with the overall pattern and it will if so if an older but a goody, goody, ban yell. >> we're going to have that exclusive interview about the "wrestlemania" host and more "squawk box" begins right now. good monday morning. welcome to "squawk on the street." futures are mixed after opec gives us a surprise abduction number we'll still get the jobs number on friday. the row numbers deliveries top

422,000. after months of etching. why by opec police it's about a million and a half barrels of water a day >> r they were making so much money. he was cut in half so it's really well timed. but overall. from we're going to lit it up with om no so they may do this but this may

only take off might have been a problem with demand anyway so i don't want to get too excited about it what i do want to know is when you speak to the drill diggers they think russia is going to have a hard time producing as much next year it will be very interesting to watch if russia becomes less of a watch in hower and oil >> three that is something she might have walked about. >> and ard oil and russia were the two bigger

expected this cut couple of months ago, and so our forecast is still unchanged q2 average, $82. q3 average, $84. >> i think that's right. >> that make sense to you? >> yeah, i think that's really common sense i know there are some people who felt that oil should be dramatically higher, but when you go through all the different notes we've been getting, everybody's ratcheting back what they thought could happen in the second half of the year. why should oil go up when everyone is saying, listen, we don't have as much demand all the way across with the exception of tesla, and we'll talk about that. there aren't many people who feel the second half is going to be strong. you take this much off, that's not that much. >> what about the notion that -- the white house, some argue, blew it on this spr, and not only that, jim, they committed the cardinal sin of leaving a potential customer out to dry with that promise at $70 >> i've been thinking about this all weekend and trying to think about it diplomatically because i don't want to be perceived as

being pro or anti, but i feel like i'm a big believer in strategic petroleum reserve. i don't think it's been obviated by the fact that we've become a better producer, but yeah, i mean, you say you're going to do one thing. you got to do it let's just leave the orb of politics i mean, if you promise me you're going to buy at $70 and then when you let it go down, i would say, well, either you're a bad trader or you're not honest, and i think that you reap what you sow here he didn't get the greatest short trade in history i think i could see people feel that he was -- that he dissembled or forgot or something. we never heard exactly why >> no. all we heard is grant holm came out and said, it's going to take longer than we thought >> i would love for the president to talk about it, but i think if i were the president, i would say -- you know --

>> meanwhile, china, the boom appears to be in progress. macao. >> did you see those numbers >> my goodness 250% for the month that's a post-covid high >> it's funny. we don't see many numbers that are so much better than expected going on these days. all the research notes and everything, that's slightly worse, that's not so good. but ppg had a really good quarter, and some of that is china, and macao is strong, so i think we're starting to see china play a role. i know lee cooperman talked about that we were waiting for when it's going to hit i mean, even nike, this could be fantastic for nike starbucks, we talk about how a barista was fired, how about the fact they're opening a starbucks every nine hours over there? i think this is their time obviously, they've switched the cold brew. boy, their latte is good >> let's talk q2 q2 gain was good core pce was light on friday

volatility has collapsed i see gerard cassidy this morning said the bank deposits have stabilized. >> unlikely rally from four weeks ago. >> yeah, but how much bleeds into the next month, at least? >> i think they marked up a lot of -- "they" -- i think traders marked up a lot of tech. there was a lot of marking up, but i think that we're going to see, unfortunately, the banks start. you had a little frolic here until the second week of april, but i think the banks are going to be their quizzical selves we're very uncertain it doesn't pay to stick your neck out if you're a banker. so, i think that that's -- they're first. they create the pall on the market we can go down into them because nobody wants to go long into bank of america, jpmorgan, great companies, so i think we go up a

little and then down, and because everybody -- be afraid of when the banks start talking, and then the banks will let us down they'll be bad what are they going to say, don't worry about us and i think you get that rally again. >> we're going to get to the m&a this morning on several fronts >> someone's making some m&a money. >> yeah. i got an upgrade of slg. >> that was a shocker. >> yes out of bemo today. >> slg, we've been reporting on it for "mad money" about how it's these office buildings and they're banking buildings and the things that are really being hurt from work-from-home now, they would argue, listen, they're really being hurt by higher interest rates. that's what really determines it but i thought that note was very interesting, because i think people at home have to understand this. one of the catalysts of the call was it's the third most shorted reet and they can sell that. six assets worth 3236. this is the beginning of a squeeze, and we didn't

recommend -- i don't like to recommend on squeeze, because that -- you're trying to predict behavior but this piece was a very important piece, because everybody's given up on new york real estate, except for the people who are trying to rent it in the same way, there was a really great note from boston properties about, i guess, two weeks ago saying, listen, everyone thinks the salesforce tower is kaput, but we get calls on it every day to lease it, so maybe the reports of the death of office real estate are exaggerated. >> right i mean, i wonder, does the storage reets this morning -- >> how about that deal that was a deal creating the largest one. that's been a very good millennial play. millennials down-size, they put their stuff in storage obviously, we'll talk about endeavor with scott, but this is just the kind of note with just this value out there now, one of the things i think that has really hurt us is that a lot of people are really afraid to do deals because

justice department, ftc, they've -- they've really put a wall in deals, and i think people at home should know that when you think about president biden, it's not like the oil companies, and has discouraged takeovers, which then has created -- there's no floor on a lot of stocks. i always felt that when certain stocks went down so much, they would look like they're going to merge. but that's not been the narrative, because i think that lawyers and bankers are afraid to say, look, you'll be fighting the ftc. you'll be fighting justice, and that's -- they're tough. >> or sometimes, you fight the actual target. i see stratus is here, rejecting the other tank -- the canadian miner, rejecting >> i thought that was an incredible thing those guys, here's another one that's very interesting. glen corps is a very smart buyer, and they know copper really well. and this tech has really unbelievably good holdings and

they reject the bid because they were going to split up but at the same time, what matters is you want to go into glen corp. and say, what do you know, guys you're some of the smartest guys in the world why are you trying to buy something at this point in the cycle? if you wait, doesn't it go lower? i think there are a lot of people saying, listen, there's -- don't be so -- today's a day where you just say, don't be as bearish as you were, because people are finding value. >> some value. >> if you find value, it's potent >> speaking of which, when we come back, the judge is with us this morning scott wapner's exclusive on the deal to merge ufc with wwe take a look at the premarket here we'll kick off a very busy week, including durables and factory orders >> and employment. >> and employment. we can't trade here. more "squawk on the street" in a minute

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endeavor confirming a deal to merge ufc with wwe, forming a $21 billion global live sports and entertainment giant. let's bring in scott wapner, who talked exclusively with ari emanuel and vince mcmahon. >> exciting weekend. thank you very much. endeavor won the battle royal for wwe after what our own colleague david faber reported last week was a "hot and heavy auction. endeavor will merge its ufc brand with the wwe, forming a new company that will eventually

go public on the new york stock exchange the transaction values the entity at some $21 billion, that's $12 billion for the ufc and 9 $9.3 billion for the wwe d that is a substantial premium over their current $6.5 billion market cap after the deal closes, expected in the fourth quarter, endeavor will hold a 51% controlling interest in the new enterprise while existing wwe shareholders will hold a 49% interest how exactly did these two parties end up as tag team partners we asked ari emanuel and wwe founder vince mcmahon during an exclusive interview on sunday in los angeles where the wwe was holding its two-day wrestlemania extravaganza >> this is the biggest thing ari emanuel and vince mcmahon have ever done. combining forces like this, there's nothing like this. there's never been anything like this they're going to be talking about this for a long time

