presentation that was a little light on details we will show you what elon musk did announce president biden is expected to use his first veto to reject the anti-esg bill that was just passed by the senate remember democrats control the senate it's thursday, march 2nd, 2023 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in sometimes square i'm rebecca quick along with joe kernen andrew is off today. let's look at how things are shaping up you see the mixed picture today. dow up 33. nasdaq indicated off 72.

a little improvement from an hour ago s&p futures are indicated off 18 points let's look at treasury yields. joe, i don't know if you saw this >> i did >> the 10-year crossed 4% for the first time since november last year. it is at 4.02% 2-year at $ 4.005%. we will see if the market will catch up or if they will not believe the fed keeps rates higher for longer. >> november, december, january, february four months. why hit it in november and not hit again until now? >> the numbers and concerns of the economy at that point. the fed's hand would be forced to come back >> in terms of interest with the subsequent hikes a couple of 50s and 25

the continued trade in the face of the hikes and rhetoric and going higher for longer. all of the jay powell testimony and minutes and everything it stayed low. i still think that somehow indicates something. >> back in november, it was significantly higher it was 4.117 >> the notion that they will -- what did we have -- he said three months between the last hike and when they cut. >> when they about face? >> people did think that >> his number was shocking unemployment up by 1%? then turn around i think the political pressure will be large. >> as sick as the world is, there was good news on the cover of "the wall street journal. the job market is is getting bad

or indicating it might not be as good robust u.s. labor market shows fresh signs of cooling is that good news? it might be. >> the other thing i saw is labor or wage gains are not keeping pace that is crazy when you look at a tight jobs market. the wages cowould continue to go up >> it is a circular argument we are worried about wage gains causing inflation. it is not keeping up with the inflation it is causing. n nutty. our top story. salesforce earned $1.68 per share. revenue of $8.83 billion beat the estimate of 7.99 the highest in the company's history and beat the company's goal of reaching a 25% margin by

2026 guidance for the current quarter and full year above estimates. on "mad money" last night, marc benioff talked about third point and elliott management and starboard value and value act. >> we are really looking at not just the short-term restructuring, but long-term restructuring of the company we are looking at profitability and productivity and per fform performance. we are also looking at improving shareholder relations. this has been our strategy that is how you see us delivering these amazing numbers. >> salesforce is doubling share buyback program from $10 billion to $20 billion we will talk to an analyst whose basic point is similar to what nelson peltz did after he saw

what iger orchestrated at disney >> i think that is what benioff was hoping for proxy battle is off. here we go david faber reported yesterday that one of these activists has a slate of directors they are hoping to get nominated. this was yesterday before the results came out i don't know if they changed their mind or had a tougher time with shareholders to vote for that slate if you are looking at the rebound that the stock has done and about face in the business. >> people wanted and thought he was too freewheeling and too free spending. it is all reined in with job cuts coming. >> a change in the culture there was a story yesterday that laid out a lot of the changes he has made from talking about the employees being members of the family and how they have to deal with layoffs >> you know, tightening the

belt saving money i don't know maybe it wasn't top shelf. maybe it was cuervo. i don't know i wasn't there i wouldn't go. now to a theme among some of the other pre-market movers. that is disappointing guidance we start with snowflake. shares are lower despite the beat on the top and bottom line. the current quarter product revenue guidance below expectations check it out stock is now down 7.1% box shares are falling too the guidance for the current quarter and full year were both well short of expectation. that stock off 11% it is the same with pure storage. shares are down on revenue g guidance for the year.

that stock down 11%. splunk is down today the ceo said customers have been hesitating on decisions to migrate to cloud as companies look to control costs. that stock down 4% >> a lot of names you can pick >> splunk? >> yeah. a lot of names in the universe. >> a lot of sounds that go together bizbuz >> squawk. the senate voted yesterday to overturn the labor department rule for fund managers to consider esg when making investments on behalf of pension plan participants. it overturned a trump rule to limit investment decisions to what would generate the highest returns.

fiduciary responsibility the to shareholders a final vote was 50-46 with democrats joe manchin and jon tester crossing party lines. joe would not say he is a democrat >> he is getting ready for the election >> he may pull a sinema. >> we saw him in davos >> he wasn't that enthusiastic about saying, yes, i'm a democrat west virginia, they vote for republicans. the house version of the bill passed tuesday with the support of every republican and one democrat president biden has said he will veto this bipartisan bill. one side only likes bipartisanship when it is the other side coming to them. it doesn't work this way

for context -- >> isn't that all of snus. >> w-- us? >> when you are in the media, you expect >> all of us we all like when everybody else conforms to our viewpoint? i want to agree as long as you agree with me. >> that's true that is because everybody has an echo chamber now i don't watch certain cable channels i don't. i can't. i won't. life is too short. my health is too important >> i do not like green eggs and ham. >> sam i am. for context, the energy sector is up 53% since the beginning of 2022 i was talking about qvc. certain cable channels including big oil. al gore. shel chevron and ex-xonexxon

the top funds were down 20%. >> i don't understand why president biden would veto it. >> you haven't been watching for two years? >> the senate. it is his people. >> the two outliers. the other -- how many? 48 -- the other 49 members of the board collective were all on board. i'm surprised they -- i don't know what will happen. i don't want to walk around the senate floor >> you are allowed to speak your mind >> they won't show up at the house. breaking overnight nasa and spacex launching a crew dragon spacecraft from florida the rocket took off at 12:34 a.m. eastern time. en route to the international space station. the spacecraft has two nasa astronauts and one russian

cosmonaut and the specialist from the uae the earlier attempt was scrubbed on monday with the technical issues with the flow of ignition fluid. >> interesting we still cooperate >> i was thinking the same thing. completely at odds >> the space program cooperation. i g i guess we should take solace under that. coming up, tesla investor day was short on specifics down 5% right now. it was down more than that earlier. investors were not impressed phil lebeau will have highlights next. we will talk to new jersey governor phil murphy about the anti-esg backlash. he may know more about inv investing. w ithe investing business

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future, but short on details for the near future. that is what people wanted you look at tesla investor day and the message over the course of the in our and a half was driving down cost and increasing scale as the company ramps up production in the next 5, 10, 15 years. there will be a lower cost next generation model they talked about it, but didn't give specifics a name or price point or type. they said it would be built at the sixth plant which has been confirmed. >> we're excited to announce that the next tesla gigafactory will be in mexico near monterey. we will expand tproduction at existing factories >> the factory in austin where the investor day was held yesterday. annual deliveries long term they

believe to 20 million vehicles annually whether or not that happens in the next 10 or 15 years is hard to say elon musk was asked about affordability and demand and if demand is falling off for tesla vehicles he says no way >> the desire for people to own a tesla is extremely high. the limiting tfactor is the ability to pay for the tesla not do they want a tesla it is easy for people in the room to lose sight of that >> he went on to talk about the fact when they cut prices and had to do that within the last month or two, they noticed a surge in demand which is what people talked about. they have the pricing power and he believes they have the ultimate lever which is greater demand as you look at shares of tesla. they confirmed that production of the lithium plant building down on the gulf near houston is

going to begin in about 12 months they will have refined lithium coming out of the plant. they expect in about 12 months this is part of the vertical integ integration. putting everything all in one supply chain they can control. >> phil, can i ask a question? the disappointment is not making more specific things like the $25,000 car by this date every time he makes proclamations like that, people complain is this him being more cautious? >> i think it is a bit of that, becky. when people complained in the past, it is because he said outrageous things. he said robotaxis will be out in 2019 you are not building 1 million cars those are the statements that have made people roll their eyes at elon musk's pronouncements.

the next generation vehicle and lack of details is different because the company has said we're going to build it, but wall street and investors want to know are we talking about 2024 or 2025 it is not an outrageous idea it is something that they are working on what people want is a little more specificity regarding a timeline and production amount things that will help them say, okay, i can see them getting to this level of sales by 2025 or 2026 >> you don't know whether it will be named after a number or a letter a lot of letters left. >> a lot of people believe it will be called the model 2 >> there are more numbers left, i think, i think i'm right on this >> to infinity >> and the other thing, 20 million in a year. you go to the mall you park your model bleep.

endless model y. which one is mine in they are all white and blue and red you need a beep-beep >> come get me. >> that would be your nightmare, joe. >> he's got to start doing something. i know this is the new way to do things, but can you imagine at the mall >> they are working on refreshing the model y the question is, how much do they refresh >> right now, when they go by me, if you parked it and you happen to forget which exit at the mall, you would never find your car they all look the same thanks, phil we will talk to the former ford ceo mark fields about the tesla announcement later in the hour. >> that is what bumper stickers are for. >> right all my obama and biden stuff. >> for anybody who doesn't know, there was a time when the tech

guys here played a good prank on you. they put a bumper sticker on your car do you remember? >> did it say kick me? >> it said honk if you love hillary. >> oh, yeah. >> it was good >> i think they did do that. >> i remember. >> yeah. why is that funny? >> you had people honking at you and you couldn't figure out why. >> tmi now people know too much about me >> they would never guess. when we come back, shopping app temu made a debut in the united states about six monthsing ago. apparently it has taken off thanks to dollar store pricing and cheap shipping and super bowl ad blitz. eunice yoon has a closer look at the company strategy

that's next. later, the ceo of ab-inbev will talk about the earnings just released overnight. you will see the stock is off 2% stick around we'll be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. you choose advanced security for total peace of mind. and you choose a next generation 10g network that's always improving, getting faster; more reliable; and more intelligent to keep you ready for today and tomorrow. the choice is clear: make your business future ready with the network from the most innovative company. comcast business. powering possibilities™.

