the dollar as well the ten-year at 3.52%. two-year at over 4%. check out the dollar, which surprisingly still really affecting the multinationals, 4x headwinds, and there was energy, and there's the currencies happy friday make sure you join us next week, because we'll be here. "squawk on the street" is next ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange pretty steady premarket coming off the s&p's worst day in several weeks. plenty to work with today from p&g's quarter to some decent flash pmis in europe, an 11-month high on their composite and we'll get our own this hour as well. road map begins with rate expectations a slew of fed speak crossing the tape, pointing to another hike in may, but a pause may be now in view. plus, ford's ceo saying that

tesla's price cuts could start a pricing war and turn evs into commodities. and meta, topping tesla in market value let's begin with the markets. we mentioned, jim, some softness yesterday. worst day in about a month on the s&p. >> remember, one time, midday, this market is trading very sq schizophrenic, because midday, the market looked great. what we're lacking is some sort of two or three-day up tech, so i mean, apple has two-day up and then it just gives up the ghost. today, we'll have amazon some positive chatter from jpmorgan maybe amazon is able to -- i think they let a couple people go from whole foods. i'm still trying to figure out -- they spent a lot of money on whole foods i think they love it every time i say they need to fire someone, but the fact is that amazon is trying to rationalize. and if they rationalize and figure out how to get something

out of the $8 billion alexa, could be something >> isn't it really just all about aws for that company at this point i know how enormous the marketplace business is, the retail business, but it doesn't really seem to move the needle on profitability >> they just talk endlessly about football and alexa alexa doesn't have any mileage she listens to everything you have to say. and then she puts it out to you. >> reignite the growth rate at aws. in other words, move it back up above its current rate and you got a higher stock rate. that's all i hear about. >> i hear about oracle, google taking share it's not all bed of roses up there with the aws >> that's my point >> maybe below 15% growth. what do you think? >> i don't have a opinion on that, but i just -- we spend a lot of time talking about amazon, as we should for the retail business, but from an investment perspective, that does not seem to be top of mind, jim. >> but you've still got advertising. >> well, advertising was a very

high-margin business that was also contributing significantly to profitability, despite its relatively small number in terms of top line. >> leedsi'd like to point out tt amazon and alphabet -- alphabet seems to have bottomed on its worst moments, right doing -- switching back and forth. bing is giving you very different answers. >> to your queries >> yeah. >> and search. >> yeah. than google search you ought to try it. >> i have not actually i've just used chatgpt directly. >> do you have bing or did you disable it >> i don't use bing it have google teams -- the stuff that comes up now when you buy a new pc, you're just bought and paid for by these big companies, and i don't think people like it i think it's going to be a backlash, not unlike the backlash at tesla today. did you see all those names? bold-faced names that were against -- that were asking for more supervision >> yeah, i did >> could that be another reason tesla stock is --

>> i don't know. all of it adds up to $1.5 billion there's about 25 names here. >> i'm just saying there are a couple of stocks that dominate the news, and frankly, why i bring it up is because these companies are back determining whether the tape is good, and i think that's the the same, carl, because something seems to happen to them every day and yet it's much ado about nothing. i'm looking for earnings union pacific versus csx, good numbers from slb, the procter numbers. this is what this market should be about, not whether there's a price cut or price increase every other day or aws is slowing down we've got to get away from that, david. that's no value added. that's what i think. >> well, we can dive into any of those. p&g is interesting, especially this raise on the full-year organic guide. they were at 4 to 5, now go to 6. volume down 3 but price up 10 and they do say somewhere in the

january-march time frame, they took another round, which is probably mitting now >> i speak to all these ceos and all they talk about is who can raise price the most and get away with it well, we have our winner, which is procter and they're even doing things like -- i remember when dollar shave was supposed to win. gillette, holy cow grooming david, grooming is back as a growth category? >> is it >> and procter is -- and procter has a brand -- their brand names, they just put a few dollars behind them, and people switch i mean, i was using schick for a couple years i'm back >> mueller on "squawk" today talked about some of the tech advances and finding ways to resay someone with a baby to do child care take a listen to muller this morning. >> lost quarter, volume was minus six. this quarter, it's minus three that would be minus two, excluding some portfolio adjustments that we've made. and we have categories in

countries that are beginning to turn neutral to positive on volume so, i'm very pleased overall with where we stand there. >> said he would not say that trading down or private label is a "major descriptor of the current environment. said they're not seeing a big impact from the expiration of s.n.a.p. >> no, and i wonder what it means when it comes to unilever. they're in off cycle, but i feel i've been looking and waiting for kroger private label to start taking share costco is taking share in its own subtle way with kirkland, but they're not -- it's not producing an explosion of earnings, because they don't want that. they want volume >> i'm actually glad you mentioned costco the b of a desk today says they got a bunch of calls about it yesterday because it was up 3%, and they argue that the trade remains a special dividend, happens every two and a half to three years, last one was 2020 >> well, mitch clanty -- most

cfos are not hilarious you've got to listen to his call he just plays the analysts like it's just remarkable but they also gave that regular dividend boost, which was better than expected, and i think that glanty may be the most cerebral cfo in the country, which is why he has so much fun on the call he knows the business. some of these cfos, david, they come on, and all they can do is talk about, i don't know, the algorithm. the algorithm. >> what algorithm? >> we're going to get back to the algorithm. what does that mean? we're going to be able to do better than we were doing? >> i don't know what that means. >> the algorithm rich goes aisle by aisle he was very disappointed in hard goods. a lot of people were electronics doing very badly boy, do people hate that word. you know who they've turn on the possibly att. hey, you know -- >> you're moving fast. >> i have to >> we just transitioned from

costco's cfo -- just want to let people at home keep up with you, to american express. >> i have 472 stocks >> you don't have to get to them all. >> no? >> no, you don't american express shares, still down, at&t is rebounding ever so slightly after a horrible day yesterday. >> do you hear the call where they said, and of course the expected $1 billion in cash flow >> everyone else is, like, who else expected that free cash flow it was the deviation from what had been expectations. they're keeping up right now but you can see the bit of a rebound. we got some positive research this morning, carl >> hsbc up goldman defended worst day in more than 20 years. >> well, i mean, when you listen to these defenses, they're starting to talk about the -- goldman says the 6.3% yield is a steep discount to the regular level. that's because they cut the dividend and the stock went down a lot. they made it sound like they had been boosting the dividend

>> by the way, the quarter also did take down verizon yesterday. it took down t-mobile. >> i'm so glad you mentioned that >> even our parent company's stock was weaker i'm not sure if that was a result of that >> i'm not glad you mentioned that >> looks like mint is going to get a second look by regulators. >> do they know who's behind mint the most popular person in north america. jonathan kanter has finally overstepped his bounds >> you cannot go after ryan reynolds >> he's been on our air a lot too. >> as much as i love jonathan, this was a major mistake >> you love ryan reynolds more >> i think men and women, he's the only person i know, equally love, equally fabulous people -- by the way, like, i was texting, i think this is an outrage. i really do. come on. kanter's saying, what, that the competition's going to be hurt next they're going to come out against his gin. >> against gin >> his gin >> he has a gin. >> yes, consolidation of the gin

market is very concerning. >> it's really -- hendrick's >> what about the gin consumer, jim? >> what about that poor consumer >> i'm worried about the gin consumer because i thought hendrick's was good and suddenly the kcategory is getting more narrow >> ryan has a gin? >> he sold his gin for $770 million he has a gin >> i'm not following everybody have you sold your mezcal yet? >> stop it that's my wife's mezcal. i'll be signing bottles in houston tomorrow >> are you going to come to work the day after you sell it for a billion? >> you bet i will. even if it's a saturday, i'll come to work i've been coming to work saturday there's nobody here. one saturday i came in and logan roy was there. >> yeah, they spent a lot of time in our building >> tlhere i was i was with shiv in the boardroom. >> the money that "succession" paid got us through the quarter.

