setting the agenda for us today, mark lehman setting his earnings beat we'll break down the winners and losers like u.p.s. this hour. >> two more ceos on earnings the chief executive of pfizer and cleveland cliffs are with us james poterba on diffusing the debt ceiling time bomb. and cvs ceo, with that stock

getting crushed this morning. off the session lows, s&p did hold 4100. interesting look at how the sentiment from last night's first republic deposit flow is sort of offsetting the corporate results we're getting today. those big earnings beats, 60 companies reported results as of this morning and have combined sales of $350 billion, no matter what sector of the economy you look at there was news for the bulls to look at. for consumer, pepsi, mcdonald's. industrials, and halliburton with good results. autos, gm beats and raises, ge health care, henet, and pulte group as well. in all, they beat 77%. only two companies lowered their guidance the question is what that tells us about the state of the market and whether investors were too bearish going into at least today's print. mike santoli is with us to weigh in on that. >> a combination of downgraded

expectations going into this if you look at the industrial outperformers today like ge, 3m, the earnings they beat with today were below what the estimates were supposed to be, let's say, six months ago. that's always a dynamic. i think it's a combination of companies being good at managing expectations and nominal gdp growth has not fallen apart. you have sales growth. actually, sales beats are running above historic levels. and you have everybody focused on cost. i think there's room for companies to make numbers. the thing is on a year-over-year basis we're not talking about gains for 3m sherwin-williams was a beat above last year but the same as two years ago. i think it's the story of, innin in aggregate, there's a flattening out or retreat in earnings the question to me is, does it remain orderly, remain relatively brief over a couple of quarters or not >> you know what we're not talking about, cuts to guidance. >> not much.

>> some reiterating, some raising. pepsi, kimberly clark and some disappointing numbers on guidance but estimates aren't being cut. >> not today and not radically coming into this week you did have more lower guidance than raised guidance. still, it's not everybody. it's not across the board. even in an awful quarter, 50% of companies beat the final estimate we're running well above that right now. i do think it's a question of what you're paying for you've seen the defensive shift in the market that's been very pronounced we've had a stealth pullback that's now showing up as more of a visible pullback in the indexes. to me for the last week, the question s what's the nature of that pullback going to be? is it just going to be one of these standard issue, few percent, if we go down 1% from here, it's absolutely textbook, perfect. we're going back to the early april lows and you can rebound from there or you have to go back to the bottom end of this range

>>. >> liz ann sonders with a great stat about numbers of 1% upside. nine in january, eight in february, 11 in march and one so far this month we flat lined in terms of 1% days >> we've kind of narrowed the index action into this range it's going to come unglued at some point it can't stay that calm. like yesterday when you move less than 0.1% on the s&p. you're going to widen out the scales a little bit. i don't know if that means it's the calm before the storm. it could be, well, this has been going on below the surface has that reset the market enough or is may going to be kind of a tougher one because of what we have right ahead of us >> i also worry about making a call on earnings season before big tech giants, which starts today. >> the story line always changes as you go through earnings season people build in their expectations based on today and we'll see what happens tomorrow. >> good thing we have you every day. mike santoli the breadth of earnings beats

may be wide, the leadership in the market is not. it's the narrowest stock leadership in an up market since the 1990s. year to date the s&p is up 8%. just 28 stocks account for 7% of that gain. six names account for 53% of that performance should that make investors worried? let's bring in mark lehman, a citizen's company. it is narrow leadership in terms of what's fueling this price action what does that say to you? >> well, there's no question, sara, you're right there's definitely been a narrowing of the leadership and a flight to quality and a flight to size. the moves are historic what we saw in some of the biggest tech names through this year and i think it shows more fear and i think a little complacency in terms of investors. let's remember these companies are on the forefront of innovation, particularly in technology, the likes of which

we haven't seen in a long time we're just getting a glimpse for what that means for ai and the chatgpts of the world. i think that will fuel another interest in these stocks and that will widen over time. >> i know you're a big growth high you've always liked the mega cap stocks which is your favorite in terms of positioning and setup into earnings this week >> well, you know, they're not reporting this week but we have liked meta for some time now i think they're getting their cost structure in line it's so quick in terms of pivot towards and away from other things we've seen what they've done with all in on the metaverse frankly, we haven't heard a lot of that lately we married more about their plans with ai and some of the other things s.a.p. is a big cap name we don't hear a lot about you talk about a stealth bull market, we've been recommending that stock -- my colleague has been recommending that stock for quite some time now. they are on a huge growth trajectory they have a great move to the cloud.

