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

month. why one top strategist sees more downside risk ahead. >> target sees holiday sales growth but warns of a continued slowdown or at least the risks of that. and the ai boom, microsoft, google, meta and apple are poised to benefit while the ftc warns companies over their ai claims. >> let's begin with the markets on this final day of february. jim, a lot of discussion yesterday about light volume in equities and all of these lines, moving averages sort of mashing together >> look, the only thing that matters is the ten if you think the ten-year is going higher in interest and lower in price, then all this stuff doesn't matter, all the stuff you see. nothing matters. you get up and the rates are marginally higher, whatever happens with stocks is meaningless. the stocks are too small these big hedge funds, they just simply go between s&p and sell

short s&p on the ten-year and buy s&p -- >> a lot is algorithmic, right >> it's all algorithmic. i can go on and on at how good target was the ten-year flashes red and no one cares. i'm not saying, therefore, david, there's nothing to do i'm saying everything is marginalized by the ten-year. >> we've had other moments where we had the same conversation >> absolutely. remember, on a lighter volume day, the ten-year really rules on a day where we have the ten-year doing nothing, then the earnings come to the fore. i think if you have the -- let's just say the foresight of reporting on a day when rates are good, then i think you're fine remember walmart had a day where rates were good and stock was up

seven. now they're back until we overshoot on the ten-year, until we literally get to where we're supposed to go and then past it, all this stuff is draws it drives me crazy it's draws, but it is. >> you did tweet this morning that your experience tells you you have to overshoot on the 10 and the 30. >> yes 30 because it's mortgage rates i was listening to a guest talking about housing and recession. i said, okay, i don't know, but it's not -- that's the problem housing is a boom. so you have all the -- i talked about this last night, get these distortions. housing should be in recession, but it's not we have a lot ofthings like autos should be in recession, but boom housing should be in recession, but it's in boom i don't know what to do everything is doing what the fed wants. >> that's comments are part of what david solomon's view was when andrew asked him about the macro view that he has

inflation going to be stickier we're going to muddle through. softer landing he was all over the map actually. >> he was all over the map he was all over the map. i needed a map >> your point on housing is great. apollo has got some charts today of home buying traffic, home builder confidence, inventory. they say the risk is that the rollover that we would like to see and shelter might not come >> the craziness is the strongest month, like the last six months was january i'm not saying the economy is mocking jerome powell. i'm saying as long as mortgage rates stabilize, the buyers come out of the market. that has to do with the secular trend. doug yearly who i think is the new statesman for housing, ceo of toll brothers, talks about a house deficit. we see that people who are

renting, there's apartments -- david, what does blackstone say? >> about what? rentals? >> they're the arbiter of housing -- >> they do have a lot of individual homes for rent. >> what do they say? are they renting >> i think market are still pretty tight we do know that they're starting to show some signs of retreat from the highs in terms of rents. >> but not where they should be at this point in the tightness cycle. >> you think there should be a lot more >> yeah. we keep hearing we've had the most furious tieghtening sickle ever then nothing steel, hot and cold rolled steel hit the highest they've been in ages that's supposed to be plummeting it's a thousand, supposed to be 200. i like what they're doing, but it should have more impact when you hear brian cornell talk about stickier inflation, you say to yourself, well, why is

that you mentioned freight. freight has been plummeting. brian cornell is a fabulous merchant i have to tell you, i think he completely low balled. discretionary inventory -- inventory is the only thing that really matters right now he's cleared inventory, 13% discretionary recline. the stock will go down because, i don't know, people don't understand it and they take the reaction from other people who take the reaction. david, i've never met -- the street is sheep. they're sheep. >> it does happen a lot. it does. particularly in a period like this. >> sheep have very bad arthritis. >> very bad arthritis? >> oh, my god. i'll tell you something, you get a real nice kind of rug or -- sometimes you don't -- >> poor sheep. >> they can make a comeback if they don't have arthritis.

>> you want to hear what cornell had to say >> i memorized it. >> you did >> yes, i did. quiz me. >> let's listen to him and see if you're right. i like cornell. >> he's from whitestone, from queens. >> i do know that. >> inflation has been very stubborn sitting here today it's down from the highest rates inflation is still a factor in the business, still pacting consumer and their spending. we've got to watch that carefully. it's impacting costs, still impacting transportation we're still far away from a more normalized environment >> what can i say? he's right, but i also can tell you when i go to the stores, the prices are lower prices are definitely lower at walmart. i just don't know what to do with what he said. target with inventory clean is able to stabilize price, but what he doesn't talk about is that 30% of their business that is private label is cheap. >> right

of course, we saw that with walmart. >> do you ever buy good value, the good value food? it tastes just -- it tastes the same. >> i referenced goldman ceo solomon earlier in his conversation with sorkin he said general consensus is inflation is going to be stickier when he talks to ceos down to 3, let alone down to 2%. >> what about year over year we'll be okay. costco will be disappointing nobody gives a damn. >> introducing a lot of uncertainty about the consumer particularly in the second half of the year. you've got conservative guidance from a lot of companies. >> right, but why not? this is 2023 you can beat and raise, beat and raise, beat and raise, and then bingo, you've got a higher stock. bingo, you've got a higher stock. >> bingo. >> so when mike wilson and today huberity say look out for the

final month of the quarter because that's where the lion's share of the estimate cuts come. >> -- they raised the estimates today. go buy it. it's a good situation. she's looking at charts. i can look at charts, too. i can look at charts david, how are you on charts >> you know me i have them all over my house. >> she's liking europe. >> where estimate revisions have been positive. >> that's what i say, steel of a lifetime. >> numbers in singapore in paris? >> they're us, and we're them. >> 110%. that was my favorite >> dourm when sanitary rah was std. it's no longer there it's san that piece of paper right now, i want everybody to buy that piece

of paper, $3.95. it totally plays into the chart that katie huberity wants us to do such a good banker go buy san darren. how about the trillion dollars -- jpmorgan is going to be a trillion dollar bank? >> 10 years, 12 years. >> when we're all dead i think bank of sarin has a market of $62 billion. i'm saying right now it goes to 100 billion. spain, strongest country in europe is spain. we're a podcast, damn it you've got to say more -- >> i've got to get there they stay up all night, i know that they're spending money at all hours. they party endlessly there. >> that's not school how much are you paying for

that 100 gs talk to jamie. he's on the board? >> no. >> why isn't he on the board >> i don't know what he's talking about. >> i'm talking about, if you're going to look at the charts, then i'm giving you the analog for the charts which is not jpmorgan they just raised numbers this morning. i look at what people are saying, and everyone is equally confused because people have been low balling -- you have sticky inflation at target now, costco tomorrow will say, you know what, there's sticky inflation so we're calling all the people that supplied us and we're saying we're rolling back your price walmart is saying our private label is as good tomorrow we'll hear rich guillainity say our kirkman label is better. you're trading up to private label. i love that story. this is what is happening. we have to understand everyone

