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. this morning, it looks like the u.s. equity futures are in the green this hour. dow futures indicated up 66. s&p up 14. the nasdaq up 90 this comes after all three averages were up .30% yesterday. if you have been watching what is happening in the treasury market, you see the 10-year treasury is yielding 3.589%. the 2-year treasury is back at 4.169%. we have a lot going on "squawk planner" will give march housing starts at 8:30 a.m a lot of earnings. johnson & johnson and bank of

america. we will hear from goldman sachs this morning bang of new york mellon and lockheed martin. after the bell, netflix and united airlines. a lot to chew on >> closing bell. >> after the closing bell. >> is it a bell at the beginning? at the beginning or close? >> the bell. >> the button. you press a button >> you have it at the new york stock exchange >> the gavel it flies off at the guys the gavel has come off before. it is scary. i see the person who will do it practicing with the button >> you know -- it is like "jeopardy!" trying to hit the bu button china gdp growing at the fastest pace since last year

retail sales jumped 4.5% industrial output rose just high of economists forecast of 4%. house speaker kevin mccarthy says they plan to raise the debt ceiling. in the speech yesterday at the new york stock exchange, spooker -- speaker mccarthy talked about clawing back covid aid and requiring americans to work to receive federal benefits here is what the speaker said about negotiating with president biden. >> when i walked with him and sat with him, i said, look, we could negotiate parameters let me be clear. there are two things i will not do i will not raise taxes and i will not pass a clean debt ceiling. it won't pass. >> it is interesting

we will see whether -- i'm not sure who he is talking to here-- the other side or the other side i mean his own party the more conservative members want a lot more than that. moderates don't. he needs 218 he needs total solidarity. he will not get -- whatever he has. he will not get any democrats. in response, the white house spokesperson accused the speaker of holding the full fiaith and credit of the united states hostage. we will talk to hakeem jeffries later in the show. >> the two sides are not in align pmement at this point. >> they are not. if mccarthy passes something, you send it to the senate. the senate changes it and leaves something so both sides can

claim victory. >> we spoke to dan clifton about this yesterday mccarthy will have an issue passing something. it is going to be something complicated to get his caucus to sign off on it. >> right he has it coming from all sides. his side and the other side. you know, "washington post" stating "fight united front. >> remember we were talking about the innauginauguration >> may or june. >> that is what you see. maybe they can stretch it longer florida governor ron desantis stepping up his fight against deisney. he announced legislation to override the efforts to side

step the state oversight of the theme parks. the governor suggested taking punitive action against disneyif disney and including a state-run theme park or this. >> some said maybe you need another state prison who knows? >> disney ceo bob iger said the future investment at disney world would be at risk if the governor continues to use disney as a political punching bag. this is the largest employer in the state. disney world is responsible for 1 of 50 jobs in the state. the rhetoric at this point -- >> does this poll well in florida or nautionally does he think this is going to help him become president? >> he does what he wants. >> i know. >> you saw in battleground states that he is up on biden.

trump is underwater on biden desantis cannot win a nomination. >> what is he doing? >> he is doing what he thinks. when he was doing the covid stuff, if he didn't fold then, he is not going to fold on this. he's young maybe he hasn't learned. maybe he thinks i'll do what i want to do and i feel strongly about this for whatever reason, i don't think he puts his finger in the air as much as -- you know, depending on where you sit on all these things some people think that is a real attribute. some people think he is the greatest governor ever other people think this guy is trump on steroids. >> it is one thing to stand your ground and another to be vindictive >> you know, there is plenty of vindictivity to go around. >> i never know --

>> is that a word? >> it isis another thing to be vindictive there is plenty to go around. let's talk about chinese electric car company nio. it will not join others to cut prices it won't be joining the price war. nio product and services are worth the price. they will add more battery swapping stations to change out batteries in minutes so b customers don't have to wait for charges. that software was previously free and now charged $50. >> is that keanu reeves? every time i hear that, i'm not pavlov's dog he is cool

he is almost 60. >> he is a nice guy. if you have seen what he does for people who work with him he gives away a lot. >> tom cruise and nio. i have some picture up in the attic. yeah >> he looks younger all the time >> where do you buy one of those? >> in the market for one >> it might be too late. the screenwriters guild voted to authorize a strike against hollywood studios that employ them. they are seeking a new contract. the union said almost 98% of the members approved a walkout the contract ends on may 1st the writers are looking for higher pay and changes to contracts to keep them up to date with new reality in the industry streaming series with fewer episodes in the season than a network series and streaming krth contracts

eliminate the option for syndication. jalen hurts is the highest paid nfl player in history the eagles quarterback signed a five-year contract extension reportedly worth $255 million with $179 million in guaranteed money. espn said it contains a no-trade clause which prohibits a trade without written percmission from hurts or his agent. and apple opening a store in india overnight. we will talking about the customers they hope to win a lot. and cnbc sustainable returns tomorrow business leaders and investors share how you can make sustainability a fundamental part of your strategy. not just for the greater good.

hypothetically scan the qr code to register or visit cnbc.com to register we'll be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

apple is looking for a new generation of iphone users opening the first store in india. ceo tim cook was in mumbai to welcome the first customers. steve kovach is joining us with more >> this is the first retail store. another opening up in delhi on thursday this is part of the huge tour tim cook is doing across india he will meet with prime minister modi tomorrow. others are saying why is he going to india where else will he go? india is offering over 1 billion potential customers. by the way, that is deidre bryant standing next to him. head of marketing. he learned china is not a great place to put all of your eggs i

one basket with manufacturing. >> this store is as much about the supply chain in terms of ingratiating the company with the country or is this a new push to believe this is the new best and biggest retail market that has been untapped you and i have talked about the margin on those phones and what phones work there and when i say work, what phones sell well in in india. >> it is not $1,000 apple, but android. if they open two retail stores within 48 hours of each other, they see the data that the indian consumer is ready a lot of interesting movement in culture with the rise of -- they don't have tiktok, but reels and shorts in the country. people want these devices. the consumer track >> more people than china?

>> over 1.2 billion? >> it is happening this year >> that's a labor force. you have the potential middle to upper class growing in china 10 or 15 years old. you have the labor force which can build the devices like in china and still see in china at the same time, you have the indian government and modi is meeting with him tomorrow. they want more job creation. >> they have 3% to 4% market share in india it is billions of dollardollars. >> with no retail presence if that tells you anything and we talked for years how there are more cell phones than toilets. everybody has access to their own cell phone >> that's it part of that is you want to go what google did. google has a strong market share, sundar's big initiative

was let's make cheap android phones and get into the market and dominate the market share there. apple can't do that. >> you think apple will offer -- >> that's the same price they clearly see the consumer is ready. especially in the big financial centers. >> they can't offer their phone at any lower price in india? >> no. >> worry about the arbitrage >> it is a different calculation. you have to keep in mind that in the united states we are unique the way we buy and sell phones carriers can give it to you for free they don't have that in india or other market people need to start talking about payment plans which we have you lease the phone. that's more possible now until now, the retail presence for apple products is vreseller.

reselling apple devices or p apple online store now they have the footprint there. you see the crowds people are lining up >> fascinating steve, thank you nice to see you. coming up, one consulting firm offering to pay new hires up to $40,000 to defer their start date you don't show up at work and they pay you more. we will break it down in a moment. still to come, quarterly results from johnson & johnson and bank of america expected in the next half hour we will have the numbers and instant reaction don't go anywhere. "squawk box" is back after this. >> announcer: this cnbc program is sponsored by truist wealth. where meaningful relationships matter most. when other guys were charging four to five-hundred bucks. he just didn't wanna do that. he was proud of the price he was charging.

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johnson & johnson shares jumping here up over 1%. reporting $2.68 a share. that was 18 cents above estimates. revenue $24.75 billion versus expectation of 23.66 the company is also boosting full year guidance for operational sales and adjusted operational eps. if you do the mat h and compare to estimates, that is the key to whether it is above what people were anticipating the year results to be. the operating growth was 7.6%. if you see the company reported

a loss, that's because it did report a 3 cents per share loss. that is due to the one-time charges which was significant from the talc. i don't know when they stopped selling talc you didn't have to buy it -- 25 years old, you could get corn starch and aloe. it smelled good. a lot of good baby powder. i've known about talc. ft. lee. >> really old building >> in ft. lee. that had to be 20 years ago. i wouldn't touch that, talc stuff. before the commercial break, the wall street journal saying firms are paying them thousands of dollars not to start or push off the start date

bain said if you waited to start until 2024, the firm would pay them $40,000 to work for a non-profit or $30,000 to learn a new language or participate in an educational program there were suggestions to bain new hires to become yoga instructors or go on safari. mckinsey doesn't have a start date yet, but to be brought in shortly after graduation i think $40,000 or $30,000 to learn a new language or go on safari, i would be behind that >> some of them make $175,000. >> excuse me >> you thinking english? >> $175,000 for starting salary out of the top schools if you wait a year and you have student loans you are paying off or looking for an apartment -- it is one thing to go home to mom and dad and not worry.

