the ceo of kroger's beating on profit and same store sales we'll talk consumer inflation and the bullish outlook, where it all stands with the albertsons deal. taking a check on markets, the crm boost, 12% gain is really giving the dow a lift here, up by 0.50%. s&p, just down fractionally and the nasdaq composite is down by 0.4%, 45 points. with bearish sentiment building on wall street, the cboe says traders are the m mostish since late september and writing, not believe the hype around s&p's 200-day, saying we continue to have doubts of the sustain act of any rally and b of a saying it's too early to dive into growth. all that as the ten-year sits firmly above 10%

joining us, cnbc markets commentator, mike santoli. >> we have spent a month, 20-something days above the 200-day moving average if you look in history, any time you have a 20% and rebound it against the 200-day moving average and stay there, you've never gone down to new lows. small sample size. you had a few times in like the 2000, 2002 period where you flirted above it there's no key to unlocking what the markets tell us. i still think we're in the routine pullback zone, maybe at the far extent of it the diminishment of investor optimism is everywhere we're down 6% or so from the highs. twice as many bears than bulls in the recent aii poll that came out today.

so, people are definitely on alert for this being just yet another fleeting failed rally. and yet there are some signs that you bought some credence to the momentum of january. in other words, would suggest it would take a lot to get back to october lows. >> mark newton said high ly skeptical we get back above 3900 what do you make of the bulls and what's happened with the rates and data >> it's a slow motion reset lower. so, i feel as if, as we talked about earlier, carl, the rate sensitive parts of this market are the ones most directly rate sensitive are struggling and creating this drag so, that is staples, utilities and real estate. the other stuff, the cyclicals, industrials, they're kind of managing to hold together. rates are up because the economy seems stronger than we thought it was a couple of months ago. there is this offsetting current at work here in the market i don't want to put too much

kind of credence in, oh, once w hit the 200-day moving rally >> you said rolling, sector by sector, i would say it almost seems difficult to say this is a bottom, this level is a bottom, because it seems like sectors are digesting the impact of rates, et cetera, individually, especially when we have the consumer right now at this moment looking good. we have a lot of retailers out with conservative outlooks >> no doubt about it you have a little more of that kind of, well, we've elongated the cycle. it feels like we pushed out the moment of truth, whether it's dipping into a recession of course, the fed might not be done until the fall. that's the way the market is pricing things at the moment it's a little more of the same we got up to 18 times forward earnings at the highs in january. now you come back down, closer to 17. none of it looks cheap none of it looks like a fat pitch but it definitely feels as

if volatility index is at 20 people are not concerned that there's anything really breaking here or that's really going to run away from us one way or the other. and, you know, people are buying put options because it feels like the prudent thing to do against 4% yields. it's not like we're running for the hills. credit markets continue to say, we're not too worried. >> it's been days since the journal did that piece about the fears of the surging vix in march. bracing for volatility. >> bracing for volatility, buying vix calls that's the t hedge, let's keep that in mi mo bearish on the market and strategists definitely getting more bearish on earnings 2023 eps estimates have come down steadily, as you know, in the last six months. 252 in june. 222 today. our next guest is among those seeing some greater skies. lower estimates on '23 and '24 on margin pressures and expects

multiples to flat line as inflation remains stubborn joining us, jonathan golub what are you seeing in earnings and why the move at this point >> so, we're lowering our earnings for 2023 by $5, which is not a lot and it's primarily -- there's really two drivers first of all, margins are coming in broadly worse the one change is that the energy sector, which had fantastic margins last year, those are now expected to roll over along with other areas like tech but that's a small adjustment. the really big adjustment is the market is expecting a huge v-shaped bounce in earnings in 2024 and we just think that that's just not going to materialize. we're more likely to be in an anemic economy, consensus view is that gp over the next two years runs 1%.

