assembling a team to bring forward the a.i. offering. it is tuesday, february 28th "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. let's look at what is happening with equities as joe mentioned we have seen green arrows this morning. modest advances. right now, the dow is indicated up over 50 points. s&p futures up 5 the nasdaq up 14 it is the last day of february let's look at the major averages for the month of february. the dow is down p3.5%

nasdaq down 1% s&p is down 2% that means the dow is in negative territory s&p is still up by 3.7% for the first two months of the year nasdaq up 9.5% year to date. if you look at treasury yields, this is the interesting move especially over the last week or two as it becomes more evident that the fed has to keep rates higher for longer. the 10-year treasury is 3.96 to 2-year treasury at 4.8 the dollar with the strongest week of the year last week is due to inflation numbers that were stronger than expected in europe both in france and spain the expectation is the euro will have to raise rates aggressively you see the reversal for the do dollar. let's talk about shares of zoom they are going higher. up close to 6.5%

earnings of 1.22 per share revenue beat executives said clients were looking before agreeing to pay zoom for services. some organizations have decreased the number of seats for zoom software as the expense pullback guidance is short of estimates earnings guidance was above expectations quarter guidance beat. cfo kelly steckelberg will join us at 8:30 the big question with the earnings report like that is the expectations have been lowered by so much not that they sandbagged the quarter. i think there is a lowering of expectations >> the stock has been down the last year as people have come back to work >> you know what the high is >> 125 >> 550 >> going back further. >> the high for the pandemic

up to 78 >> life is relative. >> just commentary on that look at the chart. a dcb. it's okay. it's up 6. put a lot of them on there 550. it is up 6%. we are watching shares of occidental earnings of $1.61. the company announced a 30% increase to the dividend in the $3 billion buyback program shares of workday are lower. earnings of 99 cents a share revenue was higher than expected the company expects subscription revenue to drop from annual rate of 22.5% to 17% to 18% for the fiscal year. w workday chairman told analysts

that the company would double down on a.i. and machine learning meta will create a product group inside the company focused on a.i the ceo mark zuckerberg said it will combine several teams organized under crisihris cox it is organizing apps and images for instagram. you have to wonder if this was a year or two ago if he would change the company to a.i. instead of meta. >> making strides in tech land it is generative. that is a positive. >> you will be friends with a bot. that is all where this is headed everyone gets a friend >> think how we are now and how

weird it gets. the article where the bot says you love me. i know you're married. >> you had a lousy dinner with your wife and you want to leave here. >> that is generative a.i. >> i'm saying it is mirroring or taking language -- it has read language and taking that language that it has read and seeing that the response you respond to a certain question with that response >> if you are a neurotic weirdo? >> the way they are telling people that people who are beta testing, you are not allowed to ask how it feels >> to get to that answer, you have to continue to push it and push it and push it. its natural nswer.

>> it finally snaps. if you can get into emotion like it is fed up i'm afraid i can't do that -- dave, open the pod door. you are stuck in infinite space forever. robinhood received a subpoena in december from the fcc. it was related to the listing of platform operations. robinhood has a similar request from the california attorney general which says it is cooperating with the investigation. >> they got this at least two months ago it is the last day of february why are we finding out now >> i don't know. we knew about the california one which has been around. i don't know the answer. i don't know if you think that is material or not material.

>> the s.e.c. filing now it is two months later in similar news, cryptocurrency news. coinbase is uss exsuspending tr march 13th internal review determined the busd no longer met the standards and would be uss suspended. binance is planning a lawsuit over allegedly violating investor protection laws the binance selling cnbc that the products will enter the market in non-u.s. dollar such as the euro and assume the global leadership direction that they used to dominate. a bit of threat going on there

i don't know if it will prove to be true. we will talk about this because we have a interview with coinbase's ceo brian armstrong he will be here at 8:30 a.m. and altria is in talks to buy a vaping start up njoy this is a wall street journal report that says this and the deal could be announced as soon as this week altria paid for a 35% stake in juul in 2015 before juul became embroiled in lawsuits with the federal regulators came close to filing for bankruptcy last year altria now values juul at $714 million. n njoy obtained clearance to sell

in the u.s have you ever spmoked? >> no. >> no. >> i smoked. when i was much younger. >> every day smoker? >> yeah. like when i was 23 and a stockbroker. marlboro reds. a lot of people switched to marlboro lights, obviously they were $3 a pack. you know what it costs in new york city, sorkin? >> more. >> $15 for a pack. if you watch anything 10 years old, a movie or series, people still act like -- oh, dude i got to have a cigarette. normal people. lawyers. it is not like that.

i see someone smoking now and i wonder what you're thinking. >> did you not get the memo? >> right are you weak or something? you can't really just finally do what you need to do? then people with the patch that's really people that love nicotine it loves the idea of a new delivery system for nicotine a useless compound to put in the bloodstream. >> juul got in trouble because they were marketing to teenagers and kids >> a new delivery system you don't need >> yeah. >> nobody needs to deliver it in their system >> the argument of the maker would say we're a way to get you off the hard stuff of the marlboro lights or reds. the flavored ones are marketed to teenagers and they are the ones who pick it up and you see

a new market. >> you saw crazy woody on "snl." he is bonkers. he is out of his gourd he tries to get to noon without making a big bone. he has a lot of issues and a vegan. that would be hard i want to enjoy some food. i don't want to eat plants >> there is a lot of plant-based alternatives >> you think about anything else, andrew >> no problem. no problem >> no comment? >> no comment. i got nothing. >> really? you're a morning tv host >> zero. zilch. >> go get coffee. retailer target is set to report at 6:30 a.m. eastern time we will have the numbers and

interview with chairman brian cor cornell. you are watching "squawk box" and this is cnbc >> announcer: this cnbc program is sponsored by truist wealth. where meaningful relationships matter most. you'll always remember buying your first car. but the things that last a lifetime like happiness, love and confidence... you can't buy those. but you can invest in them. at t. rowe price, our strategic investing approach can help you build the future you imagine.

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markets, but ending the down month. today is the last day of february broader averages held off to modest gains let's talk more about the markets right now with cameron dawson chief investment officer and greg branch. greg, you have been concerned for a while now about the markets. you think we have seen the hig levels for markets for this year and you are concerned about the fed. >> more specifically, my concern is that the fed seems to be pointed down one road and the market seems to be pricing in a different scenario i think that is still the case that was my position for the first few months of the year while we rallied at the end of the day, 450 basis points from the fed has not affected unemployment in the way they wanted. remember, the fed position is services inflation is our most poignant danger at this point.

wage growth spurs services inflation. the fed postulated 4.5% unemployment rate to curtail inflation. maybe it is 4.3. maybe it is 4.2. a lower unemployment rate than the case than we began the hiking cycle you saw the fed coming out hawkishly in the last couple weeks, they noticed the disconnect they are trying to close the disconnect of the market discounting which is 75 from here to what the fed will likely do which is probably more like 100 to 150 >> you think we have seen the high water mark for stocks this year that is probably the most surprising take? >> i do. until the market and until c consensus starts to come around to the fed view and my view, i think these market levels are inf inflated the equity indices are too high

and yields too low if the reality is if we have another 150 points before the terminal rate, then estimates are too high estimates would come down dramatically in quarter and it wasn't enough. we started mid single digits with the quarter ending and negative 3%. quarter will end negative 5% maybe the first two quarters is single digit negative in line, but looking at double digit growth in the back quarter that is probably wrong at 150 basis points we have the downward restrictions which are a headwind and the market reconciling a higher terminal rate than it is currently discounting. i think those two things will take the market down as investors digest that. >> cameron, you are concerned about the stocks too you are worried about margins.

you are worried about the inflation picture impacting companies. >> we think as inflation moderates, that would be the driver of falling margins for s&p earnings it slows revenue growth with less inflation you have less pricing power. we think there is a chance that margins essentially correct back to the pre-pandemic levels we started to see the dynamic in the fourth quarter of earnings where we saw revenues still growing about 4% earnings fell 5% all because of the 100 basis points of margin compression. as we move through 2023, we could be in a scenario where we may not have an economic recession where we see revenue growth, but could have an earnings recession simply because of the margin dynamic. that means we still have the constant march lowerer in estimates. >> do you agree with he razises.

we traded to nearly 19 times earnings that is on an earnings number that has since been cut. 19 times is extraordinarily expensive in the back drop of the fed that's still tightening of liquidity that is still bec becoming scarce. if we don't get a change with fed policy, it is a difficult factor to go past 19 times in the liquidity environment. unless there is some kind of upside surprise on the earnings front, or on the policy front, that high may be what we're st stuck with and it might mean we are stuck in the sideways chop for the remainder of the year. >> cameron and greg, thank you both when we come back, more ahead. target ceo brian cornell will

bring the earnings and goldman sachs ceo david solomon. we are live from the investor day in just a bit. "squawk box" coming back with that >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. look! what's up my trade dogs? you should be listening to me. you want to be rich like me? you want to trust me on this one. [inaudible] wow! yeah! it's time to take control of your investing education. cut through the noise with best-in-class education resources that match your preferred style of learning. learn your way. not theirs. td ameritrade. where smart investors get smarter℠. ♪♪ we all have a purpose 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,

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black americans represent less than 5% of residential real estate developers. one issue is equal access to capital. a new program is looking to even the playing field. we have diana olick with more. >> reporter: joe, anyone in real estate knows capital is key to development. accesses is not always equal a program in philadelphia is offering black and brown developers a unique opportunity to build new homes and businesses christopher pitt understands the value of the home more than most >> i grew up in the two bedroom shack. ten people showing up.

no gas limited electric outhouse >> reporter: he has been working in real estate for 20 years developing affordable housing, first in delaware and maryland, and some in inner city philadelphia >> how do we flip from high rental to homeownership? that is where generational wealth happens >> reporter: after two decades in the business, pitt has trouble getting capital for projects. >> it was hard people like to do business with people they have similarities with i don't think it is enough minority leadership. >> reporter: after years of self funding and borrowing cash at sky high rates, pitt turned to philly rise. a program designed to recruit, train and support and open up capital to black and brown developers the goal produce 50 new single the family philadelphia homes annually for the next five years. >> the issue is balance.

we are trying to correct that imbalance by taking away the barriers for no reason to say no >> reporter: tom webster calls it a real estate accelerator >> our goal is not to teach them how to rehab or build new houses, but how to build successful real estate businesses >> reporter: that means teaching them how to access capital and work the system to win city projects >> bankability and credibility this goes to bootstrapping to certified financial documents. i'm saying it is okay, bank. i have the paper work in place i know my numbers. reducing the risk. >> reporter: each program participant must be an experienced developer and have 5% of own capital to commit. phillyse -- invests 10%.