>> if you are on safari, you don't need to rent a house >> you still have to pay the student loans if you have them. >> tough economy consulting firms >> some of the highest paid jobs >> i know. >> forget about the tough economy. i think in an a.i. economy, as we will talk about elon musk later. you start to think of what a.i. can do relative to the consultants. >> the best thing they come up with with those words that describe everything in business. it came up with thought leader there used to be a list of mckinsey two word terms. you know what a consultant is? somebody from out of town who doesn't have a job. >> right and tells you that you no longer have a job either. >> he breaks the news to you i remember certain mckinsey

consult aants who have taken ovr the delta guy did not work i'm not going to mention names at cnbc. that experience over the years >> part of the problem is technology companies are laying off. suddenly it looked like a great idea to go to business school and get an mba >> what does it cost to bring mckinsey in to streamline? in a bad economy, you are not bringing in consultants. >> no, you are laying off people left and right consulting companies are overstaffed. after a onwone-day delay, te jury selection is expected to happen today we have eamon javers with more on this. >> reporter: good morning, becky. i was in the courtroom yesterday. delaware superior court judge

eric davis did not give information behind the secenes e whether he stepped into the courtroom to announce the one-day delay. he said this is not a press conference i don't do that. the delay has set open a tsunami of speculation that fox could seek to settle the case before it goes before the jury. especially after the series of pre-trial decisions which have gone against murdoch's company we don't know what is going on behind the scenes. as of now, it does not feel like a settlement we are a couple hours away from the opening trial date investors may have been heartened of the deal of the most powerful media mogul of our time in the delaware courtroom dominion is demanding $1.6

billion over the voting machines that aired on fox after the 2020 presidential election. fox calls this a crusade and says first amendment rights are at stake here. the case has revealed damages internal texts from fox with some figures on the network believed the allegations were force and giving them favorable air play in an encouraging sign for fox, the judge said in a statement that he accepts the fox legal team apology forproblems with the disclosures of murdoch's title the at the company you don't want to apologize to the judge on the eve of the trial. back to you. >> certain right-wing guys and gals are pushing back on the comments the judge made.

sarcastic comments it seemed to telegraph what he was thinking i was talking about how fascinating it was yesterday, eamon. everybody is quoting sources that cannot be quoted. whether or not it is a settlement it looked like the judge is saying give this one last the shot you saw both sides stake the fascinating positions. from the fox side, they said we're hearing dominion softened what they are asking for they threw out a number that it was $1 billion so, it almost looks like that came from fox. we can talk if you get to $1 billion. dominion came back and said no, it has always been 1.6 fox knows it is 1.6. it looks like they were negotiating with leaking sources to each other. i don't know whether any of that is true. that's what it looked like to me >> reporter: fox is filing included an email from the

dominion official to fox from this, we take it that they are coming down half a billion on the ask dominion filed back and said absolutely not we are not coming down 1.6. there have negotiations back and forth. that is the tip of the iceberg we can see you have the strange situation now where the entire town of wilmington feels like it is full of lawyers for fox and dominion. you have dominion people at double tree and fox at dupont. filing motions back and forth. we will see them here at the court at 9:00. we will see if they made progress it does not feel like a settlement right now if i had to use my spidey expense. we still have a couple hours left >> $4 billion, fox has they could do $1 billion it is hard to do buybacks or stuff with other places and people have said every $500

million is $1 off the stock price which is down 10% with other media companies being up they could definitely handle $1 billion. how many viewers would they lose 3? >> reporter: the other question is do you get to punitive damages? >> by going to trial that is interesting to chance that that is what i don't get >> eamon -- >> reporter: joe, go ahead, becky. >> go ahead. >> reporter: this is a trial about election lies in the run-up to the end of trump's presidency the trial by sheer stroke of iron y and corporal fte filing,i trial is being held in joe biden's hometown this is tricky for fox's team. they will strike juror from the jury pool. they will look to strike people

who might be biden people. there are a lot of them in wilm wilmington this is his hometown >> eamon, thank you. when we come back, fcc chairman gary gensler on capitol hill we will have a preview of the hearing with patrick mchenry. and don't miss the interview with johnson & johnson cfo joseph wolk. as we head to break, let's look at yesterday's s&p 500 winners and losers >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find

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good morning wellcome back to "squawk box" here look at futures. the dow futures are up by 103 points the s&p futures up 16. nasdaq up 87.

the financial services committee will grill gary gensler for documents filed by former ceo sam bankman-fried representative patrick mchenry joins us now >> we will look at 53 major rule makings by the agency that the market has to bear for this in a competitive world >> what do you mean by that? >> with the digital asset ecosystem. what do i mean his two previous predecessors as chair of the fcc did half the number of rule making. there is a massive amount of change this chair is trying to

drive. it has a lot of expense in the markets. he is giving a limited amount of time for good comments we will have shoddy rules which are ex-spensiive on the market t the same time with the capital markets. it is not a smart agenda it is important we expose that at the same time, we hasn't provided any sense of some way to operate for digital assets so they are going overseas. we are losing to competition to asia and europe with regulatory regime that is sensible. we have no regulatory regime that is what i want to expose this morning that is important for the american economy. >> what are the rules he implemented or imposed and a lot of times rules have been imposed and not i amimplemented? >> there are 53, andrew. the volume of this is one thing i want to point out. individual members of my committee have specific concerns of rule making the climate rule making is a

major undertaking. the human capital rule making is a major undertaking. the latest of the national market regulation is a major initiative if you talk about everything from the response to gamestop to how corporations disclose employees and employee benefits, it is a substantial change to the public company here in the united states. >> you can get back to this. i want to ask. we have leader jeffries coming on today, congress member, maybe we will cut a sound bite from him. this idea that speaker mccarthy has, will it pass? i don't want to make light of it, but do you think he will take 15 or 16 votes to try to get his side to pass you know whether the votes are there. you knew what was going on when speaker mccarthy was getting

elected. could he do it what he talked about yesterday and send to the the senate have you talked to the far right members? i'll ask leader jeffries when he is on and i can play your response here. >> look, the democrats are the minority in the house. it is their goal to trip up the majority of the party. that is the nature of the minority we will pass a debt ceiling increase -- >> you are >> we will have commence rate spending cuts. that package, the house republicans will pass within the next two or three weeks. >> you will? it's razor thin. you will get nos dem democrats. you will have moderates that all have to be on board. you will say that is going to happen can you give me a drexel guarantee? >> the idea is you have to be

able to count. you have to count to 218 if you have 218 votes. what happened 100 days ago it took us a week to get there >> this is two or three weeks. >> it took 15 votes. i don't think it will be that much drama for us to pass this debt ceiling increase and spending cuts with it. republicans are unified around this in the house. >> so, i think the question that goes to this is when do we get a deal and how quickly do we get a deal if we don't get a deal, how damaging is it if we thought this would always end well, but does it end well >> it is supposed to end well. that is my goal. that is my active engagement on the debt ceiling the speaker met with the president on february 1st. the first meeting. since then, they had no

meetings the speaker said i want to negotiate a reasonable outcome of raising the debt ceiling increase we don't have the votes to have a clean debt ceiling increase. just like speaker pelosi and leader schumer did with trump. they necessity gotiate to raise spending at a time we have record ref p k -- record revenue and deficits in washington. february 1st, that is what the speaker said since then, there has been nothing, nada and zip from the white house other than saying pass a plan. we'll talk to you after that we're passing a plan and we will see if the white house wants to negotiate. it is in america's interest for them to sit down and calmly and cooly come to a resolution here. anything other than that is asinine and stupid

not that i have an opinion >> we have to run. let me ask you one -- back to gary gensler you talked about cryptocurrency and worry and anxiety that crypto and that industry is moving overseas. how concerned are you about the things happening overseas which is to say one of the reasons i think this industry has not been regulated in the u.s. is a lot of folks who don't feel comfortable that the industry, unto itself, can be quote/ quote/unquote, controlled or regulated and that is why it hasn't happened? >> it still will happen just li like the internet happened and free speech happens. people find a way globally to take their actions what i'm going to provide because the regulators have failed is legislation out of the house and that legislation will provide a disteninction between

commodity and will have a regulated stablecoin at the federal level. what i'm trying to do is get regulators to come to the table and negotiate. especially gary gensler had an act to send wells notice rather than provide clarity to have this in the united states. >> congress member mchenry, we look forward to the hearing today. we appreciate you joining us >> great to be with you. coming up, bank of america set to eport we will bring you the numbers and reaction on wall street. later, tom friedman joins us about his latest chip to c trip and if you want latest, follow squawk pod and listen

any time we'll be right back.

welcome back it looks like bank of america out with the numbers looks like bank of america coming in with earnings per share above expectation $98. revenue number above expe

expectation. the street looking at $21.35 billion. a lot of numbers investors kcare about. net interest income up 25% that is the number we saw from jpmorgan chase that was strong earlier in the earnings season net interest income is the interesting number as the banks have all of the deposits coming in, they are able to get them at low levels and loan back out at higher rates. that is where the big banks are making a lot of money. they talked about fee based income up $154 million. gain of 1% to $11.8 billion. they saw the second highest quarterly sales in a trading in a decade fixed income up 29% at 3.4 billion. equities was down 19% to 1.6 billion. the provision expense looking at $931 million that is actually down $161 million from the fourth quarter. they say asset quality remains

strong if you are looking at expenses up from the fourth quarter seasonal payroll and higher fdic insurance costs that will come n. you in average loans is up 7% year over year that is a gain of $64 billion. commercial loans up 8% consumer loans up 4% they say for the cet-1 capital ratio, it increased by 14 basis points to 11.4%. digital enrollment engagement is strong people wonder about deposits, too. it looks like deposits were down 1% when you start looking at deposit numbers, you are talking about big, big numbers over $1.5 trillion a gain of $500 billion since covid. down in the most recent quarter. it looks like the stock is up

