the markets now. we're solidly higher now, and in the green. we're either in a -- i mean, we're either in a really good economy because of the labor market, or we're ready to just sail off a cliff do you know? does anyone know >> it's such a good market that the fed's going to have to slow things down. >> it's -- that's been the thing the whole time >> lest all do this again tomorrow in the meantime. time for "squawk on the street." ♪ good nond monday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer. david faber has the week off lower yields help today as durables disappoint, dollar below 1.05 our road map is going to begin with stocks looking for this bounce after the worst weekly losses of the year buffett pushing back on buyback

critics saying, they are, "an economic ill liteiterate or silver-tongued demagogue." activist success a hedge fund presses for change. let's begin with the markets, though, coming off their worst week of the year volatility in the so-called fear gauge is in focus. data says more call options are betting on a rise in the vicks, and it changed hands on an average day this month than any time since of march of 2020. this story is everywhere >> i found it astounding we've already had a big selloff. last week was a very negative week we come in with interest rates going down because of the soft durable goods number, but then we have, look, i always like to refer to mike wilson he's been right. i make fun of him periodically, but he's been right. he says, listen, bear market trap the bull market's not real and i didn't know we were in a bull market, and we had -- you were kind enough to be at our conference this weekend. the overall -- this is cnbc

investing club the ultimate takeaway from that was, not yet don't buy yet. but there's going to be a moment where you're going to have to buy, and i don't like the market to be -- i want to finish its downturn, and it doesn't seem like it has. >> you raise the wilson note he does say that march, high-risk for the bear market to resume next leg lower then he builds this little out he says, technicals have been good >> wasn't that interesting he said, when you're really emotional, you have to default to the technicals, something i totally agree with larry williams, my ultimate technician for many, many years, says, this is it this, going into march, is when you have to start buy. because the cycles over the, like, many, many year period indicate this is the moment. the negativity is pretty high. i think you have to find something you like and then build that -- meld that with what kostin is saying, which is individual stock picking is good, and you come back with --

you had wilson and wkostin, saying, find something you like. i think it's a good synthesis of what these guys are saying >> goldman's kostin has a nice list of names that are shared favorites between mutual funds and hedge funds. i think service now is on there. visa, if i recall. pfizer even. >> wells fargo >> yes >> and i -- it's funny you read these pieces, and i think people at home have to know, you come back, watch kostin, and kostin, you respect, and wilson you respect, and next thing you know, you have workday, which is about to report united health, which has been out of favor you have schwab, which is interesting. mentioned service now. mastercard so, you've got mastercard and visa, and then wells fargo, and you say, well, what do they have in common? and the common is that they're old school everything's old school. there's nothing new.

workday is one of the oldest of the cloud companies. i think it's very interesting. by the way, if you want to know -- if you want to get what is most interesting for the week, i'm coming back with salesforce, which is this week, march 1, where i am hoping that the activists say to benioff, we still love you benioff -- if you look at the short-term, you have to understand what the union pacific -- look at the short-term marc's company hasn't done that well but no enterprise software -- why is he being picked on? i think because it's a big cap company in the dow that has underperformed lately. but there's no one says that marc's doing a bad job no one's saying the product is anything other than the best what's their issue you already took the medicine. that's the one i want to watch major medicine take. let him alone. >> yeah. well, if david were here, his reporting has suggested that directionally, maybe, things are headed that direction. >> right i mean, i did talk about this weekend, the idea that, like, i think some of these people want him to declare succession.

that's kind of the paypal method, and with shulman, where we got this investment by elliott partners and the next thing you know, there's an agreement for dan to move on, but dan's older than marc, and these are titans it's weird to talk about titans. i know we're going to get to union pacific, but marc benioff built that company, and for these people to come in and say, he's underperformed when you look at it since it was $8, and you say to yourself, well, is it really a what have you done late for me story at salesforce can't you just move on to something else but they're all gunning for him. >> we're going to dive into unp after the break. >> yes. we want to get to buffett, though long weekend of reflection on the results, his calls for patience, his cash load. is the buyback the biggest story out of the quarter the comments about buybacks? >> i think it is, because it's so incendiary.

there's some great quotes from munger, things that you could learn from him when you look at his holdings, he's been known to do this on "mad money," spends a lot of time talking about how american express and coca-cola are winners because they buy back stock, because of the dividends, but the actual portfolio, occident occidental petroleum, spends a lot of time talking about, don't look at my operating look at what i've done with these companies, and the companies are so disparate there is no theme, other than the fact that it's -- he's the largest owner of them. there's a lot of -- i don't know, when i read it, i'm not saying it was wistful. i am saying that he himself is saying, listen, we're going to be pithy we have maxims, but we are furious at those who are against buybacks because buybacks have meant so much for shareholders, and i thought that was very well reasoned and i wish that the people who have been anti-buyback would read it, and i think they would change their mind

>> you think he should have called out the president by name you think that's who he was talking about? >> elizabeth warren, the president? yes. she called out by name he spends a lot of time talking about the tailwind that is america. i don't think he wants to do that he's saying, look, you, whoever you are, think these are bad but i want you to rethink it but he used very incendiary language when you call someone basically an idiot i don't think you want to be known as calling the president an idiot i don't think that helps if you believe in the american system >> what's fascinating is that prior to 2018, he also agreed that in many cases, it is a -- it is an illogical use of cash >> when he was talking about his own, and now he's a big buyer of his own stock, obviously thinks the stock is cheap he's able to do some -- a lot of people would feel he's two-faced. if it were anybody other than buffett, but i say he's evolved. and he does spend a lot of time talking about when the facts change, you got to change with them it was a very thoughtful short

essay about the flaws that are in investing by no means -- at one point, he says, we've made so-so investments, and he talked about the ones that have gone bad, and i found his humility was very refreshing, because most people would never admit they make mistakes i like it. doesn't take long to read. >> it's actually also a nice touchstone when you're thinking of the impact of higher rates, building materials and housing >> yeah. and there's -- there's some moments that i think are wistful, like, when he says, look, maybe you should spend this time studying the debt. try to figure out what your obituary -- what you want it to look like and lead your life like that. there were some maxims that were very timeless that had very little to do with investing, and i like those too if you're 25, 30, you look at this and say, i got a real chance to change my life he's lived long.

but i felt that it was both wistful and also judgmental, and those are -- maybe that's the way buffett is at this point in his life >> market likes it when he comes out swinging, and in extreme environments, he'll say, buy american i.m., right that's the classic "times" op-ed back in the day. >> exactly right i would love him to say, tailwind, and therefore you have to buy this. this was not right i mean, if anything, he said, tailwind, and that's why we have a really big railroad. burlington northern. no -- i guess you could look at his largest -- i mean, for instance, i always think, wow, what does he see in hp, which is hpq. >> reported this week. >> and i said -- tomorrow. we'll see what he sees in it, but that's been a big buyback with a yield he doesn't offer much explanation. but i find it -- i found those sort of a mystery, and i want to know more about them i want to know more about why

moody's right now -- we could find out i think it's interesting that, again, union pacific, they changed the ceo, and then you see, well, wait a second, maybe there's good operators in burlington northern, which is a very good operator this thing will take very little time one of the things that i think is salient is about, where do we get our taxes? how much more can you really assess to individuals? that, i think, a lot of the left will dislike this was not an attack on the left, an attack on what he regarded as the uninformed left, because it's not right-wing by any means. >> right obviously, a rich read, and it's nice that it comes out on the weekend so you have time to digest it. >> i spent a lot of time yesterday. i went over it with my daughter. you kind of -- just plainspoken. i found this one line, which is, "how high would a stack of $1 billion be if it's $100, it reaches three quarters of a mile

into the sky." there was a lot that was parlor games, but not in a stupid way a learning way >> we'll keep it in our pocket as we get through the next few months when we come back, jim mentions the hedge fund pressure that is forcing a big change at the top of union pacific in the next hour, an exclusive with ark invest's cathie wood. we'll talk about the portfolio, the a.i. revolution, the fed, the tesla investor day coming up later on this week futures are starting out pretty good here after three weeks down for the s&p and nasdaq, and of course, the worst week of the year last week we're back in a moment how do we show strength and stability? (eagle call) a mountain? a tree weathering a storm? (thunder) lions? nope. (lion rumbles) we do it with our people.

