we will see what happens to the banks by the end of the day. >> retail sales reaction >> right retail sales, you think? the banks have nothing to do with it. here we go ten-year note, we're going to show you >> we wanted weak retail >> you would have thought. make sure you join us next week. have a wonderful weekend melissa, thank you for hanging out all week with us >> my pleasure >> she says it so -- with such enthusiasm "squawk on the street" begins right now. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange something for everyone today a bumper profit for the banks and encouraging commentary, but retail sales dropped twice as much as expected, six negative reads now in the past nine months even so, yields pop, two-year is back to 4 .1%. our road map begins with the banks. wells, citi, jp all with

results. jpm blowing past estimates two other big dow component are on the move. united health care tops guidance boeing has halted the 737 max delivery due to supplier issues. bob iger says he's up for meeting florida governor desantis to hash out that ongoing feud about disney. let's begin with a closer look at these bank earnings. not as much turmoil, jim, as some expected. swaps now pricing in 90% chance of a may hike. is that what futures are reflecting now >> yeah, look, when you go through the large banks, which were the huge beneficiaries -- every one of those banks on there were just giant beneficiaries of what happened if you're going to base what to do -- if you're the fed -- on those five companies, that's completely wrong it's the 4,995 others. if you base it on retail sales, then you can't raise, because

retail sales are weak. if you base it on the idea that we're out of the woods, then you can raise. because -- just because the regionals don't have good earnings the system is very, very strong. and i think you can do a quarter point. i don't want to do a quarter point, because i still want to see what happens with payrolls i want to see what happens -- just saw what happened with retail, but these banks signify, if you think there was a problem in the system, don't worry about it >> right is it fair to single out jpm as the strongest? >> jpm is unbelievable the net interest income that these guys are making is amazing, but i've got to tell you, i thought wells was really fabulous citi is much better than expected david, i think that what we're seeing is that there was a period going into the banks where we didn't think there was this much bifurcation, and we just said banks are awful because of the march crisis, and the answer is, there was banks that we haven't yet that were awful. here's what happened if you were

in a bank that was big you got more money in, and you made money >> right although, that is not a secret we knew that that was happening. we talked about it every single day. >> it was a secret to somebody >> i guess perhaps there was not quite enough accounting for the increase in net interest income. >> they were as wrong about this as they were going into march. >> to jpmorgan in particular, the guidance on that interest income was far better than expectations >> yes >> and obviously, on all the -- on virtually every other metric, they did come in very well but yeah, $20.7 billion of net interest income, obviously better deposit flows a part of that >> that was what i'm saying. >> jpmorgan, like every one of these banks, is still dealing with deposits leaving for higher interest opportunities as we know i mean, if you keep your money with jpmorgan, you're getting virtually nothing versus what you could still get on a treasury where you can get paid as much as 5% in certain areas so, yeah, that's still happening, but they got a lot more given the turmoil that we talked about, every day, every

hour, for that two-week period or so with the collapse of svb, signature bank and the concerns over the bank industry no doubt about it. they talk about it average deposits down 3% in the quarter while end of period deposits, up 2%, implying an intraquarter reversal of the recent outflow trend as a consequence of margin events >> but the meteorological forecast this time has dropped in -- >> hurricane >> now it's just storm clouds that are gathering david. storm clouds you don't need a weatherman to know which way the wind blows. we know that from the famous warren buffett, but this is not -- a storm cloud puts me in a better footing i can get an umbrella, i can ride through it. the other things that he was talking about were -- >> although, the firm's macroeconomic scenarios and an increased probability of a recession due to tightening

financial conditions that's the reason, in terms of the provision for credit losses, $2.3 billion, they had $1.1 billion of chargeoffs, again, jpmorgan is what we're talking about here, and a reserve build of $1.1 billion, and the reason again was what they do cite as deterioration in the weighted average economic outlook, including updates to the firm's macroeconomic scenario >> wells is not as worried jpmorgan is a huge bank, and they're going to have some recognition. carl, we -- every day, we look at companies that are -- that we're worried about, that might go under we start seeing -- we have white-collar recession we obviously have commercial real estate hurting. if that's all the loan loss they have, then once again, if you're on the fed, if you're one of these governors who said, i am -- i think we have to tighten, all you feel like today is, i feel even more emboldened that we have to tighten. >> yeah. jp still over a full point below 2019 >> they're unbelievable. >> that's why they talk about a consumer with excess cash. recession, they still see, but

might be pushed off a bit. that was interesting on the call >> i remember, when you look at the return on common equity and you look at the cet 1 ratios, david, there was a time when we were worried about every one of these things can i just state -- well, let me put my american hat on for a second are there any banks other than santander in the whole darn world that look anything like this >> if you want to compare u.s. banks to the european banking system, you're going to be very disappointed by the european banking system >> are we back to 1900 when jpmorgan was king and the other banks were vassals >> perhaps deutsche bank has a $2.5 trillion balance sheet and a $25 billion market cap correct me on those numbers, because they were just out of my head, but i think that's directionally right. yeah, very different scenario over here. that said, i don't think anyone was questioning the health of the big banks during the crisis. there is still that overriding concern that i mention almost every day here, which is that you can have deposit flight that takes place in a matter of hours

that can be stunning and literally wipe your bank out >> we know that, and we also know that was the least sticky of deposits, but we took down -- the market took down schwab. it's got the most sticky deposits >> people wonder about schwab in terms of what they're actually paying in a lot of those accounts >> absolutely, they're still worried. all they're looking at is the stock's doing a little better. this whole -- this is a moment, carl, where people look at the stock and say, oh, we're fine. without based on any homework. i think that -- i have felt that schwab was fine, but you kknow - as david said, it's a minute-to-minute thing for some of these, but it's not for jpmorgan because the money heads to jpmorgan of blackrock >> we've got to get to a lot >> we don't have citi. we have larry fink >> i understand. but we haven't talked about citi >> you going to stick around for larry? >> i wouldn't miss it for the world.

>> he does think that the migration of money markets is going to continue for the long-term. >> he has a great story, and i think that people might look at it and say, well, listen, it just -- they didn't have a lot of money come in they didn't have big increase in the amount of money because the market wasn't good, but i just think that we absolutely have to love what's going on there in terms of a longer term view of outsourcing pension funds to them, people really trusting them we just got a more jamie dimon he's not saying, deep breaths. >> he says on the call here that the svb collapse does not have to result in a "revamp of regulation." take a listen to this. >> we're hoping that everybody takes a deep breath and looks at what happened and the breadth and depth of regulations already in place obviously, when something happens like this, you should adjust, think about it, so i think down the road, there may be some limitations on health to maturity maybe more scrutiny on interest rate exposure, stuff like that

but it doesn't have to be a revamp of the whole system it's just recalibrating things the right way. >> they say they're "not terribly concerned about cre," for example. >> i know. and we're getting that from wells. wells has san francisco and new york they're not concerned. they have a lot of a buildings >> and you know, scott yesterday from rxr, who's been a guest frequently and is one of the largest developers here in the new york area and around the country, says, "a" is okay that's my words, but that's basically what he's saying and we've seen it. tenants are flocking to "a." it's the older stuff that's really in trouble. you got $1.5 trillion over the next three years all of it's going to adjust significantly higher, and there are questions as to what that's going to look like for commercial real estate obviously, not all of it is office space-related i think it's only $80 billion this year is office space-related. the banks probably have the reserves to handle it and/or the ability to try to refinance

and/or restructure, i should say, a lot of these loans. >> but how about the smaller regionals that have -- >> that's the bigger question. >> right look, i mean, this is a false tell, is what i'm saying if you're the fed and you're looking at these banks, and that's absolutely good because these backs, if they have to, pnc can buy ten other banks. but i still -- do i want to know what's going on with first republic i don't feel any better about first republic when i look at these numbers. what, no one's going to want to buy first republic the reason the numbers are good is because they're not buying first republic >> isn't there a stable of people who could start bidding for assets once there's more clarity? truist people with capital? >> i think that those tend to run more scared. i don't think they want to get in the way of something that makes it so there's suddenly more scrutiny for them >> the conundrum for first republic -- and by the way, they did nothing wrong there.

