good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. >> i'm back. >> we had other people in the chair. >> i heard about that. >> guests. >> my chair? >> there are people that sit here on that show late in the afternoon that i'm not so happy about. >> really? >> yeah. >> why cooties? >> yeah. >> suddenly you are worried about germs? a look at u.s. equities at this hour. things are just slightly in the red. dow futures down 5 points. s&p futures down 10. nasdaq down close to 70. stocks were mixed yesterday. the dow slightly lower and

nasdaq and s&p slightly higher we didn't hear anything shocking yesterday from jay powell. he said rates could get higher and faster down 1.8% for s&p. the nasdaq is down 1%. check out treasury yields. you will see it looks like the 10-year treasury is 3.98%. the 2-year treasury is at 5.03%. new overnight, mitch mcconnell was hospitalized after tripping at the hotel in washington, d.c. which happened during a private dinner. no details available about his condition. the senator fell in 2019 on a patio at his home in louisville requiring surgery for a fractured soulhoulder. on the agenda in washington, the ceo of norfolk southern alan shaw will be on the broadcast.

no, he will be on the hill he will appear before the senate panel to tell lawmakers he is deeply sorry for the derailment for the toxic chemical spill in ohio the testimony was obtained by lawmakers and it will be cleaned safely and with urgency. that hearing is scheduled to begin today at 10:00 a.m i can't wait to get to the wrestling story. i read the powell testimony from yesterday. if you read the headline, the fed was keeping options open after people assumed 50 would happen again he was saying we may have to go faster and higher. we are still data dependent. he may know high frequency stuff, but doesn't know the number tomorrow. he doesn't know specifically the inflation numbers next week. what i take from that is for the

last month, things are hotter and he sees that he thinks we need 50 he is still open. >> i agree with that assessment. yesterday, we didn't see some big bounce back. >> where is the s&p? >> 4,000 >> not just below it is weird. it seems to be holding where is the 10-year treasury? just below 4%. >> the 2-year treasury is just above 5%. >> i find it frustrating things it bad. they deserve to be bad go to the place that shows things bad stop teasing us that things are okay >> he is not teasing us. it is the economy teasing us we don't know where things are and everybody is waiting to see what happens next. that is why it is a weird inflection point today will look great and tomorrow will look terrible. >> perry he sent me something >> you read it to me

>> he said volcker's situation took ten years to brew the horrible wage price pressures. this happened quickly and it was pandemic related there is spending and fiscal issues i don't know i'm still hopeful. this is hilarious. i watched brian talk about this last night. >> on "last call." >> yes i understand how they are doing it world wrestling entertainment in talks with state gambling rogue laters in -- regulators in colorado and michigan to bet on high profile scripted matches. they know who is winning, but only a couple people know. i hope they don't tell anyone. it was two people which aknow >> can you bet on the oscars

>> only ernst and young. >> it was pwc who used to do the oscars >> wwe is working with the accounting firm. ey to secure the match scripps to hope there is no chance of results leaking to the public. the idea of someone having the information. the accounting firms have worked with awards shows to keep results a secret wrestling executives cited the oscar betting as a template. >> the actors know >> the wrestlers need to know. >> sorry. >> the wrestlers have a team. >> the guy just beats him fair and square >> if it is scripted and you are

telling them this is scripted. >> the wrestler has a coach? they have people on their team >> in their world? >> they can't be told who is going to win two minutes before. >> they get mad at each other before the matches usually -- >> a-ha. >> someone may get involved in throwing a chair a lot that goes on that is scripted >> that's the point. >> that could be if you are in on it and betting who wins, the house is the big issue that is if 0 or 00 comes up. that would be a third actor coming in or third wrestler coming in. >> i promise, if they do this, over the next ten years, there will be one instance and minimum of a story where you read one wrestler on the team told their family or friend or this or that >> or gave the high sign. >> and everyone is going to

jail >> the more we explain it, the less it makes sense. >> let me throw this into it i read this on uber facts on twitter. i can't verify an uber facts on twitter that said it is a little known fact the nfl is considered entertainment so they could decide the outcome of the game you complained about the referee. >> are you kidding me? >> it gives them cover so if the referees make a bad call, it gives them cover for all of that it is under the same framing of entertai entertainment. wwe figured this out and said why can't we do this >> the chiefs were scripted? >> i'm not saying it is scripted it is considered entertainment. >> as a bengals fan and eagles fan. my point is no matter how

pristine and above board sports, there could be a bad apple an official in the basketball game those guys making -- so subjective just like in football. the holding calls. foul calls >> you know, geo baker broke this news. the rutgers and ohio state game which rutgers lost at the last second they have now decided the ncaa is going to consider that a win for whether or not to put rutgers in the tournament. they said it was a bad call from the ref. it was shown afterwards. that changes the records for whether or not they determine because so many teams are on the bubble to get into thencaa >> did you look at the lineup? >> the show. >> no, no. the tournaments galore

games today. you know who rutgers is playing? >> yes noon michigan in chicago. >> right there are 20 games where i would like to bet on that. lose on that >> i would like to watch you like to bet. >> i like to bet on them to watch them that's why first thing i see is which network is carrying it so i can watch it and turn it off when i get too nervous. let's talk about credit suisse new overnight, the bank delays the publication of the annual report after the late call from the s.e.c. the assessment of previous revisions of cash flow statements in 2019 and 2020 is the cause. the issues do not affect the 2022 financial results released last month the stock falling this morning by 5.5% at this point. i don't know what's going on there.

something amiss. >> stuff it. jpmorgan chase is crazy. > jes staley >> following snow white for a long time? >> i am just glad i didn't know that guy coming up, is it 10 after? >> now it is. >> what to buy when yields are high we talk strategy next. later, i'm so excited to have ge ceo larry culp on "squawk box." i cannot tell you how great this is the interview at 6:45 a.m. eastern. i don't know if we have had him on aseen on cnbc, but not our show you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

short-term bond yields are up following jay powell's testimony to lawmakers saying rates will likely remain higher for longer joining us now is joanne feeney. how would you like to be jay powell you want to get the yield curve up so you say stuff and the short-end goes up and it effects

the opposite way because the landing, whether soft or hard, could be harder than you thought. everything is so count counter counterintuitive people at home are scratching their heads over what we talk about most days. >> joe, you are right. it is a very unusual situation we don't have recessions in history that match the pre-conditions this one has. that is why the fed is in such a suffici such a tough spot. i don't want to be jay powell. you have to look at high inflation now and rates moving higher and likely to stay higher for longer, plus the potential of recession, which means lower earnings growth. that makes investing challenging. we look at our clients and particularly the ones looking to be in retirement and need the cash flow. we have several higher income strategies that mix together fixed income and equities.

equities can do a lot that bonds cannot do in this environment. >> right we know about the yield curve and how it can forecast a slowdown or recession. if the inversion gets higher and now over 100 basis points. the highest since 1981, does the size of the inversion give an accurate forecast over how deep the recession is if you have to raises higher because the economy is so strong, then it doesn't -- it seems like that could be a good thing that you can raise rates a little and tackle the inflation and maybe the economy survives >> there are several things going on one of which makes it difficult to use the inversion of the yield curve as a signal of recession. what the market is saying is they are betting on the recession. that is what the yield curve is telling us the inflation problem is viewed

as a short-term problem. you expect rates to be higher than long-term so the yield curve makes sense from the path of inflation perspective. it is challenging for equity investors because of that fear it is challenging for the fed to get this under control and they could risk constraining consumer spending so much we end up in recession. remember the consumer is resilient. disposable income is rising. the data from mastercard this morning shows that retail spending has been keeping up and ahead of inflation consumers are still spending which makes the fed's job more chall challenging. >> you have been p, beating the bush with yield and dividend and potential for capital appreciation total return portfolio and you found which areas and which

stocks >> joe, the idea is bonds can go you so far the coupons on bonds are good. we are getting 5.5% or more in investment grade we built into the t-3 balance sheet strategy it mixes appreciation and income the yields can do more on the equity side. companies are raising dividends. we have seen that a lot in the last year. we expect to continue. if you look at dividends and bl blackstone or abbvie or ibm, you are getting 4% those yields will stay where they are they will see increase in dividends. increase in dividends can help the vortice more cash flow come in over time that helps them keep up and stay ahead of inflation in addition to get the appreciation. some companies we mention is we see them in good growing markets

and good moats in the companies. it is a combination of appreciation potential in the companies and also getting some of that income that helps people get through the high inflation period >> right that's just classic graham and department dodd i get a dividend now that is 2.5% and it goes up 10% or 15% a year, you do the math and you can almost tell where the stock price will be in ten years if it is still yields 2% after the 15% deaf deividend increase it is not like art you see the cash flow ramp ping up. >> that is right you can build a diversified portfolio with the high geopolitical risk and debt ceiling concerns and all risk

that we wthink will be volatile you can diversify. >> it keeps you out of a lot of sexy names if you did that when you started in the business at 25 and did it for the next 50 years, you would do well instead of chasing every trend where it can cut both ways with tech over the last year joanne, thanks very sober recommendations there. we need it where are you? are you skiing somewhere i'm wondering. >> vermont up in vermont, joe taking advantage of the latest snowfall >> it looks nice looks good when we come back, a developing story jpmorgan chase suing former executive jes staley over his ties to jeffery epstein.

eamon javers has the latest. and later this hour, cnbc interview with ge ceo larry culp ahead of the company investor day coming up at 6:45 a.m. eastern time don't miss it. the stock right now off 50 cents. tradinatg $86.49. we'll be right back. a tree weathering a storm? (thunder) lions? nope. (lion rumbles) we do it with our people. ♪ ♪ why are there two extra seats? are we getting a dog? a great dane? two great danes?! i know. giant uncle dane and his giant beard. maybe a dragon? no, dragons are boring. twin sisters! and one is a robot and one is a knight. and i'll be on the side of... the octopus. rawr!!!

