>> 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 double digits for the

week and the u.s. chamber of commerce says it's time to regulate a.i. technology we will begin with the broader markets as both investors and the fed chair look ahead to the jobs number tomorrow >> if -- and i dress that no decision has been made on this -- but if the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes >> that "if," jim, got talked about a lot yesterday. one of the few things that he added that was new in day two. >> i think there are things that are happening right now that are superseding what he is talking about. i think what happened this morning with silicon valley bank and what happened last night with silvergate, much more front and center silvergate is a true run on the bank it was driven by crypto. i'm not sure if they were as forthcoming as they should have. you have a justice department investigation. silicon valley bank is happening now. this is a restructuring, but it has to do with what i think has

to be what the fed is thinking about, which is that silicon valley bank lends to vc-backed companies, principles, founders and employees. why is it illiquid they haven't been able to come public they, at the same time, invested that money in three-year treasuries who would have thought the stock market would be closed it all came together at once and then next thing you know, they had to sell $21 billion of available for sale bonds they had to take a huge hit. but at the same time, $1.8 billion hit i don't want to get too granular, but i'm getting to the idea that they were able to raise the money. general atlantic, by the way, very, very bullish on this, because it's got a long-term great franchise. that's number one. number two that's happening as we speak is this, just, the total break of office loans, office properties, office reets,

so what powell could have easily sate is that we're mindful that wages have gone higher but we've got a very important number coming out friday. we're seeing weakness in the second half of february. the weakness is centered on people who did crypto, but he usually doesn't distinguish that there are weaknesses the weakness is office lending, and there's weakness in vc lending, and these are going to slow the economy down. so, let's be mindful that there are now risks for the first time, but there's obviously still some things that are way too hot. he did not seem to focus on these risks. it's a shame, because i hope he is >> well, we talked about day one where he talked about run risk in crypto. >> right >> itself. and lack of transparency and outright fraud in some cases >> that's silvergate >> right >> plain and simple. i'm sure he had all the data that we have >> sheila bear says, troubl tro

are about lack of security as well as their exposure to crypto >> these companies did a lot of things wrong if the fed hadn't raised rates dramatically if the fed had done very little, we would never even know this stuff. let's be aware that while sheila is right, if you're sitting here at silicon valley bank, again, very good bank, and you have $21 billion, and you're trying to figure out, how do i invest that how about some two-year, four-year, and then next thing you know, they're down a huge amount of money on that, and they have to take a hit. well, i don't know i mean, was that reckless? i don't know what i would have done you going to keep all your money in one-year paper? no >> it reminds me of long-time friend of the network, christian, tweeted yesterday that when you're going to potentially 6 this quickly, the fed needs to be more creative than just raising rates. start thinking about interest on reserves start thinking about your pace

of balance sheet reduction, because you could -- you're trying to impact the broad economy, but you could obviously break something within financial services >> that's where -- this is the first time i've felt this way, for me to come in, and i know that the jobless claims indicate maybe this one softening bi bank of america, great report this morning travel still spend, but everything else is slowing down. i think, yeah, did jay powell know there's going to be -- maybe there are more silicon valley banks signature could put out a note today. i think it's really important, where i want to disagree with sheila sheila is that, to me, silvergate -- when there's justice department involved, that's more crisis this happened very quickly, and i hope that jay powell realizes that this office building situation could happen very quickly. you walk away -- these guys are walking away from leases the way they walked away from car loans

and housing loans in 2007. don't press it >> are you saying pause? >> no, i'm just saying that i wish he would put into context, 50, if the number -- look, we have wage inflation's still the worse. none of this that i'm looking at is going to slow wage inflation. i just think that there's other kinds of cracks that make it so that it would be better to do 25 just because how many other portfolios are being annihilated right now? i don't know how many people were as aggressive as silicon valley bank in putting it a certain way, but the duration was 3.6 years. that's a pretty conservative portfolio. >> yeah. it does sort of bring to mind the question of what tomorrow's number needs to be to say, get, 25 >> we just need to see some stabilization in wages, some job lszs t losses. think about what senator warren said about the two million jobs.

i know companies right now that i could get you up to two million in hires i had jenna on last night. our country is so desperate for people who didn't go to four-year schools who have engineering backgrounds, desperate for these people to tell me two million people who are being laid off wouldn't find some place? it is the true that dutch bros, which is a fast-growing chain of coffee kiosks, is inundated with resumes, whereas, six months, they had no resumes. there are parts of the food chain where it's weakening, but i come back and say, powell need to have some sign that wages are stable and not going up. not as aggressive as what jeremy siegel said today. he was talking about how housing prices have been going down for months, but housing is only down 4% from the peak that's a loss for powell >> it was goldman last night comes in above consensus on cpi. >> i know. >> they're looking for 45 basis points, month-on-month, in large part on used cars and shelter. we may not get back to 20 basis

point until the back half of the year at this point >> i know. and that err is s toward 50. look at it the other way apropos of what you're mentioning, the other things, he said, i've been focused on wage inflation, but i am mindful, jay, listen to me, i am mindful there could be an office problem. i'm mindful that there were things being done against venture -- the equity market being closed, i'm mindful, is beginning to hurt. just mindful and then what we say is, you know what? jay's thought about this i'm not worried. but he's got to give me some mindful. not mindfulness, because that's asking for too much. i was mindful all week for a week when i was fishing. enough with the mindful. i'm, like, done with the mindful. but i do think that it's important that he notice that there's some really bad things happening right now. >> yeah. well said. before we finish out the block this morning, let's turn to tesla really quick shares under pressure again as

we said in the premarket, down double digits since the beginning of march it's adam jonas at morgan stanley who says the cyber truck may be more of a cult car, maybe 50,000 units is all you get. >> i love jonas, and i think that was actually a terrific line if he does -- you want to buy ford hand over fist if this is the case i think ford is safe enough to be having a good quarter, once they can start shipping the battery problem. the major overhang for ford is not the bronco or the f-150 lightning. it's not even the mach-e they did cut, okay, they put through a pretty substantial price decrease that's going to hurt their margins, but the biggest existential worry is, well, sorry, f-150, i got myself a brand-new truck, and if they don't, ford's the one you would think not to buy going into a recession, so to speak, but you would buy if there is no competitor >> right well, as he said, i think, two days ago, the american -- the

u.s. auto consumer needs wheels now more than ever >> well, that's the flip side of the office reet, right well, the office reets have been cracking for months. it feels like now we're at crunchtime, and people are walking away from some leases. that's kind of the behavior that you saw. that's more -- i'm using an '80-'82 paradigm now, more of an s&l paradigm i don't want to go too deep. >> back then, we didn't have the open-ended nature of remote work >> right then you had land being sold as if it had an office building on it now we have office building on it where we want the land. and we have to hope -- i mean, i've been working on -- how many class c buildings would make great apartments then i just said, what am i -- can we at least play this thing out first? >> would you explain it to viewers in that, you know, no cycle exactly matches, but is -- whereas '08 was about housing,

this was more about commercial -- i mean, residential versus commercial. >> let me give you why it's just a -- to mind it. it's new york and san francisco. that's where the overbuild is that was the overbuild. it's like, if we want to extrapolate it to miami, good luck you can't get in if we want to extrapolate it to any of the states that benefitted from the loss of salt, that's one so, it's much, much smaller but it's going to come out seeming very large if a reet busts or a big building wework they're doing a restructuring. the fact that they can get the restructuring shows me it's too early to panic >> right >> some clown's willing to give them money i use the word "clown" because they are idiots. i would not -- i would like to be more reserved i started with ill-advised, suboptimal i'm dropping that when it comes to we work take a breath, save some money,

sell the beach house >> every time we have sternlich or zelle on, you think this is what they were talking about >> i think that they wave flags too early. they gave you a chance to sell it's a little late but remember, these are not big. there are not a lot of silicon valley banks thank god, there are not a lot of the silvergates there's not a lot of office property that's in trouble outside new york and san francisco, but these are things that powell has to recognize he's winning on. and you think, it's -- maybe it's not as important as winning on wage, but he's winning on them he should be mindful that he's winning on some things >> when we come back, the u.s. chamber of commerce trying to curb some enthusiasm on a.i. we'll explain what they said in the past 24 hours. futures, as we said, leaning to the positive side we did get some relief in china's cpi. 1% versus an estimated 1.9%. more "squawk on the street" continues in just a minute each other rock stars? you're a rock star.

