good monday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with sara eisen. setting the agenda today, the bets that another rate hike is ahead continue to rise following the jobs number on friday. will this week's inflation data keep the hawkish narrative alive? we'll talk to pimco's head u.s. economist. tesla cuts prices once again as the stock continues to fall and its market share starts to shrink former ford ceo mark fields on whether tesla still thinks it's

the ev market benchmark. and ian bremmer, how china is continuing to try to win the world over from saudi arabia, south america and, of course, coming on the heels of macron's visit to beijing >> a lot of chatter about the geopolitical events over the weekend. the dow is doing the best of the three major averages, down only 43 thanks to strength in groups like materials and industrials and energy at the top of the market today. along with financials, which did just go positive the s&p is down 0.60, being weighed down by tech, communication services and consumer discretionary with the nasdaq down about 1% >> getting some fresh research from the new york fed, let's get to steve liesman with that steve? >> carl, good morning. the fed new york survey of consumer expectations showing a surprising increase in one-year inflation expectations something to watch closely by the federal reserve. up half a point to 4.7%. we have been coming down for about five straight months now, it's a little better when

you look a little further out. to be fair, the fed looks a little more time periods where the three-year expectations was up 0.1 to 2.8% and the five-year decline 0.1% to 2.5% but that one-year of surprising increase now, what's even more surprising is when they asked about specifics, the survey respondents saw inflation expectations declining for gas, food, medical care and rent. though college costs were seeing rising apparently they saw other costs going up earnings growth expectations, unchange add the 3%. that will be good for what the fed wants to see the perceived probability of losing your job, down 0.4% more indications in that part of the survey that the job market remains tight. >> interesting right now, steve, how would you rate where inflation expectations sentiment ranks on the fed's list of inputs right

now? versus looking at all things hard data and soft it's pretty high that's the one reason -- the main reason they keep saying they need to keep hiking is because they don't want inflation expectations to get out of control if the idea was that we would have an inflation bout for a while and we could see it through and not do anything because things would come down, the if ed would be fine with that but their concern is that you start to ingrain these expectations, carl, into wage negotiations, into buying patterns right now that could create a longer term inflation problem. that's why they feel like they want to keep going if they're -- if they feel they can keep going relative to what's happening in the banking sector and the economy overall. >> meanwhile, more near term all eyes are turning to cpi later in the week. we've had some discussion about what energy prices have done lately in the last couple of weeks. although we talked to jim this morning about mannheim used cars, which has ticked up the last couple of months. we finally got it down,

month-on-month number. >> there's a lot of moving parts in this, as you might imagine. the energy prices are one thing. the used cars, they had been helping out. now they're not helping anymore. we're looking for a headline that goes down that's going to be the good news perhaps by energy, a little help from food there. but it's the core is forecast to keep going up. you did have good stuff in the jobs report when it came to inflation. you had wages being relatively modest in terms of increase and more people in the workforce i'm actually looking to the retail sales report on friday in addition to the inflation report for a better read on the economy. i want to know how the consumer ended up and is beginning the first quarter -- i'm sorry, the second quarter this year, carl looks like some weakness is expected. >> beyond those inflation expectations that you just mentioned, steve, from the new york fed, there's a headline that the new york fed is also saying perceptions of credit access fell from a year earlier.

i do wonder if that's more key as they weigh some of the risk factor beyond just inflation expectations given what the banks are doing or not doing >> it's definitely going to be something they weigh, sara, but i'm taken by something that bullard told reporters last week in one of the get-togethers he does from time to time he noted that banks only account for 20% of intermediation in the economy and the regional and midsize banks, some fraction of that his point of view is that he does not expect a massive economic effect from credit contraction at the banks maybe the private sector does this, too, but you would expect, sara, consumers to be saying they're having trouble or having more difficulty finding credit now because what we've seen for several months, even before silicon valley bank came along, sara, was that banks were tightening credit. we're all looking to this may report on the senior loan officer survey that's going to

