volatile. >> look at that. okay, sarat, thank you great to see you as always. a final check on the markets. if you missed it, just a half ago cpi came out 0.4%. that was right in line with expectations that means maybe the fed swront to be in the same box to raise as aggressively. that does it for us today. right now it's time for "squawk on the street. ♪ ♪ good tuesday morning welcome to "squawk on the street." i'm skrint with jim cramer and david faber. eight straight months of de kleining year on year inflation. two-year remains at 4.25 our roadmap will begin with inflation and fedex peckations cpi continues to rise adding to the rate challenge.

>> seeking buyers. regulators planning another auction for silicon bank after they failed to find suitors over the weekend. a senior treasury official tells cnbc that all uninsured depositors are safe. >> let's begin with cpi. a lot of interesting internals, jim. used cars we were worried about down to 2.8. >> index is up .8. we've been hearing stories about how rent has peaked. that's very important. lodging away from home we're hearing that people -- in terms of spending for going away morgan stanley airfare is definitely a problem, no doubt if you're going to stop traveling as much or you can say united is saying opposite, airfares are still up. i look at this overall and i just say, well, it's not a great number it's not a spike

the trend line is okay it gives the fed ammo to be able to do 25 without making us feel like they're going to put the system under given the fact that we got the somewhat explicit guarantee from treasury. >> you refer to morgan stanley this is a chart katy huberty put out today, looking at the methods people used to fund their spending for a long time it was excess spending you see the blue line, that's actual income, and then credit cards, too. >> i think what you're looking for is some end to the long money/short time trade, which is also the life-too-short trade. david, what we need to see is that the spending binge declines, and i think the events that occurred the other day is going to chill spending. the fed is going to get what it wants.

i think if they don't do up 25, people say -- >> so we're back to 25 50 is off now as a result of the mini banking crisis if we want to call it that. >> 50 is reckless and 0 is reckless. >> what about -- >> still dealing with archegos. >> how about rbc i'll float that one. what is interesting is you can float anything at this point i don't want to do that. because of the problems we have with our doctrine about concentration, you need a foreign bank to buy silicon valley bank. if the auction fails, then people will say, wait a second, what is the price discovery of these banks? i think silicon valley is a unique outlier they did everything wrong. if it was really so great as all these venture capitalists tell us, doesn't it have some value >> speaking of the inability to

sell silicon valley bank and the continued focus on thebanking industry, particularly regionals, i think that is the real question here the fallout for that, in particular, guys, the inability to find a buyer over the weekend for silicon valley bank. if you had someone come in, someone as in a large, well-known bank, that would have given confidence i think to the market in the sense of, hey, there's a lot of value there so that is still an open wound, so to speak. it's still out there. >> everyone is buying these today -- >> with that said, and as you well know, confidence is the key to the extent you can watch stock prices moving higher, that will certainly be helpful in terms of psychology, sentiment, confidence but from what i'm hearing from d.c. right now at least, people who are sort of talking to treasury still, there's still a lot of concern there's concern, hey, are we going to figure out silicon valley bank to find somebody to come in that is appropriate, and there's concern about the rating

agencies and what is the next step they take remember they, as they often are, were sort of the match that lit the fire at svb in terms of the timing there >> absolutely. now, one of the things -- one of the reasons why this has been so different, in the other times, say 2009, did the banks have enough equity. this is confidence it's so easy to journal deposits to jpmorgan, bank of america that's what this is about. this is not about do they have enough money in terms of equity, do they have enough deposits let's say huntington bank shares very good bank if they did not see any outflows thursday or friday, written reports about how much insured have suggested they don't have enough insured -- actually they have the most insured. so when you look at huntington

bank and you see it yields 6%, you say tlahat's a bargain. i do think it's worth buying but at the same time, if we find out there's a failed auction -- remember, fdic they're not really that good at doing auctions jpmorgan is the one to be a buyer but they're not allowed to because of our doctrine. someone is going to come over, when it comes overthe tape whe it does, no buyers for silicon valley. >> we're seeing a nice bounce as we see in the regionals. these are very important banks in their communities >> citi has a much better deposit base than people realize, a lot of cash management >> what you also have right now is a lot of people looking at the health and maturity portfolio of a lot of these banks. by the way, what's the impact of this rapid rise in rates over

the last year and have we really taken account for it that, of course, we saw with silicon valley bank in terms of both their available for sale portfolio of bonds and also health to maturity you have a lot of people analyzing saying what is the proper write-down. it doesn't matter as long as deposits don't flow out. for the biggest banks, they're flowing in, not out. >> taking in billions. >> they are. >> you have the fed issuing this internal review of their supervision. we'll get results in may you have actman versus griffin griffin saying this used to be a capitalist economy breaking down before our eyes. >> we're an economy that -- hamlin didn't want concentration of banks we kind of stayed true to hamilton, not to mark -- it's important you recognize that we

uniquely have supported small and medium-sized business. i don't know what he wants to do if you want to make it so that's no longer the doctrine, the hamilton doctrine, that's absolutely fine. i had cullen frost on last night. cullen frost always thought it was pretty reckless to do. they go very short and they have sticky deposits. that's why the ceo bought a million dollars worth of stock. >> ken griffin says losses to depositors would have been immaterial the man is a walking computer. it's hard to argue with him. that said, i don't know -- do you agree with that statement? >> no. if you're rich, man, you're right. that's america -- >> why is that moral hazard? i'm supposed to analyze every bank i'm depositing money in, and let me take a look at what

they've got really available for sale, i don't feel comfortable with the mark on that bond come on. >> you can't do that look, see all those regional banks up there, we can go like a britain-style bank again, that's not the doctrine of the united states this man may say weave become more socialist i will come back and say change the doctrine let's have it all go to jamie and to james and to brian. >> when you save the bank and save the equity holders, and that didn't happen hasn't happened. >> stipulating, if they're rich, i don't disagree with them because that way i never get in trouble. if you're a billionaire, you're right. can we say it's about equity if they don't have enough equity and you need to raise equity, i agree. we're talking depositors for heaven's sake. we're not talking about shareholders >> this is why people are charting deposit betas now where

svb was at the far end of that. >> they were not a real bank in retrospect we didn't know that. >> but were they making a lot of bad loans? >> no. >> the last banking crisis was based on the fact that really, at its very base, a lot of people were getting mortgages they couldn't pay. by the way, they moved completely away to the banking system to these more or less unregulated part of the markets that were being securitized and spread all over the world. >> they knew how to lend against common stock that didn't exist yet. first republic did that. that's one of the reasons they got sued they did that, too. >> did they? >> first republic, my experience is they'll give mortgages at very aggressive prices to high net worth individuals who will then deposit their money. >> the rich screw up, it's their own fault. >> but that's the business

model. >> he also said if they're unhappy, it's their own fault. let me go back to the fundamental notion that that bank was unlike any other. when you looked at what they had, they had very little and they also bought a generational loan they bought government bonds at the generational low >> yes made a bad choice in the duration of the bonds when they received a lot of deposits they should have gone short term we wouldn't be having any of these conversations if they had. there would have an opportunity then to save bank. >> 48 hours. >> -- it's fine.

