compromise on some of these issues, so the biggest lever is going to be price to hurt demand opec made the cuts reflected in risk of recession, but the other side of that coin is, you have china that's still not really 100% open yet. >> right, okay >> so, we are thoughtful about what oil looks like in the next six months >> all right jackie cavanaugh, of the big putnam, the regular putnam this is the real putnam up in boston >> the original putnam in boston thanks, joe. >> bye, everybody. we'll see you tomorrow 6789 ri right now it's time for "squawk on the street" ♪ good wednesday morning, i'm carl quintanilla with jim cramer david faber has the morning off. after several days of softer than expected data, adp now comes in light, ahead of friday's jobs number futures give up some ground, and yields fall, ten-year now defending 3.30%.

adp coming in below expectations, walmart affirming its guidance, and fedex cutting costs. j&j upping its software to nearly $9 billion to settle these cancer lawsuits related to its baby powder. and the president's warning on a.i., calling it potentially dangerous and urging big tech to keep it safe let's begin with the markets after the dow and the s&p snapped those four-day win streaks, jim some discussion about whether directionally, market is now using bad news as bad news >> yeah, i mean, i think yesterday was one of those days where we just said, be careful what you wish for. maybe we have more bank failures jamie dimon's note and the j.o.l.t.s., the job openings, made people say, wait a second, maybe we have to have a real rough patch before we finally get to the promised land and then you have mester last night, who literally is on she's just very powerful, very smart, by the way, she speaks with a level of certainty that makes you think, the rates are going

higher ignore everything that's happening. and then you come in and it's the same old -- you watch the tape, the crawl underneath, same old banks being attacked again for new reasons, and you say to yourself, wow, i don't want to get ahead in the game. maybe i take some profits. that's what i see happening. >> jim mentions mester, of course saying that rates probably need to go above five and then hang out there sort of painting this picture of what some are calling now a restrictive pause. take a listen. >> precisely how much higher the fed funds rate will need to go from here and for how long policy will need to remain restrictive will depend on how much inflation and inflation expectations are moving down, and that will depend on how much demand is flowing, supply challenges are being resolved, and price pressures are easing >> although after pce and ism and j.o.l.t.s., and we'll find out about services today, is there any doubt things are slowing down >> i don't think there's any

doubt at all and obviously, credit's harder to come by, and i think that what you're seeing when you see these big tech stocks go up, that's people saying, listen, i know they'll do okay because they don't need to borrow any money. but small and medium-sized businesses were late pay chex is the largest payroll processor, and they say small and medium-sized businesses are still doing quite well cintas saying businesses are doing well i got to say, i think that ms. mester's a little off the mark based on what we've seen in the last four weeks, and the last four weeks, i think, do matter i mean, i think there's a lot of sense of how bad is this are the long losses? how bad is the held to maturity? even though the fed window is open, who's next this "who's next" drum beat every day. if i worked at first republic, i would say, oh my god, every day? barry sternlicht yesterday was saying great things about how

first republic has this really loyal client base, but there was a defection yesterday of a major group of people who handled wealthy people from first republic to another -- went to another bank, and i say to myself, okay, are the rats -- they're not rats -- are the big brokers fleeing the ship that's what those guys are, these assets go out the door every day. that's the one -- it's like, we almost want to say, okay, just please get a lifeline so we can move on. >> right it is a cloudy picture for example, we got double upgrade of first citizens. got an upgrade of zion today >> that was under the category of, enough, i can't -- that's how we all feel. we come in, like, enough do we have to have a new metric that explains why zion's is not good there's a good piece in bloomberg. this is very much like 1990 to 1992, where the shorts would tell you, listen, we're going against bank of boston we can take that to zero

now we're -- security pacific, that's next. then they ran into nations bank, and nations bank just said, no it's over. and next thing you know, it was over those were the guys who would tell you which bank is next. shooting fish in a barrel. >> people are pointing to fundamental issues like their time with schwab and canadian housing, things we've already agreed are actually happening. >> right, but at the same time, schwab does a pretty sticky base we do have to worry, they did make a lot of loans. i think they've got good collateral but i feel like we're shadow boxing every day, we come in, and today, they're going to operate on -- i have a chart about who's next when you look at who's next, look at this there's jpmorgan it looks like that western alliance is in more trouble than we thought holy cow, first republic no these things -- they can borrow from the discount window obviously, companies that you might not want to buy. i see first horizon in this

chart, and i say, wow, maybe that's why td walked away from the buy at first horizon, but we can do this every day, or we can focus on the fact that a federal express, a really big, good company reports just a fabulous idea, which is to make it so it's one company conagra reports a very good number apple, someone upgrades it nvidia's always down five. >> i saw your tweet this morning. >> you know what nvidia is like? i'm going to take nvidia, and i give you five. that's the line. at the end of the day, maybe should have given you eight. we're playing a betting line of stocks, and i don't like that. palantir is the betting line i'm going to take the over palantir i'm draftkings'ing this whole market i like jason robins, and i like draftkings, but between warren buffett and draftkings, warren buffett. draftkings is great, they expand

in every state, and they have a great app. it's the app that shows you -- like, right now, western alliance, you get seven. >> is it a parlay? >> yeah, it's a parlay with schwab the payoff is so immense, you got to play. jim mentions two of the very big stories this morning, well-known companies hosting investor events today. walmart reaffirming their guidance as they expect 65% of stores to be serviced by automation by the end of fiscal '26, and then there's fedex, announcing plans to consolidate its operating units into one organization by june of '24, boosting the dividend by 10%, jim. supramanian is going to lead the group. >> i think they can do it. and raj is on the show tonight anyone who's been on the fedex calls, they've been a thing of beauty under fred smith, previous ceo, founder, but they always had -- okay, so, now, they would have these different divisions that would talk. it was almost as if they were

different companies, and you got the sense there were fiefdoms and they had their own administrators, and it's all going away it's this white-collar where you don't need all these people. when raj came on the show, he said, business is bad, but we're going to triumph over it i think this man is proving to be a great second act to fedex >> does that chart look to you like we're in pending recession? isn't it a volume macro bellwether, fedex? >> i think fedex is very important. i want to hear what he says about actual business they're doing. but they -- they're going to have so much leverage if they get a lot of business, because they've got -- they had a lot of fad. you know, that's too mean. they were set up as different companies, because as fred added new companies, they made them divisions. and it was hard pressed to say, listen, that division should be

another division he did the right thing but if you have the same amount of postal product, and you have the head count down, then you can understand why the dividend is just beginning to go up i like the story very much >> as you said, you talked to subramanian in september >> oh, was he negative >> take a listen to that >> raj, are we going to a worldwide recession? >> i'm not an economist. >> you know more than economists come on. they just push papers. >> i think so. >> you think we are going into a recession? >> i think so. but you know, again, these numbers don't portend very well. >> so, we'll want to hear about -- >> i mean, i think that he was very straightforward he was -- when i -- when i really drill down, i mean, i was shaking after that interview >> i remember you saying that. >> i was shaking he said, listen, each week has deteriorated, and he really did have better numbers.

