>> 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 it is a big week for

big tech, riding a rally that has moved marjkets this year and shares of bed bath & beyond, yeah, well, they're beyond they're down 99% in the last year it files for bankruptcy protection finally, carl >> let's begin with jim, who can explain what's up with texas this morning, jim? >> well, we're down here to look at what i regard as being enemy territory, admittedly, but at the star frisco, another jerry jones world, just kind of like jerryland where the stadium is, but this is a practice field behind me. we actually have real, legitimate cowboys here. can't touch the ball, but they're throwing, i don't know, invisible balls, and this is just one of the most exciting places on earth, because it's a brand-new city it does remind me of disney world. and what i have to tell you is i got coterra on, natural gas and oil, and i've got the, i think t

interview of the day with southwest air. got to find out what's really going on there but it's jerriville, and what jerry has to say is, he's big on natural gas, how to value things, and david, i got to tell you, the spirit down here and what jones is accomplishing is only -- it's unique to texas you just don't find it anywhere else in the country. david, they love capitalism down here it's an odd thing. >> are you going to stay and maybe not come back? >> no, because every second is torture, because this is a world that is opposite of the eagles but i accept it. for today, i am a cowboy i will admit that. today, i am a cowboy that's what you have to say. you have to accept that, carl. i'm a cowboy >> we'll save that piece of tape, maybe, and play it later so, let's talk some earnings this morning, jim. it's a busy week, as we said, the busiest, and bank of america pointed out, last five earnings cycle, that busy week, market

tends to do pretty well. >> i think it's going to happen. when you look at the stars of this week, you've got things like -- look, you've got companies, name-brand companies like mcdonald's that just don't miss we've got companies that i think are amazon maybe we get a little more about who's being let go they're letting go of the $500,000 guys, not the $50,000 guys i think we're going to see -- you know, you're going to see good tech numbers from alphabet, but we need to see layoffs from alphabet it's still going to be the story of tech, which is they need to lay off people everybody else is looking for people to hire you have too many people who make a lot of money in one industry meta has shown you how to do it. we're going to find out even more layoffs at meta then we have other companies that just need employees badly, and i think you're going to see those companies have really good numbers, and a lot of companies, david, are surprisingly doing

much better than people realize, and the strategists seem very out of sync. they seem to think there's going to be missed numbers i'm not seeing it that way at all. >> what is the reason that you're not seeing it that way? >> because the last week we had the regionals. those were the ones that are the weakest part of the u.s. economy. the regional banks did absolutely as awful as we thought. we have the last one that i'm worried about, which is tonight at first republic, and after that, we'll have regular plain vanilla companies that do very well at this point we have all the regional banks up every single one of those companies disappointed every single one we're past that. and now we've got good quarters coming >> indeed, we did have some activity on friday night, jim. moody's downgraded several, including, i think, usb was in there, and i think -- we'll give you the other ones, but you know, we'll keep an eye on the "journal" piece over the weekend

looking at the argument that the banking crisis, jim, is not over, in that a lot of small and medium-sized businesses are getting phone calls, "the journal" argues, right now, saying, come year-end, you may not get that loan that you were counting on, and that's going to be sort of the draining credits picture that some argue will be a drain on the overall macro too. >> carl, you're absolutely right. one of the things that was outstanding, what everybody talked about from regional perspective is we have deposits, don't worry. we have deposits they did not talk about loan growth they were shying about anything commercial real estate they're saying, we don't have that much. these banks do a lot of lending against homes, and they do a lot of lending for auto. it's just, to me, seems like, guys, we're not going to do much at all, except for preserve capital. they're waiting for better rules, more clarity from washington david, these were the banks that kind of -- i don't want to call them the backbone, but in every individual town, they were what made things grow

there is going to be a big slowdown from these companies. i hope the fed recognizes that when you have huntington or comerica not doing that well from the point of view of worried about being deposits but not worried about growth, i mean, holy cow these companies were always growth engines now all they're saying is, we're not going to be a problem. a lot of these companies, i didn't know they might have been a problem. huntington bank was on they had a very good quarter, but they went very much to say, listen, we're not in trouble and if that's what you want to buy a stock for, because they're not in trouble, i'm looking elsewhere. i don't need to be with companies that say they're not in trouble >> the bigger point may well be about the credit tightening that we talk so often about, that we don't have firm data on, but we get a sense for it and hear anecdotes. residential real estate developers, for example, in -- not in this state but in others that are basically saying, listen, it started with the money center banks

then we went to the regional banks, but then svb happened, saying it was beginning prior to, jim, the svb collapse, and the markets froze. lender for our latest project, tier one city, backed out. we had to speak to over a hundred banks -- this is something that was written about to me -- and not one will provide financing. it's those kind of anecdotes you hear, and you wonder, when is that going to start to show up obviously, in real estate markets, new construction, and just in general, in terms of the economic impact. >> look, i think it's next quarter. we had this work from home phenomenon, no one wants to lend to build any big construction project, i think, is going to be -- that you had on the board isn't going to get financing, and you know, carl, when you look at what's going on in the country, you just do not have a lot of people want to do smig big because big

means real money, and these banks are going to say, look, we do not -- we're not committing to real big projects because we've got to keep our money safe until we have more clarity from the government that's not a situation where you're going to see a lot of cranes if you want to see cranes, you got to go to europe. that's where they're building, more than they are in this country at this point. >> well, it's definitely drawn a lot more eyeballs to some of the staples and household names. coke's a story today, organic up 12, and here, jim, we got a case where volume did not take away or offset price and mix with volume up one and global case volume up three. >> yeah, james quincy told me, look, this was just a really extraordinary quarter, breakout quarter. i agree with that. couple things to note is that there were still inflation systems, there's still inflation in the sweetener there's still inflation to some degree in other juices not a lot of inflation in cans,

which is very positive but india was called out as being terrific, and by the way, chatgpt was called out as being terrific, being able to maybe have a little more advertising being done internally. people worth more because they're augmented by artificial intelligence i was surprised he called that out in india, because they were new themes that i had not heard. jack and coke ready to hit the country very strong. that's going to be a very positive addition to what he's got already. look, i got to tell you, david, when you're worried about earnings, you don't worry about coke this was a very good quarter quincey is very strong they took a lot of share, all positive >> yeah, we're going to have an opportunity to speak directly to mr. quincey. i believe he's going to be here onset with us in the next hour of "squawk on the street." not onset. sorry. mistake on my part but he still will be live, right, guys? live >> very live >> very live he's alive and he will be live. you know, you speak of a.i

i'm looking at a morgan stanley note, jim. it's about meta, specifically, but it's broader than that how can a.i. drive upside to estimates and key catalysts ahead? i don't know what you're hearing down there, but everybody i speak to wants to speak about the power of a.i. these days chatgpt, productivity saves, how embedded it's going to become in so many different organizations in terms ofpotentially bending work in terms of jobs, but also increasing productivity significantly. this particular note, because you just mentioned a.i. in regard to coke, is about meta, and they're analyzing the potential impacts of a.i. to the economy and consumer internet space and see meta benefitting from a.i.-driven enhancements across core facebook and instagram. >> look, it is -- it's relatively unknown how close meta is with nvidia. they've been working together on a lot of projects. you've not seen any of it yet. i think you're going to see it this quarter

i think this is the quarter where you turn to instagram, which numbers are going to be good this is a quarter where you talk about artificial intelligence and reels, how well that is coming off, and it's clear we're not going to hear a lot about the metaverse. mark zuckerberg has been spending time with core business, and look, i think that i want to hear what's going to happen in new york they obviously don't need as many people in new york. they've got a lot of real estate in new york. this is a retrenchment quarter, and an a.i. quarter, and a quarter where i think even though the stock's moved tremendously, it's not done going up they are letting go of very expensive people, and you've got another month or two where they're still doing the packages that are going to hurt their quarter, and then it's away we go i think 2023, second half, is going to be gigantic for meta, and people have to start realizing, if tiktok is banned, all the numbers go up huge i don't think tiktok will be, but man, if you can slow down tiktok and move it to reels, that would be gigantic for them. >> we're going to find out more, obviously. they print on wednesday night on what is an extremely busy

earnings week. coming up after the break, ceo jeff shell stepping down from our parent company, nbc universal, following this investigation into inappropriate conduct. not a huge data day today. we'll get dallas fed at 10:30, but that inactivity will not last long as we're going get some key numbers really in the back half of the week. pce, and chicago pmi back after the break ♪ ♪

