rotate days with the desk mate that's nice. i have a desk mate it's thursday, february 23rd, 2023 this is getting sickening. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from nasdaq center in times square. i'm andrew ross sorkin with joe kernen we have melissa lee with us. we have a lot going on becky is off u.s. equities at this hour you remember yesterday, we started one way and ended in a different way. dow is opening up 90 points higher nasdaq up 100 points

s&p looking to open 18 points higher treasury yields. you are looking at the 10-year treasury at 3.45%. 2-year treasury at 4.7%. that's starting to -- you were talking about tax-free munis >> look, if you have money, put it in bitcoin. melissa is here. >> t-bill. >> what will you do with 4%? >> i'll sleep he well at night. >> i think you sleep okay. >> how much is the stock market going up this year what is your guess 10%? >> last year how about yesterday? it was up 100 points midday. it sickeningly went back down. we have katie stockton on today. we have you on you talked to traders every

night. all day long we get to retest the lows? >> they think retest in october. they think we may go lower. >> we had one from piper and mike wilson came on. worst case, it is a tough recession. he says 3,000 is not out of the question. >> let's say 5.5%. let's say we stay at 5.5% for longer that is what the markets are not factoring in they think 5%. >> yesterday, you hear what bullard said between 5 and 7. he used the "s" word in this context. okay if 3,500 is a possibility, i'm fine at 3,900 at 3,000, you might want to sell and have dry powder.

it does make a difference. if it is going down another 7% over 15 or 18. >> you want to put your dry powder in two years. >> what is dom saying? >> it will go lower. >> okay. >> a bearish tilt. >> seymour seymour buts >> i would say bullish situationally. the market is dealing with that. >> they are keeping their cash >> b.k.? >> b.k. -- he goes short bitcoin. i haven't talked to him recently >> he doesn't think it is a beanie baby. there are people >> munger. >> he is so tech savvy

he and warren have been tech sa savvy. quick to embrace new things. >> i give great difference to charles munger and warren buffett. >> why don't i get that? in a couple years. >> track record. >> we'll see let's get to stocks to watch. nvidia are higher pre-market 88 cents a share beat abestimate nvidia's data center business continues to grow. it was up over 11% year on year. that seeinggment is chips for a and benefit from the adoption of a.i. software. gaming revenue dried up which is down 46% year over year, but beat wall street expectation the a.i. talk juiced the stock up 8%. baidu said the a.i. ernie

bots said it will em bed it int the search engine first. reports this week that chinesing regulators have told tech companies not to offer access to chatgpt on platforms >> this is the beginning are we at 1% of what this becomes in five years? l like munger is slow to embrace social media what is a.i. doing is it weird that everybody got to the point at the same time? this quantum leap to where this company can do it. >> there are two issues. some of them could do it

previously and just didn't do it because they were not ready for primetime. there are elements that are not ready for primetime. i'm using it. >> oh, my god. in the column? i might like the column better. >> have you used it to write a column >> i asked it to write a deal book if you say write deal book it didn't do it. it doesn't have a real mind to know what to assemble or what the news is. things like that >> might not be the nuance it will be the nuance you prefer. >> i think in five years it could do some of this. i think you could ask it could write paragraphs for you i had an idea for a novel the other day. i put in the plot points in the thing. >> did it generate a book? >> it generated two pages of

really interesting -- i was like, wow. this is an interesting book. >> do they own it? >> i don't know how it works i was playing around with the service. >> andrew ross sorkin and cha chatgpt. >> it was your idea. maybe you self loved what it came up with it was -- you gave it enough parameters >> it wants to please you. >> i gave it the main character and this is what you do and this is what happens. i said write it like this movie. i gave it background and it did stuff. it was pretty neat >> all right i like when we say new this morning. i think people should assume >> we stick with new >> that might be redundant european union executive body telling staff they can no longer use tiktok on the government usual you-- issued

devices. elon musk and staff met yesterday. it was weird met with governor newsom to tour the headquarters in palo alto. tesla is taking over the lease for the office space which was previously occupied. goes gavin newsom look like who you cast as a politician look at that guy i don't know he has to play himself if there is ever a movie. a cool looking dude. the hair >> is this going somewhere >> you can't look at that and say that guy is just -- you know larry hogan and some others. that would only happen in

california >> i feel he is digging himself into a hole. >> i'm not where near a hole i'm not that -- i have not scratched. >> he has the shovel out. >> it's a compliment >> it is an insult to the other governors. >> larry doesn't care. >> we should go back to the previously -- >> hp. musk told taking over the original headquarters was a poetic transition. he called the new facility a headquarters of tesla in addition to the main hq in austin, texas. sources close to the governor said it focused on the tesla efforts to create jobs and expand in the state. think if you had gravitas.

you could write his ticket >> he is hoping. >> that's all we need. the california-style governor in d.c. >> we'll debate that later. dan loeb told bath & body works wants a challenge. third point offered a stake in the company and this does not address his concern of governance and executive pay in a statement late yesterday, bath & body works would consider the nominations. this is not your favorite company. i know it gets confusing >> which one

>> bed bath & beyond >> why >> a different company >> bath & body works i thought about that >> lots of soaps >> bath and lotions. >> you know it is a $10 billion company? i didn't realize i had to look it up. i wanted to see the market cap >> they make that much money selling? >> overpriced mango lotion >> he's a lotion guy >> i could see him doing a papaya >> are you a bath balm >> if you had a gift certificate at that place. >> that's a lot of lotion. >> would you be able to burn through the gift certificate >> no.

i never know what to buy. >> okay. you wouldn't >> i'm a soap and water guy for the most part. >> they sell soap. it might be hibiscus >> i discovered and i was not a moisturizer person i found this moisturizer that is something. >> it changed his life >> i told you that. >> could we have the ceo on? >> i'll try to find it they are sold out of it. if they go on tv, they would have a problem >> they're sold out. you have discovered this >> yeah. that's what i like you know what i like to find >> it is usually an app. >> app or gadget >> exactly doughnuts. i didn't discover doughnuts. we have more on tap. fut futures pointing to gains

we will talk about the fed minutes and the jobless claims and gdp revisions. cancer and moderna and merck with the latest breakthrough you are watching "squawk box" live fthrom e nasdaq market site in times square. >> announcer: this cnbc program is sponsored by truist wealth. where we focus on person to person connections so you can focus on what matters most

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welcome back to "squawk box. let's get a take from the minutes of the recent fed meeting. officials acknowledges that signs of inflation coming down, but not enough to counter the need for more interest rate hikes. not everyone was on board with the 25 point rate hike some wanted 50 point hike.

bullard and mester were pushing for a more aggressive posture. neither are voting members we have your guests with us this morning. joe, help me >> it's eaophean >> they put it phonetically. it is complicated. let's talk about the fed and what it is doing let's talk about the idea that there are folks on the board who can't vote and have a different view and what the market is taking from them and the

comments that jim made on our show and the reality of what is going on in the room kevin. >> andrew, the first thing you have to think about is the two individuals that spoke are very popular. they carry a lot of weight inside the fed you see them on the air quite a bit and they are outspoken i do think they will be able to pur persuade the voting members to be hawkish you have lael brainard who just left the fed she was an influential dove. you will see the fed actually lean more hawkish going forward as we expect to continue and raise rates as we have the strong labor market out here >> what with is your sense of what is going to happen as the year progresses? i don't know if you heard earlier where melissa has a

sense among traders we could test the lows again and go below and a recession is coming? i don't know if they think that, melissa, because they believe the fed will induce that >> a light effect. we have not seen the effects of the policy of the fed tightening we could go 5.5% and we could stay longer. >> it is certainly good to see debate we don't want the group think. the robust debate. the conclusion is the market is looking at the sound bites no reference to transitories inflation. that is yesterday's news very much a concern about the ongoing persistent inflation what does it mean for markets? they overreacted and now correcting anding having the reality collect. as far as we have seen the

forecasts, we already touched the highs of the year and having the robust return. i'll go back to the hard data. the hard data is strong. strong employment data the use it inflation that will continue slowly. we will have surprises i don't think we will touch the type of lows we saw in 2022. we are definitely in a more solid footing. >> you don't think there is a lag effect and keel going and put their foot on the neck of the economy? >> i think they will keep going. more gradually than before definitely the foot on the neck of the economy is an image they don't want they are afraid of the tantrum in the past. that sector of that economy is struggling in a mode of austerity and that is not something the fed is willing to tolerate. >> where are we at the end of the year >> in terms of the economy, the

economy will continue to tick along with the slow to flat gdp. we may have variation in the prints as far as markets, i'm positive on markets because of what we are seeing you talked about a.i. in the segment. that is a single biggest inquiry. how do we get exposure from a.i. we at the cusp of the change that will feed into positive sentiment for tech stocks. defensives are doing well. infrastructure andi healthcare. i'm bullish on equities. i don't put a figure on the s&p as a whole we are looking at sector by sector that has traction too. >> kevin, you want to give us your end of year your inflation forecast as well. >> sure. going into the end of the year, we think the s&p will be right around 4,200 we think we have a lot of -- we

saw a lot of what we were going to get early on. our forecast is for the second half of the year to be slow and going into the end of the0242 in will occur you will see the 10-year move up it will go 4.75% you will get a terminal rate on fed fund around 5.75%. our original was 5.5%. as long as you have strong labor market and strong wall street over main street with the labor market, you will continue to see the fed raise rates higher >> kevin and aoifinn, thank you. i appreciate it. coming up, a cnbc scoop on

wells fargo. company laying off hundreds of mortgage bankers this week details after the break. later, ceo of airbus will join us live in the cnbc exclusive interview. what is that guy's name? that's not -- >> mr. faury >> right here on the squawk set. guillaume faury. we'll be right back. thank you! like your workplace benefits and retirement savings. with voya, considering all your financial choices together... can help you make smarter decisions. for a more confident financial future. hey, a tandem bicycle. can't do that by yourself. (voya mnemonic.) voya. well planned. well invested. well protected.

