$10.8 billion. it is monday, april 17th, 2023 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. if you want to take a look at what is happening with u.s. futures. dow is up 4 points last week was a down day for the averages dow was up last week for the fourth week in a row up 1.2% for the week look at treasury yields. you saw the numbers coming in with inflation which was less

than anticipated you see yields building up 10-year treasury is yielding 3.539% 2-year treasury at 4.15. okay let's talk about what is going on with the squawk planner light day or week for data march housing tomorrow and beige book on wednesday and jobless claims due on thursday much of the focus is not on data, but earnings that is the new data charles schwab will open the books since the collapse of silicon valley bank and signature bank tomorrow, we get reports from johnson & johnson and bank of america and goldman sachs and united airlines and netflix. another big day. on wednesday, travelers, morgan stanley, ibm and tesla on thursday, we hear from at&t and american express and several regional banks that will be a big day in terms of trying to understand the banking system we will hear from truist and

5/3rd and huntington on friday, we hear from p&g and see if jpmorgan chase transposes itself i don't know i expect we see capital raises with this, but maybe we won't. >> we're beyond it everything's fine. everything's perfect the fed can raise again. the 10-year treasury is above 3.5. the 2-year treasury is above 4 >> i was surprised >> inflation last week >> inflation coming down you think the yields would come down a bit, too. that's not the case. >> beating this 25 basis point hike to death. it is still 78% or something of fed funds. everybody saying that's probably it it really wouldn't do anything,

but they have to do it >> why >> psychologically stay the course. we are tnot swayed by -- >> data? >> people want the pivot spacex will launch the star ship this morning. targeting a 9:00 a.m. launch from star base in texas. star ship is the candidate for the fully reuseable rocket the launch involves 33 raptor engines that ceo elon musk compared to grenades it has flown shorter flights this is the first time it is using the ship and boosters together elon musk says the company faces serious challenges in pulling off the launch the flight test is more than likely going to be scrubbed.

and in the meantime, florida governor ron desantis is cracking down on disney to avoid the move to strip the oversight board power over the company the report says the governor will seek to revoke other privileges disney has enjoyed with the special tax district. it could include external inspections of the monorail and rides. alphabet ceo weighing in on the future of a.i. and what it means for society. he spoke on "60 minutes" last night. >> two ways i think about it on the one hand, i feel no the pace we can adapt as a society compared to the technology evolving is a mismatch on the other hand, compared to other technology, more people

have be have been worried about it in the life cycle the number of people worrying of the implications and the conversations starting in a serious way. >> a.i. will impact every product across every company i think staking out a role as being more considerate of social and society issues compared to open a.i. compared to others elon musk wanted a six-month pause on it, but we hear musk wants to create his own a.i. system or a.i. chat system and has been buying up all sorts of chips. >> six-month pause so he can catch up is that the implication? >> for him to catch up you have sundar which put out

that bar which didn't seem as adv advanced, but has a lot of -- what is the bowling alley with the kids >> the bumpers >> a lot of bumpers on the side of the system. >> you can bank them >> clearly a lot of bumpers if you ask questions and the answers are not over the top fascinating as what you get out of open a.i. >> he had a lot of interviews in the last week. like nuclear technology. that's scary it can wipe out a city a.i. is scary. it can wipe out time we had palantir here he said russia and china having it is more dangerous than him having it himself. is russia going to get ahead of us i would not fly on one of their

airplanes. it is scary to get behind it than down the road 10 or 15 years. we had eric schmidt on he did not say i was a lunatic. >> he did not call you a lunatic for thinking that. >> not for that. >> how concerned was he? >> he said we just don't know. think about a being that really is -- we don't know if we can get to that. >> a centian being. >> i don't know if it is about that, but a.i. on the battle field. literally turn on and off things negotiating with not just a human being, but another bot doing the same thing.

>> that is what all of the novels i tell you about. there are no humans left in the novels all of the smart revenge it is scary. for something to decide to turn something off in warfare, you would tell it, don't do that, so it has to go beyond what you are telling it to do, right? we don't know if you get to that point. near term, you worry about deep fakes and kids and society you worry about the minor issues with tiktok. merck announcing it is buying prometheus for $10.8 billion. prometheus is developing products for immune products crohn's and colitis has reported positive study results in

testing and is advanced to late-stage trials. nice to cure i can't imagine. new overnight, japanese gaming giant sega announcing it made a $766 million offer for rovio. maker of the angry birds game. that's still around? they're still angry? >> the shareholders are not angry. >> it is weird mad cows why are the birds angry? why are the cows mad >> the pigs came and stole all their eggs >> sloppy pigs this is a 19% premium from the previous disclosed price rovio's board is in support of the deal we talked about fox and didn't say a word about fox >> we have more coming up on fox. >> we do >> we will talk about it coming up, futures right now. look at this dow up 15 points

nasdaq off 12 points the s&p is up about 2 points we will talk strategy after the break ahead of the big earnings reports. at the top of the hour, don't miss investor steve eisman this is "squawk box" and this is cnbc

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dow up 12 points nasdaq down 9 points s&p 500 up 2 points. we talk about this with serat sephy. we have a slew of earnings to get to sarat how do you set up ahead of them? >> i think friday when you looked at it, it was unexpected. bank earnings were positive. we have a bit of a tailwinds going into earnings. i would take that with a grain of salt, andrew. earnings will come down. people are waiting for the fed or hoping the fed is going to stay where they are or cut rates. i don't think that will happen in the near future you really have positioning which is important for us, you have to be in areas where earnings are going to be

strong and those are a couple of areas. consumer stables and healthcare. >> when you look at the bank earnings on friday, how much can you extrapolate out to the other banks? m&t this morning is holding out strong what is the expectation? >> i think the super regionals and majors will do fine like you saw on friday. i think where the worry is going to be in the midsize and smaller community banks. that is where the deposit base is moved and lending lessened. in that case, that hurts the bottom line. capital base is going to get hurt i would be careful there i think the world has changed when we had the issues with silicon valley bank. i think you have to be careful i think the larger banks in the area will do better down the

road >> p&g we get p&g this week so far, p&g has done a relatively, i don't know, for shareholders, a masterful job of maintaining margins. do you think they can maintain margins in this market we heard from andy jassy that people are trading down. >> i think p&g has really changed the company. they are focused on a smaller group of products which, i think, will help them. really, this is the staples area the company is not trading at discount, but i think that is where you could be in safe harbor they have global growth. they are all over the world and they have really good brands the question is valuation. andrew, you really have to know what you own and the valuation even in some of the staples where you have to be careful earnings and expectation going forward is important for certain

stocks, especially the ones held by a lot of people. >> talking about one held by a lot of people. tesla. what do you anticipate what do you think of the company? >> i think tesla is a great company. the question is margins. can they maintain margins if we saw them cut costs to increase sales. if you look at valuation and tesla compared to any of the peers, it trades at such a super premium. any misstep on tesla which we saw a few months ago where the stock cut in half. it is a great company. in terms of valuation, everything has to line up. i think that's where investors need to be careful. >> two broad questions is there anything you are buying this week ahead of the numbers or is there anything you are selling on the back of the numbers we heard on friday as a result >> i don't reallies py position

front of earnings. that is hard to do we are overweight staples and healthcare and utilities more defensive positioning what i'm looking for, andrew, are good companies that might go for sale if that happens in industrials and technology and certain other areas, i'll be ready to buy. that is where you have to be a little more careful. some of the areas are fully valued and if earnings don't come in or margins come down, we know wages are going up and demand is slowing down you might get a chance to buy high quality companies at discount prices. >> sarat, thank you. >> thank you, andrew when we come back, the defamation trial against fox news delayed by a day. we will talk about the potential for a settlement next. and later, tomorrow is tax day. we tell you why refunds are expected to be the lowest we have seen in a decade. "squawk box" will be right back.

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fox news defamation trial has been delayed until tomorrow. eamon javers has more. eamon, good morning. >> reporter: good morning, becky. it was after 8:00 p.m. that we got the word that the trial set to begin today would be postponed by a day the judge gave no reason for the switch when it does begin, the legacy and business empire of the most powerful media mogul of our time is on the line in the delaware courthouse dominion voting system is calling for false claims of the

machines that aired on fox news after the 2020 election. fox calls this a political crusade in the financial windfall and first amendments rights of the free press is at stake here analysts on wall street are watching the trial and bank of america analysts cut shares of fox to neutral and slashed price target to $34. they say this is a risk to fox in the near term for every $500 million of damages fox is required to pay would equal $1 per share in damage to the stock price. there are tough developments for fox before the trial begins. on wednesday, the judge sanctioned fox for withholding audio repcordings lawyers for fox apologized for failing to define rupert mu

murdock's role in the company. some of the prominent figures on the network believed the issues were false dominion said executives knew fox's fate was on the line on november 16th, 2020, rupert murdoch e-mailed that he did not want to antagonize trump further. everything at stake here legal experts say the precedent this case sets could have implications for american media and politics and business for years to come. we will see what happens when it gets under way becky. >> eamon, speculation of people trying to figure out the delay and if it means they are closer to a settlement. >> reporter: that's the big speculation in delaware. settlements have been known to happen on the courthouse steps

the question is does dominion have incentive to settle fox has been dealt a few legal blows here in the run-up to the case do they want to go to trial and go all the way with it or maybe because trials are a wild card, do you settle? we wait and see. a lot of lawyers in town here for both sides we imagine they are heating up the text chains back and forth we will see what happens. >> a lot of conjecture as there were a lot of adverse developments for fox a lot of conjecture is if dominion can prove anything close to that number as far as damages given what the company was valued at. >> you are arguing future business potential. >> i have seen it as little at $70 million and asking for 1.6 i wonder if they know anyone at

fox they can call. >> reporter: do they work for anyone >> i heard last time that it did come -- not confirmed. rupert did tell someone. it did say dominion may have softened its stance. that was in the journal piece today. perhaps in recent days, you know, a terrible week for fox. if dominion were to say i don't know does 500 sound good fox settles for $400 million was that the uk phone tapping settlement >> reporter: there's a history of settlements there sometimes you don't know sometimes it is undisclosed terms. given this case and the dominion public posture and releasing the emails, you think dominion would

put a marker out we don't know at this point. no reason given for the delay in the trial. you have to imagine they are furious back channel negotiations who has the upper hand how much is that upper hand worth? >> you have to wonder if dominion was successful, how long is the appeal process that is what t"the wall street journal" points out today. >> reporter: the irony of standing here in wilmington, delaware, is this is all about the biden and trump election this case is adjudicated in delaware which is joe biden's home state there are reminders of joe biden everywhere there are implications going back to the trump presidency they are the not fighting on favorable home-field turf for fox news. >> people point out dominion has

taken the mantle of fighting for truth, justice and the american way. they want everyone to know exactly what was going on behind the scenes they want it aired publicly. it has already been aired publicly >> reporter: you do get the sense this is more than money for them the ultimate american values fought for here by a canadian company. >> can fox settle and say without admitting or denying any guilt? >> reporter: would dominion agree to that after this >> do we know how much money dominion has spent so far or fox? >> reporter: i don't know the answer to that it has to be a lot these cases are thenot cheap. >> $2 million? $10 million? you could argue this is great marketing for them >> by who?

