now. that's my take on it still dollar cost average. >> okay. that's great, sylvia, thanks >> thank you have a great day. >> you don't have to say all odds it's never true. it's all eyes. >> all eyes listening to my voice right now. thank you both for being here. >> thanks. >> you're welcome. >> make sure you join us tomorrow "squawk on the street" is next ♪ ♪ good tuesday morning everybody. welcome to "squawk on the street." i'm david faber with jim cramer. we are live from the new york stock exchange carl has the morning off this morning. let's take a look at futures you can see we are set up for what's going to be a lower open, though we seem to be coming back from what i saw a little while ago. really who knows, right? it can all change so quickly our roadmap does start with d.c.'s debt showdown president biden set to meet with congressional leaders today. treasury secretary yellen

saying, quote, we're not a deadbeat country plus, we continue to keep an eye on the regional banks. the volatility seems to be back when it comes to their stock prices chicago's fed president saying the credit squeeze has already begun. check out shares of palantir, this is as they say interest in their new ai platform is, quote, unlike anything we have seen. we'll talk about that in a minute let get to the debt showdown, if you want to call it that at least a countdown to the talks this afternoon no one seems to think anything is going to be accomplished. >> no. it would be shocking i'll tell you, david, if one more person comes on our air and say, well, of course they have to be solved that's the kiss of death i think they should be saying will the president -- like george stephanopoulos did, will

the president vote the 14th amendment. the answer is he may and then the republicans would go right to the supreme court the court is a republican court. that's what you have to think about. >> orszag, a frequent guest on our air, had said that's probably the break-the-glass solution he didn't use those words. >> that's the term everybody is using. is this a jewish wedding give me a break. these are all the moments, hey, you know what? of course we have to solve it because we'll look like a mickey mouse country. in 2011 the s&p downgrades us. >> i think we were sitting at this desk. >> the same week that some latin american country was downgraded -- aaa, j&j, jpmorgan and the united states and the united states loses. it was a frightening time in the republic people seem to forget 2011

entirely >> janet yellen hasn't forgotten 2011 here is what she told sara yesterday on "closing bell overti overtime" about what may happen. >> the only option that gives our economy in good shape, and our financial system, is raising the debt ceiling and making clear that congress stands behind the basic principle that america pays its bills we're not a deadbeat country >> jim, how do you position a portfolio or anything in terms of the next few weeks and the heightened risk, however high that risk is, and everybody is saying it can never happen but the heightened risk -- >> -- i had total mistrust of congress and mistrust of the

president. this time i'm only around 11% cash that's probably too aggressive but there was -- the reason why i put a "but" in, it was the most unbelievable buying opportunity. you put 19% in the blink of an eye. i don't want to -- i'm not trying to minimize what it's like toob be a deadbeat country i will say it is absolutely certain you're going to get, yes, the mother of all rallies after this is over. >> you think you get -- >> in the stock market we know people are trading at yields that will not be sustainable. >> -- >> -- >> housing industrials, travel and leisure, those are supposed to be cratering. we don't have the companies that the top-down guys, they're not looking at companies because they wouldn't know the difference between a company and, i don't know, the salvation

army honestly -- which is a great charity. they somely don't look at what the actual makeup, the components of the indices are. if you ask me who the strongest quarter so far, it would be lennar, dr horton, pulte. >> that gets back to a conversation we also have at this desk which is housing is incredibly strong. wage growth, employment. so it still points to the possibility of another 25 basis points. >> absolutely. >> despite the concerns in the banking industry >> definitely. there's just too many parts to the economy that are very, very strong i just don't see any slowdown other than -- people say, listen, the problem is commercial real estate

every bank denies there's a problem. commercial real estate is office building, but it's all sorts of other areas. >> not all painted with the same brush. >> shopping malls are doing great. >> warehouses, data centers. all they are is being put up that's what's happening right now in this country. >> a little lag in data center >> you're also looking for -- you need them to power the new ai generation. you'll be filling them up without a doubt. you need them to be powered by renewable resources. it's not the easiest thing to actually get done. we take a look at jpmorgan talking about the debt ceiling >> i'm saying -- i've been interviewing -- i interviewed exilon they're chicago. >> tell people what they do. >> the largest utility in the country. i asked them about baltimore which is historically a troubled city in terms of industrial

departing. i asked about baltimore. i asked about philadelphia and i asked about chicago. that's the old com-ed. how is commercial real estate? fine, fine yes, it's true that it drops off like on fridays and picks up in housing. david, i don't know what to do i'm beside myself to try to find -- even if you look at slb, only vornado was weaker. >> the amount of market cap we're talking about is infinitesimal. >> who are the people -- >> office spaces and $a80 billin refinancing -- >> 60% at the regional banks, and there it is. the next shoe to drop. >> the next shoe canary in the coal mine. my grandfather used to have

canaries >> many of the banks said we have diversified portfolios. we're not taking risk in any one part of the asset class and we're not seeing. >> -- everyone told me that brian jordan, that he had bad real estate at first horizon i heard it over and over again nashville is bad it turned out to be -- it wasn't a problem with commercial real estate. >> by the way, it wasn't a first horizon problem at all. >> no, they speculated it was. >> speaking of the banks take a look at the kre -- >> there's three pieces out today about how the canary in the coal mine. can we come up with something else people stopped using those kind of coal mines a long time ago. i find it, david, this hunt, it is very much a snipe hunt. where is the snipe it's not the white whale because the white whale was around

it's not the whale that killed all those people in new jersey, you know, the one that came all the way up -- >> unfamiliar. >> right next to the bon jovi -- >> i still have no idea what you're talking about. >> a garden state thing. a white whale that came up and killed five people. >> when was this >> the 1800s >> can we get back to -- >> i ask every bank. david, i'm pathetic. i asked every bank in every part of the country and i can't find the darn commercial real estate. >> it's not an insignificant concern, jim there are some serious refngs. there are loans priced at much lower value and will need a lot more equity. that is going to happen. are the banks sufficiently reserved for it and will it

destabilize the system many people would say no. >> no. i don't think it is. i think it's easy to short these things because we don't know how much the fdic is going to levy against them we don't get the numbers until -- every three months you get the available for sale and held in maturity we're waiting for those numbers. we don't know what percentage -- the fdic has not individual banks insurance from individuals who want something from 250 -- >> you talked about the fed. you said possible 25 basis points in part because of strength in certain parts of the economy. we did get the financial stability. we also got the fed's senior loan officer opinion survey. that showed banks are tightening the lending standards in the first quarter. that's not even to say what things look like now. >> have you seen the data that says powell is the most hated -- >> -- >> who is the most hated man in america in 1989?