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nbc universal ceo jeff shell is leaving the company effective immediately following this investigation into inappropriate conduct. in a statement, parent company comcast ceo brian roberts and president mike cavanaugh said, "we are disappointed to share this news with you we built this company on integrity. nothing is more important than how we treat each other. you should count on your leaders to create a safe and wantful workplace. when our preinciples and policie are violated, we will always move quickly to take appropriate action as we have done here. meanwhile, our head of advertising has been mentioned a couple times >> i want to get to that never easy, of course, to discuss these kinds of stories, but particularly when it's somebody that you've worked with for years, that you respect,

consider somebody who you were a friend of. but this is not some application of some new policy this was a long-existing policy that was in place that was violated clearly by mr. shell, and in fact, he's even quoted in the press release talking about his regrets and obviously what was a significant lack of judgment on his part as to all of the speculation right now about who would take over as ceo of nbc universal, i think people should become accustomed to saying the name, mike cavanaugh everything that i have heard and that i have picked up at this point indicates that there is no rush whatsoever to appoint somebody to mr. shell's position, and in fact, mike cavanagh, only recently elevated to the position of president at comcast, is going to be running nbc universal, not on an interim basis, but on a -- what may end up being a longer-term time

period we're not even talking months here, perhaps, but even longer that said, it doesn't mean that this position will remain empty or is going to be eliminated there is certainly the possibility that at some point they do find a new ceo, but again, mike cavanagh is a make that you're going to have to hear more often associated with nbc universal. he is going to be running that company, and again, it is not on an interim basis where they're immediately looking for candidates, whether internal or even external, although that does not typically happen. we fill our cfo, sometimes, kavanau cavanagh being a perfect example. no shortage of things that are going to have to be considered obvio obviously, the hulu transaction and the likelihood that the put is exercised and disney buys comcast position in hulu, but we

will wait and see. cavanagh already, and brian roberts, of course, the ceo, very much involved in that decision that will continue to be the case and any others that come up as well but this is now mike cavanagh's company to run, and again, i do not believe that is going to be for an interim basis >> jim, any thoughts on this or some of the hard questions that legacy media companies are having to make there's news out this morning from our network about the new round of disney layoffs, maybe as many as 4,000 or several thousand as of today >> well, look, i don't think it's ever been as important a time to have someone who has finance background running these divisions, because peacock is losing a lot of money. someone might have some tough decisions there. there's tough decisions involving disney and hulu, but i think there's also -- it's not existential. we can talk about this, david. you know that this industry is -- needs to be able to consolidate, and yet at the same time, the attorney general for antitrust is against any sort of

consolidation, so i think that you need a finance person just to figure out how to not lose a lot of money in some divisions that are very ad-challenged or subscription-challenged so others can sign. our theme park -- yes, i work for comcast -- our theme park business makes a fortune all we ever talk about is entertainment. how about something that's doing incredibly well and that i think can shine? cavanagh understands finance i think it matters more than ever >> theme parks, a very important component of the overall growth at nbc universal i can remember, of course, when the deal with ge was originally done, it was an asterisk it's not really considered a growth engine at all, but "harry potter" changed much of that, as you say, for the parks, jim. yeah, listen, cavanagh has a long history in fitness. obviously, as cfo, way, way back, i remember him at jpmorgan, moving up in that organization briefly at carlisle, and then, of course, coming over to comcast as cfo and president

but you're right, now, there are many of the -- all the division leaders who will then report in to him, they're running those things we don't know what his ability to pick a hit movie is, carl, or not, but that would not seem to be the focus at this point, as jim says financial discipline is an important component of these businesses right now >> yeah. one reason wolf takes disney to $147 on the prospect of getting some fiscal discipline and benefitting from it on the back half we'll get cramer's "mad dash" and count down to the opening bell we are in the fed blackout window, so this week will be blessedly free of fed speak. more "squawk on the street" when we come back would you stop calling each other rock stars? you're a rock star. you are a rock star. no more calling co-workers rock stars. look, it's great that you use workday to transform your business. but it still doesn't make you a rock star. so unless you work with an actual rock star. hi, i'm ozwald. hello ozwald. pam, you are a rock-

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"mad dash. of course, we got about seven-plus minutes until we get an opening bell here to start the week it's new york to dallas. what do you got, jim >> okay, so, david, a long time ago, i said that bed bath could be ripe for a takeover, because they kept buying back stock. david, they bought back stock into oblivion, and you have been saying for kwoit a long time that the financial situation was precarious dead right closes $6 billion in revenue still up for grabs, share donor to everybody, especially target, which is next door to a lot of them they're in eight different real estate investing trusts. david, every single one of them has demand for these spaces because there hasn't been that many companies that have gone away, so positive for the reets, surprisingly, positive for target, and negative for the fact that this was one of the worst-run companies i've ever seen >> and listen, you and i sat, you did it as a "mad dash" through the years oftentimes, sometimes a little more positive than not, but we always pointed out to the enormous amount of

stock they bought back and as time went on -- and i'm talking years here -- always at higher prices than where the stock was. it crushed them with the debt load that they took on to do that >> just such a terrible story about finance, and at the same time, mark trenton came in from target he tried to reinvent the stores. a lot of people were angry at him. but you know what? amazon was going to crush them they got a lot of private label. most of it was sourced from china. that was the end of the sourcing the stores didn't have any old stuff, any new stuff the coupons went away and came back the reinvention was as failed as the buyback. >> expand, though, a little bit on why this is not a bad thing for the reets who own the space that bed bath is now going to be abandoning >> what i heard is that there are multiple bidders for the space. bed bath had been in there for a long time, and each one of these cases, they can raise the rents

dramatically a surprising number -- this has been one of those moments where retail's been very strong. we would have had more than party city, david's bridal and bed bath go under at this point, given the fact of what the fed is doing so, look, we got a lot of companies that want that real estate the actual strip malls in the country are doing incredibly well i do think that when i spoke with brian cornell, he's very anxious -- he knows he's going to take a lot of what is -- what was left of bed bath, but $6 billion up for grabs is not nothing. so, it's not bad it's not a bad situation for everybody else >> yeah. all right. bye-bye, bed bath. the opening bell, just a few minutes away remember, of course, you can catch us any time, anywhere, listen to and follow the "squawk on the street: opening bell" podcast.

