bastian. cnbc learned twitter will let users access stocks and crypto and other financial a assets with a partnership with etoro. the feature rolling out today. it is thursday, april 13th ugh. the 15th in two days. "squawk box" begins now. good morning welcome to "suebquawk box" on cc i'm melissa lee along with joe kernen we have andrew ross sorkin live with us from seattle the >> melissa, we have a big show

in seattle i'm at amazon's headquarters we will speak later to ceo of amazon andy jassy we get a state of the state of what is going on with amazon and the broader economy. that is touching everything from the consumer through amazon that we use to aws and the world of business-to-business we will speak to him about that. we have interviews from the leadership summit as well. this "squawk box" where i was here and becky is in tokyo we have the ceo of formula 1 here as well joe, this guy never holds back palantir ceo alex karp is on the show you will know what is going on

in the world of a.i. and national security and china and so many other variables. >> we will not need national security the whole defense spending thing is so last century maybe it is still important. are we getting that feel russia and china and middle east i think you have been correct in saying he has been -- it is an interesting company. just from a profit perspective from some of the things they do to help the united states in what is going to be an ongoing global position. it is never going to ease up, i don't think. we keep thinking we're beyond war and conflict and an the next thing you know, we are right in the middle of it we are getting numb by it. here we are.

thank god for guys like karp right? >> you know, he's doing important work for the country he is doing important work for allies and doing important work for businesses across the country and other parts of the world. we will talk to alex you will hear from him and we talk to andy jassy live in seattle at amazon's headquarters >> you have everything in the world covered. amazon and everything amazon doesn't do, palantir, basically. >> they run the world. >> sort of you let amazon do everything else then you got the defense there are other things it is -- >> we have that covered because we have ed bastian on travel we have a bunch of voices. >> a lot ahead. in the meantime, let's check on the markets and how we are

shaping up u.s. equities ahead of the busy end of the week with earnings out today. tomorrow, we focus on the banks. we focus on ppi. s&p opening up 8 points higher nasdaq higher by 7 and dow 27 points higher. the treasury at 2.22 let's get back to andrew with breaking news from amazon. andrew >> you know, melissa, one reason we wanted to come out here is because every year there is an annual letter which was written by jeff bezos starting in 1997 andy jassy's letter is crossing the tape he reflects on a challenging year for the company which

27,000 jobs were eliminated. these are things we will talk to him about. jassy remains optimistic about amazon and says the company will emerge from the challenging macroeconomics time. it is a stronger position than when we entered it he says amazon is still focused on investing he reflects on 2008 as the reflection of challenging times before amazon would be a different company if we slowed down investment in aws in 2008 and 2009 change is always around the corner sometimes you invite it in and sometimes it comes knocking. he compares key areas that are important here of investment in what aws did for amazon back in 2008 including the low earth orbit satellite system and healthcare for nearly $4 billion.

jassy saying amazon is focused on international expansion and investing in the grocery business and amazon business that is a big business we will talk about p that with i as well. he warns of the impact of the environment writing, quote, aws faces short-term headwinds as companies are cautious in spending with the macro economic conditions ends the letter with the topic we talk about every day. a section devoted to a.i he writes, i could write a large letter on a.i. like chatgpt, as i think they will be that transformative core to setting amazon up to invent in every area of our business for decades to come we will talk about that and

more lots to kick around in the letter and discuss it is an optimistic note for a time which has been challenging for just about every business. >> based on the highlights, andrew, with ahat stood out to s the investment in aws in the downturn the question is would there be another business they invest as a growth catalyst going forward that they are investing in right now? >> i don't think we will know. maybe there will be a surprise investment wheth what you will hear about is the a.i. piece amazon has been involved in a.i. and machine learning and models for a long time. when you start to think about it, alexa.

siri on your phone they were first there. they will see how it plays out a lot of this is not just on the consumer end, but the back end of coding and the like we will talk about that and that is the aws side of all of this you know, as i looked through the letter, investment in grocery. we talk about whole foods. to think about what that looks like from the amazon perspective. amazon fresh and the like. there are big plays going on including internationally. we think about the united states if you really think about how amazon has expanded the past couple years abroad. >> we will get to where we say order what i need this month, alexa. i hope they work on the entertainment side we will have a lot of free time if we never have to manage -- >> they have football now. what do you want >> right really, what do we have to do if

a.i. just controls every aspect of our lives we can watch amazon. >> not control aid. >> what is this show "daisy jones and the six." this is one of the -- you heard about it get on it. joe, you are asking me for new shows. amazon prime "daisy jones and the six." watch it i'm telling you, it's a winner >> i haven't done "succession. everywhere i look, they are blowing all of the stuff i saw it what are they writing about him for? great. thank you. >> i know. the third episode of "succession" is great. >> i couldn't escape it is too late everybody knows. >> don't tell the audience >> it ruined it for me my son said don't look at

anything i said i won't if you hit trending on twitter, it is right there. >> it is so good don't do that. >> i'm not doing everything. don't look at twitter then speaking of twitter -- >> "daisy jones. >> i'm telling you, it is -- i'll give you the review later i don't know if andy is watching we'll see. speaking of twitter. cnbc learned twitter will let users access stocks and crypto with the partnership with the israeli company etoro. the feature is rolled out today. it will allow users to view market charts and buy and sell assets with etoro. it will expand the hash tags and link to the platform where you can buy and sell the assets. coming up, a busy morning

ahead. we get the latest quarterly report from delta airlines at 6:30 a.m we have an exclusive interview with ed bastian in the 7:00 hour. tomorrow, don't miss the interview with austin goolsbee >> about time. >> you are watching "squawk box" on cnbc. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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a dimmer outlook from the fed in the recent fmoc minutes the fallout is like through to tilt the economy into recession later this year. nothing the fed has done, by the way, it is the other stuff the meeting summary said the staff projection at the time of the march meeting predicted a recession over the subsequent two years. let's bring in barry knapp of ironsides. thanks for joining us. it doesn't mean a lot to a lot of people, barry you talk like george c. scott, but your company is named after raymond burr it is all confusing, but welcome. >> good morning. >> there it is

the patent speech. i was struck by how quickly the markets reacted to, i guess, a slightly cooler number and initially everything is rallying we saw the stock market rally and bonds rally and yields fall. all reverse itself once we realize the fed is accomplishing what it intended and we realize what it intended was basically a sharp slowdown we get what we want with the pivot, eventually, but we realize, wow, we may get a mild we s recession. >> i think the real disconcerting point of this is they seem to get to a particular point of rates come hell or high water. chairman powell laid out the framework on november 30th in

his speech he clearly pointed to core services and shelter as the real insidious part of inflation. the idea that waging growth in the services sector would push prices and become inn tract iblg when he spoke the words, that narrative has fallen apart services sector consumption in the third quarter slowed to 1.6% in the fourth quarter. it looks like it slowed further in 2023. wages have come down in the services sector at least 1.5% through that time period that core measure he was talking about was 9.5% on the six-month annual basis it is down to three. that was part of the number yesterday which was the only reason we're getting any push in core inflation right now is the goofy housing measures or shelter measures

you know, they had this narrative. this is what we are worrying about. it got better and there is intent on continuing to raise rates. you intimated, joe, the banking problems are the solely of the fed's making i as adamant at the beginning of the process the way they eased is asset purchases if they insisted on tightening by going passive and aggressive with the rate hikes, they cause deep inversion of the yield curve to cause peril in the business banking model that is what they have done. they created the big, fat tail risk of the serious slowdown in bank lending and bank credit which has been evident in the last couple weeks of the data and they created a worse outcome. i understand why they don't want to admit it was their fault, but

respond to it. it calls for a pause perhaps they will have to reverse some of the hikes. again, they just seem intent the interview yet was interesting in particular. sarah seemed to know more about the numbers than be harker did there is no acknowledgment of the instability in the banks which they created. >> money will go where you don't want it to go. the fed was faced with twin crises over a period of a decade and people would say what would you expect them to do. i don't know whether you say now the arsonist is putting out the fire, but i guess you can make that case. the alternative through all that fed assistance during financial crisis and pandemic -- what was

the alternative to what they did? >> the initial crisis related asset purchases allowed the banking system to de-leverage. i agreed with that back in the day. what happened to them is what is happening now in the fall of 2010 and 2011 and 2012, we had the pattern with the data distorted by factors the labor market would weaken in the summer and strengthen in the winter it was all unnecessary they could have allowed the economy to stabilize it was slowly stabilizing. they have done the same thing again, but reverse where they got caught by strong january data it wanted to tighten policy

faster and then really cause the banking crisis they have tried to manage the economy to two groo great an ext i agree what was happening in the crisis was necessary and during the pandemic, they had liquidity problems with the operation of markets and basis with mortgages and treasuries. they just kept going all that liquidity that was injected in 2021 when you look at what happened in 2020 and 2021 to the banking system, between the treasury and the fed, they created $3 trillion of liquidity in excess. the banks had nowhere to go with that cash. they bought $750 billion of treasuries in 2020 they bought $500 million of mortgages. the bonds are trading 80 cents for the treasuries that is the nature of the

problem. there was nothing else for the banks to do with that money. it was a mistake >> yes >> the only way out is ease policy >> are you out on your deck? the sun's not out. >> not yet, joe. we are transitioning to golf season >> is that lion's head. >> yes that is from my deck >> over the other way? camera right beaver creek >> oh, that's the beaver creek to your camera right is vail >> that's upper mid vail >> what a place. okay very good. barry. >> see you live next time. >> do you care if i call you barry knapp?

lose the "k. why have it? >> the germans insist it the germans in switzerland pronounce it >> okay. joe, coming up in just a little bit don't miss the interview with amazon ceo jaandy jassy he will join us on the back of the shareholder letter we get earnings from delta airlines and interviewd e bastian. "squawk box" is coming right back with all of it. the sm benes of retinol. are now for your whole body. plus, fast-working crepe corrector diminishes wrinkled skin in just two days. gold bond. champion your skin.