power e*trade's easy-to-use tools make complex trading less complicated custom scans help you find new trading opportunities while an earnings tool helps you plan your trades and stay on top of the market wells fargo laying off mortgage bankers as part of the shift. according to the cnbc article, some were recently rewarded with the california retreat we have hugh with us with more sending people you are going to fire to a retreat in california. does that speak to the sudden

dme ness of the layoffs or a nice gift >> good morning. it is great to be with you, melissa. it wasn't a bon voyage gift. you are a top mortgage banker and in some cases, those let go closed more than $100 million in loans. that was huge considering how slow the market was in 2022. if you went to the event, you thought you were having a fantastic year you know up for recognition in palm desert, close to palm springs. what happened is you go home and you discover that you are no longer part of the organization. you are being let go charlie scharff is retreating from the mortgage market >> the end of last year.

how strategic is this and how much is this the retrenchment of business and this is a wells fargo problem and they need to cut back >> this is a sign they decided to step back in a serious way from the mortgage business what tells you that is they are cutting close to the bone. there's not people you think of being let go in a down cycle these are top performers the fact they are cutting back where they don't have a bank presence is the take away here from the people that reached out to me. i have emails from wells fargo mortgage bankers who la melamen they were closer to the city, they would still have the job today. they are people who have done well and likely to do well in another situation. if they move to chase or first

republic, they can up and take contacts and network and transfer to another place. this shows that the ceo charlie scharff wasn't making a cosmetic shift when he announced last month they are stepping back from the mortgage market this is something that is a lasting shift and call that the mortgage market is not coming back any time soon. >> hugh, thank you hugh son his article is on cnbc. google is asking cloud p employees to share desks citing real estate efficiency it will apply to google cloud five locations kirkland and seattle and new york and san francisco and sunnyvale. the change is happening so that the company can invest in cloud growth there will be overflow drop space for employees who want to work on unassigned dates.

coming up, update on the supply chain from the head of the port of los angeles, import volume is dropping that is next during february, we celebrate the teammates and business leaders here is our cnbc senior events director >> my parents inspired my interest in news as immigrants, they taught me awareness and engagement my parents left liberia during the civil war to build a new life and careers and create opportunities for my brothers and me my parents are educators my dad retired from the long career of academics and research and public service during this time, he fulfilled a life-long dream of running for president in liberia i'm inspired by their story.

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welcome back to "squawk box. live at the nasdaq market site in times square. take a look at futures right now. we are in the glreen dow up 60 points s&p 500 looking to open 50 points higher. after two years of supply chain disruption, some shipments have normalized, but the ports on the west coast are seeing decline. the port of los angeles reported a 13% drop year over year. warning of another decline this month. the port of los angeles executive director is joining us i can't wait to have you talk about it with the notes. it is not the way i thought things would be going right now. a lot of it is you are getting competition from east coast and gulf ports the reopening of china hasn't

helped boost volumes >> good morning, joe the economic equation is more completion than we have seen. >> yeah. why? >> first quarter is volume down preci precipitously. you have high retail inventory levels 1.35 or 1.376. you get emails with discounts from retailers if you are like me, you are buying the retail inventory is elevated the reopening of china is one piece to it. the central government and ports in shanghai continue to prioritize that long-leg cargo we never saw a dip although the pressure is on the thedomestic supply chain cargo kept coming. the trepidation of the economy importers are trying to cut back with that, we saw the lunar new

year break longer than normal. >> we don't factor that. 30 days for the lunar new year also, explain how a lack of warehouse space causes lower volumes. how does that work >> 2 billion square feet of warehousing for the shores on the pacific to the desert region and southern california. they have been filled to the gills for the longest time. >> they can't accept more. >> can't accept more >> this is a demand problem? >> here is the other piece all of the numbers are looking better on dwell times. how long containers sit before moving to the importer or exporter brings them back. dwell times outside store fronts and warehouses beyond eight days normal cycle is three to four. folks are using them as mobile warehouses to augment the full brick and mortar. >> that sounds like it is good

for inflation. the demand is here the warehouses can charge so much and that is a higher price to pay to store things that will be net net inflationary >> it could be that's is the problem with the supply chain the bottlenecks persist and you see aggravated costs at the same time, cargo is moving away from the west coast. >> why is that you said there are regulatory issues we talked about gavin newsom are they driving away to east coast ports or business? >> go back to 2002 80% of the trans pacific trade moved through west coast ports today is 56% you get three things they tell me every day too expensive. you have very unique labor issues and you are overregulated. the air regulators on trucks or how you petition to do projects and get permitting through the

california environmental quality act. >> what is the difference in price, gene? if you are looking to move container from pick your place, china, to california versus the east coast or another port, what is the cost difference >> the end to end prices are manageable you can see them what the difference is how much it costs to lift the container on and off the ship at the port. more than double competitor. >> more than double. just to take the container off the ship to land >> that's right. >> wow. >> what you are telling me, the stuff is coming from china it is cheaper to go to the east coast. >> and less headache. >> that makes no sense >> that's why we have to get it together. >> that is like -- they go through the canal? all the way around >> suez or the panama. what is happening is you see big-time investment. they hired switched on

leadership they aligned with policymakers with business friendly regulation they have been nipping at our heels for the better part of 20 years. this is the result >> who would you talk to about this to fix it do they like business in california would they like the ports back to 80% >> this is the question that we have at hand governor newsom's annual budget -- >> good-looking guy. >> absolutely. good leader for the state of california >> he is this doesn't sound like it. >> the first time in a generation, alignment with the federal government and infrastructure law and california governor's budget now we can't miss this point in time we have to accelerate investment on infrastructure and while the the volume is down to create the efficiencies that don't add to the cost of the supply chain this is a big deal. >> is that why you have -- who's fault is this? it precedes him? >> you have so many stake

holders in the supply chain. it is has been going on for two decades. >> is that not new >> the regulation piece is there. >> when did that go into effect? >> we had the newest of regulations go into effect at the beginning of the year eliminating trucks with model engine years 2010 and earlier. it was about 18 to 20% of trucks you have not seen the impact volume has been down. >> you are saying you are not fighting overregulation or increased in costs, but bring efficiencies and cost savings by improving the infrastructure around it. >> that's right. the other piece -- >> the east coast ports will benefit from improving infrastructure from all of the federal bills, correct you are still going to have the same cost differential >> that is why we have to leap frog where we are not seeing the a

advances is the capacity 50% of the truck gates go unused every day. that is teed up to efficiency. if the trucker gets four or five turns, that is good news it is the sum of the work combined with the investment. >> could secretary buttigieg help does he take your calls? >> yes, he does. that's where he has to push this money out of the infrastructure law and make sure that we get our fair share that is the campaign to make sure that we're getting that investment money >> like the way you walk that line, gene i do you are telling me things, but not making anyone mad. good to have you on. on set you made it back here, right are you with andrew in the back of the plane >> we made it out here i'm doing okay for 3:00 pacific time >> thank you coming up, cancer vaccine therapy winning breakthrough

designation from the fda. we dig through that with meg tirrell. and why katie stockton says she sees sckheedtos ad lower we'll be right back. >> announcer: currency check is sponsored by interactive brokers. the best informed investors choose interactive brokers

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a cancer vaccine therapy from moderna and merck which we talked about winning breakthrough designation from the fda. meg tirrell has more >> reporter: joe, this is a medicine that would be for advanced melanoma. what it does it is it a personal vaccine. they are looking at the melanoma and personalizing the mrna therapy to each individual patient's cancer they have shown in a phase ii trial from december and it moved moderna's stock which could reduce the cancer recurring or death compared to keytruda alone. the news yesterday with the br breakthrough therapy desking i go na-- designation

this has been seen as an important program for moderna and merck. it extends moderna beyond mrna franchise. this is a more than $20 billion product of merck with $60 billion revenue in 2022. it is important. they have been receiving incr increased scrutiny on how they are extending the patent t protection senator warren sent a letter to the patent office to extend the protections. one of the ways they are trying to do that is change the formulation from iv to injection. from wall street, there is scrutiny on how they keep the revenue from this and the personal cancer vaccine is important. guys >> you would hope when they use

therapy where they decide to test the new vaccines with different existing drugs and you hope that a drug doesn't make it into an important clinical trial because it would be a way to extend the patent on the original compound. you think you could try the new, novel cancer vaccine and try it in conjunction with a lot of other cancers? why is keytruda so effective with the moderna vaccine >> that's a great question the way keytruda works is to keep the cancer from hiding from the immune system. it is a powerful drug. the way moderna works is it goes in and they find specific targeting on the cancer that is driving the melanoma they design the mrna vaccine and deliver that you teach the immune system to

fight that specific cancer at the same time keytruda is holding it to the immune system. that is why the class of drugs may work so well with it. >> it also would help with patent -- extentitending the pat for keytruda we are torn on this. in terms of a legal practice, patent attorneys, we need them and they do well think about what a bio-tech patent attorney needs to argue and what kind of background they need it is necessary. patents help they are right for abuse it is interesting. meg, thank you you need protection to spend a couple billion dollars on something that may not work. you need protection if it does work there's that lucky we have democrats and

republicans on opposite siedes f who to back. thank, meg. coming up, the a.i. arms race we talk about the influx of investment dollars in artificial intelligence software and hardware th> get the best of "squawk box" wi squawk pod on your favorite podcast app. we'll be right back. the first time your sales reached 100k was also the first time you hit this note... ( screams in joy) save 20% with the lowest transaction fees and keep more of what you make. with a partner that always puts you first. godaddy. tools and support for every small business first.

