share. don't forget, tesla has its analyst day coming up next week. and that's when we'll find out if elon musk has anything to say about pricing, perhaps a model two, some kind of an update there. lots of questions about the pricing of the tesla vehicles. david? >> all right i'll circle that date on my calendar phil, thank you. phil lebeau. time now to get over to carl and sarah. good wednesday morning again. i'm sara eisen here with carl quintanilla. we are live for you on the floor of the new york stock exchange setting the agenda for us today, we have pepsico's ceo, ramon laguarta on the pulse of the consumer and a tough macro environment. his outlook on price hikes and demand, as the stock comes off of strong earnings and sales in q4 later on, former federal reserve vice chair richard clairda, that has this market overpriced a recession like bullard suggested today? we'll talk some inflation, rates, potential soft landing, all ahead of the minutes this afternoon. plus, a rare interview with

sequoia managing partner roelof bot botha. we'll get his take on the valley's new obsession with ai and why he thinks elon musk will eventually succeed at twitter. meantime, markets trying to ride a pretty narrow range right around 4k. dow has been in and out of the red. obviously, some of the comments by bullard today along with some additional retail touchpoints like tjx, all getting absorbed but the fed minutes this afternoon will be key. >> 2:00 p.m. eastern time. we'll start with a citi note out today envisioning a less hard landing. they say several possible catalysts. they also say, the campaign against inflation still has a long way to go whiledown, citi argues the ongoing demand is fueling tight labor markets. that spurs their belief for three more rate hikes this year. taking the fed funds rate well into the 5% range. it's basically where the market has caught up to in the last week

we're going to talk to the arthur of this note, citigroup's chief global economist nathan sheets in just about a half hour first, let's bring in cnbc senior markets commentator, mike santoli, to help break down some of the key things laid out there. mike, as the market readjusts to the new reality on the economy, inflation, and the fed >> yeah, sarah i mean, i think the big question investors are probably asking is, what are we exactly wishing for? are we wishing for an economy that is, you know, so sturdy, that it actually is going to require more fed rate hikes to slow it down enough to get inflation in line? or do we think that we're on the glide path where the fed can be satisfied with just -- we're saying, just three more quarter-point hikes. it is still going to represent an absolutely historic magnitude of tightening from the beginning of last year and will the economy remain okay i think the market, it's interesting. the stock market right now is not really priced for a recession. the bond market, the treasury yield curve, you could argue, is doing that, or is it just priced for a collapse in inflation in

the second half of the year. i feel like no conviction that you have right now can override the next series of key data points we're going to get with pce, see what the trajectory of inflation is, with the jobs number, for february that's going to come out in a couple of weeks. all of this stuff, i think, is healthy debate we're sort of caught in the middle in the stock market not cheap, but not super overpriced, and trying to make piece with this new level of bond yields. credit markets, interestingly, remain relatively firm, but they've softened up some this month. that represents a slight tightening of financial conditions, but maybe not enough to do much to inflation. >> you know, we're going to cla collie cla reeda in a few minutes. i think he even suggests they might start cutting rates before the end of the year. >> i think if you pan out and look at the full scope of what's happened, absolutely, the fed went from just about 0 to 4.75% at the high end of the current

range in basically less than a year there's not a lot more to do if you believe at all in the lags in fed policy, you saw some bullard talking about how the transparency of the fed and the forward guidance that they have offered allowed the markets to refresh. the reason we have this inverted treasury yield curve for so long at this point is because the market took short rates right up to where they thought they should be, based on what the fed was telling us >> the age of forward guidance, as bullard said, earlier this morning. good stuff, mike mike santoli this morning kicking us off i've got a news alert on meta. the company is responding now to this "washington post" piece, suggesting that they're getting ready for another round of layoffs. our julia boorstin has details hi, julia. >> that's right. a meta spokesperson, andy stone, just tweeting out, with all due respect, you got this one wrong, saying that "the washington post" headline that -- saying that meta plans to cut thousands more jobs is just not accurate they do say that they have been consistently indicating that they will be doing more cuts,

