business profitable. and treasury secretary janet yellen speaking overnight calling the debt default unthinkable. the different way of saying it is unthinkable this is hours after former president trump urged to default if they don't agree to spending cuts it is thursday, may 11th, 2023 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in sometimes square i'm becky quick along with joe kernen andrew is off today. you see green arrows dow futures are up 36 points s&p up 13. nasdaq up 53

if you want to look at what is happening with the treasury market, at least at this point, the 10-year treasury is yielding 3 3 3.492% the 2-year treasury is back below 4% 3.92%. i would like to look at the three-month t-bills. sorry for the audible. the one-month is 5.72. yesterday's inflation report showed cpi falling to the lowest annual level in two years. one top fed official is not convinced the central bank has done enough. speaking to the ap, richmond fed president tom barkin said inflation remains high and no longer making much progress toward the fed's 2% target now barkin said core cpi is stuck in the range of .3% to .5%

for months when the fed would like to see the core number moving down. most economists believe the fed will now pause its rate hikes. barkin said the message was e explicitly not a pause, but option to wait or more if appropriate. there is a lot to wait for because of the lag and the credit contraction we may witness from the tumult in the banking sector. >> did you see greg's piece yesterday when they first put it out? erhe raised questions we all looked at the number. core number at 5.5%. is this steady and higher than the fed wants that we all have gotten used to at this point once consumers get used to higher inflation, that's when they say it gets entrenched.

instead of worrying about inflation, it is not high on consumers' minds and it is not talked about with conference calls because the ability to raise prices and not have push back from assume con ssumeconsu. it is not -- >> elastic you do it anyway >> i hadn't thought about it from that perspective. you get used to it and it is harder to kill off >> after 4.39 comes 3.9. >> the point is most of the reason you saw the decrease was because you are looking at the headline number. if that goes up quickly -- >> used cars were part of the increase >> true. >> they dropped off. i don't know why i don't know anything under 5%. >> 5.5% on core.

>> it is not south american numbers. >> it is not 8% or 9%. i hadn't thought about that until greg's article. >> the supply solutions rather than demand solutions. they don't have a perfect way of doing it >> right let's talk about the debt ceiling debate speaking this morning ahead of the g7 meeting in japan, janet yellen said the idea of letting the u.s. default on its debt is unthinkable. she said that would undermine the u.s. and global economies. this comes after former president trump had this message for lawmakers at the cnn town hall last night. >> i say to the republicans out there, congress and senators, if they don't give you massive cuts, you have to do a default i don't believe they will do a default. i believe the democrats will cave you don't want to have that

happen it is better than what we are doing right now because we're spending money like drunken sailors. >> takes one to know one when pushed to clarify remarks, trump said he believed democrats would cave and agree to cuts to avoid default. he is not advocating for default,have -- advocating for a negotiation. >> it wasn't great, but the pandemic hit >> right you could understand the reason for wanting to claw back unbe spent covid funds. -- unspent covid funds that makes sense >> it was hard to follow it was a circus. it was hard to follow a lot of what was going on. he said if i was president, i wouldn't be saying this. since i'm not president, i'm saying it. it is hard to follow the logic. >> you understand he always

thinks of the negotiation. i think he was advocating this as a ploy to use it as a negotiation tactic >> you spend enough and eventually he was saying you default anyway your currency becomes at the beg of your neighbor the modern monetary theory doesn't work the way it man gifests itself. the united states can't ever default. you inflate your currency to the point and the debt gets so high and servicing your debt takes away almost all the money you are able to invest so the gdp -- kind of can look at europe over the years. they had a gdp 40% lower than ours historically because so much

debt service for entitlements. >> with interest rates higher, that is a bigger concern. >> yup. >> costing us a lot more. >> it was wild it was on cnn. it was funny they go from the old ncnn. i think fox would have said we will hear -- she tried, the moderator tried -- they had all republicans in the room. they had that in new hampshire they kept cheering it was bizarre i couldn't believe it. shares of robinhood higher the trading platform first quarter loss of 57 cents a share was 4 cents wore than expected monthly active users and revenue declined in the quarter as trading volumes slowed revenue beat estimates bolstered

by interest income robinhood announced plans to launch 24 -trading of selected stocks for five days a week. robinhood is cooperating into the firm's compliance with record keeping requirements and off channel communications we will talk about that with vlad tenev later in the show could you hear heads exploding it was unbelievable. >> it did not sound like fireworks. >> there were heads exploding. my son brings me up to date. he is watching twitter he follows it. he has access to a lot of people that he follows -- i don't they are all blocked i don't see what they say. he said, oh, my god. this is big. >> fallout >> brian stelter

a lot of people used to be at cnn. you have no comment? >> no, i really don't. >> all right let's talk about what happened in tokyo. softbank with a record loss of $32 billion for the fiscal year that ended in march. softbank net loss of $72 billion was not as bad as the prior year softbank recorded gains from exiting investment in uber, but logged losses in share prices of chinese a.i. firm and indonesia ride hailing company go-to softbank shares down less than 1%. shares of sonos plunging the equipment maker plunging from profit to $31 million loss in the recent quarter. revenue down 24% that was above expectation it dropped 25% the company slashed guidance for the second half of the year with

tighter inventory. when we come back, disney shares sliding after the surprise loss of streaming subs subscribers. stock is down 5.5% we will have details after the break. and later, honeywell ceo darius adamczyk is passing the reins off at thend oth ef e month. we will have the latest. you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

♪ imagine, a car that goes as far as it does fast. as sleek as it is spacious. as smart as it is beautiful. introducing lucid air. experience the best. ♪ ♪

shares of disney down 5.5% this morning earnings and revenue matched the street expectation the company reported a surprise loss of 4 million streaming subs subscribers. joining us is jessica erlich are you surprised by the steep sell off >> not at all. with disney, there is always puts and takes a complicated messaging quarter. the company always on the quarterly calls give the h headwinds. never the tailwinds. numbers are coming down. they highlight what could go wrong over what could go right >> the streaming properties.

that's pretty interesting proposition. they said they are going to try to move to profitability which is what wall street wants to hear losing 4 million subscribers and i know it is the second quarter in a row they lost subscribers, but also raising prices. i'm surprised people are surprised to see a loss of 4 million subscribers. >> put it in context 4 million sub loss from india. they lost what they gave up. they gave up ipl these are 50 to 60 it is not financially significant. the messaging is the important thing. what bob iger said last night i the plan to raise prices the 30% rise increase in december price increases are coming to have a dual impact of raising on the subscription tier, but push

many into the advertising tier where the revenue per sub per month is the same or better than subscription only. he also said they will introduce advertising in europe and other markets later this year and having a lower price advertising tier will drive subs there are definitely positives coming the other thing that is important is with warner brothers discovery, they are taking charge of $1.5 billion and $1.8 billion in fiscal third quarter. they are getting rid of content from the platform that consumers don't watch that costs a lot of money. they are rationalizing cost or paying residuals on. the cost base following the breakdown will become lower. there is a focus on sg

marketing. there are signs of moving to profitability in streaming >> you sound like you like the stock although you are not surprised by the selloff >> there were other things as well going to put the hulu -- they will have hulu offered as a title the within disney plus it keeps subs on the platform. that should help dr drive engagement there were definitely other things going on in theme parks you are seeing global theme parks pick up for the first time since covid. we saw that with your parent company unskiversal as well just a lot of moving pieces. >> disney has other comp compli complications, too the writers strike i don't know what you think that means if the strike continues.

>> it doesn't sound good you know, they have other giuild coming in. the impact is a decrease in cash cost going out the door. it is focused on international content and non scripted shows it is not a positive it may delay the season. that is problematic. it is problematic for the industry, not just disney. they have a deep library it's not good. >> what is unique to disney is the situation with florida governor ron desantis and the legal battle that is taking place. how do you handicap that >> financially, it is probably not as meaningful as the nasty headlines. bob iger, who is diplomatic, came out swinging.

he feels they are being attacked he very force actfully pointed disney's state of view they also have strategic decisions to make. hulu, your parent company comcast ones one-third there is a put call. disney is not likely going to buy for $9 billion in january of 2024 the other issue is the decline of the lineal universe with subscriber declines accelerating when do they make the transition from espn, lineal channel, to espn plus. it is a big deal. >> jessica, you divided 27 by 3. it makes me sad. what was it worth?

that was the floor do people know the floor was going to be the actual price >> for hulu. >> didn't we think it would be two or three times that? >> hulu's value has come down over time. there's more competition interestingly, when comcast, again, nbc u took content off hulu and put on peacock, hulu's numbers came down. on the platform, they are watching the shows on peacock and other streaming platforms. broadcast shows are extremely highly rated and valued. it is just not in the lineal universe. >> what do you think the maximum valuation and who can say and if

it was worth that? do you think it was worth 50 at one point? >> you are talking about a different world when these were v v evaluated? >> in the hay-day when not one cord was cut it's sad >> the numbers were as tro no, ma'am cal. the numbers -- the numbers were astronomical paramount is cutting costs nbc has never spent that money they were faulted for doing that they didn't lose the billions and billions that others have lost. >> jessica, thank you for being with us this morning we'll talk to you soon >> thank you coming up, microsoft plans to skip salary increases for full-time employees this year.

that story is next. later, democratic senator sheldon whitehouse lays in on the potential for e thdebt ceiling agreement to avoid default. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by truist wealth. where we focus on person-to-person connections so you can focus on what matters most thank you! like your workplace benefits and retirement savings. with voya, considering all your financial choices together... can help you make smarter decisions. for a more confident financial future. hey, a tandem bicycle. you can't do that by yourself. voya. well planned. well invested. well protected.

sfx: [alarm] every day you get to choose. do i want more? can i grow stronger? can i get better? bodyarmor lyte. more than a sports drink. microsoft will skip salary increases for full-time employees this year according to the email from ceo nadella microsoft nearly doubled the

budget form merit increases the budget will be in their words closer to historical averages the move including cutting 10,000 jobs which was announced in january. google will embed information in images to notify the user it is fake. software, including google's search engine will read it and display a warning to users google will provide this to improve deception. when we come back, more inflation data on the way this morning. we get you ready for the producer price numbers at 8:30 we will talk about that next. through the month of may,

cnbc is celebrating asian american and pacific islander heritage month here's citi private bank global head ida liu. >> it is really important for allies and those not in the asian community to understand the values and culture believes of asians. for example, we're brought up to be humble and modest and not tout our accomplishments and work hard and keep our heads down and be quiet and not booas or brag. those are the opposite things for corporate america. that is half the battle to understand more about the asian heritage and culture >> announcer: executive edge is

sponsored by at&t business at&t 5g is fast, reliable and secure bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business. it's hard to run a business on your own. make it easier on yourself. with shopify, you can have everything you need to streamline your shipping, returns, and product storage, so you can focus on growing your business. because when we work together, the future is bright. it doesn't have to be lonely at the top. join the millions at finding success on their own terms. start your journey with a free trial

today.

