good thursday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla and sara eisen. setting the agenda, bernstein remaining bearish on tesla after what he calls a meaningful shift in rhetoric. plus, citi's nathan sheets pushing back the timeline for recession in the u.s he joins us to tell us why.

regional banks, an exclusive with ceo of synovus, seeing deposits rise in this quarter. we'll start with stocks. recovering s&p 500 lower by 0.3%. the nasdaq down 0.4% we were down almost 200 points at the last of the last hour renewed focus on the slowdown. philly fed posting eighth straight lowest month. jobless claims rising more than expected continuing claims hit the highest level since november 2021 existing home sales weaker, now down 22% from last year. leading indicators falling more than 1%. then spotty big cap earnings from the likes of tesla and netflix and the fed's picture for may meeting. gets a little murkier. fed speakers continue to say, more hikes are ahead let's bring in cnbc senior markets commentator mike santoli.

they're more worried about inflation than recession they expected the economy to feel some pain that's what we're feeling. >> we're seeing it there's no denying the fact that the landing looks less soft, if you pull that data together. the yield's down, the dollar softer it is fitting into that mode it's not really that different from the offsetting currents we've been trying to navigate for a while which is a fed that's never going to send the all-clear until it's utterly obvious. the big question is how the market digests it. we've been digesting and rotating and retreating. we're up off the lows. nine of the last ten days it's been profitable to buy the morning dip until the close of that day so, you've been flat on the s&p, even though netflix was down yesterday, it's up today morgan stanley is up today jpmorgan is up today you have all of these offsets working so far in the market's favor. semis down 5% this week and the s&p 500 shrugging it off can it last is the big question, or are we using up a lot of

energy to churn water? >> are you sensing any degra degradation that they were better than feared >> no, broadly speaking. when you have a week when earnings are better than feared, people bid up the stocks in advance and you get conditioned to everyone's going to have a beat it's still messy we're still looking at year-on-year declines. still looks like third and fourth quarter numbers probably have to come down. also, i can't find a human being who has fourth quarter numbers and i can't find a human believe the market forecast of rate cuts to come. if they believe it it's because they think the economy is a disaster they don't believe it and think that's a reason to buy stocks. >> what does it come down to does it come down to earnings? does it come down to the inflation forecast how deep of a recession we go into in. >> i think the answer is a lot has to go right along all those fronts yeah, sentiment is negative. we have this reservoir of

skepticism peak inflation, that's in had the -- >> it's not about peak inflation but how fast it's coming down. >> the philly fed -- >> and facebook, lots of evidence of moderating prices there. >> if you're worried about a credit crunch f you're worried about a price war in autos that's torpedoing tesla shares, you should be more confident. >> this deflationary story in autos is developing pretty quickly isn't filtering down to a cpi. maybe because we moved down. >> to a large degree i think it is we're looking at services ex, housing inflation, which is what powell told us to fix our eyes on. >> every category is so unique in the post-covid. they have the semiconductor shortage. >> you're absolutely right it's happening throughout the economy. home builders at a new high today because rates are down there are structural things happening in the economy that

seem like it's tough to hear the story. >> it is for investors to get a clear picture. >> let's hone in on tesla. the stock is sinking after the company reported net income and earnings decline by more than 20% amid recent price cuts elon musk standing behind his decision on the call last night saying he is committed to prioritizing sales growth ahead of profitability he also highlighted his delivery goals for the years. listen >> from a production standpoint, if things go well, we've got a shot at 2 million vehicles this year that is the upside case. and we feet comfortable with 1.8. >> our next guest says while those targets are achievable they'll come with sacrificing on pricing and margins.