jeff marsh said why don't you be a hero and buy western, why don't you make a stand i'll make a stand on a huntington bank because i know exactly where they are i'm not so crazy being ridiculed. >> we had the senior treasury official who said it, basically, it all is safe it should all be safe. what the treasury and fdic did on sunday evening should -- >> assuming there's supervision and regulation that's appropriate which is now under que question. >> yes, it is. remember, we have a merchant bank which we typically don't have in the country. they had a very small deposit base and it was easily journaled. remember, there was a fire and they yelled fire because they couldn't get the deal done

come back to tell people what happened in terms of trying to get a deal done to save this bank >> back to silicon valley bank >> that was the beginning. >> it was. it's an important point to say that people shouldn't necessarily be moving their deposits out of any of these banks at this point given what has taken place. >> i've checked with an enormous number of banks that had no alpha. >> some still have. >> first republic had a very big alpha over the weekend. >> they did. we don't know the numbers. >> without knowing what some of these others had, i need to see the figures of what went out this isabout deposits and not equity i wish the rich people would come out and talk. maybe this is a good time to go out and walk your dog or something. >> that's why we'll all be watching the weekly data on

commercial kbang deposits. >> do we want a community bank system this is what happens if you have one. we think it's good in this country. >> while we're talking, jim, headlines hitting the tape on meta, confirming what we discussed and what the journal reported on friday, expects to reduce team by about 10,000 people. >> he's unbelievable, that guy. >> after cutting 13% of head count last year. >> zuckerberg came out on that conference call and said, listen, i think things are going to get worse in the economy. the question is whether it was worse at meta or worse in the economy. that was a parse word thing. this man, every time he cuts, people raise numbers i also know that reels is doing much better, instagram is doing much better. they tried to figure out a work around, which may may have, to try to identified for adve advertisers looking at it. this is the year 06 efficiency >> the 11,000 was 13%.

this is 10,000 off a smaller base, given the 11,000 already, so this the a larger percentage cut in the overall employee base, not to mention, guys, around 5,000 additional open roles that they haven't yet hired. so they will close 5,000 additional open roles. in other words, i guess they're no longer looking for 5,000 jobs that they had been to fill, and they're going to cut 10,000. these are big numbers. >> these are huge numbers. >> he's saying it's going to be tough and there's no way around that. >> i think a lot of silicon valley was like this, just fat this guy is really -- gees, he's about making the quarter making the year. he's about profitability he's about winning this guy is turning into a bardi.

winning is the only thing for this guy. >> is this a muskyian approach >> leaner is better, flatter is faster. >> name me a ceo who has taken these kinds of actions with the balance sheet like he has. >> with a balance sheet like he has, yeah. in other words, a great balance sheet. >> bill girly is famous for saying if you're going to do lay-offs, don't do it twice. try to get it done and get to the level -- >> i love bill >> jim, what happened here with zuckerberg did somebody -- >> i got to him. >> he seems to have -- everything he's saying now about efficiency and flatter is faster and leaner is better >> because he realized he's got this fantastic business. he's spending too much money on it -- you know who else did this it really is twitter

it is twitter. musk fires -- >> that was with a fresh look at the books. >> i can buy the musk analogy. i wish i had the public numbers. >> guys, there's something else in this memo i like. >> what? >> he says in-person work is better thank you, mark. >> for someone who comes in five days a week and has been. >> yes our early analysis of performance data suggests that engineers who either joined meta in person and then transferred to remote or remained in person performed much better on average than people who joined remotely. >> jamie dimon. >> jamie doesn't need that memo. engineers who joined earlier in their career perform better on average when they work in person with teammates at least three days a ek woo. there's a paragraph here that basically say is you're coming back to work.

>> is it neutron bomb zuckerberg what do they call him? >> that's page four of the memo. >> this says bms at the top of it, buy my stock >> well, i think that's an interesting point in the whole back-to-work debate -- back-to-the-office excuse me. >> what do you have here on this held to maturity oh, oh first national bank of zuckerberg laying off people this thing is going higher i didn't mention nvidia. >> we didn't mention nvidia. >> i talked about western alliance bank. i'm sorry. >> he wants everybody in person, jim. encourage you to work with your colleagues in person. >> looks like he wants to run a real company >> we're going to stay on top of the meta news obviously because we worked through the memo and

the announcement we'll take a look at futures, talk about the airline guidance we're getting at the jpmorgan guidance, j.p. honeywell, private equity deals more "squawk on the street" continues in a moment. i know the markets have gone up and down, but you're right on track to reach your goals. my ameriprise advisor helps me feel confident about my financial future. he knows me and my goals. it's not the first uncertain environment he's helped me navigate. probably won't be the last. but with his advice, i know i'm on track. the plan we created can withstand uncertainty. no wonder clients rate us 4.9 out of 5 in overall satisfaction. because advice worth listening to is advice worth talking about. - in the last two years, we quadrupled our team and the pace we're growing, i couldn't keep up without ziprecruiter. they do the legwork and they get my job posting in front of the right candidates. i love invite to apply. i instantly see great candidates and i can invite them to apply. we have hired across all departments, engineering,

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♪ ♪ eight minutes before opening bell we'll have a higher open for sure let's get to a good old "mad dash." >> in the risks of wondering whether certain bangs we even heard of yesterday are safe, i think we took our eye off the prize. that's two papers that microsoft put out that are amazing about microsoft's bet on azure unlocked an ai revolution. now, how are they doing this ai revolution david, if you turn to page 3 of 12, it says this infrastructure of how they did it included thousands of nvidia ai-optimized

gps. well, people didn't even think they were selling any. thousands. the second paper confirmed that, too. next week, march 21st, is the day when it will be outlined in the end people have to recognize that nvidia is sitting on a gold mine it mean literally, if microsoft needs thousands of these really expensive cpus, so does everybody else it doesn't work without them they've created a super computer that allows this kind of ai to go on. people aren't paying attention to that because they want to know about western alliance which is something i remember from the game of diplomacy i think people have to focus on how does ai work ai works on nvidia. >> right all those profits that people are going to make from nvidia stock when the earth is a baron husk inhabited by android armies, how is that going to

feel >> what does that have to do with the price in relation to deposits -- >> i want to hear from him about ai in terms of we -- they don't seem to know what they're creating >> are you a billionaire billionaires opine you don't get to opine get me a billionaire >> i'm far from that but i am concerned. >> i'm looking at the gross margins and looking at the numbers. if you want to go look into the human soul in the ethos -- >> i want to talk about the fact that we'll soon be slaves to ai. >> are you short nvidia? send me an invitation to your funeral. jim fisk. >> this could be it. this could be the end of the human species, thanks to him. >> we were not that -- i don't know some people think we're eating soilient green.

>> imitate him >> edward g. robinson. >> david can do edward g. robinson better than edward g. robinson. >> i'm not going to do it. >> less do heston. "people! >> western alliance. >> five minutes for opening bell

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. the announcement from meta this morning it's laying off 10,000 more employees comes with this memo which is a really deep dive by verg, i think we should prepare ourselves with the possibility, he says, this new economic reality will continue for higher raise higher interest rates lead to the economy running leaner more geopolitical instability leads to volatility and leads to slower growth, jim

this is not about making the quarter or the year. >> no, it's not. i can joke about that. what this really is saying maybe we're in for leaner times. i think the advertising model -- you know advertising is bad everywhere. >> advertising, one of the first things to go when companies choose to bpull back. this is so much more than that he's sort of talking about a new age. the age of excess is over. now we're in the age of efficiency or at least that's what mr. zuckerberg is saying right there. maybe the age of excess make us bloated and lazy >> we're reducing the size of the recruiting team. >> they're cutting 10,000 jobs, eliminating more than 5,000 jobs looking for people to own. basically saying come back to the office at least three days a

week in person is what's important. he's talking about efficiency every other word. >> it's very bold. is there any company doing what he's doing not that i know of >> this is a pretty bold move. >> it's a very bold suggestion -- [ bell tolling ]. >> if he's doing this, he's not blowing billions on the actual met verse either this is a document that says if you think i'm blowing billions on met verse, i'm not. i'm going to be circumspect. they had a great time out there. the combination of silicon valley bank and this memo says the great time is over and they're going to be like the rest of us. >> it does nothing to change your thee tis about whether to to buy tech or not you've been light on it. >> i have been because i think there's only going to be a couple winners

look at git lab, a very good company -- these companies that develop apps i like there's going to be a handful of tech companies that are doing very well. we know mark strikes back, that salesforce did okay. nvidia is terrific apple has a great balance sheet. i question what alphabet is doing, question what amazon is doing. meta knows what to do. there's not a lot, david, not a lot of tech you want to own because everybody owns enterprise, and there's too many -- >> still >> another 500 enterprise software companies looking for capital. 500, not 50. 500. that's the new era, bye bye happiness. >> back to our discussion yesterday, echoes rhymes with dot-com shakeout. >> i don't disagree with that.