they're rationalizing their balance sheet with qualtrex, and they have a cfo that's all about delivering shareholder value it's a few names that -- one we hear about every day and one that has stealthily gone up a great deal we really like those names going forward. >> that's one reason why a lot of the -- at least the macro strategists are saying you have to see what service now and microsoft say this week. there was some discussion, mark, yesterday about cracks in some legacy tech and they pointed to f5, seagate, asml, threw in tesla and some autos i wonder if that's the budding sense that there are some fissures, at least in legacy technology growth? >> carl, that's very fair. i mean, we're about to embark on a technology ramp, i think, frankly, most people are not prepared for and the wibers of which probably have not been written today. there's an old line, one of my

mentors used to say being right and being early is the same thing as being wrong there are some companies that are going to be right here and may be early in that second generation look at facebook, for example, meta we had the myspace and all these before but it took sixth or seventh generation for us to get to facebook. this move in the ai world is so profound that i think the leaders deciding that today is probably a mistake we talk a little about the economy and what that means for inflation and deflation, et cetera it's so -- the ramifications are so vast for our employee force and for the workforce going forward and deflationary aspects are so vast, i don't think we begin to understand where that is if you're not innovating with the times, you're falling behind >> so, how do you think investors should deal with the tradeoff between an environment where productivity and restructuring cost cutting is rewarded to save margins but at the same time in the tech space, everyone is so excited about ai

and companies are boosting spending there >> well, i think investors are placing their bets on big cap now. they're buying the biggest companies assuming baz of their install base, because of their install brands and top line revenue they're going to be winners. to a large extent, that's probably right in the near term as an investment i think you have to pay attention to some of these small caps, have to pay attention to some of the private companies. and, you know, something we haven't talked about, but financing these small cap companies, these venture-backed companies has gone through a sea change, the likes of which we haven't seen with the demise of silicon valley bank. so, it's going to require these big companies to probably be more innovative. maybe that's where investors are putting more bets there because the startup economy is going to go through jostles it hasn't seen in a very long time i think you have to be really aware of what's down the pike and the innovation engine is accelerating lost in all this so will con

va i think that's a great back drop for tech stocks are at a new high relative to where they were six months ago. >> it does make it a little confusing to figure out what the framework is do you want to see investments and innovation if you do, how do you pair it with reductions and operating expense or head count or just reversing the hiring the last two, three years can companies satisfy both of those camps at least in this quarter's prints >> every boardroom is thinking about that every single day. i think the fact is, sure, you have a core business that's thriving and doing well. think about how much innovation has changed in the short term in the last three months. nobody heard of this chatgpt if you weren't in silicon valley. you never heard of it. now that's all you talk about. it's very hard to recreate yourself technologically

think about the companies, the big cap techs of 25 years ago. the only companies who really reinvented themselves were microsoft and apple. when you talk about dell and hp and some of the others of the '90s, intel, think about intel, i mean, what nvidia has done over the last 20 years, amd has a bigger market cap than intel how much could you have bet on that 20 years ago? if you're not figuring that out now, as an investor that's really tough, but having a broad base of growth investments, not picking one stock but picking innovation is real, it's going to change our lives is what investors should be doing. i'm not going to pick the acorns that will be oaks, but that's what's going to happen >> mark, thanks for joining us payments company with results and ainsights into small business and state of the consumer one of the top s&p gainers

the ceo is with us we're watching mcdonald's, another all-time high today, although dipping lower eps comes in 12% above estimates. u.s. traffic grew despite the price hikes and the ceo telling us in the last hour that he thinks inflation is starting to come down. >> last year we faced double digit inflation globally, and even in q1 q1 we are still experiencing double digit inflation our outlook for the balance of the year, o pectt gwe dex itoet more favorable ney managers are pretty much the same, but at fisher investments we're clearly different. (other money manager) different how? you sell high commission investment products, right? (fisher investments) nope. fisher avoids them. (other money manager) well, you must earn commissions on trades. (fisher investments) never at fisher. (other money manager) ok, then you probably sneak in some hidden and layered fees. (fisher investments) no. we structure our fees so we do better when our clients do better. that might be why most of our clients come from other money managers. at fisher investments, we're clearly different.

