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 little higher

than expected. we have continued signs of cooling inflation, wholesale prices notching their biggest drop in three years. >> and amazon's ceo warning of short term head winds for his aws system but they are confident that they can get company costs under control. and apple continues to pivot out of china, boosting its manufacturing business in endia and thailand ppi up 2.7 year on year. we remember that 11 handle not long ago >> right the trajectory is so positive, the rhetoric is so bad it's almost as if the fed people are saying, we're not seeing the numbers we want. then you say to yourself, okay, do you think that you can literally go from plus 11 to minus 2? take a look at the trajectory and say we have a way to go.

one of the things i've seen, the dogmatic nature of the fed is very opposite of what i would have said they were, when they were a little more determined. in >> when did they get burn, when they didn't move quickly enough to raise rates >> that winter spike up where -- february surprised them. i don't know why the long-range went down jobs were plentiful. but i think that february made them feel like, we're going to have to change the way we look at things. we're going to have to say things are strong until they're not. because we look foolish and we look less determined than we should have been in february you're stuck with this d dogmatism, and it could heard the economy. >> okay. although you're getting more

positive on the market a little bit. >> yeah, but -- >> earlier this week >> i am positive on the market simply because i like the setup. we're going into earnings. i was listening this morning to frank collins and you know, it's like, earnings are going to be down 5 to 7% where did that come from i got this i don't have it down 5 to 7% >> and the s&p is potentially a bargain. >> yes and we don't want to get caught up too much with what mary daley is saying. did she own first republic which one did she drill down on, the mint you know they've got a mint out there. they are so consistent -- they

can put out quarters until the cows come soon >> you've gone out there but come back to rates 25 basis points is going to scare you? >> i wouldn't be crazy about 25, because i don't want to see banks -- here's what we see. most of the problems are kor sen traited where they invest in the curve, and what happens if we add on this lay er -- what happens is they raised into some -- that's just not proof. you have the atlanta fed raising its gdp from seven days ago to substantial risk

rigor matters. not rigor mortis i don't want mary daley to be rigor and i don't want -- you know who i'm talking about, we don't want rigor and mortis in the fed, we want spry. >> the minutes were interesting. mostly the fact that the staff, not the officials, but the staff sees recession later this year, with a recovery over the next couple of years. and then there was some discussion whether daley's commentary softened a bit. she said more hikes may not be needed, but take a listen. >> while the full impact of all this tightening we have done is

still making its way through the economy and the system, the strength of the economy and the elevated ratings on inflation suggest there is more work to do that urgency must be coupled with an awareness with the uncertainties we are facing, and the risks posed to the economy so looking ahead, there are good reasons to think that policy may have to tighten more to bring inflation down but there are also good reasons to think that the economy may continue to slow, even without additional policy adjustments. >> two things happened after that goldman removed their call for a june hike. and then you had larry fink saying all right, inflation is coming down, but i don't see us getting below 4% >> so you're mary daley. a few minutes after, let's say hours after, the producer price index came in. it fell in march what i'm betting is that does

not change for rhetoric is what i'm saying, that number does not get involved in her calculus meanwhile, we had the senator here from massachusetts, elizabeth warren what did she say there should be some people investigated and fired, and what we should really care about is the federal reserve doing a little regulation. i'm not going to let someone come on and obfuscate about whether or not to tighten when we don't have an analysis of what went wrong, and we don't have any certainly if we get bad loans, we're not going to have more problems. why aren't they talking about that what is the matter of factoring in the possibility of some bad loans? >> nothing many of the banks are well reserved for taking those charges. >> when you hear tomorrow there are bad loans, are you going to say are they reserved enough

>> listen, it's going to be a very -- when it comes to earnings, big banks that you are looking at there, we expect many of them took in deposits during that tumulti -- >> no question it will -- [ overlapping speakers ] -- that are paying more for the deposits they still have even though they can lend at a higher rate, there may not be as much demand given how high the rates are. >> i think that's true >> so the profitability for many banks is going to be impinged. we know that that's why many traded off not because we think they're going to go into receivership, but the profitability is going to be hampered >> then again, shouldn't that be figured in your calculus look, you can do it on one hand or the other we have seen that, but that's mary daley, very important person

and i don't hear any of the things that we would talk about. by the way -- >> if we have a recession, you'll have more -- right now we're much more focused on commercial real estate loans, and some of them are large there is a belief that reserves are decent and it's going to be over time and there's equity that will reduce the value of the loans and you'll get restructuring. it's not seen as an immediate danger >> no, it's not. i think all of us know that if you have -- in the government, if you have staff, which is dedicated to this concept, and they're in disagreement with the people who the staff reports to, what that says is dogma opposed to flexibility and dogma is 2006, okay? i don't think it's going to be anything like 2006 because all the banks had problems but look, i'm concerned. fortunately, the staff has a very good outlook on it.

the people who are staff i presume are not -- that's not mo, larry, and curly >> no, but they don't have to have their name attached to a speech >> exactly i would have liked mary daley to start the speech by, can i please tell you what went wrong at silicon valley bank and it's not going to happen at first republic, and we have other banks we're looking at what, because i'm stuck with this factual analysis? >> her point is, they're doing their internal review. you'll hear more in may. that's what she basically said >> you know what they're doing look, i demand this. we should demand it as people. we have a huge number of failures because someone didn't do the job david, have you ever not done your job and gotten fired? >> thankfully not. >> because you did your job. but if you hadn't done your job, there could be -- i've got

another word for it, i just came up with me conseq consequences >> we'll continue to ask the question whether or not there was enough oversight from the san francisco fed and why they didn't act sooner to rain in the interest rates they were not aware at svb how quickly -- it's just a difficult thing. you would have asked the feds, all right, if they have to predict march interest rates, so you're going to be in danger in april of next year >> i just think you have this -- there's a pass being given that most of us would not be given a pass i'm not saying she should resign i'm saying senator warren said she should resign. >> and you don't disagree? >> there is 100 senators

not 107, 86, but 100 one of them sat there. she's a very smart woman, senator warren [ overlapping speakers ] she was here, and she basically said, i wanted to talk to her about fed policy, but she didn't want to go there why? because she wanted to know what happened i wanted to tell her -- she's a serious individual, and she -- >> i'm well aware. >> she was not thinking about how great the quarters are i was on a subway going to a game t