good morning welcome back to "squawk box. we are live from the nasdaq market site in times square. the nasdaq indicated up by 44. joe. markets get another inflation report this morning at 8:30 a.m. eastern. you know what's coming producer price index joining us to discuss the ppi numbers and the implications for the fed is carol at the family office and covering the economic angle is mike pugliesi at wells fargo. carol, i'll start with you what notable differences can you predict about the ppi versus the cpi? what is different and what are you expecting? >> i'm not sure there is a lot different. we hope to continue to see that moderating with inflation and

comparisons to last year should math make the comparisons easier we will look at what is happening at the good sector and services sector. the goods sector should see acceleration we have container ships cheaper than they were before the pandemic so, there should be easing there that should continue hopefully that trend where that would give the fed room to pause. >> when we do see a divergence with the ppi and cpi, historically, what causes it what could we expect with this report could it be a hotter number than the cpi? could it be a cooler number than the cpi? >> it depends on how wages factor in and employment issues and what the companies have in

terms of that input in there actually, a lot of costs should be reduced there are certain snags in the business for those trying to build out industrial and infrastructure where they are seeing delays much ove -- delays. overall, you see inventory delays there should be items in there to help producers especially since the rate of production has slowed some. >> michael, what will this number show? will it show the stickiness? >> i think it will show similar to yesterday with the cpi. no major surprises and directional improvement. not mission accomplished yet ppi, producer prices what are producers seeing further in the inflation pressure pipeline compared to

the cpi. what are consumers paying at the pump and grocery store the headline ppi is 2.5% once we get the data in a couple of hours. i think we will continue to see improvement and the market will like it. >> half of it sounds good. do you think the fed is finished, michael? >> i do. i think may was the last rate hike for the cycle i don't think that means cuts are coming soon. i think the fed will hold for the remainder of the year. although the market is priced for cuts later this year, i really won't be surprised if the fed needs to go one or two more times. that's not my base case, but i would not rule it out. i think they are done after the may meeting and sit on hold for a while through the end of the year and no easing until the end of 2024. >> do you agree with that, carol? >> that is similar we would hope that the fed

doesn't raise the next time. i don't think they needed to raise the last one or two times other than to keep stock market expectations in check. we expect them to hold level for some period of time to let the existing all of the rate cuts over the last 14 months really, really gel worst-case scenario, you might see one cut later in the year depending on how that credit tightening happens and if you have more cuts in the system by the fact that credit has been crimped. >> i would think, carol, bonds are not a very attractive investment right now you think yields eventually catch up with where the fed is going? the bond market is still saying cuts are coming. >> the bond market is saying cuts are coming, especially the longer end you have commodities at the short end relative to the debt

ceiling debate that continues to rage we actually think most parts of the curve are pretty reasonably priced right now and probably where they end up the year with a tight range. we tend to stay shorter on the curve. we are looking at some extended credit that is not necessarily tied to the government yield curve. >>ing interesting. you look at the yields, michael, the yields we're showing right now. if the long end is lower, it is all of a sudden you are a month from now or three months from now and people think if you go longer, you are down in the threes low threes >> the market does seem to be saying we will see slowness in the back half. that is why we stay in the short part of the curve. >> michael, would you waste your

time with a one-month bill or take what you get now on the 30-year? >> i think it depends on the risk profile and investor profile. there is a reason the longer-term yields are lower compared to 5% or more we will see fed easing and we will see more ezauricingore easg the think going is one to two years, rates will be lower than 5% >> mike, you suggest -- i'm score. you said it depends on the risk profile. is it risky to buy a one-month t-bill it is a government bond. >> it doesn't do you any good. >> that's the magic question with the debt ceiling. you go one month out and looking at right shy of the june 15th corporate tax date revenue we see what happens in d.c. over

the next few weeks we have another meeting coming up tomorrow. one-month bill has more risk profile today than it does in non-debt ceiling times >> all right thanks michael, did i say it right? pugliese >> that's right. >> got it for next time. a famous tv executive. i can do that one, carol henry was a court tv guy remember him >> i do. >> probably related to my husband. >> really? >> he's related to everybody, it seems. >> really? i think we all are in the human condition. if you go back far enough. >> right >> all the way to the garden all right. i know probably didn't actually happen that way i don't need that on twitter thank you to both of you

maybe. >> could >> was there an ark? >> i don't know. i wasn't there >> they found one. >> potentially >> heaven almighty >> i did see it. that is what you are referring when we come back, the bank of england's rate decision is due at 7:900 a.m. and later, don't miss our interview with vlad tenev. "squawk box" will be right back. >> announcer: currency check is sponsored by interactive brokers. the best informed brokers choose interactive brokers.

welcome back u.s. equities at this hour with the dow now flat essentially s&p futures still up 8 points. nasdaq up 34 points. we have seen the gains over las 40 minutes. the bank of england out with the interest rate decision at k 7:00 a.m it is expected to hike rates for the 12th meeting inflation remained high in march. a new estimate based on

yesterday's inflation data, the cpi, says the social security cost of living adjustment could be lower next year the senior citizens league said 2024 adjustment could be 3.1%. lower than the 88% increase to benefits this year the buying power of social security benefits has dropped by 36% if you go all the way back to the year 2000 the fastest growing costs for seniors is eggs and prescription drugs and heating oil and dental services and medicare premiums. before we head to break, check out the shares of unity software rising sharply up 9% after first quarter revenue beat estimates they beat the first quarter revenue. it is well positioned to benefit from a.i. since it offers four applications and services that support that technology.

coming up, exit interview with the ceo of honeywell darius adamczyk we will talk about the future of honeywell ahead of the investor day today. you can watch or lteisn to us live any time on the cnbc app.

dad, we got this. we got this. we got this. we got this. life is for living. we got this. let's partner for all of it. edward jones people are always asking me let's partner for all of it. two words come to mind for me. one is responsibility, the other is purpose. it's just so inspiring to do research that impacts human lives. stand up to cancer has been a critical partner in advancing research for cancer. cancer research saves lives. so please help us fight in this battle against cancer.

welcome back honeywell hosting investor day today. the company will start a new chapter who starts on june 1st joining us is darius adamczyk. he is the outgoing ceo. >> glad to be here

looking forward to the conversation. >> let's talk about what you see happening right now. honeywell out with earnings a few weeks ago. you raised earnings for the full year guidance expectation for the full year numbers were stronger than anticipated what do you see on the demanded picture? >> we see the demand continuing to be strong with the two biggest businesses which is aerospace and the trend just continues. the business is strong bookings look good we have great visibility record backlog we probably have too much backlog. we are working through the supply chain to get it all out we are increasing output i see no issues on demand. the second biggest business is performance and technology which is energy oriented the demand there is strong when you get to consumer oriented or retail touching segments, those are softer

warehouse ought an -- automation is softer because of the k capacity built out in the pan pandemic through q1, we actually did better than expected from the booking perspective. that is what allowed us to raise our outlook for the year the thing i really watch going forward is what's going to happen when the savings rates for the consumer drop below 2019 levels they're still high the consumer drives 2/3 of our economy. that is a wait-and-see model for me the projections are that will cross over in the second half of the year just like everybody else, i'm curious to see what we will see in the second half so far, so good. that is what gave us confidence to raise outlook. >> we have seen weakness with the travel plays

like airbnb. we talked about how they have seen weakness in the consumer pulling back on some levels. the question is does that impact air travel as some point that is between capacity that they are long overdue. you have a long enough backlog you think that insulates you for quite some time? >> we got a backlog that's years long i listen to some of the airline ceos, it looks like their summer demand looks quite strong, still. i don't know about you, but if you try to book a hotel in a resort destination, it is very difficult. demand still appears to be strong it may be softening a little bit. but we have to remember that's coming off with some peaks we saw in the last six to 12 months. >> a lot of questions raised about the future for honeywell because the company's performed well, but it is kind of hard to pinpoint what it is. and is this going to be a company that adds by buying other companies, is it going to be something where you spin off additional units

what is the answer think that people view us as maybe a conglomerate, which i don't think is completely fair. there is a common theme throughout the portfolio and that's controls and automation that's what we do. we do that in just about every business we play in. the answer is we performed, we're going to continue to perform, i'm very optimistic about what we have done, i think, you know, we have an operating system called accelerator that we use exclusively. we have been our business units, produced results, that's generated compelling returns so, you know, the question isn't should you be multiple businesses or should it be a pure play, it is how you perform. and the formula works. we continue to innovate. we had two breakthrough technologies that we launched this week. one in quantum computing, the other one in green fuels so, i think a company has a lot of gas left in the tank, and i'm very optimistic about its --

>> you should use a different term gas left in the tank i just think that makes me uncomfortable. i think you're talking hydro carbons. did you see this biden cracking down on -- "the journal," biden cracks down on gas stoves that is happening, but not confined to gas stoves washing machines, dishwashers, air conditioners you make a lot of these things, don't you? >> not anymore >> any -- but some home climate -- >> we don't -- no, we actually don't do anything for the home anymore, joe we spun that business in 2018. we're much more commercially oriented >> when we had the segments up, bring them back up for honeywell, what is in that segment that we showed for the home it says there -- >> this is more commercial buildings, things for -- >> not for homes >> not for homes. >> should we take that out home technologies? >> it is building technologies. >> really? we need a new -- we need a new

chart to update it to get to -- >> yes >> you saw the -- the inflation reduction act and what's in there. do you think that in your -- where are you from originally? >> powen. >> we're moving into a more -- the government is more involved in a lot of things that we do, choosing investment for the private sector a lot of this right here, we have to adhere to a lot of the regulations now, the industrial sector has to do that. are you okay with that will it work better or do free markets and market choice -- consumers, that's the point of this journal piece is that appliance buyers who prefer the supposedly climate friendly aversions are always free to choose those, but the biden administration is intent on foisting the green choice on all of us. are you okay with the biden administration foisting the green choice on all of us? >> i think it is a complicated issue, right >> that's a good -- you need to stay as ceo. that's such a good ceo answer.