>> the motto we hear can be replicated in any market and become a solution to neighborhood regeneration and instead of outside community gentrification >> reporter: philly rise is partnering with the urban land institute. the largest organization which the online university providing the program at a discount. webster says philadelphia needs about 35,000 new housing units over the next five years he sees it as a huge opportunity for black and brown developers joe. >> diana, thank you. appreciate that. coming up, target set to report we will bring you the numbers followed bthy e interview with ceo brian cornell. we'll be right back. unpack once and get closer to iconic landmarks, local life and cultural treasures.

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good morning welcome back to "squawk box" here on cnbc live at the nasdaq market site look at the futures now. dow up 43. nasdaq up 16 s&p up 5 points. we also have earnings news coming out as we speak becky. we have target out with the earnings earnings per share better than expected for the fourth quarter. 1.89 against the 1.40 that the street was expecting

ref evenue better than expected both for the first quarter and full year guidance better than expected the 2023 outlook talking about a wide range of outcome was the uncertainty with the economy and consumer they are talking about comps from down to low single digit to up low single digit. operating income is great. 4 to 5%. the first quarter adjusted earning per share of 1.50 to 1.90 a wide range, but below the street expecting of $2.14. for the full year, the same thing with comps low single digit to up low single digit up to down. operating income growing $1 billion or more. it is the adjusted earnings per share that is going to be a hit. the reason you see the stock off 4.48% right now. they are talking full year adjusted earnings per share of

7.76 this is a takedown of ex expectations for the full year they are talking about being cautious this is the same thing you heard from other retailers, too. the story from moving from inventory which is a problem this year to talking about margins which is a bigger issue. >> one is macro. they are both macro. one you figure other companies manage inventory better than target that is something target is trying to get a grip on. now is this more macro >> they talk about the mix changing you are looking at discounts and promotions being bigger. you talk about the strength in the fourth quarter food and beverage and house essentials are larger than disc disc discretionary. beauty is a different part of the business. >> where is it like pepsi >> i don't have the answers.

we will ask brian cornell with the inflation picture. inventory levels down 3% discretion down 13%. that tells you what the consumer is buying. electronics is what we heard from others. electronic weakness. that is the higher margin things they were getting. yesterday, we talked to the analyst that the ebit margin rate is 3.3% in covid, it was 8%. nort normal time is 6%. it shifted >> we talked about zoom during covid. $250 stock during the pandemic >> the numbers were very strong for fourth quarter >> walmart was down as much as home depot that day. >> the traffic up 0.7% same day services up 3%. that is shipt or pick up in

store or pick up in parking lot. they gained a huge amount of revenue. revenue up again this year it was up for the year 2.9%. you are talking about $30 billion of additional revenue coming into the store since 2019 they won market share. they have new commeustomers we heard this from walmart last week and we heard from home depot. the question is what the consumer is willing to buy and how much they are willing to spend and what it means for margins. they have a meeting with investors later today. brian cornell thewill talk to u first. he will talk to investors about the plan the same store sales guidance is wide from down single digits to up low single digits for the first quarter and full year.

>> historically they do better than that? >> i think it depends. during covid, it was bonkers >> i was trying to figure out what is inflation and margins and what is real jay? it's crap py wide swath of u.s. consumers interest rate increases are starting to take hold. >> you say how much market share? >> huge amount they are now $109 billion for the year that is more than 2019 that's a huge chunk of change. they have a much bigger sales figure coming in the question is how much -- >> how much of the $30 billion is inflationary? >> i would say half of the

gains. this is standard for retailers not just target. retailers we have talked to in last year, same-store sales gains were because of inflation. the other half was the strong consumer. >> did they take business from walmart? >> they say they are stealing from everybody >> customer acquisition costs all the time they get these people. was it not as profitable >> i think they want to hold on to it. the numbers, they were doing zero promotions in covid everybody was closed only certain stores you could go to and people got into the stores and bought everything there. >> i'm trying to figure out the ma marketshare piece. walmart has taken market share amazon would say they have taken market share the question is who is correct somebody should take market share from somebody else >> i like to be with one of those three if i could

>> maybe they are taking from best buy >> taking it from all of the smaller retailers? i don't know >> still rather be one of those three. >> look the it right now the stock down 16% maybe the market is taking this in stride thinking that they are extra cautious with this i don't know it is early hours. we'll talk to brian cornell. >> they did not like the inventory issue. for two or three quarters. >> it is getting better. >> total inventory is down 3%. we'll see. when we come back, we will take you live to washington, d.c. where a new committee on china is set to meet later today. we talk to one of the members of the committee next. later, goldman sachs ceo david solomon in the first on cnbc interview he will be live from the banks investors day downtown i'll head down there during february, we are celebrating black heritage month

with the contributors and leaders in business. here is roger ferguson who is the former vice chair and cnbc contributor. >> my heritage and culture being an african american male has had an impact on my career the main thing it has focused in on areas where blacks have been disadvantaged. the focus on financial security and literally and retirement savings. those major topics it is important for everybody, but particularly important for african americans who, you know, have been forced to be at the bottom end of the income and wealth spectrum. anything we can do to overcome all of those years of heritage discrimination is really important.

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welcome back to "squawk box. the select committee in the u.s. on china is being held tonight chinese human rights activists will be at the committee joining us now is congress member jake. good morning what are you hoping to find out

today? >> good morning. thanks for having me on. this committee is about competition and the competition is values. the chinese communicst party doesn't believe in value those truths while self evident, are not self actuatingi we have to look at the expansionist with the aggressive ccp. secondly, put for policy recommendations where 70% of congress can get behind and build a supermajority around. >> what is the u.s. policy and economic goal should be here let me put it in context given we're always talking about business on the show if you starbucks or nike, name

your company that is -- or tesla, that does enormous business in china. what should you be thinking or doing? >> i think it is helpful to do a discreet example here. i returned from taiwan where semiconductors was the focus of my conversations we are in a moment of critical competition around semiconductor manufacturing. the united states leads the world in chip designs, but not manufacturing. korea and taiwan are pre-eminent. we need to moake sure we design and build our chips. china on the lagging edge of manufacturing those chips is looking to plooflood the market those are the chips that are critical for military and industrial applications. if they flood the business in

eastern foundrys, china could have a choke point with the chips that are integral to the military applications. everything from white goods to the kitchen to hypersonic missiles that leverage the ccp has over the world is unacceptable. we are looking at different sectors with the chokepoints >> let's stipulate or suggest you are right and this may be the future that or challenge ahead. again, i go back to the question of all these u.s. businesses that are doing business in china, apple among them, what are they supposed to be doing? do you see a day or moment that looks to you like, you know, what happened in russia when, you know, starbucks and mcdonald's and every american company closed up shop how much of a complicated

possibility is that with the economies with china >> china's ten times bigger and more integrated than the russian economy is to your question, diversidivers. this is not a strategy that will rely on protectionism. i don't think we want american business to entrench behind the two oceans we need to diversify supply chains the united states needs to engage with latin america and southeast asia we have to build strong ties of trade and investment and information exchange that creates diversified supply chains that helps contain chinese communist party to ensure they don't have leverage. >> are you on tiktok >> no. >> you got kids? are they are tiktok? >> you asked if i'm on tiktok?

>> i asked i am on tiktok my kids want to be on tiktok i was curious what you think should happen. >> i'm looking at that right now. i have deep concerns of tiktok on a number of fronts. one tie to the ccp and data sharing there. and two, as a father of young kids, the affects on children's emotional development from the algorithms and how they hook kids and monetize the attention span all social media companies, tiktok included, needs to be on the hot seat >> do you feel the same by tiktok the same problems about tiktok, because i have kids, with youtube. you can look at instagram, et ce cetera >> i have a problem with any social media platform that looks

to monetize children's attention spans. the range of8 to 18 is important for docognitive development. these social medias do not have our kids lives in mind particularly within taiwanese youth about the ability to withstand chinese aggression >> final question. maybe to start where we began. you just got back from taiwan. if you are a betting person and i don't know if you are or not, five years from now, do you believe china will takeover taiwan >> i think the more likely scenario in the near term is not amphibious invasion. i don't discount that fully, but the combination of the energy blockade and disinformation

campaign you could see the pla blocking taiwan they have two or three weeks of reserves doing so, launches a disinformation and influence campaign to erode civility on the island that is a big concerning threat. >> we have to go i'm getting called i have to ask this u.s. government obviously subsidizing chipmakers, but saying we are subsidizing chipmakers if you provide child care and other social benbenefis given security concerns you have, does that square >> yes child care is infrastructure and we need to be holding companies to account if they are taking taxpayer dollars. >> total corporateism there.

that is the same -- i don't know you don't think that is a bridge too far? you can't just say child care is infrastructure that is not what people think of, jake, as infrastructure. >> i disagree. my constituents need child care to become productive workers. >> if we could do things across the board. calling it infrastructure doesn't obviously call it entit entitlement. >> congress member, i know we ran long thank you. coming up, bob iger's first is 100 disney's ceo. "squawk box" will be right back.