they spend more for one episode than we do for an entire year. >> someone asked me yesterday about dominion, and i said i think the 4.6% yield is good, and they said, no, the real dominion i said, no, the real dominion is dominion they wanted to know about the other dominion it's a very good utility that has a high yield it is not a voting machine company. >> glad we got to that too >> let's get to tesla, hiking prices on some of its u.s. cars after the stock fell nearly 10% on results yesterday the increase is implemented just days after the company's sixth price cut this year. prices for the s and the x now up $2,500 each jim, this is a lot of news i mean, there's farley responding to the notion of price wars in the auto business. >> i happen to love the fact -- farley, of course, who knows his family's been a ford family forever, even from the era of the t and a, and the fact is

that farley is willing to admit they've commoditized the electric, the ev, but his whole hope, and we're seeing it over and over again, even with the $7,500 credit, the ford lightning. look, the mach-e is a terrific thing, but the lightning is the thing that he's banking on, and he was delighted that the pickup truck looks like it does, which obviously would double as something you can put on starship troopers, right up there. >> oh, starship. >> yeah, you can put that thing on >> the cyber truck >> yeah, that could be on the moon that could take mars by storm. but farley's focused on u.s., which i think is a good market, and i think farley's going to kill it with the f-150 lightning. just kill it >> meantime, you had cathie wood on our air yesterday saying 2000 tesla on autonomy and now meta has a bigger market cap than tesla for the first time in 16

months >> if zuckerberg fires some people from the division that's meta, you're going to see that stock up another 25%, larger than tesla i think there are -- we do have this letter from tesla about leadership, but i question the price increase, although on the great conference call, and it was great, he did talk about how they have data -- he was making fun of the other guys, saying, they could never do this because they don't know what they're selling their stuff for, and i thought tesla -- that was an amazing conference call, although i don't think that jonas is right about what will ever be the line that we'll remember because i've already forgotten it, but i think one thing that is absolutely true is that tesla's in command of its own -- >> it may be, but other analysts are not forgetting it. truist puts a $154 price target on it using a discounted cash flow model they downgrade the stock to a hold they're talking about, hey, that was surprising, that willingness to accept lower margins, at least in their opinion

product pricing. looks even more correct but diminishes the value of the core automotive business. >> i'm hearing that the pickup truck is kind of like a techno-lamborghini >> yes, you were using lamborghini yesterday when you were describing the cyber truck. >> okay, so, not everyone watches every minute >> no, and even when they do, a lot of times, they don't know what you're talking about. so, come back to it again. >> so, what should i be doing? doing this in my basement? i think it's worthwhile. >> i think it's worthwhile too just like you to fill in the ba bl blanks occasionally. >> i try to get through as many companies as i can because people want their stock mentioned. if you try to wrap things up, for instance, we haven't talked csx today. csx was dramatically better than union pacific. i've known seen a quarter where

rails have such differentiation. >> the commentary has not been positive for the macroenvironment csx's ceo will be joining "squawk on the street" later on. morgan brennan is bringing him on with us >> i like him. and i like the coal line, believe it or not, because coal exports are good but intermodal is the best to me take on what's going on with the economy, and i did not feel good about the economy after union pacific or -- csx felt a little better union pacific was a very disjointed and poorly run call, and if you want to listen to a call that has less value than it used to, union pacific very disappointing >> wasn't there some commentary from swift or some of the others that wasn't particular positive either >> look, i mean, people decided that some of the -- what was i thought negative commentary is actually a little more positive because the stocks have come down a lot watch xpo today. >> i was going to say, two upgrades at xpo.

jpmorgan goes from 35 to 52. citi goes from 37 to 50. >> that stock will be up the most of anything today well, no, protector's better, but i found it quizzical because i knew that the company is doing okay, they split off the logistics business they were undervalued. jacobs did a good job, and i was surprised to see the stock go up so much on this appointment. but the transports are very much in focus, i think, and i know it's difficult, but i think east palestine has really colored the rails in terms of going slower -- you're just not going to do as much business when you're under a level of scrutiny because of norfolk southern's mistakes, so the industry, i think, is a little under siege >> you're definitely going to bring your speed down, efficiency >> and i'm sure joe -- morgan will talk about it, because csx had a remarkable quarter, but one of the things they were saying is just their safety is very strong, and typically, they start with safety. you don't spend as much time on it, and after what happened in

east palestine, i wanted to know, because i don't want to be in a rail that has so-so safety. >> right take a look at the premarket here we'll get to some of the ecodata and the fed speak that's on the way later on today as well as some of the comments we've gotten from mester and bostic and harker the last 24 hours still steady, premarket, got some options expiration as well which will make the close interesting. back in a moment from big cities, to small towns, and on main streets across the us, you'll find pnc bank.

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to be a focus. >> it's palestine. i had palestine on my mind east palestine >> palestine, ohio, yeah >> i want you to get this, david, because this is probably the most brilliant way to bring out value. you know there was this bank within schwab, and that's what everyone was focused on. jpmorgan comes out with a brilliant piece, and they say, get rid of the bank. the bank can sell at a very big price. schwab could sell at a very big price. this is the kind of piece that management should sit back and say, you know what this, after what happened with the bank, bringing them down as opposed to the brokerage, maybe it's time to split up. so, i want to ask you, david, because you know m&a, considering the worst of the broker and bank, what happens? would they call a banker and say, is this worth more if we split up this piece was so compelling, that i would tell people to buy schwab >> interesting okay i think we may have an opportunity to ask about it. >> well -- >> i heard properly in my ear, i think schwab's ceo is going to join us in the 11:00 hour.

yeah so, not you or me. >> he bought a lot of stock. he's a terrific guy. he's a brave guy and he had an interview with sara that was just fantastic he put the -- well, not the total buy. he came out right here and said -- >> yeah, i know. the question is, is it ever going to regain these sort of heights prior to the mini-banking crisis? >> yes, if they debank that's the point of what i'm talking about. this is about debanking. >> i see that. schwab could feasibly debank, it says >> and that's how you get it here you get some great questions to ask him when he comes on by the way, really, as i said in the conference call, just talked about the lies that are being told about him i've never heard a ceo -- >> it was a combative conference call i read it. >> everything from short sellers to competitors journalists were cited too lazy journalists >> yeah. don't like those lazy journalists. we got an opening bell a few minutes away by the way, keep in mind that if you want to catch us, well, you can do so any time anywhere.