>> paul volcker. >> thank you how great and revered is volcker now? i think powell looks at that and says i could be like the great volcker. all i have to do is just stay tough. i'm just saying, david, it's going to work out okay all the people who say it's the end of the world are the same people who always say it >> so when you say it's going to work out okay, you mean -- debt ceiling? credit tightening? fed tightening >> i said it's worth 100 basis points >> all of it is going to work out okay >> yeah. >> we don't need to come back tomorrow then. >> i often thought about that. they're winning the war in ukraine, solved how hertz does its algorithm, major health company has used them. >> that guy alex harp can do it

all. >> the best line of all, he says bp hired him and lowered the cost of a well from 14 to 6 and 60% decline in how much it cost to drill. >> we'll talk more about palantir >> harp didn't curse once. >> we'll let jim continue to talk during the break, but we will take a break -- >> the best one is when he won the war against the russians. >> we'll just cut his mic. actually just lower it down. slowly have him talking into the distance. >> another look at futures >> there iis e?t we're back right after this. stay with us it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support.

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what would that reality look like? well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? what, we have a ton of mulch. palantir's shares, they'll open up sharply after the company posted a second consecutive quart early profit ceo alex carp says he sees the company remaining profitable each quarter through the end of the year and demand for the new ai platform is without precedent. he elaborated on both of those points on last night's "earnings call." >> within the context of remaining profitable, our strategy on ai is to just take the whole market we have no pricing strategy. our strategy is going to be to take territory, educate the market and make it difficult for other people entering the market

because they'll have a to compete with a pro district we've been working on for de facto years. >> ai is a service, jim, is what they're talking about. a couple of shareholders encouraged them to say, we have a large language model we can work with all your large language models. we can attach ourselves to your large language model and do whatever we need to do with it that's a positive thing for the future of the company. morgan stanley this morning says they're building a tower of ai promised but the foundation feels shaky. that's morgan stanley's piece this morning they don't like the stock. >> business is deceleratdecelerg i will say i've been very critical of alex carp, not just because i thought it was totally unnecessary to curse on options call they made money, $17 million they forecast gaap positive. what they did was pivot.

they did the pivot we've been hoping for it was a clear pivot i think the stock should be up. >> gap bps up one current. they made it. >> they didn't seem to have any regard whatsoever for whether they made money or not they were about dominating, world domination. >> direct listing. it went straight up and has never been able to come near its early times. >> i want to find out more about ukraine and what they're doing for ukraine. they're basically saying they can control the battlefield. look out, russia >> like many companies, of course, they're pivoting, so to speak, or focusing the market and investors on the possibilities that ai presents for them i would pivot now to go to a bernstein piece this morning -- >> oh, my god -- >> the long piece on microsoft they call it the microsoft ai series part one. ai could change the future of the company and the industry again, this is bernstein writing

about microsoft. while it's early to size the economic impact on microsoft's business, the green shoots are becoming visible as microsoft launches a family of capabilities called copilot which implies ai-enabled offerings will be more than a valuable assistant, they will be critical to operations going forward. they go on to say microsoft is far more than bing chat. it's becoming core technology everywhere and in everything microsoft does in fact, we estimate that ai offerings could currently touch over 42% of microsoft revenue, could double the microsoft cloud revenue. >> did you see that? >> it's going to change microsoft and likely the software cloud industry. >> this was worth 25 points if you believe it i have to tell you, i'm most impressed by what google is doing with ai. >> what? most impressed -- nobody is impressed with what they're doing with it. it was thought to be a knock

rate product i have people calling for sundar's head. ger-er in on air last week saying he should be fired, how did they possibly miss this? >> -- >> they bought -- >> -- i'm taking a contrary view here is my thought microsoft seems to be teaming up with hp and amd which is why amd is up 13 points. i like that. if you want to do a deal with nvidia, google is doing some of these deals. i think we should not count them out. >> explain what that means >> let's say you want to hire nvidia because you want to get more productivity, meaning that you need to chop some hets you don't just call nvidia, although you can call jansen, but he's working hard on the deep dive taiwan speech at the end of the month you call and they say, maybe you ought to work with google.

google may have a solution i'm saying don't write off google as an entity. right now everyone has i'm not saying this because -- >> -- they have lost a long-held lead. >> -- microsoft has the lead the stock will be at 50 -- if you believe this piece, then it's worth $50 if they double azure, that would be incredible. >> it's a significant piece. we should remind people bernstein is pure research. >> they don't do banking >> coming up, jim is going to give you a mad dash. >> trying to be a little contrary. >> yeah, well you can be wrong, too. >> we've got an opening bell let's give you another look at futures. >> when i sold strawberry ice cream -- [office sounds] ♪upbeat music♪ ♪♪

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we've got a mad dash we're calling an audible we came in thinking western dench which reported fiscal third quarter numbers. we looked at the board and saw sky work. >> we looked at the defense and realized they had a guy on the left side. who is the mike. >> micah parsons was coming in >> skyward solutions makes modems they make them for apple which you're not allowed to say on a call and for samsung android

this is the first time i've seen this android, i can argue, is falling apart. that's in china. this is all android slowness of orders sky works is run by liam griffin, a fantastic executive this is the beginning of a bifurcation that you and i must talk about for the first time, china, we're seeing the rich buying stuff and the poor not buying. i don't think people realize china has a bifurcation where lvmh is a dominant brand which is incredible. this is what mao was most against, against the two classes. a class that buys lbmh and apple and a class that buys androids the class that buys androids, they're either out of money or are saving money to buy apple. >> the consumer numbers in china may be reflective of that. >> i think have to start recognizing there's become two classes. how the heck that happened when there was supposed to be a

country devoted to one -- no big homes -- >> have a middle class made up of hundreds of millions of people that's been created over the last 20 years. >> that's what i'm worried about. >> so you're seeing it reflected in sky works. >> a little more like ross charles, one of my professors. it is without a doubt reflection on the fact thatandroid is doing quite poorly. >> we'll keep an eye on skyworks we'll get to a number or other earnings reports this morning. stay with us we've got a lot more coming. don't forget as well, if you want to catch us differently, different time, you can catch us any time anywhere by listening to and following "squawk on the street" opening bell podcast

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aircraft in a deal worth more than $40 billion the discount carrier says it comprises 150 firm orders and 150 options for delivery between 2027 and 2033. we're going to have an exclusive with boeing ceo dave calhoun and ryan air ceo >> ryan air was angry. >> about what? >> boeing's profits. those were all covered by phil lebeau phil told you this was going to happen those excited to buy boeing, understand you're buying something that was well known. >> i wish we had a ryan air in this country you can get anywhere in europe for 50 bucks, 60 dollars. >> are there seats >> i don't know if they have seats, but who cares just hang on. >> like a subway

>> how about we get an opening bell so people can hear you. there's going to be the applause and nobody is going to be able to hear us it's kind of muted today here is the opening bell [ bell ringing ]. >> -- hardwood pulp. >> really? >> opening the nasdaq 1-800 flowers in celebration of mother's day don't forget it's this sunday why don't you get to western digital now. >> western digital has this flash business margin was negative 5, down 19.5%. there's problems with the debt covenant operating loss was 304 million driven by underutilization charges and inventory write-down otherwise fantastic quarter.

