that was a quick synopsis of some of the most important things that you'refá seeing.t( not everything's same-old, same-old on that s&p and yields. but we appreciate it. thanks. >> of course. yep. let'sxd get a quickñrokxd f check on the marsbm9 they have been all morning. we've builé■[çó through th%ñájf of the morning. dow indicated up by 210 points. that does it for us. wetyr&l see you back here tomorrow. right now, it's time for "squawk on the street." ♪♪ good monday óopning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. futures pretty solid as silicoì% valley bankt( finds a buyer for most of itsq assets. two-yearc yield claws it way bak to 4%. our road mape1 is going to begi with bank shares.e1

acquirer bank asse$[[tr(t&háhp &hc% plus,=ñ thet( director drop its nomination man. tim cook went to china, praising china's innovationxd a the company's long ties to the region. >> let's b: citizens as weq said, surging i the premarket, giving a lift to regional bank shares as well, svs assets, deposits and loans. this is what the ceo saidçó earlier on "squawk." ÷ remarkable transaction and partnership with the fdic that should instill confidence in ours7■ deposit system, and it'sjf also a great example of where regulators and banks come together to protect+ depositors. we have ampleko■ litr"ity and capital in this marketplace, and we're working with the fdic. we bothxd agreed that we have t% çó

this transaction. >> e1jim, you called it a road map, as we try to chip away at some of these issues. >> well, i think that there's -- the system needed to take at( breath. i mean, you reallyok just sat he and just said, okay, look,t( things are going far too fast, and if we could just figure out some çóbanks, the banks, on-y 3 of theirxd deposits were fáensu but when you see the gain, what that says is, david, first citizens was not necessarilye1 e likely candidate, buti]r bank getsw3 such a little -- ge versus what i think it's going to be, they got $72 billion loan book, i tsxjz that's rather amazing. a lot of people thought there would only be a 10% discount. if you buy oksomebody, look wha happens to your stock. >> we saw with new york .rsr&ar response from thexdlp marketplace. listen, $90 billion in securities andqt( other assets

remains in receivership for disposition by the ñrfdic. i would imagine those are the most damaged assets, so to t( speak. caused, in part, a lot of thejf concern there because it was obviously taken on when rates were far lower. let that run off over time. to your point, when you can come in on these, it tends to be a very positive transaction for your bank if done as an appropriate discount to your, again, jim, and now the fdic will say, listen, we're getting equity appreciation rights in first citizen that could make us up to half>!÷ billion dollars.t1 they want the taxpayer to know there might be some profit at the endñr of this. >> well, look,> there wasfá a recommendation today. i think key is another bank that's able to do this. i had huntington bank sharesi] the other t(day. m&t bank has the capability and the firepower. i'd like to see somethingfá goj withe1 comerica because they we

the ones that waádq oneq of the weakers. pnc didr8ju have time to get something together before. carl, i think there's a lot of companies that are looking at citizen and saying, okay, they're going to make those deals. bring on first+vx■ republic.r that, of course, what will make it, first republic might have a better chancexd of making it. it's very strategic in the sense that when you listené@■ to the of first citizens, i mean, they did y/6cit, but theyo%! not tremendous acquirer, and they're not the one ,h in using the jpmorgan total deposits, you would expect. >> yeah. they're on the tape now. deal will be immediately accretive to tangible book. does it help us avert -- i know you've been watching and thinking abous> i went over a lot of -- i was ver the most, i would say, thoughtful guy aboutd

this,ñrçó sternlicht. lems are new york and san francisco, but most importantly, it's b&cs7■ buildi, and david, we can overdo commercial rea-1ostate only just because if you're going to hang it on what are the loans, you ét on total deposits that are çó-9■ insured, then you're going to have to be very careful to be re every bank can go to that discount window and borrow against -- to helpr >> there's going to be a lot of focus on commercial real estate■ it's justified in part because obviously, a lot of these loans were made, e1again, when rates were far lower. many of themok will adjuste1çó next few years to numbers that are higher. i mean, you got, what, $4.4 trillion of commercial real estate loansxd outstanding toda. i think those are the estimatesi at least. i think jpmorgan came out with that, what, last week in a research report. about half of that's just on bank balance sheets. it's a big number. but r

are stress test it. the regulators are stress testing it. this doesn't happen all at one time. >> no. >> and there is some concern. we're going to talk to williee1 walker in thei] nextxd hour fro walker and dunlop about it. it'sjf where you want to focus you want to be bearish on banks right now. it's notxd akinq to the mortgag crisis we had in 2007. >> i think when you listen to what mayor adams said ae1 week ago, there are plans to convert things into residential. jjursq san franciscoñr is thet( fulcru. san francisco away from the a buildings is 40% fáunoccupied, according to sternlicht. he was the most bullish i've heard since 2009, because he has the firepower. bearish in the sense of how these companies, commercial real estate will do. something thatfá dave and i tal

he pure fright of these areas that are underoccupied, and i know we ip69■q call it anecdotally a scaffolding x$jblem, bu+gñ thers a lot of buildings that are unoccupied on the first floor and that's because there's not enough foot traffic. that exists in many cities but[ francisco market to takelpjf a hit. i hesitate to say, all right, you got toçó start selling this commercial real estate, typically becausefá when you go overokçó coronado's portfolio, not that bad. >> they've been sharply lower. many of those. again, we talked a lot about that. that gets back to theok work-from-home whereñi there waa "journal" story the other day indicating people are back to work, i think, more than we're aware of, certainly in the new york region orfá in metropolita areas where occupancy rates remain fáw;7ç60%. all the stocks are down dramatically over the last year. it's notfá just this year if yo takeok afáe1 look.

>> kb homesi] thisi]v talking about there are markets that are so strong. that's whereñ3[hp&l thefá comme real estate is that's new. i'm not saying i'm not buying it. i'mfá justq saying you can use green asozthe company that's probably the most stretched.tpw. they're too opaque for me. but that's where a lot of activity could bexd bad. but shopping centers are good. the shopping malls are good. i saw morgan stanley downgraded simon properties. well,fáxd why don't we just downgrade that at the5añbottom?s a strategy piece. >> i di downgrade. >> mr. wilson. >> oh, really?e1 it was part of the overall -- >> he's got to find something >> he's a strategist. he doesn't48'owngrade stocks,xd though. >> they go to more defensive -- i remember elaine, she nailedñ

the '88 and the '89 and the '91■ '92 credit and you d be mike. you just don't, particularly if you're a moment where if you're going to switch to the defe defensives, and i shouldn't just lump that to mike. that is a sector call they're making. but if you're going to saynfçó right, r walmart, i want to get more aggressive, not lessk7çaggressi. >> they do add walmart and clorox. >> colgate had a really bad quarter and they're really and a lot of that's just how general mills has come along with buff, and i say to myself, all right, don't do that now. don't do the defensives now. they have had very, veryçó big moves with the exception of the ones that did not -- that failed to execute. this is the time to gete1 more aggressive, not less aggressive. >> so,ñi you don't buy hislp to get religion on earnings? >> he gets lucky that the banks report first, and we+]■ the fdic is going to --jf >> he'llç'jjjz right. >> for seven days.

seven days in april. not seven days in may. very good book. >> well, it's seven days in w3m, then -- >> frederick morris. look, [vhinkt( the problem with being really negative here is the market's still oversold. a lot of moneyñiñi that camer the market. look at that. you see those banks? any one of those banks, whenñiñ they look at what happened this weekend with first citizens, they could line up and say, listen,ñr i'm next. >> let's not forget what didn't happen this weekend, which is nothingxd bad. and i think that's important to note. as last week went along, carl, obviously, the stock market,xdf1 was -- has been spñu of a -- >> it was back to the -0 back to the same-old, same-old tech. >> my point is, on friday, we were concerned about deutsche bank a xdbit, whether or not it was deserve iq and you know, when you look at thatjf company, wha it's done over the past couple eip r(t&háhp &hc% nonetheless, there was a bit of a bear rate on it and a lot of conversationçó aboutñi it.