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welcome back to "squawk box. jpmorgan chase suing jes staley over his ties are jeffery epstein. we have eamon javers with more >> reporter: good morning. jpmorgan chase facing lawsuits alleging the bank aided jeffery epstein by keeping him on as a client and sending money to victims. the filing argues staley who

shows he had a close relationship with epstein and should be held libel if the bank loses the cases. jpmorgan chase not admitting wrongdoing, but found libel, staley should pay the bill jpmorgan chase is seeking to claw back all of staley's compensation from 2006 to 2013 he left the bank in 2013 he was friendly with epstein, but never knew about the crimes. one questions in the high profile legal battle is what knowledge jamie dimon knew of the epstein situation. two weeks ago, jpmorgan chase told us it could not found any indication that dimon personally reviewed epstein's accounts in 2008 that despite an email released suggesting there was a dimon are view of the accounts which was

pending. we have not been able to talk to lawyers representing staley. we expect all of our employees at every level of the firm to act with honestly and integrity. if the allegations are true, stale staley violated by putting his interests ahead of the company andrew. >> eamon, so many questions this morning. one of which is the accusation, of course, has not been verified, at least yet we have not seen this play out in court does it have to play out in court for jpmorgan chase to collect if it is going to collect on the clawback? it sounds like all of his income for a meaningful period of time. what dollar number are we talking about? >> reporter: clearly top executive at jpmorgan chase over multiple years millions of dollars here the question is can jpmorgan chase get that money

in that will have to be up to the courts we will see where it goes. andrew, this is a high-risk move by -- alleging staley is to blame. if anybody is to blame, it is him, not jpmorgan chase. if that is the case, jes staley has the opportunity to get into discovery with jpmorgan chase and develop emails or information inside jpmorgan chase that might suggest otherwise. if jpmorgan chase is making this case in public, they will have to be very confident that sjes staley is not the key player he was the overseer of the accounts of epstein at the time he was spending time at the private island and emailing him from inside epstein's hot tub on the island they were exchanging pictures of young women back and forth

a long relationship and email trail between the two. the question is what other emails are inside jpmorgan chase and could jpmorgan chase risk those coming out in discovery over the lawsuit it seems they must feel they are in good position and feel good about the position if they are pursuing the litigation. >> eamon, is the expectation is all of the bad emails with staley is already out there? he has nothing to lose because we know everything do you think there are more emails that look terrible for jes staley worse than what we have seen >> reporter: the question is does it look terrible for jpmorgan chase jes staley's reputation has been severely beaten. these emails look gross knowing what we know now

his image is tarnished the question is if there are other emails inside the firm that indicate other people are aware of this or helping jes staley making sure epstein stayed inside the bank if you ayou are pursuing litiga here da-- who knows >> it raises all kinds of questions. if jpmorgan chase losing on this and if other companies should watch corporate email and you are held libel my guess is all of a sudden, every big corporation will start making sure they are tracking every employee email if jpmorgan chase is libel because they should have known because it was in the emails, that sends a signal you better be monitoring every employee email. you are responsible. >> reporter: sure. corporations do. i did a story years ago about

the goldman sachs email with key word monitoring. they are looking for red flags in emails. it pops up for the monitoring team to look at. >> it might not be something that was flagged >> reporter: right there are two ways to look at this, becky. on the one hand, jes staley was hanging out in the hot tub of epstein's private island that looks suspicious knowing what we know now should a bank be aware where every employee or executive is spending his weekends is one way to look at it. you know, this guy is doing this on his private time. he was sending personal emails, but how do we know who his friends are and what he does on the weekend? the other issue is this guy was monitoring eepstein's act and --

accounts he was deeply connected to the person who he was overseeing as whether he was appropriate for the bank. >> how long do you think this takes to play out? >> reporter: i think months at least. andrew, we will see if there are other shoes to drop. we haven't heard the last of this story. >> eamon javers with the story that everybody is talking about. coming up on the other side of the break, data on consumer spending from bank of america. that is next and we are back after this help make trading feel effortless and its customizable scans with social sentiment help you find and unlock opportunities in the market with powerful, easy-to-use tools power e*trade makes complex trading easier react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity

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today.

good morning welcome back to "squawk box" live from the nasdaq market site in times square. looking at the futures whoa it's green one green number on the dow up 10 points. maybe from -- >> it was down 10 before >> it is a green shoot. bank of america out with data spending decelerated year over year joining us now is liz crisper. liz, slowing to 2.7%

does that suggest things are dropping off a cliff >> i don't think so. consumers are still spending if you look at the data, it was up 9% in february. credit and debit card spending is up 2.7% we are normalized to the decelerating growth through what we saw in 2022 >> everybody is waiting for the consumer to wait out of excess savings. when we return to a normal spending pattern are we there yet >> i don't think so. i keep looking at this and consumer deposit balances. across all of the income levels, we continue to see dipping into savings, but a lot of buffer consumers across all income levels have money. they have 50% more, essentially, than pre-pandemic.

they are dipping in, but it is stabilizing. those households under $50,000 saw an uptick. >> in spending >> in deposit balances what was that from probably tax refunds if we are looking at when the consumer runs out of money, our data is showing them with close to 50% more than they had pre-pandemic. >> if spending is up 2.7%, that is below the rate of inflation >> well, if you look at the credit card data annualized over the last four months, that is out pacing inflation 2.7% number is lower, but that has a little bit of wiggle room from the holiday in january. i look at the three-month at 4%. >> do you break it down to see what they are spending on? discretionary? >> we can. if you look at the mix, it is a

services story airlines up 27%. people are getting on planes and eating in restaurants. restaurants up 7%. where they are not spending money is on goods and particularly we noticed on the home home improvement is down 7%. furniture is down 14%. a services story >> that's because everybody bought everything they wanted the last three years >> probably part of it and they didn't travel as much as they want we are seeing that uptick. >> i want to emphasize why we break this down. bank of america banks with 1 of 2 households in america. you have deep data >> yeah. it is not just the spending data it is also looking at the deposit numbers that i mentioned before we also get to see inflows one thing i'm sure a lot of people have their eyes on is the labor market one of the things we looked at

was what's going on with all of those missing workers? 2 million workers who were getting direct deposit before the pandemic and no longer will they come back? interestingly, a lot of those folks were prime age work. some were retirees some retired due to poor health than the population trends expected of the time age workers, many were lower income and in person in retail and restaurant workers. the other thing we saw which was interesting is the prime age workers internal migration from higher cost of living states california, new york, massachusetts to states with higher affordability >> a lot of people are self-employed at this point. is that what you see >> we see gig income

supplementing. we have not seen regular income from gig work. gig income seems to be supplementing. for people who moved to the more affordable states, what they can oot afford to work less hours or live off the savings and supplement with gig work. w-- we have not seen people switching to regular gig work. >> liz, thank you. we will get to it next time. tech workers hasn't shown up with the spending being down. >> no. we wondered if that would be the face it is not yet. >> thanks. coming up on the other side of the break, the wharton school jeremy siegel thinks of what the fed should do next. and if you miss us, you can catch us on your favorite

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welcome back we need to get monday back that is the return to office message from the ceo of lloyds of london. it has been a challenge to get workers back in the office for the start of the week. in-person work is important for talent so the next generation can be better than his generation if you look at flight schedules with the volume, thursday night, monday night very popular. >> monday, tuesday i almost said friday i'm in love >> i almost said that, too. >> you did

whoa we don't do that any more. they play it on any day. that irritates me. it comes on tuesday. when we come back, transforming general electric. the stock moving higher the last several months next, exclusive interview with ceo larry culp this is ahead of ge investor day. as we head to break, check out shares of etsy shares are down 6% after the double downgrade by jefferies it moves from buy to under performance. stick around we'll be right back. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you.

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general electric holding investor day in cincinnati phil lebeau is joining us with the special guest. phil, good morning >> reporter: good morning, becky. larry culp here for investor day in cincinnati. you reaffirm guidance today. revenue growth and free cash flow you are expecting it to be up from 3.8 to $4.2 billion his projections for the year give me a sense of where ge is right now. >> phil, thank you for coming out to cincinnati. welcome. we're here at the customer chat education center we normally have our investor day today. this is really where we have hundreds of technicians from the world overcoming to cincinnati every year to learn how to support the fleet of engines of

that ge has around the world with respect to the guidance, we look very good about the financial projections. no change in that regard we have high single digit organic growth our free cash should be between 3.4 and $4.2 billion this year up nicely on adjustment basis. we feel good i think what we will take people through today is where we stand with the transformation with what happened and what we have in front of us at ge aerospace and ge nuvo. >> we will talk about in that a bit. with regard to ge aerospace. engine deliveries is expected 50% this year. the services revenue and backlog and outlook is bullish

how long do you see this up cycle the lasting with global air travel and global aviation >> speaking at the leap, you have that behind us. this is the hard of the body resurgence this is the engine that powers 60% of the airbus a-320. the leap 1b is under way with the boeing 737 max we see mid to high single digit -- excuse me mid to high growth in the air space. a combination of strong demand by the airlines to keep the current fleet flying in addition to the desire to expand and update fleet from airbus and boeing we are busy. >> you are not giving guidance you look out two or three years, do you see the up cycle continues? >> we will talk a bit on stage