how they did that quarter was awful. look, i'm just saying when you come up, and she comes up and says, i don't have any faith in her analysis, because if she -- maybe she's done the work of her district now and feels more confident. but i want her to say we need to find out what went wrong give or take >> her credibility, in your view, has taken a hit. >> yeah, thank you look, you'll have people in the nba, okay? they will say, you know, we didn't make the playoffs and we screwed up but not in this world. because the nba is real money sorry, i am thinking about this, and not happy with someone coming on our air, and says nothing about the fact that the banking crisis was in her district >> i understand. retail sales are tomorrow and

amazon today andy jassy with her letter to shareholders, committing to cost cutting and investments, calling what he calls one of the harder macro economic years in recent memory he writes the plow unit faces head winds as companies are being more conservative on spending here's what he said a few moments ago about the future of the company. >> i am very optimistic about what lies ahead for amazon if you look at our two largest businesses, if you look in our stores business, our retail business, we still only have -- even though it's about a $434 billion business, we still only have about 1% of the worldwide market segment share in retail and 80% of it still lives in physical stores. and if you look in our aws business, which is about an $85 billion revenue business, about 90% of that global i.t. spend is not in the cloud

so if you believe those equations will flip over time, which we do, we have a lot more growth in front of us. >> the growth potential and also anti-trust, right? >> and they've got artificial intelligence they're only going to lose about $8 billion, that's not much. something really interesting, he said that long-term stocks are a voting machine, and short term they're a weighing machine >> other way around. >> that's leading up to my joke. i'm trying to -- ladies and gentlemen, lenny bruce here we go july 12 of 2021, the stocks hit 185. and now it's at 97 so what kind of time frame is the weighing machine want to go back to willky? >> buffet says that all the

time, and he was talking about things that happened in the '60s, the '70s, the '90s >> i like jassy. >> go back 20 years, it was an incredible generation of wealth. come on. that is quite a turn around there over the last couple of years. you're still talking about a return well above -- what's wrong? why are you taking this so hard? >> because my childhood trust is getting crushed. i don't know how about the fact that they hired hundreds of thousands of people they talked about food walmart plus i think can crush them with food they are talking about health care i don't know, one day i went and health care was at the top i went and bought some coffee. alexa is sending me things about sneakers, because i said i needed a new pair of sneakers. i want to know when the results

are coming in here, because i think it's perfectly realistic to say we're going to move into health care, and that's great. so are amazon -- so is cvs, is is walgreens >> they spend $8 billion a year or more on media i don't know what they're getting out of it. >> look, i just think -- remember, i think jassy is great, but i want the year of efficiency >> yesterday when becky quick -- or buffet answered that question about paramount. he sounded like he had no idea why they own it. i ask you the same thing, why do you own this thing >> his record is his record, how about that meaningless concept i hear all the time >> just sell it. >> what did i do with boeing >> i don't know.

>> i'm not saying andy jasy should say i'm in a loser, but mark zuckerberg, he's gone through a year of efficiency, and amazon should be studying him chapter and verse, okay? amazon should study zuckerberg >> they've got 27,000. you want multiples of that >> i want zuckerberg gained. i'm being told we have to go, and i'm not going. you know why >> you spent a lot of time on mary daley >> let's go. i might give you a daily analysis of mary >> we'll get to some of the other movers delta is a big mover we'll bet to warner brothers, a bunch of apple news. and futures are hanging in there. don't go away. ta— from hvacs to elevators to lights.

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coming on the heels of wbd yesterday, max, of course, the streaming product going live may 23rd at $16 a month. we'll get cramer's mad dash after a short break.

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welcome back we'll have opening bell for you in a moment. we let's talk a little merck. >> dr. andrew wong has a very cogent piece talking about where merck is going up. this has been the winner there was a time when a company like merck would move like this and we would sit here and talk about merck. that's been their strategy, but this tells you about a hematology franchise that i find to be very exciting. you know yourself that merck is working on a lot more

i think we have to be thinking when this stock pulls back, it's a very good place to be, if you believe the gdp is -- >> did not do particularly well in '21 and had a breakout year last year, very different than the broader market what do you think of a relatively new ceo >> very strong one of the things i like, david, and they don't talk about this enough, i remember when my mom died of dancer and the doctor said, we can't cure your mom i would say, how about maintenance? let's maintain my mom. he said no, your mom is going to die soon that's what i mean when i say i can't cure your mom. the discussion is not like that any more it's i can't cure your mom, but we can maintain her. this is an amazing time in america and the world and merck is behind a lot of that. merck won't say it, but i will

when you get that death sentence, that is a new way to recommunicate. >> obviously bristol-myers, as well we'll keep an eye on merck and other names as well when we get to the opening bell a few minutes from now our customers don't do what they do for likes or followers. their path isn't for the casually curious. and that's what makes it matter the most when they find it. the exact thing that can change the world. some say it's what they were born to do... it's what they live to do... trinet serves small and medium sized businesses... so they can do more of what matters. benefits. payroll. compliance. trinet. people matter. ♪♪ alex! mateo, hey how's business?

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one of the numbers yesterday were these q-1 revenue figures a lot of this is centered around growth in china. >> i want to say it's centered around bernard. >> he's certainly the richest merchant of our time, no doubt about that i just wish he would reopen the

21 club. i always liked it, he owns it. >> he's a remarkable man by the way, gary freeman -- [ inaudible [ opening bell ] >> he talks about that man who understands what people want i think that's right bernard is probably the smartest person on earth about knowing what people who have money want. >> we'll get to that in a second right around 4100 on the opening bell celebrating the recent listing of fs credit opportunities corps. jim, yesterday, speaking of rh, a list of 25 earnings trade

ideas. on the upside, it's auto zone, macy's, deere. downside, airbnb, rh -- >> i disagree with that about airbnb i think the numbers are going to surprise to the upside rh is very difficult, because when the ceo is so down beat, you tend to be down beat you split the drug in half, just cut it in half if you do that, use a pill cutter but rh, honestly -- >> do you carry one around with you? >> only when necessary but rh, i went to rh the only problem with rh is that you need to have a big enough house, like maybe the white house could handle the size of rh or anyone one of those palm

beach places that many people -- you know, they do six month and a day. >> i know it was unbelievable. >> i'm here to talk uconn basketball >> why are you trying to be serious? i'm not sere to be serious >> he didn't know he was on a news program >> netflix is going to have a good quarter i don't know why i said that i just say what you say and repeat it. it's interesting to focus on because it is up 3%, guys. we are going to hear from the company next week. we did have that yesterday we got that streaming announcement from warner

