bitcoin, by the way, over 30,000 that's its own story the ten-year note, looking at the ten-year and the two-year as we flip the board around 3.396, two-year at 3.983. a quick oil board? do we have time for an oil board? maybe we don't make sure you join us tomorrow so you'll have time for warren buffe buffettment. "squawk on the street" is now. good tuesday morning i'm carl quintanilla with jim cramer david faber is back. stocks biding their time ahead of cpi tomorrow. bond yields continue to rtal around in a range, 10.34 bitcoin back above 30k, a ten-month high roadmap begins with stocks treading water investors awaiting key reads on the economy. new york fed president williams says he sees no signs yet of

credit tightening. >> warren buffett says he may buy more alibaba is getting into the ai arms race. perhaps no surprise there. china also slapping security reviews on ai products. >> let's begin with the markets ahead of tomorrow's cpi data everybody is taking a crack at it jpmorgan sees core up .5 >> we don't want that. it would just make it so he has to raise again what numbers is williams looking at we got numbers in the last two weeks which says a pull-up that's rather dramatic i think every bank is worried about it the big bank examiners are worried about their own jobs what a bad job they did in san francisco. david, i've got to tell you. anything that makes it so that

credit is tighter makes the job easier because you're not going to expand and there's not going to be as many job openings there's this other worldly group of fed people who don't think silicon valley bank happened or it doesn't matter. >> yeah. why would they think that? >> bouzecause they know nothing i don't know why would they think that? i can't get in the heads of people who are wrong >> we are going to get bank earnings in the not-too-distant future as well it will be interesting to see commentary around that in terms of credit conditions it will be interesting to see from some of the other banks how serious things were during the quarter, how bad they were. >> regional banks selling now, the money centers, they sold under premium. >> we know the reasons the question will be is it suggs stainable in terms of their cost

of funds and will it be up for a long period of time, and to your very point, given there's going to be perhaps tightening credit or are they going to be able to make loans that continue to generate a significant spread for their business or is it going to be sort of a tougher period for some period of time. >> these can be hard to give credit carl, this expansion -- the biggest problem has been wages if you're able to make it so your business is cooling off, that's going to leave a bigger pool of employment so far it's been -- it's connected with silicon valley. i think it's about to go mainstream. >> some of these, we've got this nfib data, business sentiment basically. good time to expand, lowest read in 30 years if you take out one month in '09 that's kind of crazy. >> the numbers -- the lowest the fed has ever seen in fewest loans. what are they looking at i think they're looking at we're

still in the threes and the big employment number. they think they want that -- i guess they want more unemployment >> i guess >> i will say it's been a relatively quiet couple of weeks. i haven't been here to follow the minute by minute. >> it was like an inferno when you weren't here it was it was an inforeknow of news. >> of news >> didn't seem to be a lot of news thankfully on the banking front. to the extent things have gotten quieter, capital markets may reopen i'm hearing there's at least hope for that. >> david is lucky. we've got this guy, jonathan kanter we used to have deal after deal when you went away you've conspired with regulators to make sure there are no more deals which has a lid on the market now we're starting to get it people are starting to realize, don't do any deals >> the journal is writing about a deal that might happen a year

from now with pioneer. it wasn't a deal it's a thing that could happen a long, long time from now >> sunday it was on the street -- monday it was like, i don't know if you're working at the journal. you're thinking, wow, we just made this -- biggest bid ever. >> it's not a bid. it was informal talks. my point was there is at least some hope that there will be some deal making specific to energy where you have a lot of very deep pocketed players that may be looking to do consolidation particularly in the permian. that could be a ways away. there's no doubt the deal market has been depressed to a certain extent as a result of our two very strong antitrust enforcers both at ftc and justice. >> if i wanted to know where the value is, i would go to japan. >> japan is the source of some activity you heard on "aquatic" warren

buffett making news during his trip according to becky quick he says berkshire has raised its stake including mitsubishi tomorrow he'll join "squawk box" live from tokyo for three hours. we'll hear from greg abel as well. >> that's important. >> japanese banks, there's a move in japan. >> to do what, jim what does this mean? >> it means that you're back. >> it means you can't just say anything you want without being challenged. >> a lot of stocks are much cheaper there than here. >> it has been for a long time i've been reading an interesting book "chip war," the idea that semiconductors are the most important thing in the last --

it does take you back to the japan of the '80s when they domin dominated derams or took away a lot of the chip business from our companies in silicon valley at that point. of course, when the nikkei was hitting incredible highs can we go back to that period? where are we now >> in the way back machine >> if you go way back -- >> that's where i said -- i made the famous call. i said we're going to cross. the dow is going to cross the nikkei. >> when did you make this famous call >> in 1989 i was on charlie rose for years off that call. sometimes you make one call and you become the guy i became the guy. >> there's a 20-year, 23-year -- that's not capturing, of course, the nikkei, the highs, the period in time when they were

owning rockefeller center and we were discussing what are we going to do. >> people have to understand you used to get a call around 10:00 at night your japanese broker look, you just bought 100,000 in tokyo electric i don't want that. you'll get to sell it tomorrow to us. isn't that illegal in japan? no we do that we decide what stocks we'll take up for the night david, i never thought that was the way to do business. >> no. if you owned the nikkei, you haven't done well at all it's been horrible. >> this could be the big change. >> buffet seems to like these trading houses i can remember when many of these japanese banks were competing in our markets in the late '80s. they were the players. >> the movie business. >> the movie business. >> the car business, remember? >> they were kings i think what happened is that

government has completely committed to having a better growth market. it really has. the japanese want a growth market you can mandate a growth market. >> you can still have a debt-to-gdp number that's huge they own most of their own debt so it's not quite as important. >> it would be great to see them be part of the tfirmament here. >> you mention m&a, glenn core sweetening a bid on tech. >> the gold deal as well. >> right sen tore yeah, waiting for them to do a big deal. >> still waiting on national instrument you've been talking about that one. >> no, no. enough emerson again? >> emerson, key site and fordham all made bids. >> which ones need big financing? >> fordham may be the one. key site is an antitrust issue

where they need to align with pe -- >> he's coming in fast you got steve cohen in you >> who >> the guy that owns the melts. >> may 18th. >> you're throwing the pitch out? >> damn right. >> you need to start now go 20 feet, then 30 feet >> i'm not going to embarrass myself >> oh, yeah? they all do. >> i'm going to get out there with my son when he gets home and we're going throw. >> you're asking your son to practice with you. >> finally can have a catch again. i can make him come on, you don't want dad to get out there and completely embarrass himself. >> does it all lead to what wells said today about u.s. equities, within striking distance of our 4200 target, we now think the banking issue is going to create a recession,

expect a correction in the next 3-6 months about 10%. >> i don't care. all i care about is the fed being done >> the point is actually that the s&p 500 is outperforming in the last hike environment relative to history. we're front loading what is a normal gain. >> i've been doing a series. there's -- stocks in the 500 with me so far >> yes, i'm keeping up. >> 50% of them are below where they were two years ago. >> that would be 250 of them or maybe even more. >> take some time off, come back so hot. >> i've got the neurons -- >> wow anyway, that's too many. we're near the end of a tightening cycle and you should be buying stocks instead people are selling stocks and buying bitcoin. >> wells would say year-to-date we're up 7.5 they said that's bullish enough for us, given everything that's headed our way.

