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.

plus, disney shares are under pressure this morning. streaming losses improved. subscribers, though, declined, and ceo bob iger, he ups the ante with florida, asking, "do they want us to invest more or not? jobless claims hit the highest since last october, and treasury secretary yellen says it should be unthinkable for the u.s. to default on its debt. let's start with regional banks today, under pressure, led by pacwest, down double digits the company says it lost 9.5% of deposits in the week ending may 5th, citing customer concerns. got an update out of western alliance as well, jim, you've been all over this >> yeah, look, i think we're in this position, there's kind of a lag when they report, and it was

clear that the news stories drove this, and i was going over this in my mind this morning do you want to make it worse do you want to make what happened on may 4th and may 5th after the news reports on may 3rd, do you want to repeat those news reports you're a responsible journalist. you know that if you emphasize what happened may 3rd again on may 11th, you can do some tremendous damage to pacwest, and to me, i don't want to be part of the story. you want to be part of the story? >> no, not particularly, but we got to cover it. >> i know you have to cover it >> it's news >> like, i don't know. i mean, i'm listening to vlad tenev offer $2 million in fdic support for anybody with men in the company, and i'm thinking, is pacwest going to just take this carl, they issued a release. they know the results of the release. did they not, once again, like first republic, when you issue these things, say, but we're backstopped by apps.

>> they do, and they point out, again, as we've already said, that they have on balance sheet liquidity on unused borrowing capacity, $15 billion. that exceeds uninsured deposits by $5.2 billion. it's a small bank at this point, market cap-wise, but it is a tell for the market. we are still working our way through these issues on the balance sheets of the regional banks. we've talked about it endlessly over this last six-week period it hasn't fully gone away. it's not going to go away. and we're probably going to revisit it the question then becomes, what happens here can they withstand the pressures? >> i don't know. one of the things that was quite disturbing last week was that first horizon had a $13 billion bid in hand from toronto dominion we didn't know what went wrong it turned out that toronto dominion did not report the way that we would in our country, some suspicious transactions >> right, that's the reporting about why. they were never told >> no. >> first horizon was never hold

why. it was always regulatory it had nothing to do with the current tumult in the banking world. >> my point is that first horizon got $13 billion. then the stock goes down to $5 billion first horizon was not implicated at all, happened to be a very responsible bank, just took over hyperion, and yet the stock still where it was when the deal broke down how is that possible >> that's something that dimon talked about in paris in an interview talking about uncertainty regarding mergers and regional bank strength at large. here's what he said. "we need to finish the bank crisis we have had uncertain policy on mergers," he mentions the first horizon deal, jim. he says, though, "regionals are going to be okay next quarter. they're earning money. they've got good clientele, very diversified, quite strong. >> well, look, jamie dimon's in a position to be back up the government could very quickly just say, you know what, this whole 10% that we can't have more than 10% of any one

bank, that's out the window because of what happened with jpmorgan so, anybody who wants to merge, we'll let you merge. any one of those banks that are on the screen, they really, you know, pnc could do a merger in a second but i come back and i say that since there's no story, which just says, and first horizon has -- is not for sale, and as a matter of fact, they've got this much in, you're going to have to continue to prove that you're okay david, you remember what jpmorgan said. if you have to continue to argue that your credit is good, your credit's no good >> that's true we've said that many times when you have to actually answer the question, you've already answered the question. >> you've answered the question. >> and we're going to continue to have this conversation, i think. people i've been speaking to who are very close to this for many weeks now, continue to believe that we're not done. >> yeah. >> unfortunately because there are assets on these banks' balance sheets that are simply not worth anything

what they were when they were put on the balance sheets. so you have certain banks that are undercapitalized, and the question becomes, how do you deal with that it's a similar question to, also, how do you deal with dep deposit insurance, but not quite the same we're going to have days like this we'll see what happens with pacwest, but at the same time, we get these periods of quiescence >> this report that the fdic boardis going to meet to consider a proposal about special assessments on banks to protect from losses arising from this >> well, look, i think the government still hasn't caught up they still haven't caught up to what's happening, and i think a lot of us are beginning to question the fdic as an organization that's ready to handle what's going on >> catching up is the key. by the way, the $42 billion in 4 hours, i say it so many times, it went out from silicon valley

bank, it's still the seminal fact that has yet to be dealt with, what it means. >> did you read what the merger -- what the bank looks like it's a mess. the merger >> i didn't read it. >> you read these things, and not that i'm asking that everything be like how clear it is with a.i. oh my god, i'm reading these things i haven't mentioned a.i. yet just because -- >> we'll mention it. >> it's more confusing than what's happening in the banking crisis >> we got to get to it and talk about google yesterday, but i know we want to hit disney, carl >> yeah. one of the big premarket laggards streaming losses did narrow in the quarter, but disney lost four million subs, the second consecutive quarterly decline. nice beat on free cash flow, and they got to the ad market moderating somewhat. obviously, talked a bit about

florida too and desantis >> i didn't like this call at all. in part because there was a -- not just the loss of the subs, but there was a push out because of the timing issue of when things were going to get better with direct to consumer. i want direct to consumer to come back. we got set up here there were a couple of analysts who upgraded ahead based on absolutely nothing, and david, i know you can get lost in the weeds here with the political issues, but the fact is, they're talking about what they're going to do with hulu. we have no idea how good hulu will be. but we didn't get any sense at all that they're out of the woods. i don't know >> on hulu, it is important to point out, now, they are talking about integrating it into the disney plus app, and bob iger has changed his tune a bit from our interview a number of months ago at this point early in the year when he indicated they weren't interested in general

entertainment networks and certainly seemed to indicate to the marketplace they were potentially a seller of hulu as well as a potential buyer of what they don't already own, which is owned by our parent company, comcast, has the right to put it to disney early in 2024 they're talking about hulu being integrated that was interesting or potentially interesting. >> that was the news that came out of the story >> that was sort of news but i still look at the other side of these businesses, which is the continued decline of linear networks. we didn't focus on it that much at warner bros. discovery, because they were all focused on the fact that their direct to consumer has gotten to break even and of course the focus for so many investors, first for years, it was sub growth, sub growth, sub growth, and that's what we they were rewarded for now for the last 18 months, it's been cut costs, get to profitability, and that's where investors are focused, so with direct to consumer at warner bros. discovery, they were happy about that, despite 10% decline in profits at the linear networks there

and here it's about 7% 6% and a 33% decline -- >> operating revenue is down 35%. >> right, in part because of higher nfl rights costs. i thought that contract didn't begin until a little later sports rights cost an enormous amount i pointed this out so many times, but you just continue to lose video subs at all the major providers of video at a rapid rate cord-cutting is accelerating and what does that mean for the cash flow generation of these companies as they continue to try to bring their direct to consumer to profitability? >> these things, when you read through it, my travel trust owns disney, and we do it in part because the theme parks are incredible, and every mention of the theme park was fantastic >> amazing >> just amazing. but you've got these contracts, and i keep thinking, if you were amazon, you're listening to this, and you're going to say, listen, one day, we're going to own all of these

andy jassy will say, look, i go in and buy the champions league from paramount because paramount needs the money so badly the moment that youtube and amazon decide that they want to be cbs and fox -- >> they've already taken sports off some of these linear networks and the broadcast networks >> i'm just saying, the longer contracts, when they run out, it's too expensive for these companies. >> that's partially helping to continue to break the bundle apart and cord-cutting, because it used to be sports, you could just get it one place. now you can actually start to get it a little bit. >> didn't you think the story of disney was the story of por mo paramount, which is the balance sheet? >> paramount is five times levered. that's not a great place to be >> if i were disney, i would be thinking, how about guy to brian roberts and say, you know what, this hulu, i don't think it's going to save me but they made a case that hulu could be the lynchpin of the