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disney's political battle in florida taking a turn, and ron desantis giving the state control over the former governing district, and in a book he said disney to stay out of the battle that critics dubbed the don't say gay bill. lets bring in variety co-editor in chief i guess there's stability, but stability is at two years at best, less than that now, at issue, and the answer to

streaming, and i will throw hulu into that. >> it's interesting it has become pretty clear over the last 100 days that one of the big decisions hanging over iger is what do you do with hulu, and the entertainment industry was surprised to hear him on the last earnings call hint -- and in an interview on cnbc, hint that maybe they would sell the hulu, and that would that change the range of shows it produces the question of hulu is not unconnected with the big other question mark hanging over that burbank lot. i think it has become clear that

two-year timeframe that iger and the disney board is serious about it, and the decision of what he does with hulu is not unconnected of who is going to leave disney in the future >> when will he says wow, it's everything we wanted does that mean the restructuring is anything anybody would have possibly wanted, does it go far enough >> as soon as he walked in it was expected he would undo the unusual restruck kturing by the previous regime, and the people he put in place were the perfect people to help calm the situation where it had been very unsettled, and whether it's a bake-off between the two, that remains to be seen >> did it go far enough in terms

of -- i don't know what to call it, rationalizing operations obviously when you are chasing streaming subscribers, you don't know how long that is going to last until it pays off there's a lot of decisions the company has to make about profitability. is it on a better path to better profitability? >> i think you have seen a marked pullback in the level of ambition and spending and the level of marketing spending, and don't forget marketing costs are enormous and they never go down. you are definitely seeing tapping the brakes especially on future projects, and disney was lining up big projects going out for years, and there's a curbing for that

there's no magic wand, and disney's recent earnings, they were not great and the expenses are huge the managementover that, the next couple of quarters, that will say a lot in hollywood people were surprised the pelt situation went away as quickly as it did >> bob iger was a great builder, and we will see -- it's not that he is not building anymore, but it's an intrenchment coming up after the break, brian cornell will join us to talk about the company's earnings and guide kwruance fore

year the stock is up by 4.9% right now to $175. "squawk box" will be right back.

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good morning target results are out the ceo, brian cornell, is here to talk about the state of the consumer and much more we are going to talk supply

chain and inflation and more with one ceo then loan forgiveness heads to the supreme court the second hour of "squawk box" begins right now good morning welcome back to "squawk box" right here andrew ross sorkin along with becky quick and joe kernen we have a lot going on this morning. a couple big interviews, and earning news coming out with target the dow is up 73 points right now. nasdaq up, and take a look at treasuries the ten-year at 3.947.

shares of apple today could be active. sup supplier fox link said it's likely to resume production after a fire the factory was engulfed in a big fire yesterday that led the building to collapse to the ground, and apple recovered somewhat from weakness and shares of zoom, after the company beat on the top and bottom line, it posted top and bottom beats is that even english i don't know well, zoom cfo, kelly stecklburg

will join us and then an 88% increase in membership compared to the prior here with hims & hers. target retailing postings of $1.89 a share, and the street was looking at $1.49 a share you can see that stock up by about 3.4% right now joining us to talk about it is target's chairman and ceo. thank you for being here >> good to be here >> let's talk about this you beat it by a big number in the quarter, and let's work out what is happening because you are a very important tell with what is happening with the

consumers. >> sure. let's unpack the year and then we can talk about guidance in the fourth quarter, it was our 23rd consecutive quarter of sales increases, and we are continuing to see strong traffic gains across our business. if you look at the full year, during the pandemic we had almost $30 billion in top line growth, and we have another $3 billion of growth in 2022, and it was because of strong traffic increases. we grew unit shares across all merchant categories, and from a spending standpoint they are leaning into household, essentials and beauty. but while there has been softness in discretionary

categories, and if i look at that discretionary spending, we still had growth we are making sure we make the right choices, but we will manage and lean into what they are spending on today. >> you have had to do a lot to clean things up, and right now you are dealing with inventory 3% in total. >> one of the last times we were together we were talking about inventory. go back to the middle of 2022, and we realized consumer habits have changed, the way they were spending during the pandemic and pw buying tvs, and now they are buying necessities

we took a bold action, and we f finished the year where we wanted to be inventory is down 3%, but discretionary spending is down we will lead into the categories where we are seeing the biggest growth, which is right now all the frequency categories, the household essentials and beauty. we will manage cautiously the other part of our portfolio. >> let's talk about the guidance people are wondering, are you being excessively cautious for the guidance you are giving. you are talking about numbers of $1.50 to $1.90 the street was already at 9.23. >> i think we are being appropriate with the guidance.

we know inflation is high and being stubborn, and interest rates are rising and we are going to watch the consumer carefully. we are taking the right steps to plan appropriately, and taking the right steps to plan accordingly. some of the things we are seeing, and it's not just buying household essentials but we also recognize consumers are looking for newness, and the actions we took with the inventory allows us to make sure we have new and relevant inventory at all times, and you will see a lot of new items in apparel and home and seasonal categories, and it will compliment our strength to make sure we are driving traffic by having the right items at the right price every time you shop. >> if electronics have come

back, what categories in discretionary are leading? >> some of the spring apparel, bright and new colors. guests continue to enjoy the seasonal moments we have to make sure we have the right inventory in place, and we recognize consumers are on a budget right now and are buying the necessities first, but are still shopping for themselves. having great items and great new necessary at the right time and price will deliver >> we were talking, joe and i, if you are stealing market share, who are you stealing it from >> it's part of the portfolio. 20% of our business is in apparel, and 20% in home, and 20% in toys and electronics and sporting goods, and 20% in beauty and essentials and 20% in

food over the last three years, we have taken billions in market share over each one of those categories because of our model we are driving traffic. i think the most important indicator in the health of our business is not only did we grow comps for 23 straight quarters, but it's driven by traffic in 23 straight quarters. guests are utilizing drive-up and same-day services and that's now 10% of our total business. it gives us a chance to make sure we are meeting the guest in all of those categories, >> toys "r" us, and bed, bath & beyond -- >> yeah, as changes take place in the industry we will lean in and make sure we are that alternative and are picking up that traffic, and adding to the

basket where somebody says target is a great to shop for the home, and they have the toys we can flex in the trends, but we can give you everything you need in one location >> i spoke to an analyst and one of the things they said what they are watching is margins, and it's not the inventory because that's in control, but it's margins that are around 3.3%, and that's down from 8% during covid and 6 percent-ish for normal times >> during covid there were no discounts. everybody was selling exactly what they had on the floor i think we're on a multi-year journey to get back to prepandemic margin levels. right now mix is certainly impacting margin we are selling more lower margin

items, and less in apparel and home but that will moderate over time we are going to step forward in 2023 and improve our income, and we will see eps improve by at least $1.75. hopefully a normalized environment as we move through this year. >> what do you see in terms of labor issues are you able to hire how much do you have to pay people >> you know going back to 2017 we took an industry-leading position with starting minimum wage, and we said we were going to get to $15. depending on the market, our minimum starting wage was between 15 and as high as $24. that's going to attract and retain team members across our system we made big investments in wages and benefits and debt-free educational assistance program, and that has allowed us to retain our team and give an

opportunity to build a rewarding career at target >> back to the idea if you are at 3% margins at this point, how do you get back to the 6% normal >> we have been making investments over time, and that's something we are committed to, and we are going to continue to make sure we are invested in our team when we think about adding over $30 billion of growth, it has all come down to the work our teams have done to take care of our guests each and every day. we are going to make sure we are investing in our team, and it will provide the return on our investment >> what are you going to do if you are looking at ways to make things more efficient? >> we will talk about that later today. as we think about the scale we generated over the last few years, and now it's time to step back and say, okay, how do we find greater efficiencies, and we will spend time talking about how do we add simplicity and take away some of the complexity

so we can continue to provide great service to our guests. >> what is an example? >> think about drive-up. i know you have experienced it we have seen a tremendous acceleration in our drive-up business, and years ago we started in the back room and clip boards, and we have added technology, and pick batches of orders and remodeling stores, and when we do that we are building mini fulfillment hubs in the front of our store, and in some cases we have canopies out in the parking lot, and so it's clear we are in that type of business, and the teams, they go to the store and they find that order and walk through a dedicated door to your car the lanes in our parking lot, they are numbered, so becky quick is in lane number 3, and our team member can find you immediately and put that order in your trunk.

now if you want a cup of your favorite starbucks coffee, we will bring that to you in the parking lot, and you will say only at target, somebody will bring my order while my kids are in the backseat and also my favorite drink from starbucks. >> in terms of hiring and shipping, what do you have to pay in exexcess? what do you think you will have to pay >> inflation has been stubborn it's down, but it's still a factor and still impacting the consumer and spending so we have to watch that carefully. it's impact bg costs and transportation we are still faraway from a normalized environment >> let me ask you broadly, theft

shrinkage is a retail problem at large, and the walgreens down the street can't keep things in stock because people walk in and rip it off >> it's close to a $100 billion issue. it's less about the financials and more about safety, the safety of the guests who are shopping in our stores and the safety of our team we are very active at the national level and state and local level to make sure steps are being taken to curtail these issues, but there's a financial component to that. what i worry about most is the safety of our team and our guests, and that's what we are focusing on. >> what is the financial component? >> we talked about it in the past, and it's materials for us, hundreds of millions of dollars, and it's something we have factored into our guidance as we sit here today >> thank you very much for being here today >> always good to be here.

>> brian cornell, the ceo of target joe, back to you is an electric dodge ram coming we will speak to the owner of the ram brand about its push into evs in the company's turn around ldn chen in the next hour, gomasas david solomon will be our guest "squawk box" will be right back.

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yeah, of course. hey, phil. phil -- >> we're on tv >> phil is here with a special guest. coming up, that special guest is stellantis' ev push. later, the ceo of food giant, smucker, joins us to talk about quarterly results. "squawk box" will be right back.