>> wow, you scored it went in. >> that's not bad. -- this was one of the worst quarters i've seen. >> stocks not down that much >> because people were kind of expecting it. >> i guess so. >> any read-through or is this very specific -- >> everything that's technology, anything sold at best buy, anything sold at best buy -- i think this is take two's quarter. >> you think it's take two's quarter. why? >> because the last quarter was a quarter where you saw a miss that was very uncharacteristic

and strauss zal nick came on "mad money" and said, i missed it was terrible, i know. we haven't even talked about activision. >> on activision there's not much more to say at this point in terms of microsoft's continued attempts to try to close that transaction. >> didn't you find -- >> -- very significant roadblocks. >> say again. >> didn't you find bobby's comments at the buff f buffett-a-thon fascinating >> -- has also moved to block video. as i said, this deal -- >> dead. rigor mortis. >> bobby is contractually --

they've got a merger agreement that extends until the middle of july maybe that will change in some way. microsoft has certainly got the best lawyers they can possibly imagine. >> i think it's worth keeping an eye on. >> -- >> an undervalued company. >> activision? >> yeah. let's go to two companies that the market absolutely hates today, under or more and paypal. >> which do you want to start with >> under armour, gross margins declined 310 basis points. compare that to nike nike is a genius company under armour, i like kevin plank very much. this is, again, a very, very big disappointment i'm beginning to wonder, what do they have? what do they have that is special? would you wear under armour -- >> this was a period of time when this was a darling stock. i don't think that chart reflects it. there we go. yeah.

>> well, it was. it was 40 -- >> prior to the pandemic and even coming out -- not coming out, but after. >> kevin plank, he seated management he went through a ceo. now he has a new ceo, stephanie lynn narts this is her quarter. this is a quarter that lacks coherence. let's go to paypal actively looking at the ceo. >> dan is supposed to not be there much larger. >> there was a very small margin issue i thought. there was a downgrade by credit suisse of all people it was brutal. people just feel like the margins are shrinking at paypal. >> again, it's always helpful to look at the longer term. do you remember when that think had -- what was it i imagine 150 billion market cap or more.

it's 1.12 billion shares out, talking about a stock that was above 240, 250, yeah it was 250 bile the way you bought things on the internet and then it just kind of became -- their growth numbers kept going down, down, down. each one was a bit of a surprise in the end -- >> some activists -- >> yes it reminded me very much of the movie -- >> i missed that one. >> at the end, jimmy cagney is one of those things natural gas in a bubble. and he said top of the world --

>> back to present day -- >> it's a shame. a really good guy. >> the problem in the current quarter is -- >> the margins went down by 25 basis points it was kind of farcical i felt at 25 basis points the long knives are out for him. i thought it was a severe overreaction if you take a look at the downturn of the company, no one wants to get faster than a speeding bullet, more power than a freight train running over you. i tried to read it without looking at the stock price and said, okay, they missed the one marlin line. you look at the stock price and it because a routt >> you mentioned necks lon i wanted to mention next tier energy market cap, it's the largest bifar. there was an interesting story

today in the "wall street journal" saying they're going to spend as much as $20 billion to build that real green hydrogen capability they are, by far, the largest user of renewables, wind and solar. but green hydrogen is not that easy to make profitable unless you can do something at scale which nobody really has, have they >> cummins was downgraded today in a trade today they're doing electrolyzer machines using lindy hydrogen. lin, a fabulous company. the first commercial trucks that are going to run on hydrogen yes, it's far away we know plug power has been a disaster that's fuel cells. >> and then nicola. >> nicola sends me an email every day. hey, jim, your neighbor decided

to say hi to us. >> they've got a hydrogen truck out there somewhere. >> ge -- larry culp would say, jim, hold your horses on green. >> there's a belief that the inflation reduction act and the provisions in there are going to be quite beneficial to actually -- >> our hydrogen -- right now hydrogen is about 8, 9 we're going to be the lowest cost hydrogen company on earth. >> country. >> country lower than south korea, lower than china, because of the ira, so get on board. >> they've chosen to that's a significant allocation of capital for nextera a large company. >> they're going to do it. if you want to really ply hydrogen buy the stock of lindy. what do they do? they make hydrogen don't fool around with all this

other stuff. it's down today. well, terrific so what? a lot of stocks are down today >> what else are you keeping an eye on all the banks are down let me look at the kre we began yesterday with it up and then it changed course >> not much ado about nothing. come after pat west. >> imagine if you worked at pac west we should call matt wagner, call him as the ceo >> -- >> wheels up has a new ceo i shouldn't talk about it because, of course, it's below the market cap but it is a former spac, so i can talk about it in that realm. it was 49 cents, it's 50 cents today. >> kenny victor is no longer the

ceo of the company he stepped aside. >> what's important here, if you watched that eclipse interview with warren buffett, he was talking about net jets at one point he said, and then there's wheels up. wheels up is at 47 cents, and they have a billion dollars in liability. he said, i don't know if that's the case they take people's money i said, you can't have warren buffett in the middle of this conference call take down wheels up you can't watch your phone seeing that i'm here how about iff? >> yes, it was on my list. thank you. do they ever have a good quarter? >> 1982 to 1985 i handled their buyback. >> very strong >> this company, what's going

wrong here >> i don't know. flavors, fragrances. >> i thought ed breen -- >> everzine is chairman back in february they used to be a pristine company. they made a series of acquisitions, including the russian -- >> brought in a new ceo. he was supposed to help right the ship. >> he ain't righting the ship. this is once again -- this is the problem for people at home, this is the iff. we delivered first quarter 2023 results in line or ahead of our expectations >> which is it we won or maybe we tied. this is roman. this is roman. >> succession. >> roman roy in line, maybe good, maybe bad says absolutely nothing. >> apollo also reported, and actually they used some interesting words as well. solid, solid >> ashford and simpson.

>> solid first quarter results and also -- what else was solid? there were a few things very solid at apollo. you don't want to use that one either. >> don't want to use solid if you can use record, use record solid, there it was, it was solid. listen, what they manage in assets is pretty remarkable at this point they expect to get over a trillion 598 billion in total assets. fee generating, 445 billion. perpetual capital, 341 billion we'll talk to mark rowan about the business -- >> remember yesterday you chided me about draftkings making the market in certain things he said the government won't let them i offered to jason the challenge, make book on race to zero, lucid versus fisker.

