mcdonald's and gm all due in the next few hours. moedia shakeup what is next for fox and cnn after departures of tucker carlson and don lemon. and shares of first republic bank shares are plunging after weaker than expected numbers today is tuesday, april 25th, 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. let's look at the u.s. equity futures at this hour

red arrows we say this every morning lately dow futures off 138 points s&p figutures down 18 nasdaq down 37 the dow is only 3% from the all-time highs if you were looking through the sector to give you color on how far we have come real estate is the sector that is 20% from the all-time high. the treasury market is yielding 3.49% for the 10-year treasury the 2-year treasury is lower at 4.063. let's update you on the story we told you yesterday. johnson & johnson is spinning off kenvue it is valued at $20 to $23 a share for the ipo. according to the filing.

that would value the business with tylenol and band-aids and baby care and skin care products at $40 billion joe. all right. we'll do dow later it looks okay. dow chemical that is. you cannot tell if the stock will open right now. let's talk about coinbase. suing the s.e.c. asking the regulator to be forced to share the answer to the months old petition to regulate the crypto industry with existing framework. coinbase is regulated under security laws which are not applicable to the business the agency has made the decision about coinbase petition from last july, but hasn't notified the public of the decision the lawsuit seeks to force the s.e.c. to answer that petition publicly we have u.p.s. earnings out.

u.p.s. looks like earnings of $2.20. a penny below expectation of 2.21 revenue is shy of $22.9 billion over the $23 billion the street was expecting. in the first quarter, there was deceleration in the u.s. retail sales which resulted in lower volume also said ongoing demand in asia and they controlled what they could. they talk about the operating profits and margin being in line with the base case target. just given what is happening, the macro conditions and they expect volume to remain under pressure remaining focused on driving productivity and invest in efficiency the stock is down 3% right now dow reported a loss, but if you back out items, the adjusted

net was 58 cents a share over 36 cents estimate sales expected at 11.352 sa sales aim in at 11.85. they breakout industrial and infrastructure 3.8 billion. packaging and plastic specialty at 6.11 billion. materials and coatings at 2.28 i don't know what we can glean from dow >> one more point on u.p.s i'm getting to the outlook in january, it provided a range for the financial markets on the macro forecast at the time pause of the weakness they have seen and deteriorating environment changes in consumer behavior and they expect full year revenue to be at the low end of the previously guided range. that would explain the weakness. >> comparisons on dow.

net sales. 11.9 billion that is down 22% versus a year ago. driven by slower economic volume glob globally when you look at it that way and we compare to expectations it is a weaker macro environment. you have pepsi crossing the tape. the street looking for 1.39. revenue at $17.21 billion. the company pointing to demand for the soda and snacks. price hikes are offsetting rising cost. the vice chair hugh johnston will join us we will talk to him in the 7:00

a.m. hour. >> raising the share >> that stock up 1%. >> we continue to see the story of the have and have-nots with the earnings season. president biden announcing his bid for re-election. that comes in the form of video that was posted moments ago. in it, the president frames the 2024 election as what he calls a battle for the soul of america gm and samsung building a joint battery plant in the united states. gm chose not to pursue with lg energy solutions gm is expected to report quarterly results at 6:30 a.m. we will talk to the cfo paul jacobson in the 7:00 hour. and former executive from jpmorgan chase jes staley asking

the court to throw out the lawsuit against him for the failures in working with convicted sex offender jeffrey epstein. jpmorgan chase says staley should be held libel for damages because of his relationship with epstein and visits to his properties of course, the article out last week that described a number of people at jpmorgan chase who had maintained relationships with jeffrey epstein. >> to say scapegoat when he was texting about snow white from thehot tub while drinking champagne. >> are we sure it wasn't a disney movie no that's not going to fly? is it? >> the whole thing is bad. all of the people who were constantly in contact -- at minimum, bad look or worse >> i guess he killed himself

right? certainly a lot of people -- >> epstein >> yeah. i'm sure a lot of people were relieved and happy when it happened it doesn't mean -- >> there are other views on that >> that's what i mean. think how convenient that was for certain people dead men tell no tales, andrew you know that. >> you know what the warden said they came out with a report. the official version >> i'm okay with that. coming up, the most important story of the day first republic shares plunge after the plunge in deposits which was worse than analysts expected more after the quick break. don't miss verizon ceo hans vestberg we will talk to him in the 7:00 hour you are watching "squawk box" and this is cnbc

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look at 6.5% high. point being so many of the major sectors have come back effectively. there is the s&p. >> we need a longer term chart not quite 37,000 on the dow. it wasn't too far. that's only a year that's not long. >> there it is >> back it out you can almost see it at 37,000. if you look at it weekly or monthly, it shows intradata. it just begs the question. we'll do the math. nasdaq has to be down a lot more than 6%. >> it actually surprised me, too. >> from the 52 week? >> the 52-week high. nasdaq is about 5% from the 52-week high it dropped significantly

i ccan find that. while you do that, ubs reported a 52% drop in annual profit due to the $665 million hit related to the litigation matter in the u.s. mortgage backed securities. the bank is in discussions to close the 15-year old issue soon it continues to see inflows from credit suisse. the bank brought in $28 billion in new money from wealthy clients. that wasn't enough to distract from the weakest quarterly profit in years. disappointing outlook for income in the wealth unit. ceo of british bank standard charter warning of risk from last month's market turmoil

which seemed to subside. bill winters speaking to the colleagues ns in the uk. rapid interest rate hikes accentuated the issues the flaws are still there and other balances could come home to roost one flaw, becky, the first republic news. >> first republic shares plunging the regional bank showed deposits down nearly 41% in the first quarter. that was worse than the street had been p expecting although executives said deposit flows stabilized the bank plans to cut expenses whic which includes laying off 25% of the work force the stock is down 20%. joining us this morning is andrew leish the senior research analyst at piper sandler.

andrew, we knew the numbers would be watched closely at first republic how did it match up with what you were expecting >> i was not expecting that big of a fall. i was closer to $70 million. $30 billion coming in from the consortium of banks. >> what do you think >> right now, they are out there. the current cd rates range between 4% and 4.5% to get deposits back. the plan is bring those in and reduce uninsured deposits and bring down the high cost of bothering -- botrrowing. you will see other analysts say

they will not be profitable for several quarters. >> can you see light at the end of the tunnel or is this such a long tunnel that it is going to be a while before you make a guess? >> i think one of the continuathings that would benefit the company is lower rates that could alleviate the deposit cost pressures they are faced with >> the fed is not likely to do that soon. >> not anytime soon. we are looking at next year at the earliest i think we're basically going to see the company lose money for the next several quarters. >> if the fed doesn't cut rates because it is battling inflation and it decides to stop raising rates and doesn't cut rates for the next two years, how does that change? >> that tunnel gets a lot longer >> the idea that what they are doing by bringing in deposits shores up the bank which is good

news e given the steep declines year to date, is this enough of a cut in the stock price to reflect the lower outlook for the company? >> i think right now, yeah, that makes sense. you still have questions if the company is exploring strategic options and what value would they sell. you have to take the haircut with the interest rate scenario on the interest of the portfolio and loan book which is lower yielding than they find elsewhere. i think the stock reflects that dynamic today. >> there had been -- there had been word on the street that anyone who had been interested in the bank was concerned. if they did buy it, all of the hold to maturity would be big to the market they would have to swallow that. >> that is the problem with this

environment. when and if we have lower rates, it makes that proposition more attractive for any inn kwquirer you need interest rate scenario for that to be the case. >> what about the money other banks put into first republic in terms of shoring it up >> i thought it sent a good signal they want to help support first republic manage the issues >> given the stock decline, was it money well spent? >> in the grand scheme of things, it is not a big drop in the bucket $5 billion for jpmorgan chase doesn't move the needle on their balance sheet. it shows a positive signal they are willing to support another institution. >> it is just deposits >> insuring deposits when is this over?

when is the movie ending >> i think they will muddle through and lose money for the next several quarters. if they can make it to the lower interest rate scenario, that's when you see profits start to improve. >> i think andrew is asking what this means for other banks as well is this a one-off? >> my worry and i don't like to say this -- my worry is you will see more deposit flight. that is the issue. over time, if more people take money from the bank, it doesn't matter what happens to interest rates. >> that's true yeah i think the commentary they mentioned yesterday with deposits stabilized and only down 1.7% so far this month. that's a decent signal from internally >> to me, there is a bizarre

game of chicken going on between big banks and investors who want to put money in, but see it as a falling knife and say the knife is still falling and i'll wait it out until it ends on the management side, nobody wants to catch said knife because most of the people used to have stock at $150. now stock is at $12. they say if it goes to zero, that's one thing, but if i get it back to 25 or 30, i'll take the risk there a weird risk in balance with the thought propcess. >> the other andrew says it is not existential and bring in people to pay more and bring in people with insured deposits to stem the deposit they are not getting money because they are paying out so much it doesn't mean they will go to zero deposits. >> andrew, you can get rates like that in t-bills, too. >> exactly

that's what they are competing with right now especially with the high net worth individuals at the bank. if you can get a cd or t-bill, absolutely >> andrew, thank you. >> thank you general electric reporting phil lebeau has the numbers. airplanes and engines. this is your thing, phil >> ge aviation is the engine that drives ge yes, they have part of the q1 results. the stock right now, not much reaction i would suspect that would change as you have them beating the street at 27 cents revenue above at $14.49 billion over the estimate of 13.36 billion. we will not go into all of the numbers within the numbers they are seeing increased demand not only for orders, but also for shop visits and elite