each week was going down if that stopped, wow and remember, europe's gotten quite strong people don't realize you have to look at bank santander. you can't look at what's happening with the swiss that's just crazy. but europe is doing better i mean, as my friends in europe say, count the cranes, jim, and then tell me whether there's as many cranes in any city in america. there's not. >> as for walmart, we mentioned a guide. doug says -- mcmillan says inflation is still going to be an issue this year, and the mixe mixed pressure is probably going to persist >> i knew he would be self-effacing. he was incredibly self-effacing, but they have a lot of good things going, and i think that when we talk about warehouse robots, we know from amazon, which is doing it, by the way, warehouse of the future, which really is kind of roomba meets a.i., but when you can automate these things, and i talk about leverage, what i mean is not debt if you have this fixed cost down and the orders come up, you get these bountiful margins, and i

think walmart is going for margin growth, which is really sensational. we haven't gotten that from walmart. >> yeah, the automation part, we talk about a.i there's a piece in fortune today about chipotle automating food prep, the slicing and dicing of chicken. >> they understand jack hartung and brian aniccol, they get if they can get the costs down, and they have a robot for chippy, they understand a.i. too. i don't know if they've called jensen huang at nvidia when are they bringing down the darn brisket but they get that if you have fewer people behind the counter, the leverage is great. that's why that stock is going much higher. >> so, as people start wringing their hands about macro, and declining economic activity, you're going to be looking for names that -- >> triumph over it >> that are looking to offset through operating leverage >> so, look, the original guide was zuckerberg, right? he came in, he does one --

>> the patron saint of efficiency >> you know, he's mr. pink slip. he does one set of cuts, then does the second set of cuts, and now we find that instagram's up 300 basis points there was an upgrade today of meta, looks like a lot of things are going right. every day, tiktok shoots itself in the foot. you can use reels. and then palo alto, on the other hand, listen, we're done losing money, we're going to make money better on the gap basis. these are the two. it's palo alto and meta, and everybody wants to be those. and if you are those, your stock is going to go higher, not lower. >> it's funny you mention meta, because we get another upgrade today. argus goes to buy 270. jef jeffries' numbers also up. >> even though those pay packages give five months of full pay, what they have accomplished is something that no one thought would happen. just that they had this division of instagram where they fire add lot of people.

and the revenues went up if you fire people, revs go up that's what's happening at meta. >> one of the takeaways from j.o.l.t.s. yesterday was that the labor market may be settling into a period where employers scale back their hiring plans but they can do it without mass layoffs. that's what jpmorgan was hinting at >> go back to nvidia the speed with which people are adopting this thing is just crazy. >> you mean a.i. >> yeah. it's crazy people are, like, sitting there saying, hey, you know what we really can get rid of people with this today. today. because it's more efficient. now, they started -- jensen was talking yesterday, the ceo, about call centers, but now we're starting to see copy writers, ad companies, instagram. we can use instagram to make -- this is a really big thing instagram, adobe, nvidia, in other words, single practitioner

puts a product up, looks just like a major company >> it would be fascinating if the companies that some argued got too fat ended up becoming the biggest disciples of the corporate cost -- >> when you go back, i'm waiting for bargain. bargain's a sinking business stock hasn't gone up yet i just think a.i. is the story jensen huang, when he says it's like the iphone, like the 386, 486, who are we to doubt this guy? >> we're going to talk more about nvidia through the lens of google today and some of these claims about the speed of super computing. we'll get to j&j >> you know what they're getting rid of staplers. you know what happens next the staples themselves >> j&j agreeing to pay nearly $9 billion to settle these claims over talc products. the stock rising on that news. jim's got quite a ta oken that for the club last night. take a look at futures here. a lot more "squawk on the street" continues after a break. . i'm taking a two-year business course. i've been studying a lot.

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johnson & johnson announcing it has agreed to pay $8.9 billion over 25 years to settle allegations its talcum products cause cancer. in a regulatory filing, j&j says more than 60,000 claimants have committed to support the proposed resolution, which does have to be approved by a bankruptcy court company also says its subsidiary, ltl management, has refiled for 11, adding neither the original filing nor this

filing is an admission of wrongdoing nor an indication that j&j has changed its long-standing position that its talcum products are safe jim, i know you took a crack at what this means for the shares yesterday. >> there's a big disconnect about what happened here and what the media is reporting. this is an agreement between the plaintiffs, 20,000 more than we thought, and the company to give $8.9 billion, largest settlement ever, in order to make it so that everybody -- the vast majority of the -- the super majority are satisfied, and now they have to go in front of a judge, the judge who actually agreed this strategy worked, judge kaplan from philadelphia, and he had it approved these things are -- there's only one case i remember where it was thrown out, which was the nfl concussion case, where the nfl said, listen, you guys, players can have $750 million, whatever, and the judge said, that's ridiculous it's much too low. this, i think, is a -- nothing's a slam dunk in courts, but this is it. the existential crisis is over

lot of people thought this could be 20 or $30 billion j&j's got a aaa balance sheet. now they're ready to do the splitoff, where they're going to split off the consumer products and keep the medical devices and the pharma, and the fact the stock is up comes from this notion that it's just a proposal that j&j has floated, not an agreement between j&j and the plaintiffs >> right >> and that's what it is and people have to -- the narrative has got to stop. there's a lot of false narrative, all morning, everywhere this is the plaintiffs wanting this why would the plaintiffs ever agree to this? how about the fact that the supreme court is made up of people who are ready to make it so the plaintiffs are finished, this whole thing is done, set up a company and you pay off and you don't need any plaintiffs anymore. this is the last, i would say, this is the stand of the plaintiffs of, we got to get this done before the supremes get this, because we're going to lose in front of this new supreme court, which they will >> you think it sticks >> yeah. >> and then what >> pay out

>> in terms of how you view the shares >> j&j, this is what kept it back j&j's the fastest-growing pharma, the consumer products group is just pristine it's band-aids and neutrogena. people don't understand that it's done. that judge, kaplan, has said, this is the method we want use it the third circuit cannot -- which rejected kaplan -- they cannot reach down and say, wait a second, we don't like this settlement they can't it's not the way jurisprudence is done in the country this is a big fund the plaintiffs agree the money's going to go. there's a footnote that mentions asbestos we never want -- if you're j&j, you want nothing about asbestos. j&j is saying, we're not admitting, but we are willing to give the biggest settlement ever, and the plaintiffs are willing to do it because the plaintiffs recognize this is a supreme court -- this is a trump supreme court, and it is set up

to blast the plaintiffs. they do not like this jackpot justice. so, i think that this is a chance to pay up for j&j shares up. >> we'll watch it, of course >> i spent a lot of time going over it with these guys, and it's really done good deal for everybody. >> big implications for the dow as well. d e enget cramer's "mad dash" anthoping bell in about nine minutes take a final look at futures here back after a break coach k, there's a goat here. the story of my life. no coach, there is a goat here! whaaa! what's this? a thousand dollar hospital bill? but i have good health insurance! gaaaaaap! did you say 'gap'? he's talking about the expenses health insurance doesn't cover. but with aflac, you can get money to help close that gap. aflac, huh? gaaaap! aflac! gaaaap! get help with expenses health insurance doesn't cover at aflac.com