>> dominion. >> reporter: who heard of dominion before this >> smart matic is waiting in the wings. that's the another one they just settled with some venezuelan guy >> reporter: if you settle, then do you set a precedent where you are writing checks how many others could be out there? >> and other people said the murdochs own a certain amount of fox. the board of directors has to be feeling queasy paul ryan and others if it was a big settlement that they could get sued by shareholders, eamon? >> reporter: the other question, joe, goes to fox's business in the future they are in the cable television business you know this business as well as anybody >> i don't think they lost a viewer >> reporter: the cable carriage fees the question is if they

renegotiate fees in the future, how valuable is fox to the cable networks now does this damage that value prospect will fox get the numbers it wants in the negotiations years to come or is this pulling the ceiling down for fox in what they are worth overall that is the question of the enterprise >> i don't think ratings have been impacted. would they be impacted if there was an adverse ruling in a trial? would it be impacted if -- the advertisers -- >> reporter: the core fox audience would see it as a system out to get fox and they would be fine with it. the question is is fox forced to air apologies by the anchors on air in the primetime hours that they made them originally? there are 20 statements contested here from people like lou dobbs and marie bartolomo.

lou dobbs is not on the air any longer you could have anchors on the air apologizing if it goes south for fox. >> is there anyone not taking that vegetable and fruit prowde at this point? what is it called? >> the green one >> yeah. >> i take it all the time. >> you do? >> absolutely. >> you're 38 >> greens? >> andrew is 70. he looks 38. >> a woman takes the crushed up stuff stuff. she said her golf swing was not on plane balance of nature. i forget the name of it. you can get the fox code and get a deal her swing got back on plane after that

unbelievable i can only imagine your sex life >> reporter: you watch a lot of tv, joe. >> bye, eamon. >> what's the name of it mypillow mypillow 2.0 coming up, house speaker kevin mccarthy is speaking at the nyse today he will talk about the showdown over the debt ceiling straight ahead. the countdown to launch is on we will talk about the planned launch of the spacex starship at 9:00 a.m. eastern. stick around "squawk box" is coming back.

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good morning welcome back to "squawk box. we are live at the nasdaq market site in times square the dow up 25 points s&p 500 up 2.5 points. nasdaq off 8.5 points right now. kevin mccarthy turning to wall street in the latest chapter of the standoff of the debt limit he is set to speak later this morning to rally support for house republicans debt limit proposal which would raise the debt ceiling for.

>> referee: -- for roughly a year including the student debt cancellation joining us now is james french hill from arkansas vice chair of the house financial services committee >> good to be with you thanks for the invite. >> what about the idea of taking this to wall street? is this a good venue to highlight what's going on? especially after what has happened in the last month or two. this seems to be more serious than that. >> speaker mccarthy is celebrating 100 days majority by coming to the new york stock exchange to talk about the threats of the unsustainable budget deficit and what should be done about it i think he will make the point that we have been asking since february 1st for meetings with the president it to talk about m mutually to raise the debt ceiling. it hasn't gone well.

he wrote a letter. speaker has called him the mission is to layout the house republican plan to raise the debt ceiling he has chosen the new york stock exchange to talk about that. president biden is off on the ancestry.com tour in ireland we are coming up with a sense of how to raise the debt ceiling inside the republican caucus and bring that to the american people >> what leverage does speaker mccarthy have? it has been pointed out and it might be unfortunate if you wish we could do something about the debt, but at this point the president can say i want a clean raise. if we were to default or something horrible, it will be blamed on republicans. what leverage do you have? >> i don't see any success by chuck schumer to do a clean debt ceiling raise. he hasn't gotten that vote

across the senate floor. house republicans want some improvements 11 times in history we have spending cut deals and reforms by using the debt ceiling. that's a constructive way to do it. >> versus how many clean debt ceiling? >> a bunch of short-term clean debt ceiling raises. my point is it is a leverage point to get the parties to come together to do spending reforms. we want to cut the rate of growth in spending we want to save taxpayer money we want to have a pro-growth approach bypas passing hr-1. >> it is not just cutting the budget deficit, but giving everybody everything else. >> it is not right to say where is your budget against the debt ceiling? you have the chance to talk about structure reforms in the

debt ceiling debate as opposed to the spending number i think americans are tired of inflation. we want to offer supply side. >> energy and ramming other stuff. >> it is not ramming it. it is things we think would lower inflation. these are republican ideas for the president's consideration to lower inflation and make the economy more effective to hiring workers. we are short workers every employer in my district cannot find the help they need and save the money to repeal what is left of unspent covid money. we propose to try to cut some of the spending joe biden has done. block the student loan writeoff. i don't think that is constitutional i don't think that is wise >> the court said let it go. i was actually surprised by that >> yeah. i was surprised by it. i still think at the end of the day, that is way beyond executive authority.

>> you want to roll back climate stuff? permitting >> in hr-1, we reduce regulatory burden in the permitting issue that allows us to go back to energy independence. just this week, we have seen the 1 million barrel per day reduction of opec. prices are headed back up. let's go back to energy independence and american energy produced >> do you think it will be just the covid -- is that enough of a bone to get the republicans to play ball here what is really realistic that you could expect president biden? >> that's why we offered a menu of things. we are trying to get into the meeting. this is what mccarthy asked to do since february 1st and the president said he would. he came up with the prayer breakfast and said mccarthy and i will work together nothing has happened in 75 days. i think the right thing to do is

to do what we are doing. propose the debt ceiling increase we are not for the government defaults on debt propose ideas and fight inflation and open the supply side and the economy lower trajectory and spending. this week, $1.4 trillion is the deficit estimate for this year these are unsustainable numbers. our view is where are the democrats and republicans of days gone by that both agreed the smallest deficit is the best deficit and fought how to get there? we are so off that from the pandemic, in my view, and this is the effort to open that conversation back up. >> do you think this ultimately is something that democrats and republicans come together? neither party really has the ability to do it on their own and if you look at it, it has been only 100 days he doesn't have the power to bring it through

there are republicans who are not going to be satisfied with any of the things you laid out. >> look, we are fully aware we only control one house of the congress and we don't control the white house. >> i don't know if you can control the house. >> i do believe we have consensus in the package we propose and pass it across the house floor. >> let me ask. is this the way to do it i think we all agree or maybe we don't, that we have to do something about the budget does it have to be done through limiting a debt increase i think we have seen the debt limit now -- you said there has never been a clean time? >> no. many >> many more >> three times in the trump administration was close to $1 trillion this has happened. >> i think we talked about this maybe on this show before about 1917 do we need a debt ceiling? there are members to introduce a bill to abolish it what i like about the existence

is the fact it causes congress to have another reason to get back together and talk about it. not only spending, but spending reform and structural al issues of the rate of spending. >> those are important conversations. can you do it without holding the system hostage >> it is the nature of the beast in the congress. >> you need to talk about it. >> congress as john boehner said, congress moves slowly. you need the function on the tough issues >> do we get it? christine lagarde saying she had faith in the country you think we get through it? >> i'm an optimist on the issues the men and women i work with don't want to default. they want a deal house republicans are working inside the conference to come with the list of ideas

>> do you think they should have taken social security and medicare off the table >> you can to the deal with long-term structures without social security and medicare our leadership typically take it off the table. the last time we had substantive reform which saved social security for 40 years was the greenspan effort in '83. i am supportive of the bipartisan commission for reforms for medicare or social security i don't see that on the table today. i do hear our members talking about it isn't that the right way to go about a it becau-- it. that saves the programs for decades to come. that is the mission. preserve social security and medicare as a viable program for se seniors. >> asa hutchinson? >> asa is off on the deal in

iowa this week. >> who should be the nominee >> you know, my preference is something who can serve eight years. i want change here i said for over a year, i prefer both parties to nominate somebody different i like a younger candidate and candidate can bring the country together and serve eight years that's my practical view i'm going to vote for the republican nominee that is my view of my preference >> congress member, thank you. >> good to be with you sdp >> great to see you. coming up on the other side of the break, "super mario" is setting records at the box office. and later, mohamed el-erian will give us his take on the trading week ahead

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welcome back to "squawk box. net flick apologized for the debut of "love is blind. netflix would make a repcording available. the dating show matches couples from getting to know each other from the privacy of pods the only second major live streamed event in netflix

history. apparently live tv is harder than people think. >> all weekend long. my daughter was home >> the dating game >> they play all this music. that music is so -- when things are happening, they play this music. >> da-da-da-da >> you fall in love and meet the person the one that i was watching from the kitchen and they went all the way to the altar and got left at the altar. >> oh, no! >> terrible. when we come back, the rally in tech stocks helping to lift the nasdaq 15% year to date. this week, we get quarterly results from netflix and tesla we have the detailnes xt >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and

