estimates point to two back-to-back negative gdp quarters for q3 and q4 >> the sun came up after the cpi, actually, it was already up, but markets are taking it pretty well. mona, thanks appreciate it. andrew, there you are. interesting. >> nice job, andrew. >> yeah. that was good. worth it we will see everyone some day. make sure you join us tomorrow that's "squawk on the street" next ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. the market does appreciate cpi today. the june rate hike, odds fall to about 10% amid the flurry of corporate results today and tonight. our road map begins with the macro picture. cpi better than feared and no d.c. deal yet as a debt default

looms. plus airbnb's cautious outlook. shares are slumping as the company forecasts fewer bookings and lower prices in the second quarter. and we are keeping a close eye on the evs rivian's losses shrink, texas tesla output hits 5,000 a week, and byd cutting prices on its top-selling sedans let's begin with the market reaction to cpi. 4.9%, year on year on headline used cars up for the first time in several months, up 4% >> i've been struggling over that new cars are both in abundance, and getting much better credit terms, and so i don't really -- if you wanted to look at what i think may would be, that's going to be down i also think that -- i've begun to take a lot of issue with the compilation of those things. i do a lot of work on apparel, going back to matt on this from jpmorgan, apparel is up in price, and yet there is no single piece of clothing that's up in price, so how did they get

there? fuel is barely down, and yet gasoline is down more than $1.25 from a year ago. so, even the areas that are -- with the exception of rent -- that are up are, i think, poorly tabulated. and honestly, you can say that there's -- that they're just wrong all the time, so what? but i just think this is a very, very positive number for the fed and what they're doing kind of flies in the face of what mr. williams said yesterday. this is, david, the beginning of what i find to be an almost universal categorical decline in every single price >> sara was with williams yesterday in midtown, and i'm told we actually have some sound from that interview. we should take a listen, because he perhaps had a somewhat different view >> yes >> first of all, we haven't said we're done raising rates what we're signaling is we're going to make sure that we

achieve our goals, and we're going to assess what's happening in the economy and make the decisions based on that data and if additional policy firming is appropriate, then we'll do that so, i do not see, in my baseline forecast, any reason to cut interest rates this year >> no cuts this year, according to him >> maybe the data are irrelevant >> what do you mean? >> well, if you listen to stan druckenmiller, he would say, look, they've inflated us to the point where this doesn't really matter it's just a catastrophic development. now, if you go back to 2022, he said the same thing. he said there would be a big bubble we do have a bubble. these numbers may not be convincing enough to the fed, which parts to see more than just a month or two, but carl, the fact is that almost every calculation is incorrect >> you don't trust the data? >> the data is empirically wrong. >> cleveland fed was even

hotter >> okay, look, you have -- i do a lot of work with utilities i've spoken to utilities for 40 million people in this country, and utilities shows barely down, but natural gas has been cut in half so, i mean, i don't know how i -- i'm stuck with what i do. i had exxon the other day, american electric power, very big transmission companies they're not getting any numbers like this. we can just say that -- i mean, these numbers are not put together by salesforce they're not put together by google they're put together by a group of people who are tabulating, making a lot of phone calls. well, i make a lot of phone calls. i make better phone calls. >> you make better phone calls than the staff -- really >> that's good >> yeah, i do. >> all in one day? >> no. i just do nothing but make these. i've made my life completely miserable in order to be able to do better than they do >> i have witnessed you working when you are not onset and it is

a thing to behold. it never ends. this is their job, their full-time job. you're busy talking to jason what's-his-name about getting a -- getting a line on the debt ceiling. you're talking to brokers in new mexico about land there. you're not focused solely on this that's what they are >> don't forget his spirits brand. >> yes, and the selling mezcal >> i'm talking to amazon i'm talking to walmart i'm talking to target. i'm talking to kohl's, macy's, tjx, burlington. i don't know who am i not talking to? tell me who i'm not talking to i'll talk to them too. >> the guy who runs the bodega down the street. >> none of those is telling me that apparel is up i talked to ollie's. i don't know who else to talk to i try to put together a pastiche if not a mosaic of prices. >> give us your conclusion from all the calls that you make. >> i'm saying apparel is down, and they're saying apparel is up i want to know where apparel is up i just -- tell me. i mean, you know, i'll tell you,

across the street is hermes. apparel is up. >> maybe they're overweighting the hermes data. >> lvmh is up. >> i'll tell you what's interesting that goes along with this is the b of a card spend today, total per household down 1%, and a lot of that's happening at the high end where pay growth is not what it's been at the low end >> look, david, i clearly speak in hubris, but what i am saying is that you have to believe in the druckenmiller, you have to believe stan druckenmiller's view, which is that it's all a bubble and these numbers are just liliputian. if you believe these numbers are -- if you're data dependent, you're struggling over how tight you should be. you're winning >> you mentioned stan druckenmiller. obviously, well known originally way back when from working with george soros at quantum, but

clearly a great investor in his own right or at least one we want to listen to. >> sure. >> sometimes we say great investors, billionaire investors. really, their only talent is actually raising money and trailing the s&p that is the case for so many so many. >> i went through his delivering alpha presentations. >> yes >> i would go so far as to saying he is a broken record, but that the broken record's right. but here's the issue and this is the case with many a strategist from the top or, you know, practitioner he's right inflation's been terrible, but you've made a killing if you owned the right stocks >> right >> so, it doesn't necessarily -- it's like, i took -- i studied galbraith at harvard, because i'm really smart everything they said was correct and i invested the bejesus during the period, and i made a lot of money, but i was wrong in making the money, because they told me i was wrong. but in the end, i didn't have any debt when i finished

so, why? because i chose to -- here's where i'm going. >> please. >> it's entirely possible that duck druckenmiller is absolutely right, but that doesn't have anything to do with what we do for a living >> it may not. it's always worth listening to him. he does tend toward being scary when he talks. this is what he had to say yesterday. >> i'm being problematic >> at the conference, he was talking here, really, about the banking crisis and his continued concerns for what may happen take a listen. >> before we even get into an economic contraction, many of the banks already have impaired balance sheets if you pile on losses in commercial real estate, credit card losses, the stuff that normally happens in a recession, and you take the fact that we have had this big asset bubble going into it and you take the fact that we just had the most rapid increase in interest rates from the bottom in history, i think it's just naive not to be

open-minded to something really, really bad happening again, it is not my forecast >> be open-minded to something really, really bad happening here, he's talking more about the banking industry, although saying it's not his forecast this is not specific to what you were talking about in terms of the view of inflation. >> in 2022, he was interviewed, excellent interview by our own joe, and he said, when i make a mistake, i admit that i made a mistake, i've made many mistakes well, did jay powell not do the same thing he admitted that he made a mistake. he didn't come out and say, i made a mistake, but he pivoted radically. he did what stanley wanted him to do. but stanley did not change his view he just continued to say that things were going to be bad. and i can invest in that thesis, or i can invest in nvidia, which has come up with a brand-new technology, which could radically lower the price of inflation to the corporation level. i mean, i'm looking at wendy's