>> the company said they won't go below 20% gross margins for automotives and they came in below that already the first quarter, tesla said it wouldn't go below that level for the year with further price cuts just being announced this month, they're going to go even lower so, it wasreally a question of magnitude. there was some narrative that commodity costs were coming down, so even though tesla was cutting prices, maybe margins wouldn't be as bad as investors thought. ultimately they were and they came in lower than tesla's guidance and lower than street expectations that was really the incremental news for investors as a result, earnings estimates have come down materially for next year. i think in november of last

year, people were thinking tesla would earn $6 this year. since those estimates today are under $3 >> so, you're underperform, price target 150 you've been underperform how long on tesla? >> we had a sell rating for a couple years now >> so, at this point, how much is this part of the thesis, the bear thesis? >> look, we think risk/reward is much more balanced now we had a pretty consistent price target of $150 for two years and the stock went to $400 and our prediction has been when we look ought over the long term and try to value it on a discounted cash flow, $150 is the rice price target. we're obviously much more comfortable with the price target at $156 other than when it was over $400 we are going to see further price cuts china has very limited lead time tesla has not cut the price

there this quarter like it has in the you know and europe we think that's likely and not baked into numbers i think as we look into next year, tesla wants to grow another 30%, 40%, 50% next year. the challenge is it doesn't really have anything new coming to market. it has the cyber truck but that will be low volume how will tesla grow again next year it's probably going to put more pressure on margins. the near-term setup is pretty tricky for tesla we i think it's more likely numbers may go down rather than go up. that usually doesn't serve a stock well in the near term. on balance, longer term, we feel a bit better with the stock at this level relative to where it was a year ago. >> we had you on in early april, toni at the time we were talking about how rivals would respond to the price cuts. you said incumbents are pretty deep-pocketed and not likely to back down. that's kind of exactly what we heard from at least renault today. >> yeah.

so, look, if i think about traditional oems making the tradition to electric, investors are really putting most stock into how successful they are in their ev transition. and so if the ev transition is going to take more money to get there in terms of bigger losses, i think the oems are going to go along with it because that's the key metric for investors today is how quickly can you tradition to electric. so, even if -- if margins have to be lower, i think most oems are going to say, so be it we cannot compromise our ability to show we can make the ev transition going forward unfortunately, we're in a sick where we have a hypercompetitive industry, a leading player

cutting price and that's going to lead to worse profitability for the entire industry. but these are deep-pocketed competitors and the priority is to move to electric. if profits have to be weaker in the near term, that's what they're going to do. i believe that's the tradeoff choice they're going to make. >> there remains a discussion about who's going to make a truly affordable ev over the long term as a lot of these legacy guys are coming into market with pretty expensive models i mean, is tesla, you think the best candidate to fill that role, absent any new entrants from overseas? >> certainly the chinese are offering cars in the domestic market which could be exported to europe at prices equal or lower than tesla today i think they're good candidates. i also think volkswagen has been progressive and launched many new models they're looking at a low-priced model in the next year or two under $30,000.

i think they're credible gm's had a low price ev. i don't think it's competitive in offering and certainly as tesla cars but certainly lower price than tesla we've had some koreans come in with attractive ev offerings again, this is -- the auto industry has historically had four returns for oems, in large part, because it's a very competitive industry you now have the entire industry focused on developing evs. yes, tesla's had a head start. i think it still has some advantages versus its peers. clearly, peers are gaining on them there are 150 new evs coming out globally this year there's just tremendous focus on this part of the marketplace though, you know, tesla may get there first, but there are lots of other players who are pushing hard with ev introductions

and are coming out with better and better offerings. >> thank you for the time today. feeling vindicated today with the stock down 8%. appreciate it. still to come this hour, two earnings exclusives, the ceo of regional bank synovus, total deposits increasing, bucking the trend, giving depositors a boost. phillip morris ceo on results a well revenue comes up shy the company looks to continue to move away from cigarettes and towards what they call a smokeless future witthh e dow down 60. we're back in two. no, that was always part of the plan. three kids?! this was never part of the plan! these kids order the lobster mac 'n cheese! what if she wants to play golf? we're going to have to outlaw golf. absolutely no golf in this house! not under my roof! since we started working with empower, all of our financial questions have been answered, so we don't have to worry. so you never- nope. always part of the plan. join 17 million people and take control of your financial future to empower what's next.