>> why are they so negative? they need to look at their own bank, get a little more happy. i'm going to talk to charlie about that >> i like wells. >> you do? >> very much so. charlie is sharp, this is his quarter, ceo of wells. look out for him. >> buffett used to own a lot of wells. now he doesn't now he owns a lo of bank of america and apparently a lot of japanese trading houses. >> he had the call after the interview. i've got to go i had this thing the top of the annual report, a quote from lombardi saying it's basically the team i asked how bad is it? he said, well, the team let me down basically that didn't sit well with

buffett. there was an i in team. >> you've become more bullish in the last two weeks of the market >> yes, i have mostly because you're not there to make he feel downbeat. >> you're talking negatives. i'm mr. negative you like wells >> i do. the most seminal thing that happened this sunday, a poll of 15 people around the table at easter dinner about whether he hates me or not. >> yes, you told me about that. >> when are you going to release the results? >> emphatically that you hate me [ laughter ]. >> yep the respondents were very clear. >> come on, man. >> yeah. all generations. gen z, gen x, millennial, alpha. >> republican, democrat. >> only thing that united people. >> they're all wrong they're all wrong. >> when we come back this morning, alibaba unveiling the

rival to chat gpt as there's new scrutiny in china and the united states take a look at futures as we continue to hold the cars pretty close to the vest and some of the data cinomg our way in the next 24-48 hours back in a moment 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. ♪ icy hot pro starts working instantly. t. rowe price,

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alibaba unveiling its entry into the ai arms race. the name of the company's rival to chat gpt is a chinese phrase which roughly translates to "seeking truth from a thousand

questions. the system will be integrated into the company's workplace messaging app and the voice assistant. meantime back here, commerce put out a request for comment on whether there needs to be a certification process for new ai models kind of like we do with big pharma >> maybe an fda for this kind of thing. i'm a firm believer that this has already outrun anything you do in regulation this thing has taken off you've got incredible partners azure, by the way, you have microsoft way out in front you've got -- obviously wong and nvidia leading the charge. alphabet is in there, salesforce is in there. these companies aren't waiting -- the gun went off already, david it went off. >> the gun went off without a doubt. there's going to be continued questions in terms of whether the government should somehow put regulations around it. it's interesting because sam

altman who runs open ai gave the world chat gpt 4 and pre 5 and everything else, believes the government should play a role here there's this fear they don't quite know what they've got. that was echoed by eric schmitt who was a guest on "squawk box" this morning, although he also talked about how every site and every app is going to be using ai take a listen. >> every site, every app you use will use this in some form there will be lots of different such things. for example, the alibaba thing is something american companies are already doing. no problem there will be a few extremely large models that will cost a billion dollars, $5 billion. those are the ones everythone is going to watch because we don't know what they're going to do. >> talking about the large language models, the likes of which is chpt 4, barred from google, require enormous amounts of computing power and are

incredibly expensive hence why microsoft basically has had to devote billions of dollars in investment dollars towards chat gpt because without it they wouldn't be able to run it >> that's going to the h100 of nvidia which has the speed. >> yes, which doing the parallel processing which empowers ai >> they can't meet the demand at nvidia one of the reasons why nvidia stock keeps going higher imagine you have literally a product you make where there's demand from so many companies and everybody is on allocation, the way i look at it out can't make them fast enough. >> a processor used mainly for ai and incredible potential demand it's always important to point out because i haven't been thinking about this recently, nvidia does not make the chips they design the chips. who makes all the chips for

nvidia. >> taiwan semiconductor. some people thinking 18 months the chinese are going to own it. that's why we come back so often to the national security implications taiwan semi makes all these chips. >> you know where i am on this i think they're going to take it over whether they do it politically or militarily. we have a half-ass way to save these guys >> you better hope they build that plant in arizona quickly. they're going to need to change it -- >> look at the specs of what they have? >> i know they're not doing the smallest nano meter stuff. >> they'll do the stuff for 4150s. >> that's not going to help. >> we told the chinese they can't have the h 100, they can't have the high equipment. are they just going to sit there and say, you know what we're going to become like russia and have all second-rate chips. no, they have to do something. i'm not saying -- there's many ways to take over taiwan without

war. >> we've seen them slow rolling m&a deals, leaning on the japanese, leaning on the dutch we're outgunned and outmatched they live right there. we send a destroyer over there a destroyer. that's a tin can come on, guys. we don't work like that. we won't give the ukrainians the drones they need, and we seem to be in the south china sea. all these things are happening and they say we gave up afghanistan. they make it a democrat/republican issue. it's not a democrat/republican issue. >> we made taiwan preeminent in terms of building the most advanced chips. >> who lost china? >> i don't know, jim.

>> stillwell think about that >> i'll give it a lot of thought. >> we'll get to the opening bell resqmite nine nus. mo "uawk on the street" when we return. thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back.

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to guide you through a changing world. ♪ as we mentioned, dollar a little weaker today. dxy below 102. it has moved things like bitcoin. had a good first quarter as you know this morning dips to 30,400, roughly, back to june of last year opening bell coming up in about five minutes you can catch us any time anywhere st tand follow the "squawk on the street" opening bell podcast.

all right. about 2.5 minutes before opening

bell let's squeeze in a "mad dash." you have research about carmax or something from the company there. >> yeah. every line is down every year which is usually a sign to sell, except, david, their net earnings turned out to be -- the net earnings were just not as bad as people thought. people were looking for 20 cents, they came in at 44. what they've done, they managed to make a lot more money with less robust margins the margin increased $82 per car. then again, there's just real issues here. for instance net revenues were $ 5 /* 5.7 billion, down 25.6%. >> revenues declined by a full quarter. >> you can say it's up because com store sales were only down 14 we're in a situation where people thought carmax was in big

trouble. they weren't they weren't in trouble at all >> any read-through at all just that they executed well in a difficult environment? >> all indications they're doing well lithium motor had is one to watch. think eve been on a buying spree of dealers that's become one of the three largest players in the industry and nobody talks about it. so watch lithium. >> one interesting point was used vehicle asps down nine year on year, prior quarter up two. we could use a little deflation in used cars. >> mannheim showed things weren't so bad i think he's looking at wages. he needs to see people making less. >> in that case, he should be happy with friday's number the lowest month-on-month in a year >> you can't have slowing. look, mester wants us selling apples with mester, buy a lot of

apples, sell them right out here where gold used to trade yeah, i got apples here. mcintosh, hey, i got apples here. >> red delicious granny smith. >> let's get to the opening bell on the cnbc realtime exchange. sam's club, a subsidiary of wall nart, celebrating the 40th anniversary. >> they had good numbers that's one of the reasons walmart went from 140 to 150 david, you hear during that, it was so positive, sam's is good >> no. i think i missed it. >> well, you missed a good one sam has had good numbers. >> by the way, jim, we should mention tom rogers, of course, up there as well that is a spac they're going to be merging there

engine gaming and media. we'll trade under their new name game square. a little shout-out to our friend tom rogers. >> part of cnbc royalty. >> worked for "new york magazine." long and store read history working with him. >> that's right. primedia once owned that, too. >> i was not fired. >> you were not? >> i was. >> you were. >> it was done by the guy, adam moss who called me hey -- i said just say fired he goes no, terminated i feel so much better. i was terminated. >> jim, you mentioned sam's club brings us to albertson's as well with a quarter this morning, stocks down 2% and the notion yesterday raised by goldman that the theory that the consumer would weaken in their view was made reality with costco's update last week. >> that costco update was so important.