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union pacific up in the premarket. the railroad operator announcing it will replace ceo lance fritz some time this year after the hedge fund pushed for his ouster the fund owns more than 1% in the railroad fritz has served as ceo for eight years. >> i was surprised under fritz's, you know, quoting for the letter, the hedge fund that was very vocal this weekend, but i didn't know it was vocal before and it's got some very, you know, basic things, especially after what happened in east palestine. safety, volume growth, revenue growth, cost management ranking, ebit growth, total shareholder

return, and he's worst in every one of these and then the analysts come out today and are gleeful that he's gone, and i came back and said, well, where the hell were you? why didn't we know obviously, we could have done these ourselves, but the operator ratio wasn't that bad but he was despised. they said he had lost confidence of shareholder, employees, customers, regulators. i say, despised, because they say the workers didn't like him. this is one of those things that we all have to deal with as people in the media. lance came on the show many times, and i thought lance did a good job, but by this empirical data, he did a bad job, and in the end, you have to default to empirical, not to personal, and i wonder myself whether i wasn't captivated by how lance came on and talked about how he had done a lot of things to make it so the executive suite was more representative of america. i really liked that.

but they talk about how -- this hedge fund talked about how there was someone who was brought in and was doing precision railroading, and then somehow he said that he was -- he left. it doesn't really explain why he left, but obviously the implication is that lance didn't -- they didn't get along with lance and there was the guy who left, and it seemed like that's who they want to be the ceo. but i wish the analysts, whom we rely on so much, had been more adamant to say how bad lance was, and i feel like i'd like to know the other side. but the fact that lance has left seemed like it was verification that the board said, yeah, this guy's a big mistake. you said how they don't own a lot. this was one of those things, i'm going to study this one, because the media loved lance. lance was very compelling figure the data was very suboptimal and yet, you didn't get the sense that he had done a bad job. and the stock -- the fact is the proof is in the pudding.

when you have a stock that goes up this much after a ceo departs, what it says is that the judgment -- the judgment -- you know, the tribe has spoken >> yeah. jim's right. bank of america goes to buy today. we did have lance on last month, and we asked him about the overall u.s. macro >> our concerns are around housing looking like it's getting a wobbly not sure what's happening in asia in terms of source of imports, and it's not really clear what demand for those imports will be. you roll that all together, and there's enough storm clouds in industrial production that's expected to be down half a percentage point >> i mean, transports in general have dealt with all kinds of supply chain black swans and possibilities of strikes >> i know. i think that what the -- what they were thinking when they

did -- when this hedge fund, they like ksu. i mean, ksu got bought they like canadian pacific that's a canadian company. we don't really follow them that much we probably should burlington northern, which is owned by buffett, again, really much better than lance and union pacific, but i mean, i don't know it seems like the challenges at union pacific were pretty big. they had building out very effectively their network. i'd love to push back on this. but the board and -- the board was so quick to get rid of him it was kind of like, well, listen, he's a good talker, but he's not our guy and i don't know i mean, it seemed game, set, match. i had believed in what lance was doing, and obviously, the other -- the business was dealing with tremendous disruption but they kind of just say, listen, ksu was, canadian

pacific was, and they didn't falter csx didn't falter. norfolk southern, which we just know had a very tough couple weeks, in which the republicans are saying it's kind of -- it's the fault of biden alan shaw may get a pass, good interviews with morgan brennan, but i come back and say, worse, worse, worse, well, analysts, why didn't you tell me he was the worst? >> we're going to pay attention to norfolk as well as the house is going to have hearings. >> i talked about a train wreck that i covered train wrecks in the old days, they were covered up when we come back, ark invest's cathie wood is going to join us exclusively in the next hour europe is trading well after some headlines from lagarde after the weekend. we'll get cramer's "mad dash" as well when we come ba ck good night! hey corporate types. would you stop calling each other rock stars?

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let's get cramer's "mad dash" as we count down to the opening bell >> stacey is a frequent guest of cnbc, and he has what i regard as a simply remarkable piece this morning from bernstein about nvidia it's a buy recommendation but a bottoms-up approach, and on page seven, there's a matrix that talks about how much nvidia makes if you get -- this is all through h-100 gpu. if you get a hundred million queries a day and if you get a billion kwqueries a day on chatgpt. on a billion queries a day, which i think it could definitely have, because it's so widespread in its use, they would make 10 to $20 billion i mean, now.

and i think that all of us who speak with younger people, particularly chatgpt, everybody runs everything through chatgpt just to be sure it sounds better, looks better real threat to adobe, by the way, because when it comes to what jensen huang, the ceo, talked about is copyrighting and the way ads look you don't do them anymore. you don't use adobe, and i know that it's really possible that if he doesn't get this acquisition, it could fall behind because of chatgpt, but this chatgpt graph shows you that nvidia's not only the biggest winner, but nvidia's going to be the -- arguably, it could become the biggest company. >> biggest company >> biggest company because you can't do anything, any of these really -- chat is just one of them, on what's coming, without nvidia nvidia is just a neural network. by the way, i talked to some younger people at the investing conference all they want to know about is

nvidia, because they all recognize that it is artificial intelligence that's what happens. >> it validates what jensen huang said last week about it being an fleinflection point but it's the most obvious play, is it not >> it's the only play. and i say it's the only play because you can't have this generative a.i you can't have accelerated compute, because everyone else is stuck on an intel model, and they've left intel behind, even though intel would say, that's not possible it's possible. it's empirical what i love about this piece is it tells you if you want to invest in a.i., you don't buy one of those a.i., you know, the etfs you just buy nvidia because it's the only one that has figured out how to go fast enough, that allows you to do things in seconds. i know the chinese have outbought, but this is the beginning of a new era, and when jensen says it's as big as the pc and as big as the internet,

take notice, because the iphone app store, because jensen is not given to any hyperbole, everyone was struck by that jensen didn't call that crest. he's an amazing cfo. he was playing tag team with her about things you never thought possible i remember going out and seeing jensen about nine months ago, and he said, one day we'll all realize this is the biggest opportunity ever and then he said, it happened in 180 days >> he didn't say it was going to be this wednesday. i know >> you got to read this piece. it's really -- puts numbers to what jensen is talking about >> opening bell coming up in a couple minutes in the next hour, cathie wood will definitely talk a.i. and nvidia, exclusively at post nine