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u.s. chamber of commerce has a new report out calling on lawmakers to regulate artificial intelligence, jim, as this is happening way faster than many people expected. >> i don't think they would know how to do it it changes every day when you look at what -- if google couldn't figure it out, it's happened so quickly, if microsoft can't figure it out, what are they going to regulate? i mean, i know the big problem is the h-100 chips will they get to china

i think when we speak of regulate, we're really worried the chinese are going to get what we have, and jensen huang was very plain as day at cnbc.com interview saying, listen, we're not going to let them get it, and we're going to follow the law so, if they want to regulate, what they should be doing is find a way to make it so that third parties don't sell to china. regulating what's done with it, what do they do? it's still freedom of speech >> yeah. cnbc's got a piece up on asml and the netherlands, following the u.s. lead in restricting access of u.s. technology and dutch technology to china, but i'm thinking back to the "60 minutes" piece on sunday where l le lesley stahl talked to open a.i. and they said, maybe we need an faa or regulatory body that continues on domestically to regulate these things. >> well, what are we trying to stop impersonation? are we trying to stop some way that would make it so that you and i could never detect a

military threat? i don't know i mean, these people have to get a little more sophisticated about what they're trying to stop i think that the only real thing that you got -- that you have to worry about, the administration's looking at, which is, don't let these -- the really heavy nvidia chips get into the arms of the chinese nobody else -- i know that david makes fun of me, but there is no a.i. if there isn't nvidia it doesn't work. everything else is like a pc >> to your point, reports today that baidu, in the "journal," is scrambling to train its chat bot ahead of its event on the 16th >> they don't have it unless they stole it. look, they can't -- the biggest worry, and i don't want to put it out there in a way that sounds bad -- toaiwan gets taken over by china, taiwan semi makes the nvidia chips the nvidia chips can no longer be kept from china that's your -- you want to regulate go, i don't know, send the --

create a nine fleet and put it right there. seventh. send every fleet that's the real worry. >> right as for the pace of innovation, we've been talking about whether this is hype or whether this is real eric schmidt, of course, of google fame, talked about how much of this is actually important to watch take a listen. >> i'm used to hype cycles, but this one's real. in the sense that, enormous amounts of money are being raised to implement and build these systems. the sense, to me, is that this moment is a clear demarcation, a before and an after. what we are doing is working on systems that will affect the way people perceive their world, and i think the best thing for america to do is to follow american values, which include robust competition with government funding of basic research and using the innovators, including the folks to my left, to actually deliver on this. >> his point is good

world doesn't necessarily follow u.s. values. >> no. no and i think that when you talk about what's going to be done with this, i like what jennifer said in her book that just came out. there's power, and the people who use it can be bad, in our country, we think we're a good power, but it's quite obvious that if i can make something say something, and you think it's that person, but it isn't, i can cause a lot of havoc but i can also cause a lot of things by lying to get things done we have to figure out -- you want a group of public-private people who opine we can do that who are they backed by >> that's one thing about schmidt in particular is he's got a lot of investments, which our eamon javers has reported on in the past, and it colors his commentary to some degree. >> we also don't want the poorest person in the senate making a judgment, okay, this is good a.i., this is bad a.i it's just -- keep it right now it's military versus nonmilitary.

we don't want -- these things can make amazing weapons and that's what we have to worry about. all the other stuff, we can get worried about. let's just make sure that we found a way to keep, like asml, these chips out of the hands of the chinese. make sure that the chips go to where they said they were going to go and were not bought by the chinese in a third party way that's what we -- that's what we should worry about until we figure out what happens. >> it's amazing how, really, only in a few short weeks, maybe a couple of months, are we starting to frame it in such stark terms, don't you think >> 180 days ago, jensen was telling me it was going to be a problem. i said, will it be used by the good guys? he said, "i'm going to do my best." i did the interview. and it was about -- i thought this revolution. i rushed back, i got it. and it was like -- and then i called him and he said, nobody really believes. don't worry, you'll be okay. i said no, jensen, i think i'm

too out there with this a.i. i don't know >> not anymore we'll get cramer's "mad dash," countdown to the opening bell on a busy thursday as the market gets pback to work no powell hearing today. futures hanging on to some genre now, up a hundred. more "squawk on the street" in a minute welcome to ameriprise. i'm sam morrison. my brother max recommended you. so my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcias, love working with you. because the advice we give is personalized, hey, john reese, jr.

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no, not that one. go this one. go optimizing data. go efficiency. go results. emerson's plantweb digital ecosystem is the brain for smarter, safer and more sustainable performance. go plant go. go boldly. emerson. take a look at futures here. pretty steady. not a lot of data today. we did get claims at 2.11. was looking for 1.95 discussion about whether seasonality is starting to get wrung out of those january and february numbers the big number is tomorrow with nonfarm payrolls opening bell in about six minutes, and don't forget, you can tcusnyim awhe,cah a te,nyer just listen and follow the "squawk on the street: opening bell" podcast.

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as we count down to the opening bell >> piece put out by jeffries today, they had liked etsy, and they thought it was going to go dramatically higher, and then this morning, they hate etsy, and they think it's going dramatically lower the price target of $85. what matters here is that they're saying things slowed a lot of what they say slowed already had happened, and that quarter was regardless being okay but if you dove tail this with the bank of america survey, their institute, and you come back and say, wait a second. what were the things that really slowed in spend? and the answer is, furniture, clothing, home improvement, jewelry. well, there you go that's why you go to etsy. so, while i think etsy is a fantastic company, brooklyn's own, i am concerned that there is a -- that the stock had been going down and now i know why. so, do i want to get in front of a freight train that is etsy i like etsy very much, but there's no -- never get in freight trains there are so many things that

are not a freight train. merck's not a straigfreight tra. >> we talked about it, this time yesterday, it was one of the bigge biggest laggards their argument is that the boost we got from the c.o.l.a. adjustments has run its course >> we know that the unemployment claims were slower there's also, you know, i think that you're going to start seeing that people who had a lot of money in these ipos that didn't happen are finally -- that's the sivb. i didn't think that it would happen this quickly. i kept thinking that there would be deals i mean, here we are, we're in march, still no deals. people must be dying on the vine they were the rich people. we keep saying, tech doesn't matter, but tech is a gigantic part of our economy. this is not like any of the other cycles we have had where tech is -- >> such an engine of growth. >> yeah. and then amazon's saying, listen, you can lend against

your amazon stock for housing. >> does that mean axp's at risk? does it mean luxury's at risk? >> axp's still housing super luxury, no you know, louis vuitton still doing well i think people are waiting for the price -- i was, yesterday, saying some who disagree with my trust a great deal, that maybe it's the end of fashion, but not high fashion i'm told the milan fashion show was greater than ever. but i do think that there is -- something's going on in terms of spending going down. and it's rather rapid. >> someone reminded me yesterday about the lipstick effect, which is that when times get tough, you keep buying the good lipstick, say, for a lady, but you do cut back on other things. >> yes this is -- he always says that and it's all linked to index estee lauder, because of china but they don't have our time

people love make-up and clean skin i just want to be mindful that something like lodging, which had been on fire, for the bank of america survey, it's flat now, larry culp told phil lebeau, don't worry about travel but again, jay, when you're winning, sometimes you're winning. >> there's the opening bell. big board, it's ambipar response, an environmental services provider, celebrating a recent listing via spac. at the nasdaq xiao enterprise, celebrating an ipo >> they are the greatest capitalists of all time, and they're communists it really is incredible. they pick us off like -- i bet you that thing's oversold, it goes up, and everybody's fat and happy. it's in chinese communist company. we're sitting here talking about how we don't want them to have a.i. but we're buying their stock