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bmo. starting a new chapter can be the most thrilling thing in the world. business grows your business. there's an abundance of reasons to get started. how far we take an idea is a question of willpower. because progress... is a matter of character. >> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. some interesting data today out of apolo looking at cellular phone activity in downtown areas compared to prepa-pandemic leves

new york city, about three quarters of the way back, but san francisco, 31% of the 2019 levels boston's in there at 54% interesting implications, jim, for downtown urban office activity you know, sl green on thursday did say recent evidence of higher office utilization in our portfolios, their argument is that on many workdays, occupancy's back to 60%. >> well, i know. look, i appreciated that conference call. they put a -- look, they put a little lipstick on a pig there we do not have a downtown renaissance anywhere we have people coming back, but the permanence of off-friday is extraordinary. >> and monday. >> the permanence about the idea -- and monday >> not off, but nobody's on the subway this morning. it was empty again it's weird >> although we just did four million rides for the first time this past week >> yeah, but it's -- that was a wednesday or a thursday. it had to be

>> i just think, you do not want to build in downtown that's what i think is going to slow down -- again, the fed must realize it this is not good for building. they have to understand. building is a giant part of the economy. >> let's get the opening bell on the cnbc realtime exchange at the big board it's the arbor day foundation, and at the nasdaq, ggv capital, bunch of our friends there ringing the bell it's good to see jim, i guess we'll keep an eye on coke today, but tomorrow, we're going to have verizon, u.p.s., mcdonald's, gm, 3m and a bunch of others. >> all right, so, u.p.s. has labor issues we got to find out about that. dividend looks good. coca-cola is going to be excellent. i do, you know, there's a couple companies that are worrisome, and david, let's start with verizon. we at att -- att was probably the worst quarter so far that's a poorly run company that

doesn't seem to have any direction. i say that very lovingly, because i'm right here in texas, not that far they may be a stone's throw, but i think i'd rather throw a nuclear warhead. they do not have it together at all. they're not exactly right here david, i've got to tell you, what happened to verizon verizon was the one we looked to for steady eddie what happened there? >> well, for many years, they succeeded on the strength of their network, on the idea that they had, by far, the best network. and then, their ability to compete on that, i think, changed. and it has changed, especially in the 5g world where it's not as clear and i think that's a lot of it they stayed at a higher price point, perhaps, than some of their other competitors for longer than they should have, and we all know about competition in general, jim. we talk about it not just between at&t and t-mobile, which, of course, is now the leader, and by far the market cap leader as well, and verizon, but also the cable companies,

our parent company comcast, and charter through its spectrum brand are significant competitors now. they are reselling verizon, essentially, but they have made for significant competition. so, those are some of the key questions with differences in approach from each of the three, jim, but you're right. we'll keep a close eye on verizon's quarter, and you know, we're talking about a very low-growth business overall. >> it's rather extraordinary that t-mobile, out of nowhere -- look, mike seifert is a terrific ceo. john legere put this thing on the map. how about all the forays of verizon into content none of that's worked, right >> no. you know, yahoo, aol, that's all gone that didn't work, as you know. that was not a success and at this point, so many of the -- i mean, i think this is across the board

the promise of 5g, if you recall, jim, was not about, you know, us, really it was much more about the enterprise and what you're going to be able to do it feels like it hasn't happened yet. doesn't mean it won't, but it -- it's still early days. maybe that's another wave yet to come that will b profitable are the wireless carriers. >> yeah. i mean, one of these, carl, that i'm focused on when i hear verizon is apple the only real edge that you can have in this phone business is giving away apple at a better price than the other guys, and verizon has to do that i think we're going to find out that phone sales are quite strong that's not the problem with these companies. apple, by the way, has held up remarkably well. did you know that coca-cola talked about india being really good, we haven't seen what apple is doing in india, and i think that's -- if you listen to verizon and get a line that apple sales are good, people are going to take apple up ahead of the quarter. i'm fine with that

you know, i feel that you should not trade apple. you should own it. >> yeah, interesting morgan stanley today looks at examples where apple has beat and raised on the march quarter, jim, and on the day, week, and month following, outperforms the s&p by 3 to 5% if there's a beat and raise on march. >> look, one of the reasons why this is kind of a -- i'm going to call it a joyous earnings period, is apple, because apple is such a huge part of every index. apple is overindexed everywhere, and yet i never meet institutional people who want to own apple. it's owned gi individual the institutions like to short it they do all kinds of crazy things based on reports that i think are completely ignorant of the situation. it's a good company, david it's got great growth, and a lot of it is because they're taking share from pretty much everybody, and as a country gets more affluent, they go apple it's one of the things that happens to a more affluent

country. >> well, they do have one really large holder, and his name is buffett. he owns a lot, right >> yeah, he's got some -- yeah oxy, apple, kococa-cola. >> but apple represents, as a dollar amount, apple is far in excess of anything else that berkshire owns >> well, that -- yeah, i mean, look, it's not the way that the company stock trades, but it was a major positive decision to buy a lot. oxy, by the way, just by the sheer force of his buying, oxy does well versus the other oils. so, yeah, he played a huge role in apple because he just sops it up, and i don't know i mean, it was just one of the greatest investment decisions of all time >> as for today, jim, in the absence of other big market-moving dynamics, some of the sell-side calls are having some influence medtronics near the top of the list as wells goes to overweight, goes to $100 from

$77, and i think you would probably like the ppg upgrade too. >> yes, ppg had a preannouncement, and then announced even better. this is a company that really is into architectural codings, which is terrific. they're the architectural codings for all of -- every airplane, which is a fabulous business right now medtronic has been a hideous performer, and one of the reasons it's been a hideous performer is they have been second-rate versus a lot of different companies, whether it comes to diabetes -- all of their med tech has just been abysmal, so maybe this is the beginning of a turn. it's about time. they've ceded a lot of share to everybody. we didn't mention j&j. the road show starts today, a consumer product company they bulked up on med tech to compete to some degree against medtronic. let's watch the j&j road show. that's going to be the largest ipo of the year. there haven't been a lot of

ipos this is going tb the big one let's see if it works. i was surprised they're going to sell $3.5 billion worth of stock. why is that, david why do they need to do that? >> i don't know. if you can, why wouldn't you raise a good amount of money, and you, you know, i mean, more importantly, though, is the valuation that they obviously get for the whole, right aren't they hoping for something like 20 times earnings, it looked like, what, as much as $40 billion, correct, jim? >> correct and they've got better -- the growth accelerated because of flu season you had about 7% growth. j&j has been deeply -- it's been taunted by talc. the terrible ovarian cancer stories, they're trying to get it all -- they need all those -- they need the judge, the bankruptcy court judge, to be respected by the third circuit court of appeals, which has been against what they're trying to do they need to get these talc cases behind them. $8.9 billion they want to make it so that the lawyers and the plaintiffs are worried that this is going to go away if it ever gets to the

supremes, but j&j is not trading on anything other than talc. it's not trading on ken view the -- there's been a lack of respect of these deals, where people just say, these are not consumer product stocks we want, but j&j has tylenol, listerine, aveeno, they have good brands within there i think it's going to be liked, not loved, but wall street >> the top liability, u.s. and canada, is outside of ken view it's not there although apparently foreign liability for talc is included you never know guys, and jim, i want to come to a name that you had mentioned earlier, actually, on "squawk box," getty images we talked about it a little bit. i want to issue a warning to people here about this latest letter from this thing trillium capital in which it says the principals of trillium own hundreds of thousands of shares. that could be as little as a

couple million bucks, and it's the principals of trillium that own it they have made a nonbinding proposal to buy the company for $10 a share in cash, but the nonbinding proposal, contingent on a lot of different things, including they want to engage. they've got to do due diligence. they got to get financing and on from there please, please, everybody, be careful with this. i don't know who this guy scott murray is who runs or who at least is in charge here. apparently he's not very good at taking a picture, but he does want to buy getty images haven't been able to get him on the phone. there he is. it's kind of a crooked -- i don't know you know but he wants to run getty or they would really benefit, apparently, jim, from his inclusion on the board of directors. this is the latest in what's been a series of different headlines from them. april 11th, open letter. april 13th, hire an investment