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. a big deal in pharma might be in the works. "the journal" today says pfizer is in talks to buy cancer drug maker seagen the paper says discussions are at an early stage. we do wish david was here to

give us some more color on this. >> seattle genetics was supposed to be a big growth company pfizer stock's been terrible this would give them a really solid base in what some people would say would be a rival to keytruda but for different cancers, and this is a company with deep bench. i wanted merck to buy them, because i think they have spectacular anti-tumor technology, but this would be a major departure for pfizer and would make it so they have a new consistent revenue stream. if i were merck, i wouldn't let them have it but merck's doing quite well and doesn't seem to need it. >> it would be interesting to get some bidding action around here in pharma is regress the same in pharma as it is in tech? >> absolutely. they just don't -- you could argue that someone in the -- i don't know, maybe the ftc would say, wait a second, we need more than -- more than two companies

that are doing devices this administration -- the s.e.c. shot down this deal i'm wondering about vmware it takes my breath away that they find that every merger seems to be bad. >> it's tough to find one without some resistance. let's get the opening bell here at the cnbc realtime exchange. at the big board, it's s&p global at the nasdaq, new york congressman and the consulate general of the dominican republic in new york jim, breadth here, 4k, and the way europe's trading, even bank of america at the desk this morning said it's a head scratcher why things are so firm >> germany, their longer bonds are -- interest rates are going so high. i keep coming back to what judy marx told me, the fabulous ceo

of otis, she said the real opportunity is in europe that's where real building is going on i know that when you talk to anybody -- anyone who's in just traditional, like, hvac and the very simple ones, you just hear europe, europe, europe and then you hear that they have to spend more money on armaments. they're spending a lot of money on liquefied natural gas they're just so much activity in europe that's highly unusual boy, people want to invest in europe >> yeah. well, we're going to get some more color through a bunch of conferences this week at investor meetings. cvx, goldman tomorrow, tesla on wednesday. a great piece, by the way, by our hugh son on dot com about goldman and the failed ambitions of marcus. >> this is a must-read piece, and he talks about how they made this deal with apple i remember speaking to several ceos in the banking business, saying, why are you letting goldman have this piece? they said the same thing, which is, oh, man, what a horrible

deal by goldman, and that is their credit card. it does say, there's an executive that says, really, with an expletive that's been deleted. it's viewed as a failure, it was a distraction at the same time go goldman was having a big year in ipos no one looks good in this piece. nobody david solomon's going to be on "squawk" tomorrow. he inherited these things, and it seemed like he was all gung-ho on retail and then pulled back. i think solomon is doing a good job. this piece would indicate that he was given a hand that wasn't that good. lloyd is scathing in this. >> i was going to say. >> a i'm lloyd, i'm looking at this piece, saying, i made some mistakes they were few. >> we'll look for headlines, especially their macro view, which had gotten a little softer

in a positive way in recent months >> right the fact that goldman still has -- the stock's been a good one, which is why, again, i judge by the stock that's probably a brutal analysis, the weighing machine versus the voting machine, but i think solomon's done a good job. the internet seemed more fair at goldman, sounds awful, and i knew the fella who left to go to walmart, and i really liked him. he's mentioned in the piece, and omar ishmael, really terrific guy, and he went to walmart. no one from goldman ever goes to walmart to go up against goldman. this is a great piece. it's antithetical to the goldman i know, but as my wife would say, jim, the goldman you know is 40 years old. >> it does remind me of the mike mayo note the other day, for the first time in decades, it's not on some list of most preferred places to work >> goldman was always the

hardest place a get a job. i'm going to step back i think people still want to get a job very badly the a goldman there was this great, go west, young person, move but i'm seen no diminution of people wanting to work at goldman i still think getting a job at goldman coming out of school is a great honor. that has not changed >> all sectors are green not as good as consumer discretionary, which leads me to amazon this morning, you tweeted about their exploration of ultra-fast delivery >> there was a guy at my house at 6:00. i said, what are you doing dropping off some pants i bought i ordered the pants at 5:30 last night. andy jassy, whom i know, i mean, there is -- well, i mean, the guy was, like, it was 5:00 p.m right there. it's so early. but i was scared to death. who the heck are you it's the guy delivering my

pants. and i'm going fishing later in the week i ordered some fishing pants at the last minute, and there they were if i were buying these at any department store, i'd have to go there, have to try them on, whatever no i mean, i hesitate to think how you could get it faster. i mean, jassy doesn't -- i mean, jassy is supposed to ffi fire 200,000 people. all right, fire them how about the fact that prime remains this amazing bargain >> that's the whole point is the stickiness of prime. >> right the stock is one of the most hated stocks i've come across in a long time, as everything is in f.a.n.g., except for meta, because he's fired -- zuckerberg's fired enough people, and he's not even done he has to cut back on his big capital expenditures, but we forget, while we den gigrate amazon, we keep ordering from them >> that's a good point, and it does lead to the retail names we'll get this week. is it going to be a sort of net negative as walmart and home

depot were last week >> well, i think that what's going to happen is they're going to benefit, the ones you mention, from the downfall, which isn't a real downfall. the decline in home depot stock pricing, the decline in walmart stock pricing, have made it so brian cornell will be on air, doesn't have as tough a job, and marvin ellison -- brian cornell from target -- marvin ellison at lowe's has -- the world is his oyster the market still loves and the analysts still love all the off-price because they keep waiting for the bed bath & beyond to fail already federal realty, when you read their note to shareholders, they're just talking about the expected bankruptcy. no bankruptcies have happened yet except for party city. so, i do think, though, that i think that these have been somewhat derisked, although target still sells at 22 times earnings that's too high. it's just too high hey, by the way, the one that people hate today is best buy.

that's at 12 times earnings with a 4% yield, and you know, we had two pieces that are saying they are going to miss big. we won't have long to wait they report on the second. i don't know i think corie barry is doing a good job, but i think people are taking their cue from what walmart said about how bad electronics is no matter what costco says, it's going to go down unless they offer special dividend and that's because costco announces its monthly numbers. some people say, nothing there >> it's a good point on electronics, because we are going to get deall and hp. we'll be looking for any clue that the -- that we're at trough pricing on pcs >> if we believe what jensen huang said, the implacable ceo of nvidia, he said there's a bottom in pc chips if there's a bottom in pc chips, then we've reached the bottom in pcs. if we've reached the bottom in pcs, you want to buy a buffett favorite, which is hp, inc.,

because that would be remarkable rica has done some good work there. doesn't seem to matter of late, but if jensen says that the -- and colette kress was the first to point out the inventory glut to me. if she's willing to call out the glut, how could the person who got it right at the beginning get it wrong at the end? i'm a believer in the end of the pc glut, which would make me inclined to say that even though hp is going to report not a great quarter, at eight times earnings after a disastrous decline in sales, might be very interesting. >> what about okta, z scaler, snow >> i'm just laughing because my daughter comes over on sundays, and we do flash cards of all these companies. she goes, hi, i'm emma from new jersey, what do i think about okta, and i have to say where it is and the ceo those are all related to cyber securities crowdstrike catches up great today. i think those have also come

down enough. they've come down enough and i think it's kind of really interesting that they've just been terrible stocks i happen to sit right behind todd mckinnon, the ceo of okta, at the super bowl. and he walks in, i say hi, and my friend, bruce,says, who's that i say, he's the ceo of a real stinky stock he said, is there more to it than that? i said, though >> one name that has held in there has been tesla and the investor day is coming up wednesday. we haven't talked about this model 2 and whether or not you think it might be sort of that holy grail of an affordable ev that can really -- and by the way, more head lines today about their german production ahead of schedule >> i don't know. i read a note today that says that nothing -- nothing surprising will come out of it i mean, this is elon musk. you know, this is not a good

tool elon musk is going to dazzle i'm waiting for the meeting. i would love to hear what cathie wood has to say. i think she has more gravitas than anybody i like the stock very much i know that jim farley at ford was surprised to say that right now i like tesla more than ford, but there is an element to tesla ask that car that sounds terrific there are a lot of good articles this weekend about why, in the end, why germany's not doing more and the implication is because china is such a huge market for german cars, and china is aligned with russia what a damning, damning story about the intentions of germany. >> there's a lot of ukraine-china headlines. one is the idea that some of these european companies might offer security guarantees for zelenskyy to participate in some kind of talk biden has said, ruling out f-16s for now. >> well, because they can fly over russia. >> macron's going to go to china

in april >> that will be interesting. macron's been a pretty honest broker of things, i think. obviously, we've not allowed -- air environment has not allowed drones, but russia is using iranian drones we've got -- where's reagan? we've got an axis of evil here he made that comment at the beginning of the end of the soviet union >> sure. >> the -- there's a, i think, an overall sense that europe is underinvested, which is interesting, because that's what president trump had argued underinvested in nato. what are they going to do? and then, all of a sudden, you read about russia. they did so well with oil, it turns out now they had a bumper crop in wheat, so russia was supposed to be an unimportant, small country. that's what we kept hearing. an economy the size of texas russia has so outperformed what people thought it could do with its economy that it is rather surprising that they haven't been able to have more armaments

