range path, the other parts of their business they can pass on those costs and get a smaller return for the banks are going to have a much harder time doing it >> thank you great to see you today take a quick check on the markets before we hand things over the futures this morning have actually improved even throughout the entire course after the gdp numbers too. weaker than expected, but i guess that means the fed may not be as strong dow up by 167. that does it for us today. join us tomorrow right now, it's time for "squawk on the street. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange futures bouncing a bit, despite a weaker than expected q1 gdp number market seems more interested in the ongoing wave of companies raising guidance today, honeywell, american, mastercard, merck, and meta guiding above last night our road map begins with the economy, though, expanding

slower than expected and this earnings deluge, comcast, caterpillar, big pharma all crossing the tape. plus shares of meta are surging. in fact, they're getting close to a one-year high the company forecasting a resurgence, an acceleration of revenue growth and the ceos of service now and southwest airlines are going to join us this hour we'll be discussing, of course, those companies' quarterly results. let's begin with some suigns of an economic slowdown. the government's initial reading of first quarter gdp coming in at an annualized rate of 1.1%, and expectation fzs of about 1. or 2%. atlanta fed was right "onon the money. >> atlanta has been great. i was surprised because it's not really jiving with the hiring. including today's jobless claims there's just this -- a slowdown, and people still being hired at

higher wages, so if i were the fed, i would say, you know what, we haven't won yet we have to break the cycle of higher wages, because someone is going to say stagflation >> is this going to do that? >> no, i'm saying i think powell has -- there's no justification. >> well, i guess, is there any sign in this slower-than >> expected gdp number that that cycle is starting to erode >> i still have to see i have to see higher wages let me give you my thesis on the higher wages people didn't come back to work. 58 to 62 then, they had to bring in all new people, but we've left out, these were skilled workers if it's a pilot, you have to train them for six or eight months if it's a welder, they have to be trained they didn't have any -- people didn't have, like, hey, i'll fill in. one of the things about a pilot, david, they didn't just grab the person in the first row and say, listen, it's your airplane

so, that's been this period right now where you're not getting any productivity out of people but you're hiring them and i want that. i feel like -- look, i'm fine. we're seeing a lot of manufacturing, tepid we'll hear about that today. but we're seeing still travel, still going places, still wealth, still being hired at higher prices. >> but you don't think this is a sign of a coming recession >> no, no. i think that there's just not enough i mean, just -- carl, look at the numbers today. i know a lot of it's pharma, but it's really only zuckerberg that let people go, and there, even, you could argue, it's 11,000 people from a year ago >> people are looking at aws, some layoffs there tyson, 10% >> well, tyson's done really poorly, and they're very poorly run. >> deutsche bank is cutting another 800. >> another good quarter. remember when they decided to rate it and say it was just like credit suisse. >> and solantis, 33,000.

you don't buy that >> good yield. that was -- should have been better >> you're right, we're not seeing it show up in the national >> no, and you take a look at some of the companies that are -- like in oil they're all still drilling there's some stocks like slb, really had a decent quarter. it just goes down every day. med tech all doing well. pharma used to raise earnings per share by firing people now the only person living bristol myers is the doctor, who, by the way, is terrific reinvented bristol myers, gave it a lot more different franchises and then at his peak, not the peak of the stock, but the peak of how the company's doing, he retires. we got a lot of retirements this quarter. sheffield from pioneer retired i hate to see all those guys -- honeywell. >> i know. and they're young guys >> what's going on >> i don't know. they're all younger than you

i don't know why i'm sorry. i'm sorry. >> i hosted the american brain foundation -- >> that was gratuitous >> i hosted the gala last night, brain foundation i was the youngest there >> there you go. >> meantime, we're watching meta this morning on track, as david said, as this year's top performer on both the s&p and the ndx, company better-than expected quarterly results, first sales increase in a year, with upbeat guidance for q2 revenue this is zuckerberg on the restructuring and the road ahead. >> in may, we're going to carry out our third wave across our business groups, and this has been a difficult process but after this is done, i think we're going to have a much more stable environment for our employees, and then for the rest of the year, i expect us to focus on improving our distributed work model, delivering a.i. tools to improve productivity, and removing unnecessary processes across the company. >> so, they lower the high end

of the operating expense range >> i have to tell you, when you listen to this call, you realize, first of all, why jensen huang said they're good partners ceo of nvidia. this was -- >> why he said what? >> they're good partners >> oh, good partners yeah >> the reason is because engagement that's the word -- everyone wants to focus on the word, efficiency no, it's about engagement, because that brings the advertisers back and it was a way -- they used a.i., frankly, you could be so bold as to say, to get around apple, because you post things, and then they feed you things that you never thought of, which then means you look again. remember, what happened is people were looking at it seven times a day, but they were only posting two times a day. terrible mismatch. he fixed that. everyone was focused on -- i'm hearing about how much he's doing on meta. i'm wanting to know, is he putting money in a chimney who cares? he has figured out, between this and reels, doubled since six months this was at at engagement, not efficiency

>> well, using a.i., i believe they said 25% of the ads were served not based on the people you follow >> 24% >> sorry, thank you. >> that's because i'm old. >> yes what it allows them to do, jim, is what you just said, get around apple and that's -- that's effective i can't -- i mean, the praise i got this morning from the handful of calls i made of those who have either owned the stock or unfortunately didn't own it going into this quarter, you change the company in six months the guidance was amazing in the face of macroenvironment that's not great. the acceleration is earlier than we expected. and then, of course, so, what should the multiple be you have high teens revenue growth, should you get a higher multiple as a result of that >> look, this is an accelerated revenue growth story i believe the cadence was great throughout i don't know why it doesn't get 25 multiple. look, it's a huge position for my charitable trust. i stuck with the guy, even though i had that confessional moment with you. >> well, that was the low.

>> but i -- >> that was a good moment. >> i didn't sell >> you didn't sell >> no. >> you cried, but you didn't sell >> i cried, but i didn't sell. i didn't sell. and i shouldn't have cried mark wasn't happy. >> actually, mark seems to have changed his entire company >> he better start cutting people, and you better start improving the engagement, and it resonated. i saved that company, david. how about that you want hubris? no, let me tell you how he saved it let me be very clear he spent a lot less time -- he'll say, look, people say i pivot and don't care about meth. untrue but he spent a lot of time on a.i., and a.i. was necessary to get that engagement up, and a.i. was necessary to fix reels >> right >> and he's fixed reels, and i think that advertisers are going to go to reels you see the return on investment he gave you? he has studies give him a dollar, he'll give you three bucks. it's like a machine. you put in a dollar, out comes

three. >> ad impressions up 26. pretty amazing >> how about 3 billion people? >> it's not going to have people back off on the notion that the market's reliant on a few very large tech companies >> it totally is, but when you have a number where almost two-thirds of the people in the country look at this thing, i mean, i don't -- you brush your teeth and you look at it what is going on david, people are checking how many times -- everybody. >> look at that. >> how about the 140 million people who are being left out? that's his goal. you know what he said that i loved? >> tell me >> he said, i wasn't happy with how we were doing. you ever hear that from a ceo? now, we were in -- >> well, there are ceos who aren't happy, but he actually, to give him credit, changed a lot. and not to mention went on a firing spree >> he's not done >> efficiency spree is the words they used, efficiency. >> he used everything but the words, deadwood. >> to restructure the company. now, that said, they are still -- you pointed out, they've spent $4 billion on the metaverse this quarter