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prevagen. at stores everywhere without a prescription. right now it is time for the executive edge shopping app temu is the most downloaded app in the united states despite the tension with china. eunice yoon has more on the strategy good evening or good morning, eunice >> reporter: it is short for team up price down the company resources from workshops like this one in the manufacturing town of wenzhou

where a full leather jacket can be made for $4 a piece the company can pass on the cost savings to american consumers by leveraging the network of the parent china nasdaq listed gdp chinese maker had no idea how to sell to the u.s. until temu came along. the market is like an open ocean, he says this jacket is the most sought after item he sells to american customers. before joining temu, he had zero u.s. business. now he sells 400 a month the app backed by the chinese retailer launched in september and has 24 million downloads in the u.s. the secret super low prices the bargain prices appeal to americans. rights now, all of his products on the site sell for under $60 he says temu sets prices for the

jackets and need to be lower than anywhere else even china he covers shipping to the u.s. it provides technology to easily swap out models in his ads for western ones amid tensions with the chinese relations, the company is headquartered in boston. nothing is more american than advertising during the super bowl the ad boosted his sales 30% customers don't care about the pol politics they just like our stuff and he told me selling overseas at this time is critical for small businesses like his because from his perspective, the chinese economy is slowing down and eretailer space is hyper. >> eunice, if the jacket costs

$4 to make, what do you pay? >> reporter: it is going for $29 on temu. $30 in china that's the way they are trying to make sure all of the small businesses go with temu. >> in terms of the economic potential downturn we talk about that all the time. is the recession coming and will you feel a pinch it hasn't shown up yet i guess that is something he is not concerned about because of consumerss having less money to spend and looking for bargains >> reporter: he thinks in the u.s. people are cost conscious, but the situation in the u.s. is better than it is here he was explaining to me it is hyper competitive. we see that with jv. they are rolling out a perk with the tune of $1.5 million there is discussion from the alibaba call if they would unveil subsidies

they said no the competitor in the space said they have been cutting prices. people are looking at how hyper come petitive the space is here small businesses are looking to explore other markets. >> eunice, thank you >> i didn't have time. missing financier has been detained by chinese authorities in connection with corruption investigation. the corruption investigation targeting the former president is that the go-to corruption >> the charge? >> round up the usual suspect. hard to tell >> crackdown on corruption has been huge there. >> was it corruption they cracked down on a lot of private sector companies >> it really was corruption. i don't know what this is. coming up, a closer look at

the pre-market gainer salesforce shares right now up 15%. we will talk about marc benioff's strategy here is a look at the s&p winners and losers from yesterday. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

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good morning welcome back to "squawk box. we're live from the nasdaq market site in times square. the s&p is up 16 this morning. we have some company here. >> we do it's not really hipster? >> i don't think people say hipster anymore. >> that's my problem what do they say >> the gen z >> is that appropriate >> i think that is pc enough >> vsurprising with

better than expected profits cnbc's steve kovach. for the guy that can go between new york or silicon valley >> that's literally my job >> no one notices. >> i blend right in. let's talk about salesforce. a beat across the board. soaring in after hours a beat at $1.68 a share. revenue beating expectations coming in at $8.38 billion also wrapping up the fiscal 2023 with strong revenue and profit growth full year revenue up 18% from the year before. the strong guidance to credit for the shares sky rocketing salesforce predicting 10% year over year revenue growth beating expectation of $8

billion in sales the real issue is the who's who with of investors with value and value act and third point. the company is making moves to focus on profit and growth including hiring for business review and disbanding the m&a marc talking to jim cramer last night. >> we have more than $7 billion in cash flow for the year of the we are doing incredible buyback. we exaccelerated from $10$10 bi to $20 billion we are a huge cash machine >> benioff says more changes are coming when cramer asked, he did not rule out more layoffs. that stock out >> it seems like the margins are

growing. it makes me wonder whether -- it is not ever easy to slim down. maybe it was a little bit over expanded during the pandemic >> he made matthew mcconaughey $10 million a year >> the journal laid out a ranch where you can go and do things >> that's a silicon valley thing. >> it was. i think silicon valley is getting more stringent people are saying benioff is here for a while >> he just lost his co-ceo and other executives he is not going anywh where as far as the board of directors, they added three new members to the board david faber says they would like two or three others. he was resistant to that

>> is that why he added more >> one from value act. they seem to be giving something. they seem to be giving >> when you wrote that and you said they hired bain you didn't think about the guy in batman? >> i'm a huge comic book nerd. it is hard >> if you want to get rid of a lot of people? >> it is hard not to think of mitt romney. >> i think of the other bain the way he sounded let's bring in sarah boller. it is a homonym, sarah of will you answer to either? next time i'll remember.

>> boller. you are not alone. a lot of people struggle with it >> i think it could be either. >> it could be yes. >> tell me when you are trying to analyze why something goes up 23%. >> thank you for having me you talk up 15%. i think it could have been up more you know, the reaction to the up 15% move is i think it would be up more if there wasn't some realization based on the strength of the numbers that the activists may have done their job in exiting the stock that is why you are seeing only up 15% move on the back of that quarter and guide. i think the three things that stood out to me as it is just

mission critical were the non-gap operating margin and guidance going forward telling us they took the meat and fat out of the economy they needed to remove they did so with enough confidence to be able to maintain a reasonable guide for the rest of the year without cutting too deeply into sales. a $20 billion buyback on top of $4 billion already purchased is what i wanted. it's exactly the kind of size and aggressive buyback activity that does result in share price appreciation like this in the aftermarket. it was such a well done conference call with the company hitting on all of the points of investor concerns. for example, large m&a which is too aggressive they shut the m&a business concerns of overspending they put up a record 29.2%

non-gap operating margin and made it clear they are on board and looking at every dollar in the future put it all together and you really say mr. benioff addressed the vast majority of like minded concerns of the activists in quick order. >> sarah, it is steve. i want to ask a question moving forward. the review that bain is going through. what else are they looking at here what other cuts are you expecting that haven't been done already? >> i do think there is room for there to be more job cuts at the company. they had to grow substantially during the pandemic to keep up with the demand driven for digital services i think there is room for head count. i think bain can be additive in ain analyzing how they pay their sales people they brought in an expert to

review how you are compensating and making sure the right people are compensated on deals. they will do an incredible job of where they are spending money and how they are spending money and in particular in sales and marketing. >> i think this puts them, the shares are probably now down with the market. they are headed down more than the average on nasdaq. do you have a fair value do you have a target do you do that at macquarie? >> i do. this is the way i would think about it you look at the current revenue performance obligation that salesforce put up last night which is the business it will go on the balance sheet and revenue in the future. it grew in the low teens and

combine with the high 20 gross operating margin and you put salesforce back in the software rule authority or highest echelon category this results in multiple expansion and share appreciation we have a $225 target price on the company. it really implies roughly 5.5 times fiscal year earnings this is a full turn higher compared to 4.4 times pre-market today. there is not only room for share price appreciation on the back of the numbers and fundamentals, but there is share price appreciation based on the companyingback of the company >> when you talk about the buy back and how they increased it by that amount, i could not help but think of the rhetoric around it spend it on something to expand business spend it on hiring more people

you know, when governments get involved with telling companies how they spend the profits they make, it may not be a great idea this is the best use of this capital in your view for salesforce the company should be free to do that >> absolutely. i don't think the government should be getting involved in how marc benioff runs his company. i think marc benioff is a visionary. he helped invent cloud po computing. >> he's a young guy. >> he needs to leave this man alone to run this business about as he is capable >> you think they are exiting? the activists are getting out? >> you know, i don't know. i really don't know what the activists will do all at once.

i cannot speak to their position for me, personally, with the stock up where it is, pre-market, you are up over 40% year to date many of the activists entered at a much earlier period last year. we saw elliott edge paypal with the 20% return with these returns, if i were an activist, just speaking on my own behalf, i would take my bat, ball and powerpoint and go home in my ferrari really happy >> sarah bowler, thank you >> steve, thank you. skewing the entire audience lower in terms of age. >> that's why i'm here. >> maybe you should stay >> yeah. >> we can use that >> sure. >> it might be a drop in the ocean at this point. we're trying when we come back, blackstone ceo steve schwarz

ma schwarzman's take on the economy. and later, mohamed el-erian's comments tonhe fed's next move. "squawk box" will be right back. >> announcer: currency check is sponsored by interactive brokers. the best informed investors chosen afterchose interactive brokers.

welcome back blackstone had the ceo conference a gathering of corporate leaders and investment companies in the portfolio and beyond i got the chance to speak with bl blackstone's ceo steve schwarzman we got to talk about the various cycles i asked if we were in the economic crisis and he said no if you listen to the advice he has been telling the portfolio companies the last six months, he has been telling them to make sure if they need any money to borrow borrow it now. you never want to go to the bank in a crisis or have a maturity come due in a crisis the best risk managers are looking at this. we don't know what will happen or when. if you are a risk manager, you are making sure that you are ready to withstand what comes the next two years this is one of the times when you have to build a force. >> i would talk to him about a

few things, if i had a chance. i don't know if i want it all on microphone >> it is not all on microphone chatham house rules. they put it out so we get to talk about it. >> he was a big trump guy. >> he talked about that. >> he pulled that. i don't know if we talked to him since he made $1.2 billion last year and i want to know what he thinks about the tax >> he has never been a fan of that taxation. >> i wonder if there is a way to make it more -- i don't want to say equitable. less of a political football it gives capitalism a bad name macy's just reporting earnings per share coming in at $1.888 a share on revenue in line with estimates and comps which fell 2.7%.

that is not impacting the stuff. forecast is full year profit above conconcensus "squawk box" will be right back. what if you were a trendy apparel company facing an avalanche of demand? to ensure more customers can buy more sherpa-lined jackets,