has their own rap. >> it explains what solomon said on "squawk." looking at what's at stake for those who run a business in the next 12-18 months. take a listen. >> i think the general consensus is inflation is going to be stay i canner, stickier and harder to move from where it is now, down to 3%, let alone 2%. in the context of that, higher rates, longer sluggish growth, stickier, but a better chance we can muddle through with a softer landing. i think there's a little more optimism because people's businesses have been performing better the consumer has been more resilient. service businesses in particular have been doing very well. i think we're in a place where there's a little more optimism about muddling through i think inflation is going to be sticky and hard. i think anyone running a business has to be prepared for kind of a bumpy 12-18, 24 months. >> david faber, if you think

inflation is stickier, what stock do you buy >> i don't know, jim. >> schmucker reported today, peanut butter. is there anything stickier than peanut butter? >> i would not have gotten that one. >> mark schmucker was on, not that i haven't worked hard to get him on my show that company reported the best quarter. they are pet snacks, jiff and coffee, bingo, all sticky. >> isn't the problem, though, as they take price that valiums shrink we've seen that over and over this quarter. >> there's no amount of money people won't spend on pets lemonade has pet insurance pets are winners peanut butter is a winner because it's what you have when you work from home i have an analog for the market. i don't need katie huberity. i have schmucker don't tell me to wrap up darn it.

i'm getting somewhere here. >> you really are. >> i've got sticky on inflation, sticky on peanut and sanitary rah is doing better than any other bank >> enormous amount of knowledge imparted by you in the first 13 minutes of the show. well done. >> that suit is dynamite. >> thank you >> it's canally. >> it's zain yeah. >> i can spot zain yeah from a thousand miles away. the italian economy is too early. >> too early. >> when we come back we'll get to the ai arms race. mark zuckerberg's new team at meta, b of a unveiling new top picks. take a look at futures nasdaq just going negative don't go away. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only

an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back. conventional thinking delivers conventional results. at allspring, we break away with purpose. harnessing data-driven insights and boundless curiosity. we dissect the market from every angle. helping to build portfolios that redefine what's possible. because investing isn't one size fits all. allspring. purposefully divergent.

ai is really the moveer and shaker here. it is going to catalyze more innovation because it's at the heart of convergence between technologies autonomous taxi platforms, tesla will be talking a lot more about this now at its march 1 analyst day. they're the convergence of three major innovation platforms, robotics, energy storage and artificial intelligence. those are three different s

curves and they'll feed one another. i think it's going to be pretty expl explosive. >> that's arc invest cathy wood talking with us yesterday. mark zuckerberg says facebook's parent is creating a product group focused on ai. it will build creative and expressive tools for products including whatsapp messenger it's one way they can get around some of the apple obstacles. >> i think he's much further than he let on he's been working on this for quite some time. i believe their ai strategy -- david, you know i think they're going to monetize whatsapp. >> you've said that many times it's got to be the large companies that pursue this in part because it is very expensive. you need to amass vast, enormous lakes, as they call them, of data and you need amazing amounts of computing power as well. >> and that is nvidia. >> a handful of companies

capable of pulling that off. that said, guys, did you happen to see this op-ed from kissinger, eric schmitt and a professor i think at m.i.t it scared the heck out of me if you haven't looked at it, take a look at it. there it is. it was frightening the complexity of ai models has been doubling every months systems have capabilities that remain undisclosed even to their inventors. with each new system they're building new capacities without understanding their origin or destination. it goes on from there. huge commercial mode will for the foreseeable future take precedence over long-range thinkth about their implications. >> sky net. >> i'm telling you sam walt man talk about it, the

father of chat gpt who knows? >> i want to step back a little from the sky net -- >> i know. there are going to be a lot of commercial applications, a lot of potential investment opportunities. but man, i encourage people to read the that op-ed. >> what happened to democratizing computer power to me, jenson wong has been saying endlessly, and it's not been picked up, that this is the ability to talk to a machine and get an answer. that's what is being left out, is people who don't know how to code which is a substantial part of society, can take -- can create codeless projects >> sure. >> you don't have to -- you don't have to have anything that requires a stanford degree to be able to say i want -- i have a cookie business and i want to show my cookie is doing x and i

want to say they're that instead of using all sorts of adobe and everything they you need, boom, they do it why isn't that great >> b of a basic lir has a list of 15 ai picks, all that you expect, microsoft, meta -- baidu, rolling out their own on the 16th. >> i thought they were blocking chat gpt because of freedom. >> it's going to be for the good of of mankind, all of it. >> you're so cynical. >> we're not doing this by ourselves. >> no. >> to serve mankind. >> count the days. >> this thing is doubling every few months >> makes tiktok look like -- >> government out of tiktok by meta i'm telling you, zuckerberg is going to be the leader because he's the most ruth lsz. >> he'll be the winner because

he owns new zealand and he can go move there. >> i thought larry -- larry ellison owns hawaii. >> i was kidding i don't think he has anything to do with new zealand. >> somebody who used to work at the network owns new zealand. >> yes we'll get cramer's mad dash and count down to the opening bell, take a look at futures one last time as we get falrangda ain tdi y of february in 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. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it!

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take a look at some of the laggards this morning. you'll see norwegian in there with a business of eebitda targets. booking volumes accelerating in

big amounts. opening bell coming up in a couple minutes don't forget you can catch us any time anywhere. listen to and follow the "squawk on the street" opening bell podcast.

welcome back two minutes before opening bell. let's squeeze in a mad dash. what have you got? >> i'll talk about again the paradigm for right now burberry introduces carl esh en back as co-ceo he does a terrific number, bringing a lot of new people doing terrific in the financial business it's not just human capital. he's winning great logos as they say. he has an amazing go-to-market strategy, a cliched term meaning selling. david, because they had a slowdown from 19 to 18%, this stock will be down five. to me, are you kidding this company is doing so well. the only reason that you possibly want to sell is you may not -- you don't want to ever

see anil leave because anil is so great this is the world we're in right now. people want too much he's already fired people. the companies -- he'sic thatting business away from people in the cloud who have go to market strategies i look at this and say what more do you want? it makes me blanch at what as far as is doing. >> salesforce is tomorrow. what do you think? you and i have not discussed it in a bit obviously i had reported that a settlement potentially with elliott was not far away could have been as soon as last week, but it hasn't happened will we see something? >> i don't know. there's the -- >> you tweeted something over the weekend. >> there's the paypal way where dan schule man transitioned out. i don't want that to happen to mark i think if he challenges the

whole board, what that says is mark has to go we know that's one of the options. i think that sends the stock dramatically lower mark has built a great company you don't want the architect of as far as to leave salesforce. put a couple more people on the board that are advisers and overseers and then move on >> carl, we have a market where anything that's so-called enterprise software is going lower, and i think that's -- again, i urge people to take a little -- take a little more of a buffett deal he doesn't advise you to sell on a bad quarter. >> a look at the final day getting under way. group automotive celebrating 25 years, the nasdaq lkq corporation, provider of specialty auto parts. >> that's a good company.