banking firm april 14th, give us a seat on the board. april 17th, outline a path for revenue growth or we are going to outline a path, and now we want to buy all of you please, everyone out there, be cautious on this contingent on so many different thing. seems to have a very high likelihood of not, not, not happening. can't speak to the fundamentals of the company, though, jim. >> let me give you -- let me give you a counter to that forget that guy. that guy sounds like ryan cohen on steroids. what i would say is it's a good company, and it's supposed to make money next year it's a spac that's going to turn out to be good it did jump to $34 because of the lunacy of how spac's traded. the company itself is very deeply involved with chatgpt it was mentioned directly by jensen huang on the quarter for nvidia, why? because you take their images,

then you give adobe some copy, and you make it so that adobe is going to be your cash register, and then you just say, look, i want a getty image of -- and you figure out what you're selling -- and bingo coca-cola talked about this. this is being used right now for advertising, and you need the images of getty to make the advertising work i don't know about this takeover guy. there are good holders of getty, but i like this company very much, and i think people have to realize it's one of the few spacs that i would ever get behind because it will be profitable next year could be extremely profitable >> well, as you point out, the getty family, coke industries, n newb newberger berman, a very large holder as well in terms of what they did with the spac that ended up taking this thing public as for trillium, i have nothing on them and this guy although he says that he has decades of experience in corporate governance, strategy, finance, technology, and building scale companies and i would point out their last press release had them owning

500,000 shares this one now says their principals own hundreds of thousands of shares. please just be careful but there it is, up 40% on this. it's got a real market cap still, too >> hey, david. >> yo? yeah >> i see trillium, and i go to 1050 look, i -- why not i mean, that guy has almost as many -- i can just go buy that and put it in my trust and make a $10.50 bid and the farce will continue reminds me of the dayton hudson bid. >> you nailed it that's right you got a good memory. let's talk about something that is real, guys, and we're going to get news on what's going the next couple of days. could be wednesday, could be as soon as tomorrow, and that is the cmat, the uk regulatory authority, issuing their final decision on whether microsoft should be allowed to proceed with its transaction to acquire

activision remember, we have been following this for some time first when the cma came out with its initial ruling, we said, oh, this thing looks mostly dead because it was because they said it could harm uk gamers. it was strongly worded though somewhat differently worded than previous denials, if you want to call it that and then it was a little over six weeks later, they changed their opinion and said, all right, we don't see it causing substantial damage to the gaming business we're still concerned about the cloud side of it and we're going to investigate that the final report, though, is due april 26th maybe we hear something as soon as tomorrow. this is a big one. this is a big one. if it should unexpectedly now -- and you can see what's happened to activision stock price, of course -- if they should still come out and say, we're not convinced, which seems unlikely, but it's still possible, deal's dead deal's done.

that said, if, as the market now seems to believe, based on that reversal, and a lot of other little data points we've gotten or things we hear we're not completely sure about in terms of being able to confirm with reporting, if they say, okay, then we move on. eu is expected to come soon. we may start to hear it about very soon. that's expected to be a yes. still got china out there. and then, obvious, you have our own ftc, which right now is saying, hey, we're going have an administrative law judge rule on this come late summer. we got a merger agreement you have to extend, because that's up on the 18th of july you've got the prospect that if, in fact, they want to extend it, they might actually, at microsoft, have to pay more money to do that, increase their offer. would they ever consider closing in the face of the ftc because many people the ftc's case is incredibly thin.

unlikely, but always a possibility. so, we're going to be watching closely. a lot is going to hang on that cma decision, and then we'll go over all the different scenarios from there, but of course, jim, much more likely than it looked even a couple months ago that this deal will get to the finish line but still some other potential things that we have to think about if the cma, as now, is expected or at least more likely than not gives the nod. >> look, the doctrine has changed here when i speak to ceos, offline, about the idea of mergers, they just say, look, let's just put that on hold the antipathy of this administration to mergers has made it so people are afraid david, i've got to tell you, the idea that this is really anti-competitive, i think, is ludicrous. we're in an era where people feel there were too many deals made, too many things that

happened that were considered to be anti-competitive, and now everybody has to pay for that. you know these -- what's going to happen? is "call of duty" going to -- the price going to go up are there fewer game writers all of a sudden? i just think it's farcical but it is a shot across the bow for anybody who's considering in communications, anybody who's considering in oil, and even in oil and gas, but machinery, it doesn't matter everybody's in these agencies, david, has said, you know what deals were bad we should never have done -- never agreed -- we should have never agreed to the airline deals. we shouldn't agree to the auto deals. next thing you know, what do you have you have people paying the price. microsoft activision blizzard. there's no reason to block this merger none not in the doctrine that we're used to. >> based on the current law. that's why many people believe their case is extremely strong, if it does go to an administrative law judge there is the possibility that if microsoft were to say, we're

just going to close it and take our chances, the ftc would go to a district court, get a preliminary injunction, end up in federal court, which is what we're more accustomed to seeing, but you're right, jim, or at least you're right base d on everything i hear in terms of what people believe is a very weak case from the ftc's point of view, but they've been willing to take those on, as you point out, in part because they're fighting a larger war, they say, which is that consolidation is bad >> right >> and fighting, perhaps, battles that should better have been fought years ago for deals that perhaps did not or should not have been allowed to occur, as you say, in the airline industry, for example. but again, microsoft, we're going to be talking about it maybe as soon as tomorrow, but carl, likely by wednesday, when we are officially set to hear from uk's antitrust authority. >> all right, guys before we go to break, let's get

to the bond report, see how treasuries are faring today. got some stories on the tape regarding hedge funds, at least, adding to their net shorts on treasury futures for the fifth consecutive week lost a little bit of steam on the intraday high, but the dow is up 40 we'll be right back.

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it's time for jim and stop trading. >> carl, one of the themes of ev is you need a lot of copy. it's been a sense that there's a shortage of copper developing, so freeport had speculators. it was a miserable quarter i realize it was just shocked at how little money they can't seem to take

advantage of the long-term secular trends at a certain point it's too cheap. i'm looking at this to say at a certain level you have to just say you have to hold your nose and buy. they had problems in indonesia with the mine, they had problems in peru but copper is back so i'm looking for that one to bottom and then maybe you decide to go in after the speculators have finally left the stock. >> wow copper, jim, hit a low, lowest level since aperil 5 on the bac of what hasn't been on fire. >> china coming back, you need it in evs. it's been a cursed trade, but at a certain point i have to tell you because of evs and how much copper you need and because of china i'm interested not here it went up too much, but very soon. >> wow hear from some of the legacy oems about the future for autos. >> yeah. >> what's on mad tonight >> we have jerry jones

he's the man, by the way, com stock his company, natural gas, thinks bigger than what we're a seeing here. frisco, they bought a star world here, and i find it exciting southwest airline, let's get to the bottom of what's going on. this is not an earnings call, but we want to know what happened they spent in tech why is there so many problems in what i regard as the best run airline. coterra, another gas company, a guy who knows very much about business i'm excited to be here and throw the ball around with the team. you can't see and i have a chopper. you always want a chopper, right. we are going to chopper over to philadelphia and be in the right place. they don't know that i'm going to highjack the chopper. never been done before. >> wow somebody working out back there too. who are those guys