shares of alibaba moving higher the company just out with quarterly results beating on the top and bottom line to an adjusted $2.79 a share the company was able to navigate softer demand and supply chain issues due to covid-19 measures and expects continued recovery and consumer sentiment in economic activity. the stock up 4.6%. separately nvidia posting an upbeat revenue outlook for the

current quarter driven by the push into processors baidu says it will open its ai chatbot to the public in march here is daniel newman, coo for the future group there is a couple of ways of investing, the companies that are doing it and then sort of the picks and shovels kind of companies. what do you favor at this point in time when ai is still sort of an emerging technology >> the read i'm really excited about seeing what happened with nvidia to see how the inflection we saw with microsoft and google the past week was going to drive investors toward nvidia being the picks and shovel it is going to enable this next generation this arms race, we're going to see it move from being this open internet, the open ai and chatgpt to data that resides proprietary inside of companies. the enterprise applications, companies like ibm, service now, that can build work flows and

automations and helping companies maximize that unique enterprise data to enable employees to talk to an application and build a new work flow or to help, you know, a company build a new way to deliver a recommender engine to put the right product in front of the right person in a more contextual way we're just seeing the beginning, but i think there is a lot of enterprise applications that aren't being considered. this is consumerized now by search and by browser-based technologies from bing >> sure. nvidia, you say, is the most important player in ai they're selling gpus that will enable ai to happen. when you think about companies like microsoft and alphabet, which have gotten a lot of attention in recent weeks, do you think about them as an ai company? is ai a reason why you were investing in these two companies? it just seems way too early and it seems very, i don't know, you don't know how it is going to impact their businesses, if it will in fact be a positive thing and by how much when it comes to

earnings >> i think it gives you an indication of what is possible microsoft did an investor call on the day they announced the new chatgpt group and they talked about how every 1% of search the company is able to gain would yield $2 billion in revenue. you see why alphabet and microsoft are fighting so hard for this search space. like i said this is on one use case for ai. it is going to change the way users use technology it is going to change advertising, but it is going to take time. the idea this is all of a sudden going to change everything, we have seen a number of indications there is some problems that the data isn't all accurate and we're going to have probably some legal disputes with how things are linked and referenced because it is using all this data from publishers and others that want to get attribution and credit we have to pivot a little bit on how ai can use all of its accessible data, and then of course for companies like microsoft that are so diverse, it is how much revenue will it really drive

this search opportunity alone is pretty significant, which is why i think satya nadella and the company were so fast to try to get it in market, surprise alphabet. >> the launch of bard, which really did seem botched, sparked a market cap loss for alphabet that was sizable now as we peel back the layers of this, daniel, we're learning this can actually be a costly endeavor morgan stanley was out with a report saying a typical straightforward key word search is a fifth of a cent and a chatgpt style query would be five times the cost. so it would actually cost more in terms of the computing power. how do you think about that in terms of this period of time where we're early in this, and we haven't reaped the efficiencies of scale yet? >> this is where that power and price performance is going to become so important to companies and, of course, investors have to look at if this thing reaches

massive outshare and util utilization, how do we make the compute less expensive so margins increase and you also have every concern about esg and carbon footprints. data centers are using like 1% of the world's power as we increase the training of all the models and utilization of these by consumers and businesses, we're going to be driving more power there is going to be an equation that has to be considered here this is where i mentioned like nvidia and arm building technologies to try to drive up the power and up the performance -- up the performance while lowering the power utilization to try to make it more efficient. this is something that is going to have to be continued to be worked on because the models are going to get bigger. >> thank you for being on, daniel newman. a lot more coming up we have an exclusive interview with the ceo of airbus he'll join us on the "squawk set" and katie stockton, why she sees stocks heading, i hate to tell you this, folks, lower.

we'll explain coming right back after this

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see if your business may qualify. go to getrefunds.com. good morning futures starting the day in the green. but is there a bear growling on wall street? this hour we'll find out what the charts are telling us. breaking down the fed minutes. inflation may be cooling down. steve liesman reads between the lines. nvidia, shares are soaring

as ai chips give the company a boost as the second hour of "squawk box" begins right now. good morning welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site in times square melissa lee is here. becky is off today nice to see you. we got a lot to do and a lot of great things on tap. >> feeling okay? >> i'm groggy. >> people that get up at 3:30 are groggy. >> with you and andrew, it is invigorating. >> fjoe and i may be groggy. >> the other day, i figured out, i'm so tired, like 4:00 in the afternoon, i did the math, if you get up at 3:00, i think that's 13 hours. if you get up at 8:00, add 13,s

that like 9:00 or 10:00 when it is 4:00 in the afternoon for us. we wonder why, you know, we might feel a little -- but no, i meant, thank you for being here. >> my pleasure my honor to be here. >> did you hit your snooze at all? >> no. >> you got right up? >> 3:15 up. >> trying to fill everyone in on the information we need to know. >> u.s. equity futures at this hour, other information you may want to know, up 1 01 points if we open up right now nasdaq up 114 points, the s&p 500 up 20 points we're talking about treasuries in the last hour boy, oh, boy, the ten-year at 3.941, closing in on 4 the two-year, 2.4706 and talking crypto, joe still is thinking that this is maybe better than cash, don't know about that, but bitcoin, $23,734. it held up at least over this

short window and we'll talk about it. >> it is significant it seems like it has been relatively a little bit better >> i still think you can sleep better with the cash under the mattress. >> probably. >> than a usb stick. >> probably. until you think about some of the numbers we talked with pence about yesterday. 115 -- >> yeah. >> 150 trillion, not that far away, if we keep going the way we are each dollar is going to be worth a lot less >> i did -- i will say there was a fascinating -- i know you're going to disagree with this, a fascinating column by paul krugman yesterday. >> the internet, how it is no more important than the -- >> no, no. how healthcare costs actually have not completely leveled off, but you look at the cbo reports, where the conversation we were having ten years ago, rise above, remember that, and we said that things were going to spiral completely out of control

and elverything was going to be -- if you look at the cbo report ten years ago and what they're projecting and what actually happened, you would think healthcare costs leveled off in a remarkably good way and the speculation in the column was to say, what do we really know about where healthcare costs are going to be 20 years from now. >> with technology. >> that was the argument. >> but what is the cheapest thing in town versus going into a hospital preventing something or pharmaceutical >> that was -- >> if you can tackle alzheimer's eventually or dementia or chronic diabetes eventually, that's why you don't want to really screw up -- >> his argument, he was saying, now there is a new conversation, we're back on the table, do we need to cut social security, medicare, how do we do that? >> add in how much longer you have to be paying out social security for people that live to 100. >> i imagine it is going to become an issue.

it is hard to believe it won't become an issue you would think it would be a much bigger issue ten years ago, anyway -- >> to frank holland. >> big new host, come on worldwide exchange >> started on tuesday. >> yeah. >> killing it. >> andrew, i appreciate it thank you very much, joe, i appreciate the support melissa, good morning. thank you for holding these two guys together. they get a little crazy. morning movers earnings mover first, nvidia surging up 9% after beats on the to the and bottom line and bullish comments from the ceo about its ai-focused chips, accelerator chips, saying that nvidia would accelerate ai by another million x. shares of nvidia up 54% year to date telehealth company teledoc shares falling after a revenue beat, but a loss that we're not comparing to estimates we skipped ahead in the prompter we'll do intel, another chipmaker intel, shares up 1.5% right now.

this follows, of course, intel slashing their dividend yesterday by 65% still, morgan stanley giving the company an upgrade saying there is just limited downside to the stock, you can see it underperformed this year and limited downside, adding, though, the dividend cut puts intel in line with its peers now teledoc falling after a revenue beat and loss not comparing to estimates weak guidance as well. they say they see a lot of upside in adding and they fully acknowledge the call will be met with a high level of pushback. interesting call there back over to you guys. >> nice to see you i'm going to call you mr. host, mr. anchor, mr. anchorman. >> i appreciate the support. >> nice to see you so early in the morning these days meantime, fed officials sticking to the path of higher interest rates as inflation remains well above target. to steve liesman, who has been reading between the lines. i love when you read between the lines. tell us what it says between

those lines, steve >> my takeaway is that minutes of the january meeting, andrew, put markets on notice that for the moment there is only one species of fed official, i call it the greater or the lesser hawk the result is the debate is only about how much higher the fed goes and how quickly it gets there. the minutes said all were saying that more rate hikes were appropriate. most refer to 25 basis point hikes so they can feel their way to that higher rate. a few prefer a 50 basis point hike, more than the two we know of inflation risks to the upside. economic risks to the downside still, the fed wanted to hike more more importantly, there seems to be few if any arguing about the lag effects of the fed's aggressive rate hikes or concern about overtightening the staff saying a recession is possible the meeting took place before the blockbuster january jobs and retail sales reports and higher

than expected reports. barclays writing this morning based on the latest data and upside risk becoming more pronounced, we expect more fomc participants to revise their 2023 dot from 5.1% to 5.4% it would take only two or three to get that on the path

afterwards in terms of higher for longer and how much longer i think you're right, there is a pivot on the horizon, but the horizon goes off quite a ways, melissa. the notion of a pivot is seeming further and further on the

horizon than it had before i'll give you some data right now. the chance of a 25 or sorry 50 at the march meeting is now 21%. it is still pretty low, but it had been even lower than that. the may meeting probability of a quarter point is 75% the way the market right now, melissa, has expressed this sort of new idea of hawkishness because of the data has been to put a greater probability on a june rate hike or june quarter that's now at 57%, with 16% saying it could be a 50 in june. so that is what has happened right now. and, again, that whole idea of big cuts at the end of the year or this year, those are sort of gone there is like a 20 basis point tweak now in the year end rate where there are big cuts and i want to talk about this some other time is there is big cuts that are built in for next year. we can talk about that, almost -- i'll give you that number right now, very quickly,

for the year end '24, 160 basis points of cuts built in. >> wow i would love to hear what fed officials think about that steve, thank you steve liesman. >> sure. coming up, a "squawk" exclusive, the ceo of airbus will join us on set with an update on the aviation industry from supply chain challenges to rising production levels next half hour congressman josh gottheimer gives us an update on the debt ceiling talks. and are the charts showing bearish signs on the market? katie stockton joins us. "squawk box" will be right back.

