announcing the lowest economic growth target in decades we go live to beijing. the economic road map to ban foreign technology like tiktok it is monday, march 6th, 2023. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen andrew is off today. we have green arrows across the board. last week was a good week for the markets. you had the dow and s&p both

having their best days since january on friday. they had been four weeks in a row that the dow had been down until last week. s&p was down three weeks if you look at what is happening in the treasury market, the 10-year treasury at this point is yielding below 4% 3.917. 2-year treasury is 4.838 joe. i almost got it. >> i saw you researching >> i read it earlier >> tapas >> we just had the guy on. he couldn't spell. >> banks couldn't spell. >> he didn't put the "i" in. his was there is a realistic alternative. that is tiara. >> i think he messed it up

there are reasonabille alternatives >> i was over in madrid. there are some that look like bugs i'm not sure some weird fish. tentacles. >> squid >> it wasn't squid what was tapas >> there are plenty of alternatives >> okay. i guess mike wilson. we just had mike wilson on i don't know this might be the bane of being good at something. you get really fine about your calls. mike wilson thinks it is possible of 3,200 in the cards for the s&p because of earnings problem from higher interest rates. >> he has been negative for a while. >> he still is now he is saying that the

short-term outlook rally has room to run before headwinds increase >> why >> now he is talking about 2.5% higher than friday's close at 4,150. >> on a technical momentum >> the near-term rally may have room to run. despite that, we believe -- i think there is an at this point in here. we believe it does not refute the very poor risk/reward offered by many stocks given valuations and earnings forecast that remain too high in our view he expect margins to pivot >> maybe you will see something. >> there is support last week this suggest the bear market rally is not ready to end yet. that is mike wilson.

time for the squawk planner. on wednesday, adp and then thursday is the initial jobless claims and friday is the february employment report this is late that is march 8th. the economy added 200,000 jobs after january's 517,000. >> today's the 6th. >> today's the 6th yeah the 10th very late. >> yeah. i'm flying on the 10th in washington, jay powell will testify before congress tomorrow and wednesday on how the central bank is thinking about inflation in the pace of rate hikes. earning season slows this week there are a few reports of note. tomorrow is dick's and then

campbell's soup. and now guidelines for foreign technology senator mark warner would introduce the bill to ban or prohibit apps like tiktok. warner is a democrat and said he is working with republican senator john thune he is not just concerned about the security of the data, but the type of content they are seeing he is worried that tiktok could be used as a propaganda tool senator warner will join us tomorrow on "squawk box" at 7:45 eastern time republican senator josh hawley is expected to introduce a bill today to ban senior executive branch officials from owning or trading individual stocks he told the wall street journal that the current law is designed to prevent conflict of interest is difficult to enforce. he said executive branch members who have access to privileged information should not use it to

get rich senator hawley said previous bills would prevventing individual stocks. tesla cutting prices on the model s and model x in the united states to boost sales according to the tesla web site, prices for the s are down $5,000 and then x is slashed $10,000. it cut prices on the model 3 and model y in january at investor day last week, elon musk said he was surprised that small changes in price could have a huge effect on demand tesla shares are up 60% so far this year. arm, a.r.m., the british chip maker owned by softbank is seeking $8 billion in an ipo arm expected to file

confidential authority with the public listing later this year they hope for the valuation above $1$150 billion softbank bought it in 2016 for $32 billion. it announced plansed for ipo last year after the deal with nvidia was scrapped. i was looking up there ken fisher op-ed in the washington post today i feel empathy for this viewpoint. a bull market is in full swing despite many in denial suckers rally since the recovery doubters of bull markets hunt boogeymen.

distractions like chinese spy balloons is all part of the pessimism of disbelief that bull markets climb. >> that's an interesting perspective. that's why you see the grind in the market >> especially when people come on and they may end up being right right. that is my point if you cite the fed and inflation and earnings, no one in the world, even people that don't follow things closely could name those three things. when it is front and center, it has to be worse than what we already know. >> is it because we have already seen the sell off or it was brought down last year and 20% drop in the s&p? >> the 10-year is off? >> the argument that the fed is going to have to stop sooner rather than later?

>> liesman says there is no such thing as a lag i still think there is a lag >> there's doesn't have to be a lag if you talk to steve schwartzman who says the consumer will run out of cash in the summer then you won't see the excess in demanded and it will turn quick. if you not know down the road if it was the lag or the consumer who ran out of gas >> probably. if the connoisumer -- it is all the labor market that can quickly turn. we get a data point on friday. >> schwartzman's point is we kept working, but nobody was allowed to go anywhere the consumers expenses collapsed, but the same income they have all of the excess savings and the money from the

government that is what they are living on. they don't care how much it costs to go somewhere or book a hotel room right now >> 610 is that good for syou? >> yeah. >> we have mccarthy in house >> speaker of the house in the house. >> you think i can get him to come on jacketless we had pence he came on. >> the big plan? >> glenn youngkin? >> i took mine off when i talked to jim jordan. a big split in my pants. >> i can't believe you went there. no back up >> nobody knew i had blue underwear on. thank god. coming up, china revealing the lowest growth target in more

than 20 years. we talk about the new economic priorities coming up over the weekend. >> i did not out you iidth yrsf.el >> d ♪ this feels so right... ♪ adt systems now feature google products like the nest cam with floodlight, with intelligent alerts when a person or familiar face is detected. sam. sophie's not here tonight. so you have a home with no worries. brought to you by adt. (vo) sail through the heart of historic cities and unforgettable scenery with viking. so you have a home with no worries. unpack once, and get closer to iconic landmarks, local life,

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eunice after years of emphasizing growth that is up 7%. let's talk about that at the end. it is up 7% or a third of what the u.s. spends on defense >> reporter: it was at the fastest pace we have seen in four ears. it does indicate the defense spending is a priority back to the economic numbers i think it is all about managing he expectations the outgoing premier set the lowest forecast in years the premier indicated that domestic demand is key, but flagged there are risks for whine that he sees or the country sees with the unregulated expansion in real estate and jobs. that was the unemployment target which was set at around 5.5% that is slightly higher than last year.

allowing for more jobs to be lost at least if they will be dealing with that, they are aware. also, today, the economic planner had flagged another concern for beijing which is debt risk from local governments. these need to be addressed immediately. the fiscal deficit to gdp ratio was reflecting that at 3%. slightly higher than last year also, they announced the quota for special government bonds which are used to fund infrastructure projects is going to be set lower. china revealed the priorities in the budget joe mentioned defense up 7.2%. higher increase in diplomacy up 12.2%. a lot of that will go to belt and road projects. not just diplomacy with the u.s. and europe, but other areas. science and technology with the rise of 2%

what is interesting this year is the special fund that was allocated more money for chips and advanced technology. that was up 50%. it all is aligned with one of the comments that came out of the work report where the premier is saying he is hoping and calling for a nation strategy for technology breakthroughs. there wasn't mention of any competition with any country like the u.s obviously that is the way it is interpret ed >> a weird quote whenever we translate things, we struggle a little bit. the increase in defense spending is to boost combat pre-pparedne and enhance military capabilities i don't know what that means for major tasks. i immediately think of taiwan.

is that a major task or is there another major task >> reporter: the tone on taiwan was somewhat muted so it wasn't seen as any significant change or anything like that from the chinese perspective. however, when they are talking about the why you want to be ready and increase your combat readiness is described as a complex security challenge o overseas there is more money poured into the defense spending one point you made about the way the nation strategy is like calling on everybody to try to make sure you do what you can for the country and have technology breakthrough. obviously, there is cross purposes going on here a lot of people here are in the private sector the private sector is feeling a

little bit disempowered. the wall street journal had a story of how the government is creating a governmental agency to centralize power to govern data which could impact multinational companies to set the rule is according to the journal to export data that they gather from operations here in china overseas you know, on the one hand you have the premiere sa-- premier saying we need technology breakthroughs. if you feel you are regulated or the communist party can make decisions about your company, it is hard for the private enterprises. >> let's talk more about china with our guest thank you. eunice yoon.

we hhave more with leyland mille talking about the beige book which will start with mark mobius comments. all ththough he cannot take mon out of the china, he says it is very, very difficult to take his money out as the chinese are they are stricti sti -- restric the flow of money out. he has to go back 20 years of records and provide the records of how he made money in china. it is almost -- they are restricting the flow of capital out of china so many other things going on, leyland. >> i think it is amusing that mobius is learning that china is a closed capital account they enforce it tighter than

they do. when they burst at the scenes with growth and right now it is the ending of the down cycle they have been worried about growth and worried about capital outflows it is harder to get your money out. that is the chinese system >> why does everything look like a pivot away from growth to maybe -- i'm pointing to taiwan. it seems like things are ramped up with different priorities the increase defense spending. nowhere near what the u.s. spends are they focused on other designs? the chinese call it paranoia driven attempts to obstruct trade and playing the china

card the latest are the cranes at all of the ports everything that goes into the defense product, they can track where it goes based on when it is offloaded at a port this is supposedly putting together intelligence on what moves through the cranes we have which is important enough to put on the cover of "the wall street journal. >> you are right about the pivot. the pivot happened a couple years ago. it was a shift off of focus on higher growth and shift away from the stimulus playbook this is the new china and priorities that xi jinping and the party have 2022 was a bad year fore growth, but 2023 will have a recovery. we will see a cyclical bounceback in the coming months. there is a pivot on growth growth is bouncing back from awful levels

the focus hasn't returned to high levels of growth. that is not what the people's congress is about. this is restructuring china going forward. it is not high levels of growth. >> does it worry you that it looks like, i don't know, what about the islands? is it all leading toward the taiwan takeover just to say it is that near term or five years out or does it ever happen >> i think you have to be prepared as a policymaker for this to happen anytime the most likely scenario is china ability with the state of the economy and recovery this pushes it off a number of years. this is a lot more likely because it has become clear to both sides that there is not going to be a reset with the new president. a decision that has been made in

the united states by both parties that they have to be careful about allowing advanced technology and intellectual property with flows into china to support the military. there is a re-thinking of china the last several years this made it more likely we wil see confrontation in the coming years. i don't see it in the next year or two, but it is more likely. >> what does it mean for all of the business interests that the united states has in china the entire world is dependent on china for growth and consumer export a lot to china and all of the multinationals have big stakes in what happens there is that going to be a problem? >> it is a problem

any type of confrontation with the united states and china would be catastrophic. apart from that, there is more contingency planning by corporations they are finally getting the message after years and years. the united states will be tougher with the policy regarding export controls and investment going forward businesses caught unaware to drift on the mentality of the last two decades will be caught in a problematic situation it doesn't mean the confrontation is imminent or has to happen, but if you don't have a plan b, you are off on a ledge. >> leland, thank you good to have you on. we may need you more thanks when we come back, controversy in japan over

proposed student loan reduction for those who have babies. details next. later, don't miss house weaker kevin mccarthy heill be live on set at 8:00 a.m. eastern time. "squawk box" will be right back. fastest reliable network. 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™. good night! hey corporate types. would you stop calling each other rock stars? you're a rock star. you are a rock star. no more calling co-workers rock stars. look, it's great that you use workday to transform your business. but it still doesn't make you a rock star. so unless you work with an actual rock star. hi, i'm ozwald.