you haven't studied. >> there is very few things in life that are black and white, right? i think a lot -- >> really? >> absolutely. there is very few things that are black and white. >> so, okay, so, so i'm not sure what your answer is. it is okay if the government decides which appliances consumers need to choose to migrate -- >> he doesn'tmake any of those >> i know. in general but, look, you don't think industrial companies have to adhere to regulations, green regulations? you just said you made some green fuel and i don't think you mean it was a green color, was it >> a lot of it is incentives, not that -- i think that is a different -- that's a different debate we have done incentives for year and years, whether that's the energy company or other things, i don't agree with the subsidies on these things but that's different than saying you can't own these or make these. >> right >> look, you know, we have -- becky is right, it is in the form of tax credits, those are the incentives

and i think we supported some of that maybe not all of it. we are in a -- we do have green fuel technologies. we just launched new ones which actually take green hydrogen and co2, you now have -- you create some of the fuels. i think in all that's a good thing. >> stuff that probably would not be profitable right now. >> sure. but any time you try to do something new and different, that creates a new source of energy, i mean, you need a little bit of a stimulus to actually get it moving so, yeah, is it going to be economically viable? >> europe may have dodged a bullet this year it wasn't a cold winter. you saw that -- they weren't prepared for a cold winter and once putin invaded ukraine, suddenly all those moves that you're talking about that were government sort of foisted once again, they come back to haunt you. tax incentives, there is only so much capital in the world. if you're blowing capital on

things that cost ten times as much versus the existing energy that we have, that might not be a great investment even if you are going to -- >> i think it is hard to argue that some of the elements of the european energy policy were -- need some improvement. let's put it that way. i think there are things for us to learn as we assess that but it is not an easy path if we do nothing, then we're just going to keep doing what we're doing forever. there is some balance between lessons learned from others, what we can do and whether it is other incentives, because if we do nothing, we're going to continue the path we have been out. i'm not sure that's the right thing either. >> darius, you are going to be in the situation of -- as chairman what are you looking to do because a year ago at investor day, you had $25 billion you were looking to spend on potential acquisitions do you have more cash at this point? and are prices finally coming down to make something look affordable >> we just made an acquisition a few weeks ago, compressor controls company, which is a controls company, very much in

the theme of automation controls we do have cashable -- we did buybacks last year and what's different now is that we see less competent signifi competition for assets so i'll be helping in m&a and business development and so on and strategy, outreach to customers, and, you know, supporting him in any way i can. honeywell is a fairly large and complex company, and the more i can help, i try to spend my tenure simplifying and making it easier to run. >> you'll be a ceo somewhere else, won't you? you're a baby. >> i don't know about a baby. >> you're 55 >> 7, 7. >> baby. baby is it possible will you end up somewhere else >> i never say never to anything but i've been very lucky and fortunate to have run honeywell. it has been a great experience for me and he's ready, he's same age as i am and time to give him a shot to run it.

i think he's going to do a great job. >> still running berkshire he's 90. >> 92, yeah. >> got another -- that's 35 years, darius. >> well, you know, i got other interests in life too besides running just businesses. . darius, thank you for coming in >> thank you. >> good to see you >> darius adamczyk "squawk box" will be right back. (cecily) you're looking pleased with yourself. (seth) not to brag, but i just switched to verizon. (cecily) so you got an awesome network... (seth) and when i switched, i got to choose the phone i wanted. for free. not bragging. (cecily) you're bragging. (neighbor) oh, he's bragging. (seth) who, me? never. oh, excuse me. hello, your royal highness, sir... (cecily) okay, that's a brag. (seth) hey, mom. i gotta call you back. (vo) visit your verizon store during our spring savings event and choose the phone you want, like the incredible iphone 14, on us.

verizon you founded your kayak company because you love the ocean- not spreadsheets. 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

you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart!

good morning after yesterday's cpi falling to its lowest annual level in two years, investors now turn their attention to producer prices futures are flat ahead of that data president biden and the house speaker kevin mccarthy are set to meet again tomorrow on the debt ceiling treasury secretary janet yellen with a new warning overnight, we'll get to the latest on the default debate plus, bob iger says disney plus is on a path toward profitability. we will talk about the company's latest quarter and its plan to integrate hulu into its service streaming platform the second hour of "squawk box" begins right now

good morning welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen with becky quick. andrew is off the day. traveling, i think he'll be back tomorrow u.s. equity futures at this hour are now actually in the red. at least for the dow nasdaq up 32 points or so. s&p up about 7 interesting day yesterday. we were all over the map with the -- most of the session dow down most of the session there is the -- after the cpi that we saw yesterday, we did see yields fall. the ten-year now at 3.42 and the two-year, below 4% again. that could all change when we get the ppi numbers today for producer prices. >> right now we have some breaking news out of europe when it comes to rates. the bank of england raising its key interest rate by a quarter point. that was the expected move the central bank is forecasting that inflation will fall to 5.1% by the fourth quarter of this year that's down from over 10% in

march. and overnight, china's consumer price index in april declining by a tenth of 1% from the prior month. on an annual basis, it rose by just a tenth of 1% and that would be the slowest rise in prices since early 2021. right now, we want to get to dom cheu, looking at the premarket movers what are you seeing? >> we'll start internationally with shares of japanese investment conglomerate softbank those shares in japanese trading finished slightly lower, just down about three-quarters of 1% in tokyo trading due in part to headlines around the flagship vision fund, which lost roughly 297.5 billion japanese yen, around $2 billion in terms of translation there. softbank was hurt by underperformance in some of its smaller portfolio companies despite a rebound in some of the larger cap tech names internationally. softbank in the headlines. shares of robinhood now up pretty decently.

around 5% or 6% or so. the stock and crypto trading platform beat revenue estimates but reported a loss for the quarter. it announced it will start offering a 24-hour trading platform for stocks and etfs during week days so all of that is playing in and by the way, the ceo will be first on cnbc in the next hour to talk about those results and what he sees as the future for retail trading in the months and years ahead. and we'll cap things off with a check on shares of a couple of transportation-related stocks here you see norfolk southern up about 2% and jb hunt up about .25% if you look at those, it is thinner trading so far in both of those particular names. but what we do have is analysts over at jpmorgan who have now upgraded both of those stocks to overweight from neutral. for norfolk, they're citing gradual recovery as investors move beyond the east palestine ohio derailment headlines, better service metrics and deeper discount valuation compared to competitors csx.

for jb hunt, it is about what is expected to be a recovery in the rates that trunking companies can charge to haul freight some of those names in focus right now, joe i'll send things back over to you. >> very good, dom. thank you. our next guest says that the stocks and bonds have been in a trading range, while the bulls and bears have been duking it out. investors are getting paid to wait let's bring in emily rollin at john hancock investment managing what do you mean how should we do it? big dividend yields, emily >> yeah, well, you had this mantra emerging this year that the data have come in better than feared. i think we should probably have some bumper sticker made and you see it across earnings results, you've seen it across the economic data and it caused this sort of sideways choppy action across those stocks and bonds, the bulls and bears, no one is winning here in this argument and we're looking at the fact you're earning 5% in yield, high

quality investment grade bonds and essentially waiting, getting paid to wait as this volatility plays out. and as we ultimately do believe a recession unfolds later this year, so that's our highest conviction idea. we do still want to own some stocks, but we want to be thoughtful about it. higher quality areas of the market with great balance sheets, lots of cash on their balance sheets a limited need for the capital markets to grow, more defensive areas of the market. that's the playbook for the remainder of this year. >> we're a year and a half ago, we're high quality bonds something you were buying or is that a relatively recent thing >> it is relatively recent and in fact, i've been putting an outlook out for almost ten years now. and last quarter was the first time that we had ever been overweight bonds you look at a three, five-year time frame, stocks are always going to be a better option. they're more powerful compounder of wealth, but we're seeing a massive opportunity here as last year we saw three standard

deviation event in high quality bonds. the aggregate bond index fell 13%. the most in history. and we're looking at that backup in bond yields as an attractive opportunity. i'll tell you, going into a recession, bond yields across the curve fall precipitously you had a guest on earlier this morning talking about becky asked about the risks owning shorter term paper, which is yielding more than the intermediate part of the curve the risk is significant. it is reinvestment risk. a year from now, that yield is gone moving out of the curve, locking in 4%, 5% on high quality bonds, it is boring, but i think we're going to look back on this as a really attractive entry point. >> back when, you know, back when i walked to school both ways uphill, back when tax free bonds were 13%, triple tax free bonds were 13% think about what was the risk of buying a one-month piece of paper when you had 20-year tax

freeze the opportunity you missed for something like that is staggering what did you get in the high yield corporates that you were buying could you get 5% and 6%, emily >> yeah. and right now by the way, speaking of high yields, you just don't even need to go down the credit spectrum in order to generate yields that attractive. so, you know, from here we see the opportunity not only for duration to become a significant tailwind in fact, the yield on the ten-year treasury falls on average about 2.5% into a recession, looking back at the last four cycles that's almost a double digit duration tailwind, in addition to the 5% year dating on investment grade corporate bonds. to us, we're doing the math on every asset class across markets and the math just isn't that good anywhere else today >> if long-term stocks yield 6%, 7%, you can get as you're

saying -- what about converts? do you do converts or preferreds or bonds >> not the worst area. but if we were to stack rank them, high quality bonds would be number one. potentially, you know, going into credit over equities now. the s&p 500 is trading at 18 times forward earnings right now. i do think that there is some pockets of opportunity, there are few areas that are trading at a discount. we look at midcap value as one of those places in the market, but there is just not a lot of stuff on sale today. we want to wait out this wait cycle environment. markets are chopping around. we think they eventually respond to the lagged impact that has been tightening. but right now we're in this never-ending late cycle environment where it is taking a long time to squeeze inflation out. we want to still have exposure to some offense in the portfolio, as we wait this period out we're treading water, it is getting tiring, continue to tread water by participating in

this market. but i think owning quality, owning defense, embracing bonds is the name of the game. >> when you go up 500 basis points, you might as well own some yields, stocks or bonds emily, good advice thank you. i think that's like an insurance company, sort of a lot of money they have to invest, it has to be there down the road and it is kind of a different -- >> growth as much as you're looking for absolute security. when we come back, the battl over gas stoves is on the front burner, so to speak. d.c.'s attorney general is calling for federal action to address concerns over health and safety risks he will join us right after this break. and then after a booming market, the past three years, could the art market actually be cooling off? robert frank will join us with some new data. "squawk box" will be right back.

i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. life is for living. let's partner for all of it. i'm so glad we did this. edward jones

i'maany questions?dyhis. -yeah, i got one. how about the best network imaginable? let's invent that. that's what we do here. quick survey. who wants the internet to work, pretty much everywhere. and it needs to smooth, like super, super, super, super smooth. hey, should you be drinking that? -it's decaf. because we're busy women. we don't have time for lag or buffering. who doesn't want internet that helps a.i. do your homework even faster. come again. -sorry, what was that? introducing the next generation 10g network only from xfinity. and this is ready the to go online. now. any questions? -yeah, i got one. how about the best network imaginable?

