's talk about this pause playbook because you say that it's activated what specifically does it entail and what does that mean in terms of positioning, given the fact that there is a lot of uncertainty throughout, at least in the next few months >> right so, again, the pause playbook doesn't mean we're going to continue the rocket ship ride higher like the last several days it does mean you're going to see much more volatility and the nasdaq is the center of that and consumer discretionary is the center of that again, the interesting thing about discretionary, it was beaten down so badly last year

even if the economy slows it can do well because of the really several years of tailwinds that have accumulated. >> you said investors need to be under emotional control. >> yeah. >> that's easy to ask for, harder to see happen what would an investor who is showing emotional control then be doing right now >> so you have to do here is think about it, and again, part of the volatility of the pause playbook is that you could actually get a draw down which would take us to challenge those lows in october within the realm of potentially being higher subsequently and that sort of lines up - >> is that a possibility we're going to go down that much that would be a significant move down. >> 16% or thereabouts, yeah. absolutely possible. you know, given the fact that if the data start rolling over, and recession fears begin to trump the whole idea of the inflation celebration, you have a very quick mood swing and you look at the last year, the mood swings have been absolutely enormous,

and they've driven flows constantly. >> do earnings suggest that that is likely then so far? >> earnings continue to be a one-way ticket to the downside we all knew six months ago that bottom's up consensus was too high it's coming in earnings are likely to contract modestly this year in line with a slowing economy, but it hasn't mattered, it doesn't seem to matter now, but again, if the data continues to soften on the economic side, it will sneerts w matter. >> when do we talk about s&p forward multiples? do you think we get to 20 and do we revert to extreme on the high side so quickly? >> so, we don't think it's quite that simple, and we think that the tendency has been for that to happen once you get sort of a cathartic flush out that would be part and parcel of a recession.

at that point, if you cleared out some of the froth, built in the kind of fear probably even to a greater extent we saw in october, that's when you actually can have multiples expand off of a trough like that we think when you look out the next 12 months, that's part of the story. again, the challenge is getting from the here to the there. >> the idea that market is priced in rate cuts at the end of the year, your thoughts and whether that's something that should be considered a potential positive given what it would take for the fed to actually do that >> our view there is that, again, when you think about the fact that we're pausing now or about to pause, it doesn't mean that there can or should be rate cuts frankly, the fed chair will probably the next time communicate go back to the mistakes of the 1970s, where berns cut rates in the middle of the inflation cycle. we need to avoid that. he's been clear about that we think that would only happen if you had the kind of downturn

that we don't expect is likely. >> julian, the s&p just passed your price target, at 4156 what do you tell the fomo crowd you were talking to yesterday at 2:38 do you yell back at them >> always polite so we tell them, you have to stick. consumer discretionary we like china plays we like. this is a time to own the rest of the world it's been under owned for 11 years, and the dollar has topped that's very, very bullish. you're going to get that reopening. it's fits and starts and you've run a long way, but we think that story has further to go. >> the argument that the data here isn't getting much better, but china and europe, it definitely is? does that make you look overseas >> oh, absolutely. you know, again, so in europe, it's a little bit of a different story. to us, the fact that you are once and for all wiping the

psychology of negative interest rates away, is a long-term bullish story for europe and for china, you're actually going to have earnings growth, whereas in the u.s. you're likely not to. that supports chinese equities. >> good to see you a lot to handle today. >> big day. >> thank you well, it's great morning for harley-davidson, which is driving past system for the quarter. signs of a consumer slowdown, perhaps in the rearview? we're going to break down the name next. ♪♪ i was having challenges with my old bank. lots of red flags. fees, penalties. so i broke up with bad banking and moved on with sofi checking and savings. now, i earn higher interest on all my money, and pay no account fees. sofi. get your money right. 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.