shares of alibaba moving higher the company just out with quarterly results. revenue of $35.92 billion. the ceo said the company was able to navigate softer demand and supply chain issues due to covid-19 measures and expects continued recovery and consumer sentiment and economic activity. phil lebeau joins with us a special guest. phil, the airbus/boeing saga, i like them both would you call it -- >> i think that's wise to like them both. >> would you call it -- it is a duopoly -- if i fly on a jet, i hope it is an airbus or a boeing. >> odds are it will be

that's true. guillaume faury, the ceo of airbus, joining us here. we're glad to have you here on the set. and when i first said to these guys, look, guillaume is going to be in new york, we would love to talk with him and he would love to come on "squawk box," one of the main questions and these guys know we talk about it all the time is the state of the supply chain and you and i were talking up front, are you a little more optimistic >> it is difficult the global supply chains are in a very difficult place 2022 has been really bad from that perspective we wanted to buy roughly 20% from '21 to '22 a number of planes we managed 8%, quite disappointing and will take us two years to do what we planned to do in 2022. it is getting slightly better, but very slowly. we anticipate to continue to operate in 2023 in very difficult supply chain

environments, but basically we hope it is going to be better by end of this year and we can accelerate '24 and '25. >> what is the main problem? is it labor? or is it the fact that when you go down to these tier two and tier three suppliers, they have lost so much institutional knowledge and it is hard for them to ramp back up to where they were? >> the main problem is that it is not just one problem. there are several problems one is the microkchips, they go everywhere in the planes, and as well as the lack of workforce in many countries where we have educated people with a lot of skills, they left the companies during covid-19. it is hard to find the resources to train them. we have a lot of suppliers that have difficulties. plus the energy crisis, plus the situation of the logistics around the world

it is a compound of different crisis that at the end makes it very slow to recover. >> is your situation different to any degree compared to boeing >> i don't think so. i think that's the supply chain and -- >> i didn't know if there were certain suppliers you rely on that they don't rely on that they have access to that you don't have access to. >> overall, the supply chain environment is more for all manufacturers. >> boeing's sort of recent issues in the last five years, i don't know how far back -- when did calhoun take over? >> yeah, last four to five years. >> so it is well documented what's happened. in terms of market share, what have -- have you picked up market share in taking advantage of some of the issues that boeing had what are the actual numbers? >> yes, actually we have gained market shares because of the difficulties of boeing and also because of our own input. the situation today is quite unique the market share is mainly

determined by our ability to produce and deliver because we have a very strong background. we have already signed contracts with customers for the next ten years, and therefore it is in our hands, our market share is depending on how many planes we deliver in a year. that's why it is so important. we gained market share in bookings, new contracts, over the last four to five years, but i think that's mainly thanks to our products we have very strong products. >> i'm wondering, the age old argument about a level playing field, vis-a-vis government, health and subsidies, we heard it is not a fair fight because airbus has so much help. i'm wondering whether boeing, would you say, it is now comparable to the subsidies that the united states gives it to boeing at this point now it is even, i guess. >> airbus, we really consider it is unbalanced to the benefit of boeing, and there has been a fight to remember in front of the wto. we are the cease-fire at the

moment and all eyes are now on china where the growth -- the development is -- >> i wonder if we'll hear this after the i.r.a. too, not airplanes necessarily, but with everything in terms of that we're having the government sort of giving our private sector an unfair advantage would you say that >> very strong support for the industry it creates an unbalanced situation with europe. that's a fact. what we like in the i.r.a. is the fed supports the investment in decarbonized energy and this will help a lot the energy transition we were discussing before it is a very -- >> you heard what guillaume said, when we get off, we need fossil fuels the late '50s, not talking about 1950, late '50s. we like this lifestyle we have it is a global economy it is impossible without boeing airplanes. and airbus airplanes.

>> can si ask you about growth you mentioned china and part of the big deal you announced with the orders came from india in terms of your growth, is it coming from the emerging markets where the air transport network is being expanded as people are getting more rich and in china, do you have an advantage over boeing >> we believe we have an advantage across the world with the pilots >> specifically because boeing is an american company. >> i understand your point there has been a couple of events in the recent years one has been the situation with 737 max. that has an impact as well in china, you remember china was the first country to band the flights of the max right after the second crush and it has been difficult for boeing to recover. the tensions, the very strong tensions, geopolitical tensions between china and the u.s. is also a factor that plays out it is too early to say how china will move forward with the

skies. we see there will be need for more planes and i think the jury is out on how the chinese alliance will decide to balance between airbus and boeing. we have to see we at airbus are doing our very best to serve the chinese customers and i guess boeing will be trying to do the same. so the competition is on, including in china. >> i have a slightly different question goes to this sort of policy, fossil fuel question, we had mike pence here, former vice president sitting here yesterday. we were talking about the backlash against esg broadly here in the united states. so much of the esg movement, i think, came in part from europe, actually where you saw some of the pension funds make proactive decisions around the kinds of investments they wanted to make. and maybe that is skewed what happened here i'm curious whether that backlash that happened in the united states ultimately happens in europe, given the conversation you're having around the need for fossil fuels as you said through 2050. >> late '50s.

>> so, i don't think we see the same in europe it is not to the same extent we are very much under the impact of what happened with russia, ukraine, and the need to manage the energy crisis so the short-term priority was to find enough gas and electricity to deal with that situation over the winter, which i think has been managed there is still strong sentiment of the need to support esg trends, especially in the sense of sustainability. we are absolutely convinced aviation needs to transition from fossil fuels to decarbonized with the flying it is going to be long, but we have to invest and it is an investment not only for aviation, also for -- >> what do you make of the political backlash in the u.s. then >> it is a long transition, a difficult one. there are a lot of contradictions in managing that transition we would like to be faster, but we have to face the situation that we are very relying on fossil fuels for long, and you have those tensions that are,

you know, just inside the society. so that's a transition that is expensive, but i believe it is a necessity. >> let's talk about the facility in alabama i was there when you broke ground in the last decade, maybe a decade ago and i remember at the time somebody said well, this is nice, they're just putting a facility here so that when they bid on military contracts, they can say we have a presence in the u.s. you're now adding another final assembly line for the a-321 down there. this is no longer just a little nice little facility it is a full-on manufacturing plant that is growing because you have so much demand and you've got to meet that demand, correct? >> that's correct. mobile, alabama, has become one of the largest manufacturing sites in the world for commercial airplanes we have an assembly line that has just been converted to the a-321, the most successful model we have and we are adding a new

one and would we be successful on the tanker with our partner and i hope that's going to be a tender for this, we would add an assembly line in mobile. it is growing. it is not only big it is very successful. and has a lot of pride for us to have this facility and all its workforce in mobile. and very well supported by everyone so it is a great success. >> all right joe? >> i've got -- when we go to break, i have some other questions. >> you want to get joe going tell him what you told me about one pilot planes they're coming >> one-pilot planes are coming why? that scares me why? why? >> i light the wick and run out of the room. >> you know, that's like the small jets that don't have bathrooms. i need two pilots and a bathroom. >> it makes sense. listen to what he has to say

it makes sense. >> today in flight when you have two pilots there is one pilot that goes out of the cockpit the idea of one pilot -- >> if he has an heart attack and they ask you to land the plane. >> how often does that happen? >> it only has to happen once. >> what we see coming is one pilot in flight, one pilot in cruise for longer period of time >> one pilot in flight -- >> in cruise. >> you have two for takeoff and landing, and -- >> and long extended periods with only one pilot in the cockpit will be enough >> two in the plane. >> two on the plane. >> two on board, okay. it's a little different. >> it is like when they say over the loudspeaker, is there a doctor on board? you need a doctor on board is there a second pilot on board? >> this will help the airlines in terms of staffing they won't have to have as much. >> it means automation will help

get more safety and also help have less pilots in cruise on the plane. >> gave him a heart attack >> how you controlling the plane from the ground? >> we'll get that answer during the commercial break. >> let's call it a drone. >> more "squawk box" coming up time now for today's aflac trivia question. which american technology giant started in 1911 when a new york businessman founded it as a holding company for people who made record-keeping systems? the answer when cnbc's "squawk box" continues ga-a-a-ap! oh... hi. what'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. aflac, huh? aflac! ga-a-a-ap! aflac! gap... uh-oh! that duck can motor! get help with expenses

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welcome back to "squawk box. the futures right now, as you can see, up 109 points on the dow. nasdaq strong, compared to recent sessions anyway, up 124 time to read the charts. joining us is katie stockton, founder and managing partner at fairlead strategies and cnbc contributor. katie, last time you were -- every time you're on, we're in a -- in kind of a different environment. last time you were a little bit surprised at maybe some of the strength we saw in what you still think is a reflex rally. but you said it is probably -- it is showing signs of petering out and maybe we started to see that a little bit last week and more so after what we saw earlier this week. so we're back in a downtrend now with support where on the s&p?