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ubs group cut employee b bonuses 10% last year because of a drop in deal making. the ceo still received an increase. and the government considering a plan to reduce student loans for those who have children in japan.

the government has been struggling to raise the country's low birth rate one lawmakers who is considering the issue said the plan is aimed at supporting families with children and not punishing those without them he told broadcasters it is regrettable that it is viewed as with rolholding benefits for the who don't give birth >> the lowest rate on record they are talking about a population that is collapsing. fertility rate of 1.3 is below 2.1 which is required to maintain a stable population in the absence of immigration >> i would have had about ten kids if i started earlier. >> i love them

>> started too late. definitely too late now, i think. >> never for men >> i'm pretty sure it is >> tony randall. how old was he >> kirk. wait. coming up, a growing wrist with saudi arabia and uae butting heads. we talk to jeff currie next. and we celebrate women's heritage in the month of march we talk to our teammates and an contributors we have debora kafarra. >> i have been interested in achievement and getting things accomplished my parents instilled that in me with a good work ethic i think it is important to be fearless and confident one framework i used for my

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good morning welcome back to "squawk box" live from the nasdaq market site in times square. beautiful times square quiet. not a lot happening the first day of the week. checking the futures right? >> quiet >> naked people. i don't see elmo >> just wait give it time it's early >> checking the futures. quiet this morning bit of green and red nasdaq supis up.

the s&p is flat. we talk what that means for the energy markets with wti is down 1.5%. $78.46 is the last check for wti. joining us now is jeff currie. goldman sachs head of global commodities strategy jeff, thesecerserious issues with supply. i know people are calling for higher oil prices. the other side is the demand picture and what we heard from china with anticipation of 5% growth low to what we expected from china. what does that mean for energy prices and other commodities in the near term? >> i think we had already bet on 5% with no additional stimulus think about the reversal of zero covid policy has created a

growth impulse inside china. it was evident in the pmi with the factory activity highest since 2012 we are not worried about that. all of the evidence coming from china points to a stronger china. i like to say there is a macro stalemate. on one side you have a strong china. the other side is a persistent fed. between all of that is in-patient capital an as a result, commissions are low and commodities are flat to date we have not seen that in china materialize with higher oil or metal prices the market is sitting on bated breath waiting for declines. right now is the weakest period for demand seasonally. by june, you will see that evidence of tightening fundamentals to push rises higher and out of the trading

range and push up toward 90 or 95 our target is $100 a barrel. >> that is because china reopening and economic slowdown not materializing? how do all of these economic things play with the united states >> i think the economic data has been too good request -- too much of a good thing which created concerns of a persistent fed to go further longer and that puts a cap on commodities it is running 2 out of 10 in length and that means they are concerned if oil prices pop and the fed ispersistent and put a lid on it. core cpi may be benign that means you have room for oil to rally which is why once we

see the evidence of inventory draws, our estimate put in at june and this market is likely to move higher by the way, it was ip week here in london last week. we got a feel for everybody's views. the one take i had was everybody shared the same view tightening market at the end of q2 and second half of next year. the question is when does the market price it in i think the persistent fed has people unwilling to put the trade on now that is why positions is light. >> this is based onn the fed just like everything else. >> mm-hmm. last year was painful across the commodities markets in the third quarter particularly when the fed reduced liquidity out of the system in fact, i like to raise the question during that time

period what dollar asset went up? they point to steel. the key point is that is what is keeping people on the sidelines. the sidelines is the crowded trade. >> we were just looking at natural gas. down another 10% today it has collapsed is that just because we had so many expectations and biuilt up it could be a bad winter in europe and/or here and the ukraine and russia situation have we skipped the worst possible scenario? >> absolutely. weather has been more than coptcop t -- cooperative on both sides of the atlantic you lost the weather-related demand in europe, the canonservation

efforts created 15% savings in europe you combine that higher prices that we had early or late last year which created a surge in supply our view is we are bullish on both sides of the atlantic right now because we think that, one, you will see a supply response, and, two, you will consume gas over coal. a lot of people say we didn't see it last year this is going in the other direction. going from coal to gas we think that will push u.s. gas prices back into the 340 range this summer. >> jeff, i hope you are wrong. you have been right on a lot of things you called to this point. thank you. >> thanks fore having me. coming up, we talk strategy ahead of the busy week on wall street on the agenda, jobs data, congressional testimony from fed chair powell later, don't miss house speaker

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now an update on the 2024 presidential election. former president trump easily

won the straw poll at the cpac on s on saturday. he was the top candidate of 62% voting former south carolina governor nikki haley got 3% of the vote former republican governor of maryland larry hogan will not run for the white house in 2024. he wrote in the new york times he appreciated encouragement of those urging him to run, but did not desire to put his family through the campaign experience. he talked about how he is not afraid of trump. he has had cancer which is much scarier. >> he worried there will be too many people running. >> that is what republicans at the top have been worried about. if it is a wide field, that means trump gets the nomination

again. he cares more about the republican party and the afuture of the party and his future. >> we have a lot to talk about once again, we have taken an off-ramp mike pence said the republican voters will pick the right candidate. what if that turns out to be former president trump who also said if he is criminal criminally charged, he will still run. will you support the candidate >> before they let you on the stage. >> would trump support desantis? >> he probably would say he

would. what if they don't let him on for the debates? >> you know what nothing would surprise me. >> you and a lot of people. when we come back, china setting the lowest growth target in decades stephanie link is still looking to invest in stocks with chinese exposure she joins us next to explain. and you can watch or listen to us live any time on the cnbc app.

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china setting its lowest gdp target in more than a quarter century, but despite the conservative economic outlook and mounting geopolitical

tensions our next guest remains bullish on stocks that even have china exposure joining us now stephanie link, a cnbc contributor >> good morning. >> the general news cycle sometimes you wait around for stuff to happen. i mean, right now i got like ten things that we could talk about in business news, just ready made for us. every month we get the jobs number every month we get inflation readings, and you know, jay powell, every week those guys and gals are saying something, but it's big, you know, two-day testimony. so there's all these things happening, but with that b backdrop, both mike wilson short-term and ken fisher long-term says we're in a bull market do you feel any better about things i mean, if we had a little softer labor picture, do you think we're the p word can i start using it again, pivot? >> no, i don't think the fed is going to pivot anytime soon, and

that's because if you look across the board at inflation, if you want to look at cpi, you want to look at ppi, core pce, unit labor costs, services ex-housing all across the board are still very high and so i think that the fed has the green light to continue to be aggressive on rates and maybe just keeping rates higher for longer because their dual mandate is jobs and inflation. they got to get inflation down they can do that because jobs and the market is so very tight. >> that doesn't mean that you're selling all your stocks, though. >> no, because i do think that there are pockets of the economy that have actually held in remarkably well, and that's the services side of the economy i mean, last week we got the ism number that was much higher than expected and new orders were up 62.6%. so the numbers underneath the surface, on the services side are still quite strong that's a big part of the economy. we talk about it all the time,

service is about 70% of u.s. consumption. we're rooting for services, we're rooting for the consumer i think the consumer is in a little bit better shape. it's not perfect by any means. that's the area of the economy where i want to look for opportunities. >> you still -- you're not necessarily going to sell stocks with china exposure. what do you own that -- where that matters? >> look, i mean, i think that there are opportunities in china. it wasn't too long ago that the imf was expecting 3% gdp growth for the year in china. now all of a sudden they raised about a month ago, they raised that number, the gdp number in china to be 5.2% we know what happened over the weekend, targeting the same. so 5% is pretty darn good, especially up from 3% last year, and so whether this is a secular bull market in china or not or on their economy or not, i don't think maybe that's the case. it's really more it's a cyclical

opportunity, and so you want to have exposure. and i want to own u.s. multinational companies with chinese exposure because i really do think, you know, you get the transparency from the u.s. companies versus china pure plays. so nike i own the story with nike is getting their inventories down it was 43% growth last quarter in inventories if there's one theme within retailers that we've learned over the last couple of weeks is that inventories are coming down across the spectrum, across many different kinds of retailers i expect with nike the same will happen then of course it's the big transition to dtc, direct to consumer, which actually grew 35% last quarter, and it's now 27% of total sales why does that matter it's growing faster than wholesale wholesale and also the margins are much greater a couple of the other companies in china i have exposure to is estee lauder you have starbucks which is a

special situation story with the management change, about 9% exposure win resorts, exposure in macao gaming is up 55% year-over-year year-to-date i think there are a lot of ways you can play the theme these are blue chip quality companies with good free cash flow. >> it might be a moot point but ken fisher says we're already in another bull, and no one believes it and that's good. are we in another bull >> i don't know. i mean, i think it's a little too early to tell. i think we have to get through the fed, and we have to get through what all these rate hikes mean for the economy and we know is there a lag effect? i know steve liesman is saying maybe it's not maybe we're feeling it realtime. we're certainly feeling higher rates in the housing and the manufacturing sector, but as i mentioned on the services side, that's the bright spot look, there's pockets here to get excited about.