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new filings in the u.s. virgin islands case against jpmorgan chase related to the business with jeffrey epstein. it reveals testimony from veteran executive mary erdos over the accusations of jeffrey epstein. we have have eamon javers with . >> reporter: the documents reveal new testimony from the head of the bank asset management department. she said jpmorgan chase was aware by 2006 that jeffrey epstein was accused of paying cash to have underage girls and young women brought to his home. concerns were raised in 2006 and jeffrey epstein was convicted in 2008 jpmorgan chase continued the relationship as a client with him until 2013 the filing reveal that jpmorgan chase compliance staff brought

up concerns. in 2010, one official said epstein quote should go. in 2011, other staffers discussed news articles with epstein compared with trafficking of human girls that was the suit which alleged the bank obstructed the trafficking victims protection act. epstein's large withdrawals drew the attention in 2006 of officials who routinely withdrew $40,000 to $80,000 in cash the money was for fuel and landing fees for planes and during years when jeffrey epstein was under house arrest according to the suit. jpmorgan chase declined to comment on the filings jpmorgan chase's ceo jamie dimon

was interviewed last week and asked if jpmorgan chase should have acted more quickly rather than waiting years dimon replied hindsight is a fabulous gift. >> eamon, what inning are we in? how does this resolve itself he's dead. i don't know how do we put it behind us how does jpmorgan chase? >> it's going to be a while yet with the case. we saw the testimony from mary and that information was redacted it was in filings. now unredacted now new information. we will see jamie dimon go under oath at some point and be deposed in this case that could reveal new information as well. this is a tough one for jpmorgan chase to shake it goes to actions that happened years ago. a paper trail. the bank had a business

relationship with jeffrey epstein for years after the bank knew epstein was guilty of sex crimes the question is what ultimately does justice look like now that epstein is dead and jpmorgan chase moved on the question is how does this case resolve i don't know the answer, joe we will get new information with the depositions and discovery in the case. >> who owns the island now i guess we need robert frank for that was it sold? do you know? >> that's a good question. i'll call robert and ask him it might have been seized as part of the overall assets and a process to distribute assets you know, reallocate some of that to his victims. maybe it was sold in that process. i'm not sure. >> it is a magnificent part of the world. >> who would buy it?

it is gorgeous, but a cursed island. >> it is you have to think that it is like buying the amitiville ho house. >> it won't feel as great. >> you know, the stepfather. you see that you can't live in that house he's from westfield. thanks, eamon javers we have to get to phil phil lebeau joining us with the numbers. >> joe, this is a miss on the top and bottom line from delta airlines for the first quarter the company earning 25 cents a share. nickel shy of expectation. revenue shy of estimates coming in at $11.4 billion delta says the q1 miss and when you ask what is behind the miss, they say they had a pointl less

of capacity because of storms and cancellations. they made this clear to analysts in the jpmorgan chase conference a month ago. we talked to ed bastian on the set. that did not resonate. delta earnings 25 cents a share. the street expecting 30 cents. numbers within the numbers the operating margin at 4.6% compared to q1 of 2019 revenue per seat, up 16% compared to 2019 now the other reason we see shares come back after the sell off. the q2 guidance is bullish than analysts are expecting the company expect to earn $2 to $2.25. revenue expected to be up 15% to 17% due to strong demand for summer travel season the street is at 14.7%

guidance above the street. record advance bookings for the summer the company's full year earns is 5% to 6% a share not only with the first quarter miss, but the guidance for the second quarter coming up in a half hour, we will talk with ed bastian. guys, i know the street is jet af jittery about travel this is likely to put a little bit of pressure early in the trading session on airline shares with delta airlines missing on the top and bottom lines. guys, back to you. >> it is up 2% >> they are focusing on the guidance >> the outlook is bullish, you would think. >> very. they are way above the street. >> it will would be a huge summer, i think, phil, no doubt.

>> you are right >> looming as the fed -- i didn't know there might be a recession until the fed said there might be the staff and the fed. i don't know no surprise on them. wow. i wonder what they saw look forward to the interview with mr. bastian thanks, phil. remember the delta lost in the session with american airlines yesterday we are watching shares of merck. citigroup upgrade the stock. now goes to a buy rating raising to $130 a share. bullish because of the raised forecast based on the cancer treatment outlook. wharf watching the shares today. "squawk box" will be right back.

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good morning welcome back to "squawk box" live in seattle this morning at amazon headquarters. we have an interview with andy jassy. futures are a mixed picture. nasdaq up 33 points. s&p up 4 points. dow down 5.5 points. i was at a leadership summit yesterday and sat down and asked about the success and growth of the league here in the united states take a look. >> we opened up a social media platform we try to engage with our fans we try to speak with a different narrative about formula 1. we talk about formula 1 every day. before we come here for the weekend and leaving the u.s. and say i don't know why these americans don't understand formula 1. we changed the mentality

we see risk terrific growth tod. i believe we are scratching the surface. >> it sis a different demographic. the crowd watching daytona is not the same crowd watching f1 >> it is much younger. we havhave a lot of women follon that it is people connected with the drivers and connected with the world and trying not to talk about only the things of racing and talking about behind the scenes and drama that is fascinating in formula 1 that was the moment. >> the next piece of it, that feels like the major transformation get behind the scenes to create the drama. is there a next step in the evolution? >> i think we don't have to stop that is very important they did an incredible job the biggest thing that happened

is for us to convince our world that this is the way to go we were traditional a couple of years ago. >> take us inside the room what was the decision on netflix? >> as always, our people which is owned by liberty media. chase was the ceo. we wanted to do it it was very good >> was there any push back >> oh, yeah. 100% the first season we had ferrari and mercedes push back that is not what they wanted to do now everyone is on the show and talk about the power of our sport in a different way >> you are making efforts to transform part of the sport itself there is controversy around that with practice and other things what are you trying to do and how will it change the game? >> i don't think it is

controversy. it is trying to understand the future i'm in the sport 30 years. i tried to watch with a different angle what is happening. what i said is that if you see people come to our event, we have big crowds now. we have 11 races last year and more than 350,000 people come. >> these people are paying $7,000 to be there >> they pay a lot of money that's the reason we need to be respectful we have to give them a unique experience that is why i believe being on the racing weekend with a lot of free time with the drivers and team to practice and achieve or doesn't give them what it should. >> vegas vegas baby what will happen >> vegas is a great responsibility because i remember two years ago and try to hammer down the weekend

there. it has not been an easy task not everyone understood what formula 1 was. now all of the communities is embracing the project. we have a lot of things to do. we have a great group of people there and run by the ceo of the promoter. >> how much thewill it cost >> on the other hand, how much will you earn? that is the most pofrnimportant thing. >> ballpark? >> a lot of millions >> a lot of millions ford and audi are coming on board. this is the time you are building new sustainability goals. how important is it bringing them back into the fold? >> i think it is important the reason they are there is i believe we are stable on the path of growth we will become neutral until

2030 we will use sustainable fuel in 2026 formula 2 and formula 3 racing we have already. that is the key of our success in that respect. >> there you have it perhaps one of the fastest growing sports in the united states a business that a lot of people counted out for very long as a european sport f1 is taking the united states by storm vegas, baby, as i said, joe, is coming up in the fall. it is a big investment for f1. it is likely to attract a lot of folks and a lot more attention >> i'm a potential fan. i could be drawn into this, especially with the vegas connection do you remember, andrew, the days where you look up the highest paid athlete and michael schumacher is on there who the hell is that a formula 1 driver

i was fascinated about electric cars >> i don't think they are electric cars. they do have a plan, you know, starting in 2026 and through 2030 in terms of what their goals are which will change these cars materially. electric is far out. interestingly, that is pressed or the push for that was coming from the fans. >> yup it is a rich group you know what? for some reason today, you look very, very wealthy to me in that sweater. yeah >> and the pocket. >> it is not a sweater we haven't done the sweater of the month in a while that is a powerful statement and a good look. don't you think? >> yeah. >> i wish i could tell you it was a fancy sweater. by the way, definitely on the

board. >> that is what you are saying you are making a pitch i wish i could >> those are pricey sweaters this is available to anybody absolutely is it available at amazon? we have to make sure this sweater is available >> it is a full sweater? it is not a vest or dickey >> those are so lame >> is it a vest or something else >> we do have -- it has been years. we have to implement that. i'll talk to jassy about the sweater of the month club. >> i want to be part of it >> there is an affiliate link for you. coming up, behind the scenes look of the amazon same-day delivery network it is fascinating. check it out coming up right after this

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welcome back to "squawk box. we are live in seattle this morning at amazon headquarters

we will speak to andy jassy in a bit. after amazon doubled the size of the fulfillment network, it is changing the network to what is a regional network model to make it more efficient. in the shareholder letter, jassy saying amazon is on track to have the prime delivery speeds bringing more next day and same-day deliveries to customers. on tuesday, cnbc toured the same-day side outside of seattle. we spoke to the vice president of transportation and member of the amazon team and asked about the same day sites logistics model. take a look. >> this is a site that offers local customers access to hundreds of thousands of products to order and get delivered in as little as a few hours. what is unique about the site is we store packages from one

facility that lets us get items to customers in a few hours we think customers love that service. >> guys, we will get stuff literally that much quicker. he explained the technology that makes the day sites efficient. >> there is really two parts of the technology one is what happened inside the four walls of the facility and from the robotics that we used to make sure that items can be stored quickly taken back quickly that enables us to drive the customer orders to them, really fast pace. and this technology that is really focused on deciding what items customers want to buy, and making sure that we have those items available in this facility for them to order so we can deliver them quickly. >> we're going to have a lot more from amazon throughout the morning, including our exclusive interview with the ceo andy jassy. that's coming up at 8:30 a.m.