stocks is under pressure after eps does miss by a penny guidance comes in at the low end of the range frank holland talked to the ceo a few minutes ago and joins us >> i just sat down with a very optimistic, the ceo of u.p.s. right here at u.p.s. headquarters even as the company is having its worst day since 2015 she admitted there was a sharp deof kline in volumes during the quarter but says that has now stabilized in april. the company also pointing to the growth of small and medium sized business customers, which are higher margin as a catalyst for what they believe will be a reacceleration in the second half of the year >> volume in our u.s. business was higher than our plan in january, about on our plan in february, and then considerably lower than our plan in march and as we moved into april, we

saw that same trend continue, so we're like, wow, things have really changed from what we thought it would be. >> today's also the first time publicly that tome has addressed the ongoing negotiations with the teamsters. that union represents about two-thirds of the workforce. she admitted the negotiations have impacted sales and new customer wins, but she believes she and the teamsters are on the same page and they'll have at least a handshake agreement by the time that deal runs out at the end of july. >> so, we are aligned on our north star now, there are issues they have raised they would like to work through and we would like to work through those issues, too we're not far apart on the issues we just need to get to the bargaining table and work it out. so, i'm highly confident that we will deliver a handshake by the time our contract expires the end of july. >> and that handshake agreement she believes will be key to customer confidence. tome will celebrate her third year at u.p.s. as ceo in june, but she said she's focused on

the future, including the use of artificial intelligence in the business, something she calls both scary and exciting. so, again, u.p.s. shares are lower. its rival fedex also trading lower on this report back to you. >> we know you cover both companies, and i wonder how you're characterizing the cadence of any kind of restructuring or revamping between fedex and u.p.s. right now. >> well, you know, when we talked about fedex's restructuring, a lot of people very fairly said they were trying to get more like u.p.s., one person at the top making all the decisions, just one unit both in the air and on the ground delivering all the packages here at u.p.s. it was a very different tone for them it's more about moving to what's going to happen in the future they're focused on using both technology and the assets they currently have to maximize the business they're hoping they're going to have in the future. one thing i didn't get time to mention was the growth of their health care business that's really a focus for this company. it's a higher margin business than e-commerce and something they want to move into. >> i'm curious about the

commentary she gave you about stabilization in april and the optimism, frank, because it's not what investors seem to have gotten from the outlook. she narrowed the revenue range and now expects revenue decline for the quarter. and didn't talk much about improvement in terms of volume are you suggesting maybe the market is taking this too negatively, or she's suggesting? >> well, i think what she's suggesting is there's certainly a better end of the year first off we have the holiday quarter where we ship around our presents for the holiday season, whatever you decide to celebrate. she believes that's going to be a big boost in volumes and right now she says there's a big shift from goods to services that a lot of people on cnbc have noted another thing she believes will be a big tailwind for the business is getting the te teamsters tdeal settled or handshake agreement. she believes if you look at their customers, they have to go to their bosses and say, hey, we want to guarantee the packages can be delivered with this teamsters negotiation

hanging over u.p.s., admittedly, it doesn't give people the same confidence they might have otherwise had in the company because there is the potential for work stoppage, a potential for contentious negotiation that could slow down the network. >> important story one to watch for sure. frank, thank you frank holland watching u.p.s. in atlanta today. meantime, shares of fiserv are higher after a beat across the board in q1. they raised their guidance for the year but signaling they do see the potential for a weaker economy in the second half joining us at post 9 for a closer look in a cnbc exclusive is fiserv ceo frank bisignano. stock is higher for the year, 20% year-to-date gain. knowing how much you work with small and medium size banks, is the guidance reflecting the worst, the banking cries is past >> yes i said earlier this morning, i saw banking turmoil. i saw it in a few institutions, not across the board