>> at least they're rewarding zoom in the premarket. >> i was going to mention autozone someone said that was a weak quarter. that was a great quarter i felt that zoom is how the market stuck they fired a lot of people the gross margins went up. there's very little growth we know they're starting to win business they've got this great rewind business where you can do a meeting and look at it and critique people which is very important. if you're going to have a good go to market strategy, you might need zoom. who is going to win, the companies that grow their business faster? i think the real winners are the companies like you have at palo alto with aurora who is growing faster and improving margins this is going to make david sit up and take notice gap, positive. >> not asterisking the spc, but

gap positive stock-based compensation, no what we're going to do is be like general mills that is welcome, david the stock-based compensation charade has to end. >> i don't know that it's ever going to end it could diminish. >> we're going to not accept earnings that hide stock-based compensation. >> a lot of investors do adjusted ebitda. >> that's what i'm saying. >> so you're saying it's going to be? >> yes because you can't get a high multiple workday, told you exactly what their gap would look like. then it tells you what non-gap was. if you're saying deceleration in an often believe by bad environment is the reason to sell workday, i think you're out of your mind that's what we're struggling with if you have any type of decel,

people sell. i think that's too shortsighted. if we have any uptick in the economy, you're going to regret it >> right keep an eye on what's moving at the open you mentioned advanced auto parts. advanced auto parts -- >> and autozone, one of the greatest stocks of all time. it was up 12, now down 7 that's great schizophrenic. i don't know if you're reading about how the leopard tank doesn't work and there's -- these countries are giving three leopards or four leopards. the only one that really works is abrams, made by general dynamics with a honeywell engine i think both stocks are good there's a guy who hates honeywell so much. i don't want to mention who he is we'll have to provide weapons and advanced tanks and we want to be in that business.

>> we really stayed away -- the abrams takes an enormous amount of maintenance and fuel. >> but the leopard doesn't work. look at that honeywell chart isn't that awful i think it's a great company nobody cares i wonder if katie huberty likes that chart it's got the line at 190 are you going to go there? >> where >> i don't know. >> i was going to go to a name i haven't mentioned in years, guys. >> hold it what is russian prune juice. >> no. >> trotsky. >> the best. >> i got it. took me a minute dish, i haven't talked about this company in ages it's a $6 billion market value there was a time when i talked ability it frequently. i haven't talked to charlie ir

ginn, founder, largest shareholder, still ceo got a double downgrade today came off earnings looking pretty good late last week. i remember reading the moffitt nathanson note, and that wasn't particularly positive. now b of a, now they downgraded to an underperform not really helpful at all. >> what's the price objective there? >> they go from 30 to 10. >> but the point is, a number of investors and the analysts are taking a look at the quarter and saying, actually your satellite business held up pretty well, it's still deteriorating but held up pretty well, but where are you in terms of providing sort of a nationwide 5g network? well, you're not as far along as we thought, and the opportunity set there may not be as far along as had been anticipated. we talked about this with john stankey and other leaders in the

wireless business. where are all the apps we thought would come around as a result of 5g where are all the different use cases? they're not here yet so there are just a lot of questions about whether they can execute on that plan and whether there's a real revenue and cash flow opportunity, whether they can get to it quickly enough before they run out of the ability to fund that business. they already need to raise more money. it's not clear exactly where that's coming from for dish. you've seen what's happening >> meanwhile, at&t yesterday presenting, talking down some q1 cash flow expectations and throwing a little shade on the viability of fixed wireless over the long term. >> sometimes i regret i even say go to a hold on this one at&t is very troubled. verizon at 37.8. >> verizon lowered their own 5g centric long-term growth outlook. it was only issued last march in part because, again -- i asked

stan kirks when are we going to see all these different applications that we heard so much about years ago when 5g was still in the offing. they will happen many will be in the enterprise but they haven't come yet. >> people still talk about t-mobile having the head start on everything. >> vrds will dispute it, but many believe it's the best network, at least for 5g >> it's just a bad area to be in, a bad area to invest in. >> then the question becomes with dish, just to get back to that, value of the spectrum, it's significant who needs it how do they buy it, if they were to decide we can't make this work it's a long ways from the $35 billion company it was at below a $6 billion market value. >> when david was out, the dhaunt shined the brightest, shined like a diamond was warner brothers discovery >> yes they had at least a well received quarter.

>> well-received quarter and saz love, it was a tour de force analyst. >> happy with him. tour de force? >> tour de force >> i may send him the best that i have of my olive oil at porterhouse. >> i'm competing with you to get an interview with saz love since you're buttering up to him >> don't do it, david. >> this morning i lost brian cornell -- >> you didn't lose -- you don't get that. >> why was i -- >> meanwhile, try to just execute. that's what you've got to do if you're warner brothers discovery. they have been focused that's what they deliver to a certain extent therefore, they got rewarded late last week after they rere rereported again, stock up 67% this year.

>> it's been kind of -- it's down so long ago, it's up from that chart. >> the only other stock that's up more than that this year, it's up again. >> paramount global? >> tesla >> one is that china ev data says maybe sales slowed a bit now that they had to reverse some of the price cuts musk is once again the world's richest human. amlo saying they are going to build -- >> that was unbelievable to me amlo completely underestimated the mexican peso has been underestimated the last six months david, how did they let the deal happen which eliminated -- the most anticompetitive deal. if he puts that -- if musk puts it together he will be a hero.

>> the deal hasn't been -- >> it's going to happen. >> what? are you breaking news. the deal is done >> no. >> i'm saying done-done, not done >> stay focused on that deal. >> i just mean, if they let that deal go through. >> it hasn't been let go through yet. >> but everyone feels it is done >> i know. >> you're the only one i know that said it's not done. >> amlo, the guy that runs mexico, and mexico is very pro -- they're starting to talk about drilling more for their meager -- i just think mexico is the country to watch right now because they are getting a lot of business and no one seems to care, and i think it's the same. general raimundo is talking about honduras, el salvador getting business it's working there's a policy that's working in mexico. when i saw musk is going there, that was the green light i've been waiting for.

>> we talked to mobius yesterday, trying to create a more enticing environment. >> i think mexico is fantastic everybody i know who has opened plants in mexico in the last two years, now that the trump year is over, so satisfied. i think it's worth following >> i'm glad you mentioned drelg. we have the guidance on cvx, the buyback guidance then you have oxy guiding a little light, although a nice div hike. >> i'm shocked chevron isn't up more that's okay because mike werth is on my show tonight. how about that for uberous >> well done. >> occidental, i didn't expect the dividend increase. there's been seven months that oil has been down. that's just too long. >> we finally got a little bounce in nat gas the last four days and best day yesterday. >> and people keep buying eqt,

keep checking to see if it's the most hit-up symbol that's ridiculous. co-tara is the company that bounces between natural gas and oil. i think nat gas is done going down >> why >> because the case for natural gas is incredible overseas i have enbridge on tonight they're working hard to get oil seas. >> freeport is still not open? >> no. watch the port arthur facility come on strong we have so much nat gas to export, we know right now it's been warm. that's hurt the case. >> yes winter is enough getting towards the end, thankfully. >> did you hear that >> tomorrow is march 1st. >> i have an app that tells me where we are, the calendar app. >> although it did snow a little. >> you're absolutely right 10:28. you know what this is? >> tapping me on the shoulder? >> shoulder month. >> shoulder month.