let's invent that. that's what we do here. quick survey. who wants the internet to work, pretty much everywhere. and it needs to smooth, like super, super, super, super smooth. hey, should you be drinking that? -it's decaf. because we're busy women. we don't have time for lag or buffering. who doesn't want internet that helps a.i. do your homework even faster. come again. -sorry, what was that? introducing the next generation 10g network only from xfinity. the future starts now. new york becoming the first state to ban natural gas stoves in most new buildings. and calls for federal oversight of the common appliance are starting to gain traction. 11 attorneys general urging the consumer products safety commission to address the health and safety risks associated with gas stoves saying in a letter that air pollutants from the appliance are putting children in underserved communities at risk of asthma and other respiratory illnesses. joining us right now is the man

leading the charge, d.c. attorney general brian schwab. and, sir, thank you for being here today there is a lot of confusion that has been kicked off by the charges that gas stoves are dangerous to people. and people who are now wondering what to do about things. what would you tell them >> good morning. thank you for having me. this is an important issue for public health and safety as well as making sure consumers have good accurate information about potential risks associated with appliances in their home the data and science tells us that gas stoves do in fact emit pollutants, creating indoor air pollution that can make people sick here in the district of columbia, we have more than 16,000 young people who suffer with asthma. and we know that having a gas-burning stove in the house makes kids 42% more likely to be suffering with asthma symptoms so this is an important issue of public safety, and making sure

consumers have clear information so they can make informed decisions about the appliances in their home. >> i mean, i've dug through the research on this and tried to figure it out. and there is a lot of back and forth debate most of the studies on the health effect of cooking gas have been observational because obviously it would be enethical to expose children intentionally to environmental risks but, most of the problems seem to be linked back to when those appliances aren't maintained properly for instance, you could have no2 concentration in indoor settings and carcinogens that are there if it is unburned natural ghas is gas and all kinds of other things what do you say to that? are you calling for people to rip out their gas stoves, get rid of them? >> absolutely not. we're not talking about ripping out gas stoves that's the exaggerated

hyperbole. we have a process with the consumer products safety commission gathering information. and that was the letter that i and ten other state attorneys general sent to the commission gathering information to try to set forth a uniform standard, gathering so that we don't have misinformation or confusion in the market, and people can make informed decisions about the science. there will be an opportunity for people to contribute their views, and the process should result in uniformity in a better sense of confidence for consumers and homeowners to know what the risks are, how they can mitigate those risks, even if somebody is not going to take a gas stove out of their house, they may think about the next time they're renovating their kitchen or making an appliance change to making a change. also -- >> if it is really harmful to your kids, you don't just think about well, maybe next time. are you sure this isn't a trojan horse here when i read it, i initially thought it was about co2 and it just happened toe biden

administration cracking down not just on gas stoves, lighting, furnaces, washing machines, dishwashers, air conditioners, across the board, because of co2 emissions. and you said the air pollutants are released, are you including co2 as a pollutant being released by -- are you talking about actually harmful to children in the house at the time what are you talking about adding to climate change or actual harmful to people that are living there >> we're talking about, thank you, joe, we're talking about pollutants in the home that are harmful to children, to seniors, to those who might have respiratory vulnerability, talking about nitrogen dioxide, materials that have been shown to have an adverse impact -- >> but is it in a poorly maintained thing >> it can be >> i never liked electric stoves they take too long

let me ask you this, are you okay with electric stoves if natural gas is powering the grid that you get your utility? is that okay with you or you shi we shouldn't be having natural gas power the grid for the electric stoves? >> my focus at the moment is on indoor air quality for people who live in the district of columbia i'm concerned about the residents of the district of columbia too many of whom are living in dangerous conditions for a variety of reasons and particularly here in the district of columbia, some of our underserved communities, east of the river, have disproportionate levels of asthma, asthma hospitalizations, and as you know, joe, you know, when a kid is sick with asthma, has to go to the hospital for asthma, huge impact on learning, huge impact on the earning of the family, where moms and dads have to take time off from work. so, we want to make sure that people are safe, we also want to make sure people have information to make informed decisions about how to keep themselves safer

it may be -- >> this sounds like it is a call to go ahead and rip gas stoves out. >> i would do that >> if you're telling me this is the cause for it, i do want that out. i think this gets back to the consumer confusion is this a problem, where we need to take out our gas stoves or not? >> one of the good things that will come from this process that the consumer product safety commission will do in the course of its gathering of information and gathering insights is give some clear direction to the country about the best way to keep people safe it is not practical. nor are we urging that people rip out their gas stoves right away we are urging people to -- >> if my kids are exposed to this -- >> you may want to make sure the ventilation in your stove is well used. you want to understand if there is going to be gas emitted in your home that you're ventilating it so you're reducing the risk. and i know as parents, it is important to both of you to be aware of risks, so that you can take steps to protect yourselves and your family. that's important to everybody. and that's really what the cpsc

process should do for everybody across the country >> i mean, i have to say, it has been an issue. i got a gas stove at home and it has been an issue i thought lot about and tried to figure out. i think all of this debate has certainly concerned a lot of parents. >> absolutely. and that's important for all of us who love our kids we want to know what the potential risks are. look, for many years people didn't think there was any risk associated with driving with your kids in the back seat without a seat belt on and we evolve and we get smarter as a society and we understand that new risks based on the science and data can be aware and we can try to make ourselves safer and healthier. that's how we get smarter. >> i'm thinking those -- >> it would be good -- if you really maintain everything to the highest standards, that's what i would like, i would -- you know, people prefer gas stoves that takes me forever to get a pot of water boiling when i go away somewhere else and it is an stove, it is much

more difficult to do anything. the preferred method would be now natural gas. if you can make it safe for maintaining a system or is it -- that's what we're trying to get to the bottom of here. >> it is a great question, joe something we should talk about, but the preferred ways of doing things don't always mean the safest ways. >> i understand. i like to know for sure. >> people preferred for a lot of years to smoke cigarettes. people preferred to be around people smoking cigarettes. >> you arhave a gas stove in yor house, brian >> i do. and i appreciate being able to be aware that there are risks associated with it so that i can protect my family and my girls and make sure the ventilation works. all of that is important to us absolutely so that's really what this process of going through a rule-making and information gathering process is so important to make sure people across the country know the risks and can protect themselves >> i'm serious when i say it reminds me of the nonstick pans. that is something that i used in

my house for years, took us a while to figure out that's not a good idea. but, yeah. it does matter. >> i can't believe, brian, my daughter lives down there. i was worried about so many things in d.c. already and now i got -- and i think she's got a gas stove, so -- >> joe, we're -- >> there is some other things to worry about down there, i can tell you, as a father. >> i'm delighted your daughter say resident of the district of columbia we look forward to you when you come visit from new york. >> i do like it down there. >> good, good. >> keep my eyes open all right. >> brian, thank you. >> thanks. >> thank you very much for having me. >> good to have you on. still to come, shares of disney are lower earnings and revenue matched estimates but a surprise loss of 4 million streaming subscribers. i think we were one of them. most of them were in india >> yeah. there was a change analysts expected a slight gain. we'll talk about the quarter and bob iger's plans for disney plus

with media executive tom rogers. mr. rogers will be on. here are the futures now down 87. nasdaq up 7. time now for today's aflac trivia question. who holds the record for winning the most academy awards? the answer when cnbc "squawk box" continues get used to this retirement thing. ahhh! coach k, there's a goat here. the story of my life. no coach, there is a goat here! whaaa! what's this? a thousand dollar hospital bill? but i have good health insurance! gaaaaaap! did you say 'gap'? he's talking about the expenses health insurance doesn't cover. but with aflac, you can get money to help close that gap. aflac, huh? gaaaap! aflac! gaaaap! get help with expenses health insurance doesn't cover at aflac.com

now the answer to today's aflac trivia question. who holds the record for winning the most academy awards? the answer, walt disney. he won 22 oscars during his career and four honorary oscars posthumously after the art market boom of 2021 and 2022, with over half a dozen works selling for over hundred million dollars, sales are likely to be more muted. robert frank joins us now with more do they have any nfts at these places >> the nft market faded they do -- becky loves rock -- >> you're look for -- nobody

draws a line across two colors like -- >> he was the best. >> he was amazing. >> he was the best you have more than $2 billion worth of art scheduled to hit the auction block. volatility in the stock market and the economy likely to limit a lot of that bidding. the march sale in london, that's a precursor, that was down 24% over last year with half the number of works selling for a million or more. the may sales, which start tonight in new york, and next week, none of the works estimated at over $50 million. a lot of that is due to supply, but also because bidders aren't as confident now given what is happening in the financial markets. >> we have to sell these paintings for very high prices it hits in the same -- it hits the same audience. so, to say i don't feel the overall mood would be wrong. >> now, the star of the week is this transcriptic at christie's, it sold at auction in 2005 for

$5 million the estimate now is $45 million. they have a beautiful picasso, a portrait of his golden views, marie tores, estimated at $40 million. sotheby's will sell a rare landscape painted in 1901, gorgeous piece, expected to sell for over $45 million >> that's something i could get into. >> in is gorgeous. two big clollections headed to sale jerry feinberg, he was boston real estate investor, that's likely to top $270 million this all starts tonight with sy newhouse, the conde nast owner

the billionaire types that buy this stuff, they're largely unaffected everyone is affected by asset prices and the cost of money right now. >> what? >> i can't resist. any hunter bidens coming up for sale >> no idea >> you know -- they sell for $80,000, you know that but none in this particular -- >> not that i'm aware of. >> okay. not that you're aware of i do that for twitter. you're laughing. you like it. >> you love getting the twitter love. >> i love getting the twitter love i just -- i mean, when you look at nfts, you look at crypto, you look at art, chinese ceramic pottery, you look at -- what are these? how do you characterize those? >> they're assets. >> inflationary environment, why aren't they going up >> well, that was the argument for art. traditionally it is a great inflationary hedge but -- >> rampant inflation well, it is coming down. >> by the same time the pace of

interest rate increases is -- has caused every asset so the minds of the buyers today is just every asset that i have except for some real estate is going down so therefore why should i pay the same price for this painting as i would have in 2021 all these prices are going to come down. the question is how much. >> so my chance of getting a suteene for a thousand dollars -- >> it would be a postcard from the gift shop. maybe framed. >> for a thousand dollars. >> maybe some poutine. french fries with the cheese and stuff. >> but not a suteene >> poutine >> i thought you were saying pooph. >> picasso to pooph, we cover it all. >> hunter biden. >> still to come, disney shares are lower after the company reported a surprise loss of 4

million streaming subscribers. we'll dig through the company's quarter. the latest in washington on the debt ceiling as president biden is due to meet with house speaker kevin mccarthy again on friday, which is tomorrow. tgi tomorrow stay tuned you' wchg quk x.reatin"sawbo this is cnbc

what if you could make analyzing a big bank's data... no big deal? go on... well, what if you partner with ibm and red hat, use a hybrid cloud solution to connect data across multiple systems globally, then analyze all that data with watson. okay, but this needs to meet our... security standards? yup. compliance standards? mm-hmm. so they get the insights they need... yup. in real time... check. . ..to make quick decisions? check. aaaand check. that's the hybrid cloud solution ibm and a global bank created. what will you create? ibm. let's create. ♪ ♪ ready for the big show? buckle up. ♪ ♪ i'm not gonna lie to you...