>> okay. >> they've indicated their -- the losses are not going to go away next year in any way. they may even increase, right? >> that's true that's going to -- >> and he made it clear on the call we're not ignoring the metaverse. >> he's looking -- i think there's metaverse stage one, which is now he spoke too much about the avatars. let say you're ralph lauren. you're patrice you want a ralph lauren store, which you can't really do, and you want to have a.i. to say, listen, i want to see what i look like. i'm a 32 waist, 42 long, and i want to be in that and then it shows me, okay, and i decide whether i like the color. maybe i don't like the fit that was the point of it, other than teaching. and teaching was good, but i wanted a more -- you need a mall, and no one's giving them money. well, the revenues are down. >> yep >> you get me with the metaverse -- you know, like if you have a bar, you go in, you have a virtual drink no but you get a cocktail mix

nice >> i'll look into it in ten years. >> i'm waiting to do that for my wife's mezcal. >> you make money from that? >> so, anyway -- >> it's a long game. but as for the metaverse, zuckerberg was very clear that if you think he's backing away from the long-term bet on metaverse, he's not. here's what he said. >> a narrative has developed that we're somehow moving away from focusing on the metaverse vision, so i just want to say up front that that's not accurate we have been focusing on both a.i. and the metaverse for years now, and we will continue to focus on both. the two areas are also related >> so, today, baird goes to $260 stifel goes to $280 morgan stanley reiterates. that's basically the extent of the moves on the sell side >> the cost side here is really incredible the reels doubling -- >> they got margins up to, what, 14 >> yes >> nobody expected them to be that high, or very few >> we sat here and talked about

what kind of growth company is it that doesn't have any growth? and i think the answer is that the growth is going to come roaring back i also think we're all going to be challenged, and we're going to talk about our company, but we're all going to be challenged by the notion that you should put ads with these guys. you should take some of your ad budget and put it with these guys by the way, remember when they were bad they were, like, both the house and the -- and the democrats and republicans both hated them? there wasn't a lot of political -- so, this was no disney this is no disney. take a look at futures here as we combine the corporate results with the macro data and that gdp. big morning on tap, including the ceos of service now, southwest, sirius xm, and cbre

td ameritrade, this is anna. hi anna, this position is all over the place, help! b hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back.

service now beating on the top and bottom line. the company did raise its full-year guidance for subscription sales overall, boding well for the tech industry, perhaps. goldman-sachs, one of the companies that follows it, says it's a buy it was, and it still is. joining us now, first on cnbc, is service now's ceo and chairman bill mcdermott. always good to have you.

we got a gdp number this morning that was a bit disappointing you have a decent look into the macro environment. you started off the call talking about it remains a complicated macro environment. seems to be benefitting your company or at least you're saying it is, but give us a take in terms of what you're seeing from your customers, the challenges they're facing, and what that means for your business >> well, thank you very much, david. i appreciate it. we're obviously very focused on taking care of our customers, and it is a complicated macro out there. there seems to be an app for everything, but nobody needs every app. nor do they want every app so, what's happening is companies now are locking in on the technology platforms that can really deliver business impact so, whether you're taking cost out or putting growth in, the service now platform is the intelligent platform to end-to-end digital transformation, and the reason why we had a beat across the board, whether it was revenue, margin, operating profit, by a

significant margin, by the way, is because our customers need us we're delivering for them, and we're continuing to deliver on the promise of a beyond expectations company >> and you say, as well, we talk so often here about a.i. we were just talking about it in relation to meta you say the a.i. opportunities here when you can integrate the front, middle, and back offices to better serve the customer you say that's a core competency how is it a core comp teetency your company >> service now is the intelligent platform for work flow automation across the enterprise if you think about generative a.i., it's a great step forward in enabling a different level of automation of human work, which is increasing higher productivity, driving efficiency gains and faster time to value for service now customers. if you think about the augmentation of the service now work flow automation platform, we're enabling a whole new world

of revenue streams because think about an employee, they're going to get a better experience they're going to be better able to activate their job quicker, get answers to questions think about reinventing call centers where now the call center agent has all the answers at their fingertips instead of going through really arduous difficult processes. think about a customer being able to self-serve and getting the answer that they need, but think about engineers being able to text, to code, text to work flow, or even text to building net new applications on the service now platform so, this will bring in a whole new wave of innovation and a whole new wave of growth to service now. but david, i think it's really important to mention, we're not putting out press releases we're actually delivering generative a.i. right now on the service now platform so, in that platform, you get generative a.i., you get business process automation. you get rpa. everything is built into one platform with service now, which

is why customers love it >> bill, jim cramer. good to see you. generative a.i. -- >> hi, jim >> call centers. the notion of generative a.i. is that you don't need call centers, that the people are not as smart as generative a.i i believe that whether we like the jobs or not. it was mentioned even by jensen huang in his keynote that call centers may be a thing of the past what do you see happening? what does generative a.i. make companies be able to do and save money? >> it's going to be really big, jim. i like to think of generative a.i. as a massive productivity enabler to companies certainly, you wouldn't need as many people in a call center as you have today but the people you have would be a lot happier doing their job, because there's still a job for them, but most of the things can be taken care of now through self-service or when a call center agent is dealing with a customer inquiry, they're going to have an immediate answer to a

question they're going to have the next best recommended step, and with the work flow automation flfrm from service now, whatever the action is, it's going to be built into the procedures of that work flow, and things are going to happen so quickly where you're not going to have difficult processes. so, for example, if you buy shirts and shoes and you got to return them, the processes will be automatically activated in a work flow automation, and that includes the front, back, and mid office, and that's what david was talking about. so, it's big it might be the biggest innovation i've seen in the last 50 years, and i believe without question we're going to demonstrate this, jim, at our financial analyst day in may in las vegas. we'll have the biggest, boldest move in generative a.i. of any i.t. company in our space. >> wow all right. we're going to be watching it closely. bill, keeping it short today, given the avalanche of earnings news we have, but always appreciate it. see you again soon thank you.

>> great to see you guys coming up, we'll get cramer's "mad dash," look at the opening bell back when i had a working circulatory system, you had to give your right arm to find great talent. but with upwork, there's highly skilled talent from all over the globe. right at your fingertips. ♪ this is how we work now ♪ ♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪

among the s&p laggards this morning, there are a couple misses out there uri is one of them, down 5%. you'll see southwest as well with the wider than expected loss revenue was a ssmi we're going to talk to bob jordan shortly after the opening bell our customers don't do what they do for likes or followers.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. all right, welcome back. let's do a "mad dash." we got so many earnings that we haven't even gotten to, but we will let's talk caterpillar >> okay, so, the stock was initially up seven and now it's down three this is because people feel there's not enough backlog, things are going to slow down,

china isn't picking up i'm going to go against the market down eight give me a break. the reason why my travel trust owns this is because in 2024, there's going to be so much spending that that's what you look at. you're not going this for 2023 they're really only going to buy american for the i.r.a. and for the chips, and it's all going to be cat the people who are selling, it's a very controversial stock, i have a small position. i want to make it much bigger, because i'm willing to actually think about the orders coming from the state remember, federal government, state, states make the regs, then pick general contractors. >> you're talking about more about the infrastructure bill than -- >> no, and the -- people are selling it are selling it because next quarter may not be a blow out, which i think it wil be, frankly. this is to set the record straight there are people who want this stock down too i want it lower too so i can buy the bejesus out of it. because i care about what's going to happen in 2024.