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all right, welcome back, everybody. biometric security company clear reporting a solid quarter on a call with analysts, executived cited strong traveler demand as the travel industry jumps back from the covid slowdown. joining me is the ceo of clear and if you want to look at the stock now, you see for one year it is up about 11.7% karen, thanks for coming in this morning. >> great to be here. >> we were just complaining about how complicated it is to get through airports these days. i know joe and i are clear members, but not for the airports, we're clear members for things like -- >> i don't want to visit the airport. >> we'll make it easy for you. our job is to make the experience safer and easier. >> what are you seeing now in terms of what a pain it is to go

through airports i'm saying this as somebody who has been through a bunch of airports in the last six or eight weeks. >> we reported fourth quarter earnings yesterday, which were strong and capped off a great year at clear with bookings up 55%, enrollment growth up 48% and beloved free cash flow up over 200%. what we're seeing in airports is that travel is hard and getting harder and travelers so want a friction free predictable experience like they're having in so many other places in their life, that's the new customer expectation. we now say that every day is like the wednesday before thanksgiving so that's what we're seeing. >> what happened is it just that there is so much -- so many people traveling or has there been some compound effect from other things >> i think this is step function out of covid you have various things at play. we were bullish on the travel industry and think the surge is going to continue. you have a coiled spring of people staying home for three years. i think you a hybrid work environment where people say on

saturday, sunday, monday, i can work from some place else. you see a shared economy when you see the airbnbs of the world and hotel stocks at the high, it is complementary, not competitive. you have infinite room nights but not necessarily infinite seats on airplanes by our numbers, another million travelers are coming through airports from 2030 up from 2.5 million today, that's 40% growth it is amazing. i was in miami this week, with our teams, miami's seat capacity from 2019 is up 25%. so, i do not see any end people love traveling. >> white lotus, a third season, right? think about -- i want to go to hawaii and sicily. >> i would have >> i'm a working mom of three. i haven't seen "white lotus. >> it is all about great vacations, where a lot of stuff happens. >> there you go. >> this is all built on the expectation that people have excess cash t, that people have

the capability to get away for long weekends. ceos say our employees aren't there on mondays and fridays if they crack down on that like they want to, if consumers don't have the cash savings that they had up to this point, then what? if there is an economic downturn, does that blow away everybody's growth expectation >> business travel has just started coming back, so i think that there is a balance between because you are seeing that return it was very low over past few year, so even an economic slowdown, you're working off low base frise business travel people haven't seen their customers for years, like i've been zooming on cnbc, so happy to be here in person, so i think that the shared economy piece is going to continue to drive it. and even if you're going saturday and sunday and not friday through monday, i think the globalization's desire to travel, the internet has made it so accessible, also costs, you know, while many ticket prices are absolutely up, there are

other ways to find lower cost opportunities to travel. so i just -- i think this is a really strong secular trend. people love to travel and have experiences. you can also argue are you saving money on one thing but spending it on the experience economy? >> are you beefing up your presence in more airports? it seems to me like it is a bigger presence than it used to be. >> we're growing our networks, our products and our partners, we launched our 51st airport this week in kansas city we had a record number of launches last year, eight airports last year and three in the first two months of this year we have been adding more products reserve we want to build products for all travelers, whether you travel once a year or once a week reserve is for you, make a reservation for a tsa link like you do for a restaurant. we're doing that internationally and domestically we're excited, we got an authority to operate for precheck we'll be bringing that out this year, precheck enrollment provided by clear. we want to build products for all travelers to make it safer and easier >> yeah. it is amazing that, literally,

we screen trillions of people to find dozens. and if the way to make that easier for us trillions that have no ill intentions, it is a pain it is unbelievable we have to do that for a needle in a haystack. we saw another explosive device the other day that was going to go on. you got to do it if you can do it with something like this, it helps. >> got to make it safer and easier got to work together to do it. >> thank you for coming in. >> great to be here. gh> up next, dow futures are hier, lifted by salesforce more on that story when "squawk box" comes right back. meet jessica moore. jessica was born to care. she always had your back... like the time she spotted the neighbor kid, an approaching car, a puddle, and knew there was going to be a situation. ♪ ♪

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hello ozwald. give it up for pam. pam, you are a rock- [silence] i wasn't going to say it. ♪♪ good morning, everybody. rising interest rates on the minds of investors the ten-year note yielding above 4% and the two-year at levels we haven't seen in decades. w we'll have a breakdown of the move in bonds and what it means for stocks. electric vehicle maker polestar reporting results we'll hear about the fierce competition in the ev market.

and beer sales falling flat at ab inbev. the ceo will join us to talk inflation, the supply chain, what consumers want right now. the second hour of "squawk box" begins right now good morning welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen with becky quick and empty seat, empty place in my heart. >> andrew. >> empty place in my heart, andrew will be back tomorrow u.s. equity futures like yesterday, yeah. that's -- that was it. no one's there up 92 yesterday. the dow managed to eke out a gain while the s&p and nasdaq were both down and i think. and then -- so a little bit

mixed, the dow ended up six points yesterday, s&p down 19 and i think nasdaq was the worst, down about 76 we're seeing a repeat of that pattern a little bit let's look at treasuries something to do with this, we're above 4% now 4.018%, just barely with the two-year, 4.88, pretty big inversion. senioreconomics reporter steve liesman joins us with a look at whether the market has the right outlook now for the fed. the tail catching up with the dog or how do we -- which is it, steve? >> it is closer, joe, maybe not all the way there. what we have is a new day, usually, and new high for treasury yields, new high for market pricing, fed rate hikes the question is, is it too much or too little and too late markets trade with virtual

certainty of three more quarter point hikes. that will bring rates to 5.25% to 5.50% by june there is discussion, debate, probability of another quarter point hike in july or september. yet while the year end rate, it is a full 100 basis points up in a month. never quite seen anything like this and near new highs it still trades with easing from the peak rate on the back end. is that right or are markets overshooting by as much or more as they undershot before the latest search? steve ricchiuto saying there is still a strong conviction in the market that a pivot will follow the pause, near the fomc analysis nor mine suggest conditions will allow a rate cut in 2023. not enough on the back end he argues there hasn't been enough pain in the form of higher rates at companies or households for higher rates to justify rate cuts. joe lavorna is taking the other side of the trade, he writes, we

worry the fed is making a classic policy error by tightening rates too quickly and by too much. we're highly doubtful the fed can keep rates in re strictive territory for as long as policymakers proclaim. one way to understand this difference of the debate is near term, markets are backing the hawkish idea there is more for the fed to do and it will do more beyond the fall, however, a more dovish outlook controls the trade. i would say it is worth noting this, the dovish trade has been wrong for almost a year and a half now it is going to be right eventually, but maybe further down the road, joe, than markets are now betting. >> yeah. all right. we got plenty tot for that could dictate what the outcome is in the next couple of weeks as we have noted i guess, you know, when you put off some big -- i'm glad it is not tomorrow now for the jobs report i don't know -- i wasn't ready i wasn't ready i'm not ready for it yet after

that 500 -- i need another week to -- >> how fast the february number is going to come. >> yeah. that's true. that's true. what is the -- >> for the jobs report i don't have one i can look it up while you're talking, but i don't have it right now. >> 250 >> i've seen 200,000 but i haven't seen the consensus i've seen 200,000 among individuals but not consensus. the problem be is the job bes report is not the only thing to watch out for. there are ultimate inflation reports out there. i saw some positive stuff about how the supply chain indices, the ones that measure tightness, eased a bit. there was a story in the journal yesterday about the private companies that list job openings >> that's today. yeah positive news, the employment picture is weakening got some positive news the employment picture is weakening.

that's great >> that's the world we live in right now, joe we would like to see easing without going all the way and the question, you know, as the market put enough in on the front end, i think that's right. but there is still a lot of easing on the back end we haven't even talked about 140 basis points of easing built in for 2024 i don't know if it is time to worry about that there is so much in front of us over the next several months. >> steve liesman, thank you. see you. >> pleasure. >> let's find out what this all means for the markets. carrie firestone is here, chairman and ceo and co-founder of arias asset management and cnbc contributor i know you're watching the labor market i think that was number two on the list of things you're looking. you're waiting for the cpi even more -- even more focused on that number. >> hi, becky, nice to see you. yes, it is so important what that cpi number is, because it is really driving the market you saw the market surged when there was a suggestion that jay

powell made that inflation was really coming down, used disinflation a few times saw that jump in january and then february, you know, people got very just enchanted when it was clear that he said innovation was sticky and we saw that cpi number not budge as much as expected so, you know, a piece of news such as, you know, rents are coming down, 3.5% over the last six months that, i think, is indicative of an effect on the housing and rent market. we know that mortgages, new mortgages i think are at the lowest level since 1995. again, that would point toward lower inflation numbers, but housing isn't all of it, it is a big piece. food is major. we know how those food prices are going up labor prices have to start to ease so i know joe mentioned, you know, the bad news can be good news i think that the labor market is still growing. it is just the extent to which it pushes up wages and that is driving the market, that is what the market is thinking about and

worrying about right now >> dow futures are are up by 100 points right now but really, completely because of salesforce. it would be down without it. i think salesforce is adding 175 points to the dow futures this morning. the big concern is what is happening with yields on treasuries you're talking about the ten-year back above 4% does that change your outlook on anything that you're investing in, carrie >> not really. the yields on treasuries, seemed artificially low considering where we were at the fed level i think it is about how many more rate increases and we know that even if the fed raises 25 basis points, three more times, and i think that would be consensus perhaps right now. they are most of the way there think of all those 75 basis point increases, where we are now versus where we are when we were basically at zero so we're most of the way there and that's how we're thinking

about, you know, interest rates and yields what i guess the most interesting factor for people who are managing money to think about is where you say to a client, perhaps, you know, yield, looking at treasury makes some sense where two years ago it certainly didn't. if you were thinking about where you're going to get return relative to the stock market that plays as an option that we have in mind and have in our -- in our possibilities but -- >> you're talking about the short end of the curve, like the two-year >> that's major. compared to 1% so, yeah, but i think what we're also seeing in the market is if we see more indications like salesforce, where you have a company that has a lot of leverage, think about the amount of leverage they had to quickly move those numbers as fast and as high as they are relative to expectations, you know

earning before interest and taxes was up 103%, that was above 40% higher than expectations and it isn't just, of course, it is a factor that activists have been putting pressure on benioff, but they have the leverage to do that, which just is pretty outstanding and amazing in this environment for a company that big to be able to, you know, over the last six months put in place both cost-cutting, but also billings were stronger than expected. they were in the lowteens. so that was pretty impressive and shows the software recession and i think recession has been in a software to some extent for those big companies, maybe we're coming out of that and, you know, maybe ending for some. >> we'll see we'll see if that carries out with the other companies too carrie, thank you very much. >> thank you, becky. when we come back, swedish electric vehicle maker polestar reporting reports. we'll hear from the ceo next before we head to a break, though, check out shares of

tesla after the company's investor day presentation failed to impress the street. that stock had been up really significantly in the beginning of the year. this morning, it is down by 6% for the one-year pioerd down 35%. "squawk box" will be right back. i think i'm ready for this. heck ya! with e*trade you're ready for anything. marriage. kids. college. kids moving back in after college. ♪ here's to getting financially ready for anything! and here's to being single and ready to mingle. who's ready to cha-cha?!