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is brought to you by nuveen, a leader in income, alternatives, and responsible investing. in order to put inflation on a sustained downward trajectory to 2%, i anticipate that monetary policy will need to move somewhat further into restrictive territory this year, but the fed funds rate moving above 5% and the real fed funds rate staying in positive territory for some time. i expect to see meaningful improvement in inflation this year with inflation moving down to 3.75% by the end of the year, continuing to improve next year, and reaching our 2% goal in 2025 >> that's mester yesterday with her take on inflation. she's been in your crosshairs, jim. you think she got a little dovish >> i think that she is starting to understand that maybe prudence shifts in favor of not continual lockstep i think she's maybe a little more attuned, david. you start to see stories about

credit crunch. the credit crunch, i think, is commercial real estate the new one that i didn't know was this bad but i think she's responding to the idea that the system may not be able to handle endless hikes. >> we are still trying to and it seems as though the fed is still trying to figure out the true impact of what a credit crunch will be, how significant it will be, what it will look like john gray yesterday from blackstone sees it or says he sees it. others, though, say, still unclear. >> well, i just think that what we have to do, if you parse all the banks, it's obvious that if you're going to have this middle tier banks have the kind of same regulations as the big ones, carl, you know, you're going to have a significant decline in lending. just because they -- the rules are always harder. >> meantime, some of these pmis,

jim, in europe, 11-month high on their composite. services kind of blew away the number >> well, look, i had the executive chair of santander, which is now the fifth largest bank in europe much stronger than people think. >> s&p is up premarket >> they have a lot of good things to say. >> that's on a miss. >> i mean, a rather remarkable person just comes back from meeting with the heads of state wherever she goes, probably the most diplomat of people, which is saying that just not understanding what people in america think that europe is so weak when it's not >> by the way, here at the big board this morning, it is madison square garden entertainment group. at the nasdaq, it's ld micro, a provider of two premier small cap conferences, ringing the opening bell

we're back to 4,1030, jim. >> you look at things like -- there was a piece that david kostin put out last night about stocks that are involved in activist crosshairs. david, it's like, well, they're doing better by, you know, infinitesimal, but everyone's trying to find a little bit of edge here because the s&p isn't doing anything >> activism has actually been marked by a lack of activity, rather than more we expected perhaps that with universal proxy, you would see a willingness of activists to go for it, made it less expensive the one out there right now is carl icahn at lumina that's an interesting battle there are some who say he's got a lot of good arguments to make here, but they question whether or not they want to see more icahn director, so to speak, as opposed to -- the quality of his directors. but we'll see. of course, that company -- what

that company did in terms of grail and closing it in the face of the antitrust objections and costing shareholders enormous amount of money. >> on the board of disney, we haven't mentioned disney ceo on the board of disney >> ceo of? is on the board of disney? the ceo of lumina. >> we haven't mentioned disney yet, and yet every day, this story is captivating america >> you're talking about desantis versus disney? >> don't you think >> i think it is certainly something that a lot of directors of watching closely as well because it gets back to this question as to when you choose as a company to engage or not. and i think, you know, if bob chapek had it all back again, he probably would have done things a bit differently perhaps, and how you do so, and then of course, the questions about whether desantis at this point is bringing up the idea of putting a prison next to the -- >> you saw "the journal" poll.

desantis had a 14-point advantage against trump in december it's now a 13-point deficit. >> that's incredible that turn is remarkable. john ellis, whose newsletter i read every morning, is really just talking about, look, he had an article that he was quoting this week saying that trump wins the electoral college and the election, we're really jumping there, but i do think that this is not helping desantis. i do wish that the discourse would be about the cuts at espn or the cuts in hollywood, because the stock itself is horrendous and i mean horrendous. my travel trust owns it, and i'm saying, guys, let's get -- let's start moving here. they did announce cuts, but we don't want cuts. we want revenue growth, and that, so far, no >> well, it has outperformed the s&p this year. it's not horrendous. it's up about 13%. >> it's down about 80 points and it used to have a dividend >> all true. >> by the way, happy 25th anniversary to animal kingdom.

>> yeah, 25 years. what are you looking at me like that >> i'll look at you any way you want after the way you look at me any minute. new corps. let's switch topics. >> i'm pointing out you said it's been horrible, and the year is almost half over. not quite. >> there are people who bought the stock higher how about that >> many people bought the stock higher, including your charitable trust >> um -- >> doesn't matter that i bough it at 18 >> i know. >> means nothing, you cherry-picking negativist. >> i am here to defend you when you deserve to be defended always right out there in front of you. >> how about the fact that apple was down 2.75 early this morning and no one could figure out why and now it's almost back i want to point out new core because new core is talking about the chips act and building we don't talk about the chips act nearly enough, particularly because the goal of secretary raimondo from commerce is to

make it so the discourse is not about taiwan, but it does cost five times to make a fab here than it does in taiwan, and i think you need to be more defensive. but meantime, president xi is racking up -- i mean, he just seems to be with any head of state that's available, and it all goes well. >> yeah. there's been some pieces on that last 24 hours about how he's met with just about everybody, other than us. >> yeah. >> even pushing back the blinken visit. and another piece today about taiwan themselves saying, guys, cool the rhetoric. >> taiwan is saying, cool it >> not constructive. >> was that not unbelievable taiwan itself, which is obviously the pawn, is saying, hey, come on, america. and i took my breath away, because look, there's a lot of business in china, but the existential crisis is not about business it's about a thriving democracy. taiwan is a democracy. >> at the same time -- >> it is, it's >> -- china growth, i mean,

jpmorgan just went to 6.3% from 5.5% meera says they're not sweet spot of the covid rebound. >> i was talking to ana, lvmh is the -- may be the most undercovered brilliant company on earth and i just think that people -- it's such a force in china that, okay, look at that there's the stock. that represents europe >> go back a ways, because it will look just as good i mean, bern nard arnault, we do talk about, the man who runs lvmh or is now the wealthiest man -- is he back to number one? there was an interesting story yesterday or the day before in "the journal" about how he's grooming children in terms of -- they're not young -- in terms of succession back to your favorite show back to many of our favorite shows. >> he's a man of great mystery even people who are close to him don't know his next move, but

are eagerly anticipate it because he's so far ahead of everybody else when it comes to what emerging countries want >> it's amazing, the power of a brand still, particularly in the luxury space, and what you can do and the margins that follow >> interesting david's got something going, there are brands that, in this era, have transcended, that it turns out that inflation didn't hurt them. it turns out that great turmoil in countries hasn't hurt them. it's just remarkable and then there are brands that -- like hydrox cookies. >> whatever happened to -- they were no good anyway. i mean, compared to oreos? come on. >> oreo did kind of bury them. >> remember when you got hydrox? you were like, choid >> we were a hydrox family because they were cheaper. >> yeah. >> tough childhood jim --

>> we loved tang because of the astronauts and watering down the grape juice because my mother would say, it's got too much grape juice in it. let's put water in it. >> this piece in "the ft," jim, about them cutting 10% of london and removing london as the instagram hub is a big reversal. >> people are not following his moves. he is taking -- i'm waiting for him to decimate new york real estate when he gets out of the contract sharks but he is -- he just -- of the people who recognize that they overhired, this man is very self-effacing he's not afraid to admit it. everybody else who's overhired is kind of saying, well, what do we do? i find alphabet and amazon both are struggling with the overhire >> yeah. >> and he's not. >> he's mr. efficiency now they had a town hall yesterday it was reported on by a number of different outlets, where he -- they didn't give great answers, i thought, at least the ones that i saw in terms of why

they were making cuts where they were as opposed to other areas, why they were giving top management bonuses after overhiring but there's one look at it and listen, he leaves open the possibility of further cuts. >> isn't that something? >> even with having cut a quarter of the staff >> that's on top of buzzfeed's cuts yesterday and now "the ft" says, deloitte, a thousand jobs in the u.s it's friday, and maybe we'll see a pattern where we'll start getting some tape bombs on friday afternoons. >> yep, it's really good chatter on twitter brian stelter, one of my favorite followers, "new york times," just talking about, we had to revert to actual journalism, not -- i remember when i met with the people from buzzfeed, they were trying to put a picture of a cat -- cats -- it was one of those things where, like, you know how you're in a craven moment, cats rate if you could put a cat up every two seconds, people would watch you.

that turned out to be -- it didn't have the staying power. >> didn't have the legs. that was not a great spac deal i think buzzfeed is trading in the 70 cents range let's just say, wework, maybe not far -- i think wework may be a little less. 72 cents and then wheels up. >> did you really? at the same time >> yeah, we said it at the same time wework, wheels up. you think of a lot of them didn't go too well remember the days on fridays we'd do all the spac numbers >> i find that when you look at spacs, i always come back to getty, which at one point -- getty, which, by the way, is a very, very good company, i'm not slamming them, because jensen huang talks about them as a public, but came public at $10, then went to $34 and now at $5 >> oh, they brought it back, thank you, guys, just to have a little memory there when we used to talk about it >> the spacs just wiped out another generation of investors.

