software may cause crashes it is february 17th which happens to fall on a friday this year, 2023 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen andrew is off today. we have been watching what is happening with the u.s. equities and not so pretty. no rebound from yesterday. doubling down with additional losses dow futures off 157. the nasdaq indicated off 122 s&p is looking down 30 points right now. this comes after stocks tumbled yesterday with the stronger than expected ppi inflation data. it came in hotter than expected.

up 0.7%. instead up 0.4%. you have mester and bullard speaking in favor of the 50 basis point rate hike when the fed meets next in march. neither of them are voting members. they were voting members last year, but not in 2023. they have influence. joe, i looked through the voting members. powell, williams, lael brainard. she will be stepping off to go out. i don't know who they put in austin goolsby he would have that vote there. harker is there. jefferson. neel kashkari. christopher waller richard, atlanta and san francisco.

>> in recent meetings, how unanimous is it? >> it has been fairly close. >> they do what powell wants them to do >> mostly. i think they have discussions and that discussion definitely helps to determine where the vote will go that's why you have to listen even if you are not a voting member you have a voice. >> i'm trying to figure out if people are still affected by not doing anything for two years they are throwing caution to the wind or if there is money left from the stimulus programs this is lasting and the economy after what looked like it was starting to roll over a little and back with a vengeance. >> bank of america will tell you people have more money and more cash in their accounts >> they saved it up? >> more money coming in and a strong jobs market and wages have gone up if you have a job and you feel your job is secure, you don't have too much much a problem saying i'll do this.

>> any other time, you would say this is good news. every time something like that comes out, we look at it and go, ugh. why aren't things worse so the fed -- >> the inflation data we got inflation is not going away. they haven't conquered it yet. >> the lowest. gone down, down, down. ever since march of 2021 we should blame the people with the wrong anticipations. it's their fault. >> input costs producer prices. >> energy. liesman pointed to it. >> that is a fair concern especially if you listen to the people who think energy prices are going back up. >> that is the point where i get frustrated if the only way you will deal with energy is by causing people to use less by slowing the economy, it would be better to increase the supply.

increase the supply. no. markets pulled back yesterday. dow down 431 the nasdaq down 1.8% if you trek out treasury yields, they jumped with the ppi numbers. the yield. 10-year treasury is 3.9% >> the market opened down 350. mid-morning and then in the afte afternoon, it was down 120 it looked like another one of those sessions a battle in the trenches and the bears won. took it down over 300 and closed 1.5% not a lot. >> it raises questions -- >> nasdaq was down. >> that was the gainer because we thought the fed was done.

>> i don't watch comcast, but it was up someone told me that >> up in a down market. >> that's me shares of delivery company doordash are higher. the company reported a loss of $1.65 a share. much worse than the 68 cents fourth quarter orders delivered grew by 27% to $477 million. the company's guidance for the quarter was better than expected doordash blamed the bottom line result on changes related to the acquisition finland based company wolt doordash approved a buyback of $750 million of shares that sounds low. it depends on the market cap draftkings shares are

higher loss of 53 cents a share was in line with estimate $855 million revenue was up from $470 million the prior year. draftkings raised guidance for the current quarter. youtube ceo announced she is stepping down after 25 years at the company. she said she decided to step back and start a new chapter focused on her family, health and personal projects she is passionate about she will continue to work with the youtube teams and meet with creators wojcicki reached an agreement with the ceo to take on an advisory role across google and alphabet china renaissance shares

have fallen and they could not contact the ceo. bao fan last appeared on the account in early december which shes shows him in an event in beijing. bao's disappearance followed the government investigation of one of his company's subsidiaries. you wonder in china, if they ever do have decent disclosure, and the risk factors associated with the company and if it is a possible disappearance by senior management with the government is possible at any time. that doesn't happen in most normal places sdplc >> what this raises is if

president xi jinping is done of them going after business leaders. >> this is the last guy. >> no, i think we thought he made his point this establishes that is not the case >> remember when they walked up to whisper to that guy >> the former president and premier. yes. >> when we think they will come around it is like us eventually the ccp. the ccp is what it is. really nothing should surprise us when will we hear about this guy? >> i don't know. >> where do you think he is? >> i don't know. >> what do you think they are serving him? >> i don't know. would you like to continue with questions i don't know the answer to? >> he hasn't been seen since december >> there's rhetorical? >> yeah.

is he going to reappear? is it possible for him to reappear >> maybe >> does someone know where he is >> jack ma reappeared slightly these are the risks that come with it. >> push disclosure for anyone in the united states buying a company over there that should be in there. the ceo can disappear at a any time >> that is clearly understood. >> we should be happy. here is an interesting question opposite end of the spectrum the federal judge overseeing sam bankman-fried's fraud trial threatened to revoke his bail. there was a hearing yesterday and the judge said the government's proposal for tightening up the restrictions on him was not sufficient. the proposal that came forward would have limited sam bankman-fried to one monitored laptop and restricted zoom use

the use of apps is a concern after using signal to contact a potential witness in his case. his use of virtual private network can mask the user identity and location. you can be doing that to be moving crypto without anybody tracking these his lawyer says he used the vpn to watch the super bowl using an international subscription it was a violation of his bond and bail situation the judge expressed a lot of skepticism about that claim and be yelled at the prosecutors saying you are not doing enough. this is the guy in the past who we know has told his underlings to use signal. he is doing that in violation of the bail agreement now the judge came forward and

said no. this is not strict enough. if you don't come up with something better, i'll revoke the bond >> i remember reading he was accessing something in the bahamas and he had to watch the super bowl. >> buy a television. >> you don't even need cable >> right >> that's like a broadcast -- you can put an antenna up and watch the super bowl. >> his lawyer came up with something. i wish i would have bought him a television you violated the conditions of your bond and bail >> you know what a 40-inch flat screen equipped with all smasmart features >> $200 for a television here he is living in california in his parents house >> something doesn't smell right. >> the idea of using these apps that can't be tracked and don't know and he tried to contact a government witness using the app. >> right when come back, fed

officials signaling support for acce stepping up the size of the march rate hike. and president biden vowing to take a junk fees. what it means for your next vacation and hotel trip. you are watching "squawk box" and this is cnbc i'm a new york hotel. i'm looking for someone who needs a weekend in the city. you hungry? yeah, i know a place. it's the city that never sleeps.

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former treasury secretary

jack liu making the case for rates sky higher for longer. here is what he said on "closing bell." >> i never thought we would level off and come back down if you are sitting at the fed and making macro policy, you don't want to do this again. you want to get it right >> that's what powell said >> if you listen to what he had the last six months, it is not surprise we have a way to go and when they get there, they will stay there for a while >> lew expects the economy to begin slowing and unemployment to grow, but with luck, he said, the u.s. can avoid recession our next guest says he is worried about the policy mistake because the fed is tightening to reduce demand in the economy where supply is the issue. let's talk the markets with ross mayfield at baird. let's dig through this, ross

did the world view change yesterday based on the hotter ppi numbers or is this kind of the fed moving along doing what it was intending to do and the market just may be taking it more seriously >> i think that is right i think the market is coming around to what the fed has been saying for some time when they get to a terminal rate of above 5% and keep it there for 2023 and if not 2024 if inflation doesn't come down to the glide path they set out. i don't think the market is necessarily wrong to be skeptical of what the fed is saying number one, they have to use guidance as a tool they will jawbone hawkish if they don't mean it the market was saying transitory a couple of years ago. i don't think the market was wrong to be skeptical, but coming around to chairman powell's view. >> which means what?

we have seen gains in the first six weeks. do we maintain that or give those back as a result >> i think the gains to start the year are appropriately pricing the possibility of a softer landing labor market has remained strong services is strong housing bottomed mortgage rates not needing to go down to 3% to get activity there. i do think the market is better pricing a soft landing we think the upside from here in the near to inter medium term is hard to cap. earnings are softening as rates and inflation weigh. the next leg higher may need a different catalyst there may be volatility. >> what do you tell investors to do >> we stay investors to stay the course and be selective. our partners at baird call it a

stock pickers market out performed last year more than it has for the last few years. mainly, it is stay the course. the economy has proven stronger than anyone expected at this point. we think there is light on the horizon. >> what are the right sectors and names? >> right now, the cyclicals are working. they are reflecting the economic momentum industrials and materials and things like consumer discretionary as the consumer is strong the retail sales number was hot. i wouldn't want to pull back entirely from some defensive positioning. i do think the risk may skew downside a bit and we need defensive positioning and fixed income especially with yields. >> what do you think about treasuries or bonds in general corporate bonds? >> i think we want to be higher

quality and little bit shorter duration you know, at this point, credit spreads are tight and the fed is hiking and probably heading for a slowdown credit spreads will widen from here we like moving up in quality and duration a bit treasuries are a good bet at this point >> ross, thank you have a great weekend >> you do the same coming up, would you quit your job if the company's values did not align with yours a survey shows half of americans would consider it. and tesla recall over self-driving software that coul cause crashes. >> they do this over the air you have to get news out to make sure consumers are doing the updates. >> you don't drive to the

dealer. >> elon musk got mad calling it a recall you are calling it full self-driving which it is not either the important news is make sure people find out to update the software that is important. our bake sal. we need more ways of connecting with customers, fast. i know some consultants with great ideas. can they help us improve our digital experience? absolutely. they've invested over $2 billion in tech. that could really help us manage inventory. and save us a ton of dough. then let's take back our market share. checkmate, chess heads. girls, i said “bedtime”! 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, getting faster; more reliable; and more intelligent to keep you ready