tell us how much more they tightened since silicon valley bank. >> it's going to be very juicy thank you, steve steve liesman, appreciate it. joining us to discuss pimco north american economist tiffany wildening. how do you think the fed is going to take all the data and news we've gotten so far and what do you think they're going to do in may >> well, i think what they're trying to do right now is just weigh the elevated inflation risks against the financial stability risks you talked about. i think one of the issues is obviously these things are not mutually exclusive it does look like financial stability risks have been somewhat stemmed as a result of the new lending facilities that the fed has put in place, which has kind of created -- as increased confidence in the banking sector nevertheless, banks are going to respond to this as you guys have been discussing by probably reducing the flow of credit. you know, it's really the flow of credit here, not the stock

about of outstanding you don't need a deleveraging episode to get a recession obviously, slower credit growth will ultimately eventually put downward pressure on inflation i think it's just a matter of time here before inflation comes down of course, inflation lags. so, for right now, you know, probably does look like they're going to get one more hike in before they really start to see the effects of this banking sector stress. >> so, what are recession odds at pimco stand given these changing factors >> yeah, we've been in the camp recession is more likely than not this year. we've looked at over 14 developed markets over the past 70 years what happens to economies when central banks start hiking six to eight quarters after a central bank starts hiking interest rates, you see more deterioration in the economy really, although that analysis didn't forecast these specific banking stresses, the timing's kind of lining up with that.

i think it's overall just reflective of the fact financial conditions are very tight. these things happen with a lag ultimately the speed at which the fed has moved over the last year probably will, you know, bring the economy down into a recession, somewhat modest one. >> kansas city fed had a great paper last week looking at why it's taking so long for monetary policy to have transmission methods that are effective with services being such a big force of inflation on the labor front and pricing front, those are things that are not usually financed i mean, how is the fed, you think, thinking about the fact that we are trying to solve one problem, but we're making things very tough on specific corners of the economy in the meantime >> yeah. i mean, obviously, the federal reserve when they increase interest rates doesn't affect everything all at once and at the same time. you start to see that in the interest rate sensitive sectors, obviously housing in a deep

contraction over the course of last year. that eventually will spill into services the tech sector layoffs that have been very -- a lot of people have been focusing on, we actually think those start to show up in the government data in april you know, as a result of these worn notices that would suggest when they're going to show up. as that trickles down into less spending on services, that would also weaken labor markets for those leisure, hospitality, travel service sectors as well all of this stuff just happens it just takes some time, happens with a lag federal reserve has to understand that when hiking interest rates >> yeah. >> you mention the way layoffs have taken place, to some degree the high end of end tech and the notion of severance echo meaning there's a period where you might be out of work but you still have a nice check with which to spend. do you think that's a part of what we're seeing? >> yeah.

i think certainly that's part of it you know, these larger companies are required to, you know, to announce what they call warn notices. they have to warn their employees. they have to post those with their local government officials. you can actually get that data and it does suggest the effective dates for when these employees are no longer working for these big firms was actually maybe the end of march or around that time, which would get picked up starting in april. i think there's lags to these things you're starting to see it more in the claims data after the revisions. that is completely consistent, i think, with the timing here. i think we are in the midst of a deceleration in economic growth. i think you'll probably see it in the retail sales data that's going to be released later this week as well there is leading indicators of that suggests that, you know, spending actually really deteriorated in march. we are in the midst of a deceleration, i think. >> so, adding all of this up, tiffany, is pimco still adding bonds at these prices?

is that still the right way to go to play the weaker economy and more troubling indications >> yeah, absolutely. we think ultimately these banking stresses obviously increase the probability of recession pulled it forward. ultimately high-quality bonds, you know, do provide diversification benefit to a broader portfolio. when you have elevated inflation -- excuse me, elevated recession risks. we think those quality bonds will come back and the great thing is they're elevated starting yields as a result of what central banks have done we definitely think bonds are back and they should be part of an investor's portfolio even though things sold off together last year, including bonds and equities we think diversification benefits are coming back this year. >> thank you for joining us, pimco's north american economist. appreciate it. >> thanks. meantime, tesla cutting prices for the fifth time this year in the united states. sending that stock lower

the fifth straight day now, off 15% for the month. it's about a three-week low. can the company continue to hold its crown as ev leader as some share slips. we'll talk to former ford chief mark fields when "squawk on the nus." ntueinwo mite or moments that matter, but you can invest in them. at t. rowe price our strategic investing approach can help you build the future you imagine. t. rowe price, invest with confidence. i think i'm ready for this. heck ya! with e*trade you're ready for anything. marriage. kids. college. kids moving back in after college. ♪ here's to getting financially ready for anything! and here's to being single and ready to mingle. who's ready to cha-cha?!