>> we celebrate shoulder month around here. >> always coming up with stuff i've never heard of. >> should earl month for natural gas, the hardest to predict. >> oh. you got what you wanted in target, stock up 2%. >> well, i did my best. >> i know you did. >> maybe you'll come on my show next testimony time zbl /* /* time. >> it's all about getting people on the show. >> 100%. what happened to you >> corporate darwinism. >> you should listen to carl's interview with me where i basically talk about my father having the boston-norfolk route and i said that would never happen to me no bif for me. >> did you tell your father that >> i went over bif. >> you did an interview where? >> the investment club's first in-person meeting. >> i gave ridiculously positive and correct answers, positive

meaning that i addressed your stuff. people have to watch that interview because i didn't expect -- i knew you were going to mention my dad. i did not know that it would be such a focus because he did drive me into the ridiculous battering ram i've become where at this age i'm still furious to see desol up. >> you're competing to get the ceo of schmucker. >> absolutely. anybody who knew to get rid of the food and kept the pet food, that's better than gravestones on the grave. >> colgate has a big pet food business -- >> hill's lost share have you seen how much science diet lost in share i took the yardstick out when i was in petco i can't believe how much share they've lost. >> let's go back to colgate -- >> lobe was there. >> lobe is everywhere. >> there was the prospect of activism there i know they were geared up for it on the colgate side

they had their advisers, evercore, altman ready to roll. >> center bridge >> center view >> i was being mean. >> i don't even know what you're talking about. >> they won't talk to me either who? >> never mind. >> that literally was nonsensical. >> center view >> i know. it was meant to be a kind of like -- >> he had nothing to do with this. >> let's get to rick santelli with chicago pmi >> hi, carl. february read on chicago pmi expecting the number around 45.5 do remember we haven't been over 50 since august. so one, two, three, four, five -- this is the sixth month it isn't under 50. 43.6 it's the weakest since november of last year, and in between on that run of under 50, we even

breached 40 which is our comp here, 37.9 in november we still have consumer confidence and richmond fed left we see interest rates are moving up maybe the terminal rate for the ecb may be at 4% overseas rates along with ours all moving together. "squawk on the street" will return after a short break power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools,

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market trying to turn around in the back of the weaker chicago pmi number as yields tick down a touch. there's a look at some of the gainers, after closing out a month where semis did ryve well.

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everything's changing so quickly. before the xfinity 10g network, we didn't have internet that let us play all at once. every device? in every room? why are you up here? when i was your age,

we couldn't stream a movie when the power went out. you're only a year older than me. you have no idea how good you've got it. huh? what a time to be alive. introducing the next generation 10g network. only from xfinity. the future starts now. one bit of news yesterday was some of the funding guidelines out of commerce regarding the chips act.

pretty interesting can't expand capacity in china, do health care, share excess profits down the road. >> lam research lost about $2 billion in china people are buying materials, they're all great companies. you're buying it for 2026, that the market tends to have memtsry of a may fly, so you're buying it today, sell tomorrow. i don't think that's smart i think selling advanced micro is stupid because what -- everything that we learned from the last quarter of nvidia is the gaming chips and data center chips are no longer in glut so buy amd. the idea, i like lam very much and tim archer, but these are things that have to -- it takes them forever to make equipment. >> we're looking at etfs positive for the month, cyber and semis. >> right semis, that's nvidia i mean nvidia is not really a semiconductor company. nvidia is a super computer

company, but they have a $300 billion market in hardware and software and nvidia is going so hard into software no one seems to think about that. >> we talked yesterday about whether or not dell and hp will give us any kind of clarity -- >> hp, enrico, he's got to say that he agrees that the chip glut is over they had 37% decline in pcs. that's outrageous. other than typewriters, anything declined that fast. >> as you pointed out, everybody outfitted their home offices and upgraded as they needed to. >> there's no new innovation you can talk to a computer in video land but you have to type this. >> to stop trading. >> i want to go back i think mark is -- marc benioff is going to stay, and i think there's going to be a good chaps of still more board activists.

i don't think -- i think that activists have realized if you push marc too much and make it so his life is miserable, then you have a company that's not going to make as much money when things get better. i think that people -- david, you may disagree -- marc benioff's record is extraordinary in terms of growth and profits and it has a bump in the road i think marc is here for ten years. >> really? >> yeah. >> okay. >> sure hope so. >> stock down, we'll see. >> that sends the stock down >> what about the earnings tomorrow >> he fired a -- the companies that have fired a lot of people and done buybacks have tended to do well, but if you even guide down by 1%, al la workday you have a stock that under performance because the market is -- i'm sorry, because workday shouldn't -- 19 to 18 is a desell i think salesforce is good because marc stays good. >> meanwhile cvx tonight.

>> chevron and micron will tell a great story. enbridge is bringing out a lot of oil from canada new ceo. he's terrific. and then joth ritchie, they're expanding and trying to get to 4,000 in a couple years. you and i will go for an annihilator and we'll both be up for three days like drinking sterno but good >> awesome can't wait we'll see you tonight. "mad money," 6:00 p.m. eastern time as we try to get back to 3980 here. don't go anywhere.

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so you have a home with no worries. brought to you by adt. good tuesday morning welcome to another hour here of "squawk on the street. i'm sara eisen and carl quintanilla and david faber. live from post nine at the new york stock exchange. take a look at stocks on the final trading day of the month of february. hasn't been great month for investors. unchanged on the s&p 500 nasdaq outperformed. that's been the theme of the month and of the year so far, where the s&p 500 is going to go out with the month with a decline of more than 2%.

the dow even worse, negative for the year nasdaq composite is up for the year and had a lesser decline for the month of february. we're about 30 minutes here into the trading session. we've got three big movers we are watching target topping wall street estimates for the first time in a year as its holiday quarterly sales rose 1% from the same year-ago period. we have more on that name later this hour. zoom, rallying after posting a beat on the top and bottom lines for the fourth quarter it's not rallying anymore. it was premarket had a gain of 4% negative now the stock still down around 40% over the last 12 months of trading. then norwegian cruise lines sliding, reporting a wider than expected loss for the fourth quarter. norwegian's earnings guidance for '23 coming in below expectations the stock down 9.5%. heavy data day for the economy consumer confidence numbers just out. rick santelli in chicago has that for us. rick >> yes

sara, our february read on the conference board consumer confidence expected to be in the vicinity of 108, comes in lower, 102.9. that's the lowest since november of last year but the present situation a different story. it is better than expected and higher sequentially at 152.8 it is the best level since april of last year finally what lies ahead are expectations, 69.7 that's less than expected. sequentially lower than the slightly revised 76 and 69.7, well you have to go back a ways to find that number. 69.7, lowest since july of last year quickly, richmond fed manufacturing index for february also a miss at minus 16. that is the worst level since may of 2020. we see interest rates are ticking down a bit and still