bundle >> iger is now talking about it in a more positive way in terms of general entertainment being a part of the platform >> we know that india is not a problem, because it's a fraction you can just lose those subs >> are you talking now "succession" you're going to confuse our viewers. >> if you confuse matson with disney, it's unforgivable. >> they're not making up the subs in india. >> take that right off the table. you take that off the able right now or i'm going to be leaving >> as for florida, he did have some words for desantis, called the actions in that state somewhat retaliatory i think we have some sound on that as well take a listen. >> our primary goal has always been to be able to continue away to do exactly what we've been doing there, which is investing in florida we certainly never expected to be in the position of having to defend our business interests in federal court. our plans are to invest $17 billion over the next 10 years, which is what the state

should want us to do we operate responsibly we pay our fair share of taxes we employ thousands of people. does the state want us to invest more, employ more people, and pay more taxes, or not >> that was interesting. >> i thought that yesterday there was a -- there was a town hall with former president trump, and i think this was exhibit a. if someone said, what do you think about desantis he would say, desantis is the biggest job crusher in the history of florida and that would be the end. that would be the end of that, and next thing you know, desantis has his own show on twitter. >> iger, this is the line of attack, so to speak, or defense they're going to continue to use, which is, we have been the economic engine of the state of florida for 50 years and we will continue to be unless somehow -- why are you making it more difficult for us to do that it's a pretty straightforward -- >> that was my -- finest part of the call was the destruction of desantis as a reasonable governor the worst part of the call is

the -- is what david said. that's just not emphasized enough, which is that linear -- bob iger did talk about how one of the reasons they did direct to consumer was the problems with espn. >> this encapsulates the bigger issue that bob iger and i have now been talking about for many years, which is, can direct to consumer, as a generator of profitability, ever replace the linear networks business >> i think it could. >> well, you're alone now in that no, iger's with you, maybe there's about ten of you >> how about christine mccarthy? >> yeah, she might think so. bakish there's not many but i don't know i think the business we've been a part of is probably one of the most profitable, greatest margin businesses, and i'm not sure it's ever going to be replaced with what direct to consumer is with its churn characteristics >> when you mawatch mickey, you suspend reality. mice don't talk. >> that's what you have to do? >> isn't the notion that you start to combine some of these silos together make that churn more difficult in the old days, it was a pain

to call your cable company and cancel >> the disney ad tier was very good will you give me that? >> yeah. ad tier was important. >> that's something. getting rid of -- you want to get rid of something cable, you do it -- do what zaslav did with cnn. boom >> what did he do with cnn >> cnn plus. just one day, it was there, and the next day, it wasn't there. >> it was costing $400 million a year >> if you're losing a lot of money, you go after it you double down with hulu, we don't even know how much hulu makes. >> at some point, we may be talking about the enormous profitability of these direct to consumer businesses. we may that's a possibility, because it can turn, and then it turns significantly, but you do deal with a sub base that is, to your point or carl's, able to sort of quickly just say, no thanks, not this month >> it was not a good call. there's not much more to it. we were set up to think, by some

of the analysts, that it would be a good call >> sure. well, goldman today says it's going to be "lumpy" in terms of operating trends during the second half. >> lumpy is good, david. >> is that a character, lumpy? was he a dwarf >> was it "leave it to beaver" character? >> all we're saying, the takeaway here is that disney quarter wasn't that good it's not about matson or lumpy >>matson is hbo. you're confusing people. >> that is zaz crushing it >> when we come back, we'll talk wholesale inflation after these ppi numbers this morning we'll get to robinhood, sonos, talk some retail, tapestry and dillard's.

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on the inflation front, april ppi coming in up 0.2 and the same when you strip out food and energy on a year on year basis, prices up 2.3% and that is the smallest increase since january 2021. that's ten consecutive months, jim, of declining. >> and yesterday, right, when the "wall street journal" wrote an article saying that the fed feels the cpi may give them a little leeway, i think they have more leeway, and i think the jobless claims, back to october 2021, gives them more leeway there are stories abounding now that crop prices could be coming down that's been one of the problems.

big bumper crop in brazil, david. so, i think that what could be happening here is that we've got the pause that refreshes maybe the fed doesn't have enough ammo to act right now >> t"the journal" yesterday said they were leaning toward taking a summer vacation from increases. they said yesterday's report makes it easier. >> there is a credit crunch. it's very hard to get a -- if you're a customer of one of these regional banks, they're trying to figure out, well, wait a second, we lend to everybody, but we want to be sure the examiners are okay with our commercial real estate yesterday, i had tanger on, which is -- used to be factory outlets. that's commercial real estate that they'll lend to >> right >> but when it comes to office, david, the office space, you know, david, that what's happening in -- you can rent a whole floor of office as an individual that's how desperate things have become in office space >> i may look to do that

i may look to do that. i need some new space. i may rent a whole floor for myself >> we've got it. >> yeah. >> we do if you want a floor, i think we can make that happen >> there's a lot of buildings that are -- that used to be see-through buildings in china we have our own see-through buildings in the 40s >> that's true >> it's true, you know you think i'm joking >> i know you're not joking. i'm aware there are very -- there are a lot of -- there's a lot of empty space in major metropolitan areas, including this one >> my wife was looking at it >> your wife was looking at space? she'd like her own space >> for your spirits empire >> she just thought, well, why -- maybe we should take one for investment >> why not take an opportunity to have more space >> it's an investment. >> we got to go. >> we'll get cramer's "mad dash," countdown to the opening bell in about eight minutes. don't go anywhere.

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take a look at some s&p leaders. there's tapestry, up 5%. we'll talk about their sales beat, gross margin beat. they guide above inventories, below plan and we'll talk some google and a.i. in the wake of google io yesterday. opening bell is coming up in a few moments, and don't forget, you can catch us any time, anywhere, just listen to and follow the "squawk on the street: opening bell" podcast. 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.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. "mad dash" this morning, and we'll get you an opening bell. yesterday, i spent some time talking about elliott, jim, as they were, along with a couple of other firms, buying a company, notable for a few reasons, including the use of bank debt, good old bank debt, to get it done it was a turnaround situation. now they seem to be coming after another company that may be a turnaround >> yeah, this is goodyear tire they're not happy with rich

kramer, what he's done at goodyear goodyear bought a very good company, cooper tour, $2.8 billion back in 2021. the combined company now worth $3.3 billion and they've taken a 10% economic interest. david, i don't believe that this is going to lead to anything initially, other than perhaps a conversation with the board about what goodyear could do better, and frankly, goodyear's got a huge number of stores, a thousand stores, and there's a question about whythey can't d better, and i had mr. kramer on "mad money" when the stock was considerably higher. he told a good story about technology and a better tire than anyone else >> yeah. >> but david, it's not been working. >> number three tire producer in the world. 70,000 employees by the way, elliott now owns 10%, which is a tiny market cap. you hear goodyear, you think, oh, $3 billion company, it's

nothing. >> remember, there was a big run in the '80s. it used to be a much bigger company. >> they have a lot of debt, so it's a $12 billion enterprise. >> i'm concerned that the company has underperformed, and that they're -- >> you think elliott has something worthwhile to say here >> i do. when i looked at the -- it's interesting. when you look at the board of goodyear, they've got some real heavyweights on it they have retired vice chairman of procter & gamble. president of reliant steel that's a terrific company. the retired president of boeing international. i mean, they can go to these people and say, listen, what are you doing, john mcglade, former ceo of air products, about this? and i don't think this is -- i think this board is probably saying, you know what? we need -- >> elliott's a big game, jim it's saying they can create an additional $21 a share in value from here. we'll see.