and they have to fly iranian drones >> yeah. the couple pieces today about china, well, there's three things one is the national people's congress is coming up, maybe a catalyst idea. but overall, this -- jpmorgan reuters piece, they have a new asia credit index that slashes the weighting to china, and maybe there's a little mistrust of xi at this point and it's hurting them on the global investing stage. >> i mean, i think, look, we have these companies let's say baidu has their own chat because the government has said that you can't use chatgpt. o okay, well, that's the government the government mandating stocks to do better, and if you do too well, you get under house arrest, so to speak. whenever wall street turns on that market, xi then emboldens the companies and allows them to do things that attract wall street money, and then he devastates that wall street money, and then he starts over and over again and the lap dogs on wall street who always are waiting for more ipos because they generate them,

are viewed as charlatans and then the -- once the stocks start coming back, they're viewed as heroes i say this is not a real stock market anyone who thinks it is a real stock market should go buy solana and bitcoin that's as unreal as what i'm seeing in china. and don't kid yourself this is controlled economy this is totalitarian >> we have talked about revenge travel, pent-up demand, reopening. >> i like -- look, if you're going to buy, and we talked about estee lauder this weekend in our investment club estee lauder has this big business in duty-free and big business in china where it's switching from skincare, which is what you have when you mask, cleansing, to make-up, when you take off the mask and go outside, and that is the estee lauder theme i don't think that the chinese want to confiscate anything that is for china, by china that is why i think that apple's been okay. nike, for china, by china.

the reopening's real but the stock market of china is manipulated by the government, and anybody who doesn't think that just has not seen how the government acts. >> yeah. we were talking about a.i. earlier. snapchat now, jim, says beginning to roll out my a.i. to snapchat plus subscribers in the united states. there's one more player in the pool >> they should roll out the my, stop losing money. look, when they do the my "i won't get crushed if i buy my stock" app, i'll be all over that right now, hard pass >> are we in that mode where we jus just start putting a.i. on everything >> yeah, my middle initials are going to be a.i. there is a repugnant attempt to get in we've seen this time and again we saw it in the first months where a lot of stocks went up, including enterprise software, because people thought that was a place to be. i'm waiting for bitcoin to come down that's the -- that was

january's, and now we have a.i., and i just tell people, if you want a.i., please stop it. just buy nvidia. a.i. runs on nvidia. it's like america runs on dunkin, and you got a takeover bid. just go do it. >> we got a nice little bouncer at the open, up 200 on the dow still circulating 4,000. vicks is lower, though let's get to bob pisani. >> nice little bounce. it's a nice little bounce right across the board, even sectors that haven't been doing so well for the month of february. let's take a look at the sectors right now. china, jim was just mentioning, just a terrible month as a lot of people simply abandoned china once again people are talking about china, whether or not it's investable, but mchi, which is your key etf for china there, bouncing nicely today. retail, which has had a terrible month as well, also bouncing nicely today banks held up pretty well, and that's doing well today. and some of the other sectors here, like semiconductors, which have also held up reasonably

well tech's been one of the modest winners this month, also doing well here. railroads are bouncing transports are bouncing nicely here union pacific, csx, norfolk southern, all on the upside here of course, union pacific just collapsed recently, was $212, went to $190 or so, now it's back to $212 again on word there might be a new ceo down the line that's moving on the upside. and big cap tech is doing well so far nvidia's been one of the big winners. that's bouncing. tesla also has had a great month. meta has as well intel's had a terrible month, but it's bouncing. alphabet's not had a good month. it's bouncing. even some other ones, amazon, not a great month, and it's bouncing as well tech benefitting right across the board. a lot of bearish commentary over the weekend. of course, you all heard about some comment out of morgan stanley and some big warehouses, commenting, but i think the important thing is, let's take a look at what the earnings situation is looking like, because earnings have been coming down rather dramatically, but the rate of decline is slowed so on december 1st, this is the

total estimate for the s&p 500, which is the way they figure these numbers here $231 on december 1st went down to $229, and by february 1st, the numbers were coming down really fast. there was a six-week period where they kept dropping the estimates. today it's at $222 the rate of -- it's going down, but the rate of decline has been slowing rather noticeably and that's what you want to look for. you want to look for the delta, which is how fast are things changing the rate of decline, slowing down a little bit. that's not a big, big help all along here because you want to keep an eye on what's going on with the overall trend here. so, the paradigm has been, we're going to get lower inflation, and we're going to get moderating rates that means stable earnings that's one of the reasons the rate of decline has slowed down, but this may be wrong. you saw the data last week with the pce. that paradigm may be wrong we may have a new paradigm here where we're still having high inflation or inflation going up, which is what we saw on the pc and higher rates

if that is the new paradigm, that means lower earnings, doesn't mean stable earnings, and that's why some of these analyst estimates are kind of in peril now. that's the bear camp that we're seeing here. so, if you want to take a look at the s&p 500, you want to take a look at some of these sectors here today, it's still very pricey today, 17.9 forward earnings historic average is 17 the prices are still high, and earnings may have to come down if that new paradigm actually prevails in terms of the february winners and losers, if we take a look at some of them, technology has held up very well. it's been flat semiconductors have held up. they were a big winner, but all the move was up in january and the first part of february banks flat retail have not had a good month. the only reason we're not a lot lower is because of the technology so, s&p 500 is just above its 200-day moving average it's 3,940 we're looking at 3,999 here.

that's above the s&p 200-day moving average that's the critical number people are watching right now. back to you. >> bob, see you soon bob pisani as we go to break, we'll check bonds today. decent week for macro touch points we'll get manufacturing ism on wednesday. services on friday no jobs number this week that comes next week, but for now, ten-year back to 3.9% obviously, a healthy diet of fed speak will continue as well. be right back. what's it mean to be ever better? it's your customers getting what they ordered when they expect it. it's having an ecommerce solution that scales with your business as you grow. it's using innovative technology that manages your inventory and orders.

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and we're committed to increasing our renewable fuels production. because as we work toward a lower carbon future, it's only human to keep moving forward. we're going to talk to cathie wood in the next hour take a look at what ark has done versus the s&p so far this year. a multiple of the gains for the overall index, but it looks different if you go back five years. we'll get to all of that with cathy, with stock picks and inflation. dow 2up30

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they talk about the possibility they could make a splash from a.i. integrations and when you talk about nvidia, that is the name that you keep coming to, microsoft you the biggest adopter of it. i like the piece by jefferies and i think microsoft is embarking on a new chapter it would be amazing if they made a comeback. >> my favorite parlor game is the one about the google apple search partnership when it expires no one really knows, could microsoft be a new marginal buyer if they want to play here. >> would that be something we see apple making great strides in health care i mean, apple is a company that i think is let down in the discussion too often that would be amazing for them alphabet is challenged here and has to come up with something quickly that says we're not hurt by chat. they have google cloud, but they've got to say why it's better than just asking this. >> heyes.

>> how about tonight >> i've one of my favorite companies, bowlero the only spac i like the only one stephen yalof i like to look at every one of the reits that involve shopping because they tend to give me good insight into shopping itself more than you get from individual companies. this isn't one that has target i think target is derisked by walmart, lows derisked by home depot. >> yep off and running. going to be a busy one. >> very exciting. >> see you tonight "mad money" at 6:00 p.m. >> as we said an exclusive with cathie wood here at post nine with the dow up 260 now. - it's a payroll app. - payroll is way too complicated for the average person. - paycom guides them through it. missing or duplicate punches, pending expenses, unapproved pto, on and on. - why would employees wanna do all that?