engine that is driving the growth at ge aviation a couple of metrics which stand out and how it filters through to the bottom line cash $102 million in the first quarter. improvement compared to q1 of 2022 first positive cash flow since 2015 we have gone eight years since positive free cash flow in the first quarter. they are now raising the lower end of the guidance for full year free cash flow. now exacting between $3.6 billion and $4.2 billion previously it had been in the range of $3.4 billion to $4.2 billion. up another couple hundred million dollars. bottom line, they are seeing filtering through with orders. leap engine. leap shop visits it is coming through to the order. that is why ge posting better than expected earnings for the

first quarter. i'll talk with larry kulp later this morning guys, back to you. >> good perspective, phil. since 2015 what is $100 million of free cash flow? >> joe, how many quarters did we sit and say it is another quarter with negative free cash flow or loss for ge. now positive free cash flow. >> it didn't sound like much if you are losing -- last year >> increase of $1.3 billion. $102 million up $1.3 billion. >> it has a plus sign. doesn't matter. >> exactly >> you have to say this guy is getting it done, finally after eight years. all right. >> a lot of heavy lifting that had to be done no doubt the encouraging thing and one reason why ge shares rallied the

way they had, look at the tailwind not only in terms of commercial aerospace, but orders where they collect and where they really start to hit the profit stride is three or four or five years after the engine is delivered that is where the money kicks in with services and revenue. we are just at the beginning of that which is the reason the shares have moved as much as they have moved in the last three-to-six months. >> thank you, phil >> you bet >> nasdaq is down 25% from the all-time high. >> yeah. >> up 81% from the pandemic low. that shows you that, you know, nasdaq is like this, other things move like this. the dow is down 6.5% from the all-time high. it moved 81. my arms are getting shorter, too.

you mentioned that when does that happen? >> right you can see it better when it is farther away >> i need longer arms. i need a selfie stick. coming up, warnings ahead. i thought i was beyond having it happen at this point it's starting. still on the planner today, gm and verizon. up next, apple the claiming victory over the app store rules. one keclm y aiit didn't win. details after the break.

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welcome back to "squawk box. appeals court sided with apple

over the app store rules with epic games apple kicked epic games out of the system the appeals court affirmed the decision that mostly found that apple did not violate anti-trust law by banning competing app marketplace on iphones one claim apple lost was not overturned and could be a key one which forced apple to place links inside the app to make purchases outside of the app store. that eliminated the cut apple made with in-app purchases it is considering appeal to the supreme court. let's get to phil lebeau with the quarterly results >> better than expected numbers from gm. increase in guidance toward the full year. we will talk about that in a bit. the first quarter, they beat the

street on top and bottom $2.21 a share. they expected $1.73. revenue better than expected at $39.99 billion q1 free cash flow. 2.23 billion versus 1.63 billion in the first quarter of last year we're seeing the impact of the company being able to sell vehicles at the prices they are selling at a richer mix and the north america business they are killing it right now. that is offset over china. the adjusted margin for the first quarter is 9.5%. that is below compared to last year understandable full corporate wide. look at america adjusted margin for the first quarter. 10.9% compared to 10.7% in q1 last year. i mentioned china. $83 million profit in first

quarter last year. here is the adjustment of full year profit. expected between $11 billion and $13 billion this year. increase of $500 million from the previous guidance of earning 10.5 and $12.5 billion we will talk to paul jacobson here on "squawk box" later on this morning we will talk about what is happening with the ev market remember, they are expecting to sell and build and sell up to 400,000 evs through the first half of next year. they have a long way to go to get there. they are confident they will we will discuss that with the q1 results and guidance this morning. guys, back to you. >> okay. phil, thank you. just getting 3m in and looking through the numbers. it looks like the company came in with revenue that was better than expected. $7.7 billion against 7.48.

adjusted earnings per share. $1.97 against $1.58. i believe that is apples to apples operating margin at 15.4%. the company is talking about how a lot of different things going on, including restructuring they will take on they will eliminate 6,000 positions globally in addition to the 2,500 positions they announced in january between those combined, that is 10% of the global work force they expect the actions to drive annual pre-tax savings of $700 million. they expect to expand margins for future growth. for 2023, first quarter, the markets played out as expected they saw a stronger than

expected earnings in margins they continued to improve inventory levels and cash flow sales down 5.6%. >> adjusted sales down 9.76% the macro environment. dow and 3m >> saying the same thing they are looking at organic growth down 2.2% if you exclude the russia exit and decline of rest pr respirator sales >> organic growth? sounds like earnings. >> sales i think it is sales. disposable sales operating cash flow of $1.3 billion for adjusted free cash flow of $0.9 billion

just looking through, they do give guidance for the full year. they are affirming the full-year expectations down 6 to down 2% of adjusted total sales growth reflecting down 3% to flat. adjusted earnings per share. the street at $8.09. adjusted operating cash flow of $5.8 billion look at the stock. up 1.8%. a lot of moving pieces. >> a lot of people. >> global work force >> getting rid of management layers. >> layers of management. when we come back, we have first on cnbc interviews with the biggest companies reporting today. the ceo of verizon hans vestberg joining us the cfo of general motors paul

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good morning welcome back to "squawk box" live from the nasdaq market site in times square. the pre-market session down 130 on the dow nasdaq down 47 s&p indicated off about 20 points here is a look at earnings we have seen today and some stocks moving you can see pepsi up a little bit. 3m general electric over 100. the only one we see down there is ooups, u.p.s for early reaction, let's bring in cameron dawson. officer at new edge wealth

sometimes i'm thinking about, cam cameron, on a diet and if i said i lost two pounds, but year over year, i'm up 15 -- that's what i'm seeing here. a lot of the companies beating expectation, but sales are down from a year ago. it is a tough operating environment when you pointed out for a while to not be that bullish near term. >> exactly it is rather unsatisfactoryinging if you do lower the bar and jump over a lower bar, stocks can go up for a short period of time. the question is what is the message underlining on the global economy when we look at sales down and profits down for a lot of the companies a lot of the names reporting are cyclical companies like gm and ge and 3m. when you see profits or revenues fall, you see profit lines compress quite a bit i think that what we're starting to see is weakness in the global economy finally starting to show

up within the names. the real standout one was u.p.s. they talked about how retail sales demand in the u.s. drove volumes to be lower as well as the fact they are starting to see more weakness within asia. that points to a slowing global economy for sure. >> i can remember since we have you on a bit, i can remember saying, cameron, this market is doing well you weren't that positive. the next time you were on, wow, cameron, the market came back down you were right i did it again now we're in the period of doing pretty well. you are missing this are you feeling like you are missing it or once again going to say you will get another chance 4% or 5% down from here >> we are seeing momentum wane a fair amount. we bumped up again the peak in valuation that we have been

seeing in every big rally the market staged which is shy of 19 times. we rally up to that level and peter out and lose momentum and start to rollover again. i would note, we are invested. it is not as if we are sitting on the sidelines we stay invested in high quality companies in order to ride out periods like this. >> you haven't given us an all clear. i'm not saying you should. what would get -- what would indicate to you it is an all clear? when do you expect that? >> so, it is really important to get through this earnings down cycle process. usually stocks do bottom when you are still in the midst of the earnings down cycle. it is not as if you have to wait for earnings to rebound to be able to step in. we think we still are in early days of marking down earnings estimates. there is a huge rebound in earnings that is baked in not just to 2024, but also the back half of 2023

we want to see those estimates really get recalibrated and it is a matter of time and magnitude. the fact is being nearly at the 18-month mark of the bear market by the time we get through the end of the second quarter. really, that is at the point where you digest the bear market and you have a draw down that looks close to above 25% and that is likely the forward returns look better from there we reelally need to see the proi cycle tart to move through which we are seeing right now. >> you are mostly focused on the "e" not on the multiple at this point. i guess we know or we feel like we know the fed is almost finished maybe we can assume what the multiple should be and then it is all about what you are saying the earnings trough and the period and what really happens are we too bullish for 2024 or

too bullish for the second half of the 2023 on earnings? >> i think it is both. i think one of the reasons you see stronger markets year to date is the desire to look through earnings weakness in the near term and turn to 2024 that does ignore the fact if you have 2023 starting at a lower base, 2024 numbers still look too high when youyou put a $243 per shar the street is implying 9% growth off the 220 this year. that gets you down to the 36 to 3700 level that could readjust through the process. >> grinding. that is what we are seeing for the year and a half now. cameron, you have a favorite stock? let's say i warrnt to buy

something right snnow? comcast. >> you know i don't do that. >> i'm kidding comcast. that is who owns cnbc. cameron, thank you still to come this morning, we have more earnings ahead. we will hear from mcdonald's and verizon. we will bring you the exclusive interview theroneoanwi viz c hs vestberg and don't miss the interview with peter lynch in the 8:00 hour "squawk box" will be right back.

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kwelcome with back to "squak box. whirlpool beats first quarter earnings the cfo is not seeing a decline in sentiment as consumers are adjusting spending habits. we have more coming up, media shakeup. we dig into the high departures of tucker carlson from fox and don lemon from cnn. we'll do that right after the break.