with respect to what we see for 2025 and beyond. we think we are at a moment in the cycle where we see very strong organic growth. a function of what we do with the air framers with the new engines and planes and how we support the airlines with existing fleet >> the emphatic in your past comments that it's challenging from time to time. how much better is the supply chain now than it was a year ago, and what is the biggest issue right now? is it still manpower >> well, phil, i think that it is still hard and it is still hard on a daily basis. and that's why we are bringing a tremendous amount of intensity all throughout the ge supply chain, both within our own operations and with our suppliers versus a year ago. i think it is better but still challenging. i think we're better dealing with the constraints and the bottlenecks within our own operations, let alone working with our suppliers to do the same so i'm optimistic that we're going to be able to ramp not

only with the leap this year, as you said, we're going to be up 50%, but with our other platforms as well, but we got to make every day count. >> with regard to what the biggest issue is, is it manpower, not just for you, but really for the entire supply chain, the complex within aviation >> yes, but it is not limited to manpower when i think about manpower, i think about two things one, just making sure we have enough people in our facilities and with our suppliers to do the work required, but we also need skills, right? not just arms and legs and post pandemic, there had been a lot of skills that have not come back from the workforce. we need to supplement those skills, not only with more training, but frankly process improvements across our network. and that's what we're hard at work doing. >> you're an investor in the united airlines announcement, i think about a week and a half ago, along with a number of other companies, trying to develop the sustainable aviation fuel market. i know this is a chicken and egg type question, but how quickly

do you think that market can develop? >> i think we're all as an industry going to need sustainable aviation fuels over the next decade to be a larger portion of how we fuel these engines, otherwise we're not going to fulfill our commitment relative to decarbonizing the industry. >> and we know the emission rules are coming, whether it is in europe or here or elsewhere >> very much so. we're pleased to partner with scott kirby and the united team with their saf fund. we were underwing with scott on the first experimental flight with our leap engines as well. so we're doing all that we can, but this isn't a new effort us, though we have been working on saf from a technical, policy perspective, really back to i think 2007. there is a lot of work over the next decade to make saf a reality. i think the industry is really concentrated on that as the next important step here. >> larry, becky has a question for you. becky, go ahead. >> thanks, phil. hey, larry, i want to get your

thoughts about how firm this consumer spend on travel is going to be. we were just talking to someone who leads the bank of america institute and liz was saying that, look, consumers are spending everything on services right now. the huge part of that came to travel that was the biggest gains, the biggest increases they're seeing in spending for the most recent data she also pointed out that things like home improvement, things like furniture, those had dropped off pretty rapidly and furniture spending, for example, down 14% if we get to the point where consumers run out of some of their excess savings, and then aren't traveling as much, how fragile are the orders that are coming in from airlines that are feeling so good at this point? what is your contingency plan? >> well, becky, i would say that everything that we hear from our airline customers really the world over suggests that there is tremendous pent-up demand and that is what is fueling what we see today in terms of departures, we're quickly approaching 2019 levels in that

regard, we look at that on a daily basis, really, again, in every major market that we operate in so i think there is a level of optimism i don't think anyone is putting their heads in the sand. if we need to adjust down the road, we'll adjust, be it in terms of current activity, let alone the backlog we have with the air framers. we adjusted during the pandemic, but i think at this point as we look at 2023, again, back to the revenue guidance that we have talked about here, mid to high teens, we think we're going to be exceptionally busy at ge aerospace and our view that that will continue in the foreseeable future >> larry, our history here at cnbc with ge goes back so far. it's pretty staggering, i'd say, when you think about it. there with not be a cnbc, i don't think, without ge and jack welch. i'm from cincinnati. are you an evendale right now? you are in evendale? that is a big part of growing

up a major factor of life in cincinnati >> joe, we're in your hometown we have got about 6,000 employees in southern ohio the business is headquartered in evendale we're a couple of miles away at our customer technical education center great part of the country, as you well know. >> it is and if you need restaurant, boathouse, montgomery, things like that, i don't know where you're headed late, but my question was, i don't know of anybody who doesn't want ge to return to its absolute preeminence in american business five years from now, when i think of ge, what will i think of what will it be at that point if you're successful? >> well, joe, i think that if you look at ge today and when we look back on this period, what you're really going to see is a new err dawning where the three outstanding companies are really flourishing. on the 3rd of january, we launched our ge healthcare

business it couldn't be performing, i think, in any better way we're excited about what we're going to share with people today about how ge aerospace is going to shape the future of flight. and we know ge vernova is the company that will lead the energy transition. those are important global problems, opportunities for our businesses, and i think when we look back five years from now, we'll see that those businesses are fulfilling those missions, generating a lot of value for customers, for shareholders and other constituencies and that's something that we're going to be quite proud of and pleased with the progress thus far. >> larry, one last question, with the president's budgets coming out and a lot of people will be focused on whether or not there is going to be a reengining of the f-35, what is your sense in terms of optimism that that potentially will happen and you have a crack at getting back in there? >> well, phil, as you know, we have been hard at work on the

reengining of the f-35 the president's budget will come out later. that starts the next chapter in this conversation, right, the congress has its constitutional duty to work through that budget, but the congress has been clear, they have invested $4 billion to date on options to reengine the f-35. i think they know the military's desired mission for that aircraft going forward isquite clear. they would like more range they would like more thrust. and they need better thermal management, given the sheer magnitude of the electronics on board. we know our xa-100 is the only engine that can fulfill that mission. we have two of them. we had a lot of the air force brass through here to see the xa-100 i think as we work through the rest of this year we will work hard to make sure that the war fighters have what they need in that moment of truth with the xa-100 but in addition, right, that technology will really be core as we think about the end gap

program and sixth generation military aircraft. >> larry culp, chair and ceo of general electric before their investor day here in cincinnati, hey, joe, a little later on, we'll go down, me and larry, drive around and see how many reds fans we can find, just for you. >> i'm optimistic. and still a little bit hurt from kansas city and that -- what does larry think of the officiating? don't ask. good luck, phil. bring back some graders, if you could, if you think about it. coming up, market strategy with wharton school's jeremy siegel and then we're going to talk china, taxes and the president's budgetith pu wreblican senator ted cruz sharpen up your twitter responses. can't wait "squawk box" will be right back.

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good morning and welcome back to "squawk box" on cnbc we're live at the nasdaq market site in times square i'm andrew ross sorkin with becky quick and joe kernen u.s. equity futures, the s&p 500 off about 8 points now the dow up about 8 points. if we round up, the nasdaq off about 52 points. let's show you treasury yields as well. looking now at the ten-year, sitting at 3.985

the two-year at 5.041. president biden will unveil a fiscal 2024 budget that calls for $3 trillion in deficit reduction in the next decade while rising spending in many areas like defense, paid leave and child care kayla tausche joins us with more good morning >> that's an increased deficit reduction target from the $2 trillion the president laid out in the state of the union. and it comes alongside spending increases to keep funding the war in ukraine and to incorporate key social programs democrats have yet to pass this year's budget blueprint is expected to come in lower than pandemic era wish lists. the president's first year, he requested $6 trillion to cover the stimulus and campaign programs, a 25% increase from president trump's pre-covid blueprint. of course, what was spent in 2020 and 2021 was far higher, but white house is expected to allocate money for child care, universal pre-kindergarten and paid leave proposals, all of which have long been part of the

democrat platform and removed from prior bills, largely because of their steep costs to pay partially for the increased spending, the white house is proposing a litany of spending cuts, estimating it would save $160 billion by letting the government negotiate prices for more than 20 drugs for medicare, $31 billion by removing tax breaks for oil and gas companies, $24 billion by taxing crypto transacttransactid $19 billion on real estate transactions we know there are tax increase proposals coming to meet the president's goals. the cbo says there are other programs that if cut or trimmed would get more bang for the government's buck. one democrat strategist close to the administration expressed surprise it is not reducing the benchmarks for medicare advantage payments the cbo says that alone would save nearly $400 billion over the next decade. the cbo found the biggest dollar impact up to $871 billion would come from capping federal

spending on medicaid, the health program for low income americans. more details throughout the day today. becky? >> i think a lot of the headlines and the takeaways are the pay fors, how you pay for all of these things, higher taxes on billionaires being brought up and the whole idea of raising the capital gains tax too. that would be a big issue. so far, a lot of talk, but the expectation is this is more politics than actual budget because they know that the house is not going to take it. >> of course and, you know, perhaps even some more moderate members of the senate would not get on board with some of these proposals they're simply reprisals of many of the campaign platform positions that president biden, you know, ran on and then has tried to incorporate in various bills over the last two years and many of those have gotten left on the cutting room floor these are simply reprisals of a lot of the policies and there is an expectation this could serve as the basis for a 2024

re-election platform and white house officials that i speak to say it doesn't necessarily matter that, you know, these won't get across the finish line it is more about the fight and what they're proposing out of the starting gate knowing that essentially, it is going to be months and it is going to be a much different product that comes out the other side >> i've heard people say that this is what the president would do if he had all of congress and was able to pass these things, but until a couple of months ago, he did have all of congress and this wasn't passed. >> well, he did have, you know, simple majorities in the senate. but many of these proposals would need 60 votes in the senate to get across the finish line unless you use reconciliation we know that in prior years it was the two moderate democrats who were the thorn in the president's side as he tried to negotiate some of these proposals. so, you know, even with what you might call technically a majority, it didn't work in the president's favor that way >> yeah, as you mentioned some of the moderates not in favor of some of the more extreme issues. kayla, thank you we'll be watching through the

day. >> sure. republicans are taking a page from president trump's playbook they have been meeting with our next guest about his ideas for paying down u.s. debt, rebalancing the budget joining us now, russ volk, director of the office of management and budget under president trump the first couple of years and helped develop the former president's budget plan russ, good to have you on. and, you know, we talk about how long interest rates stayed low so, policymakers haven't been in this type of situation in a while, with rates heading higher isn't that something we might need to get a little bit concerned about, given the size of what our interest payments are going to be, if rates do go up for the next ten years? don't we -- this is front and center and we -- if we're whistling past the graveyard right now, we're going to have some serious problem bes >> no question we saw that with more evidence of that as the ten-year went up over the last 24 hours

and, you know, people said in congress, when we were sending out budgets that had more presidential savings and cuts than any president in history, they were saying we have low interest rates, they'll last as far as the eye can that's a reality that the biden administration is not seeing and they're going to put forward a budget today with -- that hopefully assumes real interest rates, more realistic, and they're going to not deal with the fiscal situation that our country is facing. and i think all of the deficit reduction, things they're putting out, is to hide the fact they're facing $20 trillion in deficits and their plan is to talk about insulin and put out $3 trillion in tax increases that are not going anywhere when we're going to have a debate on the debt limit about spending and how to get control of spending and i think that is how this administration wants to play it, they want to have a class warfare argument about bad proposals that tax unrealized gains. they can try to have that.