- this could be a stretch, but i think it's 'cause they wanna get paid correctly. i like getting paid correctly.

good monday morning. welcome to another hour of "squawk on the street. i'm sara eisen here with carl quintanilla as always live from post nine at the new york stock exchange david faber has the morning off. take a look atp almost 300 points after the worst week of the year last week three straight weeks of declines the s&p up a pull percent and housing data to start the hour

diana olick has that for us. pending home sales how do they look >> pending home sales in january jumped 8.1% compared with december according to the national association of realtors much more than the 1% gain the street was expecting and it is the second straight month of gains. it is, however, unlikely to last and here's why pending home sales are based on signed contracts people out shopping in january and that's when mortgage rates fell back to the lowest rates since september. after hitting a high of 7% in october on the 30-year fixed which caused sales to drop, rates dropped back close to 6% in january, buyers clearly jumped in. trouble is, it didn't last 7% again if you look at the most current indicator of home sales which is mortgage applications, they've been down solidly most of february while sales were stronger month to month, they were still down over 24% compared with january of last year not just higher interest rates but a severe

shortage of homes for sales. back to you guys >> dine na, it's all about where the mortgage rate is going, is that what you're saying? the brief respite in the housing market you expect to come to an end because we're back up to what, what did you say, 6.5% >> we're at 6.88% as of friday we haven't gotten today's rate yet today. but yeah, it's based on affordability and people are rate sensitive right now and that's because home prices are so high that even a slight move in rate is going to knock a lot of people out of the market. these -- some may think there's small moves half a percentage point, it means a lot to this market we saw the jump in january and likely to see it pull back again in february. >> diana olick, thank you. we are about 30 minutes here into the trading session some big movers we're watching right now starting with un nonpacific lance fritz stepping down after soroban capital partners pushed for a change bofa upgrading the stock to buy from neutral the stock having a big move up

11%. seagen shares story. more on that story later this hour a big week for the ark innovation funds, tripping the nasdaq's gains zoom set to report after the bell and tesla holding its investor day ark founder and ceo cathie wood will join us for an exclusive this hour right here at post nine as the debate rages, carl, about growth stocks versus value stocks and whether the great start to the year she has had and so many others so-called crypto names on profitable tech companies, can really last liz ann saunders put out a chart on this. it switched in the last few weeks in terms of growth versus value. growth stocks have been hammered in the last three weeks in this market sell-off versus the strength they saw earlier this year. >> there's a look at i think what liz ann put together.

cathie has more to bring to the table with the addition of a.i. to the discussion, right, and whether or not it means that the things she's been calling for, disinflationary trends through tech are showing up in a tangible way. >> sure. but it's not how the fed is seeing the world and not how the market is seeing the world in terms of disinflation, a.i. adds a new level to the innovation story andi excitement in the stocks if her bet was we're going to see deinflation or severe disinflation the fed has to pause because we're going into a recession, guess what, the data has showed the complete opposite in the month of january. i'll throw in durable goods we got this morning, headline looked ugly because of boeing aircraft, but the core shipments, which goes into gdp, up more than a percent, adds to this stunningly strong january we've seen. >> additional headlines about the labor market and just hoarding and ways in which the typical pattern of layoffs in tech have been contained to

areas of tech, although i know you notice the journal piece on apartment rents. >> finally coming down. >> six months. if you're renewing a lease now you're paying 4% less than last snooug hopefully that extends to new york city where it feels like the rents have not come down at all. the fed wants to see that. this is the most sensitive part of what the fed is doing mortgage rates are going back up because the expectations for the fed are going up the problem is, carl, outside of the interest rate sensitive areas of the economy and housing is the big one, you're not seeing the kind of weakness and now the tone is, i don't knowi you noticed it, changed in the research notes over the weekend. everyone is bearish. all the strategists. not just mike wilson and morgan stanley who expecting the bear market to resume in march, but they all are, and they're all hawkish and all now expecting that the economy is going go into recession this no landing scenario is nonsense because the fed is going to have to do more to push us into recession to get inflation. >> whether you start talking

about peak rate risk, that is a longer runway for the fed to make a policy mistake, right, or something to break. >> exactly. >> that explains the piece about the call buy on the vix. where you're like bracing for volatility because there's more chances for them to mess up. >> ramping up. the only positive thing is everybody is turning negative again and turning hawkish. we know how positioning can go the other way sometimes, but exactly. wolfe research, they're trying to outdo each other. wolfe put out 6% on a terminal fed funds. we have to see 6% to bring inflation down the rate continues to move higher and the question is, are we -- is the market pricing in peak hawkishness we've asked this before. now that we're making new highs on the 2-year yield, i think the question is relevant. >> right jim would say look to the shorter 1-year, 6 month t-bills. >> 5%. >> it's remarkable the other thing, too, we're going to talk to cathie about tesla, one of a series of

investor meetings, goldman and chevron, and the impact it's had on ark over a multiyear duration in other words - >> the - >> if there hadn't been tesla her performance wouldn't be near what it is now. >> flat over the last five years, under performing the s&p 500, no question about it. tesla is an important one for the market as a whole. one of the most actively traded stocks, one of the biggest stocks as matt the technical analyst points out, it hasn't rolled over like the other tech stocks we've seen lately. very key for the market. it stalled at these high levels after a crazy run in january but has not fully rolled over. that's going to be a test and a question for cathie too. >> yeah. holding 206. the third, fourth biggest gainer on the s&p this morning. to our senior markets commentator mike santoli we've been chatting about the tesla affect on cathie today, mike. >> tesla up 700% while ark is

flat rescued the performance and everything outside of tesla, a big net negative over the time span overall market, i agree with sara, people are in the sell the rally mode feels like the market tone has gotten a little more damp. three down weeks, the s&p down 4, 5% off its highs. seems pretty contained right now. this is a 2-year look. shows you the final run of that bull market into the high last january. this -- what really takes on the look of a long-term kind of sideways trading range, whether it's a base, something different, is completely in the eye of the beholder. but here's why people are thinking that we're getting to an interesting spot. you see a lot of that. essentially you're at this crossroads 200 day average. people who got bullish in january because you saw the momentum signals, they're kind of waiting for the market to prove there's credence there so far i wouldn't say anything has happened in this market absorbing the yield moves, absorbing what's going on with the dollar, reset of fed

expectations to say it's game over for this run. now, talking about more aggressive, less aggressive parts of the market. high data version of the s&p, high beta components, this goes back to the middle of last year, compared to the low volatility basket and you see, it's out performed over that time span, but you do catch how it's gotten over excited into the august peak in the market that was when the fed got hawkish, wanted financial conditions tighter it's bounced around and another reminder that most of the downside the real depth of the declines in the under performance of cyclicals and aggressive stocks happened by last year. since then it's been a slog back and forth as we try to sort out exactly where this cycle is with scrambled signals. >> the point about, and sara's point about strategist negativity is a good one, and mike says the bear market could resume in march. he says it might allow in his

words stocks to make one last stand. >> right he says there's a way that treasury yields come in because they look stretched, maybe the dollar starts to retrace lower a little bit and that gives a little more of an upside opening for stocks you can make more headway. it's all about yeah, we're going to have a reckoning if earnings erode but from what level. i think that's one of the key points what did last year's decline price in relative to what we're expecting to get this year in earnings and that's what we're waiting to see. >> expectations of 252 for earnings this year in june of last year. now around 222 expectations have come down but the bears say not enough. >> exactly. >> mike santoli. >> our road map, including the latest around pfizer's deal that could be worth $30 billion fisker rallying up 20% after reporting results before the bell the ceo joins us first on cnbc to discuss. >> as we said, an exclusive with

ark's cathie wood joining us live at post nine, big show still ahead with the dow at session highs up 350