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big changes yesterday in the media world, sweeping everything, tucker carlson out at fox sz, and lemon exiting cnn, all this news after nbc universal ousted shell for conduct. and welcome ben smith. check that out, his book >> that was like 1,000 years ago. >> we thought the "new york post" had to be anchored away.

i thought that was an easy one >> aaron rodgers -- >> he pushed them off the page >> i don't know why tucker carlson is not the front page of the "new york post." that's so confusing. should we try and connect tucker and don lemon. >> tucker is a bigger story. >> what do you think happened? >> i don't buy any of the existing explanations. clearly he said a bunch of disgusting thing about women and there's a sexual discrimination lawsuit, and it was like -- >> what did he say about the murdochs because it's redacted >> yeah, maybe he said something really bad, and maybe it was saying bad things about his

bosses, but that's widely known that he does that. >> the stock falls 3% yesterday. as if the world is falling, and i think to myself, a bill o'reilly, glenn beck, megyn kelly, and the list is long of talent that they thought were irreplaceable and they were replaced there's still the carriage fees relative the advertising do you think it has an affect on fox? >> well, the audience is older there will be some pumps around it but i don't think tucker will be able to say download my app and come over here >> i don't know if newsmax has the money, and one night news max beat the martha mckelam

show all hell broke loose >> well, newsmax is they are about to be owned -- i don't know they don't have the money but they at the receiving end of another dominion lawsuit it's -- i think it's -- maybe there is some third place he could go, but i don't know >> paul ryan, the board, and they are all looking at what happened and you just said they are going to wait until smartmatic to do any -- that's 2025 >> they waited a year already. >> what about don lemon? >> well, there was a mandate from john malone from david as

hrauf to move away from the trump years, and lemon had been a symbol of that >> do you think this whole network is fixable i love this king charles name of the new charles barkley show with gayle king, but do you think that could change the name for the network? >> what usually physicians cnn is news, the time people go to cnn is massive rolling news, and not the fun news we can enjoy here, but you can't take your eyes away from what is reporting. >> does that still happen? >> does news still happen? >> is that still the place you go >> i think when the ukraine war started that's where people wept >> how do you create a business that is not lumpy. everybody is looking to flatten it out, and what can you do to elevate that

what jeff zucker was doing before, it was something the others didn't want to do which was a little outrage, and basically can you do it without the outrage? >> well, tucker -- zucker was doing it in the trump era, where people were outraged and scared and tuning in for that, and i don't know, i think it's hard. >> there are very important money and business angles to the general news stories, and -- >> you know where you can watch that >> where, andrew >> you want to come back >> thank you for coming. thank you for playing. good luck to you nice knowing you >> i think the thing they are chasing and what chris has done in his career is create shows that are hyperrelevant that insiders talk about like "morning joe." >> you can check out the deal

book every morning thank you. >> thank you verizon just out with its first quarter results. looks like the company came in with an adjusted earnings per share of $1.20, and that was inline with what the street was looking for. the stock is up by about 25 cents. we have the ceo, hans vestberg, joining ugs after the break. clap on blue. on what? on blue! blue! in a place like westinghouse, there's just a lot of opportunity for kids to go down the wrong path. good. i have no idea where i would be, or my kids would be, without football. coach is, like, just our rock, for real. he's preaching our future every day. jackie nevels: the impact that he has on taymir makes me want to be a better mom. donte taylor: these coaches really want to see you

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dow component mcdonald's reporting this morning let's get to kate rogers who has the numbers. >> good morning, joe mcdonald's across the board as reported, and revenues 5.9 billion versus estimated of 5.5 for the quarter. international license and corporate surpassing estimates, most notably for an 8% increase globally and 7.9% in the u.s

it's due to price hikes and positive revenue growth. we have refocused on operational excellence in our global performance and we have seen significant customer satisfaction improvement around the world, adding mcdonald's brand remains strong mcdonald's poised to likely be the beneficiary of any consumer tradedown in this environment, so we will be on the lookout for that much more to come on "squawk on the street." >> when will i be able to try the new burgers with the buns that are softer? >> yeah, those are starting to roll out across the u.s. it's an improvement to the big

mac. mcdonald's has done well when they he gressive marketing campaigns around things like the big mac, and there's a grilled onion come po po component. we will see what they have to say on the call this morning >> tell me about it. kate rogers, thank you i am glad you had that answer ready. enquiring minds want to know verizon just out with first quarter results. there was an adjusted revenue, light. the company pointing out that total broadband editions for the first quarter, and joining us

now is hans vestberg >> good morning. >> when i said earnings was a little light, looks like you took issue with that >> no, i didn't. it was a little light because we had hardware sales meaning it's devices, so that doesn't really matter i think what is more important for us is the service revenue because that's what is creating our margin and the cash flow we had in the quarter >> let's talk about what you are seeing, just in terms of the quick headlines on this are that the pandemic boom is over and americans are getting more conscience about what they are doing and spending on. that's what we have heard echoed a lot just recently, and in the

case of people willing to upgrade phones or plans? what do you see? >> i think the upgrades is when people want a new mobile phone and that's continuing. we have seen a good momentum, the first quarter on the consumer time, it has been over 11% year over year, and remember the second and third quarter, we sorted that out on the consumer wireless side. and then 437,000 new broadband customers for a quarter, and we have not seen that in a decade really good. all in all, that helped us with a strong cash flow of $8.3 billion in the quarter, and so a lot of things that we

strategically talked about is happening. we have more to do, but clearly this was a step forward for us we thought it was a solid quarter. the team is doing great work >> and a great yield we had a long discussion about at&t same problem what is your yield >> it's high >> for the kwryield, and ask foa 10-year chart, i don't have the heart to bring it up, han, it was -- >> i want to know -- you look at what happened with t-mobile, the success at t-mobile and you look at where you are and at&t is, and stack it up and tell us your take on it >> i wouldn't compare us we are very different from an asset point of view. one year ago since we got the c

brand, and as we pointed out, we are gaining new broadband customers and getting consumers taking on wireless plans and get more steppups. we only deployed 60 markets up over 400, and for us that's an important piece of a recipe right now that we are yielding on our c-band. we feel good about that, and definitely we produce more cash floo flow in the industry ultimately we think cash flow is important, and profitability >> hans, you mentioned in the past, and you talked about it, too, the promotional incentives. you talked about how that is not something sustainable in the industry do you think your competitors feel the same way? all the industries, it's like you are only as smart as your

dumbest competitor >> well, the promotion that has been out for over a year is very high we do much less of that. we come in the market where it's a good timing and then we do a segment and see which segment do we feel has a valuable proposition. it's about getting it right for the customers and that's adding to the bottom line we have been much better segmenting the market, and we are all the way from the prepaid to our highest post paid plans >> the idea of by passing cable. how big -- how big of a business do you think that will be long-term for all of the players? >> it's an extremely important business for us. we added almost 400,000 fixed wire customers on the business side and on the consumer side.

>> is that 5% or 10% of your business >> no, 1.2 million subscribers, and we wanted to reach 4 to 5 million in 2024, 2025. the network is and the capacity is there. >> total broadbands in the country would be what? >> i don't know. >> 100 million homes >> more than 100 million homes there's 130 million homes. >> okay. how many of those do you think will have a fixed line -- >> i don't know i want to take market share on the broadband side it's one of the best growing products we have and built on

the 5g this is a clear business case for 5g >> you timely got somebody else running the verizon consumer group. >> thank you >> sun path? >> yeah. >> so what happens now >> i was running it for a while and ultimately i decided the long-term being in wireless and many other areas, we have seen full execution that's really good we have the business group, and then the new cpo a lot of changes but all of the guys have more than 100 years experience for verizon >> thank you for coming in today. >> thank you >> nice to see you coming up, another big interview with the cfo of

general motors, and enth pepsi's cfo, hugh johnston

we moved out of the city so our little sophie could appreciate nature. but then he got us t-mobile home internet. i was just trying to improve our signal, so some of the trees had to go. i might've taken it a step too far. (chainsaw revs) (tree crashes) (chainsaw continues) (daughter screams) let's pretend for a second that you didn't let down your entire family. what would that reality look like?

well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? what, we have a ton of mulch. welcome back to "squawk box. general motors beating the top and bottom line in the first

quarter, shares moving higher this morning lots to discuss with the cfo joining us live from the gm headquarters let's start off with the q1 results. you raise your guidance for the full year in terms of how much you expect to earn between 11 and $13 billion. you are pleased with where you are right now, correct >> good morning, phil. let me start by saying it's a great day and great quarter for the team at gm they executed well when we look at the results of the quarter, we saw continued strong pricing, great inventory management and demand for our products, and also got a lot of traction -- starting to get a lot of traction on the cost line with our new $2 billion program. >> there has been a lot of hand wringing about pricing i know you are down a little

compared to q1 of last year. but you have an average price of $50,000 for every vehicle you are selling. >> we have been planning what we think is fairly conservatively from the beginning, and i think that's part of the reason why the first quarter exceeded our expectations we are still lapping a lot of last year's wholesale price increases that we had to put through for a higher logistics cost and et cetera the consumers remain strong. when we look at the new launches we have this year, coupled with the high quality vehicles we have, and customers are demanding that the new heavy-duty launches, 52% of chevy silverado, and the denali customers are opting for

a trim level package that we did not have a year ago that we created because of customer demand >> we see the leader in electric vehicles, tesla, cutting its prices and putting pressure on ev prices across the board not only in north america but around the world. what are you expecting for ev prices you have the new equinox and the chevy blazer along with what you already have what are you expecting in pricing? >> our ev portfolio is ramping up we expect to produce 50,000 evs in the first half and when you look at a lot of the pricing noise, we remained consistent across the board we have a pricing strategy that customers respond to, and you

can tell that through the order books and hand razors we have seen for each of the models going forward. we maintained consistency about that and i think we have a good pricing strategy we have to make sure we execute around our margins, and that's part of why we have taken aggressives on the cost reduction program, and that's to help keep the margins in play so we can be competitive across the board. >> what is going on in china we see the price wars happening there and the chinese auto brands are becoming more aggressive and particularly more challenging for foreign brands selling over there like general motors, and what do you see in the general market as well as pricing for the electric vehicles >> china was challenging this quarter, as you said, recovering from the covid shutdowns, and we

have new models coming across buick, cadillac and chevrolet in china. we feel good about that. the team has executed well in a challenging market and maintaining profitability while they go through this we think it will be in the second half before we see material improvement across the board. really proud of the team there we have a competitive suite of products and feel good about our hand >> quickly paul, we have to move to a different interview what is your game plan for the rest of the year are you planning for a possible recession here in the u.s. >> so what we have done, phil, we are planning for about 15 million units industry this year and we came in a little above that, and that would come with assumed incentive increases, and pricing reductions, and we have built that in.

our execution through this has really been strong in the first quarter, and we feel confident about getting through the year just let me close by saying a little bird told me it was your birthday, so i don't want to leave without saying happy birthday >> thank you, paul the most important news of the day and now i can go downstairs and have a doughnut. thank you very much for joining us andrew, i will send it back to you. >> you are making me jealous enjoy the doughnut, because you know i love a doughnut coming up, pepsico cfo, hugh johnston joining us next we're coming right back. taylormade, titleist and ping. tour balls from your favorite brands. and the most dapper styles from travismathew and walter hagen to calia and lady hagen.

