the s&p 500 and nearly half of the dow. half of the s&p is more than half the dow it is supposed to be 50% this hour, coke is set to report see if there is any fizz in those reports. credit suisse with $60 billion in outflows in the first quarter collapse details straight ahead. plus, bed, bath, beyond. bankrupt the struggling retailer filing for chapter 11 very sad we'll always have bed, bath & beyond starting to liquidate assets they never had beds. it is monday, april 24th, 2023 "squawk box" begins right now. good morning

welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. look at u.s. equities. modest declines. dow futures off 72 s&p futures down 8 nasdaq off 18. this comes after the markets edged lower last week. the dow actually broke a four-week winning streak falling by .20%. the s&p was down 1%. check out treasury yields. the 10-year treasury is sitting right around where it has been at 3.541%. 2-year treasury at 4.16% on the "squawk planner," we will get shiller home prices tomorrow morning on wednesday, durable goods for the month of march on thursday, jobless claims and

gdp in the first quarter on friday, the march read on personal income and spending a critical week for earnings one-third of the s&p reporting and nearly half of the dow coke reports around 7:00 a.m first republic bank reports after the closing bell that is important given what has happened with the regional banks and that in particular tomorrow, u.p.s. and 3m and general motors and general electric and mcdonald's and verizon before the opening bell. after the close tomorrow, alphabet and microsoft and visa. wednesday, boeing before the bell and meta after the close. on thursday, caterpillar and merck and comcast. on thursday afternoon, amazon and intel. on friday, exxonmobil and chevron. >> that was quite a summary, becky. >> thanks. glanced what was on the screen.

>> she just did that off the top of her head. big news from parent company took place over the weekend. nbc universal ceo jeff shell is leaving the company after the investigation into inappropriate conduct. shell said he had an inappropriate relationship with a woman inside the company joining us right now on a story that has made waves from new york to hollywood and what is next for nbc universal matt bellamy you were up late writing today's newsletter >> good morning. >> we were all shocked by the news we all know jeff very, very well i think we are all trying to understand what you think the impact will be on nbc universal going forward. >> i think it is early, but the company went immediately and appointed mark cavanaugh a comcast loyal executive who

will run the nbc universal asset for now. all of the directs report to shell will now go to cavanaugh we will see how long that lasts. it will signal the future of the company and what they choose to do here. whether they elevate someone internally somebody who runs the news division or mark lazarus or donna langley who runs the film department to oversee the company or if they look outside the company for someone else to come in and run it there is speculation about the future of the entire nbc universal asset. >> my sense is the role might never been replaced. is that possible >> it is possible. the roberts family who controls the company like to keep it close to the vest.

cavanaugh is someone they can trust. he is more of a financial person rather than operations guy like shell. shell came up through television and experience with the film division then he was groomed and put into the role when steve burke left the company in 2020. it is a different approach here. perhaps they just do that and don't replace him. perhaps they do or perhaps the company does a transaction where it merges with a warner bros. discovery or paramount global. >> this is not a set-up for that this is not an aqua hire situation. you are merging with another company to capture a ceo >> no, no, no. obviously this was not a planned situation. they did not know this was happening until recently i'm just looking down the line at where the company is and there was speculation last year

that the company did explore merging nbc universeal with electronic arts. in that scenario, they would have another person besides shell. if they are looking in that direction and something to do with the nbc universal asset, perhaps down the road, a merger with the leadership coming in could be an option >> how does this impact the streaming wars and potential deal with hulu i think jeff shell was well known for thinking about hulu. he talked about hulu publicly. do you think that changes the dynamic in terms of his influence wanting it or not wanting it relative to others? >> that's a good question. i'm not sure it changes the overall company strategy peacock has made great strides the last couple years. it is still smaller than rivals at 20 million subscribers.

less than one tenth of netflix something to bulk peep acock ine future disney owns a majority of hulu and the option to buy the rest coming up. that is an asset that will be $27 billion in value of h earthq ulu it is not easy to bulk up in streaming. i'm not sure they know what will happen there >> if you think of driving the company this size and unit, clearly, and i know mike since his days at jpmorgan chase it has been a remarkable thing to watch his rise. do you think you can run a company without having a unit head or direct unit head, if you

will >> we will see you know, this is someone who is coming in from the comcast side. the previous leader in shell was someone who came up through the trenches within the content business this is not a content business person you know, we'll see what they do with the reports perhaps giving them more authority. >> what is the scuttlebutt in hollywood? the agents start calling do they need to have a relationship with cavanaugh? that is the issue with which you live >> judging by my inbox, people don't know this is the industry which looked to run meyer when he was

forced out for his own sort of sex scandal. he had an inappropriate relationship with a woman. jeff shell stepped down. this is a bumpy road in the wake of that, wow what next could happen now we have this with jeff shell who was someone who had deep relationships in the hollywood community. people are in shock. yesterday was like again another one? >> matt belloni, it was a shock for me and others. we appreciate you joining us hope to talk to you soon as this story continues. >> thanks. new overnight, credit suisse revealing it suffered net asset outflows of $68 billion in the first quarter collapse that culminated in the emergency rescue by ubs. the bank said outflows have moderated, but not reversed.

it posted a one-time profit of $14 billion because of the controversial write off of at-1 bonds. you see the stock up 2 cents. coming up, we get you ready for a busy week of earnings. what happened the last three months and next three. we will get an idea of what the companies think. they might not been any better than the rest of us. several technology heavy hitters ready to report. alphabet, microsoft, amazon. important data points. later, we talk to brad listen a-- brad lander he is one of several questioning elon musk's leadership you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by baird.

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investors bracing for another big week of corporate earnings with one-third of the s&p and half of the dow reporting. let's talk about alphabet and microsoft and meta and amazon on deck

we have sylvia jablonski with the latest sylvia, overall, you are well aware of the concerns. whether the fed or the fear of recession or the consumer getting tapped out the overriding thing you point out is for 100 years, stocks are the best performing asset. maybe they are not cheap, but if you have time and dollar cost average in or however you do it, over time, if you are not at retirement age, this may not be a terrible time to buy equities. >> that's right. i think there is always a region -- reason to be in the market and own one or another particularly if you have a long-time horizon. if you can hold out for the next couple years, all of the things that we're worried about that you mentioned at the top, fed

raising rates, risk of recession, all of these things will be resolved one way or the other. if you look at the s&p for example, 20% of names reported 77% have beat. that is taking banks there the s&p is also up 7% first quarter. when you had that in the past, since the '70s, there hasn't been a year where the s&p hasn't finished up for the year earnings recession is two negative quarters year over year we had that energy since second quarter of 2022. there is a lot of reason to think we already have been in some sort of recession in terms of the market and earnings if the fed is closer to the end than the beginning, maybe the picture is not as bad. stocks are lower now than two or three years. you know, it does behoove investors to pick up a couple of

years. >> if you can buy stocks at or near the last hike, until the pause, you can almost like night follows day. a year later, stocks are higher. it would be nice to know if this would be the last hike does anyone know what do you think? >> you know, i think it should be i don't know if it will be you see pmi coming down. the jobs data is strong, but softening a little bit inflation is coming down now it is looking like it is back in the lineal path again. i think we have earnings recessions and the economy is slowing. itwould be tough if the fed just kept going. to avoid a hard landing, the fed would have to stop and take a look around for a while and digest what the markets and economy are doing. in my view, they should stop

maybe one more hike in there i don't think there is a need for that to your point, if the fed continues to hike, then stocks will become cheaper because the market will pull back. >> you mentioned the earnings with the caveat a lot of financials this could be important this week do you think 77% beat expectations do you think that is the norm now or could things change significantly when we start looking at those names that we're looking at right now >> so this is the first earnings season that everyone is probably the most unsure about what will happen in the land of tech -- >> i think she wants a really good answer for this one she is measuring sylvia, can you hear >> i can hear you. >> i don't know what is happening. >> you are the only one who can't hear her >> we can hear you just fine

keep on going. keep on trucking >> the most worried about tech >> i missed that will it be better or worse ' '70s beating the financials or not? >> if all of the price cuts or layoffs and things they have done improve margins, there is a shock. it is up in the air. there is a lot of uncertainty. i think tech has to perform if the market keeps going >> okay. sylvia, thanks i don't know how that happened >> thank you. >> we had so many attachments. here and here. very good. thanks when we come back, most high school students in the united states don't take personal finance classes. after the break, we will show you a school where it is actually required. later this hour, dow's

coca-cola expected to report we will bring you reaction and the numbers on wall street "squawk box" will be right back. charging something like a hundred bucks a window when other guys were charging four to five-hundred bucks. he just didn't wanna do that. he was proud of the price he was charging. ♪♪ my dad instilled in me, always put the people before the money. be proud of offering a good product at a fair price. i think he'd be extremely proud of me, yeah. ♪♪

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and this is ready to go online. any questions? that -yeah, i got one.irst. how about the best network imaginable? let's invent that. we don't have time for lag or buffering. who doesn't want internet that helps a.i. do your homework even faster. come again. -sorry, what was that? the next generation 10g network, only from xfinity. more states are requiring financial education in high school, but most students in the united states don't take a personal finance class sh sharon epperson visited a small high school in vermont >> becky, i went to a high school last week and i spent the morning with a devoted teacher who is really on a mission her high school has about 200 students from many countries speaking 20 different languages.