i had the commerce secretary on a thousand times the amount of money that is going to go from the gc to them makes it so you shouldn't even be thinking about this year, and yet this year is quite great he raised the numbers. he doesn't give real forecasts, but you can extrapolate. people say, listen, if you did that good at earnings, you should be raising money big. he doesn't give guidance he said over and over again he doesn't give guidance. let the stock come down and buy it don't bail out these people who don't have any brains. let them sell it >> does uri give you any pause at all >> uri doesn't use any cat, and that's an interesting thing, they've never used cat, and people always think they do use cat. you know, i was -- the only thing i was perturbed about, i talked to judy marks the other day, otis is doing really well in china i would have thought they did better in china. but you buy these guys last off

infrastructure and uri is not going to be a borrow case -- i mean, it's a borrow case, whereas you go in the big guns, the big gcs, they own a lot of cat, and they are going to do a lot of business, but i wouldn't say uri. the read-through of cat and the ceo was this big guy i loved him, but he said, actually, if you had done more homework, you would know we don't use cat. i love that, if you had done more homework. >> you never want to say that. >> i heard that from my teacher in the fourth grade, and it got back to my dad my dad wanted to hit me so badly. he hit me once when he thought i smoked pot >> thank you for that. >> i wish i had done more homework i do wish i had done more homework no, i'm sorry, but no, they're not a cat read-through >> we'll watch the industrials today. international paper's down a couple points as well. >> i don't know why anyone didn't think it would be i mean, we had patterson corp.

of america give us a bad quarter. when i see ip down, you think, you buy a gillette razor there's card board on the back, the plastic, that's going down the metal, the plastic in the handle >> i can't hear a thing you said carl >> let's get the opening bell. the cnbc realtime exchange, at the big board, it's inspire medical systems, focused on the treatment of sleep apnea and at the nasdaq, apollomics, drugs for difficult to treat cancers. >> we got to go over all this. the people who say it was going to be down 6% in earnings, i mean, that's -- those people have to rethink their job. they should have an existential crisis about how wrong they are. and i'm using meta as exhibit a.

because we have been out here saying over and over again that he's doing a.i., that mark's doing a.i., that reels is going to accelerate, that instagram is going to be on fire. he did not talk about instagram being on fire, directly, david, but up 28 is not enough. >> really? >> no. it will be up 35 >> listen, i know, i got some -- i got a bullish fund manager this morning who said, it should trade at at least 17 times, and based on his numbers, we talk as much as $300 >> he's firing people. he's raising revenue he did not brag about the 300 or 400 -- you can't even tell how many basis points zpinstagram is up, but i think the takeaway is one of those -- you have a tv show, and they have the season, and the season turned out to be a do-over. they did a do-over, and everything you thought about the last three quarters was wrong. instagram was failing. people weren't going to it people were going to tiktok. they weren't using reels he was spending a fortune on meta, and it was going to ruin the quarter. no all those -- every one of those

observations -- >> the goldman desk points out it's back to q1 of last year where it was, like, peak idfa, and reels was a concern and tiktok was a concern how hard will it be to elevate from this? >> i think it will be easy, because this growth in reels is really extraordinary i thought the growth in tiktok was extraordinary. reels is amazing people are coming back to instagram to see things that are pushed to you that are advertisers. the growth in instagram's like the old days and i don't think he's satisfied, still i mean, it was not -- he wasn't jumping up and down. i mean, he's -- wow. he's the model exec. >> at some point, someone's going to say, why go on instagram just to have people bombard you with ads and try to sell you stuff >> he's always been conscious of not ruining your feed. and it looks like it david, i don't know whether you feel this way. >> david's huge on instagram, yes. >> he's sending you things you actually want, because he has --

he has a.i. that tells you that you wanted to get more on your abc pants from -- right? i mean, doesn't -- no? >> as carl knows, i'm huge on instagram, so much so that i've never actually been on it. that's okay. >> he can think -- he can think about what you want, and then send the ads using artificial intelligence >> wow he's prescient >> i'm just saying that he's the smartest guy he's the guy who's figured out more how to use a.i. than anybody other than microsoft >> by the way, meta is coming on the heels of microsoft's best day since november you see bill gates' wealth went up $2 billion yesterday. >> good day for him. he had a good season >> he had a good season. by the way, it is worth -- that azure, the guide in azure, the inclusion in part already from a.i. and computing power there, but it's worth mentioning, capex seems to be coming in higher and guiding higher for a number of these companies, and that

probably is a good thing for the likes of nvidia. >> okay -- >> and for those that are -- that are providing into the datacenter >> absolutely. now, if you go on ebay, good quarter, and you look up the h-100, which nvidia makes, it's $40,000. you need a boatload of these things to get -- this generative a.i. is just h-100 now, both microsoft and alphabet pointed out exactly their tie-in with nvidia. i added someone at this brain foundation thing that said, hi, nvidia i said, i'm jim cramer i hate to skip that. but i do he said, how high can nvidia do? i said, you're thinking it wrong. own nvidia, don't trade it you can't get h-100s they're sold out forever, so alphabet gets what it wants, and meta gets what it wants. remember, zuckerberg, an ally. >> jensen huang. >> by the way, i think part of what makes zuckerberg a kinder,

gentler guy, hanging out with jensen >> got it. all right, guys, in the time we have, because we've got some interviews to get to, our parent company stock is up 4.6% woo-hoo. >> that's fab. >> i'll give you that. comcast reported numbers free cash flow free cash flow free cash flow $3.5 billion it was above what had been estimated. there's a lot of focus at the company on generating it, and there's a lot of focus on investors and what you do with it as much as $2 billion going to buy back stock also a dividend. and that's kind of the story right now, and that is why the stock is being well thought of this morning >> acceleration of some sort >> yeah, a little bit, but i will have to say for the overall cable environment or ecosystem, i was struck by the loss of video subs 614,000 in a quarter 614,000 cable subs of comcast said, see you later. we're out of here. not broadband.

broadband's holding steady broadband, domestic broadband, total domestic broadband customers, roughly where it was a year ago, up slightly, but man, video, that -- our world -- >> what do you do? >> i mean, it is -- it is picking up, the loss of subscribers is actually accelerating, and if you are a company with a lot of cable networks, this is why you got to figure things out. and so, i did note that. there was a time when i would report on companies that had a million cable subs they were considered pretty decent-size cable companies. they lost 614,000 subs in a quarter. as for the management change that we talked about earlier this week, of course, jeff shell running nbc universal, leaving the company. mike cavanagh made it clear on the call that he is here to stay saying he's, you know, he's going to be working a little more, working a little harder, but basically all these units

reported in to him as it was, and jim, he just makes it very clear that i think, again, what we were talking about as well. they're not going to be naming a ceo at nbcu. he is, essentially, taking on that role as president of comcast. >> tell me, they did almost $2 billion in theme park can theme park offset what you're talking about, video, and david -- >> well, video was never a huge margin business, so it's not as important to the overall profitability of the company but why i'm mentioning it is because there's a lot of other companies whose businesses still depend on having -- >> espn read-through >> whether it's disney, warner bros. discovery, paramount, nbc u, that's where it matters >> okay, but david, is there any way that cavanagh is going to say, listen, we won't tolerate more than billion $3 billion ins on peacock >> i don't know the answer >> if i were cavanagh, i would say, line in the sand. i didn't hear that from previous

managers >> peacock did get to, you know, 22 million subs, i think, where we are right now >> that's a 16% increase in paid subs >> and i wanted them to do much more european football, which people are crazed about here, and you can also -- you've already paid for it. you already have content that you paid for that's not being used enough, not being used correctly, and you have that way to be able to get it so that peacock, you can draw the line in the sand, and i think that it's -- look, as i said, i'm relentless on peacock. but that's my view if called upon, i will serve >> very good we should get to lily, all-time here, one of the companies raising guidance for the full year, and i think rick's was on "squawk" this morning, jim >> there's a couple things going on with lilly. one is that wegovy is just not as effective as majorno, and you lose 50 pounds that's important, especially for