>> the support still is around that 3900 level in my work and that is based in our cloud model. it does rise over time it is also a minor level i think it is at risk of being broken maybe not in the next few days, but ultimately put next supporter in that 3500 level, that was tested back in october. so i do think that risk is still heightened here. we did certainly see some improvement in january, but now we have given up more than half of january's gains already and that abrupt reversal shows a shift in market sentiment that i think is going to be pretty difficult for the market to weather here in the near term. we have a lot of signs of short-term upset exhaustion. immediate term momentum is deteriorating, i wouldn't call it negative yet. that's something we're watching for. if that does happen that would suggest 3500 is pretty realistic as the downside objective nor retracement. we're watching for the s&p 500 resistance around 4230,

thereabouts on the upside. if you think about the spread between the resistance of the support, it doesn't lend a great risk/reward, whether you believe the market to have undergone a bullish reversal or not. >> i think i asked you last time whether there were any positive underpinnings to the january move that went higher. and i -- you said there were some positive things, but really not enough to signal anything lasting. now, this week or in the last two weeks, have even those positives dissipated and we're just back to where we maybe, are we like the road runner -- no, coyote that ends up where he looks down and there is nothing beneath him. is that where we are >> for some stocks, yeah, for sure if you look at a chart of google or alphabet, or even microsoft, with the retracement, their breakouts are being called into question essentially by this speedy pullback we have seen what you want to see with any

breakout, which we definitely saw some in january is not only immediate upside follow through, but sustained upside follow through. and you don't want to see the stocks quickly go back below their breakout point, or quickly go back and fill their earnings driven gaps higher and meta is in store to do that in the near term as the gaps are filled, we see that as a setback and we're seeing downturns from overbought territory. it is not the overbought condition that concerns us, it is when you see the downturns because that means it is affecting momentum and that suggests a pullback could be deeper than we all hoped. >> do you put a percentage probability on getting back the 3500 would you say it's 60% that we get back and test the lows and what do you think about going underneath that? is 3200 in the cards, some fundamental analysts that are well respected, that talk about

3200 not for sure, but it is a possibility. >> it is having that they're talking about that level because it is a very important technical support level as well. and when those things align, i think it adds to their importance the 3500 level i think is still above sort of a 50% probability here, but with the january price action, i think 3200 is made less likely than that. when you see a bottoming process, you often see what we call retest of support so this 3500 indeed has proven to be an important low or area from october and the retest is often undercut but only briefly and that becomes the source of possible divergences and the stuff of a real bottoming process. we know that after bear market cycles, the market doesn't tend to come out of it very quickly the b-bottoms are more of corrective phases. we have been talking about the vix or volatility index quite a

bit and we recommended to our clients to be hedged when the vix climbed back above its 50-day moving average. past instances of that during this bear market psychocycle hae given way to pullbacks in the s&p 500 which is inversely correlated of a few weeks. so we're in that mode right now. we want to be hedged we want to wait to add exposure and anticipation of the long-term turn around. >> just real quickly, we're out of time, has crypto or bitcoin on a relative basis held up better than other risk assets? is that all sort of the same down below 24,000. >> you know, we compare bitcoin to the alt coins for sense of risk on/risk off in that space it has been interesting. even they rallied and now come into resistance, the risk off positioning is still somewhat prevalent in that space. they have been underperforming we have a sell signal in ether near some resistance we don't think that bitcoin or others are out of the woods yet

either they have certainly established trading ranges and within that context they could certainly be building a base from which to advance the level we're watching for bitcoin is above 25,000 and decisive breakout above that level, that would be longer term positive. >> oh, my god, that is the most bullish thing you've said in the last year. i think about anything >> there you have it >> might be in the process of building a base and having a trading range where at some point it might be able to mount some kind of advance that's amazing >> wait for it, though >> 17 to 25, what did you buy that went from 17 to 25 in the last two months? >> thank you, katie. >> of course good to see you. >> 4%. >> beenie babies >> not your 4% two-year note once we go through the debt ceiling. that's not even -- >> my usb stick under my mattress

coming up, as the american consumer really held, jon fortt goes behind the numbers to test the strength and spending in today's on the otheran hd. we got more "squawk" after this. e in life - a “why.” maybe it's perfecting that special place that you want to keep in the family... ...or passing down the family business... ...or giving back to the places that inspire you. no matter your purpose, at pnc private bank, we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why? ♪♪

[music - cover of blondie's “dreaming”] just tell us - what's your why? [music playing] ♪ imagine something of your very own. ♪ ♪ something you can have and hold. ♪ ♪ i'd build a road in gold just to have some dreaming, ♪ ♪ dreaming is free. ♪ accenture, let there be change. it has been a big earnings week, given stronger than expected holiday numbers is the consumer showing signs of strength jon fortt is here to weigh in. >> melissa, yes. the consumer is holding up pretty well. take walmart's report.

comparable store sales were up 8% it wasn't just inflation the raw number of transactions was up too, 1.8% in the u.s. the ceo said the consumer is choiceful, discerning, thoughtful, but still spending money. and it is not just walmart the johnson red book index of 9,000 large retailers out yesterday rose 5.3%. better than the 4.9% expected. i know inflation has been stubborn, plus stocks took a dive on tuesday. that's got everyone feeling understandably skittish. but we have to take good news when it comes. like yesterday, tjx, parent company of tjmaxx reported a solid quarter as consumers went hunting for bargains etsy was up after hours on better than expected sales and profits. if the consumer has money to spend on etsy, the consumer is doing okay. >> there is the home depot, jon. if you read the home depot report, you think the consumer is not doing as well. >> yeah, well, yeah. on the other hand, the data in

this week's report shows a weakening consumer in home depot is a prime example home improvement project demand is weakening with do it yourself shopping softer than the business from contractors. that matters because contractors have a waiting list of business they have been working through, it will take longer for a showdown to show there let's talk about walmart a huge reason walmart did well is it monster business in affordable groceries, people need with the stubborn inflation. over at tjx, similar story the company said it is doing so well because there has been bloated inventory of high quality brands which is pulling in customers who and this is my commentary need to pitch pennies after spending so much on groceries. so you know what's not doing well at tjx? the home goods business. probably because with higher interest rates, weaker consumers can't afford to move >> so, some strength might be the inferior goods effect. looking for cheaper -- downgrading. >> that's what we worry about. a tough economy, people buy more

of what's affordable, we have seen that with walmart in the past are we seeing that across multiple categorys >> good. thanks, jon. >> we're open for business at the nasdaq jon's been coming back everybody's been here. it's really good. >> like 15 people at the table about 20 minutes ago. >> we did. >> it is like thanksgiving dinner >> exactly coming up, one of the reasons -- not really arguing -- >> a lot of crazy turkeys. >> excuse me >> coming up, i like when the turkey explodes, when she cuts it too long. >> coming up -- >> coming up, one of the reasons consumers may have more money to spend. tax cuts find out if your state is providing any tax relief and and we go to the front lines of the debt ceiling with a debate with new jersey congressman josh

gott goheer tre a bipartisan solution on the horizon that's next.

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more hey, robert. >> yeah, that's just because you live in the wrong state, because in most of the country it has been tax cut fever in state capitals 43 states have provided tax relief over the past two years that has put tens of billions of dollars of extra spending money in the pockets of consumers. now the question is what happens when many of those tax checks start to run out of those 43 states, 21 have actually cut their income tax rates. iowa one of the biggest cutting its rate from 8.5 to a flat tax of 3.9%. georgia, top rate of 5.75% to 5.99% flat tax a dozen states are considering tax cuts this year connecticut governor ned lamont pushing the state's biggest tax cut ever, $600 million package that would cut rates for those making less than $100,000 a year by up to a full percentage point. mississippi and arkansas considering plans to eliminate

their income tax altogether. but most of these state tax benefits were kind of one offs rebate checks or gas tax holidays, even grocery tax holidays and with the economy slowing, those are not likely to be repeated this year that leaves less for consumer spending. sent out checks for or $1,000 last year they are nowprojecting a budge deficit of over $30 billion. joe? >> robert frank, all right >> we're going to continue this conversation now our next guest has a front row seat, courtside, for the high-stakes talks in d.c josh got haimer, cochair of the problem solvers caucus, and the solve caucus you're like on the court, congressman. what's really going to happen here the honest truth

>> on the debt ceiling or are we going to -- i'll discuss whatever you said. >> we can talk about -- i was going to start with the debt ceiling, but we can talk about whether you think s.a.l.t. is even realistic you've been talking about it, what, how many years now six years? five years >> listen, we passed it three times out of the house i've got to get the guys in the senate to actually come through here >> what do you think are the chances? what do you have to do >> in 2 1/2 years, it all comes back, a full deduction back here in jersey and across the country. the republicans obviously, and some in the red states will want to stop that so it puts us in a great opportunity right now to negotiate to get it back now, or we wait 2 1/2 years to get it back fully we've started to have conversations, you know. >> what about the inevitability that it comes back --

>> in some form or fashion obviously i want it all to come back i want lower taxes in jersey i'm sick and tired -- you were talking about all these other states giving tax cuts it's time that jersey restore s.a.l.t. and other blue states i think in my opinion we'll have real conversations about how to get it back. we can can we get it out of house under republican rule here either way we get it back in form or fashion. >> that's an interesting -- the leverage point, the question is, you just let it run out, are you better off just staying plumb? >> josh, what are the chances -- i mean, the trump tax cuts will not be extended, right i wouldn't think so. then in 2 1/2 year, you get what you want >> think about how many new republicans are from s.a.l.t. states, several from new york.