stock was up yesterday, david. but costco missed -- they did great on everything having to do with why i love to go to costco. the chickens -- the beef when you go. >> when i go, which i never go. >> i'm going to skip you for a second >> skip me go ahead pass over me. >> lamb shank you right in the face if you're not careful anything that involved metal. >> metal >> tvs it was rather extraordinary how bad it was i thought that was very important because what it said is, if it's a big ticket -- >> we did pc shipments yesterday, q1. >> pc shipments were so bad, they were good i look at the meaning historically when it gets this bad, somebody blinks samsung finally blinked. costco is such a wake-up call. five is where they get to before

they give a dividend they described it as business as usual, they had a certain mix they thought the consumer would want the mix radically changed over the period basically since the silicon valley bank which now mester doesn't seem to know anything about ford has forgotten about it. >> williams said it had nothing to do with rate hikes. >> did he write the music for nbc? >> oh, john williams >> same guy, right >> yeah, same guy. >> completely oblivious. >> a composer and a central banker, yeah. >> all the oscar nominations. >> if you ignore the data -- >> that's his day job. >> he may have a career in music because he sure doesn't have a career in loans and what's going on with these guys, they really have to be careful they ought to be careful we had people in 2007 who also said everything was fine it's much better to say, as

powell is, we want to be circumspect here we've had the worst lending figures in the history of the fed that's got to have some impact to blindly walk past that particular sip poll kerr. >> quite a word. >> you don't use that one a lot. >> watching some british show last niem. >> spualchre >> i was watching british the other day. my wife likes it guys, we need more words we need bigger, more words i took it to heart. >> i like it i like when you go way out there on vocabulary. >> thank you dave, you have not mentioned the love affair with bitcoin and how it was rekindled >> no, i haven't i have nothing to share there other than i can tell you bitcoin is up 3% that's about -- that's the insight that i can share. >> jeff probes got nothing for you.

>> 83.96% for the year isn't that amazing. >> can i talk to you about what's happening in oil for a second >> oil not bitcoin, oil >> switching directions. >> i feel a little more comfortable talking about what's going on sure let's talk. >> pioneer is willing to sell. >> are they? >> i understand it's a three-handle which is my way to be able to confuse most people at home by saying it's above 300. i want to sound every bit as smart as everybody else. >> as you should. >> that would be a large deal. the journal reporting on the possibility of a deal sometime later this year in informal talks. we do know or at least expect exxon returned $55 billion last year, has a lot of cash. i know from firsthand experience they do want and have great expectations for the permian where they hope to be generating at least a million barrels a day over the next four or five

years. >> mrs. haefer sham, what happens here >> i don't know. i'm not sure wooi that story gets leaked. that's a good question >> i'm hearing pioneer, 289. people say anything. >> i don't know why it's out there. i don't know if that's something you really want to report on i've been uncomfortable with reporting things informal that may or may not happen or won't happen for a long period of time that said, the market is making some conditions here -- exxon, are they interested as well in carbon capture and danbury resources. much smaller deal. could they do both >> maybe honeywell is doing carbon capture. linde was a big part -- >> the linde deal that exxon announced last week. >> nobody cared. >> 2.2 million >> i cared >> linde had not even admitted

they were involved with that. >> i've got it right here. i always am amazed you keep track of all this stuff. i printed it out 2.2 million metric tons of carbon guy oxide, from a plant that hasn't even been built yet. exxon mobil is in the carbon capture business, trying to make money from it. >> i had danbury on. it's lucrative. >> would it make sense for exxon to own them? >> you betcha. there have been apparently informal talks. >> i think they have i think price has gotten in the way. exxon is very disciplined. >> why don't we be like everybody else, make this up. >> i prefer not to do this. >> it could be this weekend. >> if david throws a strike, we do that deal. >> i say to my wife, oh, we own pioneer for the travel trust this is going to be so big she looks at it and goes, jim, other than the headline, nothing

in here says it's going to happen oh, i'm having a good day here >> that's true >> let's go to blackstone for a little. >> how are they doing? >> a lot of redemptions. not able to meet them all. this morning they announced they're closing on their largest latest global real estate fund, blackstone real estate partners. this is more the private equity, making capitol commitment. 30.4 billion of total capital commitments. largest real estate or private equity drawdown fund ever raised. >> can it buy -- >> that's kind of an affirmation for value in the real estate market. >> there's a schism here barry stern lick very much in the world saying things are not good a good piece by michael yesterday, eye on the market.

>> that was good. >> real estate is not one thing. commercial real estate, reits, for example, don't add up to one in the health care industry. >> trillion dollar debt. >> a lot of debt it's a much more important story in the debt markets than in the stock market. >> you can sell a couple buildings and everything is good don't you need buyers? >> yes. >> or could this buy it? would they be willing to buy the casino property? >> i'm sure blackstone is a willing buyer for a certain price on a lot of things. >> i don't want to get negative about commercial real estate it's true these c and d buildings can be converted into art lofts. >> it's the big-plated buildings built in the '60s and '70s that can't be converted into much of anything. >> they'll be tearing them down. >> apollo has a chart where they think it will subtract gtp over the next three years which will

result in rates much lower than we think for a long time maybe even the return of qe. >> you should tell mester that that would be a wake-up call. >> interesting >> cleveland, guardians. >> what? what are you doing you talk about cleveland and the cleveland fed and you immediately think of their sports teams. >> i met bernie kosar. >> the old quarterback for the browns >> yeah. he thinks mester is a-okay >> exactly right >> i listened to her speech. it was so clueless, but then you look at her credentials. she has every right to be as clueless as possible with those credentials. [ whistle ]. >> you're getting close to the i-know-nothing camp. >> you can't have the worst loan data in the last two weeks of march and not have some impact

on your brain. maybe the vagas nerve if you want to get detailed about where it can hurt. >> got it. >> controls a lot of your thought process. they've done a lot of work mapping out the vagus nerve. >> it's blocked. >> you're saying lore resta mester's vagus nerve is blocked. >> the emcee for the american brain foundation this year, and i may have to talk about the fed as the way that you can actually have your brain clouded and not have any of the drugs that we now have that can alter that i'm not talking about the braining brain foggy had once >> how about tesla shares? >> i'm glad you brought up

tesla, david. >> chair of a select committee says he's concerned, jim, about the company's dependence on china, especially after the announcement of the mega pack battery deal in shanghai mark fields on the show yesterday said it was elon's way of throwing a little sugar the chinese way, a little insurance to make sure things are co-pa settic over there. >> it's true, some of the companies are really starting to go back and have done it in a way that i think is maybe people to people. >> when you say some of our companies, you're talking about tim cook i think really going back but there's only a small group of companies that are particularly dependent on china as a very important part of their business that don't include the likes of meta or alphabet, both of which are banned there. >> next, in a couple weeks we'll see stores in india. >> tim cook is going. >> now you have apple down we'll have photographs of people lined up like a rock concert be there at 1:00 a.m., 2:00 a.m.