>> i'm not sure what we're talking about. there is lucid. >> i'm saying jason robbins who runs draftkings is trying to get permission from the government to make book on a lot of things, on the 14th amendment. >> on whether we'll reach the debt ceiling >> i want to know lucid versus fister, which gets to zero first. both of the people who run this are very proud people. >> lucid has a $13 billion market value even from here. >> fister made a car that was sold in denmark. by the way, they told me they'd be making thousands and thousands of cars. well, they're making -- hoping to make 10,000. >> fisker. no. >> no lucid. that's an interesting situation. >> i would offer more information on lucid -- >> they're not making a lot of

cars. >> -- expectations in terms of production a number of times that is true it did come public through a spac remember, if you recall. >> okay. hurt a lot of people. >> it's below ten. skbl still a significant market value, obviously going after the high-end ev. you and i have both driven in the car. >> yeah. >> so we have that. >> how about some positive news? >> sure. >> msgi recommended by wells fargo, that's henry fernandez. that would be my pick of the day of stocks if you wanted to buy from this treasure trove of research that i follow that stuck out to me as a very, very good company. that's a company that owns --. that's just a money machine. money machine. so i like that. >> all right okay >> i liked tree house, but nobody seems to care about that one. >> no, they don't. >> tree house is a private

label. if you felt it was trading down, you could buy that i keep telling you the consumer in this country is spending his or her darn fool head off. i have brunswick on tonight. >> i keep an eye on -- because i find it fascinating. below seven now. down another 4.5% on the call yesterday. i think charlie making it clear, hey, it's not going to be that easy to figure out our 21 billion in debt. >> no. it's not going to be that easy you're right david, i think it's interesting, pivotal research was 33, going down to 20 cowan going 38 to 32, jpmorgan 18 to 20 >> stock is $6.94. >> that's price targets may be suboptimal versus where the stock is. >> they're quite high. it's been a rapid decline. perhaps they haven't caught up with it. maybe they haven't watched.

>> maybe this is wait until next year david, other than msci we haven't said a single good word about anything today. >> no. what can i tell you. i don't know there's nothing that great out there. >> we have to have something positive. >> we'll come back i got something for you. >> microsoft should be up two or three bucks. >> yes, on that bernstein report >> instead of google i moved google up, too. >> something that will always lift your mood, always bob pisani. >> okay. sounds good. >> it's springs, folks, mother's day is coming up take your mother out i am the weather fantastic in the northeast. i wish i had good news on the stock market but this debt ceiling negotiation just hangs over the market like a shroud everybody is passing around charts of 2011 remember that? august 2011 when we got right up against default and they finally raised the ceiling two days before treasury said it was it

i think s&p dropped 15% in august of last year. everybody is passing charts around it's hard to get energy going when we have this overhang here. energy just went positive on the day. we've been commenting about the character of the market re recently, how defensive it has become, how there's no bid in cyclical names look at materials. down again today they've been acting awful. mosaic, that's a big global -- a new low, 52-week low, $36. cf industries, a 52-week low sealed air, eastman, big global names in the materials sector have no bid at all in them for the last several weeks this has been a problem for the overall market take a look at where we are for the quarter. i'll show you how defensive the market has been. it's been held up by consumer staples and health care. technology is flat, but big cap tech has been the mover on the stock market holding things up there's no bid in banks.

there's no bid in energy, industrials doesn't have any bid. materials doesn't have much of a bid at all very bifurcated market here. we're in this trading range. the trading range is mostly due to the fact these big cap tech stocks -- i put this up yesterday. everybody should understand how big these companies have become, microsoft, apple, alphabet is up 4% you'd think the stock market would be great actually it's flattish meta, nvidia the average stock is down, not up these stocks dragging them up. there's a lot of hand-wringing these companies have too much influence, at the high end of where they historically have been here is how the big ten names look almost 30% is that a little, a lot? it's typically 20-25%. thanks to my friend ben carlson

at wealth and common cents who pointed this out is it a panic territory? too much influence some people say so it's starting to move in that direction. here is something, guys, that will interest you. you want to talk about apple's market cap this is a great stat $2.6 trillion for apple's market cap. the same as the entire uk market there are 595 companies in the uk market. apple is as big as the entire uk, bigger than the entire market capitalization of france, bigger than the entire market capitalization of germany. i can go on. amazing statistic here about how influenced these companies have now become we'll talk more about that in the next hour. david, back to you. >> bob, germ nip has a $1.3 trillion that's it? germany, one of the largest economies in the world >> 2% of the global market capitalization it's shocking how small these

companies have become. >> incredible stuff. >> the important thing is $2.6 trillion equal to the market capitalization of the uk. >> it's incredible that germany number surprised me >> $2.6 trillion for apple that'sgo. >> you pay market cap. >> i'm going to look that up. >> thank you before we head to break a look at the bond market treasuries are faring. we started talking about the debt ceiling, the meetings today, between the president and speaker. take a look at yields. the 2-year note above 4, 10-year at 3.505 we'll be right back.

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what do we have on "mad" tonight. >> i wants to leave people with something positive called trex, something you make your deck with home depot and lowe's could be doing great on homes and the analog is azek buy azek if you want to know what to make. >> boeing a 737 maorr omx defr ryanair. the ceo's of both companies. keep it here harnessing data-driven insights and boundless curiosity. we dissect the market from every angle. helping to build portfolios that redefine what's possible. because investing isn't one size fits all.

allspring. purposefully divergent.

. good tuesday morning welcome to another hour of "squawk on the street. i'm sara eisen with david faber live for you as always at post nine of the new york stock exchange carl has the morning off we have a big interview with the ceos of boeing and ryanair on the news only two sectors positive right now, health care and communication services everybody else is weaker

financials at the bottom of the market with materials, which are down about 1%. the dow remains higher but barely with the nasdaq down 0.4% as far as the dow's outside strength, unc, boeing, mcdonald's and salesforce. three big movers we're watching for you. palantirs surging. more on those results in a moment paypal in the opposite direction despite raising full-year revenue expectations wall street focused on paypal's operating margin forecast 25 basis points he lower than the prior outlook. western digital falling, despite beating estimates. that said, reporting a quarter revenue decline across its cloud, client, and consumer markets. stock down 4%. >> washington, d.c., will be a key focus today as president biden is set to host house speaker kevin mccarthy along with other congressional leaders

at the white house they will be discussing the debt ceiling, possible spending cuts, the republican leader would like of course, this all as the potential deadline is as soon as june 1st that we may default on the debt according to the treasury secretary you spoke to yesterday. did she have anything important to tell us >> she went farther than ever of warning of the catastrophic damage, the tremendous, her words, not mine, impact on the financial markets and the economy if we can't get a deal done, and how she set up the meeting today, she said there's still a really big gap between the administration and the republicans. listen. >> clearly there's a very big gap between where the president is and where the republicans are. the president set out a detailed budget in that budget he invests in

america, cuts wasteful and inefficient spending and lowers deficits over ten years by $3 trillion but his -- and so -- he and i regard it as a fiscally responsible proposal the republicans have very different ideas. >> different ideas but different ideas of when to do this which is the problem the president doesn't want to negotiate spending cuts over the debt ceiling because he says that holds america hostage at gunpoint that's the other phrase they're using. and the republicans want to have a conversation about cutting spending and fiscal responsibility the president wants to do it around the budget. >> the republicans feel like they have leverage right now. >> correct the market is getting worried. we're looking at the 5-year cds, credit default swaps for u.s. government debt, that spread is wider than in 2011 the last time we came close to breaching the debt ceiling and defaulting.