so, we avoid a recession kind of the no-landing scenario. if there's no landing, no v in earnings, if there's no v in earnings, the 2024 numbers are way too high and we took those down as well >> is any of this contingent on february and march data, especially in the labor market sort of ratifying what january told us, or is that irrelevant to your view >> no, it's not irrelevant and if you look at gp now, which is interesting, which the atlanta fed's view on how first quarter gdp is going to come in, it's going to come in 2.5% to 3% so, the market's getting their head around the fact that in the very near term, the data looks really hot the employment data is really hot. the inflation data is really hot. at the same time, if you don't have available labor, it's really hard for companies to grow their revenues in a meaningful way and if the fed is forced to tighten more, they're also going

to tb a headwind to the economy. so, what we're probably looking at, putting aside the next few months, if you look at the next couple of years, you're looking at inflation, which is going to stick around 3.5 or 4% on average for two years. gdp, which is going to look like 1% it's what i would call stagflation light. it's not the kind of stagflation you had in 1970s where the unemployment rate was really high and inflation was really high it's just annoying inflation and subpar economic growth and it's just lousy for corporate profits. margins get beaten up and employees do okay. wages go up more than inflation. employees will feel okay but corporate profits will be weak. >> jonathan, we were talking to mike about valuation in the market i'm wondering if you think the downside to your earning estimates is there is downside risk, i should say, to your earnings estimate even after

lowering them. doing the back of the envelope math you're still expecting pe of about 18 for 2023, which is just above where we are right now. >> yeah. but when you're talking about an 18 multiple, you're using the consensus numbers, which are really high. but if there's a risk here, the risk is to the multiple. the risk is that the earnings -- if you said, where am i likely to be right or wrong, if i made a mistake, it's that the earnings are right, the earnings don't bounce in 2024 like everyone expects but the multiple finds this environment less appealing and, listen, melissa, one of the questions we're talking to people about is, you know, with cash right now at 5%, a lot of equity investors are saying, if i can get 5% more or less guaranteed on short-term fixed income, why do i need to play in equities with all these risks? and if that is -- if more people think that way, then it's possible the margin comes down,

but the earnings number, i think, are really right. and i think ultimately, the multiple's right, too. here's why i think the multiple stays where it is. first thing is, we're going to avoid a recession. and that is hugely positive for multiples. that's a positive. on the other side, offsetting that, is that inflation's going to be stickier, the fed's going to go -- is going to go further and you have a weak economy. i really am comfortable with this flat pe outlook, but, you know, if i were to make a mistake, it would definitely be on the multiple. >> which sectors, jonathan, do you think have the most sort of correction or gap between where the estimates stand and where reality will be, in your view? >> you know, and i'm a big fan of the energy sector, but it's really interesting that the oil curb is backwardized right now basically the market is calling for oil prices to slide for the

next couple of years i don't think that will happen i think there will be an upside surprise on energy but the earnings estimates, the consensus view has been coming down on that that's something that i'm watching pretty closely. the other areas, the market's expecting a really big bounce in tech-related companies and i think they're going to be disappointed there i think it's going to be a more shallow bounce than the market thinks. >> interesting, jonathan, especially coming from you, knowing how disciplined you've been on earnings watching in the last couple of years talk soon, jonathan golub. >> thank you after the break, a look back at the year that was 2017. that's when snap went public six years ago to the day, in fact. tom brady of the new england patriots just overcome a 23-8 deficit to beat the falcons in the super bowl 2017 was also the last time needham was excited about the outlook for salesforce all that changes today upgrading the stock to a buy

after a 145% run the analyst behind that call will join us next. don't go anywhere.

needham changing its stance on salesforce, going to a buy rating in today's session. let's bring in scott berg of needham, the analyst who had that call. scott, great to have you with

us >> hi. good morning, melissa, carl. thank you for having me. >> what meaningfully changed what did you hear from marc benioff that convinced you to get off the sidelines. you've been here for a very long time, so it must have been something major. >> our entire thesis the last six years is the company has cost customer acquisition is structurally high to our overall upper space during the last four or five years. the company has not been able to gain operating leverage in a model we think a company of that size and scale should. what changed yesterday was a completely different commitment to driving down that cost to customer acquisition, we believe. our new estimates for fiscal '24, we have those costs coming down roughly 15% year over year which is the first time they've had a meaningful change in that cost trajectory in about six years. we think that drives overall operating margins much higher. not just this year but also in

fiscal '25 and drives meaningful cash flow which will be relative basis. >> how much do you think elliott and the other activists -- how much of a role do you think they had in this narrative change >> you know, i think they had a reasonable impact here on the share buyback program, my guess is the company probably would have announced that anyway in terms of the margins trajectory, it seems like the company has finally heard loud and clear, investors want better cash flow from the company their operating margins have been relatively flat and you had a couple of investors with bigger megahorns talking loudly and i think there was a reasonable impact there. >> a lot of discussion, obviously, about compensation and revenue payouts and what some other firms today said are of hand-holding and endless perks. do you think the employee base recoils at that or -- and even if they do, maybe the labor market is entering a period where the company can handle it?