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earnings season kicks off tomorrow joining us with a preview is scott seavers, senior research analyst at piper sandler great to have you with us. you look at how the carry trades, it is trading at the low levels since the banking crisis began. is there reason for that >> that's a good question. it feels to me like things have certainly calmed down a bit since a few weeks ago and that's good unfortunately it is going to be a long road ahead, hopefully the initial shock has passed but maybe we're starting to get past that. with earnings starting tomorrow,

we'll finally get our first glimpse into how individual companies have fared, and bolstered their balance sheets since the onset of all this turmoil last month hopefully that will reintroduce some confidence back into the system, but, again, there are going to be in all likelihood a lot of changes here that could be sort of long lasting. they'll have impacts on growth, on profitability, et cetera. so it is going to be a long road >> bolstering their balance sheets and keeping deposits in house or bolstering deposits, that all sounds like expensive propositions in general for banks. which banks have the biggest question marks over them in your view >> yeah, so, you know, the good news is when we started the earnings season tomorrow, we'll start on a high note with some big banks like jpmorgan. maybe i'll reframe the question and go with the safer havens, big name like jpmorgan which we have liked for quite a while, that will likely be a net beneficiary of all this turmoil. having been probably upstreamed a lot of customers and deposits.

so we'll be watching those numbers really closely here over the next couple of days. getting a little probably choppier as we get later into the earnings season and we get some of the smaller banks that investors will be trying to figure out, you know, how much have we been able to keep from our deposit base and what is the cost to doing so. >> for jpmorgan, that gain deposit, keeping the deposits could be costly if it erodes margins. do they want to keep the deposits and doesn't it show people it is easy to move money around. they move to jpmorgan initially, but then move to treasuries or elsewhere? >> yeah. undoubtedly. i don't think jpmorgan or b of a or citi or wells fargo are polly annish to believe that the money that flowed in over the last several weeks is necessarily permanent. they probably believe that things have moved for safety now they'll likely move for price later on so i doubt that jpmorgan is out there saying, look, we got this massive inflow of deposits, we have to go make a bunch of new

loans with that. rather, i think what they'll try to do is keep at least some percentage of that new money in those new customers as permanent ones but by no means do they think that's going to be permanent money in totality. in a sense, you can almost say that that cohort of the largest banks is acting a bit like an xo central bank at this point but if i were one of those management teams, i would want to keep as many of the customers as i could and i think one other factor is that for those largest banks, you know, customers moved them on the perception of safety. so it is quite possible that the largest banks could actually have a pricing advantage going forward insofar as customers think, hey, if the price for safety is going to be there, i'm not going to be paid as much as at other institutions. >> thanks. teiewivep, our exclusi inrvw th ed bastian. "squawk box" will be right back.

good morning stocks looking to get back on track as investors gear up for a fresh round of inflation data following that cooler than expected cpi report. and delta out with quarterly results in the last hour

and the ceo ed bastian will join us in a first on cnbc interview in moments palantir's alex karp talks about the future of ai, china, and the state of business as the second hour of "squawk box" begins right now. good morning, welcome back to "squawk box" here on cnbc i'm joe kernen with andrew ross sorkin and melissa lee u.s. equity futures don't know which way to head at this point. we're barely up. nasdaq is up a little. yesterday initially bounced on what was a little cooler than expected inflation data. but it was, like, there is enough in there for everyone i guess you could say maybe. maybe a pivot is down the road but why are we going to pivot?

because maybe a mild recession is down the road as well so there is something for everyone the fed could still go 25, which is nobody likes that, really, if you're long. and in the face of what looks like a likelihood of a slowdown or a mild recession, so it is like a double whammy you got possibly the fed is still on course. and it is already -- we're already feeling the effects of a slowdown i don't know what that means for stock traders at this point. but hurts the multiple and then as far as earnings, you think maybe earnings estimates are too high it is a double whammy, but oil somehow bucking the trend. i looked at it earlier my eyes are starting to go i said, is that a 3, it was an 83 when i saw it earlier 83, solidly above 80, we'll see if that holds. yesterday, gold and crypto immediately spiked as the dollar index fell everything was an immediate

reaction to those numbers we got at 8:30. a lot of it were reversed by the end, but bitcoin is still above 30,000 andrew >> meantime, joe, breaking news in the last hour here in seattle. amazon ceo andy jassy out with his second shareholder letter, reflecting on what was a challenging year for the trillion dollar company, which 27,000 corporate jobs were eliminated as part of the series of cost-cutting efforts. jassy says he remains optimistic about the company, and says that it is going to emerge from this challenging macro economic time in a stronger position than when we entered it. despite efforts to tighten budgets, he says amazon is still focused on investing in the future and so many new businesses he reflects on all this as a way of looking back, for example, at 2008 he writes, amazon would be a different company if we slowed investment in aws during the 2008-2009 period change is always around the

corner sometimes you're proactively invited in sometimes it comes aknocking he compares key areas of investment to what aws did for amazon in '08 including the low earth orbit satellite system that they have been developing, investing a lot of money in, and healthcare as well, following that big acquisition of one medical for nearly $4 billion. we'll talk about all of that with him jassy also says that amazon is focused on further international expansion and planning to continue to invest in grocery. they own withhohole foods a business that is probably under the radar for folks, amazon business. we'll talk about that with him as well. does warn about the impact of the economic environment on the aws business you were talking about prospect of a recession listen to what he said aws business is something he built under his own leadership here at amazon aws faces short-term head winds, he writes, right now as companies are being more

cautious in spending given the challenging current macro economic conditions. he ends the letter with a topic we have been all fascinated by, devoted to artificial intelligence he writes, i could write an entire letter on large language models and generative ai as i think they will be that transformative to amazon's future and setting amazon up to invent in every area of our business for decades to come we're going to talk to andy jassy about all of this. we'll be speaking to him live in the next hour and get his take on what's happening in our economy and what's happening with amazon, joe >> okay, great look forward to it let's get to dom chu with a look at this morning's premarket movers hey, dom. >> good morning, joe let's kick things off with a check on shares of alibaba, which some people call the amazon of china. this is, of course, the chinese e-commerce and web services giant. it has been moving between gains and losses its u.s. listed shares are up about 1.5%, 2% now, just around

320,000 shares of volume regulatory filings from softbank indicate it has sold the bulk of its stake in alibaba, according to the financial times with the sales, softbank will have a less than 4% stake in alibaba. that initially drove some downside action in baba and swung to a slight gain in the premarket. we'll also watch shares of delta airlines, up nearly 5% premarket, 150,000 shares of volume it was a definite mixed report profits fell shy of expectations on less than expected revenue. but delta forecasts current quarter profits and revenue growth that was ahead of analyst estimates, which would indicate that maybe travel demand remains strong despite economic concerns and other industries so, you can see those shares up about 4% now by the way, stay tuned as delta ceo ed bastian joins "squawk box" to talk about those earnings results and what the future does hold for travel, especially that lucrative

business demand. ed bastian on in a few moments and we'll end with a check of shares on merck, higher, helped in part by analysts at citigroup. that upgraded that pharmaceutical company to a buy rating with $130 price target based on among other things better expectations for key cancer and heart disease franchises so merck shares up, giving a little positivity to the market so far today back to you. >> very good thanks, dom. check back with you a little bit later. our next guest says this is by far the best time to be an active manager and there are plenty of opportunities to buy cheap stocks let's bring in the head of u.s. equity and esg strategy at b of a securities what are you looking for out of earnings season? it sounds like you're preparing for a sharp cut in terms of forward estimates. we have already seen first quarter estimates come down by 6% since the year began, which is much sharper than normal. you're thinking that forward