but they obviously say they have a lot of levers. >> i wonder if they don't go to one of the cooper tire board members and say, listen, you can't be happy with what happened with our company, meaning, the acquisition david, i'm not trying to say it's one you need to be wedded to, other than the blip. people know it as the blip the blip >> they got blimps they do have blimps, carl. >> let's get the opening bell here, guys, in the cnbc realtime exchange at the big board, solo brands, maker of the solo stove, celebrating its acquisition of teraflame. at the nasdaq, honeywell doing the honors, investor day this week >> we saw darius on "squawk," and i thought he did a fantastic job. i think honeywell is an exciting company. the stock's been a relative underperformer, which is odd given the fact that they have so

much aerospace, but i think that they're not getting their due. it's not like i think that darius didn't do a good job. i think the stock's just very cheap. >> we're watching some of these cyclicals, especially given -- we've been asking where the recovery was in china, and the miss on cpi, ppi, bank loans -- >> it turned out to be handbags. >> that's pretty much it, right? >> turned out to be handbag. starbucks didn't have it we know, avid, this turn lvmh had some but coach had very good numbers. tapestry in china, which i thought was very interesting, of the american companies >> you made the point that you think that the ultra-rich, so to speak, in china, are consuming, but it's -- your question, at least as i recall from the other day, was whether the middle class has slowed >> it felt very much like another country i know the united states. i talked to brunswick the other day.

the high-end boats are selling when i look at retail in america, the best retailers are the ones that charge the most, david. the lower end, the kohl's, they're not doing so well. so, i point out that the rich are spending like the old days it's a bit of a fitzgerald economy. >> really? >> yes >> well, it explains dillard's did say customer activity declined in the back half of the quarter. sales were down. certainly, airbnb's comments about the back half of the year yesterday, we talked to chesky in the 11:00 a.m >> i think that airbnb guidance showed you that they feel a macro call that was the -- that was chesky, the ceo, basically saying, listen, the macro's not that good we're starting to get some break in travel and leisure. we're starting to see that ticket prices have gotten too high you could paint a very positive story about this you've got green maybe coming down, you've got tickets, which is what fed chief powell is worried about, but we still don't see a wage number that indicates that he's winning.

you get wage numbers >> now that we got claims at 264 and microsoft reportedly holding full-time salary steady this year >> well, i think that when you go over -- i had todd on from wendy's yesterday. david, you are not -- it's a trial. but you will not need that additional person who does the -- >> order taking. right. we mentioned this yesterday. >> since they have a couple of day parts now -- >> they're not going to get lisa's baconator order incorrect. >> it seems the baconator will no longer be confused with the chicken salad. >> with the asiago cheese? >> she goes, when you say that to the drive-thru, it doesn't get you right. i wonder whether chatgpt wouldn't see through my order and give me the right thing. >> i think it would. speaking of chatgpt and its competitors, guys, it's worth taking a look at shares of google we've mentioned it, but we haven't actually really gotten to it.

yesterday, shares of alphabet were up. as the day went on, in part because they were getting a warm reception to their io demonstration, essentially, and this morning, no different a lot of the research notes giving them very positive marks in terms of what they did yesterday. the presentation was google io, but really, it was google a.i. >> right >> and here, i'm looking at one note that says they addressed three a.i.-related search concerns, product, cost, and monetization product, they showed compelling search results for natural language searches. cost, their new large language model will offer more for mobile queries. that will lower costs. and then how do you monetize it all? that will continue to be a key question but they seemed to answer some queries about that in a positive way. so, that's quite a move you have had there. of course, remember, we have put alphabet, google, in the

spotlight in part because seemingly of a loss of their leadership to microsoft, something that seemed, perhaps, impossible even as little as six months ago when it comes to search, given microsoft's adoption of chatgpt, its inclusion in bing, their support of open a.i., and what that's meant for what they're going to be able to do in terms of including a.i. tools and all of their enterprise work flow and work-related software products so, google fighting back, jim. the question is, are they going to be successful in competing? >> wall street loved their presentation >> yeah. there's a lot of positive -- >> morgan stanley loved it bank of america loved it i will point out that when wendy's -- and i don't mean to beat a dead wendy's horse here -- but when they wanted to have a chatgpt, you go to nvidia nvidia's got the chips although, there are some notes today about amd being ready to challenge them i'm not buying it, but i understand it.

but when wendy's wanted to go, they were referred to google so, there's an interesting relationship too in the meantime, i don't want to lose the forest for the trees. the market is hideous. >> bernstein said, google io would you wows people, wows investors. >> what time is dan ives -- >> what about him? >> he'll have some comments. >> i think he raises his target on microsoft this morning. >> he's got the kind of -- he's in that, that world. look -- >> bard is now available to everybody. there's wedbush on microsoft >> can i just say that there is a moment of absurdity developing right now about who has the best a.i., and you'll be on the trade desk call, ttt, very good company, and they'll say they have the best a.i. it's really amazing. i immediately shoot them an email, saying, look, you can't just say you've got the best a.i. you've got to tell me what that means for the customer, and i don't get -- david, i mean, no

one seems to be willing to say, if you bring us in, 10% of your staff can be cut isn't that the undercurrent? >> well, i mean, it depends who you ask. many will say, no, this is going to be a great productivity enhancer, and we will not get rid of jobs. what it will do is allow people to focus more on things that are going to allow them to become even more productive, because a.i. will take care of a lot of their more rote tasks, and they will be able to be more create skpi ive and do a lot of other things your point is important, but we just don't know the answers. >> if i ask -- i could ask any company, are you doing anything with a.i.? and they either say, we've been working with a.i. since 2018, but that's a common line, or, a.i. has really been synonymous with our dna and i sit here and i think, am i this stupid? do they really think i'm going to sit there and say, yeah, you've been working with it since 2018 when jensen invented

it with alternman in 2017? look, i want people at home to recognize that there's a farcical nature of every company saying they have been deeply involved with a.i. for many years. it's just not true it's not >> no, well, one company that has is alphabet. they bought deep mind in 2012. they were clearly far ahead. and again, i would note, this move in the stock price now has actually moved alphabet's performance above that of microsoft for the year, and remember, microsoft added enormous amount of market cap as a result of enthusiasm about chatgpt and what it will mean for the company. that remains the case, but this idea that has google really lost the lead, least the marketplace, given this presentation, seems to be a lot more or a lot less concerned that that's the case >> and i know that the word is on microsoft, obviously, that they think that their cloud business -- people are saying their cloud business could double >> yes >> i will give you whom i think

has the best a.i >> who >> who do you think? >> nvidia. >> no, of course >> meta. >> meta. meta is using a.i. to get around the apple strictures they're using a.i. to figure out how to reignite instagram. it's done that there's a chart for you. now, that's a company where the man, he would tell you, listen, i'm not giving up on the metaverse, per se, but they have used a.i. more than anyone to turn around their business and they've worked with jensen huang. >> i wonder if he's sorry he changed the name of the company. should we ask him? >> are you going to ask? >> he's got to be sorry that he did that >> is he sorry i mean, why? >> i mean, not sorry, but maybe regrets it a little? like, maybe i was moving a little too fast there? >> he's not going to -- >> maybe i got a little too taken with the metaverse >> there's no new coke going on here he tries very hard to say, listen, we're still losing a fortune. don't think we're done losing a

fortune in metaverse we'll lose a fortune every quarter. he said that on the last call. i'm using the term, lose a fortune, because i'm convinced that when you drop $3 billion, that's -- >> that's a lot of money >> but he's been involved. look, the company, again, i don't want everyone to think that we're truly blasting the idea that every company has deepened a.i., because it's just not true >> no, i think the market's getting more discerning by the day. we talked about consumer pressures in retail. sonos is going to be the big example of that today. surprise loss. they do guide below on the second half. gains for the year have been wiped out. >> very disappointing conference call, because of course they invoked -- i'm so sick of the -- worse than the canary in the coal mine is the dickens, best of times, worst of times the best was that the quarter was good and then the quarter got bad, and then they blame it on the banking crisis.