she is ready to teach personal finance to every one of them students at this high school are required to take a personal finance course to learn about money management before they graduate. >> applying for college and loans. >> how to write a resume. >> you can have fun. >> reporter: courtney is teaching about earnings, savings and spending. >> you have to buy all of the things you want. you have to think about how long we have to work to pay for it. >> reporter: key steps in budgeting for the first a apartment. a bill to make a personal finance course a graduation requirement at all public high schools in vermont has stalled in the statehouse. you are looking for a standalone class for all students to graduate >> i see the impact every day. every day in my class, students are engaged and asking questions and bringing information home and an applying it to their

lives. they report to me they are making better financial decisions. >> reporter: and research shows the students are not alone professor carli has studied the outcomes >> you see improvements in credit scores and reductions in delinquency. you see less reliance on credit cards. >> reporter: in eight states, all high school students are required tie a no take a semestg course ten states are in the process of that requirement >> i have to take the class. it helps me start investing. >> reporter: students say that everyone could benefit from a financial literacy class >> do you see yourselves as advocates for personal finance >> yes >> it is one of the few classes that no matter what you will do,

it can apply to your life in some aspect. >> it can also help to improve the financial well being many polls show there is popular support for financial education. many students around the country may not have access to the personal finance classes due to budgets and other curriculum demands. >> what are the challenges it is shocking there aren't personal finance classes offered in more schools. >> there is a lack of teacher training a lot of adults are not comfortable with their personal finance let alone teaching students that may be a concern among some districts and teachers with training there are non-profit organizations that can help like jump start coalition and next gen personal finance there are resources to get the teacher training. >> there are schools that teach it as component of another class. does that fill the bill? >> it is not a guarantee

you are not assured you get the class. what researchers have found when it is embedded in a math or social studies class, they are not getting to all of the students there is an inequity of access >> not to mention the cur curriculums are pretty full. >> that is another concern when that happens, only 40% of students are getting that education. >> sharon, thank you good to see you. >> good to see you >> by the way, cnbc has free resources to learn about budgeting and savings. you can sign up for the newsletter money 101 at cnbc.com/money101. coming up, democrats in congress calling on president biden to negotiate with kevin mccarthy on the debt ceiling. and ahead, mohamed el-erian

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good morning welcome back to "squawk box" live from the nasdaq market site in times square. let's show you the futures big earnings numbers coming throughout the week. lots of other news dow right now off 60 points. nasdaq looking to open down 23 points s&p off 7 points becky. thanks, andrew let's see what is happening in washington house speaker kevin mccarthy will have the votes to pass the debt limit later this week the plan could increase the debt ceiling by $1.5 trillion and aims to cut $4.5 trillion in spending over the next decade. for a lockok ahead, let's bringn judd gray and donna edwards. thank you for being here donna, let's start with you. you don't think this is something that will get resolved any time soon? >> no, i really don't.

i expect -- take a look at the window between july 4th recess and august rest cess that is when i expect heavy lifting to happen. speaker mccarthy is not serious about the proposal he knows president biden will not agree to a set of spending cuts to major priorities of the first term of his administration it is not serious. i expect it will go to the senate where the leave lift will happen and come back to the house. there will be a set of senate negotiators, i believe bipartisan, to get to 60 votes to send the debt ceiling increase during that time period over to the house. >> judd, i take it, you think neither side is serious at this point? >> right now, we are in a political position mccarthy plan points out it is

not viable it is foolish when you think about it over time with the divided government with the negotiations on default language and extension of the debt limit. i think where i disagree with donna is the time may be off revenues were down in april and it is possible in june we could run into the wall. they have to get serious iron ironically, the group of bipartisan people put forward the exact answer to purvcpursue they put up legislation to come back with a proposal which would mitigate, if not eliminate -- mitigate the deficit and debt. it would have to be bipartisan like simpson-boles, it would

work that's the path they should take it is a compromise path. the president doesn't lose it would take both sides coming to the table to vote for it >> judd, when you were in the senate, that is the type of plan might have passed. it seems things changed. fewer people in the middle willing to make the changes. if they did a simpson on it, who are the people loudest to sit down at the table and make a compromise >> you put strong players on the committee. as it were with simpson, a lot of very conservative people and liberal people

they were people there to govern can you find those people in the congress today yes, you can what we hear from, unfortunately, are fringe people who have been elected from districts which elect fringe people there are still a lot of people in congress who want to govern and do things correctly. i think there is enough goodwill to accomplish this right now, the problem is political leadership i don't see the president showing a lot of political leadership i think he is playing politics here mccarthy has the votes however, default is such an unknown area nobody knows what happens if we default on the debt. the fed can keep printing money, but you will see a massive disruption in the economy. if the president thinks that is not coming back on his head, he is not thinking too straight. >> donna, do you agree with the

assessment the idea that there is a possible path to this and that political leadership is lacking on both sides? >> look, i think a year ago if we talked about bipartisan panel that would be a different question i just don't think that's where we are right now i think the president was waiting to see what republicans and house republicans put on the table. now the serious talks will begin. i think you hadn't up to this point seen mitch mcconnell up to it that is where i think the deal is going to get cut. look, this is going to require give and take on both sides. the fact is we can't default that is a reality check for all of us. not just our domestic economy, but global economy depends on this when things are volatile. all parties better get serious on this one.

>> donna, do you think default is possible? i'll ask both of you most people, the conventional wisdom, believes it goes to the wire donna, you first >> i don't know. i think i'm going back to when i was in congress in 2011 and we came very, very close and we look at the downside of that we have a more polpolarized environment now. it will take serious looks to get this done. >> judd? >> it is likely. >> likely we default >> there's a default and it lasts through the weekend or longer the house does not have the passage right now.

the president is being pushed by people who think there is big political advantage and republicans taking the blame fo it this is not shutting down the government this is shutting down the economy for all intents and purposes the president will take a lot of pain if he goes down this it route and sits down with negotiations i hope donna is right. i hope they bring sound thought there with mitch and chuck they know how to make a deal you still have to get that through the house. that is a real lift. >> judd, what happens? is that a situation where mccarthy pushes to get something done and you think he loses his house? >> absolutely. a distinct possibility he signs on to the agreement with democratic pluses in it, so to speak. he might lose his speakership.

the hard core in his party -- i shouldn't say that hard party in the house is not necessit necessit negotiable he has to get democrats to pass it when he gets democratic votes, he puts had his speakership at risk >> sometimes i wonder, judd. sometimes i wonder i'm kidding. >> so do i >> i don't have those concerns >> wow that is more than political theater we're talking at this point. >> catastrophic. you just can't default on the dollar that's what wit comes down to ad expect the currency to be the

dominant currency in the world it is so stupid. it doesn't have to happen. there are things the white house can agree to that the republicans would like the republicans have to vote for passage of the extension of the debt limit at some point the deal is there. the question is the leadership to get it done my concern is we don't have leadership on either side with the strength to accomplish this. >> donna, when you talk about being there in congress in 2011, when we almost defaulted, what were the arguments that swayed people holding out in the end? what pushed it over the finish line >> i think at the end of the day, i think, you know, the leadership, republicans and democrats in the house, recognized we couldn't default it meant we had to come up with the right number of democrats and right number of republicans to actually pass the bill. that, of course, resulted in a

lot of anxiety on the republican side at the end of the day, we ended up losing another speaker. i do think it is all on the line this is going to depend on smart people and serious people recognizing that the united states cannot possibly not pay its bills and allow us to go into default this is not -- this is not, you know, not being able to visit a national park. this is about the entire domestic and global economy. we have to pay our bills >> i want to thank both of you this gives us something to worry about with wall street and the economy and beyond thank you, both, for your time >> thank you >> thank you coming up, bed, bath & beyond filing for bankruptcy

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bed, bath & beyond, famous sign you see there, filed for

chapter 11 bankruptcy protection yesterday after it failed to raise enough money to stay alive. the retailer has been warning of potential bankruptcy since way back in january. the company's 360 namesake stores and 120 buy, buy baby locations will remain open for the time being as it begins to close businesses and liquidate assets. and johnson & johnson is set to begin a road show for a spinoff of its consumer health care business. it will have a ticker of kvue and could meet with investors as early as today the company will house johnson & johnson medicine including tylenol and band-aids and aveeno the goal of the ipo is to raise $3.5 billion or more and

valuation close to $40 billion that would be the biggest ipo in the quiet year to say the least for public offerings. meantime, "super mario" topping the box office again $58 million in north american ticket sales global total $871 million. the movie is a collaboration of universal and nintendo which is owned by comcast. when we come back, we will talk to new york city comptroller brad lander. one of 17 tesla investors accusing the mismanagement and questioning elon musk's leadership you can watch us any time live look at that beautiful shot of the capitol in washington. you can see that right now on the app if you have it we are cinrit omg ghback after this

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welcome back to "squawk. a group of 17 tesla investors sent an open letter to the board of the company accusing it of mismanagement and calling for a meeting to discuss elon musk's performance. i want to bring in one of those investors, brad landers, new york city comptroller. his first interview since he signed that letter, and we're thrilled to talk to him this morning to understand why he decided to sign that letter, brad >> good morning, andrew, it's great to be with you again this

morning. the new york city five pension funds hold over $750 million in tesla stock. for a long time we saw it as something that was adding a lot of value, has been adding a lot of value to our portfolio. we're concerned with the ceo's attention seeming to be focused much more on twitter and on spacex than on tesla as if facing severe challenges in the marketplace. and we need a ceo that's focused on the company >> so how do you think about that position, if you will, versus just saying i should sell the stock, meaning if you don't like what management's doing, don't own the stock or are you a long-term holder of this stock irrespective of who's running it. >> pension funds like ours, we own broadly across the economy we are long-term holders we've held the stock for a long period of time our way of adding value. we also own at gm, we own broadly across the economy sprks so what we do as shareholders is try to make sure that the board of directors is providing oversight of management,

especially at critical times like this one. >> what do you make of the argument that new york is a state of democrats, it's a blue state. elon musk has, i think, uniquely come out quite publicly, at least politically seemingly on the right or at least on the right on a lot of issues these days, and that this is somehow retribution. >> look, we don't engage in -- he's welcome to engage in politics as much as he wants to engage in politics what we want at tesla is a ceo that is focused on running tesla, tesla's facing a whole set of challenges as new car makers come into the ev marketplace. you can hear that on the earnings call last week, and just what we're looking for as a ceo's focus is not on politics, not on twitter, not on spacex, but whose focus is on delivering good returns for shareholders. >> do you think there's been a

