and an attorney reviewing the question that taylor swift asked ftx that helped her avoid entanglement in the firm's collapse it is april 20th it is thursday the year is 2023 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. if you take a look at the equity futures this morning, you will see a lot of red arrows. yesterday, the s&p and dow ended down slightly. nasdaq was up slightly this morning, red across the board. dow off 152 points s&p futures down 30. the nasdaq is down 134 lots of questions about the

earnings reports from last night. specifically tesla we will talk about that in a moment if you look at the treasury market, you see right now the 10-year treasury is yielding 3.564% the 2-year treasury is weaker at 4.204% as joe mentioned, john williams said recent stress on the banking system may make it tougher for households to access credit speaking last night, williams said despite tighter credit, the banking system is sound and resilient. williams was more optimistic than staff economists who expect a mild recession this year he expects growth to be positive for the year, but really modest. he said he sees inflation coming down to 3.25% this year. let's talk about tesla the shares are falling this morning. the earnings and revenue came in line with the estimates for the first quarter.

phil lebeau is joining us with more >> andrew, this is a margin story. tesla did not hit the benchmark that was out there by analysts in terms of what they expected in terms of gross margins and all other ways of measuring margin for the company the profitability. look at how much it compressed in the last year total gross margin down 9% adjusted ebitda is down 18%. they came in at 19% flat they cut prices six times in the last year. they did it this week again on the model 3 and model y. look at the change in price from the beginning of the year until now for both of these. i understand the recent price cuts are not factored into the q1 results elon musk said they are in a race here to continue to sell vehicles at the expense of margins. here is what he said on the conference call. >> we do believe we are laying the groundwork here and instead

of shipping a large number of cars at lower margin and subsequently harvest that margin in the future as we perfect autonomy >> that's something we'll talk about in a little bit, guys. now focusing on autonomous vehicle technology to drive margins in the future. take a look at shares of tesla now trading under $168 a share down from where it was a couple of weeks ago you have to ask yourself what do we expect in terms of deliveries they expect to produce 1.8 million vehicles guidance for the year in deliveries they set in january was to deliver 1.8 million they haven't changed that. what changed is what wall street is expecting in terms of gross auto margins for the company because for a long time, it was

20%. now it is below 20% and it raises the question where is the bottom 16%? 15%? that's the question now as they are clearly dealing with the impact of all of the price cuts. >> what is the sense when you talk to investors last night, phil, in terms of the bottom right now? we haven't talked to -- i wonder what barron thinks somebody who is a bull on this and where he thinks the bottom on the margins look. >> i heard estimates all over the place, andrew. that is part of the problem. they were asked about this on the conference call. what do you see in terms of margins? nobody said give us margin guidance they said what is the path going forward. they declined. they said that we know margins are compressed right now getting back to the point of autonomous vehicle technology. they came back to the idea ow mo

be compressed right now in because down the road we have autonomous vehicle technology. full self-driving technology that we can leverage to drive up margins. if you buy that, you buy into the idea that, a, they have full self-driving technology, which they don't have. elon said i think we will have it this year we heard that before b, how many people will pay for this 400,000 in the u.s. right now. how many people down the road will pay for that? >> it doubled almost since january. now it is back down. still up 61% from 100. down -- strap yourself in. down from 364. it rebound in the midst of the twitter stuff in january

who is the competition other carmakers? they are coming. the competition may be ev sales itself we still hear that people aren't ready. they are too expensive most people aren't ready for the next vehicle to be an ev he has to cut prices to try to fend off the majors and mercedes-benz. >> what he said yesterday is what phil pointed out was the cuts are equal to the federal lo losses >> true. >> just so you know on the conference call last night, they said our margins will be industry leading better than other automakers he didn't say better than other ev companies he said they were comparing to e makers in the past the ev competition in china is

driving the price cuts over there. ultimately here, too. >> what are the margins for automakers in general if they are down 11% for tesla >> the gross auto margin is what everybody focuses on. >> automakers in general. >> you are down in the 5% to 7% range in terms of gross p mmarg. maybe the luxury automakers are up in the 9% to 11% range. depending on quarter to quarter. tesla does have industry leading margins. nobody is debating that. the question is where is the bottom >> phil, we will talk about chatgpt. musk has comments. you talked about autonomous vehicles he has been talking about full autonomy for a long time is there anything that you see in the immediate future that does ramp this

one of the things we have seen with generative a.i. in the last year is the remarkable hockey stick. unbelievable is there a moment -- is this the moment, i guess, is the question >> we're not at that moment right now. >> we're not >> i'm talking about with autonomous we are not at that moment right now. i'm telling you, everybody i talked with in the industry who spent years on autonomous vehicle technology, everyone says in the geo area or highway which is why it is in cargo first, autonomous works. for me to sit here and say i want to go to the 7/eleven, take me down there and bring me back? that is not happening.

>> lphil lebeau, thank you the twitter ceo accusing to sue microsoft. he an ccused the maker of stealg its data to accentuate the a.i. platform musk tweeted they trained i illegally twitter data lawsuit time twitter criticized open a.i. and now complaining that the move from a non-profit model to a maximum profit model other platforms include reddit and universal music group criticizing a.i. models for using their data for training. the question is musk got into a bit of a spat over twitter and the advertising that seemed at one point apple would cut back

on he and tim cook made amends. i see ads all over twitter tim cook is the diplomat does that mean this does a similar thing? >> good question in the political world, house speaker kevin mccarthy released his plan to raise the debt ceiling by $1.5 trillion for about a year in chexchange, it calls for spending cuts of $4.5 trillion by eliminating discretionary spending and recovering unspent pandemic funds and eliminating the student loan forgiveness plan the speaker said now republicans have introduced the plan, democrats have no more excuse to refuse to negotiate. at 7:30 a.m., we talk to two members of the problem solvers caucus it sounds like a battle.

they believe it. they are serious when they say that one of these days they may solve a problem. they released their framework to avoid a u.s. default fun to have those guys on. they sort of talk to each other instead of at each other >> they do >> they need more of them. >> there are six of them out oof of 800. and ibm shares overnight we will talk about that next and how taylor swift avoided entanglementit wh the issues with ftx this is cnbc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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welcome back to "squawk box. ibm beating estimates. all widening year over year. joining us now is eophion. the margin is up on the news in the market which has not been that way what is your headline? >> it is about telegraphing. it is about the expectation set up appropriately we saw a falloff in the infrastructure we are aware of enterprises

tightening their belts after covid. during covid to get people set up remotely, there was no holds barred i still that is the case with software with the focus on cyber security. >> hold on you think this was the expectations were low? nobody expected -- that is all we are talking about here? >> yes, partly and reassurance that margins are staying solid and expenses on software, which is non negotiable part of the paycheck right now is still robust >> let me ask about that a lot of enterprises with the earnings coming in decent. what i wonder is how reflective -- this was all pre-svb. pre-credit issues. pre-reining this things in how do we take ibm and

extrapolate that forward >> we need to look at the consumer and resilience of businesses and what they consider to be non discretionary. i suggest software upgrades and an maintaining the infrastructure and now in the non discretionary bucket that is reassuring and margins are not compressed is a fact that there is pricing power there. if you look at the statements, you see the mention of a.i. and not as much mention of inflation of the we inflation. there is this desire for hope and belief for the future and you are talking about tesla and self-driving cars. that is the dream of tech that investors are buying into. as long as ibm is drivering the plumbing, there will be support. >> that is what i would ask. every company, including ibm now peppers the press releases with

the phrase a.i. throughout ibm has been doing this longer than others. they were doing it with watson years ago. here we are in the moment. where does ibm sit in the stack of microsoft with open a.i. and google with bard aws with what they are doing >> i say it is part of the plumbing provision similarly, the consulting business which hurt revenues it will be wrapped around getting enterprises ready for the next frontier. i suggest that is going to lean on a.i. right now. as well as providing the nut and bolts. i see that as a piece of the puzzle they have been involved in some time and not piggybacking on the sound bites and jargon >> that is the question. are they or are they not

watson, to some degree, is the "if/then" program. it wasn't the a.i. opportunity that so many people thought it was. obviously open a.i. did what they were trying to do 10 or 15 years ago. >> i don't think the story of ibm is a.i i think they were sprinkling the earnings statement with that they have to show they are a forward thinking company they are providing the plumbing on the infrastructure and software and consulting piece. i see it as being one of the providers of the nuts and bolts as opposed to the visionary behind the new frontier. >> i want to thank you >> thank you when we come back, the

battle between governor ron desantis and disney is escalating again we will tell you what the governor's hand picked oversight board wants to do right after this. several quarterly reports on deck we hear from at&t and american express and blackstone and several regional banks all this coming before the opening bell buckle up. get ready. "squawk box" will be right back.

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now let's get to the latest chapter in the drama with the florida governor ron desantis and disney the oversight district moved ahead with the resolution to avoid the 11th hour agreements

made by the previous board the new board will consider the resolution on april 26th speaking yesterday at the event in south carolina, governor desantis said we will make sure we keep them in their pen one way or another separately, the governor's board spent the meeting discussing the problems with disney, including the need for affordable housing. hours after the meeting ended, disney announced it would break ground on the planned an affordable housing development a few miles away from the magic kingdom. >> the stock made the round trip from the iger return it was $97 when he came back. it is not good for the company or desantis. the high was $190 or something >> can you get it back >> it is streaming difficulty.