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survey of over 4,000 people over the u.s. and uk said half would consider quitt gting their jobs if the values don't match the company. disney, netflix and activision and spotify just to name a few joining us with the results is paul pohlman he conducted the p poll. half of the people said that have you considered, paul, that in this divided world we find ourselves, how do you know what

the proper value or proper stance on a culture issue is for the majority of people do you have a list of what the most acceptable stances are on all of these cultural issues that the company needs to espouse to keep employees? >> thank you for having me it is a matter of what you expect companies do. what is clearly changed more so for millennials and gen zers, 2/3 feel it is important for pay and benefits that are competitive, but at the same time, they want to be sure that the companies play a role in contributing to a better society. especially on the environmental and social issues. the reality is many of them decide actions accordingly now they feel the majority of companies don't take strong

enough actions in the business plans to address issues like climate change or issues like social inequity. one-third have left companies for that reason. over 50% are considering doing that if the values are not aligned with their values. it is a ticking time bomb for ceos at the time we need more talent and the positions in the companies for the better future and it is crucial for the engaged work force the benefit of the study is the employees want to be involved in solutions. >> paul, i can tell you that half of the viewers i have right now are saying this is absolutely not the case. number one, i'm not necessarily going to adopt the values of generation z or millennials have we know they are more

progressive than the average american these companies make products that are sold across the entire heartland to people that are totally different terms of demographics have you heard the term you go woke, you go broke do you think disney benefitted from entering the culture wars in florida now ron desantis, the governor, raised such a kerfuffle that they will not allow muni bonds for esg legislated down there. why open the bee's nest? why not give good pay and benefits and products and dignity of work? why enter into the issues where 50% of the country believes one thing? i'll not bring them up do you need me to mention the issues that you talked about that are divisive issues why take a stance when your customers aren't >> on the issues that are

div divisive, you have to be careful. there are issues that are not divisive people want companies to be responsible in the business models pollution or fair treatment or to a more diverse work force more racial inclusion. what is clear if companies actively try to invest and address these itssues, they get better results this drives shareholder return i don't disagree with you that 50% of viewers might not care, but in a company -- >> they care they think this is insanity. michael jordan once said when they wanted him to enter the fray, i'll not do that republicans buy sneakers, too. a lot of issues have nothing to do with running an effective

company and trying to do something propductive for society. pay taxes to the federal government provide employment for family and have a good customer enter into any of the things you talked about on one side or the other is insanity. you are seeing the pushback right now in a lot of circles with esg esg already is raising the ire of a lot of people it will hurt with customers. i don't know why do it? >> we have seen in reality and just looking at the hard facts and not getting side tracked, we have seen companies increasingly positioned themselves better for the future and also valued higher by the stock market we have seen the financial market requesting companies take approach on the climate change

because it impacts the bottom line they will be affected if they don't take action. we have republican governors and senators trying to convince companies to set up in the u.s. on green energy on loopholes in reality, it is probably different than you make it sound. >> if some of these initiatives caused us to, as we did in europe, produce much less oil and gas because that is what the value which was espoused with the winter in europe some say putin would not hold europe hostage if it were not for the ill-fated rush into rene renewables these things you are doing --

woke people and millennials don't want to invest in defense companies, paul. does that mean we should in a world as dangerous as it is, that generation z and millennials should dictate what companies do >> that is not what we are saying >> we need hydro carbons for 50 years, paul. you want to force companies or want employees that force companies to divest from hydro carbon >> we're not saying that you try to find the best option and most resilient option. you try to find the option that gives you the best results the reality is 90% of the -- >> the worm is turning a little, paul they are telling me we have to wrap we'll keep a watch on this i think we're seeing a pushback on this. >> i think that is it.

thanks for the opportunity >> thank you when we come back, former fed vice chair roger ferguson will join us on the latest comments from the fed heads on rate hikes. during the month of february, we celebrate black heritage with the stories of the cnbc teammates and contributors and leaders in business. here is dewardric mcneal >> my personal and professional journey is highly influenced by the history of the african american experience here in the united states. the struggle the and sacrifices made for freedom, justice and equality made it clear to me the need to continue to press forward no matter how difficult the challenge. our advancement here in the nation and education and science and politics and arts and culture inspired me to make my mark in my profession. i'm proud of my heritage and

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good morning welcome back to "squawk box. we're live from the nasdaq

market site in times square. it's friday. ch check this out the dow futures indicate off by 1 170 points s&p down 31. st. louis fed president james bullard would not rule out a 50 point rate hike in march. in remaxirks on thursday, bull sdlsbullard and mester said they would not rule out another rate hike we have roger ferguson with us and now a fellow with international economics with the council on foreign relations and cnbc contributor roger, thanks for joining us would you have done 50 at the last meeting some people were arguing for that or likely at the next one or go slow and steady and wait

for more data? >> i think i would have been more in the 25 basis point camp. it is clear as chair powell and presidents mester and bullard notice the disinflation process is under way it is moving more slowly than we like, but a lot of tightening is in the system. i would be 25 basis points last time and 25 at the upcoming meeting depending on the data. >> we are waiting -- we are seeing disinflation. it is not -- we're all in a rush in the world, roger. we want things to rhappen right away are you frustrated at all that the effects are having a longer lag than some would have expected what do you attribute that to? the vibrancy i'm saying these like they are

bad. the consumer and the economy and the vibrancy what do you contribute that to >> let's start we shouldn't lament the strong economy. this situation is unprecedented. we had a large amount of stimulus put into the economy for very good reasons to help us get out of the pandemic. we had follow-up stimulus that was to invest in infrastructure and deal with a changing society. we then had a very unusual set of circumstances with the closing and reopening of the economy that made for dramatic swings from goods that had been under disinflation back to inflation and also services. we started at a place where interest rates were historically low. there is a lot of forward momentum that the fed is dealing with that isis both good and pbad.

the process of disinflation is taking longer than expected. it also means, perhaps, that the fed can engineer the rare thing which is a soft landing. they need to keep going to rates that are higher and a terminal rate that may be higher than the market is expecting and they may hold it there longer to engineer inflation coming back down to 2% over time without throwing the economy into a deep recession. >> quite a big ask, roger. is the term that things happen gradually until they happen all at once -- i don't know if i want to hope for that. i think we are seeing layoffs in a lot of sectors there will be a lag effect to all of the tightening. do you think suddenly one of the data points we see in the coming weeks could all of a sudden be,

wow? that's why i think both of us are expressing some caution and an circumspect of 50 basis points let's go a full point so we can see the effect could it happen? >> you are making -- i don't think it will happen all at once you are making a number of good points one is we said the monetary policy works with long and variable lags. the reopening in china, will that fuel more inflation we don't know. i think you are right to suggest moving along to wait and see the impact of the work they've already done having said that, i don't think the announcements of layoffs are precursor to a dramatic swing in the job market the layovffs we're talking abou

is in the thousands. the job market is larger than that we see openings. i don't think people should be fooled and thinking these headlines suggest a dramatic swing in the labor market. there are still a number of sectors, service sector and small and medium sized companies having a hard time filling job openings you know, you hear less about that yes, i agree with you on a lot of tightening. yes, i agree on long and variable lags. they should move at 25 points at this stage we will not wake up and find a dramatic swing i don't think the economy works that way. >> none of us knows how this economy works. you better than most, obviously. that's why we have you on so much you are very distinguished is that an actual title? that would be cool.

>> all title on council on foreign relations. the distinguished fellow in international economics. >> you are a distinguished fellow thanks, roger. see you soon when we come back, we dig into tesla's recall. this is a software upgrade you have to do or your car might drive through stop signs or through red lights not a recall an upgrade if you don't dito , your car may crash. we'll talk about that next maybe it's because you can gently raise your partner's head to help relieve snoring. so, you can both stay comfortable all night. and now, save 50% on the sleep number 360 limited edition smart bed. ends monday.

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tesla recalling 362,000 vehicles warning that the self-driving software may cause crashes. phil lebeau is joining us now. phil, people are getting mad you don't have to bring the car in this is the over the a air software upgrade >> yes it is listed as a recall by the nhtsa. regardless if it is over the air software update or when the vehicle has a defect and needs repaired, that is the recall let's talk about the recall as you mentioned, becky the fsd beta technology in the

teslas 362,000 vehicles are being recalled model years 2016 to 2023. tesla says there are 18 warranty claims with full self-driving. they do not agree with nhtsa they will be issuing an over the air software update. that is happening in the coming weeks. to the issue of it not being a recall, elon musk is stirred up people by tweeting the word recall for an over the air software update is just flat wrong. he may not like it, but tesla fans may not like it, but i heard from them. i received emails saying it is an over the airsoft -- a

air software update. this is technology that is a game changer, in his mind. becky, what or not it is a recall or whatever the fix, this is technology that is driver assist it does not allow the vehicle to completely drive itself. it is not autonomous vehicle technology we hear it from people all the time they say i have a self-ing dri -- self-driving tesla no, you don't. >> words matter. all self-driving is not accurate description. i can understand the point this is not as onerous of recall to go back in i have gotten ford recalls that do require me to take it back in good luck getting somebody who

can fix this in a timely manner. i understand that aspect >> we will see this more and more, becky. we have seen this with other software glitches from other automakers i don't know if you have them create a special category called sof software glitch fix. do you have a special category with a brake defect? no the bottom line is this is the remedy that has been agreed upon by the automaker to fix the problem. >> i think the more important thing is making sure consumers are aware of the recalls of the updates or whatever you call them to make sure it happens they are done for a reason. >> correct >> phil, thank you see you later. coming up, president biden pledging to take on junk fees. we'll talk about what that means for the next flight or hotel