they can try to draw republicans into the medicare fight, one more time. i don't think they will take that ait this is going to be a debate about the bureaucracy, about spending cuts to government that is aimed at the american people and saves vasts amount of money over the past ten years. >> we had speaker mccarthy on -- we had him on monday he pointed out the total interest expense we had, in history, $9 trillion, and that on the next decade it is going to be $10.5 trillion we're going to spend -- more interest rate expense in the next ten years than we had in, i guess, since, like, 1940 or so that's an issue. you used a number there, i tried to come up with what the total debt will be given the spending that we have announced in the last two years what did you say you said $10 trillion. >> they're facing about $20 trillion in additional deficits

over the next ten years. if you look at cbo's baseline. they may have a different baseline themselves when they come out today that's the order of magnitude. that's what you're looking at, adding to the national debt over the next ten-year period and our point is we got to start somewhere. we have to start making cuts to spending and we have got to do it where there has been a total unseriousness on both parties' part to tackle any type of spending restraint. >> the world, if you want to be really simple, probably not true, because republicans like to spend too but as simple as republicans would like to cut spending, and to deal with deficit or debt problems, democrats would like to raise taxes and keep spending as much as they can. it is not that simple. republicans, you know, neither party can really, you know, hold their head high in terms of being fiscally responsible, i

don't think. but do you see any inclination in the biden administration to cut anything in terms of spending they got more to do right now. they got one thing done in the first year they moved right on to the next thing. then theycouldn't do the build back better to the size they wanted, they did something called the inflation reduction act, but they kept layering on more and more and they would be doing more if they won the house right now. they would be proposing more spending >> no question i love your chart that showed that their total spending kept going up when -- notwithstanding all of their arguments about the trump administration i think republicans have largely attempted to prioritize other things more than spending reduction, and what i'm trying to give them is a path forward that makes progress by going after the bureaucracy that their own voters hate as opposed to going after social security and medicare and largely they are taking that advice and that's one of the reasons why the biden administration is trying to put forward another tax and spend

proposal as it pertains to medicare to be able to draw them into the field but, here's the thing. there is going to be a debt limit. all of this is largely fake theater with regard to the president's budget rollout today. but there is going to be a very real leverage point that forces republicans and democrats to consider spending and i think the only way they're going to get a debt limit increase out of the house is to go at a 20% reduction to discretionary spending, nondefense discretionary spending, go at pre-covi bureaucracies that are so wasteful -- >> we don't have -- like you said, there is defense and then there is discretionary -- stuff you can't cut, obviously, interest expense there is not that much left. what could we find bipartisan support to cut nothing, probably. but if it is partisan, what would you cut? >> well, look, the way you

approach the debt limit, there is nothing that is going to get democrats to support a spending cut, nothing except for a debt limit increase this is all about leverage politics what do the democrats want and need they need a debt limit increase. what did the democrats want and need, spending cuts. they have to swallow cuts to the burea bureaucracy, the woke and weaponized apparatus to be able to govern with a debt limit increase heading into an election year. that is the reality that joe biden faces. and in looking at it from the standpoint of would they accept cuts to the department of crt or the department of hhs, those are the types of things that are now on the table for no other reason the house is in control of republican hands and there a debt limit that joe biden desperately needs and secretary yellen is at some point going to go into the oval office and say, president biden, you're going to cut a deal and it is going to be soon. >> what is best we could hope for in terms of debt to gdp over the next five years?

it hasn't been this bad since after world war ii or something. what is the number now, what is the best case scenario where we could get it, is it going to go up from here what, 130 now, what is the actual number, russ? >> we're in the 120s now we need to get that back down below 100%, 100% -- >> we're not going to do that, with interest rates going up, are we >> we're certainly not going to do it if we have the same strategic considerations that we have had and just focusing on stuff that won't be done my view is that we have to get back to talking about balanced budgets. we can do that by focusing on the easiest to cut, then the next easiest, and then you start to get to harder, much longer down the road, but you re-established this notion of balancing the budget in the same way that families do across -- >> why not get elon musk and jeff bezos to pay for balancing the budget or part of it you know what i'm saying why not raise some taxes on people that have, in certain

people's view, too much money? why not raise taxes to close the gap? it can't be all spending, can it >> i don't look at it from the standpoint of i'm taking everything off the table if they put forward proposals that made sense. what they have put forward, i don't think actually makes sense of taxing unrealized gains what are you going to do, tax unrealize d losses th as a general matter, this is negotiation. i think there are things that republicans will have to accept down the road. but they have to come to the table and negotiate and they have not been willing to do that historically revenues are right where they have been, little bit higher, quite frankly, and the issue is spending and that's where we need a bipartisan consensus or at least a one-party consensus to be able to go after it and i'm trying to give them ideas on how to ensure that their voters are excited because they see the spending and they

hate the spending in their real life >> okay. so going through life with the last name called vought. in this day and age, that's interesting. russ vought. >> get out the -- >> no, get in the vought get it back in here. russ -- >> get out the vote. >> oh, get out the vote, for the republicans. >> get out the vote, everybody should vote. >> oh, i know, okay. all right. thanks, russ when you see what everybody is doing, they're implying get out and vote democrat. most of the time most of the time. >> no, it is not when you say get out and vote, it means everybody should -- >> don't vote for republicans. >> coming up on the other side, wharton professor jeremy siegel will join us his thoughts on jay powell's testimony and the market move. before we head to a break, a check on the markets, take a look, the dow off 16 points, nasdaq down 65 points, the s&p

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welcome back to "squawk box. making headlines this hour, we got a lot. senator mitch mcconnell has been hospitalized following a fall at

a hotel in washington. attending a private dinner when he tripped there are no further details on his condition as of now. the ceo of norfolk southern alan shaw appearing before a senate panel today he will tell lawmakers he's deeply sorry for last month's derailment that spilled toxic chemicals in ohio and the company will, quote, clean the site thoroughly and with urgency. and legalizing betting on high profile scripted matches? of course they're scripted wwe working with accounting firm ian white to secure the match scripts. we'll see if that's even possible and hopefully convincing to regulators there is no chance of results leaking to the public in advance. >> make the biggest threat is they're admitting to all their fans it is scripted. >> oh, they have known that the whole time >> not all of them my son is not convinced. >> well --

>> bursting a bubble here. to dom chu with a look at this morning's premarket movers what are you watching in. >> when i was your son's age, i didn't think it was scripted either but like the tooth fairy and other things, i came around. credit suisse right now, they can't seem to find a bottom just yet. those u.s. listed shares you see here are down roughly 4.5%, $2.77, that's 5% nearly on around 400,000 shares of volume. they already lost around 60% of their value over the last year the embattled swiss lender announced today it is going to delay the release of its annual report in response to a late call from the securities and exchange commission overnight. according to credit suisse, the s.e.c. is looking at revisions to previously released financial statements in 2019 and 2020 as well as some of the policies, procedures, protocols related to its disclosures. so credit suisse shares down 4.5%, not being helped by that news other shares to watch, uber technologies, which are up

nearly 2% right now, just around 10,000 shares of volume. the company is getting some help from a bloomberg report saying it is looking to potentially spin off its freight logistics unit that's according to people familiar with the matter the move reportedly comes as uber looks to hone in on its core businesses of food delivery and ride sharing so those shares up 1.8%. and ge down fractionally right now on very thin trading volume. ge is going to look a lot different in the coming months and years. the industrial giant is in the process of transitioning into three different companies. it is holding its investor day today. ge is reiterating its forecast and here's what ceo larry culp said about guidance just this past hour right here on "squawk box. >> we'll have high single digit organic growth we'll more than double our earnings to be somewhere between 3.4 and $3.2 billion this year,

up flnice on an adjusted basis versus where we were last year with healthcare. in terms of the financial performance, we feel very good. >> in rally mode over the course of the last several months nice move higher in 22%, just over the course of the last 12 months back over to you. >> even bigger gains over the last couple of months. >> yeah, absolutely. >> dom, thank you. good to see you. when we come back, wharton's jeremy siegel on the fed, the markets and where investors should be putting money to work. take a look at the futures we have been bouncing around the flat line. right now the dow is back in negative territory, off by about 17 points. s&p futures down by about 11 the nasdaq down by 65. prescription weight loss drugs are on the rise. are they the holy grail? jon fortt brings us both sides of the argument in this week's "on the other hand" segment. we'll be right back. time now for today's aflac trivia question.