brothers discovery, much of which had already been known to a certain extent proir tior to . the real focus for these companies is the ad market and whether in fact we're going to see an acceleration in core cutting. i'm talking paramount, disney, our parent company there's still a lot of cash flow that comes from having linear cable networks that people pay money to watch every month that is still a key cash flow contributor to many companies. and if core cutting is accelerating, that would be a bad thing. however, it might be a good thing for netflix. >> so there was a moment in that otherwise -- >> maybe that's why netflix is up >> they did say that the advertising, this tier of

advertising is going quite well. to be fair, warner brothers did run into the meeting but if you're going to have a big population of the only ones free, there's another population that is willing to pay less and they'll take it. they need to accept it so i felt that was the clairian call by netflix, not warner brothers >> there is this belief we're terms of streaming content >> are we saturated with good con content or just saturated? >> there's no room in the consumer's mind to absorb new ideas. >> so i come home at night, and my wife has apple plus on. there is just content in places where she's laughing her head off at ted lasso

i come in, had a hard day. i walk in and she's like, ha, ha, ha what the hell? what is so damn funny? "ted lasso." >> warner brothers still does make content for other platforms and sells it do you like "shrinking?" >> i love it you want to talk about who you are, and i love harrison ford. i do think, david, i do think that if you have something that is good, then everybody watches. you need good content, not just content that tastes good >> do you get in front of netflix next week or not >> yes >> goldman today reiterated a sell >> i don't want to be like jassy and say you should own amazon. i just think that is completely funny.

>> i gave you a gafaw on that. >> but netflix, you play it for the fact that when you go in and you see what's number one in america, you watch it. because you know that everyone is talking about it. it's -- david, when you have younger kids and it's not working, i know it worked for david, there's a thing called codes of luck. i know this is going to be heavily psychological for you, but what happens is there is ways to talk to people and i think -- i said this to ted, i said you are giving me a way to communicate with my family that's what netflix is about >> they give you currency. >> it's currency and look, this is undeniable it's not easy to put in earnings per share. but you find out what's number

one, two, or three in america and what did you think of it >> it's a way to connect i hear you look at that, the stock continues to move higher as you talk about this. >> that's worth something. >> yes, these cultural touchstones. >> a guy comes on from amazon and says do you want to know what happened to the lakers last night, ask alexa no, i'm not going to ask alexa >> amazon shares are up, despite in the fact in the letter mr. jassy pointed to head winds for aws. >> i know where you're going >> aws is the single most important component of the company's growth, and it's running at 85% run rate. at a juncture where it's critical to stay focused on what matters most to customers and did say, at least they're seeing

perhaps some short-term head wind >> i knew where you were going you were talking head winds. so how could i not ignore, in 2015, ibm bought digital assets from blackstone. and the stock was at $140 when they did it. >> not the weather channel, but everything related to it >> which they were going to feed to watson. guess what >> they don't own watson anymore. they got rid of weather, too >> how do you like that? >> at half the price they paid for it >> head winds. >> i remember watson do you remember when we -- >> didn't you beat watson in "jeopardy? >> no. they were pushing watson hard. and then they just -- well, they've been outrun completely

in terms of ai they would argue differently, i'm sure >> and then nvidia it's very interesting, amazon talked about its own chips yet, they're in the consortium with nvidia. look, i like jassy i'm giving him a hard time not just because he's a giant fan. you see that chart that's the upside down amazon chart. we talk nvidia and we think ai, and the chips are the go-to chip >> did you see the regular gaming chips >> did you listen to jassy he talked about the fact when it comes to generative ai, he said he would write an entire letter about it andrew asked him about platforms

such as chatgbt. take a listen. >> we have been using machine learning in a very deep way, in every one of our businesses. we have our own large language models we have been working on i

see many kceos don't get enough lunch, and i ask every one of them what they think about chatgbt. >> they are all thinking about it and many are using it i had lunch with a ceo who was using it to generate his performance reviews for his top 25 managers. he's like all right, this person is -- he gave chatgbt five adjectives and it wrote the review for him >> this flyer fly chatgbt, that's what i need let's say something is off for the month of march the chatgbt will say, interesting. >> did you guys happen to see the generated, completely artificially generated interview

between joe rogan and sam altman from ai? it was an interview that was done, generated and then language -- the voices were theirs, all ai they never did the interview >> wow >> and you can watch it. they don't have them talking >> like a jay-z song never sung by jay-z. that's what you're talking about. >> they're taking all the stuff sam ever said and taking rogan the way he talks and putting it together in an interview, and you learn something from it. that's frightening >> really frightening. when i was at harvard, i was in charge of this project, the plagiarism project my job was to find plagiarism. it's really hard to find it. now everything is plagiarized. i found one, david, wow, i mean,

it was worst than the san francisco fed. >> did you get him expelled from the university >> i would rather not say how it worked out i meant to say cap and gown, nah. >> one of the abuse cases of chatgbt continues to be quick service restaurants. i notice today, mcdonald's now up 13. citi, pepsi and chipotle >> chipotle is going to have a very good quarter, if they bring back brisket it would be a monster quarter. the person understands everything

mcdonald's said they wanted the personal touch so just program personal touch into the thing personal touch is like, do you want catchup for that? i don't know what is a personal touch at the window, what is it >> getting your order right and trying to sell you something else >> inference people who like diet coke tend to like, i don't know, they like the egg mcmuffin without cheese for 339 calories >> maybe they'll offer you a deal on airlines delta says, we were quite pleased. the guide for the next quarter, way above estimates. >> that was amazing, and they did not talk about business travel which i know what david is focused on the first five -- okay, i went on a mission yesterday he was talking about how is it

that -- i go to someone who knows more than anyone else in the world about this first five rows, people paying the same as everyone else. in the old days, the first five rows paid what everybody else paid >> why >> because businesses are idiotic and not price sensitive. >> but your point is, that's no longer the case, because business travel is down? >> the first five rows are taken by yahoos who book on booking.com about how much they are paying the old days, the businesses, who are now getting on zoom, the first meeting used to be okay, i'm on first class, what is the price? i don't know $8,000 everyone else in the back is paying like $500 it's the first five rows that is the secret to profit you took one thing out of this other than being hit in the head, it's that. >> interesting point

i would put on top of that, transpacific flights, transatlantic flights. >> how do you like that? >> i'm puzzled why their comment was so much more than american's the day before >> he's just a great spokesman for the industry look -- >> what's going to make things better is the question if you're at capacity -- >> return of business travel >> the return of the higher margin traveler. we're not going to get that. >> why, because of zoom? >> yes, there will be some >> we are moving towards that, although it's still three days away, most companies

most are still three days a week, and nobody is ever going to push for friday i ask every ceo, and that's the answer >> i find that unbelievable. >> i got to three, i don't know that i can get to four, and i'll never get to five. >> maybe the down 5% to 7% fabled earnings we're going to have is because people play video games on friday. >> then they have lunch and then they try to sharpen up the call to duty. >> nobody works on fridays >> barclay's goes to 141 on take two, to your point >> take two last quarter was disappointed so it's possible, maybe they have some release that we don't know about >> speaking of games, really quick. wnyy and lvs it goes to 68 on lvs >> and formula one, we talk about great numbers.