more tightening, but that the thousands number is simply not right. they have said repeatedly that they have been looking for teams and projects that may no longer make sense mark zuckerberg called 2023 the year of efficiency, but he responds to the headline, saying that the thousands of jobs is just not accurate. and just sort of indicates that those journalists should be looking back at some other commentary meta has made in the past several months, about his efforts to do overall tightening and efficiency, but that the cuts that the company made back in november would have been the mass of those numbers of job cuts, about 13% of meta's staff cut back in november back over to you >> julia boorstin, thank you for the clarification there on that report let's talk more about the economy, some of the silicon valley job cuts, and much more sequoia capital managing partner roelof botha joins us here at post nine. first of all, a treat to see you

here in new york >> thank you >> even though facebook or meta is denying the report about the recent round of layoffs, what is your sense about where we are in this cutting cycle >> i think companies have a lot more room to reduce expenses there's an era where the cost of capital is essentially zero. money is free and made sense for companies to invest in whatever they could, both to acquire customers and to invest in r&d but i think back to my days at paypal in 2000, we had seven months of runway left. we quickly had to figure out how to build a business. you're seeing that kind of realism set in in silicon valley, as companies focus on cost effectiveness airbnb released earnings last week we were an early seed investor in the company they have 5% fewer employees today than they did in 2019. and revenues have increased by 75%. and now the company generates cash i think you'll see that kind of efficiency set root in silicon valley >> is that the message you're giving to your portfolio companies right now? what are you telling them? >> so last may, we organized a

session and gathered all of our portfolio companies to give them a little bit of a warning. this is right when the fed started to tighten interest rates and let them know that the funding environment was going to change and they had to stretch every dollar that they had at this point, if we look across our portfolio, the mean number of months companies have in runway is about 30 months. they have two and a half years to figure out their business model. but companies are just driving for far greater efficiency teams are leaner and making quicker decisions. >> what i can't figure out you mentioned airbnb, zoom, whatsapp, door dash -- a lot of these companies you're talking about were the biggest beneficiaries of the covid boom that we saw in the market, people ordering at home, staying at home. what it says about our economy, that a lot of these companies are the ones doing the givebacks and doing the cuts, because they just boomed during covid, and that's going the other way now >> in some sense, covid pulled the future forward so it enabled many more people to experience home delivery from

their couch than ever before i think many of those behaviors will remain. this thing we didn't anticipate was that behavior change was so rapid during covid and it was nation hard for companies to predict what would change. ecommerce had a boom in 2021, and now a pullback as people spend more money on experiences. companies are struggling with hitting the accelerator and then quickly having to hit the brakes, but the long-term trends are durable. >> your mention of paypal reminds me of elon musk, and what he's done to head count in twitter. it's not a 15% cutback, it's half i wonder if he's considered the tip of the spear in how you can get efficient in terms of reducing head count. and do you foresee other tech companies saying, we'll just let half the staff go? >> i don't know if other people have the strength of will to do what elon has done at twitter. i don't see that >> you're a believer, though you invested in this deal? >> we did. i've known elon for a long time. he was the first person to offer me a job in america. that's how i ended up in paypal

in 2000. sequoia was an investor in the company so we've been in business with him for 20 years when he pitched us, he had a clear thesis what could be done, but more importantly, it emphasized product innovation and a business model reinvention. and that thesis still holds. it's not even four months since the company went private people need to give him a little more time. we remain very optimistic. >> what about overall, roelof, you mentioned the cuts and that we'll continue to see a wave of efficiency, right? the year of efficiency, as mark zuckerberg calls it. what do you see for the economy? you have macro views and you get a pretty good window through your portfolio companies are you in the recession camp? and how deep and how long? >> the word that comes to mind for me is resilience this economy is just fabulously strong i mean, we've been through the whipsaw of covid we've now seen unheralded, the most tightening you've seen since the 1980s. we have 50-year record unemployment levels.