>>es espn. >> they have a history of overpaying, but making it work pixar. >> now we are paying >> it is not overpaying if you make it work. talk about overpaying or not. update on the fall of ftx. on the podcast, the lawyer leading the action against the lawsuit, one celebrity did due diligence with the endorsement taylor swift the attorney saying in the fall of 2021 considering the deal, swift asked can you tell me these are not unregistered securities the s.e.c. would accuse ftx of marketing unregulated securities celebrities agreed to the deal including tom brady and shaquille o'neal and steph

curry. taylor swift is a very savvy business woman and surrounded by smart business people. she has done it over and over with her recordings and the concert series it is remarkable >> this series that is going on right now -- >> give her credit >> what is going on right now is breaking all types of records. >> shattering records. >> after breaking ticketmaster >> it is fun to look at stubhub. the scalping >> if you want a ticket, it is not fun. >> if you are looking for a ticket, it is not fun. supposedly, it is worth it i've heard through the grapevine that three hours is not long enough those are swifties i have to say i'm a swiftie.

>> i am. loud and proud. >> if you went to the concert, would you wear swiftie apparel >> what do you consider swiftie apparel for men? >> a hoodie which i have >> i would totally. >> i decided if i'm going with my family, it's okay if i was there alone >> it is okay. >> no, no. it looks like i would be there for a bad reason i would look like a total creepster. if i was walking around. >> can you continue that >> "red" is one of my favorites. coming up, it is a busy day for central bankers with six planned speeches from fed presidents or governors. >> rose with ice in it >> exactly non alcoholic rose

as we head to break -- >> i need a video of this. >> we have a guy who sold an lot of rose. here is a look at the s&p 500 winners and losers from yesterday.

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good morning welcome back to "squawk box. we're live from the nasdaq market site in times square. if you look at the futures, we are under pressure across the board. dow off 165 points s&p futures down by 32 nasdaq off by 136. news alert from paris. reuters is reporting that french protesters over president macron's pension reform have entered the euronext building. at&t just out with earnings. the company reporting adjusted earnings of 60 cents a share a penny better than the street the revenue slightly light $30.1 billion. that was just shy of estimates of $30.2 billion total wireless net addition. 5.1 million during the quarter

numbers you may want to look going through this continued fg and subscriber gains 2 224,000. that is 11 straight quarters 211,000 fibernet adds. the key is they are looking at what they call higher quality customer additions people willing to pay more for the plans and trying to get rid of the empty calorie consumer. that is the theme with at&t and comcast the last several years domestic wireless service up 5.2% the best for mobile. numbers to check out they talk about -- let's see free cash flow adjusted ebitda. that is in line with expe expectation. free cash flow is $1 billion

i believe that is because of higher cap x they did additional spending i think they think timing will reverse over the balance of the year also, probably worth pointing out the first quarter is the highest with incentives and bonuses and device payments. you should expect free cash flow to get better the year the stock off 1.25% right now. alaska air just out with first quarter results. reported adjusted loss of 62 cents a share. that was wider than the analysts expected revenue during the quarter was $2.2 billion that is better than estimate the airline also -- i'm not going to say that. affirming guidance reaffirming? i'm not sure if we don't know they affirmed it before. >> yeah. affirming is fine.

>> the second effort people don't think anyway, affirming guidance for the full year. new york fed president john williams says the economy can eek out gains in gdp and avoid recession this year. joining us now is former economic adviser from the trump administration and national economic council chief economist. he is now the smbc securities of america economist. and dana peterson with the conference board joe, i don't think you believe it dana, i don't know if you would buy into that. the economy has been pretty darn resilient and labor market resilient. maybe not 2023 is one coming -- obviously at some point is one coming in the next year, do you think, dana >> yes, we expect a recession. it is probably starting right about now. all indicators suggest that.

consumer confidence all points to recession in the u.s. economy. we have seen slowing in activity consumers are spending less on goods. they say they will spend less on services and businesses are already pulling back >> if someone on the fed is watching, dana, after hearing that, don't you think they should pause mission accomplished >> well, the thing is that we haven't seen services really come off in mateterms of consum spending that is driving inflation. housing and also spending on travel and hotels and restaurants as well as food inflation especially for groceries. when we look at the core inflation measures, they are still very sticky. i think the fed has ann'n't come its task yet >> they could have gotten what

they want in terms of recession, but it is sticky so you think stay the course? what do you think, joe >> joe, we are debating if the economy is in recession. many after bear sterns was bought by jp that we avoid a downturn and avoid the recession. risk assets rallied substantially. after the fact, gdp, which was positive, was revised down and recession started in january the data isn't very good dana's point that we could be in recession right now could be true although it doesn't feel like that. the fed is making a classic mistake of forgetting the lag and inflation is sticky. we were at 9 and now we're at 5. it is going lower. food and energy prices are likely to moderate if the fed is waiting for inflation to come down closer to 2%, they will overdo it.

we know inflation moves with the lag because it is sticky this is classic fed mistake. they all think the same. the group thing. when they have recession, they will try to dodge the fact they are the ones that caused it. >> you would say -- i can see if i were the fed, joe, another 25 basis points is not going to change the recession outlook that much, i would think it might psychologically bolster the fed's inflation fight which is self fulfilling i can see how they argue it still makes sense. you don't think the last 25 made sense? >> you don't need the extra 25 it is the pre-verbal straw that breaks the camel's back. they have inflation fighting credibility. the break eveni was 3% when the started hiking in march of 2022.

it is now down to 220. 230. every inflation metric showed us it has credibility the problem is with what the fed doesn't have credibility and the fed is pushing back against it i would stop a long time ago the extra 25 basis points will do nothing to stop what is de deposit flight out of banks the fed is working out the purpose of financial stability while the economy is weakening >> dana, you know what has been positive on the show is that we can't look at the labor market the same way unions have lost some of the strength maybe they are regaining it. a bit of a rebound in union participation. when you have prices rising or inflation and in the old days,

back in the '70s or '80s, once it got out of the barn, you would have wage increases because of the collective bargaining it is not like that any more is it easier to harness the increases in the labor market? not that we want to do that, but it would be nice to have increases out pacing inflation, not behind inflation >> i think labor unions have very little to do with this. there are few labor unions and most people aren't in unions the difference this time is labor shortages. you don't have the supply of labor and the reason why -- a couple reasons why two big reasons why are you still have residual effects from the pandemic a lot of missing workers you also have millions of baby boomers retiring we never had this before with the entire demographic leaves the labor market and they are not coming back. you look at labor force par

participation of workers 55 and older. businesses are skcrambling for w workers and people who physically have to show up for work are still hiring and they can't find people to work. they are trying to prevent people from quitting they are passing those higher wages on to the consumer i don't think it is necessarily a union problem, but labor shortage issue >> didn't we know this would happen there are demographic studies. we should have known this was coming i guess the pandemic exacerbated it >> yes, we did know it was coming the cbo had the report of number of retirees. it showed we would go from 4 working persons from 3 to 2 in years. the pandemic accelerated

retirements. something like 800,000 people retired early and they are not coming back. we are going to continue to see the baby boomers leave the baby or market. you still have a lot of missing workers. parents who cannot find child care or people caring for elders and also long covid. all of these things were exacerbated by the pandemic. we would have labor shortage whether or not we had a pandemic or not >> how old are you, joe? >> old enough, joe. >> you are not 55 yet? neither one of us. that is a white lie. little bit we are still here. it is not our problem, is it >> it is true. dana is right. the demographic trends are in place and the ratio would get bad. the fact we did not need $2 trillion in stimulus in march of 2021 that was just stupid policy.

that exacerbated the problem that is the cyclical side. the secular trends dana talks about are present and it exacerbated the worker shortage. you give people that much money to not do anything, that becomes a plroblem when you are out of the labor market for six months, that makes it harder to get back in it is a problem. i think inflation, joe, will come down. the fed will get what it wants the question is what flack does it take next year in the presidential year? >> you just squeaked in. are you born in december of '68? >> do i have to say? i was born in december >> i don't think how many are around no wonder you didn't answer. clinging to the last six months. clinging. >> right >> all right joe, thank you

dana, thank you. >> thank you coming up on the other side of the break, casino stocks ending -- stocks benefitting from the end of covid rules in asia "squawk box" is coming right back >> announcer: currency check is sponsored by interactive brokers. the best informed brokers choose interactive brokers. young lady who was, you know, mid 30s, couple of kids, recently went through a divorce.