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investors are clearly not happy with what they heard from fed chair jay powell this week amid growing expectations that the fed funds rate may hit 6% this year. steve liesman joins us right now with more on this, and after you take everything he said this week, what do you walk away with, steve? >> well, i have to count just hold on one second, i'll show you two days of damage in the market here. testimony from fed chair coming to an end with damage in both stocks and bond markets, and a firm belief the fed will do considerably more than thought before jay powell sat down there before congress. becky asked for it

s&p down 1.4% over the two-day period beginning at -- we're counting from 9:59 a.m. before he started speaking. two-year yield raising by 15 basis points the ten-year up by 3 more inversion there and the terminal rate, the big mover right there, that's the october contract up by nearly 20 basis points to near, you know, closer to 6% than 5% now 5.65% by october a lot of charts look like this two-year yield here. shot straight up when powell's remarks came out and came off a bit but maintained most of the change despite somewhat more dovish comments yesterday. >> we have not made any decision about the march meeting, we're not going to do that until we see the additional data. we're not on a preset path and we will be guided by the incoming data and evolving outlook. >> that had little effect on the market and the probability of a point hike remains elevated. 68%. it was 23% at 9:59 a.m. on

tuesday morning before powell spoke. there has been some data suggesting some loosening in the labor market the fed's beige book described it as tight, wage pressure eased off somewhat home base, a software hr company, their data showed the lowest level of wage inflation since 2021 i can bring you at this hour the challenger, gray christmas job cuts report, they're saying u.s. employers announced 77,000 job cuts in february that brings the two-month total to 180,000, the worst february and the worst february and january since 2009 as you know, in this market, you can't go from job cuts to weak payroll growth because that equation has not been working recently so far it looks like folks who lose their job are getting them so far >> all right, steve. joe brought up a very good point this morning he did >> this joe? >> it happens. >> what's that

>> this morning he brought up the idea that the fed is still data dependent, powell doesn't know, we think, any of the data we're going to be getting later this week or next week, when it comes to the jobs report, when it comes to inflation. could he change his mind again if you're watching closely it does look like back and forth and back and forth >> he could. he could and, you know, i have long also learned to look for the great wisdom in joe's comments sometimes they're evident and sometimes they're not, right >> needle in a haystack. >> but there is often -- >> there is a lot up against the wall if you look really closely, you might find something. >> yeah. but, here's the thing, right so i think what happened, becky, is the way i look at it is the default position moved, right? i've been thinking hard about this, i don't have a really great answer is the default position that it comes in, let's say the data comes in at expectations, is

that enough to do 50 and i think it is. for example, that number comes in tomorrow, in the 200, 225 area, i think that propels 50. if -- unless there is a big weakness, for example, in next week's cpi report, i think that's enough to do 50 my take -- >> what do you think the -- what do you think the market thinks is happening next week i think the market for some reason still is in some kind of 25 range, what i don't think makes sense. >> i have -- i have a harder time speaking for the stock market, which is always difficult to figure out what they're paying attention to and what they're not i think if i look at the fixed income market, i look at that -- that two-bar chart tells the story of where the market believes that the default position is right now. and that's that 68% probability of 50. it tells you there is this odds on bet right now and i can actually give you a little bit more data here, which is --

>> that chart, look how great they are in the back >> we got jeremy siegel as well. do you want to weigh in and play in this interview, jeremy siegel is here, professor emeritus of finance at university of pennsylvania's wharton school of business i'll ask you the question i was asking steve, what is your expectation? are you at 50/50 or 25 for next week >> well, first let me say that i think the fed policy is very misguided. let me tell you why. this month is the third anniversary of the covid crisis, march 2020 over that period wages have gone up less than inflation it is hard to argue the wages are causing inflation when they have gone up less than inflation. by the way, through history, wages usually go up 1% to 2% a year above inflation so workers are way behind where they normally are over the last

three years. but more importantly, if jay powell himself has said there is a structural shift downward in the labor supply, well, listen, economics 101 says if there is a reduction in supply, we have to increase the real wage to clear the market i mean, it is not the job of the fed to offset a supply side shift. they control aggregate demand. so, i think their focus on how tight is the labor market suddenly a maniacal type of focus is the wrong way to go about it look what happened to the prices >> there is what you want the fed to do, versus the question i would be asking, which is what you think the fed will do and it sounds like you think the fed will go 50 points and maybe you're scared they will and that's why you think that's the wrong decision >> i definitely think that that is the wrong decision.

i agree with -- i basically agree with what steve said if it is north of 200, don't forget, we have to look at the wage and there is that cpi, which we have stressed is such a terribly backward-looking index, you know, that now he's excluded rent as well as food as well as energy the so-called mini core he's gotten to now is 20% of gdp that he's actually looking at look at the on the ground inflation indicator. commodity prices are making new lows across the board. freight, shipping prices, making new lows what is going to happen to the housing market mortgage rate is back to 7, 7.25%, almost 100 basis points increase in six weeks. the housing index down six months in a row. is he looking at those none of those are in the cpi index, not yet and won't be, for three, four,

five months. >> hang tight, steve you want to react to that? >> yeah, professor, i want to get your take on this, which is i understand what you're saying, that you have this supply problem, let the wage level reach a new equilibrium relative to the supply of labor the fed's argument, i would love for you to comment on this, i don't know which one is right here, your labor supply is going to be fixed now and they have to bring demand in the economy down to the level of supply of labor. otherwise you have this constantly rise ing wage gains that will end up in inflation. is that not right? >> well, i don't understand why they say it is fixed it means that higher wages are not going to induce people into the labor market isn't that part of economics 101, if you raise the wage, you'll encourage people to work? you'll raise the participation rate you'll raise the effort rate

to say that, you know, the supply of labor is absolutely fixed and not subject to any incentives at all i think flies in the face of reality firms raise the pay to get the workers that they need if the economy -- if the real wage is too low, then you have to raise that real wage. yes, that will mean a point or two higher on service inflation. i'm not going to deny that he can -- the labor market, but is it worth $2 million, 2.5 million unemployed to keep wages down below inflation after they have been below inflation for three years? >> professor, you -- that's a really troubling thought, that you're making. and you may have seen judy shelton yesterday. maybe you didn't i can't believe there is people that don't watch every day, but if we were to try to tackle a supply side problem with something that is not going to work by hurting aggregate

demand, if we were to deliberately raise the unemployment rate and put people out of work for something that is not going to solve the problem, that's a tragedy. and i can't believe that someone -- i can't believe someone as smart as jay powell and the rest of the people on the fed haven't considered what you're saying and just they're left with all they've got, really, and they've got to do it and they've thought about that side of things, that would be horrible if they're so wrong about this being a remedy that they hurt the economy for something that is not even going to work. they must know better than that. they must know better. >> joe, they swing from inflation was transient, no problem, when it was a real problem, in 2021 and oh, my god, i'm so wrong, to now i see inflation everywhere and looking for absolutely everywhere and cases where it is not going to help your fundamental situation. i think it is purely an

overreaction on the underside trying to make up for a -- a drastic underreaction that the fed essentially did in the last two and a half years before recently >> that's cold >> i think it is a swing listen, you go through history it is a pendulum that swings from one extreme to the other, and it looks like the fed has done that. and to my opinion, i agree exactly, you're not going to fix that supply side problem by putting 2.5 million people out of work. >> okay. we got to jump professor, always nice to see you. we'll see what happens next week coming up, are weight loss drugs the magical solution we have been waiting for? do you look worse when you get off of these things? i'm afraid to do it. i don't want to look worse jon fortt joins us next. get the best of "squawk box" in our daily podcast.

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the drugs that have been developed for diabetes are poised to go mainstream for weight loss as the company behind weight watchers this week announced that it is buying a

company that helps people get prescriptions. so, are these drugs the bright future of weight loss and the weight loss business or is this another unhealthy fad? jon fortt is here to weigh in. so to speak. >> becky, we say that every time, but this time, wait for it, it's a pun, double pun this is an unhealthy fad, not the future of the weight loss business it kicked into higher gear this week when ww international, the weight watchers parent, announced it is buying weekend health, a company whose sequence program helps members access dietitians, fitness coaches and, yes, drugs for weight loss so what is the problem on the surface, nothing. diabetes drugs have spiked in popularity over the past few months as some doctors begin prescribing them for obesity one of the main methods the drugs use to work is suppressing appetite so far without the dangerous side effects that fen-phen showed 30 years ago. but, sequence membership costs 99 bucks a month, compared to

$23 for weight watchers, and that doesn't include the cost of the drugs, which run about $900 a month without insurance. it is like plastic surgery in the form of an injection, except you have to keep taking the drugs to maintain the results for a culture that addicted to image, these drugs are like crack. they're going to compound the mental health crisis and create a new type of biological moral hazard businesses should be aware. >> obesity is a crisis on its own, jon if science can help people, why shouldn't businesses make this product available? >> yeah, well, on the other hand, these drugs are the future of the weight loss business, part of it yes, there are dangers, they can be abused. does that mean we shouldn't have oxycontin, zxanax or ritalin the company's brand has roots in community, nutrition and exercise but, look, they didn't have a choice the most profitable potential members in this next generation were going to be lured by the trending methods

the obesity drugs. if weight watchers didn't have a way to access them, the brand would slide into irrelevance the competition was already on the atotack noom launched noom clinical. is cost a problem, yes, it is. working class families, especially those without great insurance benefits will have a hard time getting access to a potentially valuable component of the healthy weight loss regiment but that's not new access to fresh produce and quality healthcare is already a problem for too many americans and if businesses can help more people achieve a healthy weight with this innovation, it is a step in the right direction. >> here's my thought these drugs come with risks. we have talked with dr. scott gottlieb about some of them. we don't know what they can cause, but the risks are outweighed by the risks of being very obese, that comes with a lot of risks too the question is should you be losing this -- should you be losing this to five or ten

pounds to fit into an outfit for a big event you're going to or should this be to people who, yeah, the risks far outweigh because they really need to lose a lot of weight? >> i think there is also a concern. i have a concern, if you got to stay on these for a long period of time, that means there is going to be a lot of supply out there for people to give to somebody, it becomes currency in a way. is there a way to monitor that, i don't know. >> recreational use of other drugs. >> google is -- you don't get a really painful injection unless you're sick and you need it. >> it is not a painful injection, though. i've never done it, but i know people who have. >> it is a needle. >> but people say -- >> botox isn't either? you have needles in your forehead >> i had diabetes when i was pregnant with one of my pregnancies and you get really used to the needles and stuff. >> it is the argument about elective surgery a lot of people have that. i would think surgery should be confined to fixing something that -- >> this isn't surgery. >> i'm not saying it is.