guidance will be cut as well >> you know, i think 2023 estimates are still a little bit too high and we're expecting to see about another 10% downside to full year estimates for the quarter we have seen analysts get pretty aggressively negative heading into the quarter, so i think we could actually see earnings meet expectations or maybe even beat them a little bit, but i think the focus this quarter is going to be on guidance, on how credit conditions are affecting corporate spending i think those are the key items that folks are listening for but, melissa, i'm glad you pointed out that this is the best time to be a stock picker, because what we're seeing and hearing from our analysts is that within every sector, there are puts and takes for example, within materials, we're seeing strength inper. within financials, we're seeing

different trends for brokers versus alternatives for bigger banks versus small banks i think it is a very bifurcated market with lots of opportunities at a security level. >> is there a general sort of theme as to what underscores these puts and takes, savita names that can provide more defense in a credit tightening environment? i'm trying to figure out how investors can think about that. >> what's the overarching theme? so i think it is all about the cross currents so if you think about labor, the labor market is tighter for lower income or midincome versus high income we're seeing the bulk of layoffs. if you think about even the consumer, the high end consumer, high income consumer is getting more hit by, you know, wall street and silicon valley layoffs versus middle america where you're still seeing very tight labor markets. so i think it is not like you can apply some overarching

recession playbook to what is happening right now. i think that's what makes for a really interesting market environment. our view on the index is kind of flat for the year. but within the index, there is a lot of really interesting internal dynamics. so, for example, i would say, you know, commodities might not behave the way they typically do during a recession or a slowing growth environment because what we're seeing is that demand for commodities is coming from onshoring, reshoring, companies, building plants in the u.s., we're seeing, you know, infrastructure spend and structure spend remaining strong i think what was the most interesting to me when we were putting together our earnings preview last night is that companies, despite the fact that everybody is talking about a recession and, you know, how everything could go wrong, you know, companies are actually guiding up more aggressively on

planned capex than what analysts have pencilled into their numbers. so outside of tech, we're hearing very aggressive capex plans, which would be beneficial for a lot of the cyclical areas that nobody wants to touch right now. so i think there is a lot of really interesting themes underneath the surface of the market that don't match the typical recession, you know, everything is off the playbook. >> that seems to sort of defy what you might think in a credit-tightened environment you wouldn't think that capex would be expanded or that expectations would be bumped higher so is this capex being done based on cash on the balance sheet that is built up or how is this being -- how should we be sure the estimates higher for capex will come through? >> well, you know, it is interesting, it is a great question but if you think about it, for every dollar of money that has been generated or borrowed by corporates over the last ten years, almost as much of it went for -- into buybacks as capex.

we have send a ten-year period of massive underinvestment in infrastructure in the u.s., but lots of share buybacks, lots of financial engineerings of per share earnings growth. i think where we are today is an environment where the government has provided incentives for companies to spend on green. we're seeing companies, you know, companies in the s&p 500 at least are sitting on relatively healthy balance sheets versus smaller companies or other areas within the overall, you know, equity landscape. so my sense is that credit conditions may be tightening, but companies haven't really been borrowing from banks anyway over the last ten years. and where they really need to spend, where the areas of tight capacity utilization are really popping up are in manufacturing, not in tech, and software, but more in manufacturing infrastructure, refurbishment, getting to net zero, all of that stuff requires oil and metal

along the way. >> great to see you. thank you. >> great to see you too. coming up, delta ceo ed bastian joins us to discuss quarterly results in the upcoming summer travel rush. and then an exclusive interview with palantir ceo alex karp, his take on ai, china and much more. "squawk box" will be right back. woman: at first, it was just a team. now, i can't imagine my life without them. man: that coach changed our son. on the field and off. (cheering) (cheering) (cheering) ( ♪♪ ) lily! welcome to our third bark-ery.

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delta out with its report, quarterly report, last hour. phil lebeau joins us now with a special guest. hey, phil. >> hey, joe. ed bastian, ceo of delta airlines some people are going to wake up this morning and say it looks like delta missed on its first quarter on the top and bottom line here. a nickel shy of estimates. as we were talking beforehand, you said we were pretty clear about the communication with the wall street community in terms of what to expect. >> yeah, it is not a miss in my opinion, maybe talk to the analysts about that aspect they missed. we didn't miss first and foremost, our team did a great job in a very, very volatile quarter we always know the first quarter is seasonally the weakest quarter of the year for the airlines i think our results are really, really solid revenue up 45% year over year.

i'm not sure how you come to a miss relative to that. importantly profits were in a -- right at the midpoint of our guidance range that we gave at the start of the quarter and whetn you think about the challenges of the quarter, i suspect we'll be the only major airline that is meaningfully profitable within the quarter and the bigger story of all is our cash flow. ten highest booking days in our history all within the march quarter. free cash flow after capex of $2 billion within the quarter so, this franchise is in tact, the health of the franchise is doing quite strongly and we're getting ready for a strong summer and spring season. >> let's talk about the q2 guidance, well above what analysts are expecting in terms of earnings as well as the revenue outlook. you know what -- you hear what people are talking about, whether on our air, elsewhere, the concern is that demand is waning do you see demand waning at all in terms of people looking to book tickets, looking to travel? >> not on delta. we're forecasting our second

quarter revenues to be up middouble digits in line with the capacity growth that we're planning to bring into the market over the course of the second quarter that will be our highest quarterly revenues in our history. international is going very, very strong. domestic is helping too. i don't want to indicate it is not. international is clearly the place where people are trying to get back their experiences that they lost over the last several years and that demand is really strong the other thing to me that may be the most interesting point of the entire guidance is that we're forecasting in operating profit of $2 billion in the second quarter, which would be exactly what we made in the second quarter of 19 so from my standpoint -- >> on lower capacity. >> lower capacity, higher fuel prices, labor rates are all fully in we're the only airline with all the new labor contracts in place. i think the setup for this year is looking healthy i know i'll be asked that question a hundred times over the course of the day. but as far as we can see, it is

strong. >> you also have guidance into consumer spending through your relationship with amex and the amex card. do you see the consumer spending slowing down do you see a caution creeping into the consumer? >> really not. maybe in a couple demographics and certainly not anything at the top level that's a trend maybe it is stabilizing rather than continuing to accelerate. but we're the experience economy and people want to get their experiences back they have gone three years without having the experiences they want, including last summer if you think about last summer, we were still in a position where people are having to test to get back into the country other places a lot of uncertainty around covid we're through all that i think -- i said this to you in the past, i think we're in a multiyear recovery from the pandemic that's going to be well above anything anyone expects. >> you're not an economist you're an airline ceo. you hear people on our air, on a regular basis saying we are

sliding into a recession i think that we're going to be in a recession from where you sit, and from the other executives that you talk with, whether in the airline industry, elsewhere, do you think we're headed toward a recession? >> you said i'm not a economist. i don't know look at my numbers, i wouldn't suggest that the other thing, though, about the consumer, they're prioritizing spending, shifting out of certain markets or shifting out of goods, moving into the service world, and, by the way, moving into the experience world and the premium experience is where -- is the sweet spot for where the spending is going. that's delta's bread and butter. >> let's trawicalk about that you're seeing spending >> every year we're bringing in one-third of the product on the plane is in the premium cabin. international is really strong the transatlantic market is phenomenal, the strongest demand set we have ever seen for international. and china is not even open yet.

>> you know that last summer was a rough summer, operationally for the industry in part because of issues, whether in florida, whether in new york, or elsewhere, the faa makes the move in terms of easing congestion with the slot restrictions in new york something you and i have talked about. what do you think is going to happen operationally speaking for the industry in some of those hot markets like new york this summer? >> we have said all along that infrastructure around aviation is still fragile and with the health of the demand set, it is putting pressure on the fragility of the infrastructure faa is adding resources, getting additional technology, allocations, they're making the changes like you just mentioned with respect to the northeast, which is the -- probably the most difficult air space to manage in terms of congestion, taking out some of the pressure in that pocket we on the airline side at delta are adding a tremendous amount of resources our resources are back, we're adding buffers into our own schedules to make certain we can

deliver for consumers at great experience we already decided that for the summer we're going to pull down a couple points of capacity from what we were thinking the summer we would be flying in respect to that we just want to make sure our customers have a great experience, much, much better than what it was last summer summer travel is always challenging. can't get away from that >> you got a lot more transatlantic flights this summer, relative to last year. >> absolutely. the transatlantic is booming wherever you look. latin, south america is booming. asia is booming. china hasn't really opened yet when china eventually does open, i think you're going to see another tremendous set of travel demands coming upon the system. >> ed bastian, ceo of delta airlines guys, you heard him, he said it himself, he's emphatic in the belief that the consumer remains extremely strong heading into the summer travel season we'll send it back to you. >> thank you, phil thank mr. bastian. thank you for going down there too, phil, because it is worth it worth it to hear, it is

important, it is important to understand the state of the airline industry and the state of the economy in general, i think. so we appreciate that. a cool shot, too i like jets. you to like jets >> who doesn't like jets >> nobody. unless you're afraid to fly. coming up, with the fed expecting recession later this year, is it foolish to time the market jon fortt will join us definitively with an answer from both sides so we won't know but we'll get both sides and then the next hour, former ways and means ranking member kevin brady will join us to talk about the debt ceiling showdown. "squawk box" will be right back. they divided that word. time now for today's aflac trivia question. what was the original name of the company that would become amazon.com the swaner when cnbc's "squawk

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amazon.com the answer, cadabra, which jeff bezos' lawyer warned could be mistaken for cadaver >> and we're live in seattle at amazon's headquarters, cadaver was the name when we come back, though, we have an exclusive interview with palantir ceo alex karp, he gives us a take on the ai race, china, and so much more that's next. plus, katie stockton on what she's seeing in the charts as investors brace for earnings season and then, of course, in the next hour, amazon's ceo andy jassy will join us live this morning you don't want to go anywhere. big show ahead "squawk box" rolls on. inner voice: (kombucha brewer): when i started my new kombucha business... ... i thought there would be a lot more kombucha... ...and a lot less business. inner voice (graphic designer): as a new small business owner... ...i've learned that trying to be the “cool” boss... ...is a lot harder when you're actually the “stressed” boss. inner voice (furniture maker): i know everything about my new furniture business. well, everything except... ...the whole “business” part.