it was very jimmy carter cardigan sweater malaise it was and i expected more from them, frankly. >> well, they're not the first united airlines said bookings suffered in the wake of svb as well costco had some issues some say it was weather. >> home theater? home theater i'm not going to get that home theater. have you seen the pacwest? cancel the home theater because i don't know about first republic no you get the home theater because you want the home theater. apple didn't -- apple has some things that are expensive that i bought the one that looks like the beehive, you know? i didn't think, like, i got to hold off because of the problems with silicon valley. i did not say that signature's making it -- so, you can say, well, jim, we you're thinking about buying a whole floor no, i'm just saying that the idea of blaming it on that how about blaming it on the idea that the consumer doesn't want to spend on, right now, that everyone who wants one has one i think that the story --

enrique, the ceo of hp, is an honest man and he told me, you know what? everybody who wanted a pc bought one. and therefore, we're not doing as well. >> it's the weber grill scenario >> by the way, if you go to ollie's, your flyer this morning, there's a host of grills for sale at prices that just -- they're insane >> really? crazy eddie kind of prices >> crazy eddie yeah >> i'll take a look. i might want another grill or new grill or an additional grill. >> there's stuff on gildan that's for sale. >> who >> the t-shirts. like fruit of the loom >> nope. thanks >> sorry >> okay, how about finish? do you know what finish is >> finish? >> finish. >> finish? >> it's a dishwasher it's a cookbook. >> it's a dishwasher what is it >> it's finish for dishwasher

it's dishwasher liquid you put it in your dishwasher. it's for sale on ollie's >> david and i are more pedestrian when it comes to appliances, i think. we're like, kenmore. >> i don't know what he's talking about. is it an actual dishwasher or it's the dishwasher detergent? >> it's dishwasher liquid. powder >> you happen to see this new hindenburg report on iep >> you see the segue goo goodyear blimp, hindenburg you are awesome. >> thank you, thank you. these guys don't stop at hindenburg yesterday, we had carl icahn's response to a certain extent to a report that took down his holding company. enormously in value. but -- there it is just to give you a look there. >> wow >> down again today. >> wow >> down yesterday in part because they said the u.s. attorney apparently read the hindenburg report from may 2nd and decided to take a look around nothing has come of it, other

than they're investigating at the u.s. attorney's office, but they did the same thing with nikola hindenburg put a report out and the u.s. attorney in the southern district said, that's an interesting read. let take a look. >> if you're a u.s. attorney, why would you not? it's not fair to icahn, frankly. >> no. that's what our law enforcement is doing they're looking at short reports, going, oh, that reads interesting. >> they're not getting -- >> by the way, they got convictions on nikola, so trevor is -- he got convicted >> i get a press release from them literally every day >> back to hindenburg and iep. why am i mentioning it they focused on the latest filing from the company and the fact that he has now pledged 202.6 million of the units on margin he takes the money, it would seem, and puts it in his investment fund, which, by the way, is down 53% since 2014, from 2014 to 2022. they put those numbers in there. i looked at them in the past, in

iep's filings, but that gives you a sense here the 202.6 now is 6.5 value 181 units had a $9 billion value then, but the thing has dropped dramatically in price. no word from carl. again, we have been trying to get him. i know scott wapner has had him on his show so many times, been trying to get him to come on you can imagine why he might be reticent, correct use of the word here, to say anything >> you know, look, this is one -- can i just say that when hindenburg went after square, that did not do much to square but we caught a double downgrade today on square. >> really? >> from an outlook -- clsa and while it's -- square is now block. initially, block did not go down, but now, block is under heavy pressure, and there's just a sense that it's part of the

vast scrum that is paypal. have you been following any of these companies that are -- they're all getting killed >> why >> because they're all competing with each other, and my -- my guess, not guess, my considered amount of work that i have done is that apple pay is killing everybody. >> apple pay the growth in financial services at apple >> i don't know if you use apple pay. do you >> i think i do. >> you don't even know when you're using it. i go to whole foods, i hold this up, next thing i know, i bought it >> it's your iphone. >> you get there i had forgot to take my wallet to whole foods just forgot. >> where is my phone >> i was taking the kids to -- there's a mr. softy on the corner we didn't have enough cash i said, do you take apple pay? she said, oh yeah. >> full faith and credit of apple, which is a heck of a lot better than the company i know that's going to default called the u.s. government. >> five bucks for one vanilla cone >> it's a good racket. >> it's worth it

>> we've just got a better chance of getting through the next month, this or the u.s. government, in terms of getting paid >> apple without a doubt. i'd much rather own apple. >> you had some fiery thoughts on the debt ceiling this morning. >> i'm very worried. >> you're on the verge of arguing that the gop wouldn't mind a recession into '24. >> whoever has a recession does what -- >> the incumbent loses >> so, you know, mccarthy, i think, is playing with fire if he comes to the table with a deal i'm sure that party wants -- doesn't, you know, this is a way -- history says that biden's defeated if they go to the mat on this. interestingly enough, if you want to know how horrible it is to default, the french, after losing the franco-prussian war, still refused to default, got a loan from morgan it would be interesting if the u.s. government got a loan from jamie dimon. >> how about just from apple maybe apple can give us some cash >> just print. >> i just --

>> they got like $150 billion. >> they just did that big deal maybe that was so they could tide over janet yellen and her end endless jeremiah >> if you polled our viewers about which is a better balance sheet, u.s. government, six-month t-bills for 5.3% or boig apple, you would buy apple. >> apple you trust >> tim cook is so much more responsible. i got a hundred guys who are irresponsible down there they hate each other >> meantime, take a look at the market pretty broad-based weakness here only a couple dow names are green, namely nike, procter, down 345 you can get in on the cnbc investing club with jim. sign up and find out more or use the qr code on your screen it takes you right there as for bonds, ten-year back to 3.35% and just below 4,120 on the s&p. don't go away.

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a very good quarter. i can't tell you how well, it runs so well so if the market comes down and you're looking for something to buy because you think it might be over done, pick a microsoft or ulta and i prefer you pick ulta. >> even with the el quarter, that didn't -- >> ulta is domestic and ulta is in target where they're doing well and dave kimbolt is a terrific ceo. >> we used to joke about this, but it's a $25 million company i don't know if you ever - >> i've passed by. >> never mind. >> i have the ulta app and between 340 and 4 i get it i think it's about a stock, but it's about a men's fragrance. >> i do understand finnish jetdry is for sale. >> ollie's. >> the dish washing liquid. >> only one of us puts the dishes - >> i do a lot of dishes. >> i don't do any cooking.