that was awesome!

welcome back to "squawk box," everybody. the futures this morning actually have taken a turn for the worse if you're watching the dow right now. we're below fair value, down by 76 points below fair value s&p futures are still flat, just barely in the red. and the nasdaq is still up by only by about 22 points we have breaking news on pacwest. dom chu joins us for that. >> we want to call your attention to the shares right now. down 25% or so in the last five minutes or so. down 25% now this is one of the embattled western regional banks close to the fallout of silicon valley, first republic shares are getting hit hard now. just about 2.7 million shares of volume the proximate cause is an update from the bank, which said it lost around 9.5% of its deposits

in the week ending may 5th with the bulk of those outflows happening on may 4th and may 5th after reports that pacwest was exploring some strategic options for some of its assets now, pacwest did also add that it has around $15 billion worth of on demand and immediately available liquidity. and has the ability to meet its cash flow requirements for the next 12 months the news may be part of the reason why you're also seeing other western regional banks, like western alliance, zion, bank of hawaii and others taking hits in the premarket as you're seeing there though not to the extent of pacwest. still, joe, becky, it is an important development here in what was seen as a stabilizing trade at least for some point over the last week or so we'll keep an eye on it. i'll send things back to you, joe. >> just to be clear, dom so that's what happened on may 4th and 5th for the weekend. it is may 11th today they give any insight as to what happened since then?

>> not yet this is according to a company the company had its filings. we can probably expect as has been the case, anytime there have been really market moving events like this tied to news about deposits, we would likely expect to hear pacwest, maybe even other banks, provide some kind of an on the record update or filing, talking a little bit about their deposit base in the wake of this pacwest for right now, it is about the weekend of may 5th, we'll see if they give us another update to tell us whether deposits are stabilizing in the days since then, becky. >> you got to think of it because last weekend i think everybody was relieved that we didn't have a bank that we were dealing with that's what happened on thursday and friday and guess what, it is thursday, again. tomorrow is friday and that will raise questions about what to anticipate this weekend. >> remember, becky, it was also -- that same kind of time frame where there was that story, right, from the ft, about western alliance and whether it was looking to do some kind of

strategic option change and the bank came out and flatly denied it in an on the record statement, saying the reports were false and everything. so i kind of feel like many of the folks in the public relations and investor relations departments of these banks are probably now very hypersensitive to any kind of comments coming from even their peer organizations out there. >> not a lot of shareholder equity left, dom that's before that move today. it was 730 million we're talking about half -- all the way down to half a billion dollars now of market cap. pacwest. not a lot of dollars left to go down thanks, dom. on disney's earnings call yesterday, bob iger made an announcement that the company would be combining hulu content with disney plus into one app. >> i mentioned the first earnings call i did after i came back that everything was on the table. and in fact everything was on the table. but i've now had another three

months to really study this carefully and figure out what is the best path for us to grow this business. and it is clear that a combination of the content that is on disney plus with general entertainment is a very positive -- is a very strong combination. >> joining us now is tom rogers, game square executive chairman, former nbc cable president, and the cnbc contributor and he's going to be a stock market analyst for us right now, whether you like it or not i think there is positive things iger said yesterday. why is the stock down today, the subscriber losses? was that a surprise? >> the stock always trades on subscriber losses. but for other reasons i think the market has gotten this right. first, we got a pretty good hint of what is going to happen to hulu i can't imagine that disney would begin to integrate hulu and disney plus without having figured out over the last three

months that comcast is a seller, not a buyer, so i think that's how that asset will end up i think we also learned that disney plus is just growing too slowly and it needs general entertainment programming to recatalyze its growth. that's pretty clear as well. i think that he made a very big deal about advertising and the future of advertising and getting disney pricing per sub up by using advertising. but for the life of me, i can't understand why they haven't been pressed on how now for the fifth straight quarter, hulu advertising revenue per subscriber is down hulu's the granddaddy of selling ads on premium streaming services, been doing it longer than anybody else. and for five straight quarters, their advertising revenue per sub is down but they're pinning a lot of their hopes on driving

pricing per sub for disney plus on the basis of advertising and that just was unexplained. and then, of course, i think what really has the stock moving down is legacy tv declines accelerated. and they're not at the precipice yet. but those declines are precipitous and it is pretty clear they're going to become more precipitous and while we have seen the whole streaming analyst world move from sub numbers to the question of profitability, where it hasn't moved yet and where all the media companies need to be pressed is the growth of streaming as it moves toward profitability ever going to make up for the decline in the traditional television business. no one has really demonstrated yet how they believe the whole left by the decline of legacy media is going to be made up by streaming, and until that happens, it is really hard to get too excited about anything

on the streaming side because that's the essential question. >> i was going to ask you, how can everything go down we still consumed content. is it digital, analog dollars, digital nickels, that's the new world. people are cutting cords legacy tv is bad, streaming is never going to make any money. are people playing games all day long why can't you monetize content anymore, tom >> i think you can monetize it i think clearly we're not talking about digital pennies here because there is substantial revenue being driven off the digital businesses what you got to compare it to is the best media model ever known to man that cable and satellite channels were paid across every home regardless of how many homes were watching it and streaming, you have to get your money out of homes that are actually watching and using and then not churning when they're finished with their favorite show and that's just a much tougher

model and much tougher business. so, as you look at media growth, you have to say is that media model that is being moved to ever going to substitute in terms of quality of earnings relative to the model that all these companies used to live off of and that's still a totally unknown question i think what we do know, i've been saying for a while, that netflix will be the most valuable media company in the world. i think you can probably say it already is when you look at disney and separate out the parks business, which is a very good business. but i kind of look at it in the travel and leisure sector more than a true media business, when you look truly at the media side of disney and compare it to netflix, netflix is a much more valuable company. >> i would have thought that narrowing the streaming losses, that's what everybody wants. let me ask you about the -- is comcast happy there was a floor

on hulu? is it -- when you get 9 billion, do you say thank you, thank you? is it worth less than that >> well, the question of what hulu is worth is a question of what programming comes with hulu does it -- does it come with fx programming, you know? that issue of hulu as a distribution entity that has 40 million plus subscribers versus hulu as a programming entity with the value of that programming built into it are two separate things. i don't think disney ever would sell the general entertainment assets behind hulu that it owns just for the purposes that iger said he needs to combine that with disney plus to propel that service. and so, if you're looking at just the hulu shell so to speak, 9 billion is a pretty good gift.

>> yeah. that's not bad all right, tom, we're -- it is hard to get your head around the content costs, people expect such great content now, that's going up >> it is a tough game. they're all talking about cutting what they produce, the product, and raising price in an increasingly competitive environment where these guys never had to compete against each other to get into the home. they're all for the same bundle that got them into the home. now they have head to head competition to get into the home, while they're reducing their programming, raising price, all up against the competitor netflix who is already substantially profitable and can continue to afford producing at a level that is way beyond what any of the others can afford. >> all right all right. tom, what did you think of the town hall?

is cnn back? >> well, that was quite a spectacle last night >> like barnum and bailey. all in one ring. anyway, thanks, tom. we'll leave it at that appreciate it. we'll see you later. >> thank you for having me. what investors can expect from tomorrow's meeting between house speaker kevin mccarthy and the president on the debt ceiling. later vlad tenev from robinhood how about all weekend? let's go. ahora! i'm a miami hotel. i'm looking for someone who loves art deco elegance, good times, and unexpected flavors. someone who likes it hot but knows how to keep their cool. a white-sand beach where you can see the sunrise? way better than whatever you were going to binge-watch this weekend.

and you could be here in half the time. find me at hotels.com ready to take your business to the next level? scale it with the commerce platform, made for entrepreneurs. shopify is specially designed to help you grow your business. with easy, customizable themes that let you build your brand. marketing tools that get your products out there. yeah, way out there. shipping solutions that actually save you time. and that's just the beginning. from start ups to scale ups. online, in person and on the

go. shopify, your all in one commerce platform.

still to come, treasury secretary janet yellen offering a fresh warning over the need for the white house and congress to reach a deal to raise the debt limit we're going to talk about what a potential deal could look like and whether or not it is likely. we'll handicap that when we come back. also, a reminder for you, you can get the best of "squawk box" in our daily podcast. follow squawk pod on your favorite podcast a appnd listen anytime. "squawk box" will be right back.

when i was his age, we had to be inside to watch live sports. but with xfinity, we get the fastest mobile service and can stream down the street or around the block! hey, can you be less sister, more car? all right, let's get this over with. switch to xfinity mobile and get the best price for 2 lines of unlimited. just $30 a line per month. i should get paid more for this. you get paid when you win. from xfinity. home of the 10g network.