they're certainly not going to agree to gut s.a.l.t so in new york and new jersey, where we have a new republican member, so i think we have a great opportunity either it come back whole, or we negotiate right now how much we can get back to get it back now. that is the discussion i think we're in the driver's seat and we'll see what happens. >> if -- the deficit is a real problem. the debt we have run up is a real problem it's going to be tough to cover what this provides how are we going to make up for not getting the -- go ahead. >> s.a.l.t. is double taxation, right? i don't even think that should be part of that conversation, but listen, we're having a very important broader discussion as part of the debt ceiling conversation about our long-term fiscal health. i think that's a good

conversation to have i don't believe we should ever do anything to put at risk the full faith and credit of the united states. >> josh, would you tell all your colleagues in congress, in your caucus -- i can't believe you just said double taxation. >> yeah, people are going to see this tape, congressman i like some, but not -- >> what about wealth tax that's bandied about constantly now. >> that's not something i think will see the light of day. >> you take it off the table, but for the same reason, double taxation >> no, i believe right now, as part of the debt ceiling conversation, the only discussion we should be having in my opinion, of course, is raising the debt ceiling and paying our bills i think it's totally fair, and we're having discussions now in the problem solvers caucus, a bipartisan group of us are talking about what that could look like, what that agreement could look like. obviously republicans control

the house. i understand we have to have this discussion despite the fact, of course, that they raised the debt ceiling three times under president trump, but the bottom line is we're having the discussion i think what we have to take off the table right now, and i hope you agree, any kind of idea of defaulting on the debt and not paying our bills i think it's absolutely crazy we're having this discussion about that there are members who believe that's a good thing for the country to actually default, right? >> we had former vice president mike pence on the show yesterday, talking about entitlements, entitlement reform, whether you think social security and med camp need to be reformed, which effectively means cut. where do you stand on that ultimately >> that's been pretty clear the speaker that we have taken it off the table, that's in the unreasonable bucket in this discussion i think there's other conversations we should have, other options that we should have as part of a reasonable

conversation, but the things they're throwing out there on the nondiscretionary front and discretionary front are ridiculous i mean, like killing medicaid, going after school lunch ideas of this 30% national sales tax, which is crazy. >> what are you going to do about the debt then? >> that's exactly why we're having a negotiation and discussion. >> i know, but what is your vision of what the debt is supposed to look like? >> as i've said before, it's very difficult in any negotiation to negotiate in public i will certainly come back here as soon as we figure it out. >> okay. congressman, it is a longer conversation details are important. we hope you bring them to us when you have them thank you, sir. >> i'll tell you this, off the table is defaulting. that's off the table messing around is, you know, with our fill faith and credit is off the table >> no, i get that.

i think it's very hard when you ask the question, what is your vision, and most people -- they don't have a vision or they don't want to say, because guess what the vision is painful, i think. >> the bipartisan discussion, and then we'll be back a.i. chips giving the company a boost. how it's changing big tech and which companies are ready for the battle and the inflation risks. richard fisher and what the central bank ises eing right now. "squawk box" will be back in just a moment.

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the dow is heading for its fourth consecutive negative week for the first time since last may. alibaba shares are popping this morning. we'll break down the new results from the chinese e-commerce giant. what does higher longer mean from the fed, following the release of the minutes richard fisher is here the final hour of "squawk box"

begins right now ♪ good morning welcome to "squawk box" here on cnbc, live from the nasdaq marketsite on times squarp i'm joe kernen becky is off today showing some triple-digit gains after a couple tough sessions. a lot going on, a loss of different stories happening, melissa. >> here's some of the stories we'll be talking about. >> bed bath & beyond shares following after the release of fourth quarter results they did beat analyst estimates

for the quarter the numbers come after dabn loeb still has concerns the s.e.c. is coming out against a billion dollar deal of binance. in one filing the s.e.c. says the proposed transaction could violate laws on the unregistered offer and sale of securities new york's top financial regulators are also closing the deal. china's president is preparing to overhaul the leadership of the country's financial system he's looking to bring back a political body to exercise more control over financial affairs appointments are expected to be formalized early next month. over to frank holland who has a look at some of the biggest morning movers what's going on?

>> apple moving higher this morning after ubs maintained its buy call on the possibility of a flexible display screen. shares are up more than half a percent. out with a note for retail traders. alibaba surging, and e.p.s. estimates bead those by more than 18%, shares are up almost 6% the company says it is seeing a spending in -- and only 3% growth, a major slowdown from previous quarters, also announced the new $15 billion buyback plan last but not least, invideo moves higher, now up 10% after top and bottom line beats.

they beat estimates, the ceo also bullish will the -- saying the versatility has triggered a sends of urgency around the world to develop and deploy a.i. strategies one down side, chip revenue for gaming, fell 46% we also want to see a quick check of -- of course nvidia up 10%. amd up, same stair for micron. joe, back over to you. >> thank you, frank. the minutes from the federal reserve's latest meeting showing bangers' resolve to continue to fight inflation. let's bring in former dallas fed president richard fisher he serves on the boards of tenet health care and warner bros. discovery. thank you for joining us. >> good to see you. >> i did feel a sense of deja vu whether i heard higher for

longer i think that's been the mantra -- i think i remember the powell speech when it wasn't -- i won't use the word pivot, but it wasn't really a change, but this is something they said they would go down from 50 to 75, yeah, we'll go in smaller increments, but we may eventually go higher and longer. we should haveland. >> as i told you, but there we have it. yeah >> we're living, depending on your time frame, we're living in a 4% to 5% rolled and possibly a 5% to 6% world, depending on the maturity of the rate so get used to it. it just meaning things haven't, in my view, properly adjusted for that there was all this hope they would start cutting rates this

year i don't think it's going to happen, obviously, and that they might not, and they may not go higher, but they're doing all three. they're going higher they're holding, and i doubt we'll see much reduction until they're absolutely sure they have inflation back in the jar at 2%. so get used to it. >> where is the rub? what's really causing it what did you make of that jobs number it's not likely to repeat. it could be revised. >> it always could be revised at this point you can't rely on the releases you just have to wade. i did find you're interview yesterday with the ceo of zip recruiter was interesting. hiring is slowing down if you look at the federation of

independent businesses reports, they're being ham strung here, but they still are being pressed on the size of total comp increases. so i think that's where it's coming from. we had a wage/price spiral they're trying to cure it. the big thing is, though, even though the savings rate has come down, these workers are still consuming. the numbers were still very up in january that is good for the economy c is consumption at 70% plus in the equation i, investment, net exports and right now c is still running pretty strong. the interviewer with ziprecruiter, that pain is being

felt on main straight. i wonder what you think about the higher for longer part in terms of the peak of the terminal raise in terms testify the longer, what is your perception of longer the markets are pricing -- steve liesman just sent me this data this morning of down 92 from the peak by july 2024, so almost a full percentage point lower from the peak reached by summer of next year. does that make sense to you? >> well, steve always makes sense to me. >> the data is the data, but do you think the markets are pricing that incorrectly >> we've talked about this on your own show. markets are never correct. it's an immediate reading. in terms of going out that far, that will change over time, just

as the markets were pricing in for a while a stoppage in 2023, a cut in 2023, the fed funds futures market is not very accurate part of this is because -- i want to repeat this over and over and over again. we are adjusting to a new world. we have a whole generation if you're under 45, you've never seen anything but free money until recently that changes the way you look at things you have to look at this as a market for stocks. we just saw it with nvidia that's a great little performer. the overall market, however, still in my view is priced to a different scenario from what i think is -- which is a higher rate, a couple more quarter-point increases, and then hold until you are absolutely sure you have inflation under control and you're willing to tolerate some unemployment rising if that's

the case, but still we're fully employed that good for the economy and it's good for workers, but it also creates pressure. >> maybe we should go 50, then now it's the old, got an infection, why do 25 milligrams of pin sillen eight times. why not do a stronger dose do you think we go to six? >> i happen to be allergic to penicillin, so terrible analogy, but what they're doing, they did it, with the big moves, now they're refining and titrating their rate increases i don't think it's out of the realm. i think it's extremely doubtful, but i think you're adjusting more closely the tightening of this we also have a runoff of the cap of $60 billion not treasuries, so, you know, i think you take your time here

this is a group of wise people >> and you would still be data dependent. things happen gradually until they happen all at once. you can't key sorb good you listen to barry sternlik, six months ago i thought the world was ending sooner or later it will slow, and you will see a bite, don't you think? >> yeah, eventually. that's the nature of the business cycle we'll see if the fed can encourage its normal course or overdo it or prevent it. but not even god can conquer the business cycle it's stretched out with modern technology, but it's still there, joe. >> it's not the "titanic" i don't think you should say that. >> i will take the titanic if you take the penicillin. >> what does the richard fisher

portfolio look like in a world -- >> good question, because it's fisher investments temples that was a great question, melissa. >> it's a great question, but barclays will not allow me to speak about my own money i'm 74 years old, melissa, and therefore i'm pretty risk averse i'm finding other people my age that have substantial more means than i have, very attracted still to the one-year and the six-month. waiting to see how things clear out. i don't think that's the best strategy, but again, i'm not allowed to talk about me i'm sorry. no crypto. >> or hold crypto for a year what's the problem don't do either, do bitcoin. [ laughter ] >> you know, the good thing about trading as a central banker is you learn how to not

answer questions i apologize. >> we have a lot of guests that weren't central bankers that know how to do that, too thank you. >> thanks. "wall street journal" reporting that netflix has reduced the cost of its service in more than three dozens countries. the cuts apply to certain tier of service including the middle east, subsaharan, eastern europe and latin american in some cases, the price cut is 50% off. >> i've found that mine has gone up on netflix, i'm sorry to say. yeah, it's. coming up, breaking economic data, a new look at gdp, but next, that a potential higher from longer stance means for the energy sector. we're going to speak with a top trader after the break stay tuned, you're watching "squawk box" and this is cnbc.