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on this week's tech's earnings agenda, we've got netflix reporting tomorrow and then tesla on wednesday. for a preview of what to expect, we want to bring in paul meeks he's a finance professor at the citadel. that's pretty cool welcome, it's good to see you today. >> always a pleasure. >> all right let's talk about what you're looking for. netflix on tuesday, tesla on wednesday. you feeling optimistic about either of these reports? what are you doing ahead of them >> i'm not doing anything ahead of them. i'm not particularly optimistic. netflix has had a huge move off the bottom, so has tesla

let's go to netflix first because they're reporting first. i still think there's questions to be answered about password sharing that is a key component for them we have a ceo transition, and a morphing in the business model, and we'll see what happens, but i think right now with all the angst still surrounding the stock, it's probably just a hold if you own netflix but for the call i definitely wouldn't buy it before the call. >> specifically on password sharing, what would you like to hear from the company, that some of those people getting kicked off, sharing passwords are converting to subscribers? >> that's right because we don't really have a firm and announced plan on what's happening here, and of course you're going to have some cannibalization in the business you might have some incremental users, let's hope. we also don't necessarily know the pricing of those incremental

users, whether they be in your family or not. i still think there's some ifs it's worth talking about that is a very big if going forward for revenues for netflix. >> and then tesla. >> so tesla same thing goes. we've had a big move off the bottom we're up 80% off the bottom. based on mathematics and how poorly this stock did last year, we're still down 50% from the top. there should be no controversies about what the report for their quarterly results because they've already preannounced both production and deliveries i'm more worried about the long-term and what they say about it we all know they very aggressively have cut costs. now, they also had an analyst meeting not too long ago where they talked about significant efficiencies in manufacturing, maybe to bring their costs down, is and so what is going to be that swap because the prices they've dropped swiftly, significantly,

with the manufacturing efficiencies, let's see what happens. i want to see what the going forward guidance is. i don't think you'll see any kind of controversy about what they report this week. >> we only have about a minute lef left i know you think the nasdaq came too far too fast what would it take for you to get more optimistic about them >> so i need to hear some inklings at least, maybe some green shoots in the turn of the fundamentals in the second half of this year i think that the biggest factor, the 80% factor, the other stuff is the 20% factor. i unfortunately feel that too many people have driven these stocks up based on the fed pivot narrative, and i do think that the fed will raise a quarter point on may 3 and stop and that will take a headwind away from us i don't see a tailwind that's necessary to propel these

sto stocks so i'm super worried about that and the fact that that and almost that alone drove the nasdaq up 17% in the first quarter. >> thank you, paul meeks. coming up, stocks to watch, dom chu has a look at morning movers and later mohammed el-erian is going to tell us what to expect from the trading week ahead. "squawk box" will be right back.

good morning, investors await more earnings this week. we're going to be hearing from investor stevizeman and talk market strategies. the international energy agency predicting record demand for the rest of the year as oil prices reach four straight weeks of gains what it could mean for consumers. and a special report on how u.s. companies and the government are trying to keep american-made chips out of the hands of the enemy the second hour of "squawk box" begins right now ♪ good morning, good monday morning, and welcome back to

"squawk box" right here on cnbc. we're live at the nasdaq market site in times square i'm andrew ross sorkin along with becky quick up 27 points on the dow, s&p 500 up as well, five points higher nasdaq turned around, we're now up about 11 points importantly, let's take a look at treasury yields right now you're looking at the ten-year note the two-year back over 4 we're at 4.143 >> let's get right over to dom chu. good morning, what's up? >> we've got, becky, we've got our eyes on one regional bank in particular this morning, already out with earnings. that's m&t bank. i want to show you what's going on here. they're thinly traded for right now, premarket. they're indicated higher this is the buffalo, new york city -- new york ranked regional with regard to total deposits, a

highly scrutinized number these days, m&t had 159 billion versus the 103.5 at the end of december last year, adding that the 3% decline roughly in deposits includes seasonal factors and didn't imply that there was any real deposit flight that was out of the ordinary. m&t bank shares up 2% right now, a big focus for a lot of investors given the regional bank turmoil next up you've got shares of a big deal in bio tech prometheus up 70% right now. the immunology company is getting bought by pharma giant merck for $11 billion. that works out to be $200 per share. merck is looking to boost its future product pipeline. prometheus is up 79% merck is down about 1% on that particular deal. we'll keep an eye on those and shares of penn national gaming, lower by around 1.7% thinner trading volumes right now, not helping matters is a

downgrade by analysts at jmp securities who rate it a more neutral rating they cited higher valuations and anticipated market share declines so penn entertainment down about 1.7% right now >> thank you we'll see you in a little bit. >> that was like the fourth alien movie, wasn't it >> what? >> prometheus. >> yes, it was related to the franchise, yeah. >> 2012. futures right now are, as you can see, not a lot happening, up a little bit we're in the green we're going to continue to get quarterly results this week including from a few more big banks, regional banks as well. joining us to talk markets, earnings, the fed's next move is steve eisman senior portfolio manager did you feel better last week with inflation kind of moderating with the cpi and the ppi or didn't change anything in

your view? >> i mean, a little bit, but i mean, it's just one data point, so we'll see i mean, yes, a little better it's unclear to me what's going to happen to the economy going forward. i mean, i think there's definitely a slowdown. i think it's way too early to talk about a recession, even though financial kconditions hav tightened somewhat, but it's not even clear how much they've really tightened. >> everybody is talking about perhaps seeing the end of the hikes. maybe we get 25 more, maybe not. maybe we get more than that depending on the economy strength now, goldman sachs says that doesn't necessarily mean that stocks are ready to take off if they do stop in the past it's been an average of 19% over the next year in the s&p, something like that but i guess according to david kosen, that might not be the case this time if there is just one more and then we get an idea that there's going to be a pause, do you think that would be a time to buy the s&p?

>> it's not clear to me either i mean, if the fed stopped raising rates, i don't think there's any question there would be a pretty sharp rally at that point, and then people would focus on what's going to happen to the economy, and you know, if the data points start to get very bad, then, you know, i think the market will focus on that but if the data points are okay, then it would be time to rally the situation is just so fluid, i think i said this before, you don't need to be a hero at this point. i think you have to wait >> do you at this point think that we're going to -- that 2% number, is that locked in stone for inflation? would you settle for three do you think the fed would settle for three is three that bad? >> i don't think three is that bad. i think two will be very, very difficult given how much wages are still going up you know, look, if i was the

fed, i would be satisfied with three, but i'm not the fed i don't know what they're going to be satisfied with at this point. i do think they should be satisfied with three. >> you said it's one data point, but it has been -- we did see the peak in all of these numbers like more than a year ago. so it's been a steady -- a slow steady sort of moderation, and that's the latest data point what's even better than some of the other ones the peak in all these numbers was over a year ago. we are in sort of a at least compared to where we were, it's been a disinflation mary periodi terms of at least coming down a little >> i think that's very fair. the counterargument would be i just think that the fed, from what i've noticed, is really focused mostly on wages at this point. now, you know, if unemployment were starting to go up or wages were really going to slow in terms of wage increases, i think that would please the fed the

most and maybe that's going to happen but you know, at this point i think wages are still going up what's interesting about this period is that, you know, at this point after the fed had raised rates so much, wages would already start to come down the labor market is so tight because of the ramifications from covid, it's happening -- it's going to happen much later. so you know, how the fed's going to factor that in, we'll see but it seems to me that that's what the fed is focused on most. >> is the -- what would you call what we saw in the regional banks in the last month? would you call it a crisis whatever you call it, is it -- is there more to come? is it -- have we regained our mojo we feel pretty good about covering fdic up to a certain point or that that's going to be forthcoming? >> look, the fdic will be covered by the big banks i think what everybody should focus on is not the big banks.

it will be everybody below m&t, you know, pac west we'll see what happens to first republic you know, m&t, u.s. bank corp. first to rise, and i think that's too high. see what's happened to deposits. it's really going to be when the medium-sized, smaller banks start to report that we'll really get a feel for what's happened we'll have to wait >> and you know, you look at the macro picture. of course you did pretty well doing that in the past how much duration risk is out there? i mean, we went up 500 basis points without a pause a lot of people thought it was a no-brainer to just buy long-dated treasuries. are there a lot of mismatches out there that are going to come home to roost in terms of liability or not >> i mean, we've had two events. we had the pension in uk we had the silicon valley, you know, if there's something else

that's coming, i don't know what it is at this point, you know, if there's another shot coming, i don't know i just don't know what it's going to be if there is one coming at all. >> if the fed were to go too far, could they bring on something that isn't necessarily doesn't have to happen at this point, if they want another point, do you think that they could break something, pick something else >> i don't know if they could break something, but you know, there's risk if i were the fed, i'd be very sensitive in terms of examining what's happening in the banks. i would just be careful, and i think probably the fed at this time, they don't want to make two mistakes in a row. >> do you get a feeling looking at the ten-year, steve, that eventually cuts do factor in and i mean, you don't sound like you love the s&p that much don't be a hero. do you think the ten-year is a good bet here? >> you know, i think what the

ten-year is telling you that the market thinks that the fed's going to cut rates i actually think that's wrong. you know, powell has said you're going to have rates higher for longer you know, at this point i take him at his word. i think he's petrified of what happened to volcker when volcker started raising rates, inflation would surge. i'm just taking powell at his word the market doesn't seem to be. >> as a senior portfolio manager, what do you tell all those poor junior portfolio managers at neuberger that they should be doing right now? >> there aren't a lot of junior portfolio managers, so we're quite experienced at this point. >> good answer what an answer, steve. >> if they look at to you and go what's eisman doing, what are you doing? what should you be doing right now? are you below your normal asset allocation for stocks? >> i mean, generally speaking, i

mean, part of the problem is that we have clients who have positions for many, many years they have embedded huge capital gains, but on the margin we've tried to raise some cash we put some clients into three month treasuries we're thinking about eventually buying some corporate bonds. we're quite cautious we're quite diversified at this point. >> all right everybody's taking notes over there, all those guys running around it's like the old e.f. hutton commercials. when you talk, i think all those junior analysts listen thank you for your time, steve. >> we've got a lot mor co more g up on squawk international energy warning of a record demand for oil. we're going to find out how high prices might be headed after the break. up next, america's chip challenge, what can companies and the government do to siphon

off the supply of chips to countries like russia and iran who use them in their arsenals details straight ahead "squawk box" coming right back ♪ ♪ the vehicles are all-electric. the feeling is all mercedes. the choice is all yours. see your dealer for exceptional offers today.