>> they're still moving forward. when was the last time we saw an ipo of any note? >> there were three last week. none of them were larger than like $30 million and they were all chinese stocks >> yeah. >> the information had the story today about seat geek starting to look at confidential filing, but -- >> i mean, the big one will be later this year, arm holdings. >> yeah. >> that's a different company. that's a mature company that's been around for a long time. >> it's great for them >> it's not, you know, one of those early -- relatively early growth kind of companies that will get people very, very excited. not that arm won't be an important listing. it will be quite important. and certainly for softbank, which owns it. >> arm, i think, is one of those companies that -- i mean, it's like deep mind at google we forget, oxford and cambridge. it's not just stanford >> no. >> put them in the same breath

>> uk-based. >> jim , on energy, oil is goin to have a down month >> now the analysts have them, which i think is justified >> no one understands why it couldn't hold the opec gap on the production cut >> i'm going to texas in a cursory way, signing bottles in houston for my wife, and the oil people are anxious to come on and tell their story because i think they think that the perception in journalism is that the permian has peaked not only am i not getting that, but there is signs of a major find in powder river >> really? >> yeah. major. >> signs of a major find >> powder river basin. to the point where we're going to be talk about how great powder river is soon so -- >> where is that, by the way >> wyoming >> wyoming >> yeah. >> interesting >> interesting because we tend to think -- remember -- i remember with the laid aubrey mclenden, to ohio, for the

utica, said, we're going to find a lot of oil, and they drilled, and they got there and it was natural gas. >> should slb be up today instead of down? >> no, cash flow wasn't what i thought, but i think it's such a well-run company buy it when it comes down. baker hughes had the best quarter. how? pretty amazing >> we'll get rick count this afternoon, which has been softening. >> i do think you've got a lot of people in that industry that say this is not the time to drill. someone in the industry yesterday said that president biden is going to drain the entire -- >> i mean, the tape piece this morning is that they could start refilling in q3. we'll see. if conditions are appropriate. >> well, all i know is that when oil comes back down, you got to go back to the refiners, because the spread is so great look, i genuinely like the group, and i like the group because they decided to return capital to shareholders. i've been buying coterra for my travel trust, half natural gas, half oil they changed their policy and

they're buying back stock, still have a good yield, as opposed to just doing one of those giant yields because they didn't realize that the average investor thinks when you cut the yield, even though you said, listen, it's a very good yield with oil, that something's wrong. you can't cut dividends. now, it's not at&t >> no. >> i had to bring it back to that >> well, as you should you've not been positive for a long time. at&t shares are up about 3%, this after what we talked about almost a historic decline yesterday, first time the stock had been down that much in over 20 years bit of a rebound today lot of disappointment in that free cash flow number. there wasn't much else the other metrics were fine. they really weren't bad in terms of sub ads they talk about a moderation, back to pre-pandemic levels in terms of subscribers we all know about the competition already in the wireless markets they continue their fiber overbuild, but there are just questions in terms of cash >> well, it was interesting to see verizon, because i don't think verizon is going to be

that great >> when was the last time verizon was great? it's been a long time. >> yeah. yeah at one point, they were sitting on a gold mine, those guys now, i do want to distinguish between union pacific, which i said was a very difficult conference call, and csx, which was just a delight, because csx, it looks like they didn't have the precision railroading that we thought they did. you know, when you say -- when you're running a railroad, you say one of the things that are not positive is beer shipments that'sgetting a little too specific for me, even though it's probably modelo and corona. >> i think it was a week ago that we got jpmorgan and had a big rally in those shares. certainly seemed to have been the best quarter we've seen from the big banks. but the banks this week, today in particular, not strong. >> giving it back up

>> regions is the biggest s&p loser. >> wow you know, i thought -- well, midrange >> wells fargo is down 2.5% today. >> but had a nice move off the quarter, but you're absolutely right. it's given back a lot of that move >> obviously, goldman was not what investors -- >> can we talk about goldman for a second >> of course >> what do you hear? for instance, i'll tell you, are they making any money in the apple credit card? >> i don't know. i don't know >> are they making any money in anything like a market where they offload the bonds >> unclear >> are they making any money in m&a? >> well, m&a is quiet. but yes, they're making money, but not as much. >> are they making any money in ipos >> no, there are no ipos >> all right, i'm going to come in and say, how could they be doing so well with the stock if everything's bad what happens if anything goes good what happens they have nothing that's

working. what would happen if -- >> wealth management is not bad. >> wealth management is good, but there are other people i prefer james gorman as the wealth manager >> i know you prefer that franchise at morgan stanley. >> goldman, it's amazing, they're playing with three arms tied behind their back what could happen there if m&a comes back >> or if the capital markets come storming back at some point. >> goldman's stock is reflecting that things can only go up from here it's still a good franchise. it's just that there are a lot of people doing nothing. >> speaking of going up, little uptick here in some of the s&p flash pmis let's get to rick santelli >> yes, there's some surprises here s&p global pmis, the headline manufacturing number, these are april preliminaries, they may change instead of getting the sixth sub-50 number in a row, we popped over 50 50.4 that's the best level since september of last year you ♪ notice interest rates they're

moving a little higher the neat part is the markets and equities are firming up a bit as well look at services 53.7 that is the best since april of last year, and finally, the composite pmi, expected to be around 51. much better. 53.5, the best since may of last year, and it certainly seems as though what's better for the economy seems to be doing better for stocks, although the interest rates are moving up many still believe the fed's darn close to the end, and another thing close to the end, for now, "squawk on the street." but it will return after a short break.

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it's been a week of worry

about price wars breaking out in the ev business and sure enough, worst nasdaq 100 laggards this week are largely about the auto business tesla, lucid, rivian and cisco with an 8% decline enrries about corporate i.t. spd. dow has gone red stop trading with jim is up next s fast. as sleek as it is spacious. as smart as it is beautiful. introducing lucid air. experience the best. ♪ ♪

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it's time for jim and stop trading. >> one of the things close to watch whether the government will reimburse for the expensive all timer zer's drugs. senior executive of lily said medicare would pay for everything and that would be a nice reimbursement lily has a formulation, not seen real numbers yet, but the drugs are expensive, but the disease is horrendous and i regard this as being a sign they would not say this unless they have -- it would be covered [ inaudible ]. >> the biogen drug not met well at all was not something the government was willing to pay for. >> this is a nice reversal of

course is lili -- lily is right. the research i've done through the brain foundation you have to start on them early if your relatives or mother or father have it, but that said, we have so little on it that people -- it's buffalo those things is -- just compassionate use. >> detect early signs of alzheimer's would be helpful too. >> you need biomarkers the reason i have ben on from moderna he was the first to tell me about how you can isolate biomarkers and it's -- very impressive man let's not forget his role in the fi middle of february - >> we remember that day. >> when everybody -- the bottom of the stock market was date he came out and said one patient responded, i am going to get a second shot a new shot, for people asking, people saying jim -- i am.