everything's changing so quickly. before the xfinity 10g network, we didn't have internet that let us play all at once. every device? in every room? why are you up here? when i was your age, we couldn't stream a movie when the power went out. you're only a year older than me.

you have no idea how good you've got it. huh? what a time to be alive. introducing the next generation 10g network. only from xfinity. the future starts now. welcome back tesla shares down 15% for the month after announcing price cuts again in the united states. while the company's shares of ev sales continues to dominate at more than 60%, that number has

come down from more than 70% just a year ago. is the company losing that ev edge here to discuss today, former ford chief ceo, cnbc contributor and senior adviser to tpg, mark fields mark, great to have you. this was interesting the second time, the third time, now five times what is the calculus here. what are they thinking >> well, i think overall, as you mentioned, carl, this is about the fifth time they've cut prices and the second time they've caught broad base across the product lineup i think overall this is -- musk has said he is willing to sacrifice margins to keep the growth rate going. if you think about the growth, their first quarter sales and deliveries, they grew about 36%, which was down from the 40% growth they had last year full year, which is down from their goal of growing 50% each year. so, i think overall they're looking at demand. they have a better gross margin

than some of the established automakers and i think musk is saying, listen, i'll put the squeeze on them i'll grow my overall share and that will have benefits down the road from brand loyalty, parts and service, et cetera, but i think that's the calculus he and tesla are taking. >> a lot of analysis of the cost structure. we already understand and the advantage they have from a margin standpoint. how do others react? can they afford to follow these? >> i think what you're seeing. some of the established automakers did follow some of the price cuts i think ford did, but folks like vw and kia, hyundai, did not they're a bit in a bind in their first-generation products. the margins aren't very good probably most are negative a lot are working on, you know, next generation platforms and next generation products for example, ford is building a brand-new facility in tennessee. they say that's going to allow them to cut their manufacturing

and engineering costs significantly and the piece cost so, i think you'll see this play out over time. for the time being, tesla does have a major advantage with the margins they have versus the established auto makers. and even the startups who are, i think, in really difficult times over the next 12 to 24 months. >> and that's to justify the valuation, mark? that's always the question on tesla, right they have to dominate this market, don't they >> yeah. i mean, listen, sara, by any kind of established measure of how you value a company, it doesn't make sense but i think a lot of retail investors are betting on this growth long term if you think about it, their price earnings ratio is the beginning of the year was 20 now it's about 45. and, again, if you use established measures, tesla would literally have to garner the lion's share of ev profits in the industry, much like apple does in the cell phone arena

and that's a big stretch but i think right now investors are betting on that, but you're seeing the stock react over the last couple of days because of these successive price cuts, which may put in their mind, hey, is tesla turning into just another automaker with a lot of these price cuts >> finally, the mega pack factory, explain why that's important. what's the fallout from this >> well, it's interesting. the mega pack, they're going to build cells for great scale energy storage it's a much smaller type of market than building braatteries for evs. i think this is a strategic move by tesla, not only to fulfill musk's ambition of getting the world to be carbon neutral, but if you think about the geopolitics right now and the trade tensions and geopolitical tensions between china and the u.s., i think by tesla making this investment, another one, in a strategic industry in china

will insulate them to some degree or another if, in fact, there's any kind of trade sanctions that china places on u.s. companies if the u.s. government starts, you know -- continues to put some sanctions and some trade barriers in there. so, i think this is a little bit of an insurance policy for them. also at the same time, a market that's small or could grow significantly. >> it's interesting. you frame it positively because, you know, it also opens him up to some of the political attacks that he's serving at the will of the chinese government and the communist party and xi jinping and puts him in sort of a tricky position ass some of these other americans are when it comes to investing in china, the chinese market and at the same time being an american company and standing up to american values. >> as you said, sara, it's a very fine line in the u.s., you know, it could be hit for, you know, trying to -- again, to continue to invest in china, of which there's issues around that from u.s. government perspective.