>> jim, you do mention ge, and they do affirm the guide for the year >> yeah. >> on high single-digit adjusted organic revenue. >> i thought larry was terrific this morning i thought phil was terrific. a sleep engine, as phil will tell you, is in the sweet spot there are going to be areas of the economy that do well, but what you should be focus on, when you see all the things we're talking about, you should focus on campbell's soup look at ge >> yes >> wow i mean, that -- he reaffirmed what we all thought he was going to reaffirm. it shows you the power of the new cyclical in this environment. >> you talked about this last night. you had a big list of names. >> 12 companies that i would have been shorting as all getout 23 years ago that are now about sustainability and decarbonization, and i know there are cynics out there who say, this is all being done to attract esg money or to fight the regulators i come back and say, no. these are the companies that were the biggest abetters of the

carbon creators, and who knows better how to decarbonize than the people who abet the carbon creation these are real companies doing real smart things. don't bet against trane and carrier, which were the only two that were not public during the period you need them to cut greenhouse gas. don't bet against eaton. don't bet against dover. they sold the elevator business in 1998. they're all about lowering the carbon footprint those companies are all really good you could say, caterpillar, wait a second, they're talking about speaking to data and understanding data but these are smart -- they're making smart earth movers. these are real ompanies, and they're doing the best, andthe should be doing the worst, because people, if you looked at them the way they were 20 years ago, they all figured it out >> from industrials, really quickly, to transports sh that's alan shaw of norfolk southern who will be testifying before a committee about east palestine,

but other reports that there have been other unreported incidents that regulators are beginning to probe into. >> when you go over the conference calls of the railroads, there's always this period, probably like about two minutes in, where they talk about safety and your eyes typically glaze over, why? because the safety record is so amazing of our railroads versus the way it used to be. so, this is -- really does fly in the face of norfolk southern, and jim squire's a good ceo, alan somehow, good ceo, but this is very contrary to the way this industry had been going. so, we got to hear what he has to say is what i'm saying. when i communicate back to alan, i think alan does a great job, but the whole history of rails, from when they were first created to now is, every year they're safer. it seems like they've taken a step back. is it because the trains are going too fast if it is, you have to cut numbers. >> the accident ratio has crept up last four years at norfolk.

>> well, longer trains these are the things the rails don't want to hear me say. longer trains and quicker trains may be the problem i mean, i told you in a very nice interview you did with me for our investing club about covering a terrible train wreck, that i was burned with chlorine in my eyes, but many people, because no one can see that it was a train -- you can't -- chlorine, you can't detect and what was incredible was nobody -- it was in the news for one day. but there were so many train wrecks this was 1977. now, we're really pretty good. union pacific, by the way, i know that everyone pilloried lance fritz. go read it his safety record was pretty good and warren buffett, we don't know i would love to hear what this fellow who runs brent northern, what he has to say >> overall market action this week, jim, holding 4k here bespoke points out that in the two days of powell, you had

semis outperform the nas and the nas outperform the s&p >> i've been working on this semi issue for a while you have to believe that perhaps the inventory is finally clear for pcs. now, we had hp just report, and they said, listen, it's not clear. so, you're banking on something really changing there. nvidia's the only one that is really involved with a.i., but texan analog and on have been red-hot. those are auto we see there's a spur in auto. if you break down the semis, you see why you can make a case. >> yeah, on has filled the gap from that tesla worry. >> they had a great quarter. it's almost like, will you please realize that not everyone's as dumb as you think? honestly on semi is a very smart company. these companies all saw a recession coming what they did, because they saw a recession coming because of covid, so they really pivoted, doing a lot of different things, and it's all working and those companies, they look like they're more dangerous than they are

that's the way i would put it. versus, say, the consumer packaged goods that turn out to be a little bit more dangerous because of raw costs the reason why i'm constructive here is because so many raw costs are indeed coming down there's like 11,000 different ingredients that go into all these soft goods, and almost everyone's down. freight costs are down very interesting that uber might be selling -- >> i was just going to uber. >> yeah. >> i know, because you have been fascinated with their freight business from the ipo day >> well, i've spent a lot of time with a freight business we've had -- we are on, who runs the freight business, it's a great business it's a lot like gxo, which is a $6 billion company that spun off xpo. what they do is they just -- they broker in a way -- there's tremendous -- i'm going to say right now. there's tremendous discrimination in the trucking business there are a lot of people who want to be able to drive trucks and have been having a hard time cracking in because of what they would say is discrimination. that's their word.

they brought in a lot of new truck drivers, and they make it so that if you know there's going from minnesota to texas, and then it has to go back empty, no, use uber, and they'll find freight for you it's a great freight-matching system i think it's worth a great deal of money it's not making money now, but we got to watch that because uber's such a smart company. i wish they wouldn't get rid of this, but it doesn't fit their mosaic >> really? three silos, whereas maybe two is better? >> i think everyone wants a piece of this company. i was enthralled i marvelled at the amount of discrimination in trucking and how disheartening it was and how committed they were to stopping the discrimination that's kind of great >> that's interesting. couple software stories. mongodb was one of them. >> they didn't pifvot. i had crowdstrike going. george was pivoting. and nikesh pivoted at palo alto.

they forgot to pivot they didn't pivot. >> yeah. the playbook's kind of well written at this point. >> come on the monday.com, that's when it all started. it's almost a caricature i did a -- i was going to do a really funny piece that would have made fun of them. i decided not to because i kind of like them they were the ones who outlined exactly how to do a pivot in a conference call, and mongo was very prepivot. it's aprepivot call. >> meanwhile, asana, pretty nice day. >> that's going to make things exciting we have a right and wrong way to do tech. we have a lot of people who think we're going into recession, they're buying food and drugs. a lot of people think we're okay and they're buying the semis we have people who are worried about every bank, but not every bank has the problem of silvergate we have an employment number where people say, maybe if we

have a good number tomorrow, i'm on the wrong side. you have to be constructive, mindful that office real estate, bad. okay yes, bad to have a silicon valley blow up good that general atlantic comes in and buys $500 million worth of paper bad, mongodb, good, asana, so mixed bag today. >> looking at -- take a look at a year-to-date of vornado, jim really starting on february 2nd, it's been a straight line down >> i know. and you know, those guys -- steve is really smart. i mean, the ceo, he's really smart. these are not bad companies by any means. that just shows you there's such a secular change against them. i don't think it's cyclical. vornado is really good i know a lot of people -- they're seasoned like, we weren't what was catastrophic vornd's vornado is seasoned and it just keeps rolling over