>> it's the real team. they are allowed to work out as long as they don't touch a ball which is amazing now dac did -- he won my fantasy league, and he was my quarterback. i feel like he's my brother. so let's see what he does. >> i hope the playbook is safe where jim can't get his paws on it. >> he's an enemy. >> he's a nice guy we've beaten the heck out of them i am under cover here. i'm under cover. thank you. >> low key. >> see you tomorrow in new york. thank you. >> looks like a blast. "mad money," 6:00 p.m. tonight after the break don't miss our exclusive with coke ceo james quincey on the company's latest earnings we're back in a couple

good monday morning. welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber, live for you as always from post nine of the new york stock exchange take a look at stocks here in the early action higher, nothing extreme, but

energy, communication services, consumer discretionary are your best performing sectors weighed down by the defensive groups like real estate and utilities, technology is also lower, though the nasdaq is pretty much unchanged ahead of microsoft, alphabet, and meta and amazon earnings this week 30 minutes into the trading session. three movers we're watching right now. wells fargo, saying disney is, quote, the best opportunity in media. this comes as the company begins the second wave of layoffs as it works towards its goal to eliminate 7,000 jobs by the end of summer and save $5 billion in costs. playsmorgan stanley sees a.. driven tailwinds ahead for digital ad players c 3 ai, wolf research says take it to sell as they rerisk to the company's revenue growth some of the theme in the earnings we get this week not just for big tech but across the

board for the economy. coca-cola kicked it off. we'll talk to the ceo in a bit we will have the gdp report, a fed quiet period, this is the last big economic report ahead of the fed meeting pce on friday. and i'm also increasingly watching the, as you know, the debt ceiling because house speaker kevin mccarthy wants to bring a vote to the house this week does he have his party not clear. >> yeah. "washington post" saying over the weekend the gop is more serious about allowing a breach more than people are willing to admit. >> he has only five no votes that's it. it's a slim -- is he going to do 15 votes like he had to do for speaker. it's unclear of the path here. i think the bigger picture for wall street is, doesn't appear the equity market is paying much attention or worried about it right now. you are seeing it in the short-term treasuries, the three month what i've been watching as the benchmark, we don't know what date is for the breach of

the debt ceiling, we will find out in the next two weeks, but the three month yield, look at that it's moved significantly higher because we know it's some time between june and september, depending on how tax receipt comes in should the broader markets be focused on this? hard to see what outcome is going to be. i guess everyone expects a last-minute deal, 11th hour like we've always gotten. it's a bad press department. what's going to happen 2025 if the democrats win the house, are they going to force all of their spending - needs and policies on the next president and just use the full faith and credit as a bargaining chip it's not a good place to be. >> what happens if mccarthy is unable to get his bill out of the house? >> well, then, there's nothing. >> there's nothing, right. but that also doesn't that also dent his negotiating leverage, even if he does, it's dead -- it's not like the senate is going to even consider it, but it does give him, he thinks, if

he gets the vote, at least some leverage to start to start to negotiate with biden. >> sure. almost like this vote is a confidence, more of a confidence vote for house speaker mccarthy than it is -- even members of his own party, there are some hard core republicans who don't even want to raise the debt ceiling no matter what, and then there are more moderate, newer republicans, from new york and california, that are going to have to go on record and be forced to vote for things like a 22% reduction in veteran benefits. >> roll back of all the irs money that was coming in to try to update them and take them out of the 1980s in terms of their technology, a rollback of the ira and many of the provisions in the misnomer of the inflation reduction act, which is dealing with so many things in terms of trying to mitigate climate change. >> the unpopular thing, the veteran benefits, food safety, those are some of the unpopular

ones the country is in a tricky spot because we would all be better off if they would do this around the budget in september when the fiscal year ends so i'm watching, the research notes are coming out and warning of problems ahead, but nobody is outright base case expecting a default. >> we're in a period where we're starting to look at vote history. jpmorgan says three out of five house goppers have voted to raise. there are 16 house gop'ers who have never voted to raise since '17 even under president trump. >> he has a slim margin there. we're, obviously, going to watch the vote nasdaq goes negative s&p up 0.1 let's bring in mike santoli for his take on this morning action. when do -- when does the equity market start to care >> when it gets closer and seems more imminent and seems there will be a brutal economic impact if we get there. i think it gets to the debate about the market in general

right now. because it has been so calm and such a noarrow range. last week the s&p was essentially flat moved less than 0.1% there's a general sense out there that boring markets are bullish, don't short a dull market is a saying for a reason. i do think it's tough, though, to sort out whether, in fact, it shows the market is under reacting to the risks or it's essentially in a decent place. it's consumed all the negativity that was built up going into this year and surrounded the mini bank panic we got is it a bull or bear market is another way to frame this? it's a weak bull market that started in october and unimpressive and narrow one or a bear market that lost its power to scare because we have the support of decent nominal growth, the recession not yet, and it's one of the most divergent markets among stocks

and sectors in the last ten years. it is muting some of what the market is pricing in if i look at the cyclicals they've taken some pain and had some, you know, their valuations compressed, and it doesn't seem as if people are oblivious to the fact we have slowdown effects and they're paying up for staples and paying up for tech stocks that they tell theflz - >> not the vix. >> try variant and data track took a look at whether it's still useful and a shorter term vix. >> it's useful and telling you what it's always told you which is what is the market's collective expectation for how much the s&p will move in the next 30 days now there's a lot less betting going on in that 30-day yes, we're going to have to figure out how this behaves and what a normal range is for that, what extremes are in that, but it does show you that people

are -- it happens every time the market gets calm the vix isn't tell you what it used to. and i think the fact that the market itself has been so calm, acts as drag on people's expectations of how jumpy it's going to get. >> people think the fed can't cut with the vix at these levels there has to be more panic. >> except it happened a couple times. >> did it? >> in 2019 and in '95. it's not that it vefr happens. it's just that in generally if the fed is cutting in a reactive mode because things look bad, yeah, the vix -- >> things are bad. >> by the way, the market can go down 2% and the vix could be at 22 it's not like it takes that much to get the vix up to a level - >> thank you, mike santoli coca-cola shares are higher right now on the back of its earnings beat, higher prices and higher demand fueling strong results. joining us in a cnbc exclusive interview is coca-cola's chairman and krae james quincey. good to see you. thanks for joining us. >> good morning. nice to be here.

>> you saw the strong pricing we're seeing across the consumer names but also volumes came in higher as well which may be a surprise what did you see during the quarter that drove it? >> yeah. i mean well, had good balance growth, we had the pricing and we had volumes very robust, latin america, emerging markets like india, actually, consumer was still resilient in western europe and growing even here in the u.s., we were able to balance out affordability and get a pretty strong result. so there is still a lot of global growth out there that allowed us to continue to bring people into the franchise and, frank live, it's growth that we've earned without marketing, our innovation and our commercial strategies. >> pricing, though, is strong. double digits. we saw this from p&g on friday how sustainable is that, especially in a world where we are seeing disinflation? >> we are seeing some

disinflation, some materials have come down, but coke is very important to us like sweeteners and juices are still substantially ahead of prior year overall we see a moderation. we see the input costs moderating through the year, wages moderating as we go through the year, the cost of medium moderating and we'll see our pricing moderating as we both cycle last year's strong price increases and the marketplace particularly in some of the developed economies starts to go back to less of cycle price increases. if the central banks deliver on the environment of a moderation or a soft landing, then i think we are going to see them both come down in tandem through the year >> it will go into your portfolio because some are wondering food and beverage inflation has been stubbornly high, whether the companies are -- companies like yours, but everyone, are keeping prices high in the face of falling

costs to preserve profit margins and profitability in this environment? >> we're very much focused -- i mean coke is still going, start on the basics, costs are still going up for us. costs taken all together we expect to increase by mid-single digits compared to last year there still is a residual follow through of higher elevated increases in costs compared to prepandemic times. we're very focused on earning the ability with our consumers to take those price increases to move those costs through, but our strategy has been very much about the passing the costs through, appropriately rather than anything else, and to continue to try and keep our consumers and franchise, we're not in favor of trying to do big movements one way or the other. >> you mentioned the term soft landing. so does that mean, james, you're not seeing real concerns thauflds typically see around