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welcome back quick check on regional banks. a number of names reporting last night. deposit health and focus, zions, keycorp and comerica expectations were low and some of these regional banks are weaker today that's notable. >> the move in synovus is more mutd earnings beat, net earned income stable let's get a closer look at q1 in a cnbc exclusive with ceo kevin blair. great to have you back. >> great to be with you.

>> can you characterize the stability of deposits? in your mind, is it the most important number >> i think it is coming out of the last 45 days everyone wondered what would happen with the idiosyncratic failure of these institutions. how would that translate to the regional bank sector if you have long tenured relationships with your clients, you won't only lose deposits, can you grow deposits. we during the first quarter saw record deposit production. we saw overall deposit growth of roughly 2% that would just point to the fact that when you look at our overall average tenure of our deposit act, it's about 18 years. these are long-standing relationships and, of course, with all of the anxiety and uncertainty that was created, there were lots of conversations with clients asking the question, what's going on? but once we have those conversations and explain how different we were from what those failed institutions had happen to them with more of a

home mo homogenuos deposit base, so i think it points to the granularity of our model. >> some had new deposits, we don't expect them to be sticky, quote, unquote how much are you counting on them to stick around >> well, there was a a little bit in the quarter you wanted to make sure you had excess liquidity. you may have originated cd promotions or taken on broker deposits there's a little built of that in large part, the $3 billion we brought on this quarter were all core deposit growth. so, whether it's a six-month cd or 12-month cd or new money market account, it gives us the opportunity to take that relationship and continue to broaden it and prove our share of wallet by selling additional solutions. that will keep them on the balance sheet. not ultimately what rate you

paid but what sort of services and advice you can provide that client that makes them want to continue to bank with synovus. >> if i'm a consumer client of yours or a small business client, how much harder is it to get a loan right now >> you know, i don't think it's harder our credit policies haven't changed substantially. we've seen our pipelines have diminished because the demand from clients there's less demand for loans based on interest rates and based on the cre market, cap rates. there's lower demand we haven't changed our underlying credit policies we make some tweaks and adjustments in areas we rely on the underlying value of a piece of collateral that may have greater volatility, but our policies haven't changed what we're probably more attuned to is can we today make a loan to a client that makes our -- meets our minimum hurdle ultimately we're requiring when you come to us, we want to make sure we're getting a full relationship it's not a loan-only

relationship we have we want your core deposits or other ancillary services. >> what does that say and how would you characterize the state of small business, in your area right now? >> well, you know, it's still very -- it's strong. from a credit standpoint we haven't seen a deterioration on the small business side ultimately, demand is lower because as we survey our clients, and we do it every quarter, this is the first quarter that we've had in the last four quarters where the outlook for future growth was a bit muted. so, i think there's a prudence being provided by a lot of these small businesses obviously, they don't have balance sheets that allow them to have additional cushions. they are prudently looking to the future, worrying demand may subside a bit so they're less likely to go out and take on a new project. the underlying base and the quality of the credits in the small business area are still at historically low levels in terms of having great credit. >> meantime, people are trying to guess at the future economic damage if you do get a rout in

cre. you could argue, we just showed a map of your branch locations, you are in a part of country that is maybe the most insulated from big macro weakness, right >> yeah, carl, you're spot on. we talk about our footprint. it's a jewel when you look at the next five years of population growth, we're 2x the national average. the southeast continues to provide a great deal of ig insulation on the cre side when you think about this market, especially from a cre perspective, what we've seen is there's been weakness in certain asset classes. more importantly, i think there's weakness in certain geographies. as we think about ours, and i know offices garnered a lot of conversation in the last week, if you look at our office portfolio, half is medical office which hasn't seen the type of concern that some of the traditional office space has seen if you look at our criticize and classified ratios, they're far

below some of our peers. we believe that's partially due to the markets that we're in it's also due to the newness of the buildings. we know office space prior to 2010 has been performing worse and our net average collateral age is 2014. i think we have to be careful not to take a broad brush approach toy re and think every bank will perform the same i think there will be winners or losers and i'm confident we'll be one of the winners. >> on behalf of regional banks, there's this nagging concern after what happened at svb, and i believe it was idiosyncratic for a number of reasons, but there's this worry now that in an age of digital banking, where the click of your smartphone, people can just pull out billions of deposits in hours, that there's going to be more pressure, especially if the fed keeps rates higher for longer, to go into safer places, to go into higher-yielding