these are the guys who own that real estate, the office towers, like, oh, that's going to take a lot of work if i move into there. >> is it a matter of a relief rally? relief in rates would not be enough at this point >> no. >> because of the structural changes of occupancy >> periodically, we have these things where the buildings can't be made fast enough into residential or it wouldn't be a problem. but you can't just -- i mean, look what happened next door to us we have a beautiful building, deutsche bank, that was made into beautiful apartments, but it took how many years so, you have a lot of real estate that could obviously be turned into apartments, but it can't be done quickly enough and then you have a lot of companies where people say, look, i think this individual story is good. america's best is a good story merck is a good story. lilly is bottom, it's a god st good story >> you talked about some cyclicals. i wanted to draw your attention to pave, which is the u.s. infrastructure development etf inflows, last three weeks, it's near 52-week highs

lots of stories this week about what's getting built in this country. tomorrow's construction worker internals will be interesting to watch. >> seema mody pointed out a good note there's two rock companies we let everybody merge for a long time. we were stupid but, you know, there are two rock companies in the country, and they are both -- they're going to be sold out because of the infrastructure bill. and i don't know where the rock's going to come from. i don't know where the earth movers are going to come from. i don't know where the workers are going to come from and so, what's happened is that we have a lot of people who are in a sweet spot here, many more than people realize, they're just going to do tremendously. >> you were hot on new corps late last year >> you talk with new corps and the amazing thing is, those are regular guys when you talk about hype, they don't have any hype. but they also have been putting up plants everywhere in order to

meet demand, and as soon as the planet's done, it's sold out and they have been saying, why does the street -- take a look this is a good example of why the street is sometimes really stupid i've used "stupid" too many times. i apologize to lisa, my wife new corps is still selling it. it's selling it at ten times next year's earnings, because it's a cyclical company. but is it? i mean, is it cyclical when you have five years of infrastructure coming? i think people have to rethink new corps is at $174 going into a recession. this is the biggest steel company in the -- in our country, going into a recession at a 52-week high. that's why a lot of people are making mistakes. >> the classic tells are wrong >> yeah. i mean, look, you want to short cleveland cliffs against it, i can see that, but they've been raising steel prices because demand is so great so, we're going to have a recession where a lot of companies are at a 52-week high,

when they should be at a 52-week low. it's bewildering to people because all anybody -- you know, we always hear these analysts, people going, i'm overweight this, overweight that. that was good when you were doing sector rotation. this market's nothing like that. this is a market that says, you got to own the best steel company. you got to own the best metal-bending company. you got to own the best decarb company and have cash. not the risk on -- what's more risky than new corps i'm going risk on? no, that's risk off, clown >> we would walk in here a couple years ago, and that would be the line. is it risk on or risk off? >> we don't know but there's not a lot of risk in new corps. let's just say that's -- the terms don't work we became very portfolio easier. on the network, we were way too portfolio easier the people at home don't understand that.

nucor has a much better long than we thought at this point in the cycle. it's much easier just to look at the charts and break and use the s&p groups, but you have to call nucor, and for a lot of people in this country, they run so much money, $3 trillion at jpmorgan, they could own 50 nucor, and you can't use those guys i'm not talking about -- the companies that have -- that run trillions and billions, they don't have the luxury of being able to look and see which companies are good or not. there's not enough stock now >> as you said before, a lot of companies are undercovered there's just too many to keep track of analyst coverage has gotten shredded in financial sefrpss. >> the most important information i've got about the cyclical in the last three days was your interview with the ceo of cummins they make ev engines what we think is true isn't true, and these companies have spent billions and billions to prove that they're ready for this new economy, and we keep

thinking, no, they're cyclicals, but these ceos are not taking a beating anymore. they're so smart >> to jim's point, ge, leading the s&p, up more than 6% you don't see that every day >> no. larry's so smart, and people -- there are people who have criticized him they just don't -- this is larry culp, for heaven's sake. he wasn't some guy who told -- didn't tell the -- some guy who was ill advised about things he said on air in every other place who doesn't need to be mentioned because he's super nice. don't slam the nice people i don't do that. >> dow up 140 here, back above 4k let's get to bob pisani. >> what a great performer ge has been, really ever since they spun off health care those big global industrials holding up very well i want to show you s&p futures i don't normally put this up before the open. futures trading before the open, of course, but look at that pop at 8:30. you don't normally see initial

jobless claims move the market, but it did today bad news, kind of good news. we've moved 25 points on s&p futures and we have held that gain here. now, of course, tomorrow, the jobs report will get the wages along with that, so takes a lot to make a big bet on the market here ahead of the jobs report and the wage numbers we'll get tomorrow but you can see this is obviously moved the market to the upside in terms of sectors, sort of a mixed picture here ark's been down this week but is up today energy has been weaking but popping nicely tech's been a terrific performer overall, outperformed most things and that's modestly up. the banks have been a big problem for several weeks now. you heard about what was going on with silvergate capital they're winding down their operations they're voluntarily likt dquida the bank signature bank, a commercial bank based in new york city, has a fairly small exposure to crypto, that's been down simply

on that modest exposure to crypto banks have a lot bigger problems than crypto issues right now we've been talking about this for several weeks now, but it's pretty simple right now. lower economic activity that we've been seeing is an issue. concerns about that, exposure to commercial real estate is also an issue put up that full screen. and then of course, you have higher deposit costs that the banks are going to have to pay there's the bank etf, the kbe, which is a basket of mostly, mostly large commercial banks and mostly large regional banks. that is on a new low for the year not quite a 52-week low but if you look at the regional banks,most of the big, big, super regional banks are all at 52-week lows today, so zions, mtb, pnc financial, these are three of the big super regional banks. new lows and some of the smaller banks like first republic bank, based in san francisco, also

hitting new 52-week lows so, i know there's a little bit of an effort to figure out the exposure of banks to crypto right now, but carl, the banks have much, much bigger problems than that right now. >> bob, see you in a little while. as we go to break, take a look at bonds today. obviously, the market continues to digest what we got from the fed chair last couple of days. but you'll see some familiar levels here, two-year, just south of 5%. ten-year around 3.95%. the long bond with the only yield that's rising today. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are?

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performance we feel very good. >> that's larry culp of ge affirming guidance. >> everybody wants [ inaudible ] right there. >> everybody wants in. >> 7% gain leading the s&p this morning as they affirm on adjusted organic revenue for the year and adjusted eps. stop trading with jim in just a moment at's what you get from the morgan stanley client experience. you get listening more than talking, and a personalized plan built on insights and innovative technology. you get grit, vision, and the creativity to guide you through a changing world. ♪

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let's get to jim and stop trading. >> we have a lot of companies whose multiples are low and ou of favor mar marathon pet, 4 1/2 times earnings what do you short when you go into a recession refiners the margins will be squeezed margins are expanding. why? because it's not like the others and this time it's the same are the most dangerous words to say. >> we did see a few days this week where oil was down, i assume on assumptions of reduced activity. >> right well, i mean, i know scott sheffield, pioneer is owned by the trust, is basically good going forward. remember, these guys to some degree they don't want anyone to

realize they're not spending like they used to. why should the production go up? they spent the last two years saying we're not going to be yahoo!s anymore. rusty brazil is saying we're producing like mad stop it. the main issue is that who is going to make money at these prices and, i thought pioneer was going to make more money and looks like they're not i thought devon would make more money, they're not i thought coterra was going to make less money and they are this comes down to the individual companies are confounding the analysts because they've changed their models so much. >> there's a lot of wild cards freeport coming alive after eight months. >> i know. yet, baltic freight, might be bottoming. what the heck is going on with china? we don't know. but i think, again, the whole -- this was defined by silicon valley bank and phil lebeau's

interview with larry culp he made it clear the balance sheet is getting fixed and by the way, who covers -- i forget who covers ge at jpmorgan. let me hit that up tonight i will look at why amd is up. i think there's a different answer than what people think. nothing is going on plan of what the bears say. remember ge was a highly, high profile short name not that long ago. and now gm is offering piebuyou of majority workers. so much stuff is in the cards. >> you have to keep your radar tuned. see you tonight at "mad money" at 6:00 p.m. eastern time. dow up 130 every sector green except for financials this morning. down almt peenosa rct.