shift. clearly he took on twitter which is a third company or maybe a fourth company, you could add neuro link, and now you're at 5. it's not as if the investors in tesla didn't know that elon musk was involved in lots of different businesses and enterprises. >> look, the job of the board is to make sure that the ceo is focused on managing the company. if you don't want to go public, if you don't want to have investors elect your board of directors, if you don't want the model where your board is supposed to hold you accountable to focus on running a company, you don't have to do an ipo in the first place. our role as investors is to make sure that the board is providing good oversight, and that's not happening either look, his brother's on the board, a couple of his buddies are on the board they've got to have a model of corporate governance that accords with the kind of company they're running. >> before that he was spread thin already, and his -- i mean, maybe tesla hit some road bumps

but no one's close in terms of having built an ev company like that so you were fine with spacex, you're fine with the solar panels the minute it becomes twitter and highly political, now you're going to draw the line you really can't say, yeah, there's something to that? >> it wasn't -- it wasn't -- >> tucker carlson, that right there you ought to get him off -- you ought to get him out of there immediately because he went on fox. >> we even own stock in fox news so you know, this is not for us a question of politics this is a question for focus, and i just don't know who could say it looks like elon musk's focus at the moment is on -- >> so 5 was okay, six is not you can run a company for five but -- >> i think the issue is one -- >> he could join the board of directors -- if he wants to join the board of directors, we're not pushing him out of the company. you want a ceo who's focused every day when they're getting up >> brad, i'm not going to

disagree of course you want a ceo who's focused. i think the issue that people look at in this context is they say, you know what when this stock was, quote, unquote working -- and by the way, depending on when you got in, it's still working if you got in later, it's not working. did you think that the -- everybody was happy when this was like a trillion dollars company, and you might have thought that he was more focused or less focused then, but did you think that was the right valuation then >> look, we're long-term investors, as you said before. the obligations that i have to pensioners run out of 30, 40, 50, 60 years it's not a question to me of what today's tesla stock price is i want to see them succeed in the ev marketplace, sell a lot of evs other car companies are going to come into this marketplace, and that's good as well. the question is -- for me the question is what sets the company up for long-term success, and i believe more independent and board oversight and a full-time --

>> brad, i'm going to make it comp complicated. does new york have any stake in spacex >> i would have to look. we probably do we own broadly across the -- >> you probably do i would bet money that you do through a number of different funds that you're in so my question then becomes how do you think about that on a relative basis and is the problem -- is it that you think he's too focused on spacex does it take twitter out of the mix -- >> as an investor, i'm confident that our position in tesla was left bigger than our position in sp spacex there's also a set of other governance and management problems that spacex has been facing, exposures to risks across the marketplace, both from all that price pressure that's coming in and also from human rights and labor violations h this is a group of tesla investors who are saying look, we want a ceo who's focused on that company >> and finally, to the extent that that's the case, what would you do if they say talk to the

hand >> look, this is how shareholder engagement works you write a letter you say we would like to talk to the board. that's who's supposed to be representing investors on the board. this is a good faith effort. we want to see tesla succeed we'd like to see the board include investor perspectives. >> okay. brad, it's good to see you appreciate it. thank you. >> great to see you as well, thanks very much. >> let us know what the reply is. >> you know we will. dow component coca-cola just reporting, sara eisen joins us with the numbers you set the alarm clock young lady. >> this is my quarterly early wake-up, joe, to report on coca-cola. it's a beat on the quarter, $0.68 earnings per share revenues come in a little better at 11 billion. expectation was around 10.8 billion organic revenue growth important with these consumer companies. it shows what the underlying strength, it was high. it's 12%, and that was more than expected around 10%. if you did beneath the numbers, the story is pricing

they're getting double-digit increases in pricing, and that's really driving the growth. but i will say a surprise on the upside for coca-cola here is that they're seeing volume growth as well volume's up 3%, 11% growth on pricing. so higher prices, but it's not totally turning off the consumer because they're seeing growth there in volumes, at least globally in north america, volumes were flat and pricing was up double-digits, really strong pricing in europe, which is driving the gains there. i just got off the phone with james quincy the ceo of coca-cola. here's how he described the quarter. hard not to see it as good and stable and growing market share and growth all around the world. he really emphasized the scope of the global portfolio here because he said, yes, we're seeing a lot of pricing in north america, and in europe and that makes people wonder if the consumer will continue to pay, but in some of these emerging markets, they're not out of the realm of normal kind of inflation rates that we typically see in some places, and in places like china we're not seeing inflation

he says you really see the balance across the global portfolio. also, this is q1, so we're still lapping. hard to believe omicron, which is still with us last year at this time, so they're seeing the benefit of people going out. 50% of their business is away from home. it's at the stadiums and the movie theaters and the restaurants, and that's still giving a boost he said that will moderate back to more normal levels for the rest of the year as far as pricing, which is a big story here obviously, he does expect inflation to moderate through the rest of the year, pointed to the fed's actions, for instance, says, look, costs are still broadly higher than they were last year in places like sugar and corn syrup, but he does see them moderating he thinks that will feed through to the coca-cola portfolio they reiterated guidance, still expecting growth, still have ramped up their advertising and marketing spend for the year so no big surprises on that front. guess what, foreign exchange is still hurting a lot. that also should moderate the

rest of the year >> great good summary you know -- >> thank you. >> you're welcome. reiterate's a good word. it's different than reaffirm i think that's the first time you iterate something, you reiterate it, right? >> correct. >> so reaffirm, you never know, sara, if you say reaffirm and don't know that they've already ac affirmed it one other time, if it's the first time, that's just an affirmation. >> that makes sense to me. >> to be exact reiterate. >> it's not really with the wall street lingo, reaffirm is common. >> i know, going forward >> sara, thank you >> ceo james quincey will join squawk on the street in the 10:00 a.m. hour. look forward to that, the ceo. ♪ good morning, it is 7:00 a.m. on the east coast, and you are watching "squawk box" live from the nasdaq market site in times square

i'm becky quick along with joe kernen and andrew ross sorkin. if you take a look at what's been happening with the futures this morning, been under a little bit of pressure but actually, those futures have improved probably with coca-cola out too. dow futures down by about 35 points s&p futures off by 4, the nasdaq down by 4.5. >> a couple of months ago our next guest said investors should be positioned neutrally, but had some turmoil in the banking sector since then. tech earnings will begin to take center stage this week those results could determine the direction of the market. we want to bring in charmaine mosovar, head of the investment strategy group at kbgoldman sac. she's also chief investment officer for consumer and wealth management good morning to you. >> good morning. >> at some point you've got to tell me if we should do the apple goldman cash account that's a separate issue. you're not part of that group. >> no. >> what do you think here in terms of where the market's positioned and what we should

be -- what you're doing ahead of these numbers this week. >> our view is that people have been somewhat pessimistic, and you made a reference to when i was last on your program our view is that the market has already downgraded earnings expectations significantly and so far, even though we only have a small portion of companies that report at about 18% of the s&p 500, there have been more surprises to the upside so there have been more beats, and when you look at the market price reaction, the day of the reports, you notice that actually the out performance is greater than usual so typically, for example, if there's a surprise, that stock outperforms the s&p by about 1%. now they're outperforming by 2 when they miss, they underperform by 2, now they're underperforming by about 1.3%. so clearly the market has been surprised to the upside, and so far earnings, and then we just heard from -- >> so therefore is the -- was the neutral call right

because it sounds like you would have wanted to be more heavily invested. >> yes, our recommendation at the beginning of the year was caution. there's heavy fog out there. there's a lot of uncertainty, and in that case, we actually specifically said don't move the portfolio around don't go significantly underweight or overweight, but stay at the long-term strategic asset allocation, and that our base case expectation for returns for this year was 13% for the s&p 500 with about a 20% probability to even greater upside so we had recommended clients stay -- >> so now you're shifting? >> no, we're not, we're saying stay invested from here. we still expect another 5% or so for the s&p 500. >> for the rest of the year? >> for the rest of the year. >> cumulative total return of 13%. >>st that's different from going to the october lows. >> going back -- >> a whole bunch of -- >> ending 5% higher than where

we are nowspeaks volumes. >> substantially. >> because it totally -- that sw entire contingent that thinks we're going back to the october lows and beyond, and many do, we have a lot of people coming on saying 3,200 is still in the cards. if i knew for sure we were going 5% up from here, that's a major statement you're making right there. >> for one thing, there's nothing we know for sure about anything in the market >> but if i knew that. >> you always do probabilities do the probability on your 5% versus flat, going down from here. >> so from current levels, 50% up, 5% -- >> 50% chance that we go up 5% >> i can flip a coin. >> yes, 20% chance that we go up even more. so you have 70% probability of 5 or greater, but of course there's some probability to the downside nobody knows for sure if we're going to have a recession. our view has been somewhere

between 45 and 55% probability of recession so we do have some probability to 3,600 we don't think we go down to 3,200. >> okay. >> charmaine, did you see the article by nick timeros in "the wall street journal" over the weekend just saying that this banking crisis isn't over. he talked to people including former dallas fed president robert kaplan saying we're only in the second inning of this, that you are going to see more fallout from all of this coming. maybe it's not the crisis mentality, but it is going to be a rolling problem that creates credit crunches and a lot tougher for people to get -- for people and businesses to get access to credit what does that do? what does that mean? >> we certainly had the most rapid increase in fed funds in tightening of financial conditions than we've seen in a long time. the fed funds has increased more rapidly by a larger amount relative to anything we've seen since the late '70s when inflation was in the mid-teens

let's say 15%. so clearly a big move. one never knows what the total fallout from such tightening is going to be. but in our view, the worst of this, quote, unquote, mini crisis is over could there be other shoes to drop here and there, yes no doubt that the senior loan officer's lending conditions have tightened there's no doubt that credit availability has decreased, but we've already factored that in in terms of slightly slower gdp. so on one hand we had stronger economic growth numbers, right economic data surprised to the upside in the first quarter, especially earlier in the year consumption employment and then we had this crisis. so maybe that slowed growth by about 0.4, 0.5%. so net net we end up with growth about 1.5% you end up with some inflation, let's say somewhere around 4ish,