have not been able to cross over in the 4% zone all treasury raitsz higher on the session and we continue to monitor the upward pressure we had earlier in the session from european rates as we see that ecb terminal rate is now approaching 4% carl, back to you. >> all right rick, thank you so much. rick santelli. consumer confidence, of course, just one piece of the macro picture today that's in focus for investors. goldman sachs david solomon on "squawk" talked about inflation, and it being stickier. take a listen. >> i think the general consensus is inflation is going to be stickier when i say stickier, harder to move from where it is now, down to 3% let's say. i think we're in a place where there's a little bit more optimism about muddling through, but i think inflation is going to be sticky and hard and has to be prepared for a bumpy 12 to 18 to 24 months. >> whether that's case-shiller with deet sell rags in home

prices, you saw chicago pmi and conference board now the market will welcome numbers directionally soft, sara. >> i think the consumer confidence number is important it was our first read for february and it was weaker, which is a good thing. i mean it's not a good thing for consumers to have less confidence, but the market has been rattled by all this good economic data we've seen that has been the story of the market in february weaker market, digesting strong economic data and a higher outlook for the federal reserve fed funds rate we're at 5.4% on the rate. that's what the market is pricing in a month ago it was 5%. that's the adjustment. it could have. worse frankly, given how sensitive last year the market was to the fed rate -- >> it could be worse doesn't mean we're done. >> bofa suggests 6. >> will said 6 too 4% priced in as rick said for the ecb terminal rate. spain and france put out

inflation numbers and saw pretty big monthly jumps in inflation, so the inflation story will determine what happens this year and at the same time, the economy. we're still trying to figure out what's going on there. >> yeah. jpmorgan had a great chart last night. core goods inflation in this country three-month annualized down 1.5 we've done good woodchopping here, but the rest of the world running 6 to 8 the 50 basis points discussion is going to get a little more tender in countries or areas like europe and the u.s. >> the other question, guys, what to do, you know, with this market because year to date we're still looking at gains for the s&p 500 and the nasdaq can the markets stomach higher rates for longer, given the fact that we still could be closer to the end than the beginning if the fed continues on the 25 basis points hike path which is most of the market expectations at this point. a lot of wall street strategists have been bearish, morgan

stanley, jpmorgan says the risk-reward is not good. if you look at some of the action in the positioning, traders are getting more bearish. i wanted to pull up from citigroup. a lot of outflows from etfs and more pessimistic conditioning. citigroup says more bearish swing last week add 3g billion shorts to s&p futures positioning which is notable. >> although individual stocks seeing inflows the hope that active management will come back to the for is something that's rewarded. every year seems to end with the active managers trailing badly. >> there are two questions we don't know the answers to, how fast will inflation fall from here and how badly is the economy going to get hurt. we talked to cathie wood yet of ark. she is maintaining that inflation will come down and the economy will get hurt and the fed will have to cut rates

here's her view. >> we think inflation you coming down now it always seems like it could come down faster, but we do believe it's on its way down you listen to corporations out there, even those who have had pricing power, the staples, p&g, they get their pricing, but they lose the volume. 6% declines in volume for a staple company so we do think the consumer is railing against inflation and the fed certainly is doing its part and money supply growth is down our estimate is roughly 3% on year-over-year basis we haven't seen a decline in money supplies since the great depression in the 1920s. >> i don't know if the consumer is railing against inflation because the consumer spending numbers in retail sales have been holding up nicely perhaps the consumer is starting to push back and feel it and be more discerning. we heard that from walmart and home depot target, i talked to the cfo of

target today about these results and what they say about the overall consumer he had two comments for me one on inflation, which he says has been very high this year and does not expect it to come down any time soon. here's the, quote. persistent this year, don't expect that to change much on the consumer we appropriately cautious on consumer and issuing a wide guidance range as we still see a softer discretionary trend out there. they see it in apparel and toys and electronic, the so-called hard lines where it's strong and cosmetics and food the consumer pushing back. >> talking about it being years in terms of what they call external conditions normalizing and their guidance getting back to sort of what they anticipated for a prepandemic rate of 6% operating income margins years. and again, you heard solomon say 18 to 24 months. this could be a long period. >> mean time, with inventories down 3, maybe we got -- do we

wring out all the disinflation - >> perhaps that's what that signals. it's a good sign they're able to get their inventory down that was a big problem for their profitability. it's why they feel more confident in their profit forecast for next year the fact that they're seeing the consumer weakness is notable there's one -- everybody talking about how strong the january data is. there was one data point not to be a debbie downer i want to mention. people like cathie wood, people are talking about this it's the leading economic indicator. >> never call you a debbie downer. >> have the camera zoom in on you really tight and talk about -- >> give it to us. >> leading economic indicators are not good, that's the conference board puts it out and compiles credit conditions and hiring expectations and permits. all this stuff at the leading edge of what it's going to tell us ate the economy look what it's done. >> six straight months at least.

>> it was negative in january. better than december negative again we've never seen readings like this where the economy does not have a recession afterwards. i would just say keep an eye on this because a lot of bears will tell you, inflation, retail sales, unemployment are all lagging indicators. >> indeed. we're looking for high frequency stuff. >> all right that's a good place to end. >> for a downer. >> yes on that downer. a guy who is always uplifting, mike santoli, of course our markets compen tater, a sense of what's going on in the market action. >> i'm only uplifting when everybody else pushing down. let's take a longer term look at the s&p 500 because i do agree that the risks are more top of mind with most people, but the potential rewards. here's a two-year chart of the s&p 500. you see we're kind of right in the middle of where we've been over the last 24 months. as a matter of fact, almost exactly flat from two years ago and the 3900 and change range at the beginning of march in 2020 remember, march of 2021, we were

coming off of that blow off top in the speculative parts of the market and kind of more traditional index names carried the way for the remainder of 2021 looks like a routine pullback. we're still in the zone off of the october low and a lot of people pretty pleased with that general setup that we have right here i think a big question you, is the 2022 playbook still in effect take a look at year to date stocks versus bonds because last year we know what happened every time stocks got a little bit hopeful that maybe the fed was done or the economy could have a soft landing or it was time to take risk again, the bond market kind of threw a wet blanket over it and yields went higher and bond prices went down you see aggregate bond index on a price basis is flat. it was up in january, gave back the gains. you see the s&p 500. most people would have signed up for 3.6% price return in the s&p. one sixth of the way through a new year it feels like it's been tougher just because we're giving back

some of the january gains. we do have this gap that has opened up a little bit i don't think there's anything that says you have to always close the gap. to your conversation earlier about how yeah, we're still at least probably closer to the end than the beginning of what the fed has to do, you tell the market, we might have to do a full percentage point more in rate hikes and say it's great, we did 400 basis points may of last year and the stock market still in the same place. i understand it's cumulative and we have to adjust to new levels. leading indicators are not good. we went down 25% in the stock market when earnings were at their pack and, you know, essentially before the fed got near its target. i think we front-loaded a lot, maybe not all. >> what's the market telling us about expectations for the economy in terms of is it still sort of in the sweet spot? >> depends on what day you ask it. >> earnings expectation can factor in there? >> weaker. it looks like we're prepared for something to soften up but we're

softening up from a higher level of activity because january was so good and doesn't seem like it wants to go easily i do think there's a mutually assured frustration trade which would be more range bound, a little more of like we get some hope and then it gets knocked back and when we get to the lows we have valuation support and maybe the economy sturdier wouldn't be that surprising to be in that zone for a while. >> appreciate that morgan stanley this morning. -- mike santoli this morning. china's disconnect with u.s. businesses as the country tries to attract americans to expand their investments in china we're going to go live to beijing. plus, florida governor ron des desantis signing a bill to give him more control over disney the kingdom comes to an end. don't miss our interview with silver lake co-founder glen hutchins big show ahead don't go anywhere. dow down 160