obesity, diabetes. the blood pressure does better cholesterol does better. two drink a night people, you can get off that this drug is a drug that is going to be taken by far more people and only lilly has the factories. they're building factories left and right for doing this there are other things that are going well for lilly, and the work that i did at the american brain foundation, speaking with everybody i could, it's very clear that their alzheimer's could be superior to biogen. >> guys, day two of microsoft dealing with the antitrust authority in the uk with activision the ceo of activision was a guest on "squawk box." talking about, of course, in his view, and many others, by the way, the wrongness of that decision, essentially, how misguided it is, how it actually is going to engender less competition as opposed to more, and also, sounding a more positive note, perhaps, than

many others believe in terms of their ability get this decision reversed on appeal but i thought perhaps more -- his most interesting comments were very pointed in terms of his view of lena khan at the ftc and the overall antitrust regime that he sees between the uk and the u.s. take a listen. >> i was surprised to learn that lena khan and the head of the cma had a meeting a week and a half ago in washington legally, you're not supposed to be discussing active litigation. i don't know that they did, but you know, i think that that's what you're seeing now is that the cma is being used as a tool by the ftc to be able to create these kinds of outcomes, and this isn't the way that they're supposed to be operating >> so, pretty interesting comment there from mr. kotick in terms of saying, they're getting the cma to do their dirty work in a way they do share certain

progressive perspective at both agencies at this point we, of course, will monitor this closely. there is generally a belief that this deal is not going to get to the finish line, that it's not quite all dead but almost. kotick doesn't share that or at least not publicly, certainly. he is, of course, under contract to be as positive as he possibly can in getting this deal done, and he certainly would never want to put in jeopardy his $3 billion break-up fee that activision is in line to get if and when the deal finally ends >> thoughts on that, jim there were some takes this morning that activision should now be thought of as a buyer >> look, the -- bobby is both combative and also doing what david said, and i think activision is just a -- it's just a buy they had fabulous numbers. and if -- it may be heads, you win, and tails, i lose

this is rather remarkable situation except for the fact that, david, he talked about meetings between the european -- between the british regulator and our regulator. >> yeah. >> i mean, doesn't that make you feel like the ideologically, this is what we're talking about? >> that's the question i thought that was a very interesting comment from mr. kotick >> holding on to $40.85 then let's get to southwest shares are down in reaction to the quarterly results there, and our phil lebeau has a special guest in dallas. phil >> good morning, carl. bob jordan, ceo of southwest airlines, you report a loss of wider than expected loss for the first quarter, but it's the guidance into the second quarter. you are expecting to get back to profitability this quarter, correct? >> we are. and the loss in the first quarter really was in line it's just the $380 million pretax impact of the ops disruption, which really impacted january and february. march was really strong, very strong demand, so it looks like it was isolated early in the

quarter. but for the ops disruption, we would have had a very strong quarter. second quarter, bookingis and demand is there, and we expect a strong profit for the second quarter, and we still expect a strong profit for the entire year >> when you look at the entire year, a big part of your story is modifying your fleet plans for later this year, because you're not going to be getting as many 737 maxes as you originally thought you were going to get how are you adjusting to this? relative to what boeing says it plans to deliver to you? >> right, boeing has some continuing supply chain issues that are affecting the delivery schedule we had 46 aircraft from 2022 that weren't delivered that are stacked up this year now we have another 20 we were going to get 90. now it looks like 70 that would tell you we're going to take 152 in 2024. we're not going to take 152 aircraft we're going to work with boeing to reflow the order book i want orderly growth, manageable growth. we want all of our aircraft.

we just want to make that an orderly transition >> is this your way of saying, look, i appreciate what you're trying to do here, boeing, but we are not fully confident you'll be able to hit the scheduled deliveries that you have put out there >> i think given the delays that we have had, especially through 2022, i think it makes sense just to be prudent in planning deliveries you plan way in advance to set your schedules, to set your capacity, and if you're wrong, it's really hard to change that close end. we're going to plan for 70 that means, of course, we're going to go back and look at our hiring we had hiring plans to hire over 7,000 net this year. we're going to moderate our hiring we're still working on all this. this is new news for boeing in the last ten days, but we will be moderating our hiring >> bob, i know jim's got a question for you go ahead >> yeah, bob, i got to see you earlier in texas, but we did not talk about the quarter, obviously. you have a good look at reservations did you see cancellations, any cancellations or reservations after a couple of snafus, the christmas one and then we had

one last week? i'm trying gauge how much we should worry about the company and the stock, given the fact that people that you haven't spent enough onolo technology or you're not up to date. cancellations, yes, no >> jim, no we saw the immediate cancellations of return travel from the holidays, as expected, to the issue really was during the holiday period, so we had cancellations of returns in early january. we had some book away, january, february, no doubt it appears that it's isolated there, so we had none of that to any great extent in march. bookings and demand for the second quarter are very strong we already have 75% of second quarter bookings in place. we have 60% of bookings in place for june, which is actually ahead of normal, so no, we're not seeing excessive cancellations at all at this point. >> well, i just want to be sure, bob. i want to go over this something you told me and some of the other people tell me in airlines, we still have a pilot shortage you can't just slot a new pilot

in you have to train them they take a long time. how much of it is boeing, and how much of it is you just don't have enough pilots >> no, the reflow of our capacity for the year at our hiring plans, that's all because of the change in boeing deliveries, dropping from 90 to 70 this year we're getting pilot. you got to work hard i mean, there's a lot of competition for pilots we're getting qualified pilot, great pilots i think what we told you before is that we were going to be pilot constrained, not aircraft constrained, until the end of the year now with this change with the boeing delivery schedule, it looks like we will flip to aircraft constrained after the summer so, that's going to force us to rethink our hiring plans across the board. >> bob, getting back to what jim was asking about, about the cancellations and the issues with the meltdown at the end of last year, i know you laid out a plan in march for, hey, we can do better, this is how we will do better. but you know how long it takes

to build a brand can you sense how damaged the southwest brand is right now >> i think it's probably two different stories. number one, you have to be transparent about what happened. you have to take care of your customers, take care of your employees, and we worked really hard to do that during the disruption and post disruption there's no doubt that bookings are strong, demand is strong, so we're not seeing any softness there that would indicate we have lingering issue now, you can't go through something like the december disruption and not have an impact to the brand and the brand reputation, so we're very focused on restoring that this year it means run a reliable operation. it means produce the service and hospitality southwest is known for. we are absolutely focused on those two things, and we are focused on the action plan that we are very transparent about publicly to remediate the issues that cause the december event, and be ready for december and winter of 2023 >> quickly want to ask you about

what the consumer overall thinks about airfares they're a little bit below, for the industry overall, little bit below from where they were pre-pandemic just a little bit. do you sense there's resistance that we've gone back to a point where the consumer has ahead, i'm ready to fly, but okay, this is about as much as i want to go when it comes to airfares? >> i don't sense a resistance because of airfares because we're just not seeing any softness in terms of demand. and if you go back and look historically and look at airfares, aeirfares on an adjusted basis are actually down you can't look at the headlines out there or think about the economy and not focus on potential challenges ahead we're just not seeing those, but we are focused on making sure we're watching for any indicator that there's a slip in the demand because of the economy. we're just not seeing it our customers love southwest airlines, and they're showing up >> bob jordan, ceo of southwest, on a day where they reported a

wider than expected loss, guys, but the real news here is what they're planning to do in terms of modifying the number of 737 maxes they plan to take this year >> good stuff as always, phil, thanks to you. our phil lebeau in dallas this morning with southwest as we go to break, let's watch bonds. we've got q1 gdp and claims under our belt we'll get pending homes in about 12 minutes and then the fed balance sheet tonight at 4:30. dow is up 170, and we're just shy of 4,085