they made a lot of mortgages at far lower interest rates, so you're sitting on a portfolio that probably yields 2.6% with rates where they are right ow, and they need to pay depositors a lot more we've talked about it many, many times. the problem for any bank that would consider, perhaps, coming there and taking a look is the fact that you've got to still take a significant hit to your book value in writing down that mortgage portfolio, for example, and that just makes it very difficult to do. >> and that's the struggle here, carl if you're truist or u.s. bank, you say, you know what i've got a pretty good stiituatn with my mortgage >> if first republic were to enter receivership, we're going to have earnings behind us people are going to feel more confident. >> i agree with that it's not that -- well, i think what we're seeing today, carl, is the banks right now are not going to be the reason why the fed should stay its hand the banks that we're seeing on our screen, not this, not the

regionals, bus thet the majors,f you were saying, you think we should tighten another quarter point, you could say, listen, now it's just a gimme. the question is whether we should do half and put an end to it this does wreck the thesis we had a couple weeks ago i still think there's a big tightening i'm not in favor of the quarter-point increase i don't think these banks are representative of what can go wrong. i don't, david >> you heard goolsbee. you know, he's -- he did mention watching credit tightening is certainly one of the key things, but even's watching. nobody yet has the answer in terms of what the impact is going to be. >> if it's tightening, then the answer is the growth is not going to be there. >> now in terms of banks that are pausing, we got singapore last night, and south korea and india and australia and canada all on pause are we going to join that's the question. >> these companies -- these countries don't have it as bad their economies are nowhere near

as strong as we are for the most part our economy is very strong, but we had a couple banks that really screwed up, and we have a fed rate increase that's making people pull back a little. yeah >> we should pull back >> but i had a continued focus on inflation there are many who believe it is coming down and coming down materially austan goolsbee, by the way, perhaps amongst them take a listen. >> i think inflation is coming down we've still got this -- is it a cloud? it's probably not a cloud anymore, but the -- this issue of how much is coming from demand and how much from supply. you've seen the supply chain constraints easing across a lot of sectors, so that's been helping bring inflation down, but you've still got clear stickiness on some parts of the prices i think when you see the producer prices coming in as big negative numbers, and you see these negatives on retail sales,

you don't want to overreact to short-run news, but it feels like that's moving in the right direction. >> not just producer price, jim, but now import prices down 4.6% in a year. >> i think these numbers say that, geez, let's just wait. but then i've got -- i had stewart miller on last night, the executive chairman of lennar, one of the top three home buildsers in the country he said, if you're looking for our industry to be hurt by this, forget about it. some people are insensitive to rates. they want to get out of their parents' and have their own homes. if the fed is keying on homes, then the fed has to tighten more every time they tighten, the loan rates go down it's a losing battle to try to cool housing it's just a losing battle. the municipalities won't let you build like they used to. stop focusing on housing start focusing on wage growth. if you're thinking, wow, housing

is starting to come down, forget about it >> it's not at housing wages, three-month average is at least a year low what are they focused on, then, markets? >> well, i think the -- i think they're still focused on how much it costs to just live day-to-day david, i think they're focused on the supermarket restaurants. they're focused on what it costs to run a car, what your daily life is, and your daily life is more expensive than it was three years ago. >> substantially >> substantially and that's what matters. >> a buck from my cup of coffee, $1.50. >> my guy is $2. >> mine is also, but he was $1.50 before the pandemic. >> my guy was the price leader >> my guy was low. >> we're getting even more data as we speak. industrial production, let's get back to a very busy rick santelli today rick >> yes, our march read on industrial production, expecting

up 0.2%. we get something a little higher than expected, up 0.4%, twice the expectations and 0.4% equals the retaliatory in january you have to go back to last year 79.8 on utilization. we were expecting 79.1, and utilization rates have really been on the weak side, but this is a respectable pop actually, this is the highest utilization rate since november of last year, which isn't a long time, but do keep in mind that the end of last year, we had a utilization rate that was the weakest going back over a year-plus into the previous year so, watching this come back, many are talking that it's possible some of the weakness in manufacturing may be in the rear view mirror. time will tell also, see a nice, positive revision to last month's industrial production from unchanged up 0.2% and

utilization rates from 78 last month to 79.6. so, this is good news. rates have popped a bit. much of the pop in rates is counterintuitive many of the european central -- many speakers of the european central banks sabancshy lae eet reduction has to get more regressive, and that's probably what's moving markets. "squawk on the street" will "squawk on the street" will return after a short break you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses

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boeing is down sharply in the premarket, the company

warning it will likely reduce 737 max production and deliveries due to this parts issue involving spirit air systems. boeing says the supplier informed it that a nonstandard manufacturing process was used on two fittings regarding the fuselage and the vertical stabilizer the jet maker did say this is not a flight safety issue, but spr, down 10 premarket >> look -- >> 14. >> to say that these guys didn't see this coming is a -- an incredible understatement. i think that even 48 hours ago, they would tell you that we're finally back, it's all good, the auto book is amazing i'm talking about 48 hours ago so, this is one of those things where you wake up, and you work at boeing, and you say, no but they outsourced so much that they put them -- david, they put themselves in the hands of other companies that maybe it wasn't the old boeing boeing didn't used to do that. >> did they not do that previously i thought that their core competency is taking all these

supply chains and making it all work and putting it all together >> they really did that -- the partnership deal where you basically did well if you -- you made more money if things were good, and you screwed up, you got punished, but david, they seem to have less control of their destiny than most companies. >> why do you say that what does that mean? >> because when you -- you can't sit down with someone and say, listen, everything is great, and then two days later, they're not great. >> is that -- i think that's almost from personal experience. >> meanwhile, others are looking at what it means for airlines' ability to get fresh aircraft, jim, at a time where they need -- >> they do have others that aren't spirit. >> i'm just saying, incrementally, those who were -- >> everybody needs more planes and the world's short planes china is short planes. europe is short planes everybody needs more planes. but i increasingly just say, if you really feel that way, just go to larry cole

just go to ge. and ge health care, by the way, is doing magnificently ge, the energy business is not really what i call as stable as i'd like, but ge our saerospaceo fire >> you mean as an investor >> you can't fly a ge engine, unless you're in that "monkey's paw" episode of the twilight zone >> you would have thought that ge made airplanes. >> ge's got a really good time to rethink your boeing position. >> ge has $102 billion market value, but it trades at a huge multiple you know that, right >> it's going to do better next year so, the multiple is elusive and will turn out to be much lower and larry cole is doing it a lot of people -- >> 47 times. i don't remember those days, by the way. those were the jack welsh years. >> that's unfair >> what do you mean? late '90s? >> i'm tell you that the

multiple is going to be -- when you get rid of energy and when you offload energy and just look at ge aerospace, you're going to say, you know what this is the way to be in not raytheon we may, you know, ukraine, lot of people worry about air -- >> little more carl, this newfound love of ge from our friend here. >> come full circle. >> he has congresme a long way. larry cole coming on "mad money" soon >> depends on how i feel let me text him. >> take a look at futures this morning. obviously, a lot to absorb, whether it's the bank earnings, the ecodata, and we're not done, by the way, or the fed speak dollar did get a bounce on industrial production. stl pe,ilonac though, for the worst week since mid-january, and of course, we'll talk about and of course, we'll talk about all that with larry fink comin go space age welds for super silent cars.