>> there you go. look that. >> only one is for sale. but go to ollie's and you get the sense of who has too much inventory. that's the channel of last resort where i buy great books that have been in a flood. >> smart. >> you have to pull the page. >> what do you got tonight >> darling kind of what you say to your wife when putting -- >> always. >> i have -- >> hello, honey. darling. >> darling is a company that does alternative fuels, as hot as it gets and i think it's going to be acquired anyone would want to buy them. your friends at exxon. >> i thought you would say that. >> i just wanted to say your friends. >> exactly. >> we'll see you tonight might have interesting market action to watch as we're down to 4115 when we come back, dwyane johnson will join us to talk about the business of tequila, the media and a lot more when we return

good thursday morning. welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber live

for you as always at post nine of the new york stock exchange take a look at stocks, continuing to deteriorate through the morning. we're down 387 on the dow, almost 400 points. s&p down 0.6 and the nasdaq fairing the best, bitcg tech a little defensive today we're 30 minutes into the trading session. three movers we're watching, disneyon a decline, reporting mixed q2 results, direct to consumer business seeing a sharp loss in subscribers. we'll discuss that more in a moment theme parks were good. robinhood rallies announcing 24 hour trading on weekdays with stocks and etfs. the company has yet to post a profit since going public in 2021 and then finally watching the regional banks again, pacwest plunging, 9.1% decline in deposits last week, that update putting regionals under pressure which doesn't help the mood today. what is interesting is that this is the second day in a row that

better inflation numbers, moderating inflation, is leading to a defensive reaction in the stock market the cyclicals are not being bought it's more defensive and big cap tech why is that? the market is already expecting the fed to pause, so now we're worried about growth and i think there's reason to be worried about growth you saw the spike in initial jobless claims 22,000 extra filings last week for jobless claims goes up to 264. that was the level that none of the economists had expected. you want to watch that it's a weekly indicator. consumer price, there's deterioration on the back of slowing growth and keep an eye for jobs. >> china didn't help as they miss on cpi, ppi, m 2 growth, bank loans and you have a lot of materials and commodities lower. copper i think is basically down to the worst levels since january i think, as you're going to be looking at a lot of -- the import demand in china is really

interesting. not at all the way some expected when the came out of covid. >> 0.1% rise in inflation and yes, all the inflation there was in services but a decline in goods. versus march's 0.7% year over year inflation it does pour cold water on this idea that china's recovery is booming. that was supposed to be part of the bull case for investors, global growth would rebound because of china it's not all bad news. i don't know if you were talking about tapestry last hour but a strong quarter there the coach brand good in china and china sales inflected, use the word inflected, up 20% in the quarter. the luxury consumer is doing okay the commentary on the cfo. we return to revenue growth in the quarter, improvement in traffic, sales increased 20% with across stores, digital and time, we've started to see an uptick in travel including gains in our hong kong and those are busy as well bottom line, it's not all bad

news, but the weaker inflation numbers and some of the other weaker reads we got and manufacturing was disappointing and import prices in china maybe not as good as we expected >> estee lauder versus taptry quarter in china, given both were so related to what are very different trends seemingly, at least? >> lauder is more exposed on the travel side of things when there's cross-border travel from china. they do well they're in a lot of airports they're in a lot of stores i think it's also setting expectations the market was really excited about the chinese boom, and it's just not necessarily happening in a way that has been expected. tapestry has also taken the covid crisis to have specific things, it's focused on its brand, and its sort of reinvested in the online e-commerce business and did really well during covid, during the lockdowns on e-commerce. that's helped the coach brand. again, it's uneven

what explains 0.1% inflation in an economy that is reopening and services are supposed to be booming? that's not what's supposed to happen here in the u.s., it is what's supposed to happen, so it's -- it's supposedly, you know, good news if you look at what's happening on producer prices especially some of the deflation, outright deflation, and some of the goods prices. >> on ppi. >> yeah. it's really happening in services right now and it's going in the right direction. >> all right so the fed going to pause then for an extended period of time >> the market is - >> take the summer off as the "journal" indicated? >> the market is pricing in a pause but also pricing in cuts as early as july and there's a disconnect between what might happen. >> given your conversation with john williams the other day. >> no cuts none of them are talking about cuts nobody i talked to on wall street is talking about cuts do you hear anybody expecting cuts >> not really, no. >> swap market telling us otherwise.

news from the fdic on deposit insurance. to leslie picker on that leslie >> hey, sara we know that protecting the uninsured depositors among silicon valley bank and signature bank were on a sizable hold on the fdic fund. the fdic out with a proposed fund with the biggest banks with the most uninsured deposits funding that bill. the fdic is proposing to collect an assessment at an annual rate of 12.5 basis points over eight quarters beginning in 2024 the rate was derived from system that the two march bank failures cost an estimated $15.8 billion to protect uninsured depositors. the fdic says almost all of the special assessment will be covered by the biggest banks, which according to the fdic, benefited the most from the systemic risk determination. 113 banks will be subject to the assessment with banks whose assets are greater than $50

billion, paying 95% of it. the special assessment rate excludes the first $5 billion in uninsured deposits so the way each bank calculates how much it owes is by taking the amount of uninsured deposits at the end of 2022, minus $5 billion, times 0.00125. i did a quick rough math looking at jpmorgan, for example, their 10k showed uninsured deposits about 1.4 trillion at the end of 2022 applying that logic, as laid out by these proposed plans, jpmorgan could be looking at a rate of $1.7 billion for this fund the fdic said it studied whether banks could absorb this rate and assuming it's collected and pulled forward in one quarter only banks subjected to the assessment would see an average reduction in net income of 17.5%. somewhat material to margins here the fdic is set to vote on whether to issue this proposal at a meeting that began a few minutes ago.

if so, it goes into a public comment period, so not set in stone, but some sizable numbers we're talking about here, guys >> leslie, this was expected, right? we knew that the big banks were going to have to be paying for this i think the question from here, is it going to go even farther what are they going to do about the rest of the uninsured deposits in the system >> yeah. it's great question, sara. we did know this, it's part of the fdic's charter essentially to have, you know, some sort of a rate paid by the banks that contribute to the fund to cover these types of events. the question i think looking forward is whether the systemic risk exception will be used in cases if there is, you know, future failures. i think that's the big question mark, and, you know, as we look at the way that this proposed plan is laid out, it would be payable over eight quarters. by the time this happens, you know, will we be through much of the turmoil that we've seen, or

will we need to kind of push this out further to see if those system, $515.8 billion in terms of a gap to the insurance fund, what does that look like at the beginning of 2024 if the turmoil continues. those are estimates and change all the time there are still various assets in receivership that have yet to be unwound those numbers are a moving target there but, obviously, as this unfolds, things could change and so i think that's the big question here. >> okay. leslie, thank you. leslie picker, big banks under pressure, have been all morning long most of the sectors are under pressure right now only consumer discretionary and communication services are working. big cap tech, a.i., defensive, coming to the rescue again as we head to break, the road map for the rest of the hour inflation showing signs of easing could it mean a fed pivot this summer liz ann saunders is doubtful and

explains why. >> disney weighing on the dow following streaming subscriber losses our guest is recommending the stock saying bob iger, the company's ceo, will position it for a profitable streaming future. >> dwayne "the rock" johnson with us, talk his tequila business, wwe, a. d res .ianmo a "squawk on the street" continues. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or