purchase . welcome back to "squawk on the street." harley-davidson heading higher after zooming past q4 settlements, global shipments rising sending revenue up 12%. a production pause earlier this year, pricing helping the top line as well shares up 7.5% global retail sales were flat, down 2% in north america, harley's biggest market, thanks to seasonality, because dealers await new year model motorcycles but more evidence of polaris indian brands taking share here after the results came in earlier this week. strong demand in japan and

actually in china, which sent retail sales in asia up double digits 2023 harley forecasting 4 to 7% revenue growth in its motorcycle making unit as it's expecting weakness in the financing and insurance with operating income expected to drop 20, to 25%, with interest rates and what it means for consumers taking out loans against discretionary items like a motorcycle. >> the gross margin beat almost 7 points, where manufacturers are complaining about higher raw material costs, but that's explained in the stock up almost 8% earlier this morning. still ahead meta announcing the new buyback. will it actually help the stock in the long term we've got more on that name in a moment one of the biggest days for that stock in a decade. we're back in 2.

explained in the stock up almost

welcome back to "squawk on the street." i'm contessa brewer. here's your news update this hour. the federal government issued its most comprehensive report on gun crimes in two decades and concludes that guns are that are legally bought are being used in crimes more quickly than before. in other words, the time is shrinking between purchase and crimes it also found a spike in the use of conversion kits that make semiautomatic weapons fire like a machine gun. the new data helps police and policymakers reduce gun violence. ice storms are slamming the south. it's expected to ease today, but a lot of people are struggling to thaw out. authorities suspect the weather is to blame in eight deaths, more than 400 homes and businesses in texas without power, and nationwide 700 flights have been canceled. this punxsutawney phil's day to shine groundhog day is here with phil's prediction on when warmer temperatures will arrive it's bad news. six more weeks of winter

but here's the good news, there are a lot of ground host and they don't all agree new york city staten island chuck says spring will come early. i don't know who to believe and don't really care. we can all go to, i don't know, the caribbean, carl? >> i don't know, contessa. we've gotten zero snow this winter so maybe we're due for six more weeks. >> it's gray and cold and miserable. >> okay. enjoy. you have to leave that leather jacket behind. thanks. meta shares surging after the company does beat estimates and announced a new buyback and trimmed their capex. key focus was efficiency on the call mentioned 41 times here are highlights. >> i want to discuss my management theme for 2023, which is the year of efficiency. my main focus is on increasing the efficiency of how we execute our top priorities it makes sense to really focus on the efficiency. this was the beginning of our focus on efficiency. really crank on efficiency

operating more efficiently one is efficiency and work more efficient and efficiency, efficiency, that will just make us more efficient. >> let's get to tech check's deirdre bosa who can help us make sense of that tape. >> imagine that as a drinking game it's almost like zuckerberg and his team pulled wall street and did a thought be bubble and efficiency was the word that came up biggest. i'm glad you didn't run through 41 mentions but it was the theme. it's the theme of the morning and probably the theme for the big earnings reports tonight efficiency for meta is what wall street wanted and zuckerberg delivered. perhaps most importantly was the capex number right most appealing ahead of earnings buy side, they wanted to see that reduced by $2 billion, they got potentially twice that, $4 billion or more. on the year of efficiency it's important to step back and ask why.

i was glad one of the analysts on the call did exactly that and asked zuckerberg, listen, why now? do you see something on the horizon that you're trying to get ahead of the macro picture is that we've all spent so much time talking about many ceos have spent time talking about it, and zuckerberg actually didn't really say that. he said he started on this route towards efficiency, and it started to pay off he found it to be a better business and in the long-term it will make meta a better business he didn't grab on to the macro backdrop slowing ad spending environment we are in. perhaps that's a good sign for alphabet and amazon which has a growing advertising business facebook delivered on the things that wall street wanted including that buyback, which showed hey, we're really investor friendly and giving the street what they want. still lots of losses in the reality lab segment, but you counted the number of times of efficiency, how many times did he say metaverse i think low teens? >> not a lot, not as much talk