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best buy just out with the fourth quarter results the earnings came in at adjusted $2.61. that was 50 cents better than the street was expecting on revenue of $14.74 billion, that was just ahead of expectations but the full year guidance is a little weaker than expected. best buy says it now sees earnings in the range of $5.70 to $6.50 a share the street was at $6.71. so this is just another retailer giving us another cautious outlook on what to anticipate, but a lot of retailers had much better than expected numbers for the fourth quarter question is what happens now with the consumer. that stock now by the way, down by 1%. all right, let's talk about polestar reporting fourth quarter and full year results and for the fourth quarter revenue jumped to $985 million that was a 67% increase year

over year. the evmaker says it is anticipating global volumes to increase nearly 60% to 60,000 cars still relatively small number, but these are luxury evs joining us first on cnbc is polestar ceo thomas ingenlath. and, thomas, good to have you on the operating -- the losses are still significant. revenue growing really quickly what about profitability what is your projection as to when that is possible? and you keep adding a lot of different models you're, as you say, i think you use the term no risk, no fun for some people it might be too much fun >> yeah. this is a journey which is going according to plan. we have achieved our goal of 50,000 cars in 2022. we reduced our losses

significantly, we will actually grow to 80,000 cars in 2023. that is 60% up year on year. and, of course, the big difference to 2023 will be to become from one-car company through a company with a lineup of three models. and, of course, this is absolutely the lever which will bring polestar to its profitability, to the turn around so, we are calling our plan on that journey and we are delivering on these targets. so it is not only fun. it is the seriousness about us delivering on our milestones. >> but you do have very aggressive or, i mean, your plans are -- for models, for example, how many models are you

planning by 2026 some people might think that you should get a cheaper base model to sell to the masses, but you're not -- i don't know if you're interested in that. these are luxury evs that appeal to a certain customer. >> yeah. absolutely very different to the journey that tesla is now ongoing, very much mass market we are aiming and we are a premium luxury company that is targeting that market with a product portfolio clearly with two suvs, two coupe, that's a program of four cars we will complete by 2025 actually already then we add the cherry on the cake, the roadroadstar that we have shown and we know we will put that in production

these five cars, that say product portfolio we think is sufficient to carry the company with a high profitability. >> you have the profitability from being able to charge obviously more than a lot of your competitors a lot of competitors are actually cutting prices and that's the holy grail to try and get an affordable ev for the mass market. and i don't think you're going to -- you're not chasing that end of things. >> no. it is definitely -- we are premium sports car company we see that putting desirable cars out there, rather producing one car less than demand is our way to have high profitability and earn the money that we want to earn. being part of a big family, the role that we play is in premium luxury segment >> thomas, bmw, i was in one that i liked quite a bit, and

when we were over in davos, i liked that there there is competition, everybody is chasing this, what is still a fairly small market, growing quickly, obviously even the luxury end, from porsche, there are quite a bit of competitors who is your biggest competitor in your view >> i think you named it, very clearly porsche having recognized that the future is electric, i think we have a very good chance to be faster our model not having to take care too much about building factories, but really using basic technology and putting our great engine on top of that, we can be very fast in the rollout and as we said, this product, five cars by 2026, all really one to one competing in the

luxury segment that porsche is covering this is our main competition there will be many more competitors. fair enough. having said that, the product rollout in that cadence will be very, very difficult to performed by somebody who is not having the synergies as we are having in the group. >> yeah. c dicaprio is an investor. is he waiting for the roadstar does he drive one now? i want the roadstar. i'm excited. i think that's a few years off >> i will put your name on the list that's definitely still the three and a half years to wait for that one, but i think that will pass quickly. we will give you our suv which will come to the customer before the end of this year i think that would be a great car for you to cover this period leonardo is an investor. i think for him, and very clearly there is a big part of

the company, the promise on sustainability and pursuing this way of reducing co2, not only by having electric cars on the road, and charging with green energy, but bringing year after year the co2 footprint of the car leaving the factory. and that certainly is an aspect that not only he is very much interested in, but a lot of our companies cherish that type of seriousness about the sustainable way we are pursuing. >> thomas, thank you i know we -- a little bit of a delay, that's why we ask question and then wait i usually don't do that. i like to talk right after my question but we appreciate your time and i like that no risk, no fun. you know that song >> no. >> a lot of things that -- >> sing it, baby. >> a lot of things that i ain't done but i ain't never had too much fun >> i ain't never had a friend like you that's the one i know. >> you don't know a lot of things i never did that i ain't

never had too much fun i'll play it on my phone during the break. when we come back, we'll look at stocks to watch. and mortgage demand falling for a third straight week as interest rates increase. the ceo of a mortgage lender and owner of the phoenix suns is going to join us to talk about the housing market and where he sees rates headed next "squawk box" will be right back. time now for today's aflac trivia question. what is the average interest rate for a 30-year fixed mortgage e answer when cnbc's "squawk box" continues ahhh! coach k, there's a goat here. the story of my life. no coach, there is a goat here! whaaa! what's this? a thousand dollar hospital bill? but i have good health insurance! gaaaaaap! did you say 'gap'? he's talking about the expenses health insurance doesn't cover. but with aflac, you can get money to help close that gap. aflac, huh? gaaaap! aflac! gaaaaap! get help with expenses health insurance

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now the answer to today's aflac trivia question. what is the average interest rate for a 30-year fixed mortgage the answer, 6.71%. all right, let's get over to dom chu with a look at some of this morning's premarket movers. what are you seeing? >> a lot of stuff. a check of macy's here, the department store operator behind brands like its namesake, and bloomingdale's, blue mercury revenue in line with expectations key metric of sales performance

at established store locations fell less than expect. macy's said it took a more measured approach to promotional pricing during holt day shopping quarter and more disciplined approach to inventories as well. 9% premarket on the tech side, salesforce up around 15% or so business software cloud computing, big company, dow computing out with better than expected results and added to stock buyback program. snowflake going down 7%, opposite direction, the cloud data platform company reports better than forecast results but forecast for the current quarter fell shy of some expectations. so salesforce up 15% snowflake down 7%. still on the tech front, microsoft up fractionally. megacap software cloud computing company named a top pick by analysts over at credit suisse they cited amongst other things the ability for it to monetize and capitalize on its investment in chatgptmaker open ai. those shares up a quarter of a percent. we're going to end on shares of ab inbev

it is 5:00 somewhere the beer brewing giant behind budweiser, modelo, down around a percent or so right now. it reported more upbeat results, higher prices, helped offset a drop in sales volume and raced its dividend payment and we'll have much more on this story when the ceo michel doukeris joins us to talk about the global beer trends, becky. back over to you >> how about you been drinking beer lately, dom or -- >> i will say this, this is in no way, not an endorsement, a statement of fact, i do enjoy modelo, but i'm also much more of a pacifico guy when it comes to mexican beer. i would choose pacifico. that's my drink of choice. yeah >> okay. thanks, dom. >> you got it. >> loaded. loaded >> more of a white wine guy? >> not white now i started to like -- i always get this horrible -- >> mustache? >> yeah. i get a lot of grief for that. but i do

i don't know >> red >> yeah. you can't really drink really crappy red wine. got to spend a little bit of money, unfortunately. still to come, beer, i don't know -- first six beers, they go down smooth. right? that's the problem >> that's why you're up. >> mortgage demand dropping to a 28-year low. we'll hear from the ceo of united wholesaleorag mtge. stay tuned you're watching "squawk box. this is cnbc with billions of passengers taking millions of trips every year? you aren't about to let any cyberattacks slow you down. so you partner with ibm to build a security architecture to keep your data, network, and applications protected. now you can tackle threats so they don't bring you to a grinding halt. and everyone's going places, including you. let's create cybersecurity that keeps your business on track. ibm. let's create

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welcome back, everybody. mortgage demand from home buyers dropping to a 28-year low as mortgage rates rise. that's been weighing on lelende. i think it was the guidance it gave that has helped the stock a little bit since they reported numbers yesterday. joining us right now to talk about how he's navigating the housing slowdown is mat ishbia, united wholesale mortgage ceo. and thank you for being here today. >> glad to be here. >> let's talk a little bit about what you're seeing in the mortgage market. we're watching the ten-year above 4%, first time it's done that since november. what have you seen in terms of demand when it comes to new mortgages? >> you know, actually we have

seen pretty strong demand. i know the reports show it is all time low, it is a strong february februarys are usually slower there is a supply and demand issue out there. there is more people wanting to buy than people wanting to sell right now. so we're still seeing pretty strong demand. we're expecting a great march and pretty good first quarter across the board on the purchase side, it is great. on the refi side, really no refinance. no one is re financing from 3% to 4% to o6.25%. it is slow on the refinancing side >> in terms of refinancing, how much of the business was, let's say, three years ago >> back in 2020, 2021, a huge percentage, 60%, 70%, some were 90, 95% and those lenders are struggling now. we have been the main purchase lender for years now that's not impacted us as much our business, which is more important than the stock

>> your stock is okay after yesterday's earnings, but if you look at it since the time it came out, it is down 50%, correct? >> yeah. it is down since we came out but the way i look at it, money will follow success. we're going to be successful here and we have been. we're a large mortgage company, now a large mortgage company for a couple of quarters, large purchase lender. we made almost a billion dollars last year in the worst mortgage market in history. the stock price will follow. we pay a huge dividend people are buying the stock. i'm not worried about the stock at all. >> the stock is down today, not up down 2.8% and you lost money in the most recent quarter. >> yeah. we ate a billion dollars last year and with the market we lost $62 million, but we're operating profitably last quarter and every quarter since i've been running the company. >> what have you done in terms of employees i look at rocket and they had a lot of layoffs what are you doing now in terms of how many people you employ and what those people are doing?