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to learn more, visit your local xfinity store today. shares of seagen rallying. pfizer reportedly in talks to buy the drug maker in a deal that could be north of $30 billion. meg tirrell joins us with her thoughts good morning. >> good morning, carl. this is something that biotech investors would welcome. the hope that m&a will come back

to the sector and really reignite valuations. pfizer has been looking for deals an the stock is down slightly on this, probably pretty unsurprising. less than 1% seagen up 12%. this is a company that makes cancer drugs known as antibody drug conjugates and, of course, they were the subject of takeover speculation reported last summer in terms of late-stage talks with merck. the stock had risen over the summer and then the talks fell apart over reportedly the valuation. boosting seagen shares pfizer has been on an m&a spree and they've talked about how much they want to add in terms of revenue through business development deals. they have all of this coming in from their covid products. they do face a patent expiration they want to add $25 billion in revenue through deals by 2030, and they're almost 40% of the

way there. last year they did two deals in biohaven which gave them a migraine drug for more than $11 billion, and global blood therapeutics for $5 billion for a drug for sickle cell pfizer is expected to continue to do deals and see how this goes in terms of the biotech etf, a gauge of biotech m&a, it represents the smaller and mid stage biotech, up there less than 2%. this isn't driving a ton of speculation into the space necessarily. caveats are these are reported as early stage talks at the moment, and there could be a lot of ftc scrutiny. they have been looking at deals in this space and there's expected to be focus there perhaps not as much scrutiny of on pfizer because of the less overlap than perhaps it would have had with merck. back over to you. >> thank you scrutiny on a lot of spaces right now on the deals meg tirrell. look at shares offing tegna afr

the fcc said it would take a closer review of standard generals deal to buy the broadcaster. tegna reporting earnings less than analyst estimates more "squawk on the street" straight ahead pushing higher here with the dow up 329 in the early action nasdaq up 1.4% municipal bonds don't usually get the media coverage the stock market does. in fact, most people don't find them all that exciting. but, if you're looking for the potential

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. welcome back to "squawk on the street." look at shares of fisker surging up 27% despite a revenue miss. let's get over to phil lebeau with the ceo of fisker over to you. >> thank you very much, sar ra henrik fisker joining us live on "squawk on the street. as sara mentioned you do not hit your expectations in terms of what you produced or earned in the fourth quarter in a wider than expected loss but reiterated guidance in terms of production for this year when do deliveries of your first vehicle the ocean, actually begin? >> so you know, as we mentioned, we are waiting for obligation which we expect in march and we will start deliveries.

one of the interesting things about our business model is we have a contract manufacturer that can ramp up really quickly so once we pull the trigger on the ram, we will be able to deliver a ton of cars quickly which is really the difference i think on fisker's business model. >> well, we were over at that facility in austria, when you began production, and at the time you said you were fairly confident that reservations, despite the ira not being applicable to the ocean, you thought they would hold in place, and, in fact, on the conference call this morning you said your reservations about 65,000, you really haven't lost a lot. are you a little bit surprised there wasn't a little bit of deterioration there because you don't have the ira ev tax credit that can be applied to the vehicle? >> well, not really. one of the things we have done is we have two continents simultaneously in u.s. and europe, we have the european market where we can put a lot of vehicles in there as well, but

we have seen reservations going up in the u.s. i think from the get-go we had a very, very attractive price point and we haven't raised it since we announced it way back in 2020, and despite that we're still showing that we will in our first year be profitable, so i think that the product itself also has features that nobody else has it doesn't matter if you want to buy a rolls-royce you can't get it with a solar roof or california mode, all the windows going down we have some features if you want them you have to buy a fisker ocean. >> you mentioned something during your answer there that i think, perhaps, is the reason why the stock is higher today. you still believe you have the potential to be profitable this year, which gets into the other question that a lot of people have had with you, with rivian, with lucid, the pure ev startups, are you confident you can make it through this year without needing capital? >> so i think within our guidance we have forecasted less

spend than the capital that we have and i think the critical part here, phil, is that yes, most startups they're not making profit for two or three or four years, so the cash burn is much more dramatic. in our case, because of our business model, we are making money on the first cars we ship. we gave a guidance of 8 to 12%, which i think our genius cfo said might be higher than that, what we could do is i could sit back now and just forget about all my other programs and just sit counting the cash. we can make money as we are. we don't have to do anything we can actually make money from this year. obviously, we're growth companies. i'm not going to sit back and do that we will spend money on other models an showcase a whole bunch of new models later this year to give our investors an idea about how we're going to reach 1 million vehicles in 2027. >> and that includes, you teased this during the conference call,

a pickup truck. >> that's right. it's a hot market and we have been planning it for a while, but it's going to be a different take it will have features you've never seen in a pick-up before it will be affordable. we're not going to do an 80 or $100,000 pick-up truck it's going to be cool. i've already designed it we're starting to build it it's going to be something else. >> something to see a little bit later on this year henrik fisker, founder and ceo of fisker, joining us this morning. henrik, thank you very much. carl and sara, i'll send it back to you where fisker shares are taking off after the company, yeah, they had a wider than expected loss, but they are potentially on target to turn a profit this year. >> pretty remarkable, phil, and week only busier for you phil lebeau. after the break do not miss our big interview with ark invest ceo cathie wood at post nine of the stock exchange we're ba itwckn o.

welcome back to "squawk on the street." i'm bertha coombs. your news update at this hour. britain and the european union have a deal this morning to resolve their post brexit trade dispute over northern ireland. it's the only part of the uk that shares a border with the -- with an eu member. the republic of ireland. the prime minister rishi sunak and the commission president ursula von der leyen signed off this morning they plan to release details at a news conference later in the day. the u.s. ambassador to china says today it is a, quote, little bit or wellen that beijing is blaming washington for this month's spy balloon incident nicolas burns says china has lost global influence and credibility, and the world needs to make sure taiwan is not coerced or intimidated.

the supreme court has agreed it hear a biden administration appeal of a lower court's ruling that consumer financial protection bureau can't be funded directly by the federal reserve to keep it politically independent. back over to you, sara. >> thank you. here we are about an hour into trading stocks are higher today and we're building on the gains throughout the session up more than a percent in the s&p. every sector is strong right now. consumer discretionary is in the lead thank you, tesla, up 5.5%. nasdaq up 1.4% we're coming off of the worst week of the year with concerns about fed tightening, more rate hikes, higher rates for longer dominating the conversation still. let's get back to bob pisani on some of today's movers. >> a down month but an up year that's what we're dealing with things turned around in the middle of february as sara mentioned. rates moved to the high side she's right, there's no particular fundamentals behind this rally, but it is a strong one. all 11 sectors of the s&p are up

this morning and we have 2 advancing the declining stocks in terms of the differentiators, metal stocks doing well, always a good global und indicator of deman. retail is bouncing back. banks, which have been flatish, semiconductors, another group that has done well tech generally has held up, about flat for the month of february a lot of other losers throughout in terms of big movers here, sara is right, tesla, thank the move up in consumer discretionary because of that. nvidia had a great month that's been a big help to the semiconductors but even meta has had a bounceback this is not true of everybody. for example, intel has been horrible this morning. remember earlier we had the dividend cut there alphabet has nod hat a great month. amazon has not had a great month. all of these stocks are bouncing virtually no losers in the big cap tech area. cathie wood is coming on

good to see her down here on the floor of the new york stock exchange with us we'll talk with her. note she's got a lot of interesting etfs that are out there, not just her ark innovation fund, but they're up. everything is up she's beaten the s&p across the board, not just the flagship ark innovation but the next generation, the space exploration etf, the genomics revolution, different kinds of stocks than her other etf choices. all of them beating the s&p 500. the main holdings which we tend to watch carefully for the flagship innovation, tesla is powering that whole etf there, up 67% these are the top five holdings, but even roku having a great year zoom video is up 10% exact sciences and square all up again, carl these are the top five holdings for cathie she's got to be happy with the performance this year. >> appreciate that setup bob pisani in fact, our next guest says she has never seen markets this dislocated and believes the most