how many times seven. seven times. >> seven. >> wow not even double digits >> not even double digits. the stock is up 57% this year. that is meta how do they execute? what's the main tool they're going to use a.i. was mentioned a lot in terms of data centers but where does the efficiency execution come from? >> it's a good question and you mentioned a.i. and teams was pressed on this. the meta cfo said that some of the efficiencies they're going to gain, i feel like we're using that word 100 times now, is actually in their cloud build out. the data centers they're going to be getting more efficient there and that probably means more on the software side and that could be a read through for amazon and google tonight, right, because cloud is such a big part of their business, is that also getting more efficient david, morgan, carl, as you know, they cut 11% of their workforce. they took, you know, a big hit for that but that's going to lead to more

efficiency and zuckerberg on the call kept talking about flattening out the organization, getting rid of the middle managers and that's going to help them and doubling down on the family of aups apps where capex is going to go this year reelz 2 as they get further along learning how to better monetize that. they have work to do and think maybe this year they can break even because it does cannibalize the feeds business they make less money on reels. that's something expected to improve this year also. >> yeah. of course, it's a moving past the impact of the apple privacy changes that happened as well, which going back to a point you made earlier, perhaps that speaks to what we're going to hear from alphabet after the bell those shares are up 7% right now, class a and c for alphabet. >> i mean tlaeshgs a lot of optimism right now carl mentioned -- david mentioned how much facebook is up this year but a lot of mega caps have been leading this incredible rally we've seen in tech so far. there's optimism

however, of course, expectations have been beaten down and many folks thought that alphabet was going to be more resilient to the recessionary headwinds that are going to be hitting advertising. it wasn't really all that immup to it last quarter they have youtube and competing with tiktok on this front in terms of short form video, the product youtube shorts that's going to be one to watch and more susceptible to the att, apple privacy changes. amazon, of course, we're expecting the first loss since 2014 like i said at the top, wall street is going to want to hear efficiency more times on the calls tonight from those companies, so do not make it a drinking game. >> meta has been the tip of the spear in this cycle. pretty amazing we'll talk more about it in a little bit don't miss more on the name next hour on "tech check". in the meantime lots of debate over this whopping $40 billion buyback in meta. we'll turn to dom chu.

>> $40 billion is a lot of money. there's no doubt about it. it's maybe the m.o. that many big tech companies have had. deirdre mentioned alphabet after the bell alphabet, apple, microsoft, meta platforms always among the biggest names out there buying back their own stock this year, the three biggest buyback announcements have come from chevron, the $75 billion number they threw out there, meta becomes the second biggest buyback that we've seen across the wires for s&p 500 companies over the course of this year, and it dwarfs third place, mondelez, $6 billion in a buyback there. oil and gas, big technology-communications, playing out very, very large in this particular trade so far now, if you put it in context, the companies that buy back their own stock, on a serial basis, kind of keep doing it and have over the last five, ten years are the names we often talk about everybody pales in comparison to the $409 billion that apple has spent buying back its own stock

over the course of the last five years, according to howard silver at s&p dow jones indices. the second biggest purchaser of its stock is alphabet at $155 billion over the last five years, microsoft at 116, and meta platforms at 108. this is not something that meta platforms is, perhaps, new to the game with. they buy back a lot of their own stock. the question becomes, guys, whether or not these are timed properly there's been a debate over the years whether companies time those buybacks on a good basis if you're a serial repurchaser of your stock, over the course of years you're dollar cost averaging into it. meta platforms have spent around $78 billion in the last two years on buying back their own stock. they bought it back going towards their record highs and back towards their lows again. this is a dollar cost averaging game david, carl, morgan, whether or not this plays out more fully in the coming years, we'll see. but again, cost discipline, stock buyback driving a lot of

meta out performance back over to you. >> dom, thank you. dominic chu on those buybacks. the u.s. crossing a milestone in the battle over return to work we're going to talk about what that is in just a moment don't go anywhere. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business. 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