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ever better. years scrambling to get stellantis into position to compete in evs, electric vehicles, the ceo joins us with another "squawk" interview >> carlos, you are announcing a

new ev investment, three plants in indiana, battery electric motor production, and it raises the broader question as where are we, in terms of you guys, s s saw hrapb tuesday. indeed we are bringing our electric driving models with a $155 million investment, and that means more than $3 billion invested in indiana over the last couple of years since 2020, so a significant investment in the journey. we are currently selling '23 ev models around the world. by the end of '23, we will be at

32 models. by the end of next year, we will be at 47 ev models around the world, and the offensive in the u.s. starts now. >> tesla's head start is so great that you are behind gm and ford as well, and it's going to be tough for you guys to catch up >> we love competition we are racers. we love competition, and we know what our contenders are doing with intelligence and now we know what to do better and that's what we are going to show to our u.s. consumers on the basis of the pickup truck that we unveiled in las vegas in january of this year >> we need more stations, obviously. a day doesn't go by where i have not read how a daughter is

driving to college and they have to plan out where, is it going to take an hour or 45 minutes? a lot of work has to be done with governments in all the countries you operate in >> yeah, we first have to have clean energy, and that's first, and then the second one is infrastructure -- >> you need clean energy for the grid, too, carlos, and where is that coming from i know they are generating energy in china with coal. >> carlos gives us a unique perspective because of your business in europe you have seen how europe is doing adopting evs are we following the same path as europe, or are we making mistakes that you look at and say, don't do what europe did, do something different what would you say >> that's a great point. we have the opportunity here in the u.s. to learn from what is happening right now in europe.

by the way, technology is racing for the lead in europe, and our electric technology is going to be available, including the u.s. what can we learn from europe? first, that you need to have clean energy that is the number one precondition for success of course, we know what is going on in europe, and it has been a challenge to have clean energy over there the second one is people need to be getting rid of anxiety, which means the density of the charging network >> which we don't have here. >> that's what our governments need to deliver. we need to have the mobility devices which is clean, and that's our job, to bring safe, clean and affordable mobility. >> when you look at -- everybody knows we need to get the price of evs down. the average is well over $50,000. realistically do you see the u.s. market having a lot of

offerings between 35 and 45,000 anytime soon, or is this one of those things where two years from now i will be talking to joe and he will say where is the $35,000 ev >> that's the big challenge, affordability. if we want to have a significant impact on the planet, we need volumes, and we need tpo be having significant amounts of evs on the road. if we don't offer it to the middle classes -- >> when do we get that >> from my perspective, 2026 >> it's not coming anytime soon -- >> you need to ramp up the battery facilities to make sure you are efficient in the factory manufacturing, and until you get that job done you don't get the best costs >> how is europe going to power the grid that charges the evs? >> right now that's a big, big

debate in europe >> i think you have seen -- they have got one of those extension cords, and you simply plug the end into one -- that's not how it works, right? is it natural gas? >> they are going heavy on offshoring offshoring of windmills. >> that's not going to do it that's an eyesore, too that's not clean, and that's worse than natural gas >> wind is clean -- >> yeah, it's clean but there are all those ugly -- what about nuclear? >> france is back on nuclear we know there's a debate behind that >> it has to come from somewhere, and i don't know, and that's why -- that's one of the euro mistakes that, i think, you are eluding to, phil >> we need to start with the

clean energy and infrastructure. >> we have problems with our grid we are going to have blackouts in the next couple of years. >> thank you for being here, carlos >> bring me something from sentra, because i didn't get a souvenir >> cookies, and wine -- >> yeah, wine i can bring also we can share it here >> we can share it here, because it's 5:00 somewhere. >> yeah, i got a sleeping bag out there. >> we like that. still to come this morning, former white house economists says the economy is headed for a recession. he will tell us about the signals he's seeing right now. plus, jm smucker just out with quarterly results, and we

will talk with mark smucker. you're watching "squawk box" and this is cnbc

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welcome back to "squawk box," everybody. we want to get over to dom chu, and he has a look at the premarket movers >> outside of the great interview with target ceo, brian cornell, with you, becky, there's a lot happening with the consumer, and smucker is one of them the consumer package reported profits at top estimates the shares up about half a 1%. we will hear more later about the story when mark smucker joins us, so keep an eye on that one. and next up, zoom is around 175,000 shares of premarket volume the company reported a top and

bo bottom line beat, and the earnings guidance came in better, so those shares are up 7% we will hear more on that story, when kelly steckelberg joins us. and then naming some of the top picks for artificial intelligence by analysts over at bank of america, microsoft, meta platforms, apple and baidu, one of the chinese companies there if data is the new oil, then ai is the new electricity, becky >> all right, dom. no time for chitchat thank you. we will see you a little later

>> smucker, and pet foods -- >> yeah, coffee and pets are the two leading things they had, and uncrustables peanut butter and jelly -- >> yeah, and they are fresh. >> it's good in a pinch. >> it is >> ijust had them for the kids reuters says visa and mastercard are delaying the launch of service products related to crypto until market conditions related to that improve. recent high-profile failures in crypto and that sector are an important reminder before crypto becomes mainstream payments and financial services then lowering inflation continues, and our next guest says we will see a recession this year which will ultimately

cause bond yields to plunge. the chief economist, he has served as a white house economist during the trump administration do we really need to throw away the playbook is this a novel set of circumstances we're facing with the economy? >> definitely not novel. the fed waited way too long to raise rates and they are raising them now much to aggressively in response to fiscal spending, and now the fed has forgotten there are lags in policy, and they should stop and wait and appraise the situation, but they keep going, and it's like they want to keep hiking until they see inflation fall much further, and that's a classic policy mistake. >> you are on that side.

what i was getting at is we have 500,000 new jobs, if you want to call them new, but 500,000 added in the last report, and yet we can't get the ten-year yield to move that's weird, isn't it >> yes, and no if you look at what explains the ten-year, the ten-year is a function of where the market thinks inflation is, and break inflation plunged, and it was at 3% and now it's near 2 the ten-year is the function of where the fed puts the rate, and that rate is expected to be 5.40, and our information shows the fed will have to take rates to 6%, because the number is inverted it's more inverted if you adjust interest rates ever, and it's never been this inverted,so th fed has plenty of inflation --

>> you sound like the guy that everybody else is saying doesn't understand what is going on. you know what i mean jason furman, or roger ferguson. everybody says what the fed needs to do, and the recent ppi, the cci and the -- everything. you are like a lone wolf, the only person saying this. >> not the first time i have been here. with my experience, it's okay to be an outlier and sometimes it proves to be correct the fed has committed to getting inflation lower and causing a recession. when inflation moves lower --

the fed will do this -- what happens next year, joe, november of -- what, '24? >> it's this year. >> it's setting itself up for a colossal -- >> you mean the presidential election >> yes >> we talked to brian cornell, and he said inflation is still an issue and something they are dealing with >> it is an issue, but, becky, when you look at the consumer confidence, and the matrix, they have done a lot, and they have raised rates at the fastest pace in 40 years, and they are going to throw a lot of people out of work that doesn't need to be out of work. >> we have the reopening from the pandemic, and everybody that didn't go to a restaurant wants to go to a restaurant, and there's not enough people, and everybody wants to fly and

there's not enough people, and we have the weird labor market which is disguising what the fed has already done i always say things happen gradually until they all happen at once. >> that's what is happening, and it's the proverbial straw that breaks the camel's back. history would say the fed can hike last in may, and maybe june, and be cutting by december >> 2023? >> yeah, and that's what stabilizes stocks. it's like what the fed did when they cut in '19, it went from 3% to 1.5 >> we will know if you are right and everybody is wrong or you are wrong and everybody else is right within the year. >> yeah, within the year >> it's like pulling his hair out if jason is watching

>> hope he is taking notes >> they are on later >> oh, that's right. thank you for coming in. at the top of the hour, goldman sachs ceo will be with us we'll be right back. this is real time insights i am here with kelly felton, and rudy so good to have you here with us there's billions much dollars

going towards the energy infrastructure >> we are seeing improving the reliability of the infrastructure >> how are you working with your clients to respond to the shift in priorities? >> we are helping them think through business models, thinking about new processes and skills that they need to implement a fair and just energy transition >> you are working with companies like national grid to assist in the transition tell us your experience with it, rudy >> we have a clear vision on how to work with our customers on the energy transition. we can blend in renewable natural gas and hydrogen, and we can deliver safe, clean, reliable and affordable energy to our customers in the future >> thank you both for sharing

your expertise >> thank you >> thank you today president biden's student loan relief program heads to the supreme court and amon joins us. it's all sort of tied together, isn't it >> yeah, there's an interesting psychological threshold for those where the student loans have been on pause, and now if

you had to start paying again, what would that do the biden administration wants to cancel $10,000 for those that make less than $125,000, or households below $250,000. those that received pell grants would receive $10,000 more than that, and republican leaders in six states tried to block that plan arguing it didn't go through the correct process and its estimated cost of $400 billion is too much for other taxpayers to bear. the supreme court will hear two hours of arguments and the question they are focusing on is whether or not the six states have the standing or legal right to block the biden administration's action. to decide that the supreme court has to decide if the six states are actually harmed by the biden plan in the meantime, the plan itself has been put on hold by lower court judges, meaning student loan borrowers are left in the

lurch while the battle rages on in the fate of their own debt. it will be months before we get a decision, but this case will attract attention from millions of borrowers and the debt industry we are expected to see protesters throughout the day today. >> i think i am anti-debt. i wish it would all go away. >> yeah, and the lender will pay for the debt essentially >> if you are the debtor, we should just get rid of all of them, and it would make it easier and i would have all that money. >> as a parent who is paying college tuition right now, there's so much focus on the debate on what the loan application process is, and the access to debt for students, and ought to be more focused on the costs of the colleges, right the cost curve there, they are been going on generationally,

historically, and that process seems out of control, right. >> yep thank you. see you later. still to come, j.m. smucker is more than jelly we will see how things are going with the pet business. i will give you a hint, very well coming up at the top of the hour, david solomon will join us s&p futures are up by 12, and the nasdaq is up by 47 "squawk box" will be right back.