>> yeah, i think you almost have the right perfect storm in the macro with some softness to drive some of these changes internally some of the information that we've heard from either partners or different people in the salesforce ecosystem, they would spend a lot of money in some of these operational areas, especially acquiring customers and we've heard some changes the last couple of quarters that have us encouraged there are some real structural changes unfolding in the company we think the guidance this year really reflects what some of those changes are. >> salesforce has historically been a rollup company, scott, and disbanded its m&a company. i wonder if you think those days are really behind it >> my guess is for the short term, but we've seen a lot of these larger horizontal platform players, whether oracle or s.a.p. or microsoft go through stagnant periods of acquisition. over time, they still need to acquire new products, new industry to fuel their general

growth trajectory. even if isn't hypergrowth. my guess is it's a lull, and something they revisit 12 to 24 months i don't think it's over entirely. >> the title of your note is new profitability focus wakes this long-time bear how does it rate relative to the other names in your universe >> i actually put this in the bucket of the 33 names i cover today, so i think be within my top six or seven because of the cash flow to growth is going to be so meaningful and outsized over the next two to three years. the stock before today's open was trading at roughly 18 times our fiscal '25 free cash flow estimates. we think with this type of growth it's over 20% the next three years, you can fully support 25 times free cash flow estimate on fiscal '25 revenues. if that's the case, you know, our upside is at least, according to the note today, was 37, 38%. we feel pretty confident this is -- these are metrics the

company can attain when they publicly released these guidance figures in the past, they have hit them if they hit them, we think the stock works very well. >> scott, good to talk to you. scott berg, needham. later on this hour, tesla shares under pressure as the company's investor day lacks some specifics that the street was looking for. but one analyst says none of that matters in the race to the bottom on costs. no one can keep up we'll talk about that. disney may want more hulk and less hulu. we'll break down the bull/bear case on selling out of the streaming business ♪ helping you discover untapped possibilities and relentlessly working with you to make them real. ♪ because grit and vision working in lockstep ♪ puts you on the path to your full potential.

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that always puts you first. godaddy. tools and support for every small business first. welcome back i'm deirdre bosa and it's time for "techcheck." salesforce investors rejoicing benioff seems to have turned ohana, better results. counterpoint, snowflake and box

are getting crushed in today's session. the culprit are weak outlooks. snow snowflake, enterprise darling of the 2022 cycle seize the top line decelerating. box ceo spoke directly to market saying customers are pulling back against a less certain macro back drop. salesforce, by the way, didn't dispel that notion it's expecting sales growth of just 10% this year that only narrowly avoids that single-digit territory of the legacy or mature software companies and neither did the cloud giants early this earnings season as a group, they're one of the best broad gauges of enterprise spend. these are the latest numbers you're looking at but they are expected to fall aws into the teens where does that leave investors as we approach the end of this earnings season? wall street may be changing its tune a little bit. looking less for cost-cutting, more for actual top-line growth. bernstein this morning says in a world of decelerating growth and negative revisions, investors are keen on reacceleration

stories. benioff certainly hit that tune spot on, delivering, however, as you were just talking about, could be tougher and that's really what snowflake and box are suggesting to us this morning. >> is there also a model difference, deirdre, and carl just reminding me you did cloud week at one point earlier -- >> remember cloud week, dee? >> yeah. >> i must have missed it as i understand it, snowflake and crm have different models in subscription that, i would think, make snowflake's outlook a little more conservative on purpose because the macro is so uncertain. >> important distinction snowflake as well as the hyperscalers, google, microsoft and amazon, aws, these are consumption-based models it's easy for companies to turn them on or off these are the first areas to hit. salesforce, let's not forget, i

know it's twitter and elon musk, but they were able to cut 75% of costs associated with crm. those are getting hit as well. i think it's all part of this big macro picture, where can companies cut. maybe take a little longer to cut the subscription-based models in terms of enterprise spend but does that mean that's another shoe to drop when you look at crm, growth used to be the story now it's cost-cutting. maybe a reacceleration story but 10% growth that's not the sales force we've seen of the last few years. >> certainly not meanwhile, the push and pull is often, at least this morning, been reflected through the lens of octa and the guidance they gave what accounts for that split the things we're seeing narratively through the eyes of snow versus an octa? >> that's a good question. octa has had a tough go, but really this was an integration story as well. remember they had that