and everybody will be very scared, and it will be a nice short squeeze and take the stock to 170. >> buffett in the nikkei interview today, he did add dres berkshire's sale of taiwan semi and said geopolitical concerns were a consideration. >> my existential worry is taiwan. >> we were talking earlier, the point being, nvidia, which we talk about a great deal on the show, where are nvidia's chips made. >> where is amd chips made >> they used to have their own fabs jerry sanders was like, year you're not a real man if you don't have a fab all of our firms except for intel, which we know the problems that company has encountered. all of them designed chips without having the fabs to make them any more we let morris

chang, the guy we don't talk about -- he helped create the semiconductor industry >> morris chang is very smart. >> i know. he's the guy who created tsmc, but actually spent most of his career at texas instruments. >> can we just understand we have the intellectual property, that's the one thing left that we make, and we should be proud of that. that is what we make. >> kla >> lam research. i think lam research is the finest engineering company we have >> the level of engineering is incredible, but we've also helped -- tsmc was basically created by the american chip companies to a certain extent and the taiwanese government asml with the healthography stuff is all dutch >> if you want to know what the chinese need, they need the chips that go as fast as what we

have they're not going -- they don't want micron. they want the chips that nvidia makes. our government has said no. >> it's complicated, jim look at the best dow stock at the moment, boeing 11 chinese airlines now are resuming operation of the max. >> people to people. the chinese people like the american people. they don't want to hear a blackout when we talk. they know that the people united, us united states and china will never be defeated, to use an old marxist phrase i chanted during the vietnam war let's put it in context. >> you've come a long way since then you are no lefty. >> no, no, no. a couple of upgrades, jim, in the industrial space whirlpool at goldman. >> how about that? the cash flow is there. >> mohawk at loop. >> mohawk is like, wow, it's time to decorate yourself.

whirlpool did a couple of transactions i was hoping they'd get big money for the european it didn't work out whirlpool, the supply chain constraints are finally over i fell for it at 160 160 for that one i fell for qualcomm at 140 and fell for emerson at 90. >> what did you get wrong? >> all of those. >> why why did you fall for them? what was it that drew you in >> i listened very closely to ceos and they were more optimistic sometimes you have boyhood enthusiasm and it has to be checked at the door. i'm seeing a couple of ceos today and i'll be a little septable, david. >> you are >> he hates me. >> no, i don't think he does despite what your easter sunday dinner said. >> that was just -- sam just

said, when he does this, he's not going to laugh at any of your jokes you should just turn to carl >> yesterday, jim, we talked about retail and pill fraj today the news about this whole foods and downtown san francisco, 8th and market, opened last year, is going to close temporarily because of fears for worker safety. the changing face of at least in the cities, what shopping is like >> i spent about $100 at target. i said at the register, i'm going to pay for this. >> i remember, you related that and everybody else was just taking whatever they wanted. >> i just said, i'm going to volunteer. it was kind of a volunteer thing to pay i called brian cornell he said, yeah, that store, we keep it open for the community brian cornell is very sensitive.

he has some stores that he feels are very important to the community that one in particular, he said it's difficult to get people to pay >> we have a really nice whole foods around the corner here now. we all pay we go every day and it's packed. >> number seven, number seven. i'm seven. i'm sorry. >> they charged $14 for a little thing of mac and cheese. >> rotisserie chickens at 12 bucks are pretty good. >> there's news you can use. quick reminder, you can always get in on the cnbc investing club with jim. sign up at cnbc.com/jointheclub or use the qr code on your screen as for bonds today, we'll get a three-year note auction at 1:00. austan goolsbee speaks a little bit after that really we're still waiting on cpi tomorrow ten-year, closer to highs of the session, 3.43. back in a minute

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it's time for jim and stop trading. >> yeah. marlee and ragu are going to like this call j and p starts chewy with an outperform this has become a controversial stock. a lot of people feel they don't have an edge on amazon, but a lot of other people say listen, they have a great breadth in product. i will reveal a new tie in a small company about health care. those of us who have pets recognize it's a cash pay and holy cow, when a pet is sick, which is any time, it's so expensive, maybe the country has to make a change and this could be the beginning.

>> certainly price elasticity, when you have a pet anything they want. >> 24/7 anything they want. >> when they eat raisinettes. >> not good. >> did you not know that >> i did. >> grapes and chocolate. >> grapes and chocolate. >> keep them away. >> very bad. >> bad for dogs. >> i would rather have them eat a full loaf of bread, right. >> so what else tonight? >> and then i'm going through this list of stocks. >> yeah. >> that from two years ago, this -- these companies are way too cheap. david. >> yes, jim. >> the market is not as expensive as it seems. okay >> okay. >> too negative is the name of the theory of the piece, and i'm -- >> you are >> all the doubters you think don't like me, they have to pound some sand. >> they should only know. >> they should only know the depths of our affection.

>> let's not get too carried away. >> show your roll there, faber. >> "mad money" 6:00 p.m. eastern time goldman's chief u.s. equity strategist, david kostin, important day to get his take on meacmarkets and the fed when we co bk. we got this. we got this. we got this. life is for living. we got this. let's partner for all of it. edward jones

good tuesday morning welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber, live for you as always from post nine at the new york stock exchange take a look at stocks. higher here in the early action. at least for the dow up 29 points s&p 500 unchanged. the nasdaq lags down a quarter of 1%. there's strength in groups like materials, health care, financials, industrials, staples, real estate and energy all higher, but tech is dragging information technology and consumer discretionary worst performing sectors ahead of the cpi report, inflation report, tomorrow 30 minutes into the trading session. three big movers we're watching right now. shares of newmont under pressure off the lows, raising its bid for newcrest mining to $19.5 billion in what would be the

largest ever m&a deal in the gold mining industry we'll watch that story bitcoin popping above 30k since june of last year. names like coinbase and micro strategy are following suit. regional bank new york community bank corps upgrade to buy by jefferies, saying there's been a dramatic improvement in the bank liquidity profile after svb and shares up, up 1.5% big headline of the morning that i wanted to get to was the imf downgrade of the global economy. nothing drastic in terms of the numbers. they took down january's forecast by 0.1 for the world in '23 and '22 -- '24 and expecting growth 2.8% now for 2023 and then for '24 the forecast goes to 3%. it's okay, but there's some dire warnings in here which i think offer a pretty sharp reminder of

the uncertainty of the outlook we're facing one quote from the chief economist of this world economic report, risk to the outlook are heavily skewed to the downside with the chances of a hard landing having risen sharply the three themes that i pull out that they're worried about, stickier inflation than expected, right, lasting longer and it's higher than expected, the financial turmoil, lot of references to the bank failures in the u.s. and the fact that we think it's under control but it might not be under control and, therefore, there's a risk to the outlook, and the central bank tightening and it's all happening at once and it's all slowing the economy. those are three very big question marks still as far as the outlook is concerned. >> any, in reference to the perspective on the banking industry, any specifics about credit tightening and what impact that may have >> too early that's really the question we're all trying to figure out right now. i was looking at the nfib, small

business survey out this morning, less optimistic, and down below average for 15 months, but there is a silver lining as to credit. the survey of small business was taken three weeks end of march, three weeks after the failure of svb and in it, 2% of owners reported all of their borrowing needs were not satisfied, 29% reported all credit needs were met, 59% said they were not interested in a loan at least in the early action in the few weeks after the failure of svb, didn't see any sort of mass credit crunch in at least the small business survey. >> meanwhile, hiring plans, lowest in three years almost inflation, number one problem. used to be that was always the top of the list. it's down 13 points from the peak last summer which makes some sense your point about imf, bofa's take is that period where you get easier fed policy, but tightening conditions, is usually the worst period for stocks and that's why they still see us going back to somewhere