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welcome back to "squawk box. pepsico reported earnings of -- well, we could go through the whole list, but the good news pepsico raised prices of its soda to impact the inflation that helped revenue, and the

stock is up 1.68 right now for more on how the consumer is fairing, i want to bring in the vice president and chief officer of pepsico, hugh johnston. these are good numbers we were talking about the winners and losers during the quarter and you happened to be a winner what is happening here and can you hold margin in this environment? >> good to be with you, guys we are pleased with the growth snacks grew 16%, and beverages grew 12. north america grew 15 and international grew 15. our price increases were about inline with the inflation we

faced. gross margins were up 50 basis points, and that was through leveraging automation. the investments we have made in the business put us in a position where the consumer enjoys and wants our products. >> play this out for the rest of the year in terms of what your exspbg expectation is for inflation and how you have set up against it >> as we talked about in the past, we forward buy on our commodities, and i expect we will see some sort of moderation in the inflation levels. we set the price nine months ago, so we will see inflation reduce it will still be up but less than what it is now, and it will be up at a high level through the course of the year we have taken pricing to be somewhat consistent with that inflation over the course of the year as well >> what are you thinking about

u.s. versus europe right now versus asia? >> pretty broad-based everywhere obviously the uk is facing challenges given the high rate of inflation they are facing europe benefited, clearly. the consumer benefited from a bit of a mild winter, so holding up better than we expected the u.s. consumer in our cat g categories are holding up well from our perspective, the consumer tends to be fine. they may be moving a bit more towards valued channels and that's at the margins and not a dramatic change. >> are you doing anything regionally as a result of that >> we are in all of those channels and our margins are consistent across those channels so i wouldn't say there's anything dramatic we are doing

we may see trade down from the 2 liters in beverages, but this is all at the margins >> i am looking at the brands behind you today they always shift it feels like. how is the new drink working for you, like a sprite >> yeah, it's doing incredibly well it's doing better than our expectations you are allowed to say sprite in front of me, as long as you say we're doing better >> how are you measuring that? >> just the size of the business it could be a multi-100 business it's sharp

>> why is that particular, the lemon-lime drink been such a hard one to crack for so long, and i am thinking about slice -- there has been so many efforts at this, to be honest with you, have been a challenge? >> yeah, it's a great question i join pepsico 37 years ago, so i have been through four rounds of different lemon-limes that we have launched, including teen, if you remember that years ago we need to basically come up with a great product, which we have in story. i think the name starry is a great name, and it's aspirational and all that. we will put a lot of push on it as well. i think we have a winner this time and will do well with this. >> we have sort of smaller

businesses that potentially thinking where you think the economy goes will get in trouble, and they could look like falling knives. do you see acquisitions in this environment given your strength in a business that has grown but may not get to the promise land? >> we may look at what acquisition opportunities are in front of us, but we have strict financial criteria, and our tendency has been to look at everything and buy little. we have done a couple acquisitions my expectation is no change on that we will look at everything and we may do one or two things that are relatively small in the realm of things. >> good to see you appreciate it. >> thank you, andrew nice to be with you guys >> thank you still to come, the debt ceiling debate continues

republicans gearing up on a vote for house mccarthy's spending bill then, we will get peter lynch's ken the market, the economy and much more. stay tuned you are watching "squawk box" and this is cnbc 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- i wasn't going to say it. ♪♪

we might be heading to the edge of the debt limit cliff sooner than expected, more like june maybe versus the summer eamon javers joins us. >> nobody knows when it's coming, and that's typical every time we have one of these, and what is happening this year is different. treasury secretary, janet yellen, said june 5th is the possible earliest date, and that was seen as the most pessimistic

scenario the budget office said it could come between july and september. capital gains tax revenues are coming in very light this year in part because tw2022 year was brutal year on wall street, and that was the best of the major indexes, and that represents a lot of capital gains that didn't happen in 2022, and therefore taxes not paid to the treasury on friday, goldman sachs analyst said tax receipts are running below last year and that could move the debt limit from late july to early june, and that puts the pressure on house speaker, kevin mccarthy, who is trying to move his spending bill with the slimmest of majorities.

it probably wont go anywhere in the democratic senate, and that sets up a confrontation with president biden, who republicans said is refusing to negotiate with them. the debt ceiling deadline is getting closer >> republicans are saying he is saying that, too we can go right to the source. >> right >> joining us, two congressmen any relation >> i am the right carter >> i meant lynda carter -- no. i have heard that some -- what some people would refer to as problematic members of the caucus, some of the more conservative members are giving

the nod maybe to what speaker mccarthy is trying to do i don't think he would have trouble with the middle or the moderate republicans is he going to get this done >> oh, yes, we are going to get it done. let me be clear, we are not going to default we are going to pay our bills. we have always done that, and we will get this passed this was one of our campaign promises this is something we campaigned on yes, this is one of our top priorities is to limit spending and to grow our economy, and to save taxpayers money that's exactly what we are going to do. i believe this bill, which has been put together by some of the brightest minds that we have in our conference, and i believe it's going to pass >> people say at this point -- i will get right to you in a second, but congressman carter, they say president biden is holding a lot of the cards here

and republicans don't have any leverage if this passes, through think that gives speaker mccarthy leverage to bring president biden and more moderate senators to the table for negotiation on this >> absolutely. there have been a number of democrats that expressed concern the president is not negotiating, and all of them have said the president needs to be negotiating i mean, senator biden negotiated, vice president biden negotiated why isn't president biden negotiating? this is practical. it's something that happens all the time we have had debt ceilings before and we have had spending limits and we have had negotiations that benefited democrats before. this is the process that we need to go through.

>> congressman, i don't know how you feel about this. i don't know if it would be the end of the world if we did a little bit of fiscal thinking at this point i know the president is insisting on a clean raise, and if he's not getting that, who would be blamed if we did go through the debt ceiling do you think it will -- would you urge him to negotiate a little on something to send back to the house >> speaker mccarthy is wasting precious time, and the uncertainty about x date is undermining the full faith and credit of the united states, and there are two separate questions being conflated. one is how much does the u.s. government tax and spend of course that's a fierce

debate, and senate democrats are looking forward to conversations about that and does america pay its bills on time? yes, of course we do why we are asking republicans to do likewise now, because that's not a political question, it's a fiduciary one. >> right, but we do have 125% of debt to gdp. we know the pandemic caused us to spend -- for whatever reason, we are $32 trillion, and you can blame the trump administration for the tax cuts, but whatever you want to do there's an issue at this point. >> again again. $32 trillion debt that has been accrued under the republican and democratic administrations, and the clear point here is that that debt belongs to both parties and to the american people more broadly.

we can have fierce debates about how much we tax and spend, as we should we have a whole separate process, it's called appropriations kevin mccarthy is taking hostage our credit it's undermining not just peoples' retirements accounts at home, and it's also undermining our global stature as we compete with the chinese communist party. >> what do you think -- joe manchin is not a far right house member, and debby dingell is not a far right house member, and you heard about some of the democrats congressman carter brought up it would not be the end of the

world if you let both sides come to an agreement where they both felt good about this, or both got some of the things they wanted you would not give away the store if you did that, congressman? >> you keep on conflating two separate issues, though. one is about taxing and spending and we have a process about that >> you are hearing from mccarthy that it's happening right now. >> making it the same thing is holding hostage the full faith and credit of the united states. negotiations happen through an appropriations process about taxing and spending. when you take the full faith and credit of the united states and put a gun to its head and don't have an agenda in return, you rattle markets and americans who are banking on their retirement accounts and you give a gop strategic gold mine to russia

and china. >> would you lose leverage if you did a clean raise and then go back to the wins of whatever the biden administration wants to do at that point? >> absolutely. that's why we don't want to do a clean raise. this is a process by which the only time anybody pays attention to our national debt is when we get up against the debt limit. that's the only time let's keep in mind, now, what is the will of the american people? 54% of americans say they don't want to see the debt limit raised, period the max -- we have maxed out on our credit cards we have to stop the spending washington, d.c. does not have a revenue problem but a spending problem. we have to address the spending problem. now is the time for us to do it. we are not going to default on this this lunacy that we are playing into china's hands, let me tell