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welcome back to "squawk box. a look at u.s. equity futures. we have dow off 160 points nasdaq off 130 the s&p off 130 points shares of sands double and earnings of 28 cents a share that beat the estimate the company citing strong performance in singapore and macau. you are starting to see that trickle through, becky when we come back, is it time to buy the regional banks we will talk about that next reminder, you can watch or listen to us live any time on the cnbc app

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truist financial is out with results this morning reporting earnings of $1.05. that missed the street's expectations of $1.14. revenue was 1.6 b$1.6 billion wh were ahead of estimates. fifth third's earnings came in 78 cents a share just shy of estimates. deposits at the bank were stable slipping by just 0.4% over the prior quarter. and meantime, salt lake city based regional bank zions reporting last night, the deposits there were down by 16%.

on the call, the ceo said the bank is taking steps to reduce risk in the commercial real estate business and as you can see, that stock off by 4.5% this morning. joining us right now on whether it is time to buy the banks, the managing director at webb bush. he upgreated western alliance from neutral to outperform and added it to the webb bush's best ideas list david, sounds like for some of the banks the all clear is kind of signalling at this point. >> that's right. western alliance is one of the more vulnerable banks right after svb went down. 14% of the deposits were venture back deposits. that was a natural target after svb went down. they've cured that and brought it down to, you know, 8% that's improved. when i say tier, it's because the deposit dz outflow to get it to 8%. the other issue is december 31st, they had 45% of the deposits were insured.

they improved that to 73% of deposits and then right after svb went down, there is a lot of concern around fair value marks. not only on securities but on loan values. and if the tangible book value was $3 that is down, you know, compared to $40 on a gap basis. they've improved that at march 31st to $17. lastly, deposits deposits did decline down $6 billion or 11% but since quarter earned, deposits are up $2 billion we've seen a nice rebound. with the stock trading at four times earnings before we upgraded it, we think it was worth the risk to upgrade. >> when you say improve the ratios, it's because a lot of those deposits went away, tune of $6 billion. but $2 billion that came in, where did it come from >> yeah. so, they sent some of the deposits have come back from commercial customers where

they've had conversations and really they want to partner with the borrowers that they're lending to, to keep those deposits that much more sticky >> does that mean that they have to pay much higher interest to keep some of the deposits or offer other sort of loans at lower rates in order to keep that business in >> absolutely. yeah it is happening to them and across the industry. funding costs are going to be going up across the board. right now what was getting priced into the stock was the potential for it to, you know, possibly go away but that risk is essentially off the table now. the other thing that they're doing is they're converting some of the deposits into and using a service for reciprocal deposits in which they're able to spread out deposits with other banks. now, we do think that's going to lead to higher deposit costs nonetheless, those deposits do

become insured and should be more stable than uninsured deposits >> you're right, the stock went from $60 or something down to $44. that's a big hair cut. it was pricing a lot as you said, the idea that bank was going to be under much more pressure from a profitability perspective with costs going up, what is a fair price for a stock at this point? >> so we increased our target to $50. and that's based on six times our 2023 earnings estimate the group is trading at 6.5 or 7 times. currently trading at five times, we think that we could see some appreciation in the stock. yet, it sold off significantly in fact, down to, you know, seven and change on that monday after svb went down. it had a really nice rally since then >> you added some other banks, too. regions, financial, t bank, new

york community bank. it's on your best ideas list is it the same thesis there? >> it's a little bit different for the others in that they, of course, all banks have gotten beaten up. but the theme here is the insured deposit level for the companies are above average and expect deposit levels to stay more stable. the other issue is we think net interest margins are locked in even if get a recession and interest rates come down both regions and m & t bank used swaps to keep the net interest margins elevated we think they'll perform a bit better than other banks in this environment. >> commercial real estate an issue at any of the banks? >> yes, commercial real estate is going to be an issue across the board. m & t bank does have an above average level of commercial real estate at 34% total loans. but we think that the loan to value ratios, being sub60% gives

them a lot of cushion. now could we see nonforemaning assets and nat pernonperforming go up? yes. the loss content should be much lower than what we see on the surface in terms of the nonperforming loans going up we're not expecting net chargeups to go up significantly. they will come up under unsustainbly low levels. >> david, thank you. >> thank you >> all right coming up, american express. they're reporting in the next few minutes. we'll bring you the numbers and reaction from wall street. later, two members of the problem sollers will join us on ghing ons to the debt ceilin fit washington. "squawk box" is coming right back

good luck. td ameritrade, this is anna.

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plus, what better way to celebrate 420 than with tequila? well, i can think of a couple ways tequila maker kevin hart will join us to talk about his latest deal the second hour of "squawk box" begins right now. good morning welcome back to squawk "squawk . thank you for joining us we have a lot going on a bunch of earnings are coming in u.s. equity futures up now red across the board dow off about 141 points nasdaq off about 113 points. s&p 500 off about 27 points. let's look at treasury yields. we talk about banks and regional banks and so much more in just a second right now the ten-year note at

3.553. the two year at 4.193. >> americans believe that money is safe in an fdic insured bank account. steve liesman joins us now another one -- another part of the latest cnbc all america economic survey results and the answer to that question which, by the way, that 69% number was everywhere in the media universe, steve. you know that? >> it's a good poll and excellent reputation people that do polling, they follow it. we did see it everywhere it is another -- i have to say one of the most interesting parts of this survey which shows americans are deeply divided on whether they think their money is really safe in an fdic insured account. en that represents a big change from the great financial crisis. take a look at this data here. just 47% of our 1,000 respondents tell us they are totally or mostly confident that money is safe in the event that

their bank fails 47% say they're somewhat or not confident at all that is a big drop from the 65% that were confident when we asked the question just a few months after the failure of l lehman brothers. democrats have not changed view. 62% are confident in bank accounts confident of independents and republicans falling sharply. just over a third of each group feel insecure. the public similarly divided over the fdic decisioning not to b back the banks 15% into the mosthonest of all day were unsure. and again, a big sharp partisan split. democrats 64% saying it was right. 25% saying it was wrong. independents, 36% right, 46% wrong.

you can see the big partisan split. independents leaning more towards the idea of the view of republicans there. it'st unclear why so man fdic insured accounts and why it changed so much. one difference leaning is not a bank it could come down to the financial ability of the fdic to provide insurance. or a general decline of trust in american institution that's affects everything from the supreme court to congress, fed, and now, joe, the fdic >> very good the beige book suggests that banks were tightening. >> yeah, there was really interesting kmen sayery. williams last night, you talked about this saying we still have inflation problem. we also have some credit issues. here's some of the details from the beige book conditions in finance are deteriorating sharply. that is from new york. that is the money center of the

country. san francisco saying lending activity fell significantly. then we had comments and comments from chicago as well. so there is that issue the fed is holding this thing up without the credit standards problem and this beige book suggests there were issues of credit available throughout the country. >> all right steve, very good we'll see you later. thank you. >> yeah. >> american express just reporting. the earnings coming in at $2.40 a share. that is a big miss the street was looking for $2.66. revenue about beat, $2.48 billion. beat expectations. the bigger news here is that the company is actually affirming the full-year guidance they're still looking for earnings of $11 to $11.40 a share for the full year. revenue growth still on track for $15 to 17% f you look at wht

american express did last quarter, a big miss last quarter too. then the company came out and said it's okay, we're still on track for the year amex does not give full-year guidance -- it doesn't give quarterly guidance i think this is a case where the analysts on the street look at it and divide it by four i spoke with the cfo, jeff campbell, at american express. he says, look, the way you should look at this is their revenue goes up every quarter. expenses stay fixed. they get more and more profitable as the year goes by again, you're not going to see this on a quarter-by-quarter basis, breaking down one fourth of it. you'll see earnings build through the quarter. >> but macro >> that's very good. >> this is how it is being characterized. the credit cards set aside more money to cover potential losses? >> it set aside reserves it has reserve that's came through if you're looking at this first quarter provision of

losses of $1.05 billion. >> that is more than -- >> not out of line with what the company expecting. they give guidance on an annualized basis they don't see anything different. >> they have the best clients and customers. >> they're having issues >> they're not if you look at it, they say revenue up is 22% from a year earlier to reach a quarterly record card member spending is up 16% and t & e, travel and entertainment spending, up 39% on an fx-adjusted basis. they saw record level of reservations booked. i spoke with the cfo he was watching the jeff kish i didn't want view from united who was on here. remember, jeff kirby said they saw a drop in bookings and reservations >> scott -- >> i'm sorry, scott kirby. jeff campbell is the cfo at amex

amex didn't see that at all. they have a huge travel reservations company they didn't see any dropping there. you might wonder what happened uni united does have a big san francisco hub. so maybe that was a pause in spending particularly in san francisco. they did not see it at amex. >> this reuters report, the growing economic uncertainty in the united states slowly begun to catch up with amex which had been relatively better position because of the wealthy customers, consistently high inflation rate, and a rise of our costs begin to pinch customers. >> that might be a reporter looking at it saying they missed it, missed expectations. >> just making this stuff up >> it could be that would be my expectation >> i'm trying to figure out what we can glean from this about the overall economy. >> no. in fact, what he said on this is that they are still looking at customer spending like crazy, traveling like crazy you may see some lower growth in areas just in retail spend and generalized merchandise out there.

but it is still growth they haven't seen things drop down probably not a huge surprise to see some of the things when you compare what was happening a year earlier in january, with you were still dealing with covid as asia opens up they just say that they're right on track with what they thought for the year again if, luke at what they're expecting for the remaunder of t -- remainder of the year, they look to make that up revenue builds and the baseline stays the same american compress missed last quarter by a lot the stock still ended up 10% at the end of the day we'll see what the street thinks as they look >> it's okay now that was the loss. the loss was in line with what they were expecting. >> with what the company is expecting. maybe not the street i don't know the street's estimates. >> american express first quarter revenue rise, americans keep spending versus reuters