acquisition. and the ceo came on, told us on "techcheck" they were having trouble. he was very candid, integrating that team into their own again, when we talk about this shift that investors are looking for maybe not just cost savings but a reacceleration story, this is where octa plays in it's up 8% after those earnings. but investors, it was so beaten down, are starting to get excited once again about some of these names. >> interesting after a long run down thanks deirdre bosa don't miss snowflake's frank slootman tonight right here on cnbc. kroger shares jumping on the back of stronger results and better than expected guidance. we'll speak to the ceo about the consumer inflation and state of play in its bid to buy albertsons and we have been watching crypto bank silvergate all morning long we'll tell you why it's losing half its value today

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let's get to some notes. tesla, of course, investors not impressed by elon musk's so-called master plan 3. one bull, adam jonas saying it is about to take off and it will be hard for the competition to keep up.

let's discuss with our own phil lebeau there are a lot of ways elon musk talked about cutting costs, in manufacturing, and reducing the amount of raw materials needed, the cost of materials and other battery makers, other manufacturers are reliant upon. >> whether it's through reducing the cost with raw materials, whether it's through greater efficiency of bringing all the processes together, even how they build the vehicles in the future they believe can be done far more efficiently at a lower cost on paper, melissa, this made a lot of sense there's nobody arguing with what they were saying in terms of what is possible the problem is, there were no benchmarks that were set out there. it was not as if elon musk said, look, by '25 we expect to have this amount of investment, this amount of savings. by 2030, x, x, and x there was none of that it was eventually we'll come up with a vehicle that will cost 50% less when your guess is as good as mine.

maybe '25, maybe '26, maybe 2030 that's why the stock is under pressure adam jonas is right, this he are ahead of everybody else in terms of reducing costs, vertical inte integration, et cetera the question for investors, how much are you willing to pay now when you're not sure when that payoff comes >> phil, it reminds me of the impact on onsemi today b of a comes out and defends saying the cost claims out of tesla are, quote, notable but it's premature to bake it in absent any actual product, timeline, data or independent verification how to take this claim. >> 100% right. and we have seen tesla in the past make claims about how much they are going to bring down costs or how much they're going to increase their scale. and they may eventually get there, but they don't get there right away so, now the question you have to ask yourself in terms of, let's talk about taking silicon out of

the manufacturing of batteries and key components within the vehicle. is that going to happen in the next two years maybe a little bit maybe not to the degree people are expecting, which is why you see those stocks trading lower the question again, it gets back to what i was saying earlier, there's no way as an investor for you to say reasonably what the expectation is in terms of revenue and cost cuts, et cetera, over the next couple of years. you can have a general idea, but you can't look at that presentation yesterday and say, i definitely expect them to have this by '25 or '27 or '30. >> right but you got to crawl before you walk, right? and if there's any hope -- >> you do. >> -- to getting to that $20 million by 2030, have you to cut those costs by a lot. >> absolutely. and look, and they're way ahead of everybody that's not in dispute here what they're planning on doing, i think, most people would say, yeah, they've got probably a better shot than anybody else of building a lower priced ev and

cutting the costs by 50% the question is, how quickly can they do that >> phil, appreciate that really quick, bespoke with a nice chart this morning. >> that was a good chart. >> looking at how tesla, in their words, got boring. the market treating tesla as any other automaker. they look at the rolling one-year correlation between ford and tesla you're getting closer to valuing like a traditional oem. >> but tesla is a large stock and moves more because it's a bigger part of the market. if you take a look, to say investors are disappointed with the stock down 6% after being up - >> double -- >> -- 60% since the beginning of the year, it's actually reacted much better than i thought because it's usually a sell the news event. >> it went in hot to that meeting. another note catching our attention is disney and whether or not they want less hulu and

more hulk. citi thinks so they predict disney may sell its stake in hulu, perhaps to comcast, and in return try to secure the distribution rights for hulk back from the parent of universal. the firm says disney could use the hulu proceeds to detire debt, sale some shares if comcast, for example, were to acquire hulu, they say it would be a net positive for their dtc streaming efforts as long as it can pay below the current floor value. let's discuss that with julia boorstin, referring to our parent i guess they're being a little more specific than iger was with faber a couple of weeks ago? >> yeah. what iger really said is everything's on the table. i think he wanted to make it clear that this assumption that disney was going to buy out come cast iger is obviously very strategic. you have to wonder how much he said that in order to make sure that he wasn't paying a premium if he were to be buying out cnbc's parent company, comcast,