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welcome back to "squawk box. at the leadership summit yesterday, i spoke with alex karp in an exclusive interview take a look. >> it is going to really crush a lot of businesses because for two reasons. one, it tests the underlying archit architecture if you run an algorithm on a network that is built for one

use case, which is a lot of -- it won't work. it will also crush architectures because there will be an inability on the lm side to how do i create a barrier between them and my trusted network in the classified and nonclassified. how do i have a barrier between the algorithm or large language model and decisions that involve ethics or norms or i have to trust this before i shut down this plant or i can't have everyone, every single office or every single hospital bed be of one demographic. and our business is built to do that so the other thing about large language models and quite frankly algorithms, it is really good for america because, first of all -- >> good for america because -- >> because -- well, we struggle with, like, imposing trust on it, and, of course, my company is in the business of that, and we have, i think, enormous advantages, if you try to do this in china or russia, there

are just too many things you're not allowed to research. they are far behind the culture for building it is not exactly there. it is good for america because we have great allies in europe, and we're just much quicker to adopting technologies. >> we all talk about open ai but google is trying to do this. others are trying to do this is this kind of technology ultimately going to become a commodity or is there something -- >> let me tell you something that -- well, the large language model is -- a lot comes down to power, the consumption there are going to be very, very large language models. they are going to end up being somewhat specialized the real value, the part is going to be the intersection between your business logic, your business norms, your laws and ethics and large language models and the people who get all those three are going to make money. >> should we be scared about the power of ai, the power of these models because right now they're

being used to write poetry >> when they're actually -- >> when they can actually create a transaction or do something on the battlefield, what happens? >> they already are. they are very dangerous. but the reason we have to continue down the path is, a, we have adversaries that are -- seem to be bereft of any kind of ability to control their behavior and, b, the american economy is still the most important in the world and what do we know about the american economy it is the most adaptive. >> are we at a transformative moment when you hear sam altman talk about the future of this, there are some who say this is like, you know, the browser, you know, back in the day. this is one of those moments where you look back in time and say this is it this trans -- >> there are two moments the war in ukraine, and large language models have fundamentally changed the world. and you cannot put this back in the box. but then there is the question

is how can you trust either? so you don't want the ai in the hands of china that we have, you don't want the llms, what is the trust variable first of all, society cares about that it happens to make trust working, branching, all these technical terms, it exists, but the simple layman's terms is if the llm tells me to -- gives me information on cancer research or how to distribute hospital beds, is that what i actually do and that requires a control function between the business, the business logic, you, ethics. >> what do you make of elon musk and some others who say there should be a six-month pause or there should be a pause at all in terms of the advancement of this type of technology? >> if we didn't have the adversaries we have, i would be very in favor of pausing this technology completely. but we do. and that's why pausing is just -- you can't pause it because it is a structural

advantage both for llms and algorithms leaving -- getting this -- getting algorithms and llms to work in a classified context is going to take very specialized -- i can explain how it works, but the fact is it is going to be a bonanza for the u.s. economy >> how concerned are you about china right now? >> everyone is very concerned. i think we're in a conversation this morning where i referenced, you know, we first started talking about china and america and i was saying that this was not going to end well. that was a controversial statement. now it is consensus. america is fairly unified that in its idea that, you know, that china and -- people running china are not acting in a way we can accept and i think the consensus, if i had to guess, in china, is we're never going to get this back on the rails with america, so we should up the aggression >> when you think about, for example, the debate over tiktok, is that a real debate?

>> no. they shouldn't be -- the idea that we allow a product that is really main purpose is to degrade american intelligence, while not allowing american products to work in china is just fracturally absurd. i'm very pro american democracy. but we have to get better at simple decisions this is suactually a simple decision we have one country that allows another country that is adversarial to put essentially a technology in place for the soul purpose to make us slower and worse and we're not able to do it on other side either we both get to do it or neither side gets to do it. >> is that a national security concern? >> there are lots of natural security concerns. i'm saying there is a common sense element here one country allows x, the other country doesn't. let's start with the very common sense, we both get to do it or neither side gets to do it >> let's talk about your business there has been some pressure on

this stock as you know coming off the first quarter, you achieved profitability on a gap basis. you expect generative profit for the current fiscal quarter or current fiscal year. why do you think the stock has not moved more >> well, look, there is a lot of -- there are macro factors, but honestly, if you look -- one of the few stocks where our market cap is higher than we dpo'd, we are -- we can't get into our current earnings or say anything that would be new, but i'm looking at a u.s. market that is doing very, very well. and over the medium and long-term, i'm a very proud holder of palantir shares. >> so, as you know, jim cramer had some choice words for the company, called it a company made up for memesters. >> yeah. >> what do you think when you saw that >> he doesn't actually look at the financials because i don't spend any time talking to him. and what i really think is you

take my palantir and you take whatever anyone says about it, let's talk about it in a year. let's talk about it in two years. and i'm very happy i love when people attack us because it is, like, great, well, we'll show you our cards over the next couple of years. >> what is going to happen in two years? >> a lot of the questions that are being asked like how does ai move from being either danger or trinket are going to move to, oh, these five companies, these ten companies in the sector implemented large language models algorithms in a way that created trust and they won the whole market. >> alex karp, never one to hold back, doesn't hold back at all there. and has a whole bunch of views on a number of fascinating topics, joe. >> i would almost defer to him on certain things. i was nodding, andrew. >> too much, joe >> yeah, never too much. >> look at you

look at you there, joe kernen. >> the question about tiktok was so fascinating it was so fascinating. is it national security? well, if you -- from the inside make us dumber and slower, is that a threat to national security yeah, it is. because you're making our youth dumber even if you're not stealing stuff or, you know, what we normally think of as, you know, bellicose behavior, if you are, from the inside rotting us out, that is a national security problem. and then the other thing he said -- >> sure, but then -- but then what do you do is facebook rotting america from the inside >> social media is -- >> is coca-cola rotting our body >> how about terrible books? >> if you're delivering -- if it happens because of human nature, that's one thing if you think about how do we destroy this country from the inside, that's different. >> the question is -- right. >> the other thing that was

fascinating was is ai dangerous? yes. but not as dangerous, near term as our adversaries that's fascinating and i agree with that. ten, 10, 30 years you might get to the 2001, you worry about are humans superfluous to a machine? we have china with taiwan, we have russia with ukraine, in the meantime, you need to use ai, you need to make sure you don't let these adversaries get ahead, he's absolutely right with that too. those are -- those are, like -- >> the big question -- the big question for the business, though -- the big question for the business though of palantir, they have data sets and can the data sets leverage with generative and large language model ai actually set them up for even more success, or does large language models and ai make the -- that value less? and that is the big question for palantir going forward.

>> and the hair, to me, he's even more brilliant. it makes him look exponentially more brilliant. >> like einstein >> like mac. if you didn't have that hair, mac, i don't -- don't you agree, andrew that hair makes him, like, yeah, i get it, i get it we're stupid we got way too much spray. we have way too much spray, i think. there is mac he's turning around. >> all right coming up, the fed floating the idea of a mild recession later this year. jon fortt joins us with his take on what investors should be w.ing with their money right wel rhtac 'lbeig bk. go. go air that runs factory. go sensors and software. go find leaks. go fix-em. emerson technology detects compressed air leaks to save manufacturers, like colgate,