i'm always looking for tu opportunities. i think it's probably a little premature to say it is starting a bull marketment again, like i said, i'm fully invested and i feel good about the long-term. let's get through 2023 and i think 2024 is going to be a lot better. >> are earnings projections where they should be for the rest of the year >> well, i actually think that earnings are going to hold in better than expected i know when you and i talked about this last week that if you exclude technology and com services, which i know is a big exclusion, earnings are up about 4% instead of the down 4% as expected, that is actually printed. so i think there are places where earnings are actually growing quite substantially. hey, look at broadcom, last week, that's a company i own their total revenues grew 53%, their semiconductor revenues which is 80% of their business

actually grew 21%. that's real growth, joe. they have margin expansion and free cash flow strength, and that sort of thing within the land scape of earnings while the headline looks ugly, there are pockets in places to get excited. >> all right, we're going to leave it there what's weekly? we see you -- we see at least weekly, i think, so we either see you later this week or next week. >> weekly. >> sounds good. >> i get confused too. biweekly want one of them's every two we weeks. >> semiannual is that or biannual. >> skpaktly. >> exactly. >> i don't know the answer. >> the ceo of occidental petroleum vickih o', will lub will join us live. and at 8:00 a.m., don't miss our interview with kevin mccarthy he'll join us right here on the

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good morning, it is a week filled with economic data and

fed speak. futures are little changed over the open it's the premier energy conference that kicks off in houston. we will be hearing from the ceo of occidental petroleum. and a number of close calls raising questions about the safety of the nation's aviation system, now an faa safety review team is getting ready for an emergency meeting. we have that story and more as the second hour of "squawk box" begins right now good morning, and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen, along with becky quick. andrew is off somewhere, building his career, expanding his horizons. >> he's on assignment this week. >> he's on assignment, he's not screwing around. >> no, he's not.

he's working. >> which he does a lot. >> yes >> yeah, on this inexorable career path, climb. >> he works hard >> yeah, he does. >> if you get up at 3:30 you work hard. i'm working this afternoon too, okay just so you know. >> really? >> yeah, yeah, i am. i see you looking at me like that u.s. equity futures at this hour indicated down about 42 points nasdaq down more than three points and i work every day, afternoon, studying, trying to figure out stuff charting >> yes >> you know, trying to finish better call saul treasuries. >> wait, that's here >> yeah, right treasuries at this hour, you can see 392 on the ten-year. a consequential week on tap for markets with two days of testimony from fed chair jay powell, and a jobs report, senior economic reporter steve

liesman joins us now with a preview. i guess life just comes at you pretty fast ferris buehler, but again, more testimony. >> more testimony, more data, joe. it doesn't stop. and here's the thing, powell is sitting for two days of testimony, and he's going to have to tell congress that a year into what has become the most aggressive rate hike cycle in a generation, the fed still isn't confidently on the road back to its 2% inflation target. he's probably likely to suggest the possibility of rates higher than the prior consensus of the fed from the summary of economic projections of 5.13. he's going to suggest rates will remain at this peak level for some time, indicates some but of course not sufficient progress the big jump for powell, the economy not cooling and inflation showing its target anytime soon rubeela farooki writing apart

are if from a slump, monetary policy has not yet had the desired effect on prices, the labor market or the economy. there's not much the fed can do to slow down what is the troublesome sector of service inflation because it's driven by higher wages, job growth, and pent up demand, and a lot of that is for travel she's growing -- she has growing concerns the fed is going to cause a recession here by leaning hard against the economy. powell can be expected to at least affirm the market's new more hawkish outlook on the fed. it sees a terminal rate of 5.44, 5.45 by october. it could to more to lean into hope for easing this year. more easing is built in next year he's going to be a little careful, keep options open in case that jobs report shows some signs of loosening wall street forecasters look for a strong payroll growth at 2.25.

unemployment at a 53-year low of 3.4% i've talked to a bunch of guys they don't see a big revision. it's hard to count on. they're not seeing a big revision to that 5.17 for january. >> okay. steve, i use the p word again, hope springs eternal we could get a better idea -- >> he means e ppivot, steve. >> or powell. >> thanks, becky. >> you're welcome. >> you were nervous? you get a better -- you know, that's not my problem. if you go somewhere else -- if you don't come up with pivot right away, then you're not -- we're not on the same -- >> it took me a second what >> depending on -- >> i can always lean on becky. >> and then we've got inflation next week, that figures, but you know, it could start -- i know we've mentioned you a lot about lags, but you don't believe lags don't -- you've said that you question that -- sort of that

assumption that there aren't lags anymore and there are lags. >> actually, joe, it wasn't me it was bullard who was talking about there being no lags. i'm interested, joe, in this idea of what happens when all these companies that during the pandemic and low rates ended up ultimately refinancing, and when i look at the rollover of that debt, it happens more in '24 and '25. that's a way, joe, that a lot of the companies who we cover are immune from the increase in interest rates i hope to have a report on the other side of the powell's testimony, i'm working on the data right now with howard, and how much extra interest costs there is in the economy, and it's not a lot right now so you saw some junk bond companies come in. there's a story in the journal this morning, came in in january

when rates were a little softer, and now they're going to have to sit there. joe, we don't know there's going to be some rollover risk that you have to watch. i know when you interview ceos and cfos, we have to start -- we are asking the question, how much is interest rate -- the interest rates increased for you and your business and what does it mean. it could mean a decline in business spending. it could mean a decline in hiring as companies try to protect their margins. >> right okay steve, thank you so you saw a look of terror on his face >> i saw a look of confusion >> well, that's nothing new typically. >> no, no, no, i knew exactly what it was. i did a double take when you said it the first time. >> pivot, pivot, pivot, we all talk about pivot that's the only p word for anyone in this business right now is pivot, pivot, pivot, pivot. >> okay. let's pivot to china right now we want to take a look at china's economic picture and how geopolitical and other concerns are impacting markets and investors.

for that we want to bring in rockefeller international chairman rashir sharma p who is the founder and ceo of breakout capital. let's talk a little bit about what happened with china we came out with their -- or their expectations for growth for china this year. they said near 5%, not more than 5% as people had been anticipating how significant of a change is that >> i think it's a bit of realism setting in as far as china is concerned because the economy has been growing at a breakneck speed for much of the last 40 years, but if you look at the various drivers of growth in china, it's now shrinking population, low productivity, and the fact that it's facing much stiffer competition on the export front with the u.s. leading the charge in terms of restrictions and other sanctions. i think the chinese economy on a long-term basis will be lucky to grow at half that pace of 2.5%

i think 5% for this year is maybe okay because they rebounded from a low base. but even last year they grew at 3%, and that 3% number seemed way exaggerated if you looked at the high frequency data out of china. so i think that these numbers are a bit pointless, and especially because they were announced by the outgoing administration there there's a big change happening there this year, but the long-term picture is this, that the chinese economy given the demographics and the deg deglobalization headwinds that it's facing, i think it will be lucky to grow at 2.5%. >> what's long-term? what do you mean, over the next ten years? >> exactly over the next ten years. as i even wrote last year in my column for the ft that i think that the chinese economy doesn't take over from the u.s. economy, possibly ever. but even if it grows at 2.5%, begin the exchange rate, i don't

think in our lifetime the chinese economy ever overtaking the u.s. economy 2.5% for this decade is my best guess is china's annual growth rate. >> maybe the more surprising thing is they are now planning additional stimulus. they're looking at close to 5%, and that's okay with them. they're not planning to juice it any way by putting additional money into the economy. >> i think because they've learned their lesson they juiced the economy a lot after the global financial crisis in 2008, 2009 it led to a msz aive assive han. they had a huge property boom, they h they had massive speculation, and they see the u.s. and other countries have done massive stimulus and the inflation problem it's led to. they're wise to learn from that lesson from their past and the international experience that overstimulating the economy

doesn't really pay off the last thing they want at this point in time is an inflation problem. i think it's wise on their part not to try and overstimulate and feed into this wall street sell side, more stimulus and targeting a growth rate of more than 5%. i think this dose of realism is welcome from them. >> let me ask you about some other headlines. mark mobias kind of kicked up some concern when he said that he hasn't been able to get money out of china, that it's gotten much more complicated. he said they didn't say no, but i guess he has an hsbc krunt where he was trying to sake some money out and they want a lot of forms about how he's made that money over the years are they starting to clamp down on foreign investments in china? >> i'd be really surprised if they're doing that i've had no direct experience of that, even as an investor out there that they are doing any of that we keep hearing the random anecdotal instances about them

slowing it down, but i really had no such experience, so i'm not quite sure what's going on, and it's still a very large equity market with lots of foreign investors. so you would be hearing that from many people if it was really happening maybe it's happened in a couple of isolated cases. if that was really happening, that's a huge story, and you'd hear that from many people, and i haven't, and i personally haven't experienced it yeah, china's capital account is heavily restricted by the residents have been taking money out of china they have been setting up family offices everywhere from singapore to dubai they may try and slow that down. but there's been no real big pressure on the exchange rate either so i'd be a bit surprised if they goi to that extent. to do that they're killing off a major source of growth for them. remember, they need the foreign markets. the property developers have been very reliant on the foreign credit markets for financing themselves so if they're going to start

choking that channel off, that's a serious concern. i think i've not seen at least or even heard of from anyone else about such concerns. >> sure, where the heck are you? i am fascinated by the view out your window. i've been staring at it the whole time it's very pretty. >> i'm currently in miami, the hottest global city in the country. in fact, that's the really fascinating thing here how much of the energy around the world is moving to new centers. that's something which i'm writing next on. miami is where i am currently. >> okay. maybe i am faked out it looks a lot brighter there than i thought it was. >> ruchir, thank you, it's good to see you we'll talk to you soon. before we head to break, our reporter gail is now official, altria is buying njoy holdings for $2.75 billion in cash. the deal includes an additional $500 million in cash payments if the fda authorizes several of

njoy's menthol flavored products and m coming up, bitcoin recovering this year after tumbling more than 2022. we're going to talk about what's ahead for digital currency "squawk box" will be right back sfwlouns this cnbc program is sponsored by truist health, where meaningful relationships matter most. this cnbc program id by truist health, where meaningful relationships matter most sponsored by truist health, where meaningful relationships matter most. inner voice: (kothis cnbc d by truist health, where meaningful relationships matter most >this cnbc program is spons by truist health, where meaningful relationships matter most >this cnbc program is sponse by truist health, where meaningful relationships matter most >this cnbc program is sponsored by truist health, where meaningful relationships matter most. this cnbc program sponsored by truist health, where meaningful relationships matter most. he “stressed” boss. inner voice (furniture maker): i know everything about my new furniture business. well, everything except... ...the whole “business” part. not anymore. with quickbooks,