and it's just so hard to predict. so clearly, the economy is softening and people are making due, you know, stretching their dollars, so to speak but it's very hard for me to predict whether or not there will be a recession. >> ai? we were speaking of efficiency, i see bill gates today on a podcast, said that he thinks it's going to be probably the biggest thing of the decade. is that going to move the needle on at least productivity and get us to a place where we don't rely on every little tick of labor force participation that we can get >> absolutely. i think ai is a wave, a technology wave that rivals the internet, cloud commuting, and mobile and if you think about the science fiction author william gibson, he had this quote that the future is already here, it's just not evenly distributed. i think ai is already starting to make a huge impact on companies. we have a search company that's changing the way the consumers search gig hub was a company of hours that microsoft acquired. they co-piloted the capability that is now raising the capability of producers by upward of 50%. you'll start to see ai

infiltrate many different industries architecture, design, gaming, ca copy righting. and we have 40% higher per capita gdp than the uk, because the u.s. has consistently grown faster because of increases in productivity >> but is it getting to a point where it's frothy in the market? the chatgpt innovation, the fact that any company announces a new ai strategy and then the stock price goes up? >> well, inevitably, during these technology cycles, it's overhyped on the short run and underestimated in the light run. you had this run-up in the late '90s with the internet, and with the benefit of hindsight, the internet has had a far more pervasive effect on our lives that we anticipated then we are long-term investors we're looking at it with a ten-year lens, not a 12-month lens >> is this the moment of dislocation, is that what you're saying >> no, i think that -- i don't think so you know, we just made two unannounced seed investments last week with spectacular founders going off to generative ai opportunities and so i think

there's much moretivity. there are a couple of companies that grabbed the headlines i don't think that's representative of all the innovations that are taking place. >> is that what you're most excited about right now? ai >> i am. >> i could tell. roelof, thank you very much. roelof botha of sequoia. still to come today, vice ch chair clarida is with us plus, the ceo of pepsico is with us we'll talk price strategy. we mentioned it earlier. city saying that inflation is not yet defeated obviously, there's still some work to do a less hard landing, they argue, is on the table. and their chief global economist stetngtaedus this hour as well ju gti srt don't go away. pace, advancing flight for future generations. ♪ welcome to a new era of flight.

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fed definitely in focus as we await the minutes this afternoon. investors looking for some more insight into future policy and the possibility of a soft landing. st. louis fed president jim bullard on squawk this morning talked about the mismatch between the markets and the fed when it comes to a recession outlook. >> markets have overpriced a recession in the second half of 2022, and overpriced a recession in the first half of 2023. maybe they're overpricing the chances of a recession in the second half of 2023. you have china coming onboard. you have a stronger europe than we thought it kind of seems like the u.s.

economy might be more resilient than markets thought let's say, six or eight weeks ago. >> joining us this morning, former federal reserve vice chair, richard clarida, currently managing director at pimco. richard, it's so great to have you. i was just looking at your blog post today, in which you say, markets are finally listening to the message they've been getting for months although you add, the fed has already done most of the heavy lifting they'll need to do before they pause later this year does that sort of match up with what at least the market heard from bullard today >> i think so. you know, we've had this tug-of-war since last summer, occasional, between market pricing and the fed. and we saw another one of those bouts coming out after the february 1st meeting i think with the stronger than expected payroll data and some of the inflation in retail sales data, market pricing is now not only in line with the december dots, it looks like it's getting in line with where the march dots may end up. i think we need some perspective. the fed did a lot last year.

it was the most aggressive rate hike cycle in 40 years and we think that they're close to a pause, but they definitely want to see continued progress on inflation coming down yeah >> all right the question we get a lot is, all right, 450 basis points of tightening and unemployment at 50-year lows i mean, how -- how do you explain to a viewer, for example, how that's possible >> well, the labor market is traditionally a lagging indicator and so the labor market typically is probably the last big piece of the economy that will begin to slow. importantly, it's important to note, we have seen a pretty marked deceleration in wage inflation, even with unemployment at a 50-year low. now, it's not gone all the way where it needs to go wage inflation is now running at around 4% and it probably needs to downshift another point or so but it was running at close to six not that long ago.