this is the return of the china consumer david, you have not hit in terms of consuming how much ali baba do we have to consume to get that back to where it was? >> we know that softbank continues to sell most of what was once the largest single position of any ownership position in the company. they do it -- they continue to do it through forward contracts. there it is. you know, most of it is going to be gone, which is amazing. one of the great investments of all time given when they made it but they are no longer the large percentage holder they once were, and are obviously moving lower and lower. >> we have not even mentioned pioneer. ♪ ♪ >> sheffield was interviewed at

a conference what did he say, they're not for sale, pioneer? >> no, but if you say oil is going from 100 to 90, that means exxon is not getting that company for under $300 david, i don't know about the whole exxon story. saturday morning, i was emailing jeff marks, my partner on the trust. at noon, it said they might do it by 5:00, it was like, you know, underneath the sports section. >> i thought the bigger takeaway is that pioneer was potentially for sale >> it's always for sale at the right price, david that's something i've learned. >> i like it >> take a look at bonds this morning in the wake of ppi, another cool number which we have gotten in the last week and a hatch. we had the ten year back to

about 3.4. the vic is around 18 1/2

two years ago, india made up about 1% of iphone production. the story on the tape today says that's gone 3 x, going to be 7% or so, in addition to reports they're looking to make mach books in thailand, all part of the push to graduate their supply chain out of china. >> lines all the way around the country for this you want to be long apple ahead of that. >> we'll be looking for pictures of cook innd iia dow flat here and s&p hanging on to 4103. don't go away. ah, these bills are crazy. she

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good thursday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with david faber live at post nine of the new york stock exchange. sara eisen is on assignment this morning. we're going to see her later on this hour. markets, of course, lost some of the cpi gains on wednesday another shot today as ppi comes in a little bit cool year on year, up 2.7, down from the 11% last year. >> we are 30 minutes into the trading session. here are three movers we're keeping an eye on. we talked about a number of these not long ago goldman sachs, for example, reiterating the sell call on netflix, this as that company heads into earnings next week, i believe tuesday after the bell stock kind of strong so far. another media name, warner brothers discovery, one of the

biggest laggards on the s&p. not really not really it was when they wrote this. this is after the company revealed details about its streaming platform, new name max. that was yesterday and finally, alibaba is headed higher after losses yesterday. you may have seen that then we got filings that revealed softbank is moving to sell a great deal of its stake, one of the great investments ever made by softbank or any other investment firm when they bought that company, of course, carl at very, very low valuations, but they are now out of a lot of it. >> yes a lot of technology, in fact inflation read meantime as we mentioned, ppi falling to levels not seen in a couple years richmond fed president saying while the worst is probably over, the fed's job is not take a listen. >> i certainly think we're past peak on inflation, but we still have a ways to go and you

mentioned it came in at 0.6, multiply by 12%, is 7% year over year core services, 0.4, multiplied by 12 is about 5 get down to 2%, i think we're still a ways from there. >> this as investors work through the pop in jobless claims with the revisions now. fed minutes and a lot more steve liesman is here to roll some of that up. hey, steve. >> going to do my best the big beat on wholesale prices is raising optimism about the inflation outlook and lowering the outlook for fed rates. here's the numbers that we're talking about. headline down half a percentage point versus goose egg that had been estimated a little bit hotter on ex-food and energy, take out trade, which is a measure of profit margins and it's actually -- it actually beat the estimate 0.1%. you can see that in the next chart. food still having some inflation in the wholesale pipeline there. trade services down 0.9%

that's a measure of profit margins from wholesalers and retailers. transportation warehousing, another big decline. a lot of the decline came from energy down 6.4% ian shepherd from pantheon writing the surge in margins in '21 and '22 was a key driver of inflation but the improvement in supply chains and the switch back to spending on services mean margin inflation has dropped. you can see here, ppi led the way in the inflation surge rising ahead of consumer inflation and began falling before consumer prices it suggests price pressures are easing up the supply chain and could have a positive impact on services inflation, that's the thing that the fed is watching most carefully the numbers come as the fed minutes yesterday showed the fed staff making a mild recession case, concern over tightening credit conditions from the banks taking two years to work out we'll get a chance to talk to austin goolsbee, tomorrow on "squawk" at 8:30 since taking

over the chicago fed carl >> steve, appreciate that. steve liesman, a lot to get to, including the banks on the way tomorrow san francisco fed president mary daly talked about credit conditions yesterday take a listen. >> we knew that credit conditions were tightening and tiedening broadly. when looking at lending we're seeing data coming in and don't see a pattern forming yet. there's general declines in lending activity, and we'll be watching that carefully. i feel confident when i say, as many have said, chair powell, secretary yellen, vice chair barr, the banking system is safe and sound and resilient. >> as we said, financials start to begin results tomorrow. our next guest's firm cut some system for 2023 by about 8%. let's bring in tom, ceo of kbw stifel company, who is here as he normally is prior to the season good to see you. >> good morning, carl. >> tomorrow is it going to be -- is every eye straight to the loan figure and reserves >> i think the big story is

what's happening with net interest rate income we had peak net interest rate income, the fast majority of revenue for banks. we are looking for net interest income to be up 25% year over year, but down 4% the quarter, which demonstrates what's happening to the downshift in revenue growth in the banking industry and really, i think the harder the question is, covid happens, $5 trillion of deposits find their way into the banking system we go from 13 to $18 trillion in deposits purposefully due to fed policy, the move money is leaving. jpmorgan has $600 billion on deposit and we think that will be $300 billion as deposits run out. it's the story of what's happening to the deposit narrative that it's going to -- i think all the eyes will be on. what is that going to do to earnings as well as what is that

going to do within the industry between the big and smaller banks? >> meaning deposit rates go up everyone tries to stay competitive >> so treasuries are extraordinarily competitive with deposits today by the way, the banking industry knew this and was planning for it they knew that these were surge deposits from covid, so these surge -- we're still about -- have 20% of the way to go for the excess of trillion and a half of surge deposits that we think are in the industry. so deposits are leaving. the industry was managing it we had a critical moment in march. but we're still going to have to manage our way through this moment i think that's what investors want to know, how much do they have to pay up to keep deposits. where are the deposits going and how do investors feel about the quality of the balance sheets? i think they will feel pretty good, but i think those are going to be the questions. >> i wonder, tom, looking here, it's a tiny bank, bank of south carolina, it could be perhaps reflective of what's going to be the overall tone in the quarter.