today, and what did wendy's do wendy's is theoretically going to get rid of the person who speaks to you in the drive-thru because they have something that jensen huang created that speaks 28 languages and is incapable of making a mistake mcdonald's told me they want the human touch. that's terrific. the human touch is great but you know what's better than the human touch? accuracy >> getting it right every time your point being that the productivity increases that may be coming, and we heard jan talk about this from generative a.i., are going to be quite significant. >> yeah. >> therefore -- >> i think so. >> i look forward to that, especially the color -- they talked to "the journal" yesterday, and no breaks, right? they don't need lunch. >> they don't need breaks. todd took the bait here as well as michelle and nelson peltz, wendy's people they went, by the way, to

alphabet to get it done. i understand initially they may have gone to nvidia and jensen huang has got partners, so i just think for this type of thing that alphabet, maybe it's got going for it >> google io is today. we'll be watching for news for developers debt ceiling, by the way, the showdown continues the president and leaders met yesterday to discuss raising the limit as they seek to avoid a potential default as early as june, but he and speaker mccarthy do remain at an impasse. the speaker insisted on tying spending cuts to an increase officials have agreed to resume talks on friday, and more importantly, guys, the staffs will meet with even more frequency. that's lending some, i don't know, is it reassurance? probably too strong a word >> i think that the president dropped this 14.4. you look at the fourth corollary of the 14th amendment, it just says, basically, whatever the president wants to do on this, you must do. this is lauren stribe, whom i

studied with at harvard. he's a brilliant man what he did was he changed his mind from 2011 >> i referenced that the other day. >> you've got this so right. >> well, i read it, you know, i read it over the weekend >> you read the op-ed. >> yes, i did. >> i just said the president mentioned this >> right >> and what this says is, take me to court. i don't care what you say. i'm going to pay >> the president also says, we will not default he said it very specifically >> he also said he wouldn't necessarily take off the table rescinding some of the unspent covid money, so there is some stuff in the middle getting worked on. >> i can't say -- if you're an investor, and you're going to sell everything on this, i think it's a mistake i think that there's multiple ways to get around this. but i think this idea that janet yellen said that we're deadbeat nation, you know, we're a very rich nation. we obviously have too much debt. but you know, david --

>> she didn't say we are she said, we would be. >> would be a deadbeat nation. but when we compare our stock market to -- compare apple to the size of other stock markets. >> yes, bob did that yesterday, and i still continue to be surprised by the minuscule overall market capitalization of the german stock market. i can't imagine that it's that small. all their stocks trade at like six times earnings it's crazy >> what are their big component? deutsche >> siemens bayer. they got a lot of huge companies there. how could it be possible that it's half the size of apple's market cap >> it's just wrong >> i did question it, yes. but even if it's off by some, it's not off by that much. >> maybe apple is that big >> i don't know. i mean, you could buy the entire market capitalization of germany for half apple >> maybe "ted lasso" is equal to bayer. did you watch shrink >> shrinkage >> "shrinking.

>> that could be mercedes. they're buying out -- >> he liked it after four episodes, i didn't like it. >> 4.1% rate that apple's offering, how does that compare to what you get in germany >> i don't know, jim >> i rest my case. >> we know marx icus matched it >> good, i like marcus tough morning for shares of airbnb don't miss an exclusive with gm's ceo, mary barra, as we take a look at the futures and we'll get to all kinds of earnings including oxy, upstart, wynn and a lot more ♪♪ at morgan stanley, old school hard work meets bold new thinking. ♪♪ at 87 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities

and relentlessly working with you to make them real. old school grit. new world ideas. morgan stanley.

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

the hotel ceos have said they expect demand to drive prices up this summer. we want to have prices moderate. we think that's going to bring in a whole new generation of travelers to airbnb. so, ultimately, i think that, like, that's a very, very important consideration of the marketplace. the more affordable we are, just like amazon, the more affordable we are, with the wider selection, the more people will come to airbnb >> that's brian chesky on last night's earnings call. the stock has taken a hit in the premarket as the guidance overshadows a pretty good beat on revenue, bookings don't miss an interview with chesky at 11:00 a.m. eastern time they are twice as big in gross

bookings and revenue than they were pre-pandemic. >> there's a plethora of data and a story line that brian tells, and it's all positive until you get to page 15 of his letter, which says, nights and experiences booked will have an unfavorable year-over-year comparison, adjusted ebitda similar to be adjusted ebitda on a nominal basis, lower on margin basis. these are -- with another company, if i didn't like brian so much, i would call these simply disastrous. instead, i say they're suboptimal >> what happened did they explain it? >> no. >> no? >> that's why i think it might be a good interview. they didn't explain it, because everything about this is bullish until you get to their outlook >> right >> it's like this is great, this is great, this is great, but you know what? it's not really great. honestly, i found his outlook -- and i think brian is an honest, good guy, but his outlook is completely out of sync with

everything else that he says in the quarter, and it's very difficult to fathom how you could have such a negative outlook with so many things being positive so, there's a lot of things to ask in that interview. >> morgan stanley does reiterate an underweight they go to 95. certainly not backed up in wynn's results, by the way, best april in the history of the wynn las vegas. >> look, i'm so glad you mentioned this, because there's a piece that i'm working on for "mad money." some people got it right wynn uniquely bought stock in the 50s, cut the dividend when they knew they were going in trouble, husbanded their cash and is now going all out in boston, in vegas, in macao they did it totally right. airbnb did it totally wrong. and so, some managers are better, even though the wynn -- the wynn team is extraordinary that quarter was incredible. they got it right, and brian, whom i respect so much, and has been on "mad money" all the time, his outlook was just

really abysmal >> yeah. we'll talk to him at 11:00, see what that's all about. we'll get cramer's "mad dash," countdown to the opening bell take another look at futures, still in the green after that cpi came in at least no worse than feared and that 4% ar.9ye on year number getting outsized attention. ♪♪ choosing miracle-ear was a great decision. like when i decided to host family movie nights. miracle-ear made it easy. i just booked an appointment and a certified hearing care professional evaluated my hearing loss and helped me find the right device calibrated to my unique hearing needs. now i enjoy every moment. the quiet ones and the loud ones. make a sound decision. call 1-800 miracle now, and book your free hearing evaluation.

♪ ♪ all right, we get started with trading seven and a half minutes from now here's a "mad dash," by the way. let's -- twillio is the name >> when people buy -- insiders,

when they buy -- >> that's not good, jim. >> when insiders buy, you tend to think you know what they're doing. jeff lawson, who is a terrific guy and helped me learn how to code, bought $10 million worth of twilio and that was february 24th so, that caused a very big spike, because why would someone who knows his business better than anyone buy $10 million? that is not an insubstantial paint-to-tape story. well, it turned out that business was sharply worse than expected it says, "we're feeling the impact of a broader slowdown." they missed the numbers big. so, if you bought on his insider buy, what you didn't realize was that he was too bullish about his own company. >> jim, they seem to have some trouble forecasting. >> they do >> what happened there that's twice in a year now you're going to get -- >> business slowed i mean, their business slowed. they have a product -- >> this is slowed and then it -- >> then it came back >> to your point --

>> right and it was a macro story this time this time, he was a little more saying it was his fault, okay? and this time, it was the economy's fault. the one thing we know about the economy is that there is some companies are being hurt more than others by the fed tightening, and his, which i which i would have thought, his caters to small business it's really terrific you can basically get a -- build a clientele off of what he does, and i love the product, but the fact is that, well, you know, he bought a lot of stock, and it turned out to be, let's call it, a mistake. >> yes i'm enjoying making circles today. >> well, i mean, this is the -- >> that's not good, when you are buying stock up there. >> this is the problem with this market what you really wanted to buy in this market are counterintuitive you wanted to buy big industrial stocks you wanted to buy home stocks. and you wanted to get rid of the companies that were doing things that made it so small business

was doing better look at affirm, by the way, for small individuals. not that good. >> no. >> i just find that, the reason why i bring this up, things are a little harder than you think when insider are so wrong. >> we'll keep an eye on shares of twilio. opening bell about five and a half minutes from now. by the way, we're also going to have an exclusive with endeavor's ceo, ari emanuel. we'll join him he'll jo ua w nus om w.ins femitefr stay with us (funky electronic music) (narrator) breathe in. jump in. strap in. live in. join in. thrive in. if you're all in, it's all in north carolina. ranked america's top state for business.