brutal rate increase in history is near an end joining us here at post nine exclusively is cathie wood, ark investment management kraceo an cio. >> happy to be here. >> most dislocated ever. ever is a long time. >> you know from last year, the bond market at one point had never performed -- you had to go back to the 1700s, so long duration assets were creamed, including our innovation strategies and it was all because of fears of inflation and higher interest rates. we do think inflation is coming down now it always seems like it could come down faster, but we do believe it's on its way down you listen to corporations out there, even those who have had pricing power, staples, p&g they get their pricing but they lose the volume 6% declines in volume for a staple company we do think the consumer is

railing against inflation, and the fed certainly is doing its part, and money supply growth is down we -- our estimate is roughly 3% year-over-year basis we haven't seen a decline in money supplies since the great depression, 1920s. >> you see the most recent hawkish hand wringing as, what, the gurgle of inflation, one last attempt to make its voice known? >> i think the fed wants to make sure it has done its job, and job owning is part of it i do believe the equity market, certainly the way we've started the year, are beginning to see to the other side and sure, maybe they go up another 25 basis points, maybe 50, i don't know, but i think we're just about there. the market is a discounting mechanism, after all, so if you can see to the other side, we should be okay. >> it was looking like that in january, but then january data all came in really strong, including inflation, with the

pce going in the wrong direction, so the market has sort of changed its mind from your view and now thinks we're going to have a series of more interest rate hikes and they have to stay higher for longer and the economy is going to get hurt worse than expected >> yeah. this is going to date me this reminds me of early in my career in the early '80s it was the same thing. but, those who bet on lower inflation and interest rates long term, were the winners. and it's always the data, the data are very volatile, especially when you have the warmest winter in history in the northeast. i think that's distorted the numbers quite significantly. the interesting thing about seasonal factors, if that is the distortion, they all have to work out to one over the full year if they bumped the numbers disproportionately in january, it will come out of other months. >> i don't know. february is warm too. >> yes. >> some people look at your ark innovation fund as a barometer

for what the fed is doing, right, and they say, it's back on the rise, speculative that that behavior is back, unprofitable tech companies are getting bit again. the fed has more work to do. >> you know, it's very interesting that the people do link the two together. i think that the muscle memory has more to do with the tech and telecom bubble and bust, and people fearing that we may be in the same situation we are not in fact, the seeds for everything that's happening today, all of the innovation happening today, they were planted in the 20 years that ended in the tech and telecom bubble, but the technologies back then were not ready the costs were way too high. we didn't get the big breakthroughs in artificial intelligence until deep learning 2012, transformer technology 2017, and now finally we have a chatgpt. people are beginning to understand that the ground is shifting underneath us when it comes to innovation. unlike in the late '90s,

investors rushed in to the late '90s, weren't ready for them now they're running away they really are running for the hills. what are the hills they're benchmarks where they think safety is. if we're right, the benchmarks, which represent the traditional world order, are going to be disintermediated and disrupted by the most massive innovation period in history. so sequencing technology, robotics, energy storage, artificial intelligence, blockchain technology, and they're converging s curves feeding s curves. what's interesting to us is, we don't have that animal spirits in the market chasing these. you might think in january, perhaps, but the technologies are happening and the impact on our lives is going to be profound. >> you're referring specifically in this case to a.i. >> a.i. is really the mover and

shaker here. it is going to catalyze more innovation it's at the heart of the convergence between and among technologies so autonomous platforms, tesla is going to be talking probably more about this now, at its march 1 analyst day. autonomous platforms are the convergence of three major innovation platforms, robotics, energy storage and artificial intelligence those are three different s curves, and they're going to feed one another i think it's going to be pretty explosive. >> why have you been getting out of nvidia? it's considered one of the biggest beneficiaries. you saw the enthusiasm for earnings when they talked about the a.i. lead that they have. >> yes we like nvidia we think it's going to be a good stock. it's priced -- it's the check the box a.i. company, and rightly so we own it in other of our funds, arkq, arkw, some of our japanese

mutual funds we own it. but for a flagship fund where we've consolidated towards our highest conviction names, part of that has to do with valuation. nvidia's valuation is very high, and on a five-year look, i think it will be fine, but some of the stocks we have in the portfolio, the top five, that bob mentioned at the outset, they have proprietary data, including tesla, billions upon billions of miles of real-world driving data, that nobody else has most of our companies are going to be sleepers because of that proprietary data chatgpt, if you've been reading about it, is really scraping the internet from all its history for information. it is the proprietary data that companies have that it's going to make a difference the other thing that a.i. is going to do, the killer app, is cutting costs and increasing

productivity dramatically. pretty exciting. >> disinflation taking away jobs. >> all of these technologies are deflationary but it's good deflation because when you cut costs and prices, you increase unit growth we think we're going to have some explosive unit growth trajectories during the next five to ten years. in fact, we think that if economic statistics were measured correctly, unfortunately they're a product of the industrial age, not the digital age, if they were measured correctly we think we would see much higher real growth and lower inflation because of these technologies. >> a lot has been written in recent days about survey fatigue and what an old-school tool that is, how it's adding to data volatility. >> absolutely. >> when you think of tesla now, do you wish you could have owned more over the years? do you wish you could have held on to -- it's already -- it's a

decisive winner for so much of your benchmarks. >> yes it's the only stock that is in a benchmark really in terms of our flagship maybe zoom there at 10 basis points in the s&p 500. do we wish -- no we have -- we have been criticized for owning too much actually, and it has been our largest position for the most part for years, so our conviction remains very high one of the reasons we do sell as it moves above 10% in the various strategies is that gives us the psychological wherewithal after we've taken profits to buy when it is falling to 100, which it did not too long ago. that's part of our trading around opportunities that volatility gives us. >> how are you thinking about competition that's come online in the last 12 months? >> yeah. we're very interested in the news coming out of this march 1st day, and we think it will be about robo taxis effectively

elon has said that he believes that he'll be able to cut the price of a car in half we think a robo taxi could start at 25,000. if you have tax credits, that could take you into the high teens. it's going to be very difficult for the competition to beat that in fact, they won't be able to come near it, given their current battery technology. >> not just the dealer network, not just their marketing costs, just the battery >> the battery is critical, and elon's writing down the consumer electronics battery curve. other automakers chose a different curve that was higher costs to begin with. they're writing down a curve but elon, because he's innovating in battery technology and we'll hear more about that as well, is we believe three to four years ahead of the competition, which means for the same power and range, another company, if they wanted to price

at the same level as tesla, will have to lose money, especially if he cuts prices in half. >> if they're so ahead of competition, why does he have to cut prices >> this is the beauty of innovation he's following a learning curve. the drive trane is following a learning curve for every cumulative doubling and the number of vehicles produced globally, costs decline 28%. so he's past pasing them along. as prices have come down his margins have gone up he's enjoying economies at scale. we believe margins for tesla are going to become explosive with autonomous mobility. >> well that's the other knock against your call, which is the robo taxi thing hasn't happened, and when it comes to autonomous leadership, tesla itself had to recall hundreds of thousands of vehicles because of their, i don't know, they recognized the

nhtsa safety report they've been mismarketing their self-driving feature. >> think about that recall quick over the air software update that's different and the first point, autonomous - >> not great though. >> but over the air software done you didn't have to waste time taking your car in to the dealer and so forth in terms of autonomous, we believe that tesla will launch a national service that's what all the robots that we're driving right now have been doing for the past five, six, seven years, collecting data, so he will be able to do that he and tesla and the broader team this is not just elon. autonomous is proven out not by tesla yet but cruise automation which is gm's subsidiary and they were able to launch in 90 days what it took them nine years in san francisco they launched in austin and

arizona within 90 days so as always, in the early days of innovation, it goes slowly until all of a sudden it takes off. >> so wanted to ask about your other calls, cathie, including some of the zoom is out today. twilio some of these stocks that have been considered pandemic winners, they got such high valuations, which helped you fund during covid, so much business, and now there's a lot of giveback and they're cutting jobs and trying to rationalize their costs and their revenues are declining. why do you still stick with these companies and buy them on the dips, if it's hard to imagine they could see better days >> we're looking at what these companies are doing with artificial intelligence, and how much data they have to use proprietary data, that no one else has we think they are two of the best positioned. if you look at zoom's patents in the last few years, they are roughly the patent pending or