they say our 2022 first quarter was behind in our profit plan for the first three months because of a precipitous increase in our deposit costs to meet the intense competition amongst banks, brokerage and the u.s. treasury. ant so many regional banks facing that same problem and you can get more from loaning but we're talking about credit tightening and the fact that they may not want to make those sfloons. >> let me tell you what our earnings models for the 225 banks we follow say, which is what you said, we think revenues for the industry for spread lending is going nowhere the next two years because of all the deposit pressure that's going to -- so we think net interest income is going to be lower by the end of the year instead of higher because of what you just said it's because of this temporary surge of these deposits are leaving, so we got to figure out what the right size of the industry is. so the industry is losing deposits and then there's competition within the industry. >> do we think that bank managements have also adjusted

to what happened in svb? i'm not talking about their misjudgment in terms of taking long-term risk on interest rates, i'm talking about the $42 billion that left in four hours, four hours. >> 100% what you just said like, believe me, everybody is focused on that. that's going to be another story of the quarter i think the observers and analysts will like it because they will see how much the industry almost overnight solidified their balance sheets. you can see it in the liquidity drawn down from the fed, and overnight, the light switch went on i'll tell you, we're going to spend the next couple months, this important, what are the policy responses there have been about ten banking crises in the history of the united states, about one every 20 years how can a bank lose a quarter of deposits in four hours and then be lined up to lose half their deposits the next day?

so that's unusual. by the way, i hope i just didn't alarm people because this company is silicon valley was unusual with their concentration i believe in the idiosyncratic case, however, the industry i think is very sound and from what i in speaking to management teams, i think the treasury and the fed are trying to work very hard to make sure that things stay stable and i think they are more stable than where we were then doesn't mean we won't have other accidents, you know, along the way that i think can be managed, but i think it is stabilized. >> on the consumer, the cash pile looks over the fed data lately is still there and credit card utilization relative to 19 is still pretty light, so would you expect reserves to be aggressive or not? >> not in this quarter we should all expect that there are going to be credit problems because it's been incredibly surprising how long we've had none i don't think the first quarter is where it is and if you want to know where to look, the ten qs when they come out will have

a lot of discovery on classified assets and special mention loans. that's the early warning system. so that -- we're going to be talking about that when those reports come out, but the -- this bank crisis was the first big event following interest rates going up a lot there will be more events. interest rates have plomoved a . it is the purpose of the policy to slow the economy. we're watching commercial real estate we wrote a report on march 7th about it that's a big story as the year unfolds. >> we'll talk about that real quick, big versus middle or small? is that dichotomy stronger than ever >> here it is. i'll tell you what's in a recession. investment banking revenues. okay that's going to stop we have the fed stop raising rates, the capital markets reopen, we like the big banks right now and also say, the stocks we like, a lot of them have 5% dividend yields. our analysts feel pretty strongly they're not cutting those dividends.

you can buy -- there's a lot of bad news in bank stocks. it won't take much, i think, to get the group to move. i would shift away from the spread liners -- last year when i was with you i was saying be all-in on the spread lenders we've changed and think you buy the capital market firms like morgan stanley, before the turn, because our models which i think are pretty conservative, 15% return on equity this year, 20% return on next year's earnings if that's what you get while waiting for the turn that's pretty good. we like morgan stanley. >> coming off of that upgrade at goldman yesterday at ubs thanks great setup. we'll see what tomorrow brings. >> thank you quick programming note, don't miss blackrock's larry fink with us tomorrow morning breaking down his quarterly numbers and why he sees, quote, stickier inflation probably not going below 4% any time soon. >> as we head to a break, here's our road map for the rest of the hour concerns about commercial real estate, you heard tom mention that, they continue to swirl in the wake of that recent banking

turmoil. we'll check in with rxr realty scott recher who will join us and see what he's seeing later in the hour. >> what to do with amazon as andy jassy remains bullish as ever despite cracks in the consumer. >> an exclusive, imf managing director joins us this hour with her take on the global economy, inflation and a lot of other things

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we see a couple different things right now on the consumer side, consumers are spending, but they're just much more careful about what they're spending on. we see a lot of trading down in price points. >> trading down. >> we do if you have a variation of a product and you might have seen more people shopping at the higher end, you see people trying to save money wherever they can people are very deal conscious it's why we spent so much time with our selling partners trying to find great deals and bargains for people. >> amazon's ceo andy jassy on "squawk" talk about the state of the consumer on the heels of the shareholder letter that's where we'll start with yousef sculley who has a buy rating on the name and a target of 144 wow. what gets us there >> well a few things so just being back in on what andy was just talking about, in terms of the consumer remains pretty healthy, and our intraquarter checks leveraging

some of our proprietary credit data or card data would suggest that, you know, the quarter has tracked really well. even higher end likely higher in expectations the fact that, you know, about 27,000 employees which which estimate will save between 3 and $5 billion and that, remember, on the back of them doing maybe $12 billion in operating and income last year, right. i think all these indicate that, you know, the fundamentals of the business remain really strong the one caveat is that the cloud business is definitely slowing down we've seen it throughout last year, started up 37% and up 20%. we think it's going to trough in the low teens. that's really what, you know, what gives pause to some of the bulls, but overall, we think the fundamentals are really strong even in the year like this, we still expect the company to grow 10% or close to it with material