and so you just wondered what's going into the weekend, again, givenñi the last two weekends prior to this,t(xd we have had great deal of activity, whether it was signature or cs. >> had a great piece ofok dot c with the flow of movement and funds has slowed dramatically. >> got the data lake on the day. >> ifxdi] i werexd jonathan bre >> jonathan gray, president of blackstone? >> yeah, and hisq 10 5-year-old father-in-law passedokxd away. great hero. i would say,ñi wait a second. i want in. z what? j$(psq in and did that restructuring. he wanted to getfá in on the collapse of silicon valley. >> okay, we're talking about that. >> let me in. and morgan stanley,i] if i want to go high-end. schwab if i wanted to gofát( high-end. schwab came on with the shares, ceo, and i'm just saying, lploo if my stock is up 50%, i want

in. that wasçó a very smart thing. >fpittlee1 late now, isn't it? >> well, first republic's still down a great deal from where it was. >> so, you're saying if andq-whn first republic, butçó it would need tod which is unlikely. well, i don't want to say unlikely.-9■fá >> it goes back to blueprint. last+■i] wednesday, our bluepri was, you know what? we're no bailout. that was janet yellen speaking at exactly the same time as jay powell. that was major policy mistake. >> true. but first republic shares are up today. we've talked about it as axd ba that's not going to earn a great deal of money but the deal with thexd hole in the balance sheet you have to putd receivership. >> you're just talking about m&a. >> i'm talking about lpm&a. >> you are? >> no, i'm -- >> no, you're talking about being able to buy things at a discountfá fggt fdic. >> that's okayfñ5■ at least somebody came forwa most of thesew3 other guys, the

dealt with this. pnc tookw3 a long look at it y said, i don't know what we're ok doing. but these guys, first citizen. holy cow. first bank of cramerg went in to have a hard looc[■ a kick theñi tires. about thei] research triangle tn >> faber and cramer. geez. you are something. >> thank you. >> you're welcome. >> when we come back, salesforce, avoiding añiñr prox fight with elliott. we'll talk about that. bunch of calls to get to this bunch of calls to get to this morning as well. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you.

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i'm unearthing my salesforce file, taking a book backfá here. what's the latest? this morning, early this morning, in fact,:6pp÷ elliott salesforce, not unexpectedly, declared lppeace, declared love. kind of feel the love there. marc benioff saying, "i thoroughly enjoyedq gettin■■ know jesse and the team over the i'm grateful for a5■jesse's minl and constructive ideas and look forward to a good relationship withq them." withq them." jesse for his v great respect for marc and his team and has been deeply ongoing commitment to profitablv growth, responsible cap9t911ññrd of course, salesforce shares have had a great yearfá so far.

there's some of the excerpts that we're talking about. why are they saying all these nice things? well, they're standing down. no new directors.ok no new directors will be!u■ nominated or therefore have any chance of joining the salesforce "/q-ñt(credit, jim. of course, elliott wants too take credit. we should point out, they've never gone toñr a proxy figh÷i e in theçó united states to a vot. never. not once. thpt did in ñrkorea,xd inñi sou korea. but everybody wants to take credit. you know, salesforce will tell you, listen, wee1 put a plan in place in september and then jeff smith came ko■in. we accelerated things, and where are they now?xd 27% operating marginxd guidance for this year and they say they will exit q1 of next year atñr % operating margin guih8@e.ñi last september, they had a 25% target over a couple years so they had accelerated that and of course they had that very strong quarter the morning after wexd ( ellio nom!neut for the board of

directors.ua" cf1 o so, not unexpected,e1xd right? >> no, añr lot of people --ñi elliott's vigor, it hasqñiokokt but also i used to write with him, he's a terrific guy. i know thewelt thatfá they -- i think exceeded their greatest expectations when they reported that quarter, but i wasñi surprised, where was the love earlier? i think there's going to be a, let's say, a friendship that's for real. mark's going to do something that's different. let's call it different. remember the housee1 bill? this is the exact opposite. i think there will turn out to be a lot of mutual affection, and that's good, ñrcarl, becaus there were a lot just traditional shareholders who decided that it was time to go with marc once he beat the ñi quarter. i mean, traditional, you know,ñ like fidelity, and i think that shows there's a sense thaé■[ t now, it'se1 interesting on i]

really a focus of the amazing we had from jensen huang and nvidia, but i would say marc is very+■ gung-ho abou that. good outcome for everybody. >> well, a couple things. one is, if you listen to the c.o.o., they're notçó donee1 cug head count. >> they're not. that's a very important point. >> well,i] they've got to reach thosexd marketing targets and the cost side. >>é@■ goldman today takes a+■xdt overall generative a.i. the t.a.m., $150 billioni]lp ve overall software t. a.m. >> i didn't like th8(v piece because they talked about long-term productivity, and i think it very much is in disagreement with the kind ofq industrial part of the gpt that jensen huang talked about. i just didn't buy that. i do think that we're getting to a have and have-not world, david,ñi?;■ where you have thes when you have the enterpriseb.■

software companies, there's ones that are making money, and then there's ones that are still doing are losing interest in those rather xdrapidly, so it's important to recognize that salesforce has now jumpede1 the queue and has come in, literally, at the top, alongnb■ with a very unheraldedi] adobe quarter, because adobe was the one that i think jensen huang working lpwith. >> and they also are doing a lot &háhp &hc% generative a.i. in a very significant way with new products. see an awful lot ofjf computing power from stories todayq about the cloud providerse1 benefitti overall. >>s and and the losersym■ areñ1 people you often mention.ó5yrñ o be the case. >> goldman could substitute upì% to a fourth of current work witq generative a.i. ráh"eflationary. jay powell -- >> about 25% unemployment. >> that means a lot of people

get to workñrçó on friday.!u■ dash," countdown to the opening bell. bell. again, ake a look att f [office sounds] ♪upbeat music♪ ♪♪ ♪when the day that lies ahead of me♪ ♪♪ ♪seems impossible to face♪ ♪a lovely day (lovely day)♪ ♪(lovely day) (lovely day)♪ ♪(lovely day)♪ a bank that knows your business grows your business. bmo.