we traveled across the country we see banks and they still have great demand for product and balance sheets are in good shape. >> how do you -- how are you thinking about what lending will look like in the back half of the year >> well, i think, you know, a little bit of our comments are we're cautious about the broader macro. but we do see our bank partners definitely very into digital, very into new opportunities to grow their client base, so i think broadly they're still leaning in on opportunity to provide more product to their client >> everyone is excited about the clover performance your business that competes directly with square are you taking share from them it feels like it's kind of a crowded space. what's working there >> the well, i think we -- you know, we started on the clover journey. we bought it in '13. it was a startup we did i think a phenomenal job

out there building it out. square had a head start on us by a couple of years. we have different strategies on the platform our platform is really about bringing more vertical services, value-added services and being able to just grow our base, both outside the u.s. and within the u.s. >> what does that mean, added services >> we are into restaurants, we bought a company called bento box. veer into retail so, to do more than just bring services and point of sale, but give them capability it's an expanding time for us. we continue to penetrate those value-added services we're up to 17% of our clients are buying more than just cloud-based enabled system and payments >> are you sensing a lot of business creation, new

on-boarding, new client? >> yeah, new business formation is still strong. the sbs are heart, they are innovative, come out with new products we like to be on the front end of that. we partner with banks as they on-board clients and we have a lot of banks we bring our products through at this point. >> do you have a view on whether or not interest rates are restrictive, need to come up, need to come down? >> i think interest rates are definitely being felt by the consumer, so i think you can see a hair there i mean, 50% of our revenue is derived in the merchant business from nondiscretionary, petro, grocer, and qsr, i mean, you know, qsr portfolio performed very well. we have a super portfolio there. but i do see a lot of new

business formation because i see clients feeling the interest rate pinch. >> i was going to ask you what you're seeing on consumer discretionary spending versus the nondiscretionary spending. >> well, we're seeing a shift, right, and we're seeing basket sizes shrinking. but a slight bit, right? and, of course, the consumer's benefit, petro prices were a lot higher last year than this year. that somewhat offsets the interest rate challenge they have but we definitely see more nondiscretionary spending than we did before. >> well hopefully we can extend this year-on-year decline, or at least energy and gas we'll see how long that last and the impact on the consumer it's a grade radar to read frank, thank you good to see you. >> my pleasure thank you. cleveland cliff shares under pressure the company posts a loss but remains optimistic as the auto business ramps up.

we'll talk to the ceo straight ahead. pepsico raising its outlook. organic revenue rising more than 14% on the back of very strong pricing. that was up 16%. volume's down 2. stocks up 2.25 we'll be rig bk.htac thinking about the market and want to make the right moves fast... get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades. for smarter trading decisions, get decision tech from fidelity.

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how about the best network imaginable? let's invent that. we don't have time for lag or buffering. who doesn't want internet that helps a.i. do your homework even faster. come again. -sorry, what was that? the next generation 10g network, only from xfinity. close momentarily with a negative tape dominated by big bank earnings and a drop for mining stock something we'll talk about in a few moments with the ceo of cleveland-cliffs ubs is lower with the former reporting a 52% net decline in profit nestle bucking the trend after beating sales estimates in a quarter where it hiked prices nearly 10%

the story abroad this morning is a warning from citigroup noting that the -- in the last three decades, europe has never avoided a contraction following a u.s. recession that if one does come this year, like citi forecasts in the fourth quarter, european stocks could suffer the worse this euro stocks trade has mostly persisted taking a step back today, but it's been a very strong year for european stocks. there's pushback from strategists. also jpmorgan warning about the interest rate increases coming there. >> even some of the microlevel discussion we've heard about, at least uk, coke pointed them out specifically as an area of the world where the cost advantage is not playing out as well as other parts of the world. >> uk having a slower, tougher road on the economy. europe as a whole, demand has held up better and that's what's driven the stock, some of these luxury retailers, nestle,

consumer stocks is they are facing higher interest rates. the point citi made, if the u.s. is having recession, that doesn't bode well for europe. >> we'll see how intertwined we remain. let's get a news update with bertha coombs. here's what's happening at this hour. president biden launching his re-election campaign in a video titled "freedom," for you years to the day when he announced his 2020 campaign. he insists he has more work to do and continues to fight for individual rights and stand up for what he called maga extremists. former fox anchor tucker carlson is already receiving offers following his departure from the network yesterday one notable offer coming from rt, the kremlin's english language news network. carlson's criticism of ukraine and nato have often been highlighted on rt. and singer, actor and activist and humanitarian harry