>> we lost 6,000 people. we never had a layoff in 37 years of business. we never will. rocket and other companies are laying people off. they're struggling the reality if you only do refinances, your business is going to struggle. we're doing purchases and refinances mostly purchases now real thing is consumers are realizing you got to find a mortgage broker.com, find a local mortgage broker to get your mortgage now. consumers are getting more educated because nobody wants a mortgage, you want to make it faster, easier and cheaper our business is actually growing and succeeding right now while other people are struggling. we're not laying anybody off >> just to be fair your stock is down more than 50% too from the last couple of years >> but that's -- >> i realize you focus on purchases, not on refinancing and that is certainly a huge advantage. but let's just call it what it is >> yeah, but that's a silly comment because stock price means absolutely nothing to be honest >> not if you're an investor >> no, when you make a billion

dollars last year or 2 or 3 the year before, we're winning right now. we're the best mortgage company in america that follows success people will see it we pay 10% dividend. people are winning right now we're winning at uwm the mortgage market is struggling and we're the best mortgage company in the country. i focus on winning every day and we keep winning every day and the stock price will follow. >> this is a direct quote, it says aloong side devin booker, chris paul and deandre, the addition makes phoenix the strongest team in the league that's a little bit out there, mat. but whatever you say i understand what you got to do when you come on f if you lose in the first round of the playoffs, does that matter with this roster? the stock price is important, it is not as important as bringing home the championship. they don't invest to lose 50% of their money.

how about here, in this -- and durant last night, i had durant, all i needed was over 15 points, one three-pointer and the suns win. that was a draft kings -- that was $25. i knew that was going to happen and it did last night. congratulations. that was a pretty good debut and you got it going at least suns-wise. >> yeah, the phoenix suns are excited, fans are excited. i'm excited to be part of that with them and the mercury, adding kevin to the team with devin and the rest of the guys, winning there matters just like it does in the mortgage business we're winning in both right now. at the end of the day, the point is correct winning the championship, can you win every year you can't. but you got to make inches to improve every single day and being the best basketball people or the best mortgage company, that's the focus you got to do things every day you got to do things every day on the court and in the mortgage

business >> kevin durant, annual salary, $48.5 million. but i can't believe you were able to pull that off, though. i guess dysfunctional situation in brooklyn kind of made it possible, but congratulations on that it will be fun to watch. there is some -- there is some parity there is parity in the nba right now. i don't know who i would say is the best at this point who is the best? who is going to win if it is not the suns who is your second favorite? >> really a lot of great teams out there. the west is really strong. the east -- it is a lot of parity you hit it on the nose 10, 12 teams that could win the championship this year >> how many floor seats do you get typically? like ten at this point as many as you want? >> no. i have four floor seats. excited to cheer the team on and support the guys >> just wondering. okay sounds good. thank you. we will -- we'll talk about both we'll talk about mortgages as

well as the nba. coming up, which is a better bet for investors, sales sforce or snowflake? jon fortt will walk us through last night's report. he'll lay out the argument for both stocks. and then not first time he's done that, on the other hand, two stocks >> no. >> done it before with stocks? >> maybe not maybe not. >> and then the ceo of the world's largest brewer joins us after the latest quarterly result w we'll hear from the ceo in a few minutes. get the best of "squawk box" in our daily podcast, follow squawk pod on your favorite podcast app.

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big move, big moves in enterprise software after hours with salesforce spiking on a beat in the promises of margin improvement and snowflake sinking on light guidance. which is the better long-term bet? jon fortt is here to weigh in again on two stocks which he has done >> couple of times roblox ea, doordash, uber, every once in a while. couldn't resist. >> couldn't pass up. >> they both reported. snowflake, joe, is the better bet. it is at about $50 billion market cap and growing like crazy. i know the stock was down after

hours on the guide i think some people are misinterpreting that snowflake operates on a consumption model, not a subscription model with the global economy slowing, bookings came in light with customers buying access by the fork full rather than by the plate full that doesn't mean they consume less, they're conserving cash. snowflake did say newer customers are ramping up usage more slowly than customers did in the past. that's because new customers were spending like drunken sailors before you expect that to stop. beyond all that, the reason snowflake is a better bet, its strategy to become a place where developers can build fast, efficient apps, that sift through massive amounts of data. if that sounds like the perfect fit for the ai era, it is. ceo frank slootman called that the biggest expansion of snowflake's scope as a company since 2015 nice that salesforce discovered efficiency after activists ganged up on them. the stock got a nice short-term pop. snowflake has been driving efficient growth all along

>> so you -- is there a second part of this you just told me i should like snowflake more didn't you just tell me that >> i mean, joe, it is on the other hand so, on the other hand, don't bet against benioff. the salesforce had an impressive quarter, 17% constant currency growth, guide to 27% operating margins, i think it is because these activists put a target on benioff. over the past few years, salesforce had a co-ceo structure, you're scrambling to hire all the talent, engage all the customers, things shifted fast now that brett taylor is gone, stu butterfield is gone and the economic mandate is to drive efficiency, salesforce needs decisive leadership to identify the highest priorities and cut the other stuff. this attack by activists has given benioff the cover he needs to make those painful cuts and unpopular choices that would have drawn protests a few months ago. the test now is to drive

efficient growth since investors don't have the stomach for big m&a. that means rewriting software to be more flexible for the ai era, but don't underestimate the effectiveness of a founder who understands the assignment and has a sense of urgency benioff has the skill, the loyalty and the leadership to bring salesforce a win >> never thought of the activist point that way activists can give you cover to do -- make some really hard corporate decisions and what are you going to say what do you want, right? that's definitely at play at this point he had to. >> you can hear it all over the call he's, like, we're absolutely -- we're doing things in months that would have taken years, doing things in minutes that would have taken hours he was all over it >> total cover to do it. all right. jon fortt. >> almost forgot to switch the pen. >> oh, my gosh. >> did you do it >> i did >> and -- becky pointed out, dow component -- >> yeah, and it is good for at

least 175 points. >> there has been so many. >> 29 points with the deviser, that's why the dow is just -- >> the dow has the activists to thank. and frank slootman on overtime with me and morgan this afternoon. >> really? >> yeah. don't miss that. >> excellent thank you. >> thanks, jon. when we come back, the ceo of ab inbev talks rising beer prices the state of seltzers and much more that interview is next and in the next hour, governor phil murphy will join us to talk about the garden state's recently unveiled $53 billion budget his economic outlook and the national esg backlash. "squawk box" will be right back.

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all right, let's check out a tale of two retailers today. best buy out with fourth quarter results and it earned $2.61 on adjusted basis that was 50 cents better than the street had been expecting. on revenue of $14.74 billion, which was just ahead of estimates. but then when you look at the full year earnings guidance, it was weaker than expected best buy says that it sees earnings per share in the range of $5.70 to $6.50 a share. the street was looking for $6.71. that stock down by 2.8%. and then there is macy's, which reported earnings that were better than forecast

revenue came in essentially in line with expectations a key metric of sales performance at established store locations fell less than expected macy's also said it took a more measured aapproach to promotional pricing during the holiday shopping quarter and more disciplined aapproach to inventory management as well as a result that stock is up byv in ab inbev, reporting its first quarterly decline in volume since the pandemic. however, the maker of budweiser, modello and stella artois did report a growth in revenue and ab inbev ceo, it's good to have you on this morning welcome. >> good morning. thank you for having us. >> we did see a slight decline, i guess, in overall beer volume,

but that actually looks like more because you had to raise prices because of raw input and inflation. >> yes actually, if you look at 2022, we achieved our all-time high volume when you look at the quarter four, we had china, the whole covid situation and the u-turn, shutting down to try to get out of the situation so heavy weight on china and we increased our prices in october and in september retailers buy in advance and very bad weather in the back hand of the quarter in the u.s but to look at january, what you have seen, china is coming back being consumption is rebuilding. i was there a week ago and you can see people in the streets. you look at iri, volumes are 1%

down, 5% up in the u.s so a good start. >> just talk about what you see on the inflation front, what you've seen, where we are currently and what you expect and will it moderate at this point or no signs of that yet? >> i think that inflation when we look globally, we operate in more than 50 countries and it's everywhere i think that we got out of the up cycle and we have seen now inflation is moderating. when we think about costs, we see that a loss for 2022 but i think we are seeing now things going back to normal inflation, i don't think that's going to be as fast as one could expect but we are in the right direction. >> the foray into the seltzer, is it -- i mean, it was hot for

a while. how would you characterize it right now. it's a mature business, is it a declining business, is there a way to reignite the interest in hard seltzer at this point what are your plans? >> so seltzer's part of a bigger portion of the industry. we call this everything that's beyond beer in our language. so it's the intersection of beer, wine and you see different manifestations there, different liquids, propositions. seltzer was one, especially the ma malt-based seltzer now there are new products, even the vodka-based set tral, nutral is doing very well so seltzer is below what it was

before in the mouth-based version, but if you look at the vodka base such as neutral, it is growing and it is growing very fast. >> you're in the non-alcoholic beverage business. it's also an interesting place and i guess it is growing probably more than -- is it growing more than the alcoholic space for you at this point and what do you account that -- i guess during the day people don't want something alcoholic but they want to have something other than a soda or a soft drink. >> that's very interesting what we see is a conversion of two things one, tech knowledge got much better and today we brew liquids and non-alcohol beers that are exceptional across the globe we have budweiser zero in the u.s. which in december became the leading non-alcohol beer in

