what fits the category of the keywords it's pretty impressive but the trouble is -- and it does good things for us, but it can make horrible mistakes by not knowing what humanness is. if you're driving a car and you know what other cars might be about to do because you know humans >> woz, we want to thank you for popping in like this >> i'm just here by accident >> we're over time >> amy wu silverman, we're going have you back maybe tomorrow and you join us tomorrow, and you'll see amy "squawk on the street" is next we apologize ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at the new york stock exchange david faber is going to join us in a moment. premarket giving back some of yesterday's rally as we dive into consumer names today. at least five fed speakers after chair powell's remarks on tuesday as well. our road map begins with trouble

in deal land british regulators say microsoft's activision takeover could harm gamers. plus the consumer check-up chipotle sees customers pulling back uber with its strongest quarter ever and yum brands' ceo is going to join us exclusively this hour. zoom and ebay join the ranks of tech companies announcing significant layoffs. let's begin with microsoft-activision the uk says its investigation found that a merger between the two would stifle competition and harm gamers. the antitrust watchdog expressing concerns about cloud and console gaming microsoft says it is committing to assuaging the regulators' concerns while activision says it hopes it will be able to help the cme understand the industry better continued pushback on this regulatory pressure. >> this deal is going to fail, and i think we have to own it. yesterday, bobby put up a spirited defense, but look, they don't like the deal. this is like the simon & schuster deal they didn't like

these regulators are different know, whether britain or here. they just think everybody's a loser on a combination who's not a shareholder, and britain's no different from us. they feel this hurts gamers. to some degree, it's almost impossible to believe that this is happening the gamer class has to be protected? i mean, of the different groups that need to be protected, i'm putting the gamers not very high but they might -- the writers in the simon & schuster, here's the gamers, less choice, but i think that the companies in this country and -- they have to start recognizing that regulators don't like deals, whether it be the russians with the dupont rogers deal or this you got to be prepared to sue when the regulators block you, but this is a new low in terms of who they're trying to protect. >> for sure. of course, faber was early in helping us concentrate on the uk element of all of this, and david joins us on the phone, i

think, from the road today david, what do you think of this latest chapter >> yeah, thanks, guys. sorry for the background noise, i'm in an airport. but to quote "the princess bride," after checking with any number of people who analyze these things and have taken a close look at the notice of remedy, summary and everything else, they probably say, this feels mostly dead. not entirely dead. you know, maybe it can be brought back to life in some way, but it seems unexpected it's hard to put percentages on it, but i've asked people and gotten anywhere from 75 to 90% they think the chances are against the microsoft being able to figure out a way to meet the objections of the uk regulators while still preserving the value of the deal itself they point to paragraph 44 of the notice of remedies, which would seem to be very hard to get around in terms of what the uk is looking at as a substantial lessening of competition. one bright note, perhaps, cited,

though, is 27b of the summary where at least they do point to the emerging cloud area as being their main area of concern what's interesting, and to jim's point, these regulators and where they are right now, there's no -- the market doesn't exist. you can't stream "call of duty" right now, so they're talking about something that doesn't exist, and they're objecting to it, potentially. and the question for microsoft would become, can you sever off "call of duty" in the uk very hard to imagine are there other assets that you could sell to meet these regulators' concerns hard to know can you do a 15-year deal with sony to allow them for streaming, you know, for a cloud-based service? maybe. but is that going to be enough guys, it would seem that this is a very significant moment for microsoft in terms of really making a decision here as to what it wants to do as it faces significant opposition from regulators in the uk doesn't mean it's completely dead, but as i said, it does

seem to be, let's call it, mostly dead. >> yeah, i mean, david, the protected class of gamers, i know it's been a lawsuit in northern california, they're talking about how this would foreclose rivals, limit output, reduce consumer choice, and raise prices david, is there any certainty to any one of these things, do you think? >> no, i don't you can't make certainty that's what's interesting now about where the regulators are, both in the uk and potentially at the ftc here in the u.s., jim. they're sort of making assumptions about the power of these very large mega tech companies and what they can do and how they can do it, not based, perhaps, on past behavior and what they've seen, but at the same time, they're sort of trying to regulate markets that don't fully exist yet. so, it's kind of new terrain, but it doesn't mean that you don't have to try to figure out a way to traverse it if you're microsoft, and again, it would seem to be a very difficult path they have in front of them to do

that very narrow path, if you want to call it that >> right well, what a chance, david i mean, if you believed in activision-blizzard i know that was a question on "squawk. i'm saying that there are arbitragers in here who don't really understand what activision does. they're just arbitragers is it possible that arbs just say, enough already, and they're dumping it right now, don't care about what bobby said about how the company is doing >> absolutely. i think there are going to be plenty of risk arbs in an event-related fund this is the biggest deal we have had in quite some time, so you could own a lot of it or choose not to perhaps they have some positions and choose to sell that said, let's not forget there's been an enormous spread in this deal from the very beginning for a reason the reason has been because of concern of regulators in the uk and eu and u.s. as well, saying, no, thank you. i'll leave it to you to tell me where you think -- you could have selling that brings the

downside lower, but the fundamental value i'll leave to you after i know what you believe was a good quarter i watched "mad money" last night where you were talking about it. but you do have to get ready for the idea that bobby kotick may be coming back to run this company and what its fundamental value is going to be that doesn't mean microsoft not going to make efforts. they've got some time. the final with cma is not for some time yet, but it would appear, again, a very difficult -- many difficult decisions for them to make they may get a positive ruling from the eu that could conceivably help their case a bit, but it seems a lot more likely today, jim, that activision is going to be an independent company again, run by bobby kotick, and i'll leave you to tell the investors what it's worth >> take two had a far inferior quarter, and yet the stock was up gigantically.

blockbuster, "call of duty," couple other games, candy crush, crushing it. they have been in limbo and it's time to buy more i think this is a terrific -- may be one of the best situations out there because the gaming business is starting to come back, and the best way to play it is the one that's the king, which is activision blizzard. so, carl, i don't know i think it's a great opportunity. >> well, david's right the spread has, for a long time, sort of led us to this moment. yesterday, we talked about activision's value, demonstrating value as a stand-alone, and it's not like microsoft doesn't have other priorities that are apparently important to them. >> talk about the lack of real caring we are so into gpt, david, you know, let me ask you could this just be a $60 billion distraction now from microsoft >> sure. although, you know, to an extent, though, they have been very dogged in pursuing it, jim. perhaps more so than you would have thought from the very

beginning. they have been willing to meet the regulators and offer concession they have been willing to sit down and really consider things that you may not have thought they would have been willing to do to preserve the possibility of this deal going forward that's been a bit surprising, how constructive they've tried to be, at least from what i have heard. the cma, it's unclear there was a lot of back and forth, but there could be now the bigger takeaway, jim, is just what can big tech really do not just in the u.s. but around the world. i mean, mega tech, the big names we all know. and is this yet another sign it's very difficult for them to navigate, even when they think they have the law on their side. >> right, look at meta i was in this exercise app with zuckerberg, and the government didn't want that to merge. ftc didn't want it to merge. carl, we have a rebellion going on throughout governments, including right up to the president, against the investor class, because investors are therefore, per se, people who