so the labor market is adjusting, even before what we expect will be a rate of unemployment increasing, more or less in line with the fed, about a point and a quarter from here. >> the i love the transition, rich, from fed vice chair to investment committee member of pimco. because now you're speaking with what the market wants to hear, right? talking about pauses and them having done enough and potentially cuts this year this is not what the fed is talking about. >> well, well, i know. and i think part of it, sarah, is that the fed projections are always the most likely case. and i think both can be true maybe it's most likely the fed doesn't cut, but it's also the case that if inflation comes down faster than they expect, then the fed could be considering that later again, i don't think we need to spend a lot of time on the rate cuts they want to keep rates at a restrictive level for some time. but as we move into next ear, they will become more data

dependent, i think >> what about the fact that the market has now added, i think, june, and expects a higher terminal rate, since the last time we spoke, because we had high retail sales, hot cpi, hot ppi, all of those numbers better than expected. and now we're expecting three hikes going up to five-point-almost-four percent is that where you're at? >> we fully expect that they'll deliver what they projected in december, which is 25 at the march and the may meeting. depending on the data, they could go another 25. the markets have essentially moved all the way there. i would expect the chair in this next press conference to maintain some optionality for the committee on that. sarah, as they've emphasized, and again, i did your show recently, but these are fast-moving things the chair emphasized that the reality is that, you know, they

have done a lot. at some point, they want to at some point pause and step back and see what the cumulative effects of these hikes are on the economy. it's a bit of a balancing act. i think it's too soon right now to put 100% on that additional hike in june but it's certainly in play, depending on the data. >> there's also an article in "the washington post" about the biden administration narrowing the list for the fed vice chair, now that lale brainerd has gone to the white house they mentioned a few names, seth carpenter, who's a morgan stanley wall street economist and saying they could go within the fed, too mary daly was mentioned from san francisco fed. lisa cook. this was your role how important is that number two role in shaping the policy and the consensus, because a lot of people in the markets saw brainerd as a dovish sort of counterweight to some of the main members of the fed. >> well, it won't surprise your

viewers to hear me say, i do think the vice chair of the fed is a very important role you know, janet yellen, stanley fisher, roger ferguson, a lot of major players have had that. >> richard clarida >> thank you all of the names that you mentioned are -- most of the names you mentioned are people i've known for years i think each of them would bring a lot to the table karen dinah, jane everly, seth carpenter would all, i think, be able to hit the ground running, which is important i think it's also important in the fed for the chair to trust and be able to have candid discussions with his vice chair. and i think all three of those folks, and certainly lisa, as well, would fit that description. so i think the biden administration will have a wealth of good choices for this role but, yes, it is an important role, in particular. the fed will, according to chair

powell, the fed will, on a five-year schedule, begin to do another review of its framework. and i oversaw that effort in 2019 so whoever he puts in that job will have a very important role in the next framework review >> they say personnel is policy and we'll keep a close eye on the dots from here on out. richard, great to see you. thanks so much for the help today. richard clarida. >> thank you after this, more trouble ahead for intel. we've got the chipmaker's latest cost-cutting moves, including a massive cut to its dividend. that's coming up later this hour but first, we're keeping our eyes on shares of baidu. that stock is moving, losing its early morning gains and now lower despite profits coming in better than expected a $5 billion buyback also announced. the stock dubb ingstock, though since its november low the dow up 27, very minor gains ahead of the fed minutes at 2:00 p.m. we'll be right back.

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welcome back i want to get a check on the price action in lithium, now down double digits year-to-date. trading at levels we haven't seen since september of '22. lithium hid a record high of 85,000 on december 1st of last year, that brought down in part because of a slowdown in evs in china. here in the united states, automakers continue to try to streamline their supply chains, ford announced plans to spend more than $3 billion on an ev battery plant. gm investing $650 million in a lithium mine earlier this month. and some reports saying that tesla may be considering buying a lithium mine of its own. we're definitely going to watch that today, as a clue about the auto business. let's get a news update this morning about their friend, collin >> hey, what's happening at this hour at least ten palestinians dead and many more injured in fighting sparked by a rare daytime arrest operation in israel in the occupied west city of nablis. three militants were killed and