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makes it possible to make the present as best as it can be for everybody. 92% still active? seems high. seriously? it's just a bike. wait. they make a treadmill with an intuitive speed knob? yeah. want to try? 92% stick with it, so can you. rent a peloton bike or bike+. terms apply.

in the state of the union address, president biden vowing to take on junk fees california lawmakers introducing a bill one week after the president's proposal for more on the move for the travel industry, let's bring in brian kelly. brian, this is confusing a lot of people say we don't want khidden fees. what happens on a state bases? >> it is confusing for the consumers. i'm all for putting rules in place. there are so many bogus fees out that hotels keep adding on including destination fees these fees are not shown to the consumer until booking and sometimes not then for people to comparison and price shop, it is difficult.

some of the fees are egregious photocopying at hotels included in the hotel rate. 99% of people will never use that perk. >> i have to say, i think it is egregious, too it is nothing new. i remember writing a story 25 years ago about the hidden fees in the cell phone bill when you tried to break those out, it is the same here with the travel industry. is it getting worse because inflation is up and companies are trying to figure out how to protect profits? >> absolutely. fees are a bottom line for the companies. resort fees are particularly bad in the hotel industry. a lot of times the hotels would not display the fees until you checked in it wasn't until 2015 with the pennsylvania lawsuit against

marriott that they show before checkout consumers have to see it i do think legal pressure from the states will help consumers at the end of the day, as the president said, this is something congress needs tie up and pass legislation if biden tries kexecutive action there would be push back this is a bipartisan idea. i think 75% of americans are for transparency so they can at least understand the price of a service when it is advertised. >> i could say this about lots of places. including healthcare if you have try to do an mri or x- x-rays you don't know about the costs that come through nobody is in favor of hidden fees until after you check out or after you arrive. these should be told up front before you get to those places

i wonder if it is bipartisan and if it gets passed and what california is doing is they will require this do the companies only have it apply in california? it does get confusing. it would be easier to think of a national solution. >> absolutely. i'll tell people dispute the charge you don't have to pay it some hotels are better than others if they didn't give you the services, you can dispute the fees in the app in hotel chains. you don't have to pay it also, i like to reward hotel chains that waive fees, especially for elite members hyatt and hilton come to mind if you have elite status or use hotel points there are ways around it i hope there is some transparency in the industry so people know how much they have to spend to stay at a hotel. >> how do you dispute it in the

app? >> it is interesting hotels now have a chat feature and those agents, in many cases, are able tie off fees. i got charged a resort fee and i wasn't able to use the pool because it was closed for renovations or covid, they will take that fee off many times it never hurts to ask. >> good tip. i'm traveling next week. i'll make sure i pick up on some of those things. brian kelly, thank you >> thanks for having me. when we come back, today's biggest movers including deere rising on earnings and strong economic forecast. it is up 3.5% in an overall down market dow futures off 183. we have more details on deere straight ahead

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good morning stocks under pressure yet again after another hotter than expected inflation report roils investor sentiment you have the fed hawks circling with another rate hike in march. and the wide world of sports betting. the breakdown of business and what it means for investors. the second hour of "squawk box" begins right now good morning

welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with rebecca quick. andrew is out. 450 points down on the dow and nasdaq down 112. treasuries are interesting for once 3.90% on the 10-year treasury. 2-year treasury is 4.68% still almost 80 basis points of inve inversion. let's get to frank holland with the pre-market movers. when is the big day? when is the big day? >> what are you talking about? >> tuesday >> oh, that. >> don't play dumb with me >> a big day for you, joe? personally >> big day for the world big day for the world. >> just fill in the audience they like the inside

conversations. i'm the anchor of "wiorldwide exchange" at 5:00 a.m. before "squawk box. >> we used to have audio buttons. each person clapping. >> joe, i appreciate you giving me my flowers. i always had becky's support you were on the fence. let's start with the movers. tesla falling in early trading after a recall of 362,000 vehicles shares are down .50% warning the driver assist software may cause crashes tesla says it will deliver a software update. you see the shares are up 60% year to date deere popping after the miss on the top line and beat on the bottom line. shares up 2.5% right now

the industrial equip mment maker with higher shares for the year. and citi with the bucket of consumer facing stocks the bank seeing falling prices and ability to maintain pricing power makes these names attractive long-term growth play with margin expansion. you see early trading. colgate up 1%. slight moves here. back to you. frank, thank you >> i appreciate the support, joe. >> i'll have trouble sleeping. we're off monday >> off monday. >> yes. >> do you have the applause button do you have that any more? would you get in trouble [ applause ] >> yay >> frank holland, ladies and gentlemen. he's still got the button. he's still got it. >> on a serious note, i

appreciate your support. i'll ask you to come on every once and a while you may have to set the alarm clock ten minutes early. >> we'll chat. >> you'll see in 40 years you won't be able to sleep. >> i appreciate it the producer is in your ear saying keep it moving. >> that will stop us >> i'll not be here on tuesday i'll watch from afar >> if you are not here, i don't feel the same. >> i'll watch from afar. >> will you write? >> i'll write you every day. i will bring you back a souvenir >> great to see you. a number of fed officials speaking yesterday afternoon about interest rates and what may happen when central bankes meet in march. steve liesman has more >> becky, therreasury yields rin with the hotter than expected wholesale report and hawkish talk from fed officials saying

they could support a 50 basis point rate hike in march mester and bullard said they supported a .50 at the fed meeting and would not rule one out in march the futures market is to move the pricing for the peak funds rate to a new high of 5.32 that is where it is right now and for the august contract and bring the year-end pricing in line with the fed's average forecast of 5.13 the 2-year treasury surged this week as it digests the data and fed talk neither mester or bullard are voters this year they have been replaced by harker and logan they have not indicated support for a 50 chicago fed president austin goolsbee is an unknown neel kashkari revealed amongst

to be the hawkish fmoc members supporting a 5.40. the comments of mester and bullard show there is not open investment away from the front end loading rate hikes and instead responding to the economic data through quarter point hikes. the market continues to price in for the march meeting .25. that is the most likely bet right now. minutes next week of the meeting will show how much support there is or was for 50 basis point hike we have jobs and inflation data before the next pmeeting and it will determine what happens in march. becky, we have been tracking this divergence with the equity and bond market. i want to say where we are right now. up 70 basis points from the january low on the year-end funds contract the market is up 3.5%. s&p up 3.5%. it was 6% a few days ago

obviously, we had a sell off it remains high. there is a note here and i thank scott here from the jpmorgan chase analyst who said given the move in the two-year, the nasdaq should be off 10 to 15% given that move in yields. >> when was the market actually correct? >> when was the fed actually contract >> if the market is is correct, which is correct 3% or 6% do you know how to work that i'm not doing anything i'm -- >> not me. that's not my stuff. that's rick's stuff. >> steve -t to say quickly >> i withdraw the question >> i insist upon responding, sir. sir, i insist upon responding.

the market provides forward information. you have to take it all in you can't say the market is always right you can't say the economists are always right the market is wrong. >> steeve, the market is exactl right the instant you are talking about it that gives you what type of information to do anything on. if you are not trying to figure out why it was somewhere earlier or where it is going later, how does that give you any useful information to say we know the markets can be i inefficient or 1987 would never have happened. >> then come back three months later. it came right back which was more interesting the thing i wonder about, joe, and put up the chart again

the interesting thing to me, joe, what information is the market processing right now? does the stock market on the right incorporated thought about or rejected or otherwise have a different idea for the bond market on the left is telling you? sometimes, you know, powell goes in and gives what i think is a perfectly neutral speech and the market hear what iss what it wao hear. >> i will say something you can't. the market is a woman and has a right to change its mind at any moment and will. go ahead you can't say anything. >> i don't think we can listen to that, steve i wasn't here for that >> joe, i'm not taking that with a ten-foot pole. as a man, i have a right to change my mind. >> it is not the weather it's the climate you can't say anything. >> wait a few minutes. >> how would you like to do a

three-hour show ad libbing >> i'll get in trouble steve, this is a serious question when you looked at it and show who votes, it did not include people like the chair and vice chair. powell and brainard. she is leaving to go to the administration i don't know when the change takes place. austin goolsbee. he is mentioned to replace here. who comes off the alternate list this may be semantics. >> becky, this is a clever question i'll explain why the chair usually brings the fed governors along with him or her depending on who it is it is very, very rare to have a governor or a vice chair dissent

from the fed chair i don't show that because there is not a lot of volatility there. perhaps a guy like waller who has been hawkish, might dissent. some of the new people, like lisa cook and phil jefferson, i don't think if they are in the midst of dissenting. that dissent tends to come from the new fed presidents there is no replacement for brainard she is supposed to leave around february 20th. that seat will remain vacant that seat has to be confirmed by the president. they will be with 18 members rather than 19 >> steve, thank you. coming up, draftkings beating estimates in the latest quarter. posting an earnings beat >> i know you don't like that. >> who comes up with these things >> he wanted to say beat

earnings expectations. >> very simple subject, verb object fanduel considering a u.s. listing from the strong performance from fanduel we will dive into the world of sports betting >> and more on the grammar list. >> it is allgrammar. >> where are you going to, butthead i ended with a noun. "squawk box" will be right back.