there's worry that it might not happen this time you look at the 1 month t billions we're at the highest levels since 2001. again, higher than 2011. that's a chart from morgan stanley which shows five-year spread wider than 2011. >> we're going to be following closely whatever comes out of the meetings today there's not a lot expected to come out in terms of it being substantive progress but a lot of talk about the 14th amendment now that we will just continue to go on paying our bills and let's see what happens or that you get this punted to the fall at least. there are benefits for the republicans perhaps in doing that, that you consolidate this discussion around debt ceiling and the budget at the same time. >> sure. if we fget there. when i talk to secretary yellen she's not talking about the 14th amendment. she said there are no good options here and i said what does it look like? do the bond holders get

prioritized or the pensioners get prioritized and she said i don't want to go there, but the president, she did say, would have to make tough decisions when it comes to prioritizing who gets paid and in that event. so what happens to the money market funds how many trillions of dollars are in the money market funds right now in the short-term treasurys because they're getting paid high yields and it's coming out of their bank deposits to me, that is a serious question, right f we have a technical default. >> we've never seen it before and have no idea what to expect. >> we don't have any idea. hasn't happened in the history no historical precedent for this what's interesting, everyone expects a deal ultimately. it has to be a deal. >> everybody says that a guest earlier on "squawk box," interviewed him at milken, saying the same thing, i can't imagine it, but seems like the risk is going up, but still seems impossible. >> right jamie dimon weighing in this

morning. also i mean, i think people are more worried about it than unusual, but we still have three weeks and the fact is, it's coming at a difficult time for the economy already where we're wondering how much we're slowing, is inflation really coming down. >> here's what jamie had to say. >> get rid of the debt ceiling in his opinion to your point, we got some other things that you were waiting for. i think this opinion survey of the lending officers. >> the sleuths. >> the sleuths. >> senior loan officer survey. >> the headline, it wasn't as bad as it could have been in terms of we knew there was credit tightening and we saw an increase in those that were tightening standards, but it wasn't extreme in terms of that sense. what was a little more surprising is the demand for loans came down sharply. i think if you add it all together, there was not a real market reaction and -- because it wasn't clear that this kind of report would say to the fed, hey, we've got to pause or start cutting. it wasn't like, you know,

lending credit is going to tighten overwhelmingly where it would be a huge problem and that's the debate right now. what should the fed do with all this we're not seeing a severe credit crisis, although credit crunch. >> you brought us numbers that show it's not as significant as at least some had feared it might be at this point. >> we haven't seen it in the data as super severe it's not great for the outlook we know that's -- when i asked secretary yellen about that data she said the fed has been tightening policy in part to do this, and it's been happening even before the bank failures and this is helpful in that it is going to slow down the economy and it is going to slow down inflation she says we can still get away with a soft landing. listen to what the secretary says about the economy >> i believe there is a path to bring inflation down in the context of continued strong labor market i still think that path is there, but, of course, there are

risks. the things you cited are risks, and can't rule out a recession, but i don't think that's the most likely path, and i'm hoping that we will be on the good path to a so-called soft landing. >> look, i'll say this, she's been right so far because people have been calling for recession ever since the fed started tightening in march '22 and we haven't seen that yet and the labor market has been strong i pointed to the weak data from the bank lending increasing signs that they're tightening standards and but look at the labor market 3.4% unemployment, hard to argue with that. wages are rising even faster than expected. a predicament for the fed but why this whole soft landing picture has been so far the story. >> yeah. >> it's amazing. the other thing i wanted to say, by the way. >> please. >> it was pretty remarkable to hear a treasury secretary threaten the reserve status of the u.s. dollar and she did. i asked her about it -

>> i know you did. >> she did not shy away. >> from saying it could put it in jeopardy. >> if we get credit downgrades in the event of default, and there are serious questions about what she called the u.s. as a deadbeat nation that can't pay our bills, that could threaten the reserve status. that's a political issue and i don't think she said that lightly. >> yeah. >> so just another "the exchange" watch out for there as these lawmakers get ready to meet at 4:00 p.m. >> lot to watch. meanwhile a lot of results to get to across the corporate space. frank and kristina partsinevelos have been tracking the action in a few movers frank, start with you as palantir shares surged double digits this morning. >> yeah. good morning, sara palantir with beats, raised gans and promised full-year profitability for the very first time, but really the key here were the comments on a.i. demand for enterprises, specifically in insurance, manufacturing and supply chain companies and even more specifically, they're looking to improve

margins. we're seeing that year of efficiency go beyond tech. deeper in the palantir numbers, commercial revenue up 15%. u.s. commercial revenue jumping 26%. ceo alex karp saying palantir is seeing surging demand for its a.i. platform, and he gave interesting color just on how intense the battle for an a.i. advantage really is. >> if you weald these technologies correctly, safely and securely, meaning extract the value in the context of your own enterprise, you have a weapon that will allow you to win, that will scare your the economy tors and adversaries. >> so of course, palantir known for its work with the u.s. military, seeing references there. i spoke with alex karp individually about the potential regulatory impact on palantir's business and said in part, there is real reason for concern about the a.i. journey however, our business is built on the moral imperative that comes from government regulation and human oversight. i spoke to analysts about this

and that attitude and palantir's work with the government, could give it an advantage in the face of potential regulation that could be on the horizon when it comes to a.i back to you. >> thank you >> let's get to christina with more on at least two names under pressure this morning. skyworks and paypal. >> start with skyworks that produce wireless clips for apple devices, and its guidance fell below expectations the stock is plunging. skyworks management was asked twice on the earnings call yesterday if its largest customer, they never ask directly, but if apple was to blame for the miss valid question considering apple is 64% of skyworks' revenue. skyworks isn't blaming apple a response that runs counter to qualcomm's inventory issues. apple front loaded orders late last year and that's coming back to haunt qualcomm in the back half of this year. skyworks isn't blaming apple and

qualcomm is. one thing, china's android market isn't recovering as fast as expected. skyworks says customers are stuck with an excessive number of phones that they don't need to buy more chips. microchip makes analog chips their ceo on your show yesterday and told carl china's recovery is also muted and seeing that too. and now i'm going to make a huge pivot but a stock mover is payments processer paypal. i spoke to the ceo yesterday the stock down 11% even though the company raised its full-year eps, earnings per share. what i noticed three red flags active accounts decline quarter over quarter for the first time since 2014 the second point reduction in its operating margins for the second half of the year. the cost cutting can only go so far. lastly a drop in unbranded sales, which really drives the majority of growth not a good thing last but not least on the call the company said they're still in the hunt for a new ceo. the current one set to retire by

year end they don't have a name yet. >> yeah. it's weird it's a $75 billion company and no successor, isn't it >> very weird. they hired a search firm and they have all the qualities out there, they're looking how can you have forward guidance and statements when you don't a ceo that's going to replace you in a few months. >> yeah. christina, that's an issue. as we head to break, our road map for the hour, wall street closely watching d.c.'s debt limit shutdown. one strategist says we've seen this before. >> is commercial real estate the next shoe to drop? a read from the ground with the head of collier's u.s. business. >> a cnbc exclusive. the ceos of boeing and ryanair after the break on the heels of a massive new 737 max order. dow has joined the s&p and nasdaq in negative territory down 26. big show still ahead ahhh! icy hot pro starts working instantly.