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i like getting paid correctly. all right, let's getñi to a "madq dash."xd q%9 you want to talk micron. >> they report tomorrow, and they have had a series of re look at this. this is often the case of a prelude to a better quarter. nobody's looking for anything, which i really like. this morning, we have steeple

talking about how it shouldt( n be ae1 good number because of =1%9%9 we havez( a very negative piece about micron talking about, they expect to see numbers go lower. my contactsç'iu(v there's absolutely no bottom yet, but that's okay, because what you have to do is get in when + no bottom, when there's no bottom. so, that is exactly when you have to buy. so, my take is fáthis.ó[■ you want this to come down a little. i don't know how much it will come i]down, simply because if u think that the inventory glut is almost completed, which i do, with hp is probably the best [ì% example, saying, listen, we have had a really bi@ i]fine. you have to say, buy now, by ater. buy now, pay later. >> you're getting constructive on the stock. >> i have to. we have 37% decline in pcs. pc cycle is usually a three-yea] cycle, and we're getting into you might just be able toe1 get lucky onñ@@xd cycleq basis.

micron is doing a very good jobr there was work from home and then shutdown. now you're startingc to think about that third year. we're right there. and i'm getting -- marvell did not give me a g week. they were very concerned. but the cyclesñr are all runnin very differently. the analog cycle never ended. the analog device and technician cycle never ended, which is rather incredible. they just kept going and qokgoi but this dram commodity cycle, i think it's run its course. the stock has been in thev quartile or top quartile. >> okay. we'll keep an eye on it. about $65 billion market value about $65 billion market value right now for ui-i=99

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>> announcer: the opening be, is brought to you by nuveen, a leader in income, alternatives, and responsible investing.q the reason the deposits are flowing to the big u9-m1ñ the reason that credit suisse was government is because banks hav1

this premiumi]position, and it'1 unfair. it's an unfair playing field that puts enormous pressure on regional banks and community banks, and that needs to be addressed. we need regional banks in america. we need community banks in america. so, once we get through this stress period, we have to come up with a regulatoryñr system tt both ensures the soundness of &háhp &hc% fair and even so communieiç bans and regional banks can thrive. we do not have that today. >> that's kashkari on xdcbs sayg it's brought recession closei to the u.s. >> i've been continuing with the addition from this crisis, just because behind the scenes, there's been an incredible tightening of credit. banks really cracked down. there's a lot of people who sayd look, we are near recessions. we can't lend as much. at the same time, you havekb ll these looking atfá what just

happened and ko■saying, okay, l, we have a path. we know there's a path, both for the losers and winners. the losers don't want tor but i'm not veryçó heartened, a i think that is at( little too negative out of this framework. >> let'sçó see what happens tod at least.e1+■ let's get the openingr f1 o the big board, it's con u. celebrating its 200thlpçó anniversary today. and at the nasdaq, two sigma ventures, recognizing leading women in5a■ a.i. jim, it does raise the question, ■ 100 having raise the question, its best quarter in over a decade. >> it is incredible. the nasdaq 100 is a combination of nvidia,e1 becoming a differe company, i xdthink, mega, seein much more oriented towardt( may

a tiktok versus reel. advertising. we'll hear that from snap andxd pinterest. but then there's just a belieft that apple, we were worried very much about apple just literally four weeks ago, the supplies, and then david, you know, the pressure seems to be off amazon. i the amount of money that people think that amáb can■3 save in their current, wh i thought ratherfá meager, layoffs? i mean, talk about a couple billion dollars. >> in the -- it was announced last week. >> 27 altogether, but people -- they're not building new jobs. there is an amazon factory of the future thatfá uses nvidia. non ready yet. but the one that we're all still waiting for. i think that alphabet has solved a.i., because whatxd they do is they've made it so if you're a local advertiser, it's even better than ever. it tells you all the ones that are nearby. >> i think it's a little early to say that google h78solved

all its problems with a.i. >> no, a local advertising problem they had, david. no, they haven'tçó solved alliì% their problems. but there's a local advertising problem, and they have a justice department problem. justice department, you can't reallyiabuy them. they'refá rep@îi=um1e■ independ. >> apple has a great product iì% f8purchase in youtube, but what have they done s! all thosee1 other bets. has anythingfá happened yet? by the way, microsoft has now put themselves in some contention, at least, in terms of search as a result of the bing. >> well, youtube, they're putting some fees in. but no. i think thatxd the problem with alphabet, frankly, is that it's a bit stale. i agree with david. sking the question. >> no, i agree. >> they have onet( of the greatt products of all time, thefá highest-margin çx)oducts, and obviously the company over the

years has done incredibly well. >> they have a great advertising business. >> the money they spent on all the other%i3w■bets, including a &háhp &hc% they behind and now they're cutting rates? >> well, i think that --ok i thf put all the money behind google cloud, which i think is for real. >> okay, right. >> moveñr that money there. david's right about the other ñv bets. i mean, another bet. the bets have been -- remember, they had two health care departmentse1 going. +árp+e everything going, carl, you kind of, like you won the super bowl and then you nevera5■ok come bai i mean, it looks like free agency is estimate. >> well, you mentioned amazon. is 50% upside. let me just say, amazon is a company, i think people should realize that behind the scenes, it's trying to make itytz that

it's customer first. q'%e■3w■ customer-centered, whi means it's very difficult to just lay off people in the warehouse. because you don't know who in the warehouse is getting thexd product to you. but he cuts in the center office. een, i e1çóxdñithink, way too pragmatic about those. they're really for real. david, those people made a lot of money. they're not likebkmeta. i mean, meta, we keept( waiting for mark zuckerberg to come up is closed. what's the matter with that? i had to check in to how much those leases would take to getx out of. >> do you know? >> a hundo. >> a hundo? >> a hundred million bucks. >> you think they'll do it? >> yeah. >> you to? >> they have the money. what do they need? why do they need it?xd no one else wants to be in new york. >> oh, that's brutal. >> i'm just saying, they don't need it. they want to work at the office.

you have them workr office. >> he does want them to work at the office. >> mark zuckerberg has said over andçó over again, instagram is doing better. reels is picking up because ofñ tiktok. )(y we forget what -- >> whatever happened to the metaverse, by the way? >> it's okay. >> whatever happened to payment? >> no, i don't have any -- >> what happened to local? you ever tryñi dating? i'm just wondering, this theme meta asçó to what -- >> he's devoting time. >> -- what they've actually doná beyond their core product. >> is there anybody inxdt( si$i% valley who is doing anything special?i]t( >> yeah.cm cf1 o >> nvidia. i mean, you gotx:"*p()háo nvidia. it wasok so enlightening, and a lot of it is -- thgñ reason why

it's notfá being talked about i because jensen is mr. partner, mr. partner, mr. partner, andçó because he's actually kind e1e' he doesn't want to say, t(xd lishs1 i'm crus.) theok late gordon, such aoki] t at the beginning of jensenxd huang's speech,fáq he talks abo howñi moore's law is outdated a when you look at the obituary of moore's law, he tooe1 said it would be outdated. you don't getifá the incrementa power with these small chips. intel has been teaching thisfá week -- i don't know if they'll week -- i don't know if they'll address this -- but jensen wy& not so az off. the man who invented qmoore'su■w is the one who say, qmoore's la has runq itse1 t(course. >> sort of ine1 thati] area, pi today out of ubs, they go to buy. if it's not a 52-week high, it's awfully close. >> when youó4wjjz at thehtr)y

they're talking about meta doing well, snap doing well, ttt doing i wish we could speak to bill ready. >> you can stick around if you would like, 10:00 a.m. this morning. >> i got a morning meeting. i gotñi my bigc investing club.■ tomorrow,fáñi david -- >> convention? >> yeah, we convene once a month. we're a club. like thelp elks. >> all right. >vbsik >> yeah. >> toast masters. >> we built a bar.my■ david, they'll be out there. >>gw3 elks club. ?< can you just ballpark, hitñre transparent, now down by about close to the■k biggestxd giveawn

history, particularly if you -- p r(t&háhp &hc% and thew3xdxd "wall street jour they're going to need more caterpillar equipment. now, caterpillar has been saying, jim, listen --ñi this i whatúrc said last. now, this onexd isr before it was not doing well. just bring down the darn downgrade because you will bejfo wrong when that federal money comes. right now, the state is trying to figure oud gcs. once again, the general cq.p(ujtátáháo ca sell it. be my guest. go ahead. sell it and send me a note to your funeral. >> it's a downgrade. baird goes to underperforming with some neutral onlye1 a mont it's two downgrades in 35 xdday. >> well, i wish him all the best of luck in the world.ñilp >> by the way, they also take down uri. why take itfá down now? i mean, what, you thinkxd you'r going to get it right backxd in?