consumers going into recession in the u.s.? >> i mean, there are pockets of consumers in the u.s. in europe that are clearly under pressure in terms of their purchasing power and starting to exhibit a buying patterns typical of kind of the early recessionary phases, whether that be trading down to private label or putting off the purchases of large ticket items having said that, there are other people who got the purchasing power or who are deciding to spend and so aggregate demand is there. i mean, it's one of those things where we've been talking for at least three quarters about a landing that's two quarters away and here we are still expecting it two quarters away so yes, we're planning on a moderation towards the end of the year, soft landing if you like, but it's been predicted a few times already. we'll see how it plays out. >> yes we've been expecting it for a while. i would say you typically with a good global view, you warn about the macro economy and when things start looking tough you get more cautious on the

consumer i think it was notable that you reiterated guidance. it's early in the fiscal year but does that mean you're not seeing globally signs of worsening economies? >> we don't see an overall aggregate reduction. i could point out economies or groups under pressure but there are other parts of the world doing well for every country doing badly there's an india which is doing strongly and so there are -- western europe i think benefitted from a slightly milder winter so it came strongly. so overall, we do not yet see a global slowdown. clearly, you know, there are places under pressure, but we see the consumer is standing together pretty strongly at the moment. >> how is the china reopening going? what do you see on the ground there? >> so china started the reopening q1 actually we had a pretty strong chinese new year in the first quarter. patterns of spend and activity,

people traveling and going out very much like the other reopenings around the world. so certainly a good start. consumer confidence is still below prepandemic levels wipe we're optimistic on the balance of the year, i would say cautiously optimistic that the economy there will start to normalize in a very similar pattern. >> i thought it was interesting that one of the bullets in your earnings release was about this deal that you made with openai and chatgpt. what -- how does it work what are you using it for? what are you trying to communicate to investigaors? >> a.i. like the express the innovations are overestimated in the short term and underestimated in the long term. this will have a profound impact you can make the adage we'll no longer be shaped by nature and nurture, we'll be shaped by nature, nurture and the numbers as the algorithms kick in.

we see it being profound internally for the way our business operates, the way the supply chains operate but how we engage with consumers. we ran an activity where we combined the chatgpt along with the visual imaging things to allow consumers to make their own coke ads, stills, still coke ads, and put them up in times square hundreds of thousands of responses. as going to profoundly change not just kind of the supply chain and the kind of transactional mundane task but start pushing into the world of creativity and we need to get ahead with re-skilling the way we -- the way our work world operates so we can take the learnings we've found, if we combine tech and creative skills with employees we can do much better and this is just the beginning. >> james, you used the word profound a number of times and i'm curious as to why you would term it that

what is it about this technology that, perhaps, is different than things you've seen in the past >> i think because it covers so many things. you can buy an a.i. inverted commerce that will, you know, it's the correlation and couldn't mization machine, but this can cover so many activities because the way it can absorb not just text but images and produce, you know, very responsive results, things that we will accept as good as anything else, very quickly, is going to -- we've looked at how it will change some of our internal processes give you an example everyone has been trying to do knowledge management for 20 years. there's research scattered all over the place but no one can find it. the brand manager has to be trained on everything. you can put that together into an a.i. tool that will just bring immediately to the fingertips of every person in the company the entire knowledge of the company and that will allow us to be much more effective as we do strategies it's going to get to advertising.

go on. >> i mean that's going to change -- isn't it going to change the way in which chief executives are expected to communication dramatically >> i'm sure it's going to change lots of things including the way -- that may be the final corner of the cherry on the cake but it will pro foundly change things and change the way advertising works and the way we engage with consumers. maybe not in the next two quarters but in the coming years, it's really think of how much we've changed in 14 years since the smartphone was around. you know, if i think about myself internally, i used to have my own servers and software all of that is outsourced now, and it's a new industry. my i.t. department does different things than ten years ago. imagine if that's about to happening to my marketing ecosystem, in ten year's time it will be different. that's a journey we need to start on now it's profound. >> what are you doing with marketing? people look at coke as one of

the bellwethers for the advertising world. i believe you've ramped up spending in this uncertain environment is that true and does that continue >> yeah. we've been increasing our investments in marketing well back to prepandemic levels. we will continue to lean into growth as fate muss soft landing continues -- the famous soft landing continues to be in the future we will rwramp up our investments. we've been making a focus on adapting how we do marketing five years ago we did coke, whatever with vanilla, now coke with starliner marketing and innovations much more engaging with today's consumers, allowing gen-z to come into our franchises, including the coke franchise, starting to see recruitment even in the u.s really an adaptation not just for marketing but the model and effectiveness of the creativity >> and it always helps i'm sure.

final question, we were having this back and forth about the debt ceiling and i just wonder as a business leader in this environment, are you worried about what you're seeing in washington >> of course markets always start to get nervous and businesses prefer predictability and certainty in terms of the macro environment and certainly that's what we would be looking for and hoping for from a coca-cola point of view, we have a very robust balance sheet and access to capital and cash but, of course, you know, there's plenty, there's already enough uncertainty in the world so hopefully it will work itself through in terms of the debt ceiling. >> it usually does, always does, but we'll see. thank you very much for the time today. we appreciate it. >> thank you. >> james quincey, ceo and chairman of coca-cola. as we head to break our road map for the rest of the hour, crucial week for big tech. microsoft, amazon, meta all getting ready to report results, how to position ahead of that.

plus a stock that is out performing most of the mega cap tech names, creating 52-week highs ahead of its earnings tomorrow investors need to know and the tale of two retailers. bed, bath & beyond files for bankruptcy, but lmvh, new milestone and what that signals about the coany mpand luxury when we're back in a couple minutes. t pro starts working instantly. with two max-strength pain relievers, so you can rise from pain like a pro. icy hot pro.

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be telling investors it's dangerous to bet on fed rate cuts this year joining us data research founder with us. we were referencing your work an whether or not the vix is instructive on any of this stuff regarding the fed. what's your take >> the vix is low. we're talking about lows back to the pandemic that's unusual because the vix averages around 20 and we're trading 16 or 17 markets little volatility. on the one hand never short a dull market. you have a dull market so we should trend higher but the market expecting rate cuts and rate cuts don't happen when the vix is below 20. going back to 1990, six rate cycles on the downside only two with the vix below 20, the rest above 20 and above 30 in most cases. >> are you of the belief single day options activity is rendered the 30 day vix less relevant as a tool for story telling >> i'm too old to say the vix is broken

you know, we've heard that for so many years, and the vix still does a very good job look at today's tape very little volatility, vix below 20, that fits. >> you're noting buying the rate cut picture and you have not been - >> the earnings outlook, this quarter is doing better. we were seeing low levels of beats and beat amounts and the decline in cadence we're back to normal like 5% beats. that's pretty good analysts are looking for record earnings by q4 that's not going to happen. >> you usually have a good read on sentiment whether it's the google trends or just what is on people's minds. there's been a lot about how negative sentiment has been around stocks at the institutional and hedge fund level. what about retail? what does that tell us >> retail seems to be more constructive not just on stocks but the economy as a whole google trends for all kinds of labor market indicators the worker 9 to 5 is confident in

their ability to get a new job, work remotely all stuck where we were 18 months ago that hasn't really changed. >> in other words, as long as there are job gains and the employment picture is strong the consumer holds up and equity market holds up? >> that's the story, yes we've been sitting with rate cuts now for over a year and the story has been largely the same. the only difference is earnings are negative year over year and will be so for the next quarter. it hasn't helped corporate america's profits but in overall economic outlook gdp should come in 2.5% on thursday. things are looking okay. >> the consumer is appreciating the lower gas prices year on year and see how long that holds. >> exactly. >> thanks. good to see you. investors are focussing on a slew of tech names reporting this week. one name outside of tech reporting that's outperforming most of the mega cap names we'll reveal the stock and what you need to tcwah there. back two minutes with the dow up