we don't need that many companies that help you do -- that go in the cloud and help you generate new software -- david, did you see blackstone did a buy of a company -- >> i'm going to talk about all these lbos, but continue. >> i'm just saying there's too many companies -- there's too many fintech, too many enterprise software. we don't need them all they have to coalesce or go under, and i think mark zuckerberg's got -- this is a manifesto that says we've got to view like the rest of the companies in this country and the world. we have to be like a railroad. >> year of efficiency. >> can't use that anymore. >> year of efficiency. >> remember, most of our companies, david, they try to find fewer people for more, right? most companies are about firing people large companies net don't hire.

>> did he go on some sort of retreat and come back with a whole new mindset? >> his early warnings were last summer, right? >> they were i feel like he did an aaron rodgers thing and came back and was like, efficiency i've finally got it. is it selling all his homes, getting down to the basics >> i don't think he's actually on speed dial. >> does he have one car now? i don't know >> david, come on. all he's done is say, listen, we recognize there are a lot of risks, that the economy is not that good, year of efficiency. if you were to go to cleveland and meet with parker han ban, it's the year of efficiency. we basically have more in-person time and invest in tools to get efficient which is exactly what he say this is the cleveland memo i'm calling it this is the cleveland memo and

not euclid avenue, where our friend john was from. >> i don't understand what you're talking about cleveland, euclid avenue. >> this is a memo -- industrial america has embraced these theories a long time ago, which you think you have to fire people, you can't hire people, you don't take a lot of stock-based compensation, you actually run a company like a company that knows that the reality is tough it's like that that's good. >> now i understand what you're talking about, and now i will ask you a question with all this efficiency and all the cash flow this company does produce, what's it going to mean for the earnings >> well, i think he's thinking bigger than the earnings i think it means -- we haven't seen big cap -- >> big cuts in capx? >> big cuts in capex i think it means that he's going to blow away the earnings like you've never seen because,

david, he's doing more with less this is a very serious memo. i think if amazon were to read this memo and alphabet and some of the other companies out there, they would say, wow, you know what? we've really got work to do. we've been living in a fantasy world. that fantasy world is over. >> so it does give others cover in a sense to do their own. >> look, amazon can't figure out who to fire. alphabet wants to know what to do against icrosoft. microsoft is doing pretty well, but i'm sure they could lay off a lot of people. >> well, it does kind of read like a manifesto flatter is faster, leaner is better in-person -- >> he's hung up on in-person >> it's one of the most important stories of the last two years that the way people work has changed and we've had a great deal of debate about it. we've settled on the fact that we're never going back to the office full time i think it's notable that mr.

zuckerberg has said, hey, we've done an early analysis of performance data which we have been waiting for are companies more productive when people out of the office are in he says, guess what? in person works better. >> here is what he probably saw, just what i've seen, which is that on fridays, people play more video games than they do work i wish that was -- he's a high proponent of people who don't work hard get fired. you can go and see what pipes people are on. they're on a lot of "call of duty," "grand theft auto." the fact this is true is actually frightening. >> we had danny meyer on the show last week, and he said the early dinner hour is on fire because people can shrink out of the office and your boss never knows. >> because they're not actually leaving the office because they're home. >> he knows. you can see what people look at. they don't work as hard. >> no.

clearly mr. zuckerberg seems to believe that again, is that definitive? is that going to mean they're suddenly going to be in the world of technology where in particular there's been a great deal of remote work, that things are going to change dramatically probably not. >> don't you think he's saying in the year of efficiency, you don't need to work here. you can go elsewhere >> the line i encourage you all to find opportunities to work in person has a real tap on the shoulder effect? >> no guaranteed meta income what's the matter with that? do you think, david, do you think right now john deere, you can loaf off >> of course not >> this is what they do. you think ford right now is trying to hire people or fire people >> ford? >> i'm just using them -- >> fire people. >> i'm saying industrial america -- >> i don't know what's going on.

>> meta is now starting to act like a grownup company there's a lot of companies out there that do enterprise software in the exact same way they've got to worry existentially about their business when you look at gitlab which is a darling until today, a darling, you say to yourself, wow, do we need gitlab maybe we don't salesforce until two weeks ago we didn't need it. i think that this is the reckoning for these guys i think zuckerberg is well ahead of it. i'm not laughing i think this is a very smart manifesto, david >> as we keep an eye on the banking industry, significant rebound. don't want to lose sight of the fact we have m&a this morning in the form of a lot of leverage buyouts. the nature of leverage buyouts has changed to a certain extent.

more equity, less debt has typically been the case. the cost of capital having gone up, these companies may -- these sponsors may not be in position to pay anywhere near the prices they once did, again, given that the deals include more equity, less leverage and they're paying more for that leverage as well that said, a few deals to go through. universe the biggest of them, you can see it's up nicely on the price that apollo is paying for that company in the chemicals industry, 33.6% premium to the volume weighted average price for the 30 trading days that ended on november 22nd that's because this has been out there for a bit of time. blackstone alsostepping up again. this is a company that was a spac you get 850, you don't get the 10 this to stallone's 81% they took it public through a spac

dr dragoneer with the spac. they're buying in the whole thing. this is the big seller from blackstone to cvent. >> this is for large -- >> events. >> this is not to rival ticketmaster, santa ana. >> no, no, no. it's technology solution powers entire event management process to maximize the impact of events >> all right >> there you go. >> there you go. >> sure enough >> 22,000 customers globally non-profits, corporate, higher education, hospitality >> is it in the cloud? >> i think it's in a lot of clouds, yeah i think it's in everybody's cloud. >> good to see a spac get a buy from a real company. >> you didn't get 10 if you redeem, at least you're getting 8.50 the presence of abu dhabi in both, awed yeah in both; significant minority investor

alongside blackstone in the c slooet vent deal, as well a minority investment in the june vard deal. -- >> i'm waiting for them to buy silicon valley bank. some canadian bank could make a major move here. >> i'm telling you, i like san tan dara. >> the price tag then was around 28 bucks now they get sold for $9.46. >> qualtrics get a bid, too. that's great i'm glad these companies are finding out. >> important point ton apollo deal, $4.9 financing from nine banks. we can't say the financing market is entirely debt.