alternatives, and it can happen very quickly in regional banks, they're much more vulnerable. people are questioning the economic model, especially if there's tougher regulations on you goo is can you address those ex existential concerns. >> i would say the demise of the regional bank is greatly exaggerated. we were notified we were recognized as being the number one bank in the southeast in terms of client satisfaction and trust from jp power. that was not competing with other regional banks that's when all the banks. our clients are telling us we're satisfying their needs and most trusted over any other institution. and that's why people choose institutions not just on safety and soundness or asset size or are you too big to fail. if you look at the surveys on why people choose banks, number one, it's based on a recommendation from a friend, family or colleague. number two it's the reputation of the bank.

i don't think that's going to change i think we're going to continue to see people select their bank based on who provides the greatest value not on who's too big to fail this is not the first time our industry has faced this. i remember five years ago receiving questions from investors saying, how do you compete with the large banks if they're going to spend 20 times when you're spending on technology well, the regional banks and community banks have debunked that myth because we have been able to provide the same level of functionality and capability at a fraction of the cost. scale obviously matters. ultimately we provide a service that's not going to go away. i think our clients know we're going to safeguard their liquidity and they're going to choose us not for that but rather the value we add to the relationship. >> kevin, interesting perspective, spes leshl coming out of the events of the past month or so. appreciate the guidance on the quarter. thank you. >> thank you, carl >> by the way, carl, we were

talking last hour about why in the beige book the lending conditions seem a lot more benign in places like minneapolis or st. louis or richmond we just got our answer he's in the georgia region as you said, they're not having as tough macro conditions. therefore, they're not seeing the are sharpness in lending tightening and loan demand fall off like in san francisco or new york. >> the number of companies that have talked about weakness, out of say, you know, northern california united, costco, it's not a surprise that that was a big event for the -- at least the regional economy. >> and they're all exposed to office buildings on the coast, which makes it tougher. chief economist nathan sheets joins us. at&t, investors are concerned about a slowdown in subscriber growth. stock's down 9%. verizon is falling on that as well down 3%. don't go anywhere. indo aut9 e dow wnbo 8 pots

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welcome back time for the story abroad as european markets close for the day, indices are mostly lower with autos and mining shares seeing the biggest declines. the euro and yen rallying against the dollar european stocks under pressure with tesla news pressuring auto stocks there, too. if they're going to have a price war, that hurts all around even though renault said, we're not going to follow tesla's leads. let's get a news update with contessa brewer. we're watching theaftermat of a horrifying tragedy in yemen. at least 78 people were killed in a stampede in the

yemenicapital and 77 injured chaos broke out when hundreds of residents from that wore-torn nation gathered to receive ramadan charity donations. they surged to see a cash reward that amounted to $9 per person. the democratic governor is expected to sign against semi-automatic guns. they would block the sale, distribution and importation of more than 50 gun models including ar-15s, ak-47s and similar style rifles america has experienced more mass shootings during the first 100 days this year first of the calendar year since 2009 and the biden administration is investing more than $80 million in funding for alternative solar tech in a push to produce more solar panels in the u.s. the energy department's also hoping to make solar energy available to more people and pursue more efficient alternatives to the silicon

panels back to you. >> thank you. after the break, the maker of marlboro cigarettes looking to go smoke-free the ceo of phillip morris next we're back in two minutes on "squawk on the street. dow down almost 100 points like your workplace benefits and retirement savings. with voya, considering all your financial choices together can help you make smarter decisions. voya. well planned. well invested. well protected.