the house they were in was destroyed after they started shooting at israeli troops palestinian officials say a 72-year-old man was among those killed in the fighting european meetings today have failed to agree to new sanctions on russia that they hoped to have in place for friday's one-year anniversary of the ukraine war. that's what diplomatic sources are telling reuters, which reports more talks are set for tomorrow afternoon and first lady jill biden is in namibia today her office says she will focus on the empowerment of women and y youth in that visit. that's the very latest sarah, back to you >> frank, thank you. still to come, a rare tv interview with the ceo of pepsico. he joins us live from one of the biggest consumer-focused conferences in the u.s., as consumer staples remains one of the up sectors right now on wall street one of the gainers, i should say. plus, up next, citigroup's chief global economist says that the firm now envisions a less-hard landing for the global economy he joins uwh "ua oths ensqwkn e street" comes right back

welcome back it's 11:30 here on wall street, 4:30 in london as the european markets close lower again. red across the continent investors cautious ahead of the fed minutes coming up in just a couple of hours. some bright economic data in europe continues to be the story abroad german business confidence improving for the fourth straight month and yesterday, we talked about german pmi expanding for the first time in eight months

kind of reminds us what some have said about the economic surprise that europe's been. >> and in the u.s., too. economic data beat it's a string of them. the question is, is there something funky happening in the beginning of the year with financial conditions easing overall and do they resume the recessionary outlook the bunds bank expects the economy to shrink. one thing i'm watching overseas, the foreign exchange market, of course, but specifically the yen. something happened overnight the bank of japan unscheduled had to step in to the market to conduct emergency bond buying to rein in yields because the ten-year bond yield breached the cap for the second straight -- they have a cap there, it went to 0.505, and they had to step in there's a lot of questions if they'll be continue to be able to do this while everyone else is raising interest rates. they have a new bank of japan chief that will testify on friday, and whether they

continue this stimulus policy. the reason the dollar is interesting now, also, is because it's actually at a six-week high in general it's weakening against the yen today. but it's at a six-week high on this idea that the u.s. economy is performing better than expected, and there are now expectations that the fed will have to do more and hold higher for longer and tightens financial conditions and it means that the market is doing the fed's work for it and something that could be a headwind for earnings. remember what it did last year >> indeed. we're not back to 114, but a pretty good trade so far a couple of hours left in the trading day. let's get to post -- not sure what post bob is at. >> i'm right between post seven and eight, about 100 feet behind you. we're not getting the bounceback we were expecting from yesterday's debacle, but a lot of retail earnings the big one this morning was tjx. it's down a little bit and with a lot of these retailers, a little good news, a little bad news. 4.5 million shares

that's a lot of volume normally, you would see about 5 million shares in a total day for tjx. we're only a third of the way through. a lot of trading going on here some good news and bad news. the earnings were about in line with expectations. the tough part is gross margins are coming down a little bit, about 100 basis points it's coming down because there were a lot of markdowns and a lot of clearance this is going to be a problem with the retailers, particularly the apparel companies as we get into this earnings season here the good news is, the inventory is going down. it's actually going down by roughly 2% this is the first reduction we've seen in a couple of years in the inventory levels. that's good. so modest increase in margins, not great. inventory reduction, that is good news. you get the idea it's sort of a mixed picture the real problem is with the guidance it's below expectations. i think you'll see this a lot with the retailers, as we get more companies reporting we'll get the bulk of the other big names, that will be actually happening next week. in terms of retail trends, here's what i see so far the consumer is still strong, but it's slowing labor demand is really strong.

that's going to be an issue for some margins, as well. we see cost cutting, we see inventory reduction, and we see, as a result, particularly of labor demand being strong, some real pressure on operating margins. sarah, back to you >> bob, thank you. carl, let's take a look at some of the notes -- you always post all the good stuff about what you're watching in terms of the research notes morgan stanley out with a new one on the consumer health that you thought was interesting, as wages -- expecting real wages to turn positive. >> this is the chart it's hard to -- it's not an exact replica of what morgan stanley printed, but basically, their point is that they see real wages going positive in the second quarter of this year. obviously, as inflation gets tamped down, one of those nice parts about the cycle and that is, goods deflate faster than wages. so you end up, as a consumer, at some point, hopefully ahead of the game and after a lot of pressure where real wage have been negative that might be a bounce for the consumer and might be one reason we're seeing a pushout of some of