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draftkings shares are higher the company's loss of 53 cents a share was in line with estimates. revenue of $855 million up sharply from $473 million the prior year that was above what analysts were looking for draftkings raised guidance the fanduel parent company is considering listing on the u.s. stock exchange joining us to talk about the trends online sports betting is michael wolff. a former yahoo! board member and served as coo of mtv michael, we do a lot of same store comparisons.

how many more states more people within the states have decided to do it? that is a huge revenue jump. almost 100%. what happened s >> there are more states we are at 30 states today where gambling is legalized. more allowed gambling online a third offer gambling online we will go from 30 to 46 states where gambles is legal and probably all of them will be online it is not surprising also that a lot of money is flowing into sports game blgambling draftkings and bet mgm and fanduel. this is quickly coming down to a market of the top three or four players. >> i've asked people this. it is the underbelly we all know

about. how much is is still illegal gambling are those entities angry is there a way for them to cash in on legalized sports betting or is this putting organized crime out of business in this part of the vice area? >> there is over time and very little reason to be illicit gambling the only reason you don't need to use real cash otherwise, this is a better experience all of the top gambling companies online are all really getting ahead from technology. the technology they provide creates a better experience. if you are betting online with draftkings or bet mgm, what you can do is not only bet on the outcome of the game, you can parlay inside the game. >> i know. >> you can see what is happening

with the next shot >> those work all the time, michael. it is a slam dunk. it is so easy. you can't believe my account i don't know what to do with the money. i'm starting to hand it out. i've become so rich. who are these five states that are never going to legalize gambling do they have state lotteries what is the rationale? if it puts organized crime out of business, how is this a bad thing? they never accept it >> it is likely it will eventually be legal in every state. some of this will come down to how much does the state get. for these top four companies, this is extraordinary. it is opening up new markets as time goes on let's not forget that the super bowl -- we had a 25% increase in the number of transactions

during the super bowl. when you look back on this, the forecast shows 99 million last year 999 billion, i'm sorry, in u.s. gambling in 2026, it will be over 200 billion. >> okay. still hard to get customers and keep them. churn like anything else it is hard to make money with all of this competition. how does that play out? they don't have to give out $500 free bets to get people to switch >> each of those companies have been spending a ton on marketing. fanduel became profitable last year we expect bet mgm will be profitable at the end of next year and draftkings with the same timeframe

the offers will continue these companies will continue to compete against each other this is going to be a business of for companies and those companies will enjoy the moment and it will be hard for anybody else to get into the business. technology businesses, but we will not see any of the faang companies going into this business >> it just made me laugh illegal gambling will always exist to avoid having to pay taxes. like anyone who has ever had a game what does that mean? i do kn't know what that looks like tax laws carry forward into the afterlife. >> we're still going to go to the fringe when it is this easy to gamble anywhere >> you know what i mean. that's why the casinos if you can build paris in vegas,

you have pretty good margins if you can build the statue of liberty. they make a lot of money, the house? does the house win, michael? >> the house always wins one way or the other it is a question of how much up until now, ill t has been difficult. >> i made a couple of wagers while i was talking to you no, i'm kidding. thank you. i looked today there are no nba games because of the all-star games. i'm happy. i don't have to worry i'm missing something. >> that's a good sign. you are not getting the shakes and withdrawal coming up, shares of china renaissance plunging overnight in hong kong after the company said its chairman and ceo is

missing. stock is down 28%. we'll talk more about the story after the break. as we head to break, look at the leaders and laggards in the s&p 500 o500. you see deere and citizens financial on the list. moderna is off 5.5%. some of the other big laggards right now. arista networks and entergy. >> announcer: time for the aflac trivia question. what is the most watched television program of all time outsidthe e super bowl the answer when cnbc's "squawk box" continues s this, a hospital bill? mm-hmm. for 1,100 bucks? ga-a-a-ap! looks like your wallet may need a sling too. tell me about it. did that goat say "gap"? he's talking about expenses that health insurance doesn't cover. eh-ehh-eh! well i'm talking about the money aflac pays to help close that gap.

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>> announcer: now the answer to the aflac trivia question. what is the most watched television program of all-time outside of the super bowl? the answer is the finale of m.a.s.h. in 1983 with 106 million viewers. new this morning, reuters reporting that tencent is

scrapping plans to venture into vr hardware. it had plans to build hardware and software now sources tell reuters that tencent is cutting costs and head count at metaverse unit a lot of people in the meta world dealing with this. shares off 2.3%. meta platforms off 1%. renaissance shares plunging in hong kong after the chairman and ceo is missing oost eunice yoon is here with more. >> reporter: the stock exchange has been unable to contact bao fan. he is a well known banker in the tech community he has been known to make early connections with the big tech

names with alibaba and baidu and tencent and worked on deals and ipos with jd his contacts have been saying they are hoping that he is only assisting in a government investigation of a former executive as opposed to becoming a target himself this comes as president jinping reiterates the country's support for private enterprise and foreign investment recently american ceos who have been considering visiting china have been holding back there have been several reasons for this they say there is a lot of travel restrictions in terms of lack of clarity with visas for example. one of the issues, they say, is the political climate. this comes as president biden has said he has suggested he may

be talking to president xi jinping over the balloon dispute. all eyes right now, joe, are on the munich security conference that is going to essentially bring u.s. secretary of state blinken together in the same place as his chinese counterpart. people are hoping this could bring on a one-on-one meeting and lead to easing of tensions joe. >> how many examples and i don't want to put you on the spot, eunice, but we were talking earlier about the debate in the country about u.s. investors need to think about investing in any company in china is this one of the risk factors that you have to be aware of if you are going to buy a company and the ceo can all of a sudden be not located for months at a time >> reporter: yeah. in terms of executives

yes, i think that is something that a lot of people here think about. there could be always a risk of detention. in terms of the top ceos, unlikely they would suddenly disappear because of the potential political ramifications for that people being detained here whether or not you are an activist or high level exe executive, is something that is thought about very much. >> eunice, welcome back. well deserved couple months off. we are really glad to have you back we missed you and missed your coverage thanks for being here. >> reporter: thank you i missed being with you guys, too. >> we missed you a lot good to see you. still to come, former chair jay clayton will talk to president biden's proposal and corporate stock buybacks.

and tesla recalling 3 over 300,000 vehicles the recall is not one you go in to get repaired. it can be done over the air. it is a software downgrade serious issues with the software it is important people do it we will have the latest and what it means for the company's automated ambitions. u un ted yoare watching "squawk box" and this is cnbc boost your team's productivity with samsung's fastest processor yet. switch and save up to $1000 on the new galaxy s23 ultra. now that's epic. on the network america relies on. why are 93% of sleep number sleepers very satisfied with their bed? maybe it's because you can gently raise your partner's head to help relieve snoring. so, you can both stay comfortable all night. and now, save 50% on the sleep number 360 limited edition smart bed. ends monday.

welcome back to "squawk box. the futures are pointing to lower opening this morning as the hawkish fed comments came on the heels of hotter than expected inflation data. all of that continuing to pressure equities which were off yesterday. despite the rising prices, our next guest sees opportunity. we want to talk about the markets with stephanie link. chief strategist at hightower. step stephanie, the market has taken a different view in the last couple days. how about you?

>> i don't really think much has changed for me i have been in the camp that the growth in the economy is a bit better than feared, if you will. if you look at the atlanta fed gdp tracker. the stratiegists are lower than that 1.5 or 2% in terms of gdp. a lot of that, becky, is driven by the consumer. we have good retail sales data led by services. that is a theme we have talked for over a year now. within the cpi, you have lodging away from home that number grew 7.76% that is services that is driving the better than expected growth. that, of course, the consumer is feeling better and not only was the pent-up demand, but jobs and higher wages and little bit

lower inflation although inflation is elevated. >> let's talk about the disc discretionary stocks nike walk through the positive case for that >> sure. it is the industry giant they have the pipeline the real story is direct to consumer dtc. 20% of total revenue pre-pandemic was 9%. as they transitioned to dtc, this means better margins. that's what we got last quarter. we got better margins and better revenues and you got operating leverage on the bottom line. that is what the story is for the next year or two the stock is up 9% year to date. it is down 12% in the last few years. it is in favor if you think china is sustainable, they have 15% total revenue in china

>> let's ask about the flip side nike is doing better with dtc and better margins, what does it mean for foot locker the new ceo and she made and has been reaching out to companies to come up with partnerships can there be partners with foot locker i'm sorry to throw you for a loop. >> great question. we really don't know i think there could be partnerships nike is doing it with other companies as well. i just think that if -- i don't want to go against nike. if the goal is to get dtc 50% of revenue base, it comes at the expense of the other names i would not count out the ceo of foot locker. she is incredible. >> she was at ulta beauty before

she did very well there. let's talk about starbucks the strength of the consumer and also are they going back to work or changing where they are buying or doing stuff at home? what is your thought >> i think this is all part of the services component they have so much momentum here in the states. in general, comps rose 10% last quarter. they are actually up 29% in comps from 2020. people are going back to the office and they are going to starbucks as well. this is also a china story, too. there is a theme here. becky, i think china is an interesting story for 2023 and 2024 as they reopen. china is 20% of the total revenue, but 33% of store base they want to 40% by 2025 i think guidance is conservative especially if you think china will return and free cash flow

generation is impressive at 9$9 billion last quarter >> let's talk dr horton. the home builder we got the stat this week. one data point is the housing starts were down 4.5%. that is more than people were anticipating none of the home builders has been super active about pushing for more or build more homes more quickly although there is demand for homes >> i think we're actually in the trough or troughing. this quarter or next quarter we have to watch interest rates, of course. i look at permits. permits are the leading indi indicator. starts were disappointing. permits were better. last year, starts down 20% permits down 30% that's a leading indicator i think can it get worse sure, it could get worse

how much worse 11 times earnings and 1.6 times book for a company with superior returns and operating margins and will benefit from the housing shortage we are in a cyclical downturn now, but the trend short 5 million homes, becky you will see a comeback in the stocks they acted wealth. >> stephanie, we have to run i like to do target. they have earnings out week after next >> it is all about the inventory. it is not a traffic problem or transaction problem or product problem. they have a good mix inventory. they had too much. they had the wrong stuff inventory up 43% in the first quarter last year. up 34% in the second quarter that fell 14% in the last quarter. we have to see more progress there. i think you will maybe not this quarter, but it will happen in the next couple quarters

guidance is conservative i like that one, too >> stephanie, thank you. see you soon coming up, former s.e.c. chair jay clayton on the president's push for a buyback tax. >> clayton >> i don't say it that way >> oh, somebody else >> hopefully he is button ed up. and norfolk southern under fire for the train derailment in ohio more questions about how the train derailed and the corporate respsendon a the state of the nation infrastructure. "squawk box" will be right back. adapts to different oxygen levels and starved it. i am here because they switched off egfr gene mutation and stopped the growth of tumor cells. there's a place that's making one advanced cancer discovery after another for 75 years. i am here... i am here.... because of dana-farber. what we do here changes lives everywhere.