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we're going to see news in the ev space today, tesla extending their price cuts to europe, according to some reports, and then lucid, q1 production a divndelery is down quarter on quarter that's putting some pressure on that name. rivian as well rivian as well opening bell is coming up in 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...

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the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. let's get to a "mad dash" with jim as we count down to an opening bell you got a very short amount of time here, so squeeze it in. >> i'm looking at bnr fatigue, dave, with unh they did a beat and raise. i'm sick of beat and raise stocks down on beat and raise. i'm done unh. >> stocks down you always like to point out the market value of united health care, which is about half a trillion dollars not a bad business

>> such a great business people want more than just beat and raise. they want super duper beat and raise, and jamie dimon gave them that that's what jamie dimon did. king jamie >> let's get to the opening bell in the cnbc realtime exchange. at the big board today, it is the cast and creators of "the marv "marvelous mrs. maisel." three episodes dropped today we're going to talk to show runners and rachel brosnahan later on this morning. we talk a lot about streaming and amazon strategy. >> look, otherwise, our friend nathan >> yeah. >> talking about maybe there's a lot of -- >> just a great cast >> oh, i'm sorry i didn't mean to bring it back to business. go ahead

>> no, i just -- >> they are great. number one in the country is "beef." >> amazon has an interesting approach, because they're not really -- it's not central to the business model of the company. >> they talked about thursday night football they gave them some games worth watching can i just tell you, the real announcers always say the same thing. these guys are real tired when they play on thursday nights >> i know, i know. >> but david, i do -- i do want to point out the nathanson piece, it's silicon valley bank. they still write there's just a lot of streaming fatigue. >> there is a lot of streaming fatigue. >> what are people fatigued about? i'm not fatigued >> people want to get out. there's not an expectation for enormous sub growth here in the united states. netflix is going to report on tuesday. we'll have plenty of time to talk about it wednesday morning. >> look at this market coming down people are fatigued about the bull >> the banks are not enough to pull the market higher, jim?

>> no. >> why not >> tech. the nasdaq was up almost 2% yesterday. so, we're seeing a little pullback reflexive pullback, i would call it >> that's a good point >> there was nothing from tech that was reported. >> the banks are very strong, as we said they would be, this on what were strong numbers from jpmorgan, wells fargo. we haven't talked really pnc or wells fargo or citi as much as we've talked jpm, which is the leader right now, up 5.5%. you see it right there even with jamie dimon positioning the bank, it would seem, for higher and longer, he continues to -- he continues to say that rates, in his opinion, at least, will stay higher longer take a listen. >> people need to be prepared for the potential of higher rates for longer if and when that happens, it will address problems in the economy for those who are too exposed to floating rates or

those who are too exposed to refi risk. those exposures will be in multiple parts of the economy. >> we saw the beginning of that exposure or at least the -- with that cb, of course, but he seems to believe that as time goes on, you stay higher for longer, you do expose even more potential risks, and part of his statement is to say, let's deal with those kinds of things now before they become a problem >> we're stuck here. >> commercial real estate amongst them, one would expect >> commercial -- you go -- i mean, again, referring to stewart miller at lennar, the south is incredibly strong the east is strong new york city has a problem. san francisco, seattle, they have problems. portland has problems. those are the epicenter, and we're not used to that because those have been such great markets for so long. >> on the call, we're not running around aggressively tightening standards right now "i wonder use the word credit

crunch if i were you." they're talking about themselves, right? >> we're talking about the biggest single beneficiary of what happened in march, and for us to take our cue from the company that did the best, that literally basically asserted itself as being the one bank in the country that is equal to the u.s. government in terms of -- i'm over here -- no, i'm saying that the -- jpmorgan -- >> i can listen to you and read at the same time >> oh, really? >> i have developed -- i have developed that skill i can also not listen to you i've developed that skill as well >> do you have shoelaces did they take away your shoelaces? i know they took away your tie i'm talking about jpmorgan as being here, and then everybody else is here >> i was saying, being the beneficiary, they did retain $50 billion of deposit inflows from that trend we saw at the beginning of march where a lot of outflows from other banks benefitted jpmorgan. they do still assume modest

deposit outflows, modest deposit outflows from here, including some of those retained deposits. >> probably going to blackrock by the way, we have larry fink coming up. >> we do soon. >> i think the money goes to blackrock. amazing. those of us who had giant -- >> we haven't talked about a lot of the other banks citi is up about 1.8%. you and i have talked off camera about the tangible book value being so far above where the stock price is and why that would be the case. >> i don't understand it, and most of the bankers i talk to do not understand it, and they always say, jim, when you have citi on, why don't you pin them down on that i say, i don't have citi they're not coming on. i would like to know efficiency, capital higher no, i want to know about the disparities. >> book value, $84.21. >> that seems to be -- >> at quarter end. >> that's a disparity that must be -- >> $84.21 and you've got a $48

stock. >> almost all the banks, by the way, just so people know, have a book value that is not nearly as high as their stock price. now, david, wells fargo, i could see that charlie scharf, the ceo, he bought back $4 billion at 46 and the stock at 40, my travel trust owns it, i'm going to buy wells fargo i thought the quarter wells fargo and i can go line by line was very impressive. charlie scharf is back the charlie scharf that we all knew and loved is back >> okay. wait we all knew and loved him? when did we do that? >> i don't know. >> all right >> i kind of like him. i don't have -- >> i don't have an opinion seems like a nice enough guy >> well, i wouldn't go that far. >> i wouldn't either >> nice -- >> nice enough >> amy, his wife, is very nice >> yes >> we have friends periodically, we have friends in real life, and it's very disturbing, and i do my best to blow them off and lose them, but

they're hard to shake over wells. now, david, the average loans, right in line there. the average deposits, right in line aren't you used to wells fargo disappointing on pretty much every single line? >> it's been a while since they didn't do that >> it didn't happen this time. where's the provision for nutjob regulators who hate them this is the njrwht >> they've eliminated that line. >> yeah, they've eliminated the n nutjob regulators who hate them. they had regulatory bodies i think the motor vehicles department was after them at one point. >> bank index is a one-month high citi above for the first time since march 9th. you mentioned efficiency citi, efficiency ratio, 62 that's an indication of some expense control. >> that's better than wells fargo around 66, and i want to see that -- i always think that wells -- one of the reasons i'm bullish on wells fargo is that

was warren buffett's bank. i mean, warren buffett was obviously not on there saying, i think you ought to do this and do that. they were a rogue bank they were a rogue bank, one of the largest banks in the country. they were rogue. >> right we should point out, net interest income for many of these banks was higher than expected certainly helping jpmorgan >> i'm glad you poipnted that out. >> breath better growth in revenue expenses >> you're very right >> net interest income came in stronger >> look, i'm looking at net interest income for jpmorgan, $20 billion. net interest income from wells, you got 13.3 i was looking for 12.6 these are remarkable after a while, though, what's going to happen is you're going to see, all week, you'll see banks that aren't as strong, and people will say, why did we pay up 6% for jpmorgan i think jpmorgan is a terrific bank, but they're not -- it's

not a tech stock that just figured out how to fire one quarter of its people and continue its instagram >> i mean, you mentioned earlier, being raised fatigue. we got 20 names so far this season, 19 have beat, and that explains why we've come into this earnings season relatively hot compared to prior earnings cycles >> i've seen so many people sit right over there we have two empty chairs, so it's really interesting, and say, you know earnings are going to be down 5 to 7%, and i say, okay, so, what did you do that you knew that? did you sit down i've tried to do it, believe it or not there's 250 companies in the s&p 500 that are down from two years ago, and tried to figure out their actual earnings. and i mean, this is something i do where my wife says, what are you doing? i'm trying to figure out the actual earnings. she says, go to bed. it's down 5 to 7%. even she knows it's down i think ragu knows it's down 5 to 7%, but marley does not know because he's stupid as wood. he doesn't hit his head on the