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pisani. >> we've been in the middle of this trading range and we were hopeful we could break out because the banks were better. they're not cooperating and tesla is not cooperating another sector not cooperating is energy. the oil was 83 four, five days ago. now it's $77 conoco was $110 at the close of friday that's one sector we're losing in the momentum category tesla has thrown a monkey wrench in the auto manufacturers. ford is a truck -/suv company they're trying to get big in the electric vehicle sector. that unit is losing money. this is throwing a monkey wrench into plans for a lot of companies. we talked about renault and they're not going to cut their prices even though it will hurt their market share i want to point out, a lot of earnings are still good.

union pacific is fine, the railroads are good and most of the big global industrials, u.p.s., fedex, even caterpillar that had a rough patch, have all stabilized cyclicals, industrials and materials have been doing fairly well sara, back to you. >> bob, thank you. turning now to another earnings mover, shares of philip morris are down after a miss on revenue. the company did reiterate its 2023 outlook calling for strong, organic sales growth and earnings growth of nearly 9% stock now yielding 5%. joining us in an exclusive interview, philip morris ceo jacek olczak where is the disappointment coming from? >> good morning. we deliver our own expectations pretty good the quarter but we knew it was going to be the weakest quarter in the year.

having delivered the quarter, we are still very confident in full-year results. we're looking at revenue growth and 7 to 9%, pretty solid growth the most important thing for us is that the smoke-free products, recently acquired, you know, swedish and nicotine powders are having strong growth this quarter. i believe that's going to continue for this year we added 900,000 users all of the leading indicators give us confidence for the full year >> so, everybody wants to see you transform into a smokeless company, which you have said that you aim to do now, about 35% of revenues are smoke-free, including that ikos brand, which the market is still focused on you still think you can get to 50% by 2025, is that on track? and when can you get to 100%

>> still on track. important milestones we deliver this quarter, 35%. we have two years to get to 2025 i think 50% is absolutely achievable but what is more important for us is what's going to happen after 2025 where is the date when we can achieve 75%, 80%, and ultimately completely leave combustible smoking behind. >> when is this? >> we talk -- we have investor date later september this year my eyes are now on the horizon, where the 75% is going to come through. >> we've seen some fairly large settlements with juul in the last couple of months. do you think their marketing has been disabled? do you think about them as a competitive force? >> look, electronic cigarettes

is a challenge it's a different product that part of the industry is not fully consolidated you have a number of players i mean, different practices, et cetera it's difficult for me to thiveng think about this we focus on pouchs i think the market is a very important component of sustainable growth tremendous opportunity and have to be executed with high degree of responsibility. >> when you talk to -- when you think big picture over many years, it really is, the whole industry is an amazing case study in the innovator's dilemma. we had an amazing market for decades and came along this new technology when you think about the moment where you made that pivot and sort of calculated the costs and benefits, what are the key lessons for you?

>> i mean, key lessons is that, you know, if you do really -- there is a problem and you put the results behind the science, technology, you can really achieve the thinks which ten years ago would be unheard of. deliver cigarettes i think all of these -- actually, i believe you can find equilibrium where you can serve your customers, your smokers, your generate net positive impact to the public and serve also during this transformation very well to your investors. i think philip morris international is actually a perfect case to -- for such a transformation we're seven years in -- more than seven years in

transformation we expanded more than $10 billion behind the products, behind the commercialization of these products, but still very generously rewarding investors for continued dividend growth. and i believe that's going to remain what investors will see about philip morris. you can do transformation, can be profitable to a positive -- net positive to everyone around. >> is the growth in ikos and the smokeless alternatives, is it coming from the traditional combustible cigarette category when you got approved by the fda a few years ago, big debate on safety, whether it was a good thing to transform the smokers into these products or whether it could lead to a whole new generation of smokers, which is not what we want for our kids. where is that growth coming from and how hard are you pushing the health narrative

>> look, these are all very legitimate concerns. but if you look at the data over the history of transformation of philip morris, if you look at the ikos, watching very carefully where we have undesired audience, minors below legal age who have never used nicotine product before, outcome is very positive there was a very unworrisome levels of people who -- ikos has been designed and marketed directly with focus on adult smokers, so are the nicotine pouchs our prime objective and the only objective is to help the smokers unwind the habit of continuing smoking cigarettes it's a mix of the product design and, obviously, the marketing execution. if you do it in a very disciplined way, you can achieve spot on the results, which i believe is aligned with fda and other regulators' expectations