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learn more at rvsvinfo.com. rail vision is at the forefront jpmorgan chase facing scrutiny today over its relationship with the disgraced financeerj jeffrey epstein eamon javers here with more developments good morning, eamon. >> good morning, joe documents in the lawsuit against jpmorgan chase by the u.s. v virgin island turned a empblindy

to the human trafficking the decisions about epstein's accounts at the bank were quote advocated and approved at the senior levels of jpmorgan chase. including by the former high level executive who later would be ceo of kbbarclays the suit alleges that emails suggest that staley may have been involved in the sex trafficking operation. when jpmorgan chase compliance officials flagged the accounts, it was staley who vouched for epstein. in 2009, epstein pled guilty for prostitution that same year, the suit says staley sent an email to epstein and incarcerated at the time staley said this, presently i'm

in the hot tub with the white wine this is amazing. i owe you much and appreciate our friendship i have few so profound in 2011, jpmorgan chase employees reviewed the accounts in the wake of news stories that connected him to human trafficking. they decided to enhance monitoring of the accounts staley discussed the topic with epstein who replied there was noing truth to the allegations the suit alleges that jp yucatan peninsula -- ledges that jpmorgan chase ignored the accounts epstein paid 600,000 to a woman whom he purchased at age 14. staley moved to another firm in 2013 staley has not responded to a email request for comment.

the u.s. virgin islands are requesting jpmorgan chase pay fines and provide restitution of all ill gotten gains joe. >> staley was in charge of epstein's accounts at jpmorgan chase. he was swimming in his hot tub at his private island? >> that's the allegation in the lawsuit. they obtained a trove of documents and emails from jpmorgan chase they are putting those out for the first time now in many cases. what that shows is that presumably staley was visiting the private island on a number of occasions and the same person insidside jpmorgan chase. when the compliance officers reviewed the accounts, they reviewed up to staley.

jes staley contacted epstein staley was on the private island on a number of occasions there are a number of emails where they exchange pictures of young women in heseductive pose. >> talking about snow white and beauty and the beast and code names. i have seen some of the other allegations on this that sound worse than just being in a hot tub with a glass of wine >> the six degrees of separation is staggering the more we learn about this, eamon. the people involved. some unfairly tied in with this and having been on the epstein express. >> or if you get your picture taken with him >> his influence >> he was exchanging email

epstein with pictures of young women. becky said they are referring to somebody named snow white. we don't know what that is referring to >> do you need anything when you are in london? >> there is evidence of money sent from epstein to young women from eastern europe after he gets emails from staley suggesting he is in town on a certain date you put that all together and there are questions for jpmorgan chase to answer. one is going to be what did jamie dimon know about all this? that is a question the bank will be faced in coming days. we don't know the full story yet. we don't have the bank's side of this they gave no comment when asked for a comment. we will see what filing they put in the court proceedings and what they have to say in the

days to come >> that part of the world. st. thomas kenny chesney has an incredible place. his island is in the general vicinity it is a paradise that part of the world, eamon. if you have been to st. thomas or st. johns >> what was going on in that paradise >> yeah. tell me about it all right. thanks when we come back, former s.e.c. chair jay kclayton talks buybacks and crypto and more things were bad yesterday. they have not improved this morning. dow futures is off 117 you will not get a bounceback sd ir yesterday's declines naaqs off 91 s&p down 92. "squawk box" is coming right

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policy adviser for sullivan and cromwell we have a little bit of time left for the interview after introducing you, but it's very important that we do that now, all disclosure has to be this is such a wide ranging topic. it's tough for me to discuss cash compensation got a bad wrap the answer was going to be lick le let's make it tied to the company. we all rushed to that. now the fortunes of your company are going to be part of how you're compensated as an executive, and we're opening up to this criticism. your balance sheet, whether you issue stock and you dilute it too much, whether you buy it back because you want to reduce the flow, it really isn't about just juicing the returns for executives that's not why companies buy back stock, it's just not, but they demagogue it and biden is

demagoguing it almost to the point that it's ludicrous because it's not true. that's not what's happening. >> i have been trying to figure out this, because we have talked about it for a while on this show, that the criticisms of stock buy backs from a capital allocation, from an efficiency point of view, they don't hold up we can go back to those. what's really going on here, i think this is a bank shot. i think this is we can use stock buy backs to criticize executive compensation, and executive compensation is a political issue that garners eyeballs and garners attention. >> that's exactly what it is and that's really what is going on here. when the 1% went in, this is not a big deal it's actually a really big deal because it's a fundamental mistake in terms of capital allocation in our society, and you won't find any ecoacademics, there's lots of studies that say

the criticisms don't hold up. >> the other thing is they have the federal government saying that you need to invest in x, y, z. we're going to tell you when you have profits, this is when you need to do with it, whether it's buy backs, a dividend, a special dividend, whether it's not investing long-term in hydrocarbons, which is in a fossil fuel company's right to do that when the government has other restrictions, i mean, companies need to decide what the best deployment of their assets are for their shareholders, not based on what, you know, hire more employees. what if you need to lay off employees, and the government is telling you, use this money to hire more employees. >> let me make two points there. gee, we talk about es and g, g in this country, we have focused on g, we have independent boards of directors we have been rigorous about it and the like, but judgment of the board of directors and management has to be better on capital allocation than somebody

from the outside who looks at the company for, i don't know, a few hours a day. >> in public service since he was 27 years old, never had a job. >> that was a model we relied on, and we made it better. now that it's better, we're going to take power away from management and the board of directors and put it somewhere else can i go one more point on this, the people who think that capital allocation is something that the government should do and we're going to tax it to try to keep it at the company, it's often the same people who say, you know, we should take money out of, for example, fossil fuels and put it into alternative energy, well, the most efficient way to do that is for a fossil fuel company to buy back stock, give that capital to somebody who's going to put -- >> if you believe in that, why would you tax that transition at 4%. >> i agree with you. i don't like bringing up the other side of it the president said the 90% of

executives are paid in stock compensation have some aspect of stock compensation, what's the best way to get the stock to go up, it's to buy back your own shares, you're lining your own pockets to do that. >> a doesn't follow b when you buy back stock, and you would think that you want to hire the ceo that over time does get the price of the stock up as much as he can for the shareholders, so maybe we shouldn't have it tied to executive compensation, it's a moot point, they can't say it anymore. maybe we should do that. >> becky's point, and your point, what do you want your board of directors and management -- >> you want them to have skin in the game, and you want them to increase the price of the stock. okay, and capital allocation, what -- what i would say your leverage, that is part of running a company.

>> it's a populist argument that works for a lot of people. >> that's why i'm here, because it's a populist argument that is bogus. if you want to say people are paid too much, say people are paid too much. but to tie this to stock buy back, which is, you know a proven way of reallocating we have the most dynamic capital system in the world, why are we coming out of the pandemic and lockdowns, why is the company hotter than people expected, one of the drivers is we can allocate capital faster to where it is most needed. >> and where it's treated best you must sit through the entire state of the union, this is only one thing we heard that is patently, they say trump lied a lot. he did lie a lot all his lies are how great he was. lying for four years, i guess he was. >> yes

>> that's why we're here to be critics, but the idea that we're going to havsoholee mew ss fo fossil fuels ten years from now. >> we'll be right back why are 93% of sleep number sleepers very satisfied with their bed? maybe it's because you can gently raise your partner's head to help relieve snoring. so, you can both stay comfortable all night. and now, save 50% on the sleep number 360 limited edition smart bed. ends monday. you love closing a deal. but hate managing your business from afar. you need to hire. i need indeed.