>> there were a lot of other suitors. >> sure there were, but ari, really, the synergies, everyone was very interested in this, and i appreciate that, but the synergies that ari brings, totally different than everyone else >> that said, many doubted we would ever see this day, that you would ever be willing to sell a controlling stake in your company. >> right, right. >> you are the wwe and the wwe is you so, why? >> it's the right time it's the right time to do the right thing. and it's the next evolution of wwe. i could probably do what ari is right now, you know, take me ten years. by the time i would grab those ten years, he would be ten years ahead, so it makes all the sense in the world for all these synergies that we have to extract all of the value we can out of the marketplace >> the deal values ufc, you mentioned some numbers, $12 billion, and wwe at

$9.3 billion that's a big number. the wwe's market cap is $6.5 billion >> here's what i would say exactly why we did this. we weren't getting the pure value. i don't think the wwe was getting the pure value combined, it's rarefied air. the two of us. and i think the analysts will be able to do it. it's good for the shareholders of the wwe and for the shareholders of endeavor and then, when you look back, i don't believe that the endeavor shareholders were getting pure play for the rest of the assets that we had, and i think for the first time, you now have the ability to do that in both situations and that's a win-win, which is what vince and i have always talked about >> when i throw those kind of numbers out to you, i mean, the word on the street was that you wanted $9 billion. this values the wwe at $9.3 billion >> right >> so, despite everything that's happened -- >> i'm a visionary >> well, you hit the number. >> yes deservedly so. >> but here's what i would also say to you we paid a fair price, and i'll

tell you why we paid a little bit forcontro premium. with our cost cuts, their new deals coming up, which is right now. and our cost savings that we think we can extract from the business right now and grow the business with all of our levers, whether it be international sales, domestic, sponsorship, gambling, all the things that we do, but i think it's rarefied air. i would also say to you, when i bought ing, everybody said i overpaid it was actually one of the cheapest deals in sports for sure, when i bought the ufc at $4.2 billion, everybody was, like, crazy. we've tripled the ebitda in that period of time and now, with this, this is going to be ufc 2.0 as it relates to all the things in the flywheel that we can bring and we have unbelievably attractive economics the balance sheet's incredible our debt ratio is less than

three times. our free cash flow conversion is unbelievable so, i think when people look at this business on a combined basis, and also look at the remaining assets for both shareholder, it's incredible >> now, the newly created sports and entertainment giant will have emanuel as ceo with current wwe ceo nick cohn staying on as president of the brand dana white continues as president of the ufc, while mark shapiro assumes the role of president and c.o.o. of both endeavor and the new company the wild card throughout the bidding process was what role, if any, wwe founder mcmahon would play after a scandal revealed he's paid millions of dollars in hush money. he left the company for nearly six months before returning to lead a potential transaction, and most had assumed mcmahon would leave altogether if a deal happened, but he is staying on as executive chairman of the

board at the behest of emanuel himself. >> what i thought was interesting is that vince is going to be the executive chairman of the new company. >> right >> that implies that he is going to have a say. >> well, i would have said the following. i would have body-slammed him if he thought he was going to leave, because as i said to you before, here's a man who has seen around the corners at every beat over the last 40 years of this business. and has a vision for where this business, way before a lot of people see it. him now being able to utilize what we have built in our flywheel, i'm the luckiest guy in the world, because i got vince mcmahon, a visionary, that sees around corners. i got dana white, and what we've built. that is pretty unstoppable >> so, you wanted him to stay? >> oh my god, yes. >> did he have to convince you to stay? >> not that much >> would you have been -- >> i love what i do. i've loved building wwe all my

life it's my passion. and to have an opportunity to have it grow like this, exponential standpoint, can't be better than that >> it's an interesting plot twist, because not a lot of people saw this coming in fact, your own ceo, nick khan, told our david faber back in february, "vince has declared to the board, to me, to other upper management, he is 100% open to a transaction where he's not included in the company moving forward." >> sure. >> you were ready to walk away >> absolutely. >> i wasn't going to let him let me tell you, we have a relationship for 23 years. there's a trust. there's a friendship when you're going into business and going forward, i think that's important i'm glad he chose us, because it was a very competitive situation. but for us, it's an honor and also we're so lucky because of his vision about where the business is and where it's going. >> what happens if you guys disagree executive chairman mcmahon says,

i think we should be doing this. ceo emanuel says, no, i think we should be doing this, and this is my show what happens >> well, what happens there is we have a little contest in the ring >> some people are going to say, he's not joking. >> all right okay i outweigh ari by a hundred pounds, so i think that's the answer >> but seriously, what happens >> here's what we said, and i said it to him if we disagree on something that we want to do, guess what? we're not doing it it's the relationship i have with silverlake. i would never put that -- and it's the relationship i have with dana. dana's got the say as it relates to ufc vince as it relates to the wwe he's going to have the say we have nothing to do with the creative process that's vince's, and that's dana's situation all the back stuff, we're going to try and do what we do i think that's what he wants but if there's a disagreement,

that's called a relationship we will work it out, and that's how we have it >> let me make it clear. i thought you worked for me. >> on the creative side, vince, do you plan to be as involved as you have in the past on the creative side? >> yes and no. on a higher level, yes in the weeds, which you always love to get in the weeds in the past, no can't do that. >> what happens if vince says, you know what? mr. mcmahon, the character, decides he wants to get back into the ring. you let him? >> his choice. purely his choice. >> that's not going to happen. >> i also asked mr. mcmahon about the emotions of parting with a business his father founded back in 1953, whether the scandal that rocked the wwe and mcmahon himself ultimately led to that moment

you will hear that part of our interview within the next hour and one more important note. i'm personally represented by wme, a unit of endeavor. it's a talent agency that represents several cnbc anchors and on-air reporters, including the two of you >> indeed. >> many of our colleagues, so i want to mention the full interview is up on cnbc.com as we speak he mentioned, ari did, during this process about the analysts and how they're going to judge this deal, thought it was interesting that many of the notes that i read going into this interview didn't see this necessarily happening, jim, and i said to ari, what did wall street miss? his response, in a classic ari way was, "everything." >> well, henry reese is my agent, wme i think that one of the things that i need to get clear is that subscription sports, if you can move it from just one area, like let's say it's premier league and it comes here. this is ours, and it can go

worldwide. i know from take 2, they -- this is one of their great sellers, wwe. so, maybe people missed that this could be an international, well loved subscription product, which is subscription, i know, from what i do here with cnbc, is the stickiest and the best thing to have. >> they -- you know, the television deals alone with fox and our parent, nbc universal, are up for renegotiation those expire next year there's a separate deal with peacock that was signed in 2021, so that's around for a while as well they think they have a juggernaut, and they, ari, in the way that he has tried to think of the properties they have now and the ufc, is going to try to leverage the whole thing into different areas, whether it's subscription or streaming. it's going to be interesting to see whether other streamers come out and try to negotiate new deals as well or if our parent company, nbc universal, and fox,

for example, re-up their own deals. there's a lot on the plate still to be done, aside from all of that, they still have a new board to fill out. there's going to be 11 seats endeavor's going to fill six wwe is going to fill five. they have to fill out a lot of stuff, and then they're going to go public again. >> let's say people at home are trying to figure out what it's worth. there's a new co and old co. what's old co? >> old co is endeavor as we've known it >> i always thought old co was really good but it's never gotten valuation >> andrew was asking you, which name you'd want to own going into this deal >> i know. i happen to love subscription business this could be any subscription business we're talking about this is one of the stick jiest a friend of mine who worked at the street worked there and we were marveling that no one cancels. >> we're in an environment where streamers are trying to take content and amortize it across