>> that's encouraging. >> a tell cal company, fairly predictable cash flows nonetheless, nine banks line up to provide half of the purchase price in debt. i thought that was notable. >> the credit markets are not frozen it's the deposits going from one place to another >> that happens at the speed of this. >> you can easily say this is what's bringing down -- this brought down silicon valley bank david, venmo me western alliance and i'll venmo you pac west? we venmo each other. >> sounds good. >> airlines today, is united a real outlier >> i think so. ed bastian was terrific this morning at delta i think united airlines had some unique problems. the revenues line was fine what a leverage business

it goes wrong big time. >> so many fixed costs. >> the fixed costs are a nightmare. i think there's still very strong travel. >> bastian, by the way, all happening at the jpm conference. he said demand is only getting stronger they reaffirmed the march quarter. some discussion of oil spending in alaska. >> right i wish he hadn't said what he did, but i understand. right now as you saw from the cpi, that is the problem airline tickets is the outlier we can play whack-a-mole, it's used cars. but travel is still strong david, we're long on money and short on time. >> i like that i'll use it tonight. >> you going with that one >> i'm going to go with what meta is doing because that to me is remarkable. i'm not sure they had to do it but it's a better company, and they have to be lean >> that's how i feel >> now we'll be watching jobless

claims we had a tiny spike last week, but at what point does seasonality get rung out of the data and the anecdotes make their way into the actual -- >> i think mark zuckerberg gives you cover. if you're one of these companies and you're thinking i don't want to hurt people, well, you better run your company leaner because the man who has all the capital in the world, that company has a great balance sheet, they're saying you have to be leaner the companies that can't get money from silicon valley bank having to run very lean, and all the companies that helped them have to. i think it's a major -- the of avoided recession is silicon valley which got us the most growth that caused the most inflation the inflation was not caused by the price of plastic. >> when you're all at home and using e-commerce constantly and streaming and you're -- ordering

from warehouses. there was a black swan thrown at the industry, right? >> yes, there was a black swan then today you get the news from doordash and uber in california that they're contractors that makes so there's less health insurance. >> another court decision that is favorable to uber and lyft that are fighting against the idea that their employees should be fully -- >> deflation i think we need to put a tote board of inflationary versus deflationary >> that's a 9% move on lyft. obviously it's been crushed from the mid 40s last year. >> i see so many industries we have too many players. we have too many players in cybersecurity, too many players in companies that allow you to write good software on the cloud, too many players with the vertical in the cloud, whether

it be events, whether it be medical records. this is a clarion call we'll have to have a lot of mergers and it has to happen fast there's not a lot of new money coming into the sector. >> is regulation going to clear a lane for that to happen? part of zuckerberg's memo mentions regulation, slowing things down. >> i think, yeah -- i think these are companies that are going to be shotgun. they need the capital so they have to merge judging by what mark zuckerberg said companies aren't going to have a lot of money >> which companies >> all these companies trying to go public. >> the small companies that were banking at silicon valley. >> look the companies you mentioned, what price they're getting. your company was at 18 and you're taking 9? >> that's reflective of the overall market we've been talking about for the last year and a half or two years. yes, you're willing to take a lower price to sell out

completely. >> is that not deflationary? >> i suppose it is >> is what happened to silicon valley bank deflationary, signature bank deflationary? >> yes. >> you have to show one quarter point to show you're not panicked >> 25 basis points and go away >> 25 basis points and we're going to ignore everything that just happened? a wink that shook the world. incredibly deflationary. >> it may not be over, although it's nice to see these stocks up. >> 25 with a message that that's it -- >> got to see if there's more problems down the pike we don't want to be the reason why good banks have to go under because they simply bought at the generational low, not junk, but governments. we can be pushed -- obviously we now know that anybody's deposits are not sacred

the other day, silicon valley bank was don't worry, relax. i spoke to a lot of good banks in the last 24 hours the one thing they want to do is come on air and say, hey, we're safe. >> i said that yesterday when you gave us the quotes from the chairman of first republic it's never a good sign when you're reassuring. >> we know that from jpmorgan, the original henry ford, i know you follow his work never complain, never explain. you're a close follower of his work >> yes, aim. yes, yes. >> not a believer -- >> i've read him very closely. >> stay with that. >> dow up 350 here on this tuesday. don't forget, you calls get in on the cnbc investing club with jim. find out more at cnbc.com/jointheclub or use the qr code on your screen two-year back almost to 4.4.

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take a look at shares of boeing today nice 2% pop and a pretty good tape the company announced it has reach a deal to sell 78 of the 787 dreamliners to two saudi arabian airlines do not miss an exclusive with ceo dave calhoun in our next hour my name is brian delallo. i teach ap and honors economics in pittsburgh, pennsylvania. financial well-being to me is knowing that i can be free to do the things that i love to do. i hope when i retire someday, they say,

that guy made this place a special place to come to school and gave as much as he could to help the community.

let's goat jim and stop trading. >> we have to get used to this idea, bloated, too many companies in different industries that's going to be the theme, thank you mark zuckerberg, for putting it in my head. morgan stanley comes out a piece about cloud strike and how well, they're doing. george kurtz is doing well when this year is over, there's going to be palo alto networks,

i believe will be out of the s&p, club name, and crowdstrike. that's all we need. >> the others? >> the others will go under. that's where we're going here. because we have too many companies in every single aspect there are 500 enterprise software companies trying to come public and, you know, i don't even know how they will get financed after the first national bank of reckless lending is gone. >> what has benioff said about m&a. he's going to rein it in looking for a spike in bankruptcies >> i think there's going to be a spike in takeovers and there's going to be -- i don't want to mention -- but certain companies are not necessary. we let everything come public. this is the -- talk about rolling back to 2019, the big excess in this economy other than crypto is in silicon valley and that's being rolled back they're not rolling back what's happening in cleveland and cincinnati and firestone -- had

some [ inaudible ] you equate this you had goodyear and firestone. what matters is industrial america is being the template for what mark zuckerberg wrote today. it's very interesting. >> he yeah. >> i have honeywell on tonight honeywell is about trying to do more with less we hear from honeywell people don't say wow what we hear from zuckerberg, wow. new ceo. darius had a great unbelievable record he's going to stay on as executive chairman everyone must read this zuckerberg manifesto i mean, what he's saying, we have to be like other companies not part of silicon valley we have to grow up i love this thing. this thing is good. >> it does feel like the end of one era. >> end of an era. >> come to work on friday. next things he's going to come wearing brieoni. >> the suit i had for one quarter of the price i paid yesterday. >> you did wear the same suit

yesterday. >> you - >> who wore it better. >> see you tonight, jim. "mad money," 6:00 p.m. eastern dow holding on to gains, about 300 points more on this new round of layoffs at meta. another 10,000 employees don't go anywhere. ♪♪ inner voice (kombucha brewer): if i just stare at these payroll forms... my business' payroll taxes will calculate themselves. right? uhh...nope. intuit quickbooks helps you manage your payroll taxes, cheers! with 100% accurate tax calculations guaranteed.

good tuesday morning welcome to another hour here of "squawk on the street. i'm sara eisen along with carl quintanilla and david faber. we are live as always from post nine at the new york stock exchange stocks are off to the races here, up 1.5% on the s&p 500 off a rough couple days in the market the dow up 329 right now, as the inflation number comes in, in line and bank shares surge nasdaq up 1.75%. 30 minutes into the trading session. three movers we are watching starting with, of course, first republic bank up big today after closing down more than 60% at yesterday's close. another name to watch, charles schwab, also in rebound mode, billionaire investor ron barren he is modestly increasing his

position in the financial name and did that yesterday we'll end with meta, news laying off 10,000 employees as it continues to focus on efficiency and cost cutting in a memo to its employees, mark zuckerberg saying we should prepare ourselves for the possibility the new economic reality will continue for many years and high interest rates lead to the economy running more leaner, more geoinstability leads to volatility and increased cost of innovation, given this outlook we need to operate more efficiently to ensure success. 10,000 layoffs, 11,000 the company announced last fall. it's a sign of what's happening right now in the tech part of the economy. the question is, does it go broader? clearly things are change. it's not just tech layoffs which started before the banking debacle, but it's going to be harder for the venture capital firms to get credit and financing now that silicon

valley bank is out of the picture and they have to go to money center banks, the tightening lending standards for the rest of the banks and we still have an inflation problem. it's a tough setup for the fed. >> back to meta, obviously, leaner, flatter, more in person is are the keys some of the key takeaways from zuckerberg's memo, which is called an update on their year of efficiency and there it is. there's a lot in there and worth a read because it is reflective, perhaps, of a change in mindset of the man who leads this company. obviously, also controls this company in terms of wanting to be as efficient as he can. these are significant number reductions >> it's not unique to facebook either i know meta spent a ton and they were going all-in on the metaverse. a lot of companies, salesforce, these were huge employment drivers over the last few years.