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welcome back, u.s. export controls and better tracing efforts have not been able to keep american-made chips out of the hands of russian military forces or from iranian made drones both operating in

ukraine. kristina partsinevelos joins us this morning at the table. what's going on? >> well, we've had two key reports that just came out within the last year demonstrating how a multibillion dollars decades long modernization program in iran as well as russia are heavily dependent on u.s.-manufactured chips. the research suggests domestic capabilities are limited as well nonprofit group conflict armament research sent staff to trace the components found inside iranian made drones used by the russian military. >> for russian systems, i think we have a little bit more than 50% in general components that they're the brands of u.s.-based entities, and for iranian systems it is more than 80%. >> so he was part of one report. there's a separate report from the royal united services institute that examined 27 different weapons systems and equipment used by the russian military in ukraine, and found

70% of the components were made by u.s. firms including analog devices, texas instruments, intel, microchip as well as two smaller firms that were acquired by amd, and then you have many parts that are classified as dual use they can be sold legally overseas for commercial or consumer use as long as the firm gets a special license from the commerce department. many of the components were manufactured in recent years demonstrating how iran and russia may have circumvented, experts suggest allies need to play a bigger role. >> the rubber has to meet the road allies need to revamp their system to ensure the technologies aren't being exported and the united states needs to lead. >> all seven of the u.s. chip makers we contacted for comment say they condemn the unauthorized version of their products and have halted product sales to russia and iran in accordance with sanctions. >> okay. so the question underneath the story, i think, you tell me, is

whether these companies say one thing about the sanctions meaning, they say we don't sell to these guys, but that they know the wink wink on the other side that this is actually happening. not if they're happy about it, but they're happy to make the sales. >> it's a source of revenue for them if they can go tlhrough a third-party subsidiary i'm not the companies. there is one company that has come up to light in the last recent years with china, an american company, so this has happened the onus, the question also would be who's responsible is it the manufacturers then is it the department of commerce and their sanctions as well as expert controls, or is it third-party countries that should be doing a better job in notifying the united states that they're going to be selling their chips to iran, china, russia >> the other question is is how this stuff is ending up in military equipment despite the

restrictions like what is actually happening in practice? >> the man you saw on the screen, he has been to ukraine seven times, and he has told us through two interviews that he's seen literally scratched off labels on some of the military products so that you can't see the manufacturer's name. so what we're seeing is that either they are going through s subsidiary, either they're going through third-party countries, being sold on the black market or they're being sold legally for commercial use and taken apart. >> what do we think lawmakers are doing about this >> we've spoken to so many, senator tom cotton from arkansas, he said that they need to be better export controls jim hines representative from connecticut, everybody's saying more has to be done. >> but nobody's actually doing anything. >> all of these bans on these things sold to china, we should feel just as strongly about? >> yes, we should. i focused on russia and iran because of the data that was provided because they've actually found intel, amd,

analog devices as well as texas instruments were probably the most prevalent in a lot of these products, but china's a whole other ball game. >> the question is how -- if you should and can you hold the companies accountable, even if it's not -- look, if a kid is in your house and drinking in your house and goes off and does something terrible, the parents are held liable, even if they don't know what the kid is doing. >> but this isn't happening in their house. >> well, well, is it happening in their house this is the question can you extrapolate out? i don't know. >> i understand your point of view if it's being manufactured in the certain intel house, you know, are they responsible if it ends up in a drone, a russian drone, but it seems like the manufacturers are playing ball they are providing some information, but according to that one guest, it's not enough. sometimes they stone wall because they don't want to provide details on their supply chain. >> kristina, thank you appreciate it. a fascinating report. coming up, a check on oil pack, where the futures are

right now, slightly in the green. as we head to break, check out the shares of mcdonald's, just minutes ago bpig raised its price target to $305 from $280 we'll be right back. ♪ it's our turn now we'll make it up again. ♪ target to $305 from $280 we'll be right back. tig raised s price target to $305 from $280 we'll be right back. ♪ the old way of working is deader than me. ♪ ♪ we'll scale up, and we'll scale down ♪ ♪ before you're six feet underground. ♪ ♪ yes, this is how, this is how we work now. ♪

general motors is ditching apple car play on many of its new electric vehicles in favor of its own multimedia display software gm says that its software offers more built-in functionality than what drivers can now get through smartphone connections gm software will be able to collect data on the vehicle's electric charge and tire pressure and make suggestions such as the best locations to stop and recharge the car and the software could also identify roots to use gm's hands free super cruise drive system, which is activated on designated roadways gm said those functions can't be offered through apple car play or android auto. the best second weekend ever for an animated movie in north american theaters, with $87 million in ticket sales make it the biggest box office smash of '23

the movie's facing a little major competition this weekend and it still has two weekends before guardians of the galaxy 3 hits theaters. still to come this morning, oil prices on a tear with wti up more than 20% just in the last month. we'll have the latest on what's behind that move next. 8215 is the last tick for wti. moh mohamed el-erian will join us with what he's seeing in the markets for the trading week ahead as earnings season kicks into full gear stay tuned, you're watching "squawk box," and this is cnbc

the futures right now in the green across the board dow up about 26 points nasdaq up about 5 points the s&p 500 up call it 4 points. check out shares of dell, down in the premarket this after jpmorgan cutting the stock to neutral from overweight that stock now off about 1.5%. oil prices logging four straight weeks of gains, and on friday, the international energy agency warned that global demand will hit a record high this year as china consumption regains momentum the west oil watchdog saying that opec's surprise outcut at

the beginning of the month could inflame prices take a look here, you're going to see wti is off by about $0.34. 82.81. if you've been watching, it's been up for four weeks in a row. ice brent is off by $0.34 to 85.97. natural gas has been the really kind of surprise out of all of this it's up by about 2.9% today. you're still talking about $2.17. that has been a real story to watch. joining us right now to talk about where oil prices may be headed and the iea's warning is ann marie ta sent, the head of research at internet aspects even at 8215, that has to be the market pricing in some sort of demand destruction later this year because otherwise between that and opec's surprise cut, you'd probably be looking at prices even higher >> oh, absolutely, i think you

hit the nail on the head over here, right? with the opec cuts, we are looking at an incredibly tight market, especially in the second half of the year, but that depends on the global economy doing okay, and by that i mean it's a mild recession, which we are already accounting for china growing, but there's so much uncertainty, especially what we've seen with the banking crisis, that is just keeping people from going long right now because you just don't know how big potentially the recession could be, and in some ways, people are also worried that if oil prices go up too quickly too soon, would then force the fed to raise interest rates again and cause a hard landing oil is obviously not the only driver of inflation. that's a separate story. that's what's playing on people's minds right now. >> so the iea, the international energy agency warning that global demand is going to hit a record high this year. do they know more than we do

what do you make of that forecast >> i mean, we've had that number, right? i mean, since what happened was obviously 2020 because of covid we came off in demand, and since then the recovery has been -- we pretty much were back above 2019 levels in most products last year, and this year with china's reopening, we will be hitting a record high. this goes to the crux of the problem we face in more of the medium term story for oil. oil demand has been hitting record highs pretty much every single year barring covid, and we just aren't investing enough in supplies, and this uncertainty right now in the market is actually even worse for the supply side because which ceo is fwalactually going take on the mantle of investing. we are going to put more money especially when you just don't know what the economic outlook is going to look like. >> that's a really good point. we kind of thought there were a lot of good reasons for people to invest, but you're right, uncertainty, not knowing what's going to happen to the global

demand picture probably has those ceos being a little more cautious rather than not, which even if they were to start investing right now, how many years would it take before you could kind of catch up to demand >> south aramco one of the best companies out there, even they take anywhere between six and seven years from real inception to bringing the projects online. most of their big projects are coming online 2026, 2027 this is something been talking about openly it's not a light switch. it takes a long time for investment to come through, and shale, which is quick cycle, that's completely changed now with the focus on shareholder returns. and also rising costs. again, shale worked in a zero interest rate environment very differently from a 5% interest rate environment if you take shale out of the picture, of course shale's going to grow, but not like millions of barrels per day you're talking about years over here, so even if you did take the decision today, you won't get the oil over the next few years for sure.