you, we are playing into china's hands because of the green new deal policies the democrats have tried to enact, and that's why hr1, helping us grow our economy, that's why that is so important. that's why we have got to have american energy, so we not dependent on china or russia for our energy needs >> back in 2019, i am looking at a cnn report, andhouse speaker nancy pelosi said late tuesday she is seeing progress in her twin budget and debt negotiations with treasury secretary, steven mnuchin. they didn't call it conflating, they called it trying to govern. it was a two-party system. >> what i heard from my friend from georgia is the united states is not going to default on its debts, and that's welcomed news. if he is saying that publicly, then let's just raise the debt

limit then if it's off the table, so markets are not rattles and our global stature is not undermined if republicans are so concerned about our spending and taxing problem, why is it the very first bill that they passed when they took the majority raised our deficit and helped the wealthy and well connected evade their taxes? what i am seeing on the other side of the aisle is a conference locked in conflicts, and speaker kevin mccarthy had to make expensive promises to get that gavel >> what happens if speaker mccarthy's bill is not passed. are you confident it will pass >> yes this is responsible. what my friend from massachusetts is suggesting is we are fiscally irresponsible,

and americans are tired of us printing money in washington, d.c. without having money in the bank they want us to be stewards of the american taxpayers' money, and the democrats just think you spend, spend, spend. we have got to stop. think of all the things we could do if we did not have to pay the interest on the debt of $32 trillion think of all the great things we could do we need to address this. we have to stop this out-of-control spending. i agree, it has been republicans and democrats in the past who have got us to the point where we are at, but this is where we are at, and that's why 54% of all americans say don't raise the debt ceiling and stop this madness. >> we have to end it there congressman carter, billy beer, you were around for that

>> i was around for that >> you are running from that now. congressman, you definitely don't remember that. the president's brother introduced beer, billy beer, it was a big hit. if you have a six pack of that untouched left, it's worth thousands. thank you both for that debate appreciate it. hopefully we will get it done. >> good to be on coming up, we have a ton of companies reporting and dom chu will break down as many as he can. a reminder, you can get bethe st of "squawk box" on "squawkpod. just download that podcast anytime.

this is real time insights janet, good to have you with us. we're talking about a.i., and it's all over the headlines. why is it so important right now? >> this is an incredibly exciting time when we talk about conversational a.i., we can go from text to code. that transformed the speed at which we can help enterprise unlocked value it's going to change absolutely everything, and nobody can afford to sit on the sidelines >> is this a new way of business that is here to stay >> the technology will keep

evolving very quickly, but this is not a fad we are working with our clients to help them challenge absolutely every aspect of the business, from sales to marketing to e-commerce to supply chain and packaging everything has an opportunity to evolve with the value of a.i >> what is it that companies really need to keep top of mind? >> they need to keep top of mind that data can help them find their customers more effectively and tell stories better and grow revenue better and optimize decisions. >> janet, thank you for sharing your insights. >> thank you coming up, the names on the move ahead of the open

first, coin base is suing the sec on whether the crypto industry will be regulated it's being regulated under laws not applicable to its business johnson & johnson will price shares of its spinoff at 20 to $23 a share in an ipo expected later this year. president biden announcing his bid for re-election, and that comes in the form of a video posted in the last hour. in it the president frames the 2024 election as the battle of the soul for america "squawk box" will be right back. you need more than technology. you need cdw who can help transform your organization with built for performance lenovo thinkpads. pre-configured for management flexibility and equipped with the intel evo platform. responsive collaboration tools

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an appeals court mostly siding with apple over its app stores rules in a lawsuit with epic games apple kicked epic out of its app store after it introduced its own payment system into the "fortnite" game that broke apple's rules. the appeals court affirmed the decision it also found that apple did not violate antitrust laws one claim that apple did lose was not overturned by the appeals court, and it could be a key one. it forced apple to allow developers to place links inside their apps, so users could make purchases outside the app store,

and that would apple's cut of revenue if customers used the links instead of making app purchases. apple said it was considering further action, which could include an appeal all the way to the supreme court. >> that's interesting. i didn't rea it that they lost. >> no, but an important part is that the store, it means you can't side load apps on to the phone. the only component part that's still open for debate is the payment piece of it. and you can -- basically they're saying, you can use the apple payment program or you can use your credit card separately, but you've got to go through other processes. >> you have to click a link to go out from it apple doesn't -- >> and apple now does that >> but they don't break down the services component that deeply so you know how much is coming from each one of these lines there's a lot of speculation from some of these things, that you can't see exactly how much each of these things adds up to in the earnings, i believe >> on the service piece, the total services piece but i think at this point, it's

such a win, because you'll have to go through so many hoops to pay, that i think the idea that it's going to reduce their earnings is dmine minimis. >> let's get a look at dom chu with this morning's pre-market movers >> it's the busiest morning of earnings season so far so we're going to try to fire through some of the early headlines. we'll start with general motors, which is higher by roughly 3%. the automaker reporting profit and revenue that topped estimates. in a key cash flow metric. gm was helpful by higher demand for higher-end vehicles for more effective cost-cutting measures. those shares up 3% mcdonald's stock higher around a percent or so at this point, after the fast food restaurant giant reported better than expected profits and revenues. traffic rose for a third straight quarter sales growth at established restaurant locations also both grew domestically and internationally. those shares up about three quarters of 1%

u.p.s. shares are moving in the opposite direction down by nearly 5% at this point in early action, after the shipping and logistics giant missed both profit and revenue estimates, and updated its forecast to the lower end of its previous range u.p.s. said the global volume environment deteriorated in the first quarter due to challenging macro economic conditions. so u.p.s. shares down 4.5% jetblue's stock is higher after the budget-friendly airplane reported a profit and revenue beat and gave a more robust current quarter and full-year forecast jetblue says it sees demand trends remaining robust into this current quarter, 2 plus percent gains there. raytheon technology stock is up nearly 2%, after they beat profit and revenue estimates it also reaffirmed full-year guidance, helped along by a record order backlog and growing airline and aerospace and defense demand it also has raised its quarterly dividend payment there's some bullishness there and lastly, as i'm losing my voice. spotify, that stock is up 3.5%

right now. the streaming audio company missed revenue forecasts, but reported 515 million active monthly users, topping that half billion mark metric for the first time ever. the number of premium paying subscribers came in at 210 million, which was also better than forecast. so spotify shares gaining a little bit of momentum, becky, on that, and that's only like half the earnings right now. >> you're losing your voice and you didn't make it through all of them. we have names like verizon, that's trading a little bit lower after the company came in with earnings that were in line. revenue may be a little bit light. 3m also looks like it's a little higher this morning after dm company came in with news that it's going to be doing additional layoffs on top of maybe making up some ground that was lost originally. so 3m came in with revenue and earnings that were higher than expected i'm going to help you out here >> and pepsico >> and pepsi lots and lots to run through dom, did you just say this is only the busiest morning yet, but more to come this week

>> i think thursday will be the busiest day of the earnings season this is like the app-a-teaser of the overall earnings season. >> we'll take it go get some hot tea. coming up, fidelity vice chairman peter lynch will be joining us for an exclusive interview you do not want to miss the legend, next as we head to a break, the quick check on the futures right now. dow up about 117 points. we're coming right back. f the p! these kids order the lobster mac 'n cheese! what if she wants to play golf? we're going to have to outlaw golf. absolutely no golf in this house! not under my roof! since we started working with empower, all of our financial questions have been answered, so we don't have to worry. so you never- nope. always part of the plan. join 17 million people and take control of your financial future to empower what's next. start today at empower.com

good morning it is one of the busiest days of earnings season. we'll bring you all the pre-market results, including numbers from multiple dow components also, get ready for the megacaps what you need to watch when microsoft and alphabet report tonight. and will we see a rematch at the ballot box next year president biden making it official, announcing he's running for re-election. the final hour of "squawk box" begins right now

good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square in new york, the center of the financial world. and i feel like we're in the center of the financial universe with all of these earnings we're getting snapshots, a three-month look, outlooks for all the major american companies miami joe kernan, along with becky quick and andrew ross sorkin u.s. equity futures, when it's all factored in, what we've seen today, down about 100 points and on the dow treasury yields did drop a little bit. i don't know whether some of the macro economic caters that we're seeing in some of these earnings, whether that makes people think that maybe the fed could maybe not go as far as we thought they had to go, because there are some dow, for example, lower sales for the year 3m, for example, lower sales it's not a great operating environment. there are some signs of

slowdown hopefully it's not -- if inflation can -- stays tough and we also go into a slowdown, that's what we hate. stagflation. >> and what you have to worry about if we stay in a downturn are the companies that have done really well. you think about a company like procter & gamble, can you continue with that if the economic outlook gets worse as we go through the year >> yeah. >> a very big morning for corporate earnings, as joe mentioned. let's get you caught up on some of the specific numbers. verizon matching first quarter profit estimates at $1.20 a share, although revenue did slightly miss forecast we spoke last hour with verizon's ceo, hans vestberg >> i think the more important process is the service revenue, because that's what's really creating our margin and the flowthrough and the cash flow that we had. the good cash flow we had in the quarter. >> verizon, the dow component, looked like it was down by about 20 cents next up is dow component 3m. the company beating earnings and

revenue expectations, although it said that it would cut 6,000 more jobs globally you add that up with the manufacturing jobs that it had announced earlier in january, about 2,500 jobs that's 10% of their global workforce. as a result, you seewall stree cheering that. i guess they were looking at efficiencies, up by about 1.6% general electric also beating on the top and the bottom line. ge was cash flow positive in the first quarter. that's the first time that's happened since 2015 and that stock is up by more than 1.8%. and pepsico posting better that expected profit and revenue and raising its annual forecast on both fronts. here's the cfo, hugh johnston, last hour. >> we had 14% revenue growth, snagged some beverages, north america grew 14, international grew 15. so pleased with that >> lots more earnings to cover and we will bring those to you throughout the hour. >> for now, let's move to the