the u.s. and is growing well and this conversion of new technology, better liquids, is coming on a base with another unstoppable trend that we see, which is consumer, they want healthier options and they want to have more occasions and more opportunities to do whatever they want to do, including drinking beer. so we all know that beer is the rich liquid in terms of nutrients in terms of replenish very well electrolytes in germany people drink after sports, the non-alcohol market there is huge. people drink in social occasions, lunch, during the week and the non-alcohol segments is growing everywhere we have great liquids and this is possible because of high quality and innovation in the new product. >> in terms of the advertising, have your plans been affected by the prospect of a slowing

economy or are you on track to increase advertising you do more with digital or i think sports on tv, i see so many so many anheuser-busch inbev reports. >> i think he likes beer we've asked that if you look at the 10/19 to date, average $7 billion behind our brands in marketing. our category is big, it's growing, it's very resilient and we continue to invest in our brands and make sure that we have the best possible options for consumers and that we work

together for retailers to keep this category vibrant. so we are not stepping back. we are pushing forward >> all right, good luck. we need beer commercials we do. we look forward to them, especially at super bowl time. keep it up we appreciate it we'll see you. >> thanks so much. have a good day. >> i'm a little bit miffed >> why >> because of the caddie shack commercials. >> why >> ripped off my commercial from years ago. >> you're mad at them for ripping you off because you ripped off bill murray first >> exactly >> it was one of my favorite commercials and i actually ene med out loud wh wco back, we have mohamed el-erian stick around to satisfy cravings from tokyo to toledo?

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♪ icy hot pro starts working instantly. with two max-strength pain relievers. ♪ so you can rise from pain like a pro. icy hot pro. good morning futures are mixed. investors playing close attention with the ten-year yield back above 4%. one stock, however, has put the dow in positive character, all

because of the sales force it might have given itself a reprieve from a flock of activists circling with solid fourth quarter results and guidance and elon musk anticipates a highly anticipated investment day but how much did we learn of its plans? the final hour of "squawk box" begins right now good morning, everybody. welcome back to "squawk box" here on cnbc, live from the nasdaq market site in time square i'm becky week along with joe kernan s&p futures down by 16, the nasdaq down by 82, the dow up by

75 points but it would be in negative territory if it wasn't for sales force. sales force is giving it something like a 175-point boost. we'll talk more about that in a moment if you look at the treasury market, yields climbing back up, they're at 4.038%, the four-year is at 2.99%. and the senate voting to overturn a labor department rule that allows esg factors in making investment decisions. president biden has vowed to use the first veto of his presidency to block that measure. >> and the u.s. food and drug administration has rejected an application from elon musk's private brain company to test human subjects the fda had complaints about the

lithium battery and the potential for small wires to move to other areas of the brain. and tesla seeing shares drop after specifics were in short supply at the company's investor day. we'll talk more about what we heard and didn't hear later this hour with the former ceo of ford but you can see shares are off by about 6.8% but also check out how big of a run they had through the month of january >> let's go over to to dominate. >> you can call me whatever you want i'll pretty much answer to anything >> call me for dinner. >> i will be over for dinner at some point we'll start with shares of macy up by around 14% right now, an acceleration of pre-market value, around 650, 700,000 shares of it, better-than

expected profits, revenues in line with expectations sales growth fell by less than forecast and four-year profit guidance was ahead of forecast, a bit of accentuate the positive and shares of best buy down by about 3% just around 40,000 shares of volume the consumer electronics post better-than-expected profits and revenues both fell shy of consensus estimates. the macro and industry backdrop will continue to be pressured in the current fiscal year so we're down by about 2.5% or so on best buy shares we'll end as becky points out with a driving force in the market action. it's a huge driver for the outperformance of the market dow component posts profits that beat, revenues that beat and gave us stronger curtain

full-year guidance forecast and expanded its sock buyback program and ceo marc benioff says he's october mystic about future growth. >> you hit the hyper space button we decided it's time to go we weren't going to wait two years to fiscal year '26 to deliver profit acceleration. we were going to do that right now and that is what is happening. >> hyper space i can almost feel like the star warsish, millennium thing happening. the dow down around 175 points or so just because of sales force shares i'll send things back to you >> you heard star farce and millennium falcon and i heard --

>> to be fair, i just got back from disney. you can go right from toy story to galaxy's edge in about five minutes. they're right next to each other. >> that makes sense. i get it >> what would happen if they did tim allen and the original buzz? i wonder how that movie would have done? >> instead of doing captain america? >> they did buzz lightyear i loved buzz lightyear >> it was supposed to be the real buzz lightyear story. create the whole thing i saw it >> you go i don't remember eating that. >> look familiar >> i don't know. like homer simpson >> thank you let's talk more broadly about the markets right now.

mohamed el-erian, we've been watching the market very closely. is the market starting to believe the fed that they're going to raise rates higher and leave them there for longer? >> i think the market is going beyond the fed look at the two year i think that's the most important price to look at right now and i don't know whether it's hyper speed or to infinity and beyond to go back to your conversation with don, but the market has moved the two-years by also 100 basis points since the day after the last fomc meeting and basically signaling that the fed has fallen behind yet again. keep an eye on the two-year. we need that to stabilize in order to have a foundation for risk assets. >> we've been asking why isn't the ten-year going up more why aren't people paying attention to this? do you think the yield is going to have to go higher from here again? >> the minute you go to the

ten-year, as you know, you're bringing in a whole set of other issues, including growth and the concern that's in the market and we've seen how inverted the curve remains, is that we may end up having the fed take us into a recession that's totally unnecessary every time the fed falls behind and this is the third time it has fallen behind in two years, every time it falls behind, the probability of the fed dipping the economy into recession goes up so that's what you're seeing in terms of the yield curve, the ten-year versus the two year >> you've brought up this idea in your op-ed that you wrote today, you brought up this idea of the fed having some credibility issues once again because they went to 25 basis points last time around. you think it's harder for them to go to 50 basis points, even though we heard several fed officials say 50 basis points is on the table for them this next time around. >> it is hard. you know, i was against them

going to 25. i was on your show before the fomc meeting, i wrote it down saying down downshift yet, it's too early but they downshifted now what do you do if you go back to 50, which is what the data warrants, if they are truly data dependent, then they should go back to 50, you do two things. you undermine your forward policy guidance and you undermine the narrative of this inflation. remember, that word was said 11 times by chad powell during the press conference but if you stick to 25 and go higher for longer, which is the alternative, you risk slowing -- hiking into a slowing economy and you undermine your credibility even more. so, you know, it's the tragedy of the second best the further you are away from the right policy response, which they fell behind on, the more whatever you do has collateral

damage and unintended consequences that's the reality of the world of second best that the fed finds itself in. >> let me lay out a theory from steve schwarzman he thinks a lot of inflation that's been created is because the consumers have this unusual spending rate. their costs went to zero, still making as much money and a lot of them working from home. all of that went into savings. once covid left, you saw a huge increase in spending it would argue for the fed pausing and taking a look around, if we're going to get to the end of that unusual savings rate let's say sometime this summer, maybe it kind of cures itself and if the fed raises rates too far or too fast

there's that lag effect and then kind of runs into a wall itself, that the economy shuts down because all of this was unusual activity surrounding covid and the covid lockdowns. >> becky, you just summarized the complexity of policy making. >> we had the numbers today, core inflation is at a record level in europe. what we're seeing is a dynamic that we're seeing here is that inflation migrates from good prices and starts getting embedded into the system and starts getting embedded into wages. so the issue with everything you just set forward here is what do you do about wage inflation? what do you do with workers rightly looking to protect that purchasing power inflation has evolved. it's no longer about goods inflation, it's no longer just about service price inflation. we're now seeing it in wages as well and this is why the european

numbers are so important they are relevant to us. what is happening in europe isn't going to stay in europe. we're seeing exactly the statement dynamic in europe that we're going to continue seeing here >> mohamed, thank you. this conferring will continue. thanks for being with us today >> thanks for having me. >> i guess that's why it's called news but it says here new in the last few minutes. i want to prepare you for what i'm going to say "the wall street journal" reports that apple has delayed the approval of an e-mail app update with a.i. powered language tools over concerns it could generate inappropriate content for children the app is called blue mail and wanted to use the gtg chat bot to automate the writing of emails and the journal says that the update was rejected over apple's concerns about content

filtering. the app maker disagrees with apple's determination and says it does have content filtering options available. >> they call it blue mail because it's blue language >> maybe so. that would be a problem. blue material. coming up, is new jersey's new budget a boone for big corporations we're going to ask governor phil murphy next. sfa stay tuned. you're watching "squawk box" on cnbc to help you achieve it. so let us focus on the how. just tell us - what's your why?