i'm saying you're doing it for cosmetic -- if you're not obese -- it is like, same with oxycontin. if you're not have really terrible some type of cancer pain or back pain or something, if you just have some little pain, that's not oxycontin justified, is it >> this is like getting -- >> this is -- what is ozempic? >> teenagers -- >> have you heard of ozempic face >> i've heard of it. >> sag or something? >> it is like stretch marks, but for your face, right >> i swear i never took ozempic, but, i mean, i'm already -- >> you lose the fat that is built in, and it hollows your face out, you look like a ghost. clearly none of us have that. >> what is your answer then? >> that's right. you don't do that. okay >> well, explore the ideas and try to -- i don't know >> coming up -- >> concerns. >> when we come back, tensions between the u.s. and china

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that's why i do what i do. that and the paycheck. president biden's budget release today expected to include one of the nation's largest peacetime defense budgets. china will also boost defense spending by 7.2%

i want to bring in retired navy admiral james stavridis. help us understand these numbers. they obviously are massive and huge are they necessary >> they are necessary. and let's keep it in perspective. the entirety of this budget uncovers global activity it is as a percentage of gdp, it's down in the 3% range. think of it as an insurance policy for the nation. and when you look out there at the world and you look at china on the march, which has, for example, a military fleet of 350 ships compared to our 290 ships, you see kchina moving, challengs

in russia, iran moving toward nuclear weapon, king jung ung. i think it's about right for the needs of the nation. >> you often here of the remarkable spending. are we spending the money properly >> i think we need to dial the real stat away from legacy system, the big, heavy ones. there are some needed items interest, notably the joint strike fighter but that real stat has got to be dialing toward offensive cyber tools, toward hyper sonic missiles, from unmanned missiles, to space and satellite to undersea drones at the bottom of the ocean to

protect undersea cables. and the admiral will say you've got to have a capable global fleet. when you put those pieces together, that's where it needs to go. >> a separate national security issue, though, where does debt fit into that to you here we are having a massive debate about our deficits here in the u.s., whether we need to have a tighter budget situation and what kind of national security threat that presents d d >> it is a national security concern, the same way the environment can present a national security concern. but i'll go back to where we started the conversation and say if you look at the u.s. budget all together, the vast majority of it is servicing the national debt but it's also entitlement programs the national defense piece to this is not overly significant again, when you look at what it

brings, it provides stability globally over time that's what enables our economy -- i think it's a pretty good buy >> if i, though, said to you, you got to cut 10% of the budget and find some efficiencies, could you? most business leaders are asked to do that regularly >> any business can do that. and in the case of the military, one of the big components of budget, perhaps the biggest just like it is in terms of costs for many private firms will be personnel cost so if you were going to get into cutting, you'd probably look at reducing some of these magnificent volunteers and moving them out of the services. and, oh, by the way, we're having challenges recruiting right now so possibly cost savings on the personnel side. on the big ticket items, you could look at some of the heavy equipment but i keep coming back to it, andrew, when you put it

all together, pulling one piece of it is is a prescription for real danger and risk >> we're going to have to continue this conversation, admiral, very, very soon because it's not one that's going away thank you. >> thank you >> coming up, former fed chair and more with texas senator ted cruz stay tuned you're watching "squawk box" this is cnbc at's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

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good morning investors make waking up to a new world that likely features hyper for longer interest rates. the chair hitting that theme for the second time this week. what it means for your portfolio with joe moglia. and the president is set to call for tax increases for the nation's wealthiest. and we'll speak to texas senator

at the time cruz the final hour of identify sq "squawk box" starts right now. good morning and welcome back to "squawk box" here. i'm joe kernen along with becky quick and andrew ross sorkin now we're in red again, no green, no green to be seen down about 12 points now on the s&p. just hanging in there still. we talked about that earlier, just under 4000. nasdaq taking it on the chin a bit this morning, down about 63 points check out treasury yield t 10-year has stayed but that is a big inversion. 5.05 what is that, becky? 103. yeah, that's still the biggest

since 1981 between the 2 and 10-year. >> president biden is set to unveil his new budget plan today, expected to call for cutting the nation's deficit by nearly $3 trillion over the next decade part of that biden will call for a 25% minimum tax on billionaires and a near doubling of the capital gains tax republicans are expected to oppose biden's budget idea credit suisse getting hit after saying it will delay its annual report in a conversation with the sec, comment about previously disclosed cash flow statements and their revisions. they're saying it has nothing to do with this year's report, though we'll see about that meantime, sources telling usth world wrestling entertainment group is now in talk with gambling regulators in colorado and michigan to legalize betting

on high-profile matches. these matches are scripted performances so you're betting basically on the script. sources said the wwe is working with an accounting giant to secure match results in hopes it can convince regulators there's no chance of results leaking to the public you have to imagine the actors or wrestlers or others on the team have to know what's happening. >> that has to be in place before -- >> somebody decided that >> how is that even possible >> in your closing bets you feel like you could know what the line in vegas is and then change the ending >> what about there's a writer's room in the world of wrestling honestly, it's like producing a drama. you have a room of people making up what's supposed tohappen. >> it's more of a comedy, isn't

it >> sure but there's more than half a dozen peeling -- seems like it might be a bad idea. nobody knows that. >> he's just sitting here. >> i'm not even here they're going to be taking bets on everything, everything. they're going to take bets on which one of the three of you ask the best kwi kwes over the span of your three hours >> could there be no winner? >> the concern i have with all this is i think it's ripe for, these are going to be significant issues with regard to that. and across all over, and -- >> do you worry about that in college? >> yes, i do >> even about the most pristine things you worry about an official calls a foul, doesn't call a foul.

two points with make all the difference in the world. >> the money is so big and so significant, people are going to take advantage of that now, that's not right and it's not moral but money is money and people are going to operate in a way that's in their best interest and grieve is going to -- >> we were talking about this this morning if you're going to figure out to could vince an entire team to throw a world series are you going to tell me that all the leagues all had money wrapped up in this, it's a different ball of wax. >> it's easy in any sport for an official to make a call at a particular point in the game i'm sure there are times in rome when one of the gladiators said he would throw his match or his event in an effort to -- >> well, i don't know about

that >> i know for a fact. >> if you haven't figured it out already, joe moogly is here, the former coach of coastal carolina university, the head coach there of the football team he's got a lot of thoughts on what's been happening, not only with sports, with gambling but, joe, i think we wanted to start talking about what we have changed our mind this week based on what jay powell said. has the entire outlook changed are they back on for a potential 50 basis points? what's it mean for the market and investors? >> i think powell has gone out of his way to be as clear as possible that there is a commitment to 2% in terms of inflation. you're not going to get there is you can't allow inflation to become indem nick our system i think it very, very clear and

they're going to look at the beta looks at the data and there may be an increased possibility that there may be 50 basis points the problem i have with the inindividual investors there is no question the fed is tightening they made a mistake as far as transitory a year ago. they're going to get us where we need to, to 4,200. but the original investors now, peacekeeper the other side is getting involved with the front end. curve. i think we confused it a little bit, saying this is going to change, that is going to change. the fed is going to continue to tighten until they're satisfied. >> individual investors, if they're buying technology, we

have seen some pretty big run-ups since the start of january. is that a foom's errand if the feds raise rate or have we seen enough of a reset in terms of val situations leading the way or does the big money behind it pu you ifily the fed is tightening, you got mortgage rates going up there's still the possibility that we've got more risk on the down side than on the up side. i think where the individual investor is doing well and institutional doing well, it's the bar bell theory. it allows them to take aily little more risk somewhere else, on the other side with regards

to equity. >> what are individual -- is that a play that happened just at the beginning of the year is it just since january this play has come back in? >> once you saw the two-year creep up and up and up, there was a time from which we said from now on you can have asset allocation i could have started at 3%, started at 4% but there is no question where it has not been a real great opportunity with fixed outcome, it is pretty much risk free to have a nice return while you choose to be on the sideline or more aggressive with regard to the equity line. >> are there individual investors still sitting on the sideline because they're confused by this how much dachlk was done by the drops in the averages last year? >> i think a tremendous amount of dance of you can't panic

about in a if the were buying with the significance of the drops we had fwheer along the low, i think discretion is the better part of valor. the fed and you've offset your risk by what you're doing at the front end of the yield surf. we got inflation numbers that are coming and as you mentioned, jay powell has -- markets are under pressure because he's raising rates. >> i'm going to say no but there would be a caveat with that. i say no because we could get an out-of-line number good or bad

anyone if could be more numbers come can go dwk that's a big surprise but we can't overdo it because one number does not determine ultimately who is going to -- >> are you surprised s&p is hanging in there >> yeah, i am a little bit >> is it like people think soon erp or later there's going fob something good happen and they want to be there if you're going to wait thinking you're going to time a 5% further down draft or a 10% further -- that's hard to buy actcy. it seems like they no sooner or later think what if they never turn, what if i'm in one of those five-year period where stock doesn't perform. >> thumbun, if.