good thursday morning. welcome to another hour here of "squawk on the street. i'm sara eisen with carl quintanilla. david faber has the morning off. we are live for you as always from post nine at the new york stock exchange take a look at stocks half hour into trading here. we're higher

the s&p 500 up a half a percent. the dow up 120 points. nasdaq up half a percent as well we're digesting the higher yields, the dollar coming off, three-month high for dollar, higher yields, inverted yield curve, that's been the story all week long, on the 2-year above 5% a few big stock movers we are watching right now keep an eye on norfolk southern this morning the senate kicking off a hearing over the derailment in east palestine ohio with ceo alan shaw set to take the stand we'll bring you the latest there later this hour. another day in the green for tesla. shares up almost 50% on the year morgan stanley out with a note this morning warning the company's cyber truck, quote, might be more of a side show financially. and finally ge, one of the top gainers on the s&p as they kick off their investor day. ceo larry culp forecasting high single digit it growth ahead despite the volatility turning back to the broader

markets right now, we're seeing a bounce it's a little more substantial than yesterday's feeble bounce off of powell but the name of the game remains higher interest rates, even if powell didn't sound as hawkish yesterday here's the quote that everyone is teeing off of this morning from the fed chair >> we have not made any decision about the march meeting. we're not going to do that until we see the additional data, larger point, though, is we're not on a preset path and we will be guided by the incoming data and the evolving outlook. >> he wanted to make it clear 50 isn't necessarily baked in to his mind and it's up to jobs tomorrow and inflation number next week on cpi still, the market is getting there, right carl for 50 in march and another 25 and then another 25 and that has been the story, the readjustment, towards higher rates on the back of the strong data and hawkish fed speak.

>> market looking more at 50 than 25. goldman's point was who cares if it's 25. they could make up for that on the dots even if it's a more incremental move in march itself today we mentioned cre risk with jim. >> commercial real estate. >> claims a little bit higher. maybe some of the january seasonality is starting to come out of that. challenger layoffs up 4 x year on year. >> not everything is rosy. my favorite read is the beige book comes out yesterday afternoon, this is the fed collecting all the anecdotal district from the districts, new york, cleveland, and philadelphia, and you know what, it did not paint the most robust picture here's some quotes i pulled out. several districts indicating that high inflation and high interest rates continue to reduce consumer's discretionary income and purchasing power and some concern expressed about rising credit card debt. here's the key, carl, because we know the fed is going after wages. wages generally increased at a

moderate pace. some districts noticed wage pressures had eased somewhat wage increases are expected. that points to progress on the fed's mission. they expect it to moderate further. we've got a big jobs report tomorrow, but if you're looking at the beige book that would point to moderating wage pressures which is the most concerning thing for inflation more so than, you know, everybody having a job which is great. >> you pointed out the bofa credit card data they argue again that that boost we got in january was maybe probably due to the cola adjustments on social security getting rung out. the etsy comment from the cfo, we may be a more seasonally -- seasonal business in the past, the deceleration from q4 to q1 was larger. >> they had a good holiday at etsy cyber monday, giving tuesday, extremely strong i agree it's interesting to get that warning and i think it suggests the january data was a

bit of a fluke, but there was some one-time factors. february looks strong on consumer spending, but the moderation in january key for the fed. >> another reminder of how key tomorrow will be there is big news this morning on gm and for that we'll turn to phil lebeau. good morning, phil. >> good morning, carl. general motors will be sending an offer letter basically already has sent an offer letter to the majority of its salaried workforce offering voluntary buyouts. gm is in the midst of cutting about $2 billion, that's the target, in terms of how much money it expects to cut this year essentially it's looking for savings and we've seen this with other automakers where they announced buyouts or layoffs a week and a half ago, general motors said it would be eliminating about 500 salaried jobs around the world as it looks to streamline its operations now we know that company is sending out an offer letter to almost all of its salaried staff

saying there will be an offer for a buyout how many take it, how success this is and whether or not this keeps the company from having to initiate some type of a broader layoff, that remains to be seen. we shouldn't be surprised. we've seen this with other automakers and now gm. it is moving to keep costs in line as much as possible back to you. >> two things. one is, the note about -- from morgan stanley on tesla's cyber truck, adam jonas arguing it might be more of a neaiche product. and larry culp and the action in ge. >> right and we're here at ge's investor day. they're half way through the investor day we'll talk about that in a bit first of all, with regard to adam jonas, tesla and the comments regarding the cyber truck when production starts, if it starts on schedule later this year -- that's not on schedule compared to their original target -- they said look, we expect to begin production in texas this year and ramp up in

2024, i think a lot of people will sit there and say if they start, how much are they going to be able to ramp up production while you will hear a lot of tesla fans say they have 100,000 people interested in buying it, this is not your typical pick-up truck. this is largely a lifestyle truck. that's the way it has been designed will it sell well in southern california, maybe in the l.a. area, or down in miami you bet. i bet there are a lot of people there. is getting to sell well in wichita, kansas? no way that's the reality that you have here is that you have a market that for a lifestyle pick-up truck buyer they might be interested with regard to general electric, the stock is at its highest point since 2018 clearly the highest point since larry culp became ceo as they continue to move towards they've done the divestiture of the health care business that was in january. vernoba power generation and renewable on schedule to happen next year and the aerospace unit

what larry culp will be running, they have the tailwinds behind them look what's happening for global demand for travel and for new aircraft and you have to remember, when it comes to ge aerospace, it's not just selling an engine, sara, it's the services five to eight years after one of these engines goes into an aircraft, that's really the sweet spot where they start to make money look at what's expected over the next decade, there's a reason why this stock is moving higher. >> hope you get some cincinnati finest graeder's ice cream make a stop. they have one at the airport. >> all right. >> thank you very much. getting back to the markets, rallying up 100 points on the dow. right now let's bring in mike santoli with his take on the news phil brought us gm offering voluntary buyouts. we're looking for signs of what's happening in the labor market and that the layoffs are expanding beyond technology because it all comes down to the

jobs number for the fed. >> every, you know -- most conference calls i would say for mature companies this past quarter, that that's reevaluating staffing needs under way. i do think there's a little more comfort that there's, you know, for example, the weekly unemployment claims, people pointed out one off factor, the market firmed up when we got slightly worse than expected news on jobs shows you where we're at with regards to tomorrow's jobs report, cool number does cheer the market here because of all the things you said. we're looking for examples of moderating labor market tightness. >> especially wages. >> exactly i think that's one element of what's happening here. the other piece of it, just more broadly on the market is, you built up this cushion going into the first couple days of february and we've used it you've had to use the cushion. banks, the banks index is down 15% in about a month, and the overall tape is kind of held in

there. you've basically had semiconductors very strong a lot of that is the mega cap growth stocks. the street flogging apple, carrying a lot of weight meta seems to have momentum on the call story that's the ebb and flow of what we're seeing in the market right now. you know, the bond yields, their a up but they've also kind of taken a pause at the moment. i don't think anyone is all that confident that we have really built up a head of steam, but that's also good because i think sentiment has really cooled off a lot in the last four weeks. >> right thinking about how important wage figures are every month, but especially so, in a week where now we're getting calls on cpi and they're running hot because of used cars and shelter, right. >> without a doubt also the day dense of things is interesting here with the numbers with cpi next week within the fed's blackout window for speaking tomorrow's jobs number is the final word on how the fed characterizes things after you have speech after that so we're kind of on our own in