window anymore, thank god. that was painful but no, i mean, down to 5 to 7% narrative has to stop, carl. i think it should say what you said, which is, we haven't seen that yet it doesn't hold up under close scrutiny it just doesn't. >> yeah. that said, there's going to be some companies, jim, that don't turn a profit who see their runway shortened we mentioned rivian and lucid in the light of the tesla price cuts now, and some of these production numbers >> the companies that came public in the last two years, i'm going to call them, david, the sweet green alberg component. warby parker neither of those delivered >> no. >> no. i mean, these companies came public, carl, and the spacs, they're funny. comedy club. >> yeah. >> ge is down 30 cents aren't you going to come after me >> not yet

by the way, speaking of -- i know this is apropos of absolutely nothing, but you're talking about spac, and we talk a lot about commercial real estate have you taken a look at wework? i know this is out of nowhere. do we have a chart >> it's way too early there. >> it's up it's 54 cents. there it is. >> wow >> 54 cents. >> that's the difference between -- >> that's recent go back a little bit longer, guys >> they screwed you. >> they managed to come public >> i'm sorry, they -- i don't know what they did, but they brought it public. >> adam newman's stake was $700 million i think it's about $35 million now. >> here's a quiz for you what did jamie dimon in the series bring adam newman >> i haven't gotten to that. >> the 1942 tequila. at 10:30, when i went to see adam, he brings it out and goes, it's time. i said, what "it's time for tequila."

i said, it's 10:30 then i walked out, and i said, every single share of this must go away. it's just not right to serve the 1942 i think you maybe serve the salza, maybe serve the -- david, i would never bring out the '42 that early >> no, i think you're right. >> in the series, the guy who played jamie dimon looked exactly like jamie dimon, but i do not believe that jamie dimon brought the 1942, which is $300 a bottle >> yeah. >> some say $400 if you overpay. this wework, david, it was -- it was an abomination that was just there to take people's money away. it was the halcyon days of taking people's money. >> it's a lot of pain for a lot of people, including, by the way, softbank, which was the major backer of the company. >> don't cry for me, softbank. >> no. >> holding $41.50, jim, i wonder what levels you think are important here >> look, i think yesterday was really a remarkable day.

two days ago was really amazing. at 2 kwl:30, there was some ecb clown that did something, who knows, you have to ask sara. we're not back in the bear market that's no longer the case. that ended all we are looking at is the various days things looked great. and yesterday was an amazing day for the nasdaq incredible day you have andrew jassy basically saying that -- >> aws is going to slow. >> right >> and nobody cares. >> nobody cared. the stock was up are you kidding? that interview was like, i got to sell my -- i should sell my amazon they're not selling. 27,000 people laid off now maybe one of those is making $5.8 billion i tried to do the back of the envelope that's going to save it. >> that's what it would have needed to be the 27,000 >> yes >> otherwise, they're not going to get the numbers >> what they will tell you is, jim, you want to close those

warehouses those people make a fraction of what the 27,000 -- >> those are the higher-paid executives that are going. >> jassy did not talk about the year of efficiency he's still in the year of living dangerously. >> retail sales definitely in some sharp relief today. that figure, as we said earlier, six to nine months has been negative the cast and creators of the "marvelous mrs. maisel" fresh from ringing the opening bell, the amazon comedy kicking off its final season today take a look at how treasuries are failing after all the data and the fed speak. we still got inventories and consumer sentiment coming out in about 15 minutes

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let's give you a look at the

best performers on the s&p 500 that's, so far, for this week, of course, we still have today to go, but pioneer natural is benefitting from some of that takeover chatter around that enas phe energy as well rounded out by carmax. we're back after this.

we mentioned earlier the cast of "the marvelous mrs. maisel" is here at the exchange. welcome. >> thank you. >> the fifth and final season dropping today with three episodes, of course, on amazon and then one a week after that amy is with us, daniel and rachelle, along with as we said the entire cast. last night, i got a box from amazon at my household. >> was it pink >> it was pink the maisel logo. i thought you can't pay for that kind of marketing. >> you can we got a bill. but no, i mean, it is like when you get the box, like we're getting a box. then you know like that they're taking it seriously. >> how do you know, the shoe show was a phenomenon from the beginning, how did you know when

it was time to say goodbye >> is it time to say goodbye >> i don't know. i'm still processing the fact that we're saying goodbye, so there's a lot of like therapy involved and like deep breathing and yoga but, you know, we made the decision and then we all sort of jumped on board and it's -- we're very proud of our cast and our crew who came through like gang busters. >> i remember the initial golden globes, saw jeff bezos in the audience and talk about talked about amazon during the break. give us color on how they are dealing with the creative community? are they different that you might see out of netflix or disney plus? >> jeff is a fantastic laugher, which i appreciate getting a laugh from jeff bezos is fun they've been great it's this world is such -- it's so less constricted than when andy and i started out in the

network world, very formulated, got new stuff rejected when the world expanded through cable and streaming it became a much better place for different kinds of stories to get out there, people with different identities to tell those stories and just to appeal to a breadth of audience the networks were not at the time. >> rachelle, you talked about mij and what she represents. bde how you described it an interview a few weeks ago talk about what it's been like doing the ride. >> it's been completely surreal. i mean i've said it before, but we've all been a part of things we're part of with teams that we love that never find an audience like this one. we felt so uplifted over the course of these five seasons and work with the best people in the world. i have been counting my lucky stars for five years and we're not ready to say goodbye. >> we were talking during the break about "gilmore girls"

which has huge life for generations that are growing up today. when you think about, as you said, the early days and sort of linear television, are they things you think will survive or are we moving on to a new world where it's about streaming analytics and monetizing things around the world, for example, you guys are being translated into all kinds of languages. >> we are. you know, look, good content is good content and if anybody puts something good and entertaining out there, people will watch it. you can't say like, oh, the network, see ya. it's -- because every now and then they throw something out there, that's really good and everybody gets to watch it the wonderful thing about network television, it's broad-based, more episodes great things that go with it but the streaming world has opened up a portal to stories that never would have been told and creators who never could have told their stories and

actors who never got that shot to like be on those network billboards that alone means everything is going to get better. >> is the street -- i guess, this is wall street or people who watch the business side need to worry about labor strikes at this point or does that get settled? >> regarding >> streamers and writers >> you might be asking the wrong person. >> asking us >> well grab a pitch fork. i don't know. >> i've been through two strikes. there's always -- there's always a conversation going on between the unions and the executives in hollywood. you never want to strike, but these things are unpredictable you keep working until someone tells you you an't. >> it does feel like the time, everybody, buckle down and figure out the streaming world and set a template going forward. it's crazy bananas out there people are not getting

compensated properly it's because i think it hits so fast, it came out of left field, nobody anticipated it taking over the world quite like this it's time, kids, get to the table and figure this out, because after covid, nobody wants to go out on the street. everybody wants to be with their buds with coffee in a weird curls in their hair. right, tony? >> yes. >> tony shalhoub we're so happy for all of you. congratulations on season five we look forward to starting watching tonight the cast of "the marvelous mrs. maisel." we'll be back. cramer will stick around for blackrock and larry fink don't go away.