2.1% i'll be speaking to the ceo brian moynahan today on "closing bell." when we come back, we will look at shares of johnson & johnson one more time. johnson & johnson reporting earlier. right now, that stock is up 1.75%. we will talk to the ceo joe wolk about the company's quarter right after this that's what you get from the morgan stanley client experience. you get listening more than talking, and a personalized plan built on insights and innovative technology. you get grit, vision, and the creativity to guide you through a changing world. ♪

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welcome back, everybody. johnson & johnson out with first quarter results.

johnson & johnson's sfo, joe, is with us. revenue, $24.75 billion versus what they were expecting what really pushed things over the top for you? >> good morning, becky great scientific innovation continues to produce great financial results for our company. we were responsibly cautious, and we were able to manage the sciences taking over, and first quarter growth was much stronger than the fourth quarter growth for all three business units and our positions changed to

optimistic, and we feel good about 2023 we feel good about what lies beyond 2023. we have been able to integrate seamlessly from the acquisition, and we continue to make great progress with our consumer health unit separation, and being a stand up as a successful company here >> how much of it do you feel like you are getting a break with the head wins headwinds >> we think we will win the day, and make no mistake given some of the macro economic pressures we had at the end of last year,

we can manage our costs and resources in a practical and efficient way, and this year -- this quarter we were up versus last year. >> so this is not a call on an improving consumer and improving economy, you didn't see anything on that front? >> what we saw in med text specifically is steadiness to the procedure volume i think hospital staffing has become less of a concern, and hospital administrators have been a great job managing that, and in consumer health we had a strong robust cold, cough and flu season, and that helped and then pricing actions they took at the end of last year were able to provide favorable comparables compared to where we were >> no pushback >> no, demand was strong

it was our 61st consecutive year of increases >> is that increase based on -- the amount of the income based on improvement over what you anticipated in january >> yeah, i think it's consistent with what we had in recent years. it's our 61st consecutive year, and there's an expectation from investors in johnson & johnson that we will raise our tkeuf deposited. >> just from left field, joe, do you think a.i. could design -- >> yeah, we have had artificial intelligence machine learn, especially with the drug

development, and we could probably get to quicker solutions making the cost of development more efficient going forward. >> but they can't be a cfo, could there? >> i would hope not, joe, at least for a few years more >> or a person on tv >> definitely not that >> whose job is safer? >> much more on the debt ceiling showdown still to come, goldman sachs set w report in the next hour weill bring you the numbers and reaction on wall street. you know doug, ever since switching to workday

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good morning earnings in focus. bank of america and johnson & johnson already reporting. in this hour we will hear from goldman sachs. netflix will be on center stage

for investors after the bell we will preview those numbers. plus, new york columnist, tom friedman, on u.s. and china relations. the second hour of "squawk box" begins right now good morning welcome to "squawk box" here on cnbc we are live at the nasdaq in sometimes square i am andrew ross sorkin along with joe kernen and becky quick. nasdaq is up about 78 points, and the s&p up about 17 points and we are looking at treasury

we are getting ready for goldman sachs. the first quarter results. i was trying to figure out why the dow is up 136 points, and j&j also up. bank of america reported 94 cents a share, and that was well above estimates of 82 cents. and revenue came in better than expected becky is going to be speaking to ceo brian phoeupb

has not. you started looking through the regional banks, and there will be winners and losers, and we have talked about that over time the biggest winner, m & t bank, and the biggest loser, state street it shows you in a snapshot -- >> yeah, each one is different the journal decided schwaab and others, that was the big story you can keep your money at apple now? >> apple savings, if you have a goldman sachs credit card with apple you can 4.1%, and that's a game changer for some of these for the first time i want an apple credit card when i heard about that savings pretty good. the latest survey is out,

and steve liesman joins us with more on that good morning >> becky, good morning the worst ever amid persistent inflation, and high interest rates, americans have never been more negative about the economy both now and in the future it's the highest percentage in the 17 years we have been doing it, and that's hitting president biden's approval numbers president biden's approve numbers sinking to 39% from 41%. that's overall on the economy, declining from 38% to 34% that is the second worst numbers of his presidency. what happened? we will take a look at what happened to various groups democrats have taken 10 points from 87% approval to 77%

and it's a big problem potentially for the president here, still early in terms of an election cycle when we look at key democratic g groups, what we found was independents, 65%, and their disapproval was up by 6. and then republicans are interested in this one, this is up 13 points compared to the prior survey, and democrats, their disapproval up seven points this area here is where the democratic coalition was that elected president biden and lost in this area or the high disapproval, that's something the president has to be mindful of on the other side of the aisle,

25% said they were less likely to vote for president trump after the indictment we asked this question, and the biggest differentials, democrats were 47% on that we asked this other question here, is it a good thing or bad thing for a country that the expresident was indicted, and 37% said it was a bad thing, it shows that justice system can be used for political rhettetributn we will talk about this all day long >> i think it's fascinating and a little surprising this is the worst reading you ever got from americans when they are talking about their feelings on the economy, when this poll is 17 years old and dates back to what we were watching through the

great recession? >> yeah, the way that happens, becky, is fascinating. usually when peoples' assessment of the current economy is negative, the outlook for the future tends to be positive. well, things are bad now but they are going to get better we don't have that we have things are bad now and are not getting better, and the inflation, and this flows over to the stock market. >> average weekly earnings down two straight years, and then you put inflation in there, steve, and that's not what we saw during the financial crisis. seems like -- well, there was unemployment, obviously, but it shows you how inflation is something that affects people and how they feel about their

situation. it might affect them more -- if you don't have a job, you are even worse off >> i have been very surprised, joe, the inflation number colors everything we have a 3.5% unemployment rate wages are going up more than they ever do, and they are not keeping pace with inflation. the idea that people's standard of living is loosing pace, and they don't feel the right policies are in place in order to address this, and president biden has not provided confidence to people that he will do the right thing to fix things, so there's not a sense of optimismin the future that usually accompanies the down beat negative views of the president. >> i wait for that all-american survey, because we get all the funny answers some of the guys, the athletes give about it

>> thank you >> joe, thank you for giving me the opportunity to say it's 1,000 people across the country. thank you for that carry firestone, are you surprised people are so down beat on the economy. 3.5% unemployment? inflation colors everything, doesn't it >> yeah, and it's impossible to put on your television or listen to anything about the news without hearing people talk about the recession is coming. this is the most anticipated and expected recession we have ever had, and for a year plus all of the strategists, economists, and anybody who sort of is an expert talks about it and so that seeps into the way the public thinks

inflation, as you say, is a huge deal when you have to pay twice as much for chicken or eggs and milk, you notice it. the car market, just think about what has happened with prices. unemployment is very low we usually don't have recessions when there's 5, 6% unemployment. but i can understand how people are answering that question. >> we are 3500 and change on the s&p, and climbing a wall of worry, and i say that all the time and it's already pretty bad what is hitting us in the face, and the market still has climbed you say it has not tested those lows because we may have one more hike, and the market is sniffing that out. maybe 25 more and that's it? >> yeah, i mean, the fact that the fed might raise one more and

probably will raise 25 basis points, and that's a long way from where we were a year ago. unemployment was low but people were saying it will get higher, and the inflation rate got to 9% we have not had anything but the numbers going in the right direction. inflation is down to 5, and i know it's not 2 but it's belter t better than it was 25 basis points is a far cry from 75. it might not be great if you are getting out of business school and thought you had the big 175 or 200 starting salary, but at least you get to be a yoga instructor and they keep you in the employ category. i think things are better and the market sees that you just heard johnson & johnson report a better number than expected, and the banks are not

going to be worse than expected, i think. the market understands that and is taking advantage of where we were in october, october 12th, 3577 up above 16%, and the nasdaq is up by almost 19% the market is not cheap, but it was much cheaper then. the strategists have been wrong. >> i like -- so you own over 1% in your portfolio, of a scientific crm, salesforce i guess, right >> yep, salesforce >> and then align -- >> it's align and visa >> yeah, that's right. charles schwaab, too >> exactly

>> in march schwab, it was cheap. they are all experiencing growth th thermo fisher was good, and it's still chugging along and it's a great company that provides all types of instrumentation crm, they have religion there. those earnings should be better than it was a year ago there's a lot of streamlining. visa remains dominant in its field. and align, when china is opening up they are getting their teeth

fixed and spending the money to do so. we bought that stock last year and continue to think it can go a lot higher >> normally you have a art piece, and it's really not happening today. you don't want people walking by behind you, probably, so you got a little bit different shot. >> art next time i promise. there's a piece right here maybe you can't see it >> we got some of our best ratings that day if you promise, let us know. >> i will get you back i promise. >> thank you coming up after the break, a lot more coming up, from cracking down on password sharing and the performance of netflix ahead of tonight's big earnings report. that will be after the break we are awaiting goldman sachs'

earnings we're coming right back.