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welcome back fed chair powell saying for the first time yesterday the disinflationary process has sta started in the goods sector citing disinflation 13 times with us now shadow open market committee member jeff lacquer. great to have you on the show. i want to get your thoughts on the repeated use of that word and whetherit marks a shift, however slight, in tone, from powell and the fed in general? >> it's a shift in town. powell was careful to say that it's too soon to take a victory lap, but nonetheless, making a declaration like this about

disinflation was a notable pronouncement. i'm not entirely convinced that they're at all likely to succeed in the path they're on raising rates to just over 5% is unlikely to be sufficient to bring inflation down you can see this in the substantial amount of inflation pressures that remain. the labor market is tight. the slow down, the dampening, the demand they've achieved has been so far just modest. and wage pressures continue. wage gains continue at 5 or 6% what disinflation they've had is due largely to goods prices and that's not likely to continue. we can't push gasoline prices through the floor and used car prices can only fall so far. >> so, what do you make of the fact that not only did powell not try to guide the terminal rate higher, but also didn't

necessarily push back on the easing of financial conditions that we've seen in recent weeks? >> the disconnect between the fed and markets has been exceptionally striking in the last several weeks and couple months i think this is something of a fallout of the disaster of 2021. the fed came to a mistake in the assessment if inflation was transitory in the first half of the year that's all well and good reasonable people can differ at that point in the face of overwhelming evidence in the second half, they clung to that interpretation while they were delaying tightening that was clearly indicated by the historical evidence and what patterns of behavior the fed has followed when it's been success at containing inflation and reducing inflation when it's risen above target i fault them for not really

communicating well then and there may be some fallout we're experiencing today in the sense that markets don't take their words as seriously as the fed would like them to in situations like this, i think at the end of the day, actions speak louder than words and the fed is going to have to tighten enough to convince markets that inflation needs to come down. >> do we know the full impact of the rate increases we've seen over the past less than a year now? >> some effects in the pipeline. you can see that in the slowing of aggregate demand. but if you look at labor markets, they're still tight as a drum, wage rates have been increasing the rate of increase has fallen a little bit in the fourth quarter, but not nearly as much as good prices have come down or prices have come down. we have substantial wage

pressures in the pipeline. it's going to take more tigh tightening to get the economy to disinflate significantly, down to 2%. and the benchmark to look at here is real interest rates. the historical evidence on this is real clear, that interest rates have to rise more than one for one with inflation otherwise, you're not raising the real interest rate and you're not -- thereby, you're not doing anything to dampen the incentive for people to spend today versus tomorrow. so you're not really dampening growth enough to slow down inflation when you just raise rates to equal the raise and rise in inflation. they're going to have to raise real interest rates by 1, 2, 3 percentage points. to do that, unless inflation comes down really soon in the first couple quarters of this year, they're going to have to raise rates above 6%, perhaps

even 7 or higher. >> wow so some of the language that did not change in the statement we got yesterday was that the committee anticipates that ongoing increases in the target range will be appropriate in order to obtain a stance of monetary policy that's sufficiently restrictive the market seems to be baking in one more increase based on what we heard from powell and saw in the statement, the committee seems to be speaking to multiple increases. i mean, would it make sense, though, even if you saw two more, say, for the fed to pause, wait and see what impact is and go back at it if they have to, as you're arguing again later, or would damage still be done in that scenario? >> i think pausing after a couple of rate increases would lose precious time and risk the entrenchment of inflation at 4 to 5% annual rate and make it

that much harder for them down the road it would require more action down the road to raise rates and tighten policy to bring inflation out in the economy so it's -- there's a risk to doing so there's a logical argument for it if you think you've got tonight right interest rate, you think you've raised rates high enough to reduce inflation, fine. that would work. that would be a logical strategy if the evidence is you haven't, waiting too soon is mighty risky. >> jeff lacker, thank you for joining us. >> thanks, morgan. >> while the fed may be slowing its rate hike campaign in the future, the overall impact is proving costly for consumers in the near term. cnbc's senior personal finance correspondent sharon epperson joins us with more on that hi, sharon. >> hi, carl. you know, the fed's rate hikes have hit consumers' wallets as