good friday morning. welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber, live from post nine at the new york stock exchange. jim cramer, lucky to have sticking around for the top of the hour we have an exclusive interview with blackrock ceo larry fink at

post nine to break down his company's latest earnings and what he's seeing in the environment. stocks in the early going, little bit higher. dow weighed down by boeing, the s&p up, getting a confidence boost by the big banks reporting some good numbers. >> lot of data today and fresh data hitting the tape. rick santelli. >> yes a lot of fresh data. we're looking for business inventories and university of michigan sentiment to hit at the top of the hour. we know retail sales on the weak side, but despite that, rates moved higher business inventories for february up 0.2. we were expecting up 0.3 april preliminary will change mid-month, of course 63.5 much stronger than expected. that's the best level since february if we look at 68.6 for current conditions, 68.6, is the best numbers since february as well

expectations, what lies ahead, 60.3 these are all well ahead of expectations and well ahead of what's in the rearview mirror and on inflation, one-year inflation, 4.6% and here is where it gets interesting. we're expecting a number closer to 3.6 to 3.7. 4.6% is the highest since last year and we've been as low as 3.6. remember, these are respondents. this is a much more qualifying than quantifying, with respect to we're not looking at a mathematical equation like we do with other metrics that measure inflation. on the 5 to 10-year a bit of a different story exactly as expected up 2.9% we do see yields popping a bit on that in 2s and 10s, but they haven't popped up towards the

highest yields of the session. we'll need to monitor that back to you. >> rick santelli, thank you very much. headline number on consumer confidence comes in better than expected, which is interesting, given the 1% decline we saw in retail sales from the last month, but it does kind of jive with the better commentary we're getting out of the big banks on the consumer and on the economy and then he got a fed governor waller who is a voter this morning saying he sees more monetary tightening ahead. >> couple days ago we were shaking our head at the new york fed research, but this jump in the one-year expectation is pretty remarkable. >> the fed will notice it's about inflation expectations and they were worried about the banking sector and probably going to be watching the earnings and listening to these conference calls hopefully, right, jim, not just us and saying look, maybe the worst is over. >> take it in totality and in totality we are a strong country and i think that sometimes we

have to step back and say -- we have such an inferiority complex in this country. a lot of things thrown at us and the consumer is still upbeat i think that's a remarkable statement for the country itself. >> remember what chuck said last year, the biggest danger is talking yourself into a recession that doesn't come. >> and then moved to atlanta when he left california, he got much more positive. >> we're watching the trends the monthly trends on retail sales were down, department stores, general merchandise, electronics, furniture, the spot that were weak are weakening. >> the consumer pivoted, life's too short, nothing the matter with an existential crisis after we had a pandemic that killed so many people. if you led your life the same after the pandemic as before, then you're like me, where my wife says, did you not realize what happened? you're still doing this? i love what i do but there are a lot of people who hated what they did, and it

turns out they were 59, 60, 61, and realized is this it? >> is this my life those are the people who are changing the pattern of spending they're not going to best buy. they're going to costa rica. >> it's inflationary in services and that's the problem. >> it's inflationary but at the same time maybe it's good. maybe it's good. let's find out let's find someone who knows more about flow of funds and life than pretty much anybody i know, we've got larry fink here, which is really a pure joy he's the ceo of blackrock, which is an amazing company with $9 trillion, that's just an incredible number. >> thank you. >> i think you share, you say it in your statement, optimism is what's pervading your news today? >> yeah. i think our quarter really was a continuation of the last five years. last five years we grew by $1.8 trillion in net inflows. we actually grew more in this first quarter than the first quarter of '22, about 110 billion dollars of flows

clients are responding to the changes. i mean we talk about all this pessimism, but the reality is, for long-term investors, buying bonds, buying interest rates at 5, 6%, before a couple years ago was 1%, you can actually earn a high percentage of your needed return to meet your pension fund liability. that's a theme missed. so we're seeing more and more clients who are looking at bringing down their risk, but keeping their portfolio much more wholistic and a little bit more resilient by having a better foundation of bonds and equities that's what's happening right now and we're seeing that. >> we went down in class for a while. short term it's back. >> we wiped out bonds for years, and this is one of my fears, over the last ten years, the number one trade that people made money on was shorting liquidity. >> right. >> i don't believe that's going to be the next great trade for the next ten years and shorting liquidity means you got out of bonds and bought more privates

that trade worked. the question is, is that going to work now in the next ten years? and, you know, when you see interest rates that in the credit space, earning 5 and 6%, that is allowing you to take on a lot more fixed income as a part of your portfolio you're actually derisking, but able to get your necessary returns through that. >> the question is my colleagues, it does sound like what happened in march accelerated a darwinian move in banks where we have the larger get even larger and made it so that we realized we didn't need to learn -- earn 2% if we just called larry fink we could pick up 5. >> what happened in 2022, banks did not raise their deposits as fast as the federal reserve was raising rates. and the money market funds continued to adjust the rates every 30 days essentially, as their maturities are made shorter and you saw this giant arbitrage between money market

funds or short-term bonds are versus deposits. then you started having impairment with some of these banks related to their held maturity account, precipitated a real reimagining of how you were going to imagine your portfolio. we saw a lot of people move their portfolios out of the smaller banks that had yields that were much lower into the larger banks as we saw today in some of the earnings and into the money market funds we've seen over $500 billion of money leaving the banking system into the capital markets that's one of the pervasive things i talked about today, i talked about in my ceo letter that we're seeing an acceleration moving out of the banking system into the capital markets. and that continues on. you ask the questions, is that good or bad? we could all raise those questions. the large banks are benefitting from this. the large market making banks are benefitting and the capital markets are benefitting from

this that's going to be a societal question, how do we want to navigate this. we still have 4,400 banks. is that the proper size in can they perform in this atmosphere as we move towards the digitalization of currency how we change payments then the bigger, more existential issue, if, and i believe as we were talking about, i believe interest rates will be higher for longer. >> the jamie dimon camp. he said the same thing. >> i said in my ceo letter, i believe inflation is going to be stickier for longer. in other words, i think we're going to have a 4% floor in inflation. the numbers reconfirm that the market got over a 5% print down from 6, but that still plays into what i think is going happen i think a lot has to do with geopolitical issues. we have moved away from this whole concept of globalization

we moved to fragmentation. nobody asks the question, if we want to have national security for food, national security interest rates for chips, and energy, no one is asking the essential question, at what cost >> yeah. >> and so what we are seeing is, we're moving more and more supply chain here at what cost and i think this is, you know, much of this has to do with why i believe inflation is going to be higher. this may be the right outcome. i'm not making a value judgment. this may be the right thing for our country and every other country as we move supply chain. but no one asks the question, at what cost? i think these types of policies are going to keep inflation stickier for longer. then, if we do believe inflation is higher for longer and we then see the results of the federal reserve has to keep rates higher possibly tighten a few more times, then you have to ask the question, what does that do for assets and what does that mean specifically for commercial real estate and the reason why i highlight

commercial real estate is because that's the dominant asset that regional banks own. right now, the problem that we witnessed over the last six weeks was, a duration mismatch for some, and an outflow of liquidity. we have not seen any credit issues yet the question is going forward, could higher rates for longer, could that translate then into more credit quality issues in the future so these are the - >> right. >> the issues we have to address. >> i remember and i went back and looked just now, july of '21 when you came on and said that inflation was going to be more systemic, we were placing jobs over consumerism now that we keep hearing about we're importing in china, to the degree we're importing it all, or that a.i. is going to result in huge jumps in productivity, is that going to be a material offset to this new function you're talking about >> i don't think china's importing deflation anymore. if you look at their demographics, they have a demographic time bomb greater

than any other country they cannot -- there is more and more evidence that more and more companies are leaving china because it's an expensive place to be now, and so china is no longer the exporter deflation. you have that as a fundamental issue. a.i., i've heard estimates that a.i. could increase productivity by 30% we'll all see. i think that's a muffled way of saying we're going to have fewer people working, so that's how you're going to reduce productivity, you will have fewer people per job i think one of the other reasons, getting back to productivity, carl, is i believe, if you look at the statistics, we lost productivity in the last three years. whether that is remote working -- >> remote working. what else would it be? >> exactly. >> thank you for that. >> you're welcome. we have -- we certain have seen that you said a.i