the world, but you got language barriers there are no language barriers with this. >> no. just think about it. that's, i think, how everybody's trying to get their arms around it now you've got the ufc you got the wwe. all now under one roof you've got, you know, two businesses that have excelled in live sports, which are the gold standard of television these days, and they think the power of those two brands combined under one roof is going to be extraordinary. >> well, maybe -- when you think about what ari said, and i speak to ari, maybe there's a snobbishness going on. like, the analysts don't watch it now, strauss zelnick says, jim, if you went, you would understand it's raving. it's just maniacal, and it's all sorts of ages, but maybe wall street itself -- >> now you're getting into what some call the yellowstone, ""ducky dynasty""

bias >> some of the best money i've made is with ross stores and with t.j. maxx because the analysts -- burlington i went to burlington the line is all the way out the door, but there were no analysts in the name. >> it was wrestlemania weekend in los angeles >> yes >> they had live -- so, they had a wrestling event on friday at the old staples center, now crypto.com they had wrestlemania on saturday and sunday night at sofi and tonight, they have another live wrestling event >> isn't there a basketball game >> basketball teams are out of town they're going to dominate l.a. over this four-day period, and the convention center next door was loaded with people all over town with wrestlemania stuff the wrestling stuff. we know how popular the ufc is it's going to be interesting to see how ari harnesses all of that, and i asked him, how are

you going to run all this? he's the ceo of this new company. he's, like, i've already got a ton of brands under the endeavor roof as it is. i've already figured out how to do that, so that's not of great concern. >> is there a comp that we can use? how do we try to value it? something that -- >> that's what you're supposed to do. >> well, i mean, look -- >> you're the is expert. >> there's formula one, but maybe formula one is too corporate. i don't know >> you talked a lot about live events i mean, live nation doesn't reflect it, but certainly msg does >> yes, yes, well, look, i think it will be interesting to see. i think it's going to be a little hard initially for people to understand because the new co, old co , by the way, the ticker symbol, tko >> technical knockout. >> k.o. is owned by another company. >> that is true. this will be tko and we'll see when it goes public and i gather that's going to be a reasonably exciting day here at the new york stock exchange. >> absolutely. >> in front of you guys,

certainly, when that happens and i think it's sooner rather than later >> thank you >> great stuff, scott. >> you ask tough questions i think a lot of people are concerned about those lawsuits and what happened, and you were right there. >> i would urge you to tune in at 10:00 a.m. when i get in specifically with vince mcmahon about the scandal, what it means to his legacy, and just how it factors into how this whole thing came together, how it might have affected the timeline and even his willingness to do a deal we'll do that at 10:00 >> we'll see you in the next hour scott wapner fresh from los angeles. we'll get the opening bell in about a minute's time. jim, what do you think about the notion of starting a quarter and a month with some deal activity? >> i like it, but i hated what happened at the nasdaq it just walked up. there were no real buyers. it was just a couple aggressive people oil, people are going to start saying it's inflationary we know that i don't think it's that bad. i think it's okay. i don't like a start where -- i like the merger parts, the rest,

though >> keep an eye on it the dow futures hanging in there, reflecting some of the volatility that's been introduced by opec this morning. let's get the opening bell and the cnbc realtime exchange at the big board today, the new york center for children, helping victims of child abuse and at the nasdaq, an electronics manufacturer and services provider, sanmina >> very good company. >> i'm looking through the calls today. we should probably get to tesla, jim, and ask the deliveries in the quarter. bernstein, we're going to talk to tony next hour. >> the stock's up 68%, so you wanted this good number. you're talking about -- we were -- if they were gm, putting out these numbers, or ford, we would double those stocks. it's a very impressive series of numbers they're putting out, and i know tony's focused on the price cuts i think that there's no advertising. they sell themselves we're doing -- the president's committed to charging stations

all over the place i'm looking at hertz right now for a series that i'm doing. steve schurr 25% of the fleet is tesla. it's an amazing company, just own it don't trade it on the quarterly figures. just own the fact that the demand is amazing. china, yes, byd, but the fact is that we make the gold standard company in this vehicle in our country, and it's gold standard in china and germany, very impressive people should say, that's why it's up. can it go further? we need to see the margins i don't know how much they're making per car, but it's very impressive, and i know jim farley's a competitive guy, but he wants these kinds of numbers. mary bara wants these kinds of numbers. >> it's no surprise that ford this morning on path to reach their target of 600,000 evs by year-end >> i know. >> 2 million by the end of '26 >> jim is trying very hard now, they are -- it's a very interesting thing, what's happening there. they raised prices twice for the

150 lightning. we can sit here and say, there's price sensitivity to the mach-e. how about the fact that the 150 lightning, no price sensitivity. they go up to as much as $90,000. you can't -- they're going to start taking orders again, but ford ev is not -- is not -- people don't understand. the f-150's an iconic one, and notice that the big worry for ford had been tesla coming into the market, but whatever happened to that so, i like ford here my trust owns it it's been very disappointing >> meanwhile, people still talk about what the smaller players have to do nikola files for a huge common offer. >> i know. you go to the mall, man, i saw lucid and pole star in the mall. it's very interesting. i'm with lisa, with my wife, and she goes, pole star, and i said,

well, it's actually voluvo, whic is owned by china. she said, no she said, let's look at lucid. i said, they're having trouble making them. she said, to hell with that. why do we need these there's tesla. tesla is a really good company >> no surprise at the opening here, marathon, conoco, >> we're telling people in the investment club, it won't last and it's good to lighten up. i think -- they sell six times earnings, but the analysts were caught by surprise it was sunday. they were doing whatever they were doing they'll come out tomorrow and raise numbers and raise price targets, but then i think you want to let some go. >> meanwhile, it's taken some wind out of travel names, namely airlines and cruise lines. >> you saw there was raymond james was gearing up on the united air >> alaska.

>> and look, we don't -- those companies are heavily levered to fuel, but i -- look, i think the travel piece is still very much on the stock that always concerns me is, why is american express so stuck here? american express is a company that's levered to aggen x, gen and the millennials. the sign-ups are extraordinary i was looking on tiktok because i wanted to have some brain cells destroyed, thinking really smart. there was this amazing america's best tiktok, and it was like -- and i've been an american express member since 91982, and it had all those features on the tiktok >> are you ashamed of them for advertising on the platform? >> no, i'm ashamed that i didn't know -- no, i think they are so much -- steve squeri is the ceo. so much attuned to the new generation really wants to know about points i mean, my wife takes the points

they really want to know about all the features, and i think that the wall street, not unlike what we talked about with scott, there is -- i keep thinking it would be a great piece for "mad money," maybe a series the snobs, the wall street analysts, they're not looking at the points, but people in their 20s are counting -- because of the debt from school, they're counting every penny, and when they take a trip, they're looking and seeing what american express -- >> you should do a whole show just called blind spot about the street's inability to look at, as you said, valuations in wrestling or media or streaming. >> strauss, i refer to him because i don't work for strauss. i'm connected with wme but strauss is saying, jim, you've got to go with me to long island to go see a wwe, and so he knows my wife so, i said, we should go she goes, not on your life i saidstock.