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>> announcer: the opening bell is brought to you by nuveen, leader in income, alternatives, and responsible investing. last year, the supply chain was a real challenge now, we've really understand all of our constraints and power semiconductor is still our biggest constraint >> that's rivian's rj scaringe their guidance for the full year remains unchanged. >> going back and forth with phil lebeau who knows this industry better than anyone. they're the real one first is fisker, david i think that they're real.

rawlinson. >> lucid yesterday shares of lucid were down because of the 10,000 number they're using for deliveries this year is not what originally had been hoped for >> but these are the people who really think that you can bank on >> but the key in this industry at this point for all of these start-ups is how quickly can you get to profitability how much cash do you have? how much are you going to burn they still have $11 billion left at rivian. >> they have a lot of cash >> they raised as much as $12 billion in the ipo and a lot more on top of that. but they're burning through it too. >> right, but they're in demand. remember, amazon said they'd buy everything that they could make, and i don't know i was impresses. i think that not everybody in this business is going to be in a situation where they're going to come hat in hand. i think rivian is a winner >> interesting barclay's reiterates an overweight they do trim, they were at 28, they go to 22. we talked to them this morning

about the auto business and evs and everything else. >> well, i just know that when you have a product that you have ready buyers, that's a lot different from tesla cutting -- i mean, did tesla cut a rate today? >> there's the opening bell at the cnbc realtime exchange at the big board, it's equitable holdings, celebrating its fifth listing anniversary, and at the nasdaq, brazil-based sigma lithium. >> well, he's coming back and that's been a big win. i remember at the beginning of a lot of the conference calls, you had these angry words from elon musk saying, you should all get into the lithium business, and everybody did. and albemeyer is doing a very good job >> there's some consolidation going on amongst the lithium companies as well. >> do you think he meant the lithium business, meaning the 300 mg that you have to take before you go to bed

>> i don't >> okay. i was just trying to -- >> that's an excellent point, jim, because here we are none of the bulls believe you can really get past 4,200 and none of the bears want to press their shorts too much. >> i had carly garners on, one of my absolute favorite technicians. she says the shorts are the highest they've been in years. i think there's a druckenmiller short, and i, again, stanley's right. it just doesn't translate to that board >> okay. >> i would rather be wrong and translate to that board than be right and be a -- an economic politician i just -- i'm stuck with the four walls and the spreadsheet of american business and it ain't bad >> earnings and yields have both been working >> yes >> it's not been too destructive on either front. >> exactly the country that is bigger than germany continues to go up

>> that being apple. >> the country of apple. why don't we just call them countries? wouldn't that make it easier remember that game you would play, diplomacy? >> yes >> well, apple's moving on bulgaria right now >> it is up 33.5% this year, shares of apple. $2.7 trillion market value i mean, berkshire hathaway's position alone is so enormous, it's hard to even think about. what do they have, 900 million shares >> it just gets a bigger and bigger percentage because of the buyback, which is pretty vo voluminous, and remember, the most wistful moment of the whole call was when he admitted that he had sold some incorrectly >> nemeantime, jim, you commentd on salesforce yesterday, but 206 yesterday and that's going to lead the s&p this morning. >> i went back and forth with marc benioff yesterday, and they had a big tableau conference

it's tableau, by the way, tableau and slack versus microsoft. a lot of people feel that microsoft teams has a big edge right now, but yesterday was marc's turn to speak and he told -- he had a very compelling conference. i can show you -- david, look at this i'm showing david a picture of einstein who do they have up at microsoft? they have einstein maybe they have mozart up there. >> that's a cute little einstein they got i like that. >> that's up 55% year-to-date. >> that's not shabby >> that is not shabby. >> and remember, david, the activists caused him to focus a little more. >> they seemed to have everybody can claim victory here, i guess, because the activists all showing up last fall and through the early part of the winter, we talked so much about it, but it is willingness to attach himself to specific margin improvements of significance really fueled the stock price, jim >> victory has a thousand

fathers, yes >> this is now a more than $200 billion market value company. >> i remember i was at the dow jones and marc benioff was so happy, and i said, it's a curse. be very careful. like the old days, when you have a "sports illustrated" curse, and then it did nothing but go down, and i remember going, this is really hard so visible now, here you go >> moffett has a list of a.i. winners today, jim they name microsoft, cloudflare, crowdstrike, and intuit, among some others. >> i think that they're 1 for 4 there. look, i had matthew prince on, and cloudflare, no they struggled this quarter. crowdstrike, i prefer palo alto. they to more a.i. than crowdstrike on -- for cloud cybersecurity. but microsoft is so -- is really powerful, and we've not heard from teams in a.i., and when we

do, i think we're going to say, microsoft stock deserves to be appreciably higher, because teams is going to lead to a lot of azure growth. azure being what we really need if you're microsoft bull to increase, and it will. >> it will >> yeah. >> a.i., you know, we all laugh at it. >> i don't laugh at it what are you talking about >> i'm just saying that it's overly used. >> i don't think it can be overly used. it is going to be a seminal change in so much. you don't see me sitting here talking about crypto every other minute >> what about the metaverse. >> or the metaverse. >> don't forget -- >> i took an appropriate view. >> or spacs. >> thank you, carl but on a.i., i'm all in, man >> i came back from my pilgrimage to jensen huang two years ago, and i said the whole world is going to change we are going to sit in the fourth row of the globe theater

and watch the originals do henry iv part two. >> nobody understood what you were talking about nobody had a clue what you were talking about. >> now they're watching beyonce from denmark for 1,600 croners >> guys, i did want to get to a deal today, because i thought it was interesting for a number of reasons. syneos health is getting acquired by a pubunch of private equity firms $7.1 billion enterprise value so about $4.4 billion equity value, led by elliott the price, $43, perhaps something of a disappointment to some out there it was originally reported that this company was for sale much earlier this year, and so the price had moved up but it's a challenged company in many ways, and in fact, what i have heard from people familiar with the situation is that it was a very broad auction, meaning a lot of people came and took a look, but it wasn't an overly competitive auction, meaning very few chose to