terms of 50 or 25 basis points inferring from the cpi yeah, i think that matters a lot. you're going to have to -- i agree with goldman by the way in terms of where we put the extra 25 basis points if we're getting it it's not that crucial. we need to see the destination and know that the fed isn't intent on really seeing the labor market suffer a lot more before they feel like they're done with this thing the labor market structurally might not be in place where it can soften up quickly and you will have other stuff like the consumer credit and commercial real estate fall by the wayside. >> i want to point out for a week that's been dominated by hawkish expectations and higher 2-year yields technology is the best performing sector of the week tech and communication services are the only two sectors higher for the week behaving better than they did last year around this high rate. >> two things on that. one it's partly catch-up because they did underperform so much

last year and two, as we've discussed many times, the yield and the monetary policy story is probably overplayed as a factor. they need to see earnings estimates bottom they need to have some kind of story that says that they're no longer completely in retrenchment mode in terms of profitability. you've seen that enough. by the way, a lot of it is semis too, kind of the a.i. story, boosting nvidia. you have these sort of individual narrative threads that are helping out. >> a.i. offsetting higher interest rates. >> even as it hurts google, yes. >> see you in a while. mike santoli. the president is expected to unveil the fiscal year '24 budget today calling for a $3 trillion reduction in deficit as concerns over the debt ceiling loom kayla tausche has more from the white house. good morning, kayla. >> reporter: good morning, carl. president biden increased his deficit reduction target from $2 trillion earlier this year as his administration moves to cut

some spending while raising taxes to fund his top priorities like higher defense spending, child care, universal pre-k and paid leave the biden administration you, according to a source familiar with the matter, will propose 25% tax on income over $100 million, what they're calling the top 0.1% they'll propose a 28% corporate tax rate and a removal of big tax breaks for private equity, oil and gas production and like kind real estate deals while many of those provisions have been proposed unsuccessfully in previous years, the message of this budget, largely focused on lower deficits, takes a different approach from two years ago when president biden requested $5 trillion in new spending for pandemic stimulus and social programs, with not much of a dip the following year with persistent inflation and higher rates, the cost to service federal debt, about a third of the budget, is soaring. the nonpartisan congressional

budget office estimates the u.s. will spend $739 billion in net interest alone in this fiscal year 1921 law requires the white house to submit the budget by the first week of february after receiving a briefing from the congressional budget office yesterday, house speaker kevin mccarthy suggested the interim delay will create a delay for republicans to respond as the two sides stare down negotiations over the debt ceiling. sara >> yeah. that's what this is all about. thank you very much. kayla tausche. as we head to break our road map for the rest of the hour we'll talk to wells fargo's bob peck about why he's seeing signs of life in growth and tech stocks. >> crypto collapse silvergate shuttering in the wake of the ftx collapse. >> the party over for shipping we'll dig in with the ceo. big show ahead don't go away. the dow losing steam, up 65 points what if you were a trendy apparel company

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decent rally for tech this week all things considered with the nasdaq outperforming for a change our next guest says things should only get better in the back half of the year. joining us today at post nine, wells fargo chairman of global internet investments bob peck. great to have you back welcome. >> thanks for having me. >> you've set the table earlier in the year there would be things to look forward to at some point, whether it's in the ipo bucket or the m&a bucket which do you think boils first

>> >> on the ipo side of things what you've had is a good base after the terrible performance of the '21 class, which is down 45% or so today, the '22 class, although much smaller is up a good 20% that's helpful in 2023, about 7 ipos, those up about 20%. what we think is interesting is investors, they want to participate here, particularly if you have good companies that are profitable, that are done at a discount, where they can get a good return. you're seeing that appetite start to build one of the things most interesting we did a poll of our clients and we asked them, what are you looking for here are you looking for a bounceback in the markets to get excited? how are you thinking about it? their answer was we're looking for stability. can we agree on what inflation is going to be like, what the new normals are for valuation and normal and use that as a bedrock to base that off of to

gogo from there. the back half of the '23 you will see a pick-up of ipos and companies we speak to aiming for 2024 depending on where they are in their funding and what they want to do. >> a lot of chatter is not internet necessarily it's restaurants, it's gaming, right. >> yes. >> farm, instacart is there a make or break deal overall that needed to succeed >> yeah. i think you're going to see a couple there's a couple in the internet bucket coming. instacart is coming. that will be important to see how that plays out and ultimately investors think about the multiples around these stocks, right. what i think you will see towards the back half of the year, more tech names come out once against, a lot of our companies are looking to see how these play out and the leadership and how investors talk about them and set up for a strong 2024. >> the post-covid ipos did terribly last year that was one of the worst performing buckets of stocks are we talking about a different quality level of companies going

public or valuations. >> i think what you're seeing for investors, they're looking for both they're looking for profitability, for strong underpinning unit economics. they're looking for larger tams to go after. to your point, i think that's spot on. the valuation levels are different too. back to precovid, the average tech name trading around eight times now. today four or five times revenue. the ipos you've seen go so far in 2022 and 2023 have been well orchestrated strong underpinning bidders behind the ipos and pricing it well. >> tam doesn't do it anymore you can't say how big your tam is and revenue per user is you need cash flow and profitability. >> absolutely. the under. iing economics are critical. being profitable or showing a clear path to profitability in this market is important. >> there was a story on the wires about another firm

redeploying some investment bankers because of the deal drought. is that indicative of anything >> yeah. i think if you look at sector per sector, right, in the tech sector where we look and talk to our clients, strong demand from the buy side, institutional side for these names. they need big growers over time. number two, what's the pipeline look like? for tech we're bullish starting the back half of '23 and going from there in '24. >> m&a the friction on airlines and atvi does that let up >> yeah. it's interesting you're coming off your record year in '21 of 6 trillion of m&a. last year we were down one of the best markets over $4 trillion of m&a. right. this year has started slow if you look at '22 more granularly you will see '22 was strong, but really in the front half the back half of '22 was slow and so far this year we're seeing one of the slowest snartsz tech m&a in -- starts in

tech m&a in january and february what we think is going on, one you're starting to see a narrowing of the spread between the buyers and sellers and that takes time to come out, right. one of the things we like to do is when was the last funding done when did they take the last vc dollars and how much further do they have in runway before thinking of ipo and m&a and what you know is you had a big spending of vc dollars in '21, right. now you start thinking about 18 months out, two years out, all of a sudden a question for the boards in the c-suite, can we ipo, do we want to ipo, do we consider doing m&a and also who are the buyers a trillion of private equity money on the sidelines $3.5 trillion of strategic dry powder on the sidelines and there is demand, more can that bid ask spread narrow to a point where the boards are happy and the buyers. >> which parts of the tech sector would you watch there is it cloud, cyber like which one are the prime deal candidates?

>> i think it's going to depend on the business model of each individual company can you go ipo if you want to? some of them won't be able to. we bucket them in three buckets. fully funded don't need to ipo but may be interested in ipoing and doing it anyway. the second bucket that are profitable but need to do something, they could ipo, they could m&a. the last bucket that probably aren't profitable for the near future and the window is not open to them on the ipo side of things, m&a is more appropriate for them. >> that's going to be one to watch. you got to come back every week, i think, until we get some better radar, better visibility. thanks as always. >> thanks for having me. >> still ahead, the party is over at least for shippers. that's according to the man behind one of the biggest transporters we'll talk to hapag-lloyd's ceo about those comments and more after the break. the dow is up 64 hovering around these levels we'll be right back.