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chatgpt, they had to pivot i know bill mcdermott is talking about call center people, they could be trimmed this is right now. people are being fired right now because of this chat. >> interestingly, although morgan stanley -- semis not trading that much. >> you have mobile i which says that -- they're important because intel owns 94% of mobile i and mobile i is awful and intel could bring these down you know, i -- i just think that the semis are taking a breather. they're not a.i. >> there's a lot. >> yeah. >> although samsung had good things to say about memory recovery. >> i think that's going to be -- it's troughy is what everybody says sell video -- nvidia down. >> it's a special day at cnbc. back at hq, take your child to work day

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i have caterpillar, i think tim is going to explain if this is ridiculous i have pioneer, i think this guy will say this is ridiculous. i have richard dealy, the new ceo. and then evan greenberg. evan is chub, which i can tell you is -- the insurance companies have been doing well, the stocks, but he has no issues and that stock is serious buy. >> we miss things. never got to oil and - >> no. gap stores, layoff. >> we didn't get to merck. >> didn't get to merck. >> sell-off. i mean sales decline because of - >> yeah. and then david, don't forget, the nvidia subs you got to that. >> wireless subs and comcast were excellent. >> i have to go. >> 5.6 more premier league - >> domestic wireless lines. >> will frost told me arsenal didn't do so well last night.

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. good thursday morning. welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber, live from post nine as always from the new york stock exchange take a look at stocks hanging in there. they're higher across the board up 0.8% on the s&p every sector up except for health care, communication services in the lead, that you can, meta, after gdp shows a slowing of growth, less than expected and a key inflation measure inside that number coming in hotter which is why treasuries are selling off and yields are higher. >> let's get housing data. diana olick has pending. hey, diana. >> hey, carl pending sales in march dropped 5.2% month to month. the street was looking for flat so that's a big miss sales down 23% year over year from the national association of realtors no surprise why. take a look at the average on the 30-year fixed in march that started the month over 7% and remains elevated before dropping at the start of april when the banking crisis hit pending sales are based on signed contracts during the

month. sales dropped in the midwest where prices are lowest. we're also seeing growing demand in west cities, supply may be worse. supplies still a problem nationally, of course. the realtors saying what is available is seeing multiple offers and more than a quarter of homes are now selling above list price that's why we're seeing home prices start to gain again in some markets the realtors predicting sales this year will be down 9% from the year before from existing homes but for new up nearly 5% because the builders have much more supply and are buying down mortgage rates back to you. >> thank you very much diana olick. 30 minutes into the trading session. three movers we're watching. hasbro a top gainer after a surprise profit beat we'll break down the numbers with the toymaker's ceo in the next hour of "squawk on the street." comcast headed higher beating earnings estimates despite losses at peacock the streaming service and a drop in residential broadband

subscribers. comcast up a nice 5.3% and then there's meta which is leading the s&p after posting its first sales increase in about a year worth stepping back and talking about this, with a 14.25% surge in meta leading into the report a 70% run up in the stock this year it seemed like a good combination of what wall street is looking for right now which is a return to revenue growth, efficiency is going well, the -- they lowered their operating expense outlook and there was a lot of talk of a.i. >> even though the capequix unchanged. efficiency hits the ground even with the restructuring charge and we went over the metrics with jim, ad impressions up 25% as they're getting some definite traction relative to tiktok even now, even before any kind of ban in any more states time spent against tiktok on reelz is smaig headwind.

>> reelz seems like the star of this report, even though it's not being monetized. it's still a revenue drag, but driving engagement and to me, david, of all the stats and things you can focus on in the report, one really important one seems to resonate is the 24% increase in time spent on instagram and reelz as a result of a.i. recommended feeds. >> yep 25% of ads based on not people you follow a way to get around also what they had faced in terms of the hurdles in dealing with the changes in apple's privacy policies and operating system seems to be successful you know, i had a hard time this morning finding anyone who would say a negative thing about this quarter with the acceleration in revenues earlier, earlier than had been anticipated we're talking about high teens revenue growth many argue the stock should

trade at a higher multiple, perhaps it will now. you can see that just in general, the changes that have been at this company they cut a quarter of the gee base, and, you know, he says we haven't abandoned the meta verse, but they seem to have shifted a priority to a.i. >> it was mentioned a lot more than that's verse on the call. the -- metaverse on the call investors are looking for how do we quantify, everyone is an a.i. company. here's how zuckerberg, we have the sound bite, talked about a.i., and its impact on advertising. >> a bunch of opportunities on the visual side to help advertisers create different creatives. we have the tools to do that over time. eventually making it so we've always strived to just have an advertiser be able to tell us

what their objective is and us do as much of the work as possible for them and now being able to do more of the creative work there and ourselves and those who want that could be an exciting opportunity. >> so, yeah, david, the street loves it going through the note, stifel says it's their top pick after a 100% run up in the stock they still think it's cheap. 13 times p/e with for an asset with 20% earnings growth according to the algorithm they say is a good deal and they're optimistic that meta can get there, even though they say the street still under estimates that potential. >> the guidance surprised many people, even those who were positive on the company, even in the face of macro environment in which advertising is stressed. this was an excellent quarter. again, $4 billion spent on the meta verse the expectations are those losses are not going away any time soon, but given the

efficiency that he's introduced and the much higher margins they've introduced, or are seeing right now, they can spend that money. >> you were saying what do you pick apart here? everything is so glowingly positive there are some things to monitor, right if we see a sharp deterioration in small business which they are dependent on as a result of our economy, those businesses are going to be less likely to spend. they're still lapping and they mentioned this really strong or they're still lapping weak results as a result of the russia-ukraine war and of the china covid, so that's something. and carl mentioned the cap x plans are unclear and spend asking not change and spending is key for this company. >> without a doubt the macro environment continues to be, as we know, very much hard to see through this is point. >> meta shares up 14.4% here in the early action speaking about the economy no slowdown in sight for mastercard as they highlight resilient

spending during the quarter. kristina partsinevelos joins us. she's been digging into this report and some of the commentary good morning, christina. >> good morning. the earnings call just ended but what we're seeing is consumers are resilient despite the inflation environment. on the call the ceo saying that they are seeing signs of inflation cooling and consumers are still spending however, what's happening right now, we've seen this with a lot of the chipotle restaurants is that we're shifting away from goods and towards experiences. on the call they called it rebalancing towards experiences. the company beat on revenue and profit with purchase volume higher than anticipated which is a key metric since it shows more purchases made with mastercard transactions and that is what's driving the stock almost 2% higher right now visa, their earnings were out yesterday and said payments volume growth ticked down in march and has remained at similar growth throughout the first three weeks of april mastercard's earnings showing the same march was a tough month. volumes up % year over year in

both march and april but that's lower than january and february. both payments companies say that has to do with lower tax refunds or maybe even delayed tax refunds. another highlight, mastercard's total operating expense was up 10% year over year this is an important part on the call they finished saying it had to do primarily with higher wages. lastly, like visa, mastercard did see a massive rebound in cross-border travel 35% as pent up demand for travel and entertainment. the key takeaway, resilience for the consumer and shift towards experiences. we keep spending on travel and we keep spending on entertainment despite all of these concerns in the environment. >> amazing, because in all the commentary on a lot of these calls they don't see it abating and don't see it changing any time soon. >> right. >> they're riding it >> for mastercard, i didn't put it in there, sometimes the lingo