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meantime, take a check on treasury, watching the ten-year yield. the 2-year note at 4.0. talk about crude oil it's a bit higher this morning, but currently on a six-day losing streak. that is the longest since early december wti down more than 3% yesterday. a rate hike talk from the fed may be raising the potential for slowing economic growth, thus lower energy prices. morgan stanley boost zed the estimate foroil demand growth. we have the senior engineering trading for cibc private wealth. what do you think? what do you think? >> so, i think, six-month outlook. >> i think in six months we're higher i think estimates for crude breaking above 100 in six months are overzealous. we're probably 90, 95 wti, 95,

100 in brent everything that you've probably talked about and mentioned ad nauseam is underpinned by the china reopen that's going to be a huge swing factor for demand. estimates are an increase, and that backend loaded. we're in this point where the macro themes are driving the commodity. we have higher rates, higher dollar we don't have a lot of fundamental catalyst pushing crude higher, so we're being battered around as the winds shift back and forth if you were right, the mark would be will already, right >> so that's a fair point.

i think the reason the market is not pricing that out further on the curve is there's definitely been a lot of hype around this trade. we've been talking about this now for six months it is a fair point this is a bit stale. this is -- we're waiting for this rose to bloom, so to speak. every time it starts to, we kind of get hit with another macro headwind there's hesitancy to buy into that trade when you struck out a number of times before playing a brit more cautious it's an "i'll believe it when i see it" market so i think that's a fair point, but i think if you think about the numbers and you see how china is recovering and the data is really positive coming out of china, and how the u.s. recovered coming out of covid, the demand numbers are extremely realistic. >> what is your outlook, rebecca

for the prices of refined products, and everyone wants to know what's going to happen with gas prices with the russia sanctioning going into effect. could we bet in at situation where we're revisiting high prices in gas? >> that's a good question. refined products are in a similar situation we saw last summer inventories do remain below five-year seasonal averages. we could get into a situation with summer with the russian products not finding their way to the market as we've seen. we've been very lucky thus far that -- if that starts to hiccup, we had see gasoline prices tick back up closer to $4.50. i don't think we have reached $5, but i think we're setting up for increases over the summer. not as dire at last summer, bud still some up side >> when you think about this

move higher, and you sit around your office talking about what could be right or wrong with your prognosis,what is the thing that you worried about that wouldn't get it there >> great question. i think the thing that doesn't get us there is the china recovery doesn't play out as we think. it's not a consumption-driven recovery, travel doesn't explode higher, people aren't moving around china as much as we anticipate that's the number one thing that will derail this the second thing is a deeper recession in the u.s right now most models have u.s. consumption falling, but very minimally. if that shifts and we get a much harsher recession, something closer to 600,000 barrels demand, that could absolutely create further down side, but i would say this -- you have two things supporting you on the down side here that doesn't mean macro environments can't push you well

below 70 into the 60s. opec plus is standing by and ready to act in that environment. you do have the spr refill i know they have announced sales on the next quarter, but they still need to refill the spr that's another supportive pillar in the environment if demand did soften that's why i have the confidence that the risk/reward is to the up side. >> rebecca, we want to thank you. we appreciate it. >> thank you very much. coming up, we're going to dig into the section 230 cases, the two of them that the supreme court heard this week, and what it could mean for the future of the internet and another reminder, don't miss an exclusive interview with loretta mester she's been in the news recently, remember about the 50 base-point idea stay tuned we'll be right back. rivate bank

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♪ welcome back to "squawk box. the big earnings mover of the morning, alibaba the chinese e-commerce giants has scoring a big beat it beat profit estimates by more than 18% andrew >> now to a cnbc scoop

google asking cloud employees and partners to share their -- is this a scoop of sort? to share their desks we share our desks they might even have to go alternative days citing real state efficiency, a new model apply to say google cloud's five largest u.s. locations, including kirkland, seattle, new york city, san francisco and sunnyvale. it's hopping to the company -- there would be overflow drop-in space for employees who want to work in office on unassigned days coming up, breaking jobs and gdp cause, revised fourth quarter vote, all micong up next we'll bring them to you.

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welcome back to "squawk box" on cnbc, we are just seconds away from a revised look at

fourth quarter gdp taking a check on futures ahead of that data release, we've been holding steady all morning h. means the s&p would be looking to defend the 4,000 mark the nasdaq at 129 right now. the ten-year and two-year pretty stable right now rick, the numbers, please. >> yes, we are looking for our second time around the block on fourth quarter gdp and initial continuing claims. 192,000, good news if you're looking for a better economy not so good news if you're looking for what the fed does to a better economy, on the continuing claims, 1,654,000 both of these are less than expectations, both of these are sequentially less than last week, at least until any revisions come north second look at fourth quarter gdp, downgraded from 2.9% down

to 2.7%. the moneyball numbers, on the pricing index, 3.9%. this is hotter than our last like at 3.5% i'm sure that popped interest rates and dropped stocks, but do keep in mind this price index was created in 1947. it hit 9% in q2 of last year q2 of last year was 9% now we sit at 3.9. by my math that's less than half if we look at the personal consumption expenditure, quarter over quarter on the core, it is 4.3. 4.3. also, just like the index, higher than expectations, higher than our last look, but well below the 6% high watermark from q2 of '21. this series started in 1959.

on the price index, that was 9 highest since '82. on the core, that was the highest since '83. those are your numbers interest rates have definitely popped the stock market didn't drop as much once again, whether we're looking at this from the european side, expectations are important, but the nothing of where we are relative to actual numbers in the past counts, too. it will be a tug of war for the markets between those two issues today. melissa lee, back to you s&p 500 about seven, and we friend -- steve liesman joins us with more on the data. steve? >> i'm trying to figure this out. one thing i did notice is a massive upward revision to income

1.5% edge. gross domestic purchase price index was a little hotter, as rick said. also on the i think the consumer was also down a bit. jobless claims, though, a real puzzle it's been under 200,000 for many, many weeks now, i think like six weeks you're not saying any weakness, even though we hear things from like zip recruiter one other thing. you have that inventory chart, it's been very, very difficult to gauge this economy. you guys did that great interview with the guy from the port of los angeles. it's so important to follow what is happening there look at that volatility sometimes it adds 5%, sometimes it takes away 5% in this quarter, updated number is taking away -- let's see --

it looks like it's adding 1 1/2 percentage points or something along those lines, melissa whatever you think, it's probably not that hot of an economy because of the volatility we've had right now, what's going on with the inventory. >> how do you think the fed looks at this, steve >> i think they still see an economy -- their benchmark is like one-eighth for potentially growth they see that and we're running a percentage point above it, which means we're running too hot. i think the downward revision in consumption will be interesting because we had the strong retail sales report, so we'll see there's a bunch more data coming in march that will be what's critical for the fed to figure out what they're going to do then. >> rick, what is your takeaway here for the fed >> my takeaway is we're making progress on inflation. we can argue about the speed, but we can also put up flags

against the speed in which case policy is having an effect i think that's very important tug of war to have with respect to mixing metaphors, there's a lot of data for the last part of last year, the fourth quarter, as we're discussing now versus what's going on in this quarter, and atlanta fed now, just they end of january, was under 1 per. now it's around 2.5%, but steve is right pay very close attention to some of these revisions, especially inventories. i think they'll little that number down and continue to err on that side, and with respect to the fed, i think higher for longer makes a lot of sense. i think some of the guidance they're given at this point in time makes very little sense. >> ten-year yield, approaching 4% rick and steve, thanks coming up, could the supreme court change the internet as we

know it? with an upcoming pair of decisions. before that, you can get the best and the rest of "squawk box. >> all the best, right >> that's what i mean. follow "squawk box" on your favorite podcast app and listen anytime we'll be right back.

on tuesday the supreme court heard arguments in a case

against google, having to do with section 1230 of the communications decency act, the legal shield that protects companies from liability from what the users post. yesterday, it was twitter's turn the court weighed whether twitter can be liable for aiding terrorism because of the content on the services. justices voiced a mix of uncertainty and skepticism joining us is lowe toney are you available to help explain? are they ready for this, do you think? are they in a position to make -- i know i couldn't probably make the right decision here do they need more background info, you think? >> i think that's what's really important, historically what we have seen is technology moving

faster, and we had this precedent set all the way back in 1996. it did help. it allowed for the proliferation of many of these technologies to take hold. now, i think what is most interesting is, had twitter, facebook, youtube, been around prior to this precedent being set, would it have looked different. what the challenge is today, to your point is we have people that maybe don't have the best grasp on technology. will we see something happen with unintended consequences moving forward that changes free speech or change the liability >> and the unintending consequences are they worse than the unintended consequences we're dealing with right now with 230 in place. >> that's right. >> do you think there will be more censorship? >> i do, but if you've already crossed the rubicon, in terms of

i'm going to let this go, but not going to let this go, i'm going to do this here, but not here, you're already making decisions that you're supposedly insulated against. if you're ready to delve, take responsibility for what you're putting up they are making decision of what the rest of us get to see. >> to your point, that's allowed the technology companies to take a step back and not prioritize the removal of some of these more hateful types of comments, then they remove somebody that might be innocuous to somebody else. >> i'm curious what you would prefer. >> more. >> more censorship >> no, no! more >> i'll decide i'm a big boy. i don't know whether they should

keep the law. >> if they keep the law, it's a market-based system. i had think you would like that, but if you change the law, it clamps down on everybody. >> they're already doing it, though >> can i ask you, lo, as we're talking about this, how does it apply eventually do you think to a.i. i feel like that's coming up will it eventually apply to what chatgpt spits out? >> i think eventually it will. we're yoopg a new medium i think what's most interesting is this notion around i am a technology company and i have insulation from the liability, because i'm not considered a publisher. it will be interesting to see, if now we have the artificial intelligence available to kind of process and restate some of

this information, does that cross the line for these tech companies from, hey, this is just user-based to now a pu publisher. >> joe, i think you would be on the side of leave everything as-is, and let the market do what it's doing. you may not like it, but that's a lot better than if you say there's liability. the second there's liability, which by the way, is manage you would think i would like, there would be a claump-down. the strange bedfellows in this -- >> that's why it's all the way up in front of the supreme court. i am bothered by -- what if all the people with the great censorship at twitter, what if they got hired to do the a.i. chat bot