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pseudo-mea culpa is talking about, hey, listen, i went really positive, it hasn't worked yet but let's not forget the free cash flow is good we have bank of america saying, continue to strengthen the parks. so, i say -- everyone was saying to me the other day, jim, come on i mean, it's not -- nothing's happening here there's no succession, other than sunday night, which i missed, no spoilers. but what i think is happening is you're beginning to get a sense that maybe it's worth a lot more because it's got theme parks netflix doesn't have theme parks. and don't just focus on the linear tv. and i like this call my travel trust owns it. i've been suffering mightily because i believed it. so far, i've been proven wrong >> yep >> but i think that iger understands the problems, understands you need better free cash flow, and he's going to deliver. >> b of a's point is that some of the early work has been regarding cost but there's still big strategic decisions, namely what to do with hulu and how big the disney umbrella is on direct

to consumer. >> right i think one of the things -- that was a good straightforward piece. the nathanson piece was a little more existential, which is basically, wow, i mean, it can't be -- this is disney, and it's got to be worth more than it's selling for, because look at all the sum of the parts, but he says, i'm not doing a sum of the parts analysis, but the parts, if you add the sum is pretty good, but no sum come on, mike, to be or not to be no, no, just don't give me that. >> remember the needham piece about apple buying -- that whole thing. >> people love to talk about disney, but i think this stock, if bob iger just goes to work, talks to people, talks to the creative people, comes up with some ideas, stock goes to $110 >> we're going to talk about china gainrerdg disney and apple and some other names as well we'll get the opening bell in about four and a half minutes. don't go anywhere.

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than sales through productivity and business mix as it relates to capital investments, it's exciting that we have so many places to invest in our business and earn a strong return. >> that's doug mcmillon of walmart on investor day, saying supply chains, in better shape, inventory's a little cleaner >> don't forget they've got the better drones for those who want to compare them to amazon. i think they're doing incredibly well i think one of the missing things -- and i have said to doug this -- it's like, hey, doug, the stores look great. you never talk about the stores. you walk in, and instead of having the big debbie's, little debbie's cookies that just say, listen, i need you right now, they've got natural food everywhere i took my wife to walmart. she said, this can't be walmart. >> did she think it was whole foods? >> she said, what is this? the pricing is so great. the pricing of the private label is terrific. pricing of the clothes is great.

i think they are really at a time where the consumer's hurt by inflation deflate the shops. other than costco, which supports members, and when you come out and they think they're disappointing, give me a break it's business as usual >> we talked a bit about the street street's expectations for costco let's get the opening bell here. on the cnbc realtime exchange, at the big board, it is trinet, human resources provider for small and medium-size businesses at the nasdaq, it's four leaf celebrating its recent ipo you mentioned conagra earlier, speaking of pricing. volume's down nine >> it's till net positive. >> raised the guidance >> and i think some of that is -- look, conagra is a very complicated story, because they did not take more price. they took price, but they didn't have organic sales i think they -- the new products are doing well, adjusted margins

are very good. you've got -- you've got a decent story i think what people want to hear, though, is that there's no degradation when they raise price, and there is some deg rah d degradation, but as far as i'm concerned, conagra is an inexpensive stock in a market where people have decided only general mills works. it's a good story. 3.5% yield they haven't even started to redo their popcorn line. people are focused on, if you want to step back for a second, it's cheaper to eat at home, and if you want to know what is -- let's say you're watching night agent. you're watching night agent, which i'll put in the category of cliche by good. they're going to tell you, listen, you want to have popcorn, and that is where they are. they are the binge treat they talk about this, by the way. they identify, if you binge, you

binge with conagra >> the two big gainers of this are the stories we've already covered, namely j&j and fedex. >> remember, again, j&j, it's not a proposal from j&j where they're waiting to hear what the plaintiffs are doing it's the opposite. the plaintiffs want this the plaintiffs' bar, the lawyers, want this deal, and they want the deal because they see the writing on the wall. i've looked at the writings of all these new justices that trump put on they don't have a lot of time for the plaintiffs' bar. the tock is clicking the clock is ticking, and one of the things that people don't understand is the plaintiffs are very happy it's a lot of money. >> even over the decades the other gainer this morning, newmont again, jim as we watch what gold has done in the wake of the dollar, two-month low this morning >> i think the gold is a reaction to, if your deposits aren't safe, you got to buy

gold that's opposed to, if your deposits aren't safe, you got to buy bitcoin. bitcoin's got a little tarnish there. but gold is right. and what's amazing to me is that the cheapest gold, the best, hasn't done anything and that's barrack, 2% yield, it's doing quite well, and if you want to have a gold company, it's profitable, and it's -- that's the one to buy. and newmont is the levered player they have much higher costs. how about the consistent good that's barrack gold? that's what people should be buying >> as for the dollar itself, jim, people talk about the differential, if we're really ending our hiking phase, although new zealand with a surprise 50-basis-point hike overnight. >> i know. >> we were not looking for that. >> i was listening to you and sara talk, and she was talking about australia could be, you know, the harbinger. i'm telling you, there's no harbingers here. things are all over the market i think australia's going to -- if china turns on, that is an

economy that is geared so toward china. so, i think the essential -- a lot of central banks are really putting their thumb in the air and seeking which way the wind blows. it's very unimpressive, the central bank activity so far >> i'm glad you mentioned china. disney's meeting with lawmakers. speaker mccarthy meeting with the taiwanese president. this piece on the tape about apple with so-called tiger teams where they're going through, trying to identify weaknesses in their supply chain, but they don't want to move too much out of china for fear of retaliation. >> it's hard too, because remember, the chinese government is -- if it's made in china, for china, they like it, because they want to employ people, and apple has been, i think, very much in sync with the idea that the chinese people are -- well, i've been trying to walk my narrative back i think the prc, the government, after what happened with covid, where the people rebelled and you had tanks in the streets, i think the government realized, you know what? we're all powerful, but there's

also people. and the people of china -- i've never met anyone who says, you know what? i hate the people of china my father worked for the people of china they're the greatest people in the world. when he was 85, they said, we love mr. cramer because he's 85. they have respect for their elders, as, by the way, as schultz did when he went over. i think there's more synergy between china and us, but the sticking point is where speaker mccarthy is. it's taiwan. and i think it's amazing that speak r mcer mccarthy, right th saying, we're defending. >> what did you make of the "journal" story yesterday where they're slow rolling deals because they're trying to push back against those restrictions they're facing on chips? >> well, i think that they want that lam research. lamb research gave up $2.5 billion in sales. they can't make the next generation of chips. they're not like russia, which i think, from what i can tell is

us using pentium. if you want the pla, if you want the army to be on par with us, you need our chips of course, that's not really advantageous because we're, like, china's like this. >> as for apple, jim mentioned that b of a today goes to $168, up 10 bucks. >> he's critical on the calls. >> yeah. he's been going between buy and neutral. >> i looked and said, geez, that's pretty positive service revenue, the margins are pretty good. i thought that was a very nice statement and could mean the stock goes to an all-time high i have tony on -- just kidding i don't. i just wanted to say that. >> yeah, tony's with bernstein, who's been critical, say, of tesla, where jim, some of these market share numbers on evs now, gm surpassing ford in terms of