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a hearing looking at businesses in relation to china eunice is live in beijing with more hi. >> chinese officials are on a charm offensive to try to convince global companies it's worth investing in china the directive is coming from president xi jinping himself calling on -- for greater efforts to attract foreign capital and foreign investment

on a local level, officials around the country are trying to pitch to international companies, relaunching event and also dispatching delegations to trade shows prioritizing the u.s. and europe, cities including shanghai have instituted foreign talent recruitment drives as well saying that there's plenty of funding for that there is, though, a lot of work that needs to be done. the past year, the international business climate has been badly damaged because of zero covid protocols, slowing chinese economy as well as the political tensions between china, and its trading partners in fact, foreign investment in china hit an 18-year low in the second half of last year a lot of foreign executives are still very weary because of the political climate back home especially in the u.s. the new house select committee for china is going to be assessing china as an economic

and political threat a lot of people here very concerned about possibly being called in for one of those hearings at the same time, china is sending mixed messages itself with its anti-china rhetoric in fact, what the latest example is, elon musk warned by the communist party paper "the global times" after he retweeted a post that seemed to be promoting the idea that the coronavirus emerged from a wuhan lab and this is a very sensitive topic in china the latest examples of the risks of doing business here. >> meantime eunice, we talked with jim about the chips act and restrictions on expanding capacity in china. bloomberg piece about apple suppliers racing to get out of china. goldman says it's going to get bumpier to do business there in the next couple years ahead of

the national people's congress where we're expecting more headlines. >> yeah. absolutely in fact, from the national peoples congress headline in that respect, a lot of people expecting the leadership to announce bigger plans to ramp up china's own self-reliance on the technology and see a more investment in various areas including a.i. and other telecom technology in terms of the kind of changing of foreign investment climate, something i hear a lot these days is internal decoupling. there are a lot of companies that are not really thinking so much as getting out of here wholesale, maybe a little bit has slid down, but the idea i hear the most the idea to split the china business and build an internal wall to make sure you don't have technology leaks or other problems.

>> it's going to be a remarkable and difficult thing to watch happen at scale among big businesses interesting days we'll talk soon. eunice eun. >> shares of dish off the lows stock got a double downgrade at bank of america. $30 price target, go to 10 they've been wrong for some period of time continued questions about the ability of the company to fulfill its ambitions to become a nationwide 5g player, given all that spectrum it owns. it's going to require more cash. its direct to satellite business is doing okay versus expectations, but continues to decline at a significant rate. by the way, speaking of that, there was a network outage due to a cyber security breach and it is possible as well the company says personal data was taken. we're back in 2. with angi, you can connect with and see ratings and reviews.

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welcome back to "squawk on the street." i'm dominic chu. we are taking a closer look at the consumer discretionary sector those stocks on this more mixed trading day. we mentioned movers earlier in

the show like target and norwegian cruises but they're not alone. if you look at advanced auto parts, one of the best performers in the s&p after beating analyst estimates on revenues and profits dollar tree also in positive territory after analysts at piper sandler reiterated overweight rating and raised their target price on that stock as well. keep an eye on advanced auto parts. those shares up 4.5% i would send things back down to you and the team. >> thank you yesterday florida governor ron desantis signed a bill into law stripping disney of its self-governing status in the state. remember it had that district that covered its florida theme parks and had granted the company control over zoning, infrastructure, had its own police force a lot more no longer. desantis saying this legislation ends disney's self-governing status it makes disney live under the same laws as everybody else, and ensures that disney pays its

debts and fair share of taxes for its part, and of course, i do regret having not had an opportunity to ask mr. iger about this, current ceo of disney a few weeks ago when we sat down we went 41 minutes and ran out of time. but about his response what has been notable thus far is silence from disney they haven't said anything they've chosen not to engage here, at least at this point kind of brings you back to what's in desantis' book where he said that he advised then ceo bob chapek not to get involved with the legislation you will end up putting yourself in an untenable situation. the legislation there was different, the controversial legislation that disney did choose to voice its opinion on. >> yeah. they tried to address this a couple weeks ago quoting someone knowledgeable said disney was asking itself a question, do we want to be desantis' punching

bag for the next two or four years and the consensus was no. >> so it is interesting to note. i would have liked to have heard what mr. iger had to say but they've chosen not engage at all. one could make the point that when disney was put up 73 or something like, that it helped create florida as the tourist destination it is and they have paid an enormous amount in taxes. >> is this material, the change in - >> unclear that it is. >> right. >> unclear it is material. >> just reputation issue. >> and they're going to have to deal with the counselor, whatever their -- however they're terming it overseeing this district now and is able to dictate what happens there even though they didn't revoke the actual district it wself. >> interesting to watch it be isolating for desantis after mike pence said he would not have gone this far if he were in desantis' spot. >> because you don't want to

alienate business and this was going to make big business weary. >> said disney lost their way and this was how he chose to respond. >> very populist and if he runs for president we will hear more about it i'm sure. >> that is an if technically an if. >> the "journal" reported he's going to be announcing >> april or may i think. >> in may some time. i think the bigger question for disney, beyond this issue, is it making a comeback? >> absolutely. and, in fact, it's 100 days since bob iger took over as ceo. he's got plenty on his plate and he's already making significant strides towards at least some transition, but another important transition there is going to be who is the next ceo going to be? we're 100 days in. he said he would serve two years. take a lyisten to what he had t say. >> there are other things in life i would like to do, and i also am confident that board will be able to identify an able successor and i would love to have an opportunity to help that

person be successful right now, it would be premature to speculate there are no plans right now for me to stay any longer. we've already demonstrated in what has been just over two months since i came back, that you can make a lot of changes very quickly. >> they continue to make those changes, of course, sea change, the reporting structure within the company itself its own unit although he did not indicate during our interview any plans to do anything with espn there are many who believe given the structure now it makes it easier if they did want to pursue some sort of a deal with perhaps one of the sports betting companies or something along those lines. >> everybody is chattering around what he said to you about everything would be on the table for hulu it was widely assumed they were going to get hulu. >> they would be by the 33% we own, comcast, our parent company, that was one of the bigger news takeaways from the sit down