198?q good. for the investmentok club. you can't. nobody's that good. nobody. nobody. >> nobody. >> guys,p.ú the banks, of course, because people are having a strong morning. >> what do you think of that? >> what do i think of it? >> yeah, the banksok having a >> well, i think it'sñr indicate we'rexd closer to the end of th mini-crisis than we are to the beginning. >> we should be buying back banks. >> what was an algo trade? >> selling banks, buyingq stats. selling companies with bad balance sheets. >> you could say that about virtually anything in this market. >> but not oil. oj maybe we doévxd talk enough about the power of the %y■ models. >> we should, becauseqçó you señ them. >> they doqejjujáujñi amounts of money onfá a daily basis, an things out, and çóreally, it's usually them. >> that's okay.q when real investors come back,

that will change. >> oh, really? real investors?q when is that going to be? >>çói=dwhenxd moneyfá marketsi] payingr >> who are real investors, by the way? who are we even talking about? >> who are the real investors? well. david, okay, let'#y4jñ it? that's a myth. ou had a vision not unlike bugsy segal had with las vegas. i had a viisñ abouti] nvidia. q8at's the matter with that? >> are you comparing to stock market to las vegas? >> well, just in terms of particular business model. >> the active guys make money. picking stocksi] come back, 199. >>çóe1jffá david, i]no, no, thi contra fund. he's beaten the market consistently. s&p, first of all, it's an active fund. let's just own that. >> yeah. >> when they drop whateverq ne'er-do-well banking comes out next, they're going to put in

palo alto network5a■!u■e1xdt(xd got four qs above gapw3 earning soé@■ it's constantlyçó updatin 13.3% of the s&p is made up ofq microsoft. >> what do you want to do about apple? they went to china.p,■ not bad. ijfi] t. >> not bad. ñxd still there. given the percentage of sales that come from that country, it's not unsurprising, given how many iphones are made in that country. not unsurprising. >> but you neednb■ the beginninf return to chinau■ñr of so56zez the -- the people who work hard in china. i mean, if you don't getçóq the 1uj)q)e, he's ready to roll in china. obviously, nike had a good quarter inmy■ china, despite th fact they didn't havemy■ a good quarter÷"áju country. >>xd right. >> so, the defenses are doing well, david. %y%9, david. what is pepsi doing at $180? is that just the algo? >> i don't know, jim.

know. >> reassuring. >> what can i tell you? >> i don't w3know, carl. >> they're doingñi well. not as well as theñjjjus7■ toda. >> well, the banks, if everybody can get a piece, i'm ready. i mean, lookçó at this. i e1mean,çó it's ñrunbelievablet citizens with the few deposits being insured was readyñi to go. being insured was readyñi to go. strong case t(that, youaq nexjdçó thing you're going to s ism'u'tington bank.r they have a really good -- colin frost. >> next thing you're going to see? what does that mean? what are you talking about? >> well,xd because next -- if you're first citizens right now, you're saying, i just made y■p fortune because i got my loanñi( book protected.e @r(t&háhp &hc% the loan book probably isn't what you think. so, ifñr first republic goes do, so to speak, there will be other banks that are saying, i, too, wantñixd my stock to go up 254 that's a giant move. >> i agree with you, but you're making a lot of assumptions to say things about these banks. nowlp i understand it.lp

first, you need first republic. any longer, but to be taken into receivership, which is not going to happen. >> the system took a breath. the system took a breath, and guys aren't seasoned acquirers. you think huntington is just, like, we're ready? you think çóm&t=bank, which hadn unbelievable letter to shareholders is çósaying,w3 go 6 ahead, first republic, makei]v- day? >> are you talking about consolidation or distressed m&a? >> if you'relpe1 first republicu just got greedy, because you know, like, well, look, the biggest one that i was worried about was not the biggest issue, not being able to buy anybody a good acquirers. we knew the guys that knew how to acquire all had 10%. >> first republic is not goingh% )é

to -- it may not have to happen. >> right, but my point has been were interested are only interested in doingçó so with government assistance a la svbú and first citizens we're discussing, and the only way that governmentt( assistance wod actuallyzv■çó be available woul if th receivership. >> but if they went into receivership, there's going to be ten banks that want to be çó. m&t bank. why not? >> nothi&/é■ nonexdq of that's -- >> we can go to silicon valleyx was dead. it was dead. who wanted that carcass?ó[■ >> are youq a believer in the bullard school of thought that attention goes back to inflation? >> fáyes, i'm with bullard. i think thate1 unless there's conditions, thenq we're back on the 25, 25, 25. and look, i think we'rexd close. i have a lot of data that i gavf in a letter as i was speakingñr%

the investment club, a lot of data which e1says, we're on our way, but there's still!u■ almos was in 2019. ? if about, we're not qthere, az)q pu. a lot of it's because they're not building en6,z houses or cars, not enough rentals.$x■ there's still just realfá issue in the system5a■ that they can' seem to5a■ solve, and the darn g rates don't go qup. >> right. meanwhile, we're going tojf get corefá pce number on friday. i know b of a isñi lookinga5■ f 0.4, and we're coming off one of the hottest numbers we've seen. >> i think we have to know how much it reallye1çót(+■!u■ is. he's got cash ready.ternlicht.÷j look, it's still -- i mean, david, there's in place and he wants to win. he wants to seeñi how much this last ratee1 hike hurt because i could be hurting, buta5■ he kno that the battle's not over. >> powell. >> yeah, powell.q if he wants 2019, he's not --

c& trying to understand thew3>x!ontractioy implications of tighter credit that results from this crisis that we hopefully are towards the end of. >> you know, supply chain.wápr(% we still have -- you don't have enough electrical parts to finish mostxd of the hos9 automobiles, you're still short a lot of parts. you havexd an incredible amountq inflationary legislation coming outñit( of washington. you do have snap. snap just ended. >> the legislation that has already been approved. nothing new. >>çó s.n.a.p.ñi ended. you now have borrowing on credit card. that rate is up really big, but youñi still have the short -- lg money, short time trade. travel is still big. i mean, ion't know. it's t(delicious. >> carnivalñr just printed narrower than expected loss. they say they're well booked for prices. >> it's exhaustingçó if you're y powell to think about how

there's so much -- there'sxdc j way too much. he still has añr lot ofi]t(ñi w do. what's he going to do? take it to seven? whoever's buying the long bond, saying, we're about to have a rece( what realm, if you stayed with theseçó ban recession? >> wait, you're saying different things. >> no, i'm not. >> you're saying that inflation is still present, and you'req indicating powell will keep going. at the same time, you're saying if you save the banks, why are ut a recession? >> i'm saying that i was actuallylpñr just -- i was agre withe1 james bullard. i didn't mean to stick my neck out. if you solve the crisis, as opposed to neel kashkari, if you solve the crisis and don't get a 100-point increase. i feel like i'm captain obvious.

>> solving the crisis doesn't mean, okay, no more bankçó failures. it doesn't mean they're not going to still pay more for their deposits, that their cost of .=mds is not going up and that they're not going to be more -- >> and that'st( why you go 25 a not 50. he needs tojf know what the fdi premium is going to be. >> you were saying laste1 year that would be a hundred points. >> i had a vision friday night that first citizens bank shares, onet( of my favorite banks, by e way, which is located r i went home and i had no voice. that's why you didn't hear. >> you thought it. >> i thought it into my head. it was right there along with miami beatinglp texas. but no. >> that was a great game. >>t( not if you had texas. >> not if you hadt( xdjftexas. i thought miami was just -- >> second half, texas didn't show. >> well, miami's defense is pretty tough.'c■i] >g@■ not one iota.