actually bid so, a lot of pe firms may have passed elliott had been there as an activist, and they end up buying it as a -- along with patient square and veritas they've teamed up with veritas in the past, in fact on athena health why am i focused on this deal? well, first of all, we don't see that many of this size in this market at this point that said, i'm hearing there's a lot more sponsor activity than people might think, particularly in health care, but i also wanted to look, as i often like to do, at the structure of the financing for the transaction. i spent a lot of time talking in the last year of the growth of private credit but i would note it's an overequitized deal, $4 billion equity check from these firms, but you're talking about raising $3.7 billion from banks. remember them? they used to finance all these things called leveraged buyouts. and then they kind of went away and suddenly it was always blackstone or apollo or ares or

you name it coming in. well, it's banks by the way, 11 of them, which seems kind of reflective of the current environment where nobody wants to make too large a commitment remember somebody could have stepped up for this entire thing, one bank. this is 11 banks, guys including goldman and ubs and bmo and wells and jeffries and citi group and macquarie and truist go on and on here. but they're stepping up. and so this is interesting as well as for the company, jim, it's -- it's one of these companies, again, that does outsourced trial management for big pharma. it hasn't done particularly well it's had some performance challenges there's been some management turnover, some self-inflicted wounds, but there you have a deal so, the hope is they take it private, they turn things around, and then as they did with athena, they are able to come back to the market or sell it to another buyer as was the

case, because athena didn't go public, for a much higher price. >> for trials? that is one of the most competitive, i would say, miserable markets in the world you can pick different companies and get lower price for trials like you've never been able to do >> and that may be one reason why these guys have suffered >> i cannot believe that anyone would want to be in that business >> and/or you also have to be pristine, because pfizer or merck, they're not going to want to deal with you if there's any blemishes on your record of conducting a trial >> the fda is a kiss of death. >> i would point out, carl, center view did this auction i've never seen a firm dominate one area like center view has in banking when it comes to selling biotechnology or pharma companies. i think they've done over 40 deals since 2019 of over a billion. their next eight competitors don't add up to that number. >> young people that i deal with, holy cow, that's where they want to work. over and over and over again

>> yeah. so, good call. >> good stuff. >> they got that going for them. jim, what do you make of upstart, some of these names that are kissing the 200-day for the first time in months >> well, they performed so well in the interview this morning on "squawk box. truly monumental how well they're doing. and they're doing it in cybersecurity. they're not doing it in content management that's important content management has become a difficult game they're up against cloudflare, but their cybersecurity was monstrous and i really like that affirm -- i happen to think affirm's doing a good job. >> and upstart too >> upstart is a short squeeze. >> squeeze >> yeah, they just did better. i thought affirm did better and people didn't like it. i think they're wrong. these were all good. but akamai in particular was really great for cyber, which was a very good read-through, by the way, for palo alto networks and then yesterday, palantir was

commercial, so i thought all three were good. they're probably -- i don't know where upstart is right now, but i really felt that upstart got a bad break in terms of the narrative, because max is doing everything he can to become more profitable, as is upstart, and they liked it with upstart, and they didn't like it with affirm for heaven's sake. >> some of the guidance there, a lot of narrower than expected losses this morning. we're seeing a lot of that speaking of read-throughs, people wanted to use six flags as a read-through to disney tonight. is that overdoing it >> yeah. i mean, six flags, they don't have a -- do they have a streaming -- >> they have not gotten into the streaming business >> the streaming business is netflix. the comparisons are always so -- remember when we heard comparisons were odious when wherp when we were growing up? it's not in this case. bob iger has to give us a road map that says the losses will diminish and we're going to stick by our projection.

my charitable trust owns it. i feel very much that he can do that but the costs have to come out it makes you wonder exactly how great netflix really is. rather remarkable company. >> all right david has left the set he's going to talk some endeavor with ari emanuel hey, david >> that's right. shares of endeavor this morning, slightly lower, really kind of let's call it sort of even, this following the company's first quarter earnings, which were boosted by its sports properties, including the ufc and professional bull riders endeavor issued its first quarterly dividend joining me now in a cnbc exclusive is endeavor ceo ari emanuel. good to have you here. how are you? are you good, feeling good about where the company is you've got a lot of different things going on, chief amongst them the wwe deal, which we'll talk about how was the quarter? >> quarter, i thought, was incredible we decided to do a stock

buyback, a dividend. >> why'd you decide to do a stock buyback? >> we had just sold the ing academy for $1.25 billion, about 16 months before that, we sold endeavor content for a billion we have a lot of financial flexibility. and it kind of talks to the value of the assets inside endeavor, outside of theufc, which everybody mainly focuses on the funny thing i is, $1.25 billion for the academy was greater than half of all the acquisition of ing crazy. and so, i think people thought of us as empire builders, and we wanted to show people, we've been focused on debt reduction we thought -- we think the price on an event-driven business was low, so we wanted to buy some stock back and for the first time, we have flexibility in our economics, so we thought, a dividend was right, plus a little bit additional paydown of some debt. >> yeah. you know, you're right when you say that everybody wants to

focus on ufc and wwe, but what also i hear from investors is they would rather buy wwe to create tko than buy endeavor >> well, hopefully, with this sale of the academy, the sale of endeavor content, two things that sold for a billion dollars and endeavor content, ing academy for $1.25 billion, people realize, wait a second, there's really great assets inside, remaining assets in endeavor, which i think there are, of course as the ceo and yes, there's unbelievable value in the pure play of sports and sports entertainment with eventually ufc and wwe >> tko >> tko, correct. >> the great symbol. but how do you then sort of delineate for investors, you know, buy my stock instead of tko? >> that's a short-term problem once the companies kind of separate, and we have the pure play and we have the rest, i think that will even itself out.

>> you'll still be controlling tk you'll still be the ceo. >> correct i'll be the ceo of both. mark shapiro will be the president of both. we'll consolidate into endeavor. i think people will figure out where they want to put their money. but at endeavor, between content, events, betting, i think there's unbelievable assets there h hopefully, this prooves there's value still remaining at endeavor >> and i'm sure you'll have no problem dealing with both dana white and vince mcmahon. >> i've represented ufc before we bought it for over 20 years, and the same thing is true with vince. >> you really don't think you're going to encounter any issues. >> we have a good relationship >> you're going to let them do what they want to do >> and we do what we do as it relates to saving some costs, driving some revenue with sponsorship, international sales, like we did at ufc. we're going to do 2.0 at wwe >> actually specific to tko and

wwe, what about sports rights there and enhancing your ability to negotiate for the upcoming renewals >> right now, we're focused on saving some costs, doing sponsorship, which they didn't have same formula we used at ufc and international rights their rights are of open now we're in a year and a half from now. i think they're on separate time frames >> they are. so, wwe first, then ufc. >> yeah. >> and then you move on. >> correct yeah >> did you guys move out your expected expectation of close there? i think in the original, when you announced the deal, it seemed like it would only be a number of months, but you sort of seem to be pushing it back. >> we're waiting on doj. we're not pushing it back. >> okay. >> we're just waiting now. >> all right, let's talk about the writers' strike if we can. i want to get your take on that. first of all, what is it going to mean for your firm if this thing goes on for a long period of time? >> we support the writers. i would say we haven't changed