>> right >> he talks about how there's guardrails and we're going to be really careful, and at the end of it, you say, well, you know what if there were no cards, then we'd be stuck with moore's law, upgrade intel today because it's down but no, he said -- i remember i saw him the last time, he was like, look at the -- moore's law is dead. how are you? >> well, and as for a.i.,

there's chatter about either outright bans or italy, germany says it's not off the table. take a listen. >> this is going to need a lot of debate. no one knows all the answers no one company can get it right. we have been very clear about responsible a.i. one of the first companies to put out a.i. principles via progress reports a.i. is too important an area not to regulate. it's also too important an area not to regulate well so, i'm glad these conversations are underway >> it's just happening so fast i think adobe has a very good handle on this the idea that you can eliminate copywriters is very clear, because if you have an instagram page and you want to -- and this is very, by the way, very empowering for people, and you want to sell something, make something, you can say to

chatgpt, i have this, this, this, and the copywriting is instant and beautiful, and you can just use an adobe commerce system so, i think that there's -- on the one hand, i like how it's empowering people. we're not talking about that it's making people sound like they're big companies and doing it in a way that's very responsible. but on the other hand, is it really us that you have a totalitarian country in china that i think has demonstrated routinely that it tries to know everything about you almost in a 1984-style, orwellian, and this would make it so they don't even need you you can become what they want you to be, and i think that that's the real worry. we can call it imperson -- you're becoming that person, okay impersonation is going to be rife and i think that if you have a

leader who's against your regime, how easy would it be to just have that leader say really positive things about the regime but it's not the leader. >> yeah. >> you can't tell the difference >> you're right. as for the productivity impact on employment, we got two companies today, jim, where layoffs are at least part of the discussion one is disney, which i know you discussed with andrew, and the other is mcdonald's. and this weird sort of closing offices so they can notify -- >> i mean, people have to understand there's a fellow, chris, i like chris, the ceo, and i don't expect him to ever be cryptic. i mean, he's not a cryptic guy and yet, that was cryptic. and it surprised me, because i think they're one of the most open -- >> stock's been on fire, yeah. >> it's been a total winner. i know that people are soft about qsr catching up to them, which is burger king, but this might be the first layoff in kind of non-tech, where they say, you know what

we have too many people. that has nothing to do with how well they're doing just that they could do more with less. but mcdonald's has been a horse here, just a consistently good stock. >> yeah. >> so, i was surprised i wish they would call us and say, listen, you have to understand, this is a holiday or something. it was very quizzical for a great american company >> yeah, and jim mentioned the qsr upgrade on friday at cowen cowen went to outperform >> we didn't even mention ppg, by the way ppg has been saying, for a long time, they've missed a bunch of quarters now, they made the quarter, and they made the quarter for helping, but lots of china reopening, aerospace doing better, margins better, but this is the kind of thing that i think is going to happen banks are not going to report good numbers, but a company like ppg that's got its costs in line with china opening, look at that >> it's weird. we got an upgrade of vulcan, but then goldman makes cuts.

>> the inventories are higher so there's true, although adco, i think, is levered to a very good ag cycle the weather has been bad for farmers, and people are saying they won't spend i think these guys are downgraded ahead of what's going to be a massive spend that's coming in here, and vulcan, which i like very much, are levered to housing they build when you have new housing project. they build new roads there's not been a lot of new housing. lennar, kph, they've all been told, all very disciplined, and so dh horton, disciplined. so, i would have liked to see more road building, but there will be, yes, i.r.a. is going to have it so there will be more paving >> yeah. markets hanging in there s&p up a couple points ism at the top of the hour, but first, manufacturing pmi let's get to rick santelli >> yes, carl, s&p global, the

u.s. manufacturing pmi, this is a march final, so of course, we will replace the mid-month read, which in this case was 49.3, and we'll replace it with 49.2, which means we still have five consecutive sub-50 reads in a row, and this is the lightest number, 49.2, well, just since february, when it was 47.3 we haven't been above 50 since october of last year and we have more isms, pmis that come from the ism. we'll have manufacturing, price to pay, employment, new orders all at the top of the hour we see interest rates tick down just a smidge, but all maturities are higher in yield, lower in price than friday "squawk on the street" will return after a short break

still to come. scott wapner nfs exclusive, and wwe's vince mcmahon on this deal to merge the ufc with wwe and whether that scandal rocked the wwe and mcmahon himself. coming up next, we'll get trading with jim as we have a 270-point dow gain to start q2 - hiring is step one when it comes to our growth. we can't open a new shop or a new location without the right people in place. i couldn't keep up until i found ziprecruiter. ziprecruiter helps us get out there quickly and get us qualified candidates quickly. they sent us applicants that matched what i was looking for. i've hired for every role, entry-level technicians,

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let's get to jim >> it's not a big deal, but mars the fourth largest private company, is buying hes caw, a pet company. well, they manufacture for pets. what's interesting is we keep seeing this consolidation. we have smucker doing -- they're doing dog treats just kind of like, i guess, pet snacking, so to speak. they're doing quite well we have sowet that is doing well, animal health, and general mills crushed it with blue buffalo. this consolidation which i don't think the government is going to oppose, tells me this is still a

growth area. i look at heska and said how did i miss it? the answer is there's so many companies. but pets remain a very viable category >> so we finally found an area of m&a where regulation is light. >> right they don't -- no one is speaking up for the dogs in this world. i think that's -- i think that the ftc ought to make a statement right now saying the dogs have it had we're not going to let this deal through. >> can we get a white paper? >> there's one coming in the yellow review. it talks mostly about how it's absolutely wrong that pet food is -- that the dogs are slighted there's only fike 40 different kinds, and blue buffalo is the winner, but she probably doesn't like this deal >> what's up tonight >> i'm analyzing the wwe, but i'm analyzing the companies that are just simply not trading well they're selling at five, six times earnings and trying to explain to people

why you don't own these shares, why people are -- it's dangerous to own a five times earning stock at this point in the cycle. >> because of the value trap phenomenon >> exactly, and i want to explain the value trap in some cases i say take the other side, but there are a lot of companies selling tour to six times earnings but if we're in a recession, it's not cheap. >> we know what happened to home builders >> they have shown great -- i think you have to understand when you read the quarters, they're building almost a suit now. they're not just throwing up things you have such great people who run these companies. doug yearly told us, his conference calls are remarkable. all their conference calls stewart miller, fantastic job. but those companies showed amazing discipline, and as soon as rates dipped down, the orders sprung up again. i always like to analyze these companies and say maybe they're all undervalued. >> a great show.

see you tonight. >> when we come back we'll kick off our week-long series on where to put money in the quarter. today it's the playbook for big tech after the big rally in q1 od 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. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

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good monday morning. welcome to another hour here of "squawk on the street. i'm sara eisen with carl quintanilla. we're live from post nine at the new york stock exchange. david has the morning off. take a look at stocks because we're gaining steam after an up month, up quarter, up week last week the s&p 500 mostly higher, up a little more than.1%. energy leading, on the surprise opec cut which is fueling a big rally in oil prices. materials, health care, and financials all strong er today tech under a little pressure we're 30 minutes into the trading session. here's three big movers we're watching oil prices in rally mode after opec plus announced it's slashing output by 1.16 million barrels a day. saudi arabia calling the move a

precautionary measure targeted toward stabilizing the oil market mcdonald's on the move temporary closing the u.s. offices monday through wednesday this week as it plans to inform corporates about layoffs and the deal news of the morning endeavor confirming plans to merge ufc with wwe scott wapner will bring us the latest from his exclusive interview with vince mcmahon later this hour. we got pmi a moment ago. let's get ism. once again, rick santelli. >> yes, on the ism manufacturing, expecting 47.5. 46.3 46.3 that's the fifth consecutive month in a row below 50, which means not in expansion mode. we're in contraction mode, and 46.3 is the lightest level going all the way back to may of 2020. 49.2 on prices paid.