yeah no advancement on that part, but as this year moves along, of course, as that option for comcast to sell becomes effective at the beginning of next year. >> meanwhile, "ant man" biggest weekly drop-off of a marvel movie ever i see chopra at paramount says they may come in under on their content target of $6 billion next year given the synergies between paramount plus and showtime. >> as you know, the focus has suddenly been and emphasized by warner brothers discovery, shares of which are up 1.7% when they reported earnings last week, trying to generate free cash flow, bring the businesses to at least neutral, if not a level of profitability obviously, netflix is quite profitable, disney is committed to being profitable or neutral by next year and many of the others want to follow what does that mean? you have to try to cut costs disney saying $3 billion in nonsports content costs is what they're going to cut

disney plus about $16 billion. you can figure that's a significant increase. >> share price performance this year, disney up 15.5%. paramount up 30. warner brothers up 70% got killed last year, but still, there's optimism there toward getting toward profitability on streaming. still ahead, north island chairman, the silver lake partners co-founder glen hutchins joins us after the break. dow about 140. some of the sectors are positive rvterials, communication seices and real estate leading the charge we're back in a moment

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i'm kristina partsinevelos and here's your news update at this hour. the supreme court hearing arguments right now on whether the biden administration can eliminate more than $400 billion in student debt.

six republican led states and two individualed contend the plan needs congressional authorization. senator joe manchin's office tells nbc news the west virginia democrat will vote with republicans to roll back criminal justice measures. that could lead to president biden's first veto and viewers what time is it on the moon? the european space agency says with dozens of lunar missions in the works it's time to come up with a plan for moon time to make it easier for space agencies around the world to coordinate their efforts one key question, should time on the moon be tied to time on earth or based on its own movements? back to you, david. >> wow all right. we're about an hour into the trading session. >> you don't want to answer that >> i don't we've got the s&p down 1.6%. the dow the leader in negative

territory. let's get to bob pisani to join us. >> carl and i were talking, we're limping into the end of february here. there is no real momentum in the big sectors of the s&p 500 and that has people frustrated target is finally their getting their hands around the inventory levels target on the upside chico's had a good earnings report, the leader in retail the numbers on target because the only thing people care about is they're finally getting the inventories down last year they blew up and now cleaning the deck. that's the story here. weighted towards none discretionary items like food. the traffic up fractionally. guidance is light and that is not good only look at the inventory the stock is expensive about 20 times forward earnings with the lower guidance here. the retail trends, we're at the end of the season and the trends are clear.

consumer strong but slowing, labor demand is really strong, cost cutting and inventory reduction are the two big themes and that's all leading to some pressure on operating margins here as for the end of the month, carl and i were talking about this, we're essentially up on the year, down for the month down 2.4% for the s&p. still up 4% on the year. thanks to my friends at bespoke, 60-40 bond stock portfolio everybody debates about, up this year, the best in the last four years. i'll tell you what's not measly the dividends and buybacks coming in strong occidental announced a dividend increase and buyback again chevron confirmed that $75 billion five buyback they're doing $17.5 billion. they said that last night. this is still coming on strong and even though warren buffet said people who oppose buybacks were what did he call them

financial illiterates, wall street loves this. 2022 was a record year for buybacks $930 billion in buybacks this is actually ones executed that was up 5.5% the dividends $564 billion, up 6% we don't have the numbers for 2023 but i'm pushing s&p global to give me estimates and they think we're going to hit $1 trillion mark for buybacks 2023, probably will be $1 trillion in buybacks that would be up 7%. the dividends will probably be up in the mid 50% range that will hit almost $600 billion what does this mean? it means cash flow system are supposed to be really strong on wall street again this year. remember, as you know, it's not about this 1% exercised tax on buybacks it's about the cash flow as long as the cash flow is strong and right now as far as we got, the first two months of the year, the buyback announce announcements are continuing at the same pace -- >> buyback stocks out performing

since the lows of last year. thanks bob pisani. let's stay with the markets and bring in glenn hutchins, also the founder -- co-founder of silver lake partners, board member of at&t and sun tan dar welcome. >> great to be here, sara, great to see you in the new time slot. >> yes, thank you. >> to see the all-star cast here you're working with. what a team. >> indeed. thank you. so february has been all about sort of rethinking the outlook for the economy and the fed. have you changed your views at all given some of the strong data we've had >> no. not really i think the issue, sara, has been that the fed does not see the equity markets other than a tool for the transmission of power. the equity market participants think the massive declines in the equity markets in the last year are supposed to influence fed policy which they won't

unless there's significant wealth factor associated with it the main issue is getting interest rates down, i'm sorry inflation down, to a point to roughly a 2% until we see that number it's going to continue keeping interest rates high maybe for another part of this conversation right now, the issue is duration than hike of interest rates. >> i'm curious what you think. >> the equity market got ahead of the fed policy. i think the issue is that we've also got inflation down from 8% to 5%. depending on what number you look at and what period you look at it in getting down -- that was pretty straightforward much of the fed tools could address that and much of the issues that were in the inflation were either transitory or cyclical like energy prices. the next from 5 to 2 is hard stubborn n my view, more structural, demographics,

deglobalization, decarbonization and reversing debt monetization. that's going to be harder to address. it's going to take longer. the fed does not -- except for the debt monetization part, does not have tools to directly address it because it's a supply side issue and the fed has a demand side tool i don't think that -- i don't forecast, but i think we have to understand that the risk of recession is real as a consequence of having the demand side tools going up to the supply side problems and that what you're likely to see in that circumstance is some degree of increase in employment as long as employment remains stubborn it's hard to get inflation down i would like to see a goldilocks scenario i don't think that's a safe assumption to make as a consequence of which that should flow through the corporate earnings we've been through the pe part of this equity market adjustment we haven't been through the "e"

part yet i would like to see us get through this smoothly, and i think that fed is trying very hard to do that, i'm a huge fan of jay powell's, i don't think that's a smart working assumption if you're allocating sdm capital? >> does it affect you? i know you're focused on crypto which has been hurt by what the fed is doing >> let me take a step back on this i said this last time you and i were together. i said over the course of time that people should have 1 to 3% of their assets in crypto. people are interested in my investments in crypto, but it's not been my, quote, unquote, major focus if you know what i mean it's been what journalists want to talk about. my stance right now, continues to be quite cautious in terms of allocating new capital i think we have -- yeah, until

we start seeing inflation rates look more like 2%, i don't think you're going to see significant amounts of risk capital come into the market and create the conditions that [ inaudible ] which will happen but a ways away. >> glenn, it's david i mean to that - >> hello, david. >> hello it's not as though we didn't have a thriving economy, stock market, m&a market in let's call it mid-to late 90s you and i can remember with rates that were somewhere similar to what we say see here is it the transition that creates that period of uncertainty, as opposed to when we finally get there and stay there? or do you think even if we stay at a terminal rate for some time it's going to diminish overall activity >> there are two points to make there, david, which are interesting. one, which you just alluded to one is that we start in this with a very strong economy that's a great thing