>> appreciate you joining us to talk about the progress. thank you very much. >> thank you very much for having me. >> jacek olczak, the ceo of philip morris international. coming up next, mega cap tech has been viewed as a safe haven to start the you this bifur indication in the sector is starting to emerge. check out horton today stock is on a tear up 45% over the past year and popping again this morning they say despite higher mortgage rates and some inflationary pressures, demand did improve during the quarter as for home construction etf, that's a 52-week high. .cre authaon tt cnbcom

according to a report from the information hedge fund tiger global, writing down the value of its venture fund by 20% amid a slump in tech valuations, that's the focus of today's "techcheck" segment with deirdre bosa after an already disastrous for tiger, right >> that's a hedge fund founded by chase coleman after riding the tech, they have recorded, this is what sara was referring to, historic losses last year. markdowns are still being measured across its private holdings of tech startups. the information reporting tiger is telling investors its $12.7 billion venture fund had paper

loss of 20% of management fees as of december i have some calls out. i haven't confirmed the numbers myself but tiger was the most active startup investor of 2021 and backed the most unicorns, deployed the most dollars, of even softbank's vision fund. fintech and crypto have gone through major reratings. journal reports tiger marked down private funds an average of 33% last year, erasing a total of $23 billion in value. vcs don't typically give this much detail to investors about markdowns for private companies. as we talked about, there's some discretion with regards to when and how they do so it is somewhat unusual tiger is giving so much, and especially for a fund, i should make this clear, venture fund launched less than two years ago with a ten-year investment horizon. as we talked about, guys, the hedge fund has been under pressure the firm nurses those losses

which could make it harder to raise its next fund. on the public investment front, things have turned around. a person familiar with the matter tells me the flagship hedge fund which focuses on the public market gained more than 7% in the first quarter of this year as we talk about, private valuations lag those public ones. >> any sense of where they've been hit hardest, sectors or companies that have been marked down >> they 345id big bets in enterprise software as well as crypto, and a big investment in bytedance that they marked down. it's been rough across all of the startup world except maybe artificial intelligence where there could be, someone argue, another bubble building. tiger is raising more money. potentially it could be investing at lower valuations, which could help those private funds and valuations in the future if they're able to get in again, it's this big question,

is there already another bubble forming in some parts of this market >> that is fascinating and a great way to look forward into time as we know how some patterns work. deirdre bosa, thank you. coming up, citi's chief global economist says the onset of a u.s. recession is getting further away why? he'll join us to talk about that. take a look at crude, down 3% back below $80 lowest levels of the month barely holding onto the 50-day moving average we're back in a couple of minutes. man: i'm not slowing down anytime soon. that's why i take osteo bi-flex every day. it's clinically shown to improve joint comfort in 7 days, and continues to improve over time. kinda like us. osteo bi-flex. because i'm made to move.

one of the notes catching our attention, citi expects the u.s. to stave off recession, at leas recession, at least for one more quarter, pushing back their projection to q4 raising global gdp forecast to 2.4. however, growth in '23 could mean a bigger crash in '24 they do lower their forecast to 2.1 to 2.5 last month. u.s. data confirms worries philly fed, the lowest level in three years. joining us is citi's global chief economist nathan sheets. thank you for the time in the near term, how much of the resilience you're seeing globally is,f in fact, about china?