to make it seem like he would be willing to let the asset go. there is that question there but i do think ultimately, carl, what this really comes down to is a bigger conversation about how much disney is going to be prioritizing general entertainment. chapek, bob iger's predeceprede, really wanted disney to be destination for entertainment. iger wants to be very careful about these assets, these general entertainment assets that may be less differentiated than their premium brands, including some they bought when they acquired those fox entertainment assets, such as the avatar brand, which has prooun to be valuable for them more recently. that's the question, how does general entertainment fit into disney's future? and what about this bundle, don't forget so many that subscribe to disney plus, also subscribe to hulu and espn plus.

there's a question about what happens to all three apps. the last thing, when we're talking about hulu, we have to remember this is an app and a platform that's really defined by its licensing rights. right now it is valuable because it has so much different types of content on there. if disney were to sell hulu, and the question is at what price and sell that remaining stake to cnbc's parent company, comcast, the question is what rights would be associated with it? the same thing holds for what happens if comcast sells its stake to disney? we can't diminish the importance of the rights conversation without those rights, just a platform with ad tech. the real question is what's involved with it. >> the interesting note from citi was the estimated impact on nongap eps they make it clear that, you know, disney doesn't break out hulu financial, so this is sort of backing into it but there's actually a headwind of 35 cents for nongap eps for the year, for 2024, and a 14

cent tailwind. so, the negative impact is much greater. is the real value in letting hulu going paying down debt, which won't show up, necessarily, in that number? >> yeah, i mean, certainly, of course, there's this question about the value of paying down debt and there's no doubt that will be impactful. i think it's just such an important piece in terms of this broader strategy and the big picture decisions that bob iger has to make right now that are going to have long-term implications for the future of the company. is disney going to be about premium brands, about iconic premium family-friendly content, or is it going to be more broadly about general ente entert entertainment? of course, how does espn fit into that as well? melissa, if you're talking about sort of earnings and those eps headwinds, one thing you have to keep in mind is that sports content rights are incredibly expensive. there's a new wells fargo note out that i believe estimates that 30% of all -- one-third of all content expenses are associated with sports

think about what that means in terms of disney, its commitment to espn, espn has been really valuable to holding the tv bundle together, but as that bundle disintegrates and as more people cut the cord, that could come into play as well, especially with the decision of where you're going to put those sports rights. i wouldn't estimate if you're thinking about costs and the impact, those earnings headwinds, the way that all of these content rights will play into those decisions moving forward. >> that's a great point. and one last thing on disney, i don't know if you saw the desantis op-ed in the journal basically looking at why he did, and will disney respond at all their stratic motivations change in the state of florida? >> do they not open theme parks -- any new projects? will they go elsewhere at this point? those are all big questions. coming up after the break, the biggest takeaway from some retail earnings we got today macy's, best buy, american

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. we've gotten a lot of color on the state of demand, the state of consumer. walmart and kohl's getting pressure on consumers and macy's this morning out with an earnings beat but offering a,

quote, prudent approach to their outlook. let's take a look at telsey adviser dana telsey. let's piece together what we've heard from retailers but also are delinquencies rising, credit card levels rising what is your take on where the consumer is right now? >> the consumer is pressured, no way around it. when you're seeing price increases you've had from inflation and, frankly, the wage growth isn't keeping up with some of the inflationary headwinds, it's watchful i think that's why the retailers, as you're looking at 2023, some of the guidance can certainly be cautious. you're seeing the first quarter continuing to be a bit of a challenge. what they've all done now, they're managing their inventory tightly so the level of promotions won't accelerate as we go through 2023 >> and that seems to stand out with macy's when they were talking about rationalized discounting. they didn't want to sell at any cost, so they're very disciplined in terms of getting that inventory down in a profitable -- or more profitable way.

