of engagement. >> and there's more to come. we're turning up our radar to make sure we can see the next one. i guess this is -- we're like in the middle of this whole incident and it's continuing kyle, thanks we've got to toss it over to "squawk on the street" in a second it's good to have you on, kyle bass where are we now 14 >> be sure you join us tomorrow. happy valentine's day. love is in the air see you tomorrow ♪ ♪ good tuesday morning welcome to "squawk on the street." i'm krint, mike santoli at the market 6.4 year on year, the market seems to have priced that in well futures relatively steady. our roadmap begins with that sticky inflation data.

annual inflation down seven straight months, but signs that the pace of easing may be leveling off >> ford is cutting costs, laying off thousands as it shifts focus to evs chairman bill ford saying the company took its eye off the ball. shares of palantir are having a rare day. they're up it slows hiring but it forecasts its first profitable year. >> let's get to that cpi markets waiting for this for days, trying to price it in advance. a lot of focus this morning on core services and shelter especially that's important because, if that does make up the lion's share of the inflation, you could argue it operates with a lag and maybe things are happening faster than the data could reflect. >> it's been the prevailing idea that you could to some degree look through the shelter component. even fed chair powell has more or less nodded in that direction by saying core services x shelter is the super core item we're looking for. that was an annual basis down

4% although still stickier than you'd like to see. the monthly prints are still elevated yeah, the market has had a fix on this. i think just in general the components are not whipping around the way they were last year the numbers themselves are moving more slowly in a what more predictable way you've got an on target reading month over month the buying yields lifted over the last ten days into this. it's not as if the market was caught flat-footed by the idea that we have higher inflation than we'd like you almost priced out the possibility of rate cuts later in the year. not quite. what i find amusing is people, ahead of time the trading desk handicapping how much the stock market would move on various prints for cpi there was almost no room allowed for anything less than a .75 move in the s&p 5005

there's a sense that we got used to this being a spring-loaded number and the market was going to rebel one way or the other. it's not quite the case. maybe the economy remains too strong for the fed's liking. that's not fresh based on today's numbers it doesn't seem. >> the move in the bond market is not much, 4.5, we're at 4.53, somewhere in there nothing in the ten-year. dollar hanging the same. >> on the news but the ten-year was at 3.40 like 12 days ago the ten-year was at 3.40 less than two weeks ago before the jobs numbers you've had this pretty big repricing in there i do note the six-month t-bill is about 5%. that's a benchmark to say this is where we are. the six-month frame is going to capture presumably peak fed funds. that's now above 5%. >> we're going to get more fed speak today. we've had -- i think we'll get

logan harker williams. to what degree does this all get chewed up today? >> they're going to say the job is not done. they'll probably speak in unison about the possibility we might have to do a little more, maybe the peak rate we handicapped in december is not quite there. i don't know the temperature has been dialed down just a little bit at this point. what's interesting is the market responds even to a pretty poor earnings season hasn't been terrible it's not as if the market built up these calluses last year that means it can't get hurt, but there was a little bit of resistance to bad news >> when you say pretty poor earnings season. it's kind of hinteresting to hea poor what are you looking at when you use that word? >> the beat rate the absolute year-over-year growth and also the change in the first quarter estimates that has occurred, the cuts in first

quarter earnings estimates based on what's come out for the fourth quarter number. you're down three percentage points since the beginning of the year based on what we're expecting this year. guidance has been skewed lower what's interesting is, of those companies missing, the stock market reaction has been as benign as you've ever seen it. does that mean the buy side was working off different numbers or investors in general didn't expect much out of it? that seems to be the takeaway. >> we've been talking about s&p earnings being in the 200 area for this year. maybe we talked enough about it -- >> 200 i still don't think is priced in. but we're on this glide path to where it's going down but not in this really shocking way it's kind of happening and it's a grind as opposed to a real huge air pocket in the numbers. >> we're almost done 80% of earnings are in for the quarter. 69% are managing to beat one-year average is 75, five-year average is 77. >> but the magnitude of the beat

is lower they're eking it out it's kind of how it goes right now. companies are really good about making sure that the numbers are not too far out of whack before they actually go for it. >> as we said, we'll get more fed speakers later this morning. we've already gotten speakers from the major banks bank of america, goldman sachs in fact, david solomon said the chances of a softer landing have improve. here is some of what he said >> inflation is still sticky i'm in the camp that it's still uncertain exactly what the trajectory will be of tamping down inflation inflation is a big headwind for growth it's a big headwind for corporate investment i think investment in industrial companies is still going to be relatively conservative for a period of time until there's more certainty so i'm not sure -- i agree with the consensus that it's a softer scenario, but there's still tails, both to the positive and

negative that could be harder. i think we're in an environment where we're probably going to have more sluggish, slower growth for a period of time. >> pretty interesting comments about head count and capital flexibility this morning >> i think that's where everyone's mind -- the economy hasn't given way as quickly as you would expect if you're expecting a much harder landing. we know that the january credit card spending data was way to the upside based on expectations. obviously the jobs numbers are where they are yesterday housing-related stocks were leaders on the upside you had the home builders up like 2.5%, home depot, lowe's, sherman williams, the whole complex. it seems as if even the housing market on this one percentage point drop in mortgage rates all of a sudden got a little bit of a rebuild of demand. it's certainly not happening quickly enough that's the question. if the fed really says, well, that just means we have more ammo to raise further on the

rate side and do more to be sure inflation is taken care of or we're willing to see how this plays out. those are the two sides of it. the leading indicator suggests we should geta good deal of slowing. short yields being where they are, a lot of loans reprice off that stuff it should actually have some effect >> that's a good point in terms of at least those companies that have a floating rate capital structure. it's not looking good if you have near-term maturities and have to reprice at far higher rates. as for housing, in this latest report, rents were still up. i guess it lags in terms of catching up with the current data residence up 7%, 8.6% year over year for rents. >> based on the way it's calculated, everyone has been kind of schooled on how that's going to have to work its way through more slowly. people are fixated on the more realtime indicators of rent

listings, things like that, that seem to be more friendly we'll see if it comes through. remember last year we were waiting for used cars to start to actually help out on the inflation reads way after the actual market-based measures of used car prices -- >> do the home builders usually lead us out of a downturn? >> the early cycle, pretty much. they're still well off their highs. >> that's a pretty aggressive chart. look at that move. >> apollo has good charts out today that financial conditions are easier now than when the fed started hiking. >> by some measures. the value of the stock market is down to a degree so that's a drag but definitely not super tight joining us with his take on the markets and the data this morning, schwab asset management cio and ceo omar aguillar. do you consider this morning's number sort of a push or some marginal improvement in the

picture? >> well, it's certainly more of a push and certainly more of a tie between the dovish and hawkish views of the market today. you can basically take any side and look at this report to confirm your views one way or another. on the one hand, the report suggests that inflation is still high, and, therefore, that gives the fed and all fed officials more am nation tmunition to cons hiking path. on the other hand, you'll say the long-term trend on inflation is coming down and, therefore, the possibility that the economy will stay in a soft landing will probably be the best cased scenario you can basically play both sides. >> are you a proponent or a follower of this view that getting to four, let's say, can be done but getting to two will be a multiple in terms of difficulty if so, does the market have a moment of clarity when they come to the realization that that may be the case?