>> you going to rest up for the 180 s&pars next week. >> my favorite week of the year. only happens four times. i'm going to see howie roseman, i'm going to see jerry jones on monday spend a lot of time -- >> you're going to be in dallas. >> speak to the owner of the -- the -- the - >> the dallas cowboys. >> if you're from philadelphia. >> you can't say it. >> you don't say it. >> understand why you're doing it >> because i'm a turncoat, cheap date, i don't know. >> that's going to be fun. we'll see you tonight. "mad money." 6:00 p.m. eastern time flat action in the wake of those pmi numbers. the dow up 4 when we returncs, x after the quarterly beat don't go away. great talent. but with upwork, there's highly skilled talent from all over the globe. right at your fingertips. ♪ this is how we work now ♪

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we got this. we got this. we got this. life is for living. we got this. let's partner for all of it. edward jones good friday morning. welcome to another hour of "squawk on the street. i'm sara eisen here with carl quintanilla and david faber, live for you as always from post nine of the new york stock exchange take a look at stocks half hour into trading and the dow has gone negative. the s&p 500 down 0.2 masking strength in strength in consumer staples, thank you p&g,

health care, and consumer discretionary. the nasdaq is down half a percent on track for 1% decline, half a percent for the s&p on the week 30 minutes into the trading session. three movers we're watching. truist downgrades tesla to hold taking the price target down to 154 from $245 dollars per share, bearish on the product pricing the automaker did reverse course and raised prices here in the u.s. for models s and x vehicles more tesla later in the show procter & gamble, after beating earnings estimates more on that in a moment almost 4% move is a lot for that stock. the dollar index trying to hold on to its first weekly gain in two months as investors work through a mixed outlook from the fed and for the economy. the strong dollar indicative of the story of the week which is a bunch of members of the fed, voters and nonvoters, all

singing the same tune, which is we still have work to do to fight inflation. we're going to hike in may and then we're going to see basically the message. we heard it across the board and there were some new comments from some fed members, we have mester, bowman, we had parker and they're all reiterating this point that inflation is coming down they don't seem particularly worried about the bank stress, though they're watching it and watching for the impact of tightening lending standards for now they're focused on inflation. >> why arguably the market wasn't so hot on these pmis, the composite best since may, manufacturing best since september, services best since april of last year and we're right on the cusp of where data is seen as too hot and maybe some of these cautious commentaries from fed officials revert to saying we're thinking now june again. >> it's interesting because it's not expected to see these bursts of strength in the data,

especially in manufacturing, which we had written off and set us into a recession. even services started looking like it was rolling over jobs is, obviously, going to be the key. as long as we have the strong, healthy jobs market, which we do, you know, a lot of economists say that's keeping, you know, credit conditions in a good spot. it's keeping the economy overall from entering a deeper kind of recession. and you've got that in the fed speakers we have the -- we have patrick harker talking about additional tightening i felt this was sort of middle of the road for the fed. he mentioned that may certainly is on the table and looking for more hiking, he also indicated that there would be a higher bar going from there i anticipate that some additional tightening may be needed to ensure policy is restrictive enough once we reach that point, which should happen this year, hint, hint, coming close, i expect that we will hold rates in place and let monetary policy do its work that's kind of the message that they're all saying.

>> are you going to talk about p&g at some point? >> that's later. i'm saving it. >> i'm saving it as well and wanted to make sure. we mentioned the dollar and they do still talk about a 5% headwind from the dollar - >> they didn't take up - >> despite raising their guidance - >> why they didn't take up annual guidance on earnings but did on revenues. the story on the dollar everyone had written it off it's been in the pronounced weakening streak but on the back of strong data, hawkish commentary from the fed, dollar goes up i would just one note of caution, guys, because we've been talking about it pretty much every week we got the balance sheet data from the fed on the emergency lending last night and showed it tick up for the first time in four or five weeks. overall we're way down from the peak we saw in march but discount window lending, the traditional emergency lending tool, that was a little bit higher you don't want to see that, right. it indicates there's stress in

the system i don't think the market is too overly concerned with it right now, and there's still issues with lending, but something to watch. >> i'm glad you mentioned it you would have thought given the weeks we've had after earnings in particular now, the things would just continue to calm down. >> 69.9 billion as of wednesday borrowing from the discount window that was versus 67.6 billion the week before. yes, overall 316.5 billion as of wednesday from 312 billion the week before. a little bit of a tick up. >> where were we at our highs? >> 343 or so billion in march during the acute stressful period by the way these numbers are higher than during the financial crisis borrowing which sounds alarmist but they've been more in use and less stigmatized. that could be a reason they're ticking up, the banks don't feel as stigmatized using these it is something we're going to watch and watch the impact of lending and tighter lending standards. >> the banks don't want to use it if they don't have to and

it's expensive money and virtually impossible to get a real spread what is the discount window i mean 474 what is it >> 5. >> a 5 yeah around there. they have to pay it back, and it weighs on earnings schwab, we're going to talk to schwab in the next hour. benninger is on at 11:00 not from the fed windows but they've been borrowing to boost liquidity and weight on earnings looking for to that at 11:00 let's bring in markets commentator mike santoli with his take on the action this morning. stronger dollar, higher treasury yields, hawkish fed speak and yet, stocks have taken it okay. >> taken most okay and it's almost because the concerns tend to offset one another as we go along. i think it's confusing tape. it's a noisy macro environment nobody has high conviction in it the bullish situation would be -- this is probably

counterintuitive we're in a recession right now statistically in the middle and can see clear out of it. there's some coincident indicators that suggest maybe we're going to have that case. when we're in the waiting mode, on saying you still have good enough economic data for the fed to remain vigilant so we have to worry along that rail and the other rail, well looks like the economy is kind of in stall speed at best even if the pmi say we're at a 2% pace i get why the market has been kind of on an index level indecisive i don't buy the idea that market has been oblivious to the recession risk i look at individual stocks and sectors, how ford and alcoa and capital one and whirlpool have traded in the last year, i mean, they're all down big and under performing and all seem to build in some risk of economic downside so i do think that explains where we are at the moment still seems pretty benign as pullbacks go it will probably remain that way

if it's still just a few more percent front here every rally since october did have a pretty stiff pullback involved that gave up some of the gains. we'll see if we're in the midst of another of those at this point. >> what i think is a big doodebate in the hard versus soft landing camp where earnings go we're seeing all the productivity and cost cut measures stepped up and -- but not pricing in a recession where you would see a bigger drop. >> not pricing in what's been the average decline in earnings during a recession, that's true. the guidance ratio has been poor in terms of first quarter numbers, the ratio of those guiding down to guiding up is definitely higher than its been in the recent quarters in the long term average, but it's not -- the magnitudes are not tremendous maybe it's because inflation is still with us and supporting the top line keeping credit markets okay tlek have a cushion for the margins, but i agree that's a

big part of the debate we are after this evening going to be in the fed blackout. we don't have huge macro data coming in the next couple weeks. seems like the fed outlook is going to be baked after today unless something weird happens on the financial stability front. >> i was going to say, look at it next week it's gdp, employment cost index. we will get pce. >> that's true you know, to the extent that comes in way off the mark, then, you know, the same thing about the inflation data is, the forecast have had it pretty right. we were out of that zone where you have wide swings around the consensus. hopefully that - >> i feel like the market is not going to interpret gdp and pc fleshgs a fed blackout period and interpretation of the data is different than the market interpretation. >> yeah. you know, the market is still saying we can almost let the talk wash over us because we know what they're going to do. june is wide open. it could be a pause, could not be, but we're not going to know for a while, and if we get

anything it's a quarter point and the risk of a big -- the next big move, the market continues to say is big cuts even though the fed will never acknowledge or buy into that view until it absolutely has to. >> mike, thank you mike santoli. speaking of earnings and procter & gamble, it is headed higher after beating on top and bottom lines higher prices were the key helping offset lower demand for products like tide or pampers diapers. if you want to know the story of the p&g quarter, 7% organic sales growth what led to that 10% pricing and negative 3% volumes. that's how y get your sales growth if you look at the volumes across the five categories, the businesses of p&g, three of them were actually declining and two of them were growing only 1% there's beauty and there's health care. those were the growers grooming, fabric and home care, baby and feminine, all saw lower volumes.