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inflation is moderating, but still high and economists at the federal reserve now expect that we're heading for a recession before the end of the year. so is this a good time to invest jon fortt is here to weigh in. >> hey, joe. >> you better tell us. if i don't know after this -- >> i always do >> okay. >> i always tell you and then i tell you -- well -- >> okay, go on. >> no, joe, this is not a great time to invest you know what looks good right now, cash. you can get just shy of 5% on a

certificate of death for 12 months or less a lot of investments right now, a lot like wily e. coyote. let's talk about the equity risk premium. that is the difference between the earnings yield of s&p 500 stocks and the straightup yield of ten-year treasuries about 1.6 percentage points, the lo lowest in more than 15 years the s&p is up 7% so far this year led by megacap tech companies like apple, microsoft, and nvidia, which are all up between 35 and 121%. now, i can't see the future. but it sure looks like the economy is about to take a bad turn the fed expects a recession this year, thanks to the banking crisis, but we still have an unemployment rate at 3.5% and the pricing stocks, gravity is going to take over here. stock prices are coming down in a few months keep some powder dry for when that happens. >> you know, wily e. coyote

always ends back up there. he's resilient. >> durable. >> like the market maybe? >> depends how much money you have i guess. on the other hand, let's go there, now is a great time to put money into the market, if you are willing to do some homework case in point, bonds and bond funds. sure, you can earn around 4%, 5% on savings and cds in the short-term, what about locking that in? there are two generations of investors, millennials and most of gen x who haven't thought deeply enough about income we hardly had any money to invest, what we had we were supposed to put into stocks because we're young. and then for most of the last 15 years since the financial crisis yields have been bad so we were smart to steer clear of bonds look, things have changed. rates are high likely to stay elevated for a while, at least, and then stocks okay so, can't just close your eyes and buy the s&p anymore or trend

the etf. maybe individual investors are have to take our research game to a new level that's a good thing. investing has been a bit broken for more than a decade now the playing field is getting more balanced again. and that makes it a great time, joe, to invest. >> your initial point though was the equity yield, yeah, the -- >> not getting paid -- >> historically that -- but then again, we have had people say that maybe we're in a period where it is not 7% or 8% that you can count on annualized with stocks but then you need to -- there are some stocks that are going to do that, obviously. >> i liken this period to -- it is like we're getting the cgi out of the market. remember when george lucas started to put cgi in? now i'm thinking about things like municipal bonds because if you're in a high tax bracket, and you're looking at the tax

equivalent yield that you can get over the long-term, boy, those are things we didn't have to think about before, right we were chasing after bitcoin, some people still are. >> yeah. always can go bitcoin. you can always go bitcoin. >> you can >> like cgi. but should you >> if you talk about -- when people are saying the two-year at 4%, okay, what else you got i'd still rather have bitcoin. i would. if you're a believer, you're a believer one man's a lot is another man's -- >> are we still talking about -- maybe we should have 3% to 5% of your portfolio in bitcoin. >> i have a huge portfolio, so i -- >> that's what i'm saying. don't mean to brag >> i like it, a significant amount, i'm not afraid >> thank you, jon. >> thank you

coming up, katie stockton will join us after this break and in the next hour, amazon's ceo andy jassy will join us live to discuss his letter to shareholders "squawk box" will be right back.

welcome back to "squawk box. joining us is katie stockton,

founding and managing partner for fairleigh strategies most of the time it plays out. it's always a percentage the thing about technical analysis, trends are great but there is a big reversal in a trend, it's hard for you to see it in advance. it's easier to look back and say, oh, this was obvious. for example, the s&p is now wherever it is 4100 >> 4100. >> bitcoin, did you see it going to 30,000? you didn't give us the heads up on it. but what you said to me was you think it might fail still and you'll end up being right. so make your case.

>> well, i would say that about any discipline, that all disciplines really follow trends of their own and it does take time to see that trend shift typically. we do have some indicators that will be a little more coincident, the ones designed to signal the end of a trend right as it ends but you want to see supporting evidence we're trying to put more probabilities in our favor like everyone else. and we're also trying to identify major trend shifrts we don't want to get caught up in correct ive phases we want to be long-term in our focus. we can still identify this as a corrective phase within a bear market cycle we don't have a breakout a trading range has unfolded while the mega caps have been on this tear and people feel more bullish, it hasn't been a very broad-based rally. that's a more fragile rally. at a very minimum we do want to

see that breakout to suggest that we have the turn around and we want to see a shift that we haven't quite seen yet. a key message for us is the vix. if it breaks down we've gotten into a different kind of sentiment environment. >> the s&p support levels, those move up as things go up. is 3400 less likely now than it used to be >> i would say it is just because we did see the nasdaq 100 get through a resistance level of its own that makes it less likely. working in probabilities here, as things advance you do ratchet up support levels to discern what the down side may be for the next pullback. for the s&p 500, initial support is around 3800 that 350 level is still very valid as a support level but as an advance it becomes less likely it is sort of a rolling support level.

>> i don't know about your call on yields either then again, yesterday it looked like they were headed sharply lower and they all recovered and we're still within spitting distance of some of your objectives for the ten-year and the two-rear >> we've had pretty good calls on yields i which earlier supported consolidation. we expect more of the same for the balance even of this year. short term, they, they do look higher so for equities, it all makes sense to me. we're seeing at growth versus value ratio shows those to mark cell and that could be appreciated with higher yields and a pullback in equity markets. >> kayte was talking about

bitcoin 15,000 and now it's at 30,000 so where's that -- it's kind of outperformed other risk assets, hasn't it? >> it has. >> we had a guy on the other day saying no new buyers, so it's not being adopted more widely. it not getting more mass adoption, it's just the holders are still die hards and that's why it's moved up to 30. did it break out >> yes, it did break out the base breakout against that 25,000 level was confirmed that's an intermediate term positive of ours it has the proception resistance around 36,000 now it's 25,000 because of where we broke out so we do have a base breakout in bitcoin. it seems to be less of a risk

asset type of bracout and more. >> she's a technical genius. you have a show where you talk about that kind of stuff all the time >> i have an options will. >> there as many ways to our atf has pood expesh and energy and gold >> i like crock a dial factor. they eat up all the principle approximately but -- no, no. >> back to you >> i'm in seattle live this morning. you downrs we'll be back in just

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good morning in just 30 minutes we've got inflation data, producer prices

following yesterday's cooler-than-expected cpi numbers and some fed staffers now expect a recession this year. meantime delta air lolines out h earnings, the numbers straight ahead. and amazon ceo's message to investors. he will join us exclusively to talk about his ekd ever letter to shareholders. final hour of "squawk box" begins right now good morning welcome back to "squawk box" here on cnbc i'm joe kernen along with andrew ross sorkin and melissa lee. equity futures are showing a little bit of weakness they're mixed, though. the nasdaq actually up and now the s&p is basically flat but it is a green number, 0.8

let's look at the treasury we saw some very interesting action yesterday we saw a rally in bonds as yields came down and by the end of the session, a lot. >> some breaking nugs this morning as amazon's ceo andy jassy put out his second shareholder letter he reflects this morning on a challenging your as jobs were eliminated as part of a cost-cutting effort. he remains, "optimistic" saying they will emerge in at that stronger position than when we entered it despite efforts to and reflects

on 2008 writing, quoting o ak zahn would be a very different company if we slowed investment. change is always around the corner sometimes you pro actively brought it in and sometimes it's knocking and the low earth satellite system they've been working on and investing lots of money. jackson says they're continuing to invest in the company's grocery business as well as amazon business. that's it's b-to-b franchise and he worries about the impact of the economic environment and wrote, "aws faces short-term head winds right now as companies are being more

cautious in spending given the current macro economic conditions." and he ends the letter with an entire section devoted to artificial intelligence. he wrotes "i could write a n entire letter on pl lms and regenerative a.i. we'll speak to him and discuss the economy and the letter and everything else. so much to talk to him >> looking at the charts, andrew, 2008 was a very rough period for amazon stock. it was down about 30%. >> but this goes to the whole idea of plg the cost cutting and tightening your belt versus when do you invest and how much do you invest i think woor go the been to

think about all of this. >> lots check a check main to and on hi, tom >> about a half a million shares of volume off their premarket highs. delta reported profits and revenues that missed analyst expectations but it gave a current quarter forecast for profits and revenues that top expectations indicating perhaps that possibly travel demand is there and it's still robust despite the uncertainty in other industries this past hour, delta's ceo spoke exclusively on "squawk box" and the revenue picture here's what he said. >> revenue is up 45% year over year i'm not sure how you could to a miss relative to that.

and when you think about the challenges of the quarter, i suspect we'll be the only major airlines that meaningfully profitable within the opinion. >> first of first sole down about a percent and a half or so analysts at deutsch have downgraded the company to a hold, it was a buy you can see here they think there's better risk reward elsewhere but they remain positive on the fundamentals, longer term for first solar. they're up about 157% over the last year. and we'll end with a check on the shares of alibaba. they have been moving between gains and losses the u.s.-listed shares are up about a percent right now. half a million shares of volume. it had been down earlier in extended trading

regulatory filings indicate it has sold the bulk of its stake in alibaba that's according to a report from "the financial times. that's drove a lot of the downside action earlier but those have someone to a gain of 1% back over to you >> thanks. our next guess says a rally in the s&p 500 could stall around 5 500. let's bring in ed. i wanted to start off with your take on what the fed staff said about a mild recession being the case this year sounds like the fed could raise again. do you see this as an acceptance basically that the fed is saying you know what, that's okay for us >> well, i thought it was a little strange quite honestly

but the staff basically said because of the banging crisis, there could a mild roo session this banking crisis could turn ugier. so i think it's the staff base cl tay and it's evidenced by our forecast that things are going to have to slow down the federal himself it toss approximately and i think where they are is restrictive enough and it needs go side ways for a while until there's more evidence on how the banking crisis is unfolding. >> do you think there's risk because of the banking prices? yet you think the s&pat 4,000 which seems rosie if you think that the banking crisis could

get worse. >> i'm just saying, i with been -- keep raising interest rates here they have achieved what they wanted to achieve, as i mentioned before so the banking crisis i think has been stabilized by the fed's actions, by the fdic's objections but i don't thinkhere and continue to raise interest rates given that something has broken in the krid of cred system it inverts and something will break. something broke here in some of these banks. we don't are to and meanwhile, we are monitoring without a recession. >> have you yourself become let bullish or bearish because of what's going on in the banking crisis