>> this about the premiere if i can afford to take some risk over here i can do that. whereas if i don't have anyplace to go, i'm either going to be in or out of the market you shouldn't be 100% in, you should be 100% out discretion is the better part of valor. be thoughtful in terms of how much risk you want to take >> can we talk sports again back to the ncaa? >> gambling? >> no, the ncaa and the changes that are taking place there. the former governor of massachusetts is coming in for somebody still is very involved with what's happening in football in the ncaa. what happened? >> i think charlie baker being a

politician, i think the real question how much -- two years ago when mark eckert, which is the most significant thing to happen in the try of college sports and the ncaa wasn't anywhere to begin with they lost a lot of availability. >> to what expent and i was reading with the night condition and they said back it beforecast will walk away and have an independent -- >> break away from the nalk knack? >> break away from the ncaa. there is so much money in college football playoffs, which is going to go now from six to 12 teams, i think that generates about $500 million two, three, four, five years from now, that's going to be $2 billion. we talked about the tv revenue

the big ten negotiated this year of team in the big ten, whether you were rutgers or ohio state got $3 million, $4 million. >> wait a minute rutgers doesn't get the same has as ohio state. >> they do >> what! oh my god! >> so i believe that power fiech football does not need the ncaa. and i think but this needs maybe a little leader sthiep from the ncaa to help get that done and baker as a poll signatures he knows house of representatives to compromise and good and take. if you so this is going to happen so if he recognizes it's going to happen, he could step up and say i really believe this is something that should happen, i'd like to see it happen, i

want to help is happen that gets rid of other poob and all the rest of college sports that maybe gives him more credibility and when he has if when you watch the money, it mauks sense these deals are where it going to go >> joe, thank you so much. good to you. coming up, a long-running battle over an sccheck out the shares of etsy getting a double down grade to underperform from jefferies. stay tuned, you've watching squawk p "squawk box" on cnbc.

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will appear before a panel and plans to tell them he is really story for last month's derail meant that spilled chemicals in ohio according to nbc news, he will tell the senator they will clean the site safely. he didn't go to a town hall in east palestine none of the officials did. i'm sure that's some of the frustration. >> every time we say alan shaw, he's a major technician at smith barney when i was there for years and years. well known alan shaw, just different guy. apple is reshuffling management according to a bloomberg report. it the first time india becomes its own sales region at apple and represents a surge in demand in that country.

meantime we are watching shares of uber this morning after a bloomberg report saying the company weighing a potential spinoff of its freight logistic unit they say it could sell the unit but an ipo is considered a better option. when we come back, break being economic data in the form of initial jobless claims but next, texas senator ted cruz will be sounding off and will talk about a battle that is brewing at the fcc stay tuned you're watching "squawk box" and this is cnbc w i sleep with insp. inspire? inspire is a sleep apnea treatment that works inside my body with just the click of this button. a button? no mask? no hose? just sleep. yeah but you need the hose, you need the air, you need the whoooooosh... inspire. sleep apnea innovation. learn more, and view important safety information

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welcome back to "squawk box" as you saw there our nice logo

futures down about 44 and change on the dow s&p down 14 as nasdaq, down 68 or so. i don't think jay powell is talking today so we're not going to have that we do have a big jobs number, though, which we'll see tomorrow which could change everything. those are pretty muted moves that we're seeing, at least at this point >> new overnight, senate minority lead er mitch mcconnell was hospitalized after he tripped in washington, d.c. at a private dinner the senator fell in 2019 on a patio at his home. that required surgery for a fractured shoulder when we come back, sales force that's big on a.i. for business with a nod to the most famous scientist in the modern era.

we'll explain einstein gpt next. "squawk box" will be next.

welcome back to "squawk box. this morning salesforce is partnering with the organization behind chat to form einstein right now to talk about what clients want from generator a.i. is their board member. it's nice to see you >> chat has become the talk of the town our clients are seeing the value of using regenerative a.i. from sales to marketing to i.t. i think that's why we've seen a tremendous response to einstein

this week. it's really about bringing enterprise grade regenerative a.i. to our clients, whether those are small businesses or the largest companies in the world and doing it in a way that's rooted in business outcomes we're talking about getting back to customers faster and doing it in a way that is trusted and secure with our customers' data. how long is your contract with gpi in there's a question of whether they become a monopoly player in terms of the a.i. models or whether we think that google and orps others will emerge and create competitive products with multiple a.i. services out there? >> einstein is a combination of

our propriety product and in an open ecosystem, we announced a.i. as an initial launch partner this week but weep als announced a $250 million fund investing in other a.i. startups l startups we introduced ineinstein in its original force in 2016, we've seen exponential growth delivering over 200 billion predictions every day. when a client uses a service like this and provides detail to the service in the course of the prompt, if you will, how much of that data then goes back to chat gpt? >> that is exactly the reason why companies don't want their employees using consumer chat

bots for work. it's making sure that their propriety data doesn't get out there into the open for public use. i think that's why so many customers have come to us and why there's been so much excitement and einstein gpt because they've been trusting salesforce for years to keep their information secure >> not just on a consumer grade version does it go back to chat gte, how much of that data gets shared, if you will between clients, not the clients are sharing the information with each other but sharing it with you effectively? >> we keep our customers' data separate we always have for the last 24 years. so we're bringing that in the a.i. space like we have in the last seven years it's a critical part of making sure this is a trusted environment for using regenerative a.i

>> when you think about what this looks like long term, we keep having big conversations about labor. how much labor do you think is going to be needed do you think this increases productivity remarkably -- not just productivity but you need as many people as you needed before or do you say to yourself we had a couple thousand people writing lots of emails and letters to people and now we don't need all those people? >> i think short and medium term you look at how salespeople work today. most of them dread writing sales emails they'd much rather be out there with customers being able to offload those tasks that are more mundane. same as customer service agents. they don't want like reading through hundreds of pages of product documentation. they want to engage with the customer and problem solving in terms of the far horizon and long term, sales force is a big believer in continuing upskilling and reskilling.

we have a community of what we call trail blazers, that's a conference we had this week. and so many of the people, everyone comes, because they want to continually learn. >> i have to ask you to hang on for one second rick santelli has break being economic data. we want to get you those numbers. rick >> yes as you watch the market you see interest rates moving lower, equities moving higher the reason 211,000 on initial jobless claims that's the first time it's been above 200,000 since the 23rd of last year and continuing claims topped 1.7 million the last time they did that was mid december but this actually is the highest level since january. so we're looking at 1,718,000. what's interesting here, andrew, is it equals our mid read but to

find a higher read, you would have to go back to the end of january. these numbers aren't good in a traditional sense. to the standpoint of what's good and bad, it definitely may ease back some of the temptations of the fed, especially after we get tomorrow's data and next week's inflation data becky, andrew, joe, back to you. >> rick, thank you for that. i want to get back to claire we were talking about a.i. and specifically salesforce. this goes to the issue of data and how the data gets used and siloed long term how do you see this playing out? because so much of what chat gtp has done successfully is to boil the ocean of the internet. right now you're talking about

contextually people will have their own data that they'll train off of but whether they're going to need other data to train off of and whether people will pay a licensing fee effectively to do that. >> i think that's the difference between the consumer space as well as versus the enterprise space. in the enterprise, the use cases are well defined in terms of sales, marketing, commerce, service, i.t in some cases we don't even need a large language model you can use a medium language model and get very high precision and accuracy, not spend as much on reducing your carbon footprint and do it in a secure way, that's the future for the enterprise when it comes to a.i >> how worried are you about the accuracy of chat gtp there are still mistakes there and the service as least as it's designed there, maybe it will be designed differently from your service, doesn't necessarily

provide footnotes or a way necessarily to double-check the information. >> we've all seen what's happened in the news in the consumer space where the queries are more open ended versus in the business world it it's very constrained. specific not only to a salesperson but even their industry and we were able to increase the accuracy of the data and output. a.i. is only as valuable as the quality and trust of the database and the data cloud where our customers are putting all that data. otherwise it's the old garbage in, garbage out theory >> what's the final cost >> we not determined the cost yet. >> do you know what the underlying cost of a query is going to be? >> we just heard they were bringing the cost done despite

launching the next generation. there is slightly different pricing from one another and we should see that down as the cost of compute goes down >> claire, thanks for waking up early on the west coast. >> thank you and withdrawing her nomination of the sec, sohn was picked by president biden but her confirmation has been challenged by republicans and some democrats and the sec remains hobbled with only four commissioners instead of five. our next guest was vocal in his opposition joining us is texas senator ted cruz he is a ranking member of the commerce committee and also a member of the foreign relations and joint economic committees. i don't know what your motivation was i wasn't quite as familiar with miss sohn, now that we're

talking about it, senator. i mean, the former president ruffled a lot of feathers with a lot of his tweets but no one said he couldn't be president. actually, some people did say that probably. i'm surprised, though, that the left is surprised that maybe some of these tweets might have raised an eyebrow. here's one she called trump a raggedy white supremacist president who would rather kill everybody than stop killing black people she was going to have a pretty important post were there other twitter -- what was it that you had a problem with was it about just net neutrality >> well, listen, i think her record for the past 30 years has been as a hard left, partisan activist that's who she is. that's the record she had built up she had had lots of tweets and public statements and supported left-wing groups that astonishingly had attacked about half the senators on the commerce committee, including

not only republicans but half the democrats. she funded attacks on them from the left this is someone who is a partisan activist, this is someone who had described, for example, fox news as a threat to the democracy. this is someone who had advocated using government power to deny licenses to stations with which she disagreed, to silence voices she disagreed with, and i think that is profoundly dangerous there's a role in life for partisan advocates on both sides, but for the independent agency that is charged with regulating broadcasters and the internet communications, putting a hard core partisan advocate on there who can silence and sensor anyone she disagrees with, i think that's profoundly dangerous. it was a mistake that the president nominated her. i don't know why he struck with his nomination for 16 months it was clear she didn't have the votes to be confirmed and i think this is a good week for free speech because the president and the white house

