best box office weekend of 2023. is that us it is. applause it is. it's monday, april 10th. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from nasdaq market site in times square i'm andrew ross sorkin with joe kernen and melissa lee the dow is 2 po4 points higher. s&p is up a little over 1 point. we are on this three -- sort of

mini-three day holiday for the markets. >> for most people >> stocks were mixed dow was up .60%. s&p was down by .10% overseas, major markets are closed for easter monday holiday. france and china and germany and hong kong. you look at the 10-year treasury at 3.36. >> you had a full three days you should be well rested? >> i had a horrible friday with no "fast money." >> you don't know. which is worse >> i have been looking around for it and wasn't able to find t. it maybe it didn't show up on my dvr. tesla announcing it opens a

factory in china saying will produce 10,000 megapacks a year. that helps stabilize the power grid tesla has a factory with similar capacity in california elon musk said the china factory will supplement from the california plant the company is cutting prices of some vehicles. lephil lebeau will have the details on that story later in this hour. and pioneer about the possible acquisition pioneer is the second largest producer that would make exxon and pioneer the largest producer in the region pioneer has a market cap of 47%. another big week for data. economic data after last week's jobs report. senior economics reporter steve

liesman joins us now i thought it was great analysis that it wasn't quite as strong as it may have appeared on the surface on friday. i went back to thinking that's really good that it wasn't as good i was thinking how bad that is once again, we were looking for holes in that report to show it was weaker than it was on the surface. hoping we would find some which is because we're being held hostage by the crazy thing for inflation. >> joe, we should spend a moment to stipulate that both you and i, we want people to work and make good money and despite that, we have to sit around here and say this is good or this is bad because of what it means for the fed and outlook and what it means for stocks

we all want that to happen we like -- look, the idea the job market being too hot is an issue. i want to talk about the job and banking report which came out on friday the markets view at the end of the day of all of that, which is agreeing to me, the market saw the fed likely to hike with the key measures both measures have weakened, but not weak or weak enough to be happy about the fed not hiking 236 on the payroll lowest since the pandemic. still double the level needed to find jobs for entrance to the work force unemployment ticked down some see more weakness ahead ian shepherdson writing, march likely saw the last 200 plus

payroll report that's bad, but it's good. bank deposits. outflowing since the collapse of silicon valley bank. they stabilized enough, but bank lending has fallen commercial loans and people are talking about this plunging $60 billion in the last few weeks. they remain above the pre-pandemic levels. weaker, but not weak the market took in the data. the fed is more likely to hike with around 70% believe in a 25 basis point hike that is not enough to halt the fight against inflation which means more rate hikes. we will see if that is the case this week. we have a half a dozen fed speakers and cpi on wednesday. we expect negative retail sales data for friday, which is bad,

joe, but maybe it is good. >> the average depositor at the regional bank, steve your run of the mill bank. not silicon valley bank. $250,000 doesn't 95% of average depositors at community and regional banks have under 250,000? >> yes >> the problem is -- go ahead. >> jim has been writing about not a bank run, but bank walk. i want to explain it i'm trying to follow this carefully. it comes down to this. the issue right now is no longer safety we don't see the deposit flight that looked like people scurrying for safety of the fdic it is about interest rates it is about the idea that once the fed hikes again, you will have a five-pfive-print on the

rate look at the big banks, joe i looked at the one i use. i didn't want to name it i still think i'm getting .01 in my checking and .02 in savings banks have to increase the rates. we have bank earnings coming up. the idea of the bank walk and people looking around and saying i don't know what i'm doing andingand moving to money markets or other accounts with higher rates. >> it is an oversight. they didn't notice probably not deliberate. they wouldn't, would they? >> actually, joe, it is thinking it is deliberate think about it let's say you are a bank and you don't want to pay up for

deposits or hurt your net interest margin. let the flighty deposits go. what's left is the sticky deposits that don't demand a lot of rates those are profitable >> yeah. they are keeping the float whatever that money is earning somewhere is going to the bank, not you. >> right trouble on the other side of that, joe, is fewer deposits means they will not make the loans on the other side. that's where the economic impact of the credit contraction comes through. >> okay. thanks, steve. i want to know about "super mario. did they write a really good -- it's two hours did they write a really good -- i raced with those guys. they seem funny. >> the video game? >> i've done that. they seem kcute what happens

do think write a plot? that would be good on a big screen, right? that would get people into amc >> yeah. the "super mario" had a blockbuster weekend bringing in $196 million in three days the collaboration with the five-day global total of $377 million. the biggest opening weekend for animated title globally. the film i want to see also getting rave reviews is "air" about air jordan that story with nike and how that shoe came to be it is considered a film more for adults than kids done by amazon it will likely end up on amazon.

i think they paid $90 million for the production it is seen as a win. it is a fascinating column by matt who has been on the broadcast about the economics of is that a win or not a win how does it work it looks like a great movie. for those of us interested in the business of marketing. phil knight played by ben affleck. >> a reunion with "good will hunting" guys. it looks okay. i still want to know what the plot of "super mario" is and why it is two hours long rich greenfield said thursday that universal has taken the mantle away from disney for animated films >> it's a very cool thing. >> because of illuminilluminatin >> different

coming up, hewe will talk about the ftx bankruptcy saga. we hear from the debtors for the first time since the collapse over the weekend we will bring you that story next you are watching "squawk box" and this is cnbc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today.

new details this morning in the ftx bankruptcy saga. we have the debtors side of things we have eamon javers with more >> good morning, andrew. the management of ftx recovered and secured in cold storage over $1.4 billion in digital assets and identified $1.7 billion in digital assets they say they are in the process of recovering now. the first interim report paints a picture of the distysfunctionl management to convince the auditor they had corporate policies with such a lack of accountability, 56 entities did not produce financial statements at all the sign of the kchaos, this cites the internal communication

from sam bankman-fried saying we lost track of assets such as life and thousands of deposits were collected from ftx group's offices due to the failure of personnel to deposit checks. the firm lied about how secure the cryptocurrency was we expect to hear more about this at the next hearing on wednesday. andrew. >> fascinating, eamon. if money were to come back, how long would it take what are we talking about here >> we're talking months. the scale of this is enormous. trying to figure out where all of this money pis and when you are talking about cold storage devices in closets or anywhere

in the world the accounting for all that is an epic problem. that's first the second issue is figuring out where it all went. you saw sam pleading not guilty to the separate criminal process. he faces an additional indictment there is more to this story than just the accounting. the criminal side as well. that makes it very complicated >> eamon javers, thank you coming up, a so-called super app owned by uber is launching a spinoff, but backing from the uae investor coming up, we get ready for big bank earnings. t the beginning of the earnings season the biggest drop off we have seen since the pandemic. since that quarter all happening this wk.ee

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welcome back to "squawk box. uber spinning off the careem app. it operates in more than 80 cities in the middle east. it grew to a super app with grocery delivery and medical tests and bookings and digital payments and laundry and cleaning services. uber maintains the ownership

foxconn is planning to invest $820 million in the next three years in facilities in taiwan to support the electric vehicle ambitions. the company announcing the investment includes plans for electric buses and batteries for evs as it seeks to diversify the revenue base. and jon rahm won the masters after the marathon day yesterday. the day started with him trial by four, but they had to finish the third round earlier. it ended with a victory over brooks koepka and phil mickelson with the late charge he beat both those gentlemen by four strokes everybody was thinking about another spaniard that put that country on the map in golf seve 40 years since he won the

masters. when sergio won in 2017, it was seve's birthday. he died young from a brain tumor. now spain, i think, has more masters champions than most european countries at this point. jose maria and sergio and jon rahm i don't know if you were watching he has two of the cutest little boys we probably don't have that. there is fred, the chairman. they were waiting for him. so cute. they looked like cherubs really cute. blonde hair. he went to arizona state it was nice. something about augusta. there he is. you have to see the little boy he has the fattest little cheeks he is so cute. look at this guy he's so cute

anyway, it was -- look at that oh it was -- he said he didn't think he was going to win. he said he didn't think he was going to win until the third shot on 18 he was up four and hit it into the woods on 18 and had to go over a bunker and, of course, he put it within four feet and got par. he is like ice ice in his veins ko koepka not a great round for him. he has five majors or something. cool always brings -- always drama at augusta for some reason. it was great did you see it >> it was nice to see the softer side of joe kernen >> i'm soft all the time that sounds bad. >> leave it at that. coming up, reaction to friday's jobs reports and we look head to the key inflation data and look ahead to earnings

season. and later, mohamed el-erian will join us and talk about the fed's next move. "squawk box" will be right back. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure 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 morning well come back to "squawk box" live from the nasdaq market site in times square. nasdaq is giving back a little in the red marginally. a developing story the u.s. navy carried out operations in the south china sea. the move comes after china's military carried out drills around taiwan this weekend the chinese military said it completed tasks around taiwan. we will get a live report from beijing in the next hour interesting perspective in the journal that the country now sees itself as a peacemaker.

that is at odds with the be bellicose stance with taiwan buddy cozied up with putin nobody in ukraine would accept the peace plan. >> people are still doing business the shanghai factory the markets will pick through that number or a number of economic and corporate earnings reports this week including key inflation and retail sales a lot of folks still trying to get over the jobs number from friday we get earnings from big banks averages and we get the chance to react to the employment report 236,000 jobs added in march.