don't need to be protected because they've made money, so to hell with them. we need to protect gamers over investors. the gaming class is -- that's a more protected class than the investor class can i -- you can't make this stuff up i've very worried about gamers i have a "call of duty" champion on my staff, and i was fretting this entire time >> look at the state of the union, buyback taxes and taxes on the wealthy, and i don't see how any of this comes as a surprise >> nothing does better in polling, i guess, than bashing investors. if you're a bad investor, you're okay because you haven't made a lot of money >> do you disagree that the last 30 years have seen the pend ulum of gdp swing to capital instead of labor >> absolutely. maybe it's time to reset the clock and get unions to do better we have 5 million jobs that are open if you want to start right now

as an assistant manager at burger king, you could probably start just by walking in not really, they have standards. but this is the moment for labor. why do we have to dump on capital? >> you think it's piling on at this point >> yes it polls well. i mean, the people who have done well, there's not enough people who have done well, so why not back the people who haven't done as well? this is the greatest time for people who have not done well to become well, that let's not, when they get there, hit them over the head with a club. >> the administration would say it's polling well because that's what the public wants. >> okay, what can you do last night, brian nickel, we're talking about chipotle the $100,000-plus people are eating more chipotle, but the under are not. so, i guess we should -- i mean, look, i was really poor one time, and a lot of that was my own doing because i took a job that didn't make a lot of money. the president is in favor of

those, which is fine, but i don't think it's the emphasis. they got the biggest clap, although, you know, when mccarthy -- you ever see mccarthy >> there's been a lot of discussion of the optics of last night for sure our thanks to david. david, safe travels on the road. we're going to be seeing him very soon, i guarantee you when we come back, we'll talk more about earnings and the consumer we got uber and chipotle to get into, going in on pposite directions later as we said, an exclusive with yum brands ceo david gibbs on some of these comps at taco bell take a look at futures here. very busy wednesday setting up we're back in a moment welcome td 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.

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some consumer-related names in the spotlight today let's begin with uber, up sharply in the premarket after the surprise profit and issuing some pretty upbeat guidance. gross bookings up amid the easing pandemic. 2.1 million trips, and they guide above on bookings and adjusted ebitda. >> this was the quarter. remember, it came public this was the quarter this was the breakout quarter. even the freight business, which i have loved, have been waiting for it to do well, freight was up 1.5 billion on 43%. this was the strongest quarter by the way, this is one of those releases -- dara khosrowshahi did an amazing job, but he was right to signal all the things that were working well, because they have even -- they're going to have $1 billion in ad revenue

next year. gross bookings up 26%? wow. this was -- i mean, this is one of those where the stock is only up two it's going to go to 42 i mean, this was a remarkable quarter. clean, good beat >> yeah. they talked about getting gap operating positive in the -- in due course, is what he said, with andrew ross sorkin earlier on "squawk." take a listen. >> we are seeing menu inflation in our eats business, and we've seen a little bit of the number of orders in a basket come down, so maybe people are ordering a little bit less in response to menu inflation, but it looks like that menu inflation is subsiding. in other words, it's not getting any worse. it's not getting any better. >> his point was not really seeing weakness in consumer. on the other hand, some of the drivers say the reason they're participating is because of inflation. >> well, look, inflation is still not great, but the wage level is beginning to creep up

again in used cars it's like whack-a-mole, aluminum, copper shortage, but i would say that the -- we're at this moment where people are no longer saying, you know what i expect my wages to go up 10% i think they're saying, you know, wages could be peaking here not yet. i also find that when you look at, say, dupont, which is up really big, they have raised prices and now raw costs are going down how long will people tolerate price increases? this is the costco dilemma where rich said, you know what we see what you're doing you're not going to get away with it. >> that leads us to chipotle, where transactions were down 4% and pricing was up 13% >> the fourth quarter was very tough for them but the first quarter, talking about 10%, some people say because of the omicron compare, but i believe them when they say that 2023, they're set up to do well i think you have to think about 2023 not that fourth quarter and it is indeed, yes, i hate to use

the term because it's so wall street, a buying opportunity they have said already that things have started better they've raised price, and they have accepted the fact that there's a lower end that's not going to come. that's something that chili's said i saw ed hochman on, the ceo, he said, the lower is end is not coming but the higher end is spending their darn fool heads off. >> you talked to niccol about this last night. take a listen. >> the resistance to the pricing that we have taken, we've seen very little show up in our business obviously, we reset our delivery business throughout the course of 2022. i think we're now at the right economics so that that can be an ongoing proposition. and i thought it was important to get that reset so that it was set up for success going forward. >> there it is now, i got to tell you, if you've not used delivery, delivery is really expensive it's like a tax on your burrito, and i think that the delivery use is down dramatically now, some of the analysts were

upset about that they said, we thought you were going to be more digitized but brian is saying, people are coming to the stores that's even better and by the way, i think that between a customer who is digitized and a customer who's on premise, they want this to happen so, not that you necessarily want a tax boy, the president did not address the burrito tax. he missed that tax it's on the -- if you're wealthy, you have to agree to be taxed more on your burrito >> you don't need tortilla chips if you're wealthy. >> higher burrito wealth tax >> there's a great piece in one of the trades today about chipotle's technological experimentation, things like robotics, an arm that will do the deep fried tortilla. >> they said1 that was going to be done already, and it's not. they can get one of that person who does frying or whatever, but i think the chatgpt is the way to go. you should never have a person answering the phone. that's ludicrous

>> drive-throughs, same thing? >> i discussed this with jensen huang, the ceo of nvidia if you notice, one of the key lines is they think it defies moore's law. hold it just a second. we've got a ceo, nice guy, pat gelsinger, ignores moore's law they're saying, we can go much faster and so, i don't know why -- if you go much faster, why would you want a person on the other end at chipotle? we need 27 different language person who never makes a mistake. >> especially in that business where throughput is everything >> they will -- not one of these -- i'm going to ask dave gibbs. he better be ready for my question about chatgpt i'm not talking about big bear a.i. here or soundhound, as much as those are the blue chip a.i. now. >> we are going to talk to david gibbs of yum in just a few minutes. we'll get cramer's "mad dash,"

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watching some ndx laggards today. you're going to see alphabet at the top as the conversation continues to pivot around chatgpt, open a.i., language-based modeling and artificial intelligence. we'll see what they have to offer later this week, i think and then activision blizzard, you see, down 3% on news we've already covered opening bell coming up in a few moment, and don't forget, you can catch us any time, anywhere, just listen to and floolw the "squawk on the street: opening bell" podcast.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. let's get cramer's "mad dash" as we count down to the opening bell >> subscription revenues are what people want it doesn't matter what business.

everybody wants sticky subscription, whether it be youtube for alphabet they want that you know, apple wants digital. well, the one that is really doing it and killing it is "new york times." they have delivered and delivered. this meredith, who i got to meet a couple times, what a rock star, and the bundle's selling well digital advertisers, not doing well so what? they were raising dividend i remember when this company was so on the ropes. this is a stock that is inexpensive, and i don't think people are paying much attention to it, because they're not looking at the change in digital, which is so gigantic. up 31% for this year over year so, the ad revenue, yes, okay, ad revenue's bad, but it's a gem, and i think people don't think of it as a stock while they look at it online >> well, even that chart right there is not reflecting some indications where it will open up 6%. >> yeah, people just -- people seem to forget it, and yet, it's signing up a lot of people

is athletic doing well to me, i would not have done that acquisition, but the fact is that this is a company that is cashing in on subscriptions at a time when subscriptions are king >> you think it's puzzles to some extent? >> well, the bundle. they like the bundle >> i just mean wordle and all the properties >> i think that's a way to go. i think that's part of it. i also think what's part of it is the fact that it's the worldwide paper. it's how people get their news i used to think it was the left-wing, some people used to say that uh-uh. the fact is, it's the way people start their day worldwide, much more than they ever could with paper, and i just -- my hat's off to them. i, too, felt they could be an endangered species, a newspaper, but they are a paper of record with some good puzzles, and that's okay. what more do you need to be? >> certainly, i mean, remember the days where publishers were being forced to give away product. that is gone >> oh, and no one was taking the subscription look, if i had -- if i were "new