patent applications, almost half of them are around artificial intelligence and eric, the ceo, he started web x. he knew that the -- that enterprise communications was going to move from hardware centric and on prem, think cisco, into the cloud. he, zoom, and microsoft, are going to take this market. it's a $1.5 trillion market per year and so when people say oh, well teams is going to kill them no one is going to rely on just one service for communications we do believe that zoom is very creative, and with artificial intelligence, it's going to do -- is going to deliver some very interesting products and services over the next few years, especially when it comes to salesforce services. >> of the silos of innovation that you watch, and you talked about them for years, is blockchain still considered one of them? has any of the allegations of

fraud or regulatory risk made it maybe the least favorite son for the moment >> no. >> thinking about coin right now. >> we think what happened last year proved the point. sam bankman-fried didn't like bitcoin. why didn't he like it? >> completely decentralized, transparent, he couldn't control it ftx and celsius and 3 ac, completely opaque and centralized. those were the companies that went under the blockchains, whether talking about bitcoin or ethereum, and many others, they didn't skip a beat transactions did not stop. and i think that has given us a lot of confidence that actually they're on the right track we think there are three revolutions taking place simultaneously there's the money revolution, which is mostly bitcoin, ether there is the financial services

revolution which is ethereum as is this notion of digital property rights. first time that's web 3 digital property rights with an economics background i know that best way to lift people and countries out of poverty, is to give them immuneble property rights we think that web free is all about bringing digital property rights into this new world. >> i also wanted to ask about twitter because where you do own it in the venture fund which you launched, public and private equities word last night there are more twitter layoffs. that he just continues to shrink the size of the workforce. how do you think it's going? >> i think he had to do some radical cost cutting, that it was completely bloated, and so he's cleaning house and we do think he'll bring in another ceo once he's cleaned house. we do believe that twitter could work up into a super app

remember, he got his big start in the payments industry, and so i think we are looking at the possibility of twitter evolving into something more wechat like. wechat and wechat pay like than most people understand right now. >> i think one of the people to go last night was the head of twitter payments, which was one of your great hopes for this. >> yes i'm sure there is a reason for that and we will find out, and maybe it has to do with blockchain technology. >> finally, we bring you on, we've talked so much about the correction in names that sara mentioned. has any of that experience say over the last year and a half, two years, changed the way you approach your strategy your framework? has there been any learning curve in that for you? >> so if you had told me in early '21, i remember being on your show in early '21, if you

told me that we would have supply chain problems for not one year, but two to three years, and that we would have a war in ukraine fif i had known that, what we would have done is increased our weighting of what we callcash-like innovation names. in this case, it would be an apple or nvidia i would put in that category. very safe, robust, definite story there and so forth instead, we did what we always do, and we concentrated towards our highest conviction names, which i think will work out. i think when history tells the story, this shock, the supply chain shock, that we went through the last two years, will prove to be transitory i know that's a dirty word now but when i see money growth rates dropping at -- over the last year, i think the growth rate in the money supply has dropped 30 percentage points

you go back through the 1920s, the depression, we never have seen anything -- i think by the end of this year, people will say oops, maybe they overdid it on the other side. >> on m 2 and rates. >> m 2 and rates. >> i don't know. there's increasing evidence that the inflation is - >> inverted yield curve. the bond market agrees with us that inverted yield curve for some reason, long bond holders, are willing to take 80 to 85 basis points less for ten years than the short-term holders. >> well, they think inflation is going come down. >> yeah. one of the puzzling things every morning. what a great discussion. great to have you and give us time as well. >> thank you so much. >> cathie wood. >> still to come, another [ inaudible ] ahead. cantor fitzgerald howard luts nick joins us. we're up 175 on the dow. about 0.6% on the s&p. back in a minute

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stocks seeing a bit of a bounce, though we lost a little bit of steam in the last for you moments, following last week, the worst week of 2023 our next guest says the market continues to take cues from central banks and the fed's aggressive tightening has yet to derail the economy harold lutnik, the stock is soaring, also the chairman and ceo of cantor fitzgerald not sure if you heard our interview with cathie wood, her view that the inverted yield curve is telling us that the fed is overdoing it on this inflation fight. do you agree >> no. it's pretty simple the two-year note is saying that rates are going to stay up where the fed is saying they're going to stay up to. yeah, okay, the ten-year note thinks it's going to come down

we just watched the ten-year note go from 3.50, down to 3.25 now up to 4% the story is, inflation is here to stay. rates are here to stay do people think over time they'll cut back of course they do. but over the next couple of years, rates are here to stay. i've said it before, when we were together, sara, rates are here to say. >> i knew you were going to dis disagree, that's why i started you on it. this notion that there's going to be a hard landing, do you think with the fed here to stay, higher rates, that that's what's inevitably going to happen >> look, the economy is showing it's doing pretty well it's shockingly doing pretty well inflation is here to stay. you go to buy eggs, it's unbelievable the prices are extraordinary you go to a restaurant, you go anywhere, the cost of goods and services is just higher. inflation's here to stay, but the economy's doing pretty well.

so, it feels like there may be a little recession, but it's going to be lighter than people think. feels pretty good. unfortunately, just inflation is here to stay, otherwise the economy's doing pretty good. >> counter to what cathie wood said. >> the ultimate bear/bull debate. >> our stock is up 10% today and hers is sort of flat >> howard, what about shelter? at least rent. isn't that something that if it does tip, the conversation changes? >> well, look, the idea of multifamily is doing pretty well the reason multifamily does pretty well, inflation is there and workers are making more money. rents, which are multifamily, rental buildings, they raise the rents every year the question is, will the workers -- people living in multifamily renting, will they have the money to pay a little more rent? the answer seems to be the market saying yes. so, it feels like if service

fees are up, rents will be up, multifamily will hang in there better than people think that's the feeling that inflation will go through multifamily not as much through office it will be a little trickier but multifamily seems to be hanging in there pretty well. >> what are you doing, howard? where are the opportunities for you if you think inflation and rates stay high and the economy can escape something more dreadful like a hard landing >> look, so bgc, our public company, bgc partners is one of the world's largest wholesalers. for 14 years, 14 years, zero and near zero interest rates meant volumes were anemic in trading volumes. the banks didn't trade much volume, the trading arms were doing. so bgc is a growth company the relationship vast issuance of trading volumes back, so

what's happened is over the last three months, bgc has taken off and all of a sudden people realize, oh, my gosh, 14 years of tough times, now will be better times you always knew this, always a company that does well when interest rates are back. now that's why you have me on the show, because somebody's happy. that's bgc partners. you'll see our business grow our investors haven't seen how great the company was for all these years of zero interest rates. now they'll see it relentlessly as we go forward. >> really quick, howard, you're also chairman of newmark, commercial real estate, i always ask you about that, too. you mentioned office is going to be tough i'm just wondering how tough the rest of the market is going to be if interest rates are going tostay longer and if we readjust, how high they're going to go? >> what you're going to see, as we talked about, b&c office, less attractive office space, it's going to have a tough time of it. and you're going to see it

repurpose. you'll see it repurposed it might be -- once upon a time there was no such thing as a loft we all know the concept of a loft that was local manufacturing, putting things together in cities i think that's going to come back i think the term b and c office into either multifamily or it's going to be light manufacturing. so, people are going to come up - >> howard, i'm sorry to cut you off, but we're out of time we always appreciate your commentary we'll be back.

good monday morning, i'm sara eisen with carl quintanilla. setting the agenda today, cowen ceo jeff solomon as the two-year yield reaches its highest level since 2007 and wolf research teases rate hikes. mark mobius with us, his bold global call. later rockefeller's ruchir sharma says the classic stocks are a bubble. dow did have early session highs, up 300-plus