our guidance right now for the end of the year. all that's depending on duration there's a lot of big issues, but duration's one of the big issues between, you know, royalties for the writers, writers' size of room, a.i., there's a lot of big issues in there. there's the complication is you have three streamers, netflix, apple, amazon, and then you have traditional guys that are in the streaming business, so there's a lot of moving pieces i'm not sure it's going that long, only because the directors are going to drive a hard bargain. they start actually, their window is opening to start negotiating now. two is, if you think about -- if you just look at netflix, they actually, at the beginning, 2007, 2008, actually gave a lot more information on their user base and viewership, et cetera, and when they're now all moving to an ad-supported model also, the advertisers are going to

want more information. it shouldn't be a hard leap to give it to the writers it's the fair thing to do. i'm not sure why they're holding it up, but writer size, a.i., a bunch of other issues are important. >> you say it's a different negotiation given these direct-to-consumer platforms, pure play or also hybrid >> correct i think you're going to need a strong, on the buy side, meaning disney and netflix, a strong person like iger to get in there who has both perspectives, been seeing a lot of strikes like i have, to figure out a resolution here and i think we'll get to it. >> what about a.i. terms of its ability to start writing scripts? >> i'm not worried about that. >> you're not, why >> if they're writing scripts -- first of all, i don't think you can recreate a larry david or a seth mcfarland or jim brooks i don't think it's that easy, and they deserve to be paid if

somebody is replicating their business if it's coming from an original point of view without a writer involved, i don't think the script is actually going to be to the quality and the standard that it needs to be for an audience >> and you seem -- what i'm hearing is you seem somewhat optimistic that this could get resolved in the short-term >> i think you're going to have -- i think you're going to have a very tough negotiation with the directors but i think you're going to get to a resolution. they're going to have to give data to advertisers with their models, and so, i think it's -- they've done it before, and i think we'll get to a place >> finally, you know, you're close to elon musk at least i -- >> yes >> and i'm curious your views, tucker carlson comes out and says he's going to do a show on twitter. it's unclear whether that's going to happen. musk came out and said, we haven't signed anything. do you think that platform could become something for shows like that and/or others >> i think he's now -- you can dm person-to-person. he just came out with that

information. i think you can make phone calls. so, he's kind of replicating now the whatsapp model, et cetera. and i wouldn't put anything past him as it relates to video i think one of his big issues, and eventually he'll come out and say out and say it he doesn't want everybody to come to the platform and go to youtube and make money on youtube, he wants them making money on platform. if that's the case, then i think he's got to permit video and the ability to monetize on platform. i wouldn't put anything by him i think he's a pretty competitive person. >> as you are, mr. emmanuel. appreciate you takeing time. >> god bless stay healthy. >> i will try. we'll go to break here watch bonds this morning as well important in the wake of cpi, the two year around 3.95 and the ten year around 3.45 lowest in a couple days with

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take a look at some gainers this morning, rivian at the top as they do back their guidance for the full year on the production, ebitda, and cap x. got some software in there as well chips. zscaler as software is getting discussion all that said the dow is down about 93 and more results tonight back in a moment your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

jim, what's on mad tonight >> we have target -- i'm sorry, tanger this is where i get my apparel this is all outlet stuff, that should count and wendy's, we have now maybe a.i. at the drive through, which means my wife gets the baconator when she wants it. it won't be no chicken sandwich, no mistakes. the machine understands baconator. >> absolutely. >> it doesn't give you, i don't know, salad.

>> see you at 6:00, jim. when we come back, an exclusive with mary barra from gr gm don't go away. ♪♪ ♪when the day that lies ahead of me♪ ♪♪ ♪seems impossible to face♪ ♪a lovely day (lovely day)♪ ♪(lovely day) (lovely day)♪ ♪(lovely day)♪ a bank that knows your business grows your business. bmo.

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good wednesday morning welcome to another hour of "squawk on the street" i'm sara eisen with carl quintanilla and david faber live look at stocks on the early action, higher, s&p 500 up about .5%. dow up 29 points and the nasdaq up 1% aztec leads the way today. more signs of moderating inflation. 30 minutes into the trading session. three movers we're watching rivian rallying after a 2-1 loss they're still on track to make a 50,000 vehicle production target this year they say we'll talk about autos in a moment with the ceo of gm, mary barra. and the firm tripling losses from a year ago. stocks down 4% and airbnb gave weaker than expected guidance and a cautious

outlook for the second quarter we'll speak to the ceo brian chesky in the next hour of "squawk on the street. but inflation data showing pricing moderating used car prices jumped more than expected month over month. let's talk about inflation for a moment because there was some good signs from that report. shelter makes up a third of cpi came in smaller than expected but still rising we're seeing moderating signs, for instance, on the month over month changes. just a few other calouts on the inflation numbers, core numbers coming in a little bit better thanexpected that key number, that super core the fed has been looking at which takes out shelter from services, it's still high.

>> shelter, smallest gain in a year, which is important as sarah said food at home caught a break, downt go there he said, we didn't say we were pausing. he didn't sound super hawkish either but listen to what he said, first of all, on inflation. >> which part of the inflation numbers are you most worried about? are you seeing as most sticky that you want to see come down. >> the shelter cost, i think that's moving. i think the piece that's proving highly persistent so far is core services excludeing housing,

which is a lot it's a lot of the consumption basket and that is i think very closely related to the fact that demand is strong, relative to supply. >> what did we see in the numbers today,.26, better than the .29 we saw in march. and that's an adjustment we saw air fares in there, hotel costs come down a little bit that's good. is it enough for the fed to pause in june? i don't know it's not definitive. it's not like we've solved the inflation thing. it's still too high. >> we'll get another cpi before that meeting. >> and more jobs and data, which is why he wouldn't bite on the june trajectory. not definitive on, we're not cutting. >> what about tightening as a result of lending standards going up or regional banks being in a position they can't lend that much? >> that's the wild card and that's what they're watching

that's what they want to see is how much tightening is going on as a result of the bank failures he said it's too early to see. it's just anecdotal data right now. nothing super alarming but i think we have that sound of what williams is saying about bank tightening. >> what are you seeing so far on the credit conditions? you said a few weeks ago, you made a lot of news saying you're not seeing evidence of that. >> what we're seeing is anec anecdotal, including survey and discussing with business contacts and what we're hearing from banks clearly, you know, the monetary policy tightening itself that we've been doing for a little over a year will tend to raise the cost of credit but also tighten credit conditions as part of the monetary policy transmission so we saw that even before march. since then, i think we're seeing more signs, especially maybe in

the regional bank or that kind of range of banks of some signs that -- further tightening of credit >> so it's happening and they're watching it is really the message that we got from him he did say the banking system remains sound and resilient, echoing powell, and they feel good things look better as far as deposit outflows and acute stress in the system. >> any time line they can give us in terms of whether it's more definitive whether the tig tightening as occurred >> in the coming months. they're looking at the data. the survey was in april, right after the march failures but not potentially enough time to see how much tightening there is we want to talk about inflation and the state of the consumer. joining us here at post nine we have general motors chair and ceo mary barra great to have you. >> good to be here. >> i mentioned the car numbers

new cars still sharp rise year over year. though coming down month over month. what are you seeing at gm on pricing? >> still seeing consistent pricing. i think some of it is gm specific related we have a strong portfolio of products outi, with new product coming we're seeing consistent pricing. >> what about pricing on evs, especially in light of the much hyped tesla price cuts >> i think, you know, when you look at the evs we have right now, they're in demand, the hummer, truck, suv, lyric, the silverado ev coming, the equinox, the blazer. we have a full line up of evs coming out this year that we think are well priced with how we set them up. >> so he's not creating a price war in evs. >> we have to watch but with the