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. a second consecutive quarterly decline for disney plus, at least subscribers the

company reported 4 million subscriber losses, narrowing due to higher streaming prices in terms of loss of dollars our next guest remains confident to create a profitable platform, maintains a buy, lowers the price target to [ inaudible ] 125 to 130 good to have you here. >> good morning. >> the market right now saying they don't like this quarter what did you like about it >> i think we learned three things in the quarter. number one, the streaming losses were less than expected and looks like iger has the company on a path to eventual profitability. the other two things we learned were, streaming losses, sublosses, were more than expected and does seem like disney is going to end up buying the one third from comcast, your parent company, hulu. >> paying perhaps as $9 billion based on the ownership stake and put. >> a minimum of $9.3 billion. >> thank you

we'll take the money can disney actually in its balance sheet, we don't talk about it as much perhaps, it's a fairly levered company at this point given the debt it took on during the pandemic and additional $9 billion, does that hobble it if it does go according to the original plan of them buying what they don't own of hulu. >> it's not going to destroy them disney should be levered two and a half times ebitda and with the increasing cash flow next year taking on the 9 billion, give it $10 billion in free cash flow, levered 1.2 times next year not a problem. >> free cash flow numbers are below what they were in 2019. >> of course they are. >> are they ever going to get back to the numbers they once saw? >> that goes back to the question, will the linear business ever d s-- steam make p the losses of the linear business it's going to take a while netflix is sort of the premier in streaming they're approaching a 20%

margin disney not the scale of netflix. disney may get out of some of the international markets. disney will have a more curated service and probably has better brands and franchises. >> yeah. >> a lot lower margins. >> never going to get to the 40% margin the cable business used to have. >> speaking of that business, i mean, the declines continue and seem to be speeding up in terms of cord cutting. does that put pressure not just on disney but on all of these companie companies relying direct to consumer. >> it's shrinking quicker than we thought all the major studios had advertising down 10 to 15% this quarter. subdeclines 6% and accelerating. it did seem like disney's talking about the eventual pivot of espn from a linear cable service to a streaming service coming sooner than we would have guessed a year ago i'm not saying it's going to happen overnight, but it's going to be sooner than we would have thought. >> as you bundle those, does the

consumer have less app fatigue and churn, does that normalize over the long term >> there is nor churn now. i do think there's going to be more consolidation what we're seeing right now is cost cutting disney is laying off 7,000 of probably 80,000 or so entertainment employees. paramount announced another big cut. first we're going to have cost cutting and then eventual con consolidation. >> hulu and disney plus, which was the commitment, bank of america analyst brought this up and i agree as a mother who has disney plus, there's a lot of r-rated stuff on hulu. my kids know how to use disney plus and they can press everything and i feel good about it >> can your kids out smart you on parental sdploels. >> probably. >> you will be able to set a control that says you can't put

r rated, can't hit the hulu button or r-rated stuff. >> how -- are you optimistic about that is that a thing that makes sense to you a strategy? >> i would prefer disney to sell its two-thirds of disney -- of hulu to comcast, but the fact of the matter is, comcast controls the situation and they have the put so i think disney is going to have to accept it and bob iger did pivot on the call a quarter ago saying where are we differentiated on general entertainment and now the combination of general entertainment and our franchises makes for a good consumer experience. >> parks up 17 in travel we've had the cruise lines say things are great the lodging companies beginning to think negatively about it back half. is there reason to think parks soften as well >> i don't think the parks soften by the way, christine mccarthy did call out the cruise business as being one of the stronger businesses there what you're seeing is a little

bit softening of margins domestically, partially with the inflation, partially with the new union contract at disney world and partially tougher comps because they had the 50th anniversary of walt disney world last year. the offset is the international parks are doing much better, particularly in asia they had lockdowns last year they don't have it this year those are bouncing back nicely. >> yeah. well, this stock not bouncing back right now, down almost 9% of course alan, despite what is your positive forecast, should point out as well, warner brothers discovery and paramount down sharply thank you for joining us. >> thank you coming up this morning, dwayne "the rock" johnson will join us and talk new milestones for his tequila business and his take on the media landscape when we come back in three.

clearly the input costs in the restaurant costs have gone up, commodities or labor, we've taken some pricing an haven't passed it all on doing a nice job continuing to expand our margins creating better experiences for our customers to come through the restaurant more often.

>> ceo of wendy's on "mad money. inflation and pricing front and center for many businesses our next guest you know from hollywood hits but behind some very successful consumer facing brands including teremana tequila. joining us this morning first on cnbc to talk about that as well as wwe, disney, a.i., dwayne "the rock" johnson good to have you back. welcome. >> thank you good to see you, carl. >> you came on our air when you first launched teremana and we talked about your aspirations in the business, how far your family had roots in this area. i wonder if you had imagined this kind of case volume growth back then? >> no. not at all if you think about it, carl, when i first came on and we started talking about it, we were launching teremana at a unique time, what i mean by unique, march of 2020, as the world and our businesses were shutting down. i did feel at that time that we had a shot to create an experience for the consumer even though, as we all know, at that

time, consumers only wanted what they were familiar with. being a new brand in a marketplace we had our challenges, but we did create something special and now a few years later down the road i'm on with you guys and we are teremana has become the fastest premium spirit in u.s. history, fastest growing spirit in u.s. history and the fastest to reach the 1 million case milestone it's really been an incredible journey and the best part about this journey is we're just getting started and we have a lot of work to do. >> we've seen this kind of model before i mean what do you say to viewers who think that's fantastic, dwyane, congratulation, you have to flip it and sell it for an amazing sum to a spirits giant >> there is no exit plan the exit plan is -- it would sound great, that's a splashy deal, hey, billions of dollars and let's all go to hawaii and hang out for the rest of our lives. but right now, no, there is no

exit plan because as i said before, years ago, when i spoke to you, i created teremana to be a legacy brand, and i'm a long gamer, i'm in it for the long haul and the goal is to continue to create experiences here domestically with our u.s. consumer, but also really in a nationalized brand and become the very first true international tequila brand in the marketplace. that's going to take a lot of time and also you were mentioning with the roots, tequila goes way back with my family. we had incredible partners down in mexico, the lopez family as well, this is a family business. it's a legacy business, and this is a long game business for me with teremana tequila. >> isn't there an agave shortage is that still a problem? just because of soaring demand and everything that's been happening? >> i don't necessarily look at it as a problem. i think every year cyclically with the growth of agave vi,

they have to grow up, and with us at teremana, looking at our agave, we only use the most fully mature agave, these are issues we continue to work through and work around. but we have our lopez family have been generational agave growers for a very, very long time, so i think we are positioned nicely to continue to manage the ebbs and flows of agave. we have our great distribution partners, so we are looking at agave and seeing where we can continue to making sure that we're always taking care of it. >> it's hard not to notice the xfl ball over your shoulder and wonder, what's your view is right now about the state of american and international sports, whether that's football or clearly wrestling there's been big deals in that space? >> there's been some big deals in the wrestling space, we can talk about that in a second.