>> the fed says they're data dependent and therefore all of us are dependent trait p and realize that's where they want to be. i'll remain in the current posture that maybe the market continues to move side ways. is a good day for the markets in my opinion. >> let's say the debt ceiling issue remainscontained is that up side to your 4000 >> yeah, that up side is actually 4600 by the end of the year i think 4,000 is kind of the raiding trng >> all right ed, great to speak with you. thank you. >> thank you

>> coming up, breaking inflation news we're counting down on the march ppi, producer pruce enit can and former ways and means member kevin brady. "squawk box" is coming right back

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welcome back to "squawk box. we're quiet ahead of the release data, the s&p looking to be higher by 3 points, the nasdaq up by 23 we're also watching shares taking a tumble in the premarket trade. there was a report that the fda could reject it's muscular dystrophy gene therapy that sarepta stock is down we'll watch any developments all right, we will be -- >> we're going to talk about warren for a second. some guy name warren buffett he was with us yesterday and at some point did touch on the subject of the next interview and that is the debt ceiling that's what he said. >> you can say that we're going

to hit the deficit ceiling and the debt ceiling you know, everybody makes hay out of it. we're going to change the debt ceiling and the unnecessary apprehension commentary, everything that's caused by the fact that people say, well, the law doesn't know how to get above x. well, they're going to change it >> joining us is kevin brady, a leading republican on the ways and means committee. congressman, it's good to see you, by the way. >> nice to see you >> i swore i'd never say it at the end of the day so i wouldn't say it but when it always we offered something to the other and we've pay riefd at this? or it going to be both sides

stay entrenched and it just gets lugly, bringmanship and we'll get it done in. >> i'm hopeful if being they've had good discussions on what their ideas are in why you don't resend unspent covid money hard to argue against those types of spending reforms so, yeah, i'm confident it had it will get done but the ceiling is more than just extending the credit card it requires lawmakers they're not. so i think this is exactly the right time to have those conversations. and i think, too, joe, the

president needs to look at this and the white house needs to look at this of what is their risk one, they risk being out of touch with voters. i think 60% of americans believe government is spending too much and 80% believe the debt ought to be the top top being for government and in divided government, you could have a, followed by repeated vote nextier. certainly that is not good for the economy. and i think a longer debt ceiling, bipartisan provisions can create certainly for the economy we need. caller: those are all the stated -- we should read what you said basically i think in the congressman, the scenes, everything is so political and partisan i don't know if republicans and speaker mccarthy have a real strong bargaining position

because no one really expects them to use the nuclear option by not passing a debt ceiling. owe the prz knows that and we do, you know, the unthinkable were to happen, it would be republicans that were blamed, i think. he knows that. so what leverage do praebs have to get him off that position they don't have much >> yeah, i think the main leverage here is it will require rather support in the second to the debt ceiling secondly, if house republicans are able to unite -- and it's not easy -- around a reasonable provision or two on this, as they're seeking to do, that the

american public can support and the senate can support, then that creates a different d dynamic. it is not easy i think they're taking the right approach on this >> do you have any reason to think that president biden would throw a bone to the republicans on this in given what. i don't know whether it's him. advise p advises him on some of the stuff. but he does team to have a prit solid ear. >> yeah, hes did -- i'm willing to work in a bipartisan way with this nun and i i it improves his benefits to sit down and knockout negotiate be in and this is the longer

term something, maub think this it's important for both parties to do their job. ap and i've thought that, too, a and thawing in some of these positions which seem so -- >> you know, i'm hopeful there's been some signs of that. these are difficult issue make difficult because you actually tack. >> i don't thinkman, she what the president is going to say. independent but first do this because we already spent it, it's already done, you can't, you know, the democrats about

that's always let up hear that narrative and do it now. andy there's no reason for him not to that's what and you heard it, though ia, i know they did. he takes sot amp theish and sit down and negotiate and foochl being barely reasonable in their ideas. owe hichlt and if you could get one this evening that speak, if federal government what's the one thing that the president might say, okay, fine, i'm going to do this he would make a big deal of it if he did concede to something because he doesn't have to, i

don't think. what would it be >> there are three to four i think they're pretty low-hanging fruit, including the unspent covid-19 buntle long and that's not going to happen in the next few weeks certainly, a commitment being some timetable to that for me would be crucially important. >> just so i don't get any nasty tweets, "you republicans are even worse than the democrats when you were in." so i said it no one can say that i didn't say it to you. you spent a lot of money out of trump too. >> i got to go i just want to preemat the present time. >> andrew. >> thanks, joe

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zchlkt welcome back to "squawk box. we're just seconds away from march ppi and initial jobless claims the futures are now back slightly in the green. got the nasdaq up 36 points or so you can see that if you're in a car up 5 on the s&p and the dow jones up about 13 1/2 the ten-year note is under pund 3.41 with the two-year 3.977 i'm not just going to keep talking, rick. i'd rar rm and the immediate reaction we you a to thos ap the rest the the session, the

knee-jerk is highly kpet tent what's going to of a wa it if f and if you look at the trends yesterday it closed basically around 1% difference, 1:02 po and pay attention to that support. here we go, we're getting ready for jobless claims and hitting the wires 239,000 onness claims. a lit. and 239,000, well, ut cuss we 246 thousand the week of the 24th of march. what's neatable is how much tier than nm f and continuing claims,

1,810,000 which is lower in the rear view mirror and after those benchmark revisions where we couldn't get above 1.7, last week's 1.8 has been the highest down half of 1% on headline ppi. that is a cycle low that uchl -- minus 1//10th if you slip out future up .01 tense. nrp let's get into the one year-over-year numbers ppi, a headline number year over year breaches 3% at 2.7.

2.7. the high water mark there was 11.7 in march of '22 3.4 if year over year. 9.7 was the high water mark there. 3.6 if you look at x food energy and trade. all of these are significantly lower than the rear view mirror, especially after the revisions, which pushed those trying. joe, it's always yours >> i've opinion this m it's exactly what happened yesterday. it didn't last, though in -- >> listen, i completely understand, maybe after the dust settles it will be 2 1/2, 3% beginning of next year

but the point is it is dramatically moving lowernd the markets have do sao ed and i think it should be different than yesterday there's no fed minutes talking about a recession and i guess, i don't know, i guess when the fed says it it means so much saying it for a while. i want to get to andrew for his interview and where are we on that at this point is that moving at all? >> right now i don't have that right in front of moe i'd say it still in the high 60s or low 70s. my yield probably hasn't moved much >> rick. i mean andrew. caller: hey, joe

we live interview with c of amazon just out with his second annual shareholder letter. we had an opportunity to spend time with you last year at this time but i want to talk about what's happened oaf the and some of the corporate layoffs and where you see this company and at the same time thinking about investments in the future and what that balance looks like. >> i think had the for amazon. i'd stwart just a couple of data points if you look at our two largest businesses, if you look in our stories business, our retail business, we stl om about 43,000 business we still only have been

1% of the worldwide market share and 80% of it still lives in physical stores. if you look at our aws business, an 85 billion run-right business, about 90% of that global it that those owe cases are going toly and i look at where we are today and i think about working through one of the hardest and the fact we were able to grow our top line during an inmany we could impact both the short and the long term and the fact that we have dhanged the way we collaborate together by getting into the office more. and the fact that we were able to meaning long term invesment

that we. >> at the same time you do talk about macro economic head winds, especially in the con it can fch. >> well, we see a couple difference right now on the consumer side, consumers are spending but they're much more careful of what they're spending on. sfwlu assault weapon a lp and you seech people trying to save money. f and that's why we send so much on our subscription side on the intersurprise side, most companies in our enterprise business it impacts things like advertising, as you see around

the industry, but also in people's technical any and in a case like als, you have much more demand, you can seamlessly skill up and if you don't have that demand, you can stop paying for it that is very unique in the crowd. you don't get that on sim us we're spending most of time. we're not really cost cutting we'res cost opt musing >> on the aws side, though, how portable do you think the abouts and they can love you for the fact they've been to be able

scale down pu they can move to a rival service quite quicklyheavy lock-in see with some of the soft wear companies who make it go most companies don't want to take the opportunity cost of having to switch their entire platform and everything they've built. remember, people are putting data in a particular providers, they're doing analytics, machine data, their databases live there. you can change it. it's just a meaningful amount of work if you do a great job for them operationally and keep innovating at the incredibly rapid. >> and i want to talk about a.i. you had talked about layoffs and just right sizing the business, 27,000 jobs have been

eliminated oppenheimer came out last week and said that you is this the end? >> hardest thing i've had to could my career and progressly and there's no equation on what the right amount of streamlining is i think it's a pretty significant streamlining of costs and-if a and which things we really had con fluk, woorp going it forecast repriority and we don't have an intention of doing anything more faeping forecast james of business and

the economy. >> at pup. in this letter you talk about it, the international business, the health care business what does that look like to you? it's hyper, which is a moon shot what to invest in, we look at two different tn made cust mrs and if we're going to invest in an experience where we can make customers' lives better, we our ourselves, if in withif tw is being well served today. number three do we have a different differentiating to