that's going to be the big question where we will see the boost in productivity if we don't that's another reason we will have stickier sflooigs inflation. >> if you look at the lag,the engine of growth you have, that might be something you say i can look for a.i but the big move is starting of outsourcing. this is an incredible business these companies, what does an airline know about running a pension? >> good question we're seeing more and more pension funds, insurance companies, endowments, are starting to look at their internal costs of running the pension. we have shown we can do it better, cheaper and more systemic over the last three years we raised $400 billion in outsourcing. some of the ones we won, whether royal mill or very large u.s. pension fund, with 300,000 union

workers, but the whole foundation of more and more asset owners are replacing their antiquated technology systems with aladdin and aladdin is becoming one of the most important components what we saw during the few weeks of real financial turmoil, we saw a surge in utilization of aladdin. all our clients were trying to look at what risks do they have and how do they manage it and another example why aladdin has proven to be a really good foundational piece, and so more outsourcing of technology and more outsourcing of the entire asset matter and blackrock, because of our -- the foundation of our organization with technology, with ishares, and now with fma, all our advisory work, we're able to bring that together in a more comprehensive way. >> the counter argument to people like you say that we're going to have sticky inflation for a really long time, is that

if we get a big recession, that does cure inflation. are you saying that you're not expecting a big recession in the u.s. >> i am not expecting a big recession in the u.s we have to offset that we have three giant fiscal stimuluses that were created in the last two years that are starting to enter our economy. that's the infrastructure bill, that's the chips act, and the irh. the three bills are a trillion of stimulus over the next few years. think about how many jobs infrastructure creates think about the demand for commodities as we build infrastructure so yes, you're right, some sectors of the economy are weakening, but other sectors, because of these tremendous fiscal stimuluses, are going to offset some of that. that's the beginning those is stimuluses are just beginning to enter the economy right now as other components are slowing down i don't see a big recession. i'm not sure we're going to have a recession in 2023.

we may it v it in early 2024 wlaiz twhat is the pathway in te short return, the pathway of the fed and how does this play out in terms of credit and credit spreads and what is that impact on regional banks and other asset owners. >> one month ago we sat here and there were people who come on and talk about the republic being in danger, not republic bank - >> the country. >> how did we get to a point where a couple of banks fall and everyone suddenly felt the system was as weak as it was in 2008 >> i think they were wrong when you have a 475 basis point move in 18 months of interest rates you're going to expose risk takers who took too much risk that is not systemic we've had a few banks that took -- that had taper asset growth in 2020 and 2021. all you have to do, look at who had the hyper asset growth

during 2020 and 2021, and so that means they took on a lot of mortgages at 3.5%, took on a lot of assets at the lower interest rates. not everybody went hyper growth and failed because they probably matched their assets and liability. those who did not look -- they made a lot of money because they were paying very low short rates and earning the 3 and 3.8. now they're playing 5 plus percent ent and earning 3 and 3.8. that's the problem this is not a systemic problem this is not a problem that's going to impact. as we saw today we had our big banks having great quarters and -- >> yeah. >> performing really well. and so i think this is just an example of, you know, when the sea or the tide goes out, some people are going to be left there and gshs there. >> larry, there was a the distinctive loss of deposits, in four hours at svb. i assume that got your attention. i'm curious whether you think

it's sort of an existential question for some of these banks? >> i think it's going to be a bigger existential question as what do banks do with the held maturity accounts. the issue is we have this -- we use held to maturity more in this country than most other countries. most other countries, banks do more floating rate lending than fixed term lending we're able to do more fixed term lending and put that into a held to maturity account. we never seen this before, the market looking through to the mark the market impairment and saying the company may be impaired and then the deposit flight. >> they fly quicker than they used to. >> that's the bigger question is, what is the value of held to maturity, how should bankssyem more engaged in lending floating rate, less fixed that is -- that to me is one of the existential questions to

ask. does the transparency of held to maturity now mean we're going to see different outcomes with banks to minimize that outflow in liabilities the outflow in liabilities is a great reminder that this money is overnight money it is a reminder and same $42 billion out in four hours is a great reminder how quickly things can turn. the result will mean more and more institutions will probably shorten their asset and liability match, making sure it's more matched, but begs the question, how are they going to look at held to maturity going forward. we have not spent enough time and asking ourselves what is the value of held to maturity if the capital markets look through that and mark the market you don't have to mark the market that was one of the issues related to supervisors of that institution because it was -- it

was an account that was -- commonly accepted accounting rule that if you deem this asset to go into a held to maturity, you don't have to mark the market now the capital markets are looking through, and saying no, we want to know what's really going on in that giant pool of money. >> you use a great phrase here, this will further accelerate capital markets growth. >> correct. >> this is happening and not being recognized - >> that's my point we have a backdrop we have the most develop capital markets, we're sitting here at the new york stock exchange. we are benefitted by having this robust capital markets and so very few people missed a beat during the failures because so much money had the ability to run from there and put their money safely that's a good outcome. the question is, though, you know, from a blackrock perspective, we need a healthy banking system and we need a healthy capital market system

and that's what we need. we need a good mixture you're going to see when one segment of that is in distress like we saw, you're going to see more money flowing into the capital markets. that may reverse one time too, and so we have the most healthy financial system of any country in the world and we should be proud of it. we should not look at this with extreme negativity we should look at this, my gosh, we had the safety valves, and it worked. >> i would love to continue the conversation we had the last time you were on about the culture wars because you find yourself at the center of it when it comes to business and you get it from the left some ways not doing enough, and you get it from the right, obviously, with the antiwoke agenda you were in texas recently, a lot of money there has no interest in going to blackrock, at least that's what they would say. what's the conversation like how do you convince them that blackrock is the right home for their assets when they have that agenda saying, you're way out

there on esg. >> first of all, every client we treat as a fiduciary and we do what they ask us to do, and that's called choice we spend a lot of time on it that is a narrative. we won $110 billion of money from clients we won money from many, many states in the united states over the years, over the month, over the quarter. and so, the narrative is more of a narrative, the reality is we're winning more share wallet than any company in the world right now. as i said earlier in the session, we won $1.8 trillion of money over the last five years, and i'm saying that in the backdrop that most asset managers had negative outflows >> what's that conversation like when you go to texas what are you telling them and what are you hearing >> i'm telling them that we will do exactly what you ask us to do and it's your money. this is no different than what we said to them a year ago and five years ago and ten years

ago. we're a fiduciary. it is your money we will do whatever you wish us to do for you. if you want us to invest 100% in hydro carbon we'll do that in a state like new york where they are attacking us on the other side, if they want us to be divesting of hydro carbons for their money we will do that. our job is to be working with clients. i will tell them what i think is right or wrong, but if they don't want to listen to what i think in a private session, our job is to do what they're asking us to do we do a very good job of that and our performance for all those accounts have been quite robust and, in fact, some of those states where -- we are the number one manager in alpha and it's all about alpha and outcomes and that's what they want they don't want us in those states -- they want to focus on esg and we tell them, with your money, we don't. it's all about outcomes. and no firm has the outcomes that we do on behalf of those

clients. >> have you changed your view on esg? you mentioned fragmentation, security, policy people are thinking differently about energy they're thinking differently about shoring and in a world of rises rates where this is all very expensive and we have to preserve margins does esg priorities change >> i think you're talking about the "e" part, energy side. we have more demand for opportunity in sustainability and carbonization. i think we're going to have hundreds of unicorns that will help the world in decarbonization. it cannot happen unless it's a fair and just transition and i never said anything but that even in my 2020 letter i do not believe in divestiture and i still -- and, you know, the left did not like what i had to say i believe you have to be continuing working with energy companies and we do.