d just connected with vince the other day. the xfl, like teremana, like the products and brands that i like to create, it's a -- that's a passion project for me with football as you may know or may not know, football for me was my dream, and the goal was to play in the nfl and went to the university of miami and played with great players who went on to become hall of fame players we became national champions that dream didn't work out for me as it didn't, it's amazing and i'm very grateful that life can come full circle i wish i had the xfl when i was playing at the university of miami. i didn't now to acquire the league from vince mcmahon and create these other opportunities for players has really been a dream come true for myself, danny garcia, my long-time business partner, jerry cardinal of red bird capital as well. >> dwyane, it's david. your dreams have done just fine. nobody is worrying about them now. you mentioned having spoken to

mcmahon. i'm curious your thoughts, i had emanuel in here yesterday actually, that merger is going to be later this year with wwe and ufc. what are your expectations there in terms of the power of that combined company and how difficult it may be for ari and vince to get along or whether you see smooth sailing >> i see smooth sailing with those guys they've known each other for a very long time we all have. i see smooth sailing with this this has been a long time coming when you think about where vince started, i often talk about my 7 bucks moment, i had bucks in my pocket when i was cut from the canadian football league, vince had 7 bucks moment as well when he leveraged every dollar he had for the first wrestle mania. years later he creates a merger with ari in the billions of dollars and i see -- when i say smooth sailing, i mean, you know, these guys are adamant on creating an incredible conglomerate that's going to entertain the masses and between

wwe, ufc, bull riding and probably some of the other things coming down the pike, i'm excited about this merger. >> dwyane, everything we've heard and read about the writers struck in hollywood is that the two sides are far apart, that a.i. is this sort of new dynamic we've not seen in prior negotiations, and in addition to having a new round of streamers who don't have that studio legacy relationship, has it thrown the community into turmoil or not >> it has made our community very aware and in my opinion very sensitive to what's going on this writers strike, while still a -- unlike the writers strike that happened in the late 2000s this is a little different with a.i., advent of streaming and what residuals look like yes, so conversations did fall apart, and i believe they are, as we know, far apart.

i'm not in those conversations behind closed doors, however i am making calls behind my own closed doors with the intentions of coming back to the table and let's have dialog and it's easier said than done. at the end of the day, writers are the backbone of our entertainment industry, as are the studios who are financing these ventures as well so you know, as these conversations continue to fall apart, which i don't like, again, i'm encouraging everyone who i know to come back to the table, but eventually this continues to -- this will impact, it will fan out and impact our production, crews and their families and that's what we don't want. however, at the end of the day, the most important thing here is to make sure that the writers are taken care of, that they are seen, because they are the backbone of our business. >> yeah. i was going to ask, if you have

any thoughts -- i'm sure you've been thinking about it and having conversations with folks -- how compensation does need to change in the new world of streaming with the economic models >> yeah. you're absolutely right, sara. i think it requires people to get in the room, people who are open and open to expanding the opportunity even if it's not in front of us or a model we have seen we can work off of and be referential to, we have to create a new model it requires people to get in the room and be open to that i am encouraging where i can and helping where i can. ultimately, though, it's how i am in my dna believe that we're going to get to a good place and that everybody is going to walk away from this being very happy and we're going to get to -- get back to doing the thing that i would like to do, which is creating content for the audiences. >> yeah. dwyane, speaking of content, we've been talking about disney this morning after its earnings yesterday. you know, we still continue to

see the significant decline in the linear cable networks and, you know, they're paying more for the nfl, more for a lot of things, but there are fewer people actually subscribing, so to speak, to the old cable video package. i'm curious to get your thoughts in terms of how that continues to evolve as an owner of the xfl, in terms of who pays for these sports rights over time? >> i think it's all going to work itself out. i think as it is i think in the spirit of being long gamers, i think we got to continue down the path that we are, and again, when i say it's going to work itself out, it always has a way of working itself out we look at these numbers, we look at the margins, we see where we're declining, i say we, i mean we see where things are declining, but i'm confident that we're going to stay on track and confident we'll always goat a good place. >> finally, people have talked about you as a wish list in terms of people who one day

might run for office i know you've sort of demurred on that question in the past we're getting into an election cycle. if you are incrementally thinking about that over the long term a little bit less or a little bit more? >> right now, i am only focused on my family i love our country and i've said that in the past i love our country and everyone in it. but the most important thing to me is being a father and raising my daughters and as a few years ago, things got very serious and i was having meetings behind closed doors again, that weren't necessarily enkournlgz by me, by the way, but they came to me, and i really had to consider and take my time then i realized having these conversations, being willing, again, to stretch out the aperture here, and see what's

possible, i realized the most important thing for me is just being a father to my little ones right now, and i'm a proud girl dad and i have all daughters, and i have a 21-year-old daughter and we grew to say, bee i had her in my 20s and as we know, carl and david, sara, you know this too, men in their 20s are like men as teenagers. a lot of my growing up with my first daughter. >> i do know that. >> you do. i know you do. our wives do too as well and i grew up in a way with my first daughter and i was always away and i didn't want to be in a position -- i was always away working and didn't want to be in a position where i would be completely pulled away from my little ones now. my important thing is to be a father to my daughters. >> well thought out answer, dwyane certainly between your name recognition and business success, eyes are still going to be on you.

appreciate the update and great to see you again. >> thank you i appreciate it. foo good to see you too. >> coming on after dwyane johnson, feel like i need to lift more at the gym your update at this hour fox news hit with another defamation lawsuit from a woman who specializes in russian disinformation nina jan cowitch says the network promoted lies about her that generated serious threats to her safety. the lawsuit cites parallels with the case from dominion voting systems. kevin mccarthy will no longer support freshman representative george santos he' bid for re-election, however, mccarthy did not call for santos to resign over the charges he faces which include wire fraud, money laundering and theft of public funds santos pled not guilty. >> peloton is recalling over 2 million exercise bikes over safety concerns. according to a release by the

consumer products safety commission, the bike's seat post can break during use, posing fall and injury hazards to a user this marks the second major recall the fitness company has faced. shares are trading lower again this morning carl, back over to you >> i'll take it. thank you. keeping an eye on the regional banks this morning, they've been trading lower all morning long really have not seen much of a bounce even from the recent lows pacwest at the top of the list down 19% off some negative deposit outflow data that it reported this morning. we're going to talk banking uncertainty with liz ann sonders and the impact it's having on the rest of the market, next

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our next guest says there's no way the fed will pivot to rate cuts so quickly. joining us chief investment strategist liz ann sonders i don't talk to anyone who expects rate cuts yet the swaps market is pricing this in. why is there a disconnect? >> well, the swaps market, you have to look at the range of positions that have been put on and what's really happening is, it suggests either the fed pauses but then stays there for a while, or there's something more calamitous and they have to cut aggressively you aggregate the data, and it shows the possibility of rate cuts starting in mid summer. you know, understanding how that data is collected and then aggregated i think is important. by the way, it's not impossible that the fed would start cutting. it's just sequel, meaning, if inflation stays about where it is, even if it needs to trend

down, we don't see something more calamitous in the financial system or we don't see significant deterioration in the labor market, then the fed stays in pause mode. it's certainly possible they could start cutting but not under the circumstances. >> is that a risk to the equity market here given when they don't cut, that's an effective tightening, right? >> well no it's going into pause mode it allows them to assess the impact of monetary policy tightening they've already done. the most aggressive cycle in 40 years, and even though the fed concedes that so far they've been battling an inherently lagging indicator that is inflation, knowing the effects of changes to ratesant in the balance sheet are in the future, the pause is just that, a pause to assess. what i'm not sure i fully grasp at this point is, how much of the -- it's not across the board

strength in the market, it's up the cap concentration, whether a pause is sufficient to keep the market doing well or is the market actually betting on rate cuts and if it is, is it not paying attention to the conditions that would come into play to give the fed a green light to cut i think there's still some disconnects in the narrative out there, but i think it's -- for other reasons, not least being the debt ceiling, there are clear risks right now and that's one of the manifestations on day like today. >> what are you telling your clients about the debt ceiling and how to be positioned around that >> well, i wouldn't try to position around that i think that that's a fool's errand to trade around a situation like this other than knowing it's a volatility driver and clearly part of the uncertainty narrative right now. everybody can remember or look