for insight into how this could play out in the market, let's bring in cameron dawson and kevin cummings, chief economist for natwest markets. good morning cam cameron, let's start with you. let's hit the jobs number on friday and roll it forward as to how you see the numbers this week and how it relates to it. >> i think the jobs number does increase the probability that the fed hikes 25 basis points in may. you have to see a big, huge downside surprise to the cpi number to really change that probability or move it lower when we look at the cpi number, what we do see is we have to remember and look at the month over month numbers that gives us the best indication of the underlying impulse within the economy the core services shelter is the super core cpi that the fed

watches closely. that react sell rated last month moving in the wrong direction from the fed and remains elevated at 6.5% all eyes in that on wednesday. >> kevin, are you in the same camp >> it will remain the focus of the fmoc meeting there are a few other pieces of information that the fed gets leading up to the may meeting. i would say one of the things the fed is concerned about is wages. we will see that later this one. most importantly, i think, what differs this meeting relative to last meeting is a fed senior loan officer opinion survey. we won't have the details of the survey until after the fmoc meeting. that is something the fed will be focused on going forward and to see the extent and pervasiveness of the tightening of the lending standards in the

turmoil in the markets that is another piece of information the fed will have which is different from the other meetings they had which is expectation to continue to tighten rates. >> question for cameron and ke kevin, it relates to the rates issue and we are still in a banking crisis and that might help with the inflation story. how concerned -- we will get earnings reports from the bank -- we will hear about the deposits and where things stand. what do you think we will see? >> i think -- >> i apologize cameron. >> we have to listen to two things closely what the expectation is for future loan growth loaning growth is so very important for economic growth. it is one of the reasons why economic growth is so resilient last year because loans continue to run at double-digit pace. if banks are pulling back to

preserve liquidity, that could spell more weakness for the economy. then the loan loss reserves which is a credit issue within the economy. if that continues to tick up, that could be a sign that banks are concerned about underlining credit conditions. >> kevin, you were jumping in there? >> yeah, i would piggyback on that what we saw through january when the fed's last senior loan officer opinion survey, there was a pervasive tightening and lending standard and borrowing costs increased. back in january when the survey was conducted and you look at the details of the report, it suggested that banks were suggesting further tightening and lending standards. this was all ahead of the turmoil in the banking sector more recently. i think it is safe to assume we're probably going to see more tightening in the lending standards. the jobs data has been resilient. we have seen a slowdown

throughout the quarter somewhat. i think it is a matter of time and it seems inevitable that the economy will show more restraint because of tighter credit, labor, capital and gdp it will show more evidence of slowing than so far. that is on the minds of fed officials in may >> conventional wisdom, but everybody seaems to think we ar moving in a more contractionary period or recessionary period. is there any up side stfor you? >> the fact we are still adding over 200,000 jobs is impressive. we saw a step down in the pace of job growth. january and february and 236 in march. and income growth should continue to move forward that has helped consumption.

the first quarter consumption will be somewhere in the neighborhood of 4% the economy hasn't rolled over yet. it is an expectation it is a long time coming we have been talking about recession for so long now and it is the most widely anticipated recession ever shocks are what ultimately pulls down the economy this has been a big shock that's only a matter of time where things will be more weaker than expected in the coming few months >> final words to cameron. upside surprise or nothing >> i think the equity market is expecting a reacceleration of growth if you look at fourth quarter earnings for 2023, they are expected to re-accelerate to growth compared to negative 8% this quarter and rolling forward to 2024 another 9% growth. there is optimism baked into numbers that the worst after

this quarter could likely be behind us and we start to recover from here. i think that remains to be seen. mostly we see a falloff in that credit activity. >> we will leave it there. thank you. i appreciate it. coming up, tesla cutting prices of the vehicles and announcing a new battery plant in china phil lebeau has the details. and later, mohamed el-erian will join us with the latest. and if you miss "squawk box" you can watch us anytime with the favorite podcast

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well come back. nasdaq and dow down and the s&p up a little bit. lots of data coming this week with corporate earnings. tesla announcing a new battery plant. phil lebeau is here with more. hey, phil. >> joe, megapack battery early in the morning let's start off with the megapack plant coming from state media in china

and confirmed by elon musk in a tweet. this is based in shanghai. m m megapacks are energy storage packs. used by companies and utilities. in theory, it helps the grid they will build 10,000 annually. production starting in the second quarter of next year. the news getting attention this morning and i'm seeing the notes which are mixed on this regarding the price cuts for the model 3 and model y and s in the u.s. here are the new base model prices for the model y new base model offering for under $50,000. model 3 is now $41,990 the significance is the tesla market share dominates the united states, but it is slowly eroding. we compared these numbers with the first quarter of last year

first quarter of last year, tesla market share was 75% so, while it is the leader by a long shot at 62%, it is seeing market share erode remember, the ev tax credits take effect next week with we know as you look at shares of tesla that the standard range model 3 is unlikely to qualify for the $7,500 does that make people think twice in buying a model 3 and model yy? the wait times are down. a lot of people say this doesn't strike as coming from a position of strength. this is more of a position of wait times dropping and we want to stoke the market. we are not sure what is going to happen with the tax credits. let's cut prices again fifth price cut this year for tesla vehicles in the u.s. guys. >> stock did well. now i'm wondering again as it

pulls back a little. phil, it is pulling back in the low 18180s. with the twitter hoopla and everything else and it got dicey. >> joe, i would not be surprised if the stock stays in this range. i don't know how low or high it goes 170 to 190 range i would not be surprised if it stays here through the company reporting earnings on the 19th after the bell on the 19th the focus now is on gross margins. gross auto margins the expectation is 20.5% if it drops below 20%, that could put pressure on the stock. that is what people are going to be focused on. >> i think mercedes is one of the sponsors of the masters. i saw the mercedes ev. they say it has a cool style for the mercedes they showed the interior it looks high tech

they are coming. people are coming after it >> absolutely. joe, one of the different points, i know you got to roll, one point is you see in the market is people say do you like the spartan inter i don't know w -- interior with the tesla? do you want the instrument cluster? >> you get that. you know you get that with some of the luxuries. beemer or mercedes have you been in a tigtan? >> i have. that is rare air with that price point. you will not see a lot of those. they are out there >> ready for primetime priced at 150? is that it a model s? >> the titan >> yeah. >> i don't know the base on the titan. i think it is lower than the

150. much lower. >> that'ses what i thought >> you get up above $90,000. you see them out there >> model s, i saw a new one. >> model s is now down to $84,500. something like that. >> you can tell it is a new one. i'm still asking for -- i don't know i like to tell if it is a 2023 i think you sort of can. >> can i ask phil a question >> you don't need to ask me that >> go for it >> you two keep talking. i keep looking for an entrance here >> you want me to? >> no, no. you said this is the fifth price cut for tesla. ford has cut the price of the electric f-150 a couple of times, right the other automakers are doing

the same thing >> the mustang mach-e they cut the price. that was a direct competitor to the model y in the crossover utility vehicle segment there. don't be surprised if this puts further pressure on the mach-e the lightning con, they continuo raise the price there. >> thank you, phil phil lebeau. >> i could use breakfast andrew would you like something i'm ordering >> what are you ordering >> i don't know. joe? >> chick-fil-a has breakfast they always try to talk me into that coming up, a showdown in artificial intelligence. looking to take on microsoft in the a.i. search. you can watch or listen to us live any time on the cnbc app.

well come back. the u.s. arm of binance is struggling to find a buyer over the cash the failure of the two financial firms seen as friendly to the cryptocurrency community and leaving many to find new partners binance looking for one middleman to store customer funds. this is an interesting development in terms of folks who don't want to do business with binance in this moment. >> i think there is a lot of

fear in general with these platforms. >> i think the fear stems from all of this know your customer stuff. >> yeah. >> which are the rules and anti-money laundering. google the ceo announcing plans to inn corporate improve responses. pitch high dismissing the notion that chat bots pose any threats to google's search business. joining us now is evercore isi head of internet research. mark, great to have you with us. before we delve, you know, strictly into this sort of ai race that seems to be going on, i'm wondering in general for technology when you have an alphabet up roughly 22% year-to-date, and you see what's going on with rates and the economy, how concerned are you in terms of the macro backdrop of the sector? >> definitely concerned. it's consumer discretionary sector much more than anything else

that said, the setup for this year for tech stocks in general, maybe particularly for internet stocks is estimates had been de-risked and multiples had been de-risked and what's new in town for technology stocks and internet stocks are all these job cuts which i think create these eps linkslingshot plays. the setup was very constructive, at the beginning of the year we think it still is, and we look at a few of these names, especially you didn't mention meta meta is a big ai play. it's only trading at 13 times cap earnings there's still an interesting we think tactical constructive play on tech and particularly on consumer internet given how roughly the ksstocks were treat last year. that's the constructive setup for this year. >> where are we in that slingshot? are we still pulling back? when are we going to release that slingshot to see that recovery sf. >> i think it's probably the earned of this year.