improvement margins. >> aws is the profit engine of the company, is it not i know it's running at $85 billion revenue run rate, enormous business, still growing, but when they say short-term headwinds shouldn't that concern people? >> it does honestly, i think that's probably why the stock has up until now been trailing 12 months, down somewhere in the 34, 35%. our internet index only down about 24%. i would argue that's already it something that's baked into the stock at the current levels. >> so it doesn't sound like you think their reduction in force needs to equate say meta's on a percentage basis >> no. no i mean, the two work forces are different, right amazon has over a million employees. the vast majority of those are in, you know, the distribution centers and whatnot, but i think if you just look at the office potential, the percentage of office workers that have been

removed from amazon relative to meta, then i think you probably are looking at something comparable. >> yousef, you're talking about with your price target, adding over $400 billion in market value to this company. is it just going to be executing properly, or is there something else that's part of that target that's going to happen here to get that ekreegs >> honestly, it's going to be execution first and foremost that said, they are doing some really interesting things around new niinitiatives that could add billions of dollars. yesterday we published a deep dive on a new initiative that launched last year called buy with pride and we estimate 2026, within the next three years, should add an additional $10 billion to revenues and dramatically improve the capacity or the efficiency of their delivery that's effectively allowing third-party merchants not on the amazon platform today and that's like 50% plus of the market for

online commerce, to have an opportunity to offer the prime promise. that's something that, you know, it's going to be really hard for platforms. >> yousef, we'll see quite a letter and quite an interview this morning the stock is getting love at the open yousef sculley on amazon today. delta did post a loss for the quarter but shares are higher we'll talk about why after the break. stay with us

shares of delta down almost 3% after reporting a loss for the quarter. over to phil lebeau he caught up with the ceo of the company earlier this morning phil >> david, those shares are moving lower the conference call with analysts has begun and we were listening to the beginning of it ed bastion saying the same thing he told us on "squawk box.

you can look at the q1 results, yes, it is a miss, 25 cents earned versus the street expecting 30 cents, revenue lighter than expected, but ed said i don't consider this a miss we guided the analysts that capacity would be slightly impacted due to storms in the first quarter, told them that a month ago and if they didn't change their system, so be it. their feeling is fewer flights because of cancellations is behind the 25 cents versus 30 cents. his focus and what people are asking questions about today, the q1 guidance, well above what analyst expectations are coming in at $2 to $2.25. the street at 1.66, revenue 16 to 17% higher compared to a year ago. street 14.7%, and record advanced bookings for the summer here's bastion during "squawk box" talking about how strong the consumer is right now in his opinion. >> the consumer is a prioritizing spend they're shifting out of certain markets, shifting out of goods, moving

into the service world and by the way, they're moving into the experience world and the premium experience is where -- is the sweet spot where the spending is going, delta's bread and butter. >> take a look at the other airline stocks and how they're moving today, keep in mind that what we're seeing at the beginning of the airline earnings is q1, it was supposed to be really strong, and generally speaking it was strong relative to what it is, but it's q2 and q3 in focus and in particular the book, advanced bookings and the strength of the consumer and if you listen to ed this morning on "squawk box," i've talked to him for a number of years and not seen him this bullish or this optimistic about the consumer and the state of the consumer it will be interesting to see what we hear from the other airlines remember, we start hearing from them next week with united and alaska and then american and southwest the week after let's see how their feelings are about summer bookings compared with what we heard from delta

this morning. >> good stuff. great interview with bastin' on stock. >> the imf trimming its global growth projections as financial sector risks continue to loom. we'll check in with managing director kristalina georgieva and an exclusive you do not want to miss. stay with us ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't

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i'm dominic chu and here is your cnbc news update at this hour president donald trump is back in new york set to testify in a $250 million lawsuit brought but attorney general letitia james alleging fraud in his real estate business practices. in a series of posts on the platform truth social, trump called the impending deposition by the new york attorney general just another unjust and ridiculous persecution of the 45th president of the united states meanwhile a federal appeals

court allowing a widely used abortion pill to remain on the market with significant restrictions the court is requiring in-person visits to your doctor to acquire the drug and preventing the pill from being sent to patients in the mail. in japan, ordering a brief evacuation overnight urging residents in hokkaido after north korea launched a ballistic missile test towards japanese waters officials retracted the orderer saying there was no possibility of the missile landing near the island i'll send things back down to you. >> thank you we are under an hour into trading. you can check the markets right now. up across the board with the nasdaq by far the best performer. let's get over to bob pisani and get moreon what is going on today. >> it's groundhog day. 4100 on the s&p. we're trying to break out, but we can't the sectors, the important thing about today is, kind of even, about 3 and 2 advancing to

declining stocks what i find disappointing industrials. two big names reporting today. we had fastenal and delta, both numbers looked okay to me, delta looked very good, and yet they opened up and sold right into that ingersoll rand and illinois tool, they've been on a run, down today we had price cuts over at wells fargo. i think that might be affecting them as well the important thing is the market is grappling here about what it means to have a mild recession, which was the comment yesterday that we saw here so in a real mild recession f that's what happens, as the federal reserve staff said, you have a much different stock market than we have right now. you see earnings down 10 to 20% your see a multiple contractions of 20 to 25% is any of that happening no we're not close to anything. let me show you what the estimates are for the earnings for the four quarters here, 2023 the important thing is, there's a mild earnings recession in the first two quarters and then a

rebound, those numbers in the third and fourth quarter would be historic record earnings are expected to be up slightly this year, not down 10 to 20% the market is positioned essentially against any kind of soft -- in favor of soft landing and against any kind of mild recession that we've got i'll show you the number that's even more interesting. we had about $220 of the estimate for the s&p 500 look what these numbers where most of the strategists are. david kostin at goldman, the only real optimistic, citigroup, wells fargo, jpmorgan, bank of america, barclays, all of these people are around the $200 levels, 10% below where the earnings estimates are right now. carl, somebody is wrong. the street is positioned for essentially no recession at all, and some of the strategists believe that they may be overly optimistic back to you. >> all right bob, we'll see

bob pisani, thanks. imf managing director kristalina georgieva spoke at the world bank spring meetings forecasting that global economy is headed for the weakest growth in over three decades. sara eisen joins us from d.c. to wrap up the highlights from her interview. hey, sara. >> hi, good morning, carl from the imf where there is no shortage of issues and challenges to tackle here relating to the global economy for these finance chiefs and global central bankers gathered here for meetings today from the bank failures in the u.s. to inflation, to higher interest rates to war in ukraine. i spoke to the managing director of the imf, kristalina georgieva, started with asking her about the inflation numbers we got out of the u.s. this morning, more evidence that that high inflation rate is coming down here what's she said about it. >> you see, what we should expect to see, that the action