>> we have several forces on this, carl on one hand we have the market dynamics that basically tells them the equity market, they're basically giving one particular view of what these might look. what that basically tells us is it probably thinks that the rate, we're going to get to that 2% faster. certainly the equity markets seem to be fairly optimistic at least up until yesterday that basically think, yes, we'll be in the soft landing or no landing scenario on the other hand you have the bond market and it's giving us a very different picture, very much in the camp of an inverted yield curve that is really, really historically high, in between the twos and the tens that basically suggests there will be a recession and, therefore, the fed will probably need to stay a little bit aware of the financial conditions. the last thing you have is the economic data. as you said, if you look at this morning's data, that would suggest that the pace forgetting to that 2% is going to get longer so our point of voou is, because

we have these rolling pieces of the economy moving, it's going to probably take some time before we can get down to 2%, maybe to 3% to 4% at some point during this year but it will take much longer to get to that 2%. >> omar, where does that leave you in terms of trying to assess the risk-reward when it comes to things like equities if they've priced in a fairly friendly scenario and thebond issue is taking issue with that -- >> the equity market has these particular characteristics to look through and try to extrapolate the future probably down the road regardless of how long the economy and the economic data actually takes to look so it's usually ahead of the curve. now, the challenge with that is, in order for the equity market to be a little more clear on where that is going to go, we need a little bit of stability i think from our point of view,

the stability of yields in the bond market is exactly what will probably determine that inflection point if you look at the ten-year yield and the volatility of that ten-year yield in the last couple weeks, it's been incredible to see how much and how fast that moves. it's not until we get a little more stability of those yields and prices on inflation that we'll actually get a better sense of the market. we expect more volatility in equities until we get more stability on bond yields and a little more clarity on this rate of inflation decay >> so does that mean at this point that you are not warming up to increasing your weight, let's say, in equities some of these six-month t-bills, does that remain a nice place to park >> i think the ability for us to actually open the possibilities. we have been discussing these even from the last quarter, in the kwaur quarter we say t is

pretty much there and it's opened up to a lot of good possibilities. the yields you get on the short part of the curve, it's something that's very open now that we didn't have before and you actually wait probably for 12 months to 18 months you're probably not going to get as much as you can actually get today. in many cases, opening up to different diversification options including bonds is probably more open than not. >> right i always think back to the time where there was no alternative, certainly not the case arguably today. thanks so much, good to see you, omar aguillar. when we come back, ford cutting jobs in europe, adding some in the u.s. tesla meantime changing prices on some of its models in the united states again. fourth pricing move in a couple months futures have gone red on ts hi tuesday. important data with cpi. more "squawk on the street" is straight ahead ls and can help me reach them with confidence. the markets may fluctuate but you're still on track.

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ford announcing it plans to eliminate about 3,800 jobs in europe over the next three years as it faces heightened competition in the ev space, so to speak the majority of cuts will take place in germany and the u.k ford says it still does aim to offer an all-electric fleet in europe by 2035 europe oftentimes ahead of us in terms of regulations and the need to sort of meet them when it comes to the environment, esg and any other sorts of areas

not a surprise here. this is the priority for all the automakers we know that that's kind of where we are right now. i think gm is, what, 2030. that's not too far away. >> certainly not the model years where they have to get it moving, get that stuff built bill ford, the chairman basically saying maybe we took our eye off the ball on the existing business, in other words, let it get a little undisciplined perhaps in the short term because we're going so hard to try to remake the company for evs. i think that pretty well encapsulates the fix that the old automakers were in. >> he didn't throw jim under the bus, so to speak, farley under the bus. >> not at all. we have limited attention span and resources. so made some trimming around the edges. the way the market views these stocks is, look, you have kind of a core business that's no growth or worse, and maybe at a bad point in the cycle and

you're starting to see a little wear and tear on consumer credit worthiness with regard to auto finance. on the other side they're doing what they need to do on evs it's still something you can't bet on is going to succeed at scale. so i think that's where almost everybody is then you have the tesla changing the prices all the time, and dialing it up. i wonder about that in a sense -- >> they've got dynamic pricing. >> dynamic pricing, but don't all automakers they just don't change the list price. they change the incentive, tell the dealers go harder or sorter. >> tesla doesn't have a dealer network really. >> exactly so you see it. it's just more visible so you're responding to short-term market signals and supply and demand. >> a great note earlier in the week about how covid flipped the margin profile of the dealer network upside down. maybe now we're reverting. he's been a long-time critic of

dealers who sell above msrp because he thinks they're doing long-term damage to demand. >> it's a tricky thing you've heard both sides of it in terms of whether it's an advantage for the legacy automakers to have that or it's really an impediment to change because their incentives are in different directions from the manufacturer. >> avis with a double beat, 1046 beat 645, rental days, pricing, north america, international, david. kind of a repeat of what stephen sure told us at hertz. >> we'll have the ceo of marriott join us later in the program as well. we'll talk about that. people continue to spend on experiences, so to speak, on getting out and getting away there's tony capuano he'll join us later in the program. that call is going on right now guys. >> out size affect on the dow transports, avis budget.

>> is that true? >> i believe so. it's a high-priced stock so it's in there some days you're like why are the transports running >> i saw a couple notes this morning looking at the transports and wondering whether or not we're at some sort of inflection point >> it's a tougherer signal to rely on than it used to be let's put it that way. i was going to also add, the jonas note on consumer finance today from morgan stanley. he's trying to essentially sound a note of caution coming out of their consumer finance analysts saying consumer delinquencies is something to watch and ford credit has guided below the street in the last update in terms of the earnings they're going to have. >> synchrony is not moving premarket they did have some net up charge data the data last week out of morgan stanley where they cut discover and upgrade amex because of the changing profile. >> on the other hand, capital one, synchrony have been great

performers still to come this morning, as david said, marriott did post the global beat and said global bookings are robust. we'll talk to tony capuano as the futures have gone negative a ttlile swirling action in the wake of cpi earlier today. don't go away. for businesses of all sizes, there are a lot of choices when it comes to your internet and technology needs. when you choose comcast business internet, you choose the largest, fastest reliable network. you choose advanced security for total peace of mind. and you choose a next generation 10g network that's always improving,

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when covid hit, we had some challenges. i heard about the payroll tax refund that allowed us to keep the people that have been here taking care of us. learn more at getrefunds.com. crude oil had been knocking on the door of 80 earlier in the week, currently down about 2%, though, as we are getting word there will be another sale of about 26 million barrels from the spr, part of a scheduled release. opec leaving its key forecast for oil supply and demand this year unchanged for the second month in a row opening bell coming up in just

about 5 1/2 minutes.

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3% of our business is large deals, almost $50 million. some people love that. some people don't. i like it because it means we're a little more recession-proof. then you have a tale of two stories, tale of two cities. the average revenue size went from 6.5 to just over $5 million. so it's decreasing it's decreasing for exactly the reason ryan says, because we're doing well in the u.s. most u.s. commercial customers don't buy $50 million contracts. they buy $2, $3 million contracts. i think we'll see a lot more on that. >> after the company posted its first ever profitable quarter, beat on margin, guiding above for the full year on opinioner net as well. >> pretty well received. an interesting moment for it, too, in terms of obviously the journey that the stock has been on on the last three years.