so it was pricing. some of the places was high. fabric and home care, you're paying more for tide pods, fabric and home care up 13% on pricing. wonder where is that coming from it's the cost side actually, costs have come down and in the company's outlook they expect 2.2 billion headwind from higher commodities and costs and that was down from where they were expecting it 2.3. my point is we're wondering why inflation is high when the costs are coming down. companies have delayed their pricing action and they're still preserving margins p&g saw 150 basis points gross margin expansion and serve shareholders and business and keeping the prices high as long as they can. as long as volumes don't fall off a cliff they can do that. >> there was some reporting yesterday that they were deepening discounts on tide. that was out of reuters. doesn't sound like they were up to that very much this morning

on "squawk." they took price in january, february, and march and doesn't see a lot of trade down using private label as a proxy. >> look, the good thing, it suggests the consumer has been resilient. normally in a normal environment if you see price increases like that, 8 to 10 to 12%, you would see sharp volume declines. they haven't seen that it could start because they did talk about how volumes in europe were particularly weak down 7% during the march quarter so they could roll through some moderate price increases and start to bring them down here it is something we're watching they're keeping them high. by the way, i don't mean to single out p&g all the food companies doing this as well we'll get coke and pepsi they have been having remarkable pricing power too. but at this -- in this p&g we highlight that pricing is offsetting not just the volume flatness but also the costs which are coming down and moving in the right direction

it's the dollar which is keeping their earnings per share full guidance - >> bofa has deflation with two months in a row, that's a trend you want to see continue looking for easing on pricing. >> you want to see the companies passing it on not just on the cost side. as we head to break our road map for the rest of the hour a group of tesla shareholders taking aim at elon musk accusing the board of, quote, failing to adequately represent their interest we're joined by the letter's owe koh author next. >> meta stock is up more than 70% this year as it gets ready to report earnings next week is there more room to run. >> we have an exclusive withhe t ceo coming up after this break

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tesla down more than 11% this week a group of 17 long-term investors holding $1.5 billion in shares voicing some frustration in a letter to the board. they believe ceo elon musk is, quote, overcommitted and mismanaging the company. one of the authors of the letter chief sustainability officer ivan frischburger is here to talk about what is of concern. good to have you. >> thank you great to be here. >> this is sort of talked ability in abstract ever since he got into twitter and,

obviously, spacex has been another bucket of activity what set this particular letter off? >> well, let me start off by saying that we really want the company to succeed we're investors, significant investors into the company, and we think that manufacturing of evs, the clean energy, you name it, like there's a lot to benefit from here, and on behalf of our investors, we have a growing concern. it's distracted in its leadership and we've been engaging for a number of years with the company around some of the workplace issues that we think have held the company back. >> such as >> they have recently lost a couple of court decisions in the state of california around forced arbitration, so they are forcing companies or employees rather to sign on to contracts that just require them to go through arbitration in the cases of harassment or discrimination. this was something outlawed last

year by the congress for gender related issues, but it's still become a race issue within the shop floor of the company. >> you think it's broader than just sort of time spent on behave of musk is it broader than that? >> it is broader than that it's about the level of control and whether or not there's adequate policies and traditional governance that you see in most companies around the country to make sure the company is delivering and high functioning and rewarding investors. >> there are plenty of investors who would say social is not our concern or shouldn't be. you're making this more than a governance issue clearly in talking about factory conditions and things of that nature. why do you argue that's important to the performance of the company or something that you as a shareholder should be concerned about? >> look, i mean, from the business side, i think old business school saying, culture eats strategy for breakfast, right, and the employee culture,

if it's not working well, not a good relationship with employees and employees are having to violate contracts to go to the court system to seek redress for clear cases of discrimination, that's not good for the company. it's not great for any employee management dynamic. >> i mean, you're a fiduciary do you think if these were remedy mds in some way the stock price could perform better. >> this is governance. it's not just a social issue these things are related having the right kind of policies does increase performance. we know that but it takes the right kind of governance to put those policies into place, to oversea them, and do the kind of oversight that a company needs. >> is there anything new there there have been governance complaints about tesla forever is there any reason why you raise that now >> well, i mean, i think the growing frustration over the last year has been that his -- he's more distracted than ever

the company is facing more challenges, you know, in a lot of fronts and so i think it's a reflection of we've been engaged on some of these issues for a long time. this collective in the letter is a sense of over the last year of this sort of -- what's really going on here and starting to harm the company. >> why not just sell your stock instead of making an argument? >> we're there and represent multiemployer pension funds that take broad market exposures, not actively traded funds. we're there to represent a broad market and they're a big part of it i don't think there's many people in the market right now in america that don't own a piece of tesla and that's who our investors are. >> big part of the discussion on twitter about the letter this morning was whether musk would respond by engaging you guys or just calling you names on twitter. has there been a response? >> no. and we have tried to -- i don't know in the last couple hours

but we've been trying to engage the company for a while around the issues and they don't seem open to engagement at all. you might be right, that there's more engagement on social media than there is in conversation with investors. >> we'll watch the progress of -- at least the reception of the letter. >> thank you for having me here. >> thank you. meanwhile, speaking of meta, just overtook tesla in market cap for the first time in well over a year. can it keep rallying with quarterly results out next week. those two diffenert strategies on the margin fronts lately. "squawk on the street" will be back in two minutes. ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪

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the share price of meta is at a great run up about 75%. the market cap given that run just topped tesla's for the first time in 16 months. securities analyst has a buy rating, target price 257, joins us now we're going to hear from the company next week, i believe anything more they can say in terms of earnings or the commentary around it that will continue to move the stock higher or is it already reflecting all of this new focus on efficiency? >> you know, it's great

question i do think there's a lot of kind of macro questions that are kind of the -- starting to get answered as we go through the earnings cycle here and then answered more convincingly as the year progresses. my rating here, you know, we have a price target, but we think about it in relative terms, you know, and what is clear is that if the economy is going to slow and we are going into a recessionary environment, that's not going to be a good setup with anyone with ad exposure including meta. the one thing that distinguishes meta and why it could be an outperformer is their new focus on cost cutting. you know, what they've done so far is impressive. what we've seen in the sector is that there seems like there's a real opportunity if you're put to it, to cut costs. you know, i hesitate to point to twitter, but they've raised the question of how low can you go with head count to run a social media company. this model seems like, you know, if you're committed there's a

real opportunity to hang on to cash flow if times get tough you're protected on the downside if the economy doesn't weaken, easier comps, revenues accelerate, meta layers on top of that, improvement of the handle offing of apple's privacy changes and not exposed to a.i. headwinds that google has been wrestling with things to like in both kind of scenarios. >> yeah. listen, i mean, zuckerberg in that town hall yesterday indicated might be willing to do more cuts if needed but investors want to see growth what would you hang your hat on in terms of significant growth prospects for this company given the meta verse doesn't seem to be something to do that with right now? >> to the meta verse i focus on structuring. i think rally is another call option if they were to spin that off into a separate company which

they never suggested they would do, but should and if they did the cash flow would be 20% higher the multiple better, the credibility better leave that aside, look, i think that the growth prospects are -- if the economy is stable from here, comparison to ease, growths should improve, monetization is improving should layer into the model and they're doing some nice around e-commerce and modernization of messaging, click to buy within whatsapp internationally moving into this country, retail focus, kind of advertising a growth element. these guys will participate more in that, you know, through that feature. >> good preview of what we're going to get pretty soon thank you. >> great thank you. coming up, market is pricing in another rate hike in may as the fed continues the fight against inflation. former dallas fed president richard fisher will join us next the only thing i regret about my life was hiring local talent. if i knew about upwork. i would have hired actually talented people