>> you continue to hear that is not going to really impact the economy. that seems to be - >> at some point it will. >> because these are high-paying jobs the numbers don't add up to the big overall number. >> not yet we still have a tight labor market and participation issues, right, which makes it tough, but if you look, carl, at the inflation report, just looking at this from the mindset of the fed, okay, it's a problem that core came in a little bit above forecast, we still have 6% inflation where their target is 2. and yet, you look inside of it, a lot is backward looking. shelter a huge part of that story. >> so are used cars which were down 2.8 and we know what auction data looked like lately, some worried maybe you get core stubbornly high as we work into the summer that's definitely the hawkish argument for the moment on the heels of that. >> the argument for the fed next week is now that we have inflation -- still have an

inflation problem. that was the reminder of them today. it would be hard to back off the inflation fight, if we see stabilization of the banks it wasn't encouraging as the banks sold off, the regional banks and the entire market. that should have been the bounce day, the day where we celebrated the government intervention of depositors maybe it took a day. maybe it's now we don't fully know. it could have been -- this could be an over sold bounce or comfort in the fact that the government stepped in. >> psychology plays an important role in these kinds of things. confidence, obviously, is the key sentiment or emotion, so to speak. we hope that there's more of it. there should be, given the actions of the government that took place with the fed and fdic and treasury that took place later on sunday, but that said, sara, i still continue to hear concern among some who have been in washington talking to

treasury, actions of the rating agencies, still to be seen, yet to come, what impact that may have, and so - >> another threat -- >> nobody wants to give the all clear sign as yet. >> right also, i mean, you're starting to get to -- who wants to put their money in a bank with poor assets on their balance sheet that's the wake-up call and what people are wondering is the government going to have to expand this to just blanket guarantee all the depositors in the bank. >> you have to review the health maturity portfolios of banks where you want to deposit and if they're taking - >> that's the argument most people want convenience to their account, decent customer service, overdraft fees that are not onerous, right, and that's what banks are going to try to sell, even though their deposit rates are not what the customer would like. >> they're not going to say what is your duration risk and how you're funding these deposits. let's continue the conversation,

our next guest says the fed tightening cycle is over, no paused, finished we'll see what that means. former pimco chief economist, now at georgetown university you think they're not going to go next week as a rate hike? >> i think they will be on hold next week which will be called a pause for a lot of good reasons and in the fullness of time it will prove to be the end of the tightening cycle and the nx move later in the year, very late in the year possibly, we will see a cut. i think this tightening cycle is over the fed is sufficiently restricting, in light of the new shock that is tightening financial conditions on main street, not just wall street. >> i get that argument, paul, but look, this is a fed that does not want to be behind the curve of inflation they already were at the beginning of this whole thing

and they really want it to come down, and it has not come down that much and we still have indications that core cpi, even today, came in hotter than expected how can they give up that fight? >> i think it's true that they were behind the curve at the beginning, but you don't stay behind the curve when you tighten 450 basis points in a year, so i think it's time for the fed to be humble and nimble and recognize that there are lags and recognize that we're living in a world of systemic risk now everything that was done this weekend with respect to insure uninnurds depositors at the banks was because of, quote, the systemic risk exception. the government has declared we're in a systemic risk time and that's not the right time to be hair on fire with respect to getting inflation down faster. it's going in the right

direction. >> but they did, they participated this weekend. they came out with the emergency lending facility that targets small and mid sized banks to get them liquidity as they needed. can't they set that up, and at the same time raise rates to fight inflation? >> it's the old debate whether the macro tools can be separated from monetary policy, and i think that's the case a good chunk of the time, but right now, i don't think it is because we're living with a very tight monetary policy as measured by an inverted yield curve, which in itself is negative for the banking system, particularly the regionals that will be lifting their deposit rates and lifting and lowering their net interest margin so i think in general, they would love to be able to separate the two functions of maintaining financial stability and fighting inflation, but right now, i think they are comingled from a starting point of an inverted yield curve.

>> yeah. paul, what about the notion of a cut? we have some desks calling for it there's a great chart out of deutsch that looks at where first cuts came relative to history when, you know, on inflation and unemployment, we've never had a cut at 3.6. >> i don't think we're looking at a cut now we would have to have something more severe to think about a cut. the big issue, no more tightening now i think it will be no more tightening this cycle, but the big issue, no more tightening now. to cut actually i think you would have to have another negative impulse and we all hope that doesn't happen, that what happened this weekend with respect to declaring a systemic risk exception will take grips and everyone will recognize it isn't insure all uninsured

deposits. >> i don't know. i think if they pause it will send a signal they're worried about the financial system and the risks around this and maybe they need to be. >> i think that's actually what would be a good thing to signal right now from the standpoint of backstopping what they did this past weekend, not just in word, but in deed. >> finally, paul, really quick, they're going to do this internal review of their supervisor and regulation of svb. do you worry about them finding real fault with their ability to monitor some of these institutions >> i am not going to prejudge that whole overhaul process. i will applaud the fact that they're moving with dispatch to do that review they're part of the political fervorment and it's the minimum they can do. i'm not going to prevjudge what the results are going to be.

it's up to the fed to come clean and be transparent with what happened. >> paul mccauley, good to have you. appreciate it. as we head to break our road map for the rest of the hour regional banks on pace for the best day now since november 2020 after a period of panic selling following the svb collapse we'll check in with the ceo of regional bank ocean first financial about his outlook for the sector. >> tech troubles from meta layoffs to inflation headwinds and start-up funding challenges we'll dig into all of that with zillow's co-founder and former ceo turn venture investor spencer ratcough. >> the middle east securing a deal with saudi arabia to sell dream liners dave calhoun will join us later this hour. don't go away.

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welcome back we continue to follow the collapse of svb and signature bank you can see right there, significant rally today. that does a lot to help confidence joining us on set at post nine is chris maher, oceanfirst financial corporation ceo. it's a bank in our area here in the new jersey area as well. about $1.1 billion market cap. what have you been seeing from your customers as it relates to this, we hope, short-term panic

among some to get their deposits out of smaller banks. >> that panic was limited and we didn't see any of it in our customer base. i deal with a lot of my peers as you imagine, chair the new jersey bankers association, in the last 72 hours, i have get to talk to a regional or community bank ceo that has had any significant withdraw of deposits i think we're moving through this, the system is in great shape, there's a lot of liquidity out there and we're feeling virtually no stress at all. >> a lot of this started, unique to svb, perhaps, although signature also a casualty, because of concerns about their securities portfolio. >> that's right. >> not to mention loan portfolio to some extent and the marks being taken or not taken how about your assets? what do they look like >> we couldn't be more happy with our balance sheet we're very conservative bank been around 120 years. we have a strong tangible common equity position, and we have very few losses in our

securities portfolio sitting on a pile of liquidity, you're doing all the things you would do in a crisis, so we feel really good. >> duration does play a role here, doesn't it, in what your decisions are in terms of how you're using the deposits? how did you approach it over the last couple years? >> great point, david. during the pandemic, a lot of banks, including the ones we talked about, got an inflow of deposits, we did as well we had $1.3 billion just sitting at the fed, just kind of wave of money that came in crit critically important you made prudent decisions. we kept our securities portfolio short, kept it small and invested in floating rate assets i saw a chart that said the interest rates were at a 5,000 year low you stop and think about extending duration in that environment, it's inexplicable to me. i'm not sure why people do that. >> i think we know why they do it, right. it was eps, they were reaching for pennies. >> absolutely, carl.