>> a direct listing, wasn't it >> on the first day it closed at 950, first day reference price was 7.25 it closed at 9.50 on the first day of the listing 50 times sales now, like a lot of these, they had the big multiyear reckoning, it bottoms out in the single digits again mid-to-high single digits. now up a lot from the lows now it's, okay we can get a fix on the revenue run rates, seven times sales as opposed to anything else, and everybody is obsessed with ai al of a sudden. it all comes together in this little bump today. >> commercial revenue is growing a lot faster than government revenues but still make up a far smaller percentage of the overall revenue pod. u.s. commercial revenue up 67%, the government um 19%.

yeah, one cent a share, gap. >> that's right. it's a gap number. >> and should be somewhat more predictable because it's half government [ cheers and applause ]. let's get to the opening bell at the big board, black women on boards at the nasdaq, focus on gene therapy mike, you mentioned ai we did see a bit of a reversal in some of the big bear c 3ai yesterday coming back down to earth a bit. >> yeah. some of the smaller sub scale kind of buzzy ones did reverse although, also noticed this morning b of a has a note on nvidia saying essentially this huge ai arms race is likely to really ramp the growth rate for their kind of chips built for

it 25% revenue growth as far as the eye can see, they're saying. they raised the price target up toward -- i think it's like 275. it was kind of a refreshed look at nvidia and an excuse to raise the price target but already nvidia is the sixth biggest market cap company in the market it's a 1.5%. you have this push-pull of ai is going to be huge, but has the market gotten there? >> i tweeted a speech that jensen huang gave at berkeley where he said it was a very, very big deal and the iphone moment of artificial intelligence i know -- i think it was morgan stanley yesterday said a lot of this is being overstated in the near term. but the way to play it is unquestionably nvidia. >> right it's funny because it's been -- has it been a week since the microsoft event?

you've had the shock and awe of the display, of the rollout. then you had the backlash. look, this is just what software is and this has been around for a while and it's buggy we have the backlash to the backlash people saying, no, actually it's going to be huge and you have to not ignore it as a driver if nothing else, corporate efficiency and productivity gains. if not, the consumer applications -- [ cheers and applause ] >> looking at microsoft over the last few days. we have talked about the growing disparity in performance of microsoft and alphabet given the fact that investors are focused on the opportunity microsoft might have with chat gtp, even in the bing platform, but many products in the enterprise versus alphabet which is down yet again. the loss of market cap there over a one-week period i haven't done the math but it's got to be substantial. take a look at what's happened over 13% that's not with a market down

anywhere near that during that period of time and/or its peer group of the mega cap tech which is basically up. >> it's clearly -- the street is really downscaling what they think is the defensibility of search mode and the projected profitability of that business it's trading again like a market type multiple. 18 times earnings. you wouldn't say all of a sudden it's dirt cheap. it's cheap based on google. >> is that ex- cash? >> no. people would argue that microsoft because expense based comp, it looks more expensive than it is but nonetheless, there's a compelling sum of the parts argument for alphabet right now. the thing was, you never used to have to do that because you were marveling every quarter at, oh, my, can you believe a company of this size still grows at 20%

it's not happening like that anymore. >> while we're talking microsoft, we might as welcome back to activision i've been following it pretty closely, coming off the cma decision last week which seems to have largely doomed microsoft's efforts to acquire acti activision but it's not as though activision doesn't continue to get a lot of focus from the investment community, in part because so much of the cash, if the deal were to fail, the company would have in fact, it goes beyond -- i think it's the 14th of april, you get another half a billion from microsoft to activision that would bring the reverse term to $3 billion yesterday the cfo of activision was in boston, today in new york, doing some conversations with investors i think yesterday was the jeffries lunch today another couple brokerage firms. when asked about what they're going to do with their cash, the cfo said, listen, we have a disciplined approach

we're going to evaluate the dividend or a dividend, buybacks and even m&a which was surprising to some in the audience as well as an aside, i'd mention there's been speculation i've heard lately, because morgan stanley put the name on the restricted list have they been hired in some fashion? is there a possibility of defense for activision because maybe somebody is in there thinking, well, we want to make sure they return a lot of cash to shareholders. we'll see. elliott's name has been mentioned. no real sense as to whether that's true, but did want to mention it overall on activision it's held up very well very well. obviously the spread to the $95 price in microsoft is significant. it always has been it will continue to be even though there's still a glimmer, people hope, of hope somehow, they could agree to sell a division which seems unlikely, reach a deal with sony, seems unlikely, to overcome the cma's

objections. >> over the span since the bid was out there, since microsoft agreed to buy it, for a while it looked like there was a lot of downside to activision because the rest of the peer group had a bad quarter and they went down, the valuation looked like it was mismatched then it just held it steady. that bid out there held it in place to the point where the rest of the group caught up, and it looks like it grew into the valuation a little bit >> yeah. by the way, on activision and activism, the possibility -- i don't want to make too much of that because there isn't too much come back to salesforce. not much to report there most people looking more for the likelihood of a settlement here of some kind with elliott. here we noel yot is there. the nominating window opened the other day. no word there. benioff does like to avoid conflict to the extent that he

can. he put mason more fit on the board like that from value act again, just waiting to see here. if you get some sort of settlement with elliott, what would it include a new board member or two? is there some roadmap to higher margin target, roadmap to succession again, we'll see, but certainly one we remain focus on i haven't been able to come up with much. >> wales fargo is out this morning with a note of salesforce really looking at the margin expansion possibility and saying there is a path to like 500 basis points in fiscal '24 so the idea being there's plenty of room. the company has spoken about even incremental cost cutting beyond that point. just, if nothing else, it creates the sense that there's a little bit of urgency and impetus from the activists to do what can be done within the company and get the profitability up

the market never -- for years never cared. so it's not as if they tried all along to maximize bottom line profits and failed it's just that they weren't run that way i think that's the argument anyway wells anyway has a 171 price target based on achieving those expectations -- its price right now. the price target is up 36% from here >> apple having a little difficulty in this tape. most dow components are down, but apple is down the most this ftp is pretty interesting about stumbling blocks as they try to move some of their supply chain to india there's a line in here that one of the suppliers, tatta, one out 06 every two components coming off the line is in good enough shape to be sent to foxconn for assembly they obviously are sending executives there to train and get that supply chain up and running. that's going to be an interesting migration, a huge

undertaking. on the upside, ted lasso is coming back for their new season march 13th >> i don't know how that fits into the earnings model. i don't know the street really has a good fix on what that does for apple plus churn my rule on apple is when you get these stories about supply chain or order cancellation, volumes and manufacturing issue. if the stock responds, it's because the stock needed to do that anyway. meaning that -- i think apple has given the benefit of the doubt that they're going to sort those things out if we're down 1.5% on apple, it's because people have been piling in, it's still on the expensive side and it was moving with the index or pouring the index in this nasdaq move as opposed to specific pricing in of volumes. >> they spent about $5 billion in content just to the ted lasso at apple amazon at about $8 billion,

disney plus $16 billion, netflix $17 billion. when it comes to content spend for an apple, it could be infinite nobody cares what they spend amazon less so, but still i brought up this idea would amazon ever consider saying we're done that's a lot of money they could cut very quickly if amazon chose not to sort of continue to pursue their content strategy. no sign that that's the case when you mentioned ted lasso, i think about what they spend. apple is a real player, again, you can put those dollar numbers in some perspective. did they buy michael lewis' treatment for sbf? did you guys hear this i heard they spent -- i heard it's $10 million >> just for the option >> yes, yes! >> aren't there -- >> better to be lucky than good. >> how many projects do you think there are at this point?