unless you've got something really specific in terms of product cycle, you're not going to get revenue growth reacceleration until 2024. there are a few companies that are an exception netflix and facebook they do have three product cycles going on right now. one is better monetizing these reels videos and then improving their core ad tech stack, their ad attribution models, post all that apple privacy shock the system hit last year, and third is this click to message ad opportunity that they have that i think is differentiated. we started off with ai i'm looking at this as a real positive influence or opportunity for a good number of these names as they -- as ai tools get introduced, ai processes get rolled out, you should see greater efficiencies and greater tools for their consumer customers and for their marketing or advertising customers. i think there's a real positive play here. it's kind of the theme that's going to build up as we go

through the year. >> there's so much, when you think about ai, there's so much thought to, you know, how the consumer, how its end user will internet with ai as opposed to how the companies will use ai to increase efficiency. so from that standpoint, mark, whether it be used to help programming or help match advertisers with space, which companies have the most lever to that aspect. that seems like the lowest hanging fruit for the use of ai in terms of the impact on the balance sheet. >> well, the unfair advantage that some of these companies are going to have is their scale in order to succeed in ai you need access to massive data pools so you can train the al fwor rhythms that gives you amazon, google, facebook then you need access to an enormous amount of capital it's expensive, and then you need access to large pools of engineering talent that are focused on ai. look at the places that have filed the most patents

microsoft is definitely up there. so is google and facebook. so it's usually the larger companies that have going to have the advantage when up a technology innovation or a change that's this large in size because it requires resources that most mid tier companies can't touch. >> how do you view ai as a catalyst for meta versus a potential ban on tiktok? >> well, i think they're both probably -- i think they're both probably catalysts for meta. we think our house view is that a ban of tiktok is less than a 50% outcome. but you know, it's up materially if you'd asked us a year ago, it's less than 5%. that's a clear cut catalyst. i think ai is something that plays out over time. you mentioned something earlier that's a really interesting play for meta, which is chat box. the company that owns the two largest messaging application in the world, it has a billion

people on a weekly basis that messages with businesses and businesses messages with those commu consumers. if you can allow businesses a way to reduce their customer service costs, get people off the call centers and use bots as a way to kind of provide better services from businesses to km consumers, if you've got the messaging app in the middle of all of this, there's a real opportunity. i think that's the driver behind their click to message opportunity. >> is this a winner takes all? i played with chatgpt all weekend. we were doing all sorts of crazy things with it are you of the view that something else could come along that can learn large language models like this do you think bard will be as good as open ai? do you think there's going to be ten of these things or two of these things >> just because of the capital requirements and you need large pools of data, i don't think there are ten of these things. there will be two, three, or four of these things that get

played out, and we'll see which one wins we've done our best at evercore to kind of experiment with all of these i still think you can find the flaws if you look for them in the models and the use cases are still, you know, somewhat limited for the vast majority of people who go to google to do search the vast majority of people are not looking for large language model responses to the question of where's the closest golf course you know, how do i get round trip tickets to hawaii, things like that. but i think you'll find more and more use cases it's very unclear to me who's got the best technology right now. i've just been really impressed with what microsoft has tone. >> marks, thank you, good to see you. coming up, the big banks, they're going to be kicking off earnings season later this week. we're going to tell you what to expect later ahead. and david rubenstein is going to join us to weigh in on the fed's next move. squaw"squawk box" is coming bach all of that after this

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good morning, a big week ahead for the markets. key inflation reportings in the kickoff of earnings season starting with the anks. and exxon mobil may be on the prowl for a mega deal. find out which producer could be the target. and u.s. destroyer conducting operations in the south china sea following china's military drills around taiwan we're going to have a live report from beijing in just moments as the second hour of "squawk box" begins right now. ♪ good morning, and welcome back to "squawk box" here on cnbc live from the market site like all of us, markets getting kind of a slow start to the week i'm joe kernen along with andrew ross sorkin. >> speak for yourself. we're off to a fast start.

we're here we're ready to go. bring it on, baby. >> becky is off today. here's the futures nothing is going on. >> looking so excited you are. >> i heard you say that earlier. we've got a lot going on i love how you do that i do. >> we do have a lot going on we're all per receive rating and considering what happened on friday with the jobs number. >> we did that they're not here yet. >> they're not here, wu i've got to think about them. >> exxon mobil, potential deal there's so much happening here >> great guests. >> great guests. >> right over here we've got david rubenstein coming up. >> oh, him >> yeah, and there's that. >> oh. >> he's got his own tv show. why is he here the s&p right now is toemtally unchanged. >> you've been on his show >> excuse me

>> have you been on his show >> i got to work up to that. >> you got to get more polished i guess, i don't know. >> what you looking at >> i'm looking at the ten-year not a lot of action. i did think the two-year was getting close to four again. i thought that was kind of notable even though -- i don't -- at this point i think maybe if yields were to back up a little, i think that might be good because then we wouldn't. there's a perception now that bad news is going to be bad news if we are in recession mode, we're no longer just going to be glad that the fed might tap on the brakes not tap on the brakes, stop tapping on the brakes. there's a perception recession is now in the cards, and that could be bad for stocks as before weak economic numbers were good. it meant that maybe the fed was getting close to pivoting. let's check out oil as well, and now the stories today are that there's a lot of producers you might not think about that are

churning out plenty of oil so maybe even with the recent cuts from opec plus, maybe it doesn't end with a slowdown. maybe 80 is hard to defend we'll see. s >> let's get to frank holland with a look at this morning's premarket movers. >> good morning, it could be a possible m&a monday, possible keel in the oil complex. exxon is held in formal talks. according to that report, exxon is hoping to use its healthy cash position to expand talks with at least one other company. of course oil prices surged last week following those opec mpric cuts we can see exxon shares down fractionally pioneer natural resources trading higher, up 8.5% on a possible deal with these two companies with exxon possibly acquiring pioneer natural resources. tesla lower following a decision to make shanghai the location

for its next mega factory. in a tweet, elon musk said the shanghai -- mega packs are large batteries used to store energy and help stabilize the power grid to ideally prevent outages. tesla cutting prices for the third time this year shares are down almost 2% this morning. uber shares moving lower after reports its ride hailing subsidiary, kareem will spin off. uber purchased the middle east based company in 2019 for 3.1 billion. ua tech holding company en will invest $400 million in that spin you can see uber shares down fracti fractionally joe, back over to you. >> okay. frank holland, thank you stuck around here for us now.

he was here for us earlier on worldwide exchange now he's here for us. >> is he better than chatgpt that's really the question. >> of course frank is still listening >> you mean is chatgpt better than all of us >> i thought you were referring to jason >> oh. >> i'm definitely better than chatgpt. >> because we were talking about chatgpt before. >> i thought you were talking about frank. i'mlike that's not very nice. >> we were having a nice little chatgpt thing over hear. >> like the roman emperor, gratuitous nastiness >> that was not the intent frank holland, not the intent. not the intent there should be a chatgpt thing of frank. >> is your whole thing going to be generated by ai >> no, we're still doing it the

old fashioned way. >> i still need to figure out why you're staying cautious, you're staying kind of bearish you have watched 4,100 hold. i don't know why it's holding on the s&p. here's my question to you, what don't we know that causes you to think that we could have another, i don't know, what do you think we could do, 10, 15% lower? why don't we know everything why isn't everything already out on the table what would be significantly worse than we are -- >> i'll say, let's put it this way, what we haven't seen, right, is a significant weakening in the labor market, and i would say there's never been a news cycle that starts when the unemployment rate is 3.5. i would argue almost by the very nature of the business cycle, employment employment's -- unemployment's going to have to move higher the other thing we haven't seen is significant or persistent weakness in earnings we have one quarter of down

earnings in the fourth quarter and it looks like in the first quarter, which is going to start in the next week or so, you're going to have a second down quarter year-over-year to me, those are two big things. the other moving part in this, this gets maybe a little too -- maybe too pie in the sky, but we have to see what treasury yields look like when the debt ceiling is increased, you know, part of the reason why i think yields have come down is partly because the treasury is not issuing treasuries because you've hit the debt ceiling and you're drawing down the general account, and ironically, i think once you increased the debt ceiling, there is a chance that long-term interest rates rise. >> were you expecting the move from the october lows to reach all the way back to 4,100? >> no, absolutely not. we've been -- as you know, we were like the teen of people we were bullish for eight years. we got bearish last year. >> there are alternatives.