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the recent crackdowns by the s.e.c. on cryptocurrency raising concerns about the future of the industry in the u.s. our next guest argues that clear rules and regulation would be the best way to protect investors. joining us now, emily parker, coin desk executive director of global content you know, it's like a -- i don't know, a tolstoy novel. where are we right now what's taking so long? what do you want to -- who do you expect to take the reins eventually, emily, to get some decent regulation in this area >> well, i think part of the problem is that it's a little bit unclear who's exactly in charge here. so there's been a lot of recent

movements by the s.e.c it seems like every day there's n news of a new s.e.c. crackdown on crypto. the problem is that the u.s. doesn't really have like one federal regulator for crypto exchanges. a lot of this is done on the state by state basis the problem with the u.s. isn't so much that regulation isn't too strict regulation is too confusing. what we're having right now is basically we're seeing all these sort of like ad hoc regulation by enforcement actions it threatens to send crypto businesses overseas. >> who do you expect eventually to be, you know, watching what's happening? do you think congress is eventually going to do -- the cftc, the s.e.c., what's the best outcome for the industry? >> well, i think it seems like congress is probably going to have to play a role here in establishing who regulates what. i don't think this is something the s.e.c. can do on their own clearly we are seeing a lot of

talk already in congress about crypto most of it is just sort of reacting and it's kind of negative, and it's like, you know, we need to do something, but it's unclear what exactly is going to be done there's some basic things that could happen out of washington there's been talk about rules. the u.s. still doesn't really have a clear road map for that so yeah, i think it's going -- congress is going to have to play a stronger role in establishing sort of just some rules of the road for crypto, which we don't really have right now. >> how important would it be to have a spot etf for something like bitcoin is that ever going to happen what's the time line for that at this point what needs to be done for that to actually happen what would chair gensler need, do you think >> well, i mean, it's hard to say but right now the sentiment about crypto is so negative in washington that i don't see that happening in the immediate future crypto advocates have been

advocating for this for a while saying this is a safer way to sort of like regulate crypto and bitcoin. given the sentiment in washington and the fear and this feeling that crypto is something dangerous and something to protect americans from, it doesn't seem like the prospects for that are great at the current time there's an argument to be made that that's a way to get crypto within more of a regulatory framework and to make a safer way for american investors to invest in trading. i don't see that happening immediately. >> did the ground hog see its shadow is winter over six more weeks, six more months of winter? are we in the spring where do you think we are? will there be new lows, intermediate term lows in bit and ethereum and others? >> well, wun thing i will say about abcrypto, it has the endls

capacity to surprise right now we're in the banking crisis, right? so there's a loss of trust in crypto banks that's obviously not good. but one thing i will say, if you look over the past few weeks and you look at some of the regulatory actions of the united states, some of the stuff the s.e.c. is doing. there were moments where you felt like there was this regulatory action happening almost every day it wasn't really affecting bitcoin's price. i think that's an important lesson here that whatever the u.s. does, cryptocurrency is very much a global phenomenon. so even if the s.e.c. were to continue cracking down on cryptocurrency and cryptocurrency changes, like crypto can still live outside of the u.s. that's what we're seeing i don't see it ending anytime soon, andi don't see the momentum completely dying anytime soon, but i wouldn't -- i wouldn't say that we won't see some short-term negative surprises in the near future there has been a contagion effect and like i said, these sort of companies and these

projects imploding sometimes seems to come out of nowhere, and we could see that hamg in the future. >> and macro factors and the fed and the whipsaw, the rationale for owning a bitcoin, obviously. we need -- pivot would help there too emily, thank you. still to come this morning, airline close calls on the rise, the faa planning an emergency meeting this month after several near misses. these are near misses with big commercial airlines too. we've got more on this story coming next. and then we are kicking off our coverage of the world's premier energy event with the ato of occidental petroleum. th interview and much more still to come. "squawk box" will be right back. you'll always remember buying your first car.

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when covid hit, we had some challenges. i heard about the payroll tax refund that allowed us to keep the people that have been here taking care of us. learn more at getrefunds.com. u.s. aviation regulators are getting ready to hold an emergency safety summit and ordering a review of industry data following a number of recent near crashes that are raising questions about the country's aviation system. phil lebeau joins us right now with more on this. phil, i have to say reading some of the early reports kind of shocked me as somebody who travels, i'd like to know more too.

>> i think everybody would, becky. you're looking at a system right now where we have dramatically increased the number of flights compared to two or three years ago, and as a result you have a number of new people working in the system, whether pilots, whether air traffic control, whether ramp workers you've got a lot of people who have moved into new jobs, you add that along with the congestion and what you have is a situation where we've seen a number of rather high profile runway incursions or close calls, and that's why the faa is holding a safety summit. next week there will be representatives from airlines, airport, regulators, pilot unions runway incursions basically where you have a couple of commercial airlines that maybe came close to hitting each other, maybe have clipped a wing in some places, or near miss incidents. one of the most notable happened in us a ten, and this is animation that was put together by the office of senator ted cruz again, this is animation this is not the actual incident

that took place but this gives you a sense of what was likely to happen if the pilot of the fedex, which was the airline -- airplane in the air there in this animation, the pilots when they came out of very foggy conditions saw that they would have been landing on top of southwest aircraft, they immediately pulled up while the southwest plane hit the brakes that's an example of the type of near miss that investigators as well as those who were in the industry are saying, look, we have got to figure out what exactly is going on. that's why acting administrate billy nolen has said let's have a summit we'll talk about what the issues are and what some possible solutions are. we know that this industry does not move quickly when it comes to solutions as you take a look at the airline index, keep in mind that the number of u.s. commercial airplane departures is approaching 2019 levels, but we're not there yet. we have an industry that is up gauging using larger aircraft.

we're not seeing more departtures. i what we are seeing is an increase in the number of people who are flying because of the demand out there, as you take a look at the major airline stocks more people are flying now than pre-pandemic, not by a lot but a little bit more. that's because you have larger aircraft and the airlines, as much as they can, are adding to their schedules because they want to take advantage of the number of people who fly, guys. >> your point about the number of new people and experienced people who are in the system all over the place is a really good one. there's been talk some of the airlines saying that they want to lower the requirements for experience for pilots. will this bring at least some of that talk to an end? >> i'm not sure, becky, because what you have is an industry that is saying, look, we have people -- we had a whole bunch of pilot and others who -- gone. they're not coming back, like every other industry, they retired. they took buyouts, we've done

this story a number of times they're gone you have new people who are coming in, and the requirements for a commercial airline pilot, 1,500 hours, i don't think that's going to change anytime soon, but you have a number of people who are saying just because there are rules about how often a pilot can fly, how many hours a day, the airlines are trying obviously to make the most use of their resources. some are saying should the pilots have lower work hours, should they be able to be flying up to ten hours a day if it's a two-person crew? or should it just be eight hours a day if it's a single person crew all of these things will be discussed at the safety summit. >> i know that at least in the incident that you just showed, the animation from that incident in austin, a similar one in boston that just happened a week ago that those were things where air traffic control had told the pilots something that was wrong. i don't know if that's a problem -- you know, human error

situation. >> that's human error. >> or is that a problem with air traffic control systems. i've heard complaints for a decade about how outdated the air traffic control systems are right. we had oscar munoz on last week if he had anything he could spend infrastructure money on, it would be improving air traffic control systems. >> you're 100% right, becky, but there is -- you want to know what the main problem is, fix it in washington, and you won't see it fixed anytime soon because nobody wants to give up their piece of the pie nobody wants to give up their oversight. good example of this, the fa args auta authorization in terms of money being spent. they have to go to congress every year and say please may we have this amount of money because we want to spend it. you wouldn't run a business that way. the flip side of that, becky, is that you have people in congress and up voters who sate it thered

say you don't just give anybody money to run an organization, we want to make sure it's spent efficiently. that's at the heart of the problem about bringing new technology in whether it's air traffic control or other areas. >> the flip side of that, we talked to michael boyd or someone recently, who said, look, the flip side of that is you don't want a politician running the faa. you need someone who understands this business and gets that too. keep flipping the coin there's a lot of sides on it. >> yep >> phil, they're playing us out, but i have a feeling we're going to talk a lot more about this. thank you. >> we will be. you bet. >> all right, still to come, the ceo of occidental petroleum joins us next live from sarah week, and later don't miss our interview with house sakpeer kevin mccarthy, coming up in the 8:00 a.m. hour stay tuned, you're watching "squawk box" and this is cnbc.