evs we have coming out right now we feel confident in the pricing we set is in the sweet spot with a product with features, range, the truck the right payload, towing, et cetera. so we're confident the product is going to be well received. >> demand is clearly strong, double digits, revenues last quarter, raised your guidance. the question is are we seeing peak demand now where we're seeing signs that the consumer is slowing down. bank of america credit card saw the first monthly decline in a while. can that demand hold up? are you seeing signs of the a slow down? >> we are watching very carefully and will adjust. we plan this year to be conservative we're in unprecedented times when you look at the auto industry following covid we're just now starting to get supply where it needs to be and we have more work to do to get the right number of vehicles on

our dealer lots. we watch it carefully and that's why we took action earlier in the year and are on the way to take 2 billion out of our cost structure. so we're seizing the opportunity with strong demand for the products. >> we've seen loan delinquencies rise are you seeing that? >> we look at our customers through gm financial we have a strong prime business so we're seeing some lowering we're really still above pre-pandemic rates. so again, a strong consumer, strong pricing but again we're watching it carefully because we know this is something that can change quite quickly. >> you mentioned the cost cuts, wall street was enthusiastic about that last quarter. the speed. i saw a report of more layoffs of an engineering center around detroit. where are you at that process? >> we did a voluntary separation

program and the layoffs you referred to those are with contract employees we bubble up or down from a contract or temporary workforce perspective. but i'm pleased with what we've been able to do, roughly half of the two billion and it's more than reducing cost from a people standpoint we've streamlined the organization, and did it in a way without causing internal strife because it was a voluntary program. so i'm i'm pleased with where we're headed. >> how do you balance that environment of cost cutting at the same time having to ramp up investment around these big ev launches >> you know, we have committed between 2020 and 2025 we'll invest over $35 billion in ev and autonomous so we're on track to do that we're able to fund that. but we also realized this is a competitive industry we're seeing it, of course, with the different competitor actions and their margins. so we're in the ramp up right now of getting the battery cell

plants up and running, retooling t factories to build evs so we have the right balance but we're looking to drive efficiencies that's the 2 billion of our cost while expending capital. >> that's something the street wants to know. are you willing to sacrifice margin to capture volume share in ev as competition heats up. >> we've said for the last several years we're looking for profitable growth. we think we have the right evs, as i mentioned before. and we think for general motors we are underrepresented on the coast where ev demand is strongest. so we see a growth in opportunity, and clearly in fleet, we see growth and able to grow while still having and improving our moorargin profile. >> software as a service is a long term projection, and the

recurring revenue you would hope results from it. how confident are you and how much are you incorporating that into your long term projections for the company? >> we said by 2030 about a year and a half ago we see an opportunity for up to 20 billion from a revenue perspective in software we have a strong base to build on with on star. so we'll continue to work on that i'm thrilled that yesterday we announced that mike abbott is joining the team he's going to have not only the software required for the vehicle but also spe integratin seamlessly with the so we have work in flight right now i'm confident we'll see the growth. >> things are moving when it comes to generative a.i. i'm curious whether you think about that technology at all, how it's incorporated in the further cars we're talking about? >> an example of where a.i. and machine learning is significant

at general motors is in cruz they're growing and we're three cities with more information that will be shared today. i look at what they're doing there and how we can extend that broader into the vehicle with mike joining us that's another huge opportunity. >> some are looking at consumer intense surveys and trimming the ev adoption curves and thinking that's more resilient internal combustion business. is that the right way to think about gm >> we have flexibility when you look at our tennessee plant we can build cadillac come b combustion or lyric. when you look at the regulatory environment toward the latter part of the decade it's important that e with grow ev sales and we have the portfolio to do it. >> do you think gas prices right

now have a lessen urgency to switch >> i don't think so. people want an ev but they want the right form factor. general motors was a leader a century ago providing choice and the second thing is charging infrastructure that's why working with charging companies we're also investing about three quarters of a billion in charging. we have to win that customer that owns one vehicle and they need it to go wherever so charging is important for that. >> what do you see in the china market right now given the recovery and the competition, especially in evs? >> when you look at china it's difficult from an industry perspective and specifically for gm, the next year to 18 months is ycritical to have the right products in market to win. most of the domestic ev providers are not making money

so it's got to sort. and i think there's an opportunity as for to really present ourselves with the evs we have launching not only the cadillac lyric but the buick that will be important and we have the mini, that has done well. it's in the top ten or five selling ev and markets so more work for us to do there. and we have to see how the industry evolves it's not sustainable to be 50% utilization. >> what do you see as your competitive advantage versus tesla that has the ability to take price down given their margins are so much larger than others >> we do have strong brand recognition, especially with cadillac and buick it's part of china's heritage. i think it's getting the right products with the right range and technology and that's what we're going to be launching the next year or so.

and the strength of our internal combustion business gives us the opportunity to fund it so it's a transformational soc opportunity as well. >> debt ceiling, every corporate leader has to be thinking about it how does it complicate life for you as a manufacturing company that we have this issue? >> i'm hopeful as quickly as possible the two sides can come together and negotiate it would be bad for the economy, the entireauto industry, as well as the u.s. overall so i'm very hopeful that they'll -- i'm hoping there are signs -- i know there wasn't a lot of progress yesterday but i'm hoping the continued dialogue gets us to the point we can find the solution. because it will be really devastating to the economy just when there's signs that, you know, we're starting to get some normalization >> do you buy the idea that america can be a manufacturing

hub again? we're bringing back chip production i know this is a priority for you as well in terms of lobbying for policies is it happening? >> it is happening especially important when you look at battery cell production. to get to the ev numbers we have and the industry is working for, we have to have battery cell production what we lived through through covid and the semiconductor shortage we have to have more resiliency our strategies are on shore or ally shore we were well on our way with the battery raw materials when i.r.a. became approved and i think it reinforced the need to have the stability and resiliency in our supply chain. >> mary, thank you good to get an update from you on all these things. >> thank you so much. as we head to break, the road map for the rest of the hour stocks are higher as president biden and speaker mccarthy

failed to make a deal on the debt limit and a june 1st deadline looms. inflation did slow in april, but what does it mean for the fed? more on the earnings results you may have missed. a big show still ahead don't go anywhere. . 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. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back.

welcome back to "squawk on the street" cpi cooled in april to the lowest rate annually in two years. joining us paul mccolley is with

us, a professor at georgetown university great to see you we have inflation, we're watching credit, the debt ceiling. how does that entire potpourri change the bias right now? >> i think the inflation data tells us the disinflationary train is moving down the tracks. not as fast as people would like but it's actually in train and i think it's good news and i think it reinforces the proposition that the fed is now going to pause at the next meeting. we actually have the policy right above the year over year headline inflation rate. so we have real interest rates, the inflation train is moving in the right direction. so i think that the overall message of the fed is going to shift from higher for longer to high for longer.