>> tara. >> you just need tara. >> did you coin that too >> chatgpt kind that. >> i'm sure it did listen, a year ago looked like a great call, but as this market does, it can make you look foolish. we felt pretty foolish for a good portion of the first quarter. i'm kind of sticking to the concepts -- >> i know, i saw your notes. >> -- which is to say listen, generally speaking if you have a tightening of fed policy, if you have a tightening of credit standards, you have lower profits, those things are generally -- don't portend well -- >> i just don't understand why we don't already see more -- i don't know why it's holding at 4,100? if the s&p is apple and microsoft is 13% -- >> that's one reason. >> they hold and we've certainly seen that sort of bid to quote, unquote safety i put them in quotes because who knows if they're really safety

in the banking crisis. tech is that tent pole for the markets, what point do you think we need that to crack in order for the s&p 500 to crack. >> listen, that's where all the weights are. that's true as far as the indices are concerned. i would also say for your average investor who probably owns a lot more than just ten stocks that were up meaningfully in the first quarter, their statements that they're getting right now are probably not as reflective of good news as let's say the nasdaq was or even the s&p 500. so that's another moving part in this, if we're talking about the individual investor is that probably the indices belie what they're actually seeing on their statements i would say that there's a clear slowdown in economic tactivity, and i would say whatever your odds were of a recession before silicon valley bank failed, they have to be higher now. ours were high before that happened, but i would -- it seems to me every bank in the country now is looking at its

loan books every bank in the country is now tightening lending standards, and the fed has to -- the fed should keep that in mind. >> maybe multiples are too high, and earnings are too high. we're at 4,100 are you a 3,100 guy or a 3,200 guy? >> i'm more of a 3,200 to 3,400 guy. >> you are >> that would be gut wrenching >> like a slow, steady, just hideous decline for the next year >> we're -- frankly, i get a lot of questions now about the no landing scenario where people say why do we have to land at all, and i would say, you know -- >> what do you mean no landing >> listen, why can't this persist? you have a shortage of labor why does there have to be a recession. the answer i think is if you're going to have a typical business cycle where the fed isn't going to monkey around with it, you're going to have higher inflation and higher long-term issues as a result, and that means like the no landing center means you land into the side of a mountain or

something. like i would much rather have the weakness in the economy markets this year before more excesses get build up. to me it's much more painful that way when it eventually comes. >> the reason i think you maybe on to something is if we have back to back crises since 2008 where we stay at zero the entire time, is this as bad as it really gets as a couple of crappy regional banks go it seems like we have really played our hand forward in terms of printing money and more should come home to roost. fiscally too, what we've done for eight years. >> those two things are symb symbiotic. i feel very strongly about free markets. >> there haven't been any -- >> for the last 12 years we've fixed the most important price in the world, which is the ten-year treasury yield. it's created a lot of other unintended consequences. of course, ph.d.s think it's the greatest thing since sliced

bread. it's created a lot of unintended consequences -- >> is this banking crisis we just saw, is that the worst consequence, or are there consequences to come still you don't go through this period of 0% interest rates and you build a whole economy around it and the only fallout you see is a bunch of regional banks. >> i think it's in terms of capital formation. also just in terms of average people, right? this has been highly regressive. if you're a wealthy person the last 12, 13 years have been terrific you own venture capital -- >> but it succeed for a year so far. >> so far. >> and you look at technology and what we're achieving, quantum leaps. i mean, there's a lot that we deserve just because we're doing amazing stuff. medically and aics. >> i think in free markets those things would have happened anyway i don't think you need 0% interest rates. >> maybe it's different this time. >> i asked this question the last hour. we're going to hear from the regional banks come the end of

this week really into next week. what do you think we're going to hear about the deposits, and is that going to cause everybody to calm down, or is that going to cause a complete and utter panic and walking into next week, you know, we're going to have next weekend before these earnings, are people going to be -- is this going to be like jitter craziness? are we going to see deals ahead of it? what do you think is going to happen capital raising? you kind of want some of these banks to announce their earnings with some other news. >> listen, i don't know. i'm more inclined to think of the former it's not going to be as bad as people think you have some time in between silicon valley bank and now to shore up some of those finances and do what you need to do to keep the deposits in place but i think as joe said, you know, there's never just -- it's like the cockroach there's never just one there were two companies, three companies, all banks have been under the same monetary policy for 13 years they're facing a lot of the same headwinds, and so but more

mergers it seems to me would not be unheard of. that seems to be a pretty reasonable expectation given the fact that we have 4,000 banks. >> so i was wrong, that was -- that was unbelievable. that was, you know, there was nothing amazing. >> a lot going on. >> way better than chatgpt >> you are not being replaced nine anytime soon. you are not being replaced anytime soon there's no way thank you. >> coming up, earnings season and the financial sector, these will be the first reports that we're going to hear from, in fact, in the banking crisis that ripped through the markets last month. we're going to check out the expectations, and then the banking turmoil, one of the many topics we hit with the cofounder and chairman of the carlyle grp,av rou didubenstein at 7:30 a.m. eastern time. don't miss it all, we are coming right back. >> announcer: this cnbc program is sponsored by truist wealth where meaningful relationships matter most.

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welcome back to "squawk box," turning to bank earnings right now, we're going to hear from jpmorgan, wells fargo, city bank and pnc all set to report quarterly results. it happens on friday the first report from the big banks since the class of svb and signature bank i want to bring in jason goldberg, managing director and senior analyst at barclays we've been talking about the

smaller banks, some of the regional banks and what we're going to be hearing from them in terms of deposits, but of course we hear from the bigger banks first. what are you imagining >> yeah, no, clearly deposits and focus i think across the industry for the biggest banks we think in the early days of the sivb fallout, they're beneficiaries of some of the deposit movement. that's something that could help them in the near-term. certainly looking out, we think the cost of deposits could come up higher than expected. this quarter certainly something to watch as the year progresses. >> in terms of how you think some of these banks stack up, what do you want to own right now, and what don't you want to touch? >> yeah, no, i think certainly a bias for some of these bigger banks that are well-positioned jpmorgan and wells fargo coming out on friday. we do think there will be beneficiaries to this flight expense growth kind of returned in the latter part of last year. we think that can carry

throughout this year while you're certainly seeing banks continue to build on loss reserves, we to think losses remain benign for the bigger banks in the near-term. >> what about the citis of the world, the wells fargos of the world? >> citi is kind of undergoing a multiyear restructuring. we think you'll see continued progress this quarter with a few more kind of country exits coming to completion, which should kind of help bolster them they're still kind of in that reconfiguration mode. >> let's talk about some of the regionals, you know, some of them arguably, they're either falling ives or one of the great value plays of all time. is there anything on this list that you say to yourself, i'd own that >> yeah, no, i think for the regional banks there's obviously a lot of concern on these deposit flows. from our perspective, i think that the vast majority of banks from a liquidity solvency perspective, they're in fine shape. still, you know, net interest

income, as we look at the remainder of the year will be, you know, pressured. certain regional banks, if you think about pnc or fifth third, you know, we think our position to kind of weather, you know, this kind of uncertainty >> okay, but you can buy first republic right now for 13 bucks, 14 bucks is that a great price? is that a terrible price g >> yeah, no, i think that's kind of one of the few banks that i think the jury is still out. clearly they experience significant deposit outflows after sfid that's a model that really is predicated on needing kind of low cost funding and their funding costs went up dramatically in the latter part of the first quarter so there's still, i think, a lot of work to be done there as they try to kind of rebuild profitability. >> how do you view, you know, how the larger banks actually benefit from this flight to safety, jason? if they get the deposits in, you know,they're going to have to do something to keep those

deposits, if that's, in fact, what they want to do we are seeing increased competition particularly among the regionals that may have lost deposits in terms of higher cd rates. first republic just a comparison, seven-month cd is 4.95% of latest look markets at goldman sachs is 5.05% for a ten-month cd, whereas just a savings account at a citi or jpmorgan is a fraction of a percent at this point. >> yeah, no doubt. i think, you know, if you lack at kind of deposit betas, kind of the change in the cost of deposits relative to fed funds, you know, they increase steadily throughout the course of last year, 10% in the second quarter, 20% in the third uarter, 30% i the fourth quarter on a cumulative basis you know, as we kind of think about this year, we're kind of originally thinking that number would be in the 30 to 40% range. i think expectations are closer to 50% deposit costs will be higher than expected this year

that being said, assets continue to reprice higher. that provides some offset. margins we do think will be under pressure the regional banks tend to be more exposed to that than larger banks, two-thirds of their revenues, it's less than half at some of these money center banks given they have other revenue sources, which we do think can hold up better in the current backdrop. >> we will leave it there. we will see what happens on friday and all next week i'm sure i'll be talking again to you soon. thanks. >> coming up, if an ev company or battery maker is looking for the best place to build a new plant, there is one man you're going to need to know. we're going to meet him next or in the next half hour anyway on "squawk box. as we head to break, check out the ev makers premarket, "squawk box" coming right back

the u.s. navy says one of its missile destroyers carried out operations in the south china sea earlier today. the move coming after china's military carried out some drills, military drills with simulated precision strikes

against taiwan that happened over the weekend eunice yoon joins us now with more from beijing. >> reporter: hey, joe, the chinese military have accused the u.s. destroyer of illegally entering chinese waters and says that its troops are now on high alert. this comes as china simulated a blockade around taiwan and also conducted mock precision attacks on strikes as part of three days of scheduled drills. now, the state media has also said that china's home grown aircraft carrier has also been engaging in these activities for the first time, and this, in fact, was detected by the japanese, japanese authorities have said it was spot near oak no okinawa. beijing has said these drills --