49.2 haven't been over 50 since january. and the rear-view mirror is 49.1, so we continue to see these sub-50 levels. if we look at new orders, indeed, this is the seventh consecutive month in a row under 50 in contraction mode, at 44.3, 44.3 is the lightest since january of 42.5. and finally, construction spending expected to be unchanged it's down .1%. that is the third consecutive month with a minus sign, as we see the data points not really holding up, especially in manufacturing. interest rates continue to move lower on the session they have done so pretty much since the opening bell and we do see that two-year note yields now, well, they're dipping below 4% that psychological area, and ten years are well below the psychological level of 3.5% by

the tune of eight basis points back to you. >> and dollars weakening further as well on the back of that data thank you, rick. the dow is up 325. we're in this weird mode where it's cheering negative data, because it makes the job easier for thefed that they can pause which is what the market is anticipating and potentially cut interest rates i guess be careful what you wish for. >> rick mentioned the sub-50 on prices paid. we remember the core pci, a tenth light on friday. part of the big debate right now. morgan stanley, we talked about this with jim, about rooting for economic weakness doesn't usually pay off in the long term that's their view and why they believe we're still in the midst of a bear market rally >> so interesting to watch the market continue to rally off what are the highest level in the s&p since february and we're not too far, 1.5% from a seven-month high the growth over value has dominated as well. one thing that's important to keep an eye on is the banks. just because it's quiet and there's no news and relative

calm in the stock prices it still was a brutal month for the banks, especially the kre, the regional banks the coming weeks and months will tell us how much stability is achieved in the session. the common narrative is that we have moved into, from crisis period where we're worried about liquidity to profitability it's just a reset on profitability. there will be conversations about, for instance, regulation. we know the bank hearings just got started, and what can be done i wonder if they're talking about the right issues there no amount of capital would have saved svb. the fact is we live in a digital world where billions of dollars can evaporate within hours everyone compares it to washington mutual which lost $16 billion over ten days. we lost $40 billion in a few hours. i think that surprised even the top bankers i was talking to all weekend. bank ceos. this is what the regulators should be talking about. should there be some sort of circuit breaker? look at the rise of digital

banking. the banks have been pushing this pushing us to get into mobile banking. you can do a bank run with the click of your iphone >> the lending piece, pantheon macro, we argued some time the economy would avoid recession this year. that now looks to be untenable given our expectation of a sharp tightening of credit they're looking for q2, q3 declines of gdp to 1.5% annualized >> so there's this bull to bear debate where the bulls say look, the fed will pivot and they're going to start cutting aggressively and one of the most aggressive hiking cycles we have seen in our time is going to abruptly come to an end and that's ultimately a good thing, also that corporate america still has strength and they have levers to pull, but the bears say, i don't know, the market is not that cheap and aggressive cuts are already priced in, and maybe the fed isn't going to cut that much because we're going to focus on the fundamentals and look, opec is cutting

production maybe there's an opec put and energy prices go back up and we have to worry about inflation again. >> jpmorgan today leaving their forecast unchanged because they thought this cut was going to come probably a couple months ago. they're at 82 for an average this quarter, 84 for the average west texas next quarter. >> i'm watching yields we'll see. it's turned around lately and we'll see if we continue to get weak data. we got weak manufacturing numbers. so let's talk about q2 financials and energy certainly lagged tech was the outperformer in the last quarter with the nasdaq closing out its best quarter since 2020 mike santoli is here with more on what to watch as we have seen this big rotation, mike. >> in fact, it really did get under way last week. the whole story of the quarter and of the month was tech and growth dominating. it really only dominated for about two weeks right after svb failed that's when you had essentially the handful of big growth stocks kind of throwing a shout ought

against the rest of the market last week, you did see some broadening out i was looking at the consumer discretionary and industrials, they were both up 5% in the last six or seven trading days. it shows you there has been an attempt to rerotate. where it leaves us at the beginning of the quarter is if all you had was the almanac instead of the newspaper, you would be bullish it's april, an up first quarter after a down year. that always has tended to be pretty positive. even when you had a 3% gain in march, what has it done? all of that stuff gets you into it's pretty bullish. strong markets remain strong the issue iswhere we are in that whole fed economic cycle. i agree with you the market is trying to anticipate the pause i don't think the stock market is truly wishing for the cuts. even though that's where the fed futures market is sitting right now, with pricing and cuts the stock market is more about let's get us a pause and then we figure it out.

i can remember the time when you didn't really believe in what the federal funds futures market was saying until likesix or eight weeks before the meeting before you had this super transparent fed, it was like it's people just playing the lotto in the longer term i do think it wants to pause manufacturing, it's okay to be weak housing, maybe it's coming off the bottom i think if you see the consumer get weak, if you see big profit warnings, that's something the stock market would have more trouble absorbing. >> interesting over the weekend, b of a looked at quarters, first quarters where the s&p is up, not just up, but up five plus, and almost always, the second quarter continued, that momentum continues. also, cfra today, we're in the midst of the best three quarters in the 16 presidential cycles. >> that's what i mean, you have almanac goals out there against some newspaper bears who are saying, look what's in front of us we think the market, the economy

in the second half of the year is going to struggle more than we're now priced for the earnings forecast story is interesting here, too, because you have seen a pretty good downgrade of consensus for s&p earnings over the course of the first quarter of almost 7% and that was similar to the prior two quarters and you say well, it shows you numbers are still a little too hopeful. except we saw in the prior two quarters they set the bar low, and the market held together you myth be able to muddle through on that. >> to sara's earlier point, cap-x reductions, head count reductions, less fx pressure, cleaner inventories. china coming back. that's part of the bull playbook as well. >> i don't know, cap-x reductions you can debate. that's also bearish ultimately for the economy. i also returned to the banks we can't leave them alone. first republic is up 2% today. it's still down 90% for the month of march and we're all trying to see if this thing has been -- i don't have a good answer

i'm still having conversations over the weekend of what the answer to that question is for instance, yes, there's a liquidity lifeline there, but everyone is so gung ho on regulation, regulation, regulation nobody is talking about what we do with uninsured depositors no one is talking about what w and the restrants that have a few million dollars in their regional banks why would they keep that there how does the government respond to those types of deposits so that they can feel safe? because we learned that pretty vulnerable >> for ure i do think it's much more about funding costs for the banks. how expensive is it going to be to keep your deposits. you're paying for that lifeline, paying 4.5%, maybe now for six-month cd type money, and the business model doesn't work very well it doesn't stay profitable for very long. it is a big issue. i think from a market wide perspective, the stocks just can't go down every week they don't have to lead, they don't have to make back a big chunk of what they lost, but if

they continue persistent weakness, that has everyone else questioning what is going on that's never necessarily a healthy backdrop >> big banks report next friday, starting with jpmorgan, wells fargo. we're going to learn a lot about how concerned they are >> by the way, you know what's going to happen if the fed cuts? money market yields go way down. so all of a sudden it's going to create an offset >> remember when higher yields were supposed to be so great for the banks and higher interest rates? didn't happen like that. >> mike, thanks. see you soon cnbc has been crunching the numbers when it comes to q2. let's bring in steve liesman with a rapid update. morning, steve >> hey, good morning, carl yeah, the first half growth outlook improved because you have still strong consumer spending, the cnbc rapid update shows forecasters slashing their numbers for the second half of this year. take a look here first half growth now forecast to average around 1%, which is way better than it was