york times," i would be covering the world with salespeople, because it is the paper of record more than it's ever been in terms of the world. maybe not in terms of the old days of new york, but the world. >> if you talk to people right now in media, there's a sense that, as you say, programmatic is troublesome, but the direct ad model where you deal with an agency and it's face-to-face buying and there's an upfront, there's a sense that maybe they don't want to get left behind if the economy does better. >> i think that's absolutely right. by the way, in the lawsuit that the justice department is bringing against google, against alphabet, the idea is that these companies, the publishers don't know how much google's really taking, and it's exorbitant. these guys are really being hurt by google and programmatic i don't know i haven't heard google's side. i'm waiting to hear that but "the new york times" has its -- it is such a gem that they can have those conversations. >> take a look at that chart now. as you can see, looks like in

some of the premarket action get the opening bell at the cnbc realtime exchange. at the big board, it's canadian gold miner celebrating 20 years. at the nasdaq, it's our colleagues at nbc universal, celebrating the third ever tech developer conference there's our chair of global advertising and partnerships greg robinson is our leading chief diversity officer. you'll also see apple's cofounder, steve wozniak, who i'm going to host a fireside chat with this afternoon >> congratulations that will be a lot of fun. he always comes to play. >> yes and msnbc anchor stephanie ruhle along with some of our other colleagues, polly marshal in there, maggie chan >> you know all these people fantastic. >> we rely on those guys >> we're a great team. we have a great team i think that the -- as much as i like "the new york times," obviously, the bundle that we have is pretty fabulous. >> i got to know yesterday what you thought of microsoft, not

the atvi stuff but nadella's framing. >> i do think microsoft has owned bing and bing has not been -- it's a poor number too this takes this business that was really not doing well and makes it so that they're the one of choice. why wouldn't you say, book me a vacation to mexico, give me the itinerary. i want to be in mexico city. it does that well, that's a big game change, because right now, google's on its heels if they pull this off. it's really incredible my travel trust owns alphabet. i've never been more worried about alphabet than i am at this moment >> interesting they're on the run by the way, a bunch of price upgrades on microsoft today. piper goes to 290. jeff jef jeffries 310, and nadella did talk about this at length yesterday in redmond

>> we start with already a business that is profitable, and here's the interesting thing the most profitable, large software business is search, so i look at this and say, look, i just have to earn it, one user at a time, an incremental gm i've never, ever felt this liberated in terms of opportunity in the days ahead. >> he -- i mean, he compared it to the advent of cloud >> i know. i thought that was impressive. especially -- you know what? that's good because their azure did quite poorly this quarter. of course, they'll say, listen, even though where it is, it went off a high base. look, i do think that it's a very profitable company, and the conversation has radically changed from where it was in the third week of january, when we were worried about azure slowing from 35 to 30, and now people can't get enough of microsoft. they recognize it could be a big growth stock again search is pretty much a monopoly we know that google makes a huge

amount of money off the ads when you call up something. and that's what's going to be really hurt. this is the inventor's dilemma if google takes it up, you will not look on your screen. you will just talk and have all these different options, and you won't know those options and a lot of people are paying a lot of money to be in that option, and i would just say, let's stop paying. bar san miguel, i would say, listen, no more, because we won't come at the top. give me a good mexican restaurant near the subway stop. chipotle >> not to mention the incremental capex cost and pressure on margin that it would take to offer a product. >> i don't know. look, google's going to have a product, and they're very smart people, and they probably have a very good work around to what i just said. or else, it's not a good stock it's not a good stock. >> yeah. we're seeing quite a nice little run here in some travel names, jim. the airlines, we do have an upgrade of rcl today in the wake

of their quarter b of a goes to neutral, but they go from 40 to 78 on rcl. >> that was amazing, but that's that wave season and i love this american express, uber number one, primo, you betcha recommendation. the stock was up go two bucks el on people should buy american express. it's a great number >> her point is that the jobs number was great, but in aggregate, the consumer is facing tough debt levels, and that's why they downgraded discover >> but i always say, listen, you have to balance the debt levels, yes, and they don't have a strong consumer. you have to balance the debt levels against the job increases, and american express has a lot of cache with people who are younger than people who work on wall street. they should all call their children and see whether they use american express, because there's a new cohort that squeri

has got. it's not just the small business person it's how many people take the card that's been lost in the shuffle about worry about debt meantime, if we're really worried about debt, what's jpmorgan doing having this historic run i mean, come on. look at wells fargo, what that stock has done untiin the last weeks, i think the worry about debt should be extend to the banks but forgotten. american express is doing incredibly well. >> is the financial move based on a better delinquency picture? >> i think so. >> or is it a rethink of net interest income? >> well, look, net interest income's going to be good, but i think people are rethinking right now, if everybody can get a job, how bad can the loan situation be i mean, there's 5 million jobs out there to be had, and you have a credit card, well, can't you do something about it? sharon did a report which says that the fees are -- now at 20%. when you're a loan shark, not

that i've been one, but i've been on the other side of it the loan shark said, listen, it's 20% no, i'm not paying 20% this was on a kind of a situation where i was a little not as well off, but lincoln wasn't either. lincoln called it the national debt that's what he called his bankruptcy proceeding. but i think that 20% is kind of north of what i think most people expected to pay >> i think they would think that's predatory >> the president talked about that >> yes >> i think the president -- does he want to eliminate -- what does he want to eliminate? >> fossil fuels? >> no, we're going to give them a decade you're mike wirth, you have this company that you run called chevron. it's kind of the old standard oil of california. decent company $328 billion, and you're listening, and he goes, oh, good i've got ten more years before the company goes under what a break is that how -- does mike wirth say, oh, i thought they were going to put me out of business now. no, i've got a decade.

does he go to his wife and say, they gave me a decade? >> it's not exactly an incentive to produce >> i don't think you want to big carbon capture situation up there that's going to kick in, in 2030, when you know you're filing chapter 11. does he say, wow, i'm bed bath if they take that up, i can offer stock. >> by the way, speaking of cars, really quick, adam jonas with a little note on tesla today, jim, saying that interest in the name, at least from clients, has eased, given the run it's had, but he thinks that maybe investor day march 1, we get a new spark. >> he should watch phil. phil lebeau had this fabulous piece about how it's the number one car in california. i don't get that ennui at all. remember, he did -- my travel trust owns ford. he did upgrade ford here >> kind of been all over the map on ford. >> yeah, well, he's fun. he's the most fun analyst oosh i mean, if we had a hall of fame analysts of fun, bingo

right in grandfathered. >> you said, jonas is unique cvs, jim, by the way, not just the oak street health deal but the quarter as well, up almost 8. >> why is that stock down here sells at nine times earnings the comps are great, and may i just say that my friend, sara eisen, has karen lynch on today, and if you sell this stock before karen speaks, you're out of your mind karen's got the best story out there. i mean, you know, look, yes, you have to ask her about the fact that it's easier to get a product from amazon to your door than it is to get the person to open the plastic lid >> yes >> but i think she had a great quarter. >> yeah, there have been some comments, i think, from wba that maybe that shrinkage problem was overstated in the time we worried about theft. >> that would be terrific. i know that if you go on amazon and you look at saws, you'll see a home depot brand not from hom home depot, so i'm not sure