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joining us is a founding partner of netflix we are waiting to see how the password sharing program is going to work, is it going to cut down and create more subscribers? what is that going to look like? how this ad is working in an environment when it is challenged when it comes to the advertising space. what is your expectation >> it will be interesting because these projections for the year, and netflix is pretty bullish, something like $20 million on the year for the ad tier subscriber. it would be great if they could reveal the revenue attached to the subscribers, because as you mentioned, the ad market right now is not ideal for launching this tier. if they can't attach more revenue to these subscribers, they are not paying as much as

they used to when netflix would announce big subscriber gains. it will be interesting to see how that matches up, revenue per subscriber in addition to the ad tiers. >> you don't think they will disclose that figure >> they will they will. the expectation is they will give us both the number of subscribers in the ad tier, and the average revenue per user, which is the key metric here >> right >> the question with the ad tier is how many of these subscribers are going to be new subscribers, and how many of them are people who were previously -- >> that's what i was going to ask you, how much of this is cannibalizing the business >> exactly the numbers on that have been good so far. it has not been cannibalizing in the different markets they have talked about we will see what they say. >> one of the things, we talked

to andy jassy last week, and he said there was a lot of trading down in the types of products people would buy, and they would look for an expensive item and would end up buying a cheaper item >> netflix said it has not really been happening, that the ad supported subscribers are new mostly when you combine that with the password sharing and some of the challenges in the greater economy, i think it's only natural to expect that people are looking for bargains, when you are looking at the streaming services they are subscribing to, and if there's a cheaper option in netflix, people would take it. >> this ride or strike that is

upon us, and how long do you think it goes if it goes who is the winner in the streaming world during this period >> my prediction right now, i think there will be a strike may 1st is the deadline, and my prediction is they will strike around memorial day and last through labor day, so it will be a summer strike. the best position people to survive this or weather it are the ones with the most global content, which is netflix, and we saw netflix is investing heavily in unscripted content. a lot of writers will lose deals to create scripted content at these outlets and i think netflix may be in the position to weather it the best >> what do you think about the

argument in hollywood, the studios and streamers would be happy to have a strike and it would reduce their costs for a couple months? >> there's an argument to be made there, because there's a lot of deals made in the last couple of years with high-priced talent that did not necessarily bourne fruit, and they are saying most of these companies are now looking for ways to trim costs and reduce the amount of content they are producing so there's an easy way to cut bait on some of these writers, they may take it >> always good to see it look forward to seeing the netflix numbers later this afternoon. i am sure we will talk soon. >> thanks. coming up, a look at premarket movers, and then earnings from goldman sachs

expected soon, the numbers and what that does to the stock, which is already up almost 2%. that's coming up as we head to break. take a look at crypto this morning. it's up a little bit in the green. we will be right back. you can't buy great conversations or moments that matter, but you can invest in them. at t. rowe price our strategic investing approach can help you build the future you imagine. t. rowe price, invest with confidence.

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welcome back to "squawk. apple opening its first store in india, and it underscored apple's growing in india part of this is a function of what they think is the retail market and the supply chain and where they want to move some of their supply chain work to india. and then we are looking at names moving in the market, as we are getting goldman sachs. >> we are going to begin with morgan stanley lowering the price on rivian. despite the vehicles delivering what he says are serious driving

thrills, and they are up in the premarket but down double digits in quarter nvidia raising the price target up from where it's trading right now. the a.i. opportunity more than offsets previous concerns over a data center slowdown and rising inventory levels nvidia is already surging 80% from year to date. and then microsoft, $300 ahead of its quarterly results next week analyst believe the microsoft office and azure, you can see microsoft higher in the premarket but underperforming

the triple qs. >> goldman sachs just reported their results. it's a per share beat -- >> what you are seeing right now is the stock down in a meaningful way, and the dow also down in a meaningful way, and that's in large part because the revenue was amiss. this is a larger story in the banking world. they took a big chunk of their maturity business and this is one of the concerns across the entire banking system, but as a result, taking a bit of a loss there. it also appears they lost reserves -- >> first quarter revenue includes $470 million loss on the partial sale of the marcus loan portfolio >> yeah, that's the miss >> but they transferred the rest

of the portfolio to held for sale, and don't you have to do that i was going to say, it's honesty -- >> now it's available for sale, and you are looking at the stock down a bit on that move. turned, and it had been up 5%, and now it's down 4.70 >> the set -- >> yeah, there was a credit loss >> transfer the rest of the portfolio to held for sale -- >> i think you think about it as a one-off situation, and then you have to look out when i say look out, look out 12 months from now as opposed to sitting around and saying this is not a reoccurring loss they will have to deal with every

quarter. >> interesting, even goldman sachs, the move in the interest rates affecting -- >> everybody >> yeah, cutting into investment banking for goldman sachs and everybody else >> the dow was up 150 points, goldman. >> this marcus piece was actually telegraphed, meaning -- he effectively said if you understood the kind of thing they have to do, this is what they have to do. >> it was a one-time charge. i think it's really interesting to see that held to maturity stuff, and held for sale by the way, with any of this st stuff, if you sell any of it or unload any of it, you have to mark the whole thing as hold for

maturity or held for sale. >> nobody ever bought a 10 or a 30-year treasury >> bank of america has a lot >> under pressure. >> still to come this morning, much more on today's earnings movers plus, "new york times" columnist tom friedman returning from a trip to china and taiwan we will talk about the erosion of trust between the u.s. and china and what he learned overseas stay tuned you are watching "squawk box" and this is cnbc

you can see the lockheed martin stock is up $15.13 billion also topped estimates. the company is also affirming a full year guidance and defense stocks, ukraine, things are -- increased spending on defense all over the place let's talk banks after hearing from bank of america and goldman sachs, rbc

capital markets, you know what was going to happen with marcus, gerard >> i wish i could say that, but they did indicate on investor day they were looking at alternatives and this announcement certainly fulfills what they were saying, and they did sell off a large chunk of the portfolio and move the rest into hold for sale >> is there a lot left out there, things left on people's books based on 10, 12 years at maturity is it still a looming problem? >> i don't think so joe. what you said is correct there's certainly lower yielding assets on the bank's balance

sheets across the board, no doubt about it, but you have to look at the liability side of the balance sheet. you have to market those cheap core deposits, and when you do that, the affect is not that material it's easier to look at mark assets, and it's tougher when you look at mortgages and other types of assets and very difficult on the liability side as well. >> it may not be a big deal in terms of a looming problem for some of these big banks if they have these liabilities, and they are not going to be at issue, they have plenty of deposits to offset it, but would it hurt their assets >> that's going to be the issue, if rates remain elevated and let's say the fed has to move higher than anybody expect, that's where the challenge comes, you will see the drag on the revenue because you have the

lower yielding assets being funded by higher funding costs that's why consumer core deposits at bank of america and wells fargo, that will help alleviate some of that drag. >> what about bank of america? with what you have seen today, what would you change in terms of stocks you would like to buy and stocks you would maybe not like to buy? >> what we have seen so far is numbers from friday, yesterday and today in the traditional commercial banks is their revenue growth continues to be strong on a year over year basis, and now it has slowed down and it comes down to credit quality. credit is strong, joe. there's no evidence today of credit deterioration grant it, people are building up their reserves for the anticipation for a reserve or

slowdown and a recession, and you want high quality names with great funding sources with a bank of america or jpmorgan, or even regional banks that reported yesterday >> we appreciate it, that quick analysis on all this thanks >> you are very welcome, joe when we come back, there's a debate in washington over fare share and taxing wealth. we will look at who pays the most in taxes and the true tax rates for major income groups. that's next. in the meantime, a look at the futures. the dow is still up. after the goldman news, it's still up by about 45 points. by the way, a reminder for you, you can get the best of "squawk box" in our daily podcast. just follow squawkpod on your

favorite podcast app we'll be right back. dave, so good to have you. i was just looking at a new ey survey that shows 78% of business leaders are increasing their cyber security spend over the next six to 12 months. tell me why? >> this is manufacturing environments now in play, and number two, companies rely on third parties to provide a variety of services and that increases the attack surface

>> talk to me about how the role of cyber security changed within companies? >> it changed in two ways. one is where we are working with our clients to try and embed cyber security in everything they do. number wo, they have a human element. we have multigenerational workers that have different perspectives about whose responsibility cyber security is >> can you be more specific on how you are working with clients to do this >> we do many things we do everything from developing strategies to implementing them. we help protect 30 manufacturing sites around the world, and we put in security controls that helped find bad actors and saved millions and a great investment for them >> thank you for sharing your expertise. >> thank you

we're watching shares of goldman sachs. they are tumbling right now, now down by $11, and the stock was up $5 before this number hit the market 8.79 per share the stock is getting hit hard in large part because it missed in a big way on the revenue side of this, and part of that was a function of the fact it sold off part of its marcus business and took the maturity to hold business and made that available for sale, if you will, taking a loss in the process and that has really moved goldman sachs' stock, and now we are looking at its impact on the dow.