3.5, 4ish by the end of the year the potential for earnings to grow mid-single-digits is very high >> could you have a 5,000 target on the s&p and david kosen have a 3,000? are you allowed to do that within your firm because he's saying things that are very dissimilar to what you're saying. is that okay >> david kosen happens to be a very good colleague and we chat with each other all the time >> well, who's right and who is speaking for goldman >> we're speaking for our private wealth management clients, right at the end of the tday people cn have all these views the key is what is the investment recommendation result of it whether you think the s&p is at 4,000. >> he thinks 4,000. >> i know that the view is you want to stay invested so the most important -- >> i'm confused, though, if i'm a goldman client you give the rich clients the good info and he's got all the ones that aren't >> he has all the hedge fund clients and the active traders. >> i'm just confused their view is focused on that activity, and ours --

>> someone's going to be wrong, charmaine, and if you're right, i want you to rub it in big time. >> that's not what we do at goldman, but thank you >> what's the rate i can get on the goldman sachs apple savings account? >> 4.15% >> 4.5%. >> what do you think how much should we have, you know, allocated there? >> well, from a -- >> still below inflation unfortunately. >> client portfolio perspective, we don't recommend holding a lot of cash. they should only hold so much cash as needed for operating purposes, but obviously money market rates and short rates are attractive everywhere, so surely, why not. >> there you go, charmaine, thank you. >> if you invest $10,000, at the end of the year, have i got that right, is it $400? >> yeah. if you invest -- it's fdic insured, you can invest more >> i mean, you're a savvy investment professional. you can do a lot better. right? >> equities. >> yes >> for the long run.

>> if you've got cash, you've got to make the most -- >> maybe for a portion >> for a portion >> diversified -- >> exactly >> you're young, you're smart. >> thanks. >> with me and charmaine >> still to come this morning, today's biggest movers, that's right after this break and later mohamed el-erian will join us with his take on a busy week ahead for the markets. the futures right now indicated off. dow down 42, nasdaq down 6.5 s&p off 4.5. "squawk box" will be right back. as sleek as it is spacious. as smart as it is beautiful. introducing lucid air. experience the best. ♪ ♪

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tom idom is here. >> it feels like it's been ages, right, joe i feel like i haven't talked to you in a while i am backment i will start you off with the morning moves with a check on shares of johnson & johnson. the dow component is getting ready to kick off a road show to drum you have investor interest in shares of its upcoming consumer health care business offering the company, which plans to ipo itself under the name ken view, the ticker kvue could start meeting with perspective

investors today. ken vue will be the parent company of johnson & johnson's over-the-counter medicines like tylenol, band-aids, baby care products, baby shampoo, skin care offerings, they're looking to raise around $3.5 billion at a valuation of $40 billion or more and that would hypothetically make it the biggest ipo in a quiet year of offerings so far it's a busy week on the corporate earnings calcalendar a third of the s&p is due to release results this week. mega cap in focus, microsoft, meta platforms, amazon, and google parent company alphabet are all on deck to report results this week. out of those, fractional gains for most of them microsoft down about 1/10 of 1%. moving across the atlantic ocean, european fashion and luxury brands company lvmh is up one-third of 1%. it's enough. now it becomes europe's first ever company to become worth a

half a trillion dollars in market value the move for that stock is also made chairman and ceo bernard ar know the world's richest man first republic bank, it's reporting after the close today a lot of attention, joe, as always for the these regional banks paid to those deposit levels and any kind of indication of what they'd give us in terms of what deposits may have looked like in the first few weeks of this month and this quarter as well. we'll keep an eye on fist republic which is up one-third of 1%. >> first time in history we've said we're all looking forward to first republic's earnings are they happy they're so famous now or probably not? >> you know what was interesting, i probably have talked about some regional banks i never have talked about in my 13-year career in broadcast journalism, and i was kind of, you know, talking to some of our editors here about how some of the names we brought up probably got more media attention in the

last week than they have in the last decade of covering some of these companies. >> we always talk about pnc, m&t, those are the big guys. first horizon, i can't remember the last time i had even talked about first horizon or some of these other names in the cuours of my career. >> notoriety is the right word for it thank you, dom. coming up, the battle over esg investing and where those who are leading the fight are investing in making political campaign contributions we're going to break it down. home buyers with good credit soon going to be facing higher credit fees as the white house seeks to close the racial home ownership gap. we're going to debate the rule changes next "squawk" returns after this. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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and who they take campaign contributions from it's a little bit ironic. >> yes, indeed ethical questions around private stock ownership and public influence is not just a buzz in congress, it is a concern on the state level as well. cnbc has learned a group of republican lawmakers responsible for their state's finances and staunch defenders of the fossil fuel industry are attacking esg investments, they're also holding a personal stake in the fossil fuel business troves of financial disclosures show that since 2020, state leaders, for example, scott fitzpatrick and missouri and glen hegar in texas own stocks, bonds, and other equity interests in texaco and some have received political do donations as they move part to battle environmentally socially conscious investing. they signed a letter, in part it said we will take concrete steps within our respective authority to select financial institutions that support a free market and

are not engaged in harmful fossil fuel boycotts for our state's financial services contracts. ethical legal experts say owning such stocks is not illegal when asked about potential conflicts a spokesperson for fitzpatrick said other than employer sponsored retirement accounts all of traded securities are held in a trust or qualified blind trust retirement account a financial adviser helps him select these stocks and move forward in that direction. holding fossil fuel stocks can appear as a potential conflict as they stand with the industry. >> what is the policy? i did not know this. if you are a public pension manager in this country, is it state by state, what are the rules around owning equities yourself >> well, there really is no strong regulations at the state level on who and how these folks can own and purchase stocks while they're going about -- >> do other states have -- do certain states have certain rules that say you can't own

anything, you can only own indexes in other states so you can do whatever you want >> i think for the most part i think it's free wielding to be honest with you. i haven't found a state that says you can't own even a certain type of stock or focus on a certain type of industry. >> really? >> i really haven't, and particularly the states we focused on in this particular story, which we mention about four we saw -- we were looking at over half a dozen, if not more of these states where these leaders are focusing on, you know, defending the fossil fuel industry and taking on esg investments. >> i'm taking this to a whole other place, which is to say if you're calpers, which essentially could move the market on any given stock if you knew they were going to make a big investment in a particular company, now we're getting into sort of insider trading issues, which is to say if i knew that we were going to buy chevron in three weeks from now and i bought chevron today, that would be a problem is anybody looking a the this? >> i'm not sure if there's going to be an investigation into this i do think it's a fair question to ask, right?

it's this real potential conflict with, again, at a state level. these people have a lot of power, and they can, you know, get some sort of information from various meetings and potentially that could impact how they go about purchasing stocks. >> that seems like a different circumstance this something more like congress being held to some sort of couaccounting rules or ruleso disclosure when you're voting on it. >> to that same point, at the state level what's required and what's not, there isn't any concrete requirements for people to say i traded on this stock. >> but these are publicly available? >> and that's where an asterisk in itself. we had to go to certain state offices to get them to give us these documents. so the officials every year, you know, file these things, but the public really doesn't always get to see depending on the state, these disclosures. >> the reason i -- we just had

the new york comptroller on who was complaining about tesla, sending a letter to the board of tes larks if in fact, and i'm not suggesting he is, if in fact, he owns shares in general motors personally, you'd want to know that. >> right absolutely 100% you're right and i think that's where when you look at lawmakers on the hill, we've talked about this before, people at the state level who really we're talking about the executive level of the state, right they're not talking about just state lawmakers, you know, working house in the state senate these are people who are full-time jobs, and they potentially have stock or some sort of interest in these businesses. >> how long is the texas guy -- he's in texas. >> oh, my god, i'm shocked i wonder how long he's owned it, and i'll have to commend him >> well, i think this was -- >> he's done pretty well with it >> indeed, the disclosure we found ended in late 2021, last day of december. that was the first time that we found that he was actually owning this. and of course that coincides

with him going after esg investments. >> could have had it before then >> well, he cuould have, but i think with the law the state requires -- >> to say he bought x then because he knows he's going to go after the esg -- >> the whole thing seems like a stretch to me. >> to me there's a whole separate issue it undermines the credibility. and what i don't understand and i would say this if gary ag gensler's watching, if jay clayton was in charge of it back then, on the other side of the aisle, why the s.e.c. that could issue guy dancidance around thie of politically important people and what they should do or shouldn't do the reason they don't do this is because congress is the one that funds them, no, no, this is the issue. but you would think if gary gensler cared about the credibility of the markets, which is his job, this is what undermines the credibility of the markets and he could easily

issue guidance and say we're going to investigate all these things and we're telling you not to do this, and if you do, we're going to come after you. i don't understand why they don't do that. i mean, i do unfortunately coming up, tech earnings on deck we're going to talk markets, the fed and what we've heard so far from companies reporting with gabriella santos t fore we head to break, let's gea check on the markets "squawk box" will be right back. and unforgettable scenery with viking. unpack once, and get closer to iconic landmarks, local life, and cultural treasures. because when you experience europe on a viking longship, you'll spend less time getting there and more time being there. viking. exploring the world in comfort.