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hapag-lloyd's ceo rolf habben jansen joins us now to talk about what he's seeing good to have you back on the show, rolf when you said the party is over in shipping rates, what do you mean what do you see? >> i think we've seen markets have normalized. since summer last year, we clearly have less demand because people are restocking and as a consequence the balance of supply and demand has changed and, of course, as a consequence of that rates normalizing and come down rapidly in the second half of last year and they're plateauing a bit. >> when you say normalizing, back to precovid levels? >> depends on some we see that we're back to precovid levels, which is probably a level over time is not sustainable because skrostz come up, but we've seen rates that are comparable to what we saw prepandemic >> why is it is it a weakening of global demand we're supposed to be at a point where the chinese economy is

picking back up. major source of demand there the u.s. is hanging in there pretty strongly. >> i also think consumer demand is not, you know, the root cause of the problem i think you just see that over the last few years, lots of people have gotten in lots of goods they haven't been able to sell both in europe and the u.s., and those are slowly starting to come down and as we also see the stock level normalizes, i think we'll see that the demand bounced back the question is when will that happen will that be in the course of q2 or q3? i think that's a little bit everybody's guess. >> are we in a period now where when things were tight and there was not enough capacity, industry was moving quickly to add capacity that's just now coming online? >>. >> i mean, a lot of people have ordered chips and that was necessary because the order prepandemic was too small. now we see some are coming but in fairness, most of the

capacity is only going to be delivered in the second half of this year and then in into '24, '25. >> what are you seeing as far as china is concerned i mentioned there was a lot of hopes for the reopening. we got an inflation number overnight that didn't necessarily show anything booming over there so is it less than you expected? >> i don't know. i actually think that the rebound after the chinese new year has been normal but different than the last couple years. when we were in the pandemic, we basically saw no slowdown after chinese new year this year we have seen that again. but if i look at what we get in as bookings and requests over the last couple weeks, that normalizes again. >> do we have any disruptions throughout we covered all over the last few years the disruptions from the supply chain to china covid, russia and ukraine war, is everything normalized at this

point or are there some blockages still? >> i would say that by and large we are back to a normal situation. i think if you compare it to what we've seen in the last couple years, there's nowhere near the congestion that we have seen and as such, there's always one or the other port or countries where there's one small problem here or there or bad weather or something similar, but to be fair, today we are in essence back to the situation that we had prepandemic, which is pretty much a normal market >> rolf, appreciate your commentary today thank you for joining us. >> you're welcome rolf habben jansen of hapag-lloyd. oppenheimer breaking down what they call the a.i. food chain this morning who came out on top with the analysts behind the llca here's a look at one of them after the break. harnessing data-driven insights and boundless curiosity. we dissect the market from every angle.

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i'm bertha coombs. here's your cnbc news update at

this hour. in what president zelenskyy is calling an attempt to intimidate ukrainians again, russian missiles and drones hit residential buildings and infrastructure targets in ten regions of the country overnight. at least six people are dead and hundreds of thousands do not have electricity at this hour. after the largest attack in three weeks. after meeting with israeli officials today defense secretary lloyd austin says he had frank discussions on the need to deescalate tensions with palestinians senate minority leader mitch mcconnell is being treated this a hospital after tripping and falling at a washington hotel during a private dinner last night. his office is not providing any specifics about this conditions. back to you, carl. thank you very much. bertha coombs. an hour into trading here. we are hanging on it gains, not far from the flat line, dow up 100, s&p riding above 4k a few sectors popping out today

as well. dominic chu has the latest on that. >> good morning, carl. so as we take a look right now, financials lagging at this hour right now. that sector has come under pressure immensely as yields have become more volatile and shorter term rates have become increasingly higher than longer term ones. that sent that sector, by the way, the worst performer on the day, below its 50-day moving average, still holding above the 200 day moving average as well that's not the only story here it's also about sbv financials sinking as the bank launches a share sale totalling $1.75 billion. the bank urges to shore up its balance sheet. the financials check out those moving averages as well as the silicon valley bank action i'll send things back to you at the stock exchange. >> creating concern among people who have deposits there. thank you. want to turn to our artificial intelligence.

our next guess made some buzz on the street this year when he called chatgpt the next iphone moment i've heard that a few times now. out with the playbook saying in the a.i. arms race value will accrue to the arms supplier. let's bring in timothy everyone is calling this the iphone moment, tim where do you think the value is in thely >> -- in the supply here. >> if you look at the wireless markets and the internet, it's a similar progression. in wireless market you had three areas that created a lot of value, a basic infrastructure, which in a lot of places was like wireless towers, the operating system on the iphone and then you had applications like facebook. so those are the three areas all three of them were fairly monopolistic like. we're looking to find the same three areas within the a.i. world here we're going to basically need more compute, like ten times

more, and all that comes from the semiconductors that's really taiwan semiconductor and for a bunch of reasons the nvidia, but that's all put inside data center microsoft is trying to become the operating system for a.i the applications are really going to be organic and really difficult to predict when i first started writing about the internet over 25 years ago, we didn't know facebook was going to come about or google, but we knew there were going to be cool applications throughout. while in this report we focus more than we did this morning on the basic infrastructure how the compute is changing dramatically inside the data centers, what a lot of people what we call in the report hetero genius compute. at the end of the day the basic infrastructure will win no matter what happens on the application front. >> i know it's a little bit -- it's not the most pressing issue at the moment but conflicting charts that look at google's their search in light of microsoft's advancements do we know what it's done even

in the short period? >> it's been stable, yeah. you have to recognize chatgpt through bing is only like a million users at this point. it's been very stable. and google's search market share is not going to shift a huge amount they're at like probably 90, 95%. maybe they lose 500 basis points over the next few years. what we're looking for is a new application, a new type of search and how is the game going to change quite a bit for what's become a legacy industry. >> but do you believe that there is the possibility of a new point of entry for consumers as they access the internet period? >> you know, definitely. when you talk to college students now they're using chatgpt like crazy to write all their reports. you know, it's going to create new very organic use cases and applications and change how we know search over time. >> to carl's point, alphabet is

down 10% since the announcement of a.i microsoft is nearly flat since announcing the bing a.i. a lot happened on the interest rate front amid all of that. is it like cloud where there can be a lot of winners for a long time with high growth, or is it more of a battle where it's microsoft versus google? >> look, there's going to be -- a.i. is going to be pervasive and embedded in everything like the internet like electricity. we're in the first i think microsoft and google for a few reasons have over aws with a.i. because of the basic infrastructure and how they designed their infrastructure. there's room for growth for both of them here i would say, though, microsoft does have an advantage right now for four or five different reasons over their peers and they're going to press that advantage as hard as they possibly can google, you know, we think is impacted a little bit more by the macro kind of spending on

advertisements and, you know, that will be driven with what happens to the macro over the next couple quarters all this said, a.i. is a major changing platform for the tech industry, the industry is up for grabs at this point. there's no doubt about it. we're in the very, very first innings of this. you know, with the internet 25 years ago, it was difficult to predict who was going to win and lose cisco was a major router supplier which we needed more reuters. we had demand for electronics, but it's going to be extremely dynamic. i would say right now microsoft is well positioned i don't think they really hurt google all that much microsoft is really going after initially more of the sass industry and they feel like they can create very differentiated sass products. >> i wonder if you agree, wondering if the nasdaq is being helped out by a.i. and this whole narrative in the face of surging treasury yields?