in the 3,000 range on the s&p. >> tightening financial conditions, it's interesting that the market is now, what, two in three chances the fed hikes 25 in may. david, on the view that look, unemployment number wasn't a disaster, a little better than expected on the headline numbers and that financials appear to be calm and there's no sense yet of a mass tightening in lending standards. in fact, new york fed president listen to what he said about the issue yesterday. >> we think there's worries in the banking system that maybe the banks pull back on the lending vehicle and we see that in the past where they'll -- credit conditions will remain tight, availability of credit to businesses, may be less, and that does affect employment. that's something we've seen in the past with these issues in banks. we don't really know whether

this will happen this time we haven't seen any clear sign yet of credit conditions tightening. >> the audio isn't great but the headline we haven't seen yet any clear signs of credit tightening. >> doesn't mean we're not going to. >> doesn't mean it - >> we're going to move into earnings season for many of the banks, not just the big guys but regionals as well, going to get questions on that. the cost of funds has gone up for these banks. we know that to earn a general spread that, you know, that will keep them profitable, they would seemingly have to become, perhaps, tighter with credit or at least move up rates to certain extent for some certain lines to make things more difficult i don't know, sara powell said the same thing a couple weeks ago just going to sit and watch and wait and, you know, unclear, right. >> i think that the dilemma for him is that, if they go in may, the meeting is may 2nd and 3rd, a cpi report tomorrow and a ppi and more evidence of stability in the financial system and then fed meeting, if they go in early may and then something breaks, i

don't know, it's first republic locked up? if something happens everyone was going to say that's a mistake. they will point to may and say they shouldn't have gone in may. that's the predicament the market is allowing them to do it. we'll see if that continues. continue the market conversation now, bring in goldman sack's u.s. equity strategist david kostin good to have you. >> nice to see you. >> going into earnings amid all of these macro challenges and headwinds and feels like there's a lot of pessimism what's your feeling about what we're about to see >> you could argue the pessimism is appropriate, expectations are down 7% year over year earnings growth, this will be the worst year over year growth since the pandemic that's the setup the expectations coming in and sara, there's a dispersion around that. you have a couple sectors, industrials where it they will be positive 11% earnings growth and on the other hand a lot of significant down year over year

comparisons in materials, you'll see that down in health care, down 20%, you'll see communication services, technology, so down roughly 15 to 20% that's a reason for pes smsimist what's coming into the quarter what's important about this, margins will show the third consecutive quarter of degradation. we're down 50 basis points contraction in the third quarter, 100 basis points of contraction in the fourth quarter and coming here results for the first quarter probably 150 basis points that is showing you that companies are really having more challenge in terms of the pricing power, good from an inflation perspective, that that will have been moderating, but that's a big area of focus for us coming into earnings season. >> isn't that going to get worse as we see disinflation from the levels >> expectation is that they will be marginally down this year and that eventually they will be stabilizing. basically margins peaked in the second quarter of last year and they have pulled back for pretty

much every sector of the market and that's in a more normal environment. i was here a month ago, stock market is around 4,000 today 4100 roughly so i think this reflected largely -- >> your target. >> the target. largely they -- the stock market is pretty efficient and pricing this. >> where are the surprises for you within earnings? >> i think the opportunity set is going to be in the stable growth companies i heard your conversation earlier talking about potential credit conditions and tightening the stable balance sheet companies, the companies with the strongest balance sheets, they've out performed. that is priced into the equity market what's perhaps not priced in my view would be the stable growth companies. you could look at a couple examples where do you see companies with low variability in the earnings growth over the last decade. i could look at colegate palmolive a colleague of mine is an analyst on it, the lowest variability within consumer

stabilities. amgen, same in healthcare, where is there low variability of growth in an environment where so many people are asking questions about the risk of recession and so stocks that are not pricing that in, would be stable growth and i would argue that's where value exists, trading more at a greater discount. >> one thing we've talked about from some of your recent notes has been why you don't think necessarily the market rallies on the heels of a final hike the way it usually does in the last few cycles >> historically speaking the market does rally over the subsequent 12 months, once there's the final fed hike you only know that looking backwards but a less positive scenario, one or two more hikes, the goldman economists expecting two, the market expecting one plus, we have the debt ceiling, and carl, that is out there in late july, or august, some time, august or september, that's big

risk the divisiveness in washington, d.c., every day what's happening there, that's a risk i would point to his clearly speaking the market tends to be weak around ahead of the debt ceiling hopefully eventually gets resolved that's one observation look out over time, carl, i would expect that if the fed is cutting rates over time, equities tend to rally. >> right is the debt ceiling, doesn't get talked about i think enough yet, but is the notion, is the danger that it doesn't get resolved or that it does get resolved, new it debt gets issued and yields go higher? >> historically speaking it will get resolved and one would be optimistic it will get resolved in a potential way, but history would suggest maybe that's not the case in 2011, the stock market fell 17% in 22 days, because the kind of acrimony in washington was significant i view that as a significant risk over the next several months and it will be -- it's not currently really talked about very much with portfolio

managers but that's likely to continue to be an area of focus. >> yeah. i kind of wonder, it's hard to game out exactly when suddenly something becomes an area of focus. it may be one headline or not and it could be soon it wouldn't seem things are better in washington than they were in 2011 whether you talk about relationships across the aisle. >> i would concur with that view so if that's a couple months away, near term, sara was referencing it's the earnings season and in the next five weeks, what's unusual, david, everything gets concentrated in the week of april 24 to the 28th normally it's over a five-week period, the different sectors roll through that, but the way the calendar works, that's where most of the companies are going to be reporting in that particular week. lots of information will be gleaned at that time and we're expecting to see more companies having disappointing margins, margins contracting and probably the guidance is likely to be to be more cautious because of the uncertainty of recession and recession odds have increased

and would suggest at an 18 multiple where the market is trading very expensive the risks are cash offers a -- we call it -- there are reasonable alternatives. >> right although again, the debt ceiling stuff, i'm not sure i want to be in treasuries. it could be a bad couple weeks there. >> short term. >> maybe don't want one-month t bills rolling august or september. from a cash point of view, nearly 5%. >> yeah. >> that's a perspective. >> what does this all mean for use of cash by companies you always like to track buybacks, dividends, if you're expecting margins to be under pressure, does that hurt that? >> well, the use of cash, my colleague ben snyder on our research team did work on this, the year over year change in buybacks declined by 20% in the fourth quarter so most uses of cash increase and they tend to increase when companies are generating, still profits, year over year declining, so that is an area of vulnerability as companies pull

back dividends make a more interesting investment opportunity. the case would be companies raising their dividends, their reasonable number of companies, we're looking for roughly 5% dividend growth on average sort of this year as opposed to the buybacks that is a concern because buybacks have been a singular source of demand for shares for the last decade. the major source of demand for stocks it's not likely to be the case this year. >> you're sounding more bearish than your 4,000 s&p target leads on i wonder if you're going to cut? >> no. 4,000 would be consistent with the idea of earnings basically rising maybe 5% into next year flat this year, rising by 5%, rates stabilizing, maybe coming lower at the end of the year would be, you know, consistent maybe with the equity market supporting these levels. >> all right david, thank you good to get your updated thoughts as always david kostin of goldman sachs. as we head to break, our road map for the rest of the hour,

chip stocks out performing this week and this year we'll dig into the top picks for the sector from morgan stanley. yet another chatgpt rival has been announced alibaba becoming the latest entrant in that a.i. arms race. and finally, this flu shot setback sending moderna shares lower today. details ahead. big show still ahead don't go anywhere. go. go green. go wind turbines. go gorgeous reliable grid. go emerson software. go science people. go breakthrough meds and safe science. go space age welds for super silent cars. go big. or go home. from software that delivers new cures at warp speed, to technology that makes clean energy reliable, emerson innovation helps make the world healthier, safer, smarter and more sustainable.