in these calls is all over they said they're guiding to the high end, high range of the low end double-digit numbers what you need to know is they're guiding higher and think the consumer heading into the summer you're going to see more spending because gas prices go higher and more spending because we get the tax refunds and overall the summertime people tend to spend on travel. those are three driving factors for a lot of these payment processing firms and again, highlights, strength we saw that quickly yesterday. you talked about it briefly and had all of these companies, chipotle, p&g, everybody increasing their prices double digits and there hasn't been pushback from consumers. we keep talking about this impending weakness or -- it's not being reflected in a lot of numbers and the reaction from the earnings call. >> right especially category specific thank you. kristina partsinevelos guys, the gdp report backed that up when it comes to consumer spending. the overall headline was weaker

than expected but we're a consumer economy and that's the important part of the numbers. 3.7% growth in personal consumption. it was a miss, but a lot better than the 1% growth we got in the last quarter of last year and does not show a consumer flat on its back. >> yeah. i mean, the more bearish take is that capital spending intentions are beginning to soften. we know what's happened to equipment orders a lot of this was government spending how long can that be sustained inventory correction will go on. you have morgan stanley today say q2 their first crack is minus 0.4. >> there's negatives there why the overall headline number was 1.1% the street was expecting 2% growth. >> atlanta fed at least got it right. >> atlanta fed got it right. that's why we monitor that one the truth it was business investment and real estate and in big inventory correction there. but the consumer in good shape

i think the biggest surprise is the number and what may be unsettling for the bond market today is that we saw the inflation rate inside there go up the pce inflation rate and take out food and energy, 4.9%, the highest in the year. that is not supposed to be going in a higher direction. that is what fed is trying to fight. if there's one number inside of there for the fed to worry about it's not the slower growth, it's the higher inflation rate. 4.2% annualized pace from january to march, 4.9% if you look without food and energy that's a problem. >> yeah. same thing in the uk, goldman raises their base case for peak rates in the uk to 5 it's not specifically a u.s. issue that's happening in various parts of the world. >> and the question is how fast can it come down services we know are strong. we're getting that from christina said about travel. i spoke with steven at hertz, the ceo this morning that stock having a nice move they beat on earnings. they're seeing 13% revenue

growth he said no signs of abatement in the strong travel demand here's a snippet of our conversation march was better than february, he said, february better than january, on both pricing and demand and so far spilled into april. >> talked to hilton yesterday, similar comments. >> very similar. both of them, what they both stress, is there's a huge tailwind coming for travel that will help hertz and hilton, which is, inbound travel, tourism to the united states from abroad, it's barely started and barely started from asia in particular chinese visits to the u.s. are down 80% from normal levels. there is a backlog of one to two years for visas to come to this country and visit and now they've lessened the covid rules and so they're expecting another big wave of demand when it comes to travel. >> on the call hilton said do we feel any different than i did sitting here a quarter ago i would say yes. there will be less credit available and hard to believe in

the short to intermediate term that's not going to have some impact. >> they're not in a vacuum and they know what's happening on the credit side and impacts the financing and development for a hotel company. as far as consumer demand for travel everyone thought the pent up demand would -- >> would come down. >> with the tightening and inflation shock and the higher prices across the industry we just have not stheen yet -- seen that yet. >> we have an unemployment rate that's low. >> jobless claims today, guess what, went down? >> yeah. >> economists looking for them to go up still a little elevated, but we don't have a mass layoff problem in this country. that's the takeaway from initial jobless claims today feels like it from corporate america they're getting efficient and it's -- it's not being reflected overall in the economy and yeah, i think that's why consumer spending is holding up so well. >> we'll see jpmorgan this morning reminding us that it's usually job prints of 100 to 150 that are

consistent with sustainable 2% inflation. when you get recessionary that you start seeing negative prints we talked to vincent rhinehart yesterday who thinks that's coming. >> they think it's coming. all the economists think it's coming the weakness in the jobs report what's going to trigger it i don't know this is an important fed meeting as they all are next week because the market expects the fed to signal a pause. or at least pause afterwards you still, david v a lot of regional bank problems that probably have not spilled out into the broader economy which is a reason to pause >> yeah. >> but you have inflation. >> we haven't mentioned first republic in the last hour and 15 minutes. the stock is you up, but it is still a key concern for the regulators, leave it that. >> but for the system? >> no. >> not for the system. meantime knocking on the door of 4100 again let's get to industrials today with seema moody hey. >> hey, carl honeywell and caterpillar both

delivering a strong beat on their bottom line, honeywell seeing a 13% increase in its aerospace business, but caterpillar, the stock you can see is moving lower by nearly 4% after ceo jim umpleby said cat is seeing weakening in china where caterpillar makes 5 to 10% of its sales executives adding while some supply chain constraints have started to ease dealers wait longer to place orders for new equipment and that is raising concerns of a peak cycle narrative which morgan stanley analysts write this morning will likely accelerate from here given the elevated level of dealer inventory shares of caterpillar down 4% breaking below its 200 day moving average today and on pace for its third consecutive month of losses. this is a stock, shares of caterpillar, that have led the last prior bull cycle gaining 60% from october to the beginning of january next's ism report will provide

further clues on the health of the manufacturing sector but to add to that conversation you were having, strong consumer but a different picture emerging in the industrial world. >> seema, thank you very much. it's a tale of many economies right now. seema moody. as we head to break, our road map for the rest of the hour more on meta as it's among the leaders for the s&p this morning. some on wall street forecast even more gains ahead. >> plus declining revenue numbers hitting siriusxm we'll check in with the company's ceo later this hour. >> despite growing concerns around commercial real estate shares of cbre headed higher the ceo will join us live from post nine bakowthe mbs when we return ♪ ♪

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cbre, rising on a q1 beat, maintaining its outlook for 2023 core earnings. despite the uncertainty in the regional banking crisis and commercial real estate, saying this is not like the global financial crisis joining us to talk about all this is cbre ceo davibob sulentc stock is up despite the doom and gloom. what's happening >> i think some of the talk of the doom and gloom is out ahead of what's really going on. office space has a tough circumstance because of return to the office challenges after covid, partly because of jobs

being eliminated in tech and other sectors. if you look at industrial space, very strong fundamentals, 3.5% vacancy. look at institutional quality multifamily less than 5% vacancy, hotels strong fundamentals single family leasing backed by institutional quality financing, very strong fundamentals even retail fundamentals are improving. the story around commercial real estate isn't what people think then when you get to other parts of our business like our outsourcing business where we handle real estate for corporates, that's actually -- we plan to grow that at a double-digit rate this year. >> so offices you just said less than 20% of the u.s. - >> if you look at our u.s. capital markets business it's less than 20%. capital markets is where office is really creating challenges for us. >> what are you seeing there how bad is it? >> you're seeing downward pressure on prices, not a lot of

capital available to buy assets or finance assets. you're seeing some challenges in the banking sector associated with loans rolling over, but here's a statistic for you, about 1.5% of the balance sheet of commercial banks, 1.5%, is in office assets. it's not going to be -- not commercial banking sector. >> it's only $80 billion through the year for office, but again, as a percent of the total it's very small that said we all want to talk about it. >> yeah. >> the journal loves writing about it today a story about a building that was valued at th$300 million that's going to sell for $60 million. what are the implication for decline in value of properties in major cities? >> there is going to be a decline in value for office buildings, but what's going on with return to the office and challenging around return to the office is companies want their

people back. to a reasonable degree the way they're getting that done is through great office environment for their people the good office buildings, the a office buildings, surrounded by amenities with infrastructure, those are still doing well they're going to be valuable while the office asset class is going to shrink, it's still going to be a very large asset class. >> you believe so. and what about the idea that seems to be very difficult to accomplish in terms of the requirement of so much new capital of converting building to residential, for example, given the need for housing in so many cities. >> there is a big need for housing in the u.s. and around the world creating an opportunity in commercial real estate i think the opportunity to convert a lot of these office buildings is going to be limited because the floor plates and the building infrastructure doesn't really effectively work for multifamily residential. >> some of the other players that had earnings were discussing what is the

deceleration in leasing? is it driven by remote work, sort of secular story, or more a cyclical story >> it's both for sure when you read about the layoffs and the technology sector, read about some of the layoffs in the financial sector, that's a big part of it. that's a cyclical thing, not a secular thing. as it relates to the secular dimension of this thing, that's kind of settled out. >> yeah. >> and, you know, the bottom line is, that's not going to come back for the foreseeable future. >> there was one line, boston property, said we hear about examples where employers are saying you have to be back five days, but that is not the norm. >> that's not where we're headed in the long term there's going to be a hybrid work environment, but again a hybrid work environment where people try to create really great environments in the office to get their people back and effective. >> so where is the bottom? what sort of clarity do you need what the fed does?