but at the end of the day, you know, any ceo has to do what's right for their business, right, which means running a good, profitable business, investing and growing markets and managing the geopolitical currents as best they can. it falls into the category, you can't please everyone, but at the end of the day, elon has to please his investors and keep growing that business from a volume and profitability standpoint. >> pretty fascinating how this thing is evolving, even with all the crosswinds, the policy and so forth, costs. mark, we'll stay in touch. thanks very much today mark fields. >> thanks, guys. speaking of that very point, china conducting its second straight day of military drills around taiwan. this as the country continues to host foreign leaders we're talking china hosting france, saudi arabia, iran eurasia group's ian bremmer with us take a look at the dow in the meantime it's just gone positive. it is up one point s&p and the nasdaq still under

pressure it's caterpillar adding the most to it the dow, adding 38 points by himself home depot, goldmasas ntbungo the game stay with us (cecily) you're looking pleased with yourself. (seth) not to brag, but i just switched to verizon. (cecily) so you got an awesome network... (seth) and when i switched, i got to choose the phone i wanted. for free. not bragging. (cecily) you're bragging. (neighbor) oh, he's bragging. (seth) who, me? never. oh, excuse me. hello, your royal highness, sir... (cecily) okay, that's a brag. (seth) hey, mom. i gotta call you back. (vo) switch and choose the phone you want, like the incredible iphone 14, on us. (cecily) on the network worth bragging about. (vo) verizon power e*trade's award-winning trading app makes trading easier. with its customizable options chain,

easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back. we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i

can't believe they're just sitting up there! sitting on all this cash. if you own a life insurance policy of $100,000 or more, you can sell all or part of it to coventry. even a term policy. for cash, or a combination of cash and coverage, with no future premiums. someone needs to tell them, that they're sitting on a goldmine, and you have no idea! hey, guys! you're sitting on a goldmine! come on, guys! do you hear that? i don't hear anything anymore. find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

some trust in the banking sector goldman sachs takes a look at google searches finding a massive drop in activity related to regional banks as well as big drops in searches about bank withdrawals and the safety of deposits it comes as the fed starts to see commercial bank deposits stabilize, reporting a rise in total deposits on friday for the first time since the beginning of march i thought that was interesting but as we just heard from steve, this new york fed line about perceived credit availability shrinking a bit, right better access to credit in the new york fed report. >> right now we wonder what is going to be the impact on lending good to see deposits are stabilizing and people are freaking out less about getting their money out of regional banks, if that is what is

happening by these trends. the bottom line is we also learn about the same report on deposits that it was the sharpest ever pullback in lending for commercial banks in those two weeks that ended march, $105 billion, and half of that was from small banks. just not lending as much to multifamily construction and to corporates of any time so, that is really the impact and the problem that ultimately that's going to be for earnings, which is why you're not seeing that big confidence boost in bank shares. >> not today the attention on these conference calls on friday are going to be really fascinating dow is down only about 13 points pretty much highs of the session. let's get a news update with frank holland. louisville authorities are investigating this morning's shooting as a workplace violent situation. the suspect is dead and believed to have been an employee who may have suffered from mental health issues the confidential settlement has been reached in a venezuelan

businessman's defamation case against fox news and lou dobbs the settlement comes just days before jury selection begins for the closely watched dominion voting system's defamation suit against fox news network. jon rahm has a green jacket after winning the masters on sunday it began with him trailing by four and ended with a victory over brooks koepka and phil mickelson by four strokes. the win marks the fourth year -- the fourth on the year for the spanish golfer and allowed rahm to reclaim his number one world ranking. i have to say disappointed not to see tiger finished, though. back over to you. >> there was disappointment in my household, too. thank you. up next, china welcoming french president macron as tensions build with taiwan, continuing military drills in the region macron making some comments, raising heyebrows across the u.. we'll discuss this with ian bremmer next stay with us