people are scratching their heads between the disconnect between equities and bonds i wonder if this has something to do with it? >> i think it does this is going to be a 20-year growth area that's going to drive a lot of productivity growth, gdp growth the united states i think at this point is kind of a leader again back in tech there was some risk that maybe some of this would go to china, particularly in the wireless industry, we saw huawei do really well. we vice president haven't had a major killer app in tech in years. chatgpt, every college student is using it. >> thank you very much. jpmorgan suing former executive jes staley over ties to jeffrey epstein eamon javers has the story. >> jpmorgan is suing its own former executive jes staley for any damages that the bank could be forced to pay in ongoing litigation the bank faces two lawsuits now alleging it aided epstein in sex

trafficking by keeping him on as a client and helping him to send money to victims the argument jpmorgan is making here is two fold first, they don't acknowledge they did anything wrong and owe anyone money, but second, they're arguing, that if a cour finds they have liability here, it's staley who should be on the hook not the bank because he was a rogue employee who did this on his own. in a suit jpmorgan says staley persisted for years from at least 2006 until his departure from jpmc in 2013, in protecting epstein in the face of attempts by jpmc to end the company's relationship with epstein. the suit details allegations again staley this year by an anonymous woman identified as jane doe number one accuses staley of personally spending time with young girls he met through epstein, visiting young girls at epstein's apartments and witnessed epstein sexually

grabbing young women in front of him. but the most damming and so far unproven allegation relayed in the suit is that staley allegedly is the person that jane doe says used aggressive force in his sexual assault of her and said he had epstein's permission to do what he wanted to her as part of wednesday's filing, jpmorgan is seeking to claw back all of staley's compensation from 2006 to 2013. staley was once considered heir apparent to ceo jamie dimon but decided to leave jpmorgan in 2013 he has said that while he was friendly with epstein, he never knew about epstein's crimes. one of the questions in all of this, what knowledge, if any, jamie dimon had of the epstein situation, one of the e-mails that has surfaced suggests that dimon was set to personally review the epstein accounts at jpmorgan as early as 2008, but two weeks ago jpmorgan told us it couldn't find any indication that dimon did actually review

the accounts at that time. we don't have comment yet from lawyers representing staley, but jpmorgan told cnbc last night in part we expect all of our employees at every level of the firm to act with honestly and integrity. if these allegations are true, he violated his duty putting his own personal interests over the company's. >> thank you very much with an update there on the jpmorgan-jes staley-jeffrey epstein. throughout march we're celebrating women's heritage sharing the stories of female leaders in our business and teammates and contributors here's brunswick president renna prizener. >> what i've learned is to have courage. someone once shared with me that along with the way as the stakes get higher you may question whether you put your ideas or thoughts on the table.

diversity only matters when you bring your full self and voices heard. so my advice is to be true to yourself and to make sure that your perspectives and opinions are heard.

sgrooils are the worst performing sectors right there in the regionals and west coast banks. silvergate shutting down announcing it will wind down operations and liquidate in the wake of industry headwinds cnbc reporter joins us now, covers crypto for us it's good to have you.

explain how silvergate became the latest victim of the crypto collapse and what the spillover effects are. >> thanks, sara. great to be here this is just the next step in the ftx saga ftx was a customer of silvergate which became the go-to bank for the crypto industry over the last decade when other banks saw the crypto industry as a little bit too risky and didn't want to take their business on the latest hit, shares down more than 30% today and that's just the latest for the shares mid year after we saw massive withdrawals earlier in january regulatory and government investigations into silvergate's relationship with ftx not surprising for the crypto industry which has seen this coming for about a week. you can see, you know, the news is barely hitting the crypto prices in bitcoin and ether. >> we've been watching the crypto space price action this morning. a couple of dissection pieces this morning, sheila baer, former fdic chair, argued it's

not so much about crypto in her view as it is about traditional risk in banking, meaning lack of diversification or mismatches in your maturities, and i wonder could this have happened if it wasn't crypto? if it had been something else? >> a lot of people have made that argument, carl, it's not about crypto if you're a little too in one industry that's the problem. like i said earlier, you know, regulators are kind of coming down hard on crypto businesses in the aftermath of ftx and that kind of pushes large banks away from wanting to take on risks like that and then that moves on to the smaller banks which might have a harder time and a lot more to pay in order to keep -- to keep up with banking in that industry and it would welcome a lot of what regulators are trying to avoid which is a lot of consen flation one area. >> on day where certainly regional financials are getting

hit hard, thank you very much. interesting story and important story today. a check on the markets with the dow back to some gains for the morning up 151, holding 4012 stay with us

for the first time ever, women ceos run more than 10% of the fortune 500 companies but about 8% within the s&p. seema mody joins us to break down interesting numbers and what's driving that change. >> the big takeaway is we're seeing a growing number of women in the c-suite cfos, up from 13% five years ago. a surge in chief female executive officers accounting for 18%. at the very top, only 8% of women hold ceo positions one of the reasons, there's not a lot of room. fewer men are stepping down. across the s&p 500, about 40 companies have had the same male ceo for over 20 years.

blackrock's larry fink going on 35 kotick has been activision's ceo for 32 years, and marc menoff for 24 years what this is leading to is more women in the c-suite have to wait longer to get promoted or jump ship. stephanie linnartz at under armour a denise johnson has led caterpillar's mining division. >> with all the technology coming out right now, there's a lot of change taking place in the workplace. i want to be a part of that future i would like to lead into that future and it's going to take true leadership to set companies apart in the current environment. so, i intend to do that. >> johnson is credited for the successful expansion of caterpillar's autonomous trucks, which has positioned cat to win

back market share in mining. they say johnson is seen as a potential successor to ceo of cat. >> when i heard you were doing this story, i had this chart made because, you know, looking at the s&p 500, it's so much broader than that. jpmorgan put out a great chart first, they do head of state, less than 1% ceos at ipo companies, less than 1% unicorns, 4% fintech, 5% it's a little small. you can't see. but you get the picture that it's a lot broader than just public companies it's startups, unicorns, fintech, and it's broad. while there's progress, my takeaway is it's still very slow. >> you could argue the onus is on corporate boards. they have control or make the decision whether a ceo's position is extended or it's time for change. we'll have to see if they start

to look at this data and take it to heart. >> thank you, seema mody. norfolk southern senate hearing currently under way. a little higher, dow up 125 points don't go anywhere. real zero en. and yes, that means cutting carbon emissions... but it also means cutting costs. because now clean energy is more affordable energy. we've been investing in american infrastructure for thirty years... lowering electricity costs today, and protecting from volatile energy prices tomorrow. so walk with us— and let's make cutting energy costs real. my ameriprise advisor has helped me

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i'm morgan brennan on capitol hill where norfolk southern ceo is testifying today to the senate environment and public works committee about last month's east palestinian derailment that resulted in release of toxic materials it began with senate and constituents in the region affected, including lawmakers who coauthored a recently proposed bipartisan bill that would add rail safety regulation to the books here is senator bob casey of pennsylvania just a short while ago. >> it's bipartisan that never happens on big bills, or rarely, i should say. it would be a good start by norfolk southern to tell us today, in addition to what more they're going to do for the people of pennsylvania and ohio, that they support the bill >> reporter: and that process of explaining for about what norfolk southern is doing and plans to do is already under way. for his part, ceo alan shaw of

the railroad saying he is, quote, deeply sorry, determined to make it right, that so far the railroad has committed more than $21 million to the community and that is, again, saying just a down payment ahead of today, norfolk southern unveiling six-point safetyplan and just yesterday the ntsb unveiling a an unusual special investigation into safety culture. this testimony will be going on for the next couple of hours i'll continue to monitor it and bring you the headlines. that's it for the "squawk on the street's" 10:00 a.m. i'll send it to carl and sara on the floor. evercore vice chair is with us, the bond bull saying the top of the two-year yield may still be out there