nbc universal ceo jeff shell leaving the company after an investigation into inappropriate conduct. in a statement, shell said he had an inappropriate relationship with a woman in the company, and joining us now to talk about what's next for nbc universal, rich greenfield, light shed partners. rich, what was your initial take here and i'm looking at it from the p perspective of the bench at comcast and nbc universal. is there -- if you were a shareholder, is there something to be concerned about or has comcast said they have a lot of confidence in the management team that can fill in here, i guess, meanwhile, kavanaugh, whomever and then long-term i don't know where they go >> yeah, look, i think obviously these are -- it's unfortunate

and obviously upsetting, but i think you know -- and certainly a shock, but i think when you step back and you go this is a fairly decentral aized company if you look at sort of divisionally, i think we were on air with you a few weeks ago talking about super mario and why this was going to be such a big event for nbc universal, and look what's happened i mean, there is no doubt in our mind if you look at what's happened over the last few weeks, who's the animation leader right now i mean, universal studios is by far and away crushing it in animation, relative to disney and its peers, and so i think from the standpoint of film, film is probably -- this is probably one of the best film years we've seen out of nbc universal, and so i don't think that's a problem obviously the theme park business has been incredible under mark woodbury. i think, you know, business is at an all-time high. we've seen that out of disney as well the theme parkbusiness is really doing amazing the cable network business,

obviously it's facing all the headwinds that you and everyone else on "squawk box" obviously know the realities of. while obviously jeff shell had long histories in many of these businesses, i think there is a lot of executive depth at nbc universal. i think the only question it sort of brings up is, and i'm sure you've heard this speculation for quite some time. ultimately warner brothers discovery and nbc universal would merge at some point, you wonder when you see executive transitions like this, does that speed the ability for something like that to happen in 2024 or not? i think that's the one thing that will probably be on people's minds over the next couple of weeks as they think about the implications of this. >> you talk about some of the success that nbc universal has had, especially in films do you ascribe that or give -- was that jeff shell's initiatives that did that in that respect will he be missed? what about streaming is streaming going well? was that going away, nbc universal envisioned it, and

what does it mean from here on out? >> yeah, you know, it's an interesting question, joe, because under steve burke, the former head of nbc universal, the path or the plan for peacock was for very moderate losses they were planning on it never really losing more than a billion dollars. it was never sort of a chase netflix, never lose billions of dollars under shell, and you know, peacock is losing 2.5 billion, you know, there's a plan to get to profitability, but you do wonder whether as new management sort of takes over at kavanaugh for the interim, but i assume there will be new management over time, whether there is scale back of ambitions. disney's obviously trying to move to profitability much faster you're seeing paramount. everyone is trying to get to profitability sooner as the street has sort of shifted from subscriber growth at any cost to a focus on ka stcan streaming be profitable you do wonder whether there could be some shift in strategy,

maybe a scaling back of losses at peacock as you move through 2023 into 2024 think about nbc universal and how varied and sundry, i mean, that's a huge job in and of itself so it has been stated maybe that no one comes in not for a while, and that kavanaugh oversees everything that would be a big task for him. do you think that that's -- >> how about, joe -- joe, there's two big jobs out there you're only naming the one obvious one and what happened over the weekend there's another massive job available, right the future of disney, right? who's taking over disney iger is leaving and, you know, now less than 18 months. so you basically have heads of two of the largest entertainment and media companies effectively available over the next year that's pretty interesting. >> at nbc, who's external?

i mean, who's well thought of like that? >> look, there's a whole list of executives it's funny, you probably would have put jeff shell on the list for disney, if you were building a list for disney. i don't know who was going to take these jobs. i do wonder if there was going to be an internal appointment, would they have just done it over the weekend i don't know whether this sort of increases the odds that they look outside but i've been talking to a lot of investors over the course of the last three or youfour month. the number one topic is who's replacing iger that list. i think there aren't -- there's a couple of people internally that you could think of at disney most of the names i've heard thrown about would be external people, and you wonder whether now because of what just happened at nbc, whether those same names get sort of repurposed into who's going to be the future of, you know, nbc universal. >> so who are the names?

>> i mean, it's sort of the challenge that you have a lot of the potential names are you have, you know, older people who, you know, it's hard to see how you're naming somebody who is sort of north of 65 you could look at names, look who's left disney over the last couple of years. someone like a peter wright. obviously you have someone like a tony vince kwar ra who's done an incredible job at sony. do you have internal candidates? you have mark lazarus, peter levenson, you have a bunch of people inside of nbc universal that have a tremendous amount of, you know, sort of business/content experience. i don't know i mean, look, this is -- there's not like -- there isn't like this short list where i go, okay, these are the two people but remember, you know, if you think about sort of when iger was elevated at disney, nobody thought iger was the obvious choice and the right choice at the time and a lot of people questioned,

like was this too big of a job he obviously crushed it and totally made the job and grabbed the, you know, bull by the horns and crushed it when you think about sort of this job, i mean, jeff was sort of groomed to take over in many ways, sent overseas. go a lot of different divisional experience there's no one obvious that's been groomed to take over nbc universal. so i don't know. it is a great question, becky. i wish i had that short list, and i think part of the reason disney's stock has lagged is that people can't figure out who takes over for iger. you look at the way he's been battling desantis and making a lot of sort of very definitive decisions. who can do that? and so the obvious answer of like who replaces someone like bog bob iger, who replaces jeff shell, these are, as you said, joe, these are huge jobs, not easy to navigate on a global basis. >> everybody wants to watch cable again with commercials streaming is like -- it's almost

like -- when do you go to the bathroom, you know what i mean i can see how someone likes the cable model, you know, he's on for a while. a quick little break g, go get a soda you've already had a soda. did you see that article in the journal today? >> i thought it was absolutely -- i thought it was the most ridiculous article, honestly >> i love pluto and goofy. >> that was a goofy article is what i would say >> all right, rich, thank you. >> thanks for having me. >> all right check out shares of coca-cola right now after reporting results earlier this morning, you'll see that stock is up by about 1.4%. it has helped the dow, which is now down by just under 18 points this morning take a look at the premarket winners and losers in the s&p 500 right now. we've got a long list of names first republic back is number two. it's up by 1.9%. stick around, "squawk box" will be right back.

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starting in may, a new federal rule will subject home buyers with good credit scores to higher mortgage fees, while riskier buyers will get more favorable mortgage terms this is part of an effort to try and get more first time and low income buyers into the world of home ownership joining us to talk more about how this could play out is john hope bryant, he's the founder and ceo of operation hope. he's also the founder of promise homes. and former fha commissioner david stevens is the ceo of mountain lake consulting he also previously served as the president and ceo of the mortgage bankers association and gentlemen, welcome to both of you dave, why don't we start out talking about what this rule is, how it plays out, and what it will mean for the average home buyer. >> well, look, with all the best intentions, the director of the regulator for fannie mae and freddie mac, the fhfa has been

pushing both fannie and freddie to do better in providing affordable mortgage products for first-time home buyers, particularly with lower credit scores and lower down payments often that's filled with minority home buyers, african americans and hispanics. so in an effort to get there, they've -- for the first time ever convoluted the pricing structure where they are going to significantly lower long level price adjusters, individual fees for those low credit quality borrowers, and it's going to be cross subsidized, which is a way of paying for this with borrowers with higher credit scores in the 700s, with larger down payments. so their fees are going up while other fees are going down. the unfortunate reality, is that it really isn't going to be that effective. fha is still a better rate for

those low credit score borrowers, so we're going through this set of steps and all it's going to end up doing is raising costs to a bunch of borrowers who are sort of traditional gse borrowers. but the fha will still be a cheaper rate for a borrower with a credit score below 700 and a very low down payment. so it really accomplishes little other than a really disrupting a tradition around risk-based pricing that fannie and freddie have been committed to since their inception. >> not just fannie and freddie, but everybody is kind of -- every bank goes after the -- you want to give better prices and better options to people who are more likely to pay the mortgage back >> sure. >> you've been preaching for years about getting your credit score up. >> absolutely. >> what do you think about this plan >> we've got a credit score index at operation hope. i'm 100% for it. actually, i reaspect david a lo. he's a good guy.

this is a complete misunderstanding this is actually not what's going on. >> what do you mean? >> i mean that it's not about credit scores. if you really look at this, and i have source data to confirm this the average credit score for first time home buyers in the program is over 700. beyond that, this is actually not about credit scores. it's about risk-based pricing. he's right about that. the cap, every loan now at fannie and freddie through the regulator has a capital allocation, and a return allocation, and the risk is -- they literally went through all this data and risk based every loan, so did not end up with 2008, 2009 all over again. and what they found is that just because you have low income and low wealth did not mean you were a bum that didn't pay your bills. >> but there's a fee that's being put into place under the new rules, high credit buyers with scores that range from 680 to 780 will see a spike in their mortgage costs because of this new fee they have to pay to make

sure that people who don't have credit scores that are as high are subsidized and have to pay. >> that is technically correct because the only place in the statute, because this is a government supported mortgage instrument the only place in the statute anybody can give you a break is a low income prospective home buyer. that person gets a cut in the loan fee you take that aside, so that technically makes it correctment actually, it could be true, becky, that somebody who has higher wealth, higher income because they're doing a second mortgage or they're doing a second home or a cash out refi, they're actually a higher risk than the low income person, the low wealth person who's got a 720 credit score but doesn't have the down payment. so the person who's coming into this program as a first time home buyer actually might be a better credit paying risk. >> the fee is called a loan level price adjustment, llpa, it's going to make their monthly mortgage prices rise by over $60 a month. you're saying this isn't a fee

because these are people who are low credit risk. you're saying that this is an adjustment because those people were never low credit risks and because fha has been doing it wrong? >> i'm saying that the rule they put in place started in october of last year is designed to lessen the pain on those coming into system as first time home buyers, which is the mission of fannie and freddie, at least in part, by lowering or reducing fees that they don't think that that person should have to pay. that person's low wealth and low income, not a bum with a bad credit score >> no one's saying they're a bum. >> i know, i know, for dramatic effect for those watching, i want them to understand the difference that somebody in this program could have a 720 credit score and very little down payment but be risk weighted in the portfolio as somebody who actually is not a credit risk. somebody else that you and i might know but actually might have, yes, a higher credit score but also have a higher risk. >> but people who are putting 15 to 20% down are paying more, you