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beyond just buying household essentials, we recognize, consumers today, they are looking for newness. the actions we took with our inventory allows us to be sure we have new and relevant inventory at all times, and we can bring the joy that target is so known for to our guests even in this environment. >> that was target ceo talking about the state of the consumer. another big consumer out with earnings reports, j.m. smucker sales were up 8% during the quarter to 2.22 billion, and that was in line with expectations joining us is mark smucker, he's the ceo of the j.m. smucker

company. >> thank you for having me, becky. >> and let's look at the quarter, you had strengths in coffee and pet foods that particularly drove growth. >> absolutely. we had another fantastic quarter. this quarter all of our businesses grew. we saw growth across each of our three businesses, coffee, pet, and consumer foods to the tune of 9 to 11%, depending on the segments so we're very pleased with the results and continue to see strong share performance, as well >> what happened why did you see so much growth >> you know, this is really the story that we've been telling over the past couple of years. stringing together multiple quarters of growth we have had fantastic sales execution all the way down to the store shelves. and we continue to really have world-class brand building, supporting our brands through advertising on -- whether it's has media or social media

channels things are just going exceptionally well, and these are all brands like gif and crustables, milk bone, dog biscuits, that consumers and pets truly love. >> let's walk through some of the things uncrustables has been a good example of innovation. it's something that, you know, i'll pick up, like i did just last week in the airport for my kids, as i was going through that's great news to see something like that, and that's part of the strong sales, but i can't make peanut butter and jelly sandwiches for my kids at school, they're banned because so many kids have peanut allergies. how has that played out over the years? >> interestingly, uncrustables continues a very strong growth trajectory we saw 39% growth, really supported by the fact that our second plant in colorado is fully online we had an expansion there. and demand outstrips supply. we're building a third plant to

support this tremendous growth none crustables. >> i believe it with the convenience factor for it. i also think through, i used to take peanut butter and jelly sandwiches to school and my kids can't. how much of a problem is that and what has that done over the years for you? >> it's pretty isolated in the united states. in our canadian market, where we are about to launch uncrustables, peanut allergies -- or peanuts are less allowed in schools in the u.s., but we have great growth in our away-from-home channels with uncrustables, and that includes schools as well. >> you've put out some new guidance today you're now saying adjusted epps, you expect to be $8.55 to $8.75. that brought up the lower end of the range. i think you had been as low as $8.35 before but the street was already at the high end of that, $8.60. and you did beat by 9 cents this quarter. what do you see for the rest of this year? >> we're in our fourth quarter now. and so we're very pleased that

we did raise the bottom end of our guidance keep in mind that at the beginning of the year, the midpoint of our guidance range was $8.05. so we have beat and raised a couple times this year feel very confident that we will be able to have a strong finish to this year, and again, coming back to our talented people, our great brands and the support of those all the way through the store shelves has really been key to our success >> mark, during a recession, we see for -- i'm just wondering, the pet food when you entered that business, did you know that it was like inelastic. in a recession, do you see people change their habits with their pets or is that the last thing they scrimp on it's crazy i mean, it is crazy, but i can see how people would be like, oh, yeah, the kids don't need that, they can go without that, but, oh, no, rover's got to have

what he's used to. is it more inelastic than people food >> joe, you know, i think the great thing about our portfolio is that in each of the categories, pet is no exception, we sell products that run the entire spectrum of value >> so there is a trade down. there can be a trade down, even in the pet business to some extent >> there can be, but keep in mind, consumers tend to treat their pets better than their children in some cases >> that's so bizarre i know >> when i'm watching a movie, if i'm watching a movie, people are getting shot left and right, and if they hit a horse or a dog, okay, that's too much! it's bizarre why is that? i guess because they're so good. they're so pure. >> you're showing milk bone right there on the screen, and that's a perfect example of a brand that actually plays in all of the segment the traditional biscuits are definitely a value proposition, but we have premium chews, dental chews in the milk bone brand. there's really an option for all

consumers and pets >> hey, mark, we have to run, but very quickly, inflation, how big of an issue is that for you right now? >> you know, we're still in an inflationary environment and we just continue to focus on what we can control. and so using the levers available to us, we will and have passed along cost-justified inflation. and also, really focus on cost reduction, as well, to make sure that we're supporting the consumer in every way possible >> you do own rachael ray. i just checked and i can't believe what i spend on those little chicken treats they're moist. they're $13 for a little bag, mark you could do something there for me, if you could -- but -- and i'm still buying them. still buying them. we appreciate that >> you know which ones i'm talking about? they're very -- they're quality. and when i say treats -- there's four dogs now. the grandpup is with us. and they like those best they really do and i'm not trading down i think you're on to something

>> we appreciate your business, joe. thank you. >> all right thanks mark smucker, no relation -- i think that's weird, no relation to the -- or sttlus there is a relation >> could be. >> there might be. mark smucker, thank you. $13 for a little -- and i buy three bags of them >> a day >> yeah. they they'd eat it. they would >> andrew? >> thanks joe, when we come back, a lot more right here on "squawk box. we're live from the goldman sachs investor day we have a very specialue gst chairman and ceo david solman will join us next right here on side "squawk box," when we return to y ready for anything! and here's to being single and ready to mingle. who's ready to cha-cha?! new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates,

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good morning it is the final day of february. futures pointing to a higher open a big morning for retail earnings numbers and commentary from target ceo straight ahead and goldman sachs' second-ever investor day it is about to kick off. and we have a very special interview this morning with the bank ceo, david solman, as the final hour of "squawk box" begins right now

good morning and welcome to "squawk box" here on cnbc. live from the nasdaq market site in times square, where the snow is gone already. i'm joe kernan along with becky quick and andrew ross sorkin is that all there is >> for now >> for now u.s. equity futures -- it was a little dicey at 3:30, 4:00 in the morning. it was still snowing and the roads weren't great, but here we are. >> no. >> u.s. equity futures this morning up about 96 points on the dow. and there were some gains yesterday. this week's a little better, so far, than last week, which was one of the worst of the year treasury yields, i'm fascinated by what lavorgna just said i'm glad we talked to joe lavorgna, because there is an alternate view of everything that's happening here. and it certainly would explain why we're at 3.9 on the

ten-year because given what we're now hearing -- >> doesn't make any sense. >> it doesn't, unless it does. and he thinks it does. andrew >> okay. joe, we've got a big interview, goldman sachs kicking off its second of ever investor day this morning and joining us right here at the bank's headquarters in downtown manhattan, first right here on cnbc is goldman sachs chair and ceo, david solman >> thanks for being here >> a big day help us understand what you're going to be talking about today. there's been a lot of noise, dare i say i think every other day, there is now a new headline about goldman sachs, about you, about what the firm is, about what it isn't. some of the criticism fair, probably some unfair what do you think the investor community and maybe the public misunderstands about goldman >> first of all, i'm excited to have you here today and i'm excited to have our investor day today. this is only, as you highlighted, andrew, the second time in over 150 years that we

have brought investors into the building to give them an update on our business and our progress and i think you know that three years ago, when we had our first investor day, we laid out a clear, strategic plan for the firm we laid out a plan to invest in our core businesses. we pointed to four areas that we thought were interesting opportunities for the firm to grow asset management, wealth management, transaction banking, and also consumer banking. we said we would run the firm more efficiently and put out some targets and metrics to track our performance over time. and today, we're updating investors on our progress. and candidly, we've made a lot of progress over the last three years. and i'm excited to have a number of my colleagues, dan deese, one of the people who runs our bank and marketing franchise, we'll talk about the progress we've made in that business, the market share gains in that business, talk about the asset management platform, and update people on our journey around the consumer business, which has obviously gotten a lot of attention. but i feel good about our progress i've spent a lot of time with

investors over the last few months and i know our investors are excited to be here and get a little bit more information as they track our journey >> when people think about goldman and think about the valuation of goldman and the banking space, i think there's still a lot of questions, broadly about what it is that a firm like goldman needs to do to transform itself consumer was one of those pieces that people thought might transform the valuation and the story in a different way that hasn't happened. how do you shift around that >> well, when we laid out our plan three years ago, we talked about a number of avenues for growth and opportunity and i think it's absolutely fair that our execution around the consumer platforms hasn't been to the standard that we would like it to be. there's still opportunity for us we have some interesting platforms, where we've built good technology and have good partners and we're working to improve the performance of those platforms but the real story of opportunity for growth for us in the coming years is around asset management and wealth management and if you look at the work we've done over the last few years to put that platform

together, we're running the fifth largest active asset management in the world. we set an active target for $10 billion in management fees in 2024 we finished last year at $8.8 billion. we're clearly on track to meet that target. we continue to meet our fund-raising targets we started with a fund-raising target and alternatives of $150 billion. we blew past that, ahead of schedule, we're at $180 billion. headed to $225 billion of fund-raising so there's real opportunity across the firm for us to continue to make the firm more durable. and i would also point to, andrew, this is one of the reasons why i think our stock on a relative basis has performed relatively well over the last few years, is that we've grown the earnings of the firm materially so our eps in 2022 was 40% more than our eps was before our last investor day so we're making progress but we've got more work to do. >> if we were to like at a pi chart, in terms of the asset

management piece of the business, the piece that the market today would value in a higher multiple than the banking and trading piece, it would look like what? >> i think it would look larger, because that's going to continue to grow. there are a couple of aspects of that business. obviously, we're adding assets and partnering with more institutions, et cetera. we're moving to an asset-lite model. we had always used our balance sheet very extensively, and part of the strategy has been to significantly reduce our balance sheet. and we're about halfway through that journey but it will be a bigger piece of the business i think that you'll see private banking revenue, which has grown meaningfully over the last few years continue to grow and we've also set the firm up so there's an ability to see and track more clearly our progress in those businesses. now, i don't want to take away, goldman sachs is the leader in investment banking and markets global banking and markets is a premiere franchise we have extraordinary people they work hard every day to serve our clients and the relative performance in that business has been fantastic. so that's always going to be a

big part of goldman sachs. we're going to continue to grow the businesses that we think are important to serve our clients we've got an interesting ethos around one goldman sachs and i think it's working >> let me read you a critique, though did you read the "financial times" this morning? >> i did not read the "financial times" this morning. >> this is the editorial board op-ed. i'm sorry, you read this yesterday, you know what i'm about to say, probably this is the "f.t.," the bank goldman sachs that gained notoriety as the vampire squid is now more of a damp squid. the question is the wisdom of the mix he show and its bungled implementation i'm curious what you think of that and also, if there's a lesson in all of this? >> well, i don't -- i don't like that, but at the same point, that's -- i would say that's an opinion from one source. i look to our clients. and i listen to our clients. and the feedback from our clients about the way we serve