these recessionary calls >> it's also interesting to look at things like this in the context of rising delinquency rates and rising credit card debt there was a subprime auto debt rising yesterday and the journal pointed out 9% still, though, we're in levels that remain fairly healthy, but we're watching these trends, right? >> the morgan stanley chart booked today takes a look at overall household balance sheets they have come around the peak, so to speak, given what's happened to equities and housing values but still, way ahead of where we were pre-covid, going back even a little bit further than that and that's the cushion that people are counting on you know, if, in fact, the labor market softens, there's still going to be something left in the nest egg at the average household. >> which is the problem for the fed. and then there's the citi note that currently caught our attention today, expecting a less hard landing. a story there, they expect global growth to slow at a roughly 2.2% pace. it's a quarter of a percent up

from projections last year it's basically been what the market is telling you. i hate the no-landing scenario, but -- because i don't really know what it means, but the idea is it's a less-hard landing scenario and that's what citi is expecting and a lot of the economies are now expecting and what the market has been saying. >> in fact, joining us this morning with more on that note is, in fact, citi's global chief economist, nathan sheets it's great to have you walk us through what led you to this call and how -- how much of a turn is it in your overall view >> well, we are seeing an extraordinarily resilient global economy. if you think about the shocks that we've seen over the last several years and the fact that growth is still positive and the consumer, as you highlighted, is still spending we're seeing that in china we're seeing that in the euro area where economy is stagnating, but we're not seeing a euro area

recession like we expected and we're seeing that in a major way in the recent u.s. data. and i think that the strength in the global economy is really now passed from the goods sectors into the services sectors. and consumers are hungry for those service experiences that they weren't able to have during the pandemic they have pent-up savings and the consumer is spending i think that's all the good news the challenge is that it means there will be likely to see continued inflation and that central banks will have to stay active for quite some time yet to come. >> sarah, it kind of reminds me of the interview you did with jane frazier in davos probably a year ago, which i would argue is a lot darker than the note we're getting from nathan right now. >> right, worried about global

growth >> the pushback i have on all of this is, look, the yield curve is inverted the most since 40 years. and the fed has done the most tightening since the 1970s, and if you add those two things up, are you sure we can get away with a soft landing? >> i think this is the central question that we struggle with in the outlook, and it has to d with, how does monetary policy influence the economy? what are those channels through which it as low as spending and growth o our sense is that the fed has done a lot, the full effects of which have not been felt, and over the next few quarters, as they come through, there will be a recession in the united states and there will likely to be downturns at various times and various tra skjectories and oth countries as well.

but nevertheless, it's kind of an imbalance between that tightens of monetary policy and that transmission and this underlined resilience that i've described, when you put those things together, makes us feel like, yeah, there's going to be a landing, but it's not going to be as hard as what we feared a year or so ago >> how much of this is pinned to china and the clarity we're getting about their ability to adapt to a post-covid world? >> china is reopening, which today looks like it has been quite successful is indeed a positive factor for the global economy and global markets we marked up our chinese growth forecast this year from 5.3% to 5.7% n now, like in the united states and europe, we expected it to be

led by consumer spending on services, so the spillover to the rest of the world won't be as intense as the case in the past with china recoveries, but nevertheless, the global economy is in a much better place. having china grow at almost 6% this year, as opposed to 3% last year, it's clearly a positive. >> yeah, when you are one of the main engines of global growth, that does move the needle. nathan, interesting note thank you for helping our viewers understand it today. good to see you. >> i had to remember that. jane frazier of city talked a year ago in davos about a soft landing? >> do they all bleed together? >> i'm glad you reminded me of it, because at that point, people were more worried about a recession. >> ukraine was brand-new and the tensions were at their peak, we could argue. >> we'll give her credit >> coming up next, intel cutting its dividend 66% as the stock continues to

struggle we'll talk about that, the pc market, and what nvidia gh lls nit.mit stay with us go air that runs factory. go sensors and software. go find leaks. go fix-em. emerson technology detects compressed air leaks to save manufacturers, like colgate, over 20% in energy costs. go brush your teeth. go boldly. emerson.