borrowing costs have gone up, savings accounts rates have ris an bit too here's the national average on key consumer debt. credit cards are over 20% right now, an all-time high. the 30-year fixed rate mortgage is over 6% a year ago it was less than 4% thefive-year loan rate for a new car is over 6% as well but was less than 4% at the beginning of 2022. meanwhile, savers are seeing just a little boost in rate with the average savings account rate just a fraction of a percent so, consumers need to be strategic. shop around. high-yield savings account at some online banks are over 4%. and when it comes to loans, check out a credit union for lower rates. also consider a lower interest personal loan to pay off credit card balances or you could move that debt to a zero percent interest balance transfer card the only catch there is you'll often have to pay a fee of 3% of the total amount you transfer,

but you'll pay no interest for 16 to 18 months, maybe even longer it's likely to be worth it >> sharon, i know you saw this journal piece today. almost 3% of vanguard clients tapped into their 401(k) last year to pay for hardships like medical care that number's normally somewhere in the two range amazing to see that and then listen to the likes of, i know it's a different and very specific consumer base, american express where they say they don't see any kind of recessionary signals >> it's not just american express. it's visa, it's mastercard saying they are seeing the consumer being resilient and if you look back to history, it shows that consumers keep spending, even though we're seeing the interest on consumer debt rising and consumer debt balances rising and people taking money from something they shouldn't be touching at all because it's for the long term, like their 401(k). so, really the jury is still out in terms of when consumers will

actually slow down their spending because of these rate hikes and the increases in the interest they're paying. right now, many are still just spending >> we'll see how long that continues, sharon. pretty amazing look at the consumer and some great advice for people out there, too. sharon epperson. still ahead on "techcheck," the mover of the morning, meta, now at session highs up better than 23% on this huge week of the tech reports we'll get a deep dive on what to expect from the other mega caps with a big evening in store for us as well back in a minute ♪♪ inner voice (kombucha brewer): if i just stare at these payroll forms... my business' payroll taxes will calculate themselves. right? uhh...nope. intuit quickbooks helps you manage your payroll taxes, cheers! with 100% accurate tax calculations guaranteed.

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ch robinson on the move after results missed on the top and bottom line. noting, quote, while a correction in the market was expected to speed in magnitude of the correction and only two quarters was unexpected with ocean rates on some trade lanes back to pre-pandemic levels. the transport warning there could be more pain ahead nonetheless, you're seeing shares trade up 1.5% some analysts saying perhaps the bottom isn't there we're back in a moment

office occupancy rates are up around 50%. data polled in new york, for example, shows occupancy levels

nearly 60% on tuesday but friday, 26%. that's mostly us new york, a lot of the other -- san francisco way behind new york sort of in the middle austin better. then it gets to commercial real estate and the questions people have, what does it mean for so many office buildings? rxr was a guest not that long ago. story in the ft that certain buildings, they're just going to give the keys back thanks much, see ya later, back to the bank. calls it project kodak he has digital film buildings and old film buildings and those are not, especially because of interest rates, are a point where they're salvageable given the occupancy rates. >> and it does seem like - >> for future leases. >> commercial real estate, we talk about debt and private markets, it's potentially another shoe to drop, right?

i think it's something like i read a couple weeks ago, a third of all global commercial real estate debt is floating. you just got to wonder if you've even begun to tip the iceberg in that sector. >> we shall see. perhaps, an area of concern, but not a lot of concerns right now. we're ripping in the market. that will do it for "squawk on the street." "techcheck" starts right now good thursday morning. welcome to "techcheck," i'm carl quintanilla. a 20% pop for meta as mark zuckerberg pivots to efficiency. best day since 2013. the nasdaq surged 2% yesterday another 2% today all ahead of three major earnings reports tonight apple, amazon, and alphabet coming this afternoon, dee. >> it will be a big one. welcome to "techcheck. we'll cover it all mixed day on the street.