we have a couple big announcements with two energy companies. one on their pathway and decarbonization and another with the pension fund we're working closely with these companies because i think they're part of -- they're part of the future in decarbonization. keep in mind, most of these energy companies own the geology where energy used to be taken out and now they're going to use those caverns for sequestration. blackrock right now is the number one -- we're building the biggest sequestration project in the united states in southern illinois and so there are going to be -- you need to do sequestration at the same time as we're using hydro carbons for many years i have not changed anything because everything -- but the problem is, some people on the left are taking some sentences out of my paragraph and the other side is taking the other sentences out of the paragraph. >> that's how you know you're right. >> i appreciate that, jim, but i

will tell you, our clients are speaking loudly by the amount of money they're awarding us. >> really quick on china, lula is there, macron was there there's a report yesterday taiwan is bracing not for a military conflict but economic blockade are you looking for like imminent event risk regarding china? >> no. but let's be clear, i don't -- evident risk being a military conflict, i don't see that let's be clear, it's an asymmetric outcome 23 million twan ease, 1.3 billion mainland chinese that seems like an asymmetric thing to do because everybody saw what their results was with russia's invasion in the ukraine. do i believe there's going to be economic tension that's going to grow yes. but is that imminent no we should expect that. you know, we have taken some aggressive features. i hear around the corner, the

u.s. is going to do some form of reverse sif fuss where we're going to be precluded in investing of the chinese companies. >> the decoupling continues. >> and we're going to see more near shoring and offshoring. no one is asking at what cost but that's another issue i would love to find a way that we could have a conversation -- i've talked to many ceos who stock trade on the new york stock exchange and they're worried. some of them have huge enterprises, hundred thousand employees in china, selling their goods there. is that going to be considered bad? you know, what is the responsible role of corporations that have businesses there are they going to be expected to pull out i hope that is not the outcome right now, if you add up the profits of u.s. companies in china and put that on top of the trade, our trade imbalance is not as great if you apply the

profitability also the last thing i would say, look, i'm a believer in conversation i write that in all my letters we have to have conversations. i think the business leaders can play a big role in bringing down conversations to try to find a way to work together i think there's no question we're going to have areas where we are going to be competitors and there's going to be areas where we should be, you know, working together and so we're talking about the number one and number two economy. in my mind, if there's more imminent separation, it means more imminent inflation. okay at what cost and we're not talking about those issues i think we need to be doing that i'm not here to suggest one way or another i've been in washington recently a lot. i'm hearing about those imminent issues you know, i know a lot less than some of these men and women in the intelligence committee, and, you know, it's disconcerting

what i hear from them. at the same time they're willing to have a conversation how can we better work together and i try to have some cooperation at the same with a lot of competition. >> i'm glad you're having the conversation it means a lot to us thank you so much. larry fink larry -- >> jim. >> ceo of the greatest money manager of our time, blackrock. >> thanks, everyone. >> how about tonight >> i've got secretary ra mando. >> a good friend. >> lot of great things i have rick, who by the way, when you talk about oil and gas -- >> good man. >> he's forward about what has to happen. >> see you tonight. >> good weekend. >> lot moronhee t banks and what to do with them boeing slumping this morning we'll talk about why after a we'll talk about why after a short break. such a rich history. yeah. this won't do well at auction. but at at&t, it's worth a brand-new samsung galaxy s23.

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boeing shares slumping this morning. between boeing and united health care, both shaving 200 points off the dow together news for boeing around the 737 max. our phil lebeau has been tracking the action and joins us with the story what's happening here, phil? >> sara, what we're talking is boeing pausing the dlib delivery of some 73 max models, how many remains unclear, and here's the reason why the company notified by one of its primary suppliers, spirit air row systems there is a problem with the rear of the plane where it connects with the vertical fin

they are not worried about this being a flight safety issue. they discussed it with engineers and the faa. not going to cause the grounding of 737 maxes however, they are going to have to inspect all of the maxes that are in production as well as those in inventory, well over 200 airplanes. not all of them will have this issue, but a good chunk likely will and that may have an impact not only on deliveries but potentially on production rate which is at 31 a month right now. when you look at their deliveries they were ramping up towards somewhere in the 420 to 450 range this year. that was the expectation from analysts that 2023 guidance is expected to come down between 60 and 100 aircraft depending on how long the pause lasts and how many aircraft are impacted. remember that boeing reports its q1 results on april 26th that's a week from next wednesday. and when you take a look at shares of spirit aerosystems, it's the primary supplier, the company that notified boeing it has a problem with the two fittings and that's why spirit

is down 20% today. hit to spirit. back to you. one of the stories we're waiting to see how much the analysts bring down the estimates now. >> we will talk about that later this morning phil lebeau on an important story regarding boeing. basically an hour into trading here dow is down 172. take a look at markets boeing is going to contribute to about 111 points of dow's decline being made up somewhat by jpm adding 72 let's get to bertha coombs with a news update. >> how are you, carl here's what's happening at this hour florida governor ron desantis quietly signs the heartbeat protection act into law overnight banning most abortions after six weeks in florida the legislation will not go into effect immediately, however, because the fate of a ban on abortions after 15 weeks passed last year is awaiting a ruling from the state supreme court protests continuing in france as the country's constitutional council votes

today on whether the government's controversial move to raise the retirement age without a parliamentary majority can stand. the japanese government approving plans for the country's first resort and casino in osaka, set to open in 2029 the $13.5 billion project is backed by a consortium including mgm resorts international, which will own a 40% stake japan's nagasaki prefecture is in talks with the government for its own casino project they could rival macao. >> lot of investment into japan these days thank you. don't miss jim o'neill, former chairman of goldman sachs asset management will join us after the break as we look at the s&p 500, negative. the only group actually atth's remaining positive in terms of sectors. financials, up more than 1%. everybody else has gone negative, with the dow down almost 200 almost 200 we'll be right back.iled thing

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expecting a big recession in the u.s. we have to offset that we have three giant fiscal stimuluses that were created in the last two years starting to enter our economy. the infrastructure bill. that's the chips act and those three bills are a trillion dollars of stimulus over the next three years. >> that was blackrock's larry fink this past hour saying he doesn't expect a big recession in the u.s maybe not even this year amid the economic outcome. joining us is former uk treasury minister jim o'neill always good to talk to you how are you feeling about the economic prospects in the u.s. globally these days? >> um, i'm not entirely sure i think things look potentially better, but, obviously, there's all sorts of banana skins out there still, some of which we

know about, but certainly seems to me leans me a touch towards the more positive side, the inflation evidence is improving. i notice the past half hour you had the latest michigan five-year inflation survey that i always followed throughout my professional career and it's down at 2.9, which it was on the previous short-term -- last time it was out, which is pretty good news given where it's been edging up. i think that will make the fed feel marginally more gratified about the underlying trend as well you see that same sort of thing in many parts of the world. >> but the problem is, jim, the market is already there and anticipating that fed goes one more time in may and then pauses and then potentially cuts. does that align with your -- larry fink was telling us he

doesn't expect inflation to settle down below 4% and that's going to keep the fed continuing to raise and remain high. >> so that's partly why i sort of dithered a bit when you asked me as you know from when i've been on with you recently, i think it was pretty easy to expect the market to do this, but to sustain this strength or go a lot higher, when the market is priced in fed easing, given what fed keeps saying, and we've got the famous month of may around the corner and we've had a pretty good year, you know, i'm not sure i want to be chasing it too much right now, but that said, i suspect we will be creeping higher until the fed comes and smacks the market down as it has done occasionally

since last fall. it might be the most likely path of direction i can't see the fed rushing to ease because they wouldn't be happy if larry is right about that on inflation, obviously, and if the economy does rebound more than they're expecting, it would make them want to stick to at least where we are and open the idea of some modest timing, i don't dismiss. you have the same die lem na over here in europe, by the way, with the evidence being similar. it's delicately balanced i would say. >> as you know we played a clip from larry fink and spent a lot of time with him a short time ago. he spent a good amount of time talking about china and the decoupling going on and the impact that it may have that in his opinion could actually tends towards making inflation harder to eradicate i'm curious to get your thoughts