it had been forecast to be flat. but look what happens in the second half. forecasters had looked for just barely positive growth in the second half. it's now seen solidly negative it's been something of a pattern, forecasters shifting the downturn further out into the future now the third and fourth quarter seen turning negative by the 14 economists we surveyed over the weekend. credit tightening, you guys were talking about it a new challenge to the economy and to the people crunching the numbers. some are saying the numbers could be even worse than currently penciled in. piper sandler writing, even before the current stress, tightening bank credit was set to push the u.s. into a recession by the fourth quarter. the added tightening to come risked a sooner and deeper downturn what about inflation another challenge to growth comes from that outlook. it's remaining stubbornly high you can see subtracting from gdp. each quarter this year, compared with january, it only declines

below 3% in the first quarter of 2024 high oil prices are not going to help, but the market this morning quickly shifted its view from oil fueled inflation to deflationary concerns with a negative growth sign in the ism manufacturing index. the most optimistic view i can come up with is forecasters continue to underestimate the consumer and that would forestall this much anticipated recession as it has, sara, over the last several tracks we have had on this rapid update >> it's been amazing to see the consumer strength. in the u.s. and in europe, steve. the inflation point, i feel like this is one where the market is very excited and convinced that inflation is coming down you see that in inflation expectations and in the bond market and i do wonder if it's stickier than investors are thinking. >> it's certainly the outlook of forecasters. they keep ratcheting those numbers up, looking for more and more inflation

and what's been interesting here just getting back to the consumer, is the consumer's ability so far to overcome that. and it really gets down to the amount of money that's still in savings, and plus, you shouldn't forget the jobs picture, which more and more people employed, more and more paychecks and higher wages seem to be able to help people over the hump when it comes to these inflation numbers. we have to see how long that will last. >> it's interesting. how do we account for the strong consumer he pointed to boomers having accumulated more wealth than any generation in history, driving demand for things like food, for health care, that are labor intensive. that's why you have such a persistently strong labor market >> yeah, that's a huge factor, carl and maybe some time when you have a full show, we can talk about the estimated $7 trillion that the boomer generation is going to pass on to their heirs. that's another huge factor and some of that could be going

on right now >> there you go. they're not selling their homes either, apparently >> okay, boomer. david's not here we don't have a boomer >> oh, man >> steve, thanks >> i count, i think. >> a road map for the rest tof it hour, trying to figure out where to put your money to work? "squawk on the street" is breaking down the q2 playbook for tech >> plus, what to do with tesla as shares fall despite a record quarter for deliveries tfinally, ufc and wwe signig a deal to merge. scott wapner joins us with an exclusive look after the break big show still ahead we're near the highs of the day after weaker manufacturing data. be right back. billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star.

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endeavor confirming its deal to merge ufc with wwe, confirming a $22 billion dollar deal let's bring in scott wapner who talked with aeri manuel and vinc mcmahon. >> the biggest question once it becamclear vince mcmahon was willing to sell a controlling stake in the wwe what role would he play in the new company? most assumed he would leave the ring altogether. i asked mcmahon about the emotions of parting with a business his father founded back in 1953. and whether that scandal ultimately led to this moment. >> i can't help but wonder and i

have to ask you, had the scandal not happened, would we be sitting here today >> absolutely. >> why >> because it makes sense. you take -- nothing has ever happened like this before. and again, i'm always looking at what's best for our stockholders and what's best for the company. this is the best thing that's happened in a long, long time. all the wrestle manias combined have been 39, including tomorrow does it really equal to the magnitude of what we will do together >> did that event push you towards this day faster than you thought you would ever be here >> no, it didn't really in and of itself, no. but it's great we can combine all of this news together at the same time. >> is this a good day for vince mcmahon and the wwe? >> a great day one of the best of my life >> this company has been in your family for 70 years. is it a tough day? >> no, it's a great day. things have to evolve.

family business, it all has to evolve for all the right reasons. and this is the right business decision thus far, the right family decision. >> i want to ask about how you think of your legacy given where you took this company, what's happened in the last year, the regrets you may have as a result of all that, and how you think your legacy will and your story will be told >> well, let me say i made mistakes, obviously. both personally and professionally through my 50-year career i have owned up to every single one of them and then moved on. i'm not sure of the legacy stuff. i'm not going to write it, so i don't know i want to say someone who had an extraordinary amount of fun, great passion for what they did, and wound up doing the biggest deal he's ever done in his life. >> endeavor ceo ari emanuel, who also becomes ceo of the new company, made it clear during our exclusive interview that he

wanted mcmahon to stay he called him a cable television pioneer and a visionary and just one more important note, just to remind you, i am personally represented by wme, a unit of endeavor, a talent agency that represents several cnbc anchors and on-air reporters, carl, you included i think this came down to a simple question. is the wwe at this moment more valuable with vince mcmahon in it rather than out of the company? and i think ari at this moment thought he was more valuable in it what he could learn from him over what he has done as he said in his 50-year career, ari went on about how vince was a visionary, saw cable television and the power of it and live events within cable before almost anybody else. i also think it's clear here, vince is 77. he is in the september of his wwe years. if you will.

he's not going to be in that role forever and i think that ari thought that mcmahon's ip, his intellectual property, was more valuable right now in the family rather than without. >> a bit of a founders premium, so to speak. you mentioned the rights renewals that are coming up. that's going to be the next chapter in the story >> and the biggest arguably of all. they expire both with nbcuniversal and fox next year, they have not started negotiating yet from what i understand from our conversation yesterday, but that's going to begin in earnest and they're going to command top dollar at a time where there's questions about the economy and where we're heading here, the deals are like a billion dollars each with fox and nbcuniversal our streamers are going to come into mix that's a critical question speaking of streaming, with peacock and our parent as well, but tat was signed in '21, and that's its own thing, but the big one is about to begin in a very big way >> we know about media, but you need to be live.

it helps if it's sports. and it helps if it already has some name value, and the name has decades of notoriety under its belt >> if the day ends in a y, you may see the ufc or wwe on television as they have proven they are highly capable of doing. >> more on the half? >> more coming up. >> see you in a few. meantime, tesla giving up some gains after the delivery numbers over the weekend our next guest says things could fall more with even more price cuts ahead we'll talk about the tesla playbook in a moment

tesla is in the red today despite record delivery numbers this quarter let's get to phil lebeau to analyze some of the news from tesla, phil. >> sara, we got the deliveries for the first quarter and the stock is down on questions regarding gross margins as well as price cuts in china we'll talk about that in a bit in terms of the q1 numbers, the company delivering 422,875 vehicles the consensus range from 421 all the way up to 432, which was the number which we used, the journal uses and other people

use. 4% increase compared to the fourth quarter so sequentially an increase in the number of deliveries as you take a look at what they have done in terms of deliveries over the last several years, remember their guidance for 2023 is to deliver 1.7 million vehicles though there are some who are out there saying look, if this is an indication that we could see greater deliveries in q2, 3, and 4, we could perhaps tickle 2 million vehicles, but three things are weighing on the stock. what's the impact of the new ira tax credits for evs. tesla said the model 3 is not going to qualify for the full $7500. will there be more price cuts in china where the e verx competition is heating up, and what will we see for gross margins in the first quarter we'll get the first quarter automotive gross numbers after the bell on april 19th one other piece of ev news, look at shares of rivian. also under pressure like most of the ev stocks after the company