>> god forbid you have to mark your agency sets -- is that all this is, plus 5 to minus 11? >> hold the maturity, the big banks will be okay and will be able to hold them. >> they were holding the same securities yesterday when the stock was 15 points higher >> yeah, they got rid of it, and you would think that's good news >> is that a really big surprise >> it shouldn't be they telegraphed they would do something with marcus, and a good analyst should have been able to see this and the other piece of this, is the piece about what is happened in deal making, which has fallen off a cliff. i am sort of surprised the markets moved against --

>> half centiam. >> what is up? >> today is tax day, and that's why roberts here by the way, you have to pay -- there's no extension even if you get an extension -- >> you have to pay the estimated tax today. >> i have a friend >> we will break down what we can expect from the tax season what do you think, robert? >> the irs expected to collect over $2.5 trillion from taxpayers this year, so those earning $50,000 or less have a net negative tax bill meaning they get money back from the government through credits 40% of americans will pay no federal income taxes this year on the other end, 80%.

they have the highest tax rate their average tax rate will be 26%, and that compares to a tax rate of 5% for the middle americans or those earnings between 75 and $100,000. the tax code has become more progressive with the top paying 9% more as a share of federal income taxes >> so that kind of lays out who is paying what when people say of course they pay the most in taxes, because they make the most money, but they are also paying the highest tax rate >> yeah, they paid 39% of taxes. >> how come none of these people

are paying like they advertised rates? a lot of us are w-2 earners that way the advertised rate on things >> on the marginal >> yeah, two reasons, it's the standard deduction which was doubled under the taxes,ing and then the high end is because of the capital gains, and the corporations can write off businesses and that sort of stuff. it's the w-2 high earners that i think pays a substantial share of taxes >> what amount would you have to get to to pay 50, what state >> new jersey, if you combine federal and state, it's around 48%. >> at what level, a million dollars? >> a million or more, yes. in new york, it's higher, but

10.9, and it's compared to 14% of the top earners >> and it gets higher and higher -- >> yeah, new york, the top combined rate is 51%, unless you are giving nothing to charity and all your income is w-2 -- >> yeah, there is a charity cap. >> during covid they said you could earn -- deduct 100% of your salary through charitable deductions, and -- >> they gave it all away >> yeah, they did. there's a cap on everything. you have no deductions on your w-2. >> if you want to fix some of these problems, because politicians say nobody pays that rate why don't you fix the loophole to make more people given -- >> this is the point you and

andrew make so well, forget about wealth tax and let's close the ridiculous loopholes, real estate depreciation, and close the tax gap by making those that do owe taxes what they really do owe. when we come back, tom ieanill infrdm wjo us to talk china and u.s. relations and much more. the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪

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some news out of asia overnight, china's gdp the news out of asia overnight, china's gdp grew by 4.5% in the first quarter, beating estimates of 4%. and that's the fastest pace since the first quarter of last year retail sales jumped 10.6% in march, as online sales of physical goods picked up industrial output rose 3.9%, just shy of economists' forecasts of 4%. >> joining us right now is "new york times" foreign affairs columnist, tom friedman. his latest piece is called "america, china, and a crisis of trust," and it recounts his recent reporting trip to china and taiwan

tom, welcome what did you learn on your travels? >> so many, becky, but the most important one is why trust matters more now than ever in terms of u.s./china relations. and that is because, basically, so many things that we now exchange are dual use. in the cold war, we understand an f-15 was dual use with a military device wand a phone wa a civilian device. now seeverything is connected a digital and spins off data it can have a military application or a civilian application. there's a few lines of code different than an autonomous car and an autonomous weapon as we buy, sell, and trade those kinds of goods and services with china, trust marries more than ever because you really have to hope the people who are exchanging those products share the same values you do. and if they don't, you're going to have a problem.

and i think this is one of the deep underlying reasons for the breakdown politically, between the u.s. and china now and the kind of trade war we're going into >> you know, i would argue that trust is not running high, you know, running incredibly low at this point and there are a lot of good reasons for that if you look through some of the issues that have led up to that trust deficit. >> you know, i think the biggest thing is that if you look at u.s./china relations, there's just no question, becky, that china took a u-turn. you know, in the last decade it wasn't like they were heading to be a democracy, but there was a sense that if you talk to business people doing, you know, that dealt with china for a long time, that the country was moving toward, you know, a little more openness, a little more transparency. and even a little more freedom of press and that was aborted ten years ago. and there's been a real u-turn as a result. and because of that, you know,

that kind of breakdown in sense or trust of where they were going, that's really been reflected in the breakdown in relations. the chinese would say from their side, that what they feel is that the u.s. government is more dedicated than ever to the toppling of the communist party. and, you know, that's their big issue. so, but there's no question in my mind that china has taken a u-turn, and it's effected their relations all over the globe >> what we're seeing, we were talking earlier today about tim cook being in india, opening the first couple of retail stores there. the big movement they've been making in terms of just supplying the supply chain being moved to india from china in some ways, too, how does this play out over years? it just seems americans business is being forced to look at other ways to diversify the supply chain. whether that be from lessons learned during the pandemic and being too reliant on one country or whether that just be pressure from washington to do just that.

>> well, you know, the supply chain issue is really complex, because last year, the u.s. and china had a record level of trade exchange now, three quarters of that basically was u.s. imports of manufactured goods from china. and the other quarter, a lot of it was chinese goods of agricultural products. it is not easy to replace the china supply chain also, you just have to ask tim cook, it's not just one company, they have a network of suppliers there that are embedded in that ecosystem. the other thing, and james crabtree pointed this out in the piece the other day, from singapore, is that, okay, we're moving the supply chain, say to vietnam. or to malaysia what you discover that you moved your factory out of china to vietnam or malaysia, but the whole supply chain for that factory is still in china. and until we have the kind of manufacturing base that we can stand up on our own with, you

know, it's not so easy to move these things around. even when you move them, you discover that the second and third order of supplies are actually still coming from china. >> hey, tom, maybe you can explain this given that you were there. tim cook was there where you were during this period. can you speak to just the -- both the body language, the way these relationships are manifesting themselves, because hearing tim cook, you have a situation where he wants to diversity and put some of his business outside of china. at the same time that he needs china in that moment, as well. you have the u.s. politicians screaming about china, and what that relationship looks like in a place, in a country where trust and even discretion in terms of how you speak and what you say matters so much. >> we don't want to speak for tim, but i think andrew, everyone is just really having a

difficult time negotiating all of this right now. there's, you know, i've said for a long time that it's really the u.s. and china that became the real one country, two systems. not the u.s. -- not china and hong kong. and we're deeply integrated. whether it's the 300,000 chinese students here, or the thousands of american companies and supply chains out of china. and to me, we are doomed to compete, but we are doomed to collaborate. and we're doomed to find some balance between the two. otherwise, i think it's going to not only affect our country but theirs as well what concerns me is that we've sort of started to become more like them, with industrial policy our industrial policy, andrew, it used to be called the statue of liberty open our borders, bring the most energetic and high-i qwikster risk risk takers to this country, and we are becoming more like them

with industrial policy, and that's making them more like them that's certainly one of the concerns that i have i would, you know, not want to be an american ceo trying to balance out what to put in china, what to put in india, what to put elsewhere. i think it's going to be a real challenge. >> tom, it's been great talking to you about this. we would love to have you back we're out of time today, but appreciate your thoughts and what you've seen in that country. just very quickly, you had a hard time getting people to talk to you in china, even starbucks bar baristas >> yeah, the country, that's part of the u-turn ten years ago, you could go to china and see a lot of people and some would talk -- it's harder and harder now. china is getting more closed there's just no two ways about it am.hank you, to >>ll right coming up, the wharton school's jeremy siegel joins us with his take on markets as earnings season heats up. "squawk box" will be right back.

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house speakerkevin mccarthy saying a clean increase won't pass congress. we're going to have the house democratic leader if that is true and apple trying to muscle its way into what's about to be the world's most populous country. details on tim cook's big day in india straight ahead, as the final hour of "squawk box" begins right now good morning and welcome to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernan, along with becky quick and andrew ross sorkin u.s. equity futures are now up only 28 points in large part because goldman sachs is a dow component and it is indicated down somewhere around 11 or 12 points, just do the math we are up about 150 on some strong results from johnson & johnson and some other dow

components are doing pretty well goldman was up 5, next thing you know, it's down 11 take a quick look at treasury yields the ten-year this morning has been inching ing higher in yieln recent days, maybe not today 3.57, two-year, 4.16 big bank earnings we were just talking about out this morning kristina partsinevelos joins us now with a wrap-up good morning z >> good morning joe. >> bank of america posting a revenue beat so bank of america's number was 931 million for the quarter, which was actually down from q4. the media call is underway right now. the cfo mentioning that bank of america saw some deposit flows coming in after march 10th that's when we saw what happened with the smaller regional banks, and the bank saw pretty good

deposit gatherings at the end of the quarter. so deposits did fall 1% from q4, but that number, overall, is still higher than pre-pandemic levels also, net interest income on an ft -- on an fte basis coming in slightly higher than estimated now, let's talk about goldman sachs. because goldman sachs did post revenue of 12.12 billion, which was a miss and the point of that was due to disappointing fixed income currencies and commodities, which stands out compared to other banks. bank of america said they had their best fic in almost a decade and wealth management at gulf coast goldman sachs addle lowered. so there are just a few trends that we are seeing and i want to wrap it up with this you've got better than expected in the interest income, aka, making more money from interest on loans, versus the interest

they pay out for deposits. that's one trend despite the banking terminal for march, loan loss divisions aren't skyrocketing. and the last point is that there's also stable deposits that we're seeing pretty much across the board the bank of america call has just finished right now and we'll get some analyst calls from both banks that will start soon we'll definitely bring you more details. andrew >> okay, thank you for that. >> meantime, we are just 90 minutes away from the opening bell on wall street. i want get over to our friend, mike santoli for a check on what he is watching and i assume goldman sachs has to be on that list, sir. >> absolutely. goldman sachs, more broadly, the financials, but really coming into context of an overall market, andrew, where you have upward creep it's not exactly a surge back to the early 2023 highs, but you have had a bias in the s&p 500, back in that direction so, despite the drag of goldman this morning and financials in general this year, you have an s&p up somewhat, about 8% on a