u.s. share >> well, but i want to come back i want to pres back on ford. first of all, maybe tesla's more of a commodity than we think i was speaking to steve from hertz. remember, they've got all the teslas you want. teslas are a dime a dozen. the f-150, i know that brian sullivan, you know, which i love, i'll tell you, last call is as controversial as you get he's saying, on twitter, why are there so many fairly low-mileage electric f-150 lightnings for sale online? you ask ford about that. they're saying the f-150 lightning are being sold above retail price so it's people who are flipping for a profit. so, i think that's not a sign of inventory. it's a sign of demand. the f-150 lightning, incredible demand, even though they put through two price increases. >> interesting 7% of all new registrations now are ev number was 4% a year ago >> look, i think mary bara is doing a great job, and i think there's a thirst for an american

ev, and i do think we have -- there's a little tesla fatigue, and i think tesla's a great company, but the idea of the 150, i mean, look, here's what i want to do i want to go with my f-150 lightning. i want the big screens >> so you can tailgate what >> i want to watch chef. they'll tell me if i can fill up my line-up i did win fantasy. but what i was looking at is the f-150, a loved vehicle the maverick is loved. the bronco, internal combustion engine, i guess who cares about those, they're only 93% of the market, but ford's doing so much that's right, and it's not getting the respect that i think it deserves. >> couple moves in the insurers today, jim, as ray jay ups cigna and unh. >> humana is good.

one of the things that happens periodically is everyone gets worried that the government is going to crack down on what they're paid, and the government folds like a cheap suit from maybe marshalls and the stocks go higher, and my travel trust owns humana. we're happy with the medicare advantage, by the way, if you're -- if you have the misfortune of being on medicare, meaning you have a great program, you need the advantage, and i like the humana plan i did a lot of work on this. >> bros got some love today out of wedbush, outperformed 37. >> we often talk about the idea of underpromising and overdelivering, and i have to tell you, this company has been trying to get people to realize, we're not underpromising we're going to have not-great numbers right now. when we go into a new area, we're going to have not-great numbers. please respect that. this was the first piece of research that said, even with the cautious attitude of the company, you want to own dutch bros, which is one of my absolute favorite stocks >> i know, i know.

>> anyone who has had dutch bros knows the annihilator -- you could have the annihilator right now, and on saturday, you'll start getting tired. saturday by the time faber's back, you might be sleeping. >> we're looking forward to monday how about c3 a.i.? what are we going to do with this one the short letter, obviously. >> you know, there was a meme name for a couple of minutes i don't know i mean, i think that those of us who know tom seebl -- i've known tom for 30 years look, everybody can change one of the things that you never get -- you never get credit on this show if you say, i've known that guy for 30 years and he's okay, because who knows. i think the stock shouldn't have been where it is, because the company is losing money hand over fist. that's a company that's not pivoted one bit. they are, like -- and remember, one of the comps calls, he basically said -- tom said,

look, iden've been running all these ads. i don't know what they're doing. unimpressive point but i do think that if you're not making money and you're a enterprise software company or a cybersecurity company, i'm selling you, and i'm selling you hard, and that's what's happened that's what this market is about. >> we mentioned earlier, google arguing that their a.i. supercomputer is faster than the a-100 at nvidia, which had been on the market for a while now. >> all right, so, let's -- i've been doing some work on this my experience is, google did not compare -- this is my own work because i'm looking about the grace hopper, which is the two chips. >> yes >> they did not compare to the fourth generation nvidia chip, the 5 chip h-100 because the h-100 came to the market after google's chip, so i really start -- i think this is a canard, frankly. i think they're not comparing apples to oranges. >> because they know they can't? >> because they know they can't. and by the way, curiously, they're nvidia's partner, so i think they got to stick -- i

mean, i've been thinking about what google has to do. right now, if you work here, you get these pens for free. that's how you make your quarter. no more free pens. get rid of the pens. google has got to get more realistic. they are a fantastic company with great advertising youtube didn't fare as well on that survey as i thought the cost-cutting should really have to do with employees. that's where you save your -- >> so, you think they're -- >> they're just overstaffed. >> low on ideas of how to cut costs? you know ruth is -- >> i think she's fabulous. and i love the way that they're handling chat. they're handling artificial intelligence when it comes to -- they've come up with the attitude of doing well i think that search is just on fire it's a great way the advertising business is good but when you get the memos, they remind me of these memos on wall street where we have to save paper clips to make money. and that's not how you -- in the

modern day, silicon valley, you would say, you go through six interviews to get a google job, and so what happens is they can't fire you after they spend six months going over you, so they have a problem that is actually something that doesn't seem to -- remember the scene in "indiana jones and the temple of doom" where he takes the heart out? that's zuckerberg. he does it there's a little scary moment, and then kaboom. google has to get a little more in the -- right? >> the darkest indiana that's for sure. >> that was just -- i mean, to me, that was wall street that was the movie "wall street." and they got to do that. look, i don't want "apocalypto." great and undermanaged google is a great story. alpha is a great story they got to figure out which divisions continue to lose money and close them i was talking about peanut butter with my wife, okay?

about jif -- we were talking about schmuckers and and then alexa has different recipes for peanut butter and jelly sandwiches will you stop. they're losing $8 billion on alexa, and alexa comes up and says, do you want to hear a joke about the chicken rossicrossinge road no, i just had the worst damn day of my life, and i don't want to hear that >> the last thing i want to get to is your thesis about three camps of trading explain what they are. >> the people who say we're going into recession, so you got to own pfizer and merck. then there are people who say -- and you got to sell every single cyclical and then there's people who bizarrely say that because the -- google balance sheet is really great, then they're never going to have a problem with first republic it's just schwab won't impact

them and what i say to those people is, we have something called earnings coming up and if you're on that conference call for alphabet, you will not hear a single thing about the balance sheet. it means absolutely nothing. yesterday, the selling and the cyclicals was so vicious that i'm going to devote a whole segment tonight to companies that sold off as if they were about to lose all the business they had >> right we thought of you yesterday when cat and valero -- >> oh my god marathon pete. they can't pass through the pricing piece of alphabet, because someone -- i mean of opec plus. there was an analyst who liked it today i saw declines yesterday that was the equivalent of, we're in a recession, do not pass go, do not collect $200, and i can't find companies -- like, you take a good company like -- take a company like trane tr trane is hvac. why are they doing really well

because of climate you need trane, and you need carrier, because the biggest single way to save greenhouse gases is to bring those companies in suddenly, they were trading as if they were cyclical and they would have no orders they have a k-12 program that was provided by the federal government, fully funded, right now. these guys have orders, and when you speak to -- when you speak to these companies, they're not seeing what the street sees. they're just not so, i caution people who want to sell these companies to just say, well, they're on their last leg. talk to them now, maybe they're all fools maybe they're all just darn fools. and they don't know anything unless they look at their order book that moment but i don't have the order book. they do. they come on the show, and i say -- remember, these guys have really good sales. how are sales? oh, last minute, we sold -- look at five minutes ago, we sold in paris. their numbers are so much better than wall street's, and the emotions right now are swinging so wildly that i think you need