and we saw during the pandemic our margins decreased a little bit. there's pain with that you have to talk to your investors and make sure they understand why our margins increased every quarter last year and we set the balance sheet up for this and i think there's a lot of banks that did that. we're main street banks, not wall street banks. we invest in customers we have only 403 customers that have more than a million of uninsured at risk deposits in our bank out of 250,000 customers. >> do you not hear from customers who say why am i with you when i could be getting 4.5? >> that's great. we hear from customers, obviously, the last couple days if they're watching the news and the concern. it's an easy hand holding conversation i'll tell you this, they recall what we did for them in ppp, they remember we were there for them in the financial crisis, the dotcom, hurricane sandy. we were the ones quickest to get them support during the pandemic

and they appreciate that and w get a lot of support from that. >> a lot of political support in the past for small and mid sized banks as well for the reasons you statds and important for our economy and one of the upshots is tougher regulation, right, higher cost of capital and lower earnings, and perhaps that's one of the big reasons for the slide in shares? what do you expect on that front? >> look, any time you have an event like this, you're going to stop and pause, and you're right, there could be more regulatory focus, but i have to tell you, these liquidity plans are something that's been around since the dawn of the banking industry if you weren't good at managing liquidity, your regulators were already in many cases on top of that i don't deal with the state of california or new york in terms of their regulators, but i can tell you ours, which are the federal reserve and occ, are in focus on this not only today, last week, but always in focus. >> are you concerned about the nature of a bank run, occurs on this, whether people looking at twitter saying oh, my god they're lining up at this bank

and saying why take the chance does that change sort of the way you would respond to any crisis? >> sure. the velocity of money is different than a few years ago it's incumbent on us to react quickly, put information in customers' hands, to get ahead of rumors and get in front over customers, but to recognize that there is this ability to move money quickly. i think one of the attributes you saw, especially in silicon valley, is almost depositors acting in concert, right broadly connected groups of depositors that were all a herd and going to move in one direction. that kind of exposure, that concentration risk, is one of the most significant things you have to manage in a financial business like ours you don't ever want all of your next one basket or kind of concentrated that way. >> finally, quickly, regional economy here in the new york area, what are your expectations commercial real estate, i don't know how much you loan to that, that can't be good >> look, you have the obvious things to be concerned about we have 1% of our assets in

urban office loans very modest concentration. the rest of the economy is doing well we're hearing from our commercial clients, they've got good order books, there has been some pullback in spending, but nothing significant. in the tristate area, the logistics are king newark has been on fire, driving business, and the life sciences business which marches on and a big industry in new jersey we're doing well. >> appreciate your coming. thank you. >> thank you. still ahead, we'll check in with the ceo of another regional player, key, coming up at 11:00 a.m. eastern time. as we go to break, keep an eye on shares of uber and lyft and doordash after the appeals court does uphold prop 22 allows those companies to classify their drivers as independent contractors rather than employees. stay with us i'm so glad we did this. i'm so glad we did this.

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there are some things that go better... together. burger and fries... soup and salad. like your workplace benefits and retirement savings. with voya, considering all your financial choices together can help you make smarter decisions. voya. well planned. well invested. well protected. today is equal payday, symbolizing how far into 2023 women must work to earn as much as their male peers did before unfortunately the news isn't great.

the gap has barely budged earning roughly 84 cents on the dollar, wages more than 80 cents that women earned in 2002 according to the department of labor, that's a loss of close to $400,000 in a 40-year career wage equality does remain a top priority for companies and they're conducting internal audits to try to close the gap our partners at just capital reporting as of september 2022, a third of russell 1,000 companies disclosed a gender pay gap analysis that took place, and that is up 10% from the last year only a few actually shared the results of those findings, and it's almost exclusively the companies at or near parody putting out that information clearly, a lot of work to do some of the banks -- >> do we know sector wise where progress is the best >> a lot of banks have been very

good and score very high in part because of that, but it all comes down to disclosure some of the tech companies are getting better, microsoft or a salesforce, but the bottom line is, it's really hard to measure and it's really hard to put out there and it's hard -- clearly hard to fix, but companies have to get better at it. it's unfair. >> kind of shocking i find it after -- i mean it's not like we haven't been talking about this for years. it's not that hard, is it? why is it intractable, sara, as a spokesperson for women all over the planet. >> there's a lot of economic things to consider here, including the different industries that women work in, relative to men, like health care and child care and education, which are lower paying, so you've got issues like that, and - >> still same job, too, isn't it, sometimes? or less so. >> companies don't have to disclose this and they don't have to look for this. >> right. >> i think it's a problem. by the way, just because it's equal payday i want to recognize

patricia schroeder died today. long-time colorado congresswoman died of a stroke, huge champion for feminism, for a lot of the laws that we have in this country. 93 for family leave people can take 18 weeks to care for a family member, champion for equal rights in the military she was on that committee and was the first woman on that committee as well. recognition of her. >> yeah. thinking of her and her family. interesting data. dow session highs are awfully closs here up 370. still to come, big interview with the chief of boeing dave calhoun landing the deal with saudi arabia airlines. watch bitcoin rallying today up around 20%, back above almost 26k over the last week of trading and the s&p, about 10 points from once again trying to get above that 50-day moving average. a ballet studio, an architecture firm... and homemade barbeque sauce.

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i'm seema moody. here's your news update at this hour president biden will sign an executive order later today tightening federal rules on background checks for gun purchasers he will do it while visiting monterey park, california, cra, where 11 were shot to death during lunar new year's celebrations the danish drugmaker novo nordisk is lowering its price for some of its insulin products by up to 75% next week that follows a move by eli lilly, lily went further putting a cap on out-of-pocket costs for patients a powerful storm hitting the northeast united states bringing strong winds, rain, to some places and snow as well. thousands of customers have lost electricity. on that note, carl, back to you. >> all right thank you very much. it is about an hour in trading on this tuesday and we are getting a little bit of risk back on. the dow up 390 every s&p sector is green.