would think that that makes them less of a risk >> not necessarily >> what do you think because you have higher debt, more bills >> go ahead. >> you've got skin in the game if you're putting 15 to 20% down, it's harder to walk away. >> that's not the only skin of the game >> with all deference to john, and john is a great leader in this effort to try to improve housing opportunity generally, this is a little different this does apply to all borrowers. the loan level price adjustment fw grids have been in place with the gse for years. the change that just went into effect was announced in february, gets implemented may 1, and it literally reduces the fee charged to a borrower under 640 credit score with less than 5% down by 1.75% 175 basis points, and then it takes another borrower in order to cross compensate from a capital standpoint that has a credit score above 740 with 15

to 20% down, and they actually get an increase in their fee this isn't one of the affordable lending programs that the gses have introduced in the past. this is the first time they've ever really changed their general praising construct to try to improve outcomes,improves and to the point, i agree the average fico score that they get on their mortgages is significantly higher than the fha. the fha has fico scores allowed down to 580, with 3.5% downpayment. and the best credits and the worst credits get the same price under all circumstances. this move that the gses have done is pretty impressive. i worked for freddie mac for almost a decade. we had a lot of affordable housing programs targeted to first-time homebuyers, certain

census areas this is across the entire pricing construct. it's the first time in my career i've seen them contradict their discipline around risk-base pricing. if it would achieve an outcome that would be positive, i understand it. but urban institute has done an analysis of what this means for typical homebuyers and fha is a better deal except for the fact that the borrowers with better credit scores on fannie and freddie will pay more. >> i spent hours talking to the agency i'm talking outside of the head here today i would encourage you to get the agency here and have a conversation >> he's a former fha - >> i understand that he's not in the seat at the moment it's not clear to me this is not about credit credit

scores they took all of those, millions of them, and list base price >> the risk pace assetments they were screwing up before. >> it's always been in place the llpa grids, i have them on file, going back for decades this is not knew that they risk based price everything they just changed the risk base price adjustments effective day one, that's about to go into effect >> these are not credit score people that don't pay their loans. these are people with a 700 credit score that don't have a downpayment, no fault of their own. maybe because of discrimination and lower income it doesn't mean they don't pay their bills. and should those people get a better deal than somebody like me i think they should. it doesn't mean that somebody

gets a higher rate because they are a higher risk. >> i am xlcompletely confused by this conversation. we're going to dig deeper into this i'm sure we will discuss this again. coming up, a business busy work of earnings season. we have heard from coca-cola today. tomorrow, during the show, another dow component that will be of interest to investors. well - >> look at ronald mcdonald m haven't seen him for a long ti >>cdonald's, up tomorrow i'm not sure we need the ham burglar, a thief

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welcome back to "squawk box. investors are loving mcdonald's. looking at the stock performance and what's driving business. the quarterly results are out tomorrow morning >> good morning. the stock has been on a tear the firm's expressing confidence in its ability to perform in another downturn oppenheimer calling it battle tested for its previous performance in recessions and tradedown. it's expensive but noting its growth momentum will project in the u.s. and internationally analysts are looking at eps at $2.33.

and same store sales up 8% overall, up 7.9% in the u.s. this quarter, we're going to hear how the cardi b. offset meals have performed the company announcing last week, it changed to its big mac, including toasting ing buns and melting cheese and onions on the grill to enhance flavors how customers are receiving that will be of note. last year, customers were visiting stores more thp you're not going to hear from competitors in the environment the consumer was holdling up better than expected, here and in europe. >> good job, kate. thanks for that report i'm loving it. coming up, jpmorgan strategist, gabriela santos to talk the fed and more. a big week for tech earnings azen google, microsoft and amon reports later

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megacaps house speaker kevin mccac t mccarthy saying he has the votes. and the fight for the nfl's washington commanders. the canadian billionaire reportedly in the hunt final hour of "squawk box" begins right now. good morning welcome back to "squawk box" here on cnbc futures are just marginally down this morning down 17 points, 19 so on the dow. 7 on nasdaq, down 2 on the s&p and treasuries, we got that brief move on the minicrisis

that we had, the safety caused the yields to be lower now, we're at 3 1/2% on the ten-year and almost 4.2 on the two-year let's get you caught up on stories investors will talk about today. coca-cola shares are on the rise it reiterated the prior 2023 forecast you can see that stock right now, up by about 1.4%. catch ceo james quincy credit suisse was rescued last month by cross-town rival ubs. it could be the end of the road for bed, bath & beyond. the company asked a new jersey bankruptcy court for permission

to option its brand. jeff shell leaving his role after admitting an inappropriate relationship with a woman at the company. ju julia borstein joins us now. >> jeff shell, the president of cnbc's parent universal, will be leaving following an investigation into that relationship brian roberts announced that shell's senior team reported to comcast president mike kavanaugh. a person close to the situation tells cnbc that the company has no plans to immediately replace shell and roberts will get more involved with overseeing the nbc business shell took the top job before the pandemic shutdown at the movie studios and theme parks. he launched peacock in 2020. it's smaller than its rivals and losing me ing money, it has beat

expectations in recent months. he leaves just as "the supermarios brother" became the biggest animated film in history. knew, there's a slew of new challenges an advertising contraction and accelerated cord-cutting a writers strike could shut down tv and movie production for months, which could impact fall tv show launches plus, and perhaps most important, there's the negotiation with disney over hulu's future and the question whether hulu goes to disney or nbc universal and what that means for peacock. comcast is set to review its quarterly earnings and that call will be watched for insight on where things can go from here. >> in terms of how this story plays out and the implications of the deals, what's your take >> it's interesting. there's been a lot of talk about how maybe jeff shell had been

investing a lot into peacock to accelerate its growth. now, there's a question of what peacock is in the future and whether peacock is combined with hulu mike kavanaugh and brian roberts are the ones that will be making that hulu decisions anyways and negotiating that deal. the fact that kavanaugh is in this role now, makes sense he has the relationships with the division heads he's been working closely with them i wouldn't be surprised if the company takes its time to replace that ceo role because kavanaugh is already in talks with them and in such close contact with them. it will be interesting to see whether they elevate one of those division heads into that ceo role, whether they bring in someone from the outside or whether they solidify kavanaugh has permanently running that position i think the hulu decision will is a complicated one it will be negotiated between brian roberts and bob iger

>> julia, nice to see you in l.a. appreciate it. thank you. let's get back to the markets. one-third of the s&p 500, set to be working this week we want to bring in gabriela you say that the economy is weaker than it seems from the numbers most people are looking at >> i do think that we're in this world that we've unwound the zero interest rate policy, the liquidity flush we have for 15 years. there's a lot of dispersion debeneath the surface. that's true in asset sectors and regions. we look at the economy on thursday, we get first quarter gdp. we expect it to look strong, over 2.5%. we'll see weakness in manufacturing, housing and resilience within services

and consumption, for now we think the rolling impact of higher rates should be felt in the quarters ahead and specifically, through a weakening in the jobs market, which ultimately, can pass con su con ssumption and services. >> what does that mean for the markets? >> for the markets, that's opposite the first quarter earnings season might mark a low for earnings for us, that doesn't make sense. we're describing where the economy itself is at its peak threat and we see distraction that's why so far, we've only had 20% of companies reporting on earnings. but we've had some pretty muted reaction to earnings because i think there's some uncertainty about whether that consensus makes sense or whether we're optimistic about earnings ahead,

specifically at the top line, as you see some weakening in the economy and also margins what kind of margins make sense, as we see some normalization and pricing of companies >> we hear from companies that say they expect to make up most of their numbers or if they had missed, these quarters, they expect the second half of the year, you don't buy what they're selling? i think in general, we would be skeptical of that message. when you look at the second half of the year, there's a lot of strength embedded in those earnings you go back to positive earnings growth in the third quarter and double digit earns growth in the third quarter and 2024 we're not expecting any kind of prices in terms of earnings contractions it's speaking to downside here in the u.s and the dispersion is upside

expected around the world. here, speaking of europe, and em emerging asia, where where we upside >> you think through the companies we heard from, at&t and american express who expect to see better profitability in the year procter & gamble, where nothing is out of the park but they did that with 10% price increases that went through. will they continue price increases? how do you break it down and how do you figure out what you like and what you don't >> that's the issue that we're having with some of the earning estimates. we're looking at the economy in the second half of the year. more than that, it's having difficulty figuring out what a normal pricing environment is. and that includes not just more discretionary oriented companies but some of your staples what is a more normalized pricing environment. >> can i ask a related question.

we had someone from goldman sachs on last hour could be 50% chance -- 70% chance it's higher you can have a differentiation of where the economy is today and whether it is tomorrow >> absolutely. there's a difference between the real economy and equities, which will always anticipate the real economy. we mention we should never wait for the all-clear and the economy to get invested in stocks we're still in the process that you see going into deceleration or recession, where you get an upward momentum in the unemployment rate, meaning a deceleration of the real economy and you see earnings downgrades and that can be a choppy process for equities we don't expect to test the lows that we had back in act. we have better expectation, and we feel more conviction in this

environment. and i think the story is so much more favorable than we've had in 15 years for europe, as well as for asia and we advocate having a lit more or closing the underweights that have built up. >> if we get 2.5, that will be confusing. no recession >> we had a million p. >> we do need to take a leap of faith. to say we're on the cusp of the recession and it's nowhere near a recession. >> it's much more than expected. >> are you sure, we're going into a slowdown? >> we think the profitability is expected >> can't wait for that number. the judge and the biden administration is going to be

crowing there's mo reception >> maybe the second quarter we get that dipped down to 1% >> that's not a recession. >> that's timing to the second half >> that would be, you know -- that would be hitting the mark for them walking the perfect line between incligs and the soft landing we're looking for. the 1% sub trend and still cause of it. we would be looking to buy on any strength we see in the bond market or any rally we see in yields in response to those. that's a last shot to add the fixed income at attractive yields >> gabriela, thank you very much coming up, an update on the gop debt strategy from the house majority whip. and dan niles will tell us when four main capps report earnings.

a few more of the business headlines. alphabet ceo's total 2022 compensation last year coming in at $226 million. what a country the vast majority of that was a regular stack grant. and "wall street journal" is reporting johnson & johnson is prepping a road show for things like band-aid. band-aid is a brand name that's amazing you're watching "squawk box" on cnbc and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better.