broader markets and check in with our senior markets comme commentator. he still looks good. >> as a matter of fact, yesterday was the fourth session in the last five when the s&p's net movement was less than 0.1% of 1%. it shows you the one-year chart is really emphasizing how much of a trading range, a broad trading range we've been in for that period, going back to last may. 4200 on the upper end, 3,200 on the lower end. we're still benefiting from that general uptrend since october, but people are also going to say it looks like almost a hard ceiling until further notice and also narrowing you into that range right now. also some defensive rotation

within the s&p 500 as some of the cyclical sectors disappointing in that stock, kind of emphasizing that move. a lot of discussion on how to the year-to-datebasis, how it' really just a handful of megacap stocks that have accounted for all the net gains in the s&p 500. that's sort of true. and most,ly, that was about a period in march right after svb did collapsed. this chose you over three years, equal-weighted growth of 3,000 extremely broad democratic measure of the stock market is still outperforming. and you can see it's kind of closer to its all-time high than the s&p 500. so you've had an ebb and flow of kind of a broad market going to a narrow market overtime to me, it's not decisive, it's just a handful of stocks that are working, that's a short-term gauge more than anything a couple of bellwether groups that have still distinguished, home builders, consternation of a lot of folks, we've seen the ten-year yields settle down a

little bit that's been helping structural supply issues in housing seems to be benefiting there semiconductors, you know, they've backed off a little bit here, but still well outperforming the s&p 500. but aside from that, the old economy, cyclicals, have struggled a little bit the market is no longer overbought the way it was a few weeks ago. it has kind of settled into this mode of sideways for now we'll see if the big cap earnings can jar us out of that, joe. >> we've worked off some of the overbought, huh? >> by basically going sideways and the passage of time. we have done that. i don't think that we've necessarily kind of pulled the slingshot back very far to where we're stretched to the downside and going to rebound automatically, but that is a little bit of a benefit of essentially this going nowhere phase we've been in. >> if we worked off some of the overbought condition and the s&p is still at 4137, that's a lot different than going back down to 3,900 or something.

>> it is it is. >> i think you go down to just a little over 4,000, and i think it would just register as a very routine-looking pullback a lot of the levels clustering in that area say that's pretty benign and even again, below, down to 39.50 or something like that is still no big deal in the grand scheme of thing. >> it makes a big difference, because this is neither a replex rally and a continuing bear or building up something, consolidating, and then maybe for another leg higher i wish you'd tell me instead of just saying, it could be either. it's one of the better debates out there. i think, you know, you have to -- you want to work off the assumption it would take something pretty nasty to get us back towards the october lows, but it hasn't shown the real buying urgency you would really see. earnings estimates still going down, at least for the first half of this year. that's something we'll have to absorb >> okay, mike, thanks. in the meantime, we are now joined by a very special guest we call him a legend, legendary

investor peter lynch is with us from boston this morning to share his perspective on the economy markets and the work he's doing for the catholic schools foundation peter is the vice chairman of fidelity research and advisory member of fidelity funds from 1987 to 1990 he managed the magellan if you wanted growing it to $19 million at the time of his retirement buy what you know. it's so nicer to see you this morning, peter >> good to be here >> let's talk about buy what you know i'm so curious these days what you're thinking about the kmif >> i think people that invest in individual stocks, they're sad, when they buy a refrigerator or airplane, they trip over the money and the stock on the bus, and put $5 to $10,000 on it. they have no idea what they do we have to be careful. look at the company, look at the balance sheet. what is the reason the stock

should be higher the sucker is going up is not a good reason. >> is your sense, though, that the style of investing that you pioneer is still doable and winnable today >> el, i think looking for something different, looking for something that's a good story. i mean, who would have guessed tjx would have gone up 50 fold, or stop and shop would have gone up tenfold or analog devices or nvidia. you have to find a company that's a turnaround or a company that's going grow like panera or family dollar stores i'm not saying that's now, but that's what -- sears has rolled o over, you know, ibm has slow down but we've had newcomers come on. that's the nature. you have to be looking for new companies. and look at the balance sheet. if you think add five and five and get reasonably close to ten, with you should be able to look at the balance sheet and a,

they've gone from 50 to 3. one's got 3 million debt, no cash which one are you going to buy and not too hard to do >> peter, i watched you closely, i was in the business back then, do you remember how many "snl"s went from there. i don't know if you missed any of those they're all big winners. they're all big winners back then what do you think of the financial sector right now and what happened, we saw with first republic, and i would like to get your insight, since you were so good at that sector >> we had a terrible crisis in '99 and '01. almost every bank in the country, in '08, '09, the banks raised no dark loans and second

mortgages and home improvement loans and people buying boats with it. now banks are being much more careful. we're going through other crisises some banks would go under. 400 went under after '08, '09. now we have stress tests i think the banking system has improved there'll be some companies go under. that's the nature of it. imagine 1980/'81, double-digit inflation, skand people were worried the japanese were going to take over the world we were hopeless there's always something to worry about. in my 50 years of doing this, i think i would be worry if somebody didn't bring up something to worry about that's the nature of business. >> i was joking, because i'm a reagan guy i was there. i started it at maryland in 1981 i remember what happened i remember my feeling in 1981. and i remember my feelings, how i felt by 1985 and you had a tailwind i had tailwind because of what we did we're not going to do that again. we're not going to cut taxes

we're not going to stimulate the private sector we're kind of headed the other way. did you have a tail wind will we ever have a tail wind again with this generation >> well, we've had 13 recessions since world war ii and 13 recoveries if this is a recession, it's probably the most predictable ones ever. i never knew when i was going to go -- i would love to know the future i would be a better investor i would pay $5 extra for next year's "wall street journal. it would really help i cannot predict the future. but this one, this recession is so expected, so predicted, maybe it's coming, i don't know. >> i have a question about story stocks and buying what you know. i remember reading about, i had an interview with you, and you were talking about being able to walk through a mall and see the merchandise and touch it and feel it, and now we live in this

digital universe and how difficult it may be to walk through the store and see it and feel it in the same way. this is especially true of crypto and other things that are almost a distraction and how you think about investing in those things today. warren buffett for a long time stayed away from technology in part because i think he felt that it was an distraction. >> but he bought apple how dumb was i my daughters bought an ipod for $250, and they had to make a $200 profit on that, and making only $50 on their computers. in the doing very well they had a nice spleet and i never -- i should have done some work on apple. the ipod and the iphone. here's a great story look at analog devices, teradyne, t.j. maxx, you can see these companies coming,

wingstop wow. i tried those wings, they're out there. look for a company that will do well in the next few years, five years. look at their balance sheet, or look at the turnaround when companies go from crappy to semi-crappy, they go up. when business gets terrific, get out. >> peter, ron barron, another investor is a huge fan of yours. he wrote me to say, he's passing on the spotify conference call right now because he wanted to watch you. and he also said he spoke with you recently about spacex. i know that ron is an investor in spacex. is this one of those companies you're talking about and what did you think about the explosion of the rocket last week >> i'm definitely an investor. i own stocks this minute i'm going to research stocks this afternoon i'll research it tomorrow. it's very entertaining it's very enjoyable. but you have to do some homework and you have to look at companies that other people aren't looking at. look at companies that are depressed and make sure, my

great experience with the tech industry, there's a great expression in the tech industry, it's always darkest before it's pitch black. wait until things get better some signs of things getting better, you have an edge you might be in that industry where things are starting to improve. there's a lot of positive coming along. the price of oil has gone for over $100. it's now 80, one year out, natural gas has gone from $8 to 2 230. we've added over 6 million jobs in '21, '22. a lot of people, the bottom part of the economy have had different raises minimum wage up to '22 these people deserve it. so i think, you know, there's a lot of positive, a lot of negatives. i don't know what the market will do in the next year if you need the money. if you're buying a house, you're not a good investor. one or two years, you can flip a

coin 10% since world war ii >> is space x a company you're invested in? >> bates -- >> spacex with elon musk i'm sorry, i may not be speaking clearly. spacex, the elon musk company? >> i can't comment on what i own, but i tend to own small cap companies. >> peter -- >> i couldn't pronounce nvidia nvidia's been a huge stock >> a lot of folks do own and some have made a lot of money on bitcoin. what do you think? >> i mean, i can't pronounce crypto you know that's to me, i can spell it, i definitely can pronounce it. >> you haven't -- >> that's not your thing you haven't done any homework on it you know how it works, you understand blockchain. read any >> i do understand blockchain and i know how it works, absolutely >> you do?