of the fed is going to pay off, and even more importantly, it has been a synchronized action of central banks all over the world, that has given us this trajectory in the right direction, inflation going down, but core inflation is still high, and it is sticky so the fed will have to persist in pushing it down why do we need that? without price stability we don't have a sound foundation for growth. >> you see more work to do here for the fed, more rate hikes, more than one? >> i'm not going to make projections of how many. what i can say is the fed will continue to be guided by data, and as long as core inflation is not in the territory it has to be, the fed will have to persist. what we expect is that the -- this stickiness of core inflation is going to go through

this year, hopefully we see melting away next year. >> the problem is the economy has also cooled off and we're seeing increasing evidence of that so the question is, can they get away with continuing to hike without dragging the u.s. into a deep recession >> what is bad news turns into good news. the fact that economy is slowing down, of course, would lead the fed to lead to a break on policies the skirmishes in the banking sector are actually helpful because they do need to, especially medium sized banks, being more careful in their lending practices. they provide 30 to 40% of financing and meaning that they are helping the fed by being more prudent for the fed not have to do that much. >> in other words, the whole banking crisis is very disinflationary you see it. >> not very disinflationary, but

it has been a helping hand to the fed. but let me correct you i don't think there is a banking crisis. >> okay. >> there are vulnerabilities >> a few banks were in crisis. >> that we should have expected. let me say we have lived through all periods of very low interest rates and ample liquidity, and then very quickly, we moved into high interest rates and restricted liquidity of course there would be vulnerabilities to be exposed. and what is positive is that action has been taken very swiftly when that happened. >> is it contained >> at this point, we see it as being contained, but our message in these meetings, be watchful, vigilance of supervisors, regulators, fed, the finance

authorities here, this is what is going to make a difference because there may be more of this vulnerabilities to come to life. >> there's also a question of just how much banks are going to pull back on lending and what sort of credit crunch we might see. it's early yet, but what are your expectations there? >> i mean, at this point what we see is that labor markets are still strong, consumer demand is still very strong, and to banks, it says there is business out there, so a credit crunch not on the horizon, but some care in lending practices yes, and actually this is a very healthy thing to have. >> so this was one reason that the risks in the financial system, won't call it a bank crisis, you guys were very cautious in the latest global economic outlook rocky outlook you called it, what are y so

worried about? did you mean to strike such a cautious tone? >> we did mean to strike a cautious tone because we have to be very clear that we are moving in a different stage of the cycle with the interest rates inevitably having an impact. cannot be that interest rates go up and they have no significance for how much businesses and households borrow and how much the financial institutions are willing to lend. there is impact, but we also are very careful to say that this is a prudent approach to shift in financial conditions tighter financial conditions is what we lead with today.

they have consequences. >> i'm wondering because secretary yellen yesterday made some comments that we shouldn't be too negative on the global economy because there are lots of positive things happening commodity prices are down, financial sector stability, china has reopened in other words, maybe you were too negative in warning about the outlook? >> you know, that's a very interesting question are we negative? we're saying growth this year is going to be 2.8% while that's way above any recessionary fears, but 2.8% is not a fantastic growth number, and more significantly, when we look into the next couple of years, we project growth to be around 3%. this is the lowest we have had since 1990 the last two decades the average growth rate was 3.8% so we have to be more ambitious

around shifting the growth trajectory how can that be done well, focus on productivity, structural reforms, and very important, protect both price stability and financial stability. obviously, these are more complex tasks than we have just six months ago. >> speaking of more optimistic forecasts, you have some numbers on russia including an upgrade to growth this year and i was wondering how you are able to ascertain the data on russia and how is it that they are outgrowing some european committees, given the sanctions and pullback in western business how can that be? >> on russia, let me just state the obvious, russia is going down when you look at what is going to be the prospect of the russian economy over the medium term, there is no reason to celebrate. this is a depressing picture russia is leading the country.

the strong consumer base that europe offered to russia gone. it will never return and technological advancements that would come with russia being integrated in the world economy also gone. in the short run right now, russia is pumping a lot of money as stimulus into the economy it has been actually doing some maneuvers around setting oil to -- selling oil to countries less critical of russia as well as using channels to go around the sanctions. >> also wanted to ask you about china because there's a lot of optimism in the markets about the reopening. how is it looking to you as far as how fast the comeback is and how robust the growth outlook there is >> it is a remarkable turnaround

in china the reopening immediately led to a jump in consumer spending and also revival of the economy. we are projecting 5.2% growth rate for china for this year good for china but also good for asia and the world economy because 1% growth in china translates into 0.3% additional growth for the asian countries, and it is very clear that this year asia is the one that is carrying forward the world economy, two-thirds of growth comes from asia >> and we talked afterwards about the increasing tensions between the u.s. and china and i asked her whether that was actually a barrier to economic growth, carl and david, and she said yes, in a slow growth global environment you're seeing

decreased financial flows and technology transfer and trade and the security concerns are understandable, but not helpful right now when it comes to what overall is a cautious outlook. guys >> it's pretty interesting china is a double-edged sword. some of the export numbers for march up 15. chinese exports are on fire, but a large part of that is because of the trade with russia which is something you ostensibly would not want to see. >> right and the other, you know, response that she gave which i thought was interesting when i asked about china was that she pivoted to russia and said the war in ukraine not just devastating and tragic for the ukrainian people, but also, for the world and the world economy because it put in perspective that we cannot take peace for granted and i thought that was an interesting response to that question but the reason i went to russia growth, carl, it's been very controversial that imf is forecasting growth for russia both this year and next, given

what some are saying is the collapse of the russian economy. yale university wrote an op-ed this week in "times" saying the the country and they're pumping stimulus into their economy and doing trade with china and so that's kept their economy afloat which i thought was important to get on the record, just given its created kind of a firestorm the forecasts. >> sara, thank you see you back here tomorrow sara eisen down in d.c. >> okay. from fed officials to business leaders, warnings continue to grow aroun commercial real estate of course one of the largest office building owners in manhattan and a new york fed board member, otsct rechler will join us next stay with us

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the ongoing concerns with the commercial real estate market continue. office vacancy rates touching new highs in a lot of big cities our next guest warning of the