the notion of defaulting on our debt is something that would so badly undermine the u.s. and global economy that i think it should be regarded by everyone as unthinkable >> that was treasury secretary

janet yellen overnight speaking to reporters about the debt ceiling showdown in washington as finance minister and central bank governors meet in japan president biden is due to meet with speaker of the house mccarthy tomorrow. and joining us is david mcintosh, president of the conservative pac club for growth and evan bayh. i don't think i can take another conversation talking about talking points from other side, people trying to get through and negotiate through the media. fortunately you are both reformed politicians i'm hoping we can have a more reasonable conversation about what's happening here. let's start with the basic premise. is it a bad idea for us to default on our debt? senator, i'll start with you >> hopefully, becky, we can

bring some common sense to the discussion yes, it's a terrible idea. we've not done that before it would run a lot of risks going into an uncertain situation. if we have a marshaling down of interest rate, it's going to affect interest rates. it would be a little bit like going to your bank and asking for a loan for your business or to buy a new home or a car but say to the banker and saying from time to time i may consider not repaying you or paying you interest the banker is either going to not give you the loan or charge you more for the risk. with possibly recession on the horizon, this is completely the wrong time to jump off into the void, which would be a default

on the national debt >> kind of like student loan >> that's kind of like that, joe. as usual you're the voice of reason people should pay their student loans due. >> go ahead, senator >> i was going to say if you're looking for consistency in washington, d.c., you'll be looking for long time. david will agree with this i'm sure democrats and republicans before have voted to raise the debt ceiling without any issue when their president was in charge. >> but half the time there are some things that happen. more often than not it's not just a clean raise, evan >> well, joe, i'm in favor of my own party agreeing to spending restraints i think we're on an unsustainable spending path. the compromise is we should raise the debt ceiling so we're not holding a gun to the head of the economy and democrats should say, okay, now we're going to get serious. >> can you stick around for

sheldon white house? he's coming on in about 20 minutes. that's exactly what we're going to get in about 20 minutes >> congressman mcintosh, what do you think? >> well, first of all, i want to agree with my fellow hoosier in fact, i wish he were sitting there in the white house advising joe biden because i think we would have had a deal on this a long time ago and it would have been a good one first of all, there may be a technical default but as senator toomey pointed out, treasuries will be paid back, interest will be paid on them and sanity will return i wrote an op-ed with jeff gas, one of the brightest investors in the country his estimate is the market cap would go down about 2% that's a big hit there would be a flight to safety in the bond market but we also pointed out if the president would simply sign the republican bill, there is a republican bill to lift the debt

ceiling. if he'd sign that, that's a 4% projected increase in market cap. so you got a 6% swing between high and low there and that's an obvious poise for the right answer the president should sit down, take the bill or most of the bill there's some political things in there they can negotiate about, but the core of putting a restraint on spending, which evan just mentioned he would be in favor of in principle, the core of that republican bill is right there. and it's a $4 trillion savings right before the president and he's a negotiator. he's not going to come in with a take it or leave it attitude something has to change from the current course

>> you say there's a compromise, though i'm not sure. would you both agree that there's a deal to be had congressman, i'll start with you. >> i think so. a lot of my friends, the folks at the club for growth say take it or leave it if kevin comes back and says we've got 4 plus trillion in cuts in projected spend being over the next ten years, i couldn't get the white house to agree to of one of their political things like the green new deal or student loan we might get some of those but i think republicans are in a strong position. they've shown leadership, they've got a good bill in front of them. if kevin comes back with some real reduction in spending, he'd have support and i think the president would be able to take credit for it and credit for the boom in the economy. >> i hope that people in washington are listening to you two right now.

i wish they would kind of adopt some of your own measures, things that you yourselves would do and have done in the past but thank you both, congressman mcintosh, senator bayh, we appreciate you both today. >> he's serious about a deal to be had >> they were watching the other day when we had senator toomey on everybody watches. they should anyway coming up, ppi data. triple digits on the dow could all change later don't miss our interview

ordinary problems are for ordinary companies. we're here to fight the big, intimidating, impossible-to-change problems. [beeping] from developing treatments at unprecedented speed to addressing threats to global health. we're leading the way with a revolutionary mrna platform that could teach our bodies to do extraordinary things. we're here to do something more than make medicine.

we're here to change it. moderna. this changes everything. there are some things that go better... together. burger and fries... soup and salad. like your workplace benefits and retirement savings. with voya, considering all your financial choices together can help you make smarter decisions.

voya. well planned. well invested. well protected. tenev. vaud good morning the afternoon inflation data is out in less than 20 minutes. shares of disney slumping on second quarter earnings, despite in line results, investors choosing to focus on a loss of

streaming subscribers to disney plus on the flip side, robinhood is surging as the online brokerage firm gains monthly active users for the first time in two years. we're going to speak live with the company's ceo as the final hour of "squawk box" begins right now. good morning welcome back to "squawk box" right here on cnbc we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen andrew is off today. we're watching what happens with u.s. equities futures. and over the course of the morning -- where'd it go hold on, wait. i'm going to find the mic. >> stay on the boards. >> look at what's happening with

the futures. dow futures are now off by about a hundred points the nasdaq is still up by about 20 points. live television. we've been watching the 10-year below 3.5% the 2-year yield is down, too. we were down 4% but now it's at 3.862% >> a tie is good for something it can't happen to me. >> it can. i sat on the wire. >> shares of western regional pacific bank getting hit hard this morning dom, where's your mic? >> i just did a mic check in the last 20 seconds, just to make sure what was going on here. >> good idea >> to your point, joe, i don't have the same problems with my

shirt. anyway, let's talk about what's happening right now. regional bank stocks again in focus not in a good way, joe becky to your point here, pac west is down roughly 23% right now. i'm just checking volumes, about 4.8 million shares have traded so far in the extended session that's off the worst levels of the extended hour session. it was down roughly 29% earlier this morning this is all on the heels of a regulatory filing where pac west gave a quarter lly update. the week ending may 5th, it saw customers withdraw around 9.5% of their deposits, adding the bulk of those outflows came on may 4th and may 5th on the heels of reports that pacwest was exploring strategic options for some of its assets among other details in that quarterly update, it said it has pledged more assets as collateral to secure its ability

to bore motre funds to improve liquidity position for potential outflows pac west says it has $5.2 billion of uninsured deposits, so a $15 billion deposit lifeline could more than cover that it has enough cash to meet its cash flow needs for the next 12 months but the ripple effects are being felt everywhere in regional banks if you look at stocks like western alliance as you're seeing there, zion's bank, bank of hawaii, some of the ones more active in the premarket right now, they're all taking bigger hits but not to the extent that pacwest is throughout the course of regular trading we're going to be focused on updating our viewers and listeners on regional banks.

i'll send things back to you >> the dow was kind of flat until this -- i think it coincides with that chart right there, that board right there that you're showing. we are all in a wait-and-see mode for the ppi at 8:30 and thenly head again, which we thought it was kind of stabilizing, especially after the weekend. even with pac west we thought it was kind of stabilizing. >> for pretty much all of the regional lenders it was. it also goes to show you, joe, becky, and i think we're all in tune with this more because we work in the business but when there is news out that updates a story incrementally, sometimes those updates can have a huge effect in this case here a story about pac west looking to either find strategic options or itself as a whole or some of its assets that it has on its balance sheet, those reports can trigger a

confidence move. that's in essence was pac west was saying they're saying on may 5th because of those reports they say people take their money out of the bank. >> and drukenmiller, he was saying he's not expecting anything close to '08 and '09 but he's saying don't just dismiss it it couldn't get worse from here. you go 500 basis points, there's a lot of people with long dated paper. we don't know the extent of that it still all worry >> there are also folks out there, we're seeing reports right now that there are certain large financial forms, private equities that are trying to help arrange deals between banks and some insurance companies a lot of vehicles and variables in motion, guys. >> dom, thank you. >> you got it. >> joining us now to talk about

more of all of this is the president of yardeni research. i think we have to look at what's happening in the market right now. look, those reports last week are being blamed for the run on pacwest deposits basically they said 9.5% of their deposit base left, most of that was on thursday and friday of last week personally i'm not surprised to hear any of these banks are talking about things because that would just be something you would have to do to have some backup plans i don't know that that means it would be the most likely scenario in any case but it gets back to the point that confidence counts. we thought we made it through the worst of it when last weekend everything seemed caulk but what do you think's happening here >> i think dom got it right. this is sort of a drip, drip, drip situation where it ain't

over until it's over and clearly whenever this drips, the market gets very nervous about a banking crisis that's national in nature. but right now it seems to be western in nature and i think it's very membreminiscent of th& l crisis in the late 80s, early 90s. i think we'll have a lot of mergers and acquisitions in the regional banks to stabilize the situation. >> what does it mean more broadly for the economy, if anything the worry is that the credit ku crunch that will ensue will be difficult. what do you think in. >> well, the bad news is it's possible at some point the yield curve inverted, fixed income investors are saying if the fed keeps tightening, something will break in the financial system, we'll

get a credit crunch and a recession. that scenario is kind of playing out. we had an inverted curve and now we've got this banking crisis. the question is will it become an economy-wide credit crunch we had this loose survey of loan officers suggest the tightening of credit conditions has continued. but i don't think it's going to be the kind of credit crunch that causes a recession. i think it remains basically a banking crisis but the big conclusion i think is that it means that the fed's done tightening. >> i think we just lost ed looked like zoom cut us off there for a moment >> am i here >> we can hear you go ahead, keep talking, ed >> you can hear me but you can't see me >> that's okay >> sounds like a song. look, i think that this all means that the fed's done tightening was my last point and i'm not sure how much you missed

before that. >> no, no, that was fine >> you're back >> technical difficulties. >> you're back now we got to go you're back, go! >> what would you tell people at this point, investors looking at this, yields have come back down this is a flight to safety >> there's always something to worry about. in addition to this, we got the debt ceiling issue but i think we're going to get through these issues without a recession and economy-wide credit crunch, in which case i would stay invested. >> thank you good to see you. and hear you >> thank you >> coming up, a special interview with robinceo. and coming up, principle negotiators meet again tomorrow.

you're watching "squawk box" on cnbc and stopped the growth of tumor cells. there's a place that's making one advanced cancer discovery after another for 75 years. i am here... i am here.... because of dana-farber. what we do here changes lives everywhere. i am here. dad, we got this. we got this. we got this. we got this. life is for living. we got this. let's partner for all of it. edward jones

vaud. janet yellen said a u.s. debt default thud be an unthinkable option

the speaker of the house came to the white house on tuesday to threaten just that the next major event, congress leaders will meet tomorrow with president biden. joining us is sheldon white house. it's great to hear you, senator. i can hear what speaker mccarthy would say. he would say why would you say that when he is the only person and republicans the only party to have put forth some legislation that does in fact raise the debt ceiling >> well, actually, the senate has a clean debt limit bill that has been put forward we're awaiting which direction things go before it gets the vote, and the president has put forward a comprehensive budget proposal that reduces the deficit by $3 trillion that we had a hearing on and that democrats seem to be rallying around if he were to say that, it would not enjoy the benefit of being true >> would saying that the senate has put forth a clean debt bill that is passable, would saying

that be true >> no, i think what's true here is that there's one person in that may 9th meeting who is insisting that default by the united states of america remain on the table that person is speaker mccarthy. he's trying to avoid blame and responsibility but he is the only person in that meeting who is insisting that default remain a threat on the table. and i think that we have very good processes for working through legislation, we have a lot of ways to do it in the bright daylight of the constitutional bicameral process and threatening with this default hand grenade is very irresponsible and dangerous and i wouldn't be surprised if markets soon started to react. >> senator, you've seen the letter from the -- i guess you -- all of this we said earlier it is i think the american people, we kind of get tired of all the talking points. you're calling it a maga bill

that's a giveaway to the fossil fuel industry. but you've got 43 of your colleagues that happen to be in the other party in the gop that have said that they're not going to vote for that clean senate bill, so you know you can't pass it so it's disingenuous to say. >> actually, that's not true either >> then pass it. can that bill pass right now can a clean debt bill pass in the senate right now, senator? >> not while the speaker is holding the economy hostage with his default program. >> the speaker of the house has nothing to do with the senate. >> yeah, but he got -- >> are they all maga is mitt romney maga? is this helpful? do you think the american people are well served by this, senator? we want to get this done >> i think the american people would be well served -- you tell me when you're willing to have me speak >> go ahead. i'm not saying a word right now. go ahead