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sorry. mike on the tie didn't stay on they said tape and i didn't accept the offer welcome back to "squawk on the street." boeing landing a massive ryanair order. joining us is phil lebeau who has two special guests phil >> thank you, david. here with michael o'leary, ceo of ryanair, dave calhoun, ceo of bogey. huge order up to 300737 max

tens, list price over $40 billion, but discounts were agreed to. >> i think it's something we've been discussing the last 18 months we did a follow on order during covid with boeing. at that stage we want to do a follow on order for max 10s, challenged getting a reasonable pricing deal out of this guy on my left-hand side. we met in january and we've gotten the deal in the space of less than two months and creates an opportunity for ryanair now to grow to 300 million passengers over the next decade in europe, phased delivery of great aircraft that are significantly better performers. they'll carry 20% more passenger, burn 20% less fuel and create about 10,000 new jobs across europe for pilots, engineers where we couldn't be more excited have to go home and find way to pay for them. >> dave, from your perspective, the significance it's the max 10, not taking delivery until 27 this is the stretch version, the most -- not most important but

significantly important aircraft. >> critical step forward for us. there's erobust demand for the 10 the best thing about this order is that it's ryanair, it's michael. they're a tough test always have been, always will be they run a low-cost airline and they satisfy their customers each and every day to a greater extent than any of the others. so for us to continue to play forward in this model, in this model, is probably the most important part of the news. >> you mentioned they're a tough customer michael, let's be honest, your candid comments about boeing over the years, this goes beyond what people usually hear publicly from ceos do you regret any of what you said in the past about boeing? i mean at one point you said these guys need to get their you know what together and suggested the management had no clue what they were doing? do you regret those comment? >> i don't think so.

look, at a time, we were -- i think it reflected the frustration we felt with delivery delays. we recovered strongly in europe post-covid i think we didn't really appreciate the challenge not so much for boeing, but the supply chain issues i make mistakes on a frequent basis and shoot my mouth off the good news today, i used it, it's like marriage, we have occasional fights, kiss and make up, and i pay up and buy more brilliantly manufactured aircraft that are going to save me a fortune in the next couple years. >> speaking of rifts, you were going to say something. >> i have to comment i wanted to be as clear as i can, michael was out there, he was clear, his emotions showed that is an incredibly important message for the boeing company to hear, me to hear, our team in seat toll hear, workers to hear and then what we do, we get down and work at it, we work at it. we know we have supply chain challenges we're not afraid of them

we're going to get into them we go through them michael sees it transparentally and clearly. for him to express himself is fine with us it is fine. >> you realize there's a good chance, i shouldn't say good chance, but a chance, that you will not be able to hit the production targets you've set out there given the supply chain challenges that are out there. how confident are you that you will be able to a, start production, say in the 24-25 timeframe on the max 10 and the first dli deliveries in 27 >> when we sat down with our investor base and described the future we talked about a constraint supply chain through this calendar year and next calendar year and we would approach stability as we completed 24 everything we've done with our customers, everything we've tdoe on the production announcements have been built around the supply chain constraints we see and know and manage forward. we're as confident as we can be.

we are not gambling that the supply chain is going to fix itself in some miracle fashion that will not happen this will be slow, steady progress and we're prague it. >> let me ask each of you, the debt ceiling talks f if they ca' come to an agreement by june 1st how much damage does that do to the economy, to boeing, major companies not just here but around the world. >> we can all speculate it's enormous the only point about our industry is we build big capital assets that have to be underwritten with financing arrangements, et cetera. if that market begins to fray like all other major capital markets, we get in trouble without a doubt. it's just a question of where we are in that tiering of impact. so let's just hope we never get there. >> michael, from your perspective, european perspective. >> you know, it's incumbent to

stay out of these political issues in the states i think our focus this morning was completing this order with boeing they've been great partners for ryanair over the past 30 years we couldn't have done it without great boeing aircraft and the new aircraft they're producing now, the a-200 and the max 10s will transform our industry. >> how damaging would violating the debt ceiling or, you know, having a default, how much would that hurt economies in europe? >> i think speaking as an overseas observer we've been there before this has happened a couple times before under clinton, i think obama. it's happened before the state has a remarkable capacity to bounce back quickly and hope it gets solved before the deadline fit doesn't i'm sure it gets solved pretty quickly thereafter. >> thank you the ceo of ryan air, dave calhoun, ceo of boeing, back to you. >> thank you. >> great thank you very much. by the way, michael is not shy on european politics i'll never forget brexit day when he came by the set in a half british flag and half

european flag to advocate against brexit nothing on the debt ceiling. phil lebeau with boeing which is a winner today adding the most to the dow even though the dow is under pressure it's on top right now. still ahead, cnbc's disrupter 50 list just out. find out who took the top spot the big trend right now after the break, plus check out shares of under armour. under pressure the company out, beat on the top and bottom lines full-year outlook a big short. one of the problems in the report were margins lower than wall street expected signaling the company is doing promotions how it's driving sales growth. first time we've heard from the brand new ceo. she came from marriott about three months into the job and characterized the full year '24 as a year of building the brand, prioritizing amplifying global brand heat, talked up steph curry in particular "squawk on the street" will be right back

cnbc's annual disrupter 50

list is out and no surprise, a.i. names, they are at the top of the list. julia boorstin joins us. she has the details. julia? >> well, david, the big trend this year is a.i. and the number one company on this year's disrupter 50 list is openai which is reportedly valued at nearly $30 billion the start-up reached 100 million users two months after its launch and back in december it said it's on pace to generate $200 million this year from premium subscriptions and corporate licensing fees and $1 billion in revenue by next year. openai drew an investment from partner microsoft. >> they have done a lot to help us in addition to investing, help us like codesign and cocreate the super computers we train on, help us work together on product, help get the technology out to a lot of people you know, when we kind of jumped into this i wasn't sure i was going to go. it's difficult at best to do a

big partnership with a big company, but they have been on the whole a wonderful partner to us and we're grateful. >> openai's rise represents a tech shift of the 50 companies on the list, 21 told us a.i. is critically important to more than half of their revenue and five of the top ten companies feature key use of a.i this, of course, reflects a surge in funding in this space again raytive a.i. focused startups raised $1.7 billion in the first quarter of the year. that's up from $800 million in q1 of last year. there were another $11 million of a.i. deals announced in the quarter but not completed. this all according to pitch book notably, three of the other companies in the top five also leverage a.i. in key ways. number two is fin tech company brexit partnering with a.i canva struck a deal to bring