dana, i'm wondering in terms of what you've heard from retailers so far, is there any one retailer that came in much worse or better than you had expected? >> i think one of the ones that stood out was tjx. their comp up nearly 7%, they talked about the strength of apparel and strength in traffic. you're not hearing that from any others, which definitely goes to show that value and convenience is what matters to the consumer today. so, that stood out to me i think also you take a look at luxury, look what macy's said about luxury they're continuing to see luxury being solid. luxury may not have the growth rate that it did in 2022, but it's still outperforming so, the consumer is paying for that innovation. but i think the agility that the retailers are showing to be able to get the inventories down, and, frankly, the guide anance they're giving it may be at low end of investor expectations for 2023, but the setup for growth opportunities in '24 are there i think that's why macy's

guiding to growth in top line in '24, i think that's why the stock is up today. >> yeah. not bad comps at bloomies. i wonder, if in fact they've done such a great job managing inventory, the market is interested in arresting some of these price increases. where we wrung out all the disinflation we can out of the inventory correction we had? >> i think overall we're not going to see price increases anymore. i've spoken to a couple brands out there where you may see prices coming down because the $10 or $5 price increases they took, you're not going to see sell-through going through for 2023 i think you're going to have more competitive prices than you did, but also hopefully not the same promotional levels we did in 2019. it's managed better. and i always think it's agility that really helped the retailers get to where they are today. >> the other puzzle for the market, i think, is -- when we hear the consumer's pressured, obviously, that's been the

refrain from multiple retailers, but then you look at jobless claims today at 190. by some measure claims are lower now than they were when the fed started to hike. how does that work do you think the correlation between the willingness to spend and the labor market is broken down >> i think one of the things is you're looking at daily essential prices for cost of living, they're up look at the food price increases we've seen so that shift in spend, some of it on essentials, some of it the shift in services, the discretionary piece of the pie is getting reduced by core consumers in that lower to middle income level. >> dana, nice to see you thank you. dana telsey. >> thank you still to come this morning, kroger is one of the top gainers on the s&p after posting better than expected results. pretty good guide as well. an upbeat outlook helping to boost shares with the dow up 85.

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kroger, stocks in the green. they reported a beat on earnings, same store sales, inflation helping to boost sales as the company's private label generally priced lower, jumped about 10%. joining us today in a first on cnbc interview is kroger ceo, rodney mcmullin. thanks for joining us. >> thanks for the invite. >> pretty good guidance.

the quarter was strong can you walk us through the first question we've asked any consumer retailer, what consumer externalities look like given pricing and whether you're seeing any pushback? >> that's a great question what customers are telling us, they're already behaving like they're in a recession, even if they're not personally for us our business model is designed to be successful regardless of the environment. what we find is customers are doing things to stretch their budgets. they're doing, as we mentioned, we call it our brand as opposed to private label, but growth was over 10% if you look at digital downloads of discounts, coupons, things like that, last year we saved customers over -- well over billions, in fact, about $1.4 billion. so, customers are doing a lot of things to stretch their budget they're eating at home more because you can eat at home for one-third to one-fourth the cost of going out to a restaurant

so, the customer is already behaving, but all of those things are things that our team, you know, are able to support and thrive in. >> you did talk about increasing associate wages. at the same time i think the capex guide came in a little below the street are you trying to offset one with the other >> no. if you look at our associate wages, we've raised them over the last five years, over 30%. last year was over 6%. and we're continually investing in our associates because it's helping reduce turnover. that helps our customer experience, and then over time, that will help gain share as well so, we're really looking at all the pieces fortunately, we operate in a business that has strong cash flow we continue to have growth in our business so, we're able to fund our associate wages, we're able to fund some additional investment and pricing for our customers and continue to invest for the future of our business as well >> when i go to the grocery

store, i may be one of the last people in manhattan to go physically to a grocery store, but when i go to the grocery store i see a lot of other shoppers and we're all walking around and people are saying, i can't believe the price of eggs are this much, i can't believe a bag of doritos is this much. do you think we've reached peak price increase food >> in terms of the way of our estimates, if you look at the first half of this year, we would expect inflation to continue now it won't be as bad as it was, but we still expect inflation to continue. as you get to the second half of the year, we would expect it to be more closer to normal or modest if you look at eggs, eggs are so unusual just because the avian flu, so many chicken were lost and once those chickens -- new chickens are born and they start producing eggs, over time you'll see that becoming more reasonable, more modest. but if you look, we don't see

deflation on the horizon we expect inflation to get much more modest and manageable >> okay. and i'm wondering in terms of the tradedowns that you've seen, what are some of the most remarkable or market tradedowns you've witnessed your consumers make, and how does that impact margins for you. >> if you look -- and we don't call it a tradedown because what we find customers going from national brand to our brands and a customer is able to save 7% to 10% on a basket of goods when they buy our brands versus the national brands, and what we find is the quality of that is so strong, when the economy improves, they stay with our brands we are seeing people shop more frequently smaller baskets to make sure they're not thrown away as much so the product is fresher. we see people buying more things where they're eating at home versus going out they're really managing their budget across.