what do values go the other way? >> i think the fed is central to the bottom and we think later this year interest rates will stabilize, inflation will stabilize, and when that happens, what we think is capital will come back into the commercial real estate market. a lot of what's driving capital on the sidelines now even for asset classes doing well like multifamily, like industrial, is just uncertainty about where debt financing will be and more values will be. >> bob, appreciate the update. a lot of good color on what's happening. >> thank you vechg. >> cbre president. in addition to it being the busiest day for corporate results, it's a special one at cnbc headquarters, as we're excited to celebrate bring your kids to work day we're in the office. and our kids are in the office as well. which is a lot of fun. >> where are yours >> well, i don't work in new jersey we're not doing that here at the stock exchange. >> they're in my husband's office.

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we're a little under an hour into the trading day all the more reason to get to bob pisani who joins us on set so many earnings today we haven't -- we're not even able to get to them in the last hour. >> strong earnings beats, almost across the board some stocks a little over priced and are down surprisingly like caterpillar. a little bit of a problem there. overall, they're not only not lowering the second half earnings system which is what everyone is afraid, some are raising the numbers. the sectors here and what we got here communication services have been great. meta has been strong comcast has been strong. our parent company banks, first republic is stabilized and up 10%. comerica and zion. consumer discretionary great hasbro had great numbers, ebay, amazon had great numbers

health care is kind of mixed there. we got lily good, merck good, abbvie is a problem. that was a disappointment. one of the few disappointments semiconductors have been on a downslide in the last few days we should talk about that. some of these companies that have raised guidance i don't mean just beating estimates, but raised guidance meta is a high, lily has a new high right now up 2%. they had good numbers. merck had good numbers and beat and raised their full year outlook. honeywell raised their full year q2 guidance in line but that was raised ebay, second quarter guidance, raised on revenue so that was good roku had good numbers too. all the companies raised their full-year guidance there are a couple of downside leaders concerned about. i want to show you -- i don't know what's going on with the material names but freeport has been on a down trend it was 43 six or seven days ago. the earnings were friday but trending down before that.

mosaic and material names are sliding. some issues about how strong the china reopening is going look at mobile i, the big ev electric war that's going on that was the price war that was started by tesla they lowered their numbers citing china there so there's a knock on effect from tesla's price war where are we on the first quarter earnings let's call it pretty good so far. 234 companies, look at this, today was a huge day we're about halfway in the earnings season, 80% beating, about average. here's an important number 6.7% is the average beat now prior to covid, a typical beat on the s&p 500 was 3 to 6%. i would say this is above average precovid more companies are beating by slightly larger than the historic average here only 32% have raised the estimates kind of surprising but doesn't include today's numbers because the conference calls are still going on i think they're going to raise that overall where are we

here's the bottom line the bottom line is, generally beating pretty well, more than expected, and they are not lowering the estimates for the remaining quarter. 202 2022, dollar numbers for the s&p 500, the estimate today $219 so basically, break even for 2023 versus 2022 it's about the same as it was when we started earnings season several weeks ago. so not lowering system remember, the bears are expecting an earnings apocalypse that has not materialized. last year the s&p dropped 25% but earnings did not crater. in an earnings serious recession, earnings go down. >> we're roughly halfway through for the s&p market cap reporting. >> we're down 4, 4% along there. for the fo first quarter, third and fourth

quarter estimates are high the bears are waiting for them to start cutting saying the companies are giving us bad body language and so far, halfway through, we keep looking out r they going to say things are cratering none are, that's why we're in this trading range. trading at 18 times forward earnings that's not a recession multiple that's a growth multiple the market is priced for the soft landing nobody wants to believe it that's what i love about this. everybody is skeptical and thinks the numbers are wrong and that's why the market keeps holding in there because people are standing on the sideline with cash. >> because i almost think it's more important what the fed does or does not do than what happens with earnings and with the economy. >> if they're wrong, if the fed are in trouble. >> yeah. >> interesting picture shaping up thanks bob pisani. meta calls it the year of efficiency and results are

feeling a surge. seventh best day in its history. our next guest says there's more upside ahead we'll talk about it after the break.

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benefits. payroll. compliance. trinet. people matter. welcome back to "squawk on the street." i'm sylvan na henao. here's your update at this hour. federal prosecutors believe the suspected leaker of classified pentagon documents is a, quote, serious flight risk and fear he could escape and be offered safe haven by a foreign adversary prosecutors made the claims in a new court filing in the case against air nationals guardsman jack teixeira as they urge a judge to keep him mind bars. governor ron desantis is set to jump into the 2024 presidential fray in mid may according to exclusive nbc reporting gop operatives familiar with the conversations tell nbc that florida republican will announce an exploratory committee first with the

official launch coming soon after. desantis has traveled far outside florida in recent weeks to raise his profile >> and the american heart association is weighing in for the first time on which diet and eating plans are best for heart health the list gave the lowest scores to the paloe and keto diets for the reliance on fats from animal sources. top marks were given to the mediterranean diet which focuses on whole grains, vegetables and low fat dairy. i say everything in moderation >> thanks. mean time meta shares soaring after its first sales increase in nearly a year. joining us this morning, jpmorgan's doug has a buy rating an raised his target from 270 up to 305 great to have you. phrases like building muscle and rarefied air and the balance between the near term execution and still investing in some of

the longer term initiatives. >> thanks for having me. so in terms of the balance that meta is seeing, look, we think there's a few things going on here first of all, accelerating top line growth which we think really drives a clear path towards mid teen revenue growth in the back half of the year, a combination of external factors getting better, but also a lot of meta's own company specific initiatives certainly around ai monetization and then also some specific products like reelz and click to message and then at the same time you're seeing significant efficiency work as well, cost reductions in terms of the head count reductions they've done and the combination of these things is really creating room for them to invest long term they laid that out very well last night i think around their comments around a.i. and still the metaverse as well. >> you point out that capex

could increase in 2024 why is that no longer an overhang on sentiment, the way it was say six months ago? >> so i think, yeah, we're modeling capex to go up in 2024 and that is a little bit of a change for us. but look, we think the stakes here around generative a.i. and large language models are significant over a multiyear period and as we've seen this week from multiple mega cap tech companies, there is clearly just heavier investment across this entire space you saw it with google and microsoft and, of course, meta is not giving specific numbers going toward '24, but we think they're leaving the room it's an area of important focus for them and -- but the reason it's not as significant perhaps now is because you're seeing really meaningful cost cuts throughout other parts of the organization in terms of both head count and then other efficiencies in terms of productivity and a.i. improvements and so they're