>> right maybe it is chat gdp >> maybe it is >> -- chat gtp >> there are banks and bonds port portfolios joining us now is the former ceo of barclay's the do you have a take on what is happening with the american express numbers this morning >> yeah. i think american express will always be somewhat subject to the cycle. and my own view is travel is really picking up. i really see it. but to me, about american express, it's really the structural i think the brand is critical. i always say this. leadership matters e he is a really, really good ceo. very focused i'd be a big fan of american com express. i'm not surprised that provisions are up a bit in this cycle. if they say they're going to meet full year guidance --

>> all right >> playing in a golf tournament. >> you just said -- >> i play in a few golf tournaments. >> that is unrelated >> totally unrelated >> okay. >> full disclosure of how can you >> that's all right. >> bob, help us here with the banks though i think we're trying to figure out what is happening with the regional banks with the deposit base of the banks. and with the increased higher costs that a lot of them are going to have and maybe some of the losses they're going to be taking along the way >> listen, i think the banks are going to be fine, the big banks. >> the big banks will be fine. >> the question is why have the regionals not sold, not raised capital? there seems to be a strange game of chicken going on. >> the big banks don't want to buy them they think it's still a falling knife. and if you're an owner of one of the smaller banks, you think i

just got killed. my socks are getting knocked off. is there any insentive to sell at this price? >> last time i was on, i mentioned this is -- we think there is a great opportunity over time. there is no question about the importance to the u.s. economy we talked about that but who's going to invest? fll is clarity on what is the policy change in terms of deposit guarantees and the level of deposits? >> so now we go back to that do we -- do you believe -- this is what steve liesman is talking about, do you believe that deposits are guaranteed effectively? the u.s. government is doing this in perpetuity >> absolutely. i think for the near term -- >> this administration, maybe they won't >> the government is implied that the deposits are fine my view is we should make a policy of that either a higher level or a complete guarantee it's all funded throughout the banking system, fdic and the

insurance. what is the cost of doing that >> some of the smaller banks say i don't want to pay for this insurance. >> listen, whether it's a higher level or complete and funded through the banking system, i think it's good for the banking system it's almost a no-brainer to me we're kind of already there. the fed and treasury have implied that they're guaranteeing we might as well put policies in there. >> behind the scenes, what is happening to take it to the next step then? >> you know, i think we need legislation here i think we talked about a lot on the show right now getting the republicans and democrats together on what is -- >> okay. so we can all say we think this is a great idea. the chance that this is going to happen next two years seems slim >> it should >> and i think the other thing with the regional and specialist banks is they face both

structural issues and cyclical issues away from the deposit insurance. and as we all know, commercial real estate is one of the areas that most analyst was say we're worried about in terms of the impact of the cycle on them. and there is a significantly higher percentage of the asset base of regional and specialist banks as loans and higher percentage of that tends to be commercial real estate we really do have some structural and cyclical challenges >> the commercial real estate, we hear from a lot of people who are big in commercial real estate look, there is such a problem that there is going to be something that is needed, either government help or forcing the banks to renegotiate on terms for a lot of the leases. you see people, places like brookfield walk away in washington, d.c., from a dozen properties just this week. you saw them walk away from a couple big properties in los angeles. is this a situation that you think is so structural that it

will require either help or some sort of a program from the government or do you think is a situation where there is going to be big haircuts and other private money will will come in to buy those properties at much lower rates? >> listen, i'm no expert in real estate or commercial real estate i'm kind of following the trend. but it seems clear that the most analysts are saying one sector of the economy that's been impact bid covid and the changes in workplace and all that is commercial real estate and then when i think about the regionals and the specialists, i recognize that there is a structural issue there which the business plan, the business model, particularly with community banks, is much more dependent on the local economy and so much of that lending is to commercial real estate. i'm not saying that's wrong. it's just always been that way for specialists, community, and regional banks and if the analysts are correct, which is this is tougher cycle

for commercial real estate, it's going to impact the banks more >> so a serious structural >> this is the great thing about the u.s. economy and u.s. financial system there is probably a lot of money looking to come in on the dip. and -- >> i think what i'm asking is you luke tauk about the dip. if the first republic bank and the management of that company, do you want to sell to somebody at this price at $13.85 when th price is over $150 >> absolutely not. >> what is the incentive to create that deal >> you know, andrew, i go back to what i said i think for serious money to come in at kind of good levels for the bank, it's going to take some clarity on the policy around deposit insurance that is a single most important thing. it's implied we need policy

>> all right always great to see you. thank you, sir >> coming up, the problem solvers caucus, unveiling a framework to avoid a debt ceiling default. "squawk box" is coming right back

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welcome back to "squawk box. earnings coming in at 97 cents a share. revenue on $2.9 billion missed estimates of $2.7 billion inflows of $40 billion blackstone's president and coo is going to join us at the top of the 8:00 a.m. you don't want to miss that conversation stock off 1% this morning. at&t reported earlier. the company posting adjusted earnings of 60 cents a share a penny better than estimates. reve revenue $30.1 billion. total wireless ads, net ads were 5.1 million during the quarter factor all that in, stock down about 4% it is what it is, i guess. revenue a little bit below >> terrible.

barely below i'm not sure what other people are looking through. the stock is off 4%. when we come back, apple betting big on india does the south asian giant have the potential to become the next china? jon fortt takes a look at that with the country's potential and apple's push there later, actor, comedian aun investor kevin hart teaming up with global brand equities we'll hear about the deal anticipate talk to kevin about his many other projects including his vc firm hartbeat ventures we'll be right back. i'm telling you, coach staley, i could really get used to this retirement thing. ahhh! coach k, there's a goat here. the story of my life. no coach, there is a goat here! whaaa! what's this? a thousand dollar hospital bill?

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apple this week opening the first retail stores in india as the united nations projects that that country will will pass china as the world's most populous country about ten weeks from today does this mean that india is also passing china as apple's most important growth market jon fortt is here to weigh in. >> that's exactly what it means. india is already high stakes market for apple as a diversified the manufacturing operations with all the geopolitical tension around china, that is even more urgent it's not like april sl just showing up in india for first time, they're already assembling high end iphones in india. but too many cook says the expansion playbook is expanded there that worked in china 15 years ago. invest in manufacturing then stores then scale. apple stores are now cultural landmarks in retail engines boosting surrounding businesses. tim cook signalling that the country is more a source of cheap labor. it is also a place where april.

>> caller: build out the customer service experience and a loyal user base. look at the numbers and the opportunity in yanindia is enormous 610 million under age 25 a government highly motivated to create opportunity for a booming young workforce and that will will get restless without it >> all right india though is still just producing single digit percentage of all the i phones that are made. so, they're already more important than china >> well, yeah. on the other hand, india is not the great hope for growth yet. apple has done an impressive job scaling india production from 1% of i phones in 2019 to 5% this year getting from 5% to 10% and there to 20% is going to involve a different set of challenges. especially because the main things that makes india attractive, the fact that it's no the communist china, also means it's politics could complicate things in other ways. india is big and growing fast, it's economic policies get criticized for concentrating too

much we will wj the rich unless april. >> caller: position its expansion as a solution to that problem, risk being seen as a champion of the tiny percentage of the population that can afford to buy an iphone at the expense of the multitude it takes to make them china is messy and the population is maturing as we're seeing with the covid reopen now, healthy and growing middle class there is still the x factor for apple when it comes to growth. >> realistically though, india is the only country big enough, that has enough population to really challenge china when it comes to this? >> absolutely. it takes literally hundreds of thousands of people to assemble high phones. that's not goblg to change -- i ph iphones. there are cities built around iphone assemblies. tens of millions of devices constantly being assembled that doesn't get done simply the logistics are crazy. >> we don't think about what it means to supply the world. >> yeah. >> where everyone actually has one of these things almost

>> has there ever been a product like it with that kind of complexity, that kind of volume, at that kind of price? >> yeah. >> jon, thank you. good to see you. >> today is 4/20 >> it is >> i forgot. >> it is still early >> yeah. >> still plenty of time. still to come, new bipartisan to suspend the debt ceiling through december 31st. we'll talk to the co-chairs of the problem solvers caucus, the framework to avoid default that's next. plus, blackstone just out with earnings, we'll dig through the quarter with jon gray, coo that's in the next hour. kevin hart is coming up pretty soon that's kind of cool. ay tuned the you're watching "squawk box. this is cnbc

welcome back to "squawk box. kevin mccarthy moving forward with a plan to vote on the debt ceiling proposal despite a standoff at the white house. we have more on that good morning >> good morning, andrew. house speaker kevin mccarthy cod fig the speech into a proposal

to cap spending growth to 2022 levels it won't go anywhere beyond the house if it passes the house but with the release mccarthy said the sbaball is now in democrats' court. >> they need to sit down, negotiate, and address this crisis now that we've introduced a clear plan for a responsible debt limit increase, they have no more excuse and refuse to negotiate. >> asked yesterday to respond to the proposal, the white house said they won't negotiate over default and president biden him sn self dug his heels in. >> he proposed a huge cuts in imports and very important programs to millions of hard-working and middle class americans count on all the while, he and the mega officials are separately pushing for more tax give aways and overwhelming benefits to the

wealthiest americans >> with those sides inposition, the house problem solvers caucus publ published framework. there is a raves the debt limit in 2025 if budget controls are adopted and external commission is appointed with proponents saying this proposal does what both sides want by decoupling the debt ceiling and the budget process backers are drawing up text as a last resort in case the u.s. gets close to default. so when might that be? treasury tippic communicates a week or two after tax day to adjust but right now that is set for june 5th >> okay. thank you for that report. we're going to keep our eyes on all this can't look away, unfortunately >> wish with he could. >> we can. they'll handle it. >> it will come back

>> right now we want to welcome brian fitzpatrick, republican of pennsylvania and congressman josh gothimer, they co-chair the problem solver's caucus. thank you for being here today >> thank you for having us >> congressman fitzpatrick, we heard the plan of kevin mccarthy is this a plan that you support? is there -- are there enough people in your caucus to take that plan and get approval in the house at this point? >> yeah. thank you for having us. i think they eventually get there. it may require very minor tweaks but speaker mccarthy deserves a ton of credit as does the representative graves who was sort of pulling everyone together to hear everyone out. you know, it's -- nobody's ready yet -- read it yet. that is step one i think we're moving in the right direction. i think eventually they'll get the votes.