that when we like those, we invest. sometimes it led and some retails are very large fwrm and other times that investment industry -- maybe not as obvious to people. aid to u.s. is a good example of that i think that fewer people might have and businesses that have no connectivity to the internet so i think we solve -- >> has that con trukt changed in the past 12 months clearly there were investments in products and businesses that you were pursuing that you decided not to anymore >> i think that could be

successful have in foot fighter congregation so when oo testimony but you have to constantly be checking in to make sure that you still believe it going to be success full the coninstruct doesn't change but if you don't have. >> you made a wig pi how do you file about buying thungs in. to me it's a suggestion of how are you going to grow that business meaningful? you seem to think that's a big growth area. and i thought would you buy another supermarket company? >> well, i think every decision whether you're going to acquire or not has to do with what your

strategy is and what you think we have a history where we are confident and have had success building and inventing ourselves. but when there's a customer experience that we think is very meanleful, where we either believe we don't have the people or the capability or the time to build and we find season who has dp that's kind of what woo did and customers said we'd like you to help solve a broader piece of the health care experience, it you have you and we came across one medical if you think about it how woo go see the it three or four weeks in advance, drove 20 minutes to the doctor and waited in the waiting room for 20 minutes, they call you to the exam room

and doctor sees you for five minutes and then you have to go to the pharmacy. it's an amazing digital app. up can chat with medical practitioners. if you need it see somebody in person and you need something to the pharmacy, it comes quick it a very different experience that they've build approximately. >> the word quarterback what is the balance be approximately and the cost of that versus getting it to them in a day or two or three? >> i don't think you have a choice if you want to provide a great customer experience pi i think you have to do both well customers have always loved broad selection and low prices and they love getting their products quickly i think if you want to provide the best possible customer experience, you have to find ways to get it to them quickly

that's why we've invested so much in our fulfillment network and so many more shipments are coming one day and same day. but you can't do it in over the last number of months to get the cost to serve and our fulfillment centers and operations i think we're changing the speed in a very meaningful way >> can we talk about a.i.? you say you could write an entire letter about a.i. >> waiting for it? >> we don't even have to wait anymore. that's the amazing part of it. you folks made some nounments this morning about news on the a.i. front on the software and chip side of this business when you think for example about chat gte or what google is

doing, how do you compare yourself about how we do that? >> well, machine berning a at a rahal for over 20 years and it's in everything we do. the personalized e-commerce kmems dids and then in aws, we had own 25% of must. and the last six, nine months you've seen this really exciting development of large language models and a.i is he the announcement that you talk about today is in our a. trying to democratize technologies that large and small companies alike can afford and have access to build amazing

customer experiences so if you think about running these large language models, there's three pieces to it the first is they all need compute. you're going to train models and then the models spit out inferences or predictions. the key pieces are the chichs inside of it we've been working on specialized chips for training and for inference that have the combination of price and performance in a really add then most companies want to lose these large and it talks billions to train and years. most companies don't want to do that they want to work off a foundational model that is big or great already and customizes for their services and you'll get access to large language models from entlopic, stability a.a. and from ourselves, we're.

>> yeah, that your big, large language models down that you can play play these on top of them and it just has to be specific for your application. so that's bedrock, which i think will change the game for people. and there will be these applications built, chats and something we call code whisperer for developsers. if you're writing code, instead of having to write everything and do all the art and science yourself, you can in a natural language way just say what you want to do and code whisperer will generate the code for you that will substantially change developers' productivity >> so when you saw what chat tpt did and the relationship it has with microsoft and you see what barr bard is doing, where should amazon be in that conversation in. >> well, i think as i mentioned earlier, we have been using

machine learning in a very deep way in every one of our businesses we have our own language models that we've been learning on for multiple years and that fueled a lot of our experiences i think in general up should expect that regenerative a.i. has the chance to experience every customer experience you know we're using it to invest deeply across all of our businesses in amazon and aws, we'll make sure every other company can use it as well. >> i want to talk about the advertising business, a big growth space for you, but at the same time i think is maybe indicative of what's happening in the economy right now what ruff seeing >> well, we have a -- if you look at our advertising business, it's continued to grow at a pretty rapid clip, even when most advertising focused businesses have i think slowed over the last several quarters and a lot of that is just our advertising is uniquely effective as we're able to -- if you think about on amazon when

you're an advertiser, we have the ability with the machine learning algorithms that we've built and continue to spend most of our resources on that because we understand shopping behaviors, when customers search for something, we're able to place advertisements there that are relevant to their search so means advertisers like advertising there. most of our resource continues to be making those machinery algorithms more targeted and relevant for customers i think we've done a pretty good job. you should also remember in our advertising business, most of it is in our own -- we still have a lot of opportunity to thoughtfully integrate advertising into our video and live sports, into our audio products so it's still pretty early days with respect to what is possible in advertising >> you have football now >> yeah. >> where does this all go,

meaning what -- should we imagine that you're going to be buying into lots of other sports what does prime look like in the future >> well, i think as it relates to the video piece of it, we're trying to build the best destination, the best collection of streaming video content anywhere a lot of that will be our own content. you mentioned thursday night football, which we're really excited about. i think it was really good first year, and we really appreciate the partnership we have with the nfl there. some of it has to do with our own contact. "lord of the rings," i'm very excited about the citadel. >> i just watched it >> i'm right in the midst. let me just watch the end of it. but some of the content is third party content.

we have third party media partners, hbo max, paramount plus, stars, showtime, with their content is available to prime customers. so we are trying to build the best collection of streaming content for people to see, and live sports turns out to be something that people really like it draws a lot of people our thursday night football has the largest number of new prime customers sign up for, and live sports has been successful for us in europe, too with epl and uefa >> you bought mgm. do you think you will see more consolidation? we all debate consolidation in the media space, like what happens to pair mount plus or others >> we acquired mgm they have such incredible ip we just started finding ways to bring it to customers. i think it's -- there is a

number of businesses everybody is trying to figure out that business model. we have a little bit different business model because prime is bundled. >> how much do you focus on the stock price these days >> not a lot of time focused on that at amazon, i've been at amazon almost 26 years now, so i kind of grew up here. we have always had this perspective that you can't be -- first of all, we tend to be long-term focused. there is an adage, in the short term, the stock market is a voting machine it really matters what you do for customers over a long period of time. >> you changed the comp structure around stocks. there was an announcement this morning that you're not taking more comp this year in stock, the company said >> no, that's right. >> what was that a result of >> i think, you know, when i became ceo, i was given a grant,

that was intended to be my compensation for the foreseeable future we don't get -- most senior people don't get new grants every year >> you talk to jeff a lot? >> i do. i talk to him regularly. >> what do you guys talk about what does he think is happening? >> you know, we talk about different things happening with business we talk a lot about large language models, general ai, we're both excited and passionate about it. we're investing significantly across amazon. we talk about all sorts of things it's nice to have a sounding board. jeff is so talented. it's nice. >> there's a report that he's not buying the commanders anymore. >> i don't know. i'm a giants fan >> andy jassy, thank you for joining us this morning. guys, back to you. >> thank you, andrew when we come back, we'll have to

watch the opening bell "squawk box" will be right back. it's definitely softer. good ball flight it doesn't wanna... flight was amazing. it just goes. sat down like an old dog in front of the fire. errrt. stopped on a dime. you need to be on tour, and you need to take that ball with you. that's the sound of a good ball. let's go! maxfli. tour quality performance without the tour ball price. next time we gotta find a tougher course.

two days running now, we have seen inflation numbers kind of have an immediate impact on a lot of different markets

here is the two-year now, back above 4% i asked rick santelli where fed futures are, it's still 73% that they go 25 basis points. that would bring us to five, right? >> right >> i just wonder when they say, okay, it's telling us that's not where we -- and i -- the expression is the conviction of the converted. the transitory saying is hanging over them, and they have to pretend they're volcker and nothing is going to persuade them >> the pivot is forward -- >> if you're at five and you're at 3.9, why would you do that? >> take a look at the ten year, what is the cap technology doing this morning up 0.7% across the board when you look at apple and meta and alphabet

that's up 3% ether also doing well after a software upgrade that's a big move. >> i don't want something to happen to that -- we talked about that too, what could knock 73% down to where they are not going to raise it's something bad, like a regional bank or something like that so that's the -- i think that's the only thing that could dissuade them. catch "squawk box" storm, including a special interview with chicago fed president austin goolsby at 8:30 eastern time he's already insisted through twitter that i call him mr. president. he has

he's an old friend of the show, where he could come back and act not really serious the gravitas of this office is going to put him in a position where i'm going to be able to do it, and he's not going to be able to respond. >> he's a voting member now. >> he can't be a smart ass anymore, right >> we'll see >> so i'm going to take advantage of him don't you think, andrew? >> i don't know about that big day tomorrow i'll see you back in new york. you can call me mr. president. "squawk on the street" is next ♪ ♪ good thursday morning. welcome to "squawk on the street." a bit of an echo of yesterday. only this time it's ppi that comes in light, down half a point, year on year up jobless claims a littlhi