basically creating this room in the income statement and the bottom line to keep doing these really important investments that will fuel long term growth in the business. >> so do you not have to be a believer in the metaverse to be bullish on the stock anymore >> that's right. i don't think you need to be a believer in the metaverse to be bullish on meta shares i think that's right look, the -- i think it was interesting the comments last night certainly they are continuing to invest here. to be clear these are big numbers. we have meta still losing north of $14 billion this year in reality labs and north of $15 billion next year. really significant but again, it also shows how profitable the rest of the business is that they're able to fuel those investments for, you know, hopefully for the long-term benefit and, you know, we think there's a lot still,

you know, near term, mid term in terms of the advertising growth and then certainly what they can get with a.i. as well. >> you know, zuckerberg really go did make a significant pivot here i'm curious in your long-time covering this company and some of its competitors is there anything comparable to what we've seen here in terms of sort of where he was and where he is now? >> that's a great question, david. i actually don't know that i have seen something really comparable go back to the 3q earnings from last year and, you know, what were kind of significant step ups in spending and it was a quick pivot to your point a couple weeks later so look, i don't know that i have seen something quite like that, but, look they have much better control now over the business i think the important thing about that pivot is, it's not just cost cuts and head count reductions for the benefit of

the bottom line, right, and for the shares they are starting to see, i think, real benefits in terms of running the business leaner and faster and making decisions quicker and that's going to benefit them over the long term and gives me more confidence that these changes they've implemented can be sustainable and really just how they do business long term. >> you know, david raises a great point i'm thinking back to the corners that we thought zuckerberg might have been painted into remember when they had no mobile strategy, cambridge analytica was a huge liability, diversifying away from core facebook, ibfa, now it's expenses it is remarkable of his ability to come out of what appeared to be tough patches. >> i think that's great point. they've shown, to your point over the years, the ability to pivot and adapt very quickly to changes in technology, certainly

you had that shift toward mobile right at the time of the ipo, 11 years ago, and, you know, they've shown themselves to be nimble in this environment and look, you see it here, not that there's, you know, de-emphasis around the metaverse but certainly the tack they're taking around generative a.i. and how important that is and how it feels like they will lean into that to improve the business going forward. >> doug, appreciate it very much we'll keep an eye on 305 thanks for your time good to see you. >> appreciate it. speaking of meta, it is leading the nasdaq 100 higher this morning with its 14.5% gain nasdaq composite up 1.5% other winners, comcast up 6% off the back of earnings overall, market is up a percent now. the s&p building on gains. we're still down a percent going into a friday and a fed week for the week but we'll continue to monitor

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welcome back to "squawk on the street" on a very special day. it is bring your kids to work day and we are continuing to celebrate at cnbc with the youngest members of our team, different kids than you saw a little while ago we've got so many we want to give everybody their time to give us a nice wave and a nice smile. i do remember when i brought my kids and it was a great experience for a number of years there. now they just go to work. >> they go to work. >> not quite yet, but soon they have to go to work. >> we bring our kids to work at the new york stock exchange the day after thanksgiving. >> you have to make sure to make time for us new hamxt year. >> hasbro on the heels of the revenue beat and guidance. the stock up 10%

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understood sayers of siriusxm

had been under pressure. the stock has come back. the company did miss on earnings and revenue. it did boost guidance for the full year. joining me in a cnbc exclusive, jennifer whit, ceo of siriusxm nice to have you down here what can you tell investors in terms of whether there is growth in the future of siriusxm? >> first of all, the quarter itself was expected, largely came in line with what we thought. over the rest of the year we expect to make progress on subscriber net ads with the second half of the year to be positive we have an incredibly strong platform, loyal subscribers, customer satisfaction is at an all-time high from 2009 to now the economic model is robust as ever with high margins it's really a setup for the building of this new platform that we're launching at the end of the year that is going to

better position us to take care of the -- these pain points that, you know, many younger audiences have with our service and trying to find context. >> what do you mean by that, finding content? >> we're already delivering on that with 360l if you come into the car today, have you a broadcast service that largely you navigate by turning the dial 360l in a third of our new trial car starts, younger customers can come in and better navigate the experience and content they love we know when customers find the content, besides music and nonmusic content, experience the broad set of content we have, that they convert at much higher rates. >> in terms of the growth strategies, is it about adding subs as opposed to pushing price? i'm curious where you are in terms of the consumer and their willingness to accept any price hikes. >> so, we're rolling through a rate increase on our full-price subscribers today. that will continue to drive revenue over the course of the

year but i think we're well positioned on both i don't want to drive subs at the expense of revenue, but at the same time, we have the opportunity to capture more demand to the extent we have more flexible pricing in markets. >> i know myself i have a couple of cars, i have my deal coming up and i was able to get a much better deal than - >> you negotiated? >> i did negotiate i don't want to damage your business at all, but i'm curious in terms of what you see as the average -- what the rpo is and whether you do see the ability to move it up as a result of result of people looking for deals. >> i believe the ideal scenario for us is have a broad set of packages with different levels of content and, perhaps, access to capture that demand at different levels we also have a package at $35 a month which is attractive for people like you, with multiple cars, want to treemstream in an

of the car i think there's room to capture more revenue from existing subscribers who have been loyal. >> what are you seeing in the ad market, not just sirius, and people forget you own pandora as well >> ad revenue was down 2%, which is better than our initial expectations when we met in november, we were seeing different trends in the market a lot has to do with podcasting. podcasting continues to be a bright spot for us we have a great set of content we're representing and we're able to capture a lot of late quarter bookings when advertisers came into the market, budgets opened up and we could do that through our program attic podcasting. >> and people are right in saying they overpaid are you still seeing that as a potential negative in the marketplace in terms of

overpaying for content when it comes to podcasts? >> i think a lot of the big properties are settle in terms of ad ownership so there's not as much trading and we're happy with the portfolio we have across pod save america and koenen and "dateline." we even have cnbc. so, it gives us a really great set of properties across the board and a diverse set of content to sell. >> one thing that settled is howard stern he settled in florida. >> opening up miami next week. >> what does that mean >> he opened up the l.a. studio for us a few years ago we're in a great position to capture on the local talent. there's a lot of latin and hip-hop talent in the area we'll have a phenomenal set of guests next week, not only on howard but in general, becky g. and pitbull and anita, and andy cohen and tinx and others. >> you're not reducing your footprint in new york city, are

you? >> no. our cost reduction efforts, which we're capitalizing, but we looked at every line in the p&l and we have driven reductions starting with a late period of last year. that is what allowed us to increase our guidance, not only because of better ad revenue in the first quarter but the cost reductions we see running through p&l. we were able to move ebitda up >> new and used car sales plays an important role in adding new users. what are you seeing in terps of used car sales, which there's been a lot of concern about lately >> the first quarter for us was strong in terms of setting us up for growth trial starts were up across new and used from the prior quarter. that will continue, we believe, to roll through the year in terms of better subscriber performance for us as that continues to build

what we're seeing in terms of intent to purchase is actually pretty strong right now. >> finally, two stocks will you be able to resolve that will liberty resolve that? >> i think you're having greg on. >> i'm looking to have greg on, yes. yeah, that continues to be at least a question that i get. jennifer, i'm glad you came down for the update thanks for being here. >> thank you >> jennifer witz, the ceo of sirius take a look at gainers or losers first republic shares have a little bit of a positive date, up 8%. not saying much given their week that does it for "squawk on the street" on this hour big hour ahead for you stay with us

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number on your screen, or visit coventrydirect.com. good thursday morning. i'm carl quintanilla with sara eisen live on the floor of the new york stock exchange. setting the agenda today, david roeflz as facebook parent soars after crushing earnings. the year of efficiency starts to pay off. hasbro with us, boosting that stock big time, his take on the coming transformer film as well. similar stor