>> i have not agre%ep with you n anything thiséílorning. that's true.çó!ìáhp &hc% every so often, it happens. not today. >> he didn't like my micron call. >> your micron call seemed very reasonable to me. >> feel better? >> much better. my throat feels better. in on the cnbcfá investing club with jim,lp just go to cnbc.comr use the qr code on your screen. r(t&háhp &hc% markets today. two-year note auction at 1:00 and that two-year yield has climbed its way close to 4%.lp be right uñp)y ♪ icy hot pro starts working instantly. with two max-strength pain relievers. ♪ so you can rise from pain like a pro. icy hot pro. we planned well for

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keep your eye on tesla today. 3% gain here as barclays reiterates an overweight and says they expect the company to beat deliveries on q1. although morgan stanley looking at some elevated inventories of batteries in china. big source of tesla profits as it might it might b ♪ great estimations ♪

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let's get to jim and stop

trading. >> we had an amazing quarter last week by general mills lost in the shuffle because of the banking issues. barclays and mizzou raised their price. they have some of the staples doing very well. it's a remarkable company with real growth. [ inaudible ] inflationary growth because the brand names are so powerful. no one has traded down. so i still like general millions even all the way up here. >> they continue to be aggressive on price. >> they were -- they got it. able to take price and no issues. so it's rather an incredible story. i think the story can go much higher. >> what's the story tonight? >> i'm going to have the chief. david is busy watching the show and he will know that -- he will be like jim just winged that one. i spent a lot of time -- >> never wing your show, never. >> thank you very much. >> wingstop downgraded to sell. i thought that was wrong. >> we didn't get to. >> yeah. >> cheap shot. >> and ollie's either.

>> supply chain issues at ollie's. guys ever been to an ollie's in i bought good books at ollie's, 10 for like $6. >> really. >> no holes in it. >> a tarp with no holes and water damaged books. >> how it do you think i got rich? >> see you tonight, "mad money," 6:00 p.m. eastern time. when we come back, a lot more on when we come back, a lot more on this first citizens-svb ♪♪ the only thing i regret about my life was hiring local talent. if i knew about upwork. i would have hired actually talented people from all over the world. instead of talentless people from all over my house.

good monday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with david faber and mike santoli live at post nine. sara eisen is on assignment and we will check in with her later this hour. markets getting a bit of a boost with lessening on the banking sector, dow up 230, s&p south of 4k with a bunch of calls bullish and bearish on the sell side. >> we are 30 minutes into the trading session. here are three big movers we're

watching. keep an eye on salesforce. elliott management ditching ambulance to -- nominate to the board. shares of first republic popping on u.s. regulators considering more support for banks to give first republic more time to shore up its balance sheet. talks in early stage. first republic up 16% off the opening highs and we're watching first citizens today the bank announcing plans to buy silicon valley bank deposits and loans that includes the purchase of $72 billion in svb assets at a discount of $16.5 billion and first citizens up 7% to start. >> we've had two different quotes on that, though. we've had fcnca also, right, has been up a lot more than that, i believe. >> two share prices. >> i think so.

that is up 42%. you see it. the other ones are up as you see 7%. mike. >> yes. obviously, you know, bank rescues instead of new bank failures is part of the story this morning and it's kind of an interesting, you know, entre into the week because the big question i think has been why has the market held up as well as it has and two to three weeks since we first were in this mess and i think one of the answers is most stocks haven't held up that well. >> back to equal weight. >> yeah. >> i mean the equal weight was giving you a green light in january, telling you there was a lot to this post-october rally. it's faltered. last week it went back down towards early november levels. i think only 60% of all stocks are up from the october lows in the market. so there has been this loss of internal energy in the market and a lot of cyclical areas have reset and what do we know, the

indexes have been protected by the mega cap growth stocks. that's the story a couple weeks now. the real question is, how does that resolve? how does that unwind if it does? there's a world in which as you're seeing today regional banks are up 4% to open and some of the stuff that's really been washed out can recover, assuming the economy itself is not immediately faltering. i think the other part of the story is, you know, i think it is really worth constantly reminding everyone that five or six weeks ago, we're talking overheating economy, right. if you believed the real gdp tracking in the first quarter from the atlanta fed and inflation, we're at 8% nominal growth. we're knocking some off. i think that explains a little bit of why earnings system or at least the faith in revenue growth is not going entirely away. it doesn't get you out of the fact that bond market is screaming there's a problem, the way the yield curve is set up. all the rest of it. i think it's been this kind of uncomfortable moment and then you have the fact that people remember that rescues are not to

be sold, they're to be bought, at least in the last couple decades. so i think that kind of helps to explain sentiment has not been excited, more fearful. people chasing gold higher at the end of last week. money rushing into money market funds, some coming out of bank deposits but some is taking shelter from stock. >> right. >> if mike wilson is right and the bond market is figuring something out, he believes equities will follow, you don't necessarily think that screams doom? >> it doesn't scream doom. i don't think that overall market can sidestep that indefinitely. i'm not saying, you know, the market has the skeleton key and we're going to turn it, and it's all fine because we previewed the down turn. i do think and i have said for a long time, if october was the low, we got off relatively easy based on valuation, where we settled at, based on we wept -- went down 25% in the s&p and

that was it. i still think there's probably potentially things to work through, but the nominal growth story is different and it can go away in a hurry and employment is not a leading signal but so far things have remained intact. you have to make assumptions about what the credit contraction means, either pro or or con, behind that. >> couple thousand points. >> kind of amazing. that's piled on so much market cap that it's obscured the weakness elsewhere. it's gotten expensive again. the premium of the nasdaq 100 to the s&p is right back to where it was november of 2021. that was the peak in the nasdaq. so now we're back to having that argument, you know, microsoft and amazon, are they really staples? what are they. and alphabet certainly. there's been a little more of a back and forth in that group today. it's not the story of why we're

up, at least this morning. >> interesting. the tech story and sort of how regulation fits into all of that which we've talked about off and on the last couple years. >> we have with a particular focus on the doj and the ftc and the biden administration given their more stringent approach to regulatory matters. the ftc and doj holding a spring enforcers summit. that's going on right now. chair lena khan took the stage last hour to talk her outlook for antitrust and addressed the artificial intelligence apps and programs and things of that nature and how she views that competition. >> when you have these moments of technological transition, when the underlying technology or underlying platform is potentially about to shift, that's when you see the incumbents start to panic, right. that's the lesson of microsoft, that's the lesson going back when we were seeing the shift from desktop to mobile.

you see the incumbents having to resort to anti-competitive tactics to protect their dominance. this is another transition we're looking at to make sure if this is an opportunity for competition to enter the market and disrupt, we're allowing that to happen rather than illegal tactics. >> interesting perspective there. a point we made a number of times, we talk so often about the generative a.i., openai, chatgpt, barred at alphabet, but they're very expensive to run. >> yeah. >> not just compute powering. getting ahold of the data, the enormous data sets, it's not as though you can start company and have access to what you need to run those in a broad way. so it will be interesting to see how it all figures out. the fact is, microsoft really is supporting openai with the

enormous amount of money they've dedicated towards owning a portion of that company. >> it's not just i created a user interface and have a algorithm and it's going to be a better mouse trap and we can own this area. it is fascinating with microsoft being there as the one trying to seize on this and, you know, as they did with web browsers and all the rest of it. you know, there's some echos there of how prior moments of disruption, you know, were taken advantage of by a dominant player, you know, the doj noticed back then. >> yeah. of course, the focus continues, for example, for lina khan on microsoft and activision, a deal we talked about on friday, when microsoft got much more positive news from the uk's antitrust regulator, the cma, many ways reversing some of the opposition they had when it comes to the console market and their view of it in that country. there's still an issue of the cloud market, although it's a relatively nascent market.