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moderna shares you can see are under pressure this morning. this as the company kicks off its vaccine day.

let's bring in meg tirrell to fill us in on what they've said so far meg? >> well, david, there's a focus on moderna's vaccines across its mrna portfolio and they have annou announced a number of new programs but what's getting the attention and driving shares lower is an update on the mrna flu vaccine. they're running a phase three trial in the northern hemisphere and said this morning there weren't enough cases of the efficacy analysis to declare an early success there. they have been recommended to keep the trial going in order to then read out, you know, how they're doing on efficacy and preventing cases of flu. they did do an immune response analysis showing superiority against influenza a, and noninferiority against influenza b. in the previous trial in the southern hem poisphere they did meet that threshold and they're upsing the vaccine construct to target those strains that is driving the stock down a

little bit this morning as flu is one of the sort of next big opportunities for them for mrna vaccines they also provided a longer term sales forecast for just their res respiratory products now 8 to a $15 billion by 2027 the reaction is it's generally positive but people say there's not a lot of visibility into what those markets are going to look like in terms of respiratory diseases, they're looking at not just covid and flu but rsv. the company working in a lot of areas and they will have updated data on their personalized cancer vaccine that really drove the stock up a lot in december when they had some initial result there's people will be looking at that closely on sunday into monday morning for moderna. you can see on this update the stock down more than 5.5%. >> interesting on a day where the white house signs that bill ending the national covid emergency. that's a day we weren't sure would ever come. meg tirrell on moderna, thanks. meantime western digital and micron, two outperformers this

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semis getting a boost to start the year nvidia up over 80% as the

company continues to benefit from a.i. development. amd, micron and others up double digits continuing to rally after samsung announces cuts to its own clip production. morgan stanley's semi analyst joe moore joins us with his outlook. it's great to have you we know samsung is a big player, but does the space really deserve to reflect that news with what it's done this week? >> well, it's really an unprecedented action samsung is ordinarily not inclined to do this, you know, micron had already lowered utilization, western digital lowered western digitalization we are dealing with a situation where profitable is kind of 2009 levels this is very challenging conditions this action is a really big deal the concern i would have is, what it really does is boosts the floor, so it's probably a little less bad conditions as we move through the rest of the year it suggests when we move into

the next upturn, that the conditions will remain labor challenging. there's a lot of latent supply that will come back on the it protects the floor and doesn't boost the ceiling where we're going in the next cycle but the move yesterday was warranted. this is a unique action, and one that should have some positive results and the question is what's priced in already. >> right i mean, we do think about recent quarters out of micron to be sure, and the guidance there, at one point we were wondering if we were going to see broad-based inventory rightedowns. i imagine that's what you mean protecting the floor >> micron had roughly a $2 billion loss last quarter which did include lower cost to market inventory when the gross margins go negative. really challenging conditions and micron has put themselves in a good position with a good

balance sheet to weather that storm, so in my mind the question is, micron, to me, feels like it's already discounting pretty good outcome for the next cycle we're underweight micron they've done a great job, but the stock feels ahead of its picture. western digital is a little bit more of a challenge situation. the balance sheet is not as robust, and so i think removing the really negative scenarios for the second half, is really positive because you're going to have a good cycle, and the question is how do you weather the storm in 2023 and wd which has almost no market value assigned to its memory business, this is a really good outcome. it's good for both but i think from a stock standpoint it leaves us more constructive on wd understanding there's risk, that risk lessened when you sort of, you know, eliminate the really negative conditions that we're seeing currently. >> right the street definitely gave the pc q1 shipment units the once

over earlier in the week the easy playbook for some is stick with auto and industrial does that still make sense >> i would take the other side of that to some degree, right, that i think you have the sectors that have already seen their inventory correction, where you're under shipping and demand that's where you want semis. when under shipping and demand and conditions are negative, you have in the future a catch-up period where you move back up to in demand. the problem is for memory, the supply-demand imbalance is significant we could have a rebound in volume and if you don't take the supply side actions, you're still left over supplied in the back half. i'm not negative on pcs. i think stocks that have those exposures, those are areas we're seeking out. by contrast, automotive and industrial really strong trends currently still. how much of that is the shortage we've been seeing for the last couple years, customers wanting to build inventory up as a safety buffer to make sure they don't have the issues in the

future that might be the part of the cycle where you're over earning a little bit pc, smartphones, areas where we're under earning and when will it get better versus the other areas where it's good now, but might have more headwinds ahead of us. >> you're doing an industry breaki breakdown in supply and demand, isn't it risky to have overweight on all of these names except micron and strong double digit year to date performance if we are heading into a recession with the risks increasing now >> yeah. we've had a great move year to date and i do -- it does give me pause when i look at how much some of the stocks are up, and we have economic weakness ahead of us. one of the areas that does help for semiconductors, we have a lot of china exposure so when you're looking at china reopening as a factor, you know, to be overly centric we have challenges in the u.s. part of the economy but there are

tailwinds in other parts of the world. as a general sense, we're up a lot and i think we're up a lot during industry conditions which are not great. what market is basically saying is, we're no longer waiting for the companies to tell us that -- we're going to assume conditions are weaker and saw in january, relatively muted results from companies and still good stock performance. on top of that you have the growthier themes like a.i. and things like that that are helping the groop group overall. >> market trying to be first in line joe, fascinating space as always maybe now more than ever appreciate it very much. talk soon. >> thank you so much. >> as we head to break, warren buffet sets his sights on several of japan's trading houses the chairman and ceo telling the nikkei news he's considering additional investment in five trading houses and planning to meet with him later in the week. he's going to join "squawk box" in a broadcast you do not want to miss live from tokyo tomorrow

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welcome back i'm kristina partsinevelos here's your cnbc news umgts update at this hour. the east palestine derailment continues to be felt throughout ohio a truck drove off a highway and overturned according to highway patrol the spill was contained and doesn't pose a threat to nearby water waste. the secretary of state anthony blinken formerly declaring evan gershkovich is being wrongfully detained in russia the classification means the case will be handled by the office of the presidential envoy

for hostage affairs and gives the government additional resources to secure his release. president biden says the democratic party has chosen chicago as the site of the 2024 democratic convention. in recent months the dnc viewed chicago and atlanta as the front runners with new york city remaining in the mix meanwhile, republicans will hold their convention in milwaukee. sara, back over to you. >> thank you kristina partsinevelos we're about an hour into trading, and stocks are pushing higher reason. the s&p crossed over the flatline into positive territory. every sector up except for information technology and consumer discretionary and the dow led by names that lagged last week, the cyclicals like caterpillar and bogey,wing, home depot. bob pisani on the desk with what's moving. >> you summarized everything i like the market because cyclicals are rallying, tech taking a back seat look what's moving here. you got the metals and mining

stocks classic cyclicals. the freak out about caterpillar and all the global industrials last week has reversed again energy stocks are back here. banks have stabilized. we talked about the regional banks at the low end of the trading range last week, that stopped as well. tech is modestly under performing this is almost a perfect market because it's the soft landing crowd trying to reinsert itself. the industrials, caterpillar down 9% last week, two up days, newcore and mosaic, your material names have bounced back housing related, sara mentioned doing a lot better modest breakouts in horton and lennar and pulte not new highs, whirlpool had a couple good days, mohawk, all housing related and looking stronger the modest lag in techs, given how much they have rallied recently, it's nice to see a little rotation and it was at the open three to one advancing to declining stock