reported q1 delivers of just over 7,000 vehicles or just under 8,000. production, 9,395. but the company did reaffirm, guys, its guidance for 2023 production of 50,000 vehicles. guys, back to you. >> phil lebeau, thank you very much >> our next guest says tesla will need to lower prices even more this year to hit volume targets. bernstein analyst toni sacconaghi joins us with an underperform rating, $150 price target on tesla. toni why it doesn't look like they have a demand problem here? >> good morning, sara. look, i'm not so sure that demand is really strong, if we look at what happened. they cut prices materially in january, up to 20% and sequential growth was 4%, the last couple years it was 1% and 2% you took these very large price cuts, consumers reacted to them initially strongly, yet seasonal growth was pretty in line with

historical levels. and as we look forward, inventory grew, so they weren't able to sell everything that they made. we, as phil mentioned, we're going to have lower incentives or lower credits from ira, for sure on the standard range potentially on other models, we're waiting to hear exactly what those credits will be and if we look at lead times for vehicles, other than the model y in the u.s., you can get a tesla within two to four weeks pretty well anywhere in the world there isn't much backlog there are about 100,000 cars in the inventory right now. and so it doesn't feel like demand is fantastic right now. and my guess is as we progress through the year, and there's more andmore competition, ther are 150 new evs launching in china alone this year. tesla will likely have to lower prices to make sure it hits its

volume target. >> your lead time charts in your report today are interesting and you say that you think the competition has deep pockets and are not going to back off. some auto analysts argue it's that conflict between the ice business and the ev business that's going to create really tough businesses for legacy automakers why do you think that's not the case >> i don't disagree there will be tough choices, carl i ultimately think at the end of the day, though, companies are being valued on the future, and the future is electric vehicles. you have had companies like ford say we're going to get to 2 million electric vehicles by 2026 and i think quite frankly that's come hell or high water. yes, they lost $2 billion in electric vehicles this year, but they made more than $10 billion in operating profit in their ice businesses so they can continue to subsidize that business, and the market is basically saying,

unless you're credible in ev, we don't want to give you any kind of valuation and so i think you are going to see leading oems like the volkswagens of the world, like ford, like gm, who have pretty robust cash flows from their legacy businesses, if they have to take down overall profitability to show that they can be viable in ev, i think that's the choice they're going to make. >> on the other hand, there's a narrative that tesla's leading the pack on the price cuts and it's hurting the other automakers even worse than it's hurting tesla, while at the same time, the ihave pretty ambitious plans to ramp up production in mexico they have the first mover advantage. and the deliveries today show that the price cuts are actually working. >> yeah, i mean, look. i think price cuts in a hypercompetitive industry is generally bad news for everyone. last year, tesla's automotive gross margins were 27% this year, i think consensus thinks they're going to be 21%, 21.5%.

and again, we think there could be incremental price cuts. so tesla is certainly feeling the impact from its own price cuts, and certainly other vendors are. and that's the dynamic that we worry about, is in a really competitive industry, where price matters, price cuts are detrimental to total industry profitability. i think that's what we're starting to see and will continue to see, and that includes tesla and other incumbents the good or bad news i guess if you're other oems is they're pretty deep pocketed >> fair. toni, thank you. appreciate your first take on the new tesla numbers. >> thanks for having me, sara. >> toni sacconaghi >> market continues to build here, 4125, going to take you back to mid-february let's get a news update with sill vanna >> thanks, carl. here's your cnbc news update at this hour. exclusive nbc news reporting reveals that the chinese spy

balloon that flew across the u.s. in february was able to gather intelligence from several sensitive american military sites. sources say that china was able to control the balloon and make multiple passes over the sites despite the biden administration's efforts to block it from doing so the u.s. shot down the balloon on february 4th off the coast of south carolina, and officials are still analyzing the debris that was retrieved and just a few hours, former president trump is expected to travel from florida to new york ahead of his arraignment on tuesday. trump faces about 30 charges related to alleged hush money payments but the exact charges are unknown as the indictment remains sealed trump is expected to surrender tomorrow morning and make his court appearance in the afternoon. >> and a pro-ron desantis super pac has raised $30 million since march 9th as it pushes the florida governor as a possible presidential candidate "the new york times" first

rorpted the figures which were released following an announcement that the trump campaign had raised $4 million in the 24 hours after his indictment last week i'll send it back to you downtown >> all right, thank you. still ahead, former boston fed president eric rosengren joins us with his market and monetary policy outlook next back in two minutes on "squawk on the street," up 334 on the dow. yes. right. yeah. and i don't think at that time- i think you're the one to tell me that we had the same birthday. yes. it's really unbelievable when you think about it, because it's been, like, really over 20 years that you were my mother and father's banker, you became my banker and now fran is in her third year of college and you're her banker. it's so unbelievable because i'm just 20 years old. [laughing]

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quarter. energy is strong, materials strong, some of the cyclical stocks doing better, and tech. tech is lagging a little bit overall, so is consumer discretionary, but not by very much here. i want to show you some of the tech names nvidia up 90%. you would think it would be down no, it's up a little micron and apple, this is flattish a very good start for tech stocks considering how strong they were. discretionary is down but that's primarily because travel stocks are weaker because energy was up and there you see tesla. that's also weighing on discretionary. q1 laggards, the cyclical stocks have several days moving up. caterpillar and ford doing better some of the consumer staples names like coke and procter & gamble that were laggards also doing better today energy stocks, of course, the news about opec here that's a big mover not a lot of breakouts, so we had marathon petroleum hitting a new high here, but most of those stocks are up 3, 4, 5%

mike was talking about the almanac wars by that he means april is usually a very good month. in fact, the best month for the dow, up almost 2% on average, and we're up 16 straight years until 2021, and 2022 was the deal breaker for that one. the problem is, and the reason it's a war, it's usually the end of the best six-month strategy, sell in may and go away. we'll see how things stretch out here back to you. >> bob, thank you very much. >> markets now pricing in a 60% chance that the fed moves again, quarter point rate increase in may after opec surprised oil production cuts this morning former boston fed president eric rosengren joins us now it's good to see you again, eric do you think that markets have it right one more hike and that's it? >> i think it depends on what happens on the banking side and how the inflation numbers come in so i wasn't as optimistic at the market in terms of how the pce

inflation came in last week. we're still in a situation where i think core inflation is likely to be much higher than the fed wants. at the same time, there is still the tradeoff earlier you had a conversation about the regional bank stocks. and the regional banks are still in a situation where it's a little bit unclear what the second half is going to be for them, even if there are no more bank failures. >> i agree, and i'm wondering on the regulation side of things, we're following this quickly moving debate in washington, and on wall street, about proper regulation to make sure something like this doesn't happen there still is some uncertainty on what happens to all those businesses that have more than $250,000 at regional banks, what they're going to do with it, how the government is going to treat that we don't really have that answer, do we? >> we certainly don't have the answer last week, we did get the

release that indicated that deposits of the banks below the top 25 actually stabilized, so that is certainly good news. but i think there's still plenty of challenges in the regional bank portfolio the fact that they're holding a lot of securities that have embedded losses, that hasn't changed. if the fed were to continue to increase short-term interest rates, it would mean that the difference between the short-term rates and the long-term security rates that they're holding would get even worse. and there are plenty of real estate concerns that are likely to start becoming more of a problem in the second half of this year. in terms of deposit insurance itself, i agree with you i think it actually is something that needs to be addressed because without having a higher ceiling than the $250,000, it's very likely that it's going to be more challenging for mid-sized banks that are so important for the commercial real estate sector and bank dependent borrowers.