[office sounds] ♪upbeat music♪ ♪♪ ♪when the day that lies ahead of me♪ ♪♪ ♪seems impossible to face♪ ♪a lovely day (lovely day)♪ ♪(lovely day) (lovely day)♪ ♪(lovely day)♪ a bank that knows your business grows your business.

bmo. what if buildings could tell you how they could be more efficient? i'm listening. well, with ibm, you can use software to help you connect and analyze data— from hvacs to elevators to lights. what if we use ai-driven insights to pinpoint inefficiency? yep. and act on it. saving energy, money... ... and emissions. yup. that's a big one. now you've built something better for everyone. that's the sustainability solution ibm and a global real estate company created. what will you create? ibm. let's create. our customers don't do what they do for likes or followers. their path isn't for the casually curious. and that's what makes it matter the most when they find it. the exact thing that can change the world. some say it's what they were born to do... it's what they live to do... trinet serves small and medium sized businesses... so they can do more of what matters. benefits. payroll. compliance.

trinet. people matter. a couple hours into trading. dow has shaved some losses let's get post to post with bob pisani. >> we're off the lows of the s&p 500. first republic late friday cut their dividend on their preferred stock. you're going to hear a lot about loan books with the banks coming in remember, this is a company that had a lot of mortgages on its

books. so, when interest rates go up, the value of that loan book goes down you're going to hear a lot about loan book value in the next few days but look what's going on here with the big regional banks. comerica last week they were drifting lower. it was 45 to $40 it went down to now it's bouncing back volume is much, much lighter we were doing millions of shares a day last week. it's calmed down and back to middle of its trading range. that's a good sign you want quiet with regional banks. meantime, another important bounce, caterpillar, sort of a proxy for global growth. this fell apart last week. it was $230, went to $209 and that was a big concern for the marketover all the volume is much lower here. we were doing 4 million shares, north of 4 million shares a day in caterpillar last week again, much calmer price bounce and volume much, much lower here elsewhere, remember this huge rally that we had in defensive names, procter & gamble, johnson

& johnson, coke, proctor down a little bit 140, went to 152 in 2 1/2 weeks or so and it's down about 1.5% today. again, a much lower volume here. the rally in defensives, at least for the moment, over tech is a little bit mixed with apple weighing on the overall market nice bounce, that's the key story, in the cyclical names, in industrials and materials with some modest bounce in the regional banks guys, sara, back to you. >> treasury yields are off a bit and the dollar is stronger a little reversal of all those trends thank you, bob. time to go global. as tensions rise with the u.s. over taiwan, china is courting the rest of the world, inviting french president macron, hosting foreign ministers of saudi arabia and iran child china performs three days of exercise drills around taiwan here to discuss eurasia group

president, ian bremmer what do investors need to know with the events this weekend in china? >> they need to know the news dominating the u.s. headlines, which is the mccarthy and congressional meeting with taiwan's president in california was probably the least important diplomatic news coming out of china over the past week as you've mentioned, it's the saudi and iranian foreign ministers now meeting together for the first time in beijing. it's the former taiwanese president finishing off a two-week trip to china the first time since the civil war ended in 1949 that any sitting or former taiwanese leader has visited the mainland. of course, it's the french president as well as ursula vo vondertraveling to china and the president saying on the back of that that the europeans need to diminish their dependence on the united states, saying no such thing about china, while of course, france, wants to do a lot more business there. really, a lot of news coming out

of china niece days. and not necessarily what's being picked up or driving headlines in the u.s >> and you're suggesting good news for china net-net >> well, sure. china has all sorts of domestic, demographic and economic challenges, but from a diplomatic perspective, xi jinping is leaning into global influence and he's fining a lot of people that are very willing to take him up on it that's not in trump's america first land this is with biden as the u.s. president. not a lot of people were expecting that certainly not inside the administration that's what's happening now. >> a lot of people -- politically, a lot of the opponents, the republicans are blaming joue ing biden for thisg he's losing the narrative, losing control on the u.s. stage, losing the dollar in the reserve currency because of everything happening here? >> he's not losing any influence of the u.s. dollar in reserve