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g good morning >> good to be with you >> we know how narrow things are. as the whip, what can you tell u us >> house republicans are not going to let this country default. mccarthy has been trying to get the president, joe biden, to negotiate on a debt ceiling deal since the beginning of this congress he's been told at least a couple of times by the president, he's willing to negotiate there's been no movement so, house republicans will be doing what we've been doing since the beginning of this congress, we're going to leave we're going to pass a debt ceiling proposal on the house floor and send it over to the senate hopefully, we'll get that passed into law or the present and this administration will finally want to talk about it and a lot of people are still

worried about certain -- we know the democrat ic caucus. you send it over to the senate some things change this is the best case nscenario if republicans are able to pass it if it comes back, speaker mccarthy accepts something, without the backing of the far right of his party and it brings in a couple of these problem sofler types, in the democratic party can he stay speaker if that happens? >> this proposal was a bottom-up proposal it is not one side or another. this came from every member of our congress it goes back to prepandemic spending levels. and build from there, with a 1% cap over the next ten years.

that's a joe manchin idea. those are clinton era work requirements this is not one or other side of the conference they're going to make history, sendsing it over to the other side and making sure we put this country on a better footing for the future >> what would be palatable if things change in the senate? the democrats control the senate what kind of compromises do you see here he's worried we don't get this done, in terms of the debt limit. no one has seen what would happen if we got to that point

>> what is acceptable is what congress is going to pass. you can save $3.9 trillion it's a potential savings of $6 billion or more. this is the law that would require a rule that would have an impact on our economy that would have to be approved by congress. the work requirements save $135 billion and will help restart our economy by getting able-bodied working-age adults without dependants into the

workforce. >> fingers crossed at this point, what do you think the chances -- is it a zero chance that this doesn't work? is it chance zero? president biden has a lot -- we talked about it. he thinks he has all of the leverage in his view >> the previous guest believes there's a big problem. apparently knows something that we don't at the other side of the isle the only way this doesn't work is if president biden and the democrats who are in charge decide they are going to allow this country to default. republicans are not going to allow the country to default i would suggest that every fiscal reform in the last 30 years has been done the very way we are proposing and hopefully the president and chuck schumer and others on the other side of the aisle, recognize this is the right thing to do for the future

they want a clean raise. they won't pass and sign off on that we're still in our corners >> there is no corner. once the republicans pass this, we will show you we are not willing to allow this country to go into default. this would be on the building and the administration hopefully joe biden will come up with ideas he hasn't come up with any so far. hopefully that will change when republicans pass this proposal this week. >> get whipping, whatever that means. that will round them up. coming up, the co-founder of one of canada's key real estate firms will talk about the cracks in the market.

and his interest in owning the washington commanders. a programming note, tomorrow at 8:00 a.m., we have an exclusive interview with legendary investor peter lynch, the vice chairman of fidelity you're watching "squawk box" and cnbc e strength? (eagle call) nope. how do we show that we'll stand tall through the storms? nah. (thunder) how do we make our clients feel secure and- ugh... not lions. (lion rumbles) we do it with our people. people who've been looking after people for over 170 years. meet gold bond healing. a powerhouse lotion that moisturizes, heals, and smooths dry skin. with 7 moisturizers and 3 vitamins, you can pay more but you can't get more. gold bond. champion your skin.

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joining us is steve apostolopoulos that has an international real estate portfolio and one of a number of investors looking to purchase the washington commanders. good morning to you. >> good morning. how are you? >> i want to talk about your business i want to talk about real estate and investing. boy, do i want to talk about the commanders you right now, are still, i understand, in the bidding however, our understanding had been, this josh harris group was the winner to this point what's happening >> yeah. i think washington is a great city it's a great -- it's a great team, a great opportunity. respect the process that the set forward. it would be inappropriate for me to comment at this time, as it is a live process. >> unfair to say that you're still in the hunt?

>> i am still in the hunt, yes can we put two more specifics on it $6 billion is the price tag that's been reported that you bid and that the harris group bid. what's the difference, do you know >> it's hard to say right now. as it's a life process, i don't feel comfortable saying too, too much and i want to expect the process. it is a head-to-head process right now. >> it's not over one more, were you surprised jeff bezos was the other name that was bandied about for a long time and it looks like he stepped away do you know if that's the case or do you know something different? >> i only know what's been reported in the news

it i it's from what i've seen, he's not participating in the process. >> what is your sense of the nfl and the football valuations right now? >> there's a really good opportunity right now. it's a tremendous city a tremendous team. there's lots of great things happening in that market we're real estate guys, from a real estate standpoint, as well. football is one of the best sports out there we're excited to be in the process. >> are you surprised one of the things that is so interesting is the valuations where they have gone in the nfl and the nba and other places, a lot of owners made cash on cash

money. now, owners are making money on the valuations of these teams and whether you think these multiples persist over time. >> i think valuations will continue to increase over time, for sure >> let's talk about your own business and who you are and what you're doing. tell us about your real estate empire it is quite an empire. >> well, my father came to this country many, many years ago and started an office cleaning, working in the office towers downtown started realizing a lot of people using trash bags. i'm going to buy a trash bag machine and making trash bags and selling them to my colleagues here. that's what he did he grew the business -- we grew the business together, my brothers, jim and peter.

we grew the business to the point we started to buy our real estate assets. as we were moving through, we sate, wait a second, there's more money in real estates than trash bags not so say the trash bag business wasn't good we ended up focusing on the real estate portfolio and growing that we assessed quite a significant real estate holding. >> what's your sense of where the real estate market is headed there's a lot of thoughts about that and its affect on regional banks. >> it's very geographical. you know, you have stuff that's in new york, different than stuff in detroit we're big industrial guys. we haven't seen a hit in

industrial we have office assets and in those assets, we're looking at repositioning certain assets you know, putting fresh life into some assets it's very market driven. >> is there a particular market right now you're running towards? any markets you're running away from >> we love detroit we're pro detroit. we continue to look at assets i detroit. >> we like where we look at assets and look at things that are coming up. this is where we plan to buy >> i thought the answer would be washington steve, appreciate your time. thanks so much >> thank you, everybody. another open letter to shareholders this is the second of a week he is accusing the company of

disenfranchising the shareholders he references a proxy statement on friday, saying that the company expects to add two new directors to the board in the coming months. icahn notes that the position of directors is not up for a vote at the shareholder meeting in may. cnbc has reached out to illumina for comment. >> coming up next, mohammed el rania. stay tuned you're watching "squawk box. this is cnbc

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box. the dow off by 36 points the s&p 500 off by about 4 >> let's show you bitcoin this morning. standard charter said that the coin could reach $100,000 by the end of next year declaring the so-called crypto winter is over although, it had little bit of -- i don't know if it was a winter it was trading above $30,000 all

the way into the low 27s you see today, 27,000. >> investors set to get a broad picture of the health of corporate america this week. earnings out from coca-cola. this afternoon, comes the first republic bank. in the days ahead, a swath of consumer names, industrials and megacaps joining us is mohamed el erian he is president of queens college cambridge. earnings, a lot riding on this, especially when you mention the big tech names they're responsible for the bulk of the gains in the market overall for the indexes. >> yeah. we try to figure out three things on the earnings one on tech. how impactful will it be coca-cola was fascinating for me it shows you that pricing power

really matters when you have a strong band and market share thirdly, as joe and don were exchanging earlier, it's amazing to talk about republic that's an important one to look at it's a very varied picture but one that has led the amount of uncertainty that's out there >> the economy's looking really good wore going to get gdp this week. that's expected to be strong as you mentioned, you have questions about what's happening around the finance sector. first republic bank. what are you looking for in those results and what will it tell you about the economy, if anything >> we are looking for, have they stabilized deposits? and what's happening to funding costs and what's happening to provisions those three elements are going to be repeated over the next few months this will play out over many

quarters it's not going to play out immediately. we know it's going to come down. we don't know by how much. how sticky is inflation and how will the fed balance reduce inflation and maintain financial stability. we're going to get more information on this going forward. of course, it's unusually uncertain. i want to stress that. that's why the market is staying here these levels seem fair >> these levels seem fair? >> yes i said it last week and the week before we get a lot more information. but given what we know and what we don't know, i wouldn't bet against these markets. i wouldn't bet in favor of the markets. we have to see and figure out

the three main issues i mentioned. >> do you think the potential for bad news is baked in we were speaking earlier today, with someone who was pointing out that when companies miss, these earnings expectations, stocks are down but not by as much as usual. when they beat expectations, they are up by more. there's a negative bias built into the markets >> that's right. people get the equity market on a stand alone. it's the bond market that is confusing right now. we're seeing things we have not seen three months squared to one month. at levels we haven't seen. it's astronomical levels the five-year swap is back over 50 basis points. we haven't seen that in the last ten years.