bell belafonte died. his album "calypso" was on top of the billboard charts for months he appeared in movies as well but may best well be known as an early supporter of the civil rights movement and friend of dr. martin luther king he won a number of lifetime achievement awards from humanitarian and cultural organizations. and i have to say in our house, we would play harry belafonte live at carnegie hall nonstop. i still play it when i'm homesick these days. >> bertha, thank you bertha coombs. ceo of the national bureau of economic research is coming up with us next. we'll get his take on how to solve the impending debt ceiling crisis the organization that formally declares whether we are in recession. also look at shares of first republic, plummeting to an

all-time low after reporting deposits, fell by 41%. more than expected management saying the outflows have stabilized over the past month. however, the street not holding back on its commentary this morning. bank of america saying the company will never return to its former state wells fargo not taking questions on the cal janny going to sell. pretty ugly in terms of the commentary stock's down 28% [office sounds]

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welcome back let's turn our attention to focus to washington. the gop proposal set to hit the house floor this week, raising the borrowing limit by $1.5 trillion but the deadline date might come sooner than we thought. goldman sachs saying we could hit the ceiling by june. our next guest is worried about the future beyond the latest political skirmish as rates are poised to raise above 5% joining us is the man who holds the key to whether we're in recession, which i know you're not going to announce here, jim, but are you getting worried? >> sara, it's great to see you again. you know, i think that -- i don't have a fix or a solution for the near-term issues around the debt ceiling debate.

that's politics for than economics. but i think it is worth recognizing the long-term back drop against which this discussion is taking place and that is just that the u.s. faces a structural deficit in terms of our federal funding as we look out to the decades ahead. these -- it's a complicated calculation to do and it requires some forecasting over very long horizons if you just look at the programs that are on the books today and what those are likely to cost going forward, and the tax revenue sources that we have, it looks as though over two to three decade horizon, we run a sort of 3% of gdp deficit without any obvious, you know, way of getting that to improve and, of course, the dynamics of this is challenging. as you run those deficits for a longer period, you begin to build up more debt to gdp. as that rises you pay more interest and the interest itself contributes to the deficit as

you go forward when you look at the forecast, whether made by the cbo, by the imf, by bill gale at the brookings institution, now back at berkeley, they all suggest that much higher levels of debt to gdp lie in our future as we look out to the 2040s and 2050s. >> that's a problem, what you just painted there it hasn't really been a problem for the u.s., right, as long as we're the reserve currency until it is. are you suggesting we're reaching some sort of tipping point? >> you know, it's really hard, sara, to pin down a tipping point. some people recall over a decade ago there was a lot of discussion if you crossed 90% of debt to gdp, that was going to unleash various things we crossed it and it didn't have those consequences you know, part of the discussion around the burden of the debt, the debt to gdp per se may not be the exact right metric to focus on it may be more important on what

it costs you to service that debt, which focuses on real interest costs as a share of gdp. one thing that's happened in the last two years, of course, is the dramatic change in real interest rates that has pushed up the burden of the debt stock we already have if you look at the history of, say, the ten-year real interest rate estimated by the cleveland fed, we're at a number today that, you know, is on the order of maybe 1.5%. that number was under 1% for most of the decade between 2010 and 2020 but it was close to 2% between -- in the first decade of the century, nearly 3% during the 1990s. depending on where that long-term rate lands,the purd of this debt stock becomes much greater. when the debt to gdp ratio is around 100%, which it is today, that just tells you additional 1% real interest rate increase is costing the federal government another 1% of gdp every year as we have to service

that debt. >> definitely one of the different things that -- different now than in 2011 as people are making a lot of the comparisons and analogs, jim i wonder when we're talking about the computation that led you to a decision about a recession, one of the arguments we get a lot from macro bulls is that it would be uncommon to go into recession with housing being such a positive contributor to growth. and i wonder if that's true. >> you now, as you know, the nber is a backward-looking entity in terms of how we think about the dating of peaks and troughs in the economy we don't attempt to do any forecasting or looking at where we might go. the key question, of course, is whether the iine aggregation, housing, manufacturing, exports adds up at this point to a downturn, which would look like it's deep and had a long duration and was reasonably dispersed across the economy,

because that depth of dispersion are what the nebr looks to. >> can we have a recession with 3.5% unemployment? does that work >> there have been -- there have been periods in the past, if you go back to the 1950s, sara, with very low unemployment rates, there was a downturn in economic activity, yeah >> okay. there's the answer i'm surprised. i thought you were going to say no jim, thank you keep us posted >> sounds good great to see you. >> still to come this morning, the ceo of cleveland-cliffs. we'll dive into the opportunity the auto industry is now presenting for a lot of the miners speaking of the auto sector, gm results today, raising guidance for the full year after it saw revenue jump 11% in the quarter. shares getting punished like a lot of cpoteorra earnings companies are today. down about 3%. stay with us