>> why are you putting forward this proposal if you think that proposal will get passed >> that's a great question so, basically what we do, what our caucus does istwo-paolutions we work in the backdrop. we support the negotiations. we let them have the negotiations we hope the negotiations are successful just like in the case of infrastructure. but in the case of infrastructure, those negotiations broke down. we had a solution at the ready we had a methodical way to go through it phase one is defining infrastructure, phase two, scoping it out, putting a pricetag on it ultimately, our solution thaet ended up becoming law. so we always do the same thing for all these big issues we do our work in the background ultimately, we're going to need a two-party solution anyway. we hope the work we're doing in

the background will be helpful. >> sounds like the ideas are reasonable, something that both sides should be able to agree to when you put out the idea of an external commission that is delegated with coming up with some sort of solutions for these things, i think people get ptsd and think about what happened when they put so much work on that commission, tried to come up with great ideas, and then in the end it got cut >> we're in a very different place than we were years ago we're staring at a fiscal cliff. we know our country with interest rates where they are, economy where it is, we need to do everything we can to address our long-term fiscal health. the idea, i think we agree on this, that we would literally put a full faith and credit of the united states at risk right now, the 401(k)s in risk, china and others over the debt ceiling makes absolutely no sense. we've got to put that asichltd but we also have to deal with our longer term fit call health

issues we can do both that's kind of the point but it's going to take outside experts and ideas. some people who are willing to actually make some tough recommendations across the board. and i think we should consider those in up and down vote which is what we proposed. the bottom line is right now what is critical is that -- and as bryan said, with he need to really look to our leadership first and say, hey, hopefully you sit down and work this out but we offered a backup plan in case things don't work out but what we all agree on is we cannot afford to default on the full faith of the united states and put our reputation and the world and people's savings at risk >> we have two simultaneous crisis we have to address both. we have a fiscal cluf thiff that we're coming up to we have a debt to gdp ratio that is 100%. 2000 it was 38%.

now it's over 100% we have to address both. the fringes, the extremes in both parties want to focus on one. our caucus is focusing on both. >> you all get along in your caucus better with each other than you do with the extremes of your party each of your own individual parties? >> our job is to get along with everybody. i think it's fair to say that we are more i had logically aligned with each other. >> i take that as a yes. >> i think i take that as a yes. >> yes >> we generally believe we -- i have to put the country first and figure these things out. that's what you all want us to do:that means, you know, that means we have to talk to each other and sit down and work things out we won't always agree on everything the we try to figure out where we can get to an 80% solution and move forward >> well, we wish you luck. and hope that this is something that will pick up traction how many people in the problem solvers caucus >> 64, 32 democrats and 32 republicans.

we have a one to one ratio by design everything we do is bipartisan >> we keep growing, becky. it's a good thing. hopefully it will be congress. >> josh, congressman, if you just wait it out, it's going away, right? do you see it being extended some way, the caps >> what do you mean wait it out? >> whether does it go away you don't have to do anything? isn't it sunset? >> he's talking about salt. >> sorry, 2 1/2 years. >> so you can wait it out. >> i'd rather get some back right now. that's what we're working on but at the end of the day, you know, we won't let the red states stick it to us. time for lower taxes you know that. a little more affordability in jersey. >> no one is pulling for you more, believe me especially when i get mail that says i got the great tax breaks a couple years ago really solving problems, that's what they do for a living.

>> fix it. >> yeah. >> fix it or forget it thanks coming up, a recap of this morning's earnings movers. and then comedian, actor and investor, kevin hart joins us to discuss his latest venture along with many other projects jon gray from blackstone will join us at the top of the hour "squawk box" will be right back. at the right time, all the time? not like that. like this. getting this beer... all over the world... right when they need it. yes, with ibm consulting, ai-powered software can help automate your supply chain— so beer can be ordered, produced and delivered more efficiently. so happy hours keep going. salud! and the beer keeps flowing. that's the automation solution ibm and a global beer company created. what will you create? ibm. let's create.

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welcome back to "squawk box. let's get you caught up on the regional reports ohio based key corp which is down now in the market, 3.5% they reported revenue and profit that's fell short of estimates unlike other regionals reported so far, quarter and deposit levels on a sequential quarter over quarter basis grew slightly by 1.1%. also, texas-based comerica, unchanged. floating between losses and unchanged. it reported better than expected profits. revenue picture not yet clear. deposits there fell around 9.4% quarter to end quarter earned. truist financial calm relatively

in premarket action. profits missed expectations. and we'll update oun zion bank corp which is down the utah-based lender reported that earnings were a miss and deposits were down 3.4% sequentially private equity, blackstone, shares are down just about 1% after mixed results off the top expectations revenues were lighter than forecast blackstone was hurt by most other things, a slowdown in commercial real estate we cap it off with a check of at&t they're down just about 4% right now. after it, too, reported a beat for profits but revenue came in slightly lighter than forecast free cash flow missed expectations it did reaffirm the full year pash flow forecast at&t did get some help as it added more wireless subscribers than analysts estimates. so andrew, a lot of them -- i didn't get through all the

regional banks, we'll try to get to those in the 8:00 a.m. hour back to you. >> dom, thank you for that >> we have a lot coming up after the break. making money, not a joke actor, comedian and investor, kevin hart we'll be hearing about the deal and talk about the many other projects including his vc firm, hartbeat ventures. and can you check out our daily 'rcong b wee miack from the heart of manhattan in times square back after this. a trading platf. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back.

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the world of celebrity liquors is a lucrative venture for those in hollywood looking to venture out into the business world. george clooney, dwayne "the rock" and a new brand stepping into the ring from comedian kevin hart joining is now on set, kevin hart, actor, investor, co-founder -- i wouldn't leave anything out. >> can you go on >> on and on and on. >> the list is long. >> and it's tequila. and president and ceo of global brand equities, welcome. >> how you doing >> good morning. >> i like how you do it. >> clap it up. >> you don't do it enough. >> you can't just say my name and not put no energy behind it.

right? >> the whole studio. >> yeah, something >> you have your entourage >> so, i love tequila. >> okay. >> i like it in a margarita. i like it just the way it s why this tequila it's a great bottle wlachlt is different? is it unique >> it is absolutely unique i mean, we've gone into a lane that we've -- it's allowed us to dominate a lane of tequila, category relatively unknown in international markets n mexico, the fastest growing premium tequila segment. when you look under the hood of this business, you soon find out that the foundations are there to build a long-term generational brand within the industry we partnered with the king of tequila, 11 generation tequila maker, largest agave grower locally. he's been able to help us create an incredible liquid at a new standard of quality and give us

the sales model that we need to create a long term business opportunity. >> i love it, james. well said. so well said, james. supportive partner >> there is premium tequila. it is kind of crowded. was there any discussion of anything else, any other liquor? >> when you say kind of crowded, you're talking about the world of alcohol in general, right so, having a new product, you have to have a reason. you have to have a why as a guy who embracing the love of at the ktequila, i'm not beh something i'm not going to drink. getting into this business is i have thought about for a while i was waiting for the right opportunity. the right alignment. james came along juan domingo beckman, president himself, and to not be a partner but put me in position to i have long term goal and that is generational accomplishment, generational real wealth,

something that we built from the ground up. of that's what i want. i played a long game i don't want the game of, like, oh, let's get something quick and let's do it and get out. i would love to have something that is on shelves for years that my family can have and really stand on. this here gives something quick and do it and get out. i would like to have something on the shelf for years that my family can stand on. it's a product that we built that's based off a celebration of your journey, celebration of love and hard work it's the true definition of myself and i think your every day individual, something that we all can grab and basically embrace. >> to your point, the competitive landskcape, there's over a thousand brands within the tequila space. >> you outpaced -- >> it's the most successful premium over $50 launch of a spirits product category-wide in