drop the e-r it's going to be high for longer. and that what they're pushing back on is our expectations in the market they're going to ease but they're not pushing the notion that the peak rate is going to be higher. >> is there danger in australia where you convey a pause and then you hike again? >> i don't think the chair powell wants to do that. i think that's one of the big reasons that they're so hesitant to actually do a pause, because stopping and starting is not something they want to do. so i think they're going to sound quite hawkish until they get a lot of clean readings that we really have reached where we want to be so i don't think they want to stop and start >> the problem is, paul, is that if they pause, or whatever they're doing now, what they're

saying is data dependency. that means the market gets to choose that's why the market has priced in cuts because they're saying they're data dependent so the market takes that as a green light to ease financial conditions and makes their whole fight on inflation more challenging. he's not actually hawkish. >> it's not an easy thing for them to communicate. it really isn't. the fed knows that the marketplace is expecting that they're going to be easing down the road in fact, john williams mentioned that to you yesterday. he just doesn't want it to be on the agenda for this year that if they're successful in bringing inflation down to the three handle, then it means real interest rates are getting even tighter. so i think it'sa matter of timing and they're going to keep talking hawkishly about the

notion yes, we will ease into fullness of time but time ain't full yet. i think that's the full message. >> on the debt ceiling it was interesting to hear bill gross this week, and libby cantrell has consistently said by the debt ceiling this will get worked out, there will be drama but they're not going to let this fall into the abyss what do you make of that are they just looking at what history has taught us? >> i think it's history and basic common sense warren buffett has said the same thing. i think he said that with becky a couple weeks ago and that we're not stupid enough to put it bluntly as a counted, to default on our debt, but we are silly enough to play the game to the 11th hour. so i think that we will get past this but it's going to be a very noisy period and i've been around for a long time and this is one of the

noiser episodes i've experienced. that's probably true with you as well. >> what about the credit tightening issue that's clearly something they're watching williams said it but said it's mostly anecdotal so far. not seeing the impact in the data when should that come? when will that come? and will it, necessarily, come >> i think it will come. but it'll be in the months, if not quarters, ahead. because it will be banks and other lenders reacting to conditions as they unfold. i think we, in the marketplace, collectively, were looking for immediate sort of data after the acute banking crisis and that's not how the banking system reacts, unless they are the target of the acute run. so i think it'll be a more slow

motioncreate a panic i don't think we'll see a panic tightening, just a continued tightening as monetary policy, works both on the rate side as well as on the banking side. >> that's good stuff, paul obviously a bunch of pots boiling these days talk soon. >> thank you. let's get a check on the markets this wednesday morning the stocks not sure how to

handle the cpi data, dow red, s&p up a few points. we'll be right back. ♪ ♪ 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? ♪ ♪

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i'm leslie picker, here's your cnbc news update at israel and as far as tel-aviv, 50 miles away. george santos surrendered to federal law enforcement to face fraud and money laundering charges. he's in custody at a long island courthouse and will be arraigned this afternoon he faces seven counts of wire friend, three counts of money laundering and two counts of

making false statements to the house of representatives. and vice president kamala harris is set to deliver the commencement address at west point this month for the graduating class of 2023 it represents the first time that a woman will serve as the commencement speaker in history. >> let's get to bob who joins us here on set to find out what he is thinking about this morning. >> remember yesterday everybody said if we can get a cpi below 5%, the market is going to rally. we got it, 4.9%, inflation moving in the right direction yet we're still stuck here the high point was the open. sold right into it, okay we're still up it's 5 to 1 advancing the declining stocks but a tepid rally overall given we've been in this range for months now and we have the debt ceiling overhang that's hanging on top of the market now.

looking at the sectors that are moving now it's the same as before. there's some big cap tech moving some defensive stuff like health care and consumer staples that have held up well and the cyclicals are acting terrible. industrials have been weak we had new lows in the mining metal stocks yesterday and energy has been a poor performer. so it's been a difficult market to trade the pain trade is sideways, where everybody is frustrating at this point because we can't break out of the trading range the movers, we have apple and microsoft up caterpillar acting terribly recently home depot doing nothing, chevron doing nothing as well. none of the energy stocks doing anything at all. look at the month, the last few days this is the whole story. a few big cap tech stocks, merck and lilly and a few health care

names caterpillar awful, home depot sideways chevron down for a while this is what the market looks like we can't break out of that range. range bound in the s&p 500500. the breadth has been poor on the nasdaq particularly. sol volatilely low there's no trading action. the earnings are better than expected in q1 and the second half is stable no earnings apocalypse or recession, stable for the year that's good news inflation is moving in the right direction. and essentially we are stuck david, yesterday you and i had a brief discussion about apple and the fact that here's the number here 2.7 trillion people on the twitter verse expressed astonishment that this could be -- you did too and i agree, it is amazing these are the numbers i put up a trade or talked to that explains

the numbers, but the point is apple's $2.7 trillion is bigger than the entire market capitalization of the uk, the third biggest market in the world, 595 companies in the uk market bigger than france with 235 companies. bigger than india. and you and i went back and forth on this. germany is a small stock market. >> it is fw given the size of the economy. >> the biggest gdp by far of any country in europe but the stock market is fourth >> the biggest companies are -- >> they trade at low multiples >> that's right. >> today's market action it's not a surprise p it's megacap tech getting the bid amazon up almost 3%. isn't that what you would expect on the inflation print you're saying earlier not a market rally >> doing fine. if you believe the global economy is opening, china is

reopening. you think cyclicals would do better we looked for stabilization in the banks as well. just not getting it. the participants are frustrated you can't get a breakout the usual movers on big cap megacap tech and a few other defensive names and nothing else is doing anything so they're worried about the growth prospects. >> i think the bears are frustrated you could argue given the debt ceiling drama with lack of any deal the market is hanging tough. >> that's why the pain trade is sideways the frustration is the market does nothing, which is what it's doing now. >> the goldman desk today says zscaler -- the names doing well is because people are worried. they're moving into software today. >> how far can you push it up before the valuation goes crazy and people scream about that that's why it's frustrating right now. >> you channelled that well. appreciate it.

consumer names in focus after this morning's inflation number wonder where people are going? the staples trade has worked we're breaking down the action with citi group's top strategist next s&p higher by .3, nasdaq up a full percent we'll be right back.

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no big break through at yesterday's debt ceiling among congressional leaders and president biden but they will keep talking as a possible june 1st deadline looms got a friday meeting on the calendar let's bring in kayla tausche with the latest. what's now >> reporter: now congressional staff and white house legislative affairs staff are going to keep the conversation going according to the leaders yesterday they were going to follow-up yesterday after the meeting and principals come back to the white house on friday to reconvene at president biden's invitation to figure out where things stand

the hope is staffers can find some middle ground based on the table set in yesterday's more than hour long discussion but according to the kevin mccarthy there was no progress in that discussion >> everybody in this meeting reiterated the positions they were at. i didn't see any new movement. the president said the staff should get back together but i was very clear with the president we have now just two weeks to go. if chuck schumer can pass something we can go to conference right away and solve that. >> reporter: the question is, can there be an agreement with both sides politically are able to save face and avert a default on june 1st which president biden and leader mitch mcconnell say they are going to do at all costs. can president biden get a deal where the debt limit is raised for any length of time while spending notions happen in parallel and can speaker mccarthy then say the two are linked even if the white house