them continues to be excellent our market shares across our core business continue to be excellent and they've actually grown. in our banking and markets business, we've increased our market shares by 350 basis points, our wallet share over the last few years of course, we haven't executed personally on everything, but when i look across the spectrum of work we've done to grow the firm, to improve the way we serve our clients, to strengthen our business, we've made a lot of progress. and in the places where we've fallen short, we will reflect, we will learn, we will adapt, because that's what good businesses do. and that's what we're doing. >> i don't want to belabor the point, but let's talk about that i think there are people who say, was there a lesson learned about the consumer piece if you go back, look, the consumer piece started under lloyd blankfein, right do you look back and say, that was where the mistake was made do you say to yourself, okay, i took that and i had -- there was a fork in the road i could have said, we're

stopping now we're not doing that or i could have doubled down, which i think is what you argue you probably did at that moment. when you look back at that, do you say, okay, there was a lesson in that and it is -- >> i think the important thing, as businesses experiment and try new things, and again, in the proportion of goldman sachs, i want it kept in perspective, you know, goldman sachs, 10.2% on its equity last year made $11.3 billion after tax, this was something that was an emerging opportunity for us, we did not execute well on it there are parts of it that we executed very well on. we built a deposit platform that works very well. it's attractive, it's good for consumers. we've built a big deposit base, which is hugely strategic for us so there are parts of the strategy that we executed well on there are parts that we didn't i think the important thing that you do is you look at what you've done, you learn, you adapt, you correct, you move forward. and so i think, and i said this to you the last time you asked me these questions, when i was

on tv a month ago, i said, andrew, i think we tried to do too much too quickly, and as a result, our execution in some areas of this wasn't good. so what do you do? you correct that that's what businesses do. there isn't a business that kind of goes through and doesn't have successes, but also some stumbles >> one related question on the consumer side, which is, you are staying in the credit card business you have this partnership with apple. you have another partnership with general motors. it was a story that came out yesterday on cnbc.com that suggested that the apple deal, the terms of that deal were, quote, one-sided that when folks internally after they saw the terms of that deal, they said, this doesn't make sense. my question is, do those terms still make sense and is the deal with gm the same >> you know, we have poips, these are great companies, we have long-dated partnerships i think one of the things that's not well understood is what partners -- when you're partners, you both benefit and you both have friction from

zp deals, so one of the things we work with our partners is making the partnerships stronger. and we're very focused on with both apple and gm and there's lots of opportunity for gm and general motors >> as i was looking through the deck this morning that you're going to be presenting later, esg is on a couple of the pages, in big, bold letters i want to read you, though, there's obviously a huge debate going on in this country it's almost a political debate but this is vanguard's ceo just wrote this recently, saying, we cannot state that esg, environmental and social g governance is better than broad index investing. our research shows that esg investing does not have any advantage over broad-based investing. what do you think of that as somebody who has advocated for the ideas around esg >> i'm a big advocate for climate transition, but it's just that, a transition that's going to go on for a long period of time. one of the things we do as an

investor manager, we are meet the needs of capital allocators. and capital allocators are interested in allocating some of their investments towards things that are driving the transition and making the world more sustainable for all of us. i think it's important for us as an asset manager to participate that >> what do you make of the political blowback, and how has that impacted your thinking of all of this? >> the political blowback hasn't impacted my thinking that meaningfully i've always been of the belief that it's important for us to try to be constructive in allocating risk capital and driving risk capital towards technologies that can accelerate the transition but it's a transition. it's going to take decades goldman sachs is still going to be involved with traditional energy companies, or helping traditional energy companies think about -- >> have you had states that you've done business for say, hey, you know what, you guys have taken either positions on these things, you've been active, articulating a lot of the things around esg, dwwe dont

want to be in business with that >> i've seen the noise and the blowback in other places i think we continue to serve our clients broadly, and as a result, we have not been specifically raised in these dialogues. i have said publicly, it's a transition we finance fossil fuel companies and also finance an enormous amount of capitol into exciting technologies that can accelerate the transition we need secure energy. we need secure energy. and i think one of the things we've learned over the course of the last 12 months is our energy supply chains, the security of those supply chains, the availability at attractive prices for end yuusers is very, very important for us. >> we've talked about china a lot over the years it feels like the tensions have only gotten worse over the years we've had those conversations. and i'm curious how you think the bank plans to approach the issue of china, doing business in china, working with clients in china and around china, working with investors, thinking

about informsi vesting in china has your thinking changed, if at all? >> i think it's hard to operate in this environment and not have your thinking shift a little bit, given the fact that we're in a very, very tough place in the bilateral relationship between the u.s. and china and my own view is, i think it's probably going to get tougher over the next couple of years, before it gets better. we operate in service of our clients. they can be global clients doing business in china, sometimes can be clienti s on the ground. i think the lens has shifted a little bit, given the environment. but we will serve our clients as they need to be served, if somehow from our government, from a legislative process, there are changes and capital flow rules, et cetera, we'll obviously adapt to them. but certainly, our view is, it's a more cautious time in terms of our own investment in our franchise. >> so the risk premium has gone up >> the risk premium has gone up, but we have a reasonable footprint in hong kong, a smaller footprint on the

mainland, and it's there to serve our clients, and we'll continue to serve our clients, because candidly, they need more advice at this point in time given the complexity of the situation. >> you talk a lot about technology in the deck and what this firm can be, almost as a technology -- i don't know if you think of yourself as a fintech player at all. we talk a lot about chatgpt on the show i'm curious where you think ai really place out on this and have you been playing with chatgpt, even itself, in the context of finance >> i have been playing with it, you know, personally, just to understand it. but, you know, we're certainly spending time thinking about it. i think that the ai technologies have the potential to be very, very transformative. you know, the potential to be very, very transformative in the same way the internet was very, very transformative. >> how far out are we in terms of -- >> i'm not a technologyist that can really tell you how far out are we my guess is that the acceleration of the technologies and the impacts that they can have in work processes, work flows, some of the things we can do in a whole range of businesses in some ways will

come quicker than people believe. and in other ways, the real disruption will be longer dated. but we're spending time thinking about it there are very simple things around work flow and processes that you certainly can lever but it's exciting technology and i think it's something that, you know, all businesses, as i move around and talk to our clients. our clients are thinking about, how does this affect my business, how can it affect the way i have certain processes that, you know, inform my business >> how do you think it affects labor? i ask because the technology space has just gone through a big round of layoffs you went through some layoffs of your own do you think long-term, this changes that dynamic >> i would step, you know, way, way up at a very high level, andrew, and just say, if you and i were sitting, interviewing each other 150 years ago, we would be talking on how industrialization was going to affect labor the world changes, technology changes, we adapt as a society we find new ways and new skill sets where people can thrive and there's opportunity. you know, i'm a bull on the long-term case for that,

regardless of the technologies that come. i'm not going to sit here and say, you know, this technology is going to meaningfully impact, you know, labor and opportunity. i don't -- that's not the way i look at the world. >> i wanted to just ask you about buybacks again, another issue that you raised in the deck today $2.25 billion so far >> we filed our 10k last thursday and it highlighted that as of last thursday, we had bought back $2.25 billion in the quarter. >> you probably saw warren buffett over the weekend said that folks are economic illiterates if they're against the world of buybacks. you've authorized up to $30 billion. when you think to yourself, if i could spend $2.25 billion on my stock, you have to believe that your stock is therefore underun undervalued, versus using that money in some other way, how do you think through that >> we have a capital allocation policy that's very, very clear and when we discuss it with our board, we talk first and foremost, there are opportunities in our business to deploy capital and that is our first order, you know, of business.

is where the opportunities to serve our clients. the second order of business, then, is if once we've met those demands, et cetera, we generate a lot of capital as a business the capital belongs to shareholders, we return. we have a dynamic capital management process if you look at our buyback opportunity last year, you saw that it ranged from $500 million in some quarters to this past quarter, it was $2.5 billion >> if you could buy anything in the world, what would you buy? >> maybe like a new car? >> for the firm. >> look, andrew, as we look ahead at the moment, we're focused on the execution of our business we've laid out very clearly that our global banking and markets business, we are focused on continuing to grow our market shares and increase our financing activity for our clients and asset wealth management, we're driving management fees, a big management fee target, we're on track to meet it, and we're focused on bringing platform

solutions to profitability that's where our focus is. >> final question, it's what your clients are all probably asking, where is this economy headed there's the analyst view, but what is the david solomon view >> as i'm talking to ceos, there's been a shift over the last six months. i think there was a lot of pessimism around the chance that we could get through this cycle without a real recession, given how quickly we were changing economic conditions. we've now been in a period of nine months where we've had a real tightening of economic conditions you know, obviously, the impact of that will lag we've taken inflation from double digits, you know, down more to 5, 6 i think the general consensus is inflation is going to be stickier, when i talk to ceos, stickier and harder to move from where it is now, down to 3%, let's say. let alone 2%

and in the context of that, you know, higher rates, longer, sluggish growth, stickier, but a better chance that we could muddle through with a softer landing. i think there's a little more optimism, because people's businesses have been performing better the consumer have been more resilient. service businesses in particular have been doing very well. so i think we're in a place where there's a little bit more optimism about muddling through, but i think inflation will be sticky and hard and i think anyone running a business has to be prepared for kind of a bumpy 12 to 18 to 24 months. >> david solomon, thank you very much >> appreciate it, andrew thanks for being here. >> becky, back to you. >> andrew, thank you and thank you to david when we come back, the ceo of pandemic darling zoom is going to join us first on "squawk box" following fourth quarter results. take a look at the shares. ayun're up by about 5% st ted you're watching "squawk box" and this is cnbc