everyone has got one every streaming service is apparently hustling to have their version done. >> without a doubt. >> lewis has got the in, right >> he's got the in everybody. you don't have one >> isn't lewis famously talked about how it's such a greats game sell the option, renew it all the time and never make the movie, which was the case until "money ball. consumer names, coke is a beat you heard quincy on with era earlier this morning, revenue ahead. organic up 15, street only looking for 10.6 leads you to walmart as well, the only other name above it along with mcdonald's. a couple pieces on walmart one is the journal piece yesterday where they're pushing back on suppliers saying, hey, enough with the price hikes. then this tech hub strategy where they're going to sort of revamp their forward looking tech lay out and force some

workers to come back. >> walmart's version of what amazon went through in a smaller way, essentially saying maybe got overambitious on this stuff and going to be trimming around the edges. so, yeah, also, indications are that they're probably going to have pretty decent quarter that's the way some of the sell side notes are treating it as well although expecting conservative guidance in the motive of walmart. yeah, trying to again get fit. it's the rule right now. >> what do we make of andy jassy telling vft he's going to double down on physical storage >> i don't know about that i don't know what doubling down means if that means we have the whole foods footprint and we can use that as a vehicle of expansion or more the experimental models. i'm not really sure. >> is he at the two-year mark? or two since bezos said he was leaving. >> yeah, right not actually i think it was the summer, it will be two years this july,

from memory, he'll be in the job. hasn't been the easiest. >> i remember jeff bezos announced he was leaving and it was the perfectly timed peak moment for that category of stock after the pandemic he nailed it pretty well. >> do we buy when he comes back? i'm kidding. >> by the way, maybe think about the content spend. it seemed like he took a personal interest, bezos did >> yes, he did. >> here is how you tell a story, make an epic. >> had his hollywood moment, yes. $8 billion that's all it costs. come on. it's nothing, and buying mgm >> when we come back this morning, earnings, travel demand and inflation. we're going to discuss it all with ceo of marriott first on cnbc as we go to break, check bonds today. if you miss cpi, .5 was pretty up in line but up from the prior .1

6.4, looking for 6.2 the ten-year still trying to hug 3.75 be right back.

boeing has shot to the top of the dow component list this morning as the white house scoops some news, saying air india ordered 220 boeing jets. that including 190 max, 20 dreamliners, 10777x with an option for 70 more as they say the airline is trying to transform itself under tata. the dow down 104 be right back. the house whisperer! this house says use realtor.com to find options within your budget. good luck young man. realtor.com to each their home.

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marriott reporting quarterly results this morning it was a beat on both the top and the earnings line. strong travel demand continues marriott international's ceo phil capuano joins us in a first on cnbc. let's start off, on the conference call you said we have not seen signs of demand softening. it's early in the year we've got a lot of cross currents do you expect that to remain the case for the remainder of the year >> good morning. we think so. the forward booking data looks

terrific i think what's most encouraging to us we're seeing strong recovery across all three demand sectors. if you look at the quarter, lee sure demand was up 7%, group was a particular highlight up 10%, and business transient was 90% recovered and for small and medium-sized businesses, actually up 6% but i want to go back to group for a print becaminute because your point when we look at forward bookings for 2023 we're tracking 20% ahead of where we were a year ago. >> interesting business travel, something that we talked about endlessly during the heart of the pandemic and whether or not it would ever come back to what it was in 2019 where does it stand right now in terms of the recovery? and again, what are your expectations when it comes to the remainder of this year >> so in the u.s. and canada, our biggest market, we're 90% recovered to where we were

prepandemic, but if you go a level deeper, small and medium-sized businesses, which represent about 60% of our total universe of business transient demand, are actually 6% ahead of where we were in 2019. it's the larger companies that have recovered more slowly than we would like, but even there, we have a subset of special corporate which are prenegotiated rates with large employers and we actually rolled over their rates for two years as we came into 2023 we did re-enter into negotiations an we've been able to negotiate rates increase in the high single digit its, which i think bodes well for business travel into 2023. >> do you think it's ever going to get back to prepandemic levels >> i hope so what i've said previously, and i really believe this and i think the data bears it out, i don't for a moment believe overall travel is permanently impaired,

but i think it's going to look a little different one of the things we talked about on the call this morning, what we've thought of as shoulder days thursday and sunday, have actually recovered for quickly, which i think is evidence of this idea of blended trip purpose, and interestingly, if you look at business trips that we accommodated in 2022, they were 20% longer in duration so we have more and more guests tacking on a couple days of leisure, pre or post business trip and while the mix might look a little different, i think travel will continue to recover in a really compelling way. >> tony, you've highlighted the digital growth and the usage of your mobile app and essentially what percentage of your business is now atrip buteble to that what does that mean for the booking networks and inventory there? is there a push-pull on that

front? >> not necessarily i think what we learned particularly in the pandemic, the travel intermediaries and otas are a valuable partner for us they allow us to access guests we might not access on our own, but what we saw over the last couple years, while the otas grew, our share of proprietary channels is growing more rapidly. those are, obviously, very efficient, very cost effective channels for our unit. >> labor availability, how would you rate it relative to the worst of coming out of covid >> meaningfully better we are, in terms of available job openings in the u.s. and canada, we're actually below where we were in 2019. last year the company hired 190,000 new marriott associates, and so we're really encouraged about the career opportunities we can offer our associates and

how that's manifesting itself in terms of our ability to step up. >> tony, in his state of the union address, the president actually spent a little time talk about cracking down on junk fees at resorts and hotels, airlines how, if in any way, is that going to impact your business? what was your reaction when you heard it within the corporation? >> well, we like any americans, lusten closely to any comment during the state of the union. my takeaway what president was focused on was, quote, hidden fees when you look at the manner in which we disclose resort and destination fees, number one, number two, when you look at the value proposition that we require our hotels to offer in exchange for charging one of those fees, and three, when we remind ourselves with a global portfolio of 8300 hotels, less than 300 have those fee, we

think we're in a pretty good position relative to the comments from the president. >> and finally, tony, having traveled very recently as well, housekeeping service has not returned to an everyday affair in many of the places you may stay is that simply where we are right now and something that will continue, a way to improve margins for many hotels, or will we ever get back to everyday >> we're in the hospitality business our housekeeping is evolving based on the expectations of our guests and the economic realities our owners and franchisees face what we've rolled out varies by quality tier in our luxury portfolio, we are back to where we were prepandemic. full housekeeping every day. in our full service portfolio, we're doing a modified daily service and in our select service portfolio we're doing an every other day modified service. so we think we're meeting the needs of the guests and being sensitive to some of the

continued cost pressures that our owner community faces. >> all right sounds like we're more of the same on that appreciate the updates thank you. >> thank you so much, david. when we come back this morning, bank of america chief brian moynihan, his take on inflation, the consumer and more as the market seems to have repaired some of the opening losses s&p has gone green 4140 and the dow shaving its losses down 40 points we're back in a moment

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welcome to another hour of "squawk on the street. i'm here with morgan brennan and david faber live at post nine of the new york stock exchange. bright side of cpi which comes in mostly in line, 4145 will take out mond's high and send us back to levels on thursday. >> 30 minutes into the trading session. three big earnings movers we're watching coca-cola beating on the top line thanks to higher drink prices that sent the company seeing faltering demand for simply orange juice and fairlife milk with those volumes down.