currency >> i agree. >> that's exactly where it was ten years ago. there's nothing there. and cnbc knows that very well. but more broadly, it is true that the u.s. has a lot less influence in the middle east today than it did five years ago, ten years ago some of that is the biden administration having a really challenged set of relations with, for example, the saudis, with the emirates. some is the u.s. under trump unilaterally pulling out of the jcpoa, but the chinese see a vacuum, they're leaning in the relationship with france, frankly, is probably the least trusted of the u.s. relations with g7 allies and the way the submarine deal was mishandled by the u.s. diplomatically probably didn't do any favors for that relationship. >> it's been interesting to watch it erode, the relationship regarding the inflation reduction action and now this idea -- i guess, i mean, is it

really -- is it part parcel of our relationship with france over time or is any of this related to the pressure macron is under back home? >> oh, there's surely the fact that macron feels like a lot of things he's tried has failed macron was the one leader going out, meeting with putin when other leaders refused to it got nowhere but he gave it a shot. he wanted to be the guy that was making that deal happen. he recently made a trip to africa it was a disaster for him. you know, it was back home reported very badly and, of course, you've got all of these demonstrations, significant and significantly violent, even in the context of what france routinely experiences. so, he clearly is frustrated at home but he still sees himself as the leader of europe and the fact he made this trip to china, and i'm told the

chinese government treated him very well, it would have been one of the more successful trips macron had had if he had just stayed quiet about himself, but he couldn't help himself and the statements he made about it showed backlash, especially in the united states, but with other g7 capitals around the world. my inbox over the weekend was blowing up with other diplomats. >> yeah, as those comments were made on the plane back home. as for ukraine, these leaked pentagon docs are pretty interesting. the take this morning, ian, is they show how vulnerable ukraine's air defenses are have you been surprised there hasn't been more of a spring showdown the way we thought there might be earlier in the year >> so, the air defense issue is one the americans have known about for at least six weeks now. that's certainly when i first heard about it and it has been redressed. it is being redressed. the leak, as much as it's

embarrassing, it's also old. again, if you hadn't provided that air defense capability, the russians would be able to start using their 700 bomber jets against ukraine, as they have in the first couple weeks of the war. it would have been devastating for ukraine. senior american officials i talk to are less worried about that today than they were four weeks ago, eight weeks ago the challenge, of course, is whenever you have this kind of leak, you know, you're talking about sensitive intelligence collection that undermines america's ability to continue doing that and also undermines some of the trusted relations that the u.s. has with some of its allies. so, of course, nobody's happy to see this happen. >> the i'm just trying to process everything you know, you're highlighting. it's clearly important a lot of the research notes from wall street mentioned all of the tensions flaring from china over the weekend. but for an investor audience watching and trying to figure

out where all of this is going, what are we heading towards with china, what sort of confrontation, what does this look like as you piece all of these threads together that you say are very important >> probably the single biggest investor takeaway is that on the technology side, increasingly broadly defined, there is real confrontation between the united states and china and that allies are increasingly being forced to pick a side. that obviously will freeze a lot of global efficiency it will challenge a lot of chinese corporations from being able to be effective and world leaders in their space, at least until the chinese government's ability to catch up. and it also will challenge a lot of american corporations that was planning as having china as a significant market for them. when we think about data and technology as the 21st century economy, the fact you're seeing that level unwind between the two largest economies in the

world, and nowhere are we seeing a climbdown in that level of tension. it's only continuing i think that's probably the biggest problem. >> yeah. i mean, it's just so strange on a weekend where musk is building this factory in china and and a lot -- he's not alone. a lot of companies are doubling down ian, appreciate it we'll continue the conversation, no doubt coming up after the break, the number one technical strategist on the street says improving fundamentals in health care make it an attractive time to make exposure we'll break down charts. and we're watching micron get a big boost after samsung said it would finally start cutting memory chip output bcomabt atn more outh o cn.c g we can all agree on. the promise of our constitution and the hope that liberty and justice is for all people. but here's the truth. attacks on our constitutional rights, yours and mine are greater than they've ever been.