200 lithium at night and 0.5 clonopin before you go to bed, and all this will go away. by the way, i'm not talking about any one of the serotonins, not necessary. >> adding to that surge in sentiment is more data let's get to rick santelli >> yes these are march final reads, so they replace the mid-month read, and 53.8 turns into 52.6 that's the lightest. well, that's the lightest -- actually, i take that back 53.8 was pretty strong 52.6 isn't a bad number. as a matter of fact, it represents a number over 50, and consider that january, december, all the way back to june of last year were under 50 now, if we look at the composite, we replace 53.3 with

52.3 so, both decent reads but both sequentially lower than the mid-month read we see yields are down as a matter of fact, every yield on the curve from 2s to 30s has traded under yesterday's low yield and above yesterday's high price. the weak numbers this morning continue to push in one direction. rates lower, and it certainly doesn't seem to be hurting -- or helping the equities, and that really is the biggest trade that people are studying at the moment don't study too long, though, because "squawk on the street" will return after a short break.

interesting confluence of

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let's get to jim in stop trading. >> what are the great debates you have investors versus traders? what do you do with a spike up on on had a -- on is a hot shoe they got to a billion dollars in sales ahead of when nike got to a billion dollars in sales it's a hot stock but it is too hot. you have to buy it not sell it, you have to hold on and take pain because these guys are amazing. these are amazing shoes. i just find that anybody who has tried them or knows them knows that this thing could be -- it's the first one, it could be the next one nike is so great but under armour couldn't do it. but these guys are special

i would not sell it into the down i'd hold onto it. interesting rotation today in defensive names, jim. >> yes. >> but overall the index is holding. >> when are we seeing a bank go down big where are the guys who knocked down banks maybe they're hungover from the phillies winning last night. i continue to focus on the terrible thing that the russians are doing to evan. this is a man who's a journalist, a great journalist, it's passover tonight, wish he were back with his family. and i think the russians should look at what they did right in the period 1944. they had to do a little more focus and operation and how they decided to come, you know, to fight berlin and a little less about fighting us. >> thinking of him and the journal team. tonight you have nfedex. >> yes this is the beginning of the few

fedex. i love fred smith he built an unassailable business but the businesses were per maided on top. that's not the right word. but they were sectioned and now they're putting them together. sean conley. you can say what you want about whether you are eating chef boy r dee. we love angie's popcorn. my daughter loves the slim jims. but they're putting out new products they have to deal with the price increases. i can't wait to talk to them someone is complaining that nvidia is overvalued i would say that it's been overvalued since the day it was created. >> we'll see you tonight "mad money" 6:00 p.m. eastern time dow up 128 we'll continue in a moment, don't go anywhere.

♪ good wednesday morning welcome to another hour here on "squawk on the street" i'm sara eisen with carl quintanilla. we are live as always from post nine at the new york stock exchange david faber has the morning off.

it's bonds rallying today after a series of weak data points some strength in the dow up 115. tech is down about half a percent. looking at the nasdaq, 30 minutes into the trading session. three movers we're watching right now. starting with meta, argus updating from buy to hold. still one of the best performers on the s&p 500 year to date up more than 70%. first citizen bank shares to buy from sell. that stock has been on a roll since the deal with silicone valley bank. and cigna moves to strong buys with the valuation reset and the improving regulatory backdrop for health care. let's get to services this morning, back to rick santelli rick >> there's some surprises here these are march numbers and

unlike s&p global, there aren't mid month reads to take away and those readings on the final global were some of the best since june of last year. on services, 51.2, and that follows 55.1, the weakest since december and here's the shocker prices paid, all right, prices paid, watch the yields go down, carl 59.5, that's the weakest since may of 2020. weakest since may of 2020. 51.3 is the services and 51.3 is the lightest since january sequencely following 54. and 52.2, the weakest since december not all are treasury maturities, every one, trading under yesterday's low yields they're adding to the notion now and we

see futures trading above yesterday's highs on every contractor every month the higher it goes, the less fed. put all that together it seems as though the market has an opinion these days, especially considering the recent direction of the data. sara, back to you. >> rick santelli, rick, thank you. just add it to the slew of data points we've gotten, carl, that shows the economy losing momentum here. it's happening in the right places what i mean by that, it's happening in the strongest places like secret rvices, whics in expansion mode above 50 but weakest, he gave the superlatives, weakest since december, prices paid, weakest since may 2020, that's all progress what the fed and market wanted to see when it comes to inflation coming down, making their job easier i would add it to adp this morning, pce last week, manufacturing numbers this week. no wonder why the bond market

loves these numbers and rallying sharply. >> the only cross markets were the quit rates why would workers quit if they didn't think another offer was there. then you look at the internals on adp, financial services lost 51k but leisure hospitality up 100k it's not like things are falling apart across the board. >> we're still stronger than 2019 and the economy is pretty robust but the momentum is coming down. >> do you think the ten year here can hold 330? >> we're below it. we're 327. we're not holding it right now we're micking new lows and the view is that recession, fed is going to have to do less that market is now pricing in 100 basis points of cuts before january of next year what's interesting about that is that, it's a wide gulf from what the fed is saying and how the fed is forecasting we just got comments from the cleveland fed president singing

a completely different tune. listen to what she's saying. >> precisely how much higher the feds fund rate will need to go from here and for how long policy will need to remain restricted will depend on how much inflation and inflation expectations are moving down and that will depend on how much demand is slowing, supply challenges are being resolved and price pressures are easing. >> that would have worked a few months ago but the market is increasingly saying no. i always pay attention to loretta, while she's not a voting member she's usually at the center of the fed. not uber hawkish, not dovish. >> but hawkish. >> they're all hawkish now the center of the fed is not moving to a place the market is moving yet so you're setting up another tense moment between markets and fed. and is the fed getting really behind here on the disinflation

and weak economy story >> we've been on the lookout for bifurcation and commentary i think the market was thrown off by her line we hope we don't tighten until something breaks having lived through the last three r on four weeks -- >> something has already broken. >> yes that's why the fed is at odds with the market and -- tone deaf is a strong phrase. >> not reading the room. >> right not reading, first of all, the incoming data and the bond market and what the forward looking signals of the economy are showing us we're getting the read on prices paid and things like, even the pce numbers, yes, they're higher than where they need to be but they're trending in one direction. so the fed is going to have to debate whether things could break further. it's not like banks have fully stabilized the share prices are weak. >> completely weak. >> just just as they were yesterday. and we're seeing the impacts

the citi credit card data showed another down week last week. >> not as dramatic as the first couple. >> sure but in the first monthly year on year decline and losing momentum throughout the first quarter. that was a downgrade >> from three and change to one seven now. >> right it comes down. >> holding 4090, let's say vix inching closer back to 20. a busy morning for blue chip names. we have coverage to kick off the hour frank and melissa covering fedex and walmart. meg is covering j&j. we begin with fedex, bring in frank holland here >> yeah, busy morning for me and the entire transport sector. fedex moving higher after announcing a major transformation of this logistics giant a departure from the structure the founder fred smith

built this business on so raj is at the new york stock exchange discussing with investors the decision to transform fedex to one single operating unit it operates as three separate, that means each of the units will now work together delivering packages and doing other functions and increasing the dividend by 10%. one other thing, executive compensation will be tied to return on investment capital instead of percentage of revenue, a lot that analysts say will increase accountability from mid april to june of next year the current ceo will be ceo of fedex corporation john smith is the ceo of ground operations, the current express ceo, richard smith, becomes the founder of air operations. >> we'll lower our cost to serve