shares are flat right now. shares of global foundry are higher after a records beat. the chipmaker guiding higher, the stock up 7% right now and it is up more than 20% over the past year and up almost 10% just to start the week. finally, shares of palantir surging after posting its first profitable quarter ever, expecting that to continue for the full current fiscal year too. the dual use software company growing quarterly revenue 18% with u.s. commercial sales up 12% and customer count up 79%. government contracting, though, still a majority of palantir's business and the ceo saying in his quarterly letter, quote, the widespread adoption of artificial intelligence and civilian applications will come soon in the military context, it has already arrived. you can see those shares are up 13.5%. david, it goes back to some of the conversation we had yesterday around everything that's going on with geopolitics in the context of china as well. >> yeah. as you said, commercial growing

a lot faster than government for that company as a percentage of its revenue. >> it is but it's coming off of a much smaller base, much smaller base. >> right. >> all right let's move on and turn now to today's read on the economy and what was a higher than expected report on inflation. steve leaseman joins us to break it down and give us insight here steve? >> hey, good morning, david. you know, inflation was only a tenth and core in line appears the markets came to the realization the fed has been trying to hammer home for months now, bringing inflation down to the 2% target is going to be harder and bumper than markets expected 0.5 on the headline number, expecting 0.4, up from 0.1%. the year over year did tick down but one of the smallest declines we've had since the summer core coming in line with expectations 0.4% ticking down 0.1 but lower than the declines in the year over

year rate over the past several months how did we get there energy came back 2% a reason why inflation was falling. not anymore. home ownership remains strong up 0.7% food up 0.5% with a jump for eggs in fact used cars were down and airline fares were down, but skepticism those declines will continue conrad writing, there is no slicing or dicing of the data that makes uncomfortably high inflation go away. most importantly, fed chair, jay powell,'s most important benchmark, he's highlighted core services, taking out housing, ticked up by a few tenths throw the year over year did come down a bit. we had a pretty big reaction in the bond market, sharp, 2-year yields from 4.50 to 4.60 below the one-year high. more importantly the fed and fed

funds future market, markets in fact, a bit more hawkish near term than the fed, seeing a peak rate of 5.25 in the august contract and a tweak down to 5.04 by year end, bit below the average for fed officials. no difference at all high frequency economics writing, for fed officials, a slow grind down in inflation only supports the higher for longer view on interest rates. policymakers have more work to do in lowering inflation back towards target and are likely to continue lifting rates right on cue, richmond fed president thomas barkin in just the past hour in a bloomberg interview saying that after the number, that there's a good case for leaving rates higher for longer guys >> steve, we know data is only as good as what you collect and how you analyze aggregate and slice it i have two questions for you here and the first is, peter this morning points out in terms of the cpi data collection, that the bls has changed how they

calculate it and using a one-year comparison rather than two. i'm wondering why and what that does to this inflation reading discussion and also, just as importantly, we're coming up on the year anniversary of russia invading ukraine and sent inflation higher in the months following it what is that going to do this year as we look forward to the year over year comparison? do those matter or is it more about month over month >> let me take these sequentially the bls for what it's worth is trying to get a contemporary look at the dynamics of inflation and what they've done is gone to seasonal adjustments and weightings that are one year old rather than two years old trying to reflect a more dynamic economy, dynamic pricing structure. i can't allergue either way and they thought about it was a better way to builda mouse tra to capture prices in the economy. what we know, it did lift up inflation rates in december so

that december rates we thought were lower minus 0.1 became positive 0.1 and they resvised p october and november for the year over year, you're correct, you will have a decline because the boosts to inflation that came after the invasion of ukraine will drop out of the index. that's why we're looking at these three and six-month buckets and the trouble with those right now and one of the reasons is the big disinflation dovish case, morgan, was built on the three-month rates and this number today it does put a wrench into the idea the three-month rates were moving down slowly and now there's more wobble in them. >> steve liesman, always love that we can ask you questions like this and get as wonky as possible and you've always got an answer in english, i might add, to counter for our viewers. >> thank you. >> appreciate it. joining us at post nine,

goldman sachs equity strategist david kostin with his reaction to today's number and what you think it says directionally about the pace of inflation? >> karl, i think there's two big issues happening right now the first is the macro data has generally been pretty supportive of the idea of a softer landing and that's an important backdrop in the equity market, business basically values that or valued it in such a man her, but under the surface what's been happening is the micro developments, individual stock specific information is driving performance. those two are happening at the same time. macro economic supporting the soft land, the market trades at a level cyclical stocks relative to defensive stocks. the valuation in the market 18 times or almost 19 times earnings pretty expensive. the market is basically giving that full acknowledgement of the equity market in terms of the underlying economic data but the dispersion of the returns in the market that's the separation and the stock picking up opportunities that are more

prevalent and really responsible for the individual stock performance. >> right so you raised your near term target on the s&p, three-month target. >> correct. >> but not year end. i asked you last time what it would take to get the year end up >> 4,000 is the level of the market we're anticipating at the near term as well as into the rest of the year pretty much around this level. choppy around that level the argument is that basically the rates, the interest rate complex, likely to move slightly higher going to put a ceiling on valuation expansion. you have basically earnings is really the key driver for this year and unfortunately, the earnings results have come in for the fourth quarter and earnings were down year over year about 1% and last time we were here we talked about margins as a key headwind and margins were worse than anticipated. margins compressed by around 100 basis points expectations had been around 80 basis points of contraction.

put that in context, 45 in the third quarter, first time we saw that since the pandemic, expectations 80 coming by -- down about 1%. that's a headwind. the markets basically price in that and we have an idea of an index level around 4,000. >> we rallied to start the year with major averages with the margins coming under pressure. why? >> the idea of, you know, some of the economic data, the labor market is an example, much stronger than was anticipated. morgan, you get lots of information under the surface and if you think about the conference calls, pretty much we went through 500, the transcripts of that, using, you know, digital information but also reading through the transcripts and you've got a pretty strong diversion of opinion on the part of some executives anticipating a recession is likely. others say things are getting better issues on margins, the inflation reduction act, all commentary from management. i think that's the story that we see is the dispersion of returns has been much higher than we've seen in the past

that's really the driver and the story of this year more micro than macro. that's an expression often used but the quantitative data supports it's more driven, return to the market is coming from individual stocks, as opposed to a macro level raising level of the market. >> if it's stock picking opportunities now, i hear many years we come into it, this is the year for stock picking, then we look at the data, active managers always trail the indexes, every year. what's wrong with them >> nothing wrong with them they trail the index because there's a cash drag because they have cash in the performance now cash yielding almost 5%, but historically that has been an issue. the active management fees those are the two issues broadly speaking the fund managers on active side trail the index. if you think about last year, like 60, 70% of the returns for the market came in a macro level because the index itself was

falling, rates moved dramatically that was last year this year it's more consistent with historical patterns more than half of the returns, 56, 57% of the return of the market is coming from individual specific stock specific. so there's a lot of debates on individual stocks. where there's strong difference of opinions on the part of portfolio managers and these are the conversations we have with fund managers. i was in israel, dubai, europe the last week, next week asia, talking with fund managers it's more of a conversation about stock picking than it has been in prior meetings >> we love that. >> so what does that mean in terms of what you and the teams at goldman are picking >> we think about it, from a sort of top down perspective, we want to think about energy micro and macro, those two things the idea of energy prices staying high, that is the idea the energy companies returning more cash to their shareholders. they have huge amounts of free