more cracks in intel emerging the company slashing its dividend by two-thirds since its lowest level since '07 that announcement, the latest step in intel's belt-tightening plans, following layoffs and management layoffs bernstein has a new note on the cut entitled, in terms of money, we have no money adding the move was not

surprising, inevitable, given a better description given the sharp deterioration. evercore says the dividend cut was a necessity, but there continues to be a lot of wood to chop we'll see how competitor nvidia is holding up. i think the words out of evercore were zero surprises given just cash management at this point, in the cycle of the business >> and evercore makes the point that given that it was not a surprise and there was a lot of expectations, that actually putting this risk behind them is a clearer positive for the name. the evercore analyst says they're rooting for intel to succeed. $30 price target on the name clearly, intel is struggling we've seen that in some of the earnings reports lately. a string of misses and losses and a resetting of business, loss of market share all the reasons you've heard wall street. and at the same time, i struggle, because these companies, i look at them in a different light right now, given the national security concerns and the lobbying and the sort of

long-term play for american resuring manufacturing of chips. and i wonder how this at all sbe interferes with some of those plan the fact that they're struggling in the near-term and they're securing cash. >> they are national security tech giants and with each passing day, as tensions continue to erode china/u.s., we'll need them to succeed after the break, pepsi warning there could be a mild recession in the u.s. after the second half of the year. we'll be joined by ceo ramon laguarta in a rare tv interview. the stock negative in 2023, not participating in the broader rally. demand has been hit by price hikes. we're back in two with stocks struggling to hold on to some of the early morning gains here the dow is up 35 points. 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;

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i screwed up. mhm. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? you can almost feel the drag when people walk by with their phones. oh i can't hear you... you're froze-- ladies, please! you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do. that and the paycheck.

welcome back strong earnings and sales for pepsico last quarter led the company to promise no more price hikes. the stock is up today. consumer staples are bucking the overall market down trend lately joining us now on the state of the consumer is pepsico ceo, ramon laguarta he just finished delivering remarks at the consumer analyst group of new york's 2023 conference joins us from boca ramon, welcome good to see you. >> hello, sarah. good to see you and good luck with your new program. >> thank you very much good to have you on the inaugural week so war you telling investors today about the strategy in '23? >> listen, we had a great

meeting here basically, obviously, we've been talking about how the company's strategy to growth in the last few years is delivering very good for us in terms of market share gains, financial performance and end-to-end transformation and how there's a huge runway for growth in our categories, both convenient foods and beverages, and how we're very well positioned as a company to capture that opportunity globally you know, in good economic circumstances or in bad economic circumstances, our categories are very resilient and our company continues to perform above our peers. so that was the core of the conversation >> obviously, really strong double-digit growth lately we saw in the last quarter, and we're seeing across the staples business, price hikes are a big part of that strategy. what happens next going forward with that? and with sales and with pricing? >> yeah, it's great questions.

listen, i think, what we're seeing, sarah, is we're seeing a bit of a deceleration of the inflation in a lot of our key commodities, especially on the market trade commodities more on the energy side than on the food side. and with that deceleration, obviously, we able to have muche levels of pricing in our business most of our pricing has already taken in markets where devaluations will drive further pricing but in most of our markets the large price has been taken. and now there will be small adjustments throughout the year. i think inflation will be a bit more elevated than in historical years but clearly less than what we saw in '22. that's how we're thinking about '23. >> and how is the consumer doing? there's a big debate in the u.s. about how much the consumer is slowing, if at all, is the

consumer accelerating? are we going into recession? walmart and home depot guidance is soft. what are you seeing? >> sara, we're seeing obviously consumers in the lower income levels much more tight in their disposal income and impacting their choices. the good news for us is that food continues to be a priority category and within food snacks and beverages continue to be prioritized. i think what we're doing ourselves in terms of improving the quality of our products, investing in our brands and execution capabilities is obviously impacting our categories, both consumer foods and beverages. we see consumer adjusting but