what strikes me is how gloomy everyone was, you were right, asking kostin, you looked like you were going to downgrade the whole s&p 500, and he demurred on that. but this morning, everybody is tripping all over themselves trying to downgrade their expectations brian belski, come on, he's been an optimist for years and years, this morning has a 4300 year end price target we believe it will be difficult for stocks to finish this year near the all-time highs. >> don't be cynical. >> watch when guys who are always bullish turn on you. >> that's my point. >> that's my point. >> i'm being serious belski is always bullish. >> i know. everybody. chris harvey, listen, also got a 4200 price target. we believe the risk-reward over the next six months is skewed to the downside and we expect a 10% correction, s&p down to 3700 people are tripping all over themselves to lower their earnings estimates show you the numbers for the

four quarters here it's $219 where the analysts are, but strategists, 200 to 210. see the q3 and q4, $56 q3 that would be a record number for a quarter and so would q4. to believe this number, this 219, you have to believe in the soft landing because that's what's there in the fourth quarter and third quarter, the analysts are pricing in that we're going to get a rebound because we're not going to have the downturn that's the soft landing. you have to leave that to believe in the 219 numbers and nobody wants to believe that so that's why the strategists are at 200 or 210, kostin is right around there nobody wants to embrace the soft landing. this is why, because everyone is tripping over themselves to lower the numbers, i'm optimistic and think the market has a chance to go higher on the fact that street is pessimistic right now. >> 18 times still. not at a low multiple. >> to believe that number you have to believe there is not going to be a serious recession.

kostin mentioned that this morning. >> yeah. >> 18 is not a recessionary multiple. >> no. >> not close to it 12 is a recessionary multiple. so yes, a lot of stuff is baked in right now into the soft landing from the analyst perspective. the strategists don't want to embrace it. >> i feel like last week the cyclicals sold off on the negative data and everyone worried about the hard landing scenario this week, the market is now pricing in higher odds of a hike in may, and it's almost like that is good news, because it's not -- it's pricing out the hard landing scenario the cyclicals rallying, yields are a little bit higher, dollar weaker we've changed the mentality where the market is not scared of a hike, it's embracing a hike because it means that things aren't broken and falling off a cliff. >> right your head is spinning if you're trying to make sense of this on a weekly basis the opposite, caterpillar is emblematic that the soft landing is a possibility and a week and a half ago it was cratering and

we were struggling to explain why everyone was expecting a global slowdown with caterpillar as, you know, the frontrunner for that kind of scenario. the answer is, there is -- there's no consensus on this it's just all over the place and i think you want to watch here what happens in the second quarter numbers. they're already negative and i think they're going to go further negative i would embrace somewhere around 210 for the number it's 219 the street. it's clearly going to be coming down i think the strategists more directionally are correct on this so far, remember we've been predicting cratering in earnings for six months, since october, since the third quarter of last year the cratering has not happened there's a flattening, a level. we're even right now, 2023 numbers are equal to 2022. that is on an earnings recession, that is not a disaster. >> revenues are still growing? >> revenues are still growing but coming down as well. we will talk about that later in the week the point is flat is kind of the

victory for the bulls. >> flat is the new up. >> there you go. >> said that before. >> 60 the new 50. >> bob. >> 70. >> or 70. >> or 80. >> don't point at me by the way. >> pointing at you. >> pointing at me. >> i'm watching you. >> he decided that retirement wasn't for him he came back. >> i guess. >> sara had me retiring. i was on vacation. >> thanks. bob pisani while investors will get a fresh read on inflation with cpi some progress being made not from prices, but the joe mhn job market steve liesman has more. >> yeah. some potential good news coming for inflation from a recent influx of workers into the job market more labor supply could be taking the edge off wage gains and lead to less inflation in the service sector the labor force has grown by 2.2 million the past four months some of that, the january statistical adjustment, but the past two months look to be real with 800,000 coming in in two

months that's pushed up the participation rate with the prime age workforce hitting a milestone of surpassing the prepandemic percentage level goldman sachs writing, labor supply is now fully recovered to trend after declining substantially in the early part of the pandemic and under appreciated success. so why are people coming back in no single reason the reasons could include the idea that pandemic savings have run out, high inflation forcing people to work more than they wanted to, higher wages is a big thing with the opportunity cost you're leaving money on the table. the influx of workers creates the possibility that u.s. is at or near a wage level where labor supply and demand are more in balance. that could mean that wage growth can decelerate from here and that's exactly what's been happening. it's been the trend, measure wage growth fallen from a high of 7.8% year over year in september to 6.9% now. that is still too high, and too

high for the fed it's going in the right direction and recent data show it's actually falling more quickly. the key is the impact that greater labor supply is going to have in the service sector where wages are such a big part of the whole cost structure and which fed chair, jay powell, has been watching most closely. more supply and slower wage gains, that could mean service sector inflation eases maybe not right away tomorrow, but it looks like something that's in the works for coming months, carl. >> that's a fascinating look thank you. steve liesman today. alibaba unveiling its chatgpt competitor we're going to bring you details that we got after the break. we're back in 2.

chinese tech giant alibaba finally rolling out its rival to chatgpt. eunice yoon has been tracking

that action. an important story and joins us with more. hi, eunice. >> hey, carl well alibaba's version translates to truth from 1,000 questions. the company says that the chatbot is going to be deployed first with its workplace slack-like app and smart speaker voice assistant and integrated into the rest of the operations. no time frame on that. the chat bot can take answers and questions in english and chinese. corporate clients have been experimenting with it since april 7th. the feedback has been that alibaba's chatbot is quite similar or on par with baidu's erniebot it's been able to do somewhat people would see as limited tasks but important as an assistant role such as writing

e-mails or drafting business proposals, those sort of things, but still very much not as adchanced as chatgpt so the company's stock actually got a pop in hong kong on this news, but then quickly we started seeing the stock fall off quite a bit. that's because the chinese government had issued a new set of draft rules that govern generative a.i. services the cyber watchdog said that they're going to conduct security reviews before generative a.i. services would be able to go live, and some of the requirements are that these tools must embody core values of socialism, shall not subvert state power, respect intellectual property and accuracy, and that the providers would be responsible for the content generated. the authorities are seeking public feedback by may 10th, but that last point where it's the providers but not totally clear

has to do you mean alibaba or do you mean one of the sellers on alibaba, that's using a chatbot tool, just raised a lot of questions over here. >> eunice, thank you eunice yoon. back here in the u.s., a.i. concerns also on the rise. legendary tech investor ron conway gathering execs tomorrow to address a.i. policy our next guest has warned about the dangers of technology for years, believes the risks will not just drive us to destruction, but insanity. virtual reality pioneer and microsoft scientist jerome lemire joins us. great to talk to you it's been a while. you tend to think philosophically about these issues where are you on the dangers of a.i. >> yeah. you know, your introduction to me was more alarming than i would choose i think the dangers of a.i. aren't in the code itself but in the way we think about it.