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welcome back to "squawk box. the futures right now, we have been up triple digits on the dow for a little while, up 94 right now. when it was all said and done yesterday, after kind of a whipsaw session, finally ended positive, had been up over 100, the dow i'm talking about, but

ended up about 70 points yesterday. and the s&p, 3982, add 10 on to that, right at 4,000, basically. so i don't know. it's great that's why when someone buys or someone sells, someone buys. and for every lavorgna that we had on, if you didn't see it, talking about that we're ready to go into a pretty hard landing. that's why the ten-year won't budge on the field and we've already, in his view vanquished inflation even though he thinks inflation, i was interested, because he said it's all the fiscal spending he didn't say it was just reopening and supply chains. he said it's overspending. >> look, you could be in a worst of all worlds situation, where inflation is not vanquished. and you still have to have higher rates to kind of combat that >> stagflation it's the worst >> and you go into a downturn. look, there were also two inflation reads in europe today. one in france, and one in spain,

that were hot than anticipated now it's putting pressure on the ecb to raise rates even further, too. >> and oil has behaved because of the sbr what if that goes back up? >> if you're in an economic recession, maybe it doesn't. >> do you think a 1.1 percentage point increase in the unemployment rate would cause the fed to ease. >> i didn't think so we asked him when he was walking offset, joe, what do you think, joe lavorgna, what do you think the increase in the unemployment rate would have to be in order for the fed to reverse position? he said, 1%. and that kind of shocks me, because we have been hearing from jay powell for a while that the unemployment rate is going to go up and they're prepared for that pain i would think that you would need a bigger unemployment -- >> do you think that certain parts of the democratic coalition at that point would be arguing that -- >> oh, absolutely. absolutely the pressure on the fed is going to step up significantly >> if it trumps -- >> if they try to do that. right now, they're focusing on one part of the mandate, not the

two parts of the mandate but you already hear it from places like senator elizabeth warren is already saying, you can't do that. you can't raise rates and hurt this part of the population. i do think it's going to matter that lael brainerd left the fed, because she would have been a moderating voice to keep them from going higher. >> what i wish senator warren -- i wish she would take it to the logical collusion, killing demand is not an effective way, killing demand is not an effective way to cure inflation. so therefore, i wish she would say, we need supply chain regulation -- >> even the things they're talking about doing, spending on chips, they're talking about putting all kinds of constraints on any company that take money so they do build additional chip factories here in the united states, so you can't just do buybacks. >> mandate day care. which we just heard was infrastructure do you know how many things i could say. how much wish lists of the far left if you just are going to say

it's infrastructure, you can say it it's not true, but you can say it take your pick stuff adds up. >> every wish list you could say is infrastructure, but it's not. >> charlie munger made the point when we talked to him earlier this month that, look, california is doing a very good job of driving out wealthy people if that is their plan in all of this, they have a great plan for it they are driving out wealthy people and that's going to become problematic. >> you can stay in the united states and leave the state, but on a federal level, that's a little stickier. >> then i'm going to portugal. maybe. target shares were lower and then higher this morning now the stock, if we take a look at it, shows that it is, yeah, basically flat, up by about 57 cents. this all comes after the retailer reported holiday quarter resultsthat were far above what the street was expecting. target's earnings beat was its first in a year, but it also reported shrinking profit margins and gave a pretty conservative outlook for both

the first quarter and the full year we spoke with target's ceo, brian cornell, in the last hour. >> wihile there has been some softness in discretionary categories, we delivered $55 billion of revenue through discretionary categories in 2022 so they're not going to zero but we have seen a consumer who is not spending the way they were during the pandemic >> cornell is expected to lay out more of target's plans for this year later this morning that's happening at an investor day right here in new york we'll continue to track the stock. andrew, we'll send it back over to you >> okay, thanks, becky when we come back, a lot more right here on "squawk box." bitcoin hanging on to a small gain for february. we'll ask market technician katie stockton for her latest charts and analysis on all of this but next, now that it's reopened, china wants more foreign investment in that country. but is there a widening disconnect now with u.s. businesses we just talked a little bit about thatith vi wdad solman we'll talk about that story next when "squawk box" returns.

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ahead of a high-profile congressional hearing on china tonight, we have a new reminder for executives about their risks of doing business there. eunice yuan joins us now with more hey, eunice. >> hey, joe. well, the reminder today was directed towards elon musk

the tesla founder had been re-tweeting posts promoting the theory that coronavirus originated from a wuhan lab. well, the issue is very sensitive here in china, and so the communist party paper, the global times warned on its social media site that he could be breaking the pot of china this is a chinese saying that's similar to "biting the hand that feeds you. this warning comes as chinese officials both on a high level as well as on a lower level of the government are really pulling out all the stops to try to attract u.s. investment into china. the directive has come all the way from the top, from president xi jinping, who has been saying that there should be greater effort to attract and welcome more foreign capital, as well as foreign investment on a local level, officials have been eagerly trying to reach out to international companies, touting how they're relaunching several events around the region, and dispatching delegations, prioritizing trade shows in the u.s. and europe

cities also including shanghai have announced that they're going to be having a foreign talent recruitment drivers they do, though, have a lot of work to do the international business sentiment has been quite shaky in the past year, because of the zero-covid protocols, the sour -- sorry, the slowing chinese economy, as well as the political climate, american executives in particular, joe, are really nervous ahead of that select committee hearing this is a new committee that's focused on china, and nobody here wants to be called in >> yes, i can imagine that's true and you don't have any additional info on exactly what's happening vis-a-vis russia i don't know i don't know what the calculus is there, but there's rhetoric going back and forth about what happens there. so keep us updated, eunice

>> reporter: yeah, there's -- >> yeah? go ahead >> reporter: i was going to say, there's definitely a lot of rhetoric going back and forth. the speculation here is that president xi jinping will be going potentially even as early as next week, i heard, to moscow but in any case, this is a lot of speculation at this point about that tighter relationship. all right, eunice. eunice yuan, thank you still to come this morning, we will ask the cfo of zoom if the video conferencing company can reclaim some of its former growth anytime soon. the company came out with earnings, better than expected also, forecasting a higher profit for the full year 2024 anhe seeth ttrt was expecting. we'll talk about all of this and more stay tuned you're watching "squawk box. and this is cnbc you call ibm to automate your it infrastructure with ai . now your systems monitor themselves. what used to take hours takes minutes. and you have an ecommerce platform designed to handle sudden spikes in overall demand...

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bitcoin was up close to 40% in january, but things have cooled off a little in february, although the gains have held in bitcoin. the cryptocurrency barely positive for the month joining us now to talk technical levels, katie stockton, founder and managering partner for fair lead strategy. she is also a cnbc contributor and i guess we could start where we left off, not that many sessions ago, katie. and you did note that there had been a little bit -- you had noticed some relative strength, at least with bitcoin. and i don't know whether that -- i don't think you thought it was the start of anything substantial, but it has acted a little better than the nasdaq at this point

>> yeah, we've actually seen the correlation between bitcoin and the nasdaq 100 really decrease this year, year-to-date. and i think it's interesting i think it's a reflection of the rally. so when we see markets or most asset classes going down, everybody gets into this risk-off mode. and they therein sort of penalize all classes and that's where you have the correlations actually increase but of course, when you have the contrary, where bitcoin is rallying, where the nasdaq 100 was in a recovery mode for van, certainly, that then saw those correlations decrease. and that, if it's sustained, puts us back into the fame of mind we were in back in 2021, a much better environment for bitcoin, of course we suspect, however, we couldn'ts nwith equities now declining again, we'll get back into that higher correlation mode between bitcoin, the nasdaq 100 and other risk assets. and it's at a approving ground on the charts. if you look at bitcoin versus

resistance, it's still in that 25,200 area. it needs to clear that area in order to look better because that would resolve a trading range to the upside and tell us that that range is more likely a reversal pattern versus a continuation pattern >> because it did get from 17 or just under 17,000. the move to 23, 24, was very quick. and it really did hit a wall it tried a couple of times, it got above 25 just barely but didn't hold and definitely didn't continue to move like it did for the first 40% or whatever katie, at this point, let me just shift gears to the ten-year what's the -- beginning to talk yield or principle, i guess let's talk yield what's the resistance for the yield right now? is it 4%, and do you expect that to be breached finally now i'm questioning it again it depends on what some of these

economic numbers look like over the next two or three weeks. >> that 4% level definitely is a psychology threshold i wouldn't call it a strong resistance level, per se but any kind of big, round number like that definitely could create some consolidation. and in fact, i think that's what we're seeing right now a little consolidation just shy of that 4% zone. the indicators, as we just wrote this up this morning, do support a breakout above 4%. there was already a couple of breakouts above more minor resistance levels like the 50-day moving average and now the next resistance that's meaningful is at the october 2022 high. and that's about 434 for yields. so we do think there's going to be progress towards that resistance level and yet, our bias for the next several months is really more neutral. and that goes not only for yields, but also for the dollar. that's because we've seen a pretty meaningful loss of long-term upside momentum there and it's been associated with

some of those countertrend signals that we sourced the demark indicators for. so we're looking for more neural action overall, but with the upward bias here in the near-term. >> i could come up with a fundamental scenario that would cause exactly what you just described. but -- and it's funny the way that works the way technicals and fundamentals seem to line up you just don't know at the time how that's going to work katie, we're out of time we'll see you again very soon for an update. >> sounds good okay >> more bitcoin in the ten-year this time than the s&p i'm sure nothing's changed, what katie thinks about that. >> all right zoom shares higher after the video conferencing company beat fourth quarter revenue and profit expectations. zoom is now forecasting lower than expected revenue for the full year, but higher profitability. joining us right now in a first on cnbc interview is kelly st

stekelberg she's zoom's chief financial officer. kelly, welcome thanks for being here today. >> let's talk a little bit about the enterprise business, because i think that's really the engine that has been driving things explain what the enterprise business is and what's happening there right now. >> so you're exactly right our enterprise business is all of our customers that are touched by our direct sales organization or a channel partner. and that business is really driving the growth of the business it grew 24% year over year in fy '23, which we just completed in january. and while, you know, we have seen some overall macro headwinds, we do expect this portion of the business to drive the growth in fy '24 the second segment of our business is our online segment and this is all the customers that self-serve online and this comprises now about 45% of our business. we saw significant growth here during the pandemic, which it was about 20% of our revenue,