>> i'm not sure about that. i can say we're at the forefront of another major shift in technology you know, we had the internet, mobile, then a.i every 15 years. >> are we at 1%? is this where we are on a.i., and it's going to be here? >> i think so. a.i. has been around for a few decades. what we're now seeing is the fascinate with consumers, right? we had chatgpt reach a million users in a day ultimately a.i. will play a role, i think, behind the scenes, right? just as software is leading the world, every company is becoming a software company, every company will also use a.i. >> do you think a.i. or chatgpt, if you believe that valuation on that company, do you think that technology is so unique to that

company or whatever google does -- and it's not built into the values of all these companies already, or that it becomes effectively a commodityized product that's ha feature set. >> i think the latter is correct, in the case for horizontal applications because of the availability openly of data today to be able to train these bots i do think there is some level of commoditization. >> but the openness of the data today, the question is whether that data will remain open to train on if you're cnbc.com o. "new york times," the "wall street journal," a music publisher or film scripts, all of this -- right now these things are boiling in the ocean, training on all the this information for free >> that's right. >> at what point does nbc universal, "new york times,"

music publishers say, you want to train a my thing? you're going to pay me to that, and then all of a sudden everybody is giving exclusives, right? you know, the bing version of it, you know, has access to these particular publications, these particular outlets, the google version has access to this, and actually everything becomes almost like a specialized a.i. whether that's good or bad even for the system >> i think from a business perspective, when we look at what's happening, that is the right point to focus in on i suspect what will happen is we will see some very interesting opportunities for companies to build a moat so that it's not a commodity based on the availability of the data i'm excited to look at companies that have access to private data we can think about those, i think more vertically than

horizontally think, for example, financial data, think about healthcare data -- there's other things that have been to addressed with privacy, but i think that's the key point. the access to private data, in our opinion is where multibillion opportunities will exist that can create a moat, because others won't have access to that the data itself to drive the algorithm. >> so you want these companies to have liability so absolutely nothing gets through the cracks. that's -- you're right, i want that >> i'm suggesting that that would be the outcome if liability exists -- >> that's what i mean, but you want you were happy with that. you said that you might argue that you'd like that but i can tell you that, in both parties, you can find people on totally opposite sides in each party, i think, which is weird you would think, you're right, most republicans, let it ride,

baby let it ride, but then there's others that tech is too big, they have too much power, they're too insulated. you can find the same argument on the other side for different reasons, which is like so many other things. >> all i'm saying is -- >> we need like italy -- [ laughter ] >> if you hold facebook, twitter, something liable for putting out a message that really does incite violence or murder, a school -- something horrific, right? and they would be liable for that, it's not just that they would block that they would block anything and everything that looks like that. i don't want that video out there, i don't, personally, but i also don't know what the implication of that is >> it's weird. i would land where you don't let al qaeda stay on and get rid of parents in schools, or something like that, that go to a school board meeting. you can imagine how i field

about that if you're going to enforce something, let's enforce it fairly >> it's going to be all or nothing. you can't really -- >> it's better here in person. i love the dynamic i do think that's the challenge, right? again, i go back to when this initial precedent set was in 1996, it wasn't even aol, it was america online this was pre-everything. had there been tighter controls, we could not have seen the prolive raise of facebook, youtube, twitter, they wouldn't have been possible because they would have been constantly shutting things down. >> if things change, in terms of development of a.i. -- >> that's exactly right. >> we are at a point where we can develop a.i. fully and compete with the rest of the world or shut it down and assign liability. >> that's right. the thing that will be most

impacted by regulation and this potential decision is really more on the consumer side. the enterprise side will likely continue, but it's the fascination we have right now, as general consumers, with what we see on chatgpt. >> lo, thanks. great to see you. >> great to see you. >> thanks. mail, remember? let's not go back to that. on the cd-rom. remember >> remember those screens? >> i mentioned the phrase, modem, to my child the other day. they had no idea what i was talking about. you remember a modem >> i see it on wordle a lot. >> we got to get down to philadelphia, home of the beloved eagles jim cramer is with us. i shouldn't have said that jim, how are you, sir? >> i put the eagles behind me. i'm thinking more about nvidia and the big turn because i think it's amazing >> you think it's a big turn what's happening here? >> well, look, i think that

what's happened, jensen huang has been working on this artificial intelligence accelerated computing for a long time, but we've never really figured where it could go and what the use case is, and then chatgpt changed everything, because people say, wait a second, i can see what i can do with this. i have got to be on this platform, and the only company that has the platform is nvidia. so, it's kind of the most -- it's almost a moe mnopoly on ths level of artificial intelligence, and you can basically contract with nvidia through google, through oracle, through azure, to be able to get these uses -- figure out what it can do maybe it can help you with call centers. maybe it can help you with writing, with ad copy, with anything right now where you need people and you can't find them >> i'm curious about your reaction to the fed, and we've been talking all morning about what you think the fed or may or may not do any new takes? hot takes? >> well, i'm fortunate enough to spend much of this morning with jamie dimon. i will defer to him.

we're going to a brand-new branch that's opened up in an underbanked area i know that he has been a little bit, i would say, gloomy about the prospects, and so therefore, it will be interesting, because i think that things are better, except for wages and food and housing. this branch might help us about the latter, housing, which is a real problem for the fed >> finally, and i don't know if you focused on this, because i know you're spending time with jamie, bath & bodyworks and mr. loeb >> i think you guys correctly -- who was the person who said -- was it you who said that you had a good moisturizer, andrew >> i do. i do can you tell >> but it just, to me, and i know you guys admit it, yeah, they sell soap i don't know to me, that's not that proprietary versus, say, what nvidia is doing with a.i >> i don't know what kind of moisturizer you're using, but looking good, jim. >> i was using something from the ritz carlton, which is

terrific >> say hi to jamie for us. >> of course >> we'll see you in just a couple minutes on "squawk on the street," and then we'll be okg r u hfte. thanks back after this. why are 93% of sleep number sleepers very satisfied with their bed? maybe it's because you can adjust your comfort and firmness on either side. your sleep number setting. to help relieve pressure points and keep you both comfortable all night. and now, save 50% on the sleep number 360 limited edition smart bed. ends monday.

new in just the last couple of minutes, lordstown motors saying it is pausing production in deliveries as it addresses quality issues this followed a voluntary recall recall addresses an electrical connection issue that couldn't result in a loss of propulsion while driving. that's a little bit scary. >> down 11%. it's a 22% short interest, by the way. just over half an hour from the opening bell on wall street. let's talk more about the markets with karen murphy, chief investment officer at kestra investment what's interesting is the markets have come around to the higher notion of the higher for longer part, and they've done it in stride. i mean, defending 4,000 in the face of 4% on the ten-year yield seems to be really strong. >> i think there's a little bit of a disconnect here where the

fixed income markets seem to have accepted this higher for longer narrative from the fed, but stocks are still sort of questioning it you know, the rally that we had earlier this year was largely driven by low-quality stocks, and then all of a sudden, we had this, you know, stronger retail sales data, better jobs data, and stocks just kind of continued to go up we have had a little bit of a pause here, but still, we haven't round tripped that sort of low-quality rally that we have had this year, so i think stocks are not fully digesting that more aggressive fed line. >> in terms of what you like and you don't like, right now, you're staying away from commodities so you don't think, for instance, that oil will get a revival from the china reopening? >> so, we had positions in commodities, energy, last year, first half of the year it was a very effective inflation hedge, but we started to take those off in the second half of the year on the idea that inflation was starting to subside, and we think they work really well in inflationary environments, but when you don't

have inflation, they have a very spotty track record. so, you know, there is an argument to be made that energy could catch a bid with china reopening, but if we're right and we see slower economies in the u.s. and europe, i think that will offset some of that additional demand, and so it's harder to make that call on energy from here >> let's say you have money to put to work right now in the markets. would you recommend buying the s&p etf or a two-year treasury note >> oh, so, that's a difficult -- okay i think i would probably go for the two-year treasury yield. you get a really nice yield that you can count on the s&p, as i said, i feel like still has gotten a little bit ahead of itself, so in the very near term, i think we're likely to see some weakness if you're going to force me to make a choice, it's going to be the treasury >> this goes to the notion that credit sometimes -- like, we're seeing yields here that are very

attractive in general, right versus the risk-rewards in equity >> this is the first time in years that we have been able to talk about cash as a real alternative. all of a sudden, we're hearing investors say, like, well, i could just earn 5% in my cash. so, it's a very different kind of scenario than we have been used to over the last few years. what that also means is that we're seeing a lot of opportunities in general in fixed income, and there's still a lot of fear in those markets, so i think you can find some really interesting opportunities. >> all right, kara, great to speak with you, thanks final check on the markets got a little, well, 50 seconds to summarize everything you could possibly want to know. there's the dow, up about 77 points the nasdaq, on a relative basis, a little stronger. s&p, up 20 and change. l let's look at the yields, because 3.9%, that's a big number for gdp >> yeah. >> haven't seen it in a while. unbelievable to have that for a

year probably not likely, but still, maybe a little surprising, the markets stayed in the green. 3.96%, not a big move in the ten-year either. oil, still below $80 at about $75 and in that range. is this it >> this is it. >> this is it. >> one and done, and she's so -- look at that smile on her face >> alarm clock goes back to, like, 11:30. make sure you join us tomorrow "squawk on the street" is next good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer in philadelphia. we'll get more on that in a moment david faber here at the new york stock exchange pretty busy morning. futures do pare some gains gdp price index, jobless claims with a one handle, ten-year yield continues to set new highs for the year at 3.96%. road map is goin