welcome to "squawk box," everybody. the futures right now have a little bit of a mixed picture. the s&p and nasdaq off, s&p by 16 points and nasdaq by 80 but sales points right now up 68 point. the ten-year has been seeing a higher yield across the entire spectrum the treasury yields are up across the spectrum the ten year at 4.046 and the two-year is -- and the 30 year ever so close to 4% >> the governor there unveiling

a $53 budget this week, including a property tax rebate program and full payment under the state's public pension fund. what's getting a lot of attention is an end to a telecommunication surcharge on big corporations like amazon and walmart, something business groups had supported joining us now governor phil murphy of new jersey governor, as always, it is good to see you >> same here, joe. good to be on. >> and i try to gently prod you on certain issues. you were in the investment business for a while, right, and i think you understand that there's certain parts perhaps, i don't know whether you'd even concede this, certain parts of your party, of the democratic party, that are antithetical to what normal pro-business groups would think. but you've had to walk a pretty fine line. you're in a blue state but it's gotten -- that last election was pretty close, governor what did you make of that, how

close your opponent actually got to being elected did that imbue you with the notion that maybe you need to be a little more friendly to business and that accounts for what happened in this budget >> no, i don't think so, joe we've been i think on good terms with business from day one the problem we had is we inherited a train wreck in terms of the budget. i'll give you one comparison the surplus in the budget the year before we got here was just over $400 million. the surplus in the budget i just presented a couple of days ago is over $10 billion. it's literally 25 times the size it was five-plus years ago so we had said then that we had no choice but to up the ante on corporations to help us get through a very rough transition period we said it would be temporary. we got through it. and we're able to take the step responsibly to lift that

surcharge. i've said this recently, somebody asked me how do you describe yourself politically, i say, listen, i am a proud progressive for sure but i'm also a cold blooded capitalist but we have to do right by the taxpayers. that's why we're doing this. >> we have a national audience i know you probably want to talk about the new jersey budget, but you saw the esg and you've seen the overall backlash to esg. so that was a bipartisan -- i guess i'll call it bipartisan because it included a couple of democrats that passed yesterday in the senate, already passed in the house, president biden says he's going to use his first veto do you agree with the president vetoing this or do you think that deal was a good one and that he shouldn't veto it? >> you know, people have lost the scent here i go way back to the early days of what we now call esg. it wasn't called that at all

back 20-something years ago. and i was on the ground floor in my prior life. the point was that if you invest in companies that treat not just the environment literally but their broader environment, their workers, their customers, their communities and the environment, companies that do a good job with that, the theory is that they outperform their peers. it wasn't being -- anything about being woke or being about progressive. it was again cold-blooded capitalism that those companies did better that was the theory. and, frankly, i think at its core it should still be the theory that you believe that those companies will be top performers because they treat things around them in a first-class way. this thing has gotten completely hijacked not surprisingly by politics but it's not what this should be about. >> you know the results aren't

there and the unintended consequences can be worse than what the intended consequences are. societal norms change. for a while i guess you weren't going to invest in defense stocks does that seem like a good idea? fossil fuel. does that seem like a good idea now? >> no, i don't, joe. >> do you agree with the president vetoing this bill? >> i haven't really given it much thought but -- >> don't give me that! don't give me that you think about -- >> i disagree with your premise in the sense that the folks who do this well have not outperformed the market. i'd love people to meet mark ferguson, whose father is sir allen ferguson, former lly man united he's a cold-blooded capitalist, the chief investment officer for investment management and has

outperformed meaningfully the market for the past 20 years the guys who do this right are good at it it's proven. >> a fiduciary responsibility for a retirement plan to get that return can hamper that return >> joe, it's not like they don't invest and i don't want to speak for any one investment firm. this is -- i failed to address this but they do invest in fossil fuels they do invest the right guys who do this invest in all categories >> let me ask you this in the tips bill now the administration is using the semiconductor subsidies to impose much of the social policy that was in the failed build back better bill the commercial secretary rolled out the new rules for chip makers saying if congress wasn't going to do what they should have done we're going to do it in the implementation of the subsidy.

not just child care but the government is going to look at who they're hiring to child care and making sure they're part of the labor union and progressive groups the list goes on and on and on i'm talking about the new state of the biden administration and the democratic party and what looks like corporatism, looks like state-sponsored capitalism, with i e which we don't need because they make the wrong decisions all the time >> the chinese have been beating our pants or for decades thank god we have a semiconductor -- >> now you're just sort of punting. you agree with putting all of this social engineering into -- it's almost a foaustian bargain for these guys >> i'll use a new jersey example of this, which i think you'll

conclude that i'm sympathetic with some of these parameters. if you use state money, in other words, new jersey state dollars to incent a project, we're going to ask you to build union. period we're a proud union state. we believe in unions i have no problem with that whatsoever so if that's what is in the national bill, we're a union country. the unions built this country. >> and child care infrastructure, governor >> i haven't given as much thought to child care admittedly >> you've got to start thinking about these things you got to start thinking about it before you come on. you know i'm going to ask. can we have plastic bags or paper bags back in the supermarket? my wife asked about it >> tell her i said hi.

i'm open minded about it >> you and i have the same idea of what's romantic you going to the game on sunday? >> i am going. you going? >> i am. >> come on by. i'll be by the court >> all right, governor i love you you're my goff you're my guy. it's tough love. >> joe, whether you like it or not, i'm your governor >> i like it thanks, governor >> thank you. >> when we come back, did elon musk's new tesla market plan his the mark you're watching "squawk box" and this is cnbc ♪ to guide you through a changing world. ♪ why are 93% of sleep number sleepers very satisfied with their bed? maybe it's because you can adjust your comfort and firmness on either side. to guide you through a changing world. your sleep number setting. to help relieve pressure points and keep you both comfortable all night. save $1,200 on the sleep number 360 i10 smart bed. only for a limited time.

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welcome back to "jacsquawk box. rick santelli here we're looking for 2.5% disappointment, 1.7. that's a real disappointment because it's replacing 1.6 -- excuse me, 1.7 is replacing 3% that's a big drop.

unit labor costs exactly doubled from expectations. expecting 1.6 comes out up 3.2%. our previous look was 1.1. so really ramping up if we look at initial jobless claims, they remain under 200,000, 190,000 and continuing claims also besting expectations, 1,655,000. in the rear view mirror, 1,060,000. the close yesterday, we didn't really close above 4% in a true cash market close. i don't mean to be splitting hairs here gentlemen and ladies, but that is significant if you're a technician, especially for the weekly close tomorrow.

preopening equities are still up with respect to what they're looking for on the big 9:30 eastern opening. we still of course will continue to monitor what's going on above 4% but i can't stress. intraday is one thing, but the close, that's technically significant. joe, back to you >> steve leisman joins us. >> we had a massive surge in productivity with the pandemic a lot of productivity workers were laid off and weren't part of the count and then they came back in. there's been this decline in product ift as a result of it. how that plays into unit labor

cost but unit labor cost would be rising with lower productivity workers coming back i do want to talk very quickly about jobless claims i hate this job in the sense that there would be a huge sigh of relief out there if claims would finally go up, but there's no sense of that at all right now. we are now in the seventh week below 200,000, continuing claims came down. no sense at all from this weekly indicator that the job market is loosening up one more thing i want to show you, joe, which is how there are fed hikes priced in but also massive fed cuts priced in you have 90 basis points of hikes priced in through october and then through the end of next year, 2024, 130, what do you want to call it basis points of cuts built in and that's really the question about is the fed too tight, is the market in line with the fed, is the market not in line with the fed

that's the tngsension and the debate right in those three bars that you got >> slowly getting more in line i guess, steve slowly but surely. >> but not on the back end >> right but maybe it gets in line because the back end is headed even higher that we don't even know and we're still x amount away and now even the terminal thing is even higher and we're still below that i don't know thank you, steve >> i want to shift gears right now to talk a little bit about tesla. elon musk announcing his master plan three at investment day, close to seven years after that part two of that plan. they want to produce 20 million cars by the end of the decade. h here's elon musk >> the desire for people to own a tesla is extremely high. the limiting factor is their ability to pay for a tesla, not

do they want a tesla it's easy for people in this room to lose sight of that >> however, the investor event was short on specifics and we didn't get that new product reveal that a lot of people had been hoping for. the shares are down in the premarket by 7 3/4%. the stock may be off by 7 1/2 or so this morning but if you look at year to date the stock is up. there was a lot of expectation and buildup in the shares heading into it. >> you're exactly right, becky when you do an investor day, you usually go out and talk about the company strategy, you announce new products or services and lay out very concrete financial targets, whether it's revenue growth, margins, profitability and clearly in this event they only did the first thing. that being said, they did lay out a lot of enablers, gave a

lot of content and the manufacturing and engineering efficiencies that they're putting in place to reduce costs, which is key to tesla's continuing to grow and deliver more affordability products off the next generation platform that they talked about >> right i think another key point was that musk introduced a lot of the other top executives at tesla and that's certainly because of the questions that have been asked about his ability. he's been spread so thin by all the other companies he's running and especially how much time that twitter seems to have taken up from him at this point. to me even though it may not be what a normal company might be you doing an investor day, it seems like more normal than the usual tesla investor day, i think. he didn't make these grand proclamations, he didn't promise things you're not going to able to deliver >> you're right. this was more a traditional investor day to your point they trotted out a number of executives they hadn't

shown in any previous presentations to really take and at least some of the concern they have about musk and the fact that he's distracted maybe by some. ot -- some of the other business ventures they talked about meat and potato kind of things in the auto industry, around how they're drying costs down to improve margins, supporting the infrastructure for charging and talking about in vague terms new products coming down the pike. so compared to prefvious presentation, it was dialed down about a level of 5 to 10 >> and what has to happen next everybody keeps talking about all the competition that's out there but it's hard for anybody to kind of catch up with the gains that tesla already has, the first mover advantage and a lot of the research they've done what do you think this market for ev looks like a couple of years from now >> i do think to get mass

adoption, you have to get the pricing down to the 30 to $35,000 range. tesla started out as a software and battery company and is becoming a manufacturing company. on the other side you have established car makers who are manufacturing and engineering organizations trying to become software and battery companies the key will come down to who wins around this appealing product and around the software and user interface, it's around cost leadership and around consistent execution and tesla right now is one generation ahead of the other automakers but automakers like ford with their maki and lightning and hyundai with their eionic vehicles are making progress but tesla has the leg up on the competition and i think they

demonstrated that yesterday. >> where's your money if you had to pick a winner a couple years from now >> i don't think there's going to be one winner there's going to be a number of winners and a number of losers when you look at the adoption of evs, this is a huge addressable market in the next couple years you'll see a global market of around 100 million vehicles you're going to see businesses like tesla, which are going to continue to be either the leader or amongst the leader. you have businesses like general motors, they're coming out with a lot of products in the next 18 to 24 months they have to prove execution ford i think doing a very nice job with their new evs and hyundai-kia. i think there will be a number of winners, not just one >> if you had to look, some of the proclamations that we have heard that there has to be $10 trillion in spending, we should get to all electric vehicles, those still seem a little crazy to me.