>> right and it's almost like they have to do two things they have to increase the $250,000 for retail depositors because that seems like random number and also figure out how to deal with small businesses that rely on these regional banks. you know, if we want a lot of regional banks in the country because it's good for job growth and good for communities and good to extend loans to all sorts of businesses, feels like they should deal with this issue and they're not talking about this issue they're talking about the rollback to the 2018 stress tess on regional banks. >> it's moving very slowly, the conversation actually, i think they would be better off if there were some debt requirements rather than having an insurance deposit ceiling at all there are very few benefits from having uninsured depositors, uninsured depositors are not particularly good monitors if you're really worried about the safety of your eposits, first, you probably won't be in a regional bank to start with. you have alternatives like money

market funds that you were discussing earlier you have the ability to do sweep accounts so in reality, i don't think the large depositors actually provide that much market discipline and the ones that are in a regional bank are probably large depositors that are not paying that much attention to deposit insurance. as a result, they're not providing much discipline for the bank management. >> so when you look to clearly the fdic has to do something to expand insurance, but what about the fed? do you see any problems with oversight, whether it's at the regional san francisco fed where they're supposed to have monitors at these kinds of banks to report to the fed board, or did the fed make a mistake here? >> so there are two things to think about. one is regulation and one is supervision. regulation is the rules. supervision is the qualitative assessment of the rules. and ideally, these banks would

have had more supervision and more regulation. as a result of some of the changes that were made during the last administration, there was a rollback in terms of these large regionals having to have the same regulations but with that also came a reduction in the amount of supervision that they were going to get as we have seen, a run on large regional banks actually is a potential systemic problem and is a real problem for borrowers at the large regional banks. so i think we do need to be rethinking both do we have the regulations right, but also what is the appropriate supervision for some of these large regional banks. >> yeah, a lot of soul searching. eric, good to get your perspective here as a former fed regulator. appreciate it. still to come this morning, the q2 tech playbook while wall street definitely likeaps ple.

$165, and more on the cloud names you might be watching as we work into the second quarter of the year. we'll discuss next stay with us

. welcome back to "squawk on the street." we're kicking off our new week-long series, the q' 2 playbook, breaking down the top stocks and different sectors you might be watching beginning with tech joining us to discuss this morning, dan ives of flatbush securities guys, appreciate it. do you think this coming quarter can do anything to approximate what we saw last quarter >> i'm embracing what's going to happen in 1q, because everything we see in terms of enterprise as well as from apple to across big tech, i think it's going to be better than feared i think that really is going to -- the narrative for tech, i think, really is starting to be that green light to own this

because fundamentals are holding up and it's not firing in a crowded theater. >> software, chips where do you think the tip of the spear is going to be >> it starts with chips in terms of what we see and your starting to see that from an inventory perspective. cloud is really going to be the story. ultimately, when you get cybersecurity, a lot of pockets, i look at what's happened with microsoft, aws, gcp, all of our checks, 3% to 5% better than expected it shows a lot of those deals are green lighted despite a murky macro. >> barton, you have three buys and two neutral. two neutrals are amazon and netflix. how do you distinguish between some of the big tech companies now which have sort of all been beloved in the first quarter >> sure. look, it's been a great quarter for the group. i do think that what you have in the stocks is a lot of expectations that the macro economic environment is not going to weaken. and that in my mind is a risky

proposition. i do think there's a meaningful possibility that the fed's desire to bring down inflation is going to weigh on the macro in my mind, that is particularly problematic for low earning high multiple equities that will be very sensitive if the macro comes down, numbers will come down, and that could be challenging. the way i would hedge this is i want exposure to companies that have very substantial earnings support. kind of reasonable multiples and a commitment to kind of cost controls so you can -- the stock can be a relative outperformer even if the macro weakens and it the macro remains strong, they can accelerate i like things like meta in this group. i'm also long alphabet, google in this group. where i am more cautious frankly is on amazon and aws i do think that a lot of the

head chopping that we're seeing in big tech, some of the pullbacks at some of the big streaming enterprises and some of the pressures in financial services create some risk for aws. i think the expectation is mid-teens kind of growth and it the if the macro weakens, we may not see that i think amazon is a high multiple, low earning stock that could be sensitive to a retrenchment in the macro from here. >> we're back to the seat count debate what do you think? >> ultimately, the new york city cab driver knows some of the narrative going into q1 he werings. you look at the investment, even when i look at apple, we're not seeing from a unit perspective any cuts from a production perspective out of asia. i think the narrative starting to form in terms of big tech, put more fuel in the tank for a

m more rally. >> does it make sense to be chasing some of these names if you're counting on the fed cutting and the economy weakening at the margin? >> i think barton had a great point. i view it aztec is the new safety trade because of what we're seeing in terms of numbers have already been derisked, rip the band-aid off, you saw that from nardella and cook and others. and more risk-on i still believe tech's underinvested relative to the broader environment, especially from an institutional perspective. >> if last year was all about the multiples coming down because of higher interest rates, and we do see weakness in the consumer this year, which now as a result of what happened with bank failures, we're expecting some real tightening of lending standards about the rate shock still going on, consumer weakness equals what for an apple or amazon

it has to matter. >> it does matter. i think a lot of that has already been reflected in terms of guidance. i think that's why a lot of these stocks are starting to move higher. a lot of these tech companies, they generate more cash in some countries. i think that's going to spur more and more m&a, which the strong get stronger in tech coming q1 earnings. >> i know you have a neutral on netflix. are we in a period where the street has even less patience on profitability for some of netflix's rivals >> look, i think that for netflix and their rivals, the streaming industry is maturing you know, we're transitioning from blue sky, huge opportunity, to basically nuts and bolts management, maximizization of profits. netflix is well positioned but i think a lot of that is reflected in the stock frankly, i see room for the biggest players, the brand leaders, netflix and disney.

i'm more concerned about some of the johnny-come-latelies that are smaller scale making a push like warner and paramount. i'm constructive on disney overall in the belief that the stock will not work in there's a very deep recession. but if we're stable, theme parks can be a support for disney. netflix, i think a lot is in the stocks, you have to pick your points and right here right now i'm still neutral. >> yeah, we'll be talking more disney probably tomorrow as it tries once again to get back above 100. we'll be talking again in the coming days. barton, dan, appreciate it much. >> thank you booking holdings within inches of the 52-week high, amid strong demand and icpring power for travel we'll check in on how the consumer is holding up with ceo glenn fogle. we're back in just a minute.

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occidental petroleum showing outsized gains exploration and production, industry leaders include apa, devin, conocophillips, the complex as a whole on the complex side, williams, energy transfer, kinder morgan are up across the board. a lot of green on the merger front, extra space is buying life storage for $12.4 billion. life storage has 1200 storage properties casinos macau showed best month last year. keep action on it right here watch out for "squawk on the street." we're coming up after the break with more on this particular story and more keep it right here

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good monday morning. i'm sara eisen with carl quintanilla. setting the agenda for us today, everyone is talking about the surprise cut out of opec ubs managing director has a bull case on commodities. oil's up almost 6%. is the upcoming travel season about to get grounded bookin