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general electric hovering at 52-week highs, the stock ahead of the company's earnings

tomorrow so is ge a better stock to own than, for example, big tech stocks right now that's the question seema moody is asking this morning she joins us right here to tell us the answer, i guess. >> who would have thought general electric retreating at a more expensive valuation than big tech, but part of that has to do with the story it's transitioning from the highly diversified industrial to -- which had loads of debt to a simplified business easier for wall street to understand. you will see it's up 53% year to date, outperforming the xli, industrials etf and large cap names like apple and google, underpinning ge's growth story is the aerospace engine business organic revenue expected to rise year over year fueled by the continued rebound in travel. there's also talk of ge raising its price of its engine. amelia research says the outlook is on international travel ge's engines power more than 50% of the wider body aircraft

market the next player being rolls-royce. jefferies believe ge can get to 120 a share but the biggest downside risk is supply chain. if productivity falls short. there are 2500 individual parts that go into the engine. the other question around the spinoff of the power business. slated for early 2024, and clearly a big part of ceo larry culp's strategy and he can largely be credited for the turnaround over the last two years. >> and ge health care has done well since it was spun out from the company in terms of its own stock. there doesn't seem to be the margin of safety there might once have been at 50 times earnings, seema. to your point you made at the top of the report, far more than alphabet or meta or big tech -- big cap tech stocks. >> it comes down to the story that has become easier to digest, not just for smart money but retail investors as well they can understand the resumption of air travel, not just domestically but

transatlantic as well and how that fuels the leaf engine business we're expecting 1700 engines to be produced this year, 2,000 next year and part of that predicated on the china story. we know the economic data has been better than expected over the past month how does that fuel the consumption story as well and lead to bigger sales of engines too. >> that's what i was going to ask, if ge is considered like a bellwether for the global economy? it was such an industrial giant but became its own turnaround story. >> it's great point because what we're seeing across the industrial sector, companies including ge, 3m, honeywell are becoming simplified through spin-offs and m&a. do we use the industrials as a barometer of economic growth perhaps we look at all of these companies to get a sense of which parts of the economies are holding up caterpillar on thursday which is a good pulse on construction and machinery. it's the broader story now. >> yeah. less conglomerate discount and more focus. >> maybe bigger is not better for the industrials.

>> we'll see. >> shrink to grow, the motto. >> seema moody. wedbush's top picks a ahead of results from google, microsoft, meta and amazon and why they see f.a.a.n.g. rallying double digits this year. don't go ay.wa ♪♪ choosing miracle-ear was a great decision. like when i decided to host family movie nights. miracle-ear made it easy. i just booked an appointment and a certified hearing care professional evaluated my hearing loss and helped me find the right device calibrated to my unique hearing needs. now i enjoy every moment. the quiet ones and the loud ones. make a sound decision. call 1-800 miracle now, and book your free hearing evaluation.

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welcome back to "squawk on the street." i'm bertha coombs and here's your cnbc news update at this hour growing fears that violence in sudan could escalate now that most foreign diplomats have left the country. the u.s. embassy in the capital city of khartoum was evacuated over the weekend and diplomats from european nations also left the country as fighting worsens. the conflict between sudan's armed forces and a rival paramilitary group has resulted in more than 420 deaths so far, including 264 civilians.

governor ron desantis meeting with officials in japan, as the potential u.s. presidential candidate tries to bolster his foreign policy credentials. asked by reporters about recent polling for the republican nomination that shows him behind, desantis replied, quote, i'm not a candidate. so we'll see if and when that changes. and global military spending hit a record high last year according to a report from a swedish watchdog the stockholm peace research institute said global spending was up nearly 4% led by a 13% increase in military spending in europe following russia's invasion of ukraine. russia, china and the u.s. are the biggest military spenders and account for more than half, 56% of all expenditures. back over to you, david. we're a little over an hour into trading let's get a look at the markets from the perspective of one bob pisani let's see what has his

attention. >> we're in the 4100 to 4150 range. traders find that boring but there's things moving, defensive sectors, particularly consumer staples have been strong recently health care, also a sector that's been doing well what's drooping is the semiconductor sector which was very strong a couple weeks ago and the banks. banks are sort of back to the middle of their trading rings they were at show you consumer staple names, coke, amazing pricing power, that's hitting the highest level since august, new high for clorox, mondelez, walmart at a high for the year, procter & gamble broke out on friday terrific numbers there, 4% from a new high the staple stocks are moving we're about 20% through earnings season and the story here so far is, believe it or not, the estimates for the first quarter are going higher they're down from a year ago but the estimates have been raised in the last couple weeks and actually going up. second quarter, third quarter, fourth quarter numbers are

seeing slightly lower numbers here overall, on the year we're going to be about flat, most of the strategists think we're going to be down 5 to 10% in earnings the street and analysts are not acting that way. the risk to earnings right now is just that the market is wrong, that inflation is going to be high and going higher and we're going to have a problem with the hawkish fed we'll see if that actually happens. meanwhile, the big story is over in europe. look at these returns so far the s&p is up 7% for the year. these are european indices 20%, 18%, 14%. all of europe is up 15 to 20% and there's a couple reasons for this number one, you heard a lot about european luxury doing well, including lmvh, but rolls-royce, richemonth. bmw up all 20, 30% on the year some of this is the european markets selling into china and doing really, really well. europe is part of it other countries, france where

you get the european luxury flames, but all of europe is up 15 to 20%. ireland, france, individual country etfs it's not just luxury there's something else going on here so there's a couple of reasons why europe in general is doing so strong. even italy up 17%, the uk up 10%. the china reopening story is helping but then relative valuation. europe is much cheaper it's a value play land trading at 14 times forward. the u.s. is 18 to 19 so much cheaper. earnings are going up. earnings estimates believe it or not are rising for the year for europe while in the u.s. mostly it's trending downward the war in ukraine has taken its toll but the winter was not as bad as people thought and generally, generally, the system have been rising for the earnings finally want to point out, mean reversion going on guys, europe has underperformed the united states for a decade

so it's about time for some out performance. and remember, i know sara you follow this, the weaker dollar has really helped. the fed has been much more aggressive than what's going on with the european central bank and that weaker dollar is a bit of a tailwind for europe as well back to you. >> yeah. bob, but europe has inflation problems too and they will have to hike their way out of it like us with a tough sort of growth outlook there. i'm curious, bob, what your take is on tech earnings this week and where the market would be without say microsoft and apple? just we were debating are we in a bull market or bear market i want to know where the market would be without the out performance of those names >> we would be lower, much lower. so the problem with tech right now is it's trading much more expensive than the rest of the market it's one of the main reasons we're 18 to 19 times forward earnings that's a bit and so as a result of that, it's a crowded trade that's high

valuation and that always means that you're more susceptible to a potential downturn so far it hasn't happened. we've been waiting for the crazy numbers. everybody is staring at nvidia up 80% saying that can't go on and yet it's not doing as well it was a few week ago, most of these stocks are only a fraction below where they were at their recent high. nobody believes the idea that the valuation story isn't going to work. if there is a soft landing you can argue for a higher valuation. you're sort of stuck the game is where are you on the rerecession debate what side of that debate if you're on the side of a harder landing, rates stay higher for longer, tech stocks are over valued. >> it's going to be a busy week. thanks. speaking of big tech, our next guest believes results will be better, reiterating his call tech stocks rally double digit maybe. let's bring in dan i have, wedbush managing director of