year-to-date basis it's threatening that february level around 4,200 the big question tactically is the broad market going to obey the expectations that this market remains a ceiling right at the level we were at two years ago. no net progress on a two-year basis. the market continues to burn up a very, very full reservoir of skepticism we see that in the bank of america fund manager survey today. people are fighting this market, not believing it actually has what it takes fundamentally to keep working and it has now, yes, it has been selective. take a look here at the overall market, relative to the s&p 500, excluding financials and then, of course, financials. excluding financials that's this white line right here this is a six-month chart. so right back towards the october lows and you're up 13% if you exclude financials. the financial weakness has taken more than a percentage point off of the overall performance although i would argue against the general sense out there that it's just been a handful of large growth stocks that's been doing all the work

it's definitely, as i said, selective. it's not exactly all-incluesi, but over the last month, the equal-weighted s&p has performed right in line with the broad s&p 500. take a look here at the volatility index this is pretty stark you're actually this morning trading below 17 on a two-year basis, it shows you that we are out of what we would consider the bear market zone that range that we were in between 20 and let's say the mid-30s, which is where we were from the peak of the s&p 500 in early 2022 so the question is, does this mean we're in a more normal environment where the market is rotating, where you don't see a fundamental threat, or is this a warning sign that people are getting a little bit too comfortable right here people are not really all that comfortable with the way the market is, but certainly the vix is making it cheaper to buy some downside protection, if you're so inclined, andrew. >> mike, i do want to ask you, though, what you think we -- or how you think we should -- the big takeaway from this goldman sachs report, given that we beat

on the bottom line, but we're now looking at this market situation, that was telegraphed during that investor situation to some degree but it is one of these hold-to-maturity that we're seeing playing out across the banking system across the board. >> we are. it's a messy quarter, is the way you would put it and it's not offset by any real strength in the core competencies of goldman, which obviously we know macro wise, not a lot of underwriting activity on the equity side. still seems like it's not a right deal activity. all the focus therefore is on the balance sheet, the deposits declining. we knew they were going to be taking some losses also, sub-12% return on equity is what goldman posted in the quarter, annualized. it's not really exactly a flattering number if you consider jpmorgan around 18. book value is at $310. it's not an expensive stock, but it seems like there's more work to do. i'm not too concerned about the fixed income trading side. you often see this in a quarter where you have the net winners

and losers in terms of the big banks. not everybody can kill it on the trading side that's not that big of a concern. usually that's not something you would extrapolate to next quarter. on the credit side, it seems like they're paying for a little bit of some of those missteps on the consumer >> all right mike, thank you. >> yeah. >> our next guest says that progress is being made in the fed's war against inflation, but that the economic damage still lies ahead we want to bring in sarah malick, chief investment officer for new syrian when you say progress is being made, does that make you think that the fed will end the rate hike soon? >> there are three areas to focus on to determine that that's inflation, the fed, and earnings how can you see some of the sticky areas of inflation start to moderate like shelter the fed in may will be one and done one more rate hike there and the fed likely pauses. what we don't see is a pivot anytime soon and digging into earnings, we have our concerns going forward. first of all, earnings are

likely to be negative this quarter. but we're worried about revenue growth going forward there's a lot of pricing power in companies's revenue, it might be tough to hold on to that. that leads us to market valuations, which we think are pretty frothy at this point considering there's likely earnings downside going forward after this quarter >> so margins are pretty fat right now, still, but you think that's what's going to get kind of chopped in the future and that's your concern? >> we're seeing margin compression from companies and have been seeing that for a few quarters that should continue what is expected to be positive this quarter is revenue growth and that's what we're worried is not sustainable going forward, given some of the manufacturing data we're seeing and the pricing power that companies have taken in the past it will be hard for them to keep ahold of that pricing. >> part of the argument for stocks being high at this point is that the fed is going to have to cut rates that that could actually help things you think that's premature so

you think stocks are overpriced here >> i think pricing and rate cuts at this point is definitely premature. the fed -- because they have a manhattan to get inflation to 2% we question whether inflation will get to 2% in the foreseeable future the fed pauses, rasps the data, but holds on rate hikes going forward. even if you take a step back and look, post the global financial crisis, fed funds rates were on average a little bit under 1%, prethe d frk c, for about 50 years, they averaged almost 6% we think we're going back to that pre-gfc meperiod, which is the normal period where we had to live with higher interest rates and higher inflation >> okay. we're back at 4150 for the s&p 500. and that's kind of inching higher, as mike was just saying. you think stocks look expensive here that's what i'm trying to figure out. what would you tell someone to do at this point wait in cash, wait for prices to come back down, or go ahead because there's not going to be

another toopportunity to buy >> it's tough to time the market often times, if you miss the best 10 or 20 days, you miss th best returns so these are companies that can consistently grow their dividends, have strong fundamentals, give you some income and we like emerging markets numbers from china were positive for gdp. emerging market estimates look more promising, valuations look stronger there companies like china, indonesia, korea, brazil, mexico, those are areas we like, you get a little more bang for your buck by investing in emerging markets. >> sarah, thank you. >> thanks for having me. coming up, much more on the markets with the wharton school professor jeremy siegel. but next, house minority leader democratic congressman hakim jeffrey responds to speaker kevin mccarthy's new proposal to raise the nation's debt ceiling. stay tuned you're watching "squawk box" on cnbc

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china's economy actually seeing its highest growth rate in a year. first quarter gdp in the country beat forecasts the national bureau of statistics said that it rose by

4.5%, year over year, and 2.2% sequentially goldman sachs' top china economist told cnbc earlier today that the new numbers support the firm's full-year outlook for the chinese economy to grow 6% this year >> house speaker kevin mccarthy pledging a vote to raise the debt ceiling for one year, with some other things attached, while cutting the federal budget and we spoke to house financial services committee chairman, patrick mchenry, earlier on "squawk box," about the chances of this passing. >> what we're going to do is pass a debt ceiling increase, since the administration is unwilling to negotiate and we're going to have commensurate spending cuts and regulatory changes that are going to help grow our economy that package, the house republicans will pass within the next two to three weeks. >> our next guest says he's looking to work with republicans to come to a resolution. joining us now, house democratic leader, hakeem jeffries.

new york congressman, leader jeffries, it's great to have you on, once again >> good morning. great to be back >> these are some of the same players from when you got all of those votes. if i were you, i would add up all of those, the 15 times a majority -- you had like thousands of votes when it finally came down. >> yeah. >> apparently 3,000 -- apparently 3,179 votes, but who's counting >> you had the number ready to go that's perfect so we know that speaker mccarthy and congressman mchenry, hope springs eternal for getting votes. but we can see that there are sometimes votes that you're counting that might not be there when you need them do you have confidence in what congressman mchenry just said? do you think they can pass something in the next couple of weeks? >> that remains to be seen right now, all we have is a

speech and talking points, but we haven't seen the legislative proposal the first thing that we need to do is to make sure that we cleanly raise the debt ceiling to avoid a default on our nation's debt for the first time in our history it would have catastrophic consequences, even the flirtation with the default is going to hurt everyday americans. it risks raising car payments, it risks raising home mortgage payments, it risks raising student loan debt payments it will hurt everyday americans and crash our economy at a very fragile time, particularly in the immediate aftermath of the regional banking crisis. we will have a conversation about the types of future investments that we should be making in the health, the safety, and the economic well-being of the american people, but it should be done through a budget process and through the appropriations process, not in a hostage-taking situation. >> but we know that there are

some issues in terms of where the debt is, and it -- you've got one side that is definitely taking this position you've seen that they are. and you just outline what your position is, with a clean debt rate so we know that we're here and you say, you do want to negotiate. here's a quote just out of an op-ed today. the speaker's requests are hardly radical, just returning to the federal government, the spending levels of the bad old days, fiscal 2022. these are reasonable limits. the 1% annually over ten years and reasonable limits, in that a reasonable negotiation, which is what speaker mccarthy is asking for is not outlandish, with president biden. it wouldn't be crazy, just to talk, just to see if there's something that we can do for both parties, for the united states, for the american people to try to talk about how to do this, when one side is definitely wants to do it that

way. >> well, here's what we're dealing with i think ronald reagan, donald trump, and 2019, paul ryan, the former speaker of the house have all made clear that when it comes to raising the debt ceiling, we shouldn't have partisanship, we shouldn't have showmanship, we shouldn't have gamesmanship, because the debt ceiling is not a forward-looking vehicle. it has nothing to do with authorizing spending into the future the debt ceiling relates to paying bills that the congress has already incurred that is why the full faith and credit of the united states is at risk, because of the threatening of a default separate and apart from the debt ceiling, which should be cleanly raised, we did it three times, without fanfare during the trump administration, and house democrats helped to do that each and every time without engaging in a hostage-taking situation,

though we may have disagreed with some of president trump's spending priorities, certainly, we did fiercely agrees with some of his tax policies, which exploded the deficit, and didn't benefit everyday americans but on the debt ceiling, we recognized that we needed to be responsible. and all we're asking extreme maga republicans in the house right now is not to hold the economy hostage, but to be responsible, we can have a discussion about the budget, there's a process for that that. president biden released his budget the house republican budget is still in the witness protection program, joe, unfortunately, it's hiding. it's missing in action no one has seen it it's not on the house floor, it hasn't even been introduced. but we can have that discussion once the republicans are willing to show the american people their plan >> i guess leadership on both sides has members that they need to try to satisfy for them to move forward