our categories continue to be resilient. we see that consumers are changing where to buy. there is an adjustment on where to buy there's adjustments on how much they spend away from home. if we are going out five times a week now two times a week. we're seeing how consumers are socializing. they used to go outside of the house for socializing and now entertaining at home adjustments to this possible income reality when i look at all this together there is an opportunity for pepsico. meals at home, entertainment at home, more socializing at home

we plan to capture those opportunities. >> an analyst about the portfolio strategy when i talk to folks about you and rival coca-cola, what is the strategy for alcohol plans for hard mountain dew? the overall portfolio and your business, how big of a part? >> i think we all see there is a convergence between some of the low alcohol space and occasions are blurring a little bit so there is an opportunity for us to go and leverage some of our assets both brands and execution. we're testing and learning we have good partners that are

creating products and licensing our brand. i think we're learning a lot we will expand that capability in a focused way scale up just becoming a complex discontributor of beverages. and that is how we plan to capture that opportunity that will continue over the long term >> what about labor? what are you seeing from a labor standpoint, ramon? how hard is it to hire and wage inflation across your supply chain? >> this continues to be a

bottleneck across our supply chain and when i talk to our peers in the consumer good space there's still pockets of shortage in some types of jobs and in geography across the country. increasing ilegal immigration, increase the labor partial but we continue to see shortage and, therefore, there is a wage inflation with that shortage very low, actually, unemployment levels and there is a wage increase which obviously will drive consumption is what's

keeping the economy. we see bottlenecks and we're dialing up on automation in some of the more critical jobs long-term people will not want to do, some of the more fiscally complex tasks in our business. there is still a shortage of labor in the united states not only the u.s. but that's happening in mexico, in western europe some other economies where there is a shortage of labor >> i know you will get a lot from analysts in florida on m&a. what is your appetite on doing a big deal with valuations down especially in the private market we've seen some deals for you. and if so, where would that be >> sara, i think we're seeing m&a as an opportunity to tweak

our portfolio both on the investment and divestment. i don't think it will change our company but will help us maybe go into some growth segments of our categories i don't expect us to do a big deal, the medium size deals that we've been doing in the last few years to optimize theportfolio we're not contemplating that as we speak >> ramon, thank you for the time today from cagney. appreciate you joining us. >> thank you, sara, and good luck with your program >> hope to see you back many more times ramon laguarta, the ceo of pepsico. a lot he gave us on m&a, on the consumer, though, and this question where is the consumer, the consumer is holding up

low income getting hit harder. they're adjusting and he sees a great opportunity for pepsico. i think this year will be interesting whether sales can hold up. >> especially since the company said they have given -- they're taking as much price as they're going to conagra, the number of snacking occasions continues to explode year over year mccormack saying they're finally getting pushback on frank's red-hot. >> i'll pay anything for frank's red-hot. i think that was a little overblown. a lot of those stocks are working. if you look at where americans are spending, what walmart told us, prioritizing groceries even

with the higher prices i think the question is how much elasticity, how much consumers can tolerate, there really is going forward. >> in fact, one of the few 52-week highs will be hershey. we're in the market where hsy, you know what the mood is when it's the only one setting new highs. as we close out the hour today, today's buzz all about mckinsey and the cutting at the company, 2,000 layoffs. techcoms on the chopping block normally consult other firms on what to do >> follow by example, i guess, or consults has had a good year or good few years coming out of covid like the other businesses attached to the capital markets. they're having to cut back i think it's notable because the jobs have cut beyond tech. i know meta shot down that rumor

but some of them have spread we've seen it with dupont, with now mckinsey, which is not a public company but could be indicative >> bumble, nvidia, but before that fed minutes coming up to the judge and "the half." carl, thank you very much. welcome to "the halftime report." i'm scott wapner the great debate in the markets right now as a restest of the october lows in the cards or not? what do we do? we take it to the investment committee. joining me josh brown, jim lebenthal, joe terranova and jenny harrington let's check the markets. searching for direction a little bit. s&p is trying to hold on to the 4,000 level. is the rally ending? will we retest the