whether shrinkage is overstated. but i think that cvs captured the person who got the vaccine, and they got them to like cvs and, by the way, the acquisition that was done by aetna is playing out pretty well. they are a wellness company. remember, he said, we're getting rid of tobacco because it's antithetical to being a wellness company. i thought that was great i'm taking a $2 billion hit because i think that we should be -- he said, we -- i think we should be a health company that was it. that was terrific. then, the stock languished. lisa gill and i used to go back and forth, what are we missing missing nothing. and i think that karen lynch has just continued the goodness of that company >> really quick. the news in retail is not great. capri is down double digits. >> that was a horrible quarter >> bf corp. cuts the guide under armour had a decent result, footwear up 25%, and 16

cents beats 9. >> a plank is saying -- of course i go to plank because i think he's been waiting for him to come back he's just saying, strength, strength but capri, we should go over capri. worst quarter of the season so far. jimmy choo down. that's the end of toe cleavage as far as i'm concerned. michael kors down 7.t2% >> and inventory, still up 21%, which is an improvement. >> it was -- i want to put this in the bad category. just bad and i was really surprised at least he gave you hope, but north face was good. they're going to sell jansen van's still bad. all right, well, let's talk about something that's moving up i'm tired of these consumer brands getting killed. let's talk about yum! because this is one that everybody knows. pizza hut, taco bell, right?

we like all these. we like kfc. i kind of like very much yum! brands beating expectations this morning strengthened by same-store sales growth and taco bell, double digit joining us now exclusive, yum! brands ceo david gibbs good to see you. great quarter. >> with you guys it was a fantastic quarter you saw the results. i'm glad you pointed out that plus 11% at taco bell. topline was growing across all of our brands. but we talked about this, jim, right after our investor day the development results were through the roof we opened 1,300 net new units for the quarter, 4,500 gross units for the year let's put that in context. for the last two years, we have opened 8,600 gross new units if that was a chain, it would be a top ten global chain in the world. we opened that just in two years. >> well, david, i thought it was

interesting that it was actually your cfo, chris turner, talked about how can i miss this, digital strategy, conversational commerce and tiktok. did they really play a role, or is it just something you like to say, yeah, everybody has it? >> we're doing a ton of stuff on digital, as you know, and that's what drove a lot of our results in the fourth quarter. our digital sales for the year were up -- they were $24 billion. that's from $12 billion back in 2019 before the pandemic we've quietly been making investments in digital and technology behind the scenes, shifting massive amounts of g&a, and artificial intelligence investments in companies like dragon tail that we bought 18 months ago to make the efficiency of our kitchens much more part of the equation, and the efficiency of our drivers on the road it's a big part of what we're doing, and tick toque is a company that we bought that does conversational ordering for customers, not to be confused

with tiktok. >> i guess that was just bad translation there. now, what i do -- i'm amazed about, there is commodity inflation and pockets of labor shortage, and yet you are able to overcome these. we all know that it's hard to find workers how are you doing it >> the good news is, i think we're past the peak challenges of inflation, and challenges on labor. we are seeing applications up. but of course, the best thing to do about staffing your restaurants is keep the workers that you have. so, we're all about retaining and creating career paths for the employees in our restaurants. you know that so many of our great franchisees around the world started as a team member, so we have that pathway for everybody, which is very attractive on the inflation front, inflation really is moderating for us as we go into 2023. we're really expecting in the u.s. at least low to mid single digit inflation, so it really sets up as a nice operating environment for all of our brands with the momentum we have coming out of the fourth quarter

in 2022. >> david, third party delivery i saw a note this morning that a year ago, pizza had five transactions per store from third party. at the end of the year, it was 50 i just wonder what you think that trajectory looks like >> it's really amazing how well the pizza hut u.s. team has played that, the third party delivery piece of course, we have self-delivery and we're experts in that and it's a big part of our business, but by opening our business to the aggregators and having third party delivery in the business, we're accessing new customers, and you can see, when we can drive 50 transactions a week in our stores from that new channel, that's really helpful to the overall business. we'll always be self-delivering, and we'll always be working with our aggregator partners. together, it's a great partnership. >> dave, let me posit something. we know that chipotle did not have a great fourth quarter. deceleration talking about 5% you did 11% in taco bell now, i know that chipotle's

lifestyle. chipotle's considered to be a different category but you've maintained your price point. it's a very inexpensive meal is there any chance you are taking share from chipotle >> i think taco bell in particular is taking share from everybody when you put up results like they're putting up with 11% growth in the quarter and that's because of the appeal of the brands. fourth quarter was driven a lot by the mexican pizza as you know, we brought that iconic product back with great success. but the buzz that that created around the brand was probably more important than the sales of the actual product and that's what the team is expert on, creating buzz, and that's why they're weinning in the category right now. we're setting records on new unit development we passed a thousand taco bells outside the united states opening up 400 of those just in the last two years, 40% of our international taco bells just in the last two years, and those numbers are going up as we move forward.

i think we're taking share all around the world >> this is what i think is one of the more interesting dynamics of the whole business right now is that if you have the comps, you can afford to step on the gas on unit growth, and i just wonder how much more aggressive can you be, and what does it mean for marketing spend >> look, i think you're exactly right. now is the time to be investing behind our brands. the most important thing when it comes to development, carl, is the returns that our franchise partners are getting young china on their call last night talked about the fact that they're getting two and three-year cash paybacks on building new kfcs and pizza huts we're having similar experiences with franchisees getting great returns from new units so it's not a hard sell. as far as the marketing spend, i think the exciting thing in the world of marketing is just what artificial intelligence and our data and analytics teams can do to help improve our marketing spend. we bought a company called quantum a couple years ago that

is going around the world working with our marketing teams to optimize our marketing spend and make our digital spend even more effective so, we have lots of things driving the business right now, all moving in the right direction. >> okay, so, david, yesterday, we had actually a very conversational fed chief who revealed himself as actually, of course, being far more than what he comes off in conference calls. if you were sitting down with him, would you say, you know what chief, it's not happening. the prices are not coming down as a matter of fact, we're going to have to do more wage increases this year. we have more problems with food. i don't know what's happened, but your price -- your fed fund rate increases just haven't worked for us? >> look, the environment and the lens that we have on the economy is of cbviously limited what we see is an environment that sets up well for our brands if we're talking about the u.s., but generally, around the world as well.

we are seeing wage pressure come down we're seeing applications go up. as i mentioned, we're seeing inflation moderating, and 2023 is actually setting up to be more of a more normal year without any kind of undue challenges, at least in this part of the year so, we like the environment that we're operating in right now >> boy, david, i don't know. i mean, maybe this is one that -- maybe it's happening look, no matter what, you're doing terrifically, and we're thrilled that you have -- thrilled to have you on the show it's a very, very good quarter don't react to the stock the stock's had a run. david gibbs, the ceo of yum! brands, thank you. >> thanks, guys. as we go to break today, time for the bond report we're going to, as we said, get a bunch of speak today, williams, cook, bostic, kashkari, waller later today we've seen a bit of a mixed picture on the curve today you see the two-year down. dow down 50 to start this wednesday. back in a moment

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4150 continues to have a big of a pull as is s&p is coming off the first winning day in four, dow down about 66 as we got a bunch of consumer earnings niday and big media names toght. stock trading with jim is coming up what's up, peyton? good morning, peyton. hold for peyton. they'd huddle.... welcome to the peytonverse. such a visionary. game plan... you go. no, you go! and call audibles... double our investment in omaha! omaha! omaha! omaha! or you could use workday. omaha. the finance, hr and planning system used by over half of the fortune 500. for a be-agile-like-an-mvp world. workday. for a changing world.