the last decade. >> how long have you been working to get into this >> how long? i developed this probably in about four years i was probably sitting in the wings waiting for the right thing to do. >> and the people you pitched yourself and there were other people pitching you? >> people were coming to me, but it was all about throwing your face on a product and having your face on a label -- >> jennifer lopez just took a big hit for launching an alcohol brand when she's supposedly sober and the issues she and her husband bhave been through. >> i was part of the process the taste of this liquor is something i was very adamant about. i was a pain in the ass, for lack of a better word. if it didn't fit the world of my liking, it's something we didn't

use. the alignment of juan in this team and james allowing me was pretty dope. he feels that his belief and his palate is what we were going to be following is what we're going to do and it took us a while to get there and the response has been unbelievable. that's the key thing when you're talking about your liquor. the taste, the response that people are walking away with if it tastes good, you're going to be in play. that's what i'm most confident about. people are coming and they're staying because of how good the liquor is and that means that the time is well worth the wait. >> you're all over the place heartbeat ventures, your heart must swell up with pride jpmorgan that's a pretty good -- >> partner

i've been in partnership with jp mo morgan chase for quite some time watching their success gave me the ability to create my own we were able to align ourselves with places like jp morgan chase to give us credibility looking for the right ideas, the correct alignment with entrepreneurs of today and tomorrow and, you know, to really open a door that's been open to me >> we need more time to talk about everything you do. you're with peacock. tell us about some of the other assets it's valued the 650 -- >> so you have heartbeat ventures you have heartbeat, which is my entertainment ecosystem. we are a studio. we are a self-financed studio

now and we're in the world of developing our own i.p. and we're a business of scale. so creating televisions, movies, scripted, unscripted >> is your goal to keep that independent or do what reese did with blackstone? >> we're in the same ballpark as blackstone, heartbeat, westbrook. there are a few -- >> how much of your business now is that? >> all of my businesses. >> the production side and tv side versus some of. vc stuff >> it all surfaces one another you have to be a tree and all of the branches have to connect somehow. all of the things we're starting, you can use my portal of access, advertising, et cetera that machine goes through

television, radio the whole world. embracing something new and being a voice behind it is something i can do here. making a complete circle is -- >> we have to talk about a brand that you're wearing right now. a lot of people know about it -- tom patterson. >> you're wearing tommy -- the underwear? >> yes, i am >> you're in the back looking at my underwear >> you don't need to say it like you know my drawers. you asked in a very professional manner the way he presented it, let's just clean it up whoa man you asked me and that's how you know i just want to clean that up >> i'm thinking of new products just to put -- just to use the name heart again what is the --

>> heart house >> and you got heart to heart. >> heart house is my plant-base pd plant-base past food chain. when you look at fast food, everything is the same come eat your heart out with us the underwear only came up because you're an investors. >> clean it up >> not talking about your underwear randomly >> you said eat your heart out >> with a last name luke heart, would you not use it >> my last name is quick and i have no way to come up with the things that you came up with >> all the things that you're

missing, i know how to celebrate correctly. >> eat your heart out, people! >> with all the experience and the vertically integrated it system that kevin's built in his day to day, when he's involved as a co-founder and a partner in the business, he's a hands on man. the face, the celebrity, the i.p., that's great but the day-to-day business kcommitment worker, the dedication is the secret >> you guys all have an amazing heart. i feel that here you guys are getting cases i'm giving us cases. >> what? what >> you're going to get cases and i want you to celebrate your hard work correctly. >> i want some lime, too

get me some limes. >> limes limes? >> what! oh my god! >> those days are long gone. >> coming up >> eat your heart out. >> blackstone president will be up next talking about reese and all that we'll do that next plus the latest read on jobless claims take a look at future. we've got red on the screen so maybe that means you've got some heart or maybe blood in the water, i don't know.

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>> good morning. another big day for earnings in moments we'll talk to blackstone's president and we'll bring you details and comments from elon musk ahead. and treasury secretary janet yellen set to address u.s.-china tensions today and the former ceo of xerox and a former top defense official. the final hour of "squawk box"

begins right now good morning welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin we could use a drink maybe futures down 200 on the dow, nasdaq down 136, s&p down 43 i don't know what to make of a lot of this. treasuries 10-year yield has come down a little bit 3.56 and the 2 year at 4.2%. >> let's talk about two of the biggest earnings movers.

amex earned $2.40 a share, well below the $2.66 that the street was expecting. revenue beat came in at 4.82 billion above the 4.03 billion that the street had been expecting. it's a firming full-year guidance i spoke with the cfo, jeff campbell he said this is a situation where they hand out annual guidance the street takes a look, break it is down, divides by four and says here's what earnings will come in. they're still talking about how they anticipate coming in with the numbers coming in strongly they say revenue is expected to bill 50 to 70% during the course of the year and you will see greater profit through the remainder. year they are confirming about $11 to

$11.40 of earnings per share they haven't seen signs of weakness on anything travel was a gain of 39% year over year they see no signs of weakness when it comes to any issue on travel entertainment and otherwise and things are basically what they thought a year ago still looking at some of those very same issues. at&t reporting first quarter adjusted earnings of 60 cents a share. it beats the street expectation by a opinion owe the total and that stock right now down by about 4 1/4%, i would say because cash flow came in lighter than expected the company i think believes that that will reverse, that part of this was timing. they had higher capex spent in

the quarter than and ticipated. they think that will reverse during the course of the year. we'll see. >> that's tough. you have a five-year chart >> one year it is higher, if you're looking a the a one-year chart on at&t shares, year to date it's up >> one-year chart is like flat it's $19.43 and today we're at $19.70 or less >> for one year it's up 1.4% for the year to date it's up slightly for the three year and five year, it is down >> we're to date, it's been a very, very tough road for everybody on at&t. >> and blackstone did beat on the bottom line. there's a lot of news we got to talk about in the real estate

world. for the numbers, john grave and chief operating officer. let's talk about these earnings and i want to get into the world of commercial real estate, which is where you originally cut your teeth and is the issue du jour when it comes to your own firm and the economy and everything else >> andrew, it's great to be here we're incredibly proud of the quarter we delivered, particularly given the backdrop and what happened in the banking space. we protected investor capital, which is the most important thing. we also saw 40 billion of in flows, as you noted, more than 200 billion over the last year and for our shareholders we delivered nearly a dollar of distributable earnings, despite fees being down. i think what it really speaks to is the strength of our model

we have be minimal net had at the time we're not forced to acquire assets and we have a ton of fire power. we have nearly $200 billion of dry powder investors have given us we like that in a dus located market today >> let's go go to the real estate piece of this there's lot of focus, specifically about the flagstickship elles is it the -- flagship >> we think about it as where you invest matters if you look at the traditional u.s. market, which is less than 2% of our overall portfolio, there the fundamentals are very challenged, unprecedented

weakness they can see rates that are 20% rental pressure and investors and lenders are very cautious. but if you widen the aperture, you look at things like logistics, there you see almost unprecedented strength that's 40% of our global portfolio and their vacancy rates are less than 2% rents are running up double digits, you're seeing market to market leases up 40 to 50% it is a diverse area in real estate and interesting in the sector revenues grew 4.9% >> i assume somebody calls you and says, i look i want to out

this, you've already put up walls with how much you can withdraw at any given time, which suggests it me there's a lot folks wanting to withdraw. >> 90% of our customers elected to stay in and 94% of our overall customers, redemptions are down from we've designed a product that's semi-like wid, where we can pr it can investors, where we don't have a dynamic lookbank and that's what's mapped and the performance dereflects where we reflect cap tam and we've delivered 12% since inception six and a quarter years ago and outperformed the public index by three fold during that period, by 2,000 basis points tlas year.

if at this point you would have gotten back the vast majority of your money et but protects returns and that's exactly what happens happening >> when you think about the commercial real estate space and specifically office and i remember when you bought one of the big office deals from sam zell, many, many years ago, i wrote about it and we talked about it since not just for your own investments but how we hud about that thats is somebody who has financed off and other commercial real estate del >> it a different world as soon as you it there as been -- covid

and work from home has reduced demand significantly and now we're facing a more challenging hiring environment i think this will take a while to play out. i think newer marks are better but in traditional temperature is leverage levels are much low are than back then is he so they twrchl and also office at a percent of their balance sheet is less than 3%. is he there will be losses taken. messed will be ander wise i think it will be man andable through the system and the rest of commercial real estate, student housing, hotels, logistics continue to be pretty strong but definitely head winds for traditional office

>> would you ever want to own a bank sfwlu know, i think owning a bank is something that's challenging in the united states this i think banks are interest rates at higher levels, money market funds and that is leading toity posit and earnings pg fchgs and it probably an yaur in glrk that. >> are you of the view that the banking crisis and i have sort of air quotes going on here is over it we have one where trm going back to the last financial crisis, back then we had real credit issues people were let ffrm this time the credit is prit

efwd if you look atity fault rate, that your fill at very low levels we have a nice wrach between asset and liabilities. so i think in that sense they brought some stabilization, they've given confidence around uninsured deposits, but i think the pressurin of is that banks should be commonwealthing increasingly tax, much less likely to lend to consumers and businesses and i think will result in more slow down, less capital available, had, over $300 billion in credit in insurance as. >> totally different subject we were talking about reese

witherspoon and at&t, by the way, which made me think of warner discan havery temperature what did you think about entertainment business right now that seems to be challenged, and reese is killing it. many it like there's going to be less money to with tn. >> well, i think we're coming toward that boom period where cop assumption really strikes. i think long term, even though we're consolidating now, the demand for content will continue to grow. i think about when i grew up you could watch three, four stations left-hand and we can watch and listen to things all the time. so high-quality content, we think there will be a ton of demand and that our media

company is well positioned we are a solve and so i think the media business will be parkbut if you make it, people are going to wachbt to watch and want to listen >> the last thing he told me, it a reese widthspoon spgs,s it on ap f and we've been talking about it >> thanks so much. talk to you soon, john >> tack kir. again, yes, kwen been t as we head to break, check out a few

more of this morning four-year revenue above estimates and high want con kimmy connector stay tuned, you're watching "squawk box" on cnbc ♪ ♪ do the work, before the work. bodyarmor lyte. more than a sports drink.