>> with all these uncertainties, what's your longer term outlook for oil, let's just say over the next year? >> i'd say the next -- this quarter i have very little conviction i really think prices will be range bound. you're going to see a lot of volatility potentially more downside given the macro environment. second half of the year, if we have a bit more stability in the macro, then expecting well above $100 because the opec cuts will tighten the market severely. and the same into 2024 of course, again, the big caveat is the economy, but for now, yes, it's going to be a recession, a mild recession, as long as the bottom doesn't fall out, we're pretty confident of the second half outlook. it's just this quarter i think is going to be choppy with all these kind of noise and macro flows that you're seeing >> as long as the bottom doesn't fall out of, what, the economy >> yes, basically. it's a big if, right i do think policymakers are -- they have been very proactive

and especially after what happened in '08, '09 we aren't expecting a hard landing. definitely expecting a mild recession, and much more on the industrial side than on the consumer side. you're seeing that difference between gasoline and diesel. diesel demand is very weak gasoline is still doing very well you are getting a two-tiered economy to an extent will z. >> let's say the biden administration agrees with you, they're looking for a mild recession. would you recommend they refill the spr with oil, wti at $82 a barrel they said they were going to do it at 70 they didn't. we may have missed that window, but do you think this is the best opportunity to refill it? >> so they have canceled future sales from 2024 to 2027. that gives them 135 million barrels that would have otherwise come out so they really need to refill about 40 million barrels or so to fill up the 180 that they released last year

they have maintenance coming up in the summer, so i just don't think they can refillit right now. however, would i lock in futures market effectively for supplies down the line given how i would say low deferred prices are, absolutely yes because you could buy a december '23 or a december '24 contract, very, very attractive i do think prices will be higher by the time we are in december, but that relies on them knowing how to execute futures contracts and that becomes very difficult. long story short, yes, i do think they should lock in some supply for the future. >> when you look at china and the command demand there, expectations is it's reopening things are going to take off probably pretty significantly relative to what china's demand has been at this point how impacted do you think they

would be by a global downturn, and how do you kind of forecast that what numbers do you watch? who do you think is maybe getting this right >> so i think the key with china and, you know, i was in asia for two weeks and meeting a lot of our chinese clients. it's been fascinating, what you're seeing is very consumer led and the property market is picking up as well, which is a very strong sign what's lagging is manufacturing, right? that's what's ex-pposed through the global economy you have the government stepping in what's interesting is exports to the region has picked up but it's exports to europe and the u.s. that are lagging. i think there is an interesting dynamic going on over there because china's reopening in itself is actually very bullish for the region because it's so interdependent trade is interdependent. i think what we are seeing in china is a very phase recovery mobility's picked up jet is picking up right now. international flights are picking up properties are going to be next,

which is the petrochemicals. the final thing that's coming is manufacturing. it doesn't take away from china's recovery, but it's not going to be all at once either >> amritai sen, thank you. thank you. >> tax refunds this year are the lowest in a decade the average down 10% from last year robert frank takes a look at how that could put pressure on the consumer. and then the looming debt ceiling and what it means for the markets. we're going to be speaking to the head of policy research for strategas dan clifton, sidewalk box will be right back

flef alphabet see weighing in on the future of ai here's what he said last night on "60 minutes" when asked about the impact on google's business and other companies. >> this is going to impact every product across every company, and so that's why i think it's a very, very profound technology, and so we are just in early days. >> every product in every company? >> that's right. ai will impact everything. >> when asked about how ai works and the impact on society,

pichai said that now that it's being talked about and worrying about implications, it's a sign that we're getting prepared for what's coming. tomorrow is tax day, and refunds this season are expected to be the lowest in a decade robert frank joins us right now with more on how this impacts the consumer, and robert, i think i'm not surprised that tax refunds are expected to be lower this year, but maybe surprised it's the lowest in a decade. >> yeah, becky, and it's surprising when you look at the total dollar value that's going to equate for the economy. tax refunds running about 10% below last year's. the average refund this year is about $2,900 that's down from 3,200 last year, but in total, the irs has handed out $20 billion less in refunds. that is the lowest level in ten years according to sta rategas. that drop could add further

downward pressure on the economy. jeffries analyst corey tarlow writing, we believe lower refunds could be a drag on consumer spending. walmart recently citing lower refund checks as a possible pressure in its recent investor day. the main reason for this drop is the end of those special pandemic tax credits, especially the child tax credit dropping from as high as 3,600 in 2021 to just 2,000 in 2022 the earned income tax credit and the child and dependent care credit also falling. now, for many working families, tax refunds are the biggest one-time windfall of the year, surveys show most families use that money to pay down debt, make home improvements and pay everyday expenses. so guys, it will be interesting to see on some of these first quarter earnings calls like home depot, target, whether this tax refund issue is going to show up in earnings at all. >> yeah, i guess tax refunds for

the early filers, they would have been getting those receipts already. if you're looking year-over-year, it's probably already shown up in those business lines, they would know. >> that's right. and also, you know, most of the refund folks, they file in january, february, it's the later folks that owe a lot of money, but also the irs is quicker this year so they processed returns a lot faster because they've got more staff and also people filed electronically and they filed early. >> what's it going to mean for the government kcoffers overall. fewer refunds coming back, does that mean the government has more that's going in to the treasury >> we're going to find out this week will be really important in terms of that debt ceiling debate because the question is how much money do they take in and will that push the debt ceiling more toward a june, july time frame or more toward an august time frame. that's going to be important to look at those receipts from this week and figure out what that

means for the debt ceiling >> oh, good, more time they cannot talk to each other. robert, thank you. >> exactly thank you. coming up, house speaker kevin mccarthy expected to focus on the approaching debt limit. we're going to talk about your money and what congress can do to avoid a crisis. we'll do that next. at the top of the hour, mohamed el-erian is going to be joining us we'll talk fed, earnings, and data coming up this ekwe and so much more. "squawk" coming right back i know some consultants with great ideas. can they help us improve our digital experience? absolutely. they've invested over $2 billion in tech. that could really help us manage inventory. and save us a ton of dough. then let's take back our market share. checkmate, chess heads. girls, i said “bedtime”!

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i think the right thing to do is to do what we're doing, which is propose a debt ceiling increase we're not for the government defaulting on their debt, propose some ideas we have that we think will make the country better, fight inflation, open up the supply side in the economy, cut spending, lower the trajectory on spending. >> that was congressman french hill just here earlier on the set talking about what he says needs to be done to reach a deal on the debt ceiling. house speaker kevin mccarthy heading to wall street this morning. he's going to deliver a speech at the new york stock exchange as he tries to break an impasse with the biden administration. ronald reagan spoke on the floor of the new york stock exchange 9:53 in the morning 1985 about the debt ceiling. >> some interesting things >> we're going to talk about what's at stake. daniel clifton head of police research at strategas, a baird

company. good morning to you, sir what are you expecting mr. mccarthy to say? >> well, i think it goes back to your introduction. in 1985 government spending was elevated above its historical average, and president reagan was like we need budget reforms that are going to be attached to the debt ceiling 2011, very similar to today, spe speaker boehner said we're going to need spending reforms government spending is about 24% of gdp, 4% higher than its normal average and kevin mccarthy is going to say we need budget reforms that are going to accompany the debt ceiling increase it's one thing to talk about this, andrew it's another to be able to act on it. why would the president have any incentive to negotiate with the republicans if they can't pass a bill out of the house of representatives. it was only until after speaker boehner was able to get a bill out of the house of representatives in 2011 that you really saw real negotiations happen on the debt ceiling i think that's what kevin mccarthy is trying to do today he's trying to send a message to

his caucus that they need to pass a bill that needs 218 votes out of the house of representatives. he's going to try and do it in the next two weeks he's going to outline what he wants to see in that bill, and then say then we should have true negotiations with the senate and the white house overall. so that's where i think he's coming from in addition to announcing what that plan is. >> how much of this is a bank shot of sorts, which is really, i think, maybe an effort to influence the investment community, the folks who are watching us this morning, to get a little anxious and nervous or at least to agree with him, if that's the case, and then get on the phone? >> absolutely, i think you're absolutely right a secondary audience is investors. investors have been complacent if you're an vinvestor waking up this morning, you want to know what earnings are going to do. you want to know what china's economic growth is doing this is in the background and it's coming. the speaker is warning it's coming the speaker's got to get an agreement amongst his very razor thin majority in the house

then you've got to negotiate and get 60 votes in the senate and you've got to get the white house to sign off on that. even utmost cleanest debt ceiling scenario this is going to go right up to the x date, even if it's best case scenario for investors. what the speaker's trying to do is ring that alarm and say you need to be focused on this this is going to be a protracted debate that's going to take four months >> that is the way i look at this look, kevin mccarthy has such a thin margin and he has such high demands, i don't know how he gets anything past his caucus, that there's any way that the biden administration is going to sign off on. how do they come to some sort of agreement between the two of them >> awesome question. >> yeah. >> i think you're right there. the defense hawks don't want to cut spending right away. the conservatives want defense and non-defense cuts the moderates don't want as many cuts at all. you've got to get a bill with

218 votes. pass that to the senate. the default risk from the house from republicans getting transferred to the senate. let's be serious, this is going to be some watered down plan, that's going to come back. it's going to be bipartisan to get out of the senate, and that means that what passes the house in the next couple of week >> if you go back into 2011, that's exactly what happened in 2011 when they passed a more conservative bill, went to the senate, passed a different bill and ultimately the debt ceiling got lifted >> does it have to be bipartisan to pass the house is my question i mean, and if that's the case, if you're not going to get something that's bipartisan, should mccarthy and the republicans just put forth what they're going to put forth and get the process started? >> i think that's what he's doing. he's going to pass a bill that's more conservative, get 218

votes, pass it to the senate, let the senate do its magic. but if mccarthy can't get that first step done with the confident bill, they all the leverage goes to the senate and you're going end to up with a more cleanish debt ceiling, you're going to put the speaker in a very uncomfortable position as you have to raise the debt ceiling out the support of his caucus could raise the threat that his speakership goes away based on the new rules but it's a very, very complicated process most people in washington today do not believe mccarthy is going to get a bill out of the house of representatives we give him a higher probability. it's either all of us are going to vote for a bill or republicans or we're not going to get any spending cuts in 35 years. you can't let perfect be the enemy of the good here >> dan, we can talk about the

taxes, the strategy. i just want to know personally what you really think underneath all of this in the end because we've now seen this movie play out and the clock strikes almost midnight, two minutes to go and then the deal gets done. that's what we have come to expect in terms of how the movie plays itself out i guess the question is underneath all of this, is this the boy who cried wolf or is this a real problem? >> so i think that it's not about the debt ceiling the debt ceiling is going to get raised we have enough cash flow to pay our interest costs we have a bigger ush issue of prioritization of payments the u.s. economy will be slowing considerably as we go into that july debate and you're attaching

yo austerity. that's what you saw happen in 2011 it wasn't about the debt ceiling itself, it was about the austerity attached to it you get a cleanish debt ceiling, it's the boy to cried wolf and you move on. there will likely be some austerity attached to this final bill it's about how much and how much economics are brought into it. >> thanks. we'll see. and revenue coming in roughly in line the interest income grew by 50% during the quarter compared to last year. assets under management as of the end of the quarter down 6% and their balance sheet

initiative enabled them to return dividends to shareholders the market not liking this news, off about 8% >> in a defamation trial against fox news, the trial is now scheduled to begin tomorrow instead of this morning. multiple reports say fox is looking for a potential deal to settle out of court. dominion voting systems is demanding $1.6 billion fox calls this a political crusade in search of a financial windfall and says the first amendment rights of a free press are at stake this trial was scheduled to start just an hour from now. it's been postponed until tomorrow morning when we come back, mohamed

el-erian joins us. plus actor ryan reynolds investing in a platform nuve "squawk box" will be right back.