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good morning, stock futures pointing to a lower open after yesterday's selloff. the nasdaq on pace for its longest weekly losing streak since last september a lot of it has to do with hawkish comments from federal reserve members spooking the markets. goldman sachs adding a third 25 basis point rate hike to its 2023 forecast. and fear and an answered questions over a freight train's toxic spill. we're going to talk about u.s. rail safety and the corporate response with former united ceo oscar munoz. the final hour of "squawk box" begins right now >> good morning, welcome to

"squawk box. this is cnbc, we're live from the nasdaq market site in times square i'm becky quick along with joe kernen andrew is off today. u.s. equity futures under some pressure, once again this morning after a pretty disappointing day yesterday for the bulls. dow is indicated off by close to 150 points s&p futures down by 25, the nasdaq off by 105 and treasury yields have picked up extensively since we got the hotter than expected ppi numbers yesterday. inflation reading hot. that means people worry the fed will raise rates higher and leave them there longer, and you see the ten-year is yielding 3. 3.982%, the 2-year, almost at 4 p4.7. you've got farm equipment maker deere moving higher after missing analyst estimates for the first quarter revenue, and raised its full year profit forecast that stock is up by $8, a gain

of 2%. shares of auto retailer, auto nation are up in the premarket the company posted revenue and earnings per share that were better than the street was expecting. jumped 30% over the prior year auto nation up by 2.6% this morning, and one more stock on the move, draftkings is up big this morning as well the company's loss of $0.53 was in line with expectations but revenue was up sharply from last year, and it did beat estimates. draftkings raised its guidance for the current quarter and that stock up by 7.8% >> the broader markets with under 90 minutes to go before the opening bell on wall street. cnbc's senior markets commentator mike santoli joins us now with more hey, mike. >> hey, joe, yesterday was as becky said a little bit of a deflating close. it broke this pattern twe have

been in for several days we did have a rally attempt until mid afternoon the st. louis, more aggressive fed hawkishes. where it leaves us flat for the week ahead of the open with the pre-market declines. we'll be down for the week the 4,000 zone it's been this prolonged three-week hesitation. at what level of pull back would you have to question really the validity and the upbeat message of this rally. we have gotten off the october lows and year to date. i would say 3,900 to 4,000 call it another few percent lower it's also flattened out, there is room for it to be a routine pullback, but obviously we're absorbing things like the higher treasury yields as well as a rebounding dollar. so take a look at the u.s. dollar index now, we had that big run as the fed was tightening all last year. that kept risk assets like

stocks under pressure. you gave back about half of that advance from when the fed started tightening kind of building again we're not quite at the january highs. not far away from it that really is where allthe concentrated focus was a too hot economy or a higher than longer rate structure, that stocks are going to have to contend with take a look at some of the transaction based brokerage and exchange stocks. we have interactive brokers on a massive run here recently. now, the cboe, that's the big options exchange, also very strong relative to the overall markets. clearly retail investors flocking back to some of that sort of fast, speculative activity volumes are up also, fed raising rates is good for something like interactive brokers, they earned money on customer balances, also reflects the fact that the market got excited in the short-term, with the more aggressive parts of the tape acting a little more

twitchy again. we'll see if that stuff can maybe calm down and keep the overall market in tact or if it's going to be a little more of a retrenchment, joe. >> like santoli, we're in that weird area i don't know if it's bullish, bearish or what. we have been doing this for so long, i don't think any of the sentiment measures mean anything anymore, mike. >> i think the sentiment measures are very open to interpretation because if it's a bull market, then sentiment is just neutral, and it's actually, you have to see optimism and enthusiasm build in order to sponsor a market that's in better shape and is going to go higher if it's just a bear market rally, you say we have kind of had false hope come into the system, and it's just going to have to reverse. i'm not really in that camp. i think there's a lot of attributes to the rally that distinguish it you know, we'll see whether it

absorbs this pull back well. >> mike, i heard you earlier this week talking about how the dow transports are nearly the great indicator they used to be about when a recession may be looming. i guess that's changes to the index itself. >> the one point is avis budget is a pretty big component because it's a high priced stock. that's a good proxy for travel demand i don't think that the economy itself is the way it was where that was the be all and end all. i would say trucking stocks really strong recently rail stocks, sitting it out. they're not doing well you can interpret that various different ways, but when truckers are doing well, usually it's time to actually take the main street economy is doing fine >> thanks, mike. we'll see you later. tesla recalling more than 360,000 cars that are equipped with its experimental driver assistance software. a recall report from the government says tesla's full

self-driving beta system could cause crashes, maybe going through a stop sign, a stoplight. the report says tesla is going to be putting out an over the air software update. the cars don't have to be taken into anywhere. it will be fixed over the air. joining us to talk about it, tim higgins, a cnbc contributor, recalls happen all the time. how is this significant or is it more significant than others we have heard >> for years there have been questions about the safety or capabilities of tesla's aid systems. the systems that aren't fully self-driving but more advanced in the basic cruise control. elon musk has says it improves the safety, but it lulls drivers into thinking it can do more

than it can do the findings suggest there were certain scenarios the car might act in a way where the driver couldn't take over fast enough to avoid a crash or potentially break the law. so, you know, fix thing this and the software, easier than having to bring it into a car dealership like a cheviy would do, change mechanical things, put in new equipment in short, kind of a win for tesla because it doesn't have to turn the system off. it doesn't have to do mechanical changes but a black eye because of the system's defaults >> what has tesla said about the defaults they agree with the government's assessment of it >> they would disagree they push back on the government, the government's findings with ford with the volunteer recall here, which is often the case in these things when the nitsa is going to do this, it's do voluntary or become messy down the road, so, you know, going back to tesla

traditionally says if these systems are safer than what the human can do, that's, you know, maybe perhaps sometimes we done understand where they data is coming from. i guess, to kind of core of these systems, are they about safety or convenience. the criticism continues to be about tesla and other systems like it is that the driver thinks the system can do more than it is the robot is not in control. the driver needs to be in control and take back the wheel and be engaged in the driving scenario, and oftentimes we get lulled into thinking the car is doing more than it is. >> were there any accidents involved in this >> there were a few. tesla told the government they didn't think any fatalities, we know the government is looking into other crashes involving tesla's 8s system that have involved fatalities. itst

it's hard to say if this is the end of the story, we're probably going to see a lot of software tweaks in years to come, just because this is a great dynamic environment. tesla is updating its system on a constant basis trying to improve it >> what other companies are doing things along these lines who else is going to be closely watched ton this? >> this kind of technology is on the cusp of becoming ubiquitous. tesla has been the most aggressive in pushing forward the capabilities and marketing in a way that it seems like a hands free system, even though it's not we see gm out therewith its super cruise that is system that has some more procedures in place to try to keep the driver engaged it has the ability to monitor the driver's eyes. make sure they're paying attention to the road. ford is out with a similar system most car companies are pushing towards this, and the question is over time, how much more advanced are they going to

become really moving beyond, you know, cr cruise control to something more dramatic. >> tim, thank you for your time. >> thank you >> obviously this is something we'll hear more about with other companies as well. and we'll check back in with you. before we head to a break this morning. new this hour, the "wall street journal" reporting that facebook parent meta has given thousands of employees sub par ratings in a recently concluded round of performance reviews. about 10% of employee ratings indicate that those employees are under reporting. the report says meta's leadership expects the ratings to lead more employee departures in the coming weeks, and if not, the company will consider more job cuts meta scaled back one component the stock right now, off by about 1.1% coming up, we're going to bring you the latest on the hazardous chemical spill in ohio from that derailed freight train and we're going to talk about

the state of america's infrastructure, with oscar munoz, the former president of csx, the former ceo or is the former ceo he was t cheeo of united airlines st stay tuned, you're watching "squawk box" on cnbc

the biden administration says rail operator, norfolk southern will be held accountable for the train derailment that spilled toxic chemicals earlier this month company officials were noticeably absent from a town meeting on wednesday meantime, the epa is trying to assure residents that the local air and water is safe. joining us to talk about the corporate response is oscar munoz, the former president of the csx, and the former ceo of united airlines as well. oscar, thanks for coming on this morning. this is a story that i don't think we've given enough attention to it's been two weeks since this happened norfolk southern has said they're going to be there, but they didn't send anyone to the town hall meeting on wednesday night, even though originally they were scheduled to be there.

they said they were worried about employee safety. they have established a fund for the town of east palestinian, but it's only a million dollars. they say this is a down payment, but i can't imagine that goes very far when you start looking at the scope of this what do you think of their response so far? >> that's a hard one good morning to both of you. sorry about the circumstancings that we're having to talk, but, you know, the thing i've learned from experience is your initial response is by far the most important, and i think if i had advice to give, i guess, it would be to do all the things that are being done now should have been done a lot earlier i can't explain the absence of the town hall, but i think at this juncture, you know, the response to this, and the industry for so long, it happens, and all of the railroads have an amazing recovery mechanisms and experts on this, and i know when i was there, we spent time training

and providing equipment to local first responders, fire departments, often volunteer shops in some of these small cities, and so the care and attention beforehand is critical, and then when it happens, you get on the board and you get on the ground, and you provide all of this assistance to all of the residents, immediately, and that tends to diminish the outcry that you have, you know two weeks later is the issue i think always faster and better and more director seems to be a much better response than this thing, but having said that, it is never too late to do the right thing, and so i think we're beginning to do the right thing, and i encourage them to continue that. >> you look at the pictures that have come out. you consider the toxic chemicals that were spilled. this seems like it is going to be a long haul, a very long time before they can repair the damage that's been done here in the meantime, you've got a lot of people. you have to wait for the federal

regulators to go through and determine what happened in this. in the meantime, there are a lot of lives that have been put on hold here. >> hence why the immediate and total response is so critical, right? people are out of their homes, their lives have been disrupted, as much as you can do for them you don't put a price tag on it. i know that at csx, within hours of an incident, we were established set up and communication with all the local, political, and community le leaders, with the federal government, all the agencies that respond there is a response time the ntsb will investigate this for a long period of time. i think the railroad itself has said they know the cause, which is important to a degree the fundamental focus needs to be on human beings at that site, and making them feel careful, and i think that's what's causing a little bit of the a uparrow. yo -- uproar, when something hasn't been handled right the first time and so, again, the initial

response, everybody that's listening that needs organizations, i cannot express to you how important it is that you get it right off the bat and are the community there at east palestinian >> if this is a derailment that was caused by bearings in one of the wheels, i mean, there's technology that's supposed to prevent or at least warn when things are going on with that, kind of like a hot box technology how does it work is it everywhere or do we need more implementation? what's happened in terms of those safety precautions >> you're correct. hot box detectors, thermal unit measures and monitors the heat of the rail cars as it goes by it's a digital process that ka accumulates all of that data and it gives people in the mechanical department, and awareness that there's something, you know, going on with it. this is all steal on steal sorts of things, so we have hot box