chatgpt tools to consumers and relativity space uses it for 3d printed rockets. in the next hour i'll interview the ceo of chime that came in at 15 on the list, and i'm sure i'll be talking to him about a.i. as well back over to you. >> julia, it's david openai has the interesting structure. a lot of it is still a 501 c 3 and then the profitable or the for profit business. makes for an interesting relationship you know, i don't know how transparent they are in terms of how much has to go back to the 501 c 3, certain things are capped in terms of where people invest and what they can expect over time in terms of a return on their investment. >> well, what's interesting is this is an unusual structure and they did cap the returns of those early investors at 100 x their return still pretty meaningful returns, and it seems based on the growth trajectory so far they will get that return. they're talking about changing the caps for later investors in this company the idea is they understand that

a.i. is going to be a utility and they almost want to treat it as such. but it was interesting talking to sam altman and that's where that interview was from, he talked about how they are open to the idea of monetizing this in different ways but for now they have the premium subscription for consumers, free version, but they're working with a range of companies to offer them their tools as well so certainly a company that wants to make money here but also understanding that their investors are not going to make a thousand x returns they want to make sure that caps out at 100 x. >> we hear about how the flood of venture capital money has dried up and we're seeing markdowns of private companies are these a.i. darlings disrupters an exception? >> yes absolutely there's still a ton of money flowing into a.i this is a space that has been resistant and resilient to that overall vc decline company areas of strengths and

bright spots but a.i. is number one. everyone wants to invest in a.i. right now. >> secular growth maybe. thank you. julia boorstin looking forward to chime next hour. up next, big shakeup at the top of wheels up we'll explain after the break. ♪ (upbeat music) ♪

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it's what they live to do... trinet serves small and medium sized businesses... so they can do more of what matters. benefits. payroll. compliance. trinet. people matter. hello. i'm contessa brewer. former pakistani prime minister imran khan was arrested. they pushed khan into an armored vehicle drove him away the political leader was ousted from power last april after a no confidence vote by opposition lawmakers alleging corruption and unconstitutional actions

today marks national fentanyl awareness day to shed light on the deadly drug according to the cdc more than 107,000 people in the u.s. died of drug overdose and drug poisonings between january 2021 and january 2022 with 67% involving synthetic opioids. >> susan sarandon arrested in albany in, taking part in a fair wage rally, part of the demonstration calling for full minimum wages to be paid to restaurant workers state police say sa ran dan was one of eight arrested for disorderly conduct after the protesters moved into the concourse of the capitol sara >> thank you wheels up shares have lost 95% of their value since the public debut of july of 2021 time's up for its ceo and founder. robert frank following that story and joins us with the latest robert >> sara, wheels up founder and

ceo kenny dichter stepping down immediately. the cfo todd smith is going to be the interim ceo as they look for some kind of permanent replacement. the question now is whether they can sustain these big losses and cash burn or they're going to have to restructure and consider a bankruptcy those shares as you mentioned down 95% from the ipo in 2021. this was $2 billion company and now the market cap under 130 million. delta is one of those shareholders and they have a 20% stake in wheels up they burned through $300 million in cash last year. this morning reported a wider than expected loss of $101 million. that as charter demand is falling. analysts expect the company to burn through another 100 to $300 million in cash this year. wheels up has about 12,000 members that have about a billion worth of prepaid jet cards or flights they haven't

taken yet. warren buffet, of course, berkshire hathaway owns netjets and said over the weekend that wheels up has 12,600 people who have given them over a billion dollars on prepaid cards and i think there's a good chance some people are going to be disappointed later on. david, you know, wheels up made such a huge splash when it launched in 2013 serena williams and tom brady, the highest profile executive in the jet industry, interesting where this goes and ripples through companies like netjets, vistajet, flexjet, all players. >> robert, being disappointed as buffet says means what if they go bankrupt they become junior creditors if you own a card >> people tell me that those cards and those people that paid the billion in flights they haven't taken they would be unsecured creditors and they would lose that money. we saw that with jetsmart and

other companies that have gone under where when you prepay the cards if the company goes under you're among the last to be paid if there's money left. bankruptcy, you know, very early on and whether that's going to be necessary right now what they're trying to do now is trim costs, trim operations, refocus the fleet, have a new management, maybe find a new interim ceo and get this profitable again as they say next year. >> something to keep in mind if you're buying time thank you. robert frank. we're an hour into the trading day. about an hour and seven minutes. let's get over to bob pisani you're next to me. >> here we are. >> what's caught your attention. >> great jacket. >> thank you. >> don't look better than me it's annoying. hostage to the debt negotiations that's annoying as well. brilliant interview with yellen yesterday. >> thank you. >> we got as much out of her as you can expect the important thing, everyone is passing around 2011, the chart of 2011. remember everybody, we have it, put it up, august 2011, congress

increased the ceiling but two days before the treasury said this is it and we had a real problem. we had a debt downgrade. this is 2011 so that's the left side there. we went from 1325 to 1120 on the s&p, on the debt negotiations. this is real and the market has m memory saying these guys look like they're going to push it to the wall again it's frustrating as a market reporter because we're hostage here so more of the market is what you got here all 11 sectors down at the open. it's been defensive for a long time consumer staples hold up tech is a big cap tech is holding up and everything else is nothing no bids in banks no bids in cyclicals like energy and material stocks. new lows in material stocks today here the consumer, the new high list is all consumer stocks it's defense we've been doing this for days now. at or near pepsi, hershey, general mills. you get the new idea

a smattering of other things there, some health care stocks like cardinal health are doing okay, lily is doing okay, pulte, lennar, home builders have been doing okay this is a pretty narrow group for the leadership i got a lot of e-mails, you were asking about the market capitalization of apple, crazy -- >> asking about the -- germany i was shocked that germany's market cap, given the size of its economy versus the other countries is so low. >> this is my friend ben carlson. excellent numbers here $2.6 trillion here the uk market is $2.6 trillion 595 companies in the uk market by the way germany has always been smaller than france and the uk its market cap always smaller and p/e ratio has been lower as well. >> given the enormous value they have. real quick, when did that downdraft in the market take place prior to those two days

that it finally got settled in 2011 we haven't seen it that much yet, have we >> it started dropping right when they got against the wall, and it started dropping as we were going into the negotiations and then it was two days, they -- congress increased the debt ceiling two days before the drop dead date before we would go into default. then the market kept dropping there and then they had the debt downgrade, s&p did, the debt downgraded, that was just, you know, right after that, within a couple days after that so the market has this memory. that's the problem it's sitting there, weighing on it, waiting for this to get resolved i think we do better if we deal with that and then inflation issues the bigger macro issues we want to deal with, rather than this. >> sometimes it's necessary to bring a deal. >> great interview with yellen. >> you know, she's worried is my takeaway she's worried about this, what you said thanks bob pisani let's continue the conversation with interactive