the vix come in back below 23 and once again, the s&p trying to eye that 200-day moving average right around 3940 or so. maybe 15 points away let's get to dominic chu with more on what's moving. >> carl, we want to take a look at some of the stocks outside of the financial sector that have been inimpacted by the svb fallout. within the technology sector, for example, many of the payment infrastructure players are rebounding in today's trade. now fidelity national information services also pfizer are among the top gainers in that sector so far today that follows declines over the past couple sessions with baird analysts noting both firms count svb as a client. that's another ripple effect there. another payment in fintech names are rebounding including global payments, fleet corps and jack henry, so payment providers, financial technology, a big focus. back downtown to you folks at

the new york stock exchange. >> a lot of ones in the eye of the storm. thank you. mark zuckerberg's year of efficiency, back in focus after another round of sweeping layoffs and job cuts at meta julia boorstin with more on that for us he said it was the year of efficiency. >> he did, sdooeds, and he's following through with that. with announcing another 10,000 employees he's going to be laying off and closing 5,000 open roles, he warned the possibility that this new economic reality will continue for many years and as part of all of that, meta is lowering the 2023 expense guidance. forecasting a range between $86 billion and $92 billion, down from a prior range between $89 billion and $95 billion. saying that this is inclusive of the layoffs and 3 to $5 billion related to facilities consolidation charges and severance. zuckerberg saying the company's focused on increasing developer productivity and process improvements but zuckerberg has

a new set of buzzwords instead of talking about the metaverse which seems to have fallen out of favor, writing that meta is building the future of human connection and trying to build new ways for people to feel closer to each other using a.i. it's worth noting with the elimination of 21,000 jobs between this round of layoffs and those announced in november, the company will have more employees than did it in june 2021 zuckerberg says they will all have to work more efficiently. carl >> julia, thanks very much julia on the meta news today. our next guest no stranger to tech cost cuts saying he is concerned about start-up runways shortened amid the fallout of svb which he called an artery for the start-up esko system and the layoffs at one of the biggest names of the sector, spencer rascough joins us co-founder, great to have you back sounds like the svb stuff hit

home for you, consumeding by a part of your weekend. >> it did. i mean, look, i think i speak for the start-up and venture capital community when i say it was an insane couple days and the dust is still not really settled yet, so founders and venture firms were scrambling to move money out of svb and sort of reposition themselves and their portfolios big beneficiaries were the big banks. i'm very glad to see the regional banks rebound this morning. that's encouraging but we dodged a bullet and now people are just starting to figure out and it's starting to sink in what permanent changes there are going to be to the ecosystem now that svb is gone from it. we also had, carl, just a huge education on treasury management, something that most start-up founders know nothing about and frankly a lot of vcs if they came from technology operational roles than finance, most vks don't have much experience in treasury functions either a lot of people scrambling to

learn cash management, treasury function and other things that don't come naturally to this type of start-up community. >> it's been a crash course. you are a buyer of this narrative or this framework that okay, short-term sigh of relief, longer term, gut check on how tech and innovation will get funded and what happens if liquidity dries up >> yeah. one major thing we're trying to figure out still is the impact of venture debt and people are starting to focus on this aspect of the svb fallout svb was a huge provider of venture debt it is typical for a start-up to have 5 or $10 $5 or $10 b10 mil svb and another 3 to $5 million of venture debt. that line provided extra runway. companies that thought they had two years of runway, which is to say, cash left before they run out of cash, and now it turns out they have six or 12 months of runway, and so i mean, people are still doing that math and still trying to figure all that out and meanwhile, it's further

confused by the fact that svb is actually allowing companies to draw down their current venture lines, which is a little bit of a mind bender because it's not clear what the future of svb is. figuring out that piece will allow people, enable people to recalculate their runways and figure out what type of funding needs they have going forward and expense plans around head count, advertisers and other expenditures will be the output of that calculation. >> i wonder how difficult it's in the future without svb to access those debt lines and credit for silicon valley firms, right? easy money ended with the higher interest rates i feel like this svb collapse punctuated it. >> for sure. this might finally be the straw that breaks the camel's back in term of founder value expectations there was an impasse for the last six or so months as rates rose and vcs started to pull back and have onerous terms, a

lot of founders were not doing rounds at valuations that vcs wanted and there was such low funding in q4, coming into q1, but founders thought they had a couple years of runway, now looks like they have less and so maybe this will actually restart the venture cycle a little bit once valuations reset. >> although it's interesting, spencer, because if you have down rounds, it forces those who hold these private securities to finally take marks that they may not have yet, correct? >> yeah. so these late stage growth companies, kind of series c, d, e, were the ones with the largest venture debt lines those had the pre-ipo rounds funded by the fidelitys, the vanguards, these crossover hedge funds that had done c series, d series, pre-ipo rounds and you're right, those will have to be marked down if there are down rounds there are a lot of sort of fake valuations sitting on venture firm balance sheets and

crossover fund balance sheets that haven't been marked down. if there are new rounds done, they will be marked. >> any impact from that? we have been talking about that for some time. you used the word fake as well, talking about the valuation. >> yeah. it's a dangerous word to use when talking about banking things i guess, you know, it's impossible to he know where to mark them because there hasn't been a new mark. it's difficult for private market investors to hold the implications will be the returns that are reported quarterly to lps, these kind of paper returns, will look worse, and, you know, we've already seen the late-stage funding market dry up for the crossover funds, which is to say, the hedge funds and mutual funds that were doing mostly publics but started doing privates they stopped doing privates pretty much in q3 and q4, so i don't think them marking down privates will have a chilling effect. they've already mostly left. it's a very difficult time to be

a late stage pre-ipo company your venture debt is not what you thought it was going to be your crossover from late stage growth venture will be harder to do this going to be deflationary. venture backed companies will pull back, higher less the one wild card is rates and if there's any silver lining from this thing is that maybe the fed will slow rate raises. >> i was going to say, you know, earlier in the year we saw some relief in mortgage rates and a huge response in interest in home buying and traffic. i wonder if we see that repeat will the reaction function be the same >> yeah. well, i mean picasso had an amazing january and february when you're right, when rates started to temper and so it's possible that if the fed stops raises rates there will be more of a risk on attitude. you're seeing it today and maybe mortgage rates will have passed their peak we thought in january they had and home buying started to come back and it was a head fake and

mortgage rates started to tick up and you saw traffic to real estate sites and the stocks of companies start to come back down you know, it's a very uncertain market and hard to know which direction it's going the only thing i know is that startups are sort of scrambling to figure out where is their money. some of them wired it back to their venture capital firms because they didn't have a secondary account set up making its way back to new accounts the money is still settling in the system. >> in the sense it's really not the end, it's kind of the end of the beginning, we'll monitor what happens from here spencer, thanks. good to see you. spencer rascough. >> boeing landing huge orders in saudi arabia boosting its presence in the middle east. we'll discuss with the ceo dave calhoun next the market taking off up 425 points on the dow. the s&p up 2%. every sector higher. financial and communication services led by meta on the back

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s&p up almost 2% financials up in the lead and it is a big rebound in the regional banks. look at first republic this was a stock that was down 60% yesterday. it's a reminder that these stock prices don't necessarily reflect the fundamentals there's a lot of sentiment and confidence issues right now as a result of the failure of svb and a few other banks. we're going to continue to hit that all morning and all day on cnbc coming up in the next hour, a rare exclusive interview with the former ceo of disney, michael eisner, joining us at post nine, coming up at 11:00 a.m. eastern be right back on "squawk on the