we see people buy more smaller packages of goods as opposed to bigger packaging >> albertson's story about divestitures, trying to get that over the hump. what is the latest >> if you look at albertsons, they continue to do a good job from the ftc standpoint we're in active dialogue with the ftc we've prepared the information for the second request we've started the process of looking at divesting of stores and are pleased with the initial interest from other companies in terms of buying the stores that will end up being part of the negotiation. so we're exactly where we thought we would be, we would expect to be able to close in early 2024 >> would any moderation in inflation, specifically food, make this more palatable to regulators

is it easier to sell if, in fact, we're not talking about record high prices at the grocery store every day? >> the federal trade commission will look at the competitiveness of every market and i'm sure from a senate the and congress standpoint it might make it easier but from a federal trade commission, we feel very strongly that the stores that become part of the continuing company we'll invest more than $500 million in reducing prices and we'll start day one. we'll invest in wages and provide better job security. we'll be the largest union employer across the u.s. we believe it's a win for our customers, for our associates and the communities. we think when we're able to go through the detail the ftc will understand that and that will be the important part we think inflation is probably more outside in terms of other people looking at the transaction. >> i'm glad you mentioned labor

force because we continue to talk about the number of, say, mentions about labor shortages on earnings calls. that continues to come down. would you argue labor availability is getting better >> it's certainly getting better if you look at the number of openings that we have. our workforce is about 450,000 associates the number of openings is about half of what it was six months ago but we would still have 7,000 to 9,000 openings. part of that progress is obviously we continue to invest in wages and other benefits as well we would see that it's getting better but still it's a great market if you're looking for a job. >> rodney, appreciate it very much. >> thanks, carl. thanks, melissa. >> interesting comments on the consumer in light of what we've already heard from so many package food companies. >> they're acting as if there is a recession already. we don't need an official recession to start

their behavior has changed already and that's an important point to grab hold of because the consumer is reacting to the data we're getting into what the fed is saying, what the fed is telegraphing, the talking heads are saying and there's an increasing bearishness on the street. >> they are pricing the future in to some degree. >> eggs at $7 a dozen, you have to up next, why a stock is in free fall right now plus, watching hpe, brdcoaom and dell back after this. advancing flight for future generations. ♪ welcome to a new era of flight.

today's chart you cannot ignore silvergate. shares are crateering as the company discloses it's evaluating its ability to survive as a growing concern it will again miss the already delayed deadline filed at 10k. jpmorgan down grade on those liquidity concerns coinbase has stopped accepting and initiating payments to and from silvergate. despite that wolf still optimistic the 50-day moving average crosses the 200-day. each of the last four times that's happened has led to major

rallies. golden cross and crypto, is that what we're talking >> it is we may not be a growing concern. have to expect a run on the bank this morning we're hearing a lot of sort of related parties doing the we have nothing to do, will have nothing to do with silvergate paxos did that within the last 15 minutes or so a lot of fallout here. within crypto land in terms of the crypto banks we're watching signature. signature has some crypto business we're watching that under some pressure but, of course, silvergate is facing a lot of investigations into its practices and its potential ties with binance >> they were a community bank -- >> and they found -- >> and rode it. >> and just in the past couple of months a lot of big investors

have actually come in. we've seen citadel, black rock, susquehanna go in and take big stakes in the company. i wonder what the reaction is there this morning >> we'll see we talked about the potential cracks that you have room for in a rising rate environment. the crypto cracks have been limited. to the judge and "the half." carl, thank you very much. welcome to "the halftime report." i'm scott wapner front and center this hour rates and earnings one going up, one going down and what the implications are for stocks and your money if that trend continues. we'll debate with the investment committee. joining me josh brown, steve weiss and right here at post nine jim lebenthal, jenny harrington a check on the markets we are watching the s&p 500 very closely today because 3940, we briefly were below and are barely