broker's chief strategist steve sosnick. are you talking about telling your clients to position themselves for a mistake here? >> i, sara you know, we can't avoid talking about this it's the topic number one in pretty much every discussion i have and the question is, you know, how defensive should we get? the chart that bob showed is what's in a lot of more veteran traders minds or veteran investors minds and newer investors are not really cognizant of it. you know the other issue we have is, we've seen this movie before it can get suspenseful and as it did in 2021, it really was quite a sus senseful movie, but it always ends with a happy ending or happyish by washington standards, and, so i think people are a little reluctant to get out in front of this issue with the understanding that it usually gets fixed we'll see what happens this time. >> the complicating factor here,

steve, is the backdrop we are in, digesting more than 500 basis points of tightening in a short time period, historically aggressive tightening. still too high inflation that remains sticky in some parts of the economy and an economy that's slowing, where confidence is getting lost, small business survey shows another drop in confidence add it up, as stimulus is fading, it's a tough backdrop. what do you do >> sara, this is why what investors are doing is moving towards defensive consumer oriented stocks. we learned from earnings season among the few companies who can pass along price increases are the hershey, mcdonald's, kimberly clark, et cetera. people have been moving into that regard and removes you a little bit from the political intrigue that we're seeing one of the other things that i find mystifying is vix stuck here with a 17 handle. we actually got down to a 15 handle at the beginning of last week and then quickly rose to a

21 on thursday so i think that's an interesting idea for investors is vol tilt right now is not expensive and volatility can get expensive more quickly than you can purchase it. and so that's one of the things that i think investors should be considering right now if they are concerned about the debt talks. >> buy the vix because you think everyone is too complacent. >> vix or vix equivalent, yeah. >> scott, thank you very much. appreciate it. steve sosnick. >> still ahead, credit crunch risks and commercial real estate remain significant worries for the federal reserve. we're going to get a read from one of the nation's largest commercial real estate brokerages right after the break.

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banks reporting tighter standards and weaker demand for

commercial real estate in the fed senior loan officer survey, lenders warn commercial property could be another pain point for the economy. joining us to discuss that, u.s. ceo gill borerack, the largest diversified global real estate services firms gill, good to have you when it comes to the capital markets right now and/or as well the banking industry, what are you seeing in terms of a willingness to step up with new loans or refinancing of existing loans for commercial properties? >> yeah, good morning. look, right now i think we're at a point where there's an imbalance between buyers and sellers and that imbalance is caused by the fact that interest rates have gone up so precipitously. so we really have mostly a holding pattern, difficult to raise capital right now, but i think as we've seen in past cycles, that, you know, stands ready to dissipate, i think in

very short order. >>what breaks the logjam lower prices >> i think actually if the fed is done raising interest rates, which seems like it could be, that seems what they signaled, we could get price discovery at least we would know what cost of capital is and debt is and buyers and sellers would reach equilibrium in short order after that we have to wait for the next fed move. >> what about the bank failures after that have you seen a it >>ble -- seen a knitble difference >> that causes tighter credit across the economy and in commercial real estate as well on the other hand, that tighter credit does some of the work that the fed might otherwise have had to do in terms of normalizing pricing. it hasn't been precipitous or pervasive, but, of course, there's been an impact from the

regional bank failures. >> what are your expectations when it comes to price i mean, you do have some buildings out there that are far from fully occupied, many, in fact, and if they're not buildings, doesn't seem like there's a lot of demand or future for them, what's going to happen >> there's always a price and the question is, at what price is a seller willing to sell and/or invest to convert buildings that can be converted which it's broadly known and coming to light that not all of them can be. where you have class a buildings with good amenities, new buildings, it seems to be that there's high demand and that rents are going to be quite stable and maybe even rising for the best buildings so it is going to be a tale of two cities in terms of the class of assets. >> how does that impact you and your product portfolio in terms of exposures and where the bright spots are and where you

are investing if anywhere? >> thankfully our main business that i run is really brokering of buildings and brokering of facilities and we've got a diversified platform including industrial retail, multifamily, and we do leasing, management and valuations a well so, like as always the case, the more diversified you are, the more protected you are that's not to say that we're not feeling the fact that capital markets right now is in a doldrums >> appreciate your time. thank you. >> thank you for having me. >> sara, we are looking forward to your chat with new york fed president john williams, this afternoon at the economic club of new york city you won't be doing the 11:00 >> i'm heading out to midtown to have a conversation with him. >> there's no big data on the calendar today tomorrow is the cpi, big inflation number important to get this fed speak because highest ranking and one

of the first post-fed meeting last week. john williams gets a vote at every meeting. do they intend to signal a pause? how strongly do they feel about that pause why is the market still banking on cuts when they continue to say there are no cuts. there's a lot of questions about him for the outlook, and not to mention the debt ceiling. >> and also tightening of lending standards. last time we had him, he said he wasn't really seeing it. >> he gave a speech -- >> and then i had scott reckler on saying he disagrees with him. >> he made headlines saying he doesn't see a big impact we're waiting, there is an impact as we just saw in the senior loan officer survey, it's not an extreme credit crunch as some of the worst fears have been. doesn't mean we haven't seen it yet. >> one more quick break and then we're back ♪

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let's get over to dom chu with some market movers we may have missed. >> some of the other notable market movers so far this early trade have revolved around earnings reports we've gotten. let's get check on shares of electric vehicle maker fisker. it reported a bigger than expected loss this past quarter and cut its production guidance for the full year so there's a lot of focus on the new ocean suv model so fisker down 5.75% keep an eye on building products maker trex the company's best known for namesake composite wood and decking materials. it reported better than expected quarterly results. it also issued better than expected current quarter guidance and approved a new stock buyback program. building products, maybe a read on the housing sector. up 9%.

we'll end on shares of mckesson, higher to the tune of 8% after the health care and products company beat quarterly profit and revenue forecast thanks to strength in the pharmaceutical group in u.s. and europe mckesson, one of the better sectors we've seen ones to watch. i'll send things back to you. >> yeah, i'm keeping an eye on shares of lieu lucid going to deliver around 10,000 vehicles had been a point at which they planned to deliver more than that. keeping a close eye on the regional banking index, the kre, a daily ritual at this point, down about 1.3%. you can see it right there sara will be speaking with new york fed president john williams it's not going to be live, but she will share what it is he tells her during their sitdown at the new york economic club a bit later this afternoon

certainly some of that conversation will revolve around the health of the regional banks and what, if anything, is happening in terms of credit tightening that we talk about so often. that's going to do it for us right here on "squawk on the street." got another big hour coming your way right after this good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that?

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good tuesday morning i'm melissa lee with mike santoli. setting the agenda today, debt ceiling drama. they weigh in ahead of biden's meeting with mccarthy today. the ceo of coty beauty is with us. and later, cnbc's annual disrupter 50 list revealed the ceo of chime, number 15 this year, will join us this hour. markets sitting on modest losses so far. you see the dow down marginally and the s&p 500 off by one-third of 1%. nasdaq with sloppy results from paypal andwo