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25 basis points. i would say at this point, the chance -- things are happening so quickly, even though it's a week away, a little over a week away, anything can happen. things are happening so quickly i just think at this point the fed is not going to go 50. i would think 25 i know people are wondering if they're going to go up at all. i think to save kind of the program and their credibility, they'll probably raise rates 25 basis points. >> that's jeff gundlach talking about the prospects for a 25 next week. although jeff was saying as early as january that fed was not going to 5, so he's been all over the map in terms of his prognostication. >> not unlike the market the fed expectations have changed dramatically look, i think the most important part of the inflation number today was core cpi services 0.6% better than expected, still reflects the problems there even if you take out shelter

inflation there, it's still a half a percent the fed is in the inflation fight, so a few more market days like this, and they will feel better going 25 basis points unfortunately, it sort of depends on what market does. financial conditions as of yesterday looked like they hadn't got past the banking crisis an the fed might have been cautious. >> it may be too early to actually know what the conclusion is, if, in fact, things continue to, but if they were to deteriorate again, it's possible that last-minute decision could be a different than might have been the case? >> i guess i just feel like this fed has been so focused on inflation and is so worried about that genie out of the bottle and we don't have definitive evidence -- we might have peaked last summer but don't have evidence it's coming down fully as much as they would like to see in services i feel like they will do 25 and say something like we're all over this systemic risk, monitoring it, you know, willing to help as we did over the weekend if necessary, willing to

adjust policies, but if we're a data dependent fed the data points to inflation problems. >> depends on the data steve liesman, i'm thinking what goldman said yesterday calling for a pause, while we agree more tightening will likely be needed, financial stability -- we think fed officials are likely to prioritize financial st stability for now. >> i can't sit up there and say faber is wrong and sara is right or the other way around. here's what is going to happen i think the flow is going to look at the flow of funds into the bank up until the night it meets. i think it's also going to be talking to a lot of bankers. i think it's going to get a sense and maybe a lot of deposits, get a sense as to whether or not there is sufficient stability in the banking system in order to move rates. sara is 100% right they definitely want to hike

they want to get in front of ifflation. they think it's necessary. i think powell would have done a 50 without this silicon valley bank thing however, when you think about the things that are important to the fed, you put financial stability in the first order it's not going to do anything to further exacerbate whatever financial stability issues we have i think it feels like it did what it needs to do to create that financial stability i think it's almost certainly unsure whether it's done enough. >> i think they pause after this if you look at the upshot of what happens as a result of this entire banking debacle, a lot of it results in deflation, weaker economy, tighter lending standards. a lot of money drying up from silicon valley all of that will have economic ramifications. these are the long and variable lags the fed will surely discuss that and will know that but for the moment, inflation fight is on. >> yeah, and it may matter,

sara, the extent to which somebody like brainard is not at the table right now. i don't know who replaces brainard i don't mean physically in that job. i mean conceptually and a person who is more concerned about the lags of the effects. and the fed could say, you know what, this is the sort of lag stuff we're worried about. faber has done a job, i think, along with myself of looking at some of the derivatives out there, some of the corporate securities and they do not appear to be a systemic risk problem, but a lot of the securities that are on the books of these banks have lower values, lower marks right now because of what happened to interest rates there are other potential shoes to drop when it comes to systemic -- i don't know if it's systemic risk, but losses to be realized in the economy. and then david, did you want to speak to that? sorry. >> i wanted to ask you a question specific to what you said earlier about the fed on the banking side here, on the financial stability side not sure it's done enough. i am hearing the same from people going down, meeting with treasury

various bankers and lawyers who are very interconnected to the banking industry they don't seem to be sure yet they have done enough. certainly not sure that there isn't going to be another wobble here down the road days, weeks, and i'm just curious as to whether given the comment you made, whether you're hearing the same >> well, let me call up -- i tried to get to the bottom of this issue is there or is there not an explicit guarantee when it comes to the uninsured i did talk to a former -- not former, current senior treasury official about that. and i don't know if we have that particular full screen to pull up, but this person said to me, the intention of government policy is that indeed the deposits are safe. notice he didn't say uninsured there's an implicit guarantee out there, and you have to figure out whether or not that implicit guarantee is sufficient for uninsured depositors to leave their deposits in institutions, smaller institutions

>> as it potentially should be, but again, we'll keep an eye on it, there's some of the statement you're referencing, steve. we'll keep an eye on it as well. moody's did change from nebative to stable in terms of their outlook yesterday. steve, thank you steve liesman. >> let's take a look at boeing shares they are headed higher this afternoon after two big orders from saudi arabian airlines boosting the company's presence in the middle east guess we're not going to show you the shares, there they are, up over 3% now let's show you phil lebeau he's with us at post nine along with a special guest >> hopefully we'll be able to show you dave calhoun, ceo of boeing along with toney douglas, ceo of reought international airways. they're part of the big deals announced. there they are we have them today thank you for joining us i want to start first with you, dave these are two huge orders, with riyadh international as well as

saudia 77 orders, total value, about $37 billion. give us some perspective on how important this is in terms of furthering your footprint in the middle east. >> well, phil, great to be with you. thank you. yes, this is significant it's big riyadh air, and you'll hear from tony directly, offers new destinations to population that's been underserved. our wide bodies, the 787 in particular, play a very key role in connecting this region of the world with many other regions. i think for riyadh air, the 787 and the connections that they have in mind are a perfect fit so we couldn't be happier with the order, the size, the scale yes, critically important, as you know, we gave guidance with respect to the number of airplanes we would produce over the coming years

this fits within that. so we know that we can serve them well. and yeah, serving the middle east in our view is a very, very important and critical market for wide bodies and we like that boeing won this one. >> tony, you just launched over the weekend. a, how quickly can you get these dreamliners into service b, where are most of these going to be used are we talking about primarily middle east, are we talking about to europe, ash asia? >> where do you see using these dreamliner snz. >> you're right, this has been one incredible week for us two days ago, his royal highness, the crown prince, pronounced the establishment of the new national carrier, riyadh air, and here we are today doing a deal with boeing it's a kingdom wide order for 121 aircraft of which 72 of them have signed up for riyadh air. we will connect the kingdom to over 100 different destinations, and this is a really important

part of the 2030 economic diversification strategy, which will see a lot more travel and tourism, a lot more connectivity to global destination attractions here in the kingdom of saudi arabia. and as dave said, there's no better platform for us than the 787 dreamliner today, super excited here in riyadh >> dave, how is ramping production going i know the faa just said you guys will be pretty much delivering dreamliners again now that you had this brief pause here overall, production ramp, not just with the dreamliner, but 737 max, how is it going this year >> it's going well it's meeting maybe even exceeding our expectations a little bit the pause, as you referenced, as you know was a performance moment and pause that lasted a little over a week deliveries are imminent.

and we produced, as i think you have commented on the air before, we produced airplanes every step of the way. so yeah, things are getting better we're confident that the rates that we called out with respect to investors toward the tail end of last year are rates we can meet the supply chain issues, while they will stay and be prolonged over the course of this year and maybe somewhat into next year, you'll recall we didn't predict any massive improvements we simply said these rates and the supply chain's ability to meet these rates isn't counting on miracles. it's simply us working with each supplier and hitting the plan. there tony, quickly, we are running up against the end of the hour any other quarters announcing in the next six months or a year or is this enough for you guys to have on your plate to begin with >> the ambition here in the kingdom is huge. and this today with the start-up is our first big order

72 wide body aircraft. there will be more orders for the avoidance of any doubt i think importantly, what i also want to share with you today is because we're a start-up, we have a blank sheet of paper, so we're going to establish ourselves as the world's first true digitally native airline, and that's going to have a brand that represents that being front and center of what we do a purpose to be a digitally led business that enables travel, not to be confused with a conventional airline and also giving the incredible saudi hospitality with an obsessional attention to detail to beyond five-star guest experience >> lots of plans toney douglas, dave calhoun, joining us live from riyadh on a day with big, big order announcement i will send it over to you >> thank you, phil i'm not sure they're quite

ready over there, so you get to look at me for another few seconds. we watch an s&p that's up almost 1.8% nasdaq up 2% big rally in so many stocks we were following yesterday in a different way. the regional banks are rebounding nicely as you look at the broader market not to mention the dow getting a bit of help from the likes of boeing, which is up quite nicely thanks to phil lebeau. oh, all right. we can keep going if you want. i'm happy to go all day long >> let me tell you this, before we send it over to them. whose engines are going to be on these planes, not just for riyadh but also for saudia, general electric that's a nice footnote to this order out of saudi arabia today. >> interesting because shares of ge have had quite a decent close. some people do point to the multiple of