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shares of tesla are under pressure and phil lebeau rejoins us with more hey, phil. >> joe, we talked about this really since the earnings came out yesterday after the bell it all about gross margins the reason that's significant is tesla said we expect growth margins to be north of 20% take a look at what they came in at automotive growth margins, 19% even, well below where the expectation was. consensus was just over 20.5%. and it comes down to how many times they've had to cut prices on their models in china, or

here in the u.s. elon musk said we will do what we need to do to keep moving the metal. >> we want to make as many cars as we can, despite this being an uncertain macro environment. it's a good time to lead further and we'll continue to invest in growth as fast as possible >> they did reiterate last night that they expect to build at least 1.8 million vehicles earlier this year, their guidance for deliveries was 1.8 million vehicles that's gave a little reassurance to the folks listening to the call but the bottom line is the 1.8 million vehicles that they plan to produce, that's a minimum of what i think the street is expecting at this point. here's musk talking about his outlook for the rest of this year >> from a production standpoint, if things go well, we've got a shot at 2 million vehicles this year, but that is the up side

case and we feel comfortable with 1.8 and we'll just have to see how this year unfolds. >> and that gave a little bit of reassurance to tesla investors look at shares trading at $167 a share. you will see a number comments from analysts today and five firms, morgan stanley, citigroup, rbc, wells and jpmorgan have all lowered their price targets. i wouldn't be surprised if you see a few more doing the same thing. what is the bottom margin now that we're below 20% >> for more we want to bring in mark fields. he's the former ceo of ford, who serves on the boards of hertz and qualcomm he's a former cnbc contributor it's a little reminiscent of what amazon would do from time

to time, making sure they are going for growth over profitability. >> listen, you saw from musk's comments yesterday, they're going to sacrifice profits for growth i think the way they're looking at it is with the market growing for evs pretty steadily right now, it's a bit of a land grab and he wants to expand his number of vehicles on the market before a number of competitors come in because there's an advantage to having a larger car park, where it's more cars in service businesses or you can sell more cars down the road if you ever get to autonomy it's using pricing as a cudgel >> you like the strategy >> well, you know, i think that there are a lot more worrying things coming out of this

earnings call than positives obviously revenue was up about 24, 25% versus last year but below their long-term objective about 50%. profits were down, margins were down, inventory is up and plant utilization is where it needs to be and negative cost flow as well as input up when you look at pricing and using pricing to grow demand, you got to ask yourself how low can you go alternatively, they do know advertising. and i'm sure there's debates inside tesla right now whether they should do advertising versus continuing it cut prices and reduce margins >> and, look, i guess part of this comes down to he wants to hit these numbers, 1.8 million vehicles they're expecting to make this year, maybe as high as 2 million. you want to make sure you move those cars, too.

ful you have to sacrifice in the short term, is it worth that gain, i guess? there to your point, both what you just mentioned and what phil mentioned before, they talked about production numbers, 1.8 million, 2 million you have to talk about actually selling vehicles and, you know, at the end of the day i think elon sounded -- if you just stripped off that that was a tesla earnings call, you could put yourself in a time machine and go back to what the domt automakers were making 10, 15 years ago, moving the metal there's a sen point in which you have to reexpanding their product line, improving the kt lynn so i think from an investor standpoint you walk away from the call with questions around what is the real ev demand, at what cost and what's going on

with their pricing strategy? >> though if you're looking at margins, not the margins the street was anticipating and what tesla told them to anticipate but even at 11% that's quite a bit better than most of the old car companies. phil told us earlier that number is closer to 5 to 6% >> you're slightly right their operating business is about double gm or ford's. when you look at the value going forward and a lot of that value igs was based on growth and high margins, the stock is going to react the way it was going to react. if a competitive standpoint, the established they know how to drive scale and reduce costs of

time but also at the sim time, there are some unintended consequences here, bucky, around consumers basically saying if there's been six price cuts from the beginning of the year, i'll just wait toify been because the original values of your vooks just went down a lot that's going to matter when they come back to the market for another vehicle. >> thanks for joining us today >> coming up, and we'll expect to hear from janet yellen later today. and ceirlao s burns will be with us. and stay tuned you're watching "squawk box" and this is cnbc ♪ old school wisdom, with a passion for what's possible.

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welcome back to "squawk box" on cnbc. we're just seconds away from jobless claims and philly fed data jobless claims recently something to really keep an eye on here's where we are. we're down less than 200 points. that's, believe it or not, an improvement. we're down 184 now on the dow. nasdaq off 123 kind of weak on a relative basis. and you can see the s&p down 31.

the 10-year note is below 3.6% this morning, 3.57 the 2-year has moved all the way back to 4.21% at this point. rick santelli standing by at the cme in chicago we're looking forward to these give us the numbers. >> keep an eye on them and on those big benchmark revisions a couple weeks ago they were huge here we go, initial jobless claims for the week of april 15, 245,000. it's a bit higher than expected, and 245,000 would be the highest going back to, well, the second to the last week in march when it was 246,000, but do coop in mind that much

it was hard it stay under 200,000 prior to those hp well above the $expected and on continuing claims, 1,865,000 is the highest level, buckle up, since the last week in november of 2021. you could see yields moving a bit lower. that makes sense the fed's going to pay attention to this. preopening dow futures, well, not so much activity at the moment as rates drop a bit and philly fed now the at minute and when you're looking for a number around minus 20, that means the last ten out of 11 have been negative as well at

minus 31.3 would be the weakest level, going back to minus 43, which was right in that covid period 2020. but if you're looking for the fed to be less grief yesterday we had a 20-year bond auction. the point is that the long maturities bumped up against some resistance joe. you might want to look at yesterday's closing yields as someone good resistance and some of the germ and ppi, month oaf month down 2.6%, much, muchl about fchg not that everyone's inflation is going to be the same it certainly isn't some companies spent so much on

co individual and china isn't one of those >> germ prm steve liesman joins us live with more. did you know that or is that news to you. >> yeah, one of reasons we let me give you something else that's out there, joe. the prices paid indengs inside the philly fed was pretty good it was the lowest reading since mid 2020 declined for the second consecutive month. the employment headline was a little bit less negative that's kind of interesting and i want to take a longer term look here. and we take a look on the percentage bases, and it is up a tick to 1.3% but you can see there what it is what when it's in a recession,

up knee 3%, 4% but it does sort of rise during the recession. hard to tell if this is the beginning of that kind of trend or whether or not we're, i don't know, kind of back to new ormal here we're well below the levels that you would have if you had a recession here but something that rises in the middle and peaks towards the end of a recession. so just something to watch, joe. >> yeah. let's do that again, that thing on the right >> yeah. >> all right when we come back, treasury secretary janet yellen will be talking u.s.-china competition today. we'll talk u.s.-china competition next in an interview you don't want to miss "squawk box" will be right back.

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welcome. >> thank you >> good to be here we hear a lot of red hetoric ard china right now. feels like more the u.s. toward china and china forward the u.s. >> i don't know what's happening, what they're saying in business circles in china, but in the united states, china is probably the top issue that businesses are dealing with, boards and ceos are dealing with even if you don't have a business center in china, it's an area of high interest and high concern one is it's a large population that we want to have access to the sell our goods and services.