and sustainability improve capital efficiency it'll enable tighter coordination across the enterprise as a unified company with stream-lined structure, there will be enhanced visibility into the performance of our network >> that visibility is important. you have to remember last year, fedex got caught off guard when volumes declined i want to get back to the dividend thing right now that dividend increase, it brings fedex closer to its rival ups and other blue chip transport companies. ups at 3.39% for dividend yield, fedex almost 2%. so a big push, returning some of the profits to shareholders. >> looking at the comp with ups. as you said. what about the restructuring and the format, how does that

compare with how ups operates and who's doing better right now? >> i mean, fedex is really big it's outperforming ups year-to-date but you can't judge the companies on that. ups is very simple the ceo runs the whole ball of wax. fedex is different, that's the way the founder set it up. it operates with outside contractors, they buy routes, and then decide how they want to run them with some guidelines from fedex so that's one thing that has to be resolved. people that work for fedex corporation will be working with the contractors and how that works together will be a question >> i noticed b of a had a list of top ten to buy. and then we played sound with raj in september when asked if going into a worldwide recession, he said i think so. >> just last quarter fedex upped

its eps guidance the first three quarters they had 344, 318, their full year is 1416 to 1420 this year they have to be between 457 and 517. you see what a jump that is in eps. so is this drive transformation working, is this company becoming that much more efficient in a couple quarters we'll find out earnings in june. >> everyone is having a year of efficiency, not just meta. >> turning to walmart, doug mcmillon speaking in florida melissa joins us with the highlights so far. morning, melissa. >> good morning, sara. walmart is emphasizing a new theme, boosting productivity and profits. the company has talked about how it expects to grow sales at a

slower rate than it's seen in the past few years, the ceo said the retailer expects them to grow at 4% that represents slower growth than the past three years when revenue grew at 8% but an increase from the growth of between 3.1% and 3.6% prior to the pandemic mcmillon said the company's focus is starting to shift. >> we're in a phase that's less about scaling store pick up and delivery, ecommerce assortment and square footage and more about execution and operating profit improvement. >> one way to increase profitability. growing businesses higher in margin, including advertising and fulfillment services and turning to robot one of the highlights so far was showing off an automated facility in a tampa area where it uses robots to pick and pack

shelf stable items like groceries. get them prepared for aisles and get them to customers more quickly and also adding automation to the back of stores. >> fascinating look at automation and how it's getting into some really practical use cases. j&j is one of the top gainers the s&p today after agreeing to pay nearly $9 billion on the settlement regarding talc. meg has been following that action >> you can see how much this has been hanging over j&j when a $9 billion settlement drives the share price up so j&j has been facing these thousands of lawsuits from people claiming that the tall talc baby powder caused cancer they spun that out to its own company and filed bankruptcy that failed in the court system. now they have come back and said we're increasing the settlement offer to $8.9 billion and file

it for bankruptcy again. the difference this time, in addition to the extra money they're paying here is they have 60,000 clay mimants who they sa agreed to this but they need 75% of claimants to agree for this to go through. the company specifies they have no admission of wrong doing and disputes the claims but said the reason they're doing it is resolving the cases in the tort system would take decades and impose significant costs on ltl and the system with most claimants never receiving any compe compe compensation this has driven the stock higher and hoping it ends it without going on for years but, of course, it is not quite the end of this story yet. guys, back to you. >> meg, thank you. up 3.3%. as we head to break, here's a road map for the rest of the hour including two other dow stocks

in focus as tim cook and bob iger get ready to talk china with lawmakers we have new details. the president speaking out on ai calling it potentially dangerous and earning big tech to keep it safe. and we are live from the new york auto show with the ceo of stellantis debuting the new electric pickup. dow is up 53 points. we are losing some momentum. we'll be right back. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so... ...glad we did this. [kid plays drums] life is for living. let's partner for all of it.

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a group of lawmakers are headed west to meet with media and tech executives in california julia boorstin joins us with more what do we know? >> a bipartisan group of a dozen lawmakers led by mike gallagher will begin meeting with media and tech executives in california today first stop is in los angeles, meeting with bob iger, because disney is more exposed to china than any other media giant in large part because of shanghai disney that park is 43% owned by the media giant, the rest by the state owned group. driven by these sparks, the asia pacific region generated 11% of

disney's fiscal 2019 revenue that percent dropped to 8% in fiscal 2022 thanks to covid related park closures and fewer film releases last year. the post-covid rebound in shanghai disney is seen as a growth driver for the parks which is disney's fastest growing and most profitable division plus shanghai disney is seen as a way to market disney's brands to the hundreds of millions of people who live within a few hours of shanghai disney and then china's box office which in 2020 surpassed the u.s. and the chinese government decides which u.s. produced films are released there in 2019 "avengers: end game" grossed 22% of the global revenue. but after that, nearly four years, china did not allow any marvel releases there.

at the end of last year, avatar, the way of water, secured a release extension grossing more than $40 million in the country. so disney and all of the studios are eager to secure those covetted movie release slots after meeting with iger in los angeles today. the lawmakers head north to the bay area meeting with tech chec executives >> we'll talk about it more later this morning i imagine julia boorstin still ahead your playbook for q2 how to invest in the energy names in the months ahead with the dow holding onto a 55 point gain.

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welcome back to "squawk on the street." our q2 playbook series continues today with a spotlight on energy names. the sector was a top performer last year but lagging in the second quarter joining us is cole smead is now time to be increasing

exposure to energy and the economy showing weakness >> great question. thanks for having me no time like the present a wonderful time to make money in the energy business people look and say what's demand going to do to your point about the economy? i think that's the more foolish way to look at the oil market. you should look at supply. in commodity markets, supply and understanding that tells you more for example we had opec say we're going to cut it was a shock to people the risk right now is we're not going to have enough oil produced in the world in three years and another thing the market is missing, the more we do in the cloud the more energy demand is needed because technology is a massive eater of technology. >> looking at your top holdings here, occidental, chevron, you're sticking with some of the giants here. is that the way to play it >> no. i would say, first off, on

occidental, it's thanks to vaccvick holland i've never seen somebody take so many punches in in the spring of "20 and come out standing as the victor we tip our cap to them in huge ways the most interesting things are what the big portfolio managers cannot buy we've been buy be ovv, it's a producer, it's not a market cap big enough for fidelity or capital group to buy so talking good size large caps but stuff people can't touch we're dipping our toe into apache this squeeze is going to require production people that can grow production or buy them out as we've seen consolidation going on, that's where the money is that's where we think the best money is, people want to go out and become invested in the oil market. >> how does that coincide with the longer term goals for a more

sustainable future as companies try to pivot into renuewables at a time you say it's under pressure. >> there's a fallacy in people's belief right now i mention technology, if you go back and look at the history of technology what you find is every way we enhance our technology we demand more energy. so to your point, the idea we're going to be more efficient in our use because of technology will cause lower consumption of energy in total. it's the paradox, people never used less energy when technology is better, they use more an now our iphones are efficien so we have billions of iphones using more energy. that's where people are wrong, the idea we'll use more renewables to meet this. we'll use more renewables but way more total energy and we can't meet that by just

renewables >> cole, a couple thoughts on housing. people took notice today of mortgage apps down across the board. despite the 30 year coming down to 6.4 how would you grade the home builders in terms of operating in the environment. >> isn't it funny where we sit in home building rate rises we're supposed to crush the housing market and they didn't. in other words, the space is sitting 10 to 15% off all time highs. so to your point the thing we're most interested in, the 30 year fix, 10 year treasury spread we need healing in the bond market so i tell people, the best part about housing is the dumb things in the stock market will heal the bond market. so we could see where housing picks up because lower bond yields fuel what goes on in housing.