and then there's the question as to whether the ftc will continue with its case to be heard by an administrative law judge some time late in the summer, i think perhaps august, they need to have that deal, the actual agreement extended as of june if, in fact, the ftc doesn't drop their opposition. seems unlikely, but if they were to get the go ahead from the cma and the eu, you never know. >> for sure. i also find it interesting given that all else being equal, this would be a time when you would probably see the big tech companies mopping up a bunch of, you know, other players that came public in the last few years and fall on hard times. >> so little they feel as though they can really do even with the smaller deals up to challenge as we know. amazon irobot, for example. >> exactly. >> private equity is what people talk about but there's just -- i mean as much dry powder as

they've there's only so much capacity. they can't move that fast on many fronts at once. >> no. we have to figure in what's been going on in the debt markets and capital markets which have been quite quiet of late. >> that's right. >> no deals last week. >> none. i know. that's a big deal to have no deals. >> that's right. >> and that does point to the ability of private equity to be -- it has been pretty active, but to your point, how much can they without real debt financing be available to them at a price they want to pay. >> the clamp down on the capital markets that have the attention of fed officials. neel kashkari with a warning about commercial real estate this weekend saying it could be the next domino to fall amid the broader banking turmoil. here's what he said. >> sometimes it takes longer for all the stresses to work their way out of the system, so we know that there are other banks that have some exposure to long dated treasury bonds who have some duration risk as they call it on their books. we also know that commercial

real estate, there are a lot of commercial real estate asset in the banking sector and some losses that will probably work its way through the banking sector. that process will take time to fully become clear, but fundamentally, the banking system has a lot of capital to be able to withstand those pressures. >> 2.5 trillion worth of cre debt to mature in the next five years. that's a historical record. elon musk joining the bears calling it, quote, by far the most serious looming issue, mortgages too. diana olick has been tracking that action and joins us with more on the rising risks. we know the regional banks account for 70% of some of this lending. >> reporter: yeah, absolutely. that's why i want to take you through the numbers, not just the big ones, but really get down to the sectors. it's important to understand that most commercial real estate value has dropped simply because higher interest rates make borrowing higher limiting investors' abilities to do deals.

fdi and shared banks hold the largest share at $1.7 billion. this year and next there is a huge pipeline of commercial mortgages hitting maturity that need to be refinanced. the concern is office. of the $270 billion of bank held cre loans insure this year about $80 billion, 30% r on office properties. so property owners who need to refi are up against higher borrowing costs and lower property values. one rescue strategy gaining steam in office is conversion to multifamily. like at this former d.c. office building converted by philadelphia based developer close brothers. even they admit it won't entirely save the sector. >> 30% of the office stock in citis in the united states round numbers is obsolete, but maybe only 30% of that works as a conversion of the existing

treasure to multifamily. so there's a huge amount of office space that's obsolete and doesn't have another use for the building as it's built. >> and because of lower property values and the current bank stress, several experts say deal making has essentially ground to a halt and the cmbs market is largely shut down. a data expert at trepp told me there is no capital out there for offices. back to you guys. >> yeah. no capital for offices. all right. let's get deeper into that state of affairs in the real estate business. joining us is willie walker, walker and dunlap, chairman and ceo, and somebody we rely on to give us perspective. three years ago, we started talking about work from home and everything else. now we're in this mini banking crisis where everybody is looking at the commercial real estate on banks' books, mortgages, so to speak, that were, obviously, given at much lower rates. how much of a concern broadly

speaking, let's just start there, is it for you in terms of the credit quality of that commercial real estate and the relationship between the banks that have offered it and what they will be doing if, in fact, some of it comes back on their balance sheet, so to speak? >> good morning, david. great to see you. i think you have to look at it in two ways. one, talk about the banking sector and whether we will have other failures in the banking system as it relates to commercial real estate, the question being asked right now is, is commercial real estate going to cause a bank failure and jpmorgan came out with a research report last week stressing banks across the system as it relates to their cre commercial real estate exposure and took some really significant loss severities on their office portfolios and retail portfolios if we go into a recession. that would be the next asset class in a recession. the net net of that report, it's an earnings issue to banks.

it's not a solvency issue. so from a tier 1 capital ratio standpoint you could have significant defaults in cre portfolios and it's not a solvency issue unless you get a run on the bank. barring a run on the bank it's an earnings issue. >> meaning what then? meaning that we can weather this crisis? what is it? i think 1.5 trillion comes due over the next three years. you're not concerned or let me put it a different way, how concerned are you? >> there really isn't liquidity today for office. okay. so as diana said in the piece this morning, $80 billion of office loans term in 2023. so finding capital to refinance those loans is wildly challenging right now. so what ends up happening is the orns of the property have to put more equity into the properties and then lenders come back with what are now exorbitant rates to get the property reese financed. the issue is that's not a systemic issue. everyone is trying to figure out

in the jpmorgan research report they had 20% of office loans defaulting in their scenario and stress test and even with you have 20% of all outstanding office loans default over the next three years, you still again don't get into big degradation in tier 1 capital. you get an earnings issue. even in their most highly stressed and concentrated bank, it's a 10% preprovision earnings hit. banks right now have to figure out are we going to restructure these loans and allow the owners to continue to operate them or are we going to foreclose? the issue on foreclosure you foreclose on an asset and now what will you do? there's not a liquid market to sell it and get 60 cents on the dollar for their loans. >> a lot of the restructuring would require, it would seem, new money to come in. we talk about class d office buildings that don't have great future unless there's a way to

convert them to residential, requires the local municipalities to offer tax breaks. isn't that going to have to be a part of this entire conversation? >> it is. there are plenty of properties as diana pointed out getting converted. the big issue for major msas where you have the real issues right now, i mean you look at the three highest occupancy or vacancy rates in office today, they are houston, dallas and san francisco. in those major msas most of those office buildings are large footprint office buildings. when you have a 20,000 square foot footprint you can't put residential nool that because people need windows from a safety and soundness standpoint. the larger the footprint the harder to convert to multi. it's much smaller office buildings that are projects to be converted and there are plenty of those going on across the country. that's not going to save the industry. you have to have banks come in and rework the loans and have the special servicers work with

them. one of the other pieces that's important to remember is, you know, "the wall street journal" loves to put on the front page, blackstone has defaulted on an office loan, but in cmbs pools the leading indicator, we don't know about balance sheet nearly as clear, office delinquencies are still below 3%. the asset class is still performing very well, and so while everyone is trying to find that canary in the coal mine as it relates to what this impact might be, the office loans done by cmbs were lower leverage with higher debt service coverage than cmbs. so you still have over two times debt service coverage on those office cmbs loans. working them out is really the only thing to do. >> right. to your point the underwriting was stronger than it was, perhaps, let's call it five to ten years earlier. if there is no willingness on the banks to sort of put new

capital to work here, there's still going to be development. people are still going to put up office buildings in certain places where it's deserving of that. where does that capital come from or what does it mean overall for the commercial real estate industry. >> that's the big problem, david, as it relates to banking crisis we're seeing right now because local and retail banks are the ones that make construction loans. as they pull back and try to have massive liquidity on the balance sheets, they're not going to go out and extend that loan for a construction project. they are fearful for a run on their bank and want a lot of liquid assets and construction loans aren't liquid assets. you don't get new supply. the existing inventory inflates in value. rents go up. the inflationary pressures come roaring back. it really is a very significant issue as it relates to getting liquidity back into the regional

and local banking system to write new construction loans. what you will find on this, the reason we have so many deliveries right now is because every bank and debt fund was ready two years ago. it's essentially a two-year development cycle in the multifamily space. you look out and say, q2 of 2025, there will be no deliveries. and as a result of that, the existing inventory goes up in value and rents go up. >> right. the marketplace adjusts. it's a longer conversation, one that we will continue in the months ahead, but certainly appreciate you taking time this morning. thank you. >> great to see you, david. as we head to break here, let's give you a road map for the hour. what investors do with bank stocks from here. a number of them as you have seen are rallying following that deal for assets in svb. live from one of america's biggest retail conferences shop talk. the ceo of pinterest joins us first on cnbc. and live to beijing where executives from some of the world's largest companies