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let's get to jim in stop trading. >> the layoffs continue. juxtapose this with what david gibbs said zoom, 1300, a good balance sheet, but uh-huh. ebay, 500. seems like erday there's somebody that lays off maybe they feel the stock goes up immediately but it's not like that mark zuckerberg has the growth of instagram which allows him to do that and the growth of reels. so we have to watch the layoffs and not presume they're positive. >> is it a surprise we're not getting the layoff bounce, so to speak? >> these are the companies with no growth now.

zuckerberg got lucky that instagram roared back at the same time he fired people in a reduction of force most companies don't want to do a reduction in force like amazon because they're afraid they may have their service dented. if you work at meta, you can go to raytheon, which is looking for people a lot of people. >> your comments on google got absorbed quickly shares down almost 7% here as there's this sense, as you said, they are scrambling. >> it is existential i don't know how you can speak the small pebusiness person on app, it's winner take all now, loser take none. it was winner take some, then second, and third. they have to handle a device you only get one winner and you don't look at the ads, that's

the thing. >> the golden goose. >> yes >> i love the ag theme and the personal who probably created more jobs than anybody, the commerce secretary i saw her last night, she's going to be on the show tonight. she's remarkable. >> both sides of the aisle like her and i hope that doesn't hurt her. is that okay >> we'll find out. >> some people in the investing class will be benefitted by her. >> we'll see tonight. >> i watched the speech like this i surrender. i surrender. done well. when we come back, more on microsoft's takeover of act vision as the uk regulators say e althde could harm gamers as the deal is down 35.

welcome to another hour of "squawk on the street" i'." now industrial data, let's get to rick santelli

rick >> wholesale trade, a december final if we look at the mid month read, it was up one tenth of one percent there was something unique because that was the smallest amount of inventory change going back to july of 2020 and it remains now at up one tenth of one percent if we look at the trade sale side of the equation, that's december, there was no mid month read, that is zero, goose egg, unchanged. expecting a number with a minus sign although you look at the revision of last month you have your minus sign, we doubled up that six tenths build for november it ends up at minus 1.4% and that is noteworthy because minus 1.4% of course takes you back to july when it was minus 1.5 and that was the lowest since the all-time low in april

of 2020, minus 17. so these numbers are moving lower. it makes sense if you're not selling the inventory and you had an inventory overhang earlier in the year it makes sense but has a prerecessionary whiff to it. 35 billion intends to be auctioned off at 1:00 eastern today. back to you. >> rick santelli, thank you. here are three bigs earnings movers were watching uber continuing the ride higher after the, quote, strongest quarter ever bookings expected to go 24% in q1 and the company saying it's not seeing any signs of consumer spend weakness those shares are up 2.5% more than 40% up from the start of the year. cvs, the focus this morning on the latest acquisition. primary care company oak street health which cvs will buy for

$9.5 billion in cash cvs is up almost 4%, oak street up almost 4% and finally underarmor topping estimates. deep discounts offsetting inventory still up 50% year on year in the holiday quarter. the shares have lost all of their premarket gains now down almost 2.5%. microsoft and activision headed in opposite directions today on news the uk's authority is taking aim at the acquisition. jon fortt talked to microsoft yesterday about the scrutiny take a listen. >> at the end of the day, the regulators around the world have to make the choices. i would only submit to them if they seriously think about competition they have to reflect on is this going to be helpful to bring more competition? >> jon fortt is with us today. jon we've been chatting this morning about the dual silos of news regarding microsoft

you were there, talking to him for a completely different reason. >> i was talking to him about ai on the activision thing it's interesting. we see it from the u.s. perspective and x box is so big, microsoft is so big, satya was pointing out when i talked to him yesterday, japan, sony and nintendo's home base we have few shares he also mentioned apple without mentioning apple saying there are players making money off of games who don't make any games, so consider that as well but ai definitely the main focus yesterday as microsoft rolled out the new investigation of bing powered by ai he was saying the whole ai movement not just the search piece but the movement they're going through is the biggest thing to happen since cloud 15 years ago. which makes it the biggest thing since he's been ceo, been in

that seat for about nine years here's something i think is important for investors to think through. this is not just about chat gpt. there are multiple layers of the ai stack where microsoft has been doing work and where microsoft really has to make progress here's what nadala said about that >> we want to make sure that the azure infrastructure is open to everybody and the foundation models are available for everybody. and there's where api has ai, we have it through azure. then our own incorporation of our product. so measure us and customers will measure us by looking at how competitive are we in each layer of the innovation. >> it's important for every point of share gain that microsoft can get in search, that's like $2 billion worth of profit if they can pull that off. so he was very specific about that opportunity investors clearly thinking about that.

but in the infrastructure, in azure, if they are able to demonstrate that their azure infrastructure is more ready for other companies to build ai on top of than google, than amazon, then that gives them an advantage perhaps in the next leg of cloud growth. and so, that's why he's talking about the multiple layers, guys, of this stack. >> johnn, it was a great interview. can we dig more into the partnership. i ask that on a day we have the activision blizzard headlines coming out of the uk right now and increased regulatory scrutiny, anti-trust scrutiny, dare i use the word around microsoft and around the big tech companies in general and how much regulators here and in europe are going to allow them to buy other companies, does that speak to why this is a partnership? >> i think it's still early to

figure out how microsoft is going to integrate the open ai innovations across the whole suite of products and also nadella being careful to say we want these tools available to everyone we're not trying to monopolize to have all of even open ai's innovation to ourselves. so measure us by not only how we're able to incorporate it into our own products as you see with bing yesterday but also how they're able to rollout tools to developers to build quickly on top of the work that open ai and microsoft has done that's where the challenge is particularly google. google is already building ai into their own products, into the phones, the interfaces but they haven't yet really surfaced those for other people to try out independently and for developers to build on top of the way google really needs to, one might argue, for them to have the kind of momentum and learning velocity within their

ai they'll need to be in the lead >> it is going to be fascinating to watch all of this unfold. jon fortt, thank you for more on the stock implications specifically, let's bring in brent bill, with a buy rating on microsoft. brent, good to have you on i want to get your thoughts on whether you've put your arms around how big this ai opportunity, this chat gp opportunity is for microsoft specifically >> good question it's a huge opportunity, hard to size it's going to take a while there's two aspects for microsoft one is consumer business look at the ad business today it's only $18 billion, as it relates to the overall revenue stream for microsoft, the biggest stream is obviously software so you have the software side as well which they're enfusing ai into things like teams, power point you can fire up a power point

and say show me a family in front of a mountain in front of a lake and do your editing for your presentation, for example so there's so many amazing opportunities in my opinion more on the enterprise software opportunity i think on the consumer side while they'll be successful i don't believe they'll put a dent in google's business i think google doesn't have a lot to worry about from this i think we've seen it in the past when microsoft tries to go into consumer businesses, they are met with a lot of resistance you can go back to the nokia days trying to launch the phone. i think the opportunity is really down the road in enterprise software that's where i'm most bullish least bullish on the consumer opportunity because i think getting individuals to switch from using google to bing or back to bing is going to be a tough one. >> what would it take to put a dent in google's business?