acknowledge reality, which is that she was not going to be confirmed and the sextc is not a place to put a hard core partisan it certainly did take a long time i wonder and now a lot of democrats, she's angry at democrats, i guess for not being more vociferous in their support for her, right >> well, that's right. she put out a long statement basically blasting everyone. >> lobbyists, money, dark money and actually she said it's -- the real losers are the country because she can't be in that position was her take on the whole thing. >> well, look, and i understand someone who is a partisan activist on either side. they believe what they believe and that's fine. we have a democracy that's built on debate and free speech and discussion and it's perfectly fine for her to advocate for her view it's a different thing when she

uses that view to -- she's put in a place where she has the power to silence anyone that doesn't agree with her view. and i think that's very dangerous. as you know, i'm deeply concerned about censorship across the board, deeply concerned about big tech censorship and the silencing of views with which they disagree it's why i believe the single most important development was elon musk buying twitter, that the big tech oligarchs did not count on someone coming and spending $44 billion and then releasing the internal communications >> probably a lot of democrats that -- and i don't want to get into a fox news debate, but when you said that she said that fox news was a threat to democracy, how many democrats are out in the audience going, yeah, so in hindsight do you think that

has any more credence than it may have had when she said it? >> well, i don't and, listen, it's fine, if you ever don't like fox news, don't watch it i'm not particularly a fan of msnbc or cnn i think they're both very, very biased but the great thing is i have a channel selector. i can choose what i watch. and what i'm not advocating is using government power to shut down cnn or to shut down msnbc that would be wrong. they have a right to speak and have their opinions. i got to say i miss the days -- when i was first elected to the senate ten years ago, a station like cnn was much more in the middle e i used to go on cnn about once a week you could have reasonable discussions. they didn't agree with me but you could have a reasonable discussion now what happened when donald trump became president for much of the corporate media, they hate him so much that it just broke them they just foam at the mouth and loath him and i got to say, joe, i yearn for the days where

journalists aspire to be journalists. today for much of the corporate media their view is that they are an advocate, a partisan advocate they're no longer trying to report both sides. one of the things i love about "squawk box" just very briefly is we have real substantive conversations that get into details and engage and you guys do a fantastic job of that i wish the rest of the media did as well. >> senator, just i'm curious given the comments you made about partisan activism and the like what your reaction is to all of the emails and other things that have come out in this dominion fox case where it appears -- >> he just asked to it >> but he didn't speak to it you have people who have one view privately and were telling the public something very different. do you agree that's public

activism, too? >> listen, i understand why people think it's fun to read those emails and i suspect if we were reading your emails and jove and becky's that there would be some things that y'all said that would make some scintillating news that's just part of life and part of humanity at the end of the day i'm a big fan of fox news, a big fan of you guys i'm a big fan of any forum that lets you have a real and substantive conversation about the challenges facing this country. the fact that you had some hosts and some executives at fox news that said less-than-nice things about donald trump, i don't know that's all that shocking donald trump is many things but he's obviously a polarizing figure that people have strong sentiments on. >> senator, that's not what we're talking about. we're talking about -- i can remember at the time watching sidney powell and watching giuliani on there and i said if there wasn't something to the

things they're saying, they wouldn't be on fox news saying these things so a whole swath of people in the country ended up really believing a lot of that stuff was true and they ended up at the capitol. it's not just saying mean things about trump. a news organization shouldn't be feeding the flames of something that could end up like that. not deliberately there had to be some type of oversight that would have prevented that, you would think. >> joe, listen, i don't disagree that there were some kooky theories floating around in the immediate wake of the 2020 election and some theories that sounded obviously ridiculous my latest book is entitled "justice corrupted, how the left has weaponized our legal iam le system." chapter six goes into some of

the kooky claims that hugo chavez was hacking into voting machines they didn't make any sense i wish they hadn't been thrown out there. i do think voter fraud is an issue. i wish it was based on the evidence there's evidence now and then that not everything is true and that's true on the right and the left >> i agree with activist journalists. it was positive at one of the greatest institutions we have in journalism that donald trump was so unique that a new type of journalism was necessary that wasn't based on object ivity. it was 2016 i think and ever since then people have taken that ball and run with it on both sides probably not great >> you look at something like barry weis's resignation letter at the the "new york times"

where it is as powerful an indictment of today's corporate journalism as i've ever seen, where she says she talks about how in many ways "the new york times" is governed by twitter and the radical left and they will silence views that are not just right of center but are not on the fringes of the left in a way that, you know, for a paper like "the new york times" that is read by journalists all over the country is deeply harmful. i wish -- i yearn for the days of a tim russert i yearn for the days where you had journalists on stations across the board that wanted to get to the truth but that didn't view their role as being an advocate for their particular point of view. i yearn for the walter cronkites. today you turn on cnn and you have a panel of five experts all five of whom agree that donald trump is the most evil source of everything on the planet and is destroying the universe. well, that's not much of a discussion if you have five

people who are all saying, no, no, no, he's worse than that that is editorializing at that point, that's not actually broadcasting news. >> all right, senator. next time you're on, we'll put on other things to talk about obviously. but we've got the sec and communications and everything else it will be china next time maybe. you got a lot on your plate. anyway, appreciate having you on this morning see you later. >> thanks, joe appreciate it. >> when we come back, jim cramer's first take on the trading day ahead. and a reminder for you, youcan get the bestf idti sa o"squawk our podcast. you can listen any time. we'll be right back. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network.

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>> that would be a lot of people out of work if that doesn't address the issue itself

and i hope that -- i mean, the fed must consider that they're a bunch of smart people. >> i think so. professor segal says some things that should be said. i wish powell would be a little more measured and talk about things that are working. he's setting us up i think also if you're one of these big companies that have raised prices for everything, you got to start listening to what the fed said. maybe you have to cut prices that will be the last thing that will happen but that's got to happen i'm watching what guess on with si si silicon valley bank. there are real cracks now. i think powell has to recognize, wait a second, these cracks could be severe. i don't want to scare anybody. >> do you think 25 -- i guess we can't say. >> depends >> that's pretty interesting what if that is one of the forerunners and one of the, you

know, really big problems that doesn't go away, doesn't get swept up >> yeah. we asked as if those companies aren't well run. we act act as if we work is a $9 billion joke but it's $9 billion. this stuff is real and it's big and we only see the public ones. we're looking at office real estate and crypto. but silicon valley, this is about ipos that didn't occur and investors that are trapped and about executives who went against stock that doesn't exist. so these are real cracks and that number this morning is another crack. so be careful what you wish for, jay powell >> the silver gate thing is so interesting as a bank. it's kind of an old fashioned bank run >> that's a run. that's a run silicon valley bank, much more

nuanced but very, very important. we have no ipos. these company who work at these companies went to sill iicon vae bank and they put their money in three-year notes, seemed like pretty safe stuff. they lost a fortune. >> all right >> these are real cracks this is not like a week ago. these are real cracks. >> right, right. jim, thank you we'll be listening in just a few minutes. "squawk box" will be right back. you choose the largest, 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™.

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our next guest says that since bond yields resumed rising in february, growth stocks have been surprisingly resilient, while value stocks have been struggling i want to bring in dana daria, co-chief investment officer of investment pmc dana, let's just talk about this joe laid this out at the top of the hour the idea that you can actually get something in short-term yields at this point and that makes it much more likely for investors to put money there and then on the opposite end of things, take more risk, and that would be things like technology stocks >> yeah, i think that's exactly right, and thank you for having me, becky.

yeah, i think, you know, it's been so many years now, and we're in the asset management side advising the advisors so many years now of, you know, just running away from fixed income because there was no income to be had there, advisors kind of chasing yield, looking at dividend-paying stocks, but also going out on credit risk, taking longer duration and client portfolios, and it's really flipped, obviously. now that we actually can earn some income on bonds, you're seeing exactly that. you're seeing that kind of movement back into fixed income space for your income needs, and on the other side, interestingly, i think with higher yields, obviously, growth stocks should suffer, because they're longer duration. they have more of their value in their terminal value, so a higher discount rate means they should be worth less, but i think we're seeing exactly what you're saying, which is, i'm getting my income from the fixed income space, so value stocks

become less attractive, and maybe i'm willing to take on the risk of the growth stocks. >> is that a good plan, in your opinion? >> i would caution against that, actually i think, look, at the end of the day, clients in the equity markets need to have a bit of a time horizon anyway, whether it's, at the end of the day, growth or value, your beta is what's really going to drive your experience in the equity market so, if i'm in the equity market and i have something of a longer-term time horizon, i do think i want to look at the rotation to fundamentals and over the long haul, what the evidence says is that price matters, and that my ultimate return is going to, in part, be based on not only just value but quality, these well-known style factors that we've seen surfaced in the academic evidence, suggest that a tilt towards value, a tilt towards quality stocks is going to be better in the long run >> dana, i want to thank you for being with us. i'd love to ask more we're out of time this morning,

but we do appreciate your time >> thank you >> thank you quick final look at the markets. you're going to see the futures this morning, which have been mostly negative through the morning, a little bit higher now, that's happened since the last half hour s&p futures up, the nasdaq futures up a lot riding on the jobs report tomorrow make sure you join us for it right now, we're going to hand things over to "squawk on the street." ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. david faber has the morning off. futures steady here for a second day as the market reprices fed expectations two-year, pretty much anchored at five. jobless claims do come in a touch heavy. our road map is going to begin with the markets tomorrow's jobs number will gain added significance tesla under pressure again, now down