>> the chinese economy is expanding at a very rapid clip the chinese consumer has simply roared out of the lockdowns and first quarter gdp we're expecting it to be strong but it's on the upside and we marked off growth expectation for china for this year to over 6% and given that it's the consumer and it's particularly focused on services expenditure, a spillover to the rest of the world is not as great as if we're investing in infrastructure like past chinese recoveries but, nevertheless, having the chinese economy grow at 6% plus is a positive development for countries exporting to china, a positive development for sentiment in global financial markets, and a very helpful constructive backdrop for growth in the rest of the world

>> but doesn't all of this just mean, nathan, the fed is going to keep raising rates and keep them higher for longer which increases the chance of recession? >> sara, it sounds like you read our outlook, which is precisely kind of what we're arguing that we see a little bit, you know, yes, the economy is slowing, but we see a little bit more durability in the economy, in the labor market and in inflation. and as a result of that we have the fed hiking rates to around 5.5% so we're a little bit higher than the fed and what will ultimately be necessary to bring down inflation and that is the dynamic that, unfortunately, also brings on a recession toward the end of this year and into early next year >> i don't know that -- have you mentioned the lending squeeze that everybody is worried about, the result of some of the bank failures andthe impact on smal

business, commercial real estate, the broader economy? isn't that sort of a wild card >> absolutely it is a very significant wild card and a down side risk that we are very, very focused on now i do think the good news in that respect is we move from what i've called the acute phase of these stresses where it's about bank runs and uncertainties about institutions failing into more of a chronic phase where banks are thinking about their balance sheets and asking themselves, well, can we continue to extend credit in the same way as we have over the last several years and as a result of that process there could be a credit crunch in the economy and that's something that will unfold in coming months and quarters and could indeed make that recession that we're

expecting somewhat longer than it would be otherwise and somewhat deeper. >> at citi, and i guess i wonder your colleagues on the street, do you think we are adequately accounting for household leverage that you've really got to go back to the '80s to see at these levels and utilization of credit cards it seems the tank is full at the household level. >> the leverage in the economy i think is conditioned to a lower rate environment than currently prevails and i think it's an open issue where rates are medium term and the sustainability of some of that borrowing over time now kind of for the moment the part of the household sector we're most leveraged on and what can be most acute is for the bottom part of the income

distribution where balance sheets are softer than the top half, for that part lots of assets on their balance sheets, lots of strength we think they're going to weather the storm. some of the lower income consumers have been highly leveraged and i think there's a real risk particularly as the unemployment rate rises if we're right on our recession call that could be an amplification mechanism and something we're watching very closely. >> we'll pay close attention to your house view. you've been so right on things like commodities at citi we appreciate your time, nathan. good to see you. nathan sheets. what is wall street buzzing about this morning buzz feed. the ceo making a pivotal nocentthe last hour. that story when "squawk on the street" comes right back l twins. both struggle with cpap for their sleep apnea. but stephanie got inspire.

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wall street's buzzing about buzz feed this morning as it announces layoffs and shuts parts of its business. ceo jonah peretti releasing a company wide memo in the last hour saying, quote, we are reducing our work first by approximately 15% today across our business content, tech and

admin teams and beginning the process of closing buzz feed news the stock went public less than two years ago. it's been pretty disastrous. we're also just hearing that insider, business insider, will lay off about 10% of its team. the spac, the ipo went down about 90% since then and kind of an end of an era for buzzfeed news >> a lot of these where profitability was still a challenge would start to get a squeeze here i'm sure we'll learn that more is the time. as for the week we have a lot of woodshop regarding earnings. tomorrow we'll get p&g which will give us a better sense where consumer stands. >> and also where inflation stands some of these household products have had so much pricing power and demand hasn't fallen off too much so what is that breaking point for consumers paying higher prices for everything they need in their homes and in their pantries that's a big question for p&g and package food companies

coming out later in the coming weeks. coca-cola will be next week. it will be really interesting to see. but for now, stocks are lower, carl, but they've rebounded from the lows of the morning and it's nothing extreme given some of the head winds out there around recession and higher rates. >> even with the vix still below 17 this morning, pretty remarkable let's get to the judge and "the half." all right, carl, thanks very much welcome to "the halftime report." i'm scott wapner front and center the investment committee debating what all of it means as another voting fed member speaks in just minutes. we'll have the headlines there joining me for the hour today josh brown, bryn talkington, amy raskin, jim lebenthal, here with me at post 9 we've been in the red for the market a slew of weaker earnings, some economic data was a bit weaker, and you have wahler and mester speaking momentarily any headlines you need to know about, we