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i'm seema mody nato secretary general jens stoltenberg spoke with reporters ahead of a meeting in germany saying all nato allies have agreed that ukraine will eventually become a member of the alliance but the main focus for now is to ensure that country prevails against russia. sources telling nbc news federal prosecutors are considering charging hunter biden with four possible charges. they include two misdemeanor counts for failure to file taxes, single felony count of tax evasion and a charge related to a gun purchase, a potential felony the decision on which charges to file if any will be made by u.s. attorney david wise appointed by former president trump. and conservative talk radio host larry elder running for the republican nomination in 2024. elder made his first bid for public office in 2021 when he saw to replace democratic california governor gavin newsom in a failed recall effort.

elder joins a growing list of republicans that include nikki haley, asa hutchinson and former president trump. >> thank you we are an hour into the trading day. let's get over to bob pisani now and see what's caught his attention so far this morning. bob? >> good morning. there's been meant of selling this week but none is sticking several down days at the open and the markets have come back same today ashlgs though it is defenses take a look at the sectors, consumer staples, health care, utilities. energy has gone positive banks, which have been up and down all week, also starting to move into the red. that's really the story this week remember, a lot of big regional banks have potentially reported. we had regions financial report this morning it was a small miss. the stocks are generally trading up stability not where next year where they were, but stability is a good sign a big story this morning about

some of the regional banks might be facing much more stringent regulation and i think that weighed on them early on as well bottom line is, some signs of bottoming in the regional banks is a good sign another positive sign for people worried about the effects of the banking crisis money market flows have stopped seeing big inflows. remember what happened during march and the big crisis people pulled money out of their savings account put them in money markets where they got higher yields, some felt it was safer and the assets under management on the money market funds went up to 5.27 trillion not too long ago they are now stabilizing and starting to come down. that's another sign that sort of panic around the whole banking crisis is calming down markets doing well, but not a lot of real breakouts. it's essentially defensive names. there's a lot of new highs in defensive stuff. hershey's clorox, lily, hca, mcdonald's, yum brands all consumer classic defensive

names, but the rest of the group, the cyclicals, like industrials and materials are starting to move up. here's where we are. the bottom line is, it was not -- it's so far not been nearly as bad as anybody who was afraid we got 89 companies reporting, 76% beating, close to the average good enough for government work. the beat is 5% for years, prior to covid, the average beat on the s&p was 3 to 6% so this is within the average before covid we had some whacky numbers during covid try to look at precovid when you look at the numbers. 62% beating on revenues is lighter than historical norms. the key point, guys, for the second, third and fourth quarters, the numbers are not coming down and that's because the analysts seem very reluctant to cut second half numbers ahead of the federal reserve there is still a belief out there in the soft landing that is largely predicated on the fed not only stopping, but towards the end of next year, towards the end of this year, beginning of next year, cutting rates.

analysts seem reluctant to cut rates even though a lot of people don't want to believe in the soft landing and that's the fight the stock market is having with itself. back to you. >> bob, thank you. bob pisani lot of fed speak over the past few hours mostly reflecting the higher for longer view. joining us former dallas fed president and barclays senior adviser richard fisher welcome back good to see you. >> good morning. >> why isn't the fed more worried about what happened with bank failures and the impact that's going to have on the economy and stress in the system why doesn't it seem as worried as the market which is pricing in rate cuts >> well, i'm sure they're worried about it, but i don't think they're worried about it being carried away with regard to the past -- the comments just now, if you look at the discount window and the special lending facility, those numbers have ticked up in the last week but they're not extreme.

it doesn't appear the system is collapsing that's important and yes, banks are tightening, but what it comes down to is the tradeoff between fighting inflation and creating additional unemployment in a period where employment is still very strong. and we saw it, by the way, in the global pmi numbers that just came out there still is inflationary pressure and taking pricing as far as they can take it, their inputs are costing a little bit more even though labor is more available it's expensive this is the tradeoff and that's what they're going to do that's what a central bank has to do. >> there's just this nagging ceiling, though, that maybe inflation is coming down pretty quickly or at least we're starting to see disinflation we agree we've seen the peak on inflation and that the impact of all of these hikes has not been fully felt and we could see things breaking like we saw with

banks and the fed is looking at data that is backward looking than forward looking on the economy and inflation? >> the fed has access to every data point and survey, anything the market could look at the fed can look at in spades. so you have to be careful here i mean, look at what happened in the uk their inflation came down slightly, 10.1%. it's hard to slay this dragon once it gets out and i do think that's the principle purpose of a central bank so 5% inflation, 4% inflation, unacceptable you have to be moving towards the 2% target. that's your job. and at 3.5% unemployment, still more people trying to find people to work than people willing to work, then you have some leeway to run a tight ship and to be sure, to your point, the markets are tightening and the banks are being more stingy and not lending as much.

it's hurting the commercial real estate sector, it's killing venture capital. anybody that's providing loans or some kind of credit or investment to the sectors is pulling in their horns that's helping but it doesn't seem to be doing too much too quickly here and the fed still has to slay the inflation dragon. >> at least not yet. >> right it's cumulative, you're right. go ahead, please. >> what is the best way to measure the credit tightening you reference? we can see it or hear about it i should say, particularly and certainly in areas that will have particular weakness such as commercial real estate, but how do you measure the impact it's really having? >> i'm sure there are plenty of mathematical formulas to do so i think a lot is just a feel and i want to remind you, and i hope everybody understand this, fed policy is not driven by mathematical precision they have every model imagine from the biggest model of the u.s. economy to everything else,

they have every data inflow you can conceivably get whether the traffic patterns by waze or any what i call contemporary instant data that you can monitor thanks to technology. but if it comes down to judgment, and it has to be feel going to have to sense this as much as possible looking at what they look at things are slowing down. we see it in the freight data. we see it in all kinds of transportation statistics. everything but restaurants seems to be slowing down the question is, is it slowing down enough to quell the inflation dragon so far it doesn't seem to be doing so. >> i'm glad you brought that up. we talked to bostic earlier in the week and if the redfin data is on his plate, he said absolutely, we watch that closely. your notion these are human beings making judgements makes sense. my question is, how often does

the staff disagree with say the committee about beating recession? is that notable? >> look, you know how the meeting is run beginning of every meeting and throughout periods between meetings you're getting info from staff they provide a very precise and sharp briefing at the meetings the first day, and then the bank president followed by the governors until the new york fed the second to the last to speak, provide their input as well. and they've been getting their input from their own staff i had [ inaudible ] at the dallas fed they would brief me and i would sort that through my mind and present what i thought was the best representation of their thought with some opinion on top of that. that's the way the system works. these are 18 individuals, thoughtful, devoted to their duty and what they're trying to do is provide the best judgment possible again, it's not mathematically

precise, despite the dot plot, et cetera. you have a great group of people providing judgment led by the chair who is determined that we're going to have to deal with this inflation problem, otherwise he goes down in history as a failure and the committee does as well they have to deal with this problem. it's eroding our country. >> i'm sort of glad we went down the data rabbit hole, do the fed members get the senior loan officer survey that comes out a week later to the public after the fed meeting, but i believe the federal reserve members get it into the meeting it's become like the most important data point here because that's the read on what banks are doing with lending >> remember, sara, you also have your own discount window each of the federal reserve banks. i can tell you they are surveying every bank in their

district or a good representation of the banks, to get a feel for what the impact has been they know what's going on. they're talking to the bankers, big, small, middle sized bankers and reporting that when they have input into the stuff that goes into the meeting, the fomc meeting. that's being done as we speak. it's done constantly so yes, they do have access to pretty much any data point that you would like to have, they have it. that doesn't mean they can't make bad judgments obviously, they made a bad judgment by thinking that inflation would be transitory. all this contemporary data they can look at, the data points, labor services and everything else, they missed it it's a judgment business and that was just a bad judgment. >> really quickly, debt ceiling starting to heat up. wall street is paying attention. not so much in the stock market because we still might have two months or so to deal with it, but in the short-term treasuries