>> so the american people will be well served when speaker mccarthy takes the debt limit threat off the table, stop threatening default and we go through the proper process of governance in america, which is through the relevant committees and in the sunlight of public disclosure and have a conversation about reducing the deficit both with revenues and with spending reductions those are the ways we go about this in the united states of america. >> so there's no reason to go through the motions on friday. you wouldn't urge the white house or senator schumer to negotiate in any way with speaker mccarthy, any type of spending restraint, anything -- there's no middle ground on covid relief, on permitting, there's nothing possible other than a clean debt raise. you say -- mccarthy says it's

your way or the highway. we come back to both pointing at the other and we get closer and closer to detaught -- default i think the american people want to divert their gaze at this point. >> may i speak >> i'm not talking go ahead >> okay, good. i think the key here is that we're willing to have pretty much anything beyond the table in negotiations through a proper legitimate constitutional process of negotiation, through the budget and appropriations process in which everybody gets their say, which are the time tested american ways of doing business, not bringing the default hand grenade into the room and insisting on a bill remember this. what he's insisting on is a bill that would knock 700,000 jobs out of the economy and put it into recession that testimony that we got in the budget committee was not challenged by the republicans in the committee. that is the state of the record.

what speaker mccarthy is insisting on is either default, severe recession and the loss of nearly a million jobs or his bill, which i think is a maga bill given the constitution of the house, the loss of 700,000 jobs and also a recession. that's not a responsible choice. he should use responsibly the tools he has as speaker through the ordinary, proper process of american governance. >> we appreciate your opinion and your viewpoint, senator, and appreciate your time today thanks >> thanks for having me on >> okay. >> some comments out from jpmorgan ceo jamie dimon he is saying the debt ceiling is potentially cat traastrophic. he says the regional banks are quite strong and that the banking regulators should be prepared for problems. he says he hopes that the sec

will look into short sellers and bank stocks because that's pretty interesting when you start to see some of the runs on bank stocks like we've seen once again this morning you can see pacwest down by about 17 or 18%. this has happened time and time again, western alliance off 5.5% zhiwei zions. jamie dimon says he thinks the regional banks are quite strong and he hopes they'll look into short sellers. when we come back, we'll talk about the breaking producer data and we have an interview wit e ceo of robinhood you're watching cnbc and this is

"squawk box. (cecily) you're looking pleased with yourself. (seth) not to brag, but i just switched to verizon. (cecily) so you got an awesome network... (seth) and when i switched, i got to choose the phone i wanted. for free. not bragging. (cecily) you're bragging. (neighbor) oh, he's bragging. (seth) who, me? never. oh, excuse me. hello, your royal highness, sir... (cecily) okay, that's a brag. (seth) hey, mom. i gotta call you back. (vo) visit your verizon store during our spring savings event and choose the phone you want, like the incredible iphone 14, on us. verizon (vo) while you may not be running an architectural firm, tending hives of honeybees, and mentoring a teenager — your life is just as unique. your raymond james financial advisor gets to know you, your passions, and the way you help others. so you can live your life. that's life well planned.

you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

one of america's biggest tech companies. dierdre bosa joins us. good morning >> becky, good morning this is the peerest battle in big tech, who will lead the artificial arms race google scored some critical points, maybe leveled the field by finally putting its version of a.i. on display in a consumable way for the first

time since microsoft and chat disrupted the landscape five months ago and raised concerns about google's bread and butter search >> we are at an exciting inflexion point. we have an opportunity to make a.i. even more helpful for people, for businesses, for communities, for everyone. we have been applying a.i. to make our products radically more helpful for a while. we are taking the next step. with the bold and responsible approach, we are reimagining all our core products, including search >> so it really was all about search that is when you saw the stock pop in the middle of that presentation now google's new search product totally reimagines the way we use the internet, instead of those search bars that return

ten blue links, it uses the query to return images, summaries, videos, and however you want it. this all seemed to raise the idea to investors that regenerative a.i. is not going to kill search, it's only going to make it better. is it as profitable? we won't know until it's widely available and the advertising model catches up but google showing how it can integrate into its existing suite of projects. and the senator really needed this after months of playing catchup. >> dee, thank you. we'll see you soon when we come back, though, we do have some new producer inflation data we're following yesterday's cpi number with the producer numbers. we have the report, the maetrk reaction and all that when "squawk box" comes right back.

want to stop lower body pain before it starts? there's a dr. scholl's for that. new dr. scholl's prevent pain insoles are the only ones clinically proven to prevent pain from muscle-induced joint stiffness and strain. so you can stay pain free. our customers don't do what they do for likes or followers. their path isn't for the casually curious. and that's what makes it matter the most when they find it. the exact thing that can change the world. some say it's what they were born to do... 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.

welcome back to "squawk box" on cnbc. we're just seconds away from april producer prices, about 40 seconds. initial jobless claims fult futures down 72 on the dow the nasdaq continuing to hold on to gains we did see the yields start to fall with the flight to quality

after more trouble emerging, looks like at least or at least some anxiety in the regional banking sector with pac west sharply lower today. rick santelli standing by. a long way from pac west but ripples being felt all over the place this morning but what are these numbers? >> yes, the banking butter flip-flop effe-- butterfly is wt we call it in chicago. it jumped up to 264,000, 264,000. interest rates are going to fall down on that when was the last time we were that high on initial jobless claims to find a higher time than that would be october 22nd week of '21. so a bit of a ways back. it's actually continuing claims that are more well behaved today, which is the opposite of

lately expecting 1.82 million, we is 1, 801,000. continui continuing claims remaining over 1.8 and are not clearing the hurdle higher. ppi for april, up 0.2. if we look at x food and energy, up 0.2 as expected and now the year over year and this is very interesting, what moved the cpi yesterday, year-over-year headline has been moving down consecutively for ten months in a row. will it be 11?

is it is 11 months in a row high water mark, 11.7. x food and energy over the year. it's been down 13 consecutive months, even though there's been a couple of duplicates so 13, did it make it 14 it did from 3.4 down to 3.2. high water mark was 9.7. and finally year-over-year x food, x energy, x trade 3.4% that is now up 14 months in a row. see, i get so excited that these inflation numbers are so central to strategies, it's down 14 months consecutively in a row. there were a couple of doubles, meaning april and may and august and september of last year all were equal amounts and last month was revised from 3.6, 3.7

after all of that, basically lower on every metric but with regard to inflation, that isn't a bad thing, we can argue, about the speed. interest rate, it's funny because they did move down a bit but here we are still hovering right around the say we're at 3.38, we're at 336, almost 337 and preopening dow futures, they've been hovering right around the same levels joe, a lot of numbers there. what are your thoughts >> i think disney is down a lot. that almost accounts for the divergence in the dow right there. there's disney, rick, as you can see, down about 5% i think we're getting hit with numbers that became less meaningful once we had the pac west, what we've been highlighting since we saw it

happen it's across the board rearing its ugly head again. i know you probably saw some of the stuff stan drukenmiller was saying yesterday probably not going to be '08/'09, but don't assume it's just a walk in the cake, which is a great mixed metaphor. >> there's a lot of analysts and traders and a lot of my sources don't really see recession coming i don't know that it should be the complete focus but i do think ignoring these long-term trends and think we're going to get away with the sins we've kw committed and all the interest rates we've manipulated and have just a soft landing, it doesn't seem realistic just like inflation coming down, many of the variables that will push us towards recession have been very slow moving and slow to unravel but just keep an eye on those claims they're telling the story. >> okay. all right, rick.

thank you. for more reaction in today's data, let's bring in the senior fellow in economic studies at the brookings institution and director of the hamilton project and mike emchael strain, direct the american institute we were talking about how the ppi number became not just a back seat to what was happening in regional banks but taken all together, how do you have view things >> with the information the fed has now in hand knowing they're going to get a lot more before their next meeting, i think they have a good case to pause. the cpi overall headline number was 2.3% in april, that's down a fair bit and some of the super core measures also showed some promise. but more broadly i think the fed can see a lot of evidence of

slowing in the real economy. we know that job gains for the three months were 222,000, that's down from over 300,000. we have some evidence that consumer spending is slowing and then of course everything that you're talking about in the banking sector and including what's happening to demand for loans from the business side we have a lot of evidence that there is slowing so i think the fed so far can be a little patient now in the next meeting to see whether or not that's slowing in the real economy really does the job to get inflation down to better numbers. >> there's the banks, wendy. i sort of come bind that with it there will be some credit contraction, don't you think, that helps the fed do its job? >> absolutely. i mean, what we're seeing with the banks so far it seems to be -- you know, the real trauma seems to be isolated to

particular institutions. what i'm looking more closely at is what's happened to demand for sure there's contraction on the supply but it's hard to know how much is from the banking crisis, how much of that is just because there's overall contraction from pretty loose days it's always hard to know how to interpret this loose when banks saisai that they're typing from very loose conditions. it's uncontravertible that firms are wanting fewer loans. >> michael, comments about all these issues >> i think everything wendy said is reasonable and you and rick i think the case for another hike at the next meeting is stronger than wendy seems to think it is. if you kind of, you know, step back and look at where are we in the labor market, where are we

with prices, yesterday's cpi report showed that we haven't really made progress on core cpi, on cpi excluding food and energy in the last six months. we continue to see month after month core cpi increase by .4, .5 points and then we back to the 2022 world where people are pointing to specific components of the cpi and saying that one spiked, we don't have an inflation problem, that one spiked, we don't have an inflation problem. the fact is if you look holistically at what core prices are doing, they're not decelerating the wage data tells a similar story that underlying wage pressures are not decelerating nearly enough in my view to make the fed feel like the mission is

close to being accomplished. we're looking at an economy on balance with underlying inflation kind of in the 4% range, maybe a little higher that's a lot higher than 2%. yes, we've come a long way since a 9.1% cpi reading so the trend is in the right direction, but the last six months or so, i don't see a lot of progress. and the interest rate increases that started over a year ago should have been hitting the economy by now monetary policy operates with a lag but some of -- at least some of those early meetings where rates were hiked, you should see those effects on prices and in the market at this point turning to the labor market, the unemployment rate went down last month. it didn't go up. yes, we have seen a softening. today's numbers show the labor market continues to soften we added over half a million jobs a month to an economy adding a quarter million jobs a

month but we still have really, really tight labor markets the fed could pause but the risk is if it pauses at the next meeting, it's going to have to hike the meeting after that or two meetings later that's what it doesn't want to do >> looks like the market not improving. you make a lot of good point, michael, but these were not hotter numbers than expected and we're still not getting much of a move higher. i think it has to do with some of the other news of the day wendy, appreciate your time as well today thanks >> when we come back, some top stocks on the move with its c ustomizable options chain, tenev. we'll be right back. easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley.