stopovers o'on a larger trip to central america. she has since returned this weekend to taiwan and has vowed to continue these exchanges with the u.s. and u.s. lawmakers. over the weekend she hosted another u.s. delegation. despite all of this, though, and the tensions and the drills, all of this is seen as less aggressive action on the part b b b beijing. it's been seeing as possibly an attempt by beijing to appear stern and tough on taiwan, while at the same time playing up a somewhat more new role for beijing as international peacemaker guys. >> that is the -- that is the take in a lot of the media over here, eunice, and that is that

china's attempting to balance its anger over taiwan with the desire to play a much bigger role in the globe as far as a peacemaker and just as one of the leader global entity i guess all part of what we -- i guess if you're really worried about the future in this country, you think they want to supplant the united states as the global leader. i guess why wouldn't a country want to do that. >> reporter: well, in terms of all the speculation, i think it's all because of the timing of these drills. the during the week, beijing had a somewhat muted response, and then the drills started to get ratcheted up over the weekend, and this just happens to be when european leaders and middle eastern leaders, other foreign dignitaries who has been visiting through the week had all left macron had left the french president, as well as some

foreign ministers. everybody had left, and then suddenly we saw these drills, and in addition to that, there were some -- what are scene as symbolic sanctions on entities that seem to -- are seen by beijing as promoting taiwan as well as the two places that had hosted tsai in the u.s., and that's the hudson institute as well as the ronald reagan presidential library >> very good, all right, eunice yoon, that's a nice shot i like it. all right, see you later thanks still to come, the carlyle group david rubenstein on the state of deal making right now at 8:00 a.m., mohamed el-erian will join us as the markets get ready for a big week of data and earnings reports "squawk box" is coming right back

tsai welcome back to "squawk box. you might be coming back from a three-day weekend, just in the jobs reports futures are looking a little quiet, although the nasdaq has steepened its losses as the morning has gone on down about 68 points right now s&p 500 looking to open nine

points lower dow down about two points. i want to get to our guest this morning who's on set with us, here to talk about the fed, the banking crisis, so much more, he's got a new tv show as well, which we'll talk about in a moment david rubenstein, cofounder and co-chairman of the carlyle group. among those projects is a docuseries that's out a couple of weeks still on pbs. can we start with the fed? i'm so curious you saw the jobs number on friday it was easter weekend, so i think -- i don't know how many people actually did see the jobs number we hope a lot. did you say to yourself, okay, things are actually better or worse than we thought, and therefore, what when you sort of intuit what jay powell has to do about it, where are you now? >> it's clear that we have an inability to get the unemployment rate as high as the fed would like the unemployment rate is 3.5%. they want it to be 5 or 6%, but there's a tight labor market because the market is so tight, they can't get the unemployment rate as high as they would like.

that's a big problem for them, a problem for everybody. >> jay powell says i've got to keep putting my foot on the neck of the economy, if you will? >> i think that when the may meeting comes up, i think it's likely to have a 25 basis point increase again more likely than not. >> that's not a surprise for you. it seems like a surprise for the markets. >> markets are sometimes wrong i would they 25 basis point increase is more likely than not because inflation hasn't really gone down as much as they would like it's about 5.5% now, and they wanted to go to 2%. >> we keep talking about the banks. where are you on this crisis is this a crisis what does this look like to you? >> i think people didn't anticipate something like silicon valley bank, and we were surprised by it. now i think the federal government has gotten its act together and pretty much solved the problem for the short period of time. you can always have a banking crisis. >> you remember back in 2007 there was b and p power in the summer, then we had bear, and there were these moments where it seemed like, okay, maybe

things are okay, but it really wasn't solved, and i could argue to you that the implicit guarantee around deposits is sort of a temporary solve. but if you told me that four, five, six regional banks were going to go out of business in one weekend, that implicit guarantee may not be explicit anymore, do you know what i mean >> the federal government is going to more or less guarantee deposits but not creditors and shareholders that's one of the problems they've had solving some of their problems there's a gigantic hole in their balance sheet. anyone who wants to buy it needs protection from the federal government, and the government is reluctant to provide that protection. >> have you been looking at any of these banks >> i have not personally been looking at any of these banks. is. >> is car lyle -- >> many people have looked at these banks but i think the federal government would prefer to have a strategic buy these banks. >> do you think it's less morally hazardous if we imply

that we're going to save depositors because it's an fdic bank fund or does it just give certain bank ceos license to do things i'm going to pay a higher interest rate and get these depositors, i don't have to worry because it's sinsured. it seems like not quite as bad as what we've done in the past, but it doesn't seem like a good policy. >> if you were a regulator, what would you do if you had said you aren't going to protect depositors, you would have had a run on the bank. >> do you think ultimately we need a more explicit policy around deposit protection? >> i think probably it will have to be raised from 250 at some point, but even that isn't going to solve the problem you really have people who have enormous amounts of money. >> you have big businesses, small businesses that have enormous amount of cash. what do you do about that? >> if i had the answer to that i would be in iowa, new hampshire. >> it's the same as our taiwan policy if it happens again, your

depositors are safe, but we're not doing it for everybody it's incongruous. >> government policy isn't as precise as you would like. >> you don't say >> if you were making policy, what would you do? >> i'm torn. i mean, remember we let leeman go it's like let it work. >> things can happen. >> the politicians in washington right now is to protect depositors and not protect creditors and shareholders. >> you would agree that without -- that capitalism without downside is not capitalism >> well, yes, but i mean, capitalism is something you support, right >> i support it, but i don't support it that gains are -- you know, the ceos get the, you know, all their options kick in because they got the stock up, but when you lose it's socialized i don't agree with that. >> silicon valley bank's ceo is out of a job it's not as if somebody who's a ceo of one of these banks think they're going to be rewarded when the bank goes under he's out of the job now. >> when you think about the

repercussions of this whole banking crisis, one obvious one is just a tightening of credit overall, but how do you think through the most acute impacts in the economy, a lot of people are pointing to commercial real estate, morgan stanley had this piece out about how there's a wall of maturities that are going to come due in the next couple of years. >> jamie dimon in his annual letter said we're not out of the crisis i think he's right there could be another shoe to drop or, so but generally i think the banking crisis is not as severe as what we had in '07, '08, and i think the federal government is very much on top of it. there's the smaller regional banks are probably a bigger problem. in '07, '08 we had problems with the larger banks. >> how hard is it for you to get a loan today in terms of you're looking at businesses, the rate you're getting, where you're getting the money from, and how has that conversation changed over the last six weeks >> i think if you're looking for a home mortgage and you have

some reasonable income, you're probably going to get to your loan. >> no, no, no, i'm saying private equity, you're looking to buy a wbusiness. >> big private equity firm you're going to go buy some companies. the loans are coming from different places today. >> it used to be you went to the bank for the loans now you often go to the private equity firms who have credit shops as well. you're seeing the private equity firms do all the lending. >> is that good or bad for the system >> i'm not going to say it's bad because my firm has that business and i think it's a pretty good business to be in, but there's no doubt that that part of the business is not regulated the same way that banks are regulated. i suspect if there was a problem there at some point, regulators will come in right now there hasn't been a problem and i don't see a big problem coming. >> how good is that business right now as other traditional means of borrowing money shut down, and what is the rate that you're getting >> well, depends on the credit and so forth, but is a good business to operate if you're the owner of it in part because it's a business where you can manage a fair amount of dollars

with fewer people than the private equity business. private equity business is very staff intensive. in the private credit business you don't have as many people. >> if you talk to people who are going to go get a loan they still prefer to get a loan from the bank and get a loan from the private equity firm for the one major reason, which is if you're going to default on your loan, the bank is, a, likely to give your more time to deal with it, and b, the bank doesn't want to own the asset. the private equity firm is very happy to take the asset off your hands. >> private equity firms have been in this business for a while. it's been a pretty good business for private equity firms there haven't been big problems yet. right now the business is pretty well-managed i think. >> from a shadow banking perspective, you say there's no regulation, there's very little regulation. >> modest regulation. >> do you think there should be, and if there was, what is the issue you worry about? >> i'm not saying the federal

government should go in and regulate it. i think right now there's not a big problem. the business is working pretty well and the federal government isn't really needed to come in and help this business right now we also don't have deposits from small depositors we have to worry about. i think right now the business is working pretty well we haven't been through a stress test like a great recession where you see how those businesses operate during a great recession. >> where do you keep your cash >> i'm sorry >> where do you keep your cash do you keep it in a big bank, a small bank, money market funds, and has that changed >> we have many accounts across many different banks and you know, we have large banks, medium banks we have lots of different sources. we have a lot of cash to put in various banks. >> before we started the segment, we mentioned you have a big docuseries coming out on pbs. >> i have an eight-part series on iconic america. it's about eight iconic american symbols and it's designed to educate people about our history

a bit. fenway park, the oldest ballpark in the major leagues, the golden gate bridge, the american cowboy, the american bald eagle, stone mountain, things like that it's an hour each one of these it's statendesigned to educate e about the the history of the symbols of our country and hopefully get people to read more about these things and learn more about american history. >> this is part of a long-term thing you've been doing in terms of donating a lot of money to some of the monuments and other things afternoon round the coun? >> i try to educate people about american history you have an informed citizenry, sometimes or citizenry is not as informed as it should be >> tread lightly on some of those i would say. it's not the same docuseries you could do 10, 15 years ago. >> it's different because today, docuseries show the good and bad more than they did many years ago. this shows the downside of certain things take stone mountain --