so we know that speaker mccarthy is going to try to introduce this bill. if there is a bill and if they do manage to get a majority, they need, i guess, nearly every republican to vote for it. and there's a couple of things in there that they send over to the senate, but an offer to raise the debt limit for a year. would you, at that point, think that the senate, if the senate changes a few things, is there anything that could come back, that speaker mccarthy wants that you would be okay with whether it's the covid relief funds that haven't been spent or -- i mean, anything where both sides can say, we got something out of this? or it's just clean debt ceiling or not because if it goes that way, you can maybe push the republicans to that brinkmanship, but that's not good for anyone. >> well, we're in total agreement with president reagan's position, with donald trump's position, and paul ryan's position that there should be no brinksmanship when

it relates to the debt ceiling now some of the things that the republican majority is demanding that all of us pass in order to raise the debt ceiling for a year and then be back at this gamesmanship in april or may of next year, which makes no sense, we need certainty in the economy, so people can function and business leaders can make decisions outside of the context of the house legislation so i think to raise the debt ceiling for a year, separate and apart from that, some of the things being attached, for instance, that we passed, the so-called hr-1 republican bill, which is a partisan bill that puts polluters over people that makes no sense. that's a legislative item. and it's a legislative process to have a discussion about what is the right thing to do for the american people. we certainly shouldn't entertain cuts to social security and

medicare and medicaid and veterans benefits and things of this nature that some of the extreme maga republicans in the house majority would like to do and are demanding be done in order to pass the debt ceiling that is all irresponsible. and i think that the right thing to do is for us to make sure that we protect the full faith and credit of the united states of america, particularly during a fragile time for our economy >> there are times where, some of these things, i think, that almost anyone on either side of the aisle would say, yeah, i can live with that and if it gives us the opportunity to, you know, just, by accident, actually do something good in the debt ceiling negotiation, i can't see why you can't at least, president biden said he would enter into negotiation 75 days ago and he hasn't. >> president biden has shown extraordinary leadership he produced a budget over a year ago.

>> it wasn't -- >> -- the american people can evaluate it. >> it wasn't a serious budget, though >> no, no, joe, it's a serious budget that will do several things one, it will protect and strengthen social security and medicare the american people care about that issue that's a serious proposal. it will invest in building an economy that works for everyday americans from the middle out and ground up, continuing to drive down -- >> i just meant, it's not going to go anywhere that's all i meant it doesn't have a chance of passing the house. that's the thing >> no, no, listen, it's our responsibility to present our ideas to the american people so that we can have a serious discussion president biden's budget also reduces the deficit by over $3 trillion we don't have that republican budget to even have a conversation about, joe. and that's the problem >> that's the two sides, in a nut nutshell, there's a lot of tax increases that aren't going to fly with republicans i don't see how when both sides

are so intractable and entrenched, we're out here just thinking, how is this ever going to fix itself. congressman, we always appreciate having you on "squawk box," to have these discussions. i think we made some progress, occasional if blindingly, but we do appreciate it today. >> we're going to work it out, joe. >> i think so. >> i think so. just like we just did. thank you. >> coming up on the heotr side of this, jeremy siegel will join us with his early earnings takeaways. stay tuned you're watching "squawk box" and this is cnbc i'm so glad we did this. i'm so glad we did this. i'm so... ...glad we did this. [kid plays drums] life is for living. let's partner for all of it. i'm so glad we did this. edward jones

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welcome back to "squawk box. rick santelli live at cmhq with breaking news on housing starts, expecting 1.4 million, a bit better, 1,420,000 in the ri rearview mirror, 1,450,000 gets lowered a little bit to 1,432,000. that's the weakest level since january when it was 1.32 million. that was the weakest since june of 2020. on the permits side, expecting 1.45 million, a disappointment here 1,413,000, of course these are all seasonally adjusted annualized units. in the rearview mirror, a subtle revision upward from 1.524 to 1.550 million in the rearview

mirror and also republican that is the weakest number also since january when it was 1.339 million. multi-family versus single-family is a big issue in 2022 a fall 34% of all housing was multi-family the units, 529,000, that was the second best since the all-time best in '86, and 542,000 units we see passports going up just a tad. not much movement in pre-opening equities and of course, we'll hear more about the breakdown between single family and multi-family from diana suffice it to say, rising interest rates and ongoing shortages maybe potentially on the labor side, still making housing a very questionable industry to get a full gps on. becky, back to you >> rick, thank you diana olick and steve liesman, both standing by, as well. diana, why don't we start with you? >> i want to break out, as rick said, the single-family versus multi-family

multi-family tends to make this very volatile. the real gains we saw in building permits were in single family we heard from the home builders yesterday that they are getting an increasing share of the overall housing market they're usually about 10% of the market they're now reporting that they are over 30% of the market, near a record level and that's because there's simply nothing for sale on the existing home side so we did see a bump up in building permits for single-family homes. up 4% month-to-month we did not, however, see that gain in starts, as much. we saw 2.7%. we might want to see more than that what they're seeing now, and we had steven kim, who was one of the top housing analysts was on yesterday, and he was noting that the builders need to build more spec homes and they want to build more spec homes because they have the capital to do that, whereas the smaller home builders don't have it because of the banking crunch. so the big public builders should start to see more spec homes. that is homes that are being built that haven't been sold yet, because there's simply so

much demand out there and people want to get these homes quickly. they don't want to wait six to eight or twelve months because of supply chain delays we should see be seeing a little bit more of a bump, but it is good news to see that bumpup in single family for permits and starts going forward mortgage rates have not been great. they have bumped up about 20 basis points, just in the last couple of days, guys >> we're looking at the 6.16% on the 30-year. steve, how about you, as you look through the numbers, what jumps out at you >> too many homes being built and not enough homes being built, becky that's the problem >> explain >> if you look at a long-term chart of housing starts, we are above, even at this more depressed level that we've been chronicling since when did it peak out here, in 2022 the we're above every single month, every single level that we've been at since 2019 this is not on a total volume basis a depressed housing

market we're still building them. when i not enough, if you take a look at the demographics, and we'll talk to you sideways about household growth in this country, there aren't enough homes out there, period. we have this incredible tension going on right now, between the demand for homes -- >> 5 million homes we're missing, according to all of this data. >> 5 million more homes relative to the homes that are buildin s on couches and you have to feel sorry for them you have a fed that wants to bring down housing activity. housing is one of the main interest rate-sensitive sectors they have control over, at the same time, you have this tremendous demographic need for homes that are out there it's also very interesting that i see multi-family rising as a percentage of total. it's up near 39 to 40% i don't know if that's a price thing, in that people can't afford single-family homes and therefore all the multi-family, or maybe it's a demographic issue in terms of the need for lower or moderate-income housing

or maybe it's a combination of the two, becky >> okay, steve, diana, rick, thank you all. >> thank you >> i want to broaden this conversation out to talk a little bit about the fed's decision meeting on whether or not to raise interest rates. joining us is jeremy siegel, professor emeritus at the university of pennsylvania wharton school of business before we even get there, i'm curious of what you think of this earnings season that we've seen so far. we had this gulf coast news this morning. bank of pamerica, jpmorgan last week, netflix and tesla tomorrow what's your sense of the numbers we're seeing versus what you were expecting >> they're pretty good, to say the least. but we have to remember, first quarter is all svb that occurred around the middle of march we're not getting in these earnings what effect the

slowdown in lending really might impact the earnings. and, in fact, that's even true with the data. i mean, we're getting march housing starts, most of those starts were certainly committed before the banking crisis, so they were allowed to start i mean, diane mentioned something very interesting what we might see from the banking crisis is the small guys being hurt, and that's not just in housing, but in retailing and all the rest, and the big guys w who have lines of credit and capital and don't go to the small banks, they might profit more so. the banking crisis in some way might actually boost earnings to a number of firms, i mean, particularly the large banks that we've seen, and even throughout the entire economy, going forward. >> so you think it's actually much worse than we know? >> well, i think the effect of

the banking crisis, i mean, what i hear on the ground is that the lending to the small guy from regional banks has slowed dramatically and the impact is there. it's just not in the data et and, as a result, you know, it's my feeling, you know, i share austin goolsbee, you know, it's time to pause. i don't think they will, unless we see deteriorated data, between now and may 3rd. >> what do you see that jay powell doesn't see i imagine jay powell sees the same data you're seeing? >> well, jay powell, i think there's a couple of things that he thinks. first of all, i think he really underestimates the slowdown in housing, who talks about the distortion in the data, in the housing data when data in housing prices is still going down next week, we'll get case-shiller, which might show

the eighth consecutive decline in housing prices, even though the bls continues to show higher prices so, in fact, i've done a calculation using current prices and core year over year using current housing prices, both on rentals and on owner/occupied homes is down 2% year over year. it's over 5% in the official statistics so i think inflation basically is back down to the fed target also, i think that -- >> hold on you think that inflation in america is at 2% using real housing data, both on the rental and on home prices, yes. year over year, using actual housing data not the delayed housing data that the fed uses. >> so, that would show up in the

data that the fed uses when? >> oh, at the end of the year. probably september, october, november begin to really show up. powell himself has admitted that the housing data has lagged and they're going to see that decline later. yet on the other side of his mouth, he talks about, oh, yeah, we're way too high, year over year i was really pretty surprised. he said we haven't made enough progress, for instance, for inflation, again he's looking at lag data and i think that's where the fed is making the picks. the second place, andrew, is the cumulative effect of monetary tightening, plus the banking crisis is yet to be felt so there's a lot of tightening still in the pipeline, given the progress we've made, going higher, risking a recession, which i don't think the fed should be risking. >> okay, given what you just said and what you think the fed may do, how do you therefore

think about equities right now >> well, you know, at the very beginning of the year, before the market opened, i said, this looked like a 10 to 15% year and when i saw the fed not getting it and being too tight, i revised down to 5 to 10. actually, we're at the upper end of that range right now, so, you know, maybe i shouldn't actually lowered it i see a very bright 2024 i think what the market is doing is perhaps saying, yeah, the fed might cause a mild recession, we're looking over that ravine, we're looking to 2024, and we only see good earnings that's one rationale >> so what does the siegel family do with its money in this circumstance >> oh, on equities, we sit tight. you know, i do not try to play the ups and downs of the market.