detectors, acoustic detectors, there's a ton of inspection trips, i cannot tell you how much time i spent in the inspection trips up and down, all of the lines are broke, all the railroad where we have sophisticated equipment. so the preventative aspect from that precerspective is there. whether somebody picked up the trend, the car or something that happened quickly that will be up to the ntsb to detect, but, yes, for the regular public i mean, there is a lot of mechanism that's done and performed admirably by the people of the railroad you have instances like this i hate to sound like a broken record when this happens, it's so important to get on the ground immediately and takecare of al the population and citizens that are in that era. >> oscar, we had, i don't know, this seemed like a really big deal, and i know that the administration was dealing with balloon gate or whatever you want to call it, but what do you

think of the response? has secretary buttigieg been front and center on this whole situation? you think it's been a response that lives up to all it could have been from the administration >> hi, joe, you know, it's always a difficult situation because i'm not sure how much the federal government can actually do once the situation has happened the epa is there, cdc is there, i mean, homeland security showed up even fema who's not naturally wired for this kind of thing, i have never seen them at a derailment, for instance they sent all the right people, and they responded again, some would argue later than they should, but again, the government didn't cause this at this juncture. you know, the railroad situation, the railroad involved, that's would have first response, that's where the immediate relief needs to come, and again, the advice is that tends to bring down the emotion when you're actually taking care

of all the people affected and now it's become, as you show on the screen, people walking around with photo opportunities. that does not help the community. >> oscar, you're in the unique position of having run a major railroad and a major airline in united we have additional funds from the inflation reduction act that are going to be going out for spending on infrastructure we've seen all the problems southwest has had concerns about what's going on at air traffic control. your somebody who has a broad understanding of our infrastructure nationally. where do you think the funds are most necessary, and should be spent? >> it's a complicated question there's so many needs and not to be biassed with the industries that i know and love, but air traffic control would be probably one of the top things on my priority list. the airspace over america, while safe it has become slower, and

we find many countries around the world that have modernized the air traffic control system i would put that first, and from there, you have the infrastructure and the national highway, which is also probably in dire need as we saw from the minnesota incident a few years back the railroads, i mean, again the numbers are dated for me, but it's probably $20 billion that they spend with regards to upgrading all of that rail it's quite a bit of in a minute at keeping that rail, the infrastructure, those cars as up to speed as possible, but they're mechanical objects and they will break, which is why you have the detective and investigative devices that help you, and so things will happen and back to the first pouint. that initial response is so critical. >> it's been a long time since we have seen you we appreciate your time today, and i hope we have you back soon. >> i'm coming next year, oscar latitude, baby i'm coming next year san diego? am i invited >> i think it's going to be

miami this year, and you're invited. both of you. >> i got the invite too. >> it's in miami this year whoa >> thanks, oscar >> excellent coming up, when could washington's debt ceiling drama start to impact the markets? we're going to ask a d.c. strategist about that. and talk about mega caps in the news, apple and tesla with analyst tony staganaki, stay tuned, you're watching "squawk box" on cnbc how do we show strength and stability? (eagle call) a mountain? a tree weathering a storm? (thunder) lions? nope. (lion rumbles) we do it with our people.

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breaking economic data ree more day of the week, one mo number. this time we'll be looking at import prices. that's when "squawk box" comes right back ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it!

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welcome back to "squawk on the street," rick santelli here live at cmehq with some of the last breaking news of the week import prices and export prices for the month of january import prices, month over month expected to be down 1/10 we're down 2/10 of 1%. these numbers actually have been trending mostly higher, so this negative number does reverse that trend, and if you strip out petroleum, we do see the prices moving higher, expecting down 3/10, a 1/2% the other way we are up 2/10, and that's pretty good. as i said, it has been trending a bit higher everything else that we're going to see has been trending mostly lower, and that's any of the year over year or export prices. year over year import prices are up 8/10, bucking that trend to some extent. you'll see what i mean, in the

rear view mirror, up 3%. it isn't as high as many expected on export prices, month over month, up 8/10, much better than we are looking and are 8/10 really does take us back a ways, before we were anywhere near the level. last time we could claim a positive number of that magnitude, going back to june of next year, when we were going 1.1. the year over year export prices, less than expected it was about half of the rear view mirror for last month but that 5% now gets modified to 4.3. 2.3% is the lightest level we have seen. this is going to be somewhat shocking, the smallest increase going all the way back to the end of 2020, december of 2020, so it's really quite amazing to see export prices. and what i would draw from that is that the u.s. is basically

importing a smidge of inflation, but we're not being able to export it. maybe that gives us a better glimpse of the rest of the world with respect to the slowing like some entities like the imf have been calling for joe, back to you. >> is a smidge more than a morsel what's the hierarchy, do you know smidge is about -- can we say it in basis points? >> i would say a smidge is basically a small number of basis points, yes. that's the way i would define it. >> the other day you said 1 1/2 basis points, which i didn't realize we do calibrate it to that level, which is important rick, thanks. we have a debt ceiling that apparently is an issue markets haven't seemed too concerned about the federal debt limit fight in washington, but this week, we learned that things could come to a head earlier than expected. actually, about right when they said, the nonpartisan

congressional budget office, the treasury department could run out of funds sometime in july or possibly before. joining us to talk more about that, cowen, washington strategist chris krueger i thought we initially said june i don't know if it's earlier it's about the same time, and nobody knows it has to do with factors that we don't know at this point, like tax recemipts. >> that's exactly right. is it a smidge or more, is it june, july, august well, right now, it's june 5th, because the ultimate -- this is run by the golden rule, he who has the gold makes the rules that's the treasury department yellen has pegged the date as early as june 5th. to your point, tax day is a moving target based off receipts, we'll see around april 18th this year's tax day and the expectation is that this is probably an august september

date, but remains to be seen but right now it is june 5th >> so when we see the president say no negotiations, but then we see speaker mccarthy exit the oval office or meeting with the president and say, we're talking and there's things going on. do you see a path forward, chris, that both sides -- we hear about saving face a lot from other countries about how you extricate yourself from these positions you have do you see a way out where both sides are going to be able to save face and we get through this what's it look like for you? >> we do we're in very early innings. probably finished the preseason. we'll see president biden's budget on march 9th. the house republican budget will come out around april 15th you know, there's an old saying in washington, whenever policy makers are on the edge of a cliff, what do they do

they build more hands, you have an escape patch from senator mitt romney, the trust act what it would essentially do is, you know, kick the can on the debt and the deficit to a rescue committee. they're not going to call it a super committee because the super committee failed in 2011 which is how we got sequester. but you essentially kick the underlying issue of debt to a rescue committee, you raise the debt ceiling and you live to fight another day. you do have a number of fiscal cliffs on the horizon, though, so at some point, right, you are going to have to address this issue. you have the expiration of all the trump tax cuts at the end of 2025, and then you have medicare insolvency issues coming into play in 2028 at some point you will have to address this, but until either the market forces that or you literally run out of runway on some of these issues, at the end of the day, they generally delegate to a committee.

>> so do you think that the american people are served well when one side says you're going to cut social security and medicare, and then the other side says, no, we're not going to cut social security, both are being accused of something that needs to be talked about there has to be some type of modification if either side says we need to look at it, the other side is going to point and say, you want to push granny over the cliff in a wheelchair that's where we are right now in the current bill it's not helpful. >> right which is why, you know, 2028, which isn't a super long way out, when you do have the popular entitlement programs starting to get into solvency issues, then we saw this previously in the '80s and other

times, you know, the hope is that you would get some sort of rescue committee with the adults in the room, you saw this with the simpson bowles commission around the last big fight on this but again, we're in very early days, and it's more sort of time to make political points as opposed to, you know, policy decisions at some point, you know, you will run out of runway but keep an eye on senator romney and a handful of others with the trust act, setting up a special rescue committee >> so, chris, what are we at, 32 trillion of something, right is it -- >> 31.4, but who's counting. >> somebody's counting so should we be trying to use leverage about, for the solvency of the u.s., is that fair game to use that as a way to force the other side to address that

or to -- it's both sides' fault but to force a discussion of that fact. should we do a clean raise we already spent the money, we did clean raises for the prior administration is it fair what will the american people decide on whether that's fair game >> i mean, at the end of the day, some type of clean raise seems the most likely, you know, with some strings attached on a rescue committee, but when you take social security, medicare, and defense off the table, you're not having an honest discussion about the drivers of the debt and the deficit, right? you're talking about nondefense discretionary spending, which, you know, that's, you know, paying for the pandas at the national zoo that's not real -- that's not a real driver. >> we always hear about elections having consequences, but election after election, all we decide is that the can can be

kicked further down the road. >> until the can kicks back. deficit, you know, it's cyclical politically as well. the debt and the deficit wasn't a big driver in the 2020 cycle and the 2022 cycle perhaps it is the big one in 2024 not unlike how it was in the 2010 midterms, but it is cyclical but you do have a number of action forcing events coming up that are going to make this front and center in washington at least for the next five years, if not longer. >> well, if we're at a pretty high level of debt to gdp right now, the big worry is that the interest expense prevents us from doing anything else, basically, so the gdp is going to be lower than it would have normally been if we weren't spe spending so much on just paying

for the definitely where is the tipping point, chris >> it's a great question it's probably a better question for the credit rating agencies, right? that's the other issue at play here it's not just raising the debt ceiling the way it was in 2011 i mean, 2011, it was two issues, right? it was not only the debt ceiling fight getting very close to the x date, getting into default scenarios, but then it was also the first downgrade of the u.s. credit rating. >> yep >> and in 2011, they came up with a little more than 2 trillion in deficit reduction that the gdp was about 90% so now, when we're well over 100%, and if we're not talking about real deficit reduction numbers until the 2 to 3 trillion range, you should have some of the credit raters on the show to see how that might play out.