>> that's what i was going to say. >> i'm surprised you even said that we've carved into the wall of stone mountain the confederate generals and leaders, robert e. lee, for example, and who went to dedicate it, the vice president of the united states in 1972, spear roe ago knew went to dedicate the symbols to the confederacy. you can say why were we doing that why were we praising slavery and praising the generals that fought for it. >> david rubenstein, we're loo looking forward to it, pbs. >> the first one on fenway park. >> i have three children and i love them all the same. >> you have eight episodes. >> thank you, david. coming up, how will the fed's effort to cool off the economy impact the retail sector we have some stocks to watch coming up in the next half hour. you can get the best of "squawk box" in our daily podcast. follow squawk pod on your

favorite podcast app and listen ayun yte. yte. st ted at adp, we understand business today looks nothing like it did yesterday. while it's more unpredictable, its possibilities are endless. from paying your people from anywhere to supporting your talent everywhere, we use data driven insights to design hr solutions and services to help businesses of all size work smarter today. so, they can have more success tomorrow. ♪ one thing leads to another ♪

#. blockbuster weekend at the box office, the super mario brothers movie bringing in $146 million in north american ticket sales over three days the animated film is a collaboration between illumination, nintendo and universal, which is owned by our parent company comcast its five-day global total reached $377 million it's the biggest opening weekend ever for an animated title globally a sequel or three or four on this franchise, don't you think? >> depends on what the plot is according to you >> it does there's going to be three more star wars movies i mean, what's that going to be? i thought everything had happened in star wars. coming up, companies looking to set up plants around the nation, the demand is so hot our next guest is turning potential clients away that's next. "squawk box" is coming right back

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welcome back economic development around the ev booming hello again, phil. >> joe, this is one of those interviews you should pay attention to how many of these plants are coming to the u.s.

who's picking these sites. let's bring in dennis. you are at the heart of a lot of the selection sites being made when somebody says we're putting a battery plant or assembly plant for electric vehicles somewhere. >> i've been in the auto city 40 years and i've never seen this kind of investment in the past two years there have been over 20 multi-billion dollar projects announced and there's more coming, especially with the enactment of the inflation reduction act that provides significant incentives. so i think we're going to continue to see more and more investment >> and i don't want to put words

in your mouth but when you and i talked in the past, you said it's running so hot, we can't handle all the business. is that accurate >> that's accurate i work with a company called wallbridge and they've had to turn around significant projects because they don't have the resources to handle it they're as full as they can be >> explain for people just how much money, the ira, the new package, covers in terms of manufacturi manufacturing facilities owe when -- so when a company is building a new site, a lot of this will be covered, right? >> a typical side is a $35 billion production there is a tax credit that provides $35 hour and another

$10. in one year itwill generate $1.5 billion in tax credits so in two years the plant would have been paid for if it runs at only 50% capacity, it will be paid for in four years. >> and the credits are transferable >> the credits are transferable. even if you're not in a tax position, you can get direct pay. you don't have all the requirements and the credit goes right to the manufacturer >> dennis, what's the hottest area right now i spend a lot of time in south carolina i've probably been in south carolina more than i've been in michigan in the last couple of years talking about ev plants

being developed now. >> the top five states michigan, tennessee, kentucky, georgia and here in nevada tesla just announced a $3.5 million expansion of plant here they'll add a hundred giga watts of capacity. but arizona, kansas, texas, south carolina, north carolina so it's being spread across the country. and everybody seems to be getting a piece of it. >> last question, dennis why can't we just retool old plants these epa rules likely announced on wednesday will force them to build plants even faster why can't they take internal

combustion engines and make them ev plants. is it not effective? >> on assembly plants, it's relatively easy done vert and most will be converted it's very difficult to convert a foundry that's building engine blocks or spark plugs. those wouldn't work and you're going to have to do new plants battery plants are different it's going to take new industry. >> dennis cuneo, thank you for joining us guys i've been talking to dennis for 30 years practically 25 years ago it was about developing toyota, where the plants were going, whether it was down in san antonio ant elsewhere and now it's all about

ev it's a hot market, so much that they're running out of prime locations. >> i hear you. that's interesting how quickly, just in general, phil, can everything be ramped up i'm hearing there's going to be sh shortages -- >> we don't have the battery supply as quickly as everyone is expecting, not until late '25/'26. and the supply chains to get all the key ingredients to the bartry manufacturing they're moving but we're in the bottle neck. >> that mercedes in that commercial was $125,000. that's rarefied air, as you said >> next, the fall out from the

banking crisis and we'll get a take on inflation and its effect on the market. mohamed

el-erian moem. good morning we're going to hear from mohamed el-erian just ahead. and tesla shares sliding plus pharma companies are worried after a federal judge makes decision on abortion pill. the final hour of "squawk box" starts right now good morning and welcome back to "squawk box. becky is off today as we were just mentioning, all

quiet on the futures front mostly down about four points the nasdaq is bullish. it has steepened in its losses that we've seen this morning we're kind of in wait and see mode treasuries, a little backup. the two-year is almost back to 4% not quite. and bit coin has a bid, right around 28,000 for most of the three-day weekend, 28,300. i don't know, frank. that was a mealy mouthed answer, they can't say whether you're better or they're better >> everybody doesn't watch at 7 and 8. >> they better it's on them if they don't it's not my problem. >> back at 7, andrew asked was

chat gtp better man me i actually asked and i put it on twitter. >> it was not about -- we had got i don't know into a conversation during the commercial break -- >> i said frank holland right away >> frank holland is irreplaceable. >> i asked chat gtp. they said i have my own skills >> it's impossible to say who is actually better? that's greasing their own -- i figured that from that crummy chat gtp there's no way they're a stupid ai program, frank. you're multi-facetted. >> i try speaking of it, i should get to this part right here possible deal in the oil complex. exxon has held informal talks to

acquire pioneer natural resources and has also held talks with least one other company. exxon down nearly 1% tesla lower following a decision to make shanghai the next location for its mega factory. and the shanghai factory will produce 10,000 mega packs per year, which would supplement production mega packs help stabilize the power grid tesla shares down almost 2% in the premarket. and mcdonald's getting an upgrade to buy, a 13% up side from where it's trading right now. analysts very bullish on the corporate restructuring that was announced last week, including closing offices and laying off

hundreds of workers. and northcoast up 10% in earnings estimates >> thanks. frank collins takes a look at the market with mohamed el-erian great to have you with me. >> thanks for having me. >> how are you thinking about the markets at this part we've got cpi coming up, and we've got a lot of other private data points, earnings reports particularly from the bank what is the most important thing in. >> i think it is all important i think we're trying to reconcile two things one is what's been happening with the fixed income market, which is different what's happening in the equity market and within risk assets, different assets are behaving differently. the next two months will be

really important to reconcile these two things that have to be reconciled >> do you think the bond market is overreactive? >> i think the bond market has been incredibly volatile the two year has been from around 360 all the way back to 4. this is a two-year in is supposed to be anchored by fed expectations so the bond market itself is trying to figure out where to go and we've now discovered what i've feared for a long time, which is that price isn't no longer signals as well as they used to. >> so the recession signals we've gotten maybe overblown because the two-year is indicating speculators are work, there are other forces at work here >> yes

my view is there's no reason we should pull into recession other than getting another fed policy mistake. look at five year jobs report. it has solid employment growth, higher labor force participation. that's good for the demand and supply side of this economy. >> do you think we don't have a recession? >> i think we can avoid a recession. when i heard people from many months ago say it's 100 chance going to recession, not with this labor marketing we are seeing weakening but the most interesting sector to look at is services we've had conflicting data the ism data came down but data on saturday said services p remains the biggest sector of the economy. >> why do you think that the tightening of credit, which seems to be the primary sort of

longer term impact of this credit, why that won't sort of push the economy over in conjunction with the lagged effect of the fed's rate hike? >> the debacle over svp make the recession more likely. if you look at the h-8 data in a came out on friday, we already are picking up a fall in lending, in fact, the buggest fall since 1973. moreover, if you look not at the liability side of the balance sheet, which we've been talking about with david but os the asset side, you'll see there's a real question that as deposits flow out banks, what happens to the assets so, yes, the svc turmoil is

going to factor in >> if recession may be at bay at this point, maybe 4100 isn't outrageous in the s&p. >> i think overall we are fair within that there are some extremes if you look, 20 stocks percent account for over 90% of the gain this years this has been a very concentrated phenomenon this year >> and even more so in technology >> correct because it's viewed as a safe asset and as interest rates have come down, it's got i doten more attractive i think overall the level looks fair >> the unemployment rate, dave ru rubenstein said the fed needs the unemployment rate to be

higher for this to be working for them what do you think is a politic politically palatable number for the fed? >> i hope they would like -- you know my view, andrew we started late. the fed started really late and because of that we've had a very concentrated increase. yes, it looks luike end up targeting a high unemployment rate >> what do you think the number is 3.8, 3.7, 4? >> nobody knows. >> are you of the view whatever banking crisis we're in is not going to help the inflation story, not going to give them cover or help them meaningfully?

three, four weeks ago they said crisis is not baked into the state. this was super held. tole federal reserve >> first of all, we are not in a banking crisis we are nowhere near a banking crisis we've had tremors that have impacted some banks. you need the large banks to be in trouble to be in a banking crisis and the large banks are not going to get in trouble. yes, those tremors have caused the likelihood of credit contraction but it's the worst way do it. who is going to suffer more than medium term temperatures that's who is going to suffer. >> that's the way the fed is deciding to conquer inflation. so their whose message is

bass akwards >> how high can you go quadralemma? >> only you know these big words. >> you said trilemma i can't imagine that we try to figure out oil prices from c crushing demand in the united states.