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welcome back to "squawk box," i'm dominic chu, we'll start with shares of tesla this morning, which have been moving between fwans and losses premarket. 800,000 shares of trading volume tesla is cutting prices on its two most expensive and premium models, the electric vehicle giant is discounting its model s

sedan by 5% and its model x suv by up to 10% tesla's ceo elon musk has said previous price cuts have helped drive demand for some of its vehicles those shares down about 1/10 of 1%, $197.60 premarket. sticking with the auto theme, let's check on shares of ferrari. the high end sports carmaker up fractionally, premarket around 26,000 shares. it's getting some positive chatter this morning, thanks to analysts at morgan stanley led by adam jonas. they're bumping up the target price to $310 from 280 they cited ferrari's ability to best weather an economic uncertain environment, and its longer term opportunities in electric vehicles. those shares up 1/4 of 1%. morgan stanley this time on media, netflix and comcast, which is the parent company of this network, cnbc, netflix is just down about 2/10 of 1%, little trading in comcast right now. both are being called top picks

in the industry with the expectation that we have not yet hit a market bottom. for netflix, they like its position as a market leader in highly competitive streaming markets along with significant free cash flow generation potential if revenue growth accelerates, and for comcast, they like what's expected to be a better average revenue per growth user and then better performance from theme parks thanks to a still healthy consumer becky, media in focus and so are evs. >> thank you very much. joining us right now on set to talk more about the markets and what he sees is jason trener, he is the chairman and ceo of strageus research partners, which is a baird company. we were just talking, you hear so many conflicting viewpoints, it's pretty confusing out there at this point. what do you hear >> been running around since the start of the year. this year in particular has been frustrating for bulls and bears,

both value and growth. one of the things that we're hearing more of is this idea of a no landing scenario. which i have to say personally makes me a little bit more worried that, you know, the idea that maybe the fed could just so completely stick the landing that they could bring inflation down without having a recession. the reason why that worries me is that in the absence of qe, i think you're going to have a real business cycle. which is a fancy way of saying inevitably you're going to have a recession at some point, and the longer it takes to get to that recession the harder it's going to be. >> getting back to a business cycle is a good thing. we've been in this crazy inflationary period for over a decade. >> my own opinion, quantitative easing for 13 years was a massive power error, that created a lot mal investment, bad behaviors among policymakers, particularly politicians to spend money they

didn't have. it's good to get back to a real business cycle the bad thing about it is there will be an adjustment particularly as it relates to the stock market if we haven't had a recession in a real way since 2008, 2009. the recession we had associated with the pandemic lasted only two months the bear market -- >> the recession 2008 didn't feel like a normal recession to me either. let's pray we don't get one of those again. >> that's true i would say the health of the banking system is much better than it was in 2008, 2009, wu i'm just saying, had kind of a no, ma'a normal business cycle in a long time there's a lot of readjustments that need to be made, a lot of profitless companies the u.s. government is funding itself at absurdly low levels of interest >> what'd i iszmiss >> a lot >> don't say this, i think you're going to say what i would say next is you were the first

person -- tina, you're the first i ever remember saying it. i don't know if you kind it. >> i think i did it was originally a margaret thatcher thing, i didn't coin the phrase. >> you were the same memory i do, he was the first one. >> one of the first. but then i have other people, on a "seinfeld" or larry david they said they made up cobb salad something about roach motel, and we used that, and he said he made -- >> i think bobby valentine said he invented the wrap i don't know if you know that. he claims -- there's a lot of people who are like -- >> are we in a new bull market >> i don't think so. >> not yet >> i don't think so. i really don't think so, joe two things that are happening, one is that earnings revisions are coming down pretty t dramatically for this year they're not coming down for next year i would say the chances of a recession are significantly higher long-term interest rates have gone up alot i don't think they're going to come down anytime soon because we were talking about it, in the

absence of qe, the interest expense for the federal government is going to skyrocket over the next couple of years, which is going to mean more issuance, higher interest rates, i think that's going to be a significant adjustment. >> how much worse does everything have to get to preclude being in a bull market? that's what i'm saying you know we know all these things you just said. >> true. >> you know how markets work over time. so things are going to have to be worse than we think does that mean a deeper recession, higher rates? more stubborn inflation than we're anticipating >> i think so, and i think -- listen, the fed is very focused on the phillips curve which is a fancy way of saying it's focused on the labor market as an input to their inflation forecast, and i would argue it's very hard for the fed to stop tightening or at least to start easing when the unemployment rate is 3.5%. there's -- and claims are below 200,000. that's the problem with the no landing, more and more our clients are saying, well, maybe

there's a no landing maybe we just totally stick the landing and inflation comes down and the economy booms. i just -- i've never seen a period where the fed increased rates by this much and you didn't have a recession. >> we got to run do you like tiara or tap pas now? >> i don't even know what -- >> there are plenty of alternatives there are realistic alternatives. >> i would say cash is an alternative. >> you don't like any. >> come back when you -- >> i'll make one up. when we return, a special interview from the premier energy conference in the world, brian sullivan is there, and he's got a preview of what is next brian, good to see you. >> hey, good to see you, becky, as well. good mod morning sara week coverage coming in hot after a break, an interview with the number one best performing

stock in the s 5&p00 last year, can you name it is this we can and will after this.

welcome back to "squawk box. we're here at the ceraweek conference in houston. the number one performing stock in the s&p that is occidental petroleum. vi vicki hollub our first guest of the conference congratulations by the way. >> thank you. >> after a roller coaster couple of years before that, are you

guaranteeing you will be the number one performing stock in the s&p this year? >> i certainly hope so i can tell you our teams are doing an incredible job with the assets we have the best quality assets we've ever had and the best portfolio, assets. teams are executing incredibly well. >> very different vibe this year because i think without diving into the deep politics of it, obviously i think it's fair to say we've gotten a strategy shift from 1600 pennsylvania avenue where they're encouraging, pushing, nudging you guys to use your money to produce more oils. now, we want more oil. you guys are growing, i think, 12% output not bad, but not doubling or anything d do you have the ability to produce more oil >> we do, wu but we have a vale proposition that includes an active share buyback program, and also a growing dividend, and we always want to make sure that we maximize our return on

capital employed we're very careful with how we structure our capital programs on an annual basis to ensure we industrial still have sufficient cash to buy back shares. >> why not use more of that money to drill more wells, to pump more oil to theoretically bring down prices. >> i think prices are in a good place right now. if you're in the 75 to $80 range for oil prices, that's a sustainable price scenario for the industry to continue to be healthy, and i think gas prices at the pump are not so bad at this price so i think it's optimal. >> around houston, driving around yesterday, they've come down a lot do you see -- do you think that 75, 85 oil is kind of where we're going to live for the next few years? in a year or so, next year we do this again, i hope, will oil prices be higher, lower, or about the same >> i do believe that the mid cycle price of oil is close to $80. maybe 75 to 80

i do believe that mid cycle price used to be 60, but now it's different because the world has globalized i think that in that price regime, i think we can balance the supply with demand over time i do think that toward the end of this year, we'll have a little bit of a supply issue versus what demand i expect will be by the end of the year. >> sounds like that could send prices higher? >> it could. >> what about filling the spr, is that thing that's going to move prices >> i think in time the administration will buy that storage back, we'll start to refill it's going to be hard to do it anytime in the next couple of years, though, because i do believe -- >> couple years? >> i do believe we're in a scenario where prices will be higher because of the lack of supply, the lack of investment in our industry over the years, you've heard about that, and you know all about that. i do think there's going to be -- they'll have a difficult time here in the near --

>> they want to buy 67 to 72, mid-cycle 75, maybe a little bit up, they're going to have to change that. here's the other question, we're going to talk to exxon tomorrow and others who have bigger refinery presence. let's say occidental decided to produce a bunch more hour. you know what? let's do it. does america have the refining capacity to even produce more gasoline we don't actually care about oil, we care about the finished product. >> that's right. we still don't have any more capacity than what we had in pre-pandemic times so we're still limited in terms of our capacity to 18 to 19 million barrels a day. we can import and export we can balance the kind of oil that the refineries here in the united states need with -- by importing some of the heavier oil and exporting some of our lighter oil. we can provide the blend, but in terms of more refining capacity, i think that there will be some expansions, but there is likely

not to be new refineries being built. >> the biggest, it was mind blowing to me when i learned the newest large refinery in america meaning 100,000 barrels a day is 1977, it makes me feel young, which i appreciate by the way, speaking of young, there's this up and comer, becky quick knows this guy, his name's warren buffett, he's in omaha. he's got a huge investment in occidental preferred equity. when you and warren buffett talk, when was the last time you z spoke and what do you guys talk about? how much is business. >> i saw him just a few days ago. we talk about the oil and gas industry we talk about technology he has a very -- you know, big curiosity about the technology of the industry, the sub surface. he likes to talk about technical things he's very much aware of where

our industry's been, where we're going, and i have a lot of fun talking to him about the nuances of what drives success in our industry, and what really drives success and differentiates companies is, first of all, the quality of the to not only understand the subsurface better, to model it and design better frags but to drill more efficiently we get a chance to talk about a lot of that with warren buffett. >> good. i'd love to be a fly on the wall in the conversation. vicki hollub, thanks for joining us

>> thank you i'd like to be fly on that wall, too. also, you can catch brian's new show it premieres on wednesday night. it's called cnbc's last call it's going to be exploring the culture of money, culture and policy "squawk box" will be right back.

weekly new home listings,

hit a new low at 49,363. that's off the one-year-ago levels down from 77,000 back in 2015 our next guest says we're in a standoff housing market as interest rates continue to rise. joining us is the lead analyst for housing wire and, logan, this seems like it's really a supply issue but also the people who do have houses don't want to trade and wind up with a much higher mortgage interest rate. >> yes, that is true. new listings data has been slowly moving down, down the last ten years now with the biggest housing inflation hit we've ever seen, you put home prices and mortgage rates together, a lot of homeowners are just in a very good position right now and might not be the best time for them to even list, to sell or buy another home we do have new listings every single week and it's just not what it used to be in the

previous expansion >> i mean, it's well below the demand levels. people are looking for new houses to get into and it's happening a the -- at a time that the builders have pulled back, too, due to concerns of capital out and whether you'd able to get people in at high are interest rates >> we have 68,000 houses for sales for over 300 million usually we get the weekly inventory to bottom out in january and we have this seasonal rise in spring. that's created these bidding wars in certain parts of the u.s., they simply don't have enough homes that's an unfortunate reality of the world we live in a traditional seller when they list, they're mostly going to

buy another home wherever the rates are 6, 7, 4, 3%, they feel okay we just have had a long-term downtrend on this. i think people live in their homes longer and longer and with mortgage rates rising so much and the total cost of housing rising so much, financially it didn't make sense. the federal reserve wants more pain so total housing costs you have as a citizen right now, it's pretty good, a compelling reason to stay in your house. >> if this is a standoff, how does the standoff end? >> eventually over time, days on market is growing. last year at this time we were seeing bidding wars accelerate now that the days on market is over 30 days, over time more listings will come through weakness and demand and accumulation, more supply is the best way to fight inflation, so there will be more choices for people or eventually mortgage rates fall and then you get back into the same kind of

marketplace we have where we simply have too many people chasing too few homes. it's a standoff. it's not just a standoff between buyers and sellers, it's a standoff between the economy right now. the housing market really revolves around what the ten-year yield is doing. we get the ten-year yield near 10%, we get stabilization near 4% that's not the story the demand is not strong enough. >> logan, thank you. coming up, speaker of the house kevin mccarthy joins us in our house right here in the nasdaq studio. as we head to break, here's a quick check on the futures, which they've improved a little. they were in the red, now they're mixed. only the dow is now wndo nasdaq up almost 20. "squawk box" will be right back. . i know some consultants with great ideas. can they help us improve our digital experience? absolutely. they've invested over $2 billion in tech.