♪ imagine, a car that goes as far as it does fast. as sleek as it is spacious. as smart as it is beautiful. introducing lucid air. experience the best. ♪ ♪

regional banks under pressure this morning after pac west said it lost around 9 1/2% of its deposits in the week that ended may 5th. that's last friday joining us is larry mcdonald he's the founder of the bear traps report we thought we were through some of the worst of this last weekend, as a quiet weekend. this morning pacwest shares off close to 20% but it's other banks banks as well that have seen pressure on them some banks like western alliance turning positive at this point what do we do with this? because you don't want to be in a position of creating runs on

banks. jamie dimon making comments this morning that he thinks authorities should go after shorts that are causing some of these problems, but you also want to be realistic about what's happening for them to have lost 9.5% of their deposits last week, we don't know what happened entirely after that, where does this leave us? >> well, the bonds are trading in the 40s with about a 34% yield to maturity. so it looks like it's too late for this bank. the bond market's telling you that but in terms of, you know, right now we've lost about 5% of deposits and in 2008 the worst it got was about 3. >> 5% of deposits overall in the banking system you mean? >> yeah, all the banks, including the big ones and little ones. it's a little more than a trillion it's about 5%. we looked back to 2008 this morning and the worst it got was 3.

the fed's trying to put out inflation but they're up against a miscalculation i was talking to a lot of our clients around the world the fed thought these deposits would be much more sticky because of the it 2/1st century financial ecosystem with technology, linked bank accounts, it typically difficult for people to move deposits. at the end of the day we have twitter in 2003, we didn't have it in 2008 and the speed of information flow is accelerating this process they do a story on a bank and within 24 hours, deposit outflow was much greater than anyone could imagine and that data came out this morning >> yesterday stan strdrukenmill

deposits swelled precovid till now. even though there's a bigger decline down, we're well ahead of where we had been prepandemic in these situations, too and there's other places to put your money where you're getting a better return right now. >> investors watching us right now, the first thing you want to look at is contagion examples. one thing i think is unusual is american express equity is underperforming microsoft by the most in ten years. we could not find any more data than that. it's just a spectacular underperformance for american express. that was after a really strong quarter. transports, regional banks, capital one credit default swaps are at the highest level since 2008, delinquency on the rise. no question the fed is trying to

suppress inflation they're doing it but the speed with which they're destructing things, the evidence of that is growing by the day >> the other thing that jamie dimon did say is that commercial real estate may take a few banks down we've heard the same thing from people like charlie munger i don't think it's something that put the system in peril, that these one-offs can be handled, that it's going to be some of the smaller banks and when those issue arise they'll be handled by the system and most people assume all the deposits will be protected >> well, you know what, one thing stands out, when you suppress the cost of capital for longer, longer periods of time if it's one year, it's not such a big deal but if it's a longer period of time, buffett says you create a lot of ways for people to game the system and cheat and if you look at the insurance

companies, they're underperforming the s&p by the most since lehman in a short period of time it's very clear that the commercial real estate debacle where a lot of those transactions were done at 1, 2 1/2 financing, they're up to 5 and you have hundreds of billions of losses there that's where you're seeing that contagion leak to insurance companies. i don't think it's a '08 but it's a mix between the regional crises in the 80s and 2008 >> larry mcdonald, thank you >> after a break, a first on "squawk box" interview with robinhood ceo vlad tenev we'll be right back. ntly went through a divorce. she had a lot of questions when she came in. i watched my mother go through being a single mom. at the end of the day, my mom raised three children, including myself.

and so once the client knew that she was heard. we were able to help her move forward. your client won't care how much you know until they know how much you care. ♪ i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. life is for living. let's partner for all of it. i'm so glad we did this. edward jones

welcome back, everybody. shares of robinhood are up in the premarket. the online brokerage firm posted a first quarter revenue beat and its first increase in monthly active users in two years. also announced 24-hour trading five days a week for several etfs in big stocks like tesla, amazon, and apple. joining us right now is vlad tenev, the ceo of robinhood, and

vlad, thanks for being here this morning. >> thanks for having me. >> let's talk first about what you're doing with this 24-hour trading for some etfs and some stocks my guess is that is something you're doing because you want to make sure it's available for customers but also a way to bring in additional revenue. >> yeah, as we look at it, what this product allows is customers can now trade individual stocks as well as etfs 24 hours a day, five days a week, and that makes us the first u.s. retail brokerage to offer 24-hour trading of individual stocks if you look at sort of the equity markets and how they've evolved, the trading hours vice president haven't changed since the '80s and in that time, markets have gone electronic, so it's time to change that and to upgrade it and make it more like software than a brick and mortar institution, and we're happy for what it allows our customers to do, manage their risk 24 hours a

day, and trade stocks and make investments at whatever time, opportunities arise. >> let's talk about your monthly average users. they were up 400,000 sequentially, but you're still down to 11.8 million monthly average users from 15.9 million in the year earlier quarter. what do you see, just in terms of who wants to trade, who's willing to get on to the markets, who you think you can lure just in terms of growth because it's a lot tougher to do in a down market like we've seen >> i've been very proud of what we've been able to accomplish in these challenging macro conditions if you look back a year ago, there were questions about how robinhood would do in a high interest rate environment. obviously, we did quite well in 2020, and 2021, when interest rates were low and trading volumes were quite high, but if you look at the past year, we've

diversified the business, and now 50% of our revenue is net interest revenue, and along the way, we've continued to innovate for customers, not just with 24-hour market but also rolling out gold, which gives customers 4.65% interest on their uninvested cash with $2 million in fdic insurance, which is very useful in this current environment. and our retirement product, which is the first i.r.a. with a built-in 1% match, so, in this environment, there are opportunities to provide value to customers, and we have been rolling out products that make a lot of sense and are quite useful, given the market conditions >> net interest revenue, as you pointed out, was $208 million in the first quarter. that was up sharply. i think it was only $55 million in the quarter a year ago. part of what you do also is loan out money to people who want to use it to buy securities and that can be great for the

customers. i just wonder, are you confident that these are all good loans and that you'll be repaid? >> we've been doing this business line since close to the very beginning you're referring to margin lending, and you know, it's not a new thing for us we have added additional products for customers like stock lending, which allows them to earn extra yield on their stocks that they may be holding at robinhood, which i think is also very useful to customers in an environment where there's less trading and they just kind of want to hold on to their positions. and that product line, we've seen really fantastic increases of, and it's now combined with another product we launched approaching the size of our overall u.s. equities business so, i think, yeah, you've seen perhaps other products become interesting to customers, but we

also see a core group of active traders that are a little bit more sophisticated in 24-hour market with the ability to trade things like tesla, apple, and amazon round the clock on weekdays, is very, very useful to those customers as well. >> vlad, how much are your -- not only your number of monthly active users but the number of transactions tied to a rising market the first quarter, markets did pretty well, but do you think it's something that's sustainable, even if markets are down for the quarter >> i think that you'll see things fluctuate quarter to quarter a little bit long-term trends that we look at are net deposits into the platform you know, your last -- your last guest was talking about all the outflows of the banking system well, robinhood has seen inflows in q1, 29% growth of inflows of customer net deposits year over

year, which it was about $4.4 billion in q1, $1.5 billion in march alone, so you know, as a lot of financial institutions are seeing customers take money out, we're seeing customers bringing money in, and that -- you're rather strong and you're also seeing -- yes? >> go ahead. finish sorry. >> and you're also seeing increases in customer satisfaction we've been able to drive net promoter scores of active traders up 30 points, and all of our customers' average net promoter scores up 20 points year over year, whichwe're incredibly proud of. shows customers are trusting robinhood increasingly in this uncertain environment. >> it also probably is an attraction to the 4.5% that you're paying on deposits. how much does that cost you, and can you maintain your net

interest margins how do you do that >> we do collect a margin on that offering, so even though 4.65% for gold is industry leading, it's a sustainable offering for us, and we're just taking much less of the margins than your typical bank or other brokerage offering this product. banks, for example, are structurally prevented from increasing rates a lot of the time because they have this asset-liability mismatch where they have loans at relatively low interest rates that they took on during covid and kind of the long-term low-rate environment, so i think that's an opportunity for robinhood and our customers, because they can't get the type of yields that we're offering readily from other participants >> but how do you -- i guess i'm still a little confused as to how you're able to pay the

4.65%. how that doesn't cut into your margins at all >> it's a great product, and we are offering a great product for customers. we have margins on it, but what we do is we sweep customer cash to a network of banks, and that's how we're able to offer the $2 million in fdic protection over on top of what you get from a typical bank, and we've seen a lot of growth in balances, billions of dollars of additional growth over the past few quarters since we've introduced it. >> i'm sorry, we're out of time. i would love to dig into this more deeply, because i think i'm still missing something. vlad, we appreciate your time today, and thank you for being here >> thank you final check on the markets, which are -- they haven't improved much recently the ppi, maybe not necessarily the issue, but startling news

still coming out of the regional banks with pacwest as you can see right there, stock's down 79%, down a lot today and deposit, apparently, continuing to flow out in the week ending on may 5th make sure that -- is tomorrow friday >> it is >> make sure you join us tomorrow everybody's going to be in a good mood. "squawk on the street" is next ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange stocks wrestling with some growth worries today, more regional bank stress, some very weak data out of china, softer ppi, may be good for margins, but jobless claims, 264,000 is the highest in 19 months our road map begins with the return of that regional bank volatility pacwest says deposits fell 9.5% last week, but jamie dimon says the regionals remain strong.