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the next generation 10g network. only from xfinity. the future starts now. welcome back to "squawk box. senator elizabeth warren and a representative of aoc sent letters to 13,000 banks seeking more information about the size of the deposits, the lengths of the relationship of the banks and whether board members, investors and executives receive special benefits block 5, roadblocks and roku receiving letters. >> i kind of like that >> what? >> i think it's a good idea. i've got to rethink this

the u.s. economy added 236,000 jobs in march while unemployment dropped to 3.5% on the agenda. new reports on consumer prices, senior resource officer of the advisory group and as of this morning where he gets the latest read on all of these things from you, dana, as we always do people trading down? if so what happened to costco? >> a couple of things. first, thanks for having me, joe. yes, we are beginning to see people trade down. you tacke a look at where the traffic is we have pressure and pressure is like you mentioned, inflation, higher cost. we've always heard about the 55, 60% increase in egg prices and heard about the end of snap benefits that's coming and higher interest rates.

in addition to that like what mohamed mentioned, look at the bank prices. you think about costco and what happened there you didn't have warm weather for easter, that is an impact. we're going to need to see costs pick up next month but we're fans of costco, walmart, dollar general and tjx ross and burlington, where people can get good prices and offer convenience. >> you're not a mall walker but you walk malls more than anyone in the world probably, dana. up need to know specifically, maybe costco had inventory issues it doesn't mean there's no ll low-end migration, it means

costco my not have had the inventory. >> it's how many consumers are willing to spend you look at the tax dollar refunds and they're down double digits from last year. we've heard of the high end moderating their spending. jobs went to services, went to restaurants. so you say where people are spending their dollars on. there's a shift. >> and you mentioned the ones you like high end wait and see what do you do there >> i think we're going to get numbers on wednesday louis vuitton and christian dior i think you're still going to see high single digit growth and maybe low double digits. with china reopening, it's encouraging. innovation in products is

driving demand look at the strength of demand they have sephora. that's a benefit to them did you get your invitation? what they call the landmark store is going to be reopening i can't wait to see what that looks like >> i did not >> i didn't either >> i didn't. >> you got to be there >> it's in the mail, maybe in the mail unfortunately we have earnings season will we hear anything meantime because we got a month away for most of these players, right >> you're going to hear what couple things. on wednesday you'll hear from lvmh they're going to give you sephora. and you're going to have the banks like you talked about on friday

all of them are basically going to give the state of the consumer i think in the near term, i think the first challenge was a real challenge for the consumer. companies can call it choppy but it was very volatile inventory levels got cleaned out. you can't cut price anymore. there's more clarity on discretionary side in margins than in sales. i think being back end weighted, it's going to be a moderational year, there should be a higher growth rate from what we've seen in 2023. >> so no recession soft landing, hard landing what do we get >> soft landing. >> soft landing? >> sof landing >> see, didn't have to think didn't couch it in any terms thank you, dana. >> thank you >> i think if anyone is going to know, it would probably be dana in terms of the consumer anyway. coming up on the other side,

pharma companies are getting worried about the fallout for fda approved drugs after a federal drug overturned the approval of a drug for medical abortion and get the best by following our podcast. listen any time. wee we are coming right back

welcome back to "squawk box" this morning the futures in the red across the board. dow off about 128 boards, nasdaq down about 101 points, s&p off by 22 points let's show you some of the biggest dow jones lagards right now. and a federal judge overturning fda approval of a pill used for medication abortion. meg joins us this morning for what this could mean for other fda approved drugs good morning >> reporter: good morning. i was talking with a lot of people about this over the weekend. it appears to mark the first time a drug has overturned the fda approval of a medication executives wrote a letter saying if courts can overturn drug

removal, any medicine is at risk of the same outcome. i was speaking with one of authors of that letter, jeremy levin, he warns unless this can be rolled back, this represents one of the greatest threat to drug approval in the last 50 years. legal experts are pointing to v products like vaccines or contraceptions but the secretary of health and human services says things like the potential new alzheimer's drug could be at risk. the fda says it has appealed guys, who we haven't heard from over the weekend or this morning yet is pharma, the lobbying

group for large pharmaceutical companies. we haven't heard from large companies, it's mainly the small biotechs and that's because it's a very political issue we know they're weighing on how to get involved if they get involved the question is do these large pharmaceutical companies want to get involved guys >> meg, what does this mean also for companies that have various insurance programs for their employees to get access to the stuff. >> well, it's unclear right now. we have two conflicting decisions from two different federal judges as of this moment, the expectation is the fda can't really do anything it waits for more legal clarity. it goes to the supreme court and we'll see how that court d

decides. as for implications for health care coverage and things like that, that will get worked out down the line. >> i didn't look at the ruling it was but is there a safety issue that was cited what was the rationale exactly is it anti-abortion rationale? is that what it is >> it does appear to be an anti-abortion rationale. it's called an issue of safety but experts say that's not legitimate >> on friday earnings season kicks off with reports from some of the biggest banks we'll get you ready next p you re to the challenges of today, when active investing and disciplined risk management

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welcome back to "squawk box" on cnbc. the futures now are down triple digits on the dow and on the nasdaq that happened just in the last couple of moments.

at one point we had the dow and s&p both up with the nasdaq weak on a relative basis. now it's red across the board. >> check out the capital one financial. "the wall street journal" says that walmart is suing the credit giant. >> want to get to the big market events upcoming this week. we get two reads on inflation and the kickoff of earnings season mr. liesman, what should we be anticipating >> so i think there's two things to anticipate in week if i could just add the retail part to the end of the week, which is going to be interesting. so for inflation we're looking for 0.2, a nice number on the headline but unfortunately it's 0.4 on the core. that's supposed to push up the year-over-year rate. the thing that powell is focused most on, which is the core and

probably core housing and it looks like inflation is getting sticky and the retail number is supposed to be down 0.4 and that's going to show the kind of softening in the economy the fed is looking for we're going to book end it, apparently to the consensus, somewhat contradictory data where the market is in the push me-pull you aspect where you had softening in the jobs marked but it remained really strong so echoing that dual message from the report on friday >> i think the market now believes this jay powell is in fact going to raise rates by 25 basis points do you think that's the right decision, wrong decision >> well, i think at least based on the 70ish percent of fed

funds currently in front of two inflation numbers that's what the read is. before the unemployment data was under 50%. so, a, it moves around a lot b, what do i think they should do i think they should stick with rates higher for longer but they should most likely pay close attention to the damage that they are doing to the domestic and pay attention to how other central banks are doing damage to the global economy. i do think that friday's jobs report, and i was here when we brought it out, in my opinion really shouldn't change much the reality is, if anything, i thought it was a builtit easy oe economy, meaning the fed should smile. 236,000 jobs, the lightest sights 2020. the issue will be cpi year-over-year core. we're expecting 5.6.

the problem with that is it was 5.5 last month if we continue to see that particular read holding against the positive month's read. even though ultimately it's probably not the wise move ultimately i think inflationary pressures are going to moderate the same way that the surpluses in california disappeared. that's what's going to happen in my opinion ppi, headline numbers will probably have a minus sign, maybe even minus.02 and all the information from the producer index looks like it's going to moderate misly and let's interest rates -- well, if you look at interest rates in the u.s., versus boone yield, that difference is starting to get narrow i think that's a good sign that

rates have peaked in the rear view meyeror, we've seen the highs. >> that would be something, would be notable steve, do you think that with the s&p? >> well, there's this thing that everybody's talking about, which is how housing folds into the inflation numbers. i think the market, as it should do, is anticipating what's going to happen. we know there's this lag in terms of the cpi picking up housing costs and the general expectation and you saw that, by the way, with that great chart that barry brought to us which basically shows housing costs coming down but in the cpi, it's still going up so there's this anticipation there. and i think that's part of what is adam interest rates right now down ond road and plus there's the die people are doing

you saw that in a quote i brought you earlier if y'all were awake at the 6 a.m. hour, viewer what he says is say good-bye to 200. we go 150, and he think it's negative by the summer i think there's a lot of doom sayers out there and not a lot of soothe savers meaning it. >> all right let's bring in the former cea chairman and distinguished visiting fellow and wendy eddelberg, director of the hamilton project i can almost be half full about this, wendy. we want the labor market to eventually show signs of weakening in terms of wage gains but it's held up pretty well in

the face of 475 basis points would be nice if we had a fairly strong economy after all these increase and still got inflation under control, hence maybe have a soft landing >> i learned on friday that the labor market is slowing but slowly the pace of job gains in the past past three months is slowing and taking the population, by my estimate the size of the labor force is about a million smaller than it would have been absent the pandemic and reduced immigration. some people have said that it's fully recovered but i think they're getting misled by some complicated data revisions so the silver lining here in my

mind is that jobs have to slow and unflainflation and ithey ca come down together >> i think about the debt ceiling and the 2 trillion and i start worrying again long term >> i thought wendy's numbers were interesting and right on. there are a lot of cycles where the job market lags everything else, and wages lag and employment lags. i think there are signs where this is maybe going to be the lag from the separation of jobs number we see in real activity is the largest you can sort of see that in the fact that hours are really going down and productivity is presumably going down a lot. so the first thing is that i think that we are making progress on activity you can see that in the goods

producing sector and some progress on inflagstion and stee mentioned he's really looking forward to the retail sales number, i kind of agree with him that looking at the real output and real purchases is probably going to be real interesting from the jobs numbers because they're so different from the past >> if they both write about the yield cover is where it's post to be, should the fed keep going? if they're not going to able to budge rates, why keep going through it to show psychological reasons, fighting inflation and show staying the course >> i actually disagree that interest rates have peaked and i could be an outlier. we were in the forest and then we had the bank panic.