so, the equity market actually is calming and comforting. it's the bond market that's sending conflicting signals. i can't make what to think of what's going on in this part of the bond market we look at >> that makes you want to do what with investments? >> the bond market has embraced there's a lot of uncertainty you have to factor that in the equity market is talking less uncertainty and i just worry that you don't want to commit to the equity market, until you figure out the things we don't know. >> because you think the bond market knows more? >> they're not going to pay out. it's really uncertain right now. >> but in general, the bond market knows more than the equity market? >> it's more macro focused look at what's happening with

expectations for the fed it used to be easy the fed told us they're going to have one more hike and stay there. that was the baseline. and the balance of doubt was they're going to have to cut a lot. now, suddenly, we're seeing the other starting to go up. maybe they have to hike more there's a 20% probability they have to hike again after may you see in the bond market, that tell you there's a lot of uncertainty out there on economy and policy >> what is a number or an i indicator or data point this you're looking at, more now than ever before? >> i'm looking a lot of things now. if you put me on an island, and kept me there for a year, and then, pick me up and said, you get to ask one question, one number, that will tell you what happens with the economy, i will tell you what happened to core

cpi. i know the numbers and everything else. but core cpi, how that evolves, i worry it will prove sticky i hope i'm wrong i am worried it will be sticky that number is important for the economy, the pvurchasing power and the fed. >> one food that you could bring, unlimited supply, what -- and it can't be taco bell. i would do hard boiled eggs. >> that's it >> you can only do one thing one thing unlimited supply, what would you do what about a song? if it had to play over and over again? >> one thing, and my wife would laugh, it would be my morning protein bars that i'm in love with one song, it's "met the mets." >> oh, my. >> hold on because i like protein bars. what kind are we talking about

>> they are vanilla covered protein bars >> you don't know the brands >> you have a chance to be an influencer here. what's the brand >> i'll put it on my twitter i honestly can't remember the brand. i know what it tastes like and what it look like. i can't remember the brand >> what i really want is a dog, i think. and not a soccer ball with a face on it >> that was a volleyball >> was it a volleyball >> wilson, right >> wasn't a soccer ball? a volleyball >> what happens when we pick a dog out in the college it gets surrounded by students and they adore her >> i wonder if that had anything to do with you getting that dog. >> no. that dog has been around for 12 years. >> that's a good dog >> you know what else works? a baby, i found. that's more work >> i leave that up to you. >> thank you

>> thank you we got news just crossing the tape proposal to acquire getty images for share and cash trillium beginning due diligence. that stock up 44% on that tuesday this morning we'll talk about that and more with jim cramer and get his first take on the trading day ahead. and dan niles will join us tomorrow on "squawk," hans vestberg, he's going to join us after quarter results. 'rcongayun wee mi right back. ♪upbeat music♪ ♪♪ ♪when the day that lies ahead of me♪ ♪♪ ♪seems impossible to face♪ ♪a lovely day (lovely day)♪ ♪(lovely day) (lovely day)♪

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welcome back to "squawk. jim cramer is in texas this morning. what are you doing in texas, mr. cramer >> we're with jerry jones. we're at the practice facility it's a little uncomfortable, me being an eagle fan i'm willing to adjust, for one day only, my loyalties we have southwest air, which is a hot button and look, it is just sometimes in the room. you know how much fun it is to go to a place after a couple years when we didn't go anywhere >> there you are we had a piece of news cross

trilium with a bid for getty images $10 a share. the stock is up 44% on the back of that news >> you know, you got your ten. this is one that i love. this is one of the few companies that is going to make money this year it's included, directly, with chat it was mention ed as a partner. and it did speak at $34, $35 when it became public. i will tell you, this is a company that is a steal at these prices very profitable thexnext year. i didn't believe you can get it for 10 i think someone else comes along. >> who do you think comes along? >> i don't know. this is a fantastic property you merge this with chat gpt, you can do your own advertising very easily. i'm sure that coca-cola, james quincy talked about using a.i.

in advertising you need the pictures. they own all of the pictures if trilium gets this, it's a steal. it's so smart. i never understood that because it is great management and i think that this is just a great piece of business. >> how do you feel about coke this morning >> i love the quarter. i think it's really good because they did a volume, not just price. they quoted out india. everybody is saying, india finally went positive for them and that's just a great story. costs still not that good. a little let down that the costs haven't come down. but they have long-time interest that's hard to get out of them, they had to stay in them it was very bright i would buy it up a buck i'm not kidding. >> cramer in texas looking forward. are they practicing behind you what's happening there >> these guys are practicing players practicing they can't use the ball, which

is fine. i don't want them to have any edge over any other team in the conference >> we look forward to seeing you in a couple minutes. >> thank you thank you. appreciate it. >> i know which team he's talking about. >> i think he's down there >> getting a rash or something cowboy stadium. yikes. we're going to be right back we got dan niles coming up in just a moment to talk about tech investing and more back after this. at pnc bank, you can find us in big cities and small towns across the us, where our focus is to always support the people who live and work there. because you call these communities home, and we do too. pnc bank. do you ever worry we'll live forever? no, it's literally never crossed my mind. what if we live to like 100? that's 35 years of being retired. i don't want to outlive our money. and i have been eating all these stupid chia seeds! i could totally live to be 100! why do i keep taking such good care of my- since we started working with empower,

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yes, indeed-us. anaheim? big time. more guacamole? i'm on a roll-ay. how about you? i'm just visiting. u.s. bank. ranked #1 in customer satisfaction with retail banking in california by j.d. power. snickers >> snickers. that won't work. many of the -- still trying to figure out what we're going to order on the desert island many of the most anticipated earnings report of the season come this week the tech megacaps like microsoft, alphabet, amazon and meta joining us for what he's watching in tech, dan niles, tory fund founder portfolio manager. dan, i'm able to say, you did not lose money last year, and you're up this year, so that's no -- what was it, the nasdaq was down 33% last year, wasn't it >> yeah. wasn't a good year for the tech stocks, that's true. >> no, but you -- you did okay but right now, not sure you

think that the selloff means that they're cheap, and i think, you know, you attribute some of the recent performance, good performance in tech, to just the fe fed expanding its balance sheet. >> if i had told you a month ago, you know, we're going have the second this third largest bank failures in history, we're going to have credit suisse with $1.1 trillion in assets, your first thought wouldn't be, let me go out and buy stocks but march for the s&p was up the reason is a similar one to why stocks have done so well over the last 13 years, which is the federal reserve expanded their balance sheet by about $400 billion in three weeks around silicon valley bank, and that undid about five months worth of balance sheet reduction in three weeks now, what you've seen is with it looking like banking crisis has stabilized, though you're still

going to have problems with regional banks, the fed balance sheet has come down about $150 billion in the last four weeks, and i think you're going to go back to earnings mattering and the tightening and lending standards you've seen from that banking crisis, i think your going to see wash over into tech earnings coming up here, whether it's online spending or spending on cloud services, et cetera, and those companies are reporting coming up. >> and you really think that what seemed okay in terms of earnings was mostly banks and that -- so that's a half-full view, and now we're going to get into a half-empty view you got a lot of problems. weaker, large enterprise demand, recovery in china, inventory work downs, you don't -- you even sold chips, didn't you, the two names that you liked >> yeah. i did. so, last week, i sort of had a long talk with myself, and i

think numbers are going to just come down, because the thing you've seen so far in the earnings season, as you pointed out correctly, joe, is that the banks did well, but remember, banks are down about 25%-plus for the year on the tech side, these stocks have all ripped this year, but we think numbers are going to have to come down, so you've already seen some of the big -- smaller companies come out and report, so cdw preannounced negatively, but they do over $20 billion in sales they talked about i.t. spending being down high single digits this year. originally, the thought was that would be flat to up. you've seen the component guys come out, obviously. you've seen asml, lam come out in telecom, you've seen nokia erickson and in consulting, you've seen emphasis, even ibm talk about slowdown at the end of the quarters. and so all of the issues with the banks, it's showing up in depre discretionary spending, so what you can cut off, and you can put spending on the internet into

that category. you can put cloud spending into that category, and you're seeing the pc market and the smartphone market take longer to recover. so, you know, we plan on hedging out meta, for example, before they report, because discretionary spending is something you need to be concerned about, especially when the stock's doubled off its lows and you know, the good news is meta, google, they have pretty good valuation support, trading around the s&p multiple, but you look at, like, a microsoft at a 29 pe with a lot of optimism around chatgpt or apple at a 27 pe, and you know, chinese consumers are getting out traveling. they're not buying tech anymore, because they've been trapped indoors for three years. it's very similar to what we saw in the u.s. last year, as we all went out and jim cramer's in dallas, and the chinese want to get out, so we own a lot of travel-related stocks like united airlines, boeing, wynn, that's where we're putting our money to work, and we own a lot

of energy names that we bought back because golden week is coming up for china in early may. so, we're kind of playing around those themes right now, travel and commodity prices recovering as china reopens >> so, you think we can learn something from netflix and tesla? they both had nice moves, but when push comes to shove, you think we could see a similar situation with the companies reporting this week? they have had nice moves, but you're going to be disappointed? >> yeah, and i think what's even scarier than those two, because obviously tesla got hit 11% last week, netflix was down about 3%, but look at at&t high-dividend-paying, low pe, supposedly sleepy stock, should be able to just be in it who's going to give up their cell phone service, right? stock went down 10% in a day, the biggest one-day move in over 20 years, so you've got an lot of optimism built into the tech space broadly.

we've done very well, recovered from last year some of it is just fleeing out of areas like banks and others and putting money into names that we know long-term will do very well. but valuations matter, and i think, you know, we learned that, and some of these names in tech have got very high valuations, much like a tesla did, and if you've got some kind of hiccup around earnings, where they come out and they say, yeah, you know what, things are slowing down, it's going to be worse than we thought, are you going to be that surprised i was surprised that people reacted so harshly to at&t or tesla we plan on not being in these th names or hedge or short some of them going into earnings season. >> we will know. but that's a great -- i mean, it's one man's opinion, obviously, but we'll be watching throughout the week, dan, and we'll remember what you said obviously. thanks for coming on today

good to see you. >> thank you, joe. >> you're welcome. final check on the markets we're down about 20 points now everything is sort of riding on some of these big tech names that come later this week. market hasn't felt that great, but we'll see. we'll get an idea. dan, not too sanguine about things make sure you join us tomorrow as for now, "squawk on the street" is coming right up ♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber at the new york stock exchange cramer is in frisco, texas more on that in just a moment. meantime, buckle up, 178 s&p companies report this week also some critical inflation data we're seven trading days out from that fed decision a third of the s&p, almost half the dow set to report plus