and unlike balance sheet recessions like we experienced in 2008 going back to the great depression, which take a very long way to work through because you have all this debt that needs to be restructured, fixed claims economists refer to, an interest rate cycle induced recession or reduction economic activity, i'm not forecasting necessarily recession, typically the economy bounced back quickly from that. write. a -- right. so when the fed restores the oxygen to the economy by reducing interest rates then the stock market takes back -- typically takes back that's kind of where we are. unless we end up with [ inaudible ] matters on geopolitical thing that complicates the world in which we live i feel like getting these interest rates down to a level of 2% -- which is going to be a tough exercise, we need

policy right from the beginning so we don't end up with episodes like this where we've overheated the economy. i'm not concerned about the strength of the economy and i think we'll have a good bounceback once we restore lower interest rates but concerned about the time it will take us to get there because this is an economy than the one you were alluding to, and it has different inflation drivers that as i said earlier fed tools only are able to address indirect. >> glenn, stay with us if you would. we're going to take break on "squawk on the street," but we want to come back with you on the other side and talk about china. we have new numbers on foreign investment there you've been interested in that glenn hutchins of north island ventures we'll be right back here on "squawk on the street.

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(swords clashing) -had enough? -no... arthritis. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme. welcome back to "squawk on the street." we are here with glenn hutchins our guest, north island chairman, and one of the co-founders of silver lake

great to talk to you, glenn. we got your outlook on the u.s. and inflation in the fed i'm curious how you're thinking about china and how a lot of big investors are. news from investment foreign companies in china tumbled to the lowest level in 18 years with all the geopolitical concerns and growth issues, would you put money there? >> good question i'm cautious about china look, i'm not an expert on china. you have people on your show smarter about this than i am let me put it in a broader perspective. i think managing the rise of china as the new major player in the world, not just the economy but the geo political world, is the most important task of this quarter century. finding a way to accommodate the rise of china without either military or significant economic conflicts is going to be extraordinarily important to the world in which we live the one element of that has been

in china the reassertion of political privacy over business decisions and market activity. we operated for many decades on the assumption that china was going to integrate increasingly into the rules-based wto based order, and we now understand that when they said capitalism with chinese characteristics, they were emphasizing more of the china characteristics part of that phrase than the capitalist part of that phrase so in recent years, the part of this assertion of political primacy over the economy has been to reembrace the state-owned enterprises of the communist party and not subject those companies to market reforms and make them tools at stake and more recently to take the technology companies down several picks to reduce the kind

of power and fluns of the new class of technology entrepreneurs and wealthy people in china that has had a huge impact on the value for me as a technology investor has invested in and leaves me quite skeptical. the one path i've heard smart people talking about in invests in china is to understand where chinese policy is going and invest around that clean energy is one example of that the problem is, semiconductors and, obviously, it's very complicated, if not just completely off limits, to invest around the semiconductor industry in china because of the national security concerns and the, you know, entities that the u.s. government maintains. as a very complicated place to invest now and i think i've concluded the only way to do is it invest through third-party managers who are in the country and maintain a very tight and

relatively low allocation. >> glenn, real quick, on another area that's got an lot of attention lately, generative a.i. as a long-time investor, technology investor, are you thinking about this at all and hearing anything >> of course. >> it seems to have taken the investing world by storm. >> it's fascinating and another example of why technology is so interesting. the generative a.i., i'm glad you put generative in front, lots of other a.i. we use every day that are still out there being constantly used. generative a.i. i think about, is going to transform the way in which -- most important application to transform the way in which we go out to the vast amount of information on the internet and gather knowledge from it that we can use. the first i think you plight look back on it years from now crude way is google search

and before that you had various, you know, search engines [ inaudible ]. ten years from now we will be thinking this is the way we go out and get information and think search was a crude way of doing that and that will, once again, reshuffle the deck in technology as it's been reshuffled every 10 or >> glenn, it's great to get some of your thoughts on the big issues of the day. appreciate you taking the time. >> good luck with your new show. >> thank you very much glad to get you here in the early weeks. we'll have you on many more times. glenn hutchins. >> my pleasure. take a look at the biggest laggards on the s&p on a day it's been tough to get above the flat line. hovering around 3575 travel nesam like norwegian lagging on their quarter

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welcome back black americans represent less than 5% of residential real estate developers. one has been equal access to capital. a new program in philadelphia is

aiming to level the playing field. diana olick joins us with that story. >> capital is blowing into the real estate market given the housing shortage but not on equal footing. a new program in philadelphia is offering black and brown developers a unique opportunity to both build new homes and their businesses christopher pitt understands the value of a home more than most >> i grew up in a two-bedroom shack. ten people showing up. no gas, limited electric and an outhouse, right. >> reporter: that's why he's been working in real estate for 20 years, developing affordable housing, first in delaware and maryland, and soon in inner city philadelphia. >> how do we flip communities from high rentalal to homeownership? that's where generational wealth happens, that's where communities happen. >> reporter: even after two decades in the business, pitt still has trouble getting capital for his company's projects. >> it was extremely hard people had to do business with

people they have similarities with i just don't think it's enough minority leadership in those positions. >> reporter: after years of self-funning and borrowing cash at sky high rates, pitt turned to philly rise, a new program designed to recruit, train, support and open up capital to black and brown developers the goal, produce 50 new single family philadelphia homes annually for the next five years. >> there is an imbalance what we're trying to do is correct that imbalance by taking away all the barriers so there's no reason for anybody to say no. >> reporter: tom webster and his community investment partners call it a real estate accelerator. >> our goal with our participants is not to teach them how to rehab or build brand-new houses but have to build successful real estate businesses >> reporter: that means teaching them how to access capital and how to work the system to win city projects. >> bankability and credibility this goes taking you from boot

strapping to certifiable financial documents i am saying, it's okay, bank, i have my numbers. again, reducing the risk, right. >> rise! >> reporter: each program participant must be an experienced developer and have 5% of their own capital to commit philly rise invests 10% and the rest comes from cdfis, community development lenders certified by the u.s. treasury. >> the model we're building here really becomes something that can be replicated in any market and become a solution to neighborhood regeneration instead of outside community gentrification. >> philly rise is partnering with the urban land institute, the mags's largest real estate development organization, which has an online university it's providing at the program at a steep discount webster says philadelphia currently estimates it needs about 35,000 new housing units over the next five years he sees that as a huge

opportunity for black and brown developers david? >> diana, thank you. diana olick. with the s&p down about 0.11%, the nasdaq in positive territory. let's get over to carl and sara on the floor good morning i'm carl quintanilla along with sara eisen on the new york stock exchange dan niles calling for rates to rise to 6% as morgan stanley pushes its first rate cut prediction back to early 2024. bob iger's second first 100 days as ceo. michael nathanweighs in. exclusive with affirm ceo max levchin with shares down 70% over the past year, the company cutting a fifth of its workforce earlier this month. the final day of february ending with a