>> i think the technology would have to be so revolutionary. and such anamazing experience to have anyone switch. but again, we -- last night we ran five different examples between bing and google and google came back -- you know, it's just not even close not even close yet and so, look, if you're going to do a wing recipe for your kids which i did last night on bing for dinner, it's great it pulled up a nice recipe and gave me a great visual but if you're doing more advanced things like you're trying to figure out the best coffee spot near you, looking for a doctor, looking for some -- i think ultimately google is going to be the default. remember, the big market for microsoft is those running windows machines today most are running apple devices in their pockets you have to get to a point where you down load the application or go to the site and i think again that's going to be a very

difficult transition for consumers. so again, i'm a huge fan of microsoft. i just think, in my opinion, covering them for 20 years, their fast ball is in enterprise software, their consumer business has not been their fast ball, it's their backup pitcher. i think they'll be successful. they'll take share as they said, 1 point of share is $2 billion in revenue they don't have much to lose because they don't have much so you have an opportunity, over time, to have two engines of new growth, the consumer business, which can be bigger, google's dollar value is over $30 billion, they're at 18 billion. i think the big opportunity is really the enterprise opportunity coming and that will take several years to unfold >> so brent, you're emphasizing kind of the big picture, this is long term, largely maybe invisible kind of improvements on the enterprise side so it's positive but nothing immediate and nothing dramatic

and yet we're sitting here with alphabet shares down 6% this morning because they didn't dazzle people as much with the launch of their ai offering and maybe a wrong answer and $70 billion in market value is gone so you have the highest energy traders in this market, only care about, you know, the next exciting thing in ai where does it leave you in terms of what's, you know, being created in terms of opportunities or where things are getting overdone >> i like google here. i'd be buyers of that. i think microsoft is on a great trajectory this takes time. it's not going to turn on overnight. and remember, these are -- ai isn't going to drive the world we talk about this in the way -- it's like an auto pilot for a plane. you're a pilot you're not putting it on auto pilot the whole way. there's a huge human element to this, still. yes, ai will help augment what we do. but it can be really dangerous

we've seen several situations in the aviation world where auto pilot can be dangerous i think microsoft has talked about this, being responsible from design, but i think that's going to take time but i think a lot of this is front end hype we can't tie revenue numbers to it right away and i think ultimately there's not as many people that switch from google back to bing i think to me google is the logical trade here. >> thanks for joining us. dovish signs from the fed continuing to grow maybe. what it means for the markets with uvs's art cashen. a check on the consumer with one freight name on the heels of a, quote, atypical holiday season more weakness ahead? and the layoffs continue to plague the tech industry but one key part of the workforce is seeing gains

more on that story later this hour don't go away.

fresh fed speak continuing to roll in this morning. let's get to steve liesman with the latest >> good morning, john williams speaking in the past hour joining the fed chair in forecasting higher rates for longer and warning the fed may have to boost rates more if inflation doesn't cool and if financial conditions loosen too much.

>> especially if the outlook for inflation were higher you would need to have a higher interest rate to make sure we're getting the restrictive stance bringing inflation down the signs are suggesting we still have work to do to get interest rates where they need to be to make sure we're bringing supply and demand in balance. >> williams also remarking on several indicators showing unexpected economic strength williams is also the vice chair of the market committee. it would be big news if there was any daylight between him and the fed chair on the policy outlook. there isn't. here's what powell said yesterday. >> the reality is, we're going to react to the data so if we continue to get, for example, strong labor market reports or a higher inflation report, it may well be the case we have to do more and race more than is priced in. >> the hawkish talk from the fed leadership is pushing up bond yields market priced the peak at

489, remember for the june before the jobs number, now trading at 518, 519 for the august contract. and you can see that's actually a bit above where the fed is for year end we have our new green line there on our power charts. so the gap between where the market thinks the fed is going and where the fed projected it's going, it narrowed from the job number to under 30 right now it's like 27 basis points right now. that shows good agreement between the bond market and the fed on the rate. but that rally we had yesterday after powell spoke in the stock market makes me wonder if the stock market is on board guys, with where the fed says it's going. >> steve, can i ask a basic question here. how is the fed defining financial conditions is it credit spreads is it the s&p? >> can i just say yes? give you a very basic answer look, what they'll tell you -- any time -- i almost never waste

time asking fed officials what they're looking at because they'll give you this long list saying we're looking at everything once in a while they'll elevate something and tell you to look at it. i follow the goldman sachs financial conditions index that's one index out there following the market it's kind of been flat since the december meeting when they raised to 5% bond markets, though, this morning are a bit on the march i see a -- i thought i saw a 370 mark on the ten year yeah, there's 368 right now. the two year up it had been above 450 this morning it's something to watch. what they want to see is they want to see financial conditions tightening and that means all the things they talked about as well as, by the way, another thing to watch are corporate credit spreads which have come in recently. >> steve, great round up

thank you. as we see the market trying to shave some losses. one question is why the market would rally in the face of powell's comments. you have williams reiterating 5.25 as a terminal maybe not getting worse. >> not getting worse, deviating too much from the premises we had that the fed is -- maybe we're in fine tuning mode but 5% give or take has been the assumption, i think, for most investors since the latter part of last year so if you look at when things like the one year note yield stabilized, october of last year, when the market managed to bottom when we're at a 25 basis points points per meeting you have a lot of data, six or seven weeks, another quarter point. the market also seems like it wants to believe this year, people were under invested, grabbing for stories, equity risks we're at the higher end of the range, markets acting better but it's a different instinct in

terms of how we're filtering the incoming data. so putting the fed aside -- the big surprise would be if inflation were sticky, get a lift again on some of the month-to-month numbers and see if that challenges the pre prevailing view a little bit >> i think it's worth noting it was a whip saw, head shaking kind of day yesterday in terms of the markets and the moves we saw throughout the afternoon but you did see a very distinct reaction in the treasury market that took powell's comments yesterday as more hawkish versus a very different reaction in stock market that took them as more dovish, almost like a goldilocks scenario. even sew the ten year we've been talking about technicals more than we usually do in the last couple of weeks, but the ten year is moving higher. and seeing two notes maybe testing the trend line from the october highs. i have to think i can only potentially put pressure on the equity rally we've seen here if that's something that comes to

fruition. >> i think at some level it would. we don't know what it is we're below the highs of last year so there's a lot of things i think that can knock the stock market off of this path. it seems like we're getting some breaks here. you know, messy earnings but maybe bottoming earnings in some of the big tech areas. you have obviously this current of excitement running through some of the more speculative stuff, i don't think you want to see that get out of hand but i think there's this upside down impact that has. i mentioned this in mid 2020 people getting up in arms about the initial robinhood phenomenon which is it makes people so uncomfortable there's so much crazy, silly stuff going on, it almost detracts from the bullishness of everybody else that's not participating because people are saying i don't want to wade into this with people taking these risks.