on where things stand, u.s., china, europe, china, and what that decoupling will really mean >> yeah. so i think what larry is saying, though, is kind of almost a pretty typical academic intellectual argument about if you look at the past 25 years or at least until a few years ago, the whole integration of china and the interplay with the u.s. was probably part of the disinflationary story globally, so removing that isn't positive. however, as try to point out to many people, first of all, if you look at the latest chinese inflation data of which we have some yesterday, their inflation -- extremely soft despite the fact that they're having a big cyclical rebound out of covid and then something else which i think i saw you guys reporting

on actually, which caught my eye, the idea of apple starting to produce more and more iphones in india instead of china and, you know, the idea -- i've never thought the idea of india being a major replacement for everything china did so cheaply should be taken too far, but there are plenty of places around the world that can try to offer the same kind of production value i'm not -- while big picture i get where larry is saying, but the dynamics are such that i don't see that given where we've come from as being an issue in the near future myself. >> jim, are people talking about macron's visit as a surprise or - >> sorry sorry. i should have touched on that. i think that's the very -- a very interesting thing and i think as it relates to europe, if you look at what macron has to say, and if you look at some

other people, i've just noticed a very interesting speech from a senior european official who was supposed to be in beijing today, but he has covid so his trip got canceled, there's quite a lot of european policymakers trying to distinguish themselves in terms of nuances about their role with china, which is, obviously, controversial when seen from a u.s. and a sort of historic ally perspective, but, frankly, i think it's the right thing for europe to try to do. europe needs to decide on its own appropriate policy with china, and not just adopt everything that oust effectively bullies it into doing or wanting, the same way that my own country the uk has done too much of in my view. >> jim, always good to get your thoughts the brick creator, right the original bricks.

jim o'neill. >> stamped on my forehead forever, sara. >> at least we didn't do the lord thing this time always good to see you. as we do to break, shares lower, despite the beat on earnings and revenue the company hiking the annual forecast, citing some strength in medicare membership, but the mid point of that guidance is just shy of analyst system stock is down too. stay with us technology lets you monitor your pet when you're not at home, but to monitor threats to your hybrid workforce wherever they are... you need more than technology. you need cdw, who gets to know your business and can design and deploy custom solutions, with pre-configured hp notebooks

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entrepreneurs in the country we're also the least funded, least supported, we really wanted to create a space that would help to close that gap anything i learn that's helped me in the business i want to pass it on because when my sister wins we all win our next guest has buys on jpm and wells and remains neutral on city and pnc on a big day for the banks. ubs managing director of large cap banks and consumer banks erica najarian joins us. appreciate the time. >> of course. >> issuing a report card for today's numbers and if you can, let us know what it means for the broader space and if there's any sort of sense of clearing or relative calm given what we know about underlying issues and say commercial real estate. >> sure.

i would give an a-grade to today's results, but keep in mind that the banks that reported today are generally considered the highest quality in the industry, and while, let's say, jpmorgan was an a-plus and perhaps, you know, pnc was a b-plus, i think this is not necessarily the clearing event that market needs, as some of the midsized regional banks reporting next week. that being said, i think the stocks have really, you know, priced in a lot of eps cuts already, and i think what we're learning from the regional banks that reported today is that we will see revenue expectations get cut, but i think that most of those cuts are already priced into the stocks. >> as far as the consumer goes, i mean, it didn't read like an environment where the consumer is maxing out on credit cards, but does it feel more like a normal sort of normalization regarding charge offs and

consumer that going into a cycle? >> yeah. keep in mind that the base of losses and delinquencies and non-performing loans is really quite low given all the liquidity that had been pumped into the system during the covid pandemic, and so, you know, the direction of travel has to be up, but to, you know, answer your question directly, carl, it is more like a normalization of losses, you know, rather than something that is more alarming. >> but there clearly was a surprise here? jpmorgan is up 7.5%. i mean a lot of these bank stocks have gotten pummeled. citigroup is up sharply as well, bank of america, even the big banks which we knew were in better shape had been beaten up on worries about deposits, higher deposit costs and those costs are rising net interest margin, so as far as the read on the big banks, did it give you enough information going forward about what some of those

concerns were? >> yes so look, i've never screamed when i've opened a bank presentation pdf and the outlook of -- for net interest rate income at jpmorgan at $81 billion was so far ahead of consensus and so far ahead consensus and so far ahead of even lofty expectations, i think that's why that stock is running today. citi at well below tangible book, the expectations tend to be low there but to really summarize what the lesson here is for the big banks themselves, that despite being heavily regulated, despite operating in a tight credit box, their ability to maximize profit on higher capital is pretty significant when there is some height to the interest rate environment, even the deposit. deposit rates are catching up. really the lesson here is what's not great for the banking industry, the economy in general, is when rates are at

zero for nearly a decade >> well, when we hear from the other regionals or midtier banks, are we going to be concerned again for parts of the banking industry, in your opinion, in terms of their inability to grow? >> i don't think so. certainly they're not going to be anywhere near what we saw from jpmorgan. and i do think these midsize regional banks will have to revise lower -- any revenue guidance because of increased funding cost that being said, the amount of panic, existential questions that have been priced in particular into midtier banks has been extreme, in my opinion. thus, when we see the results, it's definitely a pinch in terms of higher funding costs but the results are not going to be as extreme as feared. >> well, we got the first batch down and we look forward to more next week.

appreciate the help. always appreciate it. we'll get a lot more on the banks. we have wells fargo cfo coming on in the next hour of "squawk on the street. the stock has actually turned around wells fargo was higher this morning on the back of results it's now down 0.50 dow is down 170 and s&p 500 down about 0.3 as well. about 0.3 as well. we'll be right back. transform . but it still doesn't make you a rock star. so unless you work with an actual rock star. hi, i'm ozwald. hello ozwald. pam, you are a rock- i wasn't going to say it. ♪♪

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washington this involving the semiconductor industry let's get to kayla with more for us >> the commerce department is set to announce more than 200 companies have registered interest in funding for new chips facilities according to a draft obtained by cnbc of the more than 200 statements of interest, more than 100 of those correspond to the construction of new commercial fabrication facilities for both leading edge and legacy fabs the other half represent interest from suppliers and research projects and the applications represent 35 states the draft report did not include names of companies or the sizing of the funding applications, but it does come after industry leaders raised questions early

on about some of the requirements to receive the funds, including the proposal to provide affordable child care. it remains to be seen what exactly companies are proposing to meet some of that criteria and, of course, which companies will ultimately secure that funding. david? >> it's incredibly expensive to build a fab, especially an advanced one these days. over $10 billion, kayla. the c.h.i.p.s. act, what are the expectations in terms of do we even know in terms of what they really expect to be able to accomplish >> well, we know there's $39 billion in these manufacturing incentives that's this first tranche. and the notification of the funding opportunity from the commerce department for this tranche of funding includes these new commercial facilities. there will be later funding applications for, say, suppliers or research and development. these 200 applications are just for those new commercial facilities, david. we don't know whether this is an application for, say, a $50

million expansion on an existing fab or for $10 million for a brand-new fab. we'll have to wait until we get that full data certainly it is a strong indication of interest, at least in terms of the volume of applications they're going to be getting. still remains to be seen where they end up dispersing the money and how much. >> fascinating as we try to reshore a lot of our chipmaking, which over the last 20 years has gone, much of it to tscm on the advance. thanks, kayla, in d.c. with the markets, got the banks strong but as we've said, the s&p and the doanw d nasdaq all down that will do it for this hour of "squawk on the street. great weekend, everybody carl and sara are back with the carl and sara are back with the next hour after thisvisit indeee

good friday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with sara eisen on the new york stock exchange jpmorgan's chief economist, we'll get his reaction to the fed's move, echoing atlanta fed saying one more and done. the cf