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i screwed up. mhm. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? you can almost feel the drag when people walk by with their phones. oh i can't hear you... you're froze-- ladies, please! you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do. that and the paycheck. some of the biggest leaders in retail convening in las vegas for this year's shop talk conference. sara eisen is live on the scene fresh off an interview with pinterest bill ready. hey, sara. >> hi, good morning. good to see you, carl. yes, here for shop talk where

bill ready is a newish ceo of pinterest, joined last summer, came from google where he ran e-commerce and he's on a mission to reframe pinterest as a shopping and e-commerce platform. they actually made some news here where they announced shuffle, which is their new app, kind of a collage making app growing really fast with gen-z will do direct links for shopping. so all part of the transformation that he's trying to pull off right now at pinterest. i asked ready are you convincing wall street here? because a lot of people think of pinterest as a scrapbooking social site, not necessarily as e-commerce. here's what he said. >> more than half of the users are there to shop. what we're doing is making it so it's not only solving digital shopping but opening the stores to find the things you find on pinterest. it's a big part of how we excel crated growth with users and growing faster through the ad

market even through a downturn, grow faster than our peers, despite the downturn in the market. >> you are an ad revenue model company. >> that's right. >> where does the shopping fit in? do you take a piece of the transaction or charge higher ads. >> we're an ad model connecting the user to a place to buy from. we're not a retailer and we have no intention to be a retailer. we don't take commissions because we're not a marketplace either. when we say we're opening up all those storefronts, it's the storefront of all of the retailers and brands that want to connect with those users. so we are fully committed to being great partner to retailers and brands. >> from wall street's point of view they want to know the monetization strategy, how much will this take to invest doing a strategy change around pinterest and how quickly does it pay off in a hard ad market? >> you know, it's a choppy market out there and, you know,

i can't say any better than anybody else when loss choppiness in the market, but as a 1% market share company, what i've told our team and said on our earnings calls, the 1% market share company, even in a contracting market, it's such a huge market we can grow a lot as long as we can demonstrate better performance. we're completely differentiated from the rest of social media. most of social media, if not all of social media in the western world, has the user in a lean back entertainment mode. on pinterest the user is in a lean forward mode with intent and purpose, there to shop, put together a great recipe or plan travel, and that lean forward intent we can go help the user take action, which is great for the user, it's great value for add partners and a great source of revenue. >> at the same time we're in a period where across technology, you're seeing efforts to boost efficiency and cut costs and manage expenses. seeing layoffs. where are you in that process?

>> you know, so i've talked about this on the last couple earnings calls that we're committed to finding expansion in our business, but even more importantly, we're helping our advertisers find more efficient sni their business. as we've been bringing better measurability into our ad products and better ability for our advertisers to connect with nooursz a way where -- nooursz a way -- users in a way where they're connecting bit of. >> a.i., everyone has to have an a.i. strategy. how far along are you into that process when it comes to boosting consumer data? >> yeah. so, you know, a.i. and computer has been at the core of pinterest for some time and we're now tasking that a.i. with creating better shopping recommendations. we're seeing good results from that. tangible evidence of that. when a user looks for related items on our site which, you know, you can discover in real world imagery, so, you know, in

town last night, as -- if you thought, i want to have that pair of shoes she wore on this set you can find an image on pinterest, what those shoes were and pinterest will also make recommendations of okay, here's those exact shoes but a whole bunch of ones like it shop the look and we consistently get 95% plus relevancy from our users on those recommendations. when we have pointed to a.i. toward the shopping problems, you know, 95% plus relevancy from users is phenomenally high and it's both because of our a.i. capabilities, but a.i. is only as good as the signal upon which it's acting and we have 450 million plus users on pinterest that make these product associations so when we pair that with really good a.i., that's how we're able to make the fantastic -- >> are you more advanced on a.i. than your competitors? >> i would say the primitives of a.i., the building blocks,

through cloud computing, the building blocks of a.i. will be broadly accessible via cloud compute. the big difference is, who has data sets, who has first party signal to inform and train the a.i., and then who has a user experience that is unique that both gives the user a great experience but also collects more signal from tooursz make better recommending day -- users to make better recommendations and we feel we're well positioned with the next generation of a.i. >> speaking of dance videos, tiktok's ceo on capitol hill, how does that benefit you if tiktok is banned in the united states? >> people don't fully appreciate, we're fundamentally different than the rest of social media. most of social media is about entertainment, users in a lean back mode for entertainment. we have the user in a lean forward moment with intent or purpose to shop or make or do or buy. so, you know, we're very focused on not only how we fulfill those

intents, but i think one of the things about social media broadly, is i do think social media broadly and i've commented on this publicly, i think social media broadly has started to have a lot of toxicity, deeply embedded in the business model. and it was -- the business model about what to make you view the longest and what makes you view the longest is things that trigger you, made you feel angry or envious or upset or worried. and those instinct are the things that a.i. and social media started to prey upon. and so i think, you know, not only for social media but with the next generation of powerful a.i. it's going to be important that we're much more intentional as an industry about what we ask the a.i. to do. i've come out and publicly committed that at pinterest, we're using that a.i. to build positivity, that we want to lead to better mental health outcomes on our platforms and we're off to a really good start on that.

we've released research with berkeley, users that spend time on pinterest come away feeling better, protecting against rising burnout and anxiety and so we want to continue investing in how we leverage the next generation of a.i. to build a positive platform to help people feel better about themselves and to do more in the real world not just stay glued to a screen. >> not ready to go after tiktok. analysts are excited about the fact that they could gain in ad market share if tiktok gets banned in the united states not to mention engagement with 150 mill people in america on tiktok spending at least an hour and a half a day. obviously, would benefit all the social sites. i thought it was interesting he used the answer and opportunity to draw a line between pinterest and other competitors and i think that the subtext there was meta and twitter and tiktok where the a.i. and the business model is built around what he

calls toxicity, negativity. videos that pick up a lot of steam that are often negative and he's trying to prove that you can have a business model where that doesn't exist, where it's positive, where people come to get inspired and shop and that's really how it fits in with the overall new strategy change and the changes that he's making at the company. so far wall street is impressed. the stock had a good year. but clearly there's questions out there. it's way off of the highs we saw in 2021. >> nice upgrade today over at ubs. interesting, he did everything but compare social media to cigarettes which benioff has done. sara, does raise the larger question of how the consumer is fairing in the new post banking stress environment. we've seen conflicting signals on credit card data lately. >> sure. and that's going to take some time, right. we have to see just how severe the credit crunch is when it comes to banks and lending and know they will tighten up on lending and the question is how much.