this is a great place. it shows you how much safer housing is today versus pictures people are building of this as an '07 like scenario that was false people are missing out on great money with the demand out there in housing looking forward >> i have to ask you, looking at the performance for the year, clearly cole, it hurts to hold big banks this year after we saw the blowup of silicone valley banks and some of the others whether you're trimming, adding, holding, given the headwinds >> straight up banks, j.p. morgan and bank of america are the two big banks we've owned. american express, has anyone talked about them in the middle of silicone valley bank imp imploding? the answer is no the biggest, safest institutions are gaining benefit and not having that reflect in stock price.

we'll see consolidation in banks that argues this so we like what we own there and this era of higher interest rates, commodity prices, lower stock prices we think traditional banking is going to be a star. >> sticking with energy housing banks, cole smead thank you very much. let's get a news update this morning. good morning. >> good morning. the news update at this hour starting in chicago. nbc can project a pair of progressive victories overnight in two midwest battleground states, brandon johnson winning in the mayoral runoff election and in wisconsin, janet protisa was able to win and give liberal control for the first time in 15 years. overseas, palestinian

militants responding with ache air strikes. ra ramadan continues and passover is set to begin tonight. emmanuel macron arriving in chooim china earlier today for a three day state visit. they're expected to warn china about sending weapons to russia. additionally they'll meet with chinese president xi to discuss trade and development. the president eyeing the dangers of ai. calling on tech companies to ensure products are safe before launching them in public we'll discuss that with roger mcnamee. do you ever worry we'll live forever? no, it's literally never crossed my mind. what if we live to like 100? that's 35 years of being retired.

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welcome back we are one hour into trading dow remains positive s&p down a third of a per sent nasdaq down 1% the groups rallying, utilities, health care, it's defensive. the rush into bonds with yields moving lower bob joining us now it's on the back of data misses. >> yes four of them you can see the yields down. sara is right, defensive are winning, utilities, health care, and consumer staples and this is why the dow is holding up and the s&p is not, a lot of defensive names in the dow doing well consumer discretionary weaker, semis weaker, industrials weaker it's defensive versus cyclicals. i mentioned last week talking about autos like general motors

and ford had a great week. cummins, caterpillar that has reversed this week. every day they've been down. the big international industrial names and automotive names the reason the dow jones is holding up well is because it has the defensive names in it. the johnson & johnson. at the same time, we had a nice little move in the big tech names last week, including the semiconductor with nvidia having a monster quarter. the growth names weaker, cyclical names weaker, and defensive names like utilities, which did not have a good month but as the yields moved down, you see the old utility names, standards like con ed moving back up.

a confusing time where are we on the market it's essentially trying to interpret the economic data. we have ism manufacturing, jolt and adp weaker bond prices have been surging on this on, prices surging here and the bulls need goldilocks. how much of a slow down? you want just enough but not too much and the last couple days people are saying this may be more of a slow down than we wanted it's hard to get the goldilocks story exactly right for the bulls. >> that's right. turning to rising concerns about ai, the president said it remains to be seen if the technology is dangerous. take a listen. >> we'll discuss the opportunities and risks of artificial intelligence. ai can help deal with difficult challenges like disease and climate change but also have to address the potential risks to our society, economy, to our

national security. tech companies have a responsibility in my view to make sure products are safe before making them public. >> in a just published op-ed our next guest said even a six month pause that's called for isn't enough to fix problems joining us this morning, roger mcnamee. it's great to have you listening to the president and analogs about drug trials we don't let companies put new drugs on the market without testing. that's the line you're drawing in this piece. >> yes i think the key question that needs to be ask is, should corporations be allowed to run unsupervised experiments on the entire population without any safety nets or guardrails? it's the question we have been not been asking until this week. in my mind it matters because roughly now 12 years of evidence of what happens when you allowed big tech to do that. i'm sure it's going on in other

sectors, i don't play as close attention to them. but in tech there's been no requirement to think about consumer safety. there's been no requirement to protect democracy. the only requirement is to maximize shareholder value when you give people a single variable to focus on, everything else gets ignored. and that's what we've had the last dozen years with ai you're at a scale where it's really obvious what's going to go wrong and there's no excuse for alousing it to happen -- excuse me allowing it to happen. >> what is going to go wrong, roger? >> think about it this, way carl an artificial intelligence is only as good as the training set used to train it so you're going to train it on high quality data. but the consumer facing technology, are trained in a different way. they don't want to pay people

for the mass i ive amounts of d they get so they scrape it off the web so they're getting the data from sites like reddit it's a great site but nobody is there making sure it's accurate. so you have a garbage in, garbage out problem. when you apply it to search which is what microsoft has been trying to do and what google is talking about doing, you wind up giving people answers that are completely unreliable. yet they sound incredibly persuasive as one princeton professor said, chatgbt is a bs machine i'm shortening that to allow it for television that's the problem we're dealing with our ecosystem is already polluted we don't want to dumb it down more ai has so much promise and it is so costly that we really should take the time and care to get it right. >> i hear you, roger

and really, prominent ceos around the space, like elon musk have called for a pause. i've yet to hear what the guardrails or regulations should be this is something congress should take on they haven't figured out how to deal with social media >> to be clear, i think that's a very really issue. i think it starts with what the president has done today which is to call on the executives of the companies to, in fact, hold themselves accountable. when sam altman comes out and says i'm afraid of what the ai products we're creating we can co, he's doing that to diffuse criticism. he isn't actually taking the steps. we have to ask them to take steps. the key point when they throw these things out into the wiled. they're asking us to complete the training of artificial intelligence and doing so by

transferring all the risk of that from the companies to us. and that should not be allowed my personal preference would be to see something like the food and drug administration that does require demonstration of safety as a condition of market access we've gotten to the point where the scale of these things are so great and the ability of journalists, policy makers, and consumers to anticipate risk ahead of time isn't good enough. so we do, in fact, need some organization that is highly trained, extremely well funded that can work to make sure the stuff is safe. i think the arguments that we need to compete with china are misplaced. because we compete best when we focus on american values, we do best with aircraft and technology and movies and things

like that. we don't do best by doing things that compete on china's terms, which is to say massive scale and authoritarian models and ai looks more like china's strengths than ours. >> as for policy, roger, it's hard to envision given our legislative politics right now an environment where we decide to create a new agency of the government so i assume you think that's probably not going to happen and then what? >> carl, to be clear the most certain way to not get a got od outcome is to not try i believe that the united states is in a good position. because of what russia has done in ukraine because of china's belligerence towards the west, the global economy is changing we have to have new supply chains we can't rely on china for manufacturing, germany can't