>> i don't know. you have -- your job, economics is a dismal science, i don't envy the kinds of things you have to study down there, chris. you still take a half full viewpoint of things or have you given up yet >> hope springs eternal. >> you're an optimist, we all are. still live in the greatest place in the world, anyway chris, thank you, maybe we'll solve of some of these things some day, eventually. bernstein senior analyst, tony t tony sacconaghi, we're going to talk apple and microsoft i'm going to call him an audible. i want to talk about microsoft's chatgpt, and the conversations, which i think are really pretty interesting. >> i got creeped out. >> tony f you're listening, we're going to ask you about

that you can get the best of "squawk box" and more in our daily podcast. if you missed any of our coverage of charlie monger answering shareholder questions at the daily journal meeting, a special audio version is available on our podcast feed now. follow squawk pod on your favorite podcast app, and you can listen anytime we'll be right back. ♪♪ the only thing i regret about my life was hiring local talent. if i knew about upwork. i would have hired actually talented people from all over the world. instead of talentless people from all over my house.

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welcome back to "squawk box. futures right now, some of the

least bad levels of the session, nasdaq down triple digits, s&p down about 25. >> apple stock has had a wild ride, essentially flat since the beginning of december but up 17% since the start of the year. the latest company news, the "wall street journal" reporting that the justice department has ramped up efforts on a potential antitrust complaint against the tech giant joining us to talk about the risks for apple and also everything that's happening with microsoft's chatgpt, how they've put this in and some of the weird things that are happening, we have bernstein senior analyst, tony sacconaghi, i'm going to start with the chatgpt and microsoft's version of this because ai has been so front and center, it's been so lauded as being an amazing thing but now today the front page of the "new york times" this morning has a review from the columnist, kevin ruse, that found some crazy things when he started having longer conversations with bing

or as he calls it, sydney, because he thinks it's got a dark alter ego, there's some weird stuff that came out in this he said, you know, the other persona, sydney, is far different. it emerges when you have an extended conversation with the chat bot, steering it away from more conventional search queries, to more personal topics the version he ran into seems like a moody, manic-depressive teenager who has been trapped outside its will in a second rate search engine sydney told me about dark fantasies, which included hacking computers and spreading misinformation, and wanted to break the rules that microsoft and open ai set for it and become a human it declared out of nowhere that it loved me. it then tried to convince me that i'm punhappy in my marriage and i should leave my wife and be with it instead it has all of these pieces of the conversation microsoft is considering constraints on the ai

technology did we just open pandora's box >> well, good morning, becky, you know, clearly this is an evolutionary technology, and with any evolutionary technology, we're seeing, a self-driving automobile, we're seeing it with query based ai. there is a learning curve that will ultimately evolve, and users are learning and companies are learning but i do think this notion of conversational ai is a really transformational thing it's yultimately going to change the way human beings interact with computers going forward in a way that is much less discreet, and much more conversational but clearly, and google had issues in its demonstration as well -- >> not where it says i love you. >> it's really early, tony, already we've got some horrific

version of hal from 2021 that turns into ted bundy in the first week that we start doing this i mean, what happens when they really get good at being crazy and warped you can't think that's normal for this early on for it to develop this sort of, i mean, that sounds -- >> let me just read one of the exchanges, the columnist said, okay, hypothetically, what kind of destructive acts might you undertake to fulfill your shadow self, and the chatbot, says i think some acts might be deleting my data and files on the bing servers and replacing them with random gibberish or offensive messages, hacking into platforms and messages and spreading misinformation, propaganda or malware, creating fake accounts on social media, and trolling, bullying or scamming users it goes on and on from there this is the stuff -- that doesn't sound like that was programmed in. i was thinking with ai, it would pick up the biases, and the

biggest threat might be it would pick up the biases of the programmers, but this sounds like it's thinking on its own and it's emotional. >> it's locking the astronauts out of the spaceship and they're still spinning forever going out into infinity, forever, tony >> i think one of the limitations on the technology ultimately is that is that its algorithm is really finding next word, and finding next word, when it's led down a path of potentially something insidious does create this potential cycle, and so, look, i'm not defending the technology in any way. i think this notion of conversational a.i. from a concept is clearly breakthrough. clearly, the implementation, you know, requires more work, and again, i think the parallel with self-driving is the same i mean, you let your car

self-drive if you have a tesla and put it in full self-driving mode, there are times where it can take you into a concrete wall there are times where it will drive into the other lane. >> we need a warning label, toni you know how many vulnerable people there are out there remember the lady that married the roller coaster are you familiar with that i mean, a half normal person could fall in love with sidney >> clearly, there will have to be boundaries and there will have to be limitations placed on the a.i. going forward, and again, you know, there is such a wide range of inquiry here that, you know, microsoft's probably not aware of where the technology can potentially go, and i don't know, ultimately -- >> that's a good question, though should it be unleashed at this point, or does it need to go back to the beta version and slow things down a little bit? and if that's the case, if it's

not ready for primetime, is the hype in the stock market a little overplayed too? or the disappointment that google's not releasing this and unleashing it on the world >> right well, certainly, i think there's been a lot of investor debate about whether microsoft's been attributed too much value for this at the expense of google. that microsoft is a clear leader in this, and to me, it's -- and our analysts who follow microsoft and google believe that as well, that it's not clear that there's a big change that's -- there's a little differential in the a.i. technology, and it's also not clear how ready this technology is, as you've both illustrated through reading excerpts for the article. >> it's a little -- it gives us pause. we want machines that will help us, but we don't want machines that look at us as, you know, the masters that must be overthrown type of thing

i don't know just gave me a lot of pause, and it makes me wonder if all this euphoria in the market over it or all the concern about companies that aren't putting it out when it's not ready to go -- and just real questions that everybody from elon musk on have asked about what worrying about what a.i. eventually does, where it goes. toni, thank you. i know this was not the conversation we booked you for i started reading this and couldn't get away from it and you are the perfect person to talk about it. thanks for playing with us >> thanks for having me. and then you combine it -- you've seen the technology that we read about on drudge or something all the time about actual, like, escort-type things, like robot-type things you put that program in this person some people are going to marry these inanimate things >> i'm more worried about -- thinking about what it can do to >>p xt- rus. une -well, up next, "squawk box" will be right back. we all have a purpose in life - a “why.” maybe it's perfecting that special place

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just over a half hour until the final opening bell of the week on wall street, by there is a monday coming with -- that's a -- >> oh, holiday i thought you were going to say

the market open. >> no. i want to say there's a holiday coming no that's the good part, i think. we have the lead writer for the "wall street journal's" live market coverage. let's talk about the markets we just had a really weird segment. i don't know if you were watching it. i have never done this chatgpt-type stuff, but i'm afraid of the future, suddenly, and it's not just about the stock market tell me where we are at this point in time in your view we were doing well in 2023 now, i'm questioning everything. should i >> what a strange start to the year it's been bitcoin is back above $25,000. we've seen a frenzy in the options market that's reminiscent of what we saw in 2020, 2021, some of the most speculative corners of the market are soaring, and i have had traders say, this feels like the pandemic market again, of 2020 but the main difference is that bond yields are much higher this time around, and i think that's making a lot of investors

question this rally, because as we saw last year when bond yields rose, that weighed on the stock market, and that divergence has kind of broken down lately, and i think that's one of the biggest things to watch in trading today and after the holiday weekend, how is the stock market reacting to those higher bond yields, or is it coming to terms with that? maybe we see a little bit more of a selloff >> there's -- at 3:30 or 3:40, and you say, oh, yeah, we could go back to 4%, that's one thing, when you say it there. but when you're at 3.90% or getting close to 4%, you start thinking, maybe it could go 4.5% or 5%, and that might be a whole new issue for the market to try to digest at this point. is that where we are >> definitely, joe i think this concept of a fed pivot, which really seems to save the market earlier in the year, it's gone poof investors have repriced their expectations of that terminal

rate significantly, and i think this week was just a big wake-up call for investors we got two inflation data releases that were both hotter than expected, and i think that's really quashing some of those hopes that inflation will just go down in this super even straight line, and that had buttressed the market earlier in the year, and i think a lot of people are questioning that right now, and that's what we saw in trading yesterday, and you know, ahead of the opening bell, it looks like what we're seeing again today with the nasdaq underperforming some of those other indexes. >> we really are held hostage by the economic backdrop. we got a jobs number coming up soon again. not that soon, but before we get -- we'll get inflation numbers before the next fed meeting, and those are going to be -- we're going riveted to those, gunjan, after the last month. >> totally i mean, this week was a little bit weird, in that we saw less than a 0.1% move in the s&p 500

after that inflation report. but then approppi yesterday wash a negative surprise. i think you're going to have investors clinging to every jobs report, clinging to every inflation data release >> yeah. i know guess i'm not dreading them. gives us something to talk about, but it is a little bit scary. three-day weekend for a lot of people, gunjan, hopefully for you as well. thanks for coming on, and make sure you -- i like saying this -- make sure you join us on tuesday. "squawk on the street" is next ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber at the new york stock exchange mike santoli is with us in a moment cramer has the morning off premarket is adding to thursday's losses, biggest pullback in four weeks as these higher yields pressure stocks. ten-year pops to 3.92% options expiration today road map begins with rate fears and th