the liquidity in the end is a positive for inflation and the bank panicky think in a few weeks everybody is going to decide that that's gone and i think that means yields needs to go back up to where they were before panic began >> wendy, do you think they should go another 25 and do you think that won't be the last or do you think that's the last i think the fed needs to keep going until it sees in the published inflation data some good news. some good news like we saw in the fall then we got head faked and the last few months have gone in the wrong direction. i agree with kevin the retail sales released at the end of the week is super important. i think one of the defining factors of the economy is the strength of consumer spending. consumers were spending like there was no pandemic and we

don't have a labor market like there was no pandemic. so something has to give i am surprised we are still spending on goods. how can we still have room for all this stuff that we're purchasing but the retail sales will tell us whether or not consumers are. >> it seems like when the uncharted territory we find ourselves in, but there's so many conflicted forces but it's all because of the pandemic. we got all the stimulus and then there's all the people with pent-up demand that want to travel everything that is reallied to what happened, if it only happened a hundred year ago is the last time. it seems like all these cross currents tore us trying to figure out the effects of the

pie chain, the pandemic. >> and throw in the commercial real estate sectors. all of the numbers in the economy right now seem totally outsized and so we still have another shoe to drop with what's happening with commercial real estate >> kevin, am i right this is sort of unchartered. >> i don't know in the 20 years i've been on your show how many times i've said you're right but you're right i think consumers are about to hit the wall maybe it's extreme but if you look at the covid savings, it looks like they're about on. if you look at credit card debt, it's gone up a lot if you look at interest rate, they're up a lot i think the consumer is kind of running out of money and that we're going to start to see it in the retail sales numbers and then output is going to end up i

think contracting some, at least we'll have a quarter or two in the second half of the year with negative output growth i do think consumers are out of ammo i'd still do quarter points until i saw positive inflation news >> is anything else going to break, wendy we fixed it. anything else going to break if we keep going 25 every couple months >> most of that was anticipated. one of the reasons the fed increases interest rates is to lower value on assets of bank balance sheets where they have lower interest rates on them i think the worry about something breaking is when we see the economy slow but inflation not come down with it.

i think that's when it's a fire-alarm fire, that's when it's nerve-racking but so far, that's not the story here we still see too strong of an economy that something like out of control inflation expectations are the problem it just looks like this is run of the mill, hot economy working its way through. >> the banking crisis is over, devon? >> i feel like they've thrown so much liquidity at the banks that people kind of figured out that they're going to come in and so therefore the panic is over. yeah, i think it is. we're set for recovery >> it seems like it should be to some degree, but i still wonder whether this is our bear stearns

moment or something else i don't know if it has to be explicit if you were to have several banks go at one time, i think it would be a genuine problem and then we need a conversation debating congress about raising the limits, what kinds of other insurance programs banks should or should not be anticipated that's why i'm not sure in is over, over >> you're you're right we have this, you're in the intensive care unit, that the fed can't let that die when people think about that, they might get nervous again i think there are a lot of differences that made them a lot different than different banks

>> all right, kevin hassett, thank you. and thanks for coming on "squawk box. we'll see you again hopefully. >> coming up, jim cramer's first take >> and "squawk box" will be right back

york stock exchange where jim cramer joins us now. haven't had an opportunity to talk to you about the jobs number on friday and what you think this portends for the federal reserve and how we will see earnings start up on this coming friday. >> well, i think that we might see expectations lowered but i do think one of the things is we can't lose sight of the fact that the job market and employment figures may be skewed first two weeks pretty good. we knew that the economy had not slowed down. but i'm looking at commercial lending numbers that came out for the last two weeks of march, down 105 billion it's the worst that it's ever been or you can say the fewest loans since the federal reserve started keeping these numbers. so i don't know, i have to tell you, andrew, i think that there's a real slowdown in the

second half of march and that's when they seemed to have missed the mark they're acting as if this mini crisis hasn't occurred i think that the mini crisis you in the barry camp then >> no. barry is negative on a lot of different asset classes. i'm not. i think when you look at first republic canceling its preferred and thinking there's no reason they can't -- that's not going to take -- they need a lot of cash they need depositors i don't know what they're doing. i don't know where the loan -- the commercial bank deposits are down by $64 billion. who would keep their money in a bank where you're just insured to $250,000?

i think the last two weeks were bad in the country, just bad the federal reserve has to be mindful of that. they don't have up to date data. i think it's important, andrew. >> you mentioned the regional banks. we'll start hearing from the bigger banks at the end of the week when you think of the deposit numbers we'll hear, are we going to be happy with the numbers what are you anticipating? >> i think wells fargo saw an initial uptick i think jpmorgan sees money all the time it makes no sense to keep your money in the bank. t bills are fantastic here that takes money out of what you were hoping the banks would have to lend. i don't know, andrew i'm concerned, but not in a negative way i'm concerned the fed may be not

as close to what's really happening. i think jay powell will be loretta, she may be ill advised in what she's talking about. >> jim cramer, never one to hold back thanks to you. looking forward to seeing you on "squawk on the street."

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retail banking in california by j.d. power. before the opening bell in just a half hour. nasdaq down by about 98 points joining us is the chief market strategist at the carson group we had the jobs report on friday this morning we're seeing technology weaken, apple, some of the high flyer semi names what are you making of the markets here >> thanks for having me. good morning it's interesting you had great discussions this morning. one of the thing we heard so much is breath is weak something really interesting that just happened we saw more than 93% of all stocks above their ten-day moving average

that's a breath thrust when we looked at that, it tends to resolve higher. here's the important thing a year later, s&p has been higher 23 out of 24 times. we're aware of the concerns out there with overall market, this rally since the october lows, we're still in that camp. >> seems like a short-term indicators you're using a ten-day moving average. when you take that 93% number and overlay how many stocks of are above their 100-day, how does that lineup in the technical analysis >> most of the time when that trigger happens, most are beneath it it tends to happen after sell-offs. we're in a four-year presidential cycle last quarter was the strongest quarter, up about 7% for stocks.

the fourth quarter was one of the strongest. this quarter is also strong. we're in a bullish seasonal timeframe. again, what's going to happen this earning season? we've had a weak dollar. again, we're optimistic that we can have a soft landing, maybe avoid a recession. we understand the things happening, but the market is telling us something different the stock market leads the economy. >> finish out the data point for us, ryan 93% above the ten-day moving average. most of the time a year later stocks are higher. what is the average gain in a year >> right about 18.5% higher 23 out of 24 times. it's something we can't ignore ignore it's a buying thrust it's something we don't want to

ignore. >> if you take at look at the other asset classes, maybe the bond market, what concerns you about that one indicator not proving to be true over time >> i mean, well the bond market, we've all seen it for about a year, this inverted yield curve. inflation, a lot of inflation data coming out this week. if inflation stays high, that could be a concern we think the fed has one more rate hike and then they'll take their foot off the pedal we're optimistic we'll get positive inflation data this week that says the fed can stop hiking when the fed stops hiking, since 1980, a year later the s&p is higher 12% on average. there have been some big drops, but that's not necessarily a major risk off side when the fed stops hiking >> what looks best at this

point? >> we're sticking with the cyclical value names we're more neutral on tech again, we think the cyclical value names can do well, as the economy probably surprises the second half of the year to the upside. >> ryan, thank you. let's get a final check on markets. i don't know >> people are coming back. >> i had to get the motor going a little bit 70% now. they're going again. >> yeah. >> do the marks. we had one guest say they want to do that they want to lower the value of some of the assets that these guys could buy forever.

>> right >> if you -- you can't go long it's not going to be at zero forever. you go 10, 20, rates go up that's where we are. you here tomorrow? >> yep >> see you tomorrow. >> look at the smile on her face so happy to be here. >> join us tomorrow. "squawk on the street" is next good monday morning. welcome to "squawk on the street." premarket a little soggy here even with yields lower the jobs number under our belt we'll get inflation data we begin with the macro backdrop stocks and investors looking at the jobs numbers exxon eyeing thi