rely on russia for energy. that's going to keep inflation higher than it's been for a while. interest rates are going to be higher and we have to build more productive assets. as part of that the government has to play a more prominent role if we don't believe that's possible we're condemning the economy to be second class we don't have immigration so we can't fix our demographic problem. we have an imbalanced economy. the future can be bright but we need to act. >> does this mean you're not putting your money on some of these transformative technologies companies like nvidia which have become a play on generative ai. >> to be clear, nvidia is well positioned it costs roughly half a billion dollars just for the compute power to create one of these models so nvidia's positioning is

incredible in my view, though, this needs to go more slowly. it needs to be done with a great deal more care because you're messing with people's lives here and there's no way to repair the damage if you let it happen. >> i'm wondering, how do you balance that instinct of what's good for society and what's working in the market as an investor who's excited about some of the potential opportunities here when it comes to efficiency and game-changing innovations that come from a i >> nobody said this was going to be easy. i look at this as the status quo is really deeply entrenched. carl made the point a moment ago ago, it's hard to imagine congress legislating a moment ago and i agree but they have to try. the failure of the companies to act responsibly is going to lead to bad outcomes. i look back to 2016 the things

that went wrong, i look at the ethnic cleansing in myanmar in 2016 and then up to undermining the covid response of the united states and having insurrection at the capitol at some point it's going to be hard for us to repair society and i would like us to do something before it's too late >> yeah. we do create new agencies. homeland security is a good example but it happened in the wake of an enormous crisis maybe be that's what it takes, roger. we'll talk about that next time. >> i hope it's not next time because i would like the crisis to be further out than that. but i think you're right it could come any day. >> roger, thanks good to see you. great piece. roger mcnamee today. still ahead. we'll take you live to the new york auto show hear from the ceo of stellantis. looking to withstand consumer

demand and next hour we'll talk to the ceo of frontier airlines his take on travel prices and the summer demand. s&p continues to sell off here, being weighed down by tech, consumer discretionary, industrials and financials we'll be right back.

the new york auto show under way this morning with many of the big names rolling out new electric vehicle models. phil lebeau join us for a first on interview >> that you can. carlos, the ceo of stellantis joining us in front of the ram 1500 rev which you just showed to new york there. i'm curious, when the vehicle comes out, do you look at the

electric ram as basically taking people from the ice version into the electric version or do you think the pickup truck market could expand >> i think the pickup truck market can expand because we are removing, with our brand new ram 1500 concept, pure ev concept. we are removing a lot in the mind of consumers starting with a stunning range of 500 miles. by offering 500 miles range for pure ev pickup truck we're removing a lot of barriers which then means we expect the market to grow, possibly first in the coastal areas and then progressively come inland as the technology progresses. >> by the time this comes out late next year, carlos the ev market will be about 10% of the u.s. market right now it's 7.2%. where's the tipping point in your opinion where you start to

see ev adoption accelerate here in the united states or are we constrained because of battery and ev assembly constraints around the system right now? >> you are right to point that factor in fact, the market will grow as fast as we will be able to ableo protect affordability. affordability is going to be the driving factor to grow the ev market that's going to be number one. of course, we expect in the transient period, we'll be supporting the customer with subsidies, which is, of course, what is going to happen with the inflation reduction act. and that support is needed to protect affordability for the final customers. what we have to do in our industry is to cut costs this is exactly what we need to do to make that affordability a consequence, a natural consequence of the cost structure, which currently is not. currently, we are focused on the performance and our best in class ram 1500 rev pickup truck

is demonstrating that we are bringing the best performance of the segment. >> carlos, you were talking about affordability. i want to ask about the broader market the average pickup truck right now in the u.s. costs about 54, $55,000. way too rich for the liking of a lot of people. as we see the market start to cool off a little bit in terms of pricing, do you expect vehicle prices overall to continue to trend down have we in a sense said, okay, we know what the ceiling is. they're going to start to come down from here >> well, it's normal it's normal that we see more pressure in the pricing, because we are coming out of very long period of scarcity the scarcity that was created by the shortage of the semiconductor components so it's normal that stepping out of that scarcity period, there is more pressure on the pricing. this is going to be possibly, come back to the period that we knew in the pre-covid times, but while we are considering that possibility, we also need to

think about how many billions of dollars we are investing in the electrification of our models. this is going, of course, very important. and the companies that do not have a very strong generation will possibly put themselves in trouble. so we need a strong investment we are going to invest $35 billion in electrification we start now this year in 2023, our bv offensive with our ram pickup truck and our pro master ev that will start sales this year but while we come back to more normal conditions in the market with more pricing pressure, we need to keep in mind that not only we have to cut costs on the ev technology, but continue to invest massively in this new technology >> and those investments continue in the billions of dollars. carlos, we're a little tight on time we will catch up in person next time i want to ask you about inflation and what you're seeing there. we'll save that for another

time carlos taveras joining us from the javits center in front of the new all-electric pickup truck. >> session lows here on the s&p, as we're almost back to 4075 dow managing to hold on to some of that thanks to the likes of johnson and johnson. stay with us good night! hey corporate types. would you stop calling each other rock stars? you're a rock star. you are a rock star. rock stars. please! do you know what it takes to be a rock star? i've trashed hotel rooms in 43 countries. i was on the road since i was 16. i've done my share of bad things. also your share of bad things. we know that using workday for finance and hr makes you great at your job. but that don't make you a rock star. ted! ted! ted!

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as we close out the hour, let's get over to dom chu with a look at what's moving, dom, as we continue to deteriorate here in the stock market. and keep our eye on bonds, which are rallying off some bad data over to you? >> absolutely. financials very much a focus right now. first citizen's banks shares up nearly 3%, helped along by analysts over at u.p.s., who have double upgraded that stock to buy they say it's a purchase of svb assets zions bank, outperforming thanks to help at analysts over at baird, upgrading it to an outperform rating. saying that that stock is trading at valuations not seen

since the great financial crisis then there's western alliance, one of the banks hit hardest from that silicon valley bank failure. those shares are tanking after it gave an update on its financial position ahead of a full earnings release on the close of april 18th. it didn't offer any substantial commentary on the status of its customer deposit levels. so watch those particular bank stocks sarah, i'll send things back over to you. >> all right, dom chu, thank you very much. when we come back, we're going to talk to josh friedman, he is the ceo and cofounder of canyon about rising recession odds and what the bond market is signaling with these low yields. we sceepmb f tlostin steerorhe ten-year we'll be right back. on employees through the pandemic, getrefunds.com can see if it may qualify for a payroll tax refund of up to $26,000 per employee, even if it received ppp, and all it takes is eight minutes to get started. then we'll work with you to fill out your forms and submit the application; that easy. and if your business doesn't get paid, we don't get paid. getrefunds.com has helped businesses like yours

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good wednesday morning i'm sara eisen with carl quintanilla. we are live for you at the new york stock exchange. setting the agenda for us today, canyon partners founder and ceo josh friedman with us here on set saying the worst of the banking crisis is not behind us yet. >> plus, barry biffle, his outlook for summer travel demand and we are all over the sell-off here in the markets right now. take a look. s&p 500 down