there are big questions as it relates to the pinterest conversation about the ad market. one reason the knock against the stock and other stocks like this is that they are dependent on ads and you heard him say it's been choppy. he didn't get into specifics. they're in a quiet period ahead of earnings but that's been the concern. if folks like ready can prove there's a higher value in the ads, which is why ubs upgraded the stock today, then he's got sort of a differentiating story and narrative on wall street. ultimately, look, it's cyclical and going to come down to the economy as you say because we don't quite know the impact of the banking crisis and like all these ad companies and media companies, they're going to be exposed. as far as the consumer goes, lots of conversations here about where the consumer is. you have to have a strong brand. you still have to have pricing power and be in the right categories. tomorrow on "squawk on the street" i will bring you a conversation exclusively with the ceo of levy's, chip bergh, here at this conference, i'm going to do a stage panel with

him and talking to tapestry ceo, because we want to see across luxury if that's starting to break. it's been the last man standing when it comes to the consumer and being able to really so he some seriously high prices and not much of a slowdown so far. >> for sure. look forward to all that. we'll talk to you again soon. >> thanks. markets backing off a little bit here. s&p 500 up about a quarter of a

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a good start today for the regional banks. they are moderating their gains. to bob pisani with what is moving. >> what we need here is some other things to start moving. regional banks and tech has been the story in march. take a look, they're all moving up. silicon valley bank dmeel hopes that -- deal in hopes that will calm down. we have to get some of the cyclical stocks going. it's been a nothing month here.

all of the big cyclicals, caterpillar, dow, 3m, boeing, they're all down. it's been about tech holding the market up. we've talked about this repeatedly. some of the stuff that's moved, all is flat to slightly down. i want to point out how big cap tech has carried the s&p 500 this morning. apple up 9%, netflix, sorry, nvidia, microsoft, apple, microsoft, nvidia, 50% of the tech index right now. 50%. think about that. salesforce has been strong, cisco strong. if you look at the equal weight s&p 500 tech it's up about 6%. excuse me. the market cap weighted is up 6% in white and the equal weight is flat this month. that shows you the big cap tech to, are sort of carrying the market at this point. nice to see some diversity. seeing some cyclicals move as we move out of the first quarter into the second quarter. we don't have the final numbers

but look at the inflows and outflows from the international etfs. international equity has had big inflows. u.s. equity has had outflows. that is very unusual. that has not happened in a long time. treasures had big inflows. treasury etfs, corporate bond etfs, carl, had big outflows and that, of course, everybody is talking about buying into those short-term treasuries, the etf business, that's where the money was in this quarter. >> thank you. bob pisani this morning. honing in on the banks in particular our next guest holds, wells, truist and regents and believes the bank crisis will run its course quickly. chuck lieberman, managing partner. thanks for the time. >> of course, carl. happy to do it. >> talk about the first citizens deal and how much solace you think gives the market right now? >> i think it gives a little bit. far more important is what's

happening to the deposit flows. we're hearing reports that outflows from regional banks have slowed down a lot and that's what market needs to gain some confidence. >> not necessarily going in reverse, right? what needs to happen to bring i guess us back to at least a semblance of where we were prior to the outflow? >> yeah. what investors need to see is confidence in the regional banks. that's what undermined the market and set off the capital flows into tech as a safe haven what bob pisani talked about a moment ago. you really need the market to come to realize these banks are not going away. this is not a repeat of 2008. and if we saw more money go into the regional banks that would be very positive for the market. >> we mentioned your holdings at wells and truist. are you necessarily running back to the big money centers? >> those are absolutely safe havens. they've also sold off.

really is strange that money has come out of some of the regionals and gone into the money centers and yet the money centers have sold off. it shows you that there's a general flight to safety. people don't know what's risky, what's safe. and so they latch on to what they think is safe and that's why tech has been a safe haven. but the big money center banks are absolutely a safe haven. they're attractive. >> chuck, you're an income investor, look for dividend growth things like that. not surprising you own some real estate investment trusts. how are you feeling about them and the need to be selective after that sector has been really kind of bombed out. >> that's exactly right. you need to be selective. so we're really not into office buildings. we're not into apartments. we're not into industrials. those are relatively expensive. they haven't been great performers. we're looking for, shall we say, one off, so places where the

market is not enamored and one area is some of the health care reits. those sold off during the pandemic for obvious reasons, but the nursing homes are coming back. they're seeing steady improvement in occupancy. they're having trouble hiring people. >> so is it your sort of macro house view that the next year or two is going to result in either a change in lending standards or difficulty in refinancing commercial that will have -- that will result in big macro pressure for the economy? >> well, i think part of that is yes. certainly what's happened is very disruptive to the economy and that's part of the story of why there's an expectation of a recession and we share that view. but mostly it's likely to be a mild recession. i don't see a major decline in

the economy. the fed needs to slow down economic growth. that's what this is all about and why they've been raising rates steadily. and as they accomplish that, they're going to get the slowdown that they want and then the pressure comes off of them as well as parts of the market. in terms of real estate, real estate is very, very diverse and so we own some kimco, for example, a shopping center real estate company. we think of that as very, very safe. we own simon properties. the big shopping mall. the company has done very, very well. it raised their dividend multiple times. we think that's a very good place to be. so you have to be selective, no doubt about it. >> we were talking about the wide spectrum of real estate. good stuff. appreciate the guidance today. chuck lieberman joining us. thanks. >> thank you, carl. >> all right. top gainers on the s&p to start

the week. see first republic up 14% after that deal

if you follow restaurants you will have kate rodgers back.

will post a notice in stores in maine, new hampshire and massachusetts that it will not close stores or discriminate on the basis of union support. so far, just one chipotle store in michigan has successfully organized and that's with the teamsters union. we did not hear back from chipotle so far on any comment, but we'll bring it as we get it. back over to you. >> kate, thank you. let's get to dominic chu with the sector story. >> what's up, carl? markets right now posting solid gains to start off the new trading week. nearly every sector is in positive territory behind me, powered by the banks. we're seeing relative weakness in two important sectors, communications services and technology. mega caps like apple, meta, nvidia, lower on the day. although nvidia is reversing losses. they've been outperforming against value sectors like energy and financials.

computer chipmakers broadly underperforming, broadcom, intel, the laggered and chips have been viewed as a leading indicator for the tech trade. keep an eye on those. i'll send things back to you at the new york stock exchange. >> dom, thanks. shares of carnival cruises have been cut in half over the last year. fresh reresults thisorning are m

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executives from the world's largest companies impaered in beijing this week. it's the country's largest forum since relaxing the covid rules. eunice yoon joins us. >> reporter: beijing's message to all the ceos there was that china welcomes international business. president xi jinping's chief of staff read a letter from his

boss that said that his boss was dedicated to an open china. now, in public, the bosses of apple, pfizer, bridgewater, png, among others, all expressed their support for china's development. apple chief tim cook said in a side session that apple and china have had a, quote, symbiotic kind of relationship, and pfizer's albert berla told me his company was aligned with the healthy china 2030 healthy initiative. the pharma giant signed an agreement with china to help improve the country's health coverage. the forum wasn't able to escape the concerns about the sour u.s./china relationships. not only did the forum not attract as many u.s. ceos as it has in the past, the talk privately was very, very pessimistic about the geopolitical situation,

u.s./china relations as well as the uncertainty over the business environment. while this conference was under way, five chinese staff were detained, who had been with the u.s. due diligence minsk, saying they shut down their beijing office. >> eunice yoon in beijing, discussing a very important discussing a very important issue overall thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back.

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good monday morning. i'm carl quintanilla with morgan brennan. ben anchor is with us. we'll get his warning on the pivot to the speculative growth names. later on, an exclusive with carnival's