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boeing is the biggest drag on the dow salesforce, microsoft, american express also dragging on the dow. we're down about 136 points or so umh, and j&j having a good day but not balancing the negativity mostly earnings. we're watching those shares

under pressure auto segment remaining strong and now 36% of steelmaking revenue and the company confident the sector can continue to grow joining us this morning and first on cnbc interview clevela cleveland-cliffs ceo why is the end market getting so much attention >> i don't know. good morning nice to see you again. we can only report on our own thing. we continue to see the market -- the main market for us, particularly automotive, perform extremely well demand continues to be great we are selling more at a higher prices to the automotive market. the consumer continues to buy cars everything looks good in real world, but i just learned that

we can have a recession with low unemployment you learn this stuff every day. >> amazing what you learn as a viewer is the auto end market largely about prices as were inventories constrained or is it more about the transition to evs and how that changes the metalurgy of the automobile >> it's both we are working with our clients, all of them. we are the largest supplier of every single major car manufacturing in the united states by a large margin so, we are supporting all of them in that transition. but let's face it. at this point in time, the demand is also controlled by traditional, conventional vehicles we are the largest of both we are benefiting from both sides. >> what's happening on prices?

i think you've been pretty aggressive raising steel prices. what do you see happening going forward? >> look, we have a tradition in this business, sara, of having common factors imposing prices to suppliers we changed that dynamic here in the united states in the last three years. when we were able to acquire case steel and we became the largest supplier we have a much more mature relationship with these common factors today. they understand we need to produce returns on our investment, otherwise they would not have a supplier going forward. so, this has translated in higher prices and benefiting from the higher prices >> so, where is the disappointment today coming from, lourenco the stock is down about 10%. is it in the loss itself >> well, we beat in revenues, we beat in sales, we beat in ebitda

even though it was a loss. we built the inventories on q1 on higher prices all this cash flow will start coming in in q2. we're anticipating that repayment to the order of more than $1 billion going forward. so, we are in fantastic shape. so, the only answer i can give to you about why prices are -- stock prices are going down today is simple, i don't know. what i do know is in a couple days when the window opens, i will be buying stock myself because the stock is on sale. >> no, it's -- >> that's interesting. >> it's a finicky tape today, lourenco talk about china, both as a growth market globally and then as a supply market and how that's altering the dynamics of your industry right now. >> yeah. we are very happy that china as

a global supplier is no longer the global supplier -- reliable global supplier that it was in the past we are in a pre-war world right now. and in pre-war moment, we can't count on enemies to supply anything to us so, all this reshoring of manufacturing that's happening in the united states is happening for a reason the reason is we are preparing for a time that importing is no longer an option we are at the core of this movement here in the united states as supplier of steel for the key sectors including automotive, appliances, can of foods is very important in times of war that's what you're envisioning in the medium to long term. >> what about the price gap between steel prices in the u.s. and china, is that sustainable >> first of all, there's no gap at this point. we are pretty much in line with

worldwide prices we are not suffering any gap in prices we only have this so-called gap when they dump at this point -- >> he froze. i guess china's not dumping as much is maybe what he was saying. >> great to have him with us lourenco, appreciate it. up next on the show, the impact ai will have on alphabet and microsoft earnings we'll get you ready for both results coming after the bell. that's next on "squawk on the street." dow down 129

welcome back two of the biggest names in ai and the market overall reporting tonight. alphabet and microsoft results obviously the focus of today's "tech check" segment with our steve kovach how do we look for the progress on ai, is it numbers or colors around earnings? >> reporter: mostly color. today, sara, is ai day for earnings season. on the one side you have the perceived leader in ai, microsoft, which has been rapidly pumping out ai features into bing search, teams and other mi crow soft office apps and alphabet which has only experimental versions on the market but promises to include in the search and other things why this matters, jpmorgan analysts had a good note pointing out six of the companies behind generative ai are responsible for the performance of 53% of the s&p