cash chevron put a $75 billion share repurchase program each of the next five years, buying a good part of the company. that is a general trend, higher dividends, more buybacks, that lift energy companies. the health care sector health care stocks under valued versus the past. micro, where is the dispersion expectations to be really, really high. you're going to see better stock picking opportunities, consumer discretionary and those in communication services where there's a lot of debate around artificial intelligence and things like that a micro and macro story. that is the story we're seeing in the market playing out. >> finally, some of your peers on the street, one, for example, argues bear market is over given tightening or conditions credit spreads fed cycle, earnings haven't fallen apart others say it's a classic bear market rally where you think the market is sniffing something out but fundamentals will return >> the economic data is pretty supportive the market is valuing that right now

the risk of higher earnings or the positive story is limited. margins still likely to be under pressure not a lot of downside to that. our forecast is you have flat earnings for this year the big risk is the debt ceiling debates and we talked about this in the past historically speaking 2011 as a template, market dropped 17% in 22 days because of that uncertainty. that's your variable and kind of your third quarter event things are okay. unfortunately the market is pricing that you have to look at under the hood. >> yeah. market is going to be an interesting summer good to see you again. >> nice to see you. >> thank you. >> as we head to break, here is our road map for the rest of the hour ubs director of floor operations art cashin joins us with insighinsigh on the latest inflation test. >> for sports books ahead of march madness one of the largest listed gambling companies considering an additional public listing in the u.s we'll discuss that. >> after the break, bank of

america ceo and chairman brian moynihan, an exclusive you do not want to miss stay with us across the country, people are working hard to build a better future. so we're hard at work helping them achieve financial freedom. we're proud to serve people everywhere, in investing for the retirement they envision. from the plains to the coasts, we help americans invest for their future. and help communities thrive.

its financial services conference today let's get to sara eisen who has a special guest. hey, sara. >> good morning. i am here at the bank of america financial services conference with bank of america ceo brian moynihan thank you for having us here. >> thank you for coming.

hundreds of investors and a bunch of ceos and other companies giving their view of the future it's good you could be here to put that out in the public domain. >> good. let's talk about the view of the future we got an inflation report widely discussed this morning. seventh month in a row of cooling inflation, 6.4%. what's your assessment of how fast it can come down from here? >> i think the question sort of the stickier, not sticky components and elements but labor markets are strong and you've heard chair powell and others talk about that because, you know, the rally is new claims for unemployment low, not hiring as many people or slowing down in mying hiring, layoffs, but still don't see a major adjustment in terms of the employment rate. that job and wage tightness and things is something they have to see. it's flattened out rent is the other big one and rent has a seasonal pattern to it and, you know, you think about school changing and september rent starts and you have a kick up and then you have represents come down and they came down twice the percentage

they usually fall in the latter part of the year and down in january. that's coming in line. it will be slow to get through as you look forward, our team has recession predicted and moved it out another quarter recently to start in the third quarter, fourth quarter, first quarter of next year and lessened the impact. i think people are coalescing around the idea maybe this is not a soft landing, no recession, but mild recession, and the delay is due to the strength of consumer and other things the fed will have goat inflation where they want it and hold rates higher and that's the conundrum going around the market the change 0.5%. the next incremental is not as big. one of the fed voters a long time described to me, one of the great ones, said this is like we're climbing a rock wall it was hand hold to hand hold at points like this, looking at the data and seeing what's happening. everyone thinks there's a grand scheme the data is saying it's softening but not down to a level or flattened out.

>> the market is excited, two more hikes and then a pause, maybe then cuts. is the market -- >> we don't have cuts this year. >> no cuts. >> you have to make sure it's choked down because it's much higher than we've seen we talked to central bank head that's not a central bank head anymore, and he said, we died to try to get inflation over 2% the idea that it's to get it back to where their targets are will take time to manage it. >> so as far as the economy is going, you said you moved out the recession call, your team did. consumer spending, you've got a good read on that and you said six weeks ago january started strong how has it been in early february and what are you seeing now? >> if you take like the first quarter of '22 versus first quarter of '21 the rate is double digits, 12, 13% numbers, that's now in the fourth quarter of '22 versus the fourth quarter of '21 fallen and january picked back up. year to date 5, 6% which is consistent with a 2% growth

economy, consistent with a low inflation economy and that's what it was sort of in 17, 18, 19, ran at that level. it's not going down anymore, not slowing down it's year to year growth off a high base and you actually look at it, and it's solid. that means consumers are in good shape. they have money in their accounts, capacity to borrow they have -- they're employed. 3.5% unemployment rate plus or minus. the wage growth is relatively strong inflation is tough on people who are -- the rate of goods is exceeding the wage growth and that should come back in line as they choke it down overall, the consumers are in good shape in america. >> loan growth where are you seeing it strong and where are you seeing it slow down >> right now, it's kind of bumping along because, you know, the economy is sort of flattened out in terms of expectations businesses are being careful and so what do they borrow for they borrow to invest in people and plant and invest in inventories and trying to make

sure they're right on that, and that's been interesting. line use has flattened out a little bit we have mid single digits and consistent with that the overall market is flatish in loans, this data that comes out every week or so you see it. it's bumping along now we're seeing a little bit of growth in the commercial businesses, flatness in the consumer businesses and then in the markets business that goes up an down depending on what's going on. >> what about housing which has been hurt by the higher mortgage rates but some signs of maybe stabilization there as mortgage rates have come off the highs? >> we're going along in housing. after the financial crisis us fell back to sort of the 3% long-term rates and spiked in the pandemic as everybody ran for different question, fell first and then spiked back and now tipping back down. i think it's going to get back at a healthier balance the rate structure move hits housing fast and now you're, you know, since that started last summer, you know, in earnest, last year at this time, you're a year away from it and the first

big moves in mortgages started slowing down housing and you're seeing the stability in mortgage production but down from where it was prior to the pandemic it should be that's what fed is trying to do, a measure of health and inflation they need to cool down and that happens first because it's rate sensitive. >> we're here at a investor conference over the last three months or so thebanks stock performance is higher, but you have lagged. your stock is lower over the last three months. what is the issue? what are you hearing >> we're up 7% year to date. i think the issue is we're the most sensitive to the interest rate predictions throughout. we've -- there's a belief in the industry, what's happened the balance of deposits were flatish third to fourth quarter and drifted down because the money is going into other investment vehicles that have higher rates still and should and corporate balances and wealth management balances our company is so driven by

deposits that creates more around it. we had a big run up, you know, in the year leading into last year into '22. >> on higher rates >> and enthusiasm. then the kearns. we're doing fine $7 billion in the first quarter and credit is in great shape and keep driving earnings growth. >> what is the outlook for deposits >> the outlook for deposits now, you see the data, it's down a little bit from the year end, a percent or 2 we're in the position that happens every year in the first quarter, people pay their taxes and get their year-end bounce boe us ins the performance is how they thought they would give our ni predictions, $14.4 billion it's happening exactly the way we thought it would. without much variation in terms of rate paid or balances and we'll see it play out. think longer term. we did a million new checking accounts, 100,000 plus banking products wealth management business that's where the long-term value of our franchise is growing, the