good morning get ready for earnings corporate reports really ramping up this week we got banks and key tech companies and tesla. and more insight on whether the u.s. is headed for recession. that's a topic we will debate in depth this hour. and actor and entrepreneur ryan reynolds will bring his wit and wallet to the financial sector we have a special interview with him on his latest investment as the final hour of "squawk box" begins right now good morning welcome to "squawk box" here on

cnbc live from the nasdaq market site in times square, i'm joe kernen along with becky quick and andrew ross sorkin and up over 50 points on the dow. take a quick look at treasuries, the 10-year and 2-year, which we are tracking on not just a daily basis, an hour live basis. 3.53 now all the way back to 4 had.14 one two year >> we are awaiting a possible launch on spacex's "starship" and would represent a giant leap forward in elon musk's space company. they are targeting a 9:20 a.m. launch today's launch is the first pairing of the huge super heavy booster. nobody was going to be on board

today so this is an empty ship, but that ship can lift hundreds of tons and could accommodate as a hundred people on a trip to mars that's the goal. >> let's go over to dom. what's cooking >> it's a merger monday. the big one is in biotech. prometheus up about 70%. this is an immunology company being bought by merck for nearly $11 billion. merck is looking to boost its future product pipeline. a huge deal there. merck shares are down just fractionally as the acquirer all eyes are on regional bank. m& t bank up about 4 1/2%. relatively thinly traded so far.

regional banks reported revenues that beat analyst estimates. 159.1 billion ahead of last year they said the 3% decline in deposits include seasonal factors and didn't imply any deposit flight out of the ordinary and state street is down about 10%, the big custody bank is th spider bank of etf that's a 9% decline there. we'll end on alphabet getting hit on 4% on nearly 700,000 shares of volume after this weekend's big "60 minutes" interview. they are seeing an up side this morning with its artificial intelligence and the move there. the net-net down 4.5%.

back to you. >> let's go back to the regional banks. there's going to be so much more interest around the regional banks this season. big winners, big losers. you're going to be watching all of these banks very closely through the rest of the week, right? >> absolutely. the focus on the regional banks is about the fallout from silicon valley and signature events and what it says about the dynamics around customers and where they put deposits. we've been talking about pnc and m & t banks. those are residuals nowhere like the problems we've seen for the western lenders but we want to put those in particular out there because there's a lot of focus about whether or not the deposit flight is being abated right now. and for the most part it doesn't look like there's any extraordinary deposit flight happening. we'll get charles schwab results later on this morning. that's going to be another indicator but tomorrow is the

big one. tomorrow we get western alliance bank out there and we'll see whether or not some of those particular battled are taking big are hits. >> not that charles schwab is just a bank. if does have a bank on top of the trading operations there have been so many questions asked about cash sorting. that's where people have been moving i'm trying to give you time while we talk here jump in. >> it's 93 cents a share adjusted versus expectations of 09 c 90 cents the stock is indicated higher. up 23 cents there. not much there new assets, 150.7 balance revenue, 5.2, slightly below 5.3 is what the street was looking for. new brokerage accounts, 1.04 million for charles schwab,

total client assets, 7.58 trillion, net new assets 150.7 billion. 3 cents ahead of expectations. i don't know how they normally do in any given quarter but that seems like a lot >> some of the stuff was cash deposits had gone down in that bank they had 376 billion at the end of the fourth quarter that was down 17% year over year, 7% quarter over quarter but it sounds likes they have new net assets coming in the other issue that's not going to be immediately evident, you probably have to look at the 10q or wait to hear from the conference call from them, just unrealized losses. in their case it was 14 billion last we heard in unrealized losses, mostly in mortgage-backed securities that's something people will be watching closely that stock is up 1% right now. >> for what it's worth, schwab

reports strong first quarter results. that's the headline from the company. >> let's talk more about the markets earnings and the fed after last week's inflation data joining us is mohamed el-erian first of all, great to see you >> thanks for having me. >> joe and i were talking with andrew earlier this morning just about how it's surprising to see yields that are higher given the weaker-than-expected inflation data that was out there. that would make you think the fed is getting near the end of the rate hikes and maybe as a result yields would come back down a little. so what happened >> two things. one is co-inflation was not weaker than expected at 5.6% and that's one to look at. and second, flying under the radar screen survey measures of inflation. you had the new york fed last week showing inflation expectations for this year have gone up a full half percentage points you had "the wall street

journal" this morning surveying economists, up 4 percentage points so what you're getting is recognition that inflation is going to be sticky at around 4 to 5%. that's what's being reflected in the two year that has traded back up to 4.14 and higher expectations of 25 basis points hike at the beginning of may >> you think that it's going to be stickier, too >> oh, absolutely. i've been saying this for a while, that if you look at how inflation has migrated from a few goods, food and energy, out to the whole good complex and now to the service complex and we're starting to see it in wages, people should follow the fed wage tracker that's up around 6%. if you look at inflation dynamics, it's now embedded in the service sector and starts term limit pact wages and that's what happens when the fed is late inflation goes from things that are interest rate sensitive to things it that are less interest

rate sensitive >> and if they hike rates further, it's not going to have that much impact in. >> you need to go higher and for longer and then you incur two risks, one to the real economy and the other to the financial system >> where do you think we stand with the risk to the financial system are we're through the worst of it is there more to come in. >> i never liked the word crisis we're seeing they're not as bad as expected. however, if we go higher for longer, you have a lot of levered models that no longer mac sense. we we've seen what happens to commercial real estate there's a lot of business models that will not make sense in this world of higher rates for longer one thing we're going to discuss more and more the next few months is not are we in a session or not in a recession, it is the technical calls of the market, how do you deliver these

overlevered sectors? they won't make sense of these high are rates >> is it too late if you haven't already moved on any of those port portfolios, issues is it too late >> it's getting hard to just sell them. a lot of people are hoping that somehow they can get through the peak in wage if you like a lot depend on whether you have to refinance or not. if you don't have to refinance, you're fine. if you have to refinance, that's the moment of truth. >> this is where you get the call where the fed says they have to stop raising rates because of these factors or the government will step in say don't worry, we'll refinance for you or the banks will refinance for you at the rates that will make this work does that make sense to new. >> we did that with the banking system a few weeks ago >> are we going to extend that to other types of loans?

>> i hope not. i hope not but you never know with this fed. by the way, this is a massive opportunity. people aren't focusing on what an arbitrage opportunity offering banks, that they can take something worth 80 cents, get par back for it and then simply invest at higher rates. i mean, it's a massive -- >> were you in favor of the window being open to the banks for all of these things? >> look, when it comes to a situation where they were, i understand why they did what they did weep we should never be here. this is the tragedy. we should never be here. we're here because of policy stakes one is a very mishandled rate cycle, two is bad supervision. it's policy mistakes. >> but it's also idiots making these calls. the officers at the banks or at the other institutions who decided it was okay to hold this stuff and that it would all be taken care of.

>> absolutely. risk management went to pieces but having said that, you made things a lot worse by not supervising these institutions properly >> i don't disagree but two bad choices, right one is this moral hazard choice, the other is effectively the opposite of that, in the moment do you save everybody? if you had saved everybody -- did you see this the "new york times" report that actually went through what would have happened if svb went down and talked to all these banks that would have vanished and if all those people had lost their jobs. then you start to think about cost to the taxpayer, it becomes real in a different way. we don't really talk about it like that. the question was which was the worst outcome? >> at that moment i would have ended up doing the same thing. but the question the way you frame it is every time we get t

that moment. weep should stop getting to that moment >> i don't disagree. you want to prevent the moment from happening to begin with >> i worked at the imf for 15 years. in the back of your head you get to we're not here to create more crisis, we're here to solve it so you end up throwing money at it and you set up a bigger crisis down the road and that's what we've been doing repeatedly >> mohamed, thank you. always good to see you >> and coming up actor ryan reynolds and take a quick check on crypto as we head to a break. bitcoin sitting at 129,563

welcome back to "squawk box. it's amazing for everyone's kids you were saying "squawk box" -- we were talking about the

galapagos. >> it could have been "squawk box. >> nasdaq s&p indicated up about 5. >> we're thrilled to have actor/investor ryan reynolds here it follows news that about a month abe t-mobile was buying your mint mobile for more than $1.3 billion congratulations to you >> thank you, thank you. nice to be here. >> good morning both of you. >> good morning. >> let's get into it how did this happen? >> well, it's been two years or so in the making a lot of background checks, a lot of late night chats. >> are you a fintech guy, though >> no. my job would be more defined not necessary in financial investment but emotional investment if you look at a gin company, a

wireless company and welsh football club they don't go together but they all had strong brand foundations. >> are you going to him? are you looking for these things how does this happen >> it's a bit of both. it's a bit of both i am very lucky to have an incredible team of people that are looking for exciting and interesting opportunities, places that already have a strong brand foundation that have so much room to grow in terms of story telling i don't know who introduced us but it was about two years ago and phil and i just hit it off >> explain the business. >> behind every great brand online there's a payment company behind it that powers the transaction between the customer and company. that has evolved as customers are looking to go global, offering multi-markets and that for a single integration allows our customers to connect with their customers all around the

world. we're fast growth, highly profitable and a lot of free cash flow. >> the competitor being luke a stripe >> there's four or five players that have our capability >> i want to show the ad you guys just produced when you think about which company you're going to invest in, partner with, what not, how much of it is about the story that you think they have and just sort of like where they are in the process i assume there are mature companies that come to you and immature companies >> usually they're not that mature america gets a lot of credit for innovation and there's something funny and interesting about a story about canada flexing a little bit this is already a multi-million dollar global company with an amazing story to tell.