back at what happened in 2011 where you came to the brink. even then we thought there was not a high risk of an actual default but you have the s&p downgrade of u.s. debt and an 18 or 19% drop in the equity market and a spike in volatility and i think that the partisanship and brinkmanship is maybe on the worse end of the spectrum relative to 2011 i think the best bet is an 11th hour 59th minute deal, but i think it's coming into focus right now and it's part of the reason for some of this recently weakness i wouldn't try to trade around it. >> overall, you're pretty cautious what is the strategy >> well, so, obviously, it depends on the investor. we continue to think that you have to be careful about sort of chasing the concentration trade here that a market that is heavily concentrated with leadership just in the small handful of stocks, is not

healthy. you and i had this conversation probably somewhere around the lows last october, that was the kind of environment you wanted to see, where the indexes had taken out the june lows but under the surface, it was better you weren't seeing as much weakness under the surface now is the opposite situation where the leadership is concentrated up the cap spectrum keeping those indexes afloat but under the surface you're seeing weaker breath and leadership that is a bit more reflective of the macro environment. so we think you want to be somewhat cautious here, absolutely stay up in quality within equities. don't have to full-scale sell everything focus on factors that have a quality wrap around them, interest coverage, low volatility, strength of balance sheet, you know, high cash, low debt, positive earnings revision and surprises, so from our factor perspective, that continues to be what we're

advising clients who are equity oriented to focus on. >> liz ann, thank you. it's good to check in with you. >> you too. >> liz ann sonders of charles schwab communications sector the only sector positive and that's alphabet the ceos of crispy crimo and utz next hour. as we head to a break, cnbc celebrating asian american and pacific islander heritage through business leaders here's a podcast host. >> what i would love for people to learn and take away from my journey as an iranian american is that when you stay financially curious, that's when you can actually start to build wealth it is the ultimate foundation for getting answers and leading you down the paths that are well aligned with your goals.

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the dow is lagging this morning. disney is part of that index and so that's down over 8% therefore, now statistically a significant index i like to call it bob isn't like when i say that. >> it is irrelevant. price weighted is not a good index, has never been. market cap weighted is the voting machine everyone is voting for companies they like the most and price matters and the number of shares outstanding and that's market capitalization. >> and that takes us to the s&p which is also down about a half a percent the, bob what we're an hour and 15 minutes into trading. >> sara was mentioning this, this is good news on the ppi in china and this is good news for consumers, ppi is a little lower than expected, and yet, you see the stress on the cyclical names, on metals and mining stocks that have been weak recently i want to concentrate on those the sector, you know about the bank thing

we've been talking for the last couple weeks about material names weaker, trending down. energy trending down metals and mining stocks related to material names are trending down here. i just want to show you metals these are the metals themselves. copper at the lowest level since november right now nickel, the base metals have been declining in the last few weeks. silver near the lowest level since november if you look at some of the etfs around these, you can see, for example, dvb is an amalgam of the copper and aluminum futures contract that's the lowest. see how it's been trending down in the last few weeks. same with the steal etf. a big basket of all global steal manufacturers. see that we're at a new low for the year essentially lowest level going back to november you want a really interesting way to look at this, south africa, it's a commodity producing company that put out metals and a lot of gold, platinum companies are in south

africa and look here, same situation. drooping the last couple weeks we keep talking about this again, sitting near the lowest levels for the year. so you can see, metals and mining stocks we've been talking about free port, cf, the steal names, basically at levels lowest levels for 2023, maybe not november lows but they've all been moving down recently here this happening in the hydrocarbons we've been talking about the global -- here's industrials caterpillar, cummins, the lowest levels of 2023, not 52-week lows but moving down as well. hydrocarbon like apa, all the hydrocarbon names back to levels sold back in early march essentially. so the point here is the commodity complex has been hit badly. as i should point out, lower commodity prices are good for consumers. we act like we're on the side of the producers themselves or the

beholders of the stocks but this is overall good news it highlights what i think liz ann sonders was talking about, we had the weird bifurcation in the market, an ecosystem of tech stocks doing well. nvidia, microsoft at a new high yesterday, and a small group of defensive small stocks procter & gamble and coke are doing well other than that, advanced decline line has been terrible recently it's a problem for the overall markets, this bifurcation causes tremendous frustration for investors because it's -- the messages are very mixed now. >> well, it's ai anddefense, that's what's in. >> right >> goes up another 4% today. that's what's happening the market not fall even further i think the cyclicals, bob, it seems like the china news is definitely not good news on inflation, because if you had that with their pmis and import prices, not the boom we're expecting. that explains the commodities. in the u.s., it does feel like we're kind of going from worrying about inflation to

worrying about growth. i think the jobless claims took a lot of people by surprise. i know massachusetts and kentucky were big problem states and these numbers can be volatile it could signal a more abrupt shift in the marketplace. >> we want those slightly weaker numbers, though? >> fed wants - >> that's what we want, isn't it >> then we have to price in recession. as you've been pointing out a million times, this market has not done it's not in the estimates. >> it's not in the earnings yet. second half of the year, very stable for the year, slightly higher number we're up about 1%, that's the estimate for 2023 over 2022. it's a tough one to figure out right now. what side of the recession debate are you on is really the key question right now i think the market is on the side of the soft landing 18.5 times forward earnings estimate, that's not a recession multiple 1% earnings growth for 2023, that is not recession. we usually go down 10% to 20% in earnings not happening. >> i think it all depends on jobs, that's been the strongest. bob, thanks. dow, s&p and nasdaq all in

the red, as bob mentioned. we'll continue to monitor the selloff. we're down 300 points on the dow. treasuries are also getting bought inflation expectations coming down as well in the market we'll be right back.

welcome back to "squawk on the street." the white house backing a push to speed up energy project approvals ahead of a hearing on permitting our pippa stevens has more on that >> that's right, david permitting reform is front and center in congress with hundreds of billions of dollars in infrastructure projects at stake. ahead of the hearing on senator manchin's bill, the white house is throwing its support behind these efforts. the administration is urging bipartisan support for things including modernizing 150-year-old mining laws, expediting transmission projects

for green electric power the proet posal touches on countries across the entire energy ecosystem you have lithium miners trying to get projects off the ground lithium americas just began construction at its nevada mine after a permitting process that took more than ten years then you have companies involved in transmission lines like quanta services and mastec, which mentioned permitting challenges on the latest earnings calls the ceo of nat gas eqt saying permit reform is inevitable because our ecosystem is maxed out. williams, a heavy user of pipelines, has also been pushing for reforms. this is not a done deal and similar legislation failed to pass last year david? >> that, thank you for that update. i know that permitting is very important, certainly to the oil and gas industry

before we go, take a quick look at a couple of these stocks shares of alibaba were up rather sharply. most likely because of jd, which reported its first quarter numbers. profits were better than expected top line revenue number, in other words, was a bit better than anticipated, at least in their marketplace business and so jd.com's success in the quarter, so to speak, at least versus what people anticipated seems to be helping shares of alibaba. that had been a great performer for softbank, which is out of that stock, but made $72 billion over the time it held it more than 20 years. "squawk on the street" continues after this stay with us

good thursday morning. setting the agenda for us today, a late breakfast with dave we'll get his market reaction post inflation numbers and his recession outlook for the rest of the year. >> bill rudin with us at the exchange, the commercial real estate crisis brewing in some of

the country'