>> on a day where carvana was halted for volatility now up 20%. >> i wonder if they call it to share bubble. >> i remember in '03 and '04. the president taking aim at buybacks and billionaires in his state of the union last night. we'll brk wnomofheeado se t highlights after a break yment t- is a giant pain! hi ladies! alex from u.s. bank! can she help? how about a comprehensive point of sale system... that can track inventory, manage schedules- and customize orders? that's what u.s. bank business essentials is for. (oven explosion) what about a new oven, can u.s. bank help us there? we can serve loans in as fast as 12 minutes. that would be a big help! huge! jumbo! ginormous! woo! -woo! finding ways to make your business boom. that's what u.s. bank is for. we'll get there together.

let's get a news update this morning with christina >> let's go to your cnbc news update at this hour, rescue operations are more urgent as searchers begin their third day of looking for earthquake survivors in turkey and syria. the death toll has gone above 11,000 people. making it the deadliest earthquake in more than a decade first london then paris. president zelenskyy is on a rare trip outside his country he spoke to members of british parliament thanking them for their support and now urging them to send war planes. and in paris, president

zelenskyy will meet president macron and finding strong indications that russian president putin approved supplying the missile that shot down malaysian airlines flight mh 17. and they're suspending the long running probe into the attack that killed 298 people. >> thank you. keep an eye on chipotle today. weaker than expected results are sending shares lower down almost 4% right now the ceo maintaining the company hasn't seen backlash to higher prices despite transactions declining in the quarter make of that what you will stay witush (vo) businesses nationwide are switching to verizon business internet. (woman) it's a perfect fit for my small business. (vo) verizon has business internet solutions nationwide. (man) for our not-so-small business too.

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dow down 60 today, subdued equity action in the wake of

higher yields. art cashin joins us today. it's great to have you back we had you in mid to late january when we were testing 3900 and a lot has happened since then. how do you judge the progress of the bulls to the degree there's been progress? >> it's been pretty good i think the upside surprised a lot of veteran traders including a few old foggies like me. and they looked like they were regrouping but i think it may have been excess strength at the end of the january we have a mild seasonal pattern, carl, where if you get a strong january like this one, it's good for the rest of the year but it usually means that that strong january ate up a good deal of the strength of the first quarter so that february in particular and then much to a

lesser degree, things kind of stall out. we're going to have a ten year auction at 1:00 today. i think yields are going to be very important we have about three more fed speakers to come up. williams was a little more hawkish than we had seen and i think what happened yesterday was that it wasn't so much that powell let them off the hook, but that clarita, the former vice chair conceded there was an outside chance the fed could be cutting at the end of the year we haven't heard that from anybody but the bulls in the market i think that's what they picked up on. i'm a little suspect here, the bulls have the momentum in the short run. but i would watch out if they roll over and break below 4100

i'd be very careful. i go watch this auction. the yield run that -- i mean, the technicals on the yields look like we might get a little bit of a push to the upside. we might test 390 or maybe 4%. >> do you think that's in the cards or do you need incremental things like manheim used cars to get that moving again? >> i think there is that possibility. we'll see a lot of important things, you know, for example, this auction today, how well bid is it? where does it go i think, you know, powell is kind of even handed these days, but i think some of the regional fed presidents may talk a little more hawkish because they want to get the message out i think some of the regional guys are frustrated that the

market has not believed them the market is beginning to catch up as steve liesman said earlier. there was a big divergence between what the market's outlook was and what the fed had said and the market, in fact, has adjusted to a slightly tighter move now i think earnings season is almost over. but i think what's going to bother markets as they review it is, it looks like the profit margins are being compressed here and that may hurt things in the outlook. so i think the bulls are in charge they impressed everybody with a kind of overtrade in late january. but seasonality we should be due for a bit of a rest here so i'm going to -- i'm going to be careful, i'm going to watch the regional fed guys and see what they say. >> so fed speak, technicals. art, i mean, the big moves we've

seen and the moves that i think are a little bit at times of a head scratcher versus what the fundamentals are suggesting, at least so far to start the year, this is a week where we're talking about artificial intelligence and ai and how it's affecting everybody's lives and being deployed by the biggest tech companies but ai is well at work in the markets as well, right? >> yeah. but you do bring up a good point, morgan, because we're having -- in this whole ai speculation -- a kind of mini or miniature dot com bubble the fever, frenzy we saw when the dot coms took -- oh boy, eyeball look what we have, everybody started bidding things up we're seeing that in a smaller group of tech. everybody is delirious with the artificial intelligence thing. i would suggest to you that you want to be careful with you.

you want to look at the big guys with a lot of capital. that would be, obviously, microsoft and alphabet and i think apple may be coming around the corner so those are the people who i think can have the capital to dig in to artificial intelligence but right now, you know, almost like the meme stocks, if you put artificial intelligence next to your name, your stock goes up. >> yeah but i guess even in terms of the market moves we've seen and the roles that humans versus machines are playing in those moves and you see headlines from fed speakers and reactions that reverse in the middle of the day. >> it is, but i would -- i would question the idea of intelligence it is algorithms it is computers that are triggered to speed read a release, and to look for key words.

it's not artificial intelligence in the fact that they actually analyze, at least not yet, what they do is they look for key words and they pop in. and that's why you get some of these quick selloffs and quick realities that don't have any staying power. >> definitely keeping things interesting, though, art, as people are on the hunt for some new structural growth story in tech we'll see how it plays out. talk soon. art cashin >> thank you still ahead, more on the pulse of the consumer with the ceo and the pulse of the economy with the ceo of one of america's biesggt freight names, schneider. don't go away. maybe it's perfecting that special place that you want to keep in the family... ...or passing down the family business... ...or giving back to the places that inspire you. no matter your purpose, at pnc private bank, we will work with you every step of the way

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welcome back to "squawk on the street" i'm dominic chu. stocks mostly lower at this hour, especially when it comes to utilities and communication services sectors now that utilities trade could be partly because of rising

interest rates now as we mentioned before, earlier in the hour, communication services alphabet is seeing notable weakness as investors continue to digest the artificial intelligence ambitions. and watching lumen technologies far and away the worst performer today. the outlook came up short of expectations those shares are down a whopping 19 plus percent in trading today. keep an eye on com services and the utilities, carl. back to you folks at the new york stock exchange. checking in on the ftx bankruptcy case. the trial set to resume later this afternoon, new filings suggest that ftx lawyers are already cashing in the law firm sullivan and cromwell billing out $7.6 million alone, working a

combined 6,500 hours in november there's financial advisers, forensic accounting firms. >> we knew about the size and complexity of it you hate to say it but this is par for the course it becomes very open ended you have to get people in here, figure out what happened ultimately the creditors and who knows if customers are paying for this in terms of reduced recoveries eventually. >> and of course ftx specifically concerned, we're talking about a complicated company structure with an umbrella and these different subsidiaries all over the world and the recovery efforts and everything else. looking here at a report that the enron bankruptcy exceeded 700 million in fees -- >> total fees. >> yeah. inflation adjusted i'm sure it's higher but probably still a ways to go. just to put this in context with other big cases. >> good point. meantime, despite a wave of

tech layoffs, names like micron, sysco and more are still hiring but with a key focus, diversity. frank holland joins us with more on this trend. >> black americans will miss out on $360 billion on wages between today and 2030 if underrepresentation in tech continues according to new research from mackenzie. so right now we're here in atlanta where visa is opening the office to increase the commitment to hiring black and diverse employees and work with diverse founders the goal is to have more than 1,000 employees here and use local colleges, including hbcus as a pipeline for talent. >> visa continues to be on the lookout to attract diverse talent and black talent is important because we do believe that a more inclusive culture creates better business outcomes so last year many tech

companies announced plans to open offices here in atlanta with a focus on diverse employees. we confirmed that apple, wa walmart, moderna, airbnb are moving forward with the plans. there are just about as many black tech workers here in atlanta as there are in san francisco, new york city and austin combined. one name we didn't mention was microsoft. previously last year they announced plans for a tech hub here to employee as many as 15,000 workers they paused those plans. yesterday i spoke to atlanta's mayor, he said he's in talk with microsoft still and hopeful there can be thousands of jobs created here >> that's fascinating, frank holland this morning >> still ahead on tech check today, a deep dive into the future of ai on the heels of these products intooiusosla is gog jn

to break it up all down. that's 11:00 a.m. eastern time don't go away. 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?