equity research at post nine. >> good to be here >> there was a notion last week a lot of mega cap names don't need to crush it, come in, meet with an affirmation to guidance. would you agree with that? >> i would it's not roses and champagne in terms of the macro, but i think better than fear is what we will see from digital advertising and cloud and enterprise and there's less reasons for bears to ultimately be negative on tech that's are really our call a green light going into earnings. >> what have you made of the hand wringing about azure and growth there what's the number they need to surpass? >> i think 27, 28% the line in sand in terms of growth. i believe we could have a 3 in front of it. we're seeing our share gains versus aws, and they're in their core enterprise backyard that's why nadella is flexing muscles not just on chatgpt and a.i. but in terms of cloud i believe microsoft is starting to get momentum despite the

macro. >> they're taking share from aws. a lot of hand wringing about what the aws growth rate will be for amazon that could hold the key to that stock. >> overall as i look at cloud from aws to ultimately microsoft, and ibm, i mean cloud, we saw a pretty significant tick up in close rates in february and march from what we saw in january and that's through april think about the guidance, they ripped the band-aid off when they gave guidance, cut costs and ultimately, we're going to see a slight tick up relative to expectations and going into this year, new york city cab driver was bearish on tech. most investors i've talked to the rally, still negative, going to check another box off. >> seeing desk commentary that says is the layoff trade getting into the late innings or are there still companies that doubled head count every few years that could benefit from the trade? >> i think it's on two sides

tech firms, tech stars, they were spending money like 1980s and you're starting to seat cost cuts in the seven lgts, eighth i think but you have a.i., a big theme over the next week or two will be the "game of thrones" in a.i. in terms of microsoft and nadella leading, but what is google doing, amazon, apple. i think they will talk about as well, because this is going to be a real monetization trend rat are than hype. i think enterprise will be massively bigger than consumer in terms of the a.i. >> that's interesting. because some ask what is apple's a.i. strategy? are they waiting in classic apple fashion for the second mover strike advantage >> classic cupertino and cook. they will start to tip the hand a little next week an and then really worldwide into june apple, we believe they spent 7, $8 billion on a.i. and i think that's going to be significant

in terms of the golden kecho system. >> what are investor expectations on a.i. they've done -- some of them have done the announcements. when do you see the mn monetization >> i think it starts tomorrow with nadella on the conference call we're starting to see, especially on the enterprise, not just on the consumer, they're looking towards monthization on the enterprise when you look at cloud and what jassy is doing, google, clearly looking at this, i think enterprise in terms of the processing power, that's going to be the key and i view as the green field, not just on the consumer side and enterprise, nadella it starts tomorrow. >> processing power, explain what you're talking about here >> basically, you think about all the cloud workloads that have gone on, in terms of hyper scale, and enterprise trying to scale that back, what a.i. is going to do, the need for processing power on cloud will enhance it

and david, i look at them as carrot and stick first step is shift to cloud the reason a.i. is so real to all these tech firms and even on a meta side, they realize that's the monetization side. i think that's really a big thing that's happening here in tech. >> back to the bigger issue of where we go from -- on this quarter. the hedge fund guys who i tend to talk to are not particularly positive for growth rates or the economy. i assume you have some of those conversations, so what's your rejoiner to them when they're like you're too high in terms of your estimates and growth rates? >> they hated microsoft, they despise it at 285. when i have positive notes or what i hear from nadella, they hate the tech rally, not believers the numbers are low enough and my view is that our checks on enterprise, what we see coming from apple, from a unit perspective in asia, i'm not saying it's roses, but it's

better than fear this earnings will be important because it's another check box that as you're a bear, okay, now what valuation? fed, macro i think that's sort of the setup how i see it from an institutional perspective in terms of hating the tech rally. >> good to see more answers by week end, let's hope >> thanks. >> still ahead, luxury giant lmvh surpassing a historic milestone this morning what it could be signaling for high-end retail next don't go anywhere. we're back in two minutes, up 14 points on the dow, though, s&p 500 has slipped negative, down 'lbeigou0. wel rht back.

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good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation.

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shares traded as high as $80 in 2014 but faced e-commerce headwinds, shifting consumer dynamics leaving it in a tenuous position in recent months. it's a tale of two retail names. the world's top luxury retailer hitting a milestone and robert frank frank has more on that hey, robert. >> good morning, carl. lvm richie, market cap of over $500 billion, that's the first company ever in europe to break that half trillion mark. up 70% in the last seven months. founder's fortune at $212 billion. he's the world's richest person. one of only three people ever to have a net worth over $200 billion, along with elon musk and jeff bezos now, the latest surge in their stock price is due mainly to china's reopening. lvmh's global sales up 17% in the first quarter to 21 billion

euros. fashion and leather goods, that's their core business that was up 18% in the quarter that was twice what analysts had expected wealthy consumers around the world continue to spend since they are less impacted by inflation pressures. but the big driver of their success is still that incredible diversification. they have 75 brands from dom, fendi, europe and the u.s. remain strong. sales at tiffany have more than doubled since lvmh acquired that company less than two years ago. and tiffany's flagship store on fifth avenue, that reopens this week that store used to account for 10% of tiffany's global sales. guys, you can count on a big party there with beyonce, jay z. bernard talking about this being a culture company as well as a luxury goods company

>> in general about him, what's he do with all that money, beyond obviously what he owns in the company? we know what bezos does to a certain extent and musk. we don't seem to know as much about arnault's family office, where he has investments. >> he does have a family office. the trust that controls lvmh is distributed among the kids right now. a lot of talk about succession he buys a lot of artwork and he does a huge amount of philanthropy he was the main funder on the rebuilding of notre dame in paris. philanthropy, the family office does a lot of private investments. we don't know what a lot of those are. for now, most of this holding is in the company stock, which is doing better than just about anything else he could probably invest in right now. >> he probably pays a lot to french tax authorities as well, right? they have some pretty high taxes. >> yes, he does. >> i think so the succession

story is so interesting. they have to do a spinoff. don't all the kids run -- one of them recently named head of christian dior they're all running businesses, aren't they? >> they are all running businesses, very involved in the company. the trust that will control this company, if and when he ever steps down, it has to be unanimous. so, the family right now is very sort of stuck together and they get along together, which is surprising given how this often works. >> yes robert, thank you. robert frank. still ahead, former federal reserve vice chair alan blinder, why he says the president doesn't need congress to avoid a debt ceiling crisis and why he thinks the debt ceiling should be abolished all together. that's coming up in e xt urf quk the street.

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as we look to close out this hour, let's get over to dom chu. he has key movers. >> we'll get a check on the biggest laggard, first solar down 6%. the solar company is getting downgraded by citi to sell from a prior neutral. they cited, amongst other things, challenging long-term outlook and inflation reduction

has already been priced in and charlz of albemarle, the mining company, lithium production, big thing for batteries is rebounding after big losses last week, tied to concerns about chile considering nationalization of mining. first republic is up big ahead of its earnings reports after the close today. up about 14% big regional bank report coming up back to you. >> follow that one closely we'll be focused on what that company has to say thank you. that does it for this hour of "squawk on the street." don't go anywhere. rahtheuranother big ho stig aad

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matching your job description. visit indeed.com/hire and this is ready to go online. matchingany questions?ription. -yeah, i got one. 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. good monday morning. i'm sara eisen with carl quintanilla. live for you on the floor of the new york stock exchange. setting the agenda today former federal reserve vice chair alan blinder b of a's head of commodity francisco blanch and jason trennert right now, markets today, pretty light volume as we are waiting for thsl