and i look at these guys running it and that's a huge part of it for me while a lot of people are running away from fintech, this is one company we're running towards. >> let's show some of that canadian flex right now. >> yeah. >> every great tech company has a big overblown video about its purpose in the world as an investor in nuvei, a global technology company based right here in canada, i decided we needed one, too, just more canadian head it! it's about food technology, the future, it's about moose and i guess it's about hockey. i also think it's about simplifying payments but to be honest, i've kind of lost the thread here nuvei, tomorrow's technology company today. >> actually, ryan, we're actually a payments company. >> that's very canadian of you >> did you get becky laughing?

the question i have about this is most of the businesses you've invested in and partnered with are consumer facing businesses this is more of a b to b business >> b to b is still awareness and all have a story to tell for me it's all about that creative the financial investment side of it i am no wizard at it's the emotional investment side >> i don't think of you as a spokesperson who just throws your name on anybody who will pay you. >> absolutely not. >> what research did you do before you got into this >> to me it's a company that already has a massive footprint. its achilles heel is almost it's inability to talk about itself and tell its story

i get to step in and show this large and impressive company >> and advertising, someone who help me with the marketing of it what's the -- >> i think backwards for us. we had a blank canvas. everywhere we looked at it, it was boring the more relearned about ryan's work, about taking these incredibl incredi incr incredibly mundane topics, we came up with something that was really funny and that drove to our culture and our values of the business >> you're killing it now, killing it as an entrepreneur investors. how do you compare this to the hollywood side of your life, which i assume is still like the base of all this that helps p propel the rest of it? >> it's my first love and

passion but i do see an invisible string between them all. it's all story telling i love story telling early on in my career as i started to grow into having some author ship into my work is where i started to see there's story telling everywhere if you talked to me early in my career i would have loathed publicity, marketing one day i suddenly got to see that's a huge creative outlet and how it's my company has grown so much in so many other industries for us it's mischief and story telling and so much fun. i'm really lucky i get to do this >> and is your long-term goal to actually sell a piece of your own business at a multiple >> i don't think that's something we talked about. i constantly have this conversation with my two partners and i always say are we biting off more than we can chew here and the answer has always quite

literally been yes but it's also so much fun. we have so much fun in what we do and at the end of the day, that's what it's all about whether we're producing a birthday video for my partner or -- >> a pie chart of your life -- i nope you've got four kids -- what does it look like >> i've gotten a lot better at calendaring my life. i make sure i'm present with my kids when i'm walking them to school and bringing them home from school, that sort of stuff. otherwise, i'm neff thinking about fatherhood >> movies, tv shows, the production side of your life versus investing -- >> you'd be surprised. i talk to a lot of cmos and ceos and they say how can our company super charge itself? we have these eight-month, nine-month plans i think you're overthinking it you can hack a culture threw

speed and timing for us at maximum effort, it's not just me. i have an ultra elite team of special ops guys that do this along with me but we real refrain from overthinking things we shoot from the hip in a different way but that's how fast culture moves culture is moving incredibly fast if you jump in, you can really make the brand that you're representing the culture norm as well >> we haven't talked about how last year you won the cnbc stock draft and did it with a couple of picks i think it was netflix and ford. was that you or a team putting it together in. >> that was me and george dewey talking about it before. we're kind of going with our -- i know it sounds -- we're going with our hearts there, too netflix invented the brand, invented that industry i would never in a million years bet against them and ford is as innovative an american company as it gets >> because you have to defend your title in a couple weeks >> that i'm terrified of

i'm going to go 0 for 4 for sure >> ryan, thank you for joining us this has been great. >> coming up a recession or no recession after a bunch of new inflation data what do we know about where the economy is headed? we have a debate coming up on we have a debate coming up on "squawk box."

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welcome back to "squawk box" right here on cnbc we are just seconds away from some new manufacturing data out of new york state. ahead of that you're going to see the futures are higher this morning. dow futures up by about 23 points, s&p futures up by about 2, nasdaq up by 6 1/2. rick santelli is standing by at the cme in chicago rick, take it away >> we're looking for an april read this is a fairly contemporary data point for empire manufacturing in and around gotham, of course. 10.8, a significantly better number than the minus 18 to 20 that we were expecting 10.8 is the best number going all the way back to july of last year january of this year was the worst since may of 2020. so a really market improvement we see interest rates popping a bit from 353 to 355 in the 10s, we see a couple of basis rate

pops in 2 years and a little reversal in preopening equities. keep an eye on the dollar index, b becky and joe. on thursday it closed at a one had much year low. we have seen economists and issues in the labor market are pushing up fed forecasts, taking away some of the more dovishness at the end of this year in the form of reversals and easing back that has helped the dollar a bit, tax day, how much money we're going to be taking in, how that will affect the debt ceiling. two-year and ten-year yields right now are at the intra day highs at the month of april and eu supplies should weigh on traits this week, keeping them a little bit on the lofty side joe, back to you >> great, rick thanks that's a lot of new recession commentary is floating around as well the latest fed minutes shows staff at the central bank expect a milder session this year

larry fink says he doesn't expect a big u.s. recession for his part former treasury secretary larry somers told foreign policy that he's 70% sure that the u.s. will see a recession in 2023. joining us to talk about what's ahead for the economy, julia coronado and tyler goodspeed he's with the cato institute and hoover institution julia, hard, soft, no recession, what's the most likely outcome in 2023 or do we need to talk 2024 >> well, i think what the incoming data still shows is that the economy is in pretty good shape it's been very resilient i think the margin we're all watching now is the degree of credit tightening and how much that i amplifies the rate hike

if we do get into a recession or are heading for one, it's probably more of an early 2024 phenomenon and that gives us time and gives the fed time to calibrate its policy accordingly and try to read the tea leaves a little bit >> would you view the relatively strong labor market as a blessing or a curse for what the fed's trying to do >> i think it's both certainly it has been, you know, providing some incipient inflation pressures. it wasn't the major cause of inflation so i don't think that we're not in a phillips curve world. we haven't been, we still are not. and what we are seeing is that companies are reporting what we call labor hoarding. they're more strategic and more inclined not to just quickly turn to layoffs but to hold on to some of their key employees

as revenues soft i en that could provide the u.s. economy better resiliency. i think ultimately a good, strong labor market can only be seen as a blessing primarily and something that the fed should try to balance as it fights inflation. >> so i asked two or three questions i think. do you agree with everything she said do you have some nuance or totally disagree what do you think? >> i broadly agree with what julia just said. i would add that former fed chairman ben bernanke once equipped that economic recoveries don't die of old age, they're murdered overall as soon as 1945 the murder rate in any given year for economic recoveries is about 16%. there's about a 16% probabilit that an economic recovery comes a end in any given calendar year during the great inflation from 1966 to 1981, the homicide rate for economic recovery spiked to

about 33%. so more than double the annual -- the typical probability. and the reason for that was you had a very aggressively hiking federal reserve that was generating contracting economic conditions, contracting financial conditions and it was into that context that some real shocks hit there was a big gm strike? '69, the arab oil embargo in '73, the iran oil shock in '79 i think that's sort of a reminder that this anti-inflation environment can create a sort of tightening financial context on to which history happens. and that's why i think that we are looking a t an above average of a recession hitting and toward the latter half of 2023, early 2024 >> the seeds of inflation you

described in 1969, what was it back then? was it similar to what you saw this time around was it a fiscal? was it monetary mistakes what put us in the soup that time >> so it's really fascinating because i think in the past two years we've basically run a really compressed rerun of the period from about 1966 to 1982 so 1966 to '69 we had really expansionary monetary and fiscal policy, what they called the big era in '68 when the federal reserve cut interest rates because they got a little bit spooked as fiscal policy started to tighten a little bit. so inflation expectations came unanchored and av'69 they hike interest rates and you also in that context get a big gm strike then in the 70s we get the supply shocks and finally by 80,

palm volcker says, right, i don't care how high interest rates are going to go, i don't even care how fast they go there, we are going to tame this i think we're sort of seeing, as i said, a compressioed rerun of that period. >> joe, if i may, one of the keefe ingredients here is productivity you know, in the 70s we saw really low productivity. it's the key question for this year and next is how strong a productivity performance do we see. i'm relatively optimist uk there. we've had really, really strong development throughout this cycle, we've got declining supply chain frictions, reduced labor turnover all of those things are direct ingredients into productivity. and productivity can save us and at least make the trade-off more favorable. i think the point about shocks is really very important

we always sort of assume no shocks and shocks tip us over. but on the other side of the equation, what was lacking in the 70s, what we had in the 90s was productivity and i think that's a key thing to watch there are good signs on that front. we ended the year, we had a weak patch last year but we ended the year on a strong note. so, you know, i think there's grounds for thinking that companies are responding to all this sand in the gears by trying to do what they do better and more efficiently >> so look, right now i think one of the challenges for the federal reserve is that wage inflation and nominal wage inflation kind of sets a floor below which it's hard for price inflation to persistently go otherwise companies will have to accept negative margins for an indefinite period of time. the one saving grace there would be, as julia suggests, productivity growth because product growth would allow for

companies to let price inflation go a little bit lower because real wages would be justified there. >> so even though you saw some similarities, tyler, we're ending up, what, 5%, 6%? what are the differences between how you describe what happened back then and what's happening now? >> so the differences are that -- well, one that julia referred to is productivity growth another difference is that we just had a much longer period of inflation running well above 2%, above 3% it was actually lower in '68/'69 than it is today and has been over the last year but it stretched out such that expectations really came unanchored and then the magnitude in the supply shocks in the 70s, the '73, '75 oil

embargo, those shocks were of a magnitude greater than what we've soon over the past year. they were intersecting those unanchored inflation expectations and also you just had a more rigid labor market i think those are key differences that are going to suggest not as difficult a path back to inflation. >> that still all sounds pretty good though, doesn't it? in terms of our prospect from emerging from this in relatively good shape someday >> it's definitely a possibility. think about how many mood swings we've had this year so far we're in an extraordinarily uncertain time i'd add two key differences to the 70s. one is globalization we're in a far more global environment. that can be a double-edged sword. it can provide opportunities to keep inflation down or we can be, as the imf has been worried about lately, we could be heading into global fragmentation, which would be

sort of a headwind and a potential inflationary impulse but the other key things that we have in our favor is technology. we have waves of massive transformational technology, which again can be used to enhance productivity we didn't have those levers in the 60s and 70s. that was in its infancy. so we have a lot more at our fingertips to do things better and more cheaply to brings things down. tyler's point about inflation is important. that's why the fed's been very keen not to let this inflationary environment become deeply embedded and sort of culturally and in the business and wage-setting environment but, you know, there's a lot of things going right here, too profits are actually quite high and the labor market's been quite resilient and that core element of every expansion between jobs and sending remains in tact.