the right for all to vote. reproductive rights. the rights of immigrant families. the right to equal justice for black, brown and lgbtq+ folks. the time to act to protect our rights is now. that's why i'm hoping you'll join me today in supporting the american civil liberties union. it's easy to make a difference. just call or go online now and become an aclu guardian of liberty. all it takes is just $19 a month. only $0.63 a day. your monthly support will make you part of the movement to protect the rights of all people, including the fundamental right to vote. states are passing laws that would suppress the right to vote. we are going backwards. but the aclu can't do this important work without the support of people like you. you can help ensure liberty and justice for all and make sure that every vote is counted. so please call the aclu now or go to my aclu.org and join us.

when you use your credit card, you'll receive this special we the people t-shirt and much more. to show you're a part of the movement to protect the rights guaranteed to all of us by the us constitution. we protect everyone's rights, the freedom of religion, the freedom of expression, racial justice, lgbtq rights, the rights of the disabled. we are here for everyone. it is more important than ever to take a stand. so please join us today. because we the people means all the people, including you. so call now or go online to my aclu.org to become a guardian of liberty.

despite these macro headwind, the banking crisis, the potential for even more rate hikes the s&p is holding but its 50 and 200-day moving average. our next guest sees pockets of strength forming in a few sectors. joining us, jeff de graaf. thank you for the time today >> thanks, carl. >> when you think about trying to hold this thing under water, before 4k, it's like trying to put a beach ball under water what charts lead you to that >> well, you know, there's several macro factors that are more favorable than not. one is very simply, we've seen a decline in the ten-year yield.

and while that's not the most important factor, certainly that relationship helps it's buoyed -- it's buoyed by lower nominal yields the most impressive with all the concern around concession, with all the concern around a slowing economy, we're seeing that the bbb spreads have been able to continue their downward assent they have not been rising as you would expect in an environment where we're going head-long into a recession. and i think that's good news now, they're elevated from where they were at the end of 2021, no doubt about that but, you know, in terms of just like you said, having a banking crisis, having the consensus believe it's just a matter of time before recession, having an inverted yield curve, all these things and the market has just been absolutely resilient. and i think people aren't listening closely enough to the message of that market >> what's special about health care right now >> well, you know, it's

interesting because health care doesn't look great but there are pockets that look more interesting than not and where you usually expect health care to start doing well is when we're going into recession or a slowdown. they have predictable earnings, et cetera. what's happening today, it's not pharma driving it, which would be exhibit a from a defensive standpoint, it's the health care equipment names. they are sensitive to the dollar, so as the dollar weakens, these tend to be better from a cyclical standpoint even within the health care sector, they're starting to break out the relative performances following. they look great. names like stryker, like boston scientific, these are good looking, long-term charts that have been under water for about 18 months and are starting to turn what's i'm most encouraged about is they have more of a discretionary spend, more of a cyclicality within health care and i think that's an important message of this market >> what about the relationship between stocks and bonds

for a while, lower yields were good for stocks heading into the year, right? last week bad news on the economy kind of became bad news for stocks and lower yields did not cheer up equity investors. is that changing >> well, you're right, sara. we saw some weakness in particularly the industrial names. the industrials had been one of the leadership groups in the last nine months we have been committed to industrials. they're generally a good group to own this stage of the cycle they look to us to be more corrective in an uptrend as i take it back to those bbb spreads, i'm less worried about the weakness there i think they were overextended and just due for a pause or consolidation or raising some doubt. what we see out of those bbb spreads is inconsistent with that weakness we're seeing out of industrials so, we would look towards the credit markets to say, hey, the credit markets aren't seeing this so we're going to view this as a correction in the ongoing trend for industrials.

a concern? i wouldn't call it a concern a disappointment a disappointment a little bit. >> i'm glad you mentioned the dollar certainly it's a better problem to have than the alternative but some argue the street does strip that stuff out when it comes to earnings what do you think? >> one of the charts we published today was the commitment of traders data from commercial hedgers they are extremely long hedges on the dollar. what usually happens is they're getting themselves into that position after it's been a problem. so, they're statistically the group you want to fade, not follow those are mostly corporations. i think they mitigated most of that risk. probably won't see the benefit because of the cost of those hedges in terms of of the impact the dollar is having on the s&p, it's running around 10%. that's pretty high versus history in terms of its