core deposit base. the ebbs and flows of what's going on will happen but long term that provides value we grew deposits during the tightening cycle what we didn't have was the extra stimulus and stuff and moving around people's accounts. the underlying business is strong. >> digital too has been a differentiator do you feel like you've gotten credit for spending i think more than some of your competitors over the previous years and ramping that up more. >> the credit for that, is counterintuitive the way you generate efficiency and effectiveness in a company you engineer out work. digital is a fast way to engine out work our teammates working with each other and our customers and we've been engineering out work. in 2010, when the management team and i started together we had 285,000 people, went to 305,000 people, reached a low of 205,000 people, up to 215,000, 217,000 now. managing that back down. but that's all by a digital enablement throughout the franchise and customer digital

enablement 85% wealth management customers are digitally active with us half our sales are digital more as zelle transfers out than checks written these are changes but they happen consistently and the idea is, everyone says it's going to change immediately it takes time and continuous investment like you said, so we've invested billions in the platforms, erica 18 million userers, chatgpt, erica is an artificial intelligence process -- >> we don't know erica we know chatgpt. >> 18 million are using ours so far, so there's a lot of people using using. >> we did get the stress test scenarios out and 10% unemployment and how do you expect to differentiate yourself there and how do you think about buybacks in the context of what we've learned? >> the stress tests come up every year i think every year except for one, the lowest loss content

from the portfolios by the stress test and built a company under responsible growth the 10% employment has not changed. three or four years ago there was a decision made that the debate was to use, you know, 5% raise from 3.5% to 8% unemployment or the nominal route 10% and left it there. that's not a new difference. the gdp is a change. we'll run it through our models, the models and come out. but the reality is, we should fair better because of the way we run the credit side of the book and market side of the book and we've done that. leave that aside, our capital required level is now 10.4, moves to 10.9 at the beginning of next year we're at 11.2. we maintain a 50 basis points half a percent buffer over the capital minimums so we're buying stock back and bought stock back last quarter and this -- >> you don't expect the stress tests to interfere >> last year it went up 90 basis

points and slowed down buybacks, and it may change. if we have higher capital carbons we'll see. in the grand scheme of things we've got more capital than we need the industry has well cap lies they've done a great job we don't need incremental cap in this industry. the benefits are offset by economic growth. what do we need to do? we need to support the economic growth of the united states and help this countriy can do what t can do. >> you made headlines in the buyback. thank you for taking the time here today. >> thank you. >> brian moynihan, ceo bank of america. back to you in the studio. >> great stuff, sara thank you. sara eisen and thanks to brian moynihan as well. crude oil under pressure after u.s. officials announced plans to sell 26 million from the strategic reserves we've got more on today's biggest movers as well after the break. cti 79.33

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welcome back to "squawk on the street." i'm seema moody. stocks are mixed right now with the consumer discretionary sector among the leaders travel and leisure names are

some of the top gainers including carnival, royal caribbean, booking holdings and trip adviser set to report earnings this afternoon. marriott showing gains after beating expectations on earnings, and its outlook. ceo tony capuano telling cnbc last hour demand remains strong and 20% of business trips were longer in duration last year compared to 2019 levels. that stock trading at a nine-month high. carl, back to you. >> thank you very much. when we come back, blade conducting the first ever ev aircraft flight in the new york city area this morning we'll talk with the ceoabout those efforts, consumer demand and a lot more later this hour stay with us ensors and software. go find leaks. go fix-em. emerson technology detects compressed air leaks to save manufacturers, like colgate, over 20% in energy costs. go brush your teeth. go boldly. emerson.

here's your cnbc news update at this hour. campus police at michigan state say they have no idea what the motive was a 43-year-old man shot and killed three students and critically wounded five others last night

he later killed himself as police acting on a tip confronted him several miles from campus. a hospital official emotionally describes how staffers responded to the emergency. >> we received a lot of texts that were just, you know, i'm on my way with people showing up where do you need me. it was -- it was a sad, but very proud night for all of us here. >> in politics, nikki haley, former south carolina governor and u.n. ambassador announced in a social media post she's challenging former president trump for the republican nomination next year she said she doesn't put up with bullies. in japan the first air-to-sea drone designed to reduce the neighbor needed to check on fishing grounds and underwater fishing vessels

we'll keep an eye on that one. >> it looks cool contessa brewer thank you. an hour into trading, taking a look at the markets, the picture now, we feared the losses from earlier trading to start the trading session and the dow is currently trading just below the flat line down 49 points the s&p is literally flat. it's 4137 right now. and the nasdaq is slightly higher as well art cashin, ubs director of floor operations joins us now. always great to speak with you, especially on a day like today, given the cpi reading we got this morning your thoughts on that and what we've seen in terms of stock reaction so far today. because we did have that revision slightly higher with the inflation data going back three months before this morning's read and then the read today, either in line or even a little hotter depending on which data point you're looking at. >> yeah. i think the other thing you have to think about, morgan, they also made some adjustments to

the index itself, the cpi index, they underweighted some things that had different weights before, it certainly comes with an asterisk. i don't think anybody was ready to take it at full face. you're seeing that, you saw a whipsaw in the market right around the opening when the data came out, and then where now the market is taking its own temperature and pulse, even as we speak there's some resistance in the s&p up around 4160, 65, and i'm going to be watching to see on any weakness if it breaks down below 41 if it breaks down below 4090, which would be yesterday's low, so that would make it an outside day, so i would be a little nervous. we have short-term cycles here that look like they may be rolling over and headed for a

couple days of pressure on the market of course, it's all going to be about the yields you watch that yield on the 10-year get up above 3.75. that's going to be a problem and if it gets aggressively higher, if it goes through 3.82 that will put an awful lot of pressure on the market. >> how much is seasonality at play here, art >> some of it. the second half of february is a bit of a problem we had the january effect and that kicked in well. you could have the second half of february even in through the first half of march, so the seasonality does not necessarily favor the market over the next couple weeks you know, seasonality comes and

goes sometimes sometimes you have to put santa's face on the milk carton and this year he came in on time. >> finally we started the week talking about unidentified objects and speaks to a broader conversation around geopolitical risks. you don't seem to be factoring into the market a major or meaningful way, but they're still lurking out there in the wings, and i wonder whether you think that that shifts and becomes -- moves closer to the for, if that's a risk to the market right now >> well, it's a potential risk i think everybody would like not think about the potential awful effects. i mean, heaven forbid that balloon was carrying a large nuclear device, we could have gotten what's called an enp, and that would knock out the electronic grid throughout much of the united states, not for three hours, but potentially for

weeks and months and the economy would grind to a halt i think that would, obviously, mean war, if they did something like that. so i think people want not to look at that dark side, but i do believe you are very right to keep watching it the difficulty here is that we're in one of those situations where neither side wants to lose face the american administration is embarrassed about it popping up and the debate over how soon or where things should have been done and president xi has ra real problem too unfortunately, world war 1 started because neither side wanted to lose face. both sides knew there was going to be trouble, but didn't want to lose face let's hope people are smarter

now. >> thanks for joining us. >> okay. when we come back, new details emerging around the catastrophic norfolk southern derailment in ohio when we come back .