so i think we need to be a little bit careful getting stuck in that doom narrative we've been in for more than a year just waiting and watching for that recession to come any time. meanwhile businesses are getting up every morning and solving problems and doing what they do and consumers are going to work and spending some money. so, you know, so far the economy has provided some grounds for optimism >> very good, julia coronado i nope where you are hoover institution is somewhere around stamford? i recognized that tower. think i conde rice has an office there. >> meanwhile i'm at u.t. austin. sun is rising in austin, texas >> yes, it is. we saw a little shadow >> exactly >> new financial results out this morning dom chu has been monitoring all

of them. >> let's put financials in focus this morning all the attention being paid to the sector, especially with the regional banks we'll start things off with the bigger regional banks in the northeast here, buffalo based m&t. it posts quarterly deposits that did beat estimates those those shares up 3% now for regionals caught in the weighing of the collapse, charles schwab up north of 1%, just about a million and a half shares of volume, helped by growth in new account openings and asset inflows. and we'll cap things off with a look at another kind of bank, shares of state street down

about 10% now, 11% premarket this is the big custody bank that services asset managers and is the parent company of the spider family of exchange traded funds. it missed estimates on market decline and investment outflow so state street one of the biggest losers, down 11% >> dom, thank you for that >> florida governor ron desantis planning to unveil new crackdown measures against disney that aim to void the controversial move that stripped the governor's oversight board of its power over the company that's according to a "new york post" report say that says the governor will seek to revoke other aspect it's enjoyed.

>> when we come back, cramer's first take on the trading day and the week ahead take another look at alphabet. the stock is down by about 4.1% this morning analysts at morgan stanley say that they see 25% potential up side for the stock thanks to a.i. and a reminder as we head to a break, you can get the best of "squawk box" in our daily podcast. just follow squawk pod and you can stay tuned any time. look, it's great that you use workday to transform your business. 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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there it is. that's a live shot of spacex's starship it's in south texas. the company is targeting a 9:20 eastern time launch and today's launch is the first pairing of the massive super heavy booster with an upper stage. and early tests have resulted in four crashes and one successful upright landing. nobody will be on board today. the ship can lift hundreds of tons and could accommodate as many as 100 people on a trip to mars >> meantime we're going to get down to the new york stock exchange where ourgood friend jim cramer joins us now. a couple of stories we've been watching this morning, the banks to understand what you think of

charles schwab and what you think we're going to hear later in the week on tesla and big companies? >> schwab, they made the number but we all want to know. didn't seem like there's any deposit flight but i think you might still catch some downgrades i thought they were pretty good. jpmorgan was really great. a lot of people are worried about tesla's gross margins. if everybody is worried about it, i'm not so worried about it and in netflix everyone is worried about fatigue in streaming. i think netflix should be great graded by how much content you want and i think it's been exciting the way this shakes out, i'm very worried that people are going to start saying the banks friday, we got too excited, bank

of america just okay, goldman sachs just okay and this whole notion of it's going to be special situations like what happened with merck where they decided we can't have a loss ofd >> not a stock that you can trade, but i don't know if you had a chance to watch "60 minutes" last night. we've been showing clips from google about this big debate about a.i. and some of the comments elon musk and others have made. where do you land? >> i love that even the "60 minutes" -- the extra was good too i thought it was interesting that the guardrail they're trial to do is make it so you can't make yourself, and i think that's important because i think the prc is going to make dissidents' pictures and have them say things like they like the regime yes, i do think that when you saw the hemingway stuff, it was

daunting it's daunting to see them so much smarter than we are so quickly, andrew. and they are "they," right but without them talking about how a few -- some jobs, i think, might be lost, it was pretty positive >> we don't talk about it, but a.i.'s already in the markets. i mean, if you really think about so much of the volume of the trading that's going on, it already is this. it's just in a different form. >> oh, totally we saw it in "60 minutes" almost like it's a parlor game and how much fun it is, and then a question about how you can play soccer with it and stuff but i see most of the articles, they're all a.i., and most of them are stupid because they haven't figured out the nuance yet. but they're all just a.i., and it's a shame because they're so wrong so often, andrew >> jim, we're going to see you in just a couple of minutes. >> the jassy interview determined so much for me. >> have a great day.

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welcome back to "squawk box," the super mario brothers

scoring the second best box office ever, $87 million in ticket sales, the biggest box office smash of 2023 the movie facing little major competition this weekend despite a slew of new releases, and it still has two weekends before guardians of the galaxy 3 hits theaters a little more than half an hour to go until the first opening bell of the week on wall street joining us right now is julie beal, senior research analyst at cane anderson, also a cnbc contributor, and what are you thinking so far, julie, about what you have seen from the banks? >> it's been interesting, right? i think the banks, it's going to be a case of the haves and the have not, so your large money center banks that have taken in a ton of deposits, they're going to be just fine. i think the regionals were all very worried about what commercial real estate is under the covers, and it really varies by bank. i'm most concerned about ones that have built up their cre portfolio in the last three years when interest rates were

at zero. i worry about the credit quality. an independent bank is a bit of a concern. they've grown their loan book. they've doubled it there are others, you have to look at the mix of what is office, what is multifamily, which is probably a little safer. those are the things i'm worried about right now. >> m&t bank up this morning after reporting its earnings i know state street was down pretty significantly are there specific things that you think will show up in these earnings numbers that you will be paying the most attention to? is it the cre, the deposit flows, or do you think this takes a little longer than looking at earnings for quarters that already closed? >> i think it's going to take a little bit of -- a little bit more time, but i'm very, very much focused on how they talk about the credit quality that they have, what they've reserved against, and how that's going to impact the rest of their business that's where i'm really the most fixated. >> what else are you watching these days, julie? >> we're still looking at how the consumer is doing and the health and strength of it.

if you think about people talk a lot about the $2 trillion of savings that got built up in the pandemic, and the thing is, we've spent a trillion of that the problem is that the other trillion of that, a lot of that is concentrated in the hands of wealthy people, and they're not going to spend it, so i think we overstate the health and strength of the balance sheet. we see that the average consumer is spending in excess of what we're taking in, in income, and i think that's going to impact the consumer discretionary space as well. that's another concern that i have going into this quarter's earnings >> you know, you get the economic numbers, like today we got the empire state manufacturing, and that was wa better than had been expected, so you get these hot numbers, some cool numbers here and there. it's pretty tough to make an actual argument that the economy is one way in some monolithic, absolute terms >> yeah, i think what we're seeing is that what's interesting about the pandemic is it kind of decoupled a lot of industries from each other, and so right now, if you think about semiconductor chips, they're in

a recession. if you think about auto, they're probably going to be in a recession in the next year or so because they're finally getting the supply they need, so earnings should be okay. and i think that has implications for the fed and their ability to be able to gauge where the market is. if you're someone like me, you can make an argument for recession, fantastic economy, there's the data there, but it's very conflicting >> and as far as the fed goes, conflicting data probably means that they're not going to stop raising rates any time soon. >> yeah, i think that the challenge that they have is that they're looking at labor market data as -- and shelter as the driving force, and i think they're very concerned about the 1970s, but something to think about is that in the 1970s, you had a lot more unions, and so when you had hot inflation, that cpi hardened immediately into wages, and that's not the case right now. wages are much more flexible and so, most employers are going to be able to move a little more quickly than they had in the past i'm a little worried they may be

overcooking it in order to beat inflation, but there's the ability to flex down if we need to >> somebody this morning was talking about the atlanta fed's labor measurement system that did show some pretty hot numbers in wages overall >> yeah, i think that there's -- it's right now, the wages are quite, quite hot the question is, if demand softens materially what, does that mean for the ability for wages to stay as high as they are? and i think you're going to have a mix shift that that's pretty important to understand. your white-collar work person probably has a more at-risk job than your frontline worker, so it could make wages look softer and deflation stronger if we see those people in the middle income losing their jobs and the frontline hourly workers keeping them >> julie, thankyou julie biel we'll see you later. right now, let's get a final check on the markets you will see right now the dow futures are still higher, up by

about 25 points. the dow last week up for four weeks in a row it was a fgain of about 1.2% s&p futures weaker this morning but down by less than half a point. nasdaq futures down by just 4.5% the ten-year looks like it's yielding still above 3.5%. 3.564% join us tomorrow right now, it's time for "squawk on the street. ♪ good monday 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, watching spacex this morning, set for the maiden test launch of its new star ship, the most powerful rocket ever built meantime, futures pretty steady as the earnings picture heats up 62 s&p companies this week, including some financials today. road map is going to begin with a big week for corporate results. tesla, netflix, as we said,