500 and 54% of the nasdaq 100 so far this year. alphabet shares have been especially sensitive to the idea it's behind microsoft on ai. just last week we saw shares fall on that report. samsung considered ditching google as the default search engine on its devices following the bing ai launch it shows fwoog has more to lose, over 90% of the search market share and the lucrative deals like apple and samsung help secure that. the momentum behind bing gives samsung and apple more bargaining power to grab an even bigger slice of google search profits. on the call tonight, though, listen for any hints from sundar pichai slower azure growth will be the story at microsoft not to mention the poor reports of pc sales falling this quarter which will impact the window's

business and for google on the digital ad market, youtube sales, and its own cloud business still behind microsoft's in terms of shares, guys >> i wonder if alphabet will give us assurance they will remain the preferred default >> reporter: that's a big one. google pays in these revenue share agreements, tens of billions of dollars to various web browsers, to samsung, to apple. apple reportedly they pay $20 billion a year and the apple contract in particular is said to be up for negotiation again and so apple kind of has some leverage here, carl. they can say, well, we're looking at this bing thing and get a better deal. >> as far as macro tells, steve, what is the expectation for search revenue we've been talking to consumer ceos, coke, pepsi, mcdonald's, ramping up ad spend. this is the one that's been

sensitive to the macroeconomic weakness >> reporter: it's not just the ad network but when microsoft reports, and google will, too, on their cloud business because that gives you a read into how small businesses are spending i.t., what kind of cuts they're making microsoft loves to say, look, we're cutting deals with our customers, helping them save money now. it might not be great for our bottom line today, but they want to capture those customers, keep cloud customers so they'll have those people locked down >> and then on the microsoft side the ongoing active vision discussion as they are meeting face-to-face with regulators all around the world >> reporter: speaking of regulators, tomorrow the decision from the uk competition markets authority on whether or not it approves the activision deal we'll find out that tomorrow morning. >> steve, it will be a busy 24

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volatility making a buzz on wall street this morning the cboe launching a new one-day volatility index which accounts for options with one to zero day expirations versus the old vix which tracks longer time lines cboe has sent cnbc inphone the past month moving drastically has banking and recession fears have roiled markets the past few weeks. overall, a lot lower it will be interesting fun to track around fed days and get precise with the one-day moves on how people are hedging. >> apparently one month is too long for an index to work. over the weekend, quoting ipo road show managers saying it's not a useful tool right now. >> because everybody is so short term in the meantime, carl, a lot of people are talking about the lower level of volatility in the market is it complacency? we are seeing a sell-off right

now but, again, nothing extreme, and even with first republic, which was in the eye of the storm during the banking crisis and now continues to be so, not the saying the kind of major ripple effect on financials and on the system that we saw in early march, which is a good thing. >> it's more about the longer term story of earnings pressure within the group obviously macro implications regarding credit, the extension of credit, and what that would do to small business lending >> and what will happen with this bank which is down 30%, and there's a lot of concern over treasuries i'm watching getting bought there's a defensive feel, recessionary type positioning although every day it changes. are we going into recession and are we not >> interesting to hear for example, mcdonald's today, we talked to them earlier in the hour about recession and the micro indicators that would lea to you that case, for example, not ordering up, not asking for

that extra -- >> fries with that >> having a preconceived notion of how much you're going to spend on that visit, which is something that's different >> on the other hand, they talked to pepsi. they're defensive but are not seeing a pushback on the higher prices from consumers and recessionary tradedown type behavior it's not a broad brush that's not seeing a lot of guidance being cut >> holding 4100 here let's get to court and "the half." thank you, carl and sara welcome to "the halftime report." i am courtney ragan in for scott wapner investors sift through a big batch of this morning's results and two huge tech titans reporting after the bell our investment committee is standing by. joining me for the hour josh brown, stephanie link and jason snipe. let's get a quick check on markets here just about at session lows the dow jones industrial average down about 0.4%. the nasdaq down more than a percent. the s&p 500 down just