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welcome back to "squawk on the street." the push for an electric fleet continues in the freight world president biden committing again at last night's state of the union address to build 5,000 ev charging stations across the country. our next guest delivering nearly 100 battery powered trucks to the road earlier this year mark roark joins us to discuss on set great to have you. a lot to get to. let's start with your electric trucks, who makes them, what's the range, and what's the use case for evs in trucking >> talking the class a, large semitrucks, those are being deployed in southern california and we'll operate in and out of rail heads for intermobile customers. taking five this month and up to the 100 number by the time we get through the calendar year. >> is there a point at which it makes economic sense for evs to

be a long haul story in are we on the road to that story? >> it's going to take time the range right now is 200 to 240 miles depending on at the rain so it'll be a while until we get battery electric trucks but there's fuels like hydrogen that may get us there sooner. >> you're in the truckload business, among other things we talk about truckload we're talking about trucks that are carrying basically a full load to one specific shipper. tends to be very retail focused. what is your read through on retail especially since we did see truckload volumes tumble last year >> predominantly our end markets are the consumer so retail across the spectrum is one of the largest categories. we're dealing with overhang from the precovid and covid inventory. that's starting to burn down i think we'll get back into this

year a normal replenishment cycle. >> the analysts at bank of america think they're seeing early signals of a bottoming in freight demand and could be an inflection in the second half of the year do you see it the same way >> yeah. i think the spring -- it could be sooner than that, depends on category and customer on the demand and replenishment, there's going to be some capacity or replenishment come out as well. so that's going to be interesting for developing. >> recession, risk of recession, headwinds, early signs of recession, are you seeing it in trucking right now and freight right now? >> in the freight economy we're on the front end. >> that's why i ask. >> we're stable and it's been stable for the fourth quarter, haven't seen much of a dropoff like we normally see in the first quarter so it's too early to tell. but i'm more optimistic than pessimistic. >> has everyone looked at the

freight rates and the for hire as a marker of inflation or supply chain issues. if normalized how does that flow through to your business, if at all? what does that say to the overall conditions of logistic and shipping economy. >> overall there's aover-fixatie spot market, out there playing with an individual carrier i think more importantly, watch the contract market where customers are making more long-term commitments to get their supply chains met. that doesn't get enough play at times in the media one does lead to the other, but i would say an overconcentration on spot markets is a little dangerous. >> i noticed we got maersk today. is there a big split between ocean and road >> once it gets to the port, between our intermodal and truck

products, we see it a little later. there's a great opportunity to get back on to the rails we think there's an opportunity for a conversion from over the road to rail and i think that could be one of the key stories in 2023. >> what about labor constraints. those are improving. i think the railroads have done a nice job of getting crews up to level we as an industry have done some work with wages and the environment that we're seeing a little better wage condition, and so we think we're poised to take advantage if we get there if we get the demand >> so to bring this full circle and back to the state of the union last night president biden again sort of touched on this idea of reassuring are you seeing it? >> those are multi-year efforts for a lot of customers, but i think mexico could be a real winner in this and certainly our customers talk to us about de-risking supply and there's a lot of learnings that took place when something just in czechoslovakia or somewhere overseas can really slow a whole production line down i know there's a lot of discussion, but i think those are more of a long-term solution

than short >> given the dynamics in the freight market right now and given how fragmented the trucking industry overall is, are you inquisitive here >> i think there's a good opportunity for us and our strategic initiatives to be inquisitive. it's highly fragmented, very few carriers are our size. it's a lot of smaller carriers, which i think have some distress in the market based upon what's happened and i think that creates opportunities for well-capitalized folks like us >> finally, we started out talking about evs, and even before the break or before we came on, we were talking about range anxiety is normal for consumers, much lessa trucker. how is the charging network going to play out? and will there be an industry-wide standard and will there be -- how much of the government these to push this along, do you think >> i think the infrastructure for the country is the biggest issue for us, commercially to adopt. it's not going to be the trucks. it's not going to be that technology we had a two-year plan to get in southern california and it's taken us even longer to do that. it's getting that power distributed to where you're going to charge is hard on the

grid, and it's hard to get everything coordinated to do that so, i think if we can solve that, we'll adopt faster >> mark rourke, thank you for joining us here on set ceo of snyder. during the month of february, we are celebrating black heritage through the stories of our cnbc's teammates. here's our alinacroft telling her story. >> i am most proud to be my father's daughter. my father, howard croft, was a civil rights activist. he went down to mississippi to help register voters he did that at a great personal sacrifice. he was really sort of a foot soldier in the civil rights movement he was not well-known at the time and i think about everything that i've been able to achieve in my lifetime, it's because of people like my father and all of those civil rights activists black history month is that month where i think back on all of those incredible individuals, both known and unknown, that just sacrificed so much to bring

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as we made clear last week, if china threatens our sovereignty, we will act to protect our country and we did >> that was president biden last night referring to the chinese spy balloon, although he didn't actually use that term, that captured the nation's attention. and while the u.s. shot down that high-altitude air ship, the pentagon also disclosing over the past week that it was not the first to breach sovereign air space over the continental u.s. charles beam, who spent many years working in intelligence and in the obama administration oversaw the pentagon's space-based national acquisition process, telling me he suspects that this balloon situation over the past week, that it was a test by china. >> i actually personally think that it was a deliberate -- it was a deliberate kind of trial balloon, if you will, right? just to learn how we would react, see how we would react to such a sort of slight provocation, but sort of a

denial provocation i think they're feeling their way in the great power competition themselves, this new one. and i'm sure they learned a whole lot about public reaction, our u.s. government reaction >> beames, i should not, has not been briefed by the government on the balloon situation is now the chairman of the cybersecurity firm spider oak and also the executive chairman of satellite manufacturer york-based systems, both of which do retirement government work also describing the kind of intel spy balloons can collect versus satellites and how commercial technologies can strengthen defense without having to spend so much on the military we had a very big conversation you can catch all of it on my podcast, "manifest space," which is available wherever you get your podcasts. guys, of course, cybersecurity is in focus in general today fort net, actually, is the best performer in the s&p after strong earnings and another name is also trading up about 3%, as

well >> fort net was also one of those names that was a real huge outperformer in the real exciting days of the cloud software boom. and that's another revival here. we're also showing fox had mixed numbers, actually, on the quarter. it was more or less on target, but a new big share buyback authorization has the market pretty cheery and also, them talking about advertising demand, looking okay so obviously, more or less sold out. things seeming to firm up a little bit on that front even on, you know, on a local basis. and of course, we have disney numbers coming later today clearly, this is much more at fox, you know, a read on the linear networks within disney, which have been, along with everybody else, a little bit tough. but we'll see how that plays through. disney shares have perked up a fair bit >> off something like 50% since bob iger came back

>> since iger came back and nelson peltz trying to rattle the change we were bottoming out around the $90 range. it seems like expectations are building, so they can get a credible plan out there into the public for maybe getting some costs in line, as well >> the blue chip name will be the big one in focus after the bell today you've also got mattel, affirm, robinhood reporting too. that will do it for "squawk on the street". "tech check" starts now. good wednesday morning welcome to "tech check." i'm carl quintanilla with jon fortt. we'll ask chatgpt's first venture investor about all of this hype. vimod khosla will join us later this hour. and uber coming back to art after a pop at open, but some pretty positive territory from dara today >> it did turn negative for a moment there