i think that's avirtually all in equities and we're sitting tight. >> finally, what do you think about the banks themselves and this whole sort of move, we were watching the goldman sachs this morning, but it's truly potentially what you're seeing at bank of america, but hold to maturity versus an available for sale issue and what that means >> i think the big banks are in great hape i think the smaller banks are going to have trouble, and you're going to see a lot of consolidation there, as theirso. many are in commercial lending and if they're in office buildings or anything on that end, you know, they're going to suffer you're going to see consolidation on the lower end the big guys, hey, they take the benefit from this. >> okay. professor siegel, always great to see you, sir. thank you. >> thank you johnson & johnson beating

wall street estimates with their first quarter number the dow component also lifted its full-year forecast and cfo joe wolk joined us earlier on the show he said the company has been able to weather some tough macro economic head winds. >> the first quarter growth was much stronger than even first quarter growth for all three business units and our position has changed to responsibly optimistic at this point. was feel very good about 2023. >> johnson & johnson is projecting 2023 sales about $1 billion higher than the guidance it provided in january and it raids itsed its full-yea earnings forecast from $10.66 to $10.70 a share it had been $10.45 to $10.65 i don't know they're raising any -- >> from the year he did say he felt good about the rest of the year and that they are now taking a more optimistic view on things,

as a result. >> and they did report a loss after the chart. >> that finally, i think that's pretty big i think it's over 20 years >> i don't know. >> $4 billion or something when we come back, we'll get jim cramer's first take on the trading day ahead. first, though, take another look at goldman sachs and bank of america's stocks both of those companies reported earlier this morning goldman sachs off by about 3.7%. bank of america up by about 1.6% by the way, i'll be speaking with bank of america's ceo brian moynihan, that's coming later today on "closing bell" at 3:15 p.m. eastern time. and a reminder, tomorrow, you can join cnbc's sustainable returns virtually, where business leaders and investors will share how you can make sustainability a fundamental part of your strategy, not just e ear ofgreater good, but for thgrteprit scan the code on the screen to register or you can visit cnbcevents.com we'll be right back. you can use software

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welcome back to "squawk. check out nvidia the stock getting a double upgrade from hsbc who said it was shocked by nvidia's pricing power in ai. it more than offsets its previous worries about a slowdown and rising inventory levels which leads us to a guy who

likes innvidia, quite a lot. >> let's get down to the new york stock exchange and check in with jim cramer. let's talk about the banks today. goldman sachs and bank of america, pretty different reaction in the market so far. goldman's stock getting hit pretty hard after it was up before the numbers coming in what do you think? >> i think it's a nerve reaction i think there's only a $66 million, let's say, miss on the revenue line people are talking about a much larger mission there's this accounting issue of selling of loans has gotten people offtrack on this. also, yes, it's true their fic was not as good as some people thought. but you're using it against a comparison that was an extraordinary comparison so down 17% from a great level still puts them in the top decile of their fifth number since they've become public. i like goldman, down 13. would i like it down 5 no but down 13, i'm a buyer i would buy it i think it's not that big.

bank of america was just fantastic. amazing quarter. what jumped out at you, the net interest income was a big deal >> yeah, but you've got to -- there's -- the fewest bad debt in 53 years. just the balance sheets are incredible now, i don't want powell to say, wow, i need more bad debt. i think maybe that bank of america, it's really a fabulous -- i would say, it's exhibit "a" for why the fed should just be, just stop. we're seeing consumer spending actually decline a little bit. things are good. we're not having a lot of loan losses but let's not press it much for -- i think bank of america said, okay, this is as good as it gets, we really like this we have a lot of money came in, not a lot of money came out like some of the other banks that we don't like it's just a very good quarter. actually, it's the best quarter ide i've ever seen him have.

>> here's one of my questions with the big banks just in general, the idea that they have $1.5 trillion in deposits, some of them more than that, those kinds of numbers with deposits, is that almost more money that you can potentially deal with in terms of the loans you want to put out. right now, remember, we also have like 5,000 banks in this country. other countries have three banks. we're a company of great wealth, also tremendous poverty. these numbers say that people in the $10,000 savings, they have $20,000. people who had $2,000 now have $10,000. to me this is great. i know that's not the money we see the billionaires have, obviously. that's why i say there's a great divide between the wealth. we have a lot of people doing well in this country when you've got the lowest unemployment in years and reflected in pretty good numbers for the banks.

i think they're buy, i think they're all buys still >> i saw your comments on wells fargo yesterday, too i want to ask you about j&j. >> a fabulous quarter. med tech is just beginning to see the turn 50% of their growth is in china. it's just coming back. january is not good, february better, march really good. i think pharma is incredible amazing, your knowledge on consumer products is dead right, becky. tremendous pricing power as far as i'm concerned, there's no flies in this let's get the tout settlement done and the stock goes to 200. >> a lot in a short amount of time "squawk box" will be back with what you neeto wchd at ahead of the opening bell on wall street in just a moment

futures now barely above the flat line. goldman dragging the dow to some extent the nasdaq looks good. joining us cara murphy kes stra investment manager cio cara, most important for most people, is there a reflection

rally in an ongoing bear is it turning into something more than that with the s&p well above the october lows is it still at a point where you'd buy it or are you worried we're out over our skis at this point? >> i would put us more in the cautious camp. we've seen the market try to walk this tightrope between assuming rates are going to start to come down in the back half of the year which is good for risk assets and economic demand is not going to fall off a cliff which would be bad for those assets the fed doesn't start to cut rates unless there's some sort of crisis. the question is what happens between now and when the market thinks the fed is going to start cutting rates that's going to precipitate the crisis who is the fed going to come in to rescue? what's made that more difficult is the persistent wage inflation. we've seen other prices start to decelerate and come down wages have been remarkably

sticky for a couple months earlier this year we had some signs that wage inflation was starting to decelerate and more recently a tick back up again that is running over 6% across demographics, across regions, and that makes it very difficult. >> kara, can i read you something from austan goolsbee be wary about using wages as a leading indicator for inflation. many papers are showing wages are actually a lagging indicator. wages are stickier than prices which the micro data on frequency of price changes suggest. when shocks hit, prices rise first, wages later does that make sense >> i would actually agree with him. i think he should be preaching the the fed. what the fed is telling us is they're watching wages it's very important to them, and they're going to respond to that in terms of monetary policy. we can talk all we want about wages being lagging. the fact is, it's currently

driving fed policy that's what's most important to the market >> that leaves i guess bonds and crypto for you if you're cautious what would you do? would you go corporates? as an investment officer, what would you be urging clients to do >> we do see more opportunities on the fixed income side so think about all the bad news that the fixed income market in general has digested over the last year plus we've got an extraordinarily tight and fast-moving fed. we have a lot of pessimism when we look at risk in the bond market, it's several standard deviations above the normal level of risk in the market. we think taking a little more duration risk is appropriate taking a little bit of corporate risk, particularly on the high grade side where we think those companies are more well insured for any more weakness in economic growth, and we think we

can actually find a fair amount of value their yields are much higher than a year ago, so you can actually be paid to take that risk. >> so you don't really see the normal return from equities that historically we would get. you think there is some -- the risks outweigh trying to get 7% or 8% a year, you'd rather stick with 4% or 5% in the fixed income >> at this point, yes. we wouldn't head for the hills we would be underweight on the equity side. you want to make sure you have exposure to equity markets but not in those reallyfrothy areas. we've lightened up on the small capozide we've looked for opportunities outside the u.s. where we find there are lower valuations, more earnings pes anymore built in. there are areas of value you can find in there. but you don't want to go to the most frothy areas of the stock

market. >> very good kara, thank you; appreciate it quickly, a milestone for apple and its overseas ambition. the tech giant opening its first retail location in india 28,000 square foot store in mumbai ceo tim cook on site a second store set to open thursday in delhi as apple looks there as a huge market for their phones but also maybe a political play as they think about their supply chain and trying to diversify it away from china and in india. >> i like how he got a signature on one of those old mcintosh computers. futures have bounced around quite a bit this morning dow was up by over 150 points. then we got bad news in goldman sachs. you can see the dow futures up by 8.5%.

the nasdaq up by 107 the ten-year looks like it is yielding -- it's been just about 3.5% almost back to 3.6 the two-year at 4.192. that about does it. >> watch netflix after the bell. >> after the bell. >> i don't mean watch netflix. >> watch us for the netflix results is what he means sometime for "squawk on the street." we'll be back here tomorrow. ♪ ♪ good tuesday morning welcome to "squawk on the street." i'm carl quintanilla along with jim cramer goldman, b of a, j&j rolls in. china's eco data is stronger than expected. we begin with a mixed picture for the