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the final hour of "squawk box" begins right now . good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site. we're watching u.s. equity futures. right now it's a mixed picture but relatively flat. s&p indicated by about 2 this comes after both the s&p and the dow broke their losing streaks last week with a strong week good things to come from that. if you're watching treasury yields, you're going to see the ten year back below 4% the last we checked and back at 3.903%. the two year is at 4.82% some of the stories investors will be talking today include china as leaders signaling a

caution around the world's second largest economy as it emermgs from the pandemic. beijing announced a 2023 gdp growth market at around 5%, below last year's at 5.5%. tesla out with another round of price cuts the ev company cutting the cost of certain model s and x varieties by somewhere between 4 and 9% this is the fifth time this year tesla has tweaked its prices elon musk said recent price cuts have buoyed demand. >> and arm owner soft bank has chosen golden sacks, jpmorgan, barclays to lead the deal. >> president biden expected to unveil his budget blueprint this

week joining us now, speaker of the house kevin mccarthy governor youngkin. i was in your house i think it was a month ago. >> it was a month ago. february 7th >> you're in our house now thank you for doing that but you were sworn in january 7th. >> yes >> we're doing this monthly to check on the profits >> i hope you're more optimistic why even do the job? >> that's where i'm going to go with this right now. it was wall street journal opinion piece of a couple of days ago, behind the scenes you've done a lot to get the focus back on productive legislation in a bipartisan way, even approaching leader -- >> jefferies >> hakeem. >> and say -- it was funny the way you said it -- i'm going to treat you the way i wish i had

been treated when i was minority leader >> look, even the night i got elected i said to hakeem, the first thing i said to him was be afraid because two years ago i had every member of my conference vote for me, too. i said look, we're going to debate a lot of issues and be feverish in our debate but i'm never going to attack you personally there are so many things we do that doesn't need to be partisan, the running of the house, the respect that you have for one another. i think it goes further. when we were setting up a lot of these different committees, i created a whole new item, a select committee on china. i showed him who i was putting on from my side of the aisle even before i showed my own conference so he understood what i was trying to achieve with this. we would go to the scif together because he's now part of the gang of eight. he would know the same thing i

would know so he understood what i was doing with the intel committee and i had us both go together and speak with them it shouldn't be a partisan committee, it shouldn't be an impeachment committee. this is a place you learn secrets and a place you should be making investments to keep this country safe and it shouldn't be a partisan place. i'm actually sending the intel committee to mit, to get the briefing on a.i. and quantum whoever captures that first has an advantage that's are the things we should be focused on. >> reading this piece it says that you're determined to bridge the gap between the two sides and the house -- i just thought you maeant in the republican party. >> anybody can win speaker in the first round. >> you're right. i wasn't negative. i was just trying to tell you -- >> look what we've done legislatively. on the president's desk, esg, we

passed that bipartisan d.c. crime i know it's about d.c. but it's about crime. it's a national issue we said we would do something about in the commitment to america and the president just changed his opinion -- >> i was going to say, he's going along with you, right? >> wasn't in the beginning. >> we're gearing up for an election where nobody likes to look like they're soft on crime. and d.c.'s city council, they decriminalized everything. the day of the vote, a congresswoman was mugged in her elevator i mean, it's unbelievable what they've been doing >> keep going. you had some other things you told me about, other bipartisan things >> there's something we're going to do that hasn't been done. we've got a lot of challenges out there but i think the three greatest threats to america long term is our debt, our education system and china and so this week we're going to hold a bipartisan meeting in the auditorium we usually only do this for

classified briefings and it's going to be on the budget and we're going to bring in the congressional budget office. they just came out with new numbers. we're going to hold a briefing it is dire the position that we are today. we're spending more for gdp than we ever have and we've got more money coming in percentage to g gdp. we're getting it now but we're spending so much if you look at the new numbers, in the next ten years, we'll spent 10.5 trillion just on interest >> i got the over on that. no, i got the over it's going to be a lot more than that >> but since 1940 to today, more than 80 years, we've only spent 9 trillion on interest this is what will break america. every great society collapse when is they overextend themselves >> i agree with you 100% to look into these numbers and educate everybody and make sure everybody is looking at the same

numbers. some people would say the debt limit is simply just an order of doing business in the house because you've already spent that money and agreed to that money. how do we figure out for the next, not put the fiscal authority of the united states in question. >> that's why i said to the president let's be rational, reasonable and let's negotiate should we continue the same behavior going forward i agree. a debt limit is giving your kid a credit card and they charge it all the way up you're responsible to pay it because did you it but you're responsible to the to continue t -- not to continue the same pattern. we can have fiscal reform. let's change our behavior. i told the president i'm not going to raise taxes, we've got more revenue coming in than any time and we're not going to spend as much money as last year they've increased it 30% in the process. so everything is on the table.

let's sit down and discuss >> two months ago people started freaking out in january. we were talking about it at the time people were freaking out about the debt limit i said it's not going to hit until june or july and now it march and i'm wondering how the negotiations are doing >> no, the president wasted a month after the discussion with him. he's a month behind on his budget this is why i'm trying to push this, what i think positive is republicans and democrats are sitting down this week together with no cameras and can talk about ideas. you look on the senate side. schumer doesn't want to do anything he thinks you should just pass a clean debt ceiling that won't pass the senate man mancion said he won't vote on this could we do something on work

requirements there's a lot of places that could make the economy grow at the same time. >> all things are on the table when you're going to do this we have former vice president pence on he was all over medicare and social security. and really sort of pointing -- it's the third rail, always been the third rail of american politics saying it's going to take presidential leadership to approach the subject but it's been broached again and you ran from it immediately. they're going to demagogue it and push grandma off the cliff again. that's something that it would take real leadership to bring that up. you going to bring that up >> you're never going to solve the debt problem by one party. it takes everybody together. the interesting thing part in the new cbo numbers, it's the first time in the debt window all three trust funds go

insolvent, 2022 and 2023 so you can't ignore the problem. if you watch the president is doing, he's saying a lighte abo republican, we want to cut social security and medicare we do not. we want to fix it. we want to find savings in the waste. >> raise the age >> whatever we would do on that would have to be bipartisan, but he's trying to make politics out of that so i say that's off the table. >> it's like you go first, no, you go first >> i'm trying to be the adult in the room i'm not saying anything. i'm not going to argue this in the press. what i'm doing is bringing in the congressional budget office director and bring him right into the auditorium so there's no cameras, all the members can have the same numbers and bring up whatever idea they want i went to the minority leader telling him exactly what i

wanted to do and i'd like to do a series of these. why don't we bring back other times when congress was able to find ways that they can work together and bring up ideas the power of the idea should win at the end of the day. we are now at a tipping point that this debt-to-gdp we have not seen since world war ii. at that moment we were trying to save our country and save thele world. now if you look at the spending per gdp, we're above a 50-year high but if you look at our revenue, a revenue average 50 years, 17%. we're at 20% so it's not a revenue problem, it's become a spending problem >> one of the ideas i do like is taking back the covid money that wasn't spent >> that's low-hanging fruit, is it not >> it's in my kittie so i get to

use it now >> a lot has been wasted that's appropriated money, hard-working, taxpayer money should you waste it or bring it back and find savings? >> well, you'll be back. every month you say? >> i've kept my promise so far i'm not going to promise i wear a jacket, not a jacket you made me take my jacket off in the cold of winter. >> you look good this is great. we're getting down to business pence took it off. >> that's the measurement of a good speaker >> china we do need to prepare for when we may not have china. they're already not really very friendly to us i mean, supply chain issues we got to bring back here >> we have to. >> but looked what happened. you bring it back, you do the tips act look at what the democrats are now holding these companies

hostage to, child care, it's got to be unions every wish list -- >> you're destroying america's retirement for their liberal causes that shouldn't be the decision that you make. >> how are you going to prevent that this was bipartisan. should it not have passed? no buybacks for five years remember what buffett said economically order it or -- >> not for all buybacks. if you think all buybacks are bad. >> a couple of year ago when buffett said my assistant pays lower taxes, every mainstream media outlet said what buffett said last week not a word, not one of them picked up what he said. >> there are two reasons we also moved a resolution on the floor against socialism. a hundred democrats either voted against it or abstained.

elected to office, will not say socialism is bad if you wonder why it going that direction, those people are elected. the other challenge you have is we have failed with china because we've never spoke with one voice. not an american position we've waited from administration to administration. i tried to create a bipartisan task force on china when the democrats were in the majority i got them to agree. it took me 8 months. "washington post" came and interviewed us and the night before we were going to announce it, they said no because covid had hit and thought it would be political. we got one created now and we just had our first hearing because what we watch and this isn't about defense, this is also about not just our security but our technology and supply chain what china has done is done these five-year plans to go against certain part and certain industries and now we've become dependent upon them, be it

medical, critical minerals they control 95% of the critical minerals process if you watch, even "the washington post" praised our first meeting and this is that we can come out with one voice, an american position that be we bring those jobs back to america but we don't have us dictating the business how to do it but we don't be beholden to china in any industry >> after two decades of not raising defense spending in china, it's going to go up 7% this year. >> do you believe their numbers? you can't even believe -- >> and it's only $230 billion. we spend 800 billion probably. but is it all sending up -- >> we spend 800 billion on r & d and they steal it. they don't have to spend as much >> you going to taiwan >> when i travel, i'll announce when i do that >> we'll have senator mark warner on tomorrow >> mark warner is a democrat but he and i work very closely,

especially in the gang of eight. tiktok brings me real concern. why is tiktok used different in america than it is in china? why is it limited in china why did they keep international flights when covid hit but stopped domestic flights that should warn you enough. china has watched how we fought war since desert storm they didn't build new aircraft carriers they built missiles to sink them and islands to push us back. they're not in the international space station, they have their own. they have landed on the dark side of the moon, we have not. they have built hyper sonics, we have not that's the equivalent of being able to punch us than we can swing at them. they put a balloon over this

country and the president waited five days to take it down. why we allow this and the behavior of the way they're treating us today, it's much different. we watched president xi change the constitution he's moved the ccp to a new importance that's why their growth is -- >> do you think it would be important for republicans to elect the next president in 2024 >> i think it's important that americans elect a new president and that he or she be a republican >> you saw cpac, you know what's happening there. you know what the big question is when former vice president pence said republican voters will pick the right person to run, i just saw sununu say there's no way former president trump is going to be the nominee. can you just predict the future? how is this going to work? if there's too many people on that debate stage, is that going to be a repeat of 2016