pre-pandemic and this is an area where we've seen a little more contraction and so the focus here for fy '24 is getting this business really stabilized on a dollar bases and what that will do then is stop the tamping down that it's having on the overall growth rate of the business, which as you say, is really being driven by the enterprise segment. >> so if consumers are maybe using zoom less as their going back to the office more, how do you stabilize the dollars in that business? do you raise the subscription price, or lower it to bring in more subscribers what's the magic formula >> there are three components to that magic formula first of all, we are really focused on improving the retention rates, which we have seen come down to, again, sort of lows that we were experiencing three to four years ago. the product has improved dramatically the way that customers are able to come to the website and self-serve also, there are lots of initiatives in this segment to

drive growth, including expanding the market opportunity through offerings, new pricing and packaging, also, new currency and payment types that are available. and last but not least, yes, we are raising prices we announced a price increase, which would be effective march 1st for our monthly customers. but what that's done, we've seen a transition to more annual customers. annual packages that they're buying, which allows them to avail themselves of further discounts. >> let's talk more about the enterprise business. i think that's probably the area where you compete more with microsoft teams or the cisco product. we have heard different things with chatgpt being so hot, microsoft is already talking about incorporating some of that artificial intelligence into the teams product that it offers i know that this is something that you all are talking about, too, your ceo mentioned it yesterday on the call, but i don't even understand what's needed in ai in terms of servicing a client like this what can you do with ai?

>> of course so, ai is not new to the zoom portfolio. we have been using it for a while in services like transcription. so after a meeting, you can get a recording, but a transcription of what was said, translation. which is really helpful when you're working with global teams. we recently announced zoom virtual agent as part of our contact center solution, so this is a conversational ai mechanism that allows customers again, customers and companies to serve their customers very quickly and efficiently to help them find answers. and so that's just a few areas where we're already using ai and as eric touched on yesterday, we'll continue to partner with great companies like open ai to further develop mechanisms which just make all of your collaboration experiences more intelligent >> hey, kelly. on that note, you're partnering

with open ai a lot of companies are partnering with open ai. the question is, is that becomingbecome ing a commoditized version of this, and are there others in the space that are going to emerge, and/or are you making investments in this space to actually be able to either replicate or evaluate what these products already do? >> well, we are absolutely making investments one of the most recent acquisitions we did was solvy, which brought us and accelerated our development into the conversational ai as part of offer contact center and, you know, eric is absolutely a visionary in this space. and meeting with all of the leaders in terms of what everybody is doing with ai and will continue to stay abreast of it i certainly wouldn't say that it's commoditized at this point, as i think we're in very early stages of seeing what ai is going to do to continue to transform all of our experiences

on this platform >> kelly, how does it change the video experience we keep speaking about it in the context of text. you've seen what ai can do in terms of still images. but when it comes to video, what do you think it can do longer term >> one of the things we already have is called smart recordings, so if your record your meeting after the fact, you want to go back to it, it can help you find the parts of the meeting that are most relevant for you. we also have zoom iq for sales, which is our analytics tool that helps for sales training you can go back and view a video recording again and understand how many times did they talk about zoom contact center. you can use it during a meeting to prompt you. i could use it, for example, to go back and evaluate, am i using too many filler words as i'm speaking to you. those are the aspects where you start to see it bringing ing realtime into your video experience or after the fact improving your experience your

customers, your respects, your sales team, et cetera. >> kelly, you guys just announced earlier this month that you would be laying off about 15% of the workforce to get writ rid of that many pe, what were they doing before? >> yes, unfortunately, that was a very difficult but needed decision that we came to and the application of the reduction was pretty consistent, pretty evenly applied across the organization, as we wanted to make sure that we were thoughtful about how we were doing that and all of the senior leaders had the opportunity to prioritize that. as everything we do at zoom is focused on investing for growth, we will watch as we go through this year and see if there are opportunities to reinvest for growth, either through innovation or our go-to-market teams, as we're also taking the opportunity to restructure this to be more efficient, and especially focusing on supporting our enterprise customers.

and, you know, we'll see how we go through this year, but the plan is that we'll have the opportunity to reinvest as we see opportunities. >> all right kelly, thank you very much we appreciate your time today. >> yep thanks for having me >> all right coming up, we'll get jim cramer's first take on the trading day ahead. stay tuned you're watching "squawk box" on cnbc this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like...

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. >> there are parts we executed very well. we built a deposit platform that works very well. it's attractive. it's good for consumers. we've built a huge deposit base. there are parts of the strategy we executed well on, but parts we didn't. i think the important thing you do, you look at what you've done you learn, you adapt, you correct and move forward >> talking about goldman's consumer business.

jim cramer joins us now. you're a former goldman man, jim. what's your latest take on this firm >> first, i have to tell you, i've listened to your interview and i'm reviewing again. i thought it was unbelievable. holy cow, i hope the -- you elucidated more from solomon than you'll get at the investing day. i think the lessons learned are not fully learned. i think you correctly mentioned that the credit cards have been just horrendous for them poor execution has hurt their earnings the ft piece yesterday which talked about how they're the wrong bank, a bank of 2008 i don't know, andrew you know that period very well did you come back and feel that goldman has a game plan for consumer >> you know, i think their game plan is actually to move, frankly, away from consumer and

into the wealth and asset business how quickly can you scale that basis? when you look at what the ft said, morgan stanley has already gotten there in terms of accusations. the question is whether the brand and the relationships that the firm has are not just strong enough, but so strong that they can develop into that and whether the investor community is going to be patient >> what's incredible is we can sit here and actually talk about how investment banking could be a drag on the best investment banker you're so right. the ft piece that talked about how everything has been growth like morgan stanley makes it sound like they have to go it by themselves the illuminating comment is they want to be asset light i don't know, andrew i don't know how you can asset light unless you jettison -- how do you get out of the apple deal didn't he basically say you can't get out of the apple deal? >> i think they're in that deal for quite some time. the other question i have for you is, do you think there will

be a day and age where the investment world will actually apply a higher multiple to the banking and trading business right now the hot thing to be in is a reoccurring business that has a fee stream -- it may not be the greatest fee stream in the world, but people will apply a higher valuation because it's not as lumpy part of me thinks that maybe goldman should lean into -- >> i think they should lean in we had the worst year since 2001 for ipos and they still made a lot of money wealth management was just elephants. they went away from that i think, yes, it's absolutely true that solomon doubled down on what blank fine did i'm not saying this is johnson doubling down on kennedy's vietnam war. it's not a terrible thing to double down on the growth margins for wealth strategy -- i thought this was going to cost them $5 billion

because that's what two ceos said they thought it would cost $5 billion which is why they didn't bit on the asset business i listened to your unbelievable interview and i came away thinking, do they know what they are? i don't know. >> well, we will see we'll hear more from david solomon this morning jim, thank you >> it was fabulous. >> appreciate it you're fabulous. we're looking forward to see all your fabulousness in just a moment on "squawk on the street." we're coming right back after this each other rock stars? you're a rock star. you are a rock star. no more calling co-workers rock stars. look, it's great that you use workday to transform your business. but it still doesn't make you a rock star. so unless you work with an actual rock star. hi, i'm ozwald. hello ozwald. pam, you are a rock- i wasn't going to say it. ♪♪ what do you get from the morgan stanley client experience?

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we are getting ready for the final trading session of the month. joining us right now is sylvia jablonski chief investment officer of defiance etfs let's start with the target earnings and maybe the comments we heard from david solomon about his expectation for the economy going forward. i'm curious what your reaction to those numbers were and what they meant in terms of the consumer right now >> i think we're in an interesting spot in the market right now. the consumer remains somewhat stronger, at least in a stable position, but wehave a fed we know is looking to really deaccelerate the economy and perhaps bringing forth the fears of recession and slowdown and things like that i think it's going to affect the market in the short term in terms of a lot of volatility and worries about us crossing below those 50-day, 200-day moving

averages what i do take from this is, in the meantime the consumer has been spending, still has a good amount of cash in savings accounts, not at all-time high levels there is potential we avoid a massive recession and we have the softer landing version of the scenario >> in a softer landing scenario, what do you want to own? and in a harder landing scenario, what do you want to own? >> in a softer landing scenario, i'm looking through -- i think this year is going to be tough the fed is on his mission. i think in a softer landing scenario, i'm big on ai. i'm going to look at all the ai machine learning stocks, all the names that will change the way we sort of live, convert e-commerce, change health care, change cybersecurity, driverless cars, all these things that are growing. if you look at the user base of chat gpt, over 100 million users. keyinger expected to be 30% by 2026

that's not so far off. if we get to hard landing, i'll probably look at health care types of names and some of the fixed income products. you have a lot of cash-like equivalents paying 4-5%. i think a lot of investors, particularly those close to retirement will probably play in that arena. >> what are the tech names you like if ai is your place the other thing is how much do you fear that we're -- because all we're doing is talking about ai right now, that maybe it's overbought, even in this environment? >> yeah. i think it's just -- there's a lot of hype around it. when microsoft came out and announced their investment in open ai and chat gpt, i think a lot of people perked up and paid attention. there's a huge difference between ai and something like, say, the metaverse which could be a decade off. we're talking about this is going to come to fruition in months companies that benefit microsoft is going to be a leader there

i like ibm in this space google, even with the barred mixup, they'll power ahead >> sylvia, thank you for joining us appreciate it very, very much. >> thank you >> we've had a big show, guys. becky and joe, a lot of good stuff today. that target interview super important. >> and jim was right the goldman sachs interview was very important good job. >> thanks. we'll see you tomorrow join us tomorrow "squawk on the street" begins right now. ♪ ♪ good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david cramer is at the new york stock exchange. we'll close out february today yields on the march again. lots of macro and micro, target, goldman, chevron, zoom and more. our roadmap begins with stocks, on pace for the second negative