>> yeah. there's a halving company. >> but you don't own anyway? >> i don't own bitcoin or ether coin or joe's coin or becky's coin or any coin >> but i'll tell you something you're doing that's very cool, which is you're trying to raise some money for the catholic school foundation. tell us about what you're doing. >> well, for 13 years -- you're nice to comment on that, but for 33 years i've been running money for the catholic schools in boston 11,000 children, 70% of color, over 75% are single-parent families these are people working two jobs or one job, and still on slightly above poverty line. unfortunately, our schools aren't free. so we give scholarships to these needy kids they have a 2% dropout rate. and we're trying to raise more money to keep these children in

school our schools have done a great job for 150 years helping immigrants these are great families but unfortunately, you know, we need help. so we helped 4,000 children last year it's a great cause thank you. >> peter, we want to thank you for joining us this morning. come on back >> are you still a screaming eagle, peter do you talk wharton or boston college? what do you remember more fondly every screaming eagle i knew was a fanatic. >> i went to a great public school my father took sick when i was 7, dad was 10. my oldest brother's intel intellectually challenged so i grew up in newton we gave over $5 million to the boston public schools. lots of programs to help public schools. the most important thing, 90% of your brain is developed by age 6. we've really got to help young

children get a positive start. that's the key to a successful life >> excellent point peter, thank you we appreciate it >> thank you terrific when we come back, investors getting set for the first megacap earnings those come after the bell tonight. we'll talk about some key metrics to watch ayunst ted, you're watching "squawk box" from cnbc and we're live from the nasdaq market site in times square.

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two highly anticipated earnings reports due after the bell alphabet and microsoft both are outperforming the s&p 500 this year. joining us for what investors can expect this evening is dan flack, research analyst. i figured that we would have a better feel for exactly what we're looking for this time, because we've seen so many companies report but i don't really know if we do, dan. will these be pleasantly received or will there be signs of weakness in these two >> good morning, joe

i think there'll be cross-currents for both of these companies. there are cyclical headwinds facing all companies, including microsoft and alphabet but if we step back and think about what's going on, these companies, and to look at google to start search is durable. we'll see more and more artificial intelligence infused into the platform. i think youtube has attractive growth prospects over the next several years, and the cloud platform for google is really just getting going and i think that's a very attractive platform that we'll see more from turning to microsoft, the company's positioned very well they cannot escape some of the cyclical challenges. but their azure cloud platform remains healthy and i think we'll see continued growth there. most importantly, i think the market wants to see visibility on an improvement in growth later this year and into next year and that can help these stocks outperform from here >> how are they, the valuations?

are earnings and cyclical headwinds are one thing, but are they fully valued at this point, given where the fed is and where the fed -- we always talk about multiples with tech. >> i think both of these companies generate significant free cash flow and i expect that free cash flow generation to remain very strong over the next 2 to 3 years interest rates have risen, and that certainly has impacted demand in areas. but i think from a historical perspective, interest rates are still at reasonable levels i think what's going to matter most for these two companies is their ability to innovate, to execute on their product cycles, really to empower everybody that participates on their platforms. those are the foundational elements to driving growth and ultimately, free cash flow generation, which can help drive stock price outperformance as we think about the next one-to-two years. >> is ai like the beginning of

the internet, when i remember people on a morning show, they didn't even know how to characterize what it was social media, remember the slow start, we had my space, whatever it was is that what ai is now, dan? and who would benefit more, microsoft or alphabet? >> artificial intelligence, joe, is at the relatively early stages and what we're seeing is there's an explosion in compute capacity and really horsepower that can be used to tackle problems, think about things like drug discovery, fraud detection, studying climate change. so this isn't as likely to be an exceptional area of growth, certainly for microsoft and alphabet i would say they are the leader there. microsoft with their productivity suite, office is one example. i expect them to be a leader there. but i think the bigger story

here is that these companies, a company like nvidia from a silicon perspective, they are going to help others really infuse these capabilities across a lot of different markets we touched on health care, automobiles, really the entire industrial landscape i think can get transformed over the next several years. so we see a lot of very interesting growth possibilities helped by artificial intelligence >> okay, so what stock is going to do better after the report? >> i'll say google will do better, joe, but i think both are attractive at current levels >> okay, dan flaks, thank you. okay, coming up, a deep dive into this morning's earnings report we have so, from mcdonald's, one of the biggest consumer bellwethers of the season. and reminder, you can get the best of "squawk box," our daily podcast, follow squawk pod on

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president biden announcing his bid for re-election next

year >> personal freedom is fundamental to who we are as americans. there's nothing more important, nothing more sacred. that's been the work of my first time, fight for our democracy. >> in the ad, biden asked voters to give him more time to finish the jobs, in his words, that he began after defeating president trump in the last election today is exactly four years since biden announced that he was running in the 2020 race >> meantime, former jpmorgan chase executive jess daly calling on a u.s. judge to throw out the banks' lawsuit against him. accusing jpmorgan of using it as a scapegoat for its own failures for working with convicted sex offender jeffrey epstein who was a client of the bank until 2018. eamon javers joins us with more details on that. >> good morning again. former jpmorgan executive jeff

staley firing a blistering response dropping after midnight jpmorgan alleges that any blame for the bank with convicted sex trafficker jeffrey epstein lies with staley, who had a close relationship with epstein, but staley says that's just wrong and plenty of people knew about epstein. staley filed a motion to dismiss jpmorgan's suit calling it a sloppily written shotgun filing. in his court papers, staley says this, awareness of epstein's criminal conduct reached the bank's highest levels, including ceo jamie dimon and the ceo of private banking, marmarierdoes o nevertheless advocated to keep him as a client. now, staley argues jpmorgan failed to provide details to

back up its allegation that he regularly vouched for epstein's character, or made misrepresentations when protecting epstein from scrutiny inside the bank. and finally, staley says that jpmorgan is just trying to shift blame to him as it tangles with an uncertain legal situation but he writes, what is sthcerta is that the bank cannot treat mr. staley as his public relations shield andrew, the next shoe to drop in the case is going to be the deposition of jamie dimon by lawyers who are suing jpmorgan that high-stakes meeting we expect some time in may. back over to you >> how much money do you think is at stake at this point? >> that's a really good question what staley is alleges here is that jpmorgan is failing to say there were any damages to jpmorgan at all. staley is saying there's no money at stake the question is whether the u.s. virgin islands and jane doe, who are suing jpmorgan will be able to back up their case.

and if that's the case, it's really, you know, anyone's guess as to how much money is at stake here >> eamon javers, thank you >> you bet when we come back, some top stocks on the move ahead of the opening bell it is one of the busiest days of the season for earnings. as we head to a break right now, take a look at shares of first republic bank, which was swept up in the regional banking crisis last month after the collapse of silicon valley bank. in the first quarter, first republic saw its deposits fall by nearly 41%. that was a steeper decline than wall street had been expecting that stock this moinrng, down another 21%. year-to-date, the stock is down almost 90% stay tuned you're watching "squawk box" and this is cnbc

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biggest names that have been reporting today, last night, all this week, he's going to be at it dom, what are you watching what's in focus? >> with that handful of earnings report augments what you're talking about this morning, those headlines do include we'll start with general motors, which is higher by premarket, maybe call it around 2.5%. the automaker reporting better than expected profits and revenues it also raised its full-year guidance earlier this past hour, paul jacobson spoke about the state of the consumer. >> the consumer has remained strong and when you look at new vehicle launch as we have this year, coupled with the high-quality vehicles that we have, customers are demanding that so we see consumers responding well to the vehicles we're producing. >> that's the gm side. another interesting macro economic story is coming out of shipping, logistics giant ups, which is down 4.5% over 75,000 shares of volume it missed both profit and

revenue estimates and its outlook fell to the lower end of its previous stated range. u.p.s. did note that the global volume requirements deteriorated over the first quarter due to challenging macro conditions and changing consumer behaviors. those shares in focus as well. also, raytheon technologies, that stock is up nearly 2%, around 10,000 shares of volume the aerospace and defense company beat profit and company estimates and reaffirmed full-year guidance, helped by a record order backlog and growing airline demand it raised its quarterly dividend and speaking of those airlines, jetblue stock is higher by over 2% the budget-friendly airline reported a profit and revenue beat and gave a more upbeat robust current quarter and full-year forecast jetblue says it sees demand trends remaining robust this current quarter. back over to you >> dom, thanks one week away from the start of the next federal reserve meeting. man, time flies. days like today with big slates

of corporate earnings will give central bank members more to chew on whether they consider whether to raise interest rates again. for more, let's bring in our own steve liesman and rick santelli. where the fed futures now? >> 88% probability of a rate hike coming in may and i think there are a few things left. and but i think powell is going to take what he's been gichk here if you look at the 88% saying it's a quarter point company and you look at the january fed funds futures, so about 70 basis points celebrates where the fed thinks it's going to be and the market thinks it's going to be but what's in front of us is you have the claims tomorrow and you also have that banking data.