if we think of a.i. as like a new kind of person presented to us, and we trust it too much, and we let it have the power over us that another human could have, we can make ourselves insane enough to do damage i think if we can use it to use it in kind of a way we're not so impressed by it but as another tool, it could be great. it's about us and our attitude you might think we're doomed because people have terrible ideologies, and that remains to be seen. the best case is that these programs help people achieve things with computers that they've found difficult because computers have been too rigid. like how many times have you been to the doctor's office watching somebody behind a desk stare at a screen and struggling to get something just right, and that little problem doesn't really help anybody, and we can fix that, i think, or mostly fix

it that kind of thing excites me. that's where you get productivity the kind of thing that bugs me is somebody saying, oh, great, chatgpt, talk to my date for me, so i don't have to learn to talk to my date that kind of thing, you really are not going to be the winner at the end of that that's like not a good use so it really has to do with you taking responsibility for being a human and doing everything necessary to be a human. you know, if you give that up, yeah, you can use it as a way to get stupid you really can but i don't think we have to i'm actually kind of feeling positive, that is okay to say? >> yeah. >> i mean, i don't know. i actually - >> what about when -- what about when the machines get smarter than we are? eric schmitt was on "squawk box" this morning talking about this very idea, this sort of where computers evolve faster than humans, it could happen, it's sign fiction today, it won't be

for long, they can learn everything about the world and feed it to themselves and are we doomed >> i've known eric for decades and a lot of my colleagues in science fiction, grew up on science fiction, i mean a lot of colleagues in silicon valley grew up in science fiction, we have the matrix movies and terminator and commander data and these images are so powerful we think in those terms. remember what this code is, so, you know, what gpt does is takes what people have done and a better way of mashing them up. not so much that it's thinking, but taking things people have done and combing them in ways so that you can get a compound effort from other people that's cleaner than you used to be able to and more immediate. that's all it is all you're looking at with the a.i. programs what is other people have done it's just us it's just a new kind of social cooperation. but i know the science fiction

idea is so appealing and strong people just want go there because it fulfills their fantasies from when they were kids you know -- >> they're nightmares. >> well, you know the funny thing about it, there's a weird t two-edged kind of appeal if the fantasy when you were a kid that you saw in all of these movies was that a.i. would take over and destroy humanity, why would you want that? the thing is, being able to relive even if it's -- even if it seems very negative, entering into the science fiction of your youth has this kind of appeal, right. you're the one actually doing it, actually having this power, and i -- it's very hard to overcome that. i mean, the science fiction of our youth is almost like, i don't want to use the word religion, but like this deep culture in us and becomes our vocabulary and way of thinking

but it doesn't really have a lot to do with the actual technology we're doing. the thing that really bugs me about it, is if you want to think of it that way, it kind of blinds you to how it can be useful if you're thinking about oh, this will become super intelligent when all it's doing is mashing up what people haved how you can use that mashup to good effect. the fantasy actually gets in the way of the productivity and the benefit. and yet it's so deep i mean, almost every technical young man grew up with this stuff so it's our culture. you know, what can we do with that i just try not to pay too much attention to that stuff and try to focus on getting it to help people. >> i think that's why women should be in charge of this technology, actually if we're going to go deep into this realm, which i think is really interesting, you know, there are more pressing ethical

concerns around, you know, we don't want them to be racist, we don't want them to be mean. >> sure. >> they're going to be bramed by people there's a fear that companies like microsoft, which i know you're not speaking on behalf of, but you're part of, and google and others are just moving with speed instead of tackling some of the broader, ethical concerns it might be too late by the time we get there >> yeah. that's a fair point. and friends of mine, friends of ours circulated a petition recently asking for a pause in development, but in a way that didn't really make sense the reason i'm not as worried about this is i think a lot of the fears are based on the science fiction perception instead of what there actually is let me address a couple of things the fear about bias is very legitimate

and the reason is what this technology is, as i was saying before, it's a mashup, it's a giant mirror of what people have done if what you're mashing up is very technical things, like if you take in a large number of documents related to tax law and out of that you can get a quick aproximate mags of how to address a tax situation, that's pretty likely to be both useful and pretty straightforward if you ask it, once again, to give you opinions about your gait, then it's going to draw on all kinds of weird stuff that happens to match up with the word choices and the word order you used some of it will come from fan fiction, some will come from soap operas, some will come from random social media posts. you might get pretty weird stuff and it might reflect all kinds of biases from the human race, that's us. that's us we're looking at in there. but can i address another problem that is a real one, which is this question -

>> really quick, if you could. >> sure. if we're going to displace people, if we're going to cause unemployment, very real concern. there's pay way around that. the way around it is to keep track of people who made special contributions that went into the data and give them royalties if you create an image that turns out to be really important to somebody's slide presentation and they make money with that, you ought to be able to get a royalty. that's a path to people being motivated to improve what goes into the model so it's not -- it's less random and its output will be less random. it's a way to create dignity, it's a way to create people making a living in the future where we like these tools. and there's no reason why we can't have capitalism in ai at the same time. that's the way to do >> we got another minute or two because this has been an interesting conversation a couple people on twitter

getting involved saying when you're talking about what people are mashing what people have done, it's a good way to describe how a brain learns as well why would this behave differently? >> a lot of people say that. see, i'm not really worried about this question of whether it's similar to a brain or not once again, that's a fantasy question i just don't see that has much to do with productivity. but what i will say, look, if you want to make a society that's good for people, you probably have to believe that people are special, you know ultimately none of us really know like, we don't know if there's something special about consciousness or brains or any of that stuff. i tend to think we should error on the side of people being special if we want to make an economy that serves people it seems obvious to me that's what you call a pragmatic argument you know, in an absolute sense, nobody really knows. you know what the word is, it's a matter of faith. you can believe computers and brains are similar or maybe they're different.

we don't know at this point and anyone who pretends to know is letting their imagination get ahead of the science >> jaron, really interesting i smell a ted talk and hopefully you can do this again on this issue. >> we have a lot of great women in leadership roles in ai. and i wish there were more i kind of agree with you that was a good comment. >> thank you jaron, appreciate all your comments as well >> okay. take care. >> yeah. i never get tired of these conversations. let's move on, though. are you feeling more financially stressed than ever not just about ai. well, you're not alone, according to results out of a new cnbc your money survey sharon epperson joins us >> rising prices, rising rates have the majority of americans anxious and confused about what to do with their money seven out of ten adults, 70% are stressed about their personal

finances and 57% of those making $100,000 or more per year are financially stressed, too. that's according to the new cnbc your money financial confidence survey conducted by momentum released this morning. more than 4,000 adults were surveyed during the last week of march, and most of them, 58%, admitted they're living paycheck to paycheck, even among those making six figures one-third said that's how they're living the main factors for the six-figure set are the same stressors for all respond ebts inflation, economic instability, interest rates rising and a lack of savings there are some key differences among respondents. more women are feeling stressed about the personal finances than men with 72% of women saying they are financially stressed compared to 67% of men women are also more likely than men to say they're living paycheck to paycheck and have no emergency savings. women were also more likely than men to be the primary or sole

decisionmaker when it comes to household finances you want to be sure to tune in to women and wealth this afternoon, a cnbc your money event. it will happen at 1:00 p.m. eastern time we'll explore the ways that women can increase their income, save for the future and make the money of current opportunities so, register now at cnbcevents.com david? >> sharon, thank you sharon epperson with some sobering results there, particularly how many people living paycheck to paycheck. "squawk on the street," well, this hour's over but there's another hour yet to come sara and carl are two and a half minutes away izon. (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,

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welcome back to "squawk on the street." setting the agenda today, economist david rosenberg on why another rate hike by the fed is the wrong way to go with the jobs picture screaming recession ahead. gold has been a shining star, up 10% and hitting a one-year high. we'll speak with the ceo about the future of prices and potential consolidation in the sector. ubs says they see 50,000

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