welcome back to "squawk on the street." shares of norfolk southern under pressure again today, down more than 2% as fallout mounts following the february 3rd derailment of 150 car freight train carrying hazardous chemicals in east palestine, ohio the crash caused by a mechanical issue forcing hundreds of people to evacuate the town for several days as the company vented and burned carcinogenic chemicals. the environmental protection agency says while it hasn't detected, quote, any levels of concern of toxic substances the agency did send a notice of potential liability to norfolk southern's counsel in a press release, norfolk stating it has donated $1 million to 700 families

alongside over 100 air purifiers. analysts at cowen releasing a note saying this will likely force the company to call out a special charge in q1, but that history, we don't know the details and how this will play out, but if history is any indicator, that the impact on shares will likely be short lived. you can see since that derailment, norfolk is down -- norfolk southern is down about 8% and, guys, it's just, i mean, the video is intense which tends to be the case, i should note, with train derailments, but this is a large train. >> also just the hazardous effects of vinyl chloride. >> yes. >> and the temperature at which it boils and the ease with which it attaches to water all kinds of really fascinating and tragic science right now. >> they've been monitoring the ohio river closely apparently and there's a few reports out in the last couple days maybe trace amounts of some of these

chemicals, but that overall water utility is saying that drinking water is still very safe for residents to drink in the broader i think area, and i would note it looks like you already got several shareholder lawsuits tied to this event as well >> okay. it's a story we'll continue to, obviously, monitor let's get back to the markets right now. of course very quickly, take a look at where we are we turned negative we had green on the screen early, but largely red right now. a lot more "squawk on the street" straight ahead for you

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>> oh, it's incredibly important. it's been a great day. today we had the very first flight of an electric vertical aircraft over the greater new york city area this aircraft can take off and land like a helicopter or like a plane. it is quiet, it is sustainable it has no carbon emissions and it is completely electric. it's going to be, as you know, carl, quiet is the great unlock for us in terms of flying inside cities with quiet, we'll have more places to land in new york city and urban air mobility will be much more of a reality. this is part of the transition f helicopters to electric vertical aircraft we've been talking about for some time. >> we've looked at models and seen them and talked about them in theory. it's cool to see it in practice. is the transition about sort of energy, electrifying this mode of transportation or is it more about the noise profile as you point out? >> it's definitely the noise profile is key, emission free is

key as well, because as you know there's a lot of complaints about helicopter noise and the only way to fly within a city is through vertical takeoff the ability to fly like a plane using electric technology, allows it to be absolutely silence in overflight and quiet in takeover and landing. with that you'll that you'll se places to land you will be flying in new york city as opposed just from the east side or west side to local airports the cost will come down, too with eva, there are much fewer parts than a helicopter, lower maintenance cost means lower cost to customers. this will be much more affordable for everybody to fly in. >> that sounds great the fact you're at westchester airport, which is essentially in my backyard, i find exciting, too. but westchester is very different than, say, manhattan when do you expect to roll this out? when will consumers be able to book flights and where will

prices start before they fall? >> well, right now on helicopters you can fly to jfk and newark for $195. we handily beat uber black during rush hour every single day flying 12 hours a day, six days a week. with respect to pricing on this, we expect the price to come down probably over time to that $95 range. in terms of timing, i think you'll be seeing these in the new york area, not with paying customers in 2025, and in 2026 you'll see it as part of the accessible fleet and book it at an affordable cost and get to the airport in a quiet and sustainable manner. >> rob, in the near term, though, this noise issue, i go up on my roof when it's nice out and it's crazy noisy up there between the commuter helicopters at certain times and the tourist helicopters that come from new

jersey over central park, for example, is it a threat to your business in the near term? there's some groups, stop the chop, i think schumer's talked about it is it a threat to blade, the efforts to ban these helicopters because they are so darn noisy >> i think we're doing a lot working with local airports, flying at altitudes and only over water whenever possible we're hearing and seeing tourist operators from new jersey who are not following the new york city edc routes, which are completely over water. so, these tourist helicopters should not be flying over central park or anywhere near your apartment but, you know, with blade, we are taking you from point a to point b. it's not about getting people close to buildings in a city so, when you hear those helicopters, you can pretty much count on it, you're dealing with tourist helicopters. we're talking 24 to 36 months away when we'll transition to quiet and sustainable aircraft

i think we'll be okay for that interim period until we start rolling these out. >> meantime, rob, since blade went public via spac in the spring of 2021, looks like the stock's down more than 50% it's getting a pop today, but given the conversation we're having, are you surprised that investors aren't reacting more positively to the business model that is in place and the transition you do have laid out for the coming years for the company? >> well, we are profitable on a flight margin basis today. obviously, all companies that are small and high growth given the current interest rate environment have been severely depressed. we are very undervalued, in our opinion, and have over $200 million of cash. i think investors have to be careful not throwing the baby out with the bath water. we have to be careful about

executing on our plan, but the path to profitability is right ahead of us. >> it's good to see the test flight today the video, of course, the next step is getting david and morgan and me in one, right you ready, guys? >> yes >> david wants to fly in one i do >> i know. i told david as soon as he gets -- we're going to get you in sooner than you think i hope you don't get scared or anything i know you're a little tepid when it comes to flying, david. >> really? i'm the only one here who has had helicopter ditch training, rob. >> now you're -- >> i saw your documentary. >> rob, that's good stuff. always good to see you. >> good checking in. >> still ahead on "techcheck," strong results sending global foundry shares up. we'll talk to thomas caufield where he sees growth in about five minutes that begins at 11:00 a.m

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welcome back to "squawk on the street." sports betting company fanduel accepted more than 50,000 bets per second at its peak over super bowl sunday. and now parent company flutter

is looking at a potential market debut. contessa brewer joins us with more >> fanduel parent flutter entertainment is considering listing on the u.s. stock exchange, one of them. its corporate board is consulting with shareholders to gain their interest. fanduel is the market leader it's on track for full-year profitability in 2023 according to the company it's 3 billion bucks in annual revenue makes up the biggest segment of flutter's business. but flutter's stock is traded in europe a u.s. listing would expose flutter to new american investors. flutter ceo peter jackson said he had been watching a big advantage in draftkings being publicly traded in that its customers can and do buy its stock. flutter says an additional listing would elevate flutter's brand, help the company attract and retain talent. and the liquidity it would provide to flutter shares in deeper capital markets are alluring

flutter expects a lot more growth in the united states. it puts the total addressable market at more than $40 billion by 2030. that would be more than three times bigger than the rest of the world, according to jeffrey's, which predicts flutter could demand a premium because of its status globally jeffrey katz told me today that he thinks will be a lift for all sports betting stocks if flutter moves forward because it's an expression of confidence in the industry, which was just pummeled in 2022 flutter cautions this consultation with shareholders is preliminary if the company moves forward, it would need 75% shareholder support. just off the phone with the chief investment strategist for ibet etf and he compares this to the apple listing for sports betting stocks he says most people know about draftkings and penn and this would be a significant move forward for fanduel and parent

company flutter, guys. >> contessa brewer, thank you. definitely one to watch. some of those numbers are eye-popping, david taking a look at the daily averages, we are lower. >> as morgan said, down 0.50% on the s&p. "squawk on the street" is over "techcheck" starts now happy tuesday. i'm jon fortt along with deirdre bosa and carl quintanilla. we'll look at what that means for the markets and the high bid of plays plus, checking in on the semi. we'll speak with the ceo of global foundries as that stock rallies more than 6% on the back of strong results. coinbase up nearly 2%, looking to break its eight-day losing streak as the stock fell more than