you're seeing yields rising. how does that feed into the recessionary outlook if there is some sort of last-minute deal or potentially technical default as crazy as that sounds >> yeah. i'm one of the people who doesn't believe we'll do fault we can't afford to do that, near the democrats or republicans -- neither democrats or republicans can afford to do that. if we were to default, which i don't think will happen, then, of course, you would have a tighter credit squeeze but you're right about short-term rates if you look at the very short term, we're at 5%. even out to the 10-year we're still at 3.5 roughly, 3.6, between those two. this is pretty tight monetary policy, short-term all the way to the 10-year and the thing, sara, i keep harping on is this, we live forever with free money. we're still not going through the adjustment process -- and it

changes the way you have to discount your outlook for the future it is a tightening that's taking place. i don't think it's fully digested yet we saw a big failure of a multifamily unit in my district in houston the other day because they couldn't meet their payments 3,200 units. this is just begun in my view. and as it gains more digestion, then i think we're going to see further failures and that will just, again, lead to banks in have to run tighter policy to be more responsible. >> richard - >> [ inaudible ]. >> yeah. >> sorry. >> go ahead. did you have a final thought i thought you were done is. >> no, i just think -- i don't think this is over and i think we're going to have a risk off atmosphere for some time that does slow the economy down. it does reduce inflationary pressure, but the fed has a duty and until they deliver on that

duty i don't think they're going to be done it could be after the next meeting. we'll see. >> richard fisher, thank you very much. good to talk to you today. >> thank you still to come this morning, csx with its drop in volume for the quarter. speaking of all of this. higher shipment rates driving profits. we'll break things down with the ceo, as the dow habe in s enand out of the red, currently down 25 . burger and fries... soup and salad. thank you! like your workplace benefits and retirement savings. with voya, considering all your financial choices together... can help you make smarter decisions. for a more confident financial future. hey, a tandem bicycle. you can't do that by yourself. voya. well planned. well invested. well protected.

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csx surging on the q1 earnings beat. morgan brennan having covered space this week is here with a special guest as well. hey. >> hey listen, i like to cover things that move, that are big and powerful and that move it's great to be here with you let's bring in the ceo and president of csx, joe hinricks beat on the top line offsetting softer volumes. the headline from the conference call improved service. what's driving that? >> really it's our people, morgan

our team has come together and focused on improving the employee experience and service to customers and we had record levels of compliance in the first quarter and it's about our team coming together and we believe that working on the one csx culture has contributed to that service level being at all-time highs >> all right so you took the helm last fall and bring this unique perspective to railroads, meaning former customer of the railroads, how is that informing strategy at this key moment? because the industry is shifting away from precision railroading and we have lawmakers that is proposing legislation focused on rail safety? >> yeah. it's a critical time for the industry and at csx we're trying to lead by example first and foremost prioritizing the service we provide to our customers. a number of things over the last several years led to lower levels of service to our customers and we believe that we're a service business so focusing on that customer service is paramount we do that through our employees so working with our unions and leading the templates to set for

the industry on paid sick leave and i believe having been a customer for 20 years, we're never going to lose sight of the fact that we'll serve our customers well and get rewarded by them giving us business and bringing more work offthe road or winning share to grow our business. >> we have seen earnings from a number of trucking companies this week and the term freight recession has been raised more than once. we are seeing trucking rates fall what does that mean for rail demand at csx and ultimately does it mean for the strong pricing you've been able to realize so far >> yeah. if you look at the first quarter we saw strong growth in both revenue and volume on the merchandise side of our business, things that typically only go by rail. think of autos, food products and aggregates and metals and that business continues to be strong the intermodal side of the business, half our volume, only 20% of our revenue, has been down significantly, more associated with trucking

what we've seen in the international market, international imports are down significantly tied to retail, whether it's higher inventories or market demand, we'll have to see, and that business is down significantly. but the strength of our business is in the servicer providing to the larger customers a larger revenue per united move on the merchandise side, and with coal also, and we think that will continue. >> and that's sort of like a good segue into macro in general with you, because csx and the other railroads do move so many different types of goods across the u.s. and across north america in general so, what are you seeing? what is your read-through on the state of the economy through the rest of the year >> yeah, morgan, i'd say it's a mixed bag right now. i mentioned earlier, we see strength this year in autos, year over year metals have been strong. rocks and construction are up significantly. however, chemicals have been mixed, which is a big part of our business second half of the year it came down came up in the first half, first

half of the year it's come down again. phosphates and fertilizer are down pretty significantly. the biggest piece is in the retail side, which is the intermodal business. that's soft and we think it's coming back in the second half of the year. how strong it comes back, we'll have to see. the international shippers, the freight liners are telling us they'll see more volume in the second half of the year. >> csx did have a train derail in the last 24 hours, no one was injured. just want to get your thoughts on rail safety, on derailments and just as importantly, what the impact has been of that east palestine derailment by your competitor in the eastern u.s., norfolk southern, on business in general for csx. >> yeah, very important topic. certainly, safety is our highest priority we have big equipment. you mentioned it in the beginning. we move a lot of goods, obviously, very important for us we're proud to be the safety leader amongst the u.s. class 1 rails over the last several years. we're not satisfied.

the ins incident you're referring to happened in our yard, a human error. we have to continue to work on discipline processes and educating and training the legislation that's being discussed, i'm part of that conversation, we're all part of the conversation as csx we want to be part of the solution we want to be helpful and we want to make sure we're making progress, not just taking action we're part of that conversation and looking forward to it. i think the rail industry will come out stronger and safer as a result of all this. >> joe, great to speak with you today. love the live shot csx stock up 3%, leading the dow transports joe hinrichs of csx. >> why are we seeing so many crashes? is it more than historically >> no. the trend over the years in general have been less accidents, less major accidents and he derailments the majority of what you see tends to be human error and accidents that happen in rail yards, for example

with east palestine, derailments in general are in focus and you're seeing that legislation move through congress. >> good to see you. still ahead, charles schwab ceo, walt bettinger on the banking crisis and a whole lot more be sure to tune in monday. coca-cola shares with a slight bounce this month. ceo james quency will join us exclusively. that company reports earnings monday morning we're back in two nus.mite ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪

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. evercore adding starbucks to tactical outperform growth as they see same store sales growth ahead. others kate joining us with what to expect next week. >> consumer spending in the face of inflation will be in focus as well as any pricing power and trade down from higher cost to lower priced bank of america out with a note on consumer perceptions of higher prices, noting that customers are feeling those hikes at bars and restaurants the most, only after grocery tuesday's a big day. mcdonald's and chipotle will be out with results for the quarter. mcdonald's stock flyer higher

and higher as investors and analysts seem confident in their ability. oppenheimer calling it battle-tested in previous recessions thanks to the pricing point. chipotle, we'll have an eye out to see if that continues last quarter was weaker than expected, but up 5% this month and 30% this year. >> kate rogers, thanks. erodhave a great weekend, evyby. "squawk on the street" continues after this break main streets as the us, you'll find pnc bank. helping businesses both large and small, communities and the people who live and work there grow and thrive. we're proud to call these places home too. they're where we put down roots, and where together, we work to help move everyone's financial goals forward. pnc bank.

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good friday morning. welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla. live on the floor of the new york stock exchange. setting the agenda today, an exclusive with the ceo of charles schwab, his first since the company reported results, 11% in profits and pause in the pieback. fed speak pointing to another 25-basis-point hike rate in may. and kkr searching for opportunity overseas we'll hear more why they say a nuanced approach is needed while picking international equities and will name their favorite market. > top of