>> i don't have a problem with people having ideas and out there debating, i actually think that's healthy what the democrats have done are different. they're trying to rid the system they're changing the system before for the primary to predetermine who it is >> in south carolina >> yeah. i think that part's wrong. i think a healthy debate is always open. normally when we sit back at this moment in time, who everybody thinks the front-runner is, usually sisn't the person who gets selected that's why when you go to iowa and new hampshire, smaller states, it's a congressional office, they're not quick to give you an endorsement. and the issues that we elect the next president on, probably not the issues today there's going to be other challenges from that time. is it going to be a foreign policy issue are we going to be bogged down in ukraine is it going to be a proxy battle with china domestically where we are, is inflation still rising as this

government money runs out? the policies that the democrats have really gone makes it really a domestic debate that i think is going to continue to the election >> i know what you're going to tell me. you've got a lot to do between now and that next election you probably aren't even -- i know in the back of your mind you must be thinking about how it would work. obviously republicans can't get a lot done if they don't have a person in the white house. so that would be the ultimate. >> there you go with the negativity i have watched this country time and before in the last presidential race, we lost. in the house republicans picked up 15 seats. so i know the quality of the candidate matters. we won the majority this time when the senate lost for the second time, when republican governors and legislators lost the quality of candidates matter what i focus on in the house, we have a job to do we're not going to get reelected in the house, not based upon who

is running for president, based upon the job we do i'm two months into this job, i'm focused 24/7 how do we turn this country around >> if you're back in power in terms of the senate and the white house, will you take on immigration? will you take on entitlement or is it going to be more you didn't do it last time really with president trump, right? >> well, i would argue differently. we reform the tax reform and it brought in more revenue than in any time >> immigration, folks. >> we have to solve immigration. but that's part of our commitment to america. >> debt to gdp, deficits, all these things. >> what am i doing this week what is the debate we're having? maybe we have to be better communicators based on what we're doing right now but we need more people to join with us >> last week norfolk southern had the secretary derailment in

a month. small towns are trying to figure out what's coming through, what's happening >> we need to see why did these happen, what's traveling through and how these communities -- i live in a community that the trains go through. my grandfather was an engineer on these railroads what is the ability to make sure we're safe but also have the transportation needs we have it stems a whole other argument of why are the democrats stop be pipelines? why aren't we having more pipeline movement of this that keeps the environment safe >> do you think it a problem with norfolk southern or is that a coincidence? >> as a politician, i don't like to prejudge. i'd rather know what caused the problem and find a solution for it i'll hold till i know. we have a hearing coming up. bill johnson in energy and commerce is holding the hearing

who actually represents the area of the norfolk derailment. >> i just keep setting myself up as the bad guy and the straw man for you to yell at >> andrew's not here so he's taking the role! >> when we have these contests to pick a nominee, sometimes we ask all of these yes or ladies to say -- >> there's more women on the stage. >> i will support the eventual nominee. do you think former president trump would support somebody else in he doesn't get the nomination and if he doesn't, can that person win without the 30% that trump seems to have -- that former president trump seems to have total sway over if he were to say don't do it or run as an independent, it's going to be hard for a republican to get elected. >> and my answer to you would be yes but i would also raise that question that people miss. john kasich did support the nominee last time. i know there's fixation on

president trump but you have to hold everybody -- >> he had the speech, what did he get, 65% of the vote? >> that's the role and that's one element within the party why are people afraid to have a debate about issues? if i look at the republican party, they look at president trump's policies, they love his policies are they going to nominate somebody that doesn't support president trump's policies no so from my perspective, we've watched the country stronger under that basis but i think everyone who runs for president should support the party nominee because we watched in history, this hasn't been the case. >> who would your favorite be? >> my favorite would be to have the house be successful so that nominee could win. >> speaker, let's see, it's the 6th. so we'll see you april 6th or so >> i thought we'd rotate you come back.

>> i'll come back. >> bring the whole crew. >> with we're all welcome. if you don't want to wear your jacket, you don't have to. >> i took mine off thank you for being here and coming to our house. how do you like it it's good, right >> it's great. >> i can't believe your entourage. >> it's a lot of cars, a lot of people >> he's third in line. >> i'm grateful to have the position it was not easy to win and i want to make sure -- >> to me you seem good, like you settled in that was karl rove who wrote that piece >> the one thing i found about this, going through that, it was tough on you, right? but the one thing i found is it probably made me a better speaker. because i'm not worried day to day about what one member thinks it what we're able to achieve. becoming speaker, you're speaker of the house

you're not the conference leader you got to do what's best for this country it is difficult. we have a five-seat majority but you don't have five members all the time we have a member who fell out of a tree, somebody else, their child gets sick. it difficult you don't have to have politics in everything we do. the country can come together and i think the country is hungry for that. >> meaning expect more bipartisan activity? >> yeah. but why does everything -- just because one pear says it doesn't mean it all has to be wrong. there is some element. we all come from the same country. i think the country is very hungry -- >> what i saw with the president, the number one issue with the polling -- the country doesn't want to worry about their government they want the government to work and there's so many elements of the government that should be more efficient, more effective and everything when you try to make it more efficient, isn't meaning it's a cut, meaning it's

a savings. it's putting us on a better path for the future and that's why i wanted to make sure there's more ideas. when i was minority leader, even down to the security was partisan it doesn't need to be that way >> thank you, speaker. >> thank you >> you're welcome. i appreciate it. >> we'll see you soon. when we come back, we'll take you to the global energy conference in houston for a big interview with slb formerly known at slumbergier

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all those have really broken down fairly december sizeively this goes back to the middle of last year. you had almost kind of a dead heat here until recently, but then industrials really separated themselves here's the dollar index. it's not always the thing that drives stocks but recently it's been the thing that drove stocks, right? we peaked in the dollar, came lower in october and found support in february. so you see this sort of

hesitating here a little bit, gave some breathing room, two stocks, as did yields as you guys have watched with the ten-year coming down below 4%. >> how big of an impact does that have on china the strong dollar and what that means? >> i don't think it's the key driver of what's happening in china. i think the strong dollar to me is mostly important at least to our markets because it's a really direct proxy for what the fed is going to have to do, how much more we have to actually worry about furthering interest rate increases so, obviously, it's going to be a little bit of a benefit potentially for china but i don't think that's necessarily -- we're not talking as much about the marginal trade flows the way we used to >> all right, mike, thank you. >> yup >> the energy industry's biggest names gathering into houston this week, a good place for them brian sullivan joins us now.

hey, brian >> good morning. i think the performance of oil and gas stocks were so hot last year and the growing acceptance that hydrocarbon probably is not going away in a couple of years. even the president was saying that in the state of the union, that we're going to need oil and gas for at least a decade, probably longer. olivier le peuch is the ceo of slb. >> as the issue moves forward and the transition cannot stand on its own today, i think the transition will last decades the challenge is to participate fully in the solution to

efficiency, to digital, to solution tha time, using innovation to accelerate the clean transition. >> if you're an investor watching saying i can't -- i'm not allowed to own oil and gas companies or i don't want to i want a fossil free feature slb will play a role in that as well tell our viewers and educate that, oil and gas is actually needed for the energy transition you're not building a wind turbine without natural gas. >> absolutely. it is being used for the clean energy i think it's not an or, it's an and equation i think we will use for

byproducts of oil and gas as we part to be part of the fabric of our society and at the same time we need what complements so we need both for some time. >> can investors get exposure to that with slb? >> absolutely. i think we have been relaunching our brands less than six months ago, for balanced planet balance is the key word. balancing the energy system to make use of oil and gas. that's very critical we have a goal so that this industry will be more sustainable, will be more resilient and longer into the transition >> your recent earnings call, you said something that made me a little bit nervous about north

america, primarily the united states you said growth had moderated in the american business, much more bullish internationally. moderating growth, does that mean that the united states is going to see less new oil production in the quarters and years ahead? >> no. i think first to put things in perspective, i think last year the north america activity has been growing 50% year on year. so that's huge this is a rate of growth that cannot from access to supply capacity and support that inopen vats for the oil and gas industry cannot sustain that rate of growth >> but why not no people, no money? money doesn't seem to be the problem. >> no, it's the resource, capital discipline hence we are disciplined to put new resource and new equipment

into play and the constraint somehow. so you see the rate this year, doesn't mean that it's going down this your we'll add another 400,000 to 600,000 by the bay crude oil pollution. so it's huge i think it has been going 1.5, 1.6 since the trough and we keep going. now the goal and there are constraints in the future that could make it moderate >> i'm asking every guest quickly, ten seconds one year from now oil prices higher, lower or about the same? >> i think it will be higher and based on the constraints of the industry is investing short and long worldwide and it is putting capacity >> olivier le peuch, thank you >> wow, you speak french

>> un per. [ speaking french >> wow >> impressive. >> man of many talents >> you got another talent we're going to be seeing >> remember our friend from "ground hog day. >> you speak french? oui. catch brian's new show when it premieres wednesday nights, nbc's last call. it's going to be in english, though we could do it in french. the intersection of money, culture, policy. it all starts at 7 p.m. eastern time >> we're looking forward to it >> midnight. >> i think it is five hours later. >> when we come back, analyst

gene munster will talk us to talk tech and how fed chair jay powell's cgrsialoneson testimony this week could move the needle for stocks "squawk box" will be right back. real zero energy is coming... and yes, that means cutting carbon emissions... but it also means cutting costs. because now clean energy is more affordable energy. we've been investing in american infrastructure for thirty years... lowering electricity costs today, and protecting from volatile energy prices tomorrow. so walk with us— and let's make cutting energy costs real. what if we live to 100. i don't want to outlive our money. i keep eating all these chia seeds. i could live to be 100. we work with empower, even if we do live to 100 we don't have to worry. eh, not worried. take control of your financial future to empower what's next.