is able to say they're not it's semantics but important to each party and they only have three weeks to get there. >> you're saying that could -- so president biden has said he doesn't want to attach spending cuts to the debt ceiling vote, right? >> right. >> or do you think he would be open to doing that >> reporter: they've said they're open to negotiating spending the secretary yellen said that earlier this week. president biden said it last night. he said he's open to redirecting some of the unspent covid money which is the first flglimmer wev seen from the white house specifying which bucket they may be willing to negotiate. that bucket is anywhere from 20 to $80 billion and republicans are talking about something in the order of close to $5 trillion in deficit reduction. so it's apples and oranges but it's a start here. so what else can they discuss? what other spending deal can be reached? can they agree to cap government spending at a certain level over the next one, two fiscal years

that's what republicans want here it's a question of how much and how long. >> but the president wants to do that in the budget process and that's what yellen said also they want to do that on the september -- end of the fiscal year, through the appropriations process. and mccarthy doesn't, so how do they do that >> reporter: the question is what do you align and when appropriations moves forward next week with some piecemeal bills so can you say the spending is negotiated in this, we're raising the debt limit, democrats can say one thing, republicans another. but if you get an agreement it's impossible to put it in text to get the votes before june 1st with the president expected to travel overseas for ten days he said last night he's open to possibly foregoing that trip if

he needs to based on how the negotiations are going but it's a condensed calendar at best >> that's the problem. the spin -- that's interesting everyone can spin it however they want. kayla, thank you. our next guest said equity markets have yet to price in from the debt ceiling deadlock joining us now is scott crohner. s&p target below 4,000 t-bills and cds are starting to price it in, not so much broader equity markets, why not? >> the 2011 compares where most people go with this, the time line is it wasn't actually the debt ceiling issue that caused the concern, it was actually the downgrade and that ledto your -- >> that came when? >> that came a couple months later. so that was your 15% draw down and so, when you look at this, it's like, okay, is there enough evidence that says i need to sell versus, well, if you do

that, you have to be prepared to buy in the pullback because you had a strong multi-year rally after the event in 2011. so where we're going is this is probably one of those situations you want to consider insurance and that can be via a hedge if you will or what we're doing is talking about securities that have high level of revenue exposure from the federal government as a way to back into this. >> you expect things to heat up and get worse? >> the rhetoric is going to continue to say with confidence how it's going to play out is hard to dial in. at this point we have to assume a base case this is going to be resolved but how it plays out, probably some volatility along the way we're trying to position for that >> do i want to sell the market here >> i don't think you want to sell the market but this is one of those times it's worth paying for insurance or protection. we're saying look, it is a good

opportunity, in our view given where implied vols are to consider hedges. we talked about the broader s&p, the aerospace and defense so not much is priced in relative to what you 'seeing in terms of u.s. cds if you will. we think there are ways to express a more concerning view on this without going all out and saying sell the market >> bob is frustrated about the fact that the market can't break out of a range it's sideways bulls are frustrated, bears are frustrated, what breaks out? >> i'm frustrated. we're using a fair value model for the s&p saying it ought to trade 14 to 18 times we're 18 1/2, 19 times now, earnings estimates probably have more down side in the second half of

the year, not material so what we need is either more confidence that we're going to navigate through to a soft landing scenario or we need more cushion on the ten year which we don't think is coming. >> citi expects 50 basis points of hikes. >> yes. >> and a soft landing? >> a price target on the s&p. >> the 4,000 i get there a couple ways, 18, 19 times the earnings estimate which i think is a fair assumption and a scenario, mild recession roughly 4000 soft landing we can talk about a 45 number. we think we're looking atti, obviously, mild recession is the base case but the more rhetoric, the further you push it out, lean down a soft landing path.

we think based on our fair value work that we want to be in the equity market at this point. the closer to a peak in the fed, no question there's a lot of money out there that's going to want to follow the fed as it has over recent years. you want to be in the market just a question of when you want to add positions and we're looking for pullbacks as a better industry point if you will. >> scott, thank you. today's earnings movers still ahead. but throughout month of may, cnbc is celebrating asian pacific and islanders through influential business leaders >> connie chung was the first person on television who looked like me. and she left the impression that somebody who looked like me could make a difference in the world. now as we are building businesses and services that are meant to serve bigger and bigger

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we're still seeing very consistent pricing i think some of it is due to a really strong portfolio of products upcoming and consistency bodes well for the interesting new sales. >> mary barra earlier on this show talking about pricing of course, that's the conversation today with inflation. we saw that in the new car pricing.

certainly in terms of falling prices or falling demand, she said some of it is gm-specific, because of the new models and the demand they're seeing right now. coming away with that interview for a more volatile period, thinking that we're seeing, you know, a big consumer slowdown. higher rates and loan delinquency for customers. >> the issue seems to be new cars are pricing consumers out, that's why they're turning to things like used cars. that's why the market is getting hot. there's no one making vehicles, especially in the ev space >> and then in china >> and a much lower price point. as it evolves between these players, she seems very

confident in their brand p >> sometimes to get free cash flow, it's not easy. >> she's cutting costs on internal combustion and investing it behind ev an interesting challenge the stock is up because of prospects of a consumer slowdown airbnb profitable in numbers ceo brian chesky next with the telast discussions with the nec director bharat ra murti

welcome back we want to take a look at shares of icahn enterprises it's a name we've been talking to a bit lately due to a research report from the short focus firm of hindenburg came out very early in the month. questioned their mark-to-market in terms of certain businesses they own, questioned their ability to sustain the dividend.

and now we've learned, because icahn enterprises did report earnings this morning and then the company and filing from icahn, they said, the u.s. attorney's office with the southern district of new york has contacted the company, seeking production of information relating to it and certain of its affiliates, corporate governance, capitalizations, security offerings, dividends, valuations, marketing materials, due diligence, and other materials. they say they're cooperating with the request they also bapoint out, by the w, that the u.s. attorney's office has not made any claims against iep or mr. icahn with respect to that ongoing inquiry but it is having a significant impact on shares of icahn enterprises. the company did report earnings this morning or lack tlhereof and there continue to be some questions about their ability to pivot dividend but he gets that in units, that's very different than the rest of shareholders and he owns 85% of icahn enterprises let's get over to dom chu.

quickly fill us in on a couple of movers this morning before we wrap up. >> let's talk about a couple of them let's start with online video game entertainment platform operator roblox. it's up roughly 4%, 5.5% now mixed report, better than estimates. investors keying more on what's viewed as a stronger growth number for daily active users and how much more time they spent on the platform. and by the way, just look at twilio, taking a big hit, down 15% or so. cloud-based communications, profits that handedly topped estimates. revenues were in line pretty much with expectations but the number of active titeomer accounts came in above esmas. current quarter revenues down over 16% >> we are now negative on the s&p. that does it for this hour of "squawk on the street. stay with us.

good wednesday morning i'm carl quintanilla with sara eisen live on the floor of the new york stock exchange. setting the agenda for today, doubts on the debt ceiling no resolution as the president and the speaker remain pretty far apart on a deal. the nec deputy director will join us next on that and april's cpi. >> plus, airbnb ceo brian chesky with us here at the new york stock exchange the stock is getting hammered after earnings and a cautious outlook for the second quarter the chief ca