you. >> have to look at the time frame. if you look at what tesla mentioned yesterday, they want to get to a run rate of 20 million units of production by the end of the decade. i don't see how that's feasible when you look at not only the capital expenditures involved, but you have to get the supply base up and running, you have to be able to execute in a very tight time frame, but over the arc of time, i think you're going to see the entire industry have a number of stranded assets as ice vehicles kind of melt away over time it goin it's going to take a long time the question is what's the cost and are investors going to want to provide the capital >> and does it work if you don't have federal subsidized funding. if you have a new administration that comes in and doesn't see things the way this administration does, does that stuff get stripped out and then what it still expensive, as you mentioned. you can't get to that $30,000,

$35,000 price range. >> again, over time i think these businesses are going to work their way down the economic curve to make these vehicles more affordable. and you're right, becky. right now a lot of the transition to ev is being supported by federal inscentives whether in the u.s. or europe or china. eventually those will go away. i think the demand for evs, ultimately it's about demand and i do think this industry is going to transition but it going to take a long arc and period of time to your point >> mark, always great to see you. thank you. >> thanks, becky >> one more quick note on tesla. it's flagged that the company says it could use 75% less silicon carbide in its next power train. you will see some red arrows

with silicon producers >> pretty amazing. coming up, analyst oliver chen joins us straight from macy's fourth quarter earnings call his take is next the first time you connected your website and your store was also the first time you realized... we can do anything. cheesecake cookies? [together] the chookie! manage all your sales from one place with a partner that always puts you first. godaddy. tools and support for every small business first.

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welcome back to "squawk box. futures up right now still dow up in large part

because of salesforce, big gain in those shares. meanwhile the one that's going the other way. >> right now take a look at shares of silvergate capital, under severe pressure this morning, down by about 45% the company is one of the top banks in the crypto market but says recent events leave it at less-than-well capitalized it says it is evaluating its ability to stay in business. it reported a $1 billion loss for the fourth quarters as investors raced to withdraw deposits and will be unable to meet a march 16th deadline for submitting its annual shares the shares have plummeted 95%. market cap has fallen below $500 million and coin base this morning says it is no longer accepting or initiating payments

to or from silvergate. that stock down to 7.65, down over $5. and earnings for macy's came in better than expected joining us fresh from the call is oliver chen, head of retailing and luxury just reading through some of these numbers, this is a big move for the stock it's because they came in with earnings that were better than expected and revenue declines less than expected what's the take away with you? >> what's happening with the consumer, it's a very choiceful consumer specific inflation as well services and that growth and those inflationary factors is driving a consumer discretion there's lots of comments about

consumers being in a cautious place. on the other hand, there are positives in terms of high savings rate and low unemployment luxury and beauty are doing well as well. >> comp sales from macy's-owned stores down over 3% on the year. they pointed out looking at the same stores from 2019 before the corona virus, sales were up 3% and 3.1% respectively. is macy's doing something differently or find a way to reach the consumer since the pandemic >> the omni experience of curbside pick up and macy's rewards and very agile inventory

management, as well as managing promotions that being said, we're still in a volatile traffic pattern and consumers are coming later and thar they're also looking for promotions overall, the retailers that survive post-pandemic now and macy's well capitalized with a yield of 11% also the macy's stock valuation is about a six times pe ratio. that's -- >> what do you think based on the numbers i'm a little confused. would you tell people to buy it? >> we would. we like the valuation. we like what macy's is doing, strong trends in beauty, guidance is appropriate and they understand the consumers and the cautious point of where the consumer is. therefore guidance seems

realistic and there's lots of initiatives for embracing the younger customer, which will be very important for long-term growth >> like what >> newer, fresher brands in terms of the private label brands also the consumer is going out again, occasion gifting, those will be factors. we're cognizant of plenty of caution points but there's always a difference between a good stock versus a good company. >> if you like macy's, what other stocks do you have like in the area >> we're excited about beauty. we're a little cautious on the compares of ulta we love the value offering at costco we like costco and gross cery outlets. ulta is one to follow and then

on macy's the valuation to us is attractive and the consumer could be better than feared. we're cautiously optimistic for the consumer the last one i'll mention is walmart. it's built a very an e-commerce specifically advertising >> that's another make we like as a bigger global story that's also defensive in terms of the beta and dividend yield but offensive in terms of technology >> walmart's 60% food now? did you say that >> 56%, in that range. it's a food leader >> it's a grocery store with a bunch of other stuff >> there's a consumer discretionary recession, so staples, essentials, becky, those are all key things we'll continue to watch. the valuation is more expensive at walmart, so buying that costs more in terms of the p.e. above 20 times, but we think it's

worth it >> oliver, thank you oliver chen. >> great being here. >> when we come back, we're going to tell you what you need to watch ahead of the opening bell on wall street. and a reminder for you, you can get the best of "squawk box" on our daily podcast just follow "squawk pod" on your favorite podcast app, and you can listen to us any time. we'll be right back. we all have a purpose in life - a “why.” no matter your purpose, at pnc private bank we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why? 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. go. go lights. go big city lights. go spotlights. go stadium lights. emerson software helps clean energy

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little more than half an hour before the opening bell on wall street. joining us is the founder and chief investment officer at capital wealth planning. kevin, you give us some good reasons why january was pretty good, the idea that maybe, you know, the economy would slow and the fed would be close to an end point, and then, as you say, everything flipped in february do you think -- which was more accurate to the true state of affairs? is it somewhere in between for where we are now in march? >> i think as we head into the last month of the first quarter, joe, it's still the fed on trade. i think january, we were wrong we were assuming the fed was off. they were close to their completion of rate hikes, which

would put us closer to a rate cut, and when we got that jobs report on february 3rd, it was the fed on all over again and the growth trade that worked in january kind of reversed it became a value trade in february, and i think that trend's going to have to continue here in march even the weekly jobless claims we got this morning, sub-200,000 is not what the fed wants to see. quite frankly, they would like to see 300,000-plus, which makes next week's job number so important for us, but it's data-dependent for march, and i think that the fed on trade needs to continue to be the defensive posture that investors take >> it's a combination of the jobs report and then the ppi and cpi and pce, and they're all equally important. do you think -- i mean, a perfect world would be a modest wage growth with good jobs numbers, but you know, then cooler inflation numbers, and that would be the best of both

worlds, but do you think the fed would still feel like it had to go higher and stay longer if jobs hold up >> yeah, i don't think one month's going to make a trend. we definitely need to see a number next week that's completely unlike what we saw last month the cpi is going to be justi as important to the jobs number, to your point, joe, and i think the fed is looking at this and saying, we're probably not going to see disinflation come down in a linear matter. there's going to be a stair step what we saw last month and possibly a little bit of a bump here and there along the way is to be expected because a lot of their work takes time for it to kind of permeate through the system. and none of us like to wait. but i think that the fed higher for longer narrative is the base camp that we're in june is a pivotal number, a pivotal month in terms of what they're going to do and number -- in terms of number of rate hikes, so if we get two more 25-basis-point rate hikes, the june meeting becomes really,

really important where do they go from there? in between now and then, i think range-bound trading is what we should be expecting. >> so, range-bound because what you're describing, everybody's basically in this camp now that we talk to, and so, it's front and center for the market, and we know where the market -- the stock market. we know where the stock market is would things have to be even more surprising for the market to go much lower, or could it go lower just based on what you described here i mean, do you expect a retest of the lows at 3,600 based on what you just described? >> no, based on what i have described, i don't think we have to go back to the lows i do expect the market to go lower. i think it's a little higher i think it's a little stretched here than where we should be trading. but the, you know, your comment that everybody's kind of back on to this camp is maybe a good thing for the positive bullish narrative, because it never hurts to have a little bit of a contrarian approach to things. for us, the fact of the matter

is, we think these markets are a little overvalued here we think you need to wait and see to kind of get a sense of what the fed really wants to do, where do they want to take that terminal rate? is it5.25? is it 5.5? you're starting to hear people talk about 6%, which was a very big number in november and december not a lot of people were saying that so, it really comes down to how high do they go? how long do they keep it there and you know, ad nauseam, we're talking about this inversion in the yield curve, and it's embarrassing that we keep ignoring it. but the bond market is clearly telling us that a soft landing, for this thing to work out perfectly, is probably an unlikely event so, i think you want to look at the entire landscape, remain defensive, keep a little dry powder, but i'm not a bear i'm still looking at this very positively over the longer term, but like i said earlier, none of us like to wait. >> that's the question, and it depends on your time frame, whether you -- do you wait for a

5% move down before you buy, or if you're long-term, do you just say, i see some things i like now? so, everybody's got to just look at their own situation, i guess, kevin, but doesn't sound like, like you said, you don't sound overly bearish but we appreciate it we'll check back with you after next friday, and i think the week after that, we get all the ppi, cpi, pce alphabet soup. but good to have you on. thanks >> thanks, joe a news alert for you reuters is reporting that the eu regulators are not expected to demand that microsoft sell assets in activision that report says that regulators' concerns are likely to be addressed by licensing deals between microsoft and rivals and other behavioral remedies but the real important story here is what happens in the uk we've been talking about the competition of markets authority in london has the ultimate authority about what happens there was a bloomberg story out earlier this morning as well that talks about how the company has been meeting this week with

the cma regulators since monday to try and talk about what's been going on, what they would do originally, the cma said they would have to sell "call of duty" or block the deal. that was a nonstarter for microsoft. we will see how this continues, but right now, just on those couple of reports, you can see a activision shares up that does it for us today. join us tomorrow right now, it's time for "squawk on the street. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber, mike santoli at the new york stock exchange cramer has the morning off futures are trying to hold some gains here in the face of surging labor costs stated today, nearly double the estimate higher yields as the long end now plays catch-up, ten-year 4.08%. our road map is going to begin with this monster quarter