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from software that delivers new cures at warp speed, to technology that makes clean energy reliable, emerson innovation helps make the world healthier, safer, smarter and more sustainable. go boldly. emerson. investors are going to be watching for moves in the tech sector tomorrow andwednesday when fed chair jay powell goes

before congress to testify on monetary policy. joining us now is gene munster what do you think if jay powell starts talking about inflation, maybe tougher than he did last time around, is that going to be a problem for the high-growth tech stocks? >> becky, i think undoubtedly it will be. i think that should be the positioning of tech investors going into powell's testimony on tuesday and wednesday. the reason is i'm going to take what he said at the washington think tank a few weeks ago as true, when he said he does not get this economic data beforehand sometimes he gets a few hours heads up the next key data point of course is friday with the jobs number therefore, for the next couple days or at least with his testimony, i suspect chairman powell is going to retreat to his fallback position of a more hawkish tone i think what he learned with the last fed meeting is that if he

is not overly hawkish, the market tends to interpret any tractional news related to any breaks coming up in interest rates. i suspect he's going to be pretty hawkish and will lay the groundwork for a selloff in tech i think the first half of the year is going to be a difficult year for tech and it's a simple equation related to what we're seeing in the economy and specifically related to inflation. we'll hear that from powell this week >> if that's short term, longer term do you go back into those stokes and get out of them in a trading sort of way ahead of that testimony >> we have two prolduct to each approach one approach is to time the market if you have a market timing perspective, it's best to have an over lly weighted cash position i do not sleep well at night if

the market and fears of the market ripping, but that is our perspective, at least for the next several months as we think there's going to be some softness and we're still invested we're still invested in companies that we think have margin up side we do think that this sets up and i don't want to split hairs and have a mixed message here, i want to be very clear, first half i think that these stocks are going to be less performing relative to the overall market i think the back half of 23 and into 24 will be a great year for technical. i think that the numbers have come down now. we've seen more modestgrowth rates so you just have easier comps, which sets up for i think a good investing period for tech so near term more cautious but i still think if investors believe and want to be fully invested, they're still great experiences to be invested in. >> let's talk regulatory overlook over all of these things i know that you kind of pointed

out that lena kahn hasn't been able to -- it has put a chill in the market what happens with all of this? >> this has been a quiet period for m & a. the ones that have happened have been pretty small. i think you're going to see more from with more regulatory issues, what's going to happen from washington. it's one of those things where the politicians can make it easy to be tough on tech and i think we're going to start to see some of that tough tech talk, especially going into a presidential period. obviously the election is not until 2024 but we're going to start to see some of the campaigning this year and i think that's going to amp up some of the rhetoric around tech i think when you put all of this together, what you will see is a

quickened pace of threats i think essentially from washington towards bigger technical but i think that that is negative for some of these tech stocks in the near term i think these headlines do have a factor of scooping some investors, but ultimately i think it isn't going to matter much to these companies and i want to use history as a benchmark here over the past five years we've seen this elevated risk from regulators regarding big tech. but it really hasn't impacted any of these companies and the most acute point more recently has been google and its ad exchange and the prospects that they might spin out that ad exchange and i think that that is modest to a high potential that that actually happens but i don't necessarily think that that's negative for google shares because ultimately search is the biggest piece of their business i think when you think about the regulatory landscape here, i would expect that some of the rhetoric to quicken but i don't think it's going to have a negative long-term impact on

these technical stocks >> finally, we've heard a lot about chat dp and not so much about google when do you think we will hear more >> it's remarkable how the market has i think penalized google it's down 13% since it it annoue it's barred competitor chatgpt i think what that speaks to is a no-vote confidence it hasn't been announced yet, but probably in the next couple weeks we'll hear an announcement for google's io conference, a big developer conference, usually in the middle of may, and that's going to be a launch point, i think, where google is going to talk a lot about a.i. and their products and specifically, they have 80 different apps right now eight of those products are a billion daily active users or greater. i mean, they have huge scope, and recently, the company last week in some internal meetings was talking about a.i. being much more than search, basically

integrating that into the fabric of their other products, and so the simple point is this by google io in may, i suspect that you're going to see a lot more confidence from investors related to what google's ambitions are in a. i. and putting it in more products than just search. >> gene, thanks. always appreciate it coming up, what you need to know, what you need to watch ahead of the opening bell on wall street as we head to break. check out what house speaker kevin mccarthy told us about china and critical businesses and industries >> this isn't about defense. this is also about just not our security but our technology and our supply chain what china has done is done these five-year plans to go after certain parts in certain industries, and now we've become dependent upon them, and this is that we can come out with one voice, republican and democrat, an american position, that we bring those jobs back to america, but we don't have us dictating these busissowne h to

do it, but we don't be beholden to china in any industry ♪ old school wisdom, with a passion for what's possible. that's what you get from the morgan stanley client experience. you get listening more than talking, and a personalized plan built on insights and innovative technology. you get grit, vision, and the creativity to guide you through a changing world. ♪ how do we show strength and stability? to guide you through(eagle call)world. a mountain? a tree weathering a storm? (thunder) lions? nope. (lion rumbles) we do it with our people.

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little more than half an hour now to the opening bell on wall street. one market call we've been talking about this morning, morgan stanley bear, mike

wilson, saying he's expecting a rally to continue, at least in the short-term, but then maybe a lot of the old worries to reassert themselves. let's talk more about the markets with mona, senior investment strategist at edward jones, and i like this here, mona, and i'm going to read a quote. "we would expect ongoing volatility in the markets," and i guess you mean difficulty moving higher, "until a bottoming in earnings revisions, inflation more meaningfully rolls over, and the fed moves to the sidelines. all related, obviously, but just -- it could happen at any time, or do you think we're -- when could that happen what's your best guess six months, a year, what >> yeah, thangds, joe, and thanks for summarizing my point so clearly there i think generally we're in a position where markets are trying to fight the fed here, and i think mid-year is a reasonable assessment where, one, the fed could step to the sidelines, at least, and a not

keep moving rates higher but that would only happen in a meaningful way if we also simultaneously see inflation moving meaningfully lower and that would mean not only goods inflation, which has started to roll over. housing and rental inflation, which we have seen realtime signs of softening, but we would also need to seethat wage component, that nonhousing services component start to stabilize and move lower as well we would be cautious to extrapolate such a strong january jobs report to the rest of the year. we think there is some softening coming, but we'd like to see that materialize in the month ahead. the third point you mentioned on earnings, i think that's an important one too. we've seen earnings be substantially revised lower for 2023 already 10% plus was the estimate last year we think there's a little leg lower to go there as well. we'll probably get somewhat into negative territory on 2023 earnings, but we're in a bottoming process in that as well, so we think things are coming together nicely, but we

would expect volatility, as you noted, some sideways movement, periods of consolidation, until those things come together and perhaps set up nicely for a more sustainable recovery in the back half of the year, towards the back half of the year. >> tough to be right about the direction and the duration, so i'm not going to ask you that. but do you think we test the lows, the october -- did october really -- was that a bottoming process that's long-lasting, or do we break through 30 -- i don't know, whatever you want to call the low, i guess, 3,500 or 3,560? do we test that and go lower does that hold >> we think there hamay be a vegetable scenario where we start to test the october lows but we don't think we go much beyond that. back in october, yields were above 4% on the ten-year we were going through volatility because the fed was back on the table. it's a similar scenario, but we think this time around, we're closer to the end of this tightening cycle than we are

towards the midpoint where we were back in october we think we're on better footing. the economy, you know a lot of people thought back in november and october that we were heading into an imminent recession we've clearly shown some resilience keep in mind, back in october and november, there was a real threat that europe could fall into this deep recession, and they actually made it through that season without falling into recession. so, better global footing, better domestic footing. could we start to see volatility and maybe even retest some of those lows that's possible, but we think the downside from there is not meaningful, and in fact, that's really the opportunity for investors to start building positions for that recovery playbook we think that's coming ahead as well we started to see it a little bit earlier this year. that was probably too fast, too soon, but we think some of those plays, parts of quality growth, cyclical parts of the market, even international and small caps are a part of your portfolio for recovery playbook ahead. >> the ten-year is now -- i mean, we were above 4%

we're below again, and do you think -- same question do you think we hit new highs in yields above, what'd we get, 4.4%, something like that, last year do we go above that eventually, and what is the hold-up? >> yeah. you know, it's interesting i think 4.25% was kind of the sustainable high back in october. we do think we could retest that 4% or 4.25%. we're heading in that direction, and the fed probably has from or three more rate hikes ahead of it interestingly, we've seen investors pile into the short duration part of the market, rightfully so, cds, one and two-year treasury bills are offering a lot of interesting value here yields are much more attractive than they were any time in recent history, but as we head toward that 4.25% on a ten-year, we think there's a real opportunity to extend duration to kind of complement your sort duration positioning with longer duration plays and equity and fixed income, but if you think

about the fixed income side of that, you're not only locking in better rates for a longer period of time but you have the potential for price appreciation down the road if the fed does pause and over time does start shifting rates lower as well lot of interesting opportunities, we think. this year will set up nicely for equity and bond invest ez. >> mona, thanks. good to have you on. don't be a stranger. join us tomorrow "squawk on the street" is next ♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber and mike santoli bulls are going to try to seize the opportunity after last week's bounce. important week ahead with chair powell on the hill, j.o.l.t.s., jobs friday. our road map begins with the macro picture and the market