obviously we want that competition for that space to be fair, balanced, et cetera. up until this point it has not always been. that's one of the reasons we pay so much to u.s. policy was government actions in china. the second is we want to make sure we protect our national security interest. big deal, ceos are interested in that we don't want to give away things that would endanger our future and there are areas that we should work together on, climate for example. human health and ceos and boards are spending a lot of time on it. >> would you prefer all these u.s. businesses are doing business in china or not right now? >> for 30 years we've been telling business invest in china, invest in china, help engage them, make them a responsible stakeholder. and the last ten years with the rise of president xi, china has really changed its stance, adopted a much more assertive,

aggressive posture around the taiwan straits now we're not decoupling, that doesn't make sense, it's not really possible. but on areas that touch on national security, our technological competitiveness, in those areas we need to start disentangling. a lot of businesses i think find themselves kind of walking in a mine field >> should we do one and not the other? this idea we could decide we're going to block tiktok, for example and what the ramifications could be on a starbucks. things you may think of as being unrelated, but if you're the chinese government, you might just decide people going to relate everything to each other. >> you'll see china will start taking actions of retribution in some ways but they are trying to project this message of post-covid, we're open for business, we want foreign

investment, we want your investment here in china they have to walk a line, too, to not chill that environment and scare off western businesses >> and we have technology that is useful, valuable and a consumer base that is attracted to them as well. 100% we're going to run into some unclear and very risky areas. >> by the way, you're on the board of uber. uber effectively got out of china. >> we -- we -- >> the question is do you want to be in china china is saying we're open for business, please come. a, do you want to be there because you're worried about what china may do to you and, b, are you worried about being there because of what america may do to you? >> the answer would be yes to most businesses. the answer would be yes. everybody we advise wants to be there and actually is desirous

that we can do that sooner than later if they're not there and grow our presence. but it has to be under this context of national security and fair competition if you can't get it there then i think we're going to have to settle for significant less access to that market. >> it is very hard to answer the question abstractly. each business has to really do an assessment of what are their supply chain vulnerabilities, t their dependencies if there was a crisis oaf taiwan, how would that play out and that's the scenario and emp red teaming that we're doing to help and a half fwat this. >> maybe you can address it, there a huge coming out of

washington, d.c. if you do this, you're putting yourself in a little bit of a perilous position >> the politics of this are really hard because the tougher you are on china, the better you are politically. as we head into our own presidential election sycycle, that's going to become even more the case that shrinks the political space for biden to do it on climate and future pandemic and all of these other areas. >> and i do believe that industries, apple clearly one, is -- they are at risk, more at risk thats to not avoid the fact or negate the fact in a market is attractive, that they will deal with those risks if the return is high enough and i expect we will make our way. >> can you do the scenario

planning publicly in front of the audience right now for taiwan you're a big multi-national business in china, call yours apple, nike, starbucks there's an invasion in china, what happens >> first of all, i'm not sure if it's an invasion and the united states is a b blockade thailand is an island. >> let's say they try to take the island >> so what you have to think through then is how -- what will that mean for your supplies, you know, produce 50% of the chips, 90% of the advanced chips in the world. if that fets shut off, several analysts have said a $ $2 trillion impact on the economy

what if the u.s. respond how does china return? how do they receipt leverage to avoid sanctions and -- >> but you're talking now about supply chain the other piece is thinkwhat happened with ukraine and russia mcand they said we can't be here anymore. and before it was a sanction that was just simply the political and social pressure brought to bare. >> i don't think the companies have the flexibility they have in taiwan and russia literally we are dependent on this island for chips that make just about everything that we run in the world i think if this ever happened, hardship is going to be there in the near term. >> meaning we're willing to have principle if it doesn't cost us too much >> that's right. >> the name of the game is

deterrence how do with that he wakes up not feeling confident he could pull this off, that it could be too risky and costly >> and grade the administration in dealing with this issue that you're talking about >> b-plus. >> i would give them an a-minus actually i think there's always more that can be done but i think they've played their cars really, really well, investors in the drivers of our competitiveness and aligning and they've made tremendous progress asking for dialogue, more connection and communication and cooperation and they've been given the hand. but i think they've been trying. >> thank you to you toet >> bplus, a-mine us?

>> never mind. those are both ivy league curve grades anyway. >> ivy league curve grades >> everyone gets an a at hart. once you getin >> right now as we head to a break, let's look at some of the morning's biggest premarket movers you have at&t down by about 5%, american expressow dn and blackstone down 1.6% and dr horton up by about 6%. you're watching cnbc

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let's get down american express, because they said full-year, is looking good i'm not worried about the charges they took. i see tremendous spending, by the way, in american express t&e is really high amazing airline, but that's the airline fares going up it's not something that the fed would want to see. this was a spend-a-thon, and it just shows you that people are -- they're low on money and short on time, and this is still, again, covid. it's the outcome of people being cooped up and not being able to do what they want. at&t, the cash flow there, i just dislike att for ages, and every time i try to like it, it turns back it comes back and bites me, and i just don't see anything there that you need to own i think t-mobile is the one to win in that segment.

>> we're going to have a guest on in a moment who says rolling recessions are something >> rolling recession >> rolling different places not -- it may happen in different pockets, different sectors, different parts of the country, but may not be a full-fledged recession that we finally hit. is that possible >> i mean, i think there are areas of the committee that are certainly weak, and there is truth that there is commercial real estate weakness, but rolling recession? i need to see more than just commercial real estate that is really being hurt. i mean, when you look at dr horton, the numbers are great. when you look at the spending, american express, they're really terrific when you look at some of these -- of the pharmaceutical companies, avid labs is absolutely fantastic, and you look at bed bath & beyond, lost 500 stores, who cares. y i don't see the rolling recession. i see that business is a little bit softer, but it should be that's what the fed's been trying to do >> very good all right, jim, she's coming on right now. we'll see you in a couple

minutes,nde' brit ck a wlle ghba with what you need to watch ahead of the opening bell on wall street.

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atms in fresno? fres-yes. encinitas? yes, indeed-us. anaheim? big time. more guacamole? i'm on a roll-ay. how about you? i'm just visiting. u.s. bank. ranked #1 in customer satisfaction with retail banking in california by j.d. power. welcome back to "squawk box. it's a big day for elon musk, aside from us talking about tesla earnings on one of his

favorite days, 4/20, april 20, twitter said to remove legacy verified blue check marks. these used to be handed out for free to notable accounts now anyone who wants one will have to pay. meanwhile, musk's spacex tried to launch their biggest rocket ever the window opens at 9:28 a.m. eastern time and musk just tweeted the launch is on track for about 35 minutes from now, and we'll keep our eyes on that, and i don't know, maybe you're going to have to get your credit card out, joe, keep your blue check. >> yeah, no. i'm fine without it. struggling at retailer bed bath & beyond reportedly getting closer now to bankruptcy, it says here. "the wall street journal" says the chapter 11 filing could come as soon as this weekend and cited sources who said the company's falling stock price is severely crimping its ability to raise needed capital shares are trading around 35

cents. after starting the year -- stay with us. its market cap stands at just over $200 million. it's just over half an hour to the opening bell on wall street. joining us, the cio at sand hill global advisors. i found some good stuff you're saying here, brenda. you think that maybe -- i mentioned it to cramer -- we're seeing pockets of slowdowns, whether it's a rolling recession or whatever you want to call it, but that might allow us to maybe avoid a full-fledged recession and maybe 2024, things start to improve in terms of multiples and earnings growth? >> yes, absolutely i mean, i think we've already seen signs of this concept of rolling recession, which ed has been the most vocal about talking about this, but the services industry was in a recession during the pandemic years. now we have a lot of those pandemic beneficiaries that are in a recession if we look at what's happening in semiconductors, for example, it's clear there's a recession

happening there. so, i think because we've seen all these pockets of various parts of the economy in recession, housing, you could argue, is in recession too at the moment we may not see a full-blown recession, but it doesn't mean that we won't see an economic slowdown from here, which i think is likely, especially given that even if we take everything that's happened out of the banking sector, and look at just what's happening with the yield curve, that is not a friendly environment for banks to lend in so, i do think we'll likely see some further tightening of financial conditions, and that could cause further slowing, but perhaps not a full-blown recession. but i think as we look forward, as we get, you know, through the summer months and start to look to 2024, to value the stock market, we can really gain some confidence that 2024 is going to be a more normalized year. i think we can make an argument for further upside for the s&p 500. at current levels, though, it's starting to look a little rich

we've seen, you know, a lot of resilience this year, and that's encouraging. we think we could be in for a little bit more of a choppy environment between now and kind of mid-year as we look forward >> you do, for the first time in a long time, think that bonds are really attractive and could match, maybe, the returns in some sectors of the equities market with less risk. >> absolutely. you know, that, in our view, is kind of the biggest change we've seen over the last year is the attractiveness of bonds, and when we look at, you know, what kind of return could we get from bonds, we can make an argument that you could have a 7 to 10% return and that could be the case too this year for certain parts of the equity market when all is said and done we haven't seen that happen so far this year, but if we have a period of volatility, if we have ongoing concern about the health of the economy, we think that bonds could absolutely provide a decent return in addition to

balancing some of the volatility >> all right, very good. we will see. that would be a double whammy if we did, i guess that's what you're talking about, if we did see a little bit -- we're talking zero flat earnings year over year in 2023. next year, what are you looking for, for 2024? >> next year, you know, i think we could be at that, you know, closer to 250 in earnings, for example, but it really depends depends on how we end this year. so, i think there's still some uncertainty there, but if we fast forward to mid-year this year, i think we should have a little bit more clarity, just on how things will play out in '24. >> okay, brenda vingiello, always a pleasure to have you on we'll get a final check now as we head -- we're heading out of here now what was -- i hope we don't have a heartbreak in the markets. i'm still coming up with heart things there are so many. it might be the greatest last

name for products that you can use. futures down 181 the nasdaq, down 113 s&p, down 30 or so 37 million followers on twitter, that guy be nice if he'd retweet -- we're just trying to help this tequila. not going to kill him to retweet it join us tomorrow "squawk on the street" is coming up next. ♪ good thursday morning, with welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange premarkets lower on a wave of disappointing corporate results from several financials, tesla, at&t, and then some weak eco-data, philly fed, worst in nearly three years, continuing claims highest in almost a year and a half our road map begins with that tesla tumble, posting its lowest quarterly gross margin in two years. elon musk says he will continue to put sales growth ahead of