and i know the fed is watching that banking data very carefully. i've got a chart to kind of chew over here. and that's the last outstanding number here, joe look at the deposit year over year change. we've never seen anything like this and if you look a the loan data, it's a little bit lower, but not a whole lot lower. some of that may be because of inflation makes loans bigger in general. but the negative number, that's the one thing that could stay the fed's hand i have not heard a lot of folks saying what's happening now in the banking situation trumps what's happening now in the inflation situation. >> all right >> you know, i'm not sure that the banking crisis should really change much of what's in front of the federal reserve they reached the level that in many people's upon, including my

own, it will make a difference it will put pressure on all the various aspects of the economy that are going to pressure prices lower above and beyond the banking issue, and many don't suspect they're going away think about all the lock and reloading corporate america is going to have to do. think real estate, a number of issues, as the paper matures and they have to redo it and it's going to be much more costly much of this overall is coming over between probably the very end of 2024, all the way out to the end of '25 we know what's going on with commercial real estate, but here's a couple of other issues that are going to affect the economy. diesel fuel. what was it, last may, it was about 540. now it's under 275 that's quite important what's that telling us we just saw philly fed nonmanufacturing activity at minus 22.8 that's the biggest negative mo month-over-month charge since 2020 we have a chart, tens minus

bunds. this is now under 100 basis points think about all of those negative yielding securities that were all throughout europe. now we're getting closer and closer these are all very important and they speak volumes right now, two-year note yields are at the lowest intra-day level since the 14th of april and also right around the 14th of april that's not huge, but whether it was on the 19th or the 17th, most maturities in april reached secondary resistance levels, joe. i think yields not only peaked last fall, but they peaked with respect to where they've been recently i don't suspect that you'll see a ten-year note yield near 4% anytime soon, considering 4.24 is the high-yield close. i think there's a bit of cushion there. and when you look at 403 two-year note and realize that on may 8th, it closed at 507,

these have moved a lot the latter, just going to get worse over time. we know that some of these issues haven't resurfaced. the deposit issues probably are starting to become old news. >> okay. thanks, guys i don't know how closely you watch these earnings steve, what have you seen more evidence of? continuing inflation or a slowdown in the economy with these earnings we're seeing both. i just don't know which is a more powerful force. >> i'm listening to these consumer guys, joe and they sound pretty upbeat i'm not hearing consumer is crashing and that's really the think you want to listen for so i really haven't found much reason of the high-frequency data i look at looks okay. i keep seeing these reports, consumer okay, but cracks emerging and i've seen these cracks emerging stories for like two years now. so, and they haven't -- whatever those cracks are, they haven't

really opened up too much. one thing i would say that unites what rick and i are both looking at, joe, is whatever happens in may here, probably another quarter, i think they're done that's what i think the market is signaling here. and i think that's the strong message that rick is delivering from, you know, the stick a fork in it. that the idea is where the differential happens is, the fed sees itself staying at that high level. the market sees the fed coming down and that's one of my patented air charts >> okay, thanks, rick. thank you, steve we'll see you, guys. thanks shares of mcdonald's are higher this morning after the company beat first quarter profit and revenue estimates with higher menu prices, giving results a boost. same-store sales also beat expectations joining us right now, straight off of the investor call is shaun dunlap good morning >> thanks for having me. >> so let's walk through the

numbers that we heard from them. better than expected on a lot of accounts maybe the comparable store sales on the global basis were the most impressive, up 12.6% versus a gain of just 8.7% that was expected what was the real secret here for mcdonald's >> i think they performed very well on a relative value as consumers are spending more money than they usually do dining out, and as we've seen the gap between the restaurant channel widen, a brand like mcdonald's is proportionally pretty well positioned a secondary factor would be the operational standards, the pay standards they've been rolling out across stores. a little bit of an uptick in satisfaction but really strong comp performance across the board >> the management did give a nod to the challenging operating environment, but they were able to raise prices and not see any impact in terms of people still having demand.

i think they said the traffic was actually up. maybe some of their lower income customers were spending a little less, but coming in more frequently >> that's absolutely right and in the first qourth quarter saw a 5% increase in guest frequency. that may have moderated a little bit in the first quarter but it's great the see it trend positively, if nothing else because if we look across the rest of the industry, we're seeing declining traffic, declining items per check, and that's the type of behavior we see before consumers start to trade out of that restaurant category that's what i expect as we aide into 2023 for operators. >> you're the only sell rating on the street, did they say enough to change your opinions >> i will say that there are two parts to that. the first is accounting, and we use a slightly higher

cost-to-capital. and what that means, the difference between our own sales and profitability forecasts is a little bit more narrow than the difference might be between our own and competitor's price targets. but the second factor is we're fairly cautious as we look at the restaurant macro moving forward through the balance of the year the consumer is feeling a lot of pressure we see very low aggregate savings rates. we've seen consumers spending about 10% higher share of wallet on the restaurant channel than they have over last five years and typically during periods of pressure, periods of downturn, consumers pivot spending that's something that we haven't seen yet necessarily given what we're seeing with check management and guest traffic over the past 9 or 12 months, that's something that we would expect to see over the plans of 2023. and we think that consensus forecasts may contemplate a little bit too rosy of a picture as it pertains to margin recapture this year. >> okay. shawn, thank you so much >> by the way, folks, make sure you can catch an exclusive

interview with the ceo of mcdonald's in the 10:00 a.m. eastern hour of "squawk on the street" this morning, coming up in just a little bit and coming up after this, we're going to talk to jim cramer, get his first take on a busy morning for earnings as we head to a break. a few more of this morning's top business headlines hyundai saying that it's finalized a $5 billion electric vehicle joint venture in germany with a unit of sk innovation and in south korea, is going to be investing 2.5 billi oonver the next four years to produce tv series and movies and other things stay tuned you're watching "squawk" and this is cnbc

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let's get down to the new york stock exchange. jim cramer joins us you've got like 20 earnings to talk about give me the top five in your view forgiving us some type of insight into the world. >> sure. i think to some degree it's first republic versus everyone else mcdonald's is very good, pepsico very good, raytheon very good, ge excellent, dow mixed, verizon not good those are my quick rundown you guys had great interviews today. i wish mary barr would come on a good spokesperson, and phil,

happy birthday that may have been the star this morning. i think gm is doing much better than people realize. i'm obviously pulling for mary barra because i think she's doing a great job and doesn't get the recognition she should. >> the two generals. how long has it been since we talked about the generals? we used to do that all the time. >> as you said, it's the first time in eight years. free cash flow really good, the orders are great i just think even the spinoff will be positive, that renewables are good and will be positive next year this is a story where you remember larry culp, how good he is people thought there's no way the stock could go up this much ahead of the quarter and still go up more and they were wrong yoingt's done. >> jim, i asked steve and rick this, too. are you seeing more indications of a slowdown because of declining sales or more indications of continuing inflation or both in these

companies? >> i've seen continuing inflation which is disappointing. evidence of a slowdown very hard to find other than dow chemical. an acceleration depending on the industry aerospace is obviously doing well no sign that people care that prices have been increased at mcdonald's or pepsico. so if i were the fed, i wouldn't feel great about what i'm seeing, but maybe that's the quarter point that they have to do a lot of these companies, what do you do with grain going up? what do you do with plastic going up, which is what we'll hear with dow today? i don't know if i were the fed, i would say, yeah, we've got to do another quarter. we hope wage inflation comes down and supply chain management is better. only raytheon told me a good story about supply chain, many good stories about how freight has come down, though. >> jim, thanks we'll be tuned in, 7.5 minutes away now less i could do this all day.

>> captain america that's his line. >> is this me? we'll be right back with what you need to watch ahead of the opening bell how do we show strength and stability? (eagle call) a mountain? a tree weathering a storm? (thunder) lions? nope. (lion rumbles) we do it with our people.

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looking at some of the biggest reactions to the reported results today, you can see verizon, 3m, some up, some down joining us with her thoughts, julie beal, portfolio manager and senior research analyst at cane anderson rudd nick and a cnbc contributor julie, i think we can talk about any or all of those, but we don't want to leave first republic behind. you point out it's not really haves and have-nots. it's the have-nots versus jpmorgan they benefited more than others. i wonder how that turns out in terms of the cost of funds and what it means in a macro sense. >> it's hard to look at the top seven banks paying 1.7% for

deposits and not think that number is going to go up that has important implications that ripples through the rest of the company. that's assuming they make loans. there's not a lot of loan demand out there. you have to think on loans they are making that net interest margin is going to compress, maybe not for jpmorgan who has an unbelievable position, but the other thing i worry about is we had 0% interest rates we had that for ten years. it's hard to think there's not going to be some kind of hangover associated with that in terms of the credit quality that's out there that's the thing i'm concerned about, $100 billion walking out the door at first republic is scary, but i worry about what else is out there. >> steve liesman just said the consumer looks pretty good you think it's more nuanced than that, or overall pretty good >> overall it's okay you're starting to see initial signs of that where the high-end consumer is doing fine you hear reports out of amex,

and discover has seen a softening in their consumer. morgan stanley's business showing good strength in their high end bank of america not quite as good you see the consumer weakening in some parts. i think that's your low-end consumer finally struggling under inflation which doesn't have the same fight as the higher end consumer. that's who i'm worried about. >> the fed sees that pretty good, and the fed sees, you know, we haven't had any more blowups, really in the financial sector they're going to -- the market is at 4,100 on the s&p, they think they're in the clear to keep hiking. >> i don't think they're 100% feeling like they're in the clear. i think, yes, rents are starting to soften and that's great but manufacturing is quite strong and employment in manufacturing is also quite strong it's a mixed picture

wage growth continues to be pretty solid i think that's where they're the most concerned it's hard to tell. you can tell any story you want with the data. it's so mixed and pretty unreliable, frankly. i think bears an bulls have everything they need to tell the story that's cohesive. b the fed is worried about calling mission accomplished too soon. >> we've got to go you pointed out the debt ceiling, that's a prime example of the political environment in that debate. it's not going to get any better. >> it's mortifying think of being a ceo trying to negotiate. i have this new girlfriend, i want her to meet my friends. there's tom, spilling his beer all over tand yelling at the waitress it's a mess. >> i remember college. thanks, julie. i like that analogy. >> a good mental image, right? >> it is

>> meanwhile, let's show you where things stand right now, the dow off 85 points after a whole bunch of earnings reports. the nasdaq off 51 points, s&p 500 off about 18 points. we've got a lot more coming up the earnings parade continues. make sure you join us tomorrow we'll hand it over to our got friends on "squawk on the street" which is next. ♪ ♪ good tuesday morning welcome to "squawk on the street." i'm krintd with jim cramer and david faber. got beats from gm, ge, mep circumstance mcdonald's, raytheon it's first republic's results weighing in. the roadmap including ups, mcdonald's crossing the tape mcdonald's ceo will join us in the next