influence. it's usually running right around 2% or 3%. it's mostly insignificant. i think we're trending our way back to the dollar being less important as we go forward it was one of the key factors of 2022 we think that's going to diminish for '23. >> great charts. we're grateful good to he so you. >> good to see you. box office coming back in a big way this weekend we'll break down the latest numbers for the theater industry as mario brothers tops $200 million, best opening weekend in a year. apple off the session lows when it was down 3%. this idc data looking at pc shipments in q1 falling off a cliff, down 29% but worse for apple with a drop of 40%, despite new models that launched juainanry

the super marchos brothers movie bringing in close to $250 million. that's the focus of today's tech check segment with julia i know so many parents that took their kids to see the movie this weekend. >> my kids really liked it, and it was the perfect spring break movie, and the era of families opting to stream movies at home

might be over. it not over far surpassed domestic box office expectations, but also it was worldwide. it's the biggest opening weekend ever for an animated title it's an unusually large opening for a "pg" rated film. led by the performance of super mario cinemark reported it had its highest single day of attendance since christmas day of 2019, and the films were holding up well for theaters this year. and then netflix says it plans to open ten films theatrically every year

and then noting that first quarter domestic box office revenues were 2% above its projections, and the highest quarterly box office since the pandemic began, forecasting a continued path towards prepandemic revenue. and the return of big franchises such as guardians of the galaxy -- >> i noticed james gun's comments, and what that might tell us what warner brothers tells us about it's streaming strategy >> yeah, one thing is for sure, david has talked about really wanting to protect that

theatrical window making sure they are maximizing the box office and not having their streaming business cannibalize that >> thank you up next, a federal judge defending the fda's approval of an abortion pill and the biotech industry is speaking out we we've got that next. don't go away.

ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

a texas judge suspending the fda's approval of an abortion pill before another judge in washington state issued an injunction that says the opposite, and the initial decision to suspend approval could have big imphlications fo the entire industry. i guess the precedent is very important? >> yeah, absolutely. this would be the first time, at least legal scholars have talked about it, that a federal judge overturned an fda approval of a ed medicine so this is something

the industry is watching closely and it's making them nervous, and pfizer ceo signing on a letter originated by biotech leaders and some investors now more than 200 people across the industry have written if courts could overturn drug approvals, any medicine is at risk of same outcome as mifepristone i spoke with the ceo of a therapeutics, and he said unless it could be rolled back it could be representing one of the greatest threats to drug approval in years. there are other products given some of the politics around them, and alzheimer's drugs could be vulnerable, anything that anybody wants to focus on and bring to a sympathetic

judge. and the fda stands behind its determination that mifepristone is safe and effective under its use for terminating a pregnancy. it was really the small biotech companies leading this charge over the weekend and early this morning, and then the pfizer ceo joined that letter, and we heard from pharma, and it's a sticky political situation but there's a big fear there could stretch in other medicines >> it makes you wonder what is happening regarding how the u.s. slides or doesn't relative to drugs in other developing markets? >> yeah, that's the big concern, it could really drive up the costs of developing medicines. it could change the equation about how companies think about which medicines to develop it just puts a ton of

uncertainty into the system. that really scares the industry a lot. they depend on the gold stamp of approval from the fda for their medicines and if that disappears, it brings a lot of chaos. >> i didn't realize the courts have the power to do this, to overturn an fda decision and whether that should be allowed >> well, i think that's a key legal question, and i think there's an expectation that because there are two dueling legal opinions from two different judges and an appeal process is happening this is going to go to the supreme court. they will have to see how they come down on the legal question. if they say this is something that can happen, that will peel back some of the authority of the fda and that's what the industry is nervous about. >> shocking. >> appreciate that that was big news over the weekend. as we work our way towards retail sales on friday, goldman says all yearlong consumer slowdown has been a theory,

thinking about tax refunds and so forth, but costco in their view with their update on thursday made that a reality, and we will see whether we get a slowdown >> yeah, earnings will be key. they have been acting weak on the idea that the data has started to turn even the consumer has been resilient, and that makes costco the canary in the coal mine. more inflation data rolling in, and the data intensifying what the fed will make over that joining me, karen firestone, joe tara nova and steve weiss. we are red