$1.5 trillion worth of commercial real estate debt that matures over the next three years. joining us here at post nine to discuss, scott rechler, chairman and ceo, and board member of the new york fed always good to have you here we're continuing a wfrgs we started. we get bank earnings started is that $1.5 trillion over the next three years a so-called crisis >> we have about $280 billion that is maturing this year, the largest amount we've had, so this is a wall of maturities think about it, most of the loans were done in an interest rate regime of near zero and find themselves in a more normalized interest rate environment. even well written loans will have a hard time refinancing without new equity being placed in under that circumstance when we spoke last time i was talking about concerns about liquidity in the market and, obviously, the events over the last month with svb and signature and credit suisse has made that much more pronounced

it went from a liquidity concern to in my opinion a credit crunch there's very little credit in the market, regional banks have tended to be the biggest lenders for commercial real estate, make about 40% of their books on business and they have stopped whether it's their boards telling them to slow down, shareholders, regulators they're concerned about. >> hard to imagine they will reunderwrite something given the economic fundamentals that are taking place in that market. >> i think it's the economic fundamental but also their concentration risk about 40% of their loans are commercial real estate and, you know, regulators are very focused. we mentioned bank earnings, i'm sure the shareholders are going to be looking at what is their commercial real estate book when they look at earnings. >> commercial real estate is a lot of things, but my number for office loans which we've been focused on is $80 billion in 2023. >> that's correct. >> who does that who does them? >> it's interesting, office and retail in many cases going

through sort of this structural crisis it's not limited to that on the office and retail sofs, particularly office. there's no lender. the only lender the existing lender you need to have situations where the existing lenders can work with borrowers where borrowers that are willing to inject capital, recapitalize, adjust to the higher interest rate environment go forward and not just firesell assets people are focused on office multifamily has been the most amount of transactions and the most amount of construction loans over the last five years and now they're starting to roll over and that is one where i think again, you will have a tremendous challenge because even if you finance at 50, 60% you're not refinancing that loan at that same balance as before. >> let's come to sort of your -- one of your bread and butter, new york city office buildings we haven't seen a lot of deals where would things, if they price, where would they price? what's the number going to be? >> that's the challenge, right

liquid market you don't want to sell it's going to be this exaggerated down number. that's the risk that could make this systemic. if banks are forced to sell their loan book today, they're going to have numbers that are much lower than what they're marked that is going to become the cycle where everyone has to remark their books and that's where you have a crisis that can be prevented. >> how >> i frame it this way, i call it land and expand the first thing you have to avoid a hard landing and that means you have to have the banks be encouraged and have policies where they can work with the borrowers to do responsible recapitalization and they did that in 2009 and 2020, change the rules, message from the top from the regulators to give room for some liquidity in the market and price transparency to move forward. on the expand side you have to expand credit. there are two ways i can think of, one is new loans done today are going to be the best loans anyone writes because they're

underwriting in the current macro environment, current interest rates, and they're underwriting with no competition to be more conservative. you should encourage banks to make new loans and don't bundle them when you look at commercial real estate, the legacy loans versus the commercial loans. second on, particularly a multifamily, fannie mae and freddie mac we should encourage them to double their capacity to help take those loans where there's illiquidity and create liquidity. >> i wonder does any new equity come in? i noted yesterday, blackstone closed a $30 billion real estate fund what are they going to use that money for? >> there's a lot of capital out there. there's little liquidity out there. there's such a fog of uncertainty around where things are going to be ultimately valued we are actively making preferred equity investments we have a billion dollars we're working on right now or to close $250 million and it's the best

investments you could make we're making loans 60%, 65% loan to today's value a 9% current return, 15 plus percent total return, i couldn't get that on equity when i was making equity risk returns this is a period where if you have clarity and conviction you want to back up the truck. >> are there any particular classes of real estate you think will outperform or perform best over the next three years? >> i still think that you have to be very focused on which of the sectors have tail winds and housing, rental housing, multifamily, i think there's some excess supply that will burn off but will do very well as we get to the other side. logistics will do well office, you can't paint it all with the same brush. we've had this conversation before, a flight to quality, the better buildings will do well. particularly when they're considered toxic you're coming in with incredible returns. 15% for general. office 25%, 30% returns we can

make on the loans of preferred equity today >> that will draw a lot of people let me quickly turn to the worries about credit conditions which you mentioned. you do have some view as a new york fed member, williams, who runs the new york fed, the president said they haven't yet seen any clear signs of credit conditions tightening. is that what you see >> on the ground, that's not what i see >> you're disagreeing with your fed president? >> what i see -- i speak to the small banks i follow around in this region and most of them are shrinking their bank book. they can't sell their loans. they can't -- so they're not issuing new loans. this is a credit crunch. i've mention this had to john that's my view when you think about where we are right now, one of the challenges a moment in time for monetary policy we have to not look through the rear-view mirror but the front view mirror we know there's contractions or credit likely to come. that's going to manifest itself.

monetary policy and tightening take 12 months for it to start hitting the economy. we're starting to see that even if you look at the cpi numbers and you look at core cpi, less shelter, it's down to something like 3.8%. and shelter has been as an index for the fed very distorted because it looks at historical averages, 12 to 18 months. it's still showing shelter highly inflated in terms of growth rates on the ground where i am, you're seeing single digit growth on multifamily. so that's going to play itself through over the next period of time >> scott, it's a conversation i want to continue with you and i hope you'll join us again. we have to stop today. scott rechler from rxr we'll be right back.

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well, wall street continues to be bullish. our dom chu has the details. >> let's start with a few calls over at citi and the analyst team there initiating shorter term or catalyst calls to the upside for chipotle mexican grill, brinker and pepsico. they think it will show better than expected results and continue strengthen the customer

target it was 20.84 for neutral rated brinker they think the results will show evidence its chili's restaurants are seeing positive momentum the target to $42. it was $40 for neutral rated pepsico, that new target price goes to $185. it was $180 before three calls out of citigroup about consumer focus names, david. i'll send things back over to you. >> okay, dom, thank you. dom chu. before we go, don't miss black rock's larry fink here with us tomorrow dad, we got this. we got this. we got this. we got this. life is for living.

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welcome to another hour of "squawk on the street. i'm carl quintanilla along with morgan brennan tony dwyer on why he says earnings estimates still too high >> plus, one quarter after reopening its economy, is china on track for a big rebound, or is a recovery